Madam Speaker, first of all, I will admit that after listening closely to the two previous speeches by our colleagues from the other two parties and despite our friendship for our colleague from Regina-Lumsden who introduced this bill, we unfortunately cannot support Bill C-220 for the various reasons I will explain during my presentation.
Again, the purpose of this bill is to establish an energy price commission to regulate the wholesale and retail price of gasoline. In our opinion and that of the government party-and according to my own observations-this bill would give the government the authority to meddle in a flagrant and unjustified manner in the normal process of free market pricing, which goes against the global trend of market pricing of gasoline in this case.
On the one hand, history shows that setting a ceiling price on gasoline can be dangerous and even create some serious shortages since oil companies tend to sell less when prices are low-and this is normal-while demand increases. They thus stockpile their products. These shortages can lead to quota problems, waiting lines and corruption, as we saw in some countries in South America and Asia.
On the other hand, the setting of a ceiling price by the commission could also result in an economic slowdown for oil producers in western Canada.
An example of an unsuccessful attempt to control gas prices is the national energy policy-as many members on the other side will recall-initiated by former Prime Minister Trudeau during the oil crisis, which, as you may recall, caused widespread discontent at the time.
In fact, every time the federal government interferes in the oil or energy sector, as in the case of the Varennes tokamak, Quebec loses out. If an energy price commission is established, as my colleague proposes by introducing Bill C-220, it should review not only gas prices but also the injustices done to Quebec through past federal interventions. This commission could perhaps recommend that the House give Quebec a generous compensation like that given to the maritimes for harmonizing the GST.
We would then try to set the amount of this compensation. An example of the injustices that could be reviewed by this commission is the impact of the famous Borden line imposed by the federal government in the 1960s. Members will remember that the Borden line energy policy systematically blocked the development of Montreal's oil production from Venezuelan and Middle Eastern imports by completely closing the market of those provinces located west of the line, to protect western oil development.
However, the policy was abolished when world prices started to rise quickly between 1973 and 1977. This resulted in the oil production from Sarnia and the prairies flooding the eastern Canadian market, in the closure of most Montreal refineries and in the loss of thousands of jobs. In addition to refineries disappearing because of this totally unjust policy towards Quebec, our whole petrochemical industry was also severely affected.
To this day, Quebec, and particularly the Montreal region, still suffers from the consequences of this policy implemented by the federal government of the day. Unlike the maritimes now, for the GST, Quebec was never compensated for its heavy losses. If the commission that the hon. member hopes to establish with Bill C-220 does become reality some day, perhaps it ought to take a look at the issue of compensation for Quebec.
The commission could also look at the development of the Athabasca tar sands. It should definitely not limit its role to regulating gasoline prices, but should look at the current investments being made to produce gasoline in Canada. Perhaps it should also examine the famous Hibernia project, that cock-and-bull story which has cost taxpayers in Quebec and Canada astronomical amounts of money. This is another example of failed federal involvement in the energy sector, which has had serious consequences on the economy as a whole. This project was launched before the 1989 federal election. Now, the current government is trying to get out of it.
At election time, the government had decided to withdraw from that project. However, it has since absorbed 25 per cent of the production costs. The government allocated over $1 billion to that project, but that was not enough. In addition, the present government promised loan guarantees corresponding to 40 per cent of construction loans, up to $1.66 billion.
A promise was made to stop using the taxpayers' money for this scheme. But a promise was made to scrap the GST and that was not kept, a promise was made to cancel the helicopters and that was not kept, a promise was made to cancel the Pearson Airport contract
and that was not kept, a promise was made by the Clark government to put a limit on the price of gasoline-which led to their defeat-and that was not kept. However, the federal government was probably quoted out of context or forgot about that promise too, and continued to pour more money down that drain.
The energy price commission, which my hon. colleague would like to see established, would have a field day if we gave it a mandate to investigate this matter.
But getting back to Hibernia, Ottawa then spent $350 million buying back 25 per cent of Gulf's shares in the Hibernia project. In addition, Ottawa financed the shares acquired by Murphy. And to top it off, it gave deductions and tax credits to Murphy, Mobil and Chevron, oil companies raking in billions of dollars, to reduce their income taxes, poor things, and the government gave them interest free loans, guaranteeing them benefits in the event that they were unable to take advantage of these deductions and these credits.
Chevron and Mobil each took advantage of $40 million in interest free loans from the federal government. Thus, while the federal government was increasing the tax on the price of gasoline, it was squandering public funds at a terrible rate. The increase in the gasoline tax is being used, among other things, to offset the accumulated losses in the Hibernia project.
I very much doubt that federal intervention with respect to the price of gasoline can solve any problems and provide even the remotest additional guarantee of fairness. I also very much doubt whether the creation of this commission can give taxpayers in Quebec and Canada a degree of stability in gasoline prices. I do, however, recognize the good will of my colleague. But they say the past is an indication of the future, and I would far prefer that the federal government stay right out of areas that, in any event, do not concern it.
When the Hibernia project was first launched, the federal government's top advisers predicted that the price of a barrel of oil would reach $70. We, as taxpayers, have paid billions of dollars for their mistaken forecasts.
We Quebecers fervently hope that this government will not get involved or, if it does, that it will do so only with the consent of the provinces so that they can have a say in the appointment of commissioners as well as in the operation and mandate of the commission. All the money invested in Hibernia, the billions of dollars wasted, could have been spent on reducing the gasoline tax, thus giving taxpayers a much needed break.
While presenting his plan to harmonize-or rather to hide-the GST last Tuesday, the Minister of Finance said that the federal government had an obligation to help the poorest regions and provinces, that there should be a more equitable distribution of wealth. He should now put his money where his mouth is.
Instead of wasting vast sums of money on foolish projects like Hibernia, it would be better to reduce the gasoline tax. If they simply want to offer a fair compensation to the regions or the Atlantic provinces, it would be better to reduce the gasolinetax rate.
If this government wants a more equitable Canada, it should put its money where its mouth is by finding more legitimate uses for this money. It should see to it that these oil companies, which too often benefit from unjustified tax exemptions, pay their fair share of taxes.
Finally, this government should let the provinces take responsibility for their own areas of jurisdiction and let the market set the prices. In short, the federal government should mind its own business.