Mr. Speaker, before I get to the heart of the matter, I would be remiss not to make a few comments on the speech by my colleague in the NDP. For a change, I have to say that I agree with some of what he said.
As it pertains to the cost of oil, gas and fuel at the present time and the effect it is having on a lot of people in our country, the hon. parliamentary secretary mentioned that we could not control the price of oil. What the government can control is the effect it is having on the poor of the country and on the people who are living on fixed incomes and suffering drastically because of escalating prices.
If the government cannot control or lower the price of oil, it can certainly lower the taxes. As the price of fuel goes up, the amount of money that governments make, both provincially and federally, increases dramatically. If they were satisfied with a certain fixed income, then the balance of the amount of taxation which is now being charged could revert to the user and that would be substantial. There are all kinds of other ways that the government can help the poor people of the country.
One of the other items that the hon. member mentioned, which is an extremely important to people of Labrador, is the effect this is has on the people who depend on fuel in Labrador. The fuel is brought in during the summer months. Earlier this year, of course, fuel was at a relatively low price. Prices escalated and are those people paying the earlier price at which the owners of the shipping companies bought the fuel? No, they are paying the higher price which is now being charged. That is extremely unfair to the users.
However, that is probably where my agreement with my colleague in the NDP ends. My feeling on the divestiture of Petro-Canada as such is entirely different from what the hon. member feels. Even though we appreciate, perhaps more in Newfoundland than anywhere else in the country, what Petro-Canada has done for oil and gas development in our province, we also must realize that to grow companies need investment. We cannot restrict that investment or we are putting companies at a disadvantage.
Any legislation respecting ownership of Petro-Canada is bound to draw considerable attention in my home province of Newfoundland. Petro-Canada, as a crown corporation and a private company, was and remains a key player in the Atlantic oil and gas industry. Petro-Canada was a partner in the Hibernia oil discovery off Newfoundland in 1979, as well as in gas discoveries off Nova Scotia. It now shares in substantial revenues from the very successful development of the Hibernia field.
When the Tory government bought shares in Hibernia and invested heavily in Hibernia development, many naysayers condemned it for throwing money into such a development. The Canadian Alliance talked about throwing money into a sinkhole. Today, the Government of Canada benefits greatly from the development of Hibernia and will continue to profit for years to come from the developments off the shores of Newfoundland and Labrador.
A year later, in 1980, Petro-Canada was the operator of an oil and gas exploration off Labrador. While it may be some time before the oil and gas from the Labrador fields hits the market, there is no doubt that the Petro-Canada shareholders will reap substantial benefits from their investment in that first class property.
In 1984 Canada Petro-Canada made its first large offshore oil discovery as an operator at the Terra Nova oil field and is now just a few months away from getting first oil from that property. Petro-Canada is also a significant partner in the White Rose oil field which will likely follow Terra Nova as the third producing oil property in offshore Newfoundland.
Along the way the company became a key investor and owner in building an oil transshipment terminal port at Whiffen Head which will be the storage and distribution centre for all the Newfoundland offshore oil. I doubt very much that there would be an offshore oil industry today in Newfoundland without the initiative, the drive, the risk, the faith and the determination of Petro-Canada and its only shareholder for most of that time, the Government of Canada.
Today, oil exploration, development and production in offshore Newfoundland is one of Petro-Canada's four core businesses. The others are the oil sands production and development in Alberta and other developments in northern Alberta, natural gas exploration and production in western Canada generally and refining and marketing of petroleum products including lubricants.
Petro-Canada's mandate is obvious in its core businesses. It was formed by the Government of Canada in 1975 to do what private investors were unwilling to do. That perhaps is the greatest legacy that Petro-Canada leaves the country. The public investment in Petro-Canada was the catalyst for drawing other private sector investors at that time who, perhaps because of exorbitant costs of development of oil fields in rough and rugged areas or unchartered areas in the country and perhaps because of the uncertainty of such developments, could not take the risk on its own. It was the Government of Canada, through Petro-Canada, that was the catalyst to start some of the major developments in the country which have proven to be extremely successful and rewarding to the country.
Private companies were reluctant to take the risks or to invest in new technologies that would be needed to explore and develop these frontiers. Petro-Canada gave Canada a presence and a voice in the corporate culture where attitudes were formed and decisions were made about potential for private sector investments in these areas.
It provided the government with a corporate investment that it could use to form partnerships with the private sector, companies to undertake projects such as Hibernia, which would never have been undertaken without the incentive that the government provided through Petro-Canada.
I am not normally a fan of public sector competition in the private sector but Petro-Canada is different. It is a case where the public sector attracted private sector investment in projects that might not have been developed.
Petro-Canada is a success story. It demonstrates how the public sector can open the door to new areas of investment. Thanks in large measure to Petro-Canada and the former PC government, the Newfoundland offshore is highly profitable, although still a difficult area for private investment solely.
Everything changes. Petro-Canada is now a private company, although the federal government retains 18% ownership. It has to look to private investors for the capital it needs to operate and to expand its core business. It must find the capital in the global financial markets that are increasingly attracted to the size of the profits that we see happening.
I can understand that the present level of ownership restrictions on Petro-Canada may have a negative impact on its ability to raise new capital. We had an example of that with a former public company in Newfoundland, Fishery Products Limited, which was privatized under great restrictions. The company now readily admits that the limit on these restrictions have to be changed because in order to draw the investment that will make the company grow, prosper and be competitive it must be able to encourage investment.
Now that the private sector has experienced firsthand that the energy frontier in Canada is a good place to invest, it may not be necessary to insist that Petro-Canada be majority owned by Canadians.
It is important to avoid a reign takeover of Petro-Canada and the 20% restriction on individual ownership might help do that. If Canadian investors continue to put their money into Petro-Canada so that we continue to have a primarily Canadian owned company playing in the major leagues of global energy exploration, development and production, it is worthwhile to keep the requirement that a majority of directors be Canadian citizens, but it may be more window dressing than substantial.
We have an old saying that says, “he who pays the piper calls the tune”. Undoubtedly, the investors or shareholders in any new company will be the ones who will direct the board of directors. By having that clause in the bill, which says that everything will be okay because the directors will be mainly Canadian, it will probably be just window dressing.
We are not against the bill. It is something that had to come. Petro-Canada has played an extremely important role in the oil and gas development, particularly in my own area of Newfoundland and Labrador. However, times change and new outside interested investment is required to make companies grow, prosper and be competitive in this global market.
We will be supporting the bill. However, just because we are opening up the country to investment, I hope it does not mean that we ourselves will be bought or owned by anybody else. The remarks of my hon. NDP friend that one day we will see the American flag flying over the country, surely we as representatives in this great Chamber and as Canadians generally, know we will never let such a thing happen. We are Canadians and we stand for Canada first. Any decisions we make in this Chamber will be for the betterment of the country and not to weaken it or give it away.