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Constitution Act, 1867:

Section 92A

Compilation of primary documents to assist in interpreting Provincial Ownership of Resources Rights in Section 92A of the Constitution Act, 1867[1]

Contents

Part 1
Previous Attempts at a Resource Ownership Clause

Part 2
Provincial Ownership of Resources, in Successive Drafts of Section 50 and 51 of the Constitution Act, 1982, which would create Section 92A of the Constitution Act, 1867

Part 3
Debates and Discussions on Resources including Federal-Provincial Conferences and the Special Joint Committee on the Constitution (1980-1982)

Endnotes

“Non-Renewable Natural Resources, Forestry Resources and Electrical Energy

92A. (1) In each province, the legislature may exclusively make laws in relation to

(a) exploration for non-renewable natural resources in the province;

(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and

(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

(2) In each province, the legislature may make laws in relation to the export from the province to another part of Canada of the primary production from non-renewable natural resources and forestry resources in the province and the production from facilities in the province for the generation of electrical energy, but such laws may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.

(3) Nothing in subsection (2) derogates from the authority of Parliament to enact laws in relation to the matters referred to in that subsection and, where such a law of Parliament and a law of a province conflict, the law of Parliament prevails to the extent of the conflict.

(4) In each province, the legislature may make laws in relation to the raising of money by any mode or system of taxation in respect of (a) non-renewable natural resources and forestry resources in the province and the primary production therefrom, and (b) sites and facilities in the province for the generation of electrical energy and the production therefrom, whether or not such production is exported in whole or in part from the province, but such laws may not authorize or provide for taxation that differentiates between production exported to another part of Canada and production not exported from the province.

(5) The expression “primary production” has the meaning assigned by the Sixth Schedule.

(6) Nothing in subsections (1) to (5) derogates from any powers or rights that a legislature or government of a province had immediately before the coming into force of this section.

THE SIXTH SCHEDULE

Primary Production from Non-Renewable Natural Resources and Forestry Resources

1. For the purposes of section 92A of this Act,

(a) production from a non-renewable natural resource is primary production therefrom if
(i) it is in the form in which it exists upon its recovery of severance from its natural state, or
(ii) it is a product resulting from processing or refining the resource, and is not a manufactured product or a product resulting from refining crude oil, refining upgraded heavy crude oil, refining gases or liquids derived from coal or refining a synthetic equivalent of crude oil; and

(b) production from a forestry resource is primary production therefrom if it consists of sawlogs, poles, lumber, wood chips, sawdust or any other primary wood product, or wood pulp, and is not a product manufactured from wood.”

PART 1:

Previous Attempts at a Resource Ownership Clause[2]

—————o0o—————

February 5-6, 1979: Federal-Provincial Conference of First Ministers on the Constitution, List of “Best Effort” Draft Proposals with Joint Government Input Discussed by First Ministers (click HERE)[3]

RESOURCE OWNERSHIP AND INTERPROVINCIAL TRADE

LIST OF ALTERNATIVES COVERING THE DISPOSITIONS OF SECTION 109

Option 1 Maintain the status quo, do not carry forward section 109.

Option 2 (a) *”123.1 All lands, mines, minerals and royalties belonging to any province immediately before this sect on comes into effect, and all sums than due or payable in respect of any such lands, mines, minerals and royalties, belong immediately after this section comes into effect to the province or are then due and payable, subject to any trusts existing in respect thereof and to any interest other than that of the province therein.”

Option 2 (b) *”123.1 All property of property belonging to any province immediately before this section comes into effect, belongs immediately after this section comes into effect to the province, subject to any trusts existing in respect thereof and to any interest other than that of the province therein.”

Option 3 “127.1 Nothing in of property this Act changes the ownership in any property owned by Canada or a province immediately before the coming into force of this Act.”

*Note: Numbering is tied in to numbering found in Bill C-60.

Draft Proposal Discussed by First Ministers

INDIRECT TAXATION

Taxation within the province by any mode or system of taxation for provincial purposes, except indirect taxation that a) constitutes a tax on the entry into or export from the province or otherwise has effect as a barrier or impediment on interprovincial or international trade, or b) is so imposed that the burden of the tax is passed outside the province.

Other documents from the February Conference:

Federal-Provincial Conference of First Ministers on the Constitution, Verbatim Transcript (unverified text), Doc 800-10/039 (Ottawa: 5-6 February 1979). HERE.

Federal-Provincial Conference of First Ministers on the Constitution, Federal Draft Proposals Discussed by First Ministers, Doc 800-010/037 (Ottawa: 5-6 February 1979). HERE.

—–o0o—–

PART 2:

Provincial Ownership of Resources, in Successive Drafts of Section 50 and 51 of the Constitution Act, 1982, which would create Section 92A of the Constitution Act, 1867

—————o0o—————

4 July, 1980: Rights and Freedoms within the Canadian Federation, Discussion Draft, Tabled at the Meeting of the Continuing Committee of Ministers on the Constitution (8-11 July, 1980)

No such clause exists.

(Source: Meeting of the Continuing Committee of Ministers on the Constitution, Rights and Freedoms within the Canadian Federation, Discussion Draft. Tabled by the Delegation of the Government of Canada, 4 July 1980, Doc 830-81/027 (Montreal: 8-11 July 1980). Click HERE.)[4]

—–o0o—–

22 August, 1980: “Discussion Draft”[5]

No such clause exists.

(Source: Robin Elliot, “Interpreting the Charter—Use of the Earlier Versions as an Aid”, University of British Columbia Law Review (1982), p. 23. Click HERE.)

—–o0o—–

2, 5, or 6 October, 1980[6]: Draft Tabled in House of Commons and the Senate

No such clause exists.

(Source: Canada, Parliament, “Proposed Resolution for a Joint Address to Her Majesty the Queen respecting the Constitution of Canada” in Sessional Papers (1980). Sessional Paper 321-7/20. The text is found on p. 3. Click HERE.)

—–o0o—–

12 January, 1981: Draft Submitted to Special Joint Committee on the Constitution by Jean Chrétien

No such clause exists.[7]

(Source: Canada, Parliament, Minutes of Proceedings and Evidence of the Special Joint Committee of the Senate and of the House of Commons on the Constitution of Canada, 32nd Parl, 1st Sess, No 36 (12 January 1981). The text is found on p. 11. Click HERE.)

—–o0o—–

13 February, 1981: Draft Tabled in the House of Commons

PART VII

AMENDMENT TO THE CONSTITUTION ACT, 1867

56. (1) The Constitution Act, 1867 (formerly named the British North America Act, 1867) is amended by adding thereto, immediately after section 92 thereof, the following heading and section:

“Non-Renewable Natural Resources, Forestry Resources and Electrical Energy

92A. (1) In each province, the legislature may exclusively make laws in relation to

(a) exploration for non-renewable natural resources in the province;

(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and

(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

(2) In each province, the legislature may make laws in relation to the export from the province to another part of Canada of the primary production from non-renewable natural resources and forestry resources in the province and the production from facilities in the province for the generation of electrical energy, but such laws may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.

(3) Nothing in subsection (2) derogates from the authority of Parliament to enact laws in relation to the matters referred to in that subsection and, where such a law of Parliament and a law of a province conflict, the law of Parliament prevails to the extent of the conflict.

(4) In each province, the legislature may make laws in relation to the raising of money by any mode or system of taxation in respect of

(a) non-renewable natural resources and forestry resources in the province and the primary production therefrom, and

(b) sites and facilities in the province for the generation of electrical energy and the production therefrom,

whether or not such production is exported in whole or in part from the province, but such laws may not authorize or provide for taxation that differentiates between production exported to another part of Canada and production not exported from the province.

(5) The expression “primary production” has the meaning assigned by the Sixth Schedule.

(6) Nothing in subsections (1) to (5) derogates from any powers or rights that a legislature or government of a province had immediately before the coming into force of this section.”

57. The said Act is further amended by adding thereto the following Schedule:

“THE SIXTH SCHEDULE

Primary Production from Non-Renewable Natural Resources and Forestry Resources

1. For the purposes of section 92A of this Act,

(a) production from a non-renewable natural resource is primary production therefrom if

(i) it is in the form in which it exists upon its recovery or severance from its natural state, or

(ii) it is a product resulting from processing or refining the resource, and is not a manufactured product or a product resulting from refining crude oil, refining upgraded heavy crude oil, refining gases or liquids derived from coal or refining a synthetic equivalent of crude oil; and

(b) production from a forestry resource is primary production therefrom if it consists of sawlogs, poles, lumber, wood chips, sawdust or any other primary wood product, 15 or wood pulp, and is not a product manufactured from wood.”

(Source: Canada, Parliament, House of Commons Journals, 32^nd Parl, 1^st Sess, 1981. The text is found on pp. 1267-1269. Click HERE.)

—–o0o—–

23/24 April, 1981: Draft Submitted to Supreme Court for Constitutional Amendment Reference

PART VII

AMENDMENT TO THE CONSTITUTION ACT, 1867

56. (1) The Constitution Act, 1867 (formerly named the British North America Act, 1867) is amended by adding thereto, immediately after section 92 thereof, the following heading and section:

“Non-Renewable Natural Resources, Forestry Resources and Electrical Energy

92A. (1) In each province, the legislature may exclusively make laws in relation to

(a) exploration for non-renewable natural resources in the province;

(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and

(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

(2) In each province, the legislature may make laws in relation to the export from the province to another part of Canada of the primary production from non-renewable natural resources and forestry resources in the province and the production from facilities in the province for the generation of electrical energy, but such laws may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.

(3) Nothing in subsection (2) derogates from the authority of Parliament to enact laws in relation to the matters referred to in that subsection and, where such a law of Parliament and a law of a province conflict, the law of Parliament prevails to the extent of the conflict.

(4) In each province, the legislature may make laws in relation to the raising of money by any mode or system of taxation in respect of

(a) non-renewable natural resources and forestry resources in the province and the primary production therefrom, and

(b) sites and facilities in the province for the generation of electrical energy and the production therefrom,

whether or not such production is exported in whole or in part from the province, but such laws may not authorize or provide for taxation that differentiates between production exported to another part of 20 Canada and production not exported from the province.

(5) The expression “primary production” has the meaning assigned by the Sixth Schedule.

(6) Nothing in subsections (1) to (5) derogates from any powers or rights that a legislature or government of a province had immediately before the coming into force of this section.”

57. The said Act is further amended by adding thereto the following Schedule:

“THE SIXTH SCHEDULE

Primary Production from Non-Renewable Natural Resources and Forestry Resources

1. For the purposes of section 92A of this Act,

(a) production from a non-renewable natural resource is primary production therefrom if

(i) it is in the form in which it exists upon its recovery or severance from its natural state, or

(ii) it is a product resulting from processing or refining the resource, and is not a manufactured product or a product resulting from refining crude oil, refining upgraded heavy crude oil, refining gases or liquids derived from coal or refining a synthetic equivalent of crude oil; and

(b) production from a forestry resource is primary production therefrom if it consists of sawlogs, poles, lumber, wood chips, sawdust or any other primary wood product, or wood pulp, and is not a product manufactured from wood.”

(Source: Canada, Parliament, House of Commons Journals, 32^nd Parl, 1^st Sess, April 23, 1981. Click HERE & Canada, Parliament, Journals of the Senate, 32^nd Parl, 1^st Sess, April 24, 1981. Click HERE.)

—–o0o—–

November 18/20, 1981[8]: “November Accord Version”[9]

PART V

AMENDMENT TO THE CONSTITUTION ACT, 1867

49. The Constitution Act, 1867 (formerly named the British North America Act, 1867) is amended by adding thereto, immediately after section 92 thereof, the following heading and section:

“Non-Renewable Natural Resources, Forestry Resources and Electrical Energy

92A. (1) In each province, the legislature may exclusively make laws in relation to

(a) exploration for non-renewable natural resources in the province;

(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and

(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy

(2) In each province, the legislature may make laws in relation to the export from the province to another part of Canada of the primary production from non-renewable natural resources and forestry resources in the province and the production from facilities in the province for the generation of electrical energy, but such laws may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.

(3) Nothing in subsection (2) derogates from the authority of Parliament to enact laws in relation to the matters referred to in that subsection and, where such a law of Parliament and a law of a province conflict, the law of Parliament prevails to the extent of the conflict.

(4) In each province, the legislature may make laws in relation to the raising of money by any mode or system of taxation in respect of

(a) non-renewable natural resources and forestry resources in the province and the primary production therefrom, and

(b) sites and facilities in the province for the generation of electrical energy and the production therefrom,

whether or not such production is exported in whole or in part from the province, but such laws may not authorize or provide for taxation that differentiates between production exported to another part of Canada and production not exported from the province.

(5) The expression “primary production” has the meaning assigned by the Sixth Schedule.

(6) Nothing in subsections (1) to (5) derogates from any powers or rights that a legislature or government of a province had immediately before the coming into force of this section.”

50. The said Act is further amended by adding thereto the following Schedule:

“THE SIXTH SCHEDULE

Primary Production from Non- Renewable Natural Resources and Forestry Resources

1. For the purposes of section 92A of this Act,

(a) production from a non-renewable natural resource is primary production therefrom if

(i) it is in the form in which it exists upon its recovery or severance from its natural state, or

(ii) it is a product resulting from processing or refining the resource, and is not a manufactured product or a product resulting from refining crude oil, refining upgraded heavy crude oil, refin-ing gases or liquids derived from coal or refining a synthetic equivalent of crude oil; and

(b) production from a forestry resource is primary production therefrom if it consists of sawlogs, poles, lumber, wood chips, sawdust or any other primary wood product, or wood pulp, and is not a product manufactured from wood.”

(Source: Canada, Parliament, House of Commons Journals, 32^nd Parl, 1^st Sess, 1981. The text is found on pp. 4020-4022. Click HERE.)

—–o0o—–

December 2, 1981: Final Version

PART VI

AMENDMENT TO THE CONSTITUTION ACT, 1867

50. The Constitution Act, 1867 (formerly named the British North America Act, 1867) is amended by adding thereto, immediately after section 92 thereof, the following heading and section:

“Non-Renewable Natural Resources, Forestry Resources and Electrical Energy

92A. (1) In each province, the legislature may exclusively make laws in relation to

(a) exploration for non-renewable natural resources in the province;

(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and

(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

(2) In each province, the legislature may make laws in relation to the export from the province to another part of Canada of the primary production from non-renewable natural resources and forestry resources in the province and the production from facilities in the province for the generation of electrical energy, but such laws may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.

(3) Nothing in subsection (2) derogates from the authority of Parliament to enact laws in relation to the matters referred to in that subsection and, where such a law of Parliament and a law of a province conflict, the law of Parliament prevails to the extent of the conflict.

(4) In each province, the legislature may make laws in relation to the raising of money by any mode or system of taxation in respect of

(a) non-renewable natural resources and forestry resources in the province and the primary production therefrom, and

(b) sites and facilities in the province for the generation of electrical energy and the production therefrom,

whether or not such production is exported in whole or in part from the province, but such laws may not authorize or provide for taxation that differentiates between production exported to another part of Canada and production not exported from the province.

(5) The expression “primary production” has the meaning assigned by the Sixth Schedule.

(6) Nothing in subsections (1) to (5) derogates from any powers or rights that a legislature or government of a province had immediately before the coming into force of this section.”

51. The said Act is further amended by adding thereto the following Schedule:

“THE SIXTH SCHEDULE

Primary Production from Non-Renewable Natural Resources and Forestry Resources

1. For the purposes of section 92A of this Act,

(a) production from a non-renewable natural resource is primary production therefrom if

(i) it is in the form in which it exists upon its recovery or severance from its natural state, or

(ii) it is a product resulting from processing or refining the resource, and is not a manufactured product or a product resulting from refining crude oil, refining upgraded heavy crude oil, refining gases or liquids derived from coal or refining a synthetic equivalent of crude oil; and

(b) production from a forestry resource is primary production therefrom if it consists of sawlogs, poles, lumber, wood chips, sawdust or any other primary wood product, or wood pulp, and is not a product manufactured from wood.”

(Source: Canada, Parliament, House of Commons Journals, 32^nd Parl, 1^st Sess, 1981. The text is found on pp. 4323-4325. Click HERE.)

—–o0o—–

PART 3:

Debates and Discussions on Resources including Federal-Provincial Conferences and the Special Joint Committee on the Constitution  (1980-1982)

—————o0o—————

May 22, 1980, Debate in the House of Commons (click HERE)

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June 27, 1980, Debate in the House of Commons (click HERE)

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July 16, 1980, Debate in the House of Commons (click HERE)

—–o0o—–

September 8-13, 1980: Federal-Provincial Conference of First Ministers on the Constitution (click HERE)

—–o0o—–

October 6 1980, Debate in the House of Commons (click HERE)

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October 7, 1980, Debate in the House of Commons (click HERE)

—–o0o—–

October 8, 1980, Debate in the House of Commons (click HERE)

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October 9, 1980, Debate in the House of Commons (click HERE)

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October 10, 1980, Debate in the House of Commons (click HERE)

—–o0o—–

October 14, 1980, Debate in the Senate (click HERE)

—–o0o—–

October 15, 1980, Debate in the House of Commons (click HERE)

—–o0o—–

October 17, 1980, Debate in the House of Commons (click HERE)

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October 21, 1980, Debate in the Senate (click HERE)

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October 21, 1980, Debate in the House of Commons (click HERE)

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October 22, 1980, Debates in the House of Commons (click HERE, HERE and HERE)

—–o0o—–

October 22, 1980, Debate in the Senate (click HERE)

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October 23, 1980, Debate in the House of Commons (click HERE and HERE)

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October 23, 1980, Debate in the Senate (click HERE)

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October 29, 1980, Debate in the House of Commons (click HERE)

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October 30, 1980, Debate in the House of Commons (click HERE)

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November 3, 1980, Debate in the House of Commons (click HERE)

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November 5, 1980, Debate in the House of Commons (click HERE)

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November 6, 1980, Debate in the House of Commons (click HERE)

—–o0o—–

November 7, 1980: Senator Petten & Jean Chrétien, speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 2, then scroll to p. 46)

Senator Petten: Mr. Minister, will the proposed resource amendment that has been considered include hydro electric power? That is to say, in the proposed resource amendment

[Page 47]

will Newfoundland, for example, have the right to direct taxation over hydro power?

As you know, it is most important to my province, Mr. Minister.

Mr. Chrétien: First, you are asking me a question which is not in front of the committee because nobody has tabled any amendment. But I can deal with the offer we made to the provinces in the summer which we will be asked by some members of this committee on this side and the other side to reinstate. It was an offer to confirm the ownership of the resources by the provinces with indirect taxation in the resources field, and in the resources field the power by the -provincial government to pass legislation in inter-provincial trade, and this will apply to Newfoundland just like any other ‘province.

Senator Petten: And it will include hydro, it will apply to hydro?

Mr. Chrétien: Hydro was specifically mentioned, if I recall. I do not have it in front of me. Yes, you are right on that.

—–o0o—–

November 18, 1980: John Fraser, speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 7, then scroll to p. 105)

Mr. Fraser: […] There has been discussion about the declaration somewhere within this proposal of rights which lie with the provinces, the right of control and management of natural resources. Significantly in the exchange of letters between the leader of the New Democratic Party and the Prime Minister of Canada the word ownership was never used. Unless the wording is changed the word ownership will not appear in whatever the draftsmen decide to put into this proposal, as a consequence of that arrangement between the New Democratic Party Leader and the Prime Minister.

—–o0o—–

November 19, 1980: Graeme T. Haig, Q.C. (Chairman of the Constitution Reform Committee), speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 8, then scroll to p. 9)

Mr. Haig: Mr. Chairman, the matter of jurisdiction over natural resources is another of those matters which is of very great current concern. The Chamber’s opinion on this has been given a great deal of careful thought.

It is the view of the Chamber that jurisdiction over natural resources should continue to rest with the provinces; that those provinces should exercise the control of their resources for the benefit of Canada as a whole, and that in determining the circumstances and conditions of exporting those natural resources, whatever they may be, they should be subjected to the control and review of a national agency, presumably the Government of Canada.

The federal government must also, in addition to having a role concerning the export of these natural resources, be the ultimate authority in cases of national emergency, with the right to assume temporarily powers over all resources where the national interest requires. Of course, the question as to what constitutes a national emergency is one which would have to be carefully defined and agreed to by the provinces concerned.

The basic view of the Chamber—and it is an understandable one—is that the law of supply and demand, not in the local market, but in the world market, should be the principal consideration in matters relating to pricing and distribution of any natural resource or commodity.

The Chamber’s position, therefore, is that we acknowledge that the jurisdiction over natural resources should continue to be in the hands of the provinces which have the responsibility for conserving and pricing those resources; the conditions of export of critical natural resources should be subject to the control of a national agency.

Mr. Chairman, we ask ourselves and must continue to ask who should bear the cost of a government policy in a crisis reaction. Is it the provinces, the producer or the nation as a whole? The view of the Chamber is, as a national organization, that where a national decision is made the cost should be borne nationally.

Lorne Nystrom, Graeme Haig, p. 15

Mr. Nystrom: […] I would like to ask the Chamber a few questions about some aspects of their brief.

I notice on page 5 you are talking about jurisdiction over natural resources and that there should, as I agree obviously, be some federal rule in the jurisdiction over resources, but you also say here that the conditions for export should be determined by a national energy. I just wanted to ask you a question as to whether or not you thought there was any role for provincial governments in terms of international trade of resources, of course with federal paramouncy because I am thinking of exports and international trade and the role of the country as a whole, but is there in your opinion any role for the provinces to play in terms of jurisdiction on international trade or resources because so many of our resources are traded externally, and I think in my own province the potash and uranium and the oil that goes to the United States.

Mr. Haig: I think, Mr. Chairman, that this is one of those types of problems which besets Canada because of our federal nature and I think the position of the Chamber is basically as set out in this resolution: we do believe that in the export of the commodity, and hydrocarbons are a good example of it, where there is an important national asset to be preserved and retained for the benefit of the nation, the export of that commodity or product, whatever it may be, might quite properly be subject to federal control and the National Energy Board has in fact exercised some responsibility in that regard.

I think that the national governing body has to always exercise that right with careful consideration for the fact that the commodity is produced in a province or provinces and not in all of them, and our first concern must be that the resource not be squandered, not be dealt with prodigally, that it be preserved for as long as it is capable of preservation in the case of a renewable resource, or not exhausted capriciously in the case of a nonrenewable resource.

Mr. Nystrom: You also say in your brief on page 6 that the Chamber of Commerce acknowledges the jurisdiction over natural resources in the hands of the provinces, but you are saying under special circumstances, a national emergency, the federal government should be empowered to assume temporary provincial responsibilities in the field.

What are you asking for here? Are you asking for additional powers for the federal government in addition to what the federal government already has? The federal government does

[Page 16]

have a fair amount of power, in an emergency now they can invoke peace, order and good government, the declaratory powers under the constitution. Are you asking for something, Mr. Chairman, in addition to that or are you just asking that the status quo be maintained and what about the word “emergency”, do you have any advice to the Committee as to how we define a national emergency? It is a two pronged question.

Mr. Haig: I wish, Mr. Chairman, in answer to the second part of the question first, that we could help you in determining or defining the nature of an emergency but that of course is where the ultimate responsibility lies with a legislative body such as Parliament to determine when an emergency in fact. exists, and that is always a question of fact. It is never going to be a question of definition and the Chamber has recognized that from the very beginning.

There are circumstances in which the national interest, we speak of the national interest as being the interest of Canada domestically or in its export role, may require that the existing jurisdiction of Canada federally be exercised for the benefit of the nation. I do not think, Mr. Chairman, that we are contemplating any extention of existing power but, rather, an understanding of what it is and the circumstances under which it should be invoked.

Bryce Mackasey, Graeme Haig, p. 22

Mr. Mackasey: I would imagine—in fact I think I know—you are indicating that on those rare occasions when there is an honest difference of opinion between the various levels of government, for instance in the field of natural resources, which is really the main bone of contention at the moment—the revenue from it, I suppose; you are saying that the federal government—in your brief at page 5—should possess the ultimate authority. The ultimate authority to do what?

Mr. Haig: I think, Mr. Chairman, the ultimate authority to ensure that the resources are utilized for the benefit of the nation as a whole. This is the Chamber’s position with respect to these matters, that a resource may occur in some part of the country, but it is a Canadian resource as much as it is a provincial resource; that all Canadians, as part of the nation, should enjoy the benefit of these resources, and they should not be treated as the exclusive privilege or province of some particular region, area or province. This flies in the face of some strongly held views of some provinces; nevertheless, if we continue to perceive Canada as a national entity, I know of no other construction which can be put on that particular question.

Mr. Mackasey: So you see resources essentially as a Canadian resource belonging to all Canada.

Mr. Haig: We made it very clear in our brief that the responsibility for the production and administration of those resources and the handling of them domestically is a provincial responsibility. It has been there for a number of years and on the whole they are well handled. It is only in what I would call circumstances of extremism that we have departed from that position in a narrow field.

The concern of Canadians is that we are not doing this as a consequence of a consistent policy, but rather with a great deal of ad hockery.

Mr. Mackasey: I share your concern, Mr. Hughes and Mr. Haig, in emphasizing Canadian policy, or fulfilling its function as a national government. We must not do that in a discriminatory fashion. The rewards and penalties should be shared equally across the country. I agree with you.

Nethertheless, you have made a case that in the ultimate, in the end, there must be someone to take charge. You see that as a federal role. I am not asking you to answer that.

But am I right in presuming that you would see Canada, not as a collection of ten nation states, or not as a community of communities; but you see this really as one country. Is that the position of the Chamber?

Mr. Haig: We see it as one country, and as an economic and political union which contains within its limits, economic regions, with different strengths and weaknesses, and to go back to our discussion on transfer payments, we have tried to create for Canadians, notwithstanding where they may by circumstances live, a basic fundamental lifestyle and standard that they can enjoy; but if they are prepared, for example, to go and live in the Northwest Territories or in that equally

[Page 23]

bleak part of the world, Northern Saskatchewan, then they should be rewarded for their willingness to do so. We accept and acknowledge that to be a fact of life.

Mr. Mackasey: Mr. Haig and. Mr. Hughes, is this the general feeling of the members in the West as well as in the East, the desirability for a strong federal presence?

Mr. Haig: Mr. Chairman, the position we have presented to you here today, is a position which has enjoyed the approval of Canadians from every province and territory in Canada.

The questions and inquiries were put in every province. When the material was finally prepared by the Committee in which I participated, it was then sent to all parts of Canada with a request that they comment, add to it, if appropriate, and request deletions, where necessary.

I am happy to tell you that we received back from across Canada a strong majority of opinion from all areas of Canada in favour of what we have presented to you today as our basic position.

Mr. Mackasey: Respect for the provinces, but with a strong federal presence, a strong federal government with the ultimate authority in times of impasse to act on behalf of all Canadians?

Mr. Haig: On national matters.

Mr. Mackasey: Of course.

I just want to tell you, Mr. Haig, that the proposed changes to the constitution in no way affect the balance of powers.

Senator Goldenberg has drilled that into my mind quite properly, that we are doing nothing to upset that balance.

If the balance, hopefully, has to be redressed, it would be done in the future when we are amending our own constitution here in this country.

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November 17, 1980, Debate in the House of Commons (click HERE)

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November 18, 1980, Debate in the House of Commons (click HERE)

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November 19, 1980, Debate in the Senate (click HERE)

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November 20, 1980: Edward M. Hearn (Member, Newfoundland Branch of the Canadian Bar Association), speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 9, then scroll to p. 81)

Mr. Edward M. Hearn (Member, Newfoundland Branch of the Canadian Bar Association): […] While Quebec receives upwards to $1 billion annually from our Labrador resources, our province is in severe economic straights. We have the highest rate of unemployment and the lowest level of public services in the country. Despite the considerable amount of federal financial support, Newfoundland has incurred a debt in the amount of a little less than $3 billion to reach its present level of development. This crushing debt level is by far the largest per capita debt of any province in the country and is comparable to the debt ratio experienced by the poorer Third World countries.

Newfoundland contributes more to Canada than it receives and at the same time, it is a so-called have not Province. It is from this perspective that the constitutional proposals have to be considered in relation to Newfoundland. indeed it may be fairly said that present constitutional strictures have made it difficult for our province to alter the present distribution of wealth from our resources.

One of the objectives and we would suggest legitimate objectives of the constitution of Canada is the integration of the Canadian economy. The free circulation of goods, services, capital and workers has not always been adequately protected under the British North America Act. We are strongly in favour of improving and protecting the Canadian economic union. Yet, in considering that, let us look at interprovincial transmission of hydro power.

The proposed Constitutional amendments do not address the legitimate demands of Newfoundland to be entitled to market its hydro resources without being unduly restricted by the intransigence of a neighbouring province. While it is questioned that at the present time the constitutional authority resides in the federal government to regulate interprovincial transfers of electricity, there is no available mechanism to compel the federal government to exercise its jurisdiction.

The National Energy Board provides a mechanism whereby pipeline companies can obtain the right to expropriate a right-of-way for a pipeline. There ought to be a mechanism, similar to that contained in the National Energy Board Act for pipelines, to deal with interprovincial and international hydro power transfers which ought to include provision for the expropriation of a power corridor if it can be demonstrated to be in the public interest as well as economically feasible.

The perceived failure of the federal government to respond to the legitimate demands of our province with respect to hydro highlight the necessity of a provision in the constitution whereby a province can compel the federal government to exercise its authority where it can be shown to be in the public interest. The Newfoundland experience with hydro power clearly demonstrates that the political process can result in the undue restriction of the rights of smaller and poorer provinces.

[Page 82]

The commitment to an economic union as exemplified by the mobility of labour clause appears hollow when one province can be allowed to impede the development of resources in another province. Surely mobility rights should be extended to include mobility and free interprovincial access of goods, capital and services.

The time, Mr. Chairman, for constitutional renewal seems to be the appropriate time to establish and reaffirm an absence of economic barriers in Canada. If the rights of smaller and poorer provinces are to be protected, then a province has to be given some means of initiating the process to obtain its right to develop its natural resources for its own benefit as well as for the benefit of Canada.

During the present constitutional debate, there has been a dialogue between the New Democratic Party and the federal government with respect to the rights of the provinces to manage and control their own resources.

A tentative agreement was reached between the Prime Minister and the Leader of the New Democratic Party with respect to the provinces rights in those areas of management and control of certain resources as well as indirect taxation and concurrent jurisdiction in the interprovincial trade. We support those initiatives. Yet the exchange of correspondence between the Prime Minister and the Leader of the New Democratic Party excluded hydro resources from the proposed amendment. This Committee made strong representations to all political parties in Ottawa that hydro ought to be included in that amendment.

The Minister of National Revenue who is Newfoundland’s representative in the federal Cabinet has recently indicated that hydro will be included. Subject to any reservations on the particular wording chosen, we are strongly in favor of the granting and confirming to the provinces the power to manage and control their own resources including hydro, to indirect taxation and to concurrent jurisdiction in interprovincial trade subject to federal paramountcy and so long as such rights do not unreasonably discriminate between the province and other parts of Canada. We laud the efforts to accomplish this result for its economic impact on our province could be significant.

A time of constitutional change is also a time for remembering past experiences that have contributed to the development of Canada. An examination of Canadian history furnishes many examples of transfers of resources to the provinces to ensure that a province becomes a viable economic unit. Quebec and Ontario were each ceded large tracts of northern territory by the federal government. Several prairie provinces were created without ownership of their natural resources and these were voluntarily ceded to them by the British North America Act (1930).

There is both justification and compelling necessity for the federal government to follow the same sensible precedents of the past and confirm provincial jurisdiction with respect to

[Page 83]

off-shore resources. it should be emphasized that all the provinces of Canada are in favour of this action.

The National interest will continue to be served by the federal paramountcy powers with respect to interprovincial trade as well as the federal taxation powers and the federal powers in respect to peace, order and good government. These powers still allow a reasonable and fair portion of revenues to flow to the federal government consistent with the aims and objectives of that Government as expressed and embodied by the national energy policy unveiled last month.

Unquestionably, the greatest beneficiary of such a transfer of resources would be the Province of Newfoundland. The economic factors already mentioned clearly illustrate that the province has to be given access to its resources if it is to be able to repay its enormous debt and still provide a reasonable level of public services. This initiative is especially justifiable when one considers that geographic factors render it difficult for our province to benefit from such measures as the extension of the natural gas pipeline.

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November 24, 1980, Debate in the Senate (click HERE)

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December 1, 1980, Debate in the House of Commons (click HERE)

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December 11, 1980: Professor Paul L. Aird (Associate Professor, Faculty of Forestry, University of Toronto) & Professor D. V. Love (Associate Dean, Faculty of Forestry, University of Toronto), speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 24, then scroll to p. 83)

Professor Paul L. Aird (Associate Professor, Faculty of Forestry, University of Toronto): We suggest that it is important to have an historical perspective of the British North America Act and its application. At the ourtset the act gave exclusive powers to the provincial legislatures for direct taxation within the provinces to raise revenue and for the management and sale of the public lands belonging to the province and the timber and wood thereon. The act applied to the political situation in 1867. At that time there was no income tax, no property tax. Wood products consisted primarily of poles, posts, firewood, shingles, staves, hoops, squared timber and lumber. The paper industry began just one year earlier and showed no promise of becoming the giant that it is today.

[Page 84]

There was no conception of provincial or federal responsibility for protecting the forest from fire, insects or disease. There was no conception of regenerating the forests after logging. There was no conception of forest research. Yet despite the exclusive powers accorded the provincial legislatures the federal government was involved in provincial forest resource matters from the outset.

For example, I have in hand a copy of the journals of the House of Commons of the Dominion of Canada in the year 1931 of the reign of our sovereign lady Queen Victoria being the first session of the first Parliament of the Dominion of Canada and it includes the final report of the select Committee on the best means of protecting hemlock timber from destruction. Hemlock timber was being used at that time for the manufacture of an extract from hemlock bark which was exported to the United States and used in Canada for tanning purposes.

So right from the outset, since the beginning of Canada, the federal government has been involved in forest resource matters relating to the provinces. Hence we smile when we hear provincial politicians demand that their exclusive power over natural resources be continued in the new constitution. I has never been that way and perhaps never should. A strong federal presence is important to forestry in areas such as statistics, economic policy, trade, research, communications, gene pool conservation, intergovernmental affaires and others. Likewise a strong provincial presence is important to forestry in areas such as fire, insects, disease, statistics, economic policy, trade, research, communications, gene pool conservation, intergovernmental affairs and others.

So in the constitutional deliberations let us not tie ourselves to the original British North America Act. It was conceived for a different time under different conditions and has since been applied invarious and wonderous ways.

To paraphrase the introduction of Emerson’s treatise on nature, too often we base our philosophies on past traditions developed by previous generations when, since the sun shines on us also, we should create our own philosophy of insight, and I quote:

These are new lands, new men, new thoughts. Let us demand our own works and laws and worship.

So the sun shines on us too. Let us create a new constitution, that truly reflects the needs of both today and tomorrow.

Professor Love: I will try to give you a bit of a picture of the present status of our forest resource. The importance of this resource cannot be depicted without resorting to statistics. Unless you are already familiar with these statistics any

[Page 85]

quantitative terms which I might use would be discounted as rank exaggerations or at worst downright falsehoods.

The facts of the case have been exhaustively reviewed recently by the Canadian Forestry Service through many studies, the best known of which is Forest Management in Canada by by F.L.C. Reid and Associates. Professor Reid is now Assistant Deputy Minister for Forestry in the federal Department of the Environment.

Other occasions on which detailed relevant studies have been undertaken include the National Forest Regeneration Conference of the Canadian Forestry Association in 1977 and, more recently, in September the Canadian Forest Congress which was held in Toronto.

To make the recital of this statistical data as painless as possible I will highlight pertinent points as they relate to matters with which we all have some concern.

First, employment. The forest resource industry employes 330,000 Canadians. This is a direct employment; there is a multiplier factor of three which means we are talking in terms of about 1 million people. The workers represent about I6 per cent of all people in the manufacturing sector. The output of forest manufactured products is $19 billion. The farm cash receipts for grain is $4 billion, so that the relative position of forestry is established by these statistics.

From the point of view of exports in 1979 the exports from forest products was $12 billion. The net trade balance for the forest industry was $10.7 billion. This represents more than the combined operations of mining, petroleum, fish and agricultural products.

I do not feel that we need further evidence to impress us with the fact that without our forests our basic economy and our standard of living would take a deep cut.

Another important point about our forest industry which the statistics, as impressive as they are, do not reveal is its importance in developing rural Canada. When I say rural Canada I do not mean agricultural Canada but rather those areas which lie outside of the agricultural area and outside of the urban and industrial areas. This is a large proportion of our country.

There are dozens of towns and villages in every province, with the possible exception of P.E.I., which would not be there except for the development of the local natural resources. Hence, the development of these resources has been a key factor in populating Canada and in providing the equalization which we now enjoy as imperfect as it is.

Other aspects of the use of the forest and related resources, about which statistics are either nonexistent or very nebulous, are those that relate to the care and protection of the soil and water provided by the forest and the recreation and tourism that further assists in the development and better use of our country.

[Page 86]

Returning to the industrial use of our forests, which is of such importance to our economy, we now examine the prospects for the future.

In Canada we have 3.1 million square kilometres of forest land. About 75 per cent of this is suitable for timber production. From this land it is estimated that an annual harvest of 227 million cubic metres can be taken on a sustained basis. ln 1979, 162 million cubic metres were cut.

I will just repeat those figures because they are critical to this discussion. The annual harvest that we could take is 227 million cubic metres. What we have taken last year was 162 million cubic metres. Now, if you compare those two figures you will say: well, we are taking far less than we could. However, in fact, the allowable cut, the 227 million cubic metres estimate is viewed with scepticism on the grounds that appropriate allowances have not been made for wood in inaccessible locations or in species that cannot compete in world markets.

Considering soft woods, and this is our main stock in trade and the bulk of the volume harvested, the four eastern provinces, that is the Atlantic provinces and Quebec, are believed to have manufacturing capacity in excess of the ability of the land to produce raw material, and with the exception of Alberta, which appears to have a surplus, the other provinces are approximately in balance.

The seriousness of this situation becomes evident when it is appreciated that the world demand for wood products is rising and Canada has the potential in terms of land and technical know-how to take advantage of this favourable market situation.

To give a comparison, the Nordic countries, Norway, Sweden and Finland, are able to harvest 110 million cubic metres per year on a sustained basis from a forest land base of 50 million hectares. The forest land base in Canada is about 200 million hectares. ln other words. the Nordic yield per hectare is close to three times that of Canada with no real difference in the climatic or soil conditions affecting tree growth.

Of the billions of dollars that are realized from Canada’s forests in terms of provincial revenues through stumpage, federal income taxes and corporation profits, the agencies responsible reinvest some 150 million in forest renewal.

The careful estimate required for forest renewal is approximately 300 million. That is twice that which is now being invested, and the other aspects of management, including information services and forest protection and many others, including research, require an additional 300 million, thus the minimum required to keep Canada in a position to realize at least some of this wood production potential is approximately $600 million per year for the foreseeable future, and that future includes correction of the backlog of neglect from the past and the development of technology that will lead to a more efficient way of producing the raw material which is essential to maintain the groth of Canada’s first industry, the wood using industry.

[Page 87]

Canada’s problem is not its potential but in its ability to exploit that potential.

Professor Aird: l am privileged to have this opportunity to conclude our brief on natural resources and the constitution of Canada, but first permit me to emphasize some of the principles on which our brief is based.

Let us first examine Canada’s labour force distribution, and I brought along this display which is representative, it is a scale model of Canada’s labour force and we use this in the course on natural resource policy at the Faculty of Forestry, University of Toronto.

Now, this is the primary resource base. It is agriculture, fisheries, forestry and mining, and built upon this base is this part. This is the secondary aspect, secondary manufacturing and construction. This is the working force built upon this resource base. It includes the pulp and paper mills, the canning factories and things of this sort.

Built upon this is this labour force, in the service areas, which is trasportation, banking, insurance, real estate, public administration, governmental services, universities, the press. Essentially all of us in this room are in this sector up here.

Now, the tragedy of it all is, as Professor Love mentioned, that our forest resource and other resource bases are dwindling and so as this base deteriorates, so the superstructure that is built and dependent upon it must also deteriorate and dwindle and so it puts it into a bit of a shaky situation.

This is what our brief is all about, but we must maintain this resource base. This is Canada, and if we do not pay attention to this, then all this superstructure that is built and dependent upon it must suffer.

So, equalization payments come into this discussion but they will not ease all of the suffering. In fact, they resemble an award for resource mismanagement and could aggravate the problem even further, so the areas that are not effectively managing this resource base are those that need more equalization payments.

We contend that effective resource management is vital to the continued survival of Canada as a major industrial power, and Prime Minister Trudeau has said that we are one of the seven great industrial powers in the world, but we are disturbed by this constitutional debate on natural resources which is centred almost exclusively on resource ownership. resource taxation and inter provincial and export trade.

It is our view that Canada’s survival as a major industrial power depends little, if at all, on federal-provincial jurisdiction over resource ownership, resource taxation or resource trade. The critical resource issue governing the future of Canada is whether or not we will embrace a commitment to manage our natural resources to meet the needs of society in perpetuity.

[Page 88]

If we could leave you with just one thought to remember tomorrow it would be this: who owns Canada’s natural resources or who taxes them or who trades them matters little, if at all. The critical resource issue is how well we manage our natural resources to meet the continuing needs of society.

Professor Aird & Jake Epp, p. 89

Professor Aird: […] The status of forest management in previous decades is not something that we can take a great deal of pride in. Accordingly, we recommend the following amendment to the resolution before the Senate and House of Commons respecting the Constitution of Canada: whereas Canada’s natural resources are the primary source of Canada’s political, economic and social strength, and whereas Canadians believe that our natural resources must be managed to benefit both present and future generations, and I think all of us here can agree with those, therefore we recommend a motion that Section 31(1) of this Constitution Act 1980 be amended by adding a new subsection (a) to read as follows:

The Government of Canada and the provincial governments are committed to (a) advancing the management and use of Canada’s natural resources to society in perpetuity.

We put this amendment forward in all sincerity to complete the resolution before you and to thereby make it more acceptable to the assembly and to the people of Canada. Resource management for sustained production is Canada’s options open.

[…]

Professor Aird: I suggest that it would be the same government that gives the commitments to points (b) and (c) in the. . .

Mr. Epp: Do you believe it is possible for a government to give you that commitment?

Professor Aird: I suggest that if it does not, that we are in a rather shaky position.

Mr. Epp: Well, in a pragmatic sense, do you believe it is possible?

Professor Aird: Yes. l do not think we would be here putting forward this proposal if we did not.

Mr. Epp: Well, let us just take it in a practical sense. For example, this is a constitutional proposal which would bind all future governments. Now, would, for example, an individual who would feel that the government, or a government policy on either mining or forestry, just to give you two examples,

[Page 90]

that that policy in the mind of that individual had not been advancing the management and use of Canada’s natural resources and was not meeting the needs of Canadian society and especially Canadian society in perpetuity, would that individual have redress to the courts?

Professor Aird: I suggest that that would depend upon how this was incorporated into the constitution, but I see that if we violated human rights or violated other things, the mechanism that this violation of human rights would be studied and evaluated, the same type of situation here. I see the opposition, for example, playing a role in ensuring that our natural resources are taken care of.

Mr. Epp: Well, with all respect, sir, I do not think that when we are looking at this, that we are looking at it in the same form as a statute where government and opposition have a very particular role, What we are looking at here is a constitution which binds all future governments and which gives the opportunity of redress to any individual, and I just do not see in the practical sense how that redress could be incorporated?

Professor Aird: I see it rather clearly, apparently I am not very effective at explaining how I see it, but I see that a constitution is a statement of principles on how Canada will be governed.

Mr. Epp: Sir, I understand that.

Professor Aird: And we believe this statement of principles is essential in the Canadian constitution or else the other things that we are striving to achieve in the Canadian constitution will not be achievable.

Mr. Epp: Well, sir, I am not trying to be rude in any way but I am sure we are not trying to grant civil rights to trees. What I am trying to get to is in some way you have to come to grips with the issue that it is more than just principles, if principles are violated in a constitution and in this section, the proposal that you make, somehow there has to be redress and 1 am just looking at it in a practical sense, if the government through its actions feels that that policy is valid, the people of Canada can judge either in the House of Commons or in the Senate or in a subsequent election whether or not that policy was acceptable, or through public pressure. However, if you put it in the constitutional framework you are adding another dimension and I do not see how that dimension would be operative.

Professor Aird: May I ask you, are you reflecting a concern about this proposal only? Do your objections not apply equally to the other (b) and (c) items? These are government activities as well, so how are you going to ensure that our governments will further economic development to reduce disparity in opportunities?

Mr. Epp: Well, I think if one takes a look at that principle exactly, the principle of equalization, we now already have a regime of equalization and I think members around this table, for instance, would want to go beyond simply the principle of equalization but also entrench equalization payments, that principle, government to government, but here you would have a right as an individual to literally charge the government with having violated the constitution on the basis of a policy?

[Page 91]

Professor Aird: Well, I conceive of a policy which says that we will regenerate every acre that is logged. I see that as in the same category as your economic distribution and I could charge the government that does not ensure that every acre of Canada that is harvested is not regenerated, and that is the situation today. We have an incredible backlog of non-regenerated land and something must be done to focus attention on this and to make governments accountable.

Mr. Epp: Do we not do that through policies now, for example, the Environmental Department, the consciousness that has been raised in the public mind, for example acid rain is quite apart from a constitutional provision?

Professor Aird: We are not doing those things now.

Mr. Epp: Thank you, sir.

Professor Aird, Derek Blackburn, Professor Love, p. 95

Professor Aird: For example, in Ontario they have made forest management agreements with companies, and the companies will be doing the regeneration. They are writing a contract with the government which will specify which acres will be harvested or planted and what degree of success they will have, and this will be evaluated and reported along the lines I was speaking about earlier, and this is reported by legislative requirement once a year to the provincial government.

Mr. Blackburn: I follow the mechanics, but I am having a great deal of difficulty in putting this in constitutional form. You write very well and speak very well; but we are not drafting poetry, and we have to put something in here that is very clear. I do not really know how we would enforce this as

[Page 96]

constitutional law, the theory of regeneration. I agree with that.

But I just wonder if it is just the promotion of what you have said in Toronto, or whether you are really serious about putting this in the constitution.

Professor Aird: Do you mean serious about this phrase here?

Mr. Blackburn: Yes.

Professor Aird: Yes, both Professor Love and I are very serious, and Dean Love has said the Canadian Forestry Association is supporting it, so, yes, we are very serious.

But the problem is that you would like me to tell you exactly how to put it in, and I am afraid I just do not have the constitutional law background to do it.

But we are putting forward this recommendation in this way, hopeful to have your authorities, who are able to do it, to do it.

Mr. Blackburn: But you are the expert in afforestation, and you are suggesting remedies which are very far reaching in effect, and I am wondering whether you have any concrete ideas as to how we can put it in the constitution and make it enforceable as a constitutional clause.

I am really interested in that because the time is now, because if we do not have the trees, or the natural resources, then we do not have to worry about whether we are talking French or English, really.

Professor Aird: That is our point. I think we will have to take it under advisement, and we will give it further thought and come back to you.

Mr. Blackburn: We appreciate that. We are going to have continuing hearings in Calgary and Halifax on acid rain, and maybe we could continue this debate further, because many of the things which you suggest, might go into the Clean Air Act and not in the constitution.

[…]

Mr. Nystrom: Yes. In suggesting an amendment to the constitution, you are saying we should be enshrining and advancing the management and use of Canada’s natural resources. Are you talking about renewable resources or non-renewable resources, or both?

Professor Love: I think most of our discussion here has been related to renewable resources.

Certainly from the point of view of management, the non-renewable resources are terribly important in the sense that they must be used, recognizing that they cannot be replaced; and therefore, their use must be carefully scheduled, so that they are used as effectively and efficiently as possible.

The renewable resources are different in the sense that we do have an opportunity. particularly in the forest and related resources, which include water and wildlife.

[Page 97]

We do have, here, an opportunity to undertake management programs which will be available in the future.

I would like, if I may, to ask Mr. Blackburn a question respecting the detail with which he expects us to answer the question which he has presented.

What we are looking for in this recommendation is simply that the federal government and the provincial governments will recognize the importance of the natural resources to the future of Canada. We would, I am sure I speak for Professor Aird, we would be very happy, given some responsibility with respect to preparing some more detailed material that might be relevant to the question, but at this point what we are really talking about is that the drafters of the constitution will give some recognition to the importance of the natural resources to Canada, and that is all we have set out to do. We would be happy to do more if you want to give us a mandate to do it.

Mr. Blackburn: Professor Love, I cannot personally give you that mandate of course but I would certainly appreciate any information, any data, and hard facts that ‘you could send to the Committee to back up your brief more pointedly than you have had time to do this evening, and I appreciate the fact that you cannot put it all together and present it in a matter of half an hour.

I would simply like to close by saying that our natural resources are our national heritage just as the great art works in France are the national heritage of France. I am very sympathetic to your brief as are indeed most members around the table this evening.

Our dilemma, and I do not want to sound repetitious, is how do we translate your ideas, and your feelings I might add, into law so that we can hopefully someday eliminate this cross purpose jurisdictional dispute that we find ourselves in constantly between the federal authority and the provinces.

Specifically with respect to acid prescription, if you could send the Committee more detailed information, not specifically on acid rain, we have had a lot of that, but how we can apply that to our constitutional problems, whether or not it ever gets into the constitution, but at least into law so that the federal government knows precisely what it should be doing with paramountcy over the provinces.

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December 12, 1980, Debate in the House of Commons (click HERE)

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December 19, 1980, Debate in the House of Commons (click HERE and HERE)

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December 19, 1980: Allan Blakeney (Premier of Saskatchewan), speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 30, then scroll to p. 9)

Mr. Blakeney: […] Resources. Throughout the federal-provincial constitutional talks, resources have been a number one issue for Saskatchewan and for Western Canada generally, and for good reason. In Saskatchewan, for example, resources provide more than a quarter of our provincial government revenues, which are used to finance a broad range of social and economic benefits for Saskatchewan residents resources represent our best hope of providing long-term economic stability and diversity, of iron’ mg out the booms and busts of a very volatile economy resources are the key to Saskatchewan’s growth and prosperity.

If you feel that they have made us wealthy, I invite you to look at the figures for average incomes of Canadians in 1979 and you will find that the average income of Saskatchewan people is below that of British Columbia, below that of Alberta and below that of Ontario and below that of Quebec, you will see that we are not every year below Quebec but it is simply not true that we are somehow riding some bonanza. Even with these resource revenues, we are still only in the mid range.

It is hardly surprising, therefore, that Saskatchewan and Other provinces attach importance to a clarification and confirmation of provincial rights to manage and tax resources.

[Page 10]

Now, I want to underline this: rights which we thought we had but that have been called into question by recent decisions of the Supreme Court, rights that we must have confirmed. not so that we can do new and different things, but so that we can continue to do with certainty what we are now doing with great uncertainty.

Governments have made good progress in resolving the complex issues surrounding resources and we concede out of hand that the federal government has a major concern with respect to resources.

In February 1979, we reached near agreement on a so-called best efforts draft, and that is attached in our submission, but the resolution proposed by the federal government ignores resources entirely and has nothing other than patriation itself which addresses the particular needs and aspirations of Western Canadians.

As we understand it, the federal government has now indicated that it is prepared to redress that imbalance and to incorporate a resource section in the resolution. As we understand it, that section will confirm provincial jurisdiction over resource management, admit provinces to the field of indirect taxation of resources and permit provinces to legislate in areas where their legislation might incidentally affect interprovincial trade and resources. This latter is subject to unqualified federal paramountcy in the event of any conflict between federal laws and provincial laws.

What it will not do is permit provinces to pass laws which may incidentally affect international trade. For Saskatchewan, this is crucial. Almost all our resources are sold in world markets. We do not want to take over the federal government’s responsibilities for, international trade policy and any fair review of the policies of our government over the past year will indicate that we have been scrupulous in observing the federal government’s role with respect to all international contacts. But we need to ensure that steps we take to regulate the production of a resource within Saskatchewan will not be struck down by the courts merely because they are seen to affect incidentally international trade, the field that is reserved exclusively to the federal government. I repeat again, we are prepared to see any rights we have in this area subject to unqualified federal paramountcy. If the federal Parliament feels that we are off base, they need only pass a law and our law is inoperative.

We have produced a draft of a resource section in Appendix F which we would recommend to the Committee. It is patterned closely on the best efforts draft of 1979 which, incidentally, was agreed to by the federal government at that time, but we have struck out the compelling national interest test because we understand that the federal government substantially objected to that and although we would clearly prefer it, and we have replaced it by one of unqualified federal paramountcy with respect to both interprovinical and international trade.

In our view, this is a reasonable and responsible compromise proposal and I say again clearly it is not our first choice. We would have preferred the 1979 draft but, by way of compromise, we put forward this proposal.

Lorne Nystrom & Allan Blakeney, p. 24

Mr. Nystrom: The other matter the Premier stressed this morning, in addition to co-operative federalism, was the future unity of the country and finding a consensus or compromise and building a package which represented something positive for the country.

You referred to resources and to some of the powers you thought you did have as a province or provincial government under the present constitution. You have referred to several problems in the past that Saskatchewan has had in the Supreme Court in the Cigol case and the Central Canada Potash case. You referred to the need to clarify this.

I wonder if you would care to elaborate a bit more on this. I know it is at page 35 under appendix F. You suggest that you draft resource amendment. You also make the point very clearly that we have to make reference to the resources which are traded, not only interprovincially in our country, but those which are traded internationally because so many of Saskatchewan’s resources go beyond the borders of Canada.

Would you elaborate a bit on this concern and on the Cigol case and the Central Canada Potash case as to why the problems exist and why there is the need for these amendments?

Mr. Blakeney: Well, basically those two cases and the problems which they highlighted were as follows.

In the oil case our province had levied super royalties to catch the windfall profits when the prices went up rapidly in 1973. The statute was passed in the last days of 1973 as the prices were—those were the days when oil sold for $3.40 a barrel; that is simply today’s normal announcement of the increase.

We thought that they were perfectly valid. The courts held that that was an indirect tax and I think it is generally conceded that provinces ought to be able to levy these types of royalties from minerals which are produced not only on Crown land, where there is little legal doubt, but on land where the

[Page 25]

mineral rights may be in private hands, and that is the question addressed by this talk about indirect taxes.

With respect to potash, my predecessor, Premier Thatcher, in dealing with a difficult problem of a drop in the potash markets, imposed a regime which said that every mine had to produce at 50 per cent or 60 per cent capacity, and this allowed them all to stay in business. They are out there in little towns and if you close down a mine you close down a town and he said: we just cannot have that, everybody has to be on quota.

That lasted until about 1973, 1974 when the markets turned up and we dropped the quotas because everyone could forge for themselves. There was enough for everybody at 75 or 80 per cent of capacity.

However, it was attacked by the companies in the course of litigation on a number of matters and it was struck down on the grounds that it was effectively dealing with trade and commerce, and trade and commerce of a commodity which entered into provincial and international trade.

Now, we think we ought to be able to do that, to attempt to regulate the rate of production, since it has such an enormous social impact on our province, and not only with respect to potash but the same will be true with uranium mines, subject always, as I say, to federal paramountcy. If we are using this in a way which is an attack on some important federal principle, the federal government can legislate it out of there but it ought not to be struck down at the insistance of the companies when the federal government is not taking any objection to it, when it is not interfering with any appropriate federal concern, and that is all we are asking; so that we can have that measure of management to manage those resources in a way which is consistent with provincial concerns, always subject to any federal law which operates.

We do not think that is too much, and that is what we are addressing in this resource package and we would not want that struck down merely because the resource enters international trade, as virtually all of them do.

A reading of the Central Canada Potash case appeared to indicate that the judges were leaning in the direction of saying that if it had a major or significant effect on the product which is moving into international trade, then it was trade and commerce, and the province could not do it regardless of whether there was any federal law. We think that is a bad situation and all we are asking is that we be allowed to manage, and to the extent our management affects interprorvincial or international trade, anything we do is subject to unrestricted federal paramountcy, and we think our position is thoroughly consistent with a Canadian approach to resources, With local management and control; but if there is a larger national issue it can be dealt with.

[…]

[Page 26]

Mr. Nystrom: […] I would like to ask the Premier in view of the fact that what he is suggesting is an amendment to our constitution where there is clearly federal paramountcy, where if there is a conflict between a federal law and the provincial law and the federal Parliament is dominant, it is paramount, what are the reasons why the federal government would not agree with this perfectly logical amendment, then?

Mr. Blakeney: That is a tough question.

Mr. Nystrom: Are Liberals that illogical, unreasonable?

Mr. Blakeney: Let me say two things: first, I do not want to suggest that the unlimited federal paramountcy is our first preference, We wish that the federal government would state that they were acting based upon some national interest, and we had compelling national interest in 1979.

The federal government has drawn back from that, and while we very clearly prefer it, we do not want at this time to thresh that old straw.

With respect to why the federal government is concerned about it, my own belief is that the federal government is concerned about anything in the constitution which links provincial governments and international trade or any international concern because they have what I might call a super sensitivity, and that obviously is a biased point of view, it reflects by bias, about the provinces having any role in international relations.

Now, you will know from whence that comes and I make no comment on it except to say that I do not think that that sensitivity in any way applies to this issue and this problem and ought, therefore, not be a bar to us approaching this kind of a problem because it certainly does not permit any activity by a provincial government by way of making treaties or pacts with any foreign governments or generally acting in the role of representative of Canada abroad.

Ron Irwin, Allan Blakeney, p. 35

Mr. Irwin: […] I would like to start with your natural resources. l can sense your bitterness from some of your speeches, your disappointment or failures in the past and the litigation with regard to Bill C-42—the Potash case. You want the power to pass laws with regard to international trade. You do not want to deal with international trade policies, but you would like to be able to regulate your own resources.

The difficulty is the traditional federal power in relation to trade and commerce.

But, is there not some administrative mechanism which is agreeable and which could be entrenched which would satisfy not only the national interests, but could avoid future problems such as we had in the Central Canada Potash case?

Mr. Blakeney: If the administrative arrangement was entrenched as you say, then obviously that could work.

But as that term is ordinarily used, administrative arrangement implies something not entrenched, meaning it is an arrangement between governments which can be withdrawn at any time.

I would be a little alarmed at that, because we have, from time to time, our difficulties with the federal government on other issues and we would not want our normal regulation of resource subject to the constant threat of withdrawal of administrative arrangements.

It is not only provinces that use weapons in the course of bargaining, and it is not only provinces that threaten. Daily we hear about money going to be withdrawn from the social program area. I am not objecting to that, because that is bargaining. But I do not want to have this right dependent Upon the state of bargaining between federal and provincial governments as that state changes from time to time.

Mr. Irwin: Certainly, if we can divide broad principles such as equalization and language rights, and very nebulous rights and can come up with some mechanism which would satisfy

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your needs and our needs, which could be enshrined, it cannot be any more difficult than terms like equalization; yet we are enshrining equalization.

Mr. Blakeney: Well, I do not particularly see any problem with our wording.

I do not understand the level of the federal objection and what has happened since February, 1979, when this international trade question was not raised as a problem—there were problems about compelling national interest, about the declaratory power, in respect of each of which we think we were right in 1979 and each of which we have backed off from in the interest of a consensus; but this issue of international trade was simply not raised, and for the life of me I do not know what the problem is.

Allan Blakeney, p. 41

Mr. Blakeney: Well, let me attempt to respond to several things that Mr. Mackasey has said.

First with respect to the bargaining, I do not know whether the bargaining is over. It seems effectively to have stopped on the resource issue. Just let me take a moment. I want to quote from a document that was widely circulated, the Ministers eyes only document which became public at the time of the First Ministers’ Conference which says:

It is clear that no agreement with the Western provinces on this item of resources will be possible at the First Ministers’ conference without extending concurrency with federal paramountcy to certain aspects of international trade and resources. Acceptance of this principle will most probably mean an agreement with almost all provinces and will still be very much less than was contemplated in February, 1979.

Now, I believe that was the position of the federal government. I have not seen many departures from that. I believe

[Page 42]

that that is the position of the federal government and they have simply not agreed to this at all, so I think, all right, they are still playing that game and maybe, I do not know, but I just say that and I may be totally wrong on that, so I leave the question of bargaining. I just give that as evidence of saying that I would have thought time was running out and any time now would be soon enough to tell us what the federal proposition is on some of those points. That is really the essence.

Les Benjamin, Allan Blakeney, p. 47

Mr. Benjamin: Thank you, Mr. Chairman and Mr. Blakeney.

There are two areas I would like to ask you a question about. One of them will be a triple question in one area and another question in another area, that is on resources and on your very limited comments about Part IV.

As a result of bitter experience in our province in terms of what we thought we had in the BNA Act, I am wondering about the word “primary” in Section 2 of your resources draft, in each province the legislature may make laws in relation to the exports from the province of the primary production. What if the province chose to semi-process or process that production before it went into export? Does not the word “primary” place some possible limitations on that province?

Secondly, in the area of a regionally balanced package, does the suggested Saskatchewan draft cover the matter of off-shore resources or if it does not, then I take it you would leave that up to some further negotiations or proposals from somewhere else in Saskatchewan?

My third point about it is, since I am not only not a constitutional expert, I am not even a lawyer, but your paragraph 3 which relates, I take it, to paramountcy of the authority of Parliament, relates to Section 2 of your draft and not the rest of the draft, and why not?

Mr. Blakeney: I am not quite sure that I have got the last question, I am going to consult my people for a moment.

With respect to the definition of resources, yes, it is true that if the resource is processed to a substantial degree than it is not within the rights of a province to say that boots and shoes shall not move freely or, as the case may be. An effort to define that is set out in the sixth schedule on page 36 which is:

Production from a nonrenewable resource is primary production therefrom if:

(i) It is in the form in which exists upon its recovery or severence from its natural state, or

(ii) It is a product resulting from processing or refining the resource and is not a manufactured product

That definition was worked through pretty carefully in 1979 and I think is basically acceptable.

Your second question with respect to the off-shore is correct. The Saskatchewan draft does not deal with the off-shore resources question. It did not because this is an outgrowth of the agreement in 1979, and that agreement did not cover the off-shore.

We have already indicated our view that off-shore resources should be dealt with in the same way as on-shore resources, at least in the Newfoundland case. I do not know whether we have been asked in the British Columbia case. But with respect to Newfoundland and the arrangements between Newfoundland and the Clark government, we wrote both to Mr. Clark

[Page 48]

and to Premier Peckford and said: one, we object to the process; we do not think that .the Prime Minister of Canada and one provincial premier should be negotiating with respect to the terms of the constitution, and we object to the process. But having objected to the process, we will swallow our objection because we approve of the end result and we will therefore agree with what you and Mr. Clark have agreed to.

So, we might find ourselves yet again going through an objection to a process, but a final agreement.

That is what we did with respect to off-shore minerals.

With respect to the third point, I am going to take some counsel now.

We are saying with respect to provincial regulations on the exploration and development of resources, that is a pure provincial power and is not subject to federal paramountcy and we are not prepared to have federal paramountcy with respect to the exploration and development of resources.

It is only when those resources move into interprovincial or international trade that the question of federal paramountcy arises, and it is only that the federal government might attempt to affect exploration and development of a product which is moving into international trade by reliance on their power over trade and commerce. We say yes, they have that power over trade and commerce; but we are not saying that if we explore in the province for provincial purposes you have any power; but if it is legitimately trade and commerce we say we can operate in this area, but you have paramountcy.

Mr. Benjamin: Finally, I take it what you have said about off-shore resources, that that means that provincial authority would apply, as it does for on-shore, but that the other areas would still remain not only in the federal parmountcy which you suggest for on-shore resources, but also that the usual federal authority shall apply when it comes to fisheries, international treaties, other nations and all of the other matters beyond just the limited resources matter, that the federal authority would be there in those kinds of instances.

But my final question, as I said, is that I note that you say on page 11—and I quote:

I will not comment on the many problems with Part IV of the proposed Act. It is clearly a make-weight provision, not intended to be used.

What bothers me is if it is not intended to be used, then why is it in here? Would you care to comment some, if any, of the many problems you see with it?

Mr. Blakeney: Let me deal with the first one. Yes, I agree with you. I do not see the ownership of off-shore resources or the right to develop off-shore resources if they are in the provincial sphere interfering with federal power over fisheries,

[Page 49]

the environment, international treaties, international waters or the like.

I believe that in Lake Erie the Government of Ontario asserts ownership of the mineral rights and develops them under Lake Erie. This, in no way, interferes with federal powers over fisheries in Lake Erie or over environmental issues, or at least some environmental issues there, or over international treaties or boundaary waters and the like.

Clearly there are lines to be drawn.

We assert that the federal government must have some significant control over the continental shelf if it is going to enforce the 200 mile limit, or environment, international treaties and the like, and I do not think that anybody denies that, and we certainly do not.

One other point. Dealing with Part IV—and I do not want to deal with it in extenso, but looking at Part IV it says this. First it does not apply to the referendum procedure. It is the referendum procedure which is most objectionable to us. It only deals with what I might call the Victoria Charter or the legislative provisions. That is point number one. It does not allow the provinces to put forward an alternative to the crux of the amending procedure to which we take the most violent objection.

—–o0o—–

January 6, 1981: Diana Davidson (President, Vancouver’s People’s Law School Society), speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 32, then scroll to p. 11)

Mrs. Diana Davidson (President, Vancouver’s People’s Law School Society): […] A country is not a transitory arrangement simply for the convenience of its present members. And that, I might say, is also an answer to the parliamentary supremacy argument. Because Parliament is supreme only in its continuity. The Parliament of the moment has its obligation to the past and it has to the future and so, with this business of environmental rights it is a dreadful situation in which we, are going to pass over, for example, the Province of Ontario, devoid of all the little microbes that feed its fishes, etc., and poison us.

The constitution and our national environment are our link to the future and will provide the basis for the judgment ol future generations. Some commitment to environmental preservation must be made in a Charter. Doing so will open up the courts to citizens who have long-range views and may give individuals and groups the kind of leverage against large corporations, the kind of leverage that current problems of legal standing prevent them from having.

Grant Devine (Leader, Progressive Conservative Party of Saskatchewan), p. 102

Mr. Grant Devine (Leader, Progressive Conservative Party of Saskatchewan): […] There is I believe agreement on one area of the BNA Act, and that is relating to direct and indirect taxation. I believe

[Page 103]

most Canadians favour a change in that area granting the power to indirect taxation to the provinces, although this is hardly a matter worthy of sustained national debate relating to constitutional reform.

The provinces do complain that the federal government is seeking to encroach on the provinces’ exclusive jurisdiction over natural resources. This is probably not an unfair comment for the British North America Act gives mines, minerals and royalties to the four provinces that then formed the union and subsequent legislation has passed the same on to other provinces, If the provinces own these mines and minerals by law, the federal authority cannot encroach on this right unless it is prepared to take the extraordinary steps of declaring works relating to them as being for the general advantage of Canada within the provisions mentioned above. The political consequences of such a move are surely sufficient deterrent. In addition, it is fair to say that the federal authority should not be able to do indirectly what it could not do directly. The proper interpretation of disputes in this area may only be resolved by judicial decision but in the meantime the necessity of good will, fair trading and understanding strikes me as the missing factor, not rewriting the constitution.

Indeed in a federal system where there is of necessity a division of powers, any revision of the wording is in danger of occasioning more litigation and more misunderstanding then that which has worked suprisingly well for a very long time. It is really not sufficient to say that no one thought of radio and television in l8ó7 and therefore the statute needs to be revised. Despite such lack of precision on the part of our forefathers, the fact is that a rather workable system was easily found when these modern inventions were developed.

In summary, what I want to say is it is becoming increasingly apparent that so much of the concern surrounding constitutional reform is really not a matter of constitutional relevance at all but, in fact, is the problem of adjusting to perpetual economic change in the various regions of the country. In that regard, it seems much more prudent for us as Canadians to face reality and address the problem head on as opposed to fooling ourselves with the idea, for example, that constitutional reconstruction will once and for all set the price of oil or determine who gets what share of off-shore resources. The constitution of a nation will not, nor should it, be expected to resolve those dynamic dilemmas of running a country.

It is precisely here, in this arena of regional economic development, that I see a much larger opportunity for Canadians to exploit their now well accepted principle of equalization. Enshrined or not, the principle of equalization has inherent in its nature, the potential to not only resolve many of these continuing resource development and pricing problems, but in addition, if properly designed such that provincial governments were taxed on wealth rather than resources, we could effective-

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ly reduce many existing constraints on regional economic development. I speak at length on this subject in subsequent paragraphs.

In summary, it seems to me that very little change is necessary on division of powers in the really substantive issues and, with two or three exceptions, that any changes that might be made would only be tinkering and could be accomplished by good will and agreement between the federal authority and the provinces, if they were ready to do so.

Grant Devine, p. 106

Mr. Grant Devine (Leader, Progressive Conservative Party of Saskatchewan): […] Is it not time someone spoke up on behalf of the good constitution we already have? I submit that the case for a new constitution has not been proved. I suggest the following is all we need to do:

[…]

4. The power of indirect taxation could be granted to the provinces.

Grant Devine), p. 109

Mr. Grant Devine (Leader, Progressive Conservative Party of Saskatchewan): […] Let me turn now to what I would like to call new proposals specifically linked to economic development, regional resource control and equalization.

I think it is probably well known that Saskatchewan’s optimism lies in tomorrow. Our potential for increased wealth and prosperity depends very significantly on the development of our natural resource base. Similarly, our ability to contribute to Canada in a more substantive fashion is geared to the rate of capital accumulation originating from both renewable and non-renewable resources.

A necessary prerequisite for rapid economic development in our province is confidence. The investment capital needed from private and public sources will flow into resources at a rate that is directly proportional to the growth in confidence that (1) adequate returns will be achieved and (2) that governments will not change the rules in the middle of the game, lt is fair to say that the confidence index, if we could label it that, in Saskatchewan has substantial room for growth in the years ahead.

The manner in which the constitutional resolution addressed the resource question will have a paramount effect on the development of resources in this nation. First, it must bç recognized, that the unilateral action by the federal government with respect to the constitution, coupled with the recent budget, has significantly diminished the investment climate in Saskatchewan and further tarnished the trust and therefore confidence of Saskatchewan investors. The sad consequence is that when resource development slows down in Saskatchewan, Canada loses.

Saskatchewan is often referred to by many of its residents as “next year country”. While we are by nature an optimistic lot, the realities of today are that much more difficult to endure as the dreams of prosperity tomorrow are threatened by the increasing burden of federal tax on our resources.

Today the federal government taxes Saskatchewan resources, our future, but not our wealth, because the wealth is

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not there to be taxed. Furthermore, the wealth never will be recognized if the present policies are continued by Ottawa.

For example, since 1974 Saskatchewan has sacrificed over $3.2 billion in provincial income by selling oil for less than the international price. Eastern Canadian consumers of Saskatchewan oil received $1.9 billion in benefits and the federal government collected $1.3 billion in oil export tax. The federal government collected an additional $400 million in corporate income taxes from Saskatchewan’s oil production and nearly $130 million from a special excise tax initiated in 1975.

Consequently, Saskatchewan people have contributed to other Canadians over $3.5 billion from one non-renewable resource—oil-since 1974, while Saskatchewan received only $1.8 billion in royalties and tax from the same resource.

And how has the Saskatchewan economy fared as a result of this federal resource tax scheme? The answer is: we have not fared well.

Saskatchewan’s per capita income remains well below the national average and fails to grow as quickly as in other parts of Canada and has failed to even keep up with the rate of inflation since 1976. Personal income tax rates in the province have increased 35 per cent, as a percentage of the federal tax, since 1971, resulting in one of the highest levels of tax in Canada.

Similarly, there have been increases in health tax, education tax, corporate tax and municipal tax-all indications that the current federal system does not, as expected in theory, provide for social services with only modest increases in the level of provincial tax.

As a consequence of the federal and provincial tax schemes, there have been several corresponding signs of a reduction in the quality of life. The province of Saskatchewan spends less on health care per capita than any province west of the maritimes. We are the only province in Canada suffering a net decline in rural population—over 50 per cent of the towns and villages are dying-and our total population remains virtually where it was in 1936; public utility rates in Saskatchewan are escalating rapidly and the general level of social services in the province is falling behind public expectations.

The situation in Saskatchewan was perhaps best summed up by Premier Blakeney in his address to the Ontario Select Committee on Constitutional Reform in September, 1980.

Our personal income per capita in 1979 was below not only Ontario’s, Alberta’s and British Columbia’s, but Quebec’s as well. It is simply not true that we are

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wealthy, certainly not true that we have been wealthy over any considerable period of time and could therefore have built up our public services. One needs to be wealthy for l0 to 15 years before it reflects in roads, schools, hospitals and all of the things which come from having wealth.

The point is, the federal government should tax provinces on their wealth, when they develop it, not tax their resources, which takes away their ability to create economic activity and accumulate wealth. If a resource like oil makes Saskatchewan wealthy, then tax the wealth and redistribute the income to all Canadians, but do not force Saskatchewan to pay Ontario and Quebec just because we have a particular resource, when they are much wealthier than we are.

There is a growing tendency in the Government of Canada to be more concerned about the growth in Government revenues than the growth and economic development and wellbeing of Canadian citizens. In the case of oil in Saskatchewan for example, the federal government receives $21 for every barrel of oil exported from Saskatchewan to the U.S.. The industry and the province each receive approximately $7 per barrel. As a result oil production in Saskatchewan has declined over 35 per cent since 1970 at a time when oil supply.is commonly recognized as the key to our Nation’s future economic prosperity.

Most every oil company I know in Western Canada is decreasing its investment in Canada and increasing investments in the United States.

The inconsistency of government activity is the major cause of considerable distrust among Canadians today. The federal government believes that the oil industry might make windfall profits so it keeps the oil price low in Canada, but taxes Canadians to pay the world price-and windfall profits-to oil producers in Mexico, Venezuela, and the Middle East, why should the federal government be trusted when it is generally agreed that this country needs rapid development of the oil industry and yet Canadians are less entitled to resource revenues than are foreigners. We are paying fortunes—lost forever—to other countries, from whom we receive no security of supply, with dollars we do not have.

Some Quebec politicians say they support resource control by the provinces, yet they argue for nationalization of the oil industry in Canada and oil prices set in Ottawa and kept low. The Government of Saskatchewan says it wants control over provincial resources to return the benefits to the people of Saskatchewan, but it is the only provincial government in all of Canada that has offered to give the federal government 50 per cent of all provincial future old oil revenues. Similarly, the

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Government of Saskatchewan says it wants control of natural gas to safeguard the people of Saskatchewan, yet in the face of a 4O-year surplus supply in Western Canada, the provincial government denies the farmers of Saskatchewan the right to use it.

We are increasingly concerned about the inconsistency of the Saskatchewan Government’s position. The national energy bank proposal will mean the Government of Canada would receive 50 per cent of all future old oil revenues. We reject most strongly the Saskatchewan Government’s proposal of a national energy bank and hope that the inconsistency of the Saskatchewan Government’s position will not mislead the Committee into misunderstanding the firm desire of the Saskatchewan people to control their resources. The control of our resources is simply not negotiable.

I have a belief, shared I believe by most western Canadians, that if we become more wealthy and confident in our abilities to solve our social and economic problems, we will contribute most generously to the rest of Canada. But please give us a chance to prove it. Do not take away our resources, or the benefits thereof, before we have had a chance to prove to Canada that we can act responsibly and in Canada’s interests as determined by all Canadians.

Trust us to be good Canadians. Trust us to treat the rest of Canada fairly. Trust us in Saskatchewan and western Canada to be full and equal partners. Do not take away our resources and our wealth potential before we have a chance to prove ourselves as Canadians. Trust western Canadians to use our resources for the people of our region and our country. Let us build on our resource$, all of Canada will benefit.

The unequivocal acceptance of the rights of provinces to own and control their resources could lead to an exciting new principle of equalization in this country.

The principle of equalization, the sharing of revenues among provincial partners in a federal state, has become an important facet of our Canadian heritage. It is my belief that the concept of equalization could be employed to much greater benefit for all Canadians and embodied in the constitution.

A properly drawn equalization formula would not only create a healthier economic climate and thus more wealth for all, but would also provide a more efficient and fluid mechanism for federal-provincial adjustment to dynamic economic circumstances in resources and technology in the years ahead.

If allowed to function properly, a contemporary equalization program could strengthen regional equality, better recognize and respect regional differences, and needed confidence for more rapid economic development, reduce the often high levels of bureaucratic duplication and increase the wealth in growth areas while subsequently enhancing the contribution to slower growth regions. The key element in allowing this equalization

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concept to perform is to reduce the federal constraints on provincial and regional economic development that is tax the wealth, not the resource, with the specific understanding and agreement that the benefits are shared directly with less economically fortunate regions.

The level of sophistication in the provincial governments of the 1970’s was so dramatically improved that they bear little resemblance to the administrations of the 1940’s, 1950’s and 1960’s. The capacity and growing responsibility of provincial governments of all political persuasions to manage billions of dollars annually has demanded a level of professional expertise not previously apparent in earlier times.

This new managerial capacity and sophistication must not only be recognized by the national government but should be exploited to the benefit of the country. In fact, to attempt to smother or reduce this evolutionary potential at the provincial and regional level is to challenge contemporary and technological times and invite outright antagonism from the very people that are striving so very diligently to perform.

What I am talking about specifically is for the federal government to recognize that in many regions of Canada today, and certainly in my region, the federal government is perceived to be, and not entirely without justification, a threat to economic development rather than an ally, thus, in my mind this is the time for the development of a full and absolutely unequivocal partnership between the two levels of government in this country. More specifically, it means agreement on constitutional jurisdictions deemed to be of common interest to both levels of government and it means no right of paramountcy without the unanimous agreement of the partners.

What this initiative would do is show respect-the key to successful federalism, and what this initiative would capture, for Canada, is phenomenal growth, productivity, wealth and substantial economic independence for the nation within the decade.

Most actions of the federal government to date only reemphasize to western Canadians that the provincial governments are best able to solve their economic, social and developmental problems.

Regional equality would be strengthened by the very act of recognizing provincial governments as full partners in the confederation. Similarly, the potential for economic equality significantly improves because of the added incentive for regional capital accumulation on the one hand and because of the larger regional revenues accumulated for redistribution and reinvestment into other parts of Canada.

As a consequence of the expanded capital accumulation in each province, the unique cultural and geological attributes of various regions would be both better recognized and developed by local administrations more intimately aware of them and now more financially capable of action rather than rhetoric.

Grant Devine, p. 116

Mr. Grant Devine (Leader, Progressive Conservative Party of Saskatchewan): […] 5. We propose that the provincial governments be given the full opportunity and trust to develop their natural resource and subsequently be taxed on their wealth and not on their resource base. The principle of equalization, sharing revenues between provinces, should be further expanded to provide maximum incentives for full economic development in every province. In the context of a renewed and unequivocal partnership, both provincial governments and the federal government should have access to all forms of taxation.

Senator Roblin, Grant Devine, p. 117

Senator Roblin: […] I want to come to what I take to be one of your main points and that is this question o[ natural resources and how they are to be handled in the economic interplay between the two levels of government and the industry in our country. I take very well the point that you make about its important relationship to the future of what has been perhaps a disadvantaged section of the country in days gone by which is perhaps moving out of that stage pretty rapidly now, but you make the distinction between taxing the resource and taxing the wealth. I think I know what you are driving at but I wonder if you could expand on that point for me, what is the difference between taxing the resource and taxing the wealth that the resource is producing.

Mr. Devine: As I suggested in the brief, Saskatchewan today remains a have-not province, that is it receives equalization payments because their income is below the national average and the tax base is not there. We have, as have many regions of Canada, the exciting potential to increase that wealth, to be a major contributor, and if in fact we can develop our resource base and particularly our non-renewable resources and invest them into our province through incentives particularly to renewable things like agriculture and timber and tourism and the things that will sustain economic activity for years to come. Now, we are prevented from doing that as we are today because we have a particular resource, by the federal government coming in and saying I am going to take half of that resource now before you even accumulate the wealth we can never get on with the job, and when that

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non-renewable resource like oil, for example, is gone and we have not invested it in our province and our province is a very big part of Canada, we loose.

So what I am suggesting is, why tax us because we have a particular resource? The universal medium of exchange is wealth, is dollars. As we accumulate those dollars surely we are willing to divide up that wealth to the rest of Canadians, but let us accumulate it. Let us build. The way it is today a good part of that resource is taxed before it even gets into the province, into economic activity, and it is gone and redistributed and as a result Saskatchewan, which is poorer if you will than Ontario and Quebec, has to pay money to Quebec and Ontario even though their incomes are much higher than ours, and on top of that we do not win. Our income stays below the national average and our economic activity does and our income does not move as fast as the rate of inflation.

So let us get on with the principle and opportunity by building there by reinvesting those lunds again and again and wealth will accumulate and goodness knows there will be lots to tax but what it allows is growth and that is what has been happening in Saskatchewan or in Canada from an economic point of view is that we have not been taking advantage of the resource potential and growth, in my mind. We have been too busy taxing. To be benevolent you have to have something to give. Let us really be benevolent, trust us to build, trust us as Canadians to take that wealth and build for the nation and tax on that wealth. If you take it and tax the resource now, we never have that opportunity.

Senator Roblin: I suppose one of the problems is that at least one level of government is anxious to get its tax collecting hands on that resource as soon as possible. I suggest that how perhaps that part of the problem might be met without so radically revising our present system as you suggest, would be to make sure that in the case of oil, for example, that it does rise in a reasonable relationship to international prices rather than our present policy of federal control on that.

I will leave that argument because we can pursue it at some length and I have a couple of other points I would like to get off my chest.

I am interested in your argument about equalization and of course I appreciate that relates to the resource, the wealth creating capacity of a province.

Mr. Devine: Right.

Senator Roblin: But you have a novel idea here as far as this Committee is concerned, I think, and that is that you suggest that at least part of equalization should not be solely that money that flows from the province into the federal treasury and then is redistributed by the federal government but rather the provinces that have the wherewithal above the national average should contribute directly to provinces which are in need. Is that your proposition?

Lorne Nystrom & Grant Devine, p. 122

Mr. Nystrom: […] As you said, you are talking here about a tax on provincial governments.

Could you explain how you see this? We do not today tax provincial governments. Are you talking about Ottawa imposing a tax on Saskatchewan or Newfoundland? This is a radical departure in our policy.

Mr. Devine: Maybe I could go back and try another example. The federal government today it seems to me says that I am concerned about windfall profits in the oil industry. But if there are windfall profits in the oil industry it is the fault I would suggest of the federal government for not taxing them properly and if it is their responsibility to tax them and they are not doing it right why turn your frustration on to the province and tax the provinces resource? That is in essence how people in Saskatchewan view it. They say, all right, if you think it is unfair, fair enough, but why do you not change those tax laws to address the problem directly as opposed to picking on poor Saskatchewan or anyone else and saying, well, I am going to have 500 million dollars this year out of your oil before you get a hold of it. It seems to me two things, if they were changed, if they do not like windfall profits well then tax them, that is a responsibility and, number two, allow the province, whether it is Saskatchewan or Alberta or Newfoundland or whatever to invest that non-renewable resource money to create economic activity and then you have lots of people to tax, lots of multipliers working and more wealth and more tax because not only does your tax base deepen but it increases in breadth and it grows in terms of population with that economic activity. So I am not saying that the federal government has to come out with a new tax. It has every tax possible imaginable at its discretion. Just use it on the wealth as it is created rather than taking it from us because it feels that the oil companies are making too much money.

Mr. Nystrom: No, I certainly agree with you that we have been taxed much too heavily by the federal government in our province on oil because of the export tax, and you say about $21 a barrel goes to the federal government while about $7 goes to the province and $7 goes to the companies, that is very unfair.

[Page 123]

My question is that following on page eight of your brief you are suggesting that provincial governments may be taxed on wealth. In other words, you are talking about a wealth tax on provincial governments and I think that is something new, maybe it is a misprint in your brief. I am not sure.

Mr. Devine: No, I am not saying taxing provincial governments, I am saying taxing the wealth there that creates or that is created in the province like they tax today. It is not a new tax on the provincial government.

Mr. Nystrom: Maybe it is just a misprint because you do say in the brief that if properly designed such that provincial governments were taxed on wealth rather than resources.

ln terms of a wealth tax, then, would you apply a wealth tax on a fund such as the Alberta Heritage Fund?

Mr. Devine: That is a problem that is related, I suspect, to both Saskatchewan and Alberta because of the heritage funds there, and I am not sure that it is totally resolved as yet. Certainly it is the view, I would suspect, in Saskatchewan, and I cannot speak for the Premier, but I would suspect it is his view, and certainly I would. think it would be the view of the Premier of Alberta, that a good part of the non-renewable resource wealth should be reinvested into that province because when it is gone, it is gone, and we have nothing to show lor it. If we can take non-renewable resource wealth in Saskatchewan and invest it into renewable, long term sustained activities like agriculture, like tourism, like timber, then we can have economic activity for years to be taxed by the federal government for future generations.

Now, there may be some balance, some point in time where you will say: well, if it is building up too big or some share or some resources may be renewable or non-renewable, but I would like to raise the point with the Committee and I am very glad you raised the question because it is very applicable, in the Alberta Heritage Fund, I believe now there is about 7 billion dollars and people say that should be distributed across the country, or I have heard people say that when I am sitting in eastern Canada.

I would like to remind the Committee that Ontario Hydro is valued at $14 billion, and I have not heard cries from western Canada to redistribute Ontario Hydro. Now, what Alberta maybe could do is take the $7 billion dollars and buy Calgary Hydro.

Mr. Nystrom: Would the wealth tax be applicable to Ontario Hydro under your scheme?

Mr. Devine: Well, this is my point, if they bought some form of hydro then it is not likely to be because Ontario Hydro is not. As Bob suggests, Ontario Hydro creates wealth and economic activity and jobs and prosperity, so Ontario can contribute to other provinces that are have not. So if in fact the heritage funds in Saskatchewan and Alberta are creating economic activity, being funnelled into research and development, buying hopper cars, building ports, spent on transporta

[Page 124]

tion, spent on health care and so forth, not only the province but the nation is being improved.

An hon. Member: And by the provinces.

Mr. Devine: And financing other financial things in various other provinces.

Now, it is a question of negotiation whether that should be taxed immediately or how much of it someplace else, if in fact it is creating more in the province of Saskatchewan and Alberta than it would be anyplace else, therefore there is more to be redistributed.

Mr. Nystrom: In terms of resources, I wanted to ask Mr. Devine a couple of questions as well.

You say on page 12 of your brief a number of things you would like to see in terms of the Canadian constitution, and there is no direct reference there to resources. Point 4 on page l2 says the power of indirect taxation could be granted to the provinces and of course this would apply to the resources as well.

I was wondering whether or not you differed from any of the recommendations made by Premier Blakeney in his constitutional energy policy to this Committee, namely to his reference to having concurrency in interprovincial trade, international trade, the right to levy indirect taxation, confirmation of provincial ownership ol resources, and I say that knowing that you know of course the history in the province as well with a court case over central Canada potash and the Cyvol case and the problems we have had there with jurisdiction.

Do you endorse his energy policy as far as constitutional changes are concerned, and if you do not where do you differ, if you have any additions what are they, if you lave any deletions what are they?

Mr. Devine: Well, what I was trying to do was be a little bit more realistic, I believe, than the Premier of Saskatchewan by suggesting that we could do what we want to do in creating economic activity and promoting regional development without major modifications to the constitution, changes in the constitution will not set the price of oil and will not decide who gets what share of the revenue from any particular resource.

I am suggesting here that if the federal government would accept it, fine, we will enshrine indirect taxation in the constitution so the provinces can have that right or have concurrent power over interprovincial or export trade, but I am not sure that we will. I am not convinced that they will. What I am suggesting is that you can do it by agreement, we have done all kinds of things by agreement in the past because we have accommodated and traded and negotiated in trust, so what I am suggesting is, alright, they could be enshrined in the constitution, equalization can be enshrined in the constitution and certainly the power over export trade to be concurrent jurisdiction because it concerns both.

However, what I am suggesting is that we need not have major constitutional reform to get on with the job.

[Page 125]

Mr. Nystrom: Is it important those three or four items be enshrined in the constitution?

Mr. Devine: Well, again, I would go back and say I believe that we must be careful and take our time in changing the constitution because it is not a panacea. If it were just enshrined you could still have debates over the price and you can still have problems with Section 125, that could lead to a lot of debates.

So I am saying to Canadians: do not hold your breath just because something is enshrined in the constitution, say concurrent powers, and we could say that is important; it would not set the price and there could be major disagreement, and then if there is confrontation on Section 125 we could see this rush to see who can nationalize the industry first because there is no taxing on other governments property.

John Fraser, Brian Tobin, & Grant Devine, p. 135

Mr. Tobin: One last question. I thank you very much for your answers thus far. Nearly every provincial government representative, whether from the government or opposition, coming before the Committee in recent months or years, have been talking about granting more wealth to the provinces, the federal taxing less.

ln fact, you gave a very good description of your feelings with respect to resource taxes and all the rest of it.

Assuming the federal government were to say “Okay, perhaps we are taxing the provinces too much and perhaps we should leave more of the wealth in the provinces to develop provincial economies.” It would mean that the federal government would have to cut back on some of the services that the federal government now provides. I am thinking about some of the social programs, like old age pensions, for instance, that are available which may or may not be affected.

Let me ask you as a man who could be Premier of Saskatchewan some day, and I ask you seriously what programs would you have the federal government cut back, do away with because we are running a tremendous deficit as you know already, in order to give to all ten provinces a bigger share of the Canadian pie.

Mr. Devine: That is an excellent question and I am glad you asked it. It is a gradual process, you do not tax less, you tax differently and you take the time to create wealth so that in fact you can even tax more il you stop constraining growth. Let me give you an example.

Mr. Tobin: They would have to be immediate cuts while we are waiting for this pot to grow-what immediate cuts would you make?

[Page 136]

Mr. Devine: No, you do not have to have-you move in incremental steps and changes in taxation, from taxing resource to taxing wealth, if you will, through income tax, you do not just go bang and stop just like equalization did and just start and stop. You do it in incremental steps but you tax differently to give incentives to all Canadians in every province to create wealth rather than taxing their resource now that keeps them from creating it.

The example I wanted to suggest that again to be benevolent you have to have something to give. The average welfare recipient I believe in the province of Alberta receives something like $10,000. In Saskatchewan they receive something like $7,000 and Saskatchewan is very concerned about people. To be benevolent you have to have the wealth to give. What I am talking about is the change in tax structure over time to allow us to create more in Canada. I often think, just speculation, what would Saskatchewan look like if the Japanese had it for ten years? The resource potential is there and we can build that because we have so much of it here in Canada. It seems to me as an economist it is foolish to be constraining that less than we have to if we can readjust our mechanisms and tax and equalization.

[…]

[Page 137]

Mr. Fraser: […] Now, as a Westerner I say that is absolute nonsense. The other thing I add is this. It does nothing to enhance the unity of this country to put a tax on Western natural gas unless you are going to put an equal kind of tax on central Canadian resources.

Now you are a Western Canadian and I am a Western Canadian and it is time that somebody told the Liberal members in this Committee just what causes the aggravation and why there is so much dissension in the West. I would invite you to respond.

Mr. Devine: We would need more time, Mr. Chairman. It would not last very long, in respect to the heritage funds that we are trying to create, we have created something like about a billion dollars in Saskatchewan and maybe seven billion in Alberta but as I mentioned Ontario Hydro is valued at 14 billion. If you really want to go after funds, go alter some here.

Now, we could remove that in a pot if you will and certainly Saskatchewan has, in investing in things, and Alberta could take their seven billion and buy Calgary Hydro and then it would not be so obvious, or we could buy some more property, but if we do not use that money to reinvest in Saskatchewan into renewable long term economic activities we will be have not-provinces for ever and ever because we will have the land base. Those nonrenewable funds are our ace in the hole, and if we loose those we have lost it all.

With respect to the same treatment, the best example or one of the examples I can think of is Canada buys bulk or crude from the Middle East; or Quebec buys it, I believe, for about $35 to $38 a barrel and we subsidize them to the tune of $16.75. Quebec, I believe, uses that bunker crude to make electricity and exports the electricity into the United States at world price. That is the kind of thing that that farmer that I was talking about says, well, I am a good Canadian and I will share but at some point in time you have to stop constraining me because I am not going to be benevolent forever. I have this potential and my children want to stay here and I have this heritage, do not cut me off before I get started.

Mr. Fraser: One last question, Mr. Chairman. Is it not because of those kinds of imbalances in fairness, I listen constantly to the Liberal federal government say the essence of Canada is sharing and to a Westerner it means paying more than world prices for what central Canada produces and getting half of what our non-renewable resources are worth

[Page 138]

when they are sold back to central Canada. Is that not one of the reasons why in this constitutional proposal that is in front of us the amending formula becomes so important especially when Section 44 would remove the right of the Senate to stop a constitutional amendment which would be against the interests of a province or a region and especially when you have got a referendum in which the whole prerogative and initiative and choice ol timing and wording and the use of the federal funds lies with the federal government; in other words a massive shift of power to the federal government.

Mr. Devine: I suppose to summarize it, people in Western Canada are trusting the federal government less and less daily because of experiences from the past coupled with the budget that came out that attacked our nonrenewable resource, aid that is how they felt, that they were attacked. Then on top of it, a unilateral move to change the rules, not only of parliament but of the very foundation of the country and all I am suggesting to the Committee, if they do not want to create more divisiveness in the country, take the time to listen. Listen to Canadians, listen to them all across this country, because their integrity and their trust in this country, their patriotism is there, but it is not beyond being destroyed if you move too quickly. Take the time to listen.

[…]

[Page 139]

What we are suggesting with the Bill of Rights is to make certain that people with the same vision as those who provided this wonderful way of life, that somehow these rights which we take for granted are enshrined where they cannot be dissipated by a stroke of a pen. When you talk about taxing wealth, I understand that. The wealth in your province comes from the ground where the wealth from Ontario comes from industry, so it is not a far fetched concept, but one that intrigues me.

You have used the word trust, and I might say too that one of the things that I can understand with the West, being concerned if Mr. Fraser goes home to the West on the weekend and creates the impression that perhaps to his audience and up here in Ottawa he spends all his time in the House of Commons defending the heritage funds of Saskatchewan and Alberta. I hope the fund grows and grows and grows and grows because it is being accumulated by the direct act of your province and you have the full right to do that. If the people of Saskatchewan and Alberta are happy to see the money remain in the heritage fund rather than improve the lot of the underprivileged in Alberta and Saskatchewan, so be it.

Ron Irwin, Jim Hawkes, & Grant Devine, p. 145

Mr. Irwin: […] Now, you have dealt with resources. I might remind you that prior to 1930 or 1931 the resources of Saskatchewan belonged to the federal government, prior to that time. It is not, to quote some of the bands that came here, an aboriginal right that went from time immemorial to the Province ol Saskatchewan, it was at one time within the province of Canada and under our jurisdiction, and the only reason you have it is that in 1930 or 1931 it was given to the Province of Saskatchewan.

Now, coming from Sault Ste. Marie, and I notice that you have Mr. Trovich from Sault Ste. Marie who has also moved to Saskatchewan as one of your main political advisors, we feel and are offended by suggestions that we are part of that great nasty group from around the Toronto area. In the North we have the same problem in Saskatchewan, lack of transportation facilities, resource base that is not adding manufacturing jobs, many of the same problems, and when you suggest today that we are part of this eastern complex that is out to get the West, I resent that because I hear it almost regularly.

Now, I want to remind you from 1960 to 1973, or thereabouts, because of the imaginary Ottawa line we paid 25 per cent more for our oil in northern Ontario so that you could have a western market, When the price was 25 per cent less on the world market, we paid more and shared with our money so that you could have a market.

The copper industry was held low domestically because the federal government thought it was wrong to have a high price. We bolstered up the wheat market and gave a higher price to the West because we thought it was fair. Ontario has never received one penny in equalization, even though equalization has been owed to Ontario, it has never been claimed, and we have taxed electrical power in the past.

Now, you say today, you talk direct taxation and indirect taxation, you say leave these resource industries alone. The oil companies, 70 per cent of which are foreign owned, they are all multi-nationals, the big ones, made over a 400 per cent profit increase in the last ten years and 50 per cent last year, and an increase of 50 per cent the year before.

Now, I want to know from you, if we are not to tax the rich, then who should we get our tax from to pay for these programs in Canada, the poor?

Mr. Devine: Well, let me point out that from my experience the responsibility for deciding on profits in the oil industry, the tax level, it rests with the federal government and if you are unhappy with the amount of profits that the oil industry is making, then for heaven’s sake, within your own bailiwick, if you will, tax them more but do not tax Saskatchewan and its resource, take it away from us because you are unsatisfied with the way you are dealing with the oil companies. That is my point, and in heavy oil out of Saskatchewan on an annual

[Page 146]

basis you take from us $500 million a ye^r, that comes down as I mentioned to Ontario or Quebec, from our heavy oil.

Now, you are unsatisfied with your ability to tax the oil companies but you take from the province and I do not think that is a just reason to turn around and reduce the economic potential that a province like Saskatchewan has because you think that the oil profits may be too high.

The second thing I guess I find, or my fellow neighbours in Saskatchewan find is that if you are upset with monopoly profits and you do not like to pay, then for heaven’s sake explain to us why you pay those same monopoly profits and windfall gains to Venezuela, Mexico and the Middle East and you will not pay them to fellow Canadians who want to get on with the job of producing energy and increasing the supply.

Mr. Irwin: It was not the decision of the federal government to cut back by 15 per cent, it was the decision of the Province of Alberta.

Mr. Devine: Yes, it was. I have no comment.

[…]

Mr. Hawkes: […] I just wanted to highlight a couple of statements sometime near the end of our discussion with Mr. Devine from Saskatchewan and I found, I think, as someone who was born in the City of Calgary and who has lived most of my life in Western Canada, a great deal of meaning in one sentence that may not have the kind of impact that I think it should have to the Parliament of Canada and to the people that sit on the Committee, and that is on page 28 when Mr. Devine says the Saskatchewan people stand always ready to be partners but never victims in this federal state.

I think what underlies that and has been made clear with several comments over the course of this evening is the growing sense of being victims, and the Canada West Survey and the Gallup poll, the issues of separatism relate to that sense. There is no region of this country that wants to be partner in confederation stronger than the region I come from, but the word “partner” is important and the unilateral nature of the

[Page 147]

action which this Committee is participating in is not part of that partnership as we perceive it.

On page 25, Mr. Devine says “most actions of the federal government to date only re-emphasize to western Canadians that the provincial governments are best able to solve their economic, social and developmental problems”, and I go to Mr. Irwin and his interventions recently on oil, simply to say the following:

That is an industry that is currently moving to the Atlantic region, it is new there, but it is an industry that in our region we have lived with for a long time and we understand many things about it that take a long time to explain, and perhaps I can make one statement that oil that is produced, that is ready to go to a refinery, has commodity value in a world market. We talk about that as world price or North American price but it has a commodity value, but it also has in terms of the long range future of this country a replacement cost and it is the replacement cost that is of considerable concern to many of us.

You may be able, and in some wells you can produce a barrel for $2 but you cannot replace oil for $2 and we will not have it if we do not have the personnel to find it and get it for us, and in that climate I suggest to you that in my city, with its familiarity with that industry, we understand clearly that when the Petroleum Administration Act was passed in the House of Commons we set up the following situation over the next four years, that somewhere near 16 per cent of the commodity value will go to provincial governments, somewhere near 24 per cent will go in to that replacement equation, and 60 per cent of that commodity value is being used for federal purposes, and that was done without the consent, it was done unilaterally.

The constitution is unilateral; other small illustrations which were identified by Mr. Devine and of a unilateral nature. When I sat on the Employment Task Force and we travelled in the regions of this country, when you move out of the populous provinces a lot of the manpower programs are viewed as irrelevant because they do not fit the social and economic circumstances of the region, and you risk a great deal if you do not pay attention to Mr. Devine’s statement that we will be partners but we will not be victims.

If there is something in that statement that Mr. Devine or Mr. Andrew disagrees with, I wish they would identify it for the Committee.

Mr. Devine: No, I am comfortable with that.

—–o0o—–

January 7, 1981: Grant Notley (Leader, Alberta New Democratic Party), speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 33, then scroll to p. 103)

Mr. Grant Notley (Leader, Alberta New Democratic Party): […] I think in general it would be our submission, Mr. Chairman, that there must be a middle ground between extreme centralism on one hand and extreme provincial rights on the other; but moving to perhaps the first, I think really crucial point that I want to make, there should be no misunderstanding; the concensus, and I say deliberately “concensus” among Albertans is that there must be provincial ownership and control of resources.

That is a position which is basic to all four political parties in the Province of Alberta, that is the position which has been paramount, I think, as a view of Alberta’s role in the country since really 1930 when the United farmers government succeeded in the transfer of natural resources. and I think that it is important, even though some of us, Mr. Chairman, have been ardent federalists over the last number of years and have had our differences with the present administration, it is important to underline just how strongly the resource issue is felt in the Province of Alberta.

Now, I would say to the members of this Committee that we are encouraged with the proposed amendment with respect to the clarification of resource jurisdiction,

On the issue, for example, of access to indirect taxation, in the Province of Alberta, that could yield a significant amount of additional money, We are looking in the neighborhood of between $600 million and $700 million potential revenue to the Province of Alberta as a -result of the amendment on indirect taxation, but I would go beyond that, Mr. Chairman, and suggest to the members of the Committee that we think that the resolution and the amendment would be strengthened if this Committee were to recommend to the House of Commons the proposal made by the Premier of Saskatchewan that there would be clarification with respect to international trade as far as the normal controls, if you like, that the provinces should use with respect to production, conservation, etc., but clarification of that, not on a completely unconditional basis, but as I read Mr. Blakeney’s brief to this Committee, the suggestion was made by the Premier of Saskatchewan that where there is a conflict between the federal Parliament legislating in this area, and the provincial legislature, federal paramountcy would prevail; but where there is no federal legislation, it seems to me, Mr., Chairman, that there should be a clarification if we are going to be really serious about the question of provincial ownership and control of resources,

I want to underline that, because it is, as I mentioned before, not just the position of the paty that I represent, but I think it would be the position of all members of the Alberta legislature.

If I can move to deal with some of the other points in our brief, Mr. Chairman, we feel that the question of equalization is very important. We fully support equalization, we think it should refer to payments to provinces, but we also would accept the view that the provinces should have a role in equalization as well.

It is worth noting, the members of the Committee may recall that interprovincial equalization was first proposed at the 1945 federal-provincial conference, by the late George

[Page 104]

Drew. It is our submission that on the question of equalization, the provinces should in fact be playing a role.

Davis Swan (Chairman, Alberta New Democratic Party, Energy Committee), p. 109-110

Mr. Davis Swan (Chairman, Alberta New Democratic Party, Energy Committee): Mr. Chairman, members of the House of Commons and Senate, I would like to spend a few

[Page 109]

minutes flushing out our proposals with regard to national resource control.

It is important to know that the concerns over the control of natural resources have existed in the West and other parts of the country since the time of Confederation.

In the West it is particularly important because there the revenue from natural resource production and development is a fundamental basis of the Western economies.

So the concern is not really one of greed or attempting to get their own back on other parts of the country but is a very legitimate concern with respect to the basic economic foundations of the West.

For that reason, most submissions-for example the Saskatchewan and our own submissions—are calling for a very definite classification in the role of provincial governments with regard to resources.

Section 109 of the British North America Act is very weak and does not deal with resources in any clear and concise way.

As a result, our submission contains three basic proposals. Those same proposals are contained in the Saskatchewan brief.

The first is the power to regulate exploration and development, conservation and management of resources. That is a basic fundamental power of resources that we need.

The latter two points arise out of court cases which have occurred in the last decade which has brought into dispute the role of provincial governments in regulating resources, production and development. The first of those is the challenge to some of the taxation measures and to alleviate that problem we would suggest giving the provinces the right to impose both direct and indirect taxation.

The second is to give the provinces at least some jurisdiction with respect to regulating production, even if the resource is being primarily exported from the country.

This in no way detracts from the federal government’s role in respect of international relations in the export of most goods.

What it is trying to do is to give the provinces a way of legislating in areas where the federal government really is not very concerned.

What we have had in the past is that provincial laws were struck down simply because they dealt with what was perceived to be a federal matter although the federal government had not been taking any offence or were disagreeing with those laws.

For that reason, we suggest in our paper, which is very similar to the Saskatchewan suggestion, that provinces should be able to legislate in this area.

We further suggest that the federal government must have paramountcy with respect to international trade in that area, but with respect to interprovincial trade, we would suggest

[Page 110]

that the test of compelling national interest must rule, the federal government over-riding provincial powers.

We recognize that these provincial regulations should not discriminate against Canadians in other parts of the country with respect to pricing and taxation.

Rod Sykes (Leader, Social Credit Party of Alberta), p. 158

We are prepared to share. We always were and we still are. We recognize that the federal government has a right of taxation. We do not dispute that. We maintain that taxes, the sharing of tax fields has always been negotiated in this country’s history and that it can still be negotiated and must be.

So, with that provisal we say we are entitled to the product of our farms, the full fair market price and beyond that we are prepared to share by taxation with negotiation.

Rod Sykes & Jim Hawkes, p. 166

Mr. Sykes: Well, to some extent it seems to me that it is the difference between a bottle being half-empty and a bottle being half-full. We take the rather optimistic view, optimistic in the minds of some people today, that this Confederation has survived worse problems in the past.

We have good governments and we have bad governments and we have to live and work our way through both kinds.

I do not think that I would say that if, heaven forbid, there were a division in the country, that one side, one party, the West, was in fact remaining the original Canada and the other one was leaving but I can understand your argument.

I would prefer to say simply, look, we have always been partners in Confederation. Confederation has been a loose and flexible arrangement, and it must be when I stretches over such vast distances with totally different climates, totally different regions and people with a totally different history. In any part of the world but this we would have half a dozen countries at least in what is Canada. And for 100 years we have made it work. And, for 100 years of course, we have been somewhat frustrated because it is not easy. Well, it is not easy now. It never was. So let us work to keep it together.

And, Mr. Hawkes, of course, you appreciate my warning that insensitive remarks from the central government do great damage when people are angry. It is in fact, in many cases, tantamount to throwing gasoline on the sparks or smouldering timbers, the prairie brush. We are asking you, please, do not throw anymore gasoline.

Mr. Hawkes: I share that sentiment.

I am going to direct your attention to just a small part of page 6 and page 7 and starting with page 7. I do that in the context that you and your party are seeking to be the Government of Alberta and might in fact, at some subsequent election, once again become the Government of Alberta. One of the issues on our plates today is pricing. You mentioned it in relationship to agriculture. It is clearly there in oil and in other products produced by the West.

You say on page 7 that: “A just price is not negotiable.” Page 6. Okay.

Mr. Sykes: Yes, that is correct.

Mr. Hawkes: Yes.

Mr. Sykes: Page 5 and page 6.

Mr. Hawkes: Top of page 6. Page 5 and page 6, that is what it is.

Then you say on page 5, really, and you support it biblically, a just price is world price. It is commodity value price.

Mr. Sykes: It is a biblical quotation and it was to make Albertans feel at home.

[Page 167]

Mr. Hawkes: Okay. And throughout your brief you speak about working within the existing framework of law, that is what our Confederation is about.

Mr. Sykes: No, sir. No. The existing framework of custom and practice build up over 100 years. The law is something different.

Mr. Hawkes: Okay.

Mr. Sykes: I have never thought justice and law resembled each other to any great degree.

Mr. Hawkes: All right. If we just think of oil for a minute, and the situation that has been around over the last three months, and the Petroleum Administration Act.

The federal gouvernment in the distribution of power has the power to set price on interprovincial trade. And you are saying on behalf of the people of Alberta that for this product called oil we must have just price, which is world price. Within this country, then, it seems to me that the policy option which would have been available to you at that moment would have been to reduce production to that quantity required for within provincial boundaries because it is not negotiable to send it outside for anything less than just price. I am wondering if you feel, out of your travels in the province, the people of Alberta would have supported you in that kind of action, given that it is really the only possible legal response that you would have in a policy sense. Do you think the people would have supported you in that kind of drastic position?

Mr. Sykes: Mr. Hawkes, if the Social Credit government had ever been so foolish as to get itself in such a position, I would be reluctant to answer the hypothetical question. But I think the people of Alberta would probably vote it out of office.

The fact is that for 36 years the Social Credit government negotiated these very pricing formulae, the revenue sharing, the taxation fields with Ottawa and you will remember, as I do, in the fifties and the sixties that there were times when negotiations were considered very tense, but Premier Manning never lost his cool. He never called names and he never abused. Nor did people on the other side for that matter. The negotiations were always resolved and as I have said, we are prepared to share. Social Credit was and is prepared to share.

How, if you are prepared to share, and you are prepared to negotiate, and you say that the sharing takes place after you have been paid for your product, when you have your revenue, that is taxation and the settlement on the fields of taxation and the fair shares. Well, then the case you describe does not arise.

I would say that it has arisen, or the present situation has arisen simply because there has been an intransigent attitude, frankly, on both sides.

You see, you have to go back to 1973 to the tearing up of the oil royalty contracts which were contracts for 10 years, unilaterally repudiated by the Government of Alberta. Of course, it makes it very difficult for the Government of Alber-

[Page 168]

ta, the Lougheed government, to accuse the federal government of bad things in any particular negotiation because, of course, the oil industry has a long memory.

Our position is, simply, what it has been from the beginning, from the thirties with Social Credit governments and for the 50 years or 60 years or more before that: that we are entitled to market prices for what we produce. We do not expect to sell our wheat, our grain, for 75 per cent of the world price this year. We do not expect to sell our oil and gas for 75 per cent or 50 per cent or whatever of the world price or an artificial price, a blended price, whatever you like to call it. We do not expect somebody to come along and tell us that next year we are going to share our cattle and beef is going to be sold at 75 per cent of its fair value. We say markets are markets and ownership is ownership.

If we own our house, we own all our house. If we own our farms, we own all our farm and we are entitled to the products.

You have a right, the government in Ottawa, the national government, you have a right to tax the revenue. You have a responsibility as we have to negotiate that taxation, that sharing of the fields of taxation of the revenue. And we are prepared to share at that level but do not try to share before we receive the price because then you are attacking our ownership.

I cannot be a three-quarters owner of my house or my farm. I either have it or I have not.

Rod Sykes & David Crombie, p. 175

Mr. Crombie: […] one question that was asked by my friend Mr. Hawkes, because I know he wanted to ask a further question and it deals with the question of price, not particularly or necessarily directly related to the constitutional question but I think you would agree in the minds of many western Canadians the question of the constitution and the question of energy pricing are firmly fixed as one event or certainly closely associated.

My understanding from your brief on pages six and seven is that a just price to you is a world price?

Mr. Sykes: A market price.

Mr. Crombie: Well, a market price is a world price?

Mr. Sykes: Which is the world price. For those products which have access to world markets, of course it is a world price.

Mr. Crombie: My understanding is that the current discussions over the last number of months has seen Alberta moving towards 75 percent of world price. Now, you seem to be arguing for 100 per cent of world price?

Mr. Sykes: Of course, that is what ownership is about.

Mr. Crombie: All right, I just wanted to clarify that. Now, could I go to my own questions? Thank you.

Now, I think it worthwhile because it does strike me that you regard the question of 100 per cent pricing as simply reflecting the fact of ownership.

Mr. Sykes: Indeed. If I am not entitled to the full market price for anything that I think I own and sell, then in fact I do not own it.

Mr. Crombie: On the question of price, would you regard Mr. Lougheed in relation to you as a bit of a dove?

Mr. Sykes: No, sir I do not think that Mr. Lougheed is a bit of a dove; on the contrary I think he is unreasonable and intransigent.

Mr. Crombie: He is 25 per cent cheaper.

Mr. Sykes: He has refused—oh, but you are not going to be bought by that.

Mr. Crombie: Not yet.

Mr. Sykes: Because he refuses to share.

Mr. Crombie: How much are you willing to share?

Mr. Sykes: That is a matter for negotiation, Mr. Crombie.

Bryce Mackasey, Jim Hawkes, & Rod Sykes, p. 185

Mr. Mackasey: I would like, to change the subject in my last question. You talked about tearing up royalty contracts.

Mr. Sykes: Yes.

Mr. Mackasey: Would you expand on that? What is the rate charged by the Provincial Government of Alberta on the oil industry, in the form of royalties today in comparison to that. I do not think Canadians in the east quite appreciate or understand that.

Mr. Sykes: Well, I shall stand corrected by Mr. Hawkes and others who know more than I and perhaps Mr. Speaker can

[Page 186]

help me, but up until 1972-73, the Government of Alberta, the Social Credit Government, had always said that it is essential to the investment climate that you know where you stand; that people who are going to invest in a high-risk enterprise, which is what exploration and development is. shall know what they will have to pay in the form of royalties for a long time into the future.

The Manning Government introduced the term of ten years, and the province established the royalty rates at I believe, 12.5 per cent of the wellhead value, 12.5 per cent which had been the rate that had prevailed virtually since the turn of the century. Now, you might call it a standard industry rate, not confined to Alberta at all. The review for the next ten years was carried out around 1970 by the Strome government and of course, in 1971, the Lougheed Conservatives defeated the Strome government—the Social Credit government—and a couple of years later, when the OPEC nations increased prices when the market price increased sharply, apparently Premier Lougheed said, “Look, at the 12.5 per cent rate of the well-head value, we are not getting enough. This industry is making so much money that a great deal of it is going to flow down to Ottawa in the form of income taxation or otherwise unless we get a bigger bucket and intercept it”.

So, at that point, he announced to the industry and the people of Alberta, to the best of my recollection, without any consultation or warning, that those contracts, that royalty commitment which had at least eight years to run, was finished with, torn up, repudiated by the Government of Alberta, and I think he raised the royalty rates from the 12.5 per cent to something of the order of 40 or 45 per cent.

Mr. Mackasey: Cutting off from the federal government what up to then had been . . .

Mr. Sykes: Cutting off the federal government’s flow of revenue to a very substantial degree. Now that of course, was the first shot fired in the battle of greed. And it had a disastrous effect on the industry, because what next happened was that the federal government retaliated in the only way it could.

It said, “All right, you can charge what you like for royalties at the provincial level, but we will not allow them to be tax deductible. They will not be offset against income for the purpose of income taxation”. And of course, that had a terrible effect on industry, because contrary to general perceptions Mr. Chairman, the oil and gas exploration and development industry in Western Canada is not half a dozen giant corporations owned somewhere else. It is literally hundreds of small and medium-sized corporations formed as risk ventures by Canadians with participation and investment from elsewhere very frequently, but formed and managed and operated in this country under our laws, by our people.

And of course, they were the people hit right between the eyes by the cut-off of deductibility which was a result of the tearing up of the contracts by Premier Lougheed. Since then, Mr. Mackasey, we have never looked back. Now it is the federal government’s turn to fire even larger shots from even larger cannon against Alberta industry.

[Page 187]

The problem is that this damage that is being done, and it is damage, is being done to our investment climate and many small businessmen and employees who are taking risks. And, of course, they are doing now what they did again in 1974, or doing again now. They are simply trying to cut their losses and move to the States where there is a need for the development of resources and they can get at least double the return for the same risk.

The Joint Chairman (Senator Hays): Thank you.

Mr. Sykes: I have more to say if you like.

Mr. Mackasey: You are saying that the first salvo was the tearing up of agreements with the industry and then an abnormally high royalty in order to prevent the federal government from having access to its traditional fields.

Mr. Sykes: That is correct.

The Joint Chairman (Senator Hays): Thank you very much Mr. Mackasey. I think we have shaken this tree pretty good tonight.

Mr. Hawkes: Mr. Chairman, the witness invited me to make comments and treated me as an expert on the subject. I would like to make just one short intervention, that given the witness perception of just price as world price, the return to Albertans on that resource today is I think, somewhat less than eight per cent of commodity value. He talked about 12.5 per cent of royalty rate and 60 per cent because of the power in the constitution of Canada for the government of Canada to regulate price interprovincially.

Some 60 per cent of that commodity value is being used for federal purposes, either directly into the treasury or in the form of price relief, so that in effect, what existed prior to the mid-seventies as a 12.5 per cent royalty is in reality based on commodity value somewhere around 8 per cent and going to decline rather rapidly over the next four years.

Mr. Sykes: I cannot correct Mr. Hawkes because the score, if you like, after action and reaction over the years has become so complex the Alberta Government has tried to assist those elements in the industry that were most economically damaged by the federal actions, by the provincial actions and we now have a complicated system of incentive and subsidy and frankly, if anybody knows where he stands, I think it is a miracle.

And as a result, of course, investment capital is leaving the country and instead of being independent in terms of oil supply in 1980, which I believe was the original target for this government, I think the prospect of 1990 is totally remote.

André Tremblay, p. 188

Mr. Tremblay: It is not a question. It is a point of information.

The Joint Chairman (Senator Hays): You want to ask for information?

Mr. Tremblay: I want to transmit some information. I do not want to be involved in the politics within Alberta, but I think that most people forget that the first move in the fall of 1973 had been a federal move, establishing an export tax which they offered Alberta to divide 50-50 between the federal and Alberta, and Saskatchewan too, because Saskatchewan had some exports too—and I can speak from direct experience at the time, I was involved in that problem.

That move from the federal, which was a sort of bargaining move with Alberta and Saskatchewan. prevented any sound solution for Canadian price as opposed to the world price. At the time—and I think I am consistent with the kind of analysis I have made—the first stage of the negotiation has taken place not between the federal and the provinces, but between Alberta and Quebec.

We were a consuming province, an importing province, and we were ready in Quebec at the time to accept an increase in the Canadian price which other provinces in the same situation as Quebec did not accept. We started negotiations between provinces then and we presented something reasonable for the time. That is why at the end, the federal government removed the export division 50-50 so that we could get a Canadian price. Alberta accepted not to take the 50 per cent of the export tax.

The point I want to raise is this, that interprovincial negotiations on a fair basis in a number of situations might be a better approach than a federally-imposed export tax or anything of the kind.

That is why I am saying that our challenge is to harmonize maturities, rather than to impose any central solution.

See also Appendix “CCC-10”, Harmony in Diversity: A New Federalism for Canada, Alberta Government Position Paper on Constitutional Change (Oct. 1978), which is part of the day’s proceedings and located within the PDF link above.

—–o0o—–

January 8, 1981: Robert Willson (Chairman and Chief Executive Officer, Canadians for Canada) Donald Skagen (Canadians for Canada), Professor John Crispo (Coordinator Consultant, Canadians for Canada), & Lorne Nystrom, speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 34, then scroll to p. 110)

Mr. Willson: Mr. Chairman, it is not possible yet to answer that thoughtful question as it deserves because, as I indicated, Mr. Nystrom, we are just forming but we will have some proposals to make to you, I promise, if there is time for them to be considered, and I am pleased that you made reference to the public ownership because Mr. Skagen’s company is 100 per cent employee owned, which is about as public as one can get.

So we will not have any arguments as to view on that point.

Do you have a comment, Mr. Skagen?

Mr. Skagen (Canadians for Canada): Thank you. If I may, Mr. Nystrom, I appreciate your frankness about your attitude to the industry. I presume I should be dealing with some of that very briefly. Ownership publicly as you have described it is not alien to our kind of thinking. You assumed, incorrectly, that we would oppose.

Now, if you put the proper parameters on it and you have a Canadian government owned oil company which competes on an equal basis, which is limited to its growth by its generation of capital rather than drawing on relatively unlimited funds which their competitors produce, if that is the case you really do not have any trouble with thoughtful people in the business.

Now, if you are talking about coming to my office and telling me that you now own my company, you are going to be in trouble.

Now, one of the reasons that we see, or personally that I see the mix of the energy problem and the Constitution …

Mr. Nystrom: What I will do, though, is I will have Allan Blakeney as my council and legal advisor.

Mr. Skagen: Well, I believe that when you go into a war you should take everything with you that you can get. And we would be waiting with similar equipment.

[Page 111]

Now, the Constitution, it seems to me, should set the parameters within which this country operates. If we can set those parameters so that they are reasonable, so that we maintain and encourage a free country, then I think you get reasonable people together and you discuss the problems under reasonable parameters, you are going to come to a satisfactory solution.

Now, perhaps we cannot leave the oil industry in limbo in the meantime because I think that is a rather long process. The industry needs to move ahead and be aggressive and make substantial investments. Under the current circumstances we are encouraging, through our current proposed energy policy, something that is rather different than that.

So, on the one hand it would be better to solve the energy problem after you have a competent acceptable Constitution, but I would suggest to you that if you wait that long you would have to restart the industry.

Mr. Nystrom: In your opinion what parts of the energy problem are constitutional?

Mr. Skagen: The fact that the things can happen that are happening, that these things are not restricted by our Constitution. There is a question of ownership, there is a question of taxability, and any time you have those gray areas and you have a strong, aggressive central government, they are going to push as hard as they can and yet you do not have a clear, distinct: this is my bailiwick and that is your yard, so you have this conflict.

Mr. Nystrom: How do we determine which is your bailiwick or your yard in terms of ownership and taxation constitutionally?

Mr. Skagen: I suggest that in discussion with people who want to make contributions, who wish to contribute to that process, that you establish the rules in a Constitution and then play by the rules and do not change them in the middle of the game.

Mr. Nystrom: Would you be in favour of a constitutional amendment which would allow the provinces to get into the field of indirect taxation, which would allow the provinces as well concurrency in terms of international trade, concurrency in terms of international trade with federal paramountcy, in the resource field. These are amendments that have been talked about by members on the Committee as well as by Premier Blakeney and others.

Mr. Skagen: You are past me, I am not informed on that and do not have an opinion on it.

Mr. Crispo: Can I just pick up on that?

I think we have a problem here because apparently there is to be some amendment ensuring that the province do have the ownership and control of resources including the right to engage in indirect taxation, and including some of the other things that you mentioned, but it will clearly be a field of concurrent jurisdiction and when you get that, how do you keep each side on the proper side of the fence? I do not know exactly how you do that.

I know in the west right now there is a feeling that the statement implying that the west and any other province has

[page 112]

ownership and control over their own resources does not mean very much when in fact, 1 think within a week of that, a national energy policy is announced which amounts, and this is the western perception, to almost a total invasion of that industry. So there is a real problem of drawing lines there.

I wish I knew the precise answer, but when you have concurrent jurisdiction and you have something like federal parainountcy-…

Mr. Nystrom: Professor Crispo, we do not have that now. You see, what we have now in terms of interprovincial trade of resources is strictly something that falls within the federal authority and what we are discussing now is making that concurrent, but since the resources go across the provincial boundaries we still have federal paramountcy so that does give the provinces a bit more power.

Mr. Crispo: Oh, I agree with that, but once you allow that paramountcy how do you keep it within a reasonable check? I do not know.

—–o0o—–

January 12, 1981, Debate in the House of Commons (click HERE)

—–o0o—–

January 12, 1981: Jean Chrétien, speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 36, then scroll to p. 21)

Mr. Chrétien:  […] In addition, I want to reiterate that the government will accept an amendment regarding resources in conformity with the exchange of letters between the Prime Minister and Mr. Broadbent, Leader of the New Democratic Party, in October.

Jean Chrétien, p. 35

Mr. Chrétien: I say that, of course, I said in that speech that there would be an amendment on resources coming from the NDP, there might be a couple of amendments, there is still three more weeks. Of course, time is running short, but it is possible there are one or two amendments I might propose myself, and I will look at the discussions in this Committee, and I am a reasonably reasonable person, if I can use those two words, so I will be listening to the Committee.

January 15, 1981: Jake Epp, Jean Chrétien, speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 38, then scroll to p. 28)

But, Mr. Minister, what I would like to discuss with you today is the matter of a clause including the ownership, management and control of resources. It has been the position of this party, Mr. Minister, that resources are owned by the provinces and that period dates back to 1867 when at the time of Confederation resource ownership was not given to the provinces, it was agreed between the federal and provincial governments of that day, that resources were owned by the provinces. Unfortunately, at least in the history of those of us who come from Western Canada, that view did not prevail at the time we entered Confederation. We were given the same provisions in 1930 through the Natural Resources Transfer Act.

You said yesterday that the federal government gave-while you might be technically correct, I do not think that historically that is the manner in which Western Canadians viewed the events of I 930 but rather it was an agreement in 1930, a moral obligation, that if the other provinces had their resources so also should the western provinces and there was an inequitable position that the provinces should continue in Confederation without the ownership and control and management of their resources, a right which had been enjoyed by the other provinces.

I think the record of 1930, as one reads that period of time, that my interpretation of that period is accurate.

I believe, Mr. Minister, that there has been no question as to ownership of resources until it was raised in the last two years

[Page 29]

by the federal government and specifically the Prime Minister. It was at that point only that I felt suddenly there was a need to reafirm, if in fact a reaffirmation is needed, that resources in fact are owned by the provinces. If there was any doubt, it was raised by the Prime Minister. It has never been raised by any Premier who is now sitting as a Premier for any province or, for that matter, any Premier that held those responsibilities heretofor.

So I want the record to show very clearly that we in this party, looking at Section 92 and Section 109 of the BNA Act that in fact resources are owned by the provinces without question; and if there is any question it is by the Prime Minister.

That being the case that I am putting before you this morning, before I get into the resources question per se are you aware that this Committee might not be in a position to in fact entertain any amendment either the Broadbent, Nystrom amendments on resources or any amendment that we in this party might put forward in order to reaffirm the ownership of resources by the provinces, placing all those caveats of historical precedents that I have placed before you? Are you aware, Mr. Minister, that in fact this Committee might not be in a position to accept, because of the narrow reference under which this Committee is working, to accept any amendments on resources.

Mr. Chrétien: I am informed that there is, under the Chairman, it is up to the Chairman to decide. I am not to deal with the proceedings of this Committee, as procedures. It is for the Committee to pass their own judgment.

Mr. Epp: Mr. Minister …

Mr. Chrétien: Do not ask me. We will see what the result of the deliberation is.

I would like to reply to some of the statements you made because in fact it has been the view of this government and all previous governments that the resources are owned by the provinces.

Mr. Epp: I am glad you said that.

Mr. Chrétien: And this question was not raised by the federal government ever. The first people who sought clarification of it were the Alberta government, not us. They are the ones who initiated the discussion on it.

We never pretended we owned the resources. We always said that we have the right to tax the resources as the national government. This is what we said. We never pretended we owned the resources. The resources were transferred to the provinces in 1930 by the federal government. You say that, you know, you have to put it in an historical context. When the provinces were created in 1905 there was no transfer of the resources and it was not the trend in North America either. The states south of Alberta, I was reading in Time magazine about three weeks ago 80 per cent of the resources in the western states of the United States still belong to the national government.

[Page 30]

Mr. Epp: What you were reading about was the sage brush revolt.

Mr. Chrétien: We have been in Canada, we have done the right thing in 1930, I am not quarrelling with that. The point I am making is that it was done unilaterally for one reason which is that if there had been provincial consultation what might have happened; and I think that Mr. Bennett who was the Prime Minister at the time was well advised to act unilaterally because he might have been faced with one eastern province saying we should do exactly the same thing that they have done in the United States, keep the resources for the national government, for the benefit of everyone; so rather than take any gamble on that he acted unilaterally in order to transfer the resources in 1930 or 1932 to the provinces.

So I am telling you that it has been the view of this government that the resources belong to the provinces, but the power of taxation of the national government exists and the problem is taxation can be taken by one or other level of government, that is the problem. But it is not a question of ownership. Your salary and mine, we own it, but the government taxes it.

Mr. Epp: I know that.

Mr. Chrétien: And it is hurting, and yours too and everyone. We all know, they say you are paid that much an hour or that much a year but at the end in your pocket the government has taken a bit of it. The problem on resources is that. It is not a question of ownership.

Mr. Epp: Mr. Minister, I do not want to get into American politics particularly or the North American experience, as you like to call it, but I want to clarify the record. I do not think you were right …

Mr. Chrétien: It is not to your advantage to do that …

Mr. Epp: Oh, yes, it is. That is why I am going to do.

Mr. Chrétien: Let me have one more comment.

Mr. Epp: Just a minute. What you have referred to is the North American experience, so I will give the North American experience to you. What you are talking about is the sage brush revolt. The point is this, that the resources in western states in the United States are owned by the States. What you are talking about is federal lands reserved within the states to which the states do not have the resource ownership. That is the question. It is not the question of ownership.

Mr. Chrétien: Great.

Mr. Epp: Just a minute, I am not through. Please do not interrupt me.

[Page 31]

Mr. Chrétien: I am very pleased that you state that. The land is federal, but not the ownership of the resources. The whole land is federal, good I agree with you. It is even worse.

Mr. Epp: Mr. Minister, the point that I am making is this that you were fudging the issue again and that you said that the states did not own the resources. You have now conceded that statement was not correct. I said that there were federal lands within those states on which the federal government owned the resources. That, sir, is no different than north of 60° today in Canada. That is no different. So when you want to stay with the issue, then stay with the issue and be accurate. What I am saying to you is do not use the idea that in the United States suddenly somehow that the western states do not have ownership. It is federal lands within those states that we are referring to.

But I would like to get back to it. It is not hypothetical, that is reality, sir, so that is why when you say you want to use an example, use it—I am not through, Mr. Minister.

Mr. Chrétien: You make me laugh.

An hon. Member: Or cry.

Mr. Chrétien: You make me laugh when you say that. When the state government in the state of North Dakota, the government has jurisdiction over, say, 20 per cent of the land within Dakota and they have control of the resources within that …

Mr. Epp: Mr. Minister …

Mr. Chrétien: I will concede that to you but I hope you would concede to me that 80 per cent of the lands of states like that belong to the national government over which the states and the residents of that state have absolutely nothing to do.

Mr. Epp: That is on federal land, but we are talking about the principle of who owns within the states, so do not fudge it; and as you well know that is the same regime that exists in Canada north of 60°, so be careful how you use those details.

The point, Mr. Minister, that I want to get to is this. This Committee, according to one opinion of one of the Clerks of the House, cannot entertain a motion on resources because it is out of the ambit of this resolution. If that is the case, if that opinion is to prevail, are you willing as the Minister in charge of this proposal to take this matter back to the House, to expand the reference that a resources amendment can be proposed either by the NDP, and we definitely will have one, will you give me that undertaking this morning?

Mr. Chrétien: Mr. Chairman, you know I do not have to comment on the procedure of this Committee. I replied earlier, it is for the Committee to decide on the operation.

Serge Joyal & Jake Epp, p. 32

The Joint Chairman (Mr. Joyal): As the honourable members know, we have terms of reference which is contained in our order of the House of Commons and those terms of reference refer specifically to the motion as it has been tabled in the House and as it has been under consideration here and members will know and agree very easily with me that there is no specific reference or no chapter dealing specifically with the question of natural resources; so it is a question which is new in its broadest sense and that is in this respect that doubts have been raised that it might be appropriate on procedural grounds to receive amendments or to include amendments that would deal specifically with the question of natural resources.

Mr. Epp: Mr. Chairman, on the same point of order and I will not pursue my question on the resources question with the Minister, I will take my opportunity the next time you recognize me; but on this point of order I think it is important for the Committee not only on the resources question because of the so-called arrangements between Mr. Broadbent and Mr. Trudeau, but additionally, if it is opened up, that is the procedures of this Committee, to accept amendments on resources, then I take it that the ruling would not only be on opening up resources but any other area in the BNA Act which would then allow this party, for example, to come in with amendments quite apart from either resources or what is before the Committee in the proposed resolution. That is the caveat I want to place before you.

Bryce Mackasey, Serge Joyal, Senator Flynn, p. 33

Mr. Mackasey: Mr. Chairman, it is obvious that this matter could very well have to come back to the full Committee and I just want to say to the point of order that it was certainly understood in the House of Commons that there would be included in this resolution a clause dealing with resources. I do not want to get provocative at this time. If through procedure we are going to deny one of the provinces something that they feel is very important to them then this Committee will have to

[Page 34]

be judged accordingly, and I reserve my argument until we hear further.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Mackasey. If you allow me, seeing that the Minister is absent for a moment, I might insert you on the same grounds, and I have made some comments to the Honourable Senator Austin earlier. There are some proposals that we can deal with as amendments to one specific section of the motion and there are some other recommendations that this Committee would like to address to the House. That is why there is certainly a possible solution to the procedural question that we have to deal with, but I think that we are not in a dead end procedural issue on that very question. There are possibilities for this Committee to recognize the very issue of natural resources or any other issues that are dealt with in the BNA Act, but we might not be in a position to add them to any specific section as such or to change the wording of some specific section, but just recommend generally to the House of Commons, as it is our proper mandate, and to the Senate to add those very specific suggestions to one or the other section.

I think there is a possibility to deal with that and I would say, and I think I speak on behalf of the Honorable Senator Hays on this issue, that as Chairmen we have tried to approach that question I should say on the most generous grounds, and I have, as yourself, have listened to all the suggestions that have been put forward and I will really feel uncomfortable if we would not have been in a position to find a solution to those aspects, especially taking into account that from the Official Opposition party and from the NDP party later on next week we will be informed of some very important amendments. I think that the House of Commons has requested us to make a report on those grounds and I think we have to find a solution to that.

Senator Flynn: The Senate also.

Jake Epp and Jean Chretien, p. 93

Mr. Epp: […] Mr. Minister, I would like to return to the resources question for a minute. You and I discussed that this morning. You will recall that at that time I raised a very distinct possibility that a resources resolution could not be introduced. In view of the fact that we have a proposed resolution, I will leave that; but I know Committee members have had circulated to them at least the opinion of one member of the Table of the House of Commons.

What I would like to do, sir, is to discuss with you statements made by Mr. Blakeney. First of all, Mr. Minister, do you regard the support of Mr. Blakeney for the government’s proposals as critical to their success?

Mr. Chrétien: The support of anybody is important for us. Of course, the support of Mr. Blakeney would be more than welcome.

Mr. Epp: If that support is not forthcoming, as it now appears it might not be, would that force the federal government to reconsider?

Mr. Chrétien: No.

Mr. Epp: So that the position you took on Monday, and which the Prime Minister took somewhere in another part of this hemisphere, that you will not tolerate any additional amendments, that position stands tonight?

Mr. Chrétien: I do not know what you mean by additional amendments; because as you know, Senator Austin and Mr. Allmand said why not do this that and the other.

Mr. Epp: I will be more specific if you want to get into the specifics.

Mr. Chrétien: Tell me which ones. I am telling you that on resources, if you were to stay on resources, one thing is very clear: we will never agree to give to any province the control of international trade.

[Page 94]

Mr. Epp: That the position that you agreed to in 1979, and which has been known as “the best efforts draft” is not on the table and you will not agree to it?

Mr. Chrétien: It was not on the table in June; it was not on the table in July; it was not on the table in August or September, and it is not in January 1981.

Mr. Epp: If you will pay me the courtesy of letting me finish, I will extend to you the same courtesy.

Mr. Chrétien: You cannot complain about my patience, because I have had to repeat myself a few times.

Mr. Epp: I was talking about your courtesy, sir.

Mr. Chrétien: I like your humility, sir.

Mr. Epp: What I want to ask you, Mr. Minister, is this: in 1979 your government, the federal government was in agreement on what has become known popularly as “the best efforts draft” regarding the question of resources.

You have withdrawn your support, do I take it, from that agreement of 1979?

Mr. Chrétien: It was never agreed upon in 1979; and the federal government has never had to accept it because the first to reject it was the Government of Alberta.

Mr. Epp: So you do not accept the best efforts draft at all.

Mr. Chrétien: No; because it was not agreed. There was no call for agreement. We were discussing what would be the best solution, and Alberta rejected that. So it was dropped. We never had to say that we would take it or not, because there is always some work going on at the official or the ministerial level in order to find a solution. Therefore, there emerges sometimes so-called best efforts. But that does not mean to say it is accepted by the government.

Mr. Epp: That being the case, do you then accept fully the position put forward by the New Democratic Party on the exchange of letters between the leaders of the New Democractic Party and the Prime Minister, that you will accept any amendment to resources short of control of international trade?

Mr. Chrétien: You know, the electors speak for themselves. The agreement we have made with the Prime Minister of Canada and the Leader of the NDP is one which we intend to respect.

Mr. Epp: If they can get it before this Committee.

Mr. Chrétien: We made an agreement. We want it to be implemented. I am not the master of rules of this Committee. We have every intention to live up to all our commitments. I believe that this amendment cannot come on resources; any other amendment that might be proposed may not be accepted either, and probably a lot are coming from your corner.

[Page 95]

Mr. Epp: What I wanted to ask you about that is, if the Committee cannot accept amendment for the reason that we do not have a bill before us or a resolution, but we have a proposed resolution only and a very refined and confined reference, do you give the commitment of the government, as the Minister in charge, that you will allow for a House procedure to allow that amendment to come forward?

Mr. Chrétien: I do not intend to reply to that question, because my information is that it is possible to have such an amendment in front of this Committee, and when the Committee has decided, I will advise.

Mr. Epp: So you will not commit yourself in that sense, because what I find interesting, Mr. Minister …

Mr. Chrétien: I said, and I would like to repeat one thing, that is very clear in my mind: we respect our commitment.

Mr. Epp: Mr. Minister, I would like to finish my question if you will allow me to do so. I find it passing strange that if you had an agreement with the New Democratic Party on resources, that you are not willing to give a commitment that some mechanism, some house mechanism will be found to include a resource question, and yet you have found sufficient mechanisms and confined them to the position that you yourself can bring forward any amendment that you yourself have sought. That is my question to you.

How far does that commitment go?

Mr. Chrétien: We said it is an amendment which would be presented by the NDP and will be acceptable to our party. The Committee will have to dispose of that amendment one way or the other. We intend to respect our commitment.

Mr. Epp: Further to Mr. Blakeney’s statement on January 14, Mr. Minister, Mr. Blakeney, when he was before this Committee, gave what I think members of this Committee generally regarded as one of the best briefs we had an opportunity to listen to.

You took the liberty on Monday to quote Mr. Blakeney at length in your reply, giving the impression, obviously, that you were agreeing with Mr. Blakeney and Mr. Blakeney was agreeing with you.

Yet, in the statement of January 14, the impression is very seriously, very seriously eroded by Mr. Blakeney’s statement. He has a number of issues with respect to which he deeply disagrees with you, and he has gone on record—and I have the testimoney before me.

Bryce Mackasey, Jean Chretien, Jake Epp, John Fraser, & Mark Rose, p. 101

Mr. Mackasey: Whether it is or is not, Mr. Chairman, they will learn by listening. This is the important point.

Mr. Minister, through you, Mr. Chairman, listening to Mr. Epp, and he is not here, but I have nothing bad to say about him or anyone else, so it does not matter whether he is here or not, I think you made it very clear that there is no deal with the Province of Saskatchewan for their support.

Mr. Chrétien: No deal, and we are not seeking a deal either.

Mr. Mackasey: Therefore the combination that you have made to Mr. Blakeney, based on its logic and on its persuasiveness and on common sense …

Mr. Chrétien: On the validity of the argumentation, that is all.

Mr. Mackasey: And hopefully you will have Mr. Blakeney’s support but it is possible in a democratic that you may not.

Mr. Chrétien: It is possible.

Mr. Mackasey: But you are not trading certain prerogative of the federal government, if you like, to the provinces and particularly Saskatchewan just to achieve his support.

Mr. Chrétien: No, because when we prepared our package, Mr. Mackasey, you know we prepared the package when we made the announcement and it is only after that we waited to see how many provinces agreed or supported it. We have tried to work a deal on the whole package of 12 items following the meeting of June 9 at 24 Sussex but come September there was no agreement and we proceeded with our resolution and after that we have waited for further reaction of the provinces.

Mr. Mackasey: Mr. Minister, I too recognize the persuasiveness of Mr. Blakeney’s argument and I must say that he

[Page 102]

persuades me every time I listen to him especially when he talks about the need for a stronger central government because he makes the case that if you are going to have stronger regions you need a stronger central government.

We have talked about the shifting balance of power and division of powers. Am I right in saying that you have gone a long way to concede, resulting from Mr. Blakeney’s argument, the field of indirect taxation to the provinces.

Mr. Chrétien: The field of indirect taxation for the provinces is very important for Saskatchewan because that was one of the problems that they have had to cope with in the potash case, the CIGOL case and they made a lot of representation, in fact it was a decision of the Supreme Court, what they have done. The national government had no objection. They have not even consulted with the national government but the courts ruled against them in that and in the CIGOL case and accepting the amendment of the NDP, something I had offered in the summer myself in solving the problem for Saskatchewan, and other provinces, too.

Mr. Mackasey: I do not want to take advantage of this new wrinkle of supplementary questions which I think is very useful, Mr. Chairman, but Mr. Minister what you are saying, and I want to get this very clear, is that you will respect the commitment given by the Prime Minister in an exchange of letters with the leader of the NDP Party, whether you do or do not have the support of the provinces.

Mr. Chrétien: Definitely. We had an exchange of letters between Mr. Trudeau and Mr. Broadbent and we intend to respect that whatever happens to the decision of Mr. Blakeney.

Mr. Mackasey: Reflecting provincial needs.

Mr. Chrétien: Yes.

Mr. Mackasey: Finally, Mr. Chairman, I must say I am very concerned and I will not raise it when Mr. Epp is not present but I have been listening to Mr. Epp’s persuasiveness too and eloquence, and I hope I am wrong but it seemed to me that he almost threatened the Committee or you or the resolutions—he is coming now—when he said if we get it before the Committee, it being the proposed commitment or amendment to reflect your view, not necessarily Mr. Blakeney’s view or Mr. Nystrom’s, the commitment in that letter, it seemed to me that what Mr. Epp was saying, maybe I am wrong, you can correct me, when he said if we can get it before the Committee. Perhaps it was the tone of voice which was unusual because he is usually a very easy-going gentleman, and he left the inference that you will never get it before the Committee, if you do not get it before the Committee then you are not going to be able to meet your commitments; if you do not meet your commitment you are not going to get Mr. Blakeney’s support. Surely Mr. Minister if all the members of this Committee are willing to do what is best for the Province of Saskatchewan, the views of Saskatchewan and the Premier of Saskatchewan, it should pose no procedural hassle for us if we all agree to help that province.

An hon. Member: Agreed, Mr. Chairman.

[Page 103]

Mr. Mackasey: I cannot presume that Mr. Epp does not agree but it seems to me that the proposal that Mr. Blakeney has suggested, that Mr. Broadbent has suggested and which the Prime Minister agreed to and which we presume is for the best interests of the provinces in this federal system, that nobody around this table is going to try to set up any means of impeding the implementation or the adoption of such a positive gesture.

Can you visualize that, Mr. Minister?

Mr. Chrétien: No, I think that the members of this Committee will be responsible enough to make sure …

Mr. Mackasey: If it is unanimous.

Mr. Chrétien: Especially when they make a lot of their policies to defend the interests of the provinces, that in that proposition is a transfer, and it is one of the only places where there is a change in the balance of power and what it is, is the dilution of federal power to the provinces in giving them the right to indirect taxation and in giving them the right to enter provincial trade with federal paramountcy. So, it will be quite funny that that effort will be frustrated by a party in this House.

Mr. Mackasey: Would you elaborate on the international trade with federal paramountcy that your earlier answer may have left off and your position seemed to be very categorical. You just mentioned international trade with federal paramountcy.

Mr. Chrétien: I mentioned interprovincial trade.

Mr. Mackasey: Interprovincial trade, sorry.

Mr. Chrétien: With federal paramountcy. And we have agreed to give that power to the provinces, but not the international trade, for obvious reasons.

Mr. Mackasey: Mr. Blakeney did state that you did not reach an agreement in 1979, I think his exact words were, “In February, 1979 we reached near agreement”. You mentioned that near agreement could have been full agreement if Alberta had agreed, and I am curious about what role Alberta played as another western province in that near agreement?

Mr. Chrétien: I was not there but what I know of the situation is there was no happines in the federal delegation about the so-called separate draft and the information I have is not, I think, to say yes or no was a big relief to the federal delegation because it was blocked and rejected right off the bat, if I can use that expression, by Alberta.

So never Mr. Trudeau, as Prime Minister and the head of the delegation, had to cross that bridge. So nobody can conclude what Mr. Trudeau would have done because it was in the context of a large discussion where there were many problems and sometimes when there is only one left over you go the extra mile, but we do not know because they never crossed that bridge.

Mr. Mackasey: Because Alberta blew the bridge up.

[Page 104]

Mr. Chrétien: Of course. So it was in February and the Prime Minister did not want to swim.

[…]

Mr. Epp: […]

I found the comment of the Minister interesting that the Prime Minister did not want to swim. I find that rather passing strange that he then launched his canoe on very troubled and stormy waters.

Mr. Chrétien: But he is in the canoe, not in the water.

An hon. Member: On skis.

Mr. Epp: But without a paddle, possibly.

Mr. Chrétien: But it is warm water.

Mr. Epp: I want to get back to what Mr. Mackasey said and, Mr. Chairman, the question I am going to put, I obviously want to give Mr. Mackasey every assurance of co-operation, but I am sure he would agree with me as well that we both want to observe the rules of the House, and that being the case, I know he is a great parliamentarian, he has a great reputation established that way and he would not want to jeopardize that reputation in saying that he either wanted to bend or break the rules.

An hon. Member: However.

Mr. Epp: That being the case, Mr. Chairman, as Mr. Mackasey has now agreed, if that were to be the case, and I say this to Mr. Mackasey as well, if that were to be the case that we should be able to open the proposed resolution on resources, if that is the unanimous agreement because the rules will not permit it, then I have to serve notice on behalf of my party if we open the whole British North ·America Act, if we are not at all any more confined to the proposed resolution, then I have many amendments, then I would like to discuss, Mr. Chairman, the very fundamental question that should be before this Committee and that is how do our institutions, how do we change our institutions in such a manner that they will better serve the Canadian public? That opens up that whole debate, then, and I am sure Mr. Mackasey, because of certain restrictions he might have from caucus, that he would not want to see that debate opened to that extent and I just leave that caveat.

Mr. Mackasey: Mr. Chairman, I want to thank Mr. Epp for reminding the Committee that I am a law abiding member of Parliament. I know a little bit about the rules but I have never seen the rules supersede common sense, and one of the nice things about the rules, if you read them . . .

An hon. Member: Closure?

Mr. Mackasey: I come back to my point, and I am very impressed and concerned that Mr. Epp of all members would leave the inference that he would deny the Province of Saskatchewan what they consider very fundamental in that province, Mr. Minister, because the wealth of Saskatchewan depends very much on their natural resources, unlike other

[Page 105]

provinces where secondary industry can be the source of much of the wealth, and it is important to Saskatchewan that they win as many concessions as they can. It is inconceivable to me that Mr. Epp would hide behind the rules or infer once again if we open the doors we are going to discuss everything from the reform of the Cabinet to the sex life of the tsetse fly, if you like, in order to prolong these hearings.

I only make the suggestion to the Minister because Mr. Epp opened the door when he said: if we can get it before the Committee; we can get it before the Committee, Mr. Epp, as long as all of us around this table agree to put the best interests of the country before our own petty little differences.

An hon. Member: Hear, hear.

Mr. Epp: Mr. Chairman, on that same point, on a point of order, Mr. Mackasey likes to infer certain things and the implication need not necessarily be there and I say to Mr. Mackasey that he can say what he wishes, but if we are going to discuss the constitution then we will discuss the constitution and there are many other aspects and the constitution is not confined to only those aspects of the constitutional discussion which the government has chosen to put forward before this Committee, and that point I will make to Mr. Mackasey, nor do I apologize for any manner that this party has been defending the provinces. What we have been defending and will continue to defend is the Canadian federal system.

An hon. Member: Hear, hear.

[…].

Mr. Rose: […] Anyway, I would like to suggest in a very non frivolous manner, in a very serious and maybe even gentle manner, perhaps even genteel, that I feel in the matter of resources the government has gone some distance, and I do not think that anyone can disagree with that. Well, there might be some disagreement. I was not heaping great praise on the government at this point. I am in a rather difficult spot in that whole matter.

Mr. Fraser: You have now gone some distance, Mark.

Mr. Rose: Pardon?

Mr. Fraser: You have now gone some distance; what is the point?

Mr. Rose: Well, Mr. Fraser is an old friend, I did not heckle you and I was tempted to on a number of occasion, but I would

[Page 106]

like to ask a question, really, of the Minister having to do with the Blakeney position on the resource package.

I would like to ask, since on page 35 of Mr. Blakeney’s submission to this particular Committee, on Item B, the development, conservation and management of nonrenewable natural resources and forestry resources in the province including the laws in relation to the rate of primary production therefrom, has resulted in the fact that that province was burned. It went to the Supreme Court, we know that, and it meant that they had to redefine their own provincial legislation and I do not think it is proposed frivolously at all.

I know there are some problems for the government in terms of what is going to happen down the road. It could be argued, I suppose, that this is acceptance of the Saskatchewan proposal, could be a vehicle for a number of federal-provincial pensions in the years to come. I think that is a possibility.

However, really what they say on that same page, on point three, nothing in subsection (2) derogates from the authority of Parliament to enact laws in relation to the matter referred to in that subsection and where such a law of Parliament and law of the province conflict, the law of Parliament prevails to the extent of the conflict.

I do not know what the Parliament of Canada is really giving up in this. It is not giving up federal supremacy or paramountcy here at all, so I would like to ask a question of the Minister, whether the Minister and his officials are opposed to the provincial government having a say in this sort of thing, in resource matters, as they apply to interprovincial or international trade, or are you, Mr. Minister, merely opposed to its enshrinement in the constitution knowing well that the sort of administrative arrangement is not acceptable to that province and maybe not to other provinces?

Mr. Chrétien: Yes, but you say international trade is a federal responsibility, and we have made two major concessions. We have given them indirect taxation, to the provinces, in the matter of resources and interprovincial trade with federal paramountcy.

We do not want to give international trade because it could create too many problems and one can argue: yes, but you will have paramountcy; but the consequences are that there are ten provinces and if you gave it to all the 10 provinces and suddenly they start to pass legislation in international trade and that we, the Parliament of Canada, we have to pass law after law to stop that development, you have been around here for a long time …

Mr. Rose: You do not have to underline that.

Mr. Chrétien: And you are still doing quite well but I have been here longer than you.

Mr. Rose: And you are still doing fairly well, but not as well as you might do.

Mr. Chrétien: Yes. And it is difficult to get legislation through. Look, we are in session since October 6, how many bills have been passed in the last four months? Very few. I do

[Page 107]

not know the numbers but very few. But when you are in a provincial legislature, of course I do not expect that from Mr. Blakeney who will act in good faith, but suppose that there is a flooding of legislation in that field? By the time we would be in a position to pass legislation telling them that this is against the national interest, it might be that the damage will have been done to the national interest.

Secondly, you know how it is, how it will be nice for the parliamentarians in international trade in our traditional jurisdiction, to come and pass legislation here and there all the time and say the provinces are wrong in doing that.

It is difficult enough so that r do not want to be caught in a situation that every two or three months or six months we have to pass legislation to over-ride the legislation of the provinces. Better to make it very clear that international trade has to remain a federal responsibility, and if there is an international problem in relation to the development of the resources, we have the Parliament of Canada to resolve it. Parliament can act, there are representatives from all the provinces here.

—–o0o—–

January 16, 1981: Jean Chrétien, Donald Munro, Lorne Nystrom, Mark Rose, Jim Hawkes, speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 39, then scroll to p. 4)

Hon. Jean Chrétien (Minister of Justice and Attorney General of Canada): In my governments view, the ownership of the resources has never been in question.

The dispute that there was over the last 10 or 15 years on the issue has been the level of taxation of those resources and the transfer of the resources to the western provinces in 1930 was to make the resources of the western provinces on the same basis as those of the eastern provinces or central provinces.

The reason why we had this text was at the request of the western provinces.

[Page 5]

This text that we have now was at the request of the provinces, because they felt that there was some doubt as to ownership. It is clarification, in my judgment, of what existed before.

We were not the ones who were asking for clarification, but the provinces, and that applies to all provinces.

In my view, the nature of the ownership of the resources in Canada is the same across Canada.

In 1979, this clarification—the first word starts with “confirm the jurisdiction of the provinces”; so it is a confirmation in order to make it clearer. It will not change anything that has been done in the past. It is merely a clarification and confirmation.

When the honourable member talks about a secret deal, I am surprised when he says so, because it was made public in both French and English and distributed to everybody.

There was discussion before, and of course there must be; before you agree to a text there is discussion. In other pieces of legislation, sometimes I talk with my critics in the opposition, your party and we discuss some aspects of a particular bill, There is nothing sinister about it. Whenever there is any unhappiness, the Minister of Justice—Mr. Robinson, for instance, speaks to me about some aspects of my administration, and Mr. Hnatyshyn talks to me in the corridors about aspects of the bill. So there is nothing sinister about it.

If we can come to an agreement it is in order to make the work of the Committee of the House of Commons easier.

So this is absolutely and completely public and it is a confirmation of the ownership of the resources in the provinces.

It has been sought after by the western provinces. We are obliging.

I am startled at the prospect of seeing one party using procedure to try and forbid this Committee from making that clarification for the good or benefit of the people who are seeking it, and it is not the eastern provinces, it is the western provinces.

Mr. Munro: Is the Minister suggesting that the leader of the New Democratic Party is speaking for the western provinces and that, by contrast, the Prime Minister would be speaking, presumably, for Canada, in working out an arrangement with a spokesman for the western provinces in the person of Mr. Broadbent?

I wonder whether the Minister has this in mind. Will the Minister indicate the broad outline of the agreement between the Minister and the Leader of the New Democratic Party, which was worked out either on October 2—I think this statement was made at that time. or on October 6, when there were interviews and the leaders of the two parties met with the Prime Minister to have revealed to them the terms of the proposal that were being brought forward.

Was it at that time that the Prime Minister worked out with the Leader of the New Democratic Party the broad outline of this confirmation, as the Minister is pleased to call it, which, again, with all due respect is an agreement between two parties?

[Page 6]

I am also wondering whether the Minister would comment on why he did not bring forward himself, when he brought forward his own amendments earlier this week, why he did not then bring forward proposals to amend his proposals, attributing the origin, if he likes to the Leader of the New Democratic Party, saying that the wording has been worked out by the law officers of the Crown at the instance of the Minister of Justice who is the spokesman on this matter?

Mr. Chrétien: Mr. Chairman, this proposition here is not new. There is nothing new about it. It is something which was debated all summer and is a position that I, myself, put on the table in July to the provinces.

The text or the body of the resources amendment has been established clearly in front of the provinces during the summer. After that, of course. Mr. Broadbent, and just like Mr. Clark, Mr. Trudeau got them in his office and explained what he had in mind and during the course of the discussion-and I presume so, because I was not there—they covered all the ground. We decided to put it there, because it is a change in the balance of power, because we are transferring in that amendment some powers to the provinces.

We are giving the provinces a power that they never had before—the power of indirect taxation, and in that amendment we are giving another power, which is the interprovincial trade power for the provinces with federal parmountcy. So it is devolution of power from the federal government to the provinces in two important fields in relation to resources.

Now, you are asking me whether Mr. Trudeau and Mr. Broadbent changed their views on that, and eventually Mr. Broadbent presumably said, “It is very nice to have a charter but we would like to do something on resources.” Mr. Trudeau said “lfyou bring forward an amendment we would accept it”.

That is the nature of the agreement.

So, you are asking me why I have not introduced it. It is because the agreement we are having—and it is public and is in writing and was distributed on October 21; it was agreed that if the New Democratic Party was to bring forward or to bring about or present this amendment we have given a commitment that our party would support it.

That is why I have not introduced it, because we said to the NDP Party. “If you put it forward, we will accept it,” and there is agreement between the two parties on that in the two letters. It is as simple as that.

Mr. Munro: And this was the price of support by the Liberal Party for the NDP support in the full package of the proposals? is that correct?

Mr. Chrétien: That is a demand or request of Mr. Broadbent. We have acquiesced.

In a situation like that there are some members of my party and some members of the New Democratic Party who put pressure on us and some members here—yesterday, for instance, Senator Tremblay said on the clause on education that it might be good because the wording selected seemed to

[Page 7]

create some confusion, and we should have new words. I said it makes sense if we can find the words.

This Committee is making suggestions. I had no intention of putting in the charter, to begin with, the right of trial by jury. It was not in the proposition. It was discussed in this Committee and I put it there.

Mr. Warren Allmand and others raised a lot of questions about the scope in relation to native rights being too narrow. I looked into that and improved the language substantially. Now, there is a new proposition. Now, is it the price I paid to have the vote of Warren Allmand or of anybody? No. it is simply that we are trying to get a better package. It is made here. It is a good illustration, because the argument that is going to be made in England—there they will vote yes or no: but they will not have that type of committee work as to the meaning of words. They will take what the Canadians are sending to them, that is to the Canadians, speaking through the House of Commons and the Senate.

Mr. Munro: Thank you, Mr. Chairman. I have another line of questioning which I do not think I could pursue in just one question. I would like to reserve my position, if I may.

[…]

Mr. Nystrom: Thank you very much, Mr. Chairman. I want to ask the Minister a few questions about resources as well on a supplementary basis.

But I would like to preface my remarks by saying that I do not think that in this Committee we should start wondering who speaks for Quebec, or Ontario of the West. We all are trying in this Committee to speak for all of Canada. If any member comes from the West. then he or she is obviously speaking for the Western Region, but they are speaking first and foremost for Canada; Mr. Robinson and Mr. Rose speak for both Canada and Western Canada as I do as well.

We should not infer that any other member does anything other than that.

I would like to ask the Minister whether or not he can confirm categorically that he is now willing to accept an amendment from our party—an important new amendment to our constitution which would give an important new power to the provinces, namely the power of indirect taxation for resources to the provinces?

I asked that because it does not now exist under the present constitution of Canada, and in Saskatchewan, we have had the Supreme Court throw out some provincial legislation in the CIGOL case on the basis that the legislation went beyond the powers of the province in the area of indirect taxation.

[Page 8]

Are you willing to accept an amendment in the area of indirect taxation which would give the provinces very important new powers?

Mr. Chrétien: Yes. we will accept an amendment giving the power to the provinces to levy indirect taxation on resources as mentioned in the exchange of letters and it is an offer we have made to the provinces in the summer. and it will be a new disposition in the constitution giving new powers which now do not exist to the provinces.

Mr. Nystrom: Given to the provinces, and in terms of concurrency and interprovincial trade, you have federal paramountcy where it goes beyond provincial boundaries.

Mr. Chrétien: Yes, we will accept an amendment which gives the provinces new power, the power to pass legislation on interprovincial trade, and of course, there is some national interest, and the federal government on that matter will keep paramountcy. It means to say that the provinces will be able to pass legislation affecting interprovincial trade and it would be absolutely legal. At the present time it would be illegal as was judged in the Supreme Court case of CIGOL and so on.

If the federal government keeps the paramountcy power, it means that if we were to find that what has been done in the field of interprovincial trade by the provinces is against the national interest. the national Parliament will be able to pass a piece of legislation which will nullify the legislation of the provinces on interprovincial trade in relation to resources.

Mr. Nystrom: Thank you very much.

That area of concurrency and the sharing of powers is important and allows the province to develop as it sees fit according to its own objectives, and with federal paramountcy the national interest remains paramount.

[…]

Mr. Rose: I would like to add briefly that I welcome the opportunity as a western Canadian to participate in a constitutional deliberation for our country here in Canada. I find it very difficult to accept that the only people who speak for Western Canada are members of the loyal Opposition or the provincial premiers, and I, for one, feel we have been left out of these discussions as federal members of parliament for far too long, and, from that point of view, I appreciate that.

I would like to underline the fact that I do not see how anyone who purports to speak for provinces, even though he speaks also for Canada, can fail to recognize that there is a clarification and a devolution of powers in resources to the provinces: and I cannot see how anyone can be against that.

[Page 9]

[…]

Mr. Chrétien: I think the text is very important. With the difficulty we have had in the field of resources in the last 15 years, I would attribute a lot of the so-called political ambiguity which existed in terms of who owns and who has the power to manage the resources within the border of the provinces.

Even if we had, legally, no doubt that it was satisfactory in the previous constitution, this clarification would certainly help to make the position of the national government and the provincial government easier to understand.

I think it is a good and important development. I am delighted that we have accepted that it be proposed by your party. I do not in any way feel embarrassed by that because I did the same thing all summer and proposed it to the provinces.

Of course, it is always the same when you go after perfection and ask for everything, because then you run the risk of having nothing. This is exactly what happened.

It was a good illustration, and in the summer, many, many weeks I had the impression that we had four, five or six deals or agreement on 12 items.

But it turned out at the First Ministers’ Conference that it was everything or nothing. and we had to agree to the whole package in order to get repatriation. And what has been the result? Zero! It was extremely frustrating to all my colleagues who had worked all summer and had made a lot of progress. But we had to agree to this new formula, to give that to Manitoba, and something else to British Columbia and so on, or nothing; so it was not possible; many topics were not mature enough; there was a great deal of division amongst the provinces on all issues.

So it turned out to be nothing. Of course, if we had said yes, we oblige, and do whatever you want and there is no more federal government, of course we would have an agreement.

It is easy to say yes all the time; it is sometimes much more difficult to say no, but sometimes when we say no we feel good about it and that is exactly what happened in Quebec. We said no and we feel pretty good about it.

[…]

Mr. Hawkes: Yes, Mr. Chairman.

Just very briefly, Mr. Minister, the implication that you leave us with is that you are going to accept the amendment as proposed by the New Democratic Party with its wording.

Yesterday the issue was raised as to how this might be done, given the terms of reference to this Committee, but I want to move to another issue. Clearly this amendment will affect both provincial powers and federal powers, and could you tell us

[Page 10]

what mechanism—can I wait until I have the Minister’s attention?

Could you tell us, or at least give us some idea, because this amendment will be so critical to the very nature ofa federated Canada, what mechanism you have in mind for provincial government consultation on the wording of this amendment, or do you intend to just proceed with a private agreement between the Prime Minister and the Leader of the New Democratic Party and the rest of the country be damned?

Mr. Chrétien: The text is here and it will be passed here, and there was months and months of discussion with the provinces on the meaning of those words. In fact, between the so called best efforts draft of February, 1979 and that, the only part that is out of it is international trade, the rest is exactly the same.

So there have been discussions on those words now for almost two years, two years next month, so there have been a lot of consultations, and we know exactly what that means and, the provinces know exactly what that means and the Liberal party knows what that means, the NDP Party knows what that means, and Mr. Nystrom put it in very simple terms so that it was very easy to understand because sometimes those lawyers like to have a lot of words.

—–o0o—–

February 4, 1981: Debate in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada[10] (click HERE to view the entire Special Joint Committee, Issue 53, then scroll to p. 44)

Mr. McGrath: it is very relevant, Mr. Chairman, because I want to say to the Minister that we know the politics of the confederation; we know the way things are; we did not press this matter in the House because there was a referendum coming up in Quebec on May 20. We are just as good Canadians as anybody. We did not want to do or say anything to hurt the clause of Confederation or to further the cause of separatism, but that has been settled, that matter has been settled. Our rights under the existing constitution have been flagrantly denied us by this government, and I submit to you that the disputed boundary or the boundary that Quebec disputes between Quebec and Newfoundland is a matter of no mean significance in terms of the motivation of the federal government in not stopping in and granting us the same rights as western provinces have to transmit their gas energy through the other provinces without the acquiescence of these provinces.

That is what it is all about, Mr. Chairman, We are a small province. We have only seven seats in the House of Commons and six seats in the Senate against 70 seats from Quebec in the House and I do not know how many in the Senate; plus the veto power that we are now building into the constitution for Quebec. What chance do we have? What chance do we have unless the rights that we enjoyed heretofore are reaffirmed in the constitution?

p. 49

Mr. McGrath: Yes, Mr. Chairman, we would like to have a recorded vote. While members are coming in, I would just like to correct the record in one particular instance where the Minister said that the position of the Government of Canada with respect to the transmission of Newfoundland power through a Quebec corridor is dependent upon a demonstration of Newfoundland achieving markets.

I might add that no such condition was placed on the transmission of western gas through the provinces to Quebec or the Maritimes, and indeed if a province required such a corridor then the Government of Canada has no alternative but to invoke the constitution and accept its responsibilities in this regard. It has failed to do so, and its failure to do so stands out as a grave injustice to the people of Newfoundland because there has been, I might add, in conclusion, this will be my final word, there has been a letter of intent from the power authority of the State of New York to the Government of Newfoundland. That is the hands of the Government of Canada. It has been since last September yet we still have not had any move from the Government of Canada in this regard. I say that is to their eternal shame.

p. 75

Mr. Edward Broadbent (Leader, New Democratic Party): […] Mr. Chairman, members of the Committee, I have just moved my party’s amendment to confirm in the constitution the provinces’ right to manage, tax and pass laws affecting interprovincial trade affecting non-renewable forestry and hydro resources within their boundaries.

If used wisely, Mr. Chairman, the provisions I present here will help guarantee that citizens in all provinces of Canada can build greater economic security for tomorrow and benefits that can accrue from resource extraction today.

Each province will benefit from this amendment because all provinces in our country have some resources, whether they be oil and gas in Alberta, potash in Saskatchewan and New Brunswick, electricity in Ontario, asbestos in Quebec, iron and coal in the Atlantic region, or forestry in Manitoba and British Columbia.

These new right are key blocks from which to create steady, diversified economic growth in the future, while at the same time produce revenue through which essential public services can be delivered to the people today in those provinces.

In some provinces, Mr. Chairman, particularly in the West and more recently in Atlantic Canada, the ability to direct the development and sale of the depleting resource is crucial. During the greater part of our history, central Canada has prospered extremely well, not only compared with the rest of the world, but also compared with the rest of Canada on the basis of its industrial development.

Now other regions of Canada see comparable economic advantage being obtained from their natural resources and for us all Canada should welcome this development.

In principle, Section 92 and Section 109 of the existing British North America Act give the provinces the right to own and control their resources. However, as provinces have attempted to assert this control, they have encountered judicial

[Page 76]

decisions which have allowed a variety of federal powers to have precedence over the provinces resource power. For example, when the province of Saskatchewan attempted to control the windfall profits of oil and gas companies in 1973, the action was disallowed by the Supreme Court of Canada. The Saskatchewan government had instituted what they thought was a direct tax. However, the Supreme Court ruled it to be an indirect tax which the provinces now have no power to levy.

When the same government tried to manage its potash resources through a prorationing program, this decision was struck down by the Supreme Court of Canada, once again on the grounds of the federal government’s trade and commerce powers.

If the amendment I am proposing today had been in place, both of these desirable provincial programs would have been upheld. Many other provincial governments have since been apprehensive about the effects of these judicial decisions on what they assume to be their traditional right to manage and control the resources within their boundaries.

A constitutionally entrenched affirmation confirming and clarifying provincial ownership and management of resources is therefore a key element of a fair confederation package at this historical moment of constitutional renewal in our country.

This amendment will help to case the apprehension many people in resource producing provinces feel about their ability to use their resources to help build their economic future and ease their uncertainty about the equity of the Confederation bargain.

I note, in passing, Mr. Chairman, that the cash value of this to the province of Alberta alone is worth somewhere in excess of $600 million.

Our amendment gives the provinces the right to control the level and nature of exploration of non-renewable resources. It offers them the right to regulate the way and the rate at which forestry, non-renewable and electrical resources are exploited.

The amendment would permit provinces to institute resource management and conservation schemes as deemed necessary and as should be established. It allows provinces to develop electrical generating sites in ways and at rates they see fit. Provinces would be able to regulate the movement of their resources so long as their regulations do not contravene federal legislation.

Provinces would have the right to set resource prices, levy indirect as well as direct taxes on the resources sold in Canada, as long as the provinces do not discriminate in the prices charged or on the availability of the resources to Canadians who happen to live in other provinces.

These rights, Mr. Chairman, would apply fully to non-renewable resources, resources generating electricity, and forest resources.

We in the New Democratic Party believe that this amendment would help to allay the fear, particularly of Western Canadians, that when they seek to regulate their resources

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their ability to do so will not be halted by the complexity of federal powers. It will help to renew their conviction in a just Canada by restructuring the constitutional powers in ways that allow all partners to develop fully in the best interests of their people.

On behalf of my party, Mr. Chairman, I would urge all members of this Committee to accept our amendment securing the right of provinces to own and control the development and sale of their natural resources.

[…]

Mr. Hawkes: The member from Oshawa asserted that the consequence of this amendment would be an amount in excess of $600 million to the province of Alberta. He asserted it as a fact. I assert as a fact as the member from Calgary, Alberta that it would not make a difference of one red dime.

[…]

Mr. Epp: Thank you Mr. Chairman, Mr. Chairman, just so that every Committee member knows what we are planning to do, we intend to ask a few questions of clarifications of Mr. Broadent. If there are other questions of clarification, of course that is totally within your jurisdiction, Mr. Chairman, and we will then be calling for an adjournment because the amendment is of some length and we did not have time to caucus during the dinner hour, and we will then be asking for an adjournment to caucus to study the amendment itself.

The Joint Chairman (Mr. Joyal): The honourable Minister of Justice.

Mr. Chrétien: I just want to say on behalf of the government that we will be accepting this amendment, but with some change of clarifications and perhaps at this time I will recommend Mr. Corbin to read our subamendment so that it will be very clear and it is just to make clarification to make sure that what we had offered in the summer and what had been passed by Mr. Broadbent in the fall, interprovincial trade, federal paramountcy, plus indirect taxation and reaffirmation and clarification of ownership of resources is acceptable to the government, It was offered, but we need that amendment that will be proposed by Mr. Eymard Corbin.

The Joint Chairman (Mr. Joyal): According to our Rules of Procedure, so far as the honourable members have now in their hands the main amendment, the Chair has been informed of two subamendments; one that should be moved by the government party and the second one that should be moved on behalf of honourable James McGrath. According to the procedure at this point, there is only a main amendment and it would be in order with our procedure to call the first subamendment. I understand that if honourable members want to ask for clarification of the main proposal, of course it is up to them to put forward their questions so that they have a real idea in which context the main debate takes place, and I would certainly receive the question as put forward by the honourable Jake Epp in that context.

[Page 78]

So if honourable members agree, we will continue to follow our usual procedure which is to call the amendment and then the subamendment and then open a debate that will allow all honourable members to ask for question of clarification; and if it is the wish of the honourable members to adjourn until tomorrow morning at 9.30, the honourable members will have a fair opportunity to put their views through on that very point.

But at this time, I would like to suggest to honourable members that all the amendments be on the table so that all honourable members know what they will have to decide upon, according to our procedure.

[…]

Mr. Corbin: Mr. Chairman, I move

That the proposed amendment to the proposed Constitution Act, 1980, adding a new Section 52, be amended by

(a) striking out the portion of Subsection 92A(1) following paragraph (c) that reads as follows:

“whether or not such production is exported in whole or in part from the provinces”

(b) adding to Subsection 92A(2), immediately after the words “make laws in relation to the export from the province” the following words,

“to another part of Canada”.

[Text]

Mr. Chairman, I move that the proposed amendment to the proposed Constitution, Act, 1980, adding a new Section 52 be amended by (a) striking out the portion of subsection 92A(1) following paragraph (c) that reads as follows:

whether or not such production is exported in whole or in part from the provinces; and

(b) adding to subsection 92A(2) immediately after the words

“make laws in relation to the export from the province” the following words, “to another part of Canada.”

Thank you, Mr. Chairman.

[Translation]

The Joint Chairman (Mr. Joyal): Senator Asselin.

[Page 79]

Senator Asselin: I heard the amendment proposed by Mr. Corbin. Could we have a brief explanation of what the purpose of this amendment is? It all seems rather complicated…

Mr. Corbin: You can ask the minister.

Senator Asselin: I would like to discuss it. Since you are the sponsor, I am asking you if the minister would like to answer for you, it is his privilege.

Mr. Corbin: It would be a pleasure.

Senator Asselin: Could you briefly explain to us what exactly this removes from the main amendment so that we can approach the question from the proper angle?

Mr. Corbin: May I, Mr. Chairman?

The Joint Chairman (Mr. Joyal): Of course.

Mr. Corbin: In reply to Senator Asselin’s question, I presented this amendment on behalf of the government and I will now ask the minister to answer Senator Asse1in’s question.

Mr. Chrétien: Yes, Mr. Corbin.

Why are we proposing this amendment? The text of Mr. Broadbent’s amendment could be interpreted as authorizing the provinces to engage in international trade, as granting them jurisdiction over such international trade and we have therefore made the necessary clarification. As we agreed with Mr. Broadbent, we are extending provincial jurisdiction through the indirect taxation of resources and interprovincial trade, with federal paramountcy, but it is by no means our intention to grant in the constitution the jurisdiction to the provincial governments over international trade.

[Text]

The Joint Chairman (Mr. Joyal): Mr. Broadbent.

Mr. Broadbent: Mr. Chairman, what the Minister has said by way of clarification of the difference between the amendments that I proposed and the government’s subamendment is perfectly accurate. The agreement that was entered into sometime ago between my party and the government as one condition for accepting the overall package, the constitutional change was as the Minister described it.

What I have proposed, and it was done certainly with explanation in advance, is an amendment that has additional wording that was not agreed to, that I had hoped that at this point we might be able to persuade the government to agree to accept.

The wording that has been suggested be deleted, the first in subsection 92A(1)(c)

whether or not such production is exported in whole or in part from the provinces,

is from our point of view not a desirable course of action. I appeal to the Minister and to the government to reconsider their position. It is our view that the original amendment, that is even without this section that we agreed to, would indeed make it possible for example, for any province, like the Province of Saskatchewan, to regulate the development of the production of a non-renewable resource at a rate it thought

[Page 80]

desirable, even if that, resource was going to be exported. The key clause in that is Clause (b) where it makes specific reference to the right of the provinces to regulate the level and rates of production.

We think that the point that is covered in the wording that the Minister wants deleted is already covered in our wording so that the government of Saskatchewan would not have to worry about a suit by a private company for example; but to be super safe, to ensure that, and to still maintain the paramountcy of the federal government in this field when there is a conflict in international trade, our whole amendment as we proposed it, we think is desirable. The paramountcy of the federal government in the case of conflict is covered in our resolution and therefore to make it unequivocally clear that the provinces have the right to control development, particularly in this case, the rate of development of the resource according to their priorities, we think the phrase that the government is proposing to strike out should be left in.

I stress we think it should be left in to be super safe because we think that the cases, the CIGOL case and the Potash case are covered by the wording that the government has decided to accept but just to avoid any marginal error, if I can put it that way, by a judge in a court, we think that the kind of access to international trade that we are proposing is desirable for provinces at this point in our history.

Especially I want to stress when we have covered off the importance in the federal state of a national government to have paramountcy because when you are dealing with other states in the world it is of fundamental importance that in the last analysis there be one government that speaks for Canada, and that is the federal government.

I repeat, we are covered if we make sure in the case of conflict that the federal government has paramountcy. So, I appeal to the Government of Canada and to government members of this Committee to reconsider their position and permit the provinces this kind of participation in international trade by our provinces which we think is desirable.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Broadbent.

At this time, before allowing the debate to continue, I would like to invite, with the consent of honourable members of course, the Honourable James McGrath to introduce the amendment and then l will invite honourable members to put all questions and any comments they would like to put forward.

In all fairness to all parties around the table—and that is a very important question—I would like to invite the consent, of course, of honourable members of this Committee, the honourable James McGrath to move the amendment on his behalf.

The Honourable James McGrath.

Mr. McGrath: Thank you very much, Mr. Chairman.

Mr. Chairman, first of all, to relieve any doubts as to the parentage of the amendment I am about to move, my leader

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on this Committee, my chairman, Mr. Epp, will be moving or speaking to the principle arguments in support of the amendment. I wanted to make that very clear. I was merely the instrument.

Mr. Chairman, I would move that the proposed amendment to Clause 5l of the proposed constitution act, 1980 adding Part VI be amended by adding immediately after the proposed new clause 92A of the constitution act, 1867, the following:

92B. All land, mines, minerals and royalties within and arising from the seabed and subsoil of the internal waters, the territorial sea and the continental shelf adjacent or appurtenant to any province, all economic or proprietary rights in the non-renewable natural resources thereof, and all rights to produce energy from the waters, currents and tides thereof shall belong to the adjacent province.

92C. (1) the area adjacent or appurtenant to a province shall, as between adjacent or opposite provinces, by that area within lines drawn by agreement in accordance with the principles of international law.

(2) where a dispute arises between provinces as to which province is the adjacent province for the purposes of this Part and no agreement can be reached between them within a reasonable period of time, the provinces concerned shall resort to arbitration, one member of the Arbitration Board being chosen by each province concerned and one other, or two others if there is an even number of provinces concerned, being chosen either by agreement of the members of the Board chosen by the provinces or, failing agreement, by the Chief Justice of Canada.

92D. For the purposes of this Part “non-renewable natural resources” includes the non-renewable natural resources of the seabed and subsoil of the internal waters, territorial sea and continental shelf of the adjacent province and all rights of energy production from the waters, currents and tides thereof.

Mr. Chairman, before I ask my colleague, Senator Tremblay, to read the amendment en français, I want to add this footnote, that the amendment, whilst it is moved in the spirit of the Committee, trying to correct some of the injustices contained in the Bill before us, l am not at all unmindful of the fact that our friends in the New Democratic Party have in fact in terms of the amendment that they are proposing have forgotten their friends east of Ontario.

[Translation]

The Joint Chairman (Mr. Joyal): Honourable Senator Tremblay.

Senator Tremblay: Mr. Chairman, I move:

That the proposed amendment to Clause 51 of the proposed constitution act, 1980 adding Part VI be amended by adding immediately after the proposed new Clause 92A of the constitution act, 1867, the following:

“92B. All lands, mines, minerals and royalties within and arising from the seabed and subsoil of the internal waters, the territorial sea and the continental shelf

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adjacent or appurtenant to any province, all economic or proprietary rights in the nonrenewable natural resources thereof, and all rights to produce energy from the waters, currents and tides thereof shall belong to the adjacent province.

92C. (1) The area adjacent or appurtenant to a province shall, as between adjacent or opposite provinces, be that area within lines drawn by agreement in accordance with the principles of international law.

(2) where a dispute arises between provinces as to which province is the adjacent province for the purposes of this Part and no agreement can be reached between them within a reasonable period of time, the provinces concerned shall resort to arbitration, one member of the Arbitration Board being chosen by each province concerned and one other, or two others if there is an even number of provinces concerned, being chosen either by agreement of the members of the Board chosen by the provinces or, failing agreement, by the Chief Justice of Canada.

92D. For the purposes of this Part, “non-renewable natural resources” includes the nonrenewable natural resources of the seabed and subsoil of the internal waters, territorial sea and continental shelf of the adjacent province and all rights of energy production from the waters, currents and tides thereof.

This is it, Mr. Chairman.

The Joint Chairman (Mr. Joyal): Thank you, Honourable Senator Tremblay.

[Text]

The honourable James McGrath.

Mr. McGrath: Mr. Chairman, I really should intervene and apologize to Mr. Broadbent, because he moved the amendment, and the fact that he is here and moved the amendment signifies the importance the New Democratic Party attaches to the amendment, and l was perhaps a little ingracious by my intervention.

I should have said that by indicating that they are supportive of our amendment that they recognize that they have friends east of Quebec.

The Joint Chairman (Mr. Joyal): Thank you very much, the honourable James McGrath.

The honourable Jake Epp.

Mr. Epp: Thank you very much, Mr. Chairman.

I have a couple of questions I have to ask of Mr. Broadbent and of the Minister.

I would like to ask Mr. Broadbent whether he still agrees that he is getting everything Premier Blakeney wanted, even if the government’s subamendment to his amendment would carry?

Mr. Broadbent: My understanding from Mr. Blakeney, as the Premier of Saskatchewan, is that he would like more substantial participation in international trade than the amendment that is about to be voted on would permit.

[Page 83]

That is a quick answer to the question.

I could perhaps return if it is appropriate under the circumstances, since we now have another amendment before us.

Mr. Epp: I am not through with my questioning yet.

Mr. Broadbent: Well, I was through with my answer.

Mr. Epp: Well, I am not through with my questioning.

Mr. Broadbent: Well, pursue it, then.

Mr. Epp: Mr. Broadbent, could you indicate to us when you met with Mr. Romanov that he conveyed to you that Saskatchewan wanted international trade included?

Mr. Broadbent: Well, this is a very interesting exchange on a private conversation. My conversation with Mr. Romanov was of the kind that I am only too delighted to comment on, and I would like to hear Mr. Epp’s report on private conversations at some point between Mr. Davis and Mr. Clark!

But I would say, in passing, that Mr. Romanov says the same thing in private as he says in public. He wants more extensive participation of provincial governments in international trade.

I do not know why Mr. Epp would ever think that Mr. Romanov would ever say something in private which was different from what he would say in public.

Mr. Epp: Are you suggesting to us tonight, that, if the governments amendment should carry—an event which has not been too regularly in this Committee—are you saying to us it is the position of the Government of Saskatchewan not to accept that the amendment that you have moved with the Governments subamendment, that it would not be sufficient to guarantee Saskatchewan’s support for the constitutional package?

Mr. Broadbent: I am sorry, but I was consulted by my honourable and distinguished colleague from Saskatchewan on another matter.

Would you please repeat the question?

Mr. Epp: Of course. I will repeat the whole question for you.

I would like to ask you this. Should the government’s subamendment to your amendment carry, namely wiping out international trade, despite that government amendment, would you feel your amendment would be sufficient to guarantee the Government of Saskatchewan’s approval for the constitutional proposal?

Mr. Broadbent: Well, Mr. Epp, I do not know how things work in your party. But we certainly, in our party, recognize the real nature of federalism; that is, that federal leaders and federal parties speak from a federal perspective and have their responsibilities. We make our decisions.

I have no claim—and I have never seen myself as a spokesperson for a community of communities. I have assumed that, as a federal leader, I speak for the federal New Democratic Party; Premier Blakeney, as Premier of Saskatchewan, who has done, in my view, an admirable job as premier of that

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province, is speaking for his government. I do not intend to speak for him in this conference.

I would add, however, as part of my reply, that there were four central concerns, not only of Mr, Blakeney but of most of the premiers as expressed in recent first minister’s conferences as they pertain to resource control. One was to affirm ownership. The second was to guarantee participation in international trade. The third was interprovincial trade. The fourth was the right to indirect taxation.

Through our negotiations with the government we have obtained three of the four demands made by almost all the premiers. On almost any criteria of reasonableness, Mr. Epp, I think that is a pretty good score!

I would like also to say—and I have a copy of a letter by the Right Honourable Joe Clark when he was Prime Minister written to the Premier of Newfoundland, the principle point of which was to give agreement in principle to the idea of control of offshore resources which my party has supported as long or longer than your party has supported it.

Interestingly enough, Mr. Epp, when your party was in government, you did not even offer to the provinces the kind of power that we have now obtained in these amendments.

In the annex to the letter to Mr. Peckford it is made very clear that while offshore control was being contemplated in principle and was never even carried out, other powers, that we have now obtained in this amendment, such as interprovincial trade were going to be retained by the Conservative government.

So we have gone well beyond what the Conservative Party was prepared to implement when it was in power, and we have only obtained three quarters of what the provinces have wanted in terms of extending legitimate power in the resource sector.

I, for one, think that it is a pretty fair accomplishment.

Mr. Epp: Mr. Broadbent, I appreciate that you have mentioned the letter between the Right Honourable Joe Clark and the Premier, the honourable Mr. Peckford, because you will recall when that letter was exchanged between the premier and the then Prime Minister, that there was a course of action which had been put into place.

I believe there was a certain action by your Party—in fact thwarted that action, December 13!

I would like to ask you, Mr. Minister, this. In the discussions you had with Mr. Romanow and Mr. Broadbent last week, I understand that you offered Mr. Blakeney more than just inter-provincial trade. Is that correct?

Mr. Chrétien: When I talked to Mr. Romanow, as when I talked with Mr. Broadbent, we discussed all sorts of possibili-

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ties. We know the views of Saskatchewan. We know the views of the government.

We take our responsibility and our resolution and package will be proceeded with and finalized within, it looks like a few days or a few hours, and Saskatchewan will make up their mind.

I know what they were asking for, yes; and we cannot meet international trade for the reasons that Mr. Broadbent has given: Canada speaks with one voice abroad.

I would like to say that I think the amendment, as we will accept it, will meet most of the problems met by Saskatchewan in the past when they had to have the Cigol case and the Potash case. Most of the legal problems have been cured in the amendment accepted by the government.

Mr. Epp: Mr. Minister, I have a few other questions. But you have mentioned the Cigol Case. You are not solving the Gigol case at all. The Cigol case was international trade; 90 per cent of Saskatchewan’s Potash is international trade. You are denying them international trade. So let us not get this Cigol case involved in this one.

If you want to use some Alberta case, you would be on a better wicket than you are on the Saskatchewan wicket.

I would like to ask you whether you offered Mr. Blakeney as well a reduction in the referendum formula in your discussions last week?

Mr. Chrétien: Mr. Blakeney, when he came before this Committee, made a lot of suggestions about the referendum. Some have been met and some have not been met.

We have discussed clarification with Mr. Romanow when we met him this week. I reported my conversation to my colleagues, and we decided what course the government would take. It is here.

On the question of the Cigol Case and the Potash case, when Mr. Broadbent refers to the rate of production of potash—Cigol is not potash—we say with the amendment the rate of production will be under the jurisdiction of the provinces. There is no doubt about it. The Cigol Case is involved with indirect taxation.

Mr. Epp: Under Section 92 and Section 109 of the British North America Act, do you feel that other than the indirect taxation, that any further affirmation of provincial ownership of resources is needed?

Mr. Chrétien: Of course it was the big request in February 1979 by the Alberta government that reaffirmation of ownership of resources was needed.

Some argued it was not needed; but the provinces argued that it was needed. So we go along to reaffirm the ownership of the resources of the provinces, because some people have led some Canadians to believe that we want to take away ownership of resources from the provinces, and we are reaffirming

[Page 86]

here what existed in a different form in the constitution before, that the ownership of resources is provincial.

I do think that, I hope that this amendment that we are accepting will clarify that forever and that some of the great speeches that have been made on resources in the past will not be possible in the future, and I am quite satisfied with that because there was a lot of misunderstanding on the ownership of resources.

Mr. Epp: One last question. Mr. Chairman, if I might, to the Minister. The offshore question which Mr. Broadbent, I understand, if I hear him correctly, that he would support an amendment of offshore, I do not know if he has had an opportunity to look at this one, but at least the principle he would support.

Would you support it, Mr. Minister?

Mr. Chrétien: The policy of the government on that is well known. It was enunciated many times that we do think that the offshore resources belong to the federal government, Some provincial governments claim that they belong to the provincial governments. We have offered to give a reference to the court and accept the decision and the offer has not been taken.

We did propose some administrative arrangement to the provinces in the summer and that was to not settle the ownership, but offer 100 per cent of the revenues to the provinces, an administrative arrangement that will make sure that the profits and benefits of those resources will belong first to the residents of the neighbouring provinces, and we are still willing to discuss that but if they prefer to take it to the court—it will go to the court anyway because I know that some cases have been taken by private interests to get a clarification by the court. One is by some in the oil industry, one case that l know of in front of the Canadian Labour Relations Board for clarification of who has jurisdiction over the areas. So the court will eventually decide.

The Joint Chairman (Mr. Joyal): Mr. Broadbent.

Mr. Broadbent: Mr. Chairman, Mr. Epp, it is very clear, has not done his homework at all when he talks about the Cigol case not being covered by the amendments that we are proposing and in fact the part that the government of Canada has accepted.

The Cigol case is in fact covered by the indirect taxation issue and I suspect that he does not want to recognize that reality for the same reason the Conservative Party of Canada does not want to recognize that the same provision, this amendment would bring a minimum of some S600 million which we will document later, to the province of Alberta, and will provide a lot of additional resource wealth to Western Canada, it would go a long way to dealing with what the Conservatives have attempted to promote as western alienation.

[Page 87]

They have attempted to take a totally negative attitude on this whole constitutional debate and wherever they are confronted with a positive, constructive suggestion for constitutional change that will bring benefits not only to Western Canada, but to elsewhere, they choose rather deliberately to ignore that reality.

Some hon. Members: Hear, hear.

Mr. Epp: Point of order, Mr. Chairman.

The Joint Chairman (Mr. Joyal): Honourable Jake Epp on a point of order.

Mr. Epp: I just want to point out to Mr. Broadbent, and I realize that he and Mr. Knowles have not been here too much, I want to tell him that they moved 38 amendments, they have had three accepted, most of them were word changes; we have moved 12 in the Charter, we had five accepted.

Mr. Broadbent: Are you making a deal, Jake?

Mr. Beatty: Not with you, Ed.

Mr. Chrétien: There is still time to vote for the motion, for the resolution. It would be nice to have unanimity.

Mr. Broadbent: You may come to your senses finally.

The Joint Chairman (Mr. Joyal): I would like to invite the honourable Senator Austin.

Senator Austin: Thank you, Mr. Chairman.

I want to ask a question or two of Mr. Broadbent with respect to his resolution. I want to say at the outset that I am delighted with the confirmation of the right to the provinces, and particularly the western provinces, which area I come from, with respect to the ownership and management of resources, and I am delighted to see that the ability to manage through the right to deal with indirect taxes is being offered to the provinces because, under our constitution, as everyone here knows, under the British North America Act, the reason why resources were reserved to the provinces was in order to ensure them a revenue source so that they could develop their responsibilities and develop themselves as viable entities within the Canadian confederation.

Mr. Broadbent, I understand from your resolution that the Parliament of Canada retains its paramount jurisdiction, so that in the event of conflict between the laws of a province which may be enacted from this point on with Parliament, Parliament could enact a future law that set aside the provincial law; is that correct?

Mr. Broadbent: That is correct.

Senator Austin: With respect to subparagraph 4, I have one question where you say, right at the bottom of the page:

But such laws may not authorize or provide for taxation that differentiates between production exported to another part of Canada and production not exported from the province.

[Page 88]

I am wondering about policies which the provinces have followed from time to time of giving tax remissions to residents of the province or giving something that amounts to the same thing.

For example, in the province of British Columbia, the provincial government has allowed a subvention, a kind of a return on the price of natural gas in British Columbia. It is not exactly a direct tax, but it has the effect of a rebate on taxes and I wonder how that problem would be handled in your resolution?

Mr. Broadbent: This clause, Senator, does not deal with that. What it does is stop discrimination amongst other provinces but would permit special consideration for a province to act for its own citizens within its own borders.

Senator Austin: So it does not bar a province from continuing to favour its own citizens with respect to the rewards of its resource production?

Mr. Broadbent: That is correct.

Senator Austin: I would like, Mr. Chairman, to ask Mr. McGrath a question with respect to his amendment, would that be in order at this time? Would you agree?

I appreciate the intent of the amendment, Mr. McGrath, but the minister referred to an offshore resources reference and the position of the government of Canada that it would be prepared to agree to an offshore resources reference to settle the constitutional issues that have been aggravating Newfoundland-federal relations for so long and I wonder whether you would comment on why the province of Newfoundland has delayed so long in settling its claims in the Supreme Court of Canada?

The Joint Chairman (Mr. Joyal): Honourable James McGrath.

Mr. McGrath: Mr. Chairman, I could ask the same question of Senator Austin as to why this package has not been referred to the Supreme Court of Canada, because there is considerable doubt about it.

Senator Austin: Mr. McGrath, the package has been before a court and the court has found…

Mr. McGrath: There is sufficient doubt to prompt six provinces to refer the matter to the court. One case has been heard and two are still outstanding.

However, to answer Senator Austin’s question, Mr. Chairman, I find it very strange that the federal government would maintain a position of saying that because we lay claim or because we stake out a claim, if I can put it that way, to the offshore, then they suggest we should refer it to the court, I see no movement on the part of the federal government to refer it to the court.

Senator Austin: I am sorry, Mr. McGrath, but the federal government has offered time and time again to state a question.

Mr. McGrath: Well, I just want to make this very clear, Mr. Chairman, to Senator Austin, that what he proposes on behalf of the government, or what the government proposes would put the four Atlantic provinces in an economic straitjacket for all

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time, because Senator Austin forgets in 1912, for example, substantial federal lands, hundreds of thousands of square miles, were awarded to Ontario, to Manitoba, to Saskatchewan and Alberta. These are lands in which the resources that are now being transferred or enshrined in the constitution, the rights to these resources, many of them are on federal lands that were transferred in 1912.

Senator Austin: Mr. McGrath, you are not arguing to my— Mr. Epp often says that this Committee, you know. The question is why docs not Newfoundland offer the settlement of the issue to the court? Not in its interest?

Mr. McGrath: The concept of the offshore, it has been settled by international law that a coastal state has; the natural extension of a coastal state is the continental shelf. What we are saying is the Newfoundland claim, of course, is based on our rights prior to Confederation in 1949, the fact we brought with us our sovereignty.

Nova Scotia to the same extent, with a little different historical background, is making the same claim; but the principle claim we make is that natural justice would demand if you are going to extend these rights to natural resources in the constitution to the inland provinces, then that natural justice would dictate that you apply the same rights to the coastal provinces, in this case the Atlantic provinces.

We believe that this matter should be settled politically; that is not to suggest in any way there is a weakness in our case, because we believe we have a strong case, but when our leader was prime minister we moved in that direction, to transfer these resources to the coastal provinces.

Indeed, that has been the position of our party since 1968. We have not moved from that in any way, shape or form, but I notice that while the federal government is talking about having this matter settled by the courts, they move with Bill C-48 which has within it the Canada lands provision which stakes out the federal claim in a legislative way, notwithstanding the undertaking that the federal government made last September to the provinces that this matter would come in the second phase of federal-provincial negotiations on the constitution, and thereby they have pre-empted in fact any subsequent negotiations on this matter.

I think that is regrettable, but we believe very strongly that this matter should be settled by negotiation, that is the position we take, that is the position that is embodied in the amendment that I am proposing tonight, which, I am pleased to say, has the support of the New Democratic Party.

Senator Austin: When you offer this amendment, this is not a settlement by negotiation with the federal government; this is the dictation of the solution.

What I would like to add to that comment is that there is nothing in here that provides for the recognition of the rights which federal permit holders have and I presume the effect of your resolution would be to completely invalidate those rights.

The third point I would like to make is that I would like to have your assurance that nothing that has been done by the Government of Newfoundland, if you are able to speak in any way on their behalf, has discouraged citizens, including corpo-

[Page 90]

rate citizens, holding rights from the federal government or from the Province of Newfoundland, from establishing those rights in court because there is an ugly rumour around that, Premier Peckford has been very vigorous in trying to prevent individuals from seeking to establish rights in court, rights which they need to settle because they have established very, very large expenditures in Hibernia.

Now, if you can give us the assurance that any individual is free to exercise his civil rights as a Canadian and has not been interfered with by Premier Peckford, I would be delighted.

Mr. McGrath: Well, first of all, Mr. Chairman, I want to make the point in replying to Senator Austin that my province disagrees with the process we are involved in. I have to be very careful to preface my answers to him with that statement.

The Province of Newfoundland does not accept this process that we are involved in here tonight. It is unilateral, it does not include the provinces.

Now, having said that, Mr. Chairman, I want to say that the amendment that I have put forward represents the best efforts draft of the federal-provincial negotiations of last summer and, indeed, when Premier MacLean appeared before us he indicated that a substantial agreement had been reached on the question of the off—shore where nine of the ten provinces had agreed on the question of off-share resources.

I want to make this very clear to Senator Austin, I think this is very important. What the Province of Newfoundland and the Province of Nova Scotia are setting out to do is not to lay claim to something so that we can have it all for ourselves; that is not the spirit in which we are proceeding. What we feel as provinces is that it is very, very important to us in staking out our claim from an historical prospective to make the case that it is important to us that we exercise our right, our proprietary rights to ownership in order to control the rate of development. That is very, very important, the rate of development, to these coastal provinces.

In my own province we have a very old culture based on the fishery; we are not unmindful of the importance of the fishery to the economy of the Province of Newfoundland as well as to the culture of Newfoundland, the way of life of Newfoundland, and for that reason we feel it is very, very important to us that we control the rate of development.

However, we believe, Mr. Chairman, that these questions can and should be, in the context of our federation, be settled within the political context, just as the New Democratic Party were able to arrive at an accord with the government with regards to their concerns about the western provinces or, more particularly, the Province of Saskatchewan, and I do not make any comment on that. I say that is the way we should operate within our federation. However, when you have the federal government saying: take us to court; then that is not the way, in my view that the federal of Canada should function.

Mr. Chrétien: I would like to make a remark here because it creates a very bad impression.

We have worked all summer to have an administrative arrangement, an agreement that would have clarified the

[Page 91]

situation. We came very close at one time with one of the province. Nova Scotia, we came very close to an agreement. We were very little apart. And we were more or less setting aside the legality of who owns it in making sure that the revenue was to be up to, it is difficult to be better than a hundred per cent, to the province with an administrative arrangement that would have maximized the benefit to the local citizens and not having the decisions all being made in Ottawa, and on top of that with an agreement that when a province has reached a certain level of income above the national average, that there will be no problem in sharing with the rest of Canada. This concept had been proposed.

So it was not for us to give or to take the revenue for us, and some studies of some provincial governments along the line of the proposition I made to them, at least in Nova Scotia, some of their studies tell them that they will have a hundred per cent of the revenue until 2030, something like that.

So that is quite a long ways down the line; and they recognize that having benefited from Canada, that the proposition was saying that when you are above the national average you do not hesitate to share with the rest of Canada because Canada has a great history of sharing among the poor and rich parts of this nation.

The Joint Chairman (Mr. Joyal): Honourable James McGrath.

Mr. McGrath: Mr. Chairman, I cannot let that statement go unchallenged because it implies that somehow the Atlantic provinces are second class, first of all, and more importantly, that they want to grab it all for themselves having been the recipient of the benefits of Confederation, now we have an opportunity to seize on the potential of off-share resources and we want it all for ourselves. That of course is not the case and the minister knows that.

What the minister does not seem to realize, because the position that he puts forward on behalf of the federal government is a position that is totally unacceptable to the Atlantic Provinces, the Province of Newfoundland, the Province of Nova Scotia, because we feel that that attitude is a colonial attitude.

Mr. Chrétien: Mr. McGrath, you can make a speech if you want.

Mr. McGrath: Well, you make speeches.

Mr. Chrétien: You speak on behalf of Nova Scotia. Ten days ago, I discussed another time the possibility of an administrative arrangement with the Government of Nova Scotia, and they came to see me, so to say that is an approach of colonialism, they were not obliged to fly, Premier Buchanan and Mr. Howe, to come all the way from Nova Scotia to come to see me.

Mr. McGrath: I think that is great. I think that is the way it should be.

Mr. Chrétien: And if it had been totally unacceptable, why waste their time?

[Page 92]

Mr. McGrath: That is the way it should be, Mr. Chairman. These matters should be discussed within the context of our Confederation, by negotiation not by confrontation.

Mr. Chrétien: I would like to make something clear. This summer when we had the discussion with the provinces Newfoundland wanted completely to avoid a discussion of administrative arrangement of any kind. While I was trying to find a compromise they said it is ownership or nothing and it was after a long debate, the conference almost broke down in Toronto on that, because they did not want to talk about it, they wanted to have it completely off the table, and it was quite a difficult evening and eventually they accepted to discuss the possibility of a compromise if we could not find a constitutional solution.

So I think that the position of Nova Scotia in that matter has been much more positive and they are still willing to look into administrative arrangements.

The Joint Chairman (Mr. Joyal): Thank you, honourable Perrin Beatty.

Senator Austin: Mr. Chairman, I just want to say that Mr. McGrath did not address himself to my comments with respect to Premier Peckford. I wonder if you would like to do that in as much as the story is that Mr. Peckford is trying to prevent private subjects who have a lot of money at stake from exercising their rights to commence action.

Mr. McGrath: Mr. Chairman, I do not have to speak and indeed I should not be obliged to speak for the Premier of Newfoundland. Part of the process that we disagree with is that these discussions should be taken back to the first minister’s conference. That is where it belongs, not here. I put a position forward, without prejudice to Newfoundland’s position on the best efforts draft.

Mr. Broadbent: Point of order.

The Joint Chairman (Mr. Joyal): Pont of order by Mr. Broadbent.

Mr. Broadbent: I know that I should not expect consistency from certain political parties but would Mr. McGrath please square what he has just said with what Mr. Epp has just said to me about Mr. Blakeney’s position.

The Joint Chairman (Mr. Joyal): The honourable Jake Epp.

Mr. Epp: I would be glad to square that. I asked the question. Mr. Broadbent decided to fall into the trap.

Mr. Nystrom: I wonder, Mr. Chairman, if Senator Austin could tell us what Claude Ryan says about…

The Joint Chairman (Mr. Joyal): Thank you very much. I would like to invite the honourable Perrin Beatty at this point.

Honourable Perrin Beatty.

Mr. Beatty: Thank you, Mr. Chairman.

[Page 93]

Mr. Chairman, I would like to get some further clarification front Mr. Broadbent if I could with regard to the amendment which he has proposed. Mr. Broadbent, you indicated when you were moving the amendment, discussing it, that this was the result of the deal which you struck with the Prime Minister which culminated in the exchange of letters between the two of you and the agreement on your part that the NDP would support the governments resolution at second reading stage.

Could I ask you whether the announcement by the Minister of Justice that he has accepted your amendment means that the government has the support of the NDP from this point forth on the resolution?

Mr. Broadbent: Mr. Chairman, I was waiting for one of the members of the Conservative party to pose that very interesting question. As I indicated earlier this evening I was delighted that the government has accepted three major changes on resource control that were not offered by the Conservative party when they were in power, and that is substantial progress towards giving the provinces legitimate control over their resources, and the government has indeed honoured its commitment to that.

Another part of the understanding was that they would show reasonableness in terms of the amendment process on the Charter of Rights as well as other aspects of the resolution during the course of this Committee’s deliberations and I do not want to in any way indicate tonight what I will be saying at greater length on that subject tomorrow.

So you will just have to wait, Mr. Beatty, and lose some sleep overnight, and you will hear a definitive response later on.

Mr. Beatty: I doubt any of us will be losing too much sleep, including the government.

Mr. Broadbent: Mr. Beatty, would you indicate if your party is going to support our amendment?

Mr. Beatty: Mr. Broadbent, let me follow up on that, because I think it is worthwhile while we are discussing your amendment and indeed Mr. McGrath‘s amendment.

You indicated that the NDP had taken the position in favour of off-shore resources coming under the control of the provinces. You indicated that even prior to the time at which the Progressive Conservative Party took that position, and I ask you if Mr. McGrath’s amendment is acceptable to you, why did you not include the concept of off-shore resources in your amendment?

Mr. Broadbent: The answer was explained in my statement but the outset, our position was well known. As you indicate, we took that position as far as I know in advance of the Conservative Party, but I do not want to quibble over that at all. It was certainly around the same time and I was well aware that the Conservative Party was going to be moving an amendment on that subject and, as Mr. Beatty knows, the drafting is quite technical. We did our work on certain aspects of resource control, being a strong believer in the division of labour I knew you were doing your work on your aspect of

[Page 94]

resource control and we indicated right at the outset that we supported that principle.

As we have said all along we wished all three parties at the federal level would co-operate in a very sensible way in developing a constitution for Canada that all the parties could come together on. I made my comments in the spirit of genuine openness towards your proposal and I just hope that you will reciprocate when you come to consider ours.

Mr. Beatty: Mr. Chairman, I might indicate on behalf of the members on our side that we are delighted to have the support of the NDP on the proposal made by Mr. McGrath.

May I ask Mr. Broadbent, in view of the fact that obviously the two issues, the issue of offshore resources and the issue of resources in inland landlocked areas are viewed very differently, it is very much a regionalized concern, does Mr. Broadbent and does his party accord the same importance to the ownership of offshore resources that you accord to the ownership of resources within provinces which are landlocked.

Mr. Broadbent: Absolutely. The point we have made is that resources, non-renewable resources in Canada should be treated in precisely the same way, whether they belong to a landlocked province or one that has shores; and the problems that accrue to a federal state from disparity in the distribution of those resources, whether they occur for a province that is inland, or provinces, in this particular case, like Alberta and Saskatchewan with oil and gas, and to a lesser extent British Columbia or, hopefully, offshore provinces like Nova Scotia and Newfoundland, that once the decision is made to allocate to all of these provinces on the same basis the control of their resources, then we have to at some early point in our history develop a much more equitable equalization formula so that we can achieve a greater sense of equality amongst all Canadians.

Mr. Beatty: So you accord absolutely equal importance to the two types of control over resources.

Mr. Broadbent: Yes, in principle.

Mr. Beatty: Could I then ask you, in view of the fact that the government’s agreement to your amendment came as the result of the deal which was struck between Mr. Trudeau and yourself where you indicated that as a precondition of your support for the governments resolution, that the government would have to agree with the proposals that you are making today.

Will you give the same support on behalf of the NDP to the Atlantic Provinces in terms of protection of their offshore resources as you gave to the landlocked provinces? In other words, will you set as a condition of your continued support for the governments proposals their agreement to accept provincial control of offshore resources?

Mr. Broadbent: Mr. Chairman, I would like to make two points in reply to that. First of all, the provinces east of the one we are now speaking in who are affected by our resource amendments include of course Quebec, Nova Scotia, New Brunswick and Newfoundland. In Quebec such resources as asbestos, minerals and electricity are covered by our amend-

[Page 95]

ments; in Nova Scotia, forestry and minerals; in New Brunswick, forestry, minerals and potash specifically; in Newfoundland, forestry, minerals and electricity; so all of those provinces in Atlantic Canada are well covered by the amendments that we are moving and that we hope the Conservative Party will cover. That is the first point.

The second point I would make, and I say this with all respect, when one is negotiating one begins with an assumption about what is achievable and one is prepared to use a little muscle when you have it. When you have 32 members, I have no hesitation in saying that is only 32 members. The Conservative Party has more and I wish they would produce more substantial results in terms of some of these matters by a more cooperative attitude; but when we bargain, one has to recognize in this particular case we are dealing with the governing party and they were fundamentally opposed to offshore control of resources going to the provinces.

I do not agree with that attitude but they are entitled, I suppose, not I suppose, I know, to have that belief with every bit of legitimacy, as you and I have a contrary belief.

Now, there was some hope of moving the Liberal party of Canada on these other matters. They were open to moving and I know something about the history of the trade union negotiating process, so you do not reach for the moon. The real objective was to get what was getable and what we have achieved in my judgment is good for all the Atlantic provinces that have just indicated in a whole range of resource matters us well as the other provinces of Canada; and I do not apologize that we did not get the whole shebang, but we did pretty well.

Mr. Beatty: Let me ask you this very simple question. Will you set, as a condition for your continued support of the government’s package that they accept Mr. McGrath’s amendment on offshore resources, yes or no?

Mr. Broadbent: Yes or no—you will have to sleep on that, Mr. Beatty.

Mr. Beatty: Let us have a straight answer. Surely the people of the Atlantic Provinces are entitled to a straight answer.

Mr. Broadbent: I think the answer for everyone, Mr. Beatty, is probably pretty clear.

Mr. Beatty: What is it, then?

Mr. Broadbent: I will draw you a diagram, Mr. Beatty, and send it up to you.

Mr. Beatty: Perhaps you could clarify it for me. Is your answer yes or no? Are you refusing to answer?

Mr. Broadbent: I am refusing; I am really holding out; I am covering up and I am deceiving and I am trying to mislead you.

An hon. Member: It was part of the deal.

[Page 96]

Mr. Beatty: Maybe it was part of the deal.

Mr. Broadbent, I think the people of the Atlantic provinces are entitled to a straight answer from you, and you were the one, Mr. Broadbent, who this evening said that you accorded absolutely equal importance to the issue of offshore resources to what you accord to the position of the inshore provinces. We are going to have two classes of provinces on resources as a result of the position which you are taking. You have managed to secure, you say, significant concessions from the government for those land-locked provinces in Western Canada and yet you are saying you are not prepared to go to the wall for the provinces in the Atlantic area of Canada whose offshore resources are affected.

How can you justify that? How do you square that with your assertion that you accord absolutely equal importance to the two sets of resources?

Mr. Broadbent: Mr. Beatty, you have heightened the rhetoric and I am going to reply in kind.

You are back to your high school level of debating and I have listened to you and now I am going to reply.

Mr. Beatty: Please do. I hope you will answer the question.

Mr. Broadbent: Yes, I certainly will answer it. Your party, in my view, in recent months has donc a great disservice to this country in stirring up discontent in Western Canada and, not happy with that effort, you are now trying to do the same thing with Eastern Canada.

Mr. Epp: A point of order.

The Joint Chairman (Mr. Joyal): Order, please.

Mr. Broadbent: Mr. Chairman, I will come to reply to the question now.

The Joint Chairman (Mr. Joyal): I have first a point of order to deal with before I invite you to go on, Honourable Jake Epp.

Mr. Epp: Mr. Chairman, around this committee for a number of months, we have all had good partisan arguments, but one thing we have not done and that is to charge parties or individuals with trying to break up the federation, or creating discontent. We are obviously opposed very strenuously to the government action, but you are saying, Mr. Broadbent that we are creating discontent relative to the country and I think those are two different points and you should stay with the one that is factual.

Miss Campbell: Mr. Chairman, on that point of order, I heard the last question and the implication was that this was a divisive amendment proposed by the NDP in the east.

Now surely, we have listened to questions that were not on the amendment for the last 10 or 15 minutes, not particularly, on the amendment, just sheer questioning of the witness, of one of our own members.

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Now, I do not think it divides the east and if you want to debate on whether or not it divides the east, I will give you a debate. It hits on very important areas in my own constituency, of pulp and wood.

Now, I do not think because he makes one statement about the east that he is alienating the east on this amendment. I personally feel that Mr. Broadbent is answering it, and he should answer it.

The Joint Chairman (Mr. Joyal): I think that all honourable members should remember that when we have to discuss amendments and subamendments the Chair has always invited honourable members to remain as much as possible on the content of the proposed amendment, and that applies to everyone around the table. That is the way that we have been proceeding at this point and as I have said on many occasions, that procedure has served us well in the past and we have been able, with the cooperation of everyone around the table, to move ahead. That is why tonight we are on Clause 51. At this point I would like to invite honourable members to go on, with that thinking in mind.

Mr. Broadbent.

Mr. Broadbent: Mr. Chairman, I want to conclude by emphasizing that the question that was put to me was precisely in the form, are you not ignoring one part of Canada and showing favouritism to another? That is the way the question was put, and if the question is put to me, Mr. Chairman, in that way, surely I am entitled to reply to that accusation.

My reply is that the amendments that we have put forward and I can detail at great length, as we will in the forthcoming debate in the House, how they beneficially affect every province in Canada from British Columbia in the west to Newfoundland in the east, we would like to have included offshore resources but because the governing party in its judgment that I happen to disagree with, but in its judgment was unprepared to move in offshore resources.

With all respect to Mr. Beatty, I would say that is not my fault, we did what we could to get benefits for all provinces within a limited range, three-quarters of the areas of resource concern. The fact that we missed one is not our fault.

The Joint Chairman (Mr. Joyal): Thank you, Mr. Broadbent. I see at this point—I have of course, a long list of speakers. I will keep their names down. I would like to mention Mr. Hawkes, Senator Steuart, Mr. McRae and many others around the table. At this point, I would like to invite honourable members to sleep on everything that has been said tonight and is on the table, and we will resume consideration of the proposed motion tomorrow morning at 9.30.

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February 5, 1981, Debate in the House of Commons (click HERE)

—–o0o—–

February 5, 1981: Debate in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 54, then scroll to p. 18)[11]

Mr. Hawkes: Thank you, Mr. Chairman. I hope I can have the attention of the Minister as well as members of the New Democratic Party.

What has been introduced here is a very long amendment with some severe, if you like, consequences for Canada and we have been struggling with it, I personally have been struggling with it, for several weeks to try to anticipate the form of the amendment. I would like to use my time in interaction with the NDP Party and with the Minister and his officials to attempt to clarify for myself and, hopefully, for other members of the Committee, what would be the exact consequence of this rather extensive and complicated amendment.

The first thing I think that should be noted, Mr. Chairman, is that the NDP amendment as submitted to us is exactly the suggested amendment that Premier Blakeney made before this Committee. It is word for word and comma for comma. In fact, what the NDP have moved is an amendment proposed by one province in this country.

The government has, through its subamandment, signalled that they will modify it and to some extent, on behalf of the Canadian people, I would congratulate the government because they are sticking to the terms of the agreement reached between the Leader of the NDP and the Prime Minister of Canada.

The Leader of the NDP tried to raise the ante after the goods were sold and the government has resisted that increase in price. To that extent the government should be complimented on keeping its half of the bargain.

It does disturb me. Historically, those of us who live I think in particular in the prairie provinces, but certainly in Western Canada, can trace very easily the beginning of economic wellbeing, to the decision in 1930 to grant Saskatchewan and Alberta in particular, and Manitoba, the same rights that other provinces had in relationship to resources, and it is a very important symbolic right and a very important economic right to those of us who live in that region. Whether it is real or not, it is perceived to be of fundamental importance to the people who live in that region and it is in that context that I am very, very nervous that this Committee of the federal Parliament is dealing in fact with an amendment that is so clearly specified in the constitution of Canada as a right belonging to the provinces, and the absence of provincial representation in this discussion makes me very, very uneasy.

Be that as it may, my first question, and I will read just a brief summary of the BNA Act, 1867, Section 109, which says:

All lands, mines, minerals and royalties belonging to the several provinces of Canada, Nova Scotia and New Brunswick at the union shall belong to the several provinces of Ontario, Quebec, Nova Scotia and New Brunswick.

That is the historical derivation of the rights to ownership enjoyed by provinces.

Now we have an amendment before us and the title deals with nonrenewable natural resources, forestry resources and electrical energy and I would like to ask the law officers of the Crown if the terms “lands, mines, minerals and royalties” are

[Page 19]

synonymous with the title nonrenewable natural resources, forestry resources and electrical energy.

Mr. B. L. Strayer (Q. C., Assistant Deputy Minister, Public Law, Department of Justice): Mr. Chairman, I think one could say in a general way that those are synonymous because the resources that you would find based on lands, mines, minerals would be nonrenewable resources; but the two terms are not necessarily synonymous, nor is there any particular reason why they should be.

The language which is used in this amendment, which was developed over quite a long time in discussions with the provinces, is designed to confirm additional authority for the provinces with respect to certain important areas of management of resources so that the draft that you see here and the language which is employed is not really addressed to the ownership question. The ownership situation remains as it was. Section 109 remains, in the BNA Act, the provisions on the natural resources agreements, for example, remain where they are. The various ownership sections in the various Terms of Union with provinces that came in separately such as Newfoundland and P.E.I. and BC. all those remain in place. The ownership rights are defined there.

What this draft does, I believe, is to add and strengthen the management powers of provinces and confirms additional rights with respect to management of trade in resource products after they had been extracted from the Crown land or from any land in the province.

So this really goes beyond the question of ownership and it gives new powers to provinces in a rather specific but large area, that is, the regulation of commerce and the taxation of products of nonrenewable resources.

Mr. Hawkes: When you say that it strengthens the rights of the provinces to manage then it must strengthen them at the expense of someone else.

Who are we taking away from?

Mr. Strayer: It gives the provinces a clear constitutional role in regulating interprovincial trade. That is a concurrent authority. It will be made a concurrent authority. It does not take away Parliaments ultimate paramount authority, but it gives the provinces now a clear authority to act in the area of interprovincial trade, and that necessarily attenuates if you will, what is now an explicit federal authority, by giving the provinces an entré into that area.

Mr. Hawkes: In other words the provinces can move into an area that the federal government has not dealt with.

Mr. Strayer: That is right.

Mr. Hawkes: if the federal government has dealt with it, the province has no room to move.

Mr. Strayer: That is the essential difference that under the present Constitution, even if Parliament does not see fit to

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regulate the matter of interprovincial trade the province cannot do so.

Under this proposal, the provinces could move into the area even if Parliament has not acted. It leaves open the possibility that Parliament may want to, for national reasons, also regulate the area in a way that may over-ride what the province does, but in the absence of some action by Parliament of the federal government, the province will be able to regulate the area.

Hon. Jean Chrétien (Minister of Justice): With your permission, Mr. Chairman, to add to this comment, one of the cases that involved the Saskatchewan government as producers was an area where the federal government had no objection, and they had consulted with the federal government before moving. We said that we had no objection and they moved ahead with their plans, and the legislation, and the court ruled against them because they have no jurisdiction, even if they had our approval. So now, if this had prevailed at that time, the courts would not have been able to intervene at all.

Mr. Hawkes: Lands, mines and minerals, right back to the BNA Act, 1867, has taken us to a system in this country where the ownership of surface land in some cases, belongs to one party and the mines and the minerals under that land belong to a different party. Okay.

We are talking about ownership, the ownership of surface lands, the ownership of mines and minerals which lie under that land. We have then, in Canada, the following ownership position as related to mines and minerals.

We have provincial Crown ownership; we have federal Crown ownership; we have freehold ownership; we have Indian reserve land ownership and a brand new concept which this Committee has approved, which remains to be discovered, and that is called aboriginal ownership, for lack of a better term.

Now, can you tell me, in relationship to the proposed Section 92A(1)(a) which reads:

exploration for nonrenewable, natural resources in the province

Can you tell me, first of all, whether the words “in the province” include all those kinds of ownership and does it place the authority of the provincial legislature, put in place the authority of the provincial legislature over all those five kinds of ownerships.

Mr. Strayer: The clause certainly confirms the power of the province which it probably already has now anyway, with respect to regulating exploration for nonrenewable natural resources. As a general proposition, the province can regulate that with respect to any lands in the province, but one has to recognize certain qualifications to that.

The province cannot regulate the use of federally owned lands, for example, in the province. The province cannot make laws with respect to Indian lands in the province, say reserve lands, that is a power they do not have under the existing

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constitution and this I think would not give them that power either because this power has to be read subject to other provisions of the BNA Act.

With respect to aboriginal rights, which Mr. Hawkes mentioned, I guess we cannot be entirely sure how this is going to relate to that because obviously the aboriginal rights will be given a constitutional recognition by Clause 31 which may well qualify the way in which the provinces can regulate exploration if there are aboriginal rights involved. There will be problems of definition and interpretation that will have to be worked out there over time.

Mr. Hawkes: By the courts?

Mr. Strayer: I assume so, if we do not all come to some common understanding as to what the inter-relationship is. I suppose that the courts may have to address that question sooner or later as the provision in Clause 31 of the affirmation of aboriginal rights will certainly have a bearing now on how the regulation of exploration will be carried out by the provinces.

Mr. Hawkes: The one part of my question which you did not address was freehold land.

Mr. Strayer: Oh, I am sorry. As a general proposition this clearly confirms the right of the province to regulate exploration on freehold lands.

Mr. Hawkes: Can I just put that in practical terms. I am a farmer in Saskatchewan and I have a section of land which my family has farmed for three generations, and what you are confirming in the constitution of Canada is the power of the government to determine to say that my land shall be explored.

The government can say, regardless of the fact that I own it, the government can say: you must allow a drilling rig on there to drill and see if there is any oil underneath?

Mr. Strayer: Yes. That power now exists because of the provincial jurisdiction under Section 92(13) of the BNA Act, the power of the province with respect to property and civil rights, and of course provinces do have such provisions in their existing laws where there is a right under certain conditions for the petroleum exploration operation to come in, subject to Compensation being paid and other conditions being met, and that power of the provinces to provide for that would continue under this.

Mr. Hawkes: Well, you said they now have the power under certain conditions.

Mr. Strayer: That is my understanding. I know in the laws of many of the provinces that the—I am sorry, are you talking about the situation where there is a private freehold owner of the surface and somebody else owns the mineral rights?

Mr. Hawkes: I am talking about the one owner has surface rights and mineral rights.

Mr. Strayer: I am sorry, I was thinking of the other situation where somebody else owns the subsurface. In that case he is allolwed to lease his mineral rights or sell them to

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somebody else and the exploration operation can come in and get to those rights and the surface owner cannot stop it.

In the other case, I think the answer is, sir, that theoretically it is possible now for provinces to require the exploitation of resources on your property but I do not think any of them do; but in theory, because of the rather absolute jurisdiction which provinces now have under the property and civil rights heading they could do that just as they can expropriate property for construction of a highway, but I do not believe any province does at the moment have legislation quite that draconian as far as requiring you to develop your mineral rights is concerned.

This, in short, would not change that situation. It remains, I think, a matter of policy that provincial governments do not do that sort of thigh where the owner does not wish to have his minerals exploited. They do not do that by law now and presumably they will not do it in the future, but this does not really change the constitutional situation with respect to the possibility of them doing that.

Mr. Hawkes: It does not change the legal basis for argument? It would not be used in court, it would be irrelevant—if a private landholder who owned the mineral rights and the surface rights chose to fight the decision of a province to move in on their land, this clause would not be used?

Mr. Strayer: If he chose to fight and if the province was trying to authorize that sort of thing. All I am saying is the province could now rely on its jurisdiction over property and civil rights to authorize the exploitation of the resources of the freehold owner.

In the future the province could rely both on property and civil rights and on this clause, but I do not think it would change the situation essentially. The province, in other words, would have the constitutional power to do that, just as the province has the constitutional power to expropriate property now even without compensation if it chose to do so, but the provinces do not do that.

Its constitutional power is there now, it would remain. The fact that that sort of thing is not done is a matter of policy judgment rather than a constitutional matter being involved.

Mr. Hawkes: Let me track this just a little bit further, maybe the Minister would care to respond, but the mover of this motion, the Leader of the New Democratic Party in his speech in the House of Commons to this clause, and in his speech last evening, assured members of this Committee and members of the House of Commons that this amendment would have the effect of stopping private owners from challenging the government in court.

Now, what you are telling me is that that is not correct?

Mr. Chrétien: I think Mr. Strayer replied to that question but the way I see it is he must have been referring to the cases in Saskatchewan where the government there passed some

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legislation in interprovincial trade or indirect taxation that was challenged in court.

So in relation to the two matters, these two cases now could not be taken into the courts because of the new power that we are giving to the provinces through that amendment.

Mr. Hawkes: In particular, Mr. Minister, the Leader of the New Democratic Party in his speech in the House of Commons made mention of the asbestos situation in the Province of Quebec and in the context of control, that was the thrust of the paragraph, and I think the clause in this amendment, proposed Section 92A(1) deals with the issue of control. We have been discussing control for about 15 minutes and your officials have told me that the impact of proposed Section 92A(1) on the issue of control related to private ownership is nonexistent, that it changes the situation in no way.

And the leader of the New Democratic Party told us last evening that in fact this situation was going to be dramatically different. He told us in the House of Commons that the control of the provinces was going to be asserted by this paragraph, we are going to have something new for the provinces and now you are telling me we have nothing new.

Mr. Chrétien: Mr. Strayer would like to give a clarification to the previous answer, but I said there was a lot new when I spoke about the possibility that existed before in the private sector to take governments to court on indirect taxation and on interprovincial trade. And this power then given through this amendment to the provinces, there is a change there but it is not absolute as you would like us to say.

Anyway, Mr. Strayer will give a clarification to a previous answer.

Mr. Strayer: Mr. Chairman, I just wanted to make sure that I had not mislead the Committee in any way.

I was addressing what I understood to be the question that Mr. Hawkes had raised as to the particular situation, the application of proposed Section 92A(1)(a) to a situation where you have a free hold owner who owns both the surface and the subsurface, the question being whether this chanfes in anyway the right of the provinces to control exploration on that property.

I said that I do not think this changed probably the provinces existing power but I was not attempting in any way to deal with all the other situations covered by the clause and I was not addressing what I think was the issue that Mr. Broadvent was addressing last night.

If I left the impression that I was, I apologize.

Senator Steuart: Thank you very much, Mr. Chairman.

My questions will not be very long. I want to direct two questions to the Minister. But I would like to point out that my understanding of the NDP amendment is that it will in fact solve some of the complaints of some of the provinces in regard to the control of natural resources such as the Province of Saskatchewan.

While to me and to most objective-minded people it is clear that the provinces have now and will continue to have the clear ownership of resources, the amendment introduced by the NDP will give them greater control.

My first question to the Minister is: will the government’s subamendment allow the provinces to control and set the rules with regard to the production of nonrenewable resources?

Specifically, I would like to refer to the pro-rationing of pot ash that our government, when I was in the Government of Saskatchewan, put into effect in the late 1960s.

If my memory serves me right, it was upset by the courts, not because of the limited production, but because we in fact spread the production with the sales among the various mines.

My first question is: is it clear that the subamendment will not limit the right of the provinces to protect their resources in this manner?

Mr. Chrétien: The answer to your question is that this amendment will permit what you have described; the provincial government will be able to establish prorationing of the production within the province.

In my answers I have already said that the cases which were taken to court following the pro-rationing which was introduced in Saskatchewan, today the same challenge could not arise, would not be taken because the provinces will have power to do such regulating.

Senator Steuart: Well, I am pleased with the answer and will certainly support both the subamendment and amendment if in fact it is amended by the subamendment.

But I would just like to remind the Minister, if I remember rightly, that the Government of Canada did not in fact object to the prorationing. My memory is a little bit different. As a matter of fact they did object very strongly to the whole process that we engaged in at the time. But they did not institute the court case. I notice the NDP smiling.

I would also point out that Mr. Blakeney and the NDP in opposition opposed the prorationing very strongly, calling it an international cartel and promised to end it, but immediately upon becoming the government they strengthened it and car-

[Page 28]

ried it on for the next several years and were then taken to court.

However, I was pleased to see them do that because it was protecting our natural resources. I would hope that the subamendment by the national NDP and the subamendment of the Government of Canada receives support, and I would be amazed if it did not receive the support of Mr. Blakeney, because it is clearly something they want.

The second question deals in the same regard with the right of the provinces under both the amendment and subamendment to allow the provinces to engage in indirect taxation. Again, I refer to the Cigol casein Saskatchewan.

Is it very clear that with your subamendment the provinces will be able to do what Saskatchewan did in the Cigol case and other cases, and which was subsequently disallowed by the courts and threatened some 500 million dollars of revenue that the Province of Saskatchewan had already collected?

Is it clear they will be allowed to do this if this subamendment and amendment pass?

Mr. Chrétien: The answer is yes.

Senator Steuart: That is fine. Again that pleases me and is one more reason why I would urge members to support both the amendment and subamendment.

I would also urge the Government of Saskatchewan to take another look at their position. I would be amazed if they did not support this, because if this becomes part of the new constitution of Canada, it is clearly some protection that we, in Saskatchewan, have fought for for years, the protection of the control and taxation of our natural resources. Although it does not go, obviously, as far as Mr. Blakeney wanted it to go, I would think it goes 90 per cent of the way, and again, I would hope they would in fact join their national NDP brothers and support both the amendment and subamendment.

The Joint Chairman (Mr. Joyal): Thank you.

Mr. Waddell.

Mr. Waddell: I note with interest, Mr. Chairman, the approval remarks of Senator Steuart, who I understand was Deputy Premier of Saskatchewan at the time of the pot ash regulation.

I wanted to make some remarks in relation to Mr. Hawkes’ comments. I think, however, I will forego them, except to point out that in case Committee members think that these amendments simply deal with the Province of Saskatchewan, I would like to say that my own province, British Columbia, will be affected by the amendments, in the sense that the amendments firm up the control of provincial resources. Ownership has always been there. It has not been taken away. As some opposition members said when they spoke on the coast some months ago, the ownership is still there, but there is increased control.

It could have many effects in my province if there was ever a challenge to the control of natural gas, of forestry and of electricity and so on.

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It has important consequences in terms of provincial control of resources in other provinces other than Saskatchewan and in particular in the Province of British Columbia.

The Joint Chairman (Mr. Joyal): Thank you.

Mr. Hawkes.

Mr. Hawkes: Thank you, Mr. Chairman.

If I can go back to proposed Section 92A(1) in trying to move more quickly, in proposed paragraph (c) of that clause, development conservation, it gives exclusive jurisdiction to the provinces over development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

There are two kinds of electrical energy this brings to mind for me; one is hydro electric which involves frequently bodies of water that cross provincial boundaries.

I am interested in the legal interpretation as to whether or not this is an attempt to confer on the provinces the right to do what they like, in terms of electrical generation, with bodies of water even though those cross provincial boundaries?

Mr. Strayer: The text really relates to the generation site of the facility itself and not to the body of water which is used to generate the electricy.

Mr. Hawkes: A hydro electric dam is a site and it is on a body of water and it affects the flow.

Mr. Strayer: To that extent the text obviously confirms and enlarges provincial jurisdiction over that.

Of course, like any other power in the constitution it would have to be interpreted in the light of other provisions of the constitutions. This is an exclusive provincial power. There are other exclusive federal powers, such as the federal jurisdiction over navigation.

This will have to be interpreted side by side with the federal power of navigation and neither one could be applied to the complete abolition of the other.

It is a problem familiar to constitutional lawyers trying to interpret one section like this in the light of another one.

Mr. Hawkes: Let us move to another form of electrical generation called nuclear.

There is concern on the part of the public about nuclear safety.

It is conceivable that the Parliament of Canada at some point in the future might decide that in Canada they did not want any more nuclear power stations built.

If that decision were taken by the Parliament of Canada, could it be overturned by a particular province which wanted, because of this clause, to proceed with the building of nuclear power stations?

Because, you see, it seems ot me to give exclusive jurisdiction to the provinces in such a case.

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Mr. Strayer: At the moment nuclear power stations are declared to be for the general advantage of Canada under the Atomic Energy Control Act. That situation would still continue until Parliament otherwise provides.

Mr. Hawkes: In the constitution, you are saying that there is no legal basis for argument under this provision, to have that act overturned by a province?

Mr. Chrétien: No, it cannot; because this was introduced under another section of the constitution which remained there, that gave that power to declare the atomic energy— working for the general advantage of Canada.

Mr. Hawkes: So, in other words, it is a bit of flim flam to have wording like this, because the province really does not have control over the development, conservation and management of sites and facilities used for the generation of electrical power?

Mr. Chrétien: No; I have just said that we have legislation based on other sections of the British North America Act which permits us to declare the works of electrical development for the national benefit.

But, if ever we were to withdraw that legislation it will become completely under the authority of the province and they would have the constitutional authority, if ever we were to drop our own legislation on the matter based upon other sections of the constitution.

Mr. Hawkes: In that answer, Mr. Minister, you have opened the door to the principle which relates to the indirect taxation clause.

Senator Steuart was expressing the feeling that most of the provinces would like to have somewhere in the constitution the power to levy indirect taxes.

If I may refresh everybody’s memory, in the Cigol case private owners argued in the Supreme Court in Canada successfully that the Province of Saskatchewan had no power to levy a particular kind of tax, and the court rules in favour of those private owners and against the government.

What has not been said in this forum, is that the government then passed subsequent legislation, collects the same tax anyhow in other ways; and that in terms of free hold land in the Province of Alberta that there are ways of collecting taxes or revenues which the provinces already enjoy.

But the crux of the issue of ownership from a provincial perspective is that the powers which the federal government enjoys are such that the principle of ownership can rapidly be made irrelevant.

We can have it as a symbol; but it has no practical value. I suggest that indirect taxation law has symbolic value but not real value and if I could just ask you the following questions, today we have a very public dispute between the federal government and the provincial government around one resource called oil.

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Under the present constitution of Canada it seems legal, at least no one has challenged it, that provinces can control the rate of exploration and development, when we talk about not starting it tarsands plant, that is going on because provincial governments have the power under the present Canadian constitution to refuse approval of that development.

If you listen to a provincial argument they are doing it because the federal government has the power to set price, that is one power the federal government has. In terms of the federal government’s taxing powers it has the power to ignore monies paid by producers to provincial governments and to say that those are not a business expense; so that by using the powers which the federal government has it can in fact make production uneconomical and therefore control it, cut it down, make sure it does not happend. Right in there is the nub of the concern of ownership, and I am wondering if this clause does anything about it.

The Joint Chairman (Mr. Joyal): Mr. Bockstael, on a point of order.

Mr. Bockstael: Point of order, Mr. Chairman. We had an intervention by Mr. Hawkes as you mentioned of 20 minutes. We have gone on for another few minutes and we have allowed him to have a second go but the point is that the question before us is do we want the provinces to have the power that is in the clause or do we not, and he is asking for a course, an instruction in law on what goes on. It has almost been a monologue, expressing opinions and asking questions that do not seem to pertain. I find it very difficult to see that they relate directly to the clauses. It seems that he would like to be given a short course in provincial law and what it does between the province and the owner; and we are here to say yes we approve an amendment that will transfer the powers over natural resources to the provinces, yes or no. I think that he is belabouring something that is not taking us any place.

The Joint Chairman (Mr. Joyal): At this point I think that I would like to invite Mr. Hawkes if possible to conclude in the next minutes. I think it is now more than half an hour that this Committee has given the opportunity to the honourable members to put their questions. In no way do I want to prevent him from asking questions on that very subject because it is an important subject. As a matter of fact, it will have a new part, Part VI to the proposed resolution and on those grounds the Choir was ready to give him all the opportunity to put forward his views and ask questions, but at this point I will have to draw the attention of the honourable member that after half an hour I will have to really invite other honourable members to participate in the debate.

So if you would be in a position to conclude at this point your line of questioning, the Chair will be grateful to you, Mr. Hawkes.

Mr. Hawkes: Thank you for your grace, Mr. Chairman.

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I have so many more questions that I find it difficult to conclude but maybe I will try and summarize the dilemmas.

If we take two neighbouring provinces, the provinces of Saskatchewan and Alberta and their concern about natural resources, different concerns come about because there are different ownership conditions that presently prevail. The resources that are important to citizens of Alberta are primarily available from provincial Crown land; the ownership is primarily in the hands of the provinces.

In the Province of Saskatchewan the ownership is primarily in the hands of private individuals and right in there we have a complexity that leads I think the NDP party, with a concern for Saskatchewan and the government of Saskatchewan, to move a set of amendments that may in fact facilitate in some ways the power of the provincial government over the private owners that exist in that province. That is consistent with their philosophy and I am not surprised at all to see an amendment that does that.

In the context of doing that, we are disturbing the status quo, the jurisdictional precedent which has been argued off and on in the Supreme Court of Canada since 1867. We are introducing new words that will have to be argued, the meaning of which will only become apparent over time. We are doing that in the context of passing previous amendments, those particularly related to aboriginal rights, that throw into doubt large chunks of land, particularly in the western part of this country. We are throwing into doubt who has ownership and control. We are doing it, I guess, under the context that the one really important thing is the right of the provinces to levy indirect taxes and while I agree that there is symbolic and unifying value in asserting that right I suggest to the Committee that if it thinks that in fact it is giving anything to the provinces which is necessary, which cannot be circumvented, then the Committee is operating under an illusion.

When the Leader of the New Democratic Party last night asserted that the province of Alberta would be $6 million richer because of their power to levy indirect taxes I suggested that that statement is not confirmable in fact; that the previsions that exist, the laws that exist in the Province of Alberta to collect revenues from the production of resources from freehold land are unassailable and they can be set at the rate determined by the province. If the province wants $600 million from that freehold land it can already do it and there is nothing in this clause that affects that situation in any way.

I wanted to at least, Mr. Chairman, attempt to lay on the record those facts because I do not think they are well understood by the Canadian public; I do not think they are well understood by the members of this Committee; and in the context of the questions that I have asked I think the constant refrain in the answers, if you try to summarize them, from the people who assist the Minister of the Crown is that it makes no difference.

Question after question. it is being asserted that it makes no difference. That is not entirely correct because the new words will have to be argued in jurisprudence and it may make a

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difference; the Minister’s own criterion for many of the amendments that we have faced in this Committee is if it makes no difference it does not belong. That is the argument used by the government on many occasions to turn down suggested amendments, and I commend that wisdom and ask him to think that through in the next hour or two before this decision is finally reached.

I thank the Committee for its tolerance in allowing me so much time this morning.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Hawkes.

Mr. Paul McRae followed by the honourable John Fraser.

Mr. McRae: Thank you, Mr. Chairman, and through you to the minister. I have two points I want to make, one to the minister and one to Mr. McGrath.

Just to clarify in my own mind, Mr. Minister, what we are actually doing in this NDP amendment is I take it at the present time the federal government has a sort of blanket power over trade and commerce throughout Canada and that by this amendment we would be in effect taking that blanket power away from the federal government and giving the federal government the ability to move in specific areas where it wants to veto things that the provinces would want to do. In other words, we are removing a portion of that blanket power and putting it into a situation where the federal government can exercise that power only when it decides in its interest to make specific legislation. Is that basically what is happening?

Mr. Chrétien: It is the power only of the federal government to intervene in trade and commerce, the federal power in the constitution, and we are extending that power to the provincial governments in the matter of interprovincial trade but of course we are keeping the federal paramountcy, the right to intervene if it is against the national interest.

Mr. McRae: Mr. Chairman, I have a great deal of difficulty with this particular clause. I am prepared to accept it but I am prepared to accept it after I have made it quite clear that this amendment by the NDP I think tends to weaken the powers of the federal government in this respect, in the sense that we have this blanket power and now we will only have power when we specifically decide to legislate.

I accept that. I am sorry to see that but I accept in the interest of the nation, of give and take that is necessary in putting a constitution together; and I think that this should be understood, that this is a considerable advantage to the provinces. There has been a great deal of give and take here, and I think that the federal government has actually given a large piece for this kind of agreement.

I think it is acceptable because it seems to be that that is the Canadian way and I just want my constituents and the people of the country to understand, that we have been extremely flexible in doing this.

The other point I would like to make has to do with Mr. McGrath’s motion and because I have considerable difficulty with the motion, I want to take a different line rather than a legalistic approach. There seems to be or there is a fair amount of evidence that where smaller jurisdictions are subjected to

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global corporations, transnational corporations and so on, the ability to manipulate the smaller jurisdiction is much greater than it is to manipulate the larger jurisdictions. I think if we go back to the offshore arguments and the fights that went on in the United States several years back, it was generally conceded that the states like Texas and the offshore states were much more easily manipulatable by the multinational or global oil companies, then was the government of the United States and I think that one would find particular evidence of that in other countries.

Now I am asking Mr. McGrath, and I am asking someone who is a very progressive person and who speaks for all of the people, and I always feel that he does that, is there not in your mind some concern perhaps not with the present government but with what happens after, the past history of Newfoundland, is there not concern that these global corporations would more easily manipulate any government of Newfoundland than they would manipulate the federal government? Is there not a case to be made in your own mind and in the minds of people of Newfoundland that perhaps a deal where 100 per cent of the revenue for as long as the province is below the national GNP or the national average, economic average, is there not a concern that the province could be in much worse shape and it would be better to take this 100 per cent?

It is purely a political question, an economic question, it is not a legal one, but it seems to me that that is one concern that I would have if I were a Newfoundlander in that particular situation.

Mr. McGrath: May I answer that, Mr. Chairman.

The Joint Chairman (Mr. Joyal): Yes, Mr. McGrath.

Mr. McGrath: It seems to me that without intent that my honourable friend is being very condescending, if I can put it that way, and I know that was not his intent at all; but what he is saying is, you know, you little, naive Newfoundlanders and maritimers, you cannot look after yourselves, you need a big brother to look after you, the Ottawa bureaucracy, and you really cannot cope with these big multinational giants.

All I say to Mr. McRae, with great respect, because I am sure that was not his intent but that is the way it came across, is if he has seen the Newfoundland regulations or the Nova Scotia regulations and if he has seen the way that these two governments have been able to handle the multinationals, the Mobils and so on he would not say that. We are perfectly capable of looking after ourselves.

Now, that is to answer the question directly, but to go beyond that, the question implies some kind of exclusivity which is not the intent at all. We recognize. . .

Mr. McRae: I am sorry that you interpret this as being condescending. I tried to put myself in the position of someone in Newfoundland for whom this is happening and I try to put myself, I think of things that have happened to us in Northern

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Ontario, as people in Northern Ontario, as distinct perhaps from people in all of Ontario.

I am very concerned about what big power does to a smaller group of people, and this is why I tried to project myself into another jurisdiction, to another province, and say: how does that affect a province?

You have answered the question partially, but the question is, is that what you are talking about is a very, very long term thing and can you be sure that this kind of thing will not happen? I have seen it happen in Northern Ontario and we try our best to eliminate that but we do not always have the power to do it, and it is in that mode that I bring this to you. It would be a concern to me in Northern Ontario if approximately the same thing was happening and I would think that it would be a concern of yours in this connection.

Mr. McGrath: Well, all I can say to that, Mr. Chairman, is, and I do not want to get myself boxed in to answering for the Newfoundland government, they are well able to answer for themselves and that is not the position we should be in in this Committee anyway, to answer for governments.

However, to reply to Mr. McRae’s question, we have been exploited for so long by so many that we have become experts at dealing with them, perhaps even more expert in dealing with them than some of the people in Ottawa who would consider themselves to be much more capable of handling the multinationals.

We have had a long history of international and multinational companies and foreign governments exploiting our resources and believe me, we are not babes in the woods at this. And that applies to Nova Scotia and the Atlantic generally.

However, I just want to conclude in replying to Mr. McRae that in no way does my amendment to the amendment suggest any degree of exclusivity, it merely puts in amendment form the best efforts draft of last summer to which all provinces agreed—well, perhaps nine out of 10, but certainly most provinces agreed and, as I say, it has that level of support, it has that degree of legitimacy, if I can put it that way.

It is the best efforts draft as a part of the negotiating process of last summer that culminated in the first minister’s meeting. If it were to be adopted by the government it would not suddenly mean that Ottawa, the federal government has nothing to do with it, indeed that is not the case at all; it would still mean negotiation, and that is what is so unfair about the Minister’s position because to suggest that this matter should be settled by the courts and that somehow the Supreme Court of Canada is going to be some kind of a magic wand that is going to make this problem go away is just being totally naive because even if the matter were to be referred to the court and if the court were to settle in favour of Ottawa or the provinces, the problem still would not go away, it would still have to be negotiated in terms of the political dimension of it, in terms of the overlapping jurisdictions.

The Joint Chairman (Mr. Joyal): Thank you very much, honourable James McGrath.

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Honourable John Fraser.

Mr. Fraser: Thank you, Mr. Chairman.

I want to ask some questions about the amendment, and Mr. Waddell may wish to answer this first question.

I understood Mr. Waddell to say some minutes ago that while he concedes what Conservative speakers in British Columbia said several months ago, that this amendment is not going to increase ownership of resources in the Province, he concedes that, he says that it will firm up control and that that is important to the Province of British Columbia.

Now, I wonder if Mr. Waddell can tell us in any specific way how this amendment is going to give anything to British Columbia that it has not already got on the question of control and management of resources, and having asked that I say I am not directing this question to the question of interprovincial trade but I am just saying if you have ownership, you already have ownership under the constitution, just exactly what has this added?

Mr. Waddell: If I can answer that, first of all let me say to my good friend Mr. Fraser it is not that Conservative speakers, and I exclude him from this, were saying that it was not going to add anything to British Columbia, they were saying that it was, as I understood it and I hope perhaps I got it wrong, stand corrected if I did, I thought they were saying that in fact it was going to take away provincial control of resources. I believe the honourable member from Vancouver Centre had said something to that effect, perhaps mistakenly, and I am glad to see that you acknowledge today that it is not going to take away provincial control. I trust you are not saying that.

Mr. Fraser: Well, just to clarify, Mr. Chairman, through you, I do not think I ever said it would take away . . .

Mr. Waddell: No, I did not say that.

Mr. Fraser: But I think there have been statements made by members of my own party in British Columbia that when you take a look at the total package, that there is a fear that with the power shifting to the federal government by way of a referendum, that some day resources of the provinces could be taken away.

Now, that may be what my good friend is alluding to but I am not in that argument right now. I am trying to get down to the basis of just what is this going to mean in terms of reality. I mean, I can see the symbolism of it but what worries me also is if you have to start saying that management and control, if you have to assert that management and control is now a provincial right, I thought we had that with our right of ownership. I thought we had it anyway.

Mr. Waddell: Let me respond to that, Mr. Fraser.

Surely you would agree with me as a lawyer that if you read the Potash case, that the case puts into question that right, the right of management and conservation, a right which is so important to us in British Columbia, and that is a threat to the right. There could be cases taken on the basis or possibility of companies challenging regulations in British Columbia, present regulations or future regulations, on the basis of the Potash case.

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Would you not agree with me that a lawyer could cite that case and use that case in challenging the programs that cover management and conservation of resources within British Columbia?

Mr. Fraser: Well, as a lawyer I am wise enough probably not to accept your invitation to pass judgment on how the Potash case might be used at some future time, but as a lawyer I will concede that almost anything is possible in the minds of lawyers when they are arguing a case.

However, I still do not understand what this amendment is going to suddenly do for the Province of British Columbia in terms of the actual day to day administration, the control and the management of our resources.

I am not saying that I am against the amendment, but what I guess I am grinding away at is that there has been a lot of rhetoric about this amendment. There has been sort of an atmosphere that this is a great breakthrough.

Now, it may be and it is helpful with respect to the problem of indirect taxation where the Crown does not own the land or the resources but they are privately held, I concede that, not only do I concede it, I accept it; but on the question of management and control of resources in the Province of British Columbia, ! find it very hard to accept that this is really going to give to British Columbians more control than they in fact already have now under the constitution, the Potash case notwithstanding.

Mr. Waddell: Well, first, Mr. Fraser. I am glad that you conceded that point with respect to control over the private lands, as it were, because Mr. Hawkes had said that provincial ownership was a mere symbol but of no practical value, and under my calculations, just on the basis of 20 per cent of oil and gas production in Alberta, I will come to British Columbia in a moment, is freehold production and now the provincial government could put an indirect taxation on that equivalent to a 30 per cent royalty, that would be something like $797 million on oil and gas.

Now, that is not mere symbolism, that is quite practical.

With respect to the effect in British Columbia, I cannot give you any particular figures but I can say this, Mr. Fraser, that it is more than just a symbol. The Potash case and the Cigol case put into question the control and the management and conservation of resources, and British Columbia as a province cannot permit that to happen because it could be challenged in numerous ways in future cases.

It is of particular concern to those of us who are New Democrats hoping to form another government in British Columbia, we intend to put in innovative and useful programs on resources. We do not want them struck down by the courts the same way that Saskatchewan had the problem with the regulation of Potash and control of windfall profits on one resource, on oil in Saskatchewan, so it is not a rhetorical thing, it is a real thing in that respect.

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Mr. Fraser: Well, I do not think it is as real as you feel it is, Mr. Waddell, but you have answered the question and I will of course consider it in due course.

I think it is important that people listening to this exchange, and I say this with complete satisfaction, with my good friend Mr. Waddell because we are good friends and have been for many years, that the taxation problem is not merely the same in the Province of British Columbia where practically all of our natural resources are -in the hands of the Crown so we do not have quite the same problem that we had in Saskatchewan.

I want to ask another question and that is, and I might direct this through you, Mr. Chairman, to the law officers of the Crown, in the amendment, and this question does go to the law officers of the Crown, proposed Section 92A(1)(c), the effect of that is that in each province the legislature may exclusively make laws in relation to development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

Now, again I am not at all sure that that right does not already exist in the Province of British Columbia in any event, but does this weaken the federal power to refuse to go along with huge dam building projects in British Columbia if those dams would destroy the fishery or severely diminish them?

I am sure that honourable members know that one of the longest battles, and it is not over yet, ever fought in this country has been the constant fight on the part of citizens and some politicians to stop the dam builders in British Columbia. For years we have been facing the threat of eventually putting a dam on the Fraser River. There are extensive plans now for Alcan to launch its Kemano 2 project, probably the biggest grab of water resources attempted in 30 or 40 years in British Columbia.

There are plans to make extensive electricity sites on other rivers, and this is not a struggle that is in the imaginations of a few people in a conservation organization somewhere, it is very real and I can tell you that as a British Columbian and one who has been involved in this battle for a good many years, as my friend Mr. Waddell well knows, I do not want this amendment to in any way derogate from the federal power to protect the fisheries in British Columbia and to protect the water that is vital to those fisheries.

I do not have to go into pointing out to the honourable members all the other benefits of those rivers and river systems in terms of recreation, economy, tourism, et cetera; but I take a look at that and I say I am worried about it and I am very worried about those words that say exclusively make laws in relation to development of sites and facilities in the province for the generation and production of electrical energy.

I can tell honourable members, if you think I am fooling, that the minute that is seen by some of the people back in my province, some of the people in British Columbia Hydro and some of the people who think that the way you solve all problems is to set a bunch of engineers together to change nature, there is a very good-possibility that those words will be used to support propositions which will result in major changes to rivers and river systems, and I am concerned about it, and I

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do not think that anybody in this Committee ought to not be concerned about it.

You can say, through you, Mr. Chairman, and probably it will be said: well, this is the problem in a constitution because after all there is a specific section that deals with fisheries under the constitution and it is a federal authority. It was mentioned some time before about navigable waters.

Well, I do not notice the federal government rushing in to stop the new project on the Peace River which is going to wipe out a huge chunk of our arable farmland in British Columbia, I do not see the federal government rushing in to say anything about the fact that that might interfere with navigation.

The Peace River not having anabas fish in it, at least not salmon, it cannot be defended by the federal fisheries department, I do not see anybody in the federal government rushing out to save the Skagit River which is under threat of being flooded because a dam is proposed on the American side by Seattle city light, so if we pass something here which gives comfort to the enemies of common sense and conservation and our heritage. I think we had better understand what we are doing. I do not like it.

What I am saying is that I think this amendment ought to spell out that control cannot be interpreted to mean that the federal power to protect the fisheries is in any way derogated from, and I think it should be spelled out. I do not have a worded amendment but I would invite the Minister to have his officials look at this over the next hour or the next few minutes because if this is doing what I think it may do, we would be very, very remiss and neglectful in this Committee today not to take a very hard look at it.

I am not asking that the amendment be knocked out, or the purpose of the amendment for whatever value there is in it, I come back to my conversation with Mr. Waddell; I am not asking that.

I am saying, why can we not be careful enough with words here so that we know that that clause cannot give comfort to people who want to put it down—when the Fraser River expanded, Alcan Development in British Columbia, to the detriment of the fisheries and other places.

British Columbia is a long way from many of the people in this Committee; but the West coast fishery is important to every Canadian; and if ever there was a field in which the federal government should have absolute assurance that its power to protect the fisheries, on behalf of all Canadians is not going to be whittled away, and we are not going to do here what can be taken as a transfer of more power than the provincial governments need, and as a consequence of that the provincial government then turns around and says: “Ah, you cannot stop us from building those dams any more, It is our business”.

When we take a look at this wording, it is not just development; it says “conservation” and “management”. When you put those words in, which are, of course, legitimate things for a

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province to do, but when you put those words in I can see a court being invited to rule that by putting “development”, “conservation” ands “management” in, you are giving the province the question of conservation.

A province should of course, be very concerned about conservation; but the federal government has the power over fisheries and our constitution. It has given way on prices and it should never have done that; but it has not given it away in British Columbia—not yet!

I am on the record and I say that I am not agreeing that provinces should be grabbing the jurisdiction that protects the fisheries.

Provinces can enter into arrangements. We do it in my own province. There is nothing wrong with that. Provinces can work with the federal government, as they ought to; but I am very worried that we may be turning over to the provinces here a power that somebody is going to say diminishes the power of the federal government to protect the fisheries, and when I say in British Columbia specifically, I say that because that is the place with the threat of hyro development greatest to the fisheries. But it is a Canadian fishery of very great value to all Canadians.

So, my position is, through you, Mr. Chairman, to the government, will you consider that and will you come back and talk to us about it in the ensuing hour.

The Joint Chairman (Mr. Joyal): Thank you very much, the honourable John Fraser.

Mr. Nystrom.

Mr. Fraser: Mr. Chairman, might I have an answer to the question: Is the government side prepared to give this matter some consideration, and we can talk privately and perhaps bring it back to the table. I do not think what I am asking is anything but very reasonable.

The Joint Chairman (Mr. Joyal): Thank you, the honourable John Fraser.

Mr. Waddell.

Mr. Waddell: Mr. Chairman, while the officials are consulting, I would say that I take, as always, what Mr. Fraser says, with a great deal of sincerity. It is very important. We share the same views about conservation in British Columbia.

I would point out that we still, in the British North America Act, have the fisheries power, and even after this amendment is passed, if it passes, there will be conflicting uses of resources.

The member mentioned the Kemano II Project. It is simple.

You want to build a dam and you may kill the fish; or you may want to cut off water or put more water through to produce more aluminum and that may hurt the fish. The courts have already struggled with this in British Columbia. Just recently, Mr. Justice Berger—l cannot recall the name of the case—but on this exact problem, had to weigh the interests of the province regulating the dam, and weigh the interest of the company producing the aluminum needing the water and he had to weigh the interest that we all have in the fish. He came down in favour of the fish in that particular case.

[Page 41]

I think we are always going to have that, even after this particular amendment.

So in a sense, it may be a bit of a straw man.

I am perfectly prepared to look into that matter further, and of course, Mr. Fraser is prepared to look into Mr. McGrath’s matter on the offshore to ensure environmental control there.

However, I think it is something we really cannot get around, and to reiterate a point that it is protected in the sense that the federal government still has control over fishery in the British North America Act.

The Joint Chairman (Mr. Joyal): Thank you, Mr. Waddell.

Mr. Nystrom.

Mr. Nystrom: Thank you, Mr. Chairman.

Just a few short remarks. I want to speak against the Liberal party’s subamendment, because I think it is a negative amendment and is a major step backward compared with what we are proposing in our amendment to this Committee.

The amendment that we are proposing is that the province has the right to make laws with respect to the exploration for nonrenewable natural resources: has the right to make laws concerning the development, the conservation and management of those natural resources.

Then we get to the very key phrase for me, which is, whether or not such production is exported in whole or in part from the province.

“In whole or in part from the province” means if it is exported from province A to province B or C; it also means it is conserving and developing and development and management of resources if it is exported from province A to country A or country B or C.

The point I want to make this morning is that I think we should treat natural resources in the same way, whether they go interprovincially or internationally.

I think it is very important; it is very important to a lot of provinces—a lot of provinces: and I do not see why the government across the way is so fearful of allowing this kind of reasonable amendment to the constitution of Canada!

We are not talking here about international treaties where you are going to set the price and join OPEC and all those kinds of scare stories that Liberals like to talk about. We are talking about something here which has federal paramountcy; federal paramountcy! That federal paramountcy is there in proposed paragraph (3), whether that resource goes interprovincially or internationally.

It is beyond me. Mr. Chairman, to try and understand why the Liberal party would not accept such a reasonable part of the amendment we put before you here today.

I think that discriminates against certain provinces and against certain resources that go internationally; I think of potash, for example. and other provinces which do exporting of their natural resources to the United States and other countries of the world.

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I would just appeal to the government to reconsider their position and treat all resources the same in terms of their management, the conservation, their development—regardless of what the destination may be.

If it is a resource in Quebec that goes to Ontario, or a resource in Quebec that goes to the United States, why should the planning of that resource in Quebec be treated any differently because the destination is a foreign country, rather than a neighbouring province?

I think, Mr. Chairman, the Central Canada Potash case in Saskatchewan was a case in point—in Saskatchewan, that resource went internationally.

I want to make very sure that the province has the right to prorate, to manage, to plan, to conserve, whether or not their resource goes interprovincially or internationally.

I want to keep stressing to the government across the way that we are not talking about giving powers to the provinces that are awesome. Because we say here in proposed Section 92A(3) that nothing here derogates from the authority of Parliament to enact laws in relation to matters referred to in that proposed subsection. Where the law of Parliament and the law of the province conflicts, the law of Parliament prevails to the extent of the conflict.

In other words, Parliament can always step in and say, “No, you are wrong: you must not legislate there.”

Parliament has that protection. Canada can still speak with one voice, and as a nation in this Parliament and say what province A or province B is doing is wrong.

As we are going to be saying in this amendment, if the Liberal subamendment passes any way in regard to interprovincial trade, I pose the question: Why can we not do that in regard to international trade?

Mr. Chairman, I think in this country we need something which the NDP amendment is calling for, and that is a more flexible federalism.

We have had in Canada for a long time a few areas of jurisdiction which have been concurrent—and I can think of agriculture, which is going back as far as the olden days, where agriculture is something where the powers are shared with federal paramountcy.

Our resolution is saying the same law should apply to resources; you have a shared jurisdiction; you have concurrency, where the provinces and the federal government share a field in international and interprovincial trade; but because of the fact that it is going out of the province, you have federal paramountcy. In other areas, you have provincial paramountcy, I think that is very important.

So I want to make that appeal to the government to reconsider their position and to make sure in the constitution that the laws we are talking about prevail equally regardless of the destination of the resource.

While I have the floor, Mr. Chairman, I would like to say in response to the Conservative Party that I think that I think there is one additional new power here, which I think is very

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important, namely the power of indirect taxation going to the provinces.

Someone referred yesterday to the Cigol case. That was a case where the Supreme Court struck down a taxing regime in Saskatchewan because they ruled it to be ultra vires, because they held it to be indirect taxation.

I want to say that after an amendment of this sort, the Supreme Court will no longer be able to do that, because the province has the power clearly to levy indirect taxation as long as it does not discriminate against other parts of this country. I think that is a very important thing.

Mr. Hawkes seems to be very concerned that this might somehow violate the opportunity on the part of the company to go to court over a certain taxation regime of a province.

Well, my response to that is very simply: “no”; the companies can still go to court. They can still go to court! But what is now clear is that the province, as well as the federal government have the power to levy indirect taxation, so that in terms of jurisdiction and jurisprudence, the province would be within its legal scope to do so.

But what it does not prevent is the federal government, if it think the laws are wrong and that the provinces are doing the wrong thing, from exercising the ultimate of federal paramountcy.

I think that is right. It is a more flexible, more modern federalism; and I think this kind of philosophy which has existed in agriculture ever since the federation that will now exist here, hopefully, for international and interprovincial trade, certainly for indirect taxation, that philosophy should be extended to other areas of jurisdiction so that we have a strong federal government, but with enough power residing in the provinces, but with flexibility so that each province and each region can develop according to its character, so that we can have regional reconomies which complement the national economy, rather than the constant conflict we have in this country through balkanization.

Thank you very much.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Nystrom.

The honourable Jake Epp on 21 question.

Mr. Epp: I thank the Committee.

Mr. Chairman, I would like to ask Mr. Nystrom a question. I admit that this matter is not as clear in my mind as it appears to be in his. But if I can just lay out the case for you, Mr. Nystrom, you say that on international trade, the right of indirect taxation—you related, for example, the export of hydro from Quebec,

We have cases, for instance, of Quebec or Ontario Hydro, or in my own province. Manitoba Hydro, now working on extensive exports to the mid-west.

It was always my view that in those agreements made by an electrical utility owned by a province—in other words, a provincial Crown corporation—that you did not need the power of indirect taxation in those transactions, because the price was a negotiated one between the buyer and the seller.

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So if you placed an indirect taxation on that, that in fact it would affect the selling price.

Now, I can see where you can channel some revenue to provincial coffers away from the utility. I can see that.

But in terms of dollars at this moment, I am not convinced that in fact there would be additional revenue accruing to the province or its Crown-owned provincial utility through the power of indirect taxation on exports, for example, of hydro-electric power outside the country.

Can you give me an answer to that, because I must admit I do not have full knowledge covering that aspect of the matter.

Mr. Nystrom: I think, Mr. Chairman, it gives you a couple of important powers which do not exist under the constitution.

Now, Mr. Epp is correct in talking about price and so on. I did not refer specifically to hydro in Quebec. But what this amendment does is to give the province the right to levy indirect taxation. That is not in the existing constitution; if you look at asbestos in the province of Quebec or the very Cigol casein my own province. It gives that power.

It also gives the power—concurrent or shared power to interprovincial trade. In the case of hydro again, this may be useful in Newfoundland, with some of the conflicts that they are having in that province. Useful for that province to have some jurisdiction to move in that area.

In terms of money, I have no calculations before me for the Newfoundland situation, but my understanding is that it could provide legally more scope for the province of Newfoundland to tax the resource in terms of indirect taxation, in terms of concurrent powers and the like.

Mr. Epp: Maybe I can ask one other question of Mr. Strayer of of the Minister.

The Joint Chairman (Mr. Joyal): Yes.

Mr. Epp: Exactly in the same area, may I have the view of the department or of the Minister? I am not going to repeat the case, or try to take up the time of the Committee unnecessarily.

But I do not see any more revenue accruing—I am not arguing the indirect taxation question as a power, that there is not a right there, an increased power if you want to put it that way; but I am trying to put it into practical, on-the-street terms.

I do not see any more revenue accruing on international agreements made by provincial utilities such as electricity, for example, if in fact the indirect taxation power were granted to the provincial utility.

And if I could just make one other point, Mr. Minister, and what effect would that have on the power of the National Energy Board in terms of export hearings and hearings for export licensing? May I have an explanation for that?

Mr. Chrétien: As regards the first part, the provincial governments do not tax their Crown corporations. They control the price to their consumers; when they sell abroad, the Energy Board approves the price of export, and every dime of

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the profits is owned by the government because they own the company, and all the profits of the Crown corporation are going into the coffers of the provincial government; so they do not need to tax; because that is their own money. You do not tax your own money.

Mr. Epp: They are taxing themselves then.

Mr. Chrétien: Yes. As you say, they cannot tax themselves. That does not give them any new power, because they have all the possibilities of revenue; you cannot have more than 100 per cent of the revenue. They have 100 per cent of the revenue.

So it happens in Canada now that the electrical power is owned by the Crown—all the provincial governments; well, not in Alberta, not in P.E.I.; but that could apply in some provinces; but in my own province it is owned by the provincial government.

Of course, I can name one or two little outfits—one for the Alcan—owning its own generating capacity in the Ste. Lac, St. Jean area. There are cases like that, but not many. So they own 100 per cent and I would agree with you that when it is owned by the government, it does not give them any new power because they have 100 per cent of the revenue anyway.

Mr. Nystrom: Mr. Chairman, I feel I owe Mr. Epp a more detailed answer to the question, if I may.

In terms of Newfoundland, if one were to give them the two additional powers, we believe they could collect several hundred million dollars more because of that. They do not have the powers today. The precise example I would give you is the question of Alberta, where about 20 per cent of the gas. . .

Mr. Epp: Are you not back to interprovincial now, Mr. Nystrom?

Mr. Nystrom: A combination of both.

Mr. Epp: But you get that through your amendment. I am not talking about the interprovincial argument. I follow you there.

I do not follow you on that extra revenue on the international, because you are dealing with Crown corporations provincially-owned and they would not tax themselves.

The Joint Chairman (Mr. Joyal): Thank you very much. The honourable Senator Tremblay.

[Translation]

Senator Tremblay: I would like to ask for some clarification from Mr. Nystrom who has referred to the changes that the NDP amendment would make in the Quebec-Newfoundland relations with respect to revenue that Newfoundland would draw from exporting its electricity to Quebec.

Does Mr. Nystrom mean that, under the proposed amendment, Newfoundland would be in a position to break or eliminate the contract signed by Quebec officials, that is to say Hydro Quebec, and a representative of Newfoundland?

[Page 46]

Would that be one of the effects of the proposed amendment?

My question is addressed either to Mr. Nystrom, who has moved the amendment or to the Minister, since he is taking at position on it.

Mr. Nystrom: I will try to answer the question.

Two or three months ago, the Economic Council of Canada published a report in which it was stated that Newfoundland and Quebec might be able to get an extra $500 million a year if they had more powers than they now have.

[Text]

Now, they only have a contractual arrangement with the province of Quebec. I do not know what that contract is. But the Economic Council of Canada did state that perhaps they can collect up to an extra $500 million per year.

What we are saying in this amendment is that if you give the power of indirect taxation to the provinces, and if you give them concurrency in interprovincial trade, then perhaps they will have additional powers that will give them access to more funds. I cannot be more precise than that, I am sorry.

Senator Tremblay: I think it is important and I would like to know if the new jurisdiction of powers granted by your amendment to Newfoundland would have the consequence that Newfoundland could change unilaterally the terms of the contract that had been signed a number of years ago and which is in force for quite a few years ahead. That is a very serious question in the sense that new power would retroactively change the contract between two bodies which were competent at the time to sign that contract.

Mr. Chrétien: The contract will remain the contract. What we are confirming in this amendment, we are saying that we are confirming the power of the province in the generation of electricity and in terms of the contract, the contract will remain the contract.

The question is taxation. Indirect taxation or direct taxation, the provinces have power in taxation. We are extending a new power to all the provinces in indirect taxation. So the question, I do not know if they can or cannot decide that will give them more power to tax, I do not know if that can apply to that contract, I have no idea, because I have not seen the contract. My information is that the taxation possibilities were probably covered in the agreement.

Senator Tremblay: May I follow on that. So you do not know if it would affect in substance the price agreed by contract to do indirectly which has not been done directly and understood that the new power would not apply to substance in its effect, the price agreed by contract already signed, but it might apply to new export of electricity from Newfoundland to Quebec.

[Translation]

Mr. Chrétien: This is a many faceted problem, Mr. Tremblay.

If this amendment is passed, the provinces will be granted it new power that is called the power to indirectly tax resources.

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It is a new power. As to whether they will use it or not, it is a matter of pure speculation.

There is a contract. There is a contract between Newfoundland and Quebec. The agreement between the two provinces will not be effected by what we are doing here.

I do not know whether any of the provinces will decide to use its new taxation power. It is a matter of pure speculation.

The power to tax obviously has some effect on costs.

Senator Tremblay: On the real costs.

Mr. Chrétien: Everyone wants more power to be given to provincial governments and that is what they are getting. They have the power to tax, but that will not effect contractual obligations between Newfoundland and the Province of Quebec.

[Text]

Mr. McGrath: May I ask a supplementary question. Mr. Chairman.

The Joint Chairman (Mr. Joyal): Honourable James McGrath on a supplementary question.

Mr. McGrath: I just want to make sure that I understand the Minister correctly because when the government first announced its intention to move this amendment the Minister’s colleague in the Cabinet, Mr. Rompkey, went to Newfoundland and joined with the Leader of the Opposition in Newfoundland at a press conference in which they expressed the view that this would correct the injustice of the contract between Newfoundland and Hydro Quebec. We know of course, that that is not the case. The Minister has not confirmed that, What the Minister is saying is that the new power contained in this amendment in no way will give Newfoundland the right to tax back the excess profits that have been made by Quebec in the export of the power to New York that they are buying from us at bargain basement prices.

Mr. Chrétien: I just say that the provinces have the power to tax indirectly. I say that the term of the contract will be the same, the level of taxation has to be decided by each province, I do not know if they will use it or not use it. So one can make all sorts of speculations. I do not want to speculate. What we are giving here is the power of indirect taxation to all the provinces and it is a request that was made to us by all the provinces.

Senator Tremblay seems very worried.

Senator Tremblay: I am worried.

Mr. Chrétien: But it was asked by the Quebec government, like anybody else. So what the provinces will do with that new power. it is their problem, it is not mine,

Senator Tremblay: I really feel the need to explore a little bit more.

[Translation]

Clause 92A. section 4, last paragraph. The power of indirect taxation can be exercised whether or not such production is exported in whole or in part from the province, but such laws may not authorize or provide for taxation that differentiates between production exported to another part of Canada and production not exported from the province.

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I thought this meant that the price was covered by this restriction. In other words, if you apply this to oil, one province could not, through indirect taxation, have two prices: a low price in the province and a high price for oil exported to another province.

If you apply the same principle to electricity. the low price for electricity in Newfoundland could not, through indirect taxation, be lower than the export price.

This seems to be the meaning of this paragraph, which brings us back to the problem of contracts that are now in effect.

If existing contracts provide for a difference between the export price and the domestic price within a province, could the province, through indirect taxation, reset the export price stated in the contract and the domestic price? If this is the case, it would be an indirect way of changing the basic term of the Hydro Quebec-Newfoundland contract.

Mr. Chrétien: It is not up to me to speculate as to what Newfoundland will or will not do. We are giving the provincial governments a power that they all ask for, the power of indirect taxation in the area of resources.

That does not change contracts. It is a taxation power and there is a nondiscrimination clause to the effect that a province cannot tax other Canadians at a different rate than it taxes its own citizens. The wording is clear. If an indirect tax is to be levied, it has to apply equally to Canadians in that province and in other provinces.

That is how I see the situation and I do not want to start speculating as to what they will do or will not do. I am simply telling you what they have gained.

Senator Tremblay: One more point of clarification. I am sorry, but we are dealing with an issue that everyone knows is touchy.

If an indirect tax on electricity were levied in Newfoundland, it would have to apply equally. Or to be more specific, Newfoundland could not levy an indirect tax solely on electricity that is exported. It would have to apply within the province as well. Is that correct?

Mr. Chrétien: I understand what you are saying, Mr. Tremblay. If the Government of Newfoundland were to decide to levy an indirect tax on electricity. it would have to apply equally to electricity sold within the province and to electricity that is exported.

Senator Tremblay: I think that the point has been clarified.

[Text]

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Senator Tremblay.

Honourable Ray Hnatyshyn.

[Page 49]

Mr. Hnatyshyn: Thank you. Mr. Chairman. I just want to make some general remarks with respect to the proposed amendments and the tendency indicated in terms of these amendments. Let me say at the outset that I very much approve and support the concept of better defining or in fact making sure that ownership has a meaningful sense in terms of our constitutional and legal interpretations.

I think that we have a situation now under our existing constitution where resources are clearly owned by the provinces. Where the difficulty has come in over the course of the years, Mr. Chairman, has been that there has been a conflict with respect to the matter of taxation by and large. That is a principle area in which disputes have arisen with respect to the real meaning of ownership, and this is the case in western provinces generally, Saskatchewan and Alberta, British Columbia, the western provinces were involved in the energy resources particularly and had some serious disputes with the federal government over the years as to the paramountcy of taxation of those resources.

This has been interpreted by the provinces, that is to say the federal taxation has been interpreted by the provinces as being an attack and assault on the very essence of ownership by the provinces.

So I want to enter, at this point in time, while I support the initiative and the idea that we want to somehow reassure the provinces with respect to the rights of ownership, I want to put it in very simple terms, a caveat that I have that we may willy-nilly be proceeding with these amendments to the detriment of the concept of ownership of the provinces and I want to give my reasoning on this basis.

I go back and think of some of the disputes that have arisen between the federal and provincial governments over the years, and you will recall that a very large area of dispute was with respect to the federal government taxation initiative prohibiting, in effect, the deduction of royalties paid to provincial governments on resources, which put many companies involved in resource production into an untenable position. So the situation arose whereby a combination of federal and provincial taxes, there was either a very nominal or sometimes a negative return to people involved in the exploration and development of resources in the province,

So one has to ask oneself, if you look at what is being proposed here just in the simple common sense point of view, if someone tells you or me that we are the owners, and we have that position in law, that we are the owners of a resource whether or not that generally accepted view now, and developed in the common and civil law with respect to the rights of ownership, may in fact in the years ahead, be limited by the courts in interpreting the present proposed amendment to the constitution where ownership is specifically defined. I refer to the fact that now ownership means the right to explore, right to develop, right to manage your resources; and I just simply leave it to your own common sense as to whether or not a court in interpreting this. might not have the avenue open down the way of limiting to those specific areas the right the provinces have over their resources.

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Now, in terms of indirect taxation, I think that is a fair and reasonable amendment because one of the problems has been that a tax is a tax and whether you do it directly or indirectly, to the average citizen it does not really make any difference, but it does have legal implications. That was one of the problems that arose in the Saskatchewan case, the CIGOL case, and there were essentially two reasons why the Supreme Court of Canada ruled that the taxes imposed by the province of Saskatchewan in that particular instance, were ultra vires of the province, were not within their jurisdiction. One was, because it was deemed by the court to be an indirect tax. So on that exclusion the provinces had with respect to taxation, the courts said on that technicality, “The tax is invalid”.

The second point was that it was a question of whether or not this affected interprovincial trade because there was an element here with respect to the export of, across the provincial boundary of the province of Saskatchewan, and the court then said this is a matter within federal jurisdiction and therefore, it is also on that basis, ultra vires. That was the consensus of opinion in that case.

I do not think that we should thereby consider that because now we are proposing or purporting to change the wording in the constitutional provision in which there is going to be the right of the provinces to be consulted in interprovincial trade and the right to impose indirect taxation, that that is going to be the solution of the problem; because this section is quite clear and the law is quite clear that down the road, as Mr. Nystrom himself has pointed out, as one of his main points with respect to people who are concerned that the provinces are going to have unusual powers over resources, Mr. Nystrom made a very telling statement in his presentation. He said well, no one should really worry, because it says in the Clause that if there is any conflict or if the people of Canada themselves want to take a different direction with respect to the interpretation of ownership that is taken by each of the provinces, Parliament may merely pass a law and that law will prevail.

I think that is important for us to remember when we are talking about these amendments, the most important consideration is this, provinces may have an indirect right of taxation that may bring them in $500 million or $10 zillion. As soon as the federal government decides to take the position that those taxes collected by the provinces are not to be deductible by the companies involved, or the taxpayer involved, for computation of the federal tax, no matter what the intention is of this clause, my concern is that the federal government law will prevail if that is what the clause says and that is what the law says and I suggest to you that there is a concern we should have a look at and address ourselves to with respect to the whole question of whether or not we are moving ahead.

As I say, I raise this as a serious concern that I have with respect to the implications of what we are doing with respect to this clause.

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I go back to my original premise. Ownership in law and according to everyone in Canada’s general understanding of the meaning or definition of that right, means pretty well universal control over a particular commodity.

We know we have a federal state here, we know we have a balance of power that we are faced with from time to time, and I do not want to in any way have people going away from the table here suggesting that this is going to necessarily resolve the whole question of the conflict between the federal and provincial jurisdiction and the rights of ownership.

The second point that I wanted to raise in relation to this matter is that we do have the other reality that when we have these circumstances arising, the provincial governments have in a number of instances reshaped their taxes, have imposed higher royalties, have reacted in ways in which they were going to get the kind of return on their resources in face of what has been a federal taxation regime imposed on the resource.

They have also gone to the device of creating Crown corporations. That is another device that provincial governments have used to get paramountcy over a particular resource, and that is a growing tendency amongst the provinces even in such conservative provinces as Alberta. We have seen the development of the Crown corporation, provincial ownership concept with respect to Crown lands and production on those lands and a board which will control the production on a conservation basis of the resources in those provinces.

I think Mr. Nystrom talks about progressive conservatives and I am glad to report to this Committee that beyond dispute every Conservative I know is progressive.

The Joint Chairman (Senator Hays): Order. Order.

Mr. Hnatyshyn: It is question of fact but I am not sure that is to germane to this argument.

What I am saying is that we look at the reality today of the federal government’s financial position, we look at what has happened with the federal government imposing a tax at the wellhead in terms of energy resources now, which is a tax which they have imposed which goes right to the wellhead and which is taken off before any of the provinces taxes come forward.

I do not think we can be oblivious to the reality, as I see it, that this is not going to, this amendment is not in any way, I suggest to you, going to resolve the question once and for all and somehow make the provinces have total control over the whole question of ownership of resources within their own provincial boundaries.

I simply wanted to put that caveat in, sympathising as I do with the fact that provincial ownership should mean something; and I am very sympathetic, coming from Saskatchewan, a province that has gone through a long period of time when the economy has been under severe strain, where the people have suffered great deprivations, where we are now in the process of gradually developing the resource base, it is a very

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important issue for us in the Province of Saskatchewan particularly.

So I sympathize as a Saskatchewan member with the idea of giving real meaning to the ownership of resources in my province as I think every province and resident of each province should have.

However, I wanted to make these remarks to say that while the proposals here may be palliative, that I am going to suggest to you that there may be down the road a real questioning as to whether or not they expand rights within the province; secondly, in terms of the taxation matters whether or not the provinces are gaining with respect to this amendment.

Mr. Nystrom: Mr. Chairman, just on a point of order if I may, I have a hunch that maybe Mr. Hnatyshyn misunderstood something that I said before and just so the record is not distorted I would like to correct it if I have an opportunity.

He was concerned about federal paramountcy and, Ray, if you look at proposed Section 92A(3) federal paramountcy refers only to things that are in proposed Section 92A(2), which is export from the province and production and prices and supplies. It does not refer to the right to explore, manage, conserve and develop.

None of those are touched by federal paramountcy so I wanted to make that point.

The other point, Mr. Chairman, is Clause 6 and I will just read it very carefully, members may not have noticed it. It says:

Nothing in proposed subsections (1) to (5) derogates from any powers or rights that a legislature or government of a province had immediately before the coming into force of this clause.

And the reason for that being tacked on was just to make sure that nothing here would derogate in case there is a conflict in the courts or some fine legal argument that a brilliant lawyer like Mr. Hnatyshyn could pick up and turn into a precedent.

So I just wanted to make that very, very clear, that there is no derogation whatsoever and paramountcy only refers to proposed Section 92A(2) and I would just ask people to re-read proposed Section 92A(2), it is production and so on, it is not conservation and development and management.

Thank you very much.

The Joint Chairman (Senator Hays): Thank you, Mr. Nystrom.

Mr. Hnatyshyn: I am glad, Mr. Chairman, that Mr. Nystrom asked me that question because I appreciate his elucidation, I take it it was in the nature of a question.

I think the points that I made were, and I appreciate the clarification that Mr. Nystrom offered; what I am saying is that in this particular amendment there is a suggestion that either by virtue of the right of indirect taxation, which I think

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 is a nuisance matter and which I can understand you want to obliviate all these artificial distinctions between direct and indirect taxation because I think the province should have the right to tax their resources, but the fact of the matter is there is a question here in our federal system with respect to the ability of the federal government to impose its own taxation system and its own rules with respect to taxation which, regardless of how much money they take, a province collects by way of indirect taxation, the federal government wants to move in and take a larger part of the resource revenues, this provision will in no way impede that particular ability on the part of the federal government.

Secondly, my experience has been with respect to judicial interpretation of constitutional and legislative provisions, the courts tend to look at these articular provisions and if there is any precision within the context of a provision they will come to the conclusion generally speaking that the specific provisions supersede the general concepts.

So all I am saying, again, is a caveat, simply when we look at this particular provision, the court is asked to adjudicate upon the meaning and powers involved in ownership as a general concept as opposed to saying that ownership means a, b and c; the tendency of the courts has been to make their definition and conclusion on the basis of the mere specific definition of a concept.

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Ray Hnatyshyn.

Honourable Senator Roblin.

Senator Roblin: Thank you, Mr. Chairman,

I think that, along with some other members, i am having a hard time making my way through the thicket because we are dealing with a measure which is or may be no more than cosmetic in some respects, but I suggest will be a subject of much review in the courts of this land if we pass it. Certainly it puzzles me about the meaning of some of things in this measure and I want first of all I suppose to make a comment about indirect taxation, because the idea that indirect taxation is something the provinces would like to have is not a new one. In fact, I can recall an occasion when it was offered to the provinces and they decided not to accept it, and they decided not to accept it for the very good reason that the tax collector is a pretty ingenious, fellow and if he cannot catch you through an indirect tax, he darn well finds another tax with another name that he can tax you through.

And when the Province of Saskatchewan ran up against this barrier in the courts with respect to indirect taxation, they were pretty ingenious people and they found another way to raise the same money from the same people under another title.

So it seems to me that when we are dealing with indirect taxation here we are thinking about the Province of Saskatchewan, there is a legal maxim told me by a lawyer of a friend of mine, I have some friends who are lawyers . . .

An hon. Member: Shame, shame.

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Senator Roblin: Who said that hard cases make bad law, and I am not altogether sure whether that observation applies to what we are doing here but I think there is at least a suspicion of it. But it seems to me that this idea of indirect taxation for the provinces is such a big thing, perhaps is more in the imagination than in reality, because if you want to tax something, particularly a natural resource in the provincial arena as it stands now, tax collectors have always been sufficiently imaginative to find ways in which that money can be clawed into the treasury without breaching the constitutional proprieties and I suspect that comment applies to what we see here.

However, supposing it does not, supposing it is something more than that. We are told that the Province of Alberta now can raise $797 million more money through an indirect tax on natural resources. Hip hip hurrah. I wonder where the Province of Prince Edward Islands stands if it has an 8 per cent indirect tax on its natural resources. Or if I want to come closer to home, the Province of Manitoba. It is not going to be able to raise sums of that sort. And it seems to me that if you really are concerned about indirect taxation, apart from the particularly hard case of Saskatchewan before the Supreme Court, why are you limiting it to natural resources? If it is a right that the provinces ought to have, then surely it should be a right across the board. I see no reason why that should not be the case.

I am not advocating, I do not think the provinces need indirect taxation, I think they can raise the money they need through the present constitutional system as it is now; but when I see it here and I am told that the Province of Alberta can get in a lot more money this way, frankly I do not believe it because if they want the money, they can get it now through the measures that are at their disposal. There is not a question in the world, not a shadow of doubt in my mind that that is the case, that if they want $797 million more from their natural resources, they do not have to go to an indirect tax to get it and neither does any other province.

So it seems to me that this is just a point which is of less value than perhaps some might believe.

Well, that is a personal opinion and other people may differ, but where I want to sort of come a little closer to an interest of mine is in the provisions that relate to the generation and production of electrical energy, because in some kind of a way we seem to be merging the generation and production of electrical energy with a non-renewable natural resource. It is clearly linked in some respects in here and there is a reason for that, because a good deal of energy is raised by non-renewable natural resources, namely coal.

In the Province of Alberta, for example, we find that the bulk of the power is produced through burning of coal, and if the Province of Nova Scotia continues with the policy that it has set forth on it will be producing a lot of electrical energy from coal, so I can see there is a connection there,

However, there is another important source of electric power and that is water.

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Now, where does water come into this scheme of things? I would like some legal explanation, if I can have one, as to how electric power, in both of its characteristics, either as coal derived or water derived, fits into this thing or whether it fits in at all. Because, it seems to me that if you have provided for the management, what are the words we use here, the management, development conservation and management of the sites and facilities in a province for the generation and production of electrical energy, you are talking both about hydro plants and about coal plants.

What are the implications for those words of development, conservation and management with respect to people who are using the same water in the same river for a multitude of purposes, including the development of hydro electric power?

Now, it may be that there is nothing to talk about here, I do not know, but it occurs to me that it is a matter that I would like clarified because if by the management of a power plant on the Winnipeg River in the Province of Ontario one can affect the management and the production of power from other plants on the Winnipeg River in the Province of Manitoba, as is perfectly true and actually done today, what does that mean in constitutional terms?

The Province of Ontario has the constitutional right under this, not just as an arrangement between the two hydro systems which is a perfectly natural thing, but the constitutional right to affect the production of power in Manitoba because they are using the same water and the same river but they happen to be upstream in the Province of Ontario. It bothers me. I would like to know how we get around that conundrum.

I do not know what practical implications it has but when you are passing a constitution that is going to last for a long time, you had better be sure that you understand what the practical implications are. Maybe there is something to be considered with respect to the use of the water in the Province of Newfoundland and Labrador as it flows through their province to downstream facilities, if some should ever—well, I am sorry, I have got that, I retract that argument because the river runs the other way, it cannot be done so I leave that out of my consideration; but it is a bother to me.

On the same line of reasoning one could wonder about the watershed of the Nelson River. Now, the Winnipeg River that I mentioned first is in place, we know what goes on there, there are power plants on both sides of the boundary, the power plant operation in Ontario affects what goes on in the Manitoba power plant directly. There is a more remote argument in the same line to be made with the water that runs down the Nelson River and into the Hudson Bay, so those are problems that do bother me.

Now, if I could pose another question on this same area of hydro electric production as it is affected by what I call the non-discrimination clause in here. There is a clause in here which, if I read it correctly, says that if a province is operating its resource, and I think it is proposed subsection (4)(b), its hydro electric resource, it has to be careful that it does not put in a system of taxation that differentiates between users in the

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province and users outside the province. That is the way I take it.

However, that is exactly what we do in Manitoba today. We use the power of the legislature to the raising of money in respect of the sites facilities in the province and the generation of electrical energy and the production therefrom, these are the words of the statute. We do right now raise money in respect of the production of electricity to provide a special price for the citizens of Manitoba.

Now, we would not care, I suppose, to use the provincial taxing revenue to lower the price for people outside Manitoba. I would suggest that that was unlikely, and yet we are in the process of making deals with people in other provinces of Canada, we already have one with the Province of Ontario and the Province of Saskatchewan today in which that situation applies, that we use the provincial taxing power to change the price for Manitoba citizens and that same concession is not extended to the power that we sell to people in the Province of Ontario or the Province of Saskatchewan.

Now, if this act came into force could we still do that? That is a pretty important question and I certainly, doubts are certainly raised in my mind that we might be debarred from doing that kind of thing if this particular legislation comes into effect.

So I have those principal concerns on my mind and perhaps they could be dealt with in due course.

I offer another couple of observations, gratuitous, I admit, with respect to the theory of ownership and the powers of development and concern and management. They are all very well but in practical terms we are leaving out one of the essential controlling factors in the development of a natural resource and that is taxation, and just so long as not only the provincial government but the federal government are free to impose taxes which under the constitution they are, and I am not proposing that that be changed, but to introduce an element of realism into this discussion I can say that if they use those powers in an ill-advised manner they can certainly control on the federal side, in conjunction with provincial tax levies, the production of these natural resources and we see that going on in Saskatchewan today. We see that in southern Saskatchewan where we have a number of wells that are either of small capacity or are concerned with the production of heavy oils and things like that, but a large number of those, and I believe this is a correct statement, but a large number of those have closed down since the new national energy policy came into effect. Why? Because the combined taxation of the two governments makes them uneconomic to keep going.

So if anyone thinks that we are dealing with the whole problem of ownership. development. conservation and management in this way, of course we are not. And I suppose nobody pretends that we are.

But I merely say to the Committee that these difficulties remain completely untouched by what we are doing here now,

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and it makes me feel that the main thrust of the amendment we have before us is more cosmetic than it is practical.

One can only hope it will do some good. But one cannot assert with any confidence that it is going to do very much good.

The Joint Chairman (Mr. Joyal): Thank you very much, Senator Roblin.

Senator Roblin: May I just ask the law officers of the Crown to tell me what they think about the points i made in respect of the nondiscrimination clause and the control of interprovincial electrical power rivers.

Mr. Strayer: If I may first be permitted to make one slight personal observation, I was very impressed by Senator Robin’s first argument about the need or lack of need for this change to indirect taxation with respect to revenues from resources; because earlier in discussions I made a number of similar arguments myself to the provinces, and in that context it was described as federal bureaucratic arrogance.

Senator Roblin: I am in a position to give you full absolution on that point.

Mr. Strayer: However, provinces like Saskatchewan and others have said they ought to have a freer range of technics for imposing taxes and that is why they felt they needed this change,

Senator Roblin: What we do need is some better method of reconciling and adjusting the taxation policies of the 11 jurisdictions of Canada.

If this body was addressing itself to making some recommendations—I go no farther than recommendations—as to how we could assimilate and harmonize the tax regimes we have in Canada, not only in respect of natural resources but in respect of whatever methods we can devise to stimulate the economy and to keep jobs going and to keep the country developing. That I would be glad to talk about.

Mr. Strayer: On the point raised by Senator Roblin about the effect of proposed Section 92A(1)(c), the paragraph dealing with development, conservation and management of electrical generation facilities, what the effect would be in relation to water management and the use of bodies of water.

It was our view that this did not and should not really change things very much, if at all; that in fact now the provinces have jurisdiction under Section 92(10), the power over local works; they have jurisdiction under Section 92(13) with respect to property and civil rights and under other heads of jurisdiction—Section 92(5) dealing with management and the sale of public lands, whereby they can clearly establish and develop sites and facilities for electrical generation.

There is, of course, a problem as to how that activity relates to the use of the water and the effects on the flow of water as a result of the development of these generation facilities.

In our view, you still have here at present. as you will in future, a kind of meeting place between heads of exclusive provincial jurisdiction and heads of exclusive federal jurisdiction.

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The federal jurisdiction remains with respect to navigation and shipping, with respect to fisheries, peace, order and good government.

We know there is—and has been for a long time—a certain amount of uncertainty as to how to relate these areas of federal jurisdiction and of provincial jurisdiction. To the extent that there is uncertainty it probably continues. But I do not think the situation is prejudiced in any way by this amendment.

Senator Roblin: I ask the learned counsel if he has ever tried navigating on the Winnipeg River to see how far your federal power will take you there?

Mr. Strayer: Well, sir, if the problem exists now, I do not think it is going to be aggravated by the amendment that is being proposed.

Senator Roblin: That is the point. I think you can absolutely give no assurances that what you are saying is correct. You say you do not think it can be aggravated. We will see!

Mr. Strayer: Well, of course, Mr. Chairman whenever you make any change in the constitution, it is possible to argue that it will do something you do not expect. But after careful analysis that was our conclusion.

The other point was as to the effect of the nondiscrimination clause. I think that might be best left for initial comment to the movers of a main amendment, because they might be able to expand on what the intent of the provinces were with respect to the proposal that is incorporated in proposed subsection (2).

Senator Roblin: With great respect, I am not interested in the intent. The world is full of good intentions and we know where they lead.

I am asking you your opinion, sir, as a law officer of the Crown, as to what you think the legal meaning of it is, having to do with the pricing of electrical power which is being exported within the domestic jurisdiction of a province.

Mr. Epp: Mr. Chairman, on a point of order.

The Joint Chairman (Mr. Joyal): The honourable Jake Epp.

Mr. Epp: My colleague, Mr. Fraser, has raised some very serious doubts about the effect of the Broadbent proposal. Senator Roblin has as well regarding the whole area of fisheries.

I know, Mr. Chairman, you are labouring under a rule that all amendments were to be put on the table by 9:30 yesterday morning.

That puts us into extreme difficulty if these problems are in fact valid and we have still to do more checking over the luncheon hour whether they are in fact valid.

If you interpret your ruling so tightly that as these problems develop the party does not have ability to amend relative to the discussion, that would make very difficult procedures for all members of the Committee.

I am asking you, Mr. Chairman, if you could give us an explanation of the ruling as you interpret it, as to whether or

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not it is valid, in view of the fact that we only saw the Broadbent amendment at 6 o’clock last night—nine hours after we had any ability to amend, and there was an embargo by the NDP that we could not see the amendment.

As you will recall, I raised two points of order yesterday asking for the amendment—it was well after the amendments were to be filed: I would like a ruling before we break for lunch from you, Mr. Chairman, on the question of whether or not we still have the ability to move amendments in areas which have come to light in the questioning on a proposal that we had absolutely no ability to amend in View of the deadlines imposed?

The Joint Chairman (Mr. Joyal): Mr. Nystrom, on the same point of order.

Mr. Nystrom: I would like to hear what Mr. Austin’s response is to this; but I would like to encourage you, Mr. Chairman, to be flexible.

I think the questioning of Mr, Fraser covered an area we should take a serious look at. I have not yet made up my mind whether or not it is necessary or should be inserted.

But I would like to take a look at it over the dinner hour. and if indeed we conclude it should go in, we should at least have the flexibility of considering an amendment.

We have run this Committee in a pretty flexible way, and I would urge you that we do so in this case as well.

The Joint Chairman (Mr. Joyal): The honourable Senator Austin.

Senator Austin: I have no objections to amendments which may be proposed within the context of the amendments that are before us and the principles of those amendments, Mr. Chairman.

The Joint Chairman (Mr. Joyal): I see there is consent around the table that after the luncheon break, if needed the honourable John Fraser will so move an amendment and if needed the Chair would be allowed to accept it.

The honourable Jake Epp.

Mr. Epp: I would like to thank my colleagues around the table for their willingness to work in that manner.

I wish to indicate to members that we have not yet made a final determination whether or not the amendment should be moved. We will need the lunch hour to do that, Mr. Chairman.

The Joint Chairman (Mr. Joyal): In relation generally to the amendments that have been tabled with the Clerk and the Chair, I should say on behalf of the honourable Senator Hays that the Chair will certainly allow any honourable members around the table to amend an amendment that has been tabled if so needed, because of previous decisions of this Committee on one section or the other or another part of the proposed resolution.

I think in all fairness we have to be consistent with what we have voted. The Chair does not have any difficulty with that at all.

If there is a need to change something which is new and is not a matter of mere concordance or mere logic with what this

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Committee has accepted, then of course the Chair will seek the consent of honourable members around the table.

But as I have interpreted the co-operation around this table, for such technical questions there has never been any opposition on either side of the Committee, and this Committee and the Chair are grateful to honourable members for such co-operation.

The honourable Senator Austin.

Senator Austin: Mr. Chairman, on the point raised by Mr. Epp, it being close to our lunch hour, I would have, if I had been recognized, commented that I thought Mr. Fraser’s point was taken care of by the “notwithstanding” clause in Section 91. What we have before us is an amendment to Section 92, which is subject to the general powers and the “notwithstanding” clause in Section 91.

Mr. Fraser made an excellent contribution this morning, as did Mr. Waddell, with respect to the fisheries question.

I have some things to say about it after lunch. But I would ask Mr. Epp and his colleagues, including Mr. Fraser, to take a look at that particular juxtaposition of powers and to see whether an amendment is required. I tend to think not, but I do not want to close my mind on it either.

The Joint Chairman (Mr. Joyal): The honourable the Minister of Justice.

Mr. Chrétien: I would just like to invite Mr. Epp to take into account a legal problem that that type of amendment could create in relation to the other powers of the federal government, that when you start to enumerate some it could create a major problem for the other powers of the federal government.

In this area it has never been completely clear anyway, so it will probably remain the same.

But we will look at any other amendments; it has been discussed internally and we have seen a lot of dangers if we were to enumerate the powers—problems for the rest of the powers of the federal administration.

The Joint Chairman (Mr. Joyal): Thank you very much.

I look at the clock and I see it is not the time to adjourn yet, and I still have the honourable Senator Austin to conclude on the proposed government amendment. I understand the honourable John Fraser wants to raise a question at this point.

Mr. Fraser: Mr. Chairman, what I would like to make clear to everybody is that over the noon hour we may have been able to decide definitely on this amendment.

As a consequence we should be able to tell you as soon as we reconvene whether or not we will have the amendment. If at that time Senator Austin wishes to comment on the amendment I do not think we need to take up a great deal of the time of the Committee.

But I think it is an amendment which addresses a very grave problem. I do not know what the feeling of other members of the Committee is at the moment; but I do not wish to go on further now, and I will call it 12:30 pm.

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The Joint Chairman (Mr. Joyal): With the consent of honourable members, it being 12:30 pm. this meeting is adjourned until 3:30 this afternoon.

[Translation]

The meeting is adjourned until 3:30 this afternoon.

[Text]

AFTERNOON SITTING

The Joint Chairman (Mr. Joyal): Order, please.

May I invite the honourable members to take their seats so we can resume consideration of a proposed amendment to Clause 51, the proposed resolution.

I would like to remind honourable members that when we adjourned for lunch, we were to expect from honourable John Fraser more advice on the opportunity to receive at this point another subamendment to the main amendment or to the proposal as put through by Mr. Broadbent on behalf of the NDP.

At this point I would like, before I invite honourable members to come back on the proposed subamendment, the one introduced by Mr. Corbin, I would like to ask the honourable John Fraser if he has more to say at this point on the proposed subamendment that he was speaking about this morning.

Honourable John Fraser.

Mr. Fraser: Mr. Chairman, I wonder if I could catch the attention of my friend Mr. Waddell.

An hon. Member: Just do not go skating with him.

Mr. Fraser: Someone is on thin ice anyway, Mr. Chairman. I guess it was inevitable we would get to that.

I had a discussion with Mr. Waddell over the noon hour. It is not likely to strain relations between this country or any other country, but I think it is the disposition of the New Democratic Party not to incorporate my suggested amendment into their amendment.

At the appropriate time, Mr. Chairman. I would move the amendment, notwithstanding that. I know my friend Senator Austin wishes to speak to it, and I am in your hands.

By the way, I should say, Mr. Chairman, I think it is typed now and is probably just about ready for distribution. It is a very short amendment and I do not think that we are having a very great deal of trouble with it.

The Joint Chairman (Mr. Joyal): The Chair has received your amendment and in the context of the over-all proposal, the main one that we are discussing, there is no doubt that it is receivable. In relation to the order and where your subamendment should be put, I would suggest that it should be called after we have dealt with the subamendment as introduced by the government.

So, what I would suggest honourable members to do, would be to invite honourable Senator Austin to conclude on the subamendment as so moved on behalf of the government party, and then, of course, we would proceed with the vote and

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after that I would call you and you might have an opportunity to move your subamendment, and debate would be opened on your subamendment. After we have dealt with your subamendment, I would call the honourable James McGrath’s amendment and we would deal with the subamendment as introduced by Mr. McGrath, then come back on the main amendment as put through on behalf of the NDP Party. In that respect, it will be very easy to go on, so I would like to invite honourable Senator Austin to conclude on the proposed subamendment as so moved on behalf of the government party.

Senator Austin.

Senator Austin: Thank you, Mr. Chairman. I think I will begin by fortifying myself with a sip of Old Veto.

Mr. Chairman, I will begin I think where I left off, commenting on the discussion that took place in this Committee led by Mr. Fraser and responded to by Mr. Waddell, with respect to concerns affecting in particular, the British Columbia fishing interests, fishing industry, and questions of conservation and protection of our ecological system against undue use by commercial interests. This is a long standing problem with competing uses in the province of British Columbia and I do not think it evokes any partisanship at this particular table. I think that Mr. Fraser, Mr. Waddell and I agree amongst the three of us that the need to ensure a fair balance in their competing uses of our resources in British Columbia and particularly the preservation of our fisheries, is a matter of very high priority indeed.

The issue that Mr. Fraser has put before us is whether in any way the Broadbent amendment which is being placed before this Committee last evening could have a deleterious effect on the constitutional power of the federal government to control the fisheries interests in British Columbia. I mentioned just before the lunch hour that I believe that the amendment which Mr. Broadbent has before us now is always subject to the notwithstanding clause in Section 91 which in effect, I will not read it, but in effect it says that notwithstanding any of the provisions of Section 92, and this is an amendment, the Broadbent amendment is an amendment to Section 92, the specific heads of power of the federal government under Section 91 which I say includes fisheries, will prevail. Therefore, in my view, Mr. Chairman, any further amendments placed in Section 92 would be unnecessary. I am prepared to look at Mr. Fraser’s amendments but I do not think an amendment in the context of Section 92 would really be effective.

Just before the end of our morning session, the Minister also intervened and made the remark that he would be concerned that if there were a special reservation in Section 92 for one particular concern, there might be a difficulty in statutory interpretation with respect to other things that are not made the subject of a special amendment and that too concerns me, as a lawyer. Mr. Fraser, who is also a lawyer, may differ on that point but at least that is where I come down at the moment.

With respect to Mr. Hnatyshyn’s remarks of this morning, I would like to comment. He described ownership and he spoke I think quite well, about the concept of ownership. He said

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“ownership means unusual control over a particular commodity”.

Mr. Hnatyshyn: Usual control.

Senator Austin: You mean “ownership means usual control over a particular commodity”.

The point I wanted to make with respect to your argument this morning, Mr. Hnatyshyn, and I think you would concede this, that ownership in any sense that we know it is not an unlimited right to do whatever you wish on your property. In municipal law, for example, the fact that I own a property does not entitle me to make a nuisance of the use of that property to my neighbors. It must be consistent with the interests of the community as a whole.

In the context of the ownership of resources, that ownership must be consistent with the needs and uses and interests of the community as a whole, and if you accept that, then that is the end of my comment on what you said this morning except to say that I do believe that the governments policies with respect to the energy program are in that sense consistent with a rational view of the provinces’ ownership entitlement.

With respect to the Broadbent amendment, I have a concern that has not been raised in the Committee and it is one which makes my brow furrow, but I must admit at the same time that I have overcome my hesitancy. It is proposed Section 92A(1)(b)

Including laws in relation to the rate of primary production therefrom;

We are talking about the development, conservation and management of nonrenewable and natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom;

I believe that that is a real concession to provincial power. I believe that is a concession that has not been so unbiguously made clear in the past. It is a concession that is added to the right of the provinces now, if this amendment becomes law, to participate in indirect taxation and thirdly, to regulate interprovincial trade under the paramountcy of the federal Parliament.

Frankly, the primary sector in this country plays such a large part in the health of our economy that the rate of development, the rate of private sector production, the rate on which we could bring our energy resources, for example, into the Canadian economy in order to ensure that there are no security of supply gaps, can be very seriously affected by the activities of a province.

The unwillingness of a province to use normal commercial standards, for example, to employ development of its resources, can leave Canada with scarcities and shortages and that can be very costly to the rest of the nation.

So I would say to you that in allowing this particular control to the provinces in proposed Section 92A(1) we are certainly as a national Parliament recognizing the transfer of an important power and, as far as I am concerned, expecting the

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provinces to act in a completely national sense in the discharge of the power that we may now confer upon them. It is perfectly possible, and my ultimate fear is that a rather wealthy province with surplus cash could find it to its disadvantage to bring on more cash flow, more streams of wealth, and decide to retard the rate of industrial development or resource development in order not to be flooded with cash that is hard to place in the market, a situation quite analogous to some of the Arab oil countries at this particular time.

It may be very much in the interests of the province to do that and yet not in the national interest to do it; and I would hope and I am sure all members of this Committee expect that provincial governments and provincial legislatures will bear this power with an enormous sensititivy to their responsibilities to the rest of the country.

That is the clause that most concerns me, but I am not going to press for its change in view of the arrangements that are in place and in view of my great support for the package as a whole.

I want to talk for a moment about the international trade issue which Mr. Broadbent discussed last night and which Mr. Nystrom discussed with us this morning. Mr. Broadbent’s position, and Mr. Nystrom’s not surprisingly was quite close to it, was to the effect that this additional power which they are recommending, the extension of a provincial jurisdiction into the regulation of international trade, is really a concomitant of provincial resource development. It is a logical progression of that development and I suppose in a form of logic it is, but there is a much stronger logic and a much stronger national interest in my view and that is that Canada speak in all matters of international trade, in all economic matters of international policy and international relations generally, with one voice; and as I pleaded for provincial flexibility a moment ago with respect to proposed Section 92A(1)(b), I would also say that I fully expect by the same test that any federal government would be sensitive not to stifle the legitimate interests of a province with respect to its resources in the international field and to encourage them; and I believe that has been the pattern of federal governments for many years, of whatever political stripe.

However, it is important that the safeguards of the residual power in terms of international trade remain with the national government.

Mr. Chairman, I want to speak for a few moments about Western Canada. I want to talk about my part of the country and I want to explain to the rest of Canada my view and I believe the view of many western Canadians of the problems that we are now dealing with in terms of tensions between Western Canada and other parts of Canada.

Western Canada’s image of itself, of its opportunities to play a responsible and effective role in a strong Canadian confederation depends very much on its ability to utilize its patrimony; not just its resources, which are a part of its patrimony, but the very essence of its nature, its wellbeing, to grow by the development of those resources and by the de-

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velopment of the resourcefulness of Western Canadians to be strong on their own bottom, be strong in themselves, and therefore to be strong for Canada. So much of that current aspiration in Western Canada is based on an effective economic utilization of the resource base of Western Canada and I believe for that reason that the amendment proposed by the NDP here with the subamendment proposed by the government, ought to be accepted. The NDP amendment is truly sensitive to this deeply held feeling in Western Canada that resource development should also not only be under the general national jurisdiction of the federal government, but should also in a more managerial sense, he in the control of the provinces for the wellbeing of the people of those provinces.

I would like to give you a short Western Canadian history, and I promise it will be short, but it is deeply impressed in the subject matter that is before us now.

Sir John A. MacDonald, when he was in opposition, rose in the House of Commons on March 7, 1978—I am sorry, did I say “1978”, 1878 and proposed the adoption of a national policy for Canada.

Mr. Epp: He lives forever.

Senator Austin: He is still here, as is Mackenzie King. When the Conservatives were returned to power that national policy for Canada became the cornerstone of their policy endeavours and it had a profound effect on the West. That national policy included the imposition of a protective tariff to encourage manufacturing activity but its real dimensions were much broader. It foresaw the colonization of the prairies and the extension of trade by massive transportation undertakings, Atlantic to Pacific.

Further that national policy incorporated the view that the western hinterland would provide the raw resources to nurture the industrial centre and serve an expanding market to break the stagnation then being experienced in Ontario and Quebec. To put it bluntly, and Sir John A. MacDonald was always blunt, he said and I quote:

The Dominion had purchased the West and was entitled to the profits of its exploitation.

The national policy was carried forward with a drive to populate the west. That drive was a spectacular success. Between 1895 and 1930, 5 million immigrants settled in the west. They came from all parts of the world, stamping on the west an indelible multicultural character and that settlement of the prairies, as I have said, was a vital objective of the national policy. The way in which it was pursued is one of the most important antecedents of western alienation, because many of those settlers were attracted by what I would call flagrant advertising about the opportunities in Canada.

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They were told what a rosy country it would be and how easy it would be to make their way in Western Canada, and hundreds of thousands found to their dismay, that it was a hard life, a difficult life. My own family was a part of that pioneer movement and I can speak from stories of grandfathers and fathers. Many left Canada after a very short stay and went to the United States. More than 2 million of those original settlers left us after a very short stay.

Mr. Chairman, I want to speak still about the antecedents in Western Canada, because they are important to what is happening now. They are important to this amendment; they are important to what is being done by this Joint Committee. I want to tell you that the first self-government in Western Canada was not won through rational negotiation. It was won against the wishes of Central Canada, and I am talking about, in result, the Manitoba Act of 1870; I am talking about the Riel rebellion; I am talking about that colonial attitude that was expressed by Sir John A. MacDonald. It was not limited only to the Conservative Party of that day, I have to acknowledge that out of fairness. That province originally was accorded a second class status in the Legislation. It was characterized by the retention of its Crown Lands:

For the purposes of the Dominion

And it was a struggle for that province of Manitoba to be received as an equal juridically in Canada.

The same was true of Alberta and Saskatchewan, and I do not think that people here understand just what bitterness existed between 1905, when Alberta and Saskatchewan became provinces, and 1930 when the Privy Council finally recognized the entitlement of Alberta and Saskatchewan to control their resources like those other provinces.

Well, the answer to the question is: it had two parents; it had the government that initiated the reference, a Liberal government; and the government that changed the legislation, a Conservative government. However, it was not until 1930 that Section 109 of the British North America Act, the control of resources, was extended to all the prairie provinces, and even then there was a sting because the right to control free hold land was not transferred to the provinces.

And I want to talk about the terms of British Columbia’s entry into Confederation, because lotus land was hardly happy for many, many years over the lack of completion by the federal government of the day of its promise with respect to transportation in the extension of the railway, and British Columbia for many years, and even to this day, has been nervous about its association with central Canada. And I would like to express again the continuing attitude of Central Canada through some words of Sir John A. MacDonald who is quoted as having confessed in private correspondence to a senior British Cabinet Minister that . . .

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An hon. Member: Order.

An hon. Member: Careful.

Mr. Epp: Has this been clearly by Mr. Waddell?

Senator Austin: I will tell you, you cannot stop me and I want you to listen, particularly you westerners who are interrupting me, I want you to listen to this, MacDonald says:

We have as much interest in British Columbia as in Australia and no more.

In light of this history, members of the Committee, I think it is hardly surprising that political affinities in the west are imbued with a strong sense of rebelliousness and independence.

Now, Mr. Chairman, I want to come up current history. I will not involve you in a long story about what took place in the intervening period, but I want to say that I participated in and thought very, very important the western economic opportunities conference in Calgary, WEOC as it is known, which took place at Mount Royal College. It was a sincere attempt, in my view, by the federal government to address itself to the problems of western Canada and I believe that the federal process has retained its sensitivity and that that sensitivity is, inter alia, a part of the resolution the government is prepared to accept today.

And I would recommend to those of you who really care about the subject a review of Premier Bennett’s forward to the report of the western Premiers’ task force on constitutional trends. This is 1977, it is a fascinating portrayal of the colonial role assigned at the West by Central Canadian policies.

I would remind you also that Premier Blakeney came to this Committee and made some very interesting points about the western regional identity. He talked about the dependence of the provincial economies on their natural resources and he said:

Resources represent our best hope of providing long term economic stability and diversity, of ironing out the booms and busts in our economy.

He talked about a critical dependence on transportation and he talked about a deep rooted dissatisfaction that the federal government seemed empowered to legislate without providing the West with an accountable or meaningful vehicle for its views.

On that last score, of course, I believe, and I have spoken here before about the need to ensure that check and balance by reform of the Senate, and by change in the proportion of Senators in that particular Chamber, and I assure you Old Veto would be long gone by the time we get to that particular question. And I have Senator’s Roblin’s assurance that that is the case as well.

I want to talk to you very briefly about the tyranny of the majority which is an image in Western Canada, and I want to quote, I think an exceptionally good description of it which appears in a report written by Ralph Hedlin Associates entitled Western Canada in Confederation. And he says:

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Whether any or all of these concerns are rooted in fact is not really the point. The hard reality is that a significant proportion of the people in Western Canada feel they have never had equality with the large central provinces. They do not trust the politicians and officials in Ottawa. They do not think the eastern politicans care about the welfare of the West but concentrate their interest and attention on pleasing the people of the constituencies in Ontario and Quebec.

Well, those are perceptions. I share Mr. Hedlin’s view that there is much more in the perception than there is in the reality. I think it is vital that the federal process adjusts itself to these legitimate concerns in Western Canada, and I believe absolutely that the Prime Minister, the Minister of Justice by his performance here, have shown that degree of sensitivity in the government of today and I am an enthusiastic supporter of their approach to Western Canadian issues.

I believe, in conclusion, Mr. Chairman, that the amendment by the New Democratic Party, taken with the subamendment placed here before the government is a solid advance on behalf of western Canadian interests and will do much to alleviate the economic concerns regarding the mangement of resources by Western Canadians in Western Canada. We have yet in stage 2 of the constitution to address the concerns about the tyranny of the majority, to address the concerns which will allow western Canadians to believe that in the federal process, in the market place of issues and ideas, which is our national Parliament, they, too, can have some of the levers in the game.

Thank you, Mr. Chairman.

The Joint Chairman (Mr. Joyal): I will certainly keep the name of the honourable members who want to speak, honourable Jake Epp, honourable Senator Roblin, honourable John Fraser, but at this point the Chair has informed honourable members that it was supposed to be the concluding intervention on the government’s amendment to the proposed motion as put through on behalf of the New Democratic Party and I understand that there are at least three other amendments that should be dealt with.

The second amendment that will be so moved by honourable John Fraser, another amendment that has been moved on behalf of honourable James McGrath, and there is of course the main amendment as moved by Mr. Broadbent on behalf of the New Democratic Party.

What I would intend to do is to keep the names of those honourable members but at this point, at least dispose of one amendment so that we can open the debate for the amendment of Mr. Fraser, because at this point the Chair has at least three amendments on the table and I understand there has been reference to another amendment, the amendment that honourable John Fraser has in mind at this point, and I think it would not be appropriate to open the debate on four amendments at the same time.

So if honourable members agree, the Chair will call the vote on the government amendment, dispose of that amendment and after that invite the honourable John Fraser to move his amendment.

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Honourable Jake Epp.

Mr. Epp: Mr. Chairman. that is acceptable to us but we would like to have the opportunity just to place the parties position on the record in very brief words regarding the government amendment.

I will hold my concluding comments, Mr. Chairman. and my reply to Senator Austin at the time you are ready to complete Mr. McGrath’s amendment, I will hold it until then but I do think if we are going to vote on amendment G-44.1 it is important for me just to put on a view, Mr. Chairman, regarding the matter of whether or not the provinces should have the right to indirect taxation and international trade, that aspect of the Broadbent amendment would be removed by the government amendment, and namely that the government amendment would restrict the indirect taxation on interprovincial trade.

I want to say on behalf of our party that we are in agreement with the government’s position, and the reason is simple.

Our party has for years. Mr. Chairman, been stating that there has to be a different relationship between the federal government and the provinces. I intend to speak a little longer on that matter, in fact, in reply to Senator Austin regarding exactly that position, but it is our strong opinion that the central government must also have the tools whereby it can function on the national level, and also on the international level.

That being the case, Mr. Chairman, even though I think when one would look at the discussion of today that one might even argue that it was neutral, the clause might be neutral to a degree, I do «believe that the very inclusion of a capacity in international trade on the part of the provinces derogates and negates the federal balance, at least in perception if not in actual fact, and I think around the table many of us would have some difficulties if it does not state so in actual fact; but in perception I would have no doubt that it would do just that, namely that the provinces now would have a foot in the door, so to speak, at least in the larger concept of international relations and I believe that has to be a national perspective, it has to be done by a national government, by a central government rather than the provinces.

It is for those very limited reasons, Mr. Chairman, that we cannot support the amendment that we will support the government amendment and obviously change the thrust of the New Democratic Party Clause.

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Jake Epp.

Mr. Nystrom, on that very point, of course.

Mr. Nystrom: I spoke a bit earlier this morning on just how important international trade is to a number of provinces. We have had the important central Canada Potash case in Saskatchewan and we are not asking here for something which is going to interfere with international treaties or anything of that nature at all, we are just talking about international trade

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as far as it pertains to a province developing that industry at home in the province.

I do not want to repeat any of those arguments, Mr. Chairman, but I would like to have a recorded vote on this if we could.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Nystrom.

Subamendment agreed to: yeas, 21; nays, 2.

The Joint Chairman (Mr. Joyal): So I would like to invite the honourable John Fraser, but before I do I would like just to draw the attention of the honourable members to the following.

The Chair has listened carefully to all the interventions around this table and has allowed all honourable members to put forward their views on a very comprehensive basis; but at this point I think that the Chair will invite all honourable members from all sides of the table to try and keep their intervention on the very content of the proposed amendment and I think that all honourable members have been very co-operative this morning to give all the time needed for each speaker to put forward his views and I think at this point the Chair would like to remind honourable members we have adopted the procedure to make our work easier and I think that at this point it is the responsibility of the Chair to draw the attention of all honourable members to that very point.

So I would like to invite the honourable John Fraser to move the amendment that he is intending to.

Mr. Fraser: Mr. Chairman, I understand the amendment is ready for distribution.

The Joint Chairman (Mr. Joyal): Yes, the Chair has made sure that your amendment has been translated and been printed so that our clerks will circulate to all honourable members a copy of your proposed amendment.

Mr. Fraser: With your permission. Mr. Chairman, I will proceed.

I am going to read the amendment.

I move that the amendment be amended by adding to proposed Section 92A(1) the following new paragraph:

(d) Nothing in Section 92A derogates from the powers of the Parliament of Canada relating to fisheries, navigation and shipping.

(d) Rien dans l’article 92A ne doit être interprété comme constituant une derogation aux pouvoirs du Parlement du Canada relatif aux pécheries, à la navigation et au transport maritime.

Now, Mr. Chairman and colleagues, I spoke at length about this matter this morning and I do not want to repeat my entire intervention, and honourable members have had the benefit of hearing Senator Austin comment a few minutes ago, but basically this is what it is about:

In the main amendment, the New Democratic Party amendment, when you look carefully at what it is doing relative to the generation and production of electrical energy, the effect of the amendment is to say this, it is to say that in each

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province the legislatures may legislate exclusively with respect to the development, conservation and management of hydro electric sites and dams. Now, that is the effect of it.

Now, my concern, Mr. Chairman, you said words either mean something or they do not, and so far as I have been able to tell from the debate so far, nobody has told me, no one in their intervention has indicated with respect to the part of this section that I am referring to, whether this is really a new power that is being given to the provinces or whether the provinces already have it and it is only a statement of a power that the province already has; but if it is a new power, if it is a greater, broader power, then it had to-come from somewhere.

Certainly when you keep in mind the fact that under the British North America Act there are two levels of power, if it is coming from somewhere, it is coming from the, it could be coming from the federal power, and to put it explicitly, Mr. Chairman, I am concerned that if It is not made clear that this exclusive power to make laws respecting the development, conservation and management of hydro electric power, which means in British Columbia clams on our great rivers, if it is not made clear that that does not derogate from the proper power of the federal government under Section 91, under fisheries and navigation and shipping, that we may be limiting that power and we may very well be in a position where in the years to come, as the pressure builds up in British Columbia to put more dams on more rivers, that there will be a court that is going to have to be looking at this wording and saying: what do those words mean? They have got to mean something.

And Senator Austin has, I think very correctly, put the other side of the argument, that is that if you put too much down you create confusion as to what powers are not affected in other parts of the constitution. That is a legitimate comment.

However, it is also very much a lawyers’ comment, and it is a lawyer’s comment because the lawyers have to deal with the statute, they have to deal with the words; but against that proposition, against the possibility of some difficulty being created is at least this, that if you make it clear what we are doing in this amendment by spelling out the fact that you are not taking away from the federal government its fisheries and navigation and shipping powers, then you are not going to have a problem years from now or a few years from now, which is much more likely, of having to take this case through the court to find out whether or not that power, which I think is so imperative to the protection of the fishery in British Columbia, has been diminished.

Now, I think that makes the point and I think that the other side of that argument was put forward quite lucidly by my friend, Senator Austin, and I say that you have to balance the two arguments given the reality of British Columbia, given the fact that if it was not for the federal power under fisheries I have no doubt that we would have a major dam on the Fraser River; I have no doubt that Alcan’s projected additional works would be well under way; and I have no doubt that there would be no stopping certain people who look to power alone and who, unlike my friend Senator Austin, do not understand that

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there has to be a balance but who focus on one thing only and that is power, and often on forecasted power that is wildly inaccurate, and stemming from a philosophy not of conservation but just of finding more and more power, no matter how badly we misuse the power we develop.

I would urge honourable members to realize that it is relatively easy now to ensure the continuation of that federal power, and as a Westerner, a British Columbian, and as one who has been quick to defend provincial interests, as my friend Mr. Austin did in his eloquent address a few minutes ago, I have also always defended the necessity of the federal power to be strong in the places where it ought to be strong.

Now, I do not think I need add anything further to what I have already said, except to finish on this note: this is not an academic discussion we are having. This is against the backdrop of events which are taking place in my province which are bound to put pressure on the fisheries.

Because that fishery is a Canadian resource and does not just belong to British Columbia by any means and is to be shared by the whole nation, I ask honourable members to give very serious consideration to allowing this amendment to go through; because if it goes through, then the highly paid lawyers who act for the interests that want to put more and more dams on our rivers will at least have one less argument to use. They have no trouble getting many arguments on their own; but I would regret it if we handed them one.

I would just point out that it was only some months ago when Alcan absolutely refused to accept a fisheries order to put enough water in the Natchako River safely bring the salmon in for spawning.

They lost that case in the lower court and it has not gone any further.

But if anyone thinks that this is an argument just in an academic sense, please do not be taken in by that error; because the argument I am putting forward here is against the backdrop of constant pressure against our fisheries.

Thank you.

The Joint Chairman (Mr. Joyal): Thank you very much, the honourable John Fraser.

The honourable the Minister of Justice, followed by Mr. Waddell.

Mr. Chrétien: Mr. Chairman, I do not intend to be long on that, but I think I have to state what is the position of the government on this proposed amendment.

First of all, I think the amendment is not necessary; that the power referred to in Mr. Fraser’s amendment is clearly the power of the federal government in relation to fisheries, navigation and shipping.

If you were to single out three powers like that in Section 91 and put in a different clause, there is a great danger that the court will put these three powers in a different category than

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the other federal power under Section 91 and seek a legal interpretation as to why it is we have done it.

In Section 91 it is clear that fisheries, navigation and shipping fall within the federal power.

We are satisfied that the amendment proposed Section 92A(1) will not affect those powers.

So, we think it is not needed, and it is dangerous; we are satisfied that the proposed Section 92A(1) as proposed in the amendment of Mr. Broadbent and the NDP, and which was the amendment I proposed to the provinces myself during the summer, gives adequate protection to these three powers that Mr. Fraser would like to protect. I would like to compliment him, because his preoccupation is very much along the lines of mine; and I am glad to see that he can be numbered among those who do not feel that all the virtues are to devolve absolutely to the provinces without any check.

His argument is well taken when the states that we should not make any move which would jeopardize the necessary federal power in those fields. But we do not need this amendment to ensure that.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Minister.

Mr. Waddell.

Mr. Waddell: Thank you, Mr. Chairman.

This is a tough one, Mr. Chairman. I will try to be as objective as possible in dealing with it, considering that it is basically an amendment to our motion.

I say this to Mr. Fraser, that this is going to be a bit convoluted, but I will try my best.

The reason we do not have any dams on the Fraser River is basically, I think, that our people in British Columbia will not permit that. No matter what the laws are—the laws certainly help conservationists to a great extent, but I think that is the real reason, and not what is said in this amendment or in our motion.

I agree with the Minister to this extent, and only to this extent, that it is not necessary—the phrase you have introduced—in the sense, it is a bit academic, that fisheries navigation and shipping are covered in Section 91.

The Minister then says, “Well, if you single out these three particular areas by putting in Mr. Fraser’s amendment, then that puts a special emphasis on these three matters and it hurts the other matters in Section 9t and is therefore a danger,” if I understand his argument.

I see the argument, but only to a limited extent. It seems to me it is a kind of bureaucratic argument. I cannot completely accept that argument.

So, I have to look at Mr. Fraser’s suggestion; and he said, basically-wand I would perhaps make a little stronger argument than the one he has made—if you look at the context of the amendment, the context of the resolution, proposed Section 92A(1) states that in each province a legislature may exclu-

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sively make laws in relation to development, conservation and management of sites and facilities in the province for the generation and production of electrical energy. So, there is an argument to be made, it seems to me, Mr. Chairman, that that is a rather special context in the sense that that is dealing with the electrical facilities. There is a problem with dams; that if we err, let us err on the side of protecting the dams.

We have spoken of the great love we all have—the three of us here from British Columbia—for British Columbia, and therefore we are coming down on the side of accepting Mr. Fraser’s amendment and throwing in that additional protection.

It may mean nothing. I personally think that it probably does not; but it may mean something, and, therefore, objectively we are going to vote in favour of his amendment.

Some hon. Members: Hear, hear!

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Waddell.

Mr. Munro.

Mr. Munro: Mr. Chairman, thank you.

I would like to speak in support of the proposed amendment to the amendment, and to ask the Minister if he can reconcile for me, at any rate, the use of the word ”exclusively” at the beginning of the NDP amendment, and his suggestion that there is a federal paramountcy with respect to fishing, navigation and shipping.

Surely, that is just going to be fodder for lawyers to argue the use of “exclusively” in one place and paramountcy in another.

I, myself, feel it is absolutely unnecessary to have the addition that has been put in by Mr. Fraser in order to make it abundantly clear that there is a paramountcy for the federal authority where there could be a conflict.

“Exclusive” and “paramountcy” are so close—and they would be close in this context—that there could be litigation lasting years, Will the Minister care to comment?

Mr. Chrétien: I would just like to repeat that Section 9l is clear, and that fisheries, navigation and shipping come under federal jurisdiction. I see no need for saying that Section 92(2) does not affect those that are very clear; I do think that it just could create problems, because what about the other powers that you have in Section 91? Are we to put them in a special category? Section 91 is federal power. There is no difficulty. There is no difficulty in interpreting what “fisheries” means. There is no difficulty in interpreting what “navigation” or what “shipping” means.

So we do not think that we should do what is suggested to be on the side of the angels. It is clear.

We know it is clear, and the matter is complicated enough, and my responsibility, as Minister of Justice of Canada, is to make sure that when it is clear it will remain clear and not to create any doubts.

An hon. Member: You are the judge!

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Mr. Chrétien: On the technical grounds, perhaps I could ask Mr. Strayer to give you some explanation on the relationships between Sections 91 and proposed Section 92A.

Mr. Strayer: Mr. Chairman, if I might say a word on this, this was carefully discussed at many meetings with the provinces.

The place in the constitution at which any resources amendment ought to be put was carefully considered. The amendment as drafted here puts these provisions in proposed 92A(1) in the same position, we believe, as other things which are in Section 92 of the constitution.

The matters referred to in proposed 92A(1), as Mr. Munro points out, are described as exclusive powers of the provincial legislatures just as the matters in Section 92 are now described as exclusive powers of the provinces.

There is a well recognized relationship between the exclusive powers of parliament in Section 91 and the exclusive powers of the legislature in Section 92.

Part of that relationship is that where there is a law which is valid under Section 91, a federal law, and there is a provincial law which is valid under Section 92 and those two laws conflict in some way, the federal law prevails. That is the more common application of the concept of paramountcy.

Now, it is our belief that that relationship which has existed between Sections 91 and 92 will also exist between Section 91 and proposed Section 92A(1). That means any laws made under Section 91, if they come into conflict with the powers under proposed Section 92A(1) will prevail over those provincial laws made under proposed Section 92A(1) to the extent that there is a conflict.

One of the problems of putting in a special rule, as is proposed in the subamendment with respect to protecting the federal power over fisheries, navigation and shipping, is that there are other powers in Section 91 which, I am sure, members of the Committee would also want to protect; for example, the criminal law power. I am sure Mr. Waddell would want to protect the criminal law power, for example, with respect to dealing with pollution.

I am sure that members of the Committee would want to protect the power of parliament with respect to Indians, so that Parliament in legislating for Indians and lands reserved for Indians could, if necessary, legislate in a way which might be in conflict with some provincial law over the management of resources.

Again, there is the federal power with respect to peace, order and good government, which is used for water management or has a potential for use for water management and the management of water quality.

These are all matters which are within Section 91 which we believe enjoy a paramountcy vis-à-vis Section 92 and would enjoy a similar paramountcy vis-à-vis proposed Section 92A(1).

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If one started to put in a special rule that only certain things in Section 91 should enjoy that paramountcy, it would, with the greatest respect to the suggestion that this is only a bureaucratic notion, create the possibility of a court saying, “Well since you have made a special rule for fisheries and navigation, the implication must be that other things, such as the criminal law and laws with respect to Indians are not to be paramount over laws passed under proposed Section 92A(1).”

Mr. Hnatyshyn: Mr. Chairman, on a point of order.

The Joint Chairman (Mr. Joyal): The honourable Ray Hnatyshyn on a point of order.

Mr. Hnatyshyn: Mr. Chairman, I have listened with great interest to Mr. Strayer’s dissertation. It just occurred to me, in case anybody doubts my credentials on this Committee, that I bought his constitutional law notes in second year law. I just wanted to put that on record in case anybody questions my ability to analyze his answer.

An hon. Member: Did you pass?

An hon. Member: How many years, Ray?

The Joint Chairman (Mr. Joyal): I see honourable members are ready for the question.

A recorded vote is requested.

Subamendment negatived: yeas, 9; nays, 14.

The Joint Chairman (Mr. Joyal): I would like to invite honourable members to take the subamendment as moved on behalf of the honourable James McGrath and on that subamendment I would like to invite the honourable Jake Epp.

Mr. Epp: Mr. Chairman, I would like to ask whether you have a number of speakers yet on the main motion?

The Joint Chairman (Mr. Joyal): Not on the main motion, no. We are dealing with the subamendment.

Mr. Epp: Why I ask is this. Is it your preference that I just respond to the subamendment now and hold the summation for the main motion?

The Joint Chairman (Mr. Joyal): Well, I have the honourable Senator Roblin and the honourable Ray Hnatyshyn.

Mr. Epp: That being the case, Mr. Chairman, I will only direct my remarks to Mr. McGrath’s amendment.

May I speak to the amendment, then?

The Joint Chairman (Mr. Joyal): Yes.

Mr. Epp: Mr. Chairman, I would like just to sum up for the amendment moved by the honourable James McGrath and to indicate to members that the reason I am doing it is that Mr. McGrath could not be present today; he had to leave for Montreal to attend the funeral of his father-in-law, otherwise he would be here to give the concluding remarks on his amendment and indicate his strong support for it.

Mr. Chairman, the off-shore question has been one that has not only been dealt with in this country in a manner in which the power over resources should be dealt with, but it has gone even further into long discussions and international conferences known as the law of the sea.

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The matter we are dealing with, while related only in the Canadian context, is nevertheless a very complicated matter; and just as many of us feel that northern Canada will be the area of Canada’s future and a breakthrough not only in development but in methods which to this day have not been discovered, but that there will be very rapid development, so, also, many of us believe the sea and the seabed will also find development and rapid growth such as most of us cannot realize today.

Mr. Chairman, the essence of the motion moved by Mr. McGrath is that the Maritime provinces—Atlantic Canada— should have the same rights for growth as that given to the other provinces.

At the time the boundaries of the other provinces were extended, for example, such as in 1912, that was not possible for Atlantic Canada and the only area of growth for Atlantic Canada that is left now is the seabed, the sea and the seabed.

Mr. Chairman, it has been stated a number of times during the summer months by the Premiers from Atlantic Canada that what they were asking for was not a special deal, they were not asking for a handout, but they were asking for what they believed to be rightfully theirs, and also what they where asking for was the right, the economic right to become have areas, move away from the have-not provinces that so beset many of the residents of Atlantic Canada and that, as they would get the development that they now saw possible, that they would be able to not ask of the rest of Canada for equalization payments but rather be contributors too in terms of equalization payments to the Canadian whole.

That is the basic argument of the offshore question.

Mr. Chairman, I fully admit that this question has not been adequately debated either with the Federal Government or the provinces but I do know that through our method and our suggestion and the motions that we have moved, namely that after passage in this Committee that this matter would be referred back to the Premiers for final debate and discussion is one which protects, I believe, not only members of this Committee but also the integrity of the message that we have proposed in the past.

Mr. Chairman, I just want to conclude with one statement which appeared as an editorial in the Halifax Chronicle Herald on October 4, and I quote:

The Maritime claim of today is fair and simple. It asks that it be compensated for earlier oversight. It seeks formal acceptance from other partners in Confederation of the right of the Maritimes to consider as theirs that undersea land which is a natural extension of the property above sea level.

It adds that

The resources in that new territory be the property of the Maritime Provinces in the same sense that resources in formal federal lands now belong to the Central and Western provinces.

Mr. Chairman, those words. I believe, are self-explanatory.

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I notice a number of members on the Liberal side sitting with us today who come from Atlantic Canada. I am sure this amendment will also find acceptance from them.

Thank you.

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Jake Epp.

Honourable Senator Roblin.

Senator Roblin: Mr. Chairman, I did not intend to ask for permission to speak on this matter; I would like to be called when the next witness is disposed of.

The Joint Chairman (Mr. Joyal): Thank you very much.

Honourable Ray Hnatyshyn.

Mr. Hnatyshyn: I am in the same position as Senator Roblin. I had wanted to speak on the general proposition.

The Joint Chairman (Mr. Joyal): So I understand that I have honourable Senator Petten who would like to ask a question.

Honourable Senator Petten.

Senator Petten: Thank you, Mr. Chairman.

No, I do not want to ask a question, What I would like to put on the record is the reason I will be voting against this amendment.

While I do not disagree with many of the items in the amendment and I agree with and share the same aspirations that my fellow Newfoundlanders have for our province, what I disagree with is the methods used to obtain these ends, the inflexibility; and I say to both parties, federal and provincial, let us sit down and reason together and I am sure we can come to a satisfactory solution, for the benefit of all.

The Joint Chairman (Mr. Joyal): Thank you very much. Mr. Nystrom.

Mr. Nystrom: Just very briefly, I want to make the position of our party very clear on the offshore.

We believe that the offshore resources should be treated the same as the onshore resources and, for that reason, we support the amendment by Mr. McGrath. There are perhaps some discrepancies in the writing of this amendment with the amendment that we moved, but if the government is inclined to make a move on the offshore, then I would be willing to stand it for a while while they clear up some of the discrepancies between the two approaches.

I believe that they should be treating them both the same. It is very important that the coastal provinces have some claims of the offshore. In the case of Newfoundland in particular, we have heard that articulated now for quite a while, and I feel that in the constitutional package it is best to have as much of a regional balance as possible.

It is an issue that has to be addressed; it is an important issue to the coastal provinces. I just want to make it very clear that our party thinks that the federal government should be moving on it, it should move on it at this time and, if they do

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not like Mr. McGrath’s amendment, let us table it for a while, take a look at it and see if we can come up with something that is acceptable; if not, we will vote for Mr. McGrath’s amendment as it is and if it is voted down then I would hope, Mr. Chairman, that this would be one of the items that would be on the agenda for round two as soon as possible; it is very, very important.

The Joint Chairman (Mr. Joyal): Thank you, Mr. Nystrom. Mr. Munro, followed by monsieur Maurice Dionne.

Mr. Munro.

Mr. Munro: Thank you, Mr. Chairman.

I am entering this debate because of the notion, the concept of the entry of Newfoundland into Canada.

My recollection of the occurrence is that two minutes before the entry into Canada, there was a reversion to an earlier status by the then colony; three minutes, it was an administered area; two minutes before the proclamation it returned to dominion status and entered Canada as a full-fledged dominion bringing with it powers and the appurtenances, and territory that would now, had it remained a dominion, be claimed by Newfoundland as a 200 hundred mile limit or beyond, under the provisions of the Law of the Sea, which is in the process of being negotiated at the present time.

Therefore, it was not just from low water or high water that the dominion became a province. The dominion brought with it the plate on which it rests, its continental shelf, if you like. That is what entered Canada at that time. That is what is being claimed by Newfoundland, quite a different status from any other province or territory entering the dominion of Canada.

So, I submit that the claims that are being made, aside from the fact that there is this desire not to remain forever with the begging bowl or at the receiving end of equalization payments but to be able to stand along with the other “have” provinces, as they have come to be called, and share their resources with the rest of Canada. That is what motivates the urge of Newfoundlanders today. Their historical claim to it, I think. is indisputable; and that is the principle that underlies the amendment proposed by Mr. McGrath.

In addition to the plate on which Newfoundland rests, there are, of course, the other resources that are mentioned in the first part of proposed Section 92A(2) concerning the production of energy from the water’s currents and tides. These are also part, within reach from the shore, these too entered the Dominion of Canada when one dominion agreed. through a referendum, to pass in its lot with another dominion, and I think that in all fairness to that dominion which forswore its status as a dominion to become a province, we should recognize that and vote for this amendment.

Thank you, Mr. Chairman.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Munro.

Monsieur Maurice Dionne.

Mr. Dionne: Thank you, Mr. Chairman.

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If I may go back briefly to the remarks of Senator Austin, a little while ago he quoted Sir John A. MacDonald as having said something to the effect that the dominion bought the West and he could have added “and sold the East”.

I want to remark briefly on this amendment because I want to know, for instance, where are the lines to be drawn? What share of the resources of the sea, the nonrenewable resources of the sea are going to be allotted to each of the four Atlantic provinces, and to Quebec?

The case of Newfoundland may or may not be different than the case of the other four provinces that border the Atlantic. That I think is a question that should be resolved by the Supreme Court of Canada. It is important I think here to note that the Government of Canada and the governments of the three Maritime provinces had at one point come to an agreement on the sharing of the offshore resources. Newfoundland did not agree to that at that time but I believe such an agreement is possible, and should be worked out.

I remind members of this Committee that the shores of all the Atlantic provinces and part of Quebec are washed by the same tides and again I ask, where do we draw the line?

Are New Brunswick and Prince Edward Island for instance, to be relegated to perpetual poverty from the lack of their access to these offshore resources? I do not think you will find very many people in New Brunswick or Prince Edward Island, if they look at the map of the Atlantic region, who will support such an amendment as this, and neither shall I.

The Joint Chairman (Mr. Joyal): Thank you very much, Mr. Dionne. The Chair understands that honourable members are ready for the question and I understand there will be a recorded vote on the proposed subamendment, so I would like to invite honourable members who favour the proposed subamendment to answer the call of the Clerk of the Senate and of the House of Commons.

Amendment negatived: yeas, 9; nays, 13.

The Joint Chairman (Mr. Joyal): I would like to invite honourable members to come back on the main amendment as amended, and on that amendment I would like to invite honourable Senator Roblin followed by honourable Ray Hnatyshyn.

Senator Roblin: Mr. Chairman, I want to make a statement on western alienation and then ask a couple of questions in connection with the motion because I note that one of our colleagues around the table addressed himself to this problem, and while perhaps it would not ordinarily be appropriate to continue the discussion because it is not strictly germane to the details before us perhaps I might be allowed to make some comment on what was said because basically I think it was a worthwhile endeavour on the part of my colleague to try and state according to his lights some of the problems that are connected with the concept of western alienation.

I have said elsewhere that I am not so much afraid of separation as I am afraid of alienation. Separation is sudden death. Alienation is a wasting disease; it is an agony, that is right; it is a wasting disease and it is an agony. It deserves

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ventilation and I am glad that the matter was raised because it was a sincere effort. I am convinced, to express to the Canadian community something of the Western feeling.

I want to deal with it as gently as I can because I feel that it was not exactly consistent with the facts that the whole of this problem should be hung around the neck of Sir John A. MacDonald. I do not think that that was the intent to hang it around Sir John A. MacDonald’s neck. After all, he has been dead 90 years now, and the quotations that were collected from his multifarious writings and comments that extended over a long and active life are even older; and it would be unfortunate if the impression was left that because this Canadian statesman I00 years ago said certain things and bore a certain political label that on that account seine inheritance has been left to those who also belong to that party in this day and age.

I suppose that was not meant but I have to confess that I am perhaps a little sensitive about it.

I think it would be well to carry the analysis a little further in point of time and history because as I have said Sir John has been dead and buried these 90 years and more, and the quotations attributed to him belong to a period when western Canada was not the kind of place that it is today. They belong to a time when western Canada was an empty and deserted land and there was no man’s hand to touch it to bring it to life and fruitfulness the way that it has been brought to its present state as part of our Canadian nation today. It certainly is not unreasonable to think that opinions would change even in the mind of Sir John if he were alive in this day and generation.

It would perhaps have been useful to come down a little closer to our time and skip over the progressives and the social creditors and other protest movements that have had their place in attempting to ventilate western opinion in the Canadian political comedy and remember John Diefenbaker, because if there was any man that made all Canadians, and I think I may say this, all Canadians to feel themselves within the charmed circle of our national community, he was that man. I say as a westerner who had some experience during those days that he made most western Canadians feel that they too belonged within the charmed circle of Canadian unity. So there has been a time in the recent history of our country when western alienation was not the problem that it is today and that western Canadians felt they belonged in a sense which obviously they do not feel at this moment.

I am not going to attempt any exercise here of allocating responsibility or blame in the situation that has developed over these years, but in candor I am compelled to say to this Chamber and to this Committee that if they are concerned about western alienation today, and I know they are, that they have to have reference to what we are doing in this day and generation in the Canadian political arena.

I am sad to say that the consequences of our activities, if we produce an amending formula that has a veto that appears to continue the control of central Canada in our national affairs and when it sets up differences between provinces of the nature that we discussed here many times and which I do not wish to

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exacerbate or enlarge upon, I warn the Committee that that presents a problem.

And I say also that if we consider another aspect of our current affairs, namely the national energy policy, that raises similar questions in connection with the feelings of Western Canada. Not that I am willing to discard the whole of the national energy policy out of hand because I am far from doing that, there are many goals in that policy which I can hardly subscribe to, but it is a sad fact that in wide areas of opinion in western Canada this is construed as being unfair. and will add to our problems of alienation.

In fact, a quotation from Mr. Ralph Hedlin, who my humble friend, Senator Austin, and I know very well, was made in the context of a lengthy examination of western alienation as related to the national energy program itself, which indicates the seriousness of the problem, that we are dealing with.

Now, I do not want to exacerbate the problem, I am not at the moment interested in attaching fault or blame to anybody, I am not criticizing Senator Austin’s statement because I believe he initiated a very worthwhile line of thought around this Committee, but candor compels me to say the things that I have said because I believe that they are part of the problem that we face today and we would be deceiving ourselves if we were to refrain from giving these considerations the weight which they are due.

I am convinced that we have by no means exhausted our capacity” for reasonable compromise and understanding in this country. I am convinced that we have by no means come to the end of the road whereby we can get together the people of Canada in the way that we should; but let us take heed of the warning signs we see, let us not press on regardless of the danger signals that are flying; let us instead decide that we are going to reexamine our position and do what we can as members of this Parliament to restore the fabric of unity and of co-operation and good feeling in our nation, and if we can do that then perhaps we will have enjoyed our moment in history.

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Senator Roblin.

Honourable Ray Hnatyshyn.

Mr. Hnatyshyn: Thank you, Mr. Chairman.

I want to congratulate Senator Roblin on a very articulate and very accurate assessment of some of the fears and aprehensions that I think are felt in Western Canada today, but he said it so well that I do not want to do anything except to congratulate him and to say amen from my point of view

I was interested as well that Senator Austin would quote Ralph Hedlin and Associates in approbation, that is a surprising development, but I will leave that for people who read his publications as to what he says about the Liberal government. I take it that that was a limited approbation and not general approval of what Ralph Hedlin suggests is wrong with our country, otherwise Senator Austin would be replaced as the spokesman for the Liberal party forthwith and without debate.

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I just want to address myself as well to clarify, if I could, the point I was making earlier today with respect to the ownership concept and I know that Senator Austin was pointing out something that is self evident, that ownership in modern society does have restrictions and limitations on it and I take no issue with him on that particular point, but I start off on the basic conceptual proposition that ownership does involve unfettered control and direction and authority over property, and the concept is there in the conceptual way that there is an unfettered ability to deal with, whether it be a resource or commodity or whatever the item of ownership is, and surely what we are now looking at, though, is the question of, not of whether or not there are limitations on ownership because there are and any legislature is supreme in terms of the legislation as within its own authority, but clearly we are looking at the balance of authority over the ownership of resources under this particular resolution.

The point that I was making is that either from a point of view of the legal or judicial interpretation of the provisions that we are now considering, my caveat and my concern that these particular provisions may in fact have a different result than we all hope they will have in terms of enhancing the ability of provinces to deal properly with the ownership of their resources within their own jurisdiction.

I wanted to, though, deal with and ask the Minister now, since we are dealing with this particular amendment, I have been asking him for a couple of days now questions in the House of Commons with respect to just how far he is going to go on this resource amendment and I just want to pursue that with him if I might, Mr. Chairman.

The Minister will recall that I have asked questions relating to negotiations that have been carried on with the province of Saskatchewan over a period of time, but more particularly over the course of the last two weeks, and the reason that I am interested is, and I think we in the Committee are anxious to know exactly whether the statement of the Minister with respect to the support for this amendment is his final word. This is the basis upon which I direct my question to the Minister.

I know he can give me the answer that: well, there have been ongoing negotiations and discussions; but I think the moment of truth has arrived now for this Committee because we have got to consider whether we are going to support this amendment, and particularly whether this is the final word as far as the federal government is concerned on the resource amendments.

So I want to ask the Minister, because the Attorney General of the Province of Saskatchewan has had a press conference this morning, he has indicated a number of things: one, that there were proposals and discussions on the table which were made by the federal government through officials, these were communicated and an official of the federal government attended with the Attorney General in Hawaii to speak to Premier Blakeney, and his assessment was that there were propositions put forward which, while they indicated a move-

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ment towards the position Saskatchewan has taken, were not sufficient to meet their objections.

So I think it is only fair that the Minister now tell us, and I should preface my question on this basis, he has answered us before that the Province of Saskatchewan knows full well what the position of the federal government is and they can in effect take it or leave it, but in view of the statement of the Attorney General can the Minister tell us what proposition was put forward to the province of Saskatchewan with respect to the resource amendment; and, is that offer still available to the province of Saskatchewan and does it differ from the amendment that is now being placed before us?

Mr. Chrétien: The question that you asked is basically is it a final draft and it is the final draft and when it is voted it is going to be the final offer; it is agreed upon that this amendment as it exists after the subamendments have been voted upon, this is the one that the government has accepted and it is the one that has been agreed upon by Mr. Broadbent and ourselves and it is the one that I had offered to the provinces early this summer.

Mr. Hnatyshyn: Mr. Chairman, then I want to ask the Minister, I take it as a categorical answer that there will be no more extension of the offer, in other words there will not be any amended version of this particular proposition put to the province of Saskatchewan before the resolution is finally dealt with by the House of Commons?

Mr. Chrétien: Definitely.

Mr. Hnatyshyn: I want to then deal with, because it is a total question of whether or not the provincial New Democratic Party in Saskatchewan is opposed to this package, but there is a related issue. I know it is not completely germane to this particular provision but it is related because the two things are put together as items that Premier Blakeney told us in the Committee, items that would have to be satisfied on before they would give support to the constitutional package, and that was with respect to the referendum.

I gather that the same answer would obtain, that as far as the position has been taken by this Committee on the referendum provisions of the package, that there will be no movement on the federal government in that respect prior to the final passage?

Mr. Chrétien: If it has been voted upon in this Committee, it is over.

Mr. Hnatyshyn: So you are then in the position where, as far as you are concerned, you are going ahead with this package now in light of the realization that the province of Saskatchewan is in opposition to the package?

Mr. Chrétien: We decided in October to go ahead with this package on resources, we made that offer in the summer and it was considered by the national New Democratic Party to be an adequate offer and we are going ahead with it. It is a transfer of indirect taxation and interprovincial trade power to the provinces.

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As Mr. Broadbent said, it is three quarters or four fifths of what Saskatchewan was asking but, as I said so many times, perfection is the enemy of the good; so we are going with what is good.

Mr. Hnatyshyn: Well, I just do not think we should confuse Mr. Broadbent and Mr. Blakeney because they are obviously taking quite different positions.

Mr. Chrétien: Just as I do not confuse Mr. Clark and Mr. Davis, or Mr. Hatfield.

Mr. Hnatyshyn: No, but I want to know on this particular issue, and naturally Conservatives always agree on every item, but I just want to talk now about the New Democratic Party.

What I am getting at is that the Attorney General of the province of Saskatchewan has made it quite clear, and as I indicated, that they are not supporting it, and I ask the question in that context. Another point that he made in terms of his observation was that notwithstanding the fact that the Secretary of State of External Affairs seems to think that any action on the part of the provinces or anyone to make a reference to a court to get interpretation of the constitutionality of the actions taken by the federal government was an abuse of legal process, there was some suggestion that the federal government should in fact have taken this matter directly to the Supreme Court of Canada for an expeditious assessment of the ability of the government to proceed having regard to the decision of the highest court in the land.

I am wondering whether or not the Minister of Justice and the Attorney General has any thoughts at this point in time having regard to these criticisms about the reference and the fact there is a plethora of references now to courts of appeal with respect to the matter of having the Supreme Court of Canada deal with the issues that are before the courts of appeal?

Mr. Chrétien: Mr. Chairman, I do not see the relevancy of the question of the honourable member on what we are talking about, but personally if you give me the permission I will comment and it will be very short.

Parliament in Canada legislates and the court adjudicates, or whatever they do, but they do not legislate. Also we are having legislation here and we are passing it and if the courts want to pass judgment after that, they are there for that; but I do not think, as Attorney General of Canada I am telling you I will recommend to the government as much as possible that the role of Parliament is to legislate and if citizens or provinces or pressure groups want to litigate, they can, but we should not start that idea that everytime we move, we have to go to the court. I do think that Parliament has—there is a clear division of powers in our society and the Parliament or legislature legislates and the court passes judgment and I do not think that we should reverse the process.

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We have our responsibility and the court has their responsibility and I do think that it is not the proper way or very adequate to develop that idea that whenever we want to legislate we should go and check with the court first. It is the reserve. We legislate and the court decides after the fact.

I think there is a tendency in some areas at this time to reverse the role and I think that Parliament should face its responsibilities. We have been elected to legislate and it is what we are doing.

Some hon. Members: Hear, hear.

The Joint Chairman (Mr. Joyal): Now, at this point I want to draw the attention of the honourable member that that line of questioning is more in relation to a further decision that this Committee will have to take later on, maybe tonight or tomorrow or in the forthcoming week, about what kind of recommendation we should make to both Houses, the Senate and House of Commons.

So I would like the honourable members to keep their questioning for that very moment, but at this point we are dealing with an amendment that is more in relation with nonrenewable natural resources, forestry resources and electrical energy than anything else, and so far as the government action is concerned in relation to the court action, I would invite the honourable members to ask those questions when we are dealing with the recommendation to both Houses.

Mr. Hnatyshyn: Mr. Chairman, there was some observation that the New Democratic Party are particularly concerned or are apprehensive about this line of questioning for some reason. but I wanted to point out that this particular provision does deal with a definition of ownership of provinces, it deals specifically with the provincial right, and of course I suggested with the greatest of difference that the whole question of whether or not in terms of the ethicacy of the government, whether it be a political or legal question, it is quite germane for me to ask the Minister with respect to his intentions to get clarification of the appropriateness of this particular amendment because it does deal with a matter that is essentially a provincial right, provincial ownership of resources and one which I wanted to, I think all members of the Committee would want to be absolutely satisfied that if we move on this, that somehow we are not going to be faced with having egg on our face later on to find out somehow we moved on a matter that was ultra vires of us because the Supreme Court of Canada determined that to be the case. So that was the reason why I was directing my questions to the Minister.

Mr. Chrétien: On that I think that your point is very easy to answer.

We are giving powers to the provinces so I do not think that if ever the court said that we had been too generous in favour of the provinces, I do not expect your party to be mad at me because I have been too generous to the provinces.

Mr. Hnatyshyn: Well, I raise it in the context of making sure, Mr. Chairman, that what we do in this Committee is going to cause the least amount of judicial references and that

[Page 87]

we get through this without causing the people of Canada great expense and inconvenience of finally determining what the powers are of this Committee.

I make that point but the Minister, I gather his answer is and I am not going to pursue it further . . .

Mr. Chrétien: Good. Better not.

Mr. Hnatyshyn: The Minister’s position is that he is not the least bit interested in getting any sort of judicial interpretation before he moves on this or any other provision of the package.

Mr. Chrétien: You have stated very clearly my position. We are the legislators and we will legislate and the court will decide in due course. It is the proper course, that should be that way all the time.

Mr. Epp: The government will propose and Parliament will dispose.

Mr. Chrétien: There is confusion like that.

Mr. Hnatyshyn: I appreciate that and I am going to conclude my remarks, I do not want to attribute motives but the last time we dealt with a constitutional package of which I was a part, the government was receptive to getting the matters clarified and did refer the provisions of Bill C-60 and I want to know what the reason was, why the Minister is now changing . . .

Mr. Chrétien: You asked us, it is very simple: you have a different Attorney General, that is all.

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Ray Hnatyshyn.

I would like to invite at this point honourable Jake Epp.

An hon. Member: Be relevant.

Mr. Epp: Always.

Mr. Chairman, I was going to mention a few matters arising out of Senators Austin’s comments; I believe Senator Roblin has done that not only in detail but also, as a matter of fact, in terms of the interpretation of history as it relates to western Canada.

If there is anything to be said in it as to what Senator Austin or Senator Roblin said, many of us are deeply concerned about the alienation in the west because it is a mental alienation that is developing and that alienation is finding expression in various actions, and we are concerned. We are concerned because we believe that a federalist qualification needs no second guessing; we believe that there has not been a price we have had to pay for federalism, but rather we have made a commitment to federalism, and for those whose commitment might not be quite as strong we want to make sure that they have reason to be positive partners rather than questioning why they remain.

Regarding the amendment. Mr. Chairman, I want to spell out the position of the party as we see the amendment, I want to emphasize that the discussion on both the McGrath and the New Democratic Party amendments forcefully demonstrate the necessity, if not the categorical imperative, of going back to the negotiating table with the first ministers on this question

[Page 88]

as well as the separation of the package as we have argued all along.

Mr. Dionne, I believe, put his finger on it when he spoke about the offshore and when he had a number of questions as to where shall the boundaries be drawn, who shall get what revenues, and he is correct when he says that, Mr. Chairman, and it is for that reason that only federal—provincial negotiations can in fact complete that task.

Mr. Chairman, given the federal character of our system it is important that we keep the integrity of federal provincial negotiations intact. Furthermore, given the nature, the scope and complexity of the New Democratic Party amendment, it is necessary, if we are to avoid self-inflicted wounds, that we clearly are aware of the problems the amendment might create.

What are some of the potential problem areas, then? One, the matter of indirect taxation. The provinces have accepted the principle of indirect taxation, they have done this for some time, but this still leaves in doubt their acceptance of the exact wording of the amendment before us. It is for that reason that we feel the provinces again must have the final negotiation position with the federal government on the wording itself.

We have been told, both by the government and the New Democratic Party, that the power of indirect taxation will enable the provinces to obtain significant additional revenues. Serious doubts remain whether this is so.

This assertion, as demonstrated by this morning’s debate by the NDP can be seriously questioned. It can be seriously questioned because of the power of the provinces of direct taxation and the power of the provinces of royalty regimes relating to both renewable and nonrenewable resources.

Another case in point, Mr. Chairman, is the point of Newfoundland and especially the power generation at Churchill Falls in Labrador.

That agreement between Newfoundland and the province of Quebec specifically states that the province of Newfoundland cannot levy any direct or indirect taxes on Quebec Hydro.

So a question remains: what happens to that clause of the contract? We have talked about the problem between Newfoundland and Hydro Quebec and the matter that there would be now greater difficulties because of the power that is in this clause.

[Page 89]

Senator Roblin, as I have pointed out, earlier said the provinces have no serious difficulty in raising revenue through the present regimes of taxation.

Some provinces may find the grant of indirect taxation powers as presently amended in fact restrictive.

Suppose, for example, a province wants to give a tax rebate, made to foster industrial development in its own province; the question remains: can it do this, when the present amendment grants the power of indirect taxation so long as that province does not discriminate against the other partners of Confederation.

Mr. Chairman, what about the definition of interprovincial trade? Where does interprovincial trade start and end? Does it, for example, reach back to the wellhead? True, the Petroleum Administration Act honours provincial boundaries presently; but this, of course, can change.

It is a statute only. For instance, in the United States, the situation may provide a useful caveat since it clearly demonstrates how the meaning of interstate trade and commerce has changed so that it is presently interpreted to inside the borders of a state. There are legal cases to show that.

For example, does this amendment allow the federal government, given its paramountcy, to reach back into provincial jurisdiction in the name of interprovincial trade? This is obviously not clear.

The third problem that remains—the problem over the clarification and limitation of the federal government’s declaratory and emergency powers. What is a national emergency? Is it based upon a shortage of supply? For example, in 1979 the western provinces pushed for a national compelling interest clause, rather than a national emergency clause, or a declaratory clause; and the western provinces have repeatedly expressed their concern over this issue—something that Senators Austin and Roblin both addressed.

I would suggest that this clause, if passed, will again not fully address that concern.

Mr. Chairman, what about pre-emptive federal legislation on nonrenewable resources which may make this amendment, to all intents and purposes, cosmetic only?

The Petroleum Administration Act demonstrates that the federal government could legislate on nonrenewable, natural resources so completely as to make the guarantee of provincial ownership, control, development and conservation nominal, if not in fact meaningless. That is also in the clause.

What about the problem of conservation? Can the federal government regulate production against reservoir conservation practices?

[Page 90]

We have already dealt with the fisheries concern, unfortunately, not in the manner that the honourable John Fraser had hoped for.

Mr. Chairman, those are the problems that we see with this clause. Are there advantages? I believe, yes, one can say that there is an advantage that the NDP amendment recognizes, affirms provincial rights regarding non-renewable resources, including exclusive right to legislate in the development, conservation and management of those resources.

I concede that is the position in that clause. Secondly, that the provinces now have concurrent interprovincial legislative powers subject to federal paramountcy; that is greater power to the provinces.

Lastly, there is the right to indirect taxation. Mr. Chairman, the provinces have long wanted these rights. So where does that leave our party and this Committee?

I believe—and all members of our party believe—that a great deal of doubt can be dispelled by a meeting of First Ministers to conclude the discussion on the matter of indirect taxation and in fact, resource ownership and management.

It has been noted, for example, that the Prime Minister has said such negotiations will take place in the second phase, but what will those negotiations be like if the Prime Minister is actually successful in his approach to have Britain amend our constitution, and that this amendment will then already be a fact of life in the constitution before that second round takes place?

While the provinces have agreed in principle to this amendment, we have to reluctantly look at the confusion which we believe could still develop because of the amendment.

So, Mr. Chairman, having looked at both the pros and the cons of this amendment and having outlined the difficulties, we suggest that we can only support this amendment on the basis, that, after its passage in fact it be referred back to the premiers for final clarification and ratification.

Thank you.

The Joint Chairman (Mr. Joyal): Thank you, the honourable Jake Epp.

I see that honourable members are ready for the question.

Amendment agreed to.

—–o0o—–

February 9, 1981: Serge Joyal, Senator Austin, Senator Connolly, Roger Tassé, Q.C. (Deputy Minister, Department of Justice), Lorne Nystrom, & Senator Tremblay, speaking in the Special Joint Committee of the Senate and House of Commons on the Constitution of Canada (click HERE to view the entire Special Joint Committee, Issue 56, then scroll to p. 8)

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Perrin Beatty.

Before I invite honourable members to open the discussion on page I of the proposed resolution, I will make sure that honourable members have received two pages of a technical amendment, one especially is merely technical, which is entitled, Additional Technical Amendment in English, and I will read it and I will give the necessary information to honourable members so that they might know what the proposed technical amendment concerns.

[Page 9]

In the proposed Sixth Schedule to the Constitution Act, 1867(A), in the title add “natural” after the word “non-renewable” so that the title reads as follows:

Primary Production from Non-renewable Natural Resources and Forestry Resources

and so on. The suggested change to be made is to add the word “natural” because in the French version of the proposed amendment that was unanimously carried last week, the word “natural” does not appear in the English version, while it does appear in the French version, and the proposed technical amendment would be to add the word “natural” as it is presently read in the French version.

So, if there is unanimous consent to that additional technical amendment, I would invite Senator Austin to move it in the proper form, and the Chair will call the questions.

Senator Austin.

Senator Austin: Thank you, Mr. Chairman.

I move that in the proposed Sixth Schedule to the Constitution Act, 1867(A), in the title add the word “natural” after the word “nonrenewable” so that the title reads as follows:

(a) Primary Production from Nonrenewable Natural Resources and Forestry Resources

and (b) in paragraph 1(a) add the word “natural” so that the opening words of paragraph 1(a) read as follows:

(a) Production from a nonrenewable natural resource is primary production therefrom if

The Joint Chairman (Mr. Joyal): Thank you very much, honourable Senator Austin.

I see that there is no intervention on that amendment.

Senator Connolly?

Senator Connolly: Mr. Chairman, I am a bit confused about it because you refer to the Sixth Schedule of the constitution act and I am just wondering on what page Schedule Six is?

The Joint Chairman (Mr. Joyal): You will not find any such title in the earlier text of the proposed resolution because it has been a completely new chapter added through a new amendment, and you will find that Part VI of the proposed resolution is not in the text as such, neither in this version nor—if Senator Connolly, you look to the Chair you will find it easier to have the answer to your question.

You will not find it, Part VI, neither in this text, nor in the other text that the honourable Minister of Justice has tabled with this Committee because that sixth part is the result of an amendment that was suggested by the New Democratic Party and, as such, it is on the loose sheet of paper that you will find it.

However, the Clerks are in the process of retyping all the amendments that have been accepted by this Committee and you will find it in the new consolidated version, I should say, of all the amendments that have been accepted on all sides of the table at this point.

Senator Connolly: Thank you, Mr. Chairman.

My only concern is that the word used is “Sixth Schedule” and I understand it was Part VI of the proposed document so it is hardly the schedule.

[Page 10]

Now, I may be wrong and this is just a word that I am concerned with.

The Joint Chairman (Mr. Joyal): That is a good question and for that answer the Chair will invite a legal officer or adviser of the Department of Justice to answer your question, because I think it is a proper question.

Mr. Roger Tassé, Q.C. (Deputy Minister, Department of Justice): Mr. Chairman, the amendment that has been approved by the Committee will add a new section in the resolution, but would also add a Sixth Schedule to the constitution act and the changes that are being proposed here relate to the Sixth Schedule.

The Joint Chairman (Mr. Joyal): Yes. If, again, honourable Senator Connolly, you want to have further information, I refer you to the amendment identified N-40, new clause following Clause 51, page 15, and you will find that the original text of that proposed amendment on the second page of it you will find the Sixth Schedule and the title of that Sixth Schedule reads:

“Primary Production From Nonrenewable Resources and Forestry Resources”

and that is where the proposed technical change is suggested, because the title of the Sixth Schedule, that is on page 2 of the proposed loose amendment sheets, does not include the word “natural”

Mr. Nystrom: I have a question, Mr. Chairman, to Senator Austin or perhaps one of the officials.

I get the impression from the way the amendment to the resources clause is presented, it is technical and inconsequential, but I want to ask a question to make sure of that.

The wording is changed to add the word “natural”. The original wording was “production from a nonrenewable resource is primary production therefrom if”, and if we throw the word “natural” in, why is that being done? Does it change the meaning? We are now going to say “nonrenewable natural resources” whereas before we said “nonrenewable resource”?

I am not a lawyer and I do not know the jurisprudence here, is it merely inconsequential or does it have some meaning?

[Translation]

Mr. Tassé might answer the question instead of Senator Austin.

[Text]

The Joint Chairman (Mr. Joyal): Before I invite Mr. Tassé to answer your question, Mr. Nystrom, I would draw your attention to the French version of the amendment because the French version does include very clearly, and I will read the title [Translation] of the Sixth Schedule as well as paragraph A “Production primaire tirée des ressources naturelles son renouvelables et de ressources forestières” and paragraph A:

On entend par production primaire, tirée d’une ressource naturelle non-renouvelable.

The French version was very clear in terms of natural resources, but I will certainly allow your question to Mr. Tassé.

[Page 11]

Mr. Tassé: Well, Mr. Chairman, to what you have just said, I would like to draw Mr. Nystrom’s attention to the text ofthe clause itself that has been added to the resolution, namely Clause 52, and the title there says “Nonrenewable Natural Resources, Forestry Resources and Electrical Energy”. I think in effect, it was just an oversight that the word “natural” did not appear in the Sixth Schedule.

As the Chairman has pointed out, that word was already included in the French version of that schedule.

[Translation]

The Honourable Senator Tremblay.

Senator Tremblay: I would just ask for clarification. It might be very clear to everyone but I want to make sure that it is the sixth schedule of the BNA Act of 1867, And it is not a schedule to the constitutional act of 1981 and, as a matter of fact, it comes right after the oath of allegiance.

The Joint Chairman (Mr. Joyal): I will ask Mr. Tassé to answer very clearly for our proceedings but it is quite clear in my mind, Honourable Senator Tremblay.

Mr. Tassé: Thant is right, Mr. Chairman.

The sixth schedule is a schedule to the British North America Act and as you stated, Senator Tremblay the fifth schedule deals with the oath of allegiance.

Senator Tremblay: Why have you put it there, I do not understand very well but, well . . .

Mr. Tassé: It is because it is the sixth one.

The Joint Chairman (Mr. Joyal): Thank you, Honourable Senator Tremblay.

[Text]

Amendment agreed to.

—–o0o—–

February 10, 1981, Debate in the House of Commons (click HERE)

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February 17, 1981, Debate in the House of Commons (click HERE)

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February 19, 1981, Debate in the House of Commons (click HERE)

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March 2, 1981, Debate in the House of Commons (click HERE)

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March 10, 1981, Debate in the House of Commons (click HERE)

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March 11, 1981, Debate in the House of Commons (click HERE)

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March 13, 1981, Debate in the House of Commons (click HERE)

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March 18, 1981, Debate in the House of Commons (click HERE)

—–o0o—–

 March 23, 1981, Debate in the House of Commons (click HERE)

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 March 24, 1981, Debate in the Senate (click HERE)

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April 2, 1981, Debate in the House of Commons (click HERE)

—–o0o—–

July 13, 1981, Debate in the House of Commons (click HERE)

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November 20, 1981, Debate in the House of Commons (click HERE)

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November 23, 1981, Debate in the House of Commons (click HERE)

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December 1, 1981, Debate in the House of Commons (click HERE)

—–o0o—–

December 7, 1981, Debate in the Senate (click HERE)

—–o0o—–

ENDNOTES

[1]      This section came into being through amendments contained in the Constitution Act, 1982 (Sections 50 and 51) and the debates reflect that constitutional era. Please also note that this report, like all reports, is a work in progress. Version 1 of this report is slightly incomplete at the moment as it was hurried in order to give our users some context in regards to the upcoming March hearings for the Impact Assessment Act at the Supreme Court. We expect to add more debates from the House of Commons and Senate in the near future.

[2]      We recommend also consulting our report on Section 109 of the Constitution Act, 1867, which will be forthcoming in the near future as this clause was the provincial resource ownership clause before it was strengthened through the constitutional amendment of 1982 into what would become Section 92A.

[3]      This Conference, particularly the “Best Efforts” Draft is mentioned throughout the debates on the Section 92A. Meekison and Romanow in Origins and Meaning of Section 92A: The 1982 Constitutional Amendment (IRPP, 1985) said on in regards to the Conference, “One of the drafts, dealing with natural resources, is important because it has come to be regarded as the first draft of what is now section 92A.” (p. 19). We are uncertain if the document cited below is a summary or the draft itself. This document, was also submitted to Parliament in 1979—the same one which appears in our report. Nevertheless, we have also attached links to any other document in our collection from this meaningful Conference.

[4]      Original not currently available. Discussion draft found in Anne Bayevsky, Canada’s Constitution Act 1982 & amendments: a documentary history (1989).

[5]      Elliot calls this the first version of the Charter.

[6]      Date for this draft is uncertain. Elliot places it as October 5. Parliament was only opened on October 6, 1980 when it was tabled. As for the October 2 date, it refers to “The document entitled ‘Proposed Resolution for a Joint Address to Her Majesty the Queen respecting the Constitution of Canada’ published by the Government on October 2, 1980” which appears as the title of every issue of the Special Joint Committee on the Constitution.

[7]      While no wording of the clause was yet announced, Minister of Justice Jean Chrétien twice discussed the proposed amendment in the committee from the NDP. On p. 21, he said, “J’aimerais répéter que le gouvernement acceptera qu’on lui soumette une modification concernant les ressources, à la lumière de l’échange de correspondance entre le premier ministre monsieur Trudeau et monsieur Broadbent, le chef du Nouveau Parti Démocratique, en octobre.” Later, on p. 35, he said in English, “I say that, of course, I said in that speech that there would be an amendment on resources coming from the NDP, there might be a couple of amendments, there is still three more weeks. Of course, time is running short, but it is possible there are one or two amendments I might propose myself, and I will look at the discussions in this Committee, and I am a reasonably reasonable person, if I can use those two words, so I will be listening to the Committee.” The amendment would be present in the next draft, for the first time.

[8]      Elliot has the date as November 18. Source is from November 20.

[9]      As titled by Robin Elliot, op cit.

[10]    What would eventually become the new clause, Section 92A, was debated in depth on Feb. 4 and 5, 1981 and, as a result, we have added much of the debate from those two meetings in our report. It is recommended that the reader uses the link above to consult the debates in full. As a result of the large amount of speakers that occurs during an entire committee meeting, we have not labelled all the speakers above as we normally do for our excerpts. Ditto for Issue 54, just below, in our report.

[11]    Supra footnote 10.