[ Page 3719 ]

CONTENTS

Routine proceedings

Blind Persons' Rights Act (Bill 72). Report and third reading — 3719

Metric Conversion Act (Bill 80). Report and third reading — 3719

Islands Trust Act (Bill 112). Report and third reading.

Amendment to postpone third reading.

Mr. Curtis — 3719

Mr. Fraser — 3719

Mr. L.A. Williams — 3719

Hon. Mr. Lorimer — 3719

Mr. Morrison — 3719

Mr. Liden — 3720

Division on amendment — 3720

Division on third reading — 3720

Succession Duty Amendment Act, 1974 (Bill 12). Second reading.

Mrs. Jordan — 3720

Mr. McGeer — 3722

Hon. Mr. Barrett — 3722

Mr. L.A. Williams — 3723

Division on second reading — 3724

Mineral Royalties Act (Bill 31). Second reading.

Amendment to postpone second reading.

Mr. Gibson — 3724

Mr. Smith — 3727

Division on motion to adjourn debate — 3731

Mr. Wallace — 3731

Motion to adjourn debate — 3735

Mr. Speaker rules out of order — 3736

TUESDAY, JUNE 4, 1974

The House met at 8:30 p.m.

Introduction of bills.

Orders of the day.

HON. D. BARRETT (Premier): Public bills and orders — report on Bill 72, Mr. Speaker.

BLIND PERSONS' RIGHTS ACT

Bill 72 read a third time and passed.

HON. MR. BARRETT: Report on Bill 80.

METRIC CONVERSION ACT

Bill 80 read a third time and passed.

HON. MR. BARRETT: Report on Bill 112, Mr. Speaker.

ISLANDS TRUST ACT

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, I move an amendment that the motion proposed by the Minister of Municipal Affairs (Hon. Mr. Lorimer) be amended by deleting the word "now" and substituting therefore the words "six months hence."

Speaking very briefly, Mr. Speaker, the amendment is proposed because of two principal factors: first, the inadequacies of the bill as presently drawn by the Minister of Municipal Affairs with respect to a Gulf Islands trust; secondly, the rather surprising refusal of the Minister to act on many excellent suggestions which were — proposed to him, not by Members of the opposition, but rather by a group of electoral-area regional district directors, within whose areas of jurisdiction a number of the islands concerned are to be found.

I think it's regrettable that the Minister chose to overlook those amendments which were very carefully considered and proposed to him well before third reading.

MR. A.V. FRASER (Cariboo): I just say on behalf of our party that we certainly will support this amendment because of the fact that government appointees on the trust are in the majority as related to the local people, and, in effect, a centralization of things in Victoria. We don't buy that one little bit; we think the local people should be in the majority and for that reason we'll be supporting this amendment.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Mr. Speaker, we too will support this amendment for the reasons already enunciated by the Member for Saanich and the Islands and the Member for Cariboo. Additionally, because it is with regret that I find the full consequences of this particular legislation are just coming home to those people who are both residents and property owners on the islands who are affected by the islands trust.

I believe that some delay in the implementation of this legislation will serve an opportunity for the Minister to be advised as to the legitimate concerns of these individuals and to have the opportunity of considering possible amendments to the legislation before the islands trust itself is originally established.

There's no question that the thrust of the bill, which is to destroy the influences of local initiative, has already been debated. But what is surprising is to find that the complications of the relationship between these islands and those areas on Vancouver Island and on the mainland, with which they are inexorably joined, have somehow or other missed the Minister in his draftsmanship of this legislation. The authority of the electoral area directors, the involvement of islands within the regional district, have somehow or other eluded the Minister in the way in which he has established the islands trust, the authority of the general trustees and the authority of the local trustees.

I suspect that in six months responsible representations, not designed to destroy the concept of this legislation but to improve it, will come forward to the Minister and he will have, after that period of time, an opportunity of establishing an islands trust which does what he has in mind, what the Select Standing Committee on Municipal Affairs had in mind and what the residents and property owners on the islands involved have in mind as well, and that we will produce legislation which will be a major step forward in the preservation, conservation and future development of these segments of our province which, as the legislation indicates, have unique qualities.

HON. J.G. LORIMER (Minister of Municipal Affairs): Mr. Speaker, I have no intention of redebating the bill, but I would just point out that we did have a meeting with the representatives from the regional districts for some time. We spent a great deal seeing what could be done to put into legislation some of their requests.

However, it must be remembered that the regional districts themselves were not in agreement with what should be changed. By and large, the regional districts have different views as to what sections needed alterations, or what should have alteration, I might say that I have no fears about this bill at all; it's good legislation and the people on the islands will be very, very happy with it.

MR. N.R. MORRISON (Victoria): Mr. Speaker, I

[ Page 3720 ]

rise to support the amendment. I believe that the people on the islands would like to have time to analyse the effects of this bill. I think it would allow those people time to realize the implications of this bill, and it would allow those people who are non-residents, but perhaps summer residents, time to discuss with the people who live there permanently what the implications of this bill are. I fully support this amendment.

MR. C. LIDEN (Delta): Mr. Speaker, it seems the debate had really taken place already more than once on this whole matter, but this bill provides for more representation by the island people than they ever had before. It provides for the opportunity for more input by the island people than they've ever had before. We've gone through four years of a 10-acre freeze on the islands. Everyone wants to see that lifted; everyone wants to see a new direction found for the islands, and some sort of mechanism set up to carry that out.

It seems to me that the attention that's been needed on the islands can come from this legislation, from the islands trust. It seems that, really, it doesn't matter how long you try and hoist it, not everyone will agree on the detail of this kind of legislation. But in my view it's the basis on which we can solve the problems which face the Gulf Islands, and I'm in support of the original motion, that it be adopted now, and I'm against the amendment.

Amendment negatived on the following division:

YEAS — 10

NAYS — 35

MR. SPEAKER: We now have the question on the motion for third reading of Bill 112.

Bill 112, Islands Trust Act, read a third time and passed on the following division:

YEAS — 35

NAYS — 10

HON. MR. BARRETT: Adjourned debate on second reading of Bill 12, Mr. Speaker.

SUCCESSION DUTY AMENDMENT ACT, 1974

(continued)

MRS. P.J. JORDAN (North Okanagan): Mr. Speaker, at the time of the last debate I had almost concluded my remarks when the Premier made his rather unseemly and hasty indication that he wished to vacate these chambers. I adjourned the debate. I would just like to sum up at this time. The federal government has brought in a capital gains tax which leaves the people in Canada and, in this instance, in British Columbia in a position where they can no longer benefit from untaxed profits, and no longer is any British Columbia family in a position where they can benefit from windfall profits. Every investment and every capital asset that a British Columbia family has today, with particular reference, Mr. Speaker, to the relationship and the acquisitions between husband and wife, is acquired by sacrifice on their part, by energy and resourcefulness on their part, by diligent saving on their part, and by, if not shrewd, indeed thoughtful investment on their part.

At the time of the decease of one member of this relationship between husband and wife, where the assets have been achieved in spite or above federal and provincial taxation on income and capital gains, for this government to continue a programme of taxation of these assets at the death of one partner amounts to nothing short of double taxation.

It also has an emotional factor. The state intrudes in the relationship between husband and wife by

[ Page 3721 ]

insisting that they designate for estate tax purposes what is yours and what you have contributed to the marriage and the benefits of this marriage and what is mine and what I have contributed to the benefits of this marriage.

Mr. Speaker, I suggest that there is not only double taxation as long as this government persists in taxing the estates of widows and widowers between husband and wife but the state is intruding into the emotional relationship with a divisive force between husband and wife. In my view the government should be collecting taxes from the living, not from the dead. In essence, this leaves the government in the position where they are little short of being hearse followers.

Once again, I ask the Premier and the Minister of Finance of the province to remove estate taxes between husband and wife in the Province of British Columbia.

I have suggested before myself — and I will review it at this moment in this debate because it is a new debate — that, where there are massive fortunes involved, this money is leaving British Columbia if it has not already left British Columbia. That which remains in a large quantity is in a position where the family can utilize on an income-tax-deductible basis, the most proficient legal tax advice and the most proficient accounting advice in order to offer the greatest benefits to the family. But the average family in British Columbia can amass an estate quite easily over a lifetime with inflated and inflationary values greater than what the tax exemptions allow.

They are at a disadvantage in not being able to take advantage of corporate tax and legal advice in estate planning, or accounting advice for estate planning, and certainly not on an income tax deductible basis.

I submit to you, Mr. Speaker, that on the basis of the present tax situation, it amounts to the state of British Columbia advising families as to how they should invest, because the tax-free exemptions involve so much — for example, $25,000 in stocks and bonds exemptions, so much for the home and so much for other assets.

If a husband and wife have built a business between them, that business, as I have found through discussing this with a number of people who have been involved in this situation, is taxed by this government at its previous year's capital assets value. Its stock is taxed on the basis of its purchase price, although many months have elapsed, and although that stock may no longer command that return in the marketplace.

We have many situations in British Columbia where a widow or a widower are left with the business that, in essence, is worth approximately $80,000 to $100,000, but on the basis of its capital purchase and the assessment by the government, is taxed on the basis of $150,000. to $200,000. This taxation has left the widow in a position where she not only has to try and sell at fire-sale prices, but the taxes on the estate have left her in a position where she can no longer meet her own needs.

It is my feeling, and the feeling of this party, that where a husband and wife have worked together and duly paid their taxes, and one of the partners is lost and the income ability from that partner is lost, the other partner should not be forced by the state to a lower family living existence.

If we take the inflationary situation in all of Canada today, Mr. Speaker, and certainly in British Columbia, a tax which might well seem reasonable today, leaving assets to a widow or widower today that might seem reasonable, in two or three years may leave that beneficiary in a position where they have to become dependent upon the state for their daily living.

With this in mind I suggest again through double taxation now that there is a capital gains tax, that the state has no right to force a surviving partner into the position where through taxation they can no longer enjoy a reasonable standard of living and they must, through inflation and the erosion of their investment ability and assets, become dependent on that state.

I would urge the Premier and Minister of Finance again, through you, Mr. Speaker, not to wax around an issue of motherhood that is not realistic, that in trying to defend the rights of a widow or a widower, an equal partnership in a marriage, in a unity, in a society that recognizes the right of women and men to work to achieve on an equal basis, not to suggest that in defending their right to maintain their legally taxed assets that I am defending the rich, because this is not my position.

But I do stand here, Mr. Speaker, to defend the right of a couple, through marriage or through unity, to maintain their assets and maintain a reasonable standard of living, and not to suffer double taxation through death of one or the other of the partners. I would be the first to stand in this House and stand publicly in British Columbia to commend the Minister of Finance of this province if he would recognize the situation as it exists and acknowledge this right, and not let the state become a divisive force on an emotional basis in a marriage in terms of forcing partners to define, tax wise and legally, what is yours and what is mine.

I know the Premier of this province and the Minister of Finance has spent a good deal of his life in social work. He has often spoken of the need of marriage counselling, the need for maturity in marriage, and maturity in a relationship between a man and a woman. I really feel, Mr. Speaker, that if he sat down and thought about this, he would indeed acknowledge that this is a legitimate point, that it is a legitimate position for husband and wife to enjoy their benefits mutually on a common ground, and to

[ Page 3722 ]

utilize those benefits when one of the partners is lost, without double taxation.

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Chairman, I think the Member for North Okanagan had some excellent points. I think double taxation is unfair, but I wonder where the Member was in 1967, In 1968, in 1969 and 1970, because these were times when exactly the same points were made to the Minister of Finance and to the Member when she sat in the cabinet.

I will say this for the NDP: they have been consistent right down the line; they believe in double taxation. I have never believed in double taxation. At least we haven't taken a flip-flop. At least we didn't defend this when we were in government…. We have never been in government. (Laughter.) But to stand around and criticize the very thing you stood for when you had responsibility, to my way of thinking, is incredible hypocrisy.

I support the Member now, that double taxation is unfair. But what I can't understand is how somebody could stand up in this House and say these things in opposition, and defend exactly the opposite time after time after time in government.

I hope that when the New Democratic Party is in opposition, which won't be very far away, that at least they will maintain a consistent posture.

HON. MR. BARRETT: Mr. Speaker, I am still not sure of two things: (1) whether or not the opposition parties are going to vote against this bill — that's one. And it is hard for me to debate when I have difficulty cutting through confusion. I understand there is a certain term relating to religious practices called glossalilliola that is known as speaking in tongues. Some of the Members who are not Wesleyans or others would understand this fundamental analysis of a certain response to religious feeling. This Member displays it in the sense of money; when it comes to money it's mmmlub-ablub-amblub because we still don't know what position she has taken on this bill. I will come back to her illogic in a moment.

Now I want to come to the former leader of the Liberal Party (Mr. McGeer). I ask him, as a neurosurgeon, not to pose the question to this House, "How could anybody be so hypocritical?" because you know very well, through you, Mr. Speaker, that science and politics are two different things. When you come in here and ask for logic, you are asking for your own party to be rational, and that is being threatening to one's own self, let alone the rest of the Members of this House.

Now we don't know what they are voting against, or whether they are voting for this bill.

MRS. JORDAN: Everything bothers you, doesn't it?

HON. MR. BARRETT: We are going to get an opportunity tonight to put on the record for all the people….

Interjections.

HON. MR. BARRETT: I didn't want to do this in terms of getting this on the record, but, Mr. Speaker, tonight we will get an opportunity to put on the record exactly how they are going to vote on this bill.

What is this bill all about? For those of you who may be confused that the socialists are attempting to interfere with the relationship between husband and wife, I have known no widows who still commune with their husbands through their banker, once he is dead.

I know no widows who are able to communicate and discuss with their husbands their close relationship, once the poor fellow is gone. The only ones who come back are politicians. The only people who reach out of the grave are politicians. When politicians are dead they attempt to anoint their sons through the lily. (Laughter.) And that is their problem.

Other than that, when we come to the matter of taxation we're not interfering with the relationship, because death has ended that relationship. Politicians don't learn this, but nature has a way of proving it.

Now, what are we talking about? The pea has been given, and I wan a tear — at least a handkerchief. The plea has been given by that Member that somehow we are hurting the little people of this province. What does this bill do?

First of all, it is extending the category of special beneficiaries of succession duty, Mr. Speaker. The hard-hearted Social Credit government, when they were in power and passed this original bill, had a very strict definition of "special beneficiary" which that Member voted for. She's on record as having narrowed the definition of "special beneficiary" when she sat down here on these benches.

MRS. JORDAN: There wasn't a capital gains tax.

HON. MR. BARRETT: There wasn't brains to your speech. There wasn't any logic to your speech. Now tonight we'll find out how you are going to vote.

What does this say, Mr. Speaker? It says that a widow who has $150,000 in cash — assets or property — is not going to be taxed. Now will all those widows who are poverty-struck at the $150,000 level please write me a letter? I will tell them, as a social worker, how many widows I know who are under the $150,000 mark who would live to be in that poverty-struck category of over $150,000.

MRS. JORDAN: Make everybody poor.

[ Page 3723 ]

HON. MR. BARRETT: No…. Make everybody poor! We would like to make everybody rich, Madam Member. That's the difference between us and you. We would like to share the wealth of this great country. How do the wealthy get wealthy? Hard work — very good; application of capital — very good; ernest effort — very good; also a little bit of luck, good fortune, happiness. And some of them are very wise to choose their parents well.

Inheritance is a factor in people getting wealthy. If my mommy and daddy were rich, and my mommy and daddy would love me as much as I love them — even more if they were rich — then I would do well by my mommy and daddy. But many people don't have rich mommies and daddies.

AN HON. MEMBER: Right!

MRS. JORDAN: Cynic! (Laughter.)

AN HON. MEMBER: Why don't you quit while you are behind? (Laughter.)

HON. MR. BARRETT: Cynic! Well, I've been accused of a lot of things, Mr. Speaker.

But anyway, coming back to this $150,000 exemption. When we came into power, all that the Socreds allowed for this special beneficiary group were the wife, the father, the mother, the grandfather, child, grandchild, son-in-law, daughter-in-law. Now we want to add the grandchildren.

We want to give the special beneficiary category to the grandchildren. That's what this bill is doing. We're not against grandchildren. We love grandchildren. Now if she votes against this bill, she's voting against grandchildren. (Laughter.)

Interjections.

AN HON. MEMBER: Great-grandchildren.

HON. MR. BARRETT: Great-grandchildren. Not only that, she'll be against great-grandchildren.

MRS. JORDAN: Against what grandchildren?

HON. MR. BARRETT: Great-grandchildren, Madam. Great-grandchildren — something that this government loves very, very much. (Laughter.) The great-grandchildren of the rich are receiving the concern of the socialists tonight through this bill, and that's why we want this exemption.

The bill also proposes, Mr. Speaker, to benefit small estates by allowing custody of the property of the estate to be obtained without the necessity of probate for administration where the gross value of the estate is under $5,000 instead of $2,000, which is the present limit. That makes sense.

MRS. JORDAN: Big deal!

HON. MR. BARRETT: This means that small estates do not have to be processed through the courts. It's a good move. Both are good amendments. Now I notice, Mr. Speaker, as [illegible] has sifted forth, more and more Members of the Social Credit Party have taken advantage of the opportunity of slipping out of the House rather than being caught in their seats voting against this bill, which in effect….

HON. G.R. LEA (Minister of Highways): Doesn't affect him. (Laughter.)

HON. MR. BARRETT: Only a millionaire really knows, Mr. Speaker, the effect of this bill. And I don't want to name any names.

This is a progressive step. But after hearing that Member speak, I wonder if we should withdraw the bill and tighten the screws down the other way.

I want to say very seriously that anybody who lives in this beautiful province should prosper. I hope they prosper and I hope they do well; but anybody who lives in this province has an obligation to ensure that others in this province also benefit from wealth.

The accumulation of wealth is not taken into the next world, Mr. Speaker. The Succession Duty Act, as presented by the former Premier (Hon. Mr. Bennett), was supported by us when we were in opposition. And only in an act of desperation did the former Premier say he was opposed to a succession duty. He announced that change of Social Credit policy at the time he was in Kelowna when he announced the Kelowna Charter.

I want to tell you this: that single charter lost him more votes than gained him votes because, unfortunately, still to this day, there are more poor and there are more middle-income people in this province than there are wealthy.

This is a fair tax. If there is any threat that some wealthy people will run away from the Province of British Columbia to escape this tax, I say shame on them. I say shame on them!

It's like the CPR when they take their boats down and register them in Liberia to avoid Canadian taxes. That's immoral, in my opinion. It's unethical and it's a lack of sense of duty as a citizen. If anybody wants to leave this province and behave like the CPR, let them go, But this is fair, and the exemptions are fair, and this bill is widening those exemptions.

I now move second reading, Mr. Speaker.

MR. L.A. WILLIAMS: A point of order, Mr. Speaker.

I appreciate that the Hon. Minister of Finance has moved second reading, but when we debated this

[ Page 3724 ]

matter many, many days ago, I raised with him the question of whether there were not other relationships equal of consideration as well as those of blood relationships. I wonder if the Minister has any comment to make on that.

HON. MR. BARRETT: Well, in committee stage, Mr. Member.

Motion approved unanimously on a division.

Bill 12, Succession Duty Amendment Act, 1974, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, adjourned debate on second reading of Bill 31.

MINERAL ROYALTIES ACT

(continued)

On the amendment.

MR. G.F. GIBSON (North Vancouver–Capilano): There's something about Tuesday where there's Bill 31, Mr. Speaker. It was introduced on a Tuesday, which became known as Black Tuesday, and it was called for second reading last Tuesday. Here we are on another Tuesday getting back to this depressing bill.

I'm going to speak rather closely to the amendment tonight, the amendment being that it be hoisted for a period of six months and the reasons why that would be a good idea, with the intention of going into more extensive remarks when we get back to the main motion. But at this point there are a few reasons to be cited as to why it would be a good thing to hoist the bill for six months.

The first reason, it seems to me, is that the government is manifestly unprepared on this bill. The bill is not only very badly drafted, as will become very clear in committee session, but the Minister doesn't even yet have ready — because I inspected the order paper tonight and it's not there — a very consequential amendment which he foreshadowed in his opening remarks would be available to this House.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): I'd spoil half your speech if I did.

MR. GIBSON: Oh, Mr. Minister, you wouldn't spoil my speech. Even after that amendment — which is an important one if it's what I think you're going to do — the principle of the bill is still wrong. It doesn't change it one little bit. Maybe it makes the speech a little longer; that's the only difference.

Interjection.

MR. GIBSON: But the first reason for hoisting it six months, in other words, Mr. Speaker, is that the government needs six months to fix that bill up. It's so badly drafted, probably by the man who is now a campaign manager for a federal NDP candidate, which is something that's very wrong.

HON. MR. NIMSICK: You're wrong.

MR. GIBSON: That's incorrect? That newspaper report, Mr. Minister? Thank goodness that's wrong. I was very concerned about the integrity of the civil service when that question was asked today. I'm delighted you can report that to the House.

But they're going to need six months to fix it up to start with.

Now, the second thing is that the government doesn't understand the bill. If you don't understand the bill you shouldn't introduce it. It's manifest from the Minister's remarks on second reading that he doesn't understand the bill. I'm not going to go through all of them now; I'll just refer to a very few of them.

Listen to this, he says:

If we assume no further discovery or technological progress, today's copper, lead and zinc resource would probably not last through the century.

Mr. Speaker, that is a statement that shows complete misunderstanding or our resource base in this world. The Minister must know, if he has been keeping up with his field…. He read a book on copper that he referred me to in the House and I'm going to try and get that book and read it, Mr. Minister. But there are other things you should maybe be reading. The fact that there's a 1,000-year supply of copper for this world on the floor of the Pacific Ocean just waiting to be scooped up. That's not going to run out by the end of the century.

HON. MR. NIMSICK: You wouldn't exaggerate it at all, would you?

MR. GIBSON: I try not to exaggerate, Mr. Minister. As a matter of fact, I'll read the specific facts on that into the record when we get on second reading.

Going on through the Minister's comments, he didn't say a great deal before 6 o'clock on that particular date. But he did say this. He said:

To say to the public that we must deplete this natural resource for the sake of employment is not valid.

That again shows lack of understanding and a reason for further study by this government for six months. I don't think the Minister really realizes that there are 15,000 men employed in this industry and 50,000 beyond that in the indirect effect. Beyond that, that

[ Page 3725 ]

is what underpins the economy of this whole province in at least 20 to 25 per cent of our economy. Again, I'll have more to say on that later, but it shows that he doesn't understand the bill.

Interjection.

MR. GIBSON: He needs six months to study this, Mr. Speaker….

Interjection.

MR. GIBSON: He said again, in response to an interjection, which is not exactly noted in the Blues, that it was never lost; it was always there. He was referring, of course, to the mineral and the fact that mineral will be lost if Bill 31 is passed.

HON. MR. NIMSICK: No, that Member over there said, "Did we find it?” and I said it was never lost.

MR. GIBSON: But the point is, I'd say to that Minister: try and get some employment out of that "not lost" stuff. It's not good enough just to have "not lost"; you have to have it "found." Again, we'll return to that argument later on, but it's a demonstration of how this whole bill is founded on improper basics that have to be studied more.

The Minister goes on to say that in private company dealings usually there's a royalty, not a share of the profit. Mr. Minister, that's just not correct either and I'm going to quote chapter and verse on that when we get into the main part of second reading.

He said in justification of his 2.5 and 5 per cent royalties - those are the little royalties, Mr. Speaker — that the industry was satisfied with this. That's when they came back to him with a proposal. He put a gun to their head and said, "You go away and come back with a proposal that is a royalty because I don't want any other kind of proposal than a royalty." In other words, he told them to go away and say what they were satisfied with when they came back.

Then he said — and I want to quote very specifically:

The only time you may have to leave ore in the ground is if the price of copper comes down to around that figure.

By that figure he means the cutoff price. He says,

The 2.5 per cent and 5 per cent are the only figures that could leave a little bit more ore in the ground.

Mr. Speaker, that admission will be used a great deal later on in this debate, that this bill leave some ore in the ground, and it's not just those figures that do it.

He said other things I agree with: higher revenues are required from the industry and so on. I'll agree with him on that. In times of great profits, it's right that the public should get more out of that industry. But the way it happens is very, very important.

He closed his speech by saying,

What's the difference in that tax on the oil than the incremental royalty in regard to the minerals? No difference.

Once again it shows that this whole bill needs reconsideration for six months because it's founded on a basically wrong premise. He has to understand that oil is different than hardrock mineral out of the ground.

Oil is a relatively homogeneous commodity that's there. You know how much it is and you just pump it up, as long as your recovery costs don't exceed your sales price once you've found it. Ore is very different from that. Ore tapers off.

Also, that export tax he was referring to at that point was a price-control measure. I take it the Minister would agree with it because it was a price-control measure — but not particularly because of its economic effects — and finally, was a temporary measure.

So that's all I'll say on that subject at this point, Mr., Speaker: just to make the point that the government needs more time to understand this bill. Certainly the Minister of Highways (Hon. Mr. Lea) needs more time to understand this bill. I'll quote from a piece of paper he has been sending out around his riding.

The Minister of Lands, Forests and Water Resources maybe needs more time to understand this bill, too, or at least to understand the mining industry. Up in the Interior he was quoting the exorbitant profits of the mining industry. He went through a long list of mines, Mr. Speaker, and he referred to the $50 million profits at Gibraltar Mines. Then he went on, Mr. Speaker, to talk of the $70 million profit of Placer Development. Doesn't that Minister know, Mr. Speaker, that over 70 per cent of Gibraltar Mines is owned by Placer Development and that their profit is reflected in Placer's profit?

There is a widespread ignorance of this industry on the government side of the House that needs at least six months' straightening up.

Interjection.

MR. GIBSON: I didn't quite hear the interjection, Mr. Speaker. The Minister may want to take part in this debate because there is another point in his department that shows that the government is confused on royalties in his Bill 117 which he introduced yesterday and which comes directly from a report that said straight flat royalties are a pernicious form of taxation and he has gone to an appraised royalty system for the forest industry — even for the forest industry. It is a much more necessary thing in the mining industry that costs be

[ Page 3726 ]

taken into account.

The next reason for a six-month hoist, Mr. Speaker, is the need for a committee study of the subject matter of this bill, which is intensely complex. There is expert testimony that should be brought before a committee of this House that will have to be brought to this House during debate on second reading if it isn't brought in the committee. That will be very, very lengthy. I would suggest that the government could save itself a lot of time by yielding to this six-month hoist and sending the subject matter to a committee for study in the meantime. To me it is a sensible argument.

The next reason for a six-month hoist is an advertisement that appeared recently in The Vancouver Sun of June 1:

"The Government of British Columbia copper task force.

"A task force has been appointed to inquire into various facets of British Columbia's copper mining industry. This task force is to see what are the best ways and means of getting processing of copper in this province."

Yet, Mr. Speaker, this bill makes a provision for how that should be done. It makes an outrageously inadequate provision, but it does make some provision for the processing of copper in this province. That provision should be amended and upgraded. It certainly will be, if this copper task force does its job and reports correctly. The bill shouldn't be read until that task force has reported.

The next reason this bill should be hoisted, Mr. Speaker…. It is perhaps not my business to show sympathy for the government backbenchers, but they need more time to get reaction from their constituents. The Hon. Member for Omineca (Mr. Kelly) got some reaction from his constituents and it sounded pretty shocking. The Hon. Member for Atlin (Mr. Calder), whose total votes were some 640 last time, is faced with a petition of over 1,000 signatures out of his riding against that bill. I'll go around this province on second reading, Mr. Speaker, and describe the difficulty that some of these Members might have. I just want to keep their interests at heart to that extent, just to make sure that they understand it.

Interjections.

MR. GIBSON: More next time, Mr. Minister. I have one of the newsletters the Minister sent out. I'll be quoting that, too.

The next reason, and one of the very important ones, that this should be hoisted for six months, Mr. Speaker, is that surely federal-provincial tax relations in this country are at a new low at this stage. Governments should talk first. Both the federal and the provincial government should talk first before deeply invading the other's tax jurisdiction.

You know what I think, Mr. Speaker? I think the government has no intention whatsoever of proclaiming this bill. I don't know if the Premier has told the Minister that yet. I think that this bill is a bargaining counter — a bargaining counter to use with the federal government and say now we have carved out this jurisdiction and don't you dare step in here. As I said the other night, I'm a British Columbian; I wish the Premier luck in carving out as much of that jurisdiction as he can for the people of this province. But I am suggesting that this is maybe the wrong way to go about that kind of bargaining.

Is the Minister going to tell us when it will be proclaimed if it is passed? Say it is passed a couple of weeks from now, Mr. Minister, after thorough debate. We'll see. I suggest, Mr. Speaker, that it is not going to be proclaimed. It's a bargaining tool. That is an item that would be solved in that six-month interval, after that federal election and after the time for the governments to sit down and talk, as they sensibly should, rather than destroying a lot of jobs by taxation confrontation.

The next reason that the bill should be hoisted is that the government does need time to study its effects. Some of its effects are already becoming apparent but the Minister and the government have been choosing to ignore them so far.

To you, Mr. Minister, through the Speaker, exploration is virtually dead in the Province of British Columbia. You know that. You know that those thousands of jobs that are normally heading out into the hills at this time aren't going out into British Columbia; they are going up into the Yukon and the Northwest Territories and other parts of this country and outside of this country. That will become increasingly apparent as this year goes by. Six months from now, believe me, Mr. Speaker, this government would choose not to go ahead with the reading of this bill because the effects would be so apparent.

Somebody mentioned earlier on that the money would be gone. If that was all, that's one thing because money can come back. But, Mr. Speaker, the people are leaving. The mine-finding team in the province, that took a generation to build up, are leaving British Columbia now. That's why I plead with the Minister to hold this bill for another six months so he can see the pattern developing and then pull it back.

HON. MR. NIMSICK: I don't think you mean it.

MR. GIBSON: Pull it back before it's too late so that you don't lock yourself in, Mr. Minister.

The House Leader can adjourn this session or prorogue it — do whatever he wants — and look at the. thing six months from now and look at the evidence that you will have on hand at that time because the

[ Page 3727 ]

evidence is already so serious in terms of exploration — less than half of what it was last year, by the best figures we can get. I would like to hear the Minister say something about those figures when he closes debate on second reading or if he is going to speak on this amendment.

The next reason why there should be a six-month hoist, Mr. Speaker, is that it would give time to call an election on this bill because there should be one. This is bad, bad legislation. I would welcome the opportunity to go to any riding in this province and on any platform in this province and fight an election on this Bill 31. Every community in this province, Mr. Speaker, is a mining community, whether they know it or not.

This is the most important economic legislation of this session. That is one thing that the Minister and I agree on 100 per cent. Bill 31 is so tremendously important that it much exceeds the mandate that that government got on August 30, 1972. It has gone far, far beyond that mandate. You have no mandate to bring in legislation that destroys jobs and destroys British Columbia's future in a whole industry years after the group on that side of the House will be gone, Mr. Speaker.

HON. MR. NIMSICK: We haven't got a mandate? You haven't got one!

MR. GIBSON: You haven't got a mandate, Mr. Minister, to do this kind of thing — not with 40 per cent of the vote you haven't — no sirree. Bad, bad legislation.

Listen to that Minister, who knows that royalties are bad by his own report and who brought in legislation to say so. Listen to him talking on this bill. Let's hear him stand up and talk about this bill. I hope he will.

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): Are you going to support the other bill?

MR. GIBSON: Which bill is that?

HON. R.A. WILLIAMS: The forestry one.

MR. GIBSON: I want to know what you're going to do with the discretion, I'll tell you that. There's a lot of discretion in there for that Minister. I'll lay it on the line, Mr. Minister.

Mr. Speaker, I've just got one more thing to say. Tax profits, Mr. Minister. Don't try and take it off the top and leave it in the ground and force high grading. Tax profits — you know that is the solution. If you won't do that then call an election. Or if you won't do that then hoist the thing for six months, for goodness' sake, which is the amendment we are speaking to. Hoist it for six months so that you can, I would say, come to your senses.

Mr. Minister, I'll look forward to hearing your comment on that later on.

MR. D.E. SMITH (North Peace River): I think it is abundantly clear that the NDP government is great for using cliches and statements about how they are for the small people of British Columbia and the great things that they are prepared to do on behalf of the little man in the Province of British Columbia, including the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) who is the architect of all of this legislation. Let's not kid ourselves.

MRS, JORDAN: The grabbagger. Never worked a day in his life!

MR. SMITH: There is the power broker for the NDP, the man with the great master plan for British Columbia. It is not the Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick) because, after all, we know the Minister has had a long career in public life and he won't be in these chambers for that many more years.

But you have got a man back there who makes all the bullets for you to fire. Unfortunately, after the time you have spent mainly in a mining area, coming from that background, you don't realize the irreparable harm you are doing to the Province of British Columbia, the economy of this province and the people whom you say you represent.

There is more to government and there should be more responsibility in government than to try and dream up schemes which will milk industry dry and leave no incentive for anyone to ever invest another dollar in the province. If that is your desire and your aim, you are certainly going down the right path today with the legislation we have before us, particularly Bill 31.

What is your desire? If you follow the advice and the direction of the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams), you will make it impossible for mining companies to operate in the Province of British Columbia. But that really won't worry you, because the Minister of Lands, Forests and Water Resources in his paternalism will take them over. He will become the tsar of the mining industry as well as the Lands and Forests department. At that time he will say, "We did it because the industry was not returning to the people the amount of revenue it should."

There is probably no industry in the province which relates more to the individual and the little man than the mining industry, even more so than the forest industry. For many many years people have struggled and worked to try and find an ore body in the Province of British Columbia. Now why do they

[ Page 3728 ]

do that?

Interjection.

MR. SMITH: Oh, poor little Cominco. Why don't you go and plan another subdivision somewhere? Sell another island, Mr. Minister. Go up into Prince Rupert and see what they think of you up there tonight. You are wasting your time in the House, I'll tell you.

MR. SPEAKER: Order! Order, please! I wonder if the Hon. Member would kindly relate his remarks to the question of hoisting this bill.

MR. SMITH: Yes. Thank you for those kind words, Mr. Speaker.

The reason I believe this bill should be hoisted for six months is that I am genuinely concerned, as many people are in the province, that the Minister and his colleagues do not understand the implications of the legislation they have proposed.

It is easy and it is the thing to do to get up and make great statements and wild accusations about the rip-off profits of the large mining companies in the Province of British Columbia. If you are not doing it, Mr. Minister, certainly your colleagues. are. They look at any mining operation in the province which is successful and say that they are making rip-off profits.

But where do these mines start? Basically they started from the fact that some small person, financed mainly on his own with a small grubstake perhaps, went out and spent many years in the woods and in the mountains, finding a discovery.

AN HON. MEMBER: How about the grandmothers on the payroll?

MR. SMITH: Why don't you go and hire some more of your relatives, Mr. Minister?

These discoveries resulted in some of the major mines that we now have operating in the Province of British Columbia. But the desire to discover a mine is inherent in a very individualistic breed of person. Not everybody is going to go out there. Not everyone has the ability to realize a mineral discovery if he walked right over it and saw it laid out right in front of him. But we do still have in this province people who do have a knowledge of mining properties and are prepared to devote a lifetime, scattered throughout the Province of British Columbia, trying to find that one major discovery.

When they do, they have in the past been successful in either promoting a mine themselves or bringing in or attracting capital. Generally, they have been compensated for their efforts. Those are the big mines you hear about today, the ones the NDP like to refer to so often. But the people they really hurt are the small man, the small mining company and the industries which back up the mining industry in the Province of British Columbia, the suppliers. They have quite a bit to say about Bill 31.

I don't think any bill in the House has ever generated as much mail as Bill 31. I am sure, if the Minister of Mines and Petroleum Resources has received as much mail as those of us in the opposition have received, he must know that there is a very large majority of people intimately concerned about the future of British Columbia who are opposed to Bill 31.

That is another reason why I suggested to the Minister that if you have the best interests of British Columbians at heart you will accept the amendment to hoist the bill for six months. You will put the bill into the hands of a standing committee of the House, as you have so often recommended yourself on other pieces of legislation, and you will let that committee listen to the people who will be most directly affected by this bill, seek their advice, listen to what they have to say, and hopefully come out of it with a system of taxation which is fair and equitable to both the mining industry as a viable industry in this province and the people of British Columbia who have a right to share in the revenues generated from the sale of a non-replenishable resource.

The thing that interests me most, Mr. Speaker, is the flood of mail we have received not from large companies, not Cominco, not any of the large mining companies in the province, but the little people, Mr. Minister — the ones who employ a few people in their operation and who cater to the mining industry from a service standpoint. They have all said to me — and I am sure they must have said this to you — that their business is in serious jeopardy at the present time.

I would like to quote a couple of letters from people who are in the industry, not large people. Here is a letter addressed to the Hon. Minister, so I have a copy of the letter addressed to him from Sproatt Silver Mines Ltd. re Bill 31.

"Our company has been active in mining exploration in B.C. Under the threat of Bill 31 it will be impossible to continue.

"I would like to cite briefly the merits of one of our properties and the effect of the bill on bringing this property into production.

"Expenditure of some $300,000 on our Silver King mine has resulted in a proven ore reserve of 82,000 tons of 8.5 per cent silver and 2 per cent copper. This could possibly support a 50- to 75-ton-a-day mill with the present high prices of copper and silver, providing employment for 30 to 40 people directly. This, of course, would be a very modest operation but would still inject several million dollars into the economy of B.C.

[ Page 3729 ]

"Bill 31 appears so ambiguous, with demands so poorly defined, that no financial institute would ever consider talking to our company. It would be impossible for us to do a feasibility study of the property as there is no way of establishing base price. This precludes production permits and, again, financial requirements.

"We do not object to a reasonable royalty but feel that we should not be prohibited from obtaining finance and that we should be allowed to repay capital expenditure.

"If you do not investigate the mining industry and do not make changes to obvious errors, we can only assume that it is your intention to do away with small companies such as ours, with direct loss to our 1,000 shareholders."

Incidentally, Mr. Minister, I would suggest to you that many of those 1,000 shareholders are individual people in the Province of British Columbia who have invested in the shares of that particular mining venture.

As we debate this motion tonight, millions upon millions of dollars have been lost and will never be regained by people who have bought shares in mines in the Province of British Columbia. Through the fact that this bill has come into the House, the shares of those mines on the stock market have depreciated to such an extent that many millions of dollars have been lost to people who can ill afford to lose their investments. They're the side effects — the indirect people who are affected by the mining industry. Nevertheless, they're citizens of the Province of British Columbia and have as much right to expect fair treatment as the person who individually becomes involved in developing a mine in this province.

I have another letter here and I'm not going to read all of it, but I think it's a good example of what can happen. It's from Norex Mining and Development Mining Company Limited. It's written by the individual who has promoted this mine:

"In 1965 I spent $2,000 trenching and sampling a silica and gold property 25 miles west of Cranbrook."

It must be an area that you're familiar with, Mr. Minister, through you, Mr. Speaker.

"The results of this work indicated the property was uneconomical at $35 or even $70 per ounce gold. Last year when gold reached the price of $120 per ounce, my evaluation suggested it could be mined at a profit. I then spent about $6,000 more stripping and sampling.

"I went over this with several geologists and engineers. In all their opinions, I could do nothing but make money.

"Estimated time to mine and ship possible ore, three to four months — it's a small operation.

"Profit of $1.27 million was possible if the width and values continued to a depth of 125 feet, and indications were that it did continue for that depth.

"Every cent I spent was my own hard-earned dollars from tunnel contracting. The opportunity to make $1.27 million in three to four months is the reason people spend their last dollar and live a life of grim existence to find that one in 100 lifetimes bonanza. But 99 per cent wind up in the poor house and are never heard of. The rare successful one is given national news and the public and government feel the people in mining make too much money for too little work and too small an investment. Who can blame them? There isn't any national news of the other 99 failures. Not even a back-page blip.

"If 100 people spend their lifetime's earnings on a sweepstakes ticket, their profit could be far greater than that of any average 100 people who spent their lifetime earnings in mining. Sweepstakes earnings are not taxed; the money of the losers leaves the country and no jobs are created. The losses of the mining people remain here and boom the economy."

So who should be taxed? Now that there is no three-year mining tax exemption, the provincial and federal income tax would apply. But Bill 31 would beat them to the punch and grab off a windfall on the high-priced gold that turned that useless mineral into a mineral resource. Their windfall would be, on $109.65 gold, $366,000 to the government, leaving this particular man with $900,000, he says. Federal and provincial income tax on that $900,000 profit would be $550,000, leaving this man with $343,000, still a substantial profit. Total profit, 74 per cent, a fantastic high profit for the small investment in time, keeping in mind that mining is the highest risk business in Canada.

He goes on to say:

"We mining people in Canada cried wolf many times in the past, but the mining industry still booms. That does not say Bill 31 is not a wolf. If it is a wolf, the people will not feel the bite immediately, as the millions the government will receive initially will offset the bite. But will the bite be bearable in the future?"

I think this is the real point the man is trying to make in the letter — the real tragedy, of course, in Bill 31.

"Had I conducted the same mining operation this year, I would have had to pay the government an additional $10,000 on the net smelter returns, increasing my loss to $23,545. I would have the feeling I was ripped

[ Page 3730 ]

off, unlike the government. I don't like being ripped off and I would never again get into a position where I could be ripped off by the government.

"If there are many more like me in the mining business, that $140 million royalty will dwindle away year by year, and I don't need to dwell on the side effects to the economy. A partial solution to that would be to set allowable production per year before royalties to give small mines a chance to be tested and maybe then become big profitable mines which maintain our economy. This is a small price to pay for genuine mine finding. The potential tax profit to the province would be greater. I have evidence now which shows that ore mined 15 years ago would not be ore today.

"Take some action. Should some action be taken to aid the little man and not kill his incentive with benefits to the economy of British Columbia?"

He addresses that to you, Mr. Minister, as a question.

I think that this is the whole point of the case to be made for hoisting this bill. It is punitive taxation levelled on a very high-risk industry in the province. There's no industry that I know of that takes a greater risk than the mining industry.

AN HON. MEMBER: The oil industry does.

MR. SMITH: No, not even the oil industry, because if the gentleman who just spoke out of his chair knew anything about the petroleum industry, he would know that the expertise is far greater advanced and the chances for success through the use of the equipment available today are far greater in the petroleum industry, even though the cost of development is high, than in the mining industry because it's very difficult in many areas where low-grade ore exists — or perhaps even high-grade ore — to determine the exact size of the body. But it's not too difficult with the instrumentation that is available to the petroleum industry today to give an indication of what is down there and have a reasonable chance of success once the geology and the geophysical work are completed.

The impact of Bill 31 has forced many companies that service the industry to consider cutbacks, to view their operations in the Province of British Columbia with respect to their future. Not only that, but it's forced many professional firms to relocate the professional expertise that it has taken them years to accumulate to other parts of Canada or the United States. Certainly the Minister must be aware of that impact. If he isn't, Mr. Speaker, then he's either naive or he's not listening to the industry or the companies that cater to the industry in the Province of British Columbia.

Many of them have documented their problems and fears about what will happen to their industry in this province. They've done so in very direct words and terms. Here's a quote from a prospector in Cranbrook:

"I am just a working man, like thousands of others in B.C. I had hopes of bettering my station in this life. I am a prospector. I've worked like hell for the past 10 years on my weekends and holidays to discover no less than four new prospects in the East Kootenays.

"The total expenditure incurred by various mining companies in exploration work on these properties amounts to more than $100,000. This is good for our community.

"Now you have made it impossible for me to hold my claims. I am employed as an exploration technician by Cominco, Ltd. If you go through with Bill 31, there will be no work for me in B.C. with Cominco or any other mining company. I will not lose my job with Cominco, but I will have to move to the Yukon."

Here's a comment from a man aged 57, a prospector, who mined for 37 years, 27 of which have been spent in B.C. He talks about finding a gold claim, and he hoped to develop it. He can't get any finance now. Financing was arranged and then cancelled out after the introduction of Bill 31.

HON. MR. NIMSICK: Are you speaking to the amendment or to the motion?

MR. SMITH: I'm speaking to the amendment, Mr. Minister. The whole point of the amendment is to try and make you, as the responsible Minister, realize the results of your actions in forcing Bill 31 through the House with the large majority that you have, without consultation.

[Mr. G.H. Anderson in the chair.]

Interjection.

MR. SMITH: Mr. Speaker, the Minister says that he's not forcing anything through the House. Certainly as long as people are prepared to debate the bill I presume that we can delay second reading and committee stage and final approval. But the Minister knows as well as I know that the majority in the government benches will make sure that Bill 31 goes through. Whether it's good legislation or bad, it's going to go through, Mr. Minister.

HON. MR. NIMSICK: Is that a prediction? Well, then, let's go to the next section.

MR. SMITH: Let's finish it, the Minister says. Well, I don't know why you should be in such a hurry, Mr. Minister, because it's lousy legislation. It's

[ Page 3731 ]

going to have a very definite financial impact upon the people who are presently employed in the mining industry, a detrimental impact on them. In the long run it will be detrimental to the revenue of the Province of British Columbia.

Sure, you'll make a few short-term gains, if that's all you're interested in, and the revenue will increase. While I don't want to get into that until we get back to second reading - I would just like to say, sure, the short-term might look rosy to you and to the Members of your caucus, but I say this: if you had deliberately set out to create economic hardship to an industry you couldn't have found a better way.

You bring this in without consultation. I doubt that even the expertise in your department was called upon before this bill was drafted. I'm sure that many of the people affected by this bill have never had any chance to discuss it with the department. It's apparent that you have not ever taken into consideration the impact that you are going to have on the people who supply equipment and services in the Province of British Columbia.

I have a letter from Northern Mountain Helicopters Ltd. They say that their company has lost more than $60,000 in contracts to date, and this does not include related work which major contracts normally generate.

Obviously, Mr. Minister, it's very apparent that the Members of the NDP are so concerned about this bill that they absent themselves from the House…

AN HON. MEMBER: Hear, hear!

MR. SMITH: …so I move that the committee rise, report progress and ask leave to sit again.

Interjections.

MR. SMITH: Pardon me, I move adjournment of the debate on this amendment until the next sitting of the House.

Interjections.

DEPUTY SPEAKER: Order, please. I'm going to put the question when it quiets down and we can hear it.

Interjections.

DEPUTY SPEAKER: We will wait until it quiets down, then we will put the vote. As soon as it is quiet enough.

MR. J.R. CHABOT (Columbia River): Oh, what kind of a sham game are you playing, Mr. Speaker?

DEPUTY SPEAKER: The motion is, as I understand it, that the committee rise and report progress — that was the way you started out.

SOME HON. MEMBERS: No, no.

Interjections.

DEPUTY SPEAKER: The motion is the adjournment of the debate until the next sitting of the House.

Motion negatived on the following division:

YEAS — 11

NAYS — 35

[Mr. Speaker in the chair.]

MR. SPEAKER: Is there any further debate on the amendment?

MR. G.S. WALLACE (Oak Bay): Speaking to the amendment, it seems that the debate is ranging a little beyond the amendment to deal with the principle of the bill as well. I think that the principle of the bill is not exactly what we are trying to get to; we will explain the reasons why we should, at the very least, hoist the bill for six months.

There have been somewhere in the neighbourhood of 150 pieces of legislation introduced in this session. Anyone who is remotely connected with the news media will know that of all the bills introduced in this session, Bill 31 has to be the bill which has created the greatest amount of controversy and the greatest amount of concern in relation to British Columbia's second industry.

We can all heckle each other and joke and have our opinions, but I think it is very valid that the bill which has created the greatest publicity and

[ Page 3732 ]

controversy deals with the second basic industry in this province. That is not something we should take lightly. We should not purely indulge in our differing political ideologies when we get into this debate, because there are some definite facts that I think can be put forward in this debate which bear a little bit of examination, particularly when we are considering whether it should perhaps be debated six months from now.

It is agreed even by the Minister that this bill is not well written. The Minister is quoted as having agreed that some of the definitions are subject to varying interpretations. Surely, Mr. Speaker, if there is one serious flaw in any piece of legislation — on any subject, by any government — it must surely be the flaw which makes it very controversial as to the actual interpretation of the words used in the bill — the definitions.

Mr. Speaker, while I have the highest regard for the Minister and find him a very pleasant, jovial friend, I have to criticize him most severely for not only not admitting the confusion which exists in the terminology of the bill, but he had the gall, when he introduced second reading, to say that after the debate is underway or over he will bring forward clarification, or he will bring in amendments.

Mr. Speaker, if the bill is so difficult to understand clearly by the people most intimately affected in the mining industry, and if the Minister admits that the bill is not well written — and we all make mistakes, Mr. Minister; that's no great sin to make a mistake in writing the bill or to leave certain elements of the language subject to varying interpretations — surely we should not be indulging in this debate at this time, at least without the clarification which the Minister himself, in introducing the bill for second reading, said was necessary and would be forthcoming.

If that isn't one good reason to hoist this bill for some length of time until we get it properly drafted and rewritten so that at least we can all agree on what the bill actually says…. For example, Mr. Speaker, if you cannot agree on what the bill actually says or if the Minister admits that it could be easy to misinterpret what it says, then surely we can't really have any kind of intelligent debate in determining the likely accurate financial effect on the industry.

As I understand it, there is no general agreement — or perhaps one should say no precise understanding — as to what the Minister means by "gross value." This super-duper royalty that we are talking about is based on the difference between gross value and basic value.

If I have missed a clarification which the Minister has given in the last day or two, then perhaps that is my misunderstanding. But I think that the Minister considers the definition in the bill to mean net smelter value, not gross value, and that the royalty will not be calculated until the overhead costs of transportation and smelting and refining have been deducted from the value.

Interjection.

MR. L.A. WILLIAMS: That's not what the bill says.

MR. WALLACE: That's not what the bill says, Mr. Speaker. The Minister, by interjecting, has just exactly put his finger on the kind of confusion and misinterpretations, or varying misunderstandings, which are existing in the mining industry at this time.

Beyond that, we have again another reason to hoist this bill — basically because of the very great importance of this industry to British Columbia. It would be disastrous and, I'm sure, regrettable. I'm sure that the Minister himself knows this. But if, by chance, his confidence is misplaced and this bill does have punitive and disastrous effect on the mining industry, I'm sure the Minister will be as sorry as anyone else that he didn't perhaps take time to reconsider how accurate or inaccurate the figures are upon which he has based the legislation.

MR. GIBSON: For his own sake.

MR. WALLACE: Yes, as the Member for North Vancouver–Capilano mentions, Mr. Speaker: even for the Minister's own sake. We are really trying to help the Minister too, though in the political process opposition Members who try to help Ministers are frequently looked upon, from a psychiatric point of view…that we should ever be so stupid as to try and help the Minister. But we seriously do feel that the Minister has got himself in a box, because the bill is not well written, it's confusing and it's subject to variable interpretations of the definitions affecting a very important industry in British Columbia.

Again, one should not just make general statements. I like to be specific. When one reads the Vancouver Province on Thursday, March 7, it is quite clear that there is a tremendous difference of opinion as to what exactly the financial impact of the bill will be on the industry.

The divergence between the Minister's figures and the figures produced by the industry after they have had time to digest the bill or to try and digest the bill…. I personally think that the industry got a duodenal ulcer trying to digest this bill. I quote from the article of March 7, Mr. Speaker:

"The Minister pointed out Wednesday that he had used 55 cents as a rough price, not an actual calculation, merely to illustrate the way the Act would apply. He said he did not know what the exact figures would be."

Here we are, Mr. Speaker, bringing in very far-reaching legislation involving millions of dollars of tax revenue, royalty revenue, from the

[ Page 3733 ]

second-most-import ant industry in the province. When the industry tackled the Minister and asked him to be more specific as to the exact effects of the bill, the Minister said that he was just using rough figures — rough calculations. He didn't really know exactly what it would be.

Mr. Speaker, that seems to me to be a pretty irresponsible approach for such a very important portfolio in general and this bill in particular. Furthermore, in the same article it continues:

"All of this presupposes the Minister is correct in assuming a 70 per cent price for 1974. However, Nesbitt, Thompson and Co. which, if realized, would dramatically disprove the Minister's figures in the other direction."

So we have two specific, documented situations where there is confusion as to definition…. And there is more than confusion when we begin to try and pin down, what the financial effects are likely to be on the industry. One of the reasons there is this confusion on the financial aspect seems to relate very clearly to two things: the confusion in the definition section, and the discretion allowed to the Minister in the bill. This is another reason that the bill should be hoisted.

The discretion allowed to the Minister in selecting the basic five-year price is open to varying interpretations too.

In general, the bill is written in such a way that through section after section, the kind of discretion that's given to the Minister, again when he's already shown that the bill is difficult to understand where there are specific figures quoted…. I think when you put these two together, no wonder the mining industry is worried, confused and uncertain as to exactly what this bill is going to do.

I started off my remarks by making it very plain that if the government doesn't realize that out of 150 pieces of legislation this is the one which has created the greatest furor for some of the reasons I've mentioned, yet it is so determined to bore ahead regardless of many valid points which have been made, points which would make a wise man stop in his tracks and reconsider…. I always think the real sign of wisdom is the sign where a man is willing to stop in his tracks, although he thinks he's right, he feels sure he's right, but that little thought just goes through his mind — my God, maybe that other fellow has a point.

I've got more points to back up my argument, but the points I've raised, very quickly in summing them up, are: the tremendous controversy, the second most important industry in the province, the fact that there's tremendous difference of opinion as to what the bill means, as to what the financial effects will be on the industry, and several others that I'm about to mention. But three or four to start with, I think, should make a wise man stop in his tracks an; just say to himself, well, I don't know, I still think I'm right but maybe, just maybe, these guys have some merit in their argument.

I don't think there's any doubt, Mr. Speaker, that there will be a short-term financial gain. But one other reason I think this bill should be hoisted is the obvious fact that when you read about the mining industry, and the comments from the mining industry, there is always a considerable gap in the mining situation between legislative action and investor reaction. Certain mines are into production and obviously they have to continue, There's no way that they would either want to or could economically stop production or cut back production beyond a certain point in their development. So it isn't the kind of legislation where you take the sales tax off clothing for example; one day the tax is there and one day it isn't and it's a very clear cut change of situation the day after the legislation passes. It is quite clear in the mining industry that there is a gap between the actual legislation and the consequences which can follow from it.

Just because the degree to which mining development and exploration has diminished in recent months…. I agree with the Minister, I think he made the comment that it had been declining before Bill 31 was introduced. Mind you, Mr. Speaker, that could have two interpretations, too. Some of the legislation you've brought in already, Mr. Minister, would hardly inspire confidence in the investors in the mining industry.

Just to be very specific again in what I'm saying, I would just read into the record the 1973-4 report of the B.C. and Yukon Chamber of Mines:

"Only one new mine opened in 1973 and currently no major mines are in the development stage. Increased quantity of production in 1974 is not anticipated. Any increase in value of production is contingent on a continuation of current high metal prices and the economic well-being of mineral consuming nations, notably Japan.

"It is estimated that 1973 mineral production in the Yukon will exceed $135 million compared to $102 million in 1972. It is further estimated that production in the Northwest Territories will exceed $145 million in 1973, compared to $124 million in 1972."

Interjection.

MR. WALLACE: Well, that may be so, Mr. Minister, but these are some of the facts that the mining industry has pointed out. It mentions the serious problems that are arising because of restriction on the flow of capital. I wonder why that's happening. There has to be a reason. People put their

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money in certain investments, certain provinces or certain countries because they expect to get a good return on their money. If we have some sector, mining or what-have-you, in this province where the investment is declining, one has to look for a reason. On this side of the House we think the reason's quite obvious. There's a serious drop-off in exploration activity and uncertainty as to the future of the industry.

Anyway, exploration in 1973 went down from $38 million to $26 million — I think other Members have read some of these figures out. The fact is that there is a diminishing amount of money being used in the exploration and development of mines in this province already.

The Minister and others have tried to make out the argument that it's only the great big mining companies that are really concerned about this. I won't repeat the kind of letters that the Member for North Peace read a moment ago, but it is a fact that we've all got lots of letters from very ordinary, non-rich people, like the people the Minister of Finance was talking about earlier on a bill to do with succession duties. Lots of very middle-income ordinary people who are very concerned not only about whatever investment they have or whatever pension they may be living on, but the fact that the industry also provides jobs.

I'm sure we've all had…I know all the other Members and the Minister…. This particular letter, for example, starts off: "I am a geologist employed by an international mining company." I don't know how many letters we've had that start off by saying that they are either a geologist or a mining engineer, and it's becoming increasingly difficult for these people to sustain employment in this province.

Now do we want to be driving out of the Province of British Columbia all these highly skilled and well trained people? Should they go to the Yukon or Montana or Peru or wherever it is that they can find employment to utilize their highly qualified skills? That's another argument which I think we should produce and put forward in considering hoisting the bill for six months, because if this depressing effect on the industry continues to grow, there's little doubt that many highly skilled professional people in the mining industry will have to leave British Columbia to obtain continuing employment.

MR. FRASER: It's gone, it's gone already.

MR. WALLACE: I've already alluded to the uncertainty, or at least the diverging opinion as to what the exact financial impact will be on the industry. Then just to put the lid on the whole uncertainty, we have Mr. Turner's budget which suggested that royalties payable in the mining industry would no longer be considered in the calculation of federal corporation income tax.

MR. FRASER: The Liberal and NDP are still in bed together.

MR. WALLACE: Now, I'm delighted to know that that budget brought about the downfall of the Liberal government. So there's some….

Interjection.

MR. WALLACE: I'm just busy restraining myself.

At any rate, Mr. Speaker, although we will have a different party ruling the country nationally after July 8, we do have the fact that this kind of philosophy exists nationally. I think the amount of uncertainty which exists in respect to this kind of taxation legislation at the federal level is just one more area of concern for the mining companies in British Columbia, and the mining companies all across Canada.

It seems to me that this is just yet one more uncertainty of a very substantial amount, we're not talking about peanuts. If the royalties that are to be applied against the mining industry through this bill are then no longer tax deductible, I think the Minister would agree that places the mining industry, not in financial difficulties, but at this point in time they don't know where they're at in attempting to set up budgets and determine how much they should be spending in the next six months or 12 months on further development and exploration.

I'll refer in very general terms without intruding upon legislation just introduced, but I think that this very government has shown that kind of consideration for federal legislation in its attitude to the study of the old timber leases — the bill just introduced yesterday or today.

Therefore if, in trying to develop taxation policies in relation to the biggest industry, the first industry in this province, in considering that industry you take into consideration federal tax policies, for goodness' sake why not apply the same kind of consideration in respect to the mining industry? It is just as vital that the mining industry should have some idea what the federal tax position is in order to lay their financial plans ahead for a year, as it is for the forest industry.

I think we frequently hear from the Minister of Finance and Premier (Hon. Mr. Barrett) in particular, how wonderful a thing it is to be consistent in this House. He berated the Member for North Okanagan (Mrs. Jordan) tonight for her inconsistency.

HON. MR. BARRETT: That wasn't the Premier, that was the Minister of Finance. (Laughter.)

MR. WALLACE: Anyway, I think this is another reason to justify our argument that this bill should at

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least be delayed for six months, that there is tremendous uncertainty as to the possibility of federal taxation changes which will further seriously affect the feasibility or otherwise of development by mining companies.

You know, Mr. Speaker, another reason that I think we should hoist the bill is that the Minister says, "Oh, well, if the price of metal drops, we'll stockpile the ore."

MR. FRASER: Kooky idea.

MR. WALLACE: Which happens in my view not to be a very good suggestion, but if there is that kind of uncertainty in the Minister's mind then maybe the proposals in this bill could result in real financial difficulties for the companies. I know the Minister can't guarantee the prevailing prices of metals. I'm not suggesting that for a moment. But by admitting that the need might arise to stockpile the ore because they can't sell it is, in itself, an admission that the Minister realizes some of the potential dangers with which this bill is fraught. While I did some research in relation to the Minister's comments, the information that I could uncover was that there was precious little of stockpiling of ore in the Depression which is what the Minister asserted, and if he's got better research information than I have, maybe he should give us some specific facts and figures.

The statement was made that stockpiling occurred in the Depression. I would like to know if it did, to what extent, and how many jobs did it preserve?

Perhaps more important, Mr. Speaker, again the fact that the Minister is even talking in terms of possibly stockpiling ore and comparing it to the days of the Depression is a thoroughly negative and depressing line of thought in itself. This province is buoyant and has all kinds of potential for more and more development, more jobs, more wealth by the use of our natural resources. But you can kill the goose that lays the golden eggs, Mr. Minister. You most assuredly can. This kind of wealth which constitutes such a vital industry in the province is not just some source of endless revenue that the government can go on draining in the way in which this bill makes it possible for the industry to be overtaxed.

As I said earlier there is a very important principle to us involved here, which we will debate later. We even think that your whole system, or the method by which you extract the money, is wrong. We'll talk about that later. But even if for a moment we were willing to accept the royalty approach, which we are not, but if we were, there are all these reasons which I have tried to outline.

I'm not trying to be funny, or pompous, or smart-alecky when I say this. I seriously think that these are some pretty sound, valid reasons why it would be a good idea to look at this bill again six months hence.

Why do we say six months hence? The reaction which has occurred, and I think the Minister would agree, has been very vociferous and very strong and very prolonged. The Minister smiles, and again I know that he is just thinking of Cominco and all the great big profits which we are always having quoted to us, but we've tried to point out that there are a lot of ordinary people involved in the success of the mining industry and in the continuing employment which it provides.

One of the figures I had quoted to me by one of the mining sources was that the livelihood of about 100,000 people is involved in terms of those people employed, their families, and the secondary and tertiary nature of employment in association with the mining industry. Now I can't vouch for the exact accuracy of 100,000, but if it is anywhere close to that we are dealing with a segment of people in British Columbia which is a substantial percentage.

The Minister said that in previous years, previous generations, we took the ore and we left the ghost towns. I certainly don't feel that is either the goal of the opposition parties or the goal of the government, but the fact is that if taxation is punitive or if the risk which the investor is taking is further increased, then I'm sure we can make the point very clearly that there are lots of other places where people can invest their money without putting it in mining. I think the question of investment in mining has been made very plain over and over again, that it is a very risky industry in which to invest money. It makes it quite clear that this particular bill simply increases the degree of risk and increases the doubt the investor has as to what return he will get on his capital.

So the six months would provide a very useful period of time to do certain things. And the Minister knows very well how difficult it is during the session of the Legislature to adequately carry on other serious discussions and negotiations when he's dutifully here in his place in the House every day, and when we are having night sittings and committee meetings and many other responsibilities. But once the House adjourns, if ever (Laughter), it would be a much more satisfactory and simpler plan to follow if the Minister would hold either meetings or public hearings before either a special committee of the Legislature or the committee of the Legislature on mining.

Interjection.

MR. WALLACE: Well, Mr. Speaker, it's getting late, and I'm tired, so we'll adjourn this debate until the next sitting of the House.

I move adjournment of this debate until the next sitting of the House.

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MR. SPEAKER: I don't think the motion would be in order in view of the fact that there has not been an intervening proceeding since that motion was already moved. I would have to call upon the next Member to speak.

MR. WALLACE: Well, I'll just complete my….

AN HON. MEMBER: Ask for leave of the House.

MR. SPEAKER: Well, the only suggestion I can have is the….

MR. WALLACE: Why don't I just shut up quickly? (Laughter.) I've only one more point to make, Mr. Speaker. I think this is quite a valid point, though. We've all been here for weeks and months and we're all getting tired, and we're a little edgy, and I try to say this from a clinical point of view that we are all more likely to make mistakes. It's like being in the operating room when you are tired. I think that six months to give the Minister and his advisers time to reconsider, to give the mining industry an opportunity, not in an atmosphere of anger and bitterness that seems to be existing at the present time, but when we've all had a chance to cool off a little bit, if the Minister would take this….

HON. MR. NIMSICK: I'm not hot.

MR. WALLACE: Oh, you were pretty hot the other day. I think you did an excellent job when you introduced second reading. But anyway I promised to stop speaking quickly, and I just feel that these points I've made, together with the fact there would be so little to lose by at least knowing if your opinion is unchanged six months from now, that you had covered all the avenues of approach which I think are pretty vital when you are dealing with such an important industry in this province and when such substantial sums of money are concerned.

After all, this is an open government, Mr. Speaker. We hear the point made many times that this is an open government, and one of the most open ways to govern is to take controversial or serious matters to committee and to the public.

I feel that in the light of all the correspondence that we've had from, as I say, many ordinary citizens who have some investment in mining or who have employment through mining, that it would be eminently good common sense to hoist this bill for six months and carry out some kind of further assessment of the real impact of the bill in conjunction with the mining industry, in conjunction with the economists and financial analysts.

If that were to be done, not only would the financial impact be more accurately known but the Minister could presumably rewrite those sections and sentences and phrases which seem to be causing so much difficulty in interpretation.

For all these reasons, Mr. Speaker, I'm sure I've convinced the Minister — he's in his best humorous and jovial mood tonight. I'm sure I've convinced him. Maybe he has a statement to make to the effect that he is going to hoist the bill for six months. I sit down in great expectation.

HON. MR. NIMSICK: Mr. Speaker, I would like to move adjournment of this debate until the next sitting of the House.

MR. SPEAKER: I think it could be done with the leave of the House.

Leave granted. Motion approved.

Hon. Mr. Barrett moves adjournment of the House.

Motion approved.

The House adjourned at 10:50 p.m.