May 25, 1965

URANIUM

REPORT ON DISCUSSIONS WITH FRENCH GOVERNMENT

LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Hon. Mitchell Sharp (Minister of Trade and Commerce):

Mr. Speaker, as the House is aware I returned over the week end from a visit to Paris, where I held discussions with Ministers of the French Government regarding uranium. At the conclusion of the discussions the following joint communique was issued on May 22:

The French Secretary of State for Scientific, Atomic and Space Affairs, Mr. Yvon Bourges, and the Canadian Minister of Trade and Commerce, the Honourable Mitchell Sharp, have concluded today a series of talks on matters pertaining to a sale of uranium by Canada to France. In the opinion of the Canadian and French Ministers, these discussions should be viewed in the context of increasing co-operation between the two countries, which has been witnessed at other recent talks at ministerial level.

The purpose of the discussions concerning a proposed sale of uranium was to provide for a first exchange of views at ministerial level on the main questions involved in the provision by Canada of fuel required for France's rapidly expanding program of nuclear reactors for the production of electrical power. The ministers noted with satisfaction that the discussions had been of great value to both sides in the examination of various aspects of the proposed sale.

The two ministers will report to their governments on their conversations.

This concludes the communique. For the information of hon. Members may I add the following points by way of clarification. At these meetings in Paris we did not attempt to negotiate a contract of sale for Canadian uranium. We were concerned only with the general conditions under which a sale could be negotiated and under which uranium could be exported from Canada by producers. As hon. Members are no doubt aware, the export of uranium from Canada requires the approval of the Government.

I made it clear during the discussions that in accordance with the firm policy of the Canadian Government, the proposed sale of uranium could be only for peaceful purposes. As the communique indicates, the French Government for its part is interested in acquiring Canadian uranium for its civil program of nuclear reactors for the production of electrical power.

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Right Hon. J. G. Diefenbaker (Leader of the Opposition):

The report given by the Minister has one quality; it frankly faces the situation and does not build up any false hopes. Indeed, as one reads between the lines one can only conclude that there are very great difficulties in the way of securing from the Republic of France an order for uranium of the dimensions in question. I should like at some time for the Minister to let the House know whether during these discussions the Government pf Canada advanced the view that it was prepared to alter the basis upon which Great Britain and the United States today are able to acquire uranium; in other words, to make changes in the arrangements that go back almost to the end of the last war, these changes to be made in order to bring about a possible agreement with the Republic of France.

I hope, Sir, that the changes are not made, and that Canada takes the firm and definite stand on the matter as reported by the Minister a few moments ago, that any sales that will be made will be clearly based upon the agreement that the uranium shall be used for peaceful purposes. This reassurance on the part of the Minister is in accordance with the general stand that Canada has taken through the years.

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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. T. C. Douglas (Burnaby-Coquitlam):

Mr. Speaker, I am sure hon. Members appreciate the fact that the Minister has given us a preliminary report on his initial discussions with the representatives of the French Government regarding a possible contract for the sale of uranium by Canada. I am sure Members in all parts of the House hope it will be possible to successfully work out an agreement whereby Canada will be able to sell large quantities of uranium, thereby stimulating the uranium industry and bringing employment to those parts of the country that have been adversely affected by the decline in the uranium market in recent years.

There are three points, Mr. Speaker, about which I hope the Government will be able to give us information at an early date. The

1602 COMMONS

Proposed TJranium Sale to France first is one the Minister has already mentioned. We are glad he stated that Canada will take a very firm position that any uranium sold by this country must be for peaceful purposes. Such an agreement must provide for adequate inspection and control, and some form of machinery must be set up to make absolutely sure that uranium sold to France, or to any other country, is used entirely for civil purposes. This is particularly important in this case because France is one country that has refused to sign the partial nuclear test ban agreement, and I think there would be some public reaction if adequate safeguards were not taken to make sure that any Canadian uranium sold to France was going to be confined entirely to civil purposes.

The second point on which I would like to get some information from the Minister at an early date is with respect to the length of the agreement. It is to be hoped it will be a fairly long term agreement. One of the mistakes we made with the U.S. agreements was that they were very short term agreements, and I know that in the Province of Saskatchewan as well as in the Province of Ontario the governments, municipal and provincial, made very large social capital investments on the strength of those agreements. Although we recognized at the time that they were short term agreements we had no choice but to make these very heavy investments in communities which virtually became ghost towns when the agreements ended. If we are going to build up an elaborate structure in Canadian uranium mining it has to be on the basis of long term agreements.

The third point concerns the matter of price. If we are going to get long term agreements, particularly a 25 year agreement in the case of the French contract, I hope the Minister can arrange in such a contract to have a guaranteed price for only a limited period of time, with the price to be renegotiable in the latter part of the life of the agreement.

All the indications are there is going to be an increasing demand for uranium. Experts have forecast that by 1973 there will be a great world demand for uranium, and it is quite conceivable that having a fixed price now for 25 years would find us selling uranium to our customers at a price far below the world price within the 25 year period. If it were possible to get an agreement that would be open ended after a specific period of time, so the price would then be renegotiable, this would be to Canada's advantage.

DEBATES May 25, 1965

I wish the Minister well in his negotiations. I am sure all of us hope he will be able to bring them to a successful conclusion.

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SC

Robert Norman Thompson

Social Credit

Mr. R. N. Thompson (Red Deer):

Mr. Speaker, we in this party note with interest the report made by the Minister in regard to his negotiations in Paris relating to the sale of Canadian uranium. With the prospects of a vast increase in the world market for uranium as nuclear power becomes more commonplace it is obvious that what we are dealing with is something that is much greater than just Canadian-French relationships at this time. With France as a member of NATO, with the prospects of uranium becoming a very strategic item particularly among NATO countries, certainly the groundwork that is being laid now in these negotiations is something broader than what is being discussed between our two countries.

I noted with interest reports circulating through news media that one of the reasons the Minister was not able to come to any definite conclusion about this sale agreement is that he expects to carry out negotiations with the United States government as well in this regard. It would have been good if the Minister had referred to this. It emphasizes again that we are dealing with a very broad aspect of nuclear power development through the basic material of uranium.

One thing is important in connection with this subject. It is whether there is a satisfactory agreement with France as far as the use of uranium for peaceful purposes is concerned, bearing in mind that whatever uranium France may obtain from Canada now if stockpiled will release other material, not liable to restriction, for military use. I know the Minister is taking this into consideration.

I do not think it is satisfactory to pretend that the whole question is being settled by this trade arrangement which is now being negotiated. Having regard to the tremendous supply of uranium which is available in Canada, we must certainly lead the way in developing some satisfactory proposal for the sale of uranium not only to France but to other countries, a proposal covering not only use but price.

We shall await with interest reports of further negotiations.

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RA

Gilles Grégoire

Ralliement Créditiste

Mr. Gilles Gregoire (Lapointe):

Mr. Speaker, the communique issued by the two countries following their discussions and read by the Minister of Trade and Commerce was

May 25. 1965 COMMONS

surely one of the most laconic ones we have ever heard. No conclusion emerged from it and it could even be perceived that the negotiations had not been as successful as the two parties involved expected. This is shown by the fact that the communique contains several statements to the effect that Canada and France are friendly countries, but nothing to suggest that an agreement has been reached. Mention is made that the meeting was not held in order to negotiate a contract, but simply to discuss the conditions of such a contract. In spite of all this, it is impossible to infer that the conditions laid down by each party have been accepted by both of them. Consequently, the communique is far from satisfactory. What is the main reason for the failure of those negotiations?

Well, Mr. Speaker, the Minister of Trade and Commerce will admit that, on the one hand, Canada wants to exercise some control and supervision-that is part of the conditions of sale of uranium to France-but, on the other hand, as stated in recent press releases, France wants no part of such control and supervision. However, in the joint communique, France stated that it needed uranium for its nuclear reactors in order to produce electric power. Those are the statements contained in the joint communique; the statement is official enough to be sufficient in itself, I think, especially when it comes from a friendly country such as France, unless France, in the case of this agreement, is not considered as one of the friendly countries mentioned at the beginning of the communique.

Mr. Speaker, I still maintain the position we have already taken in this matter. When negotiations were carried on with Great Britain and the United States, even if they were carried on during the few years after the war, we knew perfectly well to what purpose the uranium would be used, that is for military purposes, but no conditions were imposed on that sale as they are imposed today with respect to another country, a friendly country, France.

I think negotiations should be put on another basis. We should have confidence in the statement made in the joint communique by the Canadian Minister of Trade and Commerce and Mr. Yvon Bourges, on behalf of France, to the effect that this uranium will be used for their nuclear reactors in order to produce electric power. In addition, I think Canada feels the need for such a sale, such a contract, especially to improve its balance

DEBATES 1603

Proposed Uranium Sale to France of trade which is truly unfavourable at present.

On the orders of the day:

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PC

Michael Starr (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Hon. Michael Starr (Ontario):

I wish to ask the Minister of Trade and Commerce a question based on his announcement concerning the uranium negotiations in Paris. The hon. gentleman mentioned the emphasis placed by Canada on the use of the uranium for peaceful purposes only. Can he tell us whether there were any other conditions involved than the one he mentioned, or whether any further problems arose? Is it possible for him to inform the House what the basic price per pound is to be, and whether there is to be a further meeting in connection with this sale?

Hon. Mitchell Sharp (Minister of Trade and

Commerce): May I begin by answering the question about price. As I indicated in the course of my brief statement on motions, we did not attempt at these meetings to negotiate a contract of sale. That would be a matter for negotiation between the Canadian producers and the atomic energy authorities of France. The question of price was not discussed during these meetings.

As to the first question, I reiterate what I said in my statement. The proposed sale could only be considered if the material were to be used for peaceful purposes. In this connection we had a discussion about the implications of that condition, and there was some discussion about the form of safeguard which would be necessary to ensure that the uranium was used for peaceful purposes. The whole range of subjects relating to the movement of uranium from Canada to France and the condition to be attached to it were the subject of discussion.

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PC

Michael Starr (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Siarr:

Would the Minister say whether the French Government agreed to the safeguards which were set out by the Canadian delegation? Will he tell us, too, whether there will be further meetings or negotiations in order to finalize this agreement?

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LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Mr. Sharp:

The two main points upon which we have not yet reached agreement are the avoidance of discrimination in the terms to France as compared with those to Britain and the United States and, second, the form of the safeguards. These matters are under discussion. In reply to the question concerning further discussions, the hon. Member will have

May 25, 1965

Sale of Wheat to China noted from the communique which was issued that the two Ministers agreed to report to their Governments. I reported to the Canadian Government this morning and we are in the process of considering what the next step should be. I am sure the Government of France is doing likewise.

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PC

Michael Starr (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Starr:

Were there any other technical problems involved in the negotiations apart from those the Minister has mentioned?

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LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Mr. Sharp:

I am happy to say that as far as the other matters are concerned there seemed to be a very large area of agreement between the two Governments on what might be termed the commercial aspects of the sale. As I say, we were not concerned with price but we did discuss the willingness of Canada, for example, to enter into long term contracts. I indicated we were prepared to meet the power needs of France over a considerable period of time. I think in this respect we have the basis for an agreement.

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WHEAT-ANNOUNCEMENT OF SALE TO MAINLAND CHINA

LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Hon. Mitchell Sharp (Minister of Trade and Commerce):

Mr. Speaker, I have another short announcement to make. I have been informed by the Canadian Wheat Board that the Board has concluded negotiations in Hong Kong for the sale to mainland China of 1| million long tons of Canadian wheat, approximately 58,700,000 bushels including shipping tolerance. Further details will be announced by the Canadian Wheat Board within the next few days.

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PC

Francis Alvin George Hamilton

Progressive Conservative

Hon. Alvin Hamilton (Qu'Appelle):

Mr. Speaker, I would like to take this occasion to say a few words about the China wheat market because of its importance at this time. In the first place I think we can gather from the announcement made today that this is no longer a temporary type of market. I think we have to assume now that this is not a windfall type of arrangement but will be here permanently.

Therefore, in view of its importance I am going to ask the Minister and the Government to take effective action with regard to the desire of mainland China to set up in this country, as they have in other countries, an unofficial trade office where their representatives can meet with Canadian businessmen, so we can show some honest effort on our part to get their goods into this country, which

are not coming in in any amount at all at the present time.

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?

Some hon. Members:

Hear, hear.

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PC

Francis Alvin George Hamilton

Progressive Conservative

Mr. Hamilton:

The second point I want to make is that at the Canton trade fair which ended just last week, of some 5,000 businessmen there from all over the world only a handful were Canadian. I think the Department of Trade and Commerce has to make just as much effort to enter into this market as we make with regard to other markets, and I think we should have several hundred businessmen organized to go to the coming trade fairs in April, May and September to make sure that Canadians know what the Chinese are producing.

I am not going to discuss price at this time because that comes under the purview of the wheat board. It is their business and the business of the farmers; therefore we should not talk about it here.

My final point is this. Trade with China is not going to be a one way street. We are selling them approximately $150 million worth of wheat a year and we are buying back a handful of millions-$4 million or $5 million-of dollars worth of materials. Canadian policy should be to help the Chinese in every way to establish legitimate trade relations with us, and at the same time Canadian Government policy should be to persuade the Americans themselves to change their regulations and their act to allow American businessmen to trade with China as well. If this kind of approach were taken by the Minister I am sure he would find that some ears in the United States would be willing to listen, and we could hope that the American rules and regulations, and their act as a matter of fact, aimed against the American citizens who trade with China, would be amended or removed so that American business could make contact with this great country. When we remember that 70 per cent to 80 per cent of our business is entangled with American business, the importance of this matter to Canada is obvious.

Therefore, Mr. Speaker, I would take this opportunity to ask the Government to realize that this China trade is no longer a windfall, as the Prime Minister said when in opposition. It is a permanent arrangement and we must protect that permanent arrangement, not only for wheat but for all the other products the Chinese want. The slogan to keep in mind is "A single market of 700 million people under single management".

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?

Some hon. Members:

Hear, hear.

May 25. 1965

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LIB

George James McIlraith (President of the Privy Council; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Hon. G. J. Mcllraiih (President of the Privy Council):

Mr. Speaker, I would like to raise a point of order. The Minister of Trade and Commerce read a statement to the House, which is six typewritten lines in length, dealing with one specific point-a very important one, but one point. In reply to it, or by way of comment, we heard a speech raising views that the Prime Minister expressed about trade generally with China in earlier sessions; we heard other points raised, such as agreements made with China, and so on. I would like respectfully to draw to your attention, Mr. Speaker, the rule which reads:

On motions, as listed in section (2) of this Standing Order, a Minister of the Crown may make an announcement or a statement of government policy.

In this case it was a direct, simple and concisely stated announcement. To continue the quotation:

Any such announcement or statement should he limited to facts which it is deemed necessary to make known to the House and should not be designed to provoke debate at this stage. A spokesman for each of the parties in opposition to the government may comment briefly, subject to the same limitation.

I respectfully suggest that the limitation as contained in the rules has not been observed, and I feel that this should be pointed out.

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May 25, 1965