1986-03-19

Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, 1 would like to draw the attention of the House to a worsening problem. Today many Members of the House received representations from Quebec maple syrup producers expressing concern about maple grove disintegration.
They indicate that 85 per cent of Quebec maple groves have sustained damages up to 51 per cent. Among other things, they reveal that losses incurred by maple syrup producers have been estimated at $87 million.
I would like to draw their recommendations to the attention of Hon. Members. First, to negotiate a genuine bilateral agreement with the United States so as to reduce considerably all forms of air pollution; to establish a work schedule for those negotiations; to dispatch research teams to find solutions; and, finally, to compensate agricultural producers for the losses and damages they have incurred.


Mr.   Speaker-Mr. Speaker@: Order, please. The 60 seconds have expired.


PROVINCIAL AFFAIRS
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, yesterday the people of Manitoba spoke, and spoke wisely. They decided to stand up for Manitoba by electing a Government that will stand up for Manitoba against unilateral cut-backs in federal transfer payments to the provinces, and against the federal Conservative strategy to destroy medicare by starving our health care system to death instead of either funding it adequately or having the courage to follow its hidden ideological agenda and openly advocating more opportunities for patient participation, as the CMA likes to call charging the sick. It is reassuring to know that there will be an NDP
Government to stand up not just for Manitoba but for medicare as well.
By the way, Mr. Speaker, much media comment to the contrary, the NDP Government in Manitoba is not the only NDP Government in Canada. Yukon also has an NDP Government and that Territory is doing very well these days as a result.


PRICE OF GASOLINE
Mr. Bill Gottselig (Moose Jaw):: Mr. Speaker, my constituency, the great riding of Moose Jaw, has the distinction of having the lowest priced gasoline of any constituency in Canada. Last weekend the price of regular gas in Davidson, Saskatchewan, was 38.6 cents per litre.
In spite of this price I feel that there are many unanswered questions in the industry, and gas prices should be much lower right across Canada. For example, why have we seen such a small reduction in the pump price of gasoline when world level crude oil prices have dropped so dramatically?
The middle man in this arrangement is the refiner. I, and many thousands of Canadians, would like to know why the refiners' price decrease has not been passed on to consumers.


REDUCTION IN PRICE OF PETROLEUM PRODUCTS
Mr. Vincent Della Noce (Duvernay):: Mr. Speaker, as we all know, the price of gas is following the drop in crude oil prices, for the greater benefit of the Canadian consumer. However, we cannot stop there. I think it is high time the big oil companies adjusted their stride and started cutting wholesale prices for heating oil and diesel fuel. When they do, the independents will be able to offer heating oil users a better price. It is now up to the big companies to show some respect for the small independents who often have to pay for this drop in prices out of their own money, in order to compete. I hope they will soon get the message and adjust their prices so that all consumers will be able to benefit from lower prices on diesel fuel and heating oil as well. It is time all Canadians were

able to benefit from the energy policy introduced by our Government, whether they are buying gas, diesel fuel or heating oil.


EMPLOYMENT
Mr. Sergio Marchi (York West):: Mr. Speaker, I should like to draw the attention of the House to a catch-22 dilemma which Mr. Peter Zilli, the owner of Prill Construction in my riding, is facing. He is in dire need of 20 bricklayers. After nine months of repeated calls to Employment Canada, it has yet to meet the order. Moreover, he has spent over $1,000 placing national advertisements, informing Canadians of these $24 per hour job opportunities. On the other hand, Mr. Zilli has tried unsuccessfully to hire foreign workers, or to sponsor immigrants. Immigration Canada has prohibited these initiatives on the grounds that there are unemployed Canadians available.
Employment and Immigration Canada cannot have it both ways. There must be greater efficiency and precision in the system, for companies like Prill Construction find themselves in a precarious and frustrating position. In the meantime I urge unemployed bricklayers to call my Toronto office at 743-3153.


Mr. Speaker:: Order, please.


ENVIRONMENTAL AFFAIRS
Mr. Howard McCurdy (Windsor-Waikerville):: Mr. Speaker, the rains fall, the waters rise, and much of southwestern Ontario, a landscape of sandbags and tenuous levees, awaits the inevitable deluge. The Americans are prepared; the State of Michigan has declared a state of emergency before the crisis. However, in Canada we have from the Minister of the Environment (Mr. McMillan) an unfulfilled promise of a visit to the threatened communities, and the almost ludicrous announcement of an emergency weather warning system to tell us what we already know-the floods are coming. The floods are coming, not to the rarified laboratories of Burlington but to Windsor, Tecumseh, St. Clair Beach, and other communities in Kent and Essex.
Is it the result of legendary Tory ignorance of Windsor, traditional insensitivity toward this distant corner, or misplaced caution that the federal and provincial Governments together have failed to provide emergency flood damage control to avoid emergency flood relief?
March 19, 1986


AGRICULTURE
Mr. Albert Cooper (Peace River):: Mr. Speaker, agriculture is the historic root of the Canadian economy. We have what it takes-the land, advanced techniques, and excellent farmers. However, with all of this, the industry is in crisis. The Government of Canada recognizes this and has given agriculture a high priority on its agenda.
I want to offer three suggestions which 1 feel will help alleviate the problems faced by our farmers. The first is crop insurance. Crop insurance should provide coverage of real costs on a farm by farm basis. This would then cover disasters such as the recent drought. Second is commodity prices. The EEC and the U.S.A. Government must be persuaded to include agricultural commodities under GATT. This should eliminate the huge world surpluses caused by subsidies, and should result in higher prices. The third is domestic prices. We need to look at higher domestic prices on agricultural commodities in order to protect our agricultural industry and allow it to continue to be the base of the Canadian economy.

[ Translation]


QUOTAS ON CARS IMPORTED FROM CERTAIN COUNTRIES
Mr. Gilbert Chartrand (Verdun-Saint-Paul):: Mr. Speaker, there is an unfair situation in this country that is affecting the automobile retail sector. More and more cars manufactured in so-called developing countries are imported without being subject to customs duty or to the import quotas set for cars imported from countries like Japan.
A Toyota dealer in my riding of Verdun-Saint-Paul is outraged at these discriminatory measures. He considers this to be unfair competiton, and he is right.
When some countries manage to sell nearly 80,000 cars a year in Canada at very competitive prices, it would make sense to put them on the same footing as industrialized countries and make them subject to the same customs tariff. We should also get rid of all import quotas on foreign cars in order to promote a free and competitive market that would certainly benefit the Canadian consumer.



SCIENCE AND TECHNOLOGY


Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, Canada's scientists and engineers were jubilant yesterday following the
March 19, 1986

Prime Minister's (Mr. Mulroney) announcement of our involvement with the mobile service centre of the space station.
This project is designed to lead Canadian space activities into the next century through the development of strategic technologies involving a new generation of robotics and artificial intelligence. It is expected that up to 80,000 person-years and $5 billion in revenue will be created in Canada as a result of this program. Universities and industries in all regions of the country, and especially the high technology riding of Nepean-Carleton, will benefit.
When launched, the space station will be the most complex and visible technological achievement in history. The Government has ensured that Canada and Canadians will be central to that achievement. This decision is a further demonstration of the Government's commitment to science and technology.



SENATE DEBATE

Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, yesterday in the Senate, Senator Paul Yuzyk, a Progressive Conservative, said:
Of all the youth that appeared before our committee and the hearings across Canada-
Mir. Speaker: Order, please. The Hon. Member knows that it is out of order to refer to debates in the Senate.



CHILD CARE


Mr. Neil Young (Beaches):: Mr. Speaker, a study released yesterday by the Canadian Day Care Advocacy Association again shows the great need for, and the benefits of, additional funds for child care. The study showed that although there are almost two million children age 12 and under in Canada, there are only about 172,000 licensed child care spaces.
The Economic Council of Canada says in a study, also released yesterday, that "increased provision for child care and increased access to parental leave for child rearing" would help lessen occupational differences between men and women.
The Prime Minister (Mr. Mulroney) promised during the election campaign not only to establish a parliamentary task force on day care, but also promised to allocate federal funds for day care.
The need has been shown again and again, and the benefits have been clearly demonstrated. The time has come for the federal Government to show its good faith to Canadian families. Now is the time to fulfil campaign promises. Now is the time to provide additional moneys for child care.


Mr. Speaker:: Order, please. Sixty seconds.



PARLIAMENT HILL


Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, just over one year ago the House gave unanimous consent to a motion that I introduced to have a statue of the Right Hon. John Diefenbaker commissioned and placed on Parliament Hill. I am pleased to inform all Members that an artist has been chosen and that a maquette has now been completed.
John Diefenbaker served this House and this country with dignity, honour, and compassion. This statue pays tribute to the great contributions he made to Canada: the Bill of Rights, a vision of opportunity and prosperity, and a commitment to the freedoms we cherish so deeply.
I hope all Members will take an opportunity to view the maquette which will be on display in the Commonwealth Room today from 3 p.m. to 4 p.m. 1 hope Members, with all Canadians, will join in celebrating the unveiling of this statue next September. John Diefenbaker was a great Canadian, and I can think of no better way to commemorate his role in our nation's history than with a statue on the grounds he loved so much-Parliament Hill.


Mr. Speaker:: Order, please. Sixty seconds.



LABOUR RELATIONS


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, the statement by the federal Minister of Labour (Mr. McKnight) yesterday that he has no intention of trying to influence the Government of Newfoundland to conform to national labour standards is indeed a poor reflection on the Government.
The Constitution, the Charter of Rights, and the principle of equal pay for work of equal value have been flagrantly violated by the Newfoundland Government in dealings with provincial government employees.
The same jobs with the same Government, with the same job descriptions, pay workers $3 per hour more or less depending upon which building they are working in. Yet the federal Government will not promote the Constitution, the Charter of Rights, or the concept of equal pay for work of equal value if the violator happens to be another Tory Government.
The federal Minister of Labour should ask the Newfoundland Government to negotiate the problem and stop the suspensions and fines so that people can get back to work.



CANADA POST CORPORATION


Mr. Bill Attewell (Don Valley East):: Mr. Speaker, the new President of Canada Post is going to need the patience of Job

March 19, 1986
Oral Questions
and the wisdom of King Solomon to get that organization turned around. The top priority is to improve the service.
I had a letter last week from J. Michael Clancy, a constituent of mine, in which he states that a letter he mailed on August 27, 1979, was received marked "Returned to Sender" on March 7, 1986. In other words, it took Canada Post six years and 192 days to return this envelope, which was mailed from Richmond Street West in Toronto to Spadina Road, a few blocks away.
[DOT] (M15)
The other key priority is the Government's request, announced by the Minister of Finance (Mr. Wilson), that Canada Post reduce its operating deficit to zero by the end of fiscal 1987-88. Canada Post has been studied to death. It is time for sound co-operative action by management and all employees to improve service and productivity.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Labour. On behalf of Canadians the Minister has been attending the regional meeting of the International Labour Organization and has been elected its honorary chairman.


Some Hon. Members:: Hear, hear!


John Napier Turner: I hope that does not come off my time, Mr. Speaker.
It must be doubly embarrassing for the Minister, acting in that capacity, when the International Labour Organization condemns the labour practices in the Province of Newfoundland, with reference to the present strike, as not being up to acceptable ILO standards.
The Government of Canada has so far refused to uphold its obligations as a member of the International Labour Organization by persuading, or attempting to persuade, the Province of Newfoundland to bring its labour legislation into accord with those standards.
Why does the Government take this position, and what does the Minister intend to do about it, now that the International Labour Organization has recognized him in an honorary capacity?


Hon. Bill McKnight (Minister of Labour):: Mr. Speaker, I appreciated the kind words of the Leader of the Opposition, but I knew there was more to come.
An ILO study mission came to Canada last summer and visited three provinces to seek more information on complaints filed by workers in four provinces. The Hon. Member is correct that the standards and structures in three of those provinces were found to be lacking as compared with those of the ILO.
The responsibility of the Government of Canada is to assist the ILO in transmitting that information to those provinces. I have transmitted it to them for their consideration. I have also sent a letter to those provinces offering my assistance in interpreting the intent of the ILO.


John Napier Turner: That is virtually acting like a post office, Mr. Speaker.


CANADIAN LABOUR PRACTICES
John Napier Turner: Why does the Minister adopt this position of neutrality? Does he not realize that he is sending a message to the workers of the world that, while in the past our country has condemned labour practices in Poland, Chile, and other repressive countries, we have these practices here in Canada and he is doing absolutely nothing about it?


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


William Hunter (Bill) McKnight: Mr. Speaker, I thought the Hon. Leader of the Opposition was serious in his request for information. It is simply rhetoric to compare the labour practices in Canada to those in oppressed regions which we are presently discussing in Montreal. I can assure the Hon. Member that not one government member, worker member, or employer member would compare the labour practices in this country to those of the countries which he just mentioned.


Some Hon. Members:: Hear, hear!


MINISTER'S POSITION
John Napier Turner: It
may be coincidental, Mr. Speaker, that our federal Minister of Labour, who has the honour to head this organization at its hemispheric meeting, refuses to condemn a Tory Government in Newfoundland, a Tory Government in Alberta, and a Social Credit Government in British Columbia. Is that type of friendship more important than protecting the workers in those provinces and ensuring internationally accepted labour standards?


William Hunter (Bill) McKnight: Mr. Speaker, I am sure you would not allow me the time necessary to explain labour relations in our country and the division of power to the Liberal Member of Parliament.


Mr. Gauthier:: You cannot explain them, that's why.
March 19, 1986


William Hunter (Bill) McKnight: I have had discussions with the Government of Newfoundland and the Canadian Labour Congress. The Hon. Member should be aware that, when one is offering to solve a problem, the only discussions which are meaningful are those between the two parties.


APPLICATION OF ILO STANDARDS
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is directed to the Minister of Labour. He had better make up his mind and get his story straight pretty soon. He said yesterday at the ILO Conference in Montreal that he had no intention of urging the Government of Newfoundland to comply with ILO regulations. Will he tell us now whether or not he has urged the Government of Newfoundland to comply with ILO standards to which Canada is a signatory?


William Hunter (Bill) McKnight: I am not sure whether the Member came in late, Mr. Speaker, but I think I have answered that question. His premise is completely false. The statement I made yesterday was that I had communicated to the provinces, as we are bound to do, for their consideration. I have already said that I had discussions with the Province of Newfoundland. I had discussions with the Canadian Labour Congress. I am offering my services to assist in resolving a very difficult situation.


Brian Vincent Tobin: Mr. Speaker, the Pontius Pilate routine is not amusing.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The Hon. Member knows that kind of thing is not appropriate. Therefore, just a question, please.


Ms. Copps:: What is wrong with that?


MINISTER'S ROLE
Brian Vincent Tobin: Mr. Speaker, how much further must Premier Peckford of Newfoundland go in destroying basic workers' rights and the concept of collective bargaining before this Minister finds his conscience and a sense of responsibility, and takes a leadership role in preserving workers' rights?


William Hunter (Bill) McKnight: Mr. Speaker, I find that very strange coming from a Member whom I have not heard raise his voice in concern about collective bargaining in his own province since I have been in this position. I assure him that, if he recognized federal jurisdiction in matters concerning the International Labour Organization, he would recognize that this Minister and this Government have gone further than the previous Government ever did in transmitting the concerns of a UN body to those partners in Confederation.
Oral Questions TRADE


CANADA-UNITED STATES NEGOTIATIONS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and concerns the important discussions going on between the Prime Minister and the President of the United States.
In Kitchener, Ontario, on October 10 the Minister said we will not be discussing medicare, or unemployment insurance, or bilingualism. They will not be on the negotiating table. Yesterday in Washington an American official said both sides understand that there are no preconditions and that nothing is taken off the table. A Canadian official agreed with this. Will the Minister explain this obvious contradiction to the House?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, I expressed the position of the Government of Canada on frequent occasions, including in Kitchener-Waterloo. The position I took then is the position of the Government of Canada.


PRECONDITIONS INQUIRY
John Edward Broadbent: Mr. Speaker, a Canadian official was quoted in today's press as agreeing that there are no preconditions, that medicare, marketing boards, and a whole range of other matters will be discussed. Is the Minister now telling the House that the official is wrong and these items he listed in Kitchener will not be discussed? Will he assure the House that is the case?


Charles Joseph Clark: Mr. Speaker, if a Canadian official suggested that medicare was going to be discussed, that Canadian official is wrong. I speak for the Government of Canada on the matter. I have made it clear that medicare and the other matters referred to by the Leader of the NDP are not at issue in trade negotiations.


John Edward Broadbent: It is pretty clear that the American officials are saying one thing and Canadians are saying another.


Some Hon. Members:: No!


ENVIRONMENTAL AFFAIRS
John Edward Broadbent: Mr. Speaker, my supplementary is directed to the Minister of the Environment. Will he assure the House that when a statement is made by the leaders of both countries on the important subject of acid rain, included in that statement will be a commitment not simply to research but to a specific timetable for cleaning up the acid rain mess on this continent?

March 19, 1986
Oral Questions


Hon. Tom McMillan (Minister of the Environment):: Mr,
Speaker, I do not know where the Leader of the NDP has been the last 18 months. Our position is clear. We are totally committed to specific targets, specific schedules, and specific commitments of cash.


John Edward Broadbent: We are talking about the other side.


Thomas Michael McMillan: As I said in New York City, what is good for the goose is good for the eagle.


Some Hon. Members:: Hear, hear!

[ Translation]


SOCIAL SECURITY
Raymond Garneau: Mr. Speaker, my question is directed to the Minister of Finance. In his speech-


Mr. Masse:: One of the big guns!


An Hon. Member:: He doesn't look like Chretien!


Mr. Speaker:: The Hon. Member is sitting in the correct seat.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Mr. Beatty:: Move over one seat to your left!


Mr. Speaker:: Order, please.


Raymond Garneau: My hon. friend, like the Minister of Finance, seems to think that the closer you get, the better the target.
Mr. Speaker, my question for the Minister of Finance is as follows: On page 12 of his Budget Speech, the Minister indicated his intention of proposing changes in the Government's social expenditures. Since family allowances have already been partially de-indexed, and since the Government has backtracked on de-indexing old age security pensions and the Nielsen Task Force has said the Canada Assistance Plan is a valid one, I would like to ask the Minister of Finance what social programs he intends to change, as he said in his speech.


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I wish to congratulate the Hon. Member on his promotion to the front benches.

In response to the Hon. Member's question, we have indicated that a range of the universal social programs will be under review this year in advance of next year's Budget. The four principles which I established in the Budget will be the principal guidelines under which we will be reviewing these programs.


CONSULTATION METHOD TO BE USED BY GOVERNMENT IN REVIEWING SOCIAL PROGRAMS
Raymond Garneau: Mr. Speaker, 1 shall repeat my question, since the Minister has given no indication of what he intends to do. Could he inform the House which social programs he intends to review and what kind of consultation process he intends to use prior to making a decision?


Michael Holcombe Wilson: Mr. Speaker, over the next little while we will be making clear the various social programs which are under review. As I indicated in the Budget Speech, we will be looking at the unemployment insurance system following the report of the Forget Commission. Universal social programs, payments such as family allowances and Old Age Security, will also be reviewed. This will be done under the guidelines established in the Budget whereby we will be using the tax system as a means to reduce the benefits of upper-income Canadians and directing more to those in greatest need. As I think the Hon. Member well knows, the consultation has started with a number of interest groups which have expressed an interest in discussing this with us.


INTERNATIONAL LABOUR ORGANIZATION
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Labour. In light of the fact that Canada has signed an ILO convention, after consultation with the provinces, and in light of the fact that four provinces, Newfoundland and three others, have broken the convention, will the Minister of Labour tell us who speaks for Canada?


William Hunter (Bill) McKnight: Mr. Speaker, I am sure the Hon. Member is fully aware of the make-up of the Confederation of Canada. Canada has signed some 26 conventions of the UN, 11 of which impact solely upon the provinces, and the balance impact upon the federal Government. The decision which has been taken by this Government is that we will not sign conventions unless the provinces, our partners, are already in compliance, or agree to be the signatories of those conventions.
March 19, 1986


ROLE OF FEDERAL GOVERNMENT
John R. Rodriguez: Mr. Speaker, was it not the intention of Canada to live up to the convention? If it was not, why did you sign it after having consulted the provinces? Why are you allowing them to breach it?


Some Hon. Members:: Order!


William Hunter (Bill) McKnight: Mr. Speaker, I am sure the Hon. Member knows that I did not sign it, and that this Government did not sign it. I am sure the Hon. Member knows that. I will say to the Hon. Member that Canada has not been found guilty-


John R. Rodriguez: Who speaks for Canada?


William Hunter (Bill) McKnight: -of any breach of an international convention by the ILO. It is the provinces that have been found guilty.
We have, through our offices, delivered the message to the provinces that the ILO found them in contravention. As Minister of Labour, I have written to my colleagues in the provinces.


John R. Rodriguez: Not good enough.


William Hunter (Bill) McKnight: I have discussed personally with them any assistance they may require in interpreting the ILO study mission's findings last year.


ENVIRONMENTAL AFFAIRS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is directed to the Minister of the Environment. While regrettably the Prime Minister is coming home empty handed-


Some Hon. Members:: Oh, oh!


An Hon. Member:: Open your eyes.


Mr. Crosbie:: You're empty headed.


Mr. Speaker:: Order, please. Just the question, please.


Mr. Caccia:: It is reminiscent of the emperor's clothes. He is coming home empty handed, with no acid rain cuts, no program, and no timetable for emission controls, as the Minister will agree. We have agreed to wait for another five years of research. What will the Government do in the meantime to cut the 26 million tonnes a year of S02 coming across the border?


Thomas Michael McMillan: Mr. Speaker, if Moses came down from the mountain and put the Ten Commandments on that table, the Member for Davenport would complain that not enough was done.
Ora! Questions


Some Hon. Members:: Hear, hear!


Thomas Michael McMillan: Since 1980, when the Hon. Member's Party was in government, until now, absolutely nothing was done by Canada and the United States jointly to move even an inch on the acid rain problem. Now we have the head of the United States Government accepting that acid rain is serious in both countries, and serious because it is a trans-boundary problem. He has committed himself to bilateral mechanisms to ensure that acid rain is not just a one-summit wonder. Furthermore, he committed himself to hundreds of millions of dollars of cash to abate acid rain in the United States.


Mr. Speaker:: Order.


Thomas Michael McMillan: That is more than the Hon. Member's Party did.


Some Hon. Members:: Hear, hear!


Charles L. Caccia: We all know the adage that when you are on the defence you go on the attack.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order. Is it possible that everyone can cooperate to keep the noise level down today? The Hon. Member for Davenport.


PRIME MINISTER'S DISCUSSIONS WITH UNITED STATES PRESIDENT
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my supplementary question is very simple, and I hope the Minister will reply to it. Will the Minister agree hat we have lost one year waiting for this envoys' report and now are locked in for another five years of research without any cuts being admitted, accepted, or implemented by the United States administration? Why was the Prime Minister such a chicken?


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Thomas Michael McMillan: Mr. Speaker, I do not go on the attack when I am on the defence; I go on the attack when I have a weak target.


Some Hon. Members:: Hear, hear!


Thomas Michael McMillan: The Prime Minister has achieved a real triumph on behalf of Canadians and 1 suggest that, instead of being a bad news-boy, the Hon. Member should join other Canadians across the country in rejoicing over a major Canadian accomplishment. We have a commitment by the President of the United States to spend hundreds of millions of dollars, not on more research, not on more development-


Mr. Speaker:: Order.


Some Hon. Members:: Hear, hear! More, more!


Sheila Maureen Copps: Add some time on to Question Period.

March 19, 1986
Oral Questions


Mr. Gray (Windsor West):: Take away one of their questions.


Mr. Speaker:: Is everyone now ready for more questions?


Mr. Rossi:: Tell them.


Mr. Speaker:: Order, please.


Carlo Rossi: Why don't you tell them?


Mr. Speaker:: Order, please.


Carlo Rossi: They are overdoing it, not us.


Mr. Speaker:: Order, please. Everyone. The Hon. Member for Winnipeg-Birds Hill.


ABATEMENT PROGRAM INQUIRY
William Alexander (Bill) Blaikie: Mr. Speaker, my question is directed to the Hon. Minister of the Environment. Is he telling the House that the President has agreed not only to research, not only to endorse the Lewis-Davis report, but has agreed to an actual abatement program in the United States, with timetables for reductions of acid rain depositions? Is that what he is telling us?


Thomas Michael McMillan: Mr. Speaker, I suggest that the Hon. Member read the report of the Canada-U.S. envoys which the President of the United States fully endorsed today.
The report reads:
In short, although the primary purpose of this ... program is to demonstrate the kinds of technologies that would be needed for any future acid rain control program, it should also result in some near-term reductions in U.S. air emissions that affect Canadian ecosystems.
It is there in black and white. Read it.


ENVOYS' REPORT
William Alexander (Bill) Blaikie: Mr. Speaker, if the President has not gone beyond the report itself, then that is clearly not enough.
Will the Minister say on behalf of the Government that, in spite of the endorsement by the President, the Government will push the Americans to go beyond that report, both in Congress and in subsequent administrations, to do more than what is obviously going to be done within the context of the envoys' report? The Minister himself has said that would not be enough.


Thomas Michael McMillan: Yes, Mr. Speaker, that is implicit in everything that was said by the President and the Prime Minister today. For example, they have established bilateral mechanisms to do the very thing that the Hon. Member has recommended. This is not the end of the road; it is the beginning.


INTERNATIONAL LABOUR ORGANIZATION
Sheila Maureen Copps: Mr. Speaker, all I can say is that it is a good thing we only have the blarney summit once a year.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order.


An Hon. Member:: That's unparliamentary.


Mr. Speaker:: Order. The Hon. Member for Hamilton East on a question.


Sheila Maureen Copps: My question is directed to the Minister of Labour. He made an incredible admission in the House today when he said: "I didn't sign the agreement". Is he saying that all ILO conventions signed by previous Governments of Canada are no longer valid?


William Hunter (Bill) McKnight: Mr. Speaker, I presume I would not have to explain that to the Hon. Member. 1 said, in reply to a question from an NDP member who stated that the provinces agreed and concurred with the signature of the federal Government, that I and this Government did not sign it. I could not say whether the provinces concurred with the signing of that ILO accord.
I want to inform the Hon. Member that the Government and this Minister have acted in accordance with the ILO rules and regulations. The ILO itself and Director General Blanchard recognize the division of responsibilities between the federal and provincial Governments in this country better than the Hon. Member does.


Mr. Speaker:: Order. The answer is getting long.


NEWFOUNDLAND LABOUR DISPUTE
Sheila Maureen Copps: The Minister is putting into question the very existence of ILO agreements that have a history in this country dating back decades. Does he not believe that the Government's signature on the ILO convention means anything? If he does, why does he not follow the advice of the ILO and meet with Mr. Peckford to resolve the situation in favour of the workers of Newfoundland, as suggested by the ILO?


William Hunter (Bill) McKnight: Mr. Speaker, the Hon. Member, in her last statement, made the suggestion that the ILO requested that the Minister of Labour meet with the Premier of the Province of Newfoundland. That is absolutely untrue. What this Minister has done was to communicate to the Province of Newfoundland on two separate occasions, one as late as yesterday. I have discussed with the CLC whether there is any optimism on its part that the good offices of either
March 19, 1986

the federal Government or the Minister of Labour could be used in settling this dispute.
The Hon. Member should know that one can have a party, but unless the invitations are accepted it is not much of a party.


MINISTER OF STATE (YOUTH) STATEMENT ALLEGEDLY MADE BY MINISTER ON HUNGER STRIKE OF SENATOR JACQUES HEBERT
Howard Douglas McCurdy: Mr. Speaker, my question is directed to the Minister of State (Youth), who stated yesterday that Senator Hebert's gesture was a very poor example for the young people of this country.
Whatever we may think of hunger strikes, what kind of example would the Minister prefer: an example that shows courage and a true commitment to young people, or the dishonesty of someone who abused her authority by acting as a recruitment officer for a political party-


Mr. Speaker:: Order, please. The Hon. Member knows that part of his question was inappropriate and I must ask him to withdraw it, judging by what I heard. 1 must ask him to withdraw the part about "dishonesty".


Mr. Hnatyshyn:: Ask him to repeat the question in English.


John Edward Broadbent: So Ray will understand.


Mr. Speaker:: Order, please. Could the front benches please come to order? I must ask the Hon. Member to withdraw his comments about the Minister being dishonest.


Howard Douglas McCurdy: I agree, Mr. Speaker.


Mr. Speaker:: The Hon. Member for Kootenay West.


CENTRAL MORTGAGE AND HOUSING CORPORATION
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, my question is directed to the Minister responsible for Canada Mortgage and Housing. In the past 12 months Cominco Limited in Trail, British Columbia, has been forced to lay off about 800 employees. One result of these lay-offs is that some banks have not accepted, or are now considering not to accept any new mortgages unless they are CMHC approved. Will the Minister reassure home owners in single-industry towns that they will
Oral Questions
not be subject to this arbitrary action taken by the banks? And may I ask the Minister what action he can take to prevent this?


William Hunter (Bill) McKnight: Mr. Speaker, the mortgage insurance provided by CMHC to high ratio mortgages, to the best of my knowledge will continue to be provided to the areas to which the Hon. Member refers, Revel-stoke and Trail, British Columbia.
I should tell the Hon. Member and the financial institutions of Canada that CMHC is presently reviewing its mortgage insurance because at the present time it appears that the beneficiaries of that mortgage insurance happen to be the financial institutions with 100 per cent guarantees for their loans. As to the concerns of individuals who may be having difficulty, CMHC will be as flexible as possible and we will suggest to the financial institutions that they take that into effect in the same manner as CMHC.


UNEMPLOYMENT INSURANCE
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Minister of Employment and Immigration. On March 5 and March 6 1 asked the Minister if the Peat Marwick investigation, which she appointed, would cover her role and the role of her personal staff in the illegal release of unemployment insurance information. At that time she did not answer my question. Now that there have been allegations of shredding in her office, will the Minister tell the House who has been appointed to carry out that investigation? And will the investigator cover the role played by the Minister and her personal staff?
Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, I can assure the Hon. Member that there is no shredding going on in my office. I would also like to say to the Hon. Member that all documents which have been returned from Peat Marwick are intact. They are in safe storage and available to the Privacy Commissioner who is, indeed, carrying out this investigation.


INVESTIGATION BY PRIVACY COMMISSIONER
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my supplementary question is directed to the Minister of Justice, who is the Minister designated with respect to the Privacy Act. Could the Minister tell the House whether the investigation carried on by the Privacy Commissioner covers the role played by the Minister of Employment and Immigration and her personal staff, and whether the Privacy Commissioner will also investigate any allegations of shredding in the Minister's office?
[Stage Direction]
March 19, 1986
Oral Questions
John Carnell Crosbie: Mr. Speaker, I think the hon. gentleman understands that the Privacy Commissioner does not report except through the Minister of Justice to this House, so I have no way of knowing at the moment exactly what the Privacy Commissioner is investigating. But 1 can make an inquiry for the Hon. Member if he is really serious and wants the information.


INSTITUTIONAL TRAINING PROGRAM
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. The Minister keeps trying to tell us how much her Government has done for youth, so will she tell us today why she has instituted a 40 per cent cut in institutional training at community colleges over the next three years? And will she indicate how such a cut will help the young people of our communities?


Flora Isabel MacDonald: Mr. Speaker, 1 am delighted to answer the Hon. Member. I can say that this Government is doing more in the field of training than any previous Government.


John Carnell Crosbie: Right on. They will never learn.


Flora Isabel MacDonald: The funding which comes under the Canadian Jobs Strategy is now also available for the training of young people. That is taking place in project after project across the country. There are 9,000 young people presently involved in one single program alone, the Job Entry Program, which allows for young people who have not had those training opportunities previously, those people who are disadvantaged and who have-


Mr. Speaker:: Order.


Flora Isabel MacDonald: I would love to speak longer about that issue.


STATEMENT MADE BY NOVA SCOTIAN MINISTER
Iain Francis Angus: Mr. Speaker, will the Minister then explain why the Nova Scotia Minister for Skills Development told his Legislature on March 11 that the federal Government was cutting its international training by 10 per cent this year, 15 per cent next year, and 20 per cent the following year? Or is the Minister saying he was lying to his Legislature?


Flora Isabel MacDonald: Mr. Speaker, that question shows the Hon. Member's complete lack of understanding of what is going on. I will explain it to him step by step. Yes, there is institutional training and that will be continued. But there is now also
access to training under the $900 million Canadian Jobs Strategy, and which was not available before. So Nova Scotia will be able to acquire more training for its students as, for instance, it is doing for black youth, as it is doing with young people in Sydney right at the present time, and as it is doing with project after project-


Mr. Speaker:: Order, please.


Flora Isabel MacDonald: -throughout Nova Scotia and elsewhere.


Mr. Speaker:: Order. The answer is becoming long.


AIRPORTS
Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, my question is directed to the Minister of Transport. The future of Montreal's airports, especially Mirabel, is in a way closely connected to the conclusions that the Advisory Committee on this question is about to disclose in its final report.
Could the Minister inform the House today exactly when the report will be released and whether our regional organizations, such as the Committee to promote Mirabel Airport, will be able to report to the Minister through a standing committee of the House of Commons?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, I cannot give the Hon. Member a precise date. 1 have not as yet received a report. My understanding is that it will be presented to me some time in April or May. Of course I will take the Hon. Member's representation into consideration, that being her suggestion that it be referred to the standing committee.


NORTH AMERICAN AIR DEFENCE COMMAND
Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Media reports today state that Washington issued a statement to allay Canadian concerns about their adherence to the Anti-Ballistic Missile Treaty of 1972. Why would Washington and Ottawa not simply reinstate the ABM clause in the signed NORAD agreement itself in order to allay the concerns of Canadians?


Charles Joseph Clark: Mr. Speaker, the Hon. Member, of course, is a
March 19, 1986

member of a Party which took that clause out. It was one of the actions it took that, in fact, made sense because circumstances had changed. There was, however, a concern in Canada about the integrity of the ABM Treaty. It was precisely for that reason that, at the summit meeting in Washington, the Prime Minister of Canada secured from the President of the United States an explicit underlining to the United States of the importance of full compliance with the ABM Treaty and other existing arms control obligations.


GOVERNMENT POSITION
Leonard Donald Hopkins: Mr. Speaker, my supplementary question is directed to the same Minister. Does the Minister not realize that by refusing to put the ABM clause back into the NORAD agreement, the return of which would simply protect Canada from becoming involved in active ballistic missile defences except on the Government's own decision, the Government is showing that it is not serious enough about its commitment to put that commitment in writing in the signed NORAD agreement?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, the Hon. Member was right the first time when he supported the action taken by the Liberal Government to remove that particular clause from the treaty.
The point that needs to be underlined now, because there is concern in the country, whether legitimate or not, about the integrity of the ABM treaty, is that in full recognition of that concern the Prime Minister of Canada deliberately sought and successfully achieved an assertion from the President of the United States of the fundamental importance of the integrity of the ABM treaty. That should reassure any doubts that might exist, in the mind of the Hon. Member, or elsewhere in the country.


EMPLOYMENT
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Is she aware that, as a result of the federal Government's spending freeze, important job-development and Section 38 programs have been stalled and virtually curtailed, and important jobs are not being developed?


Flora Isabel MacDonald: Mr. Speaker, some 160,000 Canadians have benefited from the Canadian Jobs Strategy in the first six months of its operation. That is an excellent record. I can assure the Hon. Member that the freeze has not affected the programs of this Department. If there is a specific area in question, it may be that the regional allocation to that area has already been used up. I will look into the question with regard to the Hon. Member's area and report back to him.
Oral Questions


EXPENDITURE OF ALLOCATED FUNDS
Nelson Andrew Riis: Mr. Speaker, I can guarantee that allocations have not been used up and that ample funds are available. I want her to assure us that where the freeze has actually curtailed or stalled Section 38 and job-development programs, the freeze will no longer stall those programs, and those funds will be loosened up so that we may start creating much needed jobs, particularly in the hard pressed areas of Canada.


Flora Isabel MacDonald: Mr. Speaker, projects, both under Section 38 and under the Canadian Jobs Strategy, are being approved every day. I have assured the Hon. Member that if there is a specific problem with regard to his area, I will look into it.


ABORIGINAL RIGHTS
Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. As the Minister knows, the Coolican report on comprehensive native claims policy was released this morning. It urges the Government to get on with the job of settling these outstanding claims, and it takes a position different from the position taken by the Nielsen task force which indicates that the process should be deferred. Will the Minister endorse, accept, and support Coolican, and reject Nielsen?


An Hon. Member:: Now you're in trouble.


Hon. David Crombie (Minister of Indian Affairs and Northern Development):: Mr. Speaker, if life were that simple, we would all be in trouble. Quite clearly, the Nielsen task force recommendations are before the Standing Committee and any views that any Member has may be made known to the committee.
With respect to my own responsibility regarding the so-called Coolican task force which I commissioned, the report will be tabled today at the conclusion of Question Period. I have already indicated, as I think the Hon. Member well knows, that there will be some weeks of public discussion. It is my intention to take recommendations forward to Cabinet by June following that public discussion.


EXTINGUISHMENT OF RIGHTS
B. Keith Penner: Mr. Speaker, my supplementary question is directed to the Minister of Justice. Is the Minister now prepared to tell the House that he can accept the recommendation of Coolican that the blanket extinguishment of aboriginal rights will no longer be a precondition for the settlement of a successful comprehensive native claim?

March 19, 1986
Oral Questions


John Carnell Crosbie: Mr. Speaker, I can certainly repeat to the Hon. Member the assurances given to him by my colleague, the Minister of Indian Affairs and Northern Development. He was spot on. Led by the Deputy Prime Minister and the Prime Minister, we will come to a consensus without too much time passing. We will then announce it to the hon. gentleman and I am sure he will be happy with it when the time comes.


FINANCE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Finance. I would like to ask him about the phasing out of the investment tax credit for farmers contained in his Budget, a measure which will take about $150 million per year from Canadian farmers and approximately $50 million per year from Saskatchewan farmers. Why did the Minister eliminate the investment tax credit for farmers without replacing it with some equivalent tax benefit?


Michael Holcombe Wilson: Mr. Speaker, if the Hon. Member thinks back, he will realize that what he said is not true. We have provided farmers with an immediate lifetime capital gains tax exemption of up to $500,000. That happens immediately for farmers, while for other individuals it will be phased in over a four or five-year period. I would also draw to his attention the fact that we have put in a very major program to assist those farmers who are in trouble with major debt loads and, as well, we have extended the farm fuel tax rebate for another year. Those are three very important measures that are helping farmers-


Mr. Speaker:: Order, please.


GOVERNMENT POLICY
Lorne Edmund Nystrom: Mr. Speaker, for one of those measures to help, the farmer must quit farming. What Saskatchewan farmers want to know is why he did not bring forward an equivalent tax benefit that would be worth the $50 million per year that they will lose because of the elimination of the investment tax credit.


Michael Holcombe Wilson: Mr. Speaker, first the Hon. Member is way, way out of line as far as the numbers are concerned. Second, the capital gains tax exemption starts this year, 1986, only for farmers and not for other investors. For other investors it will be phased in over a long period of time.


FERRIES
Mr. Pat Binns (Cardigan):: Mr. Speaker, my question is directed to the Minister of Transport and is with regard to the service provided by Northumberland Ferries Ltd. between Prince Edward Island and Nova Scotia. It is extremely important to our economy that this service commence operations when the ice goes out of the Northumberland Strait. Can the Minister assure the House that his Department will negotiate the earliest possible start-up date rather than use a fixed date which does not reflect local needs?


Donald Frank Mazankowski: Mr. Speaker, as the Hon. Member knows, the date of May 1 was selected after very thoughtful and careful consideration, and in an attempt to provide some degree of certainty. If there are indeed some extenuating or compelling reasons to start service earlier, I would certainly be prepared to entertain them considering the recommendations made by the Hon. Member.


SOCIAL SECURITY
Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, my question is for the Minister of Finance. In the review of the eligibility for social programs that he is contemplating in the next year, is he now telling Canadian citizens that, in addition to a tax increase next year, they can look forward to a tax back for those above a certain level of income?


Michael Holcombe Wilson: No, Mr. Speaker, I think the Hon. Member is jumping to conclusions. If he has any suggestions, though, on how he feels we should proceed with this review using the four principles that I have established, I would be very pleased to hear his suggestions or those of any of his colleagues.


POSSIBLE EFFECT ON UPPER-INCOME GROUPS
Douglas Cockburn Frith: Mr. Speaker, does the Minister of Finance not agree that with the four principles upon which he is going to rest his review of social programs, he leaves open the possibility of tax or a drawback on those with incomes above certain levels?


Michael Holcombe Wilson: Mr. Speaker, again 1 encourage the Hon. Member not to jump to any conclusions. The whole purpose for raising this matter in the Budget at this time is to allow for a full year of reasonable debate so that we could understand the various elements of this particular matter and then come to the House of Commons at budget time next year with some specific proposals. 1 encourage the Hon. Member to participate in this debate in a reasonable, objective way, rather then jumping to fast conclusions and getting things way off track.
March 19, 1986


DETERMINATION OF INITIAL PRICES
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is for the Minister of State for the Wheat Board. The Minister knows that the loan rates set by the U.S. Farm Bill will likely drive the prices of grain down by 30 per cent. In view of the serious financial situation faced by the farm community, would the Minister consider establishing the initial prices of grain at 90 per cent of the world price in order to alleviate the cash flow problems of farmers?


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, the Hon. Member raises a very serious situation as far as Canadian grain producers are concerned. He should know that presently the Government is going through the exercise of setting initial prices. We are looking at several things in order to show as much support as we can for prairie and other grain farmers. We will be going everything we can to keep them as high as we can, including looking at setting initial prices higher than normal in line with the intent of the question asked by the Hon. Member.


POINT OF ORDER
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, a while ago you were kind enough to bring before the House some good suggestions and guidelines regarding Question Period which have been useful to us. I need some clarification. I should like the Chair to review the "blues", and I will be doing the same, with regard to what happened when the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) rose in his place today to ask a supplementary question. He started by using a very short one-liner. At that point the Chair said that the Member was not allowed to say what he had said, if my memory serves me well.
All that I heard the Member say was that the Pontius Pilate routine was not amusing. 1 think these words are far from being unparliamentary. If a short one-liner is allowed before a supplementary question, certainly a seven-word one-liner is not a long one. I ask the Chair to review what happened and to provide us with more guidelines which we need, because I thought my colleague had acted properly.


Mr. Speaker:: Order, please. I would be happy to review the decision which I reached on the spot; if the Hon. Member is asking me to do that, I would be happy to do so. The Hon. Member knows that the Chair has some concerns about what language is used in this place. While things may not be so unparliamentary as to require withdrawal, I think Hon. Members know that there are also times-and, for instance, the other day I took the same action with regard to a comment by a Minister-when those kinds of comments about people as
Business of the House
opposed to actions move us closer toward something which is unparliamentary. That is the only reason 1 asked the Hon. Member to proceed right to his question. The Hon. Member has asked me to review what was said, and 1 will do that.


Brian Vincent Tobin: Mr. Speaker-


Mr. Speaker:: Order, please. The Hon. Member for Saint-Jacques (Mr. Guilbault) asked me to review it, and 1 am happy to do it.


Brian Vincent Tobin: I am just trying to be helpful.


Mr. Speaker:: The Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin).


Brian Vincent Tobin: Mr. Speaker, in the interests of being helpful, 1 want to make clear that I talked about a Pontius Pilate routine. Those were the words, and when you review the "blues", you will find them-


Mr. Speaker:: Order, please.


Jacques Guilbault: Mr. Speaker, I rise on the same point of order. I am thankful that the Chair said it is willing to review the "blues". At the same time 1 should like the Chair to think of the right of a Member being able to rise in his place and ask a question which is not outside our rules, and not being interrupted while doing so. 1 would like the Chair to consider this at the same time.


Mr. Speaker:: I am not quite sure what the Hon. Member is asking the Chair to consider. Perhaps he would like to be more specific.


Jacques Guilbault: Mr. Speaker, I can repeat what I said. While the Chair is reviewing the "blues" to determine whether what my hon. colleague said was acceptable or not, I ask it to consider the effect of interruptions on interventions by Members unless they are clearly out of order.


Mr. Speaker:: Order, please. 1 rose because it seemed to me that it was improper language. That is exactly why 1 did it. I will continue to do that if I think that something improper has taken place.


Some Hon. Members:: Hear, hear!


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, 1 rise in order to confirm discussions which I had with opposition House Leaders in respect of the business for tomorrow. I should like to designate tomorrow as the sixth allotted day in this trimester.

March 19, 1986
Tabling of Documents



ROUTINE PROCEEDINGS


Ramon John Hnatyshyn: Mr. Speaker, I am pleased to table in both official languages an amended version of Order in Council No. 1986-602 which was originally tabled yesterday.
Pursuant to the provisions of Standing Order 103(1), this Order in Council stands referred to the Standing Committee on Communications and Culture.


INDIAN AFFAIRS
David Edward Crombie: Mr. Speaker, pursuant to the provisions of Standing Order 67(2), I have the honour to lay upon the table, in both official languages, the report entitled "Living Treaties and Lasting Agreements", the report of the task force review conference of claims policy.


INTERPARLIAMENTARY DELEGATION
Hon. Lloyd R. Crouse (South Shore):: Mr. Speaker, pursuant to the provisions of Standing Order 101,1 have the honour to present to the House the report of the visit of the Commonwealth Parliamentary Delegation to Southeast Asia, in both official languages.


INTERNATIONAL ASSOCIATION OF FRENCH SPEAKING PARLIAMENTARIANS
Mr. Gilles Bernier (Beauce):: Mr. Speaker, pursuant to Standing Order 101,1 have to honour to present to the House, in both official languages, the first report of the Canadian section of the International Association of French speaking parliamentarians which sent a delegate with the mission to Sahel in Africa last week.
[Editor's Note: For above reports, see today's Votes and Proceedings.]


PETITIONS
Sergio Marchi: Mr. Speaker, I have the pleasure to present a number of petitions from the cities of Ottawa, Toronto and Montreal. These petitions are signed by hundreds upon hundreds of young Canadians who urge the Government to reinstate the Katimavik program at a time when its strength and conviction is most dearly needed.


Carlo Rossi: Mr. Speaker, I am pleased to present a petition signed by residents of Longueuil, the riding of Louis-Hebert, and others from Montreal. They urge the Government to reconsider its decision to end the Katimavik program which has enabled young people to get better acquainted with their country and its linguistic and cultural heritage. As in duty bound your petitioners ever pray.


Jean-Robert Gauthier: Mr. Speaker, I have the honour to present two petitions urging the Government to reconsider its decision to end the Katimavik program. 1 also have the honour to present another petition-

It asks the Government to reconsider its decision to stop full funding of Katimavik and to reinstate that program for the young people of Canada, and it supports Senator Hebert and his work.
[ Translation]


John Napier Turner: Mr. Speaker, I have the honour to present a petition from a few residents of eastern Ontario and western Quebec in support of the re-instatement of the Katimavik program.


Mr. Ken James (Sarnia-Lambton):: Mr. Speaker, I have the honour to present to the House a certified petition on behalf of residents of the riding of Sarnia-Lambton. My constituents are protesting the continued operation of the Morgentaler Clinic in the City of Toronto, for the stated purpose of performing unlawful abortions as an affront to law-abiding citizens of the country.


Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, it is my responsibility to present two properly certified petitions. One concerns Dr. Morgentaler and the other concerns gas prices. Some of the petitioners are from my constituency.


Mr. Murray Cardiff (Huron-Bruce):: Mr. Speaker, I have the honour to present a petition signed by several residents of the riding of Huron-Bruce protesting the continued operation
March 19, 1986

of the Morgentaler Clinic in the City of Toronto in violation of Section 251 of the Criminal Code.


Raymond Garneau: Mr. Speaker, 1 wish to table three petitions. The first comes from citizens of the Ottawa region, the second from the south shore of Montreal, the third also from the Ottawa region and from the Outaouais region. All these petitioners ask for the re-establishment of the Katimavik program and support Senator Hebert in his endeavour.


Hon. Andre Ouellet (Papineau):: Mr. Speaker, I should like to present three petitions. The first comes from New Brunswick residents and a few constituents of the Province of Quebec; the second is from residents of the Ottawa region; the third comes from residents of the National Capital Region. All these petitioners urge the Government to reconsider its decision concerning the Katimavik program and to support Senator Hebert in his courageous fast.


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, I have the honour to present five petitions from the residents of San Josef and Holberg, British Columbia, who are retired members of the Armed Forces. They wish to protest the Government's cancellation of unemployment insurance benefits for retiring members of the Armed Forces and to protest additionally the requirement to pay continued unemployment insurance premiums while working and receiving Armed Forces pensions.


Mr. Dennis H. Cochrane (Moncton):: Mr. Speaker, I have the honour to present a number of certified petitions signed by a number of residents throughout Atlantic Canada expressing their concern with regard to the future in the shops located in Moncton.


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, 1 have the honour of presenting a petition from a vast number of residents of the riding of Gatineau, who humbly pray the House and the Government to reconsider and to reinstate the Katimavik Program.
I have another petition with a large number of signatures, Mr. Speaker, both from the riding of Gatineau and from the
Petitions
riding of Champlain, in which Parliament is asked to reconsider the termination of Katimavik.


Jacques Guilbault: Mr. Speaker, 1 have two petitions to present to the House. The first one is from people in the Ottawa area, who maintain that Katimavik was a success, and that in their opinion, the decision to terminate the program should be reconsidered. These people support Senator Hebert and his hunger strike aimed at making the Government reconsider its decision.

I have another petition from people in various cities in the Provinces of Ontario and Quebec. They call themselves the friends of Katimavik and say that the Government's decision to cancel the youth program, Katimavik, is a short-sighted budgetary measure at the expense of Canadian youth. They urge the Government to re-instate with full funding the Katimavik program for the young people of Canada.


Mr. A. H. Harry Brightwell (Perth):: Mr. Speaker, I have the honour to present three petitions certified from the people of my riding of Perth claiming that the operation of the Morgantaler clinic in Toronto is an affront to those people and they wish this Parliament to take influence in the matter.
[ Translation]


Miss Aideen Nicholson (Trinity):: Mr. Speaker, I have the honour of presenting several petitions signed by Toronto citizens who are asking the Government of Canada to re-instate full indexation of family allowances.

1 may add that many of the signatures are from the riding of the Minister of Finance (Mr. Wilson), (Etobicoke Centre).


B. Keith Penner: Mr. Speaker, I have a petition addressed to the honourable House of Commons of Canada, in Parliament assembled. This petition from Gatineau asks that the decision to terminate the Katimavik Program be reconsidered.


Sheila Maureen Copps: Mr. Speaker, I also have a petition addressed to the honourable House of Commons of Canada, in which the Government, considering that Katimavik was a success, both as a means of training 20,000 young people who took part in the program over the last decade and as a means of carrying out important community projects, reverse its decision to cancel this excellent program.

March 19, 1986
Petitions


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I would like to present a petition signed by many people from the provinces of Quebec and Ontario, which says that Katimavik was a great success and is asking for the decision to terminate Katimavik to be reconsidered.


Mr. Alain Tardif (Richmond-Wolfe):: 1 join my colleagues, Mr. Speaker in presenting a petition signed by a number of people from various ridings throughout Canada. Those petitioners also ask for the re-establishment of the Katimavik program, and they express support and sympathy for Senator Hebert.


Mr. Gaston Isabelle (Hull-Aylmer):: Mr. Speaker, I also have two petitions to present to the Hon. the House of Commons of Canada. They originate from the ridings of Gatineau, of Hull-Aylmer, from ridings of the Ottawa region and from other regions of Ontario, and the petitioners ask that the Katimavik program be maintained because it has been an unqualified success.


Mr. John Nunziata (York South-Weston):: I am proud and honoured to present to the House a number of petitions signed by residents in Toronto, Scarborough, Ottawa, London, Nepean, Red Deer, Montreal, Kanata and other constituencies in Canada protesting the Government's short-sighted decision to end the Katimavik program. The petitioners request the Parliament of Canada to restore full funding to that very worthwhile project which benefited thousands of young people in this country.


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, I have a petition from Ottawa residents which is in order and is certified. The petitioners humbly pray and call upon this House to reinstate with full funding the Katimavik program for the young people of Canada.


Howard Douglas McCurdy: Mr. Speaker, I am pleased to present a few petitions signed by 25,000 Windsor residents.

I have 100 petitions bearing 2,500 signatures obtained by and from young people at the following high schools: Assumption, Brennan, Centennial, Forester, Hands, Herman, Kennedy, L'essore, Lowe, Masey, Monarch, Riverside, Shawnee, St. Annes and Walkerville, St. Clair College and the University of Windsor. And that is just the beginning, Mr. Speaker. These petitioners wish the reinstatement of Katimavik.
I also have several petitions from Ottawa asking for the reinstatement of Katimavik.
I have a further 101 signatures on several petitions from small towns in southwestern Ontario, near Windsor, asking for the reinstatement of Karimavik.
I have 400 signatures from Halifax, Nova Scotia demanding the reinstatement of Katimavik.
I have a further set of petitions from Saskatoon, Saskatchewan demanding the reinstatement of Katimavik. And from Brandon, Manitoba, I have one more petition demanding the re-instatement of Katimavik.


Mr. Speaker:: May I say perhaps what I should have said at the beginning that I am assuming all Members are presenting only certified petitions. 1 hope.

[ Translation]


QUESTIONS ON THE ORDER PAPER
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: I ask, Mr. Speaker, that all questions be allowed to stand.


Mr. Speaker:: Is the House agreed?


Some Hon. Members:: Agreed.
[DOT] * *


Philip Derek Lewis: Mr. Speaker, 1 ask that all notice of motions for the production of papers may be allowed to stand.


Mr. Speaker:: Shall all notices of motions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
ALLOTTED DAY, S O. 82-ENERGY-FALLING WORLD PRICES Mr. Russell MacLellan (Cape Breton-The Sydneys) moved:
That this House regrets that the Government's energy policy has proven to be disastrous for both the industry and the consumer in its failure to give the consumer the benefit of falling world energy prices and in its confusion and lack of direction, creating uncertainty for the oil and gas industry in the face of the Government's inability to cope with changing international conditions and its refusal to fulfil its commitments.
He said: Mr. Speaker, it is a shame that we had to move this motion, but the situation in the energy industry leaves us no alternative. It is becoming chaotic. The policy of the Government is benefiting no one, except perhaps the integrated oil
March 19, 1986
[Stage Direction]
companies. The policy of the Government is not benefiting the consumer, the producer, or the independent retailer.
There were drastic price reductions in world oil in January. These reductions have not been passed on to the consumer at the pumps. There were two price declines at the pump which are not, in any sense of the word, adequate for the consumers of the country. Consumers are being gouged. The first price decline of 2 cents a litre was only at the pump and not in the wholesale price. Therefore, independent retailers had to take 2 cents a litre off their profit margin in order to remain competitive. Independent retailers did not benefit from this first price decline which came grudgingly from the industry at the reluctant urging of the Government. Through the policy of the Government independent retailers are being squeezed by the large integrated oil companies to the extent that they may not be able to remain in business.
At the forefront of this policy is Petro-Canada. Petro-Canada's wholesale price to retailers in the United States is 4 to 6 cents a litre cheaper than it is to retailers in Canada. The people's own oil company is selling gasoline in the United States cheaper at the wholesale level than it is selling it to its own retailers in Canada.
With regard to producers, all Canadian-produced crude used in domestic markets has been undervalued since early January of 1986 by between $4 and $6 Canadian a barrel. That is because the integrated oil companies switched from a west Texas intermediate posted price to a west Texas intermediate spot price. The lowest possible price which could be paid for crude oil in the world is being paid by Petro-Canada to producers in western Canada. This is tragic at this time while we are trying to safeguard and foster this industry in an attempt to keep together what we have achieved in this country in relation to production and security of supply.
Canadian producers are losing up to $6.6 million a day based on deliveries to domestic markets of 1.1 million barrels per day. The 1.1 million barrels per day produced in western Canada amounts to nearly 80 per cent of Canada's total crude consumption of 1.4 million barrels per day, the rest being sold as imports, mainly to the United States. This 1.1 million barrels per day represents 85 per cent of Canada's total crude production of 1.7 million barrels per day.
What is all this nonsense the Government has been telling us about prices not being able to go down until it flows through the system? Eighty per cent of our oil comes from western Canada and is refined in the country. Still, there have only been two measly reductions at the pump and consumers continue to be gouged by an artificially high price. Producers are being gouged by being paid the lowest price for crude oil in the world. This is being done by the people's own oil company, Petro-Canada.
The price is being kept artificially high. Petro-Canada has done nothing for prices. It has not led price declines in the country. The first price decline was 1 cent per litre by Imperial Oil. The next day Petro-Canada followed with a 2 cent a litre reduction. The second reduction at the pumps was announced jointly by Imperial Oil and Petro-Canada. Petro-Canada is
Supply
keeping the price of gasoline artificially high and it is being aided and abetted by the Government. The Government need only call the president of Petro-Canada and tell him to start acting in the interests of the Canadian consumer. The result of this is that in January alone Canadians paid $302 million too much at the pumps for gasoline. That does not include the extra which they paid for heating oil and other petroleum products.
The United States has not had this problem. Their prices went down at the pumps when world oil prices went down. The prices at the pumps in the United States reflected the price of world oil and the fact that refined gasoline is a separate commodity from crude oil, the same as crude oil is separate from pork bellies. In Canada we have had to listen to all this nonsense about a flow-through period which has just been a con of the Canadian people.
This is all because the Government is changing the role of Petro-Canada. Petro-Canada was set up to explore and develop energy sources in the country and to establish a security of supply on which we could rely. Petro-Canada is no longer doing this. In fact, it is backing out of five wells off the East Coast of Canada. It is reducing its exploration and development budget. It is no longer a window on the market for Canadians. Consumers cannot rely on Petro-Canada to act on their behalf at all. Petro-Canada is being told by the Government to make money at all costs, to drive up its profits in order to present the best possible picture so its shares will draw the best possible price at a private share sale. This is not in the interest of consumers, but in the interest of serving the policy of the Government, which policy is not in the interest of Canadian consumers.
The philosophy has changed with respect to Petro-Canada and the people of the country realize it. At one time Petro-Canada was a source of pride. We could buy from our own oil company and get a fair deal. People wanted to do that. Now they look upon Petro-Canada as a gouger, a monster out of control causing problems in the country which have never been experienced before, at both the producer and consumer levels. All of this has been exacerbated by the Government's policy with regard to Petro-Canada to do nothing to help the producer or the consumer. If the Government's policy was to act in the best interests of the industry and the consumer, we would not have these problems in the country at this time.
Not only did the Government change its policy to act against Canadians, it also purchased the down-stream assets, the refining and marketing capability, of what was once Gulf Canada in Ontario and western Canada. Now they have such a large number of stations they control the marketing industry. They have consumers by the throat. Not only that. There are hundreds of producers but only four major refineries. There are smaller companies with maybe one refinery, but just four major refineries. They pay producers the lowest price and then gouge the consumers.
[Stage Direction]
March 19, 1986
Supply
What does all this mean? It means the Government has taken a good public-minded Crown corporation and turned it against Canadians. This party is diametrically opposed to using Petro-Canada to gouge the industry and consumer. Petro-Canada was set up for the benefit of the oil and gas industry as well as the consumer, not to act to their detriment.
Certainly the reduction in the price of oil will cause a reduction in oil exploration and development, the non-conventional sources in particular. It is not the industry that caused this cloud. It is the Government, through its jaundiced policies and crazed directions to Petro-Canada, which has caused the problem. It is the Government that backed away from the commitment to the Husky upgrader which was made by the former Government. Why? The Government says it is worried about world oil prices. It does not bother to consider for a minute the fact that when the upgrader is finished world oil prices will be higher. It does not consider for a minute that its own budget documents indicate the price of crude oil will be U.S. $22.50. Mind you, that is on page 23 of the document. On page 20 the Government says the price is going to be U.S. $23.88. On the one hand the Government says the price will average U.S. $22.50 this year, on the other hand it says it has to reconsider the Husky upgrader because of the price of oil. No wonder no one has any respect for this Government or its economic policies.
The Government is also applying retroactively regulations which have yet to be implemented under the Petroleum Incentives Program Act. As a result, Canadian companies, particularly Husky-Bow Valley, have been squeezed out of wells they wanted to drill on the east coast. Initially they wanted to drill 10 wells. The Government talked them into reducing that to seven. Then the Government, through the retroactive application of regulations which no one has seen officially, has reduced the number of wells to two. This is diabolical. The Government has also said that if Petro-Canada backs out of exploration it earned without cost through a back-in provision, the partner who replaces Petro-Canada will not receive funds under PIP for their interest.
Where are we going here? What is happening? Our energy policy is in shreds. Consumers are being taken advantage of completely, yet the Government is not moving. The industry even visited the Government yesterday to explain the dire situation facing them throughout Canada. The Government would not listen. The Minister is frozen to her deregulation switch. She is going to hold on for dear life. The industry is going to suffer regardless.
What is happening to the industry, and by that I mean primarily the small and medium oil companies? They are in a tremendously difficult position, teetering on the brink, because of the policies of this Government. They are ripe for bankruptcy or takeover by the multinational oil companies. They have proven reserves of oil and gas. The large oil companies are able to withstand this bad time because of their integrated nature. They realize the small companies are vulnerable, and if they wait until they become even more vulnerable they can pick up
their reserves for practically nothing. They can steal it out from underneath this country. That is a tragedy. Yet, how can you blame them?
The Government is saying to its own Crown corporation: You do the same thing. Petro-Canada led the price increases last fall but did not lead the price decreases this spring. The multinationals have a shield; they just follow behind Petro-Canada's gouging and they are safe from criticism because Petro-Canada is leading the way.
What is going to happen? Producers presently receive a rebate of 75 per cent of royalties due, up to $3 million. That is a provincial responsibility. Similarly, they are exempt from the PGRT up to the first $500,000. At the current rate of 10 per cent that means $5 million worth of oil and gas production is exempt. The Government should consider increasing this threshold in order to protect the small and medium producer. It should use this policy as a lever to force the producing provinces to reduce their royalties. It has to be done. This Government has to move because everyone is suffering; everyone except the integrated oil companies. This is tragic. There has never been such an injustice in Canadian commerce like the one being perpetrated by this Government. The time to review the policy is not in five months, the time is now. The Government has to act now on behalf of the industry and consumers. We should not sell our oil and gas to foreign countries for less than we pay for it in Canada. That is not commerce in the interests of the Canadian public. The consumer deserves better from this Government. The industry, which put faith in the Government, deserves much better.
The Acting Speaker (Mr. Friesen):: Are there questions or comments? The Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Mr. Waddell:: Mr. Speaker, perhaps I did not hear the Hon. Member correctly. He suggested that the Petroleum Gas Revenue Tax, which is a tax imposed on the industry and which will be phased out by the Government, will give a dramatic increase in revenues to the oil industry. 1 believe he said it had a threshold of $500,000 in terms of income and that the smaller companies do not have to pay this tax right now. He suggested that the threshold should be increased. In other words, smaller oil companies should not have to pay the tax.
This is a big issue right now. The Canadian Petroleum Association, the voice of big oil, has been pushing for the elimination of the PGRT. I know that such a move will benefit the big oil companies since they are the ones paying the tax. I think the Hon. Member has quite correctly pointed out that some small oil companies do not have to pay this tax while others which are small but not the smallest have to pay some. To what would the Hon. Member increase the threshold?


Russell Gregoire MacLellan: Mr. Speaker, that is a very good question posed by my friend, the Hon. Member for Vancouver-Kingsway (Mr. Waddell). I do not have a particular figure since 1 have not had an opportunity to thoroughly investigate the
March 19, 1986

matter. However, I will be having meetings next week with the express purpose of finding out exactly what threshold could best service the industry in order to protect Canadian companies which are now just hanging on by their fingernails.


Ian Gardiner Waddell: We in the New Democratic Party do not believe that the PGRT should be eliminated with respect to provincial royalties. We feel that is a provincial matter. The pressure is coming from the big oil companies which will be able to survive no matter to what level oil prices drop. They are integrated companies with a great number of assets. They will be able to ride out the storm. It is the small Canadian companies which are in real danger. As the Hon. Member has pointed out this may result in the elimination of the Canadian industry completely. It is the perfect time for big multinational oil companies to take over small Canadian companies.
What is the Hon. Member's position and that of his Party with respect to a floor price for oil, or with respect to a negotiated price for oil? I have always believed that the real problem has been created by the ups and downs. As a westerner, Mr. Speaker, you know about the boom-and-bust syndrome in Alberta. That most recent boom lasted only about three to six months. It seems to me that the bust part of the syndrome is now coming on. I would like to see this situation levelled out so that we can have continued growth in western Canada.
Do members of the Liberal Party believe that there should be some sort of negotiated price if the price of oil keeps dropping dramatically? It seems to me that getting rid of the PGRT would allow better benefits to flow to small Canadian companies. In other words, they would receive a livable price for their oil and they would not have to sell it all out now at fire-sale prices.


Russell Gregoire MacLellan: Mr. Speaker, first I would like to correct my hon. friend. I do not think he meant to say that we advocate doing away with the PGRT. What we are saying is that the threshold of $5 million should be raised in order to allow small and medium-sized Canadian companies to gain more benefits and relief from the PGRT. However, that would have to be linked to a commitment from the provinces of Alberta and Saskatchewan in order to reduce the royalties so that a further benefit could accrue. There is certainly no need to do away with the PGRT, as far as I can see, since it would be allowed to move into higher amounts. It would only affect the larger corporations which I feel are better able to weather the storm. At least that is the way it looks to me right now.
With respect to a floor price, the Liberal Party is not prepared to advocate the setting of a floor price at the present time. No one from the industry has come to my Party requesting that a floor price be set. We are not about to go out to the industry and suggest that a floor price be put in place when no one in the industry has come to us asking for such a price. Why would we do that? If we were to do that we would be saying to consumers that they will have to pay higher prices for gasoline while we are advocating that the price come down. We would be saying that consumers get the benefit of the world price reduction in crude oil. We would also be saying to
Supply
the business community, the manufacturers and the industries that they will have to pay more for oil for industrial purposes. This would be like saying to these groups that they must place themselves at a disadvantage with respect to competitors in other countries. We have not been asked to advocate a floor price. We see a definite downside to the imposition of such a price. We are certainly not advocating a floor price at this time.


Mr. Gagnon:: Mr. Speaker, I listened with interest to what the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) had to say. He talked about raising the Petroleum Gas Revenue Tax credit to a figure above $500,000. However, he did not have a specific figure in this respect. Perhaps the Hon. Member can tell us from where this money would come. Would there be some sort of a dip into the Treasury? Is the Hon. Member proposing to raise the debt?


Russell Gregoire MacLellan: Mr. Speaker, it would give me great pleasure to address the Hon. Member's question. There will be nothing more serious to the country than the loss of our oil and gas industry. I think there is a definite possibility that we will lose it. I think we are being very kind to the Saudi Arabians and other countries. Not only does price reduction mean that these countries will be able to compete with other producers, it means that conservation will be relaxed while consumption will be increased. It will also mean that synthetic oil projects will no longer be economically viable. We must be mindful of these points. We cannot throw away everything that we have worked for in light of the policies of this Government and the former Liberal Government. I refer to the Government's goal to achieve self-sufficiency and Canadianization. That cannot be thrown away.
If the Hon. Member is worried about the cost, and of course there is a relationship with respect to what will be most harmful to the country, then I say to him: Go to the industry and tell it we will relax this measure now but when prices increase again they will have to pay it back to the Government of Canada. That is perfectly fine with me, if that is what the Hon. Member wants to do.


Ian Gardiner Waddell: Mr. Speaker, 1 would like to make some comments on behalf of my Party. 1 will not speak extensively on this matter.
I wish to say that we are in a crisis situation. Canadians should not be smug, thinking of it as being just an Albertan problem because it is a Canadian problem as well. It is somewhat ironic that we are in a crisis when oil prices increase dramatically and that we are in a crisis when oil prices decrease dramatically. As I said before, that is all part of the boom-and-bust syndrome. This syndrome is incorporated into the Western Accord as we follow world prices. It is a situation we have to get out of in Canada. It is not doing the country any good, and it could devastate Alberta. Right now Alberta is like the Titanic. It has a big hole in the side as a result of lower world oil prices. The lifeboats and preservers have been thrown overboard. The Province does not want to use them because of ideological grounds. The party is still going on.
11670

March 19, 1986
Supply
Well, it has to come to an end at least. Perhaps that is somewhat unfair. Perhaps the party is grinding to a halt because of this recognition. We could face up to 40 per cent unemployment in Alberta if oil prices continue to drop. I saw the news at 11:30 this morning with respect to OPEC oil prices and they may, in fact, be stabilized now somewhat. However, I believe that is very doubtful because we are not sure what will happen. My Party believes that the way to protect the Alberta producer is to establish a temporary floor price until the market stabilizes.
The Minister accused us of living in a fantasy world because I and others have been leading advocates in the House for lowering the prices at the pumps. However, I suggest that is a different matter. The reason we are not seeing lower oil prices at the pumps is that our system is not competitive. There are a few companies, including Petro-Canada, that control the market and they are simply not quickly passing on the dramatically lower oil prices. In fact, at a time when the price at the pumps should be reduced by 10 cents a litre, these companies are creaming off profits.
The fact is that it could be a matter of Government policy to lower the prices at the pumps in order to benefit consumers, while being stabilized at the small producer level. However, nothing is being done and we are getting the worst of all possible worlds as a result of the so-called free market economy.
I was in Alberta and met with some small producers. They will be devastated by what is taking place in the Province of Alberta. Husky Oil, Petro-Canada, Suncor, Syncrude, Canadian Roxy, Sulpetro and Pembica Resources have formally announced lay-offs or staff cut-backs totalling 1,500. Ipso, the Regina-based steel maker, will eliminate 695 workers. The Canadian Association of Oilwell Drill Contractors predicts that 4,000 jobs will vanish in that sector this spring. Dome Petroleum has informed its bankers that it has no intention of making payments on its massive debt of $5.2 billion. We could face another banking crisis if Dome Petroleum goes under. The President of the 30,000 strong Petroleum Services Association says that the total job loss in that sector this year will be 6,000 and could go as high as 15,000.
The Alberta Energy Board has chopped the provincial allowable daily input by 300,000 barrels a day, which is approximately one-third of total production. One oil man is quoted as saying that it is Armageddon in Alberta and that every major oil project is threatened. Clearly there are problems in Alberta which we must address and I will make some suggestions about how we can deal with those problems.
The Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) stated that the Government's energy policy is in tatters. Originally, the federal Government's energy policy was to get rid of the National Energy Program, go to world oil market prices and phase out the petroleum and gas revenue tax which provided a lot of money to the federal Government. The oil companies despised the PGRT because they had to pay
tax for once. The Government's move to world oil prices gave the oil industry another windfall since it increased the price of their old oil which they obtained at very low rates. The oil industry was to become the engine of economic growth that would create 300,000 new jobs in Canada and the Minister of Finance (Mr. Wilson) and the Minister of Energy, Mines and Resources (Miss Carney) stated that this would be the Government's major economic policy.
In March or April of 1985 the Government entered into the Western Accord with the oil producing provinces of British Columbia, Alberta and Saskatchewan in western Canada. What has become of the Government's energy policy? It is in tatters because the price of oil has fallen dramatically in the so-called free market which is essentially controlled by OPEC. The result has been the lay-offs and cut-backs which 1 have just mentioned.
Now, the Government has changed its policy. The Minister of Finance has announced a new policy of consumer-led economic growth because of lower oil prices at the pumps. While that may be a legitimate policy, the Government has made a 180 degree turn from its original energy policy. I challenge the Government to tell me that it has not changed its policy. Furthermore, the Minister has not even been honest in explaining this policy. His Budget estimates the price of oil to be $22.50 a barrel for the rest of 1986 and he projected revenues according to that figure. Therefore, he has underestimated his deficit by $2 billion in order to bring the deficit under that magic figure of $30 billion.
The Government's original policy was to rely on the oil industry as the engine of economic growth, but its present policy is to rely on consumer-led recovery and growth through lower oil prices. While that may be a commendable policy, it is a complete change from its original energy policy.
The Government has created the worst of all possible worlds because the oil industry is suffering in Alberta and the consumer is not getting justice at the pump. Our system is so non-competitive that those lower prices have not been passed on to consumers, yet the Government has done nothing to make the system more competitive. In fact, it has closed a refinery in Montreal.
I asked the Minister of Energy, Mines and Resources why oil prices were not 6 cents a litre lower. I even introduced a motion in the House stating that the price at the pump should be 6 cents a litre lower. When I suggested that gasoline prices were cheaper in California and other states directly across the border, the Minister replied that our system is different from that in the United States. She explained that we do not have the refining capacity that exists in California, yet the Government has closed a refinery in Montreal.
I suggested that Petro-Canada could be used to set the pace by passing on lower oil prices through the system. Clora and George McAra in Gravenhurst, Ontario entered into a longterm contract with Petro-Canada and put their life savings in a gas station. They attempted to reduce their gas prices in order to be competitive and we saw that Petro-Canada locked their station. The Government oil company is attempting to restrain
March 19, 1986

competition exactly as the big multinational oil companies have done in the past.
I asked the Minister about her policy for Petro-Canada. The Conservative's policy for Petro-Canada is to have it act like any other oil company. That is not why Petro-Canada was established. In my opinion it was established to be a leader. It was established to be a leader in the industry and it has been a leader in the opposite direction in this case.
In the column written by Diane Francis in the Toronto Star, she states:
By my calculation, such a calamitous collapse means gasoline prices should be shaved by about 12 cents a litre.
She stated that last week U.S. posted prices fell to $20 a barrel while Canadian posted prices were as low as $15 a barrel, and by her calculation gasoline prices should be shaved by about 12 cents a litre. She continues:
Instead, we have seen savings of a penny here or there and a great many excuses from Petro-Canada and its rivals.
Why?
"Because there are only four refiners and no competition in Canada", says Ron Greene, president of Renaissance Energy Ltd.
By comparison in the U.S., there are literally hundreds of refiners competing viciously to buy oil, which means the prices often are upwards.
I hope that the Parliamentary Secretary will address the Government's policy of expanding Petro-Canada to buy all those gas stations. Why did the Government do that? Do we really want Petro-Canada to own all the gas stations? Or is it more important to have Petro-Canada involved in heavy oil, the tar sands, exploration in the oil upgraders, and so on, which is going to be the real energy future for Canada? I do not want to put down individual retailers, but lots of different people can sell gasoline. Selling gasoline is not in the strategic nature of control of the energy supply. Importing, discovering, participating in some of the frontier resources, becomes strategic. Perhaps the Parliamentary Secretary can tell us why the Government has acted this way with Petro-Canada? Again, it has the worst of all possible worlds.
Let me recap. The oil industry is in tatters. The consumer is not getting a break at the pump. Petro-Canada is out of control. So what is the Government doing? In western Canada it is very important to develop future resources. This is very hard to do when oil prices are falling. We have to look ahead to the future because in the 1990s we are going to have another oil shortage. One of our great projects was the Husky upgrader, a proposal entered into between the federal Government and the Governments of Alberta and Saskatchewan. The upgrader is at Lloydminster right on the border of Alberta and Saskatchewan. The Governments of Alberta and Saskatchewan were to put up a $300 million loan guarantee to Husky, a Canadian private oil company, while Ottawa was to provide a $750 million loan guarantee and a $50 million grant. But the federal Government reneged on its promise.


Mr. McDermid:: Not true.
Supply


Ian Gardiner Waddell: The Parliamentary Secretary says that is not true. Premier Getty of Alberta is quoted in the Calgary Herald on March 8 as saying he did not know what to do to make Ottawa uphold its commitment. He is quoted as saying: "What do you want me to do? Tackle them?" What kind of relationship is that with the provincial Government? What kind of policy is that towards the upgraders and the future of our energy sector?
The Hon. Member for Cape Breton-The Sydneys and I are members of the legislative committee on Bill C-85, a Bill to phase out the Petroleum Incentive Programs out in the frontiers. We were shocked when the Nova Corporation, the Independent Petroleum Association of Canada, Husky-Bow Valley, and the Canadian operators came before the committee to say the Government had sold them out. But that is for another debate. It was cutting back dramatically on exploration in Atlantic Canada.
The oil industry in Alberta is in disarray. The consumers are not getting the benefits of lower oil prices. Eastern Canada and the offshore has seen its oil exploration phased out. The Minister of Finance is misleading us in his budget papers, not intentionally, but in the sense of a different figure for oil prices. So where is the Government's energy policy? What has the much touted Minister of Energy, Mines and Resources been doing? We have the worst of all possible worlds.
I want to draw to the attention of the House what 1 believe can be done in this situation. There is an important article in the Calgary Herald of March 13 by Dave Speirs. He talks about the oil industry and says that the oil industry in western Canada is composed of a full spectrum of companies. On one end of the spectrum are a few large fully integrated major companies. They employ many Calgarians who participate in western Canadian exploration, work in the frontiers, in the tar sands in the in situ recovery megaprojects and refine and market oil. He goes on to state, and I quote:
On the other end of the spectrum are hundreds of small independent companies, each employing from one to 50 Calgarians and participating almost exclusively in western Canadian exploration and development. Reducing provincial royalties or eliminating PGRT would benefit one end of the spectrum-the large fully integrated major companies.
But it would not benefit the other end. He further states:
Across-the-board cuts in provincial royalties or PGRT would be of little benefit to the small to medium-sized independents already paying only 6 per cent royalties and sheltered from PGRT, but would place significiant incremental revenue in the hands of the major companies.
He then goes on to say that the major companies would simply buy out the small companies.
We should consider a negotiated floor price for oil as a temporary situation until the market stabilizes. We should consider measures in Alberta where a Crown corporation as the marketing agency could buy oil from the producers in order to ensure that they could sell their oil and would not just be gobbled up by the big companies. We should bring forward some real tough competition legislation and kick Petro-Canada and the other big oil companies into passing on those oil prices to consumers at the pumps, because those prices could go

March 19, 1986
Supply
down another 10 cents a litre. Those are the kinds of things we could at least start to do.
Finally, I hope that we will consider this boom and bust situation in the energy industry because it is the plague of western Canada. I want to say that 1 agree with my friend's motion, that the Government's energy policy is in total disarray and it has the worst of all possible worlds at this moment.


Benno Friesen: Mr. Speaker, the Hon. Member for Vancouv-er-Kingsway (Mr. Waddell) has expressed some concern, as well he might, about the oil industry in Alberta. I am sure he will recognize that during the past four years when the prices were on the rise the industry in Alberta, had it been healthy, would probably have been able to attain some kind of resource base to endure some of the slump it is now facing. The Hon. Member was in the House at the time the National Energy Program was passed. In fact, I think he may have been his Party's spokesman at the time. His Party was, may I say, widely enthusiastic about the National Energy Program.
I can accept the fact that ideologically, in terms of theory, the Hon. Member at that time would have supported the National Energy Program. He has the benefit of history now and he has seen what that program did to the oil industry, particularly in Alberta and certainly in Saskatchewan and British Columbia. Now that he has seen what that policy did to the industry out west, would he now concede that the National Energy Program was a mistake?


Ian Gardiner Waddell: Mr. Speaker, I do not know how many times I have to say this.


Mr. Mantha:: One more time.


Ian Gardiner Waddell: Okay, I'll say it one more time. The Hon. Member is an honest person. I invite him to check the record. The NDP did not support the National Energy Program. We voted with the Government-rather we voted with-


Some Hon. Members:: Oh, oh!


Ian Gardiner Waddell: You people, you're the Government now. We voted with the Conservatives just as much as we ever voted with the Liberals.
I rose in the House at the time to say that one of the big flaws in the National Energy Program was that in its effort to get political power for Mr. Trudeau, as opposed to Mr. Lougheed, the Liberal Government shifted the base of exploration from the western sedimentary basin to the frontiers. There were a number of reasons for doing that. First of all, the Government wanted to see what was in the frontiers. I had a plan and I accept some of that. However, the real reason for it was that under the Liberal notion of Canada the federal Government had power over the frontiers. I recall the fights that occurred between Newfoundland, Nova Scotia and the federal Government. A deal was never made with them and the Government said that the offshore belonged to the federal
Government. I thought that that was one of the flaws in the National Energy Program.
Regarding the principles of the National Energy Program, the Conservative Party agreed with its principles as did our Party. We are all for energy security; we are all for fairness to consumers, a viable industry and Canadian ownership. I supported the thrust of Canadianization as did the Conservatives.
I see that the Associate Minister of Defence (Mr. Andre) is present. People used to give him a rough time by saying that he did not believe in Canadianization. He used to rise to point out that that was not true. As energy critic, he did believe in Canadianization, and he was right. An untruth was being told about him. It would be convenient for me to say otherwise, but the truth is that Conservative Members also believed in Canadianization of the oil industry.
Let us tell the truth. The truth regarding the National Energy Program is that I thought that it would not work and that the PIP grants were too expensive and would be abused. The Government spent about $8 billion on PIP grants. For $8 billion we could have bought Imperial Oil. We could have Canadianized the industry instantly.


John Horton McDermid: That would have done a hell of a lot.


Ian Gardiner Waddell: Regardless of whether he agrees or disagrees with that, and I suspect he disagrees, my position was that 1 was not in support of the National Energy Program.
Perhaps I can tell this to Hon. Members now since a few years have passed. I had a hell of a struggle within parts of my own Party on the matter of the National Energy Program. With the support of my leader and some other Hon. Members, I got the support I needed. We had people telling us that we had better support Lalonde because he was being attacked by the oil industry. The oil industry went on a capital strike by moving the rigs south and not spending money. Lalonde was being attacked and a group of Canadians led by Robert Laxer and Me! Hurtig supported the National Energy Program. I would not be part of that group because I thought the program was flawed. I invite the Hon. Member to check the record. We did not support the National Energy Program.


Paul Gagnon: Mr. Speaker, I would like to set the record straight. The NDP certainly did favour part of the National Energy Program and that was the 25 per cent back-in whereby Petro-Canada arbitrarily gained one-quarter of offshore acreage.
1 would like to return to the Hon. Member's main point. He said that he would like to see a floor price for crude oil. Would he quickly and succinctly tell me what that price would be?


Ian Gardiner Waddell: Mr. Speaker, the Hon. Member is right. We did support the 25 per cent back-in. The National Energy Program consisted of 13 Bills and a whole group of programs, some of which Conservative Members supported, but we did not, and some of which we supported and Conservative Members did not. We did support the back-in because we thought for various reasons that it was only fair. After all, the resource
March 19, 1986

did belong to the people and the people were entitled to a chunk of the resource. We did not see any problem with that. It was only the Hon. Member's American friends who browbeat the Government into backtracking on that proposal. In other words, the Government caved in to the Americans on that matter because the Americans did not like their oil companies having to suffer this 25 per cent federal Government back-in.
With respect to an exact price, that price has to be negotiated. It is as simple as that. I invite the Hon. Member to have a look at the Western Accord. There is a provision in Section 9 of the Western Accord that would allow the provincial and federal Governments to get together to negotiate such a price.


Paul Gagnon: Mr. Speaker, now that he has proposed some sort of a price, would the Hon. Member tell us first how it is going to be funded, and second, how it will be organized with the 630,000 barrels a day that are being exported to the United States? The producer will not be selling to that market if he can sell to the Canadian market, and the American market represents three-eighths of our production.


Ian Gardiner Waddell: Mr. Speaker, there is a problem with exports. There are ways of getting around that. One is that the producer would sell more to Canadians, but that still would not take care of it all. Another way would be that a deal would be negotiated with the United States. There could be a joint export-import tax that could cover oil so that we would both have the same system. The third way, quite frankly, is to sell oil for export at lower prices. Regarding who would pay for it, it would be a shared cost. The Canadian consumer would in fact be paying part of the burden.


Paul Gagnon: How?


Ian Gardiner Waddell: He would be paying higher prices at the pumps, quite honestly. That is not unreasonable. The price at the pumps would still come down since it has not yet come down as far as it should. The consumer would not notice any increase at all at the pumps but would be paying more than he would with a completely free market price.
Is that not what happened under the National Energy Program? The consumer got a break at the pumps at the expense of the Alberta producers. We are interested in fairness, fairness to the consumer and fairness to the producer. That is what Canada is about and that can be done.
The problem is that the Hon. Member has a notion in his head of the great so-called free market which is not a free market at all. It is a crazy world market that is manipulated by the Saudis. I will end by telling the Hon. Member about a public opinion poll that was taken in his own province which shows that there is a substantial minority, almost a majority, of Albertans who would favour such a system.


Moe Mantha: Mr. Speaker, I am a believer in private enterprise. I have a business-


John V. Nunziata: No kidding.
Supply


Moe Mantha: It's not an oil business, it's a golf business. I would like to ask the Hon. Member about less Government intervention. I was brought up to believe that a Government's job was to govern. Does the Hon. Member think that the Government should use the taxpayers' money in the way it did with Petro-Canada? To this day, even we do not know the price of Petro-Canada. Should we sell out Petro-Canada and put out shares so that Canadians could get dividends? The Hon. Member mentioned in his speech that Canadians received no money in return. By putting Petro-Canada out to shares, but leaving it Canadian owned, there would be dividends and the system would be streamlined and more competitive. Does the Hon. Member believe that Government should buy more of these companies?


Ian Gardiner Waddell: Mr. Speaker, I am in favour of using Petro-Canada as an instrument of Government policy. In my speech I said that it should be one of the leaders in passing those cheaper oil prices through to consumers, which it is not doing. For example, I should like to see Petro-Canada looking at the difference in prices in northern Ontario where the Hon. Member lives and in Toronto where prices are so cheap. The Hon. Member should realize that the ordinary consumer or the ordinary guy needs a friend. He will not get it from OPEC, from Exxon, or from the other big multinational oil companies. Only the Government has that power and can do it for him.


Hon. Bob Layton (Minister of State (Mines)):: Mr. Speaker, I welcome this opportunity to rise in the House this afternoon, to take part in this debate on energy on behalf of my colleague, the Minister of Energy, Mines and Resources (Miss Carney).
The Minister's leadership and ability to negotiate and to appreciate the complexities of this country, are reflected in her truly magnificent record of achievements over the last fifteen months.

The Minister of Energy, Mines and Resources has by her efforts and patience introduced goodwill into the relationships between provincial and federal Governments. More important, if we are to have the benefits of the jobs which result from investment, she has introduced confidence back into the Canadian energy industry.
The ill-conceived motion now under debate describes the Government's energy policies as disastrous. We have heard that word before. It is a word associated by investors, provincial Governments in Canada and, indeed, the world, with the National Energy Program. The NEP was conceived and inflicted upon Canada by the Liberal Party and the Liberal Government, the very hand which brings us today's motion.
Six years ago we were in the midst of an oil crisis. The Iran-Iraq war in 1979 had severely curtailed production from the Middle East and world prices were escalating. The Government of the day, which has now assumed its rightful role as

March 19, 1986
Supply
the Opposition, was gripped by the kind of hysteria we are hearing from the Liberals today. It reacted in a knee-jerk fashion with a policy which cripped the Canadian oil and gas industry and pitted one region of the country against another. The NEP drove rigs south of the border. It drove away $17 billion in investment. It blackened our reputation in international investment circles. When people said that it was a disaster, they were being too kind. The Liberals have not learned their lesson. They are counselling us to panic again, to adopt politically expedient policies with little thought for the long-term implications for both the industry and consumers in Canada.
What is the situation today? The picture has changed considerably. We are facing a price was in international oil markets, and the oil and gas industry around the world is adjusting to lower prices and to uncertainty. The Canadian must make the same adjustments. Unlike 1980, when it was in the foot by the Liberal Government of the day, it now has under a deregulated regime the flexibility to adjust to market realities. No longer does it face administered prices and overregulation. No longer does it face the uncertainties of federal-provincial energy wrangling. A stable policy framework is in place, supported by a new spirit of federal-provincial reconciliation.
The cornerstones of the new policy environment are the Atlantic Accord, the Western Accord, the agreement on natural gas markets and pricing, and the new frontier energy policies. These new policies were carefully developed in consultation with provincial Governments and with the oil and gas industry. We did not assume that Governments could predict the course of world energy prices. Our goal was to free the industry from excessive regulation and excessive taxation so that it could adjust and compete.
The overwhelming majority of voices from the oil and gas industry demanded relief from the NEP. The message was: "Remove the heavy hand of Government; we are willing to handle the lean times if we can reap rewards when there are good times". In 1985, the first year in which the policies were operational, the Canadian oil and gas industry expressed renewed confidence. The new environment was applauded by the industry, by investors and by observers abroad. An editorial in The Oil and Gas Journal indicated the following: "The Accord does all the right things, which means that it unravels a tangle of wrong things and does so in the right way". Salomon Brothers Inc. indicated: "In contrast to the NEP, the implicit premise of the Western Accord is that the objectives of stimulating investment and job creation in the energy sector and Canada's energy security can best be met by adopting a market-sensitive pricing regime for oil and gas within a fiscal regime of profit-driven taxation".
In response to the new policies, capital investment by the Canadian industry increased from less than $8 billion in 1984 to more than $10 billion in 1985. That year was one of the best in the history of the industry. Well completions in western Canada reached a record high of 11,600, an increase of almost 9 per cent over 1984. Exploration drilling was up by 20 per
cent and development drilling was up by 25 per cent. Natural gas production was up by about 10 per cent and gas exports increased by 25 per cent. The policy framework put in place last year continues to have the confidence of the industry and of the Governments of the producing provinces.
Jim Gray, President of Canadian Hunter, recently told investors in London, England that whatever the price at which oil temporarily settles, "Canada will continue to be well positioned". He pointed out that finding costs for oil in Alberta and Saskatchewan were about half the costs in Oklahoma and Texas.
Imperial Oil President, Arden Haynes, told the same group that "investment in the Canadian oil and gas industry is, once again, a matter of business judgment rather than a political gamble". In other words, the price of oil may be changing, but the oil and gas industry is in a much better position to adapt to these changes than it would have been under the NEP.
Press reports earlier this week indicated that Poco's Petroleums Limited intended to double its capital spending in spite of the decline in oil prices and the resulting decline in the value of the company's assets. The president of the company mentioned increased marketing opportunities for natural gas after deregulation of the industry. He went on to say that Governments should not be encouraged to reregulate crude oil prices, and that "you can't say to a Government, step in when times are tough and stand aside during a boom".
I might add that British Columbia has just signed a new and substantial export sale of natural gas to California. It represents a 10 per cent increase in B.C. natural gas sales this year over last year. This is a direct result of the Western Accord and the new natural gas pricing agreement we reached with the producing provinces last year.
The oilfield service industry is extremely vulnerable to cutbacks spending by producing companies, but I should like to refer to the comments of a leading representative of that industry. Dale Tufts, President of the Petroleum Services Association, said:
We fought long and hard for the Western Accord to reduce Government intrusion and we don'twant to go back to where we were just to save us today.
That position is widely held by the oil and gas industry and is supported by the Governments of the producing provinces. They agree that intervention in response to the oil price decline would be a mistake. John Zaozirny, Alberta's Energy Minister, has called it the worst mistake we could make. Our colleagues in provincial Governments have agreed to keep each other fully informed of developments. The oil and gas industry is important to regional economies.
We are concerned about the impact of falling prices, but we agree it would be a mistake to tinker with public policy based on the experience of three months of unusual trading.
I believe it is appropriate to illustrate just how volatile the oil market is at this time. In the last few days, the spot price has actually gone up. West Texas intermediate is currently
March 19, 1986

trading at $14 a barrel and Brent crude has shown similar price changes, at one point reaching $16 a barrel. Most experts believe that this uncertainty will continue over the short term. That is why it would be foolish to move until the market settles down.
The best solutions for the industry's adjustment to lower crude prices are market led solutions. The changes made by the Government and by the Governments of the producing provinces have given the industry greater flexibility to adopt such solutions.
The ceiling price on so-called old oil has been removed. The petroleum and gas revenue tax is being phased out and has been eliminated on new projects and new productions. On older production it drops from 12 per cent in 1985 to zero in 1988.
Assuming, for purposes of comparison, a crude oil price of $15 a barrel, the net impact of the new policies will be to provide industry with more than $1 billion in cash flow in 1986 over what it would have been under the National Energy Program. That point bears repetition, Mr. Speaker. If the National Energy Program had been left in place and if average crude prices this year were at $15, the cash flow of the Canadian oil and gas industry would be more than $1 billion less than under the new policies.
Adjustments to the uncertainties of oil price changes may be difficult, but they would have been more difficult under the NEP. The new policies have given the industry the fiscal and regulatory room to adjust to changing market conditions best.
The new policies are consistent and stable. But they are non-interventionist and non-discriminatory. They will help the oil and gas industry to do what it can do infinitely better than Governments, that is, adjust to the realities of the market.
At the same time, Mr. Speaker, the new policies are helping energy consumers. We have deregulated crude oil. The price of crude oil has dropped, and as the newer, cheaper oil makes its way to refiners the cost of gasoline and heating oil is going down.
Canadian gasoline prices dropped another 2 cents a litre this week. The average total drop in gasoline prices since the first of the year is now 4.3 cents per litre for regular leaded at self-serve stations. In some areas of the country, market competition has seen gasoline prices drop by as much as 11 cents a litre, or about 50 cents a gallon.
The new energy policies are designed to avoid intervention and to allow market forces to set prices. Cheaper average gasoline prices show that the market is working and that our policies are correct.
The new policy also commits us to deregulation of natural gas prices. Industrial natural gas consumers are negotiating prices directly with producers or with distributors under competitive marketing programs. On November 1, 1986, all natural gas prices will be deregulated and all consumers will benefit from competitive gas prices.
Supply
In summary, the energy policy of the Government has stood the test. It is consistent with the goals our Party established while in opposition. It fulfils the commitments of the 1984 Prince Albert statement. It has restored confidence in energy investment in Canada. It has provided the oil and gas industry with the fiscal flexibility to deal with the inevitable price cycles of an internationally traded commodity. It has given consumers the benefit of a competitive market. In addition, it has shown that federal and provincial Governments can work together to allow Canadian companies to grow, to adapt and to compete.


Russell Gregoire MacLellan: Mr. Speaker, the Minister mentioned a price reduction of 4.3 cents a litre, and in some cases, a reduction of as much as 11 cents a litre. Let me say to the Minister that in a few isolated cases where prices have fallen more than 4 cents a litre, it is because of price wars and it has nothing to do with a reduction at the pump.
The Minister mentioned that the Minister of Energy, Mines and Resources (Miss Carney) has introduced confidence. But the confidence is not there any more. That is why members of the Independent Petroleum Association of Canada and the Canadian Petroleum Association came to Ottawa yesterday to speak to the Minister to ask her what she was going to do. They do not have confidence any more. They do not know where the industry is going. It is a very unfortunate situation.
The Minister mentioned the reduction in the spot price in West Texas intermediate crude. That is not going to matter. Petro-Canada, which does not have much of a source of crude oil itself, was paying, prior to December, the West Texas posted price for crude oil in western Canada. In January, the West Texas spot price went below the West Texas intermediate posted price. Then Petro-Canada decided it would pay the spot price, which was lower than the posted price. If the spot price goes up above the posted price again, Petro-Canada will just offer the producers in western Canada the posted price. Producers will get offered the lower of the two prices, which is the lowest price in the world for crude oil.
This is the country's own Crown corporation. It is supposed to be protecting the industry, securing a supply of crude oil and securing exploration and development, but here it is gouging the producers. How can the Minister defend this action? How can the Minister say that the industry must make adjustments? It is like somebody going into a store and asking for protection money off the top and saying to that storekeeper, "You have to adjust to this". It does not make any sense at all. The Minister is not advocating a responsible position for the industry.


Robert E.J. Layton: Mr. Speaker, the Hon. Member has raised three or four points. First, the variety of prices that have developed with the falling of crude prices is the market-place at work. There will be, and constantly, a pressure on those who sell to find the price that will attract the market-place.
The fact that industry representatives visited here yesterday and will continue to visit, is an indication of the approach my colleague, the Minister of Energy, Mines and Resources (Miss

March 19, 1986
Supply
Carney) takes to this process. She consults, she listens and she relates to the provinces. They come to inform. I think you will find, Mr. Speaker, that the natural forces of the market-place are exactly what these people want as a guide, not government intervention.
Finally, with regard to the procedure of Petro-Canada purchasing at spot or medium prices, I would expect that, as an organism which must compete in the market-place, Petro-Canada would look for the best supply and price for its product. It will certainly take 60 days to go through the process from buying to selling. The first proposal of the present Leader of the Opposition (Mr. Turner) in this House in 1975 was for 45 days, which later changed to 60 days due to a later delay caused by freezing prices, and that was adopted by the Hon. Member's own Party. It is recognized that the material must be processed before it is sold at the pump, but the market-place will determine the final price.


Ian Gardiner Waddell: Canadians must wonder what their Governments have done for them. Alberta was like a guy who won a lottery a few years ago. It was getting all that money in its provincial Treasury and it did not really save or invest it properly. Now the whole province is in danger of massive unemployment and shut-downs. The Liberal Government introduced the National Energy Program which did not work, and then retreated from it. It was left with no energy policy at the end of its tenure. The Tory Government has brought in the Western Accord, which the Minister has the gall to tell us is of benefit to the consumer. I cannot see that the consumer or the producer is benefiting. Oil companies are gouging the consumer at one end and the small producer at the other.
Did the Government of Canada take into account that the price of oil was going to decline at the time of the Western Accord? No one complained about the Western Accord because everyone thought the price was going to go down. Did the Government foresee a de-escalation of the world price of oil? What is the Government's policy presently on the big oil industries' desire to get rid of the remaining petroleum and gas revenue tax? Is the Government going to phase that out more rapidly, or has it taken a decision on that yet?


Robert E.J. Layton: Mr. Speaker, I think Alberta acted very responsibly in recognition of its great resource by building up the funds it did during the period of good times. From all evidence there will be only a very temporary cycle of uncertainty in the pricing of raw materials and the end product.
Oil, gas, and coal are all non-renewable resources. When I was an engineer in the business world, there was a concern that we would not be able to fulfil the industrial and popular requirements for energy from our own resources. There was considerable uncertainty in everyone's mind about the future availability of this natural resource. Because of the surplus in latter years, much of our memory of that has faded. However, when addressing today's issue, we must remember that oil, gas, and coal are non-renewable resources. If we do not increase
the price there will be waste. The entire world, and Canadians in particular, have learned that this is a precious asset. We must use it well, and a firming up of the price is inevitable.


Ian Gardiner Waddell: Mr. Speaker, the Member did not answer my question about whether the Government is going to make further changes in the PGRT. Would the Minister not also agree with me that we are seeing no exploration or new projects now and our reserves are not being replaced? In fact, we are now depleting reserves, and the industry cannot be restarted that easily. Has the Minister considered that problem? Will he give me an answer with regard to the PGRT?
Finally, does the Minister really believe that there is a free market in oil, considering what the OPEC countries are doing? That is a cartel. Does the Minister want the cartel to get its act together again? Is there or is there not a free market in oil?


Robert E.J. Layton: Mr. Speaker, no decision has been taken with regard to changes in the Western Accord or the PGRT. As I announced in my remarks, there is a program in place which will remain in place. With respect to investment in the industry, in my remarks I referred to very specific investments. One organization is doubling its investment because of its confidence in the market-place in the future.
Is there a free market in oil? As I recall, when the oil crisis developed in the early 1970s, OPEC was responsible for the delivery of approximately 60 per cent of the world's oil supply. To the best of my knowledge, that has now decreased to approximately 35 per cent. OPEC does not now have the impact on world prices which it once had. There are other oil resources being developed around the world such as in the North Sea and Nigeria. As a result, mid-eastern oil does not have the effect it once had. I must admit that it is questionable whether this creates a free market in oil.


Mr. MacLeilan:: Mr. Speaker, OPEC does not have the clout it would like to have, but the Saudi Arabians are just playing a waiting game. Before long their clout will be increased quite a bit. The Minister talked about the 40-day and 60-day period before the price of oil would go up. That started in 1973 with the first oil shock when the oil companies wanted to raise the price the next day. They did not talk about a flow-through period at that time. They were not going to wait two months. The Liberal Government of the day said that they must wait 45 days and then 60 days before they could pass that price increase along. That was to protect Canadians against the oil companies. Now that prices are coming down, they say there is this flow-through period. That only shows their own inconsistency.


Robert E.J. Layton: It's the same thing.


Robert Simpson MacLellan: They are waiting voluntarily before reducing the price, but they wanted to raise the price the next day. That 60-day period-


John Horton McDermid: How did you arrive at 60 days?
March 19, 1986


Russell Gregoire MacLellan: That 45-day period, which was increased to 60 days in 1975, has been followed by every subsequent Government.


John Horton McDermid: How did you arrive at that?


Russell Gregoire MacLellan: It's a 60-day period to protect consumers.


John Horton McDermid: No, no.


Russell Gregoire MacLellan: Yes, because the oil companies wanted to raise the price right away.


John Horton McDermid: Why not 90 days?


Russell Gregoire MacLellan: The point is, Mr. Speaker, that if the oil companies could raise prices the next day, they could certainly lower them the next day. We need not talk about this flowthrough period. Why does the Minister not just call the President of Petro-Canada and tell him to treat producers fairly, to pay them a fair price for their oil, and to reduce the price at the pumps? My learned friend, the Member for Vancouver-Kingsway (Mr. Waddell), quoted an article which said that gasoline prices at the pumps are 12 cents too high. Why does he not tell the President of Petro-Canada to give consumers a break instead of going through this charade of waiting an arbitrary period of time?


Robert E.J. Layton: Mr. Speaker, all of us in Canada believe there is a place in the market for a large Canadian oil company. However, it has to compete. If we start to establish prices, then obviously we have to supply subsidies right down the line. We have set a goal for Petro-Canada to be a competitor in the market-place. It has to buy and sell in competition with all the others in this field. It is not for this Government to start directing any Crown corporation on the price of its goods and services. That has to be determined by the market-place. We accept this as the rule and I know most Canadians will accept it.


Mr. Deputy Speaker:: Resuming debate.


John V. Nunziata: Mr. Speaker, I appreciate the opportunity to make submissions on the motion moved by my colleague, the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan). The motion reads as follows:
That this House regrets that the government's energy policy has proven to be disastrous for both the industry and the consumer in its failure to give the consumer the benefit of falling world energy prices and in its confusion and lack of direction, creating uncertainty for the oil and gas industry in the face of the government's inability to cope with changing international conditions and its refusal to fulfill its commitments.
The motion condemns the Government because, in the view of the Opposition and of Canadians in general, this Government has authored the mess which exists in the petroleum industry today. As my colleague pointed out, not only are consumers being gouged by Petro-Canada and the Government, so are the 600 odd small producers.
Supply
I would like to outline very briefly the state of the petroleum industry in Canada at present. It is in trouble. As my colleague pointed out, this Government has no definitive policy to deal with the industry's problems. We all know that the price of crude oil has fallen somewhat dramatically over the last number of months. In fact, as you know, there has been a 52 per cent decline in that price since the end of 1985, and a 57 per cent decline since November 1. As a result, Canadian producers are reducing capital expenditures and laying off employees. We are all aware that in excess of 25,000 jobs are threatened by the confused state of the energy sector. This Conservative Government has to take some responsibility for its inaction and hands-off policy in this regard.
As you know, Syncrude recently cut $200 million from its planned expenditures for 1986. Roxy Petroleum is reducing staff and has cut its capital spending in half. Syncrude and Suncor have announced lay-offs at their projects in Fort McMurray, Alberta. Texaco will also cut its experimental heavy oil project at Fort McMurray and put 200 Canadians out of work. Husky Oil will lay off 300 employees by the end of March, 1986. The Calgary Herald of March 12 announced that Petro-Canada has laid off about 300 staff members. Other Canadian producers, including Sulpetro and Sceptre Resources, have also indicated they will soon be cutting their employee rosters. On March 14, Dome Petroleum Limited announced that it had asked its creditors to forgo principal and interest payments of as much as $1 billion on its total longterm debt of $6 billion. The facts speak for themselves. The industry is in trouble.
What, pray tell, is this Government doing in order to assist the industry? The Minister stands up and, with her usual pomposity, says that the industry will take care of itself. As a result of deregulation everything will be hunky-dory in the months and years to come. The Minister, the Prime Minister (Mr. Mulroney) and the Minister of Finance (Mr. Wilson) are conning Canadians when they say that it will take time, one has to take flow-through into consideration. We on this side refer to that as the flow-through excuse. As my colleague indicated, it is an excuse for the major oil companies to rip off consumers. That is the bottom line. The consumers, those who have to go to the gas stations once or twice a week, are being ripped off, no question about it. We in the Opposition, in particular our energy critic, have led the fight for consumers in Canada. Our energy critic has pointed out time and time again that Canadians are paying an unconscionable price for gasoline in view of the world price of oil. Yet the Government just throws up its hands and says it takes time for the cheaper oil to work its way through the system.
At first blush one could possibly conclude there might be some merit to that argument. There is a delay from the time contracts are entered into and the oil is delivered and refined and works its way to the pumps. At first blush that might make some sense. However, if that were the case, then why do our friends in the U.S. pay so much less for gasoline? Why does a motorist in Buffalo pay anywhere up to 15 cents a litre less than a motorist in Toronto? It does not make any sense.

March 19, 1986
Supply
Where is the fairness? Where is the equity? Where is the justice? Surely if the flow-through excuse has some merit, then the same thing would apply to our friends south of the border. Yet it does not. So we say it is an excuse used by the oil companies to continue ripping off the consumer. As was pointed out by my colleague, when the price of oil went up the multinationals put the price of gasoline up immediately. When the Government of the day argued that it takes time to work its way through the system, the oil companies said no, they have to put the price up right away. In effect, the consumer is getting hit at both ends. When the price of crude oil goes up, the multinationals want to put the price of gasoline up almost immediately. When it comes down they say it takes time to work its way through the system. Neither I nor the Liberal Party believe that this Government recognizes the gravity of the problem in the oil industry.
Let me speak once again about the jobs which are at risk because of the Government's inaction. We can understand why the Government does not want to take any action. As the Hon. Member from North Bay indicated, it is a so-called free enterprise Government. Its motto is to deregulate and get its hands off the business of the nation. It advocates letting business regulate itself.
I have to laugh, as do a great many other people, when our friends opposite talk about free enterprise. It seems to me that when it is convenient to speak of free enterprise then, indeed, Members opposite speak of it. Hon. Members might recall seeing a few years ago full-page advertisements in the major newspapers of Canada depicting a dove in a cage. The caption read: "Let's free enterprise". It was a national advertising campaign paid for by the major corporations of Canada. They felt that some enterprise was not free. Some of the contributors to that campaign, some of the very people who argued for free enterprise, were the same companies to come to the Government cap in hand when they were in desperate need of Government support. I wonder whether the Canadian Commercial Bank, the Northland Bank, Massey-Ferguson or other corporations which have come to the Government cap-in-hand believed that when times are good we should "free" enterprise.
I wonder whether they contributed to that national advertising campaign.
The point I am making is that the oil industry, when it is convenient, says to the Government of Canada: "Leave us alone. We don't want you or need you". However, when times are tough the industry is prepared to go to the Government cap in hand looking for assistance.
There are those who argue that there should be a floor price for crude oil. The Conservative Government of Canada is an accessory to the great Canadian oil rip-off being perpetrated by the oil multinationals. It is within the jurisdiction of the Government to take action in order to reduce the price of gasoline. It is a simple matter. Each and every one of us in the House-each and every Canadian-is a shareholder in a major oil company. We own that company and it is ripping us
off when we go to the pumps. Canadians are asking why we have a national oil company. Surely we do not have such a company for it to be a party to a rip-off, an accessory to the greatest oil gouge in Canadian history. That is a breach of trust and a breach of faith. There is certainly a conflict here. Mr. Hopper sits in his ivory tower, wherever it is-presumably in western Canada-earning his in excess of $400,000 per year. He is saying to the people of Canada that, even though it is our oil company, Petro-Canada is not prepared to take action to assist the consumers. As Hon. Members know, Petro-Canada owns a great many gasoline stations in Canada. In fact, in Ontario, the province where I reside, one in three gasoline stations is owned by Petro-Canada.
Given the position this company holds in the petroleum industry in Canada it is in position to direct a downward spiral with regard to the price of gasoline. It has refused to do so because of a lack of direction, I suppose from the Government, or perhaps because it is receiving the wrong type of direction from the Government. The Government has said to Petro-Canada: "Maximize profit. Run your business like any other. Do what you have to do in order to make a profit". Normally speaking, a company has a duty to its shareholders to maximize profits. That is the bottom line in the private sector. If private sector companies do not maximize profits then they should not be in business. In my view, the bottom line for Petro-Canada is not only to show a profit. We shareholders are asking for more. Of course we would like this Crown corporation to do well. However, we are not simply asking for a profit at the end of the road or at the end of the fiscal year. We want to know that Petro-Canada has been used as a vehicle to further public policy in keeping with the best interests of Canada and Canadians. That is not the role that Petro-Canada is playing.
In days gone by when I had to fill up my gas tank I would make en effort to fill up at Petro-Canada. I had a feeling of pride. I had a feeling that this was our national oil company. Somehow I felt good about Filling up at Petro-Canada. I am losing that feeling.


Some Hon. Members:: Good!


John V. Nunziata: I am losing that feeling because of the insensitivity of Petro-Canada. I am certain that a great many Canadians no longer feel proud about the role it plays because of this Government's policies. We know what the Government has in mind for Petro-Canada. We know that some six or seven years ago the Conservative Government under its former Leader decided to govern as if it had a majority. Back then it tried to indicate to Canadians that it wanted to privatize Petro-Canada. We know what happened to that Government when it mismanaged the energy industry. It said to Canadians that, notwithstanding the nature of its mandate, it was going to bulldoze through a substantial increase in the price of gasoline. Here we are seven years later and the Government has still not learned its lesson. It is still bent on privatizing Petro-Canada. It still refuses to allow it to take the lead in reducing the price of gasoline.
March 19, 1986

In his speech the Minister indicated that there have been some price declines in the cost of gasoline. He indicated an amount of four cents. I would have appreciated an opportunity to ask the Minister what he believes to be a fair decrease in the price of gasoline. In this respect it must be kept in mind that the price of crude oil is below $15 a barrel.
I have had the pleasure of knowing the Minister's son for a number of years. He is an alderman on Toronto City Council. He is a very progressive and forward-looking individual. The next time I speak to Jack I will have to ask him where he went wrong with respect to his father and the policies which he supports. Yes, the Minister's son, Jack, is a member of City Council in Toronto and a member of the NDP caucus on City Council. He believes, as we believe on this side of the House, that the Government's policies and those espoused by his father who represents the Government of Canada are wrong and that the people of Canada are being ripped off.
I note that you are indicating my time is up, Mr. Speaker. I had much more to say with respect to how the Government is mismanaging the oil industry, but I look forward to questions from Members opposite. I know that many of them will want to ask me a question on this very important subject.


Mr. Siddon:: Mr. Speaker, I listened very intently to the Hon. Member's remarks. Does the Hon. Member recall December, 1979, as well as I do? I remember filling up my gas tank in this city on the day after the Liberal Opposition at the time defeated a very forward looking Conservative Government. The price of gasoline was $1.06 per gallon.
When the Liberal Government left office in the summer of 1984, the price of gasoline was approximately 50 cents a litre or $2.50 a gallon.
There has been a 10 per cent drop, which is 4 cents per litre or about 20 cents per gallon, while the price of gasoline under the previous Liberal Government, of which his colleagues were a part, rose by over a dollar a gallon in most parts of Canada. Would he comment on that discrepancy and indicate why he is so negative about the fact that gasoline prices have dropped at least 10 per cent under the present administration?


John V. Nunziata: Canadians know that they are being ripped off today because of the Government and its policies. The Minister chuckles, but he knows that in January alone, Canadians paid over $300 million too much for gasoline. He knows that.


John Horton McDermid: Based on what? Where did you get your figures?


John V. Nunziata: They have woken up across the way. The Parliamentary Secretary asks me where I get my figures. I would be pleased to share the figures with him.
The Petroleum Marketers Association of Canada have put in considerable research to conclude that "Canadian consumers overpaid $302 million in January, 1986, for gasoline". If he
Supply
wants to dispute the position taken by the Petroleum Marketers Association, I suggest he do so.
However, getting back to the Minister, he knows, and his constituents and his colleagues know, that the price of gasoline in Canada today should be at least 10 cents a litre less than it is at the pumps. He knows that because the price of crude oil is less than $15 a barrel and should result in a further decrease of at least 10 cents a litre for the Canadian consumers.


Thomas Edward Siddon: Does the Hon. Member not realize that what Canadians are paying for today is the tremendous burden of deficit which resulted from the National Energy Program and retrograde policy of the Government of which his colleagues were members?
He has not yet answered my question. The price of gasoline in Canada in December, 1979, was approximately 25 cents a litre. When the Liberal Government left office, the price of gasoline virtually doubled to about 50 cents a litre. It has dropped by an average of 4 cents a litre or 20 cents a gallon. Why does he not acknowledge that it was under the Liberals that this great burden of deficit and gasoline taxes were levied on all Canadians?


John V. Nunziata: Mr. Speaker, the Minister claims to be a reasonably intelligent person. It seems to me that he is trying to con the House and the people of Canada.
He knows that the factors are different now. We were not dealing with a price of crude oil at $ 15 or $ 12 a barrel.


Thomas Edward Siddon: That is not the reason.


John V. Nunziata: May I take this opportunity to comment on how the Government finds it very convenient to look to the Liberal record and blame it on the Liberals when everything goes wrong? If it rains or snows, blame it on the Liberals. If the sun shines, interest rates go down or unemployment goes down, it is because of Brian and the good policies of the Conservative Government.
Canadians are not so dumb as to believe that. If anything, the Government underestimates the intelligence of the average Canadian. Is it any wonder that the Conservative Government has frittered away that massive mandate it received on September 4? Is it any wonder that the Conservative Government is now trailing in popular support?


Thomas Edward Siddon: You still did not answer my question.


Mr. Deputy Speaker:: Resuming debate.


John Horton McDermid: Mr. Speaker, I want to thank my hon. friend, the Member for Cape Breton-The Sydneys (Mr. MacLellan) for bringing this motion forward. It gives us an opportunity to clear up some of the inaccuracies that have been cast about by the Opposition this afternoon and to truly participate in what I consider to be a very legitimate debate in the House.

March 19, 1986
Supply
Of course, Canada is energy. Energy is the vast resources that this country has at its disposal. Energy is the millions of Canadians working to put the country back on a sound economic footing after the erosion of our economy by the previous Government.
I want to dwell on some of the comments made this afternoon by my friend, the energy critic for the Liberal Party. I believe that they were somewhat unfair and should be corrected for the record.
He said that the flow-through process was a con. He is nodding in agreement. I asked him earlier if the flow-through process was a con when oil prices were rising and the Liberal Government enforced a 60-day freeze before higher prices were permitted at the pumps. I do not understand why it was not a con then but it is today.
Let me quote from Hansard of June 23, 1975, at page 7031 when the Right Hon. Leader of the Opposition (Mr. Turner), the Minister of Finance at that time, said:
Against this background I would like to announce on behalf of the government and my colleague, the Minister of Energy, Mines and Resources, that on July I this year the price of crude oil and its equivalents will rise by $1.50 per barrel to $8 per barrel. We are again asking industry to refrain from reflecting this increase in their product prices until 45 days have passed. By that time-
I want the Hon. Member to listen to this carefully:
-inventories held at the former crude oil price will, on average, have been used up.
Later he increased that to a 60-day period because he was convinced, after examination, that it took 60 days for it to flow through the system.
The Hon. Member stands up in the House with his selfrighteous attitude to say that it was only on behalf of consumers that they arrived at that figure. That is not accurate. For him to stand up today and say that the flow-through is a con is not really to tell the truth. I wanted to correct that and I think the Hon. Member will agree with me that it is not really a con but in fact reflects what is really happening.
A drop of 2 cents a litre is equivalent to approximately $4 a barrel, in round figures, or a decrease of about 0.5 cents a litre per dollar. So what we see now are two drops in the price of gasoline, it has dropped 4.3 cents a litre so far, which reflects a drop of a little over $8 a barrel. If we are talking about the flow-through period, which we are, the average posted price at the end of December was $27.42 U.S. At the end of January, it was $24.32 U.S., which is a drop of $3 a barrel on average. The big crunch came in February, as we all know. The average February posted price was $16.78 U.S. If we go through March and into April, we can see we have every right to expect further decreases in gasoline prices at the pumps beginning early in April, at least, to my estimation. The average posted price now for the first two weeks of March is $12.44 U.S., which will be reflected further on down the road as the flow-through goes through.
The Hon. Member must be fair with the Canadian public. I understand what the Opposition is doing. It is making a big
political ploy out of this issue and creating confusion in the minds of the public. When the public sees in the media that the price of a barrel of oil has dropped, they feel it should, therefore, drop at the pump tomorrow. I understand that. But I believe the Hon. Member, who has been the energy critic for the Opposition for a while, understands, and behind that tough-talking facade he presents to the House of Commons, he knows full well how the system operates. He has spent enough time with Husky-Bow Valley lately to know its corporate plans intimately by this time. He knows the system and how it works, that the domestic crude moving through the pipeline takes a three to four-week period and that the inventory of crude at the refinery is kept there for a week. The refining of crude, the blending of gasoline, storage and distribution take another six weeks before it gets to the retailer. That works out to about 60 days.
I believe the Canadian public should understand this. All I am saying to the Hon. Member is that I understand why he is making a political ploy out of this issue. It is great stuff to talk about the great rip-offs and everything else.
We talked not too long ago about the margins, the return on investment which the downstream operations were receiving, and the Hon. Member himself admitted that it was not spectacular over the last three or four years. So I would question this "great rip-off' that so many people talk about.
I just returned from the United States. Normally when I go on holidays or on a trip, the first thing 1 look at is the price of gas at the pumps, no matter where I am in the world. In the United States, Americans complained to me that the price of gas was not coming down fast enough for them either. The Hon. Member said today that as soon as prices dropped, the prices in the United States dropped at the pump. That is just not so. It has not shown up in any of the information, nor has it been indicated at the pumps that way. Companies in the United States are also using up inventories. They have the flow-through process to contend with, although I will say to the Hon. Member, to those watching the televised debate and to those Hon. Members in the House, that the American flow-through is a much quicker process than ours. There is no question about that. It is because of volumes and economy of scale. It is a shorter period, but there is still a flow-through period. We talk about a variation in prices. As of the very latest statistics we have, there is a differential of 13 cents a litre, after taking the American dollar and U.S. gallon into consideration, most of which we can chalk up to taxes-not all, but most of it.
A friend of mine who took the trip with me to the United States hurt his finger. He dislocated his knuckle. He had to go to a clinic to get it fixed. He was there ten minutes. He had it straightened out, splinted, and then had to pull out his plastic to pay the $150 bill. Had he bought the supplementary health plan for travellers outside of this country, he would have been covered. Had he been an American and had he not had a private plan, he would not have been covered. But a Canadian in Canada would have been covered. We have services here in Canada which have to be paid for. That is part of spreading
March 19, 1986

the tax burden as widely as we can. Part of that tax burden is on gasoline. Yes, our prices are higher.
1 mentioned the economy of scale. There are so many more people in the United States, its refineries are larger because of the economy of scale, and so on, and it can produce the product at a much more competitive rate. That is the difference. I believe we should be honest with the Canadian people. They must understand that we are concerned about what is going on in the energy field today, naturally, and we are watching the situation very carefully.
Some comments were made that the Minister of Energy, Mines and Resources (Miss Carney) was not concerned or involved. I can tell you, Mr. Speaker, that she has met with government officials and the Energy Ministers in the producing provinces, especially in Alberta where the problem looms the largest. She has met with the producers, not only the Canadian Petroleum Association but the Independent Petroleum Association of Canada, made up of Canadian producers, and I can tell you right now, Mr. Speaker, that these people are keeping her informed on a daily basis as to what is going on in the oil patch and the problems they are experiencing now or will experience over a prolonged period of time. At the same time, however, they are not asking for Government intervention. They do not want the Government to step in and set a floor price, as the Hon. Member for Cape Breton-The Sydneys suggested. Our friends from the New Democratic Party, the socialists, as usual, are at it again; interfere, intervene, dictate, tell them what to do.
The Hon. Member for Vancouver-Kingsway (Mr. Waddell) said so many things today. He said we should bring in a floor price, negotiate a floor price. First, no one wants to negotiate a floor price. The producing provinces do not want to negotiate a floor price right now. The producers do not want to have one thrust on them. So who do we negotiate with? Second, the Hon. Member says we cannot negotiate right now, anyway, because the situation is too volatile. He says to wait until things settle down. That was his next argument. Then, towards the end of his speech, he said to my colleague from Calgary that we had better have a floor price right now. He was all over the map, which is typical of the New Democratic Party. It does not know where it stands on this thing.
If we set artifically high oil prices-and that is what we are doing if we establish a floor, and the world prices go before that, all of a sudden our manufacturers become uncompetitive, energy intensive industries are penalized, we have lost jobs across Canada and our exports do not look quite as attractive to the United States, for example, where over 600,000 barrels of oil go every day, especially our heavy oil. Now is not the time to panic. It is not the time for any major reactions on what is going on in the industry.
Yesterday, on the strength of the OPEC meetings, the spot price went up $1.25, and today, I understand, it is up $1.45 again. That is on the strength of what is going on there. Tomorrow, those talks could collapse and that approximate $2.50 could disappear. For the Government to step in now and dictate a floor price would be rather ludicrous.
Supply
1 heard the Hon. Member say that we are paying an outrageous price for energy in this country. As a matter of fact, we have very highly competitive energy prices. The Hon. Member ought to travel to Europe and see what Britain, France, Germany and Norway are paying for gas at the pumps. All of a sudden, Canada would look pretty good.
I was pleased to learn today that tourism from the United States and Canada was up by 18 per cent in January. I think that bodes well for the tourism industry in 1986. I think there will be mammoth increases in tourism this year, not only because of Expo 86, that great show that will be held in Vancouver.
The theme of Expo 86 is transportation, and my colleague, the Minister of Transport (Mr. Mazankowski), will be playing a key role in welcoming people from around the world to beautiful downtown Vancouver this summer. Vancouver Centre, as a matter of fact, is the riding of the Minister of Energy, Mines and Resources, and I am sure she will also be playing hostess to many people from around the world. I am sure she would want me to encourage the these people to come.
The price of gasoline is not discouraging tourism in Canada. If that were the case, we would see the tourism records falling rather than increasing. I think a lot of that credit has to go to the Minister of Tourism (Mr. Murta) for the excellent marketing job he has been doing in the United States. Let me say to those Americans who may be beamed in, we welcome you here with open arms.
Just for a moment, I would like to review what has happened in the 19 months since the overwhelming victory of this Government. The Minister of Energy, Mines and Resources set in place what is today a world-respected energy policy. It is a policy that puts Canada in a better position than any other country in the world.
I spent a considerable amount of time speaking to people from the energy sector. I was not speaking to representatives of the multinationals but to Canadian geologists, those fellows who have the expertise and are respected and work around the world. I spoke to the drillers, those fellows who do the tough and dirty work, and I spoke to the suppliers. Do you know what they told me? They told me that the new policy is magnificent and allows them the freedom to explore and to work. They are poised to go ahead.
Last year was a record year for the energy sector. It was a record year because of the new energy policy and because of the confidence they have in the Government and its policies. We saw record drilling and record finds last year. The energy industry took off. Certainly there are some concerns now because of falling prices, but if we were under an administrated price system at this time, there would be disaster in the industry because of all those taxes, the taxes that were removed once we got rid of the National Energy Program. Had those taxes still been in place, we would have seen a major disaster within the energy sector.

March 19, 1986
Supply
We signed the Atlantic Accord. The people from Newfoundland wanted to be equal partners in Confederation and they feel that they are now. In fact, Mobil Oil Canada plans to invest $4.2 billion in the Hibernia oil field off the coast of Newfoundland. That will create more than 14,000 person-years of employment in Canada of which more than 9,500 will be in Newfoundland and Labrador. The Atlantic Accord is going in the right direction and it has been applauded widely by all concerned.
Then we had the Western Accord. That set in place the freedom of an industry to do the job it is supposed to be doing and not to be fettered by all these weird taxes, regulations and PIP grants. Canada's oil industry is freed of all those excessive regulations and unfair taxes. As a matter of fact, the reaction in Calgary, as I know my friend, the Hon. Member for Calgary North (Mr. Gagnon), will agree, was to celebrate. They were dancing in the streets. The oil and gas industry rejoiced because finally the market-place was back in vogue. That was most important. The Western Accord was a victory for all Canadians, though, not just for Calgarians and Edmontonians. It was a victory for the manufacturing sector in Ontario and Quebec.
I can say right now that Canadians are benefiting from the lower oil prices, and they will benefit further, there is no question about it. The recent study done by the Conference Board showed that an oil price drop to $18 U.S. would add about .2 per cent to the level of the real GNP in 1986 and .9 per cent in 1987. I suppose there are winners and losers in the province. I think that we will find in the short run that we will have some problems with falling prices, but in the long run they will recover and they will recover in the not too distant future. I do not think prices will skyrocket out of sight. Under the National Energy Program, prices today would have been $39 per barrel.
The Government's energy policy has set the industry free to do what it does best, respond to the challenges and opportunities provided by the market-place in the best interests of all Canadians. Consumers are benefiting from lower world energy prices. The petroleum industry and provincial Governments are content with the progressive energy policies now in place in Canada. The industry is prepared to weather the current market conditions as long as it is left alone to reap the benefits when the market trends reverse.
The Government has fulfilled the commitments it made to Canadian consumers and the petroleum industry. To say that the policy is in a shambles is not right because the consumers were always at the front of our policies when we discussed them. Canada now has a flexible and fair energy policy, one of the most attractive and internationally competitive in the world. The only confusion about that fact rests with the Opposition.


Russell Gregoire MacLellan: Mr. Speaker, I suppose we will have to put the Hon. Parliamentary Secretary down as being doubtful in his support for this motion. With all due respect, I do not think that January is a good month in which to measure tourism. I do not think that there are a great many people who travel to
Canada by car during the month of January. I believe the summer will tell the story, and if the summer season indicates that there is an increase in tourism, then certainly the Hon. Member will have a point.
1 do not see the Minister of Energy, Mines and Resources (Miss Carney) as being concerned. I would have hoped that she would be here today to discuss this very important question. The motion before us is a comprehensive one and it really needs to be debated. I think her presence here was warranted.
The Parliamentary Secretary says that there is a shorter flow-through period in the United States and that that is the reason the price was able to decline more quickly. 1 do not agree. Eighty per cent of Canada's oil is supplied within Canada. We use about 1.4 million barrels per day and about
1.1	million barrels per day are produced here in Canada. There is quite a short flow-through period, certainly not justifying the two months that the Government says is necessary.
The Parliamentary Secretary referred to the Leader of the Opposition (Mr. Turner) and said that when he was Minister of Finance, he imposed a 45-day period before an increase in the price of gasoline. We must look at the fact that the industry wanted to increase the price the next day when world crude oil prices rose. At that time the Government said that there would be a transition period, that prices would not rise for a certain period of time in case it was an interim increase. It did not want consumers affected that way. I think it was a fair decision. Now, when prices go down, the industry wants to delay. We are still not sure what benefit the industry will give to the consumer or whether the consumer will receive the full benefit of the decline in world oil prices.
It is not a question of flow-through. As I said earlier, in the United States prices went down because retail gasoline is a separate commodity from crude oil, just as crude oil is a separate commodity from pork bellies. It does not relate to a flow-through period; it relates to the fact that there is a competitive situation and true deregulation in the United States. There is no deregulation in Canada when there are a few refineries, and particularly a Crown corporation, holding up the Canadian public and sticking a knife in the back of producers in terms of what it is offering. We are getting the worst of both worlds.


John Horton McDermid: Mr. Speaker, I thank the Hon. Member for jogging my memory on a couple of matters which I meant to mention in my remarks but did not. He can correct me if I am wrong, but I believe he said that there were four refineries in Canada.


Russell Gregoire MacLellan: No, I never said that.


John Horton McDermid: Well, somebody said it.


Russell Gregoire MacLellan: Four major ones.
March 19, 1986

Mir. McDermid: 1 can name about 10-Turbo, Chevron, Co-op, Petrosar, Ultramar, Irving, Shell, Texaco, Petro-Canada, Esso and Suncor; they all have refineries in Canada. As I understand it, there can be fair competition, and I think there is a fair number of them.
I was interested in the comments of the Hon. Member when he talked about Petro-Canada earlier today. I am not exactly sure now where the Liberals stand; it is very confusing. They want Petro-Canada to lead the price down but, when the price rises, they do not want it to lead the price up. They want us to call the President of the company and tell him what to do and how to run his company. If that is the case, why does it not just become a Department or part of the Ministry of Energy and let the Minister of Energy, Mines and Resources run Petro-Canada? We are not sure if they think it is too big now, if that was not intended in the first place, if we should sell it to the public or hang on to it. They are all over the map.
We must remember what was done by the Liberals, in conjunction with their NDP friends, in the minority Government of 1972-74. As one of the conditions of the Liberals maintaining their power in that period of time, they sold out their soul to their NDP friends to establish Petro-Canada, a window on the oil industry for exploration, to find out what was going on. What happened next? Then we find that it was into downstream activities by obtaining BP, Petrofina and so on, for which it paid exorbitant rates, according to any analyst.


Mr. Deans:: It was kind of like the Sun Oil purchase.


John Horton McDermid: I disagreed with that one too. My hon. friend across the way has referred to the Ontario Government purchase of Sun Oil. I was not pleased with that decision. I still have not had it explained to me properly, either. In any event, Petro-Canada is now a major oil company with upstream and downstream operations. We are not sure where the Liberals stand. We know what the NDP wants.


Ian Deans: Lower prices.


John Horton McDermid: The NDP wants to keep Petro-Canada and it wants to buy Imperial Oil. That is the first thing on its shopping list if and when it gets into power, heaven forbid!


Ian Deans: That is not the first thing. What are you talking about?


John Horton McDermid: The other day the Secretary of State for External Affairs (Mr. Clark) said that Canada was the toughest country in the world to govern and that if it were easy, we would turn it over to the NDP to run. He was absolutely right. We know exactly where NDP Members stand, but we are not sure where the Liberals stand.
At the present time the Government is examining ways to maintain a Canadian presence and ownership in the oil industry and at the same time rid ourselves, "ourselves" being the Government, of what has grown into an oil company. It is just another oil company. I think it was the Hon. Member for York South-Weston (Mr. Nunziata) who said that he did not like
Supply
going in there to fill up any more, so we know how he feels about Petro-Canada.


Ian Deans: Mr. Speaker, would the Hon. Member care to explain from where he gets his information? He makes compelling arguments based on what now would appear to be information drawn out of a hat. From where did he get the information that the first thing the NDP would do, when it formed the Government, is to take over Imperial Oil?


John Horton McDermid: Mr. Speaker, if the Hon. Member checks with his energy critic-


Ian Deans: I am asking from where the Hon. Member got the information.


John Horton McDermid: I was about to say that if the Hon. Member checked with his energy critic, he would find out from where I got the information. He felt that we should be taking over more foreign companies in the energy industry and, in his words, "our first target would probably be Imperial Oil".


Ian Deans: That is a different thing altogether.


Russell Gregoire MacLellan: Mr. Speaker, I welcome the opportunity to tell the Parliamentary Secretary exactly what is the policy of the Liberal Party on Petro-Canada. I think it is well known that we do not object to Petro-Canada being a vehicle of public policy. We feel that the Government should be able to direct Petro-Canada in its actions and act on behalf of consumers and producers. We are totally against the sale of any of the shares of Petro-Canada. When we said we wanted Petro-Canada to be a window on the market-place, we did not mean a whole hothouse. The purchase of Petrofina was to give its stations a presence in eastern Canada. The purchase of Gulf Canada is redundant because the window on the market-place was there. As I said, we now have a whole hothouse on the market-place. There is no competition because of the size of Petro-Canada and because of the Government's policy of gouging the producer and the consumer to try to boost the profit picture of Petro-Canada to make the best possible presentation in the market-place of an issue of shares to the private sector. It is ridiculous.
Canadians do not like Petro-Canada because of what the Government has done to it. Petro-Canada as a Crown corporation is perfectly acceptable and desirable to the Canadian public. However, Canadians do not want their own Crown corporation turned against them and gouging them, as the Government is doing in a cowardly fashion. Telling Petro-Canada to gouge consumers and producers, and then running, hiding and letting on that it had nothing to do with it, is not only bad economic policy or treachery to Canadians, but is downright cowardice.


John Horton McDermid: Mr. Speaker, I find it interesting that when the Liberals were in power and the prices of Petro-Canada were the same or higher than those of most other stations, it was not considered to be gouging the population then. Now, because the Conservatrices are in power and its prices are the

March 19, 1986
Supply
same as its competitors' in the market-place, it is gouging the public. The Hon. Member cannot have it both ways. I, for one, do not believe that the Canadian public is that stupid.


Donald Frank Mazankowski: He agrees with that.


John Horton McDermid: Sure he does; he is nodding his head and smiling.


Russell Gregoire MacLellan: I am not agreeing with that.


John Horton McDermid: The Canadian public does not buy that. The Canadian public has come to realize that Petro-Canada has been, always was and will be just another oil company. The Liberal Government had a window on the oil industry. It knew what was going on. It taxed that industry. It knew its inner workings, how it operated and everything else. I, for one, do not understand why they ever brough in Petro-Canada in the first place back in 1972-74. I do not think it has served a useful purpose. I think the Canadian people are beginning to realize that.
I am for Canadianization. I am all for Canadian ownership and I am all for Canadian companies, but I like them to be owned by the Canadian people, in the private sector and not by the Government. I have done a tremendous amount of travelling in the last year in some countries where the Government owns everything. It is a disaster. I do not think that the Government should be in the oil industry peddling gas up and down the streets.


Ian Deans: Mr. Speaker, I will have to be brief given that there are only nine minutes left. I say to my colleague to whom I indicated that I would leave a few moments for him, that it may be a few moments because I had not realized at the time that I would have only nine minutes. In any event, let me try to be as brief as I can.
I have for years felt that there was a singular lack of competition within the oil industry at the retail level. I have raised this matter not only here in the House of Commons but I can recall asking for an inquiry some years ago when I served in the Ontario Legislature. It was clear to me that it could not simply be by accident that every single gas station in any one area would charge exactly the same price for all of its products.
It was clear to me that if there was any competition of any kind that competition was solely the result of the effort of the gas station operator and his or her ability to provide a higher level of service and not a cheaper product.
I felt, I think probably now over 25 years, that some kind of action should be taken to bring about a competitive situation within the retail end of the petroleum industry here in Canada.
I can remember, at the time when the now Minister of Energy, Mines and Ressources (Miss Carney) introduced the Western Accord, she said:
Since the national energy policy was imposed ... Canadians have suffered from a bureaucratic nightmare, a nightmare which has frightened away foreign
investment, boosted prices at the pumps, and discouraged those who wanted to go out and find new sources of oil and gas. Those days arc over, too... We arc going to create the environment for market forces to operate with buyers and sellers involved. If prices go down, the product prices should go down.
This was the Minister's line at the time on March 28, 1985, when she brought to the House of Commons with great fanfare the Western Accord that she had been able to sign.
I must say that anyone looking at the events of the last few months within the oil industry would have to come to the conclusion that notwithstanding the intent of the Minister- and I do not for one moment doubt that she was serious and sincere in what she said-the result has been quite different.
We have not seen the kinds of reductions at the pump that ought to have been reflected as a result of the dramatic drop in world oil prices. We have, in fact, seen the continuation of managed prices, prices dictated by the major oil companies. We have seen the attempts being made on a continuous basis to strangle any of the independents who dared to step out of line. We have had examples of people and families who were in the retail oil business and who wanted to sell their product in a competitive market-place at a price that would have been somewhat below that charged by the major outlets, only to discover that they were either refused delivery of the product by those from whom they must purchase or they were told directly where there was any kind of contractual arrangement that they could not under any circumstances set a price that would, in their judgment, undercut or undermine the major outlets which were located in the immediate or same area as the independent operation.
Quite frankly, I say to the Minister of Energy, in her absence but through the Parliamentary Secretary, that even with the best intentions in the world, the structure that we have in Canada for the distribution of petroleum products to the consumer is managed in such a way as to make it virtually impossible for the competitive market-place, about which the Minister and her colleague speak so highly, to operate effectively, if at all. It is toward that end that we must address ourselves.
The Minister made much on the twelfth of this month of an announcement by Imperial Oil and Petro-Canada that they were going to reduce the price of gasoline by 2 cents per litre. The problem with it is that any reasonable thinking individual would have to agree that a reduction of 2 cents a litre, given the dramatic drop in the price of oil is miniscule. The drop from almost $30 a barrel to $12 a barrel should out of necessity result in something considerably more than a 2 cents a litre benefit to the consumer.
It not only is not enough, Mr. Speaker, there were areas in the country that did not even get the benefit of the 2 cents a litre drop.


John Horton McDermid: Where?


Ian Deans: In Toronto. Yes, where there had been one of those fictitious price wars going on, one of those drops in the price that are the result of the back-up of petroleum in the
March 19, 1986

system and the necessity to move it more quickly through the system.


Thomas Edward Siddon: That is not fictitious.


Ian Deans: It was not a price war in the sense that you and I understand it.


Thomas Edward Siddon: A back up.


Ian Deans: It was because there was a back up in the system and ail of the majors decided to move it through the system more quickly that they had to reduce the price. That is all. It was nothing to do with the price war. It was a managed price again.
If it was necessary to do that, then clearly it was done for one set of reasons, entirely separate and apart from the dramatic drop in the world price of oil, and everyone in Canada should benefit from the actual reduction of cost to the oil companies themselves and should benefit from the reduction of world price.
I did promise my colleague a few moments. I am sorry it is only two minutes, but I yield the floor to my colleague in the Conservative Party.


Paul Gagnon: Mr. Speaker, I was saddened and disappointed to learn that the Hon. Member for Hamilton (Mr. Deans) has decided not to run again for
Supply
election. I find him a real gentleman, a parliamentarian and one of the few who can logically develop an argument and articulate it. We have seen a good example of it. He talked about competition, and certainly we need more competition in the market-place.
One thing we, as the Government, have done is to remove any barriers for the transportation of petroleum and petroleum products across borders. This allows the independent dealers to import those gasoline products and not be locked in to the major refiners.
The Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) talked about the need to change the PGRT tax credit. He has analysed that very well. It is something that has to be done, but I must emphasize that it is only 57 days since the price collapsed. It is premature to act at this time. One only has to look at the spot market for the last three days. Prices have been going up. To act now is too soon.


Mr. Deputy Speaker:: It being six o'clock, it is my duty to inform the House that pursuant to Section 12 and Standing Order 82, proceedings on the motion have expired.
This House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6 p.m.
[Stage Direction]

Thursday, March 20, 1986