Mr. Speaker, I rise to speak to Bill C-11, the Cape Breton Development Corporation divestiture authorization and dissolution act.
The government announced in January last year that it was going to sell the assets of Cape Breton Development Corporation which is more commonly referred to as Devco. The government stated that this decision was necessary for economic and financial reasons. Devco has not had a prosperous financial history having survived in some cases only due to subsidization provided by the federal government, subsidies that have culminated in more than $1.5 billion being spent in Cape Breton Island.
That sounds like a lot of money and I would certainly agree that it is. What that figure does not tell us is the peripheral effect that this money provided to the people of Nova Scotia and in particular to the island of Cape Breton.
At committee we heard from the mayor of the Cape Breton Regional Municipality, David Muise, and he put some of the figures into perspective for us. For instance, the federal government set aside $68 million for economic development when it announced the privatization of Devco. However, according to Mr. Muise the region will be losing $65 million in purchasing power and a loss of $1.5 million paid in lieu of taxes by the corporation. When we put that in perspective, the $68 million is not quite the figure it sounds like.
Other groups also told us about the hardship that the closure of the coal mines will have on the workers and their families. The Phalen mine was closed earlier than anticipated and no information is being released about the potential buyer for the Prince mine, but the federal government has optimistically said that there will be employment for 500 people. That leaves more than 1,100 people without jobs. Many of the witnesses before the committee questioned whether even those 500 jobs would be available.
Let me go back to what the mayor had to say at committee. He told us that his municipality is 2,600 square kilometres with a population of 117,000 at the last census, but it was losing young people at a rate of 1,000 per year. One thousand young people are leaving the municipality of Cape Breton per year because they do not see a future for them on the island of Cape Breton. The official unemployment rate is 20%, but the reality of that number is really much higher, some say as high as 40% and the poverty rate is 25%.
The economic reality facing the miners in Cape Breton is bleak. This was reinforced by presentations from groups such as United Families and Northside Future. It was also the reason I put forward amendments at committee to try and secure better pension packages for the miners and improve medical benefits for miners and families. Benefits are needed by miners who suffer from black lung disease, a condition that results from years spent underground breathing in coal dust. Neither of these amendments were successful.
I should make it clear that the Progressive Conservative Party supports the removal of the federal government from the coal mining industry in Cape Breton. At the end of the day the federal government should not be operating the coal mines in Cape Breton. The past history of the crown corporation clearly shows that the mines did not operate efficiently under government authority.
However, the government must assume its share of the blame for the failure of the crown corporation to fulfil its objectives. With all of the money that has been provided by the federal government for diversification in the region, there has been little success and far too much political interference.
When the crown corporation was established in 1967 it was clearly intended to help the region move away from its dependence on the coal industry. From the presentations that we heard at committee, it is clear that there is still a strong reliance on the coal mining industry for employment. It is also clear that the government has only paid lip service to helping coal miners without any real propulsion to effect change.
The denial of all the amendments at committee and again at report stage, some of which would really have improved this legislation and demonstrated a commitment by the federal government to help the people of Cape Breton, clearly showed that this was a political process.
At the same time one needs to be an optimist and believe the federal government when it says it will try to secure the best deal possible in the sale of Devco's assets and in helping some miners retain employment. It is easy to see why there is skepticism on the part of the miners, but they also know that there is more coal producing potential in Cape Breton.
Prince mine can produce one million tonnes of coal and there is a much greater potential in the Donkin mine if and when it is ever developed. The contract to supply coal to Nova Scotia Power will be a major factor in enticing a buyer while the coal handling pier and other properties of the corporation will be strong selling points and valuable assets to potential buyers.
There is opportunity for development of the Donkin mine and remedial work cleaning up some of the mine sites. The work ethic of the miners shows that the possibility exists for coal mine development, but coal mine development will not be the sole economic driver of the future of Cape Breton or Cape Bretoners.
There is very little information about potential buyers. The only thing known is that local bidders have not been included in the final process. Some of the best minds and entrepreneurs in the coal industry are not being included and given an opportunity to bid on the assets of Devco corporation. Instead it appears foregone that there will be a foreign owner operating the coal mines of Cape Breton.
I want to discuss the amendments that were presented. A number of positive amendments were put forward, ones that would have provided Cape Bretoners with a stronger voice and greater say in how the mining industry will operate in the region.
I put forward amendments to try to enhance the medical benefits for miners who have contracted black lung disease as a result of years spent mining coal underground. I also tried to improve the pension package, to extend it to miners with 20 years of service rather than 25 years and a total of 75 points as the government has intended.
None of the amendments put forward were accepted. The government members of the committee voted against every amendment without regard for the improvements they could have provided to this legislation. Amendments at report stage were also denied.
Last week the federally appointed arbitrator made his ruling public. Bruce Outhouse had been tasked with determining an equitable severance package and pension plan for the Devco miners. In his decision miners with 25 years of service regardless of age would receive early retirement packages. While he refused to accommodate miners with 20 years of experience, his decision will provide packages to an additional 246 miners and will add another $40 million to the overall package.
Mr. Outhouse declined to provide the same offer to miners with 20 years of experience on the basis that it would be too costly, requiring an additional $79 million. We continue to disagree with this aspect of his decision, but both parties went to binding arbitration in good faith and certainly we have to stick by the ruling that was brought down.
His ruling regarding health benefits also added support to changes that the PC Party has been trying to advance. Again the arbitrator ruled that medical benefits be paid to employees for the length of time they receive severance payments.
The medical problems confronting miners mainly result from years spent working underground and inhaling coal dust. It is only appropriate that medical benefits continue to allow these miners some security; otherwise health plans would likely be unavailable to them since it is difficult for anyone suffering from such ailments to successfully qualify.
A comment by Mr. Outhouse summarizes the difference between the way the government has handled this legislation and the sale of Devco's assets and the views of the PC Party. In defending his decision to provide early retirement benefits to all miners with 25 years of experience, Mr. Outhouse stated:
This is a substantial sum by any standard. However, I am convinced that anything less would fail to adequately reflect the long service of these employees and the difficult future which lies ahead of them.
This is exactly the point. The federal government has introduced the legislation that we are discussing here today to provide for the dissolution and devolution of Devco's assets. It has failed to take into consideration the lives of the people who are directly impacted by this decision. Rather than listen to the people of Cape Breton or to amendments put forward to improve the legislation, the government was signalling that it does not care how the people of Cape Breton cope with the loss of 1,100 jobs and how this will impact on the miners, their families and their communities.
The PC Party recognizes that the federal government's role in Devco has been extended beyond the point where it is financially feasible to subsidize the coal operations of Devco. However, the government could have decided on its own that it would provide a retirement package equal to those offered to other crown corporations when they were privatized. By failing to do so the government has lost credibility and demonstrated once again that it does not understand ordinary working Canadians.
I would like to mention the fact that committee and government parliamentarians were lobbied by many people from Cape Breton Island. Members from Cape Breton worked tirelessly on behalf of their constituents, as well as most of the critics for the natural resources portfolio.
I had the opportunity to meet a number of people, all of whom were here for the right reasons. They were all working for the betterment of Cape Bretoners. There are two people I would like to point out and make note of tonight. They are Edna Budden and Bev Brown of United Families. Although we did not always agree on every issue, they spoke from their heart and they worked tirelessly on behalf of Devco miners and Cape Bretoners, with no gain for themselves.