I do not think there can be any question that wells are not being drilled to the extent that they might be. True, a certain number are being drilled, but there is no full drilling programme in operation, or a programme anything like there should be. As a matter of fact when I came to Ottawa to attend the sitting of parliament, twenty-eight out of thirty-two large drilling rigs in the Turner valley were sitting idle, and I am informed that condition still prevails. Most people who own probable drilling sites, and a large number -who have money enough to go ahead with the- drilling of wells, cannot see sufficient possibility of a return, under the present tax structure, and particularly in view of the subsidy which operates as an artificial depression of price to the extent of 75 cents a barrel, to go ahead with drilling.
This morning I was talking to a man who has an intimate knowledge of the oil business. The company with which he is connected has fifteen possible drilling sites. Those sites will at some time be drilled in t-he Turner valley, but they are not going to drill any of them
Income War Tax
until we get rid of the subsidy, or the tax situation is much improved so they can get a reasonable return from the oil for their shareholders. They believe it is much better to leave it in the ground than to take it out at the present time, because by taking it out they would simply be depleting their assets. It will be understood that once oil is taken from, the ground, the well is exhausted. Under the present circumstances they are much happier to leave the oil in the ground than to go into production. This is true of most of the oil companies.
Mr, ZAPLITNY: I admit at once that-I am no more an oil expert than is the minister, but I must say I am at a loss to understand what the hon. member for Calgary East is advocating. It seems to me he is admitting that no drilling is taking place, even though certain companies have sites, money and drilling equipment, simply because the return they believe they could expect will not be as great as they should like to have it. He also advocates removal of the subsidy and an increase in the price. I cannot see the logic in that, because it seems to me the whole reason for the subsidy has been to keep the price down in the west. We had an example of that earlier this year-