May 1, 1950

CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

What was the date of that letter?

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PC

Howard Charles Green

Progressive Conservative

Mr. Green:

This letter was dated April 4, 1950. In the committee we had the opportunity, or I had the opportunity, of crossexamining Mr. Dixon who, as I said before,

Alberta Natural Gas Company is to be the president of this company and is also the president of the parent company known as the Northwest Natural Gas Company. I asked him this question:

Will you give any pledge to this committee that your company, if it is incorporated, will build the Canada-first line, build a main line through Canada to the west coast?

A. No.

And it was, not said with any hesitation by Mr. Dixon. I continued:

Q. Mr. Dixon, that is clear-cut and we are glad to have that statement but I ask you if in your talks with the Right Hon. Mr. Howe, the Minister of Trade and Commerce, that is the stand you have taken?

A. Just exactly; I have not said anything to Mr. Howe I have not said to you.

Q. Mr. Howe wrote a letter to the Vancouver city council on April 4 of this year, in which he said:

And then I quoted the paragraph above and continued:

Now, you dispute that, the terms of that letter by Mr. Howe?

A. I told him just what I told you, that we had the five routes, that we would1 build any line we would be permitted to build; that the board of transport commissioners told us that we would be permitted to build. If the board of transport commissioners tells us to build the all-Canadian route that will be the line that will be built.

Of course that is an entirely different story from the story given by the Minister of Trade and Commerce to the city of Vancouver.

Q. Did you assure Mr. Howe that you were going to build an all-Canadian route?

A. I wish we could have assured him that we were going to build any line.

Q. So you did not assure him you were going to build an all-Canadian route?

A. Well, we said we would build an all-Canadian route if the board of transport commissioners selected it. He was perfectly correct in his statement.

Q. If you were ordered.

A. If we were ordered.

That shows that either the one or the other of these men was making misrepresentations. I am afraid there is not any doubt that the Minister of Trade and Commerce, throughout that paragraph in that letter to the city council of Vancouver, was setting out or making statements which were not in accordance with the facts.

In considering this bill in committee of the whole house, now that it is back from the standing committee on railways, canals and telegraph lines, I suggest that we should bear in mind the fact of this action, which appears to have been one of misrepresentation in so far as the statements made to the city of Vancouver were concerned.

There is one other fact I wish to bring out in connection with this first clause of the bill and it is this. This clause lists the applicants for incorporation. Before the bill went .to the committee on railways, canals and

telegraph lines, I said that the spider in this web was Morgan, Stanley and Company of New York; that they were the power behind the throne, that they were the people financing this whole plan and that they in effect had and would have control of the company.

I would point out that we were able to find out in the committee that one of the applicants for incorporation, Mr. Cortelyou Ladd Simonson of the city of New York in the state of New York, investment banker, is actually one of the partners of Morgan, Stanley and Company. He is the only representative of a financial house who is listed among the applicants for incorporation and he is to sit on this board representing that financial house.

I will have something further to say with regard to this set-up as we proceed with the discussion, but the fact was made clear by Mr. Dixon in the committee that Mr. Simonson is a partner of Morgan, Stanley and Company and that he is to sit on the board of this new company representing that financial house.

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LIB

George Prudham (Parliamentary Assistant to the Minister of Resources and Development)

Liberal

Mr. Prudham:

For many months past we have listened to hour upon hour of talk about the Alberta pipe lines. I did not previously have anything to say because I did not want to be a party to a filibuster which in effect was, in my opinion, designed to create a monopoly for one company which was fortunate enough to have been granted a charter by a previous parliament. That pipe line company was given a charter to build gas pipe lines within and without Canada. In justice, this parliament cannot do otherwise than grant the same privilege to the more recent applicants.

Although a great deal of the time of this house was wasted during the time allotted to private bills for the last several months, I would not say that the time was entirely wasted because many good arguments were advanced to prove that Canadian needs should be served first. I believe that everyone in this house is of the opinion that Canadian needs should be served first. Coming from Alberta, and from Edmonton which is the centre of the new oil and gas development, I am greatly concerned about the disposition of our immense resources. I have lived in Alberta for the last twenty years. Many times during that interval I have been prompted to think that many people look upon Alberta as a good place in which to sell farm machinery and other manufactured products, to sell life insurance and to lend money at high rates of interest, with little thought for the welfare of that part of the country. Alberta has been discriminated against for years, in my opinion, by adverse

freight rates. Alberta is at the apex of the freight rates structure. These comparative high freight rates have always been a deterrent to the development of Alberta. Now, by a turn of good fortune, great natural resources have been discovered, the great natural resources of gas and oil, and they are now being developed. These resources are being developed by private enterprise. Many local and foreign companies are now engaged in the fascinating search for oil. A potential billion barrels of oil have now been proven and at the present rate of exploration it is expected that by 1951 two billion barrels of potential oil production will have been proven. That is enough to serve Canada's needs for the next twenty years. Potential gas reserves are now measured not by millions but by trillions of cubic feet.

Alberta, and especially Edmonton, is the most talked of district on the continent. These great resources of oil and gas have been placed there by Providence, and the people of Alberta cannot take any special credit for them. Indeed it is fortunate that we have a measure of control over these resources.

The province of Alberta also has about one-twentieth of the world's known coal reserves. These coal reserves are as yet only partially developed. My information, however, is that 10,000 people in Alberta depend directly on the coal industry for their livelihood. This coal is marketed largely outside our province. When the Alberta government is considering the granting of permits for the export of gas, I hope that they carefully consider the effect of the export of this gas on our markets for Alberta coal.

The people of the lower mainland of British Columbia are extremely anxious to get Alberta gas. Pipe lines to convey that gas to the Pacific coast and elsewhere will cost hundreds of millions of dollars. It is my opinion that governments and industry should carefully consider the advisability of establishing industries in Alberta at the source of the cheap power rather than spending millions of dollars on expensive pipe lines to serve industries in other parts of Canada and the United States.

Especially with the constant threat of a third world war, both this country and the United States should plan to disperse heavy industry so that our continent cannot be knocked out by a surprise attack on the heavily concentrated industrial areas of the east and west.

If we can believe press reports, Russia long ago recognized the value of this strategy and began to establish industries deep in the interior-away from the reach of potential 55946-1311

Alberta Natural Gas Company invaders. Our own country and the United States, in my opinion, would be well advised to do the same.

Where in Canada have we a better place to establish branch factories and new industries than in Alberta? That province is protected on the west by the Rocky mountains and on the north by strong United States defences and the wastes of the Arctic. However, despite the fact that Alberta has been fortunate enough to fall heir to a measure of control over these great resources, we must share these resources with the rest of Canada, and with the United States, with our Canadian neighbours first, and secondly with our United States neighbours, and only after Alberta's needs and Canadian needs are adequately protected.

During the past week a committee of this house heard evidence from experts representing companies desiring charters to construct pipe lines for Alberta gas to our own Pacific coast and to the United States northwest. The people of Vancouver and the lower mainland are exceedingly anxious to be served by these pipe lines, before any surplus is exported to the United States. I think that we are all agreed that this is highly desirable. The company which has already received the charter has explored different routes and has now unofficially stated that they favour the building of a pipe line through the Yellowhead pass to the Pacific coast, with extensions to the United States northwest and to the south. Other companies, who are seeking charters, have indicated several proposed routes mostly in United States territory, with one proposed Canadian route, which parallels the international boundary line. Neither of the new companies now seeking a charter has yet made a survey of the Yellowhead pass, but both companies have indicated that they will do so before applying for licence from the Alberta government and the board of transport commissioners.

Evidence given would indicate that the United States routes for the pipe line are somewhat cheaper to construct but by following those routes United States cities will be served by the pipe line first with Vancouver and the lower mainland on the end of the line. From the evidence presented, the Yellowhead route is approximately the same length from the gas fields of the Edmonton district to Vancouver, as the alternate route in the south of the province is from the southern fields of Alberta. The Yellowhead route has many advantages over the southern route. Some of the advantages of this pass are that it is well within Canadian territory and there would be no international complications until the needs of our Canadian Pacific

Alberta Natural Gas Company coast have been served. The Yellowhead pass is the most accessible pass in the Canadian Rockies. It is the pass used by the Canadian National Railways. On that route are beautiful Jasper Park, Mount Robson, Kamloops and populous Fraser valley. That route taps the great oil and gas fields of the Edmonton district. It is midway in central Alberta. It will be accessible and within reasonable distance from the potential gas and oil fields of the Peace river country. Any gas line that is built to the Pacific coast or southward will have to depend on a grid collection system, connecting all Alberta gas fields. This route has the advantage of connecting to this grid system about midway of the proven and potential gas-producing areas.

Evidence given by an expert representing one company seeking a charter last week was to the effect that a railway paralleling the gas line would contribute to cheaper construction cost, and also that a highway paralleling the gas line would greatly reduce costs. Evidence was also given that the pipe line must be served by an all-year highway of some kind, for construction as well as year-round maintenance.

The Yellowhead route has comparatively light snowfall and although a highway has not been built through that pass, there is a trail which has been used by automobiles which could be developed into a first-class highway cheaper than any other pass through mountains. The people of central and northern Alberta, Saskatchewan and Manitoba are very anxious to have an all-weather road to the Pacific coast. The construction of a gas line through this pass would of necessity require a highway which would serve the people of the prairie provinces and make possible a year-round highway for access to the Pacific coast.

I am very doubtful if year-round traffic will be possible over the other highway routes which are now contemplated through the mountains. Even though the cost of a pipe line through the Yellowhead pass should be proven higher than a pipe line on United States soil, we must weigh carefully the advantages of the all-Canadian route. One reason these advantages cannot be overlooked is the fact that, if and when the great cities of the United States northwest are served by Alberta gas, a highway paralleling a gas line from Canada will have a great attraction to tourists.

The Yellowhead route would bring United States tourists a long way into Canada. The further they come into Canada the more United States dollars they spend in Canada. I am convinced that a highway paralleling a gas line throughout the Yellowhead pass

would soon earn enough tourist revenue to offset any difference in original cost. The Yellowhead route has the additional tourist attraction of our string of national parks, which would then be accessible, Mount Robson, Jasper, Banff, Elk Island, Prince Albert national park and Riding Mountain national park in Manitoba.

The construction cost of the pipe line through this route should be less when accompanied by a highway. The cost of the construction of a highway should be less because of the construction of a pipe line. Both of these projects would be aided by the fact that the railway parallels the route. If the people of the Pacific coast really want Alberta gas before it is exported to the United States, I am surprised that they did not give these possibilities and advantages more consideration when locating the British Columbia section of the trans-Canada highway. Evidence produced shows that it would be rather difficult to serve Trail and certain towns in the southern interior of British Columbia by the Yellowhead route. My opinion is that, if and when the Alberta reserves of gas warrant extensive export to the United States, a return pipe-line loop should be built-possibly through United States territory-connecting with the southern end of the Alberta grid system.

This would be an insurance against interruption of service for all users, which would have a tendency to greatly increase the volume of sales. In the early days of gas service in Edmonton, when the city was depending on one line, the service was interrupted by breaks with disastrous results in cold weather which discouraged people from converting from coal to gas for many years, until duplicate lines were installed and confidence restored.

I know the argument will be used that connecting the southern loop of this system would cost money. I am sure that industries and domestic users would be willing to pay more for their gas to be adequately insured against interruptions of service.

If and when this becomes an accomplished fact, the people of Trail and southern British Columbia can be served by stub lines. The committee was told by certain witnesses that the city of Trail has a potential market for almost as much gas as Vancouver. However, the evidence was also given that if Trail is served by gas the gas will largely replace fuel oil. Alberta has a surplus of oil for which we must find markets. Why be in a hurry to destroy our markets for oil?

Mr. Chairman, many speakers argue that, although one company has already received

a charter to build pipe lines within and without Canada without restriction, we should not perpetuate that mistake by granting the same privilege to others.

The Alberta government has a measure of control over the export of gas, as also have the board of transport commissioners and the Department of Trade and Commerce. I am sure that Canadian interests will be well protected, and besides these controls which are vested in our governments and government corporations there is in my opinion an overwhelming public opinion which demands that our Canadian needs be met first.

During the last month it has been rather puzzling to me to understand why the Progressive Conservative party, who are the so-called proponents of private enterprise, have been party to a filibuster which would create a monopoly for one company, and also that the C.C.F., who are supposedly in favour of public enterprise, have given their support to a filibuster which, if successful, would create a monopoly for that private company.

I am supporting this bill because I do not believe parliament should be a party to creating a monopoly for one company.

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CCF

Herbert Wilfred Herridge

Co-operative Commonwealth Federation (C.C.F.)

Mr. Herridge:

Mr. Chairman, I wish to make a few remarks on section 1 of this bill to incorporate Alberta Natural Gas Company. I might say before proceeding that this debate occurs on a date replete with historical significance. I think this day might be termed British Columbia's May day protest day. I do not offer any apology for continuing to protest concerning this and other bills, until they are amended so that, whichever company gets the charter, we will have an allCanadian route to Vancouver, from one direction or the other.

The hon. member for Vancouver-Quadra nearly thirty-six years ago stood side by side with me facing a common enemy who was determined, if he could, to impose his will upon us. Today we stand side by side facing opponents who are determined to impose their will upon us if they can, and to impose their will upon the great majority of the people in British Columbia. Thirty-six years ago, Mr. Chairman, we won our objective. I am of the opinion that today, or in the days to come, so far as this bill is concerned-or these other bills-history will repeat itself. In fact, I am firmly convinced of that because, in the first instance, we were standing for democratic principles, and in this instance we represent the majority of opinions and views of the people of British Columbia.

As a member of the committee on railways, canals and telegraph lines-and I think in future it will possibly add pipe lines-I wish

Alberta Natural Gas Company to support the remarks of the hon. member for Vancouver-Quadra with respect to the manner of carrying on, shall I say, the business of that committee. During the lengthy debate that has occurred in recent months in connection with these pipe line bills we have been told repeatedly by members on the government side of the house that we should cease carrying on debate and should allow the bills to go to committee, and that in committee we could ask any questions we wished.

I recall that, from previous experience, I had always found when we got a bill into committee we were on the skids-and we jolly soon found we were on the skids when we got into that committee. I think the remarks of the hon. member for Vancouver-Quadra, when he objected to the, shall I say, impropriety of the sponsor of the bill being a member of the committee, were quite correct. His opposition was correctly taken, and I support him in it. I am of opinion that no fair member of the committee who has time to look at the question in an objective way could say that the sponsor of the bill acted according to democratic principles in that committee.

I would say without doubt, and I think that privately at least some government members on the committee would support me, that the hon. member for Winnipeg South Centre dominated that committee, and as sponsor of the bill steered the action of the committee through the majority behind him. I take strong exception to that, and support the remarks of the hon. member for Vancouver-Quadra in that respect.

The committee had sat only a few hours when there was a mention of saving time. The first witness, Mr. Connolly, was asked to be allowed to stand down so that Mr. Dixon could be questioned, because it was thought that that would save time. We have the evidence of the technical expert-and I must give credit to Mr. Dixon as an excellent witness; I am not blaming the representatives of the natural gas company before the committee at all, for anything. They were courteous and answered the questions very well indeed.

It was suggested however that we ask Mr. Dixon the questions first so as to save duplication, and the assurance was given the committee that if members wished to ask Mr. Connolly the questions later, he would be recalled to the stand. In that instance the promise was not carried out. Mr. Dixon was questioned and, when the questioning was completed so far as Mr. Dixon was concerned, several members of the committee

Alberta Natural Gas Company who had waited two days for an opportunity to question Mr. Connolly on legal matters were denied their opportunity.

On Thursday the sponsor of the bill, the hon. member for Winnipeg South Centre, moved what was in effect a motion of closure, to shorten the questioning of the witnesses. That closure motion was carried, because of the majority on the committee behind the sponsor of the bill. As a result of that motion carrying, several members on the committee did not have the opportunity to ask either Mr. Dixon or- Mr. Connolly important questions they had wished to ask.

I put it to the committee this way: these

bills represent an investment in Canadian natural resources to the extent of between $75 million and $100 million, before the projects are completed. This committee of the House of Commons, dealing with a subject that may affect the whole course of the development of British Columbia for generations to come, because of the government majority thereon, was permitted to spend not more than twelve hours discussing the bill and asking questions on an important matter representing an investment of from $75 million to $100 million in Canadian natural resources. I ask the house to look at this matter in all fairness, and particularly members from eastern Canada who may be under the impression that we are carrying on a filibuster out of pure cussedness, shall I say. We are trying to present the point of view of the people of British Columbia. The members of the committee who are presenting that point of view are firmly of the opinion that we did not have an opportunity to perform our duties properly in the committee because of the government majority supporting the tactics of the hon. member for Winnipeg South Centre, the sponsor of the bill.

I oppose the bill on several grounds. I am not going to go into all of them tonight. I oppose it first of all, and I have no hesitation in doing so, on the basis of the principle that I believe the use of Canadian natural resources should be first assured to the Canadian people. I think that is a reasonable proposition and one that members of all parties should support. From the evidence given to the committee I am quite convinced that the use of these Canadian natural resources has not been assured to Canadian people first. For instance, when Mr. Dixon, the very capable engineer representing this company, was questioned as to the amount allocated to the large city of Vancouver, he replied in effect that the amount being allocated was less than the present domestic use of gas in the city of Calgary. No one can say that is an adequate provision for Canadian

[Mr. Herridge.l

requirements in the city of Vancouver, and without any possibility of expansion in the future. The gentleman in question said that the pipe line program was being designed to operate in the first five years at about 75 per cent capacity. Therefore on that basis if the people of Vancouver are going to have less gas than the city of Calgary is using at the present time for domestic purposes, and are then going to get some proportion of the remaining 25 per cent that it is expected will be developed, you can see that the final provision for the city of Vancouver is not more than the present use in the city of Calgary.

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SC
CCF
SC

John Horne Blackmore

Social Credit

Mr. Blackmore:

What reason did Mr. Dixon give for the estimate that Vancouver would only receive so small an amount of gas? There is enough gas, is there not? What is he intending to do with all the gas available if Vancouver is not to obtain its share?

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CCF

Herbert Wilfred Herridge

Co-operative Commonwealth Federation (C.C.F.)

Mr. Herridge:

I cannot remember the exact reason given at the time.

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PC
CCF

Herbert Wilfred Herridge

Co-operative Commonwealth Federation (C.C.F.)

Mr. Herridge:

I do not remember the reason. I was going to say that quite an unusual procedure was followed in connection with these measures. Members of the committee had their first meeting on Tuesday, the 25th of April last, and this is Monday, May 1. To date we have only had the printed evidence of the first meeting of the committee and that has to do with the C.P.R. bill. We have not had an opportunity to study the evidence as to the measure now before us and to be quite certain of the answers to questions. I think we should have had that evidence on this most important matter if we want to be fair. I do not want to be unfair to Mr. Dixon, Mr. Connolly, or any member of the committee. Therefore I am not able to say exactly what answer was given, because I do not remember it. Generally speaking, however, I remember that Canada was to receive about 25 per cent of the total gas to be carried through the pipe line.

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PC
CCF

Herbert Wilfred Herridge

Co-operative Commonwealth Federation (C.C.F.)

Mr. Herridge:

Twenty per cent of the total amount of gas going through the pipe line, and 80 per cent was to go to the United States. Only yesterday I was reading of the measures that are being taken in the United States to conserve natural gas because they believe that in from 25 to 30 years the supply of natural gas in a number of areas in that country will be exhausted. We must realize

what an Important part we are playing in the industrial development not only of British Columbia but of all Canada when we realize that possibly the greatest reserves of natural gas on the North American continent are in western Canada. Yet here we are at the present time failing to provide for the needs of Canada now and in the future.

When Mr. Dixon gave his evidence to the committee he brought to their attention five routes and provided the committee with a plan of what is known as route A, which is an all-Canadian route proceeding just north of the international boundary from Pincher Creek in Alberta, where the grid system ends, to Vancouver on the Pacific coast.. Then there was route B, which enters the United States; route C, which provides for a loop into the United States between Kingsgate and Trail; route D, which is partially in the United States and partially in Canada; and route E, which also provides another loop into the United States, the remainder of the line being in Canada.

In listening carefully to the evidence I was struck by this point. I am firmly convinced, and I think other members of the committee are, that the promoters of this company were considerably influenced by the debate in this house. I am firmly of the opinion that in the original instance the United States route was the only one being considered. I think all the plans were drafted with that in mind. My impression from listening to the evidence is that exact, close and careful calculations had all taken place in connection with route B, the United States route. That is the one that the company had in mind to build. As a result of the opposition expressed by members of parliament to a partly United States route, and the obvious opposition expressed in the legislature of British Columbia, by newspapers and public bodies of all types, I believe the promoters of the company said something like this: Well now, we will have to go through the motions; we will have to provide five routes to present to these people and we will tell them that we will buld the route we are ordered to build.

I am not convinced, Mr. Chairman, that the situation is what it appears to be on the surface. I had a very strong feeling, and I think other members of the committee also had it, that the company was going through the motions of presenting five routes and then saying: We will build the route that the board of transport commissioners orders us to build. I am of the opinion that when the board of transport commissioners come to deal with a matter of this importance they should not only accept evidence presented

Alberta Natural Gas Company by engineers of this or other companies. This question is big enough for this government to have some check made by its own engineers. I can well understand that before the transport board these other gentlemen naturally will want to support their case, and they will give evidence that will make it appear that the poor consumer in Vancouver is going to suffer if we have an all-Canadian route. They will make sure the costs appear high, naturally. They will not balance one factor against another.

In committee we were told that the cost to the consumers in Vancouver might be increased by from $750,000 to $1 million a year if an all-Canadian route were followed. When you deal with a figure like that you should know the number of people who are going to use gas, and you should weigh the other factors that are going to benefit Canada, such as the large maintenance staff, the extra taxes that will be paid to both the provincial and federal governments, and so on. Then we in the committee felt there should be some regulatory power. This company is obtaining a federal charter, and the public utilities commission of British Columbia cannot regulate its tariffs and tolls. I believe all members of the committee in opposition to these bills believed we should have some federal regulation which would make certain that the consumers of British Columbia got their gas at a reasonable and proper cost; and I am quite sure those members of the committee who take the point of view I am expressing tonight will agree that no figures were presented with respect to the cost of any route, or as to the cost to the consumer in Vancouver, which would indicate that by proper management and proper government action we could not have an allCanadian route which would supply gas to the coastal area at reasonable and proper rates.

I was also impressed with the fact that the plans of this company were based on a United States route, leaving Canada at Kingsgate, rather than an all-Canadian route. Another point struck me in connection with the correspondence that was read during Mr. Dixon's evidence. He produced letters to show that the company intended to purchase Canadian material, steel and other products. There was one letter from a steel company in Canada replying to a letter from the pipe line company asking if the steel company could provide steel for four hundred miles of pipe. They replied giving a general quotation per ton. The point I make in that respect is that the fact the pipe line company asked for a bid on four hundred miles of pipe indicated to me that this steel was required for the pipe necessary to carry the line from Alberta

Alberta Natural Gas Company to Kingsgate. That to me makes it plain that their plans were based on the United States route. In addition I noticed that all those letters were of recent date, late March, early April, late April. They had been gathered together quickly, to show us that these people were really interested in Canada, and that they were going .to buy all these materials here. None of the letters had been written last session. These people put on a very good show of giving us an opportunity to choose one of five routes, and in trying to convince us that naturally they were going to buy Canadian materials and, if so ordered, would build the route in Canada.

I am still opposed to these bills unless they are amended. I want to quote the remarks of the Minister of Trade and Commerce in reply to questions asked by the hon. member for Yorkton and the hon. member for Fraser Valley, to show the lack of definition and, shall 1 say, the doubt in our minds. At page 791 of Hansard for March 16, 1950, I find this:

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LIB

Alan Carl Stewart

Liberal

Mr. A. C. Stewart (Yorkton):

I should like to

direct the following questions to the Minister of Trade and Commerce. Have any representations been made to him by the C.C.F. government of Saskatchewan with regard to protecting Saskatchewan so far as export of oil and gas from Alberta is concerned? What is the policy of the minister with regard to the granting of permits for pipe lines from Alberta to the United States?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Right Hon. C. D. Howe (Minister of Trade and Commerce):

The answer to the first question is

that I have no knowledge of any representations from the province of Saskatchewan in that connection. In answer to the second question I would say that I spoke on this subject at the last session of parliament, and pointed out that the Electricity and Fluid Exportation Act is designed to protect Canadian consumers. It is necessary under the act for the Minister of Trade and Commerce to give a certificate to the effect that the present and foreseeable future needs of Canada are protected before any exports of electricity or gas are permitted. It has been suggested frequently in the current debate that gas will be sent to the United States from the pipe line before the pipe line reaches Vancouver. I stated last session that that would not be permitted. I know from discussions with the sponsors of the pipe line that it is not proposed to undertake any such export.

The hon. member for Fraser Valley was not present at the time the question was asked, and wanted the matter clarified. So on March 17, at page 850 of Hansard, he asked this question:

I should like to direct a question to the Minister of Trade and Commerce. I was not in the house yesterday when the orders of the day were called, but I note that the minister is reported on page 792 of Hansard as having said:

"It has been suggested frequently in the current debate that gas will be sent to the United States from the pipe line before the pipe line reaches Vancouver. I stated last session that that would not be permitted. I know from discussions with the sponsors of the pipe line that it is not proposed to undertake any such export."

Am I to understand from that statement that no export permit will be granted other than through an all-Canadian route?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Right Hon. C. D. Howe (Minister of Trade and Commerce):

Several members of the house have

given information that they obtained from the principals behind the bill, and I have given information that I obtained from the principals behind the bill. I might say that I cannot understand the unnatural fear that certain hon. members have of letting these men come before a committee of the house where members of the house could find out what they intend to do.

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LIB

George Alexander Cruickshank

Liberal

Mr. Cruickshank:

I take it the minister is not

going to answer my question. Is that correct?

We must bear in mind those statements together with the letter read this evening by the hon. member for Vancouver-Quadra, written by the Minister of Trade and Commerce to the clerk of the corporation of Vancouver, in which it was emphatically stated that the sponsors of the bill had assured the minister that the line was to proceed on Canadian soil, or words to that effect. In view of those apparently definite statements and in view of the answers given by Mr. Dixon on behalf of the company, as outlined by the hon. member for Vancouver-Quadra, would any average person say we were unreasonable in doubting that in reality one of five or six routes is going to be chosen and that all these routes are being treated on an absolutely equal basis at the present time? The members of the committee who are in opposition to these bills are definitely of the opinion that certain interests are very much in favour of that route going through the United States; and we are also of the opinion that the examination before the committee and the proceedings of the committee were just a form of going through the motions. Because we believe that and because we are determined to do the best we can to protect the rights of the people of British Columbia, as well as the rights of the Canadian people, we are determined to oppose these bills, unless they are amended so that those rights are protected now and in the future.

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LIB

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

I should like to say a few words on this bill at this time. In view of the fact that I am a parliamentary assistant, I should state that I am not speaking either for or against the government, but I am speaking as the member for Coast-Capilano on a private bill. I have only spoken once in two years in this pipe-line debate, because I did not want it inferred in any way that I was taking part in what certainly appeared to be a filibuster, since the same information was repeated again and again.

When I spoke a year ago, I said that I would vote for these bills on second reading so that we could have the actual facts obtained before the standing committee, not

secondhand facts through members of this house who were in favour of or opposed to these bills. I wanted the facts obtained from professional men who had the technical qualifications to be listened to with respect, with regard to both the supply of gas and the feasibility of a Canadian route. Almost everyone who has spoken in the house has given some sort of lip service to an all-Canadian route, the only question being whether or not such a route is economically feasible. I must say that having finally got these bills to this committee, I was extremely disappointed in its proceedings. I was not a member of the committee, but I would have liked to be. For part of the time I was busy on budget matters, but I did attend committee meetings as often as I could, as members who were there will recall. I also followed the proceedings of the committee in the press.

It was my hope that some accurate technical information would be obtained from people other than those putting forward their own case for acquisition of a charter. I was hoping especially that someone would have called the employee of this government who is the greatest expert on oil and gas in Canada, Dr. Hume of the geological survey branch. A year ago I attended a convention of the Canadian Institute of Mining and Metallurgy in Vancouver, that is the professional body of the mining men and geologists in Canada. The second day of the convention was given over to a discussion of Alberta oil. All the geologists of the large oil companies and other experts were there, but Dr. Hume was chosen as the keynote speaker. In that gathering of men he was introduced as the man who knew most about gas and oil in Canada. It is a great pity that the committee did not have the benefit . of Dr. Hume's opinions as they were expressed that day as to the tremendous amount of gas which was available, and other factors in connection with gas and oil development.

I was sorry, too, that the original pipeline company, the Westcoast Transmission Company, who at various times have alleged that an all-Canadian route is economically feasible, were not called back before that committee to refute the evidence of those two other companies who put forward their plea. According to the two companies the all-Canadian route, while perhaps physically possible, was not economically practical. There are two or three quite obvious reasons why we should not perhaps worry about the arguments put forward by these other two companies to show that such a route is impractical. To begin with the engineering point of view, a railroad, a road, and a pipe Line are difficult to build in that order. A railroad, of course, with its gradual curves

Alberta Natural Gas Company and grades, is a most difficult engineering feat. A road, with its sharper curves and sharper grades, is less difficult, and a pipe line can be built almost anywhere, since the grades and curves are not of the same importance and little right of way is needed.

Across British Columbia, which has been described again and again as a wilderness of mountains, we have today three transcontinental rail lines, and two main road systems. No insurmountable difficulty has been found in building those, and it is a much more difficult engineering feat to take them through these mountains than a pipe line.

Then, this question of cost was raised by Mr. Dixon. He said that the Canadian route along southern British Columbia through the Crowsnest pass was feasible from the engineering point of view, but it would cost $17 million more. He just picked that figure out of the air, and there was no substantiation given for it. He tried to leave the impression that the mountains of British Columbia suddenly stop at the international boundary, and that Washington is one great plain south of the boundary across which construction would be easy. He actually used that expression, "crossing the great plain of central Washington". Hon. members have crossed Washington in their cars, and know that there is no great plain in the centre of Washington. The same mountain ranges that traverse British Columbia also cut across Washington. As a matter of fact, two out of the three passes in Washington are higher than the passes on the Canadian side.

Then this man went on to say that this $17 million would result in an extra cost of about a million dollars a year to the consumer in Vancouver. I also heard him give evidence to the effect that Vancouver would take only one-sixth of the gas. An extra million for one-sixth means an extra six million to be paid to finance an extra capital investment of $17 million. These figures make it easy to understand their eagerness to get into this pipe line business, when you can get an annual return of $6 million on a capital investment of $17 million.

I must confess that throughout this pipe line debate, right from the time it entered the house first, my greatest disappointment has been the attitude of the Canadian Pacific and Canadian National Railways. My colleague the member for Comox-Alberni mentioned this a year ago when he voted against a pipe line bill. These two companies, after all, are the backbone of the transportation industry in Canada. They are in rail transportation, in air transportation, in deep sea and coastal shipping, and today they are even in the truck and bus transportation business. The

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Alberta Natural Gas Company best business these two companies have ever enjoyed out of Edmonton has been the transportation of oil in the last two or three years, yet they stand idly aside and see this transportation business taken from them by these American firms. To me, it is an amazing situation. These railways have the transportation know-how; they have the rights of way; they have the bridges and tunnels which could easily carry these lines. The same section crews that maintain a railway could easily maintain the pipe line right of way, yet these companies have decided to stand idly by. I do not think the Canadian Pacific would have stood aside in the days of Shaughnessy, Smith, Van Horne. If they had applied for charters, we would not be worrying about an all-Canadian route across this country, or expressing concern about developing Canada in the Canadian pattern for they were Canadians interested in developing Canada. If that view had been adopted at the time the Canadian Pacific railway was built, we would not have this railroad across Canada today. It would have been more economical to take our wheat from Manitoba south to the American lines which were already built, and then across to the seaboard in that manner. It was because the government of that day thought it was in the interest of Canada to have a Canadian route that the Canadian Pacific was built across this barren land in northern Ontario to maintain and help Canadian development, even though the cost was far greater than building a route through to the United States.

A week or ten days ago the Minister of Resources and Development announced with pride that six of the provinces had signed an agreement which would bring the trans-Canada highway a step closer to reality. We are going to spend $300 million on the building of that highway. When I say "we", I mean the people of Canada, federally and provincially, are going to spend $300 million to have this Canadian route across the country. If the argument of some of these pipe line companies were to be heeded, it would be much cheaper for the people of Canada to continue taking their cars down to the United States, crossing the United States, and then going back up to Vancouver rather than spend $300 million on this road. We decided, however, to have proper road facilities across the country as a factor in Canadian development.

I should like to use another example. Suppose that this gas, instead of being in Alberta, were in Montana, and the problem were the same, to get the gas down to Vancouver, Portland, Seattle and Tacoma, where the market is. Is anyone in this house so

naive as to think that, under any circumstances, the people of the United States, even if it were half the cost to build through Canada, would loop a line up into Alberta and through British Columbia in that way? National pride and national development would insist that they build the line in the United States if they possibly could. That is exactly what they would do. We have already seen an example of that in the state of Washington just to the south of our province where President Roosevelt and the administrations both before him and since him have poured countless millions into the development of that area in order to give them power, the cheapest hydro power in the world out of the greatest hydro development in the world, Grand Coulee dam. That development of cheap power in that country has made that country bloom and blossom. They have the cheapest power in America and have built industry and agriculture on that power. If to that cheap power is now added cheap gas, our province of British Columbia which, after all, is their natural competitor, will certainly lag far behind. They may have cheap power, but we should have the full benefit of this cheap gas, which is a Canadian resource.

Some of the eastern members think this is a feud between the Conservatives, the C.C.F. and the government, although this is a private bill. Let me give hon. members from Ontario an illustration which may help them understand the real position. Suppose gas were found at Windsor and that it was decided to be desirable to get it to Toronto for industrial use in that area. How many Ontario members would there be who would think the route should be built the American way, south of Lake Erie? Even if the route to the south of Lake Erie, through the states and up to Toronto, was a little bit cheaper, how many Ontario members would think the route should be built in that way? You would naturally demand to have developed within Canada this Canadian resource, with of course the obvious addendum that if we had a surplus, then it should be exported to the United States.

The most significant thing, however, in Mr. Dixon's evidence was this. I think we can all dismiss the other company which I noticed in the papers was described as an also-ran. As I say, the most significant thing was the fact that although Mr. Dixon mentioned in an offhand way the southern Canadian routes, and described how economically impossible they were, he said his company had never surveyed what any engineer, looking back in railway history, would have said was the most obvious route, the

Yellowhead route. He said he had been through there on the train. He did promise the hon. member for Edmonton West that they would make another survey before they applied to the board of transport commissioners, which would involve buying another train ticket, a ticket from Edmonton to Vancouver.

But I was greatly interested in this Yellow-head route for two reasons. First of all, the Yellowhead route will tap the centre of the present known Alberta gas fields. We have our gas fields in the south of Alberta. We have the Pincher Creek area and Medicine Hat and those fields there in the central area. We have this great new expanding field of the Edmonton area already as big as the proven southern fields, and there are further new fields going to be discovered up in the north, the Peace river district. The Yellowhead route will tap in the centre, not either at the south end or at the far north end. That seems a practical approach to the matter of getting best advantage out of all three fields.

The second thing of course is that the Yellowhead pass is the best pass through the Rocky mountains. The C.N.R. are fortunate in having that pass, as the hon. member for Edmonton West has said, and I join him in all his remarks except in his conclusion. He said that would undoubtedly be the most practical of the routes to be built. An interesting thing was that despite all these protestations of Mr. Dixon that they were interested in building a Canadian route, if economically feasible, they have never done anything serious about the Yellowhead route. I know a little bit about the Edmonton route because some months ago I made a speech in the house and I described the Westcoast Transmission Company as having deceived us because they applied for the Monkman pass through British Columbia, and when they got the bill through they ran off to the board of transport commissioners and applied for the same route that these other American companies are asking for. Shortly after this speech, I received a visit from a friend of mine who is a mining engineer, who told me that his firm had been hired by the Westcoast Transmission Company to run their survey through the Yellowhead pass. I have great faith in this man. I knew him years ago as a mining engineer. Later he was a good army engineer. He was captured at Dieppe, and as a matter of fact one of his best engineering feats was the famous escape tunnel at Oflag 4C through which he and the former member for Van-couver-Burrard escaped a few years ago. He is a Canadian, and is interested as a Canadian, not as an American promoter trying to make

Alberta Natural Gas Company as much money as he can through easy exploitation of Canada. He assures me as an engineer, whose opinion I respect, that after having done a detailed survey he believes that the Yellowhead route is practical and feasible. One other thing is that I was struck tonight by the fact that these companies, which give the assurance so easily outside the house to members that if practical they will build in Canada, are also apparently just as casual in giving assurance to cabinet ministers. But when the chips are down and assurances are to be given either in the standing committee or committees, or better by an agreed amendment to the bill, there is a strange silence on the part of the sponsors of these bills.

The next reason why I feel that there should be a Canadian route has been very well described by many of the members who have spoken before me; that is the matter of Canadian development. As to that route through British Columbia, if it does cost $17 million, which is the top figure Mr. Dixon gave, the people of Vancouver are not averse to paying an extra charge for the gas if it will help British Columbia development. They will still make great savings because the public utilities people in Vancouver have said that the cost will still be about half the cost of our present manufactured gas, and that the cost of heating by gas will be about half the cost of heating by coal.

Vancouver has never been a hogtown. Vancouver has always realized that its richness depended on the riches of the hinterland of British Columbia; that from the logging camps, the mines, farms and fisheries of British Columbia came the wealth of the city of Vancouver. For Vancouver to prosper, all British Columbia must prosper. For too long our province of British Columbia has been what I am going to describe in a phrase used by a man who I regret to see is now one of the incorporators in this bill, namely, Mr. H. R. MacMillan, a great British Columbian who has done a tremendous amount to develop British Columbia. About fifteen years ago in a speech to the Vancouver board of trade which made a great impression on me, as I am sure it did on all his listeners, he traced the retarded development of our province because for too long-and these were his words, and they were biblical words-we have been regarded as hewers of wood and drawers of water. Before the war we cut our logs up, loaded them in barges and they went to Japan, Australia or England. For a long time we did not even get the work of cutting our own logs into lumber. We loaded our ore and concentrates in boats and did the same thing, sending it to other countries for processing. In my own riding is a mine in

Alberta Natural Gas Company which I worked at one time, Britannia mine, one of the great copper mines of the world, a mine which has been in operation for over forty years. Britannia mine at times reached production of 8,500 tons a day and today still produces 4,000 tons. We have never done any more than take the ore out of the ground, mill it and ship it to the American side to Tacoma, a city which is built upon British Columbia ore, Britannia ore.

At the beginning, it was thought not economically feasible to smelt the ore in Canada. We had the lime, the coal and the copper ore, all on sea water within twenty miles of each other, but still it was said to be not feasible. But down it went to Tacoma where they also used our coal and lime, only because again it was American interests who owned the mine and who naturally were anxious to spend their money on the American side. In that forty years we could have built a smelter town in British Columbia of the size of Tacoma; but for forty years that ore has gone to Tacoma, in the same way as our logs and our pulp in the past have gone out of the country. Only in the last twenty years have we seen the beginning of secondary industry in British Columbia. Now again in these pipe line bills we see this desire to export our resources to the United States as fast as possible. That is why the British Columbia legislature, city councils and boards of trade across our province have said, "We are opposed to the granting of any franchise or any charter to a company whose announced policy is to take gas through the American route."

Finally I want to deal with this monopoly cry. The cry is that if we oppose these charters and if we vote against these charters and deny them, we will then be fastening a monopoly on the country, because we will be protecting the one charter given to the West-coast Transmission Company a year ago. That charter has not been shown to be of much use so far because the government of Alberta have refused to give it any consideration until other firms are in the field with charters.

I want to say at this point how proud I was two years ago before the railway committee to hear geologists of two of the largest companies say-and to see their remark repeated the following year at the mining convention to which I alluded earlier-that the oil and gas policy of the Alberta government today is the best on the entire continent. That is why they are refusing to deal with just one company, for after all they said they will not give gas to this one company as long as they are alone. They will only give gas when there are competitors in the field and they can pick the best of them. No monopoly

TMr. Sinclair.]

has thus been created so far when the one company with a charter cannot proceed any further because of the vision and good management of the Alberta government. The only people who are creating a monopoly are the actual sponsors of these bills. All they have to do to ensure their passage is to agree to an amendment providing a Canadian route. I do not think this parliament should foist such an amendment on them, because I think that is contrary to the spirit of a private bill. The company or individual who brings forth a private bill has that knowledge of the thing which he wants. If he cannot get that, if parliament says he is not to get that, then it turns it down. To add an amendment to it unacceptable to the sponsor is useless, because the company will not go on with it; they will let the thing lie dormant. If these pipe line companies are sincere, and if they want to end the pipe line monopoly that the Westcoast Transmission Company has, then let them come forward and give the assurance in a form which will carry weight, this assurance that they have apparently promised outside the house where it has no real weight, by amending one of the sections of this bill, of their own volition, to specify building a Canadian route. If that were to happen there would not be one member in this House of Commons who would vote against these bills. We would then have three pipe line companies with charters, and it would be for the Alberta government to choose between them as to which one they thought best fitted to carry the gas to this market in the way most beneficial both to Alberta and to the people of Canada generally.

For these reasons, on the third reading of this bill, I intend to vote against the granting of these charters, not to create a monopoly but to make these companies realize the day of the ready and quick export of the raw resources of this country is ended and we must think in terms of Canada first.

Topic:   ALBERTA NATURAL GAS COMPANY
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LIB
?

Donald MacInnis

Mr. Maclnnis:

British Columbia is falling in line. Don't carry this filibuster too far.

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LIB

James Allen (Jim) Byrne

Liberal

Mr. Byrne:

I had not expected to speak on this bill this evening, because I thought I had said enough in committee, but several objections have been raised as to the way in which the committee carried on its business. Personally, I felt at times that probably it would have been better if we had allowed more time for the taking of evidence. It is quite evident from the disclosures we have had here tonight that any evidence that might have been given by Mr. Dixon particularly would not have carried a great deal of weight anyway,

because it has been indicated by previous speakers that they did not consider that he had given much thought to anything that he had prepared, and that most of his figures had been refuted in some way.

I think the big mistake regarding this whole question, particularly this evening, was that the committee did not sit for the purpose of determining a route for the proposed gas pipe line. The purpose of the committee was to determine the qualifications of the company under the Pipe Lines Act, and thereby grant a charter similar to the charter that has been granted to the West-coast Transmission Company.

The hon. member for Vancouver-Quadra indicated that it was improper for other people who were not members of the committee to be interested in the procedure.

Topic:   ALBERTA NATURAL GAS COMPANY
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May 1, 1950