April 15, 1982 ALBERTA HANSARD 583 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Thursday, April 15, 1982 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF VISITORS MR. SCHMID: Mr. Speaker, I would like to introduce to you and to members of this Assembly Her Britannic Majesty's former ambassador to Tunisia and the former British social and economic minister to the United Na­ tions. He's presently representing Great Britain on the Brandt Commission.

We had the pleasure of discussing the interdependence of nations, as well as the trade poten­ tials of the Brandt report during the last little while. He's accompanied by his wife and by Mrs. Jennifer Bocock and Mr. John Bocock, their hosts in Alberta. I ask them to rise to receive the welcome of this Assembly. head: PRESENTING REPORTS BY STANDING AND SELECT COMMITTEES MR. MACK: Mr. Speaker, I'd like to table with the Legislature the report of the Chief Electoral Officer on the Olds-Didsbury by-election held Wednesday, February 17.

All hon. members have received their copies. head: INTRODUCTION OF BILLS Bill 32 Election Finances and Contributions Disclosure Amendment Act, 1982 DR. REID: Mr. Speaker, I request leave to introduce Bill 32, the Election Finances and Contributions Disclosure Amendment Act, 1982. The Bill isn't much longer than its name. It clarifies the position of the constituency association of a member of the Legislature who has no affiliation with a registered party.

It reinserts the provisions for transfer of trust fund moneys in the event of a candidate not running in the next election, and clears up several items of wording. [Leave granted; Bill 32 read a first time] MR. CRAWFORD: Mr. Speaker, I move that Bill No. 32, the Election Finances and Contributions Disclosure Amendment Act, 1982, be placed on the Order Paper under Government Bills and Orders. [Motion carried] Bill Pr. 1 Lethbridge Country Club Amendment Act, 1982 MR. GOGO: Mr. Speaker, I beg leave to introduce Bill Pr. 1, the Lethbridge Country Club Amendment Act, 1982.

The purpose of this Bill is to amend the incorporating Act of the club by removing the limit on the maximum sale of real estate the club may hold and by expanding the power to create memberships for different privileges. [Leave granted; Bill Pr. 1 read a first time] head: TABLING RETURNS AND REPORTS MR. RUSSELL: Mr. Speaker, I beg leave to table two reports required by statute: the 1980-81 annual report of the University of Alberta hospital and the 1980-81 annual report of the Department of Hospitals and Medical Care. MR.

SPEAKER: I'm pleased to be able to table the annual report of the Legislature Library for the year 1981. head: INTRODUCTION OF SPECIAL GUESTS MR. CRAWFORD: Mr. Speaker, I would like to take this opportunity to introduce two classes of students from the Edmonton Parkallen constituency. In the members gallery, we have some 26 grade 6 students from Malmo school, accompanied by Mr. Frizzell, Miss Ho, and Mr. Wiese. In the public gallery are 23 grade 6 students from Belgravia school, with teacher Mr. Knudsen and student teacher Miss Harmsma. Mr.

Speaker, they've had the opportunity of seeing the building today and of having the tour, and are in the galleries now to enjoy question period. I ask that both groups stand and receive the traditional welcome of the Assembly. MR. COOK: Mr. Speaker, I have two groups to intro­ duce this afternoon as well. The first is on behalf of the Hon. Les Young, the MLA for Edmonton Jasper Place. A little earlier this afternoon, Mr. Young met with the group of 16 students from St. Thomas More school in his constituency. He regrets that he isn't here to introduce them himself.

They're in the public gallery, and I'd ask that they rise and receive the warm welcome of the House. Mr. Speaker, it's a particular pleasure for me to intro­ duce to you, and through you to the other members of the Assembly, some 33 students enrolled in the English as a second language program at Queen Elizabeth high school in my constituency of Edmonton Glengarry. They enjoyed a tour, and earlier this afternoon I had a little conversation with them for a few minutes. I know they're looking forward to question period. I ask them to rise now and receive the warm welcome of the Assembly. MR. JOHNSTON: Mr.

Speaker, I'm very pleased to introduce two distinguished academics who are visiting in your gallery today. It's a very great pleasure to introduce Professor Zhu from the World History Institute of Pek­ ing, who is visiting the University of Alberta for a two-month study of the history of Canada. He's accom­ panied by our distinguished China expert, Brian Evans, professor of Chinese history and acting chairman of the department of East Asian languages. Mr. Speaker, you'll note that I do not pretend to have your ability in foreign languages; I will stick strictly to the

584 ALBERTA HANSARD April 15, 1982 English language. [interjections] We do have another expert, I know. I asked Professor Zhu how to translate the Alberta Legislative Assembly, and he gave it to me. I won't repeat it, but he cautioned me very quickly that if you get the wrong inflection, the Alberta Legislative Assembly becomes "a convention of barbers" in Chinese. [laughter] Nonetheless, I'm sure that does not diminish our wel­ come to our guests, and I ask them to stand and receive the normal welcome of our Assembly. head: MINISTERIAL STATEMENTS Office of the Premier MR. LOUGHEED: Mr.

Speaker, in September of 1974 the Alberta government established a royalty and incen­ tive system to encourage the Alberta conventional oil and gas industry. This system worked exceedingly well for a number of years and resulted in successive years of record drilling and activity in the conventional oil and gas industry. On October 28, 1980, the federal government unilater­ ally imposed the national energy program, based on the presumption that energy prices would continue an ever upward trend: that there would be full production from Alberta's oil fields.

The underlying assumptions of Otta­ wa's national energy program have proven to be largely fallacious and inaccurate. Essentially, though, the federal government relied upon their jurisdiction over taxation and pricing of interprovincial trade to single out a partic­ ular industry for special treatment. Most Albertans are aware that this program has damaged a basic industry in the province. The Alberta government, on behalf of the citizens who own the resources, responded vigorously, and Hansard of October 31, 1980, outlined the government's plans.

Dur­ ing the following months, the Alberta government forced major modifications in the pricing and taxation provi­ sions of the national energy program, by curtailing oil production and refusing to negotiate separate oil sands arrangements. As a result of the leverage exercised by the Alberta government, a new pricing and taxation arrangement was entered into by agreement between the Alberta govern­ ment and the federal government on September 1, 1981. There are many advantages for Albertans to this agree­ ment, which I outlined to the Legislature, as recorded in Hansard of October 14, 1981.

In particular, the Septem­ ber 1 agreement substantially increased the price the province would receive for the sale of its depleting oil over the

schedule of prices set forth in the national energy program. In addition, the Ottawa energy program had proposed a tax on the natural gas industry in Alberta upon export to the United States. We have calculated that over the course of the period between the announcement of the national energy program and December 31, 1986, the federal government would have collected over $5 billion if the natural gas export tax had been sustained. By the agreement of September 1, 1981, Alberta forced the elim­ ination of the federal natural gas export tax and relieved the industry of that burden.

It further provided a much better pricing arrangement for new oil, to encourage exploration. It should be noted that at the time of signing the energy agreement of September 1, 1981, we anticipat­ ed that it would take at least 18 months before the vitality in the industry was restored, and that natural gas market access is a key factor required for full recovery of the petroleum industry. Mr.

Speaker, the government of Alberta had been contemplating needed revisions to its royalty system and, as I stated on September 21, 1981, we contemplated other special provisions to assist the industry with its cash-flow problems. Subsequent to September 1, 1981, a series of international and Canadian factors further inhibited the confidence of the conventional oil and gas industry. These events included the deterioration in equity markets in North America and the discouraging aspects of the federal budget of November 12, 1981.

As a result, the government of Alberta concluded that in addition to the matters contemplated, there should be a substantial increase in revenues retained by the conven­ tional oil and gas industry to encourage this recovery. As a result, Mr. Speaker, we announced in Calgary on Tuesday, April 13, 1982, the Alberta oil and gas activity program as the first and a major part of our Alberta economic resurgence plan. I will be filing with the Legis­ lature copies of that Alberta oil and gas activity program, which have been made available to members of the Legislature.

We are very pleased that the response of the leaders of the conventional oil and gas industry, and the related service and supply sectors, to our program has been very positive. We are aware that a number of follow-up steps need to be taken, including market development for both crude oil and natural gas. As a result of the magnitude of the Alberta oil and gas activity plan, a revised financial plan is required for the government of Alberta for the current fiscal year.

The Provincial Treasurer intends to follow this statement with an announcement of such a revised financial plan for the fiscal year ending March 31, 1983. My colleague the Minister of Energy and. Natural Resources and I will be pleased to answer any questions by Members of the Legislative Assembly. I would there­ fore like to file copies of the proposed program with the Assembly. Treasury MR. HYNDMAN: Mr. Speaker, in the budget speech of March 18, 1982, I stated that the oil and gas royalty review then under way would, when completed, result in further adjustments to the 1982-83 resource revenue fore­ casts.

As well, it was noted that special responses to the difficulties faced by the oil and gas servicing sector were being developed. The original financial plan for 1982-83 is revised to reflect the features of the new Alberta oil and gas activity program. Copies of this document will be available for distribution to members. Total budgetary revenues drop by an estimated $1.441 billion to $6.520 billion. Expenditures are now projected at $8.969 billion. This increase of $250 million over the budget estimates results from the new petroleum service industry grant program.

Supplementary estimates will be presented for this and any other additional expenditure requirements that are known at that time. The originally estimated budgetary deficit of $758 mil­ lion increases by an anticipated $1.691 billion, to $2.449 billion. This will eliminate the accumulated budgetary surplus, or net assets of the General Revenue Fund, which stood at $2.026 billion at March 31, 1982, and will leave an estimated net liability of $423 million as at March 31, 1983.

April 15, 1982 ALBERTA HANSARD 585 The non-renewable resource revenue transfers to the Alberta Heritage Savings Trust Fund will be reduced by $306 million because of the Alberta oil and gas activity program. Capital contributions and investment income of the heritage fund in 1982-83 are now estimated at $2.963 billion. Highlights of the effects of the Alberta oil and gas activity program on the 1982-83 financial plan are as follows: 1. The well maintenance and service grant program for the period April 15, 1982, to October 31, 1982, will increase operating expenditures by $250 million in '82-83. 2.

The further enrichment of the royalty tax credit for the period September 1, 1981, to December 31, 1983, combined with the new provision to allow monthly payment of tax credits beginning June 1982, will reduce corporate income tax by an estimated $616 million in 1982-83. The royalty tax credit is a selec­ tive royalty deduction delivered through the income tax system for administrative simplicity. 3. The stimulus provided by the oil and gas activity program, in terms of more jobs and higher incomes, is estimated to increase personal income tax by $40 million.

The resulting increase in industry cash flow is anticipated to raise $100 million more revenue from bonuses and sales of Crown leases. The re­ newed exploration activity is expected to increase the costs of the Alberta petroleum incentive program and the exploratory drilling and geophysical credits by a total of $65 million. 4. The refinements to the royalty system are forecast to reduce crude oil royalties by $664 million and natur­ al gas and by-products royalties by $392 million, from the amounts shown in the budget.

Overall, non-renewable resource revenue is forecast to be $1. 021 billion lower than estimated in the budget, a decline of approximately 16 per cent. 5. The increase in expenditure and the anticipated de­ cline in revenue are projected to reduce interest income of the General Revenue Fund by $150 mil­ lion. Investment income of the heritage fund is lo­ wered by $20 million. Mr.

Speaker, if and when other dimensions of the Alberta economic resurgence plan are developed to stimu­ late further the Alberta economy in light of external and internal economic factors, this revised financial plan may be modified accordingly. head: ORAL QUESTION PERIOD Alberta Oil and Gas Activity Program MR. R. SPEAKER: Mr. Speaker, my question to the Premier is with regard to the discussions with Ottawa prior to the announcement last Tuesday. I wonder if the Premier could advise as to what consultations took place, if any. What was the attitude of Ottawa at that time? MR. LOUGHEED: Mr.

Speaker, there were not consul­ tations, in the sense of our Alberta oil and gas activity program. This is entirely an Alberta initiative, taken to stimulate Alberta-based companies. There have been, and will continue to be, discussions between officials of the Department of Energy and Natural Resources with re­ gard to modifications in the September 1, 1981, agree­ ment. Members of the industry have informed me that it is their intention to make representations to the federal government, to follow the leadership position taken by the Alberta government last Tuesday. MR. R. SPEAKER: Mr.

Speaker, a supplementary ques­ tion. Could the Premier indicate whether any indications have come from Ottawa to make the necessary changes at this time? Are they considering it at the political level, such as Mr. Lalonde or the Prime Minister, or are there no indications that Ottawa will follow suit? MR. LOUGHEED: Mr. Speaker, I believe it's somewhat premature to respond to that question with any degree of clarity. In discussions I've had with industry leaders, it certainly seems to me that they wish to evaluate the actions and initiatives we've taken.

They believe they're positive but, in addition, they wish to use them by way of example and make submissions to the federal government for modifications by the federal government. We told them we'd support them in that endeavor and provide them with any back-up or supporting information, or support them in any other way. I think it will take the industry and the industry associations time to assess what we've done, then gather together their views and make their approaches to the federal government. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion to the Premier. This isn't clear to me at the present time.

The September 1 agreement was an agreement between Ottawa and Alberta. Why was the federal gov­ ernment not consulted prior to the Tuesday announce­ ment, in terms of some type of joint agreement coming out in Alberta, rather than just an Alberta announcement at this time? MR. LOUGHEED: Mr. Speaker, I thought that was clear, for the reasons mentioned in the announcement on the program. But perhaps I could take a minute to attempt to make that clear. First of all, for some time we had been contemplating alterations in our conventional oil and gas royalty system.

I think we've mentioned that in the House; the minister has. It hadn't been fully revised since 1974. We stated — and I mentioned it again in the Legisla­ tive Assembly on October 14, 1981 — that because the revenue-sharing arrangements were made on a global basis, we would be taking some specific measures in addition to the measures of the royalty revisions, and we would be assessing that over a period of months in deciding what they would be.

Subsequent to September 1, unfortunately there has been a series of events of a national and international nature — referred to on page 2 of the announcement of the program — which has brought us to the conclusion that we should substantially enrich and increase the revenue flow to the industry. This is an Alberta initiative to revitalize an Alberta oil and gas industry, in terms of the difficulties that have occurred, a number of them subsequent to September 1.

Perhaps I should just mention them: the very difficult problems of financing, because of the overall collapse of the equity market in North America; the restriction of demand for natural gas on a domestic basis in Alberta; the high servicing costs involved; and, of course, the discouraging features of the federal budget. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. The Premier's comment at a weekend convention — I believe two and a half weeks ago — was to put Ottawa

586 ALBERTA HANSARD April 15, 1982 off the front step. I wonder, is this the format that will be used to put Ottawa off the front step, where we just do it on our own and leave Ottawa out of the agreement? As I understand it, Ottawa could also give incentives to the Alberta industry at this time, by lowering royalties and lowering their take. That's one question. Mr. Speaker, the second question to the Premier . . . MR. SPEAKER: Possibly we could take them one at a time. MR. LOUGHEED: Mr.

Speaker, the reference I made was clearly to the situation with regard to the crude oil marketing position in this country at the moment. It seems to us — and we've said it on a number of occasions — that obviously this program isn't going to do all we hope it will do, if we have a continuation of a shut-in production situation with regard to crude oil.

My view and the expression I made — and I was asked for an example at that time — was clearly that what we should be involved in with the federal government is that, in my judgment, they are in a position of an incompre­ hensible policy: a situation where we're importing oil from overseas. We're sustaining the Canadian dollar with high interest rates and, by doing this, we're aggravating that problem. In that case — and I think very particularly in that case — I was referring to the view that that is an action taken by the federal government that is simply unacceptable to the government of Alberta. MR. R.

SPEAKER: Mr. Speaker, a supplementary ques­ tion. What assurance has the Premier, the Minister of Energy and Natural Resources, or the Provincial Treas­ urer been given that the federal government will not step in, in terms of increased taxation, and take a large portion of this royalty money from the companies it's supposed to help? MR. LOUGHEED: Mr. Speaker, only one aspect of the $5.4 billion is involved in that; that is, the incremental oil revenue tax provision.

That involves an amount of $200 million to $300 million of the total of $5.4 billion which could in any way be potentially skimmed off, if you like, by the federal government. We read

Section 14 of the September 1, 1981, agree­ ment as very clearly putting across the position of the concept of intent. The agreement provides for maximum taxation of the petroleum industry. If we make the moves we made here on April 13, there would be no attempt by the other government involved to skim off, in fact, a portion of those revenues. So in our view, what is in dispute and would very clearly be a breach of the spirit and intent of the April 1 agreement, is that $200 million to $300 million involved in the incremental oil revenue tax. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon.

Premier, if I may. Given the overall reduction in royalties announced on the 13th, has there been any discussion with the larger companies, in particular, with respect to guarantees that the backing off of royalties will in fact mean that that additional cash flow, if you like, will be reinvested in Alberta, as opposed to other parts of the world? MR. LOUGHEED: Mr. Speaker, we spent a great deal of time on that very question; that is, whether we should put any strings or caveats on the funds that are going to be provided to the industry.

Most of the assessment made at this stage is that the flow of funds to the industry is very favorably at balance between the smaller and the larger companies involved. Quite obviously, by the ad­ justment in the old oil royalty system, some of the larger producers are going to have a benefit with regard to lower royalties. The issue of putting strings or fences, if you like, on this particular program was considered. We received a lot of input. The view we received and the conclusion we came to is that that would be a very bad mistake, for a number of reasons.

First of all, we felt and have come to a conclusion that it would be a very poor mistake, because it's just the very approach in the national energy program that is so objectionable, by the oil and gas industry, in itself: the whole concept of the question of strings or grants or programs of that nature. We did make an exception with regard to the one grant program, which I'm sure the hon. members may wish to ask about. We also evaluated the situation in the United States.

We are relatively fortunate that in the United States today, activity is down significantly, and that no longer is nearly as promising an alternative for our industry. With regard to the larger companies, we think the record of 1974 is the best answer of all. We went into that same process in 1974 — I believe the hon. member actual­ ly asked me a very similar question at that time — and we came to the conclusion that we should not do that; we should leave it to the judgment of the investment decision-making process of the private sector. Frankly, I'm confident that they will reinvest in this province.

The reinvestment may have different focusses. For example, it may be reinvestment by some companies in petrochemi­ cals; it may be a reinvestment in terms of heavy oil. I think all of that would be advantageous. But I think interfering with that market place decision would be a mistake for us. Our record of experience from 1974, when we moved in a similar direction, reinforces our view. Granted, there will be an element of reduction of debts but, in every case where that occurs, that streng­ thens the viability of the entity for future activity. So that was the decision we made.

I am quite prepared to say that in total judgment, we believe that's the right way to go and that reinvestment will prove up in this province. This is where they want to be, and they want to be active in this province. MR. NOTLEY: A supplementary question. Given the Premier's answer — and again I'm making reference with respect to the cash flow increases of the larger companies — was there any discussion with these companies, or any linking of the government's announcement of April 13 to perhaps a reassessed position on the Alsands project? MR. LOUGHEED: Mr. Speaker, there was not.

Over the weeks ahead, no doubt there will continue to be discus­ sions with regard to the question of taxation of the Alsands project. Quite obviously, some companies in­ volved have an improved cash-flow position which may or may not adjust their attitude towards oil sands development. I want to add one particular point. When we make comments about large companies and small companies, we should keep in mind two aspects of the activity of the larger companies. They employ a lot of Albertans, and a lot of people in the service and supply business contract with them.

April 15, 1982 ALBERTA HANSARD 587 MR. KESLER: Mr. Speaker, a supplementary question. Will the Premier assure the Assembly that the province will rip up the September 1 energy agreement, which has killed the oil industry in this province, if the federal government taxes the new royalty concessions granted to the oil companies? MR. SPEAKER: The hon. member's question is clearly hypothetical, with the very large "if it ends with. But perhaps there is an element of fact involved that could be dealt with. MR. LOUGHEED: Mr.

Speaker, obviously I would like an opportunity to debate the statement of assumption in the hon. member's question because, as I mentioned in the ministerial statement, there are some very, very signif­ icant benefits to this province in the energy agreement of September 1. In fact, to put it bluntly, we wouldn't be able to do what we are doing today if we hadn't had that energy agreement. That's the fundamental position.

In answer to a question from the Leader of the Opposi­ tion — a similar question now posed by the Member for Olds-Didsbury — I believe I stated that if they tax the benefits we are trying to place in the hands of the industry to stimulate activity, we would consider it a breach of the spirit and intent of the agreement. It's not a significant amount of money overall. But surely there is a principle here, and I think it's a very important principle.

We can't see the logic — I won't use the expression, we can't "conceive" of their doing something — of their putting at risk, with Canada's economic position at the present time, a working relationship with the producing provinces, when we are trying to help economic activity. I know I'm going on at length, Mr. Speaker, but there's another important point I'd like to add. The benefit involved here isn't just a benefit that flows to Alberta. A healthy and active oil and gas industry in Alberta is beneficial to the whole country. MR. KESLER: A supplementary question, Mr. Speaker, and this is not hypothetical.

Will the Premier undertake to refuse to grant any further exploration or production leases to Petro-Canada or any federal Crown corporation until Alberta oil men are given a fair deal by the federal government, and the incremental oil revenue tax is removed? MR. LOUGHEED: Mr. Speaker, I was asked that ques­ tion earlier, and so was the Minister of Energy and Natural Resources. Certainly we don't have such an approach under consideration at the present time. We will have to see how matters evolve. MR. NOTLEY: Mr. Speaker, a supplementary question to either the hon. Premier . . . MR. SPEAKER: The hon.

Member for Calgary Buffalo was trying to get the floor, also the hon. Member for Clover Bar, followed by the hon. Member for Olds- Didsbury. I think we should then go on to another topic. MR. SINDLINGER: Mr. Speaker, could the minister or the Premier please indicate if any estimates of increases in production have been made, as a result of these programs? MR. LOUGHEED: Mr. Speaker, I am puzzled by the hon. member's question. He is referring to production, if I understand him correctly. Perhaps he could advise whether he's referring to crude oil, natural gas, or both, and in what concept of production.

Then I would be happy to try to respond to the question. MR. SINDLINGER: Mr. Speaker, I'm looking for an estimate of the increase in production for light and medium crude oil only, as a result of the implementation of these programs. MR. LEITCH: Mr. Speaker, again, I'm having a little difficulty with the form of the question. If it's new production, new discoveries or activity, that's one area to which the question might relate. But if it's increased production from existing fields, wells, or pools, that is much more a function of the market than it is of the announcement of Tuesday. The hon.

Premier alluded to that in his earlier answers. MR. SINDLINGER: Mr. Speaker, I might ask this ques­ tion: what is the objective of the government, in terms of increasing production of light and medium crude oil? Given that objective, what will the impact be on the life expectancy of reserves of Alberta light and medium crude oil? MR. LEITCH: Mr. Speaker, if we're asking the antici­ pated production lifetime of known pools, wells, and fields, that would require a detailed answer and would be suitable for the Order Paper.

Certainly our objective at the moment is to have a maximum production level for the wells and pools in the province, consistent with sound conservation practices. The restraining factor on that ob­ jective is the limitation on market at the moment. MR. SINDLINGER: Mr. Speaker, quite often we are told, or have been told over the last years, that we have only 10 years of light or medium crude oil left, or we have 100 years, five years, or whatever. What is the govern­ ment's intention with regard to the establishment and maintenance of a reserve ratio for Alberta light and medium crude oil? MR. LEITCH: Mr.

Speaker, when the hon. member says there is a 10-year reserve life — and I'm not sure of the exact number, but it would perhaps be in that order — what we're talking about is the volume of oil that, if we produced it all, would meet Canadian requirements for a certain period of time. Or if we could produce at last year's levels, say, it would all be gone within a 10- or 12-year time frame. But what will really occur is that the production levels from our known pools and fields will gradually reduce, and they will not all be produced within the next 10 years or so.

Some of them will be producing many years into the future but at lesser volumes. To predict precisely what reserves to production ratio we ought to have, would involve forecasts as to what might be discovered by way of new oil, reserves production out of the heavy oil areas, and production out of the oil sands. Mr. Speaker, it is really quite a detailed matter. My suggestion to the hon. member is that we pursue it at some greater length when the department's estimates are before the Assembly. MR. SINDLINGER: A final supplementary please, Mr. Speaker.

Could the government indicate whether it has any intention of allowing the life expectancy of our re­

588 ALBERTA HANSARD April 15, 1982 serves to drop below a 10-year level? Or when that level is approached, will it introduce production controls? MR. LEITCH: Mr. Speaker, we do not have production controls under consideration at the moment. DR. BUCK: Mr. Speaker, a supplementary question to the Minister of Energy and Natural Resources, or to the Premier. In the discussions that took place between the government and the oil industry, can either hon. gentle­ man indicate what consideration was given to the encour­ agement of secondary and tertiary recovery? Was that area looked at? MR. LEITCH: Mr.

Speaker, there is encouragement to secondary recovery in the changes in the oil royalty levels announced last Tuesday. Of course, there is additional encouragement in the provisions of the energy agreement with respect to pricing and taxation levels for enhanced recovery oil. In my view, that incentive would be larger than the royalty reduction announced on Tuesday, al­ though both would be important. Certainly the royalty change would be very significant in ensuring that oil that can be economically recovered, is recovered. DR. BUCK: Mr. Speaker, a further supplementary ques­ tion.

This is not to anticipate the date of the next elec­ tion, but from the discussions with the industry, is the Premier or the Provincial Treasurer able to indicate when the effect of this policy will take place? Is it six months down the road, eight months down the road, or a year down the road? [interjections] When will that effect take place in the industry? MR. NOTLEY: Or in June? MR. LOUGHEED: Mr. Speaker, there are three ele­ ments involved in that. The first aspect of it is the special program we brought in that has a life that concludes on October 31, 1982.

That's the special program to assist the oil and gas servicing industry this summer, as the hon. member is aware. That's a specific program to deal with a situation to avoid a time delay in the decision by the exploration and development sector, and to encourage them to do this work during the course of this summer. It's been well received by that segment of the industry. Mr. Speaker, in answer to the question from the hon.

Member for Clover Bar, as I said on or about September 1, 1981, we felt that the factor to get back to a recovery we thought would be reasonably sustaining in the prov­ ince, in terms of vitality, would be in the neighborhood of about 18 months. As I mentioned earlier, a number of factors since September 1 have discouraged the oil and gas industry. We believe that what we have done with this program has, to a fair degree, overcome the discourage­ ment factor. We also believe that the downturn in the United States, in terms of an alternative choice of invest­ ment, is important.

So we feel fairly optimistic, although one can't measure the degree of recovery that will occur over the course of next winter and next spring, and that is the target when we would like to see a degree of recovery. It may be that only time will tell that the activity factors we saw in the summer of 1980 were perhaps somewhat unrealistic, as a result of the natural gas marketing situation. So perhaps the really important variable, in terms of meeting the recovery dates I've mentioned in this answer, will depend upon the prospects for improved natural gas market sales into the United States.

What we can do, working with the industry, is to improve that market position. I think the degree of encouragement there will be significant. We believe the encouragement is here right now, with regard to oil exploration. MR. NOTLEY: Mr. Speaker, I'd like to direct this ques­ tion to either the Premier or the Minister of Energy and Natural Resources. It's with respect to the question of the natural gas industry and the discussion of the feasibility of a storage facility or natural gas bank.

Is either the Premier or the minister in a position to advise the Assembly where that matter presently stands, subsequent to the statement on page 7, and when we may have some further word on a natural gas bank? MR. LEITCH: Mr. Speaker, the department and the industry are working jointly on a study of a possible natural gas storage facility. I can't give the Assembly a time frame in which that study might be completed. They are examining the technical and economic feasibility of such a facility.

In the portion of the statement the hon. member has drawn attention to, we underlined the fact that we are interested in pursuing that study, and will continue to do that. We are interested in pursuing the possibility of a storage facility. But in our view, in light of the commitments made last Tuesday, unless that study indicates that a storage facility would be of economic benefit to Alberta, we wouldn't be able to proceed with it. Mr. Speaker, certainly there are ways in which such a facility might be of real economic benefit to the people of Alberta.

For example, by establishing a reserve capabili­ ty, it might increase the exportable surplus from the province of Alberta. We might be able to use gas from such a storage facility as peaking gas for the export market. At the moment, my comments are speculative, because a good deal more work needs to be done before one can reach conclusions. MR. NOTLEY: A supplementary question. What as­ sessment has been given by both the department and the industry to a concept of prorationing natural gas, which could be a complementary program to a gas bank.

I might just say that that was a program initiated with respect to oil some years back, during the glut of oil of the 1950s, by the former government. MR. LEITCH: Mr. Speaker, that possibility was raised with me some years ago by some segments of the natural gas industry. I have to say, though, that they have not pressed that proposal. In response to the proposal at the time, I said that we'd certainly keep it in mind as a possible option.

I should say to the hon. member that it's an option that I'm sure this government would only adopt with great reluctance and in extreme circumstances, because such a prorationing program for natural gas does involve a massive increase in administration. It is much more complex and difficult to administer than the comparable program for oil, to which the hon. member refers. In addition to that, it would involve legislation setting aside certain contracts. Again, that's an action this government would only take if it were absolutely clearly of great benefit to the people of Alberta.

So the short answer to the question: as I've always indicated, it is an option. But I would think it should only be seriously considered in very serious circumstances, because of that increase to administration by government

April 15, 1982 ALBERTA HANSARD 589 and because of the setting aside of contracts. In addition, Mr. Speaker, I'm optimistic that if there are additional improvements in the natural gas markets, by way of additional volumes being marketed under exist­ ing permits or new export permits, we will find an appre­ ciable improvement in the natural gas marketing situation. MR. SPEAKER: I'm not sure whether the hon. Leader of the Opposition has a second question, but we have spent a great deal of time on the first one, I think with the tacit consent of all the Assembly.

I suggest that perhaps we might deal briefly with this one, because three more members would like to ask their first questions. We are now very much past the half-way mark of the question period. Perhaps we could come back to the hon. Leader of the Opposition if there's time left. Legislative Assembly Act MR. NOTLEY: Mr. Speaker, I'd like to direct this ques­ tion to the hon. Associate Minister of Telephones, with respect to his responsibility for health and social service professions and occupations.

Is the minister in a position to advise the Assembly whether or not, during the month of March, he convened a meeting or was present at a meeting at which a proposal for legislation pertaining to physiotherapists, represented by the Alberta Association of Chartered Physiotherapists, was discussed? DR. WEBBER: Mr. Speaker, the short answer is yes.

The longer answer is that when I assumed the responsibil­ ities for the legislation for the health and social service occupations and professions, along with the Minister of Social Services and Community Health I met with repre­ sentatives from some 20 to 30 groups, and made the commitment at that time to meet with each of them. Starting about September 14, 1981, I believe, until March 29, I completed some 27 to 28 meetings. The meeting on March 29 was with the Association of Chartered Physio­ therapists of Alberta. MR. NOTLEY: Mr. Speaker, a supplementary question.

Is the minister in a position to advise the Assembly whether the hon. Member for Edmonton Whitemud was present at that meeting or any other meeting at which proposals for legislation were discussed? DR. WEBBER: Mr. Speaker, in the early weeks of December 1981, through my office to the office of the president of the Association of Chartered Physiothera­ pists, Ms. Marian Briggs, I initiated a request for a meeting with the association, to discuss legislation or any concerns they would have with regard to legislation that might be coming up in the future. We set a meeting for March 29.

Before that particular meeting, the president of that association indicated who would be in attendance, from their perspective: Marian Briggs herself, plus the vice- president of the association, to be accompanied by legal counsel Mr. Peter Knaak; and from my office, my execu­ tive assistant and me, together with legal counsel Mr. David Elliot, along with the Member for Calgary North West in her duties as chairman of the caucus committee on social services and community health. MR. NOTLEY: A supplementary question. Is the minis­ ter able to recollect for the Assembly whether any ques­ tions were asked of the hon.

Member for Edmonton Whitemud, with regard to any proposals for legislation? DR. WEBBER: Mr. Speaker, during the course of the meetings with different health and occupational groups, we discussed generally any proposed legislation the groups might have. At this particular meeting on March 29, we had an excellent discussion with representation from the chartered physiotherapists. Beyond that, I don't think I could add anything. We discussed some changes to their legislation they would like to see developed. It was generally an excellent meeting. MR. NOTLEY: A supplementary question.

Is the minis­ ter in a position to recall for the Legislature whether during the course of that meeting any any questions were asked of the hon. Member for Edmonton Whitemud, with respect to any proposal for proposed legislation? DR. WEBBER: Mr. Speaker, as I mentioned before, the president of the association indicated that in attendance would be herself, the vice-president, and their legal coun­ sel Mr. Knaak. In the course of the meeting, as I said, we discussed their proposed requests for changes in legisla­ tion. That's about all I can add, Mr. Speaker. It was a general discussion of the legislation.

In my view, the hon. member referred to was acting as legal counsel for the association, and behaved accordingly. MR. NOTLEY: Mr. Speaker, a supplementary question. During the course of this meeting, did the minister give any consideration to the provisions of sections 43 and 44 of the Legislative Assembly Act, with respect to the obligations of members of the Assembly? DR. WEBBER: I'm not sure I got the full impact of the question, Mr. Speaker. I would appreciate it if the hon. member would repeat it. MR. NOTLEY: Mr.

Speaker, during the course of that meeting at which, according to the minister's answer, proposed legislation was in fact discussed, was any con­ sideration given by the minister — and I'm not talking about the hon. member but the minister — with respect to the provisions of

Section 44(

c) of the Legislative Assembly Act? DR. WEBBER: I'll just have to repeat myself, Mr. Speaker. We generally discussed the proposed changes to the legislation that the association wished. Beyond that, I think it would be inappropriate for me to say anything in addition. MR. KESLER: A supplementary question, Mr. Speaker. Could the hon. minister table in the House a record of the presentation by the hon. Member for Edmonton Whitemud? DR. WEBBER: Mr. Speaker, the hon. Member for Olds- Didsbury is incorrect when he indicates a "presentation" by the hon. Member for Edmonton Whitemud.

I met with the Association of Chartered Physiotherapists: the president, vice-president, and their legal counsel. The presentation was from that particular association. With regard to tabling any aspects of that meeting, I don't think that would be appropriate.

590 ALBERTA HANSARD April 15, 1982 MR. NOTLEY: Mr. Speaker, a supplementary question. As frequently is the case when talking about correspond­ ence from other groups, would the minister consult with the organization in question and, should the organization agree, would the minister be prepared to table in the Legislative Assembly all correspondence, not only from the organization but from the legal counsel representing that organization? DR. WEBBER: Mr. Speaker, certainly I can consider it further. I don't believe it would be appropriate to do that, but certainly I can take it under further consideration. MR.

KESLER: A supplementary question. Would the hon. Attorney General undertake to provide ethical guidelines for both ministers and members, so the name of the Legislature is not put into dispute by future actions of members of cabinet and members of the Assembly who are uncertain about their responsibilities to the people of Alberta? MR. CRAWFORD: Mr. Speaker, I don't know what uncertainties members of the Assembly may be operating under, with regard to provisions of the Legislative As­ sembly Act.

I would suggest to the hon. member that if he has some amendments to the legislation to propose, he undertake that in the usual way. MR. NOTLEY: A supplementary question to either the hon. Premier or the hon. Attorney General. Could either hon. gentleman advise the Assembly whether either gen­ tleman had discussions with the hon. Member for Ed­ monton Whitemud, concerning the provisions of

Section 44 of the Legislative Assembly Act and the meeting that took place on March 29, as reported in this House by the hon. Associate Minister of Telephones? MR. CRAWFORD: Mr. Speaker, I'm not sure if the hon. member is asking me whether in advance of March 29, to be blunt, I provided gratuitous legal advice to any member, or whether he is asking if I've had some discus­ sion about that

section since March 29. If it's the latter, the answer is yes. MR. NOTLEY: Mr. Speaker, a supplementary question. What consideration was given by the hon. Attorney General and the government of Alberta, with respect to the provisions of

Section 44 and the implications of the meeting that occurred on March 29, specifically as it relates to

Section 44 of the Legislative Assembly Act? MR. CRAWFORD: Mr. Speaker, I think the first thing I should point out is that the government itself would have no views or considerations in regard to that

section of the Legislative Assembly Act and the circumstances now under discussion. As I see it, what is involved is a question which potentially involves — if that is the way it is ultimately made to appear by anyone — a matter for a member. Metrication MR. ZAOZIRNY: Mr. Speaker, my question is to the hon. Minister of Consumer and Corporate Affairs. Can the minister advise the Assembly whether his department is involved in any manner whatsoever with the prosecu­ tion commenced in the city of Calgary against Trans Canada Broadloom, for advertising carpeting using the imperial measure? MR.

SPEAKER: Unless, by some very surprising coinci­ dence, the hon. minister might have the answer to that, it would seem that that is a question of some detail which might well be placed on the Order Paper. MR. KOZIAK: Mr. Speaker, perhaps I could respond in a general way, without lessening the element of surprise. The question of weights and measures is not within the responsibility of the provincial Consumer and Corporate Affairs Department, but is a matter of concern for the federal body. My response would be that there are days when I wish the federal and provincial departments did not share the same name.

Not only does it provide for confusion, but lack of good judgment on the federal level can sometimes reflect on the provincial Consumer and Corporate Affairs Department. MR. ZAOZIRNY: Just one short supplementary, Mr. Speaker. Could the minister then advise whether the government is giving any consideration to making repre­ sentations to the federal government urging that a dual system of metric and imperial measures be permitted in Canada, rather than a metric only system? MR. KOZIAK: Mr. Speaker, that's a very interesting suggestion.

I believe we will have the opportunity to discuss that during the course of debate of the motion on the Order Paper by the hon. Member for Camrose, if it has not already been dealt with. MR. SPEAKER: The hon. Member for Olds-Didsbury doesn't wish to proceed with his question at the moment. ORDERS OF THE DAY MRS. CRIPPS: Mr. Speaker, I wish to rise on a point of privilege. On page 539 of Hansard, in debate on a motion last Tuesday, I indicated that "Pembina Separators pro­ cess an average of 16,000 barrels a year . . .". That should be 16,000 cubic metres. The mistake is substantial.

Since there are 6.25 barrels in a cubic metre, it's almost 100,000 barrels a year. I want to make that correction.* MR. HORSMAN: Mr. Speaker, I move that questions 127 and 128, and motions for returns 120 and 121, stand and retain their places on the Order Paper. [Motion carried] head: WRITTEN QUESTIONS Mr. Notley asked the government the following questions: 122.

What was the total amount of income tax revenues col­ lected by the government of Alberta from Alberta's manufacturing industries, as defined by the Bureau of Statistics, excluding the petrochemical sector, for each year from 1971 to 1980 inclusive and for 1981, if available? 123. What was the total value of corporate profits attributable to Alberta's manufacturing industries, as defined by the *See Hansard, April 6, 1982, left column, paragraph 2

April 15, 1982 ALBERTA HANSARD 591 Bureau of Statistics, excluding the petrochemical sector, for each year from 1971 to 1980 inclusive and for 1981, if available? 124. What was the total value of corporate profits attributable to the petrochemical industry in Alberta, as defined by the Bureau of Statistics, for each year from 1971 to 1980 inclusive and for 1981, if available? 125.

What was the total amount of income tax revenues col­ lected by the government of Alberta from corporations with oil, both conventional and non-conventional, or na­ tural gas production in Alberta, for each year from 1971 to 1980 inclusive and for 1981, if available? 126. What was the total amount of income tax revenues col­ lected by the government of Alberta from the petrochemi­ cal industry in Alberta, as defined by the Bureau of Statistics, for each year from 1971 to 1980 inclusive and for 1981, if available? MR. HYNDMAN: Mr.

Speaker, we agree to respond in future to questions 122 to 126 inclusive, but I want to put on the record now the fact that the answers to these five questions will not be available in the exact form request­ ed. Statistics Canada and the Alberta Bureau of Statistics provide information pertaining to the taxable income of corporations, the number of employees in a given manu­ facturing sector, and the value of shipments from that sector, but not information regarding income tax or corporate profits in the specific industry sectors men­ tioned in the questions.

As well, Statistics Canada and the Alberta Bureau of Statistics provide information on the basis of each corporation being categorized in a single industrial classification, whether or not it's engaged in a variety of sub-categories of industrial activity. So, subject to these caveats, responses to those questions will be provided. MR. SPEAKER: I suppose we have what we might call a conditional acceptance of the questions by the govern­ ment. If the questions were accepted as they stand, of course that acceptance would constitute them into orders for returns under the Standing Orders.

I'm not sure what a conditional acceptance does to that, but perhaps it won't be necessary to deal with that. DR. BUCK: Mr. Speaker, on a point of order. A letter has been circulated to members. I would like to know if this is of any concern to the House, or if it's just been brought to us. It's the hon. Member for Edmonton Whitemud. I just want to know if we're supposed to look at this or act on it, or what we're supposed to do with it. MR. SPEAKER: The copies have come from me.

I think it's customary when notice is given of a request for an emergency debate or of the possibility of raising a point of privilege, that notice is shared generally among the members of the Assembly. More than anything else, I sensed when I arrived this afternoon that perhaps notice had not been given, and so I shared it in the usual way. That's all I have to say about it. The fact that a member gives notice two hours ahead of time that he wishes to move for an emergency debate doesn't oblige him to proceed with that.

I assume the same thing applies to a notice of possible intention of raising a point of privilege. DR. BUCK: On a point of order, Mr. Speaker, just some clarification in case the occasion arises for other members of the Assembly. My understanding was that a point of personal privilege is to be raised at the first opportunity the House sits. Am I incorrect in that assumption? MR. SPEAKER: Of course the standing order, as well as parliamentary practice, speaks for itself. But to deal with a question of that kind without any facts before the House just can't be done. MR. R. SPEAKER: Mr.

Speaker, on a further point of order. One of my concerns about the distribution of material with regard to a point of privilege, was raised last fall. I understand that in your capacity as Speaker, you've done that again. According to our Standing Orders, there's no request for the Speaker to do that. As a member, I feel that if that practice continues, any information that goes to your office would be very minimal, not supportive as it was in an earlier time. I'd like to know from you, Mr.

Speaker, whether or not it is your intent to distribute all material we provide to you during the time we raise a point of personal privilege in the Legislature. If it is, that will certainly change the actions of the members of this Legislature, and will certainly limit the kinds of material that will come to your office. MR. SPEAKER: I'm not really terrified of the possibility of having less material come to the office. I also suggest that the hon. Leader of the Opposition needn't have any misgivings about ordinary material coming to the office being published.

But when an official notice is given to me in my capacity as Speaker, and I said that last fall, it seems to me that I'm very much in the same position as, for example, the clerk of the court when he receives a statement of claim, an originating notice, or something of that kind: public, official notice is given to me, not private notice, which wouldn't be any notice at all and would not comply with the Standing Orders; I'd have to treat it as being confidential.

If members wish to give me notice of something they wish to do, whatever it may be, and they want to have it kept confidential, I'll keep it confidential. But if it's a notice given under the Standing Orders — in other words, given to me officially in my capacity as Speaker — then that certainly is not confidential, unless hon. mem­ bers wish to consider a possible amendment of the Stand­ ing Orders that would say that that kind of thing would be confidential unless and until raised in the House.

I know we had this point raised and debated at some considerable length last fall, but I'm being consistent exactly with what I did last fall. It's an official notice. If it isn't, then of course I'll treat it otherwise. The requirement for notice in a case of this kind is pretty serious and fairly strict. I'm sure hon. members have a great deal of regard for what happens in the Parliament of the United Kingdom.

If you'll refer to Sir Erskine May, the outstanding authority on parliamentary procedure in the Commonwealth, you'll find that a notice of a complaint or possibly a point of privilege against a member may not be raised in the Assembly without giving the member against whom it is being raised notice of the intention to do that, which is another indication that that sort of thing is not confidential. In fact, the rule in the United Kingdom is so strict — and this is where we had all the fuss last fall — that if a member against whom a complaint is being made is not in the House, that

592 ALBERTA HANSARD April 15, 1982 complaint may not be proceeded with and, under certain circumstances, the House may order the attendance of the member in the House so that the complaint may be dealt with. So there's the situation. MR. R. SPEAKER: Mr. Speaker, for further clarifica­ tion for the future. The notice we as members of the Legislature give would be made public, or provided for members of the Legislature. Along with that, Mr. Speak­ er, you're saying that information which may be supplied to you as supporting evidence should be pointed out as being confidential and for your eyes only.

That kind of evidence would not be presented openly and publicly to members in the Legislature. Is that what you're saying in your ruling? MR. SPEAKER: I was discussing the notice. I'm sorry that we're cutting into private members' time. However, this is an important point. As I understand it, the hon. Leader of the Opposition is now dealing with supporting material that may accom­ pany a notice. Last fall, that consisted of some 30-odd pages. I tried to make that available.

In passing, I should say that the photocopy machine seems to get indigestion over points of privilege, because it broke down today and it also broke down last fall when I tried to get copies made. In any case, if the supporting material is given with the notice, I feel that it's part of the notice and I must share it with members of the Assembly.

If it is not shared with members of the Assembly and is, you might say, sprung on them when the notice of the point of privilege or the request for emergency debate is being raised, obviously that makes it difficult to deal with the point when it comes up, because it takes unfair advantage of members who have not had an opportunity to assess the supporting material. Again in that regard, I'm being perfectly consistent with what I did last fall.

I can also recall at least one occasion in the past when an hon. member gave me two hours' notice of a proposal to move for emergency de­ bate, something having to do with housing. I immediately shared that notice with other members of the Assembly — the House leaders on both sides at least — because when it comes up in the House and is discussed, it seems less than fair that hon. members shouldn't have had an opportunity to prepare themselves to consider the ques­ tion of privilege or the notice for emergency debate. If the Assembly wishes to change its Standing Orders in that regard, I'm perfectly content.

But it is going to make it more difficult to deal with those things summari­ ly, promptly, or expeditiously, because something will be brought in at the last minute of which other members are not apprized and, as I say, they would not be, in all fairness, in a position to prepare themselves to take

part in the discussion. So it's simply a matter of practical fairness, that's all. DR. BUCK: Mr. Speaker, on the point of order. Either you operate within the rules of the Assembly as laid down by the Assembly, or else we amend those rules. The rule is very clear. It says: after giving a written notice [during] a brief state­ ment of the question to Mr. Speaker at least one hour before the opening of the sitting . . . It doesn't say anything about notice to other members. You are making that

interpretation, Mr. Speaker. Either we amend the rules, or we don't have to do that. I raised that point initially, so that we could clarify that. MR. R. SPEAKER: He's also making a judgment. MR. SINDLINGER: Mr. Speaker, I too would like to ask for further clarification, please, because in regard to MR. SPEAKER: Possibly we're going to have confusion if we don't deal first of all with the point raised by the hon. Member for Clover Bar. There is nothing in the rules concerning giving or not giving this information to other hon. members. I agree one hundred per cent with the hon.

Member of Clover Bar that this is a decision which, in this particular instance, I'm making myself, and I take full responsibility for it. But I'm trying to explain that it is based on good parliamentary common sense. If you take stock of what happens in the United Kingdom House, it's also based on good, practical, parliamentary precedent. MR. SINDLINGER: Mr. Speaker, the reason I too am asking for clarification again is in regard to Standing Order 14(2)(b). According to this notice we've received, I understand that condition has been met.

But it then goes on to say that once that notice has been given, after attention has been called to the alleged breach of privi­ lege, there should be an explanation of the matter. I presume that explanation was made to the Speaker. But Standing Order 14 also goes on to indicate that there may be some debate:

(4) Mr. Speaker may allow such debate as he thinks appropriate in order to satisfy himself whether a prima facie case of breach of privilege has taken place . . . I have two questions. First, has the Speaker decided that a prima facie case of breach of privilege has taken place? Second, if that's the case, when is the next step? When will it come before the Legislative Assembly? Because it seems to me that what has happened here is that the Speaker has decided that there is, in fact, a breach of privilege. If that is the case, it should go on to the next step. MR. KING: Mr.

Speaker, speaking to the point of order, of which there now appear to be two, I'd like to make these comments. It lies always with the individual member as to whether or not he shall raise a point of privilege, and 14(2) says: "A member wishing to raise a question of privilege . . ." With the advancement of the rules, fortunately or unfor­ tunately, we have created the situation in which certain things must be done prior to the members' coming into the Assembly.

But it must be left with the individual member, right up to the time that Orders of the Day are called, whether or not he will raise the question of privilege. To respond first to the comment of the hon. Member for Calgary Buffalo, no question of privilege is before the House now, because the hon. member from whom that letter came has not raised a question of privilege. There is no judgment to be made by the Speaker about whether there is a prima facie case of privilege.

Going to the first point, which purports to be about the circulation of this notice, I can only ask that we try to restrict our discussion of questions of order to those Standing Orders that we believe have been breached. I

April 15, 1982 ALBERTA HANSARD 593 think that would probably be conducive to better discus­ sion in all matters of privilege before the House. Mr. Speaker, with respect, I would argue that in Standing Order 14, there is no prohibition against circulation by Mr. Speaker of such notices of intention. The Standing Orders, precedent, and tradition of the House clearly leave with Mr. Speaker discretion on all matters about which the Standing Orders are silent. Since there is not a prohibition, Mr. Speaker, my argument to you would be that you are free to exercise discretion in the matter, which I judge you have done.

MR. R. SPEAKER: Mr. Speaker, I don't argue with what the hon. Minister of Education has said. The other point I would like clarified by you is that once an hon. member meets the one-hour requirement and notice by one sheet of paper, which I think will be the normal route used from now on, the member may rise in his place in that afternoon session and raise the point of privilege without any prohibition or stoppage by the Speaker. Is that an accurate assessment of our current situation? MR.

SPEAKER: Possibly I'm going beyond what a Speaker should be doing in regard to that question, because it has been well settled in parliamentary tradition and practice for a long time that a Speaker doesn't make rulings in regard to matters that are not actually before the House. However, in view of the apparent difficulty or doubt in regard to that application of Standing Orders, I think it is fair to say that I'm simply sharing the notice, as I said in the beginning. If I'm told that this is confiden­ tial, then it's my view that that's not an official notice.

It can't be confidential and an official notice at the same time. I've never heard of a document . . . If I'm given notice, it would seem to me that in fairness it's my duty to share it, so that if and when the point is raised it can be dealt with properly. However, if a member wishes to withdraw the notice, I assume he's entitled to do that before the House sits. In that event, I would have to treat it as withdrawn. I don't know what effect that would have, but certainly it would indicate that he wasn't going to pro­ ceed.

I realize there are differences of opinion about it, but my view of it simply is that I have received an official document in compliance with the Standing Orders, not a private communication between a member and me, and therefore I'm treating it as an official document and not as a private communication. MR. R. SPEAKER: Mr. Speaker, on the point of order. I don't think you quite answered my question. According to

Section 14(2)(b), Mr. Speaker is given one hour's notice. Upon giving that notice, as was done today — or may be done the very same way in other circumstances — which I accept, will the Speaker allow that point of privilege to be raised that afternoon? And are there any circumstances where the Speaker, yourself in office, would prevent that point of privilege being raised today or in future days of this Legislature? MR. SPEAKER: It depends on what the hon. member means by raised. Once notice has been given, which is a prerequisite, and the member gets up and states that he has a point of privilege . . . MR. R.

SPEAKER: He may proceed. MR. SPEAKER: . . . then it has been raised. Whether he proceeds or not, as the hon. member knows, there is discretion in the Speaker with regard to debate. In the exercise of that discretion, I'm hoping the debate will be fair. I realize that the hon. leader has in the back of his mind what occurred last fall, and it's exactly the same situation here.

The question is whether the debate is going to be fair, or whether we're going to have some people who are sort of in on the secret and can make remarks about it, and others who have to sit mum, wondering what's happening or what it's all about. In that event, it would seem to me that you couldn't proceed with the point of privilege. You could agree that it was raised, and that would stop the running of time, and that's what happened last fall.

Incidentally, the appeal from that ruling was not an appeal from the ruling at all, because the ruling was not that the point could not be raised, but was simply that it had to be postponed. That was all. That was never appealed. However, to come back to the present situation — and I mentioned last fall only because I realized that's what the hon. leader has in mind.

If we're going to have secret notices of points of privilege and possibly even of a motion for an emergency debate — and that could well be done if hon. members wished to amend the Standing Orders in that way — then in exercising, as I must, the responsibility in regard to the debate, I would probably have to say, unless it were a very simple, open-and-shut point: the matter has been raised; in fairness to hon. members, we'll distribute the material first so they can prepare themselves, and we'll hear the debate later in the day or on another day.

That's exactly what I said last fall, in addition to which of course the member against whom the complaint was being made had not had any notice and wasn't in the Assembly. MR. SINDLINGER: Mr. Speaker, again, for clarifica­ tion of 12(2) of Standing Orders, have you then ruled pursuant to

Section 14(5)(

a) and (b)? MR. SPEAKER: I'm not aware that I've really made a ruling. An analysis of what I've said might indicate otherwise. I've simply indicated what I think the proper practice would be, and the practice I would propose to follow, subject to other directions from the Assembly. MR. SINDLINGER: Mr. Speaker, the reason I'm asking is that until you've acted pursuant to 14(5)(

a) and (b), a member is precluded from taking further action. So that has to be clarified prior to a member or the Legislative Assembly taking further action. I think that's why we have to make a decision here right now. MR. KING: Mr. Speaker, I believe the situation is this: the rules provide for you to make a ruling on whether a prima facie case of privilege has been made. But such a ruling by Mr. Speaker can only be made when a question of privilege has actually been raised in this House by a member. And although notice was given of an intention to do that, it did not subsequently actually happen.

There is no question of privilege before the House at this time, and therefore there is no question of privilege upon which the Speaker can rule as to whether a prima facie case exists. If I may say, Mr. Speaker, I'm not sure that a point was ever raised which required a ruling from you. I believe that if one were raised, that ruling will be found in

594 ALBERTA HANSARD April 15, 1982 the comments already made. There is not to be debate on the ruling of Mr. Speaker after it has been made, except upon a motion by an hon. member that it be overturned. I think we are on the edge of infringing the privileges of the members generally by continuing discussion over something which is essentially hypothetical. MR. SPEAKER: May I just conclude the discussion, if I may, with one final comment, because I think this bears on some of the misunderstanding that may be apparent here.

There must be a fundamental distinction, and in my opinion there is, between raising a point of privilege and debating it. It can be raised in a very simple way, adequately or not, but it can be raised and then subse­ quently debated. Furthermore, facts can subsequently be brought out in support of or against it, as far as that's concerned. Under 14(5)(2), the reference is — I believe it's there — to raising the point of privilege. But that does not necessarily deal with the matter of debating it. May we proceed with Orders of the Day. 129. Mr. Notley asked the government the following question: 1.

What was the value of total net income earned in Alberta by corporations with assets of over $25 mil­ lion for each year from 1975 to 1980 inclusive, and for 1981 if figures are available? 2. What was the value of total net income earned in Alberta by corporations with assets of less than $25 million for each year from 1975 to 1980 inclusive, and for 1981 if figures are available? 3. What was the amount of income tax received by the province of Alberta from corporations with assets of over $25 million for each year from 1975 to 1980 inclusive, and for 1981 if figures are available? 4.

What was the amount of income tax received by the province of Alberta from corporations with assets of less than $25 million for each year from 1975 to 1980 inclusive, and for 1981 if figures are available? 5. What was the number of corporations with assets of over $25 million liable for provincial income tax in Alberta for each year from 1975 to 1980 inclusive, and for 1981 if figures are available? 6. What was the number of corporations with assets of less than $25 million liable for provincial income tax in Alberta for each year from 1975 to 1980 inclusive, and for 1981 if figures are available? MR.

HYNDMAN: The answer to Question 129 is as follows: neither Statistics Canada nor the Alberta Bureau of Statistics provides information based on the size of a corporation's assets. The future answers to Questions 122 to 126 with regard to taxable income, and with the caveats stated, will provide related information. head: MOTIONS OTHER THAN GOVERNMENT MOTIONS MR. HYLAND: Mr. Speaker, as I rise to move Motion 206 standing in my name in the Order Paper, I note that we're probably now down to about half an hour of debate on this motion. Is that right? MR. SPEAKER: That's close to right. MR. HYLAND: Thank you.

I would like to read Motion 206 into the record:

Be it resolved that the Assembly urge the govern­ ment of Alberta to conduct a study into the feasibil­ ity of an alternative marketing system for specialty grain. First I'd like to outline my definition of specialty grain. I consider specialty grains to include soft white wheat, domestic feed barley, canola, flax, winter wheat, and more specialty crops not now in part or in total under the jurisdiction of the Wheat Board: sunflowers, safflower, triticale, corn, buckwheat, and the list goes on.

But in general, my definition of specialty grains is those men­ tioned, especially the first: soft white wheat, feed barley, winter wheat, canola, et cetera; those grains that can be grown under normal farming practice with the same machinery other crops are grown with. They would not include hard red spring wheat. Mr. Speaker, the reason for this motion is that I come from an area where a great deal of soft white wheat and barley are grown, and I think we should be looking at alternative forms for marketing those grains. I'll get into that a little later.

It's interesting to note that in 1939, Jimmy Gardiner, Liberal Minister of Agriculture, referred to the Wheat Board in the House of Commons: It . . . can be justified as the Legislation has been justified from the beginning, namely, that it is deal­ ing with an emergency situation . . . We cannot agree that there is likely to be permanency to any system of marketing farm products which is based upon price fixing. Needless to say, his comments turned out not to be as true as he thought them to be at the time. The Wheat Board far outlived him and is in existence to this day.

I attended a Palliser Wheat Growers' meeting in Win­ nipeg this winter. One of the comments there was that the Wheat Board's job was basically to handle hard red spring wheat; that is what they should do. They should be looking at the marketing, assembling, et cetera, of that grain. One speaker suggested that if other grains asso­ ciated with it create a problem for them, they should allow somebody else to take care of marketing those products. Some time ago, we listened to the hon.

Member for Calgary Buffalo — I believe it was in a debate on the Crow rate — outline Canada's position in 1935, with 50 per cent of the world market, and give us a breakdown of what it is today. I understand that in 1981, we exported only 18 per cent of the wheat to world markets. So things have changed vastly, and I think it's time we looked at other systems of marketing these specialty grains. We've heard many comments about the Canadian sys­ tem of marketing grains versus the American system, and which is better.

I note that the Foodwest Resource Consultants group reported that the Canadian return on a bushel of grain was some 8.5 cents less than that on a bushel of American export wheat. Of course, that is a debatable point. It was debated by the Wheat Board, among others, that those figures weren't true. Mr. Speak­ er, I'm saying that if we don't look at some alternatives to the present system, we'll continually have reports that suggest one thing, and another report that says that's not true. And then we really won't have accomplished any­ thing to help the farmer and the rural businessman.

In a survey in 1981, the Farm Credit Corporation had some interesting statistics that showed that gross invest­ ment dollar return in Alberta is 8.8 cents, and that the same gross investment return in Ontario is 17 cents. Ontario is not under the jurisdiction of the Wheat Board in any way, shape, or form, for any of the variety of

April 15, 1982 ALBERTA HANSARD 595 grains they grow. So it shows there is a need to investi­ gate alternative methods. Mr. Speaker, we can investigate alternative methods, but hand in hand with this must go the transportation of the product. As well as investigating methods of sale, we must include an investigation of the allotment of cars through the Grain Transportation Authority: how those cars would be loaded, how they would be allotted, and the movement of those cars to the coast so it would not create a bottleneck in the present system.

We can pro­ mote sales all we want, but if we haven't backed it up by a study into what is going to happen to the transportation of that product, it is not going to help the farmer a great deal to have a market sitting out there for specialty grain and not being able to move to that market because of transportation and loading problems. The Canadian Wheat Board really controls the market­ ing of grains in the prairie provinces. It doesn't control the marketing of grains in eastern Canada.

It is controlled basically by the Lieutenant Governor in Council in the federal Parliament and, as an example, we see the prob­ lems when one tries to market a special commodity. I believe that last year, we in Alberta applied for an export permit to move some barley into the northern states, and were refused by the Wheat Board. Some time later, Ontario applied for a permit to export barley to the States and was refused by the Wheat Board. But my understanding is that it was then appealed to the Lieu­ tenant Governor in Council, and they received permission to export that barley to the States.

So they found a market for a product, and we were not able to find that market. We also hear rumors that they were able to sell grain at a better price into Ontario and, because of the freight rate structure, buy grain from western Canadian farmers and make a considerable amount per bushel. All they really did was sell their own grain and buy ours to replace it. It's something we do not have, and I think this shows the need for a study to look at alternative marketing for that type of specialty grain.

In the study requested by the pools and done by CanWest Survey Corporation, we note that in certain age categories, in particular the younger farmer who has a great degree of confidence in himself to market his product, as many as one-third of those sur­ veyed thought there should be some changes to the Wheat Board. In a report on the meat industry of Alberta, Dr. Hugh Horner suggests that: An open market system, wherein domestic feed prices reflect world market conditions, can only exist if there is unrestricted access to the world market.

It goes on to say: This has occurred primarily because of the limita­ tions in the grain handling and transportation system and the priority given to the export of other grains. Mr. Speaker, that is almost what I said earlier during the debate: that along with looking for markets, we must also look for the movement of that grain. I would like to get into soft white wheat, that many members have heard me debate numerous times. This grain basically is grown through the irrigation district in southern Alberta. It's a high-producing wheat, and makes soft, white flour.

It means a great deal to irrigation farmers, simply because it is high yielding. It may not mean a lot in the total volume of the Wheat Board, but it means a great deal to the southern area of the province, especially to my constituency of Cypress and the constit­ uencies of Bow Valley, Little Bow, Taber-Warner, and some of Fort Macleod. It is a small area of the total prairie provinces, but it is a very important crop in that area. The soft white wheat association has done a great deal to promote the use and export of that wheat.

They have met numerous times, almost on a yearly basis, with the Canadian Wheat Board and, in most cases, have had fairly satisfactory meetings. We are looking at approxi­ mately 200,000 acres of soft white wheat in southern Alberta. As I've said, it is very important to the economy of that area. Supposedly, many countries of the world like to use this type of flour as a basis in their baking.

But up to the last short while, the Wheat Board's attitude was to use that grain partially in marketing, but partially with the federal government in the CIDA programs where, instead of actively pursuing markets, they could move it to areas of the world that needed assistance and food. I think this theory is starting to change somewhat, and has a lot to do with the pressure the association has put forward. The association is also looking at commission status.

Through their annual meetings, the feeling of growers is that they should investigate commission status so that they can promote their product even better and more strongly. Last year the Wheat Board contracted some soft white wheat to themselves, and contracted it again this year. Previously it had been contracted either by specific mil­ ling companies or elevator companies. It is questionable how long this contract will last. It may well go on, or this may well be the last year. A contract does one thing: it puts the Wheat Board in the position that it is committed to receiving X number of tons of production.

Because they have contracted for that, they are put in an export position, so that it does indeed encourage them to look for a market for soft white wheat. I think that is a plus. One can speculate what may happen. But one may spe­ culate that if the contracts are not forthcoming next year, that if the market development has been done well enough, maybe the markets will be there and there won't be a need for a contract. This is one type of question that can be answered in the investigation of such a study. Corn is another product that is becoming a prominent grain in the irrigation area of southern Alberta.

To the present time, the growers, either themselves or as an association, have looked after their own system of mar­ keting. I think they should be commended for that. But as time goes on, there may be a need for assistance in the international marketing of such a product. We've often heard questions about canola in this Legislature, and the problems involved with marketing and transportation, and the problem with the rail cars a few months ago. I'll leave that grain for someone else to talk about. [Mr. Appleby in the Chair] In summation, Mr.

Speaker, I looked back on some correspondence between the Premier and the Prime Min­ ister regarding the marketing of grain, tabled in the Legis­ lature on May 8, 1978. In part, the Prime Minister's reply to the Premier reads: . . . I understand the Canadian Wheat Board is co-operating with the Alberta and federal depart­ ments of agriculture, as well as others in the indus­ try, in testing the feasibility of expanding the produc­ tion of white wheat.

The Board believes, as well, that with rapid modernization of the milling and livestock industries in Iran and the Arab countries, there is considerable potential for red wheat consumption in

596 ALBERTA HANSARD April 15, 1982 that area and, consequently, the Board has provided technical assistance to encourage that development. Mr. Speaker, I submit to you that if that particular grain were marketed by a private agent or company, they would not give such an answer. They would sell the buyer the product he wanted, and not try to change baking habits that have been developed over thousands and thousands of years, and are not about to be changed that shortly.

I think that really is partly the basis of my motion: to investigate such things and see [from] the competition between private enterprise and the Wheat Board — and it can be a joint competition; it doesn't have to be one or the other — which organization moves grain best, along with the caveat that the study must also include the movement of grain to market, not just the marketing of it. Mr. Chairman, with that I ask the other members to support this motion. MR. THOMPSON: Mr. Chairman, I'd like to say a few words on this motion too.

I'm very pleased of course that the Member for Cypress has brought it to the floor today, because it happens to be one of my favorite subjects. I've spoken on it several times in the House, and I'm delighted to have another opportunity to speak on the Canadian Wheat Board. I firmly believe that if the people involved in setting this board up had sat down and tried to figure out a way to make it as complicated and inefficient as they could, they couldn't have done a better job than setting it up on the present basis.

As far as the grain farmers in Canada are concerned, in my estimation it's probably one of the biggest stumbling blocks we've had for the last 30 years. As far as Alberta is concerned, some of the negatives with the Wheat Board are that it's basically tailored to fit the economy of Saskatchewan farmers. It concentrates its main efforts on selling hard red spring wheat, and other grains are considered a sideline. I have heard a represent­ ative of the Wheat Board classify soft white wheat as junk wheat, because it has a lower protein content than other wheat.

Another reason they feel this way is because they have one special division set up that handles all grains of which less than 5 million bushels are sold per year. White wheat of course falls in that category, so a lot more effort is needed to sell these types of grain than to go out and get a contract for 200,000 or 300,000 tonnes of wheat for Russia, China, or some other country. These specialty grains are sold in small lots of 4,000, 5,000, or maybe 10,000 tonnes.

It probably takes as much effort to sell that as it does to go out here — and besides that, it doesn't get the headlines in the paper that the big con­ tracts get. The Wheat Board basically has no particular interest in selling specialty grains. The Member for Cypress read the motion. I'm not going to read it into the record; once is enough. But I feel that it's high time this study was made. In fact I wouldn't be surprised if, over the years, the Department of Agri­ culture has already studied it quite a bit. I'm sure the Grain Commission has looked into it to some degree.

I feel that maybe an organized study and a report on alternatives to how we handle our special crops should be made. We ought to consider a couple of facts. As far as wheat is concerned, 29 per cent of Alberta farm income comes from wheat; in Saskatchewan, it's 64 per cent. Another fact we ought to keep in mind is that 20 per cent of Alberta farm income comes from other grains besides wheat. Saskatchewan of course is down to 14 per cent.

I suspect these figures really do suggest to most people that specialty crops and feed barley, in particular, are far more important to the agricultural community of Alberta than they are to the Saskatchewan community. I really feel that the Canadian Wheat Board will con­ tinue to give a high profile, as it has in the past, to the selling of Canadian red spring wheat. I'd like to give some more figures to back that up. In week 35 of the west coast traffic report, 3,682 rail cars were programmed to be loaded.

Sixty-eight per cent of those cars were assigned to wheat, 19 per cent to barley, and 13 per cent to other crops. Stock on hand at the coast in week 36 was: 248,000 tonnes of wheat, 60,000 tonnes of barley, 82,000 tonnes of canola, 13,000 tonnes of flax, and 5,000 tonnes of rye. The thing that impressed me in that report is that they are only using 67 per cent of the available space. They have from five to 11 ships waiting to load.

I think that if our farming community would look at it, we've had a fairly cold but not bad winter, there have not been too many slides between here and the coast, and the transpor­ tation end is already starting to pinch a little bit as far as being able to transport our grain out there. It's basically been a pretty good transportation year. I think we do have a serious situation here, and I think it's something we should be concerned about. The motion says we should study alternatives. I'd like to offer a couple. I think we should have either a cash/ call feed exchange or a futures market in Alberta.

It should handle provincial, Canadian, and off-shore sales. If it is going to be successful, I feel it would have to be independent of the Wheat Board and outside its jurisdic­ tion. I think it would give Alberta farmers an opportunity for another way to sell their specialty and feed grains. Another alternative we should try to look at is setting up a board distinctly separate from the Wheat Board. Let them sell their red spring wheat. That's what they like to do; they're fairly good at it, I suppose.

But have a separate board set up for the three prairie provinces for specialty grain and barley, give it power equal to the Wheat Board, operate in other provinces with their per­ mission, and be responsible to the producers instead of to the federal cabinet, as is the Wheat Board. I really feel that a couple of options could be studied. I think more people are going to speak on this subject, Mr. Speaker. I'll be very interested in hearing what they have to say. I feel it's vital that we do not continue to solve today's problems with yesterday's answers. With that, Mr. Speaker, I thank you for your attention. MR.

CLARK: Mr. Speaker, I too would like to say a few words on this motion. I would like to compliment the member for bringing it forward. But I believe the time for the motion has run out, so I beg leave to adjourn debate. MR. DEPUTY SPEAKER: Does the hon. member have leave to adjourn debate? HON. MEMBERS: Agreed. MR. DEPUTY SPEAKER: Would the Assembly also agree that we consider the time as 4:30? HON. MEMBERS: Agreed.

April 15, 1982 ALBERTA HANSARD 597 head: PUBLIC BILLS AND ORDERS OTHER THAN GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 218 Alberta Agricultural Research Foundation Act MR. COOK: Mr. Speaker, I'd like to introduce Bill 218 for second reading. This Bill is enabling legislation only. It should be thought of as simply trying to promote the idea of having more agricultural research done in this province. The details of the Bill are not really all that relevant to the debate. It provides for the creation of a foundation.

It nominates a nine-member board, with representatives from the university and industry communities. It provides for six other people who are active in the industry, who would be nominated by the Lieutenant Governor in Council, basically by the Minister of Agriculture. It al­ lows the board to employ staff, purchase property, and basically to carry on research. It also requires the founda­ tion to report to the Assembly on its programs. Agriculture is one of Alberta's key industries. It may be odd for a city boy like me to be interested in agriculture, and some members of the Assembly have expressed that thought.

But Alberta is fortunate to have a very dynamic agricultural sector of the economy. It contributes a great deal to the gross provincial product. Last year, there were $3.3 billion in farm receipts. I don't think most city dwellers appreciate just how critical that is to the econo­ my, if you think of the support industries, the transporta­ tion sector, and the processing industries, largely in the cities. Many of my constituents rely on farm receipts in order to have jobs and paycheques at the end of the month.

I think it's very reasonable for a city boy to pay attention to one of the most important industries in the province. Another question that might be asked is, why are you bringing this particular proposal before the Assembly? What do you want to accomplish? Mr. Speaker, I think of research and development as more an investment than an expenditure. Last week, we had a very fine document tabled by the Minister of Agriculture. It's a progress report on Farming for the Future in 1981. As members paged through it, no doubt they had the same reaction I did.

Farming for the Future is a very solid program that is making real contributions to the agricultural sector. A

section of the report discusses individual programs; for example, the development of a potato industry. It notes, for example, that we might spend an amount of money, but we'll get that back. I'll give you an example from the report on Farming for the Future. In poultry in Alberta, we invested money that generated returns of $130 million in increased productivity to Canadian and Alberta agri­ culture. The investment had a pay-off 260 times the investment. Mr. Speaker, Alberta and Canada have a number of opportunities and problems in agriculture looming on the horizon.

Those problems and opportunities have an im­ pact on the province, and we have to assume a greater responsibility for the research and development done for Alberta agriculture. About two years ago, I went down to Beltsville, Maryland, where the main United States De­ partment of Agriculture research labs are located. I un­ derstand that with the Reagan cuts, there is going to be a significant decline in agricultural research work done in the United States. We cannot rely on the United States to solve for us our agricultural problems in research and development.

Secondly, I think there is an increasing recognition that research in agriculture has to be somewhat specific to the geographic area we are operating in. Research done on corn in Iowa is probably not going to have a whole lot of impact on corn production in southern Alberta. There may be some spinoff, but any research and development done is going to have to be tailored to our specific climate and conditions. It's increasingly evident that Alberta is going to have to work on trying to maximize production from its own climatic and soil conditions.

It's not going to be able to rely on the USDA or on a Canada Agricul­ ture research station in Manitoba to solve horticultural problems here in Alberta. We have a number of opportunities and a number of problems. A report called Research and Development for Canada's Agriculture and Food System, done in Decem­ ber 1981 by the Canadian Agricultural Research Council, outlines a number of priorities. I'll just briefly touch on them, Mr. Speaker, to enter them in the record.

The council says that some of the major challenges facing Alberta and Canada agriculture are: land degradation and loss to agricultural use through soil erosion and urbanization of our best land . . . those are probably familiar themes to members of the Assembly . . . drought, particularly in Western Canada with [increasing] soil salinity problems; energy use for crop production and food processing, retailing and distribution . . . A number of times we have heard in this Assembly that farmers are experiencing rising input costs.

The way to try to cut those energy input costs is probably to do more research on how we can take a more energy-conservative approach to agriculture. . . . pest management, agricultural waste utilization, soil and water pollution . . . Food processing, new animal and plant diseases are emerging . . . Alberta has tremendous opportunities to extend agri­ culture into northern Alberta.

Hon. members on either side of me represent northern Alberta constituencies, both of which would benefit from the opportunities there if we seize them and do the research to develop varieties or extend the range of crops in northern Alberta. Mr. Speaker, I should note that Alberta has a pretty fine record in research and development. Last year we spent something in the order of $17 million — about 0.5 per cent of the $3.3 billion contribution to the gross provincial product in agriculture — on agricultural re­ search. It's a significant amount, Mr. Speaker, but it could be increased.

I think the Minister of Agriculture deserves to be commended for the proposed increases in the Farming for the Future program. His predecessor, the Hon. Marvin Moore, who developed the Farming for the Future program, deserves credit for that. The Alberta Department of Agriculture also has some fine research stations at Beaverlodge, Brooks, and Lacombe. They're doing a lot of first-class world research. The University of Alberta has a fine record in agricultural research. The Department of Agriculture is doing some contract work.

All told, Alberta has one of the better records among Canadian provinces in research and development. But more capability needs to be established in the province. We have a couple of problems on the horizon. Each year when we crop, we lose several tons of topsoil per

598 ALBERTA HANSARD April 15, 1982 acre to soil erosion. We have the opportunities to try to develop new techniques. For example, we know about zero tillage. We know about ways to try to conserve topsoil. We have to try to preserve that land base we have. It is being degraded in some ways; that's the term being used by soil scientists. The nitrogen level in Alberta soils is falling. The organic content is falling. Our soils are becoming more acidic. Last year, we instituted a lime subsidy program to address precisely that question.

It's going to cost us $50 million in this fiscal year, and we're only starting to address a very small percentage of the soil that really needs liming. It's estimated that within the next 10 years, fully one-third of Alberta soil is going to require yearly liming. Mr. Speaker, there's an opportunity to diversify our crops. The canola developments should be instructive for all members of the Assembly and for Albertans generally on what Canadian agricultural research can accomplish. Surely that's one success story we're all familiar with.

When you think of rapeseed, 20 years ago it was a minor crop with some limitations on range and productivity. Canadian agricultural research scientists went in, devel­ oped new varieties, extended the range, and increased the productivity per acre. We then marketed it and processed it, again with agricultural research at the forefront, devel­ oping new products. It's a real Canadian success story, and that was done by Canadian scientists. There's abso­ lutely no reason we can't be doing that in a variety of other areas. I'll give you a couple of examples.

The United States Department of Agriculture made a priority of extending the range of winter wheat. I'm not a farmer, but I understand winter wheat is about 50 per cent more productive on a per-acre basis than spring wheat. It follows that if we could extend the range of winter wheat in Canada, we could make significant improvements in productivity per acre of land in Alberta. Winter wheat range has not been a significant priority of Canada Agriculture. Only now are they starting to pay attention to this area and this opportunity. The hon. Member for Cardston has instructed me well on this.

He sat me down in his office and lectured me — not lectured, taught. I'm an anxious student, willing to learn. I understand that a lot of farmers in southern Alberta are growing winter wheat, and it's much more productive than spring wheat. As a priority, why don't we try to extend the range of winter wheat in Alberta, so the farmers in the Edmonton area can be just as successful and progressive as the farmers in southern Alberta who are showing the way? The same could be said for fall rye, which has the same advantages. The same could be said for the development of legume crops, which fix nitrogen naturally.

Today we're providing nitrogen for agriculture in Alberta with very expensive chemical fertilizers, all of which are energy based. As we discussed in the Assembly a little earlier this afternoon, we know that energy prices are going to rise, and rise faster than inflation. If it's at all possible, Mr. Speaker, we should be trying to assist Alberta farmers to fix that nitrogen naturally and get a cash crop at the same time, to get a return on their land and investment. We could be doing that with agricultural research as an in­ vestment, not an expenditure.

As the Farming for the Future report points out, tremendous gains are to be made in productivity for a small initial investment. We could be doing that with field peas or other forms of legumes that could extend the range of nitrogen-fixing crops in Alberta. The processing industry received a real shot in the arm last year by the announcement of the Minister of Agricul­ ture of a new food processing lab in Alberta. That's a good example of how we can diversify the Alberta economy using agriculture as a base.

I might note that any food processing is likely to provide jobs in urban centres, Edmonton Glengarry probably included. But the point has to be made that tremendous gains are to be made there in diversifying Alberta's economy, in the nature of crops, the number of crops available, and the range of those crops. As I mentioned very briefly, north­ ern Alberta has tremendous agricultural opportunities that just aren't being met. While the research station at Beaverlodge is doing a fine job, we should be trying to bolster their efforts. Mr.

Speaker, there are about three major limitations to expanding Alberta Agriculture's research. The first is manpower. We don't have the scientific manpower in the province to undertake a major program of trying to expand agricultural opportunities in this province. We have some fine scientists on staff here, but a lot of them are getting to the retirement age. Very shortly, we're going to face an awesome problem. We're going to lose a lot of our very top scientists, and we're not replacing them at nearly the rate we're going to lose them.

We're paying our graduate students at the University of Alberta the princely sum of $8,000 a year. If you're going to get a Master of Science in agriculture and get a stipend at $8,000, when your friend who just finished his bache­ lor's has just been contracted by the Department of Agriculture at $20,000 to work as an assistant DA, it just doesn't make economic sense to that young guy who's worried about having a home for his wife and family. It just doesn't make economic sense to take that extra time and upgrade your skills. We need to try to expand our manpower base in research in Alberta.

That means we have to make some major commitments there. Mr. Speaker, we also lack the facilities to house a major research program that, as I said, would have enormous impact on agricultural productivity. As the Farming for the Future report points out, the productivi­ ty gains for a given dollar of investment can pay off as much as 200 or 300 times that initial investment. For an investment of $1 of research, we can have as much as $300. I can give you some examples. The potential gains are just awesome. In poultry, it's estimated a 260-fold gain can be made for an investment.

In wheat, the re­ search and development cost of $40 million had an esti­ mated productivity gain of 482 times. If I'm going to invest in something, and I expect in a very short while to get a productivity gain of 482-fold from my initial outlay, that is pretty incredible. That's why this issue is before the Assembly. We need buildings to house a major research program. We need capital development. At our universities, there just isn't the research lab space. At our field stations at Lacombe, Brooks, or Beaverlodge, the facilities aren't in place to undertake a major program.

The third item we need is capital to spark this development. I'm not going to claim that the observations I'm making are very original. In fact, I make no bones about it: I'm basically stealing ideas from a variety of sources, among them a former member of this Assembly, Dr. Horner, who suggested, in the red meat industry report to this Assembly, that we create a $100 million foundation to conduct agricultural research. In discussing this with a number of people at the university and in Alberta Agri­ culture, the suggestion has been that perhaps that sum is not really large enough to also handle the capital re­

April 15, 1982 ALBERTA HANSARD 599 quirements we need and to develop the manpower. It's been suggested that we really should be looking in the $250 million range. But I'm not going to argue that case, Mr. Speaker. In presenting Bill 218 today, I'm simply trying to make the case that research in Alberta agricul­ ture is important to all parts of the economy and to all citizens of the province, urban or rural; that tremendous gains in productivity are to be made; and that those gains can have a pay-off from 66 to 480 to 600 times, as reported in the Farming for the Future report.

We need a long-term strategy to try to bring in new varieties. We can extend the range for winter wheat or fall rye, a couple of examples I've noted. Northern agri­ culture is a tremendous opportunity that we should be seizing. We have some tremendous problems looming on the horizon with our agricultural land base: increasing soil salinity, increasing soil acidity, loss of natural nitro­ gen, degrading organic material, and increasing erosion of our topsoil. With that, Mr. Speaker, I think it should really be a challenge or a call to action.

Again, I make no bones about it: I have basically borrowed ideas from a number of sources. There is a need to try to address this question, and I think Bill 218 should be debated. I'm looking forward to hearing comments from my colleagues in the House. I think it's timely. Thank you, Mr. Speaker. MRS. OSTERMAN: Mr. Speaker, today it's a pleasure for me to address this quite timely Bill.

Just in passing, I might note that the Member for Edmonton Glengarry obviously took very seriously the Agriculture Week slo­ gan that stated, if you eat, you're involved; thereby, I guess, his involvement and concern about the future. I might add that in his remarks, he explained that he considers Bill 218 to be enabling legislation. While I think the whole agricultural research area is just an excellent topic for discussion, I have a lot of concerns about the Bill. I will stay away from addressing the specifics of the Bill.

I might comment that government once more getting into the act and feeling as if it has to set a further climate, if you will, for more agricultural research, concerns me somewhat. I think we must be realistic. If we produce a lot of products, we have to have a place to sell them. Right now we have a problem with that. I know we have a duty to the rest of the world, especially with our climate and our capability to produce food. But I'm not sure how long the primary producers in this province can carry that on with the kind of prices now being paid for their products.

I think that leads you to ask, will the Canadian people somehow subsidize those products so they can go on the world market? So a number of things are in place right now that [militate] to some degree against the whole philosophy of carrying on something. Somehow the climate just isn't conducive, although it should be, to carrying on more and more agricultural research. But that doesn't really change the very, very strong view a good many people have that we must address those problems now.

For if we're facing a food shortage in a number of years, at that time it will be too late to start some very serious and intensive research into, first of all, being more efficient with what we have and, secondly, possibly exploring and discovering whole new crops we haven't even conceived of at this time. The Member for Edmonton Glengarry certainly raises some very good points. He touched on what I think is really the number one problem we have now; that is, the number of ongoing projects we have. He touched on a number of those. We have the Farming for the Future program.

We have the Alberta Research Council involved in weather modification. If that program would bear some fruit in the future, it could make an incredible difference in terms of our crop yields in this province. We have the food processing centre being developed. We have the research stations around the province. All those things involve the employment of some very, very highly skilled people. I'll just quote one paragraph from one of the latest Farming for the Future bulletins. This paragraph comes from a paper delivered at an Agricultural Research Council meeting.

The paper was entitled The Availability of Scientific Manpower for Agriculture, and concluded by saying that: The supply of agricultural scientists in Alberta is at a rather precarious point. While the demand for scien­ tific manpower is expected to increase considerably in the years ahead, there is a real possibility that the number of available Canadian graduates may not be sufficient to meet future requirements. Shortages in fact are being experienced currently in certain disciplines.

The member probably saw some of that same informa­ tion, as well as the fact that in this decade a good percentage of our presently employed scientists will be retiring, or at least will be of retirement age. Coupled with that, we have a very dramatic falling of enrolments in this whole area. Those people who would be in a position to carry on with research are enticed into the work place, because their salaries are very high as op­ posed to what is being paid to people who continue their studies. So this is a major problem.

In his Bill, the member doesn't address that problem, and he's speaking in very general terms. I think that one of the things that's going to be very important, if there's to be a return on the dollar for the primary producers in this province, is that they will need at their disposal all the new tools that are possible. I'm told by a good many people that a lot of discoveries are being made and that that information really isn't going to the agricultural communities in the way it possibly could.

We have a number of things that we could possibly do before embarking on a major new program and, therefore, may be spreading ourselves and our available manpower too thin. I think we'd have to get a handle on all the programs, whether there are any duplications and wheth­ er the manpower is available right at this moment to embark on new programs.

In my view, the private sector could possibly be en­ couraged — not through government involvement and government appointees, but by other means — to look at where they'll be just a few years down the road with the products they're producing, and whether they'll even be able to compete. I'm talking about the processing indus­ tries.

It may well be that if they're wise and are en­ couraged, they'll look at the people presently enrolled in our universities and see their way clear to encouraging those people, first, to go on enhancing their skills so they can do research and, secondly, providing fellowships, scholarships, whatever they may be, to eventually come into those industries and do on-the-spot research. I'd be very concerned with the building of a lot of new facilities. If it could be proven conclusively that these facilities are needed and, most importantly, could be manned right now, I think a lot of us would be per­

600 ALBERTA HANSARD April 15, 1982 suaded. But that isn't what I hear in the agricultural community. We really must encourage those young peo­ ple presently involved in our postsecondary educational institutions, first of all, to feel a duty to go on. Secondly, they shouldn't have to suffer all that much in the material things of life. I think all people who are in university realize that they do give up some things, but the hon. Member for Edmonton Glengarry made the point that salaries are very low. To be realistic, we can't really expect those people to continue with that sort of situation.

An attempt by private industry to encourage people to build their own facility and draw those possibly newly skilled people into the research area, on the spot, in programs that, very honestly, will make a dollar — because when you come right down to it, that is what we have to do. Canada does not have the population to support major agricultural research that would produce new products that would eventually feed the world unless the world, can afford to pay for those products. Basically we're talking about private industry; they are the ones who have their ear to the ground.

Hopefully they should know what they might be able to make a dollar at. That sounds very crass. But unless the Canadian population is willing to subsidize, out of their own pockets, new re­ search capabilities in a very major way, in terms of both building the facilities and paying those people we want to go on and study further, I think we're going to have a real problem. I certainly commend the hon. member. Just raising the matter for discussion will possibly move some people to discuss it further, maybe even in their boardrooms. If they are to stay in business, they need those new prod­ ucts.

They need people to be involved in inventing new products, if you will, and the crops that might support them. So I commend the hon. member, but I have a lot of caveats on the particular Bill that gave rise to this discus­ sion. I think the government is already very heavily involved in a number of projects. I'd want to see a very major overview and consolidation of those projects be­ fore I would really support further government involve­ ment in the area. Thank you, Mr. Speaker. MR. PURDY: Mr. Speaker, in rising to say a few words on Bill 218, I have to concur in the remarks my colleague from Three Hills made.

I also have some concerns on Bill 218, put forth by the Member for Edmonton Glengarry. I look at the Bill in its present form. While it may have some merits, I wonder about the operation of the founda­ tion and its make-up by people from the two universities and only one from a farm group. That has some real concerns for me. I would have thought it should have been a reversal, and get some of the expertise of the farmers who are farming in this community and in the province.

We have ones with a lot of good expertise in rural Alberta, who have done quite a bit in the last number of years to enhance farming in the province. The other concern I have with the piece of legislation is that we now have in place a number of organizations that are doing this. We have one research foundation in the province right now. We also have Farming for the Fu­ ture, which is a new program that has a lot of dollars infused into it. I think it is doing a credible job on a number of research projects.

Various municipalities throughout the province have agricultural service boards that carry on a lot of this work through the tax dollars of the municipalities. They do various plots on new proce­ dures, maybe on some different type of cereal crop or, with that cereal crop, different fertilizing techniques and different farming techniques. We have a number of re­ search stations throughout the province, sponsored by the government of Alberta, that are doing a lot of research work in various areas, from the southern to the northern part of the province.

I also look at the announcement by the Minister of Agriculture last year of a new food processing plant, to be located in the Leduc area. I feel that that will be quite an enhancement on research in the province of our production of foods, and so on. One that I'm very, very close to is the reclamation taking place at Lake Wabamun and Highvale, where over the past number of years TransAIta Utilities has taken land that many people said wouldn't raise a jack-rabbit and is now raising forage crops, alfalfa, and a number of other things.

In fact, last year they turned a number of acres of soil back over and have replanted it. It's interest­ ing to note that last year, the second crop of alfalfa taken off some of the test plots out there had an excellent protein value, better in fact than in some areas that have been farmed for some time. They have about 1,500 acres out there that have been reclaimed and are being turned back into productivity. It's being done by a firm from Alberta. I think the University of Alberta is also working closely with them to see the outcome of this.

They try various aspects of different fertilizers in the land out there, different crops. It may be rapeseed one year and barley the next year, with a crop of alfalfa. They'll crop the alfalfa for maybe three or four years, and then plow that back under and do some further tests on the soil to see what nutrient factor was put back in because of the farming practice. The reclaiming of the area is kind of unique, because we also have to look at soil erosion and how the techniques of planting the crops and putting them back into produc­ tion has minimized soil erosion. It's going to be an exciting time out there.

The province of Alberta, through the Department of the Environment, is looking at that operation in many ways, and they've come out with new procedures now. The company has to replace something like 9 metres of original soil in its usual state before mining can take place. It has to be stockpiled that way and then replaced. I think that would be very difficult, because the company has proven that the topsoil can be replaced and, with the various techniques we now have, crops can be grown.

The topsoil, the rest of the area, the disturbed overburn, can be put back into pro­ ductivity, and the land will be useful after it's had the coal taken out from under it. Why I talked about the Wabamun situation and the TransAIta involvement is that I believe government should not be involved as much as they are. Given the opportunity and the dollars the hon. Member for Edmon­ ton Glengarry wants to funnel in — if they'd funnel that money into the private sector, I think they can prove without a doubt that the challenge is there and they can go ahead and look at it.

I reviewed some of the background information the member forwarded to my desk so I would be able to participate in this debate. I just don't agree with some of the background information that was given to me. I'm not going to get into debate with the member as I did last fall, I guess it was, when he was talking about soil erosion and the poor farming practices of our farmers. We got into a bit of a debate on a Thursday afternoon about 5 o'clock. But the information that was passed from the

April 15, 1982 ALBERTA HANSARD 601 member states that we have only 5 per cent of the production of agricultural products in Canada for only 3 per cent of our population; therefore, we could have a world food pool. I have some real doubts about that when I talk to my farmers in the Stony Plain constituency. One farmer has 18,000 bushels of grain, primarily barley, piled up in a number of granaries, and he can't move it. Other farmers have many head of livestock they can't get rid of, because the prices aren't there and there's no export market for it.

They're now bringing in beef from Australia and New Zealand, and not helping our people here. So if we're going to look at research and put a lot more food products back on the market, I think we have to give very serious consideration to some of our export agencies in Canada so that, as a country from Newfoundland to British Columbia, we're exporting a lot more into the world market. As I stated, I think the farmer with 18,000 bushels of barley piled up, off half a

section of land, has the capability of doing the production. But the federal government doesn't have the capability of marketing it for him. We've tried at our end, but you still have to have that common goal and denominator with the Canadian Wheat Board and other agencies to market that commod­ ity into the world market. Researchers have made a number of other observa­ tions, and I don't think I will dwell on them at this particular time. But, Mr.

Speaker, I would ask the Member for Edmonton Glengarry to consider very seriously the impact of this Bill on the private sector, that is now doing a number of good research programs in this province, and the impact of the legislation on other government agencies, in the research centres scattered throughout the province and, particularly, what it could do for Farming for the Future in the province. Thank you, Mr. S