CONTENTS

Privilege

Tabling of Keenleyside report on firefighting.

Mr. Curtis — 3365

Hon. Mr. Macdonald — 3365

Mr. Speaker — 3365

Routine proceedings

An Act to Establish a Medical Data Bank (Bill 137). Mr. D.A. Anderson

Introduction and first reading — 3365

An Act to Provide for Payment of Local Taxes by the B.C. Railway (Bill 138). Mr. Gibson.

Introduction and first reading — 3365

National Cablevision Limited Transfer of Jurisdiction Act (Bill 133). Hon. Mr. Macdonald.

Introduction and first reading — 3365

Speaker's ruling

Possible breach of privilege by Mr. Gibson. Mr. Speaker — 3366

Mr. Gibson — 3366

Hon. Mr. Macdonald — 3367

Hon. Mr. Hall — 3367

Mr. Gibson — 3367

Mr. Speaker — 3367

Routine proceedings

Oral questions

ICBC strike effect on licensing teenage drivers. Mr. Bennett — 3367

Sales of babies — 3368

Bus fare passes. Mr. Wallace — 3369

Homes left unsold in Meadowbrook subdivision. Mr. Phillips — 3369

Defects in Meadowbrook homes. Mr. Phillips — 3369

Mount Benson housing project. Mr. Curtis — 3370

Status of Joyce Nash. Hon. Mr. Hall answers — 3370

Increase in stumpage rates. Mr. Fraser — 3370

Liquor Distribution Act (Bill 93). Second reading.

Mr. Wallace — 3371

Mr. Smith — 3375

Mr. Gardom — 3377

Hon. Mr. Macdonald — 3378

Liquor Control and Licensing Act (Bill 99). Second reading.

Hon. Mr. Macdonald — 3379

Mr. Smith — 3379

Mr. Gardom — 3380

Hon. Mr. Macdonald — 3380

Legal Services Commission Act (Bill 96). Second reading.

Hon. Mr. Macdonald — 3381

Mr. Smith — 3381

Mr. Gardom — 3382

Mr. L.A. Williams — 3383

Hon. Mr. Macdonald — 3383

British Columbia Railway Company Construction Loan Amendment Act, 1975 (Bill 27). Second reading.

Mr. Phillips — 3384

Hon. Mr. King — 3390

Mr. L.A. Williams — 3392

Mr. Gibson — 3394

Mr. McGeer — 3396

Resort Municipality of Whistler Act (Bill 130). Hon. Mr. Lorimer.

Introduction and first reading — 3399

Income Tax Amendment Act, 1975 (Bill 10). Hon. Mr. Barrett.

Introduction and first reading — 3399

WEDNESDAY, JUNE 11, 1975

The House met at 2 p.m.

Prayers.

MR. A.V. FRASER (Cariboo): Today in the gallery are 55 students from the Poplar Glade School in Williams Lake. Williams Lake is in the great riding of Cariboo and Williams Lake is the bull-throwing capital of the world. I would like the House to join with me in welcoming these students here today.

HON. A.B. MACDONALD (Attorney-General): Mr. Speaker, I have the honour to present on the floor of the Legislature today three gentlemen. The first is Robert Sauvé of the Province of Quebec, attending the national legal aid conference. He's a former secretary-general of the CNTU from which position Jean Marchand rose to great heights. And I have Roland Penner, QC, also a joint chairman from Manitoba and chairman of their legal aid services there. Finally, from the Province of British Columbia, Mr. Don Jabour of Kelowna, who, if this Legislature in its wisdom finally passes my Legal Services Bill, will be the chairman of our legal aid services committee in the Province of British Columbia.

MR. D.E. LEWIS (Shuswap): Mr. Speaker, seated in the gallery today are members of B.C.'s tourist industry, Lydia Linns, Dave Williamson, George Dover and Duncan Myers. I'd like the House to welcome them.

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, I rise on a point of privilege. Apparently yesterday a number of copies of the report which could be referred to as the Keenleyside report on firefighting in the province were made available to members of the press, and you, Mr. Speaker, will be aware of press reports last evening and again this morning dealing with this report. I understand also that Dr. Keenleyside has reportedly held a press conference. It may be an oversight on the part of the Hon. Attorney-General, but it may also be an affront to the Legislature to the effect that the report has not yet been presented to this Legislature, has not been tabled. I sought a copy this morning from the Attorney-General and, while he was very polite and helpful, he was unable to provide me with a copy of the report.

HON. MR. MACDONALD: Mr. Speaker, the Hon. Member, and I don't say for the first time in this session, has a very valid point. I received the report and I opened it to the public. I should have deposited one in the Legislature. It's being printed at the Queen's Printer, so all Members will have a copy, but that's 10 days and I didn't think it should be held up that long. I would like to ask leave at a later stage today to file a copy in the Legislature itself. It was not appointed by the Public Inquiries Act or by a statute or something. It was kind of informal, which perhaps is the way a committee of investigation should act sometimes to get the best results, and I treated it rather informally. To that extent, I'm wrong.

MR. SPEAKER: I think the Hon. Member will know that a report that is a statutory report should first be tabled in the House. In this case, it perhaps doesn't qualify in that fashion. Nonetheless, I think the Hon. Attorney-General has made amends in any event.

Introduction of bills.

AN ACT TO ESTABLISH
A MEDICAL DATA BANK

On a motion by Mr. D.A. Anderson, Bill 137, An Act to Establish a Medical Data Bank, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

AN ACT TO PROVIDE FOR
PAYMENT OF LOCAL TAXES
BY THE BRITISH COLUMBIA RAILWAY

On a motion by Mr. Gibson, Bill 138, An Act to Provide for Payment of Local Taxes by the B.C. Railway, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

NATIONAL CABLEVISION LIMITED
TRANSFER OF JURISDICTION ACT

Hon. Mr. Macdonald presents a message from His Honour the Lieutenant-Governor: a bill intituled National Cablevision Ltd. Transfer of Jurisdiction Act.

Bill 133 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

MR. SPEAKER: The Hon. Member for North Vancouver–Capilano (Mr. Gibson) reminded me of the point of privilege that he raised on Monday, and I'd like to briefly say that his point of…. I shouldn't say he raised it; he asked for a decision. The Attorney-General (Hon. Mr. Macdonald) claimed a breach of privilege with respect to the question that had been asked by the Hon. Member for North

[ Page 3366 ]

Vancouver–Capilano on June 9, which the Hon. Attorney-General complained was misleading the House.

The question raised by the Hon. Member related to whether or not the Hon. Member for Esquimalt (Mr. Gorst) and the Hon. Minister of Lands, Forests and Water Resources (Hon. R.A. Williams), being shareholders of a private company, B.C. Steamships, 1975, Ltd., had made a declaration of trust in favour of the Government of British Columbia on the shares they hold. He went on to ask:

I would ask the Member (meaning for Mayor for Esquimalt) if he was aware of section 88 of the Canada Corporations Act which says that to exercise the powers of a director one must own the shares absolutely in their own right.

He goes on in his statement:

There are only certain exclusions for those holding shares in trust, which I wouldn't believe would apply to the Hon. Member. Therefore, how can a board of directors function with zero legal members? That is my question.

I'm quoting from the Hon. Member as shown in Hansard.

Now I looked at section 88(l) of the Canada Corporations Act which states, subsection 1:

"Subject to subsection (2) no person shall be elected as a director of a company or appointed as a director to fill any vacancy unless he or any other company of which he is an officer or a director is a shareholder and, if the bylaws of the company so provide, owning shares of the company absolutely in his own right, or in the right of such other company to an amount required by the bylaws of the company, and not in arrears in respect of any calls thereon."

I checked the public filings the other day — on Thursday — with regard to this company, at the request of the same Hon. Member for North Vancouver–Capilano. The bylaws do not provide, as I have confirmed, for a director being required to hold his shares "absolutely in his own right." As I said Monday, the signators of the incorporating documents declared themselves as holding the founding shares in trust, and the bylaws do not prevent that. Thus section 88 is not at issue, and the Member for North Vancouver–Capilano misunderstood section 88.

In looking at the wording used by the Hon. Member in his questions, he stated:

I would ask the Member if he was aware of section 88, which says that to exercise the powers of a director, one must own the shares absolutely in their own right.

That is not the meaning of section 88. He added:

There are only certain exclusions for those holding shares in trust, which I wouldn't believe would apply to the Hon. Member. Therefore, how can a board of directors function with zero legal members?

As anyone can analyse, section 88 allows shares to be held in trust, providing the bylaws of a company do not state that the directors must hold shares absolutely in his own right. The bylaws, as I said, do not provide that the directors must own the shares absolutely in their own right.

Now the Hon. Member was not aware of the bylaws. I can see that from his question. Therefore I point out to the Hon. Member that the statements made in question period by him, serious as they may be on occasion, in this matter appear to arise from misreading the section and belief that section 88 does not provide for the legal appointment of the Hon. Member for Esquimalt, the director referred to in the question.

Had the Hon. Member studied the bylaws, he would not have proceeded on the basis of belief in his allegation. He probably would have thought better of it. I'm sure he would have.

In the circumstances, his own words do not show a deliberate act to mislead because part of the facts were patently not known to him. The matter could still be taken up by notice on the order paper, however, should the complaining Member choose. But it does not, in my respectful view, consist of a prima facie case justifying priority over orders of the day. The allegations complained of do not require immediate intervention since they cannot be said to affect the capacity of the Hon. Members, who are complaining, to carry on their legislative duties. Consequently, I don't see that as a prima facie case. I point out that the Hon. Member was in error, and I presume it was a sincere and mistaken error.

MR. D.A. ANDERSON (Victoria): He didn't provide that information: He didn't give that information to anyone.

SOME HON. MEMBERS: Oh, oh!

MR. G. F. GIBSON (North Vancouver–Capilano): Mr. Speaker I thank you for your ruling, but there's no breach of privilege here. There is one thing you said in your statement which I would like to have cleared up. You say: "…the mis-statements of the Hon. Member during question period, serious as they may be on occasion…." I take it you didn't mean to imply that I make serious mis-statements during question period. I hope I don't, Mr. Minister.

Of course, the bylaws of the company were not available to me as the Canada Companies Act provides.

SOME HON. MEMBERS: Oh, oh!

MR. D.A. ANDERSON: They were not available to him!

[ Page 3367 ]

MR. GIBSON: No, they weren't. They weren't available to me at the time I asked that question.

MR. D.A. ANDERSON: They wouldn't make them available. Covered government.

MR. GIBSON: Mr. Speaker, there's one other thing that I would like to have set right in the record. The Attorney-General (Hon. Mr. Macdonald), in a thoroughly waspish mood when he raised this so-called question of privilege, made the statement that what I said was either recklessly wrong or deliberately false — deliberately falsely made. Later on he said "recklessly wrong, or deliberately misled the House." Mr. Speaker, that is not a fact, and I would like the Attorney-General to withdraw those words.

MR. D.A. ANDERSON: Right! Apologize. Shameful behaviour.

HON. A.B. MACDONALD (Attorney-General): Mr. Speaker, I'm glad to accept the explanation of the Hon. Member, and I withdraw any suggestion that he deliberately misled the House. I am entitled, however, as a Member of this Legislature, to say that in my opinion the Member was recklessly wrong.

MR. D.A. ANDERSON: Where were the bylaws? Can you provide them?

HON. E. HALL (Provincial Secretary): Mr. Speaker, while nobody wants to exercise a kind of overkill operation in this regard, I think that somebody should remind the Hon. Member, who is new….

MR. D.A. ANDERSON: Is this a point of order?

HON. MR. HALL: It's a point of order. It's on the same point of order.

Interjections.

MR. SPEAKER: Order, please.

HON. MR. HALL: Mr. Speaker, this session the Member for North Vancouver–Capilano (Mr. Gibson) has already accused the Provincial Secretary of being in contempt of the House over the alleged releasing of government wage settlements. His charge was shown to be without foundation. Mr. Speaker, your ruling now indicates that he claimed contempt of the House over operations of the Princess Marguerite and the rent commission, both of which have got statutory provisions under way. Yesterday, headlines again scream "illegal acts" based on that question by the Member, and which again has been shown to be groundless.

Mr. Speaker, in any game I know about, whether it's politics or business or anything else, three times at bat, three strikes and you're out. I think he may have done a lot in the terms of getting headlines outside, but he's done little in terms of his reputation inside here.

MR. GIBSON: Mr. Speaker, if the Provincial Secretary wants to pursue this, I trust I'll be entitled to a short reply. Point (1): his department did release information to the Employers Council of British Columbia which he did not make available to this House.

AN HON. MEMBER: It was available.

MR. GIBSON: Not in the form it was released.

Point (2): there have been, and I say unquestionably and no person in the government has denied that, illegal expenditures not authorized by this Legislature. I challenge the Provincial Secretary to deny this.

MR. SPEAKER: Order, please. We've been over these arguments before.

MR. GIBSON: He raised them again.

MR. SPEAKER: I point out that my decision on this question is that there's no prima facie matter that should set aside the orders of the day. What any Member does about it now, they would have to do by motion on the order paper. I leave the matter at that, and I hope it will end there. I hope we'll all be wiser for it.

Oral questions.

ICBC STRIKE EFFECT ON
LICENSING TEENAGE DRIVERS

MR. W.R. BENNETT (South Okanagan): Mr. Speaker, to the Minister of Transport and Communications: in his duties relating to Insurance Corporation of British Columbia, can the Minister assure the House that contingency plans have been made to assure that teenage drivers can obtain an interim licence in view of the fact that many are losing student summer employment opportunities from lack of a licence being issued after they pass the exam?

HON. R.M. STRACHAN (Minister of Transport and Communications) : I can't give that assurance right now. There is a strike on, as you know. I'm not on strike.

[ Page 3368 ]

AN HON. MEMBER: Go to work, then.

MR. BENNETT: Just a supplemental. Does the Minister not consider that a procedure for the issuance of an interim driver certificate could be worked out by the use of government agents throughout the province? These students have been encouraged to work and many have…. I have cases that have been phoned to me — that they've passed their driver's examination, they have a summer job lined up that is contingent upon them being able to drive, and they can't be issued a licence because of a strike that is no fault of their own. These young students all want to work. Couldn't the Minister consider a procedure as I've suggested?

HON. MR. STRACHAN: I want to remind the Hon. Leader of the Opposition that less than a week ago I was violently attacked by the Member for Columbia River (Mr. Chabot) for strikebreaking, for doing much less than what you're now asking me to do. A violent attack by that Member, accusing me of strikebreaking! Something I've never done and do not intend to do.

MR. J.R. CHABOT (Columbia River): You are a conspiracy.

AN HON. MEMBER: Oh, oh!

MR. SPEAKER: What was that? I didn't quite hear that, but it sounded like something like…

MR. BENNETT: I'm still waiting for an answer to my question.

HON. MR. STRACHAN: He said I was part of a conspiracy, Mr. Speaker.

MR. D.M. PHILLIPS (South Peace River): No, he didn't say that at all. He said you were a conspiracy.

HON. MR. STRACHAN: Well?

MRS. P.J. JORDAN (North Okanagan): Would you rather he called you a disaster?

MR. SPEAKER: I think the expressions are unparliamentary. I would ask the Hon. Member for Columbia River (Mr. Chabot) if he would like to clear up that it is not meant to be an insult. It is not intended to be an insult, I hope.

MR. CHABOT: Of course not.

MR. SPEAKER: Well, you might stand and say so. It might help a bit if you stood up.

MR. CHABOT: Of course not.

MR. SPEAKER: Thank you. The Hon. Member for North Okanagan.

Interjection.

MR. SPEAKER: A point of order.

HON. MR. STRACHAN: For the information of the Member, it is my understanding that there is a joint application that has been made under the laws of this province by the Public Service Commission and the government employees' union to determine what relationship there is in the allied field between such action and the present strike.

MR. BENNETT: A further supplementary. Does that mean that the Minister, until such report has come, could initiate no action to ensure that these students can achieve the summer employment that is contingent upon a driver's licence after they have passed the examination, and they are presently denied a licence in British Columbia after passing the examination and thusly are being denied summer employment?

HON. MR. STRACHAN: Unless you are specifically requesting me to indulge in what could be an act of strike-breaking, we will have to wait until the legal procedure under such an application is fulfilled.

MR. BENNETT: What you are saying is no.

MR. CHABOT: Supplementary to the Minister of Transport and Communications. The OTEU, the employees' representative of ICBC, has accused ICBC of strike-breaking tactics. Has the Minister investigated this serious charge?

HON. MR. STRACHAN: Certainly I investigated that serious charge. I found that what the Insurance Corp. of British Columbia has agreed to do is to use people not involved in the strike to provide in hardship cases as I was requested to do by a Member, so that the widow of someone who was killed in an accident can get her insurance money or some old-age pensioner whose home has been burned down can get his compensation as soon as possible. We are taking such steps as we can to meet hardship cases. That was in the memo.

SALES OF BABIES

MR. D.A. ANDERSON: To the Attorney-General, Mr. Speaker. In the light of the statement by one Joseph Reid, the executive director of the Child

[ Page 3369 ]

Welfare League of America, that organized crime is thought to be entering the business of selling babies to adoptive parents, and his statement, "I have no doubt some people in Canada are involved, too," may I ask the Attorney-General whether CLEU or his department is aware of any British Columbia babies being sold across the line in this way, or whether they have undertaken any investigation of any links between crime and adoptive services in British Columbia?

HON. MR. MACDONALD: Mr. Speaker, not to my knowledge. I checked with the Minister of Human Resources (Hon. Mr. Levi). That doesn't mean that a thing of that kind should not be further investigated.

MR. D.A. ANDERSON: Well, if the Attorney-General believes a thing of this kind should be further investigated, may I ask the Attorney-General whether he will give an undertaking to the House that his belief will be followed by action and we will see some sort of investigation, either by his department or that of the Minister of Human Resources, so that we can be assured that this practice is not in actual fact taking place in British Columbia?

BUS FARE PASSES

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I would like to follow up on the question I asked the Minister of Municipal Affairs yesterday with regard to the bus line service to Sooke. I have here the public passenger tariff which was filed under the Motor Carrier Act on November 23, 1973. On page 5 it clearly documents that a pass rate at $34 per month is part of the rate structure. In light of the fact that the B.C. Hydro buses are now providing this service but not the pass, is not the department in breach of the legislation contained in the Motor Carrier Act?

HON. J.G. LORIMER (Minister of Municipal Affairs): Mr. Speaker, I don't believe we are in contravention of the Motor Carrier Act in that regard, due to the fact that we are not operating under that particular licence. That is the licence that the previous operators were operating under. However, I am personally in a little embarrassing position because I didn't realize there was that pass system, and I did publicly say that we would give the service at the same rates that were granted before. As I mentioned yesterday, we have some difficulty in this, due to the fact that if we treat Sooke in that manner, then I think we would have to look at the rest of the province and do exactly the same thing for them. It is a bit of a problem and we are still looking into it.

MR. WALLACE: Supplementary, Mr. Speaker. In that regard then, since it is government policy to encourage people out of their cars and into the buses, and since the pass is just such an incentive, can the Minister tell us if he has some time in mind by which time he will decide on the pass issue generally? Perhaps could I just quickly ask if he has had a chance to check out the other question I asked about federal employees travelling free on the buses and to what degree the federal government compensates the provincial government for this cost?

HON. MR. LORIMER: I would certainly say that we have studied the pass system, but we don't feel that 100 per cent discount on a pass is reasonable. We feel that that is quite a substantial reduction. We are looking more to a 15 per cent reduction for the past system.

Now I haven't got the answer yet for the question you asked yesterday.

HOMES LEFT UNSOLD IN
MEADOWBROOK SUBDIVISION

MR. PHILLIPS: Mr. Speaker, I would like to direct my question to the Minister of Housing. I would like to ask the Minister if he is aware that not all of the homes that were offered for sale by Dunhill in the Meadowbrook subdivision in Coquitlam have been sold at the present time.

HON. L. NICOLSON (Minister of Housing): Mr. Speaker, that's not what I understand. I'll look into it.

MR. PHILLIPS: A supplementary, Mr. Speaker. The information I have is that not all the homes are sold due to the fact that some of the homes still have defects in them. I have brought this up in this Legislature several times before, and the Minister heaped scorn on me for being concerned about the safety….

MR. SPEAKER: Order! What is the question.

DEFECTS IN MEADOWBROOK HOMES

MR. PHILLIPS: The question is, what does the Minister intend to do with regard to the continuing defects which he assured me were being cleared up? Last night on a CTV programme Mr. Dick Reaveley said he found in his basement two building inspector rejection slips for the foundations of the Meadowbrook home. He found the foundation concrete half-buried in his back yard. He found other examples of bad workmanship such as staples instead of nails, sloppy finishing work. He believes that if these defects are repaired, the house might be a good deal.

[ Page 3370 ]

He is forming a group of citizens in this subdivision, Mr. Speaker….

MR. SPEAKER: Order, please. This is not a time for giving information, but for asking a question, which you have already asked. Would the Hon. Member be seated so that we can get the answer?

MR. PHILLIPS: Well, I'd like to ask the Minister if….

MR. SPEAKER: You have already asked the Minister a question. One question at a time.

Interjection.

MR. SPEAKER: One question at a time. You've already asked the question.

MR. PHILLIPS: Well, if you'd quit pushing me, Mr. Speaker, I'd like to ask my question.

MR. SPEAKER: Question time isn't that long, you know.

MR. PHILLIPS: I've seen other Members give information before they lead up to their question. I'd like to ask the Minister what he is going to do to clear up this situation.

MR. SPEAKER: You have already asked that. Would the Hon. Minister answer?

MR. PHILLIPS: Well, the Minister hasn't answered.

MR. SPEAKER: He hasn't had a chance.

Interjections.

MOUNT BENSON HOUSING PROJECT

MR. CURTIS: A question to the Minister of Housing with respect to what is known as the Royal Canadian Legion Mount Benson housing project in Nanaimo. The most recent stage is in a position of advanced planning and I understand a grant of approximately $5,000 was indicated to be forthcoming from the provincial government for this particular project. Would the Minister indicate if this money has been delayed, or if it has in fact been withdrawn? What is the present circumstance regarding provincial participation in the latest stage of this housing project for senior citizens?

HON. MR. NICOLSON: Mr. Speaker, moneys are allocated by order-in-council. No order-in-council has been passed; therefore no money has been withdrawn.

MR. CURTIS: A supplementary. Does the Minister, Mr. Speaker, foresee any delay or problem associated with this particular housing project with the Royal Canadian Legion having been given an indication at least in advance that there would be provincial participation?

HON. MR. NICOLSON: Well, Mr. Speaker, as the Member well knows, this government has increased the allocation under the Elderly Citizens Housing Aid Act over 600 per cent, Mr. Member, and we are, of course, reviewing all applications. We've taken a lot of the disincentives away from the municipalities. We have a tremendous response in this programme. We are having to look at the ways and means by which we can participate and assist all of the people that are making application to us.

MR. CURTIS: A supplementary, Mr. Speaker. Is this project in jeopardy in terms of provincial participation? Yes or no, Mr. Speaker?

Interjection.

STATUS OF JOYCE NASH

HON. MR. HALL: Mr. Speaker, a short time ago the Member for Columbia River (Mr. Chabot) asked me a question regarding a person he named in the House, and he described the person's political affiliations. This person is Mrs. Joyce Nash. The Member for Columbia River asked me if we had appointed her or if she was working or receiving anything from the government. I asked the Member if he would assist me in this inquiry and he did speak to me after about it and said he thought he had observed something about Mrs. Nash.

I checked the records and Mrs. Nash is in receipt of no appointment by order-in-council or anything from the Public Service Commission or the government. At one time, some time ago, which ceased quite some time ago, she was acting as a constituency secretary for the Member for Cowichan-Malahat (Hon. Mr. Strachan) — as we all have, as the Members know, people working for us.

So my answer to this question is a simple no.

MR. FRASER: I've got my exercise today.

MR. SPEAKER: Well, if you leave your microphone up, I'll try to recognize you.

INCREASE IN STUMPAGE RATES

MR. FRASER: It's been up all the time.

A question to the Minister of Lands, Forests and

[ Page 3371 ]

Water Resources. With reference to his announcement that stumpage rates will increase from the minimum of $1.10 per 100 cubic feet effective July 1, the increase to be tied in to the price of lumber, does the Minister realize that this action by the Forest Service of increasing the stumpage will cause massive layoffs in the forest industry? Will he reconsider this decision and delay the increase in stumpage rates?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): Mr. Speaker, the announcement was very clear. The implementation of normal stumpage practices will relate to market; it will relate to the previous three-month market pattern. The previous three-month market pattern, in many instances, will be exactly the same as minimum stumpage. In some instances, with selected species such as white pine or some others, there have been a few operators getting considerable benefits at the expense of the public purse, basically. That's really been inequitable in relation to other operators in the industry. So if the market remains low, they'll be on minimum stumpage, despite the change, simply because the market is low.

In addition, the decision was also very clear with respect to the benefit of chip prices in relation to the stumpage paid. The chip price valuation in relation to stumpage will remain at the old low level, which was around $11, whereas the operators are in fact receiving the $35 level for chips sold to the pulp mills. So considerable benefits prevail for all of the operators in the province.

Orders of the day.

HON. E. HALL (Provincial Secretary): Mr. Speaker, by leave of the House we could proceed to public bills and orders.

Leave granted.

HON. MR. HALL: Mr. Speaker, adjourned debate on Bill 93.

LIQUOR DISTRIBUTION ACT
(continued)

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, Bill 93, entitled Liquor Distribution Act, is designed, according to the Attorney-General's (Hon. Mr. Macdonald's) comments, to civilize and make less barbaric — I think that was one of the words used — our present….

HON. A.B. MACDONALD (Attorney-General): Debarbarize.

MR. WALLACE: Debarbarize, if that's the word — if there is such a word.

Interjections.

MR. WALLACE: At any rate, another phrase that has frequently been used is "make our drinking habits more civilized." Distribution, obviously, is a key aspect of that topic.

I think, above all, the first unequivocal point that should be made in this debate, and on the other related bill, is that of all the drug problems, alcohol is unquestionably the worst, the most serious, the most pervasive and perhaps as tough as any other drug problem to tackle. The LeDain commission, which spent exhaustive hours and many, many meetings in all parts of the country, has put that on record, and that cannot be debated.

I might say in passing, Mr. Speaker, that that surely should make it plain to all of us that the problems we're having with alcohol should in no way encourage anybody to suggest that it would be appropriate to legalize marijuana. Because we have one evil in society that we can't control or get rid of, it seems to me absolutely insane to suggest that we should legalize another one, regardless of its relative dangers or lack of dangers in relation to alcohol.

The real principle of this bill, Mr. Speaker, is accessibility of alcohol to the people in British Columbia. I think the question we have to answer in determining whether to vote for or against this bill is the degree to which access leads to increased consumption. I just want to say that I'm not the least bit impressed by the frequent comments we've heard about the European habit of so-called civilized drinking. I want to refer in a few moments to why I find that an unfortunate opinion, and one that is expressed many times.

On many occasions we've heard in this House of the social cost of making alcohol readily available; I'll try not to be repetitive. We've heard about the traffic accidents, the associated crimes, the mental and physical illness; we have broken homes, we have the welfare costs, and last but not least by any means, we have a large number of alcoholics. I would just quickly refer again to the Minister of Highways' (Hon. Mr. Lea's) excellent report for 1974. I just want to read this into the record: "Last year there were 518 fatal accidents in British Columbia — 44 per cent of them involved alcohol. Of 218 fatal accidents where alcohol was involved, 32 per cent had a blood alcohol over 0.08." In other words, of all the fatal accidents, 14 per cent of the people involved were impaired.

This is not the kind of debate where we should go

[ Page 3372 ]

into a whole list of statistics. I think if you just take that particular item on its own, it brings home the importance of determining whether we should make alcohol more readily available to the individual.

Some of the research that's been done, Mr. Speaker, and which relates essentially to the principle of this bill shows that social costs are very closely tied to average consumption and not to the number of alcoholics, and I think this is extremely pertinent to this bill. Too often we zero in on admittedly the serious problem of alcoholism and alcoholics, perhaps because each of us who does a bit of drinking, myself included, likes to try and evade the fact that there are large problems arising from social drinking short of the level at which the person becomes an alcoholic.

I spoke in the House on April 4, 1974, and quoted the same researcher of world renown that I'd like to quote today, Dr. David Archibald of the Ontario Addiction Research Foundation. He is quoted in a recent article in The Observer as stating: "At present, Canadians drink 30 per cent more alcohol. Each average individual drinks 30 per cent more than 25 years ago. The proportion of Canadians drinking alcohol has gone from 60 per cent to 80 per cent." Some of the other facts that he brings out is a higher than average death rate from heart disease, ulcers, malnutrition, some cancers and pneumonia. And 65 per cent of all deaths due to sclerosis are due to the abuse of alcohol. His research shows also, at a time when we're talking about law and order and capital punishment and all the emotionalism that surrounds that very hot issue, that 64 per cent of murders in Canada are associated with alcoholism or the consumption of alcohol to a degree which determines the person's behaviour. A study done in Winnipeg showed that 75 per cent of referrals by court for sex offences, theft and forgery, and 39 per cent of rapes were related to alcohol consumption.

So I think it would be quite inappropriate to discuss the principle of this bill solely in the rather superficial sense of convenience of access by the individual citizen to alcohol outlets.

This same researcher I think makes a very interesting point, Mr. Speaker, and this is why I want to refer to the so-called French civilized drinking. He says:

"To a tourist, the French always seem to be sipping at wine, and hardly anyone ever appears to be drunk. It seems civilized, sophisticated and harmless, but the facts are brutally different. The research shows that the average Frenchman drinks three times what the average Canadian drinks. He drinks 25 litres of alcohol — that's the combined alcohol, liquor, beer and wine — compared to just under nine litres according to the study done in Ontario. Sclerosis deaths in France are six times those in Canada."

I'm sorry the Minister of Health (Hon. Mr. Cocke) is out of the chamber just at the moment, Mr. Speaker, because this same research shows that 42 per cent of total health expenditure in France is in alcohol-related disease. Forty-two per cent of the total health expenditure in France is on alcohol-related disease and 50 per cent of all hospital beds are occupied by patients who in some way have a problem related to alcohol. Wine in France is half the price of fruit juice, and one-third of the French people are tied directly or indirectly to the booze industry. They're either growing wine, distributing it, or selling it in cafes and restaurants.

I just have to say again, Mr. Speaker, that the social costs of alcohol are closely related to society's overall consumption. The social problems just can't simply be blamed on alcoholics, who are very much in the minority of all people who use alcohol. I think that the vital principle in this bill is to discuss overall consumption. It's quite clear from research that's been done in many parts of the world that consumption relates very clearly to two simple features: one is availability or accessibility, and the other one is cost. In France, Spain, Italy and Portugal wine is cheaper than a cup of coffee. The same applies to beer in Germany. It's interesting that these five countries lead the world in alcohol consumption.

Some other researchers have done some studies in Finland. I think this really should interest the Minister, since he's got a section of this bill we're debating which suggests the possibility — granted it's only the possibility — of government beer stores and government wine stores and government liquor stores. There seems to be the implication that we might see mushrooming of different outlets for beer and different outlets for wine and different outlets for liquor. I've already tried to make the point very clearly and well documented that the problems of alcohol and the social cost are clearly related to overall consumption. I'm saying to this House that what encourages increased consumption is ready accessibility and price.

In Finland, a study was carried out by two researchers by the name of Jan de Linto and Wolfgang Schmidt. They state as follows:

"In Finland, the government introduced stores for beer and wine in some selected communities. This led to a marked increase in the consumption of all legally sold beverages. More recently, the government allowed beer to be sold in a wide variety of stores and eating places. Within one year, alcohol consumption increased 50 per cent."

That is a study done in Finland. The interesting thing in Finland, Mr. Speaker, is that the Finnish government has taken these steps I have just quoted to make accessibility to liquor easier, and at the same time they have just hammered down in a most

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punitive way on the penalties that are applied to offenders convicted of drinking while driving, or driving while drinking — it adds up to the same disaster, usually.

One of my medical colleagues just returned from Finland a few months ago and we had quite a chat about this. He quoted the instance of where one of the Ministers of the government finished up doing hard labour, making the runway in Helsinki or somewhere because he had been found guilty of impaired driving. The punitive nature of the sentence involves work camps and hard labour and, as I say, one of the Ministers of the Crown finished up breaking stones for a runway at one of their airports.

It seems to me that we should learn from these other countries. It makes no sense to try to be liberalized or civilized or sophisticated by making booze more readily available and then screaming for higher penalties to penalize the drinking driver. It seems to me that there is a real danger in this bill and in other government efforts that we are running in opposite directions at the same time.

I would certainly support this government in ever-heavier penalties against the impaired driver. We have the example of a teenager killed on a sidewalk the other day by what appears to have been a driver impaired in some way. A completely innocent 16-year-old life was snuffed out just like that. Nobody need overlook the disasters and the sorrow and the tragedy which come from these events. But then we have to look at the start of the problem or one of the predisposing factors in making the problem worse. Surely that has to be availability and price of alcohol.

It has been established by the same researcher that I quoted a moment ago, Dr. Archibald, that the price of liquor has been dropping in relation to other costs and disposable income. Between 1949 and 1969, the average Canadian disposable income increased by 57 per cent, measured in constant dollar values. Wine went up 28 per cent, which was half as fast. Food costs, about which we hear a great deal and great public concern and we have a large federal establishment under Mrs. Plumptre going all over the country, quite rightly showing concern and investigating food prices, can be statistically shown to have risen 16 per cent during one recent period while booze went up by 2.5 per cent. Twenty years ago a dozen beer cost seven per cent of the Canadian per capita weekly income. Today, a case costs about three per cent. Not only are we making liquor and its other relatives more readily available by this kind of bill, but we have to recognize that in relative terms the cost of liquor, wine and beer is less today than it was years ago.

When you combine these two factors, I think the passage of this kind of bill has to inevitably lead to a greater consumption of alcohol because the bill in a variety of ways will make access to liquor, wine and beer easier for the individual. This seems to me very undesirable in the light of the solid, well-established, documented statistics and trends which I think the sources I have quoted demonstrate.

I will read into the record another piece of evidence which the Attorney-General received from the Salvation Army. I suppose many people, ill-informed and ignorant, will sort of scoff and laugh and say: "Oh, well, we know the Salvation Army is against booze." If they should say that, that is a hollow and shocking statement to make, because part of the social evils, the problems and social factors that arise from the use of alcohol get dumped in the lap of the Salvation Army because governments fall short in providing the kind of medical, mental health, treatment and rehabilitation facilities which the sale of the booze caused in the first place. So I hope we don't have any scoffers at the kind of statement I want to read, and which the Attorney-General received from the Salvation Army. This letter is dated June 3.

"In British Columbia alone the Salvation Army is operating four institutions for men and women, specifically designed to cope with alcoholic problems. The administrators of these institutions are finding that the number of people to be treated is increasing and the age of addicts to alcohol is becoming increasingly lower.

"We particularly object to the fact that alcohol is being made available in public parks and places where people gather for recreation. We deplore the fact that through legislation a number of outlets will increase and alcohol will be much more readily available.

"It is the opinion of the Salvation Army that increasing the outlets for the acquisition of alcohol will not in any sense lessen its use, but rather that the reverse is true. If this government seriously wishes to do something tangible about the problem of alcohol, it should pass legislation to restrict the number of outlets at which it can be obtained.

"We do not agree with the argument that the greater the sales, the greater the income, and thus more money available for the treatment of alcoholism. We subscribe to the view that if alcohol is less available, its use will be reduced and money will not be required to the same extent for treatment of its victims."

It goes on to make other points, but I think the main thrust of the letter is in the comments I have made. It certainly adds to the general contention I've tried to outline, that availability and price clearly affect general consumption. It is 'general consumption, not the number of alcoholics which leads to the tremendous social cost that's been

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outlined.

Mind you, Mr. Speaker, it's also quite clear from research that as the per capita consumption increases, there is a proportionately higher number of alcoholics. I'm not pretending that doesn't happen. When we have 80 per cent of the population using alcohol, and with the kind of social costs that I have outlined, we have to take a very serious look at whether or not legislation to make it more available makes much sense.

Mr. Speaker, I've heard the opinion expressed — well, why bother, if persons are very keen to drink alcohol, they'll get it somewhere, somehow at any price. That really doesn't stand up to rational inspection either: if that was the case and price had no effect, why would the skid row alcoholic be drinking vanilla essence? It seems to me that's the cheapest and sometimes the only available source — and I'm talking in relative degrees. Why do they drink wine instead of hard liquor? Because the wine is cheaper. For anyone to suggest that availability and price really don't matter and that we're all just fighting a futile battle when we try to improve society's problems in relation to alcohol — I think that's a false argument.

Relating back to Dr. Archibald, he pointed out that in studies carried out comparing different countries, one of the most pertinent factors in diminishing or restricting the consumption of alcohol is price. The more expensive it is, the less it is consumed. So I'm interested….

Interjection.

MR. WALLACE: The Minister has interjected. "We're looking at that right now," he says. It seems to me that that certainly has to be a factor which should be considered, along with this question of changing the distribution system and increasing the number of outlets.

Just to finish off, Mr. Speaker, I think it's rather sad that this bill is being discussed to some degree in isolation from the social costs. To me, there is an unfortunate air of resignation by many people in society that alcoholism like poverty will always be with us. This is a government that has dedicated itself to alleviating the needs and problems of the poorer sections of society. One of the goals of the socialist movement to equalize wealth and to help the poorer individual, so the old motto that poverty will always be with us is something which this government doesn't accept, and rightly so. But it seems as though they're accepting the theme that alcoholism will always be with us.

As I said at the outset, I think that alcohol in society will always be with us; it would be ridiculous to consider that it could be outlawed, for example. History shows that that is absolutely impossible to achieve and undesirable.

That's again, as I say, another reason why we should not legalize marijuana: two blacks never made a white, and two wrongs never made any right. I think that the important….

Interjection.

MR. WALLACE: Yes, I know Mr. Wong introduced the word "debarbarized," but he's not here to take credit for it on the floor of the House. I think his well-intended use of the word debarbarized is perhaps less than appropriate to this bill. I don't think that society needs to civilize drinking. I think society needs to educate the total community as far as is possible to the rational use of alcohol. But whether or not that kind of goal is to be achieved by making alcohol in all its forms — beer, wine and liquor — more readily available in a greater number of outlets over a greater number of hours, I have to question very sincerely.

The other factor which has already contributed to an increased consumption is the lowering of the drinking age in various provinces and countries. That, in turn, inevitably leads to increased consumption. In the lower age groups we only have to look again at some of the statistics that the Minister of Highways' (Hon. Mr. Lea's) report showed — and I don't think this can be overemphasized. The 1974 annual report on fatalities on the British Columbia highways showed that in the age group 16 to 25, these people in that age group were involved in 40 per cent of the fatalities.

So I recognize the Minister's well-intended motive in this bill to listen to the requests of many groups in society and perhaps to try and bring a more practical and what he believes to be a more rational approach to the way in which liquor is distributed and sold and made available in this province. I personally think it is a move in the wrong direction. I feel for the basic reasons I've outlined — and I don't do this in any kind of preaching approach, because I'm the first person to admit that I myself consume alcohol…. But I don't think there should be any problem in the present society that if I want a drink of liquor or wine or beer…that there's any kind of reasonable obstacle to me obtaining that through the present distribution system.

There may be minor ways in which some sanity can prevail. I have always complained, for example, about the stupidity of being in one building and not being able to take you glass with you from the lounge to the restaurant. This kind of absolutely idiotic regulation I agree needs to be changed. In passing, I might say the other fact about debates on liquor laws comes from the absolutely ridiculous way in which we debate principles in the bill when the real way in which the legislation is administered lies in the

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regulations. Apparently the regulations are subject to very varying interpretations in varying situations at different times. I made the point the other day about the whole basic way in which a democracy functions where we all come in here as elected representatives to debate legislation which appears to mean certain things, but which may mean very different things once the regulations are written after we all leave the session.

I feel that, looking at the total context of this bill and what it is intended to achieve, and what in fact it will achieve — namely, increased consumption, increased social problems, an increased number of alcoholics — I just have to say that in my view there is no real obstacle in our present distribution system that prevents a person from indulging to the degree he or she wishes in the consumption of liquor, beer or wine. So I certainly oppose second reading of this bill.

MR. D.E. SMITH (North Peace River): In rising to speak on this bill, I believe that the Attorney-General, in introducing Bill 93 to this House, had in the back of his mind the desire and the hope to provide a more enlightened approach, and a little better method of distribution of liquor through government outlets and its agents in the Province of British Columbia. I think that we could perhaps agree with him on that particular basis, that from time to time we have to review our statutes in the legislation that we have on the books in light of the present day circumstances and in light of not only the acceptance of liquor as something that one has a right to purchase beyond a certain age, but also in the light of convenience to these people.

So I believe that in some respects the Attorney-General (Hon. Mr. Macdonald), in introducing this bill to the House, has tried to provide us with an enlightened approach to the consumption of liquor and its disposal in the Province of British Columbia.

But, Mr. Attorney-General, the bill does contemplate a number of situations which I would like to listen to the Attorney-General explain when he closes second reading on the debate of this bill. I think it would be interesting to know some of the philosophy behind some of the provisions within the bill, and what really was the reason for some of the sections and suggestions within the bill.

For instance, Mr. Attorney-General, why was it necessary to name the general manager, the officers and every employee of the branch as a person designated under the public employees Act as a public employee, and therefore putting them in a position where they must disclose to the Minister, if you like, under the Public Officials and Employees Act? What was the reason for that? Does that contemplate provision that we're not aware of in the bill itself?

Has there been some specific instance brought to your attention where you feel that the people who are involved in one specific branch of government, including the lowest employees, are the ones who are least responsible for anything but the dispensing of liquor, and must put themselves in the position of disclosing to the Minister before they can become an employee? Is that the intent of it? Is the government considering a one select part of the business of government, as opposed to many others where we don't require that at the present time? That's in section 17, Mr. Minister. Employees who have great responsibility with respect to decisions they make and the type of finance they have available to them once that decision is made, we don't require them to disclose under the Public Officials and Employees Disclosure Act. If we did, I doubt that we'd require them to disclose to the Minister — it would probably be some other agent of the Crown. So why have we included that in this specific Act for people who will be employees? I can't see any real requirement or reason for that.

It deals with a listing committee — one of the new features of the bill. I'd like to know if the Attorney-General has a specific idea as to who will be employed as that listing committee.

Interjection.

MR. SMITH: Okay. They will be a listing committee responsible to the general manager, and through him, to the Minister of the Crown. Is that correct? Well, I would hope that they don't let personal philosophy or personal biases or preferences enter into the decisions they will make as a listing committee. I would hope they'll consider allowing the people of British Columbia to buy a Yukon mickey, for instance, in the Province of British Columbia in the future. Perhaps they should reconsider the sale of South African red in the Province of British Columbia — a wine that is much appreciated by many people. As a matter of fact many South African wines are much appreciated by people of the province who have no particular bias against that country.

I would hope that, above all, the listing committee, when it is functional, will be certainly set aside from the politicians of the province. I hope that there will be no interference by the politicians or the Minister or anyone else in the performance of their duties. After all, Mr. Attorney-General, this is too important a matter to leave in the hands of politicians. I think you've got to set up an unbiased and very fair-minded board that will not show their personal biases or preferences in this particular matter. It is something on which we want enlightened legislation in the province, but we don't want it

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overly reactive to either one particular cause or the other.

I notice that it's at the general manager's sole discretion as to what products will be listed and what will be unacceptable. And if it's unacceptable, there is no appeal against his decision.

HON. MR. MACDONALD: That is de-listing.

MR. SMITH: I think that's something…. Delisting? Well, even he can, first of all, declare it unacceptable. So why should that be at his sole discretion? It seems a little queer to me. If the bill contemplates the opening of new liquor outlets in the Province of British Columbia, and allows the general manager to place large advertisements in newspapers circulating in the area concerning such public places, I wonder if the Minister is contemplating something he has not yet told us about.

Is this to be used as a means of advertising, perhaps at a time immediately before an election in the Province of British Columbia? Are we going to replace the blacktop highways in the province now with booze-cruises and perhaps advertisements of a nature other than just in newspapers? Is this the intent of the Act?

There is another thing that I was very curious about in this particular Act, and that is that the Act, as it is written, contemplates the sale of liquor from time to time. In other words, it can be offered at a reduced price. Tell me, Mr. Attorney-General, are we going to have $1.49 day in the liquor outlets in the Province of British Columbia?

HON. MR. MACDONALD: We sometimes have them now.

MR. SMITH: Bargain basement days? Bargain-basement booze the day before an election? A $1.49 day throughout the Province of British Columbia, 24 hours or two days or a week ahead of an election?

HON. MR. MACDONALD: I can assure the Hon. Member that I am making notes of his suggestions.

MR. SMITH: Is this the intent of that section of the bill, to have bargain basement booze in the Province of British Columbia, $1.49 day — limit, two bottles to a customer, or one bottle to a customer, whatever it might be?

It also contemplates the sale of liquor on a credit system with satisfactory terms of credit being arranged between the Liquor Distribution Act people and your department. Is this the first step to Chargex in the Province of British Columbia? I realize that the bill as it is written deals with those people who will purchase liquor from the commission and then resell it, but does this contemplate a situation where the next step will be the introduction of Chargex cards in the province, or will the Liquor Control Board issue its own type of a charge card — an LCB credit card? If so, what interest are you going to charge on overdue accounts?

HON. MR. MACDONALD: What section is that?

MR. SMITH: Well, haven't you read the bill, Mr. Attorney-General?

MR. SPEAKER: Excuse me for interrupting, but I think the Hon. Member could well save any of the particulars of the nitty-gritty — whatever that is — for the committee stage and deal with the great, high principles of the bill.

MR. SMITH: I'm well aware of the rules of the House, Mr. Speaker, and I'm trying to keep well within the confines of what should be discussed, and that is the principle of the bill. But, after all, when a bill contains a number of new principles which have not previously been discussed in the House, I hope you won't deal too harshly with me when I refer to them.

I think the Attorney-General needs a bit of enlightening with respect to this bill. He doesn't seem to know what it's all about. So I'm sure he won't feel badly if I bring a few of these things to his attention so that he can check into them before the committee stage and perhaps introduce amendments which would be to the benefit of all of the consuming public and to those who do not imbibe in the Province of British Columbia.

With respect to the bill, as I said in my opening remarks, I believe it's an attempt by the Attorney-General and the people who advise him to bring in legislation which reflects to some extent the practices of the general public today and accommodates the situation.

HON. MR. MACDONALD: No credit cards.

MR. SMITH: All I ask the Attorney-General is: does he contemplate that further step, the introduction now of credit to those people purchasing liquor from the control board and, at a future date, credit cards or Chargex?

HON. MR. MACDONALD: Just licensees.

MR. SMITH: You are not intending to extend the…? Oh, then you are going to set up two classes of citizens in the Province of British Columbia: those who can buy liquor on credit and those who can't. Is that not a contravention of the human rights legislation of this province? I think the Minister of

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Consumer Services (Hon. Ms. Young) should look into the provisions of this bill. I think there is discrimination there, discrimination against the individual people in the Province of British Columbia as compared to the large liquor outlets that could well afford to purchase and pay in advance, cash on the barrelhead.

I think you should explain what you have in mind in that particular respect. I think you should also explain the concept of discounts on booze and the bargain-basement concept that I suggested could be practised on specified occasions in this Province of British Columbia.

HON. MR. MACDONALD: It is today.

MR. SMITH: Yes, I've walked into a liquor store and noticed — more than once — a few brands of liquor on sale. Frankly, they are generally the brands that no one has ever really had any desire for, or seem not to be very prompt in accepting the reduced price. It wouldn't be unreasonable to suspect that the prices on other more favourable brands of liquor might be reduced at a time convenient to the Attorney-General or to the general manager on the advice of the Attorney-General.

I do think the Minister should cover some of these items in closing second debate on this bill. It is a departure from some of the traditional and accepted practices of today.

When you break new ground, particularly in this area of the distribution of liquor, you always involve yourself in a problem. Some people would like to see prohibition. Others would like to see it wide open. Somewhere there is a middle path. I believe that responsible government must try to seek out that middle path. I would be interested, therefore, in hearing the Attorney-General's remarks when he closes second reading on this bill.

MR. G.B. GARDOM (Vancouver–Point Grey): Just a few short remarks, Mr. Speaker. I share the concern that the Member for Oak Bay expressed, as I think everybody in this House does. There is no question of a doubt about that. I think the liberalizing of liquor laws is something that is a long overdue in this province and I commend the Attorney-General for his proposal. I do think he has come up with a proposal which could perhaps be described as moderate. I think it will be publicly acceptable.

I would like to make a couple of observations here. The first is as to whether or not the ma-and-pa grocery concept for increased methods of distribution is the correct line. It appears to be the line that is taken by the government. I really have to question as to whether that is entirely wise. There is no question that a number of people in this House since I have been here have advocated a more realistic approach to the laws involving the distribution and consumption of alcohol and the elimination of the behind-the-barn attitude to drinking that has so long and so unnecessarily prevailed in the province.

I don't really feel that the proposed form of limited increase in access to beer and wine in the grocery stores is really going to do the job. The government has expressed the position that it doesn't wish to deal with food distribution chains, but when is a chain is a chain is a chain, with all apologies to Gertrude Stein? The IGA, Mini-Marts, Stong's, Max's convenience stores, 7-Eleven — if someone has got one store, it is not a chain? If somebody has two stores, does that constitute a chain?

HON. MR. MACDONALD: There is no Safeway.

MR. GARDOM: Pardon?

HON. MR. MACDONALD: There is no Safeway.

MR. GARDOM: Well, you are only going to rule out the Safeway, then. Are you going to rule out Super-Valu? You are just going to have to define that a little more clearly. We don't want any possibility of politics coming into play as to whether a chain is one or is not. Those kinds of proposals could well create political decisions. That is perhaps the very atmosphere we don't wish to have here.

I think it would have been much better if you had taken the California approach and let customer convenience be the principle test. Let spirits be properly merchandised and let violators be very swiftly and sternly dealt with.

I would say, Mr. Attorney-General, that the best thing to do is to free the minimum prices and let the public be entitled to make their choice. If the vendors of Guzzlers' Gin want to give the purchaser a deal, well, fine; just let them go ahead and have a fire sale or what-have-you, a discount for bulk or seasonal discounts, loss leaders. I think if the vendor wishes to give the purchaser a bargain, so be it. Let the purchaser be entitled to that break and let the public have the right and the freedom to tell the vendor when his services or his prices are out of line by letting the public go somewhere else. If you took that approach, Mr. Attorney-General, and more emphasized that approach, we would find there would be better variety, there would be better choice and certainly, in the long run, better service.

Retain indeed any laws that we may have affecting the quality of the products. Certainly hold on to that type of thing. But let service be the main decision here and, for goodness sakes, if a person wishes to have refrigeration, let that be provided.

I go along with the remarks enunciated by the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) a few days ago when he was talking. I think

[ Page 3378 ]

he said something to the effect that the mandate should be public requirements, public convenience, and completely shift from the mystique and the paternalism that have so long plagued this product and its method of distribution. I think all of that has really produced little but bad drinking habits, poor selection, limited variety and wretched service.

While we are at it, Mr. Attorney-General, while we are considering your two bills, why don't you bring in some companion legislation making it mandatory that the drinking and driving impairment levels and the penalties for breach be posted at every liquor outlet, in every store, beer parlour, cocktail bar, tacked onto every gasoline pump in the province. Constantly bring it to the attention of the general public, let them know that if their number of drinks exceed those which prevent them from taking to the road, let them be fully aware of what that level is. Let them be fully aware of the fines, the suspensions and the jail sentences that either he or she may possible face.

For that matter, Mr. Attorney-General, I would again advocate: take the more fair route and take into account some form of custody for all offences — perhaps some type of social-agency custody where a person spends some time in the hospital, or in a morgue, or riding shotgun with the police, or working old peoples' homes, dealing with civic cleanup — because the fine system is not a fair yardstick, nor is suspension. A fine for people in the lower- or middle-income groups is backbreaking, but it's somewhat insignificant from those in the higher income groups. Suspensions — they're far, far more costly than a fine, say, for a truck driver or a salesman, but no great problem at all to a teacher or an accountant.

So we need, in my view, Mr. Attorney-General, a penalty that is far more consistent, more universal, less related to economics, but leaving, once again, discretion to the courts for penalty assessment because the facts differ in each case and the circumstances differ. When considering a penalty, the courts have got to consider the detriment effect, the possibility of reformation of the accused, the protection of society and the gravity of the offence. I say: don't shackle the courts for one moment, but please expand the concepts.

I'd like to deal with one point before sitting down — one section in the Act — and just mention this: I still see that it contains a provision that liquor outlets are going to be closed on election day. I think that this is an ignorant anachronism in that it's a very demeaning connotation that the public would abuse their powers of judgment more particularly on election day than any other day — notwithstanding that there's an opportunity for a few political puns and observations there.

But on the whole, Mr. Attorney-General, I'm delighted to see that the government has come to grips with a problem, and has come to grips appreciating the fact that we can now bring British Columbia into the century in which it belongs, dealing with the distribution of alcohol. But with those few caveats, I intend to support the bill.

HON. MR. MACDONALD: Mr. Speaker, I've enjoyed the debate. I have listened because this kind of policy and concern is something that will not pass away with the passing of these two Acts by the Legislature.

In regard to some of the points made, while they might be best dealt with in committee, I notice the Hon. Member for North Peace River (Mr. Smith) brought up the question of lines of credit not Chargex, not credit cards. But after all, if the liquor distribution branch is dealing with a supplier, or if the liquor branch is dealing with a licensee like a major hotel, really, to trundle the cash over does not seem to be in keeping with the modern world. At the same time, the notion of credit card purchases by consumers has been rejected because we think that that may have something to do with encouraging alcoholism. I hope we're wrong, but that's the situation and we've rejected that suggestion.

In regard to the whole problem of moderation — that is the objective. I know we have another agency of government, the Alcohol and Drug Commission, which is actively concerned, and I hope will be increasingly concern with this problem. I hope they will move not only to their present activities, which include some driving retraining programmes and so forth, but also move very actively into the realm of detox centres in some of the smaller communities in the Province of British Columbia, as they are moving in the City of Vancouver.

I'm concerned about the cost of liquor products to the consumer because I see that the price of a cup of coffee escalates in value, and in relation to that, the price of a glass of beer has been shrinking — and probably shrinking, as the Member for Oak Bay (Mr. Wallace), said in terms of disposable income of people at the present time. So, frankly, we're looking at that because we are concerned with alcoholism.

We hope that the route we're taking, though, will help to promote moderation. Because if you have smaller units, and you break down the big establishments, you provide that there should be dancing space or recreation space and entertainment, or the opportunity for conversation, then, hopefully, these establishments will not be simply drinking holes. We think that the direction of this bill is in that way.

Let me say that the Hon. Member for North Peace River, and some of the other Members, mentioned things like the listing committee, and said that the Minister should not interfere with the listing committee. I agree. I think that the shadowy history

[ Page 3379 ]

of the liquor interests in the Province of British Columbia has been visited with sunshine under this bill. I would hope that under this bill the kind of appeal procedures we have set up, with the kind of written open decisions that will be given by the general manager, with the kind of listing committee that would be available to advise made up of members of the community, the bagman's occupation will be gone and the sign will be up: "Politicians trespassing will be prosecuted." If we could achieve that much in this area in this province, we have achieved a lot.

I move second reading.

Motion approved.

Bill 93, Liquor Distribution Act, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MR. MACDONALD: Mr. Speaker, second reading of Bill 99.

LIQUOR CONTROL AND LICENSING ACT

HON. MR. MACDONALD: Mr. Speaker, I will not repeat — the sections will be before the House in committee — what I said earlier when I touched briefly upon the provisions of both Acts, even though I was slightly out of order. I will be again listening if there are further comments in spite of the interesting debate we've already had, which, I think, has gone over both Acts, and I think it necessarily had to.

I move second reading.

MR. SMITH: Mr. Speaker, this again is an Act which I think the Attorney-General in good faith has introduced to this House to try to bring about some reforms and yet retain control within the field of liquor control and licensing.

It does include, though, a number of interesting things that I would hope the Attorney-General would look at, at least, before the bill comes back to us in committee stage. I would think that he could look at a few things.

HON. MR. MACDONALD: Oh, don't make me work too hard.

MR. SMITH: As a matter of fact, Mr. Attorney-General, in a number of sections of the bill the word "intoxication" is used — that occurs in sections 48, 50 and 54. But nowhere in the interpretation section of the bill is intoxication defined. So that's a bit of an unusual provision, I would suggest. You have some pretty stiff penalties that a person could be involved in for being intoxicated, but you don't define the term "intoxication." That seems to me to be incompatible with the intent of the bill and certainly would be an embarrassment, I'm sure, to the Attorney-General in trying to bring about an enforcement or prosecution under this particular Act. I would hope that he would look at that and tell us all before we move beyond this stage of the bill what the government really means by the term "intoxication."

I would also suggest to the Attorney-General that he should look very closely at and perhaps rewrite section 54, because it not only includes the term "intoxication" but it provides a very untenable position for a person involved in the dispensing of liquor, where they can be held responsible through no careless act of their own — through no act that could be defined as breaking the law. Those people are put in the position of being involved in a lawsuit. Not only that, but they might even go to jail under that provision of the Act for an indiscretion that they were not really responsible for but for which the Act holds them responsible. That is something, I think, that is bad, bad, legislation. I think it should be altered or perhaps removed from the Act altogether. So those are a couple of points that I think the Attorney-General could well look into.

My final remarks concerning this bill have to do, Mr. Speaker, with interpretation. I'd like to draw to the Minister's attention the interpretation of a "sports stadium." Sports stadium means "an establishment comprising stepped rows of seats designed and used for the presentation of a sporting or athletic event or spectacle, and includes an amphitheatre or arena." That seems to me to be a very, very loose interpretation of a sports stadium. That could almost be extended to include a Volkswagen but with a number of seats in the back end of it. It could include the floor of this assembly. It might even include the back steps of somebody's house — their personal property. I think that definitely needs consideration before we move on beyond second reading in this bill.

There again, that's an example of sloppy legislation drafted without the consideration it should be given; picked up hit and miss from other statutes, perhaps, or just pulled right out of the air — I'm not sure. If there is any section of legislation that we need clear definition it's in the dispensing of liquor and the provisions under which it will be sold, dispensed and controlled. Many offences occur that people are ignorant of, and they have become involved in a charge before the law, and many times a sharp lawyer finds a way around the law, Mr. Attorney-General, provided you have the wherewithal to pay for that particular lawyer's services.

So I would ask the Attorney-General to be more specific, more definitive in the wording that he uses for legislation of this type, because certainly when you step into these areas precise definitions are

[ Page 3380 ]

required so that people will know what is intended. Don't leave it up to the discretionary power of some poor policeman on the beat to decide what the law means or what was intended by this particular Act. A number of provisions within this Act show a tendency to sloppy draftsmanship, improper definition and bad generalities. Other than that, Mr. Attorney-General, it's not a bad Act.

HON. MR. MACDONALD: Other than that!

MR. GARDOM: I'd also commend the Attorney-General. Since we seem to be dealing with a specific section here, I'm going to — if I may, Mr. Speaker — transgress rules as did the former speaker, and I'm going to specifically draw to the attention of the Attorney-General this section 54 so he can give serious thought to it prior to its coming to committee. You're granting statutory power here into an area that has heretofore been one of the common law, and essentially the common law of negligence. That, as you well know, Mr. Attorney-General, has taken centuries to evolve. Stating it very shortly, one must take care to avoid acts or omissions which would injure one's neighbour. Then to determine who is one's neighbour, that would be the individual whom one would have in reasonable contemplation as being affected by such act or omission.

It's quite possible, Mr. Attorney-General, that that which you have codified or attempted to codify under section 54 could well be interpreted and could well be applied today under the common law of negligence. All of the circumstances would have to be considered. As I said, the evolution of this principle has been time tested, and it's been tested in literally hundreds, if not hundreds of thousands, of cases. The provision that you have suggested here is a very, very heady provision indeed, and it's capable of the widest interpretation and the most far-reaching consequences.

As the former Member stated, we don't find any definition of the term "intoxication"; we don't find any definition of the term "drinking liquor to excess" according to the terminology in this subsection. If you just take a look at it there could be liability, financial responsibility, even though the accident, the death, the injury, was totally caused by the intervention of, say, a third party.

I do suggest to you as sincerely as I can that this section has got to be reviewed. It's totally unpalatable in its present form. The reason I'm mentioning this is because it will give you an opportunity to have it looked at prior to its coming into committee. I think the best thing for you to do is to take it right smack out of the Act. It's not necessary because the common law can provide a substitute. We find, for example, in situations of claims by passengers in vehicles against the driver that if the passenger is saddled with knowledge of the impairment of the driver and chooses to run the risk and there's an accident, the passenger is not in a position of recovery. This might prevent that totally. You're really tampering with the common law in this one.

HON. MR. MACDONALD: Yes, we are tampering with the common law. There have been cases where an innkeeper has served liquor to somebody who was already intoxicated and that person has been involved in an accident and the third party has sued the innkeeper and won — and rightly so.

MR. GARDOM: Why codify it?

HON. MR. MACDONALD: Well, why codify it? Because that way it comes to the attention of the general public. We put a statutory duty upon people serving to beware of serving intoxicated people. It does happen.

MR. GARDOM: Is knowledge a factor? Is knowledge a factor?

HON. MR. MACDONALD: Oh, of course.

MR. GARDOM: Well, put it in the Act.

HON. MR. MACDONALD: Well, we'll look at…. Mind you, this kind of thing would have to be worked out in the course of court precedents.

MR. GARDOM: Oh, don't throw it out that way then.

HON. MR. MACDONALD: These are the ground principles, that those who serve liquor have now got a duty that is spelled out in legislation, not just the common law, to be careful how they serve that liquor. It's got to be something that is brought forcibly to the attention of those in the industry and the people generally.

You say there is no definition of intoxication. There was no definition of intoxication in the last Act and I think the courts can handle that problem as they have in the past.

The definition of sports stadium, Mr. Member, is rather wide, but it merely sets up a kind of facility by which the licensing authority, which would be the general manager, may or may not issue a licence, subject to appeal to the liquor board. So it is a wide area. The licence granted is what counts.

I move second reading.

Motion approved.

Bill 99, Liquor Control and Licensing Act, read a second time and referred to Committee of the Whole

[ Page 3381 ]

House for consideration at the next sitting after today.

HON. MR. MACDONALD: Second reading of Bill 96.

LEGAL SERVICES COMMISSION ACT

HON. MR. MACDONALD: Mr. Speaker, it is rather significant that on the day the bill is introduced we have in the City of Victoria national legal aid directors from, I think, every province in Canada. These are the technicians and leaders in the rather difficult task of delivering in a multitude of various ways legal services to people who otherwise would be bereft of those services. By our people sitting down with these people, sometimes with wider experience from other parts of Canada, we gain a great deal. That conference will be continuing for today and tomorrow. I regret that the Minister of Justice of the federal government is unable to come, although he was billed to speak tomorrow night.

In this bill, we establish our own Legal Services Commission. It is an independent commission and I want it to be independent. I don't want what could become the politics of legal aid to come into the Attorney-General's office. I think we should give these five people who will be on the Legal Services Commission that degree of independence. We, the Legislature, of course must vote the funds, and the department may set out the broad guidelines, by all means. But in the furnishing of those services, whether, say, in the case of the town of Williams Lake there should be services by a legal aid office storefront or whether it should be a contract with a local society, as we have done in the Abbotsford area already to furnish those services, or whether it should be done directly through the legal aid society that now exists on a fee-for-service basis arranged through the local bar is a question which, area by area, I would hope would be decided by the commission and not by the Attorney-General's office as such.

In my estimates, which the Legislature graciously approved along with my salary some months ago, we have voted some $4.2 million toward the provision of legal aid in this province, which I say will take various forms. In this bill we have the important concept of a partnership between government — because we appoint some members — the legal profession and the community. Lay people from the community will be represented on the legal services commission. My estimate is that two of them will not be lawyers out of the five. That is the present proposal, although the full membership of the commission has not been chosen. I have nevertheless announced my intention as to whom the chairman should be in the person of Don Jabour.

Under the federal-provincial agreement, we receive about $1 million. That is 50 cents per capita from the federal government to assist us with criminal legal aid. I would hope that next December, or before that time, we will sit down with the Hon. Otto Lang, the Minister of Justice, and renegotiate that agreement, because I think there are ways in which it restricts us in the provision of legal aid. The amount of money that is contributed by the federal government could, in my opinion, be substantially improved, particularly in view of the fact that the burden upon our legal aid services comes about by reason of the enforcement primarily of the Criminal Code.

We are, as we proceed with our programme, in this government hoping to reduce the load of litigation and make it easier for people to get advice. Therefore we have in addition sort of supplementary services which help to take the load off, such as the rentalsman, the officers of the Consumer Services department and things of that kind. And in the small claims court we hope to provide somebody who will be on the doorsteps of the court. We're going to do a student experimental plan this summer in respect to that with people who can give people a bit of an outline as to where they stand and perhaps settle between the parties cases that otherwise would go to the judge for needless litigation.

So, Mr. Speaker, I think this is a new day for legal aid in the Province of British Columbia. I think the objective is and remains to establish some degree of equality before the law for rich and poor alike. And insofar as this bill moves in that direction, I hope it will receive the support of the House. I move second reading.

MR. SMITH: In rising in my place to support the concepts of this bill, I think the one question we have to raise at this time is the position of the Legal Aid Society in respect to the appointment of a Legal Services Commission, and what the future of the Legal Aid Society will be in the Province of British Columbia.

I don't think anyone will disagree with the suggestion that the Legal Services Commission, when it is operative, should be an autonomous body separate from political interference of any sort whatsoever. I believe that that is the recommendation of the law society and almost everyone else that I have either talked to or had correspondence with concerning legal aid in the Province of British Columbia.

But there must be a feeling at least of uneasiness in the ranks of those engaged in legal aid at the present time through the Legal Aid Society, and they must question their future in light of the introduction of this Act. I would hope the Attorney-General will indicate the policy of his department with respect to the Legal Aid Society and its future in the Province of British Columbia.

[ Page 3382 ]

AN HON. MEMBER: Oh, it carries on.

MR. SMITH: Well, yes, and it is dependent to a great extent upon funding from the provincial government through the Attorney-General's department. Can the Legal Aid Society be assured of continual funding for the continuation of their work, or will they eventually be involved to the extent that their particular society will be phased out in the Province of British Columbia and be replaced by the Legal Services Commission?

I think this is a reasonable question and one that is on the minds of many people, particularly those closely associated with legal aid in the Province of British Columbia.

One of the other questions I must ask the Attorney-General, and I'd like his comment on it in closing this debate, is the relationship between this new commission provided for in this bill and the Justice Development Commission which is already in existence. Will the Justice Development Commission be phased out, or will it disappear in the course of time, replaced, as it were, by the Legal Services Commission Act? I think that there's good reason to wonder what the Attorney-General has in mind for the Justice Development Commission. After all, the funds appropriated, some $15 million worth, have been spent, I believe, to a great extent in providing new ranges of research and information on which many of the new laws and the new statutes have been developed.

So is it the intent of the Attorney-General as this new commission becomes active to phase out the Justice Development Commission? Or, on the other hand, if it remains, will it be a competitor?

HON. MR. MACDONALD: No.

MR. SMITH: Will it be a competitor? The Attorney-General says "No." It will not be a competitor. Does that mean, then, that we will be providing funds for both the Justice Development Commission in the future, and the Legal Services Commission? If so, will there be some attempt to define the areas of responsibility for each so that we do not have a duplication of services and wind up with almost identical proposals at taxpayers' expense; one from the Legal Services Commission and another from the Justice Development Commission? I think these are valid points that should be covered by the Attorney-General.

There's one other matter that I want to raise very briefly and that is that the bill contemplates educational services to people in the province.

The Attorney-General, speaking not long ago in the City of Vancouver, referred to a night law school class to be conducted in Vancouver for persons interested in law. I don't think he specified his full intent at that time as to who would be enrolled — whether it would be students presently studying for their law degree, or just what he had in mind. Is it contemplated setting this up through the Legal Services Commission? If so, will it in any way detract from or reduce the effectiveness of the new law faculty at the University of Victoria? Will they in any way compete with each other? I think the new law faculty needs every assistance that can be provided, not something that will detract from the work they do. I'm not suggesting that it will, but I think there should be a clearly defined definition between the work that will be done by setting up night classes in Vancouver and the objectives of a new faculty for law study at the University of Victoria. I hope the Attorney-General will comment on those points when he closes second reading.

MR. GARDOM: Mr. Speaker, this is something that I've argued and pleaded and cajoled and advocated way back since 1966. 1 can tell you, for me it's a banner day to see that we've brought this bill in this province because there's one characteristic of the law that's been a burden from the outset, and that's been its inaccessibility to those people who are economically underprivileged. The gap has been closing over the past year, with, I suppose, great thanks to the time and effort to a number of individuals and private organizations, and a mildly sympathetic ear of government. But the time has now arrived in B.C. when legal aid is going to be looked upon not as just a social measure, but as a democratic right.

I can recall that way back in 1838, Charles Dickens, through the mouth of the Beadle in "Oliver Twist", said: "The law is a ass." I would surely think it's seen the height of asininity in this day and age not to create a means of access to the law that is equal to all.

On the whole, there's not too much quarrel with justice being done within the walls of the law courts, but that has been little apparent conform to those people who have not been able to get through the doors. I think for anyone to say that there has been equal access to the courts in British Columbia heretofore would be rank hypocrisy. I think this is not any criticism of the courts or the lawyers — they've tried — but the poor have just not been able to afford the due process of law.

There's a very stark statement by the Canada Economic Council which said: "Poverty in Canada is real. It is more than simple income deficiency. It carries with it a sense of entrapment and hopelessness. The poor tend to be collectively inarticulate." These are the people, Mr. Speaker, who have viewed legal redress as a luxury. I compliment the Attorney-General and his government in reaching the conclusion that it is everyone's right. We are

[ Page 3383 ]

looking for equal justice for all, and certainly not relegated to the charities of some.

His bill is a flexible bill. In his opening remarks, I gather that this is a statute that is going to be somewhat territorially interpreted and utilized. Perhaps that's a good thing because to a great extent we're still a frontier province. But I assume that a person will be able to apply for legal aid, providing he's got furnished proof of inability to pay or inability to owe. I assume, Mr. Attorney-General, that there is a means test concept here. I'd like to have your views on that.

Upon the requirement of need being established, I would assume that a certificate of aid would be issued pretty well every kind of a legal case — contract cases, torts, accidents or domestic relations cases. It would cover also, say, appeals and advice concerning land matters, preparation of will and other documents.

It's been, from this quarter, a long fight. I am happy to see it has been a successful one. I intend to support the measure.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Mr. Speaker, very briefly I rise to support this legislation as well. I associate myself with the remarks of the Second Member for Point Grey (Mr. Gardom).

It has been my experience that the people who require legal advice and require it most, are often those who are least able to afford the cost. Not only are they unable to afford the cost, but there seems to be an inability to overcome the barriers of access to legal advice. Why this continues to be the case in 1975, quite frankly, is a mystery to me. There is, I suppose, a natural reluctance on the part of some people to seek the services of a lawyer because of a fear of the cost, and perhaps because of some of the mystery which has been allowed to surround the profession of law and its association with the courts.

In viewing the matter generally, Mr. Speaker, I think that access to the courts itself is not the real problem. I am convinced that much of the burden that falls upon the courts today could be removed if there could be early and competent advice made available to many of our citizens. I know that the Hon. Minister of Consumer Services (Hon. Ms. Young) has in her department a very grave problem with regard to providing early advice to people who fall within the area of consumer transactions and require assistance before they get themselves into the difficulties from which perhaps, they can only extricate themselves by access to the courts.

It's easy to say that people should seek advice in advance of involving themselves in consumer transactions, but because of this difficulty, by reason of regional representation, because of population differences in obtaining advice, this is not always possible. I would think that if this commission can discharge its responsibility and make available — readily available — competent legal advice to people throughout the length and depth of the province, the difficulties in the courts, the difficulties with consumer transactions will lessen as a direct consequence, and this can be done with much less cost to the individual and much less cost to the state than has heretofore been the case.

Nothing is more true than that an ounce of prevention is worth a pound of cure, and this applies in the legal field as well. I would hope that this commission can make sure that that ounce of prevention is available in all the areas of the province.

HON. MR. MACDONALD: Mr. Speaker, I appreciate what's been said about the bill. Criteria, I would say to the Second Member for Vancouver Point-Grey (Mr. Gardom), I've heard his speeches over the years in support of this kind of legislation. I would say in answer to his specific inquiry that the criteria of what you might call means tests, and the range of subjects that could be covered by legal aid, such as criminal, what kind of criminal, family, divorce, will be decided now by the Legal Services Commission.

I would say to the Member for North Peace River (Mr. Smith)….

Interjection.

HON. MR. MACDONALD: They will determine what kind of need must be shown and they'll work out the forms for application and so forth. It might vary from kind of case to kind of case.

I'd say to the Member for North Peace River that this bill was developed in close consultation with the Law Society of British Columbia and with the B.C. branch of the Canadian bar. I would hope, and I rather expect that we will have as two further members of the Legal Services Commission — perhaps I shouldn't say this because it isn't firmed up — Peter Millward, who is now secretary to the Law Society, and Peter Manson, who I think is one of the benchers, for the legal component of the Legal Services Commission.

Interjection.

HON. MR. MACDONALD: I think these gentlemen are giving serious consideration to serving. It's not in any way a competition with the law schools, it's nothing to do with the JDC; that has its own budget and the estimates for the legal services are voted under a different section of my department, so there's no inter-relation.

If we have a night school for the teaching of law in the City of Vancouver, which I can't announce because it's just something that were formulating and

[ Page 3384 ]

I've asked for feasibility reports on it. I would think it would be badly needed because I don't think the UVic law school is going to take up the slack and provide us with the young people to perform all of the necessary legal services in this province. I think we ought to open wider the doors of opportunity for young people to enter the professions, so I would hope that in an inexpensive way we might have a night school or a law school in downtown Vancouver, perhaps as a satellite of either UBC or possibly Simon Fraser University. But I would like to see the successful opening and the first class started in the UVic law school in September before we give breathless consideration to another faculty.

[Mr. Speaker in the chair.]

I think it's important. I move second reading.

MR. SMITH: What about the Legal Aid Society?

HON. MR. MACDONALD: The Legal Aid Society will carry on and this Legal Services Commission will not really deliver services, although it may. It will largely act through the Legal Aid Society, or through a community office, or through a contract with a local body such as even a civil liberties society, or the group that is now conducting things in Matsqui, Abbotsford, Sumas, where we've already signed the agreement — I think it's for $16,000 for them to provide legal services over a period of time. So they'll really act not directly, but through these various bodies. I move second reading.

Motion approved.

Bill 96, Legal Services Commission Act, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MR. STRACHAN: Adjourned debate on Bill 27, Mr. Speaker.

BRITISH COLUMBIA RAILWAY COMPANY

MR. SPEAKER: The Hon. Minister of Labour adjourned the debate, but he could still speak at a later time, according to the rules. Does anyone else wish to speak on Bill 27?

MR. D.M. PHILLIPS (South Peace River): I was caught a little unaware here, Mr. Speaker. Just give me a moment to collect my thoughts before you turn the clock on.

Mr. Speaker, I am happy to enter this debate this afternoon and talk about the British Columbia Railway. It has taken the consolidated efforts of the socialist demagogues to connive with certain people to blow up a storm of what they call deception over the past operation of the British Columbia Railway. I say it is nothing short of card-sharping because under false colours they have made their case on the grey areas of accounting known as depreciation.

In accounting practices, capital cost allowance or depreciation, depending on whether you are dealing with federal income tax or whether you are dealing with a private business is basically the decision of management as long as you stay within the terms of the federal income tax laws. In this case, the federal income tax laws are not applicable because it is a Crown corporation. So it is the decision, basically, of management as to what shall be depreciated and what shall not be depreciated. That is the sum and substance of the so-called scandal — the decision of the management of the British Columbia Railway as to how they will depreciate their lines.

Mr. Speaker, shortly after the present government took over, they commissioned three reports. One report, done by Price Waterhouse, deals specifically with accounting procedures on the British Columbia Railway. I have gone through the report, I find nothing very derogatory in the report and I will refer to it later.

Another report was a commission by Swan Wooster Engineering Co. Ltd. on the engineering methods and contract administration on the railway. I read through the report and I saw nothing scandalous about it — there are some recommendations. I will refer to it later.

The third report was on the status of management controls and the organization of the B.C. Railway, done by a very capable man, Mr. Cliff Sawyer.

All three of these reports were tabled with the government in mid-1973. These three reports were asked for, presumably, by the president of the British Columbia Railway and given back to the railway — two of them in August, 1973, and one on July 17, 1973. Out of the three reports there is not one single word that talks about fraud, that talks about the books not being kept open. There is nothing about facts being hidden; nothing about facts being hidden from the public; nothing about a scandal; not one single thing about the misuse of funds; no mention of fraud; no mention of the railway cheating. There is nothing in there that is even remotely connected to some of the charges that have been made in this House, by both the government and others of the opposition party, about deliberately trying to deceive the public of this province. These reports are available: they are available to the public; they are available to the government Members; they are available to the opposition Members.

As I say, I have studied all three reports and I would like to refer to them. But, as I say, Mr.

[ Page 3385 ]

Speaker, not one really derogatory word appears in these three reports which cover all the areas of accounting, engineering and management of the railway, and which in any way could amount to what the Premier is trying to bring up as a scandal on the management of the railway. So I charge the Premier with being guilty of political knavery.

First of all, I would like to refer to the review of financial reporting and control practices of the British Columbia Railway, a report commissioned by Price Waterhouse which is a well-known accounting firm in British Columbia. They did this report for the Premier of this province. I would just like to read a few excerpts from this report and from the letter accompanying the report which goes to Mr. G.S. Bryson, Deputy Minister of Finance, Province of British Columbia.

By the way, Mr. Speaker, Mr. Bryson has been secretary of the railway in British Columbia since 1954 — a man who was respected by the previous administration and a man who I am sure is very well respected by the present government and by the present Minister of Finance, a man who I am sure would have nothing to do with all of the alleged accusations that have been leveled by the government.

Mr. Speaker, in summing up their letter, which is a preface to the report itself, they say: "We also note that while the report of the comptroller-general raised a number of valid concerns about the effectiveness of the railway's financial system and controls" — which the Premier has mentioned in this House, with the report of Mr. Minty — "in other instances far more detailed studies placed a different perspective on the comments and criticisms that were made by Mr. Minty."

This is a direct quote from the letter accompanying the report from Price Waterhouse. They place a different perspective on the comments and criticisms that were made.

I am in no way attacking Mr. Minty, but the point I am going to bring out, Mr. Speaker, is that among accountants, and in the accounting procedure, if you go to four different accountants you can get four different views on accounting procedure, particularly when it comes to depreciation. If you go to four different lawyers you get four different views on a political problem. So this is a known fact with anybody who has been in the business world that different accountants have different views on accounting procedures. I want to say that at the outset.

In their summary of recommendations they talk about practices. They say the practices in many instances have not kept pace with the growth and the change of the railway, which is a valid concern because the railway is growing and there is now a need for important improvements to be made, particularly in the area of financial planning and control systems, which is a valid recommendation and a valid observation because the railway is growing.

"The report is focused upon areas of weakness and opportunities for improvement," the report continues. "It makes no attempt to describe the many administrative and operating factors of the railway," which are covered in another report which I have already mentioned, "which we found to be well conceived and effective." Price Waterhouse found the management of the railway to be well conceived and effective.

They also say: "Our recommendations are directed toward constructive action that we believe should be taken to ensure that the management control practices are in keeping with the present and anticipated future needs of the railway." I'd like to refer to their management accounting, which is a section of this report, Mr. Speaker. This is the head of section 11 on page 4: "Management Accounting. The accounting systems in the British Columbia Railway in the past have been directed primarily towards the traditional role of reporting financial transactions in a manner consistent" — and I want you to take particular note, Mr. Speaker — "in a manner consistent with the requirements of the uniform classification of accounts of the Board of Transport Commissioners for Canada."

Mr. Speaker, the Premier and Minister of Finance would lead us to believe that the British Columbia Railway was deviating from these procedures which are laid out by the Board of Transport Commissioners, and yet a report which was given to him in August, 1973, by Price Waterhouse clearly states that the railway has been directed toward the traditional role of reporting financial transactions in a manner consistent with the requirements of the uniform classification of accounts of the Board of Transport Commissioners for Canada.

Now where, Mr. Speaker, in heaven's name, is your scandal there? The government is trying to mislead the people of the province by trying to say that the railway, in its accounting practices, does not conform to the Board of Transport Commissioners. They go on to say: "While existing accounting and reporting practices may have been adequate to meet the requirements of railway management in the past, with the anticipated growth and diversification of the company, there is now a clear need for change." I don 't disagree with that because the railway is growing.

Where is all this scandal and hiding and cooking of the books that the Premier has been referring to? Let's look at capital expenditures. They say: "Our principal conclusion" — and again I am quoting from the Price Waterhouse report — "our principal conclusion, stated briefly, is that the financial control and reporting of capital expenditures in the British

[ Page 3386 ]

Columbia Railway is inadequate and should be improved as soon as possible."

But they go on to say, Mr. Speaker: "This is not meant to imply there has been an improper use of railway funds in the past. Rather it means that from a management control standpoint practice, present practices are lacking in effectiveness."

Now that's a perfectly good observation. I bet that you could go into practically any business in this province and upgrade the accounting practices in one method or another. And if you brought in another accountant certainly he's going to recommend upgrading because….

Interjection.

MR. PHILLIPS: That's right, because he's got to do something for his money. Now, with accounting practices, let's look at that — with depreciation, which the Premier seems to have hung his hat on: the railway was not depreciating properly and was therefore trying to cook the books and show a profit which wasn't there. What do they say about depreciation?

Mr. Speaker, it says that on January 1, 1956, the British Columbia Railway adopted the uniform classification of accounts prescribed by the Board of Transport Commissioners for Canada and commenced depreciation capital accounting for capital assets with the provision of $492,000 in that year. So the railway started using the uniform classification of accounts and commenced depreciation, which the Premier would lead you to believe they had not done. They started this practice in 1956. Why, this is a report from Price Waterhouse commissioned by the Premier.

Recommendations for accounting practices. They recommend that the company determine and define the objectives that it wishes to achieve through depreciation practices following which comprehensive accounting policies should be developed which would include definitions of what assets should be capitalized and the value to be placed on them and the practice to be followed in their depreciation and eventual retirement. As I said in the beginning, the decision with regard to depreciation, as long as it's within the accepted practices…and in this case the accepted practices of the Board of Transport Commissioners had been followed through by the railway.

Now as I stated previously, Mr. Speaker, you. can always have a difference of opinion. You have Price Waterhouse, you had the previous accountants, and now we have Peat, Marwick, Mitchell and Co. but merely to point out that there can be a difference of opinion among accountants. Here is an accountant who has a high reputation. He's being sued, in the United States, for the way he prepared the financial statement. Now he may very well win his lawsuit and not show them anything was done wrong. I hope he does, Mr. Speaker. But the point is, as I'm telling you, there can be differences of opinion with regard to accounting practices. You get three different accountants, you're going to get three different opinions.

With regard to the engineering methods, a report was prepared by Swan Wooster Engineering Co. There is nothing derogatory in this report. They did say, Mr. Speaker, and I agree, that maybe more engineering study should have been done so that the contracts could have been more detailed. But I also want to point out that in this same report it says that in the construction of the railway the final cost of $340,000 per mile, including ballast and track, taking terrain and railway design standards into account, compares favourably with other North American experience.

So where is all the talk of fraud on contracts we heard yesterday afternoon in this chamber? I want to tell you, Mr. Speaker, that some of the methods being used to construct that railway north to Fort St. John are probably saving the taxpayers of this province and the railway hundreds of thousands of dollars because of the methods being used and because of the fact that it can be done in winter construction. It's one of the first winter construction jobs ever carried on in a railway in the history of North America, and it's because of new methods being used. It eliminates the expense of having to move your equipment in or close it down for the winter. One of the prime contractors who has a majority of the contract on that particular line is using new and innovative methods. I think, Mr. Speaker, if you take the time to check with other contracts which have been awarded anywhere in Canada for the cost of moving a yard of dirt, whether it be gravel, clay or rock, you will find that dirt is being moved on that contract cheaper than anywhere in Canada. Again, as I go through the report, there is nothing derogatory about the engineering that had been previously carried on on the railway.

Mr. Speaker, with regard to the management of the railway — this is the third of the reports which the Premier had commissioned, and this is the one that was done by Cliff Sawyer of the 16 points of comparison — the British Columbia Railway is judged as above average in six categories, below average in only two categories, with the remaining eight rated as average. He makes some recommendations for staff changes, but there is certainly nothing in this report that would even come close to fraud, deception, gross mismanagement or negligence on the part of the railway.

But, Mr. Speaker, I've had an argument in this legislature with the Premier over standards of the railway in previous debate. In November of 1973, when the Premier wanted to pass through a bill in this House to advance $25,000 to the railway, we had a

[ Page 3387 ]

lengthy discussion on standards.

The Premier has based the fact that he must upgrade the railway to mainline standards on the recommendation of Mr. Swanson who did work for the department of commercial transport as the chief engineer and who supervised, or at least had to check the standard of the railway, for quite some time. But we find that the Premier used selective tabling when he tabled his reports. I have a letter dated November 3, 1973, marked "Personal and Confidential," to the Hon. David Barrett, Premier of the Province of British Columbia, Parliament Buildings, from J.S. Broadbent, vice-president, research and development.

Mr. Broadbent says, and I quote from the letter:

"I recently read a Vancouver Province article which referred to your quoting from a three-page letter you had received from Mr. Robert E. Swanson in which he reportedly made statements which I believe to be misleading, incorrect, and damaging to the railway and its staff."

AN HON. MEMBER: Oh, oh!

MR. PHILLIPS: It would appear that the Premier has made most of his decisions to upgrade the railway based on this letter and this report from Mr. Swanson. Mr. Swanson was in the employ of the previous government, and then he was hired as a director of the British Columbia Railway by the present government. I just have to read some of the statements that Mr. Swanson made when he was responsible for checking the safety of the railway under the previous government. I'd like to quote a little further from Mr. Broadbent's letter:

"Although I have not been afforded the opportunity of seeing Mr. Swanson's letter, I feel it is necessary in my position as director and officer, and former operating officer of the railway, to bring to your attention information that may be of value to you as president of the company and Premier of the Province of British Columbia.

"Following a tour of the British Columbia Railway line in 1970 — then the Pacific Great Eastern Railway — Mr. Swanson, in his year-end chief engineer's report to the Minister of Transport, the Hon. F.X. Richter, made the following statements: 'In summarizing the mainline between Fort St. John and North Vancouver, it can be stated that much has been accomplished during 1970 and the latter years of the 1960s in bringing the entire track structure up to mainline standards. Traffic has steadily increased, which has justified bigger power and longer trains which, in turn, demand track and substructures to accommodate the bigger power and heavier trains and equipment.

"Management must, therefore, be given credit….'"

Now this is Mr. Swanson speaking, the man who later told the Premier that safety standards and the engineering standards on the railway were both below par. This is this man's report in 1970.

AN HON. MEMBER: Don't understand it.

MR. PHILLIPS: Well, I don't understand it either.

"'Management must, therefore, be given credit for its farsightedness in planning ahead of time to provide the heavier rail, creosoted ties, crushed rock ballast, curve alignment and upgraded bridges. These things cannot be accomplished overnight and therefore good judgment is in evidence on the part of those who have made the railway possible.'"

He goes on — and I'm not going to read all of the letters from Mr. Swanson, but I do want to read one other portion. It says, and now I'm quoting again Mr. Swanson in 1970:

"'It can be reported that the Pacific Great Eastern Railway is being properly maintained and properly operated, commensurate with serving the public in a safe…'" — and I want to emphasize, Mr. Speaker, the word "safe" — "'…in a safe and proper manner. It can also be reported that the extensions of the railway are being located and constructed in a proper and efficient manner.'"

Now this is a man who, two years later, wrote the Premier a report — and the report has never been tabled in this House or tabled with the Clerk. I tried to obtain a copy of it this morning. The Premier did read selected parts of this letter in Hansard on November 6, 1973, when the Premier and I had our argument about whether it should be mainline or whether it should be a resource railroad.

So here is an engineer, and Mr. Broadbent in concluding his letter says:

"On reading the Swanson reports in detail it will be noted that when criticisms were leveled, corrective actions were taken. In general, he finds the railway in excellent condition."

Mr. Broadbent concludes his letter by saying:

"In conclusion, I feel that Mr. Swanson, in submitting misleading statements to you, has violated his trust as a professional engineer."

This is….

HON. MR. BARRETT: Last night your leader was praising Mr. Swanson.

MR. PHILLIPS: This is the man whom the Premier of the province hangs his hat on.

But I want to tell you, Mr. Speaker, what has happened to the railway. We've talked about

[ Page 3388 ]

management of the railway, about the top management of the railway. It is a well-known fact that there has been tremendous political interference in the operation of the railway since the present Premier took over as president of the railway. The Premier says, "No, there hasn't been any political interference," and I'm not accusing the Premier of political interference, but I want to tell you, Mr. Speaker, let's run down the management of the railway. Where is Mr. Broadbent today, who was one of those men who served that railway faithfully and built it up to what it was in 1972? Where is Mr. Broadbent? He's gone.

Interjection.

MR. PHILLIPS: Where is Mr. Esterbrook, another of the men who helped to build and knit that railway together to one of the finest groups of men anywhere in Canada co-operating to make that railway a success? Where is Mr. Esterbrook? He's gone. Where is Mr. Miller — another one of the team that helped build this railway up? He's gone. Where's Mr. Wakeley? He's gone. Where's Mr. Trask? He's gone. I'm not accusing the Premier of political interference, but I wonder why five of the top management of the British Columbia Railway have quit.

Interjections.

MR. PHILLIPS: Released, quit, fired — I don't know. Where have they gone? And what about Mr. Richmond,, the industrial relations officer? No, he hasn't quit; he hasn't been fired; he's just had one of these sideways shuffles, so he's sitting in his office reading comic books.

MR. J.R. CHABOT (Columbia River): Like the Deputies.

MR. PHILLIPS: Where's Mr. Norm Bennett, the chief mechanical officer? Another one of those sideways shuffles that this government is so renowned for. They don't necessarily fire them; they just put them in a cupboard somewhere, let them draw their pay but don't let them have any say. Where is Vaughan Paul, the sales manager? What cupboard is he shuffled into?

Interjection.

MR. PHILLIPS: No, maybe there hasn't been any political interference with the management. But I have to ask you, Mr. Speaker, and I will let the people of the Province of British Columbia, who are so proud of this railway — who were so proud of this railway and the job it was doing and the economy that it was bringing to this province…. They are the ones who will make the final decision. They may not accuse the Premier of political interference in the management of the railway. Maybe we don't have to accuse the Premier; maybe he didn't do it. Maybe he had a Joe-boy do it. Maybe it was Mr. King, the Minister of Labour, who was the hatchet man. Or maybe, Mr. Speaker, it was Mr. Swanson. Maybe it was Mr. Swanson.

Since the top management team has gone, what has happened to the railway? Morale is at an all-time low, the lowest it has even been in the history of the railway. In the previous 20 years, Mr. Speaker, there were three strikes on the British Columbia Railway — three strikes in 20 years. In the first two years under the administration of this government, with their political interference, there were three devastating strikes on two years — due strictly to political interference. But I recall last year — or was it 1973 — the Premier praising the Minister of Labour as a director on the railway.

Interjections.

MR. PHILLIPS: He said: "Oh, this is the first time that there's ever been anybody on the railway that had any previous experience." What did the Premier do just recently, Mr. Speaker?

MR. CHABOT: He kicked him out.

MR. PHILLIPS: He kicked him out.

Interjections.

MR. PHILLIPS: We've had political interference in the railway from the Member Without from Fort George (Hon. Mr. Nunweiler). The operation of that railway in the Prince George area is now dropped to an almost completely inefficient operation because the Minister Without wants to be the big kingpin in the operation of the railway.

The railway had one of the largest losses last year that it has ever had, regardless of any differences of opinion in accounting procedures. Had the old accounting procedures under the previous government been still adhered to, the loss would have been greater last year than it is under the new accounting procedures and their talk about depreciation. The loss would have been greater.

Mr. Speaker, last year, when we look at the financial statement which was tabled in this Legislature, the financial statement that was compiled by Peat, Marwick, Mitchell and Co., what do we find as the main reason for the losses, Mr. Speaker? Not depreciation, no. Strikes on the federal railway. But the proof of the pudding is in the eating. I would like you to refer to the changes in the financial position of the railway during the year 1974. Accountants

[ Page 3389 ]

may have differences of opinion with regard to accounting practices and with regard to depreciation, but the real nuts and bolts of any business is the cash flow.

The cash flow of the British Columbia Railway last year decreased by $46,105,057. In the previous year, 1973, under the restated figures by Peat, Marwick, the cash flow increased — increased, Mr. Speaker — by $7,370,588. That, in my way of thinking, is the real nuts and bolts of any operation. If you watch your cash flow and it increases, you are usually making a profit; if it decreases, you know you are losing money.

So, Mr. Speaker, I just have to sum up by saying that the present administration realized that they could not come into this Legislature with a financial statement which would show losses on the British Columbia Railway of some $60 million — which it would have been under the present accounting system. What they had to do was try and conjure up and connive to try and justify the heavy losses on the railway last year.

They did it by trying to bring into this Legislature charges of deceiving the public, charges of fraud…. Well, the Member says "True." Evidently he hasn't done his homework.

This is the only way that the Premier of this province, who huffed and puffed and tried to blow up a storm, tried to find something, a paper coat hanger as it were, to hang his hat on to discredit the good management and the good operation of this railway in the previous 20 years.

AN HON. MEMBER: Hear, hear!

MR. PHILLIPS: Mr. Speaker, this railway and the extension will be a disaster unless that government, and particularly that Minister of Economic Development (Hon. Mr. Lauk), is able to persuade his cabinet colleagues to get on with developing the resources of this province, because this is a resource-oriented railway. If there are no resources to move, the railway will go broke and it will not be because of any malpractices or mis-administration by the previous government. It will be due to the devastating policies of that socialist government which has killed resource development in this province since they took power in 1972. That is the real problem of the railway.

To cover up the continuing losses which the railway is bound to have unless we develop the resources of this province — they will increase as the years go by under that administration — to cover up their own mismanagement because of the resource policies of the government and because of political interference into the management of the railway, that government has tried to conjure up from the bottom of the barrel a scandal when, as I have pointed out, it just doesn't fly.

Here are three complete and comprehensive reports given to the president of this railway on his request. He commissioned the reports: a report on engineering methods and a report on the management, all three of them not saying anything about the charges that this Minister of Finance is trying to bring up on the floor of this Legislature. Why did he have the reports commissioned, Mr. Speaker?

I have said that the top management of the railway is gone. What does the financial statement say, the financial statement of Peat, Marwick, Mitchell & Co. in their 1974 report?

"The past accounting policies of the company have been reviewed and, as a result of such review, management has concluded that the financial statements as of December 31, 1973, on an overall basis, did not represent cumulative operating results of the railway fairly to that date."

MR. W.R. BENNETT (Leader of the Opposition): "Fairly."

MR. PHILLIPS: But that was their report while they were government. While they were government, Mr. Speaker. But I want to say in summary that this railway is in trouble and it is in trouble because of that government. The Premier has based his whole engineering of the railway on a report from Mr. Swanson. The huge overruns that we are talking about in the contracts of the railway are because interference by the Premier and by Mr. Swanson in the grade of that railway….

You can't take a resource railway, which is built basically to haul resources, change the grades and change the standards to a mainline railway without having overruns. This is the basic reason for the large number of overruns on the contracts on the extension from Fort St. John to Dease Lake.

Mr. Speaker, this is the reason for the huge overruns — again, Political interference in the contracts. The contracts were let, basically, to build the railway as a resource railway. A railroad is built on the same basis as a road. When you build your first road, you do not build a four-lane highway. When you're building a resource road to haul out the forest products or to haul our agricultural products, you build a basic road which will allow traffic to move the product. That is the same basis on which the railroad was built. The speed of the train has no bearing, as long as the merchandise and natural resources move over it. Then as the traffic increases, you upgrade the line — you upgrade the rails, you upgrade the grades, you upgrade the bridges, you upgrade the culverts.

When we talk about safety because of the way the railroad was built previously, safety on that railroad

[ Page 3390 ]

was fine, according to Mr. Swanson. But all of a sudden, Mr. Swanson is working for the Premier. How can he change his attitude toward the safety standards on that railroad in such a short time? Yes, almost overnight.

Mr. Speaker, I must say again that had it not been for the courage, the determination, the far-sightedness of that team, that group who built that railway into what it is today, this province would have been in far worse shape economically than it is today. It was that railway that built up the economy of this province.

They say that there was no engineering done on the extension to Dease Lake. I say they haven't done their homework. That extension to Dease Lake was engineered in the early 1960s. The report is available. I have a map outlining the route, the same route.

MR. SPEAKER: Excuse me, I interrupt the Hon. Member to tell him his time is up.

MR. PHILLIPS: Well I just want to conclude by saying that the government of the day has tried to deceive the people of this province in trying to dredge up a scandal over the British Columbia Railway. Mr. Speaker, it's fallen flat on its face because the facts are in these three reports about the operation of the railway for the previous 20 years. I'm sorry that the Premier used this tactic. I'm sorry that the Members of the other opposition parties used some of the words that they used in this House yesterday afternoon. I can forgive the Premier, but I cannot forgive them for using such words as cheat, deliberately deceive, crooked, and fraud. Mr. Speaker, this is unforgivable.

HON. W.S. KING (Minister of Labour): Mr. Speaker, I feel that I would like to make a few observations in this debate because I did at one point occupy a seat on the board of the B.C. Railway as executive vice-president, also because I have more than a passing interest in railroads, having been an employee of CP Rail for some 28 years now.

I've listened with great interest to the comments, particularly from the Member for Cariboo (Mr. Fraser) and the Member for South Peace River (Mr. Phillips). Obviously, they must have ridden in the passenger coaches in their association with railroads, because they don't really seem to know too much about the operational aspect of railroads.

There are a number of things that I think are worthy of comment. When we took over as government of this province, we received quite a widespread submission from workers on the railroad indicating that they were concerned with the safety standards on the railway, from a variety of points of view. They were certainly concerned with the signal operation on the railway, the automatic signal control system. They were concerned with the standard of maintenance on the right-of-way, the adequate change of ties, the weight of the steel involved, and a whole variety of things. As a result of continuing representation from pretty well every division on that railway, certain investigations were undertaken. One investigation pertained to adequacy of the automatic signal system device, their CTC operating method of running trains.

At that time, as we consistently did with every other investigation, we sought the best advice and the most expert people in the field. We obtained the services of Mr. Ed Bradley, the chief rules instructor for CP Rail. I forget the other gentleman's name, but he occupied a similar position with CNR. They conducted an appraisal of the operational aspects on the railway. This pertained, not to the new extensions and so on, but to the operational part of the railway which was in service and had been for years.

We found that a great deal was left to be desired. Certain basic changes had to be made to bring that standard of operation up to par. We didn't condemn management, nor did we condemn the previous administration for this problem. It simply needed an upgrading, and we sought the most professional advice we could obtain in terms of finding that upgrading.

There were other problems identified. We received an overwhelming reaction all over the property lamenting the sorry state of industrial relations on that property. We received the report that it was impossible for the workers to progress grievances within a couple of years time, that grievances were outstanding, and consequently this led to hostility and dissension at the local level.

We received allegations that there was, in fact, a dynasty that had been set up, and a kind of family-tree relationship, by the previous administration that bore no resemblance to efficiency and capability, but rather to the political desirability of having your friends in key locations. Indeed, right today we have a special inquiry underway to try to come up with some resolution to the sorry legacy of poor industrial relations which was left by the former administration.

I find it really amusing that those Members on the other side dare to talk about the problems of industrial relations that have been encountered on the railway. My goodness, they have been going on for many, many years but unfortunately the workers didn't enjoy the rights under the previous administration that they do under the current one. Consequently, we have had the outbreak of certain problems.

But I don't think things are as bleak as the opposition would like to paint them. I have had no letters from individuals suggesting that there was politics involved in labour relations on the railway. I

[ Page 3391 ]

have had those accusations across the floor — again, without any attempt to substantiate or provide any evidence in support of the accusations. That is par for the course. But, Mr. Speaker, I have heard suggestions that the previous administration was more concerned with politics than with sound industrial relations, and coming from strange quarters. I have a letter dated May 30, 1972 — to the Minister of Labour, the Hon. Jim Chabot, Parliament Buildings:

"Dear Mr. Chabot:

"In respect to the present and prolific strike-lockout situation in this province, I make the following observations. If we are going to help secondary industry and small businessmen with low-interest money next year, then it is time to do something about the horrible waste and depressing effect that the strike and lockout are having on our economy this year.

"Labour unions and private industry must stop their war and be prevented from using the innocent civilian consumer as a hostage or prisoner in their war to hijack the rest of the economy with. They regularly sacrifice the taxpayer on their wage-rack. The government has to be involved. No matter how much political water they wash their hands in, it doesn't remove the do-nothing guilt. While taxpayers suffer and workers are idle, it is not enough, it is not good enough, to play dead, or" —

Listen to this, this is a beautiful line —

"pluck the strings of the fickle fiddle of politics" —

Pluck the strings of the fickle fiddle of politics. (Laughter.) —

"while tens of thousands of interrelating jobs depend on these major industries for their daily bread.

"The legislation is there to keep the economy moving, and while there are thousands of people out of work who have no jobs, we just can't justify forced joblessness. The legislation was made for emergency situations, and this is an emergency. The government is to lead, not to be pushed around by greedy union leaders or high-pressure business.

"I am asking for action, not reaction."

And guess who signed it?

AN HON. MEMBER: Who?

HON. MR. KING: You'll never guess. John D. Tisdale, MLA. John D. Tisdale, one of his own MLAs, says it is not good enough to pluck the fickle strings of politics. My goodness! (Laughter.) And they are the group that had the audacity today to stand up here and talk about labour problems that accrued this efficient, poor, little government as a result of the do-nothing attitude of that administration over there. Identified by their own Members. Shame on them!

Interjections.

HON. MR. KING: The fickle finger of politics. He wanted action, not reaction, but he was speaking to a deaf group over there, Mr. Speaker, when he asked for action, not reaction, because that's how they are identified — as reactionaries.

Now I want to make this point, and I'm not going to speak much longer on it, but the whole thrust of the opposition response has been to separate the issues from those identified by the Premier. The Premier identified deficiencies in accounting methods, supported, substantiated by professionals in their fields, and he identified problems and deficiencies in terms of proper engineering procedures for awarding contracts on the cost estimates that should be included in that problem. Every one of the official opposition speakers has sought to divorce those issues completely from the text of their submissions, and they have dealt with the railway from Fort Nelson south — the practical, everyday operation of the railway.

No one has attacked the management of the railway, We found deficiencies in some of the operational parts of it. We obtained experts to remedy those deficiencies and to give us an analysis, but when we found anomalies and dangerous-looking conditions in terms of accounting practices, proper finance control and proper engineering procedures in terms of awarding contracts, we also commissioned some experts to look into those areas. The hard facts of what they came down with are indeed a shocking exposé of inefficiency and political considerations overriding sound judgment by that group over there.

That's what it revealed. Now the poor, pathetic remnants of that once proud body sit there and try to ignore it, and to wash it, and to pluck the fickle strings of politics by simply ignoring it and trying to cloud the issued by involving the letters — confidential letters, incidentally — from Mr. Broadbent to the Premier.

I find it really humorous that yesterday the Leader of the Opposition (Mr. Bennett) spent an hour and a half in a feeble attempt to defend the shocking practices of his predecessor by relying heavily upon the advice of one Bob Swanson, and today we find the Member for South Peace River (Mr. Phillips) completely repudiating that gentleman.

Interjections.

HON. MR. KING: You know, that's consistency — completely repudiating the man and the evidence that

[ Page 3392 ]

his leader based his defence on. That's about how desperate they are, Mr. Speaker, to try to find some justification for what undoubtedly has been a very, very shabby performance and an extremely costly one for the people of British Columbia.

But you know, Mr. Speaker, despite the noise, despite the hysteria, the people will know what the truth is and they will judge him. I say heaven help you.

MR. L.A. WILLIAMS: I would like to address myself for just a few moments to the principle of this legislation which I gather is to increase the borrowing powers of British Columbia Railway by some $210 million.

MR. SPEAKER: Wouldn't that be out of order?

MR. L.A. WILLIAMS: May I have your permission to carry on my debate in accordance with the rules.

MR. SPEAKER: Well, if you promise not to spend too much time on the principle of the bill.

MR. L.A. WILLIAMS: Thank you, Mr. Speaker.

I don't wish to engage in the charges and counter-charges which seek to — no, I shouldn't say that — which have clouded the issue that we are debating in this bill. If there is some merit in that I haven't seen it yet, but perhaps it will become clear.

Before I begin, Mr. Speaker, I must raise one matter which I think is unfortunate in the course of the debate over the last couple of days. This afternoon the Hon. Member for South Peace River (Mr. Phillips) started to question the integrity of the auditors engaged by this government, and yesterday afternoon the Hon. Member for Cariboo (Mr. Fraser) addressed himself to this subject in a way which I think I must disassociate myself from. The Hon. Member for Cariboo said yesterday, and I am quoting from Hansard: "I would say that I think any one of us could hire another accounting firm and come up with the answers that we want, if we're giving those kinds of directions to them."

Last night the Hon. Leader of the Opposition (Mr. Bennett) saw fit to also direct his criticism to the members of this firm of accountants, whose reputation is international and who, in this particular case, were engaged by the Province of British Columbia to do a specific task which the people of British Columbia needed to have done.

The audit performed by Peat, Marwick, Mitchell and Co. on B.C. Rail was performed by chartered accountants resident in this province, some of them partners in that firm within British Columbia, having no association with any of the other offices operated by that international group. They conduct themselves with professional objectivity in accordance with the dictates of the Institute of Chartered Accountants of British Columbia. I think they have distinguished themselves in the job that they have done and are not entitled to have criticism cast upon them casually or otherwise on the floor of this House by Members who are able to speak from a position of privilege.

The question was raised about this firm's association with Penn Central in the States. I have taken the opportunity since last evening of inquiring into that particular matter. I find that subsequent to the bankruptcy of Penn Central the trustee in bankruptcy engaged the firm of Deloitte, Haskins and Sells, another accountancy firm of international repute, to conduct a re-audit of Penn Central's affairs, and that that firm of accountants recommended no change in the accounting procedures or results as provided to the company by Peat, Marwick and Mitchell.

The action which is going on with regard to Penn Central involving this firm and the directors of that company is a class action. As well, there are proceedings undertaken by the SAC organization in the United States of America which has also taken similar actions against 40 or 50 other international firms of accountants who operate in the United States. All the indications are that the SAC's attempt with respect to those actions is to bring accountants under the control of the SAC and of its regulatory provisions. The accountants, I think, are well justified in resisting any such move.

I think that the Members who spoke in a derogatory manner of Peat, Marwick and Mitchell, who have impugned the professional integrity and objectivity of members of that profession and that firm in British Columbia, should stand in their places and apologize to these people.

HON. D. BARRETT (Premier): They don't even stay in the House to listen to the debate.

MR. L.A. WILLIAMS: Mr. Speaker, the government — this government and the future government of this province — will require people of integrity and skill in order to assist them in the matters in which government finds itself involved, whether it be our Crown corporations or government itself. If this kind of character assassination is allowed to continue, the day will not be long coming when people of professional integrity and skill will wonder whether they should lend their services to this task. It will be a sorry day for this government, for the government of the Province of British Columbia and for its various Crown corporations, if it is not able to seek out people with the highest possible qualifications to do those jobs.

I would like the Hon. Premier to tell me when he closes this debate whether or not the Government of British Columbia was aware of the Penn Central

[ Page 3393 ]

situation when it engaged Peat, Marwick and Mitchell. I would like to know the extent of the inquiries that were made before that firm was engaged in this particular task. Because I know that the federal government investigated this firm and were aware of the Penn Central situation before Peat, Marwick and Mitchell were engaged as accountants for the Canadian National Railway. I would expect that the Government of British Columbia would have made a similar inquiry. So much for that.

I think that debate so far has served to divert the attention of Members of this House from what the real problem might be. It's true we've had changes in accounting procedures, questions raised with regard to profitability or otherwise of this Crown corporation over past years. But really, Mr. Speaker, so far as the people of the Province of British Columbia are concerned, the difference is not very great. If you will take the trouble to look at the balance sheet of B.C. Rail, as produced for the period ending December 31, 1974, the picture is still there to be seen. The obligations of the people of British Columbia with respect to this railway are exactly the same. The debt obligation is as great, and the burden that that railway carries is as great regardless of the change in the accounting techniques. Really, that's what matters to the people of British Columbia. It is the people's railroad; the people and that railroad are going to have to meet the obligations of that Crown corporation. That's what's important.

It is important also to concern oneself not with the very precise wording of the accounts in the notes to the financial statements, but as to the consequences of what they point out. For example, under the matter of parity development bonds, the auditors found that it was not possible to estimate the amount which might be presented for payment in 1975, and therefore no portion of that amount outstanding has been classified as current. But that railway owes $341.8 million in parity bonds.

Interjection.

MR. L.A. WILLIAMS: In long-term debt, of which the parities are $41.5 million.

But the other consequences of the long-term debt: $41.5 million are held by the Minister of Finance for Canada, and they contain a provision whereby, under certain circumstances, they may be presented for redemption on six months' notice. That's an obligation that the railway faces.

In the distance, after 1980, there's another $51 million of bonds which are subject to redemption at the option of either the holder or the railway. That means that after 1980 $51 million of that long-term debt is subject to call, and the government and the railway must be prepared to meet that contingency.

During the years ending December 31, 1979 — that is, in 1976, 1977, 1978 and 1979 — there's another $36.1 million of long-term debt retirement in sinking-fund revisions which must be met. Additionally, as of December 31, 1974, the railway has outstanding commitments for construction and equipment totalling $35 million, and estimated costs to complete the Dease Lake extension for $75 million, excluding interest. Another $110 million.

These are continuing and serious obligations which face this railway, its management, and the people of British Columbia, and that's the matter that we should be addressing ourselves to when considering this Bill 27.

How does this railway function for the Province of British Columbia without becoming a millstone around the neck of the people and of the government? How can we change the situation so that government is able to make this railway function for the people — and all the people, not just those who happen to live along the stretch of this line, or carry on business in that area, but all the people of British Columbia? Because those who are not directly served by that railway still should earn the obligations which are supported by the guarantee of the Province of British Columbia and not by the assets of this railway.

Those are the problems we should be addressing ourselves to in the course of this debate.

I think the government of the Province of British Columbia must address itself in a serious way, in a most aggressive way, to the adoption of policies which will enable this railway to function and produce the greatest possible return to the people of British Columbia. I think that one thing that has been made obvious by the debate of the last two days is that this railway must be allowed to function free of political interference from anybody. I think this railway should be run and operated as a railway and not as an instrument, a political device, to be used by the government of the day, whatever government that may be.

I think the time has come when the Premier of this province should resign as president of the B.C. Railway. I think the time has come when the Minister of Economic Development (Hon. Mr. Lauk) of this government should resign as executive vice-president, and I think that the senior officers of the railway should be selected from individuals with experience and skill to carry out the duties and responsibilities which those offices entail. I think the president of the railway should be a full-time, 24-hour-a-day, if necessary, president of the railway. I think that the executive vice-president should be the executive vice-president of the railway. He should be in daily attendance at the head office of the railway, and he should discharge the responsibilities of the executive vice-president. How else can management be expected to function if otherwise is the case?

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That's one step that can be taken: to remove the railway from politics; to put an end to the continuing political debate which has surrounded the railway since its very inception. It would be a step forward. The government, on behalf of the people of British Columbia, could then call upon the senior officers, the executive officers of that railway, to perform and to run the railway and to run it as best they possibly can. If they fail to perform to the satisfaction of government and the people, then they ought to be replaced.

Through this government the people of British Columbia, who are the shareholders in that railroad, are represented. Through this government the demands should be made upon the executive officers and directors of that railroad. They're answerable to government and, through government, to the people.

But to politicize that rail line is only to interfere with the realization of its true objective, which is to function as a railroad to return to the people of British Columbia as much of a profit as they can possibly return and to ensure that the services which are made available through the length and breadth of the line serve both the people who live and work along the rail line and the balance of the province as well.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, I'll be brief. I want to start out by endorsing wholeheartedly the remarks of the Hon. Member for West Vancouver–Howe Sound (Mr. L.A. Williams) with respect to giving British Columbia Railway independence from politics.

HON. MR. BARRETT: Hear, hear!

MR. GIBSON: I don't know if you'll say "Hear, hear!" when I elaborate, Mr. Premier, because what I mean is that politicians, active politicians, should not be officers of that company — on the board.

HON. MR. BARRETT: I've got a report to give you on that very subject.

MR. GIBSON: Mr. Speaker, we have had for the last generation the Premier of the province, past and present, as president of the B.C. Railway. Premiers are chosen for other virtues and qualities than their abilities to run railroads. I make no reflection on the present Premier or the premier before. I'm just suggesting that politicians are chosen for different reasons than are executives, whether they're running private or public corporations. I think the Hon. Member for West Vancouver–Howe Sound has put it very well. I won't go any further on that.

Mr. Speaker, I want to discuss more the future than the past. But I'll just comment very briefly on the questions that have been brought up in this debate and that are to be resolved. First of all, on the matter of the actual accounting facts as they apply to the railroad, it can be argued that it's a matter of opinion what depreciation schedule is appropriate, when interest should be expensed and when it should be capitalized, when maintenance should be expensed and when capitalized, and so on.

There is room for difference of opinion, but not as much difference of opinion as has been revealed in this House during the course of this debate. There can be no question, Mr. Speaker, when one touches the issue of comparability, that the BCR statistics have not been produced in a comparable way with other railroads in this country in the past. And that has turned up serious deficits. The dollar magnitude of those deficits may not be in the same league as other deficits of the current government. I refer to ICBC and the Department of Human Resources overrun and that kind of thing. But they're serious and consequential deficits. So that's the first issue.

The second is the issue of misleading or covering up the true state of facts in the British Columbia railroad by the former government. These very serious allegations have been made during this debate, Mr. Speaker, and I have not heard a satisfactory reply to those allegations at any time from the representatives of the former government. I would have thought that at some time some spokesman would have attacked the question of whether or not there was deliberate misleading and whether or not there was a cover-up, because, Mr. Speaker, make no mistake: a prima facie case in that direction has been made.

But that's the past, Mr. Speaker, and these questions will ultimately not be decided in this House; they'll be decided in the court of public opinion, What about the future?

Mr. Speaker, we have a picture here of a railway whose operating ratio, the relationship of expenses to revenues or revenues to expenses, has been deteriorating badly. It was during the Sixties, according to the comment of the Hon. Leader of the Opposition last night, running between 70 and 80 per cent. It was in 1973, according to the auditor's report tabled in this House, about 100 per cent. In 1974, Mr. Speaker, it was up to 129 or 130 per cent. In other words, operating expenses were $62.8 million and operating revenues were $48.982 million. That's a very serious state of affairs, Mr. Speaker, when you consider that it happened in a year which was considered to be — by the Premier in his budget address — a booming year in the British Columbia economy.

If the British Columbia Railway is going to lose that kind of money during a boom year like 1974, what's going to happen in 1975 when things aren't going quite as well? What are the loss forecasts for 1975? I'd like to know that, Mr. Speaker, when the

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Premier closes this debate, because I think these figures are available to him. In any company of this kind you forecast: you budget for the following year. Maybe we could just get some information now so that we won't be too shocked and surprised when the annual report for the BCR comes in next year.

Now what about continued capital expenditures? I agree with the Premier that given the $110 million or so in the Dease Lake extension at the moment and the $110 million or so yet to come of which $100 million will be recoverable from the federal government. We really have no option. It makes sense to continue to open up the country to provide employment in British Columbia which we need. But once that money is in there, just because half of it came from the federal government is no reason to let it lose money. The government policies in resource development in the mining field are going to have to significantly change, I want to quote from a document the Premier tabled in the House the other day, the Touche Ross report on the assessment of the Dease Lake extension. In their findings and recommendations, they state: "Shipments of mineral and forest products and the resulting inbound freight are the sole sources of revenue included in the forecast. Provincial policies will influence the timing of the various traffic-generating resource projects."

That is very true, Mr. Speaker. They have been influencing them. Just to indicate how important the mining component is in this, on page 4 of that assessment, the 25-year revenue forecast shows…. And I haven't done this figure exactly, but it looks to be about 40 per cent of the revenue and something like 50 per cent of the ton-miles to be provided over that 25-year period. If that is the case, what is that state of mining in that area? It is not good. It is not good because of the reason directly touched on in the Touche Ross report. Quoting from page 13: "Several provincial policy areas are critical to the determination of the timing, scale and nature of resource projects along the Dease Lake line." Then it lists resource management, resource taxation, corporate taxation and ownership.

I quote again from page 18 where it later notes in its forecast on the mining revenue: "Forecasts of activity in the mining industry have been based on the assumption that sufficient financial incentives will be available in the economy to encourage the same level of exploration expenditure as exists at the present time."

Well, Mr. Speaker, unfortunately that forecast isn't valid because provincial policies with respect to mining have changed sufficiently so that the two major traffic generators in that area served by the Dease Lake extension, namely the Stikine River copper property and the Silver Standard copper property, are both in a complete shutdown situation.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): It never got started.

MR. GIBSON: Mr. Speaker, I can't believe that the Minister of Mines and Petroleum Resources doesn't know the extensive exploration that was done in that area — very extensive exploration. And they shut the exploration operation right down. It is shut right down, Mr. Minister of Mines. There was a sad picture in the paper of the drilling equipment coming back home by barge. There is no activity going on there at all, or none that I know of. If the Minister of Mines knows of any, I would like him to stand up in this House and give us the good news. But the fact of the matter is that nobody is going ahead there.

Here is a quote from the other day as to the amount of tonnage that would have come out of those properties. It is from a consultant referring to the Silver Standard property. He says that it could produce 650 tons of concentrate daily. Referring to the Stikine copper property, he says that it could provide 1,000 tons of copper concentrate daily. Those are conservative estimates. Those would lead to something like 600,000 tons of concentrate a year. That would pay a lot of freight on that railway.

Interjections.

MR. GIBSON: The Minister of Mines says you can't sell what you are producing now. Mr. Minister of Mines, do you think that situation is going to continue over the next 10 years? Of course it is not. British Columbia can't stop developing her mineral properties just because there is a little market difficulty right now. If you knew anything about your industry, you wouldn't say that.

So, Mr. Speaker, there is the problem. Here is a government that is putting a lot of money on a $200 million-plus extension, and at the same time, is following policies in the mining sector of our economy which are going to cut off half of its freight if those policies aren't changed.

Interjections.

MR. GIBSON: The hon. leader of the Liberal Party (Mr. D.A. Anderson) reminds me here, and I should have thought of it myself. We are honoured to have in the House today members of the Yukon council. The Members of the Yukon council are grateful, and they have reason to be grateful, to the Minister of Mines and Petroleum Resources of British Columbia because he has done more to increase exploration in the Yukon Territory than any man in history.

MR. D.A. ANDERSON (Victoria): They came down to pay homage.

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MR. GIBSON: That's what has been happening.

MR. D.A. ANDERSON: Leo is their best man.

AN HON. MEMBER: Best man they've got.

MR. GIBSON: That's what has been happening.

AN HON. MEMBER: Want to bet?

MR. GIBSON: Sure. Yukon exploration is up; B.C. exploration is down. Isn't that right? You bet that's right. Isn't it right that for the first time, the claims staked in the Yukon Territory exceeded those in British Columbia in modern mining history?

MR. D.A. ANDERSON: Yukon members know that.

MR. GIBSON: Let's hear about this.

So, Mr. Speaker, that's been the result of the resource policies of this government.

MR. D.A. ANDERSON: Good old Leo — Yukon's best friend.

MR. GIBSON: The tonnage which should provide the economic foundation for that rail line is just not there. I would like to hear the Premier, when he is closing this debate….

HON. MR. NIMSICK: Who took it away?

MR. GIBSON: Your policies took it away, Mr. Minister. I told you that over and over again. Took away the prospect of it. So until those policies are changed, the fundamental economic justification for this extension will not be there. I hope the Premier will give us some indication of how his resource policies are going to change, at least in that part of the province, when he closes the debate on second reading.

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker, it is late on a sunny afternoon and I don't want to delay the House with a lengthy speech.

Interjections.

MR. McGEER: I've got some people with me, but I may not have many people with me by the time I am through. I say that because although it's late in the day and people are tired, there's little doubt that this particular debate is the most significant one of this legislative session, and possibly for many sessions to come. I say that not because of the presence of the people from the Yukon, though I think their presence this afternoon might be significant because the completion of north-south railway and road links are essential to the development of the Yukon Territories.

More than once in British Columbia's history an invitation has gone out to the Yukon Territories to join British Columbia. I think that invitation should be extended again today. Perhaps one day the Yukon will wish to see the extensive resources of that particular area linked up with those in British Columbia, because it is the north-south linkages which will be the critical thing for the Yukon rather than the east-west ties.

But what we're seeing today in this particular debate, the material that's been presented to the House having to do with this debate, is pigeons coming home to roost. Like some veteran Members of the House, I have sat here in previous years listening to claims made about the B.C. Railway and its predecessor, the PGE, that quite obviously were at variance with realism with regard to that railway.

HON. MR. BARRETT: Not pigeons, it's seagulls.

MR. McGEER: Well, I can tell you that there are still pigeons flying about today, and they're going to come home to roost at some future time.

Interjection.

MR. McGEER: This is the fourth so-called scandal that we've had on the PGE. It's happened every time there has been a change of government. On each occasion, it's happened for exactly the same reason, namely that the railway has been politicized and therefore has been vulnerable to changes in government. There's little doubt that this politicization has impaired the appropriate development of the railroad, and there's little doubt that this is continuing today to be a problem and that at some future time some future government will have to stand up and do the same things about the B.C. Railway that we're doing today.

On the first occasion, the Premier of the province who brought this railway into being, the Hon. Mr. McBride, gave glowing accounts of how it would be possible to link the north with the developed areas of the south. It simply was not possible to fulfil those dreams with the money that was available at that time. The government had to take it over; there was a scandal. This was repeated at the time of the Tolmie government. It was repeated again when Social Credit took over when there was a refinancing of the debt. Now we see the same thing happening when the NDP takes over.

Obviously the railroad has been an asset to the people of British Columbia, but it has cost them a tremendous amount to put this railroad in and the costs are going to be enormous in the future. The

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payoff is a long-term one. From a financial point of view, however you may wish to argue the keeping of the books, the railroad is in greater difficulty and jeopardy than it has been at any time since its inception. I say this, Mr. Chairman, because commitments were undertaken to extend the railroad to the north which effectively doubled the length of track.

This has happened at a time when record rate increases were given to the employees of the railroad, so that at the present time operating expenses are considerably above operating revenues, quite apart from any write-offs on capital — a very dangerous financial situation for any railroad to be in. If you take off all depreciation, the operating revenues of less than $49 million in 1974 are offset by $53.4 million in operating expenses. So regardless of how you want to treat the capital investment, or write it off, simply what you take in from day to day on a cash-flow basis is unable to meet the cost of running that railroad.

That, Mr. Speaker, is financial jeopardy, and what has to be undertaken by the government, however much they want to condemn the past bookkeeping of the former government…. Go ahead and condemn them all you like. They deserve to be condemned. If I were the Leader of the Opposition, I'd say: "Go at it and do your best. That's in the past."

But you must couple that — Mr. Speaker, I'm speaking to the Premier as president of the railway — with the kind of measures that will not leave this railway in deeper financial difficulty than it ever has been in the past. That's the current state today. Your own latest audited statement that you put before this House has said that. You must undertake the measures now that will put this railway on its feet. That requires a major revision in resource policies of the government, because the only way you can head off this financial disaster which is the B.C. Railway today is to begin getting some revenue-producing freight hauled over that Dease Lake extension.

I'm not going to go again into all the properties, minerals and forest products that are waiting along that line to go ahead as soon as appropriate resource development policies are introduced by this government. Other Members have attended to that. But it is very clear that these idle resources are capable of putting this railway on a financially sound basis, and unless those resources are developed, the railway is nothing but a complete disaster. That surely is obvious to anyone who reads the reports. It's obvious to anyone who can read a balance sheet, whether it's from the new auditors or the old auditors. It's obvious to anyone in private industry, and they have been just as outspoken as Members have been in this House. Mr. Premier, you have got to change your resource policies and you have got to change the policies that govern the operation of that railway. That's just common sense.

I want to come into something which I believe is an even more fundamental lesson from this sorry situation with regard to the B.C. Railway. That is the consequence of politicization of any Crown corporation, because there's little doubt that in the past interference was run by the politicians in preventing an adequate financial picture of the operations of the Crown corporation from reaching the public.

That situation has not changed. If I need to cite evidence — and I shouldn't have to and I don't want to take a great deal of time to do so — I can only refer you to the public accounts committee of this House, which, of all the bodies of this Legislature, has the responsibility for focusing the spotlight on the way Crown corporations operate. With respect to the B.C. Railway, they did appear before the public accounts committee, and the period under examination by that committee is the very period we're now discussing in the House in terms of a scandal.

Who were the people that were running interference at that public accounts committee meeting? They were none other than individuals on the government side who yesterday stood up and condemned the former government for preventing this information from appearing before the public. The Second Member for Vancouver–Little Mountain (Mr. Cummings) was one of those. When I asked if the B.C. Railway had a budget before that committee, he said: "Are you over here just for cheap politics?"

HON. G.V. LAUK (Minister of Economic Development): What was your answer?

Interjections.

MR. McGEER: "Have you got a question," said the Member.

Interjections.

MR. McGEER: Here was my answer on that occasion, since the Minister asked it.

Interjections.

MR. McGEER: "I hope that you'll rule that question out of order. I have asked the question and I had hoped to receive an answer. If Mr. Broadbent can't give that answer, I'll proceed to another question."

The question was this, Mr. Speaker: "Does the B.C. Railway have an annual budget?"

MR. SPEAKER: Order! I think that the Hon.

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Member….

MR. McGEER: And who else was running interference at that time?

MR. SPEAKER: Order! May I interrupt just to say that I think the Member knows that you don't deal with the evidence in a committee in the House, and it would be improper to do so? Anybody dispute that statement? Surely you know that. Surely I don't have to remind you.

MR. McGEER: Mr. Speaker, is it inappropriate to quote from Hansard?

MR. SPEAKER: It's inappropriate to discuss the evidence in a committee in the House. If the committee wishes to send the evidence to the House, it may do so in its report. But to do it as you are doing would be improper. I think the Member knows that.

MR. McGEER: The committee has reported. I'm talking about a meeting held March 21, 1973, and I've selected that committee because the evidence brought forward — which I'm quoting for him — is something that is on the floor being debated today.

MR. SPEAKER: The Hon. Member is mistaken, I think, if he suggests that the committee sent the evidence to the House on a report. Is the Hon. Member stating that as a fact?

MR. McGEER: No, the conclusions, Mr. Speaker.

MR. SPEAKER: I think the Hon. Member is mistaken. The rule is that you do not discuss evidence in a committee in the House.

Interjections.

MR. SPEAKER: It's in our standing orders, in standing order 1. We follow the British practice in that.

MR. McGEER: I don't want to take a great deal of time. I'd like to read to you, however, from May, 18th edition, page 422: "Unreported Evidence Taken From a Select Committee: It is out of order to refer in debate to evidence taken before a select committee until the report of the committee has been laid before the House."

That committee was laid before the House in 1973. I'm not going to pursue the matter further except to explain that this is part of the problem. The problem is political interference with the operation of Crown corporations.

SOME HON. MEMBERS: Oh, oh!

MR. McGEER: It always will be a temptation; it always has been a problem with the B.C. Railway; it is going to be a problem with all other Crown corporations in this province. The kinds of things that have happened here with the B.C. Railway are going to happen again, and again, and again, until appropriate methods of accounting for the finances of these Crown corporations are developed in the Province of British Columbia.

I remind the Members of this House once more that there is no auditor-general in this province; there is no proper way of bringing Crown corporations to account. There is a proliferation of those Crown corporations. The methods that apply to the B.C. Railway past and present apply to every single Crown corporation, of which there are more every year. It is a continuing and important problem; we're only seeing with this particular debate the tip of the iceberg. But it does represent the fourth scandal that has come before this House, all for the same reason and all involving one Crown corporation. I predict to you, Mr. Speaker, that it will not be the last scandal that comes before the House, simply because the methods have not changed. Until people begin to see the light that Crown corporations have to be depoliticized and they have to have financial accountability, we're going to have repetitions of this kind of thing.

I want to associate myself, Mr. Speaker, with the remarks made by the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) and the Member for North Vancouver–Capilano (Mr. Gibson). I do not believe we can make professional people hired to do a job for Crown corporations the scapegoats in political vendettas. This has been done with both the past and the present auditors. It has been done on previous occasions with this railroad. If we're going to have competent professional people serving the Crown corporations in the same way that they serve private corporations in this province, we simply must leave these people out of the political debates that take place. I hope that, too, can be established as a principle.

I hope that the Premier will take heed of some of the things that have been said during second reading of this bill. Specifically, I hope that he and his government will get out of the operation, get at arm's length from it and stay at arm's length. I hope as well that the cabinet is going to read the ominous figures that have been released by Peat, Marwick regarding the future of that railroad unless major changes are made in the resource policies. If the NDP government feels that it is impossible for them to change the resource policies over the whole of the province — I believe for the health of the province the highest priority should be given to making those changes —

[ Page 3399 ]

then at the very least the resource policies should be changed for that northern half of British Columbia which is served by this extension. Failure to make those changes, Mr. Speaker, I repeat again will bring disaster.

There are definitely some lessons in this particular bill. I intend to support it, Mr. Speaker, as I have supported previous infusions of money into the B.C. Railway. It's going to be 50 years from now one of the very important links in our communications system. It's important not only to ourselves, but to the people in the territories to the north and the Yukon. I only hope that we can bring more common sense to the operations of this Crown corporation in the future than we have in the past.

Mr. Gardom moves adjournment of the debate.

Motion approved.

Presenting reports.

Hon. Mr. Macdonald presented the report of Hugh L. Keenleyside on the firefighting services of British Columbia

RESORT MUNICIPALITY OF WHISTLER ACT

Hon. Mr. Lorimer presents a message from His Honour the Lieutenant-Governor: a bill intituled Resort Municipality of Whistler Act.

Bill 130 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. Mr. Barrett presents a message from His Honour the Lieutenant-Governor: a bill intituled Income Tax Amendment Act, 1975.

Bill 101 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. Mr. Hall moves adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.