November 9, 1981 ALBERTA HANSARD 1521 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Monday, November 9, 1981 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF BILLS Bill 95 Landlord and Tenant Amendment Act, 1981 MR. KOZIAK: Mr. Speaker, I beg leave to introduce Bill 95, the Landlord and Tenant Amendment Act, 1981.

The Bill recognizes the general increase in interest rates that has taken place since the original Act was passed in 1979, by doubling from 6 per cent to 12 per cent the interest required to be paid on security deposits. [Leave granted; Bill 95 read a first time] Bill 89 Solicitor General Statutes Amendment Act, 1981 MR. HARLE: Mr. Speaker, I beg leave to introduce Bill 89, the Solicitor General Statutes Amendment Act, 1981. The purpose of the Bill is to amend three statutes.

The first is The Motor Vehicle Accident Claims Act, to pro­ vide for a deductible of $200 for all property damage claims, thereby eliminating the principle of full recovery when a claim exceeds the amount now specified in the Bill. The amendment to The Motor Vehicle Administration Act is to ensure an automatic six-month suspension of a licence following a conviction for driving while sus­ pended. That of course has been affected by the decision in the Supreme Court of Canada, which ruled that Sec­ tion 238 of the Criminal Code was beyond the legislative capacity of Parliament.

There's an amendment to raise the level of reportable accidents to $500 from the present $350. That same purpose is also contained in an amendment to The Off- highway Vehicle Act. [Leave granted; Bill 89 read a first time] head: TABLING RETURNS AND REPORTS MR. LEITCH: Mr. Speaker, I would like to table the annual report of the Alberta Oil Sands Technology and Research Authority for the period ended March 31, 1981. head: INTRODUCTION OF SPECIAL GUESTS MR. BRADLEY: Mr. Speaker, it is my distinct pleasure today to introduce two visitors from the municipality of Crowsnest Pass.

As hon. members will recollect, the municipality of Crowsnest Pass was a creation of this Legislature. It came into effect on January 1, 1979, when the former towns of Blairmore and Coleman, the villages of Bellevue and Frank, and an area of ID No. 5 which contains nine hamlets, were brought together to form this exciting municipality. In area, it is the third largest urban municipality in the province, and the 14th largest by population. Seated in the members gallery are His Worship Dr. John Irwin, the mayor of the municipality of Crowsnest Pass, and Councillor Geoff Peter.

They are in the city today to meet with members of the government to discuss the exciting challenges which face that municipality. I ask them to rise and receive the welcome of the Assembly. MRS. FYFE: Mr. Speaker, this afternoon I would like to introduce to you and to other members of the Assembly 55 grade 5 students from the Wild Rose elementary school in the city of St. Albert. Accompanied by their teacher Mr. David Rush, they are seated in the members gallery. I'd ask them to stand and be recognized by the Assembly. head: ORAL QUESTION PERIOD Heritage Trust Fund Auditing MR. R. SPEAKER: Mr.

Speaker, my question to the Provincial Treasurer is with regard to the $60 million loss of the Heritage Savings Trust Fund. As we've clarified in this Legislature, management letters are not included in audit working papers. Over the past week or few days, I wonder if the minister has had the opportunity of review­ ing his earlier decision not to provide us with manage­ ment documents in this Legislature. Would the Provincial Treasurer consider doing that today? MR. HYNDMAN: Mr. Speaker, as I've indicated before, I think the law is clear as to the definition of that

section of the Act, and that the Act is very clear in stating that those documents cannot be tabled. I guess the best evi­ dence of that is the fact that the hon. opposition leader has brought in a private member's Bill of purporting to change the law to something else. MR. R. SPEAKER: Mr. Speaker, the Provincial Treas­ urer is again making inaccurate statements. My supple­ mentary question: why does the Provincial Treasurer not make every attempt to present those documents to this Legislature, so that we can see what is going on behind the scenes? At the present time, we don't know why the $60 million was lost.

Has the Provincial Treasurer at­ tempted to pursue every avenue that could make those documents available to this Legislature? MR. HYNDMAN: Mr. Speaker, again the hon. Leader of the Opposition is distorting the entire subject of the suggested $60 million. As I pointed out before, over three years there were profits of approximately $1.6 billion of the fund, and losses of some $60 million, which related to investment decisions deliberately taken.

As I've indicated in the past, every managed bond portfolio in this country and on this continent has deliberately made decisions which would result in realized losses of that kind, during a time when there is a volatile interest rate situation such as we've seen over the past two to three years. As well, when he talks about losses, he should bear in

1522 ALBERTA HANSARD November 9, 1981 mind the fact that the independent Auditor General has reviewed in very great depth the total operation of the heritage fund and has confirmed that not one dollar has been misappropriated, not accounted for, or mislaid, and that there is no fraud or collusion. So the suggestion that there is a loss, in the meaning of the hon. gentleman's terms, is completely wrong. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. The Provincial Treasurer can say there may not have been a loss. Let's class it as mismanagement.

There has been mismanagement of this fund. [interjections] The fund lost money for three years, to an accumulated total of $60 million. Could the Provincial Treasurer account for the realized losses for the first two years, and what documents will the Provincial Treasurer make available? MR. HYNDMAN: Mr. Speaker, the Auditor General has reviewed the heritage fund in total. He has reviewed the losses, and he has said there is no mismanagement. This government stands by the Auditor General's recom­ mendations, approvals, and suggestions for change.

So again, I'm puzzled as to why the opposition leader insists on attacking the credibility of the Auditor General. MR. R. SPEAKER: Mr. Speaker, that's distortion and untrue. [interjections] Both. I'm not talking about the Auditor General. I'm talking about management docu­ ments sent to the Provincial Treasurer and the Deputy Provincial Treasurer for their use to straighten out the mess they had created. Mr. Speaker, to the Provincial Treasurer. There are three of those documents. Will the Provincial Treasurer consider tabling all three that are within the law to be tabled?

There is no law prohibiting their being tabled. MR. HYNDMAN: Mr. Speaker, I'm really at a loss to understand why the hon. member then brings in a Bill saying that the law should be changed so we can do what he's suggesting. By bringing in that Bill — and that Bill can be debated in the future — he has admitted that he may not be happy with the existing law, but he concedes that the existing law of this province is that those letters should not be made public and should not be tabled. MR. NOTLEY: A supplementary question to the hon. minister. We have the Auditor General's report indicating concern.

My question to the minister, though: were any management letters received prior to the letter that was disclosed indicating concern about the management pro­ cedures in the operation of the heritage trust fund? MR. HYNDMAN: Mr. Speaker, as I think is indicated in the Auditor General's reports — it could be the first report — a continuous number of management letters, audit advice letters, are being prepared by the Auditor in his functions in proceeding with his obligations under the Act, wherein he indicates suggestions for improvement, change, and tightening up.

As we all know, only those items which are substantial or significant and that have not been cleared up appear in the Auditor General's annual report. So the annual report of the Auditor General is the important document, because items which are not in that annual report have automatically been cleared up to the satisfaction of the Auditor General. I would imagine there have been letters with regard to most departments, and certainly other years of the heritage fund. MR. NOTLEY: Mr. Speaker, a supplementary question to the minister for clarification.

In February, we have the Auditor General expressing the concern that all members are aware of. However, my question to the minister: were letters sent to either the minister or the Deputy Provincial Treasurer with respect to procedures, the operation of the fund, expressing concern about those procedures, prior to the memo which was leaked and is now available for public information? MR. HYNDMAN: To my knowledge, Mr. Speaker, no there were none. MR. R. SPEAKER: Mr.

Speaker, a supplementary ques­ tion to the Provincial Treasurer with regard to the ques­ tion I raised a few moments ago about three years going by and a realized loss of $60 million accumulating. Could the minister indicate what steps were taken in years one and two to deal with these realized losses during those times? Why were the losses allowed to go on for a three-year period? MR. HYNDMAN: Mr. Speaker, I spoke about that at some considerable length in the heritage fund committee.

I indicated the background policies which related to in­ vestments made when the fund began and as that pro­ ceeded down the years. I indicated the situations in which there were unrealized and realized losses, what those were, why they were taken, the fact that those kinds of decisions were taken by any and every managed bond portfolio, and that they were valid and proper investment decisions for the purpose of maximizing the returns on the heritage fund. MR. R. SPEAKER: Mr. Speaker, the minister can make all the statements he wants.

But the question to the Provincial Treasurer: does the Provincial Treasurer agree that working papers of the Auditor General include co­ pies of letters that have been directed to the minister and deputy minister but do not include the actual letters the minister or the deputy minister of his department receive? MR. HYNDMAN: Mr. Speaker, in my view the defini­ tion is crystal clear. The Act, passed by this Assembly, very clearly indicates that those letters had ordered to — and I've indicated the two basic reasons.

Firstly, in making public all the audit advice, the reasons and sug­ gested improvements an Auditor General may make — in this case back in '79, of course; that's the time period we're talking about — you are therefore certainly not helping, and probably opening to a weakening of the control systems. Secondly, you do not have the necessary candor and frankness you want, and which we are lucky to have the benefit of from the Auditor General, with respect to various operations of government.

This is the kind of advice every Auditor General in every govern­ ment in this country gives to government from time to time for the improvement of systems. That's the very appropriate part of the audit system. MR. R. SPEAKER: Mr. Speaker, I believe public busi­ ness should be done in public. For the information of the Assembly, I'd like to table a copy of pages from the manual of the Canadian Institute of Chartered Account­ ants, which points out that only the copies kept in the Auditor General's reports are working documents, but those sent to ministers are not. I don't see how the

November 9, 1981 ALBERTA HANSARD 1523 minister can make a case today to keep them and not provide them for this Legislature. MR. HYNDMAN: Mr. Speaker, to argue that a copy of something is proper to table when the original is not seems to me to be almost Alice in Wonderland.. [interjections] MR. R. SPEAKER: Get a legal opinion. Get a good lawyer. MR. NOTLEY: Mr. Speaker, a supplementary to the minister. We have the Auditor General indicating serious concern about the operation, the procedures. [interjec­ tion] Yes, there's no question about that in the document.

Whether or not the money was lost is aside from the fact that concern was expressed about the procedures. My question to the minister: on what basis were changes not made by the government in the ongoing review of the operations of the heritage trust fund? Why did they have to wait for the report by the Auditor General before making some fairly simple, elementary reforms and changes to protect public dollars? MR. HYNDMAN: Mr. Speaker, changes were made and have been made continuously ever since the fund was devised.

As a result of discussions with and the audit advice letters of the Auditor General, a series of changes is constantly being made to update and improve the system. I think in the committee on the Heritage Savings Trust Fund, about four weeks ago, a number of questions were posed as to what changes were made in the system and what the system was. I indicated that in committee study of the Bill on the Order Paper today, I would be prepared and happy to indicate what the system was, how the systems worked, and how they had evolved over the years. So I'm certainly prepared to do that.

The suggestion of serious concern, though, by the hon. member is incorrect. Serious concerns of the Auditor General, if they are serious, appear only in the annual reports. Those which are not in the annual reports are not significant or material, as the law says. MR. NOTLEY: Mr. Speaker, that certainly does become a matter of opinion, in view of the fact that the Auditor General said there's a possibility of collusion, and that certainly is serious to some of us. Perhaps that is a matter of opinion, but not to most Albertans.

However, my question to the minister: with particular respect to the reservations expressed by the Auditor General about the procedures for investing money, why were no changes made before? This government is con­ tinually reviewing that. Why were no changes made until we got the management letter? MR. HYNDMAN: Mr. Speaker, I'm not sure of the time line the hon. member is talking about. But if the Auditor General finds or suggests improvements or changes, and if they are agreed to by the government — as they are in most cases — they're put into effect as soon as reasonably possible.

So to suggest that the changes and improve­ ments recommended are not put into effect is wrong. You know, the hon. member is talking about sugges­ tions with regard to fraud and collusion. In doing that, he is putting a cloud over very loyal employees and hard­ working people in the government, also the private sector investment industry. So if he's going to talk about fraud or collusion, I suggest he come up with evidence, and either put up or be quiet on that topic. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister.

Once again, the minister is dragging a blue herring across the road. [interjections] The issue is very clear: surely this government is not just going to . . . MR. SPEAKER: Order please. Has the hon. member a question different from one he's asked before? MR. NOTLEY: Yes, Mr. Speaker. My question to the minister is that surely any government is going to be reviewing procedures [interjections] and improving them on their own, not . . . MR. SPEAKER: Order please. If the hon. member wishes to ask a question, fine. If he doesn't, would he please retain his seat. MR. NOTLEY: Well, Mr. Speaker, to the minister.

Why was no change made in the procedures before the man­ agement letter was received by the Auditor General? MR. SPEAKER: With great respect, that's the same question that's been asked twice. Land Tenure Program MR. R. SPEAKER: Mr. Speaker, my second question was to the Minister of Federal and Intergovernmental Affairs, relative to aboriginal rights and the reason Alber­ ta and British Columbia didn't agree with them. I'll hold that question until the minister returns.

In line with that, I'd like to ask the Minister of Municipal Affairs whether he has reconsidered the ap­ proach the department is using with regard to land rights in terms of the Lubicon Lake Band, in light of the discussion going on at the present time in terms of abori­ ginal rights and the constitution. MR. MOORE: Mr. Speaker, my office has very little to do with any particular claims by the Lubicon Lake Band that might now be in process.

My responsibility has been to carry out, through the land tenure program, the mandate to provide titled land to native people for resi­ dential purposes throughout northern Alberta where there no reservations were in place. That is proceeding in Little Buffalo, as it is in a number of other communities. MR. R. SPEAKER: Mr. Speaker, has the minister had any requests from the chiefs of those respective areas to hold or delay the land tenure program? MR. MOORE: Yes we have, Mr. Speaker. At the same time, we've had requests from Metis people in those communities to continue the land tenure program.

As I have explained in this Legislature on other occasions, it is not my intention to alter or cancel a program designed for the benefit of all the peoples of that particular area only to please a few. So as I said earlier, Mr. Speaker, we will be continuing with the land tenure program in the Little Buffalo community. However, we have advised that those persons who do not wish to take advantage of such a program at this time have no requirement to do so. But to deny the legitimate aspirations of some who want title to their land, at the request of those who are following up

1524 ALBERTA HANSARD November 9, 1981 on a land claim which may or may not be successful and may or may not apply to the entire community, in my view would not be filling the mandate we have a respon­ sibility for. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion to the minister. Since aboriginal rights were left out of the agreement relative to the constitution, has the minister planned any series of meetings with the various bands and Metis groups to assure himself of their present positions? MR. MOORE: No, Mr. Speaker. Constitution — Aboriginal Rights MR. PAHL: Mr.

Speaker, a supplementary question to the Minister responsible for Native Affairs. Could the minister advise the Assembly as to whether he's had any representations from native Albertans to involve himself in the process of constitutional debate with respect to the natives' concerns? DR. McCRIMMON: Mr. Speaker, I think it's a little premature for that. As I understand it, the native chiefs from the Indian Association of Alberta are meeting this week. They will probably be in touch with the province to have meetings at a future date.

A meeting has been set up next week with the president of the Metis Association of Alberta and the government of Alberta. Initial discus­ sions will probably be taking place at that time. As there is a year within which these discussions can take place before decisions have to be taken and representation made at the federal level, I am sure future meetings will take place with both the Metis Association and the Indian Association of Alberta. MR. L. CLARK: Mr. Speaker, a supplementary ques­ tion.

Could the minister inform the Assembly whether individual bands as well as the associations will be able to make representation to the government in regard to con­ stitutional changes? DR. McCRIMMON: Mr. Speaker, this government has been very open to listening to all representations from any and all native people with respect to their problems. I'm sure this will be no exception. MR. NOTLEY: Mr. Speaker, in the absence of the Premier and the Minister of Federal and Intergovern­ mental Affairs, I'd like to direct this question to the Attorney General. It deals with the aboriginal rights ques­ tion.

I know that the Attorney General is very close to the negotiations. As background, Mr. Speaker, just a few minutes ago the Premier of Saskatchewan indicated that the province of Saskatchewan would have no objection should the federal government decide to reinstate the aboriginal and treaty Indian sections of the constitution's charter of rights, particularly with respect to

Section 34 of the proposed charter of rights. Mr. Speaker, my question — and I think it would be helpful for the debate tomorrow — is: is the Attorney General in a position to advise the House that Alberta would in the same instance have no objection should the federal government reinstate

Section 34 of the charter of rights? MR. CRAWFORD: Mr. Speaker, I don't feel I am in a position to answer for the Minister of Federal and Inter­ governmental Affairs in regard to a policy matter relative to the accord signed last week. On that basis, I would defer it until he's able to be here. My only observation, however, is that the hon. member is presenting a report of something that is said to have happened.

I could only note that if the position the Saskatchewan government is taking according to the re­ port is in fact their position, it does not seem to me to be consistent with what was agreed to last week. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. Attorney General.

Given that historical and constitutional responsibility for Indians rests with the federal government — the Supreme Court has confirmed this many times — and given the spirited defence of constitutional convention by this government, especially since the Supreme Court decision on the federal resolu­ tion, would the government of Alberta support or accept the non-applicability of the notwithstanding clause to those sections dealing with aboriginal treaty provisions still within the charter?

In this case, this clause would have the effect of giving provinces jurisdiction with re­ gard to Indians, contrary to constitutional convention. MR. CRAWFORD: I think I can be more brief this time, but begin my answer in a similar way, Mr. Speaker. The hon. member is asking in respect of a major policy matter. In the absence of the Minister of Federal and Intergovernmental Affairs, I can only take such a ques­ tion as notice. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. Minister responsible for Native Affairs.

Is the minister in a position to advise the Assembly today — and again it would be useful before the debate tomorrow — whether any agreement coming out of the proposed conference on native and aboriginal rights to be held within a year, would in fact be subject to the rules for amending the constitution laid out in the accord of last week, including the opting-out provision? MR. SPEAKER: The hon. member seems to be asking a question of opinion and

interpretation concerning a do­ cument which is public, and the hon. member is entitled to have an opinion the same as anyone else. MR. NOTLEY: Mr. Speaker, because of uncertainty over the matter, is the hon. minister in a position to clarify for the Assembly what information he has received in terms of this proposed conference at this stage? DR. McCRIMMON: Mr. Speaker, quite frankly I still only have a draft copy; I don't have a final copy. So I would probably like to get some constitutional legal ad­ vice and discussion with the native people in the province before I'd answer a question of that calibre.

Extended Flat Rate Calling DR. BUCK: Mr. Speaker, my question to the Associate Minister of Telephones is a follow-up to the question I asked on extended flat rate dialing. Is the minister in a position to indicate if consideration is being given to changing the policy on extended flat rate dialing?

November 9, 1981 ALBERTA HANSARD 1525 DR. WEBBER: Mr. Speaker, a number of exchanges will be coming into the extended flat rate calling program in Alberta in the next year. Whether the mileage limit, which is 34 miles, will be extended is under consideration at the present time. With respect to the concern the hon. member raised several weeks ago, however, Lamont would not qualify even with the extension of the mileage. The town of Lamont has Fort Saskatchewan as its closest market centre, and the policy was not to by-pass the nearest market centre to go to another market centre. DR. BUCK: Mr.

Speaker, can the minister indicate what consideration has been given so that people who ballot have more of a choice than yes or yes, as in the Soviet Union, where you can just vote one way? My question is: if the people want a choice, is the minister considering giving them a choice by asking, on the ballot, if would they like to call the neighboring town or the city of Edmonton? Mr. Speaker, that is the question I'm asking: is there going to be a change in policy? DR. WEBBER: Mr. Speaker, a number of criteria are outlined with regard to having standard flat rate calling apply to a particular community.

I just outlined one of the criteria: that a market centre not be by-passed. That is considered to be the market centre for the town of Lamont, so it will not be by-passed. In terms of the flat rate calling program, certainly hon. members of the Legislature have brought to my attention boundary problems and problems related to approaching a market centre beyond the 34-mile limit in a number of communities in the province. The experimental program we are initiating next summer will hopefully be a positive one, and we'll see whether or not some of these problems can be resolved by a different approach. MR. R.

SPEAKER: Mr. Speaker, a supplementary ques­ tion. In the minister's review of this program, can he indicate how many community areas across the province of Alberta are unable to telephone their marketing centre directly, without charge? MR. SPEAKER: Unless the minister is possessed of a phenomenal expanse of knowledge, this would appear to be the kind of question that should be on the Order Paper. MR. R. SPEAKER: Mr. Speaker, the minister has taken a year to review the matter and, I understand, has the figure available to him. DR. WEBBER: Mr. Speaker, I don't recall the exact number.

If I'm not mistaken, some 250 to 270 exchanges in the province have flat rate calling, and I think 40 to 50 don't. DR. BUCK: Mr. Speaker, a supplementary question. In light of the fact that people in Bruderheim and Lamont will not have the option of voting on where they would like to have extended flat rate calling, can the minister indicate the situation in the Redwater area where people apparently have been promised extended flat rate calling but, as far as I can understand, will not have the problem of going through a market centre? DR. WEBBER: Mr.

Speaker, as I have mentioned, some 250 to 270 in the province have flat rate calling. I don't remember the details of the Redwater case. I would follow it up for the hon. member and find out for him. MRS. CRIPPS: A supplementary, Mr. Speaker. Can the minister assure that the 40 or 50 places which do not now have access to extended flat rate calling will be given consideration before changing the boundaries of places that already have that service? DR. WEBBER: Mr. Speaker, there are no plans for changing the boundaries of the exchanges in the province of Alberta.

As I mentioned, AGT is looking at the possi­ bility of extending the mileage limit. However, if the program I've indicated to a number of members and announced in the House earlier proves successful, it will resolve a lot of the boundary problems. MR. L. CLARK: A supplementary, Mr. Speaker. Could the minister inform the Assembly whether or not the 34-mile limit will be fully carried out through all the province before he starts extending districts beyond 34 miles? DR. WEBBER: Yes, Mr. Speaker, that's the plan. Tuition Fees MR. R. CLARK: Mr.

Speaker, I'd like to direct a ques­ tion to the Minister of Advanced Education and Man­ power. It's a result of the visits made to a number of MLAs this morning by representatives of the Federation of Alberta Students. Having regard to the fact that the federal budget is coming down this Thursday — unless it's put off once again — what contingency plans does the province of Alberta, especially the minister's department, have in place to guarantee that Alberta students will not have to pick up increases in tuition fees as a result of anticipated federal government cutbacks to postsecond- ary education financing?

MR. HORSMAN: Mr. Speaker, I appreciate the ques­ tion the hon. member has asked, but I find it somewhat puzzling. As I understand it, this year's money from the federal government — in the case of Alberta, $142 million by way of cash payments — has been received and is part of this year's budget. Of course, any action on the part of the federal government which might relate to a future year's budget would not impact upon Alberta or other provinces until next year's budget on April 1, 1982.

So while I appreciate the concern expressed and, I think, inherent in the hon. member's question, I don't think there is any necessity to have a contingency plan for the current budget which, as all members know, is well known to all institutions and students in this province. MR. R. CLARK: Mr. Speaker, a supplementary question to the minister.

Having regard for the recommendations of the Foster report, which says that in the next 15 years there will be a need for one million highly skilled profes­ sional, management, technical, and trade personnel in the province, and going to the nub of the question, which is basically this question of tuition fees, and regarding the fact that students now pay in the vicinity of 10 per cent of the cost of instruction in tuition fees, is the minister in a position to give a commitment to the Assembly that there will be no increase in tuition fees greater than the 10 per cent students now pay, using 10 per cent as a ballpark

1526 ALBERTA HANSARD November 9, 1981 figure for most faculties? Is it possible for the minister to make that sort of commitment? MR. HORSMAN: Mr. Speaker, on the subject of tuition fees, several months ago I met with student presidents from all institutions in this province and, subsequent to that, circulated to all boards of governors of institutions seven options for the development of a long-term tuition fee policy for Alberta. I had asked that all responses from each group be received by my office by the first of this month.

I think most have now complied with my request, and we are in the process of reviewing a long-term tuition fee policy. I must say that trying to use 10 per cent as a global percentage is somewhat difficult, because in fact the fig­ ures go from anywhere between 3 per cent in some insti­ tutions to as high as 17 to 18 per cent in others in Alberta. But, of course, the policy of this government has been to review very carefully the impact of tuition fees on students and on institutions.

We have not agreed to increasing tuition fees in the current school year, as has been requested by some boards of governors, pending this long-term review I alluded to. So I can't give an under­ taking with respect to a fixed percentage of tuition fees relating to the total costs of operating the various institu­ tions, because it would be very difficult to apply on a uniform basis, even within our system in this province. MR. R. CLARK: Mr.

Speaker, now that the minister has the information from the various institutions with regard to this whole question of student fees and the options the minister put out, could the minister indicate to the Assembly the procedure he will use? What steps will the minister now be following, and what's the anticipated time of a decision with regard to the future of tuition fees? MR. HORSMAN: Mr. Speaker, I hope to have a review, a precis or analysis of the various views of the institu­ tions.

I might say that in addition to having just request­ ed the information, a team from my department met with each institution and the various components, including students, over the last several months. I will now review with that departmental team what they have learned and what has come forward.

I then propose to take that information to my colleagues in the caucus committee on education and, from there, hopefully review it within the committee system of the government and have a decision made by our government caucus, so it will be announced well in advance of the time universities, colleges, and technical institutions have to announce to their students tuition fee levels for 1982, which would be towards the end of January 1982. Student Assistance MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister. The minister has mentioned tuition fees.

What specific review is being made of the question of student assistance in general, at this stage? MR. HORSMAN: Mr. Speaker, I thank the hon. mem­ ber for asking that question. As hon. members know, we have been conducting a joint review with the federal offi­ cials, through a task force, over the last two years. The task force has now reported to the public and had responses to their original recommendations. The council of ministers considered those recommendations at their most recent meeting in September in St. John's, Newfoundland.

Within the month, I hope to meet with the new federal minister responsible, Mr. Regan. Having just assumed that responsibility, I understand he has put off meeting with us until the federal budget has been announced. I'm not certain what implications that may have. But in any event, from very recent information, I understand that the meeting with the federal officials will take place within a month, at which time we'll hopefully be able to make a full decision with respect to the whole question related to the task force on student assistance. MR. NOTLEY: Mr. Speaker, a supplementary question for clarification.

I thought I heard the minister say the final report of the task force has been made public. I was under the impression it had not and was not going to be. I wonder if the minister could clarify that. Once receiving the final report, is it the intention of the government to table it in the Legislature? MR. HORSMAN: Mr. Speaker, I should clarify that. The original recommendations of the task force were made public. Then, at the request of the then Secretary of State, the Hon. Francis Fox, there was further review, by participants, of the task force suggestions.

They weren't recommendations; they were suggestions as to alterna­ tives: I guess that's the best way to put it. A review of the analysis of the responses to the task force has been made public. The final recommendations of the task force have not been made public and will not be made public, if they are, until after the meeting between federal and provincial officials which I've indicated will take place within the month, I hope.

Then, of course, if a common position is in fact arrived at between federal and provincial officials, certainly the ultimate decision will be made public be­ cause public policy will flow from that decision. MR. NOTLEY: Mr. Speaker, a supplementary question. Given the widespread interest in the matter, will the minister assure the House that he will recommend to his colleagues that the final report — the report, as opposed to the action — be made public, so not just the ministers but other stakeholder groups can have access to this information? MR.

HORSMAN: That decision will have to await the meeting I've indicated between federal and provincial officials. Tuition Fees (continued) MR. R. CLARK: Mr. Speaker, to the minister. What's the present status of the request made by a number of groups to the minister for an accessibility survey which would deal with an attempt to find out the effects of increased tuition fees on accessibility to postsecondary institutions? MR. HORSMAN: That request was made by the Federa­ tion of Alberta Students. I'll be meeting with their execu­ tive later on today and discussing that with them further.

At the present time, we have not made a final decision. In my mind, there are several concerns I want to raise with them as to how such a study might be carried out. I'll be

November 9, 1981 ALBERTA HANSARD 1527 doing that later on today. At the present time, we have not made the determination on the request. Nursing Shortage MR. MANDEVILLE: Mr. Speaker, my question, also to the hon. Minister of Advanced Education and Manpow­ er, is with regard to the shortage of nurses we're facing in the province of Alberta and the problem of getting nurses into the profession. What steps is the Department of Advanced Education and Manpower taking to encourage students to take nursing training in the province of Alberta? MR. HORSMAN: Mr.

Speaker, I think a number of questions relating to the subject of nursing were raised in the last couple of weeks. Those were responded to in part by my colleague the hon. Minister of Hospitals and Medical Care. I should indicate that as hon. members are aware, we have introduced a new committee, called an implementation committee, to deal with many of the recommendations government has received over the past several years with respect to nursing. At the present time, 11 basic nursing education pro­ grams are in existence.

We are now involved in instituting new nursing programs at Grande Prairie Regional Col­ lege and at Keyano College. As a matter of fact, a special warrant was passed just before the session to permit the Grande Prairie program to start its intake of nursing students in 1982, rather than the earlier estimate of 1983. We're bringing that particular program forward.

In a general way, though, I can indicate that quota changes in basic nursing education programs in Alberta have shown an increase over the last year: 8.8 per cent in the degree program, 14.5 per cent in the colleges' pro­ gram, and 10.5 per cent in the hospitals' program, for an increase in quotas of almost 12 per cent in one year, which is a very significant number; along with the in­ crease in refresher programs which, I can indicate to the House, now have attracted 536 students through addi­ tional funding this year.

That is a very significant step forward and, I might add, at much less cost, in terms of students, than training new nurses. In all, we are attract­ ing more students into our nursing programs, and we are attracting back many more through refresher nursing programs. Furthermore, we are proceeding with the im­ plementation of two new schools of nursing for the province of Alberta. MR. MANDEVILLE: A supplementary question. Could the hon. Minister of Hospitals and Medical Care indicate if he has discussed with the committee studying them, the proposals sent in by the Alberta Hospital Association in 1980?

I think some 40 recommendations and proposals on solving the shortage of nurses in the province were sent in to the department in that year. Has the committee made any recommendations on these proposals? MR. RUSSELL: Mr. Speaker, we have department re­ presentation on that committee, and there is ongoing discussion with the AHA. I don't have the list of recommendations in front of me, but I can assure the hon. member that a lot of them were implemented, or will be implemented.

As you know, some of those are the responsibility of the AHA and came about as a matter of the last contract signed with the United Nurses of Alberta. MR. MANDEVILLE: A supplementary question, Mr. Speaker. The minister indicated that to solve some of the shortage in the province of Alberta, they were getting nurses from other provinces. What is the method of preventing our nurses from going to other provinces like B.C., where the salaries are higher? MR. RUSSELL: Mr. Speaker, it's, part of the normal movement within the country. People are always moving from province to province.

As you know, there's a high immigration rate into Alberta at the present time; mar­ ried couples or single people coming here for a variety of reasons. Many of those people are nurses, and every attempt is made to attract them to the work force. The other method by which out-of-province nurses are given job opportunities here is by direct recruitment of individ­ ual hospital boards, either by way of advertising or personal visits by teams of recruiters to other parts of the country. MR. MANDEVILLE: A further supplementary question, Mr. Speaker.

The minister indicated that over $1 billion is going to be spent on new hospitals in the province over the next short period of time. Does the minister antici­ pate there will be enough nurses to staff these hospitals when they're completed? MR. RUSSELL: Mr. Speaker, we're certainly doing everything we can to ensure that the staff is there. I mentioned before in the House that supply of nurses seems to be a cyclical thing in North America. Right now, we're in a cycle of short supply. I don't mean to underes­ timate the severity of the problem by mentioning that.

We're going on with construction of these new facilities with some confidence that the staff will be there, because of the steps we're taking and because of things that will naturally occur. Tuition Fees (continued) MR. NOTLEY: Mr. Speaker, I'd like to direct this ques­ tion to the hon. Minister of Advanced Education and Manpower. It deals with the follow-up question raised by the Member for Olds-Didsbury, with respect to university accessibility.

What position has the government of Alber­ ta taken and, beyond that, what assessment has the federal/provincial task force given to the proposal of the National Union of Students for an all-grants system of student assistance? MR. HORSMAN: Mr. Speaker, that matter is being considered as part of the task force mandate. But until such time as I've concluded my discussions with my col­ leagues in other provinces and the federal government, I'm afraid I just can't answer the question posed by the hon. Member for Spirit River-Fairview. Tuition Fees (continued) MR.

HORSMAN: While I'm on my feet, perhaps I could supplement part of my answer to an earlier question with respect to tuition fee policy. I didn't want to leave the impression that the matter of tuition fees, as part of the overall policy of the government, would not come before the members of this Assembly. Indeed, it will, if it re­ quires amendments to the present legislation which, for

1528 ALBERTA HANSARD November 9, 1981 example, presently has approval of tuition fees in the hands of the Minister of Advanced Education and Manpower as part of the final decision-making process. If amendments to the legislation are required, of course they would be introduced for the Assembly to consider. Fur­ thermore, any budgetary implications for a tuition fee policy would also have to be considered as part of the budgetary considerations when the next budget comes before the Assembly. I didn't want to leave the impres­ sion that the final decision is made by caucus.

Of course it isn't; it's made by this entire Assembly. MR. SPEAKER: The time for the question period has elapsed. But if the House agrees, possibly the hon. Asso­ ciate Minister of Telephones could supplement an answer given earlier in the question period. Extended Flat Rate Calling (continued) DR. WEBBER: Mr. Speaker, I'd like to indicate that of 339 telephone exchanges in Alberta, 262 have the ex­ tended flat rate calling program; 77 do not. However, 21 of those are scheduled for it within the next year and a half, and 56 others will not be getting it.

As for the Redwater case, they do get the program to Edmonton because it is the nearest market centre and falls within the distance of 34 miles, being 33 miles from Edmonton. DR. BUCK: Mr. Speaker, is the minister aware that Fort Saskatchewan is between Redwater and Edmonton? DR. WEBBER: Mr. Speaker, I would indicate that I am well aware of where Redwater is. DR. BUCK: Mr. Speaker, then a supplementary ques­ tion.

Will the minister be able to indicate that at this fall sitting of the Legislature, there will be some change in the ground rules established by AGT, to give the people an opportunity to indicate where they would like to have their extended flat rate dialing calls go? DR. WEBBER: Mr. Speaker, I indicated earlier that AGT was considering extension of the 34-mile limit. However, no consideration is being given to by-passing market centres. ORDERS OF THE DAY head: GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 78 Petroleum Incentives Program Act MR. LEITCH: Mr.

Speaker, I move second reading of Bill No. 78, the Petroleum Incentives Program Act. The prime principle of this Bill is to establish a fund out of which the petroleum incentives program payments will be made to the explorers and developers of conven­ tional oil and natural gas. The need for the fund arises from the September 1, 1981, energy agreement between Alberta and the federal government. Under the terms of that agreement, the province of Alberta agreed to admin­ ister and pay the petroleum incentives program and payments. Mr.

Speaker, there needs to be significant melding of provincial legislation with federal legislation and program in this particular instance, because the federal govern­ ment will determine the Canadian content ratings and control status of each participant or applicant for a payment and, in addition, will determine the size of the payments, but no change can be made in the existing payment determination without the agreement of the province of Alberta, at least insofar as it affects activity on Alberta lands.

The money will be transferred from the General Revenue Fund to the fund created by this Bill, upon the request of the Minister of Energy and Natural Resources, which would contain a forecast of the antici­ pated payments that would need to be made from the fund. I should point out that the legislation is so con­ structed that those payments will be made from the General Revenue Fund before there is a calculation of the 30 per cent non-renewable resource revenue which is transferred to the Alberta Heritage Savings Trust Fund.

Provisions are in the Bill with respect to the obtaining of information, because it will be necessary for the pro­ vincial government to obtain a good deal of technical information as well as information regarding contractual arrangements between the applicants for payments from the fund. The technical information will be needed to determine whether the particular well for which reimbur­ sement in

part is being requested is an exploratory or development well. That will involve an assessment of the geology applicable to that well. In addition, there are rules relating to the contracts and the interest that far- mees may be getting as a result of drilling wells that would qualify for an incentive payment. A judgment has to be made as to whether those contracts are of the usual type within the industry. So a good deal of information would be required from the applicant to enable us to reach decisions on those two critical questions.

Thus, there are provisions in the Bill enabling those administer­ ing the fund to get all the necessary information. Mr. Speaker, a good deal of that information would be regarded by industry participants as being confidential, and it's important to their activity in the exploration development field that that information be retained as confidential by those who need it for purposes of ad­ ministering this fund. For that reason, we have provisions in the Bill protecting and ensuring that confidentiality.

After the Bill was introduced, I noticed some comment outside the House which indicated that those making it felt that that confidentiality related to the payments being made out of the fund. That, of course, is not the case. I do not think there's anything confidential about the payments being made from the fund, either as to the amount or the recipient, although the information we need to determine the amount of the payment would be retained confidentially, subject to review by the Auditor General and for certain other purposes which are pro­ vided for in the Bill. Mr.

Speaker, I don't know that there are any other principles of the Bill that I need cover on the motion for second reading. Of course, there are provisions for penal­ ties in the event of false information being given by an applicant, and there are extensive provisions in the Bill enabling the Alberta government to recover from appli­ cants any overpayments that might have been paid. For example, that could occur if an application were made for an exploratory well which receives a higher PIP grant than an development well and, on the initial review of that application, it was treated as an exploratory well, but

November 9, 1981 ALBERTA HANSARD 1529 subsequent review led to a change in that conclusion and it was then treated as a development well. There would be a need to recover from the applicant any overpayment that may have been made. There are provisions in the Bill whereby the provincial government could make those recoveries, take action against the property involved, and things of that nature. Mr. Speaker, I believe I've covered all the main prin­ ciples in the Bill, and simply conclude by saying that this does arise from our energy agreement of September 1, 1981, and we are moving forward as rapidly as possible.

It is my hope that we would have the fund in place early in the new year and be able to begin making payments out of it. I think it is important from the industry's cash flow position that we get to industry as quickly as possi­ ble those funds to which they are entitled. MR. R. SPEAKER: Mr. Speaker, with regard to this Bill, I'd like to speak first of all in terms of the principle of the energy agreement.

The Premier of this province, along with the Minister of Energy and Natural Re­ sources, came back from Ottawa and said what a great agreement we have between Ottawa and Alberta, and that all is well and all is good. But after we examined that agreement, we found that all was not well and all was not good. We had small oil companies in this province in a very difficult position. What we see here today is a Bill that is an attempt to put a band-aid or some kind of safety or preventative position that prevents loss or disaster in the companies that do remain in Alberta.

We don't know if the Bill really will give incentive to oil companies to come and stay in Alberta or, secondly, to bring back into Alberta all those companies that have gone to the United States. In question period in this Legislature, the Minister of Energy and Natural Resources has admitted there is no guarantee that they will come, or if they do come, the return will be slow. Well, Mr. Speaker, I think that in itself talks about how this government is administering affairs for the peo­ ple of Alberta. They really didn't have a look at the consequences when they reached that agreement.

Now we're trying to patch it up, trying to keep the oil people here, trying to say this is a good deal; some $150 million dollars is going to be available to you. Millions of dollars will be available over the next five years on the basis that they pay a tax. On that basis they can claim, up to a maximum, a certain amount that will supposedly help them stabilize their cash flow in the province of Alberta. Mr. Speaker, there is no guarantee in the Bill before us that that kind of thing is going to happen, no guarantee at all.

I think it's more incumbent upon the minister, when bringing such a piece of legislation in, to justify that kind of thing, to say that the Bill will be effective. We don't know. How do we pass the Bill when we really don't know? Is it adequate? That's the question that's raised with me. Does the minister consider other moves that will have to be made by government to assure ourselves that in this province eventually we will become energy self-sufficient, that we will be able to reach a goal not only for Alberta but all Canada in our responsibility here in Alberta. That question isn't answered.

It's a request saying, here's something we're going to do. We maintain confi­ dentiality, and I guess that sounds fair enough. But we're not sure about accountability, Mr. Speaker. That's one of the concerns we have in terms of the Heritage Savings Trust Fund. As a member of the Legislature, how can I determine whether there's real accountability when all the things are kept behind closed doors, as they are with this government? The more and more they get involved in determining where funds should go, the more and more the doors are closed.

It's nice to have confidentiality to protect the companies, but what about us in the Legisla­ ture? What about the average citizen who is held ac­ countable for these kinds of expenditures? That's not real­ ly talked about in the Bill. I think it's incumbent upon the minister to say, one, what else can be done; two, how can he assure us of accountability? What kind of management documents are in place — we don't know — to assure us that every dollar that goes out into the industry is accounted for?

If this government ever came forward with a program to support the cattlemen of this province, I'm sure their documents, their records, would all be public, available to us in this Legislature. Why not in this situation? Maybe it does do something in terms of the competitive edge. But the more and more we deal with programs of this government, the more and more things we find that are done in secret. How can that be accountable? I think we have to talk about the theme of public business being done in the public so that we really know there is total accountability.

Somewhere in our public system in Alberta there is a weakness that I keep putting my finger on, and the government keeps saying the information is not available. Mr. Speaker, I think that should be of concern here as well. The support for this Bill comes from us on the basis that a bad job was done in the energy agreement; we have to fix it up. We have to try to keep an industry in Alberta, and we're coming in this manner to do it. Certainly, Mr. Speaker, there could be a more positive way to run government. MR. PAHL: Mr. Speaker, I would like to rise in support of Bill 78. I'm somewhat surprised that the hon.

Leader of the Opposition has, I think, totally misunderstood the intent of Bill 78 as being an integral part of the oil agreement with Ottawa. I'm sure the hon. minister will clarify that for him in more detail. But I think members of the Assembly should consider that the option to having the Department of Energy and Natural Resources administer the petroleum incentives program here in Al­ berta, is to have the federal government do it from Ottawa. If the hon. Leader of the Opposition thought about that a little, I'm sure he would prefer that it be administered here in Alberta rather than in Ottawa.

In my view — and I'm sure the minister will clarify — it has nothing to do with the other adjustments that were going to happen as a matter of course in terms of royalty and incentive arrangements, but is an integral part of the agreement between the federal and provincial governments. Mr. Speaker, when the minister makes his

summary comments, I wonder if he might indicate to the Assembly just what level of funding would be applied to this program in its first year. I understand there is a retroac­ tive element to January 1, 1981. In answering that, perhaps he might also indicate whether this would involve an RFD to transfer the funds. In supporting the Bill, I also request some clarification as to whether there is with these dealings a mechanism for confidentiality of compet­ itive information, as there is in the bid system and in the announcement of drilling results. I wonder if he could assure the Assembly that it isn't beyond the capability of the present system to administer this Act without adding

1530 ALBERTA HANSARD November 9, 1981 a lot of staff and a lot of procedures that would prove troublesome. In conclusion, I hope that in the final explanation the hon. Leader of the Opposition will understand more fully the purpose of Bill 78. I urge other members of the Assembly to support Bill 78. MR. SPEAKER: May the hon. minister conclude the debate? HON. MEMBERS: Agreed. MR. LEITCH: Thank you, Mr. Speaker. I really don't know how to begin to respond to the matters raised by the hon. Leader of the Opposition. It's almost laughable.

I guess I could ask this question: I don't know whether he was arguing that we would have been better off under the national energy program or under the agreement. If he would like to make the argument that we should have continued under the national energy program, I'd be very interested to hear that. I say it's a little laughable, Mr. Speaker, because we in this House all remember the position the Leader of the Opposition and his party took on the very things we needed to do to bring about a negotiated agreement.

The thing that was really effective was the production reduc­ tion, and we all know the position of the Leader of the Opposition on that. It's very easy for him to say, oh, it's a bad agreement; I could have done better. Well, the only pieces of evidence we have in this Assembly as to how he would have done it lead to no other conclusion but the fact that we wouldn't have had one. We would have been operating under the national energy program. He asks for a guarantee that this program is going to restore the industry to the level it was before the national energy program.

We said very clearly that the energy agreement was not going to solve all the problems. After it was executed, we said very clearly that we didn't antici­ pate it would bring back from the United States those companies, funds, people, and equipment driven there as a result of the national energy program. If he's asking us to put in place a program that guarantees they would come back, I'd like him to describe it. I'd then like him to justify the expenditure that might be required to bring that about. These are pretty hollow words.

It's very easy to stand up and say, it's a bad agreement and I'd like some guarantees from the minister on this, that, and the other thing. Let's just be realistic. This is not a patch-up of anything, Mr. Speaker. It's a program introduced by the national government and, as part of the energy agreement, we agreed to administer it and pay for it in Alberta. It has no elements of patch-up to it at all. On his comments about accountability, it was this administration that introduced an Auditor General and made him totally independent of government and an­ swerable to and reporting to the Legislative Assembly.

The Auditor General has full access, will check all these things, and make his report to the Assembly. If the hon. Leader of the Opposition wants to say — and I think he should make this speech public. He should say that if you want to apply for a grant, you shall put on the table and make available to him and the Members of the Legisla­ tive Assembly all the information you regard as confiden­ tial. If he wants to take that position, I'd be delighted to debate that with him in public forums, which we will no doubt have the chance to do rather shortly. I'd be de­ lighted to carry that debate publicly, Mr.

Speaker, be­ cause it's clear in my mind that the majority of the public understands that certain pieces of information should be kept confidential. It's done all the time in the Income Tax Act. We have the same question in the Income Tax Act. It's a question of how much money you collect. That judgment is made by people administering that legisla­ tion, and checked by the federal Auditor General. With respect to the comments about the level of fund­ ing for the upcoming year, that's difficult to estimate at this time.

At the moment, we don't have from the federal government an estimate of what expenditures they will have incurred during the year 1980-81. Under the energy agreement, we have agreed to reimburse the federal gov­ ernment for those expenditures. Again, until we've had a little more experience with this program, there's some difficulty in estimating the amount of work that might be done in this particular year. The total estimated funding from January 1, 1981, until the termination of the agree­ ment is $4.3 billion. Finally, Mr.

Speaker, in respect of the number of staff required to administer the program, I think it's going to be very significant. The federal government was thinking in terms of 300 or so people in Calgary to administer the program. We are hopeful it can be done with significantly fewer than that. We are currently endeavoring to do by contract much of the legal and geological work that will need to be done in assessing these projects, as opposed to increasing the number of permanent positions. Mr.

Speaker, I think I have dealt with all the questions raised during the debate on second reading, and urge the Assembly to support the Bill. [Motion carried; Bill 78 read a second time] head: COMMITTEE OF SUPPLY [Mr. Appleby in the Chair] MR. CHAIRMAN: Will the Committee of Supply please come to order. ALBERTA HERITAGE SAVINGS TRUST FUND CAPITAL PROJECTS DIVISION 1982-83 ESTIMATES OF PROPOSED INVESTMENTS Department of Energy and Natural Resources 1 — Alberta Oil Sands Technology and Research Authority MR. SINDLINGER: Mr.

Chairman, last week when we were discussing this vote, some pretty responsible ques­ tions were asked about the Alberta Oil Sands Technology and Research Authority. More specifically, questions were asked about contracts. Recognizing the importance of the questions, the minister undertook the responsibility and obligation to demonstrate to us that in fact contracts were in place covering the questions we posed on that particular day.

To do so, the minister started to go over the AOSTRA-Shell Peace River In-Situ Project Agree­ ment, and spent a considerable amount of time on that particular item, demonstrating to us that he, as well, regarded these as important questions and would like to answer them in the most thorough way possible. However, Mr. Chairman, I note that the minister was unable to conclude that contract and did not get all the way through it. So I would suspect the minister, realizing

November 9, 1981 ALBERTA HANSARD 1531 how important a matter it is, would wish to continue and give us the rest of that contract. The question I now put to the minister is that he now conclude the consideration of the AOSTRA-Shell Peace River In-Situ Project Agreement. MR. LEITCH: Mr. Chairman, I'll consider that invita­ tion, but I think I might deal with some other matters that were raised when this vote was first called. One of those was a question asked by the hon.

Member for Spirit River-Fairview regarding the division of costs in three- way contracts to which AOSTRA, the Research Council, and members of industry might have been parties. I think I said at the time that I didn't believe there were any such three-way contracts but that I would check. I have now been able to do that, and there are no such three-way contracts. The industry has contacts with the Research Council directly, and AOSTRA has contacts directly with the Research Council.

But so far as I have been able to ascertain, there are no contracts to which AOSTRA, the Research Council, and industry participants would all be parties. The hon. member also asked about the contracts or arrangements between university and industry, which I believe are referred to on page 57 of AOSTRA's five-year report, and asked what share of the costs of those proj­ ects was paid by the universities. The universities really do not pay any share of the costs. The arrangement is that AOSTRA pays the salary costs, plus 20 per cent for overhead charges.

I think there's some discussion between the university and AOSTRA as to whether that 20 per cent pays the overhead charges. But apart from that dif­ ference of opinion, the arrangement would be that AOSTRA is paying the university costs. With respect to industry participation, AOSTRA pro­ posed that industry participants pay 5 per cent of the costs. The response from industry was somewhat larger than anticipated. I believe there were 23 participants from industry and, at 5 per cent of the cost, it would lead to an overpayment of the cost by industry.

Subsequent to that participation by industry, I understand it's AOSTRA's intention to have each industry participant pay one twenty-fourth of the cost; AOSTRA would pay one twenty-fourth; and, as I've said, the university, because of that salary and allowance for overhead provision, would not pay any of those costs. There was also the question raised by the . . . MR. NOTLEY: Mr. Chairman, a supplementary ques­ tion to get this clear, so we don't . . . MR. CHAIRMAN: If it's a supplementary question, per­ haps it should await the completion of this answer. MR.

NOTLEY: I believe the minister is going on to another question, Mr. Chairman. I can certainly save it, but I think it might be simpler if we dealt with it question by question and got the supplementaries out of the way, rather than bobbing back and forth. MR. CHAIRMAN: If it's a point of clarification, it would be quite permissible. But if it's another question, I think we have to . . . MR. NOTLEY: No, it has nothing to do with another question. It's a clarification of the minister's response, Mr. Chairman. The minister indicated that the participa­ tion in these university projects . . .

I just want to make sure I have clear in my mind that AOSTRA pays the salary costs and 20 per cent for overhead costs; industry participants, 5 per cent. Is that 5 per cent each, or 5 per cent of the total given project? Now we're talking about one twenty-fourth of the costs. Perhaps the minister could be a little more specific. Let's take an example of a particular project with a given company. Then I'd like to know how that will be broken down. MR. LEITCH: Mr. Chairman, the reason it was one twenty-fourth is that there were 23 industry participants in the project.

They will share the costs equally; they will each pay the same. AOSTRA will pay a share identical to the share paid by one of the industry participants. So they divide the total costs into 24. The 23 industry parti­ cipants would pay twenty-three twenty-fourths of the to­ tal cost; AOSTRA would pay the other twenty-fourth. MR. NOTLEY: Mr. Minister, would that twenty-three twenty-fourths plus the one twenty-fourth then account for the salary costs plus the 20 per cent overhead you've mentioned, or are we talking about different things? MR. LEITCH: Yes, it would pay that, Mr. Chairman.

Of course, there may be additional costs in the project, and they would be divided the same way. The hon. Member for Spirit River-Fairview also asked about an opting-out provision, expressing the concern that a participant in one of the major projects — as I recall, the question referred to major projects such as Peace River. There is a lengthy and complex technology agreement which deals with that matter. I haven't and wouldn't want to express a legal opinion on the provi­ sions of the agreement.

But as I understand them, if they opt out either voluntarily or involuntarily as a result of becoming bankrupt, or for some other reason are unable to continue with the project, they are really entitled to the technology that's been developed to that date. But of course that's no different from the conclusion of the project. At the conclusion of the project, in accordance with the agreement — and I've outlined earlier the basis on which that is done — the participants are entitled to used the technology that has been developed. So I don't regard it as taking the knowledge and running, as expressed by the hon.

Member for Spirit River-Fairview. What we really have is the development of technology either through to the completion of the project or throughout the course of the project. Under the terms and conditions I described earlier, they are free to use that when they leave the project. It doesn't matter at what stage they might leave the project, but obligations are undertaken in the agreements with respect to partici­ pating in the project and provisions as to when they might leave it. MR. NOTLEY: Mr. Chairman, I might ask for a little clarification.

The minister says there are obligations with­ in the contract, including provisions as to when they might leave it. As I understood his answer, they would obtain the information at whatever stage they left it. Are there minimum periods of time, more or less coinciding with budget years? Let's take the example. We won't use a given company, but company X has a cost-shared agreement. After six months, they decide to cease their participation in the project and do something else.

Would they get the information they've obtained jointly with AOSTRA up to that point, or is there some minimum period of time they must be in a project before they are

1532 ALBERTA HANSARD November 9, 1981 eligible to obtain use of whatever information has been developed? MR. LEITCH: Mr. Chairman, I don't recall whether there is a minimum time. In my response, I should have added that there is also provision for the participants to use the technology they brought to the project. There are provisions in the agreement as to how that technology is to be dealt with during the course of the project. Upon a participant leaving the project, they are free to use that technology. I don't recall whether there is a minimum time.

My memory is that they commit to proceed through the project, but there are a variety of reasons why they might leave the project. One of them is going bankrupt or something of that nature. There are extensive provisions dealing with the right to use the technology in that event. As I said, the agreements are lengthy and complex, and I wouldn't want to be in the position of putting legal

interpretations on them. MR. NOTLEY: Mr. Chairman, I appreciate that, but I want to know what protection there would be for the public in terms of projects which are quite costly. As we look at some of these projects, we're talking about many, many millions of dollars. My concern is that we have provisions within the agreement to complete whatever the project may be. I could understand the project being stopped as a result of mutual agreement between AOSTRA and a participat­ ing company. But suppose, for example, that after three years of a five-year project a company just decides to invest its dollars elsewhere.

As I understand the explana­ tion of the minister, it seems to me that we have then just put three years of investment into research which can be used anywhere in the world without any guarantee of completion of the project as far as we're concerned. Again, I can understand there may well be appropriate times when the agreement would have to cease, but surely that would be upon mutual agreement between AOSTRA and the company as opposed to the company choosing not to carry on. I guess that is basically what I was trying to get at in my first question.

What protection do we have so that our public dollars lead both to the beginning and the completion of a project unless there is agreement on the part of AOSTRA? MR. LEITCH: Mr. Chairman, I think the hon. member should appreciate that it's not a one-way street. AOSTRA has the right to use the information or the technology being developed even part way through, that it has to use the technology upon completion of a project; that is, to license it throughout the world to everyone except the participant. The participant is free to use that anyplace in the world without paying a licence or royalty fee.

The participant may leave with the right to use it, but only that participant can use it. If it is a good technology and marketable, AOSTRA has the right to market it throughout the world. So it is not a one-way thing. A participant may leave with something of value that it can use, but AOSTRA has the thing of equal value which it can license throughout the world. MR. NOTLEY: Mr. Chairman, the problem is that when you get into a project — and the Shell project is a case in point. I don't raise that because we have any doubts about Shell completing it; I don't think there is any doubt that they will complete it.

It seems to me that to safe­ guard our public dollars, we don't want to end up with a partially completed project. We put money into some­ thing, and it's of marginal value to AOSTRA if a company simply decides to move elsewhere after two or three years.

We're dealing with large, international com­ panies that have superb research capacity themselves, and it may very well be in their interest to take what they've obtained in a given period of time and transfer it to their centralized research capacity; take what they've got, use that as a base, and then have a procedure or something developed and patented to sell around the world. In the meantime, we are left with whatever period of time we've got in the agreement, but it is left there unless we can find somebody else to take over where that company left off when they decided to cease.

Again, I don't think there's any problem if it's a case of mutual agreement. If after two years of a five-year project, AOSTRA and company X decide that you want to go your way and we go our way, fine. I don't have any quarrel with that at all. It's when the company itself chooses to go elsewhere and take what they have as a base. Sure, we share that base, but we don't share any­ thing else added to it. We just have the base, and we have to go scouting around to find some other company to complete the project, do we not? MR. LEITCH: Not necessarily, Mr. Chairman, because we could complete it ourselves.

If we're in the position where there is something valuable to the company in the sense of using it in its own operations, it is presumably valuable to AOSTRA in the sense of being able to market it to others. Perhaps the hon. member misunderstood me. There are commitments to certain stages in the agreements, and they vary. If they don't perform up to that stage, they're in breach of the contract. I was really talking about various provisions where there are checkpoints, if you like, going to the second or third phases of projects, where participants can make a decision whether to go on.

In addition to that, they always have to make provision for the circumstance where one of the participants be­ comes bankrupt or for other reasons is unable to proceed. They each take what they have at that moment, including AOSTRA. AOSTRA has the choice of continuing on its own, if it wishes, or finding other participants. MR. NOTLEY: In most cases, I think this won't be a problem. In most of the cases the minister has identified, I can't see that there is a likelihood of difficulty.

I can't imagine that Shell, for example, would attempt to rebuild a plant down in Colorado somewhat modelled on the lines of the one adjacent to Peace River. But it seems to me that perhaps in some of the smaller projects, there is a possibility of that research being centralized. The minister has indicated there are checkpoints, and as we reach each of those thresholds the company has either performed or not. But as I understand the explana­ tion by the minister, there is a point where it's possible for AOSTRA and the company to go their separate ways without the agreement of AOSTRA.

Suppose we are get­ ting into some new procedure that would be extremely useful, that would unlock literally hundreds of millions of barrels of oil, and the company decides to leave after working with AOSTRA for three years of a five-year program. We have the rights to those three years; the company has the rights to those three years. But in the remaining two years, while we're scouting around for someone to take up the rights — we're not going to be able to do that overnight; we're going to have to bring in

November 9, 1981 ALBERTA HANSARD 1533 another company that won't have the expertise — the company that has developed the expertise, partially with our dollars, goes on to complete the project. Who has the ultimate right to the patent on the completed project? We would have the rights up to a stage, but that would be of little value in marketing around the world. It would be the completed patent that would be useful in the market place, would it not? MR. LEITCH: Mr.

Chairman, I think the answer to that would depend in part on when the process becomes patentable and whether the key features that made it patentable were done in the joint project, if I may de­ scribe it that way, between the industry participant and AOSTRA or at some other time. I suppose in these cases it's always difficult to determine on what piece of infor­ mation one builds in order to arrive at the result that is patentable. I'm sure all research builds on some knowl­ edge. Hardly any of it, particularly in this area, would be starting from scratch.

But if a patentable process is devel­ oped during the course of the work with AOSTRA, the company would have the right to patent it perhaps if it carried on some additional research. But under the agreement, as I follow it, it would then be entitled to use that patented process, but we'd be entitled to market it. Now you may be into litigation or issues where the company left the project, sometime later developed a patented process, and took the position that the key thing that made it patentable was developed on its own initia­ tive,

whereas the argument AOSTRA might well want to make is that the key thing that made it patentable was developed during the joint operation. There you would simply be into a factual and legal argument as to who did the work, or where the work was done that led to the patentable process. Mr. Chairman, if we've concluded on that item, I would move on to make some further comments in re­ spect of. . . MR. CHAIRMAN: Does the hon. Member for Calgary Buffalo have a point for clarification? MR. SINDLINGER: Yes I do, Mr. Chairman. Thank you. Mr.

Chairman, I believe that's the most important point in dealing with this vote, and that's what the Act is set up to do; that is, the research in regard to oil sands technology and enhanced oil recovery. I have The Oil Sands Technology and Research Authority Act in my hands. Under the purpose of the Act, it's stated that: The purposes of this Act are to provide means whereby (

a) research into the technological methods re­ quired for . . . and there are three subheadings, but essentially they deal with the efficient and economic recovery and processing of crude bitumen and other oil sands products from oil sands deposits, It also goes into research into the technological methods required to ensure an acceptable quality of the environment There are three other subheadings. Essentially, they all deal with research and the knowledge gained from that research, so the question of how that is handled is very crucial to this vote.

All the expenditures we're making here are to acquire more knowledge and information on the tar sands. Another question was asked on this subject three days ago. In my judgment, it raised another point relative to this. The question dealt with the Peace River project, but went on to ask about the reporting mechanism. This is from Shell to AOSTRA during the five-year program. The question was: What is the reporting mechanism for AOSTRA to yourself, sir, as the minister of the department?

Obviously, at some point you have to get back to the economic planning and resource committee, because this committee would have made the recommenda­ tion in the first place. At some point you have to report to us. While it's a five-year project, I can't imagine that there won't be a good deal of prelimi­ nary information. And that's what we're dealing with here: the information developed from these projects.

The person posing the question went on to say that the reason the question was being raised was . . . that there is widespread speculation in the area at the moment, because of conflicting statements that have been made, about whether Shell intends to go beyond the prototype plant and undertake a major project. I think that in terms of planning in the Peace River area, just to underscore the need, we have to have some information as soon as possible. In response to that, the minister went on to say: As to the mechanism for reporting, Mr. Chairman, normally the reports are verbal and involve verbal reports by Dr.

Bowman, or others from AOSTRA, to me or the economic planning and resource devel­ opment committee of cabinet. Mr. Chairman, I'm not too sure that's a satisfactory process for monitoring the information we're getting from these expenditures. It's not inconceivable that the present minister might just say, well, I've had enough of this government business, and decide to resign. If the minister were to do that, where does that leave the government and the Legislative Assembly in regard to the information that's already been developed?

I think there ought to be something more substantial than just verbal reports on the technical information that's been developed to date. In discussing this, I think that the arrangement in regard to technical information developed is a

schedule to the AOSTRA Peace River contract the minister got into earlier, and he has indicated that he'll continue to give us that information after he deals with some of these other questions. So perhaps when we get into that area, when the minister does deal with the technical arrangements on information that's developed, we'll get more insight. But at this point in time, in response to the questions that have just been posed, perhaps the minister might give us more insight in regard to the verbal reporting he gets from the chairman of AOSTRA.

Just what is the mon­ itoring and control procedure for information developed, and how are records of these informal reporting sessions kept? Are there minutes to file, memoranda to file, or things of that nature? What is there to ensure there's continuity once the people in place today have left and new people are here tomorrow? I'm sure AOSTRA will be here tomorrow, but I'm not too sure that all of us as individuals will be here.

It would be a shame if those who will replace us at that particular time have to start and develop the wheel all over again by going back to AOSTRA and saying, well, what have you reported to the minister prior to our now coming into place?

1534 ALBERTA HANSARD November 9, 1981 [Mr. Purdy in the Chair] MR. LEITCH: Mr. Chairman, I think I can deal with those comments and the question raised earlier, which was really this: we want to know how the project is going so that we can make some assessment as to whether a commercial-sized plant is likely to be built there. Mr. Chairman, that will become known only when one of the industry participants decides to proceed with a plant, at which time they will file an application with the Energy Resources Conservation Board to build the plant.

Our experience has been that when that application is made, we have ample lead time to do the planning and put in place the things the government needs to put in place to facilitate the building and operating of one of these proj­ ects. I don't know how, from a report on the progress, one could make a conclusion as to the likelihood of a plant being built, because there are all kinds of other issues that bear on whether a commercial plant will be built, even if the process proves very, very successful. Mr.

Chairman, some of the other questions raised ear­ lier dealt with with whether any major changes had been made in the scope or the costs of the various projects AOSTRA is funding that we've already reviewed. My information is that that is not so. Of course, I have given the committee the information as to the projected costs, the amount that had been expended to the fiscal year ended March 31, 1980, and . . . MR. SINDLINGER: On a point of order.

I think we already established this afternoon the precedent whereby we would ask supplementary questions to the question being dealt with before going onto another subject. That's what I wanted to do: ask a supplementary. I believe the minister was going on to another subject. Could we check with him, please? MR. DEPUTY CHAIRMAN: If that decision was made in committee before I took the Chair, we'll continue that way. MR. SINDLINGER: I believe the minister was going on to another subject area. Is that correct? MR. LEITCH: Yes, Mr. Chairman. MR. DEPUTY CHAIRMAN: If the hon.

Member for Calgary Buffalo has a supplementary, go ahead and pose the supplementary. MR. SINDLINGER: Thank you, Mr. Chairman. The supplementary is in regard to the handling of the infor­ mation developed as a project goes on. I wasn't asking about the completion date for this Peace River one, which is a subject the minister addressed. The question we've been discussing most recently is how we handle the information that's developed as the project goes on. Perhaps the minister might address that subject. From what I can gather from the transcripts, the minis­ ter indicated that he receives verbal reports from Dr.

Bowman from AOSTRA. The point I made was that it's difficult for the people who follow him to have a record of those things if these are just verbal reports. I do understand that the minister will address that in more detail when he reads us the report later on, especially the

schedule dealing with technical information. But at this particular point, the supplementary I am posing is in regard to the monitoring of technological development between the point when the project starts and when it becomes something other than a pilot project. MR. LEITCH: Mr. Chairman, there's a report on each of the projects by AOSTRA in its annual report, which is filed with this Assembly. If the hon. member is saying, do I get detailed technical reports and make a judgment on whether they should continue with the research or not, the answer is, I don't.

The kind of reporting I get is essentially contained in the annual reports filed with the Assembly, which give the status of the project, the work done, and some outline of the work anticipated to be done in the immediate future. Those things are contained in the annual report. In essence, the reports we get are that the projects are proceeding, they are going according to what we contemplated, according to plan, and there is no reason to make any significant changes. Certainly, the annual report contains a good deal of information about the various projects.

Now, if we're talking about getting a technical report and all the assessments made by the researchers, I certain­ ly don't get them. If I did, I wouldn't feel qualified to make a judgment on whether the research project should or shouldn't continue. Clearly, one is going to rely upon the judgment of the people put in place to administer the program. Mr. Chairman, it's probably appropriate for me to make some general comments about research of this nature.

There is always a question that governments, industry, universities, and everyone else who is funding research, face: what level of funding should be provided for research? That is a general policy question that this government faces from time to time. AOSTRA is only one area in which we have to deal with that question. I'd simply point out here that we're talking about a very minute fraction of the total value of the asset that may be producible as a result of this research. You count in the hundreds of billions the revenue flow that may be generated by successful research.

The sum we're talking of here is a minute percentage of that potential revenue flow. Most of the increased revenue flow that may come from successful research would go to the province. If we develop processes that make these plants more econom­ ical, our general policy has been to have in place a royalty regime, a taxation regime, that enables the projects to proceed. Anything over and above that remains to be divided between the provincial and federal governments. The provincial government has a royalty; the federal government has taxation.

Any improvement in the eco­ nomics here will virtually all show up on the bottom line of government. MR. NOTLEY: Mr. Chairman, a supplementary question. MR. LEITCH: I'm not finished in this area, Mr. Chairman. Comments were made earlier, Mr. Chairman — inci­ dentally, I should make one comment in response to the remarks the hon. Member for Calgary Buffalo made on Friday. He's quoted in Hansard as saying that when the minister was asked what the $54 million in this vote was for, his response was, I don't know. Mr.

Chairman, I think a great deal of latitude needs to be given to members of the opposition to put the best possible light they can, from an opposition point of view, on words spoken in or outside the House by members of government. But even giving the hon. Member for Cal­

November 9, 1981 ALBERTA HANSARD 1535 gary Buffalo all that latitude and more, I don't know how he could come to that conclusion from what I said when I was asked about the $54 million. I said I didn't have the detailed breakdown. How the hon. member takes suffi­ cient licence to take that answer and translate it into "I don't know" . . . DR. BUCK: You're getting a little paranoid, Merv. MR. LEITCH: . . . exceeds my capacity, Mr.

Chairman, if I were in opposition and taking all the licence that might be afforded to an opposition member to put the best case, from the opposition point of view, on a state­ ment made by someone speaking on behalf of the gov­ ernment. I think that simply exceeded the bounds. But at the same time, they did raise the question about the commitment . . . MR. R. SPEAKER: Mr. Chairman, on a point of order. The minister may feel a little sensitive about our saying the minister said, I don't know. In Hansard, November 4, 1981, page 1453, the minister had time to consider what the $54 million was.

We have a two-paragraph answer with a number of figures but very little detail about what they are. When I add these figures up — and possibly there's overlap in the numbers — I come up with a number something like $66 million. The minister says, "I'm now able to give that breakdown in round numbers to members of the committee". I'm not sure whether it's not clear in the answer, but I see $66 million, not $54 million. Later on, we got a more detailed answer, but that was after encouragement to the minister.

Our point from this side of the Legislature is that when $54 million is to be invested by this government from the Heritage Savings Trust Fund, then a minister should be right on top of it. The obvious question is: what is the breakdown of the $54 million? That should have been right on the tip of the minister's tongue and presented to us. A document later became available. I asked the minis­ ter to table the document. In one instance — and I don't recall if this is the same one; I stand to be corrected — the minister had only one.

Excellent presentation to the Legislature would have been a copy of all those figures so we'd have had two or three days to look at it. An excel­ lent presentation would have been tabling that document. Mr. Chairman, when the minister is attempting to downgrade the type of questions we are asking, I think it is incumbent upon the minister to remember that the first responsibility lies with the minister to have the answers at his fingertips, on the tip of his tongue, and to be enthusi­ astic about telling us the breakdown. We had to kind of drag it out, and the numbers were not there in the first instance. MR.

LEITCH: Mr. Chairman, I don't know what point of order the hon. Leader of the Opposition was speaking about, but let's be clear about this. I'll give the members of the opposition credit for saying, we're going to filibust­ er on an issue not relevant to the $54 million. A filibuster is frankly frustrating the normal business of the House. So would they please not go on with this: look what I'm doing, which is perfectly normal, and the minister should have the answers. I've gone through AOSTRA estimates in this House on a number of occasions. At no time was that detail asked for. I can say to the hon.

Leader of the Opposition that if he wanted that kind of detail, all he needed to do was ask for it and it would have been provided. But to now make a speech along those lines, Mr. Chairman, in addition to not being a point of order, is quite out of order. To suggest that the minister should have come here with the answers to the kinds of questions that were asked on the opening of this vote is prepost­ erous. [interjections] For example, I was asked to tell how many of the university contracts were with students and staff. I have no objection to the hon.

Leader of the Opposi­ tion or anyone else saying, give me the detailed break­ down. The detailed breakdown is given historically in the annual reports. We could have given an anticipated brea­ kdown of the $54 million for this year. If that's requested, that's no difficulty. We can give that detail, and that's what I said when the question first came up: I didn't have it here; I'd get it. But to translate that into "he doesn't know" seems to me a distortion of very simple, plain, English language. Now, if we've dealt with the point of order, Mr.

Chairman, I might get on with comments I was making when I was interrupted. MR. NOTLEY: If we're going to have a point of order, let's have the point of order. [interjections] MR. DEPUTY CHAIRMAN: Order please. MR. NOTLEY: Just calm down there. The minister has taken the last few minutes and has given us a little diatribe on his

interpretation of the role of a supply committee. I think it's the only

interpretation we'd get in any parliament in the British Commonwealth. If the minister came before a supply committee anywhere else and made the statements we got a moment ago, that when a request is made to break down the $54 million, somehow that is an offensive thing to ask for on this side of the House, it's just absolutely incredible. MR. LEITCH: Mr. Chairman, I never at any time said that was an offensive thing to ask for. I'll ask the hon. member to check Hansard and find where anything was said in my earlier remarks that suggested that was offen­ sive.

I said it was a perfectly appropriate question and, when it was first asked, indicated that we'd get the information. MR. SINDLINGER: Mr. Chairman, I'd like to get up an original point of order. But before I do that, I'm just wondering why, when one member is speaking, another can jump up and interrupt him like that. It seems to me MR. DEPUTY CHAIRMAN: Order please. I think we've dwelt on this subject long enough. The Minister of Energy and Natural Resources was responding to a comment made by the Member for Calgary Buffalo on Friday afternoon about 12:30, when he stated that the minister did not know.

The Minister of Energy and Natural Resources has now outlined to the House that at a later date he outlined the various expenditures for AOSTRA. I think that question has been answered in the House, and we should move on to another subject. MR. NOTLEY: Mr. Chairman, on a point of order. The minister can very well make that comment, but the minis­ ter should well know that when he is asking for supply, any comment he makes is debatable. You cannot simply say: this is the answer; I've given the answer and that's it;

1536 ALBERTA HANSARD November 9, 1981 the rest of you sit down and shut up. The minister has made a statement, and we have every right to raise our concerns about that statement if we disagree with it. The minister says he didn't make the observation "of­ fensive", and that's true. I am willing to say that. But if a minister is coming to this committee and asking for supply, the very first question he should expect — and this is the point the Leader of the Opposition made — is to have that broken down.

In my judgment, to suggest in any way, shape, or form that that kind of question is untoward or inconsistent with our system is just totally wrong. MR. SINDLINGER: On a point of order, Mr. Chair­ man. [interjections] MR. DEPUTY CHAIRMAN: Order please. Has the Member for Calgary Buffalo a point of order? MR. SINDLINGER: Mr. Chairman, the minister has just referred to some remarks I made last Friday, and I would like to have the opportunity to respond to those, if I can have the indulgence of these kind gentlemen here. Mr.

Chairman, the minister has indicated that last Friday when we were discussing this particular vote, I made some comments he doesn't agree with. The com­ ments I was responding to were those in Hansard. The minister was asked essentially what this Alberta Oil Sands Technology and Research Authority vote of $54 million is for; I'm paraphrasing again, and I hope I can take that licence. The minister's response was, "I don't have that breakdown with me". Subsequent to that, at another point in the debate the same question was asked, and the minister's response was, "I don't have that . . . with me".

If "I don't have that breakdown with me", and "I don't have [that] with me tonight" are not an indica­ tion that the minister doesn't know, I don't know what they do mean. [interjections] It's a very logical question, Mr. Chairman. We're given this estimate, the 1982-83 estimates of proposed invest­ ments. When a minister comes before us and says, we want $54 million, it is very reasonable to ask the minister what it is for. We don't just give out $54 million for nothing; at least I hope we don't do that in this Legislature. In describing the project, it's very clear.

It says right at the top that this money supports field work to test in-situ recovery processes, provides financial assistance to Canadian universities for re­ search conducted by students and staff, and finances a number of oil sands programmes at the Alberta Research Council. Now, that's pretty straightforward. I don't think it's un­ reasonable for the opposition to ask how much of that $54 million will go to support field work, how much will go to provide financial assistance to Canadian universi­ ties, and how much will finance the number of oil sands programs at the Alberta Research Council.

Just a few moments ago, the minister said he has come before this Legislature before in regard to AOSTRA and hasn't been asked that kind of detailed question in past years. But I've gone over the AOSTRA things and some of the other transcripts from prior years, and I've looked at the questions that were asked when this group that is over here was over here as well. When the minister got up and read that AOSTRA Peace River contract, I thought he was having a good time over there. It was a kind of cute thing to do.

But I thought he was having a good time because it probably reminded him of the time when he and the others were over here asking the same sort of questions — reasonable, responsible questions. It's not unreasonable to get a response. I do acknowledge that the minister has come back at a subsequent date and said, here are some of these numbers. And they were very worth-while responses. I just wanted to get up on that point of order, Mr. Chairman, in regard to my saying the minister didn't know.

When on two occasions the minister says, I don't have that breakdown with me, and it's a simple straight­ forward question . . . There are not a lot of things in here like there were with the Kananaskis project, where there were several votes and subprogram breakdowns. Just one number here: give us $54 million. Well, the obvious ques­ tion is, what for? MR. R. SPEAKER: Mr. Chairman, on this point of privilege being discussed, I'd just like to raise another item. MR. DEPUTY CHAIRMAN: There is no point of privilege. MR. R. SPEAKER: Point of order. I'd like to quote from the November 2, 1981, Hansard. Mr.

Notley says: Mr. Chairman, could we get the projections, then, for the current year out of the $54 million? What will be the projections for each of these projects this coming year? That's the question at hand. Mr. Leitch says: Mr. Chairman, I don't have that breakdown with me. I'll be able to get it. If that doesn't mean I don't know, I don't know what else it means. Maybe the minister is just a little sensitive about not having his homework done. [interjections] MR. LEITCH: Mr. Chairman, I guess all that fell into what I described as opposition licence. We should be clear on one thing.

I think asking for the breakdown is a perfectly appropriate question. I never made any objec­ tion to it at all, and simply said: I don't have it with me tonight; I'll get it for you when we next come to consider the vote. At the same time that was going on, I did have with me all the numbers about the expenditures that had in fact occurred for each project, all the anticipated costs for each project. That included anticipated costs for a variety of projects for which no commitment has yet been made.

Members will recall that that information was given in considerable detail on the occasion the vote was first called. Mr. Chairman, to suggest that one should have in one's head or in one's pocket on all occasions the numerical breakdown of all these things, when it gets down to dollars and cents, just isn't realistic. I have no difficulty at all about the question and providing the answer. I think it's a perfectly appropriate question. Mr.

Chairman, I think I'll go on and respond to some of the comments made about the fact that initially the legislation provided for a $100 million fund and that we were now in . . . MR. NOTLEY: On a point of clarification. Before we get into a new area, I want to follow up the question the hon. Member for Calgary Buffalo brought forward with re­ spect to the method by which the government appraises the projects. The minister pointed out that he gets verbal reports from Dr. Bowman. Obviously, we're not expect­

November 9, 1981 ALBERTA HANSARD 1537 ing the minister to be in a position to determine whether or not a given project is making progress; it has to be left up to the scientists. But in terms of that process of evaluation, what is the role of the full-time staff of the appraisal panels? Let's use some of these larger projects, for example. When we make that evaluation year by year, it's obviously not Dr. Bowman. He's no more able to make the evaluation on a project as large as the Shell project than the minister is. What is the process used by AOSTRA?

Obviously, it has to be some kind of blending of appraisal panels and full-time staff. MR. LEITCH: Mr. Chairman, I'm not sure I can give from memory the exact processes AOSTRA goes through with respect to all these projects. There are technical advisers to the staff, project technical representatives, and members of the authority, and there are a variety of projects. I would want to check with Dr. Bowman and get a detailed answer to that question. I can't respond to it in detail from memory. MR. NOTLEY: Mr.

Chairman, it would be useful, be­ cause it gets right to the heart of the question the Member for Calgary Buffalo raised. Obviously, we're laymen. We're not in a position to make any judgments, but we have to assure ourselves that we have in place the kind of process that ensures these projects are properly monitored. However, there is provision for appraisal panels, and I notice that there is a heavy reliance on people from the university. I think that makes a good deal of sense.

But in terms of the private sector, what emphasis is placed on supplementing the heavy reliance on university, on the appraisal panels with people from the private sector? MR. LEITCH: Mr. Chairman, I think that's set out in the annual report. On page 16, the membership of the appraisal panels is given. With respect to the university oil sands research evaluation panel, there's Dr. Hepler, from the University of Lethbridge, who is chairman; Dr. Bennion, a petroleum engineer from the University of Calgary; Dr. Krouse, from the University of Calgary; Dr.

Montgomery, a petroleum engineer from the University of Alberta; and Dr. Morgenstern, a petroleum engineer from the University of Alberta. I don't know about the others, but I know that Dr. Morgenstern does a good deal of work outside the university, so his activity is not restricted solely to university activity. On the water treatment panel is Mr. Turner, a petro­ leum engineer from Alberta Oil Sands Technology and Research Authority; Mr. Desborough, a petroleum engi­ neer from Alberta Syncrude Equity; and Dr. Cyr, from the Alberta Oil Sands Technology and Research Authori­ ty.

The scholarship and fellowship selection committee: Dr. Woods, chairman, from the University of Alberta; Dr. Otto, who is a petroleum engineer from the Universi­ ty of Alberta; Dr. Berg, from the University of Calgary; Dr. Hyne, from the University of Calgary; Dr. McCurdy, from the University of Lethbridge; Dr. Wiggins, from the Alberta Oil Sands Technology and Research Authority; and Dr. Gunning, from the Alberta Oil Sands Technolo­ gy and Research Authority. On the patent committee is Dr. Luhning, chairman, a petroleum engineer from the Alberta Oil Sands Technol­ ogy and Research Authority; Ms.

Spady, who's from the Alberta Oil Sands Technology and Research Authority and is their counsel; Mr. Nicholls, also from the Alberta Oil Sands Technology and Research Authority; Mr. Turner and Mr. Carrigy, who are also from the Alberta Oil Sands Technology and Research Authority. On the microbiology evaluation panel is Dr. Cook, who is chairman, from the University of Alberta; Dr. Kaneda, who's from the Alberta Research Council; and Dr. Job- son, from the Alberta Research Council. On enhanced oil recovery, there is Mr. Benn, who is the director of the Petroleum Recovery Institute; Mr.

Hewitt, from Energy Projects International; Mr. Purvis, from the Energy Resources Conservation Board; and Dr. Sigmund, from BRTR Petroleum Consultants Ltd. In addition to that, on page 15 you'll find a list of the consultants to AOSTRA, and the technical advisers to the staff. So, Mr. Chairman, the information that's con­ tained in the annual report indicates the technical advi­ sers to the staff, the project technical representatives, and the members of the appraisal panels. MR. R. SPEAKER: Mr. Chairman, to the minister.

In terms of the members of the appraisal panels, is there any reason why there are no personnel from the private sector areas on any of these panels? I see Dr. Sigmund might be one from the private sector. Is there a reason for none being listed here, or are the people here more accessible to the panel? MR. LEITCH: Well, Mr. Chairman, there are some rep­ resentatives, as is obvious from the membership on the appraisal panels. There are also some industry/university assessments or panels each year. Certainly my informa­ tion is that the private sector provides a good deal of information to AOSTRA.

I suppose there's always an open question as to who you should have on these appraisal panels and on the board of AOSTRA. My judgment is that they have had a very well-qualified group and have gotten important information and input from the private sector, the university community, and various governments, such as the Alberta Oil Sands Equity. MR. DEPUTY CHAIRMAN: Alberta Oil Sands Tech­ nology and Research Authority . . . MR. R. SPEAKER: Mr. Chairman, I thought the minis­ ter had some other questions he was responding to. Has the minister completed his list at this point? MR. LEITCH: No, Mr.

Chairman, but I had sort of given up. I've been interrupted on so many occasions, I wasn't sure the members wanted to hear any further comment on this. I was addressing the question of the level of funding, and pointing out that the Act had initially contemplated a fund of $100 million. I was in the Assembly at the time that legislation was put through. I don't think anyone, certainly for my part, felt that was a final figure. We were embarking on something new, something on which you could make no realistic judgment at that time as to how large might be appropriate for that research activity to grow.

In my comments when this vote was first called, I pointed out there were commitments to that extent in the sense that Executive Council had said to AOSTRA, we were in favor of their making commitments to that total. But that was always subject to the caveat that the funds had to be voted annually by the Legislative Assembly, that we were in no position to make a final commitment on behalf of the Assembly. The votes had to be dealt with

1538 ALBERTA HANSARD November 9, 1981 by the Assembly. The annual report of AOSTRA for the year ended last March 31, comments on that dedication or commitment as being by the Executive Council. The other item I thought I should point out is that at the time this legislation was first put in place, it did not include enhanced recovery projects. Recently, an amend­ ment to the legislation was approved by this Assembly authorizing AOSTRA to go into enhanced recovery. At that time, we had committed a total fund of $75 million.

Again, I don't think there's any way one can tell whether that is an appropriate sum until we get into that activity, examine the projects that come forward, and make an assessment on whether it is worth carrying out that re­ search. But I'd simply stress that the amount involved there, $75 million, is a minute percentage of the potential revenue flow that would come to the province as a result of a successful breakthrough in technology on enhanced recovery. As I mentioned earlier, there is always the difficult question of how much funding should be allocated to research.

In my judgment, AOSTRA is a particularly well-constructed vehicle for this kind of research. Ob­ viously, when one gets into funding this research — whether it be in universities, government, or otherwise — you have to put in place people who advise you on what research should be done. In my experience with AOSTRA, I think we and the people of Alberta have been extremely well served by the quality of advisers who make up the board of AOSTRA and supply information to them.

Unlike most research carried on by governments, we have here an added protection or safeguard, if you like, as to the validity of the research, in that the vast bulk of funds is matched by industry. That is, we're not relying solely on advice from the Alberta Oil Sands Technology and Research Authority as to what research project should be carried on, because the vast bulk of the re­ search projects are funded 50 per cent by industry. So we have a group out there, the whole of the industry, making decisions about what research is worth pursuing and, having made that decision, putting in their funds to pursue it.

Now that is not unique, but it doesn't occur very often in government. Generally in government, the decisions on what research should be undertaken are determined by a government on the basis of advice from experts in the area to the effect that this research is worth while. And you have to cover the whole gamut of issues as to whether it's a duplication of research elsewhere and things of that nature. Frankly, if I were asked today what total level of funding in this area I would recommend, I don't think one can give an answer to that.

In order to reach a reasonable and appropriate decision on that, you're going to have to let matters unfold, follow the development and technology, and examine what's going on in other countries. In short, when this was first put in place, I think everyone involved in the decision at that time understood it was a preliminary decision, that we would be making decisions about the size of the research component as time went by. But from the point of view of the Legisla­ tive Assembly, it is always in the position that no funds flow unless it votes them annually, as is occurring at the moment. MR. R. SPEAKER: Mr.

Chairman, on the point the minister was making. In the forward of the March 31, 1981, annual report, is the comment: An additional $318 million has been dedicated by the Alberta Cabinet to permit the funding of longer term programs extending beyond 1985. In projecting that investment, could the minister indicate if there was a projection of equal instalments, or would that be on top of the $100 million, so by 1985 the total moneys available for investment in terms of research would be $418 million? I think that was the figure the minister gave us last day. Is that estimating so much per year?

Could the minister just indicate the breakdown? I'm not asking about projects, just the type of budgeting that would be going on. MR. LEITCH: Mr. Chairman, I had given that earlier, project by project, totalling $418 million. I indicated that a very large portion of that was committed to projects that had not yet gotten under way. By that I mean legal agreements had not been entered into or projects had not been selected. For example, no money has been commit­ ted or spent under the general heading mining extraction for the dry process scale-up.

A sum of $9.5 million there was uncommitted; none had yet been spent or committed. There were a variety of those in the in situ oil sands projects: an advanced steam process, and $10.1 million was included in that $418 million but uncommitted as of this time. The same is true for an extension of some in situ oil sands projects, because they're contemplating that some of them would involve extensions and had included a $9 million figure for that. But none of it has yet been committed. Without going through these numbers in some detail, I don't know that I could pick out the total.

But a very significant percentage of the $418 million we're referring to is uncommitted. As a matter of fact, I think it is over half. There was $72.5 million in respect to en­ hanced recovery projects which had not been committed. So I think the short answer to the question of the hon. Leader of the Opposition is that that $418 million we were talking about is a figure that Executive Council had approved in principle — that might be the best way to describe it — but that AOSTRA had not yet committed a significant portion of those funds by way of contracts or projects. [Mr. Appleby in the Chair] MR.

SINDLINGER: Mr. Chairman, it has to be ac­ knowledged that it is very difficult to prescribe parame­ ters or boundaries to research. If we knew in advance what the research entailed or what we would get, we more than likely would not be undertaking it in the first place. Nevertheless, it is important to have some boundaries or guidelines for research so those undertaking it will know what those parameters are and how far afield they can go.

In my judgment, the government recognized this when it first set up the Act, in which it said that: The aggregate amount of advances made to the Fund under subsection (3) shall not exceed $100 000 000. At the time the project was announced, I think it was dubbed something like "project energy breakthrough", which was a very apt description because certainly if some new research or technology came out of the re­ search, it would be an energy breakthrough. The reason $100 million was there in the first place was twofold.

First of all, it would give those people who were undertaking the research an idea of how far they could go. It's just like each of us as MLAs knows that in one particular year we're going to get $21,000. When we make decisions each day, we make those decisions bearing in mind that we are going to get only $21,000 for that year. So we can't make

November 9, 1981 ALBERTA HANSARD 1539 decisions that would result in an expenditure of $31,000. Each day of the year, we have a guideline which I could refer to in this particular instance as being a management guideline. The managers of this fund, knowing they would have only $100 million, would select among those projects they think would give the most results, given the limit they have. It's a matter of identifying and ranking various alternatives, priorizing them, and going from there. Ad­ mittedly, as time went on, more projects were identified.

In the judgment of the experts assessing them, it was desirable to undertake more of them, the cost of which would exceed $100 million. That's fine; we can't argue with that. The other aspect of having a guideline of $100 million is not only that it guides the day to day decision-making, but at the end of the term people can sit down and assess and evaluate the effectiveness and efficiency of the pro­ gram over that year. After one year of spending $100 million or, in the case, after spending $100 million on the five-year projects, how effective was the program?

What new technology has been developed from that research? So there's a measure of effectiveness after the five-year program. The other measure is in terms of efficiency. How effi­ cient was the program in meeting those objectives? The efficiency is tabulated in terms of dollars and cents. If there was an initial guideline of $100 million, were the objectives accomplished by expending only $50 million, or were they achieved by expending $150 million. It's a measure of efficiency, and I think that's what we have here as well.

The second thing that's important about this is the question of what the Legislature is committing itself to. That is, are we voting for only $54 million here today; are we voting for another $154 million today? Quite under­ standably, there could be projects in this that we would look at today and say, this is a good project as it stands; however, if we had additional information that said this appropriation isn't simply for this year, it's for an under­ taking which would extend beyond this year as well . . .

So there is a hidden factor as well, which should be brought out in the open; that is, the total cost of the project. In this case, we do know we're not voting on $54 million, because information given to us by the minister indicates that the total projected costs of the programs to the end of 1985 would be $418,700,000. That's the infor­ mation given to us by the minister. So actually we're not voting for just $54 million; we're voting for something much more than that.

If the total projected cost to 1985 is $418,700,000, and if the expenditures to March 31, 1981, were $128,949,000, and the estimates that were voted in '81-82 are $41 million, that's a total of $169,949,000. For this program, total funds are still required. We're going to come back here next year and the year after and vote for another $248,751,000 just for this project. Today we're not being ask to vote on $54 million. Presumably these projects we're undertaking today are worth while. Once we've undertaken them, we won't stop until they're completed.

As far as we can see, this addi­ tional $0.25 billion, almost twice the Energy and Natural Resources total budget on an annual basis, is going to take us to 1985. But we have no assurance that's where it's going to end either. If I remember correctly, the forward of this annual report we just got today, which was referred to just a few moments ago, says: An additional $318 million has been dedicated [to this program] by the Alberta Cabinet to permit the funding of longer term programs extending beyond 1985.

Now if you take the $318 million which has been committed by the cabinet but not yet authorized by the Legislature, plus the $100 million they started with on January 14, 1974, that's $418 million, which is what the minister said. It's fairly close: $418,700,000. On the other hand, if you go