Madam Speaker, I am pleased to rise to speak to private member's Motion No. 292. I support the principle which the member speaks of, but the initiative is perhaps somewhat misplaced in that this motion proposes that the federal government provide the delivery of natural gas to rural regions in Canada. While I can accept that the federal government would and should make a contribution to the process, the provision of public utilities falls under the responsibility of provincial and municipal governments. As well, there are existing federal programs which might apply to this kind of program. Accordingly, I do not support this motion for the simple reason that it brings federal interference into an issue of provincial jurisdiction.
Many provinces already have in place programs to address the intention of this bill, to deliver natural gas to unserviced regions. I will quickly go over an example of such a program in my province of Alberta. Alberta has had just such a program and has been helping Albertans since 1973.
The natural gas distribution system serving rural Albertans began in the early 1960s with small systems built and operated by local groups and co-operatives. Interest in natural gas services grew throughout the decade. In the early 1970s the provincial government took action to expand the provision for natural gas to rural Albertans at a reasonable cost. This action was taken in accord with the general conclusion that it was in the public interest to improve the economic viability of smaller centres and that the family farm should be preserved.
It was felt that all Albertans, including those in rural Alberta, deserved a fair share of the benefits enjoyed by the people of that province from the ownership of natural resources and the revenue that flows from the development of those natural resources.
Because of the higher cost of serving scattered rural areas, it was decided that a provincial funding program to support construction of rural gas distribution systems was needed. To support this initiative the rural gas act was enacted in 1973 and soon after the rural gas program administered by the rural utilities branch of Alberta Energy was established.
This program brought many benefits to program users. The primary benefits included affordable installation costs where adequate gas sources are available, lower costs and reliability of fuel supply. Obviously all these benefits are crucially important to those living in rural areas.
Under this program approximately 4,000 new rural gas services are installed each year. Eligible services include uses such as homes, outbuildings, irrigation, grain drying, poultry and hog barns, greenhouses and more. Until this program was established individuals simply could not afford to access gas distribution in rural areas past already established transmission lines.
However, this program attempts to reduce consumer costs to a reasonable level by establishing a grant program under which participating utilities could receive grants based on a cost sharing formula from the provincial government. Under this arrangement consumers in the same class pay the same contract amount in any year, even though the costs to provide the service may vary widely.
Funding for the new gas installation is based on a formula that calculates the pooled costs per service within each franchise area. For example, for a rural installation service that has a capital cost of up to $2,600, the capital cost is shared 100% between the distributor and the customer. However, for a rural installation that costs above $2,600 and up to $15,000, the distributor or consumer covers 25% of the cost and 75% is covered by the provincial grant. With this formula a typical farm installation costing $5,000 would receive a grant of $1,800. Obviously this makes the convenience of natural gas much more affordable to those living in rural areas.
There are a number of factors that contribute to the success of the rural gas program. First, with the expansion of natural gas services into rural areas, a new system of franchising had to be created to focus on the special requirements of rural areas. This concept of franchise areas was applied in the rural gas act to ensure a customer base for future viability of the new distributors.
Other criteria included consideration of major obstacles to pipeline construction such as rivers or highways. Under an assigned franchise a distributor has the right and responsibility to offer service where economically feasible to all potential rural and urban residential customers who did not have natural gas service prior to 1973.
Second is the formation of member owned co-operatives in the less populated areas of the province. The provincial government recognized the dedication, initiative and independent spirit of rural dwellers and felt the program had a better chance of success in these areas if the local community controlled its own destiny. Where have we heard that statement before?
Third is the provision of grant funding on a cost shared basis to make rural gas systems economically viable. Through contributions by the customer, government and co-ops, the resulting gas rates could be competitive with urban rates.
Finally, Gas Alberta was established to negotiate price and arrange for gas supplies for the co-ops. Through a postage stamp wholesale rate throughout the province, all co-ops were on an equal footing with respect to gas costs.
The rural gas program has been very successful in Alberta. To March 31, 1999, services have been provided or systems upgraded for over 171,600 rural, urban, irrigation, grain dryer services by over 90 distributors throughout a network of pipelines totalling 116,521 kilometres.
The point I make by referring to the Alberta example is that obviously programs such as those proposed by the motion already function and are doing well under provincial jurisdiction. As well, keeping in mind it is the province that collects royalties from the export of natural gas and oil, the provinces already have a built in funding system without asking Canadian taxpayers to unnecessarily subsidize a rural gas installation program.
The Reform Party supports the principle that the provinces should have exclusive jurisdiction over natural resources and that citizens of the provinces should all benefit from the development of those resources.
Alberta is not the only province that receives substantial royalty income from the sale of natural gas. The province of Saskatchewan received $44.5 million last year in natural gas revenue. It would seem reasonable to me that all the residents of Saskatchewan, even those in remote northern communities, should benefit from the development of natural gas resources as much as any other province.
However, the prime responsibility for making that happen lies first with the local community and second with the province. Third, there is room for federal participation through existing programs such as the PFRA or prairie farm rehabilitation program.
For all these reasons I will not support the motion and I would encourage other members of the House to do the same.