Mr. Speaker, with rather mixed emotions, I rise to speak to Bill C-39, an act to amend the Eldorado Nuclear Limited Reorganization and Divestiture Act and the Petro-Canada Public Participation Act.
These days, we hear the words “snap election” or “early election” on everybody's lips. In the meantime, the job of the MPs is to speak to certain bills, which in some cases are contrary to the interests of Quebec, such as the young offenders bill or bills I consider of relative importance, such as the one before us today.
In short, this enactment relates to the mandatory provisions in the articles of Eldorado Nuclear Limited—now Cameco Corporation—and Petro-Canada.
It provides that the articles of Cameco Corporation will have to contain a 15% individual non-resident share ownership limit for voting shares as well as a cap on aggregate non-resident share ownership voting rights of 25%.
It provides that the articles of Petro-Canada will have to be amended to allow for a 20% individual share ownership limit instead of 10%, while the aggregate non-resident share ownership limit of 25% will be eliminated.
In addition, the prohibition on the sale, transfer or disposal of all or substantially all of Petro-Canada's upstream and downstream assets will be replaced with a similar prohibition on the sale, transfer or disposal of all or substantially all of its assets, without distinguishing between the upstream and downstream sectors of activity.
However, before examining the reason for the bill, let me give you a brief overview of these two corporations, which I had to do to get to know them better.
First Cameco. Cameco was born in 1988 out of an amalgamation of two crown corporations, namely, Saskatchewan Mining Development Corporation and Eldorado Nuclear Limited.
Eldorado Nuclear Limited had been in existence for 61 years. It was the oldest uranium producer in the world. It was a world class business and a reliable supplier with many customers, both in Canada and abroad. The Eldorado company was Canada's only integrated producer, which means that it could transform uranium into products used not only in Canadian reactors in order to satisfy Canadian energy needs, but also exported in order to satisfy the energy needs of other countries. Modern and efficient plants were operated by Eldorado, and it owned in whole or in part the uranium mines where the ore was extracted at competitive costs.
The other partner, the Saskatchewan Mining Development Corporation, was one of the biggest uranium suppliers in the world. Already, in 1986, it accounted for 7% of the total production in the Western world. As the company had been intensifying its exploration activities for a number of years, it owned some of the world's most important commercial reserves.
Since 1988, Cameco has made several buyouts and has extended its activities in several other countries. The company deals in uranium, gold and oil. It is worth mentioning that, in 1999, the company signed an agreement for the purchase of natural uranium extracted from highly enriched uranium coming from Russia's dismantled nuclear armament. I will come back to this later.
Cameco Corporation, headquartered in Saskatoon, is thus the world's biggest uranium producer. Its customers are hydro-electric companies in 13 countries around the world. The uranium products they buy supply nuclear energy plants.
The Canadian nuclear industry sales figure is $4.5 billion and it maintains 30,000 highly skilled jobs in 150 Canadian companies. The Canadian government brings in annually more than $700 million in taxes and sale taxes.
The new Cameco company has one thousand employees and its total assets are worth over $1.6 billion. The public holds 90% of its shares, and Saskatchewan government holds 10%. The company's 57 million shares are traded on the Toronto and New York stock exchanges. Unfortunately, I cannot at this time say what the percentage of non-resident shareholders is. This is the kind of information the minister will be able to give us when he appears before the standing committee.
Let us now turn to Petro-Canada. Petro-Canada was established in 1975 by the federal government as a result of the high oil prices and the uncertain supply we faced at the time. The company's initial mandate was a response to public policy needs in the energy sector. Canada had to establish a presence in the industry, stimulate exploration in frontier areas and find new oil resources in Canada.
The world changed a lot over the next decade. Ten years later, the oil crisis was over, and it was claimed that successful exploration and conservation measures had had a tremendous impact both on supply and demand.
In 1984, Canada elected a Conservative government with a totally different view of government's involvement in the business world. This new philosophy, which meant the official end of Petro-Canada's public policy mandate, was the first of many steps toward privatization.
This new approach put an end to government funding of Petro-Canada. However, as a crown corporation, Petro-Canada could not go to the market to finance its operations. In the mid 1980s, net receipts dropped even further as oil prices came down.
During this time, Petro-Canada had to turn itself into a profitable venture; it was very difficult. Petro-Canada had a huge debt because of its original public policy mandate and, in the absence of new capital, it had to borrow more to fund its growth. Access to the stock market became essential.
Finally, in 1990, the government announced its intention to privatize Petro-Canada and the first shares were sold on the open market in July 1991, at $13 each. The markets were quick to pass judgment on Petro-Canada's financial health. During the first year, the value of the shares gradually dropped to $8. In 1991, Petro-Canada suffered a huge loss of $603 million, primarily because of the devaluation of some assets. Petro-Canada needed more than a change, it needed a miracle. It had to fundamentally review its business and the way it was managed.
It significantly reduced the number of properties in which it had a direct interest. It reduced its annual operating costs by $300 million. It went from a staff of close to 11,000 to only about 5,000 employees.
September 1995 was a turning point in Petro-Canada's history. Indeed, this is when the government disposed of most of the 70% of outstanding shares that it still held, keeping only a 20% interest. At the time, this was the largest issue of shares in Canada's history.
On December 31, 1999, out of the 222.4 million public shares of Petro-Canada, 181.6 million common shares were held by Canadian residents, while 40.8 million multiple voting shares were held by non-residents.
This completes my historical overview. Let us now briefly go back to Cameco.
In his press release announcing the proposed legislative amendments, the minister put it this way, no doubt to reassure the public.
The proposed amendments are consistent with the Government of Canada's policy on foreign ownership in the uranium mining sector and do not diminish Canada's ability to meet its commitments with respect to nuclear non-proliferation.
Given the attitude we saw with respect to the transportation of MOX, the warm and fuzzy words of the member for Wascana are hardly reassuring. I wonder about the appropriateness of such an action. Is it really necessary to go after more foreign capital to mine uranium?
It should also be pointed out that the Ontario communities of Clarington, Hope Township and Port Hope will have to manage more than one million cubic metres of low level waste produced by former crown corporation Eldorado Nuclear Ltd. at the Port Hope refinery from the 1930s on.
This waste was first dumped in various sites in the city of Port Hope, then moved to the Welcome storage site in Hope Township, and finally to the Port Granby site in the Municipality of Clarington. The Welcome and Port Granby storage facilities are authorized by the Atomic Energy Control Board and belong to Cameco, which runs them itself.
Even though the waste is managed safely in its present location, the current situation will not be acceptable in the longer term according to the Atomic Energy Control Board, the Government of Canada and the local communities. Why, while we want to attract more foreign capital, are we limiting foreign control? Is it to protect ourselves or to protect them against potential liability with respect to the environment?
I hope the minister will give appropriate answers to our questions in committee. However, I would be remiss if I failed to mention that the head office of Cameco is located in the minister's province, Saskatchewan.
Now, let us go back to Petro-Canada. Petro-Canada, whose head office is located in Alberta, was previously a crown corporation. Today, the federal government owns about one-fifth of the corporation's shares. As sovereignist Quebecers, we consider that this corporation is already owned, to a certain extent, by foreigners. The fact that the maximum percentage of shares that an individual is allowed to own is raised from 10% to 20% does not necessarily change the problem of competition on the fuel market.
What is surprising is that this bill is being introduced at the very moment when the Conference Board is studying that market. Would it not have been more appropriate to wait for the completion of the Conference Board study before introducing such changes to the share structure of Petro-Canada?
Also surprising is the fact that Petro-Canada contributed a little over $5,000 to the election fund of the Liberal Party of Canada in 1999. I suppose that when the Chairman and Chief Executive Officer of Petro-Canada asks for changes to the Petro-Canada Public Participation Act, close attention is paid to what he has to say. All roads lead to the campaign fund of our friends across the way.
As for the report of the Conference Board, I want to remind the House that the parliamentary committee examined Petro-Canada and the fuel industry in 1998. In one of its recommendations, the committee warned us against a possible merger of Petro-Canada and another oil company.
This is another fine example of the Prime Minister ignoring the work of his own members. Despite all the work that was done, he is trying to hide the fuel issue in this report from the Conference Board.
The federal government not only collects fuel taxes, it grabs part of the huge profits being registered by the oil companies this year. Petro-Canada's profits increased by $195 million during the second quarter of the year 2000. That is a 304.7% increase. To increase its tax revenues, the government will stop at nothing. During the next campaign, the Liberal Party election cry could very well be “We want nothing but your good, and your goods.”
Increasing the foreign ownership limit from 10% to 20% will not allow an individual to take control of Petro-Canada. However, 20% of the shares of a company can give someone a lot of power. We, in the Bloc, think that competition is one of the major problems of this industry.
Also, the 25% cap on aggregate non-resident share ownership voting rights would also be abolished under this bill.
Petro-Canada could very well end up under foreign control. The minister should explain why this should be.
The federal government identified a dangerous level of concentration in the industry, but it decided against doing anything until the problem reached crisis proportions since the winter of 2000.
The Bloc Quebecois has been demanding for some time that the federal government make sure there is more competition in the Canadian oil industry. For example, three refiners-marketers control 75% of the wholesale trade in Canada, which is reason enough to wonder if there is any real competition in this industry. The Competition Act should be amended to guarantee competitive prices for consumers. The House committee that has been poring over this legislation for a year has clearly indicated that the Competition Bureau had a very hard time enforcing the law.
Two things should be done in that regard. First, there should be changes made to the onus of proof with respect to anticompetitive behaviour, and, second, the Competition Bureau should be given the authority to initiate investigations.
Another problem with the federal government in the gas issue is that only 17% of federal taxes on fuel are invested in the transportation infrastructure. The federal government then feels it has to set up infrastructure programs in order to gain more visibility. Compare this with the Quebec government, which is investing 71.7% of fuel taxes revenues in infrastructure.
To sum up, I fail to see how this bill is relevant. We are not against it nor do we support it, but the minister will have to answer some questions. The problem I see here is why introduce this bill now? Is it because a foreign investor anxious to invest in Petro-Canada needs an increase in the foreign ownership limit to take over the company?
I suppose the Minister of Natural Resources will be able to explain to us in committee why this bill is being introduced now and why the government is not dealing with the issue of competition in the gasoline market.
In conclusion, I will quote an excerpt from the 1999 annual report of the National Energy Board:
Petroleum export revenues increased to an estimated $14.9 billion in 1999, somewhat below the peak of $17.9 billion in 1997. Spending on petroleum imports was about $9 billion, leaving Canada with a trade surplus in petroleum of $5.8 billion, up from $4.4 billion in 1998.
It is strange that a country that has a trade surplus in petroleum cannot exert any pressure on the gasoline market. It is also strange that it would consider allowing foreign control.
There are some fundamental questions which must be put to the minister. Therefore, I am looking forward to seeing him at a future meeting of the Standing Committee on Natural Resources and Government Operations.