House of Commons Hansard #14 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was reform.

Topics

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10 a.m.

Reform

Chuck Strahl Fraser Valley East, BC

moved:

That this House condemn the government for its neglect of Labrador, and for refusing to resolve the injustice of the Churchill Falls hydro contract, thus perpetuating interprovincial trade barriers and denying the residents of Labrador the right to enjoy the benefits of their own natural resources.

Mr. Speaker, it is a pleasure to lead off the debate on what I think is an often neglected subject in the House of Commons. Labrador is a region of the country that is the news for its natural resources and for its natural beauty. It is something we appreciate as part of Canada. However, it is an area that is taken for granted and has been taken advantage of for years.

It is time to address some of those issues in this debate. I hope that during the discussion we will be able to decide how we can better appreciate the assets of Labrador and correct some of the wrongs that have been perpetrated on the region in the past.

Yesterday during question period we discussed how a contract was awarded in Atlantic Canada but was taken away from a Halifax firm and awarded to someone in another province. Atlantic Canadians, and in particular Labradorians, feel that has happened far too often.

The Churchill Falls contract has been a severe irritant to the people in Labrador since it was signed 25 or 26 years ago. The contract forces Labrador and Newfoundland to sell its power to Quebec, which in turn sells it to the Americans. The price is jacked up 25-fold and Quebec reaps the benefits of a deal that pays almost no return to the people of Labrador.

The people of Labrador deserve much better than this. For 25 years they have sent off their electricity, specifically, and in return have received almost no benefits. They have had almost no infrastructure spending in their region. They do not have a passable highway through their region. They do not receive the tax benefits of a deal that is worth $800 million a year to Quebec.

Every time a premier from Newfoundland says: "We are going to renegotiate, we are going to be tough, we are going to force the federal government to use some of its powers" nothing happens. This has been going on for a long time.

Labradorians are going to make another choice in the next election about who will represent them best in the House of Commons. They will be looking to see how sincere the federal government is in addressing what has been, as we all know, an injustice to the people of Labrador.

Recently we have been hearing more talk from the government side that it is working on an internal trade agreement that will help the free flow of goods between provinces, including trade in electricity. Two years ago it came forward with a trade agreement that would break down the internal barriers to trade. However, the energy chapter is missing. It said not to worry, that by July of last year it would have the energy chapter all intact. That did not happen.

By September of last year a government spokesman said: "Now we will have the contract" but again it was not signed. In other words, the federal government does not seem to be able to understand that an internal trade barrier called Churchill Falls is holding up the entire internal trade agreement. It seems unwilling to exercise its powers and influence to strike that trading barrier down. During the day other speakers will be elaborating on specific points.

I would like to emphasize that although there is much the federal government can do to address this wrong, some of the feel good messages being sent out by the new Quebec premier about how he wants to get along with people, mend fences and so on, it would be a good time for him to express some of those feelings of goodwill in striking a new agreement with Labrador on Churchill Falls.

It is not enough to say we would like to get along. If something is unjust and we know it is unjust, then it needs to be addressed. I

would hope that the new Quebec premier will take the opportunity during these negotiations on the internal trade agreement to fix what is an absolute injustice to Labrador and renegotiate that contract.

In 1969 Newfoundland signed a deal that sold power from Churchill Falls to Quebec for 65 years. Newfoundland signed this deal for two reasons. First, there was an energy glut at the time. It was before the rise of OPEC, the rise in the cost of energy generally in the world.

Second, Quebec frankly refused to allow Newfoundland to build transmission lines on its soil in order to transmit that electricity to the New England states where it was to be sold. In essence Newfoundland had to sign the deal. There is a contract, there is a deal and that cannot be denied.

The deal is so bad and so unjust that it is time not only the Quebec government, but the federal government, waded into this fray and said this is so wrong and it needs to be addressed.

Labrador has no access by land to the rest of North America except through Quebec. Quebec at the time had Labrador over a barrel. Labrador and Newfoundland signed. I wonder where the federal government was at the time. It was an unjust deal. Trudeau refused to deal with it. Clark refused to deal with it. Turner did not deal with it. Mulroney would not deal with it. The current government seems content to talk about it some more. It is talking and it urges us to be patient.

The people in Labrador are tired of being patient. When does the deal expire? It does not expire for another 45 years. For 45 more years the people in Labrador are expected to sell their power at one twenty-fifth of the going rate. Twenty years from now there is a renegotiation clause and the rate will drop again. Labrador will get even less money. It is so unjust that it has to be remedied.

Quebec has an opportunity to show its good faith and willingness to negotiate. The premier of Quebec says he wants good relations as a sovereign nation. It would be a good step for him to renegotiate a contract that is obviously unjust. At the end of this contract in 2041 Labrador will have transferred almost $50 billion to Quebec under this contract. That is $800 million to $1 billion a year. I understand that Quebec signed in good faith at the time but they need now to address an injustice.

The federal government can do something. It could not break the contract, of course. However, it could regulate interprovincial trade. This is one of the powers that should be enhanced as we reconfigure Confederation. Many things should be transferred to the provinces. This is what the Reform Party has said time and time again. We should allow the provinces, Quebec, Labrador and Newfoundland, all the provinces to benefit from their own natural resources. We should transfer many of the responsibilities to the provinces. I think that realignment of powers is a good sign.

One of the things the federal government should do is strengthen its power to regulate and to strike down interprovincial trade barriers. Those barriers cost Canadians between $3 billion and $5 billion a year. The first thing we must do is strike down those barriers if we are to have a free trade agreement that works in North America and the world.

In July of 1975 the minister of energy, Alastair Gillespie, said in a speech in Labrador that he favoured the use of the BNA act to declare hydro lines to be under federal jurisdiction so that they could be built across provinces.

In the west we do not deal much in the transfer of electrical energy, although certainly it is transferred without interest. However oil and gas products are transferred across provinces without an $800 million a year transfer in western Canada.

In 1976 the member for Grand Falls-White Bay-Labrador, Bill Rompkey, now a senator, and the person whose seat in Labrador is now vacant because he has been bumped up to la-la land in the other place, asked this of the minister of industry.

-is the Minister now optimistic that hydro resources in Labrador can be developed for the benefit of the Atlantic region, and will he ensure that the full force of his office, and indeed the Government of Canada is used to bring this about?

Of course there was no answer from the government of the day. Mr. Rompkey said he would talk about it and maybe someone would fix it some day. Here we are 20 years later asking a Liberal federal government about Mr. Rompkey's comments. Is it willing to champion the cause of Labrador and make this deal and the future development of lower Churchill Falls an important issue for the federal government? It does not seem to be.

It is interesting that other parties have made comments about this. In 1976 John Crosbie, the member for St. John's, said: "The federal government has put us in the hands of Quebec". To that a parliamentary secretary on the Liberal side responded: "The government has a strong preference to explore the co-operative approach and to consider exercising constitutional leverage only as a last resort". In other words, "we would like to talk about it", they said in 1976, 1977, 1978, 1979 and for the rest of time, "and Labrador just has to be patient. You do not get a road. You do not get to develop your own assets. You do not get to benefit from future development".

People now in Labrador are saying: "Are we even going to benefit from Voisey Bay? What do we do, just take it on the chin? You eliminate our fish stocks. You take away our way of living.

You take away our future prospects for benefiting from our own natural resources". It is a shame.

In 1980 Mr. Trudeau, another well known Liberal, said: "The federal government could act if two conditions were met: if Newfoundland had an actual contract to sell power and if Quebec charged too much to transfer that power to Newfoundland". He said the federal government would act. He said an unreasonable charge would constitute a trade barrier.

This places Labrador and Newfoundland in a catch-22. How can they enter into a contract when they cannot get permission to transfer their power? If they cannot get permission, how can they get a contract? If they cannot get a contract the feds say they will not act. There they are hung on the horns of a dilemma saying: "We would like to develop something. We would like to put forward a proposal but we are not allowed to wheel our power through Quebec and we are not allowed to build transmission lines. What are we supposed to do?"

The federal government should step in and say it wants to help Newfoundland and Labrador and it is willing to do it in a couple of ways. There are a couple of avenues for addressing this problem.

The first thing the government could do is follow up on a recommendation by a federal government mandated group which tabled a report in 1988 called "Energy and Canadians: Into the 21st Century" which we are approaching. The section entitled "Federal Government Role" recommends:

The federal government should articulate the conditions under which one province has a right to access, on a business basis, another province's electricity corridor or electrical grid for the purpose of transmitting electricity to a market not adjacent to the first province.

In other words, in 1988 again it said: "The federal government should set out the terms and conditions that we could transfer power from one region or one province through another province for sale". The federal government should do that and that has been recommended by that government mandated group back in 1988, which again promised to do something about it.

That is the first thing the government should do. It should state the right of provinces on interprovincial trade, that the right exists. The government should say it will happen, the right exists to transfer power on the electricity grid, to wheel power through another province for sale. The federal government should say that is part of its job and it will do it. It would not require legislation. It is a statement of policy. That is what we should at least be attempting, but the federal government is reluctant for some reason to even do that.

If that is not enough the federal government could take another step. Several suggestions were made by the National Energy Board in a study in 1992. If people in Atlantic Canada could live on studies they would have a very high standard of living. They have been studied to death and everyone tells them they all need help.

The Inter-Utility Trade Review in 1992 suggested several amendments to the National Energy Board Act. One suggestion was to amend the act to give the NEB the power to open up Quebec's transmission lines to allow exports of electricity to other provinces and regions. We are not talking about expropriating any land from Quebec. We are talking about the opportunity to use the lines. Other provinces do it; why not through Quebec? The NEB act could be amended to do that.

The same study talked about the huge benefits of that free trade in electricity; up to $3 billion a year Canadians would benefit from. Another NEB suggestion which can be used is that we can ask for a land corridor to build a new transmission line through another province. We have the power to do that. Section 58(4) of the National Energy Board Act says we can designate a corridor through Quebec.

However, we have to do something because it has been talked about for 25 or 26 years with promises of more studies, talks and negotiations. If the people in Labrador and Newfoundland are told they have to pay 25 or 30 times more for the power to run their own homes and businesses than the selling price is for export, it is unacceptable. The people in Labrador deserve the right to develop and benefit from their own natural resources.

If anything is to come out of the negotiations to settle what role each level of government has in the future of Canada, surely the people who should benefit from the natural resources should be in the province that owns the natural resources. Certainly Quebec would want and demand, and rightfully so, the control over its mining regulations and control over its own destiny when it comes to natural resources. B.C. demands the same thing. Labrador and Newfoundland demand it and should get no less. It is $800 million a year which is not going down the tubes but down the lines and the people are not getting the benefit of it.

The people in Labrador have been taken for granted for too long. It is time the federal government stood up for them and said it will doing something, that it will articulate a policy to request that the internal trade barriers come down, that the people in Newfoundland benefit, that the people in Labrador get to develop their natural resources, that Voisey Bay will not be farmed out to Ontario or to another province, that Newfoundland and Labrador will have the electricity, power and access to the natural resources so that they can become a have province and not dependent on others for a federal transfer payment.

If we were to move that way today and at least say that is to be the policy of the government and the thing we are striving for, we could send a message to the people in Atlantic Canada that they are

not there only for the votes come whatever, but that they are also there because they deserve the right, as Reform Party policy states, to develop their own natural resources.

I hope the House will agree with me today. I anticipate and hope someone on the Liberal side has been studying this issue and will say more than we should talk, study and think about it, but that they are now ready to act.

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10:20 a.m.

Bloc

Réal Ménard Hochelaga—Maisonneuve, QC

Mr. Speaker, I have a certain amount of respect for the previous speaker, after working with him in the human rights committee. If I were a teacher and you were to ask me to assess how rigorous his arguments have been this morning, however, I would be forced to give him a big fat zero. Let me explain.

What we are dealing with is a dispute between two self-managed crown corporations with their own administrative policies. An hon. member rose in the House this morning-and I think that this shows a lot of nerve, not to say chutzpa, even a little rudeness on the part of the Reform Party-to put forward an opposition motion urging the federal government to intervene in a dispute between two crown corporations.

You may tell me: "Yes, but a dispute is possible in relation to what is most sacred in law, namely a contract". Anyone who went to university and took a few law courses knows that a contract is what binds the parties in a world where order, justice and equity mean something.

How can the hon. member rise and ask the federal government to intervene in an area that is none of its business on the basis of a contract that was signed by what we can assume are two enlightened, knowledgeable parties and that runs until the year 2031? How can the hon. member show so much disrespect for Quebec, its premier and its representatives by rising in this House and telling us that it is unfair?

Through you, Mr. Speaker, I would ask the hon. member to pay a little more respect and remind him that, in our system, when people sign their names to a legal document called a contract, they are bound by it. If this means nothing to Reformers, it just goes to show that those people will never form the government.

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10:20 a.m.

Reform

Chuck Strahl Fraser Valley East, BC

Mr. Speaker, I will be interested to hear some of the speeches from the hon. member during this debate.

It will come down to the position of the member.

I am not disputing a contract exists. I have never said that. It has already been to the Supreme Court. The contract exists, but is it right? Would Quebec feel it is right? I do not think so.

Quebec might say "there was a contract and they got us over a barrel. We are taking power at one twenty-fifth of the going rate and for doing that we are netting $800 million to $1 billion a year. We have them by the shorts and for the next 35 or 45 years we will take the boots to them and say they signed so suffer and live with it".

I will ask the hon. member during the speeches that follow if it is just. It is not just. The member knows that. Nobody foresaw the OPEC situation; nobody saw the escalation in prices and demand. Because of this we have a deal which for the next 65 years will keep Labrador and Newfoundland in a have not position; three generations.

We will allow that area to be depopulated. We will allow the people there to suffer the consequences because the deal gives us $1 billion a year. If a deal was signed that would last three generations to the effect that Quebec will take the shaft for the next 65 years at $1 billion a year, would the member say c'est la vie, whatever? I hope he would be up saying Quebec is getting ripped off, that it is not fair and it is not just. If it is not just it needs to be addressed, which is what I hope the new premier of Quebec will do, address an injustice, something that is not fair.

On the legality of the contract, by all means I know it is legal. If by the contract they want to let someone suffer, if they think that is fair, they can do it. I hope they would not. That is one issue.

The other issue is what is the position of the Quebec government on a land corridor for transferring other power from the lower Churchill Falls site? What is its position on the fact that one should be allowed to wield power through the province of Quebec as is done in all other provinces? It is now becoming a North American grid. I hope it would say: "By all means, if you develop Lower Churchill in the years to come you can have either access, a land corridor to transfer that power, or you can have access to our own existing hydro lines to wield the power as we do through all other regions and areas in North America".

There are two issues. Is it just? It is not just. That should be addressed and corrected. More important, "We will not let this continue. We will give you access to our lines and we will give you access to if not that at least a land corridor, something so you can benefit from Voisey Bay mineral deposits with the smelter that will come. We will not make you suffer any longer". That is what is will come down to.

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10:25 a.m.

Perth—Wellington—Waterloo
Ontario

Liberal

John Richardson Parliamentary Secretary to Minister of National Defence and Minister of Veterans Affairs

Mr. Speaker, the debate on the Churchill Falls contract has been in the

House many times. I put the emphasis on timing because this has been given a thorough contract and has gone all the way to the Supreme Court of Canada which ruled that it was a binding contract.

It is the nature of the Reform Party's presentation that concerns me. Reformers came here saying they would do business differently, that they would play. The only reason they are here today is there is a byelection in Labrador. That is the only reason they would ever bring this forward. They cannot hide behind something like that.

We hear the praises that they will pave their roads. Those poor people are being taken down the garden path that you will fix the Churchill Falls agreement. Again, that is something you cannot deliver on.

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10:25 a.m.

The Deputy Speaker

Would the hon. member please address his remarks through the Chair and remember that from now on.

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10:25 a.m.

Liberal

John Richardson Perth—Wellington—Waterloo, ON

Do you think-

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10:25 a.m.

The Deputy Speaker

This is the second time. The member is a parliamentary secretary now. I ask the member to obey this rule in the House and put his remarks through the Chair.

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10:25 a.m.

Liberal

John Richardson Perth—Wellington—Waterloo, ON

Mr. Speaker, I should know better.

I wonder if the party opposite understands that this is an issue which has been given thorough examination by the House and by the Supreme Court. Even though on the surface it looks like it is a bad contract-and it is a bad contract in my mind-it is a valid contract. When a contract is valid the parties have to live with it, unless one side is prepared to acquiesce and say it thinks it is bad and it would like to amend it. That is the only way the contract can be changed.

Does the hon. member know of another method?

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10:30 a.m.

Reform

Chuck Strahl Fraser Valley East, BC

Mr. Speaker, it is interesting that the Liberals say we are not a national party because we do not have any members of Parliament from Atlantic Canada. We are definitely trying to be a party from coast to coast. We are running candidates all over the place. We are running in all the byelections.

When we do our job, when we are out there addressing issues from coast to coast, the member says that we should not be there. I do not know if he wants us to ignore it. I do not know what he expects. However, we are going to be there. We are not going to go away. We are going to be there in his face in the next election. He might as well get used to it because that is the political fact.

We have never said that we should pave a road from one end of the riding to another. We have never said that a paved road is going to be practical. It is never going to be practical to spend that kind of money. However, there could be a road that is at least serviceable, at least a gravel road, something the rest of us take for granted. They just tell people to take a skidoo and have a nice day. We could at least promise them not a paved road with shoulders but a gravel road that could be serviceable so that when the spring breakup comes they do not have to park their vehicles until July.

I have already mentioned three things the government can do. First is on intent and policy. The internal trade agreement is being renegotiated. It has been two years since the energy chapter was promised and it has not been delivered. During the discussions on the energy chapter of the internal trade agreement the federal government could put its foot down and say it is going to break down the barriers to trade.

Second, the government could instruct the National Energy Board to amend the act to allow access either through a land corridor or through a wheeling mechanism to allow electricity to be sold in other areas.

Finally, we should allow Labrador in the very near future, as it develops Voisey Bay and the other rich mineral deposits that are going to pull that province up from a have not province to a have province, to have access to as much electricity and power as it needs so it can develop and benefit from its own natural resources in the years to come.

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10:30 a.m.

Liberal

Jean Payne St. John's West, NL

Mr. Speaker, it is with great enthusiasm that I participate in today's debate.

I take great exception to the hon. member's motion. Historically the federal government has been a firm supporter of Newfoundland and Labrador and its economic pursuits. I might remind the House that it was a Liberal government that negotiated Newfoundland's entry to Canada.

The Reform Party introduced today's motion because there is a byelection in Labrador and it hopes to gain votes by pretending to be a voice for the people of Labrador. The Reform Party took an interest in Labrador only after its member of Parliament, the hon. Bill Rompkey, moved to the Senate causing the byelection. There is no evidence that this issue was important to the Reform Party before that.

The Reform Party election platform only makes reference to the revenue from hydroelectric projects in relation to equalization. It states:

The Reform Party supports the inclusion of economic rents from hydroelectric activities in the public revenue of all provinces for the purpose of calculating the size of federal-provincial transfer payments.

In general, the Reform Party supports energy policies based on market mechanisms with no government involvement.

What makes the Reform Party think it will be able to find a new resolution to this longstanding issue which has been debated by experts for years and heard by the courts?

The Reform Party, which it says is a strong supporter of free enterprise, is questioning a contract which has been ruled valid by the Supreme Court. By raising this issue the Reform Party may be trying to mask its extreme right wing economic agenda which is not attractive to the voters of Labrador.

The Reform Party plans to turn programs such as employment insurance and the Canada Pension Plan into personalized savings accounts or private insurance. That will not find support among the workers in Labrador. The Reform's opposition to any active role by governments in economic development and creating new employment opportunities would indeed hurt the workers of Labrador.

The Reform Party avoids telling the voters of Labrador about its opposition to regional development programs. It thinks that regional development spending in Atlantic Canada has been a failure and Reform would slash programs and eliminate subsidies. The hon. member for Capilano-Howe Sound sums up what his party thinks about Atlantic Canadians and regional development by saying: "We do not give money to our children after a certain stage because we know if we keep giving them money they will never become independent. Sometimes the best things we can do for our children is say no".

Another Reform member of Parliament in his determination to uncover failed attempts at regional development by ACOA resorted to exaggeration to try to make his point. The member attacked ACOA for giving $22,323 to a food research centre at the University of Moncton for a study to develop blueberry jelly for Mega Bleu, a company in Tracadie, New Brunswick. In fact, ACOA had only granted $6,000 and would increase the amount only if the company decided to market its product. Moreover the money was not for jelly but for blueberry products.

The same Reform MP told Nova Scotians he would run there in the next election. When asked about this by a newspaper in his riding in British Columbia, he said: "I was trying to be nice because I knew it would be in the Atlantic Canadian papers. I did not want to say: Who the hell would want to run there?" That is a quote from the Halifax Chronicle Herald of September 22, 1995.

I remind all members of the House that this federal government has a long history of partnership and co-operation with all the provinces and territories. In no way would this government hinder responsible resource development in Newfoundland and Labrador. It has a solid record of working with that province to resolve outstanding issues and dismantle barricades to resource development.

For example, I look at how the federal government is working with Newfoundland and Labrador and other stakeholders to resolve issues surrounding mineral development in Voisey Bay. For more than three decades the federal government has been working with Newfoundland and Labrador on the development of its hydroelectric resources. I can cite countless examples of federal support to my province. Recent examples include the Hibernia development project. We are encouraged with the progress that is being made in connection with the Terra Nova project.

We should establish at the outset that the rights of the provinces in the area of natural resources are clearly set out in the 1982 amendment to the Constitution Act, 1867. Those rights are exactly the same for every province.

The province of Newfoundland and Labrador has the complete right to enjoy its own natural resources. It further has the right to control the development of these resources and any benefits from financial gains by way of royalties and taxes. The same is true again for all provinces.

All crown lands within Newfoundland are owned by the province of Newfoundland. These ownership rights give the province the right to royalties from mineral developments such as in Voisey Bay, as well as for all oil and gas development within the province's boundaries. The province also has the right to royalties from offshore oil and gas development such as Hibernia. The same would be true for any other similar projects brought on line.

These rights are clearly set out under the legislation and are further guaranteed under a number of co-operative agreements between the federal government and the province of Newfoundland and Labrador.

That ownership of crown lands also gives the province the right to control the development of forestry resources. That right has allowed Newfoundland to develop and maintain a sustainable forest resource.

The ownership of crown lands is only one way in which Newfoundland has the right to benefit from its natural resources. There are many other ways which are equally important. The province of Newfoundland and Labrador has the constitutional authority to legislate natural resource related works and undertakings within its boundaries. That constitutional responsibility also gives the province jurisdiction over the generation and distribution of electricity.

I mentioned the amendment to the Constitution Act which clarifies the rights of provinces to control their own natural

resources. The amendment deals with provincial rights concerning non-renewable natural resources and it includes forestry resources and electricity. The amendment states that provinces can make laws regarding the exploration for natural resources. Again, all provinces have this right, including Newfoundland.

The provinces may further pass laws covering the development, conservation and management of non-renewable resources as well as forestry. Again all provinces have the right to make laws concerning the generation and production of electricity including everything from development to conservation to the management of the sites and facilities. In addition, Newfoundland and all other provinces have the constitutional right to pass laws regarding the export of electricity. They can pass legislation covering the taxation of electrical generating facilities.

Some members may feel these rights should be changed, expanded or perhaps cutback. My own view is that they represent a reasonable and fair allocation of authority. These rights are clearly outlined and equally applied. I cannot see how these rights have in any way been denied to Newfoundland or any other province.

Newfoundland has constitutional control of its natural resources as do all other provinces. It is Newfoundland that decided how those natural resources would be developed, how they would be conserved and it is Newfoundland that will decide what the best advantage is.

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10:40 a.m.

Reform

Philip Mayfield Cariboo—Chilcotin, BC

Mr. Speaker, I have just listened to an astounding speech. I cannot believe that a member from Newfoundland would take the stance that it is okay to hold her constituents' heads under water while their pockets were being picked.

The member did not address the motion in any way that I could understand. Does the hon. member agree that Newfoundlanders should bear the brunt of this injustice over the next 45 years? Should her constituents do without the benefit of the resources that will help them build their economy, give them jobs, put their children in schools, put money on the table, give them independence? Who does the member represent? Does she represent her constituents or does she represent the Liberal Party in this Parliament?

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10:40 a.m.

Liberal

Jean Payne St. John's West, NL

Mr. Speaker, I do represent my constituents and I do represent the province of Newfoundland. I am very glad to be able to do that.

I do not concur with breaking a legitimate agreement that was put in place and which has gone through the courts and has been ruled as a legal and binding agreement. Another member of the third party was asked earlier what he would do to renegotiate the agreement. He was unable to provide an answer. Does the hon. member have any suggestions as to how to renegotiate this?

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10:40 a.m.

Reform

Philip Mayfield Cariboo—Chilcotin, BC

Mr. Speaker, inasmuch as I was asked the question, I would be happy to respond. I am going to respond very briefly because I will have the opportunity to deal with it in detail in my speech.

When the member says the hon. member for Fraser Valley East did not offer any suggestions, that is entirely inaccurate. She is correct when she says that there is a legitimate contract. The Supreme Court has even ruled on that. What she does not say is that there are other avenues the federal government could take to relieve Newfoundland of this burden. The member does not speak of those but the hon. member for Fraser Valley East certainly did and I will be referring to them later in my speech.

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10:45 a.m.

Bloc

René Canuel Matapédia—Matane, QC

Mr. Speaker, why is this motion being put forward today? Why waste the time of this House again when we have already wasted two consecutive days this week? The motion reads as follows:

That this House condemn the government for its neglect of Labrador, and for refusing to resolve the injustice of the Churchill Falls Hydro Contract-

And so on. The motion talks about injustice. But as far as I am concerned, the Reformers do not know the meaning of the word "injustice". In a moment, I will give them a brief history of these contracts which, as my hon. colleague from Newfoundland said earlier, were entered into in good faith.

Why is this motion before the House today? It is a matter of political expediency for the Reform Party, and that is cheap. You all know as well as I do that a number of byelections are coming up. Had they not been motivated by these byelections, I hope that they would have chosen a different topic for this opposition day.

You know that the unemployed are worried. In my riding, 5,000 of the 6,500 residents of a small town took to the streets. Not all demonstrators were from Amqui of course. Some of them came from outside of town to show support.

We are going to debate this motion here, while jobless people are in the street. Nice doing. Even at the political level, I am sure that putting this motion before the House and condemning this government will not do much to help the people of Labrador. When I first came to this House, two years or two and a half years ago, it thought that the Liberal government was extremely centralizing and was under the impression that the Reform Party was a tad more understanding toward the provinces.

Today, I realize that the Reformers are worse than the Liberals. They are in fact asking the government to meddle in the provinces' affairs on the pretext of resolving an injustice. I should remind the hon. member from the Reform Party that his party's position is to

the effect that the provinces should enter into agreements between themselves and increase interprovincial trade as much as possible.

Here is what a document, released by that party in January 1996, says: The Reform Party's vision of a new Confederation is that of a Canada in full expansion, that of a stronger and more creative country-how nice-which is as rich, as prosperous and as varied as our land. Our vision rejects the overcentralization of powers in the hands of a few, while insisting on the numerous benefits of a more equitable distribution of powers everywhere in the country and to the provinces.

Does the hon. member not agree with his party's proposals? Is he telling us that his party's vision is only for election purposes, and that if the Reform Party ever becomes the government, which would be a tragedy, it would be much more centralizing than the current government? And Heaven knows that the government opposite is very centralizing. Imagine the worst.

I would like to give a brief historical outline. I could go back to George V, but I will start in 1963. At that time, Hydro-Quebec said that it was prepared to buy all the electric power produced at Churchill Falls, provided it could sell its surplus to Ontario.

Negotiations got under way in 1963, but the parties could not agree on production costs and on a price per kilowatt-hour. Three years later, in 1966, Hydro-Quebec again offered to buy the energy produced at Churchill Falls and, this time, accepted to pay the asking price.

As you can see, the contracts were not entered into lightly. It took three years of negotiating before finally reaching an agreement, in 1966. Daniel Johnson senior was somewhat reluctant to sign the deal, and rightly so, because he feared that the agreement might be interpreted as a tacit approval of a 1927 Privy Council decision regarding the border between Quebec and Newfoundland, following which Labrador became part of Newfoundland. You are all aware of that dispute.

Finally, on October 30, 1966, Johnson endorsed the Hydro-Quebec proposal, taking pains to make it clear his authorization was not of a Newfoundland-Quebec agreement but rather of one between Hydro-Quebec and the Churchill Falls and Labrador Co., alias CFLCO.

Six years after negotiations began, on March 12, 1969, the contract was signed, for the term that has just been referred to: 65 years. It stipulated that Hydro-Quebec would receive 5,225 megawatts from Churchill Falls. Another 300 of the megawatts produced at the Falls would be reserved for the Newfoundland companies.

The contract was not a one way negotiation; the two parties held discussions for years and this was the conclusion they both reached. In exchange, Hydro-Quebec accepted the bulk of the financial risks associated with the project, assuming a portion of the eventual expenditure outlay. It also contributed its technology in the area of high voltage transmission lines. At that time, this was what Newfoundland needed. We should note that the Smallwood government of Newfoundland approved and signed the contract. It bears the signature of the premier himself.

In 1974, Newfoundland nationalized CFLCO and, in 1984, as has been said, the Supreme Court, in a unanimous decision-which is rather rare-in favour of Quebec, rejected Newfoundland's 1980 request to break the contract between CFLCO and Hydro-Quebec. In 1988, another Supreme Court decision confirmed the primacy of the contract signed in 1969.

The Reform Party has a lot of nerve terming this an injustice. The contract was the result of years of negotiations, and both parties were satisfied with its terms, as well they should. My hon. colleague should keep in mind that all of the provinces in this country sign trade agreements and have met on several occasions recently to try to lessen internal trade barriers.

Increasingly there are agreements with Ontario, with New Brunswick, with the Maritimes, that do not involve the federal government. We want to see more of this. It is far easier for provinces to reach agreements between themselves than with the federal government. This is why we are anxious for sovereignty, so that we can negotiate with Canada as well, for that will lead to agreements and to our being heeded more than in the past.

It is not up to the federal parliament to dictate the behaviour of these two provinces in an area that comes under provincial jurisdiction exclusively according to the British North America Act. The government's intereference in an agreement reached between two provinces strikes me as totally unacceptable. I hope the government shares my view.

My colleagues from the Reform Party, who don the garb of ardent defenders of federalism for a day, should understand that provincial relations is a matter for the provinces. I am still surprised that my colleague has tabled this motion in the House.

The members of the Reform Party are always calling for decentralization and returning matters to the provinces, and yet, today, they are playing petty, second rate politics with this motion. They think they will earn votes in Labrador by defending the people there and claiming an injustice has been done.

In other words, we Quebecers are penalizing the people of Labrador, because a contract was properly signed. Even the Supreme Court says this contract is valid and meets the required standards, and must therefore be adhered to.

I would like to ask the Reform Party to withdraw the word "injustice", because it is not injustice that Quebec is creating. We even have agreements with Newfoundland on a number of matters. We have teachers working in Newfoundland, and relations are excellent.

Certainly, the going gets a bit rougher when its premier, in his capacity as representative of all the people of Newfoundland, told us that the five little conditions we were looking for in the Meech Lake accord were not acceptable. At that point, on some issues it really hurt and it hurt a lot.

However, as far as the contract is concerned, it was signed by two firms, not the government, and it is valid. There is no injustice, and it takes a lot of nerve to call the contract unjust.

Supply
Government Orders

10:55 a.m.

The Speaker

My dear colleagues, it being 11 o'clock, we will now proceed to statements by members.