Mr. Grise:

Mr. Speaker, I would like to respond briefly to what was said by the Hon. Member for Kamloops-Shuswap (Mr. Riis), and especially his comments on democracy. Mr. Speaker, that is exactly what we did. We moved to extend the debate for another hour so that more Members would be able to speak to the Bill, and then the spokesman for the New Democratic Party rose, together with the Liberal Whip, to vote

against the motion. They rose to object to an extension of this debate that would allow Members to speak to this important Bill. And then they have the nerve to accuse the Progressive Conservative Government of violating the principles of our democratic system in this country.

Mr. Speaker, I heard another Member of the New Democratic Party.. .

The socialists!

Mr. Grise:

. . . the socialists, of course. The Hon. Member said that as usual, the federal Government was questioning the capability of public servants to manage a department if they did not happen to be on the Hill or in the Ottawa region. I think it is unconscionable that anyone should make that kind of judgment regarding the federal Public Service.

I want to respond to the Hon. Member when he tells people sitting in front of their television sets that he is talking about what is important, that is democracy. I tell him and all the NDP Members that what is important for the people of Canada, particularly the people of western Canada sitting in front of their TV sets right now, is that this Government approved the Bill as soon as possible so the Minister responsible can apply the new policies and help western farmers and the western business community. That is what is important and that is what democracy is all about.

Mr. Nystrom:

Mr. Speaker, the Hon. Member talks about democracy. I want to remind him once again that I have been in this House almost 20 years and this is one of the more important debates we have had. It seems to me very strange that the Conservative Party is complaining about this debate going on too long when it has lasted about five and a half or six hours. That is absolutely incredible for a debate about a major economic initiative affecting an important region like western Canada. I have seen many debates over many issues much smaller and much less relevant than this go on for days in the House of Commons without complaint by the Conservative Party. Why would they complain about five or six hours debating western issues? The west is very important to this country.

Another point I want to make is that the Parliamentary Secretary was waxing eloquent about an extra three or four hours of debate. If he is so concerned about that, why did the Government take months and months to introduce the Bill? The agency was announced in August of 1987 and here we are now nine months later only just at third reading. Why did the Bill not come forward back in September for second reading, then into committee hearings, and third reading before Christmas? I do not know why the Hon. Member is complaining because we want to spend a few extra hours debating very important western initiatives.

May 3, 1988

It is important, not just for people in Western Canada but for all Canadians across this country to have a debate on matters that are of vital importance to the West, because we now make up 30 per cent of the population of this country, and I would like to have several days' debate on the major economic issues in our region.

Mr. Grise:

Mr. Speaker, the socialists are talking about democracy and about the Government muzzling Hon. Members. We are starting on hour six of this debate on third reading, Mr. Speaker, and we have just moved a motion to continue sitting during the lunch hour, and the NDP voted against the motion.

Mr. Nystrom:

I did not!

Mr. Grise:

We had the debate on second reading, Mr. Speaker. That debate is finished, and we did not muzzle anyone. There were no Members of the socialist party left to speak to the Bill.

After second reading, the Bill was referred to a legislative committee, and no amendments were introduced by the New Democratic Party.

We have now reached the third reading stage, and the most important thing now, Mr. Speaker, is to have this Bill adopted, and while it is particularly important to Canadians in Western Canada, it is also important for regional equality. Whenever a Bill is introduced, the socialists are always against it. You will recall, Mr. Speaker, that they voted against Bill C-22, the bill on drug patents. They also voted against the Bill to sell Canadair to Bombardier. They voted against all these Bills, while claiming they were in favour of regional equality in Canada. Mr. Speaker, this does not make sense because, and I would like to conclude at this point, the New Democratic Party and the Liberal Party have had every opportunity to discuss this Bill on second reading and in committee.

Mr. Ian Waddell (Vancouver-Kingsway):

Mr. Speaker, I would like to enter this debate on western diversification by telling my hon. friend opposite that he makes the point that what is important is that we get going on the western development initiative and pass this Bill quickly. Let me point out to him as a Member from western Canada, which I have been for nine years now, that what we need is to do the job properly. We need to get on with diversification, but we have to do it properly. We have had too many failures in the past and western Canadians know that.

I will give him an example. One of the policies that got Peter Lougheed, the former Premier of Alberta, elected in the early 1970s was that he was for diversification of the Alberta economy. He was going to use the oil and gas revenues of Alberta to diversify that economy. Indeed, I believe the Heritage Fund was developed to put some of that money aside for a rainy day and also to help diversify the Alberta economy.

Western Economic Diversification Act

The Hon. Member for Athabasca (Mr. Shields) has been speaking in this debate. He is from the oil sands area of northern Alberta. He knows about the problems of bankruptcy and economic difficulties that developed when the oil industry went into a downturn.

We have the same old pattern of boom and bust in Alberta, even after the efforts of diversification of the Lougheed Government provincially. We have the same situation in Saskatchewan, in spite of great struggles in the past by Governments on both the left and the right. NDP Governments used Crown corporations for public policy purposes to try to diversify and develop the potash industry and so on. Governments to the right used different methods of bringing in foreign capital and so on as they saw fit to develop that economy. Yet, what happens when world wheat prices go down? Saskatchewan farmers and other farmers in western Canada suffer.

A few minutes ago a government Member asked whether the $5 billion that the Government gave to the wheat farmers was not aid to western Canada, whether that will not make the people happy. It was aid to western Canada but it was bail-out aid. It was not to diversify the economy but, in fact, to save some farmers in western Canada from almost certain bankruptcy. That bail-out was necessitated by the fact that the western economies are still not diversified and are still in a boom and bust situation.

The forest industry in my own Province of British Columbia is another example. When they are building houses in the United States, when that market is active, our industry is booming. When that goes down our industry is in a bust situation, people are laid off, and we have a stagnant economy in British Columbia.

It is the same in mining and in fisheries in the Province of British Columbia. Western Canada exports these resource products, often in raw form. A wonderful example of the lack of diversification is that the Province of British Columbia exports raw logs to Japan where they are cut up into lumber. A country with that kind of economy will always be subject to boom and bust.

There is a great feeling in western Canada that we must have diversification. However, we do not want phoney diversification. We know that it will not be easy. I will give you another example. I live in Vancouver. The Vancouver airport is in a suburb of Vancouver called Richmond from where you take the bridge to Vancouver. Between the airport bridge, the Oak Street bridge, and the Knight Street bridge there is a store called Ikea. It is a Swedish store to which young families go to buy wooden furniture. The furniture is fairly cheap and you assemble it yourself. It is very popular and beautifully designed.

Outside that store you can smell the Canadian wood. You can smell the log booms in the Fraser River and the odour of

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Western Economic Diversification Act

the mills near the Fraser River which are cutting up Canadian lumber. They either export the raw logs or cut up the lumber and export it. However, the young Canadian family goes into the store and buys Swedish-manufactured goods made from Swedish lumber. That is an incredible example of the lack of diversification of an economy in western Canada.

The same situation exists in Alberta with oil and gas, although there have been attempts to diversify in terms of having a petrochemical industry by using the cheap resources like the natural gas to manufacture different products from oil and gas rather than just exporting it south of the border. The same situation exists in Saskatchewan and Manitoba. That is why we want to take time to debate how good this diversification is. People are very suspicious about it.

I particularly enjoyed the speech of the Hon. Member for Regina East (Mr. de Jong) who said that he had spent some time-and I give him credit for this because it is not easy for a New Democrat-listening to the right wing movement in western Canada, the Reform Party. That Party is not challenging the New Democratic Party in western Canada. It will challenge the Conservative base in western Canada because it is a right-wing Conservative group. As my colleague from Regina pointed out, that group is very alienated from the Conservative Party. That group thought that with the Trudeau Government gone, which western Canada perceived had given it the finger, and with a new, fresh wind of conservatism blowing in from western Canada, there would be a change. They feel, however, that there has not been a change.

We must ask ourselves why there has not been a change. It is partly because the Conservative Government has not been listening to western Canada. It is because it is inherent in the nature of this House of Commons and where the population is located in Canada that Quebec and Ontario will control this House of Commons and in fact control Canada. The genius in governing in Canada is that a federal Government must try to balance all the different regional concerns and deal with all the different regional interests.

One of the criticisms of former Prime Minister Trudeau was that while he did work amazingly in Quebec, while he fought the separatists in Quebec and showed a great understanding of Quebec and was rewarded with 74 out of 75 seats there, he sort of wrote off western Canada. That was the failure of the Trudeau years.

The reason there is alienation in western Canada is because of some of the actions of the Trudeau Government and also because of the failure to have diversification in western Canada, and I am not blaming any particular Party or group of people for that. That is why we must take some time to debate this Bill.

I do not want to get into a shouting match with the Government. I have tried to take a higher road on western diversification. However, the Government does have 211 Members, it does control the legislative timetable of this House. It must know that it has put so many Bills before the House and

mismanaged the time of the House so that everything is now inevitably crowded into the last part of the four year legislative session. That is why we want to take some time to debate the Bill.

We also have some concerns with the Bill. I have a report from the Canadian Federation of Independent Business which is not a support group for the New Democratic Party. If anything, this group is more conservative, populist if you like. That does not mean that we in the New Democratic Party cannot work with them or do not listen to them. Indeed we do and they often have some very interesting things to say.

In the executive summary of the report which they prepared for the Minister responsible for western diversification, they say that their enthusiasm has been tempered toward the initiatives that the Government is bringing forward on western diversification by growing concern that the western diversification initiative is degenerating into a political slush fund to support vulnerable constituencies, lure in big business, or bail out obsolete industries in hopes of gaining short-term political profile. That is the way the Liberal Government of Pierre Trudeau treated western Canada. They say that it could be a bureaucratic slush fund available for other line Departments and Ministers to raid in lieu of other national programs that should have their fair share spent in the West. They state that it could be a narrow and highly centralized approach to diversification, with continued emphasis on megaprojects or traditional resource extraction and development.

The Federation of Independent Business shows some wisdom in questioning the megaprojects because the traditional panacea for development in western Canada that has been offered by western and national politicians has been the great megaprojects like the Mackenzie Valley Pipeline, tarsands development and other projects like the coal project in northern British Columbia. These megaprojects provided lots of money and short-term jobs, but not much diversification.

The former Premier of British Columbia, Dave Barrett, said it very well when he talked about the development of Northeast Coal in British Columbia. Now, it is almost being sold at subsidized prices to the Japanese. He said, referring to the Japanese: "They got the coal and we got the hole".

Finally, the Federation of Independent Business states that this could be a confusing black box lacking clear criteria or policy direction and on a collision course with a myriad of client groups which are inevitably going to see thousands of applications rejected and thousands of hopes dashed.

That is a searing criticism, but to be fair, the Canadian Federation of Independent Business goes on to suggest ways of dealing with this and letting diversification really work in western Canada.

It is important that this debate continue so that we may air these concerns. Canada has always been an exporter of raw

May 3, 1988

goods. Harold Innis, a great historian and economist, spoke about Canada as a colony that served as a traditional resource base for the French, the British, and now the Americans. It is difficult to change that tradition. Indeed, that is a cause for concern in western Canada about the so-called free trade deal.

We already have free trade in western Canada. The Mulroney-Reagan trade deal is not offering us very much more in western Canada. In spite of having free trade, we have seen the Americans impose tariffs on our shakes and shingles, impose countervailing duties on our lumber, put more restrictions on our fish exports and threaten our gas and potash exports. The free trade deal will not change that.

It does not guarantee secure access for western Canadian goods to American markets, which is what we were really seeking. The American Congress can still take countervailing actions and, in return, we gave up control of our energy industry. We agreed to share our oil and gas with the United States on a non-discriminatory basis. This means that we cannot help a plant or mill in the West diversify by allowing cheaper energy prices than we charge the Americans because it would break the free trade deal. We would be giving Canadians a better deal with Canadian resources than we would be giving the Americans.

That is the flaw in the free trade deal, and that is why so-called western diversification will not work. It cannot work if the resources of the nation are not available to encourage diversification of industries in the regions of Canada. Western Canadians are concerned about the so-called free trade deal because it does not provide the federal Government with that authority. In our opinion, the $1.2 billion over five years promised by the Government comes from existing programs and arrangements. It is essentially playing a shell game and not using new money.

What are the long-term chances for diversification? I want to refer to a seminar of the Academy of Sciences from Sweden and Canada. I want to conclude by referring to the comments of the President of the Royal Swedish Academy of Engineering Sciences. He said that knowledge is the fundamental element of competitiveness. Their recommendations include an increase in the appropriations to education and research, improved salaries for teachers in technical colleges and universities, improved money for fundamental research. That is being cut back in western Canada by the Vander Zalms and the Gettys.

The President of the Royal Swedish Academy went on to say that the Government plays an important role as a purchaser of complex technical systems for energy supply, telecommunications, transportation and defence. He concluded by saying: "The sometimes painful restructuring of parts of the manufacturing industry necessary in order to cope with major changes in the international market have most often been supported not only by the government but also by the labour unions".

Western Economic Diversification Act

He went on to say: "In principle, the labour unions accept that changes must occur in vulnerable industrial sectors and will take an active part in the restructuring process or at least not raise obstacles". He said: "We cannot expect to be on top everywhere because it is simply too expensive. What we have to do is identify a few centres of excellence which we should support wholeheartedly". He says that we must be open-minded and prepared to adapt to change.

I believe that is the way to the future both in the world and in western Canada. There should be an emphasis on science and research, and on the education of our young people so that they will have these skills. We should encourage labour and business to work together, and should define centres of excellence to study the future for the fish sector, forest sector and mining sector. These centres of excellence could develop mining and oil and gas technology, rather than concentrate on the export of raw resources. That is the key to diversification in western Canada. That is why we want to debate this Bill and will study closely whether this will simply be a slush fund or another failed attempt at western diversification. I hope that we can elect a New Democrat Government so that we can make a real attempt at western diversification. Give us a chance and we will diversify western Canada.

Mr. de Jong:

Madam Speaker, I certainly enjoyed the comments of my colleague, the Hon. Member for Vancouver-Kingsway (Mr. Waddell), particularly the point he made in his summation of the need for a joint co-operative approach, an approach which involves labour, business and the public sector on municipal, provincial and federal levels. It is a cooperative approach that is needed to get all the factors and elements involved co-ordinated and focused on several areas that need development where we can become winners regionally, nationally and internationally. The Member made the point that the Vander Zalms, the Gettys and the Devines in western Canada have done a lot to put elements against each other, particularly capital and labour, as opposed to bringing them together in a co-operative way. I think he also made the point that only through a joint co-operative approach can we begin to tackle the problems of the 21st century, not just in western Canada but as a nation as a whole. It is important to have a joint co-operative approach.

The question I would like to ask concerns energy and the trade agreement negotiated between our Prime Minister (Mr. Mulroney) and the President of the United States. I remember when the Right Hon. Pierre Trudeau first introduced his constitutional changes. There were many people in western Canada, myself included, who were quite concerned that the constitutional changes were really an attempt by the central Government to grab control of the resources of western Canada.

Prior to that, in the 1970s, Mr. Blakeney, then Premier of the Province of Saskatchewan, had to fight hard with the Hon. Otto Lang and the Right Hon. Pierre Trudeau because

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Western Economic Diversification Act

of an attempt by the federal Government to grab control of the marketing and developing of our potash. Yet it seems to me that in this deal negotiated between our Prime Minister and the President of the United States, not only the provinces but the federal Government, the country as a whole, will lose all ability to plan and develop our gas and oil resources, as well as our other natural resources, including potash. How these resources get developed, the rate at which they are developed, the prices we can charge, and how much we can export, are all given away in this agreement.

For a long time we in western Canada thought we could use our resources, such as our oil and gas, to overcome our disadvantages. The disadvantages are that we are far from major centres of population, so we have the extra expense of transporting. We generally have harsh winters so we have the extra expense of heating plants and equipment which our competitors south of the border in states like Alabama, Nevada and Arizona do not have. We have always attempted to use our advantages to offset our disadvantages, but in this trade agreement all of our advantages are taken away from us. We cannot use the advantages we have, the abundance of energy, for example, to overcome our disadvantages. What people like Mr. Blakeney and Mr. Lougheed fought for, we now lose.

I cannot understand the Conservatives from western Canada here in Parliament who support this agreement. 1 wonder if my colleague, the Hon. Member for Vancouver-Kingsway, (Mr. Waddell) can comment on that observation?

Mr. Waddell:

Madam Speaker, that is a very important observation, especially when the Member says we should use our resources in western Canada, which we have in abundance, to overcome the disadvantages we have, such as our distance from markets and so on. Before I answer, I would like to point out something the Hon. Member said earlier about the cooperative approach. A lot of people in eastern Canada, when they look at the West, think it is the kind of Alberta hard-rock Conservatism which is western Canada. There are two elements of western Canada, two traditions. There is the kind of buccaneer free enterprising system, but there is also the cooperative tradition in western Canada.

When Tommy Douglas went into Saskatchewan, there was a drought and a depression. The place was a disaster. They rolled up their sleeves and worked together in a co-operative approach with Government and private enterprise. Western Canada is now the largest exporter of minerals in Canada, the largest exporter of lumber in the world, mainly through my Province of British Columbia, and the second largest exporter of wheat in the world, mainly through the efforts of the prairies. That was quite a job we did in western Canada since those years of the Depression.

We have to now look to the future. The Hon. Member made reference to oil. A lot of Conservatives do not want to see the national energy policy ever again, so they put it in the free trade deal that that cannot happen again. So Ottawa will not

be able to take any of these measures to have any government control over energy. I find that incredibly short-sighted. Who is going to control energy? We are told the free market. One has to be a fool to believe that the free market controls world energy prices. They are controlled by OPEC, the middle eastern nations, or the seven sisters, the big oil companies, or a combination of both. Even the most right wing commentator in the United States will tell you that. Instead of allowing Ottawa to have some say in the control over the resource, they are going to let Saudi Arabia, New York or Washington have control over our energy resources. That is incredibly naive.

When I saw some of the evidence before the free trade committee, I could not believe it. As the Member opposite knows, I am not advocating total Ottawa control over the resource. I had the privilege, together with my Leader, to bring in a constitutional amendment that was accepted by the Trudeau Government and the country.

Mr. Shields:

Was that the ownership, property rights?

Mr. Waddell:

No, it was the ownership of energy resources in the province. The Member from Regina said that what is really important is that we have these energy resources in western Canada and we have to use them to diversify our economy. We should not give them away either totally to the federal Government or to the Americans or to the Saudi Arabians. We should not give that control away. That is the flaw in the free trade deal.

Mr. Shields:

Madam Speaker, I would like to ask if this is relevant to the western diversification Bill before the House. We have heard this rhetoric before and we will hear it again, but I would like to suggest that he get back to the Bill at hand.

The Acting Speaker (Mrs. Cossitt):

The Hon. Member for Vancouver-Kingsway (Mr. Waddell) is responding to a question and comment as a result of debate he has given previously.

Mr. Waddell:

I do not want to monopolize the time if Hon. Members want to ask questions. Of course, I am responding to the Bill. The Hon. Member knows that. You must have some control if you want to diversify. Who is going to have the control-Ottawa, the West, a combination of both, or the Americans? You figure it out.

Mr. Shields:

The owners of the resource, like Alberta, like Saskatchewan, like British Columbia. You don't like that, do you?

Mr. Waddell:

Perhaps the Hon. Member has another question.

Mr. Shields:

I won't ask him anymore.

Mr. Greenaway:

Madam Speaker, the Hon. Member probably does not know, and it is not his fault, but last night in

May 3, 1988

Vancouver there was a program announced by the Western Diversification Office. It has contributed $171,000 to COFI and the IWA. The plan is to send IWA members to Europe, to Asia and to the United States to look at the lumber markets there and to come back to report what they have seen to the IWA workers right across the province.

The Hon. Member was talking a few moments ago about cooperation and diversification. I thought that he might like to hear something positive. It was announced last night and he probably did not have a chance to see the press release. It is a program involving $171,000, a co-operative effort between COFI and the IWA. It is a bench-mark, a very positive initiative. I am pleased about it. I think everybody is happy with it. It should bring some real benefits to the B.C. industry.

Mr. Waddell:

I could not agree more with the Hon. Member. I am very pleased to hear that. That is a very good example of co-operation. We want to hang together, both in business and in labour in western Canada, or we will hang separately. We are in competition with the whole Asia Pacific, the fastest growing economy in the world. That is why I quoted some of the Swedish engineers. I think they have got their thing together in terms of specializing in co-operation and looking into education, science and research. That is the future. I am pleased to hear that.

I thought my speech was quite positive. I am glad to end on a positive note.