moved:
That, in the opinion of this House, the government should take action to develop the Donkin Mine as a Crown Corporation.
Mr. Speaker, I rise today to thank you, the members of this House, for engaging in debate on my Motion No. 136, requesting that the Government of Canada take action to see the Donkin Mine in Cape Breton be developed under crown control, specifically, that Donkin be opened under the control of Devco, the Cape Breton Development Corporation. I ask this House to allow me to briefly give a bit of background regarding the history of coal mining in Canada.
Many members know that our country's thriving coal industry is a source of significant benefit to the national economy. Many industries are involved in the transport and use of coal and all those which supply services, labour and equipment to mining operations rely directly on the coal fields for a large part of their income.
All of these industries and the individuals who work for them contribute to Canada's tax base. Their wages come from coal and their wages fuel the economy.
A study by the Saskatchewan Energy Conservation and Development Authority demonstrates how Canada's coal industry generates over $5.8 billion annually, or nearly 1% of Canada's gross domestic product. Over 73,000 men and women are employed in the coal industry in Canada today. That is nearly 1% of Canada's total employment. The direct contributions of coal production to the GDP and employment are significant and when the ripple effects from all other sectors are included, the economic impact is multiplied.
For example, coal is the single largest commodity transported on Canada's railways and loaded at our ports. The Coal Association of Canada estimates that ever dollar spent in coal production generates $2.36 in related industry and from income respending. Every direct job created in coal production supports an additional 3.7 jobs in the rest of the economy.
The National Energy Board of Canada predicts that Canada will generate 46% more electricity in the year 2005 than in 1998 to meet the demand caused by an expanding population and an expanding economy. Furthermore, the forecast says that the amount of electricity generated from the coal will rise by 70% over current levels.
It is true that Canada has a number of options to meet its power needs in the next century. Some provinces are looking at energy conservation measures such as promoting the use of energy efficient street lighting in order to free up a pool of electricity that could be used by homes and industry. This will slow the demand for new energy generating facilities.
There is the potential for hydro development in Newfoundland, Quebec, British Columbia, Manitoba and Alberta, but the sites are in remote and environmentally sensitive locations, making them costly to develop and placing them in conflict with aboriginal communities which have claims to the land.
Plants that harness ocean tides such as the one opened on the Annapolis River in Nova Scotia in 1984, one of the first of its kind in North America, can also be looked to for inspiration when we consider how our country can meet its changing and expanding energy needs. But the fact remains that one of Canada's most abundant economic resources available for the production of electricity is coal.
Coal mining today is not the industry it used to be. Gone are the solitary miners working the coal face with pick and shovel. Gone are miners lamps from paraffin soaked rags ready to spark off explosions of the firedamp gas leaching from the stone walls around them. Today, mining is highly mechanized and heavily regulated. Canada can be proud of an industry with some of the world's safest mining conditions and progressive environmental management.
The picks and shovels have been replaced by automated systems that have dramatically improved the efficiency of mining. One machine now does what many men used to. Few people make these connections between the light switch in their bedroom, the electricity for their TV and the coal mines deep beneath the bottom of the Atlantic Ocean.
If and when people think of coal they think of soot, of miners with blackened faces, of harmful emissions that would damage our already fragile environment.
Let us face it, there is a serious question about the pollutants that are produced from burning coal. But just as today's miners work in conditions that would have amazed the men who worked underground in the last 200 years, so too has the way in which coal was burned being changed and improved.
Clean coal technologies can reduce emissions that would hurt the environment, especially the gases that dump acids into the ecosphere, sulphur and nitrogen oxides and carbon residues that have been linked to global warming. Technology cannot solve all of our problems, but it can certainly help. Let us not forget that we are building on a natural resource, naturally occurring coal, so that there is none of the environmental damage caused by processing or refining the product before it can be used.
Another sea change in the industry has been the huge reduction in the number of coal mines across Canada. In the 1930s there were 400 small coal mines. Today there are only eight companies operating a total of 29 mines. One of those eight producers is the crown corporation called Devco, the Cape Breton Development Corporation.
I can say with pride that Devco employs the best miners in the world. They are men who have mining in their blood who belong to families that have seen grandfathers and fathers and sons go underground just as my father and grandfather did. They are men who fought the vicious excesses of the private coal companies and who were trampled by the horses of the police and the army who acted as the private security guards for the coal company.
Not many people outside Cape Breton know that we have a unique holiday. On June 10 every year we remember Davis Day, the day when a miner was shot by company police after a peaceful demonstration. We have a long history of struggle, of fighting for fair wages and safe working conditions, and we will keep on fighting.
My preamble stresses the important role these men have played in Canada's history and the important role I hope they will continue to play in the future. Those Cape Breton miners are today looking to their crown corporation. They want to continue to do what Cape Bretoners do best, work hard and work honestly in the craft that has defined the economy of my island for centuries. They want to provide the power to run the computers, fax machines and office buildings that keep the new economy moving forward. They want to do their fair share.
Devco was founded in 1967 by an act of Parliament and is wholly owned by the government. All of its $325 million in assets are located on Cape Breton Island and Devco remains the largest producer of coal in eastern Canada.
With over 1,300 employees it is also one of the largest industrial employers in the region. At present, Devco operates two collieries, Phalen Mine and Prince Mine and all of the supporting infrastucture that enables Devco to take Cape Breton coal and sell it around the world.
In 1996-97 Devco sold 2.4 million tonnes of coal which yielded revenues of $167 million. It is apparent that Devco's contribution to the national coal industry is significant. Its contribution to the Cape Breton economy, which sees an extra $200 million a year thanks to Devco, is huge. Devco is one of the few large employers in industrial Cape Breton and jobs supported indirectly by the corporation's activities employ thousands more. When we look at the economic climate on my island it becomes pretty clear pretty quick that Devco's success and Cape Breton's success are one and the same.
Four hundred and fifty people work at the Prince Colliery, eight hundred at Phalen. Imagine the impact on industrial Cape Breton's already skyrocketing unemployment rate, a rate that is currently in the range of 35% to 40%, if Devco ceased to exist. It would take thousands and thousands of jobs with it. Even with the mines operating there is an expectation that 300 men will retire from Devco over the next three years, not to be replaced. Meanwhile all of our young people are leaving, there are no jobs and even their parents are joining the unemployment line. It takes time and money to train miners and the will to renew and rejuvenate the workforce simply is not there.
I will provide the House with a background of Devco's history. The Cape Breton coal fields were taken under crown control in 1968 when the Dominion Steel and Coal Company, better known as DOSCO, decided to conclude its decade-long attack upon the people of Cape Breton by abandoning the island altogether. Realizing the chaos this would cause, the government stepped in.
Initially Devco was supposed to supervise the slow shutdown of the coal industry over a 15-year period while it would help the workforce find new jobs in new fields. Then the oil crisis loomed and suddenly Canada needed the Cape Breton coal miners again just as it needed them during the first and second world wars.
Now, instead of phasing out coal production, Devco was put in charge of drawing up a 20 to 25 year plan that would promote a stable industry which would benefit both Cape Breton and the rest of Canada.
Now 25 years later there are just two mines operating in Cape Breton and the same Liberals who promised a stable industry when in government and in opposition are now back making plans on how they can shut down the coal fields. Despite this, Devco has become more efficient and more effective. Management and labour have worked together to make Devco deliver the goods for as little money as possible. Both the United Mine Workers of America and Devco's management deserve credit for this.
For example, in Prince mine, the deeps—the main shaft leading from the surface down to the coal face—have been realigned to make better use of the coal deposits. Meanwhile, Phalen mine has been plagued with problems caused by rock and gas outbursts, heavy roof conditions and flooding. These problems have all increased the cost of Devco coal, despite the hard work of the employees who worked overtime to get the mine back into production.
In many ways we are back to where we started in 1968, but the reasons Devco should exist are even more valid now than they were then.
There is hope. There is a contingency plan in case the problems with the Phalen mine become so severe that it has to be closed early. The contingency is the Donkin mine.
Donkin is the future of Devco and Devco remains the future of Cape Breton.
In June 1996 the then minister of natural resources said: “Donkin is related to hope. Everybody wants and needs hope”. It is not often that I agree with the Liberal government, but today I am happy to stand and endorse the then minister's statement.
Donkin is a huge coal reserve beneath the Atlantic. In 1981 Kilborn Engineering estimated that there were 1.4 billion tonnes of mineable coal off Cape Perce. The mine itself has already been built, at taxpayer expense. Two gun barrel smooth tunnels and engineering studies have been completed by the Government of Canada. The geology looks good and the quality looks even better.
An annual production of 3.8 million tonnes is feasible once Donkin goes into production.
Associated Mining Consultants has endorsed the forecasted success of the mine. It says that minimal surface facilities would be needed for a small scale operation at Donkin.
Selective mining could be undertaken during a trial period with, say, 500,000 tonnes mined annually. That could be expanded once it is clear that a profit can be made.
Donkin is the gold mine of coal mines. It should be opened by the same people who built it, the Cape Breton Development Corporation, acting in the interests of the people of Canada.
Our government has made substantial investments into the coal industry and today, by committing to opening Donkin as part of Devco, we can start the process that will see Canadians getting a return on their investment.
Not only have the taxpayers already paid to build Donkin, Devco also has most of the assets it would need to open the mine sitting idly at its abandoned site at Lingan. There is $8 million worth of equipment, ready to be used, sitting and rusting. Canadian taxpayers have already spent $88 million on Donkin.
While it is true that development has no immediate effect on production, the fact that it has gone well is a good indicator that the mine will be a good one.
In 1985 Associated Mining Consultants reported to Devco that the Donkin mine could be brought onstream at 500,000 or one million tonnes per year. That would generate $118.7 million and $170.3 million, respectively.
Mining experts from the union today are saying that current conditions could mean reduced capital requirements, which in turn would mean increased profits.
Here is a quote from the report “The Donkin-Morien Mine: Building the Mine of the Future”: “Production of 4.507 million tonnes per year is considered possible and economically feasible”.
I repeat that it is the gold mine of coal mines. Devco was right when it said in 1992 that Donkin mine is a valuable asset for the long term. The Donkin tunnels give us access to the great riches of the Sydney coal field, a great Canadian asset as important as the Alberta tarsands or Newfoundland's Hibernia. As we once again begin to talk of the new energy sources, be they the planned Sable pipeline or the nuclear reactors this government is keen to give China, it is critical that we do not forget the resources that have always been the backbone of our energy grid.
In time of war and crisis—