June 5, 1972

PC

William Gordon Ritchie

Progressive Conservative

Mr. Gordon Ritchie (Dauphin):

Mr. Speaker, in speaking in this debate on foreign ownership I should like to put forward some ideas of my own on the problems involved in this issue. It seems to me that one of the most important facets of foreign ownership and control of the Canadian economy is to have some clear idea of what the different types of foreign investment are and their effect on the Canadian economy. Government statistics indicate that Canada's liabilities to foreigners as at the end of 1970 amounted to a little over $49 billion. However, only half of that sum was foreign investment in companies controlled by non-residents, including overseas owners as well as those in the United States. The rest consisted of financial investments by non-residents in stocks of Canadian companies, bond issues of Canadian governments and corporations, and short-term investments. Certainly this part of foreign investment in Canada does not represent ownership and control in any sense.

I should like to look at some aspects of this particular half or portion of foreign investment. The present NDP government of Manitoba has been a large borrower in the United States market since it came to power. Its premier, Mr. Schreyer, had only been in office a couple of weeks

[Mr. Deputy Speaker.)

when he found it necessary to go to New York to arrange a loan. Just this week German financial interests made a loan to the government of Manitoba, which presumably was just a roll-over. This is an indication that the province of Manitoba needs foreign money to carry on its business affairs.

This morning the Montreal Gazette reported that the New York market had raised a loan of $150 million for the government of Quebec. This loan was defended by the premier of that province as being necessary and useful to the province. The James Bay project, with which the province of Quebec would like to continue, demands a $6 billion investment, probably even more, and it is considered there is no way that this money can be financed, given the present state of the Canadian economy, within Canada. Without these borrowings by various provincial governments, the provinces would not have been able to proceed with the building of these schools, hospitals and highways at anything like the volume we currently enjoy. I do not think there is anyone in this House who would be willing to say the provinces should have been curtailed in their borrowing rights if that had meant a reduction in any of the social services our people enjoy. Indeed, it is well recognized that the federal government has been most adamant in forcing on the provinces a high level of social services.

Recently, there has been an inflow of capital into Canada for mortgage loans for residential buildings. Certainly, in this case ownership and control remains in Canada. When it is considered also that Canada has abroad $21 billion worth of investment, this helps in turn to off set the flow of capital into Canada and bring us into balance. If you subtract the $21 billion from $49 billion, you get to the stage where we have a net imbalance of $28 billion. It is perhaps not so bad, when you consider that our gross national product is approaching $100 billion a year, to have a net deficit of $30 billion. That is not so great considering the immature state of development of our economy.

For instance, the recent tax legislation goes further in the way of limiting foreign securites that Canadian pension funds can buy, presumably on the philosophy that savings which are available for investment in stocks should be bottled up in the Canadian market. Canada wants to keep this money at home, but at the same time wishes to obtain free access to the United States capital market. We have indicated this in many ways, particularly in respect of borrowings for Canadian provinces. In some ways it seems to me we are kind of wanting to have it both ways. We want free access to the New York market but we propose to limit the access of Canadian capital to the U.S. market. All this makes for a certain amount of trouble.

It seems to me, whether we like it or not, United States investment is one of the principal vehicles of technological progress we have available to us. The hon. member for Waterloo (Mr. Saltsman), who spoke just before me, mentioned that his study showed Canadian manufacturing was superior to manufacturing by foreign-owned companies. If that is so, it seems unusual that we have one of the highest tariffs in the world to protect our manufacturing industry.

June 5, 1972

In the last two years we have seen the government move in the textile industry so that foreign textiles have been kept out and have largely disappeared from our shelves. United States investment, with its large technological know-how, seems to be needed by us for at least the foreseeable future. If this U.S. technological know-how is unavailable or closed to us, as well as other technological know-how from western Europe and Japan, surely we in the long run will be poorer for this. It is doubtful whether our citizens would put up with a lower standard of living than our neighbours enjoy, particularly to the south of us. Technological know-how from other jurisdictions surely increases rationalization and modernization in our own economy. It forces our manufacturers to more productivity and presumably increases the standard of living of all our citizens.

In the recent tax changes made by the Minister of Finance (Mr. Turner) when he presented his budget greater stress was placed on tax incentives for the manufacturing industry. How will we obtain this high level of technology in manufacturing, particularly when it is recognized that our high priced manufacturers must sell largely in the United States market, unless we are willing to procure technological know-how from other countries?

In respect of Canadian banking institutions, it is pointed out they are doing business with other countries. Apparently, as Canadians, we are happy to have them do this, yet we have designated banking as one of those segments in which we do not wish any foreign investment. So, it seems in this area we have considerable differences of opinion and a collision of ideas.

Official statistics suggest there is a high percentage of foreign ownership and control in certain of our industries such as petroleum, chemical, rubber, machinery and manufacturing. It has been found that when a corporation changes from being foreign-owned to Canadian-owned it does not necessarily change its way of doing business or does a better job so far as the Canadian public is concerned. For instance, the CPR has been majority Canadian-owned just in the last decade, yet have there been any discernible changes in the policies of the CPR? I have yet to see them. It is just as actively engaged in discouraging travel by passengers as it has been in the past. I met one citizen who made the journey from Lethbridge to Winnipeg without ever having to turn in his ticket.

In the case of petroleum and natural gas, the recent decision of the National Energy Board, which was strictly political, to not export natural gas is an indication that this industry can be effectively controlled without foreign ownership. Without foreign investment there would at the present time be no western petroleum industry. This has all been developed with United States capital and a little western Canadian capital. Eastern money was not available or eastern investors were not interested in investing in the western oil industry at least to the present time.

It is often said that foreign investment is capital intensive and, therefore, we should not encourage it because it does not employ a lot of labour. The province of Alberta, with its rapidly growing cities of Edmonton and Calgary, demonstrates that oil and gas create a climate for the employment of a large number of people. It is estimated that over one million people are dependent in western

Regional Economic Expansion

Canada on the oil and gas industry. This represents 20 per cent of the total population of western Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
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LIB

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

Liberal

The Acting Speaker (Mr. Boulanger):

It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's order paper, namely Notices of Motions and Public Bills.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO PROVIDE FOR CONTROL OF FOREIGN OWNERSHIP OF CANADIAN COMPANIES
Permalink

PRIVATE MEMBERS' MOTIONS

REGIONAL ECONOMIC EXPANSION

LIB

Murray Arndell McBride

Liberal

Mr. Murray McBride (Lanark-Renfrew-Carleton) moved:

That, in the opinion of this House, the government should consider the advisability of extending the designation of Renfrew County for special incentives under the Regional Economic Expansion legislation beyond June 30,1972.

He said: Mr. Speaker, on December 10, 1969 an almost identical motion was moved in this House by me. My concern then, as it is today, was for Lanark and Renfrew Counties, and I asked that they be named as special designated areas under the then new Regional Development Incentives Act. I was on that occasion ably supported by the hon. member for Renfrew North (Mr. Hopkins). Our representations in the House more than two years ago were but the tip of an iceberg, being that portion in view to the public of much larger representations we were making as vigorously as possible to bring federal assistance to eastern Ontario and to obtain an improved and better life for the people we represent.

In April, 1970, just four months after my motion was debated in this Chamber, the Minister of Regional Economic Expansion (Mr. Marchand) named Renfrew County as a special area. This good news, which some said would never come, was met with startled disbelief, followed by a real sense of joy and enthusiasm by all who live in and love the Ottawa Valley. For too long too many people, especially in the Renfrew County area, have been living in the outer regions, just beyond the fringe of economic growth, so they have become accustomed to a very average and mediocre future as part of their lot. It is therefore a real source of satisfaction for me, as the federal Member of Parliament for a large portion of this county, to be able to play a part in breaking this block to progress. For two years now the county of Renfrew has been designated.

Two years ago the western world was in the midst of a very severe set-back in the aircraft production industry. The whole industry was in bad shape. This hurt Renfrew in particular which was very dependent upon that industry. Similarly the county had a natural dependence and tie-in with the forest industry which needed to be restructured. The forests needed to be better harvested and better utilized. The federal government under the leadership of the Prime Minister (Mr. Trudeau) not only had sympathy for the poorer areas of Canada but took action and set up a whole new Department of Regional Econom-

June 5, 1972

Regional Economic Expansion

ic Expansion, the sole purpose of which was to assure a greater degree of equality and justice for people such as those I represent so that our dream of a continuous and varied industrial growth could become a reality and a steady stream of new job opportunities could be provided for the young and old alike. This progress, along with a solid agricultural base, is giving the people and the area I represent the kind of confidence for the future we all want to have.

Allow me now to be more specific. What has happened since April of 1970 when the designation was made? I refer in my participation this afternoon to only the eight townships I represent, the townships of Westmeath, Ross, Bromley, Admaston, Horton, McNab, Bagot and Blythe-field along with towns such as Cobden, Renfrew, and Arnprior. I am sure other speakers will follow me in this debate in respect of areas of the county which they represent. I hold in my hand at the moment a sheet which lists some 15 different grants which have come into my portion of the county alone. I shall not take the time of the House this afternoon to go through all of these, but they cover a large section from Waba at one end into Arnprior, Renfrew, Cobden and Westmeath. In other words, it is pretty well distributed over the entire area of my constituency. I shall simply refer to the total value of the regional economic grants approved for Renfrew County. The amount under this designation since 1970 has been $3,313,706; in other words, just over $31 million of federal aid to create employment and sizeable job opportunities in this whole area. I will deal with this in more detail later. The momentum has just built up and some announcements of real significance will be made in the very near future.

I believe it might be wise to place on the record this afternoon something which confuses some members of the public concerning regional economic expansion designations. When a grant is approved some persons assume that somehow the new industry has received into its hands the amount of money announced. That is not the case. When the federal government announces the approval of a grant, this means simply that representatives of a certain company have come to the government, have said they propose to establish a facility to produce this many units of a certain product and want to know what proportion of the capital cost the government is prepared to contribute if they locate in a slow growth, designated area.

After analyzing the market for the product concerned, after analyzing the need for it and after analyzing the possibility of producing it with the facility suggested, the government will either approve or not approve a grant. In the case where a grant is approved the important point is this. It is then up to the company to go out, raise the funds, build the facility and purchase machinery, equipment and so on. It is only when the new facility comes into production that the money is indeed and in fact paid out. Even then the whole amount is not paid out. Under most of these plans, 80 per cent of the grant is paid out when the facility first comes into production and the other 20 per cent in 36 months or three years. The reason is very obvious. It is to protect the public purse from some fly-bynight operator who might come in and not have a worthwhile company. He may not be prepared to go forward with the project. There is no way any member of this

House would want to see the government provide money without ascertaining that the company is a worthwhile company and ready to put in some of its own money and actually go forward.

When I speak of $31 million in federal grants being approved I mean just that. They are approved. All the money is not paid out yet, only to those plants now in production. This is the main point of the motion before us today. It takes some time for industrial development to occur. It takes time to bring in these facilities. Among the 15 I have listed here-and again this is only in my portion of the county-a few have not yet gone into production for one reason or another. Always there will be some which may never go into production. Therefore, it is essential and incumbent upon the government, in my opinion, that this designation be not terminated on June 30 as now scheduled but be extended beyond that date. Ideally the designation should be continued for another three years, but at least for an absolute minimum of one and a half years or 18 months. That is the purpose of the motion I have moved today. It is to encourage the government, and to set out in this Chamber the need for having this designation extended.

It takes time to become located. Now, more industrial growth is coming into the county, but it has taken time for the people on the local scene to get organized in order to take advantage of the assistance the federal government has made available to the county. In the Renfrew County area, we have overcome the set-back caused by the closing down of the Renfrew Aircraft and, indeed, the spin-off effect on Haley Industries and some of the set-backs which came to the area because of the pressure on the aircraft industry. However, the long-term advantages of a viable and flourishing forest-based industry have not yet been achieved. The dramatic intervention of the federal government is still needed because the forest industry has not yet reached a point at which this resource can be properly harvested and moved forward. I see in the House the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack) who has within the boundary of his constituency a greater forest area than I have in mine. This is also true in the case of the hon. member for Renfrew North-Nipissing East (Mr. Hopkins). Possibly they will wish to take part in this debate and therefore I shall not refer further to the forest based industries.

I mentioned at the outset of my remarks that in 1969 I asked to have Lanark County included in the designated area. The situation in Lanark, in 1970, was ruled to be less severe than in Renfrew. Only Renfrew County was designated. The motion before us today refers only to Renfrew County. It was placed on the order paper on February 23. Just five days later, on February 28, 1972 we were all shocked to learn that Findlay's Limited in Carleton Place announced it was closing down as of the end of May. That announcement followed all too closely on the heels of another very negative announcement that Digital Equipment intended to withdraw from the town of Carleton Place. The point I am making is that Carleton Place is not in Renfrew county, it is in Lanark county.

As long ago as December, 1969, I stated in this chamber that in my opinion the designation was needed in both

June 5, 1972

Lanark and Renfrew counties. The government and the officials saw fit to provide the designation for Renfrew county but not for Lanark. It did seem that since that date there was some justification for their decision because certainly the circumstances in Renfrew county were severe. But the point I want to make very clearly this afternoon-a point which I made a few days ago in the Committee on Regional Development-is that the circumstances have shifted recently, and now I firmly believe that the needs of Lanark county, and in particular of the Carleton Place region, are equal to if not more severe than the needs of Renfrew county. So I would make an appeal here that the DREE designation of Renfrew be not considered in isolation but that the needs of the wider area be taken into account at the same time.

Following meetings with the Carleton Place officials at the end of February and in March, it was soon revealed that the Ontario Development Corporation was covering the area of Lanark, and so for some weeks in March and indeed in April I was convinced that perhaps it made sense to have the county of Renfrew under the federal plan and the county of Lanark under the provincial plan, and to have a division of responsibilities. However, if press reports are correct, the province of Ontario through its minister, Mr. White, just over one week ago announced, without any prior consultation with the federal government, that no further Ontario Development Corporation forgiveable loans would be forthcoming to foreign owned firms. The fact of the matter is, regardless of how any member of this House may feel about foreign owned industries, that many of the firms who are interested in settling in these more remote, smaller towns such as Renfrew or Carleton Place or Almonte are indeed foreign owned. Therefore, one week ago a sudden change was introduced and Lanark county was thrown into a serious disadvantage.

I raised this question in some detail a few days ago in the Committee on Regional Development at its meeting on May 30. I would certainly like to draw the attention of anyone interested in this question to the record of proceedings of that particular meeting as it appeared in issue No. 14, where a very lengthy and detailed discussion was recorded between myself and the officials of the federal department as to just what would be the future of a community like Carleton Place when it was suddenly placed at a distinct disadvantage, since many of the industries that would be interested in settling there with the assistance of the Ontario Development Corporation would now naturally migrate a few miles further to the county of Renfrew to get the advantage of the federal designation under DREE. This is a problem that is extremely serious. If you are in a high density population area it is not so urgent, but when you are in a more remote area where industrial development is more difficult, then a sudden shift like that upsets the whole balance.

I appealed to the Minister of Regional Economic Expansion (Mr. Marchand) at that meeting on May 30 to consider filling this vacuum that had suddenly been created by the Ontario government's withdrawal. I see my time has almost expired, but I would like to conclude by saying that the county of Renfrew needs more time to develop the forest based industry. It needs more time to take advantage of the new industries which we have been able

Regional Economic Expansion to get, a large number of them spread through the whole area. But I also want to say that in my opinion Lanark county has suddenly had a severe kick in the pants and has been placed at a serious disadvantage. I want to quote one short section from the record of the proceedings of May 30 of the Committee on Regional Development which reads as follows:

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   REGIONAL ECONOMIC EXPANSION
Sub-subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30, 1972
Permalink
LIB

Murray Arndell McBride

Liberal

Mr. McBride:

I will ask a question which is really a representation. In view of this statement by ODC, will the minister assure this committee that he will give every possible favourable consideration to the designation under DREE of areas like the depressed areas of Lanark that are now going to be left at a significant disadvantage?

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   REGIONAL ECONOMIC EXPANSION
Sub-subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30, 1972
Permalink
LIB

Jean Marchand (Minister of Regional Economic Expansion)

Liberal

Mr. Marchand (Langelier):

We are going to discuss this with the government of Ontario, and if this decision of ODC changes the situation to a large extent, of course it might bring us to revise certain things that we have done.

I want to assure the House and to publicly assure the minister that there are many people in the Ottawa valley today who sincerely wish and hope that the federal government would move to take up the slack that has been created by this change in provincial policy. I want to assure the House that I will do my part to encourage the minister to give every possible favourable consideration to including, especially the northern part of Lanark county which includes Almonte and Carleton Place, in some kind of a special area, or else to meet again with the province and get them to reconsider their action.

In conclusion, I want to say that the federal designation of 1970 has meant that more federal funds have come into Renfrew county than ever before in its history, and this is being appreciated by myself, as the local member, and by the people there. It has brought a whole new future to the area. It must be continued so that we can finish what is now well under way.

Topic:   PRIVATE MEMBERS' MOTIONS
Subtopic:   REGIONAL ECONOMIC EXPANSION
Sub-subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30, 1972
Permalink

PROCEEDINGS ON ADJOURNMENT MOTION

SUBJECT MATTER OF QUESTIONS TO BE DEBATED

LIB

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

Liberal

The Acting Speaker (Mr. Boulanger):

It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Assiniboia (Mr. Knight)-Grain-Request for forgiveness of overpayments to farmers in light of forgiveness of duties and taxes owing by car manufacturer; the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack)- Penitentiaries-Suspension of regulation making inmates financially responsible for wilful damage to property; the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall)-Manpower-Local Initiatives Program-

Response to requests for additional sums and extension of time for completion of project.

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Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   SUBJECT MATTER OF QUESTIONS TO BE DEBATED
Permalink

June 5, 1972


REGIONAL ECONOMIC EXPANSION

REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30,1972


The House resumed consideration of the motion of Mr. McBride: That, in the opinion of this House, the government should consider the advisability of extending the designation of Renfrew county for special incentives under the Regional Economic Expansion legislation beyond June 30,1972.


PC

Almonte Douglas Alkenbrack

Progressive Conservative

Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):

Mr. Speaker, in rising to take part in this debate, I wish to compliment my friend, the hon. member for Lanark-Renfrew-Carleton (Mr. McBride) for his opportune motion.

I take it that the hon. member is asking that the present designations and rates be extended beyond June 30, but he does not state for how long. Under the Pearson government, and before redistribution, when we first had legislation providing for treatment of certain designated areas, none of those areas were located in any part of the riding that I then represented. That was the riding of Prince Edward-Lennox. In that riding at that time we were forced, and we still are forced to stand on our own feet, pay federal, provincial and municipal taxes, and do without the benefits of designation. Thus, I was obliged to take the stand that since the undesignated areas received no special benefits, and had to continue to pay taxes to stimulate the designated regions, this did little net good over the whole national scene. That is logic that cannot be refuted. The more assistance we give to certain areas, then the bigger the load that unassisted areas must bear.

Although I support the hon. member's motion because I now find myself representing 12 townships and two incorporated villages in the Barry area to which this designating motion applies, we have found that in spite of quite a long and fairly productive period of designation there is something still wrong. The forest industry, and all the other business such as secondary industry, that we thought would be immensely benefited, are still impaled upon the hazards of taxation and poor markets. I now contend that the government should extend further tax benefits to these firms and help them find markets for their products. I know that the hon. member for Renfrew-Lanark-Garleton is listening to me, Mr. Speaker, because here I am referring to markets for wood pulp and wood chips.

The lumber market in that area is fairly good. The price of maple is at an all time high. The mills are paying $85 to $90 a thousand for spruce logs. That indicates they are getting good prices for sawn lumber. However, the market for pulp and wood chips is in a turmoil and uncertain. There are some companies which got assistance under ARDA, and others that are hoping to receive grants under DREE, that do not know what the next quarter will bring with respect to marketing of the products for which they may receive assistance to manufacture. The government, the House of Commons, and all private members in it are

[The Acting Speaker (Mr. Boulanger).]

finding out that designation is not just everything we thought it would be. There must be some better plan of assistance for primary industry, especially for the small primary industry we have in the Ottawa valley.

If we are to do as my colleague recommends, and extend this arm of benefits beyond June 30, "then I must insist that the northern part of the counties of Lennox and Addington, and the northern part of Frontenac be included in this designated area, plus the five townships of western Lanark which I have the honour to represent, including North and South Sherbrooke, Bathurst, Dalhou-sie and Lavant.

Topic:   REGIONAL ECONOMIC EXPANSION
Subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30,1972
Permalink
?

An hon. Member:

You might as well get a share of the pork barrel.

Topic:   REGIONAL ECONOMIC EXPANSION
Subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30,1972
Permalink
PC

Almonte Douglas Alkenbrack

Progressive Conservative

Mr. Alkenbrack:

An hon. member says that we might as well get a share of the pork barrel. I point out that three applicants in the township of Raglan in the western part of Renfrew county have had no satisfaction from the Department of Regional Economic Expansion to date. This would indicate that the pork barrel must be pretty well used up. More than one industry in the Renfrew county portion of Frontenac-Lennox and Addington has applied for assistance, and has not yet received any benefits.

The forest industry in my area can still be classed as a primary industry. Although the government has encouraged the establishment of pulp and paper mills helter-skelter, indiscriminately and unwisely across the country, it has not tried to encourage any secondary manufacturing in the forest industry in the Ottawa valley. There is a pulp mill at Portage du Fort just across the river from Pembroke, and I wonder why we cannot have one on our side. Our people from Ontario have to market their plup wood there sometimes at a disadvantage. Sometimes they do not get full measure for their product, a product which they have to draw many miles. I ask why cannot a study be made into the feasibility of a pulp mill on our side of the river in Renfrew county? Such a mill could manufacture the wood into pulp, and possibly into paper. It would be a secondary form of manufacturing which could employ some of the manpower we have there. It would employ more people than the primary production to which we have been confined for so many years.

Diverging from the wood industry for a moment, Mr. Speaker, I would like to point to a very energetic and economically viable maple syrup industry in Raglan township, which is the result of a brilliant man's mind, the result of much work, and the result of patents held by this individual. By vacuum action he pipes the maple sap from each tree. He has over 50 miles of plastic piping conducting the sap to a very modern sugar house. It contains the most modern equipment, costing thousands of dollars. I understand he has spent over $40,000 on the operation he now has. It produced this year about $20,000 worth of maple syrup of the very best quality. This man was unsuccessful in his application for help from DREE. He applied but was given short shrift. The other day I said to him, "I suppose you have received a grant from the federal government." He said, "No, not one cent". He received very little from the provincial government. He is now operating

June 5, 1972

on his own credit and doing fairly well. I think such an industry deserves assistance. He was given none.

I suggest that we need better tax incentives for industry in the Ottawa Valley. I also suggest to the House that there should be better marketing assistance. When the government considers these two items positively and specifically, tax incentives and marketing assistance, I am sure it will find that less cash will be needed from what hon. members have called the pork barrel.

Can anyone say with credence-I ask hon. members to answer this question in their minds-that any one county is at a disadvantage in the total, over-all picture when one considers industrial progress? Is any one county at a disadvantage under the status quo, say in western Ontario? I think not. Is any one county in eastern Ontario at a marked, lamentable disadvantage? I think not. We are too closely related, socially and economically, for that to be the case.

That is why we might be better off it we looked more at the vital questions of taxation and marketing instead of saying to a man who wants to borrow money to buy another chipper with which to make more chips from his wood lot, "We will give you a certain percentage per man that you hire." Perhaps the project the man has mapped out will not work if he is given a grant under those conditions. This is another area that should be more clearly defined. I know a man in my riding who approached DREE for assistance in a chip and lumber industry. His is a most reliable firm. The application is being processed. I have recommended the firm and hope the minister will approve the necessary financial assistance and permit the company to see its project through to the end. The firm has been in business for a long time. It is reliable and will continue in business whether or not it receives the grant. Other firms in the same area and business have already received grants from DREE. I insist that everyone should be treated in a similar fashion.

In closing, Mr. Speaker, when we talk about the development of parts of Lanark, Renfrew, Carleton or the counties of Frontenac or Lennox-Addington, I ask: what about the development of all eastern Ontario? In adopting this motion, why not adopt a broader outlook? I say there must be a similar assessment of our problems and that the whole area must be treated equitably so that all undertakings in eastern Ontario are given an equal chance. Others here will speak for western Ontario. I support the hon. member's motion in the hope that the program may be extended and that it will bring some of its anticipated benefits to our area.

Topic:   REGIONAL ECONOMIC EXPANSION
Subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30,1972
Permalink
NDP

John Stratford Burton

New Democratic Party

Mr. John Burton (Regina East):

Mr. Speaker, I listened with a good deal of interest to the remarks of the hon. member for Lanark-Renfrew-Carleton (Mr. McBride). I listened to him sympathetically as he put forward a case for the needs of his constituency. I think we could all speak of particular problems facing our constituencies. Using the vehicle of his notice of motion, the hon. member was able to outline to the House some of the problems facing his constituents. I know a little about his constituency, having had occasion some years ago to work there. I found the people particularly hospitable and got along

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well with them. I assure the hon. member that I enjoyed very much the short time I spent there.

In the motion before us I note that the hon. member has made specific reference to an area of his constituency. As I suggested, I cannot blame him for finding an opportunity to deal with the problems of the people he represents. At the same time, I must express my view. I had hoped that the notice of motion might be based on a somewhat wider view of the situation. Problems and policies connected with regional development and programs of the Department of Regional Economic Expansion affect the whole of Canada.

I am sure the hon. member appreciates that policies and decisions concerning a particular area of his constituency can hardly be made unless we consider also the situation in other parts of Canada. Thus, I think we must consider other factors as well, particularly-as has been pointed out-the fact that current designations under the Regional Development Incentives Act and the Department of Regional Economic Expansion Act are due to expire at the end of June. The minister has indicated on a number of occasions that he expects in the near future to make an announcement concerning future designations. Naturally, quite a few members of this House are interested in particular areas and in the basic policy approach that will be adopted by the minister during the next three years for future programs which the department may undertake.

This matter is critical, Mr. Speaker. I am sure all hon. members agree with the objectives of regional development. The removal of regional disparities in Canada is something to which we all subscribe and on which we all agree. If we are to achieve these objectives we must examine some important considerations. The department structured its program in a way that would provide for a review of the situation at this time. I think this is a good time for us to consider what the department has done up to the present and where it will go from here.

As I listened to the hon. member for Lanark-Renfrew-Carleton I noted that there are a couple of policies which need to be questioned. One of his assumptions seems to be inherent in the thinking of some people who deal with economic problems. The very simplistic idea that one hears expressed either clearly or in somewhat vague terms is that all that is necessary to solve the problems of an area is to get industry to move in; all that is necessary is to dangle a carrot in front of them, then no problems will follow and everyone will be happy.

Many of us have learned through observing the scene that this is simply not the case. It does not deal with the problem. New industries have moved into particular areas and benefits have accrued from their establishment. However, this has not removed or solved the basic problems of these areas. We have to find something more. We must find an appropriate way of dealing with the problems of economic development and the whole social and economic picture of the region with which we are concerned. We must achieve better integration of government programs.

One of our concerns at the present time is pollution and environmental problems. This question came to my attention last year when there were problems involving the

June 5, 1972

Regional Economic Expansion establishment of a pulp mill in Saskatchewan. This became a political issue in my province. The government of the day, which is no longer in power, wanted to establish a pulp mill. It twisted the arm of the federal government to get a commitment for a regional development grant. It was quite a large grant, $12 million or more. The federal government said it would insist that the new pulp mill in the Meadow Lake area meet all the pollution standards being established by the Department of the Environment. I had occasion to question the deputy minister and some of the officials of the Department of the Environment. I was assured by various officials of the Department of the Environment. I was assured by various officials, including officials of the Department of Regional Economic Expansion, that this firm and the provincial government were really serious about tackling the pollution problem. They saw no reason why they could not solve the problem.

We all know what happened in Saskatchewan. The government of that day was defeated in 1971. The new government, in honouring a commitment it had made during the election campaign, undertook to wind up the agreement that had been signed for the construction of the pulp mill because it felt the benefits that would accrue from this development were not commensurate with the very large cost involved. It took a great deal of courage to make such a decision.

I do not have the clipping before me at the moment, but last fall I read a news article which appeared in two Saskatchewan papers. The article reported an address given by a top official of the Department of the Environment; as a matter of fact, one of the officials whom I had questioned in May, 1971. He assured me there would be no problem in dealing with pollution. However, after the agreement had been wound up, this official, Mr. K. C. Lucas, said in Saskatoon that the pulp mill never had a hope of meeting the pollution control standards being established by the Department of the Environment. The story that came out was what we had suspected all along. It came out when it would not do any harm to certain people who had a political stake in that mill. This is one of the concerns we must have.

Another example involves the hon. member's constituency. I understand that a charcoal plant was proposed for the community of Wilno in the Madawaska Valley. I think that is in the hon. member's constituency. The hon. member is shaking his head in the negative. In raising this matter I want to make it clear that I am not jumping to conclusions; I am simply raising some points that have been drawn to my attention and which I feel deserve consideration. These involve some of the considerations we must bear in mind when dealing with the whole question of industrial development and attracting new industry to areas.

Some time ago an announcement was made for the construction of a charcoal plant in the community of Wilno. No doubt this was welcomed by some people. In making the announcement, the Minister of Regional Economic Expansion (Mr. Marchand) said it should be clearly understood that the conditions of the agreement on which the grant was based required the company to meet all the anti-pollution standards laid down by law. He stated that

no money would be forthcoming from the department unless the anti-pollution equipment met the standards laid down by law. He did not specify in that announcement whether he was referring to federal law or provincial law. The information I have may be subject to correction, but I understand that the Department of Regional Economic Expansion was simply going on the basis of standards set by Ontario provincial authorities. I am not in a position to judge whether those regulations are adequate or not, but I raise the question.

This should be a matter of interest to the federal Department of the Environment. Even though it may not have legislative authority to deal with a matter of this nature, other departments such as the Department of Regional Economic Expansion should be able to draw on the Department of the Environment for a judgment on the adequacy of standards that are maintained where a grant is proposed by the Department of Regional Economic Expansion.

Another area where there is cause for greater integration and co-ordination of effort is grants to foreign-owned or controlled firms. I have raised this matter on a number of occasions in the House. The question is before us for debate today under the government's bill concerning review of foreign takeovers. We are dealing with a piece of legislation which, however inadequately, proposes to provide a review mechanism in respect of a foreign-owned or controlled firm proposing to take over a Canadian firm or enterprise. At the same time, the Department of Regional Economic Expansion is to continue its current policy of providing grants to firms and applicants no matter whether they are Canadian owned and controlled or owned and controlled from outside Canada.

If the objectives in the foreign takeover review bill, Bill C-201, are to be accomplished it is inconsistent for the federal government to carry on its present policy through the Department of Regional Economic Expansion of continuing to make incentive grants to foreign-owned and controlled firms without any other policy development.

Over the past three years the Department of Regional Economic Expansion has spent $1.2 billion. Another $500 million expenditure is proposed for the current fiscal year. Already $250 million has been committed under the Regional Development Incentives Act in grants for the establishment of new industry. Much of this amount still has to be spent. I suggest that there is no evidence of progress in overcoming regional disparities through this program.

The fact is that the federal government and the Department of Regional Economic Expansion have indicated that this is a priority program undertaken in an attempt to overcome regional disparity. The program simply has not been successful. I am not suggesting there is not a place for some grants being made to industry, whether public, private or co-operative, but the emphasis which is being placed at the present time by the department on giveaway grants must be changed because it is not serving the function it should be serving and the people of Canada are not getting the value they should be getting for their money.

June 5, 1972

I continue to believe that regional disparity must be overcome. It must be the subject of priority attention because inequality in the distribution of our national wealth remains one of the greatest threats to our nation. When we do review this program there are certain provisions which should be incorporated in it.

First, direct state intervention is needed to establish an industrial strategy for each region. The federal government in co-operation with the provinces must be prepared, at least at the outset, to invest directly in enterprises which can be viable in the long term.

Second, the corporate tax structure should be overhauled so that taxes reflect the real social cost, such as overcrowding and congestion, of industries locating near cities such as Toronto, for instance, as opposed to the Maritimes, the Prairies or Renfrew county.

Third, a carefully planned infrastructure program coordinated with industrial development is needed. Co-ordination is presently impossible because the department only responds to propositions made by corporations which present applications, and such proposals are only haphazardly tied to the department's program for giving slow-growth regions the basis they need for development.

Fourth, there must be a greater measure of consultation with the provinces and with local governments and organizations. Regional development cannot work effectively if the support of the people in the region concerned is tepid because their views have been set aside. This program needs overhaul. I know that all of us are committed to the principle of overcoming regional disparities in Canada, but we must find more effective ways of doing so than have been presented up to the present time.

Topic:   REGIONAL ECONOMIC EXPANSION
Subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30,1972
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PC

Maclyn (Mac) Thomas McCutcheon (Deputy House Leader of the Official Opposition)

Progressive Conservative

Mr. Mac T. McCutcheon (Lambton-Kent):

Mr. Speaker, I am honoured to have an opportunity to support the hon. member's motion and to spend just a few minutes before six o'clock commiserating with him on the difficulty he faces because one part of his constituency is designated while the other is not.

Long before he became a member of this House I experienced the same upsetting arrangement in Lambton-Kent. In those days, areas to be designated were decided on the basis of unemployment figures originating in various Unemployment Insurance Commission offices. This arrangement left a terribly grey area affecting the jurisdiction of the Wallaceburg unemployment insurance office and the Chatham office which at that time was not designated. Thus, I have reason for sympathizing with the hon. member and I am pleased to support his motion, particularly since he has called for an enlargement of the designated area. I am sure I speak for him when I say it must be uncomfortable to contemplate a high degree of unemployment in Lanark involving the closing down of plants, while just a little way north in Renfrew everything seems to be booming.

In Lambton-Kent we also carry on a lumber industry, though not to nearly such an extent as the country which the hon. member represents. I was in conversation the other day with a sawmill operator who was forced, as part of the fight against pollution, to make a $50,000 invest-

Foreign Takeovers Review Act

ment in a wood-chipping machine. He is going to make wood chips and sell them to the United States. One of my hon. friends asks whether they will be used to make charcoal. No, these wood chips from southern Ontario go through a manufacturing process in which they are made into inexpensive pressed board.

When the policy of assistance to less developed regions was first announced by the Minister of Regional Economic Expansion (Mr. Marchand) on March 11, 1970, he outlined the area in Renfrew which was to be covered, but in the closing part of the statement he said-I am quoting from his announcement-that the agreements being made with the provinces would be for the same period as the designations; for most of the areas, however, it was expected that these agreements would be followed by further joint development plans extending over a five-year period.

Topic:   REGIONAL ECONOMIC EXPANSION
Subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30,1972
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LIB

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

Liberal

The Acting Speaker (Mr. Boulanger):

Order, please. The time allotted for private members' business having expired, I do now leave the chair until eight o'clock.

At six o'clock the House took recess.

Topic:   REGIONAL ECONOMIC EXPANSION
Subtopic:   REQUEST FOR EXTENSION OF DESIGNATION OF RENFREW COUNTY BEYOND JUNE 30,1972
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June 5, 1972