Hansard — Monday, February 24, 1975

1975 Legislative Session: 5th Session, 30th Parliament
HANSARD

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, FEBRUARY 24, 1975

Night Sitting

[ Page 107 ]

CONTENTS

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker, I feel very flattered to be the one this evening to initiate the first of our evening sittings during this session. I notice the turnout isn't quite what it is in the afternoon sessions…

MR. McGEER: …but I was here this afternoon, Mr. Speaker, and I was here the afternoon we had to dispense with the proceedings because the public address system wasn't working well.

I noticed that the subject under discussion before we adjourned for dinner was one of eggs, and I knew that would bring the Member for Shuswap (Mr. Lewis) out. I want to tell you that this matter of eggs isn't really a preoccupation with the Liberal Party. Because of the national interest in this we've a very particular interest in the problems of marketing boards here in British Columbia, and I certainly intend to deal with that before I sit down. But, Mr. Speaker, since I am also speaking to the throne debate itself, there are one or two other matters which I believe deserve consideration.

I want particularly to talk about the CBC film that was aired a week ago Sunday night. The commentator….

HON. P.F. YOUNG (Minister of Consumer Services): Mr. Speaker, a point of order. The Hon. Member is not speaking to the amendment.

MR. McGEER: Mr. Speaker, would you explain the rules of the House to the Hon. Minister? I think she misunderstands the traditions of the House.

MR. SPEAKER: May I point out that the Hon. Member who is speaking is the seconder of this amendment to the main motion, and therefore he's entitled….

MR. SPEAKER: No, I must disagree with the Hon. Member when he consults his standing orders.

At any rate, Hon. Members, the seconder, in this case the Hon. First Member for Vancouver–Point Grey (Mr. McGeer), is entitled to speak at large on the main motion before embarking upon any remarks he has upon the seconding of the amendment. This is true, as it was before, with the previous amendment; it's true in this case as well.

MR. McGEER: Mr. Speaker, are we entitled to ask that this banter here be deducted from the time of the speaker?

MR. McGEER: In any event, Mr. Speaker, this commentator for the CBC…and I don't want to add further embarrassment tonight to the problems of the CBC, but I do want to draw the attention of the House to the fact that the man who was the commentator was also a former member of the press gallery of this House. He was a member of the press gallery at the time there were rather hot debates about the Columbia River treaty. He did say that when the government changed in 1972, the awful truth came down. I am quoting from his commentary in the film: "The new government of Premier Barrett found the money we were paid under the treaty was nowhere near enough to do the job."

While that's absolutely true, that the money was insufficient, the answers had been given on questions to the order paper, long before the government changed hands. We knew prior to the 1972 election that there had been an enormous shortfall in the moneys paid by the Americans for completion of that treaty.

I mention this little discrepancy because it might apply to another comment made during this film. It said that "by 1967" — I am now quoting from the commentary — "the Bennett government was trying frantically to cover the costs. In the B.C. Hydro building a secret committee was put together to unload costs into other departments: Highways, Forest Service and others were to be tapped for the funds, and the public knew nothing about it."

It was this comment in the film that provoked a question from my colleague, the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) as to whether, in fact, a secret committee did exist. The Minister of Lands, Forests and Water Resources (Hon. R.A. Williams), also a director of B.C. Hydro, established an Olympic record in bringing down so-called secret minutes of such a committee.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): No wonder you're not a senator — or ever will be. (Laughter.)

MR. McGEER: His speed was watched by the relations men, or whatever they're called in the Premier's office, who hastened to get out a press release stating that such a committee had indeed been formed. I quote from page 2 of the press release:

"The documents the Minister of Lands, Forests, and Water Resources tabled showed that Dr. Hugh Keenleyside, then co-chairman of B.C. Hydro, appointed the committee on September 26, 1967, to carry out the following two assignments." Now I'm quoting from the press release:

"(1) [Discover] Mica and Arrow Dams' cost that could be attributed in whole or in part to other projects.

"(2) [Discover] Arrow cost that could be isolated and recommended to the government as area or regional development expenditures by the government itself."

Mr. Speaker, I'd like to draw your attention to the actual documents that were tabled in the House. First of all, the cover that we had of that document said on it "confidential." Just a simple cover sheet, not in any way attached to the minutes that detailed the meetings which were then held. Nothing on this document says "secret." There is nothing on page 1 saying "confidential" to indicate that within Hydro itself it was confidential at all. The terms of reference were given in minutes recorded of the meeting of that particular committee.

In a notation from the minutes of the first meeting, held September 25, 1967, the assignment to this committee is described as follows: "(1) Mica or Arrow costs that could be attributed in whole or in part to other projects." Nowhere does it mention the word "discover;" nowhere does it mention the word "secret." "(2) Arrow costs that could be isolated and recommended to the government as area or regional development expenditures by the government itself." Nowhere is the word "discover" used. Nowhere anywhere in the minutes is it filed that this was a secret, or even confidential, committee.

There is no doubt, Mr. Speaker, and this has not been denied by the co-chairman of B.C. Hydro, Dr. Hugh Keenleyside, that the assignment given to that committee was to reallocate, or to study how costs of the Columbia could be reallocated; nor is there any mistake about the understanding that the people who served on that committee had of their assignment. If we look at the first minute, prepared by Mr. Kennedy in a memo, he says in part D, with regard to their assignment and the possibilities of reallocation, that:

"It would enable us to argue that the capital cost of, say, the Mica storage project is less than the actual storage cost by virtue of allocation of some of the cost to other plans."

"It would enable us to argue that the system cost of generation is lower than the true cost by virtue of allocation of storage costs to future plan."

I could go on quoting from the minutes, and many of the Members of the House have now read them. The point I want to make is that, at least within the committee itself, there must have been an understanding that their assignment was to draw up a plan which, in fact, would deceive the public of British Columbia about the true costs of these dams. That much is evident in the minutes itself. But what we don't have, Mr. Speaker, in what was tabled is whether, in fact, this plan was implemented.

HON. D. BARRETT (Premier): Are you saying, in your opinion, this committee was established to deceive?

MR. McGEER: I'm saying that, as prima facie evidence right here, the understanding that the committee had was that it was to draw up a set of figures which would deceive the public about the true costs of the Columbia. They say it right here in D and E. But, Mr. Speaker, this was a committee within B.C. Hydro itself. That committee could have misunderstood its assignment, and even if it didn't misunderstand its assignment, it was still an in-house committee, and there was no evidence of any kind that that in-house committee was doing anything improper for an in-house committee.

So what has to be established, Mr. Speaker, is simply this: what was the origin of this study?

There is no minute in the information tabled by Mr. Williams saying what were the terms in writing. Dr. Keenleyside has told us that he did this entirely on his own initiative. There is no information at all as to what happened to that report after it was filed with Dr. Keenleyside.

If it became official Hydro policy, then it must have been discussed by the board of directors. There are extensive minutes of the board of directors. None of them can recall this matter ever having been discussed. It may have been; it could have slipped their memory.

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): Shrum said there was no committee.

MR. McGEER: It's quite possible that something did go forward from Dr. Keenleyside through some route to the government that did not reach the board of directors of Hydro. That is conceivable. After all, we know that Mr. Gunderson had a direct line in the B.C. Hydro office to the Premier, which was something that Dr. Shrum and Dr. Keenleyside never had. There was daily contact between Mr. Ganderson and the Premier. That would be a conceivable route for communication outside the board of directors. But we have no evidence at all that there was such communication, no evidence at all.

Mr. Gunderson was asked, but he said he couldn't remember what he ate yesterday, much less what took place in 1967. If I were Mr. Gunderson there would be an awful lot of things I'd be trying to forget, and this might be one of them.

But in any event, it is conceivable that there was a relationship between the powerful men in the cabinet and the powerful men in the Hydro that never saw the light of day in the minutes of the board of directors' meeting.

Or it's conceivable that the Minister really didn't have time to research this matter carefully, though one suspects that he had been in conversation with Mr. Halleran for some time before that movie was aired. It's conceivable that he didn't have time to research the matter thoroughly and that there is, in fact, a direct link between the report prepared by this committee, however confidential or non-confidential it might have been.

Certainly, Mr. Speaker, one can understand a motive on the part of the government. They had won an election, so they thought, on the basis of a two-river policy which would give the Columbia free to the people of British Columbia. As a matter of fact, there were two elections won on that propaganda.

It's quite possible that when the pigeons came home to roost in the late 1960 s, the government was terribly keen to protect the reliability of its word. After all, there had been one embarrassment in the late 1960 election when the Premier had gone up to the clearing at Summit, felled a tree, and said that the Pacific Northern Railway wouldn't stop until it reached the Yukon border. Six weeks later, just after the provincial election had been won by Social Credit, the Pacific Northern Railway stopped for all time.

There was a credibility gap there that was beginning to widen with each subsequent election. One could certainly appreciate that a Premier who had won three elections on the basis of information that was turning out to be incorrect would be rather anxious to reallocate costs. So I wouldn't deny that there was a motive there.

But, nevertheless, the Minister of Lands, Forests and Water Resources has failed to prove the case in the documents he has tabled before the House.

What we have now is the honour of the government versus the honour of the Crown corporations and former high Ministers of the Crown in this province.

We must have an inquiry, because until we do we cannot decide the outcome of this issue. It's obvious, Mr. Speaker, that the Minister of Lands and Forests (Hon. R.A. Williams) cannot carry on in his capacity as a director of B.C. Hydro if he has levelled false charges at people who formerly directed that corporation and has improperly used the files of that corporation to bolster a political case. He either has to prove in front of an inquiry that his allegations were correct or he must resign as a Minister of that corporation.

MR. McGEER: On the other hand, he cannot, Mr. Speaker, continue to serve as a member of the board of directors of B.C. Hydro when he has improperly taken information from those files and improperly charged former officials of that corporation.

HON. MR. BARRETT: The Member has stated that the Minister improperly took public files and brought them to this Legislature. There is nothing improper with that and I ask the Member to withdraw.

MR. SPEAKER: I don't think the Hon. Member can attribute improper motives for doing what he was requested to do.

MR. McGEER: Mr. Speaker, the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) merely asked whether there was a secret committee. We haven't established that. He asked whether there was any evidence of juggling of funds. We haven't established that. All the Minister of the Crown did was to bring forward a series of minutes taken out of the files of B.C. Hydro that didn't establish the case.

MR. McGEER: It may be that former Hydro officials and former high officers of the Crown must be held to account for most gross misdemeanors, because if, in fact…

MR. McGEER: …there was a conspiracy initiated by the government and later adopted by the government to present to the public false information about the Columbia and cover up with regard to the true costs, then that does amount to a gross misdemeanor, and those people must be held to account.

Mr. Speaker, someone is wrong. The Minister has acted improperly or the former officials of B.C. Hydro and the former government have acted improperly.

MR. McGEER: I suppose, Mr. Speaker, in the stretch of history moral issues in government will perhaps always supersede anything else that legislators discuss. Roads and dams and all the other physical things that governments have as their responsibility during their terms of office pale into insignificance compared with the manner in which they conduct their affairs, and over the long term issues such as this will rise above physical works and the financial considerations that surround them.

But I can't let the opportunity pass, Mr. Speaker, to remind the government and the public of British Columbia that there is another issue lying behind all of this. The people of British Columbia and the people of Canada were suckered by the Columbia River treaty. We took a financial pasting because we didn't understand enough about engineering and water flow. I know I've sounded tiresome on this subject in the past, and as long as I stand here in the House, I'm going to be tiresome on this subject because there's a lesson here.

Mr. Speaker, has anybody asked how it could possibly be that the value to Canada of downstream benefits declines with each year of the treaty when the value of power is increasing? Doesn't that anomaly strike people as strange?

MR. McGEER: And yet these were the terms of the treaty. It was supposed, Mr. Speaker, that we had studied this thoroughly and that all those that are criticizing now are gifted with hindsight. But in 1961, in a public meeting in Revelstoke, a perceptive British Columbia Hydro engineer, named Bartholomew, made public to the people of this province a United States engineering document which declared that the United States would save $120 million a year from water storage above the Grand Coulee Dam.

The reason is a very simple one: before Canadian storage came along, the bulk of Columbia River water flowed during the months of May, June and July. When the run-off came, it spilled over the dam. The Americans argued and the Canadians accepted the argument that if they were to install extra generators on the Grand Coulee they could use all of the water that ran through during those three months and therefore, once those extra generators were installed, there was no value to Canadian storage.

That's not what's happening at all, Mr. Speaker, What's happening now is that with the water neatly stored behind the Canadian dams, an area of British Columbia larger than Rhode Island inundated forever, we're regulating the American flow so that tonight, between 4 o'clock and 9 o'clock, when everybody goes home and switches on their television sets and turns on their stoves, there will be water available.

You can run the reservoir down 60 feet in one day, fill it up again the next day from Canada. Run it down; fill it up; run it down every day of the year, and when the Americans want power, they've got it because we've put the water behind the dam.

Mr. Speaker, they get that free. There is no provision peaking power in the Columbia River Treaty at all. Think of that value to the Americans in 1980, 1985, 1990, when we get nothing for it. How valuable it is for them every day to get that water coming down from Canada so that when the peak demand comes, they can run through these enormous generators that they're installing now. What good would it have done to have that power available at 3 a.m. on June 21? None. So the Americans were able to install enormous peaking power and get all of that for nothing.

When I stand up and say we must renegotiate the Columbia River treaty, it's because the Americans pulled the wool over our eyes. We were told that by Bartholomew and others who could understand the dynamics of water flow. Apparently it was something that former Ministers of the Crown here couldn't understand and, I regret to say, our federal colleagues couldn't understand.

MR. McGEER: Yes, I quite agree — the Liberals missed the boat on the thing. But, Mr. Speaker, the responsibility of the government that holds office in British Columbia today is to rectify that situation, not to try and uncover alleged scandals of the past, but to rectify. The problem is that the government of today has got no guts. They refuse to press this issue.

Even the former member of the press gallery, who should know better, and did that beautiful national documentary, never brought forward the fundamental point. All he did was interview a friend of the Minister of Lands and Forests who said it couldn't be done.

We have routes, and I spelled them out in this House before. The first of these is to go directly to the IJC and explain that there was a fault in the treaty. That fault gives an unfair advantage to the United States, because they have derived tremendous financial benefits from peaking power which they denied would exist in the treaty.

Now we have a second route, which may be better, but which at least is available. That route is to go to article 15 of the treaty which says that there's….

MR. McGEER: Oh, yes, I'm sure they don't want to hear this. These aren't welcome words, because a government without backbone isn't going to deal with this issue. Yet, Mr. Speaker, we're talking about more money each and every year than would be involved in all of this Columbia recalculation. It amounted to about $80 million, but in 1961 dollars what the Americans were saving was at least $120 million a year. We could recover everything we've lost in the Columbia, and more, from a renegotiation each and every year. That's the size of the financial stake we have.

The other approach to it is to, say, take advantage of article 15, which said that we should investigate and report with respect to any other matter coming within the scope of the treaty at the request of either Canada or the United States of America.

There is a permanent engineering board established under the Columbia River treaty that must investigate any matter brought to its attention by either government.

So these are two direct routes. Mr. Speaker, the Government of British Columbia must use its mandate, given by the public of this province, to seek justice under the Columbia River treaty. The Minister and this government have failed to do that. They have got no backbone. Instead they've drawn attention to the mistakes of the past, and I am quite prepared to agree with them that there have been mistakes. We have no evidence to date whether they were willful or whether they were accidental. They were mistakes. Even Dr. Keenleyside would admit that. But, Mr. Speaker, those mistakes of the past do not equal the mistakes that are being made today by ignoring this much larger financial issue.

Mr. Speaker, I would just like to speak very briefly about another matter in which I am pleased to say that at least at first I backed up the Premier in his efforts to go to Ottawa and seek a better deal on natural resources. I did send the Premier a telegram of support, Mr. Speaker. I had hoped when he went to Ottawa again he would display some backbone on behalf of the people of this province.

In my view, Mr. Speaker, the new taxation policy of the federal government in taxing the resources of the west is an invasion of the historic rights of provinces. I don't see how the east can hope to have it both ways for very long. We have lived 100 years as a province in Confederation — 104 now, I guess — in which we have accepted the disadvantage to the west of a Canadian common market. All this time we bought expensive manufactured goods from Toronto, protected by what to me are unreasonable tariffs, and in the west, in order to buy those manufactured goods, we sold off our birthright at world market prices.

This is nothing new to British Columbians. They've complained about this for 100 years — buying dear from the east and selling cheap to the world. On the basis of these resources we've managed to win for ourselves in British Columbia a reasonable standard of living.

But now, when those resources suddenly become valuable and conceivably we could win income from the sale of those natural resources that would allow us to build our own secondary industry, manufacture for ourselves, hopefully sell a little bit to Ontario, and perhaps some to the world, we are told no, we can't have the full value of those resources. Instead, now that those resources are valuable, we must pay further tribute to eastern Canada — a creaming off, if you like, of our natural resources once they obtain a premium value.

Mr. Speaker, thank heavens for the Economic Council of Canada, because for the first time a responsible body has studied the relative value to Canadians of entering into free trade arrangements around the world. We really have never been afraid of it in British Columbia because we've really traded with the goods we produce at world market prices. We've got nothing to lose and, if my calculations are right, possibly as much as $3,000 per family per year to gain by free trade arrangements. So for us the stakes are very high to change the ground rules of

I suppose if we were to have free trade in manufactured goods there might be more excuse for evening out on resources. But even then I think the only tolerable long-term position for Canada to take is to sell at home and abroad at world market prices and let the most efficient people win.

Mr. Speaker, I think the only Premier in western Canada with any backbone is Premier Lougheed.

MR. McGEER: I must say that the Premier was full of headlines when he left. Then when he got back to Ottawa, he got in a room behind closed doors and he said: "Let's make a deal." He came home with his tail between his legs and repeated a pattern that we've seen for too many years in British Columbia. That's the easy headline with the local press, suggesting that we're sending a big hitter back east. Then he gets back there and he takes three strikes. He never lifts the bat off his shoulder. He comes back and says he's had a victory.

That's the first government where we've had that kind of thing. They've come to expect it in eastern Canada, Mr. Speaker, sending back a Premier who simply can't hold his own with the better prepared people in eastern Canada. We shouldn't send these delegations back without having studied thoroughly our position and having a delegation who are smarter and better prepared than the counterparts they'll meet in eastern Canada. Only when we begin to do that kind of thing in British Columbia are we going to get the kind of deal that the people of this province deserve.

I'm embarrassed, really, Mr. Speaker, at having sent the Premier a telegram. I did it in good faith. I hoped that he would be able to represent me and other British Columbians in our belief that we should get a fair shake out of Confederation. He's failed to do that. For the life of me, I can't understand how he could return and be interpreted as having had a triumph. He made Neville Chamberlain look like a bold and aggressive representative of Britain in his famous sojourns into Europe.

MR. McGEER: Gas in our time. Mr. Speaker, I'd just like to conclude by lofting a couple of eggs across the floor.

It seems to me, Mr. Speaker, that an independent tribunal, the Supreme Court of Canada, which has heard people under oath, has really substantiated the charges levelled by the Second Member for Victoria (Mr. D.A. Anderson). As I understood the judgment, the Premier and Minister of Agriculture (Hon. Mr. Stupich) were guilty as charged by the Liberal leader, the good Member from Victoria. I think the Liberal leader was restrained this afternoon, Mr. Speaker. You might even think so.

MR. McGEER: He had an overwhelming case in his favour and presented it with delicacy and much greater restraint than he did in the time before he was vindicated. But, after all, he was right, wasn't he, Mr. Speaker? You read the judgment. He was right.

MR. SPEAKER: I don't know what you're talking about. I think that you're not on the topic of the amendment now. You must be talking about something, but I don't know….

MR. McGEER: Come on, Mr. Speaker. You know what I'm talking about, and you know the Member was right. I'm certainly going to support the amendment enthusiastically — not just the exact wording of the amendment, which regretted the fact that His Honour hadn't mentioned egg marketing, agricultural products, and those sorts of things. I would think, Mr. Speaker, though he may not have said so in so many words, that His Honour was pretty unhappy as well at the embarrassment he must have felt because his first Minister had been found, in a court of law in British Columbia, to have said things and done things….

MR. SPEAKER: Order, please. I don't think that the Hon. Member is staying within the amendment when he says what he's saying. Indeed, I think that what he's saying does do precisely what was restrained this afternoon.

MR. McGEER: Mr. Speaker, as I said, I'm trying to be restrained myself. I thought the Liberal leader acted with unusual decorum and restraint in dealing with this delicate subject. I'm only speculating on His Honour's true feelings, because it's got to be a labour of love to get through a Speech from the Throne of the calibre of this one. There must have been regrets. We're only anticipating those by suggesting this amendment and perhaps reading a little bit between the lines.

But I think that a judicial inquiry into the conduct of the Premier and the Minister of Agriculture would be just as timely and as appropriate as one into the conduct of the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams). And if these Ministers, Mr. Speaker, given a chance to clear their names, were able to do so, nobody would be more prepared to offer them congratulation and apology if we've wronged them than the Members of the Liberal benches.

that they have been indiscreet, then, of course, for the honour of parliament we would have to demand their resignation. So we look forward to these inquiries, Mr. Speaker — I can tell you I am looking forward to them — and we expect that after their conclusion this Legislature will be a better place.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, it's a real thrill to stand up in prime time (laughter) and have to compete with "All in the Family." I should make it very plain I'm the designated speaker, too. (Laughter.)

I would like to say it is a pleasure to take part in the throne speech debate….

MR. WALLACE: I am standing up. (Laughter.) I notice Roy's back at his best. (Laughter.) I thought probably the break might have done him some good, Mr. Speaker, but….

MR. WALLACE: Things are usually so peaceful at this time of night, Mr. Speaker, but the whole audience seems to be very keen to participate.

I would like at the outset to add my tribute to E. Ned DeBeck. His example is one which I hope we can all emulate in this House since it exemplified dignity and service of a high order. Indeed, Mr. DeBeck brought something to this chamber which one could almost describe as serenity.

I didn't ever have the opportunity to meet Senator Laing, but I recognize the tremendous service which he contributed to this country, and our party takes cognizance and pays tribute to Senator Laing also.

We also want to recognize International Women's Year, which is a concept our party completely supports. For the Conservatives, Mr. Speaker, in the United Kingdom, the year has got off to a great start with the new leadership of the Conservative Party under Margaret Thatcher. I think this is symbolic of the fact that the Conservative Party in the United Kingdom, like the party in British Columbia, is very progressive.

By comparison, Mr. Speaker, Harold Wilson, who, in case you don't know it, is the leader of the Labour Party, has been described beside Margaret Thatcher as having all the popular appeal of a faded, well-worn bedroom slipper. Who knows but what we may have a mantle of leadership conferred upon a very fine lady in the Conservative Party of Canada; and with a name like Flora Macdonald, I have to think that that has a lot to offer.

MR. WALLACE: Mr. Speaker, this tremendous interest by the audience tonight really….

MR. WALLACE: Well, when I need your help, Mr. Member for Columbia River, I'm really in trouble. (Laughter.)

MR. WALLACE: Oh, there's the "chirp, chirp, chirp" from North Okanagan. (Laughter.)

MR. WALLACE: And how anyone could be so impatient at 9:30 tonight when we really weren't planning to have a night sitting at all I don't know, but I was just getting to the point of being fair to the NDP…

MR. WALLACE: …on the subject of women's rights and International Women's Year. I want to recognize the tremendous efforts of the Hon. lady Member for Vancouver-Burrard (Ms. Brown) because she also, like Margaret Thatcher, has expressed a

Certainly, Mr. Speaker, the jaded and decimated group of federal NDPers could certainly do nothing but gain from the energy and the intensity of purpose which the lady from Burrard brings to her political role.

MR. WALLACE: Furthermore, Mr. Speaker, her move to the federal scene would certainly delete one of the front runners from the provincial cabinet sweepstakes. (Laughter.) It seems that International Women's Year is assured of success.

I was also interested in another position that's been decided recently — that was in the shadow cabinet of the official opposition where one of the Members was designated Minister of Transportation shadow. I thought that seemed most appropriate for a political tourist. (Laughter.) Sometimes it crosses my mind that that Member might indeed be looking around at the situation and wondering if a tourist should have taken a one-way ticket or probably arranged for a round trip. (Laughter.)

I think, Mr. Speaker, however, that this is a serious session and that the people of the Province of British Columbia expect us to take a positive and constructive approach to this session of the Legislature.

The year, in our opinion, and although the Premier is yawning and I can't blame him for that….

MR. WALLACE: I think the year is unlikely to be an election year, and is certainly a time when this province and the people are hoping that we can avoid extremes in either legislation or debate. One of the Members interjects that that is a faint hope. But I seriously feel that after two and a half years of the socialist government, the people of this province are looking for something a little less extravagant, less experimental and less socialistic in dealing with the priorities of the province.

We feel that the government has already moved to the left too far and too fast and too much and too fully. But on the other hand, we are not here to indulge in mindless attacks on any and every programme brought forward by this government just because it happens to emanate from a socialist administration with which we differ in philosophy.

We feel that the province has nothing to gain from the bitter outbursts of bitter claptrap that British Columbia is on the brink of depression, or that we are all facing ruin.

We believe that the management of this province could be vastly improved and that many basically sound ideas could be better implemented. But we also feel that all British Columbians will be the losers in any negative, opportunistic attempt to so undermine public confidence in our economy that Big Daddy politics can be reintroduced by the back door into British Columbia.

We feel that if the Leader of the Opposition (Mr. Bennett) genuinely wishes to build a new Social Credit, we, the people of the Conservative Party in British Columbia, feel that the Leader of the Opposition should stop depending on the same old gang.

There are problems in our province, Mr. Speaker, but there is also an immense physical potential and human capacity by which we feel that the problems can be overcome and that we can convert them into productive, fulfilling opportunities for the people of the province.

We believe that there are some serious tensions in British Columbia, largely fostered by somewhat extreme positions taken both by the government and by the official opposition. But there is also a sense of community purpose in British Columbia, a basic sense of decency and the spirit of goodwill among the citizens, and there is the capability to provide a framework of well-being, stability and equity for all.

I have travelled fairly extensively in the province since July of last year and I would have to say that it is most impressive that wherever one goes in British Columbia today, and in recent months, if there is one issue which concerns the people of the province it is inflation. And since the government unfortunately is contributing considerably to inflation by its spending habits, one would have to take that as the primary point that this party should make in this debate. The government has attained the reputation for reckless spending, for a lack of supervision of its own spending and the impression that it has its finger in too many pies.

I've never in this House stood up and made accusations of any kind that I can't back up, and I do feel that the memo from the Treasury Board, dated December 20, 1974, very clearly backs up that very fundamental criticism which many people in this province have of the present government. I won't read the Treasury memo, Mr. Speaker, but there was a subsequent memo sent, as far as I can determine from this copy from the parks and recreation department, to all staff, and it reads as follows:

"The following is a memo received from our Deputy Minister regarding resolutions passed by the Treasury Board. Please ensure that all your supervisory staff are aware of the contents:

"The Treasury Board directive of December 20 reflects a somewhat tighter economy and consequent closer surveillance of our expenditures. This will come as a surprise to some of our newer employees not formerly exposed to the cyclical nature of Treasury Board restraint on spending.

"A good many people now on our staff came in at the top of the cycle" — which I think is rather a delightful phrase — "and tend to regard this more affluent period as the norm, rather than an abnormal situation. This attitude is reflected in frequent requests for travel to various events, sometimes of dubious benefit to the department, requests for expensive equipment, when less exotic equipment will do just as well, and a generally relaxed attitude toward expenditure of public funds — a relaxed attitude towards the expenditure of your money and mine.

"It is clear from this latest directive and other trends that these days are over, for a period at least, and a far more stringent attitude will be taken by Treasury Board towards overruns of budgets.

"In view of the above, it is absolutely essential you advise your supervisors that they must stay within budget allocations. Overruns will be looked upon as serious mismanagement."

Mr. Speaker, I won't quote any more because I think that these phrases that I've emphasized make the point. It is very interesting that the Premier, all through my quote, has been agreeing completely with the points made. He said "Right on!" about three times.

MR. WALLACE: And the gentleman from Shuswap says this is responsible government. My question is very simple. Why did it take two and a half years to become responsible in the handling of taxpayers' money? It's all very well to say that this is now a responsible government, but even in this memo….

MR. WALLACE: Well, you didn't expect me to stand and pay you compliments all evening, did you, Mr. Minister?

MR. WALLACE: Part of this memo, Mr. Speaker, says that these days are over for a period, at least. In other words, as soon as the government of today has sufficiently calmed the anxiety of the taxpayers that they've recognized the errors of their ways, then they can go back again at a later date to the extravagant spending of the taxpayers' money.

Mr. Speaker, there is a big problem with inflation. There are difficulties in a number of our economic sectors, particularly in mining and forestry, and of course there are continuing needs that are unmet, especially in housing. But we believe that this assembly in this session has all the power it needs by means of legislation to deal with each of these problems and to bring the kind of benefits to all of our citizens.

Increasingly the government is, indeed, faced with cost overruns in a number of key departments, and we believe that this reflects uneven Ministerial performance which runs the gamut from good to the inadequate and irresponsible.

We believe that in Health and Labour and Agriculture we have Ministers with an objective sense of public responsibility regarding their roles and who have the willingness and the capacity to perform. There are departments, however, which are disaster areas, and we would have to pick out Human Resources and Education as being two departments which would quite likely make this government go broke if costs and programmes are not more adequately supervised and controlled.

In education we admit that the problems are complex, but after two and a half years we have to say, with some regret, that there is still no clear policy on educational values or standards. We had a White Paper which did little other than spell out the problems without giving any kind of direction as to how the solutions should be found. Those of us, in the course of the last several months, have come to the conclusion that the lack of direction in the Department of Education and the confusion which obviously existed there have become more and more obvious, first with the episode which occurred last year when the director of research, Mr. Bremer, was dismissed, and subsequently a similar episode on the part of one of his successors.

But there are those of us on this side of the House who would like to take part in finding the answers to the educational dilemma in this province. We think it nothing less than shocking that highly skilled professors have to spend their time with first year

university students trying to teach them to write English, and we don't feel that all these desirable, but otherwise less important, issues of creative writing, for example, should be given the priority they are apparently being given when the students in university can't even write plain and simple English. We raised this issue of functional literacy at the last session of the Legislature, and we feel with great regret that the situation today is no more improved that it was when we met here last spring.

In Human Resources the problems, we feel, Mr. Speaker, are those of impulsive enthusiasm coupled with bureaucratic expansion and a fair measure of mismanagement, After two and a half years there is a basic degree of measurable relief for those who really need it, but there is also an array of grants, aids and handouts to those who do not need it.

There has been a proliferation of agencies and boards with intrusion into jurisdictions and areas in which this government has no mandate. There is a depressing lack of incentives for those who are able to get off welfare and go to work, and an even greater lack of recognition and appreciation of those who are already in steady employment.

We believe, Mr. Speaker, that what is so seriously required is a commitment to individual dignity and a decent basis of life and quality of living for those who are truly in need; a commitment to give income support for those unable to support themselves on a basis fully adequate to cover the basic essentials with a little extra. This basis of decency and dignity is a commitment that the vast majority of productive taxpayer citizens of the province would readily accept. But they certainly don't want to see this commitment abused, and they don't want the system administered in any capricious fashion, nor do they want to be discriminated against simply because thy prefer to work.

We feel that it is time to direct the Minister (Hon. Mr. Levi) concerned back to this one fundamental commitment. The rest is up to the legitimate personal goals and values of the individual people of British Columbia themselves.

As for Housing, we feel there is a serious lack of any effective programme because there is no comprehensive co-ordinated policy. The province needs housing and in this session we will have to start all over again constructing a co-ordinated and comprehensive policy designed to meet the very serious need in the total housing field, both privately owned residences and rental accommodation. I would like to offer some suggestions from this side of the House, Mr. Speaker, towards an effective housing policy, which I would hope the government would not reject solely on ideological grounds.

We feel that the land freeze should commence to be phased out because of the urgent need for ample, low-cost, serviced land. The comprehensive land freeze was initially necessary to prevent the further destruction of agricultural and recreational land.

Had the blacktop-paving, tree-chopping, ill-planned housing development encouraged by Social Credit laxity not been stopped, Abbotsford, Saanich, Mission, Winfield and many other municipalities near major centres would now be gobbling up agricultural land at a rapid rate. But the land freeze has done its work and one of the points one uncovers in travels….

MR. WALLACE: Isn't it the First Member for Victoria (Mr. Morrison) who drives the Cadillac, the Member for the Social Credit Party?

MR. WALLACE: But as one travels around the province, it is quite obvious that the well-intentioned effect of Bill 42 has resulted in many areas of marginal agricultural land being retained in the land reserve when, in the total picture, that land could be of much greater value to our society if it were available for housing.

The need is for proper land-use planning and regulation with substantial delegation to regional districts and municipalities. The creation of an adequate land supply is certainly a top priority and we believe there should be a major contribution of land from the provincial Crown in several areas, as well as a continuous financing programme to increase substantially the reserve bank of serviced land. We feel the government's emphasis on leased land and cooperatives is an incomplete and narrow approach to solve what is a much wider, larger and complex problem, The government appears to have ignored the financial plight of the municipalities. We feel this government, like the former Social Credit government, has downgraded local government and school boards through stronger, centralized provincial control. This has certainly occurred in the housing field where government has shown substantial reluctance to deal with the private sector and with local governments.

I can only quote the kind of example in Saanich where, on Roy Road, the assembly had reached the point where construction was almost ready to go when this government was elected. The whole plan has been worked over on several occasions by the provincial department, and the project is still not underway. There have been hearings and further review of the Roy Road project, but it seems to us

that there is a lack of adequate consultation with local governments and respect for regional and municipal plans which may or may not fit in with government planning.

We feel that consultation with local governments is very often after the event, when local opinions and wishes can have minimal effect in altering the outcome. We feel that the ultimate insult lies in the amendment which we debated in the House in the fall session to the Laws Declaratory Act, in which the government sets itself above its own land-use legislation by stating…

MR. WALLACE: I'll get to you, Mr. Member for Delta (Mr. Liden), in just a moment.

…that any enactment regarding land use and improvements does not bind the Crown.

I'm going to ask the Member for Delta if he thinks that that can be justified because it was always that way. I don't know. But let me remind the House, Mr. Speaker, that the people of this province elected this government to do a better job than the Socreds. They did not elect this government to go on making the same arrogant mistakes that were being made for 20 years.

For the Members of this government and for the Member for Delta and for the Provincial Secretary (Hon. Mr. Hall), who spoke in the debate in the fall, to say, "Well, we're simply doing what's been done for the last 20 years," is a pathetic way to justify a government which is said to respect the individual, and to respect rights and freedoms, and to say that one of its main philosophies is to preserve agricultural land and to look upon land use as a vital responsibility of all governments in an enlarging population. That is true, and we agree with that. But for the government then to turn around and amend legislation which, in effect, puts the government above its own legislation I think is disastrous and hypocritical.

MR. WALLACE: If the Premier will look at the record, he will find that we supported the principle of Bill 42 and said so in the debates in this House.

MR. WALLACE: We voted against Bill 42 for the simple reason that it contravenes some of the very rights and freedoms that I talked about a moment ago.

MR. WALLACE: it ignored the regional and municipal governments until it was amended to the degree that it was hardly recognizable as the same bill.

HON. MR. BARRETT: You're not nearly as good as the Liberals at standing on both sides of an issue and running down the middle.

MR. WALLACE: There's one thing I know about this people's government, as far as land use is concerned: there's one rule for the people and one rule for the government.

DEPUTY SPEAKER: I would remind the Hon. Members that the hon. leader of the Conservative Party has the floor.

MR. WALLACE: I thought maybe we should recess for five minutes to let the gentlemen on either side of the House have their little conversations.

I would like, Mr. Speaker, to say a few words about the plight of the municipalities. When the Premier came forward with his initial proposal about the increased income to be derived from natural gas, it seems to me a figure of $180 million was mentioned. This was to be split three ways, as I recall: $60 million for the federal revenues, $60 million for the provincial revenues and $60 million for the municipalities.

It seems to me that by that proposal the Premier certainly recognized that it would be at least just and fair and desirable to provide something on the order of $60 million to the municipalities, whether or not that money might be derived from the revenue of natural gas. We wonder, after the Premier's less than triumphant joust with Messrs. Macdonald and Turner, whether, in fact, we can look forward to Friday's budget speech and find that that $60 million will still be made available to the municipalities.

MR. WALLACE: These Macdonalds are all over the place — there's Donald, Alex, Flora, and goodness knows how many more.

We do feel that the municipalities — as, for example, right here in the capital region where we have a strike at present with a wage dispute centering

around 16 to 20 per cent — that the municipalities, with a limited tax base, certainly have to be given help in one form or another, They have to have some altered legislation to give them a greater taxing capacity, other than simply property tax, which would be one route. And frankly, this is the route which we believe offers a great deal of flexibility and potential for greater harmony between the municipal and provincial levels. Or the municipalities simply have to be given greater per capita grants from this province at this time.

As I say, we look forward to Friday's budget because we believe that the Premier as Minister of Finance has acknowledged through his earlier statement that something of the order of $60 million of addition to the municipalities would not be out of line.

We believe that the government must work as hastily as possible towards the removal of rent controls, since they inhibit the creation of much-needed rental accommodation. As a temporary measure, rent controls may have some merit, but as a long-term measure we believe they're nothing short of disaster. The rent controls were an attempt to protect low-income families and prevent gouging, but they are becoming counter-productive and inevitably will make the situation worse.

We also feel that they should be replaced by a rentalsman operating under reasonable guidelines, where rent review, the word "review," really means what it says. We favour financing and mortgage rate incentives combined with a programme of provincial mortgage insurance and guarantees, and, if necessary, some form of profit limitation.

We believe that sales tax on building materials for housing must be repealed, and a portable lease-to-purchase programme should be set up in which any tenant at any income level can freely participate. What we are proposing, in effect, is that housing be put on a public utility basis with government as the catalyst and regulator, with the private sector playing its full part.

The intervention of the government into the private sector by such measures, which we believe just to be token measures, as acquiring Dunhill and possibly the Yorkshire Trust, is bound to fail in achieving the grandiose objectives presented to the people by the government.

Dunhill is much too small to start with and Yorkshire can only make picayune attempts at lowering mortgage rates, and neither is a substitute for creative legislation.

We believe that the government must regulate and set guidelines, but government alone cannot produce results. What will make money available for housing and what will lower mortgage rates is a larger total pool of money available, channeled by a broader range of solidly based financial institutions in British Columbia.

I know the Premier, Mr. Speaker, is very interested in financial institutions in British Columbia. We feel that the institutions which could channel the funds into housing should be trust companies, near banks, investment trust cooperatives or credit unions. They can draw from government, corporate and union pension funds, from company treasuries, banks and individual citizen investors.

We believe that charters can be so legislated that the public will be fully protected at all times. And we believe that it is absolutely fundamental that the housing problems can only be solved by creating a greater pool of financing than is presently available.

This government often seems to take a perverse pride in the claim frequently made against it that it has succeeded in driving money out of British Columbia. Even a socialist government should see the sense of succeeding in getting more money available for housing in British Columbia. We don't think that it's just enough to criticize the federal government, as the Minister of Housing (Hon. Mr. Nicolson) has done. The former government in this province failed miserably to match the federal dollars which were often left on the table after federal-provincial conferences — the Premier nods. I can well remember in this House that statement being made, when this government was the official opposition, that on many occasions if the provincial government, under the Socred administration, had been willing to match the dollars available at the federal level, there would have been at least some more money available for housing. And I hope that this government will certainly not leave federal dollars on the table and will show some of the initiatives which have been mentioned.

In the area of social policy, while I have recognized the excellent performance by the Minister of Health (Mr. Cocke), I do find it incredible that after two and a half years there is one particular area where this government and this Minister have failed miserably to meet what was a priority commitment in not only the '72 election campaign, but in preceding campaigns. I'm talking about the lack of intermediate-care coverage and intermediate-care facilities.

On the night of August 30, 1972, this government was elected to undertake certain reforms. Reform in 1972 had a precise meaning, and the mandate which this government was given was very clear. Reform meant that from now on social development was to have the same priority as economic development, and that in provincial policies, social development and economic development were to proceed in a rational manner together.

In this area of intermediate care, it is clear from the Premier's statements and from financial statements that the money is available, Mr. Speaker, to provide fair and just services and facilities to all

senior citizens in need of nursing care. We have to criticize this government for a distorted sense of priorities. When we talk about the mandate being given to correlate social development on an equal basis with economic development, we have to make our position very plain about the dollars spent in various other directions in the economic field and the acquisition of companies in the private sector and government dollars used to purchase Westcoast Transmission and Panco Poultry and so on. We believe that while that has a purpose, the priority now must be given to meeting that commitment, which was such a major part of the election platform, to provide coverage and facilities to the senior citizens who require nursing home care or some similar level of care.

It is strange to me that this government, which presented itself very much as the party of the people, when it came down to it didn't really have the faintest idea in any consistent way of what it wanted to achieve. It proceeded to move hastily in a variety of directions without any comprehensive co-ordination of these efforts.

I feel we should speak frankly on this point, particularly since there are many areas of social reform by this government which I have supported from this side of the House, In the field of social development, it is quite clear that in region after region this government inherited a situation that was 5, 10 or 15 years behind the times. But I would say to this government now that, in addition to the shortcomings in your economic policies, you also have an Achilles heel in the field of social policy. The best example of that big gap and that serious shortcoming must be in the realm of intermediate care.

I mentioned earlier that the people of this province are very concerned about how the money is being spent. What the cost overruns mean for the budget we'll know soon enough. We're really talking about two budgets: the revenues and expenditures for fiscal 1974-75 and the balance, or lack of balance, for the fiscal year 1975-76. Mr. Speaker, we do not feel that the people can be unduly comforted by anything the Minister of Finance may say about a surplus or, for that matter, be overly alarmed by what the Leader of the Opposition (Mr. Bennett) claims and predicts. But we do know that $157 million has been spent by government warrants since the budget was presented.

We believe, after sober consideration, that the present fiscal year will be in balance and there will be a surplus. The anticipated revenue from stumpage and mineral royalties will, of course, be down. That's a subject in itself which I'm sure will be debated this session. But we believe that the decrease will be more than offset by increased revenue from corporation tax, income tax, sales tax, liquor tax, gasoline tax and all the other taxes and charges.

MR. WALLACE: I'm coming to that, Mr. Premier. You're all so impatient tonight. It's already 10:10.

MR. WALLACE: We believe these other taxes that I was reciting when I was so rudely interrupted will in fact result in a surplus, never mind the extra revenue derived from the increase in natural gas prices. Had there been proper management and supervision of departmental expenditures, the Minister of Finance should have been…. And those who are skilled in English know what tense "should have been" is.

MR. WALLACE: The Minister of Finance should have been in a position to declare a surplus of $150 million for the present fiscal year, but not, as matters stand, for the next fiscal year. The increase in natural gas prices was supposed to cover the cost overruns of Human Resources, Education and aid to municipalities. If I might use the expression, Mr. Speaker, these "windfall profits" of $100 million a crack will not occur again, and there is no major source of incremental revenue in sight, barring tax increases in any form.

That made the Minister of Human Resources (Hon. Mr. Levi) look up and adjust his spectacles — when he said there might be tax increases. Mr. Speaker, should there be tax increases, this government would so lose any residual measure of public confidence that they would be lucky to come back as an opposition party with a dozen seats after the next election. This government was not given a mandate to waste money. What it was given was a mandate to redirect an increased portion of available money to those areas which had been neglected for 20 years, or in large measure ignored. The mandate to this government was to take that new direction and spend the available money productively and wisely.

MR. WALLACE: This and only this — without preconceived notions of some vague Utopia, without dangerous bias of ideological fervor and missionary zeal and, above all, without new power centres erected in place of those the voters themselves tore down. This and only this was the mandate which the government received on August 30, 1972. And in the term of office which remains to this government, that is the duty it must discharge, Mr. Speaker.

I know how keenly the Premier believes in Hansard and most of us who like to stick by our words do believe in Hansard. It is very interesting to look back in Hansard and read from the throne speech of January, 1973, when there is a very genuine exhortation to eliminate profligacy and waste. That's right — profligacy and waste. That word is a little difficult to get out at 10:10.

MR. WALLACE: His Honour was completely in tune with the thinking and philosophy and direction of the new government. What was meant to apply then, generally, Mr. Speaker, should surely now apply specifically to this government.

HON. MR. BARRETT: Budget day is Friday. You should save it, as you might want to alter it.

MR. WALLACE: Well, we'll be ready to alter it in the light of events, but I think it shows a little more insight and courage to put your money where your mouth is before the budget speech than to sit and wait and be the smart alec afterwards.

I can't seem to get the point across, Mr. Speaker, that this government's in trouble because it's wasting taxpayers' money. The sense of priorities with which this government spends the money is out of tune with many of the voters who put this government in power. That's not to knock Mincome or Pharmacare, which I agree entirely is a direction of social reform which I support, and the reason that many voters in this province in '72 voted for the NDP.

All we're trying to tell you…and you should be glad we're trying to help you this way because I don't think you folks over there have got the message. Your loss of support at the present time is related primarily to your mistaken interpretation of priorities in regard to government expenditures. It's that simple.

Anyway, as the Premier knows, he and I recognize the importance of being able to agree to disagree, and the function of an opposition isn't just to oppose, although facetiously I said a moment ago that it was. I think the importance of the opposition is to ensure for the voters in the province that those who have a views differing from the government in power can be ensured that these views are being aired in this Legislature. Whether or not the Premier, or anybody else over there, listens, I think the function of our democratic society is to ensure that these differing points of view are expressed.

HON. MR. BARRETT: I'll tell you, if there wasn't an NDP in B.C., I'd vote Tory.

MR. WALLACE: Well, I'd rather not comment on that. (Laughter.) But I would say this: what will never be forgiven this present government by the majority of moderate, fair-minded citizens of British Columbia, and that includes thousands of Conservatives who voted for the NDP — and we can smile and joke, but this, I honestly believe, is a fact, that many of these moderate, fair-minded citizens who really even have the gall to come to me and say that they call themselves Conservatives but they voted NDP because they felt that your programmes were reasonable, and in a number of ridings the NDP had the best chance to get the old gang out.

HON. MR. BARRETT: Right. Look what happened to Saanich and the Islands; they were buffaloed.

HON. MR. BARRETT: Now what are you going to tell those Conservatives in Saanich?

MR. WALLACE: We're going to tell them a lot. Mr. Speaker, the point I was trying to make before the….

DEPUTY SPEAKER: Order, please. Would the Hon. Member proceed with his speech, please?

MR. WALLACE: Mr. Speaker, despite that body of goodwill and support from many Conservatives, if his NDP proves to be so mild in its mismanagement, and so misguided in its dogma and ideology, that it allows the dark ages of Social Credit to be brought back into British Columbia, then the Premier and this government will have a great deal to answer for. It would, indeed, be sad for the people of this province if this government allowed the power-hungry Social Credit Party to take office by default.

Mr. Premier, through you, Mr. Speaker, if you will not move back from your present position, and if you will not show a more competent performance in the administration of this province, and the swing is reactive all the way back to the Social Credit right, it will be then, and not now, the people of British Columbia will pass a very bad judgment on David Barrett, the former Premier of British Columbia.

DEPUTY SPEAKER: Order, please. Would the Hon Member please proceed, and would the other Members please not interrupt?

DEPUTY SPEAKER: Order, please. Would the Hon. Members please be quiet and allow the Member to proceed with his speech?

DEPUTY SPEAKER: Order, please. Can we have quiet for the hon. leader of the Conservative…?

DEPUTY SPEAKER: Order, please! I would ask the Hon. Premier and the Leader of the Opposition (Mr. Bennett) to take their debate outside in the corridor, or shut up.

MR. WALLACE: Mr. Speaker, I feel that we should put forward some of the positive proposals which we believe would assist in the recovery from some of our economic problems and lead to the enrichment of the living conditions of many of the people of the province, because this province is not, in our belief, as the Leader of the Opposition has stated, in a condition of disaster or in pending blue ruin; nor has confidence in British Columbia and, even more important, the self-confidence of British Columbians been destroyed.

MR. WALLACE: And in a number of cases the change has been radical and ill-advised. But we believe that these can be revised.

MR. WALLACE: Yes, by any government that cares to look at the situation and recognize that like all humans and human organizations they make mistakes. There are enough politicians on both sides of this House to recognize that a government can only go as far as the people will allow. But the magnitude of the intervention of this government into the private sector must be rolled back immediately. In due course much of the government intervention will have to be undone.

I will recall for the Premier, Mr. Speaker, that this party in its measures to stabilize Canadian Cellulose and Ocean Falls supported the government policy, but we believe that a partnership arrangement involving both the private sector and the province for the Ocean Falls–Bella Coola region is a more desirable approach for a logical, phased development.

The original stated objectives of the province respecting Canadian Cellulose have been achieved, but now is the time to begin a much broader programme with a larger number of B.C. citizens as shareholders and the province retaining a minority interest. Had the acquisition of Plateau Mills and Kootenay Forest Products come to a vote in the Legislature, as they should have, we would have voted against these acquisitions, as well as similar acquisitions.

Government must be a catalyst where participation for effective action is required. We believe that government should provide stability or support where enterprises that are inherently economically worthwhile would otherwise fail, but where these tests do not apply we feel that government has no right or business to intervene.

We would commend the government for seeking a fairer share of the total revenues generated by the resource industries of the province, provided…

MR. WALLACE: …that total revenues are adequate and provided we have an agreed understanding on what share is fair. The Crown provincial is the owner of the resources on behalf of the citizens of British Columbia and, like any other owner who leases out the use of its property, it is entitled to its rent.

By the same analogy, in relation to the gross revenues and net income derived from the use of Crown resources, the rents should reflect fair, competitive market value. Any increase in existing royalties means at the same time, in our view, a

greater responsibility and obligation by government to ensure the economic health of those industries against which higher royalties are being levelled.

Any tenant paying a fair competitive rent is entitled to have the landlord maintain his property in good reasonable condition. If the Crown is landlord of the resource industries and it is to charge the fair competitive rent, then the government has the obligation to see to it that the viability of resource industries is maintained in good and reasonable condition. Over the past year this obligation by the government to ensure the viability of the resource industries has been seriously neglected, resulting in untold hardship for thousands of families where the breadwinner has been denied and deprived of his gainful employment.

We would like to know from the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams), if he is still awake — and I see from his grin that he is — why the decline in lumber prices and lumber demand was not anticipated or, if it was anticipated, why more rapid action was not taken. We also want to know why the B.C. Forest Service was so slow in dropping the level of stumpage once the decline had become apparent. We would like to know what advance monitoring system has been set up on both prices and volume demand, since these downturns have occurred before and, unless something is done to cushion their impact, will certainly occur again. We want to know what the government is doing to prepare for future cyclical declines in wood product markets so that the sawmill and plywood industry, logging contractors, and the loggers and woodworkers themselves, will not be left in such a vulnerable position.

We also feel that there is an urgent need for an equitable and simplified stumpage appraisal system, and the same concern applies with equal force to the Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick) as these questions relate to the mining industry. We would like to put forward some basic propositions.

In industries that are cyclical because of exposure to world markets, it is essential that the maximum amount of production and employment stability within British Columbia be achieved. We feel that you could use stumpage as a stabilizing device instead of allowing stumpage to bounce around from $30 a hundred cubic feet to the $1.10 minimum. The fair average royalty for saw logs and plywood logs over the life of a cycle is at present about $15. In the high price, high production years, our policy would certainly be to take more, but in the downturn years, such as the one we are now in, we would give some of this extra stumpage back from a stabilization fund to be established. In other words, we would consider a policy of negative stumpage.

Such a stabilization programme, we believe, would have been enough today to cut the present level of unemployment in the forest industry by about half. The amount to be paid out of the stabilization fund in the lean years would be relatively insignificant compared to the benefits of maintaining employment of people in the forest industry. These people, in turn, would be paying income tax, sales tax and other taxes, and the saving on expenditures in the form of unemployment insurance and welfare could be considerable.

Exactly the same principle applies to mineral royalties in which a fair, average royalty over the life of a market cycle should also be fixed with positive or incremental royalties charged or, accordingly, negative royalties being paid back in the lean years. After all, Mr. Speaker, no landlord receives a rent when the property is not being used.

There are some other measures, Mr. Speaker, we would like to suggest. One is to work out stockpiling arrangements with the forest and mining industries, including buying wood products in advance for the housing requirements of British Columbia. The second measure would be to offer working capital loan guarantees to independent, non-integrated producers with a claim against production in the event of default. Since the U.S. market, which buys 70 per cent of our lumber, is cyclically unreliable, a third measure must be made to start working out stable, longer-term marketing arrangements with Japan, Western Europe and other off-shore markets. And, of course, a fourth measure — which I notice, strangely enough, even the opposition ignored the NDP request for this in years gone by — a fourth measure would be to encourage B.C. resource industries to specialize to a greater extent in higher-value products, for the right specialization within a world market is one of the best safety cushions of all.

These types of programmes, we feel, will have to be worked out cooperatively between government and industry with consultation with the labour unions involved. Planning for these programmes, we would like to think, is already underway by this government.

There are certainly two basic principles which we believe we must state very clearly in this debate and at this time.

The first is very simple. Unlike the salad days of Social Credit, no government of this province is ever again going to be allowed to say: "Here are our resources, boys. Come on in and take 'em all." There may have been times early on when Bennett the elder had to give the kitchen sink away. But his son must be even more inept and more ill-informed than he appears to be if he believes the electorate will allow B.C. resources again to become the prize for any big corporate election support.

MR. WALLACE: I would like to repeat that in case Hansard missed it: "…if he believes the electorate will allow B.C. resources again to become the prize for any big corporate election support." There must be provincial control over provincial resources, and there must be a fair provincial rent.

MR. WALLACE: The second principle is equally simple. It is that the resource industries of British Columbia, those which are here and those which can be developed, are entitled to a fair rate of return on capital investment, with due consideration for risk involved.

MR. WALLACE: To develop these thoughts, we can ask the question: what is a reasonable definition of capital employment during the current period of double-digit inflation?

The Premier suggests that I should not be making some of these comments until I see the budget. But during the budget debate we will be making proposals for a shift to an inflation-accounting basis for all companies under B.C. law. This shift would show that most resource-based public companies in the province are overstating their net income and grossly understating their balance sheet assets in current inflated-dollar terms.

It might also be an appropriate time to give notice that we will introduce a private Member's bill entitled Natural Resources Financial Disclosure Act. It would require all public and private companies operating on Crown provincial resources with annual revenue in excess of $5 million to file properly audited income and balance sheet statements with the registrar of companies. Such statements would be available for public inspection. Privately owned companies thus obliged to report would include the B.C. subsidiaries of all oil companies, a number of B.C. subsidiaries of major mining companies and, in the forest industry, such companies as Canadian Forest Products, Eurocan, Intercontinental, Northwood, Prince George Pulp and Paper and Weyerhaeuser.

The principle involved is quite simple. We do not believe that any company should operate in this province and be invited to lay out capital expenditures in this province unless there is a reasonable assurance for an adequate rate of return to provide for dividends and for the necessary cash flow to improve productivity.

What this fair, average rate of return should be and how it should be applied are matters which we would like to develop from this side of the House during the debate on estimates.

MR. WALLACE: No, I'm asking both sides in the contract to understand what is mutually agreed to be a fair rate of return.

We shall also be proposing that each contractual agreement respecting resource tenures be made available to this House. This is the practice in certain other countries, such as Western Australia. It seems to us to be a sound principle.

We agree with the statement which has been made by this government that British Columbia should not be a place for uncontrolled or excessively profitable investment. British Columbia should be a place for solid, secure, long-term investment. Certain measures could implement this principle and establish a greater degree of economic stability.

We believe in the application of positive incremental and negative royalties. We believe in a policy of making unallocated resources available at a steady, controlled rate. We believe in the judicious application of regional development incentives which reflect higher startup or operating costs. We believe in the proper application of fair, equitable regulations.

The present economic situation in which we find ourselves makes it very plain that, being a seller in a global market, we cannot control world prices for base metals or forest products. British Columbia certainly cannot regulate U.S. government policies affecting housing starts, and it certainly cannot tell the economies of Japan, the United States, western Europe or eastern Canada to get off the pot and grow.

We believe that in the year ahead the economies of our trading partners will start to recover, but before this happens the housing industry in the United States will start to recover. Along with this recovery, sawmills in British Columbia will reopen, second or third shifts will be added and forest industry employment will rise again.

We'd like to ask the question. Just because we have struggled through this present economic trough we cannot afford to pretend that it will not or may not happen again, and the obligation by this government is to demonstrate that it has long-term planning to ensure stability of employment in our resource industries, which in our view has been sadly neglected in the past year.

We believe that rational economic development for all productive sectors in British Columbia can only lie in a sound policy, which represents a long-range,

integrated economic and social development strategy. We feel that it is incredible that after two and a half years the government is still making stupid, insensitive, uncoordinated mistakes similar to those made by the Social Credit regime.

So often voters are asking the difference between the government and the opposition, and the differentiating features between the opposition parties. Certainly the difference between us and the government is that the business of the private sector is to provide productive capital and the business of the public sector is to provide, where required, social and infrastructure capital.

The job of the public sector is to establish an equitable and stable framework for economic activity and development in which those matters of concern to the public interest are regulated and controlled, and the job of the private sector is to operate within that framework and abide by the regulations and controls. The duty of the private sector is to pay its fair share; the duty of the public sector is to make sure at all times that the private sector can pay its fair share. And these are not ideological issues; they are practical matters which intimately affect the economy of this province, because the province has tremendous potential, and I think both sides of the House have agreed on that.

There is great scope for development in many of the sectors of our economy, and we believe in our party that we can be selective. We do not necessarily need a six-million-tons-a-year basic steel mill producing semi-processed ingots for Japan, and we do not necessarily need a gigantic refinery and petrochemical complex in the lower mainland, particularly when it is against the stated wishes of the community concerned, as in the case of Surrey.

We can pursue a strategy of higher-value resource development or regional manufacturing development or transportation and trade development or financial and commercial-social development or any combination of these. But we cannot absorb them all, certainly, in the immediate future, and we take the position that it may not be necessary that we even attempt to do so. But the basic development route we would wish to follow is the one which pays the highest wages, confers the greatest revenues to the province, permits the highest social benefits, affords competition and a choice of work and which can be environmentally controlled.

I think, Mr. Speaker, that in this session we can find and implement some of the strategy, and I would hope that some of the points that we are making tonight will be part and parcel of the policy outlined by the Minister of Economic Development (Hon. Mr. Lauk) when we are debating estimates in this department.

Inflation, as I mentioned at the outset, certainly has to be the primary concern of every citizen in Canada today, and it certainly is not the sole responsibility of Ottawa. But on the other hand, we cannot blame it on some vague international malaise, as the federal Liberals would try and have us believe.

It is the responsibility of government, which is the initial cause of inflation and the chief beneficiary from inflation, to protect the wages and salaries of all workers at all times from inflation. Organized labour can bargain for cost-of-living adjustments, and this is their right. In fact, Mr. Speaker, the single and most important reason today for legal and illegal strikes, walkouts and other disputes is the attempt by unions to catch up with what has been lost in purchasing power due to inflation.

Most other employees who are not organized do not have adequate means to obtain protection against these increases in the cost of living. In either case, individual citizens on wages or salaries usually get their cost-of-living adjustment, if any, last after prices and payroll deductions have already been increased. If the worker is entitled to protection from inflation, so too are those on fixed incomes, for society owes a debt to the aged and retired, which at the present time no employee pension plan can guarantee.

We will introduce an Act entitled Maintenance of Incomes Act which will outline our proposal by which we would require cost-of-living adjustments to all wages and salaries in British Columbia to apply where provincial jurisdiction or control exists. We recognize that this Act would still leave approximately 10 per cent of the labour force and their families unprotected from inflation, since their collective agreements fall within federal jurisdiction, but if John Turner and his friends don't like it, then maybe they can start by controlling the overspending and wasting of so much of the taxpayers' money at the federal level.

We believe that this kind of maintenance of income Act would, in fact, result in greatly reduced numbers of industrial disputes and strikes, because it would act as a preventive measure in removing the cause of so many strikes, which is the legitimate desire of workers to try and catch up with the loss of purchasing power in their income.

We also intend to introduce a bill, Mr. Speaker, which will enable every citizen in this province to build security for his or her retirement through portable, inflation-proof pension plans.

We also believe that we must formulate a policy which will incorporate an essential services Act, which we would define as limited strictly to public safety, human protection, emergency-, acute- and chronic-health care and some aspects of public utilities. We realize that such an Act would be a gross injustice if it deprived by law any worker of the right to strike unless these workers are adequately protected by the Maintenance of Incomes Act and an inflation-proof pension plan.

Mr. Speaker, the longer I take part in the political process in British Columbia, the more I think of two phrases: "deja vu…"

MR. WALLACE: …which, of course, means "seen already"; and the second is "plus ca change, plus chest la meme chose " meaning that the more things change, the more they stay the same. I'm sorry if I said it with a Scottish accent.

MR. WALLACE: As I mentioned earlier, this government is trying to justify its land-use policies on Crown land by stating it is only repeating what the Socreds did for 20 years. We have this government reintroducing the B.C. News, which it criticized so severely when it was published by the Socred government.

On the other side of the coin, Mr. Speaker, I witnessed a TV programme the other night putting forward the Social Credit position and, for the very life of me, it sounded very much like the speeches I used to hear from the former Leader of the Opposition. He spoke strongly of the need for secondary industries and for the processing of primary ores — a sound proposal which was completely ignored by the government of that day.

The current leader of the official opposition (Mr. Bennett) also spoke of the need for political parties to stay away from financing by large companies and to be financed by the membership. He implied that this party's Jonathan Livingschmaltz multi-coloured brochure and other literature was being financed by 40,000 members at $10 a crack. Now, Mr. Speaker, it seems to me that not so long ago they were selling $5 memberships for four years. In other words, what you pay is what you get: cheap membership in a cheap party.

MR. WALLACE: But the people of British Columbia, I think, have been around the Social Credit race track too often to gamble their future one more time on the funny-money gang and to fall for the blandishments of a dynasty whose primary goal is the acquisition of raw political power, not the service of the people in this province.

MR. WALLACE: And if such a claim seems rather strong in the ears of some of the listeners tonight, let me mention another vital issue which the present Leader of the Opposition in his interview said his party would consider: namely the system of having a preferable ballot, an alternative form of balloting on which the voter expresses his order of preference for all candidates on the ballot.

MR. WALLACE: Citizens of British Columbia, Mr. Speaker, will recall that the Social Credit leader of 1952 (Hon. Mr. Bennett) acquired the position of Premier through the provisions of the preferred-ballot system. He no sooner gained political power through such a vehicle than he abolished the system in order to perpetuate that party in power. The voters of British Columbia today will likely conclude that the professed support of the preferable ballot by the current leader is but another ploy.

MR. WALLACE: Well, I must admit that I had difficulty getting the script from CHEK television, who said I could only get it from Mr. Bennett. If I had been allowed to obtain the script, maybe I could have got things absolutely and totally accurate. But I wasn't aware, Mr. Speaker, that CHEK-TV or any other television station had the right to refuse a member of the public a script of a programme which had been peddled to the public only 24 hours before. But if the leader is a little concerned that I haven't got everything absolutely tickety-boo, perhaps he would be kind enough to let me have a copy of the script of that programme. Then I can get every syllable right.

MR. WALLACE: I think the phrase he used was "an alternative form of balloting." But we all know what we are talking about. Let's not get all mixed up in semantics.

Mr. Speaker, it does make one feel that one has seen it all before and heard it all before. I would like to ask the leader of the Social Credit Party (Mr. Bennett) where he was these last 20 years.

MR. WALLACE: And in the crunch, the voters of British Columbia are going to have to choose between that approach and the approach of other parties who offer, indeed, a more open and participatory

approach to the functioning of their parties. In a democracy the people choose freely and without coercion. I am confident that every single B.C. voter is looking very carefully and very knowingly at the B.C. political scene today.

It seems to us, Mr. Speaker, that in the age of Mincome and mini-skirts and mini-cars and Minnie Mouse, the official opposition has a leader who can best be described as Mini-WAC. (Laughter.)

Mr. Speaker, there are just a few more points that I would like to touch upon. The hour being as it is, I would move adjournment of this debate until the next sitting of the House.

Jordan Phillips Richter	Smith Chabot McClelland	Bennett Fraser Curtis
Morrison	Schroeder	McGeer
Anderson, D.A.	Gardom	Gibson
	Wallace

Hall	Macdonald	Barrett
Dailly	Nimsick	Stupich
Hartley	Brown	Sanford
Cummings	Dent	Levi
Lorimer	Williams, R.A.	Cocke
King	Young	Lauk
Nicolson	Skelly	Gabelmann
Lockstead	Gorst	Rolston
Anderson, G.H.	Barnes	Steves
Kelly	Webster	Lewis
	Liden