October 28, 1971

NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

The doctor does not take the car into the surgery, either.

Progress reported.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
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PROCEEDINGS ON ADJOURNMENT MOTION


A motion to adjourn the House under Standing Order 40 deemed to have been moved.


GRAIN-LIFT PROGRAM-REQUESTS TO FARMERS FOR REPAYMENTS-POSSIBILITY OF PROSECUTIONS

PC

Albert C. (Bert) Cadieu

Progressive Conservative

Mr. A. C. Cadieu (Meadow Lake):

Mr. Speaker, on October 14 1 asked the minister in charge of the Wheat Board (Mr. Lang) a question to which he did not give a satisfactory answer. My question was:

Is it the intention of the hon. gentleman's department to proceed with prosecutions in cases where aerial photographs have proved that a farmer's application in connection with the LIFT program was incorrect?

The minister gave an unsatisfactory answer to my question, more or less saying he would need more information. My supplementary question, which went unanswered, was:

Is it true that the PFRA Regina office is making demands with regard to these repayments?

I think that this has gone a little too far and it is time the farmer had some idea where he stands. Regarding the Lift program, the government was advised by all agriculturalists and members of parliament who were involved in farming that the Lift program was unsatisfactory. Farmers were forced into the Lift program against their will because if they did not participate they would no longer have a permit book, which is necessary if they are to sell grain.

Now very misleading figures have come out. The government anticipated that approximately $140 million would be paid into the lagging western economy in connection with agriculture but wound up paying less than $80 million, with approximately $2 million going into administration and aerial surveillance. This figure would have been increased greatly had it not been for the fact that the administration people took over the PFAA office that had been established and set up with personnel. If it

October 28, 1971

Proceedings on Adjournment Motion

had not been for this, the cost of administration would have greatly exceeded $2 million.

The farmers were forced into the plan. I have heard of much dissatisfaction from people who did not receive any payment at all but had planned their crop year so as to receive some benefit from the program as well as from people who received the interim payment and later had a demand to pay it back. I cannot for the life of me see how the government hopes in any manner, shape or form to demand a repayment of those funds which were, in effect, a grant. One would not look for this kind of action from a former dean of law. It is ridiculous for the government to be asking for money back, because they have no legal right to it. In a number of cases that I took up with the department it was found that their figures were wrong and they made a further payment.

I should like to put on record the contents of one of several letters I have received. I received one letter from a young farmer. Part of it says that one year ago he applied for a payment under Operation Lift and in good faith accepted a payment of $135. This was accompanied by a letter saying that this was an initial payment and that the balance would be forwarded later. Upon receiving this initial payment he spent the money, later paid income tax on it and now they are requesting that he pay it back. That is one of several letters I have received.

May I also draw the minister's attention to the Western Producer, a farm paper, dated October 7, 1971. The heading over one letter reads, "Another Lift victim". Another letter to the editor is headed, "Lift cheque received, return demanded". That is the kind of thing you see in the press.

I am just wondering what this government thinks it can do. The farmers were forced into the program. I have heard many complaints from farmers who seeded land to forage. They were promised $4 per acre if they left it in grass and they were to receive $4 the following year if the inspector found that the land had been left as grassland. Now farmers are finding that these payments are being denied them. They have not received any payment on their forage. I am wondering what kind of deal the government is giving the farmers of western Canada when it engages in monkey business such as this. It is paying out money and then demanding it back. The government has displayed a great mistrust of the farmers by spending a great deal of money on aerial surveys, money which would have been much better paid to the producer who is in great need.

Is it morally or legally right for the government to make a payment with one hand and then demand it back with the other? I am sorry the minister is not in his place. I would like him to straighten out this mess in western Canada. Many farmers have received no payment whatsoever. In fact, their applications have not even been acknowledged. Many did not feel it was necessary to apply because they were not concerned with it. They later found they had to apply or they would not receive a permit book to sell grain. It is time the farmers of western Canada knew where the minister is going with his cockeyed Lift program.

Topic:   GRAIN-LIFT PROGRAM-REQUESTS TO FARMERS FOR REPAYMENTS-POSSIBILITY OF PROSECUTIONS
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LIB

Marcel Lessard (Parliamentary Secretary to the Minister of Agriculture)

Liberal

Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):

Mr. Speaker, on behalf of the minister

[Mr. Cadieu.J

responsible for the Wheat Board and the application of the Lift program I am pleased to give the answer to the question asked by the hon. member. It is as follows. The Lift office at Regina-PFAA-has written to a number of farmers who for various reasons had received an overpayment under the Lift program. As the hon. member knows, in order to give farmers money quickly interim payments were made upon receipt of applications, with final balancing and a final payment made later. Aerial photographs were one of the means used for checking applications. Whether or not prosecutions will be undertaken in individual cases if repayments are not made voluntarily will be determined at a later time and will depend upon the circumstances of the particular case.

Topic:   GRAIN-LIFT PROGRAM-REQUESTS TO FARMERS FOR REPAYMENTS-POSSIBILITY OF PROSECUTIONS
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OIL-PROPOSED TAKE-OVER OF SUPERTEST BY BRITISH PETROLEUM-POSSIBLE GOVERNMENT ACTION-ACQUISITION BY PANARCTIC OILS

NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):

Mr. Speaker, on Tuesday, October 26, as recorded at page 9032 of Hansard, I asked the Minister of Industry, Trade and Commerce (Mr. Pepin), who is also Acting Minister of Energy, Mines and Resources, the following question:

-is the government planning any measures to deal with the proposed take-over of the last major Canadian-owned distributor of petroleum products, Supertest, by British Petroleum Limited?

The minister's answer, to my way of thinking, was entirely unsatisfactory. He said:

Mr. Speaker, this situation has been under study and an announcement will be made in due course by the minister or somebody speaking for him.

I do not think the House should be asked to wait for this unidentified minister or person who is going to make a statement. The meeting of the shareholders is scheduled for November 2. The government ought to make a clear-cut statement as to what it intends to do about this proposed take-over. The point I want to make is that the oil industry is by far one of the wealthiest industries in Canada. In the Canadian Petroleum magazine issue of May, 1970, Mr. Carl O. Nickle, a former member of this House and the publisher of the Daily Oil Bulletin in Calgary, said that the value of reserves at present prices for oil, gas and sulphur is $1,118 billion. That is based on present oil, gas and sulphur prices. It is the equivalent of $50,000 for every man, woman and child in Canada.

This vast reservoir of wealth has been steadily slipping out of control of Canadians with the result that today over 80 per cent of oil and gas production is in the hands of foreign corporations. The major portion of the oil distribution facilities is in the hands of foreign corporations and 99 per cent of refining of petroleum products is in the hands of foreign investment.

There was some hope raised in people's minds when a few months ago the Minister of Energy, Mines and Resources (Mr. Greene) intervened to prevent the takeover of Home Oil Company, the last Canadian-owned company which had any hope of becoming a major oil producer. I give the Minister of Energy, Mines and Resources full marks for the courage and vision he showed on that occasion. But, Mr. Speaker, oil production

October 28, 1971

must be accompanied by facilities for oil distribution, and Supertest is the last of the Canadian petroleum distributors, with 1,200 outlets. It will now be purchased, if the shareholders agree, on November 2, by British Petroleum Limited which, by the way, is 51 per cent owned by the government of Great Britain. If that happens we shall have virtually lost control, as far as Canadian companies are concerned, over the distribution of petroleum products in Canada.

The bright spot in the picture is that the Minister of Indian Affairs and Northern Development (Mr. Chretien) and his predecessor showed considerable vision by investing public funds in Panarctic Oil, largely because many of the foreign investors who were quite willing to put money into Canada were not prepared to take the risk in the Arctic. The investment has paid off. Panarctic has discovered one of the largest deposits of natural gas in the world. The government's investment of between $30 million and $40 million is now worth $150 million to $200 million. Mr. Heatherington, president of Panarctic, has envisaged his company becoming a wholly integrated oil and gas concern. If this is so, it will need petroleum outlets.

This is why it is important that Supertest should not be allowed to pass into the hands of a foreign company. If Panarctic is not ready to act now, there is no reason why the Canada Development Corporation, providing the shareholders are intent on selling it, should not acquire Supertest and operate it until such time as Panarctic is in a position to need a distributor of petroleum products.

This is Canada's last chance to get a piece of the action. It is our last chance to prevent control of the wealthiest industry in our nation slipping entirely out of our hands. It is not enough for the minister to tell me that somebody is going to make an announcement. In the course of the next few days a decision will be made, a British company will take over an oil distributing firm and we shall find ourselves in the position of having lost almost the entire oil distribution network of this country to foreign companies.

I say to the government that if they want to retain the confidence of the Canadian public they must act now, otherwise the action they took with respect to Home Oil and Dennison Mines will have lost its effectiveness and we shall have allowed a valuable part of our economy to slip out of the hands of the Canadian people.

Topic:   OIL-PROPOSED TAKE-OVER OF SUPERTEST BY BRITISH PETROLEUM-POSSIBLE GOVERNMENT ACTION-ACQUISITION BY PANARCTIC OILS
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LIB

Allen B. Sulatycky (Parliamentary Secretary to the Minister of Energy, Mines and Resources)

Liberal

Mr. Allen B. Sulatycky (Parliamentary Secretary to Minister of Energy. Mines and Resources):

Mr. Speaker, perhaps in the next couple of minutes I shall be able to relieve the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) of some of his anxiety about this matter.

Following a joint statement by BP Canada Limited and Supertest Petroleum Corporation Limited on July 29, 1971, relative to a planned merger of interests between these two companies the Minister of Energy, Mines and Resources (Mr. Greene) wrote to confirm the prior notice given to the government of Canada by these two companies and to advise of the desire of the government to review the transaction in terms of the national interest, in accordance with the government's policy of understanding important economic activity taking place within

Proceedings on Adjournment Motion

Canada or affecting Canada. Subsequently, both meetings with senior officials of BP Canada and Supertest and the study of relevant material on the proposed takeover merger were undertaken but a final report to the government of Canada by officials was not made until Supertest issued its information circular dated October 7, 1971.

The government of Canada today has advised BP Canada Limited and Supertest Petroleum Corporation Limited that it does not intend to intervene. However, both BP Canada Limited and Supertest Petroleum Corporation Limited have been advised of the importance attached to maintaining a fully competitive market and their assurance that the merger is likely to enhance this fair competition in the interest of the consumer is relied upon.

Also taken into account is the assurance from these companies that western Canada produced oil will continue to be utilized in the Supertest marketing system, and that the merger of the BP and Supertest marketing interests will lead to the early consideration of expanded refinery capacity for the Ontario market, in accordance with the national oil policy.

Topic:   OIL-PROPOSED TAKE-OVER OF SUPERTEST BY BRITISH PETROLEUM-POSSIBLE GOVERNMENT ACTION-ACQUISITION BY PANARCTIC OILS
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REGIONAL ECONOMIC EXPANSION-RESPONSE TO CRITICISMS OF DEPARTMENTAL PROGRAMS

PC

David Samuel Horne MacDonald

Progressive Conservative

Mr. David MacDonald (Egmont):

Mr. Speaker, I rise this evening to deal with a matter that has been of some interest in this House for the past few weeks. I make no apology for raising it again this evening, though I am somewhat disappointed that neither the minister nor his parliamentary secretary has thought it sufficiently important to be here to deal with this question directly.

A good deal has been said about regional economic expansion over the last few months and much of the criticism has been fair and honest. Some, we will have to admit, has perhaps been a distortion. But of all the criticism one thing can be said-that essentially this criticism has gone unanswered by the minister and his government. For a government to make a major commitment, as this government has at least over the last few years, to regional development and then to refuse to deal openly and honestly with well developed criticism, even when it comes from its own agencies, is surely showing not only a great lack of responsibility but is a dereliction of duty. Quite frankly, I wonder how long the people of Canada are going to tolerate this kind of irresponsible attitude on the part of the minister.

Criticisms and suggestions have come from such recognized agencies as the Canadian Council on Rural Development, the Atlantic Provinces Economic Council and the minister's own agency, the Atlantic Development Council. To continue to ignore these criticisms and suggestions as if they were unworthy of reply is certainly unworthy of all the programs that the minister has said repeatedly are designed to deal with regions of economic disparity in this country.

The chief criticism that has been enunciated again and again is that having to do with the various goals and targets that are supposedly part of the strategy of the Department of Regional Economic Expansion. When the hon. member for Nanaimo-Cowichan-The Islands (Mr. 9146

October 28, 1971

Proceedings on Adjournment Motion

Douglas) raised a somewhat similar question on October 26 he received an answer from the Parliamentary Secretary to the Secretary of State which provided little information. Indeed, it contained a very disturbing comment in the final sentence when the parliamentary secretary said that "no such changes, however, are contemplated at the moment".

This is an incredible position to be in, with the material that has been on the minister's desk, some of it for months. To be willing to suggest to a third person or intermediary that there were no changes contemplated is completely and totally shocking. For the life of me I cannot understand how this minister believes he can continue to ignore public and responsible criticism from the three bodies I have just mentioned. We need answers because some basic questions have been raised. These are basic questions about a chief and major program of this department, that of designating areas for special incentive grants. This is a program that has grown like Topsy.

Originally we were told that parts of the country would be designated as special areas where there was a chronic situation of under-employment or unemployment of a long-term nature which could be described as regional disparity. Yet as the department has carried on-and it has not had a long life,-we have learned from time to time that new districts have been added, the latest and most major of which was a good deal of the city of Montreal. It is interesting to note that since Montreal has been designated some independent studies have indicated a drop in the proportionate grants to other designated regions across the country.

Some things have been admitted recently by the minister, I suppose by way of some kind of self-serving statements and not by way of clarification. We know, for instance, that in the two years the grants program has been operating, some 5,500 jobs have been created in the Atlantic region. But there are many things we have not been told. We have never really been told what kind of guidelines are in operation for the allocation of these grants. In fact, when we debated the establishment of this department and the program we were continually told that in order for the program to function effectively there had to be the widest possible latitude given the minister and the new department.

Members of this House on all sides, even though they were well aware of the pressures which would exist in respect of the multimillion dollar program, were willing to give the minister some leeway, with the somewhat naive belief that the minister would eventually describe to this House and to the people of this country what guidelines were in fact operating. It has been in operation for two years and we have not yet heard what those guidelines are, what industrial structures have been favoured in the Atlantic provinces, Quebec, Ontario and western Canada what firms are succeeding and why, and what funds are helping and why.

Except for the occasional question put in the House in respect of a specific industry that involves an obvious and flagrant misuse of government funds, we are never really told what the situation is in respect of the firms that qualify for assistance or how these funds are used in the

way of industrial development. We know there has been no public evaluation but we know that some 5,500 jobs have been created in the Atlantic region. We know, as well, that during the same period the unemployment figure has been sometimes more and sometimes less than 65,000, so if we measure success against those who are unemployed in the Atlantic region we are talking about 3 per cent or 4 per cent, and one cannot get very enthusiastic about that kind of result.

Many suggestions have been made, too numerous to mention this evening in the brief time available, about over-centralization and the lack of consultation not only with provincial authorities but with municipal authorities, about the need for more information and a review of the spending program in relation to job creating industries, the spending on infrastructure and the need for monitor industries to see that the jobs that were supposed to be created are still there at a specific time period, and to see what happens to the public money given to those industries. We have had no response, or the only response we have had is what I would call corridor blackmail. Outside the chamber the minister has said if we do not like his program the government will simply stop it. That is the meanest form of response to provinces and areas which are greatly in need of finding the answer to their chronic problems of unemployment and under-employment.

The time has come to end that kind of corridor blackmail and non-response by this minister and this government. One hopes that in the immediate future we will have some public evaluation, some public response to the legitimate and responsible suggestions and criticisms that have been put forward, and in particular some response to the minister's own body, the Atlantic Development Council, which some months ago placed before the minister a strategy for the Atlantic region from which we have had no definite response and which we must have if we are to be informed on what this department plans to do with regard to economic expansion in the Atlantic region.

Topic:   REGIONAL ECONOMIC EXPANSION-RESPONSE TO CRITICISMS OF DEPARTMENTAL PROGRAMS
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LIB

James Hugh Faulkner (Parliamentary Secretary to the Secretary of State of Canada)

Liberal

Mr. lames Hugh Faulkner (Parliamentary Secretary to Secretary of State):

I am pleased to reply on behalf of the minister. I will deal specifically with the report of the Atlantic Provinces Economic Council and not the rather exaggerated and political remarks made by the hon. member for Egmont (Mr. MacDonald).

As I pointed out on Tuesday last to the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), the report has been received and is being given careful study. We pointed out on Tuesday that it contains a number of useful suggestions, information and analysis, and in so far as that material is there it will be studied carefully. I also pointed out that in the view of the department the report contained a number of criticisms of the departmental program, some of which criticism is constructive but some of which seems to be based on misconceptions. Because of this I would like to make one or two comments about the report.

APEC suggests that for a variety of political and shortterm reasons the department watered down the objectives and the criteria for the expenditure of scarce funds, to the disadvantage of the Atlantic provinces. I reject this suggestion. The departmental budget increased from $120 million in 1968-69 to $333 million in 1971-72, excluding

October 28, 1971

Devco and the loan funds. Approximately 50 per cent of the total has been and is being spent in the Atlantic provinces. In fact, in the fiscal year 1970-71 and 1971-72 the department spent or will spend more money in the Atlantic provinces than was spent in those provinces by comparable programs such as ARDA, FRED, ADB and ADA in the fiscal years from 1965-66 to 1969-70.

I see no evidence to support the view that the objectives of the programs have been watered down. APEC suggests that the department is spending relatively too much money on infrastructure and relatively too little money on what it refers to as economic development. In my view the conclusion is based on an artificial distinction that fails to recognize the contribution to economic development made by residential and industrial land assembly, water and sewer systems, arterial and municipal roads, vocational schools and other projects commonly included in the infrastructure category.

APEC suggests that the department has done little integrative planning within a firm set of objectives and strategies. Hon. members know that many of the programs are based on a joint planning process that is dependent on a close working relationship with provincial governments. We still have a long way to go in developing this process but frankly we are quite proud of the progress that has been made. We are engaged day in and day out in a planning exercise with our provincial counterparts that is now generating, in each of the areas in which we function, a large number of action-oriented studies of long neglected problems and the beginnings of a comprehensive development strategy.

APEC suggests that our industrial promotion and development activities have been too passive. I am not sure that

Proceedings on Adjournment Motion

when directed at a department little more than two years old this can be regarded as fair criticism. Grants made under the Regional Development Incentives Act have to date helped to create direct employment for over 6,000 Canadians in the Atlantic provinces. The department has shown a willingness to experiment with brand new techniques, such as those represented by the New Brunswick Multiplex Corporation and the proposed Newfoundland Development Council, the department is now considering support for a new Maritime Provinces Industrial Services Council which will be concerned at the regional level with industrial intelligence, industrial research and the provision of management services. I doubt that a program with components of this kind can be regarded as passive.

APEC suggests that the departmental organization is unduly centralized and should be dramatically changed. In the course of doing so it manages to imply that we have

2,000 employees located almost entirely in Ottawa. On the latter point I should state the facts. The department employs a total of 1,600 people. About 700 work in the west for PFRA. Another 250 are employed in our provincial field offices. There are about 625 employees in Ottawa, most of them involved in general administration, in central planning and in the incentives program. I do not intend to get drawn into a debate on questions of departmental organization. There is good reason to believe that the department is one of the most decentralized of all federal departments. There is reason to believe that-

Topic:   REGIONAL ECONOMIC EXPANSION-RESPONSE TO CRITICISMS OF DEPARTMENTAL PROGRAMS
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LIB

Prosper Boulanger (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Boulanger):

Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 11 a.m.

Motion agreed to and the House adjourned at 10.31 p.m.

24372-20}

Friday. October 29, 1971

Topic:   REGIONAL ECONOMIC EXPANSION-RESPONSE TO CRITICISMS OF DEPARTMENTAL PROGRAMS
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October 28, 1971