Madam Speaker, I am pleased to take part in the debate today. At the outset I wish to say that my caucus colleagues and I vigorously oppose Bill C-3, an act to amend the Eldorado Nuclear Limited Reorganization and Divestiture Act and the Petro-Canada Public Participation Act.
The bill relates to the mandatory provisions in the articles of Cameco Corporation, which was formerly known as Eldorado Nuclear Ltd., and Petro-Canada which was created in 1975.
Bill C-3 was first introduced in the previous parliament and died on the order paper with the dissolution of parliament last fall. The bill provides that the articles of Cameco Corporation would 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 stipulates that the articles of Petro-Canada would be amended to allow for a 20% individual share ownership limit while the aggregate non-resident share ownership limits would be eliminated.
In addition the prohibition on the sale, transfer or disposal of all or substantially all of Petro-Canada upstream and downstream assets would be replaced with a similar prohibition on the sale, transfer or disposal of all or substantially all its assets without distinguishing between the upstream and downstream sectors of the activity.
Energy, mining, forestry, geomatics and related industries currently account for approximately 11% of Canada's gross domestic product. They employ directly nearly 800,000 Canadians and account for 22% of new capital investment. The resource sector exported $97 billion worth of goods and services in 1998 and it drives the economies of over 600 communities across Canada.
Canada is the world's largest producer and exporter of uranium, and Cameco is not only a Canadian state of the art company which accounts for about 25% of the world's uranium production but also the western world's uranium chemical conversion facility.
At one time Petro-Canada and Cameco were both crown corporations wholly owned by taxpayers. The Government of Canada sold its shares in Cameco in 1995.
Although the government currently owns 18% of Petro-Canada's shares it does not influence the management of the company. At the time of privatization certain ownership restrictions were placed on both these companies.
I wish to talk about Petro-Canada because I remember it fondly, not as a member of parliament but as a very proud moment in the life of the federal New Democratic Party. Those with longer memories will recall that in the minority government era of 1972 to 1974, the creation in 1975 of a publicly owned oil and gas exploration company with downstream stations was part and parcel of this party's support for the Liberal minority government following the 1972 election.
I recall how Petro-Canada was talked about as being a window on the industry with the other multinationals that were operating in the country. Members will recall that at that time we were going through some extreme price shocks following the crisis in the gulf and the six day war in the Middle East in 1973. We had some very sharp price hikes.
There were concerns about the rapid increase in gasoline fuel prices in the country. Some rules were put in place to regulate or to make sure that there was a flow through in terms of how much product there was in the lines at the time. As I recall, it was 60 days before some provinces would allow a price increase after a world price change was announced because that is how the price was determined in terms of the fuel that was in the line at that time. That was a very important time and a very important rationale for Petro-Canada to come into being.
There were additional benefits as well that were well recognized. We talked about the ability to have a two price system to take advantage of some of the enormous resources that exist in Canada. We are a rich storehouse of resources. Canada is blessed with some of the greatest natural resources in the world, such as oil and gas reserves. We talked about a two price system that would not only be a benefit to consumers but would also be an incentive to make our products more competitive and sell better abroad.
The world has changed dramatically in the last 25 years, and in particular in the last 10 years. We cannot do that any more, thanks to the free trade agreement and the North American Free Trade Agreement and undoubtedly the FTAA when it is put into place in three or four years from now. We cannot set a two price system. We cannot have a price for Canadian products or a domestic product in Canada and export our commodities and our resources south of the border, or for that matter to any other part of the world, without running afoul of these WTO, FTAA and NAFTA arrangements.
The Prime Minister was on his feet earlier this week in the House of Commons trying to defend his position on natural resources. He said that he wanted to keep the control of them in this country. We have news for him. We have lost that control already. We lost it some time ago. We lost it when we signed the terms of the North American Free Trade Agreement.
We cannot turn off the spigot any more and say that we want to protect our resources so we will restrict the amount of our exports. We can only do that if we turn off the spigot to our people and our companies. It has to be done in direct relationship, so that the whole two price system and our ability to control our resources is very much hamstrung as a result of these agreements.
These restrictions are causing hardship, distress and a good deal of genuine inability to comprehend. I want to take a moment to inform the House that this morning on my voice mail in my Moose Jaw office there was a very worrisome call from an individual named Chris. He said that he was trying to put food on the table for his family but gas prices were going up, natural gas was increasing and electricity was going up. He said there had to be a ceiling on prices because they were getting crazy. “How the heck are we going to live?” was what this individual said in his voice mail.
What this individual fails to understand is that there is very much a restriction on what a government, either at the provincial or federal level, can do any more as a result of these free trade agreements and the WTO. We do not have the ability any longer to step in and say that yes, those prices are rising dramatically and that we will take some action to lower them. That was the case before.
When the government talks about more democracy and that free trade agreements, NAFTA and FTAA will result in greater democracy, people fail to understand because the fact of the matter is that governments are more restricted today than they were before in terms of what they are able to control and regulate. That is what Chris is concerned about, although with great respect to him, he fails to understand the connection between what is happening in the world and the ability of governments to have any bearing on it. The fact of the matter is we are in a time and a society where what we are paying is exactly what the market will bear. The notion that we can have control on prices seems to be a far off dream.
All of this reminds me of what was said by Clay Yeutter who was the U.S. trade representative in 1987-88. He said at the time the initial free trade agreement was signed between Canada and the United States that “Canadians do not understand what they have signed. Within 20 years they will be sucked directly into the U.S. economy”. That was 14 years ago, and I would say that Mr. Yeutter's projections are fairly much on target.
We have no answer to the question of more democracy. As I was trying to say a moment ago, governments are no longer able to influence the cost. We have the invisible hand of the marketplace at work.
Let me talk just a minute about the impact this has on the agricultural sector because in 1995 about 12% of total input costs were energy related. They have skyrocketed since then.
Unfortunately I do not have the tables and the information to show how much they have skyrocketed, but if we talked to any farmer in any province in Canada he or she could give us lots of facts about how much transportation costs have gone up as have fuel bills, fertilizer bills et cetera.
I believe that all these sharp increases in prices run contrary to the government's assumption that we would be and we were on a long term low cost trend in terms of gasoline and fuel products. The fact of the matter is that we have an extremely tight gas market at the moment.
As a world, we require between 8 and 8.5 billion cubic feet of natural gas every day just to stay current. There is a lot of talk about big developments in Alaska and in the Mackenzie Valley. Each of them might bring on stream perhaps one billion cubic feet of gas per day. That is when they are developed in about 10 years from now. We are only going to be standing still at the very best.
The point I am trying to make is that I do not see prices coming down. I see them continuing to escalate in the days, months and years ahead.
With respect to oil, the U.S. requires about 19.5 million barrels of oil each day to maintain all the things that run on oil. A lot of people are talking about the Alberta tar sands as being a big vast rich reserve of oil, which it is. However it is also very costly. As David Suzuki pointed out last Wednesday night at the environmental conference in Quebec City, developing the Alberta tar sands would result in about 1.35 million cars on the road each and the greenhouse gas effect that would have by developing that very costly oil from the Alberta tar sands.
Transportation is the fastest growing cause of greenhouse gases in the world. There has been an explosion in transportation over the last 50 odd years because one day's trade today is equal to about one year's trade 50 or 55 years ago.
The point I am trying to come to is that Petro-Canada was a very good idea at the time. It could still be a viable project if the crown corporation was allowed to continue to work both here and abroad. The government, with its ties to big business and the oil industry, is simply not interested in that at all. That is why we see this legislation before us this afternoon.
What is privatization? It is the commercialization, nothing more nor less, of the public sector, the part of society owned and controlled by the public through government. These include things such as medicare, schools, education, social services, pensions and crown corporations. The privatization of all that is when they are sold off and deregulated. In short, privatization basically is transferring public dollars into private hands at a profit.
From the creation of this country back in 1867, Canada relied rather extensively, probably more so than many countries certainly more so than the one immediately to the south of us, on federal crown corporations. They played a central role in the economic, cultural and political development of the country.
In 1937 Trans-Canada Airlines was created. The federal government began to restructure many of its economic enterprises into federal crown corporations. Currently there are over 40 federal crown corporations providing a vast array of services to the Canadian public and Canadian business. They range from large national enterprises, Canada Post Corporation being one, to smaller more localized operations.
Although many operate in competitive economic environments providing services which are also provided by private sector companies on a market basis, the purpose of a crown corporation is markedly different than that of private sector companies. While many, such as Canada Post, are supposed to operate on a break-even basis, it is recognized by the auditor general that surplus revenues may be used to help support non-profit oriented endeavours devoted to serving the public interest.
The public welfare orientation of crown corporations was recognized by the federal treasury board. The treasury board's president in 1998, in the annual report, evaluated crown corporations on criteria such as improving service to clients, exporting expertise and contributing to Canada's social and economic development. Profitability was never included in the list of items to be evaluated.
In 1996 the province of Saskatchewan, which I have the privilege of representing, conducted a major review of its crown corporations to determine future direction. Crown corporations form a significant part of Saskatchewan's economy, beginning with the Douglas government back in 1944, and currently make up a little more than 33% of its gross domestic product. Saskatchewan's crown corporations are some of the largest employers in that province.
Several important findings emerged throughout that review. People in Saskatchewan believed that the role of commercial crown corporations was to provide universal access to essential services. They also believed that crown corporations should be used to create employment and promote economic development.
The majority of submissions indicated that public investment through crown corporations had a major role to play in the province's economy, and that even partial privatization of these enterprises would pose a major risk to Saskatchewan's economy. Most people there believed that crown corporations were much more publicly accountable than private corporations.
Despite those findings, at the federal level in recent years we have witnessed a massive privatization of major federal crown corporations. The de Havilland Aircraft of Canada, Canadian Arsenal Limited, Teleglobe, CN, Air Canada and now Petro-Canada are but a few of the public assets which have been auctioned off to private sector investors, abandoning the long held belief that a public presence in industry resources and finance is necessary to promote broader public policy purpose objectives.
The federal government has adopted an approach based on the ideological assumption that less public intervention is an objective of state policy. Indeed under the current finance minister, the government adopted a policy of privatizing and commercializing government operations wherever feasible and appropriate. That is what we are seeing today with Cameco Corp. and Petro-Canada.
This policy framework also has been applied to justify the privatization and cutbacks in numerous federal government operations, boards, departments and agencies.
The whole point of all of this is that we need a democratic process in the country. Most of the privatization has occurred without any meaningful consultation with Canadian citizens and certainly without the support or consent of trade unions and associations representing the workers involved.
Privatization has been justified on the basis of misinformation in too many instances. Promises and commitments made beforehand were abandoned soon after the shares were sold and the investors were making their money.
The debate around privatization must be expanded to include societal values in addition to the economic consequences. Public ownership implies a sense of accountability to the collective welfare of society, which is unknown in the public sector. Public ownership implies democratic access to decision making through elected officials and representatives who are responsible to public forums.
Public ownership of major economic institutions provides governments with important economic levers to influence private sector behaviour, both in terms of investment decisions and their employment and managerial practices. The struggle to preserve federal crown corporations is part of a greater struggle to define our values and who we are as a nation.
I will branch off a little and stay with crown corporations. However I will first talk for a moment or two about the Potash Corporation of Saskatchewan which was a huge money maker for the provincial government in the late 1970s and early 1980s. It was sold off when the Conservatives came to power in the province after the 1982 election.
The Potash Corporation of Saskatchewan, PCS, still exists. It is now privately owned and makes record profits every year. What a boon it would have been to the Saskatchewan economy when the Devine government was racking up billions of dollars in losses every year and the red ink was flowing widely. The potash corporation could have been a great boon had that government had the wisdom to hang on to it, but of course it did not and it is gone now, probably forever.
The same could be said of Northern Telecom, Nortel. The Canadian market and the Toronto Stock Exchange are dependent these days on how much Nortel rises or falls. People probably do not remember that Nortel was once Northern Telecom, a crown corporation which did a lot of good for the country. It was sold off by an earlier government into private hands and is now making gazillions of dollars for a few investors some of the time. However the only benefit is on taxes paid, and it is not nearly as much of a benefit for Canadians generally now that it is in the hands of the private sector.
I will go back and talk a bit about the new higher price of energy because the bill is on energy. As these price increases reverberate throughout our economy they are causing a great deal of economic and social dislocation.
A number of commentators have reminded us that nearly all economic recessions in the U.S. over the past 60 years have been preceded by a spike in energy costs. Like a new tax or a change in interest rates, the new price of energy benefits a few and costs many others.
We have seen huge profits racked up in the oil industry in North America in recent years, particularly in the last couple of years. The energy industry worldwide is benefiting from a market in which the growth in demand has recently outstripped the growth in supply and from which spare capacity has almost vanished.
Reports in the oil and gas journals cite industry experts who predict a tight natural gas market in North America for years to come as the gas business races to replace wells that are playing out. The industry must find the equivalent of between eight and eight and a half billion cubic feet of gas per day just to stay level.
The Organization of Petroleum Exporting Countries, OPEC, is in firm control of the world market and is successfully maintaining its base price of about $25 U.S. a barrel. The gasoline market is tight because demand is high but also because just in time management techniques in the refining industry are turning out to be more profitable for individual companies than for the economy as a whole.
Officials are warning consumers in both Canada and the U.S. of price spikes for gasoline this summer. We have seen that in the province of Saskatchewan in the last 48 hours.
What does more expensive energy mean for agriculture? Agriculture uses a great deal of energy. I mentioned the figure of $4 billion in 1995 while gross farm receipts in the country were just over $32 billion. That would be in excess of 12%, and it would certainly have gone up a lot in the intervening six years.
It seems the government has been taken by surprise. It did not expect energy prices to deviate from a long low cost trend. Thus far the government's response to the critical energy situation facing North America has been to offer more, not less, energy to the Americans.
The Prime Minister's new sources of bountiful energy, the tar sands and the gas in the Beaufort Sea, will not reverse the trend toward higher energy prices. These are tremendously expensive resources in terms of both extraction costs and greenhouse gas emissions.
Massive public and private expenditures are required before additional synthetic crude or new Arctic gas can be brought to market. A $10 billion pipeline might bring a billion cubic feet of gas per day down the Mackenzie Valley, but if we compare that to the eight billion cubic feet of gas per day the industry now needs just to stay even we see the problem.
The U.S. demand for petroleum products hovers around 19.5 million barrels a day. It takes billions of dollars and several years to increase tar sands production by just 150,000 barrels per day. A supply solution to high energy prices is not in sight. Lowering demand would be a more effective route to lower prices.
Many farmers are already lowering energy consumption through techniques such as zero till, or zero tillage, to pronounce it fully. Farmers rightly look to the federal government to redirect money and effort it now spends on increasing the energy supply toward a more productive and effective investment in demand management strategy.
I listened with care to the parliamentary secretary's comments that there is no restriction on foreign ownership and no need to worry about the Foreign Investment Review Agency. Yes, we know that very well, and I think it is to the great regret of the vast majority of Canadians.
We were assured that CN and CP, particularly CN, would not be subject to foreign takeover. However we now know that the vast majority of shares in our two major rail lines, which may soon become one, are held by people who live outside our borders. I already mentioned what we saw with Nortel and the Potash Corporation of Saskatchewan.
All these points suggest that the bill, instead of being named Bill C-3, should be named Bill C-745, the faint hope clause, in the hope that none of these things will come to pass.
What is the New Democratic Party's position? We believe now is not the time to give up our last meagre interest and influence in these vital energy sector corporations. Opening the door to more foreign control of our energy sector is shortsighted and not in the best interests of Canada.
The government would have us believe the proposed changes to Petro-Canada's ownership restrictions would have no bearing on the price of refined products such as gasoline. However by giving up its last stake in the company the government would guarantee that Canadians have no voice at all in the energy sector in the future.
By abolishing the 25% cap on aggregate non-resident share ownership voting rights, the bill would ensure that Petro-Canada ends up sooner or later in the hands of foreigners.
At a time when high energy costs are hurting many Canadian industries, small businesses and low and middle income families, most Canadians want more government involvement to address the skyrocketing cost of fuel. Instead the government turns its back and walks away.
The Government of Canada sold all its shares in Cameco by 1995. In our opinion it is now, by letting go of any semblance of interest in a sector that has global implications, opening it completely and utterly to foreign control. It is for those reasons that the New Democratic Party firmly opposes Bill C-3.
