[ Page 2797 ]

CONTENTS

Routine proceedings

An Act to Amend the Distress Area Assistance Act (Bill No. 178). Second reading.

Hon. Mr. Stupich — 2797

An Act to Amend the Constitution Act (Bill No. 180). Second reading.

Hon. Mr. Hall — 2797

Mr. Phillips — 2797

Mr. Chabot — 2798

Mobile Home Tax Act (Bill No. 18 1). Second reading.

Hon. Mr. Lorimer — 2798

Mrs. Jordan — 2798

Statute Law Amendment Act, 1973 (Bill No. 183). Second reading.

Hon. Mr. Macdonald — 2798

Mrs. Jordan — 2798

Mr. D.A. Anderson — 2798

Mr. Chabot — 2798

Hon. Mr. Macdonald — 2799

Mr. Phillips — 2799

Mr. Wallace — 2799

Mr. Schroeder — 2799

Mrs. Jordan — 2799

Hon. Mr. Macdonald — 2800

Mr. D.A. Anderson — 2800

Hon. Mr. Macdonald — 2801

Mr. Phillips — 2801

Mr. D.A. Anderson — 2801

Hon. Mr. Macdonald — 2802

Mr. Phillips — 2802

Hon. Mr. Macdonald — 2802

Mr. Chabot — 2802

Hon. Mr. Macdonald — 2802

Mr. Chabot — 2803

Mr. D.A. Anderson — 2803

Hon. Mr. Macdonald — 2803

Mr. Chabot — 2803

Division on section 55 — 2804

Mr. Fraser — 2804

Mrs. Jordan — 2804

Hon. Mr. Macdonald — 2804

Mrs. Jordan — 2805

Mr. Wallace — 2805

Mr. Morrison — 2805

Hon. Mr. Macdonald — 2805

Mr. Wallace — 2806

Mr. D.A. Anderson — 2806

Mr. Morrison — 2807

Hon. Mr. Macdonald — 2807

Mr. D.A. Anderson — 2807

Mr. Wallace — 2808

Mr. Phillips — 2808

Division on section 66 — 2809

Mr. Morrison — 2809

Hon. Mr. Macdonald — 2809

Mr. Phillips — 2810

Hon. Mr. Macdonald — 2810

Mr. D.A. Anderson — 2811

Hon. Mr. Macdonald — 2811

Mr. Wallace — 2811

Hon. Mr. Macdonald — 2811

Mr. Morrison — 2811

Hon. Mr. Macdonald — 2811

Mr. Morrison — 2811

Hon. Mr. Macdonald — 2812

Mrs. Jordan — 2812

Mr. Morrison — 2812

Mr. Phillips — 2812

Mr. G.H. Anderson — 2813

Mr. Morrison — 2813

Division on section 67 — 2813

Mr. Phillips — 2814

Mr. D.A. Anderson — 2814

Hon. Mr. Macdonald — 2814

Mr. D.A. Anderson — 2814

Mr. Phillips — 2814

Hon. Mr. Macdonald — 2815

Mr. Morrison — 2815

Hon. Mr. Macdonald — 2815

Mr. D.A. Anderson — 2815

Hon. Mr. Macdonald — 2815

Mr. D.A. Anderson — 2815

Hon. Mr. Macdonald — 2815

Mr. D.A. Anderson — 2815

Hon. Mr. Macdonald — 2816

Mr. D.A. Anderson — 2816

Mrs. Jordan — 2816

Hon. Mr. Macdonald — 2817

Mr. Chabot — 2817

Mr. D.A. Anderson — 2818

Mr. Nunweiler — 2819

Mr. Schroeder — 2819

Mr. Wallace — 2819

Hon. Mr. Macdonald — 2819

Mr. Smith — 2820

Mr. Morrison — 2821

Hon. Mr. Macdonald — 2821

Mr. Chabot — 2821

Mrs. Jordan — 2821

Mr. Phillips — 2821

Hon. Mr. Macdonald — 2822

Mr. Smith — 2822

Mr. Morrison — 2822

Hon. Mr. Macdonald — 2822

Mr. Nunweiler — 2822

Hon. Mr. Barrett — 2823

Mr. Phillips — 2823

Mr. Chabot — 2823

Mr. D.A. Anderson — 2823

Hon. Mr. Barrett — 2824

Division on section 74 — 2824

SATURDAY, APRIL 14, 1973

The House met at 10 a.m.

Introduction of bills.

Orders of the day.

HON. D. BARRETT (Premier): Mr. Speaker, I move we proceed to public bills and orders.

Motion approved.

HON. MR. BARRETT: Second reading of Bill No. 178, Mr. Speaker.

AN ACT TO AMEND THE
DISTRESS AREA ASSISTANCE ACT

HON. D.D. STUPICH (Minister of Agriculture): Mr. Speaker, Bill 178 really makes changes in details of the legislation. For the first time the word "bank" is being defined to include the credit union so that this organization as well as banks that are chartered under the Bank Act may be used.

The definition of "farmer" is changed. Where previously it was just a person, it is now changed so that it can be a corporation, a cooperative, but they must be resident within the designated area being dealt with.

The definition for "distressed area" is being added so that those areas where the province is entering into a shared programme with the federal government will be defined differently from those areas where the province is going it alone — not that it makes a great deal of difference to the people concerned; but as far as understanding the legislation it just means that the two areas are being differently described.

I suppose the main change in the legislation — and again it's a change in a section, but there's really no way of discussing this any other way — is that it increases the amount of money available. Previous Acts allowed a total of $2 million. The change brings it up to a total of $10 million so that it can indeed deal with a situation where there truly is distress on a very large scale as there has been in some areas of the province and as there may very well be at this time.

One other significant change is in an area of the collection of this amount, if you like, the guarantee for it. Where this has previously been left entirely to regulation, it's now quite plain in the legislation itself as to how these funds are going to be collected in the event that there is default.

Mr. Speaker, I move that the bill be now read a second time.

Motion approved; second reading of the bill.

Bill No. 178 referred to a committee of the whole House to be considered at the next sitting after today.

HON. MR. BARRETT: Second reading of Bill No. 180, Mr. Speaker.

AN ACT TO AMEND THE
CONSTITUTION ACT

HON. E. HALL (Provincial Secretary): A point of order? How can there be a point of order now?

MR. J.R. CHABOT (Columbia River): What's funny? Certainly I want an adjournment on this. We haven't had a chance to look at this Act.

MR. SPEAKER: Order, please. It is customary when a bill is first introduced in the House for second reading that the Minister opens the debate. If a Member is not prepared to debate the matter on second reading that day, he asks for an adjournment.

I call and recognize the Provincial Secretary to open the debate on second reading of the bill.

HON. MR. HALL: Mr. Speaker, An Act to Amend the Constitution Act is the bill before us. In moving second reading I would like to point out to the House that this is a well-known Act. It is the Act that really is our Act. We're all very familiar with it.

The Act seeks to regularize the votes that have already taken place in committee of supply to make certain amendments to the salaries paid to the MLAs, Members of the Executive Council and officials of the House.

In addition to that, Mr. Speaker, it seeks to remove some obsolete sections from the Constitution Act. It also introduces a number of interesting things regarding the rights of MLAs. There is no particular central theme one could call a principle in this Act as it amends certain sections.

If indeed the Members want to pour scorn on the Constitution Act, I would suggest they refer to standing orders. It makes it completely irregular to do that.

However, Mr. Speaker, I will indeed move second reading of this Act that everybody should have read the day it was prepared.

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

MR. D.M. PHILLIPS (South Peace River): Mr. Speaker, maybe in second reading the Provincial Secretary would go through some sections of the Act and we could have time to…

[ Page 2798 ]

Interjection by an Hon. Member.

MR. PHILLIPS: In the committee stage?

MR. CHABOT: It's an Act which I really haven't had an opportunity to examine. I've looked at one section and I find it to be a regional Act that discriminates against certain parts of British Columbia. I would like to have a chance to study it in a little more depth. Consequently I move adjournment of this debate until the next sitting of the House.

Motion approved.

MR. SPEAKER: Order, please. A Member is entitled to vote "no." (Laughter).

HON. MR. BARRETT: Second reading of Bill No. 181, Mr. Speaker.

MOBILE HOME TAX ACT

MR. SPEAKER: The Hon. Minister of Municipal Affairs.

HON. J.G. LORIMER (Minister of Municipal Affairs): Mr. Speaker, in moving second reading of this bill, I would point out that there are basically three principles to the bill.

The first is that the Mobile Home Tax Act is being repealed. The second point is that it treats mobile homes and mobile parks as realty and therefore subject to assessment and taxation in the same way as real property. The third point is that it allows the mobile homeowner to receive the Homeowner Grant and the Home Acquisition Grant. It's quite similar to Bill No. 4, the Smith bill.

MR. SPEAKER: The Hon. Member for North Okanagan.

MRS. P.J. JORDAN (North Okanagan): We appreciate the Minister's full comments. I'm sure he can appreciate that the time of the MLAs has been rather heavily occupied these days. Perhaps he would accept an adjournment of the debate.

MR. SPEAKER: A motion to adjourn the debate. Are you ready for the question?

Motion approved.

HON. MR. BARRETT: Second reading of Bill No. 183, Mr. Speaker.

MR. SPEAKER: The Hon. Attorney General.

HON. A.B. MACDONALD (Attorney General): Mr. Speaker, in moving second reading of this bill, I would point out that this really is a Mulligan stew in that it combines in one soup varying and differing ingredients. Therefore it's really a very suitable matter to be discussed in committee, rather than jumping from one thing to another.

So I move second reading and trust that the matter can be referred to committee and dealt with by the House in whatever detail the House desires at that time. I so move.

MRS. JORDAN: Keeping with the tradition set through this House for years by the former Leader of the Opposition and now the Premier, we will accept this and discuss the debate in committee.

MR. SPEAKER: The Hon. Second Member for Victoria.

MR. D.A. ANDERSON (Victoria): Mr. Speaker, we agree with the Attorney General. There's no way this really can be discussed in principle because there really is no principle to it. We'll discuss it in committee.

MR. SPEAKER: The Hon. Attorney General closes the debate.

HON. MR. MACDONALD: Question, Mr. Speaker.

Motion approved.

Bill No. 183 referred to a committee of the whole House at the next sitting after today.

HON. MR. BARRETT: Committee on Bill No. 148, Mr. Speaker.

ENERGY ACT

House in committee on Bill No. 148; Mr. Dent in the chair.

Sections 1 to 3 inclusive approved.

On section 4.

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

MR. J.R. CHABOT (Columbia River): Yes, we have an amendment on the order paper, Mr. Chairman. I move the amendment standing in my name to delete subsection 7 of section 4, which says that any two commissioners constitute a quorum.

[ Page 2799 ]

I don't think that two tsars should have that kind of power.

Interjection by an Hon. Member.

MR. CHABOT: No, it would be a regular quorum. A majority of the commission would constitute a quorum. I don't think that it should be by two tsars. I think that part should be deleted.

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, the commission can be up to seven, but it may be three or four to begin with. One of them may be sick. We would not want to have no quorum at all in the bill. Certainly if the commission is enlarged to the point where there are four, five, six or seven members, we wouldn't want major decisions to be made by two people.

On the other hand, commissions have major decisions and then they have a number of perfunctory decisions to make, such as meeting as a commission and fixing a hearing. That's an example. For its perfunctory functions, it should be permitted to have a low quorum. But I can't imagine any commission, even with the larger numbers of members that I've referred to, really sitting on a major matter with only two people.

I think we should have the protection that is in here, which is certainly better than the amendment. At least it requires that two people be present, even for perfunctory matters. I think it's a safeguard to leave it in.

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

MR. D.M. PHILLIPS (South Peace River): Mr. Chairman, this is a pretty far-ranging and wide sweeping bill. I don't think that you should start off with just two or three people. These two or three people could go in and do severe damage right off the bat. If you're only planning on having two or three people on this commission, I think you had better withhold the bill until you get it straightened out.

You could get a couple of people in there who have a grudge against some oil company or some other phase of the many areas of life which this bill will take charge of. It could be very dangerous indeed. I certainly think that you should start off the commission with your seven people right away and have a majority of the members to provide a quorum. The bill is dangerous enough as it is. But you could make a mistake. You could even get a couple of kooks on there.

AN HON. MEMBER: Crooks?

MR. PHILLIPS: Kooks, I said. Not "gooks," "kooks."

HON. MR. MACDONALD: We don't intend to draw on the opposition party for any personnel. (Laughter).

MR. PHILLIPS: I was thinking of your own backbench, Mr. Minister.

Maybe at some time these two gentlemen might be working very long hours and be very tired and have a grudge against somebody and do severe damage. I think the Minister of Industrial Development, Trade and Commerce should not take this matter lightly and accept our amendment for an ordinary quorum.

MR. CHAIRMAN: I recognize the Hon. Member for Oak Bay.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, on general principles I would have to agree that two out of seven seems to me to be too few to constitute a quorum.

As I mentioned in an earlier debate last night, I feel that quite reasonably one could expect that you should always have four out of the seven to make a meeting legal and to get responsible decisions. I would oppose the idea of only two people out of seven constituting a quorum.

MR. CHAIRMAN: I recognize the Hon. Member for Chilliwack.

MR. H.W. SCHROEDER (Chilliwack): Mr. Attorney General, I would like to suggest that instead of specifying the number of commissioners who constitute a quorum, why not just simply say "a majority." That way you could expand the commission to any number that you wished, notwithstanding section 1…

HON. MR. MACDONALD: A majority present?

MR. SCHROEDER: A majority of the commissioners. Say the commission number is seven. Then four would constitute a quorum. Why not just state it simply? Then you won't…

AN HON. MEMBER: Do that in another Act.

MR. SCHROEDER: That would be my suggestion.

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

MRS. P.J. JORDAN (North Okanagan): I would just like to support what the Hon. Member for

[ Page 2800 ]

Chilliwack said. I think there should be this provision in here for the majority of the commission to be present and there being a quorum. We must accept that if people are going to accept the responsibility of being on the commission, they have a responsibility to be at these meetings and to be fully informed with the commission's activities. I wouldn't think that the Minister of Industrial Development is suggesting that appointments to the commission, in what really is a very controversial and really a very bad Act in many ways, would be in this responsible position by appointment and not attend all the meetings and not be fully conversant.

If you, as a government, are to bring in such an Act and make people by way of appointment responsible for the actions of this Act, then the least the Minister can do is assure the public, which is deeply concerned about this, that those people are going to be there all the time. Even if perfunctory actions are taking place, those members must know about it. That's their responsibility. We would hope that he would accept the suggestion that a majority make a quorum.

Everybody, from the service station operators on around the block, is very concerned about the power in the Act itself; particularly they have mentioned the fact that two people could, in spite of the Minister's most sincere assurances that it wouldn't happen, make decisions that even the Minister himself might regret.

HON. MR. MACDONALD: Well, I'll be glad to bear in mind what has been said because as I say, for major decisions we'd certainly want that. But you have the perfunctory decisions, then you have the matters which are very important to an individual, such as a service complaint against B.C. Hydro up in Dawson Creek or Pouce Coupe, where it may be appropriate to have two commissioners actually go to the place and hold a hearing at that time.

Not when we get up to seven — I don't suppose we'll be up to seven for some time, depending on the workload — not the whole seven. Bearing in mind what has been said, we appreciate the force of it. We can't accept the amendment at this time, but we're perfectly prepared to review the Act in the light of developing circumstances.

I don't think there can be seven right away. I don't think that's reasonable to the taxpayer, It's going to depend on the developing workload, and then I suppose commissioners should be appointed too, in time, so that you've got a specialist in electrical generation, you've got a specialist in natural gas, you've got a specialist in some of the other areas.

Therefore, for particular smaller hearings in these specialized fields it may be appropriate that two sit at times. But not for the major decisions. I fully agree with that. We can't accept the amendment because I think it will rigidify the structure too much.

MR. CHAIRMAN: The Second Member for Victoria,

MR. D.A. ANDERSON (Victoria): We will support the amendment, because we feel that in cases such as this — and we fully appreciate the points made by the Attorney General — you should err on the side of being more cautious rather than too liberal, We feel that in this instance you should have the quorum set at a majority of the members, and if it proves to be necessary to amend that, then we would be quite willing to accept an amendment in the future.

It's just a reverse of the position of the Minister. We appreciate the points he has made, however.

MR. CHAIRMAN: Shall the amendment to section 4 standing in the name of the Member for Columbia River pass?

Amendment negatived.

Sections 4 to 9 inclusive approved.

On section 10.

MR. D.A. ANDERSON: On section 10, we have here a provision "where the commission is directed or authorized under this Act to hold a hearing, it shall give notice of the hearing." It goes on to say that if no notice is given, that cannot affect the decision of the commission.

We feel that's wrong. We feel that there should be notice given of hearings and we think that the time-honoured legal word "reasonable" is all that is necessary there. I would propose an amendment, Mr. Chairman, to delete all words after the word "hearing," and add "it shall give reasonable notice of the hearing." So the amendment section would read: "Where the commission is directed or authorized under this Act to hold a hearing, it shall give reasonable notice of the hearing."

It's not an onerous provision. It won't occur very often, but it's up to the courts to determine what is a reasonable hearing and not up to…

MR. CHAIRMAN: Could you have the amendment sent up to the table?

MR. D.A. ANDERSON: I've got it here. It's not unreasonable, and we feel that this is the way we should proceed in cases where it may be that a person's livelihood the small service station operator's livelihood could be wiped out. We think it only fair that he has the opportunity of at least having a legal right to a hearing.

[ Page 2801 ]

HON. MR. MACDONALD: Mr. Chairman, even though this is taken from the older language, I think we could accept that amendment. But in accepting it, I would ask leave of the House if this passes that the Law Clerk may be able to tidy up the legal language if necessary.

MR. D.A. ANDERSON: Certainly, Mr. Attorney General.

MR. CHAIRMAN: Shall the amendment in the name of the Second Member for Victoria pass?

Amendment approved.

MR. CHAIRMAN: Shall leave be granted that the Clerks may appropriately clean up the language?

Leave granted.

MR. D.A. ANDERSON: Clean up my language? It's not that bad, (Laughter).

HON. D. BARRETT (Premier): Legalize it!

MR. D.A. ANDERSON: That's what Hansard clerks do…

Section 10 approved with amendment.

On section 11.

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

MR. PHILLIPS: This section looks like fairly normal legislation, that the commission "may appoint and engage accountants, engineers, legal counsel, and other persons having special or technical knowledge necessary for the purpose of assisting the commission."

However, if you go on to section 81, the commission "and any person authorized by it, for that purpose, may…enter upon…any oil refinery, storage plant…" This is bad business. Of course, this whole bill as far as I am concerned should be broken down into about three different pieces of legislation, but I've discussed that before.

This section here, in essence, Mr. Chairman, would allow the commission to hire anybody it wants. There could be somebody who wants to find out how somebody else is running their business — they could get on this commission. I know they're supposed to keep the information secret, but sometimes in the technical world — particularly in the petroleum industry — there are secrets about ways of refining, about ways of doing business, and here under this section, under section 81, they can go in and there is nothing secret or sacred any more.

MR. CHAIRMAN: What section is that Hon. Member?

HON. MR. MACDONALD: Section 81. Mr. Chairman, this isn't up yet.

MR. PHILLIPS: No, I realize this, but the reason I am discussing this is because of technical knowledge. If you want to go in and check out a refinery, you've got to find somebody who knows how the refinery runs, or something. You've got to hire somebody with that technical knowledge. Where are you going to get people like that? Are you going to hire them from some other oil company, or something? This is the thing that concerns me about this…

MR. CHAIRMAN: Are you speaking for or against the section?

MR. PHILLIPS: Well, I'm just asking the Attorney General to give me some assurance, or to explain to me where he's going to get these technical people. Because after this bill is passed, there's nothing sacred any more. Nothing whatsoever.

HON. MR. MACDONALD: Well, I don't think we'll have any trouble getting the personnel to assist the commission.

Section 11 approved.

On section 12.

MR. CHAIRMAN: I recognize the Hon. Second Member for Victoria.

MR. D.A. ANDERSON: Two quick questions to the Hon. Minister on sections 12 and 13 together. It has here a reference to the Civil Service Act and I gather from this that it is up to the Energy Commission itself whether it will have people under the Act or outside it.

HON. MR. MACDONALD: No, the Lieutenant-Governor-in-Council.

MR. D.A. ANDERSON: Well yes, but acting on the advice of the commission. I would think that it would be desirable for the Minister, at this stage, to indicate to the House why the need to exempt people from the Civil Service Commission, why it was desirable to put in these two sections. I'm not saying they're wrong, I'm just saying I don't have an explanation for it, and don't quite understand why people should be exempted from the Civil Service Commission and the Civil Service Act.

[ Page 2802 ]

HON. MR. MACDONALD: Well, it's partly like the British Columbia Development Corporation where the Member made the point last night that there are some functions of government that should be out in the community. There will be business consultants and people, possibly part-time, hired from industry — some of them possibly for a short period of time. We're protecting them wherever it's appropriate, in terms of their superannuation benefits. We think this is the kind of function that, as in the old Public Utilities Commission, could appropriately be left in this form. It's really a function that's outside the government, and with as much independence as we can give it. Otherwise, with the ability to attract the best staff, as the Member was saying, the technical people, business consultants, and possibly on a part-time basis, it's not too appropriate.

Sections 12 to 21 inclusive approved.

On section 22.

MR. PHILLIPS: On section 22, who is going to make the decision as to whether a service is efficient or not?

HON. MR. MACDONALD: The commission.

MR. PHILLIPS: The two commissioners. They are going to decide. If someone gives a complaint who has a grudge against this particular company, then the commission goes in and says, "You're not giving efficient service."

Are there going to be some rules and regulations laid down so that the company will know whether it is giving efficient service? What are the regulations going to be here? Just for somebody to go in, particularly in the service industry, and to say, "You're not giving efficient service" doesn't seem quite just to me somehow, Mr. Minister.

HON. MR. MACDONALD: Well, it is traditional in the public utilities legislation to have this kind of section. It has been on our books for a long time and there is a body of precedent and even legal decisions built up around these things. This applies to energy utilities. As I say, it is wholly traditional. It used to be section 5 of the Public Utilities Act.

Let me say this about these powers, speaking to section 22 but speaking to many other sections of the Act, we have not extended in any way powers that haven't been on the statute books of the Province of British Columbia before, for long periods of time. In fact I think, as I said earlier in respect to the hearing provisions, we have improved on the situation in terms of open hearings and writing them into the Act.

If there is anything in here in terms of utility enforcement that wasn't heretofore in our laws, without complaint either from the opposition party, when you were government, over a long period of time, or the opposition or even the citizens, we'll take it out. This is a traditional public utility enforcement section, well understood by the utilities. I'm quite sure you will find similar sections in California or anywhere else you might want to go. There is a massive body of public utility regulations precedent built up. I think you will find it is well understood by those in the utility field.

MR. CHAIRMAN: Shall section 22 pass?

Section 22 approved.

Sections 23 to 25 inclusive approved.

On section 26.

MR. CHAIRMAN: The Hon. Member for Columbia River.

MR. CHABOT: I move the amendment standing in my name for the deletion of section 26.

MR. CHAIRMAN: The motion is out of order.

MR. CHABOT: Out of order? How can it be out of order?

MR. CHAIRMAN: The correct procedure is to vote against the amendment.

MR. CHABOT: I'll change it. I'll just delete a few words here and there out of it. Give me a piece of paper.

I'll speak to the main section then, Mr. Chairman. The main section really encompasses an unacceptable principle. It puts too much power into the hands of two men and at the whim of two men who can do almost anything. Look at subsection 2:

"It is a question of fact, of which the commission is the sole judge, whether a rate is unjust or unreasonable, or whether, in any case, there is undue discrimination, preference, prejudice, or disadvantage in respect of a rate or service, or whether a service is offered or furnished under substantially similar circumstances and conditions."

It puts far too much power of deciding what is right and what is wrong into the hands of two men. I'm sure you agree with me that the whole principle of this section is unreal and unjustified and unnecessary. I'm sure that after my short talk you will see the wisdom in the deletion of this section from this tragedy of errors that we see in this entire bill.

HON. MR. MACDONALD: Mr. Chairman, just to

[ Page 2803 ]

explain the section, this is the section whereby the consumer, throughout the range of these utility services, can be protected against unjust charges and discrimination. Surely the Hon. Member favours that principle. Do you think the people of Columbia River should be discriminated against in terms of electric rates or natural gas rates for matters within our jurisdiction? Or water utility rates? This is the thing that gives the consumer protection.

MR. CHABOT: Yes, but two men.

HON. MR. MACDONALD: Well, you are talking about the quorum section and we have gone through that. You will find that I haven't changed, in any respect, section 8 of the Public Utilities Act. This is well known public utilities legislation to protect the consumer, If you vote against this, Mr. Member, you are leaving the consumer exposed to exorbitant prices from public utilities in the Province of British Columbia in a way they are not exposed anywhere else in North America.

MR. CHABOT: There are ways, Mr. Minister of Industrial Development, Trade and Commerce. You know there are ways and means of appeal against unjust rates without the necessity of putting it in the hands of these two men — sole judge, that's what you are saying in this particular section. It is the kind of principle that shouldn't be enshrined in a piece of legislation like this. There are other ways to appeal unjust rates by utility companies.

HON. MR. MACDONALD: Yes, but the courts don't set the rates. It isn't up to the courts to say whether somebody's electric rate is high or low.

MR. CHABOT: No, but the public utilities can do it to see whether it is just or fair, without giving it into the hands of two men, two laymen — two friends of the government!

MR. CHAIRMAN: Shall section 26 pass?

Section 26 approved.

Section 27 approved.

On section 28.

MR. CHAIRMAN: I recognize the Hon. Second Member for Victoria.

MR. D.A. ANDERSON: I am just wondering, Mr. Chairman, why there have been changes between this and section 10 of the Public Utilities Act. This appears to be much broader. I am wondering if that was a deliberate intention or whether it is just simply better wording. What is the reason? Does it grant more power to the commission than the Public Utilities Act did?

HON. MR. MACDONALD: I don't know of any respect in which this increases the power that was under the old public utilities commission.

MR. CHAIRMAN: Shall section 28 pass?

Section 28 approved.

Sections 29 to 45 inclusive approved.

On section 46.

MR. CHAIRMAN: I recognize the Hon. Second Member for Victoria.

MR. D.A. ANDERSON: Section 46 has caused considerable concern in terms of regulation of any service station, in particular, in the province. I wonder if the Attorney General might say a word on that. How extensive does he feel these powers are?

HON. MR. MACDONALD: It doesn't apply to service stations because they are not energy utilities under the Act.

MR. CHAIRMAN: Shall section 46 pass?

Section 46 approved.

Sections 47 and 48 approved.

On section 49.

MR. CHABOT: …the ability to set up an agreement between private and public parties. It is a lot of power given to two men to decide what the rates shall be. It is another one of those unacceptable principles.

HON. MR. MACDONALD: You are a free enterpriser.

MR. CHAIRMAN: Shall section 49 pass?

Section 49 approved.

Sections 50 to 54 inclusive approved.

On section 55.

MR. CHAIRMAN: I recognize the Member for Cariboo.

[ Page 2804 ]

MR. A.V. FRASER (Cariboo): I move the amendment in my name.

MR. CHAIRMAN: The amendment is out of order. The proper procedure is to vote against the section.

MR. FRASER: I will, because this section 55 takes all the municipal rights away from all municipal jurisdictions.

Section 55 approved on the following division:

YEAS — 30

NAYS — 11

PAIRED

Sections 56 and 57 approved.

On section 58.

MR. CHAIRMAN: I recognize the Hon. Member for Cariboo.

MR. FRASER: I would like to move the amendment standing in my name.

MR. CHAIRMAN: The amendment is out of order. The proper procedure is to vote against the section.

MR. FRASER: Fine. This is the same as section 55 where two commissioners can overrule elected councils — five, seven or nine elected people. It is absolutely ridiculous.

MR. CHAIRMAN: The Member for North Okanagan.

MRS. JORDAN: Mr. Chairman, I too am disposed to vote against this section in view of the fact that it does allow the commission tremendous powers, in that they can enter into any municipal or regional district structure.

HON. MR. MACDONALD: To run a water main through for example. It is necessary.

MRS. JORDAN: Yes, but so many municipalities in British Columbia and regional districts all have their own plans. We have other Acts before this House freezing land. Is it right that one commission could have this power to overrule all the local planning that was done by a professional planner that was voted on by the people and which is an accepted precedent by the people? There would be no recourse in other sections of this bill for these people or the municipality or the regional district to go to court and appeal the decision of this commission.

We feel this is a most unacceptable phrase. This is just giving this commission too much power, Mr. Minister. It is a bill of absolute power with absolute power given to selected people by a government. There are no appeal procedures and we feel this again is an overriding of the responsibilities and constitutional responsibilities and privileges of municipalities and regional districts and, of course, the democratic rights of the people involved.

HON. MR. MACDONALD: Mr. Chairman, just a short explanation of the section: There are private companies that can create under, say, the Forest Act mineral legislation, rights of way across private property. These are the essential utilities — gas, water, electrical generation. It is very unlikely that a municipality would object and say, "You go another 30 miles around this area," or that a regional district would say, "Go 75 miles around this area," and increase the cost to some consumers farther down the fine.

I doubt if they would object but private companies have this power. Maybe they shouldn't have. This is after negotiations and it has been in the Public Utilities Act of the Province of British Columbia, section 44…

Interjection by an Hon. Member.

HON. MR. MACDONALD: No, it doesn't, but it has been in the Public Utilities Act, without complaint in the past from that little group, and without complaint in the past from the Union of B.C. Municipalities.

[ Page 2805 ]

Interjection by an Hon. Member.

HON. MR. MACDONALD: Well, this is the kind of section that is in utilities legislation in order to bring essential services to people as cheaply as possible. People accept that.

MR. CHAIRMAN: The Member for North Okanagan.

MRS. JORDAN: I think your explanation is very interesting but what you fail to point out, as I understand it, is that if a company comes on or anything like that, there is a right of appeal. But this Act does away with this right of appeal to the courts. The Minister says that no municipality would be likely to refuse the request of the public utilities to go through someone's back yard or through a botanical garden or through a park because that would bring the line most cheaply. I would suggest there is case after case in British Columbia. One is in the Enderby area, where a public utility wants to put in a line in the most economical way. There is serious municipal, regional district and public concern.

There is an international situation, right now, to do with the Mackenzie pipeline and pipelines in Alaska and Canada which, in fact, are proving the need for the right of appeal. We are bringing to the fore this very serious question: is the cheapest way the best way, is the cheapest way what the people want? We feel you must not give this commission the right to override, as I mentioned before, properly planned municipal plans and decisions by municipal councils.

HON. MR. MACDONALD: It can't under this section. This is subject to agreement of the municipalities.

MRS. JORDAN: As I understand it, section 58 dispenses with municipal consent.

HON. MR. MACDONALD: No, the earlier sections give an emergency power. section 58 is subject to the municipalities.

MRS. JORDAN: They do have the right of appeal?

HON. MR. MACDONALD: That's right.

MR. CHAIRMAN: I recognize the Hon. Member for Oak Bay.

MR. WALLACE: I would like to pass comment on that, Mr. Chairman. One thing that worries me a little about the Minister's comments is that all too frequently the Minister says that some such undesirable power, or some power which the opposition thinks is too much, exists in some other legislation. I am sorry, Mr. Chairman, but two wrongs never make a right. What probably is wrong is that they shouldn't be in the other legislation either.

I know it is rather trite that the price of freedom is eternal vigilance. The point is that the role of opposition is to try and check these little bits of erosion of new legislation, eroding the rights of individuals and the power of government. It is the function of opposition to try and prevent this creeping in more and more frequently into successive pieces of legislation.

The part I don't like about section 58 is the words: "after such hearings as the commission considers advisable." I don't see that it should be at the discretion of the commission if there should be a hearing. I think there should be, when you are giving this kind of power to an energy utility to use a highway within the municipality. Since the people living in the municipality are going to be intimately affected, surely it would be reasonable to suggest that there must be a hearing. To leave that much discretion to the commission, again, is an excessive amount of power.

MR. CHAIRMAN: The Member for North Okanagan.

MRS. JORDAN: I'd like to say again that we feel that this does give the commission too much power, that it does have the power to enter into any municipal structure or use any municipal structure without the rights that have been explained. We certainly will vote against this section.

Sections 58 to 65 inclusive approved.

On section 66.

MR. CHAIRMAN: I recognize the Hon. First Member for Victoria.

MR. N.R. MORRISON (Victoria): I wonder — if this section could be completely explained. It's a little vague and I'd like to know what they're driving at.

HON. MR. MACDONALD: Section 66 requires that the petroleum industry, if ordered by the commission do not carry on any practice which unduly increases the price of gasoline to the consumer.

MR. MORRISON: What do you mean by "practice"? That's what I'm after.

HON. MR. MACDONALD: To give examples, if advertising were clearly misleading; if all the companies were spending a lot of money on advertising their particular brands of gasoline and in fact in the commission's opinion that gasoline was exactly the

[ Page 2806 ]

same — in other words false and misleading advertising and putting the cost on the consumer — the commission might intervene and prohibit that practice.

Interjection by an Hon. Member.

HON. MR. MACDONALD: Yes. They have other powers too. But this is the statement of the broad principle. They might find that duplication of services was such — trucking a small quantity out to this point by one truck and a small quantity by another truck — that it unduly foisted a high, exorbitant cost upon the consumer. That kind of practice could be curtailed. And, as the Member points out, there are other sections that enable the commission, after proper hearings, to regulate what it considers to be wasteful practices that load an unnecessary cost upon the consumer.

Interjection by an Hon. Member.

HON. MR. MACDONALD: Well it could be, you know, but we do have another section on the "Three G's." If you look at 76(f), that more particularly zones in upon the three gimmicks.

MR. CHAIRMAN: The Member for Oak Bay.

MR. WALLACE: Mr. Chairman, the Minister in making these comments of course has put his finger exactly on the deep concern that we have about so many of the Sections in this bill. I'll try not to be repetitive, because what I think I can say about 66 equally applies to many other sections, including 76.

I think perhaps the Minister chose a rather unfortunate example when he was trying to interpret the purpose behind section 66 when he quoted advertising. Surely, Mr. Minister, that is a very dangerous area for government to start telling a private sector of the economy how much they should spend on advertising. I think that's a very serious statement that the Minister just made.

If we are looking at the whole realm of consumer affairs, whether it's gasoline, socks, ties, food or anything else, we all know the enormous amounts of money which every segment of industry spends on advertising. There's a constant conflict in the public arena as to the impact of advertising on consumer costs. I am sure the Minister wasn't particularly emphasizing that one thing, advertising.

In giving his explanation I think the Minister points out the dangers inherent in having a commission given what are in some ways vague terms of reference — "increases unduly" or "tends to increase unduly." This is a rather diffuse and vague outline of the terms of reference.

We would all agree, Mr. Chairman, that the goal of the government in trying to establish fair prices for such an important consumer product as petroleum and the byproducts of petroleum is well intended. I support what the Minister is trying to do. But I must again repeat that we're very unhappy at this kind of section in the bill and the power that we've already mentioned — and I won't say it at all after this section — about the small quorum possible.

We feel that the government really isn't aware itself of the tremendous dangers that exist when you give a few appointees these vague and very widespread terms of reference. I hope the Minister will reconsider — if there is to be any reconsideration of this bill — this kind of particular section and his own thoughts on the ways in which the commission could intervene quite unfairly in such basic parts of the private sector of the province where they have to advertise.

If the Minister is so concerned, let us say, about the cost of advertising, I submit that to be consistent he should tackle the whole of the consumer field. Surely it is not a function of government to regulate the whole of the consumer field. Yet they're picking on one particular segment — this is another point I might mention in this section which relates to our total criticism of the whole bill — that they're picking on one section of private business and industry, namely the petroleum industry and subjecting it to a degree of scrutiny, regulation and control which, however well-motivated, sets a serious precedent and sets up a conflict, I think, between government and this particular sector of industry.

If the way in which this regulation and control is to be brought about is based on the kind of comment the Minister just made, then I think the whole of the private sector in this province is in for a bad time in the years to come.

MR. CHAIRMAN: The Second Member for Victoria.

MR. D.A. ANDERSON: Mr. Chairman, I've had a look at section 66 and I've had a look at section 76. section 66 is very broad and sweeping; 76 sets out in great detail — and indeed that could be amended to put in more detail if the Minister wished — the type of thing that the Minister talked about.

He talked about grading and advertising of various grades of gasoline which may or may not differ. That's the type of thing that could come under the regulations section 76, rather than in section 66, which simply says "certain practices prohibited," and then does not list the practices to which the Minister is obviously referring.

As far as advertising is concerned, there is legislation dealing with false advertising.

HON. MR. MACDONALD: Yes, you bet there is.

[ Page 2807 ]

Even the Americans do it.

MR. D.A. ANDERSON: Oh, that's right. It's quite outside the scope of this legislation as well. In other words there's existing legislation to go after the false advertising which means that this section is redundant in that respect, because there is other legislation dealing with that.

There is no question in my mind if you can regulate the advertising of a noxious or poisonous product such as tobacco, there's no question in my mind that the government has the right to do that. But to put all such regulations and all such prohibitions in the hands of a commission and then go on to say that every person can be guilty of an offence if they offend the commission's rulings, is handing over to this commission too much power to legislate, in my view.

I can accept section 76 in its entirety. I have no quarrel with the Minister's spelling out what he intends to do with this commission in these regards. But to give the old "blank cheque" power to an appointed commission to decide what is good and what is bad, and then in turn have those who offend the commission guilty of an offence, is handing out to the commission the powers to legislate, which I feel is wrong.

If in the future the Minister would like to have additions to section 76, we in this party would certainly consider them very sympathetically because we can accept everything that presently exists in section 76. But we cannot accept section 66 which hands over unlimited power to the commission.

We would most seriously urge the government to drop section 66 now, proceed with the other sections which are of course from 67 on and which do allow tremendous powers of regulation, and withdraw this blanket power to the commission. If that is done I feel that this would be a better bill.

MR. CHAIRMAN: The First Member for Victoria.

MR. MORRISON: Mr. Chairman, I would like to ask the Minister if this, as it would appear from his explanation, applies only to wholesalers. Does this also apply to retailers of petroleum products? Furthermore, does this section give them the authority to tell a wholesaler that, "You have too many service stations in any one location" that "your bulk plants should be relocated in other areas;" that "your distribution systems are expensive and should be changed"?

This appears to me to give them such tremendous powers to regulate any type of station, either wholesale or retail. I too believe that there are other areas where this is covered, but this is so broad and gives such tremendous authority…it's so vague in its wording and I think it's far too broad.

HON. MR. MACDONALD: This section was ghost-written for us by the late and respected Hon. Duff Pattullo.

Now as the Members say, okay, we have to look at it; notwithstanding that.

He's not of the party that I belonged to at that time, but he was a pretty great British Columbian.

This puts in the statute the general principle. We don't know what practices — but it's only those practices that unduly increase the price of the product to the consumer.

But you want to state your principle in the statute itself, and not just in regulation — making power under 76, which some of the Members accept. I prefer to see it stated in the statute. I think that's the fair way to do it.

In terms of the number of service stations, if the companies continue to go wild as they have in the past and authorize the establishment of four service stations at an intersection, and you've got service station dealers there none of whom can make a profit and working long hours, then it may be that under this section, or under the licensing system as in the province of Alberta, we might want to control that. The commission might want to control that. Certainly the dealers want it.

AN HON. MEMBER: But this is so broad.

HON. MR. MACDONALD: Most of the dealers want it. So I suggest it is a reasonable power and a necessary one. We have a philosophical difference, with all respect, with the Hon. Member for Oak Bay (Mr. Wallace), and the Liberal Party too, and the Social Credit Party. We regard the petroleum industry as, in effect, a utility service rather than just another private business. That's probably reflected in this section. My advice to Hon. Members opposite would be to vote against this section if that is their philosophical conviction.

MR. D.A. ANDERSON: Mr. Chairman, through you to the Attorney General. Our proposal to the government is that they also vote against this section because, as the Hon. Minister has made clear, it's a section drafted about 35 years ago.

HON. MR. MACDONALD: If everybody voted against it, it wouldn't pass.

MR. D.A. ANDERSON: That is precisely the point that I am making. I think 66 should not pass. You have enough powers in 67 onward on pages 22 and 23, and I see that there are many things here that we in this party agree with from 67 onwards. But this particular one we cannot. I would remind the Hon. Minister that although this was passed by the Pattullo government, it was not brought into force. The

[ Page 2808 ]

passing of the legislation was designed as a salutary curb on the industry, and it was successful. Therefore it was not necessary to bring it into force.

HON. MR. MACDONALD: This was in force. This was the Coal and Petroleum Products Control Board Act which was in force from 1940 to 1952, I think it was — not the Petroleum Sales Act.

MR. D.A. ANDERSON: I'm sorry, I have the wrong Act. But the reference I made a mistake on wasn't clear from what the Minister had said. Nevertheless, in this section you are giving away to a commission the right to decide what unduly tends to increase the price of petroleum products, which might be the service of washing the windscreen, for all I know. Obviously that costs money, to have a man take time to do that.

Then you are going on to make anybody who wishes to give some service to the public, which the public may wish to have, guilty of an offence if the commission feels that that practice raises the price. Well, obviously all services to customers raise prices.

It could be that the ideal situation would be self-service gas stations, and no cleaning of windscreens, no checking of oil, nothing at all. That may be the commission's decision.

It may be that certain gas stations want to have a higher price so that they can provide services, and the customers are willing to pay for it. That's really what you are taking away in this section. You are taking away the right to offer a better service to the public unless approval is given by this commission.

Then in addition, to make the person guilty of an offence if he tries to give better service, is going, I just think, too far. There are plenty of other regulations. This thing comes first; there are plenty of others following of which we can approve, but 66 I ask the government to reconsider, itself.

MR. CHAIRMAN: The Hon. Member for Oak Bay.

MR. WALLACE: I would like to offer an amendment to section 66, which would be designed to define somewhat better and limit the power. I would move that after the word "commission" in line 3, you insert the word "clearly" and delete the words "unduly or tends to increase unduly." The section would then read, "Any practice which, in the judgment of the commission, clearly increases the price of petroleum products to the consumer…"

HON. MR. MACDONALD: Mr. Chairman, we'll accept that amendment.

Amendment approved.

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

MR. PHILLIPS: Even with the amendment this section doesn't please me, Mr. Chairman. This bill creates a bureaucratic swamp, and as we're going to struggle through this bureaucratic swamp, some areas in the swamp are more dangerous than others. If you have ever been in a swamp, you realize that, you know.

As far as I am concerned, this section 66…

AN HON. MEMBER: How are you going to get out ?

MR. PHILLIPS: …is the quicksand in the swamp.

AN HON. MEMBER: The alfalfa cubing plant.

MR. PHILLIPS: It is the quicksand in the swamp. The reason for this, Mr. Chairman, is because it's open to so many ways of interpretation. The Attorney General has already proved that this morning. Anyone engaged in the petroleum industry…that means every service station, every person in that service station. That's the way the Act can be interpreted.

Now if the Attorney General wants to do away with what he calls and what his party calls gimmickry in the retailing of gasoline, it is very simple to do. Pass a regulation. I think this is really what this section is aimed at. But it allows the Attorney General to do more than that. Much more than that…or this new commission. They can do anything they want to.

As the Second Member for Victoria just pointed out, if you have a service station and you are doing certain things — like even washing down the front yard — and you consider that you have to put an extra ten cents on your grease job, which is a petroleum product, then this commission can come in and say "No." That's exactly the way you can interpret this, Mr. Attorney General.

Now you seem bent on getting after the petroleum industry. You consider it a utility. You want to control the advertising. Why don't you go after the bakery industry — you know, the doughnut industry, the bread industry? Mostly everybody eats, when they get a chance. We don't around here. But it's the same thing. Everybody has to eat, so why don't you go after the food industry?

They do a lot of advertising. Does that increase the cost of food, Mr. Attorney General? Next year are you going to come up with an Act to control the food industry and set up a commission — and it's the judgment of that commission…?

The Attorney General said that some service station operators work long hours and don't make any money. Is it the purpose of this commission to go

[ Page 2809 ]

along and say to them, "You've got to close up because you're working such long hours; you're not making enough money?" You're going to close them up? Is that the idea behind this interpretation of this section 66?

If you want to sell petroleum and cut down the price of petroleum, you could say don't build any more service stations, you don't need fancy service stations. You could build them out of the cheapest material that you can, because the way you build a service station increases the cost. Are we going to have just straight boxes for service stations? Because the more expensive a service station is, I guess you could say — it's the judgment of this commission.

All this is a very dangerous Act, and a very dangerous section in the Act.

This section will probably come back to haunt the provincial government. And I can't support it even in its amended form. As I say, it's the quicksand in the bureaucratic swamp that this bill creates. Limitless power to the commission if in their judgment something is going wrong. Why didn't you take Part 4 of this Energy Act and set it up as a separate Act?

MR. CHAIRMAN: Shall section 66 pass?

Section 66 as amended approved on the following division:

YEAS — 31

NAYS — 10

PAIRED

On section 67.

MR. CHAIRMAN: I recognize the First Member for Victoria.

MR. MORRISON: Mr. Chairman, again I would like the Minister to explain fully the intent in section 67.

HON. MR. MACDONALD: Section 67 gives a licensing power after a certain date. So it's not retroactive to existing stations.

AN HON. MEMBER: A licence to what?

HON. MR. MACDONALD: A licensing power almost identical with the fuel oil licensing Act of the Province of Alberta. You don't buy that? Well, I've got to prove it some other way then.

Interjections by some Hon. Members.

HON. MR. MACDONALD: Does anybody accept the legislation of the Province of Alberta under Social Credit and the Conservative Party? No? O.K., Interjections by some Hon. Members.

HON. MR. MACDONALD: All right, we can't sell that. We'll have to try to sell it in some other fashion.

The service station dealers of the Province of British Columbia have been an exploited lot in many respects. They have been exploited in terms of the three G's. They have been exploited in terms of their leases with the companies.

MR. PHILLIPS: What are you reading that from?

[ Page 2810 ]

HON. MR. MACDONALD: I'm not reading at the moment. They have been exploited in terms of their non-competitive position when other commercial outlets get cheaper f.o.b. refinery gas than they do and they starve as a result. A lot of them do. So they present a brief to their New Democratic government dated March 5, 1973, through their own association, the ARA.

HON. MR. BARRETT: Free enterprise. Little businessmen.

HON. MR. MACDONALD: Here's what they say about the Premier: "Our organization is well aware of the policy statement as outlined by Premier Barrett to the effect that he proposes to introduce legislation providing for an overall energy control board or commission."

Interjections by some Hon. Members.

HON. MR. MACDONALD: That's what the Premier said. "Our organization has no objection to the policy as outlined by the Premier and, in fact, we feel that such a progressive step is long overdue."

HON. MR. BARRETT: Small businessmen. There you are. Stand up for the small businessman.

MR. CHAIRMAN: The Hon. First Member for Victoria.

MR. MORRISON: Mr. Chairman, I would like to ask the Minister if he was referring to the licensing section in that brief from the ARA. What exactly did he mean?

HON. MR. MACDONALD: Including that.

MR. MORRISON: I'd also like to go on record that I was a service station operator for 20 years.

HON. MR. MACDONALD: Yes, I know. Until you went wrong.

MR. MORRISON: I find that a lot of the things that you say…I didn't go broke in it either, thank you.

I think that it would be better to read all of the brief, if it's in reference to this section. I don't think that that's what they were referring to at all in that brief.

HON. MR. MACDONALD: Question.

MR. CHAIRMAN: Shall section 67 pass?

MR. PHILLIPS: Just a moment. I want the Attorney General to stand on the floor of this Legislature and tell me that this licence is the licence to open a. service station. Is that what you're saying?

HON. MR. MACDONALD: It could include that.

MR. PHILLIPS: Could include that?

HON. MR. MACDONALD: Yes. Definitely.

MR. PHILLIPS: And it's going to include that.

HON. MR. MACDONALD: No.

MR. PHILLIPS: Now listen, Mr. Attorney General, you're saying here that the commission has the power to grant a licence. A licence to what? That's all we want to know.

MR. CHAIRMAN: The Hon. Minister has agreed to answer the question.

MR. PHILLIPS: A licence to operate a service station — is that what the licence is?

HON. MR. MACDONALD: Yes, that's right. It could very well be of immense benefit to the service dealers of the Province of British Columbia by limiting excessive numbers of service stations in one locality.

The other day I read from the Alberta report about how a lot of them are eking out a precarious living and putting in long hours, never seeing their families, because of a costly, wasteful duplication of services in one area. That's been a matter of concern to Alberta and it's a matter of concern to British Columbia.

AN HON. MEMBER: Is it better that they be unemployed?

HON. MR. MACDONALD: No, but better that you have some control over the numbers so you don't have a lot of people starving in order to carry this service to the public. That's about it.

[ Page 2811 ]

AN HON. MEMBER: I don't know who gave you that impression.

MR. CHAIRMAN: The Hon. Second Member for Victoria.

MR. D.A. ANDERSON: Mr. Chairman, the Minister quoted from a report and nothing he said there referred specifically to this section, as far as I could see — section 67, the one we're allegedly on. Now maybe there is something else in that report which does refer to this licensing provision. I haven't heard it from him yet and I wonder whether he's going to put it forward.

The other point is I wonder whether he would comment on the briefs that he has received, if he's now in the process of reading briefs, from the industry itself concerning the reduction in the number of service stations in the province. For example, Gulf Oil sent all Members of the Legislature a letter. They claim — and I'm not saying they're right or wrong — that they have substantially reduced the number of service stations in the province over the last few years so that the operators can do a little better.

I just wonder whether the Minister will indicate precisely what type of problem we're now facing. It appears that the industry itself has done quite a number of things to overcome this and perhaps it simply isn't as large as he has stated — and indeed as I stated myself at second reading of this bill. Could he comment then on these two points?

HON. MR. MACDONALD: On the particular point as to whether the ARA in this brief have supported licensing, I refer you…

MR. D.A. ANDERSON: Number 67.

HON. MR. MACDONALD: Yes, that's what we're talking about. They say in their brief: "We have provided some Members of the Legislature with a draft of an Act from the Province of Alberta known as the Fuel Oil Licensing Act. Additional copies of this Act are available today."

There's no question that they support the licensing provisions that are in that Act. They're similar to our own.

MR. CHAIRMAN: The Hon. Member for Oak Bay.

MR. WALLACE: Mr. Chairman, if the bill really is intending simply in section 67 to license gas stations, why not have that spelled out clearly in the section? The phrase that would concern me is the phrase "commence business." Now there must be other areas of the petroleum industry where you commence business, but you're not opening a gas station. It seems to me that this phrase "commence business" could have any kind of interpretation, almost any kind of job in the petroleum industry.

If the intent of the section, as the Minister has said, is to stop the opening of so many gas stations that none of them can be really productive for the operator, it makes a lot of sense to try and stop that happening. But the phrase "commence business" seems to me to be far too wide a definition, of what you are trying to do. Perhaps you could consider putting in the words "commence business by opening a retail gasoline station," or some such thing.

HON. MR. MACDONALD: Well, Mr. Chairman, if you turn back to the definition section on page 2, we're dealing with the petroleum industry. It's defined there pretty exactly — "distillation, refining, manufacture, storage of petroleum products and wholesale or retail distribution." So it's not everything, but it's pretty well tied down.

MR. CHAIRMAN: The First Member for Victoria.

MR. MORRISON: Mr. Chairman, I would still like to know what exactly they mean by the "licence" and what the requirements would be to get a licence. I think that this board should not have the power to decide whether the area in which a service station is to be located is going to be productive or whether it isn't. I'd like to know exactly what a man has to do to get a licence.

Conceivably, the service station could already be there. Under this section he could be refused a licence.

AN HON. MEMBER: Or with change of ownership, the second owner may not get a licence.

MR. MORRISON: That's right. The second owner may be unable to get a licence in 1974 or 1975. So, I'd like to know exactly what they have to do to get a licence and what is involved in it. I don't believe that that's what ARA meant or the service station operators meant in this section.

HON. MR. MACDONALD: I can't say much more about that except that the commission will hear representations in open hearings. If they find there's a factor that where a licence should be refused — say the undue exploitation of some other operator — then they'll consider that. But that's the main purpose of it. They'll listen to the ARA and other people. I can't anticipate all the factors. They'll have to guide themselves by the Act and the purposes of the Act.

MR. MORRISON: What you're saying, Mr. Chairman, is that at this moment you don't know

[ Page 2812 ]

what is involved in getting a licence? What a man will have to do?

HON. MR. MACDONALD: Maybe somebody is deliberately selling substandard products over a period of time. They might refuse a licence on a ground like that, as they could under the Alberta thing. It could be a ground.

MR. CHAIRMAN: The Member for North Okanagan.

MRS. JORDAN: Mr. Chairman, when one examines this Act one becomes deeply concerned about previous statements that have been made by Members of the government at other times. The first thing that I would like to refer to is when the Minister was reading from the ARA report…I think he has to accept that the ARA in many ways is a very fine organization, but there are many principles that they've been asking for that do not have the support of the majority of the dealers in British Columbia.

What so many have said so clearly is that the f.o.b. tank wagon price is the real core of their problem. I don't think the Attorney General should confuse the issue on this section with something that we all agree with.

What concerns us in part, and some of the operators, Mr. Minister, is that on repeated occasions and on committees held by this House in, past years, the government Members have stated very clearly that they felt the government should go into the petroleum industry. There have been expressions of concern about the role of private operators in this industry. This section, as I understand it, could lead to the time when the government is in the petroleum industry — when they have their own government outlets — that this commission would have the right, through this section, to give preferential treatment to government outlets as far as licensing is concerned, This would be just one more way of seeing independent operators who are successful, who maybe are not members of the ARA ' who want to be competitive, who are willing to work long hours — and some of them are making big money — they would be just left to wither and die away as has happened to the insurance industry in other areas. It's a very dangerous section.

I'm sure the present Minister would not let anything like this happen, but we must be concerned for the future, Mr. Minister, through you, Mr. Chairman.

HON-MR. MACDONALD: There's no power in this legislation for the government to go into the gasoline business.

MRS. JORDAN: No, no. But there are these statements on the record that this is the government's intention or wish. But, to have that wish on the record and this type of licensing power in the legislation could lead to a highly complex and undesirable situation in British Columbia. While Mr. Pattullo's embalmed in his grave, bless his heart he was a great Premier — you'd be embalming the independent operators in the future through selective licensing because the government would want, in essence, a strong position in the retail and wholesale distribution of petroleum products in British Columbia. We can't support this possibility.

MR.CHAIRMAN: The First Member for Victoria.

MR. MORRISON: Just one more question, Mr. Chairman. Does this give them in the licensing authority the ability to require that any service station operator, in order to get a licence, must also be unionized?

HON. MR. MACDONALD: It's not in this bill. No, there would have to be factors in the bill. The licensing would be governed mostly by section 76.

MR. CHAIRMAN: The Member for South Peace River.

MR. PHILLIPS: The Attorney General has said that there are a lot of service station operators working long hours and they have been put on by the oil company. What, in essence, you are attacking is not necessarily the service station operator, but you're attacking the franchise system, period. Because you can pick any franchised dealer anywhere where there is pressure from the company whose products he is selling. So is this just the beginning? Are you going to go around and say to people who operate A & W hamburger joints that they're working too long hours? They are a franchise dealer. Are you going to control where they are going to go? Are they going to be next?

You're involved in a principle here. Although you say that many of the service station operators have been put upon, I know the majority of service station operators in this province have been by and large successful. Many of them have gone on from starting out as service station operators to become automobile dealers…

HON. MR. MACDONALD: Politicians. There's one over there.

MR. PHILLIPS: …politicians.

HON. MR. MACDONALD: Going from bad to worse.

MR. PHILLIPS: We're involved in a principle of

[ Page 2813 ]

the whole franchise system. Because a minority of service station operators have complained to their organization, it's mainly because of…What you're going to give this commission the right to do is to go into what has previously been a free enterprise system and now you're going to regulate it. You're going to say whether you're going to go into a community…and you don't know in what community — and this commission's going to be pretty busy.

Supposing there are plans to put a subdivision out here. The commission is going to be able to say to the oil company, "No, you can't build a service station there." And a few years later, when there's no space left and the land price has gone sky-high and there's a need for that utility in that particular area, then what you could eventually do by all your regulations here — if your commission doesn't have the proper foresight — you could actually increase the cost of gasoline to the retail customer. That's exactly what could happen.

If you're going to regulate whether these service stations can have a licence or not — you might not like the looks of the outside of one and you want to close it down. This is a far, far, far, too, too, too broad a power so far as I'm concerned. The only thing I can do I guess, is vote against the section because there's no way to amend it. It just gives too much power. It's more sand; only this time it's sand in the gears of individual enterprise.

MR. CHAIRMAN: I recognize the Hon. Member for Kamloops.

MR. G.H. ANDERSON (Kamloops): I thought I'd have a few words to say on service station licensing and service station leases granted.

I've worked in the refinery in Kamloops for 16 years and I've had three employers without ever leaving the plant that I first started to work in. They were faced with a rather embarrassing situation when British-American bought out Royalite, with service stations on opposite corners and a B/A truck making the haul for the delivery. (Laughter). So one station had to go.

This was compounded a few years later when Gulf bought out B/A and you would have three service stations on three different corners with the same line hauler dumping off the product. So I can see why Gulf closed down service stations as stated in the brief they submitted. Of course they did. They were faced with a problem of distinctively built service stations that tied into the company marketing programme. It was impossible to put the Gulf signs on the Royalite stations which were distinctively built for the Royalite company. Where these dealers went, I don't know. Maybe the company offered them new jobs.

MR. CHAIRMAN: I recognize the First Member for Victoria.

MR. MORRISON: Mr. Chairman, before we leave this section, the Minister referred to section 76 as being the answer to a question that I asked on 67. I fail to see where the reference is there. I would like to have it on the record for sure that the Minister did say that under this licensing section there was no way that any service station would be required to have a union contract in order to get a licence. I want that, without question, on the record for this point.

I would also like to add one further point which was an aside to something he said, stating that service station operators sometimes end up in the Legislature. I'll be honest with you. I'm not sure that that's a step forward.

HON. MR. MACDONALD: There's nothing about that in the Act. That's all I can say.

MR. CHAIRMAN: Shall section 67 pass?

Section 67 approved on the following division:

YEAS — 29

NAYS — 12

PAIRED

On section 68.

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

[ Page 2814 ]

MR. PHILLIPS: I would like the Attorney General to tell me — I know he can't tell me exactly — but in what price range is this tax on individual enterprise going to be? How much are we talking about? $400? $1,000? All it is is a tax on individual enterprise that you're setting up here. More taxes. You go ahead and say you're not increasing taxes. Every piece of legislation; all it does is increase taxes. More taxes. Taxes, taxes, taxes.

Would you give me an idea, Mr. Attorney General?

HON. MR. MACDONALD: There's nothing in here about a charge for the licence.

MR. PHILLIPS: Oh, I see. Are you assuring me that it isn't going to cost anything? Is that what you're telling me?

HON. MR. MACDONALD: We're just dealing with the section. There's nothing in here that gives the commission power to charge for the licence, in this section.

MR. CHAIRMAN: The Hon. Second Member for Victoria.

MR. D.A. ANDERSON: In section 68, the commission here, with the approval of the Lieutenant-Governor-in-Council, may require any person to obtain a licence. This is presumably a person still engaged in the business at the moment. I would like to know why this section was written in the way it was and not similar to the section above for those who are presently in the business. And why is this discretionary?

The problem I see arising — and it may be hypothetical but nevertheless it's a fear of some people — is that they won't be able to get a licence even though they're in business. They'll continue in business and yet there's no way that they can get hold of a licence and put their business operations on a regular footing. They can apply to the commission but there's no requirement of the commission to give them a licence or even to consider their application.

We have a situation here where the commission has complete discretionary power to say, "This particular service station must apply for a licence; that one need not." They may leave many years in between before they straighten out the whole situation. I would like to know why the Minister did not simply say that from this date, no person shall continue to be in business in the petroleum industry without getting a licence from the commission. Then you could deal with all the people at once and put them all on a regular footing.

The uncertainty that exists here and the discretion to require some but not others is not in keeping with the principles of law being fair and honest and equal to all.

HON. MR. MACDONALD: The section is worded legally in terms of eliminating discrimination between equal classes. The commission would be upset in court the next day if it attempted to discriminate within classes of occupation, within classes of business or area. They must be fair and not discriminate.

MR. D.A. ANDERSON: I can see this. Section (b) and thereafter talks about establishing classes of occupation and rearranging the classes from time to time. But section (a) talks about people engaged in the petroleum industry registering with the commission to obtain a licence. That's the area where I'm worried about discrimination.

The fact of the matter is that some may want to get a licence and the commission will say, "No, the only way you can get a licence is when we ask you to apply." They have no right to apply and get a licence and then put their minds at rest about the future of their business, if that's the problem that they're facing.

I really haven't had an adequate explanation from the Attorney General as to why this discretionary power is there. It would seem necessary and useful to put things on a regular footing for all business in the province, whether new or existing.

HON. MR. MACDONALD: In my opinion, they couldn't pick or choose. They would have to apply standards that were well known to all people fairly and equally. They couldn't discriminate, even under (a).

MR. D.A. ANDERSON: Right. If the commission requests any service station operator, all other service station operators in the same category could then apply for a licence at the same time and they would have a legal right to have their application considered.

HON. MR. MACDONALD: That's my opinion.

MR. D.A. ANDERSON: I trust it's right, Mr. Attorney General.

Section 68 approved.

On section 69.

MR. CHAIRMAN: The Hon. Member for South Peace River.

MR. PHILLIPS: Mr. Chairman, we still don't know what rules and regulations you're going to have before you're going to issue one of these licences. As

[ Page 2815 ]

this section says, it's in addition to all other licences required; so it's a complete new licence. Is the licence going to spell out certain requirements of that operator? Are there going to be certain requirements before he can get the licence? What are going to be the requirements? Is it going to be just at the option of the two-man commission?

HON. MR. MACDONALD: There's only one licence that could be established under this Act. All this is saying is that if you also have to be licensed by a municipality under the Municipal Act. Well of course one doesn't affect the other. That's all.

MR. PHILLIPS: That isn't what I said. You said the licence required under this Act…oh, I'm sorry.

Section 69 approved.

On section 70.

MR. CHAIRMAN: The Hon. First Member for Victoria.

MR. MORRISON: I'd like some definitions in section 70 in (a) concerning the form and manner as to what type of information they're going to required; in (b) as to what type of fee we can anticipate; and in (f) the returns and statements to be made by the licensee for information to the commission. I'd like to have some more detail on these if I may, please.

HON. MR. MACDONALD: It's impossible for me to outline the kinds of forms that will be required, but they will have to be consistent with what are standards set in this Act. You can't ask some unreasonable questions.

You mentioned one thing about trade union organization. Well that couldn't be in here because it's not part of the Act.

On the other points, I can't read the minds of the Executive Council in the future, say, as to the amount of a fee. The Lieutenant-Governor-in-Council will fix that.

I don't think this is intended to be a revenue-raising Act — put it that way.

Sections 70 and 71 approved.

On section 72.

MR. CHAIRMAN: I recognize the Second Member for Victoria.

MR. D.A. ANDERSON: Is this to prevent the sale of licences, or at least the market in licences which exists in such things as the egg board or milk marketing in other areas? When licences are established, when you restrict entry into an industry, which I believe is one of the intentions of this Act, you do create a market in licences. That has happened in just about every area where governments have tried to regulate industries by this method. What I want to know is whether this is deliberately designed to cut out, for example, the milk licences which are now of considerable value to those people who had herds at the beginning of the system. I think we mentioned the other day that they now run $37 a pound for milk per day, which is a substantial amount of money for a licence. Is this the objective of this particular section?

HON. MR. MACDONALD: It would give that power. It's similar to the Alberta Act. It would also give the power to refuse to transfer to somebody who had a long experience, say, of breaking the standards in section 76. It would give that power.

Generally, the philosophy of this government is that people should not have to lay out large capital sums in order to engage in an occupation.

MR. D.A. ANDERSON: But the fact of the matter is, Mr. Attorney General, that the inevitable effect of this Act is precisely that. If you restrict entry to the people who want to come in, there has to be some regulatory agency to sort them out; to say only one out of two can come in. Now is it to be, as is happening in the agricultural industry with eggs, poultry, milk and other things, by way of a very heavy entry fee to purchase existing licences? That's the point I'm after.

This commission has far more powers in terms of overseeing the individuals in the industry than I expected.

HON. MR. MACDONALD: This would give the commission power to receive a submission that licences should not be up for sale at prices which make it difficult for young people coming up in the world to, say, become service station dealers.

MR. D.A. ANDERSON: But how do you do that?

HON. MR. MACDONALD: That will be a hearing before the commission. I can't prescribe the terms on which they might consent to a transfer at this time. They'd listen to argument. If we're creating, as you say, a high price for licences in the service station industry, I think the commission would want to look at that in terms of opening it up to new people who want to go to work.

MR. D.A. ANDERSON: Well this is just critical, I think, to this whole question of restricted entry to an industry. The fact of the matter is that — and we'll

[ Page 2816 ]

take a hypothetical example. A man wishes to sell his service station upon reaching retirement age; he puts it up for sale; someone comes and says, "Ah, thanks to the government closing down those on the other three corners, you've got the only one." It's a valuable bit of property — a lot more valuable than it would be if you had three others. Therefore, he thinks the value of the property is $250,000 — a quarter of a million dollars — because the government has given him a little monopoly on the crossroads. Okay?

Now he decides to sell it. He's been working there five to 10 years after this Act came into force and he knows it's worth a quarter of a million. He's got a couple of people who come up, one of whom has been a lessee in another area and who can put up the money required with a bank loan and a loan perhaps under the Industrial Development Corporation or anything else. Another fellow is a young chap of say 23, 24, a good mechanic, good guy who wants to get, into business — but really and truly what you are going to do is cut him out because he won't have the ability to attract capital that the fellow of 50 will have.

If you set up restricted entry you have set up a situation in which you must address yourself to the problem of dealing with purchasing the licence, because it's the restriction which really makes this a valuable corner; it's not everything else. Sure, the buildings are worth something. Sure, the goodwill is worth something. But it's the monopoly situation that you have created which really creates the wealth or value of that property.

I would like to know whether at that stage in my hypothetical situation the commission is going to say, "Gee, this older chap looks as though he can hack it; but on the other hand the age structure of the industry is such that there are very few young people who own service stations. We're going to give it to him." If that's the case — if you give it to the younger guy — what about the guy retiring? Is he going to have the value of the property reduced to $150,000 because the young chap can't afford to put up the full value or can't attract the capital or the credit to put up the full value of that corner? In that case is the retiring person to be cut out of the true value of the property and licence? Alternatively, if you sell it for $250,000 to the highest bidder, are you going to come in with your commission and say, "Look, $100,000 of that $250,000 is the value of the licence. We gave you the licence; therefore we own the $100,000 value of your property." Now this is the area we're in. It's really quite interesting. It has just bedevilled the agricultural industry wherever there are marketing schemes and production licences. We are in a similar area here, in my opinion. And I would like to know exactly how they're going to go about it, because the question of philosophy here could be very critical to how effective your regulation of the petroleum industry is to be.

HON. MR. MACDONALD: The commission will have to consider that, including the remarks of the Hon. Member. It's a new area in this field but not in, say, liquor or in many other fields. We don't want to create any inequities.

Of course the person transferring should have the full value of his business when he retires. But to create a special added equity in a licence just because there's been a public franchise — no, we don't want to do that.

MR. D.A. ANDERSON: The government will take that back?

HON. MR. MACDONALD: Yes.

MR. D.A. ANDERSON: The great thing is to know now that people who get licences under this scheme cannot sell them in the future, cannot take advantage of their extra value. If they don't know that now you're simply in deep, deep trouble in the future. Because people will acquire service stations on the assumption that they've got a licence, on the assumption that they can continue to make the profits that the previous chap did. Unless you establish now that the licence worth and the licence value and the licence price is to be recovered by the government and is not something which the service station operator has a right to deal in, you're simply causing a lot of grief in the industry.

HON. MR. MACDONALD: Good remarks. Question on the section.

Section 72 approved.

On section 73.

MR. CHAIRMAN: The Member for North Okanagan.

MRS. JORDAN: I think a lot of the remarks that were made on section 2 by the Hon. Second Member for Victoria (Mr. D.A. Anderson) apply here. The Attorney General must be aware that it's the legitimate small dealer today who is deeply concerned about this section of the Act along with other sections. He's got his capital invested. He's got his equity position. He's put his years of work in. It's all very well for us to want to provide opportunities for young people to get into independent business. I think we all agree. But, Mr. Minister, we cannot do that at the price and over the body of this generation.

[ Page 2817 ]

They have a right to achieve their equity when they sell, and if the government is going to increase their equity value on the basis of this licence…

MR. CHAIRMAN: Order, would the Hon. Member please obey the Chair?

MRS. JORDAN: What did you say, Mr. Chairman?

MR. CHAIRMAN: I would ask the Hon. Member to tell me what section she is speaking on.

MRS. JORDAN: Oh, 73 — the section…

MR. CHAIRMAN: I believe we're one section behind that.

MRS. JORDAN: …that no licence shall be sold, assigned, leased, transferred, mortgaged or hypothecated, devised or disposed of in any manner whatsoever except with the prior approval of the commission…"

AN HON. MEMBER: Right section, wrong bill!

MR. CHAIRMAN: Continue.

MRS. JORDAN: A lot of these licences have been done through the municipalities in coordination with zoning and with other municipal regulations and with town planning. They're concerned that when the government gets into the licensing business, although their licence complies now and their business was built up on the basis of their ability to select a site and to build that site up — and their personal reputation the government will come in and do away with their business because they wouldn't allow a transfer of licence.

Just on the basis that the Minister has said, they are going to control…it will be possible to control how many gas stations with be on each corner. They want to know what's going to happen to them. They're glad to have their sons or their neighbours' sons in the business if they want to go, but they want their fair share of the pie that they've worked for.

There are really hundreds of thousands, millions of dollars in British Columbia today that belong to small business people in an equity position that are threatened by this section of the Act. I just wonder if the Hon. Attorney General realizes that if he starts tampering in this area, he's almost bringing on British Columbia, if it's carried out, a situation where to be in the service station business in British Columbia will simply be a matter of being an employee of the government. There will be set salaries. There will be no incentives. There will be no opportunity to build your own buildings.

There's legislation before this House now which indicates the right of the Minister of Highways to purchase land at crucial corners, and this has much merit. But with actions within this Act and the stated intentions of the government, there's no question — we can see the government going in the retail service station business, either as a branded or as an unbranded dealer.

This is what they're concerned about. While the Hon. Member for Victoria has pointed out the danger of inflation in the transfer of licences as has happened in the milk industry, nonetheless, I submit that society and people today want to have the opportunity for capital gain. It's a legitimate acceptance in our society. There is a capital gains tax in Canada. They pay their fair share of the tax load.

If you haven't got a licence of any value, if the government owns the land and the buildings, after 20 years in the service station industry what does a man have to sell when he retires?

These are the questions, Mr. Minister, that they want to, know, plus the fact that we cannot have a repetition of the Land Commission Act in this Act, Mr. Minister, where people who have equity, who have years of work, who are independent, who want to be in the service station business whether they are making money or not, must have the right to sell that business on the basis of the equity, the goodwill that they have built up.

The potential for that business, as the community or the province expands, that's part of business. It's a part of the business that government would enjoy if it was in the business. The Minister can't convince me that they would say "No, no, we're a charity" if they were in business. You'd want these same benefits yourselves. You must be prepared, Mr. Minister, to give these people the same benefits and assume responsibility for losses that they suffer as a result of the change and introduction of a new licensing structure.

HON. MR. MACDONALD: Both remarks will be borne in mind, The commission has to decide these things. Nobody wants to give an artificial marketable value to a public licence, but everybody wants the transfer of a business, of course. Question.

Section 73 approved.

On section 74.

MR. CHAIRMAN: The Hon. Member for Columbia River.

MR. CHABOT: Seventy-four is the section which the government is going to use to fix prices at the wholesale and the retail level in the petroleum industry in British Columbia.

I don't like that terminology "price fixing" as you

[ Page 2818 ]

use in your section. I don't know, it might be in contravention of the Combines Act — the federal Combines Act.

This price fixing, you know, is illegal under the laws of this country. How can you enshrine in legislation right here in section 74 something that is in contravention of a federal statute? That's what you're doing — suggesting that prices should be fixed. You're going to destroy competition between small service station operators in British Columbia.

You might not believe, and some of your backbenchers might not believe there is competition. But there is competition. The markup is different in many areas. I know little service station operators that give you for cash or credit card a 10 per cent discount for coming to their service station. That's competition, and that's why the little service station that I just referred to has the volume he has, because he's willing to bargain in the free competitive society in which we live.

But this section is going to destroy the competitiveness which presently exists, even though it might be in a limited way in certain places. The government here says that they're going to fix the prices at the retail level. Are they going to make it in such a way that it will no longer be economic for the small operator to operate his service station?

Is it the intention of the government to remove the markup on a gallon of gasoline from the 10 to 13 cent level down to the 6 cents per gallon level? Is that the intention of the government?

Is it the intention of the government to break the small service station operators in British Columbia?

HON. MR. MACDONALD: No!

MR. CHABOT: Because this legislation or this section gives you the power to break every little service station operator in British Columbia. Is it your intention…?

HON. MR. MACDONALD: No!

MR. CHABOT: …by reducing the commission which a service station operator can charge, to make it no longer economic? Is it your intention then to make…

HON. MR. MACDONALD: No!

MR. CHABOT: You don't even know what question I'm going to ask before you start saying no. Is it the intention of the government…

HON. MR. MACDONALD: No! (Laughter).

MR.CHABOT: …to make every service station operator an employee…?

MRS. JORDAN: Don't confuse the Minister with the facts.

MR. CHABOT: Is this your intention, to have everyone who's dispensing petroleum products in British Columbia become an employee? And if it is, is it your intention to force them all into trade unions, as the Minister of Labour has indicated is his prime objective — to organize all the workers in British Columbia into trade unions? Is that your intention, to make all these people, by the enforcement of section 74, become employees so that you can bring them into trade unions?

There are a lot of people out there that don't want to belong to trade unions. They should have that right. This legislation makes it possible for you to force people into trade unions by destroying the competitiveness that exists between service stations. You can force them into an employee/employer relationship. It's a terrible section. The whole principle of the bill is unacceptable.

HON. MR. MACDONALD: You don't mean that, surely?

MR. CHAIRMAN: The Hon. Second Member for Victoria.

MR. D.A. ANDERSON: Mr. Chairman, the section is unacceptable to us in its present form. Also, I find many areas in it where the wording doesn't seem to make a great deal of sense. I'm not going to try to repeat a speech that was made on second reading. We passed the question of principle. The government has accepted this as principle so we're now at this stage trying to doctor up the words of various sections, and trying to make it a bill which is slightly better than it otherwise would be.

In the second line, it goes: "With the approval of the Lieutenant-Governor-in-Council fix prices or maximum or minimum prices…" Now would it not be better simply to have "maximum and minimum prices" to allow the private sector the certain area in which they can operate instead of putting down and fixing specific prices and then as well fixing maximum and minimum? Would it not be possible simply to give them some range in which they can work rather than going ahead and saying fixed prices here, but in other places it's going to be…?

HON. MR. MACDONALD: It's probably what they're going to do.

MR. D.A. ANDERSON: Well, that may be probably what they'll do, but our problem is that we don't like the principle of this, and we would like to have more certainty, so that at least we can tell the

[ Page 2819 ]

people who are concerned what we've passed in the Legislature, and how it will affect them.

The second point that I would like to make is on 2 (b): "fix different prices for licensees, notwithstanding that they are in the same class of occupation." I questioned this type of clause earlier in section 68, and I got the statement from the Attorney General that you can't treat people differently. When it comes to handing out licences they all, if they are in the same category, must be treated the same, according to legal principles which he did not enunciate at the time.

Here we are apparently making a specific legal exception from the rule that he mentioned earlier, which was equal treatment for all categories of citizens in the same class. I would think that (b) is very dangerous if ever misused, and it is the type of power which we should not permit a commission to have because if you don't give powers that can be misused, they can't be misused. So we in this Legislature, in my view, should not have 2(b) in the Act. I wonder if the Attorney General would comment on these two points.

MR. CHAIRMAN: The Hon. Member for Fort George.

MR. A.A. NUNWEILER (Fort George): Yes, Mr. Chairman, it would seem to me that when we have a situation in our part of the province where petroleum products such as natural gas, which comes from the northern part of the province and goes by our doorstep — the consumers for natural gas pay more in Prince George than consumers in Seattle pay for the same gas — yet it travels another 600 miles. Also, at the same time we have the transmission line of crude oil going by our doorstep to Vancouver. You can buy gasoline in Vancouver for about 10 or 20 per cent less than we in Prince George pay, and yet we have an oil refinery on our doorstep.

It seems to me that prices are being fixed by the private sector, and we do not need some price setting to establish fair rates for consumers throughout the province.

MR. CHAIRMAN: The Hon. Member for Chilliwack.

MR. SCHROEDER: My question has to do with the fixing of prices, both maximum and minimum. You know, Mr. Minister through the Chair, that we have in existence in the Province of British Columbia several different kinds of discount gasoline distributors at the retail level. Is the intention of this section to fix the price so that they are allowed to operate within a range? Or is the price fixing so severe that they are forced to sell at only one price, so that every vendor will be selling at the same price throughout the province? Or will they be allowed a range in which, just not more than…?

Interjection by an Hon. Member.

MR. SCHROEDER: I see, and you have no forecast on that.

MR. CHAIRMAN: The Hon. Member for Oak Bay.

MR. WALLACE: Mr. Chairman, I think that part of the intent of this bill is good. The point raised by the Member for Fort George is something that we would like to see made more just and fair.

But the language in this section "fix prices," and without limiting the generality of the same, we don't like this very widespread definition and the tremendous scope which the section gives. We feel that it could be better worded to more accurately define exactly this kind of problem which the Member for Fort George has just described.

Again, I suppose we come back to a differing philosophy. We don't believe that there is a necessity for government, through its commission, to gain this all-encompassing and rigid control of prices.

As I said earlier in the House, a gallon of gas has gone up by 11 cents since 1959. O.K., we've had technological improvements, and we've had more efficient ways of producing and distributing and refining and so on, but the fact is that in real terms, the degree to which the price of gasoline has gone up in the last 14 years is a great deal less than almost all the commodities that are so essential to our daily activities.

We believe that there is competition. We don't believe that everything is well in the industry, and some measure of regulation is required. But, as I said on second reading, this bill goes much too far, in the power it gives to the commission. And section 74 really sums up, or best exemplifies in specifics, what we oppose in general about this bill.

MR. CHAIRMAN: The Hon. Attorney General.

HON. MR. MACDONALD: …the Pacific Petroleum refinery at Taylor, and I think about half the people are in one riding, and half are in another.

Now if you ever had a profitable operation that has been exploiting the people of the north, just look at Pacific Pete (Petroleum). It's not only — you try and get a financial statement to begin with. I've seen one, and I think the Hon. Member for Fort George (Mr. Nunweiler) saw one. We read not only about the extent of the profits of that refinery, which are very extensive — my recollection is $30 million a year — but they…

Interjection by an Hon. Member.

[ Page 2820 ]

HON. MR. MACDONALD: Taxes — that's the point I'm making. On the bottom of their balance sheet they have a little footnote, and it says: "We have built up tax credit reserves in spite of these profits so that there will be no danger," they are telling their shareholders, "of paying any federal income tax for the next five or six years." They pay no income tax at all. And what do they do to you constituents? They are situated right there in the area and they charge your constituents more for the gasoline than is charged to the people of Vancouver.

You're being discriminated against. And if you don't fight for this section, you're not fighting for the people of the north. Now let's transfer this debate up into your riding — with a copy of that annual report of Pacific Petroleum: and a copy of the records of this Legislature when we see how you people vote on section 74. And I say it is up to you now to think about this carefully and protect your own constituents.

We do believe in equalizing that price of gasoline throughout the Province of British Columbia. I am not speaking for Vancouver East when I say that, I am speaking for the hinterland of British Columbia. Yes, and so should you be speaking for the hinterland of British Columbia.

Interjection by an Hon. Member.

HON. MR. MACDONALD: And if you draw our teeth by not supporting this section…

Interjection by an Hon. Member.

HON. MR. MACDONALD: No. If we emasculated that section we would not be able to equalize that price of gasoline throughout British Columbia. Just as the price has already been equalized for a bottle of Scotch whisky, so should it be equalized for that essential utility service, that gallon of gasoline.

MR. CHAIRMAN: The Hon. Member for North Peace River.

MR. D.E. SMITH (North Peace River): Mr. Chairman, now the Attorney General is going to water the gasoline. (Laughter).

I'd like to begin my comments by replying to what the Attorney General has just said in this debate and on this section.

The committee of this House studied the f.o.b. refinery price of gasoline throughout the Province of British Columbia not too long ago, at a previous session. At that time the committee found out that the tank wagon price of gasoline f.o.b. at the refinery wherever the refinery may be located in the Province of British Columbia. In the f.o.b. price there was less than 2 cents a gallon difference in the price of gasoline between the furthest north refinery in the Province of British Columbia, which happens to be the Pacific refinery at Taylor, and the refinery or refineries in the Vancouver area.

A few years ago that statement would not have been true, because there was a great discrepancy at that time in the f.o.b. refinery price of gasoline in the Province of British Columbia. But that discrepancy was removed by the petroleum industry and there was a leveling out of the wholesale price of gasoline throughout the whole Province of British Columbia to the extent that less than 2 cents per gallon difference exists at the refinery level anywhere in British Columbia.

If you enact this section, what you are saying is that you have the power to dictate to every individual dealer the retail price for gasoline. And this is a decision the dealer himself should make.

I could take you into many parts of northern British Columbia and go throughout those particular areas and communities and show you anywhere from 2 to 8 cents a gallon difference in the price of gasoline at the pump. That is up to the retail dealer as to what he does.

There is a problem as I see it in operating a retail gasoline outlet or service station in the north as compared to the southern part of the province. I feel that the people who do operate in the climatic conditions that they have to face in the north and operate not only in the area of selling gasoline but servicing vehicles, do require a larger markup.

The reason they require a larger markup is that in the winter months to even do an oil change on a car they have to take that car in and thaw it out. They have to put it in storage — they have to put the car in a warm, enclosed area for an hour before they can work on it. Now that costs money and they should be entitled to reflect some of that cost, not only in the price that they charge for the use of their premises but also in the price that they charge for the sale of gasoline or oil products. They're doing that and they make no bones about that fact, that it costs them more to service vehicles in those parts of the country.

They charge more, certainly, and they should be entitled to. Because a man in Vancouver, unless the conditions are extreme, can drive his car into a service bay, have the oil changed, a grease job, gasoline service, and have it out within half an hour. But you can't do that in the north under climatic conditions that we have from the end of October right through to the end of March.

This is why the price at the retail level fluctuates. It also fluctuates at the wholesale level.

The f.o.b. refinery price, the last time it was investigated by a committee of this House — and it

[ Page 2821 ]

was investigated thoroughly — the f.o.b. refinery price of gasoline varied less than 2 cents between the refineries in the southern part of British Columbia, the refinery in Prince George and the refinery in the North Peace at Taylor. That's right. That's right, Mr. Attorney General.

So that is a fact that the f.o.b. refinery price of gasoline at the wholesale level varied less than 2 cents a gallon. So. what you are doing with this section is forcing the retail dealer into a situation where the government through the commission will dictate to that dealer the markup on gasoline. We don't support that.

MR. CHAIRMAN: First Member for Victoria.

MR. MORRISON: Mr. Chairman, I'd like to also add that you can find those kind of price fluctuations right here in the City of Victoria. There are service stations not too far from this building in which gas is 7 to 8 cents, and one in particular that I can think of where it is 9 cents a gallon less than the service station within a block of it.

The customer has the right at that point to choose whether he wants his car washed for nothing or if he wishes to pay for it; and if he doesn't want his car washed at all he can have it at the lower price.

Personally I can't see if this is legal and I'd like to have the Minister assure us that this does not contravene any federal Act for price fixing. Secondly, I frankly think it is a mistake to require an independent operator to fix his price at the retail level because he gives the service; if the customer doesn't want it, he doesn't need to go there.

HON. MR. MACDONALD: Yes, it's perfectly legal, I'd like to say that we're primarily concerned with the f.o.b. refinery price in the Province of British Columbia. This is the social evil. The dealer's markup is not a social evil. The power is there to correct abuses in either field. Make no mistake about that. But our major concern is with the refineries. Let's be plain about that.

MR. CHABOT: You have no intention of tampering with the rights of the small service station operator to establish the markup he feels is necessary to look after his own overhead and facilities?

HON. MR. MACDONALD: It's up to the commission.

MR. CHABOT: Oh, you're suggesting the commission might start tampering with a markup of a small service station in British Columbia. You're suggesting they might be forced out of business, no longer economic to operate the service station and become employees of the commission. Is this what you're suggesting? I'll tell you that's the kind of legislation I won't support. The Minister saying they are going to start tampering with the markup on gasoline in service stations in British Columbia is despicable. It's despicable, rotten, socialist, left-wing government action. That's all it is. Takeover legislation. Takeover legislation.

MR. CHAIRMAN: The Member for North Okanagan.

MRS. JORDAN: Mr. Minister, your plea for many years in this House was that the independent operator, the branded dealer, the service station operator in British Columbia was under the thumb of a gargantuan master, the oil companies. In this legislation all you are doing is taking him from one master and putting him under the thumb of another master — the energy commission.

You're not standing up for the little guy at all. You say well, we're primarily interested in the wholesale price at this time and this is a legitimate concern. But it's at this time, Mr. Minister.

What's going to preoccupy your mind and this commission's mind next time? That's going to be the prices of the retail operator. There are going to be people on there who don't know boom-all about the problems involved in small business. You are just changing one master from another.

MR. CHAIRMAN: Shall section 74 pass?

Section 74 approved.

MR. CHAIRMAN: The Member for South Peace River.

MR. PHILLIPS: I have to agree with what the Attorney General said when he says that he would like to see the retail price of gasoline everywhere in the province equalized. Is that what you said? Maybe this is as it should be, but before you start involving him let me tell you what you're going to be facing.

Your constituents in Vancouver East, Mr. Attorney General, are going to pay more for their gasoline. You're against your constituents. I'm going to go in Vancouver East I'm going to tell about how you're shoving the price of gasoline up in your constituency.

I'll tell you why. I can take you, Mr. Attorney General, to places 500 miles up the Alaska Highway where the price of gasoline is 15 to 20 cents higher than it is at Taylor, B.C.

Now, your constituents, Mr. Attorney General, in Vancouver East are going to be paying the price of trucking that gasoline from Taylor to Fort Nelson, Mile 408, Watson Lake — your constituents are going

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to be paying that, Mr. Attorney General. Your constituents, Mr. Attorney General, are going to have to pay for those heavy trucking costs on the Alaska Highway, that graveled highway that the federal government won't even pave for us after the U.S. government built it.

I'm trying to point out the dangerous ground the Attorney General is on, very dangerous ground. We would have the City of Vancouver subsidizing the retail price of gasoline for the members of the north. I couldn't really be against that, could I? However, the way you're doing this is giving your commission power to set these prices and I don't think that they will take all of these things into consideration. This commission is going to be so busy. So we're going to be slugging it out in the swamp again, and I'm going to have to vote against it.

HON. MR. MACDONALD: Mr. Chairman, I'm not worried about the people of Vancouver East because there can be a general reduction of the price of gasoline. Those people will back us up in terms of a general restraint on price increases and reasonable profits — not exorbitant profits — throughout that oil company system.

You bet! Let's have it for Vancouver East and let's have it for the Peace River. You fellows should support this section. Let's see how you do it.

MR. CHAIRMAN: The Hon. Member for North Peace River.

MR. SMITH: Yes, Mr. Chairman. If I had confidence in the fact that really the only people that you were trying to get at are the people who refine the gasoline and wholesale it out, I'd be inclined to support this section.

But this section, Mr. Chairman, covers not only the wholesale level of gasoline distribution but the retail level as well. In other words, you can set the price at the retail level as well as the wholesale.

I agree with the Attorney General that there are different wholesale prices for different customers in different areas. That's been established. But the fact remains that the tank wagon price f.o.b. the refinery to the retail trade varies less than 2 cents a gallon between the northern and southern parts of the province. That's been established.

HON. MR. MACDONALD: Why shouldn't you have the cheapest gas in the province when you've got that Taylor refinery and it's making big profits? It's paying no taxes. Why shouldn't you have the cheapest gas?

MR. SMITH: There's less than 2 cents difference between the f.o.b. refinery price at Taylor and the f.o.b. price in Prince George or in Vancouver.

HON. MR. MACDONALD: You should have the cheapest gas in the Province of British Columbia.

MR. SMITH: What makes you think that it's 2 cents higher, Mr. Attorney General, than it is in Prince George or Vancouver?

HON. MR. BARRETT: Are you satisfied with the price in your area?

MR. SMITH: I am suggesting, Mr. Chairman, that everyone wants to get the product at the best price possible, regardless of what that product might be, I'm suggesting that the retail dealer should have the opportunity to set his markup himself, not by legislation or by an Act of the government. If you want to help the retail dealer then look at the position and the actual cost of manufacturing or producing gas and the markup that the wholesaler takes at the refinery level.

HON. MR. MACDONALD: We can't do it unless we pass this section.

MR. SMITH: This section is aimed at both wholesale and retail level. As such, we cannot support it because it's aimed at the retail level, the little dealer who has the right to set his markup.

MR. CHAIRMAN: The First Member for Victoria.

MR. MORRISON: I'd like to ask, Mr. Chairman, if the Minister would give me a definition of the phrase he just used — "a reasonable profit." I'd like it referred to the retail market, not the wholesale market. I'd like to know what this definition of "reasonable profit" is.

HON. MR. MACDONALD: I would say that there are no "reasonable prophets" on the other side of the House, because they seem to think their political fortunes are on the rise and their prophesy is hardly accurate.

MR. PHILLIPS: You don't know one profit from another prophet.

HON. MR. MACDONALD: We'd have to go back to section 26 which gives the commission the power to protect people against unjust rates or discrimination within rates. That's up to the commission.

MR. CHAIRMAN: The Member for Fort George.

MR. NUNWEILER: Mr. Chairman, I was just going

[ Page 2823 ]

to point out that there are many service stations that have explained to many of us that they find themselves boxed-in in situations where they find the oil company is retailing gas for less than what they pay for it themselves. If there is ever a vehicle required to protect the retailer and the consumer against this type of abuse, it's time that we had one. This is the only way it can be done.

We hear complaints about the word "fix," the definition of "fix" is "to repair, to adjust, to revise, to fix thereon." So therefore, Mr. Chairman, this is exactly what we're trying to do.

MR. CHAIRMAN: The Hon. Premier.

HON. MR. BARRETT: Mr. Chairman, during the election campaign and prior to it I toured through the north a great deal. The north was commonly known as the "seven safe Socred seats." When I went through the area I was asked time and time again about whether or not I agreed with Mr. Shelford in terms of equalizing gasoline prices. Mr. Shelford campaigned through the north, as some of you recall, for equalized gasoline prices. We had a royal commission here in this House and we had recommendations from that royal commission.

I said that if we were elected to government we would do everything we could to give the people in the north an equal break with the people in the south. The north, with the refinery right up there at Taylor Flats, shouldn't subsidize the south, but there should be equal opportunity and equal access to gasoline at a fair price. Now, we made that statement during the campaign. I campaigned through the north on that pledge and that's what this section is all about.

The northern people will have to see who voted for the section and who voted against it so they will know exactly who's fighting for them and who hasn't made up their mind yet.

MR. CHAIRMAN: The Member for South Peace River.

MR. PHILLIPS: I can speak freely on this because I'm not really in the service station business as such. I used to be but I divorced myself from it because it was too successful. However, if I vote for this, I am voting against my own customers, because we have one gas pump.

HON. MR. BARRETT: Don't vote for it.

MR. PHILLIPS: One gas pump. I don't know how much below the price of gasoline, I couldn't tell you how many cents below the retail price of gasoline at the present time we have that one pump marked up at. So if I vote for this you can come in and tell me that I've got to bring the retail price up on that one pump, which we keep mainly for our convenience — and a lot of our customers come in and help themselves; we don't even have a man attending it.

You're telling me that you're going to come in and say, "You bring that up to the possible level." I'm giving my customers a break. And you're for increasing the price of gasoline. That's what you're doing in section 74, you want to increase the price of gasoline in the Province of British Columbia and you're asking me to vote for it. I can't vote for it.

HON. MR. BARRETT: Vote against it. Nice try. You explain that one up home.

MR. CHAIRMAN: The Member for Columbia River.

MR. CHABOT: I think without the Premier infusing the business that we're supporting the big corporations, we're standing up here trying to protect the small service stations. As the Minister of Industrial Development, Trade and Commerce (Hon. Mr. Macdonald) has indicated very clearly that the commission will be adjusting prices at the retail level, which might have a very serious detrimental financial effect on the service station operators in British Columbia.

I'm a great believer in the marketplace and the free competitive system we have. I know that in Victoria alone on a number two gas — the kind of gas I buy — I can buy gas at one pump that's 10 cents a gallon cheaper than another place, but it's a bit of a loss leader with that company.

Interjection by an Hon. Member.

MR. CHABOT: I'm sorry. That's the wrong word I'm using. It's not a loss leader. This is an encouragement really for people to come and buy gas there, because they're making money on that particular price.

AN HON. MEMBER: Who lost a leader?

MR. CHABOT: This has wide ramifications. It's a far-reaching section. The Premier can rant and rave all he wants that it's against the big corporations and big refineries and it's for equalization of the price. I'll tell you what it is. It's against the small service operators in British Columbia. We won't support it.

MR. CHAIRMAN: The Second Member for Victoria.

MR. D.A. ANDERSON: The only reason I re-enter this debate on this section is that I have been a little horrified to hear from both the Attorney General and

[ Page 2824 ]

the Premier the fact that adjusting the price of gasoline will be done for political purposes.

SOME HON. MEMBERS: No, no.

MR. D.A. ANDERSON: That's a clear indication of what came out of their speeches. The statements made about the "seven safe Socred seats" in the north. It came out in this debate — forced out by the length of the debate perhaps. This is the very type of thing which surely this type of commission has to get away from.

HON. MR. BARRETT: If I raise the question, will that be non-political? We want to give people an equal opportunity right across this province. If you're against it, vote against it.

MR. D.A. ANDERSON: The simplifications that the Premier loves to put forward at a time like this when he finds himself in any difficulty have come again.

The problem is this: this commission should not be using the price of gasoline or the price of any other product or adjusting prices around the province for political purposes. That's exactly what we've had come out of both the Attorney General in his latest statement and the Premier in his.

Mr. Chairman, we've discussed our doubts on the actual section itself. I know I'm now really back on the question of principle, but we stated when this came up in second reading that we didn't like this type of legislation because this type of thing could be done. We were given the usual, "Oh, it won't happen. It's not for political purposes."

The debate that's taken place in the last 40 minutes has shown that that's one of the objectives of this bill; and that I think is simply shocking.

HON. MR. BARRETT: Mr. Chairman, we brought in this legislation for political purposes. We brought in Mincome for political purposes. We brought in guaranteed incomes for the crippled for political purposes. We ran in politics for political purposes. That's what it's all about. We're fighting for the little people of this province.

MR. CHAIRMAN: Shall section 74 pass?

Section 74 approved on the following division:

YEAS — 29

NAYS — 12

PAIRED

MR. PHILLIPS: I move 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. Lorimer files answers to questions.

MR. SPEAKER: The Member for Oak Bay.

MR. WALLACE: Mr. Speaker, I ask leave of the House to withdraw motion 15 on the order paper.

Leave granted.

Hon. Mr. Barrett moves adjournment of the House.

Motion approved.

The House adjourned at 12:50 p.m.