1990-10-10

Ms. Albina Guarnieri (Mississauga East):: Mr. Speaker, the American radio station WBLK today holds a virtual monopoly on the southern Ontario market for black urban contemporary music.
Toronto has become so lucrative for WBLK that it now has an advertising office in metro. Regrettably, Canadian black artists have no commercial outlet for their music while Canadian advertisers pay WBLK for access to Toronto's large black population.
This summer the CRTC rejected a strong bid from the black community and awarded the final Toronto radio licence to a country and western application. The CRTC has turned a deal ear to the needs of black musicians and has ignored the fact that other radio stations in Toronto are abandoning country and western due to low audience demand.
If this government is serious about its commitment to multiculturalism, it will reject this decision and send it back to the CRTC for reconsideration.


AGRICULTURE
Mr. Len Taylor (The Battlefords - Meadow Lake):: Mr. Speaker, I have just returned from an intensive five-day tour of one corner of my constituency during which I talked to more than 400 people, most of whom were farmers concerned about their present and their future.
Piles of grain are on the ground, and they are unbelievable. The elevators and bins are full. The grain is not moving anywhere, but the need for movement and sales is evident everywhere.
The message from my constituency is loud and clear. The grain must be moved. The price of grain must be higher. The interest-free cash advance must be reinstated and the government must intervene in the energy crisis holding down gas prices so the oil companies do not make profits at the expense of the cash-starved producers of the prairies.
I call on this government to listen to the needs of the farm and rural people of my constituency and across western Canada, and address these concerns immediately* * *


AIR CANADA
Mr. Vincent Della Noce (Parliamentary Secretary to Minister of National Revenue):: Yesterday, Mr. Speaker, Air Canada announced drastic staff cuts, close to 3,000 lay-offs including mechanics, flight attendants and pilots. These cut-backs will affect all employees and are due to fuel price increases.
Financial circles have long since been asking for this kind of rationalization, even before oil prices began to go up.
When we had the last two increases I praised the oil companies for- not raising their prices immediately. Rather I was afraid that companies, wholesalers, air carriers, taxis, and public transit companies would take advantage of the situation to boost prices or cut staff.
Where were these companies when we had a decrease of 12 cents a litre in 1987? What reduction did they pass on to consumers when oil prices went down as low as $10 a barrel?
Mr. Speaker, I have a very simple question. Will these
3,000	employees be rehired if oil prices decrease to the levels of two months ago? To that I answer I do not think
so.

October 10, 1990


HAMILTON HARBOUR COMMISSION
Mr. Stan Keyes (Hamilton West):: Mr. Speaker, the Minister of Transport, aided by the Minister of Justice, failed to provide the necessary instrument to answer all the outstanding questions pursuant to the resignation of Peter Lush as chairman of the Hamilton Harbour Commission.
A Tory government will look into the conduct of a Tory appointee, himself a Tory supporter, to the private law firm, Tory, Tory, DesLaurier and Binnington, which will report back to the Tory Minister of Transport.
The private law firm does not have the powers to compel witnesses, to take evidence on oath or to subpoena documents. Only a public inquiry would have the tools necessary to gather evidence on this issue. The legal question put to the law firm by the minister is far too narrow. It does not address section 27 of the Hamilton Harbour Commissioners Act, nor sections 120 to 126 of the Criminal Code of Canada, or the General Law of Agency which may entitle taxpaying Canadians to get back the $400,000 commission cheque paid to Peter Lush.
What has this Minister of Transport got to hide?


THE ECONOMY
Mr. Garth Turner (Halton-Peel):: Mr. Speaker, Canada is an indebted nation. It took a generation of free-spending governments to get us to the point where almost 40 cents of every tax dollar is spent on interest to service that debt.
This is something a lot of Canadians are embarrassed about, but not too many people actively try to help those like Michael Wilson who are trying to solve the problem.
So I am delighted today to say that $1,200 of our national debt can be retired, thanks to the efforts of several Chamber of Commerce groups in my riding.
The Halton Hills Chamber and the Burlington Chamber sponsored a Deficit-Reduction BBQ earlier this year in a direct attempt to help our country through grassroots fund raising. Over 600 people came, listened to the
finance minister speak, and did something positive for Canada.
Critics abound, Mr. Speaker, but so do the average, concerned and involved Canadians like the constituents of my riding who today give money in order to help Canada's future.


GOODS AND SERVICES TAX
Mr. Ron MacDonald (Dartmouth):: Mr. Speaker, I rise today to draw the attention of the House to one of the most incredible feats of swallowing oneself whole ever witnessed in Canadian political history.
I refer, of course, to the phoney comments made by the House leader for the New Democratic Party dealing with the GST. On the one hand he issued an open letter urging the public to support the Liberal senators' fight to kill the Tory GST. Then only two days ago in front of the cameras he decried the very existence of an unelected Senate and wanted it abolished. Now we see his forthright buddies at Queen's Park, led by Premier Bob, about to endorse and embrace the GST and they have already dropped their opposition to the Tory stacking of the Senate.
Will the hon. NDP House leader now fish or cut bait? Are they in support of the Liberal Senate's actions, or will they continue with the cynical double-speak that is now the trademark of the federal New Democratic Party?


BUILDING OF AN AIR TERMINAL AT LG-2
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, the James Bay Development Corporation is building a new $7 million air terminal at LG-2 in Abitibi with the co-operation of Hydro-Quebec, the James Bay power corporation and the government of Canada.
The new flight information station will be located on the second floor of the air terminal and manned by five flight information experts and three electronic technicians serving a region of 145,000 square kilometers around James Bay.
October 10, 1990

Mr. Speaker, I am proud to have worked with the employees of the James Bay Corporation and of the municipality of James Bay to get these facilities which will be useful to James Bay and Quebec workers.


THE ECONOMY
Mr. Steve Butland (Sault Ste. Marie):: Mr. Speaker,
16,000	steel workers remain out of work, 10 weeks and counting.
The trade minister said yesterday with regard to two negative free trade panel rulings that "you can't win them all". Mr. Speaker, we have not and will not win any of these rulings.
While the dispute lingers, American producers begin to assume a greater and greater share of our Canadian producers' market. Despite the animosities created by the labour dispute, Stelco president, Fred Telmer, and USWA director, Leo Gerard, agree that high interest rates and the resultant high Canadian dollar are decimating the steel industry.
It is not just the steel industry, Mr. Speaker, but all of the manufacturing sector is in a freefall: employment is down 6.4 per cent over the third quarter of 1989.
Even if the playing field were level, we would be playing on two separate fields. Canadian steelworkers, producers-all Canadians-are asking this government for assistance.
Lower the interest rates.


AGRICULTURE
Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, I am rising to speak on behalf of the grain producers of Brandon-Souris in particular and of the west in general who are suffering from a severe cash flow crisis.
Although the crops in much of the west were better than average, the combination of reduced grain prices and low delivery quotas means that the farmers in my constituency have had little or no cash flow to date. Meanwhile their obligations to their creditors must be met.
Although the export price for grain is essentially beyond our control due to the continuing insane policies of the EEC and the U.S.A. to subsidize export sales, and as delivery quotas may not improve until Russia and China begin to buy, the federal government can and should assist grain farmers by agreeing to restore interest-free cash advances for the current crop year.
Although the cost to the federal treasury may be as high as $50 million or more, we as a government should act now to assist grain producers financially, just as we have done in the past.
The need is great and the time to respond is now.


GOODS AND SERVICES TAX
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, at this moment in the other place my colleagues in the Liberal Party of Canada are valiantly defending the rights of Canadian men and women and resisting with all their might the imposition of the goods and services tax.
Their cause is the cause of the people of Canada because the people of Canada do not want the GST. Nonetheless, they face a barrage of opposition from the government opposite and yes, from the New Democratic Party, the waffling, wishy-washy New Democrats who are determined to shamelessly scale new heights of hypocrisy and perform new feats of political opportunism. They demand one day that the Senate be abolished, the next day the NDP suggests rather sheepishly no doubt that the Senate stop the GST. Where does the New Democratic Party stand? Who knows? They cannot make up their minds.
What is important is that all Canadians know where Jean Chretien and the Liberal Party of Canada stand. We stand beside Canadians, ordinary Canadians, Canadians who are fighting back, Canadians who work for a living and are struggling to put food on the table, Canadians who want to axe the tax and kill the GST.


Mr. Speaker:: The hon. member's time has expired. The hon. member for Mercier.

October 10,1990
Oral Questions


MATERNITY BENEFITS
Mrs. Carole Jacques (Mercier):: Today, Mr. Speaker, pregnant women can receive up to 15 weeks of unemployment insurance benefits. If Bill C-21 had been passed, they or their spouses could get 10 additional weeks, which means a total of 25 weeks of benefits.
Mr. Speaker, if the Liberal senators took their jobs more seriously, were more conscientious and stopped playing games in the Senate and ringing bells and tapping their feet, thousands of Canadian men and women would be able to receive the additional maternity benefits they deserve.
Mr. Speaker, could it be that at their age, the senators have forgotten what motherhood is all about?


ISRAEL-PALESTINE SITUATION
Mr. Svend J. Robinson (Burnaby-Kingsway):: Mr. Speaker, I rise to strongly condemn the recent violence and brutality of the Israeli army against unarmed Palestinian protesters, some on the site of the A1 Aqsa mosque, Islam's third holiest shrine. While the stoning of Jewish worshippers at the Wailing Wall is of course wrong, the response of the army, using bullets against rocks, is an outrage and tragically, an all too familiar one. Over 150 children have died at the hands of the IDF since the start of the intifada. Israel has displayed contempt for international law and human rights by its policies of collective punishment, forced deportations and settlements.
Canada must strongly condemn these tragic killings, support the sending of a UN Security Council investigative team to the area and actively promote the early convening of an international peace conference on justice and self-determination for the Palestinians.

We cannot have a double standard in the Middle East. People who condemn the invasion and annexation of Kuwait by Iraq should also condemn this annexation.


THE SENATE
Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, during the last few days we have been treated to a less than edifying spectacle in the Senate.
While Canadians are flabbergasted at the Liberal senators' grotesque and degrading antics, the fact remains that the neediest in this country, the unemployed and the regions, are being hit as a result of systematic obstruction by Liberal senators.
Tens of thousands of unemployed workers in Canada are deprived of training courses because the unemployment insurance reform bill is being blocked by the Liberal Senate.
All community development committees in this country have seen their development projects blocked becaue of a lack of funds, all because of the Liberal Senate.
Ville de Laterriere, for instance, in the riding of Jonquiere, will have to delay its recreation and touris development project because of obstruction by Liberal senators.
Mr. Speaker, abuse of power has superseded, common sense, and it is high time democracy was allowed to take its hightful place in this country.



ORAL QUESTION PERIOD


Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, my question is for the Prime Minister. Today the Conference Board of Canada in its quarterly report said: "the Canadian economy is in a recession", and it went on to say that a recovery is not expected until the spring of next year.
The Conference Board puts the blame for this recession squarely on the shoulders of this government. The Conference Board also says: "This will be a made-in-Canada recession".
Will the Prime Minister admit today that it has been the policies of his government which have caused this recession, bringing about the loss of tens of thousands of jobs and misery and despair for thousands of Canadian families? Will the Prime Minister begin changing those

A l ,A:


October 10, 1990

policies today to policies that create jobs, create economic growth, and will not drive this economy even deeper into recession?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the policies that we have been following as a government are designed precisely to avoid the type of recession that we had in 1981-82, with which my hon. friend is very familiar.
What we have indicated last year and this year was that we must avoid the increase in inflationary pressures that were clearly building in the economy and that were clearly going to lead us into a position where we would have major loss of competitive position, precisely what is happening in Great Britain today. In Great Britain today there is a 10.6 per cent inflation rate. Its inflation is much less under control. We are trying to avoid that problem so that we can get back on to a track of non-inflationaiy growth, at a very early time.
The Conference Board report clearly points out that in the second quarter of next year we will have growth at the annual rate of 3 per cent. That is what we are trying to achieve.


Herbert Eser (Herb) Gray: Mr. Speaker, the minister, in his blind and arrogant way, is refusing to listen to organizations like the Conference Board and his own Economic Council. He keeps talking about inflation, and yet the Conference Board in its report says that not only will the GST, a key policy of this government, "have a significant impact on inflation", but that "the implementation of the GST at the beginning of next year will erode purchasing power at a time when the economy will be in recession and interest rates will still be high".
I ask the Prime Minister and the Minister of Finance: Will this government have the common sense and the decency to withdraw the GST right now, before it drives this economy even deeper into recession and does even more damage to Canadians and their families?


Michael Holcombe Wilson: Mr. Speaker, the hon. member accuses me of not listening. I would suggest that he listen also and not quote as selectively as he has the Economic Council report.
Oral Questions
What the Economic Council report does is say: support the policy that we have been following to get inflation under control. I suggest the hon. member read the report where he will see that.
What the Economic Council is saying is that it would like to see more action taken on getting the deficit down. If my hon. friend would be honest with Canadians himself, he would say that he has never proposed anything to get the deficit under control. That is a key element of what the Economic Council is proposing to Canadians, and we are listening to that.


Herbert Eser (Herb) Gray: Mr. Speaker, I ask the Minister of Finance if he, the Prime Minister, and his government will be honest with Canadians and say the reason they are desperate to force through the GST is that they want to close down this House as soon as possible so they do not have to stay here and listen to the music about the recession they are causing.
They do not want to stay here and face the music from Canadians about the GST induced recession that they are bringing about.

Mr. Speaker, why doesn't the Prime Minister withdraw his disastrous GST today? Why does the Prime Minister want to do even more harm to Canadian families who have already been hard hit by a recession created by this government's policies?


Michael Holcombe Wilson: Mr. Speaker, I will tell you one type of noise that I am getting kind of fed up hearing-


Some hon. members:: Oh, oh.


Some hon. members:: Resign.


Mr. Speaker:: The hon. minister.


Michael Holcombe Wilson: Mr. Speaker, the music that I was referring to are the kazoos and the noisemakers in the Senate.


Some hon. members:: Hear, hear.


Mr. Speaker:: Perhaps the minister could complete his
answer.


Michael Holcombe Wilson: Mr. Speaker, the hon. member suggests the reason why we are trying to push

October 10, 1990
Oral Questions
through the GST. If he would look back to what the Senate has said itself, it believes that it is important that we move to the GST because the existing sales tax is not working. Senator Buckwold, Senator MacEachen-


Mr. Lewis:: Mr. Speaker, there is a stranger in the House behind that curtain.


An hon. member:: Who is that?


Some hon. members:: Chretien.


Some hon. members:: Oh, oh.


Some hon. members:: He snuck out. There he is.


Some hon. members:: Hear, hear.


Michael Holcombe Wilson: Mr. Speaker, a Senate committee that included Messrs Buckwold, Kirby and MacEachen said: "We recommend that as soon as is practicable, the government introduce legislation to implement a broad based multi-stage sales tax"; in other words a GST to replace the existing federal sales tax system.
This demonstrates very clearly the cynical and cheap politics that the Liberals are following by blocking this GST when they know they have no alternative to it and they know it is a thing that this country needs.


AIRLINE INDUSTRY
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is for the Minister of Transport.
Following the Tory policy of privatization and deregulation we have seen two major airlines gobbling up 14 regional ones. Air fares have risen faster than the cost of inflation. Jet service has been reduced in the regions. Hundreds of thousands of Canadians who invested in Air Canada shares have lost money, and now we have close to 3,000 people out of work in Air Canada.
How can the government continue with policies that have only served to destabilize our airline industry in Canada? What measures does the minister propose to stop its further decline.


Douglas Grinslade Lewis: On the
contrary, Mr. Speaker, there has been no decline in air service in Canada.


Some hon. members:: Oh, oh.


An hon. member:: It is an improvement.


Douglas Grinslade Lewis: In fact, deregulation and the hub and spoke concept have greatly increased opportunities for Canadians to travel.
I note that Air Canada welcomes the government's policies of open skies. It says that the prospects of an open regime which will allow carriers from each country to operate services between any point in one country and any point in the other, as well as between points within the country, is very encouraging.


Sergio Marchi: Mr. Speaker, it is time this minister wakes up and recognizes the turbulence that our airline industry is in today and how he can begin to sacrifice an already fragile industry into head-to-head negotiations with the United States.

My supplementary is directed to the same minister. Considering the devastating impact of the government's policies on our airlines, with the thousands of lay-offs that took place recently, how can the government possibly sacrifice an already weakened industry by starting bilateral negotiations with the United States, which might well deal a fatal blow to Canada's airline industry? Why?


Douglas Grinslade Lewis: Mr. Speaker, I refer to the same gentleman, Mr. Claude Thylor, the President of Air Canada. When commenting on the open skies concept that we are entering into with the United States, he said: "Air Canada fully supports a gradual phasing in process including transitional mechanisms to ensure an orderly integration of airline services to the public".


Sergio Marchi: What about the safeguards?


THE ECONOMY
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is directed to the Prime Minister. Yesterday we had the Air Canada announcement of the largest airline lay-offs in history, with some 2,900 working families being affected. These job losses are added to the 150,000 jobs lost in the manufacturing sector.
Today we heard from people in the fishing industry,
3,000	of whom will not be eligible for benefits because of this government's policy. The Conference Board of Canada is saying today that unemployment will increase mid-next year up to 9 per cent. In November 1988 the
October 10,1990

Prime Minister said that they would "ensure innovative and generous adjustment and retraining programs will be introduced whenever and wherever required, with the chief priority being the well-being" of individual Canadian worker and their families.
I ask the Prime.Minister: Where are those adjustment programs? What are you prepared to do for the working people in Canada today who are being laid off at an unprecedented rate?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, provision for many of those adjustment programs has been paralyzed by the Liberals in the Senate. My hon. friend should be encouraging the Liberals to get the bill out of the Senate and back into the hands of the working people of Canada.


Some hon. members:: Oh, oh.


Martin Brian Mulroney: Mr. Speaker, the economy from 1983 to 1989 grew at an average annual rate of 4.25 per cent. There have been 1,600,000 new jobs created since September 1984.


Mr. Allmand:: Nobody believes you, Brian.


Martin Brian Mulroney: Over 80 per cent of them are full time. As the Minister of Finance predicted in his budget, in an attempt to squeeze inflation out of the economy there has been a slowing down in the economy, obviously. While we regret that, the most insidious ill of all in an economy is inflation, because inflation robs those on fixed incomes and it hurts the poor, the sick, and the elderly most of all.
We have chosen the hard way of dealing with inflation now to have a sounder economy later.


Audrey Marlene McLaughlin: Mr. Speaker, my supplementary question is for the Prime Minister.
The people who are experiencing the hard way are the poor people of this country. The one in six children who live in poverty, the 40 per cent of food bank users, are the ones who are experiencing the hard way in Canada.
The Prime Minister knows that he could introduce an amendment to the variable entrance requirement for unemployment insurance. He could do that now to ensure that those workers could receive benefits.
Oral Questions
Mr. Speaker, this government does not seem to understand that the GST will aggravate the recession. People across the country know this. A consulting firm, Informetrica, estimates that as far as the airline industry is concerned, the GST will cause 4,000 jobs to be lost between now and 1991 and 7,000 by 1993. Will the Prime Minister finally make a decision and withdraw the GST now?


Martin Brian Mulroney: Mr. Speaker, the leader of the NDP began her question by referring to children in poverty.
It is one of the blights on any industrialized society. One child in poverty is one child too many. However, in excess of 250,000 children have been removed from the poverty line since this government came to office.
We plan to maintain those policies so as to reduce even further the number of children in poverty in Canada.

My hon. friend's question was about the GST. She suggested that the GST will have an impact on inflation. That is quite true. The Minister of Finance said so when the GST was first discussed. There will a definite impact, but it will not last, as confirmed by the Conference Board in its report. This impact will last for one fiscal year, and it will a negative impact on the inflation rate. I agree.
However, for the past 50 years, a number of task forces and various royal commissions of inquiry have been asking the Parliament of Canada to get rid of the existing tax on manufactured products and introduce a GST, in order to streamline Canada's economy so that this country can create more jobs and be more competitive on international markets. Despite the problems, the GST will modernize our economy, and that is exactly what we intend to do.


Audrey Marlene McLaughlin: On a supplementary, Mr. Speaker, I would like to quote Gordon Sinclair, the President of Air Transportation Association of Canada who said in October 1989: "The proposed tax treat-

October 10, 1990
Oral Questions
ment for U.S. travel renders Canadian air carriers less competitive vis-a-vis their American counterparts". Mr. Sinclair was talking about the GST.
There are other experts who have said that Canadian airlines will find it very difficult to compete with American airlines because of the GST and because of the lower fuel prices in the United States.
In fact, why does the government continue to pursue its programs of free trade with the United States, the GST and deregulation of airlines?
The experts in the industry indicate that these are causing greater unemployment. We are into a recession. Why does the Prime Minister not withdraw the GST, back down with the deregulation of airlines with the United States and save Canadian jobs?


Martin Brian Mulroney: Mr. Speaker, every socialist country in the world from Poland to Czechoslovakia to eastern Germany has recommended liberalized trade, the shucking of the regulations that existed in the economy. The only people who believe in protectionism are the NDP in Canada.
My hon. friend has quoted a number of people with regard to the GST. She may choose to be very helpful to the process by speaking to her seatmate who moonlights in the Senate-


Some hon. members:: Hear, hear.


Mr. Speaker:: Perhaps the right hon. Prime Minister could complete his question.


Martin Brian Mulroney: I was talking to my old aunt Mabel in Kamloops, and she cannot believe that she voted for Nelson for the House, and now he wound up in the Senate.


Some hon. members:: Oh, oh.


Mr. Speaker:: I hope there are no more aunts-


Some hon. members:: Oh, oh.


Martin Brian Mulroney: Mr. Speaker, my aunt twice removed.
I just wanted to say to my hon. friend, the leader of the NDP, that when she is talking to the embryonic senator, there is a quote with regard to the GST by one of Canada's distinguished columnists that says this and perhaps it should be brought to the attention of her seatmate. "The Liberal members of the Senate of Canada are collectively a disgrace to this nation. To
witness those underworked and overpaid foul-talking, desk-banging senatorial anarchists acting like animals within the Parliament Buildings"-


Some hon. members:: Oh, oh.


GOODS AND SERVICES TAX
Mr. John Manley (Ottawa South):: Mr. Speaker, we know that aunt Mabel won't vote for him again in the next election.
The Conference Board of Canada said today that we are in our first made-in-Canada recession. What the government has offered us is this made-in-the-Tory caucus propaganda sheet that sanctimoniously promotes the government's economic policies.
I would like to know from the Minister of Finance why he has not admitted in this propaganda sheet that it is his high interest rate policy that is driving tens of thousands of Canadians out of their jobs and putting Canada into this recession that the Conference Board has described.


Michael Holcombe Wilson: Mr. Speaker, we have policies. We have set them out veiy clearly.
To quote what the hon. member has said himself, "The Liberal Party would not have a shred of credibility if they didn't propose alternatives." Where are the alternatives of the Liberal Party of Canada?


John Paul Manley: Mr. Speaker, the minister knows about not having a shred of credibility.
Yesterday, he justified this propaganda sheet by saying that he sent it out to Canadians because it responds to their questions in an open, frank and direct way.
I would like to know whether the minister thinks it is open, frank and direct that in this sheet, he has not admitted that the GST is going to deepen the recession that we are already in. He has not admitted that the GST is not visible or revenue neutral as he had promised. He has not admitted that the GST tax credits are not indexed. Why did he pass up a $1.3 million opportunity to tell the truth?


Michael Holcombe Wilson: Mr. Speaker, maybe what my hon. friend is looking for are statements from the Organization of Economic Co-operation and Development which says we should have a goods and services tax, which supports the monetary

October 10, 1990

policy of the Government of Canada, which supports the fiscal policy of the Government of Canada, which supports the free trade agreement, which supports deregulation, which supports privatization, which supports trade. That is what the OECD says. That is also what the Economic Council has said.


Mr. Gauthier:: No, no.


Michael Holcombe Wilson: The hon. member is saying no. If he would read what the Economic Council has said-I have read it-he will see that they do support the policies. They are saying they would like to see the deficit down and what has the Liberal Party of Canada ever done to say-


Some hon. members:: Hear, hear.


THE ECONOMY
Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, this is an example of where pig-headed vanity replaces economic reality in this country.
The Conference Board of Canada report makes clear today that this government's economic policy, specifically the policy of the Minister of Finance, is needlessly driving tens of thousands of Canadians to the unemployment lines in the face of the winter of 1990. The Conference Board says we are experiencing our first ever made-in-Canada recession, created, authored, made by this government, this Prime Minister and this Minister of Finance.


Some hon. members:: Shame.


Brian Vincent Tobin: Mr. Speaker, my question is for the Prime Minister. Why is the Government of Canada insisting on completely eliminating government support for the unemployment insurance fund? It is the complete elimination of $2.7 billion of government support, at a time when the Conference Board of Canada tells us that tens of thousands more Canadians will join the 1.5 million already unemployed in Canada and in need of support this winter from the UI fund? Why the cuts?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, I cannot understand the hon. member talking out of both sides of his mouth. I
Oral Questions
remember a made-in-Canada recession that began in 1981 and it was the worst one that this country has ever
experienced.
Let me say as well, Mr. Speaker, that for him to talk about unemployment insurance benefits when what is happening in the other place is a disgrace to his party and to the Parliament of Canada is absolutely talking out of both sides of his mouth.


Hon. Roger C. Simmons (Burin-St. George's):: Mr. Speaker, I have a supplementary question for the same minister, who would be aware that fishermen and plant workers on both the Atlantic and Pacific coasts are being savaged because of her continuing and stubborn refusal-this is not a matter for the Senate-to bring in a simple amendment to the Unemployment Insurance Act-


Mr. Crosbie:: Speak to the Senate.


Roger Simmons: You would like to think so.
The Canadian Labour Congress and fisheries union on both the Atlantic coast and the Pacific coast have said today that unless the minister brings in this amendment, tens of thousands of people will wind up on welfare.
In the name of basic compassion, will the minister instead of blaming it on somebody else in the other place, will she relent and bring in the amendment like her government has done for the past five years, like governments have done for the past 14 years in this House?


Barbara Jean McDougall: Mr. Speaker, all the grandstanding that is going on on the other side of the House is not going to help the people who are in the fishing industry in this country. Let me point out, first of all, that under Bill C-21, which is the bill that has been stuck in the Senate since last November, we have fisher people who are not affected and they will be better off when Bill C-21 is passed.


Roger Simmons: VER, Barbara.


Some hon. members:: 


Barbara Jean McDougall: The VER will not help the repeaters, the seasonal workers, the people over 65 and the people looking for maternity benefits.


Some hon. members:: 


VER. COMMONS DEBATES
[Stage Direction]
October 10,1990
Oral Questions
Barbara Jean McDougall: It will not help one of those people, and that is why this is hypocritical.


Some hon. members:: 


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, we have all enjoyed the jokes from the Prime Minister, the rants from the Minister of Finance, but none of these can take away from the fact that the Conference Board of Canada said quite clearly today and I quote: "Canadians will see no gains in their real disposable income in 1991."
This Minister of Finance has been voted the worst minister of finance-


Some hon. members:: Oh, oh.


Mr. Speaker:: Let's try to put the question.


Steven W. Langdon: Is the minister prepared finally to admit that the country is in a recession? Will he admit that it is a made-in-Canada recession for which he is responsible, and will he tell the country what he intends to do about it?


Michael Holcombe Wilson: Mr. Speaker, I can take my hon. friend back to the budget of 1989 and 1990, where I said very clearly that we had inflationary pressures that we had to get under control. Those inflationary pressures were caused by the very strong growth that we had during the 1984-1988 period, during which time we saw an increase in personal disposable income after taxes and after inflation of 14 per cent.
It is a natural progression in an economy when there is that fast a growth, that there has to be a slowdown. I clearly predicted that in my budget of 1990 when I said: "This will be a testing year for the Canadian economy. The economic news will not be encouraging in the months ahead." We have been very open and honest with Canadians.
We are getting the inflationary problems under control. As we have been getting them under control, we have been bringing interest rates down. As this continues to happen, we are setting the stage for strong non-infla-tionaiy growth which, as the Conference Board of Canada projects, will start in the second quarter of next year.


Steven W. Langdon: I have a supplementary question, Mr. Speaker. There is a big difference between slow growth and no growth: decline.
That is what the government has given the country, economic decline.
Will the Minister finally start to care about Canadians-


Some hon. members:: Oh, oh.


Steven W. Langdon: -and will he demonstrate this by leading our House to adopt immediately the variable entrance requirements for unemployment insurance for fishing communities right across the country?


Michael Holcombe Wilson: Mr. Speaker, I have made it very clear that what we are going through right now gives me no pleasure whatsoever-


Brian Vincent Tobin: Well, quit doing it.


Michael Holcombe Wilson: -but I do know, if we do not have a period of time when we get these inflationary pressures under control, then we will go through the same sort of mess that we went through in 1981-82. I am sure my hon. friend does not want to go through that.


Some hon. members:: Hear, hear.


Michael Holcombe Wilson: What my hon. friend is ignoring when he talks about one aspect of the unemployment insurance reform bill, the variable entrance requirement, is the fact that we are improving maternity benefits. We are adding some $500 million to $700 million worth of moneys for training of people who are out of a job. We are putting moneys to allow people over the age 65 who want to continue in the workforce to continue to have the support and benefit of an unemployment insurance.
These are the things that are hung up in that bill on the other side. His party is supporting the Liberal senators to continue to hold up that bill. That, Mr. Speaker, we say is dead wrong.


EMPLOYMENT
Mrs. Sheila Copps (Hamilton East):: Mr. Speaker, my question is directed to the minister who is responsible for corporate losses in Canada and who is well aware that yesterday Air Canada cut 3,000 jobs. Hardly half an hour ago, the Canadian National Railways announced an additional loss of 1,500 jobs throughout Canada, including 750 in the City of Montreal. For the past 5 months,
October 10, 1990

the minister has been hiding a report which foresees the end of Quebec shipyards.
While his colleague the Minister of Energy, Mines and Resources claimed last week that there would be major spinoffs throughout Canada from the Hibernia project, the Minister of Industry, Science and Technology remained silent. Why did he not say anything?


Hon. Benoit Bouchard (Minister of Industry, Science and Technology):: Mr. Speaker, I am certainly pleased to answer the Hon. Member for Hamilton East. The way she keeps asking her questions, Mr. Speaker, we had quite a rest for three months without having to answer them.
That being said, the hon. member is absolutely not informed of the situation. She should have listened to our briefings on the Quebec shipbuilding industry. Since 1987, Mr. Speaker, this Conservative Government has provided Marine Industries in Quebec with $150 million to help them increase their competitiveness and continue their operation. We are currently working together with the Quebec Government on a possible solution to the frigate and destroyer problem.
Mr. Speaker, everybody is aware of the fact that the shipbuilding industry throughout the world is experiencing difficulties and we have done for the shipbuilding industry in Quebec what her government had never done in 20 years.
As to the spinoffs from the Hibernia project, I am pleased to advise the hon. member that beyond the persons-years guaranteed to Canada, a contract worth $360 million has been awarded to a Quebec firm, and that a second contract has been awarded to a firm whose assets are 60 per cent Quebec-owned. Mr. Speaker, if those are not spinoffs for Quebec, I am sure I do not have the same definition as the hon. member of that province's interest!


Sheila Maureen Copps: Mr. Speaker, the Minister of Industry, Science and Technology remained silent in this House, although he knew five months ago that the Quebec shipbuilding industry was going to disappear. He remained silent again when Air Canada announced that 2,900 workers have lost their jobs, and when hardly half and hour ago, the Canadian National
Oral Questions
Railways announced that 1,500 workers had also lost their jobs.
What is he doing as Minister of Industry, when all we see here in Canada are industries being lost?


Benoît Bouchard: Further to what the Minister of Finance said, Mr. Speaker, it is clear that we live in more difficult economic times. But contrary to what my colleague's party did during the 1981-82 recession, we are taking steps to help the industry.
When she referred to the lost jobs, she overlooked the fact that in the area of industrial development, especially in Ontario and Quebec, there were major spinoffs and that last week, the Economic Council of Canada insisted on the fact that through the Western Canada and Atlantic Canada diversification agencies, the government had taken steps to meet its obligations through privatization and tax incentives.
What makes a recession under a Conservative Government different from a recession under a Liberal Government, Mr. Speaker, is the fact that we have answers which you never had which led to this country being left in an unbelievable financial mess!


Some hon. members:: Hear, hear.


SOLICITOR GENERAL
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is directed to the Solicitor General. In December, 1988 the Canadian Security Intelligence Service initiated a national inquiry into what it called native extremism. In June, 1989 that report was presented to the Conservative government warning the government of the possibility of "sporadic outbreaks of violence" by native people.
Will the Solicitor General first confirm that, yes, indeed his government was in receipt of this report in the spring of 1989, and can he explain to the people of Canada why his government did absolutely nothing to prevent the unfortunate and tragic events at Oka and Akwesasne when it was prewarned?


Hon. Pierre H. Cadieux (Solicitor General of Canada):: Mr. Speaker, with respect to that particular report on native extremism, which is referred to in the annual

October 10, 1990
Oral Questions
report of SIRC for 1989-1990, the report was received by the Solicitor General and was made public.


John V. Nunziata: Mr. Speaker, the report, in fact, was not made public and he will know that in this year's report his government was criticized for not making public a report that SIRC put together based on the report of the Canadian Security Intelligence Service. He knows that that is in the report.
I ask the Solicitor General whether that specific information about the potential for sporadic violence was passed on to the Government of Quebec and, in particular, to the provincial police in Quebec, the Surete du Quebec? Will he immediately table the complete report here in the House of Commons?


Pierre H. Cadieux: Mr. Speaker, I am not sure that I follow my hon. colleague, but if I may quote from the 1989-90 annual report, on page 28, it states: "On February 5, 1990, the Solicitor General released a version of the report"-


Some hon. members:: A version.


Pierre H. Cadieux: That is correct, "-with significant portions blacked out for reasons of national security and privacy, accompanied by a news release".


COMMUNICATIONS
Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, my question is directed to the Prime Minister. Yesterday, the Minister of Communications told me that he had rejected a cabinet appeal of the CRTC decision denying the last FM station in Toronto to the Afro-Ca-nadian applicant because, and I quote: "English Canada insisted upon an arm's length relationship". Yet, the government has intervened with the CRTC more than any other government.
If the government could act on behalf of Callnet three times and Tory interests in connection with the News Network, why can it not intervene in support of the three commissioners who considered the CRTC decision was an affront to the visible minority community and the multicultural nature of the country?


Hon. Gerry Weiner (Secretary of State of Canada and Minister of State (Multiculturalism and Citizenship)):: Mr. Speaker, cabinet reviewed the CRTC decision and was satisfied that due process had been followed.
My colleague, and in fact all members of cabinet, are very aware of the concerns of members of the Toronto community for another format. The fact of the matter is, that this decision has not precluded the possibility of a dance music station in Toronto. The CRTC has already asked for public comment on the use of the former CKO-FM frequency and the Minister of Communications has invited the public to make views known to the CRTC before October 31.1 wholly support and endorse this call.


Howard Douglas McCurdy: Mr. Speaker, the Minister of Communications also said that ownership was not the issue, but there are no Afro-Ca-nadian owned stations in the country. He said that dance music was available, and so showed his insensitivity to black culture. He emphasized the French-English dichotomy which shuts many Canadians out.
Does the government not recognize in this an example of systemic discrimination at the highest level? What action does the government intend to take to rectify this insult to 300,000 visible minority members in the city of Toronto?


Gérard (Gerry) Weiner: Mr. Speaker, we have no lesson to learn from the opposition on our commitment to multiculturalism.


Some hon. members:: Hear, hear.


Gérard (Gerry) Weiner: We are the government that introduced the Canadian Multiculturalism Act. We are bringing forward legislation to establish the Canadian Race Relations Foundation. We are creating the new Department of Multiculturalism and Citizenship.
We will pursue a very active program of race relations and cross-cultural understanding right across this nation to help Canadians understand each other better and become more comfortable with each other.
October 10,1990


Mr. Garth  Tlimer@Halton-Peel: Mr. Speaker, my question is directed to the Minister of Energy and it concerns the status of methanol as a transportation fuel in Canada.
As the minister knows, oil passed the $40-a-barrel mark yesterday and may be poised for more oil shocks as the Persian Gulf crisis continues. Given that, alternative fuels like methanol assume a greater importance for our energy security.
As the minister knows, vehicles powered by 85 per cent methanol are clean burning and practical. In fact, Canada is exporting 2,000 methanol burning cars to California.
Therefore, my question is this: Why can Canadians not buy methanol in Canada? What is the government intending to do to look at alternative fuels so that we can have more energy security for this country?


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, let me thank the hon. member for the question. It is a sensible question.
I want to tell the hon. member and the House that the 85 per cent methanol is still in the experimental stage. As he mentioned in his question, Canada will be participating in the California test.
Canadian technology will be available, and we believe that it can be an export market for us as well as helping us in terms of alternate energy.
Also, I remind him of the MILE program where we are using methanol in heavy duty engines, two cycle engines. I want to inform him that in the near future, we will be announcing with a Winnipeg company called New Flyer Bus Lines a new program on methanol.


Some hon. members:: Hear, hear.


LONGUE-POINTE MILITARY BASE
Carole Jacques: Mr. Speaker, my question is directed to the Minister of National Defence. A study done by the firm Productivity Group at the
Points of Order
request of DND last January recommends shutting down Longue-Pointe's military base. This would affect 1,200 workers and thousands of indirect jobs because the military base awards almost $2 million worth of contracts annually to Montreal companies. Mr. Speaker, does the minister intend to follow up on or even consider this recommendation?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, the study that was done was a preliminary study.
As the hon. member is aware, the Department of National Defence has had a reduction in its budget. Before any further action would be taken on the preliminary study, there would have to be a detailed study.
Hon. members must be aware that the responsibility that the Department of National Defence has is that of providing security to Canada. We do it in the most efficient manner possible.


PRESENCE IN GALLERY
Mr. Speaker:: I wish to draw to the members attention, the presence in the gallery of His Excellency Mauno Koivisto, President of the Republic of Finland.


Some hon. members:: Hear, hear.


Mr. Speaker:: Also, I wish to draw to the attention of members the presence in the gallery of Speaker Sean Treacy and Deputy Speaker James Thnney of the Irish House.


Some hon. members:: Hear, hear.


POINTS OF ORDER
Mr. Chris Axworthy (Saskatoon-Clark's Crossing):: Mr. Speaker, I rise on a point of order. Yesterday in the House, the Minister of Public Works told the House in reply to a question concerning Technitread Tire Manufacturing that the company had purchased the land upon which the plant was constructed for $250,000.
However, on May 17, 1990, the minister and his officials testified before the Standing Committee on

October 10,1990
Points of Order
Industry, Science and Technology, Issue No. 46, pages 25 and 30, that the property was purchased for $125,000.
What we have been trying to get from the minister are the full facts about the government's relationship with this company. Yesterday for some reason, the minister- either because he was ignorant of the facts or because he no doubt inadvertently misled the House-


Mr. Speaker:: Surely, this is a debate over facts that are on the floor of the House. Points of order are not supposed to be used to redebate a matter or redebate an exchange.
The hon. member can pursue it in another way, but I do not think it is a proper point of order.
If the hon. member has something further to add, I will hear him.


BLOC QUEBECOIS - ORAL QUESTION PERIOD
Hon. Jean Lapierre (Shefford):: On a point of order, Mr. Speaker.
I should like to remind the Chair that there is a group called the Bloc Quebecois which, now and again, would like to have an opportunity to ask questions in the House and to hold the government responsible for its actions.
Mr. Speaker, I would ask you to go over your list of the past few weeks to see to what extent the Bloc Quebecois did not get its share of questions on the basis of its representation in this House. Worse still, Mr. Speaker, on each occasion we had time for only one question, which gave the government a chance to make a statement to which we could not respond.
Mr. Speaker, why should we be limited to half questions when other members of the opposition are entitled to a full question, plus a supplementary? We are not half members, we do not have half privileges, and we are not here for half measures, Mr. Speaker!
I should like to remind you that we represent as many constituents as any other member in this House, and we are beginning to be fed up with being treated as if we were charity cases!


Mr. Speaker:: I am going to respond to that. I do not need to hear further members. If members will consider carefully, and the public that is watching, this was a very
vigorous Question Period and we did not reach the usual number of members. I only have 45 minutes. I am sure that the hon. member can accept the fact that I have heard his representation and will try to do the very best I can tomorrow and on other days.


Some hon. members:: Oh, oh.


Mr. Speaker:: I would ask hon. members to contain themselves and behave in this House. Many years ago hon. members stopped behaving that way because the public was sick and tired of it.


Some hon. members:: Hear, hear.


MOTION TO ADJOURN PURSUANT TO S. O. 52 INTEREST RATES
Mr.   Benoit@: Mr. Speaker, pursuant to Standing Order 52,1 ask for the adjournment of the House for the purpose of debating the utterly disastrous impact of high interest rates.
In a city like Montreal, Mr. Speaker, with a population the size of Manitoba's, we now have in the early stages of the recession an unemployment rate in excess of 14 per cent. We cannot accept-


SPEAKER'S RULING
Mr. Speaker:: I hesitate to interrupt the hon. member but I read with some concern his request for an emergency debate. But after all this is an issue which could have been debated yesterday. It is a problem, it is a very important matter, but it would not be appropriate to hold such a debate today.


Mr. Louis Plamondon (Richelieu):: On a point of order, Mr. Speaker. With respect to your remark concerning the attitude of certain members of the Bloc Quebecois who have been rather noisy, you said you had never seen anything like it in the House of Commons. I for one can tell you that I have never seen a group so deprived of its rights as is the Bloc Quebecois when it comes to the question period, to its right to speak, and to all privileges which are normally extended to any group that represents the public. This is hardly acceptable.
Mr. Speaker, we are asking for a private meeting with you to solve this problem.
October 10, 1990


Mr. Gerin:: On the same point of order, Mr. Speaker.


Mr. Speaker:: Very well. I thank the hon. member for his intervention. Each member is entitled to disagree with the Chair. I did not say I had never seen such disorder. I said that the banging-the-desk approach has been abandoned by members of this House a number of years ago.
Besides, as I was saying-
[English\
Let us see what happens tomorrow. I shall do the very best I can.


François Gérin: A point of order, Mr. Speaker.


Mr. Speaker:: If the hon. member is on the same point of order, it is not appropriate to be rising. If it is something different, I will hear it.


François Gérin: Mr. Speaker, a Bloc Quebecois member claims that his privileges have been breached, and that is the worst thing that can happen in this House. In addition, another member is requesting a meeting with you to talk about the partiality or impartiality which the Chair must show in the House. We did not get an answer to that question. We would like to know whether we can meet with you within the next few minutes to discuss the impartiality of the Chair concerning all members of the House, including the members from Quebec?


Mr. Speaker:: I took exactly the same attitude with respect to the hon. member as I did with respect to other members on the government or the opposition side.


Some hon. members:: No, no.


Mr. Speaker:: Of course if a member wishes to talk to the Speaker the door is always open.

The hon. member for Athabasca on a point of order.
Routine Proceedings DESIGNATION OF MEMBERS


Mr. Jack Shields (Parliamentary Secretary to Minister for International Trade):: Mr. Speaker, perhaps you could clarify something for this member before you. Often an independent member is referred to in the press-and the case in point is the member for Beaver River-as the member of Parliament for the Reform Party of Canada. Is that member recognized as a member coming from a party or is she recognized in this House as an independent?
If I could, I would put the same question to you to clarify the situation of the members who are elected, the media says, by the Bloc Quebecois. Are they recognized as Bloc Quebecois in this House, or are they recognized as independent members of the House of Commons?


Mr. Speaker:: I would advise the hon. member for Athabasca that that very question is under advisement at the present time.



ROUTINE PROCEEDINGS


Arthur Jacob (Jake) Epp: Mr. Speaker, pursuant to Standing Order 32(2), I am pleased to table in both official languages the annual reports of the Co-operative Energy Corporation and the Lower Churchill Development Corporation for the year ending December 31, 1989.


Mr. Speaker:: The hon. member for Kamloops on a point of order.


Mr. Riis:: Mr. Speaker, we are all aware that the Campeau-Belanger Commission has begun its work and the Prime Minister indicated that we could count on him so that we would not simply be looking at one shopping list.
I wonder if the government could indicate when the Prime Minister would be tabling the government's proposals for this discussion across the country.

October 10, 1990
Routine Proceedings


Mr. Cooper:: I will have to take that as notice of an intervention by the member and we will see what we can do to find the information he requests.


STRIKING COMMITTEE
Mr. Jim Hawkes (Calgary West):: Mr. Speaker, I have the honour to present the fiftieth report of the Striking Committee.
[Editor's Note: See today's Votes and Proceedings.]


WAYS AND MEANS
Hon. John McDermid (Minister of State (Privatization and Regulatory Affairs)):: Mr. Speaker, pursuant to the provisions of Standing Order 83(1), I wish to table copies of a notice of a Ways and Means motion to amend the Income Ihx Act. I ask, pursuant to the provisions of Standing Order 83(2), that an Order of the Day be designated for the consideration of the said Ways and Means motion.


PETITIONS
Hon. David MacDonald (Rosedale):: Mr. Speaker, I am presenting to the House two petitions today. The first one is on behalf of Amnesty International, requesting that the House of Commons bring to the attention of the Turkish government its opposition to capital punishment and the hope that any death penalties imposed by the Turkish government will be commuted.


EXTERNAL AFFAIRS
David Samuel Horne MacDonald: Mr. Speaker, the second petition is from residents of Rosedale riding in Toronto, urging the Canadian government to take immediate and effective measures to secure the release of a Canadian citizen, Mr. Yi-Sheh Leo, who is imprisoned at the moment in Taiwan.


GENERAL AGREEMENT ON TARIFFS AND TRADE
Hon. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, I rise today under Standing Order 36 to present petitions signed by scores of dairy and poultry farmers across Ontario who ask this House to provide a remedy.
They are calling on Parliament to instruct the government to hold out our Canadian marketing system as an example to the rest of the world and to protect it in its entirety at all costs in the current round of GATT negotiations.
It is not acceptable that systems which are legislated by this House are being traded away in negotiations behind closed doors circumventing this Parliament.


VIOLENCE ON TELEVISION
Jean-Pierre Blackburn: Mr. Speaker, today I wish to table a petition with more than 2,000 signatures of residents of the Saguenay-Lac-Saint-Jean area, and more specifically the riding of Jonquiere, who call upon Parliament to do what is necessary to encourage television broadcasting networks and cable companies to ban children's programs that show violence as a normal means of conflict resolution.
They also call upon this government to introduce regulations to ban children's programs that show violence and war, as well as the sale of toy rifles, machine guns, and so forth, and to set up a special fund to support the production of television series for children in which heroes and heroines are concerned about human rights, peace, international co-operation and so forth.


CANADA POST
Mr. Lawrence MacAulay (Cardigan):: Mr. Speaker, it is an honour for me to present to this House petitions containing hundreds of names from the federal riding of Cardigan, Prince Edward Island.
The petitioners are opposed to the post office's harmful proposal to eliminate Saturday rural mail in Prince Edward Island. The people want this decision by Canada Post reversed and at the very least a six-month extension so that the decision can be examined to see if we can restore the service.
October 10, 1990


VARIABLE ENTRANCE REQUIREMENT
Mr. Fred J. Mifflin (Bonavista-TVinity-Conception):: Mr. Speaker, I rise in accordance with Standing Order 36 to present a petition on behalf of 56 of my constituents. They are from the Bay Roberts, Harbour Grace, Carbo-near, Bristol's Hope, Perry's Cove area, and Salmon Cove.
They are concerned that they need 14 weeks instead of 10 weeks in order to qualify for unemployment insurance in Newfoundland.
They note also that the unemployment rate in Newfoundland is, if not the highest, among the highest in the country. They the undersigned humbly pray and call upon Parliament simply to introduce the variable entrance requirement without delay.


GOODS AND SERVICES TAX
Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, I am pleased to rise to present a petition to this House signed by by numerous residents of Mississauga, Ontario, who object to the government's proposed goods and services tax in particular as it taxes books and the printed word.
They indicate to the House that the printed word is a cornerstone of democracy. Freedom of the press, of course, is one of the freedoms we enjoy under our Charter of Rights and Freedoms in this country.
Yet this government, in its contemptuous move, has elected to seek to impose a tax on the printed word that these petitioners object to. They call upon Parliament to reject such an iniquitous measure.


Hon. Bob Kaplan (York Centre):: Mr. Speaker, like my colleague from Kingston and the Islands I have a petition containing numerous signatures from one end of Mississauga to the other.
These petitioners are highly indignant about the policy of the government to impose the goods and services tax on the printed word. They point out that through the history of our country taxes have never been imposed on books, that this is unprecedented, and that it is in violation of the fundamental understanding of Canadians of the importance of the printed word.
They call on the government to withdraw the tax in so far as it applies to books.
Routine Proceedings


Mr. Joseph Volpe (Eglinton-Lawrence):: Mr. Speaker, it is my honour and privilege, pursuant to Standing Order 36, to present a petition on behalf of many Canadians from various parts of Toronto and surroundings, including Mississauga South and Mississauga West which are currently held by members who are unwilling to present such petitions. They are also from Thornhill, Newmarket, North York, Downsview, Toronto, Scarborough, and so on.
They humbly petition this Parliament to implore the government to withdraw from its decision to impose a GST on books and printed matter, on matters of democracy, culture and education, and all matters pertaining to the development of a literate and productive society. These matters will be affected negatively by the GST because of the government's decision to move away from a zero rate of tax on magazines, books, newspapers, et cetera.


HERITAGE LANGUAGE FOUNDATION
Giuseppe (Joseph) Volpe: Mr. Speaker, while I am on my feet, I would like to make reference to another petition that did not conform to Standing Order 36.
Similar citizens refer to the decision on the part of the government to withdraw funds from the Heritage Languages Foundation. This decision also impacts negatively on their ability to promote democracy, culture, and education in a literate society among a very specific group of individuals in Toronto and in Canada.


GOODS AND SERVICES TAX
Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, I rise under Standing Order 36 to present three petitions signed by many concerned Canadians who are opposed to the GST being charged on magazines, books, and newspapers.
They call upon Parliament to reverse this decision. These Canadians are saying: "Don't tax reading".


Stan Kazmierczak Keyes: Mr. Speaker, I have the honour and duty, pursuant to Standing Order 36, to present to this House a petition, which has been certified correct by the clerk of petitions.
It contains the signatures of not only individuals in my riding of Hamilton West but many of them in the riding of Burlington. There are others from Guelph, Falling-brook, and Appleford.

October 10, 1990
Routine Proceedings
These petitioners are all opposed to the goods and services tax and call on this government and the other place to reject this unfair and regressive bill.


OPPOSITION TO GST
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, pursuant to Standing Order 36,1 have the honour and the privilege of presenting a petition signed by a number of constituents in the riding of Glengarry- Prescott-Russell which I have the honour to represent.
These residents live in communities like Sarsfield, Clarence Creek and several other villages in the riding.
Mr. Speaker, the hundreds of Canadians who signed these petitions and who are from communities all over my riding, call upon this government and Parliament to ensure that the GST bill is abandoned immediately.
I hope that once and for all, the Conservative Government will listen to the constructive advice given by constituents in Glengarry-Prescott-Russell.


Mr. Rod Laporte (Moose Jaw-Lake Centre):: Mr. Speaker, I rise to present two petitions today. First I have a petition from a number of residents in the city of Moose Jaw who are opposed to the goods and services tax. They say that the goods and services tax is an unfair form of taxation because of its lack of regard for taxpayers' ability to pay.
They further state that the government has not addressed the unfair taxation system currently in place which permits wealthy individuals and corporations to pay little or no federal tax, while forcing lower and middle income taxpayers to bear more of the national tax burden.
They call upon this government to reject the GST tax and put in a fair form of taxation.


CANADIAN WHEAT BOARD
Rodney Edward Laporte: I also have a petition, Mr. Speaker, once again from a number of farmers in Saskatchewan who are opposed to the withdrawal of oats from the Canadian Wheat Board. These farmers are concerned that the Wheat Board is now being weakened.
They call upon this government to re-place oats under the jurisdiction of the Canadian Wheat Board. They also call upon this government to give oats and barley the same protection as wheat now has under the Canadian Wheat Board Act, namely that it cannot be changed or removed without the consent of Parliament.


GOODS AND SERVICES TAX
Svend Johannes Robinson: Mr. Speaker, I have the honour to present a petition with names of hundreds of residents of Burnaby-Kingsway and elsewhere in British Columbia, collected by the B.C. Amateur Hockey Association and the Burnaby Minor Hockey Association, pointing out that individual amateur hockey consumers in British Columbia are not eligible for the goods and services tax credit and therefore will undoubtedly absorb this tax after every other producer receives a tax credit.
They note as well that the amateur hockey community in British Columbia, the hundreds of local community associations, the thousands of amateur hockey teams, tens of thousands of young players, the hundreds of thousands of taxpaying parents, and the millions of amateur hockey volunteers and supporters across Canada will ultimately bear the burden of this iniquitous goods and services tax.
For that reason they note as well that the impact of the GST on the amateur hockey community, the players, the parents, the fans, the coaches, the team officials, the referees, the linesmen, the volunteer executives, and the sponsors will be very serious.
For that reason, they urge the Government of Canada to withdraw the application of the GST on provincial non-profit sports organizations such as the British Columbia Amateur Hockey Association.


CANADIAN NATIONAL
Svend Johannes Robinson: Mr. Speaker, I have the honour of presenting another petition which notes that an all-party parliamentary subcommittee was created by order on April 17, 1985 to examine, inquire to and to report on all matters of CN pensions.
This subcommittee made comprehensive recommendations which have been ignored to date. Therefore these petitioners call upon Parliament to introduce legislation directing the CN railway company to comply
October 10, 1990

with all recommendations of this subcommittee as detailed by the subcommittee report forthwith.


VIA RAIL
Svend Johannes Robinson: Finally, Mr. Speaker, I have another petition, again signed by hundreds of residents of British Columbia, noting that the railway passenger service as carried on by VIA Rail is essential for many Canadians and has been a part of Canada for more than 100 years.
They object to the cuts to the VIA Rail budget and service. They call upon Parliament to maintain the existing VIA network, upgrade VIA equipment, and guarantee VIA sufficient support to carry out its mandate to provide passenger rail service in Canada.


GOODS AND SERVICES TAX
Nelson Andrew Riis: Mr. Speaker, it is an honour for me to present a petition, pursuant to Standing Order 36, on behalf of the residents of Logan Lake, Lac le Jeune, Rose Hill, Knutford, Monty Creek, Monty Lake, Westwold, Pillar Lake, Chase, Pritchard, Dallas, Valleyview, Barnettville, Red Lake, Deadman's Creek, Louis Creek, and Pinantan Lake.
All of the petitioners point out that the government's proposed goods and services tax is very unfair and that 69,000 profitable corporations pay no income tax.
They do not see any reason why they should be punished now with this cruel and brutal goods and services tax, so they are asking the government to back off.
I have another petition, Mr. Speaker. These petitioners from Kamloops, Calgary, and Ottawa point out again that the government has decided to tax magazines, books, newspapers, and children's story books. They feel that taxing children's story books is at an all-time low in terms of a government that is gouging people for taxes.
They are asking the government to come to its senses and stop taxing literature because we will be the only country in the world that does so if the government continues along this course.


Mr. Ross Harvey (Edmonton East):: Mr. Speaker, I rise again in this House, pursuant to Standing Order 36, to present a petition signed by several people from all over the place. They are petitioning Parliament to reject the
Routine Proceedings
proposal for a goods and services tax, to reform the taxation system so that there is an effective minimum tax on wealthy individuals and corporations and to cause the government to cease with the proposal which will shift the tax burden on to ordinary Canadians through a regressive consumption tax instead of through real tax reform. Wise words, Mr. Speaker, wise words.


QUESTIONS ON THE ORDER PAPER
Albert Glen Cooper: Mr. Speaker, I ask that all questions be allowed to stand.


The Acting Speaker (Mr. Paproski):: Shall all questions be allowed to stand?


Some hon. members:: Agreed.


Albert Glen Cooper: Mr. Speaker, I ask that all Notices of Motions for the Production of Papers be allowed to stand.


The Acting Speaker (Mr. Paproski):: Shall all Notices of Motions for the Production of Papers be allowed to stand?


Some hon. members:: Agreed.


Albert Glen Cooper: Mr. Speaker, there has been some concern among the members of the House for some time now regarding the special committee established by the House to pre-study Bill C-78. As a result of those discussions, I know you will find unanimous consent for the following motion:
That, notwithstanding any special order of the House, the Special Committee of this House established on Wednesday, June 27, 1990 to pre-study Bill C-78, an Act to establish a federal and environmental assessment process, have all the powers Standing Order 113(5) confers on legislative committees.

October 10, 1990
Government Orders


The Acting Speaker (Mr. Paproski):: Is there unanimous consent of the House to move the motion?


Some hon. members:: Agreed.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.


John Horton McDermid: that Bill C-84, an act respecting the privatization of the national petroleum company of Canada, be read the second time and referred to a legislative committee.
He said: Mr. Speaker, it is a great privilege for me to introduce legislation which will authorize the government to sell shares of Petro-Canada to the Canadian public.
Before I speak to the legislation itself, I would like to remind hon. members of the origins of this government's privatization program. In his 1985 budget, the Minister of Finance announced that the government would take a critical look at its Crown holdings. Those companies that no longer required government ownership to fulfil a public policy role would be considered for privatization.
Since that time, privatization has become a major component of this government's economic agenda.
Canada is not alone in realizing the value of privatization and helping to redefine the role of the state. Indeed, governments throughout the world are questioning the methods of the past.
This is no more obvious than in eastern Europe where the long awaited benefits of state ownership are proving to be too costly and too elusive. Interventionist ideology is being abandoned in favour of the simple common sense of the market system. In these countries, privatization is viewed as a necessary step in achieving this important objective.
A number of these companies are looking to Canada for advice in this field. We have responded to requests for guidance from Australia, New Zealand, Venezuela, Senegal, Tbnisia and Romania. Officials of my department have recently been in Poland and Hungary actively supporting the privatization efforts of those governments.
Canada is honoured to be of assistance to these countries in their privatization efforts. At the same time, we are mindful of the important work that we need to undertake right here at home.

Mr. Speaker, Petro-Canada is the most important integrated oil company in Canada that belongs to Canadians, and Bill C-84 intends to make sure it stays that way.
The corporation is present in all cities and towns in this country. To many Canadians, however, Petro-Canada is not just a place where they sell gas. It has demonstrated its commitment through a host of activities, ranging from fitness and amateur sport to improving the environment. The corporation has been deeply committed to promoting national pride. Remember the great Canadian rally, "Share the flame", that took place in 1988 at the same time as the Calgary Winter Games.
Petro-Canada is involved in this type of activity, and I am sure its involvement will continue, not because of any government directive but because it is appropriate for a company to express its commitment to serving Canadians.

Petro-Canada is part of a competitive and dynamic industry. If it is to remain competitive, we must ensure that the company has a reliable source of new equity. Instead of forcing the company to continue to rely on the taxpayers of Canada for that equity, privatization will give Petro-Canada direct access to an alternative source of capital, the individual investor.
Petro-Canada will benefit from this development. The company will gain a measure of financial flexibility that has always been enjoyed by its private sector counterparts and competitors.
But there are some who say that we would be giving up too much in the process.


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I would like to respond to these concerns by briefly reviewing the original mandate of the company. In simple terms, Petro-Canada was to pursue the following objectives: to increase petroleum supplies and Canadian presence in the industry; to act as the agent in any state-to-state training; and finally, to serve as the government's "window on the energy industry".
This government's decision to proceed with the privatization of Petro-Canada should be viewed in light of these original objectives.
Clearly Petro-Canada has established itself as a major integrated energy producer in Canada. Between 1975 and 1984 the company expanded its presence in both upstream and downstream activities. Today it represents 6 per cent of the exploration and development side of the industry and 19 per cent of the refining and marketing business in Canada.
But Petro-Canada is not the only thing that has changed in the energy industry in the last 15 years. The world energy markets have changed and Canada's energy policy has moved from an interventionist approach to one that relies on market forces, one that applies to all of the industry participants and not simply to one player.
The focus of that policy is to establish the conditions in which economic development of our energy reserves can occur. In Petro-Canada's case, getting on with this important work will be greatly assisted by the capital infusion made possible by privatization. That is what this bill is about; letting Petro-Canada get on with the business of doing what it does best.
The September 14 signing of the Hibernia agreement should help bring this point into sharp focus for the members of this House. As a partner in the Hibernia project, Petro-Canada will be expected to carry its fair share of the development costs. Considerable financial resources will be required by the company to take advantage of the opportunities for developing its interests in projects like Hibernia, Terra Nova and the oil sands.
This bill will give Petro-Canada a way to raise equity without placing the burden on the Canadian taxpayer.
Let me turn briefly to the company's state to state trading function. It is worth noting that Petro-Canada only entered into one such agreement in the past 14 years. As it turned out, this particular transaction proved to be an awkward arrangement for Petro-Canada to manage. Eventually, it was allowed to lapse.
Finally, we come to Petro-Canada's best known but perhaps least understood objective, to be a window on the energy industry.
I believe that it is important that Canadians realize that today we have a direct line of sight into what is going on in the oil business in Canada. We now have at our disposal the accumulated expertise and knowledge of government agencies such as the Petroleum Monitoring Agency, Canada Oil and Gas Lands Administration and the National Energy Board.
Whatever vacuum may have existed in the early 1970s has been more than filled by these agencies.
Through these and other means, the government is able to maintain a broad perspective on the workings of the Canadian oil and gas industry. Petro-Canada is one of over 2,500 companies involved in the business here in Canada. What possible benefit can be gained by tying up billions of dollars of taxpayers' resources in the ownership of Petro-Canada to get the narrow view offered by this one oil company?
We are not here to debate the validity of Petro-Canada's original mandate. This bill is not about the past. This bill is about the future, Petro-Canada's future.
Before dealing with this, however, I would like to turn our attention briefly to a matter that is very much in the present.
Many Canadians-I am sure they have expressed this to you, Mr. Speaker-are concerned about the current tensions in the Middle East. The uncertainty caused by this situation is reflected in the international energy markets. The Minister of Energy recently addressed this House on the issue and made it quite clear that existing energy policies on security of supply and emergency preparedness provide the framework for Canada's response to these developments.
There are those opposite who will argue that the government must maintain its ownership of Petro-Canada, one of several oil companies involved in the exploration and development of Canada's energy reserves, in

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order to insulate Canada from these uncertainties. Those who make that argument, I contend, ignore the reality that Canada's economy is part of the world market. They also ignore the fact that what Petro-Cana-da really needs is a reliable source of new equity.
Let me be clear on this point. Government ownership of Petro-Canada does not add one drop of oil to Canadian production.
Neither will government ownership of Petro-Canada lower the price Canadians paid at the pump.
The government has carefully considered Petro-Cana-da's original mandate in coming to this decision. While some members opposite may want to ignore reality and put their ideology ahead of common sense, this government has an obligation to do what is right for Petro-Canada and for the people of Canada.
It is not just the government that wants to see individual Canadians given the opportunity to participate directly in the ownership of this important national enterprise.
The company and its employees are also looking forward to the prospects of privatization, because it will give Petro-Canada access to capital that their current shareholder, the Government of Canada, cannot provide.
They recognize that direct ownership of Petro-Canada by individual Canadians will strengthen the company and improve its prospects for growth.
Let me now turn to the legislation. The essential purpose of the legislation is first, to give Petro-Canada, through direct public participation by individual Canadians, the financial flexibility it needs to continue the exploration and development of Canadian energy reserves. Second, it is to allow individual Canadians the opportunity to share directly in the future growth of this great Canadian enterprise.
Throughout Canada's history the federal and provincial governments have used various methods to meet the public policy objectives of the day. These measures have been tempered with a recognition of the prevailing economic realities facing our nation.
At times governments have created Crown corporations where state ownership was deemed the most appropriate means to achieve a public policy purpose. In
other circumstances governments have chosen not to intervene in the market through the direct ownership of capital assets, but rather by regulating the activities of the private sector. At other times, tax incentives have been used or grants provided to encourage desired behaviour on the part of the private sector. In still other circumstances, we have wisely decided to stay out of the way and relied on competitive market forces to produce the best result for producers and consumers.
In short, Canadians have been quite practical about the way in which governments influence the activities of the private sector. We have called for government intervention when necessary; but Canadians have usually focused on the ends more than the means.
In the case of Petro-Canada, the end product is a contribution to the health of Canada's energy industry. But as the chairman and chief executive officer of Petro-Canada has stated publicly, unless the company gains additional funds to reinforce its capital base, the company simply cannot get on with the job of developing Canada's energy reserves and marketing petroleum products to Canadians without raising its debt to unsustainable levels.
Without new equity, Petro-Canada will not be able to contribute fully to this important task. Our decision to privatize Petro-Canada is a pragmatic, common sense response that will benefit Petro-Canada and the Canadian taxpayer.
By offering Petro-Canada shares to the public, we are giving individual Canadians the opportunity to take a direct stake in this great Canadian oil company and to share in its future. Perhaps more importantly, we are giving Petro-Canada a source of new equity that simply cannot be obtained by a wholly-owned Crown corporation. I believe that a privatized Petro-Canada, with individual Canadians participating in its ownership, is destined to become an even greater source of national pride.
Our conclusion that state ownership of Petro-Canada is no longer necessary to achieve a public policy purpose is shared by many beyond the government. It is the view of Petro-Canada's own employees and management. And it is the view of the Economic Council of Canada- which the opposition has been prone to quote over the last few days-which studied the issue of public owner-
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ship in a report entitled: "Minding our own Business". It is a report which I recommend to all members.
This legislation will allow for the sale of all Petro-Can-ada shares. Petro-Canada's privatization will take place in stages, with the first offering of a size sufficient to give the company the equity required to improve its financial position.
This initial public offering will create a broad market for the company's shares, while ensuring an orderly transition from ownership by the Canadian government to ownership by the Canadian people. The net proceeds of future sales of the government shares will be paid into the Consolidated Revenue Fund.
While the government will continue to hold a majority ownership position in the company for the time being, our intention is to manage these shares as an investment and to reduce our holdings over time. The government will negotiate a shareholders' agreement with the company which will confirm our intentions concerning the management of our remaining shares.
In keeping with the successful approach to employee share ownership undertaken in a number of previous privatizations, the board of directors of Petro-Canada will develop an employee share ownership plan as part of the initial offering.
No individual, regardless of residence, will be allowed to own more than 10 per cent of the publicly available shares. In addition, the legislation limits total non-resident ownership to no more than 25 per cent of publicly available shares. By limiting the amount of cumulative foreign ownership, Petro-Canada can gain access to significant sources of new capital while ensuring that the company remains Canadian owned and Canadian controlled.
Through section 9 of the legislation, the articles of Petro-Canada will require that the headquarters remain in Calgaiy. The articles will also require that Petro-Canada continue to provide services in both official languages.
Following the successful process employed in the sale of Air Canada's shares to the public, Petro-Canada will be responsible for managing the initial public offering of shares. Only when final receipt for a prospectus is received from regulating authorities will the price of
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shares be determined. At that time the price will be negotiated between the underwriters and the board of directors based on prevailing market conditions.
I might say that we have made an offer to both our opposition critics, whom I am sure we will hear from later today, for a complete briefing. Neither of them have contacted us to set up a date for that briefing, but I want to assure them that the offer is still there and we would be pleased to provide that in-depth briefing at their convenience.

Mr. Speaker, the privatization of Petro-Canada will help strengthen the corporation's financial base by providing the funds that will help it to continue to exploit our energy resources. That is the kind of common sense approach from this government that Canadians appreciate. Economically speaking, Petro-Canada will thrive as well. Thanks to this bill, Canadians will own the corporation and have a controlling interest. It will give all Canadians a chance to participate directly in this great national enterprise.

I think that I have made it very clear that, in order to pursue its commitment to Canadians, Petro-Canada needs to have a new source of equity. Those funds can come from individual investors through privatization, or they can come from the Canadian taxpayer. The government has chosen privatization.
While Petro-Canada may have been created as a product of ideology and political expediency, its privatization is a matter of simple common sense. I therefore commend this legislation to the House and recommend its early passage into law.


Mr. Derek Lee (Scarborough-Rouge River):: Mr. Speaker, I am pleased to rise today to address the second reading of Bill C-84, an act to privatize our national petroleum corporation, Petro-Canada. Before jumping into my remarks dealing specifically with the privatization, I would like to make a couple of preliminary remarks.
The first has to do with what appears to me and several of my colleagues on this side of the House to be the unseemly haste with which the government has moved within the last several days with respect to the Petro-Canada privatization. It was introduced into the House last week and one would think there was a national

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emergency or something. Lo and behold, a few days later, it is here for second reading.
I know that Canadians spent all last summer pleading with the government to recall the House of Commons so that we could debate and discuss issues of significant national importance-I am thinking here of the Persian Gulf crisis and the events at Oka-and we could not get the government to move. And now, within one week, we have the introduction of a bill and second reading. We have not even completed the debate on the motions on Oka and the Gulf. There is something out of balance here and I do not really understand it.
Someone said to me, earlier in the week, that the government was going to run this up the flag-pole just to see how Canadians reacted, just to see if they really wanted to sell Petro-Canada, and that is possible. I do not want to be too cynical, but that may be exactly what is happening. The government simply wants Canadians to register their response and we will see in a few months, depending on how the polls turn out. That is government by poll.
In any event, we have to get on to this debate, but I do want to say that one does not just rush through a disposition of a $6.8 billion government asset. One may want to, but I do not think one does it. I do not think we want to do it and I do not think the government wants to do it, unless it is trying to hide something or it does not want to tell the whole story.
The second item to which I wanted to make reference is related and very important. That is the movement of the price of oil in world markets. Yesterday, the price moved above $40 a barrel. It has more than doubled in a two-month period. That is a big hike, a spike as they have started to call it, and it could go a lot higher.
We, on this side of the House, want to know what the government's policy and response is to this radical change in environment in the world energy market. I am not sure that we have a response, but the timing is awfully poor. The same week that this happens, we seem to be rushing through the privatization of our state oil company.
Other governments around the world, over the last few days, have made adjustments. They have got their state oil companies into gear and they have proceeded to analyse the markets. About a week ago, the United States released about five million barrels of its strategic
petroleum reserve. Why? To attempt to stabilize the market.
What is our government doing? There has been no discussion of what our government will do. There appears to be a policy vacuum, based on a premise that we leave energy policy to the marketplace, to the same people who valued our oil at $20 a barrel two months ago and $40 a barrel now. That is the foundation of our oil policy. Canadians are concerned about that and if the government does its polling it will see that. It will see how concerned Canadians in eastern Canada are about the price of home heating oil. The government will see how concerned constituents in my own riding of Scarborough-Rouge River are about simply the price of gasoline at the pumps.
Where is the government's policy on pricing for gasoline and home heating oil? Where are the government's policy objectives on security of supply, on competition in the upstream and downstream sectors in the oil business, and on enhancement of exploration and of recovery? We have not heard a lot about this in the last while. The government has been spending too much time planning to sell Petro-Canada.
These are questions that Canadians and my colleagues on this side of the House are asking, and we are not getting an answer.
Let us look at Petro-Canada. The hon. minister indicated that it would not be necessary in this debate to look at the objects of Petro-Canada. The minister wants to sell Petro-Canada. He wants to dispose of it. The government really wants to get rid of it. By saying that, the minister is indicating that he does not care what purpose Petro-Canada had because he and his government do not want anything to do with it.
I am going to refer to those objects. I am going to look over some of the goals that Petro-Canada had when it was founded and incorporated in 1975.
One of the objects was to engage in exploration for the development of hydrocarbons and other types of fuel or energy. Petro-Canada has done that, and it has done it well. It was to engage in research and development projects relating to fuel and energy resources. I do not think Petro-Canada has really executed on that. I would like to point out that Petro-Canada tried around 1980 or 1982, but when the Conservative government came to power, it simply shut down the R and D subsidiary called
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Canertech, and PetroCan was not able to continue with that object. Fair enough.
There are other objects: to import, produce, transport, distribute, refine and market hydrocarbons of all descriptions. Petro-Canada does that, and does it in spades. Another object is to produce, distribute, transport and market other fuels and energy. Last, to engage or invest in ventures or enterprises related to exploration production, importation, distribution, refining and marketing of fuel energy and related resources. That is a fine mandate. Those are the objects as set out in the original Petro-Canada Act. Petro-Canada has delivered on those.
It has, in accordance with those objects and the mandate it was initially given, fulfilled its role as a state oil company. Dozens of other countries around the world, almost every country that has a play, a stake in the oil energy business, has a state oil company. For some reason, we in Canada did not prior to 1975. Our neighbour to the south did not. We all know why it did not. It was because it had what came to be known as the seven sisters. It had a good handful, a multibillion dollar handful of multinational oil companies engaged in all sectors of the oil energy business right around the world. It did not need a state oil company. It already had its corporations active in the field. Countries such as Norway, India, Venezuela, Brazil, and the list goes on, have state oil companies that are active today in the oil market, whether the price of oil is $50 a barrel or $20 a barrel. Each of those companies is fulfilling a mandate on behalf of the citizens of the country those companies represent.
In 1975, Canada decided to create its own state oil company. It built its own corporation. It became the second largest integrated oil company in Canada, and Canada did it on its own. It was big enough to compete and work with the majors, domestically and internationally.
Why did Canada need a state oil company? Why do other countries need them? Why have they come to be? I submit that there were three principle reasons. First, to Canadianize our oil and gas sector. Second, to engage in exploration for oil and gas. Third, to provide what has
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become known as a window on the oil industry. Let us look at those three areas in a bit more detail.
Do you remember the sixties? I am not doing this for nostalgic purposes. I am doing it so we can remember a little bit how things were in the 1960s. We were being eaten alive by non-Canadian oil companies that wished to purchase, expand and be present in the Canadian market. They were gobbling up our oil and gas concerns. Do you remember Supertest? Do you remember BA or White Rose? I can see the Speaker remembers White Rose.
These former old oil companies were all absorbed by the multinational majors and disappeared. Each of them had an element of Canadian control. We got a little nervous in the 1960s and 1970s when we suddenly realized that our whole energy sector was being not so much manipulated, but worked over nicely by the multinationals. We were quickly losing our presence as Canadians.
Who are the majors who participate in Canada now, and where are their head offices? It is just not a geography lesson here. The head offices are where the dividends go, where the major board decisions are made on just what corporate enterprises are carried out and how they do it.
One of them, the biggest, is Exxon. I think their home is Fairfield, Connecticut. Shell, The Hague, The Netherlands; Mobil Oil-Chevron-Amoco have offices in Chicago, California and New York. It is fair to say that each of those corporations does not give a dam about the goals of Canadians in the energy sector. Why should they? I am not even saying they should. I do not believe they do, and I do not believe they should because their goal is to generate profits for their shareholders. That is their mandate. They do not care about security of supply in Canada. They do not care about Canadian conservation efforts or off oil efforts. Off oil efforts may in fact shrink their business. They have no reason at all to push that element of a government energy policy, if there was a government energy policy.
To recap simply, their goal is profitable-and that is not a bad word, it is a good word-operations for then-shareholders, most of whom reside outside Canada. An example of that not caring, not being interested, occurred within the last couple of years. You will recall that Texaco, one of the seven sisters, a big major, had a bit of a problem with a lawsuit in Texas, I believe. I will not mention the other oil company in case I have the name

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wrong, but the oil company claimed Texaco had reneged on a handshake. Ultimately the courts in Texas and the appeal courts in the United States found that Texaco did in fact have a deal on a handshake-lawyers beware- and as a result of that Texaco became indebted to this plaintiff in the amount of several billion dollars.
Texaco simply did not have that money sitting in the bank. Its solution, among other parts of the solution, was simply to get rid of Texaco Canada. Sell it, take the cash, pay off part of the judgment. That was fine but that sell-off, that change in ownership took into account none of the policy considerations which I maintain our government must be placing in the forefront. It had the right to do that. It had to be given the freedom to do that. It is a free player in our energy industry here.
The result of that was that some aspects of that disposition and sale did not fit within our competition framework. Ultimately that disposition went to our competition tribunal. The competition tribunal decided that piece of Texaco in eastern Canada could not be sold to Imperial Oil, which is a part of Exxon, and it had to be spun off into another corporate entity, another purchaser. That ultimately done, there were over 600 commercial units in this sell-off, and it was placed in the hands of another corporation in Canada.
Exploration. Why must we pay attention to our frontier oil exploration? Projections are now that within about a decade or a little more, Canada will become a net importer of light crude oil. Light crude is the basis of our gasoline industry, the cheapest basis of our gasoline industry. It should make some people around here very uncomfortable. We have a 10, 11 or 12-year clock running.
As an example, the Japan National Oil Company has and continues to invest billions of dollars all over the world for the exclusive purpose of securing a supply of oil for Japan that is Japan controlled. What does this government plan to do for Canada? What is its security of supply plan for Canada over the next 10 years? How are we going to replace the reserves which will be consumed over the next decade? Many of those reserves
will become tied up in mandatory energy transfers and sales to consumers and customers in the United States under the free trade agreement. I think the figure now used, if you do the calculations under the free trade agreement, whereby we would continue to be obligated to provide about 30 per cent of our production to the-


Ross Harvey: Forty.


Derek Vincent Lee: Someone says forty. We will do a calculation a little later but it is a big chunk, 30 per cent to United States customers. That figure runs completely contrary to any concept of security of supply for Canadians. That policy goal is gone, at least it is 30 per cent gone. If we do not get busy with an energy policy for Canada, it is going to be gone even more. I just want to make sure that everyone here recognizes how vital oil is to our economy, our economy as one of the industrialized countries.
Third, having looked at Canadianization and exploration, this concept of the window on the industry. Why did we want it? There were a lot of reasons. We were not just nosy, we were not just curious, we were not just coming of age in wanting to know how people traded in oil and things like that. What we needed was to accumulate and ensure the presence of know-how in the trading of oil and oil commodity on the world market because we could see that it was a world market. We needed that know-how right here in Canada, not in government necessarily. We wanted to place it in our national oil company. A lot of other companies rely on their state oil company in doing that, and we wanted it here in Canada. That expertise is here, but it is not Canadian controlled, it is controlled in the head offices I referred to earlier, and they do not care about our Canadian objectives.
The second reason for the window was that we needed a view on price competition. I know the government will come to recognize in the next few weeks how short the fuse of Canadians is on the issue of gasoline prices. That will turn up in the polls as sure as I am standing here. The government will then, I am sure, want to react and at least let Canadians know it is alive and it has a policy.
The third reason was that we wanted to monitor progress and development in the exploration field, particularly in the frontier, exploration for those oil
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reserves that we needed so badly to ensure that Canada stayed as an energy self-sufficient country.
I want to make sure that no one has any doubt about the importance of the price of oil here. It may be just my own personal view, but it is my view that the price of oil is the reason that the Canadian dollar has remained as high as it has on world money markets over the last few weeks. It is my view that the world views Canada as being energy sufficient at this time, and that as a result our Canadian dollar is able to more than hold its own in the world market.
How did Canada get into this oil sufficient status? One of the reasons is the accomplishments of the Canadian oil industry. We cannot underestimate its importance as a driving force in ensuring that we have a supply of reasonably priced oil for Canada.
There were other reasons for that condition. One of them was the off oil programs of the late seventies and early eighties. We moved consumers in Canada from oil to natural gas and from oil to electricity. We all paid for that. Sometimes it was simply good consumer choices, but we moved consumers away from oil. Therefore, we now consume less oil than we would have otherwise done.
We offered exploration incentives, and we expanded the market for western oil and gas farther east into Montreal. I have to point out that Petro-Canada played an integral role in every one of those reasons. We would not be here now if it were not for that. Maybe there could have been another vehicle, but it was not another vehicle. It was Petro-Canada. It did not do it by itself, but it was a player. It played a role.
We would not be in Hibernia now if it were not for Petro-Canada. Read me the story. Tell me how it developed. Tell me how Hibernia developed. Petro-Canada was there right from the beginning.
I want to make a comment about a statement made in an energy discussion paper that was published recently on the part of the government. It states that market forces should be allowed to allocate resources and determine prices for energy. That sounds like an economic class discussion, but it assumes that the marketplace is in equilibrium. That is the question that I really want to raise.
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Do we ever have a market that is in equilibrium? Do we ever have a market in oil and in energy that does not have some form of intervention? I am going to suggest that it is pretty rare that we do not. We have intervened physically in the Middle East, and we have reasons which we state diplomatically for doing so.
One of the big reasons we are there is to protect the security and stability of the world oil supply which is based, to a large measure, in the Saudi Arabian peninsula. We have state oil companies intervening in the marketplace all over the world right now or the OPEC cartel. That is what it is. It is a cartel. It fixes prices. It makes the market. It does not throw a coin up in the air and wait for it to fall. It fixes a price. That is not marketplace. That is a cartel at work.
Clearly in our own country we were prepared to intervene in a Texaco matter in relation to price competition. It was an oligopoly when Texaco sold to Imperial, which sold off those eastern Canadian assets.
I submit that any policy that simply turns over the energy well-being of this country to the marketplace is blind and is unaware of what Canadians want and what they need. The market to be sure is the driving force. We cannot operate against it, counter to it, but someone has to be in charge for Canadians. Some has to monitor and fine tune the system, and Petro-Canada was our vehicle to accomplish this.
A word about Canadianization. The figures that have historically been generated in this regard show that after Canada decided that it wanted to have 50 per cent control in the Canadian oil and gas sector, we moved from a figure of 26.1 per cent ownership in 1980, and not control, to a figure of 48.2 per cent in 1985. These were five or six good years of Canadianization.
Then,the Conservative government was elected in 1984, and after 1985 the figure falls markedly to where in 1989 we are back-not all the way back-to 44.9 per cent. There was a little blip there because when Imperial took over Texaco, Imperial was partly Canadian owned and therefore the numbers went up just a bit.
However we are falling back on that objective. The government has obviously abandoned that objective. Canadianization is no part of the government's goal here, but I think it is part of the goal of Canadians.

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What would the government's position be now, I wonder and I ask, if we were back now in 1980 and the figure was 26 per cent? What would the governments position be? What would Canadians think?


John Horton McDermid: That's the trouble with the Liberals. They are living back in the eighties. We are in the nineties.


Derek Vincent Lee: Tell me where we would be if we only owned 20 per cent to 25 per cent of our oil and gas sector. What would Canadians be thinking? What would they want their government to be doing?
I say shame for abandoning that goal. It does not matter to this government. It does not care. I submit that we want to be and we want to be seen as masters in our own energy house.
A bill in relation to the Hibernia development has just passed through this House. It is a big deal, an offshore development. It is the biggest oil development we have ever undertaken. Newfoundlanders think it is big. Quebecers think is it big. I think it is big; I know it is. A lot of people are very happy about the prospects for Hibernia which we are developing, but who is "we"?
It breaks down as follows, very simply: Mobil Oil and Chevron are participating to the extent of 50 per cent, and Petro-Canada and Gulf Resources are each participating to the extent of 50 per cent, 25 per cent each. Gulf Resources is Canadian controlled and Petro-Canada is Canadian controlled, but where would we be now with Hibernia if Petro-Canada were not there?
Would we be so generous as to offer grants and incentives for a project which was foreign controlled and where every barrel of oil product produced was targeted to go to the U.S.A.? Would we? I submit that we would not.


John Horton McDermid: We can regulate that.


Derek Vincent Lee: We would be giving away the store.


John Horton McDermid: Don't be silly. We can regulate that.


Derek Vincent Lee: I do not think we would be, but Petro-Canada is there now because Canadians put it there 15 years ago. That is why Petro-Canada is there now, and thank goodness it is. Until this government generates a national energy policy, I submit that is exactly where Petro-Canada should stay.
I will say a few words about Canadian unity and nation building. Remember those, my friends opposite. We are still building a country here. Sometimes we do take a lot for granted. We have a lot of freedoms. We have a lot of wealth, some of which is being redistributed and some of which is not. We have a lot of food. We have a lot of government. Most of it works well, but not all of it.


An hon. member:: Too much government.


Derek Vincent Lee: I think'we do have too much government. I accept that comment, but what we have is a lot more than a lot of others in this world.
Petro-Canada may not be in the category or class of a venerable old institution. I am quite sure it is not but, like many other Canadian creations, we had to get out there and build it. We had to get out there and create it. We paid for it and we developed it.


John Horton McDermid: You bought it. You didn't develop it.


Derek Vincent Lee: It is a manifestation of this country's presence in that commercial sector. It is a manifestation of our nationhood on Pelee Island and up in the Arctic. Maybe it is not perfect, but it is ours and we want to keep it. We are proud of it too. Maybe the government should be thinking more carefully about selling off our heritage like this. Maybe the government is starting to look a bit too much like a bunch of neo-Conservative carpetbaggers: just sell it because we do not care about it any more, just get rid of it.
Turning to financing, there is some complaint and argument that Petro-Canada is unable to finance itself and is using debt. There are three sources at least of financing commercial ventures. One is the cash flow, and that is why, as I understand it, Petro-Canada acquired its downstream assets 10 years ago and 5 years ago. It acquired a lot. The downstream assets, the marketing and the cash flow, are used in part to finance the other exploration and development aspects of a vertically integrated oil company. That is why it is there. The cash flow is there, and Petro-Canada has been using that cash flow for that purpose. There is no argument there, but it isn't quite enough according to Petro-Canada.
The other two means are equity and debt. At the moment there is a kind of equity in there put in by the government, preferred shares, but Petro-Canada has really done most of its financing with debt. There is a big debt. It is $1.9 billion. Down on Bay Street that is not a very good mix. There is not a very good mix there at all. I
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can understand why by the textbook that would cause some people some problems.
I do not accept the premise that a government Crown corporation is incapable of financing its ventures through debt. Why don't I accept debt? It is because I can see others that do.
Let us take a look at Hydro Quebec. Hydro Quebec has total assets of $33,952 billion or $34 billion. Its debt is $28 billion. No equity, just debt. The entire venture of Hydro Quebec, a huge undertaking, a vertically integrated monopoly, is financed by $28 billion in debt.
Ontario Hydro has total assets of $36.27 billion and a debt of $26.8 billion. That is a lot of debt, but it works. That is how we have financed in Ontario the infrastructure, the marketing of hydroelectricity, nuclear, and all other sources.
I do not accept the premise that debt financing does not work, because obviously it does for these two provincial Crown corporations.
Now I want to talk about Petro-Canada, a national Crown corporation which is having problems, it is said, with $1.9 billion in financing. I just do not accept that it cannot get on with its business if the government wanted it to do so. I do not see a difficulty and I am sure there is not one.
To begin to wrap up, I want to indicate that Petro-Canada, our national oil company, had a mandate when it was founded. In 1984 the government removed and tossed into the garbage that mandate and said: "You will have no public policy function". Now the government comes to the people in the House and says: "Petro-Canada has no public policy mandate, therefore we should sell it". The reason Petro-Canada does not have a mandate is because the government took it away. If the government had not taken it away, it would not be able to say that Petro-Canada is not fulfilling any public policy mandate. It is like a self-fulfilling prophecy.
We cannot afford to abandon our energy policy to the marketplace exclusively. We cannot do that. We knew it in 1970. We knew it in 1980. We know it now. Our energy policy must be clearly articulated by this government,
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and it is not. Until it is, we cannot dump the only vehicle we have to execute certain types of national energy policies, and that is Petro-Canada. We cannot because once the privatization is complete, it is for all practical purposes irreversible. I say we should have a policy and Petro-Canada should be a part of it.
Petro-Canada must be made a part of our country's national energy policies. That is why Petro-Canada must remain Canadian, must remain a wholly-controlled Crown corporation.
Mr. Speaker, I would like to move a motion as follows:
That the motion be amended by deleting all of the words after the
word "That" and by substituting the following:
This House oppose in principle Bill C-84, an act respecting the privatization of the national petroleum company of Canada, because it considers it irresponsible to abandon public sector involvement in the Canadian petroleum industry in the absence of a coherent Canadian federal government energy policy at a time of increasing international uncertainty with regard to petroleum supply.


The Acting Speaker (Mr. Paproski):: I will have a look at the amendment. Carry on with debate.


Ross Harvey: Mr. Speaker, before getting into the main text of my remarks here this afternoon, I would like to say that I too look forward to seeing a copy of the amendment of the hon. member. It is my guess that should the amendment be ruled in order, it will be our intention to beef it up just a bit. Unfortunately, I will be unable to do that myself at the conclusion of my remarks because, of course, the amendment has just been moved. However, you can rest assured, Mr. Speaker, that if the amendment is deemed to be in order, it shall be improved upon.
Second, I should like to note that in his remarks this afternoon, the minister said that invitations for briefings had been extended by his office to the offices of the pertinent critics. I took the opportunity of checking back with the staff in my office who can't recall and do not note having received any such invitation. I checked-


John Horton McDermid: Mr. Nystrom was the critic at the time.


Ross Harvey: I was wondering about that. I checked with Mr. Nystrom's office as well and was told that Mr. Nystrom's assistant attended a briefing on

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privatization a couple of weeks ago during which Petro-Canada was not even addressed.


John Horton McDermid: She was invited and I can give you her name.


Ross Harvey: Her name? His name was Norm.
In any event, I wish to turn now to the pertinent question before us, which is the second reading of the bill for Petro-Canada's privatization.
For the first time in more than a decade Canadians are experiencing an oil price shock. I should note that about six years ago Albertans started experiencing an oil price shock, but it was a different kind of shock. It was a collapse in the price which, in fact, cost somewhere between 25,000 and 40,000 Albertans their jobs. As that was the other kind of price shock, the price shock of a declining price, the rest of the country did not notice much.
Now we are experiencing the generally accepted definition kind of oil price shock, that is, prices are rising rapidly and now exceed 60 cents a litre virtually everywhere. Furthermore, most observers expect they will keep on rising. Many Canadians fear, not without cause, that unscrupulous multinational energy companies will take advantage of the current situation to reap windfall profits at the expense of Canadian consumers.
As well, it is now public knowledge that this House's own Standing Committee on Environment is about to present a report recommending a 20 per cent cutback in CO2 emissions from their 1988 level by the year 2005.
I know of no one who believes such a target can be met solely through the gentle workings of the market. Virtually every sane person is of the opinion that to achieve such an essential goal, government intervention is required.
And what is the government's response in the face of these two major new elements in Canadian society?
This Conservative government is going to privatize Petro-Canada. What is more, it is going to sell it off at a huge loss to the Canadian taxpayer and it is going to increase foreign ownership of the Canadian energy industry in the bargain.


John Horton McDermid: Wrong.


Ross Harvey: Far from retaining a public enterprise that can ensure Canadians are treated fairly in the energy marketplace, the government is going to toss our one remaining Canadian major to the same rich and powerful few who control the rest of the industry.
Furthermore, it is going to throw away what is potentially one of our best vehicles for positive environmental action for moving Canada away from being one of the world's most irresponsible wasters of energy toward a more environmentally responsible energy future.
Welcome to the 1990s, Mr. Speaker.
Why should Canadians fight the privatization of Petro-Canada? What does it mean to Canadians?
Let me put the matter this way. During the 1973 oil crisis, New Democrats argued long and hard that the country needed a national oil company to serve the interests of Canadians. In effect, we argued that since there was no bus service, in other words there was no public utility supplying gasoline to Canadians, and taxis were too expensive, in other words relying on other mostly foreign concerns to meet our needs was getting very costly, we needed to buy a car of our own, our own oil company.
Faced with widespread concern for energy security during the Middle East oil crisis of the early 1970s, the Liberals were forced to agree. The country got its car, Petro-Canada. Unfortunately the Liberals, manipulated nationalist sentiment and added shiny chrome and paint and a lot of expensive gadgets.
But the real tragedy of the Liberal government was that it could seldom muster the courage to take this new car out on to the road and when it did, it was quite clear that it did not really know where to drive it.
Then came the Mulroney Conservatives. They are blinded by their marketplace religion, the public interest be damned. They pathetically place virtually all of their faith in the magical goodwill of huge powerful American oil companies, most of which have a documented history of gouging Canadians.
The Conservatives have always hated Petro-Canada and their policy now is the equivalent of yanking open the hood on that car, slashing the hoses, snapping off the spark plugs, and banging on the engine with a sledge hammer.
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With the introduction of this bill, the Conservatives are in essence telling Canadians that the car we all spent so much to buy does not run very well, that it is worthless, that we really never needed it anyway, and will never need it again.
We, the New Democrats reject this utterly, totally. We believe, and we think that Canadians believe, that it is about time we stopped destroying the car we spent so much money to buy. It is about time we fixed it up, chartered a course to a sensible energy future, and hit the road. Obviously the government disagrees. It would prefer Petro-Canada to hit the skids.
But before examining the government's intentions as embodied in Bill C-84, it would be useful to remember how we got to our current situation.
It was less than 20 years ago that Canada experienced the situation to which the government now proposes to return us. There was no national public oil company. It was 1973. In the wake of the Yom Kippur war the Organization of Petroleum Exporting Countries, OPEC, arose out of the Arab countries' bitter determination no longer to be the pawns of the western oil oligopoly, no longer to be the favoured but powerless handmaids of the seven sisters of oil.
Overnight the world price of oil reached heights previously unimagined. Line-ups appeared at gas stations. Gas guzzlers were put up on blocks in the family backyard, and the multinational oil corporations, which in those days controlled most of the fields in the western sedimentary basin, could not believe their good fortune.
Indeed, the Alberta provincial government actually increased royalties on oil and gas, something that has not happened since for more than a decade. Amazing profits were made, and gas consumers felt cheated, isolated, and preyed upon.
Everyone knew the oil companies were making a killing but nobody outside the business knew how, or how much. Nobody knew how long the remaining oil would last because overnight the industry's official tales of endless surplus had become grim warnings of impending shortage. Even the federal government was caught, necessarily relying on the industry for the information with which it tried to devise policy to meet the new realities. Something had to give.
In debates in this House in 1973 even the Conservatives were demanding public intervention to protect the public interest. So with a national oil company as part of the price for continued New Democrat support of the minority Liberal government, the legislation was drawn up.
That legislation was introduced in 1974 shortly before that year's general election. It was part of the program promised to Canadians by the Liberals in that election and they got their majority back.
Petro-Canada was bom. Still the Liberals' three immediate aims were anything but radical. First, they wanted to speed exploration for new energy sources in Canada's frontiers, the so-called Canada Lands. This was seen as crucial to ensure the availability of adequate domestic supplies.
Second, the Liberals wanted to improve security of oil imports to eastern Canada by cutting out, or at least providing an alternative to, the multinationals that acted as intermediaries, dealing instead with oil exporting countries one-on-one, state-to-state.
Third, they wanted to hold on to power and to do that they had to be seen as doing something, anything, about the oil crisis.
They were not actually going to upset the existing nature of the industry, especially not after they won back their majority in 1974.
Just in case there was any residual fear in this regard among the major oil companies, Maurice Strong, Petro-Canada's first chairman and president, smoothed their ruffled feathers. He pointed out this new creature would even be a blessing in disguise, "The time will come", he said, "when it will be recognized that the private petroleum industry's survival in a large measure has been ensured by Petro-Canada's existence-For one thing our presence relieves the pressures for the nationalization of the whole industry".
This was gilding the lily perhaps, but the message was clear enough; Petro-Canada would not be treading too heavily on the toes of big oil. Instead it would concentrate its efforts, initially at least, on the upstream sector and leave the lucrative refining and marketing downstream sector to the multinationals.

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In 1976, Petro-Canada embarked on an aggressive exploration campaign in the Arctic and off the east coast. Prices would keep rising, it was thought, and focusing on these Canada Lands would mean that the benefits of major new discoveries would flow directly to Petro-Canada and thus to the federal treasury.
Trudeau's Liberals were less than contrite when Albertans pointed out that this focus on the frontier siphoned activity and jobs away from the western sedimentary basin, a situation radically worsened by the early 1980s National Energy Program.
However, frontier exploration was risky and frightfully expensive. The fledgling company's resulting dependence on the public purse generated few defenders and a great deal of sniping, particularly from opposition Conservatives. This was not Trudeau's idea of fun and it was not Petro-Canada management's idea of security. The solution to both problems was to allow the company to finance some of its own expenses and the way to do that was to get into the profitable refining and marketing downstream sector.
In 1978, Petro-Canada moved to take over Pacific Petroleum. Not to put too fine a point on matters, the Conservatives went wild. Liquidate it, demanded Joe Clark. Sell it. Give it away. Anything. Just get rid of it.
And less than a year later, the Conservatives got their chance, their first chance. But although they won the 1979 federal election, Petro-Canada proved more popular, or at least more long-lived, than did Joe Clark's prime ministership. Petro-Canada survived, the mathematically-impaired Clark government did not.
The Liberals returned to power with the National Energy Program and a whack of new cash for Petro-Canada, much of it funnelled through special grants paid for by new energy taxes.
That the Liberals had won the election in large part because of their loud and protracted campaign against such taxes, as proposed by the Tories in their ill-fated "short-term pain for long-term gain" budget was deemed no impediment, merely an inconvenient quirk of history best quickly forgotten.
Seeing what appeared to be a blank cheque, as well as the Liberals' political need for Petro-Canada gas stations in eastern Canada, the company gobbled up Petro-Fina in the name of Canadianization.
How much did it cost? Only Petro-Canada and a few Cabinet insiders know. The Canadian public and the Auditor General never found out.
Sharp criticism of the PetroFina deal and tough times in the oil patch followed. Petro-Canada responded by hunkering down, cutting costs and staff, and concentrating on its bottom line.
By the time the Mulroney Conservatives came to power in 1984, despite its effective use of nationalistic advertising slogans like "It's Ours", "Canada First", and "Pump Your Money Back Into Canada", Petro-Canada itself had essentially blunted its public policy role. Henceforth, under the resurgent Tory regime, the company would operate under a new commercial mandate. As the company's 1984 annual report put it: "Petro-Canada is not to be perceived in the future as an instrument in the pursuit of the government's policy objectives." In short, the company would now operate like any other big integrated oil company, and public policy be damned.
In a similar vein, the Mulroney government moved quickly to deregulate the energy industry generally. Price and export controls were removed. The National Energy Board was neutered. The 1988 free trade agreement created an integrated continental energy market utterly free of significant government intervention.
Then, long after memories of energy crisis rip-offs had faded to a hazy sepia, at least until the new Middle East crisis and attendant oil price hikes starting this past August, and with their second mandate safely tucked into the ballot box, the Conservatives struck. Canada's national oil company was off to market-not as the buyer, but as a nice fat sale item.
The axe fell as part of the finance minister's budget speech on February 20 of this year. Petro-Canada was to be privatized.
Interestingly, February 20 is known by some as Hoodie Hoo Day. It is a day when all the residents of the Northern Hemisphere are to go outdoors at high noon and yell: "Hoodie hoo," at the top of their lungs. The idea is that by so doing the Hoodie hoo-ers will chase away winter and all the cold and nasty things associated with winter. Obviously, there were far too few participants in Canada this last year.
Speaking the next day, February 21, in the House of Commons, Minister of State for Privatization, the hon. John McDermid, gave the government's rough idea of
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why and how it was to be done. He said: "It-", that is to say Petro-Canada, "-must improve its debt position to more manageable levels and it must have the financial flexibility to compete alongside its private sector counterparts." He continued: "Petro-Canada needs equity capital and financial freedom."
As well, like Robert Frost's sledder beside the snowy woods, the government had promises to keep. The minister said: "In last April's Speech from the Throne, the government announced that it intended, and I quote, 'to further privatize those Crown corporations which no longer serve a public policy role'".
This is all highly reminiscent of the remarks delivered today in opening the debate on second reading. I have underscored some, and just going through them briefly we find the following, for example. On the second page of the minister's speech notes we find: "If they are to remain competitive, we must ensure that the company has a reliable source of new equity." Further down on the same page it states: "Getting on with this important work will be greatly assisted by the capital infusion made possible by privatization." On page 3, we find: "The bill will give Petro-Canada a way to raise equity without placing a burden on the Canadian taxpayer."
On page 4, we find: "What Petro-Canada really needs is a reliable source of new equity," and "It will give Petro-Canada access to capital that their current shareholder, the Government of Canada, cannot provide," et cetera.
It carries on in light vein through eight pages of rhetoric, the burden being at every step of the way as the minister said on February 21: "In fact, only blind devotion to state enterprise would be a reason for denying the company, and its employees, the chance it wants and has earned to be Canada's independent, world-class integrated oil corporation and a source of national pride."
This prideful striding onto the stage of world classiness was to be accomplished within certain guidelines. As the minister said: "Legislation will allow for the sale of all Petro-Canada shares," but not all at once. Again, I quote the minister: "Once legislation is passed, and appropriate financial and regulatory steps are taken, and with market conditions permitting, the board of directors
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of Petro-Canada will be asked initially to offer a treasury issue of about 15 per cent of the company."
I note with some interest that fairly clear statement: "The board of directors of Petro-Canada will be asked initially to offer a treasury issue of about 15 per cent of the company." This itself has faded to a rather hazy sepia to be replaced today with the note that: "The first offering will be of a size sufficient to give the company the equity required to improve its financial position." Mush, Mr. Speaker, gooey mush.
In the absence facts noting otherwise, I will stick with the February estimate of a treasury issue of about 15 per cent of the company. How things will proceed after that initial offering was then, and remains, even with the benefit of the legislation before us, still murky, every bit as murky as the murky quote just referred to in the minister's speech today.
Equally murky were the government's intentions for the estimated $500 million to $700 million expected from the sale of that 15 per cent share. However, in what some in this House apparently deem to be a brilliant marketing move and cited in The Ottawa Citizen on February 21, 1990, unnamed finance department denizens speculated that it would all be ploughed back into the company.
Indeed, this now seems certain to be the case, this being the background, the backdrop, the point behind the oft-repeated citations of a need for equity capital being the reason for the privatization. The argument is that privatization and the ploughing back into the company of the results of that initial 15 per cent offering is the only way the newly privatized Petro-Canada can get the capital it needs.
Imagine, Mr. Speaker. Such a deal! Mr. Capitalist could buy shares knowing that the Tories would give him back the money he paid for the shares in the form of equity in the company of which he had just become a shareholder. Equity and assets built up in a Crown corporation on behalf of all Canadians would be tom out of public hands and given away. And these are the guys known for their shrewd management of the public purse?

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But I digress Bill C-84 does set out some promised conditions, although some ambiguous wording leaves the final effect somewhat in doubt. There will be more on this in committee study.
No one will be permitted to hold more than 10 per cent of the privately-held shares and there will be a 25 per cent cap on the aggregate foreign ownership of shares.
There will be "an employee share ownership program as part of the initial offering," as the minister put it. He also said: "The company will continue to adhere to the Employment Equity Act and employees of the company can be assured that Petro-Canada's policies governing salaries, pensions, benefits, relationships with the unionized workforce, and official languages will be continued." I was again quoting from the minister's remarks of February 21.
Just in case anybody missed the historic nature of the event, the minister concluded his remarks on that day with a rhetorical flourish. "Petro-Canada's time has come," he said, eyes no doubt misting, "and it has earned the right to be an independent, Canadian-owned, Canadian-controlled national corporation without the state in the middle."
Yes, well, perhaps. Yet, it is obvious that there is more here than meets the visored accountant's eye.
The main rationale for privatization seems clear. "The company needs capital," thunder the Tory proponents, company honchos, and stock market touts. By the way-


The Acting Speaker (Mr. Paproski):: Order. I am sorry that I will have to interrupt the hon. member. I would like to say that the Chair will accept the motion by Mr. Lee, seconded by Mr. Pagtakhan:
That the motion be amended by deleting all the words after the
word "That" and by substituting the following:
"this House oppose in principle Bill C-84, an act respecting the privatization of the National Petroleum Company of Canada, because it considers it irresponsible to abandon public sector involvement in the Canadian petroleum industry in the absence of a coherent Canadian federal government energy policy at a time of increasing international uncertainty with regard to petroleum supply."
I thank the member for Edmonton East. He may cany on with debate.


Ross Harvey: Starting with its equity financing of Petro-Canada's first major acquisition, the purchase of the assets of Atlantic-Richfield Canada for $342.4 million in 1976, the Canadian government built up a total equity of about $4 billion in the company. Last year this equity figure was slashed to $2.8 billion by a convenient change in bookkeeping methodology. Along the way the company has also incurred long-term debt of about $1.2 billion, less than half of which matures before 2000, and other debt of about another $1 billion.
The company declared $8.6 billion in total assets in 1988, but, in the same bookkeeping adjustment which resulted in that 30 per cent decrease in government equity I just noted, the adjusted figure for total assets- adjusted in preparation for privatization-was reduced in 1989 to $6.8 billion.
So, the question which confronts us is this: Is Petro-Canada really lumbered with debt to the point where it cannot borrow any more? The answer is no. In fact, Petro-Canada's long-term debt of $1.2 billion compares favourably with that of other such industry notables as Imperial Oil with a long-term debt of $3.8 billion; TransCanada PipeLines Limited with a long-term debt of $2.2 billion; and Nova Corporation of Alberta with a long-term debt of $3.6 billion.
More to the point, Petro-Canada's long-term debt to equity ratio at 1:2.2 is well within industry standards. Many industry players have ratios similar to or worse than Petro-Canada's. Among them are: Canadian Occidental Petroleum Limited at 1:3.3; Alberta Energy Company Limited at 1:1.5; Norcen Energy Resources at 1:1.2; Total Petroleum (North American) Limited at 1:2.9; and Pan-Canadian Petroleum Limited at 1:4.1. They remain active participants in the industry and all enjoy longterm debt to equity ratios comparable to or worse than Petro-Canada's. Indeed, the two oldest, best-established multinationals in Canada, Shell Canada and Imperial Oil, have long-term debt to equity ratios of 1:3.4, which is only marginally better than Petro-Canada, and 1:1.9, which is considerably worse, respectively.
In an attempt to forestall needless quibbling from across the way, let me note that the entire array of bookkeeping methods are present in these examples. The choice of individual methods seems more a matter of convenience and advantage, than determined illumination in the best of instances, regardless, Mr. Speaker.
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Given these figures proving Petro-Canada's relative fiscal health, it was no real surprise when last December the well known New York rating agency, Moody's Investor Service Incorporated, gave Petro-Canada a triple A rating on about $400 million of newly-filed debt securities. As The Toronto Star observed in its report, "Such a rating, a shade lower than the highest designation for debts of the federal government, suggests strong borrowing status." Quite.
It would seem by all standards that Petro-Canada could comfortably assume a great deal more debt than it has now and still remain a healthy and vigorous player in the Canadian petroleum industry. In fact, as the Moody's rating shows, while in the public sector the company can support greater debt, because of lower service costs occasioned by its status as a federal treasury-backed Crown corporation, than it could as a private sector player.
Okay. But what about the other side of the capitalization coin? What about all that money to be made for Petro-Canada from a huge stock issue? Sorry, unless the federal government is willing simply to give away money to the company by continuing to plough the proceeds of share sales back into Petro-Canada as the shares are sold, Petro-Canada will not get that money at all. The taxpayers of Canada, depending on whose estimate you want to accept, have ploughed between $6 billion and $10 billion into Petro-Canada during its life. The balance sheet says we have only $2.8 billion worth of equity in the company from all that investing. But God help the government that tries to return from the market with significantly less than at least the company's net worth of between $4 billion and $4.5 billion.
As we know, the government is apparently planning to give back to the company the proceeds of the first offering, again that 15 per cent of the total, between $500 million and $700 million. Presumably, Mr. Speaker, it would have serious political difficulty pursuing such wonderful generosity further, especially at a time when it is cutting back on health care, education, and social services, because of the fiscal holy crusade against the deficit. So that leaves the energy equity markets having to absorb a subsequent issue of $3 billion to $3.5 billion, all of which has to go back to the federal treasury before Petro-Canada can haul in so much as one more loonie.

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Let us put that into perspective. During the period 1983 to 1988, new Canadian energy issues averaged an annual total of about $2 billion. That is all energy issues combined, Mr. Speaker, which is probably what Mr. James Doak, an oil analyst with First Marathon Securities Limited, was thinking of when he responded to the Petro-Canada news last winter by observing "the privatization will compete with every other company trying to tap the equity market". The immediate implication? "They probably won't be able to get a good price for the shares," said Doak.
Of course, the government knows all this. That is why the Minister of Finance said in the House of Commons on February 23, 1990, as reported at page 8747 of Hansard, and I quote:
- the sale of the shares of Petro-Canada will take place over a period of time, depending on market circumstances, depending on the attractiveness of the market to the company and to ourselves and of selling into that market.
The government is still saying more less the same thing: we are going to sell it, but God alone knows when.
Again, I must stand and wonder. These people are generally credited, by those ostensibly in the know, with having, if nothing else, the virtue of good hard-nosed business sense. It is amazing, and no small cause for deep-seated worry over the fate of our major business and financial institutions, because most of them are piloted by people who apparently believe this.
In sum then, dumping Petro-Canada onto the energy equity market, especially at a time when Imperial Oil will be struggling mightily with the capital task of swallowing Texaco Canada, seems to be just about the worst way one could go about raising the further money the company needs.
It will be cumbersome, necessarily long-term, and unavoidably entail a raid of some scale on the public purse.
There is plenty of corporate elbow room for further debt financing anyway.
But, having noted all this, we must eventually come face to face with the real question posed to this House and to all Canada by Bill C-84: Is there a reason to keep Petro-Canada in public hands? Does the company have any public role to play?
It is patently obvious that Petro-Canada is not now playing an active public policy role. It is equally obvious that the government can conceive of no such role for it.
The hon. minister set out reasons why not in his February 21 statement. He summarized Petro-Canada's original mandate as: "to engage in state-to-state trading, to give the government a window on the industry and to contribute to the energy security of Canada". He then dismissed each goal in turn. Quoting the minister again, as reported at page 8619 of Hansard of February 21,1990:
-in the past 14 years, Petro-Canada entered into only one state-to-state deal and it is very evident that these arrangements are no longer an important component in today's world oil market.
As for the window on the industry issue, the government understands and has available to it all the information it requires in order to provide safe and secure energy to Canadians today and into the future.
And finally, if one is concerned about Canada's energy security, they would naturally support a decision which would allow Petro-Canada to participate and develop the reserves that have been discovered in cooperation with other private sector partners.
I know it will delight those across the way to listen to me say that it is at least arguable that his first two points have some merit. There is at present no pressing need for a state-to-state trading vehicle and industry information collection mechanisms available to the government, through the Department of Energy, Mines and Resources, the National Energy Board, the petroleum monitoring agency and others, can be made adequate for review and policy formulation purposes in normal times of modest price fluctuations such as those obtaining when the minister made those remarks.
I would note, parenthetically, that the contention that a Tory government would actually make use of such information, actively to provide safe and secure energy for Canadians is an arguable, some would say laughable, contention, but the potential is there at least in normal times.
The third point, that privatization will allow Petro-Canada better to participate with its private-sector partners is simply rhetorical market-worship voodoo. There is no evidence to indicate Petro-Canada is having any difficulty participating right now. Quite the contrary. One of its biggest problems is its propensity as a Crown corporation to participate entirely too much.
More to the point, as we contemplate Bill C-84, are those mandates Petro-Canada could and, in our view, should be assuming? We believe that there are several legitimate, even crucial, public policy roles that any sane government in a sparsely populated northern country would want a national energy company to play. First, the maintenance and-what the heck-increase of Canadian
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ownership and control in the oil and gas industry remains a vital policy goal.
With the buy-up of Texaco Canada by Imperial Esso, there are now just three major integrated oil companies operating across Canada: Imperial, Petro-Canada and Shell. Only Petro-Canada is not foreign controlled.
Under the terms of Bill C-84, Petro-Canada privatization cannot help but result in a further increase in foreign ownership which, after declining in the first half of the 1980s, enjoyed a Tory sanctioned renaissance in the second half. One-quarter of the company will be offered up to foreign ownership.
There is another more chilling factor in this vein. The free trade agreement makes it clear in article 1602 that Canadians could never claw back that 25 per cent share of Petro-Canada once it was allowed to fall into foreign hands. That 25 per cent ceiling on foreign ownership can never, ever be lowered. It can, however, be raised. So, in effect, the ceiling would become a floor and Petro-Canada could never again be made a 100 per cent,-or even 90 per cent or 80 per cent-Canadian-owned energy company.
The second major public policy role which Petro-Canada ought to play is to ensure that energy industry profits are reinvested in Canada. This is no small consideration when you recall that the 1980s saw away over $7 billion shipped out of Canada by the petroleum industry in dividend payments alone. This is Canadian money, the equivalent of more than half of Alberta's heritage savings trust fund, that will never be used to contribute to energy security in Canada.
Remember, Petro-Canada consistently earns a profit. 1988 was a comparatively bad year and the company still pulled in earnings, revenues less expenses, of $30 million. In 1987 it earned over $314 million. In 1989 it earned $169 million. That money stays in Canada.
Third, and most important, Petro-Canada should be used to actively promote Canada's transition to a more environmentally sustainable future.
There is a revolution of sorts under way in the energy industry. Energy development is beginning to be judged by the impact it has on the environment. People all across Canada and around the world are coming to the
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realization that, as the by now much abused but still to the point Brundtland commission report put it "choosing an energy strategy inevitably means choosing, an environmental strategy".
During its short history, Petro-Canada has pursued energy security by discovering and developing new oil and gas supplies in Canada's frontiers. The focus of the future will doubtless shift from these geographical frontiers to the frontiers of creative responses to the earth's environmental imperative.
Petro-Canada is a superb, ready-made vehicle available now for the purpose of leading the energy industry toward greener pastures, a place the industry seems in no hurry to get to on its own. This will be absolutely essential if, as we in the New Democratic Party hope, the government accepts the proposal of the Standing Committee on Environment for significant environmental action.
For starters, operating under public mandate, Petro-Canada can lead the way in recycling ozone-depleting chlorofluorocarbons from automobile air conditioning units by setting up reclamation facilities at many of its service stations.
Similarly, Petro-Canada can take the lead in recycling used engine oil. After contaminants are removed and new additives included, this re-refined oil is indistinguishable from the new lubricants it replaces. Recycling this non-renewable resource provides jobs and keeps millions of litres of it from fouling our biosphere. A green marketing strategy, together with a commitment that all Petro-Canada oil products include re-refined oil would, result in the creation of a major new environmentally salubrious market.
Petro-Canada can also move into the forefront of promoting alternative energy sources. Following Mohawk Oil's commendable lead, Petro-Canada should move decisively into the provision of fuel ethanol blends at the gas pump. Ethanol, distilled from grain and other agricultural crops, is blended in a 10 per cent solution with gasoline. It has been used for many years in the United States and western Canada as an octane enhancing replacement for hazardous lead. Since ethanol is produced from plants that absorb CO2 from the atmosphere, thereby recycling existing carbon and thus replacing fossil fuel carbon dredged up from the

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lithosphere, its use significantly reduces emissions of new carbon dioxide from automobiles.
On September 8, 1990, Environment Canada announced that it considers ethanol blended gasoline an "environmental choice" product. A healthy grain based ethanol fuel industry would also provide our hard-pressed farmers an alternative to domestic markets for grain and thus, a much needed stimulus to Canada's rural communities.
Unfortunately, the big oil companies, including Petro-Canada have actively discouraged increased use of ethanol. The company recently backed away from establishing an ethanol plant in Dawson Creek, B.C. and seems intent on continuing to use other, more environmentally hazardous, gasoline additives. Recent reports indicated that it still uses MMT, a manganese-based octane enhancer, which has been banned in the United States. The company is also constructing a plant in Edmonton to produce another non-renewable additive, MTBE, effectively killing any possibility for an ethanol fuel industry in northern Alberta.


The Acting Speaker (Mr. DeBlois):: I am sorry to interrupt the hon. member, but there is a lot of noise and I want to listen very carefully to the speech by the hon. member for Edmonton East. The hon. member has the floor, and he has two minutes left.


Ross Harvey: I have two minutes left. Thank you, Mr. Speaker.

There are many more things that Petro-Canada can do on the environmental front, Mr. Speaker. All of these we can do.
So we Canadians once again are faced with a choice about Petro-Canada. We can choose to be satisfied with Petro-Canada as it is now, imitating the big American owned multinationals that we see through our window on their industry. Or we can let the Tories privatize Petro-Canada, thereby closing the shutter on that window forever and placing our blind trust in an Exxon-envisaged profit-driven energy future or we can move forward.
We can turn away from the window of the past, remembering what we saw and learned through that window, and apply it elsewhere, creating our own more sustainable energy future. It is our choice.
In an aid toward this House making the right choice, I should like to propose and amendment to the motion previously moved by the hon. member for Scarborough-Rouge River. I move:
That the amendment be amended by adding the following words:
"and at a time when the development and wide dispersal of alternatives to traditional fossil fuel energy sources is an environmental necessity."
Thank you very much, Mr. Speaker.


The Acting Speaker (Mr. DeBlois):: Order, please. The Chair will take under advisement the motion for a sub-amendment moved by the hon. member for Edmonton East. Resuming debate. The hon. member for Calgary Southwest.


Mrs. Barbara Sparrow (Calgary Southwest):: Mr. Speaker, I have waited for this day for a long time. I can assure you that it gives me a great deal of pleasure to stand here and discuss this Bill C-84 with regard to the sale of the shares of Petro-Canada to the general public.
In introducing this legislation, the minister responsible for privatization and regulatory affairs has laid out a reasonable and a practical rationale for the government's privatization initiative. The rationale flows from the basic principles of the privatization process. In our government's agenda for economic renewal, which was presented in 1984, we expressed the intention to do a thorough review of the role of individual Crown corporations. The agenda paper noted that, and I quote, "Although each corporation was established to serve-


John Horton McDermid: I rise on a point of order, Mr. Speaker. In the give and thrust of debate in the House, we do the odd strange thing. The hon. member for Edmonton East is sitting whistling the American national anthem, which has absolutely no respect for this House or the hon. member for Calgary Southwest and her speech. We were very patient listening to him-
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Ross Harvey: Ha.


John Horton McDermid: We gave the odd gibe, and I got the odd gibe from the hon. member when I was speaking as well. However I think sitting here whistling the American national anthem in the House is totally irresponsible and extremely childish.


Mr. Walker:: Mr. Speaker, I am not going to come to the defence of the member singing an anthem, but one of the great ironies is to have that minister who has been catcalling every speaker for the last two hours suddenly turning around and finding somebody else's behaviour bad. If he wants to set a standard then perhaps he can begin with his own.


Mr. Attewell:: Mr. Speaker, I would also like to comment that that was not worthy of him or his party. Perhaps, if he is to continue with silly things like that, he might be more ably engaged in that other place down the hall where they had a great Friday.


Ross Harvey: I rise on this point, Mr. Speaker. I am indeed sorry if I have distressed hon. members across the way. I understand that the distress centres principally on my choice of material, that in fact strong objection has been taken to my version of the Star Spangled Banner, although I note that in other instances that has not been the case.
However, if the problem is the song, I would cheerfully move to Yankee Doodle Dandy or America the Beautiful.


The Acting Speaker (Mr. DeBlois):: I am sorry to interrupt the hon. member but I don't think this point of order should lead to further debate. There have been messages hither and yon, and I again recognize the hon. member for Calgaiy-Southwest.


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I was saying that we have done a thorough review of individual Crown corporations. I would like to quote from the agenda paper that we followed and noted:
Although each corporation was established to serve what at that time might have been an important public policy purpose, we must ask ourselves whether that remains the case. If it does not, it is surely important to consider whether the corporation should be retained.
We completed such an examination of Petro-Canada and concluded that no public policy purpose was being
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served by continued Crown ownership of Petro-Canada. We also concluded that the public ownership of Petro-Canada was not and is not required as an instrument of energy policy.
Today I would like to demonstrate in my remarks that the privatization of Petro-Canada will not put at risk Canadian energy policy objectives. It is quite the reverse. Many energy policy objectives will be better served by a privatized Petro-Canada.
First, I would like to start by recalling the main features of this government's energy policy. We have implemented a market oriented energy policy in the belief that the private sector, guided by efficiently functioning markets, is in the best position to make optimal decisions concerning energy consumption, production, and investment.
Consistent with this philosophy, the government has reformed the regulations governing the energy sector and allowed energy prices to be set by market forces. This government has also negotiated secure access to U.S. markets for Canadian energy products by the free trade agreement.
It has created an atmosphere which fosters investment, including foreign investment, while it ensures continued opportunities for Canadians to participate in the oil industry.
It was this government which terminated the National Energy Program through the western accord in March 1985. We deregulated oil in June 1985 and moved toward deregulation of gas starting October 29, 1985. The market forces set the prices.
Many questions have been raised about the possible negative effects the privatization of Petro-Canada could have on the oil and gas industry and the Canadian energy policy. Statements have been made-and I am sure you have heard them, Mr. Speaker-that privatization would impede the development of the industry, that it would put Canadian security of supply at risk, that it would lead to unacceptable decreases in Canadian ownership of the industry, that it would lead to an inability by the government to ensure environmentally responsible development of energy resources, and that it would remove an essential window on the industry for the government.

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I would like to review each one of these concerns. Petro-Canada is a major player in the Canadian petroleum industry. Decisions by Petro-Canada can have an impact on the industry which extend beyond their direct effect on the company Petro-Canada. Recognizing this, the government gave Petro-Canada a commercial mandate in 1985. Acting in concert with that mandate, Petro-Canada has become a major player in several of our megaprojects. It also has the second largest proven reserves of oil and of natural gas liquids and the fourth largest natural gas reserves of any company in Canada. How it got those reserves is another story. I would like to talk about them a bit later.
The privatization of Petro-Canada will give the company the freedom that it requires to develop, sell or acquire other properties and assets, without the necessity of seeking government approvals for these transactions which really could otherwise slow down the process or truly impose some conditions which would not be attractive to potential private sector partners.
Security of energy supply has always been a key component of our energy policy. The government's policy is this: security of supply can best be achieved, first, by ensuring that Canada possesses a strong, diverse and growing energy sector; second, by developing domestic procedures to deal with the possible shortages; and, third, by taking appropriate multilateral actions in concert with its IEA partners.
We have done this. Energy procedures have been established for the domestic market. Canada has agreed to energy sharing procedures with the IEA partners in the event of any physical shortage of oil that should threaten any of the IEA countries.
By far the most important steps we have taken really and truly relate to our domestic industry. We have put in place policies to encourage the development of all economically viable forms of energy. We, this government, has encouraged the development of infrastructure which has lessened the dependence of the eastern part of our country on imported oil. Yes, the east imports all its needs.
Through regulatory reform and the removal of oppressive and discriminatory taxes like the PGRT that those people implemented we have created the conditions that are going to enable the domestic oil industry to grow, to
find and to develop new reserves of oil and gas that Canada is going to need for its future.
Privatization is going to enable Petro-Canada to play a major role in that process. Putting the company on the same footing as its private competitors will increase the range of business arrangements which it can use to develop its assets. At the same time privatization will permit the company to have access to the full range of private sector financial markets in instruments. This will help Petro-Canada to develop its many prospects in timely fashion.
Members opposite have criticized the privatization of this company on the grounds that it will amount to turning the corporation into multinational interests, as the member for Edmonton East was saying just a few moments ago. Those members could not be further from the truth. Petro-Canada will remain a Canadian owned and controlled corporation after privatization.
Total foreign investment in Petro-Canada will not be permitted to exceed 25 per cent of the non-government shares held. The maximum 25 per cent foreign ownership in Petro-Canada would reduce over-all Canadian ownership in the upstream sector by approximately 1.6 per cent, if it were not offset by new investment or growth in the Canadian owned sector industry.
Privatization, on the other hand, is going to allow the company to grow and to prosper. It is going to be interesting because by this means of privatization it really can assist this Canadian company to increase, grow and improve Canadian ownership within the industry throughout Canada.
The protection of the environment, especially in the ecological sensitive offshore and of course in our northern regions, is a central element of our government's policy. The government intends to announce a green paper plan before the end of this year which would affirm an approach to environmental protection through improved decision making.
This government is committed to establishing a decision-making process in which environmental considerations become an essential part of investment decisions made in all sectors. This has already been done by the National Energy Board. As a matter of fact, the Minister of Energy, Mines and Resources requested the chairman
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of the energy board some six or eight months ago to make sure that environmental assessments were done.
Besides this the government will deploy whatever instruments are required and appropriate to ensure environmentally correct behaviour. In the past regulations have been an important tool in this regard, and they will continue to be important in the future.
There will also be a growing role for market based instruments such as tradable emission permits. Petro-Canada, whether publicly owned or privately owned, will be subjected to the same environmental laws and regulations as any other company. Public ownership of one oil company is not an acceptable substitute for an environmental policy which will ensure environmentally sensitive behaviour on the part of all participants that now takes place in our economy.
Petro-Canada's policy is to meet or exceed all regulatory requirements. We would expect that this policy of environmental awareness and good corporate citizenship would be unchanged by this privatization. This company Petro-Canada is no longer needed by the government as a tool for gathering information on the Canadian oil and gas industry.
The Department of Energy, Mines and Resources now has more than adequate information to give the government the insight it requires to make policy decisions affecting the industry. Since the inception of Petro-Canada, two agencies have been created and are able to collect information.
One is the Canadian Oil and Gas Lands Administration, COGLA, and the other is the Petroleum Monitoring Agency, PMA. They can give the government a broad perspective on this important industry instead of the limited view of one company such as the Crown corporation.
In summary, privatization of Petro-Canada is consistent with government's privatization policies and with its energy policies. The environment will have assessments and be protected.
I would like to remind some of our colleagues in the House of a little history, just to refresh their memories. This Crown corporation was set up in 1975-76 by the Liberal government of Mr. Trudeau for ideological
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reasons. It had a meet in Ottawa mandate. I do not know how much exploration and development is done in Ottawa, but this is where the mandate was made to act as a window on the oil and gas industry and to negotiate state-to-state oil purchases. I could talk all night on their ridiculous deal done with Mexico: high prices, and it was not even high quality crude. We had to re-refine it when it came in here, and of course it was there to promote self-sufficiency in energy.
Today it has assets of $6.8 billion. Actually, just for our information, Canadian taxpayers have pumped more than $10.4 billion into Petro-Canada. That represents $400 for every man, woman, and child.
How did it obtain its assets? Mr. Speaker, I know you will find this interesting. It got its assets through acquisitions, buy-outs, and backings: Atlantic Richfield, Pacific Pete-Mr. Speaker, you remember Pacific Pete, a good Calgary company-PetroFina, and Gulf Downstream, just to name a few of the acquisitions. How much did the Liberals pay for PetroFina? Every Canadian has contributed. I would like to ask my colleague across from me if Petro-Canada has discovered any oil or gas. I would like you to name me one barrel of oil or one MCF of gas that this company has discovered. You cannot do it.
In 1980 the National Energy Program devastated the west. It literally robbed Alberta of over $60 billion. You remember the PGRT. It killed us out there. The program gave Petro-Canada a neat right, the right to gain control of 25 per cent of the discoveries on all Canada Lands. Sure, private enterprise went out. They did the work and they took the risk and guess what? Petro-Canada could have its choice of 25 a per cent back in of the deals it wanted. Or it could say no to the deals it did not want. Their assets came through the back door.
Petro-Canada has to prove it can be sufficiently profitable and this is the way to go about it. The company has been working towards self-sufficiency and profitability since 1984. Since we took office, they have had to. It was this government, when we took office, that told Petro-Canada to make it on its own and operate as a private corporation. Yes, we cut off that money pipeline. The company was bom to spend money and it sure has.

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Petro-Canada has spent $7.3 billion during the 1980s and it showed net earnings of about $38 million. The company has not been successful on the profit side of the ledger. With $6.8 billion in assets-and I would like the hon. member for Edmonton East to check that figure-their profit last year was about $56 million. That is $56 million on $6.8 billion assets. It is really not a good record.
The company has committed billions to developing Hibernia, the Terra Nova oil fields, Alberta Syncrude and also its Wolfe Lake heavy oil project. In all fairness, I would like everyone to realize that the Canada Lands exploration that we have done over the past 10 or 15 years has provided us with a wealth of geological information.
Canada is very fortunate to be blessed with natural resources. As we move through this decade, we have to strive to become more self-sufficient. Petro-Canada needs capital. They need capital to succeed. It is time they raised their own financing, competed straight up in the marketplace, and got on with their own exploration development and production.
Roughly 80 per cent of the company's revenue stream comes from its refining and marketing operations. Their refineries need cash to improve their systems, to meet environmental standards so we can have cleaner air. That is what they need to do and that is what privatization can help them with. It is truly going to improve their growth of opportunities for the company. They are needed out there. They are one of 16 Canadian oil companies across Canada, not one of three or four as the hon. member mentioned. Perhaps he would like to do more research on that. We have a lot more companies than Imperial Oil, Shell and Petro-Canada.
Privatization is going to encourage more development of our Canadian resources. It will enhance Petro-Cana-da's ability to really respond to market opportunities and that is great. It is not going to impair our ability to achieve its national objectives because Petro-Canada is not and has not truly been for some time, used as a government policy.
I would like to say how pleased I am to stand up and support Bill C-84, and really explain to people that the only way to go is to put the company out on the market and sell shares. Obviously it will meet the market
demands and we will have a truly better secure supply of oil and gas in this country.


SPEAKER'S RULING
The Acting Speaker (Mr. DeBlois):: Before proceeding to questions and comments, the Chair wishes to announce that it will now hand down its decision on the proposed sub-amendment presented by the NDP critic. The motion is in order.
For questions and comments, the hon. member for Laval East.


MEASURE TO ENACT
Vincent Della Noce: First of all, Mr. Speaker, I wish to congratulate you on your new job, since this is the first time I have had a chance to do so in the House.
I also would like to congratulate the hon. member for Calgary Southwest, with whom I have had the pleasure of working on this bill for almost six years. My colleague, who is an expert on "upstream", has been looking forward to this day for a long time. At last she is able to announce a decision long awaited by Quebecers and more specifically by the people of Laval whom I have the honour and the privilege to represent here in the House.

I would like to congratulate my hon. colleague from Calgaiy Southwest and ask her a few questions. Why did the Liberal government install this beautiful maple leaf on every street comer, and in some places on three corners. I was stuck between the tree leaves to compete in private enterprise. I was one of them, unfortunately, in those days.
How did the consumer benefit? What was the benefit to the lessee in being able to announce the new maple leaf logo, which I thought was propaganda stuff for Mr. Trudeau in those days.
I would like the hon. member to tell me what the real benefit was for this country and for the Canadians who had to pay for this?


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I wish to thank my colleague from Laval-Est for his questions.
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Yes, it was some years ago that we did work on a position paper for the privatization of Petro-Canada. I believe it was 1985. At that time it was quite obvious that Canada no longer needed the Crown corporation as it was not fulfilling its mandate.
My colleague asked me what did this company do for lessees. I am scratching my head because I am having trouble coming up with a specific answer. I would like to pose the question back to the hon. member, although that is not quite what Mr. Speaker would want. What is the Government of Canada doing owning 3,300 gas stations across this nation?
The prices are set by the market, and I think you probably realize that, Mr. Speaker. For the lessee-owner, one of the things that probably hurt a lot of people was that it put some out of work. No doubt the Government of Canada has 3,300-1 will check that-gas stations across the country. It certainly did not benefit the consumer.
The major thing is that Petro-Canada can play a role in the security of supply. What it really needs and where it should be is out in the marketplace raising its own capital, be it through debt equity or whatever type of cash infusion. It will probably be floating some bonds or a debt equity issue, but it is to go out and to explore, develop and produce. Production is not needed so much today but when we have proven reserves we certainly know that in the future we will be able to support the needs of Canadians.
What is interesting today, and when my colleague asks what did it do for the lessees or did not do, is not so much that it did not really help the lessees, but that Canada today produces about one and a half million barrels a day. We export 615,000 barrels of oil a day and import about 550,000 to 570,000 barrels a day. This means that we are net exporters and that leaves us in a good position and with our IEA agency and our commitments to the OECD people, this does put us in a good spot. We want to maintain and always be net exporters so we are giving Petro-Canada a vehicle where it can raise the funds. It will be able to go out and develop or discover these new proven reserves that will enhance the future of this country. I thank my colleague and say, I think it is time we got rid of those 3,300 gas stations-


An hon. member:: The lessees must be-
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Barbara Jane (Bobbie) Sparrow: The lessees will be happy.


John Paul Manley: Mr. Speaker, I would just like to ask two very simple questions of my friend, the hon. member for Calgary Southwest. First of all, she has described Petro-Canada as a corporation in fairly damning terms. If it is really as bad as she said, who in tire private sector is going to want to buy it?
Second, I would like to ask her why, knowing that she has been very interested in much of the work that has been done by other provincial public companies in Canada in the energy sector, such as Hydro-Quebec and Ontario Hydro, would she explain to me why she thinks it is necessary that Petro-Canada be sold, equity-wise to the private sector, and cannot raise the capital that it needs through debt financing?


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I appreciate the questions from my colleague, the hon. member for Ottawa South. I certainly had the opportunity to work with this colleague on the Committee on Industry, Science and Technology, and we are sort of into that right here. I enjoy working with the hon. member.
Yes, I did mention things about Petro-Canada and the whole question is about its future as a private company. That is where its future is going to be. By not subsidizing or pumping in billions of dollars, which our mandate was and it changed in 1984-85, the company really has no other source of funds. Well, yes, it has profits, but what I was discussing today is that Petro-Canada has assets of about $6.8 billion and those have been written down in the last four years too. If you have assets like that and you only generate about $56 million in profits, there is something wrong. But it does need capital and it certainly will be able to go out into the market.


John Paul Manley: Borrow.


Barbara Jane (Bobbie) Sparrow: It cannot borrow, it has too much debt. What we need to do is to allow it to go out into the market where it will be able to meet its obligations.
It is involved in the Hibernia program and I think we just voted on that the other day in regard to the east coast and bringing some sort of security of supply there. Petro-Canada also has a large interest in Terra Nova, I think about 25 per cent but do not quote me. It has a large interest in the Beaufort and it is going to be sooner rather than longer that we will see our reserves on our northern Canada Lands, up in the Mackenzie Valley, brought on stream, after environmental assessments

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have been done. The future of this company depends upon its privatization and that is why we are doing it.


Mr. Lee Richardson (Calgary Southeast):: Mr. Speaker, I did want to ask a question of the NDP speaker but, as that is not permitted under the rules, I will ask the question of a member who knows what she is talking about. I would like to ask the hon. member for Calgary Southwest first, has Petro-Canada ever discovered one teaspoonful of oil, and second, I would also like to ask about this question raised about foreign ownership. The hon. member said in her comments that there would be maximum of 25 per cent foreign ownership allowed. Even presuming that whole maximum was taken up, what would the effect on the foreign ownership in the country be?


The Acting Speaker (Mr. DeBlois):: The hon. member for Calgary Southwest. Very briefly.


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I want to thank my colleague for Calgary Southeast. First, he asked the question: "How much oil has Petro-Canada found?" It has not discovered any oil or gas. Its assets have all come through acquisitions, buy-outs, and backings.
The hon. member's second question was with regard to the foreign ownership. This is going to be a Canadian-controlled company. If the 25 per cent was indeed taken up by true foreigners, it perhaps might lower the upstream by 1.6 per cent. That is basing the fact on the total 25 per cent that would be allowed to foreign ownership that would completely go that way. It would be 1.6 on upstream.
It is not who owns it. It is who explores, develops, and produces for Canadians and gives jobs in security of supply for this country. That is what this private company is going to do.


NOTICE OF ALLOCATION OF TIME TO CONSIDER SECOND READING STAGE OF BILL C-84
John Horton McDermid: Mr. Speaker, I rise on a point of order. I, too, want to congratulate you. It is the first opportuntiy I have had to do so.
I have been informed that to date, agreement has not been reached under the provisions of Standing Order 78(1) and (2) with respect to an allocation of time in the second reading of Bill C-84, an act respecting the
privatization of of the national petroleum company of Canada. We will continue to try to get an agreement with the opposition parties on a reasonable length of time that we debate this on second reading and get it into committee for an in-depth study.
However, under the provisions of Standing Order 78(3), I give notice of my intention to move a time allocation motion at the next sitting of the House for the purpose of allocating a specified number of days or day for the consideration and disposal of that stage of the said bill.


An hon. member:: Shame.


Ross Harvey: I rise on a point of order, Mr. Speaker. It could not have been anything else. The Minister of State has already spoken in the debate. It had to be a point of order.
On that point of order let me say that I am little short of astonished that the government after hearing only three speakers in the debate-


David Charles Dingwall: Mr. Speaker, I rise on the point of order raised by the hon. minister. He is certainly within the provisions of the Standing Orders to move notice of his particular motion, but I just wish to draw to the attention of members of the House that this is a real breach of what has transpired between the various-


Some hon. members:: Order, order.


David Charles Dingwall: -House leaders concerning business of the House. Once again, the government has gone back on its word.


The Acting Speaker (Mr. DeBlois):: Resuming debate. The hon. member for York Centre.


MEASURE TO ENACT
Robert Phillip Kaplan: Mr. Speaker, we are rapidly approaching six o'clock and I am very pleased to have the opportunity to rise to speak as my colleague did for the opposition and to make it clear to members of the House, and to the government in particular, that the opposition does not support the privatization of Petro-Canada and that we will be voting against this measure.
We oppose very strongly the government's concept of Petro-Canada, that of being a company such as any
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other. We find it ironic that the the government should make the point that Petro-Canada should be privatized because it is performing no public sector role. That, to me, is a very circular argument. It was this government in 1984 that acted to deprive Petro-Canada of any role in the public sector.
Our submission is that Petro-Canada should have a mandate that touches public sector interests, as well as private sector interests. If it did so as part of a national energy program in general, it would be part of a national energy policy which the government, in spite of what it says, does not have. We would find Petro-Canada, indeed, earning its keep and justifying the support of Canadians.


John Horton McDermid: Why do we keep it?


Robert Phillip Kaplan: Why do we keep it, the minister asks. He made the point in his remarks, and I noted them, that it was only common sense to sell Petro-Canada.
To me, if anything, that betrays the small-minded view that the government is taking, not only of Petro-Canada and not only of energy policy, but of its whole responsibility as a government. "It is only common sense to sell it".
I noted the Edmonton Journal on October 3 dealt with the suggestion of the minister that it is common sense to sell it. It caught my eye that the Edmonton Journal, which opposes selling Petro-Canada, made the point that it does not make sense to begin disposing of the national oil company just as prices are sky-rocketing in the crisis produced Iraq's invasion of Kuwait.
The invasion of Kuwait by Iraq reminds us of the first of three brief points that I want to make on this subject. The first is that energy is not just a product like any other. It is a strategic resource. For the government to take what it calls a common sense attitude toward Petro-Canada and to feel that common sense requires that it be sold shows a failure to understand the significance of energy and the proper roles of Petro-Canada and government in dealing with it.
I will just summarize the three points that I want to make and I hope I can return to each. The second point is that the government really has no energy policy at all.
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It thinks that when it talks about the marketplace being the proper allocator and the proper determiner that that is a policy. It is far from being an adequate policy.
Third, I want to make the point that an important element of nation building is being overlooked by the government, again, not just in connection with Petro-Canada but in its general approach toward its responsibilities.
The country is deteriorating. The national government of the country is evaporating. The national values of Canada, the things that hold us together and that make us want to survive together and to build together as a country, are diminishing and becoming smaller. For us in the opposition, the decision to privatize Petro-Canada is just one more step along the road taken by a government which fails to realize what is the essence of governing this country, and that is nation building.
Let me return to the first point I made about the government's theory that there is a marketplace that it supports, that it believes in, and that determines the price of energy. What is a marketplace? A marketplace is a metaphor for the place where willing buyers and willing sellers meet and transactions are completed. There is no such marketplace in the field of energy. This is a highly concentrated industry. When one seller raises its prices, the buyers are not given the opportunity to go rushing to the lower-priced sellers to buy from them and see them make bigger profits. If that happened, there would be a marketplace.
What happens when one seller raises its prices in this industry? There is price leadership, we all know that. Every other seller follows it and the prices go up. That is not a marketplace. The government itself knows that there is not a properly working marketplace in this field, because the government itself set up a price monitoring agency in the energy field. That is a recognition that these prices do not operate like the prices of food, or automobiles or industrial products. There is something there that needs to be watched.
We have lots of evidence in the past. We have convictions. The Minister of Justice is in the Chamber. She knows there have been many convictions in the energy field for price-fixing, for tide selling, and for every market abuse that one can bring into that sector.

October 10, 1990
Government Orders
Petro-Canada was meant to perform the function of being an honest participant in that market, to the extent that there was one, that would give Canadians the break at least of some honest competition. I am not saying that the other companies are performing dishonestly. The record speaks for itself. They have done from time to time in the past. I am saying that having Petro-Canada government owned out there in the so-called marketplace would be one ingredient assuring Canadians that there was some element of opportunity for willing sellers to look for the best deal.
I also wanted to make the point that the government needs an energy policy. The Minister of Energy, Mines and Resources has just come into the House and I am very glad to see him. He uses the rhetoric from time to time of there being a marketplace, when the government's own actions, half-baked and tentative as they are, shows that it recognizes itself that there is not a marketplace. This country needs an energy policy.
We are a uniquely situated country. Most countries in the world do not have a choice about what their energy policy is going to be. They do not have the margin to do very much picking and choosing or structuring about what their energy policy is going to be. Either they are exporters of one particular kind of energy, or they are importers. They are stuck in an international situation which pretty well dictates what their energy policy is going to be.
Canada is unique in having the opportunity to have a real put together, considered, multi-faceted energy policy. We are so well endowed with so many options as you move from coast to coast. There are tidal opportunities. There are hard metal and uranium opportunities. There are conventional oil sources. There are tar sands. There are offshore opportunities. Every variety of possibility that the mind can concede is a possible option for Canada.
The government says the marketplace is going to tell us all about that, as if it did not know itself by what it did in Hibernia, for example, that the marketplace is not going to deliver. It is not going to be the decision maker
for us about where our future is going to lie. The marketplace is a very short-term, reactive phenomenon. Canada can have an energy policy which, if we want to support it, can be a strong factor in national unity for the country. We can have an energy policy that looks to every region of our country and to its opportunities and offers as a nation to see them supported.
Some energy opportunities take 10 years to bring to market and a lot of new technology and new thinking about conservation, distribution and refining. It is not something that the marketplace can adequately respond to. It is something that we ought to put together in the same way that we put Canada together in 1867 with the concept of a railway, something that the marketplace would not have given us, something that needed to be a kind of national vision.
I put it to the government that energy for Canada is not just a marketable product. It is a strategic resource in which we have so many options and ways to go and such a possible long horizon of planning and opportunity, that to put forward a false premise or theory of common sense, which it says dictates that Petro-Canada must be sold now, is an insult and a betrayal of our future as a country.
It does not surprise me that the government is not thinking about the future of the country or that it is not trying to build or to enlarge. So many of the things that the government has done have backfired, but even the ones that have been successful have resulted in the diminishing of what it means to be a Canadian and to know what Canada is all about. It has to learn. I hope there will be a government in office one day that will know that to hold the country together, one has to keep building, not privatizing, deregulating, Americanizing, or turning over to the provinces. That is not a future for our country.


The Acting Speaker (Mr. DeBIois):: It being six o'clock, the House stands adjourned until tomorrow at 11 a.m, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6 p.m.
[Stage Direction]
Thursday, October 11,1990