Hansard — Wednesday, June 12, 1974 — Afternoon Sitting

CONTENTS

Afternoon sitting Routine proceedings Economic Policy Analysis Institute of British Columbia Act (Bill 158).

Hon. R.A. Williams.

Introduction and first reading — 3947

Oral Questions

WCB purchase of Jiminy Crickets Kindergarten. Mr. Wallace — 3947

Institution of survey on 1974 rental housing starts. Mr. Gibson — 3947

Glanford Avenue property offered to Saanich municipality. Hon.

Mr. Lea replies — 3948

Moving of cattle from flood-potential areas. Mr. McClelland — 3948

Musqueam Indian band claims. Mr. D.A. Anderson — 3949

Veterans' Land Settlement Act requirements for Crown grants. Hon.

R.A. Williams replies — 3949

Expansion of teacher-training programme at UVic and UBC.

Mr. Wallace — 3949

Possible vendetta against Northwood Pulp and Paper. Mr. Chabot — 3950

Task Force Recommendations for Jericho Hill School.

Mr. D.A. Anderson — 3950

Police Act (Bill 91 ).

Report and third reading — 3950

Income Tax Amendment Act, 1974 (Bill 102).

Report and third reading — 3950

Real Estate Amendment Act, 1974 (Bill 124).

Report and third reading — 3950

Motor-vehicle Amendment Act (Bill 138).

Report and third reading — 3950

Assessment Authority of British Columbia Act (Bill 147).

Report and third reading — 3950

Institute of Technology (British Columbia) Act (Bill 134). Committee stage.

Amendment to section 5.

Hon. Mrs. Dailly — 3950

On section 6.

Mr. D.A. Anderson — 3951

Amendment to section 8.

Hon. Mrs. Dailly — 3951

Mr. D.A. Anderson — 3951

Amendment to section 12.

Hon. Mrs. Dailly — 3951

Report stage — 3951

Assessment Act (Bill 151).

Withdrawal from committee stage.

Hon. Mr. Barrett — 3951

Public Officials and Employees Disclosure Act (Bill 85). Second reading.

Mr. Rolston — 3951

Mr. Fraser — 3953

Mr. Gibson — 3954

Hon. Mr. Barrett — 3955

Mr. Morrison — 3956

Hon. Mr. Macdonald — 3958

Division on second reading — 3959

Mineral Royalties Act (Bill 31 ). Second reading.

Mr. Gibson — 3959

Motions Motions and adjourned debates on motions On motion 32.

Hon. Mr. Hall — 3982

Mr. Chabot — 3982

The House met at 2 p.m.

Prayers.

HON. D.D. STUPICH (Minister of Agriculture): Mr. Speaker, one of the important things about 1974 is that it is the 100th birthday of the City of Nanaimo. One of the ways of marking that occasion was for the community to select a centennial king and a centennial queen from among the members of the native sons and native daughters organizations.

In the gallery today we have this royal couple, along with some other visitors from Nanaimo: centennial king Cece Mulholland, born in Nanaimo in 1897 — he has been there most of his life — whose particular interest is sports, and the centennial queen. I won't say how old she is, but she was born in Nanaimo 89 years ago. She has been a teacher in that community for quite some time; and one of the students at one time in her career was the wife of Cece Mulholland. I would ask the Members to join with me in welcoming this royal couple and other visitors from Nanaimo.

MR. D.E. LEWIS (Shuswap): Mr. Speaker, seated in the Speaker's gallery today from the beautiful riding of Shuswap is Mr. Ernie Arsenault, alderman for Salmon Arm. I would like the House to welcome him.

HON. W.L. HARTLEY (Minister of Public Works): Mr. Speaker, I would ask you and all assembled to welcome one of your former babysitters. Bill Shaw of Spences Bridge is here along with his sister, who used to babysit our Speaker. I would like to welcome Bill Shaw of Spences Bridge.

MR. SPEAKER: Order! (Laughter.) Hello, Bill.

Introduction of bills

ECONOMIC POLICY ANALYSIS
INSTITUTE OF BRITISH COLUMBIA ACT

Hon. R.A. Williams presents a message from His Honour the Administrator: a bill intituled Economic Policy Analysis Institute of British Columbia Act.

Bill 158 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral questions

WCB PURCHASE OF JIMINY
CRICKETS KINDERGARTEN

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I'd like to ask the Minister of Labour if he could tell the House whether the Workmen's Compensation Board purchased, after appraisal, property at 3410 Shelbourne Street, Victoria, formerly known as Jiminy Crickets Kindergarten?

HON. W.S. KING (Minister of Labour): No, Mr. Speaker.

MR. WALLACE: A supplementary, Mr. Speaker: could I ask if the purchase was made and then turned down by cabinet decision?

HON. MR. KING: No, not as far as I am aware, Mr. Speaker.

MR. WALLACE: A final supplementary: I wonder if the Minister would be kind enough to look into the matter, since the information I've been given is fairly specific. I would like to know if, in fact, the appraisal took place and an agreement signed, contingent on cabinet approval — which was done six weeks ago and has not been confirmed.

MR. SPEAKER: Excuse me, Hon. Member. Is this not a matter for a different department?

HON. MR. KING: Purchases by the Workmen's Compensation Board, Mr. Speaker, would be submitted for cabinet approval through my office.

I am aware that the Workmen's Compensation Board was seeking property in the City of Victoria for a claims office. To my knowledge, no deal was consummated. A number of properties were appraised. To my knowledge, none have been secured at this point.

If the Member for Oak Bay has information that there was in fact a deal made which was subsequently not consummated, then I would be very happy to receive that evidence.

INSTITUTION OF SURVEY ON
1974 RENTAL HOUSING STARTS

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, to the Minister of Housing: pursuant to questions that I've asked him previously and in view of the possible or probable effects of rent control on the rental housing market, could I ask the Minister if he has instituted any kind of a special survey, either through his own department or any provincial or federal agency, which would determine the present situation in terms of 1974 rental housing starts as compared to previous years?

HON. L. NICOLSON (Minister of Housing): As I've said before, we're still hiring staff. Probably the last thing we'll be doing is hiring staff to get statistics

to point out the obvious to us.

We do have a programme, however, to build 2,000 units of rental housing in the greater Vancouver and Victoria areas.

MR. GIBSON: On a supplementary, Mr. Speaker: what I was asking the Minister is whether he has any programme to determine how many apartments are not being built in the free-enterprise sector.

MR. SPEAKER: I don't think that that's within his jurisdiction.

GLANFORD AVENUE VICTORIA PROPERTY
OFFERED TO SAANICH MUNICIPALITY

HON. G.R. LEA (Minister of Highways): Mr. Speaker, I believe it was on Friday that I was asked a question by the Hon. Member for Saanich and the Islands (Mr. Curtis) in regard to some property between Pat Bay Highway and Glanford Avenue. Because I felt there was a certain amount of emotion attached to it, I felt that I should get the answer as soon as possible. So I'd like to answer that question, Mr. Member.

First of all, I'd like to go over a little bit of the history. We've reviewed some of the history. You may recall that prior to the widening of the Pat Bay Highway the area lying to the west of the highway near the present pedestrian overpass was a very unsightly swamp area. It was being filled with private wastes from construction sites.

At the time of the highway widening the department approached Saanich with a proposal to install a pipe system to carry the drainage from the area. At that time Saanich was not prepared to go ahead with a proposal whereby the department would excavate the ditch and install the pipe, and the municipality would supply the pipe.

The water draining into this area is coming almost entirely from property under municipal jurisdiction. The department then constructed an open-ditch system on the Crown property, leveling the old disposal area, and seeded the area. Now I'd like to mention…. You were concerned about safety also.

Interjections.

HON. MR. LEA: You don't want the answer?

Interjection.

HON. MR. LEA: I didn't get a letter; I got an oral question, Mr. Member.

Now, Mr. Speaker, the ditch, which is 10 feet deep in some places, has been fenced off. I don't know whether the Member was aware of that. At this point we have offered to the Municipality of Saanich that property, which has cost the provincial government to date in the neighbourhood of $140,000. We've offered that property to Saanich for a park. They said they would take it only if we spent another $30,000 to do some work. Personally, I feel that when we're offering a gift of $140,000 worth of property, the municipality can pick up the $30,000.

MOVING OF CATTLE FROM
FLOOD-POTENTIAL AREAS

MR. R.H. McCLELLAND (Langley): Mr. Speaker, a question to the Minister of Agriculture: could the Minister advise us what plans are being made to assist farmers in the flood-potential areas to move their cattle if it becomes necessary? Or will the onus be left entirely on the farmer?

HON. MR. STUPICH: Mr. Speaker, there is a cabinet committee looking after this problem. The Minister of Agriculture is not a member of that committee, but certainly when the need arises to give that sort of thing consideration, the Minister of Agriculture will be involved. At this present time there are no plans for moving cattle.

MR. McCLELLAND: Supplementary, Mr. Speaker: is it true that the farmers have now been told through agents of the government that there will be no assistance for them, that they will have to handle all those provisions themselves?

HON. MR. STUPICH: I have not received that information, Mr. Speaker.

LIVESTOCK PREDATOR-CONTROL PROBLEMS

MR. H.A. CURTIS (Saanich and the Islands): I would like to thank the Minister of Highways (Hon. Mr. Lea) for his detailed answer to that question. Perhaps we can pursue it later.

To the Minister of Recreation and Conservation: I wonder if the Minister could tell the House if he has been made aware of a recent increase of predator attacks on livestock, particularly sheep, in the area between Duncan and Nanaimo.

HON. J. RADFORD (Minister of Recreation and Conservation): No, I haven't.

MR. CURTIS: Supplementary, Mr. Speaker: can the Minister tell us offhand the geographical area assigned to the predator-control officer who would have responsibility in that smaller area between Duncan and Nanaimo? Does he cover a much larger area?

HON. MR. RADFORD: It is actually from

Nanaimo, Mr. Member. When you talk about predators, we've had a lot of problems concerning sheep on the southern part of Vancouver Island and we've found that it is mostly caused by dogs.

MR. CURTIS: In the event that it is determined anywhere on Vancouver Island that a cougar has attacked livestock, to whom would the Minister's department turn for control?

HON. MR. RADFORD: We have our own people who are involved with the predator problem of cougars on the Island. We have cougar hounds and we have the predator-control people to look after that.

MUSQUEAM INDIAN BAND CLAIMS

MR. D.A. ANDERSON (Victoria): To the Minister of Lands, Forests and Water Resources: may I ask him whether he and his department have rejected the claim of the Musqueam Indian band to the foreshore on the river and hunting on their reserve? If he has rejected it, who indeed does own this property?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): The short answer is, yes, Mr. Speaker, these tidal lands are viewed as Crown provincial land, and actually are under the bed of the river, the north arm of the Fraser. We indicated to the Musqueam band representatives and their manager that we were prepared to enter into a long-term leasehold agreement with them that would not have been at a market rate, but would have some relation to the market. That is, there would have been a beneficial interest in that regard. It is my understanding that that was unacceptable to the band.

VETERANS' LAND SETTLEMENT ACT
REQUIREMENTS FOR CROWN GRANTS

I have the answer to a question from the Hon. Leader of the Opposition (Mr. Bennett), Mr. Speaker. While he's not here again today, I don't know if I should follow his pattern and not provide answers when he's not here. However, his question was with respect to the veterans' land Act and Crown grants in relation to the federal-provincial agreement. I would state that the agreement is still enforced and the following guidelines which prevail have not changed — they are: the maximum acreage is 160 acres for agricultural purposes; the parcel must have reasonable access and must have a minimum of 50 per cent arable land; the minimum acreage is three acres, or two acres if the veteran is disabled — these are primarily for home site purposes and land must be suitable for that purpose and also have reasonable access. Further, applications are not approved if our examination discloses that guidelines noted are not satisfied or that the Crown lands are under a reserve for any purpose or that the location and value of the Crown lands are such that the public demand and interest indicates disposition by public competition or if the lands contain valuable timber stands or are waterfront land, and the Crown lands do not comply with local zoning and land-use codes.

The policy has not changed, Mr. Speaker.

MUSQUEAM INDIAN BAND LANDS

MR. D.A. ANDERSON: A supplementary to the previous reply of the Minister. May I ask the Minister of Human Resources, who is generally responsible for matters affecting Indian bands, whether he will be providing financial assistance for the Musqueam band to appeal the decision of the Minister of Lands, Forests and Water Resources and his department with respect to the ownership of the foreshore lands fronting on the Musqueam land which have no access except over the reserve itself?

HON. N. LEVI (Minister of Human Resources): Mr. Speaker, I haven't heard anything from the Musqueam Reserve. I can't really comment on the Member's question; I haven't heard anything.

MR. D.A. ANDERSON: Right. Well, you will.

POSSIBLE EXPANSION OF
TEACHER-TRAINING PROGRAMME
AT UVIC AND UBC

MR. WALLACE: Mr. Speaker, I ask the Minister of Education with regard to the teacher-training programme at UVic and UBC: in light of the fact that 1,500 applicants applied for 275 places, is the Minister considering any expansion of the programme?

HO&. E.E. DAILLY (Minister of Education): I'd like to be able to say that we can do something about it immediately, but I'm sure the Hon. Member realizes it is impossible for the staff and the facilities to be geared up for this summer any further than they have already done.

We will certainly be prepared to assist them in expanding next year, if the need is there next year. But it's certainly pleasing to know that we have that number of interested applicants. I regret they all couldn't get in.

MR. WALLACE: Supplementary, Mr. Speaker: with the teacher shortage and the plans the Minister has announced, can she tell the House if she has any plans to utilize the training and expertise of unemployed teachers, such as Mrs. Blanchett who has been picketing the front door of the Legislature? And to save a moment, could I just ask also if she has any

plans to discuss with the B.C. Teachers' Federation the right of a teacher to accept employment in a lower classification if this is the teacher's wish while unemployed?

HON. MRS. DAILLY: I am always prepared to discuss with the B.C. Teachers' Federation any area of necessary change. But I think it has to be pointed out to us that this is a necessary area to change. At this moment I'm not convinced of that.

The second point is: as you know, as Minister I have no responsibility for the direct hiring or firing of teachers.

POSSIBLE VENDETTA AGAINST
NORTHWOOD PULP AND TIMBER

MR. J.R. CHABOT (Columbia River): A question to the Minister of Lands, Forests and Water Resources: is there any truth to the charge made that you are carrying out a personal vendetta against Northwood Pulp and Timber because of their noncompliance with your order to deliver wood chips to Eurocan?

HON. R.A. WILLIAMS: I am shocked at the suggestion, Mr. Speaker, and I'm sure that the Hon. Member for Columbia River is as well.

MR. CHABOT: Supplementary question: when will they be awarded a timber sale on which they were the only applicant in the Houston area, which has been pending for some time?

HON. R.A. WILLIAMS: I would note that the company did not comply with all the terms set out for bid proposals, and that is a matter of some concern. The decision will be made shortly.

TASK FORCE RECOMMENDATIONS
FOR JERICHO HILL SCHOOL

MR. D.A. ANDERSON: To the Minister of Education: is the Minister now in a position to indicate what steps will be taken to implement the recommendations of the task force on the Jericho Hill School so that the staff can be increased and the student-teacher ratio can be lowered to at least the Canadian average for schools for the deaf?

HON. MRS. DAILLY: Just the beginning of your question…but with reference to the situation at Jericho, I informed the House before that I am having a full report prepared for me. That is now with me and I'm going to make an announcement with reference to that report, hopefully tomorrow.

Orders of the day

HON. D. BARRETT (Premier): Public bills and orders, Mr. Speaker. Report on Bill 91.

POLICE ACT

Bill 91 read a third time and passed.

HON. MR. BARRETT: Report on Bill 102.

Bill 102 read a third time and passed.

HON. MR. BARRETT: Report on Bill 124, Mr. Speaker.

Bill 124 read a third time and passed.

HON. MR. BARRETT: Report on Bill 138, Mr. Speaker.

Bill 138 read a third time and passed.

HON. MR. BARRETT: Report on Bill 147, Mr. Speaker.

ASSESSMENT AUTHORITY OF
BRITISH COLUMBIA ACT

Bill 147 read a third time and passed.

HON. MR. BARRETT: Committee on Bill 134, Mr. Speaker.

INSTITUTE OF TECHNOLOGY
(BRITISH COLUMBIA) ACT

The House in committee on Bill 134; Mr. Dent in the chair.

Sections 1 to 4 inclusive approved.

On section 5.

HON. E.E. DAILLY (Minister of Education): Mr. Chairman, I move the amendment standing in my name on the order paper on section 5. (See appendix.)

Amendment approved.

Section 5 as amended approved.

On section 6.

MR. D.A. ANDERSON (Victoria): Mr. Chairman, in the second reading of this bill I asked the Minister a few questions about the relationship of the people employed at BCIT as teaching staff, and how the new situation and the new bill would deal with this. The Minister may want to comment now, or perhaps during section 8 she would like to say a few words, make a statement so that the many questions which I have raised over a fair length of time….

Interjection.

MR. CHAIRMAN: Order, please! The Hon. Minister has indicated she will comment on section 8.

MR. D.A. ANDERSON: Oh, that's fine.

Sections 6 and 7 approved.

On section 8.

HON. MRS. DAILLY: Mr. Chairman, I move the amendment appearing in my name under section 8. (See appendix.)

I would just like to comment on that, Mr. Chairman. The purpose of this amendment is to ensure that the intent of the legislation can be carried out legally. The intent here, of course, is to give the opportunity for the staff of BCIT to decide on the union of their choice. Unless this amendment had appeared they would have remained under the BCGEU. This now gives them, once it is proclaimed, the opportunity to decide on the union of their choice.

MR. D.A. ANDERSON: I would like to thank the Minister for her statement and also for the amendment. It's a point that I've tried on a number of occasions in this House. She's clearly been listening to our representations and of course representations also for the amendment. It's a point that I've tried to make on a number of occasions in this House. She's clearly been listening to our representations and, of course, representations from the people directly concerned, the staff involved. I appreciate the fact that she has taken this to heart.

Section 8 as amended approved.

Sections 9 to 11 inclusive approved.

On section 12.

HON. MRS. DAILLY: Mr. Chairman, I would like to move the amendments appearing in my name after section 12. (See appendix.)

Amendments approved.

Section 12 as amended approved.

Section 13 approved.

Title approved.

HON. MRS. DAILLY: Mr. Chairman, I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 134, Institute of Technology (British Columbia) Act, reported complete with amendments to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill 151, Mr. Speaker.

ASSESSMENT ACT

The House in committee on Bill 151; Mr. Dent in the chair.

HON. MR. BARRETT: I ask leave to withdraw the bill from committee, Mr. Chairman, until the amendments are printed.

Leave granted.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee requests leave to ask that Bill 151 be withdrawn from committee.

Leave granted.

HON. MR. BARRETT: Mr. Speaker, adjourned debate on second reading of Bill 85.

PUBLIC OFFICIALS AND EMPLOYEES
DISCLOSURE ACT
(continued)

MR. P.C. ROLSTON (Dewdney): I just wanted to add there's been a lot of discussion I realize on this and people have had a chance to be hysterical, some people, but most of them have been quite rational and I'm sure that everybody in this House will vote for this bill.

But I want to say something about another aspect which I don't think has been really emphasized. I want to tell you very briefly a very true story, and I'm lifting this out of a sermon that a colleague of

mine preached about a year ago.

Last June, a year ago, Mr. Speaker, at what is probably if not the most prestigious university in the United States, one of the most prestigious, Princeton, there was a graduating ceremony. It was the day of the Honours grads getting their degrees. There was a moving thing happened which I think underlines my concern that this is not just disclosure by the elected people in this province and senior staffs as designated by municipalities. They are not the only people that are always in trust with this beautiful province and its wealth.

I want to comment about all of the people, because I think this goes beyond just those people to all of us. At this graduating exercise I guess the students didn't realize that there was going to be an Honorary Doctor of Law given to George Schultz whom you remember, Mr. Speaker, was the secretary of the American Treasury, and I guess ranking with Mr. Kissinger (U.S. Secretary of State), one of the most powerful people in the U.S. cabinet, a man who just a few weeks earlier as the most powerful financial man in the United States had refused money to nearby neighbourhood self-improvement projects and many others, I think, very innovative projects. At that time money was seen going to very questionable projects.

At the closing of this ceremony at Princeton, Mr. Schultz came up to the podium to receive the Honorary Doctor of Law, and quietly but very deliberately and very politely many of those Honour students left that assembly hall. My colleague's two sons who were receiving an Honours degree also very quietly left their seats. They just couldn't see George Schultz, this very powerful man, this man who many people saw standing for everything they didn't want to see in the United States, receive a degree.

These people left, and my friend, I guess like many people, was torn as to whether he should stay. But he did stay. And later on he questioned whether he shouldn't have got up and disclosed how he felt about that man and about the questionable practices of this very powerful person.

You know, I think that as we talk about Bill 85, I see now that the amendments are incorporated in the bill for us to look at. But a lot of people have got to see that it's not just the elected people and the pressures on them and the temptations on them and the often difficult decisions they have to make. I gather that at the municipal level it is especially tempting.

There are constant delegations asking for favours. They might not say they are favours, but they appear to be favours — whether it's approving subdivisions or whether it's approving utilities to go into subdivisions. Certainly the people at the municipal level, even more than these MLAs here, are constantly barraged and pressured. At times, in a very subtle but sometimes a very clever way, they can be manipulated. That is a pressure.

I believe that all elected people and people close to the…. I'm thinking of the approving officers and the planners and the people at the senior staff levels of municipalities. I think that they are going to welcome this kind of release, this kind of sunshine, this kind of recognition of their pressure — that they are encouraged and will be expected to disclose their ownership and any possible conflict of interest they might have.

But it's not just with them that we talk. We talk about all the people who, I feel, need to be honest with themselves — who are at times sometimes using their influence and their opportunities. A lot of people, even some municipal people, Mr. Speaker, say that you can't trust a politician.

I've met municipal elected people who say that, well, they're not a politician — usually meaning, first of all, that they're not a member of a political party or they're not a partisan mayor or alderman. But they're often sometimes saying: "You know, we are honest in that we are not politicians. We are honest." That's subtle, but I think it hurts. I think it would hurt a lot of the Members here.

It's just a misunderstanding of what it is to be a politician. I'm sure the Member for West Vancouver–Point Grey has heard this, that even elected people say they are not political. The word "political," as I understand it, or the word "politic" is simply people. Maybe people-power is a description of what politics is about.

So I believe that this legislation is going to really give us greater sense of dignity. I hope it's going to help us with the apathy and indifference and the cynicism that elected people are under — the gossip, especially in smaller towns.

I was even told by one person last week that I hadn't cut my grass; it had rained so much that I hadn't had a chance to cut the grass. There's even that kind of small talk. I'm referring now back to a fairly significant person in my home town who was saying: "Well, you know, Rolston, you don't even cut your grass."

Now we sometimes have to deal with that kind of smallness. So it's my hope that this material before you, which is a disclosure, which is not just something in a sealed envelope…. It's a disclosure, and presumably it will be available to read in the Gazette or whatever.

Interjections.

MR. ROLSTON: Or in The Vancouver Sun or the Mission paper. It is a straight disclosure and I hope that it will create a greater sense of trust and confidence. I see that two of the candidates for the federal election in Victoria, if I quote the paper right,

are shocked at the apathy and indifference and the lack of trust in politics.

I hope that this does something to get all of us off of our seats, just like at that assembly, and having a greater confidence in the parliamentary system that we operate in.

Of course, none of us, as elected people, are private citizens any more. Our telephones ring at odd hours. We are under scrutiny. We do live in a goldfish bowl, and that's part of the cost of being an elected official. I think it's appropriate that yesterday we had first reading of the Constitution Act. I certainly hope that there isn't cynicism about the sensible, businesslike arrangement where we'll be paid quarterly.

I noticed that sometimes the same cynics about this Act earlier were the same people who were cynical about MLAs being paid a decent, proper salary of $16,000 a year. So I support this and I hope that it gives greater self-esteem, greater confidence. I realize that with this disclosure we are hoping that we are preventing frauds.

We are hoping in a sense that this is a protection not just to the elected official but to the people in his jurisdiction. By being honest and straight with the people whose business we are entrusted with, and by disclosing, we can hopefully — and I don't want to be naive as I say this — elicit some kind of trust from them that there can be some kind of responsibility from them.

Interjection.

MR. ROLSTON: Yes, many do but some don't. So I believe that this is most appropriate.

I want to finally assure the House that I wrote every school board and regional district and municipality. I received, I think, about four helpful letters. Many of the suggestions of those letters have been incorporated in the amendment. I trust that all MLAs wrote and got some material from their elected people.

Interjection.

MR. ROLSTON: I'm sure. But I believe that this is a very constructive, positive thing. You know, unless we support this, I think democracy will suffer.

MR. A.V. FRASER (Cariboo): I think that I should say a few words on this — first of all, to say that I'm certainly in favour of Bill 85 as amended. I also want to say a few other words.

First of all, I can't equal the record of the Minister of Mines (Hon. Mr. Nimsick) in public service; but at the present time this is my 24th consecutive year in public life. I would just like to give some of my thoughts to the House about this bill.

I think, Mr. Speaker, it's a myth to say that our citizens feel that most public people are crooks. I don't think the public feel that way at all about the majority of or all of the public service people. I hope that there was no intent in this bill as it is amended that intimated that.

While I'm quite critical of the Attorney-General and the manner in which he brought in a bill a year ago, it was withdrawn. Then he brings in the original Bill 85 this session and repeated his same mistakes all over again. I'm very critical of that and I think public life has suffered because of this procedure in the way this bill has been handled.

I refer to the commotion that went all over this province when Bill 85 was brought in, making the reliable elected people come down and beg for amendments. I can't understand why submissions weren't asked from reliable elected bodies in this province prior to the introduction of Bill 85. I particularly refer to the Union of B.C. Municipalities and the B.C. School Trustees Association.

Really, the bill was brought in and they were asked for their advice after. That was the cause of the amendments. As we all know, the amendments change the bill completely.

Another thing that's happened, Mr. Speaker, with all this fumbling, burnbling around by the Attorney-General, is that we've lost some good — I assume, good — people in public life. You know, I don't support their view; they have resigned from office and they're gone.

Apart from the individuals concerned, there is one village in my riding where I don't think they've got a civic government today, and I blame the Attorney-General for that. Two of the aldermen resigned and the mayor is away and they can't even call a council meeting. With the two that resigned there are only two left, and they haven't got a quorum with that council to do the business. I refer to the Village of Cache Creek.

I want to read you part of a letter of one of the aldermen that has resigned. He has no intention of ever serving again, as I understand it. It's very interesting, Mr. Speaker. This is a letter from Charles Roberts, ex-alderman, Cache Creek. It's written to members of the Press of the Province of British Columbia. I wish to open this letter. It was addressed:

"To my supporters in the municipal election of 1972 to my position as alderman for the Village of Cache Creek, and their continuing confidence since that time. I wish to advise that I have submitted my resignation to the village clerk at 9 a.m. this date.

"As you are probably aware, I was a strong supporter of the New Democratic Party, both provincially and federally, during the past number of elections, since 1969, having served a term of office as president of the Cache

Creek-Cariboo provincial constituency."

Just an interjection here, Mr. Speaker: this man knocked on doors against me in the 1972 election.

"I take this opportunity to publicly state that I am no longer associating myself with the NDP, either provincially or federally. The straw that finally did its job was the present legislation before the House, Bill 85, the Public Officials and Employees Disclosure Act.

"I find this bill completely opposed to my principles and after much reflection on the ramifications of such legislation on the personal affairs of any person within the jurisdiction of the, bill, I have concluded that we no longer have a people's government, but the imposed will of the legislators in power.

"This party in pre-election campaigning preached a platform of democratic socialism. However, it would appear that they are using their office to destroy the democracy of individual freedom, and are setting themselves in a position of Big Brother. And in my case, as no doubt in many others, I literally have been assassinated politically by Big Brother."

I say, Mr. Speaker, that it is rather ironic — this man was a good public servant and because of Bill 85 in its original form he's gone, one of his colleagues resigned and another man has gone. I'm amazed the Member for Yale-Lillooet (Hon. Mr. Hartley) hasn't got up to say something — the mayor of Ashcroft has resigned.

Really, what has happened is that because of the sloppy drafting of Bill 85 and its original intent, it has put municipal government in a turmoil.

Now I don't know when the Village of Cache Creek can pay their bills because they haven't got a quorum of council. I blame the Attorney-General, through the original filing of Bill 85, completely on that. I say to him that surely the local elected people, whether they be at municipal level or school board level, have many problems these days running their different municipalities and school boards. And I don't think this sort of treatment should be inflicted through what has happened in the drafting of this bill.

I would remind the people…. I think a few have said something, but people who assume an elective office in this province take an oath of allegiance and an oath of office, and they were not just running on the seat of their pants, there were lots of guidelines. I think over the years we've had excellent public people here.

I would just say in conclusion, Mr. Speaker, that I hope this bill doesn't discourage other well meaning people from seeking public office, whether it be MLA, school board or municipal council, and that it will increase people who will come forward. And I can assure you that with the amended form the bill is in, I will be voting for the bill.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, the principle of this bill has been well canvassed and I will be brief, just adding a couple of, hopefully, new ideas.

First of all, I support the principle and motion of disclosure. I see, however, some problems with the way that principle is manifested in this bill. The first problem is the way it was introduced, as was just raised by the Hon. Member for Cariboo. The fact that this bill had first reading on May 2 and had a deadline for public officials on May 31 forced many good public servants around this province to come to untimely decisions resulting in some cases in their resignation. The Hon. Member for Cariboo mentioned some. I think as well of Mayor Oscar Johansen of Ashcroft and others around this province.

There's no way now that can be redressed, unfortunately, but it is a matter to be noted with sorrow. And I hope in introduction of future legislation that this government will seek to avoid those kinds of time pressure points which do force untimely decisions.

The second point I would raise is that this bill fails to make a distinction between legislative public servants and executive branch public servants. The theory may be that all MLAs in this chamber are equal, for example. But the fact of the matter is that a backbencher on the opposition side has much less influence over the course of the government, and in particular the executive actions of the government, than does a Minister or even a backbencher on the government side.

It seems to me that disclosure requirements ought to take into account the far greater powers held by Members of the executive branch. It seems to me in particular that Ministers and senior public servants should be subject to even closer disclosure requirements than are other public servants throughout the Province of British Columbia because they do have such enormous power at their disposal.

The Act provides for designation of specified public servants as failing within its purview. I would ask the Attorney-General when he closes debate on second reading if he could give us some outline of the kind of persons that might be designated and how soon these designations would be made. I would assume, just naturally, that Deputy Ministers, Assistant and Associate Deputy Ministers and those sorts of officials will be included. But will he be including Crown corporation presidents? Will he be including executive and special assistants to Ministers? Will he be including special advisers and consultants to Ministers? Special advisers to, say, the Minister of Housing and the Minister of Public Works can make recommendations of enormous financial consequence that ought to be as readily protected by

disclosure as are the other persons covered by this Act.

I would ask him as well if he could, in closing debate on second reading, do his best to explain to this House why there should be a differential in the treatment between senior public servants who are not elected and elected persons, to the extent that elected persons are subject to complete public disclosure whereas non-elected public servants are subject to only conditional disclosure — that is disclosure to their employer, to the head of the particular department, municipality or whatever might be involved.

I would ask the Minister what is the reason for this difference because in many cases these senior non-elected public servants will, in fact, wield more power through their membership in the executive branch than will the elected people in this Legislature or in the councils and school boards of British Columbia. It seems to me that's a differential that is rather hard to sustain. I wish that the Attorney-General would explain why that is in there. I personally must question that aspect very much indeed.

I believe as well with the leader of my party, as he noted yesterday, that it's better to have disclosure to a trustee clerk at each level of government rather than at each level of government.

HON. G.R. LEA (Minister of Highways): Who is your leader?

MR. GIBSON: The only leader of my party, Mr. Minister.

In other words, a kind of a conditional disclosure to the clerk of each council or to the secretary-treasurer of the school board, to the Speaker and Clerk of the House or whatever.

With all these what I see as defects, I nevertheless support the principle of the bill, and would appreciate the comment of the Hon. Attorney-General on the questions I've raised.

HON. MR. BARRETT: Mr. Speaker, I intend to support the bill. I never had any intention other than to support the bill. But when we have the kind of debate that we've had on this bill, I think it's important to have a few words on the record.

The history of this bill was that a draft was brought in one year ago. The total community of the Province of British Columbia was apprised at the fact that this government had intended to move toward a disclosure bill. The Attorney-General brought it in, asked for community discussion, withdrew the bill and let the matter rest for a year. So for anyone to claim ignorance, that they didn't know this government intended to have a disclosure bill, I have no sympathy for them whatsoever. There was a whole year.

Secondly, once the bill was introduced, the immediate emotional response of some Members of the official opposition, namely one Member, the Member for South Peace River (Mr. Phillips) who labelled this bill as Gestapo tactics….

AN HON. MEMBER: Right on!

HON. MR. BARRETT: Now he's labelled the bill as Gestapo tactics, but I'll bet you my bottom dollar his party will vote for it.

MR. D.M. PHILLIPS (South Peace River): Vote no, after five pages of changes.

HON. MR. BARRETT: Well now, we'll talk about the changes, Mr. Speaker. They are using the amendments, which have strengthened the bill, as an attempt to get away from their original position. If anybody was stampeded into resigning it was because of the irresponsible statements of the official opposition.

I was on a radio hotline show when in the City of Kamloops shortly after the Member for Columbia River (Mr. Chabot) had been in that town speaking to a very large crowd of some 40-odd people and the former Minister of Highways and Minister of Human Resources (Mr. Gaglardi), who resides in that town — that would make 45-odd people. (Laughter.)

The Member got on the radio apparently and left the impression with this radio hotliner that this bill was dangerous, this bill was going to destroy democracy in the Province of British Columbia. The radio hotliner, responding to these comments, said, "You've got to withdraw this bill." I said to the radio hotliner, "Have you read the bill?" He said, "No." Now I wonder how many municipal people and how many Members of the opposition read this bill before they ran out into the corridor screaming, "Gestapo tactics."

We tell you this: if you are against this bill, don't stand up in this House and tell us that you're against the bill, you don't like the idea, you don't like the way it was done, but you're going to vote for it when the debate is over.

Interjections.

HON. MR. BARRETT: Mr. Speaker, all the interruptions, all the yelling, all the uncomfort of the official opposition won't erase the record that when the bill was introduced that Member in that corner called it Gestapo tactics. At this very moment while we are debating this bill the Liberal government in the Province of Quebec has brought in a bill that is much stronger than this one.

HON. R.M. STRACHAN (Minister of Transport

and Communications): Stanbury told me his was much stronger than ours.

HON. MR. BARRETT: Much stronger than this one, Mr. Member, through you, Mr. Speaker. The Liberal bill in the Province of Quebec goes much wider. It involves wives and spouses. You can't have it both ways, Mr. Speaker, to run around the countryside and say that they are Gestapo tactics but come back in the House and vote for the bill. If you really believe what you are saying stand up and vote against the bill.

Interjections.

HON. MR. BARRETT: You know, Mr. Speaker, I love to hear all the interruptions…

Interjection.

HON. MR. BARRETT: …all the bad manners of the official opposition, all their giggling, all their laughing, but it's all guilt inspired. They've made a mistake.

I can hardly wait for the division bell to ring on this bill because every single one of them will stand up and vote for it. Every single one of them will stand up and vote for it and we'll have to sent the record out to those municipal officials who quit and say: "Look here — the Socreds voted for this bill, Look here — the Liberals did and the Tories did, too."

MR. PHILLIPS: Wipe that smile off your face.

HON. MR. BARRETT: The Tories said they would.

MR. H.A. CURTIS (Saanich and the Islands): Get that on the record.

HON. MR. BARRETT: That's right. The Tories said they would and I said that on the record. The Liberals never took the position that the official opposition did. The official opposition played it both ways and now we'll have a chance to see how they go on the record.

Interjection.

HON. MR. BARRETT: Oh, Mr. Member, all the loud hollering and yelling and interruptions you do won't take away that headline when you deliberately set out to create fear in this province.

Interjections.

HON. MR. BARRETT: Yes, and the Leader of the Opposition (Mr. Bennett) stated that this was the worst bill that the socialists had brought in.

AN HON. MEMBER: He won't be here.

HON. MR. BARRETT: How would you know? He doesn't spend any time in the House anyway.

MR. PHILLIPS: That really bothers you, doesn't it?

HON. MR. BARRETT: Not at all, Mr. Speaker, but if a man is going to take a position and run for public office, make public statements against a bill and then not come to the House and back up his statements and have his party vote contrary to those statements I ask the public to measure them very closely.

MR. N.R. MORRISON (Victoria): Small wonder that people get upset about this kind of bill.

HON. MR. BARRETT: Vote against it.

MR. MORRISON: I don't propose to vote against the amended bill. But let me tell you some of the things that you've taken out of that bill that upset people and annoyed them and infuriated them.

HON. MR. BARRETT: Vote against the bill.

MR. MORRISON: Let me just talk about one section — and there are others equally as bad but let's just talk about this one….

AN HON. MEMBER., Vote against it.

MR. MORRISON: I don't intend to vote against it. I've said that from the beginning. I didn't intend to vote against it when it was first put out. But I must confess….

AN HON. MEMBER: Your leader said it was the worst bill that….

MR. MORRISON: I didn't say it was.

AN HON. MEMBER: Well, what party do you belong to?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): I heard you were going to resign.

MR. MORRISON: I'll tell you frankly that I seriously considered resigning because of it. Let me read you some of the reasons why I considered resigning. Let me just talk about section 3 on page 2 of the original bill — not the amended bill. The bill

affected people who were in business, who had limited liability companies and who were required to disclose those companies. Now, I have no objections about disclosing the fact that I have shares in a company. But some of the sections that you have removed from this bill were the requirement that in any company in which an individual owned more than 30 per cent of the voting stock, which affects a high majority of people who are in small businesses and they are limited liability businesses…. This doesn't affect people who are in giant corporations but it does affect people in small businesses.

Interjection.

MR. MORRISON: Those companies where they have more than 30 per cent of the voting stock were required to publish an audited balance sheet. Now, maybe you've never read a balance sheet of a small company.

MRS. P.J. JORDAN (North Okanagan): He wouldn't know how, obviously.

MR. MORRISON: Further, not only did they have to publish an audited balance sheet every six months…and people objected strenuously to have to do it a second time. It's bad enough to have to pay an auditor once a year to have an audited balance sheet but to be required to do it twice a year was incredible. And then that balance sheet further had to list — and this is the section which most people were most irritated about, section 3(3)(d) — a list and description including the location of every asset owned by the corporation or by a subsidiary within the meaning of the section of that Act.

When I spoke to the Attorney-General when this Act first came down — I'm not referring to the amended Act but to the original Bill 85 — the very first question I asked him was: "Can you give me a description of an asset?" The Attorney-General was unable to give me a description of an asset. I don't find it in the definitions section of the amended bill because that section is removed.

Furthermore, the section removes the requirement for a shareholder of a limited liability company who owns more than 30 per cent of the voting shares to file an audited balance sheet. I don't think there are any people around who object to knowing where their interests lie. I have no objection to telling you or anyone else the shares of the companies in which I have an interest. But I do have an objection, and I want to tell you how strongly I feel about it, to file an audited balance sheet which can be made public, published in the newspaper and available to anybody. Those of us in business all know that we do now file, under the Companies Act, audited balance sheets.

MR. PHILLIPS: Those were the Gestapo tactics.

MR. MORRISON: But we also know who has access to those balance sheets.

AN HON. MEMBER: The public shareholders.

MR. MORRISON: The shareholders have access to them and people with sufficient reason for a court order have access to them. But even after they have had access to them that information is still private. It cannot be published. But this section — the section which was so offensive, the section which most people seriously objected to — has been removed in the amended bill. And all the flak that we've heard here as we discussed this bill is just exactly that — flak. Once you removed that offensive section from the bill, there isn't a reasonable individual, I'm sure, that would object to filing where his interests lie. I don't blame that man for saying what he said. I thought it, and I'll be frank on the record that I thought exactly that. I didn't say it but I thought it.

I may go further and tell you on my own particular instance many, many years ago I formed a limited liability company in which I gave some shares to my family. Over the years those shares have appreciated in value. At this moment none of my children are minors. But while they were minors I did not see fit to disclose to them what those shares consisted of and what their net worth was.

MRS. JORDAN: Right on!

MR. MORRISON: Now, since they are no longer minors they have the right to go to the company's registered office to look at that balance sheet and to look at those assets to know exactly what they consist of. I assure you that my children have done exactly that. They know where they stand. But while they were minors I did not see fit to tell them or to show that balance sheet to them because I acted as their trustee. I'm sure that the people out in the Province of British Columbia today who were affected by that section felt exactly as I did. Now I am glad to see that the Attorney-General listened to them. He has removed that offensive section.

Interjection.

MR. MORRISON: They've not disclosed their shareholdings. That's a completely different situation.

HON. A.B. MACDONALD (Attorney-General): And their land and their shares in other companies.

MR. MORRISON: No one is quarrelling about that section. The Attorney-General singles out what to me is a most curious section. The only piece that he

seems to be concerned about is their land. It seems strange to me that that threat follows through in everything they do. There are many other assets, Mr. Attorney-General, besides land.

Interjections.

MR. MORRISON: There are many other things that people are just as interested in as land. But that strange, curious thread continues to turn up in bill after bill. It's an absolute obsession.

AN HON. MEMBER: Vote against it.

MR. MORRISON: I've told you that I don't intend to vote against the amended bill. But I assure you that if you brought that bill in and left it the way it was I would vote against it. And I assure you that I would seriously consider resigning because of it.

HON. MR. MACDONALD: Mr. Speaker, there have been some points raised in the debate that I would like to briefly reply to and then say something about the main point that's being made by the Member for Victoria (Mr. Morrison).

The leader of the Conservative Party (Mr. Wallace) said the person who sought information from a disclosure return should sign his name and give some reason for doing so. I really think that is a ridiculous suggestion. I would hope and expect that the important returns would be publishable in newspapers. There's power under the bill for us to direct that they be published in the B.C. Gazette. Why should an individual have to go into an office and give some reason as to why he wants to look at what is essentially a public document? What's he going to say? "I suspect the veracity of so-and-so and I want to look at the return"? I just hope that suggestion of the leader of the Conservative Party will go no further.

These returns should be open to the people concerned, and they are the voters of the province. That's the basic issue on which the official opposition over there refused to bite the bullet. They wanted, as this Member for South Peace River (Mr. Phillips) says already, disclosure in secrecy. Yes, let there by disclosure, but keep it secret. Clubby, closeted, friendly, cosy, and ultimately corrupt. Yes, that's what you're saying.

MR. PHILLIPS: That's a false accusation and you know it.

HON. MR. MACDONALD: That's what you're saying. But you felt the political winds blowing and you're trying to pull yourself together. You're afraid to vote against this bill. In your hearts you hate this bill. In your hearts you still hate this bill but you're afraid to vote against it.

MR. PHILLIPS: Your own party made you change it.

Interjections.

HON. MR. MACDONALD: We strengthened the bill, do you know that? (Laughter.) We did what democracy says that we should do. We filed the bill a whole year beforehand.

AN HON. MEMBER: You bungled!

HON. MR. MACDONALD: We heard from the Union of B.C. Municipalities; we heard from the school trustees all through this year. When we filed the new bill we listened again. We had demands out in the community that the bill should be extended; it was not sufficient that elected people should file disclosures but that it should apply to candidates. We thought that was a perfectly valid position and we extended the bill. We extended the bill to municipal officials who may have zoning powers in their hands and who also want to be designatable by municipal councils. That's what most of the amendments are about: extending the bill in those two important directions.

If you thought, Hon. Member, that it was Gestapo tactics in the first place, why isn't it worse than that — if you could find the right word — now that we have fortified and extended the principle?

The Member for Victoria is simply saying this: we made some technical amendments to section 3. They were valid but they were not matters of principle. We are still determined that in the personally-held corporation, into which otherwise a politician could hide his assets from disclosure, light will penetrate. So we have written it right out in this Act. Whether you try to hide behind a personal holding company or not, you must disclose the shares of that company, the nature of its business and the land that it holds. We do attach importance to politically elected people disclosing their land holdings, No doubt about it; nothing sinister about it. We do attach importance to that kind of disclosure.

There has been a lot of political hanky-panky revolving around land deals in the Province of British Columbia. Where we have the chance to do something about it, that's exactly what we will do — whether you cry Gestapo tactics or whatever other phrases you use.

I heard Mayor Vander Zalm, that great new recruit of the Social Credit Party, going on the radio in Vancouver and resurrecting the late Adolf Hitler, saying that this was a Hitler bill and it was Nazism all over again; and how the poor fellow had come from Holland, which was so close to the Nazi heel. He

came here and the disclosure bill was the same thing all over again. Now he has joined your party. He hates this bill in his heart of hearts, just as your leader (Mr. Bennett) hates this bill. He has said so in the papers and he is afraid to turn up here today to vote for it.

He won't be here to vote for it, will he?

AN HON. MEMBER: No sir!

HON. MR. MACDONALD: And after the statement he made, how could he? Your leader has denounced this bill because he has been afraid of the whole principle of disclosure. He has filled the order paper with the kind of clubby, closeted, cosy disclosure in secrecy that he was willing to opt for. Look at his amendments. If he believes that, why is he supporting the sunshine principle of this bill?

The opposition are being dragged kicking and screaming into voting for this bill, which in their heart of hearts they hate. But a little sunshine should be as good for them as it is for anyone else, Interjections.

MR. SPEAKER: Order, please!

MR. D.E. SMITH (North Peace River): I've got a point of privilege.

MR. SPEAKER: Will you kindly state your point of privilege?

MR. SMITH: During the dissertation we've just listened to, the Hon. Attorney-General inferred that anyone who did not like the first draft of the bill was, in his words, "a person or a Member of this House who would become eventually corrupt." I ask the Attorney-General to withdraw the inference that any Member of this House is or will be eventually corrupt in their dealings with the public.

Interjections.

HON. MR. MACDONALD: That is an implication I had no intention of making. I withdraw it unconditionally. I don't think I said that; but if I did, I certainly didn't intend to.

Interjections.

HON. MR. MACDONALD: I'm sure the Hon. Members would not take it on either side that that was intended. I think that is perfectly clear.

Motion approved unanimously on a division.

Bill 85, Public Officials and Employees Disclosure Act, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MR. BARRETT: Adjourned debate on Bill 31, Mr. Speaker.

MINERAL ROYALTIES ACT
(continued)

MR. GIBSON: I brought along a few notes on this bill, Mr. Speaker. I'm glad the Premier's here today. I hope he's not leaving right away, because he has a chance to recant on some of those numbers he was using.

HON. MR. BARRETT: If you will allow me, Mr. Member, I was incorrect in quoting on Kaiser figures. I had those transposed. I wish to correct that error.

MR, GIBSON: And perhaps with Bralorne too?

HON. MR. BARRETT: No, Mr. Member, I'm advised that the figures we used on Bralorne were absolutely correct.

MR. GIBSON: Except for the fact that it didn't come from mining revenue in British Columbia.

HON. MR. BARRETT: Their interpretation be as it is…. (Laughter.)

AN HON. MEMBER: Come on, Davey!

HON. MR. BARRETT: The figures I gave were absolutely correct.

AN HON. MEMBER: What a transposition! (Laughter.)

MR. SPEAKER: Order, please.

HON. MR. BARRETT: Where's your leader?

MR. GIBSON: There seems to be a moderate difference of opinion on that one, Mr. Speaker. I think the record will speak for itself on that one.

HON. MR. BARRETT: Okay.

MR. GIBSON: The Premier in his remarks the other night missed a good deal of the point of what this debate is all about. I'd like to just briefly go over some of the things he said. He said that we were talking about control and husbandry of the mineral resource and that those who opposed this bill were opposing that kind of concept.

Of course, that's nonsense, Mr. Speaker. What this bill is about is the taxation of the mineral resource of this province, and in what way, in what manner, the

tax funds should best be returned to the people of this province.

I think that there will be found very widespread agreement in this House that there should be higher tax revenues in years of extraordinary profits in the mining industry.

He quoted a 1971 statement by the Mining Association of British Columbia Price Waterhouse report to the effect that the mining industry in British Columbia as seen from that point was slowing down and that the mining industry itself expected investment to go down. "Therefore," said the Premier, "what should be more natural than that we should now see signs of the investment going down?"

I don't know if he read that report completely, Mr. Speaker, but he didn't quote the entirety of it. Because it did say, indeed, that forecast expenditures for 1972 totalled $104 million, while those in subsequent years are expected to reduce even more sharply from the record 1971 level as Fording, Gibraltar, Utah, Lornex, Similkameen, Noranda and other committed properties approach completion.

But what he did not say, Mr. Speaker, was the following sentence: "Not included are preliminary projections and tentative plans for '73 and subsequent years, which expenditures in part will depend upon the results of feasibility studies, exploration activities and financing negotiations currently in progress, as well as on such factors as world market conditions."

Mr. Speaker, because of those enumerated factors such as world market conditions, such as feasibility studies and exploration activity, there had been, up until the day that Bill 31 was introduced in the Legislature, far from a decline in projected investment in the mining industry in this province, a sharp rise of at least $1 billion worth in projects that were all ready to go. There's the Minister of Mines (Hon. Mr. Nimsick), and he knows that, Mr. Speaker. They were all ready to go. This is completely a red herring saying that in 1971 the mining industry itself was forecasting a decline.

He went on to suggest that those who opposed this bill are defending the mining companies against the people. Mr. Speaker, the people who are opposing this bill are defending the people against this government; that's what they're doing. I'm going to outline that very clearly, Mr. Minister of Health (Hon. Mr. Cocke), and outline what this bill's going to do to the jobs in this province.

He talks about a sales tax that every industry should pay and that the mining industry should pay. He chided the Minister of Mines for only charging them 5 per cent. Mr. Speaker, I ask the Premier, through you: do the loggers pay 5 per cent on the trees they take off? No, they pay a stumpage rate, which is based on their profits — an appraised royalty, Mr. Minister, which takes into account cost and is based on profit. Do the farmers pay a 5 per cent sales tax on their produce that comes up through the ground and is harvested? They don't, and you know they don't.

Do the fishermen pay 5 per cent tax on those fish they take out of the ocean? Of course they don't.

Five per cent sales tax is a complete, entire red herring. What the Premier is suggesting by this sales tax concept is that the government could say in effect: "I'm going to get mine first in this industry. Whatever else happens, I'm going to get mine first. I'm going to get mine before the people who should have had the employment in operations affected by that won't get theirs first."

The government in imposing this kind of taxation has to do an overall social accounting. They can't just do a mean, narrow accounting of what precisely are government revenues. They have to take the accounting of what the jobs are.

The Premier finally stated that the mines are still hiring, and cited that to this House as evidence that naturally Bill 31 wasn't doing any harm. The mines are hiring because some of the mines, as the Minister of Labour (Hon. Mr. King) told us the other day, particularly in the north, have 400 per cent turnover every year. Naturally they're still hiring. Mines aren't going to be closed down by this bill, not right away. Mining employment will continue. But they are going to close down sooner than they would have otherwise. I'll be demonstrating that too, Mr. Speaker.

Some people say: "Why should we bother to fight this legislation? — because it's going to pass anyway." Well, maybe it will, Mr. Speaker. I raised the other night the possibility that even if it does pass, it may not be proclaimed — that it may be just a bargaining counter for use in federal-Provincial tax negotiations. But even if it is going to be passed and be proclaimed, it still has to be fought because it is the most important piece of economic legislation in this session, bar none, including the budget. It is the most important piece.

Therefore, it has to be discussed at some length. There is a problem of procedure here. The Minister of Mines should have referred this bill to a standing committee. He should have agreed to do that and hear the expert testimony that people who work in the industry — the unions, the industry itself, the financial sector of the economy, economists, people from all around British Columbia — are anxious and eager to provide to the Minister and to his colleagues and to Members of this House as to the effect that this very complex legislation will have. But the Minister doesn't want the facts.

Interjection.

MR. GIBSON: Well, Mr. Minister, you don't seem

to have considered the facts. You've been getting a lot of representations. I've read copies of some of them and you sure haven't shown any sign of paying attention to them. Because the Minister has made this choice, Mr. Speaker, on a bill of this complexity that should have gone to committee, we're going to have to introduce in this House a lot of the evidence that should have been handled in other ways and would have led to better legislation had it been handled in other ways.

Part of this is based on a set of preconceptions. One preconception is this word "royalty." The Minister is hung up on a royalty. He's just got to have a royalty. The Mining Association came to see him and said: "What can we propose as an alternative way for this tax?" The Minister sent them back and said: "You come back with any proposal you like, but it has to be a royalty or I won't even bother looking at it." He's hung up on the idea of a royalty.

He shouldn't be saying royalty. He should be saying there is a right to a higher public return in times of excess profits. Take that approach and you go down another road and it doesn't lead you to royalty and it leaves you the same revenues.

He should be open as to his objectives. Maybe the Minister has been open as to his objectives, Mr. Speaker, but I question whether the government has. If the government in this bill is against the private sector, why don't they just say so?

AN HON. MEMBER: They are.

MR. GIBSON: I think it's clear that they are. They are against things in this economy being done by the private sector.

If they want a government equity share in the mineral industry of this province, why don't they say so? Are they trying to hide that, Mr. Speaker?

And if they want a full government takeover, why don't they say that, too, if that's the end objective of this legislation we have before us? Some of the statements I'll be reading later on on the New Democratic Party theory will indicate that that is indeed what they have in mind.

The real issue in this debate and in this bill and in mineral taxation should be: how do we get the greatest benefit for the people of B.C. from this resource? The real issue shouldn't be NDP dogma, which is what it is with this royalty idea.

This isn't the first NDP government in the country to get itself into this kind of problem, Mr. Speaker. In Saskatchewan they don't have much in the way of minerals but they do have an oil industry, so the NDP government there tackled the oil industry. Exploration has just absolutely gone to zero in Saskatchewan, just as it's doing in our mining industry.

Do you know what they have had to do in Saskatchewan, Mr. Speaker? They have had to set up a group called the Disruptive Circumstances Assistance Board. You're going to have to do the same thing here, Mr. Minister, because you have just caused some disruptive circumstances with Bill 31.

Interjection.

MR. GIBSON: You sure have. What are those disruptive circumstances? The fact that already exploration in this province has dropped by half compared to last year, and last year was lower than the year before. You've seen the figures and you haven't given a single reaction to them, so far as I know, produced by the B.C.-Yukon Chamber of Mines several days ago.

Interjection.

MR. GIBSON: The Hon. Member for West Vancouver–Howe Sound (Mr. L.A. Williams) asks who benefits from the disruptive circumstances Act, and that is indeed the service industries, the exploration service industry which has been very badly hit by Bill 31. So the government destroys the industry and then starts paying money to try and prop it up. Are you going to do the same thing with the exploration industry in B.C., Mr. Minister? Maybe you're going to have to. Up to April 30, 1974, only 3,836 claims were staked in this province as compared to 8,405 in the same months in 1973 — a drop of 54 per cent.

Mr. Minister, how can you retain a smile on your face with those figures? How can you do it? You say that's no criteria. Would you explain to the rest of the world why that's no criteria? Everyone else in this province had thought that mineral activity had something to do with exploration activity.

Interjections.

MR. GIBSON: The figures aren't unfounded, Mr. Minister. If you think they are, you stand up later on and say how they are unfounded.

The issues that are being talked of so far in this debate are only some of the important ones. The talk has been of profits and of manner of taxation and of mineral reserves and the appropriate rate of exploitation.

Those things are all important, but there are other important factors that haven't been talked of. The world mineral picture is important. We're not very big in the world mineral scene, Mr. Minister, and we could die away in that scene pretty quickly.

The question of overall social accounting and not just government tax accounting is important. Maybe if you collected a couple of million dollars less in tax and at the same time provided for $10 million or $20 million more worth of wages in this province maybe

that's a good trade-off. That's what I mean when I say social accounting instead of just straight, selfish, government tax revenue accounting. You get that tax revenue in the end anyway. Those people spend their money and pay sales tax and pay income tax and it all comes back to you in the end, so you are better to have a higher level of economic activity even if you don't get as much on that first kick at the cat. That's not been talked about.

The downstream effects in terms of time of your policy just aren't being talked about.

AN HON. MEMBER: Yes, they have.

MR. GIBSON: Where do you think mines come from in this province? They come from the fact that somebody found them and staked them out and developed them.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): The mines have never been lost.

MR. GIBSON: There is that Minister again, Mr. Speaker, saying the mines were never lost.

AN HON. MEMBER: He's losing the whole bunch right now.

MR. GIBSON: I don't know what the Minister has lost. He's certainly lost a lot of votes of the mining workers in this province. I know that.

The Minister knows perfectly well that mines have to be found and if somebody isn't going out exploring and staking claims they aren't going to be found. And as existing mines run out of reserves and there is nothing behind it to take their place, he is leaving that problem to a future government and to a future generation and he's sitting here with his extra royalty revenues and thinking that that's going to make a better world. It's not, Mr. Speaker. It's going to make a lot worse world for our children.

There's not much talk about the implicit remedies to Bill 31. The Minister has never given us a set of alternatives — ways and means that he thinks that this tax could be otherwise imposed or some of its effects lessened. He's given us no thoughts about tax relief for particularly hard-hit properties or incentives for exploration.

He has given us a little bit of hint about one remedy he sees and that's maybe the government going into the business. He wants to start out with stockpiling ore. But I bet you some of his colleagues have got in the back of their minds that the government is going into the business.

If they frighten away all of the private people in this province and the mineral industry continues its nose dive, especially on the exploration side, do you know what this government is going to say, Mr. Speaker? They're going to say private industry has failed. They're not going to say we've scared them away. They're going to say private industry have failed in their duty and regretfully we have to take up the gauntlet and carry on. That's the story.

There hasn't been enough talk with respect to Bill 31 so far about foreign control and benefits and how we can improve that situation in British Columbia.

There hasn't been enough talk from the government about federal-provincial tax relations and why they have sunk in this particular area to the lowest state I've ever seen them.

There hasn't been much talk by representatives of the government of delegation of legislative authority to tax — the kind of thing that the Bar Association of British Columbia in a statement of great urgency and rare concern said was just disgraceful. I'm going to read from that statement, too.

He hasn't talked about the enormous exercise of Ministerial discretion that's implicit in this bill and the two things that that does to the mining industry: (1) the uncertainty that it creates in an industry whose whole search, always, is to reduce uncertainty; and (2) the enormous scope of latitude that this discretionary authority gives for the making of special deals with this company or that to make them go that way or that. Deals are always suspect, Mr. Minister, and discretionary authority, particularly in the taxation field, is always suspect as well. Most Ministers try to avoid it. Most Ministers try and make it as cut and dried as they can.

Does this Minister really want the enormous power over the industry, the enormous detailed power over any individual company in this industry that this bill will give him? I say it is a bad thing for this province that he should have it.

AN HON. MEMBER: That's right. It's too much power in one man.

MR. GIBSON: During the debate, when the Minister opened it and later on when he spoke on the amendment, I got from him the impression that he didn't think that the number of people employed in the mining industry was very large or that the job impact of the industry was very great. I want to make an argument to him that it accounts for about 20 per cent of the jobs that we have in the Province of British Columbia.

Throughout history every society has produced some goods and some services and some primary level and some secondary processing but our society has gone further than any other in building up jobs in the service sector on top of the secondary and on top of the primary industry. Here in British Columbia we have leap-frogged much of the secondary employment and gone to service employment in a lot

of ways. But that whole complex structure of service employment is held up by the basic fact that there are some people in British Columbia who are cutting down trees or getting something out of the sea, from the fields, or from out of the ground.

It all comes back to that. It all comes back to those primary industries. That's the way in British Columbia and in Canada we earn our way in the world. These primary industries are the foundation. The mining industry is 20 per cent of the foundation of British Columbia.

That's why we are so rich in this province, Mr. Minister. It would be nice to say that we are rich because we are very smart or because we work awfully hard. There are lots of British Columbians who are clever and work hard but not so much more so than the rest of the world. The reason we have the good fortune to be rich in this province is that the good Lord gave us some resources. One of the main constituents of those resources is our mineral resources.

HON. D.G. COCKE (Minister of Health): What's the use of having resources if you don't get anything out of them?

MR. GIBSON: That's exactly it. The Minister says: "What's the use of having resources if you don't get anything out of them?" I thought you wanted to leave it in the ground. What you should get out of those resources is jobs — not a narrow-minded concentration on a royalty tax. That's what you should get out of those resources.

AN HON. MEMBER: Why don't you leave it in the ground?

MR. GIBSON: Our resource base in minerals and in forestry, as far as that goes, is far from being the richest in the world. Far from it. But because in British Columbia we have had the good fortune, prudence and hard work to have a head start on other parts of the world, we've gotten a little bit ahead of them and we've got a good base. Forestry and mining are what hold the whole structure up at its present level. That includes wages.

HON. MR. COCKE: What's the unemployment in B.C. now? It's at its lowest level.

MR. GIBSON: It improved this month. It sure did. I'm looking ahead, Mr. Minister.

The wage rate that we are able to enjoy in this province and with which we are always vying with Ontario for either the first or second in Canada is supported by our resource industry — particularly by the mining industry.

I've tried to draw an analogy of what the primary industries mean to British Columbia. I've tried to compare it with a small town. To keep it in British Columbia proportions I assumed that first of all there was nobody in that town at all. Then along came a forest man and a mining man and there wasn't an ice-cream dealer there yet, Mr. Member for Little Mountain (Mr. Cummings) — he came later.

The forest man brought in, say, about 65 jobs to work in the woods and in the mill. There were another 25 or so mining jobs and maybe another 10 of the other basic industry jobs. That gives 100.

Then some carpenters had to come in and help build the facilities and the new housing required and to make some furniture and some castings out of the metal.

After a while people would bring their spouses and their children. You need a school, a town hall, a bar, a laundry, a barbershop, a supermarket, a dentist, maybe a newspaper and a hospital, an assay office, a scaling office and an ice cream stand, and some civic workers on the roads and the water works and an automobile dealership, radio stations, a hardware store, a church, and a fix-it shop, and a lot of things.

Pretty soon, on that basis, Mr. Minister, you'd have about 800 people working in that town and about 2,000 people living in that town. You know what it was all built on? It was built on the primary industry jobs — those 65 forest jobs, those 25 mining jobs.

Do you think you can build something like that up — a house of cards — and then take away the bottom card and have the rest stand? You know it won't, Mr. Minister. You know that if you took away those 25 mining jobs out of your 100 basic jobs your population would come down by 2 5 per cent. It just wouldn't go down by 25 jobs; it would go down by 500 people. That's the impact of the mining industry in the — Province of British Columbia.

Any implication that you or any other speaker in this debate may make that there are only 15,000 jobs in mining overlooks that fact, Mr. Speaker. That is one of the reasons why Bill 31 must not pass.

Mr. Minister, I don't know if you were given one of these bumper stickers that says "Mining: British Columbia's second industry." Do you have one on your car? It's a good sticker, says the Minister — "Mining: British Columbia's second industry." I think it is worthwhile making that point and the impact that mining has on our economy.

Interjection.

MR. GIBSON: I think you'll find, Mr. Minister of Health (Hon. Mr. Cocke), that mining is the second industry in British Columbia when you take all of the associated jobs. When you look at all of the associated jobs there is no question of it.

What's the current contribution of the mining

industry to British Columbia? Before looking at the current income effects you should look at the exploration effects. The exploration expenditures that have been underway in this province in the last few years have been bringing into our inventory of assets in British Columbia literally hundreds of millions of tons of economic ore, adding values in the billions to the net worth of British Columbians. That's the longer range effect. In the shorter range as to what happens year after year, the best sources of figures we have are three: one is the Mines department report; one is the annual report of the B.C. and Yukon Chamber of Mines; and one is the annual survey of the mining industry done by Price Waterhouse. The Price Waterhouse document is the most complete in terms of economics so I will take a good number of my figures from that.

The 1973 revenues for the industry were about $935 million. That was up from about $530 million in 1972 and $420 million in 1971. That jump was due both to an increase in the price of copper and several new copper mines coming on stream. That metal now accounts for about $500 million of our mineral product. It is copper, Mr. Minister, which your bill would most viciously attack — over half of our revenues. All of these figures, incidentally, are net of freight and smelter charges. Even without those added in that amounts to about 7 per cent of our gross provincial product.

For wages and employment, the '73 figures aren't available yet, at least from the Price Waterhouse study, so we have to go back to '72 when they were much less than they were in '73, because as I say, there were new mines in '73 and higher wage rates. But even in that year direct mine wages accounted for around $190 million. That's direct employment without any reference to the services and goods purchased for construction - about 15,000 people, 2 per cent of the labour force, and paying 3 per cent of the wages. Good wages paid in that sector.

In the same year — still '72 figures because '73 aren't available — that industry purchased about $365 million worth in goods and services all around this province, all of that from within this province except $45 million in imported ore.

In addition, taxes were paid at the federal, provincial and local levels, and the provincial receipts in 1973 and 1972 respectively were $71 million and $33 million. These aren't the tax figures the Minister brings to this House when he talks about the provincial revenue from mineral taxation. That doesn't count municipal taxes of about $5 million, incidentally.

Quite apart from Bill 31 and the federal budget, incidentally, Mr. Minister, as you know income taxes of all kinds on mines will rise steeply in 1974 because on December 31, 1973, the three-year mining tax exemption was ended. That was a good thing because that exemption had been abused in some cases in the past. It probably should have been set up in such a way that it would provide for the payout of the capital expenditure only, but it didn't always work that way, and there were times when the value of the mine was paid back many times over on that three-year exemption. So that's an improvement.

Interjection.

MR. GIBSON: That Minister, Mr. Speaker, is apparently not agreeable to capital being returned.

HON. MR. COCKE: Not through taxes.

MR. GIBSON: We'll get on to the magnitude of the resources later on, Mr. Minister. We haven't even started on that yet.

AN HON. MEMBER: It's a shocking bill.

MR. GIBSON: It's a very shocking bill.

AN HON. MEMBER: I'm more shocked that you're shocked.

MR. G.S. WALLACE (Oak Bay): You need to shock me to keep me awake! (Laughter.)

MR. GIBSON: There's some to come yet, Scott.

This is without any consideration of the construction employment, Mr. Minister, which your policies have just about killed. Construction employment a lot of people scorn and say that's not really industrial employment because it's not continuing. But proper scheduling can make it continuing, and improper scheduling of the kind that Bill 31 has caused can cause it to just go dead, just like that. And that's what's happened to the construction in the mineral side in British Columbia.

The financing, incidentally, inflow into British Columbia in the 10 years, 1963-1972, again from the Price Waterhouse report, was $2.1 billion. Mr. Minister, a lot of that has stuck in British Columbia. There's been a tremendous amount of work for people in the financial industry. I think the government doesn't have a great deal of use for the finance industry. Let me just read this statement:

"The total value of mining issues traded in 1972, was almost nine times the value traded in 1963 and represented 59 per cent of the value of all shares traded." That's on the Vancouver Stock Exchange.

Interjection.

MR. GIBSON: I was comparing 1972 to 1963, Mr. Minister, to give an indication of the growth of this

industry over that period. And in 1972 it represented 59 per cent of the value of all shares traded. That gives an example of the importance to the jobs in the financial community.

Let me quote from a talk by Mr. Len White to the meeting of the B.C. and Yukon Chamber of Mines you weren't at, Mr. Minister. You were invited to go to it. I guess you were afraid to show up. There were 1,500 people there who wanted very badly to hear from you, and you should have been there instead of spending your time at a meeting a month later with an audience you knew to be friendly up in Kamloops, of a handful of people. You should have gone over to that meeting to explain and defend your policies.

AN HON. MEMBER: Hear, hear!

MR. GIBSON: If you had been here you would have heard Mr. White say this:

"In '73, 14,500 Workers were directly employed by mining companies. In '73, 34,000 workers were indirectly supported in other industries by mining expenditures. In '73 more than $600 million was expended on the purchase of equipment, materials, supplies and services.

"In the decade '63-'72 the net capital inflow amounted to $2.1 billion. The recent prosperity of B.C. can largely be attributed to the fact that of this amount $1.5 billion was recorded in the period 1968-1972.

"You will be interested to know that since 1971, when the last new mine construction programme commenced, the number of workers supported by mining has been reduced by some, 15,000."

That's that construction effect I was speaking of. That's what the lack of new mines does, Mr. Minister.

"Since 1971 the income effect of mining expenditures has been reduced by $150 million a year. There has been a clear and detrimental effect on British Columbia as a result of previous statements and legislative initiatives of the current Provincial government. Passage of Bill 31, failure to remove other damaging legislation, and continued uncertainty will produce a steady erosion of the benefits to all British Columbians from mining.

"In 1972, six new mines went into production. Each was the product of earlier encouraging mining and tax laws. Since 1971 no new mine construction programmes have been announced. Further to the last new mines and prior to the legislative initiatives of the present government, 26 potential metal producers, with a combined milling capacity of 335,000 tons of ore per day and seven potential coal mines have been placed in a deep freeze. These properties could more than double the existing milling capacity of 292,000 of ore per day, and greatly increase the value of production, employment and taxes for the people of British Columbia.

"At a time when improved metal prices and markets would have created a mining boom unlike any in the history of B.C., Bill 31 is absolute folly."

AN HON. MEMBER: Hear, hear!

Interjection.

MR. GIBSON: The Minister called across the floor, Mr. Speaker: "Do you think we should get rid of it as quickly as we can just because the price is high?" Mr. Minister, we should mine out minerals at a sound and reasonable rate, and we've got lots left, as you well know.

Interjection.

MR. GIBSON: No, sir. You're cutting it back very, very seriously. Very seriously indeed.

I want to talk a little bit about the nature of the industry. Sometimes the Minister talks as if metals aren't important to the world, and yet they go into everything that helps to make ours a good civilization and they go into everything that the third world, the undeveloped part of this world, needs for a better living for themselves. And it's part of our duty, I think, Mr. Minister, to try and provide those things as well and as quickly as we can, not only to our benefit, in other words, but to the benefit of the rest of the world.

Interjection.

MR. GIBSON: Mr. Minister, you keep talking about that book, but if the result of that book was Bill 31, I don't think much of it. I think you must have misinterpreted it. You could write a book about Bill 31, though. It wouldn't be very happy reading.

AN HON. MEMBER: R.I.P., by Leo! (Laughter.)

MR. GIBSON: What are the things that make this industry a bit different from other industries? It is very different, Mr. Minister — I think you would agree with that.

I don't know if the Minister got a copy of this letter which was sent to the Premier — I hope he got a copy — by Mr. Peter Sevensma, a well-known and respected mining consultant in British Columbia. He certainly doesn't think much of Bill 31, does he?

You have a high regard for him, I guess, Mr. Minister, and for his perspective on the mineral

industry. Let me read out a little bit of what he says.

"Dear Mr. Premier,

"As an independent consulting geologist with 26 years experience in mineral exploration in British Columbia, 15 years of which I've spent mostly in northern B.C. north of 56 latitude and in the Yukon, I wish to present to you my observations concerning Bill 31 in its present form. I do not belong to any political party and my views are my own.

"Besides experience in British Columbia, I've worked all across Canada and in a number of other countries in the world. Since World War II I've been employed by Cominco until 1965 and have been independent since that time, working mostly in mineral explorations but also in hydrocarbons." Perhaps it was at Cominco that the Minister met him.

"Firstly, I wish to outline briefly the trend in exploration in mining and how it has changed over the years in Canada, particularly in B.C.

"In the early 1900s, a prospector would discover a mineral deposit, usually a narrow vein, say, from four inches to 10 feet wide. These occurrences, especially quartz vein, resist erosion and can relatively easily be found by visual exploration. Staking of one to four claims of about 50 acres each was sufficient to cover the discovery which could then be worked by tunneling, preferably at various elevations. A small mill would take care of the relatively small tonnage that could be mined. If the grade of ore disappeared in any one working place, mining would continue in another place. These operations would be high cost but quite flexible and tended to die a natural death when tunneling failed to find more ore.

"Gradually, core-hole drilling was developed, enabling an earlier assessment of the potential and better planning ahead of the operation, culminating in long-hole stopping, a method applicable mostly to steeply-dipping and wide veins, say 40 feet or wider.

"Tunneling was by now concentrated in the adjacent wall rocks, and mining operations could be planned several years ahead. The cost of mining dropped, the flexibility of the operation decreased, and the initial investment before a pound of ore was mined increased considerably.

"For a number of years in the late 1940s and early 1950s, I've been closely associated with the development and implementation of these methods. The outstanding characteristic of this method is that most of the mineralized rock can be mined clean, leaving very little, if any, behind and thereby advancing good principles of conservation as compared to the initial techniques of following the ore which lead to high-grading, leaving the lower-grade, mineralized rock in place."

Note that word, "high grading" there, Mr. Minister, because we're going to hear a lot of it later. He continues:

"Also, exploration would follow more tenuous leads than in the earlier days, and geophysical techniques would assist in delineating drillable targets that might reflect the presence of ore undetectable by any visual means. As a consequence, smaller finds had a more economic promise. The prospector would have to stake more claims, perhaps 10 to 20 as a small find would lead to an investigation of a larger areas."

Now, however, comes that time of transition. He gets to the following:

"In the early '50s, open-pit mining of large, low-grade masses of rocks became gradually an economic method for an increasing number of deposits which may not have had much of a surface expression at all, except perhaps a patch of rusty rock half a mile across.

"In effect, under favourable climatic conditions, as, for example, in Arizona, the valuable copper content of the rock would be dissolved and would percolate downward to be re-precipitated at a deeper level. From the surface down there would be a near-barren layer of rusty rock, perhaps a few hundred feet thick, then a high-grade layer, perhaps another 200 feet thick, followed by original, unaltered, mineralized rock of relatively low grade. Whereas originally the high-grade layer was the main economic target, technology was developed which rendered the deeper low-grade economical to be mined, i.e. mineable to the surface."

That deeper low-grade, as the Minister knows, is exactly the material that is rendered uneconomic by royalties. To continue:

"Thus, over the years by wise husbandry the economic grade in copper required in a body of rock to make it mineable dropped from around 2 per cent copper, or 40 pounds per ton, to around 0.4 per cent copper, or eight pounds per ton.

"Mining-wise, these operations require extensive planning and a large capital investment before the operation can start. Whereas few people are directly involved in the mining, substantial ancillary services spring to life in supplying the operation with the necessary equipment, services and maintenance. These mining operations are the core of many

secondary manufacturing operations. In comparison, the vein mining in the earlier days required hardly any supporting services at all."

That's why, Mr. Minister, your comparisons with past mining employment and present mining employment fall short of the mark. "…the vein mining of the earlier days required hardly any supporting services at all. In other words the jobs you listed were just about all there were in mining. But in modern mining, the jobs in the mine are just a small part of all the jobs supported by mining. He continues:

"Returning to British Columbia, similar low-grade deposits were gradually discovered, usually with some leached, barren rock with no significant enriched zone and often covered by thick layers of gravel and sand overburden deposited by recent glaciers or rivers, i.e. a number of disadvantages not encountered in warmer climates, putting our deposits at a competitive disadvantage."

They are, Mr. Minister. They're not only of low grade; they're some of the harder deposits to mine in the world.

"The discovery of these deposits was mainly due to persistent prospectors, geologists, geophysicists and engineers working with minor clues discovered over large areas. A prospector would now have to stake perhaps 50 to 80 claims, working on a small outcrop of rusty rock here or a minor copper-moly deposit there.

"Sophisticated methods combined with sound exploration instinct and much money raised by promoters with a great deal of faith were required to prove the economic value of these deposits. Sometimes four or five large mining organizations would spend considerable sums in succession without discovering the deposit. Usually it would have to be faith and right instinct of one or two individuals to allow the enterprise to succeed in the end."

The Minister knows the history of many of those projects too. The whole Highland Valley. How many times was it walked over, and how much faith and hard work and lost money and time had to go into that valley before the first mine opened?

Continuing with the letter:

"This, Mr. Premier explains why prospectors 50 years ago staked only a few claims whereas now a block of perhaps 100 or more claims is required to find these elusive deposits.

"It therefore appears highly unfair to label these men as speculators and promoters. They have that special spark and persistence required to find these deposits. To levy rentals and taxes that will keep them out of business, even if they have performed all the requirements of work to keep their claims in good standing, is poor economics."

That's another part of the Minister's policies.

"Regardless of what sheltered academics and promoters of scientific methods may state, the visual inspection carried out by prospectors and mineral explorers — straight grassroots work — is still essential for discovery in many parts of Canada, and especially in the cordillera of western Canada. In many cases, a large and expensive airborne survey will only confirm a discovery made by prospecting, though it may add to the value of the discovery by providing information on the geological framework in which it has been made.

"I now return to Bill 31 and its super-royalty features. The royalty is what the King collected when he leased a mining royalty to his subject, i.e. he collected in kind part of the metal or mineral mined. As it often proved more practical to let his subjects do the selling, the royalty was then collected in cash. In essence, therefore, a royalty is part of the metal mined and it spreads the cost of mining over the metal which remains the property of the producer.

"A large low-grade body containing copper may be pictured as a roughly cylindrical, pipe-like body a few thousand feet across, standing either vertically or at an angle within the wall rock. Usually the metal is distributed around a smaller, higher-grade core with a few layers of diminishing grade around this core."

In other words, Mr. Minister, these large, porphyry-type copper deposits are things that taper off. They have some high-grade 1n the middle and then a lot of low-grade on the outside.

Continuing the letter:

"After detailed drilling and studies, including environmental impact and probable ultimate reclamation potential of the pit area, and an expenditure probably in the order of $5 million plus or minus 50 per cent, the body may total something like the following tonnages which is a typical, average body under average conditions."

He gives a little table. The core area would contain 50 million tons of 0.7 per cent copper; the first shell around the core, another 100 million of 0.45 per cent copper; and the second shell around the core 150 million tons of 0.35 copper. This total deposit — this typical, hypothetical deposit then — would represent 2.64 billion pounds of copper, shown to be economically recoverable if no or a small royalty applies.

Now listen to this, Mr. Minister:

"If a high royalty applies, the feasibility study will show that mining of the second shell is uneconomical and the 150 million tons of

0.35 per cent copper, containing 1,050,000,000 pounds of copper is now a waste, and not mineable. My figures are conservative" — says the author — "and it is more likely that more than half the ore and about half the copper will have to be left."

That's leaving it in the ground with a vengeance, Mr. Minister.

"There will not be, of course, any royalty paid on this billion pounds of copper left in the ground.

"It cannot be left for future generations either, if the pit is to be reclaimed properly, and it is lost forever to the economy of British Columbia, to the copper smelter you would like to see built and which would require very long-term supply of metal, and especially to the secondary manufacturing that could process this copper into other products. This in a nutshell is what is wrong with Bill 31 economically."

He goes on to mention that very many people in this province are very disturbed by Ministerial discretion and the lack of recourse to the courts embodied in Bill 31 and in many of the other bills passed or to be passed by the Legislature.

Mr. Minister, that is a man who is concerned about Ministerial discretion who is a friend of yours. What about the day when the Minister of Mines isn't you, who is a man he knows, but someone else? What about Ministerial discretion then? Then we'd have to really be worried.

The author goes on:

"We know that a small body of opinion has been impressed by the report of Mr. Eric Kierans on the non-renewable resources industry recommending, in essence, expropriation by taxation.

"It is interesting to note that the Russians are looking for foreign capital to develop one of the largest copper-porphyry deposits in the world in Siberia, as well as their giant Siberian gas fields. This suggests that Mr. Eric Kierans is wrong on all counts and his report is at best an exercise in futility."

Was that report an impressive one to you, Mr. Minister? Did you read the report he did for the Manitoba government?

Interjection.

MR. GIBSON: I presume you must have read it. I wonder how much it had to do with Bill 31.

Interjection.

MR. GIBSON: He got his ideas from you, did you say? Ah, well there is an interesting revelation! Mr. Eric Kierans got his ideas from the Minister, Mr. Speaker. Watch out, Manitoba! But they withdrew their bill, of course. They withdrew their bill that was based on the ideas that Mr. Kierans got from the Minister, if the Minister's account is right.

HON. W.L. HARTLEY (Minister of Public Works): The Liberals have been withdrawing for 100 years and that's why they are where they are today.

MR. GIBSON: They withdrew that bill in Manitoba and the Minister should withdraw the bill here. The letter goes on somewhat more, but that's the main thrust of it.

We are in a worldwide industry, Mr. Minister. You know that, and you know the extent of the reserves that we have and that we have to live in the world market. We don't control the world market. So it's all the more important that we retain our flexibility here and that we retain a perspective of what is happening in the rest of the world, because if we supply only 5 per cent of the copper in the world and other parts of the world can find ways of supplying that 5 per cent more cheaply, then we're out just like that. We don't have any kind of monopoly. That's why anything that you do that lowers the amount of ore that can be taken out of the ground economically is not just a blow to British Columbia this year but a blow for many years in the future.

You'd better believe, Mr. Minister, that there are other parts of the world that are eager and ready and willing to take up the copper production that British Columbia might slack off on.

The Association of Professional Engineers, Mr. Minister…

AN HON. MEMBER: Are you worried about that, Leo?

MR. GIBSON: …submitted a brief on the subject. It's tremendously rare that the professional engineers have submitted a brief on a political question like this.

Interjection.

MR. GIBSON: Why don't you cite the brief that you prefer? The brief disagreed with Bill 31, Mr. Minister…

HON. MR. NIMSICK: I know.

MR. GIBSON: …and you know it. The official brief of the Association of Professional Engineers disagreed strongly with Bill 31.

They pointed out that as we move around that great rim of the Pacific there's a tremendous amount of copper available at a higher grade than we have

here in British Columbia — 3.2 billion tons of .44 copper according to their figures here in British Columbia. And all around the rest of the Pacific Rim the lowest on the western side is the southwestern USA at .61 per cent; Mexico, .64; Panama, .7; Columbia, .8; Peru, .85; Chile, .9. On the other side in the Philippines, Indonesia, Papua and New Guinea are rich deposits. Most of them are still unexploited, often because of unstable political conditions, but maybe the political conditions in those countries are getting to be more stable than they are here in British Columbia. And maybe — not just maybe, surely — some of those deposits are now going to be exploited in preference to ours.

AN HON. MEMBER: I sure hope they get the royalties out of it.

MR. GIBSON: They'll get jobs and taxes on profits out of it, Mr. Member. That's what they will get out of it.

HON. MR. NIMSICK: They pay mighty small wages over there.

MR. GIBSON: The Minister says they pay mighty small wages in those countries. The development of those resources will allow them to pay good wages, just as it has allowed us to do here in British Columbia, and you want to take away the base for paying those good wages.

Interjection.

MR. GIBSON: That's exactly where you are headed. It's only the phenomenon of open pit mining and the constant lowering of costs by the industry and the geologists and the engineers in this province that has made it possible for our industry to develop the way it has.

When Bethlehem was brought in in 1962 1.18 per cent was needed in those days. They are now mining .56 there. Granisle was brought in in 1966, down to .56 per cent of that point and now down to .44. Utah in 1971 brought in at .52 per cent; Lornex in 1972 at .42 per cent; Gibraltar in 1972 at .37 per cent. That's a story of progress, Mr. Minister, over these years that we should be proud of here in British Columbia. We shouldn't be trying to chase those people away. We should be a lot prouder of it than you seem to be.

HON. MR. NIMSICK: We're so proud that we want to share in their good fortune.

MR. GIBSON: The Minister says so proud we want to share in their good fortune. Mr. Minister, you do your sharing in the right way through excess profits tax and we've got no quarrel. Just say that. Just say: "We'll tax the excess profits and not the royalty" and I'll sit down right now. Just say that. I beseech you, for the good of this province.

The next thing we should look at, Mr. Minister, having looked at the competition we have from around the Pacific is to look at the competition we have from the floor of the Pacific.

This undersea mining over the next generation I think has to be the greatest threat to the copper industry in British Columbia. It has to be a threat because undersea mining shows the capacity when the technology is worked out of producing from a higher grade ore than we have here in British Columbia at lower mining costs.

MR. D.T. KELLY (Omineca): How long do you think these resources are going to last?

MR. GIBSON: The Member for Omineca (Mr. Kelly) says: "How long do you think these resources are going to last?" Let me tell him something about the copper resources on the seabed of the Pacific Ocean. The estimate of those copper resources, Mr. Member, is a 1,000-year supply at present consumption.

MR. KELLY: We're doubling every day.

MR. GIBSON: A 1,000-year supply at present consumption.

HON. MR. NIMSICK: Who told you that?

MR. GIBSON: And that takes over pretty quickly from the little 5 per cent of the copper that British Columbia produces in this world, I'll tell you.

We have to look to our future, of course, and that is why a reasonable mining rate is the right rate and the rate that the Minister is shooting for is a quick tapering off in this industry just like the exploration has already got.

Exploration is the life blood of the mining industry. I want to quote…and this is not a British Columbia source but a national source, a Mr. Charles Elliot, who is the present of the Mining Association of Canada and who said in Vancouver on February 23:

"Clearly we have failed to communicate the absolutely essential role of the exploration function in our industry. Exploration is mining's future. No government should permit itself to be lulled into believing that because the mines continue to operate — yes, with today's prices even thrive — 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 the illusion of continuing production and prosperity."

But he warned:

"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 too burdensome. Exploration activity will dry up and the industry will die with the inevitable exhaustion of known ore bodies."

I think that's pretty clear, Mr. Minister. So will these known ore bodies continue to be found?

At that same meeting of the B.C.-Yukon Chamber of Mines that you didn't feel up to going to, Mr. Tommy Elliot made a statement that was very heartfelt on his part. He said:

"During the 43 years I've been associated with the mining industry in this part of Canada, I've witnessed the building up of what will go down in history as the most efficient mine-finding and mine-developing body of people that ever existed anywhere on this planet, concentrated mainly here in Vancouver but existing also in many other parts of British Columbia."

Interjection.

MR. GIBSON: I beg your pardon, Mr. Minister?

Interjection.

MR. GIBSON: The Minister says "don't tell me he has no monetary interest." Mr. Minister, I hope you aren't questioning for a moment the sincerity of Mr. Tommy Elliot in making this statement. I hope you aren't. I hope you aren't because I was there, the way you weren't and I saw him make that statement. And he believed it and I believed it.

"But existing also in many other parts of British Columbia, we have today a very substantial group of prospectors, engineers, geologists, geophysicists, geochemists, metallurgists, assayers, diamond drillers, practical miners, entrepreneurs and mine financiers, all of whom have played an important role in uncovering the mineral resources that lie buried beneath the surface of this vast and rugged land. From a small beginning, these men have built an industry that's produced $1 billion in new wealth for the people of British Columbia last year. And that could be only the beginning.

"With encouragement from government, federal and provincial, the B.C. mining industry could increase its yearly production to $2 billion within the next decade. Anyone who will take time to study the facts will find that by far the largest portion of this production of new wealth is left in British Columbia and Canada and that instead of being rip-off artists as some politicians like to state, these mining people are major contributors to the province's overall prosperous economy and they are without doubt one of the most valuable assets British Columbia possesses.

"To consider that the existence of all these people and their value to the community is today being threatened by unwise and unnecessary government legislation is in my considered opinion a condemnation of the trend in our modern society. No government body can ever hope to fill the vacuum or replace this mass, of mining expertise once it is destroyed."

And you're destroying it, Mr. Minister. You're moving it out of the province. I got some letters, case examples, I'll be reading later on which make that abundantly clear and it's abundantly clear from the claim staking figures you have. Abundantly clear.

Interjections.

MR. GIBSON: The whole nature of the mining business as I said to you before, Mr. Minister, through you, Mr. Speaker, has to be the reduction of uncertainty — that initial uncertainty when the prospector goes out and there's just one chance in 1,000 or 10,000, and then the uncertainty when he brings back what's maybe a find, and you have to do some drilling and development work and it's maybe just one chance in 100. If that proves up and you get the money and the market looks all right, then you've got a chance of making a profit if the reserves are as large as you think they are and if the market holds up, and so on.

There's uncertainty all through that process, and what you're doing by Bill 31 is adding to that uncertainty rather than reducing it. That to me is very, very wrong.

You know, it's not as if this was an isolated phenomenon that only affects a few parts of this province. I've got a map here showing the mines of this province and showing the ridings of the province on those maps.

I just checked out which were in which riding, which Members should be concerned. The Member for Omineca (Mr. Kelly) should be concerned. He has five producing mines in his riding right now. Maybe that's why they have that petition asking him to quit. The Member for Atlin (Mr. Calder) should be concerned. He has two producing mines in his riding,

and it's a pretty small riding.

Interjections.

MR. GIBSON: You hear that Minister, Mr. Speaker? One Minister said: "How many mines in your riding?" Another one said: "Lots of speculators, lots of promoters." That's what these men think of the mining industry in this province, Mr. Speaker. They think that they're a bunch of rip-off artists, they think they're a bunch of promoters and speculators. I want to tell you they're hard-working people who have brought a lot of benefits to this province.

Let's look at the riding of the Minister who had to say that about the speculators (Hon. Mr. Hartley). Yes, Lillooet. He's got Ashcroft in his riding. Got another mine up here, the Similkameen Mine which is a big low-grade producer. Royalty will cut a lot of ore out of that, cut the reserves of that mine by a lot.

AN HON. MEMBER: Yes and a lot of votes, too.

Interjections.

MR. GIBSON: The Hon. Member for Kamloops (Mr. G.H. Anderson) I don't see him right now, but he's got quite a few mines in his riding, three, one on the boundary line there.

Interjection.

MR. GIBSON: The Hon. Member for Rossland-Trail (Mr. D'Arcy) has got one or two. Nelson Creston (Hon. Mr. Nicolson) the same thing. The Hon. Member for Kootenay (Hon. Mr. Nimsick) has got four, that's about right. The Hon. Member for Cariboo (Mr. Fraser) well he appreciates the mining industry, he's got two or three mines there. None in Delta, but the Hon. Member for Delta (Mr. Liden) can stand up and have his say when he feels like it.

Interjection.

MR. GIBSON: The Hon. Member says that most know what they have in their constituencies. That's why I wonder how the NDP caucus works, Mr. Speaker. I'm just astonished that all of these Members with the mining industry so important to the jobs in their ridings shouldn't have been able to convince the cabinet to pull this one back, to look at it.

Maybe it's just the cabinet's unresponsive, Mr. Speaker, that's the only thing I can think of. I will say the backbenchers are very loyal. They're very loyal to this foolish idea. They're not responsible to the needs of their ridings, but they're very loyal to the foolish idea embodied in Bill 31. I will give them credit for that if that's credit.

AN HON. MEMBER: Keep on talking about it and we'll be raising mineral royalties.

AN HON. MEMBER: Oh, there's a threat.

AN HON. MEMBER: That's right, the heavy hand of state socialism rearing its ugly head. It's the rough end of the road.

Interjections.

MR. GIBSON: I'd like to say just a little bit about profits, Mr. Speaker, before getting on to other things.

Interjections.

MR. GIBSON: Something said by the president of the Institute of Chartered Accountants, April 19. He said:

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

HON. MR. LEA: We want them to make a fair profit.

MR. GIBSON: "We want them to make a fair profit, " says the Minister. I'll come back to that in a minute.

"Inflation," he pointed out, "distorts profits where companies exercised depreciation to reflect the gradual obsolescence of the buildings and equipment and all business must relate its income to the income of the ordinary investor. A profit, however large, is not satisfactory and never will be if it is less than the return the business could have got in a risk-free investment such as a government bond. A company making a percentage of return less than a risk-free investment is in fact making a loss and not a profit at all."

Now what did the federal leader of that party have to say about profit, Mr. Speaker? He thought 8 or 9 per cent was pretty fair. That's not as high as a Canada Savings Bond — 9 per cent is. He thought that in the special, dangerous situation of the resource industries, maybe 10 or 11 per cent was fair.

Now the Minister over there who was just talking about a fair profit, he hasn't given me any number. The Minister of Industrial Development, Trade and Commerce (Hon. Mr. Lauk) when I asked him in this House what's a rip-off profit, he wouldn't give any number. These are just thoughts that they cast

around.

I'm about to tell you what the profit of the mining industry over the last few years has been, Mr. Member. A fair profit is somewhere between. It depends on the industry.

In the mining industry in 1973 the return on equity — we don't have these figures officially yet — appears to have been something between 20 and 25 per cent.

Interjection.

AN HON. MEMBER: What do you know about equity? The mudslinger!

MR. GIBSON: In 1972 it was a good deal less than that, and in 1971 there was actual net loss. The six-year average runs to about 11 per cent. That's exactly what your national leader said would be a fair profit for the mineral industry. Some years they're good and some years they're bad. Some years are good and some years are bad. You have to average it over time.

In times of rapidly increasing prices and inflation where there are profits that come about from that reason that are exceptionally high, then you have to look at excess profits tax. That's exactly what the Province of Ontario has done in the mining industry. That's exactly what the Province of British Columbia should do in the mining industry. It should tax excess profits. It should not tax royalties, as this bill proposes to do. It should not be a royalty tax. Thank you for the correction, Mr. Minister.

Interjection.

MR. GIBSON: A royalty is a tax, Mr. Minister. A royalty is a tax. A royalty is just a plain tax going to the government. You can call it anything you like, but it is a tax on the mining industry.

What were the total tax payments of the mineral industry in 1973? The Minister used some strange figures in this House, Mr. Speaker. He said they were $5 million or $6 million or something like that. Mr. Minister, that's not right. In 1973 B.C. mining tax — $31 million. You should know; your department collects it — $31 million. I'm talking about 1973. You're complaining about the profits of these companies in 1973. I'm talking about the tax paid in, 1973: $31 million.

Why didn't you give us 1973 figures, Mr. Minister? Were they embarrassing to you?

Property and school tax is $8 million. Social service tax is $9 million. Corporation income tax is $5.8 million. Portion of employees' income tax is $9.5 million. Gas and fuel oil tax is $1 million. Workmen's Compensation Board is $4 million.

All of that adds up to a total contribution to provincial coffers of $71 million from which I would personally deduct the employees' income tax proportion of $9.5 million.

To municipalities for property and school taxes — $5 million. To the Government of Canada, again including employees' income tax — $58 million. The total of all of them is $134.5 million. If you deduct the employees' portion of the income tax it is about $90 million to all levels of government in 1973.

It will be much higher in 1974, Mr. Minister, as you know, because there were some strange tax situations still continuing in 1973 such as, for example, the highly profitable Gibraltar Mine in the last year of a three-year tax exemption Period. They will be paying much higher taxes next year just under the old schedule.

The gross mineral revenue was something in the Order of about $950 million, Mr. Minister of Highways (Hon. Mr. Lea). Normally you don't figure the tax on the gross. You normally figure it more on the profit. The profit was something in excess of $200 million.

The Investment Dealers Association had something helpful to say about this. They submitted a good brief to the government. I presume the Minister saw it. A part of the brief at page 5 says: "Is the mining industry of B.C. being fairly taxed?" I quote:

"For many years the Canadian mining industry, including mines in B.C., has been the recipient of tax privileges denied to secondary manufacturing activity. This bias in favour of mining and oil was the result of a deliberate policy designed by all Canadian governments to stimulate mining. This policy recognized what was then regarded as exceptional benefits which mining contributed to the Canadian economy, such as:

"A. Mining was export-oriented and thus contributed to the balance of payments."

As it does, It contributes at least 25 per cent to the British Columbia balance of payments that allows us to buy things from other parts of Canada and other parts of the world.

"B. Mining was instrumental in assisting the development of less-populated areas."

Every Member here from a rural area knows that that is a fact and that this has been one of the things….

Interjection.

MR. GIBSON: You're not from a rural area, Mr. Member.

This has been one of the things that has developed this province. It was the early mines that built many of the basic road systems of this province. That leads to point C:

"C. Mining was a key activity in sustaining low transportation rates in a country which

depended heavily for survival on good transportation facilities.

"In fact, the policy was extraordinarily successful in achieving the above objectives. Subsequently, beginning in the 1960s, after a long period of stable tax guidelines…."

MR. SPEAKER: Order, please. I wonder if the Hon. Members would not pass between the speaker and the Chair.

MR. GIBSON:

"Subsequently, beginning in the 1960s, after a long period of stable tax guidelines, both provincial and federal governments enacted a series of tax legislation which had the cumulative effect of changing mining from a less-taxed activity to an equally taxed activity.

"Some of the principal changes that have been made and some yet to be implemented are as follows:

"A. The three-year tax free period has been eliminated as of December 31, 1973."

It was time for that.

Interjection.

MR. GIBSON: No, now it's eliminated.

"B. Automatic depletion allowances which effectively remove 28 per cent of income from federal income tax will be replaced by earned depletion in 1977."

That was the situation before the federal budget. It is now proposed that it be changed to earned depletion in 1974.

"C. Shareholders' depletion allowances have been eliminated.

"D. Provincial mining taxes are not deductible from income for federal tax from 1977 on."

Again, that was the situation prior to the last federal budget, whose fate we will not know for a while. To continue with the brief:

"These changes are complex but, nonetheless, the impact is that the overall rate of taxation of B.C. mining companies after recapture of the original investment will range from a current 43 per cent to 48 per cent in 1977, at which time it will be equal to the tax rate of all companies.

"The effect of the additional mineral taxes now proposed will completely reverse the previous bias in favour of mining. The immediate impact will be an increase in rates to roughly 70 per cent at current metal prices. The effective tax rate could easily reach over 90 per cent within 10 years, if recent inflationary trends continue without guaranteed adjustment to basic values that fully compensate for higher costs."

That again is what Bill 31 could do, Mr. Speaker.

The brief then gives the rate of return in the mining industry as compared with Canada Savings Bonds, which are risk free. It introduces it in this way:

"The facts are that mining in British Columbia in recent years has generally experienced declining returns relative to risk-free investments, which have generated increasing and more stable rates of return.

"An independent study by the B.C. mining industry, compiled by Price Waterhouse, estimates the following rates of return on shareholders' capital for the mining companies operating in this province. We have supplied the return on risk-free Canada Savings Bonds for comparative purposes.

"In 1967, the rate of return for the mining industry was 17.8 per cent. It was a profitable year. The rate of return on the CSBs was 5.48. In 1968 it was down to 11.8 per cent; the CSBs were still at 5.48 per cent. In 1969 the profits were up again to 16.2 per cent; the CSBs were now at 6.75 per cent.

"In 1970 the profits were down again to 8.5 per cent; Canada Savings Bonds were up again to 8 per cent. In 1971 the rate of return on the B.C. mining industry was actually minus 1. I per cent because of low prices in that year; the rate of return on the CSBs was 7.76 per cent. In 1972 the rate of return was 1.7 per cent, while the CSB rate of return was 7.19 per cent."

For 1973 the brief did not have a rate of return figure at the time it was written. I estimate it to be something in excess of 20 per cent, and the rate of return in Canada Savings Bonds that year was at 7.3 per cent.

So over that six-year period we have an average 11 per cent rate of return in the mining industry which, according to the national leader of the NDP, is only fair. And this government is talking about rip-off profits!

The Minister has been saying as well that this Bill 31 tax of his would only apply in exceptional years. I don't know if he has taken the trouble to graph prices on a five-year moving average and the 20 per cent above and below, just to see where the super royalty would cut in.

The super royalty would have been in effect through almost all of 1964, 1965 and most of 1966. It would have been in effect again in 1968. It would have been in effect again for a part of 1969 and a part of 1970. It would have been in effect again through most of 1973.

So you can say that that's good or bad — but you can't say that the super royalty is a rare thing under

the bill as you have it, and under the movement of Prices as they have been historically in the copper industry — which is over half of our mining.

If predictions about the trend of world inflation mean anything, that trend is going to continue going up. And that is going to put a continuing bias in favour of that super royalty.

So the Minister, in making his introduction to the bill, can't just fob off the super royalty and say that that just happens now and again, and that the 5 per cent is basically what we're talking about. That 50 per cent is a terribly important part of it.

I'd like to read out a submission to the Minister which relates to the Ontario legislation on mining tax. Do you know who it's from, Mr. Minister? You probably wrote it off right away — you probably threw it in the wastebasket — because it's from one of those terrible mining companies that made a profit last year.

Interjection.

MR. GIBSON: I hope not. Did you study it carefully? Here's what it says:

"With reference to our letter of March 13, we find it appropriate to write to you again in view of the changes in the mining tax laws which the Ontario government has proposed in its April 9, 1974, budget. While we do not agree with all aspects of this proposed legislation, we find that it is generally a more desirable method of raising extra revenue from the mining industry.

"This proposed legislation will substantially increase Ontario's revenue from the industry, while at the same time it should continue to encourage private initiative, capital and resourcefulness to explore and develop Ontario's mineral resources for the benefit of all the people of that province.

"The most significant change for most operating mines is that the mining tax rate in Ontario would be increased from the present flat rate of 15 per cent of profit. Mining taxes will begin, essentially, at 15 per cent for profits of up to $1 million and climb to 40 per cent for profits in excess of $40 million.

"The attached schedule A presents our understanding of the present and proposed effective tax rates in Ontario mining income.

"Ontario's proposed mining legislation is much more operable than that proposed by Bill 31, primarily because:

"I) Mining profits, not sales, are the basis of tax calculation. That is, Ontario will continue to tax companies on the basis of ability to pay.

"2) The impact of the tax is clearly defined in the legislation, and is therefore not left to be determined by the Minister.

"3) The combined effective rate of taxation is less onerous. As shown in the attached schedule, the combined rate of taxation on $60 million of income after 1976 is 54.56 per cent."

What per cent do you think is fair of the income for a mineral company, Mr. Minister? You have never told us that.

Interjection.

MR. GIBSON: No, not how much they can make. What percentage is a fair tax on that income?

Interjection.

MR. GIBSON: No, what tax is fair? The Minister won't say what tax rate is fair. He doesn't have an idea.

"4) Apart from the changes in the mining tax laws, Ontario's income tax laws will allow the special write-off provisions on new and expanded mines contained in the present federal legislation. In addition, Ontario will continue to allow the thirty-three-and-a-third per cent automatic depletion."

Now I don't agree with that. I think that earned depletion is the proper way of doing that.

"Although we generally favoured the Ontario mining tax legislation, we have some reservations about it too. In particular, the sliding tax scale does not consider the investment base required to earn the profit."

In other words, if you have $100 million invested and you get a $15 million profit, that is a different situation than if you have $15 million invested and you get a $15 million profit. There should be some relationship of those bases you are going to go to the Ontario system. If there were any hope of that, I'd go into that in more detail.

Is there some hope that you would do that, Mr. Minister?

Interjection.

MR. GIBSON: Is there hope for you? Would you go to an excess profits tax? Just nod.

No hope for that Minister.

I would like to make another quote from Mr. Rick Higgs of the B.C.-Yukon Chamber of Mines. This chamber of mines does wonderful work around the province, Mr. Minister. You must know that. You have a grant in your estimates for them. I'm glad that you support them. I'm glad that you support an independent voice for the mining industry. I wish that they had more support because, my gosh, the story has to be told; and they're one of the groups

that are telling it. Here it is: "Myth of Exorbitant Profits Deflated."

"Information presented to the government clearly shows that in the period 1967-72 average return in investment in B.C.'s producing mines was 9.15 per cent, while the average rate of return on Canada Savings Bonds was 6.78 per cent."

Of course, that was raised a bit up to 11 per cent by the 1973 results. Then he quotes something from the Investment Dealers Association, and goes on to say:

" In addition to a failure to appreciate the true profitability of mining in British Columbia, acceptance of the myth of exorbitant profits implies a lack of understanding about the industry as a whole. The truly profitable mines represent the tip of an iceberg, composed of the tens of large exploration companies, the many hundreds of smaller mining companies and the thousands of professionally trained and practical prospectors.

"The industry complex expends millions of dollars for, each new mine which commences production. A few thousand shareholders obtain the benefits of a profitable mine investment. Many, many more thousands of people receive no return on their investment, let alone a fair return on it.

"If the industry were not capable of generating a few winners, there would be no incentive for investment of exceptionally high-risk capital. Only one in a thousand prospects becomes a profitable mine."

One in a thousand prospects becomes a profitable mine. The others are losers, Mr. Minister. And the people who had their time and money in there have lost it. Too bad! No second prize; nothing back to them.

You know, over the years the bonanza psychology has been fairly important in the mining industry. It's been one of the things that has given people the encouragement and the strength to go on when times are awful tough — like they were in the Highland Valley for so long.

That's why, instead of harassing the industry — turning ore into rock and driving exploration out of British Columbia — you should be really striking medals for people like Spud Huestis, who had so much faith for so long in the Highland Valley. You'd agree with that, I hope, Mr. Minister. There are people like Murray Watts who here and in other parts of Canada found something like $6 billion worth of ore, which has accrued to the benefit of the people of Canada.

It's just very disappointing to have this lack of appreciation of the motivation and incentive in this industry, which gains a rate of return overall, on the average, just a bit more than Canada Savings Bonds. It's just about on the target that his national leader says is right; yet he thinks it's awful.

Interjection.

MR. GIBSON: It's what all your colleagues say. It's what the Premier was saying the other day. "Poor little Bralorne Resources," he was saying — "poor little Bralorne Resources that didn't make a cent out of mining activity in British Columbia in 1973."

Do you know what they got out of British Columbia in mining in 1973? You know the Bradina mine, Mr. Minister. You know that mine that had to be closed down because the ore was much more complex than they figured, even in a time of high prices; and it was difficult to get employees in that particular area. They closed it down, wrote it off — had no return on their investment.

Interjection.

MR. GIBSON: Oh, what do you mean: "They wrote it off"? That was money down a sink-hole, and you know it, Mr. Minister. You know it perfectly well.

What the Minister has to understand, Mr. Speaker, is that taxes are just a part of the picture. In the mining industry. The other part — and the much more important part — is the jobs that go with that industry, and the towns around the province that are sustained by that industry, and the transportation jobs, and the networks — and even the Members of his party who are sustained by that industry.

Who do you think pays a lot of the taxes that pay our salaries here in this Legislature? A lot of it comes from the mines, and a lot more of it comes from the mining men.

Interjection.

MR. GIBSON: And you are trying to make it impossible for those workers to do it. Sure you are, with this royalty scheme.

The Minister doesn't do the social accounting. He doesn't say: "What's it worth in jobs?" He just says: "What's it worth in royalty? That's all that's of interest to me. Just give me those royalty bucks." That's a narrow, short-sighted view, Mr. Minister. I say again — you tax the profits and you have no problem.

So what does Bill 31 do? It does a lot of harm, Mr. Member.

Interjection.

MR. GIBSON: There's that Minister who wouldn't tell me what a rip-off profit was. I don't know

whether he will today.

Listen to a brief on Bill 31, Mr. Minister, from the Taxation section of the Canadian Bar Association. This brief covers only technical deficiencies that appear in the bill and does not deal with the economic affects of the bill which are questions of government policy. Just the technical defects are worthy of a brief of great length.

Now, I'm not going to read the comments that relate to the particular sections; we'll get to that on committee study. But listen to what it has to say here about discretions, about the enormous and monstrous discretionary power in this legislation.

"We begin by expressing the strenuous objection of the Taxation Section of the Canadian Bar Association to the widespread use of discretionary powers in the bill. The delegation by the Legislature of many of its major policy decisions to the cabinet, to a particular Minister and even to a civil servant is objectionable per se, and is particularly objectionable in a statute that imposes a tax or royalty.

"Unless taxpayers are able to measure the economic effects of revenue legislation with some degree of certainty they are unable to make intelligent economic decisions."

You know who else agrees with that, Mr. Minister? The United Steelworkers agree with that. They say you've got far too much discretion in this bill. You have the right to crush any mining, company in this province or, alternatively, to make a deal with them. Why don't you read the bill, Mr. Minister, and understand what your powers are? I thought you wrote it — you told us you wrote it. You just didn't understand it.

I go on:

"The most important provisions of the bill involve discretionary powers and most if not all of the discretionary decisions are not subject to any appeal to the ordinary courts.

"Liability for a tax or an equivalent charge should be explicit and ascertainable and based upon a judicial interpretation of the will of the Legislature rather than on an administrative discretion not subject to appeal."

HON. MR. NIMSICK: That sounds like it was written by quite a lawyer.

MR. GIBSON: It was written by a lawyer, Mr. Minister, but they're great words. They are words for which legislatures throughout the parliamentary tradition have fought, and that's the right for the Legislature to set taxes and not to have you and the executive set taxes. And that is one of the fundamental defects in principle of this bill — that you would take on yourself the power to set the taxes exclusively for the mining industry and be able to say to any enterprise, "You shall, or shall not, make one red cent in this province," and be able to say to them, "Your employment won't continue — I'm very sorry." Not you, I would hope, but some successor might even say to any company in this province: "We can make a deal." The abilities are there in that bill to make a deal and you know it, Mr. Minister. It's all a part of that discretion.

"The following list, which is not exhaustive, illustrates the many important provisions in the bill which are discretionary:

"1) The determination of the term 'basic value,' which is relevant in ascertaining the super royalty."

Incidentally, Mr. Minister we still don't have the amendments you promised us.

"2) The determination of the term 'designated mineral,' being the minerals subject to the Act."

You haven't told us what minerals are going to be designated, Mr. Minister. You said "Well, copper will be designated, and basic value might be 55 cents." You haven't told us much else.

"The determination of the term 'milling.'

"The determination of the term, 'net value,'"

which is relevant in ascertaining the basic royalty.

"The determination of a 'deemed gross value' in the case of non-arm's length sales.

"The smelting or refining that will qualify a producer for a reduction in royalties.

"The determination of whether to grant a deferment of royalties."

Interjections.

MR. GIBSON: I'm giving the table of contents, Mr. Premier.

The brief goes on:

"The compounding and accumulation of this delegation of power would leave the Legislature doing little more than declaring that there would be a tax or royalty on the production of minerals."

That's what the bill says, isn't it, Mr. Minister? There will be a tax or royalty on the production of minerals — everything else is window dressing.

"It would be left to the government alone to decide what minerals will be taxed, and, in effect, what the rate of levy will be in a range that extends all the way from nothing to a possible charge of more than 100 per cent of the gain in respect of which the levy seems to be imposed. The discretionary powers are so loose that it appears possible that two producers in identical circumstances would be subject to different levies."

Listen to this, Mr. Minister:

"The bill as drawn embodies an unprecedented abdication of responsibility by the Legislature in favour of the administration."

And that's certainly what it does. Surely no Member can be in favour of that. Surely none of those government backbenchers can be in favour of an abdication of responsibility of this Legislature in favour of the executive branch and the right completely to take over taxation.

AN HON. MEMBER: Do you believe that?

MR. GIBSON: I certainly do believe that, Mr. Member, and you would, too, if you read the bill.

Now we come to the impact of the royalty on mineral production. I want to quote here from a column done by the business editor of The Vancouver Sun.

AN HON. MEMBER: Who's he?

MR. GIBSON: Terry Hammond. He is comparing the eloquent words of Dr. Peter Pearse, as endorsed and accepted by the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams), with Bill 31. He compared them and he found Bill 31 wanting, Mr. Minister. Listen to this:

"Aside from the patent irresponsibility and woolly worded incompetence of British Columbia's Bill 31, otherwise known as the mining royalty Act, the provincial mining industry has a further ground for complaint — discrimination.

"When, for example, the NDP government decided to perform surgery on the financial jugular of the province's largest industry, forestry, and set up a special task force chaired by a distinguished academician, whose broad range of specialties include economics, forestry and taxation…."

That's right, Mr. Minister, through you, Mr. Speaker. The Pearse Commission was just that kind of thing. Mr. Minister, you told us in opening that you used to think that the mineral industry needed this kind of commission, but that you were a one-man royal commission yourself once you became the Minister. This kind of thing wasn't required.

"The individual is, of course, UBC's Dr. Peter Pearse and with him on the task force are to other individuals of proven capability, Blackman and Young. What a change from the largely anonymous teams of would-be surgeons set loose upon B.C.'s second largest industry, mining.

"To date it has not been made clear just who the members of the latter surgical team were, aside from their presumed political captain, Mines Minister Leo Nimsick. Possibly, in view of the preliminary results of the operation, Mr. Nimsick's confreres around the operating table will remain hidden unless they attract disciplinary attention from the College of Physician and Surgeons."

Who are they, Mr. Minister?

Then there's some words about the Minister. Some are nice, and some aren't. Here are some of the nice ones.

"One wonders whether Nimsick, a courtly, rough-hewn man of intense loyalties to those who sent him to Victoria, election after election, was not being set up. Time and the flashing knives of political intrigue will tell.

"A few months ago when a delegation from the mining industry went to Victoria to endure the four-letter pleasantries of Premier David Barrett…."

HON. MR. BARRETT: What's that?

MR. GIBSON: The four-letter pleasantries, it says.

"…the Premier wondered aloud if Mr. Nimsick was not perhaps too soft a man for the industry Just as he said in his speech the other day, MT. Speaker.

"…and posed the rhetorical question of whether or not they would Prefer Lands and Forests Minister Bob Williams."

HON. MR. BARRETT: I told them — that's right.

MR. GIBSON:

"In retrospect it might not have been a bad trade-off, as it was Williams who appointed the Pearse task force to solve, among other things, resource revenue problems not far removed in nature from those faced by Nimsick."

HON. MR. BARRETT: His own royal commission….

MR. GIBSON: I heard what he said. I couldn't believe it. As a Minister and a royal commissioner, Mr. Premier, he's underpaid.

HON. MR. BARRETT: He's as old as you get. Show some respect now.

MR. GIBSON: Mr. Premier, I'm being just as respectful as I can.

Interjection.

MR. GIBSON: Given the conditions of Bill 31, I'm being as respectful as I can.

MR. PHILLIPS: Tyrant.

HON. MR. BARRETT: Certainly not. He's good, like Chairman Mao, for another 100 years.

MR. GIBSON:

"In turn it was the Pearse task force which last month produced a modest, 67-page, pale green volume currently being snatched up by mining men in the know as though it contained a route map to the mother load."

In a way it does.

"But first let it be pointed out that this green book, rather stodgily titled 'Crown Charges for Early Timber Rights,' subtitled 'Royalties and Other Levies for Harvesting Rights on Timber Leases, Licences and Berths in British Columbia,' was hailed by the aforesaid Bob Williams as an exciting, excellent document when he tabled it in the Legislature on March 6. He had high praise for Pearse as principal author.

"Pearse, however, hero of Bob Williams, holds royalties in signally low esteem as a means of producing provincial revenues from resource extraction."

Interjection.

MR. GIBSON: Did you read that report, Mr. Minister?

HON. MR. NIMSICK; Every man to his own opinion.

MR. GIBSON: "Every man to his own opinion," says the Minister. Is this a split in the government between the Minister of Lands and Forests (Hon. R.A. Williams) and the Minister of Mines (Hon. Mr. Nimsick)?

"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, and a tax is a levy against profit.

"A mining royalty, for example, is levied on the basis of the market price of the metal you are extracting and does not take into consideration whether you sell it at a profit or a loss. Sell it and you pay, period."

Interjection.

MR. GIBSON: Just waiting for the Minister to applaud.

"I hope that Peter Pearse and his colleagues will forgive me when I suggest, as you read the following selected passages from the Task Force on Crown Timber Disposal report, you substitute such words as mineral, metal, miner, ore bodies when you encounter the words wood, timber, logger, forest. "

He quotes from the Pearse report, Mr. Speaker:

"'Royalties on private 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. No information is needed about the forest from which it was taken nor the costs of logging or transport.

"'The disadvantages of such a system were that it implied all the timber was of an equal value…. .'"

Which we know is nonsense, Mr. Minister, not only with timber, but much more to with mineral resources.

"… which, of course, encouraged loggers only to take the best timber.'"

High-grade, in other words, Mr. Minister.

"'It failed to recognize that timber in different locations varied in value because of differences in logging and transportation costs. Natural forests range from worthless to very precious'

As do natural mines, Mr. Minister.

"'So a fixed levy per unit of wood' — or ore — 'harvested from different tracts will inevitably extract an inconsistent fraction of net value of 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 under-priced and operators would incur a loss on the other half and hence 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 quality.'"

Do you know who is saying this, Mr. Minister? It's the Pearse commission report, paid for by your government.

"'Moreover, refinements to the royalty schedule provided best for variations in only one component of the calculation of timber values, the gross value of the timber, while variations in the other, the cost of harvesting it, are left unaccounted for.

"The task force report goes on to outline the timber royalty Acts of 1914, a piece of legislation designed to endure for 40 years with a schedule of revision every five years to adjust for changing lumber prices."

It goes on later.

"Finally, the Pearse report says on the

subject:"— and listen to this, Mr. Minister:

"'The task force believes that royalties fixed by statute constitute an anachronism in a modern forest policy and that a better approach in measuring the public equity in timber is overdue.'"

Exactly the same thing applies to the mining industry, Mr. Minister. Mr. Hammond goes on:

"Whether we are talking about fixed-dollar royalty off the top or a fixed percentage off the top or whether we are talking about timber or ore makes little difference. The mining industry's primary objection to royalty as a means of increasing public participation in the fruits of mining is that it fails to take consideration of costs of production.

"The inequity of the system can quickly be demonstrated by comparing the effects of the proposed mineral royalty on different hypothetical mines."

Interjection.

MR. GIBSON: Just as timber stands differ, so do ore bodies.

"In one mine costs could amount to 40 cents per pound of copper and in another 60 per cent. Under the Mineral Royalties Act the impost on both would be the same."

That's right isn't it, Mr. Minister? Do you think it's fair?

"During a period of high world prices, the high-cost operation would survive under Bill 31 while the low-cost mine would pay modest dividends and perhaps salt away some of its profits against loan times. When prices fall, the high-cost mine will close; the low-cost mine will be able to hang on for a time at least.

"To propose that British Columbia, a province which needs industrial growth at all levels to meet the demands for employment and social gain, adopt such a chaotic system in its second largest industry is irresponsible and incompetent. There is no quarrel with the notion that British Columbians are entitled to a fair return from natural resources. But unless that return is extracted by any other means than a tax on profitability, they will be badly served."

Mr. Minister, there is the Pearse report. That's a fair quotation from the Pearse report. The Pearse, report is exactly 180 degrees opposite from your policy. It is 180 degrees opposite from it, Mr. Minister of Industrial Development, Trade and Commerce (Hon. Mr. Lauk).

I feel sorry for that Minister, Mr. Speaker. He is supposed to produce some industrial development in this province. With a cabinet of this kind, I won't embarrass him by asking him about cabinet solidarity. I won't embarrass him by asking if he supports Bill 31. He couldn't, Mr. Speaker.

Interjection.

MR. GIBSON: Solid as the Rock of Gibraltar, he said. Solid as the rocks in the head of whoever might have drafted this bill.

Interjections.

MR. GIBSON: Now, let me give to the Minister some of the figures produced….

Interjection.

MR. GIBSON: Mr., Minister, maybe you have read all these things, but I'm not clear that you have understood them. I'm very sure you haven't passed them around to all of your colleagues and to your backbenchers who have to know these things.

There's just a chance that some flicker of understanding could come through. Maybe you read it too quickly the first time.

MR. SPEAKER: Would the Hon. Member please address the Chair instead of carrying on a colloquy?

MR. GIBSON: Thank you, Mr. Speaker.

MR. SPEAKER: I wanted to use that word sometime. (Laughter.)

MR. GIBSON: It's a good word. May I request the page from your dictionary?

I want to cite here some of the information produced by Professor J.B. Evans of the University of British Columbia and also read from a letter in a brief by Mr. Edward P. Chapman, who is certainly one of the most eminent consulting engineers in the Province of British Columbia. He has been until he left that field earlier on this year.

His brief comments on various things but then zeros in on the question of royalties versus taxes on profits. This will demonstrate something that the Minister has been saying all along — will demonstrate the fact that it's not applicable.

The Minister has been arguing that it is the normal pattern between private companies to charge each other a royalty for property that they sublet to the other to mine. Listen to what Mr. Chapman has to say, a man of enormous experience:

"During the first half of the 20th century, a majority of agreements between owners of mining properties and companies carrying out mining and concentrating operations Were based on royalty payments," — royalty

payments — "usually on net smelter returns being gross value less cost of transportation, smelting and refining. Royalty rates were often on a sliding scale with higher percentages paid on returns from higher grades of ore.

"In comparison with today's standards, operations were small; per ton profit margins were relatively high. Royalties worked reasonably well."

So the Minister got his ideas from the arrangements in the first half of the 20th century. Mr. Chapman goes on to say:

"With the advent of large-scale bulk mining of huge low-grade deposits, royalties at rates formerly paid became prohibitive.

"The basic concept of large-scale mining is that a very low per-ton profit multiplied by a very large number of tons per day can result in a satisfactory return on a very large investment. "

You'll agree, Mr. Minister, that that is what has built up the British Columbia mining industry in the last 10 years and the jobs that go with it.

"Per-ton margins often represent a small per cent of gross per-ton metal sales, and royalties in the historic range of between 5 per cent and 15 per cent become completely unacceptable, since such royalties often equal or exceed profit margins.

"Faced with this situation, the private owners of mining properties and the operating mining companies evolved the system now most commonly used under which the owners provide the properties, the operators furnish the capital engineering management and profits are divided on the ratio agreed upon — for example, 20-to-80 or 30-to-70 or 40-to-60."

That's exactly the same as a tax on profits.

"The basic principle of achieving an equitable distribution of the returns from the mining operation is the same when ownership of the properties is private as when it is public — or a combination of private and public. The only system of taxation that automatically provides equitable built-in compensating adjustments for changes in wages, metal prices, foreign exchange and other variables must be based on the difference between revenues from metal sales and the cost of producing that revenue."

That is tax on profit, Mr. Minister, through you, Mr. Speaker.

"As others have clearly and accurately pointed out, the alternate method of assessing royalty on gross returns as provided in Bill 31 raises mining cut-off grades, lowers the amount of recoverable metal in many deposits and will ultimately reduce rather than increase the tax revenue from mining."

How could this be that it could reduce rather than increase the tax revenue from mining?

Interjection.

MR. GIBSON: I was just going to get on to that, Mr. Member.

To give an example, an example which is easier to visualize than the complicated one given by Professor Evans, let's take a patch of trees, 1,000 trees. The question is: is the Crown going to get its money off of these trees with an extra tax on profit?

Let's start with these opening conditions that there are 1,000 trees.

Interjection.

MR. GIBSON: I don't think I'll be through by 6 o'clock, Mr. Premier.

Let's say there are 1,000 trees and the logging costs amount to $1 a tree. And let's say that the tax rate which is currently payable is 50 per cent. To make it analogous to the mining situation, let's assume that the trees aren't all worth the same value but they run in 10 cent increments from $1.10; 100 of them are worth $1.10; 100 are worth $1.20, and so on up to 100 worth $2.

Now under these conditions, Mr. Speaker, as I said, the logging cost was $1 a tree and the lowest cost tree was $1.10. So the logger takes all of it off. Or the miner, if he was mining a ton of ore, would take all of it out, because his operating cost is lower than the value he can get from taking out that unit.

So we add it all up, and what comes out of that little patch of trees or mine? The wages and expenses from logging it all are $1,000. There was a 50 per cent profit tax, remember, so the profit to the operator after the tax is $275 and the tax that the government gets is $275; and the total production to this province is $1,550.

Now we're exactly at the point where we get to the Bill 31 story. The government has decided that they want more money off this resource. So they say: "How should we get more money off this resource?" Some bright fellow comes along and says: "I've got it; we're going to make a charge for these trees. This man hasn't been paying enough for the trees. He's going to have to pay a royalty of 25 cents on each one."

So the operator's a little shocked, but he doesn't close down his operation. He's going to live with that.

All of a sudden he doesn't take out the $1.10 trees any more and he doesn't take out the $1.20 trees any more because it now costs him $1.25 for each one he cuts. He just takes out $1.30 and up.

What is the result to the B.C. economy when you do the arithmetic again? The wages and expenses that

are paid out are $800. In other words, there's $200 worth of jobs lost by that royalty. The total income to the government has gone up from $275 to $360. You've got that; you've got your pound of flesh when you do it that way. You get a little more. The profit to the operator has gone down from $275 to $160.

So the government has got its pound of flesh. The operator still has a profit; some of the trees were still cut down. But the wages weren't paid, and the total productivity in the B.C. economy, instead of being $1,550, is $1,320. That's just a simple little example of what a royalty does and how it leaves low-grade resources untaken, left on the ground or left in the ground, when you raise the cost by means of a royalty.

So, using that logic, Professor Evans took a typical porphyry copper deposit with the higher grade area and then the lower grade areas extending around it. The results that he got were pretty terrifying. The net result of it was how Bill 31 turns ore into waste. That was the headline in The Province of April 8. Listen to this, quoting professor Evans:

"As recently as 1960 copper production in B.C. was negligible. In 1961 we got our first low-grade porphyry copper mines. So in 13 years we've grown to produce almost 5 per cent of the world's copper from the lowest grade mines in the world. B.C. copper mines have an average grade of recoverable copper of eight pounds per ton."

He said that Valley Copper Mines Limited, which has developed the biggest ore body in Canada — one billion tons, at .4 per cent — is in jeopardy. "If Bill 31 becomes law, with a supertax on a 55 cent base, Valley Copper is dead. It will never go into production," he said.

The Minister's shaking his head — in sadness, I presume.

HON. MR. NIMSICK: Never is a long time.

MR. GIBSON: Never is a long time; and this government might be thrown out. It'll sure be thrown out before never. Then there'll be some better results. Then there'll be a better chance for jobs.

He produces a series of graphs which show the following. This is a typical theoretical mine. At $1.20 per pound for copper the mine has an ore reserve of 37 million tons containing 168 million pounds of recoverable copper. It has a mining life of 7.4 years.

But if Bill 31 is passed in its present form, the ore reserve is reduced to 13 million tons containing 108 million pounds of recoverable copper, and the mining life is reduced to 2.6 years. That's the effect on this particular mine at $1.20 copper.

Now the Minister might say that $1.20 Copper is too high. What happens at $1 a pound? At $1 per pound for copper the mine has ore reserves of 24 million tons containing 100 million pounds of recoverable copper. Its mining life is 4.8 years. Bill 31 would reduce the ore reserves to 12 million tons containing 58 million pounds of recoverable copper and the mining life to 2.4 years. The gain in mine revenue from Bill 31 would be $3.8 million.

The 300 employees, however, would have lost 2.4 years of wages. The loss of wages, suppliers' revenue, freight and smelting revenue and cash flow would be $45.8 million. Bill 31, because of the higher government revenue — big deal…. An extra $3 million would reduce the net loss to the province to only $42 million.

Just by Bill 31, just on this one mine, at $1 copper, which is lower than the level we're at today! That's the opinion of Professor Evans, whose opinions and calculations I respect.

Let me give you another opinion I respect — that of Mr. Ed Schultz, who's the president of the B.C.-Yukon Chamber of Mines. This was another speech at that general meeting. If the Minister had attended, he would have heard all these things. But he decided not to. Mr. Schultz said:

"Now let us examine why the enactment of Bill 31 into law would be disastrous.

"There are 31 hard-rock and two coal mines operating in B.C. The hard-rock mines have ore reserves of more than 2.3 billion tons, most of which are represented by the reserves of 14 large, low-grade mines. The 31 hard-rock mines produce more than 100 million tons of ore per year. The two coal mining operations can produce about 10 million tons of washed coal annually.

"In addition, there are 24 other mining properties in B.C. with ore reserves totalling 3.7 billion tons which are being considered for production.

"This brings the known hard-rock ore reserves in B.C. to six billion tons, almost all of which has been developed within the last 20 years.

"This was the situation before the impact of unfavourable mining legislation in B.C., and most particularly Bill 31. Bill 31, if enacted into law, will probably result in the near future closing of at least three presently operating mines."

I hope that's not true, Mr. Minister. At the current price of ores I don't think so. Maybe if the prices go back to historic levels. Continuing to quote Mr. Schultz:

"It will make a number of others into unsuccessful investments because the return to shareholders, if any, will be well below that necessary to simply offset the erosion of the purchasing power of money due to inflation.

"Royalties related to gross value are simply

an increased operating cost, and those put forth in Bill 31 are extremely onerous. Any increase in operating cost reduces the total ore reserves of any property and, therefore, its economic life.

"In general, the presently operating mines in B.C. will have their economic life reduced 50 per cent…"

A 50-per-cent reduction, Mr. Minister, in economic life by the enactment of Bill 31, and probably only three of the properties not now in production will warrant bringing into production.

"…under the unenlightened and onerous extra financial burden imposed by Bill 31 were it to become law."

Interjection.

MR. GIBSON: I'm agreeable if you're agreeable, Mr. Premier. I have one more sentence in this quote, if I may.

Interjection.

MR. GIBSON: Because it's an important one.

Interjection.

MR. GIBSON:

"Stated simply, Bill 31 makes waste out of more than four million tons of ore, and, therefore, in due course reduces direct employment in mining by 67 per cent, direct capital investment in the industry by more than $1 billion within the next decade, and, since six other jobs and therefore, six other industries are created for each direct mining job in operation, the ultimate adverse impact on the economy of British Columbia is tremendous."

Mr. Speaker, with the suggestion of the House Leader, I move adjournment of this debate until the next sitting.

Motion approved.

HON. MR. BARRETT: Mr. Speaker, I move we proceed to motions.

I would like to call motion 32, Mr. Speaker.

HON. E. HALL (Provincial Secretary): Mr. Speaker, my motion 32 on the order paper of the day on page 4 asks the House to adopt report No. 4 of the Select Standing Committee on Standing Orders and Private Bills.

That report, Mr. Speaker, was presented to the House by the Second Member for Vancouver–Little Mountain (Mr. Cummings) following a series of meetings of your Select Standing Committee on Standing Orders and Private Bills.

What the report seeks to do, of course, is to change by standing orders many of the rules of the House and, in effect, disposes and responds to a motion of mine which was placed on the order paper some time ago that dealt with the duration of debates.

I think everybody has now found their place.

MR. SPEAKER: I wonder if the Hon. Provincial Secretary could give us the page in Votes and Proceedings that dealt with the report.

HON. MR. HALL: I might be able to do that, Mr. Speaker. May 31, I hear, Mr. Speaker. I think it's May 30 on page 3.

MR. SPEAKER: Thank you. I have one here, I think. May 30, page 3.

HON. MR. HALL: Mr. Speaker, it was an all-party committee. There was a great deal of debate, some consensus of view, no unanimous vote. It has been well covered in the news media, television, radio and the press. I'm sure that the Members on the select committee have reported back to their various groupings in the House — seven or eight in number, or whatever the latest number is.

No doubt we will get this through the House speedily. If ever there was a motion which should go through with dispatch, it's a motion to improve our proceedings.

I move motion 32.

MR. J.R. CHABOT (Columbia River): Mr. Speaker, motion 32 is the motion which brings about the preconceived ideas of the government in the management of the affairs of this assembly.

It is ironic that, really, we find ourselves in the position of debating this motion and entertaining the passage of this motion after just last night having made very serious changes to the Constitution Act which, in effect, suggests that the Members of the Legislative Assembly shall be paid what is considered to be a reasonable annual stipend or a reasonable annual salary. If that is the case, then certainly there should be no need, in my opinion, for this serious type of limitation on debate of the affairs of the people within this assembly which this motion proposes to implement.

It was almost like a regimental march for the Members of the opposition in that committee. We could see the moves and the motions and the resolutions coming forward in a most orderly fashion, because the….

Interjection.

MR. CHABOT: That's not true.

HON. MR. BARRETT: How many did you miss?

MR. CHABOT: I missed one or two meetings, that's all.

Interjection.

MR. CHABOT: Where are you going to be tomorrow?

HON. MR. BARRETT: I'm going to be here. Where will your leader be?

MR. CHABOT: My leader will probably be here tomorrow. (Laughter.) That has nothing to do with the…. At least we have a House Leader. You don't have one of those.

Interjections.

MR. CHABOT: He operates as a one-man show over there.

But we're discussing the very serious limitations being imposed on the Members of this assembly, Members who will be voting very shortly on the implementation of a $24,000-per-year salary by the changes in the Constitution Act.

The government, it appears, is very sensitive to criticism. The government is anxious to dispose of a legislative session. That is one of the reasons why they're implementing these changes in the standing orders and changes in the management of the Legislative Assembly. It almost appears that the government intends to use the Legislative Assembly as a tool rather than a forum for the expression of opinions and for the expression of the views of the electorate of this province.

We find there are going to be serious limitations in the estimates. We find that in British Columbia now we have a budget of $2 billion, which will accelerate very substantially in the years ahead. We find now serious limitations on the ability of Members to question the wisdom or lack of wisdom of government in the spending of this $2 billion.

It's suggested now that we will be restricted to 135 hours for debating the estimates of the Province of British Columbia and of the various Ministers of government without the implementation of escape valves and without the implementation of other means for Members to scrutinize the estimates as exist in other parliaments in the country.

Many other parliaments have the alternative where special committees of 10 or 11 Members sit and debate the estimates very thoroughly. Then the estimates are brought before the Legislature for, again, an equal opportunity of expression of opinion.

In some instances, as Ontario, where they are debated in select standing committees, as they are called here in British Columbia, there are restrictions in the assembly in Ontario. The restrictions are comparable to restrictions that we are imposing here. But, as I suggested before, they have that escape valve which does not exist in British Columbia.

There appears to be something; the government does not want to see the estimates closely scrutinized. After all, this is a forum of people. This is a forum where we question the Ministers on the spending of the taxpayers' dollars.

I strongly believe that the taxpayers and the taxpayers' representatives should have an opportunity to let the sun shine in, as the Attorney-General says, on the expenditure of taxpayers' dollars. This is the only area in which we, as Members, have an opportunity of debating the estimates of government.

It's going to be extremely difficult for the Members of opposition to come to a conclusion as to which estimate probably deserves the most scrutiny. We of the official opposition might conclude that certain estimates should be more closely scrutinized than others. Yet Members of other parties in the House might conclude that these aren't the estimates they feel should have the closest scrutiny.

So it becomes very difficult to debate these estimates with these limitations if the time is utilized prior to reaching those estimates which we, after much deliberation or doubt in our caucus room, come to the conclusion are those that we want to devote the most time to.

We will find in some instances, with this serious limitation being imposed on the scrutiny of the expenditure of tax dollars, that we will not be able to debate and the matter will be passed without any scrutiny.

From discussion with Members of the Legislative Assembly of the Province of Quebec just a couple of days ago I was informed that their estimates all go to a select standing committee where they have that escape valve. But each and every estimate, once it has been closely scrutinized by an all-party committee, is then brought into the House for further debate.

Each and every estimate in the Province of Quebec is given 10 hours of debate. There is no estimate that can pass without being given 10 hours of scrutiny in the House. I think that is a reasonable way to approach the estimates. It's not one that we see reflected in British Columbia. We are given the opportunity of 135 hours. We are given no assurances against abuses that are possible to take place in these estimates. I think it is a most unfair approach to take regarding the affairs of the people of British Columbia.

I made a suggestion in the committee which I thought was reasonable. I've always considered that the estimates are the guts, or the most important

aspect, of the Legislative Assembly. I suggested in the committee that maybe, if there is a necessity for restricting debate, that that restriction should take place in the throne debate — that in lieu of the present procedure of the Lieutenant-Governor coming into the House and opening the assembly on a Thursday, he would come in on a Monday.

After he had delivered his speech there would be a mover and a seconder on the Tuesday. On the Wednesday the leaders of the various parties would have an opportunity to debate the throne speech. On Thursday there would be an opportunity for the Members of the House; the backbenchers would have an opportunity to speak.

The throne debate would be limited from Monday, the day on which the Lieutenant-Governor opens the assembly, to Thursday. Then on the Friday the budget would come down. This again would be a fair approach because it would give the leaders of the various parties the opportunity of studying the budget speech on the weekend. This presently exists.

But if there is this anxiety on the part of the government to restrict debate and scrutiny of the affairs of the people of British Columbia, it certainly should be done under the suggestion that I have just made. The restriction should take place in the throne debate and not in the estimates.

You're suggesting now that in view of the fact that we are paid a full-time salary — or what I consider to be a full-time salary, of $24,000….

Interjection.

MR. CHABOT: Yes, you're correct — $16,000 as salary and $8,000 for expenses.

You're suggesting now that in those 52 weeks of the year we should be restricted to 135 hours to examine and question, to scrutinize and suggest how this $2 billion-plus should be expended. Certainly it will be substantially more next year. I think that these restrictions which are being placed on this assembly are not in the best interests of the government and are not in the best interests of the Legislature. They are far too restrictive without having at least established special committees to scrutinize the expenditures of the various estimates of government.

I was really appalled at the way the motions were coming in to the committee in such rapid succession, in such a uniform and clearly-thought-out procedure — which was preconceived, no doubt, prior to the committee even being struck.

The Premier castigated me just a few moments ago for missing one of these meetings. It wouldn't have mattered very much if I had missed them all because it was already prepared and determined just what the strategy would be in the Legislative Assembly by the establishment of that committee.

I don't think I've ever attended a select standing committee that was as predetermined as that one. The government had made up its mind that they are going to restrict debate in the House during the throne speech, during the budget speech, during the discussion of legislation and, most of all — the thing that I find most difficult to accept during the estimates where we have an opportunity to scrutinize the expenditure of tax dollars.

Certainly, as the Member for North Peace River (Mr. Smith) said when he mentioned new Crown corporations, there has been a broad expansion of government in recent years — most notably in recent months — where new Crown corporations are being established. This gives us an opportunity in a more open fashion to scrutinize and question the government.

You can make all the statements you want about the question period as a new venture and a new openness of government, but it doesn't compare with the opportunity of the Members to question Ministers during the estimates. There are many Ministers over there who, in most instances — I'm not going to suggest that they all violate this — take questions during the oral question period as notice. The answer is never forthcoming.

We are very restricted in the way a question can be put in the oral question period. Those restrictions are not fair during the estimates. However, we see with the motion that we are debating — motion 32 — the government attempting to bring on some serious restrictions regarding the management of this Legislative Assembly.

I'm certainly not in favour of the type of roughshod treatment which the government is prepared to impose on this Legislature. Certainly I would have been agreeable to certain reasonable restrictions in the committee. But I think that the report submitted by this legislative committee goes too far. It is excessive, and there is absolutely no need, with a Legislative Assembly of only 55 Members, to have this kind of harsh form of closure being imposed by the government in the scrutiny of the people's affairs.

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

Motion approved.

MR. SPEAKER: Before we adjourn Hon. Members, I would like the opportunity to introduce to the House Mr. and Mrs. Pai from Madras, India. He is a Member of Parliament from there and he's in the central gallery. I'm sure you'll all make them welcome.

HON. MR. BARRETT: Mr. Speaker, I regret the absence of the Hon. Minister of Transport and Communications (Hon. Mr. Strachan) because today

marks the 22nd anniversary of continuous service by that Minister to the people of British Columbia. But I would regret it if he started emulating the habits of the new Leader of the Opposition (Mr. Bennett).

HON. Mr. Barrett moves adjournment of the House.

Motion approved.

The House adjourned at 6 p.m.

APPENDIX

The following amendments are referred to on page 3956 et seq.:

134 The Hon. Eileen E. Dailly to move, in Committee of the Whole on Bill (No. 134) intituled Institute of Technology (British Columbia) Act, to amend as follows:

Section 5 (1) (i) (iv): By deleting paragraph (iv) and substituting the following:

"(iv) an advisory committee in respect of the Health Division, the Engineering Division, the Business Division, and the Core Division as those divisions are continued by the Institute; and".

Section 5 (2): By deleting subsection (2) and renumbering subsection (3) as subsection (2).

Section 8:

(a) By inserting, after subsection (3), the following as subsection (3a):

"(3a) For a period of twelve months after the date this Act comes into force, section 53 of the Labour Code of British Columbia Act does not apply to the Institute or its employees."

(b) By renumbering subsections (3a) and (4) as subsections (4) and (5).

By inserting, after section 12, the following as sections 12A and 12B:

"Audit

"12A. The accounts of the Institute shall be audited at least once a year by the Comptroller-General or by some person appointed by the Lieutenant-Governor in Council for the purpose."

"Report

" 12B. (1) The Institute shall make an annual report of its transactions to the minister, in which shall be set out a balance-sheet and a statement of revenue and expenditures for the year ending on the preceding thirty-first day of March, and such other particulars as the minister may, from time to time, require.

"(2) The minister shall lay the report before the Legislature if it is in session, otherwise before the first session in the following year."

By renumbering sections 12A to 13 as sections 13 to 15.