Debates of Sept. 29th, 1995

Mining Exploration

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, it is a pleasure to follow the parliamentary secretary. Obviously there is no time for a major intercession.

I find it interesting that one of the other initiatives of the federal government in response to how to keep mining off the rocks was that the standing committee made about 20 recommendations last year that an all-party committee agreed would help to spur on the mining industry within Canada, and the government chose to ignore every single one. They were good words, but I do not think there is a lot of proof in the pudding.

We are here to address the motion of the hon. member for Abitibi:

That, in the opinion of the House, the government should consider revitalizing investment in exploration in Canada and in Quebec by providing for fiscal incentives, including flow through shares.

In my capacity as the party critic for natural resources, it is a privilege to speak to this issue.

Flow through shares are one way to subsidize industry. They cost the taxpayers hundreds of millions of dollars a few years ago, with only a very few positive results.

We in the Reform Party have called for a reduction in government subsidies to business. We feel that if it is in the market's interest to explore for more oil, gas, diamonds, coal, or whatever it is, the market will marshal the funds necessary to go ahead and do the exploration.

What is the role of the federal government in this regard? Does it have a role? I believe it does. It remains for the federal government to provide a regulatory regime for industry that clears the way for industry to go ahead with sustainable development.

I will clarify what I mean by sustainable development. Development means we want to develop our natural resources. It does not mean preservation; it means sustainable development. Development is a key word. Canadians depend on natural resources for a huge proportion of our jobs, our income, and our standard of living. Sustainable means we want to continue to develop them for decades to come, and in order to do that we have to deal very carefully with our environment. This requires a balance between the two.

A Price Waterhouse study released yesterday dealing with British Columbia's forest practices code illustrates how this balance is faring in Canada. Enforcing the new code will cost the economy 46,000 jobs in British Columbia. This shows that Canada is losing its balance when it comes to sustainability versus development.

In our concern for sustainability, I believe we are bordering on hysteria and catering to preservationists instead of people concerned with sustainable development. We are stifling development

in our country. This is not the intention of the concept of sustainable development.

I met yesterday with representatives of the mining association and listened to the problems they are encountering in their industry. I will give the House one example. They told me that mining companies are warned before any exploration takes place that federal environmental regulators will take a minimum of three years to approve their application for a mine. Instead of getting one permit for one mine, a company must go to every federal and provincial department, official, and bureaucrat in North America to get separate permits to develop what should be a straightforward process. This all takes a minimum of three years. In other countries the same process takes half that time.

Is it any wonder that the mining companies I am familiar with, especially in the British Columbia area, have put so many of their resources into Chile and other countries where they have friendlier and more receptive governments?

The old way of doing business was to assist companies by subsidizing them. Subsidies insulated companies from the market. In the case of flow through shares, in some cases they caused exploration to take place where that was costly, unnecessary, and unproductive. This is what the Department of Finance said in its report on the subject in October 1994.

The new way of doing business is to encourage development in an environmentally sustainable way. That requires balance between our concern for the environment on the one hand and our desire and necessity to explore and develop our resources for the benefit of all Canadians.

If sectors of the industry are suffering in Canada, it is not the fault of the federal government for not subsidizing it. The fault lies in a regulatory regime, at least partially, that needs streamlining and co-ordination between different federal and provincial jurisdictions.

The second thing we need, and I do not want to elaborate on this too much, is a tax regime in Canada that is competitive with other nations. We also need, and this is very important, to resolve our disagreements over land use and tenure. We need to resolve that with our aboriginal people so we can move forward and establish stable environmental standards, land use standards, and a tax regime that is predictable so that mining companies feel comfortable and confident of investing in our Canadian future.

How many times have we heard industry say that if you just get off my back as far as taxes go, get out of my hair as far as regulations and unnecessary duplication go, I will create jobs and opportunities in this country that will make your head spin. We hear that time and again. They do not need or want a subsidy.

I am surprised and I might almost say astonished that this particular motion would come from the member for Abitibi. Let me paraphrase what he says. He says he wants the federal government to pour money into subsidies for industry in Canada and in Quebec. I am surprised, because the member for Abitibi is a member of the Bloc Quebecois, which as we all know is a political party with only one purpose, and that is to destroy Canada as we know it by taking Quebec out of Confederation. It is even more astonishing since natural resources, by our own Constitution, is and should be in the purview of the provincial government. Not only that, but in the middle of his own campaign to destroy the federal government, the member stands up in the House and asks that the federal government subsidize more industry in Quebec.

I hope the member understands that people from my riding are frustrated by this kind of behaviour. This is a good illustration of Quebec's separatist movement, which lives in a world of illusion, a fairy tale where one wants to enjoy the best of both worlds.

The separatists have always been of two minds on the subject of independence. It reminds me of someone who wants to have his own place, his own car, his own life, but he wants his parents to pay for it.

With a motion like the member has put forward, I wonder if the member is really a sovereignist at heart at all. If he really believed in independence he would be asking the federal government to get out of Quebec, not subsidize the industry there. Perhaps the member secretly depends on the family and he does not really want out of it; he just wants his own apartment.

I believe that most Quebecers take a more mature view of life and of our country. They recognize that the Canadian house is big enough for the entire Canadian family to live together in happiness and prosperity.

The Reform Party agrees with the member for Abitibi in calling for change. Change is necessary; we all recognize that. However, we are calling for a new Canada, not a separate nation of Quebec. We are calling for a new Canada, a Canada built on equality but a Canada with a smaller federal government role, not a larger one, where all regions can be satisfied with a less oppressive federal fiscal framework.

I reiterate to the House and my constituents that I am anxious that Quebec remain an equal partner within Canada.

Last spring I went down to Montreal. I caught one of the last games played in the old Montreal Forum. As we were wandering around in the old part of Montreal before the game and we were talking to people, they were very friendly. A couple of times people came up to me on the corner-I guess I obviously was looking for something at the time-and offered to help us out and give us directions and so on. I was very impressed. I thought that was a typically Canadian thing to do. If you see somebody in trouble you

want to help out. In my travels and in talking to many people I have found that Canadians are basically the same everywhere.

The more I talk to francophones the more I realize they have the same goals and aspirations as people elsewhere in Canada. They want good jobs with good incomes, safe streets, a fair taxation system. They want less government bureaucracy in their lives. They want much the same things as people everywhere else. We share common values and interests. The language we speak is really of secondary importance to those major things.

Language is a code. We can speak English or French. We can use Morse code or a computer language. We can do what we like in that area. It is just a method of communication. What is important is what we are communicating, the content of our communication, the core values we have regardless of the language we use.

I believe that as Canadians we want to continue to communicate with one another. Quebecers have given their time and energy to building homes, industries, towns and cities that are among the best on the entire planet. During the world wars and in our peacekeeping duties they have spilled their own blood to carry Canadian values around the world. They see that Canada is the best place in the world in which to live. I am confident they are going to vote no on October 30.

In closing, we do not support any motions that call for more subsidies. That is the old market distorting way of doing business. We would welcome a motion from the Bloc calling for a better balance between sustainability and development in Canada. That is supportable everywhere. Most of all, regardless of where we are in Canada, we invite Quebecers, including Bloc members, to join hands with Canadians, whether we are English Canadians, Japanese, Italian or of whatever descent to build a new and united Canada together.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, the Reform member had a lot to say about the Bloc, but I just want to make a quick comment. He said that Quebecers are polite and that is true. We are extremely nice and polite and we know that.

However, I do not agree with the member when he says that language is a secondary issue. Language is a reflection of one's culture on the North American continent, and it is certainly not a secondary issue for Quebecers.

I cannot help but wonder: If language is a secondary issue for the member, that means he attaches little importance to us; consequently, why does he want us to remain part of Canada? The only true reason I can find is of an economic nature. This is why we are important to western and atlantic provinces, and why they want us to remain part of Canada. I just figured out why they do not want us to become sovereign.

There is no doubt in my mind that natural resources are, for a future country like Quebec but also Canada, a very important economic tool.

A country that has no natural resources or that does not pay proper attention to their development will, sooner or later, experience serious problems in the context of global competition.

Of course, its economy will be seriously affected, but one must remember that a country's natural resources are an asset for the whole community, not only for some individuals or large corporations.

Natural resources in both Quebec and in Canada belong to their respective communities. If they are developed for the well-being of the people, they are central to development.

Not only do they create jobs, but they also greatly contribute to economic growth.

When our raw materials are transformed here into finished products, they create a very important collective wealth. One must never forget that a job created in the natural resource sector has a multiplying effect on the whole economy, as long as we are not only raw material suppliers, as we have been too often in forestry. We ship wood from the Matapedia area to Montreal and Toronto, then finished wood products are shipped back to us.

In the mining sector, the discovery of minable deposits, or exploration, is at the very beginning of this potential chain. But for that chain to be started, we should, as my colleague for Abitibi suggested, consider revitalizing investment in exploration in Canada, notably by providing for fiscal incentives, including flow-through shares. Quebec is a good example.

To generate every possible benefit, natural resources development planning must be consistent and, surely, ongoing. It would be wrong to think that we can leave this to the private sector alone, as some trends of thought would have it. It is necessary for governments, through their tax system, and flow-through shares among other incentives, to foster investment in exploration. In Canada, over the past few decades, we have seen a clear decline in the exploration and the processing of our natural resources, particularly in mining. We are now making a fresh start. All the better.

Several issues are at the root of the problems facing Quebec and all of Canada in this major sector of our economy. First and not the least is the constant fluctuation of the global markets, which is indeed a very sensitive issue. Sudden fluctuations of the world economy have greatly affected the development of our natural resources. When the prices of natural resources go up and down

like in a roller coaster, massive investment in that industry does not seem very attractive.

The other problem has to do, of course, with the general economic slowdown. When the demand is decreasing, exploration and transformation also slow down. Another important element is the inefficiency of exploration incentives. The current tax system is not in sync with the real objectives. We must change it, for example by providing flow-through shares.

Most of the stakeholders in the mining industry we have met during the hearings of the Standing Committee on Natural Resources agree that the current measures are not very efficient. Also, they do not meet their goal, which is to promote exploration and discovery of new deposits.

Some stakeholders think that the current measures only reward the big corporations, who can unfortunately deduct part of their operating costs from their income tax. The inefficiency of current tax measures is only increased by all the red tape due to the federal government infringing upon an exclusively provincial area of jurisdiction, as enshrined in the constitution.

Because of the lack of program co-ordination in this field as in many others, developers as well as producers waste a lot of time and energy. Having to go constantly from one level of government to the other to get authorizations, to ensure compliance with existing policies or to adjust to the different tax standards of each government, to try to understand and, especially, to make people understand is far from productive for businesses. This waste of time is reflected in substantial losses.

In the Bloc Quebecois, we wish that once and for all the federal government would fully recognize the jurisdiction of Quebec and the other provinces over natural resources. We want Ottawa to give the provinces control over natural resources and to truly encourage investment in exploration through tax incentives such as the flow-through shares, for example, in co-operation with the provinces.

I do not understand the federal government's attitude. Why is it trying so hard to take over resource management from Quebec and the other provinces? Why is it always sticking its nose in areas where it has no business? Why is it not working with the provinces instead of competing with them, and, moreover, using our money, our tax dollars to do so?

Why is it not adjusting the federal tax system in co-operation with the provinces to make it more responsive to the real needs of the industry? This is what we want to know. Is it because, as certain federalist big guns have said, those of us from Quebec and the provinces are incapable of doing the work or simply of delivering?

On the contrary, we, Quebecers, are perfectly capable of managing our own natural resources. Our social and political institutions have a long democratic tradition. Our people are well educated, and we can count on a multitude of workers capable of doing all the jobs in natural resource exploration and processing.

We have very abundant natural resources. Over the years, Quebec has acquired the ability to act as it sees fit in organizing development, and its tax system strongly supports its industry.

With the help of adjusted fiscal programs and so-called flow-through shares, Quebec has been able to further diversify its economy in areas such as culture, research and processing.

Quebec has changed over the last thirty years, and we can no longer tolerate that our natural resources be practically given away, as was unfortunately the case in the past.

Through our tax system, we have encouraged Quebecers to invest in their own province. The experience of the development of Northern Quebec has left indelible marks. Hopefully, we will never again see foreign industries shuut down towns and villages, and abandon entire regions. As Quebecers, our success in the area of natural resources certainly no longer depends on foreign investors or on federalism.

On the contrary, our success is the result of our imagination, our initiative, our actions, our creativity, our decisions, our efforts and the desire of Quebecers to play an active role in their own economy.

The tax measures introduced by successive Quebec governments have played a very important role, and all of Canada readily recognizes it.

Moreover, these tax measures and our own successes have helped to reduce our dependency toward foreign investors. While in the rest of Canada, the federal government begged foreign investors to develop natural resources, we, in Quebec, took control of our destiny. At present, the French-speaking Quebecers control more than half of the industrial and commercial corporations in Quebec. This is remarkable. This is almost twice as much as 30 years ago. In Canada, we see the opposite happening.

During these 30 years, a growing number of Canadian owned companies have fallen into foreign investors hands. Any country that lets foreigners extract its natural resources is no longer a master in its own house.

Finally, I know very well that all these requests I just made will not amount to much. Even if it would have us believe otherwise the present government is very centralizing.

We of the Bloc Quebecois want our neighbour, Canada, to remain very strong, especially in the mining area, since it will be one of our economic partners after October 30.

[The Deputy Speaker]

Dear colleagues, since no other member wants to speak and since the motion has not been declared a votable item, the hour provided for the consideration of Private Members' Business has now expired.

The House stands adjourned until Monday at 11 a.m. I hope everyone has a good weekend.

(The House adjourned at 2.14 p.m.)