1986-05-26

ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table in both official languages the Government's response to 25 petitions.



FINANCE AND ECONOMIC AFFAIRS


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, I have the honour to present the second report of the Standing Committee on Finance and Economic Affairs, in both official languages.
[Editor's Note: See today's Votes and Proceedings.]


BUSINESS OF THE HOUSE
Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, I would like to designate tomorrow as an allotted day.


DISPOSITION OF BILL C-94
Ramon John Hnatyshyn: Mr. Speaker, there have been consultations between the Parties with respect to the first item of business to be considered today under Orders of the Day, Bill C-96. I think you will find there is unanimous consent to accept an amendment to the motion. The agreement between the Parties is that this Bill would be referred to the legislative committee now seized of Bill C-92.


Mr. Deans:: 94 and 92.


Mr. Waddell:: They are seized of C-92.


Ramon John Hnatyshyn: They are seized of C-92. We are now considering C-94. If that is clear, Sir, then congratulations.


Mr. Speaker:: It sounds like Monday morning bingo.


Ian Deans: Mr. Speaker, the latter part of that is correct, if I understood it. The problem I raise again is that tomorrow is an allotted day. Presumably there will be a Private Members' hour. I am most eager to find a way to resolve the ongoing problem of Private Members' hour and what happens to the sequence. I would very much like if, together with my two colleagues, we might spend some time today trying to find a satisfactory solution.


Ramon John Hnatyshyn: Mr. Speaker, that certainly is something I think we should try and address again today. There are quite a number of Bills which have accumulated and I think we can resolve it, but we will meet later on and try and bring something to the House which meets with the satisfaction of all Members.


Mr. Speaker:: I take it there is unanimous consent for the introduction of the motion that the order later this day be amended to read that the matter be sent to the same legislative committee now seized of Bill C-92?


Some Hon. Members:: Agreed.


Mr. Speaker:: Shall the motion carry?


Some Hon. Members:: Agreed.


QUESTIONS ON THE ORDER PAPER
Philip Derek Lewis: Mr. Speaker, I ask that all questions be allowed to stand.


Mr. Speaker:: Is it agreed?


Some Hon. Members:: Agreed.

May 26, 1986
Atlantic Accord



GOVERNMENT ORDERS


Ramon John Hnatyshyn: that Bill C-94, an Act to implement an agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore petroleum resource management and revenue sharing and to make related and consequential amendments, be read the second time and referred to a legislative committee.


Mr. John McDermid (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I am very pleased and honoured to speak to the House on second reading of the Atlantic Accord Implementation Bill. Second reading and the legislative work that goes on towards implementing the Accord can be compared with getting your pilot's licence. I am a private pilot and the greatest thrill was my first solo flight. Getting the licence was second. I think we can say the same thing about this legislation. The great thrill, the excitement, the euphoria, came when the Atlantic Accord was signed. Now we have to get down to the nitty-gritty and get this legislation through to implement what has been signed.
This historical agreement was signed by the Government of Canada and the Government of Newfoundland and Labrador on February 11, 1985. It was a truly historic occasion which inspired the Premier of Newfoundland and Labrador to say that his province had finally become an equal partner in Confederation. This Accord represents the most important agreement reached between Ottawa and St. John's since Newfoundland and Labrador entered Confederation 37 years ago. It means the people of Newfoundland and Labrador will share in the development of and revenues from their offshore oil and gas resources. It means that the people of Newfoundland and Labrador will have a greater degree of influence in the social, political and economic affairs of Canada. The greatest potential by-product of the Accord could be the restoration of national unity itself. We have done what the Liberals have not been able to do; we have opened a long neglected door that allows the people of Newfoundland and Labrador to become full partners in the economic life of the country.
[DOT] (mo)
The Prime Minister of Canada (Mr. Mulroney) and the Premier of Newfoundland and Labrador were able to agree on what should have been the genuine rights of that province for a very long time. The failure to reach agreement with Newfoundland and Labrador was symptomatic of what was wrong with the previous Government's energy policy. It was a policy dictated from Ottawa without regard for the rights and needs of the provinces and the oil and gas industry.
The Accord will ensure that oil and gas development will provide full social and economic benefits to Canada and, particularly, to Newfoundland and Labrador. The Accord will provide a stable and permanent management regime that recognizes the equality of the federal and provincial Governments in the development of offshore resources. It will provide a clear regulatory regime for industry, welcome news indeed after five years of a Liberal energy policy that inspired very little fairness. The Atlantic Accord will encourage increased energy security and economic benefits for the country as a whole. It will provide rigorous protection of the environment, and Newfoundland and Labrador's all important fishing industry. The Accord will also provide improved safety in offshore work.
The Atlantic Accord legislation encompasses two major policy initiatives. It implements the Atlantic Accord agreement and incorporates the Canada Petroleum Resources Act. The Canadian Petroleum Resources Act, that we debated recently in the House, replaces the Canada Oil and Gas Act of 1982, and includes an amended Oil and Gas Production and Conservation Act.
One important feature of the Accord must be underlined. It will provide for revenue sharing on the same basis as if these resources were on land. This provision shows that this Government is serious about fairness, equality and opportunity. It shows that we intended to negotiate with the Province of Newfoundland and Labrador. We did not merely legislate with a greedy eye on potential revenue. It shows that we were serious when we said that the people of Newfoundland and Labrador should have greater control over their own destiny. We have sealed this commitment with the creation of a strong, independent, and impartial board, the Canada-Newfoundland Offshore Petroleum Board, which will oversee oil and gas activity off the province's coast. The board will provide local and regional administrative guidance to the development of a resource that is national and international in its scope and importance.
The board is composed of six members, and a chairman, who are appointed jointly by the Government of Canada and the Government of Newfoundland and Labrador. Members of the board are not public servants of either Governments. All appointments under the Accord have been made jointly by the two levels of Government. There are no "we" and they divisions that mark the attitude of the previous Government.
I see the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) over there smiling. I am reading a very interesting book right now, "The One-Eyed Jacks", which is reviewing the current Prime Minister and the previous Prime Ministers. It is interesting to read in there the style of the previous Government and how it enjoyed conflicts. Its leader at the time enjoyed the "we" and "they" attitudes of federal-provincial relationships. We are trying to put an end to that, because I think it is all "we". We have to work together in this country, and this Accord probably speaks most clearly of that co-operation.
May 26, 1986

On October 17, 1985, the chairman and two vice-chairman were appointed to the board. On January 6, 1986, the board and staff assumed the operational responsibilities previously assigned to the Canada Oil and Gas Lands administration, and the Newfoundland and Labrador Petroleum Directorate. On January 27, 1986, the appointments of the remaining board members were made.
When the Atlantic Accord becomes law the board will assume full responsibility for managing oil and gas activity off Newfoundland. The board will be responsible for such measures as the adminsitration of the issuance of exploration rights, good oil field practices, the granting of production licences and approval of development and benefit plans, the collection of royalties, and recommending amendments to the legislation and regulations of the Atlantic Accord. The board will also have emergency powers where and when required.
The joint management of the offshore Newfoundland development is built on sensible and sound principles. Joint management will be achieved through the independence of the board. This independence is not without checks and balances. Under the terms of the Accord the two levels of Government will be able to provide direction to the board and be able to veto policies, if required. The board will ensure that the development of the offshore resources will be fair to Newfoundlanders, to the people of Canada and, of course, to the oil and gas industry.
The Atlantic Accord implementation Bill confirms our commitment that the province will be able to establish and collect resource revenues as if they were on land. Newfoundland and Labrador will receive the proceeds from royalties, provincial corporate income taxes, sales taxes, bonus payments, rentals and fees, and other forms of provincial revenues and taxes that may be established.
The Bill establishes in law the Canada-Newfoundland offshore development fund with grants totalling $300 million. Seventy-five cent of this $300 million will come from the federal treasury and 25 per cent from the provincial treasury. The development fund will enable the Province of Newfoundland and Labrador to develop the infrastructure to meet the demands of oil and gas development and to capture the economic benefits of that development.
On January 27, 1986, the first four projects under the Canada-Newfoundland offshore development fund were approved in principle. Funding for these projects will be available when the implementation legislation is passed. It is important that this legislation be passed as expeditiously as possible so these funds can flow to Newfoundland for these development projects. Subsequent projects under the Canada-Newfoundland offshore development fund will continue to be approved jointly by the federal and provincial energy Minsit-ers.
Another feature of the Atlantic Accord is the equalization offset payment formula that was developed to ensure that there will not be a dollar-for-dollar loss of equalization
Atlantic Accord
payments as a result of offshore revenues. Beginning in the first year of production Newfoundland and Labrador will receive offset payments from the federal Government that are equal to 90 per cent of the year's reduction in equalization payments. Starting in the fifth year of production the offset rate will be reduced by 10 per cent for each subsequent year. We feel this is a very important part of the Bill, to ensure that Newfoundland is not just cut off in year one from equalization payments because of the new revenues being derived from the offshore. In fact, this formula we feel is very fair, as do the people of Newfoundland.
One important concern expressed in the Bill is the protection of Newfoundland's vital offshore fishing industry.
This Bill provides for the same environmental protection as on all frontier lands, by incorporating the environmental protection provisions of the federal Oil and Gas Production and Conservation Act. This is very imporant. In the event that something happens in the offshore, this legislation includes an oil pollution compensation regime that ensures financial compensation to fishermen and others for any damages from oil spills and debris. The board will promote and monitor industry-sponsored fishermen's compensation policies in the case of non-attributable damages to the fishery.
We have established a committee to monitor the provisions of the pollution and fisheries compensation plan. This committee has representatives from federal and provincial Governments, from the petroleum industry and, probably most important, from the fishing industry.
I want to speak briefly about the Petroleum Resources Bill which provides the legislative framework for the Atlantic Accord. Bill C-94 incorporates the Canada Petroleum Resources Act which will ensure that the legal foundation for oil and gas interests will be the same in Newfoundland offshore areas as in the rest of Canada's frontier lands. The Canada Petroleum Resources Act will replace the existing Canada Oil and Gas Act with a simplified and fair set of rules designed to encourage frontier resource development. We have just completed second reading of the Bill and we hope that the legislative committee will start work on it soon. It introduces a simplified competitive system for issuing exploration rights based on a single criterion, one in which the best bid wins. This will ensure fair treatment of companies bidding for exploration rights.
The Bill requires a minimum of 50 per cent Canadian ownership in frontier projects but, unlike the flexible policy of the former Government, will be applied in a way that is not retroactive and confiscatory. It will look to the private sector to achieve the 50 per cent minimum ownership level.
The Canada Petroleum resources Bill is fair to provincial and territorial Governments and to all Canadians as resource owners. It is market responsive and sensitive to the concerns of companies operating in the high risk frontier regions.
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May 26, 1986
Atlantic Accord
Our Government has always believed that Canadians should participate fully in energy development. The Atlantic Accord and this Bill provide for fair and realistic Canadianization of a vital resource at Hiberia. They will also provide for ample returns on Canadian investment.
Declining world oil prices have created an uncertainty about high cost frontier oil projects such as Elibernia. I stress that we cannot let the apparent over-supply of oil blind us to the fact that those supplies will eventually decline. Canada's conventional oil reserves have been declining for years and they continue to decline. Domestic projects such as Hiberia will be needed to take up the slack. The alternative of increasing reliance on foreign sources of oil is unacceptable to the Government and, I believe, to the people of Canada. It is also unnecessary. We saw the result of relying too heavily on nonCanadian oil in the 1970s. Foreign interests manipulated supply in order to dramatically and suddenly increase the price. Canada and other countries scrambled to deal with the inflationary impact of higher prices. We scrambled to use oil more efficiently and to bring new domestic supplies on stream.
The current oil pricing and supply situation provides us with a brief breathing space to proceed with projects like Hibernia in an orderly manner. However, it is not the time to fall asleep at the switch.
The Government of Canada is currently discussing fiscal arrangements with companies developing Hiberia and with the Government of Newfoundland. Low oil prices make it more difficult to proceed, but I am confident that we will. I hope that we will soon approve a development plan and a Canada benefits plan for Hiberia because these are important steps in the process leading to production from Hiberia. These are signs of the Government's continuing commitment to the development of this valuable offshore resource.
During Hiberia's development phase alone it is estimated that $4.2 billion will be invested in the project. This will create some 14,500 person years of direct employment in Canada, of which about 9,500 person years of employment will be created in Newfoundland. The Newfoundland work will include the construction and outfitting of a gravity base structure for drilling platform and production facilities, the installation of subsea facilities and an articulated loading platform. It will also include the ongoing management of the project and onshore and offshore hook-up and commissioning.
I had the pleasure of visiting one of these rigs in Stavanger, Norway. Mobil, which is working on the Hibernia rig, made the arrangements for us to see this engineering feat that I found very difficult to conceive as a lay person. The work involved in this magnificent project is phenomenal and will provide very challenging and interesting jobs for Canadians in the near future.
Mobil Oil has explained that other required facilities, such as the fabrication of half of the modules and the construction of an ice-cleaning vessel, will occur in Canada. We can see that billions of dollars will be spent over the next decade to
develop new and secure technology and industry, which will create thousands of jobs for Newfoundland and Labrador and Canada as a whole.
There are already strong indications that our new frontier lands policy is a success. I refer the House to the results of a call for proposals which was issued in December, 1985 for exploration rights to three parcels of land on the Grand Banks. There was considerable competitive interest in these parcels of land, indicating that our policies are indeed working. In March, the industry showed its commitment with total bids of $4.75 million for the exploration rights during the initial terms of the three exploration agreements that have been awarded. Five companies were successful in the bids, which were evaluated by the Canada-Newfoundland offshore petroleum board. I hoped to be able to read the list of those on the board into the record. Perhaps I can do so later.
The Atlantic Accord represents one of the greatest events in our country's history. Indeed, when the Canada-Newfoundland offshore agreement was signed on February 11, 1985 Premier Peckford said: "History is being made today." It is hard to disagree with that statement.
At the same signing on February 11, 1985, the Prime Minister said:
-this agreement is about dignity for Newfoundland and Labrador, long a "have-not" province. Today marks the beginning of a new era-one that will enhance provincial economic well-being and collective accomplishment. This agreement reflects important Newfoundland values and accommodates legitimate provincial aspirations in a generous Canadian perspective.
It is hard to disagree with that statement.
It has been a pleasure for me to begin the debate on second reading of Bill C-94, a legislation enacting the famous Atlantic Accord. I look forward to this debate and would urge the House to pass Bill C-94 on second reading as expeditiously as possible so that we might study the Bill in more detail in our legislative committee.


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I was interested to hear of the Parliamentary Secretary's experience regarding to his flying. He stated it was not the licence which gave him the greatest thrill, it was his first solo. He related this to the the signing of the Atlantic Accord as the most important thrill, as far as he was concerned, and not this legislation. I would ask him to check because I think his propeller has fallen off.
This Bill relates to probably the greatest academic exercise in this House of Commons for quite some time, with very little practical relationship as far as the people of Newfoundland are concerned. The Parliamentary Secretary stated that this does away with the back-in provisions, the Canada Land provisions, that now all companies will be treated as one.
What is interesting about the Government is that it worries so darn much about foreign companies. That seems to be the whole thrust of this Act. The Government wants to do away
May 26, 1986

with the last vestiges of the National Energy Program. It is apopletic when it comes to the National Energy Program. It is not very good when it comes to replacing the NEP, but apopletic and determined when it comes to getting rid of it. As a result, the Government is not giving any consideration to what it is doing away with. Certainly it is doing away with the back-in provisions because it wants to help foreign companies.
When is the Government going to be concerned with Canadian companies? When is it going to be worried about the producers of cedar shakes and shingles? When is it going to be concerned about the attitude of the United States which looks upon Canada with the philosophy of "familiary breeds contempt"? That is what is happening to our relations with the United States right now, with the resultant devastation of our economy.
The Government talks about this Bill giving Newfoundlanders full partnership; they have 50 per cent. But as it stands right now, because of the policies of the Government, they have 50 per cent of nothing. On February 11, 1985, when this agreement was signed, Premier Peckford said, as the Parliamentary Secretary has stated:
This is a historic day for the people of Newfoundland and Labrador. At last we in Newfoundland will be treated as an equal partner in offshore development and will be in a position to establish and collect revenues in the same way as other oil and gas producing provinces of Canada.
What they have, as I have said, is 50 per cent of nothing. Because of the policies of the Government there is no move, no generation of activity which will bring on development in Hibernia. The Government is concerned that there is a downturn in the price. It is seizing on that downturn in oil and gas prices to do absolutely nothing.
Let us be realistic. Let us look at the state of the oil and gas industry today. Can we honestly believe that without the assistance and reasonable approach of the Government the oil companies are going to come forward right now? They are not Canadian companies, the Government has seen to that. The Government has driven the Canadian companies out of the offshore and other frontier areas.
The fact is that the Government did away with the Petroleum Incentives Program and with it many of the exploration activities which were taking place on the east coast. The fact is that on April 24 of this year Newfoundland businessmen got together for a news conference and called on the Government to step in and prevent a collapse of the offshore drilling activity. The fact is that 800 jobs have already been lost in the supply vessel sector and those who are working are only on short term contract. That is all they have to look forward to.
Mr. Ron Strong, the President of the Newfoundland Ocean Industries Association, warned of "dire consequences for the province's fledgling offshore industry if exploration is allowed to slow down", and it is now almost at a stop.
When new parcels of land were put up for bid on the Grand Banks it was not, as the Parliamentary Secretary said, a
Atlantic Accord
glorious and red letter day. The industry did not respond. It bid on only half of the seven parcels on which they had a right to call for proposals and offered only $4.75 million for exploration rights lasting four to five years. Most importantly, these companies are not committed to drill any wells during this leasing period. Had these lands been offered by the Canada Oil and Gas Lands Administration instead of by this new Canada-Newfoundland Offshore Petroleum Board, the Canada Oil and Gas Lands Administration would have received more bids with more moneys behind them and, most important, there would have been drilling commitments.
The Government has said before that this is a new age with no confrontation. There is no confrontaion between provinces, no confrontation with foreign countries, just a complete devastation of our economy. The fact is that we can have agreement if there is nothing going on.
The Canada-Newfoundland Offshore Petroleum Board is scaring the oil industry because it does not know who is in charge or what is going to happen if activity does take place. With the Canada Oil and Gas Administration, the industry at least knew who was in charge. It does not know that now and that is of vital concern.
We have a disastrous response to this new system. No one is bidding for the parcels of land. No one is committed to drilling. Where does this leave Newfoundlanders? We can use the term which was used before "freezing in the dark" under the new policies of the Government. Obviously the promised day for Newfoundlanders as a "have" province will not come to pass because of the oil and gas industry and because of the politics and policies of the federal Government, at least not by 1992 when we hoped it would happen.
It is easy to see that the Government and the people of Newfoundland are going to have 50 per cent of nothing. Even the provincial Finance Minister, Dr. John Collins, realizes that. Last April he warned that Newfoundlanders "should not depend on the proverbial pot of gold at the end of the rainbow as the saviour of the provincial economy". He was referring to the offshore activity and potential at Hibernia.
Instead of activity in exploration occurring in Newfoundland, we are going to see acquisitions, foreign companies being able to buy up Canadian companies, and we will see that, of course, in Alberta. We are going to see our small Canadian companies going bankrupt because of the low prices and because of the multinationals and Petro-Canada, our own Crown corporation, which is not only not paying the low posted price for oil and gas in Canada, but is paying $3 to $4 under the posted price. It is paying the spot price, if it is paying that. As a result, small producers are not even receiving the low price they should be receiving.
The Parliamentary Secretary has stated that we now must have 50 per cent ownership in the development stage in our offshore; we must have 50 per cent Canadian content. The

May 26, 1986
Atlantic Accord
figure of 50 per cent applies only to development and production and relates only to oil and gas found after March, 1982. Thus oil and gas which was discovered prior to March, 1982 does not require this 50 per cent Canadian content. The Government's policies are doing absolutely nothing for Canadian companies.
In a speech to an energy management conference the Minister of Energy, Mines and Resources (Miss Carney) stated:
If we do not conserve our oil and gas resources-and if we do not find and develop new supplies-we'll end up back where we were in the 1970s. OPEC will dictate price and supply to us.
Yet the policies of the Government are moving completely away from the development of the resources in the offshore. It is moving away from further exploration of our offshore and other frontier areas. When the Minister says that we must find and development new resources I am in complete agreement. We must do that now; we cannot wait until the crisis has hit us. However, it cannot be achieved as a result of the policies that this Government has put in place. If the Minister meant what she said, then I want to know what she plans to do to ensure that new supplies will be developed. I am sure Newfoundlanders would also like to know.
We have come to a point past that of idle rhetoric. The economies of all the Atlantic provinces are being faced with devastation, and Newfoundland is suffering more than any. Newfoundlanders have heard about this idea of riches, and of this 50 per cent factor. They have heard that equalization will not be taken away right away, that they will be allowed to keep it, initially at least. That is great, but it is nothing but empty rhetoric unless something is done to give some meaning and focus to the actual development of the resources in Hibernia. This is something which has to be done. The Bill before us and the Atlantic Accord will mean nothing unless the Government has some type of resolve to do something about it. It will cost between $15 U.S. and $17 U.S. per barrel to develop this oil. Thus there has to be something done by the Government.
The Government has to look at this question, and it has to do so in conjunction with the Province of Newfoundland. The two parties must decide what will be done to bring these developments forward. The people of Newfoundland do not want just to hear about new legislation which the Government says will bring this end closer. Newfoundlanders know that it will not bring anything closer unless there is a resolve on behalf of both the federal Government and the provincial Government of Newfoundland. The federal Government must promote the development of Hibernia.
The uncertainties with respect to offshore development should not distract from the economic potential and significance of Hibernia. The long lead time to initial production, which is 1992 as stated by Mobil, may provide ample time for a price recovery in terms of oil and gas world wide. Between now and 1992 oil prices could go up and down three or four times. We should not freeze saying: "Let's not do anything
until we are absoltuely sure". With the unstable situation in the oil and gas field and the unstable situation in terms of OPEC, even if the price goes up how can we be sure it will stay up? It might come right down again. What is this certainty? What is this level? What is this quotient of certainty for which the Government is waiting in order to do something to develop a fiscal regime and a framework that will help the people of Newfoundland to develop this very important resource?
Clause 41 of the Bill states that Newfoundlanders are not really slated to benefit that much from the downstream activity of their own resource in Hibernia. Granted, if the end use is for consumption and feedstock requirements then they are to be directed to industrial facilities in Newfoundland. If those targets are met then the next targets will be with respect to feedstock requirements for Come-By-Chance. The limited need for these feedstocks and consumption from Hibernia right now means that there will be a great deal of oil which will not undergo a value-added stage in Newfoundland. Good heavens, Come-By-Chance is up in the air. Why is it up in the air? Because the Government's own Crown corporation, Petro-Canada, is balking at doing anything constructive with this refinery. It has indicated that it wants to dismantle it and sell it piecemeal to whomever will pay for the parts. So Newfoundlanders really cannot look forward to a great deal of benefit as a result of the consumption of feedstocks from existing industry or from Come-By-Chance. Then the feedstock requirements of the rest of the refineries in Atlantic Canada must be met, which brings us back to the remaining feedstocks being used for new industrial possibilities in the downstream in Newfoundland.
What about training and education to develop more jobs and more potential? The Bill does not deal with either of those aspects. If this was such a promising move for Newfoundland, why have businessmen called for aid to stop the collapse of the drilling in the offshore? Why has that happened? Why has this call for aid gone unanswered by the federal Government? Newfoundlanders want to know, as do all Canadians. The Government feels that Newfoundlanders and people in Atlantic Canada will be satisfied just by knowing that Bill C-94 has been presented in the House of Commons, been given second reading and referred to a committee for further hearings. That is not enough. Newfoundlanders do not buy that as a positive step. They want to see something concrete. They want to feel that the Government wants to do something to bring this measure forward as soon as it possibly can.
As the Parliamentary Secretary pointed out, what about the industry bid on the parcels of land where the calls for proposals were granted? The industry bid on only one-half of the six parcels. It offered only $4.75 million for exploration rights lasting for between four and five years. As I pointed out before, no wells were committed. The federal and provincial Ministers of Energy say that the results of the disastrous sales show that their new frontier lands policy is working, as the Parliamentary Secretary echoed this morning. If that is the
May 26, 1986

case then someone failed in terms of the timing. Newfoundlanders do not have the right to question whether the new Canada-Newfoundland Offshore Petroleum Board has done the right thing. They cannot question it now. They have no way of asking the Board if what it has done will be in the best interests of Newfoundland. What has been done has indicated that there is not a great deal of interest in the offshore, primarily because of the policies of the Government.
The Government has stated that Canadian companies do not matter and that a fiscal requirement for aiding the development of the offshore in Newfoundland does not matter. It has been stated that all that matters is waving around these pieces of paper, and if everyone does that then everything will be all right. However, these pieces of paper can provide a framework of a regulatory and management type, but unless there is the determination and the political will to do something in Hibernia then all these Bills and all these accords are not going to mean a darn thing.
The Government has already brought forward Bill C-85, legislation dealing with the Petroleum Incentives Program. The Government has managed to reduce the number of wells which were to be drilled in the grandfathering period of the Petroleum Incentives Program. As the Hon. Parliamentary Secretary has mentioned, the Government has brought forward Bill C-92 which has reduced from 80 per cent to 10 per cent the financial assistance available to Canadian companies not able to pay taxes to further discourage Canadian companies except for Petro-Canada to participate in frontier exploration.
What about Petro-Canada? This is the company that was developed to find new reserves of oil and gas and to be in the vanguard of offshore and other frontier exploration. Petro-Canada is now backing away from the agreements in which it already had an interest. It is not going to take up some of its back-in rights and it is not going to participate in the 25 per cent in which it could participate in some of the arrangements and joint ventures that exist on certain wells in the offshore. Does this mean that the other partners who pick up the 25 per cent will be able to get the benefit of the Petroleum Incentives Program? No, the Government has seen to it that they will not. The Government has caught them twice. It is taking away the assistance of the Crown corporation which was helping to develop these possibilities in the offshore, and now that Petro-Canada has backed away, the Government is not going to apply the Petroleum Incentives Program to that 25 per cent.
What has the Government done? It has added insult to injury as far as the offshore is concerned. The Government very nicely stated that this year's estimates include $950 million for the Petroleum Incentives Program, knowing that with its policies and with the general downturn in interest on the offshore the $950 million will not be picked up. We will be lucky if a fraction of that money is used. The remainder will go somewhere else, but not to Atlantic Canada. That has always
Atlantic Accord
been the way. It started with the fiscal statement of November 8, 1984, continued with the Budget of May 23, 1985, continued again with the recent Budget of February 1986 and continued again with the oil and gas legislation Bills that have been put before the House by the Government. It is a complete devastation of the economy of Atlantic Canada, and a large part of this devastation has been caused by the Government's offshore policy.
I think it is very sad that the great promise that was once held out to the people of Newfoundland is in jeopardy of slipping away, and this at a time when Newfoundlanders need employment and hope more than at any other time since they entered confederation in 1949. This is being done by the Government and by its own Crown corporation.
I would ask the Government to reconsider these disastrous policies and to take into account the interests of Atlantic Canada and particularly Newfoundland. These people had hoped that this oil would be coming onstream in the next few years, but they are now seeing this hope evaporate. This hope will not be fulfilled by 1992, something for which Newfoundlanders had initially hoped.
It is obvious that the Government is not concerned about people. I would ask that in this particular situation at least, the Government make an exception.


Ian Gardiner Waddell: Mr. Speaker, I rise to speak on this Bill on behalf of the New Democratic Party and as the New Democratic Party energy critic. This is a most important Bill for Newfoundlanders and a vital Bill, as we would see if we could look into the future, for the future of Canada.
I come from the West coast. I might say that that does not qualify me to speak about Newfoundland.


An Hon. Member:: Don't let that stop you.


Ian Gardiner Waddell: That does not mean that I do not have a great deal of interest in Newfoundland and Newfoundlanders. My family emigrated to Canada in 1947. I was a young boy of four, just about to turn five. I can vaguely remember arriving by plane in Gander, Newfoundland from Glasgow. On that day, Newfoundland was not a part of Canada; therefore, I was in Newfoundland before it was a part of Canada. I am ashamed to say that I did not return to Newfoundland for many years. From Gander, we picked up a Trans-Canada Airlines plane and went on to Montreal. I will never forget arriving in Toronto during a snowstorm. Ultimately, I moved to Vancouver, later on in life.
I never returned to Newfoundland until a couple of years ago when I went to Corner Brook. The second day I was there, I was to be interviewed on the CBC television station in Corner Brook. Before being interviewed I watched television as the Atlantic Accord was announced in St. John's, just down the road a bit. I had to comment on the Atlantic Accord while in Newfoundland, and I will never forget that day. It meant a lot to me.

May 26, 1986
Atlantic Accord
I would like to tackle this Bill in some detail and deal with some general principles. There are some tremendously interesting Canadian issues, as well as Newfoundland and Atlantic issues that will come up. However, I am sure Newfoundlanders will understand if I begin my speech by reading an urgent telegram that I just received from a group in my riding. Later on, I will refer to this telegram and tie it in with the different aspects of the policies of the Conservative Government.
This is a copy of a telegram that was sent to the Prime Minister (Mr. Mulroney) today by Local 1-217 of the International Woodworkers of America. That local is located in my riding. The telegram reads as follows:
Local 1-217 of the International Woodworkers of America is calling on your Government to immediately withdraw from the free trade discussions with the U.S. On May 22, 1986 the U.S. imposed a 35 per cent tariff on the imports of Canadian red cedar shakes and shingles.
This arbitrary decision is not consistent with the concept of free trade and it has become blatantly obvious that the U.S. has no interest in free trade whatsoever. The imposition of a tariff on B.C. shakes and shingles will effectively destroy the shake and shingle industry and result in the unemployment of thousands of workers. As you are aware, the U.S. has launched a countervailing duty suit against imports of all Canadian softwood lumber products. If that suit is successful the entire forest industry in Canada-


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


Mr. Turner (Ottawa-Carleton):: Point of order!


Mr. Deputy Speaker:: I foresee two points of order. The first point of order is that there is a clear rule in Beauchesne's indicating that the Hon. Member should not be quoting from telegrams as there is no way of verifying their authenticity. The second point of order probably deals with a point of relevancy. The Hon. Member has said that he will tie the telegram into the debate so the Chair must take his word for that.


Ian Gardiner Waddell: If Hon. Members opposite will not let me continue the telegram from the IWA-


Some Hon. Members:: Oh, oh!


Ian Gardiner Waddell: It is from Doug Evans, the President of the local union, and for these people, it is a life and death issue. If that is what Conservative Members think of-


An Hon. Member:: It's a Speaker's ruling.


Ian Gardiner Waddell: I am not talking about the Speaker, I am talking about the people across from me.


Mr. Foster:: They always want to muzzle Parliament.


Mr. Cassidy:: No courtesy!


Ian Gardiner Waddell: When they were over here-


Mr. Deputy Speaker:: Order, please. Could we allow the Hon. Member to complete his speech, please?


Ian Gardiner Waddell: Mr. Speaker, I will complete my speech. I do not understand Conservative Members. If they want to muzzle Parliament, it is up to them.


John Horton McDermid: Nonsense. You have a time and a place to do that.


Ian Gardiner Waddell: It has been only 22 months, and they will not be around for much longer.


Donald Alex Blenkarn: Why don't you say something on the Bill?


Ian Gardiner Waddell: The Hon. Member says that I should speak on the Bill. Let me suggest to Conservative Members-


Donald Alex Blenkarn: Quit hamming it up and say something about the Bill.


Ian Gardiner Waddell: Mr. Speaker, when it hurts, Government Members do not want to hear it.


Some Hon. Members:: Nonsense!


John Horton McDermid: Speak to the Bill.


Ian Gardiner Waddell: The Hon. Parliamentary Secretary wants me to get down to the nitty-gritty of the Bill which he described.


Some Hon. Members:: Yes!


Ian Gardiner Waddell: I will deal with the nitty-gritty of the Bill, then. The Government should stop misleading the people of Newfoundland and the people of Canada in general on the offshore. It should forget about short-term rhetoric and dig in for the long-term development of Hibernia. We must consider together in committee how that will come about. The New Democratic Party is committed to the long-term development of Hibernia. We will need that resource in the 1990s. We should figure out how it can be done and not mislead people about what is happening right now.
I should like to give an example of what is going on. When I was viewing television in Corner Brook I heard the Prime Minister speaking in St. John's. I took notes at the time, and I should like to refer to what he said. He said: "I am not afraid to inflict prosperity on Newfoundland and Labrador". That was his promise. Today the Parliamentary Secretary rose in the House and said that they were doing nicely, that they were getting bids, and that the system was working.
I should like to refer to an April 9 article which appeared in The Chronicle Herald. In part it read:
The Mulroney Government's first attempt to auction East Coast acreage for oil and gas exploration has ended in what one analyst called a "disaster".
In all, the industry has grabbed about one million hectares of offshore land without committing itself to drilling one well on the Grand Banks, an area which includes the Hibernia oil field.
Calgary oil analyst Ian Doig called the auction a "disaster" after only seven bids were received on six tracts of land on the Grand Banks, off Newfoundland.
May 26, 1986

No bids were received at ail for three of the blocks, with groups led by Shell Canada, Amoco Canada, and Esso Resources Canada winning the other three blocks.
Bids on all three parcels totalled $4.75 million, a figure which underlines the industry's "commitment" to offshore exploration, according to Energy Minister Pat Carney.
It was also according to the Parliamentary Secretary speaking in the debate this morning. The article continued:
However, well costs in the high-cost exploration area off Newfoundland start at about $25 million, and can go as high as $40 million.
Government officials confirmed Tuesday that committed spending on the offshore lands compels the companies to conduct seismic work only-
One industry executive, who asked not to be identified, said-the bids were not an "auspicious beginning" for the new Newfoundland-Canada board, or the new bidding system.
"You could hardly call this a showcase kickoff for the bidding system"-
Let us level with the people. Let us tell them what is really happening.
The New Democratic Party position on the Bill can be summarized in about five points. First I should like to outline them, and I will refer to them in detail later. We agree with the general principle of the Bill which recognizes the need for genuine provincial involvement in the exploitation of the Newfoundland offshore. We want the Newfoundland people and the Newfoundland Government involved directly in developing their own resources.
As a westerner I understand what it is like to have control of resources on land. They can be developed for the province and result in revenues for the province. It can make a "have-not" province into a "have" province. The best example in the country would be Alberta. Why should Newfoundland not have the same advantages?
The NDP has in fact led the way on the issue of provincial jurisdiction on the offshore. At the time of our 1979 convention, the NDP had Members in both the East and West. It was an important time. The Liberal Party did not have members in western Canada. In effect we were speaking on this issue as a national Party, and we took the position that the provinces, which of course would include Newfoundland, should have offshore jurisdiction. This was at the beginning of the fights between the Trudeau administration and the offshore provinces, especially Newfoundland.
As the Hon. Member who spoke before me said, currently the Atlantic Accord is a hollow document, despite the good principles contained in it, because of the international price of oil. The fact is that offshore oil activity has died over the last year. The Government has done nothing to restore the real pace of activity in the offshore.
We in the New Democratic Party also have some concerns about the Conservative Government's reliance upon tax-based incentives to steer the future course of petroleum development in the East Coast offshore. We have a feeling that it will simply not work. If it works, it will mean that large multinational oil companies, not Canadian oil companies, will have
Atlantic Accord
control of the offshore. I will return to that point in some detail later.
In respect of the general principle, that is, the need for genuine provincial involvement in the offshore, I spoke in the House on Tuesday, February 12, 1985 after having returned from Newfoundland and after the signing of the Atlantic Accord. I should like to refer to my statement at that time when I said:
Mr. Speaker, we in the New Democratic Party, as do all reasonable Canadians, rejoice that finally there is an agreement between Canada and Newfoundland to pave the way for the development of the Hibernia oil field.
Yesterday I was in Corner Brook, watching the signing ceremony on television. A Newfoundlander next to me said: "Those boys are going to get sore arms from patting themselves on the back so much". Be that as it may, 1 am glad there has been an agreement.
I have three positive suggestions. First, we should consider a constitutional amendment to enshrine provincial control of offshore resources in the Constitution. As a western Canadian, I realize how important that is.
Second, we have to be careful about the pace of development and about the creation of jobs. Energy, Mines and Resources officials told the energy committee this year that there would only be 6,000 jobs in the development of the field. Expectations are very high. Let us have some hearings by the energy committee to see if we can get more jobs, and to see whether we can get some jobs for western Newfoundland and Labrador which often feel left out of the development.
Finally, I would urge that the federal and provincial Governments not forget the traditional industries like fisheries and forestry where there really are jobs for the future. I am glad that there is a deal. Let us work on it and try to create more and better jobs. Let us not forget the fish and the forests as well.
In retrospect, if I might say, I think those principles hold. The fact is that there was a lot of rhetoric at that signing ceremony which has not been delivered on. It is very important to have offshore resources under provincial control. There has also been much rhetoric about the number of jobs involved but very little detailed examination of how those jobs will be delivered to Newfondlanders. We must also be careful about regional development in Newfoundland, and ensure that western Newfoundland and Labrador take part in the offshore development. As well, the province must not forget that there are traditional industries like fishing and forestry which should not be ignored in the rush to have offshore oil development. I think those principles hold.
As I said, in our 1979 convention the NDP favoured the control of the offshore being with the provinces. We saw it in terms of what happened in western Canada where resources under the land belong to the provinces. It has helped western provinces, especially, attain economic development. Otherwise they would just be hinterlands with nothing happening. Alberta is a good example, as I said earlier. That is not to say that there is not a role for the federal Government. A resource such as oil is a strategic resource. Society cannot work without it, and there is big money involved in it. There must be a role for the federal Government in terms of the importation and exportation of the resource, the taxation of the resource, and the sharing of the revenues. That is a very important principle, Mr. Speaker. I was proud that our Party took this constitutional principle on the offshore resources, and I was proud to be part of the constitutional committee of this House in the last

May 26, 1986
Atlantic Accord
Parliament in which the Hon. Member for Oshawa (Mr. Broadbent), the leader of our Party, proposed a constitutional amendment that would give some further control to the provinces over their own resources.
I know sometimes people from Ontario and Quebec find this a little hard to understand. You hear such things as "We own those resources too. They are Canadian resources." Ultimately they are Canadian resources, but they must be controlled and managed by the provincial Governments because this control is very important to the provinces. We westerners understand what Newfoundland and Nova Scotia feel on that point. It was embodied in the Atlantic Accord, and so far as that principle is embodied in the Accord, we agree with that principle. So far as that principle is embodied in Bill C-94, this humungus Bill, we agree with that principle in the Bill.
This has not been an easy road and previous speakers have mentioned the constitutional fights over the control of resources. One would ask why Pierre Trudeau took such a strong position that the federal Government should have control over the offshore resources rather than the provincial governments? I suppose we will have to wait for him to write his autobiography. It seems to me that the seeds may lay in his views of Quebec and Canada. Trudeau and some of his colleagues came into politics, I think, with a view of Canada in the sense of fighting separatism in their own province. They were fighting for a strong central Government in order to deal with very powerful provincial Governments. In Quebec's case it was a separatist Government, and I think it colored their view somewhat. It made it more difficult to accept the fact that you could give provinces control over their resources and that would not mean the end of Canada, that there was a way of dealing with federal-provincial affairs, less dramatic and with less conflict than what the Trudeau Government did. If there is a fault-and I am speaking as a western Canadian- and there were many faults, one is the Trudeau Government's failure to understand western Canada, which probably came from his feeling of needing a strong federal Government to face the situation in Quebec. This same attitude was evident in the federal Government's dealings with Newfoundland.
I have made speeches in the House, but I never really thought anyone watched the proceedings or read Hansard. I supposed a few people did but I did not think there were a great many. I once made a speech on the offshore and I received a letter from the Premier of Newfoundland objecting to some of the things I said. I wrote to him and said that I doubted his constitutional strategy. I asked why he went into the courts because he was bound to lose the case of the offshore in the Supreme Court of Canada. It is a Federal court appointed by the federal Prime Minister. While the judges are as unbiased as possible, there is a built-in bias. The Prime Minister appoints the judges. He would be inhuman if he did not look for great lawyers who have a federalist outlook. I wrote to the Premier, and I want to read into the record a letter I received from him dated June 18, 1984. It reads:
Dear Mr. Waddell:
Thank you for your letter-perhaps we shall meet at some time during our travels.
In any case, I should point out that going to court was never our preferred option. However, right in the middle of a set of negotiations with the federal Government, a labour relations case involving the SIU and the offshore went before the Federal Court of Canada. Right out of the blue, even though we were at the bargaining table, the Feds made a motion to expand the SIU labour case into a fullblown offshore ownership case. The Federal court agreed to hear the ownership arguments but declined to indicate if it would rule on that aspect of the case. We were thus in a dilemma. If the Federal court ruled on ownership, the ruling was only appealable to the Supreme Court of Canada. In other words, the case could reach the High Court without being heard First by the Newfoundland Supreme Court. Faced with such a prospect, we referred the ownership case ourselves to the Newfoundland Supreme Court. With a slick piece of legal manoeuvering, the Trudeau administration got us where it wanted us all along- into the Supreme Court of Canada.
I might add, the Premier forgets to point out that he referred the case. The letter goes on:
To say the least, it could be said that the scenario forced upon us was less than honourable. However, the Prime Minister Elect, Mr. Turner, has made a number of statements to indicate he has a different approach to Federal/Provincial relations. We have just recently struck an accord with the Opposition Leader, Mr. Mulroney, wherein, if elected, his administration would agree to real joint management and revenue sharing as if the offshore oil were on land in the Prairie Provinces.
In any case, my point is that we have been and are willing to be fair and reasonable on the offshore issue. The Trudeau administration, however, was not inclined to reciprocate.
Yours sincerely,
The letter was signed by A. Brian Peckford, P.C., M.H.A., Premier.
I thought it was an interesting letter, Mr. Speaker, and it is part of Canadian history. The case went into the court system and the courts held that the offshore really belonged to the federal Government.
The new federal Government had to deal with the issue. It made an agreement, an accord. But that still leaves open the constitutional issue of the offshore, hence my suggestion that we might look to a constitutional amendment to enshrine the issue in the Constitution so it could not be changed in the future.
I do not want to leave the constitutional point without expressing one further aspect. Having said that there is some justice now delivered to Newfoundland, having said that the Trudeau administration had gone too far in the interests of the strong central Government clubbing the provinces in federal-provincial negotiations, nevertheless there is a national interest that we as federal Members of Parliament have to consider. We must have a balance in the national interest. When we look in some detail at this Bill in committee, we will want to know how much the federal Government has given up. I am very suspicious of this present Conservative Government when it negotiates. In negotiations with Alberta, it gave Alberta everything. In negotiations with the oil companies, it gave the oil companies everything. The question is, did the federal Government give the whole federal store away?
May 26, 1986

Let me draw the attention of the House to a good article published by the Institute of Resource Law in Calgary. It is dated August 1985 and called "A Critical Evaluation of the Atlantic Accord." It is written by D. Paul Emond of Osgoode Law Law School, York University in Toronto. I shall just read his conclusion:
Offshore exploration activity is partly the result of massive federal subsidies. While costly, these expenditures have made good political and even economic sense. They have enabled us to learn more about the size and accessibility of frontier oil and gas. They have benefitted have-not provinces such as Newfoundland. They have also benefitted other Canadians, as owners of the frontier lands. How else can Canada justify paying such large subsidies for offshore exploration? One would have expected, therefore, that the federal Government would be reluctant to give up almost all of the financial benefits that development of the Newfoundland offshore might bring.
The Atlantic Accord expresses the federal interest in the Newfoundland offshore in terms of national self-sufficiency, security of supply and, to a lesser extent, Canadianization of the industry. This seriously understates the federal interest. In the past, Canadian energy policy has reflected a multiplicity of interest, including conservation, environmental protection, economic development, regional disparity, and consumer price protection.
This apparent narrowing of federal policy interest would be less disturbing if the Accord provided for periodic review and mechanisms by which it could be adjusted. But, without Newfoundland's consent, that option is not available (Clause 2 (g)). Indeed, if Newfoundland achieves the requisite support from other provinces, clause 64 commits the federal Government to introduce a mutually agreeable solution into Parliament to constitutionally entrench the Accord. If that should happen, the Accord and the Board would be effectively insulated from any government review.
The Atlantic Accord offers an interesting approach to federal-provincial energy relations; however, it is an approach that should not be extended to other coastal provinces.
That is a very interesting critique and we will have to consider it when the Bill goes to committee.
I will conclude on federal-provincial relations by saying this. We have to determine what is good for the provinces, what will enable them to develop the diverse regions that are Canada, and at the same time keep a federal interest. There are going to be conflicts. It is ridiculous to say, as the Prime Minister has said, we will not have conflicts. Look at the free trade negotiations. We will always have conflict between the federal and provincial Governments. That is the genius of Canada. That is the system we invented. The problem with the last Liberal Government was that the conflicts were too accentuated. You could legitimally criticize the Trudeau Government for not being able to deal with the provinces. We are still watching to see how the Mulroney Government deals with them. We cannot give everything away. We cannot hope to have a conflict-free situation. What we can hope is to be fair, to look after the national interest, and try and minimize so far as possible any conflicts. However, there will be conflicts on offshore oil or free trade.
Let me turn now to an examination of the regime itself and what is happening. I said that in the real world this was a hollow document. The Prime Minister said he was going to inflict prosperity on Newfoundland and Labrador. The question is, since it was signed has it in fact implemented prosperity on Newfoundland and Labrador? I want to quote
Atlantic Accord
Jim Meek, a very good energy reporter for The Chronicle Herald, on April 30 of this year. He says:
Sad to say, but 1987 will be a wipeout as far as frontier exploration goes. The signs are everywhere.
Last week in Newfoundland, organizations representing 700 companies told reporters that spending on offshore exploration would plummet to $100 million in 1987.
That spending figure equates to as many as four exploration wells, and as few as two.
To put that in perspective, remember 1985 when 33 wells were drilled.
Mobil and Chevron-the two major players in Hibernia-will not push the $4 billion oil project ahead at current oil prices.
Both companies have already announced major cutbacks in exploration expenditures in 1986. And both carry heavy debt loads.
One senior federal government official told me the "whole island" is in a grey depression as the implications of lower oil prices sink in.
"The Peckford government put all its eggs in one basket-and when they tried to pick it up all the eggs fell out."
He goes on to talk about the downturn in Nova Scotia.
In spite of that reality we have Government officials saying Hibernia may get the green light soon. The $6 billion Hibernia oil project could get approval for development in late spring or early summer, said an official with the Canada-Newfoundland Offshore Petroleum Resource Board. That fellow is dreaming in Technicolor. Hibernia is not going to be developed at current oil prices. That should be honestly stated to the Newfoundland people.
Another article says that the federal Government is saying Hibernia will go ahead this summer. The article says:
Canadian officials are saying at the prestigious Offshore Technology Conference in Houston, Texas this week that Hibernia will go ahead in June or July, a Newfoundland conference delegates says.
With current oil prices this is simply not true. It simply cannot happen. We should be honest with the Canadian people.
I remember at the signing ceremony I took some notes. Mr. Marshall, the energy Minister for Newfoundland, said that what we have in this agreement is a perfect melding of the interests of the federal and provincial Governments. The Minister of Justice (Mr. Crosbie) said we will not recognize Newfoundland in 15 years. It will be a newer world. The rhetoric goes on and on. All we are asking is that the politicians in Atlantic Canada and the federal politicians cut the rhetoric and try and deal with the reality. At $15 a barrel U.S. Hibernia cannot go. I stood up in the House of Commons and asked the Minister of Energy, Mines and Resources (Miss Carney) what price was needed for Hibernia to go. She would not answer that question and I cannot get the answer out of officials. It must be at least $20 a barrel. However, that does not mean we should not plan for the future.
When this Bill goes to committee we should look at a number of things. We should combine Bill C-94 and Bill C-92 in the legislative committee. They both deal with the offshore. I was pleased to see the Government House Leader agree to that in principle today if we can work out the technicalities.

May 26, 1986
Atlantic Accord
Second, I think the committee should visit Halifax and St. John's to hear some people and look at the Bill. I hope government speakers address that suggestion in their speeches today, because we are going to need some help from the Government to do that. Third, I think we have to look at the development fund and a joint board in real detail in committee. Fourth, we have to look at safety. Let us not forget that before the Accord was signed many men were lost on that rig-Was it 82?


Mr. Tobin:: Eighty-five, and sixty-nine were Newfoundlanders.


Ian Gardiner Waddell: Hibernia is in iceberg alley and it is a very difficult place. There was a Member in the previous House, from Calgary, and I did not always agree with his philosophy. However, he knew a lot about the mechanics of drilling. I remember him saying to the House that he did not think we had the technology for Hibernia. We were almost going ahead too quickly. We should look at that. We should look at safety so that, through greed and the hype of politicians and developers, we do not go ahead too quickly and lose more human lives, as in the Ocean Ranger accident.
We should look at the hiring of local people and how that squares with constititional rights and so on. We should look at the regional aspect. I was in western Newfoundland. I know the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) will tell the House about this because he is far more expert on it than I am, but I understand people in those areas say, wait a minute, if you are going to put all your eggs in the Hibernia basket what are you going to do for our forest industry? I remember in Corner Brook they could not even get a regional forestry centre building.


Brian Vincent Tobin: It was cancelled.


Ian Gardiner Waddell: The Hon. Member's Government promised it a number of times, I understand, and the new Government cancelled it. However, that is an example of ignoring a region and putting so much money into Hibernia. We should not forget about the forest and fisheries which are part of the development of Newfoundland. It is not all oil.
We should be looking at Canadianization. The Liberal energy critic spoke briefly about that in his speech. If I can simplify it, the problem is this. There were $8 billion in PIP grants given to to the offshore. What that did was get some medium-sized Canadian companies like Husky Bow Valley and others involved in the offshore. Now, because we have eliminated that regime through Bill C-92, we run the risk that the only ones able to get into Hibernia when it eventually goes, as I think it will in the 1990s, will be the big American oil giants like Mobil.
Mobil Oil is a difficult company, a tough company to deal with. It is centralized in New York. The Government of Newfoundland will have to be very strong, quite frankly. These
joint boards will have to be very strong in order to deal with such large companies such as Mobil. They are more powerful than the Newfoundland Government. We will to need to look at that very carefully. We will need to look at how we can get Canadian private companies involved in the offshore development.
The other thing we will have to look at is the role of Petro-Canada. What happens if this Government privatizes part of Petro-Canada, as it promised, and there are minority shareholder in Petro-Canada. Then the Government wants Petro-Canada to go out and develop Hibernia, when the time comes. What is going to happen? Maybe the minority shareholders will say no, the want safe things like gas stations where they can make some money, or they want to drill in Alberta.
If you want Petro-Canada to go to the offshore to develop Hibernia in the early stages, let us say it has to be done and you have privatized part of Petro-Canada and you have minority shareholders who perhaps do not want to go. It may then be possible that Petro-Canada could not go to the offshore, it could not be directed by the Government of Canada to go there. I draw the attention of this House and Newfoundlanders to that situation. How are you going to develop Hibernia if Mobil and Petro-Canada will not do it. You will have no means of doing it. You could never develop Hibernia under that scenario. That is a thing we may want to look at in committee.
I will conclude by saying that there are a lot of things in this Bill that we have to look at in committee. We should remember that right now it is a hollow document because of the world price of oil and some of the policies of the Conservative Government in the offshore. In the future I think Hibernia will go. We have to look at this Bill to make sure it is the best Bill we can put through committee. We need some hearings in Atlantic Canada so we can get the benefit of the wisdom of the people down there. We need to look ahead at some of the matters I raised about safety, the development funds, the hiring of local people, about Canadianization and about the role of Petro-Canada in the development. We have to look at federal-provincial matters, the matter of entrenching what this Bill does in the Constitution, that is, giving the province the basic right over ownership of the offshore. Those are momentous tasks for a committee.
Finally, we have to be honest with the people of Newfoundland and the Canadian people. There has been so much rhetoric, the pot of gold at the end of the rainbow. Referring to Hibernia, the Minister of Justice said, "You won't recognize Newfoundland in 15 years". Perhaps that is too much rhetoric. We have to be honest with the people.
I just conclude by quoting William Marshall, the Energy Minister for Newfoundland who was there and signed the Atlantic Accord over glasses of champagn, and whatever in the hotel in St. John's. He says, "the shrug-" meaning Trudeau, "-has been replaced by the hug-", meaning the present Prime Minister, I guess. "The shrug has been replaced by the hug". Mr. Speaker, we will wait and see.
May 26, 1986


Mr. Morrissey Johnson (Bonavista-Trinity-Conception):: Mr. Speaker, the remarks of the two previous opposition speakers, prompt me to say something that was said a long time ago by a great leader to his followers, "Oh, ye of little faith". I want to say that I have never heard a more compounded, negative attitude displayed in this House than they have displayed today. They should be jumping around in their seats. They should be that glad that this Bill was brought in today for what it means to Newfoundland. If I have time at the end of my prepared text I will respond to some of the things they had to say.
It is a great pleasure for me today to speak on the Atlantic Accord implementation Bill, which is one of the most significant and important pieces of legislation ever tabled in this House. The Bill allows Newfoundland and Labrador to become, after 37 long, and often frustrating years, a full and equal partner in Confederation. The Premier of Newfoundland and Labrador and the Prime Minister of Canada (Mr. Mulroney) have both indicated that this Bill will change the course of history in Atlantic Canada, and I believe them.
Through the Accord, on which this Bill is based, we have taken a giant leap forward in federal-provincial relations. In a very short period of time we have achieved what the previous Government could not achieve after countless years in power. Dismal years of the previous Government's rule also brought a dismal record of negotiation with the provinces. While they preached the gospel of conciliation, they engaged in the politics of polorization. They could not reach agreement with Newfoundland and Labrador because they were unwilling to even bend a little bit to the virtues of common sense.
The people of Newfoundland and Labrador deserve a fair share of the resource that is, after all, right on their doorstep. Our Government gave them a fair deal. The Atlantic Accord demonstrates that a Bill passed in this House can be strong and flexible at the same time, and that it can serve national interests and regional aspirations at the same time.
The proceedings leading up to the signing of the Atlantic Accord, and the signing itself, are vivid examples of this Government's commitment to national unity and national reconciliation. Here was a federal Energy Minister, a citizen of the westernmost province in Canada, meeting on equal footing with a provincial Minister, a citizen of the easternmost province of Canada. I am glad the Hon. Member for Vancouver-Kingsway (Mr. Waddell) mentioned that he was from Vancouver. That was the only thing he said that I really enjoyed, because it was the Energy Minister from British Columbia who signed the Atlantic Accord.
Both the Ministers recognized that Canadians were first and foremost. Neither dictated terms to the other; neither assumed dominance over the other; neither insinuated that one Government was more important than the other. Both parties wanted an Accord that was sensible, reasonable and durable. Most of all, they wanted an agreement that was mutually fair and just, one that would benefit the national interests of all Canadians. These representatives from the two levels of Government got
Atlantic Accord
their Accord, and we, as a country, are richer for it. Under this Accord the Government of this land of Labrador and the Government of Canada will form a partnership to manage, jointly, the resource recovery off the Newfoundland coast. That, in itself, is a landmark of negotiation.
We have arranged for joint management but we will also encourage the private sector to take the lead in offshore development in every possible way. I am not surprised that the private sector is pleased, because under the previous Government it had become one of the forgotten partners in resource development. The days of ignoring and excluding the private sector in this country are over. Private enterprise is at the very heart of Canada's economy. It built this country, continues to build this country and we want private enterprise in the forefront of the development of Hibernia.
There are many exciting aspects of the Atlantic Accord and this Bill. I want to concentrate on just a few of them. Government revenues from the exploration and ensuing production of resources on Newfoundland's offshore will be shared as if these resources were on land. The reason the Government of Newfondland could not reach an agreement with the previous federal Government is that it was unwilling to recognize that fact. Over the next decade, billions of dollars will be spent on Newfoundland and Labrador's vast resources and long overdue economic and social benefits will accrue to Newfoundland and Labrador. At the same time, there will be increased energy security and economic prosperity for the country as a whole. New Canadian jobs will be created, particularly in Newfoundland which has suffered badly in the past from chronic unemployment and lack of job opportunities.
The petroleum industry will be provided with fairness, something that was clearly absent during the five disastrous years of the National Energy Program. There will be permanent management regimes which will ensure that both levels of Government are recognized as equals in the day-to-day management of Newfoundland's offshore resources. There will be improved offshore safety and rigorous protection of the environment and the fishing industry in Newfoundland and Labrador.
The Atlantic Accord implementation Bill incorporates the Canada petroleum resources Bill which was introduced in the House on December 20, 1985. This Bill will replace the Canada Oil and Gas Act of 1982 and includes an amended Oil and Gas Production and Conservation Act. The Canada petroleum resources Bill provides the legislative framework for the Atlantic Accord. The essence of the Bill has been included in the Atlantic Accord implementation Bill itself.
The Canada Petroleum Resources Act provides a simplified competitive system for exploration rights, one based on the principle that the best bid wins. This ensures fair treatment of companies bidding for exploration rights. Disciples of the National Energy Program probably cannot understand why we would insist on fair treatment for the private sector. Their

May 26, 1986
Atlantic Accord
policy, after all, was incubated and hatched in Ottawa under the direction of centralist rule.
The Canada Petroleum Resources Act calls for 50 per cent minimum Canadian ownership in frontier production projects. However, unlike the policies of the previous regime, we will not confiscate property or sneak through the back door to grab revenues retroactively. We will be looking to the private sector to achieve this 50 per cent minimum Canadian ownership.
The Canada Petroleum Resources Act is fair to provincial and territorial governments, it is responsive to markets, and it is sensitive to private companies operating in the high risk frontier regions.
The Atlantic Accord implementation Bill will guarantee decentralization of regulatory authority through the Canada-Newfoundland Offshore Petroleum Board, which will manage and administer oil and gas activity and development off the coast of Newfoundland. Seven people will serve on this board, six members who have been appointed jointly by the Government of Canada and the Government of Newfoundland and Labrador, and a chairman who has been jointly appointed by both governments. This is another demonstration of conciliation. Already, we have filled all the posts on the board and we have begun to appoint the staff that will support it. This is yet another example of what can be achieved by believing in the co-operation, mutual respect and understanding between the federal Government and the provinces.
It is important to note that joint management of offshore Newfoundland resources means that we have an independent board. It will have emergency powers if required and it will be responsible for such matters as the administration of good oilfield practices, the granting of production licences and the collection of royalties.
The Atlantic Accord implementation Bill enables the Government of Newfoundland and Labrador to establish and collect royalties, general resource revenues and taxes related to the offshore that may accrue to provincial jurisdiction. The Province of Newfoundland and Labrador will receive the proceeds from these royalties, provincial corporate income taxes, sales taxes, bonus payments, rentals and fees, and other forms of provincial revenues and taxes that may be established.
The Bill provides for the new Canada-Newfoundland offshore development fund, with grants totalling $300 million, 75 per cent of which will come from the federal treasury and 25 per cent from the provincial treasury. This differs from the previous Government that signed an agreement with Nova Scotia for some $225 million. That province must pay that back when it can ill-afford to do so, and I hope that because of the common sense that prevailed in the Newfoundland Government, to wait for a proper deal for Newfoundland, Nova Scotia will be able to reach an agreement with the present Government. I am sure that we will be considerate of Nova Scotia because it cannot afford to pay back that $225 million.


Brian Vincent Tobin: You agree that the Premier made a bad deal in Nova Scotia.


Morrissey Johnson: No, I
agree that the Liberal Government gave them a bad deal because they had no other choice. The Liberal Government was trying to bully the Newfoundland Government into signing the same accord that Nova Scotia was forced to accept because of economic conditions. We have been poor in Newfoundland for so long, as you well know, that we were not willing to accept anything but the best. That is what we have here, Mr. Speaker, with this agreement.


Some Hon. Members:: Hear, hear!


Morrissey Johnson: By the
time Hibernia comes on stream, about $4.2 billion will have been spent on the project. Total direct employment of about 14,500 person years will have been created in Canada.
We recognize that low oil prices have created uncertainty about higher cost oil projects. However, as the Minister of Energy, Mines and Resources (Miss Carney) has said, we cannot be fooled by temporary declines in world oil prices. As supplies diminish the price will rise again. Will Canada be ready for that day? Will we have continued with the development of projects like Hibernia so that we are not again the unwilling victims of price and supply manipulations as we were in the 1970s? I am confident that we will be ready. I am confident Hibernia will be a key contributor to oil supply down the road and I am confident that Hibernia will provide an important economic stimulus to Newfoundland and to the rest of Canada as part of the Government's national economic policy. That economic policy is working. We have created
630,000	new jobs since September 1984. In Newfoundland and Labrador several thousands of people obtained work during that period. The total investment in Newfoundland and Labrador in 1985 was $2.2 billion. Housing starts have gone up and inflation has gone down.
Recently there was considerable competitive interest in the parcels of land offshore. One of the previous speakers said there has not been much exploration activity going on in Newfoundland. I want to assure you, Mr. Speaker, that the Atlantic Accord is already having an impact on Newfoundland. I refer to the results of the call for proposals which was issued in December 1985. Exploration rights to three parcels of land on the Grand Banks were granted. We all realize that corporations which do this kind of development are able to plan far ahead. That is why the private sector is more responsible fiscally to its shareholders than we are as a Government to the people we represent. We cannot always get into the planning stages beyond the budget of one year. I suspect the industry knew that oil prices were going to come down, and perhaps that is the reason it did not look for more grants to go toward exploration. But that will come. The industry wants to make a profit when it invests its money, otherwise it would be
May 26, 1986

safer to buy Canada Savings Bonds. If the Opposition would be willing to be patient while the economy climbs I am sure it will find that these companies are anxious to go out and do exploration.
The bids for those parcels of land total $4.75 million. This indicates that the industry is confident in both Newfoundland offshore and the joint management regime we have created. There were five companies that were successful in bidding.
The Atlantic Accord shows the people of Newfoundland and Labrador that we are serious about rebuilding federal-provincial co-ooperation and confidence. It also serves as a signal to the rest of the country. It shows we are serious about rebuilding the economy and about making Canada the greatest country in the world in which to live, work and invest.
Twenty-one months ago the Canadian people gave us a mandate to create fundamental change in the country. The Atlantic Accord implementation Bill, is one of the important elements of our strategy. If Hon. Members of the Opposition are really concerned about the people of Atlantic Canada, they will ensure speedy passage of this Bill instead of being negative and critical of all its good points. We could then get on with the job we started.


Brian Vincent Tobin: Mr. Speaker, I have a comment and a question to ask my colleague. First, let me say that I have great admiration for the enthusiasm and energy the Hon. Member for Bona vista-Trinty-Conception (Mr. Johnson) brings to his commitment and belief in the work of his Prime Minister (Mr. Mulroney) and of the Minister of Energy, Mines and Resources (Miss Carney) in devising the Atlantic Accord. However, to be brutally frank, I must say I would be amazed if I thought in reality the Hon. Member fully believes the full extent of the rhetoric he has just promoted about the impact of the Atlantic Accord.
I want to refresh the memory of the Hon. Member because I am sure everyone in Canada recalls very well Newfoundland's position on the offshore. The Premier was on the front page of Maclean's magazine. At one point he was called "the bad boy of Confederation". His position essentially during the days of the previous administration was that Newfoundland's ownership of the offshore should be recognized outright; second, that Newfoundland's ownership be entrenched in the Constitution; third, that 100 per cent of the revenues of the offshore should go to the Province of Newfoundland; four, the Government of Newfoundland would have absolute and total control and final say over the pace of development of the offshore; and five, we would have a guarantee of Hibernia crude for use in the petrochemical industry in Newfoundland. Those were the conditions in his negotiation with the previous Government. It is history that he did not reach a deal with the previous Government.
Let us look at what he did get with the Atlantic Accord. Did he get ownership? Is it recognized? Yes, ownership is recognized. In the Atlantic Accord the Canadian Government is recognized as being the owner of the resource. The first thing
Atlantic Accord
which was demanded was not given. Did the Premier get 100 per cent of the revenues? No. We do not know even now what the revenue sharing will be in the offshore. It is up in the air. We know that the PGRT which we thought we were going to get 50 per cent of, is gone. Did we get a guarantee about the pace of development? Under Section 35(2) of this Act, the federal Minister has the final authority over five-year intervals to declare whether or not security of supply is met or not met. So we do not control the pace of development.


John Horton McDermid: Yes, you do.


Brian Vincent Tobin: Does the Government of Newfoundland get a guarantee of crude to be used in Newfoundland for the petrochemical industry?


Some Hon. Members:: Yes.


Brian Vincent Tobin: Other than a commitment to Hibernia, which the chairman of Petro-Canada says he cannot give away, we are told that the existing refining capacity of eastern Canada must be met first before Newfoundland's needs for new petrochemical facilities can be considered. That is a brief summary of the reality versus the flights of fantasy which confront us when we look at Bill C-94.
Mr. Doug House, a professor at Memorial University, who is currently the chairman of the Royal Commission on Unemployment and Employment in Newfoundland, in an article he wrote about the Atlantic Accord called "The Challenge of Oil", identifies, in addition to the matters I raised, a number of other points he says are weaknesses in the Atlantic Accord.


Mr. Deputy Speaker:: Order. I regret to interrupt the Hon. Member but there is only one minute left before one o'clock.


Brian Vincent Tobin: I will put the question quickly. Ten seconds or less.


John Horton McDermid: Give him to time to answer it.


Brian Vincent Tobin: If Hon. Members would be quiet, I would ask the question. Mr. House points out that there was an absence of adequate provisions for downstream processing industries. He points out there is no participation once the agreement is in place by Governments. Section 40 of the accord wipes out the Crown share. He points out that the commitment by companies to conduct research and development is extremely weak. This is the gentleman who chairs a Royal Commission on behalf of the Government. Does the Hon. Member concur or disagree with his synopsis of the failure and weakness of the Atlantic Accord.


Morrissey Johnson: Mr. Speaker, I see I have only one minute to answer. I want to say that I think three parts of the criticism from people in the opposition Party are pure bunkum; that is my answer. Bunkum to all their questions. That is all I have to say.
;

May 26, 1986


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, today, I want to say that I am proud of the Town of Kapuskas-ing in the riding of Cochrane-Superior, in Northern Ontario. I am proud because the local council has decided to make the town officially bilingual. The decision was adopted by council, with four votes in favour and two against. I would like to express my appreciation to the Council of Kapuskasing and to all citizens who supported this decision, a decision that reflects the spirit of Canada and of our new Constitution.



LABOUR RELATIONS


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, the grain terminal companies in Thunder Bay are making contract demands which threaten the movement of grain through the St. Lawrence Seaway. Members of BRAC's Lodge 650 received their last wage increase in February of 1984 and have been awaiting a new contract since January of 1985. The grainhandlers have worked patiently while their leaders negotiated a new contract. They know times are difficult in wheat farming and in the grain trade.
The companies have now suddenly turned from offering no wage increases to demanding a 20 per cent roll-back in grainhandlers' wages. They argue that the workers should suffer the same type of reduction in their incomes as farmers face in the initial wheat payment for the next crop year. European and American farm subsidies threaten to disrupt the Canadian grain trade.
The grain companies could not celebrate National Transportation Week in any better way than by abandoning this cruel demand for wage reductions and by assuring Thunder Bay workers, prairie farmers, and all Canadians that grain will continue to move down the St. Lawrence Seaway.



TERRORISM


Mr. Bob Brisco (Kootenay West):: Mr. Speaker, in light of yet another act of violence committed by religious fanatics 1 call upon the Government of Canada to introduce a policy whereby any non-Canadian who is convicted of an act of violence based on political or religious grounds be immediately deported to their homeland. Canadians do not want or need the political or religious wars of other nations fought in Canada.


Some Hon. Members:: Hear, hear!




Mr. Ken James (Sarnia-Lambton):: Mr. Speaker, yesterday, on an isolated stretch of highway in British Columbia, a Punjabi cabinet Minister was ambushed and shot. This man was not in Canada on any political or diplomatic mission, but was here to attend the wedding of a family member.
This senseless act of terrorism should never have occurred on Canadian soil. Battles being waged in one's homeland cannot be allowed to be carried over into our country. We open our country to people from many lands who are looking for peace, freedom, and democracy. Yet it is these very principles which are being taken advantage of when terrorism of this type occurs.
For the majority of new Canadians the actions of this very small segment of fanatics is a constant source of pain and embarrassment. The Government of Canada must move swiftly to condemn this type of violent terrorism. Extremists must be made to understand that we do not regard their actions as a political statement but simply as an act of senseless violence.
In my opinion there is no cause, be it political or religious, which could possibly justify the senseless act of terrorism which took place yesterday in B.C.



REFUGEES


Mr. Sergio Marchi (York West):: Mr. Speaker, this past weekend the Standing Conference of Canadian Organizations Concerned for Refugees strongly condemned the Government's proposed refugee determination process. The
May 26, 1986

conference, representing over 100 organizations, passed the following resolution declaring:
-non-confidence in the Government for its failure to respect the fundamental principles unanimously recommended by non-governmental groups across Canada-and for its failure to adhere to the rule of law as required by the Charter of Rights and Freedoms.
As we on this side of the House have argued, the Government's plan fails on three counts-the principle of universal access; the right to appeal based on merit, and not on questions of law; and the right to legal counsel.
Instead of imposing a badly flawed policy the Government should accommodate the grave concerns that have emerged so quickly after last week's announcement. Our international reputation as a humanitarian nation is at stake. Canada must not be seen to be closing its doors on legitimate and genuine refugee claimants.
the oil companies to Canadian consumers. Consumers want to know why the price of home heating oil has not dropped. The price of aviation fuel is another concern. Why has that price not reflected the drop? I have been informed by tourist outfitters that aviation fuel has actually increased in price since last fall.
Canadians are asking when the Minister is going to exert some pressure on the oil companies to reduce prices. Several months have elapsed since the price dropped and the Government's previous excuse for inaction, the backlog of higher priced fuel, is no longer applicable. I think I begin to understand why the Minister of Energy, Mines and Resources was named "Oilman of the Year" when I see retail prices remaining the same, or rising slightly, at a time of falling oil prices.



THE STANLEY CUP


Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, after an absence of seven years, the Stanley Cup is back in la belle province. It gives me great pleasure to mention this remarkable sports achievement here in the House. On May 24, the Montreal Canadiens won their twenty-third Stanley Cup, which means that this hockey club has become the greatest dynasty in professional sport, having broken the twenty-two win record of the New York Yankees in the World Series.
Mr. Speaker, I can assure you that the people of Abitibi-Temiscamingue, who have always been faithful supporters of this team, are especially proud of this magnificient victory and have in fact contributed to a very great extent to that victory. I would like to extend my sincere congratulations to men such as Serge Savard, Jacques Laperriere and of course the young Gaston Gingras-


Mr. Speaker:: Order, please!



TRANSPORTATION OF DANGEROUS GOODS


Mr. Bill Attewell (Don Valley East):: Mr. Speaker, I was pleased to see how quickly the Minister of Transport (Mr. Mazankowski) acted on the Toronto Area Dangerous Goods Rail Task Force's recommendations. Special dangerous goods freight trains travelling in densely populated areas in North York, including my riding of Don Valley East, will be slowed down immediately to 25 miles per hour from 35 miles per hour.
Last summer I travelled a main CP line with officials from CP to gain first-hand knowledge of the problems. CP Rail is to be commended for its efforts in upgrading the track to increase safety, and other groups like M-Trac are also to be commended for their concerns and constructive recommendations. We look forward to the final report of the task force within two years. This report will address such issues as the feasibility of re-routing or relocating dangerous goods shipments around Metro-Toronto.



PRICE OF HOME HEATING OIL AND OF AVIATION FUEL

Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, the House of Commons was informed in early April that the Minister of Energy, Mines and Resources (Miss Carney) was expecting the savings in home heating oil and diesel fuel costs resulting from the drop in world oil prices to be passed on by



THE ECONOMY


Mrs. Suzanne Duplessis (Louis-Hebert):: Mr. Speaker, I would like to compare performances. We have created an average of 33,000 jobs a month in this country, compared to
7,000	under the Liberals. We have created 630,000 jobs in 19 months, and 75 per cent of these were full-time jobs, compared with 404,000 in 55 months for the Liberals, of which 82 per cent were part-time jobs.

May 26, 1986
During the last four and a half years the Liberals were in power, 581,000 more individuals were unemployed, but since September 1984, 229,000 less Canadians were unemployed.
Mr. Speaker, that is a performance. That is the result of our intelligent policies.



PUBLIC SERVICE COMMISSION


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, when tabling her annual report, the Chairman of the Public Service Commission said that the Government would be tabling amendments to the Public Service Employment Act by the end of this year.
As we all know, the Commission's mandate is above all to apply the merit principle in hiring public servants. Today, 55 per cent of the work done by the Commission has no connection with its mandate but is delegated to the Commission by the Government. The Conservative Government should tell us whether it intends to lighten the Commission's part of its burden and what changes we can expect.
At this time, the Commission is responsible for a number of activities that have no connection at all with its mandate. I am referring to training and development, language training, Interchange Canada, career assignment programs and many other administrative tasks. There are those who say there not only appears to be, but indeed, is a conflict when an agent of Parliament,an agent of this Parliament, receives orders from the Government. A thorough House cleaning is necessary so that the Commission can play its main role which is to maintain the merit system in our hiring practices.



IMPOSITION OF U.S. TARIFF ON CANADIAN CEDAR SHAKES AND SHINGLES

Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, President Ronald Reagan has shown a grave error in judgment by taking action against the Canadian cedar shake and shingle industry. This Canadian industry received no Government subsidies, is not dumping, and cannot possibly be deemed to be competing unfairly against an American industry that has no source of raw materials from which to expand production. Actions like this will achieve nothing more than to denigrate the spirit of free trade negotiations. The Americans should consider reversing their decision as a show of good faith.
The strong, definitive action taken by the Prime Minister (Mr. Mulroney) has clearly shown that the Canadian Government is prepared to defend Canada against any action that would be harmful.
However, this is a sensitive issue, and cool heads must prevail. It is imperative that no retaliation is taken which might result in a trade war. In any actions which are taken, we must not cloud the real issue-the fate of the people involved in the cedar shake and shingle industry in British Columbia. Their jobs, their families, and their future are what really count.



DISASTERS


Mr. John R. Rodriguez (Nickel Beit):: Mr. Speaker, recent severe forest fires have devastated the forest industry in the Province of New Brunswick. Today much of the prime timberland in that province is wasteland, with over 120,000 acres destroyed. While the vast majority of lost timber reserves involves Crown land, some 300 to 400 private woodlot owners are now without their prime source of income. In all, some
10,000	to 12,000 acres of private forest reserves have now been lost for many years to come.
While the federal Government has publicly offered sympathy to private owners, no Government assistance has been offered. I ask the Government to look into this very serious matter with compassion, and to provide adequate compensation immediately to these unfortunate private woodlot owners whose livelihoods have been destroyed through no fault of their own.



MEMBERS OF PARLIAMENT


Mr. John Gormley (The Battlefords-Meadow Lake):: Mr. Speaker, all Canadians should be concerned about the activities of a Member of this House of Commons, the Liberal Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy). This Member, well known for his frequent and scathing attacks on the policies of the United States Government, has now approached an American congressional committee to obtain information on Canada's role in the case of lobbyist Michael Deaver.
However, in so doing, the Hon. Member for Winnipeg- Fort Garry is co-operating with the same Congressmen who
May 26, 1986

are attempting to block tighter controls over acid rain. It would appear that we have a Canadian politician in-


Mr. Speaker:: Order, please.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Hon. Members know that the Chair is in some difficulty when comments verge into comment on another Member. Policy matters I can allow. The Hon. Member may want to consider the precedents, and I will recognize him tomorrow.



UNITED NATION


Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, I am sure all Canadians join with me in welcoming the Special Conference of the United Nations on Africa. This will be the first time that the United Nations will have addressed itself to the needs of one continent. I hope the conference will include not only justifiable concern about the environment, but justifiable concern about the militaristic policies of many Governments in Africa. These policies mean that $11 billion per year are spent on military equipment by Governments which preside over the affairs of people who are going hungry.
In the armed forces of African countries there are in excess of 1,800,000 men. If a fraction of that money were devoted to food production, there would not be a need for the crisis conference which we are about to convene.
I hope our Government and our representative to the United Nations will ensure that this item is on the agenda of that conference.



IMMIGRATION


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, a week ago Friday I informed the House that Employment and Immigration Canada had sent a letter to Mrs. Helga Muselmann of Hawkesbury, telling her that she and her children had to leave Canada because her husband was in breach of a ministerial permit which allowed them to enter the country. The crime in question was that the man beat up his wife. She rightfully reported him and therefore they had to leave Canada.
I am happy to say that the Minister of State for Immigration (Mr. McLean) has since changed that decision. I want to thank him and his assistant, Mrs. Kay Stanley, for seeing the
Oral Questions
light and realizing that this situation was absolutely intolerable. I am pleased that they had the good sense to change that decision.



ORAL QUESTION PERIOD


Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. It concerns President Reagan's decision to impose a 35 per cent tariff on British Columbia shakes and shingles, putting at risk at least 10,000 direct and indirect jobs in that province. In a CTV interview yesterday, the Secretary of State said that he told Secretary Shultz that the decision was "a shock to us", that it "came as a surprise to us" and "to our Embassy". How could this be correct if at least two weeks ago, as I am informed, the Premier of British Columbia sent a formal written communication to the Prime Minister warning him of this impending decision and asking him to intervene with the President to head it off? How come this communication was ignored and this comes as a surprise to us?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, the Premier of British Columbia, as is his duty, and he exercises it very vigorously, had expressed concern about a range of threats in the American Congress to the lumber industry in British Columbia and in Canada. We have been acting to try to reduce or prevent those threats from taking effect. My comment yesterday related to the specific action announced without any precise warning to the Government of Canada.


Mr. Broadbent:: Precise warning?


REQUEST THAT PRIME MINISTER SEEK SUSPENSION OF U.S. TARIFF
Herbert Eser (Herb) Gray: Mr. Speaker, I have another question for the Secretary of State for External Affairs. I am informed that Premier Bennett's communication relates specifically to the 35 per cent duty that was impending on British Columbia shakes and shingles. Will the Secretary of State get the Prime Minister to call President Reagan immediately and ask him to suspend that 35 per cent tariff decision, and all other pending and intended trade actions against Canada, including Canadian lumber, as a condition of the free trade talks with Canada continuing? Will the Prime Minister take that step to protect Canadian interests?


Charles Joseph Clark: Mr. Speaker, one thing that has become abundantly

May 26, 1986
Oral Questions
clear is that now more Canadians, I would think even members of the Official Opposition, know how virulent is the force of protectionism in the United States-


John Edward Broadbent: We always knew.


Charles Joseph Clark: -and how important it is for us to have a system that works more effectively than the system that is now in place. That is why we attach such a high priority to the question of seeking, through negotiations with the United States, to put in place a better system than one which leaves Canadian producers of shingles and shakes, and other Canadian producers, in some kind of jeopardy.
The Prime Minister has communicated to the President. I have Communicated to Secretary Shultz. We are now considering a wide range of other measures that the Government of Canada might take, including assistance to those producers in British Columbia who might be affected.


Mr. Frith:: 


UIC. REQUEST THAT PRIME MINISTER TELEPHONE UNITED STATES PRESIDENT
Herbert Eser (Herb) Gray: Mr. Speaker, why is the Prime Minister afraid to call his supposed good friend, President Reagan? If he doesn't know the phone number, I will give it to him. It is 456-1414. Why won't he pick up the phone and make that call? Why is the Government standing idly by while some 10,000 British Columbia jobs are going down the tube because of the way this Government is bungling our trade relations with the United States?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, we believe that the President has Canada's message.


STATEMENT ATTRIBUTED TO TRADE ADVISER
Brian Vincent Tobin: Mr. Speaker, my question is also for the Secretary of State for External Affairs. The Minister ought to know that Canadians are wondering today which is more bizarre, the U.S. tariff action or the Government's contrived and phoney response to it.


Mr. Crosbie:: Sit down.


Brian Vincent Tobin: How can the Minister expect Canadians to believe anything other than British Columbia interests were sold as the price for Senate Finance Committee votes for free trade, when this morning we have a member of Canada's International Trade Advisory Committee to the Minister for International Trade, Professor Alan Rugman of Dalhousie University, saying, according to The Chronicle-Herald, Halifax, that the shingles decision was no surprise? How can a Government adviser in Halifax be aware of something of which the Government in Ottawa claims it is ignorant?


Charles Joseph Clark: Mr. Speaker, as I have made clear in answer to the House Leader of the hon. gentleman's Party we were, of course, aware that the United States was considering action in this field. We were surprised that the action came in the form it did and without notice to Canada.


POSITION OF UNITED STATES PRESIDENT
Brian Vincent Tobin: Mr. Speaker, I have a supplementary question for the Secretary of State for External Affairs. Did the President of the United States or the President's representatives at any time indicate to the Government of Canada that in order to acquire the votes to send free trade talks to the Senate Finance Committee a price would have to be paid? Was it indicated to the Government of Canada that the price was B.C. cedar shakes and shingles? Did the Government of Canada express strong opposition to that kind of position by the United States Government?


Charles Joseph Clark: Mr. Speaker, the Hon. Member, if he has been listening in this House of Commons, knows that the answer to his first two questions is in the negative. He would also know that to pretend otherwise is to do a great disservice to the truth.


GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, my question is for the Secretary of State for External Affairs and it is on the same subject matter. The Government knew that the Americans had to reach a decision by May 24 at the latest on shakes and shingles. The Premier some two weeks ago specifically addressed the subject matter of shakes and shingles, and I assume also that the heads of the companies directly involved in British Columbia were also concerned about that. Given its importance to thousands of workers in British Columbia, did the Minister get in touch with his equivalent in advance? Did the Prime Minister get in touch with the President in advance? Did our ambassador call in advance? Who was down there fighting for jobs in British Columbia before the decision was made?


Charles Joseph Clark: Mr. Speaker, we were all there fighting for jobs in British Columbia and other-


John Edward Broadbent: Specifically on shakes and shingles?


Charles Joseph Clark: Yes, on the question of shakes and shingles representations were made by a variety of Canadian government officials to American authorities. We are now proceeding with consideration of a range of responses which might be open to Canada in order to make sure that a decision we regard as an erratic act does not become a pattern and put in further jeopardy the understandings agreed to by the
May 26, 1986

President regarding trade with Canada when he signed the Quebec Declaration.


SOFTWOOD EXPORTS-IMPENDING U.S. DECISION
John Edward Broadbent: Mr. Speaker, obviously we on this side of the House hope the Government is successful in getting the American President to reverse that decision. However, I have a question about another decision which will affect thousands more jobs than even the shakes and shingles. I refer to the U.S. decision which has to be made before June 9 on the softwood lumber industry. This decision, to be made at the administrative level, to go ahead or not with a tariff, will affect thousands of jobs. Given that, has the Canadian Government now told the Americans that as a condition for continuing these talks they must say no to an additional tariff on Canadian softwood lumber?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, we have made very strong and direct representations, as I have personally, regarding the softwood question. However, let me be clear. We in this country now face a growing threat to jobs across the country from protectionist pressures in the U.S. One way to deal with that threat is to try to put in place a new trade arrangement. The NDP is suggesting that we should not protect those Canadian workers. I will not accept that.


John Edward Broadbent: All Canadians, particularly those in B.C., will see how phoney that answer is.


REQUEST THAT TRADE TALKS BE SUSPENDED
John Edward Broadbent: Mr. Speaker, if the Minister is concerned about these jobs, if he wants to put President Reagan to the test of living up to his commitment to free trade, will he say to the U.S. that there will be no continuation of these talks unless the Americans are prepared to stop taking countervailing action against Canadian products during the talks, specifically not take action against softwood lumber which will throw thousands of Canadians out of work?


Charles Joseph Clark: Mr. Speaker, the Leader of the NDP has simply rephrased his question. He is asking us to suggest to the Americans that unless they take a particular action on softwood we should cut off talks whose result would be in the interest of Canada.


Ian Deans: May be.


Charles Joseph Clark: We should maybe cut. Now they are changing their position.


Ian Deans: No, may be in the interest of Canada.


Charles Joseph Clark: Maybe we should cut off the talks. There may be some confusion in the NDP. There is none here. We believe it is in Canada's interest to try to put in place, through trade talks with the U.S., a system better than the one
Oral Questions
which now puts at risk our softwood producers, cedar producers and others. We believe the status quo has to be changed and can be changed. We intend to try.


PRESENCE IN GALLERY OF CHAIRMAN OF SOUTH AUSTRALIA STATE'S PUBLIC ACCOUNTS COMMITTEE
Mr. Speaker:: May I bring to the attention of Members the presence in our gallery today of Mr. John Klunder, M.P., Chairman of the Parliamentary Public Accounts Committee of the State of South Australia.


Some Hon. Members:: Hear, hear!


TARIFFS IMPOSED BY UNITED STATES-GOVERNMENT POSITION
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. First of all, I would like to remind him that ever since the Polar Sea cruised through our territorial waters in the Arctic, the Americans have known that Canada was vulnerable and could be attacked without fear of reprisals.
I would like to ask the Secretary of State for External Affairs, who was one of those who let the ship go through, what he intends to do. What does he have in mind, after all the talk we have heard for two or three days, to make the Americans understand that free trade negotiations cannot be allowed to continue, considering the steady rain of tariffs being showered on Canada?


Charles Joseph Clark: Mr. Speaker, I can advise the Hon. Member that first of all, today we are considering certain measures that are open to Canada, both measures within the purview of international trade and measures designed to help Canadian producers who are affected by the U.S. action.
Second, we are continuing negotiations for the purpose of reaching an agreement with the United States, so that in future, Canadians who today are threatened by protectionist forces in the U.S. will be better protected.


REQUEST FOR CLARIFICATION CONCERNING QUESTION POSED BY MEMBER FOR WINDSOR WEST
Jacques Guilbault: Mr. Speaker, I realize we have to negotiate with the Americans, but we should not go into this with our eyes closed. I want to ask the Secretary of State for External Affairs: How could he answer my hon. friend from Windsor West, who on April 28 asked him about the letter President Reagan sent to Senator Packwood, which referred to the possibility of imposing import

May 26, 1986
Oral Questions
duties on lumber: "The Hon. Member is raising a set of fears that are groundless", if he didn't have his eyes closed? That was your position April 28. Did you wake up since? We told you so!
Right Hon. Joe Clark (Secretary of State for External
Affairs): The answer was an answer to a specific question which concerned an unjustified allegation.


REQUEST FOR ACTION TO REVERSE U.S. DECISION
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, yesterday the Secretary of State for External Affairs told Question Period on CTV the Americans were trying to spook us last week to prove what tough negotiators they were. After the Minister's weekend of sending his bright boys in the Ministry out to look for answers, what specific detailed actions is the Government going to take to reverse those moves made against us and our 4,000 producers in B.C.?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, I am sure the Hon. Member wants to retain a reputation for honesty, which he has worked for through his career and brought to the House. He would not want to leave the impression that I did not accept, from references to any American attempts to spook Canada, the action to which his question relates. As I have indicated earlier in the House today, twice, I think, we are considering a range of appropriate responses for Canada. Some are in the field of international trade, some might offer assistance to those Canadians who are affected. They will be considered by the Priorities and Planning Committee of the Cabinet of Canada tomorrow morning.


REQUEST THAT TRADE TALKS BE SUSPENDED
Steven W. Langdon: Mr. Speaker, that answer might have done on Friday; it does not do on Monday. You need to give us specifics. Does the Minister not see that the most effective, immediate way to counter this bizarre and eccentric act, as he has called it, is to suspend the free trade talks with the United States until U.S. unilateral moves are ruled out for the future? Wouldn't that give us the most bang for the buck right now?


Charles Joseph Clark: Mr. Speaker, the Hon. Member has risen in this House several times since this debate began, suggesting that we stop a negotiation that could result in advantages to Canada. In this case what we have-


An Hon. Member:: A confirmed spokesman for the NDP.


Charles Joseph Clark: -we now have another member for the Canadian Labour Congress indicating to us that the New Democratic Party position was right. Let me make it clear that what was demonstrated clearly on Thursday is the
vulnerability of Canada to protectionist forces in the United States. We have to take action and we must seek to try to protect Canadians better against those kinds of protectionist forces than they are protected now. We must try to negotiate a better trade arrangement. The NDP should be supporting that, not simply leaving Canadian workers exposed.


PRESIDENT'S LETTER TO U.S. SENATOR
Douglas Cockburn Frith: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. On May 8 President Reagan wrote Senator Robert Packwood and said in part:
-I am committed to finding a rapid and effective solution to the Canadian softwood lumber problem ... I will take such action as may be necessary to resolve this problem consistent with U.S. law.
Will the Minister not agree that 4,000 British Columbia families have paid the price for Senator Packwood's signature on the fast track free trade agreement?


Charles Joseph Clark: No, Mr. Speaker, I would not.


GOVERNMENT POSITION
Douglas Cockburn Frith: Mr. Speaker, last Friday the Government said it would have swift and prompt retaliatory measures ready for this week. Yet today the Chairman of the PC caucus, the Member for Mission-Port Moody, is advocating no retaliatory measures-


Mr. Speaker:: Order. This is a preamble. Just a supplementary question.


Douglas Cockburn Frith: What is the position of the Government on this
issue?


Charles Joseph Clark: Mr. Speaker, for the fourth time in 15 minutes in this Question Period, the answer is that the Government of Canada has been considering a range of responses-some commercial, some that might offer assistance to those Canadians who are affected. Those responses will be considered by the Priorities and Planning Committee of Cabinet tomorrow morning. Then we intend to act on them as quickly as would be effective.
This happened Thursday night. The Government of Canada responded on Friday morning. At this time we are preparing a range of other responses that might be open to us. We intend to continue to defend and protect the interests of Canada.


EFFECT ON WORKERS IN MISSION, B.C.
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. One thousand five hundred of Mission's population of 22,000 work in the shake and shingle industry. All of them face an imminent lay-off from work, adding to the already 25 per cent unemployment rate in Mission. In view of
May 26, 1986

Oral Questions FISHERIES
these facts, can the Minister not now at least give us some idea of what the Government will do, perhaps in co-operation with the province and the municipality, to ensure the export markets of the shake and shingle industry in British Columbia?


Charles Joseph Clark: Mr. Speaker, I will deal with that question in the House for the sixth time. We are considering actions now and expect to be in a position to announce them fairly shortly. Some will take effect internationally, others are actions which might bring assistance for those British Columbians who are affected. I should take the opportunity to express my very real appreciation for the help by the Member for Mission-Port Moody in these discussions.


Some Hon. Members:: Hear, hear!


An Hon. Member:: He looks embarrassed.


REQUEST FOR EXPORTS GUARANTEE
Pauline Jewett: He
looks embarrassed because he has been able to do nothing since the Minister will not say to the industry, which has been most competitive, has never had a subsidy and has operated under free trade-


Mr. Speaker:: Order, please.


Pauline Jewett: He will not say to that industry-


Mr. Speaker:: Order, please.


Some Hon. Members:: Sit down.


Mr. Speaker:: Does the Hon. Member have a question?


Pauline Jewett: Yes, Mr. Speaker. Will the Minister not say to that industry that, because of the facts I just mentioned, the Government will guarantee its exports in the U.S. market?


Some Hon. Members:: Oh, oh!


An Hon. Member:: What a question.


John Horton McDermid: Thank God you are in opposition.


Charles Joseph Clark: Mr. Speaker, the actions we are considering are designed precisely to do whatever is open to Canada now. They are to try to protect and help Canadians in that industry, and also to try to return the United States to a commitment to freer trade and a commitment not to take these kinds of actions against Canada.


APPREHENSION OF SPANISH TRAWLERS-REPORTED BLOCKADE THREAT
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, my question is directed to the Minister of Fisheries and Oceans. Marine Radio reported this morning that 40 foreign boats are to form a blockade tonight to prevent the Canadian Fisheries patrol vessel Leonard J. Cowley from bringing two Spanish trawlers to justice in St. John's. Is the Government prepared to give a naval escort, as it should, to prevent such a blockade from forming, or is the policy of the Government one of wait and see, which could endanger the safety of our Fisheries officers?


Hon. Thomas Siddon (Minister of Fisheries and Oceans):: Mr. Speaker, of course the Hon. Member would know that every necessary measure would be taken to bring our Fisheries officers safely back to Canada. However, he should also know that when Members of Parliament engage in irresponsible blabbering, extracting from fragmentary-


Some Hon. Members:: Oh, oh!


Thomas Edward Siddon: -extracting from fragmentary information and gossip, they are jeopardizing the very safety and success of the mission in question.


Some Hon. Members:: Hear, hear!


VIOLATIONS OF CANADIAN LAW
George Baker: Mr. Speaker, the number of reported violations-


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: Perilous George.


George Baker: -the number of reported violations by foreign countries has multiplied by more than 12 times over the past year. The prosecutions have increased by only a small margin. Yet you prosecute a Newfoundland boat for being a half inch too short-


Mr. Speaker:: Order.


George Baker: My supplementary question is directed to the Minister. Will he give Canadian boats the same leeway as he gives foreign boats? Canadian boats don't want to kidnap Fisheries officers; they want a share of their resource that foreigners are destroying.


Some Hon. Members:: Hear, hear!


Thomas Edward Siddon: Mr. Speaker, in fact, these are the very reasons why the Government is using stringent measures to enforce effectively the 200-mile economic limit where some of the richest groundfish stocks in Atlantic Canada are to be found. The Hon. Member talks about violations. In 1984, under the

May 26, 1986
Oral Questions
Government of which he was a member, there were 24 violations with collected fines totalling $13,000. In 1985 the same number of violations lead to fines approaching $1 million. That is the the Government that left us that sorry state.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Where were you when you were needed? That is when you should have been howling and yowling and jowling.


An Hon. Member:: You got the shakes, Crosbie.


John Carnell Crosbie: Blabbermouth Baker.


Mr. Rossi:: There is the big fish himself.


Mr. Speaker:: Order, please.


Brian Vincent Tobin: There is just as much noise-


Mr. Speaker:: Order, please, the Hon. Member for Humber-Port au Port-St. Barbe.


U.S. TARIFF ON CANADIAN CEDAR SHAKES AND SHINGLES- EXPORT ON CEDAR LOGS
Gerry St. Germain: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. In view of the U.S. protectionist tariff action against Canada's cedar shake and shingle industry, will the Minister take action to prevent raw materials such as cedar blocks and logs from British Columbia being imported into the United States, effectively transferring the Canadian shake and shingle production and Canadian jobs across the border and, if so, what action will he take?


Charles Joseph Clark: Mr. Speaker, the Government of Canada and the Province of British Columbia already have mechanisms in place to control the export of logs to all countries. We intend to enforce that mechanism vigorously and completely. I can give the Hon. Member the assurance that the Government will not permit the Canadian shake and shingle industry to be exported across the border.


REQUEST THAT ISSUE BE MOVED TO TOP OF TRADE TALKS AGENDA
Gerry St. Germain: Mr. Speaker, is the Secretary of State for External Affairs considering giving specific direction to our free trade ambassador to bring the shake and shingle tariff issue to the top of the bilateral talks agenda?


Charles Joseph Clark: Mr. Speaker, we trust that we have done that and will be able to deal with that question outside the trade negotiations mandate. That is a responsibility of the Government of Canada, to which the Government of Canada is responding.


FISHERIES
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is directed to the Secretary of State for External affairs. It concerns the Spanish trawler incident. Would the Secretary of State for External Affairs indicate exactly what action is being taken with the Spanish Government to prevent any more of these incursions by the Spanish fishing fleet into Canadian waters?


Charles Joseph Clark: Mr. Speaker, this has been a matter, as my colleague, the Minister of Fisheries and Oceans has made clear, which has caused very serious strain on the relations between Canada and Spain. I will be meeting on Friday, I believe, of this week in Halifax with the Spanish Foreign Minister. Certainly this issue is at the top of my agenda. I hope we can take advantage of the very unpleasant incident which happened over the last weekend finally to achieve a resolution to a problem which was rampant during the former Government-


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: -which continues now and with which we want to deal.


PROTECTION OF CANADIAN WATERS
Raymond John Skelly: Mr. Speaker, my supplementary question is directed to the Secretary of State for External Affairs. One is cerainly tempted to ask whether or not the Canadian Navy has sufficient strength should the Spanish fishing armada attempt to blockade the return of those vessels. In reality, what is required is some monitoring during the interim period by the Canadian Navy. Is it the intention of the Government to provide naval vessels to protect Canadian waters until we have a firm agreement with the Spanish on this matter?


Thomas Edward Siddon: Mr. Speaker, as I announced in my answer to a previous question by the Hon. Member for Gander-Twillingate, all necessary measures at the present time are being taken. Those who would wish to sensationalize this issue at a time when silence and trust are important, are jeopardizing the safety and success of that mission.
May 26, 1986


Some Hon. Members:: Come on.


Jacques Guilbault: Oh, do your job.


CANADA-UNITED STATES AUTO PACT
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question is directed to the Minister for International Trade. Almost six months ago provincial Premiers and the Prime Minister agreed to "establishing a common basis of facts and analysis in advance of free trade discussions". Does the Minister believe that that commmon basis includes forcing the Ontario Government to appeal, through the freedom of information route, for a censored version of the impact of the free trade talks on the Auto Pact?


Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, as the Hon. Member well knows, the provinces and the federal Government, under the auspices of Mr. Reisman, have been meeting on a regular basis several times a month. There has been an excellent exchange of information and, to the best of my knowledge, the provinces are quite satisfied with the information they have received to date.


IMPACT OF TRADE NEGOTIATIONS ON ONTARIO
Sheila Maureen Copps: Mr. Speaker, obviously the Minister for International Trade does not know the facts. I would like to ask him to comment on the fact that when the federal Government sent an information package to the provinces eight items, eight reports, were denied the Province of Ontario, including even the censored version of the Auto Pact study. Again, can he tell us whether he feels it is full disclosure and participation by the provinces to force them to apply through Freedom of Information to get information on the critical impact on jobs in the Province of Ontario?


James Francis Kelleher: Mr. Speaker, I can only once again repeat for the Hon. Member that I am not aware of any concerns expressed to us by the provinces about a lack of information from the federal Government.


TERRORISM
Ian Deans: Mr. Speaker, my question is directed to the Minister of Justice. What protective action was undertaken by Canada when our security services
Oral Questions
became aware of the presence in British Columbia of a high-ranking Indian Government official from the Punjab?


John Carnell Crosbie: Mr. Speaker, unfortunately the high-ranking official to whom the hon. gentleman refers-who, I assume, was the person who was shot yesterday-did not make any request for security to the Government of Canada, nor did he advise the Government of Canada he was visiting Canada. He arrived on May 15. Therefore no security protection was provided because his presence in the country was not known to either the Department of External Affairs or to the Department of the Solicitor General.


ENTRY TO CANADA OF FOREIGN GOVERNMENT OFFICIALS
Ian Deans: Mr. Speaker, is it not normal practice for high-ranking officials from other countries to notify the Canadian authorities prior to their entry into the country? Is it not further normal practice when the passports of persons entering the country show they are officials of Governments that they are at least noted in the journals and notification is given to the Department of External Affairs?


Charles Joseph Clark: Mr. Speaker, this is a very regrettable affair. I have, on behalf of the Government, and I am sure of the Parliament of Canada, expressed to the Indian High Commissioner by telephone this morning our very great regret about the matter, and our further regret that neither the Indian Government nor the Canadian Government was informed by Mr. Sidhu of his intention to come to Canada or his presence here. Mr. Sidhu, when he applied for a visa to come to Canada, was not then a member of the Cabinet of the Punjab, so there was no way through our records that we would have been able to learn of his intention to come to Canada.
I have indicated informally to the Indian High Commissioner my great personal concern that we have to put in place some system which offers more effective protection for people who might be coming here. May I also say that the Government believes it is part of the understanding of persons who come to Canada from other countries that they should leave old quarrels behind. That is also a view which is very actively supported by the overwhelming majority of the members of the Canadian Sikh community.


MEMBERS OF PARLIAMENT
Reginald Francis Stackhouse: Mr
Speaker, my question is also directed to the Secretary of State for External Affairs. It has been reported that the staff of an Hon. Member of this House is actively co-operating with a committee of the United States Congress chaired by a

May 26, 1986
Oral Questions
Congressman described as one of the most vociferous opponents of acid rain controls and one of the most hostile to Canadian interests. What concern does the Minister have that this exchange may work against Canadian-American cooperation in combating acid rain?


Charles Joseph Clark: Mr. Speaker, I am, of course, concerned about the news reports published in The New York Times quoting an assistant of the Hon. Member for Winnipeg-Fort Garry as saying: "We are helping a congressional committee try to block acid rain legislation".


Herbert Eser (Herb) Gray: Read the rest of the sentence.


Charles Joseph Clark: Acid rain legislation has been something very vigorously sought by this Parliament for a very long time. There are problems enough in trying to achieve that kind of progress without Hon. Members of the House of Commons or their staff working to try to block progress for Canada.


TERRORISM
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is directed to the Acting Solicitor General. It also concerns the ambush and attempted assassination of the Indian Cabinet Minister in British Columbia yesterday. The Minister says the Government of Canada was not aware of his presence in Canada. I would submit that the senseless act of terrorism could have and should have been prevented. How can the Minister say that the Government of Canada was not aware of the Minister's presence in Canada when it was common knowledge in British Columbia that the Minister was in British Columbia, and the Indian Consul General in British Columbia was aware of the presence of the Cabinet Minister? Can the Minister explain?


Charles Joseph Clark: Mr. Speaker, if the Hon. Member was in possession of information which might have indicted some threat to an official of the Minister of the Government of Punjab, who was here without having taken the precaution to advise either his High Commissioner or our Government, then I would have hoped that the Hon. Member would have advised relevant officials so we could have taken action to prevent the kind of event which occurred on Vancouver Island.
We did not know. Apparently the Hon. Member did know. If he did, I think he had a duty to let us know.


John V. Nunziata: Mr. Speaker, I find it absolutely incredible-


Some Hon. Members:: Oh, oh!


John V. Nunziata: -that the Government did not know of the presence of the Cabinet Minister.


ROYAL CANADIAN MOUNTED POLICE'S KNOWLEDGE
John V. Nunziata: Will the Government not admit that the Royal Canadian Mounted Police knew some weeks ago that Sikh terrorists in British Columbia were plotting a terrorist act? Will he admit that the RCMP knew in advance that Sikh terrorists were planning to strike?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, I can only take that as notice. I doubt it would be appropriate for us to reveal on the floor of the House of Commons information which the RCMP may or may not have. But I would like to know when the Hon. Member became aware of the presence in Canada of this cabinet Minister from the Punjab.


CHALLENGE '86 EMPLOYMENT FUNDING OF NON-PROFIT ORGANIZATIONS
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration who was here this morning to meet with the delegation concerning Challenge '86 but could not bother to be here for Question Period.


Ramon John Hnatyshyn: Order.


Some Hon. Members:: Order.


Some Hon. Members:: Next question.


Mr. Speaker:: Order, please. The Hon. Member knows such a comment is out of order.


Some Hon. Members:: Next question.


John Edward Broadbent: There is only one Speaker here, you guys.


Mr. Speaker:: Order, please. The Hon. Member will have one question.


Cyril Keeper: My question to the Government is this. Why is it reducing the funding to non-profit community groups under Challenge '86 and the Canadian Jobs Strategy while it is increasing funding to private companies? Why is it financing job creation and training in the private sector by taking the money from non-profit community groups?


Hon. Andree Champagne (Minister of State (Youth)):: Mr. Speaker, there has never been any question of shifting funds from one sector to the other. It is true that there were more
May 26, 1986

applications from the private sector this year, but my colleague might be interested to know that in his own province of Manitoba the private sector was given $1.3 million to create jobs, against $2,812 million for the other sector. So I do not see why he too should be complaining.


Cyril Keeper: Supplementary question, Mr. Speaker.


Mr. Speaker:: The Hon. Member for York East.


LAW REFORM
Mr. Alan Redway (York East):: Mr. Speaker, my question is for the Minister of Justice. Last week, because of our very ineffective pollution laws, a judge in Toronto was required to use contempt of court proceedings to deal with a polluter who continued to dump toxic chemicals despite previous court orders. When will the Minister introduce in the House effective pollution control legislation outlining offences and penalties which will deal with the matter, including jail terms, as recommended by the Law Reform Commission of Canada?


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, the Law Reform Commission of Canada made a report on this subject last November. As a result of its report the procedure is that it will receive comments from interested parties, after which it will make a final report to the Government. It has not yet made that final report. I am sure the hon. gentleman would be pleased to pass his views on to the commission for consideration in its final report and conclusions.


PUBLIC WORKS
Don Boudria: Mr. Speaker, my question is directed to the Minister of Public Works. Some time ago we heard about a contract award procedure used by the Hon. Member for Quebec East. Last week we all learned about the existence of a political agent of the Minister at the Montreal regional office, and finally an article by Mr. O'Neil in Le Devoir of Saturday mentioned a system of kickbacks-
Oral Questions


Mr. Speaker:: Order, please. The preambles are becoming longer and longer. I ask the Hon. Member to come to his question, please.


Don Boudria: Thank you, Mr. Speaker. Can the Minister confirm to the House the existence of these 5 per cent kickbacks, how long has this practice been going on, and who collects them?


Hon. Roch La Salle (Minister of Public Works):: Mr. Speaker, in light of the Hon. Member's last remark, I cannot confirm anything at all. I never heard of such a practice. If the Hon. Member is familiar with this system, he must have heard about it from his Party, not ours.


REQUEST FOR INVESTIGATION
Don Boudria: Mr. Speaker, my supplementary question is addressed to the Acting Solicitor General. Will the Acting Solicitor General immediately request an RCMP criminal investigation into the alleged 5 per cent kick-back scheme to fill Tory Party coffers as alleged in Le Devoir?


John Carnell Crosbie: Mr. Speaker, I would ask the Hon. Member to reconsider the wild, spurious, general, vague and vicious charges which he is constantly spewing in this House without care, caution, or circumspect.


John Edward Broadbent: Sounds like you in opposition.


BAN ON TOBACCO ADVERTISING REQUESTED
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, my question is for the Minister of National Health and Welfare. It concerns the deaths of 35,000 Canadians every year due to tobacco-related diseases. Why is the Minister still shadow-boxing with the tobacco industry? Why is he pretending to talk tough about health warnings on cigarette packages? Why does he not deliver the real blow in favour of the health of Canadians, especially of children, and ban tobacco advertising altogether?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I am not shadow-boxing with the tobacco industry.


John R. Rodriguez: Then what are you doing?


Arthur Jacob (Jake) Epp: What I am doing is sitting down with the tobacco industry to see whether it will take some

May 26, 1986
Oral Questions
action. As I have indicated to the Hon. Member, I will wait until the end of June. Additionally, what I am saying to her and to the country is that the Government will then consider what action to take.
I am saying to her very directly that if she is an expert in this field at all, and if she has looked at the effect that the banning of advertising has on reducing the number of smokers, then she will know that it is painfully few. There are other steps which one has to take. It might be good visuals, and she often deals with visuals rather than actualities. I deal with realities.


HAZARDOUS PRODUCTS DESIGNATION INQUIRY
Lynn McDonald: Mr. Speaker, the Minister will know that the group, Physicians for a Smoke-free Canada, has made a formal request of the Government to add tobacco products to Schedule II of the Hazardous Products Act-


Mr. Speaker:: Order, please. A supplementary question without a preamble.


Lynn McDonald: Mr. Speaker, my question is simply this. Has the Minister taken a position on this matter? Will the Government place tobacco products in the Hazardous Products Act Schedule? If not, how many deaths does it require before the Government will treat tobacco as a hazardous product?


Arthur Jacob (Jake) Epp: Mr. Speaker, first, I want to point out to the Hon. Member just how important it is for comprehensive action. The Minister of Transport is co-operating with regard to public transportation. The Minister of Agriculture is co-operating in terms of tobacco farmers. In the Department of National Health and Welfare we have taken various actions. The Hazardous Product Act falls under the jurisdiction of the Minister of Consumer and Corporate Affairs. This is why we need a comprehensive Act. I wish the Hon. Member would begin supporting the comprehensive approach which the Government has taken.


CHALLENGE '86 FUNDING OF SOCIAL SERVICE PROJECTS
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is for the Minister for summer employment.
Some Hon. Members:: Order!


Ramon John Hnatyshyn: Expel him.


Mr. Allmand:: This morning the Minister met with representatives of community service groups from across the
country whose summer programs have been cut as a result of the Government's policy. What will the Minister and her Government do for the thousands of needy children, disabled and older people who will be without services this summer as a result of these cuts and quotas? What is her intention with respect to these people?


Andrée  Champagne: Mr. Speaker, this morning the Minister of Employment and Immigration and I met with some representatives of the Coalition for Challenge '86. In listening to the Hon. Member for Notre-Dame-de-Grace-Lachine East what I do not understand is why he is totally against young students getting jobs which usually last longer, pay better, and in which they can really obtain practical experience.


Some Hon. Members:: Oh, oh!


Andrée  Champagne: This is being done through the private sector.


REQUEST THAT PRIORITY BE GIVEN TO SOCIALLY USEFUL EMPLOYMENT
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I am not against that, and that is not true. Will the Minister not re-examine the Challenge '86 program in order to give priority to summer employment which is socially useful and which will provide essential community services, whether in the private or the public sector? Will she not consider that?
Andrée  Champagne: In
the Province of Quebec private sector, Mr. Speaker, 11,000 jobs were created at a cost of $13 million, and 13,000 at a cost of $22 million. Surely there must have been non-profit organizations in this sector which receive funds. Twenty-two million dollars were earmarked for Quebec.


FUNDING OF NON-PROFIT ORGANIZATIONS
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, my question is for the Minister of State for Youth. We have heard her refrain before. Will the Minister not answer the question posed which was also asked of her this morning? What will the Government do about the some
100,000	young people served by these non-profit organizations? What will she do for them? We know that jobs are being produced; but we want the Minister to answer a simple question. What will happen to those 100,000 youth, disabled and others who will not be served because of the Government's policy?


William Warren Allmand: Right on! Answer the question.


Andrée  Champagne: Mr. Speaker, this is a Ministry of Employment. We are creating jobs for our young people to enable them to pay tuition, to
May 26, 1986

obtain some practical experience, and to enable them to make the transition between school and work more easily upon graduation. This is what the Challenge '86 program is all about. This is what it is succeeding in doing better than any program which has ever existed.


William Warren Allmand: Baloney!


Ramon John Hnatyshyn: Expel him!


Mr. Speaker:: A very brief supplementary question.


MINISTER'S POSITION
Howard Douglas McCurdy: Mr. Speaker, does the Minister not think it is just as important to serve those in society who are being served by these non-profit organizations-those who are least able to help themselves-as it is to provide funding for university students and college students?
[DOT] <1500)


Andrée  Champagne: Mr. Speaker, as of May 21 almost $77 million had been given to the non-profit sector.


Howard Douglas McCurdy: Answer the question.


Andrée  Champagne: Obviously some needy people in those groups to which the Hon. Member is referring have received some money and are creating the jobs which will be needed to help those young people and children during the summer.


Mr. Speaker:: I have received notice of a point of order form the Hon. Member for The Battlefords-Meadow Lake.


POINTS OF ORDER
John Kenneth Gormley: Mr. Speaker, I would like to issue an apology to the House. In referring to the activities of an Hon. Member, in language no worse than is used by members of the Opposition when referring to Government Members and cabinet Ministers, I was ruled out of order, presumably in conformance to Standing Order 59 which refers to language which is disrespectful or offensive. If indeed I used offensive or disrespectful language, again no different than that used by members of the Opposition, I would like to offer an apology to Hon. Members of the House.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: That was creative. The Hon. Member will find that there is more to it than that and that is why I indicated to him that he might want to read the precedents. I might refer
Customs Tariff
him specifically to the comments made by the Lefebvre Commission which indicated what the Chair should and should not accept during statements by Members, and that is a somewhat different matter.


SECRETARY OF STATE FOR EXTERNAL AFFAIRS-RESPONSE
Sheila Maureen Copps: Mr. Speaker, I rise on a point of order arising from Question Period. In response to a set-up question put by one of the Government Members, the Secretary of State for External Affairs (Mr. Clark)-


Some Hon. Members:: Order!


Mr. Speaker:: It is exactly the same issue of casting reflections. Does the Hon. Member have a point of order?


Sheila Maureen Copps: Mr. Speaker, with respect to questions about the staff of the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), the Secretary of State for External Affairs was misleading in his response-


Some Hon. Members:: Order!


Mr. Speaker:: Order, please. The Hon. Member has not said that the Minister was deliberately misleading the House; therefore, what she has said is not unparliamentary. However, I take it she is going to bring up a point of order about what was said. She knows that that is not a point of order but is a question of debate. Therefore, does the Hon. Member have a point of order?


Sheila Maureen Copps: Yes, Mr. Speaker, given that I am accepting that it was an inadvertent mistake, the Minister stated in the House that we are helping a congressional committee-


Mr. Speaker:: Order, please. Would the Hon. Member resume her seat? We go through this every time. Does the Hon. Member have a point of order? If it is simply a matter that she does not believe that what was said is correct, that is not a point of order. Does the Hon. Member have a point of order?


Sheila Maureen Copps: Yes, Mr. Speaker, I just want to complete my point of order in that the Minister should-


Mr. Speaker:: Order, please. The Chair has not accepted that the Hon. Member has a point of order on the basis of what she has said.



GOVERNMENT ORDERS


Ramon John Hnatyshyn: that a Ways and Means Motion to amend the Customs Tariff

May 26, 1986
Atlantic Accord
and to amend an Act to amend the Customs Tariff, laid upon the Table on Wednesday, May 21, be concurred in.


[Stage Direction]
Motion agreed to.
Ramon John Hnatyshyn: that Bill C-l 11, an Act to amend the Customs Tariff and to amend an Act to amend the Customs Tariff, be read the first time and be printed.


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

[Stage Direction]
The House resumed consideration of the motion of Miss Carney that Bill C-94, an Act to implement an agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore petroleum resource management and revenue sharing and to make related and consequential amendments, be read the second time and referred to a legislative committee.
Brian Vincent Tobin: Mr. Speaker, I am pleased to participate in debate on Bill C-94, particularly because I have the opportunity to rise following the Hon. Member for Bonavista-Trinity-Conception (Mr. Johnson), unfortunately interrupted by lunch hour and Question Period.
The Hon. Member told the House a few hours ago that the Atlantic Accord represented a panacea for all of Newfoundland's problems. He said that with the historic Atlantic Accord, Newfoundland would finally mature and come into its own in Confederation and countless jobs and billions of dollars would flow to the Province of Newfoundland.
I say that I am pleased to speak following the Hon. Member for two reasons. The first is that it was interesting to listen to him and to understand the extent of the enthusiasm of Conservative Members and the extent to which they will go to try to rationalize this incredible package that was put together by the federal Government and the Government of Newfoundland.
All Members of Parliament will recall that a few short years ago the Premier of Newfoundland, Brian Peckford, was very vocal in putting forward Newfoundland's offshore position when a Party of another stripe was in power. He travelled the country, toured the land. He made himself available to the national press and he laid down Newfoundland's position.
Let us examine the position Mr. Peckford put to the previous Liberal administration, a position to which he required agreement or he would not sign a deal, as compared to what is contained in Bill C-94. That will be an interesting
exercise. Let us see what the Premier got from this Government that he could not get from the previous Government, and let us see how consistent the Premier has been.
First we all recall that the Premier of Newfoundland said when it came to the offshore Newfoundland that his first requirement for signing an agreement with Ottawa would be that Newfoundland's ownership of the resource be recognized explicitly. Not only must Newfoundland's ownership of the resource be recognized explicitly, but it must be entrenched in the Constitution, never to be challenged again. That was the position taken by the Premier at that time. What did he receive in this document that he subsequently signed? The document recognizes that the offshore belongs to all the people of Canada, not to Newfoundland. That had been condition number one.
The Premier's condition number two, logical man that he is, was that if Newfoundlanders own the offshore, 100 per cent of the revenues that flow from it should go to Newfoundland. That was a logical step for the Premier to take having declared ownership of the resource. What did he get in this agreement that he signed with the current Government? Did he get 100 per cent of revenues? He was promised 50 per cent of the revenues from the back-in provision but the back-in provision on Canada lands has since been cancelled. He got 50 per cent of nothing. On the revenue-sharing agreement, we still do not know what the revenues will be, or if there are to be any at all given the current state of the offshore. That was condition number two.
The third thing the Premier said was that the offshore is very important to Newfoundland. He went on to say that Newfoundland was terrified of the fantastic and incredible impact of rapid development, that it could not handle the billions of dollars that would flood the province, and that it could not handle the number of jobs that would be created. He said that Newfoundland wanted to control the pace of development in that province, and that he did not want the economy to heat up too quickly. He felt that with 29 per cent unemployment, Newfoundland did not want too much development at too fast a pace. Therefore Newfoundland would insist that it control the pace of development.
What did Newfoundland receive from this agreement, from Premier Peckford and his buddy of the same blue stripe? It was a blue day when the agreement was signed. Newfoundland did not get control over the pace of development. It got Clause 35(2) which guarantees that Ottawa or the Minister of Energy shall control the pace of development. The Minister of Energy, Mines and Resources (Miss Carney) will determine whether Canada's security of supply has been met for a period of five years. That is contained in Bill C-94.
What else did the Premier of Newfoundland demand as part of the agreement with the previous Liberal Government? He demanded that Hibernia crude oil be used in processing facilities in Newfoundland, and that the raw resource should
May 26, 1986

be used to create a petrochemical industry in that province. He said that it must be part of the agreement. However, what did he sign with the Government of today? He signed Clause 41 which includes a guarantee of supply for a plant called Come-By-Chance that has been closed for the last 10 years. How valuable an asset is the Come-By-Chance plant to which the Government of Canada was to supply Hibernia crude? It was so valuable that the President of Petro-Canada said that he would sell it for a dollar if he could find a buyer! We know that the plant will not use Hibernia crude.
What did the agreement indicate about the possibility of developing new or additional facilities to become involved in the petrochemical industry some time down the road, perhaps in five years or twenty-five years? It indicates that it could only happen when the existing capacity and needs of all other plants in Atlantic Canada have been met. There is no security of supply for Newfoundland in Bill C-94.
I agree and have always agreed with the principle that offshore resources belong to the entire country. That was the Liberal position. Because of where the resource is located, the benefits from offshore should first flow to Newfoundland and Newfoundlanders. That was also our position. The resource should be jointly managed and controlled for the benefit of the country and the benefit of the province. That was our position as well.


Mr. Gurbin:: Why didn't you bring in a deal?


Brian Vincent Tobin: Because Mr. Peckford was incapable of signing a reasonable deal. When he was in political trouble he got himself into a position where he had to tell Newfoundlanders, "Let us re-elect Brian Peckford because Brian Peckford can sign a deal with Brian Mulroney". The Prime Minister (Mr. Mulroney) made sure that he put a deal to Mr. Peckford a month before the provincial election. Mr. Peckford, knowing that he dare not go into a provincial election without some kind of agreement, took anything he could get, and what he got was absolutely nothing.
How do we examine Bill C-94? Do we examine it in relation to the current oil patch? Do we examine it in terms of the reality that the projected investment in the oil patch for this year has dropped from $11.2 billion down to $6 billion, or nearly a 50 per cent reduction? Do we examine it in face of the fact that job projections now indicate that 4,000 jobs will be lost in that industry in 1986? Do we examine it in face of the fact that where we once had 14 rigs operating on the East Coast in the offshore, we now have only six? Do we examine it in the context of the industry five months or six months ago when the world price of oil was double what it is now? If we examine Bill C-94 in the face of current reality versus the euphoric mood in which it was written, we discover that it is no longer relevant. Bill C-94 is irrelevant.
A few days ago in the House we dealt with second reading stage of Bill C-92, an Act to set up a tax credit scheme for exploration off the East Coast of Canada in the offshore. It replaced PIP, under which Canadian companies operating in
Atlantic Accord
the offshore received more than $40 million worth of assistance for every $50 million worth of high risk frontier exploration. What has replaced that program? It has been replaced by a new tax credit scheme. In place of $40 million worth of tax credit for $50 million worth of expenditure, $4.5 million will be given. That is a loss of some $35 million on a $50 million per unit exploration program.
In its haste to respond to American demands that Canada's oil patch be passed back to the corporate boardrooms of the United States, the Government of Canada gutted the National Energy Program. It did not review, retool, or fine tune it to make it more relevant to changing conditions. Instead it gutted the program. It got rid of the Canadian ownership aspect of the program, the incentives to ensure exploration in the High Arctic, in the Beaufort Sea, off Sable Island, Nova Scotia, off Labrador, at Ben Nevis, and in Hibernia. That is what the Government did. It removed Canadian oil companies which were becoming a window on an industry vital to the country, an industry that provides the fuel which drives the engine of our economy. It removed those Canadian interests and put corporate planning and policy-making back into the hands of those people who sit in boardrooms in glass and steel towers outside Canada.
What do those people who sit in boardrooms in glass towers outside the country say about the Hibernia development, the tar sands in Alberta, the Beaufort Sea, or the area of nonconventional oil exploration? They are saying, "there is not a quick buck to be made and we are out of it". What are they saying about Canadian security of supply, having resources at our disposal to ensure that never again are we victims held hostage by OPEC? They are saying, "there is not a quick buck to be made and we are out of it".
What about Canadian citizens owning a piece of a Canadian resource and Canadian content in the oil and gas industry? Those same people are saying that the companies are now going into bankruptcy because of the policies of the Government of Canada, that they are in big trouble with their banks, and that they can buy them cheap. That is the kind of shortsighted, doctrinaire, market-place philosophy which the Government has followed.
No one is rejoicing the passage of the Atlantic Accord in Newfoundland today. I call it the "Atlantic squeeze". The Premier of Newfoundland will not even bring in the parallel legislation which is to be passed in the Newfoundland Legislature. He had two days or three days of debate on it, and he got such heat in the legislature and such negative press that he pulled it back out again. The great Atlantic Accord is being treated like a pea in a series of cups. No one knows when the correct cup will come up and the Atlantic Accord will reappear in all its finery.
The people of Newfoundland are feeling a sense of lost opportunity about the Newfoundland offshore. They are almost feeling the sense of a death in the family. However, no one has yet declared that the patient has died and that the funeral date has been set. Because of the narrow, parochial,

May 26, 1986
Atlantic Accord
political position of the Premier of Newfoundland, who wasted an opportunity to move forward with development, Hibernia is not going today. In 1986 we live in a dramatically different world from the world in which we lived twenty weeks ago, two years ago, or five years ago. We now have a world price for oil, in the current fiscal regime set up by the Conservative Government, where Hibernia is not going. We are faced with losing a tremendous number of skilled people, individuals who have been drawn from all across the country, many from my own province, highly skilled, highly trained in the oil and gas industry. We are faced with losing those people across the face of the earth. That pool of talent is being dissipated because the Government has decided that it is the corporate boardrooms south of the border rather than the needs of Canadians that will determine energy policy in Canada.
We in Newfoundland who had but a thread of a dream, who had but a thread of the possibility that revenues from oil and gas could do for our province, perhaps empathize more than anybody else with what is happening in Alberta. That is a province that was using oil and gas revenue to build on other sectors in Alberta, using non-renewable resource revenues to build on traditional revenues for traditional resources, but is now facing an economy in shambles, and is confronted with a Government that says, "I am sorry, the philosophy of the day says that the market shall dictate whether or not you work, my friend. The philosophy of the day says OPEC's manipulations shall decide whether you pay the mortgage, my friend. The philosophy of the day says your future and Canada's oil and gas industry shall have its agenda decided south of the border or in the Middle East". That is the context in which we in Newfoundland receive this flawed Bill. We are not applauding.
The Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid) would be very interested to know that there is a gentleman in Newfoundland, a university professor, Dr. Doug House, who wrote a book entitled "The Challenge of Oil". This gentleman is held in such high regard in Newfoundland circles, in particular by Premier Peckford and his Cabinet that they named this gentleman Chairman of the Royal Commission on Employment and Unemployment in Newfoundland. He has been travelling the province for the last year talking to Newfoundland business, labour and citizens about the problems of chronically high unemployment. This gentleman has the Premier's confidence suffice it to say.
Dr. House, who obviously enjoys the confidence of the Government, and we presume he has some confidence in the people he is now serving, has identified a number of major flaws with Bill C-94 and the Atlantic Accord. He points out the absence of any participation by Governments in the sharing of revenues. Section 40 of the accord refers to the Crown share which would be shared equitably with Newfoundland. Of course, the Minister of Energy, Mines and Resources and her Parliamentary Secretary have subsequently eliminated
the Crown share. Newfoundland's share in Dr. House's terms ends up being "Fifty per cent of nothing."
Dr. House points out the absence of adequate provisions for a downstream processing industries, refining and petrochemicals. Under Clause 41 of the proposed legislation Newfoundland's ability to get access to crude from Hibernia is extremely questionable in the very best of circumstances.
Dr. House points out that the commitment by companies operating offshore Newfoundland, if and when that ever happens, to conduct research and development, education and training in Newfoundland is weak. In his view, the province and the federal Government, in particular the Newfoundland Government should have sought more control over this vital area because of its tremendous potential for jobs downstream.
Those are not my words, Mr. Speaker. Those are not the partisan words of one who wants to find fault for the sake of finding fault. Those are the words of the Chairman of the Royal Commission on Employment and Unemployment in Newfoundland, a gentleman who I believe has been given a formidable task, one that requires a rare amount of courage and who enjoys the confidence of the Premier who did not negotiate but was forced to sign this deal, a Premier who was told: "take it or leave it".


John Horton McDermid: You don't force Brian Peckford to do anything.


Brian Vincent Tobin: I will make a prediction. The same Premier who was brow beaten into taking this deal because it was the only one available just before an election when he needed something positive to announce is the same man who is saying today in Newfoundland that the Newfoundland railway shall not close. Mark my words, Mr. Speaker, before the conclusion of this session of this House at the end of June the Government of Canada will be announcing with the agreement of the Premier of Newfoundland the closure of the Newfoundland railway. It is the same Premier who said that factory freezer trawlers are a blight on the fishery of Atlantic Canada, who lamented the subsequent decision to allow factory freezer trawlers which destroyed the inshore fishery in Atlantic Canada.
I ask one thing in conclusion, Mr. Speaker. I recognize that despite the flawed nature of this Bill the Government will use its majority here and the Government will use its majority in Newfoundland to pass it. I simply beg, "Do not entrench in the Constitution this flawed, flawed and short-sighted document".


Donald Alex Blenkarn: Mr. Speaker, does the Liberal Party believe that the Atlantic Accord should not haved passed? Is it the policy of the Liberal Party that we should go back to the situation where the Government of Canada, in the court decisions, had complete control of the offshore resource and whatever Newfoundland got was by grace of the Government of Canada and had no rights in that offshore? Is it the Member's view that the Liberal Party would like us to go back to the position prior to the Atlantic Accord?
May 26, 1986


Brian Vincent Tobin: I am delighted the Hon. Member has asked the question, Mr. Speaker. It is obvious that he has not read the Bill. I would like to help him be more conversant. First, a brief history lesson for the Hon. Member. It was not the Government of Canada that initiated court action on ownership of the Newfoundland offshore. It was the Government of Newfoundland which began by referring the matter to the Supreme Court in Newfoundland asking, in the Premier's words, "Our court"-as if a court were political-to rule on "our ownership" of the offshore. "Our court" much to the chagrin of the Premier said no. "Our court" said Ottawa owns, the people of Canada own the offshore.
The second history lesson for the Hon. Member is that since we did not initiate the court action, the Liberal Government never took as a policy the notion that total control and ownership belonged to Ottawa and Ottawa only. We were attempting to negotiate a joint agreement. What we have ended up with is a Bill that gives ownership to Ottawa which the Hon. Member somehow suggests is terrible, and to the people of Canada, a Bill which gives Newfoundland as yet an unknown share of the revenues.
I would simply tell the Hon. Member that I find his sentiments, providing they were properly placed and supported by historical fact, interesting. I find them somewhat supportive but history will not bear out the scenario the Member has supplied. I hope I have been of some value to the Member in making him a better Member of Parliament, in giving him more understanding of that great Province of Newfoundland and in giving him more understanding of the contribution of the last Liberal Government.


Donald Alex Blenkarn: We had the contribution of the last Liberal Government, Mr. Speaker, and we continue to get the contributions of this Member who continues to twist and turn and twist and turn. He is the greatest twister and turner in this House.


An Hon. Member:: No, but he is close.


Donald Alex Blenkarn: It is clear that the Member does not understand his own history or at least he changes his own history to suit his own facts as he needs his facts changed. The fact is the Government that he supported fought hammer and tongs to make sure that Newfoundland lost that court case in the Supreme Court of Canada. The Government could have walked away from the court case and given the rights to Newfoundland but the Government didn't. We had to have an Atlantic Accord. We had to make a deal to give Newfoundland the rights it should have. After the court case, we could not, without a constitutional amendment, change the terms, so we had to give Newfoundland all the rights and privileges which the resources in that 200 mile limit have. Does the Member and his Party want to take that away from Newfoundland? Is the Member going to vote against the Bill? Is he going to say: Newfoundland, you cannot have it; that belongs to the people of Canada and you shall not own it, you shall not
Atlantic Accord
enjoy it? Is that the way he wants to represent his province? Strange, Sir. Strange.


Brian Vincent Tobin: Mr. Speaker, when I was a young boy my mother always told me that if you are going to get in these little spats out in the school yard be sure it is an even match. I feel somewhat guilty doing battle with an unarmed man.


John Kenneth Gormley: So speaks the intellectual giant of the House of Commons.


Brian Vincent Tobin: Not an intellectual giant but one who is concerned about the issues affecting his province, and one who makes sure he does his homework before he rises to spew forth, like an unguided missle, all kinds of irrelevant comments.
The Hon. Member says we could have walked away from the court case. Why did we not give it to Newfoundland? He says that in the face of a Bill from his Government which entrenches ownership of the offshore not for Newfoundland but for the Government of Canada. Can you imagine?


Mr. Robichaud:: Incredible.


Brian Vincent Tobin: Incredible. You should have walked away, you nasty Liberals. Meanwhile we are debating a Bill which gives ownership not to Newfoundland but to the Government of Canada. I think that is right. I think most Newfoundlanders think that is right because they are Canadians and damned proud of it.
Let me deal with another of the foolish statements the Hon. Member made. He asked if I was going to vote against this Bill and, in doing so, take away Newfoundland's ownership of the offshore and the revenues that flow from it. The fact of the matter is that in voting for this Bill I would be voting for taking away the ownership of the offshore from Newfoundland, because in this Bill ownership is federal. In voting for this Bill I would be voting not to give Newfoundland all the revenue, because in this Bill all the revenues do not belong to Newfoundland. The majority of them are probably going to Ottawa.


John Horton McDermid: How do you figure that?


Brian Vincent Tobin: I say to the Hon. Member quite honestly that I suspect that somewhere between that confused tangle web of facts that he weaves there are some good intentions. Good luck next time out.


Mr. O'Neil:: Mr. Speaker, the issue of which the Hon. Member speaks is of course the same issue which has dominated Nova Scotia's resource development since the early 1960s. It was Robert Stanfield who raised this issue as a Premier at a constitutional conference in 1963. Successive Liberal Governments rejected the policy of the Conservative Party which was to give control of offshore resources to the coastal provinces. That was not a simple symbolic gesture by this Party. It was recognition that control of offshore resources represented an

May 26, 1986
Atlantic Accord
opportunity for the coastal provinces to take their economic place in this country. Successive Liberal Members of Parliament from Nova Scotia and Newfoundland stood idly by or sat silently in their seats in the House of Commons while successive Liberal Prime Ministers said, no, you shall remain on the welfare rolls. At the same time that gas was and is being taken from Lake Erie and other international waterways, we in Nova Scotia and Newfoundland are told, no, you are not good enough to get the same rates.
Will the Hon. Member dispute the fact that the question of offshore jurisdiction was put at issue by the federal Government in a labour arbitration case and it was subsequently decided by the Supreme Court of Canada as a constitutional decision and not subject to change by the House of Commons?


Brian Vincent Tobin: Mr. Speaker, I find it absolutely amazing that a Member from Nova Scotia would enter this fray. Again we have a gentleman who, without understanding the risk at which he puts himself, stands and talks about how successive Liberal Governments were so nasty to the provinces. He conveniently forgets that the Premier of Nova Scotia, Mr. Buchanan, signed an offshore oil and gas development agreement with the Prime Minister of Canada, Pierre Elliott Trudeau. The last time I looked he was a Liberal. How can the Hon. Member stand up and talk about successive Liberal Governments being impossible, and then in the same breath acknowledge that the former, current, but perhaps not future, Premier of his province signed a deal with a Liberal Government? That is beyond comprehension.
Let me ask the Hon. Member a question. I heard the Hon. Member for Bonavista-Trinity-Conception (Mr. Johnson) saying that we in Newfoundland held out, fought hard and got Bill C-94 as a reward. We did not sell out like Nova Scotia. Does the Hon. Member agree with his Conservative colleague that the Premier of Nova Scotia sold out Nova Scotians when he signed the deal with the big bad, nasty and mean Liberal Government?


John Horton McDermid: Yes. If you look at the deal, you would think so.


Lawrence I. O'Neil: I was hoping the Hon. Member would ask that question. It is obvious his research is incomplete. The offshore agreement with Nova Scotia provides that if a so-called better agreement is reached with another province, then the Premier of Nova Scotia and his Conservative Government, which will continue in office for some time, shall have the option to assume that better agreement. We have the best of both worlds. We have had development and now we are going to get any better deal on the table.


Mr. Deputy Speaker:: Resuming debate.


John R. Rodriguez: Mr. Speaker, I wanted to say a few words about the Atlantic Accord. There is no doubt that we recall very vividly the relationship which developed between the provinces and the federal Government,
specifically between the leadership of Pierre Elliott Trudeau and the provinces. There is no doubt in anyone's mind that the relationships were extremely exacerbated. There was no feeling of co-operative federalism. There was no sense of working together. There was no recognition by that Liberal Government of the rights of the provinces with respect to their resources. We all remember the acrimonious debate between the Atlantic provinces and the federal Government over the offshore petroleum resources. The analogy was drawn that western Canada had complete control over the resources under the ground. Yet Atlantic Canada was not treated in the same way concerning those provinces' offshore resources.
There was a great deal of hope in Atlantic Canada, particularly in Newfoundland, and we in the NDP all jumped for joy when oil and gas was discovered off the coast of Newfoundland. We all hailed that as the avenue for Newfoundland to become self-supporting. As a matter of fact, we were reminded that in the not so distant past Alberta lived on the dispensation of the federal Government. It depended almost entirely on transfer payments. That is the same situation Newfoundland finds itself in today. As I said, we were all very optimistic about those resources because they seemed to be the key to Newfoundland becoming self-sustaining and independent of the federal hand-out which we call the transfer payment. Unfortunately, the Government of Canada at that time, the Trudeau Government, got into a jurisdictional dispute with the Premier and the Government of Newfoundland.


Brian Vincent Tobin: All by himself?


John R. Rodriguez: Pardon?


Brian Vincent Tobin: Peckford was not part of the dispute?


John R. Rodriguez: The federal Government said it owned the resources and the provinces said no, they are provincial resources. That was the dispute. We in the NDP said those resources belong to the province. We recognized that in our 1979 convention when we passed a federal resolution which became the policy of the NDP. We recognized that the provinces should have offshore jurisdiction. There was no hesitation to support the Clark Government and the Mulroney Government in recognizing that those resources belong to Newfoundland.
We agree with the general principle of this Bill. It recognizes the need for genuine provincial involvement in the exploitation of the Newfoundland offshore. Having said that, we are now into a new ball game. We have a situation where world oil prices have plummeted. Newfoundland is incapable of proceeding with respect to developing those offshore resources. Well, the Member shakes his head. In fact, the price of petroleum has dropped. What is the incentive for any development to take place if the world price for oil is between $11 and $12 U.S. a barrel and it is going to cost you $15 to $22 to produce it?
May 26, 1986

We recognize that. We socialists have no problem recognizing that since the province is entitled to develop, the province has a right to those resources, and it is the responsibility of the central Government to help the province.
Therefore, the question has to be raised, what specifically is the federal Government doing to assist Newfoundland? Nothing. We know it is withdrawing the Petroleum Incentive Program. Nothing. The PIP program has been withdrawn in the previous Bill. Nothing is being done now.
The Atlantic Accord becomes an empty shell. It is as hollow as bamboo. It has all of these sub-titles which have no meaning at all: "Joint Management", sub-heading, "Decisions In Relation To Offshore Management". It covers "Suspense Of Vetos", "Ministerial Directives", "Public Review Pricing", "Revenue Sharing". Revenue sharing-if you have not got any revenue what are you going to share? All of those impressive sub-titles in this Accord mean absolutely nothing.
The offshore activity has died over the last year. This Conservative Government has done nothing to restore that activity, nothing whatsoever. The need for some decisive action on the part of the federal Government is quite clear. What has it brought before Parliament? It has brought before Parliament an Accord that offers nothing specifically to Newfoundland, not a thing. The Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid) shakes his head. I wish that he could point out specifically in this Accord what it is that the federal Government intends to do to assist Newfoundland to develop the offshore.
The hopes were high, and there is a considerable investment already in the infrastructure surrounding the offshore resource, but unfortunately with the downturn in price nothing is happening.
Even the newspapers in Canada recognize the problem. The local paper from Newfoundland, the Halifax Chronicle-Herald, points out that last week in Newfoundland-and this was dated April 30, 1986-organizations representing 700 companies told reporters that spending on offshore exploration would plummet to $100 million in 1987. Both companies, Mobil and Chevron have already announced major cut-backs in exploration expenditures in 1986 and both carry heavy debt loads.
In light of that, what is the federal Government doing? No one could say now that there is acrimony between the leadership of the federal Government and the leadership in the provincial Government. They both belong to the same political Party.


John Horton McDermid: That has never stopped Peckford before.


John R. Rodriguez: The Conservative Member for Brampton- Georgetown (Mr. McDermid) casts aspersions on his colleague, the Premier of Newfoundland. He said, "That has never stopped Peckford before". Well, it takes a Tory to know a Tory.
Atlantic Accord


John Horton McDermid: Be honest, John.


John R. Rodriguez: That is what you said.


John Horton McDermid: I didn't cast aspersions on him at all, I was praising him.


John R. Rodriguez: That is fake praise.


John Horton McDermid: He stands up for what he believes.


John R. Rodriguez: One would think that the Hon. Member and the Government opposite, sharing as they do the same philosophical bent as Mr. Peckford, the Premier of Newfoundland, would be more sensitive to the problems which Newfoundland faces.


John Horton McDermid: Do you agree with everything Ian Deans
says?


John R. Rodriguez: Mr. Peckford is not facing a Pierre Elliot Trudeau; he is facing a lot of his own stripe. He is facing a Conservative Prime Minister. What is it that this Government is doing for the people of Newfoundland with respect to their offshore resources? What are you doing for them? Why are you sitting back and allowing this potential to go down the tubes?


John Horton McDermid: We are not.


John R. Rodriguez: Well, you are. I welcome you to get up and state categorically what it is that the federal Government is prepared to do with respect to assisting in the development of the Newfoundland offshore. All the indicators are that the Newfoundland offshore is going downhill rapidly. When we socialists said that there was no free market and that in fact one had to establish a procedure whereby the producers and those who work in the industry would have assurance of the price of oil and gas, the Government said, "Oh, no, you have to go to the market-place". The Government scrapped the National Energy Program and went with the Western Accord, which puts oil prices on world prices.
What has happened since then? The world price is gone, but not because of any kind of market activities or market factors. It all has to do with the machinations of the market. It is the big producers, Saudi Arabia, and whoever else, manipulating the market. It has nothing to do with the true market forces as the Tories would like to think. It is a political question. It is one or two world oil producing nations trying to gain dominance in the market. That is the way they want to go. Saudi Arabia is attempting, once again, to establish its control over energy pricing in the world. That is the reality. Why should Canadians suffer as a result of actions taken by countries that are trying to establish a monopoly? We in the New Democratic Party answered that question long ago when we recognized that there is no free market or regulated market. Let us stop playing those games and ensure that Canadians are not exposed to that kind of whim and fancy in the yo-yo effect of the so-called free market.
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May 26, 1986
Atlantic Accord


Cyril Keeper: It is a cartel.


John R. Rodriguez: There is no doubt about it. We chose not to belong to that cartel, so we have a responsibility to ensure that those workers in the industry and those producers in the industry have guarantees for continuing to exploit that resource and maintain economic activity.
This is extremely important in the case of Newfoundland. The oil industry offshore Newfoundland was to be its hope and dream. How can we forget Premier Peckford's impassioned pleas at those First Ministers Conferences dealing with the Constitution when he stated that this was the great opportunity for Newfoundland finally to exercise ownership and control over the offshore. It was an opportunity for Newfoundlanders to get out from under the welfare blanket of the federal Government.


Cyril Keeper: It's a pig in a poke.


John R. Rodriguez: As the Hon. Member says, it turned out to be a pig in a poke. The Atlantic Accord does not speak to the specific problem which the petroleum industry is experiencing now.
The federal Government has a responsibility to the people of Newfoundland to ensure the continuation of incentive programs for the exploration and development of resources offshore Newfoundland and Labrador. This exploration and development must take place regardless of the sheikhs and others who are attempting to muscle each other out of the oil industry. Canadians must have priority, and the Government has a responsibility to support the exploitation of those resources off Newfoundland, regardless of the artificially low world oil price.
Of course, there are Conservative Members who represent Newfoundland ridings. For example, the Minister of Justice (Mr. Crosbie) certainly has a loud voice, but I do not hear it being raised on behalf of Newfoundland. He seemed to be able to have Air Canada move its central operations from Gander to St. John's, but we do not hear him when it comes to a tough question like this. The Government will say that it does not have enough money to support programs for the exploitation of these resources on the East Coast and off Newfoundland. However, where does it find the billion dollars to bail out the banks? Where did "squander woman" find the $1 billion? The Government found that billion dollars but it cannot find the money for these projects.


Mr. Thacker:: What bank was bailed out?


John R. Rodriguez: You bailed out the depositors with $1 billion.


Blaine Allen Thacker: That is different.


John Horton McDermid: Do not forget that the unions got their share.


John R. Rodriguez: Why can you not find the money to bail out the petroleum industry in Newfoundland?


John Horton McDermid: Listen to the NDP talk about bailing out the energy industry.


John R. Rodriguez: It would be bailing out the people in Newfoundland, I remind the Parliamentary Secretary. It is obvious that the Government does not care what happens to the quality of life in Newfoundland.


John Horton McDermid: Newfoundlanders do not believe that.


John R. Rodriguez: You want to continue to hand out the welfare cheques because that is what the Tories believe in.


John Horton McDermid: That is what the NDP wants. That is socialism.


John R. Rodriguez: In spite of all their yelping and yowling, the Tories really believe in continuing the master-slave relationship between the central Government and Newfoundland.


John Horton McDermid: That is the whole NDP philosophy.


John R. Rodriguez: In spite of all its rhetoric, the Government is not realy interested-


John Horton McDermid: Nonsense.


John R. Rodriguez: I suggest that the Parliamentary Secretary go to Newfoundland and tell Newfoundlanders what the Government is offering them. All it is offering is this hollow document. Once the supply lines have been closed and the drilling rigs have been removed, what will the cost be to start it up again in a year?
It seems to me that the Government does not even apply some good old common sense to what is happening. I say that the Conservative Party does not give a hoot about the people of Newfoundland and their future.


John Horton McDermid: Mr. Speaker, I always enjoy listening to my hon. friend, the Hon. Member for Nickel Belt (Mr. Rodriguez). Apart from the fact that he is full of bull and bad manners, his speeches are always colourful.
The New Democratic Party holds itself out as very forwardlooking and one that can supposely anticipate what will happen.
The Hon. Member talked about the price of oil today when we know full well that Hibernia, which is very important to the people of Newfoundland and the rest of Canada for security of supply, will not come on stream until the late 1980s and early 1990s. Anyone will say that oil prices will be higher at that time. This field will carry on well into the 21st century when, of course, conventional oil supplies will become more scarce and the prices will inevitably rise.
Why is the Hon. Member being so negative about Hiberia and its development by saying that nothing is happening when
May 26, 1986

he knows full well that much is taking place, not only between the two Governments but between the parties who will be developing that particular field?


John R. Rodriguez: Mr. Speaker, on the contrary, we on this side of the House are being positive. We are saying that the Government is negative. It is not providing the money to support its provisions in the Accord. It has consistently eliminated incentive grants and cut back on financial support for the exploitation and development of those resources offshore.
The Government is negative. It is telling the people of Newfoundland that they can postpone their hope for improving their quality of life and standard of living and can continue to live off the federal Government's dole until the 21st century. We are saying that the Government must continue to support the activity at Hibernia and the offshore in general because it is essential, not only to the dreams of the people of Newfoundland but to their pocket-books as well. We in this country have always made that kind of investment in the future. When the railroad was built there was a considerable amount of investment. Millions of acres of land were given to the CPR. It was Sir John A. Macdonald's dream. Do we have to tell the Tories about their own history? That was an investment made with a considerable amount of Government and public support in terms of money and land.
We are talking about the same kind of dream. This is part of that national dream. I think the national dream today is that every provincial Govenment carries itself and holds its head high in terms of its relations with the rest of the country. That is the dream and it is a positive dream.


Brian Vincent Tobin: Mr. Speaker, I have a brief comment to make and a question to ask of the Hon. Member for Nickel Belt (Mr. Rodriguez). First, I listened to the Parliamentary Secretary say that those people in Newfoundland should not be too pessimistic, that one of these days, in 10, 15, 25, or 35 years, the price will be right and those good people in Newfoundland who are standing on the beach looking at the seagulls flying around where the oil rigs used to be will be able to work once again, and if it is not they and their children, perhaps it will be their grandchildren.


John Horton McDermid: The people in Newfoundland must love to hear you talk about them in that way.


Brian Vincent Tobin: I find that sort of nonchalant view, that sort of laissez faire attitude, let the people stay where they are for the moment view, is about as ridiculous as my suggesting that the Newfoundland taxpayers should give up supporting the operation at Mirabel airport until it becomes profitable. I do not hear Hon. Members opposite proposing that it be shut down. I find their view as narrow and as un-Canadian as suggesting that the people growing wheat out west for which there is currently not a good price and market, should hang up
Atlantic Accord
their hoes until the price comes back. I would never suggest that, neither would anyone in Newfoundland. I find it as ridiculous and narrow as anyone telling the dairy farmers in Ontario, who receive $2 million or $3 million in subsidies a year, to quit milking their cows, to store the milk in the udder until such time as milk prices increase. I would never suggest that because we understand that all three of those activities are essential ingredients in what makes this country what it is. That is the mosaic of Canada.


John Horton McDermid: I rise on a point of order, Mr. Speaker. I did not say we should not develop Hibernia. I said we should continue. I said it would not come on stream until 1990 or 1991. That is the difference. The Hon. Member is misleading the House.


Mr. Deputy Speaker:: The Hon. Member may complete his question or comment.


Brian Vincent Tobin: Thank you, Mr. Speaker. As I said, being from Newfoundland with our high rate of unemployment and our desire to be part of this great country called Canada, we appreciate the mosaic which makes Canada what it is. We appreciate the wheat farmer in the Prairies and we want to support him now when he needs help. We support the dairy farmer in Ontario now when he needs help. We support the industrial products industry in Quebec, some of which has not yet reached its full potential, and we stand behind them now when they need help. We want to make our contribution to Canada and we expect the Government of Canada to stand behind us now when we need help.
Does the Hon. Member for Nickel Belt think that there is any industry, particularly those interest groups I have named, which would stand for that kind of logic or rationale coming from the Government? Does he honestly believe there would be anything on the front lawns of Parliament but a pile of rubble if that kind of philosophy were imposed on the wheat farmers or the people who work at Mirabel airport?


John R. Rodriguez: Mr. Speaker, I think the Hon. Member has hit it right on the head in relation to the Mirabel example. The Parliamentary Secretary said he did not say we should not develop Hibernia but we will not let it come on stream until the 21st century.


John Horton McDermid: I did not say that.


John R. Rodriguez: There are myriads of examples. That is what Canada is all about. The examples used by the Hon. Member are very appropriate. We in various parts of the country support the endeavours of Canadians whether they live out west, in British Columbia, or in Ontario. We may very well have to support the shakes and shingles industry. I said in the debate on Alberta oil that we were supporting a floor price for oil. We would want to do that. I do not think we should say: "Oh, well, the price is not right", because when will the price be right? It might be in 15 years' time, but by then the industry will be exposed to another round of monopoly pricing

May 26, 1986
Duties Relief Act
by the world producers of oil. Brazil is coming on, and so is the offshore in Peru. So what do we do when the price starts to fall again? Do we say: "Remember the 15 years we told you about in 1986? Well, you have to wait another 15 years"? We do not have the time in Atlantic Canada. Time is fast running out. If the concept of Canada works, it works because the people of Canada work.


Mr. Deputy Speaker:: Resuming debate.


Some Hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: On division.


Mr. Deputy Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to a legislative committee.

Hon. Barbara McDougall (Minister of State (Finance)) moved: that Bill C-98, an Act to consolidate various enactments that provide for drawbacks, reductions, refunds and remissions of duties, other than export drawbacks for which provision is made in Sections 82 to 87 of the Customs Act, to amend the customs tariff and to repeal or revoke the enactments so consolidated, be read the second time and referred to a legislative committee.
She said: Mr. Speaker, first, I should apologize to the House for the length of the title of this Bill and its cumbersome and undescriptive nature. However, it is a very important Bill and I am very pleased to introduce it in the House today. This legislation, to be known as the Duties Relief Act, provides for reductions or removal of duties and excise taxes under certain conditions. The Bill is based on a Ways and Means motion tabled as part of the Budget of May 23, 1985.
Before proceeding to outline the provisions of the Bill, it might be helpful if I indicated the context in which these measures have been developed over some considerable time.

The imposing of customs duties on goods imported into Canada is an important tool of our trade policy. One of the objectives of the customs tariff has always been to promote investment, production and thus employment in Canada. The Tariff gives Canadian manufacturers the benefit of a cost advantage, which helps them compete with goods that are similar to or substitutes for the products they manufacture.
There are cases, however, when it may be inappropriate for Canadian manufacturers to pay duty on their imports. In recent years, after consultations with Canadian industry, a number of programs were set up when it was found desirable to grant a remission of duty to certain manufacturers, subject to certain conditions.
The proposed legislation will bring together, in one statute, sections from other Acts as well as various regulations, all of which provide for duty relief programs of considerable benefit to Canadians in manufacturing and other industries. Although the individual measures have been in force for some years, this is the first time they have been incorporated into a single piece of legislation.
To be able to make effective use of these measures, which until now appeared in a variety of legislative instruments, required considerable time and effort by companies to ferret out just what the provisions were and to determine whether they were applicable to their particular circumstances. While the experts knew where to look, business people without this expertise were at a distinct disadvantage. Similarly, those seeking to package the federal Government's programs found the current system difficult to utilize.

This initiative is in line with the Government's commitment to make its services easier to understand and use. The proposed legislation will be easier to administer and will help Canadian companies use the provisions respecting custom duty and excise tax to better advantage. In this respect, it should be well received by local and provincial Governments, especially British Columbia which has asked for these customs procedures to be adopted so that it can attract new investment.

I would now like to turn for a few moments to the clauses of the Bill itself which take account of differing circumstances. Clause 4 provides authority for the Governor in Council on the recommendation of the Minister of Finance (Mr. Wilson) to reduce or remove duties on materials, at the time of their importation, to be used in Canadian manufactures. This authority has been used on many occasions to allow manufacturers to import materials not available from Canadian sources at reduced rates of duty in order to better meet import competition.
Under Clauses 5 to 8, duty is refunded only after the imported goods have been used for the purposes specified.
Clauses 9 to 15 provide for the inclusion of the machinery program in the Bill without any change in the scope of the program. However, there will be a streamlining of procedures which will implement a recommendation of the ministerial Task Force on Program Review tabled with the May, 1985 Budget to reduce the paper-burden and delays.
May 26, 1986

The machinery program, which has been in effect since January, 1968, serves the needs of users and manufacturers of machinery. It provides for the remission of duty on machinery which falls under the program and which is not available from Canadian production. It also ensures that Canadian manufacturers receive the protection provided by the statutory rates in the customs tariff as soon as they can demonstrate a capability to produce the relevant machinery. The criteria for determining availability are set out in the Bill.
Under the current procedure, duties are remitted by Order in Council on a weekly basis. Under the procedure proposed in the Bill, the Minister of National Revenue would publish a list of "not available" and "available" machinery. Such a list will significantly reduce the present requirement for the processing of thousands of applications under the program. Relief will be granted immediately on goods at the time of their importation simply by reference to the "not available" list. Consequently, it will not be necessary, other than in exceptional circumstances, to submit and process specific applications. As a result there will be fewer cases of companies paying duty and then claiming a refund.
Clauses 16 to 19 of the Bill allow processors to obtain relief from duties on goods which are brought into Canada for processing and then exported, if certain conditions are complied with. This means that Canadian firms do not have to tie up large sums of money in duty for long periods of time, which, of course, adds to their costs and makes their products less competitive abroad.
Clauses 24 to 28 permit Canadian firms to send goods outside Canada for repair, to have equipment added or to be further processed and to pay duty only on the value of the work done abroad. One of the conditions to be met is that this work could not have been done in Canada.
The other specific provision I would like to mention at this time is one which corresponds to a section of the Financial Administration Act. Under Section 17 of that Act, the Governor in Council may remit any tax, fee or penalty. In addition to some of the programs I have mentioned earlier, this authority has been used to help such industries as manufacturers of construction equipment and of semi-conductors. It is proposed that there be a separate authority-Clause 37-to deal specifically with the remission of duties and excise taxes.
In summary, I think Hon. Members will appreciate that the new legislation will be beneficial to Canadians and Canadian companies. It will be less difficult to administer and it should encourage Canadian companies to take full advantage of the duty and excise tax provisions which are there for their benefit. It will also be of considerable use to all levels of Government and, I think, to the private sector, as we approach people who want to invest in Canada in order to make this a favourable country in which to invest.
Finally, what I am proposing today is very much in keeping with our philosophy and the commitment of the Government to make our services to business and to the public easier to use,
Duties Relief Act
easier to understand and more beneficial in terms of the operation of the country.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand)-Official	Languages-Supreme	Court
decisions-Request for introduction of constitutional amendment. (b) Federal-provincial conference agenda; the Hon. Member for Western Arctic (Mr. Nickerson)-Energy-Exco Energy Corporation- Plight of creditors; the Hon. Member for Thunder Bay-Nipigon (Mr. Epp)-Shipbuilding- Moratorium requested on importation of vessels constructed abroad, (b) Request that Government announce policy.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall: That Bill C-98, an Act to consolidate various enactments that provide for drawbacks, reductions, refunds and remissions of duties, other than export drawbacks for which provision is made in Sections 82 to 87 of the Customs Act, to amend the customs tariff and to repeal or revoke the enactments so consolidated, be read the second time and referred to a legislative committee.
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, on behalf of my Party, the Liberal Party, I should like to comment briefly on Bill C-98 to consolidate the various customs duties regulations. Mr. Speaker, may I say at the outset that we are in favour of the principle of this Bill. The Government has been at it since last year, but all it is doing is continuing the work which was initiated when the Liberal Party was in office, namely consolidating and simplifying this old procedure. We agree with the principle of the Bill, and since it is highly technical we hope that the committee study will enable us to make various recommendations pertaining to a number of statutes so that the law will be more easily enforceable by the Government, and more readily understandable to professionals and businessmen.
Mr. Speaker, we agree and will debate the matter in committee, but before resuming my seat I should like to emphasize that the principle of other similar Bills had been

May 26, 1986
Duties Relief Act
adopted. For instance, if my memory serves me right, I think it was Bill C-59 to amend the Customs Tariff, especially with respect to mail going through customs. Mr. Speaker, we had adopted a measure under which any letter weighing less than 30 grams could be delivered without inspection. As I recall, hardly a few weeks ago the TVA network referred to a service... Since May 20 Revenue Canada has been following a new policy in major Canadian cities so that some parcels can be delivered directly to householders and the invoice for delivery and duties is mailed later. This is a source of inconvenience concerning the speedy delivery and inspection of these parcels. The TVA channel showed us on television that there was a large backlog of parcels. Because of cuts in delivery personnel, they were passed without inspection, without considering the 30 grams the Minister and his officials, when they were here before the committee, had assured us would be respected. That it is not the case, however, because of the backlog of parcels for delivery. This is how pornography and in some cases even drugs are being distributed freely across Canada. Mr. Speaker, we all know what a situation like this can lead to.
Mr. Speaker, not long ago, we were told that at the airport in Toronto, customs officers had received instructions from their immediate supervisor not to inspect certain goods and to stamp them as having been inspected, in order to speed up the process, since the Government was still cutting staff.
Mr. Speaker, I would like to make it clear to the House today that although we agree with the principle of this Bill, we must get the message across to Canadians that we can't afford to let everything go and lose control, and that while it is a good thing to try and simplify the administration of our customs legislation, it is also very important to exercise a certain degree of control.
Before I finish, Mr. Speaker, I would like to point out that there is a provision in this legislation that the Department of National Revenue may establish a list of the machinery and equipment produced in Canada and a list of the machinery and equipment that is not. I think we should remember there are many small companies that manufacture machinery and equipment and often cannot afford to advertise. I therefore hope the Department will find a way to ensure that our small manufacturing companies will not be penalized and that every importer of machinery and equipment will have a complete list so that he can check whether certain types of equipment or machinery are already being manufactured in this country.
As I said before, Mr. Speaker, we agree with the principle of this Bill, and we intend to examine the details during debate in committee.


Mr. Simon de Jong (Regina East):: Mr. Speaker, much of this Bill is certainly not very controversial and I doubt the House will spend much time debating the measures of Bill C-
98. In essence, the Government wishes to clean up some of the various regulations that exist.
There are some things, not in terms of specifics but in terms of philosophy and motivation behind Bill C-98, with which I do have some concerns. I suspect that the Bill paves the way for free trade zones. There is much in this Bill that would address the various problems that would have to be overcome if we were to establish free trade zones in Canada.
In the past, the Province of British Columbia passed Bill 49 entitled the Special Enterprise Zones and Tax Relief Act, offering special tax status to corporations investing in such zones and surrounding communities. The foundation of much of the thinking of the Bennett Government on free enterprise zones originates with the influential Fraser Institute, the institute that has been advocating free trade zones.
In free trade zones, the normal labour and environmental legislation often does not exist. According to the people who have conceived of free trade zones, and particularly those from the Fraser Institute, a free trade zone is a little geographic space that is thrown back into the 18th or 19th century. Normal tax laws, social policies, labour legislation, environmental protection legislation and all the more modern laws no longer have effect. This allows raw capitalism to operate without any hindrance in these particular areas.
We can see by reading the various clauses in this legislation that the Bill comes very close to paving the way for free trade zones. For example, in 1983, an External Affairs paper entitled A Review of Canadian Trade Policy contained the following statement:
Canada does not have free-trade zones but it does have a number of tariff policy instruments which achieve essentially the same objectives.
The two programs referred to were the inward processing remission order, and the various temporary tariff items which provide duty-free entry for specific components required in Canadian manufacturing. Indeed, the legislation before us today puts together the various bits and pieces of rules and regulations so that they form a more orderly pattern, thus allowing for the introduction of free trade zones somewhere down the line.
We are also concerned with the general direction being taken by Customs and Excise. I know that this is not directly related to Bill C-98, but I will take this opportunity to raise this matter in the House of Commons today. We are afraid that the various measures the Government has taken in the name of saving taxpayers' money has degraded the level of service provided by Customs in Canada. For instance, no longer are Customs officers looking at individual pieces of mail and parcels that come into Canada. Rather, these parcels of imported goods are sent directly to the recipients without being inspected by Customs officers. The recipients are then required to go voluntarily to Customs to make their declarations and to pay whatever duties are necessary. This method is being undertaken on a trial basis in Montreal and the figures show that the estimated loss of revenue caused by this new practice
May 26, 1986

is far greater than the cost to the Government of employing the various Customs officers.
At the Toronto airport, management decided to allow all sorts of imported goods to be released from bonded warehouses without proper inspection and paperwork. About a month ago,
I had the opportunity to tour the Customs facility at the Toronto airport. That facility is one of the largest such facilities in Canada and certainly the Toronto airport is the busiest when it comes to receiving goods into Canada. Customs officers at that airport face very bleak working conditions. There is very little natural light. There are rows and rows of computers, a very inhuman working environment. The employees are required to process mountains of paper every day. Sometimes a computer spits out a particular invoice or entry form because it has not been filled out properly. The goods involved are in the country and are released from the bonded warehouse, but the paperwork still has to be corrected. Perhaps a wrong tariff item was used or some paperwork did not quite fit in. A few months ago a pile of paperwork had accumulated, with entry forms which were improperly filled out or whatever, and management decided to release all the goods. It decided not to figure out the individual items or the incorrect entries. It more or less decided to forgive the whole batch, and we really do not know how much it has cost Canadian taxpayers.
If one's import forms are incorrectly filled out and they end up on top of the big pile with which Customs can no longer deal, it certainly appears that Customs will look the other way. In other words, it appears that there will be one law for one individual and another law for another; it depends upon the draw, so to speak.
Certainly the cut-backs which have affected the Customs Department have resulted in there being demoralized Customs officers across the country. Canada can be proud of the job which the Customs and Excise has done. From speaking with Customs officers at various points across the country, I can tell Hon. Members that the morale is very low. They feel they do not have the ability nor the resources to enforce Canadian law.
I should like to draw the attention of Hon. Members to the fact that other serious problems exist in our Customs Inspection Branch. They have to deal with so much paper every day that very often they do not have the opportunity of properly inspecting and being on top of what is coming into the country. Certainly my office and I are looking into instances in which illegal automatic guns and weapons have been coming through Customs without proper inspection. There is no one in Customs, certainly not in the Toronto airport, who is an expert on guns and knows which guns can or cannot be allowed into the country. Most Customs officers have to deal with a mountain of paper every day. Therefore, very few of the cases of automatic and semi-automatic weapons being imported into Canada are receiving proper inspection. I draw this matter to
Duties Relief Act
the attention of the House because it is another indication of the serious problems in Customs and Excise today.
I urge the Government to take heed of my remarks this afternoon and to understand that there are some serious problems. Hopefully it will back away from its gung-ho approach to cutting back on the resources of Customs and Excise. I hope the Government gives it proper study and indeed determines the cost effectiveness of sending out parcels to individual importers without them being expected by Customs people. It should also study the loss of public revenue which this entails and compare it with what it would cost to pay the salaries of some extra Customs officers.
I ask it to take heed of the situation at Toronto airport where the staff has not been increased over the last number of years. However, the traffic coming through that airport has dramatically increased, so we find individual Customs officers are totally overworked and do not have the expertise they require to deal with items such as automatic weapons and other weapons which could prove to be illegal. As I said, I hope the Government heeds my warning this afternoon and takes a closer look at what it is doing to our Customs officers, those men and women who are required to uphold Canadian laws.
I have no immediate objection to Bill C-98, other than my concern that its motivation is to help set up free trade zones in the country. Certainly we in the New Democratic Party will oppose that move. We do not believe that Canada can solve its economic problems by returning to a 19th century model. Canada's economic strength and well-being lie in people being able to work and to receive decent wages from that work, so that they have the power to purchase the goods and services which they need to live good and decent lives. Certainly cheap labour in free trade zones will not help Canada in achieving its goal of economic prosperity for all.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Simon Leendert de Jong: On division.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to a legislative committee.
Charles Joseph Clark: Mr. Speaker, I rise on a point of order. It would appear that the surprising dispatch with which the House had dealt with the two Bills before it has found us in a situation where the Hon. Member for Scarborough West (Mr. Stackhouse), who was to introduce a Private Member's Bill, is not yet in the House.


Mr. Blais:: He is on his way.


Charles Joseph Clark: I think everyone in the House would recognize and underline the tremendous importance to

May 26, 1986
Interest Rates
this place of Private Members' Bills and of Members being given full opportunity to introduce those matters about which they are concerned. I understand that the Hon. Member in question is now taking the final preparatory steps to ensure that he will be able to make a very effective presentation to the House of Commons.


Don Boudria: Just what does that mean?


Charles Joseph Clark: I am sure he anticipates being in a position to have this Bill receive the same kind of speedy attention as was accorded the Government measures recently approved by Hon. Members here.


Mr. Deputy Speaker:: The Hon. Member for Ottawa- Vanier (Mr. Gauthier), on the same point of order.


Jean-Robert Gauthier: Mr. Speaker, on the same point of order. I would like to take advantage of this opportunity to inform the House we are all quite aware of the importance of Private Members' Bills and that it is going to be pretty difficult in a few moments to proceed with that part of today's business.
Just the same, I would like to ask the Chair whether it has any new developments to divulge to the House on that important issue, namely, when a Member's name is drawn and appears on the list and the date is set. I wonder whether the chair has had time to consider a system for rescheduling the Member's turn, maintaining his right to be heard in this House and debating the motion or question tabled in the House by that Member.


Mr. Deputy Speaker:: The Chair has indeed reflected quite a bit on the question raised by the Hon. Member for Ottawa- Vanier. it has for some days been hoping, and still hopes, that Members will reach a consensus on this question.
I was informed there would be a meeting today of the House Leaders of all three parties, and in that case, I hope they will reach a consensus.
However, should they fail to reach a consensus, I should be willing to hand down a ruling on which, I hope, the Members of this House will be able to reach agreement.


Mr. Deputy Speaker:: Is there unanimous consent to call it five o'clock?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: It being five o'clock p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS HIGH INTEREST RATES CHARGED ON CREDIT CARDS
Reginald Francis Stackhouse: That the Standing Committee on Finance and Economic Affairs be empowered to study the question of excessively high interest rates charged by the issuers of credit cards and charge cards.
He said: Mr. Speaker, I appreciate the opportunity to debate this motion. It is true that under the new rules governing the House a committee now has the power to initiate such investigations, which was not the case when the motion was written. It is still relevant for the House to give direction to its committees, which are extensions of the House. It is true that the committee can carry out this mandate with much more enthusiasm and commitment knowing that it has the authority of the House behind it.
I have submitted this motion to the House and I hope it will receive support from all quarters. It concerns a major consumer problem. Two-thirds of the adults of Canada now use credit cards. The average adult has three of these cards. About 40 per cent of credit card users pay interest charges. Are they receiving justice? I put the question to you, Mr. Speaker, that while interest rates affecting consumers and investors have gone up and down in the main, interest rates on charge cards and credit cards have not. The bank rate goes up and down but the interest rate on credit and charge cards remains the same year after year. For example, MasterCard issuers, such as the Bank of Montreal, the National Bank, the Victoria and Grey Trust, raised their interest charges a few years ago to 21 per cent when the bank rate was very high. Since then the bank rate has come down but the charges to consumers have not. Canada Trust charges 18.45 per cent. The Royal Trust began issuing its MasterCard last fall with a discount rate of 14 per cent. This rate has now been raised to 14.75 per cent yet in the same period of time the bank rate has fallen.
Are those rates too high? That question has already been answered by a competitor of MasterCard, namely VISA. It has issued ads which said, "Are you fed up with paying high interest rates on your MasterCard accounts?" The industry has put the question which I have raised before the House today. Obviously charges are too high.
We must also ask the question to issuers of VISA cards. In addition to an annual or a transaction fee, VISA charges now range from a low of 15.9 per cent to 18.6 per cent by four banks, the Bank of Nova Scotia, the Bank of Commerce, the Royal Bank, and the Toronto Dominion, in spite of the fact that the bank rate has come down. It is not only the issuers of MasterCard and VISA that are imposing charges far above what is justified by the rate issuers have to pay for the money they use, but gasoline credit card charges are much higher still. Companies such as Sunoco, Imperial, Texaco, Shell and Gulf as well as PetroCan-which used to say "It's ours"-now


CONSUMER AFFAIRS
[Stage Direction]
May 26, 1986
[Stage Direction]
charge 24 per cent. But the real biggies are the department stores, such as the Bay, Eaton's, Sears and Canadian Tire which charge 28.8 per cent. They impose high charges constantly, consistently and invariably in spite of the fact that what they pay for the money they borrow, as the foundation of their credit, goes up and down. Are they aware that inflation has come down and the cost of borrowing money has dropped from a high of 21 per cent, which might well have justified the high rate they charged a few years ago, to a bank rate of 8.43 per cent today?
Mr. Orlikow:: Why doesn't the Minister of Consumer and Corporate Affairs (Mr. Cote) do something about it?


Reginald Francis Stackhouse: We invite the NDP to join us in putting the question: are those companies justified in charging rates without some explanation that will give Canadians confidence that the rates are justified? That is the purpose behind my motion, Mr. Speaker. It is a motion that will direct the subject to the Finance Committee and give it the opportunity and the mandate to do a thorough investigation.
I am aware that companies claim that the cost of administration and various other related costs require them to charge them to customers. Maybe they do, but let them show cause. Let them put forth evidence that will support the apparent high, I believe excessively high, interest they charge credit card users. Let them not treat consumers as though they were mushrooms fit only to be in the dark. Bring the question into the light. Let us have some respect for Canadians. Companies should give reasons, solid, hard, factually based reasons, to show that their policies are justified. It is not enough for management to say: "We need this money because the cost of credit and administration is so high", without supporting those claims with evidence.
Representatives of management have called me since I first went public with the issue. It was from the government side of the House that the issue first came before the public and Parliament.


Some Hon. Members:: Oh?


Cyril Keeper: Why don't you bring it forward as a government motion?


Reginald Francis Stackhouse: The NDP may not like that, but it is a fact. The point is that these companies-


Cyril Keeper: Mr. Speaker, I rise on a point of order. Not only is the Member wrong when he says that the interest rate issue was first raised on that side of the House as a government matter-


Mr. Gustafson:: That is debate.


Mr. Deputy Speaker:: The first part was certainly not a point of order.


Cyril Keeper: Neither was the Member's comment. Let me come to the point, Mr. Speaker. The Member makes reference
Interest Rates
to himself being a Government Member and raising the matter of interest rates. This is Private Members' Hour. If the Member wants to act as a Government Member, let him bring forward a public Bill.


John Horton McDermid: Get up and debate the subject then.


Reginald Francis Stackhouse: A Member on this side of the House- which was the phrase I used-was the first to introduce the subject of credit cards, not interest rates in general. I invite the support of the Hon. Member for Winnipeg North Centre (Mr. Keeper). I welcome it. When and if a Bill is introduced, I will be glad to have his support there, and I am sure consumers will be happy to have his backing.
I put this subject before the House and I hope the issue will be sent from here to committee, not only because consumers have a right to know but because Parliament has a duty to ask why these interest rates are being charged.


Cyril Keeper: What about the Government?


Reginald Francis Stackhouse: Parliament is not only a place for passing legislation, it is also a forum in which the concerns of the public can be debated, studied and where the light of scrutiny can be shone upon them. People will know that those who represent them are expressing their concerns. This has been then traditional role of Parliament.
In centuries past it was always a practice, when the Crown asked for financial support, for the Commons to reply that the people's grievances must be heard. Here we have a serious long-felt grievance. On behalf of people who have written to me from coast to coast I bring it to the floor of the House and ask Members of the House to support my motion in this regard so we can study the matter thoroughly. Here is a grievance, if ever there was one. Issuers of credit cards are paying less for the money they borrow. The receivers of credit are paying more for the money they borrow. Where is the justice? Let Parliament find the answer to that question. The banks, oil companies and department stores have their lobbyists who rightly and openly come before us. We are the lobbyists for the consumers, and I hope all sides of the House will join together in supporting consumers today.


Alfonso Gagliano: Mr. Speaker, I want to congratulate the Member for bringing this motion forward. On May 22 the Minister said that the interest charges also include service charges. I believe the banks are charging interest, not service charges. Their service charges are covered by the merchants. People should know that every merchant, whether he be a restaurant owner, barber shop owner or tailor, has to pay a percentage fee. It could be 3 per cent, 4 per cent, 5 per cent or 1 per cent. The fee is negotiated in accordance with the volume of business paid for by credit card. Whatever the banks are charging to the consumer is therefore purely interest. I agree with the Hon. Member when he says that MasterCard charges 21 per cent. VISA charges

May 26, 1986
Interest Rates
18.6 per cent. The oil companies charge 24 per cent, and the department stores charge 28.2 per cent. Definitely there is something wrong. We know interest rates have gone down, so how much handling charges can they have? Talking about handling charges, if it costs so much, how come the banks are advertising so much? How come the banks encourage people to use their cards?
If memory serves me right, when credit cards were instituted you used to pay a fee. Some respected credit card companies still charge a serious fee. Every month you get a statement you have to pay the full amount. There is no question of deferring your payment. VISA and MasterCard tell you on your statement that the minimum payment is $10 or whatever. You can pay that and they charge you interest on the balance. We are not dealing here with just a credit card, it is a personal loan. Everyone with a credit card has a line of credit. You can buy whatever you want and at the end of the month you can pay in full. They do not charge you interest if you pay in full because they are getting handling charges from the merchant. That is why I say it is an interest charge and not a service charge. If you pay at the end of the month there is no interest. They are collecting a service charge from the merchant. However, if you only make a partial payment, they charge you interest.
I think the banks are taking advantage of this credit line they created for consumers. It gives them a lot of business. Just consider the number of credit cards issued. Practically everyone today, including myself, use credit cards. However, when people borrow money, business people or whoever, they do not have to pay interest rates like that. Why should the consumer have to pay those interest rates?
I agree that the Government should look into this. The Minister said he is looking into it, but he is off on the wrong foot because he believes that the interest rate includes service charges. That is not the case. I repeat, service charges are paid by the merchant.

-I want to say these interest rates are unacceptable. We agree. We support the Hon. Member's motion, and I hope the Committee on Finance and Economic Affairs will be able to conduct and inquiry and summon before the committee representatives of the banks and credit card companies and ask them to explain why they still have to charge rates of as much as 18.6 per cent, 21 per cent, 24 per cent or even 28 per cent. This is unacceptable, when we realize that today, the interest on a personal loan varies from 10 to 12 per cent.


David Orlikow: Mr. Speaker, I am pleased that the Hon. Member for Scarborough West (Mr. Stackhouse) has brought this matter to the House. We certainly will agree to let this matter go to committee. However, I have to say to the Member that he was lecturing the wrong people. I do not think there is a single Member of this House who will defend the banks or the oil companies or
the department stores, all of whom are ripping off the customers who do not pay their monthly accounts immediately. The people who refused to take any action when this was raised by Members of Parliament are the Minister of Consumer and Corporate Affairs (Mr. Cote), the Minister of Finance (Mr. Wilson) and the Minister of State for Finance (Mrs. McDou-gall). When they were asked about this, their response was that, first, they are quite prepared to leave it to the market to decide what interest rates should be. As well, without any investigation or question, they adopt the defence of these companies that they are not overcharging. There is no investigation by the Ministers concerned or their Departments. That is why I say that the Hon. Member has brought this question to the wrong place.
Last November 20, when interest rates came down again, we asked the Conservative Government, when it was boasting about low interest rates, low interest rates for whom? We pointed out what was happening to people who do not pay their outstanding bills immediately. They had no answer. There was no action. I point out to Members of the House that there are 16 million credit card holders in Canada, half of whom pay off their balances each month and do not pay any interest. Who are they? They are people in the middle and upper-income brackets. I am sure there is not a Member of Parliament who does not pay his or her account every month without being charged interest. That leaves 8 million people who pay 18 per cent to 21 per cent interest if they do not pay up at the end of the month. They pay 24 per cent for an oil company credit card and 28 per cent for a department store credit card. The Hon. Member gives some credit to VISA. I understand that VISA charges a service charge, a dollar a month whether you use it or not.


Don Boudria: No, 25 cents a transaction.


David Orlikow: If the Hon. Member is going to give credit to VISA, we better see what that adds up to.
Let us look at the reality. These rates have not essentially changed for consumers since September, 1984, when the Conservative Government, of which the Hon. Member for Scarborough West is a Member, took office. From September, 1984 until today interest rates have dropped from 12.28 per cent to 8.43 per cent. These robbers are still charging the same rates they established in 1981 when prime money rates were well over 20 per cent. What has the Government said about this? Members, including the Member for Scarborough West, have asked the Government, and both the Minister of Finance (Mr. Wilson) and the Minister of Consumer and Corporate Affairs (Mr. Cote) say they will not interfere with the market. The market magic will fix everything. What has it fixed?
OO)
The market has provided us with gold cards at $75 a year, great for high-income earners who pay off their bills every month. The market has allowed organized retailers to cut their costs in retailing with credit cards by reducing the charge to
May 26, 1986

the retailers for using cards to less than 2 per cent. They have not passed that on to the consumers. Consumers have not received anything in the way of reduction, even though the New York Federal Reserve Bank in the United States calls this type of financial dealing "the single most profitable of all loans made by major banks". Of course, they are individuals, they are people in the lower income brackets and they have no political clout. So the American and Canadian Governments have let them get away with it.
The question which we should ask is, what would the Government have done differently if it really wanted to ensure that consumers receive a fair share of the lower interest rate on their charge card purchases? This is the kind of question the Member for Scarborough West should ask his Minister. It could have investigated thoroughly whether the costs of operating the charge cards are as high as the banks say they are. The Minister of Consumer and Corporate Affairs just took their statement that they were not overcharging as gospel truth and refused to do anything about it.
Our information is that about half of the charge card costs are administrative and half are for the cost of money. If the cost of money has declined, as we know, and as every Conservative Member wants us to know, because of the great policies of that Government, if they declined by 3.85 per cent from September until now, then the card holders could have had the interest rate reduced by 2 per cent, because that is half of the reduction in the interest rate. That would have saved the bank credit card holders over $100 million a year. If you add to that the overcharging by the trust companies, the oil companies and the department stores, we are talking of probably close to $200 million. We are talking about huge amounts of money, and the Government has been quite content to take the credit card companies' word that they are not making much money, or that the market will somehow work in the consumer's favour. Second, the Government, if it felt that consumers' interests were being sacrificed to those of almost everybody else, could have acted on the consumers' behalf and begun a rigorous examination of consumer credit and sought some legislative relief. We do not need another study. That is again just putting off dealing with this very serious problem.
One solution which we favour, and which the Government should be looking at, is a ceiling rate for credit card interest, which would show that the market is sensitive as interest rates come down or go up. An interest rate ceiling on cards pegged to the amount that banks actually pay for their money would be very helpful.
We ought to have heard from the Government some sound consumer advice about the cost of credit. We should not be saying that the market will decide, when the market is rigged against the poor consumer. There has been a real rip-off of hundreds of millions of dollars which the Government has permitted. We should be urging consumers to find alternative sources of credit. We should encourage them to form credit unions of their own where they do not exist. We have begun to educate the people so they do not get ripped off too much by
Interest Rates
the income tax discounters. Why do we not begin to educate the people who get into trouble because of buying too much and get caught in this credit card squeeze?
We will support this motion going to committee, but to us it is just another way of postponing any serious, real action on what is a disgraceful situation, the rip-off of hundreds of millions of dollars every year by the banks, by the oil companies and by the department stores. That rip-off should be dealt with now, not a year or two from now when the Finance Committee has debated this issue again.


John Kenneth Gormley: Mr. Speaker, I wanted to say just a few brief words on this particular motion put forward by my hon. friend from Scarborough West. I would like to begin by applauding and heartily congratulating the Member on this motion in his personal attempts, both in Question Period in this House and in debate, in addressing this question of credit card interest rates.
This particular Member has, in many respects, assumed this as one of his personal issues. I know it probably comes as a great satisfaction to him today to hear Members from all Parties address this matter in a non-partisan fashion. I think there is certainly a feeling among all three Parties that the matter of credit card interest rates must be dealt with.
To deal specifically with interest rates, this matter has obviously come to the attention of the public after at least three to four years of great fluctuations in rates where they hit a peak bank rate approaching 20 per cent and then, of course, fluctuated from there. It has really been only in recent months, since the election of this Government, that we have seen interest rates begin to stabilize and, in fact, drop. I was very pleased to hear the Member from the New Democratic Party refer to a bank rate now under 9 per cent. This gives considerable urgency to the matter when we have a bank rate at 8.3 per cent, and the disparity between that bank rate and credit card interest rates is probably the greatest in many years.
Dealing with the argument of a relative rate for credit cards, it is obvious that credit card rates will be higher than established loan rates, somewhat higher than the prime rate, as I think all Members agree there is an administrative cost built in.
Clearly the motion of the Member for Scarborough West (Mr. Stackhouse) to have this matter referred to the Finance Committee is a timely measure. The committee structure of this Parliament under the new reform now gives the standing committees the ability and the opportunity to examine issues within the general ambit of a particular portfolio responsibility. What better way to examine this issue that affects millions of Canadians than to have the Finance Committee examine it?
I do disagree with my friend from the NDP who said that to have the issue studied by the Finance Committee is an unrealistic way of addressing it. When one looks at the Finance Committee and the reputation it is beginning to

May 26, 1986
Interest Rates
develop in this Parliament, I think one cannot criticize it for failing to address issues front and centre.
To have the Finance Committee study this matter is a timely and a relevant approach. I think it is the right approach. Again I congratulate the Member for Scarborough West for addressing this very important issue of credit card interest rates, and on behalf of my constituents I support wholeheartedly a study of it by the Finance Committee. I urge support for the Hon. Member's motion and I agree with it fully.


Mr. Deputy Speaker:: Prior to giving the floor to the Member for Glengarry-Prescott-Russell (Mr. Boudria), may I point out that the Hon. President of the Privy Council (Mr. Hnatyshyn) has designated tomorrow as an allotted day, therefore, the item that was scheduled for Private Members' Business will be put at the bottom of the order precedent, this without prejudice to any ruling that we may make at a later date.


Don Boudria: Mr. Speaker, I also welcome this opportunity to take part in the debate on the motion moved in the House by the Hon. Member for Scarborough West (Mr. Stackhouse).

First of all, Mr. Speaker, I would like to congratulate the Member for bringing forward this motion to our attention this afternoon. I want to draw your attention to the very important component of this motion which refers to the excessively high interest rates charged by the issuer of credit cards and charge cards. Indeed, the really important ingredient of the motion before us today is to recognize, as the Hon. Member has, that these rates are excessive and totally unacceptable. The wording of the motion sends a very clear message to the Finance Committee about the work that is required of it.
While I am not proposing an amendment, I hope the Finance Committee will take other costs into account when it studies this motion. I hope the Hon. Member will agree that the entire costs of credit cards should be studied. I am not only referring to interest rates on credit cards but also to the consumer fees that are charged in many cases. For example, one credit card company charges 25 per cent for every transaction up to a certain amount. Other credit card companies charge a fee at the beginning of the year, with no subsequent fees. A variety of fees are included in one form or another, which really add to the cost for the consumer who is purchasing a variety of goods.
The Hon. Member for Scarborough West (Mr. Stackhouse) will probably be a member of that Finance Committee and I hope he takes that suggestion into account when the committee studies this matter.
I think Parliament should look into the impact that credit cards have on pricing. This refers to fees that are charged to businesses. If a retail store knows that it will have to pay 4 per cent in order to have the service of a credit card company and knows that half of its business will be conducted by credit card, obviously it will increase the price of its merchandise by 2 per cent in order to recover its cost. This represents another cost to the consumer that is not often mentioned.

Mr. Speaker, I recall going south of the border several times and in some American cities people who do not use credit cards are given discounts. For example, a gas station will offer a 2 or 3 per cent discount to customers paying cash rather than using a credit card. This is the kind of initiative they take in some American states, but so far I do not remember ever seeing the same kind of offer here in Canada. In my opinion this would be one of the main issues which should be reviewed by the parliamentary committee which will study the credit card system and the excessively high rates charged by the issuers of these cards, as our colleague from Scarborough West so clearly indicated.
To conclude very briefly, Mr. Speaker-because hopefully the motion will be adopted this afternnon and be considered by the parliamentary committee which deals with financial matters-I would like to echo my other colleagues in commending the Hon. Member for Scarborough West for bringing this motion before the House today and suggesting that the question of excessively high interest rates charged by the issuers of credit cards be considered. Indeed we hope that the fact that we are debating this issue in the House today might encourage the issuers of credit cards to lower their interest charges. In my judgment it does not make any sense at all that banks can lend money at 12 or 13 per cent, and yet issuers of credit cards charge 18, 21 or 24 per cent. Worse still, some department stores charge 28 per cent to finance the cost of the products they sell.
As we know, a less enlightened consumer will often be tempted to use a credit card instead of borrowing from a bank or trust company. I would suggest this may be too convenient a way for him to buy what he wants, but later on he realizes that his purchase is financed at these excessively high rates. I believe it should be hoped that all consumers would use their credit cards constructively, such as using it for a month and then paying the total balance at the end of that month. But, unfortunately, the economic condition of some of our constituents are such that often when they need something, they use their credit cards to purchase it and unhappily cannot afford to pay in due time. For those people especially, we should do what we can to reduce interest rates, as suggested by our colleague, the Hon. Member for Scarborough West.
It is therefore my hope that when we do consider the matter, we will be looking not only at interest rates as suggested by the Hon. Member, but also at the impact on prices that the whole credit card system has, and finally indirect costs. I am referring to the monthly charges or the once-a-year fee
May 26, 1986

required from credit card holders, and also to the costs to businessmen who use such a service. Because often the businessman is almost snared in. He has no choice whether he will honour the card or not. He knows that many customers will use their cards, so he has no choice-he must use the service, even though sometimes credit card issuers charge costs that are sometimes much higher than what they should be.
It is therefore my hope that the parliamentary inquiry will have all the scope needed.


Pierre Blais: Mr. Speaker, I am pleased to rise on the motion introduced by my colleague for Scarborough West. I would simply emphasize the fact that in its present form, the motion would empower the Committee on Finance and Economic Affairs to deal with a matter it can now deal with on its own initiative.
Indeed, since the new Standing Orders were introduced recently, committees of this House can consider matters coming under their jurisdiction without a specific reference from the House of Commons.
Although it adds nothing to the powers of the Committee, I suggest the motion put forward by the Hon. Member for Scarborough West reflects the importance of the matter to him.
The vote that will certainly be held, Mr. Speaker, will allow Members of this House to express their personal interest for the matter raised by my colleague.
I think this is the approach the Committee on Finance and Economic Affairs should take when considering the result of the vote and before deciding whether or not it would be appropriate to take the matter under consideration, as it can do.
Another thing which needs to be pointed out, Mr. Speaker, is the fact that basically the matter of credit card interest rates falls under provincial jurisdiction, so it would be up to the provinces to take action should they feel that current rates are excessively high. An affirmative vote by Members of the House would certainly give them a significant and additional incentive to do so.
Still, Mr. Speaker, the House would be well advised not to anticipate the findings of the study which the Committee on Finance and Economic Affairs might choose to undertake. That is why I think the word "excessively" used in the motion implies that the House is already convinced that the interest rates are too high, even before the Committee on Finance and Economic Affairs has had an opportunity to study the question.
Mr. Speaker, I would therefore propose an amendment to the motion of the Hon. Member, substituting the words "the current level of' for the words "the question of excessively high". This amendment would not change the basic idea of our
Interest Rates
colleague from Scarborough West, nor would it express a value judgment. Therefore the motion would read as follows, Mr. Speaker:
That the Standing Committee on Finance and Economic Affairs be empowered to study the current level of interest rates charged by the issuers of credit cards and charge cards.
I hope my colleague will accept this proposition, for I would be pleased to support the amended version of the motion of my colleague from Scarborough West.


Mr. Deputy Speaker:: The motion proposed by Mr. Blais, seconded by Mrs. Duplessis, is as follows:
That the motion be amended by deleting the words "the question of excessively high"and substituting therefor-


Suzanne Fortin-Duplessis: A point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Member for Louis-Hebert (Mrs. Duplessis) on a point of order.


Suzanne Fortin-Duplessis: Mr. Speaker, I am not the seconder of this motion. The seconder is the Hon. Member for Cariboo- Chilcotin (Mr. Greenaway).


Mr. Deputy Speaker:: So be it. The motion proposed by Mr. Blais, seconded by Mr. Greenaway, reads as follows:
That the motion be amended by deleting the words "the question of excessively high"and substituting therefor the words "the current level of'.


Jean-Robert Gauthier: Mr. Speaker, on a point of order.


Mr. Deputy Speaker:: The Hon. Member for Ottawa- Vanier (Mr. Gauthier), on a point of order.


Jean-Robert Gauthier: I don't want to hold up debate on this subject because I agree that the motion as drafted was in order and in fact, I think this is a study that is long overdue. I simply want to remind the House that there are certain ways of doing things in the House of Commons, and I feel this particular amendment might be ruled out of order by the Chair if it would refer to specific citations in Beauchesne's Fifth Edition. However, Mr. Speaker, before arguing the relevance of the motion or the amendment, I would like to say to the previous speaker that, of course, committees are empowered to examine matters referred to them by the House of Commons, but I wish the House would also recall that the powers of committees are limited with respect to other matters-and we can see this in Standing Order 96(1) and (2)-which concern the department and the department's responsibilities. As the Hon. Member said himself, this is a matter that primarily concerns the provinces, that is the power to set interest rates. So I will not read how the committee could examine this matter of credit cards for which interest rates are charged that are judged to be excessive.
Mr. Speaker, I simply want to ask the Chair, and I will be brief, to refer to Citation 437(1) and (2), Beauchesne's Fifth Edition, and-



May 26, 1986
Interest Rates
If I may be allowed to use the English text, which is the one I have before me, I will quote Citation 437(1):
An amendment setting forth a proposition dealing with a matter which is foreign to the proposition involved in the main motion is not relevant and cannot be moved.
Citation 437(2) reads:
An amendment may not raise a new question which can only be considered as a distinct motion after proper notice.
The reason I raise it is that I believe that by taking out the word "excessive"-

Removing the word "excessive" practically destroys the core of the motion. I feel this broadens the debate and takes away the weight, the power and-


Don Boudria: Raison d'etre.


Jean-Robert Gauthier: raison d'etre of the motion, which, according to everything I heard today, is the point Hon. Members have been trying to make. They feel there are rates that are excessive and which are imposed by the issuers of credit cards.
And in that connection, Mr. Speaker, I cannot agree to having the question put on this motion without asking the Chair for a ruling, after perhaps considering Citation 437(1) and (2), and indicating to me whether or not you agree.


Pierre Blais: Mr. Speaker, I rise on a point of order.


Mr. Deputy Speaker:: On the point of order, I need not hear the hon. Member for Bellechasse, if that is what he was raising for. First of all, I want to thank the Hon. Member for Ottawa-Vanier (Mr. Gauthier) for giving me advanced notice of his opposition to the procedural form of the motion moved by the Hon. Member for Bellechasse. I have read Beauchesne's Citation No. 437, but with all due respect to the Hon. Member for Ottawa-Vanier, I think that the amendment proposed by the Hon. Member for Bellechasse is indeed in order, and I base my decision partly on Citation No. 425, and partly on a close examination of Citation No. 437.
The debate therefore is on the amendment, and the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) has the floor.


Don Boudria: Mr. Speaker, we have just indicated in this House how important it is for us to consider this matter, in view of the fact that interest rates are excessively high. The agreement of all members of this House in the previous debate was to the effect that interest rates are excessively high. What would be the purpose of this examination if the key words added by the Hon. Member for Scarborough West (Mr. Stackhouse) were removed?

Paraphrased, the new motion would read: "-be empowered to study the question of interest rates charged by credit card and charge card issuers". This issue has come to our attention because the Hon. Member for Scarborough West (Mr. Stackhouse) has referred on many occasions in this House to the fact that these interest rates are unacceptably high, not because we have decided all of a sudden that the House should have a debate purely on this issue but for other reasons. This issue has come to the floor of the House of Commons because one Hon. Member has, on repeated occasions, asked questions about this topic of the Minister of Consumer and Corporate Affairs (Mr. Cote) and has today again in his remarks talked to us about these excessively high interest rates. He has not talked about the excessively low interest rates, nor about current interest rates. We are concerned about the high interest rates charged on credit cards. That is the reason for our debate for the last 45 minutes.
I must say that I disagree with the Hon. Member for Bellechasse (Mr. Blais) and his proposed amendment this afternoon. If this amendment passes, he has ruined the good work of his colleague seated immediately behind him, the Hon. Member for Scarborough West. The Hon. Member for The Battlefords-Meadow Lake (Mr. Gormley) earlier in the House spoke of the work of the Hon. Member for Scarborough West and the mission he had to bring to the House the cases of these excessively high interest rates. If it was so important, then why is it now the view of certain Hon. Members that it is no longer relevant? I fail to understand it. Perhaps other Hon. Members can explain to me why they have to be afraid of telling the issuers of credit cards that they are charging excessively high interest rates? I ask you, Mr. Speaker, has any one of your constituents ever complained to you about the excessively low interest rates charged by issuers of credit cards?

But if such people exist, Mr. Speaker, there are none in my riding; perhaps there are some in the Bellechasse riding, I don't know, but not a single constituent in my Glengarry- Prescott-Russell riding has ever come to me to complain that the cost they had to pay to credit card issuers were too low. All my constituents agree that they are too high and they all support the motion moved by the Hon. Member for Scarborough West to the effect that they were excessively high. This being said, Mr. Speaker, I must object to the amendment moved by the Hon. Member for Bellechasse, and I dare hope that when the Hon. Member for Scarborough West meets him behind the curtains, he will give a piece of his mind to the Hon. Member for Bellechasse for moving such an amendment.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.
May 26, 1986


Mr. Deputy Speaker:: The question is on the amendment of Mr. Blais, seconded by Mr. Greenaway:
That the motion be amended by deleting the words "question of excessively high" and inserting the word "present".
Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the amendment will please say yea.


Some Hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some Hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the yeas have it.
And more than five Members having risen:


Mr. Deputy Speaker:: Call in the Members.


Mr. Deputy Speaker:: I declare the amendment carried. On a point of order, the Hon. Member for Scarborough West (Mr. Stackhouse).


Reginald Francis Stackhouse: Mr. Speaker, may I have unanimous consent that the vote on the main motion be taken now?


Some Hon. Members:: Agreed.


Don Boudria: Mr. Speaker, I would like to second that suggestion.


Some Hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Is there unanimous consent?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion as amended?


Some Hon. Members:: Agreed.


William Warren Allmand: Mr. Speaker, I would like to submit that in the future, when we vote on a Private Members' Bill, we should vote by row and not according to Party. We are not voting on a Government measure but on a Private Member's measure. I hope the Chair will consider that in the future.


Some Hon. Members:: Hear, hear!


Mr. Blaikie:: Mr. Speaker, on the same point of order. I thought it was a shame that this historical occasion was marred by the fact that we took the vote according to Party instead of according to rows. I would have attempted to get up on a point of order in the middle of the vote but I did not. I think next time around that should not happen at all.


Mr. Deputy Speaker:: The points made by the two Members are well taken by the Chair. The problem this time is that the sheets on which we record the votes-

-showed the names according to parties.

The points are well taken and the matter will be taken care of.
The question is on the main motion as amended. All those in favour will please say yea.


Some Hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed please say nay.


Donald Alex Blenkarn: Nay.


Mr. Deputy Speaker:: In my opinion the yeas have it.

May 26, 1986
Adjournment Debate I declare the motion carried.
The hour provided for the consideration of Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 66 deemed to have been moved.

[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, on May 1 the Supreme Court of Canada rendered three judgments on minority language rights which, regretfully, cut back on what were perceived to be, and in some jurisdictions this was the practice over the years, constitutionally entrenched rights. These judgments dealt with cases originating in Quebec, Manitoba and New Brunswick.
In the Quebec case, Duncan MacDonald, a Quebec Anglophone, argued that by virtue of Article 133 of the Constitution of 1867, he had the right to a court summons in the English language, whereas he had been summoned to court by the City of Montreal in the French language only.
Unfortunately, the Supreme Court ruled that Article 133 gave the state, that is the city, a province or the federal Government, and in this case the City of Montreal, the right to choose the language of summons before a federal or Quebec court, and not the citizen called to answer before the court.
This is a regrettable and illogical judgment. Surely the rights entrenched in Section 133 of the Constitution, which allow for the use of French or English before the courts, are to benefit individuals and not the state. When I asked the Minister of Justice (Mr. Crosbie) about this matter on May 5, and in particular whether he would propose a constitutional amendment to fill the gap left by the Supreme Court judgments, he answered, first of all, that no rights were lost by these judgments, which is absolutely ridiculous. Everyone that I have met and read on those judgments agreed that rights were lost, including the Commissioner of Official Languages.
Second, he answered that he would propose ordinary legislation to deal with the situation, but not constitutional amendments. Ordinary laws are not enough because they can easily be changed and do not prevail over other legislation. They do not provide for entrenched rights. I am not surprised by the attitude taken by the Minister.
When the MacDonald case was being argued before the Supreme Court of Canada in December of 1984, his Department argued, in a factum that he signed, the very position that
the court adopted on May 1, 1986, a few weeks ago, namely that Duncan MacDonald did not have the right to a summons in English.
This not only represents narrow bureaucratic thinking on the part of the Minister and the Government, but it is a very offhanded way of dealing with entrenched language rights, which are supposed to help ordinary citizens. It is also another broken promise by the Conservative Party, in this case made to the official language groups and minorities in Canada, that their language rights would be protected.
Once again tonight I ask the Minister of Justice or his Parliamentary Secretary, who is here representing him, to use good, common, political sense and to propose a constitutional amendment which will truly guarantee these important rights to our language minorities.
Mr. Chris Speyer (Parliamentary Secretary to Minister of
Justice): Mr. Speaker, let me state immediately that the federal Government is deeply committed to greater protection for official languages in the area of the administration of justice that goes beyond the minimum constitutional requirement regarding the use of English or French before the courts. The progressive official languages policy of this Government is based on ongoing improvements in this indispensable area of our national life.
As the Hon. Member knows, the Government expects to bring forward, before the end of the year, new legislation to revise the Official Languages Act. We are working on proposed amendments that will not only ensure that this Act is in full compliance with the Constitution, but will strengthen and enhance language rights so that this vital piece of legislation truly reflects our progressive policy.
The Hon. Member can rest assured that we intend to fully address the questions that were in issue in the Supreme Court case to which he has alluded. Special care is given to measures to enhance language rights in the administration of justice and, in particular, in proceedings before federal courts and tribunals.

Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, when we were debating in this chamber in 1980-81 the national energy policy and the PIP grant system, I recall bringing to the attention of the House the potential for abuse. If the Government is going to cover 80 per cent of the costs of the taxpayers of Canada, it is not hard to adjust the costs one way or another so that, in fact, the taxpayers end up paying just about everything.
I do not know whether this has been done in the case of Exco Energy Corporation. That matter might eventually be decided by the courts. However, last December, mainly on behalf of the creditors, I asked what was happening with
May 26, 1986

respect to the Exco fiasco and if there was going to be anything left for the creditors when the dust settled. The reply at that time was, in fact, a non-reply because the matter was under investigation by the RCMP.
It is my information that the RCMP investigation was completed some time in February. Since that time a wall of silence has descended over the whole affair and we know no more about it than we did last December.
I recall in March, 1985, talking with the PIP administration people and asking them to conduct full and complete audits of Exco Energy, formally known as Forward Resources. I believe I was in touch with them before that time because there was a common suspicion in the area in which they were operating that something was untoward. There were reports of exploration programs that cost five or six times what would be the cost for a normal, prudent operator.
Eventually-some time last year-they were not able to meet their commitments. I understand that they owe approximately $7 million in the Northwest Territories alone and considerably more than that in the Province of Alberta, and perhaps in British Columbia and Yukon. The bankruptcy of Exco has been responsible, at least in part, for a series of bankruptcies in the Northwest Territories, including Beaufort Foods, BeauTuk Marine and Buffalo Air. It is a domino effect which commonly occurs in these situations. Hardships are widespread among many people who are creditors of Exco or creditors of the creditors of Exco.
There are many unanswered questions that I hope the Parliamentary Secretary will address in his reply. First, we would like to know whether A1 Langard, one of the principals involved in Exco, is back in Canada. It was said that he had left the country, but let us hope that he is back. Did the RCMP investigations reveal any wrongdoing? The investigations are over and we have not heard anything.
Will any charges be laid in connection with Exco? Was any of the cash or other assets of Exco transferred to other corporations such as AJL Investments Ltd. immediately before the bankruptcy occurred? Did Exco make application for and collect more in the way of PIP grants than it lawfully had coming to it?
Are there any PIP grants still collectable by Exco or the trustees of Exco? That is an important question because if there is anything left for the creditors, it will probably be paid out of PIP grants that are payable to Exco. I understand that a $10 million payment was made some time last year. That was seized by the bank. The bank considered itself first on the list and took the $10 million. There was nothing left for anyone else. If there are further Government payments to Exco, will they go to the creditors or will something of a like nature happen again?
What the creditors really want to know is, as I asked in December, when the dust settles, will there be anything left for
Adjournment Debate
them at all? Those are the questions I sincerely hope the Parliamentary Secretary will be able to answer.


John Horton McDermid: Mr. Speaker, I always enjoy the questions coming from my friend, the Hon. Member for Western Arctic (Mr. Nickerson). They are very thorough. I can tell him right now that I can answer some of the questions he posed and others I cannot. It is difficult to discuss this entire matter with any degree of candidness. It is currently under RCMP investigation and the subject of a case before the Federal Court of Canada. However, I would like to make the point that the federal Government does appreciate that a number of small businesses in the Northwest Territories and Alberta are facing financial difficulties as a result of the Exco Energy case.
Many Members of the House may be aware that last year the creditors of Exco Energy Limited, or Forward Resources Limited, as it was formerly known, voted to place Exco into bankruptcy. As a consequence of this action, the affairs of the company are now in the hands of a trustee who will distribute the realizable assets of the company.
As Members of the House will also be aware, Exco trustees have just filed a suit in the Federal Court of Canada against the federal Government claiming failure to pay $26 million in PIP grants, resulting in damages of $110 million. It should be noted that concurrent with the bankruptcy proceedings, the RCMP investigation is proceeding to determine whether or not charges will be laid against the company. Naturally, we cannot comment on either the court case or the investigation.
With respect to the Petroleum Incentives Payment moneys owing to Exco, I wish to state that officials within the Petroleum Incentives Administration have been conducting an intensive audit since the spring of 1985. Well over 90 per cent of the audit has now been completed. Audit results to date indicate that no additional moneys are owed to Exco by the PIA. In fact, results would indicate that the federal Government is also a creditor of Exco.
The audits were presented to the trustee on a well-by-well and program-by-program basis as they were completed. The trustee has been invited to respond to the audit Findings prior to final decisions being taken on them. The trustee has never responded to the audit findings, although some were presented to him over six months ago, and has chosen to serve the Crown with a statement of claim in the Federal Court for $26 million in PIP incentives and $110 million in damages. The Crown filed its statement of defence on May 15, 1986.
In light of the legal action in the Federal Court, the Crown has no choice but to proceed with its claim in the bankruptcy proceedings. As the criminal investigation of the RCMP is still under way and the civil action is before the courts, I must decline comment as to the case. I am sure the Hon. Member will understand the predicament in which we find ourselves.

May 26, 1986
Adjournment Debate


SHIPBUILDING - MORATORIUM REQUESTED ON IMPORTATION OF VESSELS CONSTRUCTED ABROAD. (B) REQUEST THAT GOVERNMENT ANNOUNCE POLICY
Abram Ernest Epp: constituents and residents of other communities across the country are waiting for action. When are we going to get it?


Mr. J. M. Forrestall (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, at least the Minister does not tend to be hypocritical. My colleague has raised a very important issue, one to which we are devoting very close attention. The Acting Minister of Regional Industrial Expansion (Mr. Mazankowski) is seized of this question and has been aware of it for many years, as the Hon. Member, if he appreciates the history of this Chamber, will understand. The matter has been raised in depth on a number of occasions with the unions, management and the entire marine industry in Canada. The future of our shipyards is one on which I need no lecture from the Hon. Member.
I suggest that there is no easy solution. The Government has already made an enormous contribution to the survival of this industry by providing through its own orders the great bulk of business now on the order books. It has already shown flexibility in its contractual dealings with the shipyards. For example, it agreed to renegotiate its contracts with Halifax Industries Limited so that the company could complete orders it already has with the Department of Transport for some Coast Guard vessels with ice-breaking capabilities.
The Government will continue to support the shipyards through public procurements. The Polar VIII ice-breaker program, the program to which my colleague referred, is under
Adjournment Debate
study and the patrol frigate program is under way. These two programs alone will provide some 10,000 person-years of employment to this very hard pressed industry.
To assure the future of the shipyards for the long term, they must also obtain commercial work. In the face of the collapse of world demand, coupled with the addition of new capacities in countries such as Korea, competition is fierce in all the markets of the world. We must, therefore, make sure that Canadian shipyards work at very high levels of efficiency without imposing an economic burden on the users of Canadian built ships. I am sure my colleague understands that.
For these reasons, the Government will be undertaking discussions and will be continuing discussions that are already ongoing over the course of the summer with the industry, labour and the provinces to solicit proposals for dealing with the future of the shipbuilding sector. The Acting Minister of Regional Industrial Expansion will be prompt to advise his colleagues in the House and the industry as soon as a solution can be found. To that end, we invite the views of the distinguished Hon. Member for Thunder Bay-Nipigon (Mr. Epp).


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.35 p.m.
[Stage Direction]

Tuesday, May 27, 1986