[ Page 1043 ]

The House met at 8:30 p.m.

Orders of the day.

House in committee of supply; Mr. Dent in the chair.

ESTIMATES, DEPARTMENT OF INDUSTRIAL DEVELOPMENT, TRADE AND COMMERCE (continued)

On vote 119: Minister's office, $19,406.

MR. CHAIRMAN: I recognize the Hon. Minister of Industrial Development, Trade and Commerce.

HON. A.B. MACDONALD (Minister of Industrial Development, Trade and Commerce): Mr. Chairman, I thought I might give a very short description of the department as we see it for the future, because I think it might expedite proceedings of the committee.

The department is obviously leaning down in order to spring up phoenix-like from the ashes. Vote 119 is a reduction from $37,000 to $19,000. We are going to lose data processing, although that will be in the votes that the committee will be asked to pass on tonight. We have lost the farm advertising to the Minister of Agriculture (Hon. Mr. Stupich). We have lost the "Ask your Provincial Government" programme and special warrants. This was paid for out of this department in the past year. I should report it to the committee.

HON. D. BARRETT (Premier): How much? Tell the committee. Give it to them.

HON. MR. MACDONALD: No vote of the Legislature for this political propaganda.

SOME HON. MEMBERS: Shame.

HON. MR. MACDONALD: This political boondoggle was a special warrant of $150,000. Between April, 1972 and the election in August, 1972, $143,156 of the taxpayers' money was spent on political propaganda.

HON. BARRETT: Oh, resign! Resign! Oh, shocking!

AN HON. MEMBER: You also lost Waldo.

HON. MR. MACDONALD: If I can describe very briefly the outlines of what we hope will be a modern Department of Industrial Development and Trade Promotion, Minister and Deputy Minister. First we have a new branch, a business promotion branch which will be the …

Interjection by an Hon. Member.

HON. MR. MACDONALD: Well, I have to see it myself. It is a new branch, because that will be the "Promote B.C. Industry Branch." It will be involved with trade missions, identifying products that are made that are being used in British Columbia and which could be made here — that are being imported here and which could be made here. It will be involved with missions to different parts of the world where we can sell B.C. products after careful research.

Now, in the field of research, we have business research which is at the strictly business oriented level, different from the economic and statistics branch which will carry on, but concerned with such practical businessmen's needs as market surveys, productivity audits and the management consultants who will be streaming out from that business research branch but may not be civil servants. They may be employed particularly to help an industry that particularly needs that kind of technical service.

In the Industry and Community Services Branch, Jack McKeown is the chief officer at the present time. He has five people, including Mr. Stanger in the Kootenays. These industrial promotion officers are already actively engaged, and their target, which they are now accomplishing, is: to visit and survey and cooperate with 40 industries of British Columbia per man, per month; to file written reports; to spot business troubles that might be helped before they happen; to see whether or not the department can be of assistance to them perhaps in expanding their operations.

The Economics and Statistics Branch for long term economic research in terms of the state of the provincial economy will continue and is an excellent branch.

The Information Branch will be something different, really, in terms of industrial promotion, because it is going to rely upon the hard-headed business research from the promotion and from the business research branches of the department. It will be engaged in not just goodwill advertising of the Province of British Columbia, which really does not make any sales, but it will take the business research which perhaps identifies a product which we can export into a particular market, and will plan the kind of public relations campaign where we can break into that kind of market.

Then there is the administration. We will employ specialists and consultants.

So that is the new face-lifting in the department, so far as it has gone at the present time. Perhaps I should say before I sit down that in terms of

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international trade fairs, we are taking another look at them. Really in many cases they consist of enabling foreign manufacturers to come here to the PNE grounds and put on a good international trade fair to sell their products to us. Frankly we must be more concerned with manufacturing and selling our own products.

We are more concerned really with trade fairs in other parts of the world, not a permanent mission, but a foreign mission perhaps for a period of time to organize a trade fair or to organize a trade mission, as we are presently doing in terms of south-east Asia, where there is a need for the kind of woodworking machinery in their logging industry that we can manufacture here in the province of British Columbia.

Having said that, which I hope will shorten the discussion of these very modest estimates, I take my seat.

MR. CHAIRMAN: I recognize the Hon. Member for North Okanagan.

MRS. P.J. JORDAN (North Okanagan): Thank you very much, Mr. Chairman. I was very pleased to see the Minister of Industrial Development, Trade and Commerce read his own report in the House this evening. I would suggest that we cannot help but be impressed with that outline and some of the plans that he has outlined not only this evening but in previous debates, in view of the fact that we recognize that this reorganization of his current department is largely the result of the new Deputy Minister, who was appointed by the Social Credit administration.

We wish you well, Mr. Minister, because we think you have an excellent Deputy Minister. We believe you have some excellent people in your department. We support them, but we hope you will listen to their advice.

Yes, indeed, we not only support them, we supplied them. We must give you credit for recognizing some of the excellent plans that we are developing under the Social Credit administration.

MR. J.R. CHABOT (Columbia River): I hope they will straighten out your thinking too, Mr. Minister.

MRS. JORDAN: Very true, but one of the points that I might add that disturbs me about the "Panatella Kid" as he used to always bill himself, is his obvious fatigue these days and his rather vague approach to industrial development in British Columbia. I notice that you are not carrying your panatellas in your pocket. I congratulate you and I can only hope for the sake of British Columbia business that you switch to Geritol instead.

MR. CHABOT: The Geritol Kid.

MRS. JORDAN: Instead of the Panatella Kid we will call you the Geritol Kid because, Mr. Minister, you have got a big job to do, not only because of British Columbia's position in the international trade markets and within Canada but because of the obvious problems we face of a small internal market, the freight rate disparity to reach the major Canadian market, and of course the problems of being competitive in the United States, which is one of our larger markets, and in the international market.

Mr. Minister, I regret to say that we haven't been impressed with your conduct and your party's conduct outside this House. We must point out that since you have taken office, with your hang-up that the bogeymen of business are big business, that you yourself have become the bogeyman of little business. This is an attitude that you have to change. You have to stop attacking business as being a villain in a free enterprise system. You have to stop foolishly trying to point out the free enterprise system is a bad system, that it is an unsuccessful system and that it has no place in society.

MR. CHABOT: He's trying to tax them out of existence.

MR. JORDAN: When you look at the systems in the world that you support — the socialist world — if you examine them very closely you will find that the greatest problem they have, both financially and morally, is the sub-structure that is created by a dynamic, as you would like to call it, socialist control. With all their areas, there is a sub-structure growing within that bureaucracy because the bureaucracy itself is so corrupt. You look in Sweden, you look in Yugoslavia, you look in Czechoslovakia …

MR. CHABOT: Russia.

MRS. JORDAN: … Russia. They are awakening to the values of the individual enterprise system and it is those people who are trying to overthrow the stifling, dogmatic and inhibiting approach of a bureaucracy.

Along with this hangup that you keep trying to express, you are responsible, not only for trying to tax business out of existence in British Columbia in this session, but you are responsible for trying to put a lot of businesses out of business because of the headlines that you keep creating. "Hamilton alarmed over possible tax hikes." "B.C. stocks don't do too well." "Investors in B.C. stocks make partial loss recovery." "Politics has its effect, stocks in B.C. take a tumble." "NDP worries construction industry."

It's all very well, Mr. Minister, to stand here and paint this nice pretty picture and tell us about this great public relations campaign that you are going to

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take to the free world and other parts of the world. But Mr. Minister, what Menehan Dunsky didn't tell you is that the word has gone ahead of you and the headlines from British Columbia are ahead of you. As I tried to point out to you in one earlier debate, the people, the international financiers and bankers, international business people, take stocks, bonds, assets, liabilities, management potential, management conduct and political climate in an area in which they are going to invest very seriously. While we enjoy your humour, they are not going to be impressed by it. We'd ask you to settle down and take very seriously this portfolio upon which so much hinges in British Columbia.

AN HON. MEMBER: Spend more than 10 per cent of your time at it too.

MRS. JORDAN: It's all very well for the Premier to flap around as he always does, trying to criticize the past administration, but that portfolio was responsible for a 258 per cent increase in secondary manufacturing in British Columbia over the last ten years. And I'd like to see you equal that record.

MR. J.R. CHABOT: Let's get a full-time Minister for a change.

MRS. JORDAN: And that is another point.

MR. CHAIRMAN: Order please. .

MRS. JORDAN: The Attorney General has proven himself a little fatigued during his estimates as Attorney General. Now he is carrying this double load under Industrial Development, Trade and Commerce. He's almost asleep now. We think that we need a young dynamic Minister who understands economics.

AN HON. MEMBER: Boy, somebody's going to make a suggestion. (Laughter).

MRS. JORDAN: Let me make a suggestion. I think maybe we'll take the Hon. Second Member for Vancouver–Little Mountain. (Mr. Cummings).

We feel, Mr. Chairman, that it's time that the Government opposite got some of the scales from their eyes, took the clouds away, when they talk about business activity in British Columbia and outside British Columbia. We don't want the Premier of this province in the United States, in Washington, talking about bad breath. We want him down there talking about trade.

There seems to be an obvious evidence that they can't understand the relationship between assets, earnings and profits. They also seem unable to understand how sensitive the relationship between all these three can be. Again I would say how seriously that serious investors and money managers take this matter. I doubt very much if any of them have consciously understood any balance sheet that any of you have ever looked at, and that includes the Minister of the popcorn stand. We warn you again, Mr. Minister, that running British Columbia is not like running a popcorn stand.

MR. CHABOT: Pink-shirted Minister.

MR. L. NICOLSON (Nelson-Creston): What is this, a re-run?

AN HON. MEMBER: We wish we could have a re-run for the people.

MRS. JORDAN: I doubt ….

Interjections by some Hon. Members.

MRS. JORDAN: I doubt very much, Mr. Chairman, whether they understand that to make a profit, you first have to make an investment, and quite often that that investment in British Columbia is at the multi-million dollar level. Quite often too, that investment is associated with major risk, whether it's at the multi-million dollar level or whether it's at a $100,000 or $200,000 level. We on this side of the House consider not only major business as an important asset in British Columbia, but small businesses as well.

We'd like you to recognize, Mr. Minister, that to make a viable province or a viable entity, you have to have a very fine balance between the major corporations, the bureaucracy of government and the independent businessman. So far, all your directions have been aimed at squashing out the independent businessman and tearing down the major companies.

Quite often as well, investment is likely to take some time before even the first glimmer of a profit shows on the balance sheet. With the ideological hang-ups that you people show on the opposite side, these fundamental realities of business are often ignored. They're ignored in your budget. They're ignored in your debate and they're certainly ignored in the statements made by your Ministers outside this House.

I'd like to cite some examples. Have you finished your tete-a-tete, Mr. Minister? (Laughter). Make of it what you will, what we're concerned about is what secondary industry you're going to bring to British Columbia.

I'd like to cite some examples for you — to understand some of the problems that the companies in British Columbia are facing, and some of the problems that you're going to have to deal with.

I would take MacMillan and Bloedel, which is a

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British Columbia company, a company that's a fine example of how one man, who was ill but had an idea, took his own resources, some financial imagination and risk, and built one of the major lumber companies in the world.

Why knock them? They're a British Columbia company — we want British Columbia companies. They're frequently singled out for attack by the NDP Members. It has a record of showing only a 3.1 per cent of earnings in relation to sales. Its earnings in relation to its assets are only 2.6 per cent, Mr. Minister.

MacMillan and Bloedel, like many British Columbia companies, operates in the world arena, and they must be competitive. It's your responsibility to see that you keep them competitive in relation to the benefits that are derived by the working people of British Columbia from their role in our industrial development.

MacMillan and Bloedel, like other companies as I mentioned, has to operate. We feel that you have to recognize that the arena in which they operate is far removed from British Columbia. It's far removed from any explanation that you give us in this Legislature about the hangups that you express outside against big industry and which hits headlines in all parts of the world.

We wonder just how cognizant you are of the current international monetary situation, where dollars are bouncing up and down like a yo-yo. This again is far beyond the reaches of this Legislature, only in terms of an explanation, but not in terms of your irresponsible statements.

Mr. Chairman, we think that these international sensitive situations are what a company like MacMillan and Bloedel and many others, so often small, are up against. We deplore the fact that the Members opposite have apparently decided to make British Columbia's community a tinker-toy with which you can play. Surely, when 51.6 per cent of the gross sales from the top 50 corporations in British Columbia come from the forest industry, there should be more understanding opposite for what British Columbia and its business economy is all about.

I'd like to take a look at some of the other companies in British Columbia which make up the top 50. Columbia Celulose, in 1971 had gross sales of $83,498,000 — no profit at all, Mr. Minister. Kaiser Resources, gross sales of $70,299,000 and no profit at all. Here we hear the hangup again, "American owned." You just go over to the Fernie area, you just go over to that country and talk to the people who are working in that mill and who have a payroll coming in — who are paying taxes in British Columbia …

MR. CHAIRMAN: Would the Hon. Member please address the Chair.

MRS. JORDAN: For the Members opposite this may come as a surprise, because every action they have taken to date indicates that this Government doesn't understand when it comes to managing the sensitive economy of British Columbia. Again we must express the concern about the investments of this Government in outside companies.

I suggest that the Members opposite frequently think that to single out Columbia Cellulose or Kaiser Resources with all their problems is simply to serve a political purpose.

Well, the Members are still interested, so let's examine some of the other companies in British Columbia which are not so well known, and perhaps are not as often a target for the socialist hordes opposite to attack and attack and attack with their ideological hangups.

Look at Trans-Mountain Oil Pipelines. They show fifteenth on the roster of the top 50, with total assets of $114 million, and they show sixteenth with gross sales of $45 million, and they show not at all in the top 50 earners. Take a look at Block Bros….

AN HON. MEMBER: Who writes your speeches?

MRS. JORDAN: We write our own speeches. Just because you're a puppet on a string of some of your speech writers … Let's take a look at Block Bros., another reported evil devil in the socialist mind. They show total assets of $62 million and are twenty-fifth on the list of the top 50, and they show in the earning column thirty-sixth place. Hardly a remarkable return on their investments.

Also take a look at a little manufacturing company in Nanaimo. There's a Member over there who should be interested in this. And this shows the other side of the coin. They make spar trees for the forest industry of British Columbia. They use ingenuity, and the free enterprise system, and dedication, and they risk their own money. They are local brothers in the small town of Nanaimo. They show not at all in the top 50 earners in terms of assets, but believe it or not, Mr. Speaker, they show up forty-eighth in the revenue column, with revenues of $6.6 million. They provide local jobs in the Nanaimo area. It's there and it's a big earner because of their ingenuity and their willingness to take a risk. This is something that you must encourage, Mr. Minister.

You might ask, Mr. Chairman, what it's all about. It is that the individual enterprise system works only if there is a legitimate profit, and if that profit is related to the assets of the company, and if they are used against in the terms of getting more profit. It should be related to the dedication of the people involved and also to their ingenuity and their willingness to work.

The entrepreneur in British Columbia, be he big or small, as long as he is legitimate and morally honest,

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has the right to use his ingenuity to make a profit to bring secondary industry to British Columbia, and to create jobs.

By the looks of their faces they still don't understand this, Mr. Chairman. And I suggest that the majority of them never will, because the majority of them have never had to put their money and their ingenuity and their efforts on the line. I put mine on the line, Mr. Member. Where do you put yours? You ran away from yours.

Mr. Chairman, that's what separates this side of the House from that side of the House, and that is why it is only with the greatest reluctance that we will support your salary, Mr. Minister.

MR. CHABOT: Oh, no.

MRS. JORDAN: And we will support the vote for your department on the basis that you are new in your job. And as with the Minister of Agriculture (Hon. Mr. Stupich), we say that we're willing to give you a chance.

But, Mr. Minister, we don't want any more of these headlines. We don't want your foolish nonsensical bogeyman hangups destroying the business climate of British Columbia. And we don't want your hangup that government has to be the Big Brother of business to destroy the initiative of small business people in this province.

The Minister sits there and he laughs. Mr. Minister, I've got a file with letters from people who want to go into the secondary processing of agricultural foods in British Columbia. I've got a letter for a boat works that wants to expand in the Okanagan. I've got a letter from a small group of people that want to expand the component housing plant that they have. I've got a letter from a man who wants to go into the veneer business. These people have the one common problem of low cost capital money.

Mr. Minister, you have an obligation to make that available. Make it a sound investment without becoming a Big Brother partner in every little business in British Columbia. We suggest that in the move you are making that was announced in the paper, and I just happened to read it on my way back, that you move with extreme caution when you invest the taxpayers' money of British Columbia in major industries.

To put money like that into exploration, to put it into all the risk areas without any thought, without any guarantee of a return profit to the people of British Columbia, we say is wrong. You are using taxpayers' money without taxpayers' consent.

You didn't have a mandate for this and we suggest that you rethink your approach and that you make low-cost money available to small industries in British Columbia for new programmes, for expansion of current programmes at a low interest rate, and keep the Big Brother government out of their business, other than to ensure that it is a feasible business, that it is non-polluting and that the taxpayers of British Columbia have the loan assured by the assets of that company.

I have some other questions to ask you, Mr. Minister, but I'll do it a little later in your estimates. We would like, just as a matter of point to the question, an explanation of the investment that is going on with $7 million of the taxpayers' money. We would like an explanation of what you are doing for the small businessman of British Columbia other than taking airy-fairy trips to countries around the world. What loans are you going to make available to small businesses? What will be the terms and conditions? What projections have you done in relation to projected secondary manufacturing in British Columbia over the next year in light of the current unease prevailing in the economic climate?

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: Mr. Chairman, just for a moment I would put something on the record so that we understand exactly what department we are discussing, in the question of profits and taxation.

First of all, I want to make a public statement that I have been involved with my colleague, and I want to express my appreciation of his very hard work, and his staff's very hard work. The economic research that they have provided has been excellent. It's the kind of economic research which, if properly used, would have avoided a win-or-grin situation and an $8 million payout.

I just want to make this one point about the large companies and the need to protect them in the Province of British Columbia, and the sanctity of the investment dollar and the need to get back a fair return.

I want to give you an example of one poor little poverty-stricken company here in the Province of British Columbia. I want to read you this letter dated February 26, 1973, as a result of some of our continuous research in the province:

"Mr. G.S. Bryson, Deputy Minister of Finance, Province of British Columbia, Victoria, B.C. "Dear Mr. Bryson:

"This is in reply to your letter of February 9, 1973, concerning the Standard Oil Company of British Columbia."

- you've heard of that poverty-stricken company, haven't you?

"The amount of British Columbia corporation income tax paid by the above company for 1965 — 1971 inclusive is nil, as the company has no taxable income in any of those taxation years. This information is provided in accordance with clause 11 of the tax collection agreement between

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British Columbia and Canada.

"I trust the foregoing is the information that you require."

Mr. Minister, I hope that you take into consideration, based on that Member's speech, some sympathy for that poverty-stricken company that hasn't paid a single cent of corporation income tax in this province for the last six years.

MR. CHAIRMAN: I recognize the Hon. Member for West Vancouver–Howe Sound.

Interjection by an Hon. Member.

MR. CHAIRMAN: There has been an interceding speaker, I'm sorry. I'll recognize you after.

I recognize the Hon. Member for West VancouverHowe Sound.

Interjections by some Hon. Members.

MR. CHAIRMAN: Order, please. Will the Hon. Member for North Okanagan (Mrs. Jordan) be seated, please?

MR. WILLIAMS: Thank you, Mr. Chairman. I enjoyed the remarks of the Hon. Member for North Okanagan, and as she stood in her place we all recognized the outline of things to come.

I thank the Hon. Minister for indicating to us the new direction that his department will take. There was a delightful diagram that he produced. I was attracted by one of the areas of his department's reorganization dealing with trade missions. I assume this is the Minister's travel plan. The Premier is going to London and the Hon. Minister of Highways (Hon. Mr. Strachan) is going to B.C. House in London, or Edinburgh, or wherever they are going to move it to. They are all moving around so the Minister has his own travel plan throughout the world.

The Minister indicated that the plan or reorganization was a face-lift and, yes, the department does need a face-lift. But despite all of the cosmetic surgery they may do, as I see the department developing under the Minister, it still looks like Waldo to me.

HON. MR. BARRETT: You can say almost anything, but not that! (Laughter).

MR. WILLIAMS: Well, he's still out bobbing around the ocean someplace. I guess he'll come floating back to us finally.

Surely, Mr. Chairman, the department has been adrift for many years under the previous administration. The Minister, in his opening remarks on his salary estimate, has not given this House any assurance that there's going to be any real change. I think that the contributions made to this debate by the Member for North Okanagan (Mrs. Jordan) should be taken very seriously by the Minister.

In her remarks she clearly indicated that the industrial development of the Province of British Columbia is tied solely to the resource industries of this province. We also recognize that in those resource industries the number of men and women employed per unit of production has over the past years dropped drastically and it will continue to drop.

When we face as we do today an unemployed picture where in this province we have almost 100,000 of our citizens unemployed, it is no longer good enough for the Minister of Industrial Development, Trade and Commerce to rely upon the natural resource sector for the provision of employment and jobs in this province.

I would have thought that we would have heard from the Minister tonight something of the bold new plan that we must have and that his department must provide if we are to move from the traditional role that we have had in this province so often mentioned of the "hewers of wood and drawers of water."

Indeed, one of our problems seems to be that our role in the world industrial community is to be hewers of wood and drawers of water. So far as corporate organization is concerned, that is truly the role in which they see this province.

It is going to take strenuous efforts on the part of the Government of this province and of the Minister of Industrial Development, Trade and Commerce to break through the barrier which will lead us into the labour-intensive secondary industry opportunities that are available in other jurisdictions.

Therefore, I want to propose just a couple of questions. I hope the Minister will indicate, not by any lines on a piece of cardboard that he's drawn to show how his department is going to be reorganized, but the positive plans that he has to break through that barrier.

These are the questions:

(1) What positive programme do you have to encourage the establishment of research and development in this province which will enable us to grasp the incentive opportunity to establish some unique secondary industry in this province which will enable us to compete in this country and in North America and in the world in the secondary industry field? Are we going to go into manufacturing and, if so, what will we manufacture? That manufacturing depends upon real innovation of the part of the department and of industries that will establish themselves here.

There's no use of us talking about building television sets, because other countries in the world are already a decade or more ahead of us. If we are prepared to adopt that approach then truly we will be dependent upon a branch plant economy. That's all we can ever have.

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The same applies to the matter of the automotive industry. The Premier has often spoken about establishing some kind of automotive assembly plant. That's branch-plant thinking, Mr. Chairman. Until we can get ourselves in the position where we are able to establish basic secondary industries which will be in demand throughout the world, we do not break through the barrier.

So, what are you doing about research and development and innovation, Mr. Minister? That's question number one.

(2) What is your department doing about going abroad to other countries who wish to have established in this province industrial development operations — secondary manufacturing plants — with people who have already done the research and development, who have already produced the innovative ideas; who want to come to British Columbia where we have some natural attributes desirable to them — our natural resources, our source of power, our other energy resources?

What specifically are you doing to ensure that companies with those kinds of innovative skills and with the capital to match are going to come to this province to establish themselves? You have already closed down some of the offices that previously existed which might have had the opportunity of fulfilling that function. I want to know where in the world you are going to re-establish offices and industrial development officers who can fulfill that role. That's my second question.

(3) My third question is a much more serious one. Are you, when we are able to encourage the secondary manufacturing organizations to establish themselves here, going to confront them with the demands which have already been made upon other industrial developments in British Columbia? I specifically mean demands that they give up a part of their equity ownership as the price of establishing in British Columbia.

I suggest, Mr. Chairman, to the Minister, that if this is your intention, you will find those companies turning away from British Columbia and seeking to establish elsewhere.

MR. CHAIRMAN: I recognize the Hon. Member for South Peace River.

MR. D.M. PHILLIPS (South Peace River): Well, Mr. Chairman, I can see that we're going to have to have another performance in this House when we start talking about what we're trying to do toward directing the economy of this province from the Minister of Industrial Development, Trade and Commerce as we had from the Premier while we were discussing his estimates. No answers. I'm getting a little sick and tired of sitting in this House and seeing shallow, hollow performances from our Premier when he should be standing up …

MR. CHAIRMAN: Order, please.

MR. PHILLIPS: I'm here and I'm going to do my job.

MR. CHAIRMAN: Would the Hon: Member please address himself to the estimates before us?

MR. PHILLIPS: Yes, Mr. Chairman, I happen to be addressing myself to the estimates. I'm addressing myself to the Department of Industrial Development, Trade and Commerce, which includes providing jobs in this province. While the Premier — I didn't hear anybody bring him to order when he got up and made a political preview on the floor of the Legislature about 20 minutes ago.

He provided no answers. He got up and gave another political charade about what the Member for North Okanagan (Mrs. Jordan) had said. He didn't provide one constructive bit of talk about where the province is going economy-wise or what he's going to do for the unemployed in this province. I didn't hear anybody bringing him to order, Mr. Chairman.

What we want in this House is answers, answers as to what this Government intends to do.

I'll tell you I don't know who our Premier is trying to emulate; but if he's trying to emulate Mr. Lewis in Ottawa, I don't think too much of him and I don't think too much of his predecessor, Mr. Douglas. Either one. Both of them, when it comes to talking about developing Canada, are just about as flat as a glass of water on the living room floor.

AN HON. MEMBER: It's hokery-pokery.

MR. PHILLIPS: You talk about all these cliches about rip-off artists and big company rip-off artists. I'll tell you they're political rip-off artists and I think the people of this nation and the people of this province are getting a little sick and tired of them.

I've had too many performances on the floor of this House from our Premier. He thinks he's still in Opposition.

Mr. Chairman, I'd like to get down to discussing some of the problems that face British Columbia. We're talking about the establishment of an industrial development corporation.

MR. CHAIRMAN: Order, please.

MR. PHILLIPS: I know. Sure, the Minister brought in the bill so that nobody can discuss during his estimates industrial development in this province.

HON. MR. MACDONALD: I thought somebody else brought in a bill before me.

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MR. PHILLIPS: I brought in a bill, Mr. Chairman. (Laughter). And that's about what the Government thinks of that bill, too.

Before you rule me completely out of order, Mr. Chairman, I do want to discuss the industrial development corporation of Manitoba. I want to point out, Mr. Chairman, some of the pitfalls that that corporation has had, so that we won't fall into the same pitfalls here in British Columbia.

AN HON. MEMBER: Their buses are being subsidized, though.

MR. CHAIRMAN: Order. The Hon. Member is intending, I believe, to direct himself to what is the substance of the two bills before the House.

MR. PHILLIPS: This bill was passed in the Manitoba legislature during the reign of the then Progressive Conservatives, so they called themselves …

MR. CHAIRMAN: I would ask the Hon. Member to let me finish. I repeat that if he's going to discuss the Manitoba development corporation, he should ensure that he does it without discussing the substance of Bills 74 or 102, which concern the development corporations in B.C.

MR. PHILLIPS: Well, I don't know what the number of their bill was when it was passed, Mr. Chairman, but I'll try and abide by your regulations.

In Manitoba the industrial development corporation there has gone through a great number of pitfalls. They've made a lot of mistakes. What I am …

HON. MR. MACDONALD: What's that got to do with my salary?

MR. PHILLIPS: It's got a lot to do with your salary, Mr. Minister of Industrial Development, Trade and Commerce.

MR. CHAIRMAN: Would the Hon. Member address the Chair, please?

MR. PHILLIPS: Yes, Mr. Chairman. Well, have the Minister of Industrial Development, Trade and Commerce address the Chair then. What's good for that side of the House will be abided by on this side of the House.

MR. CHAIRMAN: I would draw the attention of the Hon. Members on the Government side to standing order 17, part II, which says that you are not to interrupt a Member when he is speaking.

HON. MR. MACDONALD: He hasn't started yet.

MR. PHILLIPS: Well, Mr. Chairman, I want to point out that the Manitoba development corporation has had a lot of trouble since it started. All I was saying, Mr. Chairman, is that I hope that the Minister will pay some attention to what has happened there so that British Columbia doesn't have to go through the same pitfalls in the development of industry in this province that they did in Manitoba. That's all I'm trying to point out, Mr. Chairman.

They've gone through several managers. They now have a new one. During the course of their operation they have invested in many establishments in Manitoba and a number of them have gone broke.

I'm reading from a report on business from the Toronto Globe and Mail dated last October: "Established in 1958, the Manitoba development corporation is already a giant conglomerate directing the operations of 15 subsidiaries and providing part financing for 200 other Manitoba corporations. Since the NDP came to power three years ago, the corporation has favoured buying an equity position in capital seeking enterprises instead of making straight loans to private entrepreneurs."

The article goes on to say that:

"The provincial development agency already owns 100 per cent of such companies as Morden Fine Foods Ltd., a rural vegetable processing plant; the McKenzie Seed Co. Ltd. of Brandon; and Venture Tours, which operates the Lord Selkirk ship. Furthermore, it has 75 per cent interest in Flyer Industries Ltd.,"

and we've heard something about that in this Legislature,

"a Winnipeg bus manufacturer; and 87 per cent interest in Saunders Aircraft Ltd., a struggling Gimley company that is trying to find a market for short range passenger planes."

AN HON. MEMBER: Is that where we bought our government aircraft?

MR. CHAIRMAN: Order, please. Would the Hon. Member be seated? State your point of order, please.

HON. MR. MACDONALD: My point of order is that the Hon. Member is discussing industrial assistance programmes, which will be provided for in British Columbia through bills that are now on the order paper, including the Government's bill, British Columbia Development Corporation, and he can give this speech at the time that bill is brought before the House, which I hope will be very soon. It is quite out of order on this estimate.

MR. CHAIRMAN: The point is well made. I would

[ Page 1051 ]

draw the Hon. Member's attention to his own bill, section 5, which states that the object of the corporation which he is proposing is to create employment in the province by encouraging and assisting in the development of secondary industries operated within the province.

Inasmuch as the substance matter of his remarks is concerned with these matters, and it's also similarly contained in Bill No. 102, I would ask him to confine his remarks to the administration of the department.

MR. PHILLIPS: Thank you very much, Mr. Chairman.

In Canada today there is a boom going on in the furniture building industry … I can't even see you, Mr. Minister.

HON. MR. MACDONALD: Well, I find that's an advantage to me. I don't know whether it is to you.

MR. PHILLIPS: Are you hiding?

HON. MR. MACDONALD: I'll move over then.

MR. PHILLIPS: Fine. Thank you.

It is probably one of the fastest growing industries in Canada today. As a matter of fact, the industry is suffering growing pains because it is unable to get skilled labour to work in the plants. The export of furniture, particularly in Ontario — they are unable to keep up with the demand.

My question is this, Mr. Attorney General: There is a great deal of demand for furniture components using what we call poplar wood or aspen. In the northern part of this province a large percentage of the forest cover is made up of aspen or poplar wood. This is a good component for the manufacture of furniture and furniture parts. Does the Minister of Industrial Development, Trade and Commerce have any ideas or is anybody interested in developing a plant which could manufacture these furniture components or furniture?

At the same time, this would use a part of our natural resource, a tree which is presently not being used in the pulp industry, is presently not being used in the sawmill industry. As a matter of fact, it's not being used in any wood industry that I know of in British Columbia today. This would utilize one of our natural resources and at the same time take advantage of an industry that is experiencing a growth position. It's one of Canada's leading industries.

Population in British Columbia, Mr. Minister, through you, Mr. Chairman, is growing rapidly. The figure is revealed in a recent report:

"Despite a declining birth rate and a stable death rate, the British Columbia population continued to grow in 1972, a health department report revealed Wednesday. The 1972 annual health department report tabled in the House by Health Minister Dennis Cocke said that the death rate remained at 8 per per 1,000 population in 1971 to 15.5 per cent in 1972. But during the year population increased by 62,000 to a total of 2,247,000."

Our population is growing and, as I have said before on the floor of this Legislature, our unemployment rate is growing.

HON. MR. MACDONALD: Have you mentioned that before?

MR. PHILLIPS: Yes, I've mentioned that before. Unfortunately, Mr. Chairman, no one has given any direction as to what direction the Government intends to go to decrease this increasing unemployment rate.

I have another article here which is dated last October and it says: "Car plant for British Columbia." I would like to ask the Minister when he intends to cut the ribbon to inaugurate this new car plant which is planned for British Columbia, how many jobs it will provide and where the money is coming from — maybe that's an unfair question to the Minister of Industrial Development, Trade and Commerce.

We've heard a lot about this. There was a big announcement in the paper and still we haven't seen anything concrete with regard to the establishment of this automobile plant. I am just wondering if one of the motions that came out of your conference last fall, which was urging the socialist governments of Manitoba, Saskatchewan and British Columbia to get together and manufacture a pollution-free automobile, if this is going to happen or if you're going to get together with a company in Japan? Maybe the Minister would answer that question.

Now we just heard a talk here a few moments ago from one of the Liberal Members who talked about secondary manufacturing in British Columbia. I think if we're going to talk about any great amount of employment in secondary manufacturing in British Columbia, that we've got to take a very broad look, Mr. Chairman. If we're going to manufacture items in British Columbia, we're going to have to manufacture them for the export trade.

If we're going to manufacture them for the export trade, we're going to have to have some trade concessions with our trading partners. If we're going to compete on the world market we are going to have to have some trade concessions.

I don't think that our secondary manufacturing, unless you're prepared to put many millions and millions of dollars into plants, is going to be able to compete with the already established manufacturing plants of eastern Canada and Ontario. If you are, Mr.

[ Page 1052 ]

Chairman, through you to the Minister, you're going to have to deal with Ottawa to get some decent freight rates.

Otherwise, you're going to have to manufacture things in British Columbia which are going to be sold on the world market. You're going to have to make deals with the countries to which we are now exporting our raw materials. There is going to have to be a saw-off somewhere.

To stand on the floor of this Legislature and make grandiose statements about increasing our secondary manufacturing in British Columbia is all very well and good. But as I say, you're going to have to sell those goods. Are you going to compete with the Japanese electronic industry? Are you going to compete …

HON. MR. MACDONALD: Why not?

MR. PHILLIPS: Well I say this is good. But what I'm pointing out, Mr. Chairman, is that if you're going to compete with the electronic industry of Japan, you're going to have to have a market. I don't think that you're going to sell electronic components or transistor radios or stereo equipment components, manufactured in British Columbia — I don't think you're going to be able to sell them to the Japanese market.

I really don't think you're going to be able to sell them to the Chinese market, although I wish you could, because the market over there — I wouldn't mind having the franchise in China for toilet paper, for instance.

I think if we could manufacture all of the toilet paper that's required in Communist China, if we could manufacture that here, if we could just get a franchise for that — or even toothpicks — you would have … I'm talking about the potential. With the potential market in China you would really be able to put a lot of people to work in British Columbia. What I am pointing out is that you've got to have a market.

There's been a lot of talk recently about the Autopac, and there was a lot of criticism of the Autopac when it was brought in. I think that one great thing the Liberal government of the day did was establish the Autopac. There was a lot of criticism over it, but it has done more to provide jobs in Canada in one manufacturing industry than any other single move made by any government before or since.

As a matter of fact it was so good, as you know, Madam Chairman, for Canada, that there was pressure from the United States to withdraw the whole deal. This is the type of deal I am talking about. It's got to be concrete and it's got to be planned.

You've got to deal with other governments and say to them, "If you want our raw materials, Mr. Japan, Mr. Britain, Mr. European Common Market, if you want our lumber, if you want our coal, if you want our minerals, you're going to have to accept with them some of our manufactured items."

I would suggest that the things that we can best manufacture in British Columbia in secondary industry are going to be those related to the products that we have. This is where Ontario, for instance, was able to benefit so much from the Autopac. They took the nickel from their mines and they manufactured parts for automobiles, such as grilles which require a lot of chrome; they used castings because they had the iron ore, and they manufactured the things in Canada that they could manufacture.

They didn't go in and try to compete with the electronic parts or frames because that was all set up in the United States. But they did manufacture castings which they had the natural resources to use. They had the manpower. They had a lot of plants that were already established and all they did was enlarge on them.

I think we've got to take a realistic view about where we're going. There's been a lot of talk by the Member for Vancouver–Point Grey during either the throne speech or the budget speech about Austria. He was talking about Philips electronics parts — no similarity.

[Ms. Young in the chair.]

HON. MR. MACDONALD: Any conflict of interest?

MR. PHILLIPS: I think this is all very well and good for a Liberal to stand on the floor of this House when they have squandered billions from this subsidizing of industries that really didn't need subsidizing. They're going ahead with doing the same thing now with the CDC. And you watch the political implications of the Canadian Development Corporation, because they have made one mistake already.

This is why, Mr. Attorney General, I would like you to give us some direction about where we are going. Because there is a vast opportunity, you as the Minister have a great obligation to the people of British Columbia. If you want to change the direction of this department you certainly have the opportunity to do it. But along with that opportunity, Mr. Minister, is the obligation to do it and do it properly and not just do it in an ad hoc fashion.

As you know, Mr. Minister, in our area it's practically a depressed area now. The federal government are coming out here very shortly and they're going to ask that you designate two areas in British Columbia to be incorporated under the DREE programme. Mr. Minister, will you recommend that the depressed Peace River area be incorporated under this programme?

MS. CHAIRWOMAN: The Hon. Minister of Industrial Development, Trade and Commerce.

[ Page 1053 ]

HON. MR. MACDONALD: The Hon. Member for South Peace River (Mr. Phillips) asked about the manufacture of furniture components from B.C. softwood. There has been a governmental study on that subject and one company — I don't want to name it — is actively looking at it with the assistance of the department at the present time. No question of assistance at this time because we haven't entered the phase of a development corporation.

On any requests for that kind of assistance our policy has been they should wait until we have a proper programme in that field where we can have the economic research to test things out and the scientific research to make sure it's a feasible operation and productively sound before we go into active assistance in any quarter.

In connection with car manufacture in B.C. or car assembly, there is nothing to report at the moment. In connection with asking that the Peace River be designated — I haven't been asked for an opinion on that subject. The federal government has designated the east and west Kootenays, as the Hon. Member knows. I don't think they're about to designate another area of this province, but I don't know. Possibly you know the answer to that.

The Hon. Member for West Vancouver–Howe Sound (Mr. Williams) said what about research? Well, we have a very excellent vehicle in the B.C. Research Council. You know, we contribute to them about $300,000 — it's not very much. It's about 12 per cent of their budget, because they make a lot of money through direct services to industry or to government.

We should expand their research facilities, because they're very good and they're very imaginative, and possibly expand them out into some kind of an industrial research park such as they have in Ontario at the present time.

Apart from that we are prepared to and do employ now outside consultants. For example, I think I mentioned earlier alfalfa cubing. Well on a subject like that we haven't got the expertise within the department to look at that, so we get an outside consultant to examine the feasibility of that particular kind of industry.

AN HON. MEMBER: That's an old study.

HON. MR. MACDONALD: I know, but I think it stands …

Interjection by an Hon. Member.

HON. MR. MACDONALD: Yes, I think so.

The Member for West Vancouver–Howe Sound (Mr. Williams) said "What about foreign offices?" As I said, I don't think that we should give up the idea of trade missions in different parts of the world. But unless we have a programme to sell through a mission out there, there's no use having the mission. So we'll develop the programme around particular products based on research that we think can be sold in particular parts of the world.

AN HON. MEMBER: Name one.

HON. MR. MACDONALD: Name one product or one area?

MR. WILLIAMS: One product.

HON. MR. MACDONALD: Well, I just mentioned in the case of logging equipment we're thinking of participating in a trade mission in the southeast Asia area, because they have a lot of lumber and it's a growing industry there. We may be able to sell some of the hardware. That's one example. But the examples are legion.

We participate too with industry in the cooperative overseas marketing programme of the Forest Industry Council, where they do the research and try to sell the specifications that will enable us to sell plywood and other wood products — in this case in the European Common Market. Instead of doing ourselves, we want to be flexible. If some other body has the skilled personnel to undertake that kind of a foreign campaign for sales, let them do it and we'll participate.

In terms of the Member for West Vancouver–Howe Sound (L.A. Williams) saying, "Why talk equity to these companies?" You'd be surprised how many companies in civilized parts of the world welcome public equity participation. It's no longer a dirty word in industry I can assure you. There are many examples of big international concerns like Brascan, for example, who have equity arrangements with governments or public bodies in many parts of the world. They welcome that kind of mutually beneficial relationship. So let's not think that these equity arrangements are driving people away. It's only one of the things we can use, but it's a very useful tool in many cases.

MS. CHAIRWOMAN: I recognize the Hon. Member for South Peace River.

MR. PHILLIPS: I am informed by recent conversation with Ottawa that within the next two weeks they will be sending a representative out here asking your department for two areas to be designated in British Columbia. Now we have a commitment from the Premier he would back up the Peace River area. We have a commitment from the Minister of Agriculture (Hon. Mr. Stupich). But you are the man; your department will be making the decision. Would you support us for a DREE programme, Mr. Minister?

HON. MR. MACDONALD: Well, I'm not going to make a commitment about a particular area at this time, before the request is received. But let me say that with all of the federal programmes, one of the major tasks of this department will be to tie in and

[ Page 1054 ]

take advantage, for the sake of British Columbia, of all those federal programmes that exist.

For example, there's one for technical assistance and it applies particularly to the electronic field. It was mentioned by the Hon. Member. Well we can't sell electronic things in Japan, but we can sell them to B.C. Tel; we can sell them in the American market on a small scale.

We have to be ready to understand the federal programmes, have a very close relationship with the federal government, and be ready to take advantage of them. I'm quite sure in Ontario, that the provincial government is on the doorstep of the various agencies of the federal government every day to see whether there isn't some federal money that can be used in the industrial development of Ontario.

We've been neglecting that because we'd almost cut off relations with Ottawa behind the Rocky Mountain barrier. When you talk about a mission, or an office of the department in other parts of the world, it may be that one of the places that we should first consider would be Ottawa or Toronto.

Interjection by an Hon. Member.

MR. MACDONALD: Yes, that's right. The Ontario government, of course, has a very important provincial industrial aid programme, and in many respects it's worked pretty well.

MS. CHAIRWOMAN: The Hon. Member for Oak Bay.

MR. G.S. WALLACE (Oak Bay): Madam Chairman, I'd just like to follow on the comments of the Minister regarding trade missions.

I've had the opportunity to talk this subject over with a retired trade commissioner for the federal government. He made the point very sincerely, from experience, that he feels — and this isn't just British Columbia that he was criticizing — but he was most sincere in suggesting that the provinces either are not aware of the depth and scope of federal assistance available in terms of commissions, or for one reason or another, they feel somewhat parochial and don't realize that the federal staff are in fact representing the whole of Canada.

There is a great fear apparently by provinces, and again I'm repeating that it is not just British Columbia, but all provinces seem to fear that the federal trade missions or the federal agents — high commissioners and so on, or trade commissioners — tend to relate their interest to one or other part of Canada, when in point of fact they do relate the information to the prospective buyer or seller in relation to the part of the country that that person may be interested in.

The foreign trade service abroad — as a matter of fact, the actual publication which lists all the offices, and I have it here — has 80 offices with some 200 officers involved actively in researching markets in all parts of the world. One of the points that this gentleman raised was that there is always the danger that some of these markets and places in Europe become a little less than enamoured with our so-called trade missions who are nothing more than a bunch of tourists with cameras around their necks and an eye on the Paris night-clubs rather than really sincerely being on a trip to find out about available markets either to sell or buy in Europe.

MR. WILLIAMS: Name names.

MR. WALLACE: My friend didn't name names and I don't think that would be needed. But on the other hand, Mr. Chairman, this man has had wide experience in this field, and I think, incidentally, that he's the kind of man who would be very willing to volunteer his services in any way now that he's retired and living in this area. He has a wealth of information from various parts of the world, and he mentions that frequently he was approached by provincial trade representatives.

AN HON. MEMBER: Derril Warren.

MR. WALLACE: No his name isn't … no you've got the wrong name. (Laughter).

Seriously, Mr. Chairman, this kind of advice I don't think should be laughed at. This man has a wealth of experience and I'm sure that there must be others with the same kind of experience who know the various routes we can follow to get the best information quickly and accurately.

He pointed out that if any provincial trade commission is really serious about going to any country or countries, there is a tremendous amount of help which the federal people in the federal trade mission can provide. He went further to say that frequently the taxpayer is paying twice because the provincial trade mission tries to arrange its own trips and often arrives with inadequate information or poor planning, which could easily have been forestalled had they in fact consulted the federal people in the first place.

I think that in light of this fact, also the fact that there is this monthly publication called Canada Commerce. It's interesting to quote the new Minister of Industry, Trade and Commerce, Alastair Gillespie, who says here, "I have two objectives in mind. One is to provide better and speedier service to industries in all regions, and particularly to small businesses. The other main aim is to improve our liaison with provincial governments."

So I think that this statement by the new federal Minister of Industry, Trade and Commerce, indicates that he also feels that this is the answer, or at least part of the answer, to our more effective development of foreign markets.

[ Page 1055 ]

[Mr. Dent in the chair]

MR. CHAIRMAN: I recognize the Hon. Attorney General.

HON. MR. MACDONALD: I'd just like to make a brief comment about what was said by the Member for Oak Bay. I think his remarks are very well taken. I think it's been a great waste for B.C. that we haven't taken advantage of the federal trade services. We have to supplement them, but in Seattle we have a Canadian Consul General with at least one trade commissioner, Ray Anderson, there — and just as anxious to help B.C. as any other part of Canada. In San Francisco, you've got Jim Nutt, a very capable, aggressive public servant as Consul General, and I think he has two trade commissioners attached to his office.

In the case of the Southeast Asia mission that I mentioned as a possibility, naturally, we're discussing that with the federal government because we hope that it would be a joint endeavour. They're thinking of it too.

MR. CHAIRMAN: I recognize the Hon. Second Member for Vancouver–Point Grey.

MR. G.B. GARDOM (Vancouver–Point Grey): Mr. Chairman, the Hon. Minister has really landed on his feet concerning this particular portfolio, because he used to describe the former Minister as being as useful as a bathtub duck. So I think perhaps the only thing that we can expect coming across the floor is total success, at least from that initial starting position.

I'm happy to see that he's furnished us with the structure plan and, if nothing else, he's certainly indicated that he's given serious thought to the restructuring of his department and his department has no doubt initiated a great deal of that themselves. But I think we need a great deal more, as he well appreciates, than a campaign headquarters chart to produce an effective programme.

It's rather unfortunate that he has two strikes against him from the start, and I'm going to ask him what he can possibly see that he can do to overcome those two strikes. The first one is going to be difficult for him because it would mean a change of philosophical posture which is not possible, but taking on this department and bearing the socialistic banner, I think, is a very difficult fence for him to walk.

We have found in B.C. that the capital is scared. We have found these words from a report, "Although an average 10 per cent increase in capital investment is predicted across Canada in 1973, British Columbia will have only a partial share in it, according to a survey done by the B.C. Industrial Development, Trade and Commerce Department:

" 'B.C. will not share fully in this gain because a number of very large resource projects were completed during 1972 and few are in the offing for 1973.' "

Those are rather significant words and I'd like to have the Minister's comments as to why there are few in the offing for 1973. Is this part of the pulling in of the horns of the business community pending its becoming aware of the philosophical and socialistic direction of this current administration?

I think that rather than doing what the Government can do to detract from producing a satisfactory and indeed an enviable business climate, it should be doing everything it possibly can to attract it. I much appreciated the remarks of the lady Member for North Okanagan (Mrs. Jordan) a few moments ago on that point.

Secondly, I do not feel that the Hon. Minister has really given serious enough weight — thought he has given — but serious enough weight to the point that was raised by the Member for West Vancouver–Howe Sound (Mr. Williams) and the point that has been raised in this House before by the First Member for Vancouver–Point Grey (Mr. McGeer) and other Members of this party, and that is the tremendous amount of emphasis that you should really be giving to the creation of this scientific industrial research park.

You mentioned to the House the situation in Ontario, in Sheridan Park. We know that these things have produced a fantastic amount of development, a fantastic amount of jobs, of spin-off industries in other industries in North America, and this is just absolute sure gold insofar as producing more work, insofar as producing more products and certainly insofar as producing a line towards effective secondary manufacturing in B.C.

British Columbians still have to learn, Mr. Chairman, to process our natural products ourselves and not just cut them and dig them, cache them and then ship them away. I think that we really should be heralding in B.C. This is the kind of statement that I would like to hear coming from the Hon. Minister. I'd like you to stand up and say, "I'm going to herald the demise of the policy of extract and run in the Province of B.C."

We enjoy the greatest of raw materials. We enjoy the best supply of natural energies and there's one label that we should have in B.C., the dominant label, and that should be "Made in B.C." It's a label that we should be proud of and it's a label that every British Columbian should be able to find pretty well in every area of the world that he can go.

You must go ahead and really give terrific emphasis to research. Your bill in this regard seems to be a reasonable step along the line. But I do feel that this research area is one that should not be neglected. That's where the breakthroughs happen. Otherwise we just end up being "me-tooers." But then again, we don't end up being "me-tooers" because we do not have the necessary vehicles which grow around these research areas to do the job.

HON. MR. MACDONALD: Would you recom-

[ Page 1056 ]

mend UBC campus?

MR. GARDOM: I would recommend UBC campus for the principal reason that the expertise seems to be gathered there in the greatest of numbers. We've also known, Mr. Minister, in the past, that the industries in the Province of B.C. have expressed a great deal of willingness to participate in such an endeavour. Unfortunately that willingness was never properly taken advantage of by the former administration. I think you could do a great deal here.

I think along this line we should be looking more at what we actually do use in the Province of British Columbia. Look at the unique uses that we do enjoy in B.C. and you'll find some degree of continuing market there. If you could volunteer some kind of bold or exciting expertise and assistance in doing just that, you'd certainly be making a great step along the line.

We log and we fish and we mine and we farm and we've got to communicate in this province over enormous areas. For example, the need for transport vehicles. Surely to goodness we can place far greater emphasis upon the making of the machinery and the making of the tools or the articles required for the production in the primary fields that we do have here, and also to cover the great distances we have to cover in the Province of British Columbia, instead of importing all these things as manufactured goods.

I say that we can do that in B.C. I say that we can make logging equipment, fishing supplies, mining machinery and farm implements — even aircraft — and make B.C. have the label that it's "Made in B.C."

Before sitting down I would like to ask the Hon. Minister what his attitude is to the eventual concept of continental-wide free trade. Will it be the position of your Government that you'll be advocating through the federal side — it will probably be next to impossible to do it alone as a province — but will you be emphasizing to the Government of Canada that British Columbia is in favour of continental free trade?

I think the day that we find that we can have continental free trade in British Columbia, you'll find that we'll be buying several of our articles for 30 and 40 per cent less than what they cost today and that the markets that we have for our own British Columbia goods will increase and we'll enjoy a prosperity that we've never ever enjoyed before.

MR. CHAIRMAN: I recognize the Hon. Attorney General.

HON. MR. MACDONALD: The first question that the Hon. Member asked was about capital investment in British Columbia. I don't think we need to be discouraged. The year before last I think it was $3.76 billion; last year $3.73 — yes, it went down a little bit from 1971 to 1972 — but in this year I think we'll probably level out at about that last figure.

Now you've got to bear in mind that three pulpmills have been completed in the last year. That's a pretty big segment of capital investment. But there will be another round of construction. If our economy remains strong and healthy enough to keep that capital investment up at that very high, for British Columbia, constant level of around 3.7, we'll have a good year.

There are big projects in the energy field and in many other fields. In the coal fields and the manufacture of ancillary equipment related to getting that coal to market onto tidewater and many other things there are exciting possibilities. I think our capital investment picture is good.

In terms of the industrial park, that's very well worth exploring. In terms of free trade as British Columbians, of course it benefits us to free trade — I don't think it's going to be done with one fell swoop at any time. I think it's industry by industry. But whenever we who sell our products on the market can get our manufactured imports or our other imports in a free trade area, it's much to our advantage. But I think it's going to have to be explored area by area.

MR. CHAIRMAN: I recognize the Hon. Member for Columbia River.

MR. CHABOT: Thank you, Mr. Chairman. I know that the hour is late….

AN HON. MEMBER: Oh, no.

MR. CHABOT:…. and I'll be as brief as possible. It's quite obvious to me that the hour is late because of the high absence of the Members in the backbench — about 23 of them missing at the moment.

Nevertheless, we're discussing a very important segment of government …

AN HON. MEMBER: That's better than you guys ever had.

MR. CHABOT:…. which no doubt — that's not true and you know it, Mr. Minister of Health.

MR. CHAIRMAN: Order please.

MR. CHABOT: Tell the truth for a change.

MR. CHAIRMAN: Order. Would you confine your remarks to the estimates.

MR. CHABOT: We're discussing a very important segment of government, a segment that holds the key to the future in British Columbia. Unfortunately there is legislation — and I'm not going to fault the Government, because we also have a private Member's bill on the order paper dealing with incentives to industry. It does to a certain degree I guess, at this particular stage in your estimates, kind of confine the debate. Nevertheless, we'll have an opportunity at a later time to discuss that particular segment when the

[ Page 1057 ]

bill appears on the floor of the House.

Unfortunately, Mr. Minister, I wasn't here when you started to show your graph relative to the restructuring of your department and so forth when I first came in.

AN HON. MEMBER: Where were you?

MR. CHABOT: I happened to be in my caucus room, Mr. Second Member for Vancouver Centre (Mr. Lauk) I'm glad to see you're here for a change.

It's difficult for me, Mr. Chairman, to say whether the Minister was giving us a snow job or not. But I do want to say, and I think it's most important that it be said at this particular time, because we're dealing with a very sensitive department of government, and I think that it's most important to indicate to the Minister responsible for the administration of this department that statements made by the Premier and statements made by him relative to the threat of take-over of various industries in the province have had a detrimental effect on the attraction of investment capital in this province.

To date you have threatened to take over everything but the funeral parlor industry in British Columbia.

HON. MR. MACDONALD: Have we missed one?

MR. CHABOT: Just about everything. You had better mark that down, Mr. Minister, it might be another one to take over. Do you really believe that your monopoly insurance legislation, that your dictatorial Land Commission Act…

SOME HON. MEMBERS: Oh, oh!

MR. CHABOT: … that your amendments to the Revenue Act…

MR. CHAIRMAN: Order, please. Would the Hon. Member not refer to bills which are on the order paper?

MR. CHABOT: I'm not discussing them, I'm just using the names. Is there anything wrong with using the names of this legislation?

MR. CHAIRMAN: I would point out to the Hon. Member that it is improper to mention the bills on the order paper in your speech.

MR. CHABOT: You didn't. It is improper? I'm not discussing the bill to any degree; I'm just mentioning the names of the bills in passing.

HON. MR. MACDONALD: The Member didn't indicate whether he was for or against those bills, I think, unless it was the inflection of his voice. (Laughter).

MR. CHABOT: Would I call them dictatorial, monopoly, and then support them? Your unnecessary, punitive tax measures as well …

HON. MR. MACDONALD: O.K., so you are doubtful. (Laughter).

MR. CHABOT: … will certainly not attract investment capital to British Columbia. You seem to fail to understand, Mr. Minister, that it takes investment capital to create jobs, and that it takes dollars. You fail as well tonight to tell us what your programme is. You might have shown a graph here, but I don't think it was sufficiently comprehensive to indicate a programme of job creation in the field of secondary industry.

I remember very well the years when you people sat on this side of the House when you had, at that particular time, all the answers on job creation. Now you are the Government and you have no answers. No answers at all.

I think that it is important, Mr. Minister, and it can't be repeated often enough, that in British Columbia at this time we have the highest degree of unemployment in the history of this province — 9.9 per cent of the labour force is unemployed, 95,000 people are seeking gainful employment.

HON. MR. HARTLEY: Inherited from Social Credit.

MR. CHABOT: Well, we have heard from the Minister of Public Works (Hon. Mr. Hartley). "Inherited from Social Credit."

MR. CHAIRMAN: Would the Hon. Member please address the Chair?

MR. CHABOT: Mr. Chairman, when this Government came into office on September 15, unemployment was 6.3 per cent; today it is 9.9 per cent. Fifty per cent more people are unemployed in this country.

I'll tell you why there is such a high degree of unemployment, Mr. Chairman. It is because of the foolish, irresponsible statements from that Government since they have been in office, Mr. Chairman. That is what the unemployment is all about. Unless that Government changes its attitude towards investment dollars in this province, unemployment will continue to increase in British Columbia.

HON. MR. HARTLEY: So we hear it faced with gloom.

MR. CHABOT: You can use all the phony socialist cliches you want, Mr. Minister.

MR. CHAIRMAN: Would you address the Chair, please ?

[ Page 1058 ]

MR. CHABOT: Phoney socialist cliches. You can use all you want. But those people who are looking for jobs, Mr. Chairman, won't appreciate those foolish socialist cliches from the Minister of Public Works. Those people want jobs, not cliches from the socialists. They want jobs.

We are discussing a very sensitive deparment of government that has a responsibility to create jobs. The Minister turns his back and smiles while I discuss the very crucial and critical and shameful degree of unemployment in this province.

AN HON. MEMBER: What a phoney!

MR. CHABOT: A shameful degree of unemployment in this province — 9.9 per cent of the people unemployed and you have no answers. And all we hear from the Minister of Public Works is a bunch of phoney socialist cliches. That is all we get from him.

MR. PHILLIPS: Shameful performance.

MR. CHABOT: Yes, you had all the answers when you were in Opposition but you have failed since you have been in Government to outline what your policies are that would create jobs in British Columbia. You have failed to indicate what your policies are for the attraction of secondary industry into this province.

You know, if you continue along the basis of issuing these foolish, irresponsible statements of take-over and punitive taxation, you might as well do away with that department. You might as well do away with it, because it will serve no worthwhile purpose in this province, because you will never attract secondary industry with those foolish, irresponsible statements coming from the Premier and other Ministers of that Government.

HON. MR. MACDONALD: Support your Premier.

Interjections by Hon. Members.

MR. CHABOT: We have certain strikes against us. We have certain strikes against us in the field of attracting secondary industry into British Columbia. Number one, I would think is the fact we fail to …

AN HON. MEMBER: Number one is the Premier.

MR. CHABOT: I have already outlined that as number one.

HON. MR. MACDONALD: You passed his salary. Now deal with me.

MR. CHABOT: Really, we fail to have a comprehensive internal market for the consumption of secondary manufactured products. Number two really is the fact that we have a high wage structure in British Columbia. I am not opposed to that high wage structure. Nevertheless, these should be taken into consideration when we are attempting to attract secondary industry into British Columbia.

One other factor, of course, is the labour unrest that we have had in British Columbia over the last few years. That has contributed to the failure to attract secondary industry. I want to say this, that that public sham battle going on between the Minister of Labour (Hon. Mr. King) and Mr. Haynes of the B.C. Federation of Labour isn't conductive to the attraction of secondary industry into British Columbia.

If you are the friends of labour, as you indicate you are, I wish you would tell those people who are carrying on this sham battle, and that's what it is, that they cease and desist and stop jeopardizing the possibility of attracting secondary industry by irresponsible and insincere battles in the Press. No, labour costs, labour problems and the lack of markets are substantial contributing factors to the failure to be able to attract secondary industry in British Columbia.

In the United States, just last year of all the jobs created there, 70 per cent of those jobs were in the secondary manufacturing process. I am wondering whether the Minister of Industrial Development, Trade and Commerce has a particular objective in mind for British Columbia for the forthcoming year. What is his objective as far as creation of jobs? Could he give me some indication as to the percentage of new jobs that will be related to the field of secondary industry?

As I said before, we need a more favourable climate than that which has been projected over the last few months in order to attract jobs, in order to attract investment capital which in turn creates jobs. Secondary manufacturing is the type of manufacturing that we should encourage to come to British Columbia, because primarily much of it is clean industry. We can be selective in the type of industry that we are prepared to accept in the province.

I think we also should look, if we are genuine in the promotion of secondary industry into British Columbia — I think the time has come. No doubt it will be changed in a month or so by the appointment of a full-time Minister in this portfolio.

I think in view of the fact that we do have these strikes against us, the labour unrest, the lack of an internal market and the high age structure, that we should, in some instances, in order to attract secondary industry to British Columbia, have some form of incentive to offset those strikes that we have against us.

When I say incentives, I'm not suggesting that you should go into the type of incentive programmes which the national government entered into, such as

[ Page 1059 ]

the one in the Okanagan. It certainly did attract industry to the Okanagan but I think that in many instances it was an unnecessary type of incentive, and that it was not directed to what I consider to be the poorer parts and the areas of B.C. that needed the assistance. So the guidelines were basically wrong, and I would hope that the Government would give some serious consideration to incentives of some description.

We do have a lot of bad marks against us in order to attract secondary industry. I think it's going to take some form of not only proper climate but some form of incentive to get secondary industry into British Columbia.

I hope when I sit down very shortly that the Minister will outline to us what his programme is, whether he does have a programme. Because in years gone by, Members of your party have indicated very clearly that if they ever did become Government that they had a programme and ways and means of attracting secondary industry to the province. I'm sure in view of the many years in which you've prepared that programme no doubt the Minister is in a position tonight to tell us what that programme is and when that programme will be implemented.

One other brief question, Mr. Chairman. I am wondering if the Minister, and I am sure he does, realizes that the United Kingdom has entered into the Common Market. I wonder if he'd explain to us what he considers to be the effect of the entry of the United Kingdom into the Common Market, the effect on the sale of British Columbia manufactured products.

MR. CHAIRMAN: I recognize the Hon. Attorney General.

HON. MR. MACDONALD: Mr. Chairman, in relation to unemployment I am not going to try and give the whole policy of the Government in this field, because we've done that in the budget debate. But you have to bear in mind that British Columbia is a very high population growth area — 2.9 per cent any part of North America — because B.C. is an attractive province. I add that that rate of growth is going to continue because of our attractive Government, and the climate we have created.

I don't minimize for a moment the magnitude of the task in terms of finding employment. It took, I think, 21 years to create the last 500,000 new jobs and, based upon the growth in our labour force, it's now estimated that we have to do the same thing. We have to create 500,000 jobs in the next 9 years if everybody is to be employed. So I don't minimize the challenge that this presents.

Now as to the European Common Market, agricultural products don't affect us so much, but they will be hurt somewhat of course by Britain's entry. Our plywood products — as I say, we've got an aggressive sales campaign because there will be a tariff on plywood over a period of time.

On the other hand, to take that one product — and I think it applies in many areas — instead of our selling to Britain, our sales to Britain will be a little bit curtailed or will be a little bit more of a challenge. But on the other hand we have opening up to us the opportunity of nine European Common Market countries. That's the kind of challenge that faces us.

I would say that the threat to our exports is overshadowed by the great opportunity we have to break into that European Common Market and trade with all nine of those countries and export to them.

It may be in terms of trade missions. We've talked of various parts of the world which are very important in this respect. What you might call continental Europe, in the Frankfurt area, is a very important point for us to some time have perhaps a trade mission, perhaps a trade office that is an outpost of London House in that part of continental Europe. If not, London House with its industrial trade officer, should be at least as much concerned with the continent.

You take B.C. coal. There are many other products that, if we're fully aware of the possibilities in that new market, I think they are good opportunities for export.

MR. CHAIRMAN: I recognize the Hon. Member for Columbia River.

MR. CHABOT: I notice in your report that the United Kingdom purchases approximately 64 per cent of the export plywood from British Columbia. Do you feel that you can increase this percentage or will there be a material decrease in the percentage of plywood that is sold in the United Kingdom? Do you feel that the $660,000, I believe that's what the funds are for, the cooperative overseas market development programme, I believe that's geared to plywood. Do you believe that there is justification for the expenditure of roughly two-thirds of a million dollars? Do you think that this type of expenditure for the promotion of the sale of plywood in the Common Market, that there will be an increase in the purchase of this product in the Common Market that will offset the possible decrease in Great Britain that would justify the expenditure of $660,000?

HON. MR. MACDONALD: Oh, yes. The answer is yes. I feel that's good money well spent. There's a one-third federal share, one-third industry share. If you say the federal government are soft-headed about spending their trade money, industry isn't. They believe that to put up their one-third is good, hard-headed business and the need for expanding plywood sales to take advantage of the capacity and

[ Page 1060 ]

to work our raw material up to its highest, most useful product, is a challenge. So we think that, putting it in terms of employment, putting our money into the promotion of plywood sales is the best way we can get the greatest possible dollar return for the forest product of British Columbia. I'm very optimistic about it.

MR. CHAIRMAN: I recognize the Hon. Member for West Vancouver–Howe Sound.

MR. WILLIAMS: Thank you, Mr. Chairman. It's interesting that this late in the evening we get down to some serious consideration of this important portfolio — when we begin to get an insight into the extent which the Minister and his Deputy and his staff are concerning themselves with the problems the Members are raising.

The Minister pointed out, and we all recognize, that British Columbia is enjoying a very high population growth from immigration of people into British Columbia. But that, Mr. Chairman, only intensifies the responsibility of this department and places upon the Minister and his staff even greater burdens.

We cannot be heard to say, surely, that with 95,000 or 100,000 unemployed that the reason is that we have such high immigration and therefore we can rest on our oars and do as has been done in past years. You must do more. It's the obligation cast upon you. You have to fulfill your role.

The Minister speaks about the capital investment in British Columbia on an annual basis — $3.76 billion two years ago, $3.73 billion in the past year and he hopes that it's going to flatten out at that level. Mr. Chairman, with an increasing population of the percentage that the Minister mentions, flatten out you cannot do, because in order to keep pace with this increasing population and the demands that that population places upon you, we must have continuing capital investment.

It's true that in the past years we had pulp mills built, high capital requirement development. Hydro electric facilities, power development facilities — high capital requirement.

I say to the Minister — he's got his deputies here and they must have made some examination into the matter — will he please indicate the high capital development projects which we may expect to use up $3.7-odd billions of dollars in this next year?

I am sure that the Minister's staff meets with people in this province, as many Members do, and certainly as I do. He must be concerned, as I am, to learn from engineers and the like that the drawing boards aren't very full. Many of our engineers are busily engaged, it's true, but because of their skills they're busily engaged in the design of facilities in other countries, not British Columbia.

Therefore, I ask this specific question of the Minister. What major, capital, intensive developments is he prepared to outline to this coittee here tonight that will take place in British Columbia in the next year?

AN HON. MEMBER: Sukunka coal.

MR. WILLIAMS: All right. Sukunka coal. That's fine. Then I'll ask the Minister this question. Just don't give us the name. Will the Minister please tell us how much capital investment there will be in the Sukunka coal operation in this next fiscal year at the mine? If the Minister wants to indicate that perhaps British Columbia Rail is going to be involved in the transport of this coal, would he please tell us how much of the taxpayers' capital is going to be invested in facilities for the transport of that coal.

Somehow or other, Mr. Chairman, we've got to get these answers on the floor of this committee.

It's interesting. We talk about the need to create jobs. We talk about the necessity of having a department which will fulfill this responsibility. The Minister of Finance last night gave indication that British Columbia Rail was going to place at risk, Mr. Chairman, moneys of the people of the Province of British Columbia to the extent of $7 million. At risk. That's also the result of research and development innovation. .

That's more money than we're told this whole department is going to spend.

MR. CHAIRMAN: Would you state your point of order.

HON. MR. MACDONALD: I think that the Hon. Member is straying from the subject of this estimate. I'm not responsible under this portfolio in any way for that particular project.

MR. CHAIRMAN: Order please. The point is well made in that the British Columbia Railroad is the reponsibility, or has been considered under the Premier's estimates.

MR. WILLIAMS: The point, Mr. Chairman, is not well made, I suggest to you. The investment is not well made. The Minister raised this and I am only pointing out that we have one indication from the Minister of Finance of British Columbia …

MR. CHAIRMAN: Order please, would the Hon. Member … I made a ruling that this should not be considered at this time, and would he proceed on to another subject.

MR. WILLIAMS: You can rule all you want, Mr. Chairman, but the fact of the matter is I was relating this to the total expenditure under this department —

[ Page 1061 ]

less than $7 million. So in one risk investment, we're prepared to spend more than this department, which has the responsibility for providing the incentives for jobs in this province, is going to spend over the next 12 months.

So I say to the Minister — he says that our capital investment in British Columbia has got to be $3.7 million. That's 500 times as much as the Premier's going to invest in Sukunka. I just asked him the question, would he please indicate the projects of which his department has knowledge that will result in that kind of capital investment in British Columbia in the next fiscal year?

You must know that question; you've indicated it's going to flatten out and stay there. Now what's the basis for that statement? We're entitled to know because if the capital investment is not going to flow into British Columbia at that rate, then the employment situation is going to worsen.

It is the government's responsibility to correct that situation. The Minister talks about Sukunka and he says we'll build coal cars. He could build coal cars that would fill every inch of track that we've got in this province and you wouldn't really do anything to solve the job problem.

HON. MR. MACDONALD: It certainly helps.

MR. WILLIAMS: You don't really think that you're going to tackle 95,000 jobs through the building of coal cars. No, the Minister talks about the coal situation and about the thing that's going to happen. The Minister of Finance (Mr. Barrett) suggests that we're going to produce a lot of jobs because of the government's investment.

It takes the same number of men to mine the coal. It takes the same number of men to load the coal from trains onto boats, whether we invest the $7 million or not.

So we're not creating any new jobs, and let's not try to confuse the troops with that kind of suggestion. The fact of the matter is — and to come back to the matter of research and development — the Minister stood in this place and said that they contribute about $300,000 to the B.C. Research Council, a fine organization.

The Minister said, in his words — it's very interesting to note his words; "we should do more." Well why don't we do more? Why is there not in your estimates tenfold that money for research in British Columbia? Because the fact of the matter is, if you look at the statistics … and the Members shouldn't be confused by this. You take one major American company, IBM for example. Their gross product is more than our whole forest industry — one company.

The basis for IBM's success and existence has been research and development. They kept ahead of everybody else. We can criticize many of the things that IBM may do, and they get themselves into all kinds of anti-trust suits and so on. But the fact of the matter is that, based upon competent research development and innovation, that one company grosses more than our whole forest industry, which is half of the revenue producing capability of this province.

We speak of our mining industry and this involves the coal. The production from the 3M Company in Scotch Tape is almost as much as we get out of our mining industry, and that also is the result of research and development and innovation.

So I agree with the Minister, we should do more for B.C. Research. We should expand it. It's a good base, largely employed by industry in this province. But why isn't it employed by government much more? Why isn't it financed by government to move into new areas altogether — not related to some of the industrial problems which we currently have — but to move into those fields that we must approach if we're to get a toehold in the field of secondary manufacturing and industrial development.

Those are the kind of answers that we need to have from the Minister. Are you going to recommend it? When is it going to start? Because every week, every month that we wait is one more week and one more month that the unemployment rolls in British Columbia will continue to rise.

May I ask the Minister in connection with the same subject, what is the relationship between his department and the Hon. Minister of Education (Hon. Mrs. Dailly) to ensure that we have, along with our development of new secondary industrial opportunities in this province, the supply of skilled young men and women who will fill the needs of those industries? Because as much as any other natural resource — power or whatever you have — is the need for the skilled people to take their place in those industries.

What is the correlation between your two departments in this respect? Maybe the Minister would be kind enough to ensure the … Oh, they're having a discussion, so we're just resolving the question now.

I'm not talking about vocational schools where you train carpenters and plumbers and hairdressers and things of that kind. What indication does the Department of Industrial Development, Trade and Commerce give to the Minister of Education as to what should be done in her department to ensure that when industries are encouraged to come here she is able to produce out of the schools of this province the people who can fill the jobs that those industries would offer?

MR. CHAIRMAN: I recognize the Hon. Member for North Okanagan.

MRS. JORDAN: Is the Minister going to answer

[ Page 1062 ]

the questions from the Hon. Member for West Vancouver–Howe Sound (Mr. Williams)?

Interjection by an Hon. Member.

MRS. JORDAN: Well, I think that the Hon. Member for West Vancouver–Howe Sound — would you believe it — has a point here.

MR. CHAIRMAN: Order, please. Would the Hon. Member please make her comments?

MRS. JORDAN: The Minister of Industrial Development, Trade and Commerce was asked a very logical question by that Member with regard to these major capital investments that he had up his sleeve for British Columbia to take the place of the current investments which are coming to completion in the pulp mills.

The only answer that we got was a call across the floor — "Sukunka coal." The Member tried to pursue this. The Minister said it was out of order. We ran back and forth for five minutes as to whether it was in order or out of order. But, Mr. Chairman, that Minister did not give one other indication, other than that facetious remark, of the major capital investments that he is anticipating in British Columbia.

With due respect to the Member for North Vancouver-Howe Sound I shall repeat the question. We would like to know what major capital investments he has projected for B.C. in the coming year.

Another matter that causes us great concern during this debate … and I would suggest that the business community of British Columbia has been greatly concerned and uneasy. If they were in the galleries this evening they would be more concerned and more uneasy, and quite justifiably so, because of what can only charitably be called this Minister's inadequacy in his ability to answer these questions, in his ability to point out his projected programme in practical terms, and in his sleepy, facetious response to these questions.

The Minister, when he was confronted by my colleague on the right about the high unemployment picture and the responsibility which that Minister has to help combat this in British Columbia, said, "We outlined our policy to you in the previous debate on the Speech from the Throne."

Mr. Minister, we told you then — we moved an amendment on it then — and we tell you now: you have not outlined to this House or this province any policy to combat unemployment. Your statement tonight was nothing more than a confirmation that you have no policy. We would ask you again: What is your policy, as Minister of Industrial Development, Trade and Commerce and job producer in this province, to combat this rising and shocking unemployment rate in Brtish Columbia?

Getting back to capital investment, you talked grandiosely about the European markets and how our secondary manufacturing people are going to be competitive there. Mr. Minister, I may have news for you, but a lot of our secondary manufacturing people in British Columbia can't even compete in Eastern Canada, let alone Europe. What do you propose to do for them?

Are you going to help subsidize the freight rates in Canada and over to Eurpoean markets? How can they expand their present businesses which are geared to a local, interior, provincial or western market with perhaps a slight invasion of the American market and the eastern market? How are they going to gear up their equipment to handle an expanded market in Europe? Where is that money going to come from?

There is low cost capital available in Europe to industries, big and small. Are you going to bring in a policy here, without government interference?

I'd like to go back to the coal situation for just a moment. The Member has canvassed it very well. But you have stated that you are putting taxpayers' money into Sukunka.

HON. MR. MACDONALD: Point of order.

MRS. JORDAN: Just wait until I've finished!

HON. MR. MACDONALD: Order. On a point of order.

MR. CHAIRN AN: Would the Hon. Member be seated?

MRS. JORDAN: Don't get so snarly!

MR. CHAIRMAN: Would you state your point of order, please?

HON. MR. MACDONALD: The point of order is that Sukunka was merely mentioned as one of the ingredients in making up our projected capital expenditures for years to come — a fairly major one.

Interjection by an Hon. Member.

HON. MR. MACDONALD: I can't answer that on a point of order. The Sukunka coal project is not under discussion in this particular estimate.

MRS. JORDAN: Well, you brought it up. But frankly I don't want to pursue Sukunka. Just sit down and stop being so edgy. Obviously now you're beginning to realize what's going on and feeling guilty.

You know that Kaiser coal, because of inflation, because of the fact that it was one of the most readily available suppliers of low grade coal for the Japanese

[ Page 1063 ]

market, is facing serious problems. We outlined to you in earlier debates what their losses were.

You are putting impetus into a competing situation. You have a very precarious coal situation in Kaiser for these reasons. I want to know: have you taken into consideration the effect on Kaiser when Japan strengthens its ties with Communist China and negotiates for the same type of coal from Manchuria and possibly Australia? You in British Columbia have created a more difficult situation for Kaiser because of your increased pressure on them for doing business, the increased corporate tax, and the increased taxes in other ways that we won't discuss because they're on bills here.

Have you looked into this possibility? Have you anticipated this possibility and the number of jobs that will be lost if Kaiser fails to be able to continue with its negotiations with Japan and its exporting there? I suggest to you that the threat of Japan going to China for its coal is very great.

Have you given any thought to the possibility of a chemical industry in the Kaiser location, if they should be forced to close down? It's my understanding that a chemical industry requires an abundant quantity of low quality coal, an abundant quantity of water and the transportation that there is available in this area. While it's a suitable climate, I understand that the breezes could cause pollution problems.

I recognize that there are price war problems and competitive problems in chemical industries. But have you looked at this site as a possibility for a chemical industry should Kaiser, through some of your own actions, not be able to remain alive?

Have you looked at it as a possibility of being the site for a nuclear power station to produce power for British Columbia and export to the United States?

Have you looked into the problems that Kaiser is facing in light of the actions of Japan combined with the actions of your government in British Columbia to make business production more costly to them and put them in a more serious position than they already were?

MR. CHAIRMAN: Would the Hon. Member address the Chair?

MRS. JORDAN: He answered me.

MR. CHAIRMAN: I would suggest that you ask your question first and then give him a chance to answer.

MRS. JORDAN: The next thing that I'd like to know, speaking of secondary industry in relation to the garment manufacturing industry in British Columbia — and I'm sorry I don't have my figures. I didn't realize your estimates would be up tonight.

But, as I hope you know, the garment manufacturing industry in British Columbia provides a great number of jobs. It's not highly automated. It also provides a great area of job opportunities for handicapped people, such as the deaf or the mute and even in some cases the blind.

They have invaded the Amercian market, particularly in the female garment industry, and they are facing serious problems here. But one of their major problems is that if they want to sell on the eastern market they have to take their samples back to eastern Canada. They have to take this time from their business, they have to pay the costs of taking them back and staying there. What would you be prepared to do for them to assist them in this?

The point is that when western buyers for western Canada come to British Columbia to buy, they can only buy for western Canada. I would suggest to you that you sit down at a round table with the major management of Hudson's Bay, Woodwards, these major chain stores, to either see that 1) their eastern buyers come to British Columbia to buy and buy all Canada, or 2) their western buyers have the authority to buy western produce for all Canada.

Also in this area of female garment manufacturing, there is a programme under the federal government called Fashion Canada. This is designed for the stimulation of the fashion industry in British Columbia, not only from the sales point of view but from design.

I would ask the Minister a very small thing on behalf of the British Columbia manufacturers, and that is to put up the entrance price for British Columbia manufacturers. They have to pay $200, I believe it is, per garment, to enter it in the Fashion Canada selection review. They also have to send it back east.

Now if you put up that $200 garment with the proviso that it would be returned to the Crown treasury if their garment was not selected — because it is returned to the manufacturer — then this would allow small people like Elizabeth Gordon and Surrey Classics to enter more than one garment and have a greater opportunity for selection. You wouldn't be losing a thing unless the garment were selected, and then you would pay the $200 permanently. This would give the western manufacturers just a small edge in trying to get into being selected for this Fashion Canada promotion. It goes all over Europe and basically it's a pretty good idea.

The other thing is that I think you should consider establishing a design training programme in cooperation with Fashion Canada so that our young western designers have an opportunity to enter their competition or take part in their programme. You can work out a dovetail programme with them which would give our western people a slightly better advantage than they have now.

[ Page 1064 ]

In the secondary manufacturing there's lots of other equipment. There's sports equipment and tenting, that are manufactured here in British Columbia, and they all face the same problem of not having the eastern buyers come here. They have to go east. The western buyers can only, buy west. I really think that when you look at their increased costs and the fact that they have to be competitive on the eastern market, you should either establish a trade buying fair here, and you will have to work very hard to get the eastern buyers in the eastern New York seaboard coastal buyers, to come out here to see western products. That's one of the first things you have to look after before you talk about them expanding to the European market.

I think Jones Tent & Awning is in Australia now. That was helped by the department in co-operation with the federal government. But there are other countries and they can enter the European market. But you're going to have to give them more than that fancy plan. You're going to have to make available to them low cost capital. You're going to have to help the small companies send their representatives to these other countries if you're really serious about them being competitive and to creating the jobs that you say you're going to create.

I'd like to ask you another question, and that is in relationship to retail gasoline outlets in British Columbia. I would ask you your policy. First of all, as you know, British Columbia is an importer of these products, not an exporter, and has always operated at a disadvantage in trying to combat some of the inequities that there have been in this industry.

Alberta took the bull by the horns, and while it's not a perfect draft, they at least sat down with the oil companies and the branded dealers and various outlets and drafted a bill of operation, if you want to call it. Are you prepared to do this for British Columbia? They've paved the way. They had the clout to do it. I acknowledge that British Columbia didn't have the clout. But now that Alberta has done it you have the same opportunity.

I feel I should quite fairly single out Imperial Oil because it's the one company that I know about that has almost all these clauses in their agreement with most of their operators now. They did respond from the last committee hearings that we had on this situation.

So I would ask you this. I see you know the contents of the agreement or the framework, so I won't read them. But there are some alternations in it which I'd be pleased to discuss with you. But are you prepared to do this?

The second thing I would ask you is in response to a telegram that I received tonight and which I will read to you:

"THE GARAGE AND SERVICE STATION OPERATORS OF THE OKANAGAN VALLEY URGENTLY REQUIRE GOVERNMENT REGULATIONS TO PROVIDE FOR F.O.B. REFINERY PRICES FOR GASOLINE."

They only use those terms in the legal offices.

I would ask what is the Minister's and the NDP Government's policy on this position.

Also, as you know, there has been a strong feeling among the retail outlets about the give-away programmes. Essentially they don't mind indulging in them providing they don't have to bear the cost of them.

Interjection by an Hon. Member.

MRS. JORDAN: Well, unless you have done it in the last few days, I don't think we have.

Interjections by some Hon. Members.

MRS. JORDAN: I can see that the Minister of Finance is getting a little edgy again.

So I would like to know, Mr. Minister, what your policy would be. I don't think they would mind continuing in this area, providing the parent companies picked up the cost of this type of give-away programme. They would probably be willing to put up the labour but not the cost of providing them. My own personal view is that you should get rid of them all.

I'd like a direct answer from the Minister on these, if he would please.

MR. CHAIRMAN: I recognize the Minister of Industrial Development, Trade and Commerce.

HON. MR. MACDONALD: On the question of the 3.7 expectation of capital expenditure in British Columbia, I'm sorry I can't give you the figures on the projected breakdown industry by industry. It's broken down into manufacturing sectors.

I don't know whether we can do it at all in terms of the projected future. We base it partly upon surveys of the department which asks businesses in a sample way, how much they expect to spend in the coming year; we base that upon the previous year's experience. But we also rely very heavily upon Statistics Canada and their figures and projections. They're coming out from time to time and another forecast for this year is expected shortly.

No, I don't think you can break that figure down; I don't think it can be done. If it could be done, it would be a bit of a guess and it would take you a couple of days' work.

In the case of Kaiser coal, no, we're not afraid of communist Chinese competition for exports to Japan for our coal. We have indications that Japan will want to increase its imports of British Columbia coal in the very near future. Some negotiations are already beginning to be put on foot.

[ Page 1065 ]

Interjection by an Hon. Member.

HON. MR. MACDONALD: I don't want to name the company. These are private negotiations between companies and the Japanese consortium or government at this time. But I think the potential of the market is there and I think it will increase rather than diminish. We're not afraid of Manchurian coal competing with ours at the moment. It's being fully utilized in China.

The Hon. Member's remarks about the garment industry are well taken. I can see that she's very familiar with that particular industry and has some very good suggestions.

In the case of the "three G's" — games, gimmicks and giveaways — we hope to see them abolished forever in this province. We're studying the matter actively including the question of Ethyl B refinery prices, and government policy will be announced in due course.

MR. CHAIRMAN: I recognize the Hon. Member for Nelson-Creston.

MR. L. NICOLSON (Nelson-Creston): Mr. Chairman, I don't want to spend too much time right now going back to the Member for South Peace River's (Mr. Phillips) remarks, but I must comment on his new-found interest. On September 1, 1972, in the Vancouver Sun it said: "The apparent Socred winner of one Legislature seat still in doubt said Thursday he will sit in Opposition…. "

Interjection by an Hon. Member.

MR. CHAIRMAN: Order, please. Interjection by an Hon. Member.

MR. CHAIRMAN: Would the Hon. Member be seated. His point is well made.

MR. PHILLIPS: I certainly realize, Mr. Chairman …

MR. CHAIRMAN: The point is well made. Would the Hon. Member be seated.

MR. PHILLIPS:…. is going to lend some stability to this province and is going to encourage industrial development because we're going to keep those guys over there in line. I realize that and I …

MR. CHAIRMAN: Would the Hon. Member be seated! I recognize the Hon. Member for North Vancouver-Capilano.

I'm sorry, I thought you had taken …

MR. NICOLSON: I naturally sat down while the point of order was being raised and got on my feet, in fact, before the Hon. Member took his seat.

MR. CHAIRMAN: I'm sorry. I didn't realize that you were going to stand again. Would you continue. If the Hon. Member is speaking out of order, I will draw him to order.

MR. NICOLSON: I would like to draw to the attention of the Minister of Industrial Development, Trade, and Commerce one of the difficulties faced in the Kootenay area, particularly in the West Kootenays. It is an inherited problem. It is the availability of natural gas. This is needed very heavily in secondary industry.

The way in which this has come about is through a decision — I suppose officially — of the Public Utilities Commission. Inland Natural Gas had in 1968 purchased all required rights-of-way from Yahk to China Creek to bring natural gas as an alternative source of supply in from the Alberta gas trunk line from the east Kootenays. It is Alberta gas. However, it was forced by that ruling to bring in gas. Inland Natural Gas was forced to build an alternate pipeline to bring gas from Merritt via the Westcoast Transmission line.

While that ruling was made by the Public Utilities Commission, one can only wonder at how it came about in view of the fact that when Inland had actually taken out option to purchase Columbia Natural Gas in the East Kootenays that decision was killed on the desk of the Premier as he then was. . This leaves us in the West Kootenays with a very tenuous supply of natural gas. This came to light in 1969 when 60 feet of gas pipeline was left hanging. Engineers said that it should have broken by any safety margin.

This also results each winter in layoffs. Each winter there are layoffs at Kootenay Forest Products. There have been layoffs at Cominco and at Celgar, major employers in the area, for lack of natural gas.

I think that this is something that will have to be rectified before we can give serious consideration. I would just point out that it will be necessary to look outside of the department in order to put the East and West Kootenays in a more viable position of the department in order to put the east and west Kootenays in a more viable position in competing for industries because of these inherited problems.

MR. PHILLIPS: Where does that gas come from?

MR. NICOLSON: Well, everything we get now comes from Westcoast Transmission. What we wanted was an alternate supply which would only be used in winter — heavy demand times — and a power grid.

Of course, you people make very strong points

[ Page 1066 ]

about what we don't understand about industry. What you don't understand about power is that power should be fed in from more than one source.

MR. PHILLIPS: Where does the power come from?

MR. NICOLSON: I'd also like to draw the attention of the Minister to the fact that in assembling industrial land bank, it is always …

MR. CHAIRMAN: Order, please. I believe this is a matter that's going to be dealt with under …

MR. NICOLSON: But this is a problem in industrial development. In assembling industrial land banks, it's necessary to locate them within a city for tax purposes. If the Minister could see that the taxation were changed, as I outlined in the budget speech debate, it would then be possible to locate industries in the best locations — contiguous, perhaps, to a city but not necessarily within the city boundaries.

I'd just like to point out a couple of other needs. We have a man who is very skilled in manufacturing veneer in our area but he lacks marketing skills. We have a knitting mill in our area but they lack the marketing skills and abilities. We have cubing plants, interest in cubing plants, need for a cubing plant, but we lack the one entrepreneur to gel these people and activate them. I would ask that we consider getting some real help to these people and possibly even building the plants where they're required. It isn't good enough to just demand that somebody be interested.

There is only a certain number of entrepreneurs in the farming industry. One of them is interested in vegetable processing right now. We have great needs in the Creston area, particularly in the area of alfalfa cubing. I would like this to be considered from the point of view of, perhaps, even the government embarking on the whole processing field in that area.

MR. CHAIRMAN: I recognize the Hon. Minister of Industrial Development, Trade, and Commerce.

HON. MR. MACDONALD: The Hon. Member for Nelson-Creston has made valuable suggestions in connection with the small industries in that area. I think he will agree that our industrial officer in that area, Mr. Stranger, has been on the job in terms of acquainting himself thoroughly with these problems and filing the report. So at least we're got the beginning of the situation, which is knowledge of the problems. Now we can tackle the solutions.

The other point I wish to make is that the whole area of natural gas is obviously one that we as British Columbians and we as a government have to study and act upon. We intend to do that in the very near future. I think that we have made it plain that in the case of natural gas we had problems, particularly in the export of the gas from this province, but also in its domestic distribution and pricing.

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: Mr. Chairman, does the House wish to continue, or does the House wish to adjourn? No? Fine, I'll withdraw the vote.

Interjections by some Hon. Members.

HON. MR. BARRETT: No, it's 11 p.m. You can't have it both ways. I know you're anxious to get the information.

Mr. Chairman, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports progress and asks leave to sit again.

Leave granted.

Hon. Mr. Strachan files answers to questions. Hon. Mr. Barrett files answers to questions.

Hon. Mr. Barrett moves adjournment of the House.

The House adjourned at 11:05 p.m.