House of Commons Hansard #35 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was devco.

Topics

Saguenay—St. Lawrence Marine Park ActGovernment Orders

12:55 p.m.

Liberal

Guy St-Julien Liberal Abitibi, QC

Mr. Speaker, it gives me great pleasure to have the opportunity to rise in the House of Commons in support of a bill to establish a new marine park in Quebec within the marine area conservation network.

On behalf of all Canadians, I would like to thank the members of the House of Commons who are present today as well as those who were here before for their co-operation which will result in passage of this major piece of legislation.

Canada can be proud of its vast experience in the vital area of protection of its heritage resources. Canadians feel very strongly about preserving the quality of their natural environment, and this bill to establish the Saguenay—St. Lawrence marine park was drafted in response to their concerns.

The bill is aimed at improving, for conservation purposes and for the benefit of present and future generations, the level of protection given to the ecosystems found in the Saguenay River fjord and in the St. Lawrence estuary, while promoting their use for educational, recreational and scientific purposes.

This approach is in line with the government's position with regard to the protection of ecosystems and sustainable development.

As with the amendments to the Canadian Environmental Assessment Act, this bill shows the government's willingness to work for the conservation of marine natural resources through the development of legislative and policy measures that respond to global environmental concerns.

This bill is also tangible proof of the government's commitment to sustainable development. It is a positive contribution to the efforts made to protect Canada's biodiversity and to preserve the quality of our natural environment for the benefit of present and future generations.

The establishment of the Saguenay—St. Lawrence Marine Park is the result of many years of concerted efforts by the governments of Canada and Quebec, local and regional communities, environmental groups, aboriginal peoples and the scientific community in order to enhance the management and protection of the rich and diversified marine resources of this great region, and especially to protect the belugas in the St. Lawrence.

This bill provides for a complete legislative framework for the management of the federal government's responsibilities. Its purpose is to complete but not overlap the current federal legislation, including the Fisheries Act, the Canadian Environmental Protection Act, the Migratory Birds Convention Act, 1994, the Transportation of Dangerous Goods Act, the Navigable Waters Protection Act and the Canada Shipping Act.

On December 12, 1996, both governments tabled their respective bills. The federal bill died on the Order Paper when the last federal election was called. However, the Quebec National Assembly adopted Bill 86 on June 5, 1997. The provincial legislation will come into force when the federal legislation is promulgated. Now, it is incumbent upon us to honour our commitments and to create a great marine park in Quebec.

In closing, I take this opportunity to state that I strongly support this bill to establish the Saguenay—St. Lawrence Marine Park, which is a basic tool for the protection and enhancement of the most important marine natural resources of this country.

I wish to thank all members of the House, whether they belong to the Bloc Quebecois, the Liberal Party of Canada or the Conservative Party. I urge every member of the House to join me in supporting this bill.

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

The Acting Speaker (Mr. McClelland)

Questions and comments. Debate. Is the House ready for the question?

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

Some hon. members

Question.

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

The Acting Speaker (Mr. McClelland)

Is it the pleasure of the House to adopt the motion?

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

Some hon. members

Agreed.

(Motion agreed to)

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

Humber—St. Barbe—Baie Verte Newfoundland & Labrador

Liberal

Gerry Byrne LiberalParliamentary Secretary to Minister of Natural Resources

Mr. Speaker, I rise on a point of order. I ask the consent of the House with your permission to begin the private members' session, which I believe is slated for 1.30 p.m. Seeing no further business, I ask the consent of this House.

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

The Acting Speaker (Mr. McClelland)

The House has heard the motion. Does the House give its unanimous consent to see the clock as 1.30 p.m.?

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

Some hon. members

Agreed.

Saguenay—St. Lawrence Marine Park ActGovernment Orders

1 p.m.

The Acting Speaker (Mr. McClelland)

It being 1.30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Donkin MinePrivate Members' Business

1 p.m.

NDP

Michelle Dockrill NDP Bras D'Or, NS

moved:

That, in the opinion of this House, the government should take action to develop the Donkin Mine as a Crown Corporation.

Mr. Speaker, I rise today to thank you, the members of this House, for engaging in debate on my Motion No. 136, requesting that the Government of Canada take action to see the Donkin Mine in Cape Breton be developed under crown control, specifically, that Donkin be opened under the control of Devco, the Cape Breton Development Corporation. I ask this House to allow me to briefly give a bit of background regarding the history of coal mining in Canada.

Many members know that our country's thriving coal industry is a source of significant benefit to the national economy. Many industries are involved in the transport and use of coal and all those which supply services, labour and equipment to mining operations rely directly on the coal fields for a large part of their income.

All of these industries and the individuals who work for them contribute to Canada's tax base. Their wages come from coal and their wages fuel the economy.

A study by the Saskatchewan Energy Conservation and Development Authority demonstrates how Canada's coal industry generates over $5.8 billion annually, or nearly 1% of Canada's gross domestic product. Over 73,000 men and women are employed in the coal industry in Canada today. That is nearly 1% of Canada's total employment. The direct contributions of coal production to the GDP and employment are significant and when the ripple effects from all other sectors are included, the economic impact is multiplied.

For example, coal is the single largest commodity transported on Canada's railways and loaded at our ports. The Coal Association of Canada estimates that ever dollar spent in coal production generates $2.36 in related industry and from income respending. Every direct job created in coal production supports an additional 3.7 jobs in the rest of the economy.

The National Energy Board of Canada predicts that Canada will generate 46% more electricity in the year 2005 than in 1998 to meet the demand caused by an expanding population and an expanding economy. Furthermore, the forecast says that the amount of electricity generated from the coal will rise by 70% over current levels.

It is true that Canada has a number of options to meet its power needs in the next century. Some provinces are looking at energy conservation measures such as promoting the use of energy efficient street lighting in order to free up a pool of electricity that could be used by homes and industry. This will slow the demand for new energy generating facilities.

There is the potential for hydro development in Newfoundland, Quebec, British Columbia, Manitoba and Alberta, but the sites are in remote and environmentally sensitive locations, making them costly to develop and placing them in conflict with aboriginal communities which have claims to the land.

Plants that harness ocean tides such as the one opened on the Annapolis River in Nova Scotia in 1984, one of the first of its kind in North America, can also be looked to for inspiration when we consider how our country can meet its changing and expanding energy needs. But the fact remains that one of Canada's most abundant economic resources available for the production of electricity is coal.

Coal mining today is not the industry it used to be. Gone are the solitary miners working the coal face with pick and shovel. Gone are miners lamps from paraffin soaked rags ready to spark off explosions of the firedamp gas leaching from the stone walls around them. Today, mining is highly mechanized and heavily regulated. Canada can be proud of an industry with some of the world's safest mining conditions and progressive environmental management.

The picks and shovels have been replaced by automated systems that have dramatically improved the efficiency of mining. One machine now does what many men used to. Few people make these connections between the light switch in their bedroom, the electricity for their TV and the coal mines deep beneath the bottom of the Atlantic Ocean.

If and when people think of coal they think of soot, of miners with blackened faces, of harmful emissions that would damage our already fragile environment.

Let us face it, there is a serious question about the pollutants that are produced from burning coal. But just as today's miners work in conditions that would have amazed the men who worked underground in the last 200 years, so too has the way in which coal was burned being changed and improved.

Clean coal technologies can reduce emissions that would hurt the environment, especially the gases that dump acids into the ecosphere, sulphur and nitrogen oxides and carbon residues that have been linked to global warming. Technology cannot solve all of our problems, but it can certainly help. Let us not forget that we are building on a natural resource, naturally occurring coal, so that there is none of the environmental damage caused by processing or refining the product before it can be used.

Another sea change in the industry has been the huge reduction in the number of coal mines across Canada. In the 1930s there were 400 small coal mines. Today there are only eight companies operating a total of 29 mines. One of those eight producers is the crown corporation called Devco, the Cape Breton Development Corporation.

I can say with pride that Devco employs the best miners in the world. They are men who have mining in their blood who belong to families that have seen grandfathers and fathers and sons go underground just as my father and grandfather did. They are men who fought the vicious excesses of the private coal companies and who were trampled by the horses of the police and the army who acted as the private security guards for the coal company.

Not many people outside Cape Breton know that we have a unique holiday. On June 10 every year we remember Davis Day, the day when a miner was shot by company police after a peaceful demonstration. We have a long history of struggle, of fighting for fair wages and safe working conditions, and we will keep on fighting.

My preamble stresses the important role these men have played in Canada's history and the important role I hope they will continue to play in the future. Those Cape Breton miners are today looking to their crown corporation. They want to continue to do what Cape Bretoners do best, work hard and work honestly in the craft that has defined the economy of my island for centuries. They want to provide the power to run the computers, fax machines and office buildings that keep the new economy moving forward. They want to do their fair share.

Devco was founded in 1967 by an act of Parliament and is wholly owned by the government. All of its $325 million in assets are located on Cape Breton Island and Devco remains the largest producer of coal in eastern Canada.

With over 1,300 employees it is also one of the largest industrial employers in the region. At present, Devco operates two collieries, Phalen Mine and Prince Mine and all of the supporting infrastucture that enables Devco to take Cape Breton coal and sell it around the world.

In 1996-97 Devco sold 2.4 million tonnes of coal which yielded revenues of $167 million. It is apparent that Devco's contribution to the national coal industry is significant. Its contribution to the Cape Breton economy, which sees an extra $200 million a year thanks to Devco, is huge. Devco is one of the few large employers in industrial Cape Breton and jobs supported indirectly by the corporation's activities employ thousands more. When we look at the economic climate on my island it becomes pretty clear pretty quick that Devco's success and Cape Breton's success are one and the same.

Four hundred and fifty people work at the Prince Colliery, eight hundred at Phalen. Imagine the impact on industrial Cape Breton's already skyrocketing unemployment rate, a rate that is currently in the range of 35% to 40%, if Devco ceased to exist. It would take thousands and thousands of jobs with it. Even with the mines operating there is an expectation that 300 men will retire from Devco over the next three years, not to be replaced. Meanwhile all of our young people are leaving, there are no jobs and even their parents are joining the unemployment line. It takes time and money to train miners and the will to renew and rejuvenate the workforce simply is not there.

I will provide the House with a background of Devco's history. The Cape Breton coal fields were taken under crown control in 1968 when the Dominion Steel and Coal Company, better known as DOSCO, decided to conclude its decade-long attack upon the people of Cape Breton by abandoning the island altogether. Realizing the chaos this would cause, the government stepped in.

Initially Devco was supposed to supervise the slow shutdown of the coal industry over a 15-year period while it would help the workforce find new jobs in new fields. Then the oil crisis loomed and suddenly Canada needed the Cape Breton coal miners again just as it needed them during the first and second world wars.

Now, instead of phasing out coal production, Devco was put in charge of drawing up a 20 to 25 year plan that would promote a stable industry which would benefit both Cape Breton and the rest of Canada.

Now 25 years later there are just two mines operating in Cape Breton and the same Liberals who promised a stable industry when in government and in opposition are now back making plans on how they can shut down the coal fields. Despite this, Devco has become more efficient and more effective. Management and labour have worked together to make Devco deliver the goods for as little money as possible. Both the United Mine Workers of America and Devco's management deserve credit for this.

For example, in Prince mine, the deeps—the main shaft leading from the surface down to the coal face—have been realigned to make better use of the coal deposits. Meanwhile, Phalen mine has been plagued with problems caused by rock and gas outbursts, heavy roof conditions and flooding. These problems have all increased the cost of Devco coal, despite the hard work of the employees who worked overtime to get the mine back into production.

In many ways we are back to where we started in 1968, but the reasons Devco should exist are even more valid now than they were then.

There is hope. There is a contingency plan in case the problems with the Phalen mine become so severe that it has to be closed early. The contingency is the Donkin mine.

Donkin is the future of Devco and Devco remains the future of Cape Breton.

In June 1996 the then minister of natural resources said: “Donkin is related to hope. Everybody wants and needs hope”. It is not often that I agree with the Liberal government, but today I am happy to stand and endorse the then minister's statement.

Donkin is a huge coal reserve beneath the Atlantic. In 1981 Kilborn Engineering estimated that there were 1.4 billion tonnes of mineable coal off Cape Perce. The mine itself has already been built, at taxpayer expense. Two gun barrel smooth tunnels and engineering studies have been completed by the Government of Canada. The geology looks good and the quality looks even better.

An annual production of 3.8 million tonnes is feasible once Donkin goes into production.

Associated Mining Consultants has endorsed the forecasted success of the mine. It says that minimal surface facilities would be needed for a small scale operation at Donkin.

Selective mining could be undertaken during a trial period with, say, 500,000 tonnes mined annually. That could be expanded once it is clear that a profit can be made.

Donkin is the gold mine of coal mines. It should be opened by the same people who built it, the Cape Breton Development Corporation, acting in the interests of the people of Canada.

Our government has made substantial investments into the coal industry and today, by committing to opening Donkin as part of Devco, we can start the process that will see Canadians getting a return on their investment.

Not only have the taxpayers already paid to build Donkin, Devco also has most of the assets it would need to open the mine sitting idly at its abandoned site at Lingan. There is $8 million worth of equipment, ready to be used, sitting and rusting. Canadian taxpayers have already spent $88 million on Donkin.

While it is true that development has no immediate effect on production, the fact that it has gone well is a good indicator that the mine will be a good one.

In 1985 Associated Mining Consultants reported to Devco that the Donkin mine could be brought onstream at 500,000 or one million tonnes per year. That would generate $118.7 million and $170.3 million, respectively.

Mining experts from the union today are saying that current conditions could mean reduced capital requirements, which in turn would mean increased profits.

Here is a quote from the report “The Donkin-Morien Mine: Building the Mine of the Future”: “Production of 4.507 million tonnes per year is considered possible and economically feasible”.

I repeat that it is the gold mine of coal mines. Devco was right when it said in 1992 that Donkin mine is a valuable asset for the long term. The Donkin tunnels give us access to the great riches of the Sydney coal field, a great Canadian asset as important as the Alberta tarsands or Newfoundland's Hibernia. As we once again begin to talk of the new energy sources, be they the planned Sable pipeline or the nuclear reactors this government is keen to give China, it is critical that we do not forget the resources that have always been the backbone of our energy grid.

In time of war and crisis—

Donkin MinePrivate Members' Business

1:20 p.m.

The Acting Speaker (Mr. McClelland)

With regret, I must inform the hon. member that her time has expired.

Donkin MinePrivate Members' Business

1:20 p.m.

Humber—St. Barbe—Baie Verte Newfoundland & Labrador

Liberal

Gerry Byrne LiberalParliamentary Secretary to Minister of Natural Resources

Mr. Speaker, it is a great privilege to rise in the House and join my colleague from across the way.

I rise to address the House on Motion No. 136 which calls on certain limitations to be put on the development of Donkin mine in Cape Breton as a crown corporation.

I would like to begin by thanking the hon. member for Bras D'or for her interest in the issue and the future of the Cape Breton Development Corporation, also known as Devco. As a member from Atlantic Canada, I welcome the opportunity to debate this motion.

I believe the hon. member and this government share common concerns about Cape Breton. We are concerned, for example, about the high levels of unemployment on the Island, as well as in other parts of Atlantic Canada. We are concerned about the long term economic health of Cape Breton and about the future of its young people. I would also suggest the hon. member and this government share a common will for Cape Breton, to achieve long term economic success and social progress across the Island.

That is why our government continues to support the work of the Cape Breton Development Corporation which the hon. member knows is a federal crown corporation. The Government of Canada has set a clear and reasonable goal for Devco. As a coal mining company that is in the business of providing jobs and other economic benefits to Cape Breton, we expect Devco to become commercially viable on its own right. I believe that is a fair and reasonable expectation and I believe hon. members on both sides of the House will agree that this is indeed a reasonable expectation.

We believe that commercial viability is the best way to ensure the tradition of coal mining continues in Cape Breton and that Devco maintains its position as a major employer within the region. The need for Devco to succeed cannot be overemphasized. The corporation continues to contribute more than $150 million to the Cape Breton economy through wages, pensions and the purchase of goods and services. It is the largest coal producer and one of the largest industrial interest in eastern Canada, employing approximately 1,700 people. The economic spinoffs from Devco's activities are felt in virtually every community of Cape Breton.

I am pleased to inform the House that Devco has embraced the government's challenge to become commercially viable. It has taken steps to overhaul its operations, to introduce new technologies, to improve productivity and the labour relations found there and to better manage its business. The corporation's five year business plan approved by the government in May of 1996 clearly stated Devco's mission which is to become a profitable coal mining company.

To aid the corporation achieving its goal of profitability and competitiveness with other energy sources, the government has provided Devco with a repayable loan of up to $69 million over three years. I might add this is in addition to other federal funding that has been provided to the corporation since it was created in 1967.

I am also pleased to report that Devco made a number of positive achievements in the one year of its operating business plan. Although it faced a number of ongoing challenges, particularly at its Phalen mine, the corporation operated within the $43.5 million funding level approved by the Government of Canada.

Devco's annual report for the period ending March 31, 1997 shows a positive development on a number of fronts. I would like to briefly outline some of the progress that has indeed been made.

For the first time in the history of the corporation, new contracts were negotiated with bargaining units without the use of an outside conciliator. This is solid evidence of improved labour relations and the commitment of its employees, unions and management to work together.

Also during the past fiscal year Devco's safety results improved by more than 40%. This was reflected in a 10% improvement in employee attendance at the workplace. The corporation's emphasis on safety is good for workers and it is good for Devco.

Devco has also taken further steps to involve its workers in the decision making process. A quality management program known as beyond 200 was developed last year to promote continuous improvement and a commitment to quality across the corporation.

In terms of sales, in 1996 the corporation sold a record 2.8 million tonnes of coal to its primary customer, Nova Scotia Power Incorporated. Coal sales for the first six months of the current fiscal year yielded revenues of $86 million.

Devco's coal marketing strategy will continue to focus on meeting the needs of Nova Scotia power, which is far and away the corporation's most important customer.

I know hon. members will want to join me in congratulating Devco's management and workers on their efforts over the past year and a half. Their achievements to date have been meaningful and important.

For me personally I would like to congratulate Devco workers who have gone above and beyond the call of duty and showed the expert miners they truly are.

At the same time, it is important to acknowledge that more needs to be done. The corporation is projecting a funding requirement of $25.5 million over the next two years which is within the limit approved by the government. Devco is forecasting that it will achieve positive cash flows in the year 1999-2000.

To achieve this latter goal, the corporation will have to continue to improve productivity at its existing facilities. Devco's short term planning framework which as I noted earlier has been fully endorsed by this government calls for the corporation to focus its efforts on addressing the challenges it faces at its existing mines.

This is not an easy task. Over the next few months the corporation will explore ways to get around serious geological problems recently encountered at its Phalen mine. Devco will be considering all options for the Phalen mine and for its other coal resources including Donkin coal.

This does not mean the Donkin mine will or will not be developed. Far from it. In fact, as the hon. member for Bras D'Or is aware, a private company is in the process of undertaking a feasibility study to determine whether the mine can be developed on a commercial basis by a private sector entity.

This analysis, combined with Devco's own studies over the past few months, will form the basis of its next annual corporate plan update. This update will be submitted to government in early 1998.

The government has complete confidence in the management of the Cape Breton Development Corporation and in its workers. We agree that with the decisions that have to be made we firmly believe in management and workers ability to make appropriate recommendations to government for the future of the corporation.

In closing, I want to once again thank the hon. member for Bras D'Or for bringing this matter before the House. I believe that the underlying objective of this motion is to ensure employment and economic security in Cape Breton. I can assure the hon. member that we will keep the House informed of any developments relating to Devco that contribute to this important goal.

If I may say, we are very open to assisting in the process of Cape Breton development and Atlantic Canadian development. This government is committed to keeping an open channel to any and all new options.

Donkin MinePrivate Members' Business

1:25 p.m.

Bloc

Ghislain Fournier Bloc Manicouagan, QC

Mr. Speaker, my speech today is in response to the motion moved on September 24 by the hon. member for Bras d'Or, requesting that a crown corporation be established to develop the Donkin mine in the Cape Breton region of Nova Scotia.

I want to express my strongest opposition to this request, which, in my opinion, is totally groundless, especially for all Quebeckers, who are not concerned in any way by this so-called mine.

In fact, with all due respect to some hon. members, I would like to make an important correction. Donkin is not a mine per se, but rather vein, or lead, indicating development could take place on that site during some time.

Establishing a crown corporation is unacceptable mainly because mines are a provincial jurisdiction and the federal government has no jurisdiction whatsoever in the matter. Natural resources, including mines, forests and energy, belong to the provinces.

I think it shows a lack of respect for the taxpayers to mix the internal affairs of a province with the public funds of another province. If that is what the renewal of the federation or the constitution is all about, this is not very convincing to me. And if the federal government brings up Quebec's special status one more time, I will have to wonder what its word is worth. One cannot talk about respect for Quebec the same way as for any other province, mixing all the provincial cards together. It should be up to a province's government to manage regional matters like mines.

Let us now look at the particular issue of Donkin. To this day, absolutely no one has been able to prove that this coal mining project could be a profitable venture. Only one private firm seems to be interested in finding out what the situation is and in conducting a study at a cost of $400,000, 75 % of which would be paid by the Atlantic Canada Opportunities Agency. However, the study would only determine the reserve's potential and would not clearly establish whether it is possible to develop the Donkin coal mine without sinking more public funds into it.

In its 1996-97 estimates, the Cape Breton Development Corporation, which is accountable to the federal government and which is currently developing the Phalen and Prince mines in Nova Scotia, anticipated losses of $35 million.

The development of a coal mine in Donkin could cost at least $100 million to $125 million. The federal government has already invested $80 million, and it also holds the lease for that reserve. As for the Nova Scotia government, it owns the resource and would therefore collect royalties should the mine be exploited.

How could a government justify spending between $100 million and $125 million on a project that offers absolutely no guarantee of success?

In my riding of Manicouagan, as in several other regions, there are major potential mining opportunities. Since last year, when a geologist from the Quebec government discovered the Lac Vollant indicator, close to Sept-Îles, there has truly been a “Lac Vollant rush”. Some people are going so far as to say that it could be the richest deposit every discovered.

Never has the federal government gotten involved in or contributed to the exploration and long term development of such a large and promising deposit. And yet, ask the hundreds of prospectors who rushed right out and staked their claims and they will tell you that they think this is an exceptional opportunity to discover minerals and then sell them to promoters who want to mine them. The federal government never took any action.

A mining opportunity the federal government should have gotten involved in was the Natashquan mineralized sands. Tiomin Ressource, the company that wants to mine these sands, suspended operations because of a breakdown in communications with the native community. The company arrived at the site a year ago, but has not yet reached agreement with the native community. What the federal government should have done, through the Department of Indian Affairs, was to appoint a conciliator at the very least. If this had not resolved the problem, mediation would have had to be the next resort.

Why did the federal government do nothing to help work out an agreement in Natashquan, and thus prevent the loss of several millions of dollars and hundreds of jobs? We are not asking for a crown corporation, just for the federal government to assume its responsibilities. We cannot afford to lose investments like these in the tens of millions of dollars. No riding can afford to lose millions of dollars in economic spinoffs from the private sector.

It is time for the federal government to get to work and resolve the disputes that are hindering development of our regions, rather than devote its energy to creating government organizations with no real and attainable financial objectives.

I would like to mention an interesting episode in this connection. During the last election campaign this past May, my Liberal opponent made a promise on behalf of the Liberal Party to settle this matter. According to him, the Liberal government would be in a position to settle it for once and for all. Campaign promise made—end of story, nothing more heard of it.

I have been speaking of my riding for the past few minutes, but I am sure that a number of my colleagues here recognize the same realities in their regions. That is what happens when an overly centralized government is at the helm and the regions do not get their fair share.

As we are already aware, like a number of other fields of activity, mining must come under provincial jurisdiction. Take the example of the Société québecoise d'exploration minière. As you now, this is a government corporation which administers mining titles, such as the famous 800 square kilometres staked out by a Quebec government geologist last year near Lac Vollant.

In such a context, the Government of Quebec administers titles within its territory, using the funds of its own taxpayers if required. However in the case of the Donkin mine, I am wondering how our friends in the other provinces will react when they learn that the federal government has invested between $100 and $125 million to develop a Nova Scotia mine with an uncertain future, not to mention the cost of setting up a fat Crown corporation.

It does not make any sense whatsoever to create a crown corporation to develop a mine such as the Donkin mine. In politics, you cannot afford to take a gamble when $100 to $125 million are at stake. This is inadmissible. If developing this so-called mine was a sure bet, many private corporations would already have approached the Cape Breton Development Corporation. But it is not the case.

The government does not have the right to invest public funds in a more than hazardous venture which comes under provincial jurisdiction anyway.

This is the reason why the federal government should not set up a crown corporation to do exploration or to develop the Donkin “gold mine”. For these obvious reasons, I urge the Liberal government not to create a corporation to develop mines.

Donkin MinePrivate Members' Business

1:35 p.m.

Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I am pleased to rise in support of the motion put forward by my colleague from Bras D'Or. A fellow bluenoser, I might add, she certainly brings a unique and special perspective to the House. She faces many challenges from the many communities which comprise her new federal riding of Bras D'Or.

The motion speaks to the economic future of many of these same communities. The timing of the debate on the motion is quite appropriate in light of the recent troubles in the Phalen colliery.

I would also like to speak to the overall question of the future of the Cape Breton Development Corporation better known as Devco. While not a Cape Bretoner, my home in Pictou county shares the industrial Cape Breton tradition of coal mining.

For many years coal was a staple in the local economy in my constituency. Our most recent venture into the Westray mine, which ended in disaster, is certainly a sad reminder of the dangers associated with this industry in Nova Scotia in particular.

Coal mining is a tradition that must adjust to the realities of the 21st century. In my view the development of the Donkin mine under the auspices of Devco is the best way to ensure successful adjustment that has long term benefits for Devco, employees, taxpayers and those who supported Devco operations throughout the years.

Devco management announced that the corporation's five year plan last year completely ruled out the development of Donkin, emphasizing instead the Phalen colliery. Phalen has a history of instability and yet Devco management in its wisdom placed all of its mining eggs in one basket.

The Devco corporate plan also ruled out the identification of export markets despite significant evidence of the economic prospects of the exports of coal. As my colleague quite eloquently stated, it is apparent that coal still has a place in the industrial world. Tying the coal from Donkin to the coal markets locally in Nova Scotia is a huge mistake in my honest opinion.

Like all natural resources we have to try to capitalize on the ever increasing access to world markets that exist. We should keep in mind that the development of Sable gas in Nova Scotia could certainly have a significant impact on the local markets as it pertains to coal.

Last year during the hearings of the Senate committee on the future of Devco, Devco officials were warned frequently and consistently about the dangers of focusing solely on the Phalen mine to the exclusion of Donkin. Many industry analysts urged Devco to target foreign markets which would in fact require coal from the Donkin mine. Devco management, again in its wisdom, refused to do so opting to sell the Phalen coal to a strictly domestic market.

Devco management then turned around and announced plans to sell the Donkin mine to a private operator by the name of Donkin Resources Limited, DRL, for a single dollar. One dollar would be paid for this mine against a backdrop of millions of dollars that were put into the development of this site.

It is shocking to think that this could happen. The expense to taxpayers is something that should certainly make us all sit up and take notice. It brings to mind the situation that is happening presently in Hibernia where there have been rumblings that the federal government may contemplate selling this resource. It is an industry with perhaps huge potential that might allow the Atlantic provinces, Newfoundland or Nova Scotia in particular, in some way, shape or form, to make giant steps forward toward becoming have provinces. The government is being very short-sighted if it is contemplating such a move.

The situation appears to be moving rather rapidly. The same Devco officials reported that the latest series of rock blasts at the Phalen mine could limit the potential of the mine for future ventures.

Without the future of Phalen and with the apparent position taken on the Donkin mine, what does Devco have left? What remains for Devco? If both of these mines will not be operating Devco is a dead duck. The answer is nothing.

It slams the door on the livelihood—I believe the number was given by my colleague in the New Democratic Party—of close to 700 workers. The impact of the loss of 700 jobs in an area like Cape Breton is difficult to imagine for anybody who does not come from the maritimes. The economic impact of that has expanded perhaps tenfold in comparison to the province of Ontario.

In an ideal world private industry would be able to assume responsibility and risk for developing Donkin, but in the real world and in private industry we know that private industry is often very reluctant and unwilling to make commitments to the future of the workers who would be negatively affected by the closure of Donkin. This is economic business reality but the government has a responsibility. The government must see that the Donkin situation is handled with great care.

Devco management clearly made a mistake in 1996 when it adopted this corporate plan. Not one of the three official parties in the House raised an objection at that time; not the Liberals, not the Reform and not the Bloc. They all gave Devco a free ride and made short-sighted decisions that were having a drastic effect on Atlantic Canada, particularly in Cape Breton.

Is it any wonder the Liberals were then wiped off the electoral map in Nova Scotia on June 2, 1997? Is it any wonder the Reform Party could not even find candidates to run in Cape Breton?

It was left to the Senate to raise objections, the Senate that is often so much under attack. It was the Senate that then brought the matter forward to deal with the issue of Devco's limited corporate plan.

Thankfully the last election restored some balance to parliament and Canadians now have voices from all regions, not just from the west and Quebec.

In conclusion I condone the member for bringing this matter forward in such a timely manner. The historic significance of coal mining not only in Cape Breton but throughout the maritimes is such that we must ensure that we will look at the long term viability of this industry and that we proceed with caution. That responsibility must be assumed by the Government of Canada.

Donkin MinePrivate Members' Business

1:40 p.m.

Reform

Darrel Stinson Reform Okanagan—Shuswap, BC

Mr. Speaker, the motion before us today reads:

That, in the opinion of this House, the government should take action to develop the Donkin mine as a crown corporation.

I have said before, and I will say it again, that I believe mining falls under provincial jurisdiction and not under federal jurisdiction. Government intrudes far too often in provincial areas and it keeps on doing it.

Let us take a look at what is happening with regard to Devco.

One problem that Devco had was that it was saddled with the unfunded liabilities of its predecessor, Dominion Coal, including some $77.5 million for pensions, $117 million to clean up acid water drainage, reclaim tailings, and workmen compensation claims.

It went along not too badly, as was mentioned by the member from the Conservative Party, with regard to the shipment of coal overseas. This worked out all right until the government representative for Devco decided to torpedo any exports of coal. One main reason they had was Phalen was to come on board and supply coal to Nova Scotia power.

At that time I questioned the feasibility of cancelling any overseas contracts we had with regard to coal. Once an overseas contract is cancelled, it is very difficult to get that share of the marketplace back.

We know that there is a private group which has put forward an offer for the Donkin mines. It is currently being reviewed by the Senate. There was some $400,000 spent on a feasibility study done by John T. Boyd Co. from the United States. Out of that $300,000 came toward the study from ACOA, and $100,000 was put up by the company. It makes us wonder what kind of private development we are really talking about.

Will the taxpayers be left totally holding the bag for the demise of Devco with no other resources and all the liabilities for the environmental clean-up and the unfunded pension liabilities of past employees? These are questions that have to be asked.

We know that the Senate in its hearings is going through the offer and the feasibility study. We know that the minister will be testifying before the Senate, I believe on December 1. We also know at this time that there is nothing going on at Donkin.

This is a serious question. The taxpayers of this country have put hundreds of millions of dollars into these projects. It raises the question of who is better at this. the private sector or the government. Time after time we have seen the mismanagement of public funds by government. We have to wonder how long we can keep on funding corporations such as this to make decisions like this.

Let us look at this reasonably. Does anyone think a private company would shut down its export markets? Not a hope. But what does the government body do? It shuts down the export market and creates a problem. That alone should tell us that the government has no business there.

Donkin MinePrivate Members' Business

1:45 p.m.

An hon. member

It has no business sense.

Donkin MinePrivate Members' Business

1:45 p.m.

Reform

Darrel Stinson Reform Okanagan—Shuswap, BC

It has no business sense and it never has had any. I find that rather amusing coming from the Conservatives. It seems that a lot of these problems started when the Conservatives were in power.

We come back to the same thing. We know that mining is extremely important to Canada. It employs a large number of people, not only in the maritimes but right across Canada.

We know that coal will be under scrutiny here in this Kyoto agreement this government has decided to go into. So we have many problems in the coal industry right now due to government intrusion.

We have to realize that in many instances the private sector is better at looking after the needs of the people in the communities. All businesses have to make a profit in order to survive. It is that simple.

When we have to compete in the world marketplace we have to understand that. We are competing in a world market, not just among ourselves. Therefore when I see mismanagement of Canadian taxpayer dollars to the sums I see in here under Devco I have to seriously question the sanity of the governments involved. I do not think I am the only one to question the sanity. I think the taxpayers question it.

To sum up, I think the mining communities and the taxpayers of this country are tired of getting the lousy shaft from the governments which have run this country and it is time to get us back on the right track of producing and surviving.

Donkin MinePrivate Members' Business

1:50 p.m.

NDP

Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, I sure hope Hansard got every single word of the recent comments of my colleague from the Reform Party.

It is amazing that during question period a very passionate plea came from a Reform member from northern B.C. I lived for nine years in Watson Lake, Yukon, a town very close to Fort Nelson which he had mentioned in his question. He made a very passionate plea “for the federal government not to divest itself of the Fort Nelson airport. We need the federal government to keep its hands on Fort Nelson airport”. Not more than two hours later they turn around and say that the government has to get out of coal mining.

I would really like to know what side of its mouth the Reform Party is going to talk from today. One minute the government is no good and the next minute we need the government. Please, for the sake of all Canadians and for their constituents, the Reform Party should make up its mind. It is unbelievable. I find it amazing that no matter what the subject members on the Reform benches think the solution is always fire public servants, sell off public assets and return to some ideal state of nature that sounds like a cross between Sunday school and the wild west.

I know the hon. member will find this hard to believe but most people in Canada do not want an American style government which does nothing for working people but lectures them on morality. Most Canadians want a government that will stand up for people and make job creation its number one priority. That is why I am here, to push this government to help create jobs on Cape Breton Island.

Yes, crown corporations like Devco have been inefficient. It is not because of the workers. It is because of a handful of powerful men who have made themselves rich at taxpayer expense. The problem is not the crown corporations. The problem is the people who ride the gravy train.

I have lived in Nova Scotia for nine years and it is a great honour for me to look in the cameras and face all of Canada and wholeheartedly support my hon. colleagues from Cape Breton. I thank them for their wonderful efforts in trying to get this motion through the House.

I also wish to thank the hon. House leader of the Conservative Party for his gracious remarks with regard to this motion. After what the hon. member has had to go through for the last few years with Westray, and I know I do not need to go into what has happened with Westray, it is a very emotional time for him to stand in this House and mention coal mining in his area let alone Cape Breton. He deserves the kudos from the New Democratic Party and all Canadians.

The other day I was in Cape Breton and I met three absolutely wonderful people. They are miners José Pimentel and Victor Tomecheck and the head of the UMWA. I wear its pin with pride. They are trying to get us to move this government in the direction of making Donkin part of the Devco corporation plan. It is imperative for this to happen.

I encourage all members of this House and all Canadians to head up to Cape Breton and take North America's most beautiful scenic route, the Cabot Trail. Those who choose to do that can stop at wonderful areas like Chéticamp, Louisburg and Sydney. They will understand the feeling and the love Cape Bretoners have for the rest of Canada and they will be able to return that love.

A young woman stood up at a conference the other day and said “ladies and gentlemen, I am 18, I am a female and I am a Cape Bretoner”. According to the Reformers that is three strikes against her, get out of there. That is a scandalous shame. I find that hard to believe. I would have loved it if the Reformers could have been at that conference in Centennial hall to tell her “there is no future for you here, out you go. Government is no good, we can't help you. Let the dogs eat you”. I get really mad when I get on this subject.

The hon. Liberal member from Newfoundland did not give us an answer on whether he supports this motion or not. I would really like an answer before we recess today. Is the Liberal Party in favour of this motion or not? No political answer, just a yes or no. It would be greatly appreciated by those miners in Cape Breton.

Donkin MinePrivate Members' Business

1:55 p.m.

The Acting Speaker (Mr. McClelland)

Before we resume debate, and we have about seven or eight minutes left, it is customary for the House to give the member who moved the motion a few minutes to finish. Before we resume debate, we will ask members to please keep their interventions short and then we will get at it.

Donkin MinePrivate Members' Business

1:55 p.m.

Liberal

Hec Clouthier Liberal Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, I rise to address the House on Motion No. 136 which calls on the government to develop the Donkin mine in Cape Breton as a crown corporation.

I join the Parliamentary Secretary to the Minister of Natural Resources in thanking the hon. member for Bras d'Or for bringing this matter before the House. There has been a great deal of debate in Cape Breton about the future of the Donkin mine. The government appreciates the opportunity to address this issue and to advise the hon. member and all Canadians of its position on this matter.

As the parliamentary secretary has noted, the Cape Breton Development Corporation, better known as Devco, is a coal mining company that currently operates not one but two coal mines as well as support facilities that include a railway, a port facility and a coal washing plant.

Devco is headquartered in Sydney which is a wonderful community. It had a great race track at one time. It holds all the coal leases for Cape Breton, including the Donkin mine on the island's east side.

The corporation is a major employer in Cape Breton and must continue to play a vital role in the long term viability of Nova Scotia's great coal mining industry. In order to do this Devco must become commercially viable. As hon. members have been informed, the corporation is continuing to lose money. By the way, that is exactly what my horses did when I raced them at Sydney, lost money.

Progress is being made but Devco still has a long way to go before it can meet the government's objective of being a commercially viable crown corporation.

Hon. members know Devco believes the key to economic profitability in the short term is not to play bingo at Stornoway but to get its current business right, to reverse the trend of annual losses by the fiscal year 1999-2000. With that in mind, this wonderful corporation has focused on achieving productivity improvements and introducing new technologies and promoting increased co-operation between management and labour and I hope between all members in this esteemed House of Commons.

As the parliamentary secretary has very clearly and unequivocally indicated, Devco will be looking at all options to get around the existing geological problem at its Phalen mine.

Donkin MinePrivate Members' Business

2 p.m.

An hon. member

It is pronounced Phalen.

Donkin MinePrivate Members' Business

2 p.m.

Liberal

Hec Clouthier Liberal Renfrew—Nipissing—Pembroke, ON

There is a difference of opinion on the pronunciation of Phalen. I am from the upper Ottawa valley and I believe it is pronounced Phalen. I knew a Phalen who he was kind of an incorrigible person and Sister Mary Florence made him stand in detention.

Notwithstanding that the corporation will also look at the potential contribution of its full resources including Donkin coal prior to submitting its annual corporate plan update earlier next year.

Donkin MinePrivate Members' Business

2 p.m.

An hon. member

You are digging yourself in pretty deep.

Donkin MinePrivate Members' Business

2 p.m.

Liberal

Hec Clouthier Liberal Renfrew—Nipissing—Pembroke, ON

If I were on the other side I would really be in deep or out of it. We are on the government side, are we not?

Donkin MinePrivate Members' Business

2 p.m.

An hon. member

Yes, we are on the leadership side.