CONTENTS

Committee of Supply: Department of Economic Development estimates.

On vote 34.

Mr. Wallace — 2757

WEDNESDAY, MAY 28, 1075

The House met at 10 a.m.

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

ESTIMATES: MINISTER OF
ECONOMIC DEVELOPMENT

(continued)

On vote 34: Minister's office, $85,129 continued.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, one of the main planks in the 1972 election by this government, and a great deal of the discussion that took place when the NDP was in opposition was on the failure of the former administration to diversify our economic base. The then-Leader of the Opposition and now Premier constantly talked of the tremendous need for this province to diversify the economy and not be so dependent on our basic raw materials. In other words, there was a constant plea for the development of secondary industry in this province, and a desire on the part of the NDP to process many of our primary products and by so doing, create jobs.

I am puzzled on one or two basic aspects of this government's economic development policy. First of all, it seems that to achieve these goals I mentioned, this Minister has had the budget on his department reduced. It would seem to me that while we on this side of the House have been talking about excessive government spending, our criticism has been mainly directed to those areas where the spending itself does not increase our economic wealth. I think it is all very well, and would be part of any government's policy, to increase social services in the fields of housing, hospital care, schools and highways, but it is certainly a very basic fact of economic life that if you don't have the revenue coming in, you can't have the expenditure going out. Despite the policies espoused by this government when they were in opposition about how they would widen the economic base of the province, it seems to me that there is very little evidence that this is happening.

I understand that the statistics suggest that we need 70,000 new jobs per year in this province. Since, constitutionally, we cannot appreciably affect the rate at which our population increases in British Columbia.... I realize that the federal government has presently embarked on a study of immigration, but, basically, we know that a large number of people from other parts of Canada choose to move to British Columbia. With an increase in population that we cannot, by and large, control and with the certain limitation on what you can achieve simply from your basic raw resources — and certainly we have found that at the present time, with the slump in the lumber industry — it is very obvious that if this province is to develop in any rational and intelligent way, then the key has to be in diversification and the development of secondary industries.

The Minister has himself talked about the concept of adding value to our raw resources in one way or another — processing or manufacturing before they are exported. I understand that Ontario, for example, has been very successful in attracting many small industries. I wonder what mechanisms or channels they have used to be successful in this regard, which British Columbia doesn't seem to be achieving.

On that aspect, how much of our shortcomings relate to the lack of budget given to the Minister in his own department? Could he do a better job if he were given more money?

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Oh, don't give him more money.

MR. WALLACE: The Member for West Vancouver–Howe Sound says: "Don't give him more money." I was just making the point that there seems to be a lack of achievement in this Minister's department in terms of the two or three points I've raised — attracting secondary industry and the processing of our resources and so on. Why is this?

There are reasons, which I'm going to touch on in a minute, and on which I expect the Minister to quote, particularly the difficulties we have in getting fair play with eastern Canada in a variety of areas such as freight rates, tariff barriers and many of the other points that the Minister has outlined in the provincial brief which was presented to the federal government in February in preparation for the negotiations on the General Agreement on Trade and Tariffs in Geneva.

Anyone who looks at the economic picture in British Columbia has to wonder whether this Minister in his department is really just taking a rather piecemeal approach in a rather insignificant way to economic development, or is there some overall blueprint, some general long-term plan which the government is following to achieve some of these goals and particularly the goals of widening our economic base.

As I mentioned a moment ago, the Minister put out a release back in February entitled: "Western Industry Ministers Call for Tariff Changes." The whole thrust of the Minister's press release of that time is to ask for greater emphasis on the manufacturing and processing capabilities of the western provinces and particularly British Columbia. One of the points which the Minister makes is that there's very limited communication and information being provided by the federal government to the

[ Page 2758 ]

western provinces to develop any kind of co-ordinated position by which Canada nationally can negotiate at Geneva. Since the Minister made the statement back in February, has there been any improvement in the communication and exchange of information between British Columbia and the federal government?

I understand, in fact, that this Minister asked the federal government if British Columbia could be represented at the table in the negotiations on the General Agreement on Trade and Tariffs — that it was his feeling that this gap in information and communication was a very serious one and I understand the request was made to the federal government that we be involved directly in the negotiations. Could the Minister tell us what response he got from the federal government on that score?

Some of the other points which the Minister makes relate very much to asking the federal government to look at the difficulties we have in our economic development because of tariff' barriers imposed to protect industries in eastern Canada. I would be interested particularly in his comments, for example, on the steel industry because we know that this government is looking at the concept of building its own steel mill — or building a steel mill somewhere in British Columbia. The kind of statement that appears in the Minister's brief to the federal government is asking to make the federal government more responsive to western Canadian needs and reducing its burden on western Canada.

I'd like to ask the Minister about one particular statement that's made in the brief about the fact that manufacturing activity is all encouraged in eastern Canada but all that western Canada does is provide raw materials. One of the statements is as follows:

"It results in prices of protected goods being substantially higher than they would otherwise be, and the higher cost of protected goods consumed in western Canada constitutes an unrecognized transfer payment, estimated to be at $800 million per year, from western Canada to central Canadian industry."

I wonder if the Minister could perhaps explain in some detail what particular goods he's referring to — the protected goods concerned — and the fact that the effect of the tariffs on these protected goods constitutes an unrecognized transfer payment of $800 million a year. That seems to me to be a pretty substantial figure and I'd like to know how that figure was derived. Which particular kind of goods are we talking about? Is it tables and chairs, or shoes or electric lamps, or what do you mean? Which are the protected goods? How did you arrive at $800 million?

What progress are we making in British Columbia towards the potential that we could manufacture these goods ourselves? I presume that the reason central Canada wants to keep the tariffs high is to prevent the importing of these same goods produced in foreign countries, and I presume that the Minister in turn would like to be able to manufacture these goods and sell them abroad. It makes a lot of basic common sense but I'm just puzzled to know why we're not making more progress in this direction.

It's obvious that if we have to create more and more jobs, they have to be created in the processing and manufacturing business. But it's also equally axiomatic that if we produce the goods and can't sell them abroad then we're not much further forward. I was very puzzled by this specific figure of $800 million a year that's quoted in the brief which this province presented to the federal government prior to the GATT negotiations.

All through the brief the Minister keeps coming back to the point that western Canada has to look to the development and diversification of manufacturing activity as a means of promoting and influencing economic development. On that point, too, I wonder if the Minister could give us some idea of what, if any, progress is being made regarding transportation. We've heard a great deal from the Western Economic Opportunities Conference about freight rates. My information is that the Premier didn't show a great deal of interest in that part of the meeting. That's a minimal point compared to the fact that no progress seems to be being made.

I understand that in the other three prairie provinces they have finally got around to the point of really investigating the costs of the railroad operations. I've done some reading on this and find it very, very clear that there is a substantial lack of basic information about railway costs. I understand that Justice Hall has been appointed as royal commissioner for the three prairie provinces to do a complete study of branch-line costs in these three provinces. Transportation, particularly by railroad, is such a vital part not only of the history of this country but the continuing economic prosperity of this country. Lord alone knows that we have found out what happens when we have a rail strike or a dock strike — the economy of the province just nosedives. So I am simply saying that if British Columbia, along with the other three western provinces, took part in that Western Economic Opportunities Conference and one of the outcomes is a royal commission to try and straighten out the mess on the railroad, why on earth is British Columbia not part and parcel of that royal commission? I understand that the detailed studies that are being done in the other three western provinces do not include British Columbia. I notice the Deputy Minister shaking his head. If I am wrong on my facts, I hope the Minister will correct what I have stated but this is the information that I have been able to uncover.

[ Page 2759 ]

Whether the facts are precise or not, I wonder if the Minister could tell us what is being done to expedite a modern transportation system. Surely British Columbia is the vital fourth key to prairie economy in terms of transportation. If you're shipping grain, minerals and other goods and there are holdups in the Fraser Canyon for whatever reason, or labour problems or a shortage of cars, the fact is that there is not much good in even getting our raw materials out of the ground if you can't ship them out of the ports.

One would hesitate to lay all the blame at the door of this Minister because many of the problems, I realize, are federal problems. But in the House the other day I asked the Minister of Finance (Hon. Mr. Barrett) about the statement of Mr. Marchand that the Clinton-Ashcroft connection negotiations are going to take another two years or something. To me this just seems to be the most blatant example of doubletalk. The federal government screams and shouts about the necessity of maintaining reliable transportation and guaranteeing our foreign customers that if they buy X million bushels of grain they will, in fact, be shipped out of our ports and delivered by a certain date. I gather that Canada's reputation as an exporter of some of these commodities is extremely low at the present time. We needn't recount all the reasons for that, but they are manifold.

I am wondering: do we as opposition Members just get up at this time every year and scream and shout, and the Minister gets up and says: "Well, we're negotiating; we're hoping to make progress"? It just seems to any observer that very little, if any, progress is being made. When one reads about the importance of overcoming the transportation problems related to the Fraser Canyon in the winter months, I would think this is something of tremendous urgency to the economy of British Columbia. Yet the few years I have been in this House, it's a perennial question that is always asked — I don't see any answers forthcoming.

The same situation seems to relate in some degree at least to the problem of the ports. Again, it's quite clear that Seattle, by forging ahead and developing container facilities and the appropriate equipment, has stolen the lead on Vancouver.

I understand now that Vancouver certainly is developing container facilities to a greater degree. But, again, have we just been asleep at the switch and find now that we could be doing much better than we are? I understand that even some of the goods that are ultimately shipped to eastern Canada are transferred at some point through Seattle rather than through the west coast ports.

I would like the Minister, if possible, to tell us more about the question of developing a steel industry and the particular point I raised as to the tariffs which protect the steel industry in eastern Canada. I would like to know, for example, if we transport Canadian-produced steel from Hamilton to Vancouver: is the total cost of the steel plus the transportation less or more than the price at which you could buy steel from Japan? This seems to be the thrust, not specifically related to steel. In your brief to the federal government, when you are talking about tariffs which protect eastern Canada, this seems to be the general kind of thrust. I am just trying to find out in specifics if steel is one of the products in particular that you were referring to.

Just the other day there was a meeting in Victoria, I understand, of steel producers, 10 members of what is called the Canadian Steel Service Centre Institute. One of the comments was made that, while one day British Columbia can economically sustain a steel mill, the population and the demand within our own area is not yet enough to make it economically feasible. Maybe the Minister would care to comment on that. I think that the last time we talked on this subject the Minister felt that eastern Canada, for its own selfish reasons, wasn't interested in British Columbia getting a steel mill, regardless of its economic feasibility. I am not particularly interested in what eastern Canada thinks. I am interested in what we can achieve economically in British Columbia.

On the other hand, I am not interested in forging ahead with a steel mill to try and prove our economic status, for lack of a better word. I think we have to be sure that before we get into this kind of development, whether it's a steel mill or an oil refinery, that we have to have the economic feasibility to do it and not just simply do it to show that we are one of the big boys who is in the race with all the other manufacturers in eastern Canada.

On the other hand, while planning is important, and I'd never question the need to do the amount of research that is required, again I ask the general question: what are we doing? We seem to be planning, researching and discussing and having meetings and submitting briefs hither and yon but, you know, I think it's a legitimate question to ask: what actually have we achieved in the whole field of an overall plan for economic development since this government took over? I know we have the development corporation, but even it just seems to be dealing with relatively small aspects of development. I noticed the example of a $70,000 grant to a company producing a new type of lens for the eye, which is fine. But, again, I say it seems to me that in these efforts and in the various press releases we read, the help provided by the development corporation is not very extensive in terms of the target which I hope we have of creating 70,000 new jobs every year.

I just want to finish off, Mr. Chairman, by touching again on the question of the railway. It

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seems to me that the urgency of solving the railway problems and transportation to the coast hasn't been given the attention it deserves. The fact that we have such difficult terrain in British Columbia, particularly getting the railway or any extension or connections of the railway in the region that I have mentioned in the Fraser Canyon, means that the costs, presumably, are extremely high.

I wonder if the Minister could tell us that in his negotiations with the federal government regarding the Clinton-Ashcroft connection: is the money the big problem? Are we arguing about what the cost is going to be or what the sharing will be? Is it to be 50-50 or whatever? It was most depressing to hear Mr. Marchand say that these things take a while and he thought it would be 1978 before we could see any work beginning on it because this is the length of time it would take for negotiation. Now that was a quote which appeared in the newspapers the other day and, certainly, the Premier in answering my question in question period didn't deny that it might take that long.

He gave another pessimistic answer saying that these kinds of negotiations are very lengthy and tortuous. This would certainly appear to be the case.

Finally, on this question of the railways, on the Prairies I understand that they function on the basis of allotted costs rather than actual costs. The accusation has been made that many of our producers of timber and minerals and fruit are, in fact, being overcharged for transportation costs on the railway lines in British Columbia. The reason that you can't very well argue for or against that, apparently, is the lack of basic information regarding true costs, both in terms of operation and capital costs.

As I said a moment ago, if it seems important enough to have a royal commission to look at these very important elements on the Prairie provinces, why is British Columbia not taking part or seeking to be actively involved with the Hall commission in trying to get a better and more accurate determination of the situation on the railway lines in British Columbia?

MS. K. SANFORD (Comox): I have a few brief questions that I would like to ask the Minister of Economic Development.

In the Courtenay area there is a need for diversification in terms of secondary industry because the Courtenay area right now depends very heavily on the payroll which is provided by the Canadian Armed Forces Base. Parents in the area quite often talk to me in terms of having their own children stay in the area when they graduate from high school or university in order to work. But because there is very little choice as far as jobs are concerned, they are required to move out of the area. Parents feel that there should be greater opportunity for their own children right in the Courtenay area, and I agree with them.

Now there is a possibility of three different secondary industries locating in the area, and I would like the Minister to comment on each one of these.

First of all, there is the Trident Aircraft Manufacturing Co., which has been looking for a place somewhere in the province in order to locate. One of the areas that has been considered, as I understand it, is Comox because of the fact that there is a large airbase there which they could use. Now I know that they have had contact with the Department of Economic Development in terms of getting financial assistance. I am wondering if the Minister could inform me at this time how the plans are proceeding. Whether or not Trident is going to locate at Comox, and how soon Trident might be ready to go ahead.

The other question I have concerns a group of people in the area, and known as the Gulf of Georgia Oyster Co-operative, interested in developing a shellfish processing plant somewhere in the Courtenay area. Now I know that they have done considerable work on this in order to determine the supply of oysters and clams in the area and the kind of processing that group might undertake. I know that they, too, have been in contact with the department in terms of getting funding for that project, and I am wondering if he can give me any information about the Gulf of Georgia Oyster Co-operative.

The third question that I have relates to a study which was done in the Comox Bay area, as far as the harvesting of seaweed is concerned. The University of Victoria participated with the provincial government in doing a study of the seaweed in the area, and determined that it would probably be economically feasible to harvest the seaweed near Denman Island. I am wondering if there has been any approach made to the Economic Development department, through BCDC, for assistance in the harvesting of that seaweed. I am not aware of any approach, and I don't know of anyone who has talked about getting involved commercially in harvesting that seaweed. But I think this is another opportunity for the development of some secondary industry in the Courtenay area.

My last question relates to a study which was being conducted through the Department of Economic Development. I think it was a north island and mid-coast study to determine the possibility of locating secondary industry anywhere in the mid-island to north-island area. I understand that this study has to do with looking at transportation problems as well as doing a complete inventory of resources and the possibilities of developing secondary industry. Would the Minister please comment on this as well?

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HON. G.V. LAUK (Minister of Economic Development): With respect to the questions asked by the Hon. Member for Comox (Ms. Sanford), first, I am informed that the Trigull operation is still having difficulty with the federal government with respect to funding.

As you may know, Mr. Chairman, the British Columbia Development Corp. has already advanced over $100,000 and has committed a further $0.5 million to the project, and we understand that there is still some difficulty in negotiating the funding necessary to get the Trigull aircraft into production.

With respect to its location, I understand that Comox would be a very advantageous site for them for a number of reasons. It's near an air base. Another reason would be that the labour necessary, the highly skilled labour, could come from the air force there on their retirement and so on and this would be a natural secondary industry for the Hon. Member's area.

Certainly we have brought this to the attention of the Trident Co. and they are, I understand, seriously considering that location.

They have a number of alternatives, They could remain where they are in Richmond or they could move to Comox or they could move perhaps to near Victoria, but these are the three major areas that are under consideration.

The Gulf of Georgia Oyster Co-operative: well, as you may or may not know, Mr. Chairman, the development corporation has funded that co-operative through a loan. I'm not aware of the recent proposal, but we certainly have found them efficient enough to support them financially in the past, and there's no reason why they couldn't be fully considered for any new programmes they might have in mind.

With respect to the north coast mid-island study, that will be available soon as the final drafts are coming into my office and we should have an idea of the base information of that area — what kind of economic trends we can expect to see, what changes if any can be brought about by government or industry of encourage or increase growth, desirable growth.

About the seaweed, I'm not informed that the seaweed study is being monitored by our people doing a marine study for the government. I'm not sure what the results of this study are at the moment. I'll certainly keep the Hon. Member informed.

Interjection.

HON. MR. LAUK: Not that I'm aware of, no.

A number of questions were asked by the Hon. Member for Oak Bay (Mr. Wallace). I'll be as brief and as precise and as speedy as I can. They were broad questions involving a number of areas. It would take me an hour and a half or two hours to describe to you all of the different programmes and activities that this little department and this little staff have undertaken in an efficient manner. I'd like to say that there's been a lot of criticism about the small number of people involved in my department, and people have called for expanded civil service. In my area they have called for a retraction of the civil service, and in other areas. They have called for more budget and more money and so on.

The question of efficiency and good advice and economic planning and assistance to the business community, and to the people of this province does not necessarily depend on the number of people you have or the amount of money you have to spend. You can do so very efficiently with a small group of people, task force oriented, very highly professional and efficient individuals indeed. I'd like to compliment my department. With the staff they have had they've done a first-class job in responding to industry and government needs in the economy.

Now the question of diversification. It's been argued that there are two things that need to be diversified in order to take this province away from the boom-and-bust syndrome of a primary — extract ion, resource — based industry. Diversify your markets to protect and keep healthy the economy you already have and diversify your economic activity.

The steps that must b e taken in a primary-resource-based economy with a population 2.5 million people are not the kind of steps...you don't move from a mine to an electronics industry. There are intermediate steps that must be taken, and they are frighteningly slow and are hard to encourage if your domestic market is small. These are problems that we've all been aware of over many years, but they are problems that don't go away. They remain with us. How do we cope with them? Let me just briefly run down the kinds of programmes we've undertaken.

We have actively participated in the Canadian overseas marketing programme with the federal government and the Council of Forest Industries. Through the efforts of that programme we have succeeded in bringing about a change in building standards in the Japanese housing and construction industry. They have gone from what is called 4 x 4 construction to 2 x 4 construction, making the sizes of lumber products produced in this Province of British Columbia more attractive to the Japanese market.

Now that takes time. They have to train carpenters in a new way of construction. The market avenues have to be opened and crystallized. But this is proceeding, and the Japanese market, increasing as it will and as it is doing now, will stabilize to some extent our tremendous dependency on the United States market for our sawn timber.

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The British Columbia Development Corp. You noticed a press release on some optical equipment. Another Member may notice a couple of things in his area or something may catch his interest. But if you take the whole programme of the corporation together, there are loans being made daily all over the province. They are not dramatic; they are not $2 million or $3 million a crack, or $10 million or $20 million.

We believe that secondary industry starts with the small business. This government believes in supporting the small businessman. We have a tremendous opportunity in this province to see that the small businessman is really the pioneer and forerunner of a secondary-manufacturing-based economy because we are a primary-resource-based economy. So we are emphasizing that.

The department and the development corporation have a management support-service programme where we go throughout the entire province, in the smallest of communities, and offer courses to individuals on the simplest and most basic small business management skills. We find that most often it is not the finances or market, but it all has to do with management practices, and these skills are being provided.

The loan programme is, as I said, supportive of small businesses, and the small loans to the business of 20 employees or less, or to the medium-size corporation of up to 100 employees, are being supported.

From these you will eventually see a base of secondary industry in all communities in the province.

Our land programme in the development corporation is along the same lines. It is not only to decentralize industry from the lower mainland, but also to attract various labour-intensive industries that could locate on reasonably priced leased land in the province.

It takes time to deal with municipalities to get these things rolling, to develop an industrial site that is exemplary and in keeping with environment standards, yet trying to achieve that goal of attracting labour-intensive industry to the province.

In the field of research, through this government and this department, we fund and support the activities of the British Columbia Research Council which has developed many unique products and carried through on several of them to see if they could be manufactured and marketed from a British Columbia base. In addition to that this department has had consultant and in-house studies of every description, on every aspect, to thoroughly canvass every idea to make sure that if there is any technological advancement or product that could result from any technological advancement, we take advantage of it here in British Columbia.

Our trade mission programme has been very successful and is going to quadruple or at least triple this year — not taking the politicians on boondoggles and junkets, but taking businessmen from this jurisdiction to foreign jurisdictions so that they can diversify their markets and find new customers. This has been very successful and it is highly supported by the small businessmen who have participated.

That we are emphasizing the small businessman is evident. Since 1972 we have had the greatest increase in incorporations of small businesses in the history of the province. In the history of this province there has never been a greater percentage of small businesses start, survive and grow into medium-sized businesses. That is the surest sign that we are moving into a secondary industry phase. This government is doing everything it can to support that.

We are also taking a look at the larger-scale projects — copper, steel and coal. It is our opinion that looking for added value to the resources that we have — the better use of coal, the refining of copper, gasification of coals, blending, marketing, transportation, economics and so on — are the kinds of things that this department can do to accelerate the move toward a secondary industrial base.

The Member mentioned federal harbours, tariffs, departments and so on. I will try to cover them as quickly as I can. I'll take these things out of order because I didn't take them down in order.

The federal harbour board is the one that has a stranglehold on British Columbia ports. I use the word "stranglehold" advisedly, I do not believe that the administration, planning and efficiency of the ports properly reflects the federal interest, let alone the British Columbia interest. I do not believe that it will ever be able to do so unless the maritime province of British Columbia has an equal voice on the federal boards that administer and plan for those ports. That will never be the case. We have asked it. We have demanded it. We have threatened. We have cajoled. We have been polite. We have been impolite. We have gone every possible route.

We are presently negotiating with respect to both major ports, as we see them, in Vancouver and Prince Rupert. But we constantly come up against a great monolithic federal bureaucracy. It seems to us that the bureaucracy, especially in the Ministry of Transport, is in control of the political arm rather than the other way around. In any event, we are proceeding in the best way we can.

We are negotiating a voice and some strength for the provincial government to plan and administer its own ports. It's only until that day when it's at least equal administration in governing of these ports that we will see an efficient use — a visionary use — of our ports and transportation system for the entire western Canadian region. This has been argued for.

As far as containerization, by the way, I think that

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that's a glamorous issue. I don't think that as far as the economy is concerned it is necessarily important that we have massive containerization in Vancouver. As a matter of fact, Vancouver's an excellent bulk-loading port and a general cargo port. I don't think we should get too uptight if some containerization is going to Seattle, which is a containerization port. Some containerization is taking place. I think that to this point, although a little below a goal that we would set for it, it's not that unsatisfactory.

The Ashcroft-Clinton line. The British Columbia government is ready to negotiate and sign an agreement in the shortest possible time. As far as the federal government is concerned, in my opinion the present Minister is suffering from information overload, administrative overextension and a number of other diseases that I don't know whether the good doctor for Point Grey (Mr. McGeer) could cure. But as a result of this kind of thing, negotiations seem to bog down. But we're ready — we're ready. We think the Ashcroft-Clinton cutoff is an important aspect of the railway agreements that have been discussed in principle — some will be signed soon.

Interjection.

HON. MR. LAUK: Construction? We've got to sign an agreement first. We're ready to negotiate and sign an agreement immediately.

MR. WALLACE: He said 1978.

HON. MR. LAUK: Well, I don't agree with him. If he wants to come out and see us, we can get down to it in a matter of weeks.

As far as the tariff situation is concerned, there has been a substantial improvement. It's by no means satisfactory; I don't believe that I have a mandate to be the Minister in this portfolio to be satisfied.

The federal government has agreed that we have the Geneva negotiators constantly brief the provincial representatives during the negotiations. That is a breakthrough from the time when Mr. Gillespie and Mr. Turner indicated to us that there would just be a one-shot consultation — that has improved. We've asked to be at least observers at Geneva. We don't ask because of federal sovereignty, we don't ask that we participate directly in negotiations. But we want to participate in Ottawa, first of all, where the decisions and the policy are formulated and, secondly, to monitor that position as it's being negotiated in Geneva. We've got the first half but not the second half — we're working on the second half. So things have improved.

As far as the tariff and the freight rates affecting the secondary manufacturing industry in this province, it has been said time and time again that we are working very hard. We have a good business community, we have an imaginative one, but when you are working against odds like the tariff protective structure and some of the inequitable use of freight rates in the country, it becomes a little discouraging. The $800 million transfer payment was described as a transfer payment by Premier Schreyer and the Premier of this province during the WEOC conference. Those figures are not disputed by the federal government. We have determined those figures as meaning that we must import from central Canada goods — consumer durables — and pay high prices for them because of tariff protection. If there were an open and fairly free market here in British Columbia, we could purchase those goods. Because of a small domestic market here, we could manufacture goods and export them without tariff retaliation. In whatever way we look at it, a free — trade situation in most areas would benefit the Province of British Columbia; the opposite — the tariff protection situation — benefits central Canada.

Interjection.

HON. MR. LAUK: Yes, in-House studies go back a long way.

Interjection.

HON. MR. LAUK: On steel I think it's fairly clear. It's interesting that central Canada, just last year and the year before when steel was in short supply on the continent, made the western markets secondary markets. In other words, the steel producers of central Canada supplied their customers in the eastern areas of the continent before they would supply us. It was not a question of what was the cheapest steel; it was a question of steel or no steel. We either got it from the Japanese or we didn't get it at all. They didn't protect their customers in the west; that was the issue. It can still be the issue. Although the market for steel has softened and we have a supply of steel, I would say that the price could be equal or more for Japanese steel than it is for central Canadian steel.

AN HON. MEMBER: Not better.

HON. MR. LAUK: No, not better at this stage.

With respect to steel production in this province, there are all kinds of people who have economic objections to it because of the domestic market situation. I never suggested from the beginning to this day that there is enough of a market in British Columbia or even in western Canada for a major, global-sized steel plant. But that's not the point. The point is that if one can be produced with a foreign steel producer, we can not only capture the greater part of the domestic market but we would also have

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access to their market penetration on a global scale so that we would be exporting a great portion of the steel that is produced. This, on a global scale of steel production, is economically desirable and feasible.

If you think of only the domestic market, of course there is no requirement, there is no economic feasibility or viability for such a plant. Globally there is. In our view, if it proceeds eventually, we will see that it will be that second step towards a secondary industrial base. We will have a reasonably priced supply of steel. We do not have to depend on the global market or central Canada and we will be able to use that steel which is the base material for a lot of secondary manufacturing operations.

Interjections.

HON. MR. LAUK: How many jobs do we think we have created? Well, this goes on back and forth for years and years about who is responsible for creating jobs within the province.

AN HON. MEMBER: You're not.

HON. MR. LAUK: The previous administration claimed that it created so many jobs in so many years because that's how many more new jobs there were. Well, I am not going to get into that kind of a debate. As far as specific jobs are concerned, there are thousands of jobs that have been created by this government by its support of secondary industry and, small businesses throughout the province. How many jobs that in turn creates in a spin-off way we don't know. But it's rather simplistic to come and say how many jobs you have created. The fact is that the economy is sound, it's moving ahead, small businesses are opening up throughout the province and people are being employed. The unemployment rate for the last two months in this province has dropped, whereas everywhere else in Canada it is on the increase.

Generally in this province the economy, the government and everyone working together, has created about 100,000 jobs in a year and a half. More jobs than any other jurisdiction in Canada have been created here in the last year and a half. We have an increasing population for the reasons that you outlined in your remarks earlier, and the responsibility for creating those jobs is a joint one. It's the economic community and the government, and I think it has worked very well. It certainly has worked better than anywhere else in the country.

MR. WALLACE: Comment on the railway commission....

HON. MR. LAUK: Oh, yes, we are thoroughly involved in that from the beginning. I think you are mistaken to say that we are not involved. We have been involved since WEOC. We are part of the federal — provincial committee. We meet from time to time on that committee and we are part of the policy that is going on. There is a new transport policy review under way in Ottawa and we are also contributing to that.

MR. D.M. PHILLIPS (South Peace River): I certainly won't make any lengthy speeches, as we have witnessed in this chamber this morning. I will be brief and to the point. I think the Minister likes the sound of his own voice. The Minister likes the sound of his own voice. You know, if talk were music, the Minister would be Philip Sousa.

But I was very interested, Mr. Chairman, in the Minister saying that he's created thousands of jobs.

MR. J.R. CHABOT (Columbia River): Diatribe!

MR. PHILLIPS: Well, there's another name for it but I won't use it in this chamber. While he has maybe created a few jobs, he's lost millions of jobs in this province. And the policies of his government have lost millions of jobs. The policies of the socialist government, of which that Minister is a Member, have cost this province tens of thousands of jobs. I don't know how he stays in the cabinet. Well, I know how he stays in the cabinet. I know he doesn't agree with the policies of the other Ministers, but I know how he stays in the cabinet, Mr. Chairman. He is a do-nothing Minister.

AN HON. MEMBER: An apple polisher.

MR. PHILLIPS: Well, apple polisher — that's a good word for it, but he doesn't even work too hard at that. He's a do-nothing Minister. Of all the departments in that government, this Minister does the least. A do-nothing Minister! I don't know how he is able to sit in cabinet, because this is the department that was renamed the Department of Economic Development and that department is a disaster in this province. There is no economic development.

They talk about creating a few little jobs here and there, while they are driving out jobs with their policies on mining and the petroleum industry, the lumber industry. They are driving out of this province millions and billions of dollars of investment capital that would provide the jobs. Now we may have a short-term period where the Minister tries to delude the people of British Columbia into thinking that he's doing something. But his long-term policy is going to be complete economic chaos.

There is one point I want to bring out, and that is this Minister's complete and total failure in dealing with Ottawa. Oh, we've heard fancy speeches. Every

[ Page 2765 ]

time you talk to the Minister — oh, it's just around the corner, just a few days, just another week. And the signing of the DREE programmes.

This Minister has been a complete failure in dealing with Ottawa, and he has left millions and millions of dollars on the table in Ottawa that could have been available to help our sagging economy in British Columbia, and to assist the industry that he's been talking about — free money from Ottawa. But this Minister's obstinance or his inability to deal with Ottawa has left these millions and millions of dollars in Ottawa.

I don't know, Mr. Chairman, whether the Minister is even still dealing with Ottawa. I don't know. We hear very little about it these days. But there were certainly lots of promises — oh, just around the corner, going to help industry in British Columbia to pick up free money from Ottawa, from the Department of Regional Economic Expansion. Not one red cent is coming to the Province of British Columbia from that department.

I would like the Minister this morning to tell us why he hasn't signed these agreements with Ottawa.

Interjection.

MR. PHILLIPS: Oh, we've talked about development. I remember all the big, grandiose plans he had for the northeast part of the province, the northwest part of the province. He was going to help everybody. They were going to sign with Ottawa, they were going to negotiate with the federal government, They were going to negotiate with the senior railroad.

But what's happened, Mr. Chairman? What's happened in your area? Nothing! Now the Minister Without Portfolio (Hon. Mr. Nunweiler) is going to call another conference. You know, when things go badly, call another conference. When something in your department doesn't work, hire another head, hire some more staff.

Mr. Chairman, I am very disappointed in this Minister, very disappointed, because I did look with some anticipation when he was appointed. But now he is right down with the weakest of the Ministers, down there sitting in the corner with the Minister Without Portfolio, right in bed with the Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick), one of the weakest Ministers in the cabinet, and in bed with the Minister of Transport and Communications (Hon. Mr. Strachan), the losing Minister.

MR. CHAIRMAN: Order, please. I think the Hon. Member should confine his remarks strictly to this Minister.

MR. PHILLIPS: I'm just using that for some comparison. I'm just using that as a means of comparison, Mr. Chairman.

AN HON. MEMBER: Don't say the Minister of Education (Hon. Mrs. Dailly). (Laughter.)

MR. PHILLIPS: No, I didn't say the Minister of Education. I said the Minister of Transport and Communications — the Minister that was born to lose. Everything he touches he loses.

I'm going to ask the Minister to tell us in this Legislature what he is doing in his talks with Ottawa. Where are we at? We don't want promises. If you've broken down, if you've been a complete and utter failure, if you're leaving all those millions on the table, tell this House so, so that we know the facts. But don't go on dangling that carrot in front of industry, saying that it is coming. There are millions of dollars waiting to be spent in industries in British Columbia that are waiting for some of that free money that the eastern firms get in Ontario and Quebec. British Columbia is the only province in Canada that hasn't completed and signed subsidiary DREE agreements, Mr. Chairman.

Why? Does the Minister have some hang-up? Why haven't we got this programme underway? Why are we allowing those millions of dollars to go into the eastern provinces, Quebec, Ontario, and indeed into the Prairie provinces? Why is British Columbia the only province in Canada that hasn't signed those agreements?

I think the Minister should tell the House. Never mind making great speeches about what he hasn't done, but tell us why those agreements are not signed. We want to know. Nothing, nothing!

MR. D.E. SMITH (North Peace River): I would yield the floor to the Hon. Minister if he wishes to reply to the Member for South Peace River.

MR. PHILLIPS: Oh, he lost his tongue.

HON. MR. LAUK: Largely, the timing of DREE agreements in this province was left to the provinces. I make no apologies about that. We were approached from the federal government to provide a new system of DREE assistance in this province. The money that was left on the table is not very great. I've stated that to the Hon. Member privately; I've stated it to him publicly; I've stated it to the people of his constituency on several occasions.

I don't believe that running around the country raising expectations of your constituents about DREE that is relatively negligible is serving your community whatsoever.

MR. PHILLIPS: You're the one who made the promises.

[ Page 2766 ]

HON. MR. LAUK: Absolutely not, Sir. That is a lie. I said that DREE would be involved.

Interjections.

HON. MR. LAUK: I said that DREE would be involved, but I said from the beginning that the amounts would be small, and you check that out too. Don't start raising expectations falsely with your own constituents for cheap political reasons.

MR. PHILLIPS: You're the one that....

HON. MR. LAUK: Ward healer. You get in there and you tell the truth to your constituents and be responsible to them instead of playing cheap politics in this House.

Now we had to get planning going, Mr. Chairman, and we did. We provided the base information to the federal government and the first of several agreements currently are in Ottawa for approval.

I must correct something that I've said earlier, not in these estimates, but I indicated in question period some time ago that the first railcar at the Squamish plant would not roll off the production line until the middle of June. I must correct that because I have a report today that the first car to roll out of the B.C. Railway's new $8 million railcar plant at Squamish gets the once-over from production manager Jim Lyon. No. 1 for the B.C. Railway is off the production line.

AN HON. MEMBER: You just read it in the newspaper.

Interjections.

HON. MR. LAUK: You know, Mr. Chairman, these people are amazing.

Yesterday the sky was falling. The $8 million plant had a three-inch coat of dust on it. There was gross negligence and so on.

The cars are being produced. This is the first car.

Interjection.

HON. MR. LAUK: I ask the Hon. Members to have some vision. What's going to happen this fall when we start producing four and five and more cars a day? What's going to happen when we sign contracts with national railways to supply them with railcars and we're providing jobs in Squamish?

Interjections.

HON. MR. LAUK; They're upset, Mr. Chairman, when we do anything good on this side of the House. They're a negative, carping critic of this government.

[ Page 2767 ]

There isn't one positive thing that they've said about this government in the last three years since we've been elected, not one positive thing. And the people of this province know that that kind of destructive negativism is not only unproductive in this province but it's disloyal to the people of this province.

MR. PHILLIPS: I just want to, Mr. Chairman, set the record straight in this Legislature. It was that Minister who went up north and who said that he was on the verge of signing a DREE agreement. I never brought it up until he did. He's the one that has dangled the constituents, not only in the northeastern section, but in the northwestern part of the province. He is the one who said: "We are on the verge of signing the DREE agreement."

AN HON. MEMBER: How long ago?

MR. PHILLIPS: Two years ago, and every time that Minister's been approached — "Oh, it's just around the corner." But I want to tell you, Mr. Chairman, he can talk and he can be negative now about the DREE money, but he knows that millions and millions of dollars are flowing out of Ottawa into the Province of Ontario, into the Province of Quebec and into all of the other provinces, and British Columbia is the only province that hasn't signed a subsidiary DREE agreement. I don't care in what kind of glowing terms the Minister says: "It isn't very much now." But the Minister knows that it involves millions and millions of dollars and it would provide tens of thousands of jobs, and the Minister can backtrack and try and soft-pedal, because that's all he does. He's a do-nothing Minister. He hasn't done one thing with his department.

Mr. Chairman, I thank you for the opportunity to set the record straight.

MR. SMITH: Mr. Chairman, I'd like to speak for a few minutes in this debate.

We listened to the Minister a short time ago talk about the boom-and-bust syndrome of the old government who based all of their policies on primary resource-oriented industry that was cyclical in its manner of employing people, and for that reason the economy went up and it went down according to the world markers, and he was not going to be one of these politicians who went on boondoggles and junkets and trips here and there. Of course, we've not seen anything as a result of his trip to Japan. We'd really like to know, if he knows, what the Premier's going to do when he takes this junket to England to discuss supposedly an oil refinery with a country that has no oil and has no means of financing a refinery in the Province of British Columbia, let alone helping their own economy out. So let's dispel that for a moment.

He also talks about the "negative, carping critics" of the government and said that the official opposition had nothing good to say about the....

HON. MR. LAUK: Never been truer.

MR. SMITH: And now he says "Never been truer."

Mr. Chairman, I'd like to speak for a few minutes this morning, about another person who I suppose the Minister now calls the negative, carping critic of the policies of the NDP.

HON. MR. LAUK: That's right.

MR. SMITH: His name is Peter Pearse. Have you heard of him, Mr. Minister? I think he has. Just to refresh your memory, Mr. Pearse did quite an exhaustive study of the forest industry in the Province of British Columbia. On his recommendations a number of the policies brought forward by the now Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) came into fruition. These were the result of the recommendations of Peter Pearse.

It so happens that the same Peter Pearse addressed a conference very recently — a conference of the Canadian Association of Geographers. He. had a number of comments about the advisability of secondary industry in the Province of British Columbia — some very interesting comments concerning this matter. I would like to quote from this morning's edition of the Province, Wednesday, May 28:

"B.C.'s policy makers were advised Tuesday to be less uncritical of the supposed blessings which the creation of new secondary industry will bestow on the province.

"Economist Peter Pearse, of the University of B.C., told the Canadian Association of Geographers, which is meeting here this week, that the desirability of expanding secondary manufacturing activity is so well accepted within and outside government that it is seldom questioned. He counselled rigorous examination of the belief."

Pearse apparently made no direct reference to the Government of British Columbia. How could he after preparing a report?

"But he warned that the creation of industry not tied to provincial resource extraction activity may well depend for success on direct subsidies out of the public purse, protective trade restriction, fiscal concessions, or other forms of help to compensate for relative production inefficiency."

I think that it would be interesting to read a few other things out of this.

"Pearse said that support for more secondary manufacturing in B.C. appears to rest on three claims: it will increase income levels and improve general economic well-being; it will create more jobs, and it will tend to curb wild swings in the province's economic fortunes.

"He said the argument that more secondary industry will raise incomes is easily dismissed. 'Labour and capital in a competitive market seek their highest returns, and the present dominance of primary industries in B.C. undoubtedly reflects the fact that returns are more often higher in primary than in secondary activities here.'

"Pearse said that any induced shift of capital and labor into secondary industry cannot cause wages to go up. And while it will create new jobs, it offers no guarantee of reducing unemployment."

That is very interesting, Mr. Minister. It offers no guarantee of reducing unemployment. When I take my seat again I would like the Minister to tell me if Peter Pearse is one of these negative, carping critics that he talks about, seeing as he seems to feel that there is good reason to question the advisability of secondary industry just for the sake of secondary industry in the Province of British Columbia.

"He observed that B.C. is the only province in Canada consistently to derive half its growth from an influx of newcomers."

That is interesting. An influx of newcomers provides half our growth.

"He suggested that new economic opportunities will simply draw in more labour and capital from outside the province, rather than redirecting money and men already committed to primary activity within B.C."

HON. MR. LAUK: Why don't you just table the whole article?

MR. SMITH: It goes on:

"Thus secondary industry might give no relief to cyclical unemployment in primary industries tied to fluctuating world markets, by weaning away workers from them."

HON. MR. LAUK: Why don't you just table the whole thing?

MR. SMITH: No, it's a very interesting article.

MR. CHAIRMAN: Order, please. I would point to the Hon. Member that it is not considered proper in Committee of Supply to read lengthy extracts. Short extracts are usually permitted but lengthy extracts tend to become a written speech.

[ Page 2768 ]

HON. MR. LAUK: It's better than his own speech. You better let him go.

MR. SMITH: It goes on:

"Pearse said some may consider it desirable to expand population growth through the creation of new secondary industry, though he doubted whether the advocates of such a policy are as vocal or as numerous as they used to be."

I could go on, Mr. Chairman, because I do believe that it's interesting to note that a man who was responsible for providing substantial advice to this government has looked at the whole problem of creating jobs through secondary industry. He certainly indicates now that perhaps we should go easy on this matter of development of secondary industry.

It's easy for this Minister to stand in his place and talk about steel mills and the development of new petrochemical industries and great expectations for secondary industry. But really what we would like him to do is tell us just what he has created in the way of new employment and jobs in the Province of British Columbia. If you want to build a steel mill in the Province of British Columbia, I think that one of the first things you should tell us is where the studies are that indicate the sources of ore. Where will it come from? Certainly it's not going to come from known sources in the Province of British Columbia. So it would seem that we have to bring that ore in from offshore, transport it to Prince George and then redirect the finished product back out to the coast. Is that where you'll get it?

HON. MR. LAUK: Look at the answer I gave to Anderson last year.

MR. SMITH: Well, certainly...

HON. MR. LAUK: That was yesterday's news.

MR. SMITH: ...last year and this would seem to be one and the same in respect to anything that has been accomplished by your department, Mr. Minister.

HON. MR. LAUK: Yesterday's news, Ed.

MR. SMITH: Yesterday's news?

HON. MR. LAUK: That's right.

MR. SMITH: Unfortunately, with your department there is no new news — nothing that's new. No, Mr. Minister, I think that you should take a look at the direction your department is going — be a self-analyst of what has happened and the direction you're taking. If you're satisfied with what has happened, fine. But I suggest that you won't be, because there's nothing really tangible for the people of the Province of British Columbia to grab on to or look at of a positive nature. You haven't done it yet. You've talked a lot about it but nothing has been accomplished.

But to return to the basis of my remarks when I first took my place in this debate, what do you...?

HON. MR. LAUK: What do the people of your constituency want?

MR. SMITH: What do they say about you? They write you off.

HON. MR. LAUK: No, no, no. What do they want in your constituency?

MR. SMITH: What does the Minister say about the...?

HON. MR. LAUK: Answer that question.

MR. SMITH: I'll answer your questions when you start answering some of ours, Mr. Minister. What does the Minister say about the comments of Mr. Peter Pearse? Do you agree with what he has said?

HON. MR. LAUK: Yes. Do you understand what he said?

MR. SMITH: Well, if that's true, what were you doing filibustering for 30 minutes on the floor, talking in glowing terms about what you were going to do in the boom-and-bust syndrome of the previous administration? You can't have it both ways, Mr. Minister. If you look seriously at what he's saying, secondary industry may not be the answer to all of the economic ills of this province by any stretch of the imagination and the capital employed in primary industry is better off employed there than in secondary industry.

HON. MR. LAUK: Do you know what the people of your constituency want?

MR. SMITH: Yes, I know what the people of my constituency want. They want the right to enjoy a fair standard of living, a climate created by the government that allows them to operate effectively in a business or in business endeavours that they have developed over the last 20 years. That's what they want and they're not getting it from the present administration, believe me. Some day you should go up and talk to some of them and find out.

Mr. Minister, if you are so much enamored with secondary industry, you can't agree with what is being said by Peter Pearse. On the other hand, if what he has said is correct, you must re-examine your

[ Page 2769 ]

whole policies in light of a person who has been regarded by your party as a very good economist and one who has given advice to more departments than just your own. I'd like the Minister to tell me where he stands on the position taken by Peter Pearse.

HON. MR. LAUK: I'd like to answer some of the points raised by the Hon. Member. I think his name is Mr. Pearse.

We believe in the rigorous examination of the belief in secondary industry. That's the process that we have been going through. We agree with Pearse that we are not looking for hothouse industries, artificial-type industries; that's been the approach. Your previous administration was asked for years for a development corporation and never did it. We brought it in. We make loans; we don't make grants. We make loans to economically viable enterprises. We agree with Mr. Pearse. We're looking for more value added to our primary resources. The Member for Oak Bay (Mr. Wallace) mentioned my speeches; the best parts of the remarks of the Member for Oak Bay were my speeches.

MR. SMITH: How many grants approved? How many loans approved in your new economic development corporation?

HON. MR. LAUK: We're looking for industries that have a natural advantage in this province using the natural labour skills that we have and so on. I've said this for months; you haven't been listening. I asked you what the people of your constituency want. I read in one of your local newspapers that what they want is your silence, Mr. Member.

Interjections.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Chairman, the Minister whose vote we are assessing now has a very heavy responsibility in this cabinet. He has my sympathy, because he somehow has to try to make some slight moves towards economic development in this province in a cabinet dominated by wild spenders, economic illiterates, people who don't know that you can't take out of the barrel more than you put in. That's his challenge.

I don't know that he's really been rising to it, but let's ask a few questions and see what his answers indicate. I understand that the Minister now has on his desk the report of the copper task force. Just let me clarity that before anything else. Maybe the Minister could nod his head if he does, indeed, have the report of the copper task force on his desk now.

HON. MR. LAUK: It will be released soon.

MR. GIBSON: Maybe he could give us a little preview today because this is so critical to this province. Copper is around $500 million worth of our export and we could upgrade more of it here. Does it recommend a smelter, Mr. Minister? What process — the old fashioned process or the new hydro-metallurgical kind.

HON. MR. LAUK: There is nothing old-fashioned about this government, my friend.

MR. GIBSON: That's encouraging.

HON. MR. LAUK: Except the good things.

MR. GIBSON: Are various locations canvassed in this report? Are there environmental studies? You can tell us these things just to foreshadow a little bit of this report. Were companies involved and consulted in this process? Will the government own the smelter?

HON. MR. LAUK: Everyone was involved.

MR. GIBSON: Will the government own the smelter when it finally comes down the pike, if there's still any copper being mined in British Columbia at that time?

HON. MR. LAUK: We are not against private enterprise.

MR. GIBSON: There are some questions on that one.

The Minister has had some comments to make, both in recent months and in his speech today. I want to examine him a little bit on them. The first is a clipping of January 16, 1975, which is headed up: "Lauk Sees Growth For 1975." There is a big smiling picture of the Minister in this clipping.

HON. MR. LAUK: The year isn't over yet, my friend.

MR. GIBSON: I want to know if the Minister still sees things quite so rosily. I want to know if it was his advice in this regard that led the Minister of Finance to project such inflated revenues. 1975 doesn't look quite so good now because of the policies of this government.

HON. MR. LAUK: Read the article.

MR. GIBSON: "Read the article," says the Minister. I'll read a little bit out of the article. I don't want to tax your patience, Mr. Chairman, but he is talking here about labour relations. He said that a more realistic approach to labour negotiations must be attained. He said that he did not believe, however,

[ Page 2770 ]

that these negotiations would have a significant impact on the provincial economy this year.

I want to ask him if he still believes that in the light of the provincial government's settlements. I want to ask him if he still believes that in the light of the negotiations we have coming up this summer in the forest industry. I can hardly believe that a Minister of Economic Development would pay so little attention to one of the basic determinants of the economic future of this province.

A few months ago the western Premiers met. I won't ask the Premier for an elaboration of this quote; I will ask the Minister of Economic Development as I think he was at this conference with the Premier. The Premier was commenting on an agreement by the four western Premiers to have a common industrial development strategy. He said that he hoped it would end what he called "mindless competition for the same investment dollar." The Minister nods his head in approval.

I want the Minister to make a note of this so that in his reply he will tell me what investment dollar he has stopped competing for. I think the people of British Columbia should know that, Mr. Chairman. It's the duty of this Minister to do what he can to get the investment dollar in British Columbia. What ones has he stopped competing for? Don't you think that's why the people in this province employ him? Don't you think that's why the people in this province employ him?

HON. MR. LAUK: I'll tell you what the others have stopped competing for.

MR. GIBSON: Maybe he has stopped competing for investment dollars in the potash industry. If that's it, I don't mind. We don't have any potash.

HON. MR. LAUK: I agree to that.

MR. GIBSON: But he better not have stopped competing for any investment dollars we can use in this province.

HON. MR. LAUK: That's exactly the point.

MR. GIBSON: I want to get that clarified.

HON. MR. LAUK: You don't want to miss the point.

MR. GIBSON: In his speech today, when he was talking about the development of secondary, tertiary and higher-function industry in this province, the Minister said that you don't move from a mine direct to an electronic industry. I hope the Minister is not going to take that as the policy of his department because that's exactly the kind of thing we should be doing in British Columbia. And we can do it in British Columbia.

Fortune magazine of June, 1974, the first paragraph:

"A few decades ago Santa Clara County, California, was a tranquil expanse of apricot, prune and cherry orchards." That's even more primitive than a mine, I think you will admit, Mr. Minister. "Now it's the place where American industry is thrusting out its newest branches and roots. Some 800 pioneering technology companies, along with numerous service and supplier firms, are clustered in the area, forming the densest concentration of innovative industry that exists anywhere in the world."

That's the kind of thing you can do, Mr. Minister.

HON. MR. LAUK: What's that again?

MR. GIBSON: You can develop an innovative, knowledge-oriented industry complex in British Columbia.

Interjections.

MR. GIBSON: Innovative.

HON. MR. LAUK: A research industrial park.

MR. GIBSON: You take your dictionary, and I'll take mine. I say it's "innovative." That's what is needed.

Interjection.

MR. GIBSON: No, but you do have a dictionary.

Interjection.

MR. GIBSON: Again on this subject of "you can't leapfrog from one phase of industrial development to another", Here's a recent speech by an official of the Japan-Canada Trade Council saying that that country, which has been very heavily into secondary industry, is moving out of the labour-intensive, heavy-polluting, material- and energy-demanding industries into the cleaner, what I call knowledge-intensive industries, high-technology and high-value-added undertakings.

This means a shift away — I am paraphrasing that official — from steel and petrochemicals and ship-building and manufacture of heavy machinery into areas like undersea and engineering information processing and dissemination, medical technology — that kind of thing.

In British Columbia we can do that kind of thing. We have that great essential, a climate, to attract that kind of knowledge-oriented person from all across

[ Page 2771 ]

this country and this continent here. I would suggest to the Minister that in particular we should be working on the development of undersea mining technology. Considering what this government has done to land-based mining technology, the least they can do is to encourage our mining people to get into the future world of mining, which is under the oceans.

Interjection.

MR. GIBSON: Mr. Minister, you stand up and tell us what this government has done to mining all around this province. It's one of the saddest stories of this generation. But I will be back to that later.

So would the Minister address that point a little bit, please?

Now this government has been systematically evading its responsibility....

HON. MR. LAUK: Oh, a carping critic.

MR. GIBSON: A carping critic. How do you carp, Mr. Minister?

HON. MR. LAUK: You ought to know.

MR. GIBSON: You stand up and carp a bit; then I will know what you are talking about. I try to be a constructive critic, try to give you a little good advice.

Interjections.

MR. GIBSON: I want to ask you what you are doing to help the Greater Vancouver Regional District implement that aspect of its livable region project that has to do with the distribution of jobs around that area.

HON. MR. LAUK: That's what we are doing. Tilbury is one of them.

MR, GIBSON: That's what I want to hear. Now the GVRD has basically asked that there be a better job distribution around the metropolitan area in order that there will be less travel required to and from work and a less expensive transportation infrastructure. They want to see the ratio in jobs on the North Shore, for example.... The ratio of jobs to job holders is now 1 to 1.7 and they want it brought down to 1 to 1.4. The same thing in other parts of the GVRD.

Now he's an executive vice-president of the BCR. Will he move the BCR head office to North Vancouver? It's a simple question. That would aid that target. It is something very tangible that the government could do.

HON. MR. LAUK: Why not outside of the lower mainland entirely?

MR. GIBSON: We'll listen to your explanation on that, Mr. Minister. I would like to hear broadly what you are doing on this all over the lower mainland, not just the North Shore. But I am particularly interested in that question on the North Shore.

I'll carry on with the BCR just for a moment, and this is just a short question. I'm glad you are talking for a moment with the Minister of northern affairs (Hon. Mr. Nunweiler). Oh, he's not the Minister of northern affairs; he's the Minister Without Portfolio. He didn't have the answer to this question.

What tonnage is that Dease Lake extension going to carry, now that your policies have shut down any chance of developing the mines along the line that were supposed to provide a million tons of freight?

MR. CHABOT: They're carrying doughnut holes.

MR. GIBSON: They're carrying doughnut holes, says the Hon. Member for Columbia River. They're carrying the doughnut hole-making machinery up there, made in the new high-technology plants that are being developed by the Minister of Economic Development in the lower mainland.

MR. CHABOT: Tilbury Island!

MR. GIBSON: It's a simple question, Mr. Minister. What tonnage is that line going to carry? You're executive vice-president of the BCR; you're an expert on these things. What's going on there?

What about BCR taxes? It doesn't pay a cent to the district and city of North Vancouver, and that's the southern terminus of that railway. This government agency is evading the proper responsibility of paying over $125,000 worth of taxes a year.

HON. MR. LAUK: Are you against the railroad?

MR. GIBSON: I'm for equity.

HON. MR. LAUK: Come now!

MR. GIBSON: I'm for Crown corporations paying the taxes they should. I want that executive vice-president, Mr. Chairman, to stand up and defend the rotten policy of that railroad in not paying their local taxes in any way whatsoever. He can't defend it.

Interjections.

MR. GIBSON: Mr. Chairman, this is just a brief question. I certainly hope the Minister is noting all these things down, or I will have to ask them again. I

[ Page 2772 ]

just want to ask him briefly what he has done to keep up his statistics department over the last year.

HON. MR. LAUK: Keep moving back and you'll fall off the edge there.

MR. GIBSON: The Deputy Minister is writing that down. The Minister is too busy, engaged in frivolous interchange. Maybe the Deputy will remind him.

Next I want to ask the Minister to make a statement on the current fundamental economic problem in British Columbia. He owes the people this statement because some guidance, Mr. Chairman, has to be given in the way that our economy is unfolding.

In the short range we're in real trouble for markets because of market conditions. The price of some of our minerals is down.

The housing market in the United States is the one that's sadly down. I have an economic commentary here dated April 7 from one of the brokerage houses which makes this statement. They say there's a whole year's supply — 400,000 units — of unsold single family homes in the United States. The economist that's reported in this newsletter says this: "For 1975, Mrs. Mackey expects housing starts will be 1.1 million and that starts will not get back to an annual rate of 1.8 million until the summer of '76 when the average for that year is expected to be 1.8 million." That's even in 1976, Mr. Chairman. That's real bad trouble for British Columbia — real bad trouble.

Now that's the short-range, and the Minister should not make rosy forecasts that aren't a part of the facts.

HON. MR. LAUK: You didn't read the article then.

MR. GIBSON: The labour and management and government and academic inputs in this province have to have an atmosphere of reality in which to work. They can't have a rosy, arm waving Minister who says everything's fine. They have to have some reality. So I ask the Minister to give them reality on the short-range picture, but on the longer-range picture I ask him to give his colleagues the reality because they don't know what's going on, Mr. Chairman. They don't understand how this province works. They think that there's a bottomless pit there of goodies that you can pull out and spread around in any way you like without even keeping a careful accounting of them, and that the money machine just goes on and on and on. And it doesn't, Mr. Chairman, because they have to understand that we are a market-export economy, and that's how we make our living in this world.

I just want the Minister to get across to his colleagues that the maximum we can pay in this province has to be conditioned not by what we would like to pay — whether we pay it to people who are working, whether we are paying it to owners of capital, whether we are paying it to people for social purposes, any of these payments — but the maximum has to be conditioned by what we can earn from the rest of the world. It can't come from anywhere else.

Now what we can earn from the rest of the world depends on our costs. If we can keep our costs reasonable in British Columbia on a net basis, taking into account the upward or downward valuation of the Canadian dollar, we'll be all right. If our costs start getting seriously out of line and our investments start declining we will not be all right. The long-term future of British Columbia in that case will not be rosy; it will be mediocre.

There's a lot of people in the government who believe that we are sitting, Mr. Chairman, on top of the highest-grade resources in the world. They think that in terms of minerals and lumber we're like the Arabs in terms of oil, that all we have to do is name our price and the world will beat a path to our doorstep and will pay that price.

I ask the Minister to convince his colleagues — I pray that he will convince his colleagues — that this is not true. That the only way that we're going to be able to make our way in this world is not by holding people up like the Arabs, but by holding up our end and putting out a good product at a reasonable price that we can sell on world markets. It's only these basic industries that pay for all of the other nice things we want from the rest of the world, be it entertainment, or automobiles, or appliances, or technology, or whatever it is we want to import into British Columbia. We've got to sell some wood or some copper or some coal to be able to pay for that.

So the Minister has to admit a couple of propositions. He has to admit that you can't take more out of the economy than you can put in. He knows that. He's got to convince his colleagues.

The Minister has to admit and has to convince his colleagues that the export situation has to govern and that we can't allow costs in other parts of the economy, particularly the government part of the economy which has the power to tax and tax and tax some more, so that it never feels losses. We can't allow costs in the government part of the economy to start dictating costs in other sections of the economy which make them uncompetitive and in the end make us all poorer in this province. The government has to show that kind of restraint in leadership. And the Minister finally has to convince his colleagues that after all the other costs are looked after and brought into line we have to have investment in this province and that in our two basic industries investment has dropped right off.

I had occasion to ask the Minister of Mines (Hon. MT. Nimsick) if he realized that exploration drilling in

[ Page 2773 ]

this province had gone down in the first quarter of 1975 compared to the first quarter of 1974 by 99 per cent — 2,400 feet of exploration drilling reported in three months. In the meantime Quebec has going along at 100,000 feet a month — 300,000 feet in that period, Quebec hasn't the kind of a mineral prospect we have in British Columbia. It's good but it's not as good as here.

Expenditures in the Yukon and the North West Territories are up higher than they ever were before.

HON. MR. LAUK: Get back to my estimates. I'm getting jealous.

MR. GIBSON: These are your estimates, Mr. Minister, because you have to be the custodian of this kind of basic understanding in that know-nothing, wild-spending cabinet. Somehow you have got to convince these people that the fact that there are about four drilling rigs operating now for mineral exploration, when there were about 50 or 60 in normal times, is not due to the state of the world copper market. This is due to the state of the government we have in British Columbia.

HON. W.L. HARTLEY (Minister of Public Works): Rubbish!

MR. GIBSON: "Rubbish," says the Minister of Public Works. He's the Minister of empty offices and that's all he knows about. He sure doesn't know about the economy, Mr. Chairman.

HON. MR. HARTLEY: Tell us why the Gibson family shut down Giant Mascot.

MR. GIBSON: You don't know what you are talking about, my friend.

Interjections.

MR. GIBSON: So there are a few questions for the Minister. With all of his problems, I would like him to come back, finally, to the question of an economic council for B.C. because that can help him. They can help him in his own thinking and they can help him convince his cabinet colleagues.

The Minister was talking earlier about internal studies that he has on free trade. I would like him to table those studies in this House. I take it that there is nothing confidential about them. They would be of great assistance in the public dialogue in this case.

AN HON. MEMBER: Didn't you get a copy?

MR. GIBSON: I don't think so, no.

AN HON. MEMBER: Well, we will send you a copy.

MR. GIBSON: Thank you.

This is the kind of basic thing that an economic council of B.C. could do for him. It could do studies for him on resource processing, competition in various industries, specific and vexing economic problems like rent control that afflict our province, questions of the maximum sustainable wage increases in B.C., the economic impact of growth on our province and of different kinds of people coming from other parts of Canada and the world, the adequacy of the statistical base that his department and Statistics Canada puts together for assessing the state of our economy, the impact of Confederation and the costs and benefits of it on our province — we have discussed this many times before — and finally, Mr. Chairman, an annual and independent report on the state of the economy of British Columbia.

The people of B.C. are interested in the comments of the Minister on the state of the B.C. economy. They are also interested in the comments of the opposition. But they would like an independent report of a body set up for this purpose, known to be neutral and impartial and with a necessary staff to say: "Here is where the B.C. economy has been, here is where it is now and here is where it is going unless we change things; and here is where it should be going." Those are the four basic questions, in addition to specific references, that the Minister could expect a council like that, if he had the wisdom to set it up, to offer him and the people of British Columbia advice on every year. I commend it again to his attention.

MR. L.A. WILLIAMS: Filibustering his vote.

HON. MR. LAUK: The Hon. Member for West Vancouver–Howe Sound (Mr. L.A. Williams) likes his questions answered in estimates. Because he has deserted the Liberal ranks and feels no loyalty toward them, he figures that I should sit down here and ignore the well-considered questions of the Member for North Vancouver–Capilano (Mr. Gibson). Boy, how things have changed! You so easily change, Mr. Member.

I will be as brief as possible, Mr. Chairman. The common western development strategy is proceeding along nicely. Saskatchewan has agreed not to get involved in ship-building. But seriously....

Fruitful discussions were held last year between the Ministers and officials about the kind of duplication that could occur. We agreed to pursue areas of best advantage for each province. That is generally an accepted practice. I think that it is unrealistic for some provinces to pursue things that it can be demonstrated would be so much better suited, economically and otherwise, to another jurisdiction.

[ Page 2774 ]

We have agreements there. We have given up nothing, Mr. Chairman, in terms of what is best for this province. We don't need money to invest in potash or uranium. We are not seeking out investments in those areas.

In the statistics department we created a new branch under a director. There are six professional people. We brought in a senior Statistics Canada man. He has been seconded to us for a year. We wish to provide B.C. with B.C. statistics, and that is the approach we are taking. All this from a statistics division with one clerk in it. It is not the quantity of people but the quality of people.

The copper task force report is in the hands of the Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick) and myself. We are presently reviewing it and we should soon be making comments on it.

B.C. strongly supports high technology. We gave a grant of $0.5 million to the ocean engineering centre at the B.C. Research Council. It is proceeding along nicely. We toured it the other day and had a board meeting of the B.C. Research Council, It is a good facility and will be one of the most advanced in the world. It will be providing B.C. with technology in some of its strongest areas of ocean engineering.

I think that you argue along with many of us, for an industrial research park. This has been examined thoroughly by the B.C. Research Council on our behalf. That material is being reviewed. We saw that MacMillan Bloedel have developed their own complex and we are looking at that and seeing if that should affect the timing of trying to bring a research park on stream.

MR. GIBSON: Will the study be made public?

HON. MR. LAUK: On the research park? I'll take that into consideration; I don't see any reason why it shouldn't be, at this date.

Yes, I know the bathtub theory of economics, Mr. Member: you've got to put in what you take out and so on; all of us do realize that. I think that when I make statements on the economy it must be realized.... At the time in January.... By the way, that article is a good article — it still stands. I said that if pulp and paper holds and if there is an upturn in the market in the United States, and a number of these things happen, as I expect them to still do, there will be an upturn in the second half of 1975. I haven't changed that.

If the newspapers say: "Lauk Thinks Things Are Rosy".... I said that there may be a growth factor of 3 per cent — I don't call that rosy.

MR. GIBSON: That's less than our population growth.

HON. MR. LAUK: That's not rosy, and I said so at the time. But certainly I don't think we should be the doom-and-gloom boys like the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) and his comrades over there on the Social Credit benches. Doom and gloom, that's all they talk about.

MR. L.A. WILLIAMS: Take it back. Untrue.

HON. MR. LAUK: No, no. I think, Mr. Chairman, that there's still a great deal of indication that the economy will begin to turn upward — in British Columbia there is already. Our unemployment rates have dropped. In Canada they remain the same or have increased. Surely, that should indicate something. No one is happy with the number of people unemployed. It's silly to suggest that we are. But at least we see some hope in the downturn in the unemployment rate. We can see that we are creating more jobs than in any other jurisdiction of the province — 100,000 jobs in 18 months, Mr. Member. That's more than in any other jurisdiction.

MR. L.A. WILLIAMS: You created them?

HON. MR. LAUK: I'm saying that this province created them — that's the people and the government that have created a climate where these jobs can be created.

MR. PHILLIPS: There's a big increase in social welfare.

HON. MR. LAUK: So, Mr. Chairman, the economy should turn upwards soon. I can see that I've got a few more minutes left to speak on some other matters. The economy should be turning up favourably. I can see that President Ford has an election year in 1976. We know that President Ford wants to be re-elected. We know that efforts that should be made to improve the American economy will have a direct reflection on the economy in British Columbia.

MR. CHABOT: Mr. Chairman, I have a few questions to ask the Minister, but I'm sure that time won't permit me to ask all the questions I'd like to ask the Minister.

I do want to say that the Minister flabbergasted me this morning. Needless to say I was immensely shocked with the complete ignorance of that Minister, complete ignorance of what's taking place regarding the railcar manufacturing plant at Squamish.

The Minister told us in this House, in answer to a question during the question period, that the railcars would start rolling off the assembly line on June 15. Now the Minister tells us, after having read an article in the Vancouver Province, that the first car has

[ Page 2775 ]

rolled off. If that isn't ignorance, I don't know what ignorance is, Mr. Minister. It points out very clearly to me that you are not aware of what is going on on the B.C. Railway. You are a director of the railroad, and it appears to me that you are not fulfilling your responsibility. No wonder there is economic chaos, no wonder the morale is low on that railroad when directors such as yourself are in such complete ignorance of what's taking place on that railroad.

Mr. Minister, I never thought I would see the day when a, Minister of the Crown would be so completely ignorant of what's taking place relative to his responsibilities. Mr. Minister, you are completely uninformed; you are derelict in your duties as far as a director of the BCR. You have shocked me with your ignorance this morning. I have been here for 12 years, Mr. Minister, and never have I asked for the resignation of anyone in 12 years. But I ask for your resignation as director of the BCR because of your complete ignorance of what's taking place on that railroad.

MR. D.A. ANDERSON (Victoria): Mr. Chairman, in view of the time, I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

MR. SPEAKER: I don't think the committee has to ask leave to sit again. By this sessional order adopted you will meet again tomorrow morning at 10 o'clock. You have made the motion to rise, and I don't have to deal with that either. All I have to do is try to get ready for lunch. Well, I think we can adjourn. It would be very useful if we adjourned the House.

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 11:57 p.m.