February 1, 1961

PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinion):

I was assuming the hon. member for Assiniboia would not wish to speak when there are only about one and a half minutes remaining before we rise.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
CCF

Hazen Robert Argue

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

Mr. Argue:

I should like to speak for that minute and a half.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
LIB

John Whitney Pickersgill

Liberal

Mr. Pickersgill:

Before the hon. member for Assiniboia continues, may I ask a question-

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
CCF
LIB

John Whitney Pickersgill

Liberal

Mr. Pickersgill:

I think the minister made a misstatement and I should like to have some clarification.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
PC

Jacques Flynn (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

The Chairman:

Order.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
CCF

Hazen Robert Argue

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

Mr. Argue:

I think I have the right to speak. In the minute and a half or minute at my disposal I should like to say that while I listened with great care to the spokesman of the liberal party I was unable to determine in my mind from his statement the exact position which the Liberal party takes on this question. I should like to say for the C.C.F. new party that we feel that this resolution should not be embarked upon, that this is a return to Tory protectionism and a continuation of the policy followed by this government since it took office of carrying forward one increase in tariffs after another. The government in embarking on this undesirable policy is in my judgment working against the modern trend. The government, in going forward with this kind of policy, is using old weapons, old means which have invariably led to increased tariff barriers and retaliation in the past and to impediments to an expanding international trade.

National Oil Policy

This government has, of course, been very free with its advice to other nations. After certain discussions had taken place overseas in December with regard to common market procedures the Minister of Trade and Commerce at that time made it perfectly clear that Canada was prepared to retaliate if Britain went into the common market. I wonder if the government is retaliating in advance.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinion):

That is utterly silly. There is no retaliation here at all, and if the hon. member does not know that he does not understand much about it.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
CCF

Hazen Robert Argue

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

Mr. Argue:

The minister's skin is very thin.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink
PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinion):

It is not. It is quite normal, but I wish something could be said about the way the hon. member uses his tongue to say things which are utterly at variance with the facts.

Progress reported.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
Permalink

STATEMENT ON NATIONAL OIL POLICY

PC

George Harris Hees (Minister of Trade and Commerce)

Progressive Conservative

Hon. George H. Hees (Minister of Trade and Commerce):

As the house is aware, the government has been giving active consideration to the situation of the oil industry in Canada for some time. It has had the benefit of a constructive report from the royal commission on energy, and the national energy board has studied intensively the changing conditions which have characterized the period since the commission reported.

I wish to inform the house that the government has decided upon a national oil policy which is, briefly, to achieve target levels of production of oil, including natural gas liquids, which will be set from time to time, and which will be designed to reach approximately 800,000 barrels a day in 1963. This objective for 1963 can be achieved by the industry on an economically sound basis, and will be approximately as high as the figure which would be achieved if the Montreal pipe line were to be constructed.

The production target level for the first part of this period will be an average of 640,000 barrels a day for the year 1961, with a level of not less than 625,000 barrels a day to be attained by mid-year. This compares with an average production of 550,000 barrels a day in 1960.

These targets are to be reached by increased use of Canadian oil in domestic markets west of the Ottawa valley, and by some expansion of export sales largely in existing markets which can be reached through established pipe lines.

National Oil Policy

The growth in domestic use is predicated in particular on substituting in Ontario markets west of the Ottawa valley products refined from Canadian crude for these now supplied from foreign crude. This will require in Ontario the displacement of the present small imports of crude, and a progressive reduction in imports of foreign products and transfers of products refined from foreign crudes in Montreal. Refining capacity in Ontario will have to be increased over the period so that by 1963 capacity is sufficient to enable the Ontario market west of the Ottawa valley to be supplied substantially from Canadian crudes.

The government program for expanded production of oil will be on a voluntary basis, but importers of crude and petroleum products will be required to report their imports monthly from January 1, 1961 in order to permit the national energy board to continue to assess the situation.

The increase in production of Canadian oil reflected in these target levels will of course require a sincere effort and full co-operation by all segments of the industry. The government desires that this effort and co-operation will be forthcoming without formal regulation.

The government has instructed the national energy board to evaluate the contribution of individual companies to the general efforts of the industry, as well as to report periodically on the progress of the program. If this progress suggests that voluntary efforts are not producing the results anticipated, then the government will take whatever further steps the circumstances may require to ensure the success of its policy, including the proclamation of section 87 of the National Energy Board Act, which provides for the regulation of imports and exports of oil.

In developing its policy the government has full regard to the interests of other countries which might be affected by its decisions. Its present program is designed to achieve the national objectives with the least possible disruption of normal trade patterns.

The increase in exports which is integral to the government's program is wholly consistent with the growth of sales of Canadian oil contemplated when exemption from United States oil import controls was established, under which Canadian oil is relatively free to move into the United States by overland means of transportation.

The progressive displacement of imported crudes and products in the Ontario market is considered to be fully consistent with the public announcement of the government of Venezuela that it considers that its oils should not reach these markets in the interior of Canada.

[Mr. Hees.l

The United States government has been made aware of the Canadian government's plans in view of the close connections between the oil economies of the two countries. Other interested governments are being informed today of the contents of the announcement which I have just made.

Topic:   WAYS AND MEANS
Subtopic:   STATEMENT ON NATIONAL OIL POLICY
Permalink
LIB

Lionel Chevrier (Official Opposition House Leader; Liberal Party House Leader)

Liberal

Hon. Lionel Chevrier (Laurier):

The house has listened with care and I am sure a great deal of interest to this statement which on the face of it appears to be an important statement emanating from the government with reference to the oil industry. After having looked at it carefully and at first blush this appears to us to be not a statement of national policy but only a repetition of what was contained in the recommendations of the Borden commission set up some few years ago.

As all hon. members know, the Borden commission presented to the governor in council in July of 1957 a special report on oil. The announcement today in our opinion is a faithful reproduction of the Borden commission's recommendations as they can be found at page 6-32 of the second report of the royal commission on energy. I should like to place on the record a brief summary of the recommendations of that commission:

To summarize, the commission recommends:

(1) That it be national policy

(a) to encourage and permit the export of Canadian crude oil without licence, and

(b) to ensure the continued use, consistent with the interests of the Canadian consumer of petroleum products, of Canadian crude in refinery areas of Canada accessible to it by existing pipe line facilities, thereby increasing the market outlets for such crude oil.

(2) That to implement such national policy the oil companies concerned take steps as soon as possible to displace, with products refined from Canadian crude, a volume of petroleum products now moving into the Ontario market from the Montreal refinery area equivalent to approximately 50,000 barrels daily of crude oil.

(3) That to implement further such national policy the Canadian oil industry take vigorous and imaginative action very substantially to enlarge its markets in the United States on a basis that will ensure the continuing participation of Canadian crude in these markets and in their expansion.

(4) That no government action should at this time be taken to ensure the construction of pipe line facilities to transport Canadian crude oil to the Montreal refinery area and that before any such action is taken an opportunity be given to the oil industry to demonstrate that it can find markets elsewhere in Canada and the United States sufficient to sustain a healthy and vigorous Canadian oil industry with the incentive for further exploration and development.

(5) That, if government action should become necessary to implement the national policy we have recommended above, imports of crude oil be made subject to licence and that such licences be denied (except for some good and sufficient reason) to refiners in a refinery area in Canada where adequate pipe line facilities exist for the transportation of Canadian crude oil to meet the demands of such refinery area, but that crude oil

imported through a pipe line or by motor carrier or rail and produced in the country irom which such crude oil is imported be exempted from such licensing.

I ask the house to find the difference between the statement just made by the minister and the recommendations of the Borden commission which I have just read. I submit there is no difference in essence, between the two and I challenge the minister to point out any material difference between the recommendations I have just read and the statement he has made.

Of course, we will examine very carefully the statement that has been made and in due course and from time to time as the opportunity arises, we will make known our position on this policy. After listening to the statement, the only conclusion to be derived is that (1) it took the government two years to take cognizance of the report of the royal commission and (2) it took the government the two-year period preceding that to submit this matter to a royal commission on energy.

Topic:   WAYS AND MEANS
Subtopic:   STATEMENT ON NATIONAL OIL POLICY
Permalink
CCF

Hazen Robert Argue

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

Mr. Hazen Argue (Assiniboia):

Mr. Speaker, the statement put before the house today by the Minister of Trade and Commerce (Mr. Hees) is undoubtedly an important one for a lagging Canadian oil industry. I believe that this announcement of policy by the government holds out the hope of renewed activity, renewed production and an increase in markets for our Canadian oil industry.

The hon. member for Laurier (Mr. Chevrier) appeared to be critical of the government's policy because he alleged it followed the royal commission's report. The report is in much greater detail than this statement. I know it follows it to some extent but I can see no reason to criticize the government for having gone forward with certain recommendations put before the country by this royal commission.

Business of the House

For many years hon. members of this group have advocated a national energy policy. We hope this is a step in the development of such a greatly needed national energy policy. I tell the Minister of Finance (Mr. Fleming) that the type of policy enunciated today to deal with a difficult trade situation as far as the oil industry is concerned in the opinion of our group is a preferable one to that of increases in tariffs as a means of dealing with this problem.

We, of course, will have to study the target figures. We will concern ourselves with how this policy is implemented, with the allocation of markets among Canadian companies, and so on. We will have comments to make on this aspect of the policy as it unfolds.

It is well known to hon. members of this house that the international oil industry is in general an international cartel and to the extent that this policy will encourage production in Canada by independent oil companies we believe it will be a welcome policy in the opinion of Canadians. We like to see any government adopt the kind of social planning necessary to the welfare of ou! country.

Topic:   WAYS AND MEANS
Subtopic:   STATEMENT ON NATIONAL OIL POLICY
Permalink

BUSINESS OF THE HOUSE

LIB

Lionel Chevrier (Official Opposition House Leader; Liberal Party House Leader)

Liberal

Mr. Chevrier:

Mr. Speaker, may I inquire what the business will be for tomorrow and Friday?

Topic:   BUSINESS OF THE HOUSE
Permalink
PC

Gordon Minto Churchill (Minister of Veterans Affairs; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Churchill:

Mr. Speaker, tomorrow we will carry on with the budget resolutions. If they are concluded, we will take the estimates of the Department of Citizenship and Immigration on Friday.

Topic:   BUSINESS OF THE HOUSE
Permalink

At six o'clock the house adjourned, without question put, pursuant to standing order.



Questions


ANSWERS TO QUESTIONS

February 1, 1961