[ Page 2499 ]

CONTENTS

Routine proceedings

Oral questions

Reduction of gasoline tax. Mr. Bennett — 2499

Extension of imported wine list. Mr. Gardom — 2499

Mechanical problems on ferries. Mr. Wallace — 2500

Postage stamp insurance vote for motorists under Autoplan. Mr. Phillips— 2500

Sale of defective car to minor. Mr. D.A. Anderson — 2500

Export of refined petroleum products. Mr. McGeer — 2500

Identity of persons conducting courts survey. Mr. Gardom — 2501

Radio announcement on Unified Family Court Act. Mrs. Jordan — 2501

Vehicle testing stations for Langley — Surrey area. Mr. McClelland— 2502

Committee of Supply: Department of Mines and Petroleum Resources estimates.

On vote 174

Hon. Mr. Nimsick — 2502

Mr. Richter — 2506

Hon. Mr. Nimsick— 2510

Mr. Gibson — 2511

Mr. D.A. Anderson — 2523

Mr. Gibson — 2523

Mr. D.A. Anderson — 2524

Hon. Mr. King — 2524

Mr. Gibson — 2525

Hon. Mr. Gibson — 2527

Mr. Cummings — 2528

Mr. Phillips — 2530

THURSDAY, APRIL 25, 1974

The House met at 2: 00 p.m.

Prayers.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I have the pleasure of introducing my sister and her husband from England with my wife and daughter, and I would ask the House to welcome them.

MR. SPEAKER: I would remind Hon. Members that it's National Secretaries Week. If you have a secretary, take her out to lunch.

Oral questions.

REDUCTION OF GASOLINE TAX

MR. W.R. BENNETT (Leader of the Opposition): Mr. Speaker, to the Attorney-General. Inasmuch as the Attorney-General, in discussing energy yesterday, mentioned that gasoline would be going up 8.5 cents a gallon in the province, and as he's taken control, has he discussed with the Minister of Finance (Hon. Mr. Barrett) a programme such as Alberta has brought in, in reducing the gasoline tax by 5 cents per gallon, and also a proposal to reduce it another 5 cents per gallon in Alberta? Will he be recommending to the Minister of Finance, upon his return, that British Columbia be prepared to make the same concessions to their motorists?

HON. A.B. MACDONALD (Attorney-General): Mr. Speaker, the Minister of Finance will announce the future policy of the government in this field. The 8.5 that the Hon. Member mentioned is really the calculation of what the additional increase in the price of crude from $3.70 to $6.50 works out to in terms of a gallon of gas as we see it. That's what that is.

MR. BENNETT: Well, a supplemental, Mr. Attorney-General. As you are concerned about controlling the motorists and controlling the price on the company level, and as the Energy Commission seems concerned about the price increase that would pass along, does not the Attorney-General, as part of this government and through his concern as discussed in the paper, make recommendations to the Finance Minister? And has the Energy Commission given the Attorney-General any advice as to this being done, that the savings be passed along to the motorists — the increase of profit on the petroleum resource in this province — through reduction in the gasoline tax?

HON. MR. MACDONALD: Mr. Speaker, we have received advice, but announcements of future policy in that respect will be made by the Premier.

MR. J.R. CHABOT (Columbia River): A supplemental, Mr. Speaker. On numerous occasions the Attorney-General has stated that the absolute control of the petroleum industry, which you presently have, would generate an additional $100 million of revenue for the province and that this would in turn be passed on to the people of British Columbia. I'm wondering if this would be passed on in a form of a reduction in the gasoline tax.

We find in bordering communities between Alberta and British Columbia that the price of gasoline is 15 cents more expensive in B.C. Here's an excellent opportunity. I was wondering if this is going to be the kind of recommendation you'll make — that the gasoline tax be reduced so that the benefits can be accrued....

MR. SPEAKER: Order, please. Would the Hon. Member be seated? Usually when you draw attention to a point by saying the word "order," it usually means that the Member who is speaking stops. I just thought I had better remind you of that.

MR. CHABOT: Oh, thank you very much.

MR. SPEAKER: Now you know. Obviously, future policy cannot be asked in question period.

EXTENSION OF IMPORTED WINE LIST

MR. G.B. GARDOM (Vancouver–Point Grey): A question also to the Attorney-General, Mr. Speaker. In view of the long overdue but anticipated and now thoroughly public revelation that B.C. wines are inferior, is the Hon. Attorney-General prepared to order the Liquor Control Board to open its list to imported wines and give the B.C. consumer a break, both as to quality and as to price?

MR. D.M. PHILLIPS (South Peace River): Sour grapes. (Laughter.)

HON. MR. MACDONALD: Mr. Speaker, tests that have recently taken place indicate that B.C. wines are distinguishable, but not necessarily inferior. (Laughter.)

MR. GARDOM: A supplemental, Mr. Speaker, to the Attorney-General. Who has been responsible in the LCB for the obvious lack-of-palate policy that's so long been imposed upon the citizens of this province?

AN HON. MEMBER: Your taste's all in your mouth. (Laughter.)

[ Page 2500 ]

MR. SPEAKER: I think it's ironical — not in good taste.

MRS. P.J. JORDAN (North Okanagan): A supplementary, Mr. Speaker. On behalf of the farmers of British Columbia, I demand that this Member for Point Grey — both of them — withdraw these insults to the grape producers of British Columbia. (Laughter.)

MR. SPEAKER: Order. Is that a question?

MRS. JORDAN: It's easy to speak when you have a silver spoon in your mouth. (Laughter.)

MECHANICAL PROBLEMS ON FERRIES

MR. WALLACE: I'd like to ask the Minister of Transport and Communications what the nature is of the recurring mechanical problems which resulted in the cancellation of ferry service today between Horseshoe Bay and Nanaimo.

HON. R.M. STRACHAN (Minister of Transport and Communications): The recurring problems are all different, as a matter of fact. A week or so ago it was that some tugboat had let loose a long wire cable with a nylon cable attached to it. The nylon got wrapped around a propeller, and then the iron cable got wrapped around the propeller. We had to wait two days to get it into dry-dock.

This recent one was a leak around the seal, which meant that oil was escaping, and again we made inquiries. These sorts of occurrences happen because the ferries are being used full blast. They differ, and these are part of normal use.

MR. WALLACE: A supplementary question, Mr. Speaker. Is there any evidence that in fact the continuing frequent use of the ferries and the age of the ferry are in any way becoming factors in the efficient functioning of our ferry ships?

HON. MR. STRACHAN: Of course continuous use is certainly a factor and they are being used full out, I think, as most of you know. But the ferries are...the oldest ones, I think, are now about 12 to 14 years old; there is 10 to 15 years more good use in them. They go into dry-dock once a year for a complete refit and checking, so they're well kept up.

POSTAGE STAMP INSURANCE RATE
FOR MOTORISTS UNDER AUTOPLAN

MR. PHILLIPS: Mr. Speaker, I would also like to direct my question to the Minister of Transport and Communications, in regard to the Insurance Corporation of British Columbia. Mr. Speaker, in view of the Premier's statement that he intended to assist the motorists in the outlying areas of the province to run their automobiles at less cost in view of the increased cost of gasoline, would the Minister institute a survey to determine the cost to the insurance corporation of instituting a postage stamp rate for insurance throughout the province?

MR. SPEAKER: May I point out that to ask the government's opinion on a matter of policy is really not the purpose of question period?

MR. PHILLIPS: Well, I didn't ask him, Mr. Speaker, in all due respect, to change his policy. I asked him to institute a survey.

MR. SPEAKER: Well, you are still asking for something that is not proper in question period.

HON. MR. STRACHAN: You asked me to consider a survey. I'll read the question and then give it serious consideration.

SALE OF DEFECTIVE CAR TO MINOR

MR. D.A. ANDERSON (Victoria): Mr. Speaker, a question to the Minister of Consumer Services. May I ask the Minister whether she's received representations from a Mr. Henry Mash of White Rock regarding the sale of a defective automobile to a minor?

HON. P.F. YOUNG (Minister of Consumer Services): Yes, our office has received correspondence on this matter.

MR. D.A. ANDERSON: May I ask whether the Minister has instructed her departmental officials to investigate this with a view to ascertaining whether the person in question should receive compensation for the sale of the vehicle, which allegedly is a lemon?

HON. MS. YOUNG: The department has been in touch with the gentleman concerned, and it is my understanding that they have a great deal of correspondence back and forth. The company, I believe, has offered to make a settlement, and Mr. Mash refuses to meet with the company. This is our latest information from correspondence.

EXPORT OF REFINED
PETROLEUM PRODUCTS

MR. P.L. McGEER (Vancouver–Point Grey): A question for the Attorney-General, Mr. Speaker, with respect to export of refined petroleum to the United States. A member of the Energy Commission has stated that some of the refineries in British Columbia are exporting refined petroleum products for

[ Page 2501 ]

automobiles to the United States. Are the allegations made by the member of the Energy Commission correct?

HON. MR. MACDONALD: Mr. Speaker, I think they are correct. There's been quite a considerable export of the refined products from the refineries of B.C. into the northwest of the United States. That wouldn't matter to us if we were getting the products we need. I doubt if that situation will continue for many more years, because I think we'll begin to need all the refined products we can get, even on the present basis. So it's something that has to be watched.

I think the government, in a situation like that, should have the necessary controls to make sure that the refineries produce the products that we need for our own economy; then if there is an exportable surplus, that's another question.

MR. McGEER: Supplementary. Is any of this petroleum being sold in the United States at a lower price than similar products are being sold in Canada?

HON. MR. MACDONALD: I have no information on that, Mr. Speaker.

MR. GARDOM: Another question to the Attorney-General, Mr. Speaker.

MR. SPEAKER: Order! I wonder if the Hon. Member would allow the Member for South Peace River a supplemental?

MR. GARDOM: Surely.

MR. PHILLIPS: Supplementary to the Attorney-General. Will the Attorney-General instruct the Energy Board to make sure that the proper type gasolines are available in British Columbia in 1975 to meet the pollution control standards on the automobiles at that time?

HON. MR. MACDONALD: Well, Mr. Speaker, pollution control is under another department.

MR. PHILLIPS: The pollution control equipment that's going to be on the automobiles in 1975: we must have a special type of gasoline, and it's not available....

HON. MR. MACDONALD: I don't believe that's been under consideration by the Energy Commission.

IDENTITY OF PERSONS
CONDUCTING COURTS SURVEY

MR. GARDOM: Yesterday I asked the Attorney-General some questions about the survey of court facilities, and he was saved by the bell, Mr. Speaker. I'd ask him who has been conducting this survey of court facilities in B.C.

HON. MR. MACDONALD: Well, it's a function of the Justice Development Committee.

MR. GARDOM: Well, who's doing it?

HON. MR. MACDONALD: Who are they?

MR. GARDOM: Yes.

HON. MR. MACDONALD: Well, the Justice Development Committee — and I'm speaking from memory now — would be David Vickers, Jack Cram, Ed Epp, Hank Matheson, Laurie Brahan, with advice from other people outside; and I've missed some names.

MR. GARDOM: Well, a supplemental, Mr. Chairman.

HON. MR. MACDONALD: The chairman is David Vickers.

MR. GARDOM: Is public representation being requested, Mr. Attorney-General, and will the results be made public?

HON. MR. MACDONALD: Public representation is being received whether requested or not. It's a pretty open question. Nothing is being hidden in respect to anybody who wants to make an argument about what we should best do with respect to court facilities in any municipality in B.C.

MR. GARDOM: Well, will the results of these inquiries be made public, Mr. Attorney-General — yes or no?

HON. MR. MACDONALD: Oh, I can't guarantee that every letter that comes in is going to be made suddenly public, no.

MR. GARDOM: The results?

HON. MR. MACDONALD: Oh yes, the results will be announced in due time.

RADIO ANNOUNCEMENT ON
UNIFIED FAMILY COURT ACT

MRS. JORDAN: To the Attorney-General in regard to the family court situation. In view of the fact that it was announced publicly today on radio station CJOR by a family advocate that the Unified

[ Page 2502 ]

Family Court Act would be law within two weeks in British Columbia, has the Attorney-General given the Berger commission information on the actions of the Legislature that is not available to the legislators themselves? And is this a firm deadline that the Unified Family Court Act will, in fact, be law within two weeks?

HON. MR. MACDONALD: No, Mr. Speaker. I would hope that some of the bills — and I regard that as a kind of an urgent one, will receive consideration fairly early in the next two or three weeks. But whether or not they pass and are approved by the Lieutenant-Governor-in-Council, of course, is in the hands of the Legislature. Nobody can make an announcement as to that.

MRS. JORDAN: Supplementary. That's my point, Mr. Attorney-General. In light of the fact that you consider this Act urgent, and perhaps many Members do, would it not be more in accord with your responsibilities to discuss this with the Legislature, rather than have it announced by a member of the commission on a radio station in Vancouver? Is this not an abdication of your responsibility to this Legislature and an erosion of the rights and responsibilities of the Members of this Legislature?

HON. MR. MACDONALD: Mr. Speaker, it was not announced on my instructions, and I think that a certain amount of free speech out in the community is desirable.

MRS. JORDAN: As long as it's free speech and not instruction.

MR. SPEAKER: Order, please! It's becoming argumentative.

VEHICLE TESTING STATIONS
FOR LANGLEY-SURREY AREA

MR. R.H. McCLELLAND (Langley): A question for the Minister of Transport and Communications. Could the Minister advise whether or not a site for a motor vehicle testing station has been selected in Surrey to serve the North Delta, White Rock, Surrey, Langley area?

HON. MR. STRACHAN: I'm not sure about Surrey. I think one has been obtained by agreement with the Richmond City Council. I'm not sure about Surrey.

MR. McCLELLAND: Would the Minister take that as advisement and let us know at a later date?

HON. MR. STRACHAN: Yes.

Orders of the day.

The House in Committee of Supply; Mr. Dent in the chair.

ESTIMATES: DEPARTMENT OF MINES
AND PETROLEUM RESOURCES

On vote 174: Minister's office, $68,724.

AN HON. MEMBER: Too much.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Chairman, seeing that the opposition weren't going to say anything and let the vote go through, I thought that I had better get up and say a few words in regard to my department.

You will notice that I've been very silent during this session, and I haven't had much to say.

And I haven't got any executive assistant, Hon. Member.

Interjection.

HON. MR. NIMSICK: I haven't got any. I have no executive assistant, so that settles your question right there.

MR. CHAIRMAN: Order please! Would the Hon. Minister please address the Chair? Order, please! Would the Hon. Minister address the Chair, please?

HON. MR. NIMSICK: I think I've got enough knowledge in this field of handling the department without having an executive assistant, and so that is why I haven't got one.

Interjections.

HON. MR. NIMSICK: Now, in discussing this department, I am a little reticent due to the fact that I've got about four bills on the order paper. There is one thing I wouldn't want to do, and that is transgress on the privileges of the House...

AN HON. MEMBER: Hear, hear!

HON. MR. NIMSICK: ...nor on the Chairman, something I'm sure you will agree I have never been guilty of.

First, I'd like to introduce to you my Deputy, Mr. John McMynn; my Associate Deputy in mining, Dr. Fyles; and my Associate Deputy in petroleum resources, Mr. Lineham.

MR. A.V. FRASER (Cariboo): Where's the guy who really runs it?

[ Page 2503 ]

Interjections.

HON. MR. NIMSICK: You would like to believe some things that probably would satisfy your ego a little bit, but I'm afraid that's pretty difficult to do because I've been here just a little too long to fall for that kind of malarkey, maybe we might call it.

AN HON. MEMBER: You'd never satisfy their ego; it's too great.

Interjections.

HON. MR. NIMSICK: The department has had a very good year in 1973. The mineral industry alone has brought in nearly a billion dollars in values into the Province of British Columbia, and almost half of this billion dollars comes from the depletion of our copper resources in the Province of British Columbia.

When I took over the department I found this department did not get the recognition it should have; it was somewhat of a poor relation in the operation of government. They set it aside and let it be run by the mining industry rather than by the elected representatives of the province. For that reason, in order to try and update it, I divided the department into two branches in order that each branch would get the credits they've got coming. I divided it into petroleum resources and into the mineral resources.

Due to that fact, I've had to increase staff to some extent. I've set up two new divisions. The revenue division will be responsible for collecting revenue to enhance the consolidated revenue of the Province of British Columbia and, from there, to fulfil many of the social amenities that are so necessary for the people of British Columbia.

AN HON. MEMBER: What about the takeover?.

HON. MR. NIMSICK: In order to give a better service to the department, to the people who are in the field and in the industry, and to the prospector who, I understand, finds all minerals in the province, we have to have more inspectors and more geologists. Through this we have decided the resource must be managed properly on behalf of the people.

We must not forget that this is a non-replenishable resource which this department deals with. We must not only think of today; we must think of tomorrow and the day after and the day after that. We must think of the coming generations.

I attended a conference in Ottawa where we had Ministers from all the provinces sitting down and discussing the mineral resources of Canada. Some of them came from Conservative provinces, some from Liberal provinces and some from New Democratic Party provinces. I didn't find any Social Credit provinces there. (Laughter.)

Interjections.

HON. MR. NIMSICK: They said one of the objectives was that we must receive the optimum benefit from the depletion of this non-replenishable resource on behalf of the people of Canada.

I would just like to give you a quote here:

"Relate mineral development to social needs;

Ensure national self-determination in mineral development;

Improve mineral conservation and use;

Increase the return to Canadians from exportable mineral surpluses;

Ensure the mineral supply for national needs."

That's the basis of what we should be aiming at.

I'm sure you're going to have a few questions afterwards, and I hope to answer some of those questions before you ask them because I can read some of your minds fairly well.

AN HON. MEMBER: Hear, hear!

Interjections.

HON. MR. NIMSICK: We must not forget that the demand of our mineral resources by the year 2000 is going to at least triple. So don't get in a panic about how fast we want to deplete our resources.

When I took over the department, the top priority I placed in the department was safety...

MR. D.M. PHILLIPS (South Peace River): To retire.

HON. MR. NIMSICK: ...for the miners. I know you'd like me....

MR. PHILLIPS: You'd like to yourself.

HON. MR. NIMSICK: I'm sure there are some here who would like me to retire.

Interjections.

HON. MR. NIMSICK: Well, I'm telling you now that you'll miss me when I'm gone, I'm sure. (Laughter.) I'm sure the industry will miss me as well.

AN HON. MEMBER: Hear, hear!

HON. MR. NIMSICK: They'll know I was here, I'm sure. (Laughter.)

Interjections.

[ Page 2504 ]

HON. MR. NIMSICK: A statement was made in regard to safety in British Columbia, and this statement was printed in the paper some time ago. It stated: "Working conditions in B.C. mines are the most deadly in the country." The individual who made that statement compared 1970 to 1950. I would like to say that statement is incorrect. The injury experience of the British Columbia mines compares favourably to the other provinces in Canada, and they've got the best record of any province in Canada. I'm not saying this is what we want; we want to get years when there are no accidents in the mines at all.

In the year of 1950, there were 11 fatalities; injury frequency was 97.4. In the year 1970, the year taken by that individual, there were 13 fatalities, two of which were outside the mining industry. At that time it was 38 per cent. Instead of saying it was 1.75 per million hours, it breaks down to .793, which was a better rate than they had in 1950. The year 1950 was the best rate in all the years previous, and that is probably the reason why they compared it with that time.

Mining is classified by the Workmen's Compensation Board as Class A hazard. It is interesting to note that the mining industry was the only industry in British Columbia to receive a decrease in assessment rate during the past three years; the assessment rates of all other industries increased or remained the same. The mining industry is high in record of safety in the Province of British Columbia.

During the year 1973 there were 129,282 work injuries reported. Mining and smelting was 4.2; forest products was 25.6; general manufacturing was 19.1. Then we go down to per million man hours; mining and smelting has a better safety record than the forest products, general manufacturing and the construction and allied services.

MRS. P.J. JORDAN (North Okanagan): What was the government administration at that time?

HON. MR. NIMSICK: This is in 1973 I am talking about now. Mining and smelting in 1973.

MRS. JORDAN: What was your 1971 figure?

HON. MR. NIMSICK: The British Columbia mining industry has one of the best safety records in Canada. In order to bring about this, when I first took office, I changed the regulations to a great extent.

One of the factors that increased the accident rate in the mining field was open-pit mining. There were more accidents with trucks than any other item on the mining field. I was up at the Kaiser Development when the young lad last year was killed. The truck ran over him. We immediately instituted the plan of having a dump supervisor so he would be in charge of the dumps. Since that time, things have been progressing very well.

We asked for greater co-operation between the employers, the employees and the inspectors. Under the previous government, the inspector would go into a mine and he would take with him a representative of the mine management but not a representative of the employees' safety group.

I changed that so it would break down the suspicion that was built up between the employees and the employers. It didn't matter how you cut the cake; if the inspector went in there and only took a member of the safety committee then the mine management would probably be suspicious. So you can't blame the worker for being suspicious when he only took the mine manager along.

We have had that co-operation. The inspectors are doing a very fine job throughout the province; management and the employees have co-operated to the fullest in this regard. Look at the fatal accident record: in 1970, there were 13; in 1971, there were 11; in 1972, there were 18; in 1973, it is down to seven, and two of those are outside exploration.

So the safety record is definitely improving. We have given the miners some status by instituting the certification of miners, something I had advocated in this House for many years. I finally had to get on this side of the House before we were finally able to institute the certification of miners. Mining is a very difficult job; it is a hazardous job; but it is mighty important. In some countries a miner has a higher status than many other jobs that are easier. I think this is nothing but right; this is something that is necessary.

The depletion of this natural resource, we must not forget, is not labour-intensive any more, in spite of the fact that we mined a half a billion dollars' worth of copper last year and in spite of the amount of mining we have done. In 1928, there were 8,835 employees in the mining industry; in 1973, there were 9,616; in 1952, 13,730, That year we had values of $148 million. In 1970, we had 15,360 employees and we produced $310 million; in 1972, 14,584 and $372 million; in 1973, it was down to 14,500 and we just about topped $1 billion. So you can see it is not labour-intensive.

MR. W.R. BENNETT (Leader of the Opposition): The prices are going up.

HON. MR. NIMSICK: Even taking that into consideration. Take that into consideration as well. Each individual has got to deplete more of that natural resource every year in order to have a job....

[ Page 2505 ]

MR. BENNETT: What's the tonnage?

HON. MR. NIMSICK: One of our problems is that for every ton of ore we deplete, we must get out of that as much employment and as much benefit to the people as we possibly can.

I have been after the industry for quite some time in regard to processing, especially our copper ores, in the Province of British Columbia rather than shipping them all to some other country. The companies have been together from time to time to discuss a copper smelter, but nothing really has come out of it in any definite way. For that reason, we have now decided that we must investigate the possibility of a task force ourselves.

MR. SMITH: Another task force, another commission.

HON. MR. NIMSICK: We set up a task force in order to....

MRS. JORDAN: He's already having trouble with the task force — he can't find it!

HON. MR. NIMSICK: We have set up this task force in order that the government can be prepared to go ahead if the industry is not willing to go ahead with the processing of ore in the Province of British Columbia. We have offered to participate, but the industry seems to be a little loath in this regard. I am announcing this copper task force today.

I would like to quote some of the reports. This isn't a report of the task force; this is the appointment of the task force. It is estimated that out of a total mining sales revenue of nearly $1 billion in 1973, copper sales accounted for more than half of that amount. By the end of the current year, the province will have witnessed a production of ore containing some 7.5 million pounds of copper since 1858. Approximately 10 per cent of that total, or nearly 750 million pounds of copper, are now produced each year at current production rates.

In 1938, the year of the highest metal mining employment prior to 1950, some 10,000 workers derived their livelihood in metal mining as a whole. In the same year, copper production amounted to 66 million pounds. In 1974, some 14,600 workers found employment in metal mining, including approximately 4,200 people engaged in exploration and development. By contrast, copper production will amount to more than 750 million pounds; hence, copper production alone increased 10 times since 1938 while provincial metal production employment experienced virtually no increase.

You can see the graph over the years: the amount of employment that has been given has hardly changed since 1938.

AN HON. MEMBER: Where did you get these figures?

HON. MR. NIMSICK: I will give you one of these afterwards if you like.

The entire volume of copper production is currently exported from the province. Taxation revenue from these operations, though substantial, has been offset by very heavy costs to the Government of British Columbia in the provision of infrastructure. The cost of highways, schools, medical facilities and social services has been enormous and goes further with the opening of each mine.

The real benefit from this copper production appears to be reaped in the places where copper concentrate is transformed into copper and copper products. While depleting this valuable resource at an increasing rate, British Columbia is effectively exporting jobs and services, thereby subsidizing the society in which smelting, refining, fabrication and marketing are carried out.

In order to ascertain the means and ways of increasing the direct benefits accruing from copper mining in this province the government has appointed a task force whose objectives have been defined as follows:

1. Development of strategy options with respect to provincial copper and byproducts development including production, smelting refinement, fabrication and marketing at all levels.

2. Coordination of liaison with other governments, departments, agencies and individuals.

3. Consolidation of current data and studies, including review of submissions to date. Identification of further study requirements and initiation, and supervision of specialized studies concerning the economic social and environmental impact of any strategy option.

I want to say, though, in making this announcement that this is a joint study with the Department of Industrial Development. The Minister of Industrial Development, Trade and Commerce (Hon. Mr. Lauk) has been discussing this question with me, and the task force is made up from both departments.

The copper task force is jointly sponsored by the Department of Industrial Development, Trade and Commerce and by the Department of Mines and Petroleum Resources. The group is made up of representatives of government, industry, labour and the university community.

My deputy, Johnny McMynn, will act as chairman of the task force, the remaining members being: W.M. Armstrong, Deputy President of the University of British Columbia and professor of metallurgy; J. DeWolfe, economist; L.C. Hempsall, Associate Deputy Minister of Industrial Development, Trade and Commerce; H. Horn, director of mineral revenue,

[ Page 2506 ]

Department of Mines and Petroleum Resources...

MRS. JORDAN: It's an incestuous team.

HON. MR. NIMSICK: ...H.L. Keenleyside, past Deputy Minister of Energy, Mines and Resources in Ottawa; C.E. Sawyer, management consultant; and E.T. Staley, past president of the B.C. Federation of Labour and general vice-president of the Canadian Labour Congress.

It is my hope that that task force, when they bring in their report, will either get the industry moving or else the province of British Columbia will have to...

MRS. JORDAN: You'll take it over — here comes the threat.

AN HON. MEMBER: Which way do you want to move?

HON. MR. NIMSICK: ...move towards processing these minerals within the....

MR. G.B. GARDOM (Vancouver–Point Grey): That's a takeover; that's a takeover right now.

HON. MR. NIMSICK: There's nothing to take over because there is no copper smelter at the present time. When you're talking about a takeover — that's not a takeover, that's doing something that private enterprise is failing to do. It is my opinion...

MRS. JORDAN: You're going to build your own Ocean Falls.

HON. MR. NIMSICK: ...that if private enterprise fails to do the things that are necessary for the benefit of the people of British Columbia, then the government must move into that breach and do the job.

MR. FRASER: The people will give you a pick and shovel.

HON. MR. NIMSICK: I've had a pick and shovel before, and I've used it too. I'm sure there are some people here who wouldn't know what a pick and shovel was.

MRS. JORDAN: Oh, a vicious attack.

HON. MR. NIMSICK: Now, Mr. Chairman, I'm going to leave it open for any questions. I'll try and answer everything that you put before me, but be careful that you don't transgress on the Chairman because I have not done so, so far.

MR. F.X. RICHTER (Boundary–Similkameen): I appreciate hearing the Minister here today. It is with a very heavy heart that I rise to rebut some of his statements. You know, somebody made a remark that I should put my hat over my heart — when you're lamenting a fact you usually remove your hat; it's like at a funeral.

I feel very badly in that the Minister of Mines was going to do such a great job with this department that I left, I thought, in good hands. Now it's headed up under the Department of Lands, Forests and Water Resources, so the Minister has actually become a puppet or subservient to the Minister of Resources. And if you don't believe that, look at the top of your estimates — it states quite clearly, Lands, Forests and Water Resources. So the Minister is really not a Minister of the department, he is a figurehead or titular head of what was the Department of Mines and Petroleum Resources.

He has stated quite clearly that he didn't need an executive assistant, no, because the executive assistant is already established down on the first floor in the Department of Lands, Forests and Water Resources. There's a number of executive assistants there, so he really doesn't need one over across in the Douglas Building.

MR. BENNETT: He's just collecting the cheques.

MR. RICHTER: The Minister has made a very, very serious reflection on the departmental advisers — that they gave such poor advice previously to the former Minister, and that the policies that were....

HON. MR. NIMSICK: They had a poor Minister, that was why.

MR. RICHTER: Of course, that's your opinion probably, and I have an opinion too; I'm not going to mention it right at the moment.

The advisers of that department are very conscientious people; they have done a good job, and I still think if you would take their advice you'd do a much better job than you are doing at the present time. But you had to import an adviser who has no background in the mining field whatsoever and, of course, it hasn't enhanced the operation of your department one little bit.

The reason we haven't got a copper smelter in the Province of British Columbia is because there were two on line to come into production when I was Minister, but the NDP government cut them off at the pass. They just wouldn't let them operate. One was in the Minister's own constituency, the other one in the constituency of Cariboo.

The Minister can't be credited with all the production that has taken place in 1972-1973 because those mines came on line much before the present Minister was installed in that position.

[ Page 2507 ]

Further to that, the Minister hasn't opened a new mine since he's been in the position — some 18-odd months or more. So because the other mines were established, that doesn't prove that his administration has created this higher production.

As far as the revenue is concerned, we have had a vast increase in price in the metal market of the world; consequently, it's going to reflect in dollars and cents.

The amount of production, yes, it's come up for the simple reason that these new mines were just coming on line and hadn't got into their full productive capacity, but now they are. And I'm happy they're producing as they are. If they were not able to produce in the capacity that they are producing today, they would not be economic because many of them are working on ore bodies that were passed over in earlier years — when I say earlier years, I mean back in the early '30s and the '40s — for the simple reason that technology had not advanced to the stage where they could process this low-grade ore and get the benefit of that resource. That technology was not available because the necessary power, the necessary investment capital was not available to put them into production. Consequently, today we are mining ore that was heretofore undesirable. There are a number of them — Brenda Mines is a prime example. The ore body is very, very low grade and the policies of this government could kill that very operation along with a number of other marginal operators.

But now that the Minister has obtained this promotion to being subservient to the Minister of resources of the province, I harken back to the early stages of the Minister's appointment as Minister of Mines and Petroleum Resources in September of 1972.

Now, at that time, Mr. Minister, you made a statement, a very, very profound statement. The statement was this: "It is a complete new ball game for the mining industry in this province."

Mr. Minister, what a ball game. You haven't hit one ball yet. You've struck out on every occasion you've gone to bat. You haven't even made a run. When you hit the ball, you couldn't even get down to first base. Let me tell you, Mr. Minister, you've been a dismal failure as a ball player. I could even go further than that, but in deference to you, because of the years that you have served in the House, the years you have tried to represent your constituency, I'm going to spare you that embarrassment.

In the past, Mr. Minister, and presently, you have represented a constituency whose entire economy has been dependent on the mining industry — that is, the Kootenays — and more so since the electoral boundaries were moved, throwing the Fernie area into your constituency. You haven't made any marks there, not even black ones, because you have persecuted the mining industry on every corner that you have attempted to bring in a policy which would encourage a very, very risky business in this province, based on the very low-grade ore bodies we have to work with. We have no monopoly in this province as far as supplying metals for the world is concerned. Even if we took into consideration our highest producer, copper, it is an extremely small percentage of the world requirement.

I know the Minister realizes the importance of a healthy mining industry to the economy of the province because he has already mentioned today the number of jobs. He says it's not a job-intensive industry. I tell you, it's a highly technical requirement that's needed in the industry today to be able to survive with competition. The spin-off in service industries that are associated with the mining industry amounts to a very, very substantial number of positions to the economy of the province because every community has to have local services for the industry, and because of the nature of it, they have to have highly skilled people.

The present metal prices on the world market are very high, but that hasn't always been so. Only two years ago the return to the mining industry on the invested dollar was something in the neighbourhood of 0.04. It was slightly higher the following year, and last year was a good year. But if you take over the course of time, I can recall when we were getting 35 cents for copper at Copper Mountain. They felt that they could operate quite successfully on 38-cent copper. But surprisingly enough, they too closed down, and costs of mining at that time were not anywhere near in the category that they are today. Supplies were not that expensive. If we continue to follow the policies of the NDP government and this Minister of Mines, we're going to find a lot more mines closing down because they will simply not be able to compete worldwide.

The legislation that you have passed in the last session or two has had a very detrimental effect on the mining industry. It's jeopardized development and exploration. Mr. Minister, you said that we were depleting a non-renewable resource, and I grant you that. It is a non-renewable resource. But what are we doing about discovering the potentiality of the mineral resources of this province? Nothing.

It's slowed down to a slow walk, and it's only got one more thing to do, and that is stop. It can stop if we get any more policies such as you have enunciated, such as you have brought about by way of your legislative programme in the past. The future could also spell doom. I don't wish to see this industry killed completely — we need it. It's the second-highest revenue producer to this province, and could and would have been the highest revenue producer had the policies of this government not been pressured onto the industry as they have been.

[ Page 2508 ]

There has been a decline in revenue to all levels of government, and there will be, through the policy the Minister intends to enunciate. There has been a complete uncertainty. Just because you're coasting now on the impact that the previous government created, don't think for a minute that these ore bodies...because the Minister has said they're depletable, and I know some that will be depleted in 1975, and they have nothing to go on. Now you're going to lose revenue, if you're not producing and you're not discovering. Look at the rate of your mineral staking. It's gone from a good high level and has dropped in the last two years by better than 60 per cent, and will be going down further because there is nothing to encourage anybody to stake mineral claims today.

There's complete chaos in the financial field as far as....

Interjections.

MR. RICHTER: Well, I could say that the Attorney-General (Hon. Mr. Macdonald) needs to take a few lessons in mining or needs to come out; I'd like to take him out prospecting, particularly if he could get a grant to sort of pay our expenses.

MR. R.H. McCLELLAND (Langley): Give him the $4,000 and send him out into the field.

MR. RICHTER: Well, we're not supposed to talk about any new bills, Mr. Attorney-General, because the Minister told us that he was going to keep away from them, and I'm going to respect the rules of the House. But let me tell you, I can tiptoe through the tulips just as well as the Minister can or anybody else in this House. I don't know how I smell, though.

The investment funds, as I mentioned, are so frightened with what is happening with the policies of the Minister or, let me say, the tsar of resources policies in which the titular head of the Department of Mines and Petroleum Resources carries out. They're so frightened as far as the investment dollars are concerned that the whole prospectus of the industry is in complete chaos. Interests in all levels of society and the industry — prospectors, large and small placer miners, hard rock mining, engineers in all the fields, along with the supply industry — have shown by way of representation to the Minister what effect this is having on their industry, what effect it was having on their jobs. The layoffs are coming today, not tomorrow. They're here today, because the work is not there. There have been very extensive cutbacks on exploration for this year, exploration programmes. This is going to continue — there's no question about it — as long as we have the policies that are presently being enforced on the mineral industry.

I wonder what the Member for Rossland-Trail (Mr. D'Arcy) will have to say to the people who work on the hill and the shopkeepers in Rossland, Trail and Castlegar, when he goes home after we find many new programmes and policies brought into effect as we progressively work toward the end of this legislative session. When we have prorogation, I'm sure everybody is going to waltz off to their own constituencies to report. I just wonder what the Member for Rossland-Trail is going to have to report. I wonder what the Member for Kootenay (Hon. Mr. Nimsick) will tell the people in Kimberley when it turns out that he's killed the goose that lays the golden egg.

I suppose the mining industry will have a real big day, a celebration, when the Minister comes in town. All the miners will come out of the old Sullivan mine, you know, and really celebrate the fact that they're going to be done out of their jobs, or they're going to find that they're going to have to move to other provinces to try and find work.

Mr. Minister, this is a sorry, sorry day for the mining industry in British Columbia. Surely the present Minister can't be the author of these policies that are being implemented by the government. I wonder if the real Minister, if he were here, would please stand up.

AN HON. MEMBER: He's not here.

MR. RICHTER: I just wonder, because the present Minister of Mines as I know him is not that type of a man. He has worked in the past with the largest mining company in Canada. He got his start there with a pick and shovel or something of this nature, but he did handle nuts and bolts, I know, in the stores. He's had a full career in the mining industry. How in the name of common sense he could promulgate such policies is more than I can understand, and I think they're more than he can understand.

MR. PHILLIPS: I think he's got a loose screw.

MR. RICHTER: It's deplorable; it's depressing. What's the government going to do on their northern policy development in this vast territory up in the Omineca mining district? What are they going to do in relation to the programmes that they had so hopefully worked toward getting underway through new access roads and so on, when we find that they're going to be suppressed to the point that they'll wonder whether it's worthwhile going ahead? There are a lot of little people who have invested their dollars and cents in shares of developing mining companies, hoping that the mine will get into production and they'll get a return or a dividend on their investment. There's no chance whatsoever for

[ Page 2509 ]

these people. There's no hope as long as we have the situation as it is today.

What is the intention of the socialist government in respect to future mining in the province? When will you fully implement your philosophy and take over the mineral industry and the petroleum industry in British Columbia? You know, Mr. Minister, it's so very, very obvious that the resources of this province are going to be controlled completely as to production, as to exploration. Every phase of our resource industry is headed for state control. The Minister knows that because he's been told by the tsar of the natural resources of this province — the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams).

AN HON. MEMBER: It's a direct statement of government policy.

MR. RICHTER: What are the 14,500 employees that were on the payroll in 1972 going to do in that case? Well, it's very obvious they will be subsidizing the government revenues so that the government can pass it back to them in wages and say: "Well, look what a good fellow am I." It reminds me of Tom Thumb and the plum. What is going to happen with the additional people in the service industries? Undoubtedly they will be under another programme that this government has instituted whereby they have set up the service industries — Icky-Bicky, you know, Mr. Minister, all about it. That's what you'll have to do — you'll have to set up the service industries. But it will be all right. You'll set up the service industries because you've got lots of political heelers who you can put into these positions.

That won't help the mining industry one bit because you can't show me in any case where a resource industry has been nationalized that they have been able to operate economically. You can't show me one case — Sweden, South America.... You know what happened to Anaconda. Your Deputy Minister knows. You know what happened to Imperial Oil, and what's happening to them down in South America now. Are we going to be a banana republic like our Premier likes to expound on? Nobody wants a banana republic in British Columbia. Sure, we're the banana belt, but we don't need a republic. We have resources. With mining resource in itself we are blessed with a very, very vast fortune there, but as long as you don't explore, develop and bring into production as you require these things, sustain the flow of revenue in the interest of society, then you're going to come to a vacuum, and that vacuum will be the day when — what have you got now, 29 mines operating? — when you see that fall. Even if it falls by half you can be assured that your revenue is going to fall by half unless, of course, you bring in other policies in which you extract beyond the ability to pay from the mining companies.

In the end you'll have to put them under state ownership. You'll have to put them under state ownership. You'll have to operate them. You'll be back, Mr. Minister, as a mine foreman. You never did obtain that stage before, but there's no reason with the years of experience now.... You might make a fairly good mine foreman — or a straw boss, anyway.

MR. PHILLIPS: He'd probably botch up that job too.

MR. RICHTER: The amount of taxation that the mining companies pay is a point on which the public are not fully apprised. Let us be current. In 1973, through the B.C. mining tax, the property and school taxes, social services tax, corporation income, portion of the employee income tax, gas, fuel and oil tax, royalties where they applied, Crown grant payments, lease rentals et cetera, coal licences and various other charges such as the Workmen's Compensation Board, this province took in almost $71 million. The municipalities in that year took in over $5 million from taxes and these charges. The Government of Canada took in over $58.5, million and the total was $134.5 million in revenues. Now, the mining companies don't mind paying taxes. They are corporate citizens, and they want to pay.

MR. CHAIRMAN: Order please! I would just caution the Hon. Member that he's almost stepping on a tulip, and I would ask him to be careful with his remarks. We're dealing with Bill 31.

MR. RICHTER: At this stage of the season the tulips are pretty well done, and really you should step on them a little bit just to push the bulbs a little deeper. It's better for rooting next year. I used to be in agriculture at one time, and I used to grow tulip bulbs by the thousands. They're an interesting study. Sometime you should study them. I would suggest any time now would be a good occasion.

The very fact that mining does, through its various contributions to the province, contribute a very great deal, and they were not above contributing more on the ability to pay. Your own report, Mr. Minister, indicates quite clearly what the revenues of the province are from the mining industry, and they're very sizeable.

Some mining companies back in 1972, because they had certain federal tax concessions, were cut off at the provincial level, but they did have incentives, and they paid taxes. One particular one paid taxes of $3.75 million. In 1975 this will amount to some $14.5 million, and I'm not talking in terms either of what pending legislation may reflect in that way. But let me tell you, Mr. Minister, when I talked about killing the goose that laid the golden egg, the people you will really have to explain

[ Page 2510 ]

this to will be your own constituents. I mentioned earlier the very fact that in 1971 the return to the shareholders was very low — 0.4 per cent loss. That's not 0.4 per cent on their investment, but it's a loss....

AN HON. MEMBER: He wouldn't understand that.

MR. RICHTER: In '72 they only receive about 1.7 per cent. Now, if you're, going to encourage investment capital, whether it's the pensioner who wants to build up an equity for future living accommodations, what he wants to do in the future, if he wants to sustain his standard of living.... Certainly it's not the mining field that you want to put it in, is it, Mr. Minister? I'll bet you, Mr. Minister, you don't own one mining share.

HON. MR. NIMSICK: I hope not.

MR. RICHTER: No, because section 5 of the mining Act....

HON. MR. NIMSICK: I shouldn't be here if I did.

AN HON. MEMBER: You shouldn't be here anyway.

MR. RICHTER: No, I would agree with you. So, Mr. Minister, I don't feel envious of you in the position you have put yourself in and your colleague has put you in, relegating you to your secondary position. I don't appreciate this because I think the mining industry needs more than this. I think they're entitled to more than this. I can't for one minute feel that you are really encouraging this industry, building it up to what it should have been by this time, because the incentive for development, for improving has dissipated to nothing, the mines that are at the point of no return must go on, and they will go on because they are committed. I don't look for a happy future or an encouraging future for the mining industry of British Columbia.

Interjection.

MR. RICHTER: Yes, that is about the attitude the Attorney-General (Hon. Mr. Macdonald) would take. The whole story on Lornex has not been revealed in that the fact that they did have certain federal tax concessions has placed them in a relatively good position in this financial report. Mr. Attorney-General, Lornex isn't all that high grade. Their next report and the one after that, before you go to the general election, will be something to open your eyes. Please, Mr. Attorney-General, don't invest in that company for the simple reason you have said that they are too well off now. So you can expect to lay the wood to them because that can be expected from the government on the other side of the House.

HON. MR. NIMSICK: I'd just like to reply to the lead speaker of the opposition in regard to the mining industry. He seems to think that we're in an awful panic to get rid of our resources as quickly as possible. The day of depleting these non-replenishable resources for profits and profits alone is over. We're going to deplete this resource for the needs of the people, not only of this generation but of the next, and you should have some consideration in that regard.

I have been in this House for a good many years. I was a speaker on behalf of the Mines department from the opposition side, and for years I advocated the very things that I have brought into force today. If a person is doing nothing, as has been done in the past, you'll get no criticism. But if you're doing something, that's the only way to get criticism. The day of the incentive such as the federal government gave — the three-year tax-free period — is finished this year. But when you say to an industry that if you can get all that ore out of there in three years and you don't have to pay the people anything for it, that is wrong. And the federal government has realized that. Now they are changing that story, because according to the statistics that we have got, by the year 2000 we won't have enough copper and lead and zinc, and we'll be going hungry at that time with all the reserves that we've got today, at the present time. So don't try and tell me that we should be producing millions of tons more at the present time just so that we can get rid of it as quickly as we can. The minerals in the ground are really like money in the bank, not only for this generation but the next generation as well.

AN HON. MEMBER: You've got to find them first.

HON. MR. NIMSICK: They're never lost; they're always there. That's one of the ideas that some people have got — that they must be found.

When you talk about how much the companies have paid in taxes and that, I'd like you to figure out the percentage of your income you pay in taxes as well, and then you'll find out that we all pay taxes. One of the questions, when we talk about depletion, is our oil and gas situation today. When they tell us that 15 years down the road we're going to be out of oil and gas, it's just a little bit scary, I'd say, because it's very bad to think that we're going to be out of oil and gas in not too long a time. Don't ever think that it's unlimited, because once it comes out, it's gone forever.

You talk about finding more copper resources.

[ Page 2511 ]

Right now in British Columbia we've got two and a half times the reserves of those in operation, of what we're producing. We've got quite a bit of reserves. You talk about exploration going down, but in 1972, it was $31.3 million, and in 1973, with only 79 per cent of the returns in, it's $24.7 million.

MR. PHILLIPS: Down!

HON. MR. NIMSICK: Yes, but there are only 79 per cent of the returns in. In 1972 we had 1,030 reports; today, so far, we've got 908 reports in. So the actual exploration will not be down in 1973.

When you make high capital investment.... You talked about a few years ago when there were low returns. The companies at that time made very high capital investments. When you make high capital investment, your returns are bound to be down to the shareholder. When you talk about mining experience, I cut my teeth on mining in the Province of British Columbia. I was in a town where they depleted the mines. I was born in a town where the mines were depleted. We built the City of Spokane on the revenues from the mines at Rossland. That's what happened there, and I don't intend to do that in the Province of British Columbia for the future.

The mining association forecast in 1970 a steady decrease in capital expenditure up until 1975. At that time they were making this prediction according to the records that are available. When he talked about two copper smelters being on deck when he left office, the copper smelters in Kimberley at that time you were going to subsidize by $2.5 million. We said that we didn't see why the taxpayers of British Columbia should subsidize a mining company that was as rich as Cominco, to the tune of $2.5 million. We offered to participate in the smelter in Kimberley at that time. And Brenda and the other mining companies today — when you look at the papers, don't worry too much. I wouldn't shed any tears for them because I'm sure that they're going to do all right.

Copper Mountain, you said, was operating at 38 cents. It made profit at 11 cents a pound at one time. Copper Mountain at that time was finally depleted.

You state mining will stop. That is a terrible statement to make, to my mind, in a province such as British Columbia, that when the people of B.C. want a fair share of the resources we're going to deplete them.

But we're going to manage the resource, as I said before, on behalf of the people of British Columbia and on behalf of the future generations as well. And those are no mean words at all. I mean that, and I'm sure the previous Minister should know that this should be the situation, rather than to come out and try to state that this department is a secondary department.

This is a top department, but it only became a top department since the New Democratic Party got into power. Previously they were only operating from the direction of the industry. Let me tell you, we have fine men in our department. The people who are in my department are very fine men. Sure, we're on a different philosophy than that which you have been on. And they're operating under that philosophy, not your philosophy.

MR. G.F. GIBSON (North Vancouver — Capilano): I have a few differences with the Minister. I agree with him that this is one of the most important departments in government because it deals with the second most important industry in British Columbia, unquestionably.

Yet at the same time, Mr. Minister, I wish that your department seemed more important in financial terms. The forestry service alone, which is perhaps our most important industry — perhaps three times as large as the mining industry — manages to spend 15 times as much in the service of that industry as your department does.

So I don't blame you for that; I blame the Treasury Board, the people who are parceling out the money. I'll support you any time in saying: "Let's have more money for the Department of Mines to help the mining industry." I just wanted to put that little plug in for you first of all.

Now after that I want to react a little bit to your announcement about a copper task force. Mr. Minister, it's disgraceful that we don't have a copper smelter, a building in British Columbia right now, when your government has been in power for 18 months. I thought you were a government that got things done. But what you've done has been to scare off the industry that was very interested in building a copper smelter in this province.

HON. G.R. LEA (Minister of Highways): As long as the people paid for it.

MR. GIBSON: Letters to this government by the industry asking for co-operation and discussions on building a copper smelter in the Highland Valley and elsewhere in this province went unanswered, and still are unanswered. What kind of co-operation between the government and the industry is that?

Where are the pollution control regulations for a copper smelter, Mr. Minister? How can you properly design a copper smelter without the pollution control regulations that would relate to it? Why doesn't your government produce that? Maybe that had better be one of the first things that your copper task force looks into.

The fact of the matter is that your government has been standing in the way of getting a copper smelter

[ Page 2512 ]

put together in this province — and the jobs that it would create. And it has been in no little consequence the application of New Democratic Party dogma that has led to this. It's the same old game of making a vacuum and then saying: "Well, private enterprise hasn't produced, so we have to rush in and fill this vacuum."

Mr. Minister, is there going to be a representative of the mining industry on your copper task force? Or are they going to be working with the mining industry? Are they going to hold public hearings? I hope they are going to hold public hearings. There are a lot of people who have views on this. Not just the industry, not just the people who work in it, but many people around the province have views about how and where a copper smelter should be, what the pollution control factor should be, and so on.

Mr. Minister, I hope you'll tell us later on that this copper task force will hold public hearings and that they'll get off the mark pretty quickly, because we're sending too much copper out of this province untreated. As I say, it's just a disgrace that plans aren't further along at this point. To have to announce a task force is about the ultimate in political bankruptcy at this stage.

Now the Minister spoke a good deal about safety, and safety is very important. But what he didn't talk about very much is the preservation of all of the jobs in the industry. He said 1973 was a wonderful year. Mr. Chairman, there was a remarkable achievement by the Minister in 1973. I hope it never happens again. It was a miracle that the Minister produced in 1973.

In the midst of the highest prices and the highest profits that the mining industry has ever seen — which happened in 1973 — in the midst of those buoyant and bountiful conditions, he's managed to strike gloom and despair into those who would do something about building the future of the mining industry in British Columbia. I'm going to give him some indicators about that in a few minutes.

First of all, let's talk about profits because, you know, Mr. Chairman, there are those on the other side of the House who think that profits are indecent — a bad thing. I'm glad to see the Minister shaking his head, Mr. Chairman. I'm glad the Minister of Mines doesn't believe that, but a lot of his colleagues do.

You remember the NDP newsletter that had the big headline about how many hundreds of millions of dollars of profits there were in 1973; there was something wrong with that. Profits aren't a bad thing. The Minister agrees with that; that's wonderful.

So let's not hear any more snipes from the Attorney-General about the profits of various mining companies. Let's instead look at it sensibly. Let's say: how do we best get a share of those profits for the citizens of British Columbia? Surely that has to be the question, rather than sniping at profits. I want to quote what Mr. J.L. McPherson, president of the Canadian Institute of Chartered Accountants, said last week. He said:

"Profits is not a dirty word. It's a word that spells activity, jobs, opportunity, social systems to care for the handicapped, the sick and the underprivileged. Governments must join business to explain the situation instead of criticizing business and threatening the stability of the country.

"A profit, however large, is not satisfactory and never will be if it is less than the return that business could have got in a risk-free investment such as government bonds. A company making a percentage rate of return that is less than the risk-free rate of return is in fact making a loss and not a profit at all."

So let's examine profits in that light. What has been the overall profit of this industry over the years? The Investment Dealers Association of Canada made an excellent submission to the government of a bill — which I don't propose to talk about, because we can't under the rules at this time. But they did, in that submission, give figures for the rate of return of the British Columbia mining industry for the last six years, 1973 not then being available, and the figures were as follows:

Rate of return in 1967 — 17.8 per cent; 1968 — 11.8 per cent; 1969 — 16.2 per cent; 1970 — 8.5 per cent; 1971 — minus 1.1 per cent; 1972 — 1.7 per cent. They have 1973 down as not available.

I'm going to guess, Mr. Minister — in 1973 — I'm going to guess that the rate of return on equity in 1973 was an all-time record, something between 20 and 25 per cent; that's just a guess. That would make the seven-year average rate of return of the mining industry around 11 per cent. Canada Savings Bonds are now yielding about 7.5 per cent.

I want to ask the Minister and ask this House and ask the people of British Columbia if that extra premium of 3.5 per cent is an adequate return for the investor in the mining industry for the risk he takes. Because there are a lot of risks, as the Minister knows full well — a great many risks.

Mining is a difficult business because it starts out with the fundamental difficulty that you can't see underground. That's the basic problem of mining. A lot of people think there are just diamonds lying around waiting to be picked up. That's what they think when they say the mining companies are ripping off the people. But there are not diamonds lying around to be picked up. It's all down there somewhere under the ground, and you don't know where it is.

You start off with rock, and then people go out and look at that rock, and 99 per cent of the time they're wrong; maybe 99.9 per cent of the time they're wrong. Perhaps 999 out of 1,000 of those

[ Page 2513 ]

risks don't work out, don't find a mine. The Minister knows that. That's a big risk. That's the risk of the little man. That's the risk of the prospector. That's a big, big risk.

The second risk comes at the stage of the developer, and the third risk comes at the stage of the producer. I'll go into that later on. But the fundamental point I'm trying to make is that it's an industry of high risk, and that risk has to be rewarded.

Otherwise, the people who would take that risk would take their activity elsewhere. The prospector can take his activity elsewhere and work for a secure living. The investor can take his money elsewhere and put it in Canada Savings Bonds or in second mortgages yielding a good deal more than the average rate of return in the mining industry by a long shot — and a lot safer.

How do we find the evidence that this industry that looks on the surface so healthy, so prosperous — perhaps $250 million worth of profits in 1973 (and I am guessing; the figures aren't out yet. but they are educated guesses) — can in fact be in such ghastly shape? How can we tell that?

We can tell it in several ways. We can look at what is happening in claim-staking. In 1973, claim-staking was down roughly 60 per cent — a 60 per cent decline in claim-staking. That was just in 1973; that was before the infamous Bill 31 was introduced. That was just under the terror of the Mineral Land Tax Act which I will get to in a little bit. That was just beginning nervousness, not nearly the nervousness in 1974. I have some figures on that too.

Another way we can tell it, Mr. Minister, is the decline in claims in good standing. The usual figure of claims in B.C. in good standing throughout the early part of the '70s, I am told — and I would much appreciate the Minister's advice on this because I find it very hard to get hard figures on this — has been around 250,000. I am told the number of claims in good standing as of the end of March 1974 was on the order of 135,000.

There is a drop in claims in good standing of — I will do the arithmetic quickly in my head — something like 40 per cent. In other words, people don't even think it is worthwhile hanging on to those claims anymore. What is going on here, Mr. Minister? That is an indication of serious ill health.

We have a statement of the B.C. and Yukon Chamber of Mines, which is certainly one of the more representative bodies of the British Columbia mining people. It doesn't represent the big companies; the Mining Association of British Columbia represents them. It doesn't represent the unions in particular, though many unionists are members of it. It represents more the prospectors, the supply companies and so on. I think the Minister would agree with that.

Here is what the British Columbia and Yukon Chamber of Mines said about exploration:

"A recent survey of exploration budgets for British Columbia conducted by the chamber in 1974 indicates that, since the Mineral Royalties Act was introduced, intended exploration expenditures have been reduced to $14.5 million from $29 million.

"It is important to observe that only $26.5 million was expended on exploration in the province in 1973 after Bill 44 when provisions for the discretionary granting of production leases was introduced. When this matter was satisfactorily resolved by amendment of the Mineral Act in the fall session and the government announced the postponement of royalty legislation, the industry felt it could place greater trust in the government."

What a mistake they made, Mr. Chairman.

"The industry actually intended to spend $2.5 million more in 1974 than it had in 1973."

The accompanying chart goes down, straight down. They go on to say:

"Forecast exploration expenditures in 1974 are the lowest in a decade. 1975 will witness a further decline unless confidence is restored and as 1974 expenditures largely represent continuation and completion of earlier commitments for property work."

In other words, it is not new work being done now; it is just the unavoidable follow — on for certain special situations.

"No new mine construction prospects have commenced since 1971. Several companies have been forced to postpone mine development and production plans as a result of previous statements by the government until such time as promised tax legislation was introduced."

Mr. Chairman, that is a sad commentary on the health of the industry. Those 1973 profits are not going to continue. The Minister knows why those 1973 profits were there: it was the price of copper. To some extent the price of silver was very helpful; the price of gold has been helpful. But copper is the big one. Copper is more than half of our mineral production in British Columbia: over $500 million worth and 750 million pounds. The price of copper in the world in 1973 was at an all-time record high. It is still up there in the clouds, but we can be reasonably certain it is going to come down.

I have here a chart showing the price of copper; the London Metal Exchange wire bar price, the settlement basis from 1948 through the beginning of 1974. It looks like the mountains of the moon; it is up and down. That is what the price of copper is like. That is why it has been the hope of mining companies in the past that, in good years, they could recover

[ Page 2514 ]

their investment and make a bit of a profit. In bad years, they would hang on. I can quote exact figures of these prices over the years, but I don't know that it would be helpful; the principle is there. The principle is that 1973 was a very rare year, and it would be very unwise to predicate treatment of the industry on the basis of 1973 conditions continuing on into the future. Very unwise indeed, because we are just not going to be that lucky.

So I hope I have made the point to this stage. Profits have a place. We should seek to get more out of those profits for the public well-being, particularly in exceptional years such as 1973. We should leave the investor enough for a fair rate of return. Finally, the mining industry is tremendously sick right now, in spite of its apparent robust complexion.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): The whole world has rejected them.

MR. GIBSON: The Member for Vancouver–Little Mountain says the whole world has rejected them. By them, he means the copper companies, I presume.

MR. PHILLIPS: He's the big man from Little Mountain.

MR. GIBSON: I am going to tell the Hon. Member, Mr. Chairman, a little about copper conditions in the rest of the world, and of other metals too. I can assure him right now that they haven't rejected this business in the rest of the world. British Columbia is pretty unique in this circumstance.

Many of the Members, I think, on the government side have a feeling that it is almost wrong to take minerals out of the ground and do something with them. It is better to leave them in the ground.

AN HON. MEMBER: It is better to leave them in the ground than to give them away!

MR. GIBSON: "It is better to leave them in the ground than to give them away," says a Member. Of course; but who is giving them away? Nobody is giving them away. We are getting top dollar. We are getting well over a dollar for our copper now, Mr. Member. The Member doesn't understand very well.

There are a lot of people who honestly believe we are consuming the resources of the earth too quickly — and that includes minerals. When you have that point of view, it is not difficult to come to the conclusion that anything that slows down the extraction of minerals is necessarily a good thing. There are people who feel that way.

Well, there are some difficulties with that philosophy, and I am going to speak that philosophy because I do think it is fundamental to some of the people on the government side.

The first difficulty is that minerals play a very direct role in our standard of living. If you want to try an interesting exercise, think of your daily activity. Think of what minerals have to do with it: reading a book that was printed on a press, watching a television set that is full of metals; travelling, whether in public transit or in your own automobile; eating the food that has been cultivated and transported by metallic goods; putting on your clothes; closing your door at night. Think of the chain of metal products and metal inputs that have led to all of that.

Some people say we don't need all of these things. Let's rule out some of them. Maybe let's rule out private transportation in a car; that's bad, that uses a lot of metal. Hon. Members, let's say we were willing to rule out so much of the use of metal in our lives that we would cut it by 50 per cent. I tell you, most people wouldn't agree with that; they'd think they were suffering pretty badly. But suppose we tried that.

What you would find is that still wouldn't help us because maybe a very large percentage of the metal now used in the world is used in North America only. We have to consider bringing the rest of the world up to the North American standard of living, and that's going to take a tremendous amount of metal. So any way you look at it there's a very good reason for taking it out of the ground.

British Columbia has a contribution to make to the world in terms of our metal. Coming back to that Member who said "Don't give it away," certainly, don't give it away. Get a good price for it, but also do the right thing, because that metal can't do any good to anybody in this world as long as it's underground. You have to take it out.

Let me tell the Members another interesting thing that many don't realize. They seem to have the idea that because it's a non-renewable resource it's a disappearing resource. It's not a disappearing resource. It's used over and over; 40 per cent of the copper that is ever taken out of the ground is reused at least once and 60 per cent of the lead is reused at least once.

There are even ways being sought of reusing the lead in gasoline through capturing it from the so-called catalytic converters. And that metal can't do any good until it's out of the ground.

Now, Mr. Minister, through you, Mr. Chairman, the contribution of the mining industry to this province is so tremendous that I wish you had made more of a point of it in your remarks. The revenues are only part of the picture, but in 1973 the revenues were either $935 million, depending on whether you go with the mining association figures, or $899 million, if you go with your departmental figures. I'm excluding fuels here from the production, which total

[ Page 2515 ]

around $105 million; but it does include coal.

This was up from $420 million in 1971 and $530 million in 1972, and represented an increase of about five times in the last decade. That's a superb growth industry and one that we should be very proud of here in British Columbia.

What were the wages and employment? The latest figures I've been able to get refer back to 1972. We do have an employment figure for 1973 of roughly 15,000 in direct employment. But as for the actual wages and so on, in 1972 they were around $190 million, or around 35 per cent of revenue. And that's just direct employment. Direct employment, as I said was around 15,000, around 2 per cent of the labour force; but, Mr. Minister, it was paying 3 per cent of the wages. It's a well-paid industry. It's going to be better and better paid if it follows along in the wake of the 40 per cent Craigmount settlement. It's a very well-paid industry.

But in that same year of 1972 the industry paid out $365 million for goods and services, mostly within this province. In addition to that, as referred to by the former speaker, taxes were paid at all levels, federal and provincial, taxes benefiting this province directly by some $93 million.

HON. MR. NIMSICK: You're using a lot of your ammunition for Bill 31.

AN HON. MEMBER: He'll use it again, recycled.

MR. GIBSON: These things, like minerals, can be recycled, Mr. Minister. The transportation expenditures of the industry — and this is important because the Minister said it's not labour-intensive....

AN HON. MEMBER: Don't worry about that.

MR. GIBSON: The transportation expenditures of the industry in 1972 were $64 million. That pays wages on the trains and on the trucks that haul these minerals.

In addition to that direct employment there were at least two jobs, a little over two jobs, for every person directly employed. The Price Waterhouse study that's generally done by the industry each year calculated that 34,000 additional persons were indirectly related to mines.

I personally think it's a lot more that that. A lot more people than that pretty directly depend for their livelihood on mines, Mr. Minister, because it's a basic industry. If you take that away, everybody who cuts hair, draws legal documents and all of these other things won't be supported by that basic industry.

The industry has benefits of other kinds. The Minister is very concerned about northern development. I know his whole party is. His reliance, I would suspect, for the development of the northwestern corner of British Columbia depends on mines, particularly on the Stikine mine and on the Silver Standard mine, with a possible addition of the Groundhog coal deposit as an energy source, and with the BCR tying it all together in a transportation sense.

That's just an example of the kind of regional development that mines have brought to this province. The mining industry in this province provides us our balance of payments, because everything that we bring into British Columbia from abroad, whether elsewhere in Canada or overseas or the United States, has to be paid for by something that we ship out of this province. The mining industry provides, I would say, about 25 per cent of our balance of payments.

Mr. Minister, one thing I'm glad to see, and I hope you'll take measures to further it along, is that Canadian control in the mining industry has been improving over the years. It is now some 68 per cent in 1972, which was up substantially from 58.5 per cent in 1971. Again I don't have the 1973 figures yet, but the trend has been good.

It has been gratifying to see the trend of head offices coming to British Columbia like Cominco and Teck. Things had seemed to be going pretty well.

We have here a tremendously important industry that is unwell in this province, and we have to wonder what to do about it. We have to wonder in particular because of this critical aspect of exploration.

I want to quote something that Mr. Charles Elliot of the Mining Association of Canada had to say about exploration. In a speech in Vancouver he said:

"Clearly we have failed to communicate the absolute, the essential, role of exploration function in our industry. Exploration is mining's future. No government should permit itself to be lulled into believing that because mines continue to operate — yes, with today's prices, even thrive — that the industry is not seriously affected by progressively heavier tax burdens. Exploration is based on incentive, and when you remove or diminish substantially this element in the mining equation, stagnation sets in.

"Mines already in operation will continue so long as any recovery of invested capital is possible, thus creating an illusion of continuing production prosperity. But there will be a day of reckoning. If taxes and regulations under which the mining industry must operate, either in this province or anywhere else for that matter, become too onerous and burdensome, exploration activity will dry up and the industry will die with the inevitable exhaustion of known ore bodies."

[ Page 2516 ]

Talking about the exhaustion of known ore bodies, talking about leaving it in the ground, I want to tell the Members of this House something about the availability of minerals in this world. I'm just going to take one example, and that's copper.

We produce in British Columbia around 5 per cent of the world's copper at the moment. The world consumes 8 million tons of copper a year. Now we have no monopoly of copper in this world. British Columbia doesn't have all of the copper in Canada, and Canada as a whole has only about 8 per cent of the world's copper — known reserves.

If you look around the Pacific Ocean around the so-called "ring of fire" extending up through Alaska and down through Japan and New Guinea, the Philippines, across the ocean again to Chile and up the other side, you find all through that area examples of the tremendous porphyry copper deposits that we are fortunate enough to have here in British Columbia.

The difference is that our ore here in British Columbia is a lower grade than any of the rest of it. It's a lower grade than any of the rest of it. And it has come to be exploited only by the putting together of a most remarkable group of technologists, people who have been able to supply capital, people who have been able to design the right kind of equipment — geological consultants, the mining engineers, who have found ways to treat that low-grade ore well.

Let's suppose now that we say: "Oh, no! We think that you should leave a lot of that ore in the ground." What's going to happen? The people who have to find copper are going to go to other parts of the world — around the Pacific, down to the Philippines where deposits currently being exploited are 4 per cent instead of 0.4 per cent, and into New Guinea. Chile may be unstable, but they'll move up to another country. They're going to find that copper. In the longer run, Mr. Chairman, let me tell you something else. On the floor of the Pacific Ocean are these strange things called nodules.

AN HON. MEMBER: They're not strange. They've been there a long time.

MR. GIBSON: They're strange to me, Mr. Minister. I find it hard to visualize these enormous lumps lying down there. But in any event, these nodules have a copper grade, interestingly enough, of 0.53 per cent.

AN HON. MEMBER: Those are old anchors.

MR. GIBSON: No, the old anchors are particularly valuable. They're hard to find way out in the middle.

The technology's being developed now to mine those nodules. As I say, their copper grade is higher than the grade of copper that's being mined in much of British Columbia today. Mr. Chairman, at current rates of world consumption, just in those nodules lying on the floor of the Pacific Ocean, there's a 1,000-year supply of copper of a higher grade than we have here in British Columbia, that will be mineable more cheaply once the technology is developed.

HON. MR. NIMSICK: A thousand years? Whose statement is that? Where did you get that?

MR. GIBSON: Where did I get what, Mr. Minister?

HON. MR. NIMSICK: This thing.

MR. GIBSON: I got that from Professor Evans.

HON. MR. NIMSICK: Oh, no wonder. (Laughter.)

MR. GIBSON: I'll give you another statement.

HON. D.G. COCKE (Minister of Health): How can you make a statement like "once the technology has been developed"? It's not developed.

MR. GIBSON: Mr. Minister, I didn't know you'd be interested, through you, Mr. Chairman. I didn't know you'd be interested in that because I have some data along here about the development of that technology. There's some $300 million being spent in the United States this year to develop it by groups such as Lougheed, groups such as the Hughes Tool Company, other groups which are developing this technology on a very current basis. I would suggest that it will be here in five years. I hope your government can look that far down the road. Maybe it sees something sliding across the road two years hence. I don't know. But five years from now they'll be doing underwater mining. We have to consider this as competition.

HON. MR. NIMSICK: We can't get people to mine on top of the ground, let alone getting them to go down under the water.

MR. GIBSON: Exploration, of course, is so completely the lifeblood of the industry. The average cost of finding metals in British Columbia has been going up constantly. If those expenditures stop, it means that we very, very quickly begin to slide back.

I want to shift my remarks to another stage now. I hope I made the point that British Columbia has to compete in this world to sell our minerals, and that we shouldn't be talking about leaving them in the ground unless, of course, we can't get a fair price for them. But as long as we can get a fair price for them, we're doing something good for the world by digging them out.

[ Page 2517 ]

Now, this is something of absolute amazement to me to find, but within the last month — I think without the knowledge of this Legislature, but pursuant to actions taken by this Legislature — this government has imposed a tax on half of the mining industry, which is certainly immoral and stupid, and it's possibly illegal too. I refer to order-in-council 1086. Hon. Members will recall the Mineral Land Tax Act passed last year, covering Crown-granted lands. This order-in-council was passed pursuant to the Mineral Land Tax Act.

Crown-granted lands cover the following producing mines in British Columbia: Britannia Mine, Bethlehem Mines, Bulkley Valley Mines, Cassiar, the HB Mine of Cominco, Pinchi Lake Mine, Sullivan Mine, Giant Mascot Mines, Phoenix Mine, Granduc Mines, Granisle, Jordan River, Kaiser Resources, Kam-Kotia and Burkam Joint Venture, Annex Mine, Ingerbelle Mines, Highland Bell Mine, Texada Mine, Tasu Mine, Windermere Mine, Lynx Mine. Many Members will know those names from their own constituencies around the province. This covers about half the mineral production from the Province of British Columbia. It's an order-in-council of enormous import when you consider what it says.

I'd like to refer, for a moment, to the Mineral Land Tax Act, which one would be forgiven for assuming would be considered a tax on property, a tax on land. Indeed, section 5(1)(b) mentions a tax "at such rate not exceeding 25 mills on each dollar of the assessment of his designated mineral land situated within the production area as the Lieutenant-Governor-in-Council may by order prescribe." Assessment on land.

Order-in-council 1086, aside from being a vicious and deficient order-in-council in terms of discretion, also purports not to be a tax on land but a tax on the value of production. I'll come to the legality of that in a minute, but first of all let me cover the morality of it and outline some of the provisions of this order-in-council to this House.

It's not as if this were a well-known order-in-council. The department, for perhaps understandable reasons, didn't go out on March 28 and hand a copy around to everybody on the street. As a matter of fact, three or four weeks later we find mining men who should know what's going on, mining on Crown-granted lands, who are saying they didn't know what to do with their mines because they didn't know what the tax burden was going to be, and yet here it is. It's 1086. The department didn't send it to me, whichever Minister asked that. I was able to obtain a copy.

It starts off with a bunch of regulations. Half a dozen of them, anyway, are definitions which relate to the discretion of the Minister. It refers to costs approved in writing by the Minister — "approved transportation allowance," approved in writing by the Minister.

" 'designated mineral' means designated by the Lieutenant-Governor-in-Council;

" 'production tract' means any area in the province designated as a production tract."

HON. MR. NIMSICK: You're going to get all balled up in that.

MR. GIBSON: It's a very complicated document, I assure you.

" 'Standard value' means the standard value prescribed by the Lieutenant-Governor-in-Council."

Here's a good one:

" 'Gross production revenue' means money or rights or things expressed in terms of money, or the value in terms of money of the right or thing paid or credited to an owner as consideration for the purchase or other acquisition from him of the total standard measures of a designated mineral produced in his production tract and sold by him during the calendar year immediately preceding the taxation year or the value in terms of money of a benefit to an owner as a result of the use by him of standard measures of a designated mineral produced by him in his production tract during the calendar year immediately preceding the taxation year."

I read out gross production revenue, Mr. Chairman, because what's called GPR (Gross Production Revenue) figures in the formulas we're coming to now, and they're very interesting formulas. We have these definitions set out in section 1.

Then we have section 2 of the order-in-council, which notes that there shall be a mill rate of 12.5 mills applied to the assessed value of a production tract. Mr. Chairman, when you hear that something is a mill rate, once again you're led to believe there's a tax on property going on here — a tax on land or on some fixed property. But now we hear, under section 3, that the assessed value of a production tract shall be the sum of the products of the gross production revenue from each designated mineral in respect of the production tract, and the valuation factor for each designated mineral determined under section 4. This is where the complexity starts, Mr. Chairman, because under section 4 we have the formula. There's formula A and B and C and D. I won't worry the committee with any formula beyond formula A, because that's certainly sufficient to demonstrate the point.

[Mr. Dent in the chair.]

Formula A, for those who haven't seen it, says:

[ Page 2518 ]

AN HON. MEMBER: That's pretty straightforward.

MR. GIBSON: When I saw that I said to myself, this doesn't look like a usual property tax to me, so I put some numbers in. Mr. Chairman, you know what comes out if you put in $1 copper and a 55-cent standard value that the Minister had cited for copper? You know what comes out? What comes out is exactly the same royalty per pound of copper as under Bill 31 — that's all I'm going to mention.

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: Legislation by order-in-council, eh?

MR. GIBSON: When I saw that, Mr. Chairman, I said to myself, there is something very strange going on here. Could it be just at the $1 value that this happens? I'll send the Minister a copy of the arithmetic if he likes, but it turns out....

HON. MR. NIMSICK: I've gone all through it.

MR. GARDOM: Alphabet soup, that's all it means to you.

HON. MR. NIMSICK: I drew it up.

AN HON. MEMBER: It sounds like it!

MR. GIBSON: If you do your arithmetic, you'll find that the tax on a pound of copper comes to this: .525(GVP – 1.2SVP) – .025(S + T) – .03SVP.

HON. MR. NIMSICK: Hansard's going to have a lot of trouble.

MR. GIBSON: Almost exactly the same as that other bill, Mr. Speaker, all up and down the line. So what do we have here? What we have is already imposed on half of the producing mines of British Columbia, the exact same royalty schedule — I call it a royalty schedule, I can't call that a property tax, Mr. Minister — that has not as yet been passed by this House.

MR. D.A. ANDERSON: Shame!

MR. GIBSON: That may be legal, Mr. Minister, but I don't think it's moral.

AN HON. MEMBER: It's ultra vires.

HON. MR. NIMSICK: Didn't you vote for that bill, or weren't you here?

MR. CHAIRMAN: Order, please! I would point out to the Hon. Member that I think that the point you've arrived at in your comments would appear to be such that it would be more appropriate to continue the discussion under Bill 31.

MR. GIBSON: Mr. Chairman, I'll be very glad to table order-in-council 1086 if you wish me to do so.

MR. CHAIRMAN: Order, please! The proper place to table a document would be when we are sitting in the House.

MR. GIBSON: That's fine. I just wanted you to be able to have a look at it to assist you deliberations, but I can assure you that this is an existing order-in-council passed on March 28, 1974, pursuant to the provisions of the Mineral Land Tax Act. It is that order-in-council which I will be discussing. That order-in-council, as I mentioned earlier on, covers the taxation of roughly half of the producing mines of British Columbia, and that order-in-council sets out nothing more nor less than a graduated royalty charge and in particular a surcharge on the value of minerals more than 20 per cent above what is called a standard value.

MR. CHAIRMAN: Order, please! I would ask the Hon. Member if he considers the most recent remarks that he's made to be in some way relevant to the principle of Bill 31.

MR. GIBSON: Mr. Chairman, I'm relating my remarks to the Mineral Land Tax Act and to order-in-council 1086.

MR. CHAIRMAN: Order, please! I'm asking the Hon. Member if he would consider his remarks as relevant to the principle of Bill 31.

MR. GIBSON: Mr. Chairman, I'm not talking about Bill 31. I'm talking about this order-in-council.

MR. CHAIRMAN: Order, please! I'm asking the Hon. Member if he considers his remarks as relevant to the principle of Bill 31.

MR. GIBSON: Well, Mr. Chairman, I suppose that everything that one says is relevant to the budget of the Minister of Finance, but that surely doesn't mean....

MR. CHAIRMAN: Hon. Member, I'm sure that all the Members of this committee would agree that the remarks that you're making now you have related to the principle of this bill, and therefore I would consider it out of order.

[ Page 2519 ]

MR. GIBSON: Mr. Chairman, what I said was that in passing this order-in-council what the government did was to implement something that may be legal but has not been debated by this House.

HON. MR. NIMSICK: You're all mixed up.

MR. GIBSON: The Minister says I'm all mixed up. He can straighten me out when he stands up. As I say, this is a royalty on mineral production, so I went and sought a little bit of advice because this is on Crown-granted lands. It's not on Crown lands, but on Crown-granted lands. That incidentally, Mr. Chairman, is the difference between the Mineral Land Tax Act and the other Act: these are Crown-granted lands.

There have been instances where provinces have attempted to levy a royalty on production for mineral lands, where the lease or permit did not contain a provision for the levy of a royalty. In such cases the provinces have been forced to abandon the royalties. A court case relating to this type of situation is that of the Colliery Coal in Alberta. The Province of Alberta undertook to levy a percentage of the selling price per ton of coal from the mine as a royalty. The company contested the right of the province to levy such a royalty and won the case on the ground that the royalty was an indirect tax. The Province of Ontario, in recent years, was forced to abandon a tax of one half cent per 1,000 cubic feet on natural gas from lands held under freehold title for the same reason.

The right of a province to levy a royalty on mineral production appears to depend, therefore ,on whether a provision for the collection of the royalty was included in the terms of the lease or freehold title (the Crown grants) when granted originally. Is it the case then, Mr. Chairman, that there's actually some legal question about whether this order-in-council passed under the Mineral Land Tax Act is ultra vires of the powers of the province? The Minister shakes his head. I hope his lawyers have checked it.

HON. MR. NIMSICK: They took it to a court in Saskatchewan.

MR. GIBSON: I hope his lawyers have checked it. In any event, I'm giving him that information to go on in the hopes it might be helpful to him.

AN HON. MEMBER: Check the court record. It's all there. It went to privy council, as a matter of fact.

MR. GIBSON: So we have a situation here where we have a tax that has been imposed under the authority of a statute given by this House to tax property, which in fact taxes the gross value of production. It's a tax which may or may not be open to legal challenge. This tax is in effect and operating today, Mr. Chairman, insofar as the notices are sent out. There's tremendous discretion here. Mr. Chairman, I want to suggest that it's the wrong kind of tax. What this is is a royalty-type tax, and it should be....

MR. CHAIRMAN: Order, please! I would ask the Hon. Member if he in some way is equating the order-in-council with the principle of this bill.

MR. GIBSON: Mr. Chairman, I'm talking about this tax which is imposed under order-in-council 1086. I went to some pains....

HON. MR. NIMSICK: You're criticizing previous legislation, which is not right.

MR. GIBSON: Mr. Minister, I'm not criticizing legislation. I'm stating what the regulation you passed does.

MR. GARDOM: He can criticize existing legislation as much as he wishes to!

MR. CHAIRMAN: Order, please! Speaking in regard to a point of order, it's permissible for the Hon. Member to pursue the line that he's following, providing that he's dealing with the....

Interjections.

MR. CHAIRMAN: Order, please! But I'm really cautioning the Hon. Member and requesting that he not in effect get into a debate on Bill 31 by dealing with something that he's equating with the same principle as Bill 31. Would the Hon. Member continue, please?

MR. GIBSON: I can assure you I'm dealing purely with an existing royalty structure imposed under the Mineral Land Tax Act. The order-in-council is pursuant to the tax.

Now, we have in this province, Mr. Chairman, some great expertise, some of it appointed by this government, which has been giving good economic advice on the subject of royalties. It applies exactly as well to the mining industry as it does to the timber industry. In the report of the commissioner, Dr. Peter Pearse, appointed to investigate the use of royalties in the timber industry....

HON. MR. NIMSICK: You're discussing royalties, and that's Bill 31.

MR. CHAIRMAN: Order, please!

[ Page 2520 ]

MR. GIBSON: Mr. Minister, I am discussing the royalties imposed under your order-in-council.

HON. MR. NIMSICK: Read your Act.

MR. GIBSON: Mr. Minister, anything that slides up and down with the value of production and levies a fixed fee as it does in paragraphs B, C and D — a straight percentage royalty, nothing else.

HON. MR. NIMSICK: Read your Act.

MR. GIBSON: Read your formulas, Mr. Minister. I don't know if you wrote....

MR. CHAIRMAN: Order, please! I would ask the Hon. Member for North Vancouver–Capilano again if he is equating the subject matter of the order-in-council — equating it with the contents of Bill 31, the principle of Bill 31.

MR. GIBSON: No, no! I am not, Mr. Chairman. All I am doing is saying it is a royalty. Now, let me clarify something for you. Bill 31 applies to lands other than the lands I am talking about. The lands I am talking about are Crown-granted lands, which are covered by the provisions of the Mineral Land Tax Act. These Crown-granted lands.... I read out a list of them a few minutes ago. I am sure you wouldn't want me to read them out again, but it is a long list of producing mines that are on these Crown-granted lands.

It is those lands and the taxation pattern on those lands which I say is a royalty-type taxation, which I am discussing. Bill 31, as I say, does not apply to those lands, nor does the Mineral Land Tax Act apply to the lands covered by Bill 31. There are two distinct compartmentalized parts of the province. I am talking only about that part of the province which is covered by existing mineral taxation legislation of this kind which I say, relating only to these lands, is a royalty.

MR. CHAIRMAN: I have not ruled the Hon. Member out of order, so don't look so guilty yet.

AN HON. MEMBER: The Minister doesn't know what a royalty is. He doesn't know what you're talking about.

MR. GIBSON: Now, royalties....

HON. MR. NIMSICK: You don't know what you are talking about either — don't kid me.

MR. GIBSON: Royalties, Mr. Chairman, are a very...

HON. MR. NIMSICK: I drew it up!

MR. GIBSON:...pernicious type of taxation. Let me quote from an excellent article written by the Business Editor of the Vancouver Sun. He said:

"To the uninitiated and for the sake of this saga, a royalty is something you pay regardless of how much profit you may or may not make..."

HON. MR. NIMSICK: That's not a royalty — don't confuse the issue.

MR. CHAIRMAN: Order, please! The Hon. Member for North Vancouver–Capilano has the floor.

MR. GIBSON: Thank you, Mr. Chairman.

"...and a tax is a levy against profit.

"I hope that Peter Pearse and his colleagues" (and I am quoting Mr. Hammond) "will forgive me when I suggest that as you read the following selected passages from the Task Force Report on Crown Timber Disposal, that...."

and he goes on to say you might find some relationship with it.

Then he quotes Mr. Pearse's report.

"Royalties on private and Crown timber in British Columbia are, with only minor exceptions, specified dollar assessments per unit of volume of wood harvested. Royalties fixed in dollars per unit of wood are easy to administer because they require only a scale of the timber harvested."

That is one of the great attractions of royalties: they are easy and simple to administer. And that was from an earlier day when we didn't have the administrative tools that there are now. The quote goes on:

"No information is needed about the forest from which it is taken nor the cost of the logging and transport. The disadvantages of such a system were that it implied that all timber was of equal value, which of course encouraged loggers to take only the best timber" (and that is what bothers me in the mining industry, Mr. Chairman) "and it failed to recognize that timber in different locations varied in value because of differences in logging and transportation costs.

"Natural forests ranged from worthless to very precious, and so a fixed levy per unit of wood harvested from different tracts will inevitably extract an inconsistent fraction of net value timber.

"Even if royalty rates were fixed at levels that would extract the full net value of harvested timber, in a given category on the average, all the timber of above-average value would be underpriced and operators would

[ Page 2521 ]

incur loss on the other half and hence have no financial incentive to remove it. Apart from its obvious implications for efficient forest utilization, the system creates inequities among operators on forest stands of different qualities."

HON. MR. NIMSICK: We are not on the Forestry department now.

MR. GIBSON: No, we are not on the Forestry department now, Mr. Minister, but many people, I find, find it easier to visualize the mining problem in the context of something that they can see. So that is why I had hoped that reading this little extract from the Pearse Report would be helpful to you in that regard.

The opinion is pretty well unanimous on this, you know. Here is a quote from a gentleman who is called a world-renowned mining authority, especially on copper. His name is Ronald Prain — he's the past chairman of the RST Group of companies.

Interjection.

MR. GIBSON: I don't believe so, Mr. Member, I think it is Rhodesian Selection Trust, and I am not exactly sure what the RST stands for. But he was speaking of this form of taxation. He said he noted that the proposed form of taxation "has no regard to profits, creates artificial inequalities between mines, increases the cutoff grades, thus reducing reserves, and has many other bad features which can be avoided by taxation based on one criterion only — namely, profits."

HON. MR. NIMSICK: You are talking about Bill 31 now.

MR. GIBSON: We are not talking about Bill 31, Mr. Minister ...

HON. MR. NIMSICK: Ah, don't give me that....

MR. GIBSON: You keep mentioning that word. You shouldn't do that. Out of bounds, in this debate.

MR. CHAIRMAN: Order, please. I would point out that the Hon. Member for North Vancouver–Capilano is walking through the tulips on a tightrope, but he is still on it, so I would ask the Hon. Member to continue.

MR. GIBSON: Now, the other day, Mr. Chairman, the Association of Professional Engineers had some things to say about the same sort of thing — a most unusual statement. They said it raises the cutoff grade. If anyone in the industry did that, he would be accused rightfully of high-grading. But modern mines don't do that. They extract all the ore that is economic — if the government thinks it should have more taxes it should take them from the profits.

Now, Mr. Chairman, let me give an example of how this would work. It is an example I worked out myself, so the Minister is very welcome to check my arithmetic, which I hope he will. It's again an example related to trees, because they are easier for me to see.

You have a forest of 1,000 trees. And let's say, just to keep the numbers simple....

HON. MR. NIMSICK: I wish your Dad was telling us about the trees!

MR. GIBSON: He knows a lot about trees — he knows more about trees than I do, but I am using this example. Just to keep these numbers simple, we are going to say that to log each tree costs $1. And these trees are of a varying value. There are 100 of them worth $1.10, 100 worth $1.20 and so on — up to $2. So the average value of a stand is $1.55 per tree. And let's say that there is an operator on this timber, and each year he is giving the government half of his profit in taxes and keeping half.

Interjection.

MR. GIBSON: Well, I am relying on the fact it has been written down.

HON. MR. NIMSICK: Anyone who reads Hansard is going to have a tough job following him!

MR. GIBSON: It can be studied the next day.

Interjection.

MR. CHAIRMAN: Order, please. Would the Hon. Member address the Chair, and speak a little more loudly than his critics, please?

MR. GIBSON: Thank you, Mr. Chairman. Now, if you go through the long and short of it, with a 50 per cent tax rate, that operator logs all those trees. He pays $1,000 costs for wages, supplies of one kind of another. He splits the $550 profit with the government — $275 goes to each of them.

Now, let's say that one day the government came along and said, "We are not getting enough out of that natural resource. People deserve more out of those trees, and it is unconscionable that the operator should be making that profit."

MR. CHAIRMAN: Order, please, I would ask the Hon. Member whether he is debating the desirability of imposing a royalty per se — that is, the principle of imposing a royalty as opposed to other means of

[ Page 2522 ]

raising revenue. My understanding was that the Hon. Member was discussing the administration of the Land Tax Act...

MR. GIBSON: Yes, sir. I am.

MR. CHAIRMAN: ...and I would ask him to confine his remarks to that particular legislation that is being presently administered.

MR. GIBSON: Crown-granted lands — order-in-council 1086, and I am even willing to specify that this stand of timber is above one of these mines. (Laughter.)

MR. CHAIRMAN: I think that the Hon. Member would agree, that if he is going into a full discussion — or we are going to enter into a full debate on whether or not royalties should be imposed in mining, that I think the most appropriate place for this discussion would be under Bill 31, which is the main point of the bill — one of the main points of this bill. Will the Hon. Member continue?

MR. GIBSON: Thank you, Mr. Chairman. I have to report again to you that Bill 31 does not apply to Crown-granted lands, and it is Crown-granted lands that I am talking about.

MR. CHAIRMAN: I think the Hon. Member would agree that if he read Bill 31, the main point of the bill is to impose a royalty on units — therefore, if he is going to discuss the desirability of royalties, the most appropriate time to discuss this would be under the bill. Would the Hon. Member continue?

MR. GIBSON: My understanding had been that Bill 31 was to.... Well, I shouldn't discuss it, but it is certainly not to tax Crown-granted mineral land. It's to tax other mineral lands that....

MR. CHAIRMAN: Order, please. The Hon. Member has not understood the point I'm trying to make. Under estimates the main thing is to discuss the administrative aspects of the Minister of Mines under this particular vote. We can consider those particular Acts that he's responsible for administering. However, the concern should be in the way these Acts are being administered, rather than in discussing some of the principles, such as whether we should have a royalty or not have a royalty, which are more appropriately dealt with under Bill 31.

MR. GIBSON: Well, perhaps I can reassure you in that regard, Mr. Chairman. This is exactly the administration of the Mineral Land Tax Act and the regulations — which are certainly administrative — which were passed under that Act less than a month ago and are only now....

MR. CHAIRMAN: Well, would the Hon. Member then move along and get to his point regarding the administrative responsibility of the Minister in regard to what he's saying?

MR. GIBSON: Well, I'll get back underground in just a second, Mr. Chairman; but if I could just finish with my trees, which will take me about one minute.... (Laughter.)

HON. MR. NIMSICK: I've got nothing to do with trees.

MR. GIBSON: No, but this will illustrate something to you, Mr. Minister. If the government decided to say, "In addition, you fellows have to pay 25 cents a tree to take those off there....

HON. MR. NIMSICK: This is sort of a parable, is it?

MR. GIBSON: A parable. Then the operator doesn't take off the $1.10 trees and he doesn't take off the $1.20 trees, because his costs are now $1.25; so he high-grades. That's mining talk: he high-grades. And as a result of his high-grading he makes less money; he makes $190 instead of $275. The government makes more; they make $360 instead of $275. But the province as a whole only has revenues of $1,320.

In other words, it's down $230 because of this silly decision to impose that type of tax. And the men aren't paid for taking off those 200 trees that had to be left there when they were really economic according to cost, but according to royalty weren't. So that's that example.

HON. MR. NIMSICK: I know somebody who could have done better on parables than that.

MR. GIBSON: You have to practise.

Interjection.

MR. GIBSON: Is that like seagulling?

So exactly the same thing applies to the mineral side with the incalculable wealth lost to British Columbia if this form of taxation specified under 1086 is continued. It will just be absolutely immense.

I mentioned earlier on that Crown-granted lands comprise approximately 50 per cent of the producing mines of the province. I am going to estimate, and I think it will be pretty close, that they also comprise 50 per cent of the good potential prospects. Now the president of the B.C. and Yukon Chamber of Mines has estimated the combination of those two kinds of

[ Page 2523 ]

things, the Crown-granted land and the other land, as containing a combination of six billion tons of ore, both operating and proven sufficient to operate. So let's say there are three billion tons on the Crown-granted side.

Then the president estimated as well that the application of this sort of a charge would cut those reserves by about one-half. Well, that means we'd cut them about 1.5 billion tons. A ton of ore just has to be worth $5, Mr. Chairman. It can't be worth any less, Mr. Minister; that's right, isn't it? A ton of economic ore can't be worth less than $5. That's a minimum figure.

So that's what? It's $7.5 billion worth of mineral resources put in the category of those low-grade trees, just like that, by this form of taxation, by this order-in-council 1086 — cut out of the economic category. What does the Minister have to say about that? How does the Minister fulfil his mandate by making it impossible to mine?

One of these Crown-granted mines is at Granduc. The Member for Atlin (Mr. Calder) is here. I think he was in London at the time this particular newspaper article came out, but he'd be interested in it. It says, "Atlin Miners Pour Out Complaints."

HON. MR. NIMSICK: That's about Bill 31.

MR. GIBSON: It can't be about Bill 31 because that doesn't apply to Granduc, Mr. Minister.

AN HON. MEMBER: No, but it said there that they were talking about Bill 31.

MR. GIBSON: They must have been talking about something else because they're in the town of Granduc.

These calculations that you have to make about the effect of this kind of tax legislation on the province are necessarily rough. That $7.5 billion figure might be low.

MR. CHAIRMAN: Order, please. I would ask the Hon. Member that when he says "this kind of taxation...."

MR. GIBSON: Order-in-council 1086, I beg your pardon.

MR. CHAIRMAN: The Hon. Member has indicated to the committee that the formula contained in this particular order-in-council is to be equated with the formula used in Bill 31. I was under the impression that the Hon. Member was going to be talking only about the order-in-council in question. But it appears that the Hon. Member is talking about the formula or the principle which, in effect, is impinging upon Bill 31. Therefore, I would ask him to discontinue his remarks on that particular line, inasmuch as he is in effect discussing identically the same formula contained in Bill 31. And this is clearly out of order under standing orders.

MR. D.A. ANDERSON (Victoria): It is very interesting, but the fact of the matter is that because a principle may be contained in an order-in-council already passed and because it may also be contained in later legislation, it does not mean that the government, by introducing such legislation in a totally different field that we've talked about — Crown-granted lands and Crown lands — can somehow stifle debate on the taxation that's coming up under this particular order-in-council 1086, and thus we cannot question the Minister on this particular area of his responsibility which comes under the Mineral Land Tax Act, already passed by this Legislature and comes up under an order-in-council passed by the cabinet a short time ago.

Now if they put on a bill on a totally different area of land, namely Crown land as opposed to Crown-granted land, and get away with any discussion, and you accept that argument of theirs — indeed you don't even accept it; you develop it on your own without any suggestion from the government benches — it is a ludicrous way to run debates on estimates.

MR. CHAIRMAN: Order, please. As Chairman, I'm ruling that any continued debate on the principle of Bill 31 is out of order. I'm ruling that the principle contained in Bill 31 is, in effect, part of the principle which the Hon. Member is referring to.

MR. D.A. ANDERSON: Mr. Chairman, there is no way your ruling can....

MR. CHAIRMAN: Order, please. Any debate on any matter is out of order if it impinges upon the principle of a bill before the House.

Interjections.

MR. CHAIRMAN: Order! The purpose of debate in estimates is to discuss the administrative responsibility of the Minister under this vote. The Hon. Member is proceeding on a line of reasoning which is impinging upon a bill before the House; therefore, I must rule that debate out of order.

MR. GIBSON: Mr. Chairman, I think I am following the administrative responsibilities of the Minister quite closely. For example, I asked him in the House the other day; and I'll just talk about Crown-granted mines here: "Bralorne Awaits B.C. Word." Remember I asked you in the House, Mr.

[ Page 2524 ]

Minister, and you said you had so many letters you weren't sure if you had a letter from Bralorne Mines or not. But what they were saying in effect was: would they dare do any further work? Could it possibly be economic for them?

Were you going to reply to that? As I say, that's a Crown-granted mine.

AN HON. MEMBER: They haven't applied for production.

MR. GIBSON: The newspaper story may be wrong, Mr. Minister. It may be that they are not indeed awaiting word from you, but I assume that something that open-and-shut would be correct. Perhaps you might indicate whether they are or not.

There's another one: "Government Holds Key to Mine's Fate." The economics of reopening Benson Lake, a Vancouver Island mine of Coast Copper Co. Ltd., cannot be assessed until B.C. mining legislation is clarified. Now that mystifies me because that will be subject to taxation under the new Mineral Land Tax Act. That statement was made, Mr. Chairman, on April 16, 1974, well after this order-in-council was promulgated. That's why I say: what effort was made to advise the industry of this so that they were still, as of April 16, several weeks later, almost three weeks later...?

AN HON. MEMBER: Maybe they didn't quite understand. Maybe they should have got you to help them.

MR. GIBSON: They didn't quite understand, Mr. Minister, that the "government holds the key to mine's fate". Now I think that's a pretty good statement.

The Valley Coppermine is the elephant; this is the big one in British Columbia. This is the biggest known deposit of copper. "Decision on mine uncertain." I understand that's on a Crown-granted property, Mr. Minister — Valley Copper. Now I wonder if, when they said that, they had seen order-in-council 1086. Because once they see that, I don't think it'll be uncertain any more. I think that's a straightforward example of what's going to happen to the mining industry.

AN HON. MEMBER: It's not a copper Crown-granted land.

MR. GIBSON: It's not? I'm sorry; I was given incorrect information, then.

Now Phoenix is Crown-granted at a copper price of $1 a pound. The effective tax rate on Phoenix goes to 95 per cent. The Minister will understand that it's a characteristic of this kind of formula that it doesn't hit the high-grade producers nearly as hard as the low-grade producers. That's the whole problem in a nutshell. It lets those with relatively high grades get away easily.

MR. CHAIRMAN: Order, please! I would draw again to the attention of the Hon. Member that I have ruled out of order consideration of the formula which is contained as part of the principle of Bill 31.

MR. GIBSON: Mr. Chairman, the formula I referred to....

MR. CHAIRMAN: Order, please! It would appear that the Hon. Member is continuing to discuss the formula in terms of its impact on particular mines. Therefore, I would rule that discussion out of order.

The Hon. Second Member for Victoria is rising on a point of order.

MR. D.A. ANDERSON: I'm posing a question to the Chair. If we are going to be barred from discussing an order-in-council and the administration of the Mineral Land Tax Act in these debates, I ask you this question: when will we be permitted to discuss it? For sure we won't be able to discuss it under Bill 31. Now will you tell me when we can discuss the administration of that particular order-in-council if we can't discuss it now? — because I can assure you we have no intention of discussing it under Bill 31, which would clearly be out of order.

MR. CHAIRMAN: Order, please! I think the thing is very clear, Hon. Member. If the formula is to be discussed, then clearly the formula can be discussed quite adequately under Bill 31. The formula is what is under consideration.

MR. D.A. ANDERSON: Mr. Chairman, whatever may come up under Bill 31.... And I don't want to discuss it. What we want to do is discuss the administration of the Mineral Land Tax Act and, in particular, the administration as applied under a certain order-in-council. Now if we can't discuss the administration of this particular Act here, I'll repeat my question to you. When in the future will we be able to discuss the administration of that particular Act?

MR. CHAIRMAN: The Hon. Minister of Labour on a point of order.

HON. W.S. KING (Minister of Labour): Mr. Chairman, I would suggest that an order-in-council is the responsibility of cabinet and not any particular Minister. Certainly there's no provision for discussing orders-in-council under the estimates of a Minister. That is clearly the responsibility of cabinet.

[ Page 2525 ]

MR. PHILLIPS: How far wrong can you be?

MR. D.A. ANDERSON: On the same point of order, that's got to be....

MR. CHAIRMAN: Order, please. Both the Second Member for Victoria and the Hon. Minister of Labour have commented on the point of order. I will make further comments, and that is that it is very simple.

The point is that it is out of order to discuss this formula under any guise, in any way, whether it's to do with an order-in-council or anything else. It's out of order to consider that formula. However, the Hon. Member may discuss other aspects of the administration of that particular Act inasmuch as it pertains to the Minister's administrative responsibilities, providing he doesn't discuss the merits of the formula, which should be brought up under Bill 31.

MR. D.A. ANDERSON: I assume, Mr. Chairman, that your present ruling is that we can discuss the administration of the Mineral Land Tax Act previously passed by this Legislature, administered by the Minister of Mines, at this time.

MR. CHAIRMAN: Order, please! The Hon. Member may not discuss the merits of the legislation, or reflect upon the legislation. He may not discuss a formula contained in the order-in-council, which is also contained in Bill 31, but he may discuss the Minister's administrative responsibilities as they pertain to this particular Act.

MR. GIBSON: I'm going to go on to other things anyway, but I just want to make it clear that the only formula I was discussing was:

MR. CHAIRMAN: That's out of order.

MR. GIBSON: Oh, Mr. Chairman. It can't be. What happened to the Minister? That formula scared him off again. I don't know if he wrote it or not, Mr. Chairman.

What are some other indicators of the state of the mining industry in British Columbia?

AN HON. MEMBER: Moving right along.

MR. GIBSON: Moving right along. I have a letter right here from a company that I have reason to believe sent copies to many persons, but I won't mention the names, just in case. This company has been for 25 years a British Columbia–based design engineering company with its primary specialty the design of mineral processing plants.

"We have an average staff of approximately 300 people and have designed the majority of the mine service plants built in B.C. during the last 10 years. We are very proud of our accomplishments. Our capabilities are recognized throughout the world of the mineral industry. We are dependent for almost all of our workload on new capital investment, but not in existing operations."

That, I might add, Mr. Chairman, is a characteristic of the areas of the economy that are being very hard hit right now — areas that rely on new development: exploration, mine construction and so on.

"The attached graph illustrates in particular the relative quantity of our B.C. work as compared with our foreign work. Fortunately for us, we have been able to maintain ourselves because we started on an overseas foreign development programme at an early enough date and in time to overcome the effect of the action of our governments. Unfortunately for British Columbia the drop in our normal B.C. workload since 1971 has meant the loss of approximately 100 jobs.

"In our opinion this loss has been caused by government policy: first, by uncertainty over federal taxation in 1971 and, secondly, by uncertainty in your provincial taxation and royalties through to the present time. The drop in our B.C. workload has occurred in spite of metal prices which should be creating boom conditions in the B.C. mining industry. In effect, your policy has caused a loss in our engineering office alone of at least 100 jobs."

That's a big company, Mr. Minister. Here's a small company.

"The company for which I work is one of many that has reduced its B.C.-based staff; namely, in 1972 we had a staff of seven geologists and no budget problems. In January 1973 our staff was reduced to four geologists, and minimal budget expenditures were confined to commitments that had been made prior to the introduction of NDP legislation. No new programmes were started.

"In 1974 our staff was further reduced by one, leaving three geologists with an absolutely minimal operating budget. At this time I have no reason to believe that the company proposes to close this office. However, the reduction of our staff over the last 14 months is not the least bit reassuring."

Another letter.

"Consequently I am concerned about my husband's future in mineral exploration in B.C. I feel that he and other geologists in the industry in general can only pay their share to society when they are working."

[ Page 2526 ]

I just read.... This man here and people in his office had been laid off starting in 1972.

MR. CHAIRMAN: Order, please! Would the Hon. Member address the Chair? I would ask the Hon. Minister not to speak from his seat, please.

AN HON. MEMBER: Dear Abby. (Laughter.)

MR. GIBSON: A lot of letters. There are a lot of letters from NDP supporters, surprisingly, Mr. Chairman.

AN HON. MEMBER: Ex-NDP supporters.

MR. GIBSON: Ex-NDP supporters, the Member says. That's right. These people understand what this government has done and is doing to the mining industry.

The Hon. Member for Vancouver–Little Mountain (Mr. Cummings) applauds that statement, Mr. Chairman, which shows how little he understands about his government's policy. Do you know what his Minister of Mines said?

AN HON. MEMBER: You know, it's taken you two hours to say something. How about getting on with it?

MR. GIBSON: His Minister of Mines believes, and he said this many times, that if a policy is good enough for the CPR, it's good enough for the government.

Interjection.

MR GIBSON: He nods his head, Mr. Chairman.

MR. CHAIRMAN: Order, please! Would the Hon. Member confine his remarks to the administrative responsibilities of the Minister?

MR. GIBSON: Any Minister who runs his administration on the basis that if it's good enough for the CPR it's good enough for the government.... It's not good enough for the government. The government has a responsibility to the people of this province for the jobs, which the CPR doesn't have.

AN HON. MEMBER: Are you against the CPR?

MR. GIBSON: Not good enough at all.

Interjections.

MR. GIBSON: The basic problem in all this, Mr. Chairman, is NDP dogma. It is the belief that they know the right answers for an industry that, in fact, they know nothing about.

It's either that, or they're on a programme that is going in a particular direction. And I want to cite here a background paper on natural resources that was conveyed to me and a great many other people by Mr. Martin Kierans, a consulting geologist, which he says is a paper produced by the Hon. Minister of Lands and Forests (Hon. R.A. Williams) for discussion at an NDP policy conference in 1971. Here are his words from that paper. Maybe the Minister will deny them as his policy. I hope he will.

"The acquisition of privately owned corporations in the resource field prior to major resource tax changes would be a mistake, because the market price of those companies would be grossly inflated because of the wide range of tax holidays they presently enjoy. Any acquisition of those corporations prior to substantial tax change would be a misallocation of public funds."

Are you after those companies, Mr. Minister? Is it a question of make them as cheap as you can and they'll fall into your hands? Is that what it is on the smelter side? Is that why the government has finally been oh-so-sadly forced into going into the smelter business? Because you've made it impossible for anybody else, because you haven't worked with the industry?

An editorial from the Northern Miner:

"The question is why would a socialist government, supposedly dedicated to the betterment of the lot of the working man, implement a policy that is designed to make investment in the province's industry unattractive? Why would this socialist government force investment to other provinces, to other countries, the consequence of which can only be perhaps some financial loss to a few entrepreneurs who can afford it, but certain unemployment and severe economic hardship to tens of thousands of workers who cannot survive without jobs?"

Because that's the impact of it, Mr. Minister.

HON. MR. NIMSICK: Impact of what?

MR. GIBSON: The impact of your policies. The editorial continues:

"The answer is obvious and can actually be found in any socialist political tactical handbook on how to establish undemocratic rule in a seemingly democratic manner...."

AN HON. MEMBER: Do you believe that junk?

MR. GIBSON:

"The aim of the Barrett government is

[ Page 2527 ]

precisely to drive capital away from the province and create a situation in which it will be forced to step in and continue where the capitalists left off."

Just as you say you have to do in the smelter business, Mr. Minister.

Through you, Mr. Chairman, it should be of concern to you, Mr. Member, that a responsible newspaper in this country should write that kind of an editorial. This government doesn't understand the mining industry.

It's a sad editorial, I won't even read the rest of it. It would be too distressing to the government....

HON. MR. NIMSICK: You'd run into Bill 31 there, wouldn't you? (Laughter.)

MR. GIBSON: No, I wouldn't. Mr. Minister, there's an invitation. I'll read the rest of it.

"The aim of the Barrett government is precisely to drive capital away from the province and create a situation in which it will be forced to step in and continue where the capitalists left off. For after destroying the democratic economic system through adverse legislation when the recession is already affecting the general well-being of the province, the victims will obviously demand that the government do something.

"The Barrett government, which caused the problem in the first place, will then graciously give in to the public demand and nationalize industry in order, as they say in socialist circles, to save the workers whom the greedy capitalists abandoned.

"In such a situation, nationalization would seem like a logical and necessary step to try to lead the province out of the economic chaos. When people are hungry, they accept almost any solution. Unfortunately, by the time the voters discover what has happened, dictatorial economic and political power already will have been concentrated in the hands of a few. There wouldn't even be appreciable economic benefits, for the destruction of initiative and personal pride in owning and creating is hardly the way to launch an economic revival of any extent."

That's the rest of the editorial, Mr. Minister. So, we have an economic dogma here, the NDP dogma. It's brought us a lot of trouble. In this department, the second most important industry in British Columbia, I think this question of the overall policies, and in particular the tax system which the Minister has introduced by this regulation, and which in effect is going to force mines on Crown-granted land to high-grade, ultimately to have their lives shortened because their reserves are cut, because they can only take the high-grade, ultimately to shorten the lives of the towns that depend on these mines — not ultimately, but today, has just about ended the exploration industry in British Columbia.

This ranges from the prospectors, through the people who rent trucks to them, the motels they stay in, the helicopters ....

HON. MR. NIMSICK: On a point of order, Mr. Chairman. I would just like to correct a statement. All exploration today that goes on with the prospect of staking claims must be on Crown-owned land. It cannot be on Crown grants, because Crown grants are those that were already set up years ago. The Crown grants are there, but whenever a Crown grant reverts back to the Crown, then it goes into the public domain. You're talking about something that couldn't happen.

MR. GIBSON: I don't know how it couldn't happen, Mr. Chairman, because certainly the exploration is down.

HON. MR. NIMSICK: You're talking about arguments used in the press about Bill 31. You're firing all your ammunition now, and I'm very sorry because I don't want to have you go over all that again when Bill 31 comes up. I'm trying to save you from this.

MR. CHAIRMAN: Order, please. To rule on the point of order that was made, the Hon. Member may discuss administrative policies. However, he should not impinge upon legislative policies, inasmuch as under estimates we are not allowed to discuss legislation of the merits of legislation, either past or future. I would ask the Hon. Member to confine his remarks to administrative policy of the Minister, or the administrative practices.

MR. GIBSON: Mr. Chairman, I'm just winding up in any event because I was saying to the Minister that when exploration dies, that's the lifeblood of the industry, and inevitably the industry dies. It may take a number of years, but I plead with the Minister to reassess the things he has done so far, to look at the evidence that must be so clear to him about, not how the big operators feel — they'll do fine — but how the people who depend on them for jobs feel, and the small investors, and the prospectors, and all of the people who have been involved in this most free-enterprise of all industries in this province. Because it means a lot of personal risk for the small person who's involved in this.

I ask the Minister to look at all of that evidence and to say the right way to get a greater share of the wealth of this industry, with which I fully concur — let us by all means get more for the people — the

[ Page 2528 ]

right way is to do it after the money has been made, not before.

MR. CUMMINGS: After hearing this speech from the Hon. Member for Capilano, I realize I have to share him. I'll only take on his Canadian-controlled companies. I would like to suggest the producing mines in British Columbia. Grandby Mining Company is 66 per cent American-controlled. Gibraltar is controlled by Placer Development, which is American-controlled.

MR. GIBSON: Oh, Roy! Oh, Roy!

MR. CUMMINGS: Yes, I can prove it. Craigmont Mines, 20 per cent Noranda Mines, Ltd., four per cent Canadian Exploration Limited, Noranda controlled, also American-controlled. Cominco, CPR. We should be proud of the CPR because it's about the only last Canadian company left in mining. Cassiar Asbestos, 24 per cent English, 13 per cent USA, 10 per cent Australian — back to Canada, 20 per cent nobody knows.

Granduc Operating Co. — now, that's the company that's operating Granduc Mines. Now, this is a very interesting story which I would like to go into when we get to Bill 31, because it's a good story, this one. But Granduc is 50 American Smelting, which is Amax, which is a great American company, 50 per cent Helga, Montana.

Boy, it's going to be fun to find out where they got the money from. Maybe they borrowed it from the left pocket and took it out of the right pocket. Tax here, interest here, play games.

You know, the Mafia is the criminal organization that washes their money. The mining Mafia....

MR. CHAIRMAN: Order, please! I woulsd ask the Hon. Member to confine his remarks to the administrative responsibilities of the Minister.

MR. CUMMINGS: Well, actually, the administration responsibilities of the Minister should be that he should help Canadians, British Columbians, gain control of the mining industry of British Columbia.

Anaconda, Britannia Beach, 100 per cent American-owned.

MR. CHAIRMAN: Order, please. This would be a matter for legislation, and therefore it's out of order in the consideration of estimates. Therefore, I would ask him to confine his remarks to the administrative aspects of the Minister's office.

MR. CUMMINGS: You mean I can't suggest that the Minister should make an effort to...?

MR. CHAIRMAN: If the matter involves legislation....

MR. CUMMINGS: He should help British Columbians to go in the mining business, and this is what I'm showing, that the problem is so great that British Columbians and Canadians need help to own part of the Canadian and British Columbian mining industry. I think it's quite in order, Mr. Chairman.

MR. CHAIRMAN: Order, please! The Hon. Member may proceed if he relates his remarks to the present administrative responsibilities of the Minister, but he may not discuss anything that might involve legislation — either past, present or future.

MR. CUMMINGS: Actually, Bethlehem Copper is 85 per cent American interest and 15 per cent Swedish. I don't know how they got into it.

MR. CHABOT: Where do you get those facts?

MR. CUMMINGS: Canex Placer, Noranda, American, Brenda Mines, 50 per cent Noranda, 35 per cent Noranda through another company — American. Granisle Copper Ltd. is 66 per cent American, owned by Granby. Jordan River, no record. It's too small; nobody owns it. Lornex is English.

I would like to suggest to the Minister that he has to make an effort to help British Columbians and Canadians buy a share of this industry. It's very, very important. Giant Mascot....

MR. CHABOT: Who owns Giant Mascot?

MR. CUMMINGS: Believe it or not, it's Canadian. It just happens to be 1,800 tons, and it's just small enough for a Canadian to own it. It's owned by M.B. Keeble, who has got a very, very good reputation from one end of the mining industry to the other. Western Mines is another one that's small enough to be Canadian. Here's the national dream again — Valley Copper. Placer Development — 26 per cent Noranda; it's American-owned. Placid Oil, Placer Development.

Now, it's obvious that all producing mines are in the hands of Americans. The Hon. Member for Capilano (Mr. Gibson) is defending the B.C. mining industry. Sometimes I wonder who he's defending. Reeves MacDonald, 60 per cent American. They have a nice name, it's called the Bunker Hill — I guess the Americans are getting their revenge for Bunker Hill. Similkameen is American, too. They take four per cent off the top, but these guys take 50 per cent off the top. Similkameen, this is a good company.

Interjections.

[ Page 2529 ]

MR. CUMMINGS: Why don't you go out and push some...?

MR. CHAIRMAN: Order, please! Would the Hon. Member address the chair?

MR. CUMMINGS: Similkameen Mining. One of the side benefits of this was the pollution. We knocked off 18 cows from Similkameen.

AN HON. MEMBER: Forty-three.

MR. CUMMINGS: This is a stream that for the next 30 years will be suspect every spring runoff. So we're going to inherit a poison stream every year for 35 years.

Interjections.

MR. CUMMINGS: Sure. Harvey Parliament, who's the general manager of that, is probably quite proud of his mining record there. Similkameen is owned by Newmont Mining. That's an American mining company too. Utah Mines is American. Texada Mines, Kaiser Aluminum — 100 per cent American.

MR. CHABOT: Kaiser Aluminum — where are they? Where are they located?

Mr. CUMMINGS: Mr. Chairman, I think it's quite obvious to everyone that this great British Columbia industry is completely owned by Americans. Now, I'm not criticizing Americans — they were smart enough to take it from us, with our own tax money, by evading Canadian taxes granted by those Liberals in Ottawa. So I would like to suggest to the Minister that he has to make an effort to help British Columbia citizens and Canadian citizens to get their fair share of this mining industry.

AN HON. MEMBER: How?

MR. CUMMINGS: How? It's going to be very, very tough. And it's even tougher because Trudeau sent his two exiles to this Legislature, and I can understand completely why they sent them.

AN HON. MEMBER: Who sent you here?

MR. CUMMINGS: The people! The people of Little Mountain who were fed up with the ripoffs of the Social Credit Party!

MR. CHAIRMAN: Order, please! Would the Hon. Member confine his remarks to the administrative responsibility of the Minister, please?

MR. CUMMINGS: I'm talking about the mining industry and I think there should be a rule maybe that some of these people should be investigated, like W.H. Flynn, Houston, Texas. He's a director of a good B.C. company. J.C. Dudley, a banker of New York....

MR. CHAIRMAN: Order, please!

MR. CUMMINGS: These are all directors of good B.C. mines. They're protesting our tax laws.

MR. CHAIRMAN: I don't see how the reading of these names would be relevant to the administrative responsibilities of the Minister, and I would ask the Hon. Member....

Interjections.

MR. CUMMINGS: Well, these are the directors of the B.C. companies that feel it's utterly unfair that they should be paying any taxes at all, because after all, they're American citizens. Why the hell should they pay B.C. taxes?

MR. PHILLIPS: Why the what? What kind of language is that?

MR. CUMMINGS: Why the hell should they pay taxes? They don't pay for nothing! They'll rip off anywhere. R.D. Elliot, New York City....

MR. CHAIRMAN: Order, please! I would request that the Hon. Member....

MR. CUMMINGS: I've got all the rest of these American directors. Don't you want to know about them?

MR. CHAIRMAN: Order, please! I don't really see that reading these names would be relevant to the Minister's estimates. Perhaps they might be relevant at some other time, some other bill, or some other place, but not during these estimates.

MR. CUMMINGS: Well, you know, you're probably right. Maybe I should resurrect this later, but these people are quite disappointed with us because we won't allow at present the old system the Social Credit had to carry on. But we can't permit this. Like J.R. Harrison, Houston — he's unhappy. Shouldn't he be? A.J. Housser, New York....

MR. CHAIRMAN: Order, please! I've asked the Hon. Member not to proceed with the list. I fail to see the relevance to the administrative responsibilities of the Minister, and therefore I would ask....

MR. CUMMINGS: These are all directors of B.C.

[ Page 2530 ]

mining firms that are unhappy with our Minister. I'm just trying to tell you....

MR. CHAIRMAN: Order, please! I would just point out to the Hon. Member that I made a ruling that he may not continue with this list because it's not relevant to the administrative responsibilities of the Minister. Therefore I would ask you to discontinue reading the list.

MR. CUMMINGS: You know, Mr. Chairman, it probably isn't relevant that British Columbia mining is not owned by Canadians or British Columbia citizens, so I'll have to sit down now.

MR. PHILLIPS: That's quite an act to follow.

MR. CHAIRMAN: You're out of order. (Laughter.) Would the Hon. Member continue?

MR. PHILLIPS: I have just a few words that I'd like to address to the Minister — a misguided Minister. I think first of all that everybody in this House and indeed everybody in British Columbia should take a real good look at what is happening to the second largest industry in this province. In the last 18 months, this industry has moved from being a thriving, energetic industry with plans for the future to an industry that is now on the decline and an industry that has no plans for the future. All of this has happened in 18 months, Mr. Chairman.

I know that it's very easy for the Minister of Mines, who works under the Minister of Lands, Forests and Water Resources, who is the real powerhouse in that cabinet, who has control over all the other Ministers except the Minister of Finance....

MR. CHAIRMAN: Order, please. Would the Hon. Member confine his remarks to the administrative responsibilities of this Minister, please?

MR. PHILLIPS: Well, I am! It says right on the top of page N-121, "Lands, Forests and Water Resources." Just look at your estimates. Here underneath it is the Department of Mines and Petroleum Resources. So, Mr. Chairman, I have to discuss the two Ministers.

MR. CHAIRMAN: Order, please. The Chair would rule for the advice of the Hon. Member that those words are a misprint. Therefore I would ask him to confine his remarks to the estimates before us of the Minister of Mines and Petroleum Resources.

MR. PHILLIPS: I would suggest then, Mr. Chairman, that not only are the estimates all out of whack but the titles aren't even right. So I don't know how we can intelligently discuss these estimates in this House, Mr. Chairman.

HON. D.G. COCKE (Minister of Health): You couldn't discuss anything intelligently if it were written in Holy Writ.

MR. PHILLIPS: Why don't you go fight your VD! (Laughter.)

MR. CHAIRMAN: Order, please! Would the Hon. Member either say something relevant to the Minister's administrative responsibilities or take his seat, please.

MR. PHILLIPS: Well, Mr. Chairman, I've had my estimate book since January, and I would suggest that if these estimates were in error, that these sheets would have been recalled and reprinted. So although you might try and advise me that....

MR. CHAIRMAN: Order, please! The Hon. Member, I would point out that we're discussing vote 174, and the Hon. Member has not made any point that there is any inaccuracy in vote 174. If he thinks there is an inaccuracy in the vote would he draw it to the attention of the committee?

MR. PHILLIPS: I think the Minister might be allowed to spend the money under his vote providing it's okayed by the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams). That's what I'm really saying, Mr. Chairman.

Now what really concerns me is the fact that this industry which has grown gradually and which has had growing pains through the years to a point where British Columbia had the best mining legislation of any jurisdiction in Canada, or indeed in North America or in the free world, has now at the hands of this incompetent Minister suffered a blow which it will take it years and years to recover from.

The reason I say this is that the Minister doesn't even understand his portfolio. I am saying it about you, and I'm saying it with great regret in my heart, Mr. Minister, because personally you're a nice guy. But when it comes to running a department as important to the economy of British Columbia as the Department of Mines and Petroleum Resources, you are an utter disaster!

I hate to say that, but it's a fact. Unfortunately, Mr. Chairman, the Minister realizes it in his own mind, that's why he's got this Lands, Forests and Water Resources over it, so when the whole thing collapses, he'll blame it onto him.

I hate to see the mess, Mr. Chairman, that is propagated around this province both by the Minister of Finance and the Minister of Mines, that our natural resources, particularly minerals, are being given away.

[ Page 2531 ]

This is the sort of a mess that your government, Mr. Chairman, has been trying to create in the minds of all the people of British Columbia, that we were giving our mineral resources away, that we were raping the land and that there were no benefits returning to the people of British Columbia.

This is an absolute myth. Anybody who knows the story and realizes the tax revenues and indirect tax revenues that are accruing to this province will realize just how large a myth this is. Now, Mr. Chairman, that Minister who adheres to a particular philosophy is able to expound on his philosophy and bring some of his philosophies into being strictly because of the buoyant economy of the Province of British Columbia, strictly because of the fantastic revenues that were left by the previous administration.

Now he hasn't even the foresight to realize what made this province so buoyant and where these tax dollars are coming from. First of all, let's get this myth out of our minds that a mineral which is unfound and in the earth is a natural resource, because it is not a natural resource in the same sense as we think of visible natural resources, and I refer to our lumber industry. You can see the trees, you replant them, and they grow. They are a renewable natural resource, but we can see them. Number 2 — minerals are not a natural resource in the same sense that the petroleum industry is. Because of the lay of the land, the petroleum industry lays in certain geographic stratas, right?

Interjection.

MR. PHILLIPS: Number 3 — a mineral is not a natural resource in the same sense as hydro power. Because we know the rivers are there, we know they have fantastic horsepower behind them, all we have to do is do a survey to find out where it is best to tap the horsepower in that particular river. It is not a natural resource in the same sense that agriculture is a natural resource. The reason that I'm telling you this, Mr. Chairman, is that a mineral until found is not known. (Laughter.) All right, well, go ahead and have your little chuckle. So the biggest part of the mining industry is the search and discovery for an unknown factor. What you are doing, Mr. Minister....

HON. MR. NIMSICK: What do you mean by the unknown factor?

MR. PHILLIPS: Well you don't know it's there until you find it....

AN HON. MEMBER: But it's there, though.

MR. PHILLIPS: Therefore, it's not really a natural resource because you don't know it's there, Mr. Chairman.

The only way we are going to find the true potential of our minerals is through searching for them. That, Mr. Chairman, is in essence what the Minister of Mines has effectively stopped since he became Minister. Once the mineral is found by a prospector, it still cannot be considered a natural resource until it is developed as a mine, because there are still many millions of dollars that must go into its development. Only when a mine comes on stream as a profitable venture is it really a natural resource.

So what you are doing, what the Minister of Mines is doing, is leaving those unknown natural resources in the ground. They will not be used for the benefit of future generations, nor will they be used for the benefit of this generation. If you want to check in the countries where your philosophy has been effectively applied to the mining industry, there is no viable mining industry in those countries today.

Mr. Chairman, last year during the Minister's estimates, or during debate on Bill 44, I stated that money spent on the exploration for minerals in this province would decrease. I made that prediction when I recognized the attitude of the Minister of Mines and the philosophy that he was going to apply to this very important industry. This is exactly what happened; the amount of money spent on the search, the exploration for minerals in this province is decreasing.

I also predicted last year during the Minister's estimates that the amount of money for the exploration for petroleum products would decline, and the Minister, and the Minister of Finance stood in this House and said: "No, no! You are all wet, you are all wrong. There's going to be more money spent on exploration and development in both mining and in petroleum."

When the facts were given to the Minister of Finance as late as last September, the Minister of Finance said: "Oh, that's just so much capitalist propaganda." Mr. Chairman, even when presented with the facts of what was happening in this very important industry in our province, they wouldn't believe the facts, because they are blind to the direction that they were taking.

I said last year during the debate on Bill 44 that the Minister was being given too much discretionary power, and this is where it hits the mining industry hardest, because that Minister has the power not to make decisions once a mine is discovered.

This is the main reason, Mr. Chairman, that the millions and millions of dollars that should be pouring into the search and exploration for new minerals in this province is not being spent. Mr. Chairman, the complete responsibility rests on the shoulders of that Minister of Mines, that's why he has failed, horribly failed in his responsibility to the people of British Columbia.

[ Page 2532 ]

He says in his glossy statements that the natural resources of this province are going to benefit the people of this province. Unfortunately, Mr. Chairman, this Minister is blind to reason, and I feel, Mr. Chairman, he's being hoodwinked by his assistant, Mr. Horne.

HON. MR. NIMSICK: I haven't got an assistant.

MR. PHILLIPS: What is Mr. Horne?

HON. MR. NIMSICK: He's not my assistant.

MR. CHAIRMAN: Order, please! If the Hon. Minister wishes to make a correction, would he rise on a point of order?

MR. PHILLIPS: Yes, would you rise on your feet and make a correction? I'd like to know where Mr. Horne is. If he's not an assistant, he's your adviser. If he's not your adviser, he's running the department, then.

MR. CHABOT: He gives you odd jobs, though. (Laughter.)

MR. PHILLIPS: Well, this gentleman, who is Chief of Mineral Revenue, Mr. Chairman...

HON. MR. NIMSICK: Now you woke up.

MR. PHILLIPS: ...is really running the Department of Mines. He has hoodwinked the Minister because he's made him blind to reason. Mr. Chairman, the Minister of Mines did not sign the Waffle Manifesto. But the Minister of Mines' policies are right on course when it comes to the tenets of the Waffle Manifesto. Mr. Chairman, this is no laughing matter. This is a very serious matter.

HON. MR. NIMSICK: Maybe I helped to draw it up.

MR. PHILLIPS: I want to tell you, Mr. Chairman, just a few moments ago we were discussing the price of copper. I want for just a moment to ask the House why the price of copper is so high in today's market. No policy as yet by the socialist government has increased the price of copper, but I want to tell you, Mr. Chairman, it's the policies of socialist governments in other countries that have curtailed the production of copper in those countries, that have created an artificial scarcity of copper on the world market that has shoved up the price of copper, and it's affecting every person in Canada and every person in British Columbia and every person in the free world. So you create an artificial shortage, you shove up the price and you halve the very people that you say your policies are going to help.

The Minister said, Mr. Chairman, a little while ago that this department had taken on new importance since the socialists came to power and his department now was one of the great departments. Well I ask, Mr. Chairman, that if the Minister and his department have taken on such great importance in that socialist government, why isn't the Minister of Mines in Japan? Why didn't the Minister of Mines go with his very important portfolio to see his customers?

HON. MR. NIMSICK: I have more important work here to do. (Laughter.)

MR. PHILLIPS: In other words, I derive from that, Mr. Chairman, that playing rugby in Japan is not as important as staying in this Legislature and looking after the people's business! I understand from the Minister's statement that he has more important work to do here, that it is more important to attend to the people's business in British Columbia than it is to go after some airy-fairy, elusive steel industry in Japan.

I'm very sorry, Mr. Chairman, to see a Minister of the cabinet, who has been a working co-politician with the Premier as long as the Minister of Mines has been, make such a vicious attack (Laughter) on that Premier in his absence.

MR. CHAIRMAN: Order, please! Would the Hon. Member try to confine his remarks to the administrative responsibilities of the Minister?

MR. PHILLIPS: Well, Mr. Chairman, I feel that it is well within the administrative responsibilities of this Minister to seek out new markets and to pay attention to his present customers — and he certainly has many customers in Japan. He sells a lot of coal there, he sells a lot of copper there. And I fail to realize where the Minister has taken on this great importance that he was talking about or where his portfolio has taken on this great importance.

I want to tell you, Mr. Chairman, that just the entire opposite is the truth. He was told when he became Minister of Mines: "Kill the industry, and we'll take it over." Now, that may be a very important job that he has to do. That's the importance of it, because if he wanted the industry to grow he would have travelled to Japan, Mr. Chairman. He would have travelled elsewhere to seek out new industry.

Mr. Chairman, the Minister told us in the Legislature this afternoon that he wanted to see a copper smelter in British Columbia, and half of our production in the mining industry is copper. How much iron ore do we produce? Who goes to Japan looking for a steel smelter when we don't produce any iron ore? But half of our mineral production is copper.

[ Page 2533 ]

HON. MR. NIMSICK: Talk to him when he comes back.

MR. PHILLIPS: The Minister says he wants a copper smelter. Why didn't the Minister of Mines go to Japan?

HON. MR. NIMSICK: We can look after the copper smelter — we don't have to have Japs.

MR. PHILLIPS: Oh, you're going to look after a copper smelter.

MR. CHABOT: They haven't done it so far.

MR. PHILLIPS: Is that a policy statement?

Interjections.

MR. CHAIRMAN: Order, please! Would the Hon. Minister not speak from his seat please, but rather rise and use his microphone when his turn arises?

MR. PHILLIPS: Mr. Chairman, the Minister of Mines said that he didn't need the Japs, which I feel is a slur against one of our greatest trading partners. That's why they won't go on a steel mill and that's why they won't be co-partners with you on a copper smelter, if that's your attitude. That's a vicious attack against one of our greatest trading partners.

AN HON. MEMBER: There go the Datsuns.

MR. PHILLIPS: Mr. Chairman, some of the statements this Minister has made this far this afternoon is why this Minister is incompetent and should be replaced, if that's his attitude. Here the government, Mr. Chairman, is thinking of establishing a British Columbia House in Tokyo, and the Minister of Mines says we don't need the Japs. I'll tell you...!

HON. MR. NIMSICK: On a point of order, Mr. Chairman, I said that we didn't need the Japanese to build a copper smelter for us. We can do it ourselves.

AN HON. MEMBER: That's not what you said, and you know it.

MR. CHAIRMAN: On the point of order, the Hon. Minister is entitled to correct his remarks and these should be accepted prima facie by the Members of the House.

MR. PHILLIPS: I think, Mr. Chairman, that regardless of what he says, we got the message on this side of the House regarding his attitude towards that great trading nation, the Japanese people, who are industrious and courageous and have more foresight than our government's got, I'll tell you.

Mr. Chairman, if the decisions that are going to be made in the Department of Mines were going to be made by the Minister, I would be concerned. But the decisions that are going to be made — whether a mine will come into production, how much taxes he will take on it — are not going to be made by the Minister. It's going to be made by the man in charge of revenue — the man who actually runs the department. That's what has the total mining industry in British Columbia scared stiff, and I want to tell you, Mr. Chairman, they are scared stiff.

This goes for all of the small people in this province who rely on the spin-off industries and the mining industries. They are scared. They are frightened of their livelihood, because already, Mr. Chairman, many of the small manufacturing companies who manufacture materials and machinery for the mining industry have no contract. They have no future, Mr. Chairman. Many of the geologists, consultants, engineers ... As it stands today in British Columbia, Mr. Chairman, these people have no future.

Mr. Chairman, the amount of money that is being spent on exploration did decline last year. The forecast for 1974 is less than bleak. There is no pre-planning. Those moneys only which were committed years ago, Mr. Chairman, will be spent this year. That searching out of those natural resources which we don't yet know about will not take place. Never, as long as this socialist government is in power, will we know the true potential of our minerals in British Columbia.

It may be, Mr. Chairman, by takeover tactics on behalf of this socialist government, that some of the known mines may be developed. But since that Minister came to power, Mr. Chairman, there has not been one single new mine opened in the Province of British Columbia.

Last year the Minister of Mines was buoyant, he was enthusiastic, as he looked into — exuberant, yes — as he looked into his crystal ball, saying what great heights the mining industry in British Columbia would attain.

This year, Mr. Chairman, the Minister knows that it must have been somebody else putting reflections of rainbows in that crystal ball, because they faded, and the pot of gold that he thought would be at the end of his policies has disappeared.

Interjection.

MR. PHILLIPS: Well, it sounds to me like there's ticker tape down there that should be shut off.

Mr. Chairman, when I predicted last year what would happen, I did a great deal of research and tried to use common, ordinary sense of what had happened

[ Page 2534 ]

in other jurisdictions. But the Minister continued on his blind way, led or pushed by his cabinet colleagues who had signed the Waffle Manifesto — who want to take over the mining industry.

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. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.