December 1, 1949

CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

On division.

Motion agreed to on division and bill read the third time and passed.

Topic:   JUDGES ACT
Subtopic:   AMENDMENTS RESPECTING SALARIES, TRAVELLING ALLOWANCES, ETC.
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AMENDMENTS WITH RESPECT TO LOANS, EXPENDITURES, ETC.

LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Hon. Douglas Abbott (Minister of Finance) moved

the third reading of Bill No. 210, to-amend the Industrial Development Bank Act.

Motion agreed to and bill read the third time and passed.

Topic:   AMENDMENTS WITH RESPECT TO LOANS, EXPENDITURES, ETC.
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ASSISTANCE TO PRODUCTION IN ATLANTIC MARITIME PROVINCES

LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Right Hon. C. D. Howe (Minister of Trade and Commerce) moved

the second reading of Bill No. 217, to assist producers of coal in the Atlantic maritime provinces.

He said: Mr. Speaker, this bill provides

authority to lend money to producers of coal in the Atlantic maritime provinces for the purpose of increasing the efficiency of production through expanded and modernized mechanization.

The report of the royal commission on coal, submitted to this house on January 31, 1947,. gave considerable attention to coal mining methods in this area. The report stressed the necessity for extended mechanization, particularly in the largest producing area, Cape Breton, if the industry was to increase efficiency in production. The coal mining industry is one of the mainstays of the industrial economy of the maritime provinces, and consequently vital to our national economy. The coal produced in that area should supply a substantial part of the requirements of the central provinces.

It has been an established policy to assist this coal to find markets in the central provinces through the payment of subventions, and the assistance necessary has been based upon the costs of imported coals.

There has been an impressive advance in the efficiency of production and processing in the competitive foreign coal producing areas as a result of the mechanization of most of the operations of mining coal. This improvement has been reflected in the comparative costs and has made the competitive position of Canadian coal more adverse, as well as increasing the cost of assistance.

The physical conditions of our maritime coal seams have not permitted the rapid and comparatively easy development of new methods and machines that have resulted in such an improvement in the American fields. It is also not possible to develop as specific and certain information on the extension of the seams as is the case in the United States, since in Cape Breton, the

Coal

seams extend out to sea and cannot be proved by drilling in advance. It may be noted also that as coal mining advances further seaward, the labour and the cost continually increase.

Topic:   ASSISTANCE TO PRODUCTION IN ATLANTIC MARITIME PROVINCES
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LIB
CCF

Clarence Gillis

Co-operative Commonwealth Federation (C.C.F.)

Mr. Gillis:

I am interested in this statement, but the minister is making so much noise I cannot hear all the other conversation.

Topic:   ASSISTANCE TO PRODUCTION IN ATLANTIC MARITIME PROVINCES
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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

These facts have made it clear that, if this vital industry is to play its full part in our national development, or perhaps if it is even to survive, a program of modernization and mechanization is necessary. Such a program should result in a general reduction in the cost of coal production through the increased output of coal per man-day worked.

For some time the dominion coal board has been giving serious consideration to the provision of loans to assist the Canadian coal industry to improve efficiency. The board has recommended to me that loans be granted for mechanization and modernization to companies engaged in the production and processing of coal in Canada, if the operation of these mines is vital to our national economy. The provision of such a loan is in the national interest. The proposed bill will cover these recommendations.

The provision of this assistance will enable those operators who qualify for participation to increase efficiency, to improve their product and substantially to reduce their costs. These results will, in turn, improve the competitive position of these coals in the subvention area, and consequently should reduce the amount of annual subvention assistance.

Topic:   ASSISTANCE TO PRODUCTION IN ATLANTIC MARITIME PROVINCES
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CCF

Clarence Gillis

Co-operative Commonwealth Federation (C.C.F.)

Mr. Clarence Gillis (Cape Breton South):

Mr. Speaker, this is one subject in which I am particularly interested. Were I not to make some comments on it, I could scarcely justify my presence here.

Coal mining is the basic industry of the province from which I come. Let me say that while I am not opposing the bill I should like to give the minister and the house some insight into certain aspects of this form of assistance, as I see them. I might easily rise in my place and say that I agree with the bill and that everything is fine. But was it not George Bernard Shaw who said some time ago that the way to get at the merits of a question is not to listen to some fool who has said he is impartial, but rather to develop a good argument on the subject, both pro and con. While I agree with the bill, I am not impartial, and I shall attempt to give the minister the other side of the story.

I am particularly interested in the mechanization of these mines; but before we go into that aspect of the matter I should like to emphasize the fact that the real problem, as I have known it in the past, has not been one of production from those collieries but rather one of marketing. That has been the problem in the coal industry of Nova Scotia for the last thirty years. To overcome that difficulty the government instituted a system of subventions. While they have been of some help, they have certainly never put the Nova Scotia product in competition with United States coal in either the Ontario or the Montreal market.

The steps taken by the government within the past few years were practical steps toward the solution of the problem. The subvention arrangement back in the thirties, while it did not solve the problem, was of considerable assistance. It was a practical step in the right direction.

One of the most important steps taken by the government toward finding a solution to the problem in Nova Scotia was the establishment of the coal board. I have said the question is one of markets. The provincial government, which has supervision over the industry, has no control over markets. When the coal board was set up it was given certain definite functions. Not only was it to administer subventions, but under the terms of reference under which the board was to operate, in addition to supervising the financial arrangements as between the federal government and the industry, it had also the responsibility of probing markets. So far it has not functioned as efficiently in that field as I should have liked to see it function.

Only recently the coal board held meetings in the coal producing areas that will be affected by this bill. The union, which maintains a first-class research department and keeps in close touch with all phases of the industry, presented a brief to the board which emphasized this question of markets. I am not going to read the whole of the brief, because no doubt the minister has seen it; but there are just one or two things I should like to bring to his attention.

As I said a moment ago, I have never considered this problem from the standpoint of production; I have always considered it from the standpoint of markets. The union made the following observation on page 3 of the brief:

As of course your board is aware, the Nova Scotia government informed the royal commission on coal that in its judgment Nova Scotia could produce nine million tons of coal annually, and that four millions of this output would have to be sold in Quebec and Ontario.

This bill is designed to increase production through mechanization, but the basic problem is not production; it is markets. The coal control that was set up during the war considered the problem in the same way. They considered that the problem is the means to be adopted to provide markets in adjacent areas, for surplus coal, but in discussing this matter with the union the coal board has taken the position that their function is not to provide markets; it is to attempt to find a solution to the problems of the industry from the standpoint of production.

Markets which this industry has had for years are being lost to United States coal. A return was tabled in reply to questions which had been asked by the hon. member for Royal (Mr. Brooks) with regard to markets for Canadian coal. The questions asked were as follows:

1. What quantity of United States coal has been imported for use by the Canadian National Railways, Atlantic region, for (a) the calendar year, 1948; (b) the year 1949 to October 1?

2. What quantity of American coal is on hand for use by Canadian National Railways at Campbell-ton, New Brunswick?

The following answer was given:

The Canadian National Railways advise as follows:

1. (a) 272,625 tons; (b) 151,282 tons.

2. The stockpile at Campbellton includes coals of Canadian and United States origin. Quantities are not separated, but United States content is estimated to be about 18,248 tons.

Those figures covered the present year and last year only. For a long time Canadian National Railways have provided one of the normal markets for Nova Scotia and New Brunswick coal. This return supports the contention I have been making, that additional financing to bring about increased production will not prove of any material value to the industry unless steps are taken to zone the normal markets in the section of the country we are talking about. I leave that thought with the minister.

This bill is to provide loans to aid in mechanization of the mines. I am not opposed to mechanization as such, but the term is used rather loosely. The mines in Nova Scotia have been mechanized ever since I have known them. Machinery cuts the coal, bores into the coal and transports the coal from the faces to the surface, but it is all operated by compressed air. The additional mechanization that is being talked about is in the form of heavy cutting and loading machinery located at the working face. I have no objection to taking the pan shovel from the man who works in a coal mine, because I broke my own back for twenty-six years using one. I will welcome the placing of

Coal

machines in the mines to do that type of work, but this same proposal to electrify the mines was made fifteen years ago.

I objected to that being done in mines such as we have in Nova Scotia. The company which operated the mine in which I worked fifteen years ago proposed to put in heavy cutting and loading machinery. We did not object to the machinery as such; we simply pointed out the problems that would have to be solved. The mines in Nova Scotia are the most gaseous of any mines on this continent, and there is great danger that a spark from one of these machines or from a broken cable might blow the cover off the mine. We felt strongly about the matter, and wanted some assurance that the equipment would be safe.

I took an active part in opposing the electric machines because of the danger entailed. We discussed the matter with the provincial government and asked that we be given assurance, first, that the electrical equipment would be reasonably safe, and second, that provision would be made to take care of the displacement of manpower that might develop. When you put in machinery of this type you are faced with the problem of safety underground, as well as the social problems above ground in connection with what is to happen to the investment in churches, schools and homes when men are displaced from employment.

We could get no assurance on these two points, and we would not permit the machinery to go in. That was fifteen years ago. We did not base our objections at that time on imagination only. We went back to what had happened in the British mines which had been electrified for a long time. We secured reports made by royal commissions which had considered the question of electrification underground. I have the report of one commission here, but I do not intend to quote from it because I have read it a thousand times. I used it at that time. This particular commission sat continuously for three years in order to ascertain the reason for the terrific fatal accident rate in the British mines as compared with the low rate in the mines of France. When this commission reported in 1938 it stated clearly that the reason was the electrification of machinery at the working face. The use of electricity within 300 or 400 yards of the working face is reasonably safe, but no one can say it is absolutely safe.

You have a different condition when you shove a huge electric machine that throws an arc right up to the working face. At that point there is the possibility of gas, and also dust, which will cause one of the worst explosions possible when ignited. By

Coal

doing that you create a dangerous problem. This commission reported that the difference between the French and English rates was that the equipment in France was driven by compressed air, whereas there had been an increased use of electricity at the working faces of the English mines. They did not withdraw the machinery. They wrote a lot of safety precautions into their act.

I know the minister is not responsible for conditions in any of the collieries, but under the bill the minister assumes the responsibility of seeing that as the result of these loans, the developments are sound from a financial point of view and also from the point of view of increasing production. The minister is taking that responsibility. In addition I think he should assume responsibility for the question of safety, in order that, where electrical equipment is to be installed, conditions in the colliery will be reasonably safe. Nobody can say they are absolutely safe, but they should be reasonably safe before money is used for that purpose.

The minister is not a mining expert, and I think he should have a mining engineer in his department who understands the whole problem, and who would be able to advise him as to equipment. There is a rush to improve production. The coal operators in Nova Scotia have a new general manager, and every time there is a new general manager he has to make a name for himself. In the rush for profits, and because of his desire to build up his prestige in the industry, he might overlook such little things as the safety of the man who actually produces the coal.

I am not too sure about the ability of the provincial government to handle the situation. They are a little too close to the operation. I think someone in the minister's department or on the coal board should be able to examine any colliery where electrical equipment is installed and be able to say to the'minister that the equipment is reasonably safe in that particular colliery. It is a responsibility and obligation that someone should assume. I have seen mine explosions, and they are not pleasant. I have gone through a war, and I would rather go through two wars than a mine explosion. It can happen very quickly and simply. Unless precautions are taken, we may find ourselves, in the rush to improve production, in the position of blowing the cover off one of these mines and possibly involving a thousand people with it.

At the present time there is some of this equipment operating in one of the collieries. I should like to bring certain points to the minister's attention with regard to the investigation in Great Britain. In most of

[Mr. Gillis.l

the cases where there was an accident because of gas or dust being ignited, it happened because of a broken cable. These cables are supposed to be equipped with safety switches a certain distance from the working face so that if anything happens to the cable on the other end the switch will blow and cut the power off. In most of the cases where they had difficulty in Great Britain the switch did not work. It is somewhat of a coincidence, but I noticed recently a press dispatch in a Sydney, Nova Scotia, newspaper dated November 8. On the sixteenth of last month the union was discussing the problem of safety in one of the mines where they have installed electrical equipment, and their approach to the problem was from the point of view mentioned in the report from Great Britain-the fact that the switches did not work. Let me read part of a dispatch from Glace Bay, dated November 18:

Investigation into the failure of safety devices to operate in connection with the mechanical equipment in No. 20 colliery will be conducted Saturday, it was stated at tonight's meeting of Phalen local.

That happens to be my own local of the mine workers union.

During the regular session of the local union members expressed alarm at a number of incidents that have occurred in the mine recently. The cable carrying electric energy to the mechanical equipment has been found burning on several occasions, it was said, and at times fires were found near the damaged cable. Andrew Conron, president of the local-

And so forth. Right at the present time there is definite proof that in the colliery where they are making the initial tests with that type of equipment they are having some difficulty with regard to the electrical power and the failure of the safety devices to work, just as was found in Great Britain in the period from 1935 to 1938. I am mentioning this to the minister so that he may have some understanding of the new problem of safety that is being created by mechanization. When they refer to mechanization now they merely mean they are replacing compressed-air-driven machinery with machinery powered by electricity. That is the only difference.

Gas conditions are bad in most of the collieries, but I can say that No. 20 is one of the worst I have ever been in from the point of view of throwing off gas. It is one mine where they could not afford to have a fire of any kind. They are just lucky that they spotted them and put them out. The type of mining has changed completely. For the benefit of the minister I want to say when these mines were mapped out the strata were developed for an entirely different type of mining. Places were driven sixteen or twelve feet wide, and two men would work in them. The pressure on the roof five or six miles

under the Atlantic ocean is terrific. You have to timber it close to the face. The roofing and pillaring operation was a technical job for two experienced miners. It could be made safe because the men who carried on the operation had only that space to look after. Now they are getting away from that, and the strata have been developed in such a way that the main supports are left in place to look after roof conditions and so forth; but when you start to install heavy machinery it means that the faces may be three times as wide. It means that the timbers cannot be kept within eighteen inches of the face. That is the way I had to keep them when I worked there.

Today that is done away with. I looked at that operation last December, and as a practical miner I would not work in or around it. It appeared to me they had cast aside all the safety conditions that it took us twenty-five or thirty years to achieve under the Nova Scotia Mines Act. If there is to be a different type of mining in the future, we must be prepared for the new conditions that will be created. The machinery will drive places forward a lot faster and will open up wider faces. With that comes the problem of the releasing of a lot more gas than there is in narrower places. Airways will have to be carefully looked after. When you pump air from the surface a thousand feet down a shaft and through one mine, it is really an underground world today in No. 2 mine. Harbour seam, No. 20, is about 450 feet above that again. A tunnel is drifted up on a one per cent grade, and there is another underground world opened up there. You have to drive all the air down the main airway, through the old mine and back up the tunnel, and it has to ventilate all these working faces. It is a problem which will have to be carefully studied, because under no circumstances is a mine reasonably safe unless a sufficient amount of air is pumped in.

I mention these things to the minister because the solution of the problem is not just as simple as making loans to the company to allow them to go ahead and increase production. The question of markets will have to be taken care of. If the Nova Scotia government is right, if the union is right which is doing research work on the problem, and if the figures are correct that were given a moment ago as to the displacement of Nova Scotia and New Brunswick coal on the Canadian National railways, then someone has to do something about the question of markets. At least we could have the markets that belong to us economically. I think we could compete with the Americans in that market, but evidently we are not doing so; somebody is falling down on the job.

Coal

In my opinion the matter of markets should be one of the main responsibilities of the coal board; and under the terms of the legislation setting up that board I believe it has that responsibility. But when I see the Canadian National using United States coal I am not satisfied that the matter has been handled properly. Mind you, at the time that happened our mines on the mainland of Nova Scotia were working only two or three days a week. If loans are to be made for the purpose of mechanizing and electrifying these mines, the question of safety must be considered. The minister should see to it that the social problems and hazards created by the new development are also considered by some competent person in his department.

I have said I favour the bill. I think it is an improvement on subsidies. I hope it will not interfere with or displace subventions; I do not think it will. The payment of direct subsidies on production without supervision, as was done during the war, in my opinion served no good purpose except to build up the balance sheets of the companies. I believe the loan arrangement is practicable; and if the coal board, with competent personnel, exercises some supervision and scrutiny in matters of safety and the social problems that will be created, on somewhat the same basis as that on which the financial arrangements are looked after, I believe this bill will be a step in the right direction and will help us get at least somewhere near competition with United States coal in the Quebec and maritime markets, which are normally ours. I do not believe the problem ever will be really solved, however, until the question of markets is dealt with by zoning those which are reasonably economical for our coal both east and west.

Topic:   ASSISTANCE TO PRODUCTION IN ATLANTIC MARITIME PROVINCES
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LIB

Clovis-Thomas Richard

Liberal

Mr. C. T. Richard (Gloucester):

I believe the minister is to be complimented on having introduced this legislation, which will be welcomed in New Brunswick where coal production, though small, plays an important part in our economy. We do not produce a great quantity of coal, probably not much more than half a million tons. The amount is insignificant, I know, when compared with the coal production of Nova Scotia; yet that small production provides employment to some six or seven hundred people.

That is not all, however. Coal produced in New Brunswick provides the only means by which we may obtain electric power, and that is the important part it plays in our economy. The New Brunswick electric power commission is the largest distributor of power in that province. It has a capacity of about 87,000 horsepower, of which only some three or four thousand horsepower are

Coal

produced by hydro, the remainder being produced by coal-burning units, one of which is located at the mines at Minto, another at Chatham, and another at Saint John. Today these three units consume over 200,000 tons of coal, or about fifty per cent of the coal produced in New Brunswick. It is the intention of the power commission to establish another unit at Grand Falls and to double the capacity of the unit at Chatham, which will mean that the commission will require some 400,000 tons or about four-fifths of the coal produced in our province. Naturally this will mean that the coal operators will have to increase their production in order to keep up with the requirements of customers other than the power commission.

I would hope that by modernizing and mechanizing the smaller mines in New Brunswick we might be able to reduce the cost of production and thereby reduce the cost to the power commission, thus enabling it to provide electric power to every section of our province. Today that power is expensive. The coal alone costs the commission about -6 cents per kilowatt hour; yet that cost is justified by the use made of that power in the rural districts and small towns and cities. As I said before, we have no potential hydro power to develop, and this seems to be the only way we can obtain the electric power which is so essential to our economy. This legislation will enable the operators to increase their production and at the same time increase the number of men employed. It will also give us an opportunity to obtain cheaper electric power from our coal-burning units.

I hope that we in New Brunswick will derive more benefits from this legislation than we have received under the subsidy system. Personally I do not believe in subsidies; I think this is the proper way to develop our industries. I note that the bill is to be proclaimed by order in council. I trust that proclamation will not be delayed unduly, because conditions in New Brunswick are none too good just now. We have been hard hit lately. As a result of the sudden devaluation of the British pound our lumber industry is not operating to the same extent as in former years, and we have lost our pit prop market. Unemployment is increasing, as the figures disclose; and we hope that legislation such as this will help maintain and increase employment and better conditions throughout New Brunswick.

Topic:   ASSISTANCE TO PRODUCTION IN ATLANTIC MARITIME PROVINCES
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PC

Thomas Langton Church

Progressive Conservative

Mr. T. L. Church (Broadview):

Mr. Speaker, this bill is based upon the doctrine of bonuses, subventions and subsidies for this very important industry. I am not going to discuss at length what has been done in the past, but

I should like to make one short reference. This bill deals with the producers of coal in the Atlantic provinces. The first session I was in this house I introduced a motion which was discussed for three days. At that time I said we were a very cold country. There were pictures in the New York Times showing Canada sitting as a Lazarus at the feet of the coal barons of Pennsylvania. Following the discussion of my motion a committee was appointed, of which the hon. member for Inverness-Richmond (Mr. Carroll) was chairman.

I always thought that if the maritime members had shown a little more co-operation on this question we would have had some redress years ago. This is an extremely cold country. The year before last, it was necessary to use coal for heating purposes for eight or nine months. As I said in 1922, why should we be sending about $56 million in wages, as the amount was then, to the Pennsylvania coal barons? There is an abundance of coal in the maritimes and Alberta. The province of Ontario wanted to use this coal, but since I have been a member of the house protection has prevailed in the form of bonuses, subventions and subsidies.

This bill will aid the producers of coal, and that is good. It exempts them from some of the provisions of the Income Tax Act. The bill contains a provision to allow the governor in council to pass rules and regulations, as to how and when it should apply. I do not believe that is a very good principle for us to follow. As 1 said, this bill is based on a policy of bonuses, subventions and subsidies. It is therefore a national question, and these provisions should be applied to the producers of coal in Alberta. There is no doubt about it, the provisions of this bill will serve a useful purpose by way of assistance to the coal producers.

The motion I proposed for a national fuel supply was that all coal should be mined under the British flag, whether from Wales, the maritimes or Alberta. When we have an abundance of coal in this country, why should we send all those wages to another country? The price of coal has gone up by leaps and bounds. In 1922 anthracite coal from Pennsylvania was $6 a ton. There was a demonstration of Welsh coal at the Canadian National Exhibition. In 1915 a boatload of coal came from Swansea, Wales, during the time of Stanley Baldwin, and the coal was dumped on the dock at Ashbridge's bay, which is in my constituency. This boatload of coal proved that it was an economic way to deliver it if we had the coking ovens for it. I believe this is a national problem. The object of the bill is to assist the producers of

coal in the Atlantic maritime provinces. My motion of 1922 provided an embargo on coal and a fund to aid coking ovens for coal mined and coked under the British flag. I believe the time is not far distant when we shall have to go further than we have gone. So far as possible, we should use coal from the other agencies I have suggested.

I remember when the hon. member for Inverness-Richmond first entered this house in 1922; he was chairman of a committee, appointed after two days' discussion of my coal motion, and he did a great deal along these lines. He has taken a keen interest in this matter. Do not forget that the doctrine on which this bill is based is a system of bonuses, subventions, and subsidies, and that is the only way we can solve our fuel supply problem. It does not matter where the coal deposits are in Canada, I believe the day is not far distant when further aid will have to be extended to coal producers and coking ovens.

Back in 1922, the hon. member for Inverness-Richmond made a splendid report on the coal problem. The only member who rose to support it here was Hance Logan, then a member of parliament, who was afterwards made a senator. I believe there were only two government members who rose in support of the principle of a national fuel supply at that time. Then the head offices of Dominion Coal were moved up to Montreal, for some reason or other, instead of being kept in the maritimes where the situation was so acute. During the first war, I travelled on a special train around lake Erie ports with Sir George Bury of the C.P.R. to inspect the coal depots. During the early days of the first world war there was a coal famine in our city, and the people were suffering a great deal from it. I believe you were overseas at the time, Mr. Speaker. It was a deplorable state of affairs. Even those who were ill found it hard to get a bag of coal during the winter of 1917. The winters are severe in this country, and this winter will be no exception. With the price of coal going up to $22.50, and giving indication of advancing to $25 and with the fourth coal miners' strike of the year in the United States, the winter will be even more difficult.

We want to use maritime coal in our city, and I believe the coking ovens should be adapted to it. I believe there are about

700,000 tons of anthracite coal in the ship channel at Ashbridge's bay now. The mild fall allowed the supplies to accumulate. Formerly that area was a marsh. We have used Welsh coal and Alberta coal in those coking ovens, but we also need maritime coal. The school board wants to use it, and the city

Coal

wants to use it. Everyone wants to assist the minister with this program, because this is an important industry. I do hope something will be done at this session; otherwise it is going to be too late. There should be some direct and immediate aid to the producers in the manner indicated, and 1 believe the principle should be extended to the coal producers in Alberta. We should apply the doctrine that all coal should be mined under the British flag, whether it is in the maritimes, Wales, or Alberta.

Topic:   ASSISTANCE TO PRODUCTION IN ATLANTIC MARITIME PROVINCES
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SC

Ernest George Hansell

Social Credit

Mr. E. G. Hansell (Macleod):

Mr. Speaker, I rise to say a word about this bill, which proposes to grant assistance to the coal mining industry of the maritimes by way of loans. I believe I can say that we support this bill, because the coal mining industry in Canada is in none too good a position. Any assistance that can be given to the industry generally should be looked upon with some degree of favour.

In introducing this measure, the minister indicated that it was in the "national interest" -that was the expression he used. I am at once reminded of the pleas that have been made in this chamber for many years for a national coal policy; that would be, indeed, in the national interest. Over the years, speakers in this house have urged a national coal policy, but it is not so easy to determine what that national coal policy should be. I must say that I have attempted to arrive at a satisfactory answer to that question, and just as I feel that I am on the verge of a solution, I find that I just do not quite make it. There is difficulty in arriving at what would be a good national coal policy in Canada, because there are so many intricate things involved. It is very easy to suggest that we should have a national coal policy, but it is another thing to suggest what that policy should be.

I do not want to be unkind, but during this session I have been waiting for the leader of the Progressive Conservative party to rise in his place and indicate what he would regard as a national coal policy. The reason I have been waiting is that we had the pleasure of welcoming the hon. gentleman into our part of the country a few months ago. I was fortunate in having him come into my own territory. I say I was fortunate because I believe his visit to my constituency had some effect on bringing me back to this house. When he came into our part of the country he was privileged to speak at a meeting at High River. I do not know whether someone had whispered something in his ear about the coal deposits in an adjacent territory; in any event he said in his speech that day, as reported by the press, that if the country looked with favour on

Coal

his party, that party would tackle this coal problem and really do something about it. I have been waiting for him to rise, and I think I shall have to wait a long time before he will be able to make any concrete and acceptable suggestions as to how this problem can be tackled. It is not easy.

I have read a good many reports by commissions that have sat on the problem of the coal mining industry in Canada. I have tried to make a study of them. When I was elected to the House of Commons in 1935 I looked over my constituency. I was not a businessman; I was not a farmer. I was not anything, I suppose. But I found that in the southern part of my riding there was a tremendous coal mining industry. Another part of my constituency dealt with ranching, and another part of it was almost entirely wheat farming. I was not a rancher; I was not a coal miner, and I wondered why my constituents had ever sent me here. I thought: to be an efficient member I shall have to study some of these things. I got hold of all the material I could find, and began to do that. I tried to wade through the mass of material put out by the various commissions that had sat in days gone by, to determine what I might propose in respect to the coal mining industry. Perhaps I have gained some knowledge of the situation. I will say that not one of those reports concluded with a definite and satisfactory recommendation as to an overall national coal policy. If they could not recommend any real solution of the problem, who am I, or who is anyone else, to say that a satisfactory recommendation can be made? I simply say that the problem is a huge one.

The present bill will be of some assistance in relation to a fraction of the problem. In the past the government have met the problem of the coal mining industry by a sort of piecemeal method. I am not saying that in a derogatory way, because personally I cannot see that they could have done very much more than they have done. As I say, the problem is tremendously complex.

There are some questions I should like to ask about the present measure, but I shall reserve them until the bill is in committee. When this legislation is set up to give assistance to the coal mining industry of Nova Scotia I trust that it will not be a matter of putting money in a bag with holes in it. We must take a long-range view of this matter, and, in the assistance offered by this legislation, attempt to bring the industry to a point where it will be placed on its feet and enabled to resume operations over the years with confidence. If we do not do that, in a few years' time the industry will be

[Mr. Hansell.l

coming back to us for more help, or for something else, and a little more assistance will be added piecemeal to what has been done over the years.

I have some reservations in my thinking in respect to the way in which the coal mining industry of Nova Scotia has been carried on in the past. I wonder whether those who are responsible for the industry have done all they possibly could to keep the industry on a solid financial footing. Have they done all they could? If they have not, then the minister should make it perfectly clear to the industry that they must so manage their affairs that they will be worthy of assistance in times of emergency.

I have a coal mining industry in my constituency. In our area of southern Alberta and eastern British Columbia it is bituminous coal mining. The companies operating in these areas have not had the assistance that some other coal mining areas have had. It is true they have had some assistance. I must not forget to say that we have been assisted materially by the government's subvention program in respect to the transportation of coal. It has enabled the industry to reach a market that otherwise they would not have been able to reach. But even though they have been assisted by way of subventions, I believe I can say that the companies there have so managed their industry that they have been willing to take some of their profits and to plow them back, thus reducing what otherwise would have been a higher dividend to the shareholders.

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PC

Arthur Leroy Smith

Progressive Conservative

Mr. Smith (Calgary West):

Do you not

think they have done that?

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SC

Ernest George Hansell

Social Credit

Mr. Hansell:

Yes, they have. That is what I am saying. I do not know whether that has been done in connection with the Nova Scotia coal mines. Perhaps it has been; I am not as familiar with the situation there. I do know, however, that the bituminous mines in southern Alberta and eastern British Columbia have reduced their dividends to a minimum. They have taken that money and plowed it back into their own company by way of capital expenditures, installation of more modern and efficient machinery, and the like.

The coal mining industry there is in a precarious position. I believe I could say that to a greater or lesser degree it is operating on a shoestring, and in a few moments I shall produce figures to show it. Other factors come into the picture which cause us some disturbance. The discovery of oil in Alberta on a larger scale has meant that much of the market that previously had

been available is now beginning to fade because much of the coal had been mined for the railways. The railways are now gradually converting from coal-burning to oil-burning locomotives, a fact that is giving the industry a good deal of concern, not only from the standpoint of the companies themselves being affected, but because of the possibility of its creating an unemployment problem. That is one condition now appearing on the horizon that is giving us a good deal of concern.

With the possible loss of this market they must turn to markets other than the railways. This means that the demand from consumers is for a higher grade of product. What does that involve? It involves the spending of many thousands of dollars for improved cleaning equipment. And before the story is completely told, large sums of money may have to be put into that industry.

I make these observations simply to remind the minister that since he is now proposing a bill for the assistance of the Nova Scotia coal mining industry, he may be called upon for similar assistance to help the coal mining industry in other parts of Canada-and I speak particularly of that portion of it which is in my own territory-when because of adverse circumstances in the industry they are confronted with financial problems.

I say to the minister, and because he is a reasonable man I believe he would agree, that since he has introduced this bill to assist the Nova Scotia coal mines-

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PC

Alfred Johnson Brooks

Progressive Conservative

Mr. Brooks:

May I interrupt the hon. member? He has repeated throughout his speech that this bill is to assist the industry in Nova Scotia. It is to assist the industry of the maritime provinces; and we have coal mines in New Brunswick which need assistance.

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SC

Ernest George Hansell

Social Credit

Mr. Hansell:

I assure the hon. member I did not want to leave New Brunswick out of the picture. I was thinking in terms of Nova Scotia, but I am sure New Brunswick is just as important as any other part of Canada. I thank the hon. member for reminding me of my error. My view is that it is a good thing to assist the coal mining industry wherever it requires assistance. In my further observations I shall try to remember to refer to the maritime industry rather than to the Nova Scotia industry. I am sure the minister will look with some degree of favour upon requests for assistance from the coal mining industry in other parts of Canada.

I should like to make some brief observations concerning the solvency of the coalmining industry in Canada. The figures I shall use may not be exact, but I use them

Coal

in an effort to present a general picture. Figures are strange things. One can clutter up one's speech with so many figures that the subject matter becomes lost-indeed, even Hansard becomes lost when too many figures appear on its pages.

There may be some who would take the view that because a million-dollar coal mining company operates in some part of the country, the coal mining industry is making tremendous profits. In this respect the coal mining industry is no different from any other. When one reads a balance sheet and finds that a company has made so many thousand dollars in a year, or, if it is a large corporation other than coal mining, so many million dollars, he begins to say: What an industry! Just imagine those capitalists making so many millions of dollars in one year! But when one boils down the facts as to how much a company might have made on one unit of production, whether it be in the automobile industry, the textile industry, or some other, it presents an entirely different picture. A small slip one way or the other on the profit per unit may make the difference between making a million dollars in the year, or losing a million dollars.

We must look at the coal mining industry in a similar fashion. On their balance sheets they may be able to show that they make so many thousand dollars per year. But how much per ton do they make? Perhaps that figure would give a different picture. People in eastern Canada who burn domestic coal have to pay a high price for it. Some may say: Someone is making a pile of money on this coal, when we have to pay $15 or $20 a ton for it.

Let us look into that, so far as the bituminous mines are concerned. I have before me the report of what has come to be known as the Carroll coal commission of 1946. Anyone who wishes to familiarize himself with the coal mining industry would do well to read it carefully. It is a voluminous report, but there is an education wrapped up in it. I am not going to comment on the report itself, but I will say that if anyone takes the trouble to read it he will become acquainted with the coal mining industry.

On page 272 of the report, reference is made to profits that have been earned by the Alberta and eastern British Columbia bituminous coal mines. I have summarized these figures. Ten companies made an average profit of 23-5 cents per ton, but two of them made profits of from 30 to 53 cents a ton. Leaving those two companies out of the picture, the remaining eight companies made an average profit of only 16J cents per ton.

Coal

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CCF

Clarence Gillis

Co-operative Commonwealth Federation (C.C.F.)

Mr. Gillis:

How many tons did they

produce?

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SC

Ernest George Hansell

Social Credit

Mr. Hansell:

I referred to that a little while ago. They may have produced a good many thousands of tons and in the end made some profit, but I think my hon. friend will admit that if the cost of production went up just 17 cents a ton they would be facing a loss of half a cent per ton on the thousands of tons they were mining. That is something we have to keep in mind, and that is the point I am trying to make.

It has been said that the cost of production in strip mining as carried on in western Canada has been tremendously reduced. I think it can be granted that the cost of carrying on this type of mining is less than the cost of other types of mining, but it is shown on page 274 of the report that the average profit per ton for strip mining was 20 cents, an amazingly low figure.

On page 279 of the report, reference is made to the ancillary operations of coal companies, and it is indicated that this is one thing that helped to keep the coal mining industry aboveboard. This paragraph reads:

A very large proportion of the revenue of most companies is derived from sources other than the actual mining of coal.

Over the fifteen-year period the combined net earnings on coal mined of all companies amounts to $790,088.35, or one-half cent per ton on all coal sold. From other sources the coal companies earned $21,671,440.72, or 12 cents per ton.

These sundry revenues arise from the operation of light and water utilities, through rentals of buildings, apartments, houses and hotels, sale of foreign coal, production of coke, briquettes and by-products, and from investment earnings.

Revenues included under this heading, however, are definitely connected with, and are attributable to, the coal operation, as they emanate from the townsites in which the mines are located and from the investment of reserve and surplus funds set aside or earned throughout the history of the companies.

I thought that would be an interesting paragraph to place on the record. I should like to refer now to page 281, and quote a paragraph which deals with the profits made by the industry. It reads:

The foregoing general review, supplemented as it is with related material on most of the mining companies in Canada, clearly indicates that the operations of the industry as a whole have not been too profitable. Involving an investment which at the end of 1944 amounted to approximately $83 million and in respect of sales of 180 million tons over the fifteen-year period, the Canadian coal industry has had a return of approximately 10 cents per short ton. While this is the over-all result, a geographical distribution of these figures shows that the eastern companies (maritimes) sold 52 per cent of the coal and only made a net profit of one-third cent per ton, while the western companies (Saskatchewan to British Columbia) sold 48 per cent of the coal and realized a profit of 191 cents per ton. These figures are before any provision for depletion.

(Mr. Hansell.] _

The foregoing results are after including production subsidies paid by the emergency coal production board and other governmental assistance totalling approximately $15 million, of which approximately $13,800,000 was paid to the eastern companies and $1,200,000 to the western companies.

I skip just a small portion and continue:

It is only fair to observe that subsidies paid by the emergency coal production board were in considerable measure due to the wartime price ceiling policy.

Now I should like to put in a plug for private enterprise. Nowhere in this report is there any recommendation that the nationalization of our coal mining industry would solve the problem. If anything, the report would lead us to believe that the commissioners were adverse to the nationalization of the coal mining industry in Canada. Even the minority report by Mr. Morrison, one of the commissioners, indicates that the nationalization of the industry would not solve the problem.

I shall have a few questions to ask when the bill is in committee. We favour the measure because we believe the coal industry of the maritimes is in need of assistance. I repeat that we may ask the minister to look with some favour upon the taking of a similar step in respect to the western coal mining industry if the necessity arises.

Before I sit down I should like to compliment the hon. member for Cape Breton South (Mr. Gillis) for his able speech. He is from the maritimes, and he has spent most of his life in a study of the coal mining industry, having played a very important part in it. He speaks with some authority. No doubt the minister will take into consideration what he has said, and perhaps will also give a nod to what I have said.

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LIB

John Horace Dickey

Liberal

Mr. J. H. Dickey (Halifax):

Mr. Speaker, I should like to say a few words on this important legislation. First of all may I compliment the Minister of Trade and Commerce (Mr. Howe) and the government upon the steps which they are prepared to take to improve and assist the coal mining industry of the maritime provinces. The industry is a basic element in the economy of the province of Nova Scotia. Any steps which are taken to assist it are of the utmost importance, not only to the actual areas in which the coal mining operations are undertaken, but also to the province as a whole. For this reason all hon. members from Nova Scotia, no matter what constituencies they represent, are interested in legislation of this kind, and are prepared to support it vigorously.

I do not think hon. members generally could appreciate the basic purpose of the present legislation without some further

comment on the question of production and markets which was raised by the hon. member for Cape Breton South (Mr. Gillis). He said that in his opinion the problem was really one of markets and not of production. He views the present legislation as attacking the question of production and not the question of markets. My view is that the two questions of production and markets are so completely interrelated and interdependent that they cannot be separated, and that the purpose of the legislation and its results will affect both production and markets. I think the truth of this is demonstrated when we consider just what a market is. After all, a market is simply a place where there is a demand for a certain commodity, and where you can sell your product at a price which is competitive with the alternatives available in the same area.

The purpose of mechanization and the improvement of production in the mines of Nova Scotia, New Brunswick and other parts of the maritimes is not only to increase the volume of production but also to reduce the unit cost. That has a direct relation to the ability of the maritime producers to place their product in the areas which they can serve, at a price which is competitive with the other coals and heating and power facilities that are available. It is my belief and contention that the purpose of the bill is to permit the production of coal in the maritime area at a lower unit cost so that the product of our mines will be available and will compete more readily with United States and other coal.

The hon. member for Gloucester (Mr. Richard) said something a few moments ago which illustrates the point I have in mind. He spoke of the production of electric power from coal in the maritime area. One of the drawbacks has been the high cost of the coal required to run steam plants. If the result of the bill is that coal will be available in sufficient quantities, and at a low enough unit cost to make the production of electric energy from steam power more economical, then the mines and the miners will benefit together with other users of electric energy in the maritime area.

I think that the bill is a basic and really constructive measure. Whether or not it will achieve its purposes depends upon a number of factors. The operators of the coal mines will have to take advantage of its provisions, and they will have to see that their operations are conducted on a proper businesslike basis. The coal miners will have to co-operate to see that the new facilities which are made available are used for the benefit of the operations generally and in the public interest. Last but not least, the operators and the 45781-161

Coal

various governmental agencies interested in the production of these mines reaching markets must continue the necessary activities to see that the production is used to the greatest possible extent in the areas to which it can be properly transported and put to economic use.

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PC

Alfred Johnson Brooks

Progressive Conservative

Mr. A. J. Brooks (Royal):

Mr. Speaker, I have spoken on this subject at different times in the house, not on the present measure but with respect to the coal situation generally in my own province. I was indeed pleased to hear the hon. member for Gloucester (Mr. Richard) champion our cause. I am particularly interested in the subject because the small industry which we have in the province of New Brunswick is partly in my constituency, and partly in the constituency of the Minister of Veterans Affairs (Mr. Gregg). As the hon. member for Gloucester pointed out, the coal industry of the province is small, and produces not more than 500,000 tons a year; nevertheless it is most essential to our whole economy.

The area around Minto has grown into a large and populous centre, and it depends entirely on the coal industry. To show how much the area has increased in size, may I point out that last year one of the largest schools in the province of New Brunswick was built at Minto. The Minister of Veterans Affairs was there to lay the cornerstone. The school cost over $1 million, and before that they had a large consolidated school which was one of the finest in the province. Both schools will be used to capacity. The area is very important; and it is necessary that the coal mining industry of this province be maintained in order that such communities as Minto may continue to be prosperous, and also, as was pointed out by the hon. member for Gloucester, in order that our whole economy may be maintained.

This morning the minister said this legislation was intended to assist in the subvention area. I assume he means the maritime provinces, and that New Brunswick will be included as well as Nova Scotia. Am I correct in that understanding?

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December 1, 1949