Ontario Opposes World Level For Canadian Oil; Supports Retention Of Petro-Canada

TORONTO (CP) -- Ontario Premier WILLIAM DAVIS presented a tough energy position Tuesday which takes on everyone the oil companies and producing provinces over profits and the federal Progressive Conservative government over rising oil prices and PETRO-CANADA.

The position paper contains Ontario's suggestions for the new federal cabinet which will meet in Jasper, Alta., later this month to discuss Canadian energy policy.

There's too much room for regional imbalance if Canada's oil prices shoot up to world levels, the premier told a news conference. The producing provinces want a fair price, but it should not come at the expense of consuming provinces.

If oil prices increase $5 a barrel to match U. S. rates, it will add 2.2% to Canada's inflation rate and could force wages up, the paper stated. The consuming provinces would suffer while the producers prospered, straining the country both socially and economically.

CLARK NOT SUPPORTED

Ontario does not support Prime Minister JOE CLARK's proposal to move Canadian oil, which costs $13.75, to world prices which range from $18 to $23, the position paper said. Ontario will not accept an increase beyond the $1 a barrel proposed for Jan. 1, 1980.

But if the price climbs higher, Ontario wants all of Canada to benefit. Instead of fattening the coffers of oil companies and producing provinces, the extra profits should be reinvested through federal provincial cooperation to ease the economic burden faced by consuming provinces and to work toward national energy self-sufficiency.

"The uneven distribution of petroleum resources and provincial control over resources are at the heart of the issue: A contribution from the 46% of new oil and gas revenues flowing to producing provinces to pursue national economic and self-sufficiency objectives beyond their own borders is critical," the paper states.

ONTARIO HIT HARD

On Monday, the Conference Board in Canada predicted that Ontario and Quebec will be hardest hit economically in 1980. But Davis insisted his energy paper is not an attempt to protect Ontario interests only.

There is a certain amount of economic sacrifice involved in being part of Canada, Davis told the news conference. The paper adds that energy is "to a great degree a public asset which must continue to be priced in the public arena."

He said he felt Alberta and Saskatchewan would recognize the regional imbalance involved in energy pricing and would be willing to negotiate with the consuming provinces.

"This is an attempt on our part to out line the problems and suggest solutions. Our hope is that there will be solutions found before the situation becomes too serious,

The paper says Canada's real economic growth could drop by 0.3 to 1.4% if oil prices were increased between $2 and $7 a barrel.

Meanwhile, if prices reach world levels, the Alberta Heritage Trust Fund could grow to $24 billion or $25 billion by 1985, the paper says. This compares to $27.5 billion in the Canada Pension Plan in the same year.

He also said Ontario believes there is a place for PETRO-CANADA in Canada's energy policy.

It should work with oil companies to develop expensive frontier resources, not compete with the private sector. Davis said he has offered his view on PetroCanada to Prime Minister Clark who is sticking with an election promise to sell the national oil company to private interests.