CONTENTS

Privilege

Alteration of letter. Mr. McClelland — 665

Speaker's ruling

Broadcast not a breach of privilege — 665

Routine proceedings

Oral Questions

Correctional centres overflow. Mr. Bennett — 665

Gifts to Ministers. Mr. Gibson — 666

Seattle-Victoria ferry service. Mr. Wallace — 666

Fraudulent welfare applications. Hon. Mr. Levi answers — 667

Juveniles raised to adult court. Mr. Wallace — 668

Selection of juvenile centre house parents. Mrs. Jordan — 668

Lowered property tax. Mr. Curtis — 668

Minister's answers requested. Mr. Gibson — 668

Co-educational correctional facilities. Mr. McClelland — 668

Facilities for drug addicts. Mr. McClelland — 668

Committee of Supply: Premier's estimates

On vote 2.

Mr. Bennett — 669

Hon. Mr. Barrett — 671

Mr. Bennett — 674

Hon. Mr. Barrett — 676

Mr. McGeer — 677

Hon. Mr. Barrett — 679

Mr. McGeer — 681

Hon. Mr. Barrett — 681

Mr. McGeer — 681

Hon. Mr. Barrett — 682

Mr. Bennett — 682

Hon. Mr. Barrett — 684

Mr. Bennett — 685

Hon. Mr. Barrett — 685

Mr. Bennett — 686

Hon. Mr. Barrett — 686

Mr. Bennett — 686

Hon. Mr. Barrett — 687

Mr. Gibson — 687

Hon. Mr. Barrett — 687

Mr. Gibson — 687

Hon. Mr. Barrett — 688

Mr. Wallace — 688

Hon. Mr. Barrett — 690

Mr. Phillips — 693

Hon. Mr. Barrett — 694

Mr. Phillips — 694

Hon. Mr. Barrett — 696

Mr. Phillips — 696

Mr. D.A. Anderson — 698

Hon. Mr. Barrett — 699

Mr. D.A. Anderson — 700

Hon. Mr. Barrett — 700

Mr. D.A. Anderson — 700

Mr. Curtis — 701

Hon. Mr. Barrett — 702

Mr. Curtis — 704

Hon. Mr. Barrett — 704

Mr. Curtis — 705

Hon. Mr. Barrett — 705

Mr. Bennett — 705

Hon. Mr. Bennett — 706

Appendix — 707

The House met at 2 p.m.

Prayers.

MR. D.E. LEWIS (Shuswap): Mr. Speaker, seated in the Speaker's gallery today are two long-time residents of Shuswap; Mary and Charles Reilly. Mr. and Mrs. Reilly were among the first settlers to settle in the Shuswap area and carved a home out of the wilderness with a team of oxen. I would like the House to welcome these very good B.C. citizens.

HON. P.F. YOUNG (Minister of Consumer Services): Mr. Speaker, I'm very pleased to have with us today in the gallery two very good and stalwart and hard-working members of my constituency association in Vancouver–Little Mountain: Mrs. Pat Fisher and Mrs. Marge Smith. I would ask the House to welcome them, please.

MS. R. BROWN (Vancouver-Burrard): Mr. Speaker, seated in the gallery is a class from Kitsilano High School with their teacher, Mr. Ippen. As you know, this class is a tradition now, so I hope that the House will join me in welcoming them.

MS. K. SANFORD (Comox): Mr. Speaker, seated in your gallery today are Mayor Bill Moore of the City of Courtenay, Mayor Bill Moncrief of the Village of Cumberland and Mr. Ron Ellis, chairman of the regional board of Comox-Strathcona. I would ask everyone to make them welcome.

HON. D. BARRETT (Premier): Mr. Speaker, seated in the gallery today is a group of government agents. These are agents who carry on in the various communities of this province an explanation of government programmes and provide services. They have a long history in this province. We are one of the few jurisdictions that still have government agents. They originated when British Columbia first became a province to serve the far-flung areas away from Victoria and provide government services throughout the province.

Today's group includes Mr. Peter Newell from Atlin, Mr. Art McLean from Ashcroft, Mr. Art Milton from Smithers, Mr. George Broomfield from Dawson Creek, Mr. Wally Anderson from Clinton, Mr. Jim Baker from Courtenay, Mr. Bill Ketchum from Campbell River and Ivor Williams from Chilliwack. I'd like the House to welcome them.

MR. R.H. McCLELLAND (Langley): Mr. Speaker, I rise on a point of privilege. On Thursday last I read a letter in the House which had the letterhead of the Minister of Housing (Hon. Mr. Nicolson) on it. While this letter came to me from a very reputable source, it appears now that that letter was altered. Some additions were made to the letter to make it look as though all of the letter came from the Housing department. It appears now that it didn't.

On other occasions in the House this session there have been altered documents presented, and extra typewriters have clouded very serious issues. I wish to apologize to the Minister of Housing and to anyone else who may have been connected with this. I find it very unfortunate, and I do apologize.

Interjections.

MR. SPEAKER: Order. I think that whenever we get apologies in the House we should all welcome them.

MR. P.C. ROLSTON (Dewdney): Mr. Speaker, I just want to welcome members of the Northern Collegiate Concert Band from Sarnia. They're here with their conductor, Scott Milligan, and Mr. York and Mr. Al Lothier, all from Sarnia Collegiate.

MR. SPEAKER: Hon. Members, I have dealt with the request of the Hon. Member for West Vancouver–Howe Sound (Mr. L.A. Williams). I've produced a lengthy document which comes to the inevitable conclusion that there is no matter of privilege, prima facie, that could be raised on the matter of the broadcast, or any threats in relation to a broadcast, of the proceedings or privileges of the House. I am tabling it with the House, with a copy to the Hon. Member who raised it or anyone else who wants a copy, if that's agreed. (See appendix.)

Oral questions.

CORRECTIONAL CENTRES OVERFLOW

MR. W.R. BENNETT (Leader of the Opposition): To the Minister of Human Resources in regard to community correctional centres. Can the Minister advise the House whether the department, through the community correctional centres, farms out residents to private institutions when the community correction centres are full?

HON. N. LEVI (Minister of Human Resources): I don't understand the question. Community correctional centres are within the jurisdiction of the Attorney-General.

MR. BENNETT: All right, I will ask the question of the Attorney-General.

HON. A.B. MACDONALD (Attorney-General): Quite frankly, I didn't understand the question.

[ Page 666 ]

MR. BENNETT: The question to the Attorney-General is: when community correctional centres are full, do they farm out residents to private institutions?

HON. MR. MACDONALD: Well, Mr. Speaker, I'll check, but I don't know of any of our community correctional centres that are full at the moment. I don't know of any cases of anybody being farmed out, but I'll check the matter further. If it is the case, I'll take the matter as notice. I don't think so.

MR. BENNETT: A supplemental. If you take it as notice, will you advise at the same time whether X-Kalay is a receiving centre for residents of any community correctional centre?

HON. MR. MACDONALD: Well, they're on their own.

GIFTS TO MINISTERS

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, a question to the Premier. Pursuant to some statements that have been made in this House recently, I would ask the Premier how many Ministers have reported to him on the question of gifts that they may have accepted in any way.

HON. MR. BARRETT: I don't have a standard method of asking them to report on gifts, but I have never been approached by cabinet Ministers receiving an extraordinary gift except in the case of the Attorney-General (Hon. Mr. Macdonald), who did, upon our election, receive a gift from Mr. Ben Ginter of a box of apples and some wine. The Attorney-General said at that time that if it was a bribe it was not enough, and if it was a gift it was too much, and he returned it, minus one apple which his daughter ate. Other than that, Mr. Speaker, I know of no other similar incident.

I don't know what happened to the wine. Was the wine all sent back?

HON. MR. MACDONALD: Yes.

HON. MR. BARRETT: Thank you. I take his word on that.

MR. GIBSON: On a supplementary, Mr. Speaker — and perhaps with the exception of apples — I'd ask the Premier whether he has any plans to establish guidelines for the acceptance of gifts by Ministers, and any procedures....

HON. MR. BARRETT: I think that's a very valid question. We have not done so at this point, but I think it's a very valid question. We can look into it.

To my knowledge, there has not been, beyond the kind of token things....

HON. R.M. STRACHAN (Minister of Transport and Communications): I received some calendars.

HON. MR. BARRETT: Calendars? What were the pictures?

I'll certainly take that as notice.

SEATTLE-VICTORIA FERRY SERVICE

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I'd like to ask the Minister of Transport and Communications, in light of the fact that we are within just a few months of the tourist season and there is great concern in our community regarding the tourists who normally come from Seattle by ferry, whether the Minister can tell us the most up-to-date information regarding the possibility of the continuation of a ferry service between Seattle and Victoria this summer.

HON. MR. STRACHAN: I'm still hopeful.

MR. WALLACE: Well, Mr. Speaker, I think a supplementary question would include our statement from this side of the House that we are all hopeful also. But we read a great deal, for example, that an American ship called the Avalon has considered providing passenger service only and that they have met with Victoria city council. In discussion with one of the aldermen I learned that there is a deadline involved in the decision by the owners of Avalon which, of course, has to be contingent upon the possibility of the Marguerite being put back in service. I wonder if the Minister could tell us at least if he is negotiating with the owners of the Avalon or aware of the situation.

HON. MR. STRACHAN: I am informed there have been discussions with all parties involved in every aspect of the continuation of transit between Seattle and Victoria.

MR. WALLACE: A final supplementary, Mr. Speaker. Could the community perhaps be reassured that there is some deadline by which time they will know when negotiations will either be fruitful or be abandoned? There seems to be a great degree of uncertainty as to whether there is even a deadline with regard to the government's position. There is a deadline with regard to the   ship.

HON. MR. STRACHAN: As soon as there is a clear-cut picture as to whether they are fruitful or should be abandoned, then a public statement will be made.

[ Page 667 ]

FRAUDULENT WELFARE APPLICATIONS

HON. MR. LEVI: Mr. Speaker, on Thursday I took as notice a question from the Member for North Peace River (Mr. Smith). I am dealing now with the Duncan matter. He asked at that time: "Is the Minister aware that one Mr. Kenneth Mayea of Duncan applied for and received welfare benefits from his department shortly after receiving a cheque for $25,000 as a result of a raffle or that type of windfall profit?"

First of all, I think it is very unfortunate that the Member used the name of a citizen, particularly as that citizen is not presently on welfare. As a result of the statement made in the House and, as I understand, some other statements made outside of the House, this family in Duncan was caused a great deal of harassment and embarrassment.

I have a report: Mr. Mayea won $25,000 in a fishing derby at Cowichan Bay in August, 1973. On October 4, 1973, Mrs. Mayea applied for social assistance. Her husband was away fishing. Before any issue, the worker requested all receipts for expenditures out of winnings, as the wife declared that they were destitute due to paying off all their debts pressured by creditors.

I have in front of me a list of all of the debts that were paid off, among them $6,500 given to the fishing partner, which I understood is the usual process, and a further $3,500 to a second fishing partner. Then he apparently went to all of his creditors in Duncan, and those were considerable, because he paid off $628 to Household Finance, $2,000 to the Bank of Montreal, $250 to the credit bureau, $2,164 to Avco Finance, $447 to Gary Hall Motors, $600 to Pete Henry — money borrowed — a whole list representing an attempt on the part of this man to clear his indebtedness to his creditors to a total $23,929.

They came into the office and Mrs. Mayea was subsequently put on welfare as a unit 3 — that is, the wife, the husband and the child. They remained on welfare until February, 1974. Since that time Mr. Mayea has not been on welfare. The couple separated and are now back together again. Between February, 1974, and January, 1975, cheques were issued: January — $48; December — $155; and in January — $152. Both people are now working. I understand there was some reference made to a luxury car being driven. A car was purchased, a 1974 GMC pickup, for $4,700, of which $3,600 is still owing. Mr. Mayea is a fisherman. He is presently employed, as is his wife.

I think what we have here is an attempt by a young couple to first of all pay off a large amount of indebtedness and get themselves on their feet, which they are. But, unfortunately, because the Member decided to mention their name before coming to me they are undergoing a great deal of embarrassment in the community where they live. I think that is extremely unfortunate.

HON. MR. STRACHAN: Harassment.

MR. D.E. SMITH (North Peace River): I have listened intently to the words of the Minister. I apologize for any embarrassment I caused the couple. But without bringing a specific case to the mind of the Minister, it was impossible to impress upon him the point I was trying to make.

SOME HON. MEMBERS: Oh, oh!

MR. SMITH: The point is this: what is the position...?

MR. SPEAKER: Order, I think the Hon. Member is....

MR. SMITH: What is the position of a windfall profit? It is considered as income as is anything else when considering the payment of welfare benefits? Unfortunately, it is extremely difficult to get any information on welfare benefits or recipient payments...

HON. D. BARRETT (Premier): Did you phone the Minister?

MR. SMITH: ...at any time, when contacting the department.

HON. MR. LEVI: Mr. Speaker, I don't accept that it is difficult to get this kind of information. The House is sitting. I am here. First of all, in this case where you were not sure — you did not know that they were not on welfare at the time — you made a great deal of trouble for these people. I would have been quite prepared to share the information with you and subsequently, if you felt you had to answer the question, you could have asked it. But I don't accept that it is difficult to get information.

You should understand one thing: we are participants in the Canada Assistance Plan, which is federal legislation. We are required to keep as confidential all matters relating to clients. You blew that confidentiality when you mentioned the name of these people. Fortunately they are not on welfare, but they are, as I said, undergoing a great deal of embarrassment. For the interest of the House, Mr. Speaker, I will table a copy of the document from which I was reading, which was a telegram.

I would like to say one little thing, Mr. Speaker. I was concerned about this this morning and I put a call in to Mr. Mayea himself and reached him at his lawyer's office — he is evidently talking to a lawyer. I informed the lawyer that I was going to have to

[ Page 668 ]

answer this question in the House and I wanted him to understand that, while I was not intending to make worse the embarrassment he was undergoing, I was simply explaining the situation that exists, particularly in respect to the payment of the $23,000 to creditors. I think that is extremely important to know.

JUVENILES RAISED TO ADULT COURT

MR. WALLACE: I would like to follow up on a question that was asked of the Minister of Human Resources the other day regarding some of the juvenile problems in the province. I wonder if the Minister could tell the House if any specific instructions have been issued by his department that juveniles be not raised to adult court.

HON. MR. LEVI: That's not something that is in my jurisdiction. That matter would have to be dealt with entirely by the Attorney-General (Hon. Mr. Macdonald), not by me. I have never issued such instructions.

MR. WALLACE: Could I follow up by asking of the Attorney-General, who was unavoidably absent last week, if, regarding the particular juvenile who caused problems up-island last weekend, a previous request to raise him to adult court was denied by the Attorney-General's department?

I realize that perhaps the Minister would want to check into that, but the information has been publicized that attempts to raise the juvenile to adult court had been denied.

HON. MR. MACDONALD: Generally we try not to raise juveniles to adult court, but if you will send me the name of this particular person I will have the file checked. Some are, nevertheless, being raised but we try and keep it to a minimum.

SELECTION OF
JUVENILE CENTRE HOUSE PARENTS

MRS. P.J. JORDAN (North Okanagan): To the Minister of Human Resources regarding house parents for various juvenile centres in the province: does the Minister have a procedure for selecting these house parents, and what is this procedure?

HON. MR. LEVI: Usually, if it's in relation to a non-profit society, the society, in consultation with the local department people, form an interviewing team in respect of the hiring of these house parents.

LOWERED PROPERTY TAX

MR. H.A. CURTIS (Saanich and the Islands): To the Premier and Minister of Finance: I wonder if the Minister of Finance has been advised that many British Columbians, property owners' of average means, will probably receive lower provincial government grants relating to their property tax in 1975 compared with 1974 as a result of actions taken by this government in recent days.

HON. MR. BARRETT: I'll take the question under advisement.

MINISTER'S ANSWERS REQUESTED

MR. GIBSON: To the Minister of Lands, Forests and Water Resources — sort of a double-barrelled question. Last session he took as notice a question I asked him about the tabling of the old Gottesman-International contract. This session he took as notice the question about the tabling of the 10 pages of questions and answers from CBC and B.C. Hydro. Could he answer either of those questions now?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): I think I might report later on that.

COEDUCATIONAL
CORRECTIONAL FACILITIES

MR. McCLELLAND: To the Attorney-General: could he advise us if it is true that both the male and female offenders are being housed at the community correctional centre in Marpole with only male supervisors in attendance?

HON. MR. MACDONALD: Well, I am not sure about that. In Prince George — yes, we have a coeducational custody facility there. In Marpole — it's possible, but I would have to check. Incidentally, we had a male warden in the women's unit at Oakalla. It went fairly well and it was welcomed by all concerned. I was thinking of getting that job myself. (Laughter.)

FACILITIES FOR DRUG ADDICTS

MR. McCLELLAND: A supplementary, Mr. Speaker. Could the Attorney-General advise us whether or not convicted drug addicts are now being admitted to community correctional centres?

HON. MR. MACDONALD: I will take it as notice.

Orders of the day.

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

[ Page 669 ]

ESTIMATES: PREMIER'S OFFICE

On vote 2: Premier's office, $286,290.

MR. W.R. BENNETT (Leader of the Opposition): To the Premier as financial agent for the province: lately there has been a lot of controversy about large sums of money being borrowed on behalf of the Crown agencies, and this is one of the functions of the Premier — to act as fiscal agent for these areas.

In looking back we can see that after 1967 there was apparently no outside borrowing for these agencies. Most of the financing was handled internally within the framework of the accounts and the pension funds that the government had at its disposal. But last year the Premier did announce that he was going to go to the outside market. In fact, if we go back to Hansard, he did say, when he was seeking the authority, that he would go for $100 million only.

AN HON. MEMBER: Oh, oh!

MR. BENNETT: That was on June 18, 1974, in Hansard. He, as the fiscal agent, would go for no more than $100 million of the $500 million authorization that they were asking for. Yet, subsequently, we've seen borrowings in the nature of $375 million on behalf of Hydro, the first of which was a borrowing of $100 million through The First Boston Corp. and others at 10.25 per cent interest. This offering is dated in September, 1974, which would be approximately six or seven or eight months ago. The 10.25 per cent rate at that time appears to have been the peak of a very expensive money market.

I would like the Premier, as the fiscal agent, to explain how he arrived at going to the money market at a time when other jurisdictions both in the public and the private sector, unless forced to, were withholding offerings of a much lesser nature, particularly in amounts such as this.

This $100 million was for 25 years, due in 1999. That interest rate of 10.25 per cent is a fantastic interest rate to commit Hydro and, ultimately, the users — the people of this province — to when you realize the amount of extra money they will pay just in extra interest than if they had gone at this particular time now.

If the government with the funds it had at its disposal, both the pension funds and others that had provided the bulk of the financing over the past few years, had anticipated — as surely the Finance Minister (Hon. Mr. Barrett) should know — that the market would drop and that we were at the peak (surely the historical financial ups and downs of the bond market are there to guide them), then this government above all governments didn't have to go at this particular time. If they were committed to a new principle of going outside their own funds for financing for Crown corporations, at least they would withhold it to a time when money was cheaper and our citizens, who are the users of Hydro, wouldn't pay these extra interest charges.

I contrast the rate of September 26 of 10.25 per cent for the $100 million for Hydro, which utilizes the credit of this province, with a recent issue of the Province of Ontario for $200 million. I believe that British Columbia has a very favourable credit rating, a credit rating that would be the same as Ontario's and the same as the Government of Canada's. Yet here we have, dated March 1 of this year, the Province of Ontario going for $200 million. They've gone for $200 million — 30-year money — at 8.875. When you consider that this, in just these few short months, is 1.375 per cent difference in a mortgage rate, it doesn't sound like much until you start to do the mathematics of just how much that's going to cost the citizens of this province and how much it will cost the citizens as Hydro users.

Take 1.375 on a $100 million issue. Take the fact that this money, if it's paid every year, is $1.3 million every year. But also realize that in paying this money out, it's a loss of capital from the people of this province and from Hydro. If we have that $1.3 million and invested it on a compound basis — because that, in effect, is what its investment value is worth — over the 25-year period, it's a benefit that works out to $116 million. That's what the people of this province are losing; that's what they're losing from Hydro by paying an extra 1.375 per cent on an issue that didn't have to happen. This province could have gone and waited for a better financial period, a better financial climate in order to raise their long-term capital.

I question the reasoning and the ability of the financing of the Finance Minister as fiscal agent when he will commit our Crown corporation of Hydro and ultimately the users of Hydro, the people of British Columbia, to an extra loss over that 25-year period of the value of that 1.375 per cent which, if invested, would work out to $116 million. That's what is lost from the value to British Columbians just on 1.375, and that's a lot of money for a decision that could have been made to consciously hold back going to any market rather than go at a time of the highest price in history.

Other governments were publicly announcing that they were withholding offerings. And in British Columbia, a favoured province, a province that has been able to finance internally on behalf of its corporations for the last eight years, or seven years, a province that is in a cash position, that had a cash position, that could have financed over the short term and waited for a more presentable and lower financial market.... It's unusual for this to have happened in British Columbia.

[ Page 670 ]

I'm concerned, then, about the total research that's going into this province's presentation of public financing. We not only have this $100 million that's obviously going to cost our people a lot of money and a loss in benefits, but we have an issue of $50 million at 10 per cent, due January 2, 2000; that was a 25-year issue. That, again, would cost us the same type of excessive loss in extra interest as if we had waited to go to the market now.

We have the middle-term money, the eight-year term money, or the other term money that is questionable as to the rates they pay. We also have those loans from unusual sources, or unnamed sources.

Many of us believe that when you're dealing with public money and borrowing on behalf of the people of the province, the lender should be identified. I know that we've had an area outlined as being the lender of these loans — that they came from the Middle East and that it was petro-dollars. But I notice that Ontario has borrowed money and they have made available the name of the lender the country who lent the money to Ontario. Yet in British Columbia the Premier and Minister of Finance, as fiscal agent, hasn't shared with the people of this province who the lender is. I wonder if that is because we have a very unusual situation.

The Premier announced that on the first, loosely connected Arabian loan the commission was $75,000, and there was considerable controversy surrounding who should get the commission, or any commission. I think that in the newspaper reports the announcement was that the commission was $75,000. This is a very unusual fee. It was mentioned that this loan was arranged, once again, through The First Boston Corporation. Now in the first $100 million loan I noticed The First Boston Corporation charged $875,000 commission: a commission of 0.875 per cent. Yet on the other $100 million loan, from an undisclosed source, they're talking about a commission of $75,000.

HON. D. BARRETT (Premier): What are you quoting?

MR. BENNETT: I was quoting a newspaper account of what the commission rate was. The Premier can advise if there was a higher commission rate. I'd be pleased right now if the Premier could advise the commission rate. What was the...?

MR. CHAIRMAN: Order, please. When the Hon. Leader has finished his questions, then the Hon. Premier can answer; otherwise, will the Hon. Leader continue?

MR. BENNETT: Yes, then the newspaper report was in error. I will leave my argument on this particular part of the borrowings until later, because there was a newspaper account that said it was $75,000.

HON. MR. BARRETT: It's not unusual for the newspapers to be incorrect.

MR. BENNETT: Yes, well, I'm prepared to believe that. That's why we are allowed this opportunity to question the Finance Minister to get the facts.

I also question, then, after saying that we were just going to go for $100 million, whether we had to go for $375 million in a period of high interest rates. We'll come back to the amounts of commission after.

Here we have the money market dropping; we have it dropping in just six months after the first $100 million loan. We have an equally wealthy province, the Province of Ontario, going for 30-year money at 8.875, yet here we are committed to loans at 10.25 per cent, at 10 per cent — and money that's paid to people outside our country. I'm wondering whether the capability of this province, which I believe is great, to internally finance is not still there. I know, as the Premier has suggested, that we've had overruns on the Columbia, and that's fine. But those overruns have been....

HON. MR. BARRETT: That's not fine; that's a mess!

MR. BENNETT: Those overruns have been continual — for instance, inflation has caused many projects to cost more than their original estimates. So it didn't come as a sudden shock that...

HON. MR. BARRETT: Oh!

MR. BENNETT: ...from within Hydro, all of a sudden, extra money was needed. We've gone through the major part of the construction without having to go outside our own financial boundaries, or even outside the capabilities of the funds managed by government. But here we are going outside the capabilities of the government and outside of the province for money at the most expensive time in history.

I think that the Finance Minister, in view of the declining interest rates that were predicted and what other governments have done in Canada, has to be accountable for committing the citizens of this province and Hydro to this excessive interest rate at a time when this province had the capability of delaying that decision to a more favourable financial period.

As I mentioned before and as the Premier has said, they don't want to finance through parity bonds. Nobody is suggesting that major long-term financing has to be done through parities. Long-term financing

[ Page 671 ]

was being done through funds under the control of the Minister of Finance from the pension funds, and parities were a limited offering on behalf of different government agencies that were allowing the citizens of the province to participate in the growth of their province and to give our citizens flexibility. They can cash those bonds.

Yet we have the Premier — and I look back in Hansard — talking as though he was saving the country by calling in parity bonds. In fact, on more than one occasion he said: "I disagree with parity bonds. They're a system of printing money." So he says that he called them in. Well, nobody calls in parity bonds. Parity bonds belong to the people who have purchased them until their due date. The government doesn't have the right or the authority to call them in; parity bonds only come in when the owner of the parity bond, the citizen of this province, wishes to cash them in. Parity bonds are only as strong as the confidence in the Finance Minister and the confidence in the government. I have no doubt that with this Minister of Finance and his present record, perhaps all parity bonds will eventually end up being cashed in. But for him to suggest that you call them in is irresponsible. It's not true because parity bonds are turned in by the citizens of the province. They weren't called in; they were turned in. They were turned in because they had no confidence in this Minister of Finance.

MR. D.M. PHILLIPS (South Peace River): That's right.

MR. BENNETT: I think they must have anticipated that he was going to be making loans at 10.25 per cent. I think they must have anticipated that he had no understanding of the financial market and that he would not have the ability to predict and to go on behalf of the corporations of this province at a time when money was low rather than taking $375 million worth of issues for high-priced money that didn't have to happen.

We see a declining market; we see the price dropping. We see Ontario moving at a time when prices are low while we're committed at high prices. I think the details and the consideration that went into the borrowing of this money.... I would ask the Premier to advise the House why this was done. Were we short of money? Would he advise us of the amounts of the commission rates surrounding the mysterious money for which we still do not know who the lender was?

HON. MR. BARRETT: I have to start off by saying to the Leader of the Opposition (Mr. Bennett) that you're not only incompetent but you're irresponsible.

MR. CHAIRMAN: Order, please. I would ask the Hon. Premier to withdraw the imputation that any Member of this House is irresponsible.

HON. MR. BARRETT: Well, Mr. Chairman, he just accused me of being irresponsible, and you don't call him to order. I'm going to prove that he's not only irresponsible but that he's incompetent. I think I'm able to say that in this House.

MR. CHAIRMAN: Order, please.

HON. MR. BARRETT: Mr. Chairman, I withdraw the word "incompetent." I withdraw the word "irresponsible." I say that the Member is a stranger from the truth and has done no research.

Now let's deal with his words. He attempted to leave with this House the impression that no one else was in the market when the rate was 10.25 per cent; no other province was. The words that I noted — and they'll show up on Hansard — were that no other jurisdiction was borrowing.

MR. BENNETT: I didn't say that.

HON. MR. BARRETT: What did you say, then? You said other provinces were holding back.

Interjections.

HON. MR. BARRETT: Yes. Your words were that other provinces were holding back. Right?

Interjection.

HON. MR. BARRETT: Oh! At the same time that we were borrowing (and he's quoting Ontario) Ontario borrowed a week before we did in New York at those current rates — not at 8.25 but at 10.25 per cent, which was the going rate at the date. You can't come into this House and say today's rates were applicable to four or five months ago. Don't you leave the impression that Ontario and other provinces weren't borrowing at the same time. I say shame. You're trying to create a situation that you didn't even research or check out.

I expect a third apology today after having two already

Interjections.

HON. MR. BARRETT: Now we're coming to other statements from the Leader of the Opposition.

1. Ontario borrowed $150 million one week from us in New York at 10.25 per cent. Ontario is going back to New York now that there are new rates, and so are we. That's a matter of record. Mr. Member, you were wrong there.
2. We did short-term some money for Hydro, and then we long-termed it out because we had an

   [ Page 672 ]

You say cut back and borrow within. You say that inflation has caused the problem with Columbia River and that was predictable all along. Those were your words. Well, Mr. Member, I want you to know that your party saddled this province with close to $840 million worth of additional expenditures on the Columbia River because the former Minister of Finance (Hon. Mr. Bennett) did not include inflation as a factor in the Columbia River treaty.

If you have the nerve and the gall to come to this House and blame the present government for the massive borrowings we have to make because of the Columbia River treaty, you're really doing something.

MR. PHILLIPS: Why don't you put on a mask to keep your smile back when you talk like that?

HON. MR. BARRETT: Mr. Chairman, we have said that there will be an inquiry, at the request of the opposition, on those costs.

MR. G.F. GIBSON (North Vancouver-Capilano): How soon?

HON. MR. BARRETT: As soon as we can bring forth the name of the Member who will do the inquiry. You know, we had an inquiry arranged for the Commonwealth Trust, and they resigned. Do you remember that? We want to make sure that when we gather together those people, the inquiry is properly launched and done on a basis of the public having the information.

Now, Mr. Chairman, let's also deal with a record that some of the Members in this House have some memory of — not the present Leader of the Opposition — internal borrowing. When Hydro made demands internally in the past, there wasn't enough money to cover all the borrowings, so a municipal authority was established and some other areas suffered. What were those areas? The Member for West Vancouver–Howe Sound (Mr. L.A. Williams) will remember, the Member for Oak Bay (Mr. Wallace) will remember, and the Member for Saanich and the Islands (Mr. Curtis) will remember, because he used to decry that.

The first thing that was cut back in this province, Mr. Chairman, was schools and hospitals. I remember sitting in this House having the former Minister of Education saying the kids could exercise right beside their seats. We couldn't afford gyms in British Columbia under Social Credit — it was a frill.

MR. PHILLIPS: Why don't you get down to your everyday capabilities as a Minister of Finance?

HON. MR. BARRETT: Mr. Member, you want to come to this House and make statements? You want to come in here and be responsible? Then just remember the lag in school construction and hospital construction that went on in this province. In 1975, trying to make up for all those years of neglect....

Interjections.

HON. MR. BARRETT: You know, Mr. Chairman, the louder they yell, the less sense they make. The other question about ....

Interjections.

HON. MR. BARRETT: Along the Columbia....

MR. BENNETT: What's the commission on those?

HON. MR. BARRETT: The commission was 0.75 per cent, which is normal, and the newspaper article is incorrect.

MR. BENNETT: It was 0.75 per cent on both?

HON. MR. BARRETT: On both, and the newspaper article is incorrect.

You also mentioned, Mr. Member, that you were concerned about the further borrowings of Hydro and, you said, other Crown agencies.

MR. BENNETT: Yes, the BCR.

HON. MR. BARRETT: No outside borrowing is taking place by other Crown agencies — none. Now you didn't know that, did you? All you had to do was ask. You come in here and leave the impression that other Crown agencies are borrowing outside, and you haven't done a lick of homework — not a lick of homework.

MR. BENNETT: Don't be silly.

HON. MR. BARRETT: He's telling me not to be silly. He's the one that made the statement that Crown agencies were borrowing outside, and they're not.

MR. BENNETT: Read the Blues.

HON. MR. BARRETT: "Read the Blues." You've got the blues, Mr. Member. You've got the blues. (Laughter.)

Now the other question about the continuation of borrowing — yes, we wanted to limit Hydro borrowings. Then the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) informed us that the Pend-d'Oreille project could go ahead, that we needed the work. So we made a decision: when we were faced with an economic slowdown in other

[ Page 673 ]

areas in North America, we would continue employment in the Province of British Columbia, and we went ahead with the Pend-d'Oreille. We had a winner.

Mr. Member, if you want to go throughout this province and tell people to cut back on the expenditures for the Pend-d'Oreille....

MR. PHILLIPS: What price?

HON. MR. BARRETT: At what price? At a price of high unemployment, as we had under Social Credit. Well, we won't operate that way.

Interjections.

HON. MR. BARRETT: Mr. Chairman, let's deal with the parity bonds. There was $255 million out there in parity bonds. Never once in the history of this province, in the terms of the 15 years that I've been around, had I ever heard the former Leader of the Opposition ever get up and attack the parity bonds — never take that irresponsible position — but today the present official Leader of the Opposition left the impression that the parity bonds were not a good investment.

Interjection.

HON. MR. BARRETT: You did too, Mr. Member — $60 million were cashed in during that particular period.

HON. R.M. STRACHAN (Minister of Transport and Communications): That's right, and where did it get Daddy?

Interjections.

HON. MR. BARRETT: Well, you know, Mr. Member, you came in here and left the impression that Ontario was not borrowing when everybody else was borrowing, and they were. Quebec and Ontario were borrowing at the same time we were. You didn't name one Canadian jurisdiction which was not in the market. You made a general statement that you did not back up with facts. That's one.

No. 2, you dismissed the problem of inflation with the Columbia River by saying that anybody could have predicted that. Well, your Dad didn't, and he was the Premier of the province at the time. So if you're criticizing your father, you've finally made some sense in your argument today.

In terms of the kind of commitments we have in Hydro, we will borrow more, but we will not let the schools and hospitals suffer as they did in the past. Do I need to read the Member for Saanich and the Islands' (Mr. Curtis) speech on this very point?

MR. H.A. CURTIS (Saanich and the Islands): If you enjoy reading them, go ahead.

HON. MR. BARRETT: I don't enjoy reading them, considering the embarrassment they must give you when you attacked the former government for short-changing schools.

MR. PHILLIPS: You'll never change your image by talking.

HON. MR. BARRETT: Mr. Member, there is no way that I need to change my image with you — you're in trouble up in the Peace River.

MR. PHILLIPS: I was just up there. Sales have never been better since you were up there. Please go up again.

HON. MR. BARRETT: There is the only man who doesn't need to use a telephone to contact his constituents.

Mr. Leader of the Opposition, the question of further borrowing is relevant. We intend to continue the obligations of the province on the Columbia River Treaty. We have a commitment to Site 1 and a commitment to Pend-d'Oreille.

MR. J.R. CHABOT (Columbia River): A costly one.

HON. MR. BARRETT: Yes, we have a very costly commitment on the Columbia — you bet your life. And there is not a thing we can do about it. The Columbia River is a financial disaster to this province. There is nothing we can do about it.

MR. CHABOT: So are your programmes — much more of a disaster.

HON. MR. BARRETT: In terms of the availability of Arab-country dollars, I notice that the UBCM, the finance authority of the municipalities of British Columbia, is looking at petro-dollars. I would advise them to look closely, because perhaps they could have a good deal out of those petro-dollars. I hope they don't take the advice of the Leader of the Opposition and not look for those funds, because they haven't done so well in other markets, and you will admit that publicly.

MR. CURTIS: It remains to be seen.

HON. MR. BARRETT: At this point it doesn't look too good. But they should look to alternate markets.

In terms of the particular country, part of their stipulation was not to identify the country. That was

[ Page 674 ]

their request and I honour their request; it is a private loan.

Interjections.

HON. MR. BARRETT: It is a public loan at this end, private at that end.

Interjection.

HON. MR. BARRETT: Well, Mr. Member, that is part of the agreement. It is a private placement of the loan. Am I happy with it? I'm not unhappy with that request. I'm not unhappy. It is not criminal dollars. We have checked that out.

MR. CHABOT: Why won't you tell us?

HON. MR. BARRETT: Because that was part of the agreement and I'll honour that agreement.

AN HON. MEMBER: Why has it never been done with any others?

HON. MR. BARRETT: Well, Mr. Member, that was part of the agreement with us, and that is the way it is. If you want to see the agreement, I can show you the agreement confidentially if you want. That's fine.

MR. PHILLIPS: Open government under the table.

HON. MR. BARRETT: Well, Mr. Member, that's not....

Interjection.

HON. MR. BARRETT: Oh, come on, Mr. Member, you know the details. I don't know if you want answers or if you just want to yak.

MR. PHILLIPS: We want answers but we want....

HON. MR. BARRETT: You want to yak?

MR. CHAIRMAN: Order, please. The Hon. Premier has the floor.

HON. MR. BARRETT: Mr. Chairman, I know that the Leader of the Opposition will correct that statement about other borrowings at 10.25 per cent.

In terms of other commitments I have told my cabinet colleagues that there will not be, under this administration, any cutback on school or hospital construction.

SOME HON. MEMBERS: Hear, hear!

HON. MR. BARRETT: As a matter of fact, we will continue the building programme we initiated some two years ago.

Interjection.

HON. MR. BARRETT: There will be no cutbacks under us. There will not be cutbacks on schools or hospitals! There will not be cutbacks on schools and hospitals under this government!

MR. CHABOT: From 30 per cent to 23.5 per cent!

HON. MR. BARRETT: Oh, Mr. Member, how you can sit there and forget your own history is most interesting.

We are in the market now for another borrowing. You will be asked to debate two bills that are in front of the House now, two bills dealing with the expansion of borrowing of B.C. Hydro and B.C. Rail. In terms of B.C. Rail I will have a major statement about problems with current contracts that we inherited. I will have a major statement on those during the debate of the bill. There are also court cases related to those contracts, and I will have to be very careful in stating the circumstances around those court cases and the contracts that we inherited.

The First Member for Vancouver–Point Grey (Mr. McGeer) asked some very important questions on those contracts over a year ago. I think it is very good....

MR. D.A. ANDERSON (Victoria): Time for answers.

HON. MR. BARRETT: Yes, they got answers then with the studies, and there will be more information available when we debate that bill. But it is a situation not of our making. Those court cases out of contracts are not of our making.

MR. CHABOT: How about the Bremer case?

HON. MR. BARRETT: Mr. Member, I think it is appropriate that we discuss those very carefully during that particular aspect.

MR. BENNETT: Perhaps the Premier will listen more closely when I talk about the way in which I talked about the credit rating and other provinces. I said that British Columbia's credit rating was similar to Ontario's. And it is in Canada, that's right. It still is.

I used the rate that many jurisdictions had withdrawn borrowing from the market. I can bring news accounts....

[ Page 675 ]

HON. MR. BARRETT: You quoted Ontario, and tried to leave the impression that Ontario was borrowing.

AN HON. MEMBER: Sit down! Shame!

MR. CHAIRMAN: Order, please.

MR. BENNETT: I used the name "Ontario" to give an idea of what rate we could borrow money at now, if we had held off this borrowing for six months. I believe the province should have had the capability to delay that borrowing. By not delaying it, the Premier has cost the province and the citizens a lot of money. I took out that 1.38 per cent extra interest by not waiting for a lower-price market.

This Premier has cost our citizens, through Hydro, millions and millions of dollars. There is no doubt that the Premier will have to say that he absolutely had no ability to manoeuvre, that he had to go to the market then, that he had no option. Then his explanation would be more presentable.

I believe that if this province didn't have to go, it shouldn't have gone.

HON. MR. BARRETT: I never said that.

MR. BENNETT: Listen, I know that this province has had the financial ability to wait for more favourable markets. That is something that isn't there for other governments that have debt to finance, that have a lot of expenditures, that didn't have surpluses — governments coming in that didn't inherit surplus funds to give them flexibility. But this Premier did, and he had flexibility. I'm saying that with that flexibility why did he go at 10.25 per cent when the market was going to drop? Why did he commit Hydro to 10.25 per cent when the market has already dropped down to 8.875? That is fact. Ontario has just put an offering out at 8.875 with a similar credit rating to British Columbia, and we paid 10.25. Obviously British Columbia could have got 8.875 if they had held that issue off until today. Obviously.

That's the point I was trying to make: that this Premier and Minister of Finance committed us for an extra 1.375 per cent interest by not delaying the borrowing, by not being able to predict the market, by not watching the financial market and using his position, a position that should have had flexibility, that's always had flexibility, to wait for a more favourable market.

British Columbia has been favoured. This Premier was fortunate. He had surpluses there that gave him that flexibility. Perhaps even other provinces with the same credit rating don't have the flexibility that he inherited when he came to government. He had a flexibility of funds that allowed him to wait for more favourable markets, if indeed the policy of British Columbia was going to change and we were, for the first time in six or seven years, going outside our own internal financing to borrow money for our Crown corporations — if indeed that was going to happen.

I was pleased that the Premier was able to tell me that the rate — and I listened carefully — was 0.75 per cent on that $100,000. That's a little cheaper than the rate....

HON. MR. BARRETT: $100 million.

MR. BENNETT: Yes, that $100 million. That's a little cheaper than the 0.875 we paid on the first $100 million; so obviously as you do more and more business, you get a more favourable rate. Instead of 0.875 it is 0.75 on those two $100 million loans. That's correct, is it? Very good.

Now one of the statements the Premier made was that he had to pay extra money for school and hospital construction. Going back in the public accounts, we see that bonds floated for construction for educational purposes actually dropped in 1973. These are tabled in the Legislature. They dropped from $55 million in 1972 to $39 million in 1973. We see that the figure was $45 million in 1970, $51 million in 1971, $55 million in 1972; but it actually dropped. This is the increase that the Minister of Finance, who is worried about accuracy.... He's telling us that he had these excessive expenditures — but they dropped to $39,853,000 in 1973.

The great expenditures in health that he talks about: in 1971 the province issues were $19,862,000; in 1972, $17,724,000; in 1973, $20 million. But that's no gigantic, fantastic increase dealing in hundreds of millions of dollars. When we talk about accuracy as to the reasons for borrowing, and what happened in this province, I think we have to be accurate as to how much the province did raise in the way of money. And hearing the expenditures as filed as answers to questions in the Legislature and published — a drop from $55 million in 1972 to $39 million in 1973.

Now we also have the question of the Municipal Finance Authority. Perhaps the Minister of Finance can advise me whether governments in other areas, other provincial governments, have ever borrowed or do borrow all of the money on behalf of their municipalities. I know that the MFA has been able, by pooling their borrowing power, to achieve a better borrowing rate for municipalities. I know that the government has an involvement for those poorer communities that need a government guarantee. I would hope that some day the provincial government can extend guarantees to the MFA to help them, if they cannot arrive at a credit rating similar to the province, to achieve cheaper borrowings. But I don't think that the Premier and Minister of Finance

[ Page 676 ]

recognizes how municipalities borrow in other areas in Canada when he says that the MFA were being ripped off by the ....

HON. MR. BARRETT: I never said they were being ripped off.

MR. BENNETT: Whatever you said, which was along with your statement on the capital construction costs for hospital and school facilities.

I'd still like to find out what the policy is for going to the money markets, and whether British Columbia was forced to go to the market last September, whether it had the capability of holding off to this March, and whether we are paying that extra 1.375 because of a mistake in judgment and not because we were forced to go to the markets.

HON. MR. BARRETT: Mr. Member, first of all, I ask you to listen closely, please. I did not say that the Municipal Finance Authority was ripped off.

MR. BENNETT: What did you say?

HON. MR. BARRETT: I never made that statement. I said that they may be in trouble with two of the borrowings.

As a matter of fact, the Member for Saanich (Mr. Curtis), if I remember correctly, was chairman of the fund at that time, so all you have to do is turn around to him and he'll give you the details. They made borrowings in foreign currencies that may not be a boon; it appears to have been a mistake. But if he had that kind of hindsight, Mr. Member, he'd be a financial genius.

You make a statement that we hold off until the rates come down lower. You tell the House right now what the rates will be six months from now. You tell us.

MR. G.S. WALLACE (Oak Bay): Six days from now.

HON. MR. BARRETT: If you're leaving the impression with this House that somebody in the world knew what the rates were going to be six months ahead of time, you have an obligation to share that wisdom with all of us. I challenge you to tell us right now what the rates are going to be six months from now.

MR. BENNETT: I'll bring in the financial articles....

MR. CHAIRMAN: Order, please!

HON. MR. BARRETT: Mr. Chairman, hindsight is a great thing, but you tell me....

MR. PHILLIPS: Use a little foresight once in a while.

MR. CHAIRMAN: Order, please!

HON. MR. BARRETT: Mr. Chairman, the challenge to the Leader of the Opposition is to state in this House, with all the reading he does and with all the financial advisers he has, and the wisdom that he obviously cares to impart, what the interest rates are going to be six months from now.

Interjections.

HON. MR. BARRETT: If I may continue, Mr. Chairman. I know that they're always happy to hear me.

MRS. P.J. JORDAN (North Okanagan): Well, say something.

HON. MR. BARRETT: Madam, would you please shut up.

MR. CHAIRMAN: Order, please!

HON. MR. BARRETT: There are standing rules in this House.

MR. CHAIRMAN: Order, please! I would draw to the attention of the Hon. Members that there is....

Interjections.

MR. CHAIRMAN: Order, please! Order! I would draw to the attention of all Hon. Members that there is a rule that says you're not to interrupt the person who has the floor. So I would just remind you of that rule.

Would the Hon. Premier continue, please?

Interjections.

HON. MR. BARRETT: She wasn't very ladylike. (Laughter.)

The projection for 1974 on school spending is $91 million approved — $91 million approved in 1974. Now, in 1975, the projection for 1975-76 is over $100 million.

Interjection.

HON. MR. BARRETT: Okay, Mr. Member, I'm giving you the information you asked for. If you don't want the information, forget it.

In 1974, the approved spending for schools is $91 million. Write it down so you don't forget. In 1975-76, it will be over $100 million.

[ Page 677 ]

MR. BENNETT: Mostly guesswork.

HON. MR. BARRETT: Well, Mr. Member, you accuse me of saying it's guesswork. You just adjust the answers to anything you want. Oh, look....

Interjection.

MR. CHAIRMAN: Order, please. The Hon. Premier has the floor.

HON. MR. BARRETT: We're talking about what's approved in 1974. I'll go over it again slowly so you'll listen.

In 1974, $91 million has been approved. In 1974, $91 million has been approved for capital spending.

Interjection.

HON. MR. BARRETT: Just be quiet.

In 1975, it is estimated that over $100 million will be approved. What is actually spent and what is approved are two different things. Okay, now you've got that figure.

MR. BENNETT: What was spent in 1973?

HON. MR. BARRETT: All right.

MR. CHAIRMAN: Order, please! I would ask the Hon. Leader of the Opposition to save his questions until he has the floor.

HON. MR. BARRETT: Mr. Chairman, what the Leader of the Opposition does not recognize again is that he is quoting current interest rates that Ontario is out at, leaving the impression that somehow Ontario borrowed money six months ago at those current rates.

Mr. Member, Ontario does not have preferred rates. We will go to market and we will get the same rate that Ontario is getting, as we did six months ago. I want you to acknowledge the fact that Ontario borrowed $150 million six months ago at 10.25 per cent. You cannot leave the impression in this House that we paid 1.75 per cent more than Ontario did, and that's what you're doing.

Interjection.

HON. MR. BARRETT: We could have waited, and the interest could have been up.

MR. BENNETT: That's all I wanted to hear you say.

HON. MR. BARRETT: Oh, oh!

Interjection.

HON. MR. BARRETT: Mr. Member, would you please tell us what the interest rate is going to be six months from now?

Interjection.

HON. MR. BARRETT: Oh! Thanks very much for your answer.

Mr. Chairman, the correct thing is that we are moving ahead to cover the costs of the Columbia River. We have no options but to go to the market — no options but to go to the market. We have obligations under the Columbia River treaty. If you don't want to face those, you go ahead and rationalize it any way you want.

MR. P.L. McGEER (Vancouver–Point Grey): I just want to test the Premier with a couple of short questions. We have been discussing the borrowings of British Columbia and linking these to the problems of the Columbia River. I would like to ask the Premier if he could give us some indication of the advice he received not to go to the public of British Columbia for the borrowings for B.C. Hydro in preference to the Arabs.

I, for one, Mr. Chairman, do not want to have the Arab nations with a first mortgage on the Province of British Columbia. As a citizen of this province I dislike intensely any secret money being loaned to this province which obliges the public of British Columbia to return at some future date to those unknown people who hold this first mortgage on the province. It seems to me that the policy of British Columbia should be: everything on top of the table. If nations don't wish to do business with us on that basis, we should be very glad not to have anything to do with them.

But, of course, Mr. Chairman, before we undertook such an obligation by which we would have to keep the holders of this first mortgage secret from the people of British Columbia, it must have been known that a bond issue would not be accepted by the public of this province. That must have been known. Therefore I would like to ask the Premier, if he would, to tell us who said that a public issue wouldn't go and why it was so necessary for us to borrow money from Kuwait or wherever it was.

The reason for this anonymous borrowing was to meet our obligations on the Columbia River, and, of course, we understand that the B.C. Hydro has very heavy capital commitments for the next several years. If Site I is going to be built and if the transmission lines and machining are to go into Mica and if we are going to go ahead with the Pend-d'Oreille, which we are, the B.C. Hydro is going to be up in the $300 to $500 million a year range again for several years. The

[ Page 678 ]

last couple of years we've had a little bit of hiatus in the big capital requirements. A pattern that is established now is certainly going to be expanded in future years. This is what has me so concerned about the pattern of borrowing that we've commenced. I frankly don't think they should keep their petro-dollars, and the people of British Columbia should be invited to hold the first mortgages on this province.

I'd like to ask some questions about the Columbia. The Premier said that we had no choice. This is something that I can't accept.

I want to know when this inquiry that was promised first by the Premier and then by the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) — not to this Legislative Assembly — is going to be held. I am disappointed that it's not a legislative inquiry because I think the people who should be asking the questions about the Columbia are sitting right here in this House. I think the appropriate witnesses should be brought before the elected Members and not before some friend of the government who gets appointed to hold a commission and to ask....

MR. CHAIRMAN: Order, please. I would ask the Hon. Member if he is imputing an improper motive to members of the cabinet.

Interjection.

MR. CHAIRMAN: Order, please. I am asking the Hon. Member if by the phrase "friend of the government" he is imputing an improper motive.

MR. McGEER: On the part of the government? Their motives are all improper, Mr. Chairman; they are all improper. I want to know why the government hasn't got the guts to order a legislative inquiry. Bring the witnesses right here where we can talk to them.

MR. CHAIRMAN: Order, please! In keeping with the rules, I would ask the Hon. Member to withdraw any imputation that any Members of this House had an improper motive.

MR. McGEER: It was partisan.

MR. CHAIRMAN: I would ask the Hon. Member to just withdraw the imputation.

MR. McGEER: No, it was partisan, Mr. Chairman.

Interjection.

MR. CHAIRMAN: Order, please. I have asked the Hon. Member to withdraw the imputation....

MR. McGEER: Wasn't it partisan? It was one-sided.

MR. D.A. ANDERSON: You can't have partisan politics here.

AN HON. MEMBER: You are quite correct.

MR. CHAIRMAN: Order, please. I press the Hon. Member on this point: he has made the suggestion that friends of the government were receiving some benefit. This suggests an improper motive and I would ask the Member to withdraw the imputation.

MR. McGEER: It was the government that was looking for benefit.

MR. CHAIRMAN: I am asking the Hon. Member to withdraw unconditionally.

MR. McGEER: Certainly I withdraw unconditionally. Absolutely, Mr. Chairman.

MR. CHAIRMAN: Will the Hon. Member proceed then?

MR. McGEER: I was merely making the point that it was a one-sided socialistic view that would want the Columbia held with this kind of an inquiry instead of a legislative one that would be bipartisan.

MR. CHAIRMAN: Would the Hon. Member continue, please?

MR. D.A. ANDERSON: Even the Premier is embarrassed by that intervention by you.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): They have no friends left.

MR. McGEER: They've all been appointed.

Mr. Chairman, if we had such an inquiry right here in this Legislative Assembly where the witnesses could be brought before the Members of the House, either to the bar of the House or to one of the very fine committee rooms, we would have an opportunity to get underneath it all as far as the Columbia River is concerned and really learn what's going on for the first time. We've been denied that. There was just a little whiff of something in the air about this secret committee and then suddenly the door was closed and we haven't been able to learn anything more.

HON. MR. BARRETT: What are you dredging up now?

MR. McGEER: Well, what I want to know is really the details of the negotiations and then how the government tried to cover up what the true costs of the Columbia were going to be.

[ Page 679 ]

HON. MR. BARRETT: You're not accusing us of that.

MR. McGEER: No, I'm accusing you of not following through on the responsibilities of the government of today.

HON. MR. BARRETT: It will be done.

MR. McGEER: Because those responsibilities require a renegotiation of the Columbia River treaty as a first order of business, and if the figures I have studied are correct, the people of British Columbia might benefit by as much as a $100 million a year from that renegotiation. It's merely based on the value of peaking benefits, something for which the people of British Columbia are not receiving a penny today.

I don't think the people of British Columbia yet realize that while the value of electricity is soaring, and while the value of peaking-power benefits is rising out of proportion to base-power benefits, what we're receiving in consideration under the Columbia River treaty is declining year by year by year. As that power becomes more valuable to the Americans, we get less. That requires a renegotiation.

SOME HON. MEMBERS: Hear, bear!

MR. McGEER: That is why we want to have this inquiry now and get it out in the open so we can begin to drive for the things that ought to be done. I've said right along that the federal government is not going to welcome pressure from us in this direction. They're going to hate it.

HON. MR. BARRETT: They turned it down once already.

MR. McGEER: Yes, but you've got to keep after them. Whoever expected Ottawa to say yes the first time to British Columbia? Never.

HON. MR. BARRETT: And you're a Liberal.

MR. McGEER: We'll give you all the support on this that you can use or want. You have our total support!

HON. MR. BARRETT: Don't give us your support — we'll lose the case for sure.

MR. McGEER: No, no. I'm going to talk about another case where the Premier is losing with Ottawa. We'll get to that later, and that's with respect to natural gas.

But for the moment we want that legislative inquiry on the Columbia River, and we want it now.

Since the government has not yet picked a commissioner, and has not announced an inquiry, let's get it started tomorrow right here in this building.

All the Premier has to do is announce that he is prepared to go ahead with an inquiry now, give it broad terms of reference, and we can begin to get to work on the Columbia.

If there's any one single thing that will be of greater benefit to British Columbia than a renegotiation of the Columbia, I don't know what it is because what we can get out of the Columbia renegotiation would be far more than what we could get out of an increase in the price of natural gas. The stakes are that high. We should get on with the job and we've got to focus the public spotlight on it before we can get Ottawa to begin to pay some attention to what their responsibilities in this matter are.

I hope that the Premier can give us more encouraging news about future borrowing. I quite understand that with the enormous commitments of B.C. Hydro we're going to have to borrow from private sources, but I don't like this business of borrowing from the Arabs. I hope we can go to the people of British Columbia and Canada for our borrowings in the future.

HON. MR. BARRETT: I know it wasn't a deliberate oversight. You know that we went to the Canadian people for $75 million — $25 million of it was for 7 years; $50 million of it was for 25 years. There's a limited amount that we can raise in Canada, but we did raise that. I know it was an oversight on your part. You knew that we had gone for that $75 million. So when you said that we had not gone to the Canadian market, it was purely an error on your part. Just an oversight. I appreciate that because I know you wouldn't want to leave the impression that it was anything other than that.

Secondly, I want to spend a couple of minutes very carefully on what you're saying about a legislative committee. Unfortunately, you weren't here earlier when I mentioned the Commonwealth Trust, and that at that time we had set up in the House a commission of inquiry, but the people named resigned.

Mr. Member, you made a statement today that I think was unfortunate. We are looking for competent people on a non-political basis to give us an inquiry on the Columbia River. I don't want that jeopardized by an intemperate statement that somehow we're looking for politically motivated people, because that's not so.

Now you talk about the legislative committee. You, yourself, on occasion have said time and time again, when the matter suits your fancy, that you don't want a legislative committee because there's a

[ Page 680 ]

government majority on it and that would be political. But, on the other hand, you wouldn't mind the legislative committee on this, because politically it looks pretty good. Now, Mr. Member, you can't have it both ways. I know that when you're in a minority party position you can take any position you want; but that doesn't do you much good in convincing people in here, and I don't think it'll gather votes out there.

We need to find someone who is professionally recognized and publicly recognized as being as non-partisan as possible and as competent as possible to do this inquiry for us. I would hate to think that intemperate statements made in the House will limit that field for us. I think that that did cause us a problem in the Commonwealth Trust case, and we never did get the inquiry because of that. You will recall that the commissioners resigned, and the government of the day never went through with naming new commissioners. They never did. They got off without any public record on the Commonwealth Trust, because those commissioners — and I don't question their motives at all, which were probably of the highest — walked away because of the political atmosphere.

Now the question of the Columbia River treaty: there is no question in my mind that the essence of your remarks is correct. We were badly taken in the Columbia River treaty. We were warned by General McNaughton. We were warned by others. Mr. Member, you'll recall that some of the most thoughtful, exciting, irrational and rational debates in this House were round the Columbia River treaty. The government of the day was hell-bent-for-leather to get that treaty through. It was politically motivated. It took a calculated risk. It did not consider inflation as a factor. And all the warnings that came from the Liberal Members — some of the Liberal Members — and the CCF/NDP Members of the day came true.

George Hobbs died, you'll recall, on the eve of the continuation of that debate. If you go back and read the newspaper accounts — because we did not have a Hansard then — time after time after time Members of this House, especially Ran Harding, got up and warned and warned and warned what was going to happen. Harding even predicted what the Members touched on today that is most valid: the Americans are getting an increased cost benefit. There are secondary and tertiary benefits from that electricity that will plague us and our economy for another two generations. The fact that they were able to develop downstream economically viable industries at the secondary and tertiary level beyond the same kind of resource market that we had gives them a far greater opportunity to stabilize their economy — out of our power! They were able to build a base throughout the whole Columbia valley. Secondary industries that are year-round producers do not rely on cycles of world markets in terms of our mines and our forests. That wasn't looked at by the former government. There was inadequate research. It was a great, hoopla move to commit us to development at any cost.

I asked the Prime Minister — I begged the Prime Minister — on behalf of the people of this province, to use his good office to ask the Americans to renegotiate the Columbia River treaty. My first meeting with the Prime Minister was to discuss this issue. And after discussion with the Prime Minister, he told me that he would not initiate a reopening of that treaty. The only avenue left to us was through the B.C./Canada accord, and it's very limited. We have spent our time, since that rebuff from the Prime Minister, trying to use the B.C./Canada accord as a subsidiary of the Columbia River treaty as an avenue of renegotiating. Mr. Member, if you have any influence at all with the Prime Minister of this country, I ask you, on behalf of the people of this province, through the Liberal Party, to ask the Prime Minister to reconsider his position and go along with asking the Americans to reopen that treaty.

AN HON. MEMBER: He has no influence.

HON. MR. BARRETT: He has no influence? I think he has. He's a prominent member of the Liberal Party. Next to him is the Liberal leader. Behind him is a man who was in the Prime Minister's office. Get together and get on the phone and say: "For the sake of British Columbia, take up that treaty, Mr. Prime Minister, and help the people of British Columbia." You do that and you'll be doing a great service to the people of this province.

Mr. Member, there is no doubt that Hydro is faced with massive expenditures over the next few years. You're absolutely correct. We have the capital commitments to Site 1, to the Pend-d'Oreille, and we have commitments to transit and other services. Those costs have to be borne by the people of this province. Thankfully, we are in a position where we can be competitive over the long haul in meeting the costs out there in that world of borrowing. I don't like to stand here and talk about the Columbia River. I don't. I sure don't like the idea of the chickens for that deal coming home to roost when we're in government.

AN HON. MEMBER: How about the chickens and eggs?

HON. MR. BARRETT: Mr. Chairman, I wonder, almost wistfully, how the bombastic former Member for Kamloops (Mr. Gaglardi) would have handled this debate if they were still in government and the facts came out about the Columbia River treaty. What would they have said? Thankfully for that group over

[ Page 681 ]

there, only one or two of them were around when that vote took place.

Every child and every child's child in this province will be paying for generations because of that stupid deal made by the Social Credit government. I make the appeal again to the federal Prime Minister to help us in re-opening that treaty, if we can, to renegotiate it. Even the Americans are embarrassed by the heritage that we were left with out of that treaty. And that treaty was signed purely for political purposes. It was a dream of the former Premier (Hon. Mr. Bennett) to announce a two-river policy. That's why he sold out to the Americans.

None of us can eradicate history, but let's be careful in terms of how we handle it, getting all the facts out. A legislative committee would not do it, Mr. Member, and you know it and I know it. There are politicians in this House, Mr. Member, some who never forget it, some who take that into committee activity with them. I'm not naming names, but there are very few non-partisan MLAs in this House, Mr. Member, very few. It all depends on whose ox is being gored, and I'm telling you that a public inquiry with a publicly recognized commissioner is the only way to go. If you can give us any help to get the Prime Minister to change his mind, I'd welcome that.

MR. McGEER: Mr. Chairman, I have no influence with the Prime Minister. I think the Premier has, and should have quite properly, because of his office. But certainly I'm sure that I and my Liberal colleagues would give any support at all that we could to the Government of British Columbia to move for renegotiation of the Columbia River treaty.

It seems to me, though, Mr. Chairman, that what we're lacking on this side of the House, and what the government can provide, is the sort of detailed engineering information that would allow us to put our impressions much more quantitatively. When I talk about $100 million, I'm talking largely on the basis of reports that were prepared by the Americans in the late 1950s which indicated the alternative cost to them of providing thermal peaking power as opposed to what it would cost them to install Hydro peaking power with upstream storage in Canada. Those kinds of figures need to be updated because the Americans have not followed through on the plan of construction that they proposed at the time the Columbia River treaty was originally negotiated. Certainly, that's going to alter substantially the kinds of economic arguments that Canada would need to put forward.

What we need to have, Mr. Chairman, in my view, is a detailed case presentation. Sooner or later, this is going to be required. Why don't we do our hard study now? Why don't we collect all the facts and figures and then, when those are assembled, take to the Prime Minister and to his cabinet in Ottawa the kind of compelling argument from British Columbia that just cannot be refused?

You don't go down trying to wield political influence, whether you're a Liberal or whether you're an office holder, but you go down with a hard case in facts and figures where anybody with common sense would have to look at it and say: "This must be responded to." That's what we need to take down to the Prime Minister, and I for one would be the first to want to hop on an airplane with that kind of information to build our case.

HON. MR. BARRETT: Mr. Member, we did take hard information with us to Ottawa. We took information that you used publicly. You've already come to the conclusion that it should be renegotiated, without the kind of detail that you're now asking for. You are aware of the information that is at hand that has led you to this conclusion where you've even said — and I don't want to quote you too extensively — that we lacked the "guts to pursue." You've got a firm conviction on information that you already have that there needs to be renegotiation, but you are altering it today by saying: "Well, we need to put the facts down." You already have knowledge....

Interjection.

HON. MR. BARRETT: Intercede? You mean you were interceding without facts before, Mr. Member. Are you telling us that you arrived at your decision...?

MR. D.A. ANDERSON: You have, and that's what was requested.

HON. MR. BARRETT: Well now, there it is. You want the best of all possible worlds. Your Prime Minister has refused to give us any indication that he would reconsider opening that treaty. He said "absolutely not" to me. The only avenue left was the Canada-B.C. treaty agreement, the sub-treaty. There's very little meat in there for us to have a go with Ottawa, and that means us fighting all the way and not getting down to the nub of the problem between us and the Americans. If the Prime Minister of this country would give us one signal, one plan, one message, that he was interested in any way in receiving a proposal that he would carry forward to the Americans, we would be happy to meet him. But he has not given us that indication to this very moment.

MR. McGEER: This is just a little bit of the chicken and the egg, but frankly I wouldn't go down to Ottawa to try and prepare a case for a delicate international negotiation, whether it involves natural

[ Page 682 ]

gas or whether it involves power benefits, without doing the maximum research and preparation that a government can produce for that kind of thing. This is the way Quebec and Ontario always win their cases with Ottawa. They go down with greater detail and they go down with the kind of hard preparation that's never been the practice of British Columbia to provide.

HON. MR. BARRETT: Ha! Syncrude.

MR. McGEER: I'm suggesting to the Premier that we change our ways from political bombast to facts and figures, and that we should right now have teams of people in Hydro preparing the kinds of cases factually that can be promoted politically.

If we've been rebuffed by Ottawa, I quite accept what the Premier says. That would be the first reaction of any Prime Minister of any political stripe: "Don't give me that headache." Fine. You say: "Well, that's not good enough an answer." Then you would go and prepare an even better case and go back and try again. If that fails, you come and prepare a better one and go back a third time, and a fourth time, and a fifth time, until you get it done. But each time in between you don't lie down and whine. You prepare a better case.

HON. MR. BARRETT: Mr. Chairman, I get the distinct impression that the Member is bordering on being political.

Interjection.

HON. MR. BARRETT: Partisan. Okay, that's acceptable.

Mr. Member, don't tell me or this House that the federal government acts on an adequate research base before they make energy policy. Oh, how did Syncrude win the sellout?

AN HON. MEMBER: Why didn't we invest?

HON. MR. BARRETT: Well, did we have the opportunity under a public corporation? The answer is no. I made a speech in Montreal over a year and a half ago asking for public ownership of all oil and gas in this country. Then we're given the spectacle of the national Minister of Energy, Mines and Resources (Hon. Mr. Macdonald) on television saying: "I'm waiting for the phone to ring from the oil companies."

Interjection.

HON. MR. BARRETT: Oh, tch, tch, tch. Syncrude was a bigger sellout than the Columbia River treaty. Have you got any research that you want me to take back on that deal, Mr. Member?

MR. D.A. ANDERSON: Leave that to Alberta and Ontario.

HON. MR. BARRETT: Leave that to Alberta and Ontario. It involves every single Canadian, just the way the Columbia River treaty did.

Interjection.

HON. MR. BARRETT: What's that? We'll come out in a commission and we'll tell you how much money we lost on the deal.

Interjection.

HON. MR. BARRETT: You don't want to know that, eh? Oh, you know, Mr. Member....

MR. D.A. ANDERSON: You've asked us to intervene but you won't give us the facts.

HON. MR. BARRETT: List all the questions and I'll give you all the answers. What do you need to know? I'll give you a copy of the treaty. I'll tell you how much money we owe and how much we lost. You know what they'll give you, Mr. Member, in response. Oh, you used to be a federal MP. Look what they've done to you already. They dumped you out here and left you in this wasteland for the Liberal Party — and you want to go back again? (Laughter.) You want to go back again and be rebuffed the way you were the first time? You don't learn.

Now, look, we're prepared to have the federal government renegotiate that treaty. We're prepared to have a go at it again and again and again. But when the Prime Minister tells me no, then I think he means no. If you get an indication that he's changed his mind, you let me know.

MR. BENNETT: Mr. Chairman, earlier I was pursuing a point which might have got a little lost. It was over whether this province had the capability of deferring its financing issue last fall. I asked the question, and I question it because obviously the Premier has announced we will be doing a lot of external financing for Crown corporations. It is important to the people of British Columbia to know how the decisions are made to go to market, the timing, when we go to market, who is making those decisions, whether we have the capability to pick our spots, whether we have the capability to defer issues in the public market until we get a favourable rate.

The question I asked the Premier earlier was whether we had that capability to defer the issue in the fall of 1974. I've said that many, many bond issues were contemplated by both the private and

[ Page 683 ]

public sectors. Not all of them were forced to go to the market; many of them had the capability of deferring their offerings. One example is the First National City Bank, which is an institution that does a lot of financing but traditionally, because of their formula, has been bang on in predicting interest rates. There were many, many issues that were deferred by those institutions in the private sector and perhaps some in the public sector that had the opportunity, the flexibility and the financial position to defer going to the market at that time.

I think in the Premier's answer was the admission that British Columbia indeed had the flexibility and was financially capable of making the decision at another date. In view of the fact that there was a considerable body of opinion of those who had offers ready to go to the bond market, of financial institutions that deal regularly in the bond market, that many of these institutions both in the banking industry and in the financial industry were publicly predicting a decline in interest rates.

Knowing that the Finance department is growing — it has been announced that they have a new adviser, Mr. Eliesen — knowing that they had the public financing to provide the experts to research such a decision, if the Minister of Finance was not forced to go to the market, I think it is up to the Minister of Finance to let us know on what research and on what study it was indicated that we should go then.

If we have the ability to withhold such an offering, in light of the fact that many institutions, such as First National City Bank.... I could bring in numerous financial bond house information magazines and letters and papers from July, August and September of last year that were giving advice for those areas. The advice was that those in both the public and the private sector that could withhold their offerings do so because in the money market at that time it was an inappropriate time to go.

I want to know how these decisions are arrived at in British Columbia if we had the capability and if we were in a position of not having to go, because it's in our interests to know how these decisions are made. Right now it has been indicated to this House that we are going to the market for a considerable amount of money.

I think the history of this loan, this $100 million through The First Boston Corp. clearly indicates to us, the people of B.C., that perhaps the Minister of Finance, if he is not making the decision in isolation, was taking poor advice. If he had the capability of deferring that decision for a more favourable market all current advice at that time, or most current reliable advice, would indicate that he do so. The fact that he didn't do so has cost millions of dollars, and will cost millions of dollars through the 25-year period of this loan, to the hydro users who in their rates will have to pay the cost of this extra interest of 1.375 points between last September and this month.

I think it is important that British Columbians know how and on what basis the government researches when we have the flexibility and capability of deferring decisions. I don't want to think that British Columbia is in the same position as some corporations. There are some places that have no alternative — they are starved for cash and have to go.

We have been able to, I believe, predict the amounts of cash flow needed for these corporations in the past, and it was provided in advance by issues. I know that this is the sound way to go. There is some latitude, however, and when you have that flexibility, certainly when you're fortunate enough to be in a position of marketing those securities for a wealthy province like British Columbia on behalf of someone like Hydro and get the best possible interest rate.

That money is expensive. That money is costing us dearly. We see it now but there's been a lot of talk in this Legislature about hindsight. That hindsight goes back to 1964, but I am talking about six months.That isn't so much hindsight as being aware of the current and being able to predict the short- and long-term market on financing.

I am not asking for hindsight because we've been in a volatile market and there is a historical picture on bond financing that can be used. There are analysts who advise clients, and those analysts who advise clients who have that flexibility were advising them in the fall of 1974 not to go to market. Even in many of the private sectors — those places that aren't as fortunate as this province to have the flexibility — many were forced to go to the market and some of them were recalled because the market couldn't take their issue. But British Columbia and our Hydro in this province, certainly by the Premier's own admission, did have the ability to defer the decision.

Secondly, when we are dealing in the area of public finance and public borrowing by the Minister of behalf of the corporation, I believe that all loans and all borrowings should be dealt with in the same manner.

Now when we had a prospectus filed when we dealt on our first loan through The First Boston Corp. — among others, Salomon Brothers and other taking lead for the underwriting — I believe that we should also have available to the House and to the people of B.C. a copy of the prospectus on all other borrowings.

So far we have borrowings from an unnamed source on which we would like to have the prospectus available to the people of the province with the details of the borrowing — the name of the lender, the amount of the interest rate....

HON. MR. BARRETT: Any prospectus we issue is available.

[ Page 684 ]

MR. BENNETT: Is the lender's name on that prospectus? On the details of any financial borrowing on behalf of the Province of British Columbia or its Crown corporations, when you are dealing with $100 million from an Arabian — or a mysterious source....

Interjection.

HON. MR. BARRETT: You don't know what you're talking about.

MR. BENNETT: There should be a detailed accounting to the public similar to those borrowings that go on in a prospectus that deals with the same as were handled by The First Boston Corp.

Let me tell you that The First Boston Corp. handled the second $100 million and that the Premier....

HON. MR. BARRETT: You're worse than I thought.

MR. BENNETT: Are you through? If the Premier will listen, he doesn't realize that he has an obligation to tell the people of the province who they're borrowing from and all of the detailed financial information such as would be in the prospectus on the first $100 million borrowing. This is the people of the Province of British Columbia who are liable to pay back this money, both in a guarantee and as the users of B.C. Hydro. It is unusual for any government body not to disclose the source of the lender and not to provide that information to the House.

MR. PHILLIPS: Where is it? We want to know.

MR. BENNETT: Will the Premier provide that information to this House? Will the Premier provide, as Minister of Finance and fiscal agent, that information that would normally be found if we were doing a normal public financing, a financing in which all the details are available to the people of the province? We're the borrowers, not the Premier. We're the borrowers. He's taking the attitude that: "I know what's good for you, and I'll tell you that it doesn't matter who you borrow from. Trust me." That attitude isn't good enough.

You're dealing with the public of British Columbia. You're borrowing on their behalf, and we should know from whom we are borrowing and the details of all borrowing, similar to any such other public offer, yet we haven't had that information made available. We have no explanation, except a lot of shouting, as to what basis the government went to the market last September on behalf of Hydro.

The opposition is asked to predict the interest rates for the government. Presumably you're unsure of how to achieve the best possible rates, but I think we need accountability for the financial transactions that have happened and the reasons so that we will be assured that we won't be taken on excessive interest when this province doesn't have to go to the market — when we have the flexibility not to have to go, we won't be taken again on excessive interest such as this borrowing of last September.

HON. MR. BARRETT: Mr. Member, you're certainly entitled to know who our advisers are. We have exactly the same advisers the former government had.

Interjection.

HON. MR. BARRETT: Yes, you did. If you'd do a little research...

MR. PHILLIPS: Do you advise them?

HON. MR. BARRETT: ...they're available publicly. He came after that loan was negotiated. You don't even check those facts. Mr. Member, for your information, just go to the library....

MR. PHILLIPS: What about Gaffney?

MR. CHAIRMAN: Order, please.

MRS. JORDAN: What about Peter?

HON. MR. BARRETT: Do you want information or do you want to look like babbling idiots?

MR. CHAIRMAN: Order, please!

MR. PHILLIPS: You didn't have Gaffney.

MR. CHAIRMAN: Order, please! I would point out to the Hon. Member for South Peace River (Mr. Phillips) standing order 17(2), which requires that no Member interrupt the person who has the floor.

HON. MR. BARRETT: The Leader of the Opposition asked who the advisers are in New York. We have the same advisers that the former administration had, except for two minor changes — the same group of advisers. We use the same bank that has been used by your government before — and all previous governments in British Columbia. That's a matter of record. That information is available in the library — that's where I got if from before, and that's what we have now — the same New York group. If you don't agree with that, just check it out and do some research. There are two changes made, but it's essentially the same group advising us in New York that the Socred administration had.

[ Page 685 ]

That's true, and there's nothing you can say to change that. It's a matter of record and I'll give you the whole list: Kuhn and Loeb, the whole works.

Interjection.

HON. MR. BARRETT: They're the same ones that your Dad used — the same advisers.

Okay, No. 2. We had the flexibility and we took $100 million in short term. The advice we had at that time from the group was not to go at 11 per cent. We picked it up in short term; we used our flexibility. We went at 10.25 the same time Ontario went at 10.25, with the same advisers, essentially, as the former government had.

We go when money's available and when they're not jammed up in the market. The same people who spoke and met with your father met and spoke with me in the same office. Do you want the names? They're all available.

We did defer the $100 million, as I said, to wait for the rate to go down to 10.25. December was a month when everybody was advised not to go; we didn't go in December. Our own advisory group that we inherited from the former administration said not to go.

MR. BENNETT: Who mentioned December?

HON. MR. BARRETT: You mentioned December.

MR. BENNETT: September.

HON. MR. BARRETT: You mentioned December as well. So, Mr. Member, there you are. The New Democratic Party government is using essentially the same New York advisers used by the former administration, with two minor changes.

MR. BENNETT: The Premier is confusing the underwriters as advisers. These are the people who underwrite the loan, who get a commission....

HON. MR. BARRETT: They're a management syndicate.

MR. BENNETT: Just a second. They take a commission for providing the money — underwriting the money. But to make the decision to deal with them at that particular time, the Premier and Minister of Finance takes financial advice from within the department in the province.

These people are people who collect a commission for the underwriting. I am asking about the people who advised you to go then from within your department — people who are closest to your ear. I am not talking about the people who would love to see you go.

HON. MR. BARRETT: There he is sitting right beside me. He's served this province faithfully for many, many years.

MR. CHAIRMAN: Order.

MR. BENNETT: I'm wondering if they are because of the advice given at this particular time. It's a time when many people who are financing, either in the private or public sector — if they have the capability — were advised not to go. This doesn't seem to be in keeping with what would happen in an area that had that flexibility. Yet I see that the province went on behalf of Hydro. I can't believe that it is these same people making the decision. I can't believe you can say that just because the underwriters who collect a commission say it is time to go.... That's like a bank turning you down for more business. They want all the business they can get. I'm talking about the unusual circumstance of the province going on behalf of Hydro at a time when both the private and public sectors, if they had the flexibility not to go, were advised not to go. It seems unusual to me that British Columbia would go on behalf of Hydro at a time contradictory to a lot of the best advice that was available, and palming it off on the fact that any large issue or underwriting usually contains the names Salomon Bros. and A.E. Ames and First Boston Corp. Those are underwriters. I'm talking about the advice from inside your department that tells you to go. You are the one who knows if you have the flexibility. They only underwrite for you after you have gone to the market.

HON. MR. BARRETT: Mr. Member, if you are in any way attacking the Finance people whom I inherited from the former administration, you should be ashamed of yourself. You should be ashamed of yourself!

Interjections.

HON. MR. BARRETT: Mr. Chairman, I have the floor.

MR. CHAIRMAN: Order, please.

HON. MR. BARRETT: Mr. Chairman, I take the advice of the management group that I inherited from the former administration, the same Finance staff that the former government had and the same Deputy Minister of Finance. I will not stand for that kind of innuendo. Not a bit of it! Not a bit of it! If you are suggesting, sir, in any way that my staff are incompetent, then I say that you are a disgrace to this House.

[ Page 686 ]

AN HON. MEMBER: He is ruining the office!

MR. CHAIRMAN: Order, please.

MR. BENNETT: It is hard, Mr. Chairman, to get an answer. We fall back on the silly buffoonery of the Minister of Finance every time he gets in trouble. In no way was I attacking people who have served this province well. But this Minister of Finance is accountable. You are the Finance Minister of the province. Stop trying to duck behind your staff. You are the one who makes the final decision to go to the market. You are accountable. And you have wasted millions of dollars on behalf of the people of this province.

HON. MR. BARRETT: Oh!

MR. BENNETT: What a coward to duck behind your Deputy! What a coward!

HON. MR. BARRETT: Oh!

MR. CHAIRMAN: Order, please. I would ask the Hon. Leader of the Opposition to withdraw the word "coward" as applied to another Hon. Member.

MR. BENNETT: I will withdraw. But it is unusual to see people set up another target for the blame when they are accountable. When they are accountable!

HON. MR. BARRETT: Oh, oh!

MR. BENNETT: He's great for taking the credit for the taxpayers donating $3 billion. He's great for taking credit for that. But in no way will he ever be accountable. To suggest that the responsibility is that of his staff because he can't explain going for an extra 0.3 per cent...

HON. MR. BARRETT: Oh!

MR. BENNETT: ...who can't explain why this province is saddled with a loan of $100 million when six months later it could have saved 1.3 on a percentage and could have saved this province millions of dollars.... It's shocking that the Premier has to try and hide behind his staff.

HON. MR. BARRETT: The ultimate decision is mine. If you read what the Leader of the Opposition said, he wanted to know who my advisers were. That's what his question was: "Who are your advisers?" When I told him who my advisers were, he decided to say: "You can't hide behind your advisers." That is exactly what you did, Mr. Member. You said in this House that you read the Blues. You don't even remember what you said, you are so wrong. You are so mixed up, Mr. Member, that you don't even remember from one minute to the next.

MR. PHILLIPS: You don't know a grant from a loan.

HON. MR. BARRETT: You said very clearly in this House that you wanted to know who my advisers were. I told you who my advisers were. Then you said that they are on every prospectus. The management team is the one we inherited from the former administration. Then you weren't satisfied with that and you said: "Who are your advisers in the Finance department?" I told you who my advisers were in the Finance department and you weren't satisfied with that. I tell you this, Mr. Member, or Mr. Boy Wonder, or whatever it is....

MR. CHAIRMAN: Order, please. It is proper to address a Member by his highest title in the House. (Laughter.) I would ask the Hon. Member to refer to him by his title.

HON. MR. BARRETT: Yes, Mr. Chairman. The Hon. Leader of the Opposition, in a non-nepotistic approach, wanted to know who the advisers were to this government. I gave a non-nepotistic answer by saying that the advisers were in New York — the management team we inherited from the former administration, with two minor changes. Then he asked and I named the same staff who advised in the previous administration. Then he got up and said I was hiding behind my advisers when all he asked for was the name of my adviser.

Now I'm telling you that with the best advice available I made a decision, and the advice given to me at that time was to go. You asked me who gave me the advice and I told you that. But to give us a sham and a mock sense of semi-hysteria in response is little becoming because you haven't done a bit of research to find out who these people were. Then when I give you the information you want, you're not satisfied by me giving you that information.

MR. CHAIRMAN: The Member for North Vancouver-Capilano.

MR. GIBSON: I'll defer.

MR. BENNETT: Just to briefly end this exchange, I asked the advice because I questioned the decision that was made. I can't believe that this decision would be made. At that time, in asking that, before I had a chance to respond, the Premier and Minister of Finance comes out with this wild charge that the staff was being attacked. No way.

The final decision is the Premier's. Who knows

[ Page 687 ]

where he gets all of his advice? Who knows if he's like some Prime Ministers of Canada and looks in a crystal ball? I can't believe that he got that advice from anybody who knew British Columbia's position and the flexibility we had. I think the Premier as Minister of Finance has to take the accountability for making that decision; he can't hide behind anyone else. It was his decision.

I believe the province will spend millions of dollars in extra money for those who are Hydro users, for citizens of B.C., because of this load. It's obvious that the money market has dropped. Anybody who can see the change in just six months knows that we have paid too much and that we'll be paying too much for 25 years. We'll take that story to the people of the province.

HON. MR. BARRETT: To the official Leader of the Opposition, let me tell you very clearly that I took the advice of staff I inherited and the management group. If you're trying to tell this House that that's not the advice they gave me, then I say, sir, you are wrong. You are wrong. If I made the wrong decision, I take the responsibility for that. But don't you tell me that my staff are not giving me the best possible advice they can give. That's it.

Interjection.

HON. MR. BARRETT: You left the impression that somehow I acted against advice I got. That's what you're trying to leave in this House. I'm entitled to make the choice ultimately on the advice I get, but I don't want anyone in this House to leave the opinion that the advice I got was wrong. I make that decision.

I find it absolutely shocking to be faced with that kind of attack from the Leader of the Opposition which is, in my opinion, a smear on staff. I take the responsibility for making the decisions, but don't you stand in this House, Mr. Member, and tell me that I'm not following the advice I got. It's a direct smear on staff and I won't stand for it.

MR. BENNETT: Don't hide behind your staff.

MR. GIBSON: Mr. Chairman, just a couple of brief questions at this point.

I'm interested in this shadowy $200 million that we have a little difficulty in knowing exactly where it came from.

MR. BENNETT: Shocking.

MR. GIBSON: Somebody over there said shame. I say it's a shame that we don't know where it came from.

Interjection.

MR. GIBSON: There were some nice folks who lent British Columbians about $100 a head. Why can't we know who they are, Mr. Premier?

How was it arranged? Was the Deputy Minister of Finance (Mr. Bupon) walking home one evening and somebody with a burnous jumped out from behind a tree and said: "I've got some money for you"? Who was it arranged through? Exactly what commissions were paid to whom?

At the bottom of it all, why can't we know? How do we know that this money hasn't been somehow laundered through Swiss banks? How do we know that this is money that British Columbians would be proud of the source thereof?

HON. P.F. YOUNG (Minister of Consumer Services): Are you an expert on laundering money?

MR. GIBSON: That's why it seems to me we have to know. A public loan is different than a private loan. A public loan is a loan that each one of us in British Columbia owes to some mysterious person or foreign power.

Now I know that the Premier has told us that we can't know because that was part of the deal. But I say, why was that part of the deal? Why was that deal so good that we had to accept a condition which, I think, is improper in any public borrowing authority?

HON. MR. BARRETT:...acknowledge that the first one was arranged through First Boston, our traditional bankers for over 80 years for the Province of British Columbia.

AN HON. MEMBER: Over 100 years.

HON. MR. BARRETT: First Boston has been handling our banking all this time. They arranged the first one. The second one was White Weld of New York.

MR. GIBSON: No other finder involved?

HON. MR. BARRETT: No other finder involved. I know that someone has said publicly that he was a finder. That is not, indeed, a fact.

MR. GIBSON: We still didn't get an explanation from the Premier as to why this deal was so good that of the many sources in the world where British Columbia might borrow money, it had to be borrowed from someone who is mysterious, whose identity could not be revealed. It raises questions. I ask the Premier why he thought it necessary to go for this particular deal and have those questions raised from an anonymous lender.

[ Page 688 ]

HON. MR. BARRETT: The Boston corporation approached us. We were satisfied with the intermediary, Boston in this case, who, as I say, we have been dealing with for over 80 years through the province. It is an Arab nation. They asked, for their own reasons, that they not be identified and we are respecting those reasons. The rest of the deal is known and has been known publicly since it was announced.

MR. CHAIRMAN: The Hon. Member for Oak Bay...oh, the Hon. Member for Saanich and the Islands.

MR. CURTIS: I defer, Mr. Chairman, but I am glad I finally attracted your attention.

MR. WALLACE: I've listened very carefully to the long discussion about one particular topic this afternoon. Something really amazes me when I read journals and newspapers. This is not much help to debate because it's purely non-partisan, but it seems to me that if there is one group of professionals in our society who have great difficulty in making predictions, it's the economists. You read 100 different economists and you get about 10 different answers as to the economic viability of our monetary system, or whether we're in a recession or a depression, or whether we're pulling out of a recession, or whether we were ever in one, et cetera.

It really amuses me that we spent a long time in this House today debating whether or not somebody can predict what the interest rate will be six months from now. I just wish I could get somebody to tell me that, if it's such a simple matter, because I'm sure each of us privately could probably do a lot better with our investments than we are doing at the present time.

Interjections.

MR. WALLACE: Anyway, I just make that observation, because regardless of whether we've made good or bad decisions, it would seem to me that it's certainly anything but the clear-cut, black and white situation that's being thrown back and forth across the floor.

However, as I've said in an earlier debate, I would hope the Minister would expedite the inquiry into the Columbia River treaty controversy for the simple reason that enormous sums of money are involved, and the public of British Columbia are entitled to know from an objective inquiry, a non-political inquiry, what the facts are. I wonder if the Minister could at least give the House some idea of when this inquiry will be undertaken.

I'd like to turn away from some of the issues which have been touched on today and ask the Minister on some other subjects which were raised in the throne speech, and which intimately affect his department.

In particular I'd like to learn if the Minister can give the House some more information about the new proposed financial institution which he is very eager to set up in this province. We feel that any such institution which will improve the amount of financial decision-making that can be taken within our own province, particularly any decision which will make more money available, particularly mortgage money, is certainly very much to be desired in British Columbia particularly because of our housing problems.

But one of the statements which was included in the throne speech regarding the new financial institution gave us a little concern. The Minister states that it would be used to process certain government business and government bills. Although he's putting forward the concept of such a financial institution to help the little guy, we would like to know to what degree various arms of government will be using this new financial institution and, for example, how much of the business of some of the Crown corporations or Dunhill of ICBC will be channeled through the new financial institution. It seems to us that if that's done to any great degree, the little guy will soon get lost in the enormous financial institution which will develop, and the basic purpose for which the institution is proposed would suffer.

The other question we would like to ask is related to the Minister's statements in public about the involvement of a credit union. We certainly have no objection to credit unions being given an encouragement to contribute more to the financial institutions in the province. But if they're to be put in some preferred position along with a government-sponsored body, we would like to ask if there is not a serious conflict of interest to arise in that we have the credit union existing on the one hand in the private sector competing with other private enterprise, but at the same time being incorporated or involved in the new institution and obtaining certain benefits in that regard.

The Minister has also implied, I believe, that this would be a non-profit institution. One wonders whether....

Interjection.

MR. WALLACE: Well, we're very happy to make the Minister shake his head and deny that because we feel that, indeed, it should be an efficiently run, profit-making institution in competition with other banks and similar financial institutions and that if in fact it is to operate on any system of subsidies, the interest rate should be marginally lower than offered by other banks so that we may hopefully create the

[ Page 689 ]

most strenuous competition possible.

We would also like to ask if we could be assured that this new financial institution will provide a full and detailed accounting of figures in a way that we can make ready comparisons with the existing private enterprise institutions with which this one would be competing.

We also hope — and this perhaps relates to some of the area we've been in in debate earlier this afternoon — that if the new institution could provide service in obtaining funds outside of British Columbia, and if the fees earned could be earned here rather than in some of the centres that have been described this afternoon, we would like to know whether this is one of the essential ingredients of the institution that the Premier plans to set up.

There are so many questions about this new financial institution that perhaps the Minister would prefer to wait until the bill is introduced. But these are some of the questions that people are asking. I think, since the government is likely to be deeply involved by providing guarantees of one kind or another, guarantees of the people's money, that we should hopefully have all the information possible before we are asked to support such legislation.

The Minister has also committed himself to an election expenses Act, which presumably will involve some measure of funding of elections by the government, whatever government is in power, and that it will also involve possibly tax credit. Certainly we feel, in the way the democratic process has evolved and the way in which the elections have been fought in the past, that the time is long overdue to implement some of these proposals. I wonder if the Minister would care to comment on the whole question of whether or not, in fact, this government agrees in principle with the provision of funding from the state and ceilings on spending, or whether the essential improvement, and the only one we can expect, is some method of disclosure. We would think, while disclosure is vital, that we've moved far enough in this field, federally at least, that the example has been set for this province. We would hope that there would not only be limits on spending and disclosure, but that there would be government funding as well as tax credits.

Looking at part of the Minister's statement in the budget, I think that we should just comment on the table on page 25 and ask the Minister to comment. On page 25 we have a comparison of the new 1975-76 B.C. rates with the old rates for Alberta. I just think it should be made clear that before the printing of the budget Alberta lowered its corporate and personal income tax to a level well below British Columbia. In other words, the personal income tax in Alberta is now 26 per cent. This may seem a small point, but it ties in with the position we take in this House that with the budget surplus which was described as being available we could better have followed the example of Alberta by introducing an income tax cut, which would more readily have put money back in people's pockets, particularly the low-income earners, giving them some real weapon to minimize or mitigate in some respects the effects of inflation. We feel that a tax cut does stimulate the economy, and it certainly doesn't cost a nickel to distribute this kind of benefit. You just stop taking it out of the taxpayers' pockets in the first place.

We would also like — at the risk of being repetitious — to talk just for a moment about the Minister of Finance's policy regarding the aid to municipalities. We've had a great deal of discussion about the revenue to be derived from the sale of natural gas, and we don't have to go into all the details again. But I do feel at this stage in the game, after the Premier has had the opportunity to realize the very great distress among the municipalities in attempting to budget, that he might, even at this late date, give some basic minimum commitment of revenue which he believes will be available and which he would guarantee to be available. The figure of $20 million seems to have been a minimum figure that's been mentioned in many of the reports.

I wonder if the First Ministers' conference in April is to be on the same scope as the original conference which dealt in such detail with the whole question of natural resources in Ottawa a year ago. Perhaps the Minister would care to mention to the House what the format for that meeting will be and whether, in fact, as on that occasion it will be possible for leaders of the opposition parties to be observers at that conference.

I gather that the Minister of Finance feels he has a very definite commitment from the federal government. Yet it's quite clear also that if that commitment, in the view of this Minister of Finance, is in anyway welched upon it could well be the election issue for an election to be held in May. While it certainly isn't this Minister's choice as to whether the meeting should be open to observers, I think that since we are all preaching open government these days and since it would certainly help the people of the province to get the facts very clear and straight in their own mind.... This is going to be an extremely important conference when the provincial Finance Ministers meet in Ottawa. Certainly, as far as we're concerned in British Columbia, the outcome might be a heated election based on that one issue. I think it would help if we could all have the opportunity to get the facts and figures straight from the word go.

The only other points I would make in general, Mr. Chairman, in looking at this Minister's estimates — the Premier's office and the Minister of Finance — there seem to be very substantial percentage increases in such matters as travel and office furniture and contingencies of one kind or another. Incidentally,

[ Page 690 ]

talking about furniture, I'd certainly like to make the position of the Conservative Party very plain. Nobody's gone out of their way to do any lavish furnishing in my office. We have an old patched-up carpet with a hole in the middle. I am not complaining about that — we didn't have an office a few years ago — but the fact seems to be widely understood in the news media and across the province that the politicians are really living it up in great style. I just want to put it on the record that the Conservative leader, while not complaining, would want to make it very clear that I have an old carpet with a hole in the middle and very ordinary furniture.

I also have the privilege of approximately four pipes at my left elbow which run from ceiling to floor....

AN HON. MEMBER: I thought you liked to pipe, Scotty.

MR. WALLACE: Oh, not that kind of pipe, Mr. Member. The kind of pipe that helps me to monitor the bowel and bladder habits of the people in the Department of Housing, as a matter of fact.

Anyway, I think that's a small point, but the fact is that when we look through the estimates, particularly in certain of the departments, there are some very substantial increases in some of these items and I wonder if the Minister could tell us whether he really means to spend all that money on these particular items I mentioned, such as travel expenses, salaries and contingencies of one kind or another, because, again, it seems to conflict with the memo from the Treasury Board which I mentioned during our discussion of the budget speech, or whether in fact the Treasury memo, which related to restrictions up until April 1.... I wonder if, perhaps, these restrictions have all been removed and, if they have, perhaps the Minister could tell us about it.

HON. MR. BARRETT: The increases, I think, are modest in the Premier's office. I don't like to use the national scale, but I notice the Prime Minister is now over the $2 million mark in his office. They are modest increases. There has been an increase of a couple of staff members. There is no intention of buying great amounts of furniture. As a matter of fact, I have some of my own light fixtures in there — which I enjoy — by choice.

The needs for your office — I would suggest that the Minister of Public Works (Hon. Mr. Hartley) hear the request, or at least the Speaker.

I can't say too much about the move we are making in the banking field other than to point out that in no way are we embarking upon an institution that is motivated by some degree of profitability. What my complaint has been is that the banking system in this country is not (1) flexible, and (2) considerate of current social needs.

By way of illustration, I would like to point out that last year the banks of this country had an increase in deposits of 21 per cent. So there was, in spite of inflation, accumulating wealth in this country — which is good. Everybody sees the dark side of inflation — it's bad, it's a serious problem. But in spite of the 12 per cent inflation rate, there was a 9 per cent net increase in savings in Canadian banks last year. That's a darned healthy indicator in anybody's economy. But the bank profits were up 23 per cent in one year. That's not good. And that's compounded on the increase in the deposits. When you think about the amount of money that the Canadian banking system is piling up centrally, without redistributing it and recycling it in socially desirable areas, then you get a little concerned.

Major Douglas talked about this when some people used to believe in Social Credit. Not many people do any more; it's more a political vehicle rather than a philosophy. Nonetheless, the early socialists in Canada — and my party was on record in 1933 in that respect — the early socialists and Social Crediters talked about decentralizing the banking system and finding alternatives to recycle existing money, rather than having the money centralized in fewer and fewer hands.

The attempts in Alberta were through the Treasury Board: a good idea at the time. I don't think the Alberta government is perhaps using the amount of flexibility they could use with the Treasury Board, but I won't comment on that. I notice that the Tories have not eliminated the Treasury Board. That's not the route we're going to take; we're not going to take that route. We have what we think is a programme designed to provide services right across the board with lower profitability in mind, for British Columbians.

The legislation will be presented before the session ends, and the design will be to look for an institution to help the indigenous small businessman beyond what the Minister of Economic Development (Hon. Mr. Lauk) is doing. I find it somewhat ironic that after 20 years of Social Credit, there was never any institution to help small business, and yet they claimed they were the free-enterprise party. The national government had to develop a bank and we've set up the British Columbia Development Corp. But small business never got any help from the Socreds.

Now to extend that, we want to have a range of opportunities for working people, for widowed women, for separated women and for other people in categories that the traditional banks will not touch. There are people who are marginal income earners just above welfares who, with accessibility to advice on financing their own loans and their own budgeting, could stay off welfare. We look for extended services for young married couples in advising them to avoid

[ Page 691 ]

the pitfalls of credit-card buying.

It's an opportunity, we think, to do something far more responsible and far more flexible than what the existing banking system provides. I am an opponent of the existing banking system but I don't see us saying to them: "Get out of the way; we want the field to ourselves." What I'm suggesting is that through some imagination we provide them with some common-sense alternatives and competition. If the traditional banking system in this country will respond on that basis, then we'll be out in the marketplace competing.

I have not seen the Bank of Canada used as an instrument by the federal government nor have I seen the private chartered banks show any significant shift from traditional, very, very safe, very, very high-profit approach to service.

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

I don't like the idea that when deposits rise by 21 per cent in one year, there are no alternative programmes for low-cost mortgages for Canadians. That's our money; that money belongs to the depositors of the Canadian banking system.

Interjection.

HON. MR. BARRETT: Well, I don't think that you necessarily have to look at the highest rate for all loans — 23 per cent return.

MR. GIBSON: It you're a depositor.

HON. MR. BARRETT: If you're a depositor, yes. But there's a big gap between your interest rate and what they're making. You don't make 23 per cent. You make about 7 per cent, if you've got it good, or higher if you wait a little longer. But the banks make 23 per cent in one year. They didn't give that to their depositors.

It's a little bit embarrassing to go back over the history of some of the loans of our money. The Kaiser Corp. in this province wouldn't have been functioning if we hadn't provided them with coal and a $35 million share of their initial capital to get that coal mine going. Now they're profitable. But let's look at the structure of what we're dealing with: Canadian funds, Canadian banks, Canadian resources to help an American company come in to develop our non-renewable resources.

And what were we charging for the coal at that time? Ten cents a ton! That's all the former government was charging. Now we've moved it up to $1.50 a ton. We're getting a fair return, and it should be up higher. Frank, you weren't tough enough in cabinet to get more than a dime. You were a 10-cent Minister then. You know, it's kind of rough. A dime a ton of coal.

Interjection.

HON. MR. BARRETT: I'm not doing it. You know what's doing it, Frank? Mr. Member for Boundary-Similkameen, you know what's doing it? The world coal price! And isn't it ironic that though they mention that the world coal price is the reason why the coal mines are making a profit, it's because of the NDP that the copper mines aren't.

Interjection.

HON. MR. BARRETT: The coal mines in this province are making more money than they've ever made before because the world price is high and they're paying a buck and a half a ton. But the coal mines say publicly: "That's not because of the government; that's because the world price is high. The copper mines are not making money. That's not because of the world price; that's because of the government." It's a little bit twisted.

Interjections.

HON. MR. BARRETT: Well, I'm talking to you because you're the economist who recognizes these points. I'm sure you'll get on the phone to the mining association to tell them: "Hey, gang, cool that logic." (Laughter.)

But the point is, in terms of an ultimate banking system, we don't want to run the banks out of business; we can't do it and that's not a desirable goal. What we're looking for is some up-front competition, some concern for people who are outside of the conventional services from a bank, and a social awareness.

I'm not a Socred, and none of those over there are except for maybe one or two. But there was a basis in the original Social Credit about the use of the existing capital of the nation to be recycled for the benefit of that nation. Early socialists and early Social Crediters talked about it. We're going to make that move.

It will be totally accountable. We hope to make a modest profit — not 23 per cent. We'd like to make a nice little profit. I don't expect it will make us as much money as the Titanic made for us. You recall when we brought Can-Cel, that was going to be the Titanic. The first year we made $12 million. The second year we broke the myth that governments are not supposed to make money when they run business. I apologize — we made $50 million the second year. That's $62 million profit in two years my colleague has brought back to the people of this province. I humbly, respectfully ask for you to please forgive us for doing that. We're No. 2 now to MacMillan Bloedel, and we try harder. We've done

[ Page 692 ]

very well; we have followed good advice. We've sought it and we've followed it. Also, we've been a little lucky, and that's always a good ingredient. So now we're ready for the next move.

The elections Act. Well, Mr. Member, you've raised a very, very important subject. There is no question that we need reform in that area in this province. You recall the B.C. free-enterprise education fund. That was a mysterious fund administered by the Social Credit Party. One of the signators was the former Attorney-General, Mr. Bonner.

That fund held in trust, it was estimated, over $3 million for the Social Credit Party to use in public expenditure. By using the free-enterprise fund, the Social Credit Party went beyond some measurement of at least reporting on where the campaign funds come from.

I remember the debates in this House about campaign funds and Mr. Gunderson saying publicly...yes, he was the bagman for Social Credit.

Interjection.

HON. MR. BARRETT: I've raised money for my party, but I have never taken money from a corporation — never. I have raised money openly...and anybody who is listening who wants to send money to the NDP, please do it and we'll send you a receipt. I have raised money for my political party....

Interjection.

HON. MR. BARRETT: I'm telling you, I've raised money for my political party. But I have never raised the kind of money that can buy television time between elections, radio time between elections, newspaper time between elections, offices in every constituency. We have to know who's funding those expenses; we have a right to know where those millions of dollars come from. So we will design a bill that will require disclosure of all campaign funds by all parties. We will design a bill that will limit campaign expenses. We will design a bill to plug every single loophole that Social Credit has shown us so far in handling campaign funds, and maybe one or two from the Libs.

We will also look quite frankly at an idea proposed by the leader of the Conservative Party (Mr. Wallace) and experimented with in Great Britain: perhaps public financing for part of campaigns so that all parties move away from the secret campaign funds that are part and parcel of the political system of this country. Full disclosure is an absolute essential. Arm's length contributions have to be examined very, very carefully.

Threats like that from the Liberal leader (Mr. D.A. Anderson) to businessmen in this province, saying that you can't give money to the Liberals federally and money to the Socreds provincially and think you're going to be favoured.... That's what he said. I don't know what he meant by that. Was he suggesting that the federal Liberals made decisions on contacts based on who gave money to that party? Was he suggesting that? He was warning contributors, though. Oh! He was warning contributors not to be schizophrenic because their schizophrenic donations would be remembered by the federal Liberal Party. What did he mean by that? I don't want any leader placed in that embarrassing position. I think we need to know everything possible about the vast hidden sums that are behind some political parties.

How much is left in the B.C. free-enterprise fund? Who are the current signators? How much money does Social Credit still have? Who's paying the light bills, the phone bills and the rent bills for all the offices? All those little people? You've got to be kidding.

MR. BENNETT: Will you resign if you're wrong?

HON. MR. BARRETT: Mr. Member, will you table in this House all the accounts of the Social Credit Party and all the campaign donations from everyone they've received in the last two years? Will you table in this House the complete records of the B.C. free-enterprise education fund? Will you do that? No.

MR. BENNETT: No such fund.

HON. MR. BARRETT: No such fund? What happened to the little black box that Gunderson used to carry around?

Interjection.

HON. MR. BARRETT: Would you, Mr. Member, be prepared to file with this House a financial statement of the B.C. Social Credit Party, all campaign contributions you've had in the last two years, all the companies you've received money from, the free-enterprise education fund that was formally administered by the Social Credit Party? Would you tell us what happened to that, how much was left from the last election and when the fund was disbanded? Will you tell us all that? When we have that information, it will help us to write even a better law. I know that they wouldn't like to leave the impression that money could buy votes. That's why I welcome the statement from the leader of the Conservative Party.

We will have the best, most honest, most open and most restrictive election law possibly designed by man, requiring full disclosure of all campaign funds, full disclosure of arm's length contributions, full

[ Page 693 ]

disclosure and full name of anyone who puts in an ad on behalf of a political party. All of these things we'll have in the Act. If you've got any more ideas, throw them into the hat. We welcome them. And if you have a few ideas, you throw them in the hat too, because I know that you want to clean up your history.

MR. PHILLIPS: It's nice to see the Premier in his usual way trying to bring in.... Instead of talking about his estimates and his own incompetency as Minister of Finance, he starts talking about a new Act that he's going to bring in. I'm sure we'll hear all about it again when he brings in the bill.

But he can't answer a question about his own department. He showed this afternoon just exactly how incompetent he is as Minister of Finance in handling the taxpayers' money and by going out and borrowing money from undisclosed sources. Well, the people will know. I'm surprised that the Minister of Finance didn't say that we were attacking him because he's a socialist. He's used that before when he had pressure on him for his own incompetence as Minister of Finance. He stood in this House and said: "Well, we knew we were going to be attacked, because we're socialists. They're not going to attack us because we're incompetent in managing the affairs of the province. They're going to attack us because we're socialists." I've heard him say it. "They're not going to attack us because we're government, and they want to know the truth behind all of the financial chaos that is going on in the province today. No, no."

I'm really surprised, quite surprised that he said he had to go back to the library. He had to go back to the library to find out who the financial advisers were. That means that we haven't had to borrow money in this province for so long that he had to go to the library to find who the advisers were. He had to go to the library. That proves the whole point in question.

We're arguing about where the money was borrowed and how much — undisclosed sources — but the point is that this province shouldn't have to be going outside the borders of the Province of British Columbia to borrow any money. That's the whole question. We shouldn't have to go to Boston, or we shouldn't have to go to undisclosed areas. We shouldn't have to be going outside of the borders of the Province of British Columbia for either Hydro or the railway or to run this province, by the Premier's own admission.

On April 11, 1973, the Premier acknowledged — and this is from an editorial in The Province — that "B.C.'s fiscal health results from planning decisions of three to five years ago and that a happy provincial tax surplus would exist no matter what party formed the government." This is what the Premier said in April of 1973: there would be healthy surpluses because of previous planning. These were the Premier's own words. He said: "B.C.'s fiscal health" — and I'll read it again — "results from planning decisions of three to five years ago and that a happy provincial tax surplus would exist." Yet less than three years later that healthy surplus seems to have disappeared. The tables have turned and we're going to undisclosed sources to borrow money to keep the province going. For both Hydro...and we're going to introduce legislation that we have to go borrow for the railway.

I want to speak about the railway for just a few moments.

HON. D.G. COCKE (Minister of Health): I thought you were supposed to be a businessman.

MR. PHILLIPS: I want to ask the Premier a couple of questions before I go into the British Columbia Railway. As tabled here in the estimates, the estimated revenue is listed at $230 million for petroleum and natural gas leases and fees. Is the estimated revenue from the British Columbia Petroleum Corp. in that $230 million? Would the Premier please just answer me that question before I go on?

HON. MR. BARRETT: Yes.

MR. PHILLIPS: All right. Is the estimated revenue based on an increase in the price of natural gas which the Premier intends to get from Ottawa?

Interjection.

MR. PHILLIPS: Well, it's quite an increase, because last year it was $78 million. We know that the revenue from leases is going to be down. Just a few short weeks ago we had a sale and, at a time when oil companies should be rushing into the Province of British Columbia to buy up land to drill, and rights to drill, and so forth, we received only $1 million. It's one of the lowest sales we've had for a long time. So I predict that unless the climate changes — and we've asked the climate to be changed — the revenue from petroleum and natural gas leases will not increase from that $78 million. So there's a vast difference.

I would like a candid answer. What in that sum of $230 million does he estimate will be the revenue in the form of dividends from the British Columbia Petroleum Corp.? I would like to know that answer.

Well, Mr. Chairman, the Premier will not give me that answer, evidently because he doesn't know it. Maybe it is because he has estimated an increase in dividends from the British Columbia Petroleum Corp. in that figure. Maybe he has estimated that the increase in dividends from the British Columbia

[ Page 694 ]

Petroleum Corp. is based on an increase in the price of natural gas which he intends to get through negotiations with Ottawa. I think that the Premier as Minister of Finance, if he knows what he is doing, should tell this Legislature. That is the purpose of debating his estimates. I would like to know. I will ask the Premier again. How much of that a $230 million does he estimate as dividends or royalties or revenue, call it what you may, from the British Columbia Petroleum Corp.?

After he tells me that figure, maybe he would tell me also what price of natural gas that revenue is based on. I feel, Mr. Chairman, that the Minister of Finance in that $230 million has estimated revenue from the British Columbia Petroleum Corp. based on a price he intends to get for natural gas after he visits Ottawa in April. I would like the Minister of Finance to tell us that. If that is so, and he has taken the entire amount into estimated revenue, I see nothing in the budget for expenditures of all of this extra $40- $50- $60-$80 million — kind of a cloudy figure — which he intends to give to the Department of Municipal Affairs for distribution to the municipalities of this province.

I feel, Mr. Chairman, that unless the Minister gives us some candid answers here, the increase that he intends to give the municipalities is in the revenue side of the picture but not in the estimated expenditures. I think that this Legislature has the right to know. If the Premier and Minister of Finance wants to be candid and wants to be truthful and open, he has a right to tell us this afternoon what the entire story is on that $230 million estimated revenue and exactly how he intends to get it and where it is coming from, based on what price for natural gas.

I would also like the Minister of Finance to tell us where in the estimated expenditures is the subsidy to the Insurance Corp. of British Columbia. I have looked through the expenditures. I am not professing to be the Minister of Finance. If I have overlooked it, I would like the Premier to tell me.

HON. MR. COCKE: Thank heavens.

MR. PHILLIPS: But I would like to know how much out of this budget is in there to subsidize the Insurance Corp. of British Columbia. If he plans to bring into this Legislature figures from the Insurance Corp. of British Columbia telling us that he doesn't need any money to subsidize the Insurance Corp. of British Columbia, then I say, Mr. Chairman, to the Minister of Finance that he is overtaxing the motorists of British Columbia on their gasoline purchases. I say to him also that he has misled the motorists of British Columbia in telling them that about 8 cents per gallon of their gas would go to subsidize the Insurance Corp. of British Columbia. So I want the Premier to tell me just where the expenditures are coming out of the budget to the Insurance Corp. of British Columbia.

I have some other questions, Mr. Chairman. I would like to reserve my place because I have some other questions on the railway, but I would like the premier to answer those several questions that I have asked. Would the Premier please answer my questions?

HON. MR. BARRETT: I'll take note of them.

MR. PHILLIPS: Well, would you mind answering hem? When can we expect an answer, Mr. Chairman?

HON. MR. BARRETT: On those two items?

MR. PHILLIPS: On these two particular items, yes — revenue from the petroleum and natural gas royalties, leases and fees, and, with regard to the Insurance Corp., the gasoline tax. I am not finished because I have some questions I would like to ask you on the British Columbia Rail. I would like the answer now on those particular subjects, because they are unrelated.

We are talking about the estimates, Mr. Chairman; we are talking about the estimates in this particular deal. I want to move on to your position as president of the railway.

HON. MR. BARRETT: On the question of the revenues and our estimates, they exist as our estimates from the leases and all other sources besides gas. If you'll notice, that is a large, encompassing title.

The second question is related to ICBC. That will be handled by the Minister responsible for ICBC (Hon. Mr. Strachan).

You'll get there because I know you want to get there.

MR. PHILLIPS: Mr. Chairman, it didn't take the Premier very long to stand up and tell me nothing and tell me that he either doesn't want to tell me, or that he doesn't know, because I asked him straightforward questions: how much of that $230 million in the anticipated revenue is from the Petroleum Corp. of British Columbia, and when he estimates his revenues from the Petroleum Corp. of British Columbia, how much is he planning on selling the gas for to arrive at those estimates? And the Premier won't tell me.

Interjection.

MR. PHILLIPS: Well, it is unbelievable. I have to say, Mr. Chairman, that since the Premier will not answer my questions, he doesn't know.

AN HON. MEMBER: He knows.

[ Page 695 ]

MR. PHILLIPS: Well, I doubt very much if he knows. And with regard to the insurance corporation, to say that it's looked after by the Minister in charge — he's the Minister of Finance.

MR. CHABOT: He said there wouldn't be a cent subsidy, so what's going on?

MR. PHILLIPS: He is the man who is levying the punitive taxation on the taxpayers of this province. He is the man who has squandered millions and millions of dollars over the past two and a half years when he should have built up tremendous surpluses so that we wouldn't have to be going to undisclosed areas to borrow money. He is the man who has brought the province into the bad financial state that it's in.

HON. MR. COCKE: Ohhhh!

MR. PHILLIPS: Now, Mr. Chairman, since the Minister of Finance won't answer the questions, or doesn't know, I'd like to discuss the British Columbia Railway with the president for just a few moments. On April 17 of 1973, the Minister of Finance and president of the railway said, and I quote from Hansard:

A railcar assembly shop will be constructed at Squamish to enable the British Columbia Railway to go into car production. The target date for this operation to commence is January, 1974.

This is in Hansard, a statement from the president of the railway. Then, very shortly after, there was a brochure put out from the railway company, of which he is the president, and this brochure says: "British Columbia Railway manufacturing division. We will build all types of railway cars." Now the plant start-up date isn't January of 1974; no, the start-up date is now July 1, 1974. The annual production is to be 1,000 cars with provision for possible future expansion to double the capacity. Building cost of the plant, $5 million; projected employment, 250 people. It is now January of 1975...

AN HON. MEMBER: March.

[Mr. Dent in the chair]

MR. PHILLIPS: ...March of 1975, a year and three months later.

Mr. Chairman, I see the Minister of Finance is leaving. He spent most of the afternoon during his estimates not paying attention to the questions, but signing letters...

HON. MR. STRACHAN: Oh, give him five minutes.

MR. PHILLIPS: ...instead of paying attention to his estimates. He's been signing letters like mad all afternoon. I can tell when the Premier's mad, because he gets out his pen and he starts signing letters. In the afternoon when his estimates are being taken through this Legislature the Premier does nothing but sign letters all afternoon, doesn't pay attention to questions, and doesn't give complete answers.

MR. CHAIRMAN: Order, please! I would ask the....

MR. PHILLIPS: Yes, order. I think you should have called the Premier to order, Mr. Chairman, for signing those letters all afternoon instead of paying attention to his business.

MR. CHAIRMAN: Order, please. Would the Hon. Member confine his remarks to the vote before us?

MR. PHILLIPS: I find it very difficult to speak to someone signing letters or to someone who isn't in the House, Mr. Chairman.

HON. G.R. LEA (Minister of Highways): The former Premier didn't sign his letters.

MR. CHABOT: Would you declare a short recess, Mr. Chairman?

MR. PHILLIPS: Yes, would you declare a...?

MR. CHAIRMAN: Order, please. If the Hon. Member wishes to relinquish his place, someone else can speak, but we can't have a recess at this point. Would the Hon. Member continue?

MR. PHILLIPS: Do I talk to the wall, or do I talk to the Attorney-General (Hon, Mr. Macdonald)?

MR. CHAIRMAN: I'm sure the questions will be recorded.

MR. PHILLIPS: Oh, they'll be recorded. Well, I'd like to ask the non-existent Minister of Finance and president of the railway what happened to his prediction. On April 17 of 1973, he was going to open this car manufacturing plant in January of last year. Now, Mr. Chairman, based on this prediction I understand that the railway went out and hired men in eastern Canada to come to Squamish to work in this plant. I'd like to know from the president of the railway what these men — these highly qualified men, I might add — have been doing in Squamish since July of last year when he was supposed to open this plant. What have they been doing? How many are there? What wages have been paid? And I'd like to know from the president of the railway how much this

[ Page 696 ]

delay of a year and three months has added to the $5 million cost of this plant. I would say, Mr. Chairman, that this is very poor planning on behalf of the president of the railway. I'd also like to know how much deterioration has taken place in the steel that is stockpiled to build these cars.

Why is there a delay? I'd like the Premier to explain why there is a delay because this is adding to the already healthy deficit position that the railway is going to be in for the year 1974. The railway lost $3.3. million in the first seven months of operation in 1974. What is the total going to be? How much did this delay in opening this plant...?

Mr. Chairman, it almost makes me weep when I think about the deterioration that has taken place in British Columbia Rail since that Minister of Finance became president of the railway. There is unrest among the employees of the railway; there is low morale in the employees of the railway. The Premier talks about a boxcar shortage. We told him when he put that punitive tax on all the other railways bringing cars into British Columbia that there would be a shortage of boxcars. Exactly what we said has happened, and it has been harmful on all the lumber manufacturers in the province, the farmers and all the shippers — caused, Mr. Chairman, by the punitive taxation of that Minister of Finance.

If you want people to cooperate with you, you don't slap them in the face, which the Premier has done. How much added revenue has he received by this punitive 5 per cent tax on rolling stock coming into British Columbia from other railways? How much revenue? I think, Mr. Chairman, if you were to add up the revenue and add up the problem it has caused, the two don't balance. This punitive taxation has hampered the operation of this railway.

Mr. Chairman, I would also like to know how the Premier is making out in his negotiations with the national railways on his great, grandiose scheme for the development of the northwestern part of the province. Oh, that wasn't very long ago. It had just come out as one of the greatest schemes in British Columbia. Oh, we could negotiate with Ottawa. Oh, yes, we were going to do great things, we socialists. It seems to me that it's all fallen flat on its face and that we're no closer to reaching an agreement with the senior railway than we ever were.

But the Premier now says we will go it alone. Is that why he is introducing legislation to borrow more money for the British Columbia Railway? Just a moment, Mr. Chairman — it seems to me that he says that now, if he can't deal with the CNR, he's going to deal with the CPR to build the link in the interior. I'd like the Premier to answer some of these questions, Just where are these negotiations? What's happening? Have his negotiations fallen flat on their face? Can't he negotiate with Ottawa? What about that much-needed link from Clinton to Ashcroft to give us a second route through a national railway to allow the national railways to use the BCR line down to Squamish when there are slides in the Fraser Canyon? What has happened to his negotiations? Is he dealing now with CP Rail?

The new president of the railway has been a complete and utter flop so far as the operation of that railway has gone. Now he's going to come out and try to cloud the issue about other things that don't really concern the day-to-day operation of the railway. But I would like the president of the railway to give us some candid answers in this Legislature, some truthful answers, instead of bringing in issues that cloud the real operation of the railway, instead of bringing in issues that cloud the real estimates and expenditures we're talking about. Maybe the Premier could give us totally complete answers about his own department.

HON. MR. BARRETT: Mr. Chairman, I pointed out that there is a bill on the order paper. I will be giving a full report when that bill is called and I anticipate a full debate on all aspects of the railway, including the boxcars, the ties, the freight cars, the engines, the engine drivers, the stations, the huts and the whole operation of the railroad under that bill.

MR. PHILLIPS: Well, maybe, since the Premier doesn't want to discuss the railway now — and I asked him before I started talking about the railway — do you want me to discuss the railway now or later?

HON. MR. BARRETT: Well, I answered both the questions.

MR. PHILLIPS: You told me that you wanted to discuss the railway, Mr. Chairman.

HON. MR, BARRETT: I said....

MR. CHAIRMAN: Order, please. There can only be one Member on his feet at once. The Hon. Member for South Peace River has the floor.

HON. MR. BARRETT: Go ahead.

MR. PHILLIPS: A little more clouding of the issue. I suppose he feels that if we use up time on the railway this afternoon, maybe we won't have time, since there is closure in the House, to finish his estimates.

MR. CHAIRMAN: Order, please.

MR. PHILLIPS: I'll ask the Premier once again: will he tell us how much money in this $230 million of estimated revenue is coming from the British

[ Page 697 ]

Columbia Petroleum Corp.?

HON. MR. BARRETT: A substantial amount.

MR. PHILLIPS: I'll tell you, Mr. Chairman, the taxpayers of this province are sick and tired of hearing answers like that from what is supposed to be a responsible, capable Minister of Finance.

The Premier is trying to change his image. He's spending $260,000 of taxpayers' money to hire a fellow from Manitoba to help change his image. Now that fellow's going to go back to Manitoba. Yes, well, there it is right under the Provincial Secretary's vote: $260,000 to change his image. That fellow will go back to Manitoba with his tail between his legs if the Premier doesn't perform a little better in this Legislature and give us some candid, honest answers.

A substantial amount. How are we going to know if you don't tell us? We must assume that, like all of the other Minister of Finance's financing, he grabs a....

MR. CHAIRMAN: Order, please. Would the Hon. Member please confine his remarks to vote 2 and the figures in vote 2?

MR. PHILLIPS: Oh, come on now, Mr. Chairman! We happen to be discussing the Minister of Finance, and I am sure that he makes up the anticipated revenues. If you want to go to the protection of the Minister of Finance and protect him from not giving honest, candid answers, well, you go right ahead.

MR. CHAIRMAN: Order, please. I think the proper procedure is that it is quite permissible to range into the Premier's area of responsibilities, including finance, but it's just a case of not being repetitive, that's all, when the vote is called.

MR. PHILLIPS: I'll tell you, Mr. Chairman, that I have to be repetitive because the Minister of Finance doesn't give me an honest answer. He gets up and says a "substantial amount" when I have asked him a perfectly candid and straightforward question to which I sincerely want to know the answer. I think that it's the Minister of Finance who is not being candid. He's not being honest and he's not being fair to the taxpayers. I think it's a perfectly legitimate question.

MR. CHAIRMAN: Order, please.

MR. PHILLIPS: Do you consider it a perfectly legitimate question, Mr. Chairman?

MR. CHAIRMAN: I would call the Member to order on the point that he said that the Premier is not being honest. I would ask him to withdraw that imputation.

MR. PHILLIPS: Well, he's just not.... Yes, I'll withdraw. I'm saying that he's not being straightforward.

MR. CHAIRMAN: Would the Hon. Member continue?

MR. CHABOT: He's hiding behind his figures.

MR. PHILLIPS: I would like to ask the Premier once more: where in the estimated expenditures is the subsidy for the ICBC?

HON. MR. BARRETT: He said he'd handle it.

MR. PHILLIPS: Oh, he'd handle it? You happen to be the Finance Minister. You happen to be the man who is responsible for these estimates, or are you abdicating your responsibility to the Attorney-General (Hon. Mr. Macdonald) as president of the British Columbia Petroleum Corp.?

Interjection.

MR. PHILLIPS: I see that the Premier can make light of his own estimates. He can make light of a $3.2 billion budget. He can make light when he won't be candid with this Legislature and tell us on what he bases his revenue estimates. Then we go out and say: "Well, we have no basis; we have to say that the $230 million is over-estimated." He won't give us the answers. Is that being candid with this House?

HON. MR. BARRETT: You've got to help B.C., not knock B.C.

MR. CHAIRMAN: Order, please. The Hon. Member for South Peace River has the floor.

MR. PHILLIPS: I am not knocking British Columbia.

HON. MR. BARRETT: Yes, you are.

MR. PHILLIPS: I am trying to help the taxpayers of British Columbia understand where they're at financially.

Interjection.

MR. PHILLIPS: The point is that from what the Minister has said I have to deduce that he has anticipated in that $230 million approximately $150 million to $200 million worth of revenue from the British Columbia Petroleum Corp. If he has estimated that increase in the price of natural gas in his

[ Page 698 ]

estimated, anticipated revenue, then he is not going to have a balanced budget, because nowhere in the expenditures of the Minister of Municipal Affairs (Hon. Mr. Lorimer) is he going to spend that. So from the anticipated increase in the price of natural gas he has taken the full amount into revenue as increasing dividends from the British Columbia Petroleum Corp., and he has under-estimated by the same amount what he is going to give out to the municipalities.

You wonder, Mr. Chairman, why we have to ask questions or why we have to wonder about his ability as a Minister of Finance. I would like the Premier to be honest and tell us if in this revenue....

HON. MR. BARRETT: I think you're being political.

MR. PHILLIPS: You know, Mr. Chairman, I am sick and tired of the Minister of Finance acting the clown in this Legislature. This is a very serious matter. We're not dealing with thousands of dollars. We're dealing with hundreds of millions of dollars; and the Premier sits over there and jokes, signs letters, leaves the House.

MR. CHAIRMAN: Order, please.

MR. PHILLIPS: No wonder the people of this province have lost their respect for that Minister of Finance.

MR. CHAIRMAN: Order, please.

HON. MR. BARRETT: How long was I out of the House?

MR. D.A. ANDERSON: To the Minister of Finance and Premier. Earlier this afternoon we were discussing at some length two things: one was the Columbia River, and I'll return to that in a moment. The second was, of course, the fact that now that Aristotle Onassis is dead, there's a new financial genius on the scene who can anticipate interest rates six months before they actually happen. We're all expecting him to leave an even greater fortune to his lucky wife.

Interjection.

MR. D.A. ANDERSON: It's in Hansard, Mr. Minister.

It was indeed intriguing to discover we had a financial genius who knew all about interest rates in anticipation.

The point I'd like to raise with the Minister of Finance is this. He talked, when dealing with that loan, about the advice he gets. I agree with him; if it's the same advice as he previously got from the people that we've heard about, he probably is getting good advice from good civil servants.

But he did keep stressing the need to have accurate information and how he tries to judge on the basis of information. I think he made a good statement to that point. What I'd like to say to him is: will he now apply this to the Columbia River treaty?

He requested me and my colleague from Point Grey (Mr. McGeer) to go out and ask the Prime Minister to go for renegotiation, which we're quite willing to do, as we said at the time. We only ask one thing though, and that is that we have the basic information available now to government as a result of its studies — the basic information that he has obtained — so that we can make the best possible case.

But what I'd like to ask him, having looked at article 15 which I have before me, is whether the permanent engineering board has been requested to look into the fact that, back when the treaty prices for the price of electricity were negotiated, the U.S. gave us certain information concerning their intentions and did not follow through. The U.S. installed some 50 per cent more generating capacity than we were told about at the time. They valued in those days the Canadian storage on the basis of certain other American dams that would be constructed. Therefore the Canadian storage value was considerably less than it otherwise would have been — and indeed it is now — because they did not construct the dams they talked about. Therefore the Canadian storage is worth far more to them. Whether this means there's a 700,000 kilowatt difference or not, I don't know. It's that type of information which we assume that the Premier and the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) have been attempting to obtain in-house within B.C. Hydro and also by way of outside experts that we think would be helpful to us in carrying out the Premier's request of looking into the question of renegotiation and asking the federal government to take it up.

Just as the Premier suggested that he makes no decision on a loan without proper information, surely he must, by saying "token," suggest to us that we should make request to the Prime Minister without full information as well. We don't have it yet.

Article 15 reads as follows:

"1. A permanent engineering board is to be established consisting of four members, two to be appointed by Canada and two to be appointed by the United States of America.

"2. The permanent engineering board shall: (a) assemble records of the flows of the Columbia and the Kootenay Rivers to the Canada-U.S. boundary (b) report to Canada and the United States of America whenever

[ Page 699 ]

there is a substantial deviation from the hydroelectric and flood control operating plans, and, if appropriate, include in the report recommendations for remedial action and compensatory adjustments.

I stress "deviation from...operating plans" and "include...recommendations for...compensatory adjustments" in section 2(b) of article 15 of the Columbia River treaty.

It seems to me that we have a situation at the present time where there is within the treaty opportunity for re-examination of the question of price and return for hydroelectric power, which does not require a total re-examination and renegotiation of the treaty but only requires the calling together of the permanent engineering board and asking them, by way of the provisions of section 15, to look into the capacity which the United States put in which was in excess of what we were told about some years ago and to look into the question of the dams not constructed in the United States which, in turn, make our storage more valuable, and then go into the provision dealing with compensatory adjustments.

It seems that even without renegotiation of the treaty, there are avenues to be explored. I would like to know what steps the government has taken to look into the avenue of article 15 and the permanent engineering board.

I might add that — without reading the whole of this article, Mr. Chairman, for it runs to almost a page in the treaty — to do this we have to produce some prima facie evidence. It would seem to me, once again, that what we need is the raw material, the basic facts for both the permanent engineering board and our request to the Prime Minister. I understand that what we need essentially is a computer model, which exists at the present time.

The cost of startup would be approximately $25,000; the cost of collection of data and running it through and checking it out on what the true benefits would be, maybe the cost of that would be in the neighbourhood of a hundred-plus thousand dollars, not an enormous figure in the light of the benefits received from the Columbia to the United States or, indeed, the amount of money that we receive even at the present time.

It is that type of hard information that we need. Without it, we cannot recommend to the Prime Minister or anyone else that there should be renegotiation, except in a very general sense that we feel it is wrong. We can't give them details; we can't give them figures if requested to do so. Without that information, I really can't see how the permanent engineering board under article 15 could act either. I would ask the Premier and Minister of Finance, first, what information is available for us to fulfil the request he gave us, and, secondly, what steps have been taken under article 15 to have the question of benefits recomputed.

HON. MR. BARRETT: First, a part of your argument lacks logic. Perhaps that is not a handicap with you. The substance, as I understand it, is that a very gentle request has been made to strengthen a position already taken, although at the same time arguing: "I don't want to take the position unless I get the information."

Your party is already on record.

Interjections.

MR. McGEER: Not fact by fact.

HON. MR. BARRETT: Oh, I see. Who is talking: the present leader, the past leader or the future leader? Which one of you?

MR. CHAIRMAN: Order, please. The Premier should be doing the speaking.

HON. MR. BARRETT: I have been listening to what you said. I don't know all the details of article 15. Look, I'm suggesting you ask those details of someone who is on the Hydro board, the Member for Vancouver East (Hon. R.A. Williams) or the Member for Burnaby-Willingdon (Hon. Mr. Lorimer). Surely you don't expect me to know that whole document by heart even if you do — and I'm sure you do. You wouldn't come in and just at random pick out one article and appear to be an expert. I'm sure you know the whole treaty backwards and forwards. You obviously have me at a disadvantage. You have memorized the treaty. I don't have the intimate information at my fingertips, nor could I be expected to. I don't suggest you're a devious person, looking for some legitimate guise around getting information out of me that's not available out of another Minister. You're not that kind of person. So I suggest you wait till a member of the board gets up; then ask the question.

There is the hard information of how much we are short. That is a fact. Your colleague (Mr. McGeer) there spoke about it in the House years ago. But that information is well known. We are many hundreds of millions short on the deal. We are. And I asked the Prime Minister to give a review, at least, to the methods of reopening the treaty. We never had that.

Now if you want information, ask the Ministers concerned. We have never had an indication, even with the modest request that you're making, that the federal Prime Minister is interested. We signed a treaty, remember. Certainly, within that treaty, the federal government was responsible just as much as the provincial government. I wouldn't say that you are being tedious or picayune, but you are expecting me to know a great deal more than I presently do

[ Page 700 ]

know.

MR. D.A. ANDERSON: I'll read it to you.

HON. MR. BARRETT: Well, even if you do read it to me, Mr. Member, there is no way that my super-intelligence, as great as it is, could deliver the information you are asking. There is no way that I would have it at my fingertips — no possible way. You are asking for intimate engineering details, as if I had the stuff tucked away underneath my elbow.

MR. D.A. ANDERSON: Is it right or wrong?

HON. MR. BARRETT: What I'm asking is: put the questions on the order paper; ask the Ministers concerned. I am not on the Hydro board.

MR. D.A. ANDERSON: Mr. Chairman, I was surprised that the Premier, who himself raised the issue of Columbia River here this afternoon, would back off on this. He requested us to take certain action. We would be delighted to do so, provided we get information which we think would buttress our case.

HON. MR. BARRETT: Write a letter to the Minister and ask him for the information you wish.

MR. CHAIRMAN: Order, please. I would ask the Hon. Second Member for Victoria to confine his questioning to that area of responsibility for which the Premier....

MR. D.A. ANDERSON: Perhaps we made the mistake that the Premier was serious in his request. We are happy to take him up on it. But if questions on the order paper on this subject get the same treatment that so many others have received, we won't get any of the information at all. It is a perfectly sensible request. If he seriously wants the treaty re-examined he should make at least available what material there is.

HON. MR. BARRETT: Have you written the Minister and asked?

MR. D.A. ANDERSON: If we don't get the material, if we don't get the information, we won't get much in the way of success in our request for renegotiation. The Premier keeps asking if I have written to the Minister. I have asked him in this House for the MacDougall report and he said no, He refused it to us. That is the type of information which we need to carry out the request the Premier made to us. If he is serious about it, we would like the information that will make it possible for us to make a logical and sensible presentation.

HON. MR. BARRETT: You know yourself that I can't possibly have it at my elbow. You know that. To stand there and suggest that I give you all the engineering details and everything else, as if I had memorized it, is asking even me to do more than I can, which is a compliment and, coming from you, unexpected. Nonetheless, even with my superior skills and abilities, I don't have the information that you want immediately.

I suggest that you write a letter and tell the Minister concerned what information you're seeking and have him respond to that. But there's no possible way that I can give you the kind of information that you expect me to have at my fingertips. I don't have it.

MR. D.A. ANDERSON: Mr. Chairman, in no way are we suggesting that the information is there at his fingertips. We just simply want a commitment that we can get it, because the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) has indicated to us that we won't get it. If the Premier wishes to overrule his now not-so-favourite Minister, and give us some information, I'd be delighted. We're taking him up at his word, but clearly he's backing off. We're not asking for engineering details now. We're simply asking for the information.

HON. MR. BARRETT: Oh!

MR. D.A. ANDERSON: Mr. Chairman, why I refer to this is because the Premier has talked at great length about the financing of B.C. Hydro — the two loans of $100 million a throw which he has obtained. He's talked about the interest rates for B.C. Hydro loans. He talked in the budget to a very great degree about the losses on the Columbia — on the deal. I want to know whether or not, in view of his keen interest in it, article 15 has been used. It appears that it has not been used, because we have had no indication about article 15, which says that "the permanent engineering board can look into substantial deviations from the hydro-electric and flood-control operating plans and, if appropriate, include in the report recommendations for remedial action and compensatory adjustments."

Now this is the information which the Premier did not have. I would like to tell him that I'm quoting from a document; I haven't got the treaty memorized. The treaty and appendices here run to some 167 pages. But I'm simply saying that article 15, concerning this matter of renegotiation, has been mentioned before frequently in this House. It struck me that perhaps the Premier might have read it before going on to suggest a full-scale treaty revision. Until we've exhausted the provisions of the treaty itself that the treaty itself provides us for re-examination, one's case for opening the whole treaty is not

[ Page 701 ]

particularly good.

If we can have assurance from the Premier that article 15 has, indeed, been employed, that there has been some effort to look into costs, that there has been some study on the value of the United States increase in hydro-electric generating capacity, if there has been some costing or evaluation of the increased value of Canadian storage which results from the fact that American dams were not constructed, well, perhaps it would be possible to carry this thing through. But until we get some of this information material, it's not possible for us to put anything more than a very general case forward, which we have done, which the First Member for Vancouver–Point Grey (Mr. McGeer) has done on a number of occasions — clearly unsuccessfully.

What we would like to do now is have the basic material and information which make his case and his beliefs a little more persuasive. But it appears that while the Premier is happy to talk about renegotiation, while he's happy to talk about the losses, he really doesn't want to do very much about it. Article 15 provides us with an avenue, and we want to know whether it's been used. I read out 2(b). Perhaps I should read the whole thing, as the Premier doesn't seem to know very much about it:

"2(c) The permanent engineering board is to assist in reconciling differences concerning technical or operating matters that may arise;

2(d) To make periodic inspections and require reports as necessary from the entities with a view to ensuring that the objectives of the treaty are being met;

2(e) To make reports to Canada and the United States at least once a year of the results being achieved under the treaty and make special reports concerning any matter which it considers should be brought to their attention."

This is all there, and until that avenue is at least explored, talk of going to renegotiate is a little premature. The Minister of Finance is involved in this. He's borrowing money for construction, substantial amounts of construction. He makes claim in the budget that $450 million more will be required. Yet what seems a logical approach and an attempt to receive more money under the treaty, as opposed to borrowing money from the Arabs or anyone else, he doesn't seem to have followed through on. I wonder why.

On the question of borrowing, perhaps I'll return at a later time. But I wonder if he would now answer whether he has made some effort to have article 15 brought into effect and to have compensatory adjustments made under it.

MR. CURTIS: Mr. Chairman, I'd like to return with the Premier to the question of petro-dollars and clean up a few points which I feel are still on the record. I hope I can ask straightforward questions and have a couple of straightforward answers.

The Premier, when he was discussing earlier today the possible introduction of some sort of banking outlet in British Columbia — I believe I have the quotation almost correct — spoke about the "piling up of money in the central banking system" in Canada. I wonder if the Premier would not agree, when he next stands in this discussion, that that's a penny-ante game compared to the piling up of money in the Middle East in the Arabian countries.

They have been referred to as international blackmailers. That may be a strong phrase, but they're certainly international pressure groups.

It seems that a number of people in British Columbia are genuinely and legitimately concerned about the necessity of this jurisdiction, or any other jurisdiction in Canada, going to the Arab countries at this particular time. The Premier spoke about the Municipal Finance Authority, and I have only the press clipping from The Daily Colonist which deals with their annual meeting last Friday. It quoted the authority chairman saying in an interview that the Middle East money market was "the most favourable" at the moment. Well, that may be. Perhaps the international money market, or the mid-east money market, was the most favourable at the time that this matter was discussed by the Premier with his advisers and with the management group in New York.

Others have touched on the fact that the country of origin — that is, where the petro-dollars have come from — has not been made public and will not be made public as part of the agreement which the province has entered into. I would like the Premier, through you, Mr. Chairman, to correct me if I am wrong on this point. At some time when the province goes to a public issue, and it issues its prospectus, will it not be necessary to identify the country of origin, to identify precisely where the money has come from, or is it simply a case of setting out the indebtedness which has already been incurred by the province or its Crown corporations? That's a straight yes or no question.

HON. MR. BARRETT: The answer is no.

MR. CURTIS: The answer is no, the Premier says. It isn't necessary. Thank you. Nevertheless, the debt will be recorded in future prospectuses.

HON. MR. BARRETT: Yes.

MR. CURTIS: Okay. The other point, then, is: will the Premier tell us, Mr. Chairman...? He must have thought very carefully about moving into the Arab world for this particular money. I wonder if he addressed himself seriously to the wisdom of borrowing from Arab nations at this time, in spite of

[ Page 702 ]

the fact that the rate was probably favourable, by simply endorsing, or appearing to endorse, the principle of, to use his own phrase, "the piling up of money" in that particular part of the world.

I know that one national investment house — I could be incorrect, but I think it is Wood-Gundy — did a study a couple or three months ago indicating that, with the passage of years and if this situation continues, it will be necessary for many jurisdictions, many hydro authorities, provinces, and other jurisdictions in North America, to go to that particular part of the world for the bulk of their funding. They gave a projection of the many billions of dollars which were going to be required for capital financing over the next 10 to 20 years. I wonder if it was essential at this particular point in time, and I would like to hear the Premier give us his thoughts when he had this situation presented to him and if he agonized over it at all, as I think he probably should have.

HON. MR. BARRETT: First of all, I think that you're aware that we're not the first jurisdiction in Canada to borrow these funds. Despite the impression that other people might want to leave — or accidentally leave — the facts are that Quebec borrowed petro-dollars first. The Ontario Minister of Finance has gone to those countries seeking dollars; he's shopping. So it is a matter of record that British Columbia is not alone, or not unique, in Canada in doing that.

Interjection.

HON. MR. BARRETT: Now just a minute. A question of morality on what basis? Are you talking about the morality of where you borrow money from? Was it right for Canada to borrow funds from the United States when the Vietnam war was on? Is it moral for us to buy, under the former government, machinery for our dams from Soviet Russia? Who is going to set the standards of morality? When this government....

Interjection.

HON. MR. BARRETT: Let's be reasonable about the kinds of situations we find ourselves in the world. Your party had a Member who used to rail against everything that was red. Anything to do with communism was terrible, and everything else, yet the Crown corporation borrowed from the Soviet Union. They bought from the Soviet Union. Now did anybody in your party make the case that we shouldn't trade with the Soviet Union? Nobody.

AN HON. MEMBER: South African wine.

HON. MR. BARRETT: Well, South African wine is an illustration of an area where you can make a move. You can make a move.

Interjections.

HON. MR. BARRETT: I'm not here to pass moral judgment on the world. The government....

MR. R.H. McCLELLAND (Langley): You did already.

HON. MR. BARRETT: Oh, don't be so stupid. You know, I really find your arguments somewhat dull. I want to stick to the Member for Saanich (Mr. Curtis) and his rational approach. If you want to add in other remarks, you get up and throw them in.

The fact is, Quebec borrowed first — a Canadian jurisdiction. Ontario, under a Tory government, sent the Finance Minister shopping, as you described it. Correct. We borrowed. Okay. The Minister of Finance federally has encouraged all jurisdictions to seek outside funds. The Municipal Finance Authority of British Columbia is looking at the possibility of borrowing funds. And who's the chairman? Who was the chairman? Will you be advising them not to look at petro-dollars? That would be unwise if you do.

MR. CURTIS: At this time, I think it would be.

HON. MR. BARRETT: I think you'd be unwise. The jurisdiction of Quebec under Liberal administration, the Tories in Ontario and the federal Minister. Now, if you have a great case of morality against the Arabs, I think you owe the public exactly what your explanation is.

If you're upset because of what the OPEC nations are doing, then you're not a student of history. They are doing what any national government should do to protect its own interest, what we should have been doing with our oil and gas years ago, and what we should do federally and not get into Syncrude deals.

Interjection.

HON. MR. BARRETT: You can't have it both ways, my friend. It hurts.

AN HON. MEMBER: Missed the bus!

HON. MR. BARRETT: Oh, listen! Tch, tch, tch, tch. Mention Syncrude and, zip, down goes the logic. Oh, missed the bus!

The OPEC nations were being exploited. I'm making an observation of fact, not one of emotion or one that I would like or fancy. They were being exploited, and they decided: "Okay, we've had enough of this." They came together as a bargaining

[ Page 703 ]

unit, just as doctors and lawyers do, and they established their fees, not for service but for oil. We didn't like it. Do you blame us for not liking it? We selfish, greedy people in the west who have been living off their resources all those years all of a sudden got stung. They began to understand the game of capitalism and free enterprise.

The first thing we did in the western world, as soon as they understood our game, was attack them for playing under our rules. We said to the Arab nations: "You're trying to blackmail us." Well, has anybody ever heard of the British Empire's gunboat diplomacy? Who recalls the 1956 invasion of Egypt? That wasn't blackmail; that wasn't a threat. That was outright war.

Who recalls just within the last 24 months Mr. Kissinger's statement, "offhand, unguarded" to the Arab nations, saying: "Maybe we'll have to take military action." That's what Kissinger said. The old gunboat elbow came right up and then he said: "Oh, but I didn't really mean it that way." How did the Arabs interpret it?

MR. PHILLIPS: Are you in international affairs now?

HON. MR. BARRETT: You asked the question; I'm giving you the answer. He asked a question about centralizing most....

Interjection.

HON. MR. BARRETT: Oh, well, you ask nonsense questions.

SOME HON. MEMBERS: Oh, oh!

HON. MR. BARRETT: I'm sorry. You ask questions to the best of your ability, even if they are nonsense. (Laughter.)

Mr. Member, the situation has reversed itself. All of a sudden, the Arabs were in a position to centralize capital away from traditional capital centralization sources. My predecessor used to talk about the gnomes of Switzerland.

AN HON. MEMBER: Zurich.

HON. MR. BARRETT: Zurich. And we never did find out in Liechtenstein and Commonwealth Trust, but we'll leave that one for a little bit.

Predecessors in my party talked about Wall Street and centralization of capital there. I often talk about London and traditional money markets. Well, the whole world has changed, Mr. Member, and all the wringing of hands, gnashing of teeth and wishing for the past is not going to change it. The Arab nations hold the whip hand on energy, have centralized a great deal of capital and now want to recycle it. It's available for recycling under the present system. Whether one likes capitalism or not, just think how cataclysmic it would be if the Arabs had decided not to recycle within the present monetary system at the international scene. They could have destroyed our way of life in North America and every western democracy along with it. They decided to play the game the way the capitalists taught them.

HON. E. HALL (Provincial Secretary): Most of them would be Socreds.

HON. MR. BARRETT: Most of them would be Socreds? No. They are much too clever for that. They have shown that, first of all, through public ownership they are protecting the resource that God gave their nations. They're using practised business principles to maximize the resource, and they have the funds.

The world turns on that kind of financing and we're in the world. We were second to Quebec for the opportunity of borrowing those funds. Those funds do not have equity. Some people, unfortunately, are trying to leave the idea politically that they do have equity. They don't. They are straight borrowings, just as we have made borrowings in the United States, just as we've made borrowings elsewhere. They're straight borrowings. So there's nothing mysterious about the nature of the loan.

The only thing that is missing is the identity of the country and, at their request, we're not revealing it. But we say it's petro-dollars. Now there are about eight countries involved. It's eight-to-one you'll be right if you guess. (Laughter.) That's pretty good. No, seven-to-one. I've already said, because of a statement by someone who said he was a finder, that it was not Kuwait, so it's seven-to-one. But I wanted to eliminate that story going around that we owe someone a finder's fee. It's simply not true, and we've said that it was not Kuwait. So that's really where we're at internationally.

I don't know what the answer is beyond that, Mr. Member, in terms of making a moral judgment. I don't know. I have to speak a little bit emotionally about this because I have a little bit of a thing, too, for other reasons — and you can reflect on that. But have the Arabs done anything different than what the British and the Americans did?

If the British had the opportunity to do it again, they would. If the Americans had the opportunity to do it again, they would. And if Canada had an opportunity to do it, they would. There is such a generosity in mankind when there's an absence of responsibility. We're no better or no worse than other human beings. We all live a little bit of hypocrisy on the face of this earth. To make judgments about the Arab nations protecting their own resources is a bit

[ Page 704 ]

vacuous, especially in this provincial House with 2.5 million people, not in the centre or the maelstrom of international affairs. We're not the first jurisdiction in Canada to borrow, not the only one seeking. And the federal Minister says: "Go and borrow outside; that's where the money is."

Now I have always taken the position that a buck is a buck, and I have disagreed with my federal party on its attitude toward American investment in Canada. I don't believe that the nationality of a dollar influences its policy. The people who use the money are the ones who determine the policy. I think there is room for in equity argument — but on straight borrowing? A loan is entirely different. The Member for North Vancouver knows exactly what I mean.

The federal legislation on determining the entry of foreign dollars on ownership: that's an entirely different matter. I know that the Socred Members would not want to leave the false impression with the people of this province that there is equity involved in this borrowing. There isn't.

We have to borrow a great deal of money. We have to. We have no option. Now whether you agree with the reasons why we have to borrow it or not, that's your political choice, but the facts are that we owe a great deal of money on the Columbia River project. That's a fact. It's regrettable.

Interjection.

HON. MR. BARRETT: Well, the money that is going to the cost of the Columbia River treaty is money, had we not had to pay for those additional costs, that would have gone to Site 1 and the Pend-d'Oreille.

The $800 million for the Columbia River has to be made up somewhere. Isn't that true? The fact is that we were left with that mess. We were left with a legacy of making that $800 million. If you want to prove otherwise, then prove it. But you don't dispute that fact. So we have the limited option.

So there you are, Mr. Member, and it's a choice that we've made.

MR. PHILLIPS: What's $100 million?

MR. CURTIS: I appreciate the time the Premier has taken to give us a bit of a history lesson, and also perhaps to move away from the central issue, but again....

HON. MR. BARRETT: Those were the questions you asked.

MR. CURTIS: Yes, okay. Again, no qualms, no real doubts about going to the Arab countries when it was not absolutely essential. You nodded in agreement earlier, as I understood your reaction to my statement, that we know that if things continue as they are at present over the next several years, then we will be at the door of the Middle East nations seeking very large sums of capital.

HON. MR. BARRETT: Every country.

MR. CURTIS: Okay. But when you were thinking about this, were you not concerned, through you, Mr. Chairman, about the PLO — the Palestine Liberation Organization? Did you not think about.... . ? You know what I mean. You're not stupid, Mr. Premier.

SOME HON. MEMBERS: Oh, oh!

MR. CURTIS: You're not that stupid. Okay, I'll amend it. That may not be party policy. The point is that you spoke a few minutes ago, or perhaps an hour and a half ago, about this piling up of money in the central banking system in Canada, and you went to great pains to describe the fact that that bothers you, and bothers your party. But while it is wrong on this hand, apparently when you decided to go to the Arab nations for capital borrowing, it doesn't bother you. Now I have difficulty understanding your rationale.

Interjections.

HON. MR. BARRETT: If the Canadian market can make the money available, then we'll borrow it.

MR. CHAIRMAN: Order, please.

MR. CURTIS: I wasn't quite through, Mr. Chairman.

HON. MR. BARRETT: Okay.

MR. CURTIS: I don't think that we have any answer. Oh, I see that the Premier is getting advice from the Minister of Economic Disorganization. Up to now the discussion has been going pretty well.

Interjections.

MR. CURTIS: Mr. Chairman, through you to the Premier, we can assume therefore.... Again, I put the question. No qualms about going to the Arab nations at this particular time to save a quarter of a point or a half a point or whatever it might be. No concern about what has happened in the Middle East and no concern about your inability — recognized inability and admitted inability — to tell the people of British Columbia the nation or origin. Those are the points I want to leave the discussion on.

HON. MR. BARRETT: Mr. Member, since you appear to be an expert on the Middle East, will you

[ Page 705 ]

define the countries you associate the PLO with? Out of the eight Arab nations you have a responsibility to tell me in this House who you associate the PLO with and what countries they are operating in to prove that you know what you are talking about.

MR. CURTIS: Do I have to give the complete list? Syria, Algeria....

HON. MR. BARRETT: Does Algeria have petro-dollars?

MR. CURTIS: No, but you asked the nations which are associated....

HON. MR. BARRETT: Come on, let's go.

MR. CURTIS: Notice, we are discussing your estimates, not mine.

HON. MR. BARRETT: No, no. But you've made a statement that I am challenging you to back up.

MR. CHAIRMAN: Order, please. No Member is required to answer any question if he doesn't wish to. However, the Hon. Member for Saanich and the Islands has the floor.

MR. CURTIS: Well, I'm not writing an exam or doing an oral exam this afternoon. I ask the Premier again: did he have any qualms about moving into the Middle East money market? We had the history lesson with respect to British gunboat diplomacy; we were told about the Vietnam war. There were interjections with respect to South Africa again. It seems to me that a number of people in B.C. are sorry that this province had to go, on behalf of one of its Crown corporations, to the Middle East at this time, and, further, that because of the agreement the Premier was not able to tell us the country or origin.

Now, if we're answering questions, why doesn't the Premier tell this House and the people of British Columbia the country of origin? I am not under cross-examination this afternoon with respect to the PLO or any other organization. But there is concern about borrowing in the Middle East.

HON. MR. BARRETT: I don't know what you are trying to get at but I think I have exposed you as not really knowing what you are talking about. You were the one who raised the PLO and you are suggesting to everyone in this House that every single one of the nations that hold petro-dollars has allegiance or a connection with the PLO. You don't even know yourself.

MR. CURTIS: You know that's not correct.

HON. MR. BARRETT: Well, you're not correct because somehow you brought the PLO in as if it had a formal association with some government from whom we were borrowing money. How disgraceful! How disgraceful! You are ignorant, sir.

MRS. JORDAN: Withdraw!

HON. MR. BARRETT: Why should I withdraw? He's proven that now. I withdraw. There is an absence of facts in your argument. I don't know what you're reaching for. I am not clear on what you're reaching for but, quite frankly, in my opinion, you reveal a shallow knowledge of the situation in the Middle East when you stand in this House and somehow infer that the PLO is officially connected with any Middle East government.

MR. CURTIS: I asked if you were concerned.

HON. MR. BARRETT: Oh, oh. Well, okay, Mr. Member, you waffle in your own lack of argument. But I'm telling you this: to raise the question of the PLO when the federal government recently entertained the nation of Iran for one.... Are you leaving the impression that the Shah of Iran, whom the federal government had in this country recently and has also had petro-dollars, is in any way connected with PLO? The Lebanese government. Do you know that? You named Syria. I bet you couldn't even rattle off the rest of the countries in the area.

MR. CURTIS: I could.

HON. MR. BARRETT: I'll bet you couldn't.

HON. MR. LEA: Tell us.

HON. MR. BARRETT: I'll bet you couldn't. And all we've witnessed is some mysterious attempt to appear sanctimonious without any information at all, Mr. Member. I think it's disgraceful.

MR. BENNETT: I think the question was valid before we got off on the sidetrack and it's this. The question was that this provincial government has, in other areas, chosen to enter the international field of sanctions normally left to the federal government. You have chosen to involve yourselves in international affairs through sanctions, through the LCB not buying South African wines. It's reasonable, then, for the Member for Saanich and the Islands to ask whether you question all such international dealings with the same moral judgment. It was a reasonable question for him to ask. In response, Mr. Chairman, to the large amount of public reaction...

MR. CHAIRMAN: Order, please,

[ Page 706 ]

MR. BENNETT: ...there was to South African wines — and there was a lot of public reaction such as letters to the editor — and the government responded. The Member for Saanich and the Islands expresses equally that there apparently has been — and I've seen the letters to the editor — a large amount of public response to where the Premier as Finance Minister and financial agent has chosen to borrow money.

AN HON. MEMBER: Incredible!

MR. BENNETT: Because this provincial government has moved into the international area not usually dealt with by provincial governments, because it has gone into an area of international sanctions, an area usually covered by our federal government, I think the Member for Saanich and the Islands (Mr. Curtis) has a strong, valid reason for asking the rationale on how you are going to make such international judgments in the future.

He asked a perfectly legitimate question as to whether you had any qualms, any uneasiness, about this borrowing in the Middle East and if those qualms and if that uneasiness were part of the reason why the name of the lending nation wasn't given to the people of British Columbia. I think it is a valid question. Without a history lesson, now that the province is taking international action I think we should have a reason for these moves.

HON. MR. BARRETT: I think I've made it clear a number of times that we are going to have to spend a lot of money on hydro in this province and we are going to markets to borrow. To say that we haven't gone internationally before is incorrect. We have gone internationally. We have gone to the United States. That is international. We have gone to England. We have gone elsewhere in the history of this province. The question is whether or not we should borrow from Arab nations.

Then the Member threw in the PLO without any identification at all of what country he says the PLO is associated with that he would not borrow money from. Certainly I gave every consideration to the decision.

Interjection.

HON. MR. BARRETT: Don't talk to me about the Middle East when you display your ignorance of that particular subject. You don't know what you are talking about when you associate the PLO with all governments there. It is a bit of an insult to leave those generalized statements with this House without defining your own moral standards.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports progress and asks leave to sit again.

Leave granted.

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 5:59 p.m.

[ Page 707 ]

APPENDIX

Honourable Members, — The Honourable Member for West Vancouver–Howe Sound raised the question of whether the statements tabled last Thursday in the House constitute a question of privilege for determination of the House, that is, whether a prima facie breach of parliamentary privilege arises from the publication of a broadcast by a radio commentator.

The question to be determined is whether, in this particular case, the broadcasted statement or the commentator offends the privileges of Parliament, or whether he interferes with the rights and immunities of individual members in the exercise of their parliamentary duties.

The privileges of the House are stated in general terms in May, 16th edition, pages 42 and 43, as follows:

Parliamentary privilege is the sum of the peculiar rights enjoyed by each House collectively as a constituent part of the High Court of Parliament, and by members of each House individually, without which they could not discharge their functions, and which exceed those possessed by other bodies or individuals. Thus privilege, though part of the law of the land, is to a certain extent an exemption from the ordinary law.

When any of these rights and immunities, both of the members individually, and of the assembly in its collective capacity, which are known by the general name of privileges, are disregarded or attacked by any individual or authority, the offence is called a breach of privilege, and is punishable under the law of Parliament. Each House also claims the right to punish actions, which, while not breaches of any specific privilege, are offences against its authority or dignity, such as disobedience to its legitimate commands or libels upon itself, its officers, or its members. Such actions, though often called "breaches of privilege" are more properly distinguished as "contempts".

Beauchesne's 4th edition has a number of citations which summarize the matter of newspaper and other public charges against members:

Citation 113 states: "An attack in a newspaper article is not a breach of privilege, unless it comes within the definition of privileges...."

"Libels upon members and aspersions upon them in relation to Parliament and interference of any kind with their official duties, are breaches of the privileges of members."

In paragraph 3 of citation 108 Beauchesne states: "...but to constitute a breach of privilege they much concern the character or conduct of members in that capacity, and the libel must be based on matters arising in the actual transaction of the business of the House."

There are therefore two questions to be answered:

1. Does the broadcast concern the character or conduct of a member in his capacity as a member?

2. Does the matter constitute undue interference with the privilege of an honourable member to exercise his duties freely?

It is also acknowledged that complaints of alleged threats, imputations, or libels must be raised at the earliest opportunity for the House immediately to vindicate its powers and privileges.

It is the duty of the Speaker to determine if the matter is one calling for intervention before proceeding to the normal business of the House, i.e., a prima facie breach requiring immediate interposition. It is also his duty to determine if the

[ Page 708 ]

matter has been raised at the earliest opportunity (see May, 17th edition, page 378: "A matter of privilege which claims precedence over other public business should be a subject which has recently arisen." Priority was refused, for example, when the question was raised on Tuesday following its occurrence on Saturday).

Bourinot says in the 4th edition, page 306:

"The Speakers of the English Commons have decided that "in order to entitle a question of privilege to precedence over the Orders of the Day, it should be some subject which has recently arisen, and which clearly involves the privileges of the House and calls for its immediate interposition".

In the February 21, 1974, Journals of our House, in the matter of a libelous attack on the Honourable Member for Langley, I stated that on the basis of the parliamentary authorities "the key is that the reflections may tend to interfere with the member's capacity to carry out his or her duties." At a recent conference attended by over 20 Commonwealth Speakers this view was taken by those Speakers present in panel discussion.

In the same Journals at page 33, I quoted also from a Committee report of the 1963 British House:

Your Committee and the House are not concerned with setting standards for political controversy or for the propriety, accuracy, or taste of speeches made on public platforms outside Parliament. They are concerned only with the protection of the reputation, character, and the good name of the House itself. It is in that respect only and for that limited purpose that they are concerned with imputations against the conduct of individual members." (H.C. 246, 1963/64.)

It must be shown that the conduct impugned relates to a member whilst and only whilst he was a member of the House, since, as Beauchesne puts it, the "conduct of members in that capacity" is the sole concern of the House in matters of privilege when members are attacked publicly.

Looking at the imputations to determine if they satisfy that firm rule, that is, the member in his capacity as member, we find the following:

The Hon. Minister of Human Resources was not proclaimed elected under section 127 of the Provincial Elections Act until after September 12, 1972, nor was he sworn in and enrolled as a Member of the Legislative Assembly until the evening of September 15, 1972. Due return of his writ of election was September 29, 1972.

At the times referred to in the allegations of the commentator, there was no Legislative Assembly, it having been dissolved on July 24, 1972. The Thirtieth Legislature did not meet for the first time as a lawful body until October 17, 1972, having been summoned on September 21, 1972. If one is precise, and in matters affecting the laws of Parliament precision is necessary, the matter of conduct and the allegations have to do with the honourable member before he was in fact either enrolled or summoned as a Member of the Legislative Assembly. Since privilege attaches from the date a Member of Parliament is first summoned (see May, 18th edition, page 96), attacks upon him for conduct before he was a member of the House are not therefore matters requiring the protection of the reputation of the House itself, in the words already quoted from the British Committee (H.C. 246, op. cit.).

Whether the operative date of his becoming a Member of the Legislative Assembly is the day of summons of the Thirtieth Parliament, the return date of his writ of election or the first meeting of the House need not be decided since all three

[ Page 709 ]

significant dates occurred after the events in question here.*

Mr. Speaker Michener has put it aptly in House of Commons Votes and Proceedings, June 19, 1959, page 583:

"...the House is asked to direct its Committee on Privileges and Elections:

1. To examine the actions and statements of the Honourable Member for Peel in connection with the evaluation and expropriation.

2. To report generally on these matters.

3. In particular, to consider and report whether the conduct of the honourable member was contrary to the usages of the House, derogatory to the dignity of the House and inconsistent with the standards which Parliament is entitled to expect from its members.

The House of Commons has concerned itself with the conduct of a member outside of the House from time to time for example where a member used his public office for private gain, has compromised his independence by taking money or has been found guilty of some scandalous crime. It is provided by law (the Senate and House of Commons Act, R.S., c. 147, s. 1) in the section dealing with the independence of Parliament, that no member shall hold any office of emolument under the Crown nor enter into any contract with the Government of Canada for which any public money of Canada is to be paid on pain of forfeiting his seat.

On the other hand, it is clear that many acts which might offend against the law or the moral sense of the community do not involve a member's capacity to serve the people who have chosen him as their representative nor are they contrary to the usage nor derogatory to the dignity of the House of Commons. Members of the House of Commons, like all other citizens, have the right to be regarded as innocent until they are found guilty, and like other citizens they must be charged before they are obliged to stand trial in the courts. Parliament is a court with respect to its own privileges and dignity and the privileges of its members. The question arises whether the House, in the exercise of its judicial functions with respect to the conduct of any of its members, should deprive such member of any of the safeguards and privileges which every man enjoys in any court of the land.

The second question is whether there is a threat to the member or an imputation in the commentator's statements or conduct which "may tend to interfere with the member's capacity to carry out his or her duties".

Obviously the Hon. Minister of Human Resources is not under any threat of possible prosecution in the courts by the commentator or anyone else under either the Provincial Elections Act, R.S.B.C. 1960, or the Canada Elections Act, c. 14, R.S.C. 1970, as even a cursory glance indicates. The words in section 172 of the Provincial Elections Act: "No payment — or deposit — of or in respect of the election..." will thus never be sifted by a court to determine if moneys paid to

*See May, 18th edition, page 254: "'A Parliament' in the sense of a parliamentary period, is a period not exceeding five years which may be regarded as a cycle beginning and ending with a proclamation. Such a proclamation (which is made by the Queen on the advice of her Privy Council) on the one hand, dissolves an existing Parliament and on the other, orders the issue of writs for the election of a new Parliament and appoints the day and place for its meeting. This period, of course, contains an interregnum between the dissolution of a Parliament and the meeting of its successor during which there is no Parliament in existence.", and at pages 254, 255:

"A new Parliament is summoned in Pursuance of a proclamation issued by the Queen with the advice of the Privy Council. This proclamation which also dissolves the old Parliament...appoints a day and place for the meeting of the new Parliament."

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a Provincial candidate and applied according to the Minister's evidence to a Federal constituency organization and to an intended Federal campaign organizer constitute a "payment or deposit" in respect of a Provincial election. Section 191 of the Provincial Elections Act bars such a judicial finding.

Also clearly, there is no threat to the Hon. Minister of a prosecution from the commentator or anyone else for any alleged violation of the Canada Elections Act as section 90 bars such a prosecution.

What threats are contained in the earlier communications? That if the Minister does not resign the commentator will broadcast his allegations? Not at all. That if the Minister did not clarify the matter of receiving a $200 cheque into his personal joint account that the commentator would broadcast his information? If that is a threat, it was not regarded so by the Hon. Minister who could have disclosed any threat to the House on March 6 or 7. To the contrary it shows a desire to hear the Minister's answer. Not having been treated as a threat it would not conform at this late date to the requirement that alleged threats against members must be acted upon without delay. Any interference of any kind with their official duties is, according to Beauchesne's 4th edition, citation 113 (op. cit.), a breach of privilege but such matters cannot in such case obtain precedence before Orders of the Day if they are not brought before the House promptly. The communications of March 6 or 7, 1975, between the commentator and the Hon. Minister or his aide, do not in the Minister's own statement of last Thursday, show any undue interference with the honourable member with respect to his official duties, and even if it were so, I cannot rule that they are recent enough to come within the terms set out in Sir Erskine May, 17th edition, page 378.

Thus neither question can be answered in the affirmative. The privileges of the House have not been shown to be breached by any matter concerning the character or conduct of a member in his capacity as member. The article referred to has not been shown affirmatively to pose a threat of "undue interference" with the privilege of the member to exercise his duties freely. Finally, the earlier exchanges between the Minister and the commentator were not raised in any event at a time when they might qualify for examination and cannot be raised now except by Notice of Motion in the usual way on the Order Paper.

Another matter related to the events of last Thursday should be clarified for the records.

If a member seeks leave to make a statement, he cannot by virtue of the indulgence of the House utilize the occasion for statements that he could not otherwise deliver other than by a substantive motion. If anyone questions this assertion, I recommend study of Mr. Speaker Shantz's statement at pages 70 and 71 of the February 24, 1958, Journals of the House, in a similar case.

When a member has a matter of privilege to raise concerning another honourable member he does not do so by seeking leave. If it is on the basis of a breach of privilege, he must take responsibility for raising it and must be prepared personally to press his charge by suitable motion should the Speaker find it to constitute a prima facie case.

Last Thursday the Honourable Member for Saanich and the Islands seemed puzzled that I asked him whether he was making a charge and he suggested my question was out of order. To the contrary, no member is entitled to assume that obtaining leave to make a statement confers carte blanche to launch a personal attack on another member. After raising it in proper fashion he must be prepared to support his attack by a substantive motion. If the purpose of his making a statement were to call for a judicial inquiry (which it did) then it would have to be by

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Notice of Motion — not in the guise of a matter of privilege. The House vindicates its own dignity. Privileges of Parliament are not consigned to courts to determine, they are raised in the House by proper means and may, where valid, be settled by the House in a proper way, not by statements by way of leave.

For guidance of members, including the Member for Saanich and the Islands, I wish to quote from the decision of Mr. Speaker Michener on June 19, 1959, Votes and Proceedings, pages 582-586, House of Commons, Canada:

It has been strongly urged by some members that the House should not set in motion its power to try and to judge the conduct of a member unless such member is charged with a specific offence. It is urged further that not only must be charged, but that he must be charged by a Member of the House of Commons standing in his place.

In my view, simple justice requires that no honourable member should have to submit to investigation of his conduct by the House or a Committee until he has been charged with an offence.

On the authorities it appears to be open to an honourable member to confront the House with charges against another member, implicit in documents in the possession of the House, but in my view the charge must be there.

In the case before us no honourable member has taken the responsibility of making a specific charge against the Honourable Member for Peel. At page 4829 of Hansard the Honourable Member for Essex East (Mr. Martin) says of the Leader of the Opposition in whose name the motion stands:

He made no charges, that is true. That is his continuous answer to the Prime Minister who repeats, "Make charges". The Leader of the Opposition said, "We have no charges to make".

If there is a charge then which the Honourable Member for Peel should be called upon to meet, it has to be implied from the reasons for judgment already referred to. Did the learned judge in commenting on the evidence say or imply that the Member for Peel had been guilty of a criminal offence, perjury for example? Certainly not, and if he had it would have been his responsibility to bring the matter to the attention of the Crown for prosecution. Did he intend or imply that the honourable member's conduct was an offence against the independence or dignity of the House of Commons, about which as a former member of that House he would be cognizant and alert? He does not say so. There is no direct charge of this kind in the judge's observations about the Honourable Member for Peel, nor has any member of this House taken the responsibility himself of saying that such a charge must be implied from such observations or of saying what the charge is. Instead, the supporters of the motion say in effect, "Let the committee see if there is anything of this kind with which the member could be charged".

In considering the matter raised by the Honourable Member for West Vancouver–Howe Sound I quote also from Mr. Speaker Lamoureux in Votes and Proceedings of the same House of June 9, 1969:

The second procedural difficulty comes from the form of the motion proposed by the Honourable Member for St. John's East. In my view, the motion should follow the question of privilege as a logical sequence. Such a motion cannot merely ask that the committee investigate whether or not there has been a breach of privilege, it must allege a breach of privilege.

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It should not simply propose that a matter be investigated to determine if there is or is not a breach of privilege.

This proposed motion is in fact, a simple reference of a newspaper article to the committee, asking the committee to make a finding. That is not a motion of privilege but, in my view, an ordinary substantive motion, which, of course, can only be moved in the usual way with the appropriate notice.

In the result, nothing occurred on last Thursday which could set into motion the processes relating to breach of privilege, either by the actions of the radio commentator or the statements made in the House.

G. H. DOWDING, Speaker