Debates of May 9th, 1994

Pearson International Airport Agreements Act

[The Deputy Speaker]

I see I will have to watch what I say in both languages.

It is very evident that one can get up and refer to Alberta and Canada or Quebec and Canada and certainly the Speaker will never rule that a member cannot use whichever language he or she chooses to use.

So this is a matter for debate, and I respect the hon. member's sincerity in making his point, but I think it is quite clear that in this House we have the right to use the term that was used.

[Paul Mercier, Bloc, Blainville—Deux-Montagnes, QC]

Mr. Speaker, Bill C-22 is part of the pendulum process which has become a tradition with successive governments. The Conservatives privatize, and the Liberals deprivatize. Each step costs the Treasury money and provides goodies for a few friends. The bill before the House today says that the Minister of Transport will play Santa Claus, but it does not offer any information on the

kind of management the government is planning for Pearson airport. Will it be a local authority? A crown corporation? The Department of Transport? Who knows!

Without wishing to take sides, I can say that the management of Montreal Airport by a local authority has proved satisfactory. Aéroports de Montréal is the name of the corporation which has been responsible for the management of Dorval and Mirabel since 1989.

Originally, we had the Société de promotion des aéroports de Montréal, also known as SOPRAM. This advisory body, created in 1987, consists of 21 members belonging to seven organizations in the community, including municipalities and chambers of commerce. Each organization delegates one elected representative, one permanent member and one person from the business community. The seven members of the business community constitute the Board of Directors.

For instance, among the seven organizations that are represented, we find the Corporation de promotion à Mirabelle, also known as COPAM, which represents the interests of the region north of the Rivière des Milles-Îles, where my riding is located. COPAM consists of representatives of development corporations, chambers of commerce, municipal counsellors, and so forth. Thus, the "Aéroports de Montréal" corporation, the ADM, is the leader, at the top of a pyramid where the base is largely made up of all decision-makers and development officers of the sector. That original structure ensures perfect representativeness of the board of directors and the integration of regional development issues into the organisation's objectives.

There is also a local airport authority in Vancouver and Calgary. Some good minds think that the same formula could apply to ports, the port of Montreal among others.

ADM must however deal with the major problem of the two Montreal airports, Dorval and Mirabel. There is no rapid link between the two that would ensure quick transit for passengers and freight. Quebec freeway 13 which was supposed to be the main link was never completed; it is still 13 kilometres short.

In March 1988, Quebec and Ottawa had agreed to share the costs of completing the freeway, which came to a total of $78 million at that time. With a bit of nostalgia I read yesterday an article which appeared during those days in the Voix des Mille-Îles , a regional paper.

It said:

All the members of Parliament of our region were thrilled at things moving again on that project because the completion of the freeway will no doubt have positive impacts on the regional economy.

I stop here the reference to that 1988 article. In any case, since then, nothing has happened, Mr. Speaker, absolutely nothing. It still takes 40 minutes to go from Dorval to Mirabel on four different highways and freeways. This is what humorists call cost-effective federalism.

In spite of this handicap, last year, ADM made an estimated net profit of around $25 million. The company accounts for 43,000 direct and indirect jobs. The economic spin-offs are $2.73 billion.

Spurred on by this example, and in spite of the recession, regional dynamism has led to the creation of new industries and new jobs. Given the present sad state of the economy, this is nothing short of remarkable. One of these new industries is a fencing company, Bolar Inc.; its president, Mr. Lazare, listed Mirabel International Airport as one of the factors which weighed in favour of locating in the Blainville industrial park, just a few minutes from Mirabel.

Of course, industries involved with air transportation are well advised to locate near a major airport. Cases in point are Aerospace Welding, a specialist in the production of engine parts and exhaust systems, and the well-known Air Transat, which are both situated in my riding, near Mirabel.

Light industries, such as high-tech firms, which are the leading edge of the economy, also seek to locate near well-managed airports. For instance, Dowty Aerospace manufactures electronic equipment in Mirabel. DLGL, which recently moved to Blainville, specializes in human resource management software. Teknor manufactures computer components in Boisbriand. Multimeg, also in Boisbriand, produces electronic controls. In Saint-Eustache, Électromed manufactures X-ray generators for hospitals in Paris and Strasbourg. Triton, a firm which produces electronic equipment, is also located in Saint-Eustache.

Other industries, which export most of their production, have moved there recently. For example, Lumec from Boisbriand which assembles lighting systems sells abroad most of its production. We could go on and on naming the companies which, with the help of development corporations, industry commissions and municipalities, have chosen to locate in our area because of its exceptional qualities, most notably the airports of Mirabel and Dorval.

However, an international airport is also dependent on other things, and its development, and the development of the surrounding area, is tied to the air route policy of the government. In this regard we are not much favoured.

Can we expect that once the government has dealt with the Conservative legacy, it will move to give the country an air transport policy?

The other countries did not stay idle. Well aware of the growing importance of the quality of the airline network for the competitiveness of a country, the United States began to build super-airports. In Europe, just to give you an example, the Dutch airport of Schipol is going to undergo a remarkable structure development project which will enable it to become one of the most important transportation hubs in the world. Meanwhile, we are quietly debating deprivatization.

That incredible lack of vision of the government, its stubborn determination to remain down-to-earth in the development of policies can be felt in the railroad sector. These days, England and France are celebrating, in euphoria, the opening of the railway tunnel linking them together. England and Belgium are starting to build the high-speed trains that will link them to that tunnel. In the United States, Amtrak is getting new equipment and four HSTs are under review or under construction. And what are we doing meanwhile?

Our government is reviewing with solicitude the umpteenth study on the implementation of a HST in the Quebec-Windsor corridor that might create 120 000 jobs for many years. One can measure its high level of creativity by looking at its infrastructure program which is necessary, of course, but which is not likely to make Canada one of the most outstanding and innovative countries in the world at the end of this century.

Bill C-22 is perfectly in line with the wheeling and dealing policy which lacks grandeur and vision and which is the earmark of this government. I will vote against this bill.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, I had started to give the chronology of events surrounding the Pearson affair during the debate on the amendment to the amendment. As I did not have time to finish, I will take the opportunity that is offered by this debate on the amendment to continue with that analysis.

We are asking for a royal commission of inquiry, and I think that no one can explain better than Robert Nixon why we must ask for such a commission. Mr. Nixon tells us, and I quote:

My review has left me with but one conclusion. To leave in place an inadequate contract, arrived at with such a flawed process and under the shadow of possible political manipulation, is unacceptable.

One cannot speak more clearly, particularly when one sees that the political manipulation does not come from supporters of only one party. There were two colours in that manipulation, blue and red.

With such words, those of Mr. Nixon, the government cannot justify compensating people who tried to take advantage of these irregularities without first shedding some real light on the whole matter, and the way to do that is to have a commission of inquiry look into it.

And I still quote Mr. Nixon, because he held an inquiry, without however giving himself the means to ultimately intervene. He says to us:

Failure to make public the full identity of the participants in this agreement and other salient terms of the contract inevitably raises public suspicion.

Not with our friends opposite, but in general. And Mr. Nixon goes on:

Where the Government of Canada proposes to privatize a public asset, in my opinion, transparency should be the order of the day. The public should have the right to know the full details of the agreement.

That is on page 11 of the Nixon report. That is why we are asking for a commission to allow us to know the full details.

At the beginning of his mandate, when he had just been appointed, in November 1993, the Minister of Transport told us that he was considering the establishment of a royal commission of inquiry into the Pearson Airport privatization. But he only considered it. He did not make a decision. He was won over, on the advice of his party and following discussions, I guess, with more experienced colleagues of his, who had been ministers longer than him in their days and no doubt told him that, as a minister, one must not think too much. And when it comes to acting, one has to act correctly, meaning not to make decisions that could reveal facts which could prove incriminating for some secret contributors to the party's campaign coffers.

If we go back to 1986, Mr. Don Mazankowski, who was Minister of Transport at the time, had appointed a task force to examine alternatives for the management of Pearson Airport. The report tabled in 1986 stated, and I quote:

"The prime objective of enhancing the airport's relationship with the local economy could not sufficiently be ensured under private sector management. The task force does not consider the private sector option a viable alternative".

The task force rejected the private sector option for the management of the airport. Why then did the Conservative government of the day, just before an election, in the midst of an election campaign, say an agreement had been reached and Pearson Airport would be privatized?

Now we are stuck with that irresponsible decision, denounced by the Liberals, who were in opposition back then and wanted to get right to the bottom of the matter. It sounds like they are not prepared to dig as deep now, not right to the bottom. We are asking that they keep the commitments they made during the election campaign. After all, that was not so long ago.

The year after the 1986 task force report was tabled, the Conservative government proceeded with the first call for tenders concerning Terminal 3 at Pearson Airport. Internal documents submitted last August to former Prime Minister Campbell described the risks associated with this transaction, in particular the increase in the fees to be paid by carriers and the fact this could result in substantial loss of income to the taxpayers.

In these documents, legal advisors indicated the exact make-up of the partnership in question was not known. It is disquieting to think the federal government would go ahead with a privatization plan without having all the facts at hand. It is even more disquieting to see the government which denounced the situation back in the days it was in opposition now refuse to get right to the bottom of the matter.

In September 1990, the federal government announced that it would privatize terminals 1 and 2 at Pearson Airport, while the civil service was negotiating the establishment of public bodies to manage airports in many parts of Canada, like Montreal. After terminal 3 opened, the bureaucrats realized that the airport was half empty and concluded that not only was privatizing terminals 1 and 2 questionable, but that the whole expansion project was anything but urgent.

What is not necessarily pressing in normal times can become urgent just before an election when people have contributed to the election fund. I suppose that it became very urgent when the Conservatives realized that they would no longer be on the government side of the House, although they did not think that they would not be on this side of the House either.

So senior officials used their contacts then to promote an option. That is what specialists on lobbying call the revolving door: officials leave the public service to sell their connections and contacts. I am thinking of Ramsay Withers. A code of ethics should be issued; it was promised in the red book. They have learned very little since then. That is why we want a more thorough inquiry than Robert Nixon's.

Remember that Mr. Nixon had no authority to order the production of documents. Documents are important. In the Ginn Publishing case, we were told that there were documents related to oral agreements that had left traces, as the heritage minister said, and that this contract would reveal discussions from the Cabinet of that time. It is very surprising that a contract would contain Cabinet discussions, but that is what we were told.

Mr. Nixon did not have the power to compel some witnesses to appear before him, so the irregularities he mentioned could be much more serious than those he suspects did occur. That is why we think a royal commission of inquiry should be appointed without delay. Moreover, why all the secrecy surrounding Bob Wright's negotiations, given the Prime Minister's commitment to shed some light on this deal? Do the Liberals have something to hide? If not, there is a very simple way to avoid such an accusation and that is to disclose all the facts. A royal commission of inquiry must be appointed. Then, we will know if the government was really determined to get to the bottom of this matter, to settle the lobbying issue, not do away with all lobbyists, but with the unscrupulous ones involved with companies that finance both parties' election campaigns.

Mr. Speaker, you are indicating that I have only two minutes left, so I will skip a few lines and talk about the Prime Minister who promised, during the election campaign, to order an independent review of the Pearson transaction. In spite of all Mr. Nixon's qualities, on the one hand, he had no authority and, on the other, he was a known Liberal supporter with close ties to the current government. Some Liberals are involved, undoubtedly. We know their names, we have seen them. No contractor gets involved with operations like these without having friends on both sides. That is precisely what happened in the Pearson Airport deal.

When Mr. Chern Heed, who had been Pearson International's chief executive officer since 1987, tells us that his departure is not unrelated to Pearson's privatization, this is troubling news indeed. I also remember reading in the Ottawa Citizen that people wondered why Prime Minister Chrétien remained silent on the privatization of Pearson Airport early in the election campaign, while three weeks later, once the details of the transaction were known, he said that he would intervene. Is it a coincidence that the Prime Minister waited until the agreement was signed before intervening?

Is it also a coincidence that the then Minister of Transport, Jean Corbeil, waited until early October, when the leaders debate took place, to conclude the agreement? Is it yet another coincidence that the government now refuses to shed light on this issue? That is a lot of coincidences for a single case! I might add that several issues have been characterized by such coincidences.

Such coincidences will occur as long as we will have a permissive law regarding the activities of lobbyists, and as long as we will not have an elections act that ensures democratic financing of political parties. Indeed, until we have here a law

such as the one in Quebec, we will be subject to all kinds of transactions of this sort, to all kinds of suspicious dealings.

[Maurice Dumas, Bloc, Argenteuil—Papineau, QC]

Mr. Speaker, lobbying really became part of the decision-making process in the early 1980s. In Canada, lobbyists have mostly influenced the public service and the government. Prior to that date, Canada had no legislation concerning the registration of lobbyists, and the public interest went unprotected.

In 1986, the Standing Committee on Elections, Privileges and Procedure was set up to review the lobbying issue. Some of the witnesses before the committee argued that Parliament had no reason to study this matter. They thought the duty to disclose information would interfere with the right to privacy.

Under the Conservative government, a bill stating the guiding principles behind a lobbyists registration system was drafted. It was based on Bill C-82, known today as the Lobbyists Registration Act, hereinafter called Bill C-44, which was approved on September 13, 1988, and came into force on September 30, 1989. This Act was amended by Bill C-76 passed on February 22, 1993.

The definition of a true lobbyist varies in every country. However, the fundamental principle is always the same, transparency. The public must be kept informed in order for democracy to develop. In Australia, lobbyists are cursorily defined. The word means any individual or corporation that receives benefits, financial or otherwise, from a client during negotiations with ministers or representatives of the Commonwealth government. In Canada, lobbyists are defined as corporations or individuals who will, for a fee or any other benefit, make representations for a client to ministers or public servants.

Before addressing the issue of this outrageous Pearson deal, I want to briefly review the events that surrounded the expropriation process in Mirabel, in the province of Quebec. This gorgeous area is in my riding of Argenteuil-Papineau.

On March 27, 1969, the federal government officially announced its intent to build a new Montreal International Airport, subsequently known as the Mirabel Airport. That airport was to be built in the village of Ste-Scholastique. Sixteen years later, on March 27, 1985, the bells of the Ste-Scholastique church rang to tell the people that an agreement had been signed between the Mirabel people whose land had been expropriated and the Canadian government. Under this agreement, farmers and homeowners were given back a large part of the land they had been unfairly stripped of. Some 80,000 acres out of the 97,000 acres that had been expropriated were retroceded. I was among the citizens who were unfairly stripped of their property.

His Eminence Charles Valois, bishop of St-Jerôme, stated in 1988: "The inhabitants of 11 small towns affected by the Mirabel expropriation order also went into exile. Many left under unfair and short-sighted pressure; others became strangers on the very land their forefathers had cleared. Those who expropriated their land thought they would take it lying down. They underestimated how deeply attached these men and women were to their land".

Their ancestral houses and farm buildings were unscrupulously burnt to the ground, sometimes under their very own eyes, before they were relocated in an urban area. Some of these farmers suddenly found themselves without work or a future.

That decision taken under the government of Pierre Elliott Trudeau reminds us of the role then played by the lobbyists. Farmers did not get rich nor happy following the expropriation. Only sponsors and friends of the government really benefited from this expropriation as is the case in the Pearson deal, which is now before the House.

At that time, the Conseil régional de développement des Laurentides chose to direct long-distance flights to Mirabel and short-distance ones to Dorval. They maintained they had adopted this position to promote the economic interest of the Greater Montreal area rather than individual local interests.

Moreover, the Sommet socio-économique des Laurentides, held around the same time, had already favoured Mirabel as the main Montreal Airport, arguing that this would allow Mirabel to fully play its role as an international airport and to have the necessary interconnections on the domestic and transborder networks.

If Mirabel Airport was one of the worst planning mistakes of the Trudeau administration, we will not correct it by making another mistake.

The entire region of the Lower Laurentians benefits from the economic impact of the airport. Closing down Mirabel Airport to help Dorval would slow the economic development of the Lachute and Mirabel area where unemployment rate is already high. One of the options to stimulate the development of Mirabel would be the completion of highways 13 and 50 but it seems that the two levels of government do not yet see the need for it.

Today, the Montreal airports authority, also called the ADM, is launching a development strategy including reorganized public and shopping space on the mezzanine floor, preventive maintenance of the facilities, enhanced access and a review of the mode of operation. Indeed, large billboards on the airport grounds announce works totalling some $150 million. It is clear Mirabel airport was not the result of an open process nor was the Pearson airport transaction.

The idea of openness brings me to the financing of political parties. In this respect, I would like to remind you of the motion presented in this House by my colleague from Richelieu on March 18, which called for the imposition of an annual maximum of $5,000 on political donations by individuals. That motion reminds us of who we really work for. It is the people who elected us. The member said in his speech: "Some may believe that present measures are sufficient to limit undue influence and that it is in no way necessary to cap donations. Yet,

during the last ten years, charges of influence-peddling made against Senate and House members tend to prove the contrary."

The voters have to regain control of our electoral system. Quebec's legislation on this matter should serve as a model in every respect. The sources and amounts of contributions have to be disclosed. Moreover, the recommendation of a code of ethics for elected and other officials is essential if we want transparency.

There were many players in the scandalous Pearson Airport transaction and I need not name them again since they all made the headlines. As a matter of fact, the person appointed by Prime Minister Chrétien to examine this issue, Robert Nixon, recommended that the contract be cancelled.

In light of all the troubling facts surrounding the Pearson deal, we must ask the Prime Minister to appoint a royal commission of inquiry to look into the activities of these lobbyists.

[The Deputy Speaker]

It is my duty, pursuant to Standing Order 38, to inform the House that questions to be raised tonight at the time of adjournment are as follows: the hon. member for Quebec-Pay equity; the hon. member for Saskatoon-Clark's Crossing-Social programs; the hon. member for Mercier-Unemployment insurance; the hon. member for Regina-Lumsden-Bill C-91; the hon. member for Richelieu-Indian Affairs.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, my colleagues of the Bloc Quebecois have tried to demonstrate with the only tool at their disposal, the Nixon Report, that what could be referred to as the "Lester B. Pearson Airport affair" was in fact a financial venture cooked up by the closest friends of both this government and the previous one. "Money has no smell". We have all heard that proverb as old as the Liberal and the Progressive Conservative Parties. I would even add that it has no colour either.

Things happen without anybody or almost anybody opposite raising any question, because this is part of political tradition. If you wander through a foul-smelling swamp, after a while, you can no longer smell a thing.

When I say that money has no colour, I am pointing to the fact that some of the wealthiest Canadian businessmen were caught backing both horses in the federal political raceway, the blue and the red, to the great displeasure of the Liberals who believed in the exclusivity of their audience with these partisan patrons.

The names of top-ranking civil servants and politicians have been mentioned as important if not pivotal players in the monumental blunder that was the Pearson Airport deal. It is needless to twist the knife in the Liberal wounds by mentioning names like those of the Metcalfes, the Withers, the Hessions and the Kolbers, all well-placed and well-known people who used for their own purposes the experience they acquired while holding very well paid functions.

The values of our society have been quite disrupted in the last few decades; people are valued more for their money than for their moral values.

Canadian political practices are such that people maintain their reputation in spite of the most scandalous attempts to rob the government, with the most brazen impunity. Has the election process become a game of musical chairs where, without further ado, one party replaces another but keeps the same spirit, proceeds the same way to the benefit of the same mentors?

Is there an unwritten rule according to which preceding and new governments pass on power to one another without attacking each other? Does nothing offend the party in power or make it shudder when its own investigator, Mr. Nixon, reveals strange facts, secret dealings, people operating in secrecy and anonymity? By itself, Mr. Nixon's report should have given rise to the worst apprehensions.

Millions of dollars disappear and fall by chance into the pockets of the regime's best friends. Still, no one is shocked, no one is concerned, it is part of the game, that is all.

How much of our national debt has found itself by chance in the bank accounts of the regime's friends? Sleep soundly, Liberals, because Statistics Canada, the Conference Board, Quebec's Conseil du patronat, among others, are not interested in compiling such statistics; our society has not reached that point yet.

Our society and political parties are not even aware that top civil servants or former ministers profit from an expertise acquired at taxpayers' expense, after, in most cases, having received substantial severance bonuses as well as the traditional gold watch and farewell party.

A farewell that is rather short. As soon as they get down Parliament Hill, these people who have been members of political caucuses, know the tendencies of some, the weaknesses of others, the legal loopholes, the traps to avoid or to set off; these people sell their knowledge, which should belong to the Canadian people.

The surest way to prevent these back-room games is to forbid all tax deductions for lobbyist or canvassing expenses, as the Minister of Transport himself said.

If society sees nothing wrong in that, can we blame our leaders for not being offended by it? The opposition will not neglect its mandate. The heart has its reasons of which reason knows nothing. Liberals too, have reasons of which the people know nothing, reasons that no government should have. Things then get very complicated. That is what the Liberals want: they

want to thwart all our efforts to discover the truth and they want to leave the House in the dark.

Nearly half the members in this House did what they could in good faith with a piece of legislation that can almost be described as a political obscenity or even legislative pornography. In this seemingly odious approach to peace-buying, they tried, in keeping with their mandate, to understand the reasons behind this bill, the remedy it sought, and the reason for that remedy.

It is hard to understand the stubbornness of the government in view of what seems to be the boldest attempt to misappropriate public funds in decades.

Neither the Official Opposition nor the Reform Party are trying to bring disrepute to any people,and they do not want to engage in witch-hunting or blame people who acted in good faith. Most of the suspicion here stems from the reluctance of the government to answer legitimate questions.

The relentlessness with which the government tries to avoid anything that could irritate any of the players in this miserable affair can only generate confusion and fear. The official opposition and the Reform Party also, undoubtedly, would be pleased to make amends if it turned out that our suspicions, which the Liberal Party seeks so eagerly to dispel, could not and should not touch our most respectable citizens who are involved in this unfortunate deal.

Our Parliament has certain powers that are sometimes similar to judicial powers in the sense that, when a court makes a decision, it must not only be fair but also be seen to be fair. It is the same thing for our laws; the ones that are voted here must not only be fair but also be seen to be fair. The perennial character of laws makes them offensive when they are compromising in nature and their observance is somewhat uncertain.

History will soon judge their authors, often while they are still alive. A book recently published in Quebec did not wait out the thirty-year prescription to attach to a politician who is alive and well the attribute of "cheater".

Why these hesitations, why so much reluctance on the part of the party in office? Does it not agree, as it is stating, that any inquiry would only dispel any suspicion? But precisely there is suspicion; so let us treat it as we should and everyone's conscience will be eased.

Jean de La Fontaine (1621-1695), a renown writer of fables, undoubtedly a Liberal lobbyist, was hated by Louis XIV but, as any good lobbyist having managed to get around the problem, became a protégé of Fouquet and of the duchess of Orléans.

His easy access was guaranteed, which allowed him to describe so well the lobbies of his time in the famous tale entitled Les Animaux malades de la peste .

They were not all dying from it, but all were stricken, so that in caucus, it was decided that the biggest sinner would be sacrificed to expiate the sins of all the others.

The lion admitted to have eaten some sheep on a few occasions, even the shepherd sometimes; the donkey, whose only sin was to have grazed in the neighbour's meadow, was immediately found guilty and sacrificed.

Does that anecdote not remind you of a story that happened here recently? A little effort, Liberal gentlemen.

In a modest flight of oratory, the Prime Minister showed the door to one of his MPs, who had committed the big blunder of being imprecise in writing his resume. On that occasion, the Prime Minister's sensitive scruples suggested that he would change things. But it seems that will not happen.

For his unforgivable, reprehensible sin, the culprit was executed without further ado.

Does the party have two value systems? One for its intimate funders and other close relatives, the other one for plebeians, the unemployed and welfare recipients?

I think we can assume that La Fontaine knew what he was talking about when he said: "la raison du plus fort est encore la meilleure".

[Francine Lalonde, Bloc, Mercier, QC]

Thank you, Mr. Speaker. Mr. Speaker, the Official Opposition has tabled an amendment to have a royal commission of inquiry instead of adopting the bill before the House today. I have said before in this House that there was a taint of manoeuvring around the contracts, of which there are a quite a few, which were concluded when Terminals 1 and 2 were privatized. This taint could only be removed by a commission of inquiry that would investigate this matter. My colleagues have said so repeatedly, but apparently that has fallen on deaf ears, not yours, Mr. Speaker but those of our colleagues opposite.

It should be clear to them since the Liberals are involved through the people who contribute to the party's coffers, that if compensation payments are not made in full public view, the suspicion will linger that money changed hands under the table. There will always be some suspicion that ties between the traditional parties and governments and the contributors to party coffers remain intact and that this is a case of you scratch my back and I scratch yours. People will wonder: How much will the government secretly agree to pay to a certain investor and why? How much, to whom and why? These questions should be considered, or at least the answers to those questions should be given publicly, and the underlying reasons should also be made known.

Why will the government not let a third party evaluate this deal, a third party with an obligation to answer to the citizens of Canada? Otherwise, consider the opportunities for collusion among individuals who are in a position to benefit from such deals, at the expense of taxpayers in Quebec and Canada? Of course this may not happen, but people will never be sure.

My colleagues have said that not only must justice be done, it must be seen to be done. In this case, we will never be sure there was no collusion.

Who does the government want to protect and why? That is the question. Why does not the government want to know all the facts? Is the strong taint around these transactions not convincing enough? Does the government think that by cleaning up mess, it may be contaminated in the process? How much is this going to cost taxpayers? Can we accept the risk that several hundred or several thousand or even several million dollars will be misspent?

In this connection, I feel I must recall what was said in the course of another debate we had in this House, which will be resumed after the committee has done its work, and I am referring to the cuts in the unemployment insurance program. When an unemployment insurance applicant signs his form and makes a mistake, be it of a week, a day or an hour, not only can the government claim back the money paid in excess, but it can also brand the person a cheater. Even if the Act were not amended, that is what would happen. The government which wants a free hand to give compensation it calls just to investors, some of whom, as we know, contribute to the party's coffers, that same government introduced Bill C-17 which seeks to increase the number of weeks necessary to qualify for unemployment insurance.

That same government wants to limit the number of weeks of entitlement and in that case we are not talking about thousands or hundreds of thousands of dollars, we are talking of a few dollars that the workers really need. Yet, in many cases, these workers are going to be deprived of sums of money very important to them. Of course, the sums involved would not be a suitable compensation for an investor, but to unemployed workers they would help pay the rent and feed the family.

I wish to stress that too often there are two categories of people in this country. The ordinary citizens who have a hard time earning a living, because jobs are scarce, and must respect the law to a tee or be faced with costly penalties. And there are the others, who belong to an ill-defined circle, but can easily take advantage of the gravy train.

At a time when it is so hard for ordinary citizens to make ends meet, when jobs are hard to get, when it is very difficult to raise children and give them an education, we cannot in any way let the government apply a double standard and compensate investors, who certainly spent time and energy, but have probably been compensated already. We cannot let the government yield to undue pressure. Justice is not enough, there must also be appearance of justice.

I should say that Torontonians and Canadians who rely on Pearson Airport should be glad to be spared this deal. The contract provisions which were brought to light in the Nixon report-it was not a royal commission but it makes you want one-reveal that Toronto's economic development would bear little resemblance to the projections based on 30 years and even on 57 years. Without a doubt Torontonians have had a narrow escape.

I can say that because in Quebec, the Liberal Government of the time ordered the construction of a new airport based on projections that said it would lead to the area's prosperity. In fact, it was all the contrary for Montreal. So Torontonians are lucky, but the price to pay must not be too expensive for ordinary Canadians. Even if they are investors who contribute generously to political parties, that does not mean we should give them special consideration. The government, in particular, should not be allowed to do so.

[Maud Debien, Bloc, Laval East, QC]

Mr. Speaker, I speak today on Bill C-22 because I believe in democracy, in the ideal that demands that governments legislate while taking into account the interests of the population and the common good. The decisions taken in this House allow us to reflect and promote the democratic values.

I am among those who believe it is still possible to send people to Parliament so that they can work hard to defend the interests of their fellow citizens. I believe that political representation is based on a confidence relationship between voters and elected representatives.

Democracy is also the process underlying all of our institutions. It is through them that all the great values of transparency, ethics, justice and fairness are conveyed. It is on them that rests the confidence relationship between a government and its citizens. When politicians break that special relationship, the society is faced with individualism, profiteering, cynicism and disillusionment to name but a few.

The Liberal government likes to repeat, in this House, its intentions to make sure that Canadians regain confidence in their political institutions through a better transparency. I do not believe that Bill C-22, as worded, could do it.

All the ploys and the jiggery-pokery surrounding the privatization of Pearson airport under the previous Conservative government are a sad example of incidents which diminish the people's respect and confidence vis-à-vis their government.

Allow me, Mr. Speaker, to remind the House of some elements of this deal we should now call the Pearson saga. The Canadian government announced its political intention to privatize Terminals 1 and 2 at Lester B. Pearson International Airport in March 1992. Less than three months after this announcement, the Request for Proposals process was over. They had received only two bids from Paxport and Claridge. Given the importance of this transaction, everybody agrees that the time limits were too short.

In December 1992, the Paxport proposal was accepted. Later on, Paxport was unable to respect the government's conditions concerning its financial viability. In February 1993, Paxport merged its activities with those of its competitor, Claridge; that merger put them in a monopoly situation which was contrary to the government's guidelines. But this is not the first incongruity in this deal nor is it the last. Be that as it may, a few months later, in the middle of the election campaign, on October 7, 1993, the government and the corporation resulting from the merger of Paxport and Claridge hurriedly signed a legal agreement for the privatization of Terminals 1 and 2 of Lester B. Pearson International Airport.

When returned to office, the Liberal government ordered an in camera review of the situation. That review was completed by Mr. Robert Nixon, a former Liberal minister at Queen's Park. The conclusion of the Nixon report is, and I quote:

My review has left me with but one conclusion. To leave in place an inadequate contract, arrived at with such a flawed process and under the shadow of possible political manipulation, is unacceptable.

On December 3, 1993, the Prime Minister announced the cancellation of the airport privatization contract and on April 13 last, the Minister of Transport presented Bill C-22 which reflects the government's will.

The secret maneuvering and shameless favouritism surrounding this deal hide a reality which is even less edifying. On the one hand the Liberal government claims to be asking for the cancellation of that contract in the public interest but, on the other, it does not worry about public interest when it gives discretionary powers to the cabinet allowing it to pay compensation according to its own judgment. This may well cancel out the positive effects the government says it wanted in the first place. As a matter of fact, the government is asking us today to sign a blank cheque to compensate the companies involved in this transaction. Quite a few political personalities and lobbyists, of Conservative and Liberal allegiance, are closely connected with this whole sorry affair.

In spite of the fact that the Liberal Party promised to get to the bottom of the Pearson saga and to introduce an in-depth reform to better control lobbyists'actions in the backrooms of Parliament, we are forced to notice that the same old manoeuvring is still taking place.

The people's cynicism for politicians is the fruit of misappropriations similar to the Pearson saga. Let us not forget that Quebec and Canadian taxpayers pay for lobbying expenses and political party contributions through corporate tax deductions. When patronage occurs, they pay again for the cost overruns of lucrative contracts, or the sale of public property to friends of the government at bargain prices. Taxpayers have every right to say enough is enough.

And yet, there are solutions such as those proposed by the Bloc Quebecois to put an end to this cover-up. They go from the public financing of political parties to a stricter control of lobbying activities and the adoption of a code of conduct for elected representatives and high officials. By amending Bill C-22 and by calling for a royal commission of inquiry, as requested by the Bloc Quebecois, the Liberal government could show that transparency is more than wishful thinking, more than an abstract idea.

Georges Burdeau said: "The overriding concern of a democracy is to ensure that the power that the people hold is not corrupted by the demands of the masses. What is important is to ensure that freedom is not subjugated by passions, by factional tyranny or by special interest groups".

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question!

[The Deputy Speaker]

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

I am told I am not supposed to call it a tie so I will say that the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Pursuant to Standing Order 45(5)(a), the opposition whip has asked that a recorded division on the amendment stand deferred until tomorrow at 3 p.m., at which time the bells to call in the members will be sounded for not more than 15 minutes.

Canada Petroleum Resources Act

[Ron Irwin, Liberal, Minister of Indian Affairs and Northern Development]

moved that Bill C-25, an act to amend the Canada Petroleum Resources Act, be read the second time and referred to a committee.

Mr. Speaker, I rise to address the House on Bill C-25, an act to amend the Canada Petroleum Resources Act.

As parliamentarians we are required to absorb vast amounts of information. Pages and pages of documentation can accompany even the simplest request for a decision. It is remarkable that such a brief piece of legislation as Bill C-25 can be so important.

Bill C-25 proposes only a minor administrative change to the Canada Petroleum Resources Act in order to exempt the Norman Wells oil field which will now include additional lands. This change and, more important, the reasons behind it will have major ramifications for northern communities, for northern aboriginal people and for Canadians.

The amendment is important because it will allow production from the Norman Wells oil field in the central Mackenzie valley to continue under existing arrangements for as long as the field is commercially producible. This is now estimated to be at least to the year 2020, a full 12 years longer than originally anticipated.

Without this extension the community of Norman Wells will lose an important economic stimulus. Jobs will be lost both in Norman Wells and in other northern communities. Governments and taxpayers will also lose as millions of dollars of potential corporate and personal tax revenues, royalties and other income will disappear. In the process a vital resource will be needlessly and negligently left in the ground.

Extending the production agreement for Norman Wells, on the other hand, will rekindle investor interest in the Canadian north. As hon. members know, the economic well-being of both territories will very much benefit from healthy resource industries.

With the recent settlement of a number of aboriginal comprehensive land claims in the north, we are now in the process of opening lands to private enterprise. Establishing certainty of land and resource ownerships is one of the principle objectives of a comprehensive claims settlement.

From this standpoint, the extension of the Norman Wells project could not be more opportune. It will focus attention on the great resource potential of these northern areas at a time when lands are becoming available for exploration and development.

This in turn will result in additional drilling and service contracts for northern firms. There will also be new business opportunities for other service industries. The economic benefits of Norman Wells will continue and broaden. In order to put Bill C-25 into perspective I would like to briefly explain some of the history behind the Norman Wells development.

Although the Norman Wells field was discovered around the turn of the century, it was not significantly developed until the second world war when northern inland oil supplies became strategically important. In 1944 at the height of the war effort the Government of Canada entered into an agreement with Imperial Oil Limited to develop the Norman Wells field, the so-called proven area, set out in that agreement as based on the technology that was available at the time.

Today we know that a small proportion of the field extends beyond the current proven area boundaries. As well, the 1944 agreement had an expiry date of 2008, which was considered to be more than enough time to extract all the oil.

Based on new exploration and production technology, Imperial Oil now believes the field will be productive well beyond this date, an assessment backed by the National Energy Board.

Hon. members may be aware that the governor in council has the authority to extend the duration of the 1944 agreement with Imperial Oil and to expand the proven area. However, a minor amendment is required to the Canada Petroleum Resources Act to ensure that the act which specifically excludes the 1944 agreement refers to the 1994 agreement.

Bill C-25 accomplishes this with an amendment that is inconsequential to the application of the act in any other region of Canada.

Proclamation of this legislation will have an immediate and very positive economic impact in the north and other parts of Canada. Bill C-25 will pave the way for a $30 million drilling program that will be undertaken by Imperial Oil this year, assuming Parliament acts quickly enough to allow the company to take advantage of a short window of opportunity this summer for drilling work in the north.

This drilling program will be undertaken mostly in the expanded proven area. About one-third of the money, $10 million, will be spent directly in the north. Most of the remaining $20 million will be spent in Alberta.

As a result of the drilling program and the extension of the field's producing life, short term employment in the Norman Wells area will increase and long term employment will be stabilized.

This government is committed to working with Imperial Oil, other companies, the community of Norman Wells and the Sahtu Dene and Metis to ensure that local people benefit from the employment. At least one-third of the on site jobs generated by the drilling program will be guaranteed to local residents. Indirect employment is estimated at an additional 25 person years in the north.

Aboriginal people in particular stand to benefit from this extension. Under their land claim agreements the Gwich'in, the Sahtu Dene and Metis are entitled to a share of the royalties from Norman Wells. The extension will give them a guaranteed revenue flow beyond 2008 and perhaps to the year 2020.

As well, Shehtah Drilling which is jointly owned by the Dene Metis and Imperial Oil holds a $6 million drilling contract that is conditional on this project moving forward.

The Government of Canada's financial position will also benefit from the continued production of oil from Norman Wells. In addition to receiving millions in additional royalty payments from Imperial Oil, I remind hon. members that Canada is a one-third owner in Norman Wells development. The extension of production is expected to bring the government millions of dollars in return on this investment. We will also increase revenues from federal, territorial and municipal corporate taxes and from personal income taxes.

Bill C-25 provides clear evidence of this government's commitment to economic renewal in all regions of Canada. The Norman Wells extension project will not only keep some Canadians working, it will contribute directly and indirectly to the creation of many new jobs both in the north and in Alberta.

This is a positive initiative that has the support of all the key players: aboriginal and non-aboriginal people in the Northwest Territories, the Canadian Association of Petroleum Producers, the petroleum industry and of course the Government of Canada. It deserves the support of this House so that the planned drilling program can proceed this year and the affected northern communities, families and workers can be assured of a stable economic future.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, the bill before us today is a piece of legislation which, in our opinion, must reconcile several aspects.

First, there is a concrete reality, namely the natural resource that oil is. But there is also the notion of environmental protection, as well as the close relation to Bill C-16, which was referred in second reading to the Standing Committee on Aboriginal Affairs.

The Bloc Quebecois looked at the issue in that whole context and will support Bill C-25. In fact, this bill is somewhat similar to previous pieces of legislation, including one tabled in 1944, and another one tabled in 1983, when amendments were made to the Canada Petroleum Resources Act, precisely to allow for the inclusion of provisions to the effect that this bill is not covered by the Canada Petroleum Resources Act.

I would like to go back to some historical details. I did that in the case of Bill C-16, but then I did not go over the whole historical aspect. I think it is important to put Norman Wells in its proper context. This was the first Northwest Territories community set up exclusively for the development of non-renewable resources. At the time, there was a lot of prospection in that area and it was discovered that the region was rich in oil, even almost at ground surface. Starting in 1918 and 1919, oil was discovered in commercial quantities.

Imperial Oil Limited and Canada jointly own these producing fields. Canada owns the equivalent of one third of these fields, while Imperial was always very active with about a two-thirds interest.

The Can-Oil patch was created during World War II to allow Norman Wells' light oil, which was then a strategic resource, to be shipped in large quantities to Alaska and to southern centres. Roads were already being built so that this very high-quality oil could be transported to the South. Norman Wells is also the northern end of the oil pipeline which goes from the Northwest Territories to Zama, in Alberta.

I think it is really important to put things in context to see why Norman Wells was always at the heart of oil exploration. What is also important, as I said earlier, is that we just looked at the issue of land claims by the Dene and the Metis. We just told these people that they would be allowed to occupy a certain territory, over which there are major oil sites.

I think that we cannot disregard the link between the two bills. It would be dangerous to vote on Bill C-25 without taking into consideration Bill C-16 which was before the House last week and which recognized the settlement agreement reached with the Dene and Metis. Under this agreement, the federal government has settled a land claim and retroceded, if you recall, over 230,000 square kilometres of land, 1,800 square kilometres of which include royalties for underground resources. I think it is important to link those two bills.

Ever since 1944, the government of Canada and Imperial Oil have had an agreement about these fields and the projected recovery we are talking about, because that is the real issue. Imperial has found a new way to market and develop petroleum resources. In fact, it has developed a water-injection system that extends the area it can work on.

Since the company can, with this new process, extend the territory it wants to develop, we are being asked here, in the House of Commons, to stretch the rules and use Bill C-25 to amend the Canada Petroleum Resources Act.

According to 1983 estimates, oil exploration was supposed to come to an end around the year 2008. Of course, this new technology is not environmentally unsound, since, and I will come back to this issue in a little while, even the National Energy Board has examined and approved it.

So, this new process could extend the development activities to the year 2020, which would mean millions and millions of dollars in benefits for Imperial, as well as for the government of Canada and the Dene and Metis living on this territory.

As I said, the National Energy Board has approved the company's project. That is very important because, of course, when an oil company wants to intensively exploit a field and take that exploitation further, very seldom will it come with a study where, on the environmental impact side, it will say: "This has terrible environmental impacts, but we want to exploit it anyway". So, it is important that we have an independent organization from Imperial that would come and say: "Indeed, your new way of doing things on the field exploitation side is interesting and, most of all, it has no impact on the environment." That environment issue is very important in the present context, not only for Canadians, but also for Canadian Metis and Dene, who are on those territories because they always had a very privileged relationship with the environment. We know that their culture was focused on hunting and fishing at the time, and it is still the case today.

And the project is a beneficial combination that allows Dene and Metis to develop the new resources, that is oil resources, by giving them, through Bill C-16, their say on the matter, and also protects their old culture which, incidently, they are very proud of.

The National Energy Board did an independent review that supported the Imperial study and that company decided to get into a drilling program worth about $30 million. That program will deal with 12 already drilled wells and others that will be drilled along the field limits. The new technologies will allow to exploit it without any cost to the environment.

I think that this Bill C-25 provides us with the good oilfield conservation and management methods.

I was saying earlier that all indicates that the project will go until 2020. I have myself contacted the Sahtu council this week. People say they agree. They were consulted. It is true that the Northwest Territories and the Canadian Association of Petroleum Producers were consulted. Everyone agrees. However, I feel-and so does the Bloc Quebecois-that it would be a shame for this House to adopt Bill-25 immediately and then tell the Sahtu Tribal Council who represents the Dene and Metis: "Now that we have decided on your behalf how the Norman Wells Development should be done, we are ready to settle your land claims."

We feel it is extremely important that Bill C-16, which is now before the Standing Committee on Aboriginal Affairs, be examined first. One way or another, Bill C-25 is also going to be referred to the Standing Committee on Aboriginal Affairs. We intend to see that Bill-16 is adopted before Bill-25.

If we make comparisons between the guarantees given by the James Bay Agreement, we find that the government is on the right track, as far as land claims are concerned. We talked a lot about that. I talked about that when Bill C-16 was introduced in the House. I talked about the James Bay Agreement which was passed as an act of the Quebec National Assembly and called the Cree-Naskapi of Quebec Act, and the federal government did that too.

It is a bit for the same reasons that we thought important to hold this debate and tell you that we agree with that bill. It will be very important for Bill C-16 to be passed by the standing committee and to come back to this House before Bill C-25 is passed.

For all those reasons, I am pleased to announce that the Bloc Quebecois will support Bill C-25 provided that Bill C-16 is adopted.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, I am pleased to speak on the bill before us today. Some consider Bill C-25 a minor amendment to the Canadian Petroleum Resources Act, but I would like to think it can be viewed as an important message to industry.

Thousands of jobs in my riding are directly or indirectly dependent on the current boom in the petroleum sector. But if industry's confidence in government intentions were to be eroded many of those jobs could be lost.

Although this amendment only directly affects one oil company and community, I hope it is an indication this government realizes the importance of providing our resource based industries with predictability and stability in the policy environment. If this government starts sending signals to the private sector that it is safe to make long term investment plans, it will lead to economic growth and the creation of far more permanent jobs than government can hope to achieve through any temporary make work projects.

There is a long history leading up to this current amendment. The first oil well was drilled at Norman Wells in 1920. Since then it has grown to be the fourth largest producing field in the country. In 1944 Imperial Oil and Canada signed the Norman Wells proven area agreement which included just under 3,300 hectares within its boundaries. When the Canadian Petroleum Resources Act came into force the Norman Wells proven area was exempted from the new act. Just as the bill before us does

today, subsequent renewals and agreements have been similarly exempted.

This amendment does two things. It extends the timeframe past the current expiration date of 2008 which allows Imperial to plan for long term recovery. The amendment also changes the 1944 boundaries to incorporate the entire field. Changing the boundaries to exclude non-productive portions and include new fringe areas results in an addition of 350 hectares to the old proven area.

Canada and Imperial will not have to determine whether oil comes from pockets inside or outside the former boundaries. This will solve potential administrative problems for royalty and share calculations.

The government undertook numerous consultations when arriving at this agreement. Pursuant to the spirit and intent of the land claim agreement under negotiation with the Sahtu Dene and Metis during the same period, the government initiated discussions with them to ensure that the views of the long term stakeholders would be taken into consideration when contemplating any prospective changes to the proven area agreement.

Most other people living in Norman Wells are in some way directly dependent on the oil and gas extractive industries. Many will leave once oil production ceases, however the vast majority of the Sahtu peoples will remain.

The Sahtu agreed to this amendment at the end of March. It became apparent that Imperial's planned investment of $30 million for this fiscal year might be jeopardized if concurrence from the Sahtu was not forthcoming. Although it is probably not binding, the Sahtu made their acceptance contingent upon the enactment of Bill C-16, the Sahtu Dene and Metis Land Claims Settlement Act.

I am not generally a cynic, but I cannot help wondering about the timing of these two respective bills in the House. What would happen if Bill C-16 were held up indefinitely or even defeated? Would the government also have to repeal this bill?

I fully appreciate that this represents a significant opportunity for the Sahtu peoples to apply some indirect pressure on the government to proclaim an agreement they have anticipated for decades. But is it responsible of the government to enter into verbal agreements of this nature linking any two pieces of legislation?

The government also consulted with the Canadian Association of Petroleum Producers to seek its views on the principles of the amendment. The government assured CAPP this agreement would not set a precedent for the issuance of rights anywhere else in Canada.

Again the government gave assurances it cannot guarantee, this time promising this agreement would not be linked to decisions in the future. As we all know it is the job of lawyers to find precedents they can use to the advantage of their clients. Governments have also been known to fall. How can this government give a guarantee to other petroleum producers that this agreement does not set a precedent down the road?

Over the past decades the resource based industries have struggled against global recession, depressed prices, unpredictable policy and investment climates and increasing taxation from all levels of government.

Although the Ministry of Natural Resources has just released a report stating that Canada falls somewhere in the middle of the international competitive range with respect to taxation rates in mining, that is not the perception of the industry. The mining industry looks at the high marginal tax rates. Those have driven Canadian exploration and investment dollars overseas to South America. This government has the opportunity to reverse that trend by developing policies to encourage domestic investment.

In the petroleum sector depressed oil prices have resulted in massive layoffs and extensive restructuring of the industry. In the last couple of years we have seen a surge in natural gas prices leading to the current boom, but oil prices remain low and the future uncertain.

The cost overruns at Hibernia would not have been debated so strenuously if oil prices were stable at $50 U.S. a barrel, but they are not. Oil prices have just barely hit $17 on the heels of a five year low, dipping below $14.

In this erratic global market, oil companies must make significant investment decisions based on many factors, not just the price of oil. Confidence in government policy is a critical component in those decisions.

This amendment in giving force to the Norman Wells amending agreement signed in April provides Imperial Oil with the security of tenure it needs for long term planning. It has been assured there is time to realize a return on major investments in new technology. These investments are essential to maximizing production from this field.

This amendment is good for Imperial because it provides a stable planning environment. It is good for the Sahtu Dene and other local residents because they can rely on employment opportunities and a cash infusion into the local economy for

several more years. It is good for the Canadian people because it will generate additional oil revenues and royalties.

I hope this amendment means that the government now recognizes it cannot cripple our natural resource industries through unfair taxation or short-sighted policy initiatives.

Canada is very dependent on revenues generated by the petroleum sector. The imposition of additional taxes such as the rumoured carbon tax could dramatically curtail growth in this sector, throwing many thousands of people out of work. There must be a balance between environmental concerns and jobs for young Canadians.

According to the Ministry of Natural Resources, Canada is expected to remain a net oil exporter until 2008. Within 25 years we will still export 75 per cent of our heavy oil production but we will import almost twice as much light oil. To offset these effects government must encourage domestic exploration for more reserves.

The decline in northern exploration has been so dramatic that even the National Energy Board was scheduled to permanently close its office in Yellowknife in March.

To date, aside from Bent Horn in the eastern Arctic offshore, no new major oil or gas prospects have been found in the Northwest Territories, indicating there are not enough reserves to warrant field development or pipeline construction.

With exploration levels falling off, industry must invest in technology to improve recovery from known reserves.

Since 1981 new technology has increased the yield from the Norman Wells field from 17 per cent to 40 per cent. This is attributable to horizontal drilling, water injection and other improvements in recovery techniques.

More recently, in February approval was granted for a propane injection pilot project in the proven area. It will assess the technical merits of a propane miscible flood for achieving increased levels of recovery over a three year period. At the end of that time Imperial should have a pretty good idea how much more oil is recoverable from the field.

As of December 1992 a little over half of the recoverable reserves remained in the ground, approximately 125 million barrels, but this may improve substantially if the propane injection proves feasible. It could ensure that the field produces far more oil than previously thought possible thus ensuring stability in the regional economy for another 20 to 25 years.

Major investment in this technology is practical in light of the security that this amendment offers.

In summary, I would like to voice my support for this bill because it provides predictability for Imperial's planning horizon and is profitable for the regional economy. It will give Imperial the confidence and security of tenure necessary for it to invest in new technology to maximize recovery from this field. This amendment will also provide economic stability and long term employment opportunities in the Norman Wells region.

Finally, it is my hope that the royalties and revenues which accrue to Canada from maximizing the productive capacity of this field will contribute to the reduction of our national deficit.

[John Loney, Liberal, Edmonton North, AB]

Mr. Speaker, I rise to address the House on Bill C-25, an act to amend the Canada Petroleum Resources Act.

I want to join my colleague, the Minister of Indian Affairs and Northern Development, in urging hon. members to support this minor administrative change to the act.

Bill C-25 will permit extending the duration of production from Norman Wells oil field probably to the year 2020 thereby continuing an important source of income from which northern families have benefited for the past five decades. This will provide a tremendous boost to the local economy. The economic activity and new investments associated with Norman Wells will possibly provide an additional 90 jobs in the north.

I would also point out to hon. members that the Norman Wells project is directly responsible for creating jobs elsewhere in Canada. For instance about 70 jobs have been created in Alberta.

It is no exaggeration to say that the community of Norman Wells depends on its oil industry. For many Canadians the words Norman Wells are inextricably linked with oil. Take away the right to produce every available drop of oil and you take away the right of economic well-being from this community.

However, by agreeing to extend the field's production life we will accomplish just the opposite. We will be making a decision that will lead to additional and longer term employment, ensuring the survival of Norman Wells for the next 25 years.

Bill C-25 will help create continued prosperity to the community which is already the transportation hub for the region and is fast becoming a regional centre for government services and tourism. Norman Wells has a promising future but a future that needs a healthy northern petroleum industry.

I would like to briefly outline for hon. members just how important the Norman Wells project is to the economy of the Northwest Territories.

In 1993 expenditures in Norman Wells production activities totalled $36 million, about half of which was spent in the north and all of which was spent in Canada. The oil field provides

some $3.7 million in wages to northern workers each year. More than 30 companies in Norman Wells and over 20 companies in other northern communities owe at least part of their annual business to the project.

By revising the proven area agreement of 1994 the government will extend the life of the field by 12 years or more and ensure that these annual expenditures continue well into the next century.

Hon. members can appreciate that Imperial Oil's plan to undertake a $30 million drilling program is extremely good news for northern businesses and communities. Northern businesses will supply about 37 per cent of the goods and services used in the drilling program. They will also benefit from the opportunity to learn up to date horizontal drilling techniques. This capability will enhance future business and employment opportunities for northern firms not only in the Territories but also in northern Alberta and British Columbia where there is currently a shortage of such expertise.

As the minister has already stated, some $20 million of the proposed $30 million drilling program will be spent in the south, mostly in Alberta. Even without the drilling program Norman Wells is responsible for annual wages of $2.8 million in the south.

Looking at this issue from a different perspective, it is clear that Canada cannot afford to abandon a project such as Norman Wells until the field has produced to its fullest potential. This, too, would be an irresponsible course of action. We have significant oil reserves in this country but that is no excuse to be wasteful.

Norman Wells is currently the fourth largest producing field in Canada. It yields about 33,000 barrels of oil a day and generated more than $50 million in revenues to the government in 1992. The Norman Wells field has made an important contribution to Canada's energy supply over the past 40 years. With this amendment it can continue to play an important role for at least the next 25 years.

In 1994 the agreement was thought to capture the entire field and the anticipated termination of the agreement in 2008 was believed to be the full productive life of the field. Today, however, information gathered from prolonged production and advance technology demonstrates that the extent of the field should be redefined and expanded and the expiration date should be extended to capture the full productive capability of the field.

The National Energy Board has conducted an independent review of Imperial's assessments and has corroborated the conclusion that the oil field extends beyond the 1944 boundaries as well as the corporation's projections on the remaining production life beyond 2002.

The National Energy Board's technical assessment supported Imperial's view that effective reservoir management is best accomplished by expanding the existing proven area to include the fringe areas.

The current practice under the Canada Petroleum Resources Act to issue production rights involves a competitive bidding process, but the fringe areas of the field lying outside the proven area agreement are unlikely to be developed if removed from the context of the entire field. There is a risk, therefore, that if the current policy is adhered to sound management of the field would be compromised since the outlying reserves would be left in the ground and maximum recovery of the field would never be achieved.

The proposal to extend the agreement to ensure that full commercial production of the reserves is achieved is consistent with all the federal and provincial oil and gas legislation.

Given the special circumstances, the proposal to expand and extend the Norman Wells proven area agreement has been supported by the Canadian Association of Petroleum Producers. The proposed Norman Wells amending agreement of 1944 has two components.

First, it marginally adjusts the boundaries of the proven area to capture the fringe areas so that the field is developed as a single entity and, second, it extends the term for as long as there is commercial production.

Production from this field is governed under the Norman Wells proven area agreement and therefore this unique agreement has always been excluded from the Canada Petroleum Resources Act. For this reason revisions to the agreement must also be referenced in the act.

Hon. members should be aware that the proposed changes to the proven area agreement have been reviewed according to the government's environmental assessment process for policy and program proposals. No significant environmental impacts were identified. Nevertheless further reviews will be carried out prior to the approval of the drilling program.

Following a period of restructuring and downsizing, Canada's oil patch is showing signs of a strong and sustained recovery. Exploration and drilling activity has increased significantly. Investor interest is also up. Last year, approximately $6 billion was invested in the Canadian petroleum industry.

In this time of resurgence, Bill C-25 will draw attention to the vast resources and the new opportunities for opening up in the north. Junior oil firms may find the north particularly appealing since these smaller firms can often develop projects that would not be profitable for the more major firms.

With the ongoing development of northern land claims, the affected aboriginal people have indicated a strong desire to participate in resource development projects. The territorial governments also welcome new resource development activity

because of the employment, tax revenues and new business opportunities generated.

With the right signal from Ottawa, northern Canada could become the focus of significant investor attention, exploration and development activity over the next two or three years. This House can send that signal by giving prompt approval to Bill C-25.

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, on behalf of the New Democratic Party caucus and as natural resources critic for the New Democratic Party in this House, I am pleased to participate in the debate regarding Bill C-25.

Our party throughout the last number of years has taken a very active interest in the natural resources sector in Canada. In Saskatchewan we have been involved at least in terms of the provincial government in encouraging oil companies to pursue enhanced oil recovery techniques.

I am happy to say that in Saskatchewan we have seen Morgan Hydrocarbons, Sceptre Resources, North Canadian Oils and a number of other companies pioneer the technology of horizontal well drilling. It has been very successful.

Before I get into that, I want to say that on behalf of our caucus I give our commitment that on condition we will support this bill. We believe the bill is important in terms of economic activity in the north. We believe it is extremely important with respect to creating jobs in the north and other parts of the country.

We particularly support the aspect where the country receives one-third of the profits from this project. One of the conditions in terms of our support is that the agreement continues to give Canadians one-third of the profits from this project in its expanded mode.

The reason I say that is with enhanced oil recovery and particularly horizontal oil well drilling, that increases production of wells in the Saskatchewan experience up to 500 and 600 per cent. That means when the production increases so dramatically, it shortens the life of the resource in the ground in terms of how long one can do this.

The other reason I am concerned about this bill, and I will be asking these questions in committee, is this. We in the House are not quite sure whether there will be any reduction in royalties as a result of the increased production that horizontal oil well drilling will provide.

If we continue to get our 5 per cent royalty and we continue to receive one-third of the profits and the spinoff from the expenditures by Imperial Oil with respect to jobs, that will be suitable in terms of our requirements with respect to supporting the bill.

We are very pleased to hear that the bill will only be passed on the condition that there is some commitment to provide the Sahtu nation with the bill it is interested in seeing put through the House of Commons as well.

As a member of the House and as a Canadian I am concerned that we monitor the impact on the environment as this project proceeds, in particular with horizontal oil well drilling. We have found in Saskatchewan's experience that the EOR which takes place is not dramatically problematic for the environment, but there are some concerns in very environmentally fragile areas. I would hope the government would certainly ensure the monitoring process involve the government when these things are watched from time to time.

I am not sure whether the other questions I have are for the House or for the committee. The New Democrats will be monitoring the length of time Imperial Oil will recapture its capital costs. We believe there is an opportunity because of the longevity of the resource project for the oil company to recapture its capital costs over a more moderate period of time as opposed to an accelerated period of time.

Imperial Oil is telling the government that the resource is very solid, that there is a lot of it in the ground, and that it is a long term project. I have every reason to believe that to be the case. I think as an assurance our government should say if that is the case it will allow it to write off its capital cost allowance and other capital costs over a moderate period of time as opposed to a very short period of time. This would be a responsible approach to the project. The other upside to doing so is that when it is done Canadians can share, as can the Sahtu, in the profits those wells will provide over the short term.

I thank members of the House for allowing me to raise our questions on the matter. In summary, we will support the bill as long as the concerns we have raised are addressed in a reasonable fashion.

(Motion agreed to, bill read the second time and referred to a committee.)

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I wish to seek unanimous consent of the House to suspend the sitting until 6.30 p.m. or to the call of the Chair, if we have agreement of members on both sides for the adjournment debate. We could approach the Chair informally to reconvene earlier than 6.30 p.m. but in any case no later than 6.30 p.m.