March 19, 1956

HYDROCARBONS PIPELINE LIMITED


The house in committee on Bill No. 151, to incorporate Hydrocarbons Pipeline Limited- Mr. Weaver-Mr. Robinson (Simcoe East) in the chair. On clause 5-Pipe lines legislation to apply.


LIB

William Alfred Robinson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

When tfie house resolved itself into committee of the whole earlier this

Private Bills

day it was unanimously agreed that the committee should let clause 5 stand and that it should meet again this day on the bill.

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LIB

George Dyer Weaver

Liberal

Mr. Weaver:

Mr. Chairman, a short while ago when we were dealing with this bill the hon. member for Calgary North asked a question with respect to the company being a common carrier. In asking the question he stated that he had gone over the evidence and had seen no reference to the matter. Not having a copy of the evidence handy, I asked that the clause be allowed to stand for the time being. I now have a copy of the evidence in my hand. At page 41 the hon. member for New Westminster questioned Mr. Deacon about this very matter, and I find there the following:

Q. How many individual distributing firms are in competition in each of the provinces?

This is just to give the background.

A. There is a tremendous number, but there are probably only three or four substantial ones. However, there is a great number of independent ones, and our fear about the industry in the past has been that because of the great number of independents there were no standards of safety, no standards of service provided, and that the public did not have confidence in this form of fuel. What we want to do is to create a uniform operation across the provinces that people will feel is a substantial one and can look upon it for their supplies. You may have noticed last fall when a shortage of propane existed in western Canada, that in Alberta there were two companies which still had supplies, and ours was one of them.

Q. Is it your intention to bring these other companies in, or permit them to become shareholders within your firm?

A. Anybody can buy stock in our company.

Q. I realize that. You can do that through a brokerage firm of course; but is it your intention to take in some of these companies which have quite an investment? If you start to come in with a guaranteed supply, they will automatically find that it assists their business and that it will provide investors?

A. We have been supplying them in Alberta when they ran out of supplies. They could come to us and take our supplies, and we helped them so that they could fill their orders.

Q. You will still let them keep their charters?

A. Naturally.

Q. Or become your distributors, in other words?

A. They will be able to buy from the general pipe line at the same price as we could, as a common carrier, make the product available to anyone.

Q. That is my point. It is a common carrier and they can become companies if they so desire for the distribution of that product in any municipal district if they have a charter?

A. Yes.

I think that should cover the point the hon. member raised about the pipe line being a common carrier. I was sure in my own mind that was so but I wished to check on it.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

From what the sponsor of the bill has said, t take it that the company is prepared to apply to the board of transport

[The Chairman.]

commissioners to have this pipe line, if and when built, declared to be a common carrier. As to the answer given us to the effect that it is a common carrier, perhaps I should point out at this stage that such is not the case until either the company itself, the government or some other interested party has applied to the board of transport commissioners and they have declared this pipe line to be a common carrier. In other words, the position with regard to pipe lines being common carriers is not what I had personally understood it to be. I understood that it was laid down in the act of incorporation that they were to be a common carrier or that the matter was covered under the general pipe lines bill whereby they would automatically become a common carrier. On looking up the law on the matter I find that apparently they do not become a common carrier unless this application is made to the board of transport commissioners. From what the sponsor has said I would take it that the company had either already done that or were prepared to do it when the charter was granted so that it would be ensured that this pipe line would be a common carrier. Is that correct?

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LIB

George Dyer Weaver

Liberal

Mr. Weaver:

Mr. Chairman, if it will meet with the wishes of the hon. member, I can say that the company will be prepared to apply to the board of transport commissioners to have it declared to be a common carrier.

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PC
LIB

William Alfred Robinson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Shall the clause carry?

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Clause agreed to. Preamble agreed to. Title agreed to. Bill reported, read the third time and passed.


ECONOMIC REHABILITATION

REQUEST FOR PROVISION OF ALTERNATIVE EMPLOYMENT WHEN PRINCIPAL INDUSTRIES CLOSE

CCF

Clarence Gillis

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

Mr. Clarence Gillis (Cape Breton South) moved:

That, in the opinion of this house, the government should give consideration to the advisability of providing for the economic rehabilitation of people living in communities and areas in Canada where extreme hardships are resulting from the closing down of the principal industries, such rehabilitation to be achieved through direct government assistance for the establishment of additional or alternative industries in the areas concerned or, if such measures do not fully meet the problem in a given community, to assist people in the area concerned to resettle in other communities where alternative employment can be provided.

He said: Mr. Speaker, I think this is the first time that a resolution of this kind has appeared on the order paper. It is rather broad and all-inclusive. I might say that it presupposes that the government take a square look at that subject matter in all areas in Canada where industry is developed on wasting resources which can be built up to a certain peak but which later recede, thus leaving great communities as ghost towns. It is a timely subject, in my opinion, because the Gordon commission is now making an economic survey of Canada and no doubt will be studying this subject and making recommendations on it.

This resolution covers many sections of Canada and there is a principle involved. For example, with regard to gold mines in northern Ontario, companies will be formed and they develop communities. The investor who puts a certain amount of money into the exploitation of a natural resource like gold, coal, nickel or any other mineral in the ground, over a period of years can get his money back and maybe a great deal more by way of profit. When the resource runs out, we find ourselves in the position of having built towns like Kirkland Lake in Ontario or Glace Bay in Nova Scotia with a population of 28,000 or 30,000. Examples can be given from British Columbia right down to Cape Breton island. The greatest investment in the community is made by the people themselves, the 28,000 or 30,000 of population who have assembled in that area, based on the particular resource. People build homes and put a lifetime of savings into them. Churches and schools are built, railroads are developed and there is a huge investment there on the part of the Canadian people themselves. The investor, who may live in another part of the country or in another part of the world can perhaps make himself a million dollars out of that resource; he can take that money, go down to the Bahamas and live there for the rest of his natural life where he is not even obliged to pay taxes.

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CCF

Major James William Coldwell

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

Mr. Coldwell:

Income tax.

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CCF

Clarence Gillis

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

Mr. Gillis:

Yes, income tax. But the people are left there with their investment on their hands. It is not a liquid investment. In a community like that real estate is valueless once the community peters out. That is the kind of thing this resolution is aimed at this afternoon. It is moved merely to provoke discussion and to cause the members of the house to think about the .problem, more particularly the members of the cabinet. Its purpose is also, of course, to get something in the press to awaken our people to the necessity of action by government with respect to this particular problem. It is not one that

Economic Rehabilitation develops over night. I know we have gone through this experience and have been going through it in Nova Scotia in the mining community for the past 25 years. It has been a severe problem. Many communities have gone out of existence, with the people's investment lying there valueless.

I listened here a couple of weeks ago to the hon. member for Timiskaming (Mrs. Shipley) and on a television program I saw her doing an excellent job on this very subject. I thought, "That is another part of the country that is far removed from the part in which I live but this lady, a member of the government party, on that television program is saying exactly the things that I would say if I were there in her place". I merely mention that matter to indicate the fact that this is not a parochial matter as far as a discussion in his house is concerned. I am more particularly interested in my own end of the country. That is natural. In this house we have members from every section of Canada. If during the course of this discussion they can call to mind circumstances similar to those that I am going to describe in my own province, I hope each and every one of them will get to his feet and make a contribution to this debate. I think it is a subject at which we must take a square look. I think we must avoid repeating the mistakes of the past in allowing communities to fall into decay, with the consequent waste of millions and millions of dollars of investment and hard work on the part of Canadian citizens.

Of course, I might stand up and make a speech. Everybody would listen and after I was finished the only reaction would be that it was a good speech or a bad speech; it was a provocative speech or it was not. I do not believe any speech is worth while unless it is provocative. If the only reaction to what a speech contains is that it was good or bad, the speaker wasted his time and the time of the house. I am not, therefore, going to make a speech. Being a member of this group and tagged with wanting the government to do everything, I am going to call a few impartial witnesses to support the idea that the government should take a square look at this question of rehabilitating communities that are based on resources that are wasting resources, where huge investments are made and then the resources allowed to peter out.

During the last 25 years in my own part of the country I have seen many mining communities fall by the wayside. Nothing was done to compensate the people who lived in those areas. Many of these people had to sacrifice their properties, which represented a lifetime of saving and leave for other parts of the country or go to the United States. I think it is time we stopped that kind of thing.

Economic Rehabilitation I often think when we are talking about increasing our contribution to the Colombo plan and making more funds available for technical assistance in other parts of the world-I am in favour of that-that it is difficult to sell that idea to a person living in a town like Kirkland Lake or Glace Bay where you have 800 or 900 miners suddenly uprooted. There is no fund to do anything for them except the little that has been done by the Department of Labour in retraining them for other occupations.

It is rather difficult to go back to these people, whose unemployment insurance benefits are running out, and tell them that what a wonderful thing it is for us to increase our contributions to the Colombo plan. The reaction you get from a person under those circumstances is, "Why don't you get a Colombo plan in Canada for us? We would appreciate some technical assistance in the establishment of subsidiary industries. We have the resources and there are markets available if you want to tap them." Some financial assistance would be very welcome in such a community as I am describing.

I am suggesting that this government should implement the white paper tabled in this house in 1945. In tabling the paper the Minister of Trade and Commerce (Mr. Howe) stated, and the statement was contained in the body of the document, that it is the policy of this government in the development of the resources of this country that where risk capital cannot be found to develop the resources or where private industry falls down the government will immediately step in with a public investment program for the development of such resources. Now, that is a good policy. We were all for it and we are still for it. It is still the policy of the government because they have never rescinded it, although they have never implemented it to the extent we would have liked to see them implement it.

I am thinking now particularly of the coal industry of Nova Scotia. As I have said a good many times in this house, it is facing a very uncertain future. We hear people advocating this natural gas pipe line from Alberta to Quebec. Our stand is that it should be a public carrier and it should be controlled by the government. If this line is built to Quebec city, it is going to pose a problem for the maritime provinces. It is going to knock the props from under one of the main industries supporting the economy of Nova Scotia. We are sure, of course, that if the government is going to subsidize a pipe line with the taxpayers' money and that pipe line is going to eliminate coal that has already been subsidized by the government in that market, then a body of men as intelligent as the government will have a plan or

program to take up the slack in an industry they are helping to subsidize out of the picture. I am reasonably sure they will do that.

I should like to call a very good friend of mine as a witness on this subject of the fear of the future for the coal industry. I call Mr. Lionel Forsyth, president of Dominion Steel and Coal Company, an organization that operates coal mines in Nova Scotia as well as many other things. According to a press dispatch, Mr. Forsyth had this to say to the Gordon commission on the economic problems of Canada:

Fears that the St. Lawrence seaway may bring new hardships to maritime industries were expressed to the Gordon royal commission Friday as it wound up its Halifax sittings.

Lionel A. Forsyth, president of the Dominion Steel and Coal Corporation, said completion of the seaway will likely result in cheaper importation of American coal and perhaps attract foreign steel. These transportation problems were described during the three-day commission hearings as the biggest deterrents to new industry in the mari-times. Mr. Forsyth said he was "firmly convinced" that with the high cost of transportation no manufacturer would come to the maritimes to produce a finished product.

He said, however, that pessimism should not be associated with Dosco's Sydney steel plant,-

Now, I believe he is quite clear and precise. You cannot expect risk capital to go into the maritimes because of the long haul back to main markets and high transportation costs. It is not a question of power. Many people have been playing up to the question of power, but we have power in Nova Scotia. The problem in that province has always been markets, not only for coal but for any other commodity. As Mr. Forsyth has rightly said, there is the threat that within the foreseeable future natural gas will, to a large extent, wipe out the basic industry of my province. Then, with the opening of the St. Lawrence seaway there will be a cheap water route into Quebec which is our main market for practically everything we produce in the maritimes, including our coal. These threats are very apparent to any businessman who may have capital to invest and will keep him from going into an area where the future is so uncertain.

Now, I want to call another witness, a very good friend of mine, Mr. Harold Gordon, general manager of the coal industry in Nova Scotia. He has another angle. He makes this statement to the Gordon commission:

"If you burn gasoline you don't help the Nova Scotia coal industry."

That's the report of Dosco coal chief H. C. M. Gordon.

Mr. Gordon says increased use of gasoline- and provincial government records show it is on the march-has an important bearing on the fuel situation in the maritimes and Quebec, where most of Dosco coal is marketed.

His complaint is that in the province of Nova Scotia there are huge shipments of crude oil from Venezuela. According to his statement that oil is coming in. He said this oil was offered in Nova Scotia for 6 cents a gallon and that coal could not meet this kind of competition unless the federal government imposed an import tax on residue oil. Mr. Gordon said that residue oil from Venezuela was sold in New England for $1.85 a barrel, and that $1.65 of this was cost of transportation. Well, that crude oil that is refined in Dartmouth comes in duty free. It is distress oil from countries that pay very low wages.

The president of the Dosco organization and the chief of the coal industry both make it very clear that the cost of transportation to markets is the main disability of the maritime provinces. It is the responsibility of the federal government to bring some kind of organization into being-and I hope it will come out of the Gordon commission- that will try to alleviate the problem in the best way they know how.

The next point is the matter of cheap crude oil from Venezuela that is dumped into this country duty-free. The federal government and the provincial government-because I think it comes more properly in the field of the provincial government-should get together and come to some kind of an arrangement under which that oil at least will be compelled to meet the competition of other fuels in this country. I think that is a reasonable proposition.

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PC

Carl Olof Nickle

Progressive Conservative

Mr. Nickle:

May I ask the hon. member a question? In connection with Venezuela the hon. member mentioned that the transportation costs of crude oil were $1.65 a barrel and the oil was worth only 20 cents in Venezuela?

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CCF

Clarence Gillis

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

Mr. Gillis:

I said that was the statement of Mr. Harold Gordon, the general manager of Dominion Steel and Coal. I quoted him. I am not prepared to argue-

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PC

Carl Olof Nickle

Progressive Conservative

Mr. Nickle:

I think the figures might be reversed in so far as wellhead prices and transportation costs are concerned.

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CCF

Clarence Gillis

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

Mr. Gillis:

I hope Mr. Gordon will read Hansard and give us the answer. I am not prepared to vouch for the validity of the statement. But knowing Mr. Gordon as I do, I can say he is a pretty careful Scotsman and he does not make very many statements that he can be caught off base on.

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LIB-PRO

William Gilbert Weir (Parliamentary Assistant to the Prime Minister; Chief Government Whip; Whip of the Liberal Party)

Liberal Progressive

Mr. Weir:

Does he speak Gaelic?

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CCF

Clarence Gillis

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

Mr. Gillis:

I happened to pick up another very good witness, namely, the last issue of The Ensign, the issue for March. They took

Economic Rehabilitation the presentations of the four maritime provinces to the Gordon commission and summarized them; they shortened them up considerably. I am not going to read them. The Nova Scotia picture shows that in wages, in production and in everything relating to the development of Canada, Nova Scotia as a province is away below the average of the rest of Canada, with the exception of the other maritime provinces. I am going to put this bit on the record. The summary states: The biggest single problem in the province is what will happen to the coal industry, accounting for 77 per cent of the $68 million mining economy. And the biggest single obstacle to industrial development is the high cost of transportation.

The market for Nova Scotia coal has drastically declined with the dieselization of the transport systems, the inroads of oil and natural gas in the fuel market.

Hopes for the coal industry are pinned on the possibility that future energy requirements in central Canada will outstrip the growth of hydro power development: and on research now being carried on at McGill university on the possibility of a coal-fired gas turbine locomotive.

These people, who are impartial witnesses, have shown clearly that the argument that has been used in the past that power in Nova Scotia particularly has been the deterrent to the development of subsidiary industry is not true. In my opinion it never was true. It is transportation, the long haul back to markets and the impossibility of competing in the central markets with anything that might be manufactured or fabricated in that part of the country. When the Gordon commission reports to the government I hope it will have something very definite to say. You know, Mr. Speaker, over the years we have had so many commissions. In spite of all the recommendations that were made, in that part of the country things have continued to decline and to deteriorate. Nothing very much was done with the recommendations. As I have said before, the Rowell-Sirois commission, in its analysis of this country, did one of the best jobs that could be done. Their recommendations were very clear with respect to taxation agreements, re-allocation and redistribution of wealth, the development of the country and a more balanced economy. They did an excellent job. I hope the Gordon commission will do just as good a job; but I hope that when the government makes its economy plans for the future it will remember that there are four provinces east of the province of Quebec.

It pains me to sit in a committee, and particularly when the natural gas pipe line from Alberta is under discussion. At that time I asked whether any surveys were made east of Quebec city to determine what the effect may be on the economy of the provinces east of Quebec, or whether some benefits

2262 HOUSE OF

Economic Rehabilitation might be derived from carrying the line further on into New Brunswick and down through Nova Scotia. They said that no surveys had been made; they did not know anything about it, and no representation was made to them for a survey. That is true of all of those national projects that are undertaken. They start in British Columbia and they get down as far as Montreal, and that is the end of them. The rest of that part of the world seems to be completely out of the picture.

What I am suggesting on a national scale, Mr. Speaker, has already been attempted or been done by the province of Alberta on a provincial scale. When the mining industry in Alberta went down, when there were at least two towns whose citizens were completely unemployed, when there was nothing for them to do, the government set up a committee. They made an appropriation of money; they set up a fund for the purpose of moving those people into areas where there was employment. They closed out two towns. I have a clipping which gives a summary of the committee's report. I do not want to read it. I am just summarizing it as I read it. They successfully moved the total population of those two fairly large towns and found employment for them elsewhere. But the bad feature of that move was that men who had invested in homes, in church property and had built the communities up had to pull out and leave the property standing there. As I said before, a lifetime of investment was lost.

I believe that what the federal government should do is to set up a public investment fund which could be used to implement the terms of the white paper of 1945.

If arising out of the Gordon commission report we find that the piping of natural gas into the province of Quebec is going to kill the mining industry of Nova Scotia, then I believe it will be the responsibility of the federal government, along with the provincial government, to take a look at the areas affected and determine whether it is possible to have risk capital go into those areas and replace that industry with an industry based on the resources of the areas themselves. There are plenty of resources in Nova Scotia. There would be no trouble to set up a good cement industry in that province, and it is badly needed. It would not take very much money out of the public treasury to establish there an industry that would be self-liquidating. All the ingredients necessary for a cement industry are to be found right now in that province. No one has ever come down there with the necessary capital to develop that industry for the simple reason that

Canada Cement is a monopoly. Every time there is a building boom, particularly such as we had after the war, we find cement being bootlegged from the United States at a cost of $1.25 per bag more than Canadian cement would cost if it could be got.

If the federal and provincial governments had a public investment fund these resources about which I am talking could be developed. There are plenty of resources in the maritime provinces and there should be no difficulty in obtaining markets for the materials that are available for production. If these things cannot be developed publicly or privately, then the next step will be to do what the Minister of Labour (Mr. Gregg) is doing, train the people who are young enough in new skills or move them to some other part of the country where employment is available. That is the next step.

If we can bring in people from Europe and provide jobs for them, I submit the first responsibility of the government should be to see that people who should be working are working before someone else is brought in. I am not objecting to immigration because I do not think we will ever use the resources of this country until we have many more people. We have our two national railway systems and our air lines; we have developed our transportation sufficiently to take care of 50 or 60 million people; but our first responsibility should be to see that our own people are taken care of.

Only two years ago many men left Canada to go to New Zealand because there was no place else in Canada where they could get work. The national employment service put out attractive circulars stating that jobs were available in New Zealand, with homes and everything provided. Of course they have a coalition government in that country today which is trying to hang on to the mechanics of free enterprise. When these men got to New Zealand they found that the contract was not being fulfilled by a long shot. They are stuck there now and they are talking about suing the people who brought them in on the charge that they were brought in under false pretences. This is something I intend to discuss with the Minister of Labour and perhaps the minister of immigration when their estimates are before us. Those men were virile enough to be ready to leave this part of the world and travel to New Zealand in order to find work when employment should have been available in their own country.

I think the answer to a problem such as this is simple: set up a public investment fund. Personnel is available in every department of government who could deal with

this problem from the economic, social and business standpoints. The machinery is there to be used for that purpose. You always know that a problem is going to develop five or six years ahead and the machinery could be developed to deal with the problem before people are thrown out on the streets and chaos exists. The purpose of my resolution is to remind the government that this is not a developing problem, as indicated by that white paper. We have the machinery to deal with any industry which may be depending on wasting resources, such as gold mining, coal mining, metal mining and so on. We find ghost towns all over Canada, mining communities which were once prosperous. There has been lost investment and disillusionment on the part of people who have put their lifetime savings into these communities.

This would not mean any change in the mechanics of our society; it merely means the carrying out of government policy. As far as the members of this group are concerned, we are prepared to assist in that. Many people think that the C.C.F. want to take over every farm and little store, but the C.C.F. program and policy ever since I have been in it is to support private industry when it can do the job in the interests of the community. That is the way it should be done. But anything that dominates the life of the community in the way that our natural resources do should be handled in a way that would give the community a say in the management. We believe in cooperative development. We do not want to take over everything. That is the point I want to make. If private industry will do the job in the interests of the community, that is the way it should be done. But they are not doing the job in the maritimes. Considering the resources we have from coast to coast, the maritime provinces stand as an example of the failure to develop our resources on a national scale on the basis of service to our people and providing a balanced economy and equality across Canada.

If this resolution does nothing else but provoke discussion, I think it will have been worth while. I trust that hon. members from other parts of Canada who have some knowledge of this subject will say a few words. We talk about British Columbia, Alberta, Saskatchewan, Quebec and Ontario, but what the people residing ^n those provinces fail to remember is that while they still have frontiers to push back, while they still have hinterlands, while they still have new wealth to develop, the maritime provinces are fenced around by oceans. We have no hinterland, we have no frontiers to push back, we have

Economic Rehabilitation to make the best use that we can of the resources that we have in that restricted area.

I trust that when hon. members from Ontario, Quebec, Alberta and British Columbia are speaking on this resolution they will remember that we live in a restricted area far from the main markets and our problem is mainly a transportation problem. I hope that they will be considerate and generous in their discussion of the resolution.

Topic:   ECONOMIC REHABILITATION
Subtopic:   REQUEST FOR PROVISION OF ALTERNATIVE EMPLOYMENT WHEN PRINCIPAL INDUSTRIES CLOSE
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March 19, 1956