1986-02-04

Mr. Ian Waddell (Vancouver-Kingsway) moved:: That this House demands that the Government instruct Petro-Canada and its retail outlets to reduce their prices at the pump by six cents a litre, a move which would enable Petro-Canada to fulfil one of its basic purposes which is to provide Canada with reasonable energy prices.
He said: Thank you very much, Mr. Speaker, for allowing me to lead off in this very important debate, which at the moment is a major issue in the country. It is an issue which the Government is going to hear more and more about as there is a tax and consumer revolt out there in the country. Members will soon, if not already, be inundated with letters, telegrams saying, "Enough is enough", and that "the price of gasoline in Canada has gone too high".
Canadians are paying too much for gasoline at the pumps and for their home heating oil. The world price of oil is dramatically declining, but Canadians are being hosed at the pump. This Government, led by the present Energy Minister, is doing absolutely nothing about it. It is simply the friend of the big oil companies. It has forgotten the Canadian consumer. I say to the Government it forgets the Canadian consumer at its peril. Oil prices have come down 30 per cent since December 6, 1985; from $29 U.S. a barrel to $20 U.S. a barrel on January 28. Prices are even lower than that and still falling, and Canadians know that. Those who live close to the border can drive across and see that prices on the American side are dramatically lower. Contrary to what the Minister of Energy told me and this House last March, they can see that world oil prices are not being passed on. The decline is not being passed on to Canadian consumers.
In the Halifax Chronicle-Herald, January 28, Jim Meek, a very good energy reporter in the country, wrote about an application that was made to the Public Utilities Board there; it is the only jurisdiction in Canada where oil companies have to apply to increase their gasoline prices. I will quote what he says:
Milton Veniot, lawyer for the provincial Government, told the PUB that world oil prices have declined 35 to 40 per cent ($15 per barrel) in the past few weeks. A figure he said was equivalent to 9.4 cents a litre at the pumps.
A Shell Canada official, however, said outside the hearing that the actual figure is closer to 8 cents a litre.
Shell Canada is saying there is a decline in world oil prices which equals at least 8 cents a litre. We are saying in our motion today there should be a 20 per cent drop in pump prices. This is done by lowering the wholesale price by about 20 per cent. Right now the wholesale price of a litre of gas is about 30 cents. Therefore, it should be lowered by 6 cents a litre, and that is the figure in our motion.
The Minister of Energy has said, "Yes, it will take time to pass through the system". There have been cartoons to that effect in The Toronto Sun. "It will take time for it to pass through the system as we have a market system, and it will take time for these dramatic declines to pass through the system". This is tremendously naive on the part of the Minister of Energy. She just does not understand. In my submission that is not the way the industry works. The Government should know this.
There is a very famous report called the "Bertrand Report" done by the Director of Investigation and Research of the Combines Investigation Branch. It is entitled "The State of Competition in the Canadian Petroleum Industry". It was published about four or five years ago. Mr. Bertrand says, and I quote at page 19 of the first volume, right at the beginning:
In the 1958 to 1973 period, the majors-
Meaning the major oil companies.
-consistently used monopolistic practices to restrict competition from the independent sector and to impose the billions of dollars in excess costs on Canadians.
If you look at the way our oil industry works and at the Government's own studies you will see that this is what is called a classic oligopoly, it is non-competitive.
The pump does not immediately reflect declines in the market. I think the Minister is naive, at best, and at worst she is misleading us on this matter. Prices will not go down dramatically right away for two reasons. First, the Government is piling taxes onto the consumer at the pump and second there is an uncompetitive industry.
I looked at the price of gasoline in the Minister's own riding of Vancouver Centre, which is adjacent to my riding of Vancouver-Kingsway. When the Conservative Government took power in September, 1984 the price of gasoline was about 50 cents per litre. In January, 1986 the price was 56.2 cents per litre. Of that increase, about 2.4 cents was in taxes and about 3.8 cents went to the oil companies. We are faced with a combination of the Government increasing taxes and the oil companies increasing profits. The consumer is being hosed at the pump.

February 4, 1986
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To be more specific regarding taxes, since the Conservatives took power, the Government first increased the federal sales tax on gasoline from 9 per cent to 10 per cent in October,
1984,	a carryover from the Liberal Government. Then the Government raised the excise tax on gasoline by 2 cents per litre in its May 1985 Budget and this took effect in September,
1985.	The Government then increased the federal sales tax again from 10 per cent to 11 per cent on January 1, 1986, and it has scheduled another increase for the excise tax to take effect January 1, 1987. At that time, there will be another increase of 1 cent per litre, also as a result of the Finance Minister's May Budget. The Government keeps piling on taxes at the pump and the provinces enter the picture after that. They tack on an ad valorem tax to the federal tax.
Motorists are saying that enough is enough. I and many of my colleagues have received hundreds and indeed even thousands of coupons from the Canadian Automobile Association saying that the cost of gasoline is discouraging both Canadian and U.S. tourism and damaging our economy, and that the high price is unfair to those who must use their cars to drive to work. They say that motorists are prepared to pay their share of the costs to help build and maintain the highways, but they think it has now become an inequitable tax burden. I agree with the Canadian Automobile Association. We must stop raising taxes at the pump.
In her defence, the Minister says that she needs the money because of the deficit and to pay for social services. There is some truth to that. Yes, the Government does need money to pay for social services. However, I would point to what happened last week in the House of Commons. The House passed Bill C-82 which phased out the petroleum and gas revenue tax to the tune of $5.3 billion up to 1990. The Government gave the oil industry $5.3 billion while telling the motorists at the pump that it needs their money to pay for social services. Why did the Government give all that money to a very rich and fat industry? When the Minister says that we need money for social services, I ask why she passed Bill C-82 which phased out the tax and gave such a great lump sum to the oil industry.
The Government says that we have to give money to the oil industry because it will create 300,000 new jobs. I took a good look at that figure. This is a capital-intensive industry which spends most of its money on equipment, much of it on foreign equipment, and not on job creation. Sure it creates some jobs, but that figure came right out of the brief of the Canadian Petroleum Association, the lobby group for big oil companies which makes submissions to the energy committees of the Senate and the House of Commons.
The Government and the Minister are patsies for the oil companies. It is very simple to be popular, as the Minister has been for the past 10 months, by giving money to the oil companies. However, we finally see that the result is that she is taking money out of the pockets of the motorists.
How poor is this poor oil industry? Imperial Oil just declared year-end profits last year of $680 million. For the last quarter of 1985 when oil prices were going down, its profit was $250 million, a record, up by $50 million for the last quarter.
This is outrageous because at the same time the consumer is being milked at the pump.
There is no guarantee that prices will go down at the pump as they drop dramatically at the world level. I would like to indicate why that is so. Yesterday, I phoned Mrs. Cora McAra. She and her husband operate what was once a Gulf station, now a Petro-Canada station at Gravenhurst. I will refer to the notes I made while I was talking to her over the phone. She said that Petro-Canada wanted to have a difference of four-tenths of a litre in price between self-serve and full-service. The McAras wanted two-tenths of a cent a litre because the station down the road had that price and they wanted to compete with it. They even offered to pay the difference out of their own pockets. Petro-Canada refused. The McAras have a contract on consignment so Petro-Canada can dictate prices. However, the contract also indicated that they should be competitive.
A few days later, Imperial Oil, the other station to which I referred, put its price down to 47.9 cents per litre, so the McAras said to hell with it and decided to follow that move since they had to remain competitive. What did Petro-Canada, the instrument of Canadian oil policy, or so we thought, do? It closed the pumps on these poor people.


Mr. Orlikow:: That's the free enterprise system.


Ian Gardiner Waddell: Yes, that's their system. There was a meeting between the McAras and Petro-Canada. Petro-Canada's representatives said that they were there to chastise and intimidate her. Petro-Canada said it was in the business of making money. If they lowered the price two-tenths of a cent here, the price would have to be lowered in other places and Petro-Canada did not want to do that. It said that this is the way it is going to be so the contract was terminated. The McAras will lose $50,000 because the contract was to go until May 1987. Mrs. McAra told me that lots of Petro-Canada dealers are in the same position. They are not happy because the price is staying high. That is the way Petro-Canada deals with ordinary Canadians and small business people.
The Conservative Government has directed Petro-Canada to act like a private-sector company. The Government is on the way to destroying Petro-Canada with its national policy. This is a perversion of what Petro-Canada was set up to do. Petro-Canada was set up to be a price leader. That is why I have put this motion before the House today. Petro-Canada should be taking the lead in getting prices down but that is not happening, and it could be happening.
I said earlier that this is not a competitive industry. I do not have time to go into detail, but let me say a few things about it. Government Members can refer to various restrictive trade practices hearings that have been going on for the last 10 years to learn why the industry is not competitive. There is the consignment sales trick, the example that occurred with Petro-Canada and the McAras. There is the fighting brands trick. That is simple. That is when the big oil companies form another oil company, pretend it is a small oil company and force small companies out of business or discipline independent
February 4, 1986

dealers. Third, there is the matter of special allowances which control how much gasoline the dealers receive. Finally, there are contracts that restrict sales and purchases. All of this appears in the Bertrand Report.
I looked at the situation in the United States and found that what Mr. Bertrand said in his report was true. He said that one of the problems we have in Canada is that those who refine and wholesale the gas and sell it to the retailers are all the same people because 80 per cent of the industry is controlled by four or five companies. These companies can squeeze out the independents and create an uncompetitive industry. In three states of the United States prices are lower. In those states, there is a law providing that the retailer, the wholesaler and the refiner must be different parties. That is called divestment. California is another state where there are low prices. The reason is that there is lots of refinery capacity there.
What does our Government do in Canada? I note that the Hon. Member from the Montreal area, the Minister of State for Mines (Mr. Layton), is following my speech. Let him tell me why the Government can close those refineries. [Translation]
Why did the Government of Canada close the refinery in the Montreal area? Because it would lead to higher gas prices, another increase, and again the consumer is the scapegoat of Conservative policies.

I just say that we in the NDP are fighting for those people in the east end of Montreal in order that their refinery will not be closed, and so that they will have some refinery capacity. We are doing this so that the prices will not be restricted again and put up by the big oil companies. That is exactly what the Conservative back-benchers were saying; and I am reminded of the words of the Hon. Member for Duvernay (Mr. Della Noce) who understands this.
The Government does not have to go as far as I suggest. It could just look at the report of the Restrictive Trade Practices Commission. The Director of Investigation and Research in his report to the Commission last fall made a number of recommendations. He said, first, that we should end consignment sales and special allowances. Second, he said that we should end restrictive covenants; and, third, that we should end exclusive dealings. That would work. I ask Hon. Members to consider the McAra situation in this regard. Instead of just having to deal with Petro-Canada, the Government could deal with other oil companies as well and they would not be locked into a contract. That is one way the Government could go, but it is not doing that.
There is another option the Government has, and my Leader, the Hon. Member for Oshawa (Mr. Broadbent) has said this in the House. Under Section 7(2) of the Petro-Canada Act, the Government could order Petro-Canada to reduce prices and be a leader, not a follower, as the Minister of
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Energy, Mines and Resources (Miss Carney) has said. It could be a leader in terms of getting prices down for motorists. I heard the Minister of Energy say that this may be illegal. I cannot see that. The Government is a majority shareholder in Petro-Canada. In fact, it is the only shareholder. Surely, even the majority shareholders of Imperial Oil could order Imperial Oil to do certain things. It is clear that the Government has the power under Section 7(2) of the Petro-Canada Act.
Also, in this regard, I would ask, since when is reducing prices a form of price fixing? I do not think that follows. In fact, I think it is a red herring and a cop-out. The Government could do certain things.
I wish to conclude by saying that we have to be fair in the country. We have to look at the broad view as well. There is a big slump in world oil prices-in fact, a dramatic slump. What we are arguing is that the Canadian consumer should benefit from that slump. Of course, there will be a problem on the other side. People will ask; "What about the Canadian producer?" We in the NDP have never argued for a market price for oil. We do not think there is a real free market in oil when there is OPEC and a few large American multinational oil companies which basically control world market. One or the other group controls the world market.
What has happened by going to world market prices is that the Minister of Energy has taken an enormous gamble by deregulating the industry. That is to say if the price drops dramatically below $20 a barrel, and it goes down into the teens or low teens, then that will create a problem for the western producers. There may be a point where the price becomes too low, and I acknowledge that. I am not advocating that the consumer always receive benefits and that the price go down to the lowest possible price at the pump. We have to keep Canadian industry-and I underline the word Canadian-and small producers alive. We have to watch that situation, and I draw that to the attention of the House. The point is that right now the price of oil is inflated by at least six cents a litre and something has to happen. It is only fair that the consumer receive some benefit because the consumer has not been receiving any benefit from the Government at all.
The Minister of Energy looked weak last week in the House. The Government's energy policy was exposed for what it is. The Minister was great when she was giving money away to the oil companies, but neither she nor her Government has the guts to get in there and protect the Canadian consumer. The Government can do this by using Section 7(2) of the Petro-Canada Act. In fact, it can be a leader instead of a follower.
I say to the Government: This consumer revolt will force action later if no action is taken now. Do not wait for 60 or 90 days in an uncompetitive oil system. Use Petro-Canada now as a leader and force those prices down in order to give the consumer a benefit. In this way all Canadians, through lower interest rates, increased purchasing power, and so on, will benefit. That is the intent of my motion today.
Therefore, to summarize, my motion reads as follows:
That this House demands that the government instruct Petro-Canada and its retail outlets to reduce their prices at the pump by six cents a litre, a move which
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February 4, 1986
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would enable Petro-Canada to fulfil one of its basic purposes which is to provide Canada with reasonable energy prices.


The Acting Speaker (Mr. Charest):: Are there questions or comments? The Hon. Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid).


Mr. McDermid:: Mr. Speaker, I have a couple of questions I would like to ask of my hon. friend from Vancouver-Kingsway. First, how did he arrive at the six cents a litre figure? Second, his leader, once he came back from a visit to Calgary where he supported some provincial NDP candidate, advocated a floor price for oil. All of a sudden he said that we have to help the oil companies now that the price of oil is dropping so fast. Can the Hon. Member tell us what that floor price should be set at? How will he explain to consumers, if the oil price were to drop below that, that they would not benefit from that drop?


Ian Gardiner Waddell: Mr. Speaker, I thought I answered both of those questions in my speech. At the beginning of my remarks I cited the Shell lawyer who said that the price was actually about nine cents a litre too high. I said that there should be a 20 per cent drop in pump prices. I also said that this should be done by lowering the wholesale price by about 20 per cent. 1 said that right now I think the wholesale price is about 30 cents a litre. Therefore, I advocated that the price be lowered by about six cents a litre.
The association of petroleum marketers is somewhat of an authority on selling gas at the pump, and on refining. This group markets 15 per cent of the gas in Canada and it has said that gasoline is from five cents to six cents a litre too high at the moment for consumers. 1 invite the Hon. Member to drop across the American border and see what the prices are there.
With respect to the fairness doctrine, I said in my speech that it has always been the position of the NDP that we have not advocated a market price. The Minister of Energy and the Premier of Alberta have hoisted themselves with their own petard. They have been so keen on deregulating, which the Western Accord did, that they have exposed the industry, if the price falls through the floor. The price has not fallen through the floor yet, but it has gone down dramatically.
What 1 am advocating at this point in time, as I said in my speech, is that there should be a break for the consumers. The consumers have not received any break and they deserve one. It is only equitable and fair that they receive one. If we do not do something then those oil companies will just keep the price high. They are not going to put the price down. There will have to be pressure brought to bear on them. I did not advocate a floor price.


John Horton McDermid: But your Leader did.


Ian Gardiner Waddell: The Hon. Member recognizes that there will be a problem if the price goes through the floor. The Canadian industry will be in real trouble. We have not reached that point yet. That is what I was saying in my speech.
I remind the Hon. Member that he should read the Western Accord, which was written by his own Government. I do not
have a copy here in front of me. However, if he were to look at it he would find that it contains a clause which states something along those lines; it gives the Government the power to intervene if prices do get into real difficulty. I am simply saying that it is time to give the consumer a break. I have warned that to be fair in the future, if we see dramatically low prices, then we have to look at whether or not at that time the producer should be given a break.


John Horton McDermid: The Hon. Member has been the energy critic for his Party for a fairly long period of time. One would think by now that would understand the industry a little. In his speech he mentioned that the prices started to come down in mid-December after the OPEC meeting on December 9, but they did not really fall dramatically until-in his words- January 28. He knows as well as anyone else-and he is being mischievous in saying that prices can drop immediately-that it takes time for that oil to come out of the ground, to be pumped to the refineries, to be refined and to get to the pumps. He knows that takes from six weeks to eight weeks, at least. With the dramatic drop in late January, those prices will not hit the pumps until late March. The Hon. Member knows that.
What the Hon. Member would like to see is the national oil company, Petro-Canada, drop its price and lose money. The Government then has to come along and subsidize it, meaning the taxpayer has to subsidize gas prices at the pumps. That is completely unrealistic.


David Orlikow: That's nonsense, and you know it.


John Horton McDermid: The Hon. Member knows that. He is just being mischievous in his presentation.


Ian Gardiner Waddell: Mr. Speaker, the Hon. Member says 1 am being mischievous. That is an insult to all those thousands of Canadian consumers who are protesting these prices. I am making their argument today. The Hon. Member is saying they are being mischievous and is putting down ordinary Canadians, and they will not be put down like that. There is rebellion going on; there is a consumers' revolt. 1 do not know that prices are going to come down. I do not expect that the prices will necessarily come down in 60 days. That is no magic number. I put it to you, Mr. Speaker, that the Minister of Energy, Mines and Resources the boss of the Parliamentary Secretary, is not quite so sure either. Why else did she send a Telex-after a lot of prodding-to the industries? It is because she, too, is a little worried that they are not going to lower the prices. Their past history is to scoop up as much profit as they can. Unless we put the pressure on them, they are not going to lower the prices. It is not a competitive system.
The petroleum marketers told me that Mr. Conrad, whom I mentioned, has said that if prices were to be reflected, we could buy refined oil in New York which would be six cents to ten cents a litre lower. It is only a hope and a prayer that those prices are going to come down. The only way they will come
February 4, 1986

down is if we keep the pressure on this Government and on the oil companies to get those prices down.


Mr. Fontaine:: Mr. Speaker, I would suggest that the Hon. Member for Vancouver-Kingsway (Mr. Waddell) ought to be concerned about the fate of consumers of petroleum products.
I wonder whether the Government should have forced the company to price its products without consideration for the market place and whether the company should be subsidized to a degree.
In short, the suggestion of the Hon. Member for Vancouver-Kingsway is that we ought to levy additional taxes to subsidize people who buy petroleum products.
How can he reconcile his call for a six-cent a litre decrease with higher taxes, because in fact he is recommending that the Government make up the difference? Does the Government not represent all consumers? Should the Government not Fill its coffers before redistributing the wealth? Higher expenditures mean a higher deficit, and I should think the Hon. Member knows full well we simply have to get a handle on that deficit if only because it is the only way to economic recovery.
So why would the Hon. Member not try to explain his theory on the basis of general economics rather than specific cases? How can the Hon. Member advocate unrestricted redistribution of wealth without asking taxpayers to ante up? I wish he would explain that.


The Acting Speaker (Mr. Charest):: A short answer from the Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Ian Gardiner Waddell: It is not a matter of rates, Mr. Speaker. For instance, does the Hon. Member for Levis want Imperial Oil to make more money after posting a $688 million profit in 1985? It is not a matter of subsidies, it is a matter of justice for consumers. There is no question of allowing Petro-Canada to boost prices. I am saying that Petro-Canada must be consumer-oriented, and there is a lot of money for Petro-Canada as well as for Imperial Oil and the other major oil companies.

Even with the price at six cents a litre lower, I think there is money there.


The Acting Speaker (Mr. Charest):: Order. I am sorry to interrupt the Hon. Member but the period for questions and comments is now over. Resuming debate.


Hon. Bob Layton (Minister of State (Mines)):: Mr. Speaker, I rise to inform the House that I cannot support the motion put forward by the Hon. Member for Vancouver-Kingsway (Mr. Waddell). I think the motion is well meant. All of us would like to see the consumers get a break at the gas pumps. But it is also misguided because it proposes a disastrous means
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of achieving that end. In fact, the motion reflects a basic misconception on the part of both Opposition Parties that the Government of Canada should play the leading role in determining oil prices. The previous Government has a well documented history of interventionist policies.
The belief that Canadians can be sheltered from the effects of fluctuating oil prices was one of the cornerstones of the infamous National Energy Program. The NEP was hailed by the Liberal Party as the answer to all of Canada's energy problems. It was promoted as being fair to all Canadians. We were told that it would create opportunity in the industry and that it would ensure security of supply. But the reality did not live up to the promise. The NEP turned out to be one of the most damaging programs ever instituted by a Canadian Government. Under the National Energy Program, from October 1980 to this past year-less than Five years-the prices consumers paid for oil and gas and oil products rose by 80 per cent. Let me remind Hon. Members that it was the Liberal Government of that day which was setting the prices.


Mr. Towers:: Aided by the NDP.


Robert E.J. Layton: Quite apart from the impact on consumers, the NEP spelled disaster for the industry. Under its interventionist policies and excessive tax regimes, the oil and gas industry stagnated. Foreign investment left the country. The industry lost its confidence and energy became an arena for federal-provincial bickering. Indeed, it divided our country.
It is not the policy of this Government to interfere with the marketplace. We believe that markets operate most effectively when they operate free of the whims of politicians and the machinations of bureaucrats. We have taken steps to free up the oil and gas markets and we are not about to reverse that process by acceding to this ill-conceived motion which is before the House today. The Government of Canada would no more order Petro-Canada to reduce its retail prices than it would tell General Motors what to charge for its cars or tell IGA what to charge for its bread.
One of the very First things we did as a new Government was to give Petro-Canada a new mandate. We told it to operate in a commercial, private sector fashion. We told it, if it wanted money, to raise it itself, because the taxpayers' purse is closed. The corporation has since shown it can compete as a private sector entity. It took the initiative in purchasing GulFs downstream assets from Olympia and York using its own funds and borrowings.
We believe that Petro-Canada is and will continue to be an important player in Canada's energy industry. In many respects, it will be the leader, but it will be subject to the natural forces of the marketplace, as are private firms. This does not mean that we do not want lower prices for consumers. Indeed, we expect lower prices in the weeks and months ahead if the current world oil price slump endures.
The opposition does not have a monopoly on concern for the consumer. The Minister of Energy, Mines and Resources (Miss Carney) has written to the Chief Executive OfFicers of the oil refinery companies underscoring the expectation that

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consumers will see the benefits of lower prices. However, we are not in the business of ordering price reductions by Petro-Canada or any other firm. The prices that consumers paid under the National Energy Program have increased by over 80 per cent. Our policies are designed to strike a best balance between the interests of producers and those of consumers. We would not be benefiting consumers in the long run by taking a role in setting prices. We would only be disturbing the otherwise smooth workings of the marketplace. By taking a hands-off approach we are ensuring that prices will drop in an orderly and realistic fashion. Prices in the coming weeks will reflect supply and demand, local competition, and the depletion of the existing stocks of higher-priced crude.
To fully appreciate why domestic gasoline prices have not declined with world oil prices, Mr. Speaker, you must understand a basic operating principle of the oil industry. Retailing oil and gas is not like retailing bread. You do not move it through your store in a matter of hours or days. Much of our crude oil is purchased months in advance. I believe that the industry standard is to have one to two months of crude oil and product in reserve. As a result, Canada's oil companies have large inventories that were purchased in November and December before world prices began to drop sharply. This gasoline has to be sold before the cheaper crude now being purchased can work its way through the system.
Even Hon. Members across the floor cannot expect oil companies to sell gasoline at a loss. If they do, they should expect all other industries with feed stock and product inventories to pass through the news, and I emphasize "news", of price cuts on raw material instantly. This would apply to many of our industries including farming. Canadians can expect to see lower prices at the pumps, Mr. Speaker. Exactly when will depend largely on how quickly they deplete existing stock of more expensive crude.
I assure Hon. Members that the oil companies are well aware of the Government's stand on pricing. On January 28 my colleague, the Minister of Energy, Mines and Resources sent telexes to the oil industry leaders telling them that the Government expects that consumers will benefit from crude oil price reductions. We are looking to industry to ensure that those reductions are passed on as soon as possible and we have no reason to believe that they will not be passed on.
I was surprised to read in press reports last week that the federal energy policy would have to be completely rewritten in the face of declining world prices. This would have been a typical response of the previous Government. With no confidence in ordinary Canadians, it would believe that the Government and the bureaucrats knew better than buyers and sellers. Quite to the contrary, our policies were developed to be flexible to the movements of the marketplace.
Price reductions have been anticipated for more than a year. We also anticipate that prices will begin to rise again in the early 1990s, about the time when many of Canada's megaprojects will come on stream. This is called long-term planning
and it is something that there was all too little of under the previous Government.
I said earlier that our policies were designed to benefit both producers and consumers. They are, in fact, benefitting all Canadians. The Atlantic Accord was our first important energy agreement. It set the tone for everything that was to follow. As Hon. Members know, the Atlantic Accord ended years of protracted federal-provincial disputes over offshore resources. In establishing joint management in the offshore it made Newfoundland an equal partner in Confederation and paved the way for the development of the promising Hibernia field. While the most immediate benefits will be in eastern Canada, Mr. Speaker, all Canadians will benefit from the Atlantic Accord. It was an important step in establishing security of future oil and gas supplies.
I have already discussed the positive aspects of deregulation of crude oil prices which we achieved in the Western Accord. These prices are now determined by the market and increases will work their way through the production, transportation, and refining system to the gas pumps. But the Western Accord also removed inordinate taxation and regulation of the oil industry, and substantially improved its investment prospects. Investment means jobs and job creation benefits all Canadians.
A report for BP Canada and Petro-Canada Resources by the Canadian Energy Resource Institute illustrates the significant impact of just one project that will expand, given the environment created by the Western Accord. The Wolf Lake oil sands project northeast of Edmonton is expected to produce 61 million barrels of oil at a rate of 7,000 barrels a day. Preproduction costs are $115 million and operating costs are estimated at $1.1 billion over the 25 year life of the project. Wolf Lake will generate approximately $2.2 billion in income for those 25 years. Seventy-one per cent of this will occur in Alberta and 15 per cent will occur in Ontario and Quebec. The project could create 22,000 person years of employment, 5 per cent in Alberta and 34 per cent in Ontario and Quebec. Most of those jobs would be created through the life of the operating phase of the project. For every dollar spent on the Wolf Lake project during construction and operation, another $1.25 will be generated and spent throughout the economy. Those are the facts and they prove that producers are not the only ones benefitting from the new federal energy policy.
Our new natural gas markets and pricing agreement also reflects the all-important balance between benefits for consumers as well as producers. As the Minister of Energy has said, it is an agreement under which all parties win. In keeping with our policy that Government has no role in determining prices, the natural gas agreement provides for price deregulation as of November 1, 1986. After that all sales will be negotiated directly between buyers and sellers. This is already happening in some cases.
Producers benefit from this approach because it widens their markets and enables them to compete free of Government constraints. Relaxed rules for exporting natural gas also open up the U.S. market to Canada's industry. Consumers are also big winners, Mr. Speaker. Today they are paying less for
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natural gas as a direct result of this new agreement than they would have under the old regime. They can expect to benefit from a market characterized by competitive pricing and new suppliers.
Finally, Mr. Speaker, our new frontier energy policy promises long-term benefits for all Canadians. It frees industry from excessive taxation and regulation and establishes realistic and internationally competitive incentives for frontier exploration and development. This activity will trigger a new round of job creation and social and industrial benefits, and will eventually contribute to Canada's security of supply.
None of these benefits can be realized without investment from both foreign and domestic sources. Canada's oil and gas industry is regarded as an excellent investment, even in these days of declining prices. In fact, oil and gas investment intentions were up about $2 billion in 1985, more than 25 per cent over the previous year. The Petroleum Services Association of Canada has estimated that this investment has created more than 10,000 jobs in the energy sector alone.
A study done earlier this year for the Independent Petroleum Association of Canada illustrates the benefits of a $1 billion investment in upstream conventional oil and gas projects. According to the study by Woods Gordon, this investment generates secondary effects of up to $1.4 billion in the Gross National Product. It creates 30,000 person years of employment. These are jobs for Canadians, jobs for people who were hurt by the interventionist policies of the previous Government.
While 80 per cent of the direct spending would be in Alberta and Saskatchewan, 30 per cent of the total income generated and 33 per cent of the employment spin-offs will be in Ontario and Quebec.
Oil and gas development is only one component, albeit an important one, of the Government's over-all economic strategy. It is this strategy that has contributed 6.6 per cent in growth to Canada's GNP during the third quarter of 1985. In the 17 months since the Government was elected, more than 450,000 new jobs have been created. As our Prime Minister (Mr. Mulroney) has said, that accounts for nearly 1,000 jobs per day since September 4, 1984.
Productivity surged by 4.9 per cent in 1985. The Organization for Economic Co-operation and Development predicts that Canada's growth in GNP in 1986 will be second only to Japan and that its traditional first-place ranking in job creation will resume in 1986. Inflation is being held at the 4 per cent range. Business investment was up by an annual rate of 11 per cent in the third quarter of 1985. These facts illustrate very clearly how our policies are helping the average Canadian.
To those who criticize our energy policy as being weighted in favour of the producers, I can only say that all Canadians are benefiting now from our initiatives of the past months and they can expect to benefit a great deal more in the future.
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Mr. Althouse:: Mr. Speaker, the Hon. Minister said that it was not the policy of his Party and his Government to condone floor prices. One of the examples he gave was that his Government would not tell IGA what to charge for bread. Does that mean that his Government will abandon the floor price that it has offered to wheat producers over these past 50 years?


Robert E.J. Layton: Mr. Speaker, there was no reference to floor prices in my remarks. We want the market-place to determine the price of commodities and services. I think this is the characteristic of our Government which is encouraging the development of our country.


Victor Fredrich (Vic) Althouse: If the Minister is making it quite clear that the market-place will determine price, why does he continue to portray the previous Government as being the one which increased the price to consumers by 80 per cent when the price would have increased by 100 per cent if it was allowed to be at the market price? Why does he not point that out?


Robert E.J. Layton: Mr. Speaker, the Hon. Member has cited a hypothesis about what may have been the results.


Victor Fredrich (Vic) Althouse: Would have been.


Robert E.J. Layton: The facts are that the price increased 80 per cent under the National Energy Program when it was regulated and decided upon by the previous Government.


Ian Gardiner Waddell: The Hon. Member said that we should follow the market system and that ultimately the drop in world oil prices will be passed on to Canadian consumers as it filters through the system into the market. He also said that this reduction would depend on how quickly the oil companies deplete their existing supplies for which they paid more. Who will determine when the oil companies have depleted their supply of higher priced oil and commence refining the lower priced oil?


Robert E.J. Layton: Mr. Speaker, I believe in the market-place. The Government believes that there will be a competitive element in the distribution and sales of petroleum products that will achieve those reductions in price. We can expect those prices to reflect exactly what the Hon. Member is looking for.


Ian Gardiner Waddell: Mr. Speaker, I think the Hon. Member believes in Tinker Bell and if he wishes hard enough for something it will become reality. He will be led by the oligopolistic oil companies that will make all kinds of money from this.
When the Government removed the Canadian special ownership charge of .7 cents a litre some companies dropped their price by .6 cents a litre and kept the remainder. It was finally up to Petro-Canada to put an advertisement in The Globe and Mail saying that the price should have gone down by .6 cents a litre. In some parts of the country the price went up in spite of the tax being removed last June.
Why will the Minister not make Petro-Canada a leader, as set out in the Act? Why does the Government not use Petro-

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Canada as a price leader rather than a follower of the other oil companies? As I pointed out in my speech, in the case of the McAra family, it is even acting like a restrictive oil company.


Robert E.J. Layton: Mr. Speaker, the Hon. Member represents the philosophy that bureaucrats and Government always have a better answer than the private sector. Our Government was elected by a mass of Canadians who were tired of that kind of Government and wanted a change from that kind of attitude.
With regard to price reductions, I am confident that the companies which are in competition for the market-place, including Petro-Canada, will look for every opportunity to bring their price down according to their costs. The prices will drop as a result of that pressure. That is how the market-place has always worked.
With respect to the contractual relationship between Petro-Canada or any of the companies and their dealers, those are the conditions of the contract.


Mr. Boudria:: Mr. Speaker, I want to ask the Minister if he recalls the Atlantic caucus of the Conservative Party held on August 2, 1984.


An Hon. Member:: Were you listening?


Don Boudria: I am reading from a press release-I do not like that accusation very much. I do not think any Liberal has to take those kinds of disparaging remarks from a Conservative when one of his own colleagues admitted being guilty to listening to opposition Members. Now he is accusing opposition Members of listening to Tory caucus meetings and I suggest that he apologize to the House.


The Acting Speaker (Mr. Charest):: The Hon. Member for Burnaby.


Mr. Robinson:: Mr. Speaker, the Minister has indicated his great faith in competition in the market-place. In light of that profound faith, does he support the decision of Petro-Canada to refuse to allow an independent operator in Ontario to maintain their prices at a lower level than some of their competitors? Does he support that policy?


Robert E.J. Layton: Mr. Speaker, I hear the same question posed to the Minister and the Parliamentary Secretary to the Minister. It is my understanding that there were contractual arrangements in this instance. I am sure all parties to the contract knew what they were signing at the time.


The Acting Speaker (Mr. Charest):: Resuming debate.


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, if Canadians were nervous about the energy policies of this Government before the Minister's speech, they are now petrified. The Minister has given absolutely no comfort to energy consumers but he has caused them to be further alarmed.
This is a very serious issue. People are very upset with this Government and its policy of increasing taxes on energy. Look at the difference between the cost of gasoline here compared with the U.S. It is remarkable. In Washington, D.C., gasoline costs 43.55 cents a litre. In Ottawa it is 56.3 cents. In Seattle, Washington, it is only 39.5 cents, but in Vancouver it is almost 20 cents more at 59 cents a litre.
[ Translation]
In the Province of Quebec the price gap between the City of Baie-Comeau and the City of Portland, Maine, is unbelievable-61.9 cents a litre in Baie-Comeau, 45.43 cents in Portland, Maine, an unbelievable difference! It is not fair! But it is always the same story with Conservative Governments: the major oil companies are winners and the consumers are losers. [English]
In October of 1984 a litre of gasoline cost 42.9 cents in Toronto. One year later that same litre had jumped to 49.4 cents, an increase of 15.2 per cent, even though the world price of crude oil had declined. The Minister of Energy, Mines and Resources (Miss Carney) talks about the Government not wanting interventionist policies. She says the Liberal Government's inverventionist policies were bad. In fact, the Liberal Government's policies put the consumer first and foremost. Those policies kept the price of our crude oil below the world price. That was a benefit to the consumer.
The policies of this Conservative Government are having a detrimental effect, not only on the consumer at the pump but on our economy as a whole. My heaven's, if this Government is such a boom to the business community, why is the Canadian dollar in a free fall on world money markets? This morning The Globe and Mail referred to this Government as a nervous Government, and that is one of the reasons why confidence in the Canadian dollar has fallen. Who can have confidence in this Government? The Minister said the former Liberal Government increased the price of gasoline by 80 per cent, from 32 cents a litre to 50 cents a litre. How can you have confidence in a Government whose arithmetic is wrong? Going from 32 cents to 50 cents a litre is not an 80 per cent increase. How in the name of heaven can the consumer trust the policies of a Government that cannot even divide?


An Hon. Member:: How much is it?


Russell Gregoire MacLellan: It's 60 something per cent.


Some Hon. Members:: Oh, oh!


Russell Gregoire MacLellan: But it's not 80 per cent. That increase would have been much higher had it not been for the policies of the Liberal Government. The one thing the Conservative Government does do well is squeeze every last cent out of the consumer at the pumps. They are paying more now even though the world price of crude has declined. The Minister says we are paying more because we are getting more than just gasoline. Sure we are. We are getting a lot more federal taxes. This Government has increased federal taxes on a litre of
February 4, 1986

gasoline by 60 per cent. We are paying the federal Government 3.09 cents more for a litre of gasoline now than we were.
The Minister says we need the tax dollars to pay for social services which Canadians want and need. Why then does the Government raise taxes on gasoline when it is cutting back on social programs? If we need these increased taxes to increase social programs why is the Government at the same time decreasing indexation of family allowances? Why did the Government try to roll back indexation of old age pensions? Then, when the Government reversed its position, it said it was doing so because pensioners should not really be subject to partial indexation. This was the position after having said the opposite. And how is the Government going to pay for it? Once again by increasing the cost of a litre of gasoline in 1987 by one cent. This is incredible. The Government backed down on the deindexation of old age pensioners and said because it was doing the pensioners a favour it had to charge more for gasoline.
What is this doing to our economy? What is the Government trying to have the people of Canada believe, that increasing the price of gasoline is a favour to Canadians? This was not the story the Government gave us last spring when it brought in the Western Accord and did away with the Petroleum Gas Revenue Tax. Members opposite said by doing away with the PGRT we would be able to develop the energy sector, that it means up to 300,000 jobs for Canadians. This money we are not charging the oil companies will flow through the system to the benefit of Canadians by creating employment. That is what we were told. Yet the Government is now saying we need higher taxes to create this activity in the energy sector.
The Government says the industry will save $5 billion. That is a phenomenally large sum to place on the backs of Canadian consumers, but it is even more than that. Analysts have said that the federal Government will lose as much as $12.2 billion by 1990 as a result of doing away with the PGRT. We know who is going to have to pick up the tab for that. The Canadian consumer is being scalded for this amount through increased taxation at the pumps.
According to analysts the oil companies will see their profits rise as much as 160 per cent by 1990. The Government assures us that all this will flow through to the energy sector and industry. If the Government is so sure of that why is it scalding the Canadian consumer at the pumps? In 1984 the industry's profits were $3.1 billion. Energy analysts predict they could go as high as $8.1 billion by 1990. What do Canadian consumers do when they are being dangled from a 12-storey window by this Government? Who can they rely on? The former Liberal Government said they could rely on Petro-Canada. However, what has this Government done with Petro-Canada. It has told it to go out and scalp and scald the consumer. In fact, lead the way with price increases. That is what the Government said. As well, that company will become at least partially privatized. The Canadian people are being asked to pay for Petro-Canada yet a third time. Canadians have already paid through tax dollars to the extent of $4.3 billion. If you count the equity of
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Canada, which would be less the retained earnings to the end of 1983, including money from the Canadian ownership account, the amount would be over $8 billion that Canadians have paid for Petro-Canada. The people have paid for Petro-Canada already. They are paying again with Petro-Canada's usury and excessive charges at the pumps, Mr. Speaker. Now the people will have to pay a third time when buying the shares on the private market.


Don Boudria: The people are being gouged.


Russell Gregoire MacLellan: The Minister says it takes time for the cheaper crude to work its way through the system, so why did the price not fall in December? The price has been going down, albeit not that much, since October. Why did we not have a price decrease at least by December if the words of the Minister are correct, that it takes one to two months to work through the system? Not only have we not seen a decrease but we have seen an increase. The increase was led by Petro-Canada; it increased its prices twice in that same period of November and December. What kind of responsibility is that on the part of the Government?
What could be a nicer scenario for the multinational oil companies than to have Canada's own Crown corporation increase the price? The multinationals tuck in behind and increase their prices by the same amount. How can any Government say anything to them if the Crown corporation is leading the way and the multinationals are following? How can any Government say anything to them in that regard? This is incredible deceit. Petro-Canada is being asked to lead the increases running contrary to the welfare of the people.
The Minister told us that she created a market-sensitive regime, a system that allows prices to fall as world prices fall. Why is that system not working? Why is the wholesale price that Petro-Canada charges for a litre of gasoline 7 cents higher than the New York harbour wholesale price? Even when the cost of transportation is added on, the price is still at least 5 cents higher in Canada than it is in New York harbour.
If the Minister believes in her market-sensitive system, why did she feel the need to telex the major oil companies to let them know that the public is supposed to receive automatic price decreases? If they are automatic, why the reminder? The reminder was made because price decreases are not automatic. We still do not know the wording of that telex, Mr. Speaker. We do not know if any kind of burden was placed on the oil companies to bring down oil prices.
The situation with respect to consumers is just getting out of hand. It is a travesty that Canadian consumers are being asked to pay the prices they are paying for gasoline. One reason for this is to drive up the profits of Petro-Canada so the Government can present a share issue in the private sector to make the share issue as attractive as possible. It is great for the Government because of lot of its friends on Bay Street will look after the placement, and a placement of this size could mean as much as $30 million. It is great politics indeed.

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John Horton McDermid: The Liberals spent that before breakfast.


Russell Gregoire MacLellan: We were told by the Minister that there were five different taxes which the multinationals have to pay. The Minister got rid of all five. What happened? The consumer got new taxes as a result. The industry got five taxes taken away. Consumers had 3.09 cents a litre added on to the price of gasoline, which we were told was supposed to look after our social programs and create jobs in the sector.
The Minister told us before, that by letting the money flow through to the industry there would be as many as 300,000 new jobs created. She told us that energy was to be an engine for growth. Those are the words of the Government. The Government's engine is a lot like the Government itself. It has a screw loose.
The Minister of State for Mines (Mr. Layton) has told us that jobs are being created in the private sector. The Minister of Energy is one step ahead of him. She is now preparing Canadians for the cancellation of projects. The Minister of State for Mines does not have his new doctrine yet. The old doctrine was to tell Canadians how many jobs the Government had created. The new doctrine is to soften the blow for all the projects which the Government said would be created but which will be cancelled. This is what the Minister of Energy, Mines and Resources is doing at present by saying that these large projects may not go ahead. Canadians will not believe that at all.
The Minister said that by creating a market environment prices will continue to decline. That obviously provides the market for gasoline prices to decline. They are not going to increase in a declining market, she said. Those were her words last spring. But what happened, Mr. Speaker. Prices kept going up because of larger margins for the companies and because of greater taxes imposed by the Government. The Minister's own words less than a year later are not only hollow but they are misleading.
What is the Government doing about the situation? It is doing nothing. The Minister sent a telex, the content of which does not tell us anything. It tells us only that she does not believe in her own market-sensitive regime. The Minister of Energy has said that she is doing something about the situation and that the price decline will go through the system. But we were told that prices were going to go down last spring. People will not believe that prices will go down again unless they see something concrete from the Government, and the people are seeing nothing to indicate any good faith on the part of the Government with respect to consumers.
The situation is very serious. Consumers are having to pay a great deal of money which they cannot afford. The Government is losing on both sides. The Government is causing greater hardships to consumers. The Government is charging more for gasoline while at the same time it is preparing the way for decreased activity in the energy sector. Canadians are getting the worst of both worlds by the policies of the Government. It is indeed a very serious situation.
Does the Minister really expect us to believe that those nice oil companies will pass along savings to us because she sent them a telex? Does she honestly want us to accept the argument that the oil companies will not try and recoup lost revenues from falling crude oil prices by keeping the prices at the pumps high? Personally, I do not. I do not believe that price decreases will be passed on to consumers, certainly not to the degree consumers deserve. And I just realized something else this Government does well, it is called "conning the consumer".


John Horton McDermid: I always enjoy listening to my hon. friend. There were a couple of inaccuracies in his speech which I think should be corrected. He made the statement that the cost of a barrel of oil went down in October and November, when in fact it went up, quite to the surprise of the market-place, as a matter of fact. They expected it to go down in October and November, but it went up. The cost of a barrel of oil went up at that time, I think, because of the anticipation of winter coming on and the heavy use of oil. Of course, there has been a mild winter generally throughout the world. The amount of oil that was consumed was not as great and prices started to drop after the December 9 meeting of OPEC. I think if he checks his facts, and he may wish to comment on this, the price did go up for a barrel of oil in October and November, not down, as he said. Prices went up at the pump.
That is exactly the point we have been trying to make, there is a lag time. If he remembers, in 1979 under the then Prime Minister, the Right Hon. Joe Clark, and the present House Leader, the Hon. Ray Hnatyshyn, the Government stopped the prices from increasing for a sixty day period. We are going to see the same thing when prices come down as when you see them go up. If the Hon. Member wanted to be honest and fair with the Canadian people in his remarks today I think he would like to correct that statement.


Russell Gregoire MacLellan: Mr. Speaker, I would like to go back and look at the figures. I certainly am prepared to consider the position of the Hon. Parliamentary Secretary. However, we are not prepared to consider that prices did go up. I know they did fluctuate in that period, and exactly what they were at any given time I am not really sure. It does not explain the reason why prices did go up in that October to December period, and why those price increases were led by Petro-Canada, which increased its prices on two occasions.
I am aware of what the Parliamentary Secretary says with respect to the former Minister of Energy controlling the lag price for 60 days. That is just exactly what I am saying; the energy sector is prepared to put the price increase on right away, but the Government stepped in on a former occasion to hold that back for 60 days so Canadians would not be scalded right away. This same energy sector waited until the absolute maximum period of time until it passed along the savings to the Canadian public, if at all. On the one hand the Government wants to take the price increase right away, and on the other hand it does not want to pass the saving on to the
February 4, 1986

consumer at all. This is why Canadians are concerned about the market sensitive regime that the Minister talked about.


John Horton McDermid: I want to comment on a couple of remarks he made, especially the one that the Government of Canada paid billions of dollars to Petro-Canada to acquire Petro-Canada and that it should be competing out there in the market-place and should be leading.
He should talk to some of the private entrepreneurs, the business people in his community that, for example, have a Shell station, and who provide employment for Canadians. Or the Sunoco station, although Sunoco is not the greatest example, as it lost $10 million last year. I say this to let my friend from the NDP know about these billions of dollars that all these oil companies are making, including one that is 25 per cent owned by the Ontario Government.
I want to get back to Petro-Canada because these people complained to me that it is unfair competition. As a matter of fact I had a complaint from his province the other day about Petro-Canada offering discounts to teachers, and "how can 1 compete with that, because that is the national oil company and it is being treated unfairly out in the market-place"? You cannot have it both ways. What this Government is saying to Petro-Canada is, "Yes, you are owned by the Government; yes, you are a Crown corporation, but you get out there and you compete fairly with all those other Canadians that are out there working in the market-place".


Russell Gregoire MacLellan: Mr. Speaker, the idea of the former Liberal Government was that Petro-Canada be a window on the market-place, and try to give the Canadian a fair supply of gasoline at the pumps, while at the same time giving them a fair price. This is not the philosophy of Petro-Canada at the present time. Certainly Petro-Canada was expensive to put together, but it was not the policy of the former Liberal Government that Petro-Canada buy up the whole private sector, as it seems to be at the present time.
The Government says that it wants Petro-Canada to be part of the private sector. The policy of the Government changed dramatically from the time of the election when Petro-Canada was going to be reviewed, to the time when Petro-Canada purchased the downstream assets of Gulf Canada from Olympia and York. In fact, during that period of time the Government changed its mind twice. First of all, they were going to purchase all of Gulf Canada, all of the downstream assets from Olympia and York. Then the Government was not going to purchase any from Olympia and York, and then, finally, it said it would purchase the downstream assets in Ontario and western Canada from Olympia and York.
The Government does not have any policy at all, which is damaging for the country and for the energy sector.
We used to have great public confidence in Petro-Canada in this country. Public confidence is eroding because of the policies of the Government. People do not look upon Petro-Canada as their asset in the market-place any more. They look upon Petro-Canada as just another oil company that is trying to gauge them. This was not the intention of the legislation, of
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the former Liberal Government but it seems to be the intention of the present Government.


Ian Gardiner Waddell: With respect to oil prices going up I want to ask the Member, and maybe he will deal with it in his speech as Parliamentary Secretary, why is it that when world prices go down it takes a time period for that to be reflected, but when prices go up that seems to be reflected instantly.
Sharon Olsen at 6639 St. Catharine Street, a single parent in my riding, with a very understanding boss who does not pay her very much, she got oil on October 18 from Petro-Canada to heat her house and had to pay $928 to fill her tank.


John Horton McDermid: How much a litre?


Ian Gardiner Waddell: 37.8 cents a litre.


John Horton McDermid: What is it in the United States?


Ian Gardiner Waddell: Plus added tax. The price increase in October was passed along to people right away. You do not get a long wait. It works to the advantage of the oil companies, but it does not work for the consumer the other way around. That is what we object to.
I want to make a brief comment about the National Energy Program. That program failed because of a number of reasons. One reason was-and the Member from Cape Breton alluded to it-that the program was projected on very high gasoline prices, and the gasoline prices did not go as high as expected. The other reason was the world recession at the time. Third, the program was flawed.
I am tired to hearing Conservative Members stand up in this House and tell lies about the fact that the NDP supported the National Energy Program. If the word "lie" is unparliamentary, I withdraw it, but you know what I mean. The fact is, and I can tell my friend, that the NDP did not support the National Energy Program, and I have all the votes to prove it. I wish the Members would stop saying that because they know it is untrue.
The flaw with the National Energy Program-I will tell the Hon. Member for Red Deer (Mr. Towers) this because he was yelling about us supporting it-was that by means of PIP grants, all those rich grants, it took the exploration away from the Western Sedimentary Basin, from Alberta and Saskatchewan and put it into the frontiers and the offshore. 1 criticized that at the time, and I think the Alberta Members understand that. That was a big flaw in the National Energy Program. I wish the Conservatives would do our Party the justice of not repeating this untruth. The fact is that there were between eight and 10 votes on the National Energy Program legislation and we voted with the Conservatives on seven out of eight votes. I think we are dealing with elementary honesty. We can differ on a lot of things but we should not be hearing those mistruths spoken again and again in the House of Commons.
I will sit down in a moment, Mr. Speaker. The Government has its own problems just like the National Energy Program

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had. The Government made a deal for deregulation. Suddenly prices began dropping dramatically; the Government has no policy to deal with that.


Don Boudria: Mr. Speaker, first I would like to congratulate my colleague, the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) for the excellent speech he made. Does the Hon. Member recall what was said by the Conservative Party during one of its orgies of campaign promises of the summer of 1984? On August 2, 1984, after the Altantic caucus of that day, the Conservative Party said that since the National Energy Program, gasoline prices have doubled largely as a result of increases in federal taxes, and that in contrast, prices in the United States have fallen sharply.
I wonder what the Hon. Member thinks of the logic of the Tories who at that time criticized the fact that prices were not going down as rapidly in Canada as they were in the United States. If it was wrong then, why is it right now that the prices in Canada are actually increasing at the same time as prices in the United States are decreasing?


Russell Gregoire MacLellan: Mr. Speaker, the National Energy Program meant that there would be a certain scale at which prices would come down in relation to world prices, and that scale was met. There was an assurance for the consumers that prices would come down because there was a formula that was put into effect to guarantee that.
It seems that the Government has been more concerned with getting rid of anything that had anything to do with the National Energy Program than it has been with providing solid policies for the country. As such, in many cases, it has thrown the baby out with the bath water. That is very unfortunate. The Government has created a situation that is of concern both to the consumers and to the energy sector itself.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, it is my privilege to address this motion today, a motion which calls for the Government to direct Petro-Canada to institute a decrease of 6 cents per litre in the price at the pumps for retail gasoline. In doing so, I would like to address a myth that has been circulating in the House in recent days. I believe it is very important for us as members of the Opposition to expound on the reasons why gasoline prices should come down.
It was very evident from the speech made by the Hon. Minister of State for Mines (Mr. Layton) that the Government does not accept the fact that there are substantive economic reasons for the price of gasoline to fall. I am referring to the amazing statement made by the Minister of State for Tourism (Mr. Murta) to the effect that tourism in Canada is not affected by the price of automobile gasoline. Of course, it would be unparliamentary to attribute to the Minister improper motives for making that statement, and I cannot say that the statement is a variance with the truth because it is only, after all, a hypothesis. However, what I will say is that the statement was inaccurate, misleading and was totally at variance with the opinion of not only the best industry sources but the industry unanimously. It was at strong variance with
the opinions of the former Minister of State for Tourism and it has aroused an outcry in the tourism industry about the insensitivity of the Government to industry in general and to the tourism industry in particular. It has shown the Government's evident lack of attention and concern to the opinions of that industry and to the possible fate of those in that industry when confronted by this sort of intransigence and blinkered attitude on the part of the Government.
The Minister of State for Tourism said in the House that gasoline prices do not affect the intentions of U.S. tourists to travel to Canada. I might say that that is manifest nonsense. I have not heard one person in the industry tell me that gasoline prices do not affect the intentions of U.S. tourists to travel to Canada. Moreover, I have not heard the same Minister say in the House that the price of gasoline did not affect the intentions of Canadians to travel. We must remember that the majority of tourists within Canada are, after all, Canadians. While American vacationers make a very great contribution to our tourist industry, it is, after all, to Canadians who Canadian tourist attractions and operators must first appeal.
The statement made by the Minister of State for Tourism ran contrary to the opinions of the industry as sampled by his own Ministry. I would like to quote from an impressively titled paper prepared for the National Tourism Tomorrow Conference entitled Prices: Perception, Reality and Value for Money. This is the result of what the Progressive Conservative Government has termed its consultation. These are the numbers that were produced by the consultative process of which the Government speaks so highly when questioned. On page 6 of the report, under the heading Consultation Results, the following is noted:
There were 180 respondents to the consultation process who mentioned prices as the major problem. As well, comments about prices were often raised under another topic cited as the major problem.
Comments about high prices as a problem were distributed as:
Gasoline	37.2%
Alcoholic Beverages	29.4%
All Prices	27.8%
Accommodation	17.8%
Food	13.3%-
It is the opinion of the Canadian tourism industry as consulted by the Government, that the high price of gasoline is more of a problem for the industry than the prices of accommodation and food put together.
The tourism industry does itself credit by the fact that it has not been slow in raising this problem with the Government and in attempting to convince the Government that the industry does indeed know the factors in its economic equation that will affect the future of their industry. It would appear that the Government believes it knows better and that the industry itself has no business telling the Government what affects the industry's potential for success.
Pride of place in this effort must go to the Canadian Automobile Association which started a nationwide publicity campaign to condemn high gasoline prices and the very evident effort that the Government is making to keep gasoline prices
February 4, 1986

high. The Executive Vice President of the Canadian Automobile Association has said that the Government has ignored recommendations from groups such as his which have pointed out the very negative effects that high gasoline prices have on the tourism industry, the transportation sector and the economy as a whole. He went on to say that this self-inflicted uncompetitive positioning is costing Canadians billions of dollars in tourism revenues, tens of thousands of jobs, something of which a Government that talks of job creation should take note, and millions of dollars in investment opportunities.
The Canadian Automobile Association is not alone in raising this problem and pointing out that Canadian gasoline prices are about 30 per cent higher than U.S. gasoline prices at the pumps. If the Government does not take some action now, that margin will increase further, unless, of course, it lets the dollar drop clear through the floor.
This is causing serious damage to our auto tourism industry and many other transportation-dependent industries, said the President of the Canadian Automobile Association.
On the very day that the Minister responsible for Tourism- and I wish he were here to listen-rose in the House to say that gasoline prices were not a problem, he and I received a telegram from the Tourism Industry Association of Canada, which states in part:
The cost of gasoline and jet fuel has for the past few years placed Canada at a serious competitive disadvantage relative to the U.S.A. The current drop in the world price of oil will further reduce the pump price in the U.S.A. in 1986.
The telex goes on to state, and I will just quote portions of it:
It is essential that Canada's Federal Government take the leadership in conjunction with the provinces and oil companies in initiating action to bring the price of transportation fuels in this country into a more competitive position.
That is the very clear position being taken by the Tourism Industry Association of Canada, which is the prime umbrella organization for the industry in the country. It is signalling the Government exactly what is needed.
Leadership is something we have not seen from the Government with respect to gasoline pricing. We finally managed to drag out of the Minister of Energy, after a few days of her habitual stonewalling, that she would indeed at least make the effort to send a telex to the gas companies saying that she expected that they would do something about the price of gasoline. We have not seen the telex, so we can only assume that, of course, it was phrased in such polite and diplomatic terms-


Mr. Della  Noce@: How do you know?


John Edmund Parry: As if the Minister expected that they would do this entirely at their own convenience and, naturally, only after their profit motives have been met.
I hear an Hon. Member opposite asking how I know. The answer is, when the Minister tables the text of the telex in the House I will know for sure. Until then I have, as I am sure he
Supply
has, the right to speculate on just what was and was not in that particular telex.
I am glad to say that it is not only the national organizations in the tourism industry, such as TIAC, the Canadian Food Association and the Canadian Restaurant Association which have raised this question. I also received a telex from an organization in my own riding, the North West Ontario Travel Association. It is a brief telex so I would like to take the time to read it in its entirety. It states:
The North West Ontario Travel Association feels that one of the greatest negatives to tourism in this area is the high cost of automobile fuel. Our members travel to sports shows in the U.S. and talk to large numbers of U.S. tourists and this high cost is continually questioned. It is noteworthy that in the "Tourism Tomorrow" paper-
That is a paper which was produced by the Minister of State for Tourism.
-that international tour operators and wholesalers were surveyed showing that over fifty per cent felt that gas prices were noncompetitive.
That is a telex from the North West Ontario Travel Association which is headquartered in the community of Fort Frances. The community of Fort Frances, for those who are perhaps ignorant of the geography of northwestern Ontario, is right across the Rainy River from the community of International Falls. I would like to quote the price of gasoline in International Falls, which is an American community. The price in International Falls was $1.24 U.S. per gallon for regular gasoline. That translates into 44.9 cents Canadian per litre for regular gasoline. In Fort Frances the price was 56.3 cents Canadian per litre. The retailers in International Falls told us that the wholesale price to them had been falling at the rate of approximately half a cent a day since the beginning of January when the price started to slide. It is not surprising that fully one-third of the business in International Falls is Canadian. After all, Canadians can obtain their gas 20 per cent cheaper across the river than they can in Fort Frances.
I would really like to hear the Minister of State for Tourism speak in this debate. I would Hike to see him come here and let the House know what he plans to say when he goes to the food and restaurant associations' annual reception tonight. I would like to ask him how he will be able to look anyone there in the face and tell them that they are wrong and he is right and that, indeed, as is his stated belief in this House, gasoline prices do not make a difference to tourism in Canada.
I would like to know what he will say when he delivers his address to the members of the Tourism Industry Association of Canada's annual general meeting, which is to start in Winnipeg on February 17. I would like to know what he plans to tell them. Will he tell them in open session that they are all mistaken? Or will he get them aside one at a time in a corner and tell them that he is very sorry that they are mistaken, that he is right and gas prices do not make a difference?
I would like to know what the Minister will say to the Hon. Member for Halton (Mr. Jelinek) who, by some strange aberration, is now a cabinet Minister, and who said on March 22, 1984, and I quote:

February 4, 1986
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When the Conservative Party forms the Government, I can assure you that its first priority in this regard is going to be to call a federal-provincial conference to deal with the problems of over-taxation and to set an example to the provinces by reducing or freezing taxation wherever possible in the tourist industry.
The Hon. Member for Halton went on to say that we must try to find ways and means of reducing them in certain areas. He also stated:
Further steps will be taken to upgrade the status of tourism within the federal bureaucracy in order to protect the entrepreneur from potentially damaging government programs and legislation.
If the Government's program to continue high gasoline prices is not damaging, I would like to know what is damaging to the tourism industry, which has said unanimously that higher gasoline prices are damaging.
The Hon. Member for Northumberland (Mr. Hees) had the figures right approximately two years ago on February 8, 1984 when he said in this House:
If the money had been used to reduce the cost of gasoline at the pumps, it would have made Canada a far more attractive place for tourists to visit. Eighty-five per cent of our dollars from foreign tourists comes from Americans visiting Canada. Of these, 74 per cent travel by automobile.
How sad that the present Minister of State for Tourism does not have the obvious command over figures which the now Minister of Veterans Affairs has.
I could go on in this regard. I could ask the Minister, were he here, what he plans to say to the Prime Minister (Mr. Mulroney), who, during the election campaign, said that gasoline taxes were reducing the competitiveness of Canada's tourism industry. After all, I could even ask the Minister of State for Tourism what he would say to his colleague, the present Minister of the Environment (Mr. McMillan), the former Minister of State for Tourism, who did a reasonably good job and who even earned a promotion. The present Minister of the Environment stood in this House and said that in order to help the tourist industry the two cents a litre tax on gasoline would not be introduced during the summer, during the prime tourist season, but would be postponed until September of 1985. At least he had the common sense to acknowledge that that was a significant factor in tourism in Canada.
The Government has given us an increase in the gas tax on three separate occasions, and there is another increase to come in January of next year. It seems that the deregulated environment cuts but one way. I would say that whether it be regulation or deregulation it should cut both ways.
I would like to offer a couple of quotations from this morning's newspaper. They happen to be from The Globe and Mail, which is an excellent Toronto newspaper. The headline is: "Oil prices tumble below $18 a barrel". The article states:
Meanwhile, Britain's Brent grade oil breached the $17 mark in Europe, trading down $1 at $16.90 a barrel.
On the inside of the newspaper-and I memorized this so I would not have to hunt for it-it is reported that the North Sea oil producers would still pump gas if the price fell to $5 a barrel. It reported that with oil prices going down to $18 a barrel and below-in U.S. dollars, of course-that that means
the Saudis can now basically set the market where they want to and that they are inclined to set it lower rather than higher.
What does this tell us? It tells us that we have a situation of falling crude oil prices, a situation of which this country can take some advantage. It is a situation that the Government will apparently not address other than to send a telex to the major oil companies which, after all, anyone can do.
I would now like to move to the role of Petro-Canada. We have been hearing statements by members of the Government which, frankly, fly in the face of the original idea for which Petro-Canada was established. If that is the Government's opinion then it should do the honest thing and dispose of Petro-Canada. Let the Government be frank with the Canadian people. Let it tell them it is not going to do anything about oil prices, it is not going to exercise any form of judgment, policy setting, discretion or direction or any form of what it so negatively calls "intervention" in the marketplace because it does not believe in it. Instead of that, the Government is "tipsy-toeing" around this issue. It is letting the president of Petro-Canada sound off in ways which are obviously in conflict with the mandate he has been given. And, of course, the Government is ignoring its own history in this matter.
[ Translation]
In connection with this matter, Mr. Speaker, I would like to emphasize the role played by various interest groups and residents of the City of Montreal. It would seem that last week in Montreal they set up a committee called the Canadian National Committee for the Reduction of Gas Prices.

That is something, of course, that were he not in this House, the Hon. Member for Duvernay (Mr. Della Noce) would be rushing to lead. It is by way of recognition of the organization that we have mentioned in our motion the reduction of six cents a litre-

-because, Mr. Speaker, we know very well that the lower prices announced for gas and crude oil could be translated into a nine- or ten-cent reduction at the pump, as the Hon. Member for Vancouver-Kingsway (Mr. Waddell) pointed out, more than the six-cent a litre drop we advocate in our motion.
We listened to the speech of the Minister of State for Mines (Mr. Layton)-which he read from beginning to end. Mr. Speaker, it would seem that he is not quite familiar enough with the subject and, as I just said, he cannot make a speech in the House without reading it word for word.
It looks like they drafted a nice little political speech which is not even remotely related to the matter under consideration. [English]
I would like to conclude by saying that this is not simply a question of the price of gasoline staying at 56 cents a litre, instead of going down to 50 cents a litre. In my riding, even in communities which are situated on the highway, consumers
February 4, 1986

are paying 65 cents a litre for gas. When one gets off the highway, there is the ratcheting effect of gasoline being used to transport gasoline, and the price goes up into the stratospheric range of $1 up to $1.80 a litre.


John Horton McDermid: Where?


John Edmund Parry: Let me say that a reduction such as is foreseen in our motion would have the same exponential and ratcheting effect of bringing those prices down. 1 believe we should have a national supply regime and a national pricing regime which would ensure that people in remote communities do not have to pay these exorbitant prices for gasoline. However, I have to say with deep regret that I do not believe the Government will give that to us, but I would like to have some commitment from this Government for at least the 6 cents per litre reduction which this motion proposes.


John Horton McDermid: Mr. Speaker, I enjoyed listening to the remarks of my friend, the Hon. Member for Kenora-Rainy River (Mr. Parry). He comes from probably one of the most beautiful parts of the province of Ontario and is vitally interested in the tourism business, as I understand it. Being a former chief-of-staff to a Minister of tourism, I understand his concerns. However, I think when he stresses the cost of gasoline and its effect on tourism he is being a little inaccurate. I can tell you, Mr. Speaker, that Tourism Canada did a study in 1984. Its analysis, by the way, covered a very long period of time. The conclusion was that gasoline is a minor item in the total expenditure of most automobile tourists. Not only was that report published in 1984, it has been generally accepted by the tourist industry. In fact, a study was undertaken by the Tourist Industry Association of Canada-which is an independent organization, if the Hon. Member wants to question the validity of the report of Tourism Canada-covering the same period and it reported the same findings.
Gasoline prices are relatively low on a list of factors effecting the choice of U.S. tourists of a vacation destination.


Ian Gardiner Waddell: When was that? What year?


John Horton McDermid: The report was released in 1984 and it covered a period from 1972 to 1983, which is a very long period of time in which we saw dramatic increases in the price of gasoline. The Tourism Industry Association of Canada agreed with the findings of the report that gasoline prices are not high on the list of reasons why a person does or does not travel to a certain destination. The Hon. Member may wish to comment on that.


John Edmund Parry: Mr. Speaker, I have to state that I regret to hear the Hon. Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid) using information that, while not completely obsolete, has at least had its value significantly deteriorated, not simply by the passage of time but by the change of circumstances. I would have to state that my recollection of the history of gasoline pricing in Canada and the United States indicates to me that there were times in 1972 to 1983 when it was cheaper to buy gasoline in Canada
Supply
than it was to buy it in the United States. I can remember that on one occasion I myself noted that difference between Windsor and Detroit. I should like to say that it is only since around 1982, I believe-perhaps slightly earlier-that the divergence between the price of gasoline at the pumps in the United States and in Canada has become significantly large.
At the risk of reiterating my previous points, I would like to point out to the Hon. Parliamentary Secretary that the Tourism Industry Association of Canada is now, on January 22, stating that this is a major problem. If I could quote again, Canada's international trade deficit on the tourism account exceeded $2 billion in 1984 and 1985. Many Americans will visit Canada for Expo '86 and visiting tourists can contribute to the reduction of Canada's deficit. We must not leave them with the impression of overcharging.
I would have to say that while I do not doubt the validity of the conclusion presented by the Parliamentary Secretary for at least a portion of the period from 1972 to 1983, the fact is that in 1986 the perception has changed and the people who are even now coming back from United States sports shows tell me that the constant litany they hear from American tourists is that the price of gasoline is too high in Canada and they may not come this year. The price of gasoline is a significant factor in their decision-making process.


Don Boudria: Mr. Speaker, I listened very attentively to the speech made by the Hon. Member. I know he is very concerned with the tourism industry, as he should be, in respre-senting his own constituency. I just wanted him to be aware, to strenghthen the point he raised, that the brief presented to members of the Liberal caucus last summer by the Canadian Automobile Association stated, and I quote:
The resulting high gasoline prices, in a country with its own oil resources, have put our transportation dependent industries at an economic disadvantage. Tourism in particular has suffered a serious loss of business-
Reading further, it states:
Presently, an American visitor is paying approximately 25 per cent more for motor fuel after taking into account the difference between the Canadian and American dollar and the Imperial and American gallon. This has engendered a perception by Americans that Canada is an expensive vacation destination.
I wanted to offer the Hon. Member that constructive comment.


John Edmund Parry: Mr. Speaker, I would like to thank the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) for that constructive comment. And I would like to say that I believe the key element is that of perception. This is perhaps where the Parliamentary Secretary is coming unstuck because, of course, perception and reality do sometimes differ. The fact is that, although gasoline is not the major component in the cost of running an automobile, once you have paid the cost of the automobile and got it on the road gasoline is a very significant component.
The other thing, of course, is that our American friends often underestimate the benefit they are getting from our

February 4, 1986
sagging dollar and therefore do not realize that the difference is not as large as they imagine.


Mr. Deputy Speaker:: It being one o'clock I do now leave the chair until two o'clock this day.
At 1 p.m., the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

[Stage Direction]
[ Translation]

Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, federal taxes on gasoline in Canada have increased drastically over the past year and a half. Gasoline in this country costs from 25 to 30 per cent more than in the United States.
I fail to understand why the Minister of State for Tourism (Mr. Murta) insists on saying that high gas prices do not deter Americans from coming to Canada. The Canadian tourist industry can only conclude that high gas prices mean fewer tourists, lower sales and reduced employment opportunities.
According to a Travel Industry Association of Canada survey, 400,000 more American tourists decide to bypass Canada every time the gas tax goes up 1 per cent. In the last year and a half we have lost more than 3 million American tourists, close to $500 million and thousands of jobs.
Just as I did, the Prime Minister and the Minister of State for Tourism have received many telegrams from major tourist associations such as TIAC, CAA, ACTA and CRFA. These are dedicated associations that have shown leadership in the tourism sector, and as such they deserve our respect and attention.
It certainly is not a coincidence that, as gas prices went up, so did our tourist deficit. And it certainly is not a coincidence either if-


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


HUMAN RIGHTS
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, Chile seems far away from Canada. We hear about it very little in our media, and a plane ride to Chile takes 18 hours. However, Chile is really our neighbour by virtue of a growing consciousness of global human rights and by virtue of our own actions in trade. Chile has a brutal regime which is based on fear and arbitrary authority. The press is censored and banned. Political parties are illegal. Freedom does not exist as we know it here in Canada. People are jailed, tortured, and killed.
What has been our response to the situation in Chile? What has been our response to our neighbour who has been mugged and robbed and left lying in the street? Well, Mr. Speaker, the people have reached out a hand to Chile, but our Government has passed by and kicked dirt in the face of the Chilean people. It has recently announced aid through a $19 million contract with Chile in the mining industry, and a $5 million line of credit for transactions with Chile.
We have a choice of whether to support Pinochet with our tax dollars or to provide leadership in the international community for a return to democracy in Chile. We can choose whether to support Pinochet or the Catholic church in Chile, the Human Rights Commission, and the unions. We need one standard with regard to international human rights. The Government has threatened full sanctions-


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


NATIONAL PARKS
Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, in April of this year Canada will join the citizens of Vancouver in celebrating the centennial of that great city. Along with Expo itself, a major focus of Vancouver's celebrations will be Stanley Park, the largest urban park in the country.
From time immemorial Vancouverites have claimed the park as their own. Our native peoples have lived and hunted in the park, and generations of British Columbians and visitors from all over the world have enjoyed its trees, its water, and the beautiful view of the snow-capped mountains. Perhaps no park in Canada evokes such civic pride and such a feeling of identity as Stanley Park. The part belongs to Vancouver in all but name. In fact, it belongs to the federal Government.
As a symbolic gesture to the city I am asking the Prime Minister (Mr. Mulroney) to recognize the historic association of the people of Vancouver with Stanley Park, and to dedicate
February 4, 1986

the property over to the citizens of Vancouver in its centennial year.


HEAVY OIL UPGRADER PROJECT-NEED FOR GOVERNMENT ASSISTANCE
Mr. Jack Shields (Athabasca):: Mr. Speaker, conventional supplies of light crude oil from western Canada are gradually declining as the older oil fields such as Leduc and Redwater run out. To remain self-sufficient in oil supply we must encourage the exploration and upgrading of our oil sands and heavy oils. If we do not, we will be turning the clock back and will become increasingly dependent on foreign crude oil.
The proven reserves of oil in the oil sands and heavy oil areas of north eastern Alberta stagger the imagination. There are enough reserves to supply Canada's needs for 200 to 300 years. We have the technology to produce this heavy oil and bitumen but the oil must be upgraded to light crude to meet Canada's refining requirements.
Husky has proposed a heavy oil upgrader at Lloydminster and has requested assistance in the form of loan guarantees. The Government of Alberta and the Government of Saskatchewan have agreed to assist. The federal Government has yet to make a final decision.
May I remind my colleagues that without Government help the Syncrude project would have failed. Without Government help, the Alsands project did fail.
We must recognize that special incentives are essential for most large energy projects to proceed in today's uncertain world. The Husky upgrader is vital to our nation's security. We must not and cannot allow ourselves to become dependent on foreign oil and thereby be hostage to a foreign power.
I urge all Members of the House to support federal Government assistance for the construction of the Husky heavy oil upgrader.


CANADA POST CORPORATION
Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, when the new president of Canada Post is appointed, he or she will have the monumental task of addressing a number of very serious problems. For example, the new president must make the corporation fiscally responsible by reducing the annual deficit of some $300 million. The president must also alleviate the labour unrest which is a major problem in some larger urban centres.
Furthermore, he or she must address some severe inequities which currently exist. For example, in my riding of Brandon-Souris some rural mail delivery routes are being dismantled, while other rural and town residents continue to pay an annual fee for the rental of their mail boxes at the local post office. This is a practice which they, understandably, believe to be discriminatory.
There are inequities as well in the cities, where thousands of mobile homeowners and new homeowners are not receiving home delivery even though some of the new homeowners reside on streets which already receive service.
It is imperative that these inequities be rectified. The new president must make the corporation one which is responsible and fair to all Canadians, both financially and service-wise, whether they live in rural or urban Canada and whether they live in older or newer sections of our cities.


EXTERNAL AID
Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, in spite of Haiti's shocking record of Government by murder, Canadians must surely approve our decision to continue aiding that tyrannized country. As the Minister for External Relations (Mrs. Vezina) has said:

"We are not supporting a regime, we are helping a people". [English]
Some people ask, however, if we are sure our aid is reaching the people and not the Government. For example, it has been alleged that most of the foreign aid to Haiti has stuck to the hands of its small elite. CIDA, however, claims that it has prevented that by dealing directly with Canadian businesses and Canadian non-governmental organizations that are working directly with the people of Haiti. The Government, therefore, should be supported in its decision to aid a people but not a government.
For that reason I also draw the attention of the House to the desire of that Duvalier corrupt regime for foreign investment and financing, and say that this should give our Government an opportunity to say to Duvalier: "Respect human rights first, then talk to us about investment".


APARTHEID
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, the words "rhetoric" and "reality" both begin with the letter "r". However, in the case of South Africa, that is all that

February 4, 1986
they have in common. This past Friday we got a heavy dose of rhetoric from the President of South Africa. He said, among other things, that "apartheid was outdated". He said that he accepted one citizenship for all South Africans, implying equal treatment and opportunities. He expressed his belief that human dignity, life, liberty, and property must be protected, regardless of colour, race, creed or religion. That was rhetoric.
Yesterday we got a glimpse of the reality in South Africa. News reports tell us that a group of what are euphemistically referred to as "mixed-race" members of the South African Parliament were turned away from a "whites only" parliamentary restaurant. Two of those expelled were Government Ministers in charge of coloured affairs. So much for the rhetoric. That is the reality.
As an editorial in a Johannesburg newspaper put it today: "In a single action, Government has succeeded in making a mockery within a matter of hours of its grand reform moves".
The Prime Minister's (Mr. Mulroney) six month deadline for reform in South Africa will soon be upon us. However, it is already crystal clear that in South Africa reform is just another word that begins with "r".


THE ECONOMY
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, there is widespread concern about the Canadian dollar falling below 70 cents. There is much speculation as to the root causes. Clearly the sharp decrease in oil prices has a negative impact on producing countries such as Canada.
However, I would submit that the past decade of wild and irresponsible spending by the former Liberal Government is the root cause of our falling dollar.
The Right Hon. Leader of the Official Opposition (Mr. Turner) rants and raves about the falling dollar and rising interest rates, yet he was the father of the deficit.
It took Canada 100 years to create a national debt of $20 billion. It took the Liberals a mere 10 years, starting in 1974, to increase the national debt to almost $200 billion.
In the mid 1970s the annual deficit was $2 billion. In 10 years the Liberals had increased this to $36 billion.
Our new Conservative Government is acting in a responsible manner to reduce the deficit, and thereby to reduce the crushing impact of interest charges on that debt which now absorb one-third of our revenues. Further tough measures are needed over the next several years to reduce the deficit and to restore financial stability and confidence.
What we do not need is the self-righteous, hypocritical, political posturing by the Opposition. The situation is too serious for that.


FORESTRY
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, why does the Government create a Minister of State for Forestry (Mr. Merrithew) and then hide him in the closet? Despite its professed concern with acid rain, the Government will have a delegation of only two officials plus a Parliamentary Secretary at the opening in Paris tomorrow of the first Summit Conference on the future of the world's forests.
The three day meeting is convened by President Mitterand and is being attended by representatives from 60 countries. Heads of State attending include Chancellor Kohl, the Prime Minister of Ireland, President Diouf of Senegal, Jacques Delors, President of the European Community, and Edourd Saouma, Director-General of the UN Food and Agricultural Organization.
Considering the significance of acid rain effects on Canadian forests and our vast forest resources, would it not be incumbent on Canada to have, as a minimum, the Minister of State for Forestry in attendance?
This is yet another indication of the priorities of the Government-if it has any-and its level of commitment to anything which does not relate to the deficit using archaic Tory bookkeeping mentality. Yet the state of our forests will very much affect the deficit about which the Government is so worried. Without healthy forests, we will see the deterioration and demise of one of Canada's major industries and a significant source of employment for many Canadians.
With these risks in mind, many people are asking why the Government showed so little interest, as demonstrated by the token representation Canada is sending to Paris.


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


THE ECONOMY
Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, nobody said that it would be easy. Nobody said that it wouldn't take time, but Canadians have responded to the new climate of confidence generated by their Government. They have rolled up their sleeves and are putting Canada back to work.
Since the election of September, 1984, 450,000 new jobs have been created, inflation has been reduced to 4 per cent, and interest rates have been reduced by 1.5 percentage points.
Canadians have refused to be misled by the doomers and gloomers in the Liberal Party and the NDP which have a vested interest in undermining Canadian achievement.
Consumer confidence is at an all-time high; manufacturers orders are up 15 per cent since the election; the value of
February 4, 1986

building permits was up 25 per cent for 1985, representing over $3.5 billion of new construction.
Yes, Mr. Speaker, the Conservative Government has confidence in Canadians and Canandians have confidence in their Government. Together we are clearing away the rubble of Liberal-Socialist failure and building a new future for the nation.


PRESENCE IN GALLERY OF MINISTER OF EDUCATION AND MINISTER RESPONSIBLE FOR THE STATUS OF WOMEN FOR BARBADOS
Mr. Speaker:: May I advise Members of the presence in our gallery today of the Hon. Billie Miller, Minister of Education and Minister responsible for the Status of Women, of Barbados.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


John Napier Turner: My
question is for the Minister of Finance. At 1.45 this afternoon the Canadian dollar slid to $69.50, and it is sliding at a faster rate than at any time in the history of the country. The Minister of Finance is clearly not in control of the situation. The financial markets of this country and around the world are voting non-confidence in the Government. I am asking the Minister of Finance when he is going to get matters under control.


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the same question that the Hon. Member has given to me now, I have answered on a number of occasions. I ask him, before he makes any outrageous statements such as he has just made, to check the facts and then come back to the House.


John Napier Turner: I did check the facts, Mr. Speaker, and I suggest that the Minister of Finance should begin to do his homework.


THE DOLLAR-MINISTER ASKED WHETHER HE WILL MAKE STATEMENT
John Napier Turner: Here is my supplementary question, Mr. Speaker. Canadians
Oral Questions
are now captive passengers aboard a rudderless ship-there is nobody at the helm. Will the Minister assume his responsibilities and make a statement before the House to clear up the situation and attempt to stabilize the Canadian dollar market?


Michael Holcombe Wilson: Mr. Speaker, I have made the policy of the Government very clear. First of all, we have addressed the fundamentals of the economic policy of this Government, and changed significantly the direction that this country has been going.
We set out, first, to change the direction of foreign investments by changing FIRA into Investment Canada. Second, we changed the national energy policy that would change the direction of foreign investments as it related to the energy industry in the country. Third, we have taken massive steps to get the deficit under control. Fourth, we have encouraged investment, both foreign and domestic, to get the competitive position of the country back in shape by encouraging investment in new plant equipment, in new technology. Those four things have been wisely regarded as the right things to do to get the fundamentals of the country back in shape, and they have been widely approved, particularly by the OECD in its report last year.


EFFECT ON PRICE OF IMPORTED FOODS
John Napier Turner: That is all very well, Mr. Speaker, but the markets, the financial community, and the international situation don't believe the Minister. The dollar continues to go down. There will be no confidence in this Government. The Minister knows that as a result of the falling dollar Canadians, at this time of year particularly, have to import fruit and vegetables and other foodstuffs that are part of their regular food basket. What is he going to do to prevent the price of that food basket going up now that the dollar is going down?


Michael Holcombe Wilson: Mr. Speaker, I have answered that question as clearly as I can with my response to his previous question. If he wants to go back and check the facts of what went on during his term of office when he set-


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: -when he set in place the slide in the Canadian dollar, it started at 105 when he was the Minister of Finance. It was those policies-


Mr. Speaker:: Order, please. The Minister may want to complete his answer and I think the House, please, should understand our obligations.


Michael Holcombe Wilson: Mr. Speaker, let me make one point of contrast. During the term of office this Member was Minister of Finance-government spending was increasing by-


Some Hon. Members:: Oh, oh!

February 4, 1986
Oral Questions


Mr. Speaker:: Order, order, order! Next question.


Michael Holcombe Wilson: Mr. Speaker-


Mr. Speaker:: Order, please. Order. I am going to proceed to the next question. It seems to me that the Parties that ask questions should at least allow Ministers the quietness in which to answer them.


VALUE OF DOLLAR-MINISTER'S ALLEGED STATEMENT
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, someone in the House has to check the facts, and I think it should be the Minister of Finance. I must remind him that after the present Leader of the Opposition left the political scene in 1976 the Canadian dollar was trading at a premium against the American dollar. My question is very simple. The Minister told the Canadian Press that interest rates and the pressure on the dollar will go down as we get closer to the Budget date. Would the Minister explain why he made that statement to the Canadian Press?


Michael Holcombe Wilson: Mr. Speaker, when the Leader of the Opposition left public life, he ran from the problems that he created himself during his term of office.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Public spending during his time in office as Minister of Finance increased at a rate of 20 per cent. Both Hon. Members can check those facts. Yesterday I referred to the last year of the Right Hon. Member's term of office in which public spending increased by 29 per cent. It was the cumulative impact-


John Napier Turner: How about a couple of surpluses?


Michael Holcombe Wilson: He does not like the facts. He talks about surpluses. He started off with a surplus. When he left office the deficit had gone up to $4.5 billion, from a surplus. He was the man who had the last surplus. That occurred in his first year in office.


Some Hon. Members:: Hear, hear!


REQUEST FOR MINISTERIAL STATEMENT
Raymond Garneau: Mr. Speaker, may I remind the Minister of Finance that it is now February, 1986, and at this time-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Order. Ministers should have the quietness in which to answer, and so should questioners have the quietness in which to put questions.


Raymond Garneau: It is now 1986 and the Canadian dollar is at 69 cents U.S. If the Minister of Finance is confident about the statement he made to the Canadian press yesterday, why does he not clear the air and make a statement today or tomorrow telling the Canadian people that somebody, somewhere in the Government, is in charge?


Michael Holcombe Wilson: Mr. Speaker, the point that I made in my First response today demonstrates clearly that we are in charge. We have clearly changed the direction of economic policy in Canada.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: When we came into office the debt of the country had grown in the previous 15 years from $18 billion to $190 billion. We have taken steps to demonstrate that we are bound and determined to turn that around and to get the debt of the country under control, because no country can go on with debt increasing as it has for the last 10 years at a rate of 20 per cent per annum. In the last three years before we took office-


Raymond Garneau: What about this year?


Michael Holcombe Wilson: If the Hon. Member would give me a chance to answer his question, I would give him the answer. In those last three years the debt was growing at 25 per cent annum. That cannot continue. We have turned that one around and that will be made very clear in the Budget that will be out in a few weeks' time.


Some Hon. Members:: Hear, hear!


PRESENTATION OF BUDGET-DATE INQUIRY
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for the Minister of Finance. The Minister just said that he has moved the country in new directions. The clearest direction that Canadians have seen is the downward drop of the dollar.
Since the Minister himself has said, both as Minister of Finance and when he was in the Opposition, that the perception of Government stability is crucial for the international community's judgment of the currency, will he do something to establish some confidence in the Government by telling not only Canadians but the international community right now the date of the next Budget?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member has referred to one statistic-the level of the Canadian dollar. I am going to ask him to consider the other statistics, which demonstrate very clearly that the economic
February 4, 1986

track that this country is on has improved considerably over the last 18 months.


Mr. Deans:: How about interest rates?


Michael Holcombe Wilson: Some 450,000 jobs have been created. Inflation is stable. Productivity last year saw its best improvement in a number of years. The competitive position as measured by unit labour costs has improved considerably. The balance of trade is still strong. In response to the Hon. Member, interest rates are still a good deal lower than they were on September 4, 1984.


Ian Deans: And the dollar is too!


Michael Holcombe Wilson: I say to the Hon. Member that we are on the right track. We are not going to be knocked off that track by the irresponsible criticism of members of the Opposition.


Some Hon. Members:: Hear, hear!


INTEREST RATE LEVELS
John Edward Broadbent: Mr. Speaker, the Minister knows, because he follows this every day, that the interest rate structure has gone nowhere but up in the past month. He also knows that the interest rate being charged is about 3.5 per cent higher than that in the United States. Will he give his assurances, when Thursday comes around again, that he will not compound the problem of a falling dollar with another increase in interest rates? Will he assure us now that the interest rate structure will not go any higher?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, in the simplest possible way-because I have explained this to the Hon. Member on a number of occasions before-let me explain to him and Members of the House why what he is asking is not possible and, in view of the understanding which he has, it is irresponsible even to ask.
It is not possible, when the Government of Canada has to borrow $3 billion week in and week out as a result of the huge cash requirement that we have because of the size of the deficit, to set interest rates-fix them-as he would have us do. We are trying to stabilize the market-place. We are trying to moderate the pressures, both upward and downward, on exchange rates and interest rates.


Mr. Rodriguez:: He sounds like John Turner.


David Orlikow: He sounds like Marc Lalonde.


Michael Holcombe Wilson: That continues to be our policy. It is not possible for the Minister of Finance, or the Governor of the Bank of Canada, to say: "That is where interest rates will be and they will go no further". That is just
Oral Questions
not possible, simply because of the magnitude of the fiscal problem with which we were presented on September 4, 1984.


Some Hon. Members:: Hear, hear!


GOVERNMENT RESPONSIBILITY
John Edward Broadbent: Mr. Speaker, I wish to ask the Minister the following question and I begin with the words of the Right Hon. Member for Yellowhead when he was Leader of the Opposition-


Some Hon. Members:: Who?


John Edward Broadbent: -after he had just described the position of the then Minister of Finance as pretending the Government can do nothing about interest rates and as passing the buck away from the Government, which has the responsibility for setting interest rate policy. I want to ask the Minister if what the Hon. Member for Yellowhead said when he was on this side of the House was true then, why is it not true now. Why will he not assure the people of Canada that he will keep interest rates down? That is the question to answer.


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member likes to refer back to things said by the Right Hon. Member for Yellowhead and things which I have said. I would like to draw the Hon. Member's attention to this.
I am quoting, and I will do it quickly, from what I said on June 15, 1982:
Why is there no confidence in the Canadian dollar? I have said this before and I will say it again, again and again. Why is the Canadian dollar weak? First, there is the National Energy Program; second, the attitude toward foreign investment;-


Some Hon. Members:: Order, order!


Michael Holcombe Wilson: -third, the budgetary proposals of last year; fourth, the high federal government deficit; and fifth, the federal-provincial squabbles.
In each of those five areas we are dealing with the problem in order to improve the economy as well as federal-provincial relationships, to stabilize the dollar-get it back up again- and get interest rates down.


Some Hon. Members:: Hear, hear!


MINISTER'S VIEWS
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, I think we all have sympathy for the Minister who is somewhat exercised today. I do not think any of us would like to be known as the father of a 69 cent dollar.


Some Hon. Members:: Oh, oh!


Donald James Johnston: The Minister will recall that in September of 1984 when he assumed his portfolio the dollar was at 77 cents. He has told us at some length about all of the things he has done to strengthen confidence in the economy, and today the

February 4, 1986
Oral Questions
dollar stands at 69 cents. Would the Minister share with us, within these four walls, his own view of why the dollar has slid from 77 cents to 69 cents, notwithstanding all of the actions he says he has taken?


An Hon. Member:: Right on.


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member forgets the fact that when there are problems which have been building up for 15 and 20 years-


Some Hon. Members:: Oh, oh!


Mr. Chretien:: The problem is over there.


Michael Holcombe Wilson: The Hon. Member for Saint-Maurice was a major part of those problems and I am glad he is acknowledging it.


Joseph Jacques Jean Chrétien: Sixty-nine cents now.


Michael Holcombe Wilson: The problems are like a 100-car freight train which keeps moving-


Ian Deans: Without someone in the caboose.


Michael Holcombe Wilson: -and it is slow to stop it and turn it around. But we have made tremendous progress in slowing that freight train down, and we are turning it around because, as I indicated-


John Napier Turner: Box-car financing.


Mr. Speaker:: Order. Questions and answers will please become shorter.


Donald James Johnston: I think the Minister should be cautious in using analogies.


Some Hon. Members:: Why?


Mr. Kaplan:: Because of the open window.


Donald James Johnston: For many reasons. I'll work on them.


John Napier Turner: You're in the siding, shunted in the siding.


MINISTER'S POSITION
Donald James Johnston: Will
the Minister tell us-


Robert Phillip Kaplan: A fast moving train past the open window.


John Napier Turner: Box-car finances.


Mr. Speaker:: Order, please. Could the Hon. Member please just put a question.


Donald James Johnston: Will the Minister tell us whether he believes what he stated in July of 1984, that increasing interest rates
were killing the economy and that a weakened dollar would be better for the economy than increasing interest rates? If he believes that, why is he today following both tracks at the same time-


Ian Deans: Now you're following both.


Donald James Johnston: -on his freight train?


Michael Holcombe Wilson: Mr. Speaker, I did say that.


John Edward Broadbent: Because you're following Liberal precedent.


Michael Holcombe Wilson: And that is the exact response I gave to the Leader of the New Democratic Party. It is true that just to increase interest rates, having no regard to other policies, is wrong. That is why I was so critical through the years of the policies of the Hon. Member's Party. That is what I set out in Hansard on June 15, 1982, that we do not just increase interest rates. We must have the fundamental policies in place, and it is those fundamental policies we have been working on right from the start of this Government which are going to work. They have been working because of the jobs which have been created; 1,000 jobs a day-


An Hon. Member:: And interest rates are lower.


Joseph Jacques Jean Chrétien: Sixty-eight cents, sixty-nine cents, sixty-seven cents, bingo! Here you go.


Michael Holcombe Wilson: Stability in inflation, housing starts up 25 per cent, these are the things which create the jobs and are the things people are going to reward us for by saying: "You are on the right track. You are doing the right thing".


MINISTER'S STATEMENT IN 1982
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is directed to the Minister of Finance who, on June 16, 1982, had this to say when the dollar had fallen to 78 cents American, and I quote from page 18513 of Hansard'.
Surely the minister understands this. Does he not realize that every time the level of the dollar reaches a record low, his credibility also reaches a record low?


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: Does the Minister stand by his analysis of the credibility of the former Minister of Finance as it is tied to the value of the Canadian dollar?


Michael Holcombe Wilson: No, Mr. Speaker, and I will tell you why.


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: There are 450,000 people who have jobs today-


Some Hon. Members:: Yeah, yeah, yeah!
February 4, 1986


Michael Holcombe Wilson: -who didn't have them at that time who are saying: "Michael Wilson, thank you very much for everything you've done because you are on the right track. Keep at it".


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: I suspect, Mr. Speaker, that the only thing falling faster than the Canadian dollar is the credibility of the Minister of Finance.


Some Hon. Members:: Right on.


INTEREST RATE LEVELS
Nelson Andrew Riis: A few weeks ago I asked the Minister of Finance whether or not he felt that increasing interest rates would add considerably to the debt. At that time he said it was a temporary phenomenon. Has he changed his mind?


Mr. Speaker:: Order, please. I am sorry, I have not heard the question because we are getting another preamble.


Mr. Benjamin:: You've got to listen for it.


John Edward Broadbent: He asked it.


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


John Edward Broadbent: Yes.


Ian Deans: Yes.


Mr. Speaker:: I am sorry. I rose in the middle of a preamble and did not hear a question. Is there a question?


An Hon. Member:: It was finished.


Nelson Andrew Riis: Mr. Speaker, my question was simply this.


Mr. Hnatyshyn:: Talk about simple.


Mr. Clark (Yellowhead):: You are better at reading them.


Nelson Andrew Riis: Has the Minister of Finance changed his mind from saying that the increase in interest rates was a temporary phenomenon and, therefore, he had made no effort to calculate the impact on the increasing debt of the country?


Michael Holcombe Wilson: Mr. Speaker, I can quote a number of economists who would agree with the statement I made a little while ago.


Ian Deans: You haven't calculated the cost.


Michael Holcombe Wilson: I still stand by that statement. I say to the Hon. Member that words are cheap.


Ian Deans: They certainly are.


Michael Holcombe Wilson: Action is important, and it is the action of this Government which is important in that it is
Oral Questions
instilling confidence in what we are doing. I say to the Hon. Member it is very easy for him to rise in his place and make irresponsible statements-


Nelson Andrew Riis: Like what?


Michael Holcombe Wilson: -because no one is going to listen to him.


John Edward Broadbent: The problem is they are listening to you.


Ian Deans: Just remember, action is expensive.


An Hon. Member:: Words, too.


JUSTICE
Robert Phillip Kaplan: Mr. Speaker, 1 would like to ask a question to the Minister of Justice who recently sent New Brunswick Acadians a judge who happens to be a unilingual Anglophone from Saint John.
When the only Francophone judge of the Court of Appeal of Ontario retired last month, why did the Minister not appoint a Francophone to replace him, given the great number of francophone lawyers and judges in the Province of Ontario? Why this backward step?


Hon. John C. Crosbie (Minister of Justice and Attorney General of Canada):: Mr. Speaker, the appointment of a judge to the Ontario Court of Appeal was done after extensive consultation with, among others, the Attorney General of Ontario, the Chief Justice, and other members of the Court. There is a full panel to hear appeals in the French language in the Ontario Court of Appeal, including the supernumerary judge. I was advised by those with whom I consulted that the essential thing was to appoint a first-class person, and that person was appointed in the person of Mr. Justice Krever.
There is no problem with hearing appeals in French in the Ontario Court of Appeal. I am sorry that my hon. friend tries to raise an issue like this for political purposes instead of speaking to me privately about the matter.


INQUIRY WHY ANGLOPHONE APPOINTED INSTEAD OF AVAILABLE FRANCOPHONE
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, Section 135 of the Judiciary Act of Ontario reads, and I quote:
The official languages of the courts of Ontario are English and French.
Why does the federal Government refuse to co-operate with Ontario, considering that the province gives to all Canadians

February 4, 1986
Oral Questions
in Ontario the right to appear before a court of appeal or elsewhere and be heard by a judge who speaks his or her language? Why did it appoint an Anglophone judge when a Francophone judge was available?


John Carnell Crosbie: Mr. Speaker, I find this really incredible.


An Hon. Member:: Why?


Charles Joseph Clark: That's typical.


John Carnell Crosbie: The Ontario Court of Appeal has a full panel which can hear any appeals in the French language, in that language, and this Government is doing more to advance the cause of bilingualism in this country in every way-or just as much, certainly, as our predecessors-and we certainly did not attempt to harrass with cheap shots on this particular issue in this House.


Jean-Robert Gauthier: That's not true, and you know it.


PETRO-CANADA CLOSURE OF SERVICE STATION AT GRAVENHURST, ONT.
Ian Gardiner Waddell: Mr. Speaker, my question is directed to the Prime Minister. Mrs. Cora McAra, who is being squeezed out of her gas station business in Gravenhurst, Ontario, told me on the phone last night that Petro-Canada would not let her lower her price two-tenths of a cent per litre because, in Petro-Canada's words, "other dealers would do this". What is the matter with precisely that, given that world oil prices are falling dramatically? Why doesn't the Government care about the McAras of this country?


Mr. Speaker:: Order, please. I think the Hon. Member is raising a question which is the subject of today's debate. He knows it is our practice not to allow questions in Question Period on a matter which is on the floor. I am also reminded that it is the Hon. Member's motion which the House is debating.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order. I am prepared to hear the Hon. Member's supplementary on a subject other than what is before the House for debate.


Ian Gardiner Waddell: Mr. Speaker, I think it is on a specific family.


Some Hon. Members:: Oh, oh!


Ian Gardiner Waddell: But I-well, Members may think it is funny but the McAras do not.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Next question. The Hon. Member for Notre-Dame-order, please. I recognized the Hon. Member and he did not put a question. The Hon. Member for Notre-Dame-


Ian Gardiner Waddell: Mr. Speaker-


Mr. Speaker:: Order, please. The Hon. Member will please resume his seat.


Ian Gardiner Waddell: You said 1 could put a general question.


Mr. Speaker:: The Hon. Member will please resume his seat.


Ian Gardiner Waddell: Mr. Speaker, point of order.


Some Hon. Members:: Sit down!


Mr. Speaker:: The Hon. Member will please resume his seat.


Ian Gardiner Waddell: They're shouting me down and I'm trying to defend a family in Canada.


Mr. Speaker:: The Hon. Member will please resume his seat.


Ian Gardiner Waddell: No, I will not sit down, Mr. Speaker. The point-


Mr. Speaker:: The Hon. Member will please resume his seat.


Ian Gardiner Waddell: I will not. You want to kick me out of the House, kick me out. I will not sit down.


Charles Joseph Clark: Typical NDP contempt for Parliament.


Mr. Speaker:: Order, please. The Hon. Member will resume his seat. I recognized the Hon. Member on a supplementary question. He rose, made a statement, and did not put a supplementary question. I am therefore going to the next Member.


Ian Gardiner Waddell: I was shouted down, that's why 1 couldn't-


Mr. Speaker:: Order, please. The Hon. Member for Notre-Dame-de-Grace-Lachine East.


Ian Gardiner Waddell: Mr. Speaker, I am not sitting down and I will leave the House.


Some Hon. Members:: Hear, hear!


Ian Gardiner Waddell: That's unfair.


Mr. Speaker:: The Hon. Member for Notre-Dame-de-Grace-Lachine East.
February 4, 1986


CROWN CORPORATIONS
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion. Yesterday some of us had the opportunity to visit Canadair in Montreal and meet with its President, Pierre Desmarais. Mr. Desmarais confirmed he had a mandate to sell Canadair without any restrictions or conditions. Since Canadair is now the only Canadian producer of aircraft, would the Minister give instructions to Mr. Desmarais not to sell Canadair unless majority control remains in Canada?
Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, I can only give the Hon. Member the assurance that I have given several times before in connection with similar questions. As he indicated, Canadair is, hopefully, to be privatized but to date we have not been able to find a possible buyer who has indicated a positive interest in taking over Canadair. So his question really deals with a hypothetical situation.


REQUEST FOR RETENTION OF CONTROL IN CANADA
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, the President of Canadair has a mandate to sell the company without any conditions or restrictions. Will the Minister revise his instructions to Mr. Desmarais and make sure that they include that the company cannot be sold unless majority control remains in Canada? Will he tell him that those are his instructions and he does not have a wide open mandate?
Sinclair McKnight Stevens: Mr. Speaker, obviously the Hon. Member has been misinformed. Not just the President but also the Board of Canadair know it is our desire to privatize that company. The controlling shareholder, CDIC, knows it is our desire to privatize that company. However, the conditions under which we feel it should be privatized have been made abundantly clear. There are very strict parameters which we are interested in, when entertaining possible bids for Canadair.


John Edward Broadbent: What are they?


APARTHEID
Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs concerning new events in South Africa. The recent speech by South African President Botha has received a mixed response from all sides of the issue. I would like to know the Government's reaction to these proposals, in particular the
Oral Questions
creation of a multi-racial council to advise President Botha of black demands in South Africa.
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, the recent speech by the President of South Africa touched upon some of the points raised in the Nassau Accord negotiated by the Prime Minister of Canada and other Commonwealth Prime Ministers this past fall. It has a long way to go before it meets other fundamental elements of the Nassau Accord. Our view is that we should continue to give encouragement to the Commonwealth group of experts who will be visiting South Africa and reporting back to representative Prime Ministers sometime in June or July.


John Barry Turner: A supplementary-


Mr. Speaker:: The Hon. Member for Humboldt-Lake Centre.


AGRICULTURE
Victor Fredrich (Vic) Althouse: Mr. Speaker, my question is directed to the Minister of Agriculture and concerns the Government's sugar policy. He will know that no sugar-beets were planted in Alberta last year due to the failure of his Government to restrict the dumping of cheap sugar on the Canadian market. Is it his Government's intention to follow the lead of virtually every sugar-producing country in the world by maintaining a floor price and imposing a surtax on imports, to protect beet and corn producers as well as the sugar refineries in Alberta, Manitoba, Ontario and Quebec?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, this is very similar to the question posed last week or perhaps the week before. My answer today would have to be the same as my answer then. The Minister responsible for the Canadian Wheat Board has consulted far and wide. We are looking at a number of options. However, up to this point in time no Final decision has been made.


ONTARIO AND QUEBEC CORN PRODUCERS
Victor Fredrich (Vic) Althouse: Mr. Speaker, do those options include a look at the high fructose corn syrup industry as well? Is he looking out for the interests of Ontario and Quebec corn producers who stand to lose 20 cents a bushel if those refineries are shut down?


John Wise: Mr. Speaker, I thought the information contained in my first answer to the Hon. Member's question, where I indicated the Minister responsible for the Canadian Wheat Board had consulted far and wide, should be sufficient to answer his supplementary.

February 4, 1986
Oral Questions


CANADIAN ARMED FORCES
Mr. William G. Lesick (Edmonton East):: Mr. Speaker, my question is directed to the Associate Minister of National Defence. The disease called AIDS is now an epidemic in Canada. It has infected at least 2 members of the Armed Forces, one of whom has died. What extraordinary measures is the Department of National Defence proposing or taking to combat this deadly disease?


Hon. Harvie Andre (Associate Minister of National Defence):: Mr. Speaker, the Hon. Member is correct the Canadian Armed Forces, as members of our society, are not immune to this disease. The Surgeon-General is closely monitoring the circumstances and is in close touch with officials of the Department of National Health and Welfare to ensure we are up to date on all the technological developments and further knowledge being made available daily on this disease. At this point in time it does not seem warranted that we take extraordinary measures in view of the uncertainty, I guess. However, the Hon. Member can be sure that we view it seriously and the Surgeon-General is closely monitoring the situation.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of Agriculture. On July 10 last he promised to bring in farmer/creditor arrangements legislation to assist in the farm debt crisis which is certainly the most serious since the 1930s. Land values are dropping by 25 per cent to 50 per cent. Is the Minister going to keep his promise to the many farm organizations which have been demanding action in this regard, and to the farmers who have been forced off their land and out of their homes?


John Wise: Mr. Speaker, I cannot help but notice that questions from the Opposition become very repetitive. I know this question was posed a couple of weeks ago as well. I indicated to the Hon. Member, who I am sure posed the question at that time, that we were looking at a number of options. However, to this point in time no final decision has been made.


MINISTER'S POSITION
Maurice Brydon Foster: Mr. Speaker, the Minister is simply waffling on his promise. He said a couple of days ago he was listening to the silent majority. Will he admit that that silent majority is really the big banks of this country? Why does he not listen to the elected representatives of the farm organizations of the country, and bring in legislation?


John Wise: Mr. Speaker, I reject completely and totally the Hon. Member's observation that the Government is waffling. Indeed, if there are any experts in waffling, he should look around him because that is where he will see them. The Government has not waffled since it assumed office. We have passed more agricultural legislation than any Government in history.


Some Hon. Members:: Oh, oh!


John Wise: Check the record. Indeed we have taken over 170 initiatives supplying well over $3 billion to the agri-food industry. That is action. That is commitment. That is not waffling.


Some Hon. Members:: Hear, hear!


CRIMINAL CODE
Mr. Alan Redway (York East):: Mr. Speaker, my question is for the Minister of Justice. The recent bomb threat hoax at the airports has cost Canadian taxpayers approximately $1 million through extra security costs. Apparently the only charge that can be laid in this situation is one of public mischief. Will the Minister consider introducing legislation in the House to provide new offences, new penalties, and perhaps restitution provisions, so that this type of situation can be dealt with more effectively in the future?


John Carnell Crosbie: Mr. Speaker, that is a very good suggestion. As the Hon. Member points out, a problem exists. We are considering that situation in the context of the legal review which is now under way with reference to the Criminal Code. I will certainly be glad to consider the Hon. Member's suggestion.


CANADA-UNITED STATES NEGOTIATIONS-ROLE OF PROVINCES
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I would like to congratulate the Secretary of State for External Affairs for bringing the provinces into unanimity on free trade. They are all agreed that Ottawa's promises of full participation have turned out to be meaningless.
Why will the Minister not accept the suggestion of all four western provinces that the provinces be equal partners in these free trade talks and have representatives in the negotiating room with the federal Government?


Charles Joseph Clark: Mr. Speaker, the Hon. Member reads too many
February 4, 1986

newspapers. Fie should have learned long ago that they cannot always be counted on.


Leslie Gordon Benjamin: You had better read the want ads.


Steven W. Langdon: Mr. Speaker, this comes not from newspapers but from one of those western Ministers himself.


Some Hon. Members:: Name him.


ACCESS TO FREE TRADE STUDIES
Steven W. Langdon: Mr. Speaker, how can the Minister expect Canadians to have confidence in his handling of free trade talks when even the provinces have had to request public information about the free trade studies of the Government? Why is it that the Government keeps these studies secret from the people-


Mr. Speaker:: Order, please. That is a second question and it is long.


Charles Joseph Clark: Mr. Speaker, I was afraid Question Period would be over before the question got out. For the first time in Canadian history there has been an attempt made by a national Government to bring the provinces into full participation in a very important trade negotiation. There has already been agreement reached between both levels of Government as to how we, together, agree on data and on the facts that we want to bring into any negotiation. There are negotiations proceeding now between the federal and provincial Governments. We believe that they will be successful.
I want to make it clear, Mr. Speaker, that while the Government believes in ensuring-


Mr. Hovdebo:: Question Period is over.


David Orlikow: Time.


Charles Joseph Clark: -that there will be full participation by all of the affected provinces, it should also be abundantly clear to everyone that the Government has the mandate and the will to speak for all of Canada.


Some Hon. Members:: Hear, hear!


Ian Deans: The answer should be no longer than the question.


PROVINCIAL FRESH WATER RIGHTS
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question, too, is for the Secretary of State for External Affairs. Simon Reisman is meeting with provincial government representatives today. Knowing his personal commitment to the sale of Canadian water to the United States, will the Government at least allow provincial veto over any agreement on fresh water rights within their own boundaries?
Oral Questions


Charles Joseph Clark: Mr. Speaker, that question has been raised before and has been answered before.


GRAND CANAL COMPANY PROPOSAL
Sheila Maureen Copps: Mr. Speaker, the question has not been answered. Contrary to the position taken by the Minister of the Environment, two months ago the National Research Council secretly approved-


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


Sheila Maureen Copps: Is the Minister aware that the National Research Council secretly approved a grant to the Grand Canal Company which is studying a proposal to divert Arctic waters through the Great Lakes? How can the Government expect provincial Ministers and provincial Governments to accept this "trust us" attitude on this very important issue in light of the confusing federal signals about whether or not our water is up for sale?


Charles Joseph Clark: Mr. Speaker, the question has been posed several times and has been answered several times. The question of Canada's water is not involved in the trade negotiations. That has been made clear a number of times. 1 think the Hon. Member would do the House and the country a service if, once the facts are known, she would not lend the stature of her office to sowing confusion in the country.


Some Hon. Members:: Hear, hear!


SOCIAL SECURITY
Stanley J. Hovdebo: Mr. Speaker, my question is for the Minister of National Health and Welfare. There are approximately 67,500 Guaranteed Income Supplement applications to be processed by the regional office in Regina. Last year 27 temporary staff were hired to do that job. This year it appears that only two are being hired, which seems inadequate for the job. Is this the same situation all across Canada? Is there not a danger that the applications will not be processed in time for April?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, before April 1 of every year those old age pensioners who are eligible, on the basis of income, for a part of or for the entire Guaranteed Income Supplement have to make application for it. 1 have again approved an insert to indicate to both eligible old age pensioners and family members that applications may be made well in advance, that they do not have to wait until the end of March to do it, and that they will be processed in due time.

February 4, 1986
Oral Questions
The Member should also note that each year there are some eligible senior citizens who do not apply, either because they forget or are not aware of it. That is the reason for the insert. We have always put into place a system whereby these people can be taken care of.


REQUEST FOR MINISTERIAL GUARANTEE
Stanley J. Hovdebo: Mr. Speaker, the incomes of some senior citizens will be dropped from $612 to $385 if the applications are not processed-


Mr. Speaker:: Order, please. This is again a preamble. Is there a question?


Stanley J. Hovdebo: Will the Minister ensure that seniors who depend on the $612 GIS get it even if the applications are not processed on time?


Arthur Jacob (Jake) Epp: Mr. Speaker, the Member makes a totally misleading point. I just answered that. I said that these people are eligible for the OAS and the GIS and that there is not a drop. Other than if application is not made, it has always been paid on time and we will pay it on time again. There is no question about it. I wish he would not sow that kind of fear for senior citizens who are relying on that money, and that he would not use it for political purposes.


Some Hon. Members:: Hear, hear!


EDUCATION
Mr. Roland de Corneille (Eglinton-Lawrence):: Mr. Speaker, my question is for the Hon. Secretary of State. After all the lofty rhetoric and the promises that his Government has made that it would consult, work, and co-operate with the provinces, why has the Secretary of State for External Affairs now further antagonized the provinces by refusing, as recently as last week, to consult with and reveal to them the contents of the Government's report which, in fact, is about the provinces themselves and what they are going to do to finance postsecondary education? Why is he making a unilateral, one-sided report and keeping the provinces-


Mr. Speaker:: Order, please. Order, please!


Hon. Benoit Bouchard (Secretary of State of Canada):: Mr. Speaker, if only my colleague were a bit more patient, we will be tabling that report in the House tomorrow. He will also have all necessary information about the provinces.
I must point out that the provinces were consulted about the figures in the report, and I think we will have every opportunity to comment on the report since it will be tabled tomorrow afternoon.


Mr. Speaker:: A short supplementary.


FUNDING OF TRAINING PROGRAMS
Roland de Corneille: Mr. Speaker, that is not what the provinces say. I do not think that answer is good enough because we are taking away from the provinces on every front. My supplementary-


Mr. Speaker:: Quickly, please.


Roland de Corneille: Will the Secretary of State stop the Minister of Employment and Immigration from reducing by 40 per cent the funds for training programs which are so vital to the survival of community colleges? Will he stop her from doing it?
[ Translation]


Benoît Bouchard: Mr. Speaker, there is no connection between the report and the question raised by the Hon. Member, in the sense that the employment policies advocated by my colleague the Minister of Employment and Immigration include some which relate to the report mentioned. These are figures concerning funds allocated by the federal Government for provincial education last year. Again I say there is no connection, and the Hon. Member will have an opportunity to ask questions once the report has been tabled in the House.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Monday, February 3, 1986, meet the requirements of the Standing Orders as to form.



POINTS OF ORDER


Ian Deans: Mr. Speaker, I rise on a point of order to ask first, if you can hear me-


Mr. Speaker:: Hardly.


Ian Deans: I do not doubt it. That may be part of my point of order.
I am sure you will recall that during the Question Period a question put by my colleague from Vancouver-Kingsway (Mr. 

February 4, 1986

Waddell) was disallowed. Would you be kind enough to review the question within the context of the much more general motion put down in his name on behalf of this Party for the debate today. The noise level is sometimes high and, therefore, obscures the actual words of an hon. Member.
Perhaps you can determine whether it is indeed inappropriate for a Member to seek the answer to a specific question affecting a specific area, notwithstanding the fact that a much more general debate, which may encompass that but not specifically deal with it, is already under way. It is vitally important for the purposes of future Question Periods.


Mr. Gray (Windsor West):: Mr. Speaker, we all realize that the occupant of the chair during the Question Period has a very difficult job, and we understand the challenges that involve the necessity for making very quick decisions.
Therefore, I want to draw your attention to what is clearly on the record of the House of Commons. There are many occasions, including a number under your distinguished Speakership, when questions were allowed on specific matters but which related to subjects that were then under debate in the House during Government Orders or on Opposition Days. For example, we regularly have questions during Question Period on matters pertaining to the Budget while the Budget debate is taking place. Let me give another example. After second reading debate on the Investment Canada Bill began in the House in the morning, questions were accepted during that day's Question Period on matters pertaining to that very piece of legislation.
I respectfully draw these precedents, and many others which I could give, to your attention for your consideration of the request made by my hon. colleague.


Mr. Speaker:: The Chair thanks the distinguished Members for Hamilton Mountain (Mr. Deans) and Windsor West (Mr. Gray) for the quality and tone of their presentations. I think both Members know that the Chair is confronted with the citation stating that a question during Question Period should not anticipate the Order of the Day. It was on that basis only that I made my interjection. During that interjection I tried to signal that I was prepared to give a supplementary on a general policy question, separate from the one that is in the general motion.
The Hon. Member for Hamilton Mountain raises the Chair's dilemma when he talks about a matter which is specific for Question Period but flows within the general matter of debate. That is very difficult for the Chair to contemplate.
With regard to the matter raised by the Hon. Member for Windsor West, I will be happy to consider the matter. However, the distinction is usually made when the matter is broader than the specific question that is before the House for debate, such as the motion before the House today. However, I will consider the matter and return to the House. The Hon. Member for Ottawa-Carleton (Mr. Turner) on the same point of order.
Point of Order-Mr. Turner (Ottawa-Carleton)


REFUSAL OF SUPPLEMENTARY QUESTION-REQUEST FOR RULING ON QUESTION OF PRIVILEGE-JANUARY 15, 1986
John Barry Turner: Mr. Speaker, perhaps this is also related to the fact there was a fair amount of noise during Question Period, but I attempted to rise for a supplementary question. You either did not hear me or perhaps did not see me.
You will recall that I rose on a question of privilege on January 15 and Your Honour said that at some point in the not too distant future you would be making a ruling on this issue that is frustrating us during Question Period. Are we getting close to that point in the future?


Mr. Speaker:: The Hon. Member is confusing two matters. I made a ruling with regard to the matter he raises.
I subsequently had been asked by the Hon. Member for Hamilton Mountain (Mr. Deans) to deal with Question Period in general terms. I intend to do so at the earliest possible moment. Hon. Members will understand that the Chair has been rather occupied.
I might say to the Hon. Member for Ottawa-Carleton that 1 did see him rise today and heard his claim for a supplementary question. He knows the Chair's practice in that regard. There is no bar on a supplementary question but I think he knows that it is the Chair's intention to allow as many Government questions on a given day as possible, within our normal practices.


Mr. Lewis:: Mr. Speaker, I rise on a point of order in relation to your comments about Question Period. I hope there will be an opportunity for certain Members from each Party to make brief suggestions to you with respect to Question Period at an appropriate time, if that is in order.


Mr. Speaker:: With great respect, one of the reasons I have been waiting to deliver the ruling is that when the Hon. Member for Hamilton Mountain (Mr. Deans) asked me to review the matter, the Parliamentary Secretary asked if I would wait for representations from him. I have yet to receive any.


Philip Derek Lewis: Does it matter if I invite you or you invite me? Surely we can get together.


Mr. Speaker:: Order, please. If the Parliamentary Secretary wishes to make submissions to me on this matter, 1 am perfectly happy to receive them. I hope that he will do so. I do have an obligation to come back to the House as quickly as possible, and it has now been eight or nine days.

February 4, 1986
Petitions



ROUTINE PROCEEDINGS


Don Boudria: Mr. Speaker, I have a petition signed by 150 residents of the riding of Glengarry-Prescott-Russell, living in the vicinity of Orleans, Ontario. They demand justice from Canada Post when this organization refuses to provide these residents with door-to-door postal service they way most other urban communities in Canada are served. They are protesting the very unfair action by Canada Post and the Government of Canada relating to this issue.
[ Translation]


Fernand Robichaud: Mr. Speaker, again today I have the duty to present to the House a petition from residents of the riding of Moncton and Westmorland-Kent. Those people are still concerned about the situation at the CN Moncton shops and, by presenting this petition, they want to make sure that the House is fully aware of the importance of those jobs to the Moncton region.


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I rise to present a petition signed by approximately 1,100 residents from Reserve Mines in the constituency of Cape Breton-East Richmond. Their petition is on behalf of a lady by the name of Evelyn Syms, a resident of Reserve Mines and an employee of Canada Post for the past 16 years who has proven to be an efficient and conscientious public servant. She attempted to seek a job with Canada Post for a position as postmistress and has been denied. The community wishes me to lay this petition before the House in order to register their complaint on behalf of Evelyn Syms.


Mr. Dennis H. Cochrane (Moncton):: Mr. Speaker, I rise once again, and I appreciate the Speaker's indulgence in this regard, to present petitions signed by residents of the federal constituency of Moncton and Westmorland-Kent expressing their concern with regard to the Canadian National's assessment of the maintenance capacity of the shop facilities.


Nelson Andrew Riis: Mr. Speaker, it is my pleasure to rise and present a petition on behalf of a
number of residents of Halifax indicating their concern about the unfair tax increases of the last budget.


Nelson Andrew Riis: I have another petition from Saskatchewan. People are still holding up some hope that the Government will come to its senses and reinstate full indexation of family allowances.


Mr. Speaker:: The Hon. Minister of State for Finance (Mrs. McDougall) is seeking the floor to move a motion?


Mrs. McDougall:: Mr. Speaker, I am sorry but I am still finding this Chamber very noisy. 1 have a notice of a Ways and Means Motion. I have not heard any of the things you have been saying.


Mr. Speaker:: Order, please. The Chair has enormous difficulty with the commotion going on. It is not surprising that other Members have difficulty hearing.
The Hon. Minister of State for Finance intends to move now a Ways and Means motion?


Barbara Jean McDougall: Yes, Mr. Speaker.


Barbara Jean McDougall: Mr. Speaker, I wish to table in both official languages copies of a Ways and Means motion concerning the Atlantic Accord pursuant to Standing Order 65(1). Pursuant to Standing Order 65(2), I ask that an Order of the Day be designated for its consideration.


Mr. Speaker:: The Minister is in fact operating under Government Notices of Motions.


Barbara Jean McDougall: Is it not in order, Mr. Speaker?


Mr. Speaker:: It is perfectly in order. The tabling of that notice can be done at anytime.


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


Mr. Marchi:: Mr. Speaker, I rise on a point of order. 1 have put several questions on the Order Paper dating back a year ago. I have risen a number of times to ask the Parliamentary Secretary about them. He has assured me that he would use
February 4, 1986

his kind office to facilitate the answering of those questions. Can the Parliamentary Secretary tell me whether he has made any headway on those several matters outstanding?


Philip Derek Lewis: Mr. Speaker, I am pleased to announce that I am making great progress, but I do not have any progress to report.


Don Boudria: Mr. Speaker, this is a very serious matter. The Government is refusing, obviously deliberately, to answer questions from the Opposition.
Can the Parliamentary Secretary give a date to this House now when he will table the cost of the Shamrock Summit of March 17 last year, a question I have had on the Order Paper for almost a year? I know this is terribly embarrassing, but on what date will the Parliamentary Secretary table that information in the House?


Philip Derek Lewis: Mr. Speaker, I do not see why the Hon. Member should be embarrassed about that question. He asked it in good faith. I will look into it.


Mr. Gagnon:: Mr. Speaker, it is not only the Opposition that needs some questions answered. I posed a question on December 14, 1984. Can the Parliamentary Secretary tell me when I could expect an answer?


Philip Derek Lewis: Mr. Speaker, I just want to indicate that we are treating everybody the same.


Mr. Speaker:: Order, please. The Hon. Member for York South-Weston (Mr. Nunziata) is rising on a point of order under questions.


Mr. Nunziata:: Mr. Speaker, 1 have a question for the Parliamentary Secretary. With respect to Questions on the Order Paper, I understand that the Special Committee looking into Parliamentary Reform has made certain recommendations relating to questions on the Order Paper. Could the Parliamentary Secretary tell me what the status of those recommendations are and whether he supports the recommendations?


Mr. Speaker:: Order, please. The question is out of order at this time.
Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.
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GOVERNMENT ORDERS


[Stage Direction]
ALLOTTED DAY, S O. 63-PRICE OF GASOLINE The House resumed consideration of the motion of Mr. Waddell:
That this House demands that the Government instruct Petro-Canada and its retail outlets to reduce their prices at the pump by six cents a litre, a move which would enable Petro-Canada to fulfil one of its basic purposes which is to provide Canada with reasonable energy prices.
John Horton McDermid: Mr. Speaker, 1 am pleased to join in the debate today on the motion proposed by my friend, the Hon. Member for Vancouver-Kingsway (Mr. Waddell). I am pleased to see him back in the House after he beat a hasty retreat during Question Period. I hope in the few minutes allotted to me in this debate to be able to answer some of the questions he wished to pose during Question Period, and I would like to answer some of the points he raised in his remarks this morning.
Let me start off by commenting on my hon. friend's remarks about a revolt by consumers. It is interesting to note that the Member referred many times in his address to little paper clip-outs which he has at times thrown all over the House. Let me read what they contain. It starts off:
Dear -	To: -
House of Commons
I've had enough.
I agree with the Canadian Automobile Association that gasoline taxes are too high.
The cost of gasoline is discouraging both Canadian and U.S. tourism and damaging our economy, and the high price is unfair to those of us who must use our cars to drive to work.
I am prepared to pay my share of costs relating to highways and roads, but I am against taxing gasoline to raise money to service our national debt.
You are my MP. I want to know what you plan to do to relieve motorists of this inequitable tax burden.
What it says is that taxes are too high. I submit that we all think taxes are too high. In every area we all think taxes are too high, but we also have certain responsibilities to provide the safety net we have, which they do not have in the United States. We have a responsibility to pay our debts which amount now to some $200 billion; the money has to come from somewhere. I think it is human nature to say: "Get the money somewhere else but not from us".
The Hon. Member has based his whole motion on these mail-ins. Yet the Member's motion says absolutely nothing about reducing taxes. What the Member for Vancouver-Kingsway says is reduce the cost at the pump by 6 cents a litre, but not in taxes. The Member does not refer to taxes. He did not even mention taxes in his speech. I assume he did it on purpose. It seemed obvious.
The tax on a litre of gasoline to the federal Government, no matter what the price, is 7.1 cents. Provincial taxes are higher, with the exeption of two provinces, Saskatchewan and Alberta. Those two provinces have no provincial sales tax on gasoline.

February 4, 1986
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Rather they get their income from royalties at the wellhead. Other provincial taxes range-and I have the exact figures here-anywhere from 7.7 cents; Ontario's is 8.3 cents, and the provincial tax in Quebec is 12.9 cents. I can give the figures for the other provinces. In Nova Scotia it is 10.1 cents; in New Brunswick it is 9.8 cents. There are the taxes on a litre of gasoline.
We all complain about the taxes, and I guess we always have. I remember that when I first had to pay income tax some 30 years ago, with my first summer job, I complained about taxes. I think that will always be the case.
That is not what the Hon. Member is talking about in this motion. What he is saying is that one oil company that competes in the market-place must reduce its price of gas at the pumps by a certain amount-6 cents per litre. He does not take into account that the company may lose money if it has to do that, or perhaps just break even. Whatever the situation may be, he just arbitrarily says, change the price as dictated by that great white father in Ottawa. Dictate, set, control, that is the NDP philosophy. We understand that. That is why the New Democratic Party has never been in power, and never will be in my lifetime, and that is for sure. They want to control the Canadian people. They want to get their hands on them. The first thing they want to control is gas prices. Then they want to control the price of bread, and then the price of cars, and then perhaps your suits and your neckties. They want to control all the prices. They want everything, they want to dictate.
The difference in philosophy between the socialist parties and the Progressive Conservative Party is dramatic and realistic, and the Canadian people can see through this facade, this phoney issue brought on the floor of the House today by the Hon. Member. Let me tell the people who are watching today that the Hon. Member does not like big companies; he does not like big transportation companies; and he does not like big oil companies. He does not like anything big, except big Government, and he loves big Government. The more bureaucrats you have controlling your life the better it is. That is what he wants to do, he wants to dictate everything in this country, and he is at it again with this motion. This happens all the time with the socialists, and the Canadian people can see through it.
What we are saying is let the market-place work. World oil prices are falling rather dramatically, especially within the last three weeks. The Hon. Member admitted in his speech today that the great fall started about two weeks ago on January 28, or thereabouts. That is when we saw the great fall in prices.
However, most refineries in this country have a two-month supply on hand, especially at this time of the year when the weather is cold and we have tremendous fluctuations in temperature. They keep emergency supplies on hand. For the most part, that is the oil for which they paid $28, $29, $30 a barrel. It is there now and going through the system. Before too long it will be through the system. As a matter of fact I read just
the other day that one of the purchases at about $18.50 a barrel, I believe, was for delivery on April 1. So we are talking lead time.
The Ottawa Citizen, in an editorial on January 31 said the following in reference to the Minister of Energy, Mines and Resources (Miss Carney):
Carney's intervention is little more than a counterpunch to the public relations drubbing the Government has been taking on this issue.
I readily admit that we have been taking a drubbing in public relations on the issue. However, there is much more merit to the things that Carney has been saying than those issuing from the mouths of mock, furious Liberals and New Democrats. It is juvenile to expect that a downturn in world oil prices will be felt instantly at the gas pumps. The cheaper oil now being bought will not reach markets until existing higher priced stocks have been exhausted. The Opposition sit there and holler while I read this because they do not like the truth. They don't like facts that are being presented. I have not known The Citizen to be too friendly to the Conservative Government over the last year and a half, but in this editorial they are bang on. This editorial was based on facts, not on innuendo, and not on great pie-in-the-sky public relations efforts on behalf of the Opposition.
We heard another complaint today about gas prices being cheaper in the United States than they are in Canada, and that is true. They do not have the provincial and federal taxes in the United States that we have in Canada. Also, they do not have the good roads we have in this country. They do not have the social security service nets that are provided in this country. Those costs have to be paid for by the individual. My hon. friend from Montreal who is very conversant in the energy industry, especially the retail end, made it very clear the other day that he has talked to many Americans who would gladly pay more for their oil and their gas if they had the social security, the old age security, the Guaranteed Income Supplements, and the health plans that we have in this country. They would gladly pay a few more cents a litre on their gas if they had these services.
Just as an aside at this particular point, the Hon. Member was talking this morning about home heating oil, but he failed to mention that home heating oil in Canada is 5 cents cheaper per litre than it is in the United States at the present time. He quite conveniently forgot to mention that this morning when he was bringing that point out. When they throw out these facts and figures he should remember that there are two sides to every story.
I might say to the Hon. Member that we fully expect that the decrease in the prices of oil will be seen at the gas pumps in this country in the not too distant future, but it does take time to go through the system. As a matter of fact, the Chairman of the Board of Imperial Oil Limited just yesterday was speaking to the prestigious Canadian Club in Toronto.


An Hon. Member:: Oh.
February 4, 1986


John Horton McDermid: Well, the Hon. Member is upset because he has never been invited, and I understand why. He was talking about what is going on in the market-place today and he said:
The expected decline in prices at the retail level may come sooner than expected; industry competition in the refined product business will come on like gangbusters.
I submit to you that we have seen this already. I can only speak from my personal grass roots experience. Last week in the small community of Georgetown, which is in my riding, retail gasoline was selling at 44.5 cents per litre, up to about 47.1 cents per litre. In Mississauga, as I drove to the airport the other day, it was 46.5 cents per litre. The market-place is working, the competition is working, even before the new oil prices are coming through.
I can assure you that if the Government dictates that the price be lowered by "x" number of pennies, it will not go any lower, even when there are lower input costs, or when the market dictates that it drop because of competition.
My friends in the NDP do not believe in competition. They want everything big. They do not want anybody to compete. On the basis of what they say now, the first thing they would do is commandeer another oil company and tack it on to Petro-Canada. That is what they would do. The first thing they would do if they got into office is make Petro-Canada bigger, and that would probably just be the beginning. They would probably buy up every oil company and crank up the old Canadian debt even more than it is now.
There have been opposition complaints about the differential between gas prices in Canada and the United States and I touched on that. I would like to return for a moment to that editorial from the Citizen. The article reads:
Opposition complaints about the differential between gasoline prices in Canada and the U.S. are just as disingenuous.
That is a great word. I have never heard the Opposition described quite like that before. I have heard it described as being a rag-tag bunch and other things, but that is a good word. The article goes on:
Taxes make up just 15 per cent of the pump price of American gasoline. In Canada, federal and provincial taxes account for more than half.
Governments could cut those taxes, of course. Has the opposition any helpful suggestions about where that revenue loss could be made up? Or, failing that, which government programs should be eliminated?
No, not at all. This is just a phoney motion. It is mischievous.
I would like to cover one very serious point which was brought up by the Hon. Member today. I think he is doing a very great disservice to Mr. and Mrs. McAra of Gravenhurst. Mr. and Mrs. McAra are commissioned sales people for the company Petro-Canada. They had been approached by representatives of the company personally a number of times and were requested to add the amount of federal and provincial tax increases to the price of gasoline charged by Petro-Canada. It was right in the contract that the McAras had with Petro-Canada that they should do that, but they defaulted on it.
Supply
Petro-Canada went out of its way to try to explain this matter to them and to help them, but they refused to change the price.
Mr. and Mrs. McAra's service station is located in what is affectionately called gasoline alley on Highway No. 11 just after Highway No. 400 between Barrie and Gravenhurst. In a stretch of perhaps half a mile or three-quarters of a mile, there must be 15 or 16 gas stations of all types, both independent and major. Gas prices in that area go up and down as the market dictates. It is a highly competitive stretch of road. The Hon. Member is from British Columbia and probably does not know about this part of Ontario. I know it very well because I travel it all the time as do a number of my colleagues. It is a highly competitive area and prices go up and down all the time.
The issue at hand is the addition of a tax which, under contract, must be applied to the price of gas. The McAras' agreement with Petro-Canada also indicates that the agreement can be terminated by either Mr. and Mrs. McAra or Petro-Canada with 24-hours' notice. Petro-Canada did not want to damage the ability of the McAras to carry on business and therefore promised to supply them with the product for another 90 days so that they could make the necessary arrangements to find another gasoline supplier. Petro-Canada will continue to supply them as long as they comply with the notice that was given.
I think it is very important to understand that the tanks and pumps and everything else were loaned to the McAras by the oil company. The company is allowing them to remain there until a new gas supplier has been found. I believe the company has been very fair to the McAras, and the Hon. Member knows full well that there are two sides to every story. Before he made some of the claims he did, he should have called to get the facts, something which he neglected to do.
I know my time is rapidly coming to a close, so in summing up, I would like to say that consumers will, because of the market-sensitive pricing we have put in place, realize benefits from the cut in the cost of oil. That is very important to remember. We believe that the market-place operates well. Members of the New Democratic Party, with the help of their friends, members of the Liberal Party, do not believe that. They want to dictate everything. If that has worked so well in the past, 1 want to know why gasoline prices in Montreal rose during the time of the National Energy Program, not by 80 per cent but by 94 per cent.
This mischievous motion that my hon. friend has put before us deserves to be defeated, pooh-poohed and shooed out of the House. It deserves to be exposed for what it really is, a public relations exercise to try to make it appear as though the Opposition is doing the consumer a favour when in fact it is making things more difficult for the consumer.


Ian Gardiner Waddell: Mr. Speaker, I have a comment to make and a question to ask of the Hon. Member. May I congratulate the Hon. Member on his speech? I would like to apologize to the Hon. Member for something which occurred some time ago. I saw the Minister of Justice (Mr. Crosbie) in the House and

February 4, 1986
Supply
the spirit moved me. Some time ago I said some nasty words about the Hon. Member. He has always been straightforward with me. I disagree almost totally with what he said in his speech, but it was a good speech. I would like to make some comments on it and to ask some questions of him.
Am I doing the McAras a disservice by putting their case in front of the House of Commons? I wonder if the Hon. Member spoke to the McAras. If he spoke to them, he would find, as Mrs. McAra told me last night, that she wanted to lower the price of gasoline by two-tenths of a cent per litre between the service and self-service because the other stations were doing that. She offered to pay that difference out of her own pocket and Petro-Canada would not let her because, in its words, other dealers would want to do it. That is precisely the point. Petro-Canada should be the price leader rather than the price follower in this time of dramatically falling world oil prices.
The Hon. Member knows that the market-place in the oil industry is an oligopoly. He knows that four companies own 70 per cent of the market, another four companies own another 15 per cent of the market, and the independents own 15 per cent of the market and are always getting squeezed. If he does not know that, he should turn around and ask the Hon. Member for Duvernay (Mr. Della Noce) about it. He owned a small station. He will tell the Hon. Member about it. The world market price is fixed either by OPEC or by Exxon. This great market out there is something to behold.
My friend brought up the red herring, no pun intended, about the big, bad socialists dictating the price. There are times when it is right to dictate prices and times when it is not right. The Hon. Member said that socialists dictate prices at all times. I am proud of the fact that when Tommy Douglas became Premier of Saskatchewan in 1944, he told the banks not to foreclose on the poor farmers. Their sons and daughters are still in business today because of that. There are times when we must use the power of Government.
The Hon. Member might be surprised to learn that I am a socialist who believes in a more decentralized Government, but we will talk about that some other time. Of course I mentioned taxes in my speech. I said that taxes on the consumer were too high and that there was a time to stop. I admitted that the Government could use the money for social services but I said that it was a cop-out to make that its only argument for taxing the motorist and for not reducing oil prices at a time of dramatically declining world oil prices.
As a matter of fact, we in the NDP put our money where our mouth is. I agree with the Hon. Member that provincial Governments are piggybacking higher taxes and that the Canadian Automobile Association should go after the provincial Governments as well. In the Province of Ontario, the NDP stopped the Ontario provincial Government from putting an increase on gasoline taxes not too long ago.


John Horton McDermid: Who?


Ian Gardiner Waddell: The New Democratic Party of Ontario.


John Horton McDermid: Who else?


Ian Gardiner Waddell: I don't know; maybe the Conservatives, too.
The Hon. Member cites The Citizen of Ottawa. The Winnipeg Free Press has an editorial, too. We can throw editorials at each other until we get tired. I quote from an article which appeared in the Winnipeg Free Press on January 25 of this year which states:
Faced with dropping world prices that are too large to ignore, the government has fallen back on the time-worn excuse that price reductions take 60 days to work themselves through the system. If that is the case, they should be working their way through by now.
I want to ask the Hon. Member this question. How much lead time will it take for these prices to work their way through? I ask this question given the fact that there are companies such as Imperial Oil which not only own the oil but refine and market it, in some cases. The incentive for Imperial in that type of situation is to keep the prices high and not reduce them. I want to know from the Hon. Member how long it will take. Can the Hon. Member give me some figures? He says: "We expect decreases in the not too distant future". Will he give me some time limits? When will we see this $9 a barrel decrease reflected at the pump? If the Hon. Member would give me some time limits, then maybe we would stop pressing and the consumers would be satisfied. Let us have some specifics on the subject. How long will it take to go through? What guarantee does the Hon. Member have from the oil companies that, in fact, the prices will be passed along? From past conduct I have noticed that if there is an increase in the world price today it is placed on the consumer at the pumps tomorrow. However, if there is a decrease we hear: "Well, sometime in the not too distant future we expect a decrease". When and by how much?


John Horton McDermid: Mr. Speaker, the Hon. Member asks when and by how much. First, I cannot say when. I can tell the Hon. Member that in some areas of Canada where there are great reserves of oil it has to be used up before the cheaper oil arrives. In those areas it may take a little longer. In other areas where there are low reserves it may take less time. However, we will see it in the next few weeks. There is no question about that.
The Hon. Member asks how much. That is impossible to tell. It will vary in different areas. If I say how much it will be, then it may turn out to be a little different at the gas pump at the Co-op in Georgetown, which it is today. It is 44.8 cents a litre there as opposed to the Shell station down the road where it costs a penny-and-a-half more. To say exactly what the price will be is foolish. The market has so much to do with it, and the Hon. Member knows that full well. He is being mischievous again.
I might say that it is interesting to hear the Hon. Member quote our good friend and great parliamentarian Tommy
February 4, 1986

Douglas. He now sits on the board of directors of one of those big nasty oil companies, Husky Oil.


Ian Gardiner Waddell: It's a Canadian company.


John Horton McDermid: I know it is of great embarrasment to members of the New Democratic Party.


David Orlikow: Not at all. We are proud of it. Why should we be embarrassed? We have no embarrasment at all.


John Horton McDermid: I know it was of great embarrasment to the New Democratic Party when Mr. Douglas took on that job.
I think the Hon. Member knows the industry a little better then he makes believe. He knows full well that prices will vary from market to market because of the cost of transportation, refining costs, and so on and so forth. There are so many factors that come into play here. It is not just a simple matter of ten cents, six cents, five cents, or whatever it may be. He knows that full well. To be fair-and it may hurt a little but I am sure he can be fair-he should admit that that is a factor. We know that the prices are now down in Montreal. My friend, the Hon. Member for Duvernay (Mr. Della Noce), was never squeezed.


Mr. Della  Noce@: I stood up.


John Horton McDermid: That is right. He was never squeezed. He stoop up for his rights. He fought. To say that he was squeezed is very unfair.
To sum up, I would like to say that the system which is in place today is a market sensitive system which will benefit the consumer. We are seeing some signs of that already. In Mississauga the price of a litre of gasoline is 46.5 cents. Just two weeks ago it was 53 cents litre. That is because the market forces are at play. It is that price even before the low cost crudes have come through. That is the market forces working, and working to the benefit of the consumer.
The Hon. Member says that his Party is not proposing to dictate prices. What is he saying in his motion? He is saying that a Crown corporation should lower its gasoline prices by six cents a litre. He is price setting. That is what he is doing. He cannot fool the Canadian people with that.


Ian Gardiner Waddell: Mr. Speaker, the Hon. Member mentioned taxes. I wish to ask the Parliamentary Secretary this question. How can any Government justify increasing sales and income taxes, higher gasoline prices and taxes, and cuts in family allowances, all in the name of spending restraint, while in Bills which we have just passed it is pumping billions into the oil industry? It is pumping $5.3 billion in forgone taxes to an industry that is already fat to begin with and that has clever corporation accountants.


John Horton McDermid: Mr. Speaker, I will try to answer the Hon. Member's very complicated question.


David Orlikow: It is only complicated to answer.
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John Horton McDermid: I will try to make my answer as simple as possible. The taxation of this particular industry was unique. No other industry in the country was taxed in the same way. It was unfair.


David Orlikow: It was too low.


John Horton McDermid: It caused untold damage to the economy. We are not handing the oil companies billions of dollars. We are removing the very expensive Petroleum Incentive Program which paid for activity and not results. It was a very expensive program. The NDP Members like to say that we are handing them billions of dollars-we are not. What we are saying is: "Your industry will be taxed fairly, just like every other industry will be taxed". The industry was not being taxed fairly before and now it is being taxed fairly. The industry is getting on with the job. Investment intentions are up $2 billion in the first year alone. The figures which the Hon. Member throws out go on and on for years and years down the road.


Ian Gardiner Waddell: They are your figures.


John Horton McDermid: In the very first year we have seen $2 billion in increased investment intentions. I think that is significant since it translates into jobs right across the country.


The Acting Speaker (Mr. Charest):: Resuming debate, the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria).


Don Boudria: Mr. Speaker, I am pleased to have the opportunity this afternoon to participate in this very important debate. It is important to the constituents of my riding of Glengarry-Prescott-Russell.
To put everything in context, I think we should perhaps establish for the information of all Hon. Members why this issue is so vital to the people I represent in the House of Commons. As Hon. Members know, Glengarry-Prescott-Russell is a large rural riding. Having an automobile in the constituency which I represent is not a luxury, as some claim it could be in certain urban centres, but it is indeed vital. It is as vital as having electricity, a telephone, or any of those other things which Canadian consumers need to have in this large country in which we live. The people of Glengarry-Prescott-Russell need their automobiles in order to go to work. They need them when they are unemployed in order to go out to find work. They need them to go and cash their welfare cheques, or to do anything else which they have to do, especially those who live outside the towns and villages of the riding. It is important to establish that having a car in the constituency which I represent is not only desirable but it is necessary for a large number of my constituents.
I also want Hon. Members to know that in the constituency I represent, which is large and rural, agriculture is one of the vital industries. We have been told time and time again that the largest input cost for farmers is the cost of fuel. Therefore, the farmers of the constituency I represent are worried about the price of fuel, the price of gasoline and diesel fuel and the other input costs which they have.
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Mr. Speaker, earlier today I heard the Parliamentary Secretary of the Minister of Energy, Mines and Resources (Mr. McDermid) say that Members of the Opposition are irresponsible when they raise such issues in the House and that they do so only to impress their constituents.
Mr. Speaker, I ask you what is wrong with a Member of the Opposition rising in the House and publicly defending the interests of the people who elected him? I, for one, will be doing just that today and I have no intention of apologizing to the Parliamentary Secretary of the Minister of Energy, Mines and Resources for defending the rights and even the needs of the voters of the riding of Glengarry-Prescott-Russell.
As someone pointed out earlier, it is a fact that the Conservative Government gave $5 billion to the oil industry, and that $2 billion went to the friends of the Conservatives-the bankers, Mr. Speaker.
So I want Government Members and all my constituents to know that additional taxes and the excessive profits of that industry are not necessary and that, in fact, it is false to pretend that excessive taxes must be paid on petroleum products to maintain old age security pensions. Those excessive taxes must be paid as a result of the useless expenditures of the Conservative Government we have today.
I would like to read briefly from an article in The Ottawa Citizen. It was written by John Ferguson of Southam News. He states in an open letter to the Minister of Energy, Mines and Resources, and I quote:
You may be Minister of Energy, but that doesn't mean you're Minister for Big Oil. You're supposed to be looking out for everyone's energy interests, not just the boys at the Petroleum Club.
I know last year you got a lot of political credit for being one of Brian Mulroney's "no problems" ministers after you dismantled the National Energy Program and made Alberta happy.
And maybe you kind of got used to siding with the oil industry. I mean, giving them billions in tax cuts and all that.
World oil prices are falling and it shouldn't be any surprise that the opposition is a little curious as to when we're going to see lower prices at the pumps. After all, prices of heating oil and gasoline sure did jump up during the '70s when crude oil prices were rising, didn't they?
That is indeed a very important topic. When oil prices were increasing, consumers were hit with those increases. Now that oil prices are decreasing, consumers are hit with increases again.


Mr. Della  Noce@: False.


John Horton McDermid: That's not true.


Don Boudria: Surely, it is totally illogical that the consumers of Canada at the time of lowering gasoline prices are not paying any less for their gas and, in many cases, are actually paying more than they were two or three months ago at the time when prices started to go down.
The Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid) said in this House that it takes a while before the lower oil prices flow through the system. Why is it that when prices were going up, they flowed through the system as fast as castor oil? It had an immediate effect, the next day. We were purged of the lower prices and the higher prices were inflicted upon the Canadian consumers. Now, of course, prices are going down but we are told it takes a while for the system to take care of it.
One responsible cabinet Minister a few days ago-and I believe it was the Minister of Energy, Mines and Resources (Miss Carney)-said in the House that the tourism industry was not affected by oil prices. In the riding of Glengarry-Prescott-Russell, during the last few years, we have done quite a bit of work trying to attract tourism to our area. As you know, Mr. Speaker, as do all Hon. Members, Glengarry-Prescott-Russell is the most beautiful constituency in Canada, even if 1 say so myself. In that riding, we are trying to promote tourism. We know, Mr. Speaker, you come very often to our area, but we would like others to come as well, and it is very difficult for us in eastern Ontario to attract tourists from the large cities like New York, Montreal and Toronto when we have these very high gasoline prices. It makes it very difficult for the family which wants to make one-day trips or people who come for weekends or even longer trips in the case of out-of-country tourists.
I want to say to the Hon. Member for Duvernay (Mr. Della Noce) who, obviously, is a very knowledgeable person in the area of gasoline prices-and I also know he travels through the constituency he represents-that he knows that many people from his own riding visit the riding I represent. In fact, every Sunday we see thousands of his constituents in Carillon Provincial Park in Hawkesbury.


John Horton McDermid: I thought you said you didn't attract tourists.


Don Boudria: And that is beneficial for the area I represent. The Minister of Energy, Mines and Resources has stated, very irresponsibly, that the tourism industry would not be affected by increasing gasoline prices. This statement is in direct contradiction to a submission made to the Liberal Party by the Canadian Automobile Association earlier this year. 1 quote it in part:
The resulting high gasoline prices, in a country with its own oil resources, have put our transportation dependent industries at an economic disadvantage. Tourism in particular has suffered a serious loss of business-
So, Mr. Speaker, as you can see, the loss in our tourism business has been serious, according to the Canadian Automobile Association, and when it comes to believing the Minister of Energy, Mines and Resources or the Canadian Automobile Association, I think I would rather listen to the CAA any time than to the Minister who has her own biased views on this issue. The report further states, and 1 quote:
Presently, an American visitor is paying approximately 25 per cent more for motor fuel after taking into account the difference between the Canadian and American dollar and the Imperial and American gallon. This has engendered a perception by Americans that Canada is an expensive vacation destination.
February 4, 1986

So we can see that the Government is creating undue hardship to the tourism industry.
I would like to say a few words about the effective gasoline prices on agriculture. As I indicated previously, the largest input costs farmers have in fuel prices. I am sure the Parliamentary Secretary knows this. The Ontario Federation of Agriculture submits that there will be an excise tax increase of two cents per litre on gasoline, diesel fuel, aviation fuel and jet fuel effective September 3, 1985. This increase is not subject to any rebate. As well, the primary industries levy offset program is now being phased out. Consequently, farmers may no longer claim the 1.8 cents per litre rebate after March 31, 1985. Claims can be continued to be Filled out for puchases between December 1, 1984 and March 31, 1985 for up to one year from the date of purchase. In other words, the farmers are telling us that they are subject to a tax increase.
What did the Tories say to the farmers of Canada during the last election campaign? Did they tell them that gasoline prices were going to go up? Did they say: "Vote for me and it will cost more to fill your tank"? No, the tories did not say that. The Tories promised many things. There is a list of 338 promises and I want you to know, Mr. Speaker, that if you want a copy of it, I will gladly send one to you, and any Canadian can write to me-no stamp necessary-and I will send them a copy of it as well.
The Tories promised that they would protect the consumer from price surges in oil markets. That was a promise made by the Tories.


Mr. Edwards:: Yes, and we did.


Don Boudria: They promised this at a meeting known as the Atlantic caucus on August 2, 1984. They issued a press release after that stating that the price of gasoline in the United States, in Boston, was 50 cents per gallon cheaper than in Saint John and, according to the Conservatives, this was terrible. There should not be this difference, according to the Tories. But where are we today? What about the improvements the Tories made in this price differential between Canada and the United States? In October of 1984, the average Canadian price was 47.2 cents per litre. The average U.S. price was 39 cents per litre. Looking at the present situation, the average Canadian price in October, 1985 was 52.1 cents per litre. The U.S. price was 40 cents. As you can see, the difference between Canadian and U.S. prices, which the Tories themselves called unacceptable in August of 1984, is getting larger. Surely this would cause all Tory back-benchers to be in an uproar if they really had the interests of consumers and their constituents at heart.
In the first 12 months this Government was in office the change in the price of gasoline amounted to a 10.4 per cent increase. In the U.S. it was 2.5 per cent over the same time period. That should tell any Tory in this room that they are totally wrong when they tell the Canadian people that this is normal. In my view these price increases are unreasonable,
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both from a tax standpoint and that of the profit margins which multinational companies enjoy.


John Horton McDermid: What is that profit margin?


Don Boudria: I think it would be appropriate if we looked at many of the prices charged in Canada and the U.S. and drew comparisons. Let us look at the price of gasoline here in Ottawa, which is very close to my riding. On O'Connor Street we are told that the price of unleaded gas as of this morning was 56.3 cents per litre.


John Horton McDermid: It is 52 cents.


Don Boudria: In Washington, D.C., at the Gulf station on Massachusetts Avenue, right near Capitol Hill, do you know what the price is?


Mr. Della  Noce@: A dollar six a gallon.


Don Boudria: It is 43.55 cents in Canadian dollars.


John Horton McDermid: It is 44.5 cents in Georgetown.


Don Boudria: Do you see how unfair this is to the Canadian consumer? I think most Members, deep down inside, recognize that what is happening here is that the Canadian consumer is being gouged, and this is most unfair.
Let us look at the spot market for crude oil. In January, 1984 it was $29.80 a barrel in the U.S. In the United Kingdom it was $29.49. As of January 20 the U.S. price was $21.25 and the British price $20.10. Has there been a proportional decrease in gasoline prices? No. Has there been any kind of a decrease in gasoline prices in my constituency? None at all. The price has not decreased one bit. That is the sad reality.
Recently the Ontario Motor League wrote to my Leader and it made a few points very clear. It thinks the price of gasoline is indeed way too expensive. It says that 90 per cent of all passenger miles travelled in Canada are accomplished by automobile. In the constituency I represent that figure would probably be closer to 99 per cent. Total Ontario government revenues through various fees and taxes levied against motorists in 1985 amounted to $1.6 billion. Gasoline taxes in Ontario have increased 63 per cent since 1981.


Mr. Della  Noce@: Wrong again.


Don Boudria: If Members across the way think the Ontario Motor League is wrong, that is Fine. I want the OML to know that that is the kind of knee-jerk reaction from the Tories. They refuse to accept anyone else's opinion. They think that their wrong opinion is right. That is why the Government is in deep trouble so soon after being elected. The Tories have wasted $5 billion in hand-outs to their friends in the oil industry, then $2 billion to bail out the banks. They have been wasting taxpayers' dollars and giving cushy jobs to their friends. Now there is no money to give a break to the consumer. That is the sad reality. My constituents are upset about this. They have been sending me letters, and I have a stack of them right here. They are not satisfied, they want the

February 4, 1986
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price to be lower, notwithstanding the fact that the Tories want to keep it high.


Mr. Della  Noce@: You are not doing your job; that is why they are not satisfied.


The Acting Speaker (Mr. Charest):: Questions or comments.


Mr. Crosby:: Mr. Speaker, I have a comment to make concerning the Hon. Member's speech, and then I have two questions I would like to ask him.
I am sure all Members of the House realize that the father of Petro-Canada is the Liberal Party of Canada. It was created by a Bill passed in this House in 1975. Part of the mandate given to the company by the Liberal Government was to operate an oil company free and independent of the direct control of the Government and the Parliament of Canada.


Ian Gardiner Waddell: No, it was not.


Howard Edward Crosby: It was given a mandate to carry out certain tasks in accordance with that statute and on the basis of its own independent advice. We now have before the House a motion to change that. The motion would have the Minister of Energy, Mines and Resources (Miss Carney) and the Government interfere with that statutory mandate. I am surprised that the Hon. Member, an adherent of the Party that created this company, would now violate the principle on which it was based.
My other comment in this. Petro-Canada and, I believe, the other oil companies of Canada fix their prices on the basis of their costs. Is there any reason to believe that the current price of gasoline in my Province of Nova Scotia, for example, is based on the current price of crude? If not, if it is in fact based on higher-priced crude bought on the market some time ago when prices were higher, does the Hon. Member recommend that Petro-Canada in particular, as well as the other oil companies, should absorb that difference? If so, how does he suggest to the House of Commons and the companies and the people of Canada that they recover that cost? Does Petro-Canada charge it against other products? Does it reduce the price of gasoline and increase the price of oil? Does it sell windshield washer fluid for a price higher than it is today? Does it decrease its exploratory efforts? How is it going to recover the money it loses if it reduces the price of gasoline today, February 4, when the price it paid for the crude demands the price now fixed at the pump in Nova Scotia? Would the Member depart from the statutory mandate of Petro-Canada? Would he recommend that a Crown corporation charge a price to the consumer which does not allow it to recover its costs? The ultimate result would be, of course, that someone else is going to have to absorb that loss. That would probably be the taxpayers of Canada. So perhaps he just wants to transfer the cost from the consumer of the gasoline to the taxpayers of Canada. I want him to tell us how that is going to accomplish anything.


Don Boudria: Mr. Speaker, the mandate of Petro-Canada was clearly to give the consumers of the country a window-


Mr. Della  Noce@: What? What?


Don Boudria: Mr. Speaker, if the Member for Duvernay (Mr. Della Noce) wants the floor, would you tell him to shut up and ask his questions later?


Some Hon. Members:: Oh, oh!


Don Boudria: As I was saying, before I was so rudely interrupted by the Member for Duvernay, the mandate of Petro-Canada is clearly to be a window on the oil industry to ensure Canada's security of supply. We all know that that is what it was. We all know that it was necessary when it was established and that it is still necessary today. It was necessary to have a form of protection against multinationals which, at one time, were diverting supplies from our country to bring them elsewhere. We all know that is the reason it was created. We all know why it was necessary, and let us not forget that today.
Section 7(2) of the Petro-Canada Act permits, and in fact mandates, Petro-Canada to have the moderating influence on the industry which is so necessary to ensure that Canadian consumers are not gouged by foreign multinationals. Petro-Canada is ours, Mr. Speaker. It is yours and mine.


Howard Edward Crosby: Well, you lower the price then.


Don Boudria: It belongs to the people of Canada. They have paid for it with their tax dollars and they do not need to be gouged at this time by anyone, whether a multinational, a Canadian corporation, a Crown corporation, or anyone else. The hard-earned dollars of the Canadian taxpayer must be protected. If the Tories across the way are unwilling to do that, we in the Opposition want to do it for them.


Mr. Della  Noce@: Mr. Speaker, I want to respond to my colleague from Glengarry-Prescott-Russell (Mr. Boudria) who said he gets a lot of complaints from his constituents, but he did not even answer my question. He is not alone, there must be many others who get complaints. But anyone who gets a complaint must answer and tell the truth, something he has yet to do. Either he does not understand, or he actslas if he does not. We get complaints-that is normal and par for the course-because consumers do not understand why oil prices went down, but not at the pump. There is an explanation, but the Hon. Member has to know what it is. There is a difference between a tax on the gross cost of a product. . . There is a difference between a provincial tax and a federal tax. There is a difference between a Crown corporation and a private sector company.
Well, my friend did not say anything about that, but it is quite easy to figure out, Mr. Speaker. When the price of oil
February 4, 1986

products decreases, it takes a little while to work its way down to the car owner. The product must go through a pipeline, be shipped by tanker, carried to the refinery, delivered to the service station, and then pumped into the gas tank. That is where they will get the discount, that is where they will see the price go down. It is just a question of time.
Perhaps my colleague might tell his constituents-

The good price is coming, but it takes a little time until the new product comes in. When one is in business one understands that you need an inventory. The Member will never be in business. I hope that people will never believe what the Member just said. He is not telling the thruth. Tell the people that it takes time, as it took time when the price went up. It takes 40 to 60 days. I agree that when it is time for the oil companies to put the price down, inventories are always a little bit higher. We know that. However, when it is going down, it is the same story. I saw that with my own eyes when the Liberal Government was in power. I wrote a letter and went 14 months without an answer. I did not want that.


Some Hon. Members:: Shame!


Mr. Della  Noce@: If the people of Quebec want to visit that Member, it is not because he is telling his people the truth, it is because gasoline is cheaper in his area. That is the only time we come to see you, because you are not telling the truth. I ask your constituents to write to me. They do not need to use a stamp. I will give them the right answer. Their MP is not doing his job. He just wants to make a show here. This is not a circus. It is a serious place and the Member must do his work and answer to his people.


Some Hon. Members:: Hear, hear!


Don Boudria: Mr. Speaker, I listened closely to the remarks of the Hon. Member for Duvernay (Mr. Della Noce). He did not say much, but still I listened closely. As I recall-and his riding is not all that far from mine, roughly 50 miles-his election campaign was an urgent plea in defense of small businessmen and individuals. Whatever happened to the calling of the Hon. Member for Duvernay, Mr. Speaker? Did he forget it? Or again would it be the arrogance of power, the Conservative arrogance so obvious in the attitude of the Hon. Member? Well, all I can say is that the electors of Duvernay will certainly remember.
He said that consumers do not understand. Quite the contrary, Mr. Speaker! Canadian consumers understand all right, they understand that this Government has failed to live up to its many promises to the Canadian people, and that explains why the popularity of the Conservatives has taken a nosedive. [English]
The Member across the way says that I will never be in business, Mr. Speaker. Let me tell him that after the next election he will never be in politics.
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The Acting Speaker (Mr. Charest):: The period for questions and comments is now over. Resuming debate, the Hon. Member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, on listening to the comments and questions which are coming from the government side one would assume that all of the calls from this side of the House to lower gasoline prices for consumers now are unfair, that the facts and figures we have used have been taken out of context, that we have misrepresented the facts, and that we are mischievous. The Canadian Automobile Association, which has tens of thousands of members in every province in the country, started a campaign urging its members to send a message to the Government that the price of gasoline should come down immediately. If that association is wrong, as the Government says we are wrong, I cannot understand why the Minister did not call the officers of the Canadian Automobile Association into her office and, with her officials, showed the association why it is wrong and urged it to stop misrepresenting the facts and to stop this campaign for lower prices of gasoline.
Today we have heard from the Minister of State for Mines (Mr. Layton) and the Parliamentary Secretary the same old tired and incorrect arguments blaming all of the ills in the energy industry on the national energy policy. There was a major mistake in the thinking that led to the national energy policy, but that same mistake was made by Mr. Lougheed, the Conservative Premier of Alberta at that time, and by Mr. Blakeney, the New Democratic Premier of Saskatchewan at the time. The thinking at the time was that there would be a continual increase in the world price of oil until the early 1990s when the world price of oil would be $60 to $70 a barrel. If that were true, we could bring the tar sands plant into operation and the Beaufort Sea and Hibernia would be viable. The federal Government and the producing provinces were to get more revenue and the oil companies would do better.
Of course, Mr. Speaker, that has not happened. The reverse has happened. The world price of oil has come down dramatically. It was $30 a barrel a few months ago and it is now below $20 a barrel. This morning in The Globe and Mail an analyst in the industry predicted that oil will go down to $15 a barrel. There was speculation in The New York Times a few days ago that oil would go down to $10 a barrel.
I suggest to Members on the Government side that they not crow so much about how well their policies have done and how successful they have been with regard to energy. If the price of oil goes down much lower than just under $20 a barrel as it is now, there will be very little exploration in the Beaufort and virtually no exploration off the Atlantic coast. It will not be viable to explore in these areas with oil being at such a low price.
Let us review the record to see how badly hurt the major oil companies were as a result of the National Energy Program. In July, 1985, the Government's own Petroleum Monitoring Agency reported on what happened to the industry in 1984. It

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said that the Financial performance of the Canadian petroleum industry improved substantially in 1984 over 1983. Total industry revenues were up 6 per cent to $64.5 billion. When compared with 1983, net income from total operations more than doubled to $3.7 billion in 1984 while internal cash flow rose 21 per cent to $10.4 billion. That is not bad for an industry, and I am sure that many of the small business people in my constituency would be happy if they could have-


John Horton McDermid: What is that, related to investment? What is the return on investment?


David Orlikow: I have limited time. The Parliamentary Secretary has spoken.


John Horton McDermid: Do you understand what return on investment is?


David Orlikow: If I have time I will be happy to answer his question.
There was a 1984 increase in profits from $2.2 billion to $3.7 billion, an increase of 141 per cent.
The National Energy Program could not have been that bad for the oil companies. Let us look at the latest profit figures issued by Imperial Oil. In 1985 their profits were $680 million, an increase of over 40 per cent from the previous year. In the last quarter alone for which they reported, profits were $250 million, up over 50 per cent over the same period in the previous year.
The monitoring agency attributes the internal cash flow increase of 21 per cent, to $10.4 billion, to improved margins in the petroleum products market, increased production and higher prices for crude oil, the deferral of current taxes previously accrued, and the divestiture of losing operations.
The Parliamentary Secretary said that the oil companies pay their taxes like all other corporations. I suggest that no industry has ever had the kind of preferred position with regard to taxes as does the oil industry. This is true in every country in which they operate where they manipulate in such a way as to pay as little tax as possible. The explanation for their increased profits is not mine, but that of Ralph Gillen, the Chairman of the Petroleum Monitoring Agency.
He also said that the petroleum industry's net income on Canadian operations for 1984 accounted for 22 per cent of total non-financial industry income. According to Statistics Canada figures, the petroleum industry's share was 7 percentage points higher than it had been in 1983. Twenty-two per cent of all non-financial wealth generated in this country in 1984 came from the oil industry. During that year, the shares of this total revenue of $23.1 billion changed dramatically in favour of the oil companies. Their share of the total increased by 3 per cent to 54 per cent. The provincial government's share increased 2 per cent to 31.5 per cent, and the federal share decreased 6 per cent to 15 per cent.
All of this occurred under the National Energy Program, in advance of the even more handsome concessions given to the oil industry by the present Minister of Energy, Mines and
Resources (Miss Carney). My colleague, the Member for Vancouver-Kingsway (Mr. Waddell) has estimated that these concessions will cost the federal Government a further $5.3 billion in forgone revenues by 1990. Those kinds of concessions to the oil companies come at the same time that the Government has added thousands of dollars in taxes to every Canadian family.
It is easy to produce accords such as the Western Accord and the Atlantic Accord when you are prepared to toss around money as the Government and the Minister have done in arriving at those accords.
We have been saying consistently and indicating even more directly today that the consumers have not been seeing any benefits at the pump as a result of those concessions to the oil industry.
The Member for Glengarry-Prescott-Russell (Mr. Boudria) talked about the importance of the price of gasoline to his rural constituency. I point out to him that the price of gasoline is very important to my urban constituents because most of them must use their cars to go to work. They know that a tank of gas costs well over $20. Rather than a reduction in the price of gasoline as a result of the market fall in the world oil price, we are seeing higher prices, higher taxes, fewer suppliers and fewer jobs.
Let us consider why these events have occurred and how we can prevent them from occurring in the future. Prices could be brought down if the Government had the courage to act in the interest of the consumer. Before this is possible there must be some recognition on the part of the Government that oil production, refining and distribution to the customer does not operate in a competitive market as it seems to believe. Rather, we are dealing with a tightly managed oligopoly.
During her recent embarrassing retreats on oil pricing in Canada during Question Period in the last couple of weeks, the Minister has shown no recognition of this fact at all. In response to repeated requests for government action to ensure that declining oil prices are passed on to consumers, she could simply have said that in a free market system lower priced supply of oil should mean lower prices at the pump. However, on January 20, as reported at page 9943 of Hansard, the Minister said, in answer to the Hon. Member for Vancouver-Kingsway, that:
I wish to point out that the increases in gasoline prices about which consumers are concerned, of course, are the federal, municipal, and provincial tax loads which have been imposed on gasoline prices.
There have been increases by the Governments but she did not explain that while taxes have gone up 2.4 cents a litre, gas prices rose by more than 6 cents a litre in the time that her Government has been in office. In other words, the oil companies added another 3.6 cents a litre to the price they charge the customer.
On January 21, as reported at page 9994 of Hansard, she took a new tack, saying that while prices have dropped from $28 to $20 per barrel:
February 4, 1986

Actually oil prices rose toward the end of last year, and they historically stay high during wintertime.
She went on to say that the price decrease would not show up "until a few months from now". However, oil prices have been falling consistently since 1981 when they were $31 a barrel.
Last June prices were cut to $26 a barrel and the United States wholesale gasoline market dropped prices by 5 cents a litre. Why did Canadian consumers not get a comparable price decrease in this supposed market sensitive price regime? At that time it was freely predicted that oil prices would decline for another two years, as they have. Surely our oil companies could have seen the writing on the wall and the future price at the pump. The long-term market trend has been clearly down, everywhere but in Canada it seems.
On January 22, the Minister told my Leader, the Hon. Member for Oshawa (Mr. Broadbent), that she could not help save Canadian consumers $8.5 million a day at the gas pumps by instructing Petro-Canada to lower prices because:
It would be detrimental to the company's interest on behalf of Canadians, because we own it, to give it that kind of direction.
Let me pause a moment to ask, if Petro-Canada is not prepared to lower its price, as we said it should and could, why does Petro-Canada not permit its dealers who are prepared to use the market to try to sell more gasoline and to reduce the dealers' price by 2 cents a litre? The dealers are prepared to operate on a smaller margin, and it is Petro-Canada that is telling them they cannot. Petro-Canada is playing the same game, non competitive, as do the other major oil companies.
On January 28, the Minister announced:
I have communicated with industry executives to ensure that consumers get the full and fair benefit of the price declines which are in the system now.
Does the Minister have the kind of confidence in the free market system, which she says she has? Does the Minister believe the oil companies will treat their customers fairly? If the Minister believes the oil companies will really compete, why did she have to send that telex to the industry? In reality, the Minister knows that there is not any real competition. She knows the oil companies are working together. She knows they will squeeze the consumer for every penny they can get.
On January 24, the Minister of Energy, Mines and Resources, in response to a question from the Hon. Member for Vancouver-Kingsway on the anti-competitive behaviour of the oil companies, said:
If the Hon. Member has any evidence of collusion or activities of that nature, why does he not present it to the Minister of Consumer and Corporate Affairs?
Surely the Minister should have known that the Minister of Consumer and Corporate Affairs (Mr. Cote) has had in his possession for some time a seven volume report from the Director of Investigation and Research for the Combines Investigation Act that demonstrate just what I have said, that there is no competition.
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In fact, the report shows that monopolistic and anti-competitive practices cost Canadians, from 1958 to 1973, $89.2 billion in 1981 dollars or $15,000 per Canadian family. I very much regret that the Minister and her Government cannot come to grips with the deficiencies in gasoline marketing which were detailed in this report at great length.
Instead of acting on this report, the report has simply been sent to the Restrictive Trade Practices Commission, which the Government has already said it will abolish and where the report is being studied to death. Yet, this report, if the Minister were really concerned about what has happened to consumers and if the Minister of Consumer and Corporate Affairs was doing his job, has much to offer.
I would like to summarize its findings and emphasize its conclusions so that the Minister and Canadians will have squarely before them some legislative remedies which would break the stranglehold that big oil has on the production and distribution of gasoline in Canada, which it had during Liberal Governments and has had under Conservative Governments.
First, the report said that imported oil has been brought to Canada at higher than world market prices through transfer pricing by international oil companies following the lead of Imperial Oil, in violation of the conspiracy sections of the Combines Investigation Act.
The director recommended legislation to prohibit payment of these high transfer prices to foreign parent companies and to allow Canadian authorities to obtain information stored abroad by these parent companies. He recommended that all petroleum pipelines under federal jurisdiction be actively regulated and that legislation be enacted requiring integrated oil companies to divest their holdings in all existing pipelines subject to federal jurisdiction.
The director recommended that all refinery supply agreements in interprovincial and international trade be referred to the National Energy Board, with a referral to the Minister of Consumer Affairs, to investigate their effects on competition.
I could go on, but I note you are indicating that my time has nearly concluded.
We believe there is quite a legislative agenda which the Government could follow if it would look at that report and take it seriously. The Government opposite for all its talk does not want to deal with it.
The Minister of Energy, Mines and Resources will not admit that competition is severely curtailed-


The Acting Speaker (Mr. Ravis):: I regret to interrupt the Hon. Member but his time has expired.


Jack Wendele Shields: Mr. Speaker, I have a question for my colleague, the Hon. Member for Winnipeg North (Mr. Orlikow). If I may be allowed a short preamble, I would like to go to the original motion. If you look at the motion, Mr. Speaker, it reads:
That this House demands that the Government instruct Petro-Canada and its retail outlets to reduce their prices at the pump by 6 cents a litre-

February 4, 1986
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The Member for Winnipeg North says that some poor little service station operator was not allowed to reduce his prices unilaterally. First, the service station operator has a contract. All service station operators have contracts with the companies with which they do business.


Mr. Epp (Thunder Bay-Nipigon):: That is the problem.


Jack Wendele Shields: Would the Member from Winnipeg North countenance the individual operator's ignoring a signed legal document and then putting himself in the position of going to court? Does he not understand that business works this way? When you go into business and set up something, does he not understand that you sign a contract and you agree to abide by it? I would suggest that Members are using that as a red herring.
What about this, Mr. Speaker, "Order Petro-Canada and its service stations to reduce the price of gas at the pumps by 6 cents". What if Petro-Canada ends up at the end of the fiscal year with a deficit?


Ian Gardiner Waddell: Not necessarily.


Jack Wendele Shields: That was said by many Members. It is conceivable that it will end up with a deficit.


Ian Gardiner Waddell: It may.


Jack Wendele Shields: It may. It doesn't really matter, but we will find out, that is what the Member is saying. If the company does end up with a deficit, who picks up the deficit? The taxpayer, Mr. Speaker.
We say to Petro-Canada to get out there and compete with the big boys. Be a window on the industry. When Petro-Canada is doing so, we do what the Member suggests and we order it to reduce prices at the pumps. Do not worry about what it is going to cost Petro-Canada. The taxpayer will pick up the costs at the end of the fiscal year. What a ridiculous situation, Mr. Speaker.
How does the Member square that with going with his Leader, old smiling Eddie, to Albert and saying. "We want a floor price on gasoline so that the price will not go down"?


Ian Gardiner Waddell: I dealt with that in my speech.


Jack Wendele Shields: What about: "We will make the consumer pay. We want a floor price. I will be able to sell that when I go back to Ontario"? I have nor heard the Member say that in Ontario yet. I have not heard him say it here in the House. I heard the Member from Vancouver-Kingsway mention that kind of thing. How do you square this, Mr. Speaker?


David Orlikow: Mr. Speaker, I rise on a point of order. 1 hope that the Hon. Member for Athabasca (Mr. Shields), who is purporting to ask me some questions, will leave me a little time to answer. If he wants to make a speech, I will be very happy to listen to him. But if he wants me to answer the questions, I hope he will give me some time to answer them.


Jack Wendele Shields: Mr. Speaker, 1 will be giving the Member ample time to answer the questions. The first question was on the contract. Does the Member know what the questions are?


David Orlikow: I know.


Jack Wendele Shields: He is ordering Petro-Canada to lower the price by 6 cents and if it goes into a deficit position, the taxpayer will pick up the deficit. How do you square that with the Leader of your Party running across the country, particularly in Alberta, saying to the people that we should have a floor on the price of gasoline when you know full well that in the long run it is going to cost consumers money at the pumps? How do you square that with saying in one breath this afternoon during Question Period, "Do something about the dollar, lower taxes, go after the deficit, secure the dollar", and then saying, "We'll lower the taxes on gasoline at the pumps"? That is where the problem is. The tax is at the pumps. That is the problem. Take your time now and see if you can answer those.


David Orlikow: It is not difficult to answer those questions. First of all, Mr. Speaker, my answer will be in reference to the contract between the filling station operator and the oil company, and I do not refer just to Petro-Canada. They are all the same. The Hon. Member for Athabasca (Mr. Shields) is assuming that the little gasoline dealer is negotiating on the basis of equality with the oil companies. Nothing could be further from the truth. The oil company says to the dealer, "Here is a contract, sign it or you are out of business". So I say, of course they have a contract. Why should the believers in the free enterprise system defend a company that is not letting a retailer lower his price so he can help the consumer and get more business himself?
It may be that Petro-Canada would lose money if it followed our direction. I already quoted the kinds of profits which Imperial Oil made, and I am sure all the other oil companies are doing very well, and so is Petro-Canada.


Jack Wendele Shields: Point of order, point of order. If I may ask the Hon. Member to quote the figure from Petro-Canada; how much was the profit of Petro-Canada? That is the question.


David Orlikow: If the Hon. Member wants to do that, he can do it on his own time. I do not have that particular set of figures here, but I am sure Petro-Canada was not losing money.
The Hon. Member referred to the speech which my Leader made in Alberta. Let us be realistic; there is no way in which oil can be produced at as cheap a price in Canada; not in the Beaufort Sea, not off the Atlantic coast, not even in the conventional way in Alberta or Saskatchewan. There is no way that the price can be as low as the price of getting a barrel of oil in Saudi Arabia. I referred in my speech to an article in The New York Times in the last few days which speculated that the world price of oil could go down to as low as $5 per barrel. So what my Leader was saying should be obvious to everyboby; if we want to have an oil industry in Canada-and
February 4, 1986

we do as much as anybody else-then we need to have policies which permit that industry to operate, to explore for oil and natural gas, to look for alternative sources, and to be viable, to be able to make a profit.
What we object to is the rip-off of the consumer which has gone on for these many years as reported by the Government commission that looked at it. What we are opposed to is the unconscionable profits which Governments, Liberal and Conservative, have permitted the oil companies to make over the years.


John Horton McDermid: I want to ask the Hon. Member what unconscionable profits are. I have never had a socialist explain this to me. The socialists have a great knack for saying that this company made $50 million or $100 million more than it made last year. It made 20 per cent more than it made last year. They throw these figures around. If I earned $1 this year and next year I earned $2, the increase in my profits is 100 per cent. They never, never relate it back to return on investment, never. They never point out that in certain years the return on investment was very poor; they never talk about that. They never talk about what is a fair return. Is 10 per cent a fair return, 2 per cent, 5 per cent, 15 per cent? They never talk about it. The reason they do not talk about it-and I am sure the Hon. Member will admit to this-is that they do not know about it. They do not understand a fair return on investment. They do not understand that part. Profit is a dirty word to them. They do not understand the concept of taking a risk, putting your money into exploration and expecting a fair return. What is a fair return? Tell me what a fair return is. The industry was taxed almost out of existence under the National Energy Program.


David Orlikow: I wish the Parliamentary Secretary had listened to the speech which I made in which I quoted-


John Horton McDermid: I did, ad nauseam.


David Orlikow: -in which I quoted Figures which were prepared by the Petroleum Monitoring Agency. Let me repeat them again as follows:
The financial performance of the Canadian petroleum industry improved substantially in 1984 over 1983,. . . Total industry revenues were up 6 per cent to $64.5 billion. When compared with 1983, net income from total operations more than doubled to $3.7 billion in 1984-


Jack Wendele Shields: What's the return on investment? Answer the question.


David Orlikow: The Member asks what is the return on investment. We can sit down, Mr. Speaker, when we both have time-


Jack Wendele Shields: Well, do you know?


David Orlikow: Mr. Speaker, I wish the Hon. Member for Athabasca would not sit on his brains and I wish he kept quiet for a little while.


Jack Wendele Shields: Do you know?
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David Orlikow: Mr. Speaker, we can go to the parliamentary Library at six o'clock and we can get out The Financial Times' report where we will see that no industry made as high a return on its investment as did the oil industry. It was much higher than that of the manufacturing industry, much higher than that of the retail industry. These are the facts, and the oil industry has done this for generations. It has played off Canada against the United States, the United States against Britain and all of them against the producing countries in the Arab states until they nationalized those companies. If the Members on that side want to cry for the oil companies, they can do it, but I know the Canadian people will not cry about the poor state of the oil industry in this country.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Charest):: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Cape Breton-East Richmond (Mr. Dingwall)-Trade (a) Content of negotiations (b)Negotiation issues; the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie)-Atomic Energy of Canada Limited (a) Radioactive waste disposal research (b) United States dump site; the Hon. Member for York East (Mr. Redway)-Trade-Removal of tariff on computer parts.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Waddell:
That this House demands that the Government instruct Petro-Canda and its retail outlets to reduce their prices at the pump by six cents a litre, a move which would enable Petro-Canada to fulfil one of its basic purposes which is to provide Canada with reasonable energy prices.
James (Jim) Stewart Edwards: Mr. Speaker, I greatly appreciate the opportunity as an Albertan to speak in this debate and, indeed, as a Canadian. We have had an interesting airing of views, and I must say that it has benefited me greatly to hear the clarity and the sanity of the statements made by the Hon. Parliamentary Secretary to the Minister of Energy, Mines and Resources

February 4, 1986
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(Mr. McDermid) and my esteemed colleague from Athabasca this afternoon.
My friend from Winnipeg North has suggested that the Canadian Automobile Association is not wrong. His statement is partially correct and partially in error. What the Canadian Automobile Association is asking is for prices to come down as a result of taxes being lowered. I would invite the Hon. Member for Winnipeg North (Mr. Orlikow), sometime when the occasion presents itself, to tell us precisely what programs he would like to have eliminated in order to accommodate the lower taxes.


An Hon. Member:: Don't give $5.3 billion to the oil companies.


James (Jim) Stewart Edwards: I would like to put to rest once and forever this canard that money has been given to the oil companies. Nothing could be further from the truth. What has happened with the abolition of the National Energy Program is that justice has been restored to western Canada.


Some Hon. Members:: Hear, hear!


James (Jim) Stewart Edwards: A Member for Vancouver should be absolutely ashamed to pretend that the New Democratic Party opposed the National Energy Program in order to benefit the Western Sedimentary Basin and the development thereof. Look at the people who were put into bankruptcy and look at the people who became suicidal. Look at the disasters inflicted upon western Canada by the National Energy Program.


Ian Gardiner Waddell: I invite you to look at the record.


James (Jim) Stewart Edwards: The question of what constitutes a fair return was a question posed by my friend, the Parliamentary Secretary, but not properly responded to other than by an invitation to the Library. Members of the New Democratic Party may laugh when the Parliamentary Secretary says that the industry was taxed almost out of existence, but that is the truth. The fact is that before the National Energy Program, the record of the industry, whether multionational or Canadian owned, was that of a reinvestment practice of 105 to 110 per cent. It was the National Energy Program which discouraged that.
Last Saturday, as is my practice on a regular basis, I held a town hall meeting in my riding of Edmonton South. It was attended by a good many people. This particular town hall meeting was held in opposition territory, one of the four out of 176 polls which I lost in the 1984 election. I might add, it was NDP territory. We heard some very interesting questions at that meeting. One of the questions posed was the question related to today's motion, and that is, "Why aren't you lowering the costs to gasoline consumers by ordering Petro-Canada to cut its price by a fixed amount?" I had no difficulty answering that question nor did the 114 other people at that meeting including, I would submit, many New Democrats who thought it was the height of folly to suggest that we increase the deficit in order to deliver a lower price at the pumps.
My hon. friend, the Parliamentary Secretary to the Minister of Energy, Mines and Resources, has alluded to a very interesting editorial in last Friday's Ottawa Citizen, a newspaper which I do not always embrace but which 1 think has lucidly addressed this particular question. It is a newspaper which uses the expressions "the mouths of mock-furious Liberals and New Democrats" and "it is juvenile to expect that a downturn in world oil prices will be felt instantly at the gas pumps". The very idea that Petro-Canada should be manipulating prices is anathema to the people of Canada. Do we want Governments setting the price of bread, for example? That, I submit, is a Marxist, Third World concept.


Ian Gardiner Waddell: Ha!


James (Jim) Stewart Edwards: It is to laugh, is it?


John Horton McDermid: He wants the Government to set the price of bread.


James (Jim) Stewart Edwards: Perhaps the Hon. Member would relish the idea of the Governor General's Foot Guards charging Parliament Hill.
It is a fact, and I think the record should show, that 80 per cent of the personal taxes paid in this country go toward paying interest on the Liberal-NDP debt which was inflicted upon the country. We have to put our house in order, and the very thought of putting more money into Petro-Canada in order to lower the price of gasoline is foolhardy, to understate the case.
Let us look at what the Government has done in order to benefit the development of that great engine of growth, the energy industry, over the past 17 months. The Minister of Energy, Mines and Resources (Miss Carney) has secured the Atlantic Accord, the Western Accord and its companion document, the agreement on natural gas markets and prices, and has introduced the new frontier energy policy, each of which go effectively toward eradicating the last vestiges of the infamous National Energy Program. These are formidable accomplishments considering that, when they are assessed as a group of policy initiatives, they have a great total effect. It is even more noteworthy that these agreements have been concluded with the interests of all regions of Canada in mind and therefore all consumers.
As Hon. Members know, the federal Government is committed to establishing a new Canadian economic environment free of excessive regulation and market intervention within which industry and commerce in all regions can flourish. Since the signing of the Western Accord just 10 months ago, the industry has announced an array of projects and plans that cumulatively will involve the investment of over $10 billion, directly employing more than 46,000 Canadians in construction and ongoing operations. Companies have announced their intentions to pursue a number of other projects pending conclusion of the detailed negotiations with Governments and prospective partners totalling another $12.5 billion and employing upwards of another 28,000 Canadians. Not included in these figures is the massive investment plan to develop the Hibernia
February 4, 1986

on the offshore of Newfoundland. Estimates here are that more than $5 billion will be invested with the creation of thousands of construction and ongoing jobs for Newfoundlanders and other Canadians.
The Government of Canada is well aware of the cyclical nature of oil prices and has designed its energy policy with that in mind. That is why we moved to market-sensitive pricing. As the Minister of Energy, Mines and Resources said recently, we are well positioned to take advantage of both the upstream and the downstream in energy. Our energy policy is still one of the most competitive in the world and will withstand the test of changing prices.
There has been a lot of confusion about the impact of the recent decline in crude prices. I am pained, to paraphrase what the Secretary of State for External Affairs (Mr. Clark) said on a different matter here in the House today, to say that it ill becomes the dignity of the office of Hon. Members to contribute to that confusion. I would like to try to sort it out for Hon. Members this afternoon. First, let us look at the upstream.
Many questions have been asked about the viability of major oil and gas projects in light of declining world oil prices. First, production of many of the major energy projects currently under construction will not commence until the mid-1990s. It is therefore not so much current price levels but the future of oil price movements that determines the economic viability of these projects. Most observers, and I think even the Hon. Member for Winnipeg North with his suggestion of $5 per barrel, would expect prices to rebound in the early 1990s, possibly increasing at rates above the inflation rate. Indeed, the very fact that the long-awaited drop in oil prices appears to be taking place now removes the doubt. The sooner this happens, the less doubt about the eventual rise.
We all hope that there will continue to be peace in the Middle East, but it is a fact of which none of us need to be reminded that if peace does not prevail in the Persian Gulf, for example, this oil glut could be a very transitory occurrence. In the unlikely event that prices remain depressed over the long term, the return on these major projects would obviously be affected. Nonetheless, many of the major energy projects can withstand a fairly significant drop in the world price. In particular, we could refer to projects such as Hibernia, the existing oil sands operations and the many in situ bitumen projects in Alberta.
A statement was made very recently by an executive of Imperial Oil to the effect that Imperial Oil's major resource projects, particularly the Cold Lake heavy oil development, are actually quite resilient to price erosion.
That is the upstream. What about the downstream which of course has a more immediate impact on the consumer? Again, I remind the House of the positive steps the Government has taken to enable consumers to benefit from the recent decreases in oil prices.
Through the Western Accord, we deregulated the price of crude oil and freed it from the previous Government's rigid pricing policies. Crude oil prices are now set by the market-
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place. Under deregulation, Canadian crude oil prices respond very quickly to changing international market conditions. This process is evident today. The recent substantial declines in international crude prices have already resulted in lower posted prices for Canadian crude oil. There is no doubt that the Western Accord and deregulation have resulted in a very effective and responsive Canadian crude oil market. This cheaper crude will be refined into cheaper gasoline. However, first, this lower-priced crude must work its way through the pipeline system into the refineries. A barrel of light Canadian crude typically takes Five weeks to travel from Edmonton to Montreal. This industry operates like any other that stockpiles feedstock and products, such as the forest products industry and even farming. To say that lower oil prices should ignore inventories is to suggest that milk and bread should see an instant price drop as soon as farmers' own oil costs go down.
Furthermore, companies generally run down higher-priced inventories of crude and product before lowering prices to reflect their lower costs. These inventories, which cover from one to two months of requirements, are necessary to ensure that customers enjoy uninterrupted oil product supplies. I remind the House that it was the previous Government, the Liberal Government which prohibited companies from immediately passing through crude price changes to product markets. Instead, they were forced to wait until transportation lags and inventory draw-down had been accounted for. What we are saying is: Let the market decide-it could be sooner than the old rules would have allowed.
Once the companies begin to benefit from lower-priced feedstock, it is expected that these savings will be passed to consumers at the retail level in the form of lower gasoline pump prices. The industry has said that and it is generally acknowledged. I hear Hon. Members opposite scoffing.


Ian Gardiner Waddell: Do you believe in fairies, too?


James (Jim) Stewart Edwards: It is suggested that the oil industry is composed of fairies.


John Horton McDermid: He does not believe anybody but his Leader.


James (Jim) Stewart Edwards: I think I have heard enough fairy stories from Members opposite.
The Minister of Energy, Mines and Resources recently communicated with oil industry leaders by telex, as she has told us, telling them of the Government's expectations in this regard. The Minister has already received some very encouraging and positive feedback from these companies indicating their co-operation in providing these benefits to consumers.


Mr. Della  Noce@: We will be checking that, too.


James (Jim) Stewart Edwards: Of course we will. We are vigilant, always vigilant.

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The Government also expects that Petro-Canada, as one of those companies, will act in a responsible manner in competing with other oil companies in the market-place. Furthermore, deregulation has answered that Canada's oil market is fully open to the forces of international competition. Most regions of the country are exposed to oil product imports from the United States and overseas. These imports help to keep Canadian oil product prices in line with those in international markets. The recent rapid decline in oil product prices could force Canadian oil product price redutions even before refiners benefit from lower crude oil costs. This is what free market forces are all about.
Here endeth the lesson: The motion to have the Government force Petro-Canada to lower its pump prices by six cents per litre is both unnecessary and unrealistic. The Government no longer finances Petro-Canada; and it certainly does not get involved in the day-to-day operations of Crown corporations. Government interference of this sort risks doing serious damage not only to Petro-Canada but also the Canadian oil industry which provides thousands of jobs throughout the country.
I conclude by reminding the House that the Government is committed to deregulation. This means allowing market forces to operation without Government interference. None of us want a return to the oppressive Liberal-NDP regime of regulation, the legacy of which is our national debt and our overweening deficit.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Charest):: Are there questions or comments? The Hon. Member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, I would like to ask the Hon. Member two questions. He reiterated again the usual Conservative argument that it was the NDP which created the tremendous difficulties for the industry. The United States has the most progressive Government that country has had in the last 50 years. A year or two ago Exxon, which invested between $2 billion and $3 billion to build a plant which would extract oil from shale, I believe in Colorado, closed down its operation. The Americans did not have a national energy program. Why did they close this operation down? They did so because the idea of building that plant was based on a very high-priced barrel of oil. Why did they do the same thing as companies did in Canada, when they did not have a national energy program to worry about?
The second question I wish to ask the Hon. Member is this. He suggests that when we propose a specific reduction in price, this is a Marxist idea and interferes with the free market. Can the Hon. Member explain why it is that Conservative provincial Governments in Ontario, Saskatchewan and Alberta operate marketing boards for milk, eggs and hogs, the purpose of which is to help producers and to put in place a price floor which interferes with the market? Is that not a Marxist idea as well, just to use the Hon. Member's thinking on the subject?
Or is this the case because that is the only way in which industries can survive?


James (Jim) Stewart Edwards: Mr. Speaker, I am pleased to have been asked those questions by the Hon. Member for Winnipeg North. First, with respect to the question of the closing down of the shale project in, and I believe he is right, it may be Colorado or Wyoming, there is a distinct difference between the American situation and the Canadian situation. That is to say that the United States decision was made not because the Government was pro-business or anti-business but simply because the people of the United States have the good common sense not to tax to its knees an industry which is an engine of growth.
With respect to the question of helping producers and the objectives of marketing boards, we are hearing a contradiction from the Hon. Member opposite. The NDP line is that we are giving money to oil companies. Yet, I hear the Hon. member for Winnipeg North saying that the purpose of marketing boards is to help producers. Who in heaven's name are the producers if they are not those same invidious and malicious oil companies, be they domestic or international?


David Orlikow: I worry about the farmers, not the oil companies.


John Horton McDermid: Mr. Speaker, I wish to aks the Hon. Member a question. The Hon. Member for Winnipeg North quoted some interesting statistics from the Petroleum Monitoring Agency. However, in doing so he neglected to answer the question which I asked with respect to the return on investment in the energy industry, which figures were contained, by the way, in that same report from which he was quoting. He failed carry on in his reading into the next paragraph. Could the Hon. Member for Edmonton South (Mr. Edwards) fill us in on the return on invested capital in the energy industry?


James (Jim) Stewart Edwards: Mr. Speaker, I just happen to have paid a trip to the Library. I can say that if the Hon. Member for Winnipeg North had read a bit further from what he was quoting he would have seen that as regards oil industry product, the later report released by the Petroleum Monitoring Agency for the first six months of 1985 shows that the oil product sector of the Canadian petroleum industry recorded a $206 million after-tax profit. This compares to a profit of $293 million for the year 1984 and a loss of $158 million for 1983. In spite of the improvement in downstream income in the first half of 1985, the rate of return on capital employed for total operations was only 5.2 per cent, marginally below that obtained by all other non-financial industries for the same period.


Ian Gardiner Waddell: Obviously, then, no onw would invest in the energy industry, and Imperial, Gulf and Shell would have done poorly in Canada all these years. This is the old canard of the industry. It constantly asks about the rate of return. It is the figures provided by the industry that count. It counts as part of its investment the oil in the ground, which does not belong to it. It counts lots of things. So the Hon. Member should not get sidetracked by that canard. That is the line of the Canadian
February 4, 1986

Petroleum Association as reflected in the report to the monitoring agency.
1 want to ask the Hon. Member two short questions. I have made the case today for a market which is not free. The Hon. Member is a free marketer. Surely, if he looks at the Bertrand Report, the Work of the Restrictive Trade Practices Commission, the evidence we have heard from small independent dealers, and at the fact that 70 per cent of the retail industry is controlled by four oil companies, would he not admit that we do not really have a free market? If the Government wants to be consistent, it should take steps in the Western Accord not only to deregulate the industry but to make it a competitive market as was done in the United States with its anti-trust laws.
Second, I would like to know what position the Hon. Member took on the expansion of Petro-Canada when the Government bought the gas stations from Gulf, that is, his own personal position.


James (Jim) Stewart Edwards: Mr. Speaker, I would be pleased to take those questions in reverse order. I support the Government's position vis-a-vis the purchase of the Gulf retail operations in western Canada, that is, simply, that the Government had no position on that. That was a decision taken by a Crown corporation which is at arm's length.


Ian Gardiner Waddell: Oh, oh!


John Horton McDermid: And is operating like a business.


Ian Gardiner Waddell: You are marxists.


James (Jim) Stewart Edwards: Second, when the question is raised about restrictive trade practices and four oil companies operating in the market, here again we have the New Democrat politics of innuendo and fear. The fact is that if we had an NDP Government, which God forbid, we would have a marvellous conglomerate ridden with corruption and inefficiencies. We would have a nationalized oil industry in total.
Finally, there is the marvellous tendency-proclivity I might say-of the New Democrats to ride two horses, to want to have it both ways.


Ian Gardiner Waddell: We are asking you. You are the ones who deregulated.


James (Jim) Stewart Edwards: What I am quoting from is challenged, but it is the basis of the statement of the Hon. Member's colleague, the Hon. Member for Winnipeg North. The NDP was created by Dr. do-little; it is a push me-pull you.


Maurice Brydon Foster: Mr. Speaker, I am pleased to have a chance to speak in this debate on the pricing of petroleum products and Petro-Canada because it is an issue of great concern in practically every riding in this country. People see the headlines every day and know that crude oil prices are dropping from $28 or $29 a barrel in U.S. funds to $18 a
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barrel, which is a 33 per cent drop or more, and they are wondering why gasoline prices are not going down at the pumps.
I have a selection of headlines which appeared during the last couple of days. I think that from them we can get some feeling of the problems the Government faces with this issue. For instance, on February 1, the headline in The Ottawa Citizen read: "Federal Energy Policy in Confusion". On January 27 the headline in the Montreal Gazette read: "Customers' Revolt Brewing Over High Gasoline Prices". In the Chronicle Herald on January 23, the headline read: "Gas Tax Bite Too High, Canadian Automobile Association Says". The Ottawa Citizen headline on January 24 read: "Tourism Officials Want Pump Prices to Reflect World Price Cut". The headline in the Toronto Star on January 24 read: "Why is Our Oil Price So High? Industry Has Few Answers". In the Toronto Star of January 23, the headline read: "Excess Gas Prices Cost $8.5 Million Each Day". In the Montreal Gazette on the same day the headline read: "Wilson Won't Lower PetroCan's Gas Prices". On January 22nd, the Toronto Star headline read: "We Could Wait Months Before Gasoline Prices Drop, Minister of Energy Carney Says". That is the consumer side of the issue. In the Montreal Gazette on January 22, the headline read: "Oil Prices Continue to Fall but Not at the Gas Pumps". In the Toronto Sun on January 20 the headline read: "Rip-Off at the Pumps", and there followed a detailed account.
Looking back a little further we see another headline: "PetroCan Names Moore Firm as Consultants", and it goes into great detail about how $100,000 is being paid for consultant fees to Frank Moore to advise PetroCan. Obviously, he has not advised them as yet to lower prices. And as we search through the article we see his cohorts in that advisory group. Mr. Doucette, the brother of the senior aide of the Prime Minister (Mr. Mulroney), headed up a company which lost $20 million in East Coast energy. We can then understand why there is difficulty in PetroCan getting the policy right.
Going back a few months to the cut-back in the Petroleum Incentives Program, we see the headline: "Frontier Oil Rigs to be Cut, Analyst Predicts". A little farther back from last year we see: "Promise of Offshore Oil Fading in Nova Scotia", and "PetroCan Plans Gas Station Closures. Small Explorers Ponder Future". That was back on November 1, 1985, at the time of the new energy agreements. I have here a very forthright article written by the President of PetroCan in the Toronto Star on January 25. The headline reads: "PetroCan Chief Speaks Out on Painful Lay-offs and Closings of PetroCan Gas Stations". Here is another headline: "Low Oil Prices Worry PetroCan Chief'.
With respect to the motion before us today. I would like to speak briefly about the adverse impact of the oil price drop and the Government's lack of policy with regard to it. I also want to talk about the impact of the oil price reduction and the lack of action taken by the Government over the last year to take economic advantage of lower oil prices. For instance, it is not only the national price of oil, as we would see in metropolitan areas such as Toronto, but it is the impact we see in the

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more remote areas of our country. Sault Ste. Marie is a medium-sized city serving an area with 120,000 people. It is quite a distance from Metropolitan Toronto. Regular gasoline currently is selling in Sault Ste. Marie at about 54 cents a litre compared to about 61 cents a litre in Toronto, which works out to a difference of seven cents a litre. If we compare that with the population, we find that the resident population consumes about 71 million litres of gasoline per year. That price difference means that the residents of Sault Ste. Marie have to pay around $5 million more a year. For an average family driving an average number of miles, that adds up to an extra cost of $150 a year. If they drive across the bridge to Sault Ste. Marie, Michigan, they will save at least $10 a tank of gas.
We have to ask ourselves whether Petro-Canada, when it was established in the mid-1970s, was meant to be a window on the industry or a bank vault for the Government. On June 1 last, Petro-Canada spent tens of thousands of dollars for advertisements to say it was bringing down the price of gasoline at the pump. The company placed an ad in The Sault Star on June 1, 1985 which said that Petro-Canada was pleased to announce lower prices at the pump. The company said that the recent federal Budget changed the levies on petroleum products and it was pleased to pass on those cost reductions to its customers. Due to decontrol, the company said, and removal of the Canadian ownership special charge, Petro-Canada is lowering the posted price of products such as gasoline and diesel fuel by six-tenths of a cent per litre. Heating fuel was reduced by one-half cent per litre. The prices were effective June 1 at all company-operated and agency stations. That, of course, was very good. The actual petroleum compensation charge was 1.8 cents a litre and they only passed on a portion, six-tenths of a cent per litre, but at least they did something.


John Horton McDermid: On a point of order, Mr. Speaker, I do not think my hon. friend would want to mislead the House deliberately. The tax was in fact seven-tenths of one cent, not 1.8 cents, as he said.


The Acting Speaker (Mr. Charest):: Order, please. All Membes know there will be a period of questions and comments once the Hon. Member has finished his remarks.


Maurice Brydon Foster: Mr. Speaker, the Parliamentary Secretary knows that the petroleum compensation charge put in effect in November, 1984 was 1.8 cents per litre.
This advertisement shows that the Government can give leadership if it wants to. That is what Canadians are calling on the Government to do. They want Petro-Canada to give leadership. I am sure Petro-Canada did not dream up this campaign itself. It probably did it at the suggestion or behest of the Minister. The company is capable of giving leadership on prices, and that is what Members of this House are asking it to do today.
In a front page article in The Sault Star, the Federation of Northern Ontario Municipalities demanded a monitoring
system to track gasoline prices and try to bring some relationship between the prices in northern and southern Ontario. As I pointed out, people in the North are very concerned at the additional cost they have to pay. They have longer distances to travel for health care, shopping and things like that. I received a letter from a couple living in Elliott Lake, Mr. and Mrs. E. A. Smith. They said they are being hurt by the high price of gasoline. They are pensioners and they have to watch every cent they spend. When they look at making a trip to visit their family in Nova Scotia, possibly for the last time, they are looking at a lot of money for gas. They ask why it is that the U.S. gas is so much cheaper than ours. "Why can our gas not be reduced to a reasonable level so we can afford to drive our car rather than to have it sit in the driveway until the pension cheque comes in?" That is very typical of letters that Members on all sides receive. I am sure the Parliamentary Secretary and other Members on the Government side are getting the same kind of letters. I have another letter from the English Tea House in Desbarats, Ontario. Mr. Johnstone protests the very high price of fuel, not only gasoline. He points out that the price of propane has gone up dramatically from 27 cents to 32 cents a litre. This may not seem like a very large increase between 1984 and 1986, but when you go to fill a 500-gallon tank for a senior citizen like this it is very expensive. He points out at the same time that he uses kerosene for spot heaters and that the price of kerosene has gone up from 51 cents a litre to 56 cents a litre or $2.55 a gallon in one year. This is a tremendous hardship. It was at a time when oil prices were supposedly deregulated, the world price was falling by several dollars a barrel, and of course it has fallen dramatically since. This is the kind of concern being expressed.
I would also like to talk about the anguish that Petro-Canada dealers have to go through. Even though they own all of the gasoline and fuel oil in their tanks, they are forced by contract to sell at a price that Petro-Canada dictates to them. We have an example of that in Bracebridge, Ontario. The company has a formula, which means that the more you charge, the higher your commission. For example, at 55.9 cents a litre you get a commission of 3.4 cents. If you only charge 47.9 cents a litre, you only get 2.8 cents. This is from a pricing schedule for Petro-Canada's Trafalgar terminal as of September 3, 1985. As of January 1, 1986, the company escalated the price at which you get the maximum commission from 55.9 cents to 58.4 cents, but the commission is the same. The whole commission arrangement is designed not to sell more gasoline but to charge a higher price. The dealer who gave me this information is very upset. He feels that the company is totally ruthless, uncaring, and unfair in its relationships.
That is one aspect of the situation as I see it today. The other aspect of the Western Accord and the policy of the Government is that there is very little provision in the Western Accord to maintain and keep the oil industry functioning in a healthy state in western Canada when oil prices are falling. As a matter of fact, the only provision for that in the Western
February 4, 1986

Accord is Section 9 which reads: "In the event of international oil marketing disturbances that result in short-changes to crude oil prices with potentially negative impacts on Canada, the Government of Canada, following consultations with provincial Governments, will take appropriate measures to protect Canadian interests."
We are already seeing that in spades, Mr. Speaker. Besides that policy, which is very inadequate to deal with the rapid drop in crude oil prices, we are already seeing major projects falling like tenpins across Canada. There is no adequate provision in that agreement to deal with price drops to $18, $15, or $12 a barrel.
I recently spoke with an exploration company which said that when the price of crude oil drops to $20 a barrel it cuts its exploration program in half. If the price drops more, its exploration program will be reduced more. Many projects have either been cancelled or are at a standstill. The $4 billion Suncrude oil sands project is under the gun and certainly cannot go forward with this pricing regime. Also affected are the new oil sands plant of Petro-Canada, the phased expansion of the heavy oil up-grading programs at Cold Lake and Wolf Lake, and the $3.2 billion Husky Oil up-grader at Lloydminster.
I had a chance to visit that plant last May with a number of my caucus colleagues. It seemed to me that that was a model project which could have been self-sufficient and created a large number of jobs. Yet, the Government was obviously already sending signals to the company last summer that it was calling the project into question and was starting to draw back from the $50 commitment of the former Minister of Energy, Mines and Resources. Of course, the $750 million loan guarantee is falling by the wayside. It was a model project which could have been very beneficial.
Last week the $2.3 billion liquefied natural gas project in Prince Rupert was cancelled. Other projects are on hold and very uncertain. There is not much chance that the 300,000 jobs which were promised by the Minister will be created. That is mostly due to the fact that this agreement has no provision in it to deal with rapid price losses.
It is obvious that consumers of the country want the drop in world oil prices to be passed through to them. It seems to me that the Government's whole energy policy is in doubt with regard to whether the jobs will be created, whether the massive projects will go ahead, and whether we are going to be able to achieve and maintain the self-sufficiency which we enjoyed for the last couple of years in oil production.


Gabriel Fontaine: Mr. Speaker, we have heard the Hon. Member for Algoma (Mr. Foster) refer to a great many newspaper articles on the expectations of the Canadian public concerning a price reduction. I think he mentioned some twenty major newspapers.
I suggest that it is all new for the Liberals to be concerned about the aspirations and expectations of Canadians and to be
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prepared to listen to what Canadians have to say. It is the first time that I have witnessed the Hon. Member for Algoma listening to the Canadian public. I suggest the Liberals would have been better advised to listen to them before they announced the National Energy Program. They could have told Canadians: This program will increase the cost of oil by 80 per cent over the next three years. The situation would have been different if, at that time, they had told Canadians: "You are paying for oil less than the Americans today, but three years from now, you will pay more."
Over the past fifteen months, we have managed to reduce the price of oil by two cents a litre, in spite of the nine cents resulting from inflation. For all practical purposes, we have made it possible for the price not to increase. It is a total reduction of eleven cents, from the economic point of view.
If you had listened to the message then, you might not have received the second message on September 4, 1984, when Canadians elected 211 Conservative Members to the House of Commons, that is because you, as Member of Algoma, refused to listen.
My first question is this: Why did you wait till now to read the papers? And my second question is: Why do the research services of the Liberal party only work in English, because you did not refer to any French-speaking paper?


Maurice Brydon Foster: Mr. Speaker, the Hon. Member said that he has lowered prices of fuel. If he has lowered them, he should let the Canadian people know because they think prices are going up, and going up too much at a time when the price of crude oil is going down. The people in Algoma cannot imagine why the price of gas is going up when the price of crude oil has gone down by 30 per cent. If the Member understands that, maybe he could explain it to his constituents.
Farmers, even those in many areas of Quebec I am sure, are very upset that the Government gave an exemption of 3 cents a litre on the exicse tax on gasoline in early December of 1984. I also took off the petroleum compensation charge of 1.8 cents a litre. The Government made quite a thing of that in its campaign promises. Most of us who were concerned about the terribly difficult times in agriculture applauded that move. Unfortunately, on June 1 the Government moved to the world oil price so the petroleum compensation charge disappeared but the price of gasoline did not go down, except in the advertisement of Petro-Canada.
Therefore, the farmers gained 1.8 cents a litre and, through the Budget of May 23, they were forced to add another 2 cents a litre on September 3. They were then back to where they had been before the price reduction of the previous November was brought in. On January 1 there was a sales tax increase of 1 per cent, which increased fuel prices by another .5 cents a litre. Therefore, the farm producers ended up paying about 4.3 cents a litre more than they were paying on January 1, 1985. The consumption works out to some 31 billion litres. Therefore, the actual cost to Canadian agriculture is $120 million. We are

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paying $120 million more than last January for farm fuels as a result of the Government's tax policies, pricing polikcies as well as other factors arising from the Petro-Canada figures I gave earlier.
Furthermore, the exemption of 3 cents a litre will come off at the end of 1986 and another so-called granny tax of 1 cent a litre will be added so that by January 1, next year, there will be another 4 cents a litre in excise tax or another $120 million. There will be an increase in price and excise tax of $240 million to farmers from the federal Government over the next two years unless it makes some changes in its Budget. I do not know about his area, but agriculture is having a very difficult time in many areas of Canada. An additional cost of $240 million will be a great burden.


John Horton McDermid: Mr. Speaker, the debate has taken place all day. It is obvious where the New Democratic Party stands on this motion because it introduced it. However, the Liberal Party has not stated whether it supports this motion and supports government interference in the market-place by asking Petro-Canada to reduce the price by six cents a litre.
Is that the policy of the Liberals in the field of energy?


Maurice Brydon Foster: Mr. Speaker, I thought I had covered that when I spoke.


John Horton McDermid: Yes or no?


Maurice Brydon Foster: I was pointing out exactly how Petro-Canada gave great leadership last June 1-


John Horton McDermid: Are you supporting the motion or are you not?


Maurice Brydon Foster: I have already pointed out that Petro-Canada gave great leadership.


John Horton McDermid: That was a tax reduction. Are you supporting the motion?


Maurice Brydon Foster: This is not a tax reduction.


John Horton McDermid: It certainly was.


Maurice Brydon Foster: This is the kind of leadership Petro-Canada has been able to give. I am saying that if Petro-Canada could give that kind of leadership last June in reducing the price it can certainly give that leadership today. Petro-Canada is very capable of giving that leadership. It spent thousands of dollars to buy this kind of advertising and I am sure it can do so today.


John Horton McDermid: I want to ask the Hon. Member the question again because he did not answer it. That happened to be a tax saving that was passed on to the people of Canada through Petro-Canada when the tax was taken off on January 1 pursuant to the accord. He shakes his head to signify no, but I can tell him that that is what it is.


Maurice Brydon Foster: The petroleum compensation charge came off.


John Horton McDermid: I want to ask my question as directly as I can and I want a yes or no answer. Do you or do you not support the New Democratic motion today? Yes or no?


Maurice Brydon Foster: Mr. Speaker, I think I have made it very clear that we want Petro-Canada to give the kind of leadership that it is capable of giving in reducing oil prices. There is absolutely no reason-


The Acting Speaker (Mr. Charest):: Order. Resuming debate.


Abram Ernest Epp: Mr. Speaker, it gives me great pleasure to enter the debate on the motion introduced by my friend, the Hon. Member for Vancouver-Kingsway (Mr. Waddell). The motion states:
That this House demands that the Government instruct Petro-Canada and its retail outlets to reduce their prices at the pump by six cents a litre, a move which would enable Petro-Canada to fulfil one of its basic purposes which is to provide Canada with reasonable energy prices.
I have no hesitation in supporting that motion and 1 take particular pleasure in having the opportunity to conclude the debate on this motion this afternoon.
The situation that faces Canadians and the Government as well is very simple. Canadians have lived for years with rising petroleum prices, including the price of gasoline at the pump and heating fuel for homes. At present they see that the international petroleum price is dropping sharply with all kinds of consequence. Those Canadians expect those decreases to be obvious to them at the pump. However, they find that in January the prices are rising.


John Horton McDermid: No.


Abram Ernest Epp: The fact that prices have risen in recent weeks is part of the reason for putting this motion forward and is every reason for exploring the difficulties in which Canadians find themselves. In that light, I believe it is appropriate for me to clarify why Members opposite who have been arguing strenuously this afternoon feel so politically uncomfortable about the whole situation.
There are many reasons to doubt the very market forces in which the Parliamentary Secretary has put his faith. There is good reason for my friend from Vancouver-Kingsway to put forward a motion asking the Government to intervene with the publicly owned oil company, which is not only our window on the industry but a vehicle by which to ensure that something remotely resembling market forces will prevail in Canadian petroleum.
All Members of the House recognize this problem as our constituents write to us about the difficulty they have in enjoying the use of their automobile for driving to work or enjoying their retirement. This was a concern of one of my constituents who wrote to me recently. In fact, he wrote to the Prime Minister (Mr. Mulroney) and the Minister of Energy, Mines and Resources (Miss Carney), asking how he and his
February 4, 1986

wife can expect to enjoy the use of their car when the price of gasoline continues to rise. Other constituents write to me about the cost of heating their homes. Although they live on the fringes of the city, they live in areas which will not be served by natural gas.
The price of gasoline rose in January because of a tax that the Government does not want to talk about. The Government is eager to raise more money through regressive forms of taxation such as sales tax increases and increases in the price of fuel, without coming to grips with other issues. The Parliamentary Secretary said that we have no program to describe how we would raise revenue. If he paid attention to our fair taxation program he would know that we have an answer. The Auditor General has indicated that tax expenditures are running at $35 billion to $50 billion. There is every reason to look at those expenditures when $50 billion would be almost half of the current rate of expenditure by the Government. We know perfectly well where we could find some of the revenue that we need. The Parliamentary Secretary knows that. He does not want to talk about it.
It is bad enough that the cost of gasoline should rise because the Government has slapped some more taxation on ordinary Canadians. The price of heating fuel is 40 cents a litre in Thunder Bay. I asked my assistants to check on the taxes that are involved in that 40 cents a litre for heating oil. They told me there is not a cent of tax in that. I am paying 56 cents a litre for unleaded gasoline. Constituents of mine who cannot use natural gas or electricity are paying 40 cents a litre for heating oil and there is no tax on it. My God, Mr. Speaker, what are we to say about the oil companies that are supposedly-


John Horton McDermid: Mr. Speaker, I rise on a point of order. I am sure the Hon. Member would not want to mislead the House. There are no consumption taxes. There are taxes on heating oil. The Member should know better.


Abram Ernest Epp: The reality is that prices of gasoline and heating oil are high. Taxes are a significant element in one area. Apparently they are not significant in another. It is something with which the Government cannot come to grips. I am led to believe by the answer given by the Parliamentary Secretary. He encourages me to take another look. Perhaps I can have the Minister of Finance (Mr. Wilson) consider this problem that my constituents have.
The argument of the Parliamentary Secretary is based on the proposition that market forces should prevail. The petroleum industry is not an industry in which market forces are anything remotely resembling neoclassical economic theory or principles of atavistic competition. Nothing remotely resembling that existed in the petroleum industry for years past. To depend on market forces to do what is required to bring prices down is pursuing will-o'-the-wisp.
First, we all know, even though these friends of ours on the other side do not talk about it, that the price of petroleum
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reached the levels it did in the last 15 years because of a cartel. The most spectacularly successful cartel in human history drove the price of petroleum from $3 a barrel to $38 and more.


John Horton McDermid: Have you heard of the uranium cartel?


Abram Ernest Epp: Take that in percentage terms and consider the impact and the transfer of wealth that was carried out thanks to the existence of the Organization of Petroleum Exporting Countries.
The question that all Canadian Governments faced in the late 1970s and into the 1980s as they contemplated the operations of the cartel which, under its price-setting umbrella, sheltered the seven sisters of the oil industry and their operations in Canada as they drew out of the pockets of Canadian consumers enormous quantities of money, was whether they should take it and run. They could have done so so easily if left to what is called market forces, but Canadian Governments decided they should not.
The remarkable thing is that when the petroleum and gas revenue tax was imposed, the oil companies did not suffer particularly. If one takes the statistics of that development, it is astonishing to realize that the industry's share of revenues in 1980 was $6.3 billion, in 1981 it rose to $6.7 billion, in 1982 to $9.4 billion and in 1983 to $10.6 billion. Is that an industry that is hurting?
From 1982 and 1983, Imperial Oil had an increase in profits from $289 million to $344 million.


John Horton McDermid: What was the return on investment?


Abram Ernest Epp: Texaco had an increase in its profit from $275 million to $344 million. These companies were not hurting, Mr. Speaker. But the people of Canada had available part of this incredible economic rent which OPEC was creating by its pricing policies to use for the public purposes of Canada.
The Government, by repealing the petroleum and gas revenue tax, has given all of that money back to the oil companies. Now we have the decline of OPEC's power. But are those market forces of the neoclassical economic theory? They are nothing of the sort. What my friend has sought particularly to deal with is the reality of a handful of petroleum companies which control the industry, determine prices, and set prices at the pump. They set prices at the pump because they have the power to determine at what price gasoline will be sold. Anyone interested in the topic of combinations of economic power exerted in the market-place is aware that retail price maintenance has been one of the most contentious principles over the years. Governments have attempted to come to grips with that problem. In the oil industry there is no doubt about it. It is perfectly obvious that the people running the stations and selling the gas are under the control of the companies from which they buy gasoline or from whom they receive it on consignment. Retail price maintenance in the purist sense is what Petro-Canada and the rest are involved in. Market forces Mr. Speaker? Do not make me laugh. When we have a

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situation of four or five companies in an oligopoly, we do not have anything like an atavistic response to millions of consumers, we have several companies involved in establishing prices and maintaining them.
In this context of that kind of market power being exercised by a few companies, companies will now, thanks to what the Government has done, take far more of the gains they can get. After all, we are talking about $20 a barrel. We are not yet down to $5 or $6. We might conceivably get there but we are still a long way from that.
The Government, which is supposedly concerned about the prosperity of all Canada and ordinary Canadians, is letting the companies take the gains. It hopes devoutly this money will be sunk into exploration and that it will generate the 300,000 jobs, but the Government has not given us a guarantee of that.
This is revenue the Government needs so desperately which the Minister of Finance will invoke when he brings in his Budget. The Minister of National Health and Welfare (Mr. Epp) has to admit that this revenue was the reason for his promise of last January to maintain the value in the child benefits package. He was forced to break the promise. In September the Minister was backing down and admitting that money was going to be taken out of the child benefits package over the next few years to keep the deficit down. It is strange that the Government could do that to mothers and babies and at the same time give hundreds of millions it not billions of dollars to the oil companies and then talk to us about market forces. These are brute economic realities which the Government does not want to admit to.


John Horton McDermid: You will eat those words.


Abram Ernest Epp: The Tories govern in the interests of these great companies.
If we take a look at the Act that created Petro-Canada in 1975, we find in Section 7 a long list of powers in Part I. Part I runs all the way through to the letter Z. Then we come to No. II which reads, "In the exercise of its powers, the corporation shall comply with such policy directions that may from time to time be given to it in writing by the Governor in Council."
If the Government recognized the brute reality of the economic power that exists in the petroleum industry, if it were really concerned that prices decline as they now deserve to, if the Government recognized that there are all kinds of sellers out there who want the chance to do some of this atavistic competition, whether in gasoline alley just north of Toronto, in the City of Thunder Bay or in Vancouver, if the Government were really sensitive to that and had the interests of the country at heart, the Government would issue a direction to Petro-Canada-which is not just a window on the industry, although Petro-Canada could be that if the Government wanted it to be-to ensure that the kinds of market forces we would like to see operate-


John Horton McDermid: You would let the taxpayer pay.


Abram Ernest Epp: -will come a little closer to operating and the Government would see to it that the Combines Act changes that are required to ensure something closer to competition actually were in the Act for us to consider later this year.
[ Translation]


The Acting Speaker (Mr. Charest):: It being six o'clock, it is my duty to advise the House that, pursuant to Standing Order 63(11), the proceedings on the motion have now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

David Charles Dingwall: Mr. Speaker, I wanted to rise this evening in response to a question that I put to the Secretary of State for External Affairs (Mr. Clark) with regard to the subject matter of free trade. At that time I raised the issue as it affects cultural industries. The main thrust of the subject matter of free trade concerns me greatly. I have been asked on numerous occasions as to whether or not I am in support of the Mulroney initiative as it relates to free trade.
Unfortunately, with the way in which the Government has conducted itself to date, I would have to say that I am opposed to the Mulroney initiative with regard to free trade. That is not to suggest in any way that as a Member of Parliament I am opposed to the concept of free trade. As a Member of Parliament, I find it somewhat appalling and extremely difficult when the Government of the day says a whole lot about free trade, the various platitudes, but fails to provide Canadians with the necessary information as to the direction in which it will take our country.
Yes, Canada has a surplus with the United States of about $21 billion in free trade, and we are to sit down with the United States and negotiate an improved a deal. What we do not know with regard to free trade is the cost benefit to the various sectors of the economy. I had hoped that the Government would have laid before Parliament how free trade will benefit my Province of Nova Scotia and the Atlantic region.
We can go back to 1933 when the former Premier of Nova Scotia, Angus L. Macdonald initiated a study which showed the objections that that Government had with regard to the tariff policy of Sir John A. Macdonald. We have no information from this Government. What we have is bits and pieces of information as they relate to brewery workers in my province,
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textile workers in Truro, Nova Scotia, and how it will affect them. No cost benefit study has been done, or if it has been done, it has been in secret. We have to know whether regional economic development incentive programs are on the chopping block or the negotiating table.
What about unemployment insurance? Is that, too, going to be on the negotiating table when we sit down with our good friends in the United States? What about the various fishery programs, Mr. Speaker? We have a decision here of late from the United States regarding programs which have been determined to provide subsidies. Are they going to be a part of the negotiating apparatus with the United States? Will federal programs such as the fishing vessel assistance program, the agricultural and rural development agreements, the federal Department of Fisheries and Oceans Promotions Branch, the federal Economic and Regional Development Agreements Program, assistance for the construction of ice-making and fish chilling facilities and the fishing vessel insurance plan be up for negotiation? We do not have an answer. In Newfoundland there are grants for purchasing and constructing boats. Will that be on the negotiating table? Will the Newfoundland loan guarantees from the Fisheries Loan Board be up for negotiation? Will the Nova Scotia fishing vessels construction program and the Nova Scotia industrial development division grants from the Department of Development be on the negotiating table with our friends, the Americans? What about the assistance for ice-making and fish-chilling facilities in Prince Edward Island?
There has been a vacuum when it comes to good, precise information on the whole subject of free trade. I cannot see why the Government, if it believes strongly in its assertion that free trade will benefit Canada and the regions, would not provide that information willingly to Hon. Members of Parliament and the provincial Governments. With regard to the free trade issue, conceptually it does have some benefits. The liberalization of trade, not only in the United States but other countries of the world as well, has been the position of my Party for quite some time.
Where is the information? Where are the concrete cost benefit analyses? Why have they not been done? If they have been done, why have they not been provided so that we can have a serious, intelligent debate on the subject which is germane to economic development in my region? I would hope that the Parliamentary Secretary could avail himself of this opportunity to provide Canadians with an answer as to why that information has not been made readily available. Without this information, the Government is asking Members of Parliament to make decisions prematurely without having all the information and facts before them.
I have listed for your information, Mr. Speaker, a number of programs which have been deemed by the United States to be the equivalent of subsidies. Are they now going to be part and parcel of the negotiating process? I would hope that we would get a clear answer from the Government of Canada and
Adjournment Debate
hopefully from the Government of Nova Scotia. However, we know that the Government of Nova Scotia is not too wise when it comes to doing cost benefit analyses. It is prepared to agree to anything put forward by the Government of Canada, something which I think is a mistake.


John Horton McDermid: Mr. Speaker, that is quite an indictment of the Nova Scotia Government. It signed an energy agreement with the Government to which the Hon. Member once belonged. I am sure that when he re-examines his words-


David Charles Dingwall: I'm talking about free trade.


John Horton McDermid: I sat patiently and listened to the Hon. Member. I am sure he will give me the same courtesy since I only have three minutes-


David Charles Dingwall: If you stick to the subject.


John Horton McDermid: -and we had to bear seven minutes of his tirade.
It has been very clear for some time that the Government wants a better, more predictable and more secure trading relationship with our major trading partners so that Canadian enterprise can plan, invest and grow with confidence, the kind of confidence that leads to more and better jobs. Of particular interest is the United States market which now takes three-quarters of our total exports. What will be involved in this? These will be commercial negotiations between two distinct and sovereign countries. We all know that modern nations are more than economic. The challenge will be to strengthen both our economy and our sovereignty.
We and the Americans will be working toward a package of mutually beneficial and acceptable reductions in tariff and non-tariff barriers in order to increase trade and thereby save jobs and create new jobs in the future. In order to get a good deal, each side will have to be prepared to listen to the other. We want the Americans to consider our concerns about the protectionist effect of their trade remedy legislation, our desire to gain greater access to their government procurement market and the need for a more effective and predictable way to settle our differences.
The Americans will want us to listen to their concerns about our high tariffs, our industrial support programs, our investment rules and the international rules regarding trade in services. By listening to each other and placing these concerns on the table, neither side is committed to accepting what the other is proposing. However, only by frankly discussing each other's objectives and concerns will we know if a good deal is possible. We are prepared to do that. As the Prime Minister (Mr. Mulroney) indicated in his announcement of September 26, if a deal which is good for all regions and all Canadians is not negotiable, there will be no deal.

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Adjournment Debate
1 might add that I think Canadians do not appreciate having to go to the United States, cap in hand, when each individual issue comes up, whether it be an issue with respect to wood, steel or fisheries. They do not appreciate having to go down there and say: "Please, do not include us in your tariff or in your protectionist Bills". I think the Canadian people want us to negotiate a fair trade agreement with the United States. We are prepared to do that. If it is not a fair deal, and if it is not good for Canadians, then we will not sign it.


ATOMIC ENERGY OF CANADA LIMITED-RADIOACTIVE WASTE DISPOSAL RESEARCH. (B) UNITED STATES DUMP SITE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I would like to follow up on a question I asked of the Minister of Energy, Mines and Resources (Miss Carney) on January 27 last. I suppose the Minister of Energy is so used to hearing me ask questions in which I seek assurances that the site of AECL's underground research laboratory at Lac du Bonnet, Manitoba, will not become the eventual site for a Canadian radioactive garbage dump that when I got up to ask the question she did not pay all that much attention to it. She must have assumed I was asking the same question I have asked repeatedly. She went on to say that she had given assurances to the Manitoba Government that the AECL research site would not become a permanent site for radioactive waste disposal. However, that is not the question I asked.
I asked a question about the concern expressed by the Manitoba Government, and by others, about the list of potential American radioactive dump sites which was recently released. I asked her whether or not in view of the fact that many of those sites, if they were to be used, might have an effect on waters entering Canada-in particular, groundwater-she would consider instructing AECL not to enter into any further agreements with the U.S. Department of Energy for co-operating in research which is taking place at the Lac du Bonnet site. I am thinking particularly of those waters which are adjacent to the Red River Basin.
The reason I asked her the question is I think that we have a very good bargaining tool here insofar as the U.S. Department of Energy wants to participate in the research which is going on in Lac du Bonnet. My position is that we should say to the Americans: "Fine, if you want to use a Canadian site for research, then part of the price for being able to use that site is that you take off the list of potential American sites those sites which might affect Canadian watersheds". In my view this would give the Government some leverage with the Americans with respect to the issue of sites which might potentially damage Canada.
I might also say that this might be something which would be looked upon favourably by the people of Minnesota who have been successful, as I understand it, in preventing the American Department of Energy from carrying on in Minnesota the type of research that AECL is carrying on in Manitoba. By allowing the U.S. Department of Energy to do
research in Lac du Bonnet we are effectively allowing it to circumvent the successful opposition which has been generated in Minnesota. Because the rock formations are similar, and by being able to conduct research in Lac du Bonnet, the U.S. Department of Energy is able to do an end run around the opposition in Minnesota and do the very type of research which, depending on what is found, might lead to the selection of the very sites in Minnesota with which we are concerned.
I say to the Government: Take this opportunity of leverage and instruct AECL not to co-operate any further with the U.S. Department of Energy until such time as those sites which potentially could affect Canada are removed from the American list. I might add that it is not just a question of responding favourably to the concerns of people in Minnesota. It is also the quite simple question of not co-operating, not helping people to dirty our own backyard or, in this case, dirty our groundwater and our watersheds. It is also a question of the extent to which, by co-operating with the U.S. Department of Energy, we involve ourselves in the whole American nuclear program. This waste does not all come from reactors. The waste the Americans are looking to dispose of comes as well from their nuclear weapons program. I think that the extent we co-operate with the U.S. Department of Energy in an uncritical way in finding ways to dispose of this waste is the extent to which we should be collaborators, if you will, in the American nuclear program of which, as we all know, many Canadians are critical.
I see this partnership that AECL has entered into with the U.S. Department of Energy vis-a-vis the underground research laboratory in Lac du Bonnet, Manitoba, as one more way in which Canada has become integrated into the whole American nuclear program. I regret that very much. For that reason, to be honest, I would be against co-operating with the Americans in an uncritical way even if these sites in Minnesota had not been released recently.
I say to those whose opposition to this may be more qualified that mine that this is another reason for bargaining toughly with the Americans about the ways in which we co-operate with them. At the very least, the Government should be now saying to the Americans: "Listen. Until you take those sites off the list, those in Minnesota and elsewhere, which could potentially affect Canada, we cannot possibly hope to co-operate any further". Otherwise, we could be open to the accusation that we were helping the Americans pollute our own backyard, and that is not acceptable to us.


John Horton McDermid: Mr. Speaker, I have carefully noted the Hon. Member's concerns relative to the potential location of radioactive disposal sites in the United States and American participation in tests at the Atomic Energy of Canada Limited underground research laboratories at the Whiteshell nuclear research establishment. We are all aware, I believe, of the Hon. Member's concerns about the nuclear issue in general. I recall a debate of his Private Members'
February 4, 1986

motion last fall in which he called for an inquiry into the entire nuclear fuel cycle.
Despite the presentation of solid scientific evidence in support of the nuclear cycle, the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie) remains convinced that nuclear power and nuclear research are inherently dangerous. If the truth were known, he would wipe out the nuclear industry in Canada tomorrow and the 30,000 jobs which go with it, wiping out a very important industry in which we have developed expertise in Canada.


William Alexander (Bill) Blaikie: Not the medical-related research. Not the whole industry.


John Horton McDermid: He hates nuclear energy.


William Alexander (Bill) Blaikie: Not the medical-related stuff.


John Horton McDermid: In a peaceful way, the Hon. Member is opposed to it in any way, shape or form.


William Alexander (Bill) Blaikie: I am opposed to nuclear power, nuclear weapons.


John Horton McDermid: Even when it comes to the medical end of things-


William Alexander (Bill) Blaikie: I am not opposed to nuclear medicine.


John Horton McDermid: -which he is not opposed to, there is still waste. We still have to do research into the safe storage of nuclear waste. That is what is going on now. Our Government is committed to the work that AECL is doing at the White-shell facility. I might say that it is doing a magnificent job. It has been very forthright with the Canadian people in its work.
The Hon. Member was not at the standing committee when the witnesses from Whiteshell appeared. They were very forthright about the work which is going on and how they are carrying it out. The Hon. Member was not there to question them-


William Alexander (Bill) Blaikie: I couldn't be there, John. Be fair to me.


John Horton McDermid: To be fair, he should not sit there and heckle and say that they are not being forthright because in fact they have been. I might say that it is a compliment to our Canadian scientists that the United States' Department of Energy has asked to participate in this research work. We are waiting for a formal signing of the agreement with the U.S. with respect to the co-operative research program. I will be quite honest with the Hon. Member, I would much rather have the United States in partnership with us in this very important research to find out how to safely store or dispose of nuclear waste than have the Americans do it in an untested manner in their own country. I would much rather have them gain the expertise we have in Canada in order to ensure that in fact when they do store nuclear waste, it does not affect our sovereignty, nor the Canadian Government. For the Hon. Member to rise in his place and suggest that we blackmail the
Adjournment Debate
United States into participating with us on a research program, I feel is ludicrous and I think he would admit that.


TRADE-REMOVAL OF TARIFF ON COMPUTER PARTS
Alan Redway: Mr. Speaker, you are aware, as I am, that ever since the Prime Minister (Mr. Mulroney) and the Government announced last September that they desired to enter into trade negotiations with the United States, the issue has been discussed very, very widely across this country. The issue has entailed a debate and discussions relating to the whole question of our negotiations or nonnegotiations with the U.S.; the possibility of extending those negotiations right around the world to our other trading partners through the General Agreement on Trade and Tariffs, otherwise known as GATT; the whole question of tariffs, their removal, and non-tariff barriers and their removal.
In light of all those discussions, it came as quite a surprise to me that on January 20 the Government announced it was removing our own tariff barrier on computer parts. One would have thought that perhaps that tariff would have been part of the trade discussions which went on in a general way with the U.S. or our other trading partners through the GATT discussions. So, as I said, it was a surprise, at least to me, when the Government announced these tariff barriers were being removed.
This was particularly significant in my own constituency because located there is what is really the original home of IBM Canada. I suppose one might have described that as the typical American branch plant in Canada but it has gone far beyond that. There is now a considerable number of IBM plants in Canada. Even in my own riding, while we have I suppose the biggest IBM production centre, there are a number of other plants. They employ in my own constituency somewhere around 3,000 workers. About 2,000 are engaged in the manufacture of computer parts and the other thousand are engaged in computer research. I would venture to say that if there is an area involving the leading edge of computer technology, it is probably located right in my constituency in those IBM plants. Obviously, anything which impacts on their profitability is going to be of significance to my particular constituency and, indeed, to Canada itself.
It is interesting to note that although at one time, I suppose, those IBM plants manufactured complete lines of computers, they now specialize in particular parts of computers. Those plants have from IBM International a world product mandate for particular computer parts. They compete with other IBM plants around the world for the right to manufacture certain parts for computers. They export those parts right around the world. As a result, I am told, the export trade on their part is growing at the rate of about 20 per cent each year. That is a substantial trade for Canada and obviously for the company itself.

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Adjournment Debate
IBM is most interested in the whole area of trade negotiations, and particularly in the concept of tariff reduction. It is interested in the discussions with the United States because it sees some opportunities there to expand and further its own export markets. It is interested in the across-the-board negotiations which the Government is in fact proposing. I am told by the executives at IBM that they were most concerned about the approach that the former Government took with sectoral trade negotiations, but that they welcome the idea of across-the-board negotiations.
Therefore, it is particularly significant when we find that the 3.9 per cent tariff on Canadian computer parts has now been abandoned. It was as a result of that that I expressed my concern as to whether we were getting some comparable trade concessions from other countries. IBM and other Canadian computer parts manufacturers have to export and compete in foreign markets and, obviously, are interested in having the tariffs reduced.
At the same time, I was interested and asked the Minister what the impact would be on our computer industry, particularly on IBM, of dropping that particular tariff barrier. When I asked that question on January 27 the Minister assured me that the tariff barrier that was being removed was also being removed in Japan and in the United States. I was pleased to hear that. I did not get from the Minister the actual impact that it could have on our industry and on the computer industry in my riding in particular.
I hope that the Parliamentary Secretary will have some information tonight as to what that impact will be because the Government has computer models to indicate what impact that sort of tariff reduction will have on particular sectors. I would be most interested to hear that from the Parliamentary Secretary tonight.


John Horton McDermid: Mr. Speaker, in response to the comments made by the Hon. Member for York East (Mr. Redway) concerning the elimination of our tariffs on computer parts, I would first like to give a little history to indicate how this came about.
During the Quebec Summit the Prime Minister (Mr. Mul-roney) and the President of the United States directed that action be undertaken to resolve specific impediments to trade. One of the areas to be examined was the feasibility of mutual elimination of tariffs on high technology goods including computers, computer parts, and semiconductors. At the same time, the U.S. and Japan were examining ways to improve two-way trade in high technology products and Canada was asked to join with those two countries in removing tariffs on computer parts and semiconductors. In fact, the U.S. and Japan eliminated tariffs on semiconductors on March 1, 1985.
The Department of Finance undertook a review of this issue, including a survey of Canadian manufacturers of computers,
computer parts, and semiconductors. Almost all respondents, including IBM which is in the Hon. Member's constituency, and which I have had the pleasure of touring a couple of times-is a great plant-expressed strong support for reciprocal elimination of tariffs on these products. The desire on the part of Canadian computer manufacturers to have duty-free entry of computer parts and semiconductors is, of course, based on the fact that they have to import many of these articles and feel that free entry will enhance their competitiveness.
Although our industry is in favour of eliminating all tariffs on computers, computer parts, and semiconductors, the U.S. informed us that it was not prepared to remove its tariff protection on computers. In view of this, it was decided that Canada should not proceed in this area at this time.
The elimination of the Canadian tariffs on computer parts and semiconductors was effective, as the Hon. Member mentioned, January 20, 1986, and paralleled action taken by the United States on or shortly before that date to remove its duties on computer parts. Japan removed its tariffs on computer parts on January 20. By the way, it also took similar action on computers themselves.
Trade data for 1984 show that imports of computer parts amounted to about $1.1 billion of which $1 billion was from the U.S. and $16 million from Japan. About $1.3 billion of semiconductors were imported in 1984. Of these only $25 million worth were subject to duty. In the same year, our exports of computer parts were valued at about $300 million, most of which went to the United States. Semiconductor exports were valued at $565 million, of which $497 million went to the United States and $4 million to Japan. These statistics show that while our imports of computer parts are far in excess of our exports of these products, the tariff elimination on semiconductors provides a more balanced package of concessions.
I might say that representatives of IBM and other members of the Canadian Business Equipment Manufacturers Association recently met with Finance officials and expressed their complete satisfaction with the action taken by the Government. They see the removal of these tariffs as benefiting their industry by reducing the cost of components they import for their manufacturing operations and by increasing the opportunity to penetrate the United States and Japanese markets.
In conclusion, we believe that this tariff elimination is an important step in demonstrating Canada's strong commitment to trade liberalization and represents a positive follow-up to the Quebec summit.
[ Translation]


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


[Stage Direction]
The House adjourned at 6:31 p.m.
[Stage Direction]

Wednesday, February 5, 1986