Canada's Multi-Billion-Dollar Projects: What Price? What Rewards?

BGEN. ANDRUNYK:

Distinguished guests, members and friends of The Empire Club of Canada: It is my pleasure to welcome as our guest speaker today the Honourable John C. Munro, Minister of Indian Affairs and Northern Development. Only one other minister in that portfolio has ever appeared at our podium before and that was thirteen years ago when the Honourable Jean Chretien spoke to us on the White Paper on Canada's Indian Policy.

A barrister and solicitor, John Munro comes from a Hamilton family with a long history of community and political involvement. After sitting as an alderman and member of the Hamilton City Council for several years, he successfully ran for Parliament in 1962 and since that time has been re-elected in every subsequent election representing Hamilton East, Canada's most industrialized riding. His constituents comprise a virtual United Nations of ethnic backgrounds.

During his twenty-year tenure in the House of Commons, Mr. Munro has held numerous, cabinet posts, serving in the portfolios of Health and Welfare, Trade and Commerce, Manpower and Immigration, Labour, Multiculturism, and currently Indian Affairs and Northern Development. During these years he has made a significant contribution to the creation of such programs as the Canada Pension Plan, Canada's Medicare system, the New Horizons program, Sports Canada, Hockey Canada and the Canadian Centre for Occupational Health and Safety.

As a veteran cabinet minister and Member of Parliament, John Munro has earned the reputation as a tireless worker, a strong team player and a fighter for the rights of the underdog and disadvantaged citizen.

Ladies and gentlemen, I am pleased to invite the Honourable John C. Munro, P.C., M.P., Minister of Indian Affairs and Northern Development, to address us on the subject "Canada's Multi-Billion-Dollar Projects: What Price? What Rewards?"

THE HONOURABLE JOHN C. MUNRO:

Mr. Chairman, ladies and gentlemen: First let me say that despite this being April the first, I have no hesitation about being here today. We are, after all, in this together! I appreciate the opportunity of meeting with members of the Empire Club. You have a long and enviable tradition of concern for public affairs and the well-being of Canada.

Today I want to speak briefly, and in a spirit of optimism, about the government's approach to our current economic circumstances, and about some of the initiatives we must embark on together to achieve solid and sustained economic development in Canada. But first I'd like to answer a question that's probably lurking in the back of your mind. And that is, why is the Minister of Indian Affairs speaking on a topic that might otherwise be brought to a forum of this kind by a Minister of Finance or a Minister of Industry?

The short answer is quite simple. In addition to my cabinet responsibilities on behalf of Canada's native population, I am also the Minister for Northern Development of Canada. This means that I have the additional responsibilities for guiding the economic, social and environmental destiny of about forty per cent of Canada's land mass, the lands located north of the sixtieth parallel. More to the point, it means I'm directly involved as minister in the development of Canada's "last frontier," where lies much of our economic promise for the next few decades, in a delicate and unique environment and where Canada's native people have a vital stake.

I am suggesting to you today that it is very much in your interest--and I am speaking to the broad generality of Canadians in this commercial and industrial heartland--to become involved as active participants and partners in the development of the north. I am suggesting to you that there is a light at the end of the tunnel, and it is within our ability to switch it on. Certainly Canada is faced with severe economic problems. But unlike most other countries in similar circumstances, we have powerful levers to help turn our situation around.

I believe--and this will be the central theme of my remarks today--that our success as a country depends very much on forging new economic partnerships. We have to make this forging of partnerships a way of life in this country.

As you are probably aware, the government has embarked on a consultative process. My colleague, Allan MacEachen, is now meeting with business leaders, and I expect, labour leaders, in all the regions. He is getting their views on the economy and what we are doing, or not doing, as a government. I'll be in British Columbia tomorrow with Mr. MacEachen and we will be discussing some of the problems that are of great concern to that province.

This is not the first time we have consulted with business and labour and other interests. But now, more than ever, it's time to get the process moving forward again.

Over the last couple of years we have become divided over a number of issues. I believe we should all be ready to put our differences aside. Look at what is happening. We are getting ready for the final exercise in the patriation of the constitution. We have taken major steps toward the implementation of the National Energy Policy. Now we need to assess our strengths as a country, and build on them.

One of the major building blocks that will determine our future is our natural resources. Another is our human resources. We now need to demonstrate our willingness, and our ability, to put them together.

In particular, I want to emphasize the opportunities that are being presented by the development of the north, and the interest you have in its success. In doing so, it is important to take into account both the costs and the rewards. It is also important to be aware of the new rules of the game and the new players who will be involved in northern projects.

The reason why northern development is critical at this time is probably pretty clear to most of you. The government has staked much of our economic future, and our business recovery, on the major projects, many of which will be undertaken in the north.

The government's economic strategy is still the fight against the high rate of inflation, including our determination to reduce the federal deficit as quickly as possible. We have not made many political friends in pursuing these policies. But I was encouraged the other day by the observations of Jacques de Larosiere, the managing director of the International Monetary Fund. Mr. de Larosiere agreed with our position--that inflation leads not to growth but to recession and unemployment. He said that Canada was "showing courage and determination" in its fight against inflation. He also said that countries which best control their rate of inflation win the most growth and the most jobs. He even suggested that Canada could be even tougher in reducing its spending and deficits.

Much as you support the fight against inflation, you want the additional assurance that we are taking other effective steps to turn the economy around. We recognize as a government that if you are to make the hard decisions on new investment, the government must do its part in restoring confidence.

We believe that an important stimulus to the economy is being provided by major resource projects. We already have major projects on stream. We already know the benefits that are being shared throughout the economy. And there's a lot more to come.

Do not misunderstand. W e do not assume, as some critics have suggested, that these projects constitute the only answer to all our current economic woes. Nor do we believe that they must go ahead at any cost to environment, to people, or to the economy. What we know is that we have resources. We know that the development of these resources can make us more self-sufficient in the long run and that investment in our own resources can stimulate industry and provide jobs. We also know that this development must be undertaken thoughtfully, with balance and concern for the interests of native people and the environment.

The importance of the major development projects was set out in the government's policy paper, Economic Development for Canada in the 1980s, published last November. As a result of resource development, we anticipate that Canada is presented with exceptional opportunities in manufacturing, and in particular, high technology manufacturing.

Last year a task force on major projects gave us a private sector view of the kind of economic development potential that these projects provide. The task force was an autonomous group of eighty senior business executives and trade union officials. It was co-chaired by Robert Blair, the president of Nova, an Alberta Corporation, and Shirley Carr, executive vicepresident of the Canadian Labour Congress.

The task force identified an inventory of 235 potential projects totalling $440 billion that could be undertaken over the next eighteen years.

The list is an impressive one. Some of the projects have already become household names; for instance, the already approved Norman Wells oil field development in the Mackenzie Valley and the Alaska Highway Gas pipeline. Another, the Arctic Pilot Project, is now under review. There are many more in the planning stage.

You will appreciate that the government must proceed deliberately in view of all the environmental, social and economic considerations. But what we have accomplished so far clearly demonstrates our ability--on the part of both government and business and all the project participants--to get the projects on stream.

About ninety per cent of the projects identified by the task force are related to electrical and oil and gas production and distribution, and hydrocarbon processing. If we can start moving on some of them in the next year or two and meet the government's target of energy self-sufficiency by 1990, we will make a major contribution to our balance of payments and our international competitiveness. Norman Wells, for example, will save us $400 million a year in foreign exchange. The energy projects will also give solid backing to the government's policy of maintaining energy pricing at lower than world levels, and thus guarantee a competitive edge for Canadian industry and lower costs for consumers.

We should not be deflected from our goal by the current softness in world prices. We must take these events in our stride and continue to take action for the long-term.

But it's not only the exploitation of energy resources that's at stake. One of the most important considerations is the spinoff in industrial benefits which will have a positive impact on every region of Canada, including the basic steel, machinery, high technology, financial and management sectors of Ontario and Quebec and the other regions.

It's quite obvious that some projects have been delayed by the recession. We have seen that kind of delay with the Alsands and the Cold Lake tarsands projects in northern Alberta. But recent developments on Alsands should tell you that the government sees these only as temporary delays. The resources are there. They are being proved up. The demand for energy continues, and the need for substituting Canadian-produced energy for imports is basic to our economic growth, our economic security and our political independence.

While mega-buck projects are a source of optimism, I want to be clear that it is the aggregate investment that will count more in the long run than single projects. In the fifties and sixties it was the Trans-Canada pipelines and the St. Lawrence Seaway that created enormous driving forces for the economy. The pipeline and the Seaway had their share of detractors. But who today would question the contribution which they have made, and continue to make, to the Canadian economy? Personally, I am convinced that specific projects such as Alsands, the Alaska Highway gas pipeline and others will bring similar benefits to Canada.

But the economic stimulus from investment in resource development does not hinge on one or two projects. It's the overall investment that counts. For example, the investment in nuclear power runs into the billions. In Ontario alone it amounts to more than seven billion dollars. Newfoundland and Quebec are planning mega projects in hydro power. Then, over the next five years, it is anticipated that many billions will be committed to major projects in the northern territories. Norman Wells, the Beaufort, Dempster gas, and the Arctic Pilot Project all contribute to the promise of this region. The prairies, the Atlantic provinces and British Columbia are going ahead with other major projects.

Let me give you a dramatic quote from a speech given by the Honourable George Braden, leader of the government executive committee in the Northwest Territories, just a few weeks ago:

In the 1980s and 1990s, oil companies will probably spend about fifty billion dollars on major oil and gas projects in the Northwest Territories. In dollar terms this represents almost an eighth of all the major projects planned for Canada as a whole. The first of these projects, the one billion dollar Norman Wells pipeline and oil field development, is due to begin in a year and a half. This project will put twenty-five thousand barrels of oil into southern markets, reducing Canada's demand for foreign oil.

In all, about twenty-two trillion cubic feet of natural gas have been discovered in the Beaufort Sea area and around the Arctic Islands. Oil finds have led Dome Petroleum to predict a 1986 start-update for commercial oil production in the Beaufort. Gulf Canada, also exploring in the Beaufort, has announced an expansion of activities with the development of a base camp around Tuktoyaktuk on the Arctic coast and a new drill system. PanArctic Oils is expanding its drilling capacity with the recent discovery of oil on its leases. The Arctic Pilot Project consortium will soon appear before the National Energy Board with a proposal to move liquefied natural gas to eastern Canadian markets.

Oil and gas exploration have added significantly to the territorial product. Dome Petroleum, for instance, spent more than seventy-three million dollars during its first six drilling seasons, on northern labour and purchases from northern business. That accounts for 10.5 percent of Dome's total capital expenditures and operating costs in Beaufort Sea undertakings. Multiplier effects have added another $23.7 million to the territorial product since 1976.

In 1979 there were seven producing mines in the Northwest Territories employing 1,822 persons or 14.4 per cent of the N.W.T. labour force. The total value of metal mining production was $369 million and the value of tungsten production was estimated to be an additional fifty million dollars. The N.W.T. accounted for one hundred per cent of the tungsten production in Canada, 17.5 per cent of the lead, 18.7 per cent of the zinc, 10.8 per cent of the gold and 6.8 per cent of the silver. In total, the seven mines in the Northwest Territories accounted for 1.6 per cent of Canadian mineral production, and 4.6 per cent of metal production.

Since 1979 four new mine openings have been announced. These current developments, costing $325 million in total, are now coming on stream. One abandoned mine has been reopened and closed. It is estimated that these new projects could increase lead production in the Northwest Territories by fifty per cent, and perhaps double gold production.

This is George Braden, speaking for the Northwest Territories. This doesn't even touch on the potential for the Yukon.

In the last two years, I have approved northern development projects worth more than a billion and a half dollars. These include the Cullaton Lake gold mine, Cominco's Polaris lead-zinc mine on Little Cornwallis Island, the Cadillac mine, the Echo Bay mine and the Lupin mine, all north of the sixtieth parallel, as well as the expansion of the Norman Wells oil field and the construction of the pipeline to Alberta.

Sometimes we lose sight of how big these projects are. Pipe requirements for the twelve billion dollar Alaska Highway pipeline will provide a healthy boost to the Stelco plant in Welland and the Ipsco mill in Saskatchewan. At the same time, pipeline construction firms in Alberta will be assisted through their present difficult times. Component manufacturers of valves and compression equipment from Quebec to British Columbia will also receive significant orders.

These projects clearly demonstrate that we have the political will, and that industry has the know-how, to bring these projects on line. These and similar projects also have the support of northern governments and the native people, albeit with the real provisos which I have alluded to, which is a notable change from earlier years.

Last October it was encouraging to hear the position of the Council for Yukon Indians at the annual northern resources conference in Whitehorse. David Porter, the council vice-chairman in charge of economic development, told the conference that "native people across the north are going to be major players in resource development." He went on to say that whether the native people assume this role in a spirit of confrontation, or one of co-operation, is primarily up to the rest of the community. The cyi also proposed a public resource corporation involving natives and nonnatives in development. Mr. Porter suggested that such a corporation would provide Yukoners with the right to earn--and he stressed the word earn--equity participation in resource development.

An important question, of course, about major projects is--at what price?

The projects which are the direct concern of my ministry are those on or under Canadian lands north of sixty or those, like the Arctic Pilot Project, to transport natural gas by ship to Canada's east coast. These projects will have a direct impact on native communities, many of which are also involved in comprehensive land claims.

The basis of the Indian and Inuit claims is that their forebears lived on the land and used it for thousands of years. Over the centuries, their attachment to the land has been unbroken. They continue to claim the right of access for building their homes and for their hunting, trapping and fishing.

The rights of native people must be respected. In this, we are guided by considerations of fairness and equity. The native people are concerned about their present and future communities and their traditional livelihood. They, too, want northern development, but not at the price of destroying their homes, culture and lifestyle. They must share in, and be part of, northern development.

The government recognizes that native people have rights that cannot be merely "bought" with financial compensation. Timely claims settlements must also affirm cultural integrity and assure participation in development and the Canadian community. That means native people will not just receive the crumbs left over from development. They must be accepted as partners who are willing to take risks and expect to receive the benefits that risk-taking implies.

This kind of understanding lies at the heart of our determination to balance resource development with the legitimate aims and aspirations of the native people.

We are now actively negotiating claims with three of the four major native groups in the north. These include the Council for Yukon Indians, the Dene, basically in the Mackenzie Valley, and with Inuit Tapirisat, representing the Inuit of the eastern Arctic. As for the fourth, the Committee for Original Peoples' Entitlement (com), there has been a temporary pause in discussions.

This is not to say that projects cannot proceed without claims settlement. Some are. I believe there is a growing perception, among native people, of movement on the claims front. It results from the number of claims under active negotiation and the government's infusion of funds to support claimant groups' efforts at negotiation. This has instilled in native people a sense that they can look forward to partnerships, knowing that ours is not just a commitment of rhetoric, but of action.

This is critical. Any deceleration of momentum could destroy this confidence and polarize the communities of the north. It would cast us back a decade to the old stereotypes of pro- and anti-development, legal battles and acrimony.

It is clear that the federal government's presence in negotiations with native claimant groups provides assurances that would not otherwise be there. The courts have also played a role. In the landmark Calder case in 1973, the court prodded governments to take the native land claims seriously.

Since that time we have moved forward through the process of negotiations. We wanted to clarify the rules of the game in a way that would not be possible in a reasonable time through the judicial process. We believe this is in your interest just as in the interest of native people. Knowing the rules--something you need in business--also promotes good social and economic planning.

Let me quote from a speech made a few days ago by W.P. Wilder, president and chief executive officer of Hiram Walker Resources Ltd. I have heard the same thing expressed by many other business leaders in recent years. Mr. Wilder told the Canadian Club in Montreal:

... the biggest single barrier to investment--whether it be the multi-million dollar investments called for by the energy industry or the smaller investments required in other industries across the country--is uncertainty.

The Norman Wells oil field development, a classic example of the reconciliation of different interests, and the inter-provincial pipeline construction that will link this field to the trans-Canada system in Alberta, provide good examples of the judicious balancing of development and native interests.

You are aware, of course, of the bitter controversy during the last decade over proposals for constructing a pipeline down the Mackenzie Valley. It was in part related to fears over possible destruction of communities, the serious impairment of a fragile environment, and the disruption of native lifestyles. But it was also a battle over economic power-sharing.

I recommended approval of this project to my colleagues. It was approved. Most importantly, it was unanimously endorsed by all the historically opposed interests in the north. What made all the difference was the agreement we reached last year to involve native people in a fair and equitable way in the Norman Wells oil field development and to delay construction of the pipeline for two years while the land claims of the Dene nation in the Mackenzie Valley are being negotiated. Esso Resources, however, is proceeding with preparatory work at the oil field.

So there is a cost to northern development. It is part of the balance between development and native rights which I mentioned a moment ago. That cost involves first, recognizing the aboriginal rights of native people and accepting a commitment to protecting the values and the lifestyle of native people; second, ensuring that northerners, and particularly native northerners, become true partners in development; and third, protecting the environment so that our sensitive and extraordinarily beautiful Arctic is not spoiled and communities will not be damaged.

I do not want to minimize the costs. They will be substantial, both in terms of the financial outlay and compensation and settlements of claims. I believe the claims will be in the billions. The native people are just as concerned about their communities as you would be if you were advised that an expressway or a hydro line were going to be built in your backyard. But our commitment to reach fair and equitable settlements, and to safeguard the environment, will actually accelerate the process. Need I remind you of the Berger Inquiry, which was called because so little heed had been paid to the social, economic and environmental issues in the north. It is in the interest of all of us--in the north and in the industrial south--to pursue these goals.

I will quote again from Mr. Braden's remarks:

With the negative 1977 National Energy Board decision on the construction of the Mackenzie Valley pipeline ... the bubble burst.

The territorial economy contracted and an atmosphere of doom and gloom descended on the north. Newly-constructed office space and houses sat empty. The tremendous buoyant real estate market collapsed and businesses failed. Many people left. Those in the territory who were not mobile, primarily indigenous people, were left without jobs or opportunity for gainful employment.

What rewards can we expect from these major projects? As far as northern residents are concerned, the rewards should include the opportunity to enhance and diversify their economy. Their aspirations are like ours--viable lifestyle and employment options for individuals and communities.

The native peoples and other northern residents should have the opportunity to participate in projects as employees, as managers and supervisors, as subcontractors, as shareholders and as owners. This kind of diverse economic participation by northern residents is already in place to a limited extent, and we must encourage more of it. Experience with northern development will also give northern residents an opportunity to acquire a variety of new skills, which they will then be able to apply in other ways in their own communities and in other parts of Canada if they so choose. It will also expose them to management experience, which they will be able to transfer to their own industrial and commercial undertakings. This management expertise is already being developed, but it should be increased and enhanced.

As for national benefits from the major projects, we have already touched on some of them. They will, for example, allow us to move with greater confidence toward our goal of self-sufficiency in crude oil production at prices under world levels. Simultaneously, we must also keep in mind our goal of energy security.

Alsands is one of the projects we are counting on to help us reach that goal. It could replace up to 200,000 barrels of oil a day that we now import from politically unstable regions of the world. Alsands continues to be an important proposal, because you can't put a number on security. Nor should we forget the incredible stimulus to the collective Canadian imagination that a signal for starting up the Alsands would provide at this time.

The resource projects will also pay for major additions to the expensive infra-structure of the north, which in turn will increase our accessibility to other aspects of northern development. I am thinking of roads, schools, airports, housing, and new settlements. Once they are in place, they provide powerful magnets for tourism.

As well, the projects will provide significant new markets for our high tech industries. '

As for regional benefits, we already have good experience in the sourcing of major projects which demonstrates that industrial spinoffs are not a pipe dream or a remote possibility. In the case of the pre-build sections of the Alaska Highway gas pipeline, for example, Foothills Pipe Lines (Yukon), the project sponsor, has found sources for its requirements in all the regions of Canada. They are buying pipe, valves, turbines and other products in Ontario, Saskatchewan, Alberta, Quebec and other regions on the basis of timely delivery and competitive bidding. Nova, one of the principals of Foothills, has committed itself to following the same Canadiancontent objective in building the rest of the pipeline in the north, and in developing its other oil and gas projects in the north and in the offshore.

Nova and its affiliate, Husky Oil, have established other guidelines which I would commend to other resource developers. Besides purchasing on the basis of competitive bidding, Nova and Husky feel it is important to establish a secure base of Canadian suppliers. They aim to buy from both large and small firms in all regions. In the process, more jobs will be created.

Over the next five years, Nova and Husky could be involved in more than nine billion dollars worth of energy projects in the Canada lands. They plan to buy ninety per cent of their goods and services from Canadian suppliers. The total going to Ontario will be more than a billion dollars. Nova estimates that the employment involved in supplying these goods and services will be 74,000 person-years for Ontario--or thirty-two per cent of the total required for Nova's projects--if they all proceed.

So these projects can benefit all Canadians. They will create technological advances that will be marketable worldwide. They will create thousands of jobs. They will establish the basis for a viable northern economy. But they will do this only if we establish and apply some basic rules and principles from the very start. The development of major projects on the Canada lands will be carried out under new rules of the game. They will be an improvement on the rules, or the lack of them, that applied in earlier times.

The first principle is fair and equitable claims agreements. Settlements will incorporate a fundamental rule, and that is that the native peoples must enjoy a genuine opportunity for participation in the projects that are built in their communities.

I have also mentioned environmental protection. Strong measures are essential here, too. In this there must be no compromise on standards or implementation.

The third rule, if we mention just three of the most important, is the one requiring substantial industrial benefit for Canada and for Canadians, resulting from the development of the north. More Canadian content is a controversial departure from our previous dependence on foreign ownership and management, but it is one which is supported overwhelmingly by the Canadian public. It was also endorsed wholeheartedly by the Blair-Carr task force. That task force recommended, among other things, more Canadian ownership, more regional participation, less red tape.

On behalf of the federal government, let me say that we endorse these recommendations. More than that, we are already taking measures to ensure Canadian equity participation, Canadian royalties, Canadian industrial spinoffs and Canadian jobs. We will continue to impress on private sector developers the need to meet the objectives of Canadian content.

One recent example of the kind of positive action we are taking as a government is the Canadian oil and gas act, proclaimed last month. This act contains several provisions which will promote the development of a Canadian-owned oil and gas industry in the Canada lands in the north and in the offshore seabeds. The act also gives the federal government powerful levers to help Canadian manufacturers, consultants, contractors and service companies. Under the act, Canadian firms will have a full and fair opportunity to participate competitively in the supply of goods and services in exploration, development and production activities. The act continues to provide excellent opportunities for foreign investment in the frontier areas. It also provides safeguards for the environment and the culture and lifestyles of the people in areas where resource development may occur.

Finally, let me say a word about some of the new players. In the development of northern resources, we will be seeing more of them as we move forward with the major projects.

At the Norman Wells project, Esso Resources Canada is already making opportunities available to northern residents, including the native population, in both employment and sub-contracting. I understand that Esso Resources Canada awarded nineteen out of twenty construction contracts last year to northern businesses. In addition, they are negotiating a joint venture company with the native organizations to participate in the Norman Wells development. Potentially this company will operate one drilling rig, one service rig and one 200-man camp. I would hope this is only a start.

When the government was authorizing the Norman Wells expansion project I insisted on a comprehensive package of development programs, costing more than twenty million dollars, over the duration of the planning and construction phases. I did this to ensure that the training objectives, job openings and business opportunities for northerners will be realized. With the full co-operation of Esso Resources, we were able to secure an overall commitment for 230 jobs when the complex is in operation. The majority of these jobs will be offered to natives and other northerners living in the Mackenzie Valley region.

During the construction other benefits will flow to northern residents. These include at least 240 jobs, and business opportunities valued at more than one hundred million dollars.

This is an example of one kind of partnership. Another is the investment by the Inuit Development Corporation in the Cullaton Lake gold mine, located about 483 km north of Churchill. The Inuit Development Corporation (mc) was created by Inuit Tapirisat of Canada to initiate and develop investment and job opportunities in the eastern Arctic. The project principals are a Toronto mining group.

The Inuit Development Corporation borrowed about twenty-seven million dollars against its future land claims settlement, and loaned the money at cost to Cullaton to bring the mine into production. If the me exercises all of its options over the next four to five years, it will own about ten per cent of the company. Earlier I spoke about risk-takers. The iDC has demonstrated that it is willing to take risks. As an equity investor, it will take its share of the profits and losses.

The Inuit Development Corporation also has a contract to recruit non-management employees, and it expects that with training facilities it will be in a position at a later stage to supply supervisory and management personnel.

These are two examples of the kind of creative partnership that is possible for northern projects. They are not only a recognition of the needs and interests of northerners, particularly native northerners; they are also plain good business sense.

The bottom line is that in the north we now have a number of stake-holders of diverse backgrounds with a common interest in the major projects. We should use this common interest in the most productive way possible.

Ladies and gentlemen, Canada faces a formidable challenge in developing the north. The environment is fragile and hostile. The social relationships are complex. Canada and the world need the resources of the north. In the short run our economy needs the stimulation that major resource projects can provide. The heavy and secondary industry in the south needs this stimulation now.

But not at any price.

Certainly it should not be at the expense of native people through the destruction of their economy and their culture. Nor is it worth the cost of a willfully destroyed environment.

It is the government's policy to support major resource development in the north to the benefit of all Canadians, but prudently and with the involvement and support of northern residents.

It is the government's policy to negotiate and settle the claims of native people in the north with fairness and equity, and as soon as possible. We believe that through this process--through claims negotiation--the rights of native peoples can best be protected. In this way they can become productively involved in northern development.

I believe it is in your interest to support us in the billions of dollars that may be required to settle the land claims. It is the only major impediment to getting on with these developments. I also believe it is in your interest to keep pressing for settlements that are fair for all.

Finally, it is my personal feeling, considering the acrimony that we have witnessed in this country over the last two years, that the north--with its tremendous potential and benefits to be shared--could unite us: Westerners, Quebecers and all Canadians. We all have a stake in the land north of the sixtieth parallel. Let us make it a constructive force for national unity.

The thanks of the club were expressed to the Honourable John Munro by Catherine Charlton, Second Vice-President of The Empire Club of Canada.