March 20, 1950

CCF

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

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

Mr. Knowles:

Before the hon. member sits down may I ask a question? I accepted his suggestion that I wait until he finished. When the hon. member was quoting from the remarks of the hon. member for Vancouver-Quadra made on April 8, 1949, why did he omit any reference to what the hon. member said as reported in the second column of page 2513 of Hansard?

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?

An hon. Member:

You read it.

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CCF

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

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

Mr. Knowles:

The hon. member read from the first column and also from the next page, but he did not quote what the hon. member said-

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LIB

Edward Turney Applewhaite

Liberal

Mr. Applewhaite:

The hon. member has asked his question and I will answer it. I was carrying on a certain line of argument, and when the hon. member for Vancouver-Quadra was wise enough to support my argument, I quoted him.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. George A. Drew (Leader of ihe Opposition):

Mr. Speaker, I am glad that I offered to stand aside until the hon. member for Skeena (Mr. Applewhaite) had spoken, because if it had been necessary to hear an argument in this house as to why there should be a demand for a procedure other than that now before the house, it was contained in the remarks that we have just heard.

I should like particularly to refer to one lofty observation the hon. member made to those less capable of understanding the niceties of debate. He asked hon. members to restrain that impatience which always marks the defenders of any indefensible cause. May I underline those words and remind hon. members that they are excellent words as applied to the impatience of other members of this house when certain principles are insisted upon in connection with private legislation.

I am entering this debate at this time because no one with the slightest appreciation of what has taken place can lopger regard

20, 1950

Alberta Natural Gas Company these bills, and particularly this one, as private bills. It is obvious that they have the support of the government, not simply the concurrence of individual members of the government. It is surely not without significance that the bill now under discussion is sponsored by the parliamentary assistant to the Minister of Mines and Technical Surveys (Mr. Maybank). That gives it at least a semi-official, if not a fully official, position before this house. It would be surprising if the parliamentary assistant of the department which handles minerals in this country were to sponsor a bill which did not have more than passing approval by the government. That may be quite all right, but let no one suggest that the government has no more than an ordinary interest in this bill. That interest has been shown by the intervention of the Minister of Trade and Commerce (Mr. Howe) on more than one occasion, and by other hon. members of this house.

There is a much wider principle involved here than that which has been discussed today. Before discussing what I regard to be the basic and fundamental principles involved, may I suggest that it was most improper for the hon. member for Skeena to speak of those who, as he said, might be prompted by friends of the applicants for a particular bill. If there is going to be any suggestion of special interest in these bills, then I suggest, to the hon. member who has just spoken that the Minister of Trade and Commerce has indicated a definite interest in only one of the bills now before the house, the bill under discussion at the moment.

I want to refer in some measure to ancient history with reference to what is under consideration in the two pipe-line bills now before the house. First of all, I ask hon. members to recall that the measure now under consideration is not a bill dealing only with gas pipe lines. It is a bill which also confers the power to build an oil pipe line. Therefore we should bear in mind the fact that the measure has wider possibilities than merely the handling of gas. Of course that has some relation to the question whether it is to be used for export purposes or merely within our own country.

A great deal has happened in Canada since the first oil well came into production at Petrolia in 1858. A great new industry developed in that area. Gas became a cheap and efficient fuel for homes, places of business and industries throughout a considerable part of southwestern Ontario. The oil industry became a most important one, and as a result of that discovery the Imperial Oil Company came into existence and has continually

Alberta Natural Gas Company expanded ever since that time. Today there is very little oil in that area, and there is real concern about the supply of gas, which requires to be supplemented by supplies from the United States. What has happened there, where the first oil and gas production came into being, offers many lessons which should be borne in mind in dealing with these matters. Both gas and oil are wasting assets. Gas and oil become exhausted.

The other side of the picture of course is that tremendous development goes hand in hand with adequate supplies of gas and oil. Every hon. member of the house is aware of the fact that there is a great chemical industry in the Sarnia area related to the production of oil now supplied so largely from the United States. That is something which can be paralleled in Alberta and in other areas where gas is found today. British Columbia, with its vast resources of raw materials, can make most effective use of this cheap fuel, as also can Saskatchewan and Manitoba. Nor is there any reason why the possibility of the use of gas as a fuel for industry, and particularly for chemical plants, should be limited to the provinces I have mentioned. At the present time a great gas pipe line is being built for a distance of 1,800 miles from Texas to the city of New York, a longer distance by far than it would be necessary to carry gas to the lake ports in the northwestern section of the province of Ontario.

There are vast possibilities for the use of this cheap fuel within Canada in the development of Canadian industry. I was amazed to hear the hon. member for Skeena suggest that the arguments that have been put forward in opposition to this measure sounded like "no truck or trade with the Yankees." That is simply a sample of the speoious type of argument which has been put forward to meet the sound reasons advanced in favour of the development of Canada's resources for the advantage of Canadians themselves. At no time have I heard any suggestion that, when Canadian needs were satisfied, we should not export such surpluses as we may have from time to time; but gas is power, power means production, and production means income and the possibilities of new population in different parts of the country.

Our first concern should be for the development of Canada, just as the first concern of the government of the United States has always been for the development of that country. While the United States have made available to Canada supplies of oil, gas, coal and other products which we require, they have never left any doubt that the export of their raw materials and other products must

fMr. Drew.]

always be related to the primary consideration of the development of their own country. No United States citizen will raise any question about the soundness of the assertion of that same policy in Canada. Certainly we want to have friendly dealings with them. Certainly we want to have an exchange of surpluses with them, but surely it is inconsistent for us to export vitally important resources from Canada until we have first assured to our own people those resources which are in short supply. We have imported, and will continue to import, enormous quantities of oil, and we shall continue to import gas. Certainly we should be sure that we use our resources of gas and oil here in Canada.

A Canada-first policy does not mean Canada only. It means that we make use of these resources to the greatest advantage of our own people before selling therq to others. After all, the same policy has been followed as to our forests. In Ontario, Quebec, and other provinces whence these resources are exported in such large quantities, provisions are in effect which insist that to the highest extent possible the raw wood shall be processed in Canada. That policy has not been seriously objected to in the United States. It is a policy which has built up the great paper, pulp and other wood industries of Canada. We should make sure that we build up other industries in Alberta, British Columbia, Saskatchewan, Manitoba, Ontario and the other provinces of Canada, whether the resource be gas, oil, or any other basic commodity we have in Canada.

There are vast possibilities. In every case of this kind let us realize that cheap fuel means cheap production, and cheap production means not only the possibility of the development of new production within our own country, but also the possibility of export to other parts of the world in highly competitive lines.

A great deal has been said, and more will be said, about freight rates. What better way is there to overcome the problem of freight rates than to manufacture and use our raw materials right at the source, with the power available within our own country, so that we can ship the finished product when it has the highest value in relation to its volume? The best way to overcome the difficulty of freight rates is for the manufacturing to be done from the raw materials right in Alberta, British Columbia, Saskatchewan and Manitoba, and to send the products in their most valuable form to the rest of Canada. That is true in this case just as it is true in the maritime provinces, where they have possibilities of the development of power to which I made reference on other occasions.

What we are considering here is not only a gas pipe line but an oil pipe line as well; and it seems to me we should have a great deal more information before being asked to pass upon this application. We are told it can go before a committee, but the committee is not going to find out what route is going to be followed. The Minister of Trade and Commerce (Mr. Howe) has stated that to his knowledge at least five routes have been surveyed by the company making this application. Therefore the house is not going to be in a position to pass judgment upon the route that will be followed.

This brings me to an observation made in this house a year ago when another of these bills was before us. If this house is not going to be asked to exercise its judgment in relation to the route to be followed, this bill should not be before us at all. Right in the act under which these pipe lines obtain their authority it is made quite clear that there is a similarity to the procedure under the Railway Act. That is to be found in section 4, where it says:

The provisions of the Railway Act relating to sittings of the board-

That is the board of transport commissioners. -and the disposal of business, witnesses and evidence, practice and procedure, orders and decisions of the board and appeal therefrom to the Supreme Court of Canada are applicable with respect to every inquiry, complaint, application or other proceeding under this act, and the board shall exercise and enjoy the same .jurisdiction, powers and authority in matters under this act as are Vested in the board by the Railway Act.

That would indicate quite clearly that an application is to be dealt with in a similar manner to an application under the Railway Act; and it is obvious why that should be so. These pipe lines become great common carriers, not just for one oil company, not just for the products of one or two designated producers, but common carriers for oil supplied to them. The principle is the same.

If we come to the practice in this house with respect to either railways or canals, if an application is made for a charter for a new railway or a new canal a map must accompany that application so that hon. members in deciding on the charter know the route which is to be followed. Surely if that is sound in the case of a charter for either a railway or a canal, or an addition or change in relation to it, that principle is equally sound in this case. The very fact that the practice before the board is to be similar to that under the Railway Act should make it clear that the practice and procedure in this house in dealing with a bill of this kind should be the same.

20, 1950 90S

Alberta Natural Gas Company

We are told that applications were dealt with last year, and that if we insist upon following this procedure now we are granting a monopoly. I wish to make it clear, Mr. Speaker, that the remarks I make now apply with equal force to those applications which already have been made. If mistakes were made in the past that is no reason for continuing to make those mistakes. As it happens no confusion arises in regard to the carrying of gas or oil west, because the board has not yet disposed of the application of Westcoast Transmission Company Limited, which obtained a charter from this house last year. Certainly I would strongly urge that every rule made applicable to these two companies whose applications are now before the house should apply with equal force and without reservation to the company to which I have referred.

But, Mr. Speaker, I should like also to be sure that all these companies are going to be considered equally. I think that is something every hon. member would like to be quite sure about. In that respect I noticed that the Minister of Trade and Commerce had this to say at page 850 of Hansard of Friday, March 17:

Several members of the house have given information that they obtained from the principals behind the bill, and I have given information that I obtained from the principals behind the bill. X might say that I cannot understand the unnatural fear that certain hon. members have of letting these men come before a committee of the house where members of the house could find out what they intend to do.

The principals there referred to are the principals behind the bill under consideration. The remarks then made were not on any bill then before the house, but were in reply to a question asked by the hon. member for Fraser Valley (Mr. Cruickshank). That, then, carries us back to a discussion that took place in the house on November 15, 1949, and I should like to quote again from the statement by the Minister of Trade and Commerce as it appears at page 1806 of Hansard of that date:

A good deal has been said about possible routes of the pipe line. A good many uninformed assertions have been made in the house in that regard. I know nothing about the pipe line company which is asking for incorporation under this bill; but I do know something about the interests that are asking for incorporation under another bill now before the house. I know that that company has surveyed five routes from Alberta to the Pacific coast, and that one of them at least is an all-Canadian route.

I then pass over certain further remarks and quote again:

I should like to know much more about the incorporation asked for in the bill about which I am speaking than I know at the present time. But the place to obtain that information is in the committee on railways, canals and telegraph lines to

Alberta Natural Gas Company which this bill will be referred, and before which the sponsors of the bill will appear to make their case for incorporation.

Further on the minister said:

The province of Alberta will, in the end, decide with which incorporated company it wishes to do business.

I might explain that those remarks were made when the Prairie Transmission Lines Limited bill was before the house, and the principals to whom the minister referred on that occasion were those behind the bill now under consideration, that is, the bill to incorporate Alberta Natural Gas Company. In other words the minister quite frankly indicates his knowledge and interest-and that interest is quite natural in regard to activities of this kind-and it is clear that he has been dealing with or that he knows about the Alberta Natural Gas Company but he does not know so much about the other company. From this it seems quite obvious that the minister has a much greater interest in this company than in the other one.

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

I might explain that the representatives of one company called on me and told me their story, but that was not so in the case of the other company. I have not the vaguest idea who is behind the second bin.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

I accept that statement, but I must say that if the principals behind the other bill did not call upon the Minister of Trade and Commerce, he must be the only member upon whom they did not call, because they were moving around here fairly freely for some time.

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

Who are they?

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

The principals are named in the bill. I do not know anything about them, beyond the fact that there were certainly people around here during the last session trying to see everybody about this matter. It may be that the minister avoided seeing them, and perhaps some others did as well.

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LIB

George Alexander Cruickshank

Liberal

Mr. Cruickshank:

On a question of

privilege, in fairness to the minister, I should like to say I do not think that is a correct statement. I sponsored the company seeking incorporation last year, and we did not think it necessary to communicate with individuals. We had a good case, and we let it go at that.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

Of what company is the member for Fraser Valley (Mr. Cruickshank) speaking?

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LIB

George Alexander Cruickshank

Liberal

Mr. Cruickshank:

I sponsored the bill for

the Westcoast Transmission Company, whose directors are principally business and financial men in the province of Alberta.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

I am speaking about the other company whose bill is before us, Prairie

Transmission Lines Limited. I only interjected that comment because, as a matter of fact, it became something of a joke around here, the extent to which members were being met in the lobby and asked-

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LIB

George Alexander Cruickshank

Liberal

Mr. Cruickshank:

It was far greater this year than last year.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

-to listen to certain arguments. I am not suggesting there was anything improper about that. It is quite proper for those who have business before the house to inform members on the subject; it is helpful if they do that. I am only pointing out that, if the minister has not heard any arguments on behalf of that company, I can assure him others did, and in the way I have mentioned.

I do want to point out that if the bill is sent to committee, the members of the committee will not get detailed information as to the route. The committee will be able to find out who the principals are, but their names are already shown. Committee members will be able to ask other questions as to the company's ability to carry out its obligation, the general purposes and so on. It is still a fact that the members of this house will not have before them the information which is an essential requirement in the case of an applicant for a railway, or a canal, and which is made a similar procedure by the words of the governing act.

Let us see what we are being asked to do. We are not just being asked to pass a bill which incorporates a company. We are being asked to pass a bill which gives to the people securing that incorporation extremely wide powers. I think those powers should be on the record, so that no one will be in any doubt as to what powers are being conferred when parliament passes this bill. Section 7 of the Pipe Lines Act should be on the record along with the arguments which are being made. The Pipe Lines Act was passed on April 30, 1949, and section 7 reads as follows:

7. A company may, for the purposes of its undertaking, subject to the provisions of this act and the special act,

(a) enter into and upon any crown land without previous licence therefor, or into or upon the land of any person, lying in the intended route of its line, and make surveys, examinations or other necessary arrangements on such land for fixing the site of the line, and set out and ascertain such parts of the land as are necessary and proper for the line:

(b) purchase, take and hold of and from any person any land or other property necessary for the construction, maintenance and operation of its line and alienate, sell or dispose of any of its land or property that for any reason has become unnecessary for the purpose of the line;

(c) construct, lay, carry or place its line across, upon or under the land of any person on the located line of the company pipe line;

(d) join its line with the pipe line of any other person at any point on its route;

(e) construct, erect and maintain all necessary and convenient roads, buildings, stations, depots, wharves, docks and other structures, and construct, purchase and acquire machinery and other apparatus necessary for the construction, maintenance and operation of its line;

(f) construct, maintain and operate branch lines, and for that purpose exercise all the powers, privileges and authority necessary therefor, in as full and ample a manner as for a company pipe line;

(g) from time to time alter, repair or discontinue the works or any of them, mentioned in this section, and substitute others in their stead;

(h) transport oil or gas by company pipe line and regulate the time and manner in which oil or gas shall be transported, and the tolls to be charged therefor; and

(i) do all other acts necessary for the construction, maintenance and operation of its line.

Those are extremely wide powers, Mr. Speaker, to confer upon a company when we do not know where those powers are to be exercised. I do not believe it is sufficient for the members of this house to be told that this matter is to be passed upon by the board of transport commissioners; that the Minister of Trade and Commerce must give an export licence before the gas can be exported; or that the government of the Province of Alberta must approve of the delivery of oil to this particular pipe line. After all, the members of this house cannot delegate their responsibilities to others; but that is what we are being asked to do if we give an open charter of this sort, without any definition of the route or circumstances under which these extremely wide powers are to be exercised.

With this bill before us, the members of this house are not fully aware of what the ultimate, detailed application before the board will be. We know that a great many changes may take place, because a great many changes did take place in the routes under consideration in the case of the application of the Westcoast Transmission Company, which was granted a charter last year. Let us see what did happen in that case, so that no one will be under the impression that a company would be tied down to any route which it gave a committee to understand it would follow.

The Westcoast Transmission Company Limited was granted a charter by parliament last year. The company has made three applications since then to the board of transport commissioners for approval of a pipe line. The first application was filed on May 10, 1949, and that asked for a line from Athabasca to Vancouver, and a branch line down to Blaine. As hon. members know, this town is on the border, and three-quarters of it is in the state of Washington. That application was withdrawn on November 15, 1949. The second application was made on May 11, 1949, but no action has been taken on that application. It called for a line from 55946-581

20, 1950

Alberta Natural Gas Company Edmonton through the Crowsnest, following the route of the Canadian Pacific. It misses Macleod, does touch Cranbrook and goes to Kingsgate. Kingsgate is also on the border. This plan also called for a branch line from Kingsgate to Trail, and a map filed before the board in that case shows the pipe line continuing into the United States to Sand-point, Idaho, a little over 50 miles from Spokane.

A third application was made on October 13, 1949, by this same company. That called for the route to go through the Yellowhead pass, from Edmonton to Edson, Jasper, to Tete Jaune Cache, B. C., south to Vancouver and also a branch line to Dawson Creek, B. C. That application was heard on November 23, 1949, and adjourned to February 21, 1950. When it came up on February 21, 1950, it was then adjourned sine die and that is where it stands. I think it is important that we bear that fact in mind, because the concern of the members lest any monopoly has been created is not borne out by the actual situation. They are no farther along than are the present companies; and any observation that I make applies with equal force to any one of these companies.

But we are not leaving this matter in thin air. There is a simple procedure which should be followed. If this is not to be dealt with in exactly the same way as an application on behalf of a railway or on behalf of a company that intends to construct a canal, where they file their map, and that is before the members of parliament, then I submit that there is an extremely simple procedure which should be followed. There should be an amendment to the Pipe Lines Act, and that amendment should provide that the companies referred to in these procedures will be companies which have obtained a charter under the dominion Companies Act. In other words, if the members of parliament are not to exercise any judgment, if they are not to be given the facts upon which they can exercise some judgment, then there is no reason why this incorporation should not be granted in precisely the same way that incorporation is granted to any other applicant under the Companies Act. It should simply emanate as an administration procedure from the department of government that grants charters. Upon complying with the requirements as to information which is necessary for the purpose of obtaining a charter, they should obtain a charter in the ordinary way. Then they should go before the board of transport commissioners and make their application. We would then not be called upon to go through the pretence of exercising some judgment in

Alberta Natural Gas Company regard to bills which are before us but which do not give us information upon which any judgment can be exercised.

I hope that no one will suggest that we are standing in the way of charters being granted. Before any hon. member, whether it be a niinister of the crown or any private member on the Liberal side, suggests that we are standing in the way of companies getting incorporation so that development can be proceeded with in this country, let them give us some sound and understandable explanation why that simple procedure cannot be followed. It would save a great deal of time in this house; it would bring this debate to an end, and that seems to be a matter of great concern to the government and to some others; it would carry this procedure forward on a proper and sound basis; and it would do away with any suggestion that the members of this parliament are being used as rubber stamps to give a high degree of authority to those who are applying, and that they would be giving incorporation by parliament itself, which seems to have a strangely useful value when the financing stage arrives.

I want to make it clear that I do not think that the discretion of the members of parliament should give to any applicant that added measure of authority that comes from parliamentary responsibility, for the purpose of carrying out their financial arrangements with what appears to be an added measure of authority granted in that way. The charter can be a charter with all the powers conferred by the Pipe Lines Act. The amendment is simple. It simply needs to say that the company referred to in the act is a company with a charter granted under the dominion Companies Act. It seems to me that the government should have some reason for not following that course before it asks us to deal in this way with an application which will give us such limited information.

This is not something about which there has been no discussion. Some suggestion was made this afternoon that there had been nothing but vague generalities. But there are more than vague generalities in connection with this matter. I am not putting before parliament any one publication as having any special authority; but hon. members who have been following the discussions on this matter must have noticed that there have been in responsible publications a number of discussions which indicate that there is going to be substantial export of oil down from Alberta, through Montana, Washington and into Oregon. I am not suggesting for one moment that there should not be such export as long as our own requirements are first met and assured indefinitely.

I want to refer to a drawing which appeared in a publication which enjoys a good reputation for accuracy and responsibility. I refer to U.S. News & World Report. In their issue of December 2, 1949, there is a drawing which shows in black the oil pipe line from Edmonton to Superior as one which has already been granted, and then it shows the line down from Edmonton to the border at the junction between Montana and Idaho, then on into the state of Washington to Seattle, down through Tacoma to Portland. There is no line shown to Vancouver or in fact to the west.

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

Is that not the Westcoast

Transmission Company line that my hon. friend just described?

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

No.

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

Down through Kingsgate?

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

No. This does not give the name of any pipe line. I was under the impression that this is a line which has been under discussion in some way. It refers to this as a proposed line, but it does not mention the name of the company at all. I would suggest again that we bear in mind that these applications are for oil lines as well as for gas lines.

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Mr. Howe:

Oh, no.

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March 20, 1950