Hon. Paul Comtois (Minister of Mines and Technical Surveys):
Mr. Speaker, I should like to make a statement concerning the coal mining industry of Cape Breton. Hon. members will recall that during the past year arrangements were made between the governments of Nova Scotia and Canada on the one hand, and the Dominion Steel and Coal Corporation on the other, which successfully averted the closing of three Nova Scotia coal mines last winter. At that time it was agreed that to offset losses incurred by the corporation in maintaining these mines in operation, a special subvention of $1 per ton would be paid on coal shipped by the corporation to non-subvention areas from their mines in Nova Scotia between April 1, 1960 and May 31, 1961. The province participated in the cost of this subvention.
During the past year the markets for coal here and everywhere in the world have continued to shrink, and the annual productive capacity of the corporation's various mines is now substantially greater than the possible level of annual sales. In these circumstances, if the special subvention should be allowed to terminate on May 31 and no alternative assistance be provided, the corporation would be obliged to proceed with the scheduled closures this season and many coal miners in the Cape Breton area would be laid off in the space of less than three months.
The government has discussed this difficult situation further with the corporation, the labour union and the government of Nova Scotia in an endeavour to determine the extent of the problem and the steps that might be taken at this time to alleviate it. I am now able to announce that the subvention of $1 per ton, of which 80 cents will be provided by the federal government and 20 cents by the government of Nova Scotia, up to a total sum of $300,000 per annum, will be continued for the period from June 1, 1961 to August 1, 1962, on the express understanding that the Dominion Steel and Coal Corporation will provide satisfactory assurance to the governments that this assistance will be used to good advantage in maintaining as much employment as possible in
the mines. Because of the shrinkage of markets the corporation will be obliged to reduce the number of miners on its payroll.
Authority for this continuing subvention is contained in order in council P.C. 1961/762 of May 25, 1961, and the required funds will be provided in the vote of the dominion coal board.
The government of Canada recognizes that subventions do not constitute a complete long term solution to the problem of employment in the Cape Breton area, and that other kinds of measures are also involved. Indeed, nationwide programs such as the vocational training assistance plan and the tax incentive arrangements included in the recent supplementary budget are already available for use in such areas.
The government considered, however, that as miners are displaced from employment with the corporation this season, other special steps should be taken at this time to assist in the provision of alternative employment. Parliament will therefore be asked to provide an amount of $1.5 million which will be set aside for approved projects to provide alternative employment this year in the Cape Breton area. Such projects will be considered on their individual merits, taking into account the degree of participation by the province in each case.
These two measures are being introduced to deal with the specific and immediate situation in the coal mining areas. The government of Canada is continuing to study the long term problems involved and the recommendations on the subject by the royal commission on coal, and further announcements will be made from time to time.
Subtopic: ANNOUNCEMENT OF CONTINUATION OF SUBVENTION