Mr. Deputy Speaker:

The hon. member's point is, of course, very important. It is one with which the Chair always has difficulty. Hon. members know that we make more progress if we follow the rule of relevancy. It is, of course, difficult to cut deeply between a motion and an amendment. The line is set by members who open the debate to a much broader scope from one speech to the other. It is difficult to ask the Chair at one point in the debate to restrain one particular speaker. However, I would hope that the hon. member will at least once in a while refer to the amendment.

Mr. Symes:

I know that members of the Conservative party do not like hearing exposes about how this government, through its tax policies, rips off the Canadian

February 10, 1975

people. However, I have the right to expose this kind of financial chicanery.

I was saying that the government went to Winnipeg only with the intention of getting the decision of the oil companies to postpone their plans for cancelling the project. The Minister of Energy, Mines and Resources said he wanted studies. The Alberta government has done four studies on the cost aspect of the Syncrude project. One was done by Foster Associates, one by Hu Harries Economic Consultants, one an analysis by Price Waterhouse, and one an engineering feasibility study on cost projections by Loran International.

It is important for the Canadian public to know that this government, on that fateful Monday, did not have these four analyses of the Syncrude project as to cost.

The government committed $300 million and an open ended 15 per cent liability on any future cost over-run without the benefit of these studies. It went into the deal blindfolded. We learned from answers in the Alberta legislature that the federal government received the Loran International study late Sunday night. It did not have time to analyse it before the fateful decision was made on Monday. It received the Price Waterhouse analysis on Monday. The Foster report was mailed to the federal government from Edmonton on Monday night or Tuesday morning, after the Syncrude arrangement had been concluded. The federal government has not yet received the Harries study. If there is a better indication of a government working hand in hand with the oil companies, I do not know what it is.

There were adequate studies for the government to see what it was getting into, yet it succumbed to the blackmail of the multinational oil companies involved in the Syncrude project.

Here we have a plan. Any questioning person would want to know why it increased from an original $356 million to over $2 billion in 12 years and escalated from $846 million to $2.2 billion in the past seven months. However, the government accepted the figures of the same multinational oil companies as to the amounts of oil we had in this country throughout the fifties and sixties. How did these companies pull the wool over the eyes of the gold dust twins on the front benches?

This cannot be put down to natural inflation. Shell Oil Company computed in its study of the oil sands development that a capital cost inflation rate of 5 per cent per year would be considered reasonable. In no way can the kind of cost escalation which I have just described fall into that pattern.

The other reason why there has been such a cost escalation is that the oil company partners of Syncrude do not buy the capital items needed to build the Syncrude plant competitively on the open market. They buy from their subsidiaries and affiliated corporations, which deliberately inflate the prices.

The contractor for the Syncrude project is the famous or infamous American construction company, Bechtel Corporation, the same corporation Premier Bourassa hired to destroy the environment of James Bay. Bechtel Corporation is the main contractor. It buys from its subsidiaries capital equipment at inflated prices and pays inflated

Income Tax

engineering fees. It is also reported that Bechtel is 36 per cent owned by Exxon, which is the parent company of Imperial Oil, one of the partners in the Syncrude project.

There is a nice trading arrangement going on between the oil Company partners of Syncrude to inflate deliberately the price of the project in order to bring the government running with cash to the oil companies. The federal government has accepted the oil companies' figures. How can the oil companies be trusted in view of their past behaviour? These companies have hoodwinked the government and the Canadian people.

The public relations aspect of this project is incredible. A few weeks ago we heard that Atlantic Richfield was pulling out of the scheme because costs had escalated away beyond proportion. Atlantic Richfield did not pull out of Syncrude because of escalating costs. It pulled out because it does not have any refineries in Canada. It could not get a commitment from the government for unlimited export rights in order to send oil to its refineries in the United States. That is why it pulled out, not because of escalating costs. They were on the inside. They know the cost escalation is phony.

For 15 per cent ownership of Syncrude the federal government is putting up $300 million in equity funds. For 10 per cent equity, Alberta is putting up $200 million, plus giving the oil companies $200 million in loans, and building for them a $600 million pipeline and power plant. The Conservative government of Ontario has likewise been hoodwinked. It is very easy to hoodwink provincial Conservative governments. For 5 per cent equity the Ontario government is putting up $100 million. The private companies will control 70 per cent of the Syncrude project.

The federal government has committed itself to 15 per cent of the cost over-run. If the pattern of escalation which I have described continues for the next few years, the government will be paying hand over fist for the operating cost of the plant and will not have any kind of majority control or input in the decision-making process. In the light of this situation it seems the time is long overdue when the federal and provincial governments should take over full public ownership.

As if giving them money is not enough, the Minister of Finance announced in his November budget, or subsequently, that Syncrude would be exempt from the tax provisions in the most recent budget. This means that what the oil companies invest in Syncrude can be written off against profits from other operations, such as heating oil or gasoline production. In other words, if Imperial Oil invests $300 million in Syncrude, under the tax system applicable to them they will be able to write off $400 million against their profits from other operations. If that is not a rip-off of monumental proportions, I don't know what is.

It might sound at first hearing as though the government were getting tough in the November budget, but if you read the fine print you will see what is really going on in the corporation tax field. The government is propping up the multinational companies with public funds without being able to exercise any real measure of control over their activities.

February 10, 1975

Income Tax

We are subsidizing the oil companies through government funds and through tax incentives, and the bulk of the advantage goes to the parent companies rather than to Canadian companies. If we are putting up capital we should get the benefit, we should be able to exert control so that we could direct policy as well as control price.

When we advocate public ownership, as has been done in a number of enlightened countries, government spokesmen argue that public ownership is not possible because it would cost too much-it is not possible to find $2.2 for Syncrude. First, we challenge the assumption that the project would cost $2.2 billion; we would carry out a proper cost analysis before buying it out. The government of Quebec does not find any difficulty raising $14 billion for the James Bay project; Alberta finds no difficulty in raising $1 billion to bail out the oil industry in that province.

Mr. Blais:

On a point of order, Madam Speaker, on February 6 when we were studying the same bill I rose to say that in my opinion the member who had the floor at that time, the hon. member for Yorkton-Melville (Mr. Nystrom), was not discussing the subject matter of Bill C-49. I am expressing now what I believe to be the majority view of members present in this chamber when I draw your attention to the fact that the hon. member for Sault Ste. Marie (Mr. Symes) is doing the same. What he is now discussing is a political philosophy; he is advocating public ownership as opposed to private ownership. That is what he is basically discussing though it is a matter he ought to have discussed when we were considering Bill C-32.

This bill, Bill C-49, has been in the House for a long period. Everyone is anxious for its passage, and I wish the hon. member would turn his attention to something which is germane to the particular legislation we are considering.

Mr. Symes:

The points I am making are obviously getting to members on the Liberal benches. The hon. member for Nipissing (Mr. Blais) raised the same canard last Thursday, but Mr. Deputy Speaker ruled that the hon. member for Yorkton-Melville (Mr. Nystrom) was in order, and I am sure the same circumstances apply.

Mr. Paproski:

On the point of order, Madam Speaker, there is a point of order before you. When a bunch of blatant hypocrites in a minority party try to tell the Speaker of the House what to rule, I think we should form a united force here and make sure we put those guys in their place.

Mr. Fairweather:

That is rule 47A.

The Acting Speaker (Mrs. Morin):

The hon. member was speaking on the amendment to the bill, and it is difficult to disassociate the amendment from the bill. If he wishes to speak on the amendment we shall listen to him.

Mr. Symes:

Thank you, Madam Speaker. It is interesting to see Conservative and Liberal members leap to each other's defence when we call attention to the sell-out-

Oh!

Mr. Symes:

As I was saying, the public has for long been subsidizing the oil industry through tax concessions.

During the sixties, because of the tax policies adopted in Ottawa and perpetuated by this government, 38.4 per cent of the capital of the oil companies was supplied through tax concessions and write-offs. That is to say, twice as much capital was given by the taxpayers through concessions as was supplied by parent companies. The parent companies supplied only 17.6 per cent of the capital, and in return they got back in the form of dividends from their Canadian operations 18.1 per cent of the revenue. This incredible tax situation, perpetuated by the Liberal government, is another factor we should bear in mind when considering whether we can afford to buy control of Syncrude and develop our natural resources in the Canadian interest.

Another argument which is usually brought up against treating our resources as a public utility is that we cannot do so because we lack the necessary technical expertise. This is an overrated argument. We should bear in mind that the oil companies interested in Syncrude do not themselves possess the necessary expertise. As is a common practice among oil companies they contract out to drillers and other firms which do the work in the field for them. There is no difficulty about the Canadian government contracting work out in a similar way.

Contracting out to Bechtel, the United States corporation, worsens the balance of payments situation about which the Minister of Finance is so concerned. So Syncrude will not only be borrowing from Canadian banks to pay Bechtel, it will be profiting from tax concessions as well. Jobs will go to the United States rather than to Canadian engineers and firms.

The other day I asked the energy minister what percentage of Canadian firms would be employed in the contracting, and how many Canadian engineers would be engaged. The minister did not have any figures, but the figures I have indicate that the bulk of the contracts have already been let to United States firms and engineers. As an example of the amount of money being spent outside the country in the Syncrude deal, there are four draglines supplied by two American companies at a cost of $65 million; two fluid cokers from the United States costing $66 million; a sour water treater from the United States costing $500 million; desalting of raw bitumen will be done by a Texas company.

The basic technology for the Syncrude deal was developed in Alberta by Canadian engineers with the Alberta Research Council. Yet the oil companies are taking the research done by Canadians and hiring Americans to fulfil the contracts. If the government owns Syncrude, we could hire Canadians and contract out to Canadian firms and engineers.

The Acting Speaker (Mrs. Morin):

I am sorry to interrupt the hon. member but the time allotted to him has expired. The hon. member for Comox-Alberni (Mr. Anderson).

Mr. Symes:

On a point of order, Madam Speaker-

February 10, 1975

The Acting Speaker (Mrs. Morin):

The hon. member for Sault Ste. Marie on a point of order.

Mr. Symes:

Perhaps Madam Speaker can correct me, but I believe I started at 9.20 and have five minutes left.

The Acting Speaker (Mrs. Morin):

The record shows that the hon. member commenced at 9.14, so his time expired at 9.54.

Mr. Symes:

A further point of order, Madam Speaker-

The Acting Speaker (Mrs. Morin):

The hon. member for Sault Ste. Marie on a further point of order.

Mr. Symes:

Were deductions made for all the interruptions by Conservative and Liberal party members?

Mr. Turner (Ottawa-Carleton):

They were the best part of your speech.

Mr. Hugh A. Anderson (Comox-Alberni):

Madam Speaker, I thank you for the opportunity of speaking on Bill C-49 dealing with taxation. Since the comments tonight have dealt almost exclusively with the oil industry and Syncrude, perhaps 1 may be allowed a few minutes to speak on the same subject. In the debate I have heard in this House over the last several days regarding oil, taxation and Syncrude, a few points have not been mentioned, and I should like to refer to them now.

I believe most hon. members realize, with today's economy and oil shortages that there is a tremendously explosive situation in the Middle East which could erupt any day. We have no guarantee of oil from the Middle East today, tomorrow, or at any time in the future. Certainly this is a very untenable situation for Canada; we cannot rely upon this oil or upon these suppliers.

If the government were to say that the Athabasca tar sands, our greatest known oil resource, are a dangerous gamble and that we are going to rely upon the supply of energy by other nations, then I think the government would be derelict in its duty, because we cannot rely upon other sources of energy. When a government takes power it must gamble on the side of safety; it must protect the Canadian consumer. It would be irresponsible if we did not take every means we have available in order to ensure a supply of oil for Canada, regardless of what any opposition party may say.

Secondly, in discussing Syncrude and taxation, the government must surely make every attempt to see we are self-sufficient in energy in the future. Not only do we not have a safe source of energy supply from outside Canada; it is the government's responsibility to protect the Canadian consumer pricewise, and we all know that the price of oil across the border and from across the seas is much higher than what we are paying in Canada. Again I think the government would be derelict in its duty if it did not make every attempt to produce oil for Canadians at a price that Canadians can afford.

We are very fortunate to be one of the few industrial nations of the world that are not being held hostage to fortune. The position we are in today has been called luck, it has been called good management. I really do not care

Adjournment Motion

what it is called so long as our balance of payments is not such that we are bled to death paying for oil we can produce ourselves.

I take umbrage at the remarks of the last speaker who would let political motives interfere with what I consider to be a duty. This duty is to get oil on stream regardless of what are our political motives. Because it is for Canadians, not for political philosophy-