CONTENTS

Speaker's ruling

Motion to adjourn the House on a matter of public importance.

Mr. Speaker — 3422

Routine proceedings

An Act to Amend the Municipal Act (Bill 139). Mr. Wallace.

Introduction and first reading — 3423

Oral questions

Date of closing of Haney Correctional Institute. Mr. McClelland — 3423

Vancouver Island Coach Lines in violation of Companies Act. Mr. D.A. Anderson — 3424

Fire prevention inspection and education programmes. Mr. Wallace — 3424

ICBC strike delaying school construction starts. Mr. Schroeder — 3424

Withdrawal of Bill 61, Emergency Programme Act. Mr. Morrison — 3424

Payment of taxes by ICBC. Mr. Gardom — 3425

Shortage of canning lids. Mrs. Jordan — 3425

Grant to Disability Rights Association. Mr. D.A. Anderson — 3426

Asbestos air pollution. Mr. Wallace — 3426

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

Mr. Gardom — 3426

Appendix — 3456

THURSDAY, JUNE 12, 1975

The House met at 2 p.m.

MR. R.E. SKELLY (Alberni): At 3 o'clock this afternoon we'll be visited by a group of students from Wickaninish Elementary School in Tofino on the west coast of Vancouver Island, and I hope the Members will welcome them warmly at that time.

MS. K. SANFORD (Comox): Mr. Speaker, seated in the gallery today is a young student who has come down from Comox Junior Secondary School as part of a careers day programme which has been instituted by the school. She's here today to find out what the job of an MLA is all about, so I hope the Members will work hard this afternoon and show themselves actively participating in the job of representing constituents. Thank you very much.

MR. F.X. RICHTER (Boundary-Similkameen): Mr. Speaker, I would ask the House to join with me today in welcoming a group of elementary students from Cawstin, B.C. along with their teachers, Mrs. Lind and Mrs. Dupuis. Now Cawstin, B.C. Is the original Hudson Bay post in the Similkameen Valley which was called Similkameen at the time, and that is where my father settled in 1864. This is a growing community and this is the first group of students we have had here in the House from that area. I ask the House to join with me in welcoming them at this time.

As the junior Member of the three Members who are still in the House that were here in 1953 — the Member for Kootenay (Hon. Mr. Nimsick), the Member for Cowichan-Malahat (Hon. Mr. Strachan) and myself — I want to extend to the Member for Cowichan-Malahat the warmest greetings on his 23rd anniversary in this House since his wife got him elected. (Laughter.)

HON. D. BARRETT (Premier): Mr. Speaker, it comes as a shock to me that it's the 23rd anniversary of the Member for Cowichan-Malahat. I can't believe that he's been here for 23 years. He's only 35 years old; that's what he told me.

Mr. Speaker, on behalf of our group, and perhaps others in the group wish to say something...I've worked with Bob Strachan since 1960, when I first met him. I liked Bob Strachan from the first time he made a public statement about me saying what a fine candidate I would be for the CCF — even before he'd met me. (Laughter.) Mr. Speaker, he hasn't been wrong since. I want to say that he was a great leader to work with, a great colleague in this House and also, in the same category as the things we said about Frank Richter, a friend of all the Members of this House regardless of party.

MR. D.A. ANDERSON (Victoria): Mr. Speaker, briefly I'd like to join with other Members in congratulating the Member for Cowichan-Malahat. In 1953 I started to come down to the gallery of the House, and I remember him well when he was a freshman here. I was even fresher and in the gallery, and I'm glad that I'm here with him now.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I would like to add my personal congratulations to the Member for Cowichan-Malahat. I first came to the House when he was the strong, aggressive Member who was the leader of the official opposition. Of course, I've been on both sides of the House and I well remember some of the contributions that he made to debate and the strong, forceful position he always took as leader. He happens to have had a big advantage in life in being born in the right place to start with. (Laughter.) I just say very sincerely that I think he's made a tremendous contribution to the political life in this province, and we appreciate it.

MR. SPEAKER: The hon. leader of the independent party. (Laughter).

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): I don't have any competition today, Mr. Speaker.

I would like to join with the other Members in congratulating the Member for Cowichan. We've had differences of opinion but I say, Mr. Speaker, that I don't think that anyone could come to this House and go wrong by emulating the style with which that Member has discharged his responsibilities here.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Speaker, I was here when the Member for Cowichan-Malahat arrived in the House. I had met him when I first came. He had run at that time as a federal candidate and he impressed me very much. With the little bit of education that I gave him and talk (laughter), I think I was one of the helping hands to get him elected. Bob has made a great contribution and I want to say that I've been with him since that time and I hope that he has plenty of time in the future.

HON. R.M. STRACHAN (Minister of Transport and Communications): Yes, it's been a great 23 years I can assure you, Mr. Speaker. I'll never forget the morning after the June 12th election in 1952. I was walking down the main street of Duncan and a woman stopped me and said: "What are you going to do about that road of mine." Right off the bat the problems started to come in.

MR. WALLACE: It's been that way ever since.

[ Page 3422 ]

HON. MR. STRACHAN: Well, it took me 18 years to get the Lake Cowichan Road fixed, and get the Duncan court house.

I've participated in some of the great debates of this House. I expect to participate in a few more. It has been a great experience. There were times when the former Premier and I stood toe to toe across the floor of the House and had some classic debates. I'm sorry there was no Hansard in those days; I'd like to go back and read some of the speeches that were made at the time.

But, Mr. Speaker, probably the thing I'm most proud of is that in 23 years in this House I have never once been thrown out. (Laughter.)

MR. SPEAKER: It can always be arranged. (Laughter.)

HON. MR. STRACHAN: Over the years there have been many things said and many friendships made. After the recent election I had the experience of getting phone calls from some of the former Ministers congratulating me and wishing me well in our new job as government. It has been a great life experience. I don't regret a minute of it. If I had to do it over again I would do exactly the same thing. I've never forgotten the job I was sent here to do; I've tried to do it to the best of my ability, as all of us do. Thank you very much.

MR. SPEAKER: I had promised the Hon. Leader of the Opposition (Mr. Bennett), in respect to his application this morning, to deal with the question after serious concerned study of it. I find the following.

With respect to the application by the Hon. Leader of the Opposition to move adjournment under standing order 35 for the purpose of discussing a definite matter of urgent public importance, I should first comment that the standing order requires that it must be asked after the ordinary daily routine of business (under standing order 25) has been concluded and before notices of motion or orders of the day are entered upon. That is set out in standing order 35. Morning meetings are ordered especially for estimates, and such an adjournment would not fit into the requirements of standing 35 that leave be asked after the ordinary daily routine set out in standing order 25.

It is desirable that according to accepted practice the Member asks the opinion of the Speaker before raising the matter in the House, as the Speaker should be apprised of the proposed proceedings. Further, pursuant to standing order 35(3), the Member seeking leave must, after stating but not debating the matter, hand the statement in writing to the Speaker. In the present case which I have been asked to consider these prerequisites were not followed. However, notwithstanding the incorrect procedure adopted by the Member the Chair felt that the merits of the application deserved an opinion.

May, 16th or 17th editions, deal with the urgency rule as we have it in our standing orders. They've changed the British rules since.

It was employed between questions and commencement of public business: see May, 16th edition, page 366 and following. At page 369 in that edition it says:

"In accepting or rejecting such a motion, the Speaker is, as in the case of a motion alleging a breach of privilege, doing no more than deciding whether there is, in his view, a prima facie case of urgency."

Here the matter raised referred to a prospectus filed on behalf of B.C. Hydro before the Securities Exchange Commission in the United States, and to the June 3 report of Peat, Marwick, Mitchell relating to the B.C. Railway, which report casts reflection on previous audited reports of the railway used in the prospectus dated last May 22.

The matter must, according to our practice, be definite, urgent and of public importance.

"Urgent means of recent occurrence, raised without delay and requiring urgency of debate" — May, 16th edition, page 370 — "and if the facts alleged have only been recently revealed, that does not make the occurrence recent" — see at page 37. "If it is not raised at the earliest opportunity, it fails in urgency" — see page 370.

"The motion has been refused when an ordinary parliamentary opportunity will occur shortly or in time, such as in debate in a bill, in a supplementary estimate or in public accounts" — see page 371. "Such a motion is denied when a matter also anticipates a matter already on the order paper" — in this case Bill 27 — "in which both second reading and committee stages may normally be contemplated."

We are presently engaged in second reading debate on this bill, and the motion deals with financial matters presently in debate.

"Further, the matter must not be offered when the facts are in dispute or before they are available" — May, 16th edition, page 370.

The facts surrounding the true financial standing of the B.C. Railway have been the subject of debate in the House in recent days, and are obviously in dispute at the present time. On those grounds I cannot but decide that, in my opinion, we should not proceed in this matter, but go in the normal manner as shown on the order paper.

MR. W.R. BENNETT (Leader of the Opposition): In response, Mr. Speaker, one of the difficulties is

[ Page 3423 ]

that without an order of business between the Whips we had no idea what the order of business would be this afternoon.

MR. SPEAKER: I believe that was mentioned last night.

MR. BENNETT: We were not aware. I felt that the debate that needed to take place, Mr. Speaker, couldn't take place in normal second reading because it would restrict some Members who had already taken their place in that debate. I felt, since this matter was of such urgency and importance, as it reflected upon the Province of British Columbia, our credit rating and our intentions, that I felt it should be a full debate. I only say this in response to your ruling.

MR. SPEAKER: Well, I'm willing to predict that the opportunity will evolve for many of the Members to debate this issue in second reading. If the bill progresses to another stage, which I can't predict, if it does go to committee stage, no doubt you will have ample opportunity for the Hon. Leader to debate and everyone else who may have spoken to date. But I can't predict that. All I can say is that I must follow the rules, and I think that I have stated it as fairly as I can.

MR. D.E. SMITH (North Peace River): I don't want to prolong the discussion, but I would hope that the debate in second reading would be given some latitude in view of the remarks and the comments raised by the Hon. Leader of the Opposition (Mr. Bennett).

MR. SPEAKER: No doubt the same rule would apply as occurred earlier when all these financial reports were discussed.

MR. BENNETT: On a further point, then, I ask unanimous consent of the House to move a motion under standing order 49, the motion to read:

"That this House urge that a judicial inquiry be established forthwith to determine the circumstances surrounding the filing in New York on May 22, 1975, a prospectus with the United States Securities Exchange Commission purporting to be a true and accurate statement of the financial position of the British Columbia Railway, and the subsequent filing in this Legislature of a financial statement dated December 31, 1974, purporting to be a true and accurate statement with respect to the financial position of the British Columbia Railway, and to report to this Legislature a judgment with respect to the reasons for the discrepancy between the two documents."

Leave not granted.

MR. BENNETT: Did the Premier say no?

MR. SPEAKER: A number of people did.

Introduction of bills.

AN ACT TO AMEND THE MUNICIPAL ACT

On a motion by Mr. Wallace, Bill 139, An Act To Amend The Municipal Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral questions.

DATE OF CLOSING OF HANEY
CORRECTIONAL INSTITUTE

MR. R.H. McCLELLAND (Langley): I'd like to ask a question of the Attorney-General. With regard to the closure of Haney Correctional Institute, the Attorney-General announced some time ago, through his Deputy, Mr. Epp, that the institute would be closed at the end of July, I believe. Is that timetable being kept? In fact, will the institute be closed at that time?

HON. A.B. MACDONALD (Attorney-General): Mr. Speaker, as a correctional facility, I expect it would be closed about July 1, not the end of July.

MR. McCLELLAND: Mr. Speaker, on a supplementary, could I ask the Minister what guarantees are being given to the 200-or-more staff at the institute that their jobs will be secured, that they will be placed in other institutions or, at least, within the correctional institute?

HON. MR. MACDONALD: All of the jobs will be protected in the public service — mostly in the correctional area, possibly some in other departments.

MR. McCLELLAND: Supplementary. Those people who are employed, and have been employed less than two years, will they also be guaranteed employment within the public service somewhere? Will they be given any choices, or will they be told in which area of the public service they must go?

HON. MR. MACDONALD: Mr. Speaker, I don't want to be incorrect about job security under the collective agreement between the government and its public employees, but I would think somebody who had been there for up to two years would have that

[ Page 3424 ]

job protection. But whatever protection was available to them before, in terms of job security, is available to them now.

VANCOUVER ISLAND COACH LINES
IN VIOLATION OF COMPANIES ACT

MR. D.A. ANDERSON: To the Attorney-General: could he inform the House whether or not he intends to take action against Vancouver Island Coach Lines Ltd. for possible violations of sections 355 and 356 of the Companies Act, inasmuch as this Crown-owned corporation has not, since the takeover in July, 1973, put forward an annual report with the registrar of companies?

HON. MR. MACDONALD: Mr. Speaker, I will have to take that as notice. I will check into the matter.

MR. D.A. ANDERSON: A further supplementary. Could I ask whether or not the Attorney-General, when he looks into this matter, will check with his colleague and director of the company, the Minister of Municipal Affairs, who is resting his eyes, I believe, at the moment...

HON. J.G. LORIMER (Minister of Municipal Affairs): Yes, you're one year out.

MR. D.A. ANDERSON: ...and ask him whether or not the government intends to appoint more directors so the bylaws of the company are fulfilled?

HON. MR. MACDONALD: I will take the Minister under advisement. (Laughter.)

FIRE PREVENTION INSPECTION
AND EDUCATION PROGRAMMES

MR. WALLACE: Mr. Speaker, I would like to ask the Attorney-General: in the light of the report on B.C.'s shameful fire protection and prevention record, and in light of the urgent need for public education, particularly in regard to the number of residential fires started by cigarette butts, and since we have just had a fire in a senior citizens' residence with the loss of one life in this community the other day, has the Minister taken any immediate steps to improve the frequency of inspections or promote educational programmes relating to fire prevention, particularly in senior citizens' homes?

HON. MR. MACDONALD: Mr. Speaker, obviously that part of the report, and all of the report, is a matter of concern, but to say that we had taken immediate action since the report was received and tabled would be incorrect. We are now studying these recommendations which arise after a period of years and decades of neglect of fire services in the Province of British Columbia. We will be moving, as the government approves the recommendations, in a phased manner to implement those recommendations.

MR. WALLACE: Supplementary, Mr. Speaker. The fact is that we are having ...

HON. MR. MACDONALD: I know.

MR. WALLACE: ...very frequent fires, and people dying. I am wondering if the Minister has given any consideration to providing incentives to encourage landlords in apartment buildings to give rental discounts to non-smokers because of the decreased risk of fire.

Interjections.

MR. WALLACE: Well, has this been given any consideration before?

HON. MR. MACDONALD: No, that one has not. That is not in the report, but I am glad to have that and any other suggestions.

ICBC STRIKE DELAYING
SCHOOL CONSTRUCTION STARTS

MR. H.W. SCHROEDER (Chilliwack): The question is to the Minister of Education. In view of the fact that ICBC approval is required for the design of school buildings, with reference to fire protection, is the present strike effecting these approvals and delaying construction starts?

HON. E.E. DAILLY (Minister of Education): I have had no word at this time that it has specifically, but I can take it as notice if you wish further information.

WITHDRAWAL OF BILL 61,
EMERGENCY PROGRAMME ACT

MR. N.R. MORRISON (Victoria): My question is addressed to the Provincial Secretary. Can the Provincial Secretary confirm to this House that the Government will withdraw Bill 61, intituled The Emergency Programme Act, which was read a first time on May 8?

HON. E. HALL (Provincial Secretary): I think that I can say to the House that we are considering withdrawing the bill.

MR. McCLELLAND: A supplementary. Does the Minister confirm that certain instructions have been

[ Page 3425 ]

sent out to people who were involved in the provincial emergency programme of his department regarding what constitutes an emergency, or any other instructions regarding new application of their duties with regard to either this bill or some other regulation?

HON. MR. HALL: That is the whole point of the exercise we have just gone through; there wasn't any need to change the instructions.

MR. McCLELLAND: But have instructions been sent out to the provincial emergency programme's people? That is the question I asked.

HON. MR. HALL: I'll look into the matter but, as I say, the whole point of the exercise is that Bill 61 sought to rewrite the old bill, and it has received some hysterical criticism.

PAYMENT OF TAXES BY ICBC

MR. G.B. GARDOM (Vancouver–Point Grey): A question to the Minister of Transport and Communications, Mr. Speaker. Is ICBC paying premium tax called for under the Insurance Premiums Tax Act and under the Fire Marshal Act that all other insurers in the province have to pay?

HON. MR. STRACHAN: I'm quite sure that an item in the annual report, which I tabled some time ago, indicates that we are.

MR. GARDOM: Does the Hon. Minister know the amount that's being paid?

HON. MR. STRACHAN: It's in the annual report.

MR. SPEAKER: If it's in the annual report, it shouldn't be subject to question.

SHORTAGE OF CANNING LIDS

MRS. P.J. JORDAN (North Okanagan): My question is to the Hon. Minister of Consumer Services. Is the Minister aware that Consumer Services' activities so far to provide a supply of canning lids, particularly screw tops and the lids themselves, is, if you'll pardon the expression, almost a complete bust? Nowhere in the Province of British Columbia today are there screw tops and canning lids and we are now well into the canning period in many parts of the province. People are wanting to can asparagus, rhubarb and this sort of thing. Is the Minister aware of this and what is she doing?

HON. P.F. YOUNG (Minister of Consumer Services): Mr. Speaker, I am very much aware of it. I have had three studies made of the problem. We have contacted suppliers all over the continent. Bernardin, the company in Ontario, was able to put on a double shift in November, principally to supply the British Columbia market. The latest analysis indicates that suppliers are getting about 200 to 300 per cent of what they received last year. They are attempting to distribute them evenly throughout the province.

There's a great indication that there's a great deal of hoarding going on. To give you an example, 288,000 lids were sent to the City of Trail, which has a population of 12,000 people. They were sold out in one day. Now that means 24 lids for every man, woman and child in Trail and that's pretty far out. There has been some talk to complainants, and we have discovered that the people in fact have enough lids for this year and were attempting to stock up for next year. If people would simply cool it a little bit (laughter) there would be sufficient lids to go around. There are in Victoria stores at this moment ample stocks of lids, and there are in other stores throughout the province, but it's a case of people hoarding them when they see them, and this is a situation that will not be totally corrected until about next year, because there's a two-year lead time in gearing up for the volume.

Interjections.

MR. SPEAKER: Order, please! The question is important to half the population, at least.

MRS. JORDAN: Well, I suggest the other half eats, Mr. Speaker, and that really is the point of my supplementary question. The Minister has made the very serious charge against citizens in this province that they're hoarding. I would suggest that from her statements she's basing this accusation on last year's canning figures. This isn't substantial enough to accuse people of hoarding. Is she not aware that the cost of living has increased fantastically and that such groups as B.C. Tree Fruits have put on a concentrated programme to encourage people to can? I would ask the Minister, if she is so sure there is hoarding: is she contemplating bringing in rationing? Also, in talking to the suppliers, has she talked directly to the factories? Have you phoned yourself to the Kerr Co. to see if we can meet the needs of the people of British Columbia?

HON. MS. YOUNG: Mr. Speaker, we have been in direct contact with about five firms that make canning supplies. For instance, the Kerr Co. last year serviced only its own area — Oklahoma, Missouri, Arkansas and that area. Washington, Oregon, British Columbia, northern California and Utah did not receive any lids. I'm perfectly aware, for instance, that seed sales were up 40 per cent this spring, and

[ Page 3426 ]

that definitely more people are canning because of the economic situation. I am also told, and if you contact any of the canning companies they will tell you, that it takes them two years to gear up for the tremendous expansion that has gone on the past year.

We have done everything. We have contacted suppliers and the supermarket chains. The people at Woodward's particularly have been most cooperative and most helpful, as have the canning lid companies.

GRANT TO
DISABILITY RIGHTS ASSOCIATION

MR. D.A. ANDERSON: Mr. Speaker, may I ask the Minister of Human Resources whether he has received the request of the B.C. Disability Rights Association asking him to review his decision on a grant for the coming year and, if so, whether he's made any decision on it?

HON. N. LEVI (Minister of Human Resources): Yes, Mr. Speaker, we did. I met with them as well as the Minister of Labour (Hon. Mr. King), and we've told them that we will make a decision about it in the near future. We're also asking for further information based on some documents that they left with us.

MR. D.A. ANDERSON: Could I ask the Minister, in light of the success of this organization in acting as an ombudsman for those who have trouble with the WCB, and the fact that in one recent case they were successful in the case of a man who was injured some 30 or 40 years ago, if he will please make a decision on this just as soon as possible so the continuing work of this organization can go on?

HON. MR. LEVI: We have not discontinued grants. We're paying them at the same rate that we paid them during the last fiscal year. The other thing is that I would remind the Member that they come at us with a fairly substantial budget, well beyond what we were doing last year. I've discussed the matter with my colleague, the Minister of Labour; I've specifically asked if there was overlap in terms of the function of the Workers' Compensation Board. They left a great deal of material with us, and he is following it through his department, and then we will make a decision about it.

In respect to the case you referred to, it's my understanding that this long-standing case was, in any case, under review by the Workers' Compensation Board at that time anyway.

ASBESTOS AIR POLLUTION

MR. G.S. WALLACE (Oak Bay): To the Minister of Mines. Because of the continuing revelations about asbestos levels and the increasing incidence of cancer caused by asbestos fibres even in the new mines, according to the latest evidence from Quebec, I wonder, with regard to the Cassiar Asbestos Corp. mine, when the most recent reassessment was carried out in regard to asbestos fibres in the air, and how much improvement has been achieved since the Minister last reported to this House about the serious menace in that mine.

HON. MR. NIMSICK: Just talking to our dustman a week ago, at one of the mine-rescue competitions, he tells me that he's checking continually, monthly, in regard to....

MR. WALLACE: Yes, but how much improvement has there been? It was dangerous a month ago.

HON. MR. NIMSICK: I can't give you exact figures right now, but he said that he's keeping right on top of the subject to see that they put the new filters in to correct the situation. A couple of years ago there was the same situation. I don't know whether they've got a different type of mine here to what they have down east, but at that time the Health department checked the employees and they didn't find any problems with asbestos fibres. I will check it with him again and I'll give you a full report as to how much improvement is done.

Orders of the day.

HON. E.E. DAILLY (Minister of Education): Mr. Speaker, I ask leave of the House to proceed to public bills and orders.

Leave granted.

HON. MRS. DAILLY: Adjourned debate on second reading of Bill 27.

BRITISH COLUMBIA RAILWAY COMPANY
(continued)

MR. G.B. GARDOM (Vancouver–Point Grey): As early as this morning the Premier was loudly proclaiming that Members of the House were not addressing themselves to the principles and concepts of proposed legislation, and in taking a look at this bill it would seem to me we would have to concern ourselves with the reasons for the B.C. Railway accountability and also the need for this specific borrowing that has been requested. I do think the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) most ably stated the case and I would very much like to associate my comments with the ones that he earlier made.

The Premier also took the position that Members were concerning themselves with a range of postures — sort of in fear and hysteria, hate and vendettas, political politics and all of those sort of things — but I do note that in setting the scene Friday last, the Hon. Premier, podium and all, utilized pretty well all of the procedures he so roundly rejects in the airways. A lot of the talks, unfortunately, since then have followed the same line: establish a premise without opportunity for full and free independent inquiry, tack a label onto it, and plead perpetual and continuing guilt for all associated — past, present and future. Now that may well be politics, but it's certainly not politics of the best sort, and such procedures are not effectively curing untoward situations or preventing them from reoccurring in this province, In Hansard of November 22, 1974, there was an exchange between myself and the Minister Without Portfolio (Hon. Mr. Nunweiler), and I asked him a question in his capacity as director of B.C. Railway, and drew to his attention that one contractor had left the Dease Lake job alleging fraud and conspiracy on the part of the railway, that the estimated contract was $5.2 million and was now reaching $11.3 million, with another estimated $8.5 million to finish — in other words, an increase from $5 million to $20 million. I asked the Minister if he was prepared to inform the House if any other contractors were leaving the job, requesting revision of their contracts, or bringing similar actions against the railway. That response has never yet come to the floor in an effective manner. The Minister replied with words to the effect that he'd like to point out that management was very carefully reviewing the situation, litigation was going on, and he was not in the position to make any further comments in that regard at that time.

Well, that was back in November of last year. I asked the Minister a supplemental question: in view of the fact that the Minty report was scathing of the accounting procedures and audit procedures, and in view of the fact that the auditors and the comptrollers pulled out, and in view of the fact of those lawsuits, was the Minister prepared to order a judicial inquiry into the accounting, estimating and bidding procedures of that railway? That was in November of last year.

The Minister replied that the matter was being considered, that he was concerned about the comments made in the Minty report, which was published, as he said, some time ago, and concerned about its comments dealing with the practices of the B.C. Railway. He said that the matter was being reviewed. I say this to you, Mr. Speaker: what could have been better at that time than an independent judicial inquiry to get to the bottom of something like this and come up with concrete suggestions and recommendations for improvement? It could have been quick; it could have been precise and it could have been completely out of the political arena. For that is exactly what this province is lacking: checks and balances that are independent of the political arm, and independent of the civil service. We need to have some free, uncluttered mechanism that can inquire, investigate and report — a service that can tell the public, independent of the politician and independent of the civil service, if they are receiving value, and if not, why not.

In his remarks, the Premier re-revealed and rearticulated unorthodox accounting procedures, pretty well all of which were laid down in the Minty report which was filed in this House months and months and months ago. But there seems to be some other side to the coin — a different attitude to depreciation and so forth and so on. I would certainly like to hear the expression and comments of the government on that point.

The Premier drew to the attention of the House the engineering procedures which the railway now appears to consider to be inadequate. But didn't they have engineers then, Mr. Speaker? Didn't they have engineers at that time? How come this reversal of opinion on the part of the railroad as to its engineering techniques?

The Premier mentioned only one side of a lawsuit, and oddly enough paid great respect to the one that was opposite to the official position that is taken by his government in its pleaded defence.

Most of all that is sad, Mr. Speaker, is that the processes so righteously complained of by the Premier don't appear to be cleared up by this government. Indeed, one can well question if they're not being multiplied and perpetuated because accountability in this province has been and still is woeful.

Way back in 1871, when British Columbia first entered Confederation, the total revenues amounted to $292,823. Parliamentarians then had an opportunity to scrutinize each expenditure and determine that government and its bureaucracy was utilizing public money efficiently. Now, 104 years later, this Premier is spending $3.2 billion, but the point is this: essentially the machinery for scrutinizing these massive expenditures has not changed over that period of time. The legislative power of check and balance, of being able to scrutinize and able to consider cost projections, income projections and so forth and so on, is slipping absolutely backwards, This Legislature is losing its ability to watchdog the public money, Witness the debate in public estimates this year which was curtailed. Witness also, Mr. Speaker, that millions have been issued in this province by executive authority, by cabinet warrant, and beyond

[ Page 3428 ]

legislative scrutiny — no means of approval or disapproval of the project or the programme until long after the money is spent. We also find millions of dollars have even been borrowed without revealing to the general public the name of the lender. Millions are being delegated holus-bolus unto Ministers and Crown corporations for expenditure, again without the power of legislative inspection. This is ultra-delegation without even the sources, in the main, coming within the ground rules for normal and accepted methods of account and report.

To wit: some 25 corporations, boards, programmes and plans not within the Public Bodies Financial Information Act. Just take a look at some of them: Farm Income Assurance Act, Department of Housing Act, Development Corp. of British Columbia, Energy Act, Ocean Falls, British Columbia Cellulose, Medical Centre, Plateau Mills, Pacific Poultry, Panco Poultry. Are we going to have accountability or are we not going to have accountability in the province? Unfortunately, the continuing answer seems to be in the negative.

The public accounts committee, best described, I think, as a smokescreen committee — for all practical purpose, it's without support services, it's without staff. It should be sitting not just periodically, but throughout the year, and there certainly shouldn't be restrictions on time for questioning.

MR. P.C. ROLSTON (Dewdney): The chairman never called any meetings.

MR. GARDOM: Well, I hope the Hon. Member has the view that if the chairman of the public accounts committee would see fit to call meetings and sit constantly throughout the year, he would support that premise — which he would not, as we well know.

No information can be brought in front of the public accounts committee concerning lead planning, cost expense and income projections. As I've said, Mr. Speaker, this committee should be sitting year-round, particularly in view of this government's ultra-expansion into the private sector. At the present time the public accounts committee is nothing more than window dressing. I'd say a bad window and a pretty bad kind of dressing at that.

Mr. Speaker, what I've advocated in this House year after year after year is to have a mechanism where public finance and public expenditure can be independently watch dogged as I have said, to ensure that the public can receive value for their tax dollars, somebody who has the responsibility totally unfettered by governmental pressure or political pressure or bureaucratic pressure to independently inquire, search, assess and publicly report. Why? — says the Premier. We've got a Deputy Minister of Finance. And he always purrs that we've got a comptroller-general. But, Mr. Speaker, those positions lack the degree of independence that is properly required, and they lack the responsibility to investigate and inquire into that which requires investigation.

The very proof of that position is this. I note that Mr. G.S. Bryson is listed under the names of the board of directors as secretary of the company. I have no quarrel with Mr. Bryson, but having the Deputy Minister of Finance as the secretary of B.C. Rail did not seem to prevent the allegedly fallacious accounting practices that were followed by that company. Having Mr. Minty as the comptroller-general of this province — and I have no quarrel either with Mr. Minty — didn't seem to prevent the allegedly fallacious accounting procedures from being followed in B.C. Rail.

I certainly do have a quarrel with the Minister of Finance of this province when he points out these kinds of rosy pictures, and postures that these kinds of services and these kinds of mechanisms we now have are not only adequate but superior and doing a fine job. Mr. Speaker, they are just not doing that. Make no mistake of that fact.

How come, indeed, this prospectus, about which there has been some discussion today? I have a copy and I would assume it is the correct date. It says April, 1975, on the back and March 13, 1975, on the front.

MR. SPEAKER: Excuse me, what was the date?

MR. GARDOM: I beg your pardon?

MR. SPEAKER: What was the date, please?

MR. GARDOM: On the cover it is April, 1975, and on the front, March 13, 1975 — Prospectus, $125 million, British Columbia Hydro and Power Authority, dealing with series DY, due year 2005 bonds.

MR. SPEAKER: Thank you. I must have made an error on the date I showed in my reasons. I just wanted to correct that, I'm not sure.

MR. GARDOM: It is certified by Mr. Minty on March 10. What date did you use?

MR. SPEAKER: I used May 22 for my own information.

MR. GARDOM: This is the copy I have that is dated this way. We'll check notes a little later on, Mr. Speaker.

MR. SPEAKER: Thank you, I'm sorry to interrupt the Hon. Member.

[ Page 3429 ]

MR. GARDOM: I know you always like to be absolutely and totally correct.

Mr. Speaker, how come this prospectus appears to reflect inaccurate data without explanatory notes? The report of the comptroller-general to this House dealing with the British Columbia Railway was April 5, 1973, according to this letter — two years ago. It clearly recorded criticisms of accounting procedures and of internal and external audit procedures and of budgetary procedures of B.C. Railway. Two years have passed, Mr. Speaker — April, 1973, to March, 1975.

Surely in April, 1973, it was apparent that there were problems in internal audit, external audit and budgetary procedures. This is referred to in the lengthy report of Mr. Minty. So the government was alerted. It had other auditors go in. They have done a job and this government surely has had more than enough time to furnish correct information in a prospectus that is required to be filed under the United States Security Exchange Commission and is required to be correct.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): There is no change in auditors until December, 1974.

MR. GARDOM: My friend from West Vancouver–Howe Sound mentions there is not any change in auditors until December, 1974. But I would like to say this: I am referring to page 43 of the certificate of the comptroller-general, and it says in this prospectus that is supposed to be correct — it says this in this prospectus which is under the hand of this government, it having had knowledge of the Minty report two years back:

"These financial statements present fairly the financial position of the Province of British Columbia as of March 31, 1974, and the results of its operations for the five years then ended, and the statement of direct debt and guaranteed debt presents fairly the indebtedness of the Province of British Columbia as of March 31, 1974, and December 31, 1974, all in conformity with generally accepted accounting principles applied on a consistent basis."

How come? How come? Is that a correct statement? Did this government not acquire knowledge two years ago of difficulties? Was there not a responsibility, an onus upon this government to furnish explanatory notes to this prospectus?

Now remember well, Mr. Speaker, the NDP when they were in opposition — no major arguments or quarrels by them at any time about the structures that we have for effective accountability in this province. They never seem to have any problems in voting enormous sums to B.C. Rail, B.C. Hydro, B.C. Ferries or what-have-you, and always without receiving cost estimates, without receiving cost projections, without receiving income estimates, without receiving income projections. They didn't have any problems with that at all. No way. They backed all of that blindly, without question or without effective debate — a sort of a blank cheque to motherhood. And they still seem to do that.

Yet with the programmes that they have control of and have brought into this province, we find transit losing $2,000 an hour, ICBC losing $10,000 an hour, Ferries losing $4,000 an hour, B.C. Rail losing $1,000 an hour — a total of $17,000 an hour, and that's probably a very conservative estimate.

They must have regular, ongoing cost projections; they must have regular, ongoing expense projections, they must have regular, ongoing income projections in all of the Crown corporations and in all of these programmes, which should properly be listed under the Public Bodies Financial Information Act, which they are not. These things are never publicly revealed. So who gets it in the neck? The taxpayer. Old expendable.

Civil servants carry on and politicians carry on with their condemnations of the past and their condemnations of the present. But I would say that really heavier, Mr. Speaker, is the responsibility of the present than the past, and heavier still is the responsibility of the present for the future.

We've got to have a complete, new attitude to accountability in this province. It cannot be used as a political mechanism. It's got to be considered that which it is — the public requirements. Let's see that we establish fair checks and fair balances. Make it a duty and a responsibility of office that government and Ministers will furnish cost and expense projections of government programmes to the Legislature and to the people. Let the government provide mechanisms for independent reporting and accounting — as I've said, an individual or a service whose function and whose mandate would be to independently reveal and enquire and report. That should be his perpetual and continuing interest where lack of value has been determined, and let him report that.

Let the government also put together a public accounts committee that's more than a figurehead, where one can regularly and properly sit and question public expenditures and determine as to whether or not the public has received value.

When presenting bills such as this one for $210 million, let the government provide valid reasons and enunciate and furnish proper evidence and support of the measure that is proposed, and of the need for the dollars. Let us have cost projections, income projections, expense projections. What are the social benefits, what are the economic benefits, what are the environmental benefits? To what extent are they

[ Page 3430 ]

going to be restricted by the policies of this government or by the policies of perhaps any future government? But where are those briefs, Mr. Speaker? Where are those briefs and where are those budgets?

Any endeavour that should stand any chance of success whatsoever should have that material available and those figures filed. That information, I would say, must be available. If it's not, that's an absolute public disgrace. I'm going to assume that it is available, but if it is available why has it not been produced to this Legislature?

Once again we're going to be asked to vote $210 million in the dark and make a judgment decision without providing material facts. That I cannot do, Mr. Speaker. I will be opposing this bill. I'm not opposing the railroad, but I'm opposing one thing: I'm opposing the lack of proper accountability in this province.

MRS. P.J. JORDAN (North Okanagan): Mr. Speaker, in some ways this is one of the most important bills we have to debate in this session of the Legislature because it does deal with one of the fundamental lifelines of this province. One could call it an artery in relation to the human body because without sound arteries the body doesn't function, and without this railway it's quite obvious that British Columbia cannot function as it should. As is clearly evident from statements in this House and evidence as to what is happening in the railway, its functioning is in jeopardy.

Because of its vitalness to this province we must all stand in support of this railway. Otherwise those programmes and services that we all wish to perform and provide for people cannot be provided unless we do follow the tendency being carried on by this government of financing those services to people, not from the resources of our province but out of the pockets of the working people of our province.

The bill asks for a loan increase by striking out $440 million and substituting $650 million. I would feel that this is the matter to which we should address ourselves in this debate, the amount of money involved and the reasons for its need as it relates to the viability and the economic soundness of our province.

Also the matter of accountability must be considered. But I think, in light of what has been said in this debate, led off by the Premier, there are also some other questions that should be asked, and there are also some other points which should be made.

My thoughts are prompted by the statements of the Premier of this province when he introduced this subject Friday last and that are recorded in Hansard. It leaves one in a quandary when they read his statements as to really what his intention is, and whether in fact his professions of accountability, his professions for open government and his professions for the love of this province and the need to develop this province on a sound, economic basis for people, and the need to do away with political interference and the need to do away with politics per se when we are discussing serious subjects, are not just a little bit plastic.

In his introduction of this subject, Mr. Speaker, there is very little, when one reads through Hansard, in the statements of this Premier and president of this railway that would in fact explain factually to the people of this province why this railway must continue and why this railway must be dealt with on a sound basis and why it is essential that this railway must function on an economically sound basis, If I were a citizen reading this without knowing all the details — and we don't know all the details of the railway — I would draw the conclusion, in spite of the Premier's protestations, that this was very much a political speech and that this Premier was very much intending to bring the B.C. Railway into the public sphere, not for a matter of serious discussion but for political reasons and, heaven forbid, possibly political gain.

It is this Premier and this president of the railway that uses such terms as " political chicanery...scandalous behaviour." It is the Premier and his statements that refer so consistently to "cheap politics." One can find very little that this Premier has said in discussing this subject in this bill as well as looking at his statements in relation to other basic projects in British Columbia that would make one prompted to deal with the facts and to set politics aside.

I wonder why this Premier talks about accountability. He rode to office on the premise that he would bring a new era into British Columbia, let the sun shine in, accountability on the part of government and Ministers, open books, do away with the political shenanigans that he felt were here before.

We see no evidence of this. If the Premier felt that this was a matter of concern in British Columbia, why, when now he is the Premier of this province and he is the president of the British Columbia Railway and he is the architect of ICBC and he is the architect of the actions of his government, so he says, don't we see an example of the change he says was needed?

He claims that government could conduct its business under the light of the public, that there was no need in negotiations for there to be private meetings or even secret meetings. But do we see the Gottesman contract? We're advised, in spite of his words, that there is a need for secrecy.

It is this Premier and Minister of Finance and president of this railway that told the public of British Columbia and told this Legislature that there was indeed a need for open discussion on the

[ Page 3431 ]

borrowing of this province, if it had to borrow. It was this Premier who criticized the financial practices of the former administration, and yet we see that it is this Minister of Finance and the president of this railway who is borrowing secretly, who is borrowing under prospectuses that may well come into serious question.

I wonder why, and the public wonder why, if he felt these things were wrong, he is carrying them on now. On accountability — and I don't want to be repetitive — the former speaker from Vancouver–Point Grey (Mr. Gardom) went into great detail on the debts that are mounting not monthly, not weekly, not daily, but hourly by Crown corporations and government businesses that have been started since this government took office and that previously showed a responsible fiscal attitude. I won't repeat those figures, but one must ask again, in a broad term, where is the accountability? What is the real amount of the ICBC subsidy? If we're going to vote money to the B.C. Railway, which is running at a surprising loss at this time, we must know what is the true profit picture of Can-Cel.

MR. SPEAKER: Order. I would ask the Hon. Member not to stray into other Crown corporations. Really, it's starting to debate a totally different issue. The issue really is the accountability or otherwise of this institution in the bill.

MRS. JORDAN: I appreciate your comments, Mr. Speaker, but the former Member who just spoke went into a good deal more detail for comparative purposes on these subjects than I am. I don't wish to be repetitive, as I mentioned — that's why I'm not mentioning them now — but I think it's essential, begging your acceptance of this argument, that if we are to vote $650 million borrowing power to the B.C. Railway, we must be sure that there is going to be accountability. To date, Mr. Speaker, it's essential that we examine this Minister of Finance and president of the B.C. Railway's accountability in other areas.

I won't transgress on your good nature, but I hope that the Speaker himself will reflect the need and the concern of the public to know why this Premier who talks one way acts another way. There's such an example this afternoon, Mr. Speaker, when the Leader of the Opposition (Mr. Bennett) made a motion. I recognize it was the Speaker's decision, but the Leader of the Opposition asked for leave of the House to have a judicial inquiry to examine areas of extreme concern regarding a prospectus issued by this government which does not appear to be compatible in its statements outside British Columbia with the statements that are made inside British Columbia. Who denied this Legislature the right to set up this inquiry? Why, it was the Premier himself, the Minister of Finance, the man who is asking for this extensive borrowing power as president of the British Columbia Railway.

HON. D.G. COCKE (Minister of Health): On a point of order, the Leader of the Opposition put forward a motion and it was to have instant debate on the motion — that was what was denied. That motion can be put on the order paper, Mr. Speaker, and rest in that fashion. There's nothing denied about that motion, other than his way of implementing his desires and making some press kudos.

MRS. JORDAN: What is your point of order?

MR. SPEAKER: I think the Hon. Member was saying that what was denied was suspension of the rules to deal with and debate a matter of his motion at this time. When he asked for leave of the House to debate a motion that he then read out, he was in effect asking for a suspension of the rules, and suspension of the rules was denied by the Members of the House.

MRS. JORDAN: Yes. Thank you, Mr. Speaker. That's understood and your ruling was accepted. I didn't read the motion and I don't intend to introduce it at this time, but the point that must be made is that this was a matter of urgent public concern in terms of public concern. The Speaker was gracious enough to put it to the House for their decision, and it was the very man that calls for open government, who rode to power on the fact that the was going to bring accountability to British Columbia, who has cast so many innuendos and aspersions and smears against the former administration, that denied the right of this House to examine this question today. With due respect, I appreciate the Minister of Health's advice that it could be put on the order paper, but the Minister of Health knows as well as I do that that motion would not be called because it is only called at the pleasure of the government.

One has to ask why this Premier and Minister of Finance is trying to build his political base and his political image and his political power while in office, when he has the opportunity to be positive, when he has the opportunity to perform, and he has the opportunity to be accountable, why he is trying to build his reputation and his image and his power by tearing down, often not in the true factual sense, the former administration and the former leader of this province.

The B.C. Rail is a classic example, When the Premier made his presentation, Mr. Speaker, he didn't talk with pride of this great railway. He introduced his subject by saying: "Today is another day of reckoning for the people of British Columbia and the

[ Page 3432 ]

Members of the official opposition. The facts I reveal today will surely lay at rest forever the myth of financial wizardry attributed to the former government."

MR. D.M. PHILLIPS (South Peace River): He laid himself to rest.

MRS. JORDAN: Why is this Premier so intent on destroying 20 years of what would appear to be apparent satisfaction by the people of this province? They re-elected that government over and over again. Why does the Premier go back and use that as a means to build himself? Why does he not build himself on a positive basis?

HON. MR. BARRETT: And hide the facts?

MRS. JORDAN: This railway, Mr. Speaker....

AN HON. MEMBER: You hid them in here.

MRS. JORDAN: I think the Premier's expression "hide the facts" has got to be most touching. No one has hidden more from the public since taking this office than that Premier and Minister of Finance and that government.

HON. MR. BARRETT: Ohhhhhh!

MRS. JORDAN: He hides nearly every action behind those green doors. This government and these Ministers consistently resent questions that are being asked by the opposition, to the point where their arrogance is becoming legendary. Talk about hiding!

This railway is a part of the history of British Columbia. I don't agree with the Member for Vancouver–Point Grey (Mr. McGeer) that it's been racked with scandals, as he mentioned last night. I believe it's had its problems; I believe it will have its problems in the future. The railway is there and the history is reasonably well-known. For years the railway essentially stagnated in British Columbia. Rail lines sat there, cars shuttled back and forth, but it was going from nowhere to nowhere, serving no major, useful purpose and unable to meet its destiny as committed to British Columbia because there was not the opportunity for it to expand, nor was there initiative for it to expand and commence its contribution.

It was the former administration that did have the courage and did have the foresight, frequently contrary to the thinkings of the then opposition, which is the now government, the NDP — and the CCF before that — to push this railway ahead, to take the chance that had to be taken. I'm sure it wasn't easy, but the recognition was there that if ever this province was to expand beyond the Patullo Bridge and the slight expansion in the Fraser Valley, there had to be essential ingredients.

Power. There is no way you can develop a jurisdiction for people without power. There is no way you can develop a jurisdiction for people without Transportation — a means for moving the basis to build that power from A to B. That is what the railway was designed for.

MR. PHILLIPS: Just like the CPR built Canada.

MRS. JORDAN: Indeed, Mr. Member — like the CPR.

MR. PHILLIPS: And the CN.

MRS. JORDAN: The cost at the time of the CPR.... When we look back in retrospect and in light of today's values, it's very easy to be critical. But how would we have voted if we had sat in the federal parliament at that time? How would we have voted if we had been the people? We would have voted as they did. We would have voted as the people of British Columbia did when it came to the development of this province and the BCR.

MR. PHILLIPS: With his lack of leadership and lack of courage, he would have been against it.

MRS. JORDAN: Indeed. But I can't speak for the Premier of Finance. It was the NDP that didn't want power development until 1984 — George Orwellian days — in this province. But the government of the day, with whatever problems they may have had did have the courage. They recognized the resources were there in the northern part of this province. They recognized that those resources had to form an economic base for this province in order to attract people to the north, and from which we could provide the services to the people that were needed and desired in this province, and from which we, the people of this province, could build a lifestyle that we were capable of doing and which we desired.

It's very appropriate that this discussion is taking place, for that railway was designed to be one day in concert with the Yukon Territories. We hope to this day that it will be.

But we had a benefit that was recognized then, and which the Yukon doesn't have today. Their legislators who are visiting with us today have made very clear that one of the major problems they face, apart from the constitutional questions, is that they have a non-renewable resource from which to build their economy. That's a great problem for them.

We were blessed in British Columbia. We had an administration with the sight to see that we couldn't build for British Columbia the life we want solely on a non-renewable basis, that we not only had to look

[ Page 3433 ]

at the mineral development and its benefit, we also had to look at the forestry development, a renewable resource. This province led.

Even the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams), who has been so critical of the past, when he is not in British Columbia will say that British Columbia developed one of the most advanced and conservatively conscious forestry cultivation programmes in the world today. We will eventually farm our forests agriculturally and responsibly so that we do have a renewable base from which we can provide the services. And we hope that someway we can help the Yukon in their problem that way.

So the government then recognized that there had to be a companion approach to developing the north and our economy — power, transportation, expertise and people. They recognize that for the province to grow, we had to have a stable base all over the province, not just concentrated on the lower mainland, and that if we are to attract people to the north, we had to generate an economy there that would provide for people that which they needed in the terms of services, hospitals, schools, recreational facilities, and a life style that was compatible with those in other parts of the province. It wasn't a one-shot deal; it was a planned development and a planned recognition.

The criticism is that the railway was developed as a resource railway, not a passenger railway. The Premier simply doesn't seem to be able to understand this concept of reality when you're developing a province. To bring it down to a simple measure, I would just point out to him that when he first married, he rented an apartment or a house. It's common knowledge that some few years ago he had to borrow some money to make a down payment on a small house. It wasn't until he had advanced to the Premiership of this province that he could afford a house that cost in the neighbourhood of $60,000 or $70,000.

MR. SPEAKER: Order. Order, please.

MRS. JORDAN: He didn't get a Cadillac before he learned to ride a bicycle.

MR. SPEAKER: Order, please. I think the Hon. Member is transgressing on a very important....

MRS. JORDAN: I don't mean this in any way an insult to the Premier. It's a very important point. But I'll liken it to ferries, Mr. Speaker, if you wish.

MR. SPEAKER: Personal allegations or statements are not in order.

MRS. JORDAN: I never intended this to be an allegation; I'm trying to help him understand.

The Hon. Member for South Peace River (Mr. Phillips) used roads as an example. If you're developing a road into Pouce Coupe, as it's a little community, you don't put in a four-lane highway. You put in a road to serve the needs of the people and the economy at that time, with room for expansion.

The ferry system. This government.... Very proudly the Minister of Transportation and Communications (Hon. Mr. Strachan) announced the stretching of another ferry, and that's a good thing. You don't devise a ferry system and then put on streamlined Cadillac ferries that would carry 50, or 500 or 100 more cars than you're going to carry in the beginning. You start small, and you start responsibly, and you expand. That's what was done with the B.C. Railway.

MR. PHILLIPS: Like upgrading the Fraser Canyon.

MRS. JORDAN: Excellent example. Jackass Mountain — when you talk about overruns and problems, that probably had some of the finest engineering and road development in the world. But it will always require it because British Columbia is a province with unique geography and unique geographical structures.

The British Columbia Railway has been a major part of the development of the resources and the services in this province in the past, and it will be. The forest industry developed in the north as a consequence of the B.C. Railway. The mining industry developed in the north as a consequence of the B.C. Railway. The validity and creation of markets for Peace River grain and other agricultural products developed, is developing and must develop more, as a consequence of the B.C. Railway. Tyler petroleum by-products, butane and propane, go to the market today as a consequence of the B.C. Railway.

Interjection.

MRS. JORDAN: Yes, industrial activity flourished throughout the years as a consequence of the BCR, and it must again. That's the vital reason for the B.C. Railway and the need to support this bill.

The validity of developing the pulp mills in the interior of this province to expand the economy of the province, to balance the economy of the province, to balance, hopefully, the dispersion of the people who are moving so rapidly to this province, was made possible because of the abilities of the B.C. Railway.

Loos at Prince George — a small and very nice community a number of years ago, but one of its

[ Page 3434 ]

major problems was population turnover. Lack of jobs, lack of amenities. Today it's a vital thriving city. In the future it will be a crown jewel of northern cities. And one day we hope it will have a university. We hope that it will continue to be an attractive area for people to live.

Fort St. John. None of these communities would be what they are today; none of them would be able to provide the jobs and the amenities for the people living there today, if it wasn't for the British Columbia Railway.

But what does the Premier do when he gets into a position to build and expand this railway? What an opportunity of a lifetime for a leader. Does he build it up? Does he speak proudly of it? If there's criticism to be made of it, does he make it factually? No, he wraps it up in political — as he calls it — chicanery.

If you look at the figures for the B.C. Railway since 1972, it proves that the only thing that has increased since the NDP came to power in relation to the British Columbia Railway is the cost. Revenue in 1972 was $44 million, Expenses in 1972, $32 million. Revenue in 1973 was $48 million. Expenses in 1973, $48 million. Expenses in 1974, $62 million. You count out that in 1973 and 1974 the figures are restated, whatever accounting procedure you use. They would be worse if they were using the new accounting procedure.

Mr. Speaker, whether an accountant's theory of depreciation is used, or another accountant's theory of depreciation is used, either system, when you examine these figures, reveals no significant increase has occurred in the revenues of this railway, in the cash flow of this railway, while the costs have sky-rocketed.

But what has happened to the resource development in British Columbia which should be assisting this railway, which is one of the fundamental reasons why this railway exists? The resource revenues should be providing the services to the people of this province. But in fact, under this government those services are now being provided, to a large extent, out of the pockets of people rather than out of the pockets of resources.

Mr. Speaker, how can the Premier deny and not understand that resource development in the north fits hand-in-glove with the development of the B.C. Railway? In January, 1973, there was still optimism in this province that this resource development would occur. People were willing to account for the Premier's newness in office, perhaps a little naivety, and the fact that he really knew nothing of resource management, finance or business. But that excuse can't last forever and it hasn't lasted forever.

Now the truth of this government's attitude toward resource development and the strangulation that its resource policies have put on this province are coming home with their devastating and potentially devastating effects for the people of this province. No matter how new he was, the Premier can't claim that he didn't know.

Let me read from the Touche Ross report of January, 1973. I don't think you have to be a wizard to understand this. I am just a simple country girl, but this seems to make sense to me. They say "provincial." They are talking about economic and social considerations for the development of the railway provincially:

"The Leo Creek–Dease Lake extension will have economic and social implications for the province well beyond the immediate effects on the financial performance of the British Columbia Railway. The time available for the review of the project has not permitted an extensive examination of these implications. Also, the uncertainty of some of the resource projects and the definite timing make any benefit cost evaluation extremely imprecise."

That came out in January, 1973, at a time when this Minister was formulating his resource policy, at a time when Bill 31 — which, for the interest of those from the Yukon, we class as the Yukon development bill — was to become a reality in this province. Yet in their own report they are being cautioned, very simply, that the uncertainty of the resource projects makes cost benefit evaluation extremely imprecise. In other words, we have got to support this railway with sound resource policies and development of the north.

Among the other principle economic considerations for the province are the following, the report goes on to say: "Mining royalties from the expansion of existing mines and the establishment of new ones will contribute to the benefit and the security of this railway."

They suggest forestry taxes from expanded sawmills, new sawmills, new pulp mills and other forest products operations.

They suggest to the president of the railway that corporate income taxes from the increased business profits attributable to the extension of the railway through the development of primary industry, secondary industries and commercial businesses will all contribute to the stability of the railway and help with its development. Personal income taxes from payrolls arising from expanded new businesses, provincial and local taxes, taxes from liquor, gasoline, property and other revenues....

AN HON. MEMBER: What are you quoting from?

MRS. JORDAN: This is from the Touche Ross report as to the policies that this government should adopt in order to help establish more firmly the British Columbia Railway.

When one examines the record of this government

[ Page 3435 ]

and the recommendations of this report, the only recommendation the Premier, Minister of Finance and president of the railway seemed to adopt was the increase of liquor, gasoline and other tax revenues — personal income taxes. His policies, Mr. Speaker, have not increased the revenues from the natural resources of this province. I won't go into the figures, but we all know that exploration is down, if not dead. We all know that mining revenues are down. We all know that forestry revenues are down. That can't all be blamed on the world economic situation. The Premier must accept the responsibility that his policies and his policies alone have been among the most devastating attacks on the viability of the British Columbia Railway.

In these areas, royalty and taxation have increased, and many increases have been dramatic. This has been to the detriment of those industries. It has been to the detriment of exploration; it has been to the detriment of investment in this province and the development of this province. Even the Minister of Lands and Forests (Hon. R.A. Williams) was optimistic when he took office, though it repeated attitudes as much as any others — it is his repeated policies as much as any other policies — which are proving a detriment to this province and this railway. One must ask why these Ministers don't take the advice of the reports they receive and why the Minister of Lands and Forests doesn't read his own press releases. In a press release from his department dated July 23, 1973, the Minister and a team of professionals support the Dease Lake extension. The Minister's release outlines the forest and mineral potential of the area. I'd like to quote for the record parts of this press release, Mr. Speaker. He says:

"The new rail system will open up an area of some 27 million acres of forest land within the northwestern section of the province west to the Alaska Panhandle, north to the Iskut and Stikine drainage systems and east to the headwaters of the Skeena. The individual lines will pass through virtually the whole of tree farm licence 1, awarded to Canadian Cellulose Co. Ltd., the Skeena Bell-Irving public sustained yield units and a number of proposed PSYUs to the north up to the Yukon border, which will be developed as a transportation network is installed."

It goes on to explain that tremendous factual development that can take place in that area. On copper, under mining development, his own press release says:

"Two very large copper royalties lying in the Stikine River basin will benefit from the extension. These are the Stikine Copper on Galore Creek and Liard Copper on Shaft Creek. Each of these has ore reserves exceeding 100 million tons. When developed they will be major contributors to freight on the new extension of the British Columbia Railway. Other promising copper properties in the area have reserves in the order of 30 million to 100 million tons."

He goes on to describe a new discovery — asbestos. "A new line will provide an alternate route for the shipping of asbestos from Cassiar property, currently 100,000 tons of baled asbestos annually, which is now trucked by the Alaska Highway and the Port of Skagway. Additionally, it may now prove feasible to market the short-fibre asbestos presently stockpiled in the mines."

A vital need for this extension — coal. This has been touched on, but I will say out of his press release: "The Dease Lake extension will pass right through the Groundhog coal field Copper smelter.

"It is quite conceivable that as the tonnage of copper concentrates in the area expands a copper smelter could be established on the coast, possibly at Kitimat."

Unfortunately the Minister is wrong when he suggests that automatically the movement of the railway into these areas will by itself cause resource development. The presence of the railway is an important factor, as I pointed out. So is taxation, so is resource policy, government intervention, attitudes and many other factors. What has happened is that the government's relationship with industry in encouraging economic developing has changed. The third-party role of government is now gone in British Columbia. There exists now a virtual adversary relationship between government and the industry. That, Mr. Speaker, is what the Minister of Finance and president of this railway should be accountable for. The truth of this statement is reflected in the absence of growth in revenues and in the absence of any significant development of the new customers for the British Columbia Railway.

Mr. Speaker, if this Minister of Finance and the president of this railway believes in this railway, why doesn't he deal with these facts? Why doesn't he tell us his positive approach to the future? Why doesn't he tell us how he is going to balance the books, how he is going to change his resource policies and the attitude of government and the relationship of government to bring confidence back to British Columbia so that we can continue to expand and develop this railway to meet the needs of people?

This Premier is known to secretly admire the former premier; we know he emulates the former premier in many ways. But I would like to point out a vast difference, Mr. Speaker.

The former Premier had a great capacity to make us proud to be British Columbians. He had a great capacity to unite us as a people so that we could

[ Page 3436 ]

recognize our own talents and our own potential, so that we weren't afraid to step forward and take a chance, so that we weren't afraid to tackle our province and bring it out of the wilderness of debt and nowhere and make it one of the most rich and satisfying living areas of this country. Through his influence, we as a people built this province.

This Premier, in contrast, builds his power on trying to foster disunity. Under the former administration we were proud of the B.C. Railway, we were proud of the Bank of British Columbia, we were proud of our province, and we were proud of our accomplishments. That's how we will build this province — and that's why we're going to support this bill. We know, Mr. Speaker, that in a very short time there will be a Premier in that chair who is competent, who is capable, who speaks in terms of unity of people and who will help us as a people build this province into the province that it can be and will be and to build a life here for people, oriented to people, with an economy that will serve those people.

The British Columbia Railway will be part of that, and it will be managed openly and it will be managed responsibly. It will continue to develop the northern part of this province for people. It will continue to see that the power potential is utilized. It will continue to see that it plays a vital role in expanding the economic base of this province so that we never become a one-interest province, and that interest in those services served not from the resources and not from the riches of the people and the resources of the province but out of the pockets of the workers. That's why we'll support this bill.

MR. H.S. SCHROEDER (Chilliwack): Mr. Speaker, I'd like to speak just briefly in support of Bill 27, which expands the borrowing power of the British Columbia Railway. I think that the British Columbia Railway is something that all of us would like to see go. By "go" I mean operate, and operate at as close to a profitable level as possible. I think that the Premier himself does not wish by any statement or any attitude that he may communicate to try to disrupt the operation of the railroad or curtail the operation of the railroad to make it look worse than it really is. I'm sure that that is not his intention.

I think that any railway, Mr. Speaker, that can boast, as this one does in the report of the vice-president, that it has something like 100 diesel units, that it has total operating units of some 7,412 units that are able to transport the raw materials from the interior to the coast where they can be either utilized or distributed to the export market upon which we depend.... Any railroad that can boast as it does on page 10 that we had something like a million and a half total train miles, that we had a net ton-miles total of 1.9 billion and that we had a gross ton miles of something like 3.8 billion is a railway that all of us would like to see flourish.

[Mr. Dent in the chair.]

I'm wondering if in the opening statement that the Premier made in introducing the bill he was actually asking the people to support him in a bid to increase or enlarge the railway, or was he asking the people of British Columbia to join him in a verbal barrage that would further undermine the confidence that's in the railway, the people who are working in it and the management of it and the ownership of the railway?

We, the people of British Columbia, own the railway. We trust its management to, first of all, those who we have elected and secondly to those whom they appoint. And it seems, Mr. Speaker, that each time we change ownership — at least directorship — we have major either birth pangs or growing pains, and I haven't quite determined which of the two it is.

Nonetheless, in introducing the bill I'm sure that the Premier had in mind the 3,000 to 3,500 people who belong to the direct labour force of the railway. I'm sure that when he sought, by his opening statement, to undermine the confidence of the railway, he kept these 3,500 people clearly in mind.

Whenever you change management you many times change policies. It doesn't come as any surprise to the people of British Columbia that some of the policies of this railway have changed. It doesn't come as any surprise, certainly, to the elected Members that policy could — maybe even should — change. But to make those changes in such a way that it would seek to cast aspersions not only upon the previous management but upon those who have to carry the load of managing that railway now, I think is despicable. I don't think that the opening statement of the Premier could be or should be acceptable — not in this House or beyond these sacred walls.

MR. G.S. WALLACE (Oak Bay): Which walls?

MR. SCHROEDER: These walls, Mr. Member for Oak Bay, are considered by many to be sacred. Perhaps you don't hold to that theory.

MR. WALLACE: Huh!

MR. SCHROEDER: Nonetheless, there are two basic changes that took place. In bringing in the changes, the Premier sought by any means, even by the use of devious language, to cast aspersion upon the previous administration.

Let me say, for instance, that on page 2 of the vice-president's report it talks about financial reports under "corrected procedures." Clearly, Mr. Speaker, the words were not "corrected procedures" but "adjusted procedures" — financial reports under adjusted procedures.

[ Page 3437 ]

As we look at the restatement page in the financial report, on page 3, the major area of adjustment came in the area of depreciation. I would like to just address myself to the concept of depreciation for just a few minutes. Depreciation starts out with the cold, hard asset figures. You are going to depreciate X number of dollars over a period of time. This administration chooses to use straight-line or accelerated depreciation. No one in this room and no one in the accounting industry (if you can call it an industry) is in a position to say it is right or wrong or it is better or worse just to say it is a statement of policy that this administration believes in a straight-line depreciation policy. Well, that's great. That's great. Go to it. Have with it, if that is the policy they wish to follow.

Then there is the other policy, which is one perhaps more closely adhered to by the previous administration, and that is one of deferred depreciation. However, the number of depreciation dollars is established at the time of capitalization. Those dollars are constant. If you want to depreciate them on an accelerated basis, it just means that you have to charge those dollars in the early years of the amortization period. If you want to defer depreciation, it means that you charge the bulk of those dollars a little later.

This was the major policy change. With this change in mind, there has been an increase of depreciation charged in the early years, making the loss position of the railroad look worse at the beginning. But I remind this administration that it will make it look better at the end because the depreciation value is constant.

Now there is a very serious question that I must pose. The question is simply this: in an escalating economy or when there is an inflationary spiral, Mr. Speaker, it is left to the economists to decide: is it better to have an accelerated depreciation programme or is it better to have a deferred type of depreciation programme? I would have to suggest to you that although this administration wants a straight-line policy and wants to have an accelerated form of depreciation, I simply have to ask this: is it better or is it worse? I don't know that the administration has stopped to think whether or not depreciation has an advantage in an escalating economy.

For instance, since load values — dollar values attached to load-tons — are going to be increasing in an escalating economy, wouldn't it be better to establish the assets to be depreciated at a fixed level today and defer the depreciation until such a time as the dollar value has decreased? You have an inflation. Let's say you had $100 that you wanted to depreciate, Mr. Speaker. Are you with me? Let's say you were going to depreciate it on a straight-line basis of 10 per cent per year so that over a 10-year period, you completely amortized.

Now if you had $100 worth of revenue per year and operating expenses against which you wanted to charge this depreciation, the $100 is your revenue today, the same day that you establish your depreciation value, your asset level.

On an inflation or escalating basis, perhaps five years from now your income would be $200. Let's just build the model in that way. It's not too high when you consider that the percentage increase in one year is 31 per cent in expenses in this railway in this past year. I think the model is a reasonable model, Mr. Second Member for Victoria (Mr. D.A. Anderson).

However, coming back to the model. After a five-year period, perhaps your revenue would be $200, against which you would charge your depreciation. Having been established at the $100 level on a straight-line basis, you would be charging $10 depreciation against the $200 revenue, whereas if you had had an accelerated plan whereby you had to charge those dollars against depreciation in the first year, you would have been charging $10 against $100. Do you see the advantage?

I'm not sure that the government has taken the right policy in choosing the accelerated depreciation plan. Nonetheless, whichever way, they have the decision to make. It is a political decision, it is clear. However, I do not believe that the Premier in making that decision has the right, or I even wonder if he had the intention, of trying to create a false loss picture at this time so that he could lend some credibility to the actual loss where actual losses have occurred.

Mr. Member for Vancouver–Little Mountain (Mr. Cummings), you understand that the real losses occur when you compare revenue in a given year with actual expenditures in a given year. Strange as it may seem, the vice-president's report spells it out rather clearly. It gives us both numbers so that it is simple. Just by subtraction you can find out what the actual cash-flow loss was for the year 1974. His report says on page 3: "The net loss of the railway in 1974 amounted to $32.2 million compared with a restated loss of $13 million in 1973. This $32.2 million loss included $13.9 million arising from the above changes." You notice it doesn't say "from the above errors," or "from the above bungling." It doesn't say that these $13.9 million arose from hidden costs, or, as the Premier in his opening statement suggested, that the end result of this was to bury in the books a loss of $52.5 million. It doesn't say here that these losses occurred because of a burying process. It says that the above additional losses were book values because of "the above changes in accounting policies and depreciation rates."

Okay. If you subtract the additional amount that was caused by the restatement, by the new policy, by the new depreciation rates, if you subtract it from the stated amount of loss, $32.2 million, you have a net "under the old system" loss of $18.3 million.

[ Page 3438 ]

My question is: did the Premier find the $18.3 million a bit hard to swallow when he looked at the year-to-year comparison of losses and profits from the years 1957 through 1973? Accumulated losses from 1957 through 1969 were like $4.369 million. By 1970 there was a break-even point under the old policy. In 1971 there was approximately break-even — there was $989,000 on the black side of the ledger, but approximately break-even in 1971 under the adjusted policy. In 1972 it was approximately break-even, under the unadjusted policy. Then in 1973, the first year of the new administration, we have a $3.3 million loss in one year under the old, unadjusted, understated system, When the figures came in, when the administration became aware of it in 1974, the losses were to be like $18.3 million. They had to come up with a plan whereby they could rationalize and justify that kind of a loss to make it look not quite so bad. You see, $32.2 million of loss doesn't look so bad when you say: "Hey, we've had losses all the time." So that is why the new policy was adopted — one of accelerating depreciation.

We're talking about the major segment of the restated numbers — $27,197 million in what we're talking about, restated.

There was another area.... By the way, before I go to the other area, the vice-president's report itself gives us some insight as to why the changes were made. Did you notice them, Mr. Member? On page 4 of the vice-president's report it cites four reasons for the retroactivity of the new policy.

First it says: "Because the financial statements as of December, 1973, were not prepared in accordance with generally accepted accounting principles...."

First of all, we have to discount that reason completely. It is false, it is misleading to say that the financial reports before 1973 were not issued in accordance with generally accepted accounting principles because you first have to answer the question: who establishes those accounting principles? They would have us believe that it was the Canadian Transport Commission. However, the Canadian Transport Commission not only is not responsible for the accounting procedures of the B.C. Railway, but also the standard of comparison prescribed by the Canadian Transport Commission is not even available to the BCR.

So in what kind of a frame of reference do we take this statement "in accordance with generally accepted accounting principles"? Here again, those principles have to be established by the policy of the administration itself. That same prerogative that this administration has accepted for itself and has taken by implanting new policy procedures — that same right belonged to the previous administration. As a result, you can't say that these were not prepared in accordance with generally accepted accounting principles.

AN HON. MEMBER: Jiggery-pokery.

MR. SCHROEDER: Right on! Jiggery-pokery.

Let's go to the second reason. The second reason says — and I've already alluded to it: "Because certain past policies did not conform with the accounting regulations prescribed by the Canadian Transport Commission." Need I repeat? It didn't have to be. Not only didn't it have to be, it couldn't be. So that's a whole lot of breath in a windstorm.

The real reason, I suggest, is in No. 3. I've already alluded to it in my earlier remarks. The real reasons given in the words of the vice-president. Why were these new policies made retroactive? Listen to it: "To establish a basis for the preparation and comparison of 1974 and future financial statements." There's the real reason. They wanted to establish a more favourable comparison level so that the $32.2 million loss of this year wouldn't look so bad — that's the real reason.

No. 4 just further cements the position I have just suggested. It says that the fourth reason was because of the significant effect of such changes on previously reported amounts. Why would they make that statement when they left the key word out of the statement? I'll fill it in now and you can understand very readily why these policies were made retroactive. "Because of the significant" — can I put it in parentheses? — (political) "effect of such changes on previously reported amounts."

The Premier in his opening statement clearly tried to make it look as though error had been committed — clearly made it look as though there was a devious plot to hide something. As a matter of fact, he says it right in his statement in the Blues:

The end result of all this, Mr. Speaker, was to bury in the books a loss of $52.7 million between 1967 and 1972. For the benefit of the Leader of the Opposition (Mr. Bennett) I would note that in the year 1972 there was a loss of $8.1 million, not a profit of $993, which he would like the public to believe.

He clearly says that there was a plot to deceive. I don't believe that that serves the present railway in good stead at all. I don't believe that he has thought through to the end of that kind of a charge because, surely, he must understand that the people of British Columbia are sophisticated enough to see through the fact that even the $52.7 million restated loss over 15 years amounts to only $3.5 million of restated loss, which is almost the equivalent of the actual understated loss of the operation of that railway in the last year, 1973.

I think the Premier should apologize, not to the House so much because we understand him here, but I think that the Premier should apologize to the people for trying to make them believe that the

[ Page 3439 ]

railway is in bad shape.

The other area — and I was all ready to start on this paragraph about 10 minutes ago — of major change in accounting policy was in the area of capitalization. Depreciation was one area; capitalization was the other. I can just hear the scoffs as the track-laying labour issue was discussed. It is the other major area in the restatement — $27 million is depreciation and $10 million is the track-laying labour. The Premier said: "How can you take track-laying labour and charge it to capital assets? It's labour."

Let me ask a simple question: what are all capital costs made out of? Materials only? When they finish the construction of the new railcar plant which is supposed to cost a total of $9 million, does that $9 million include materials only? Of course not, Mr. Speaker, labour is involved. Labour expense is capitalized. That $9 million for the railcar plant represents the cost of construction and is subject to depreciation. It is capital investment. Labour is part of that capital investment. Why doesn't the Premier understand then that track-laying labour also can be charged — not only can be (that's to be decided by the policy) but I say should be charged — to the depreciation of the account, track-laying labour of some $10 million. But no, this administration chooses rather to have a deflated capital assets figure and an accelerated depreciation policy to make the railroad look bad right now.

But I've got faith in this railway, Mr. Speaker, because you can't cheat on numbers. If you take them away now, you don't have them left later. If you leave them here now, they are there when you come back to them a little later if they have an accelerated depreciation plan right now. God bless them, because in the years to come that depreciation will not be charged to operating accounts. And although the railway may look bad today, it will look better tomorrow because of the policy — which I don't believe this administration understands — they have adopted today.

I say let's on with the railway. I say if we need to borrow the extra $210 million to make it go, let's first consider whether or not the railway can recover from such extended borrowings; then go ahead and borrow it. It increases the capital base. Let's make the railway not only pay for itself, but let's let it be the backbone that it is for the development of the interior of British Columbia so that it can show its strength in the timber industry, in the forest industry, and so that it can open up those vast areas of richness which still exist in the interior and which are awaiting the end of this debate for the borrowing so that we can get on with the job.

I support the bill, Mr. Speaker.

MR. F.X. RICHTER (Boundary-Similkameen): Mr. Speaker, the debate that has taken place in the course of second reading of Bill 27 has clearly given me some concern. I am sure that the House can understand my concern in the light of the facts and the statements that the Minister of Finance made in his remarks on moving second reading, and the cloud that it places me under personally in light of my administrative responsibilities as the previous Minister of Commercial Transport who was in charge of railway certification, engineering certificates and also plans. I have been markedly concerned in relation to this matter because I recall back in the very early years of my youth the discussions that took place in my own home regarding the very same railway, then known as the PGE.

There was always a considerable amount of political hay being made with that particular railway. I am sure that it was started with the best of intentions. I still think that it should be continued with the best of intentions, although it has been a political football that has been kicked around from pillar to post over the past few years and from one political atmosphere to another.

Certainly this is not what we should be thinking. We should be thinking in terms of proper administration, proper management and the extending of this railway into the areas for resource development. Truly, it is a resource railway, and I'll have a little more to say on this a little later.

When I was Minister of Commercial Transport, my chief engineer was R.E. Swanson, highly regarded for his engineering judgment. He had been there in that department for a number of years. At no time did I ever have any occasion to question his decisions. Certainly, we frequently had long discussions not only in relation to the railway's established plant, but also in relation to the extensions — Fort St. John, Fort Nelson, also the extension from Fort St. James to Dease Lake, and the area between Summit and Fort St. James. These were all new branches for resource development based on a long-term programme, a rather extensive programme covering a very large area.

There have been statements made in relation to centre-line surveys, and various other remarks which, I assume, were made to detract from the good management or the engineering that took place in relation to the railway. You know, there has probably been more miles of railway built in North America on centre-line surveys — and I'll give you an example of some: Jim Hill, the Canadian Pacific, the Canadian National, formerly the Grand Trunk. In prairie areas, where most of our mileage is, it's not necessary to go into very detailed surveys. The main thing is your grades, and in most of those areas there was very little grade work to be done other than to build up your roadbed above the level of the prairie soil.

The mountains are a little different. We run into

[ Page 3440 ]

some rather difficult engineering, and it has to be done in great detail, particularly if it's being built on a contractual basis.

Of course, in the building of the railway between Fort St. James and Dease Lake, it runs pretty parallel with the Rocky Mountain trench, and the topography there is not nearly as difficult as it is closer to the coast or further east in the Rocky Mountain chain.

In the reports that have been made — the Swan Wooster report — they make definite statements. They say that the engineering practices employed by the British Columbia Railway on the Fort St. James–Dease Lake extension have been taken as typical of the railway's current practice. Now this had to be so, otherwise I wouldn't have received the reports that I did from my chief engineer.

As I said previously, I had no reason to ever question any of his judgments or any of the decisions he made in relation to making his recommendations to me regarding certificates and also as far as the signing of plans which had to be signed first by the engineer before I, as Minister, could give the final signature for the construction to go ahead.

Further, it has been stated by Swan Wooster that engineering practices follow what can be considered normal North American practices. I have just mentioned practices that were utilized by such great railway builders as Jim Hill and his Great Northern, and the other railways that we know of today, some of which have gone out of existence because of technological development, highway transportation and various other modes of transportation — air and water.

I find it rather difficult to follow some of the statements that have been made by the Minister of Finance as president of this railway.

Swan Wooster further states that the limited degree of preconstructural engineering performed by the British Columbia Railway directly contributed to the unrealistic, low initial estimate of earthwork quantities and cost at the time of awarding construction contracts. I wouldn't think that this is very detrimental because when any contractor goes in to do a contract, he is going to look for himself.

In most cases, as far as this province is concerned, they have not run into problems other than the escalation by way of our inflationary trends. They have been able to keep pretty much on course, but where you have a railway that you can estimate the original cost and find that this goes on for several years, there is no question that there is no escalation clause put in the estimate, but certainly an engineer would put his own escalation cost in there, knowing full well that at the rate that we are going today, we're bound to have higher costs.

Swan Wooster say they believe the engineering division of the railway is understaffed for the volume of new construction currently underway. The level of

[ Page 3441 ]

individual effort put out by members of the division is highly commendable. Now if they were understaffed, there is only one jurisdiction which could change that under the present system of management, and that would be the board of management, who would then through recommendations from the field increase that. Now why hasn't it increased if it was so badly in need?

These questions give me a great deal of concern, and I have pondered them over the period of time that we have been discussing this bill. Supervision of construction contracts by railway field staff is of a high calibre, Swan Wooster say. If it's a high calibre it is like my former chief engineer. He was considered in the field of engineering to have a very high calibre of decision-making ability. As I say, I had no reason to question him on any count in that particular field.

Methods of measurement of work performed and methods of payment are standard practice in the industry and entirely satisfactory. Well, we're running into this every day with any area. We know that in construction we pay by quantity today and we find that there are variations in quantity and sometimes there is variation in the geology, the materials and there are sometimes some problems. Probably one of the problems of some magnitude is the fact that in many of the areas you run into problems with boggy areas or you have to do some construction during very cold weather to be able to move your dirt, but it seems to me that they have been able to overcome this by newer technology.

The completion schedule and probable ultimate cost of the Fort St. James to Dease Lake extension has been estimated as follows, based on current progress. Probable completion: 1976. Originally, it was for 1974. Probable ultimate construction cost: $140 million, in 1973 dollars. This presently represents a probable final cost of $340,000 per mile, including ballast and track. Taking terrain and railway design standards into account, this figure compares favourably with other recent North American experiences.

Now Swan Wooster's report. I've had something to do with Swan Wooster because when I was chairman of the British Columbia Harbour Board we were in the throes of developing Roberts Bank, where the operating railway that managed that branch was the operating management for all railways that used the branch to Roberts Bank — the CPR, the Burlington Northern, CNR, B.C. Hydro and also as far as the B.C. Rail is concerned. They were the dispatchers who took care of the operation of the trains, the mileages, the wheelage in which the amount of moneys were collected. They did the maintenance of that road.

So I see no reason why such criticism should have been heaped on by the Premier in his early remarks in this debate.

Really, when the railway was discussed — by the Hon. Don Jamieson on behalf of the federal government and by the provincial government — it was necessary to accumulate an inventory of what that railway was going to haul, what was going to be the source of revenue, how you could justify this construction.

A very detailed survey was made under the Department of Industrial Development, Trade and Commerce of that time by a Mr. Glover in regard to the resources, along with the cooperation of the Department of Mines and Petroleum Resources, of which I was the Minister at that time.

Now based on the known mineral resources, based on the known coal resources, timber resources, and resources that were on site, namely at Cassiar — the short-fibre asbestos. I visited the area. I saw a pile of approximately 12 million tons waiting for the B.C. Rail to reach Dease Lake so it would be economically feasible for them to move that product to market for processing. To haul it the 380-odd miles to Whitehorse and put it on the Yukon–White Pass Railway was not feasible. So they were only hauling their long-fibre, which eventually was shipped from seaports at Skagway to North Vancouver.

Now that material has not yet moved. It is still there, and it must be moved, and the only way they can economically move it is by way of rail. Now that was already there. The minute the rails got there the cars could start to be loaded.

Since that time, many, many mines have been developed. The Stewart-Cassiar road which was to complement the rail, the Omineca mining road, which was under my jurisdiction, was pushed through and was to reach Dease Lake on a comparative date basis, which was going to open up between the rail east of the rail to the Rocky Mountain trench for resource development, and the Stewart-Cassiar was going to give you an access between the coast and Cassiar, which would follow feeder roads to work out from the resource location to the point of transportation and to rail.

Now this was the basis on which the discussions took place with the Hon. Don Jamieson here in Victoria, which I attended as the Minister responsible for the railway development, and also as the Minister responsible for Mines and Petroleum Resources, which were going to be utilizing this rail line.

Now there was more to it than that. There was really more to it than that — and Mr. Speaker, this was affecting your area, too — because it was agreed at that time that the federal government would run a line off the CN to Bear Lake to join the B.C. Rail, and arrangements would be made for wheelage between the two railways. In other words, in the use of the comparable rail, whether it was federal or whether it was ours, an exchange of running rights would be granted.

Along with that there were other concessions that were to take place, and that was to the effect that in this general agreement that was reached there would be joint participation to work out details in regard to interconnections, running rights, harbour development at Prince Rupert and assistance in financing, with the ultimate destination of the railway — when I say the ultimate destination of the railway, I mean the BCR — being Yukon territory. Of course, that being under federal jurisdiction, the Hon. Don Jamieson was fully apprised of the fact that this became a federal responsibility at that point.

But this is why it was necessary to have an interchange of running rights. By that fact alone, the interchange of running rights, we were going to see a greater degree of movement of produce down through Terrace, out to the sea coast because, you know, Mr. Minister, there is a more favourable saving in time in shipping between Japan and Prince Rupert than there is between Vancouver and Japan. There is a time-saving factor. One would not think this, but that is a fact. This is clearly demonstrated by the various Japanese companies which were interested in using this line. Not only were they interested in using it for mineral concentrates, they were also interested in the possibility of the Sukunka coal developments being moved to Prince George and out over the CN to have that time-saving factor.

Of course, we know what's happened today as far as the resource policies of the government are concerned. Our mining industry is virtually dead. It's merely just going along on a shoestring at the present time with existing operations. There's nothing more being developed. And when I say there's nothing more being developed, this also includes the whole Atlin and Omineca mining districts because they have not had that resource transportation available to them to make it possible for them to open up their mining properties which have already been proven as far as the tonnages being delineated and the fact that we know the mineral is there.

Now our timber industry in that area may not be the greatest in the world, but it is of a reasonable consequence. It must, in due course, be considered as part of our total timber inventory of the province. We're going to have to harvest — there's no question about that. It's the only wise management thing to do — harvest the timber before it becomes decadent and is a total loss.

There are going to be developments in that area as soon as the railway is completed. There's no question but that there are going to be other developments. And there is area for other developments: it can be in certain agricultural endeavours; it can be recreational as far as the tourist industry is concerned. In your own constituency there are many areas in which you have very commendable recreational areas such as the hot springs and various mineral springs which are

[ Page 3442 ]

there — and the benefits are great.

What should really happen as far as the future of the railway is concerned? I am 100 per cent behind the railway being completed with its extensions into the Yukon. It's not going to cost what we originally estimated because of the inflation factor. But certainly I don't think you can expect any resource railway, as such, to be a paying proposition. Where the rewards and benefits come from is the fact that you can develop those resources within these areas. When you can develop the resources within these areas, this is being done not for the benefit of a board of management of the railway; it's being done for the people of British Columbia. Certainly while we may have to pay more for this — I'm going to pay more for my meat and my bread tomorrow than what I'm paying, today. This is an ongoing situation. We realize this.

I don't think there is anything that has been brought up by the Minister of Finance in his castigation of the former government in its management of this rail line that would really stand scrutiny if a proper, full investigation and a report with recommendations for proper management in the future.... I think it should be completely divorced from any government. I don't think that is the area in which government should operate.

I think that a full board of management, similar to what other railways have on the national basis.... These types of management boards then can be responsible to the people of the province, and not at the whim of any particular political party or any particular government. There would be no interference, They would operate under company law and not be excluded from any of the impact of following that law. I think political interference, probably from the very beginning back in 1912 when I was very small, has been one of the greatest millstones on the neck of this railway. It is my fondest hope and wish that this will be removed at the earliest possible time for the benefit of those of future generations who are following us.

MR. J.R. CHABOT (Columbia River): It is a very important bill we are debating, the bill of the Minister of Finance, who just left the chamber. It is one which deals with the increase of the British Columbia Railway Co. construction loan from $440 million to $650 million, in which the government is seeking the sum of $210 million for furtherance of the expansion of the B.C. Railway into northern British Columbia for a purpose of extracting that great bread basket of resources that is up there north of Prince George that is known as the top half of this province.

Prior to granting approval to this additional $210-million requirement, it is now necessary to discuss some of the financial affairs that are taking place and some of the statements made by the government and its representatives as well as some of the material that is being tabled in this House or has been made available to this House. I want to speak first of all about the prospectus that was filed in New York on May 22, 1975. On the front of this prospectus, which is for a $125-million borrowing, it says:

"These securities have not been approved or disapproved by the Securities and Exchange Commission; nor has the commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offence."

I suggest to you, Mr. Speaker, that when I read this prospectus, I find it to be erroneous, inaccurate, and not telling the full story. I look at the discussion of the British Columbia Railway Co. I look at the operating revenues from 1969 as a normal progression from $28 million of revenue onwards up in an annual progression of growth and revenue up to the year 1973 of $46 million, which is a normal progression for a railway such as this, a resource railway. I look at the operating expenses that have virtually doubled since that time although revenues have not virtually doubled. I look at the net profit of the railway as stated in this document that was filed in New York on May 22, 1975, and I find that in 1969 the railway made $764,000; in 1970 it made $897,000; in 1971 it made $990,000; in 1972 it made $992,000; and then lo and behold, we come to the error of the socialists — in 1973, a loss of $3,302,000, a loss all based on a uniform rate of depreciation.

We see what has happened to the railway since that socialist government has moved in and interfered with the management of that railroad, Mr. Speaker. We see what has happened — never mind the jiggery-pokery and the playing around with depreciation figures as was done by the Premier when he made his address here last Friday.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): Shame!

MR. CHABOT: The Member for Vancouver–Little Mountain says: "Shame!"

MR. CUMMINGS: It is a half-built railway.

MR. CHABOT: I am saying that here we are. On the same depreciation figures as the former government, we see it is running this railroad into the ground.

Speaking about some of the other statements that are made in the prospectus relative to the British Columbia Railway Co., it says:

"Results of operations of the railway were adversely affected during 1973 by strikes on the two national railways, two strikes of 12

[ Page 3443 ]

days' duration on the railway itself, wage settlements which were retroactive to the beginning of the year, and an extreme shortage of railway cars which limited operation of the railway.

"Also contributing to the net loss for the year were continuing increases in depreciation and interest on debt.

"Because of a decline in lumber shipments and further increase in wages, depreciation, interest on debt, higher field costs, strikes during the period November 5 to November 12, 1974, and November 21, 1974 to January 6, 1975, the railway is projecting a substantial increase in the net loss for the period ended December 31, 1974. Prior to the foregoing strikes, this loss had been estimated at $10 million."

A tripling of the loss from 1973 to the year 1974 up to $10 million. You'd almost think they picked that figure right out of thin air — that's the figure that the Member for Cariboo (Mr. Fraser) has been projecting for some considerable period of time without the knowledge of being a director of that railway.

Certainly, when they filed this prospectus in New York on May 22, 1975, the government knew full well that the loss was to be substantially greater than that which was declared. In fact, the loss was $26 million, 360 per cent greater than they led those people who are going to be loaning money to the B.C. Railway to believe. Yet on the front of the prospectus it says: "Any representation to the contrary (other than the truth) is a criminal offence." There is no doubt in my mind that there is something drastically wrong with the information that has been conveyed to those people who will be loaning us $125 million. There's no doubt in my mind that we need a judicial inquiry to examine the details surrounding the filing of this false prospectus in New York.

Prior to its filing in New York on May 22, 1975, the government was in the process of attempting to establish some form of scandal surrounding the B.C. Railway and its operation because we had that little Minister of Economic Development (Hon. Mr. Lauk) — that little no-growth, no-job Minister of Economic Development — who told us on April 9 of the great scandal that would be revealed in due course. He said: "I could give you the details" — he more or less implied that. "I could give you the details but I'll leave that for another day because I wouldn't want to take away from the glory of the Premier in revealing a magnitude of this calibre" — even though he still is unfortunately a director of B.C. Rail. He knew on April 9 that the government was preparing an attempt to mislead the people with the operation of the B.C. Railway. Yet he was unwilling to do so and we find a falsely erroneous prospectus filed in New York some considerable time after the Minister of Economic Development made his statements.

DEPUTY SPEAKER: Order, please. Before the Hon. Member proceeds, I would ask the Hon. Member to withdraw the imputation that there was an attempt by the government to mislead the people. This would include Members. I think that it could be phrased in another way.

MR. PHILLIPS: It's all right for Gary Lauk to do that but....

DEPUTY SPEAKER: Order, please. I just ask the Hon. Member to withdraw any imputation that there was any attempt by any Member of this House to mislead.

MR. CHABOT: No, I didn't suggest that the Premier....

DEPUTY SPEAKER: The important thing is to state the facts without making charges.

MR. CHABOT: Well, I have to make charges when I see that a prospectus doesn't tell the true facts as were known at the time it was filed, Mr. Speaker. There appeared to be an attempt on the part of the government to mislead someone.

DEPUTY SPEAKER: Order, please. I think the Hon. Member fails to get the direction from the Chair. You must withdraw any imputation that there is any attempt of any Member of this House to mislead either other Members of the House or otherwise. The Hon. Member should state the facts. What the facts state is another matter, but what the Hon. Member charges himself personally is a very different thing.

MR. CHABOT: I'm not accusing any individual Member of attempting to mislead anyone; I'm just accusing the government. The government does it all the time. It files erroneous press releases that don't tell the full story. It's a matter of record of what's taking place, Mr. Speaker. Could you read that note to me, too, please?

DEPUTY SPEAKER: It's a technical note from Hansard.

I'm sure that the Hon. Member is not imputing, then, any wrongdoing.

MR. CHABOT: No, I'm suggesting that the government doesn't tell all the facts. I'm suggesting that the government gives erroneous information, too.

[ Page 3444 ]

Mr. Speaker, I want to speak briefly about certain aspects of the B.C. Rail. First of all, during the debate of the estimates of the Minister of Economic Development, I talked about the scandalous overrun on the railcar plant at Squamish. At that time I was under the impression that the overrun was going to be 60 per cent, that the price had escalated from $5 million to $8 million.

After examining the annual report of B.C. Rail, I find that the overrun is going to be 80 per cent. The cost has progressed to $9 million from a projection of $5 million. That government over there has the gall, Mr. Speaker, to talk about overruns. On a car plant that took two years to build, here we have an 80 per cent overrun. It's a disgrace, an absolute disgrace! The railcar plant that was projected to open on January 1, 1974, took 18 months for it to eventually open. It's turned out one car; we haven't seen another car come off the assembly plant since. Yet there are....

MR. PHILLIPS: An 80 per cent overrun in two years.

MR. CHABOT: At the time that I was discussing the lack of knowledge and the ignorance of the Minister of Economic Development (Hon. Mr. Lauk) during his estimates, I suggested he should resign, and I meant it. He should resign because of his lack of knowledge of the railroad and the activities of that railroad.

The Minister who is not in the House now, Mr. Speaker, had made a statement in this House — and the people of this province had been told through that propaganda sheet B.C. Government News — that the plant was opened on March 25, 1975, 15 months after its projected opening. The people were led to believe that that railcar plant, which was to employ 200 or more people, would be rolling cars off at the rate of four per day. The Minister even said that it would be open sometime in June, about the middle of June. Yet he has the gall to stand in his place and say that he wanted to correct his statement, that at last a car had rolled out in the latter part of May. It rolled off the assembly line in Squamish.

Would you believe, Mr. Speaker, where that director and the executive vice-president of the B.C. Railway got his information? He got it from a newspaper he bought, from the Vancouver Province. He has no right, in my opinion, to be a director of the B.C. Railway because of his lack of knowledge, his lack of information and his utter stupidity to quote from a Vancouver newspaper.

No wonder there are problems on the B.C. Railway with the kind of board of management we have on the B.C. Railway, with the directors we have who sit in this Legislature — the Premier, the Minister of Economic Development and the Minister Without (Hon. Mr. Nunweiler). No wonder there are problems on that railroad when you have people who know as little about railroading as that.

The only man on that board that had any previous railway experience was the Minister of Labour (Hon. Mr. King). He told us the other day that he had 28 years of railroading experience. You know what happened to him, Mr. Speaker? He had a conflict of interests and he was fired — summarily dismissed by the Premier, by the President of the B.C. Railway. That's what happened to him.

MR. W.R. BENNETT (Leader of the Opposition): After the railway strike last year.

MR. CHABOT: That's right. After the railway strike it was quite evident that he had a clear-cut conflict of interests, and he was dismissed by the president of the railroad who is the Premier of this Province. Dismissed because of a serious conflict of interests.

I'll tell you, that whole railcar plant is a sheer disgrace with what has taken place in its establishment, and not only because of the delay. They stock-piled steel in anticipation of its opening on January 1, 1974. The steel was sitting there rusting for virtually two years because that incompetent board of directors was unable to get that railcar plant functional. Not only were they unable to get it functional, they even employed the senior staff of that railcar plant almost two years in advance. I guess all they had to do was play a little gin rummy or something like that, waiting for the job they'd been hired for.

MR. PHILLIPS: While the losses mounted up.

MR. CHABOT: That's right — while the taxpayers were picking up the bill because of the incompetence of that government and that board of directors.

Mr. Speaker, they have the gall to talk about the loss of $52.7 million on the BCR in the 15 years prior to 1972, which comes to approximately $3.5 million per year. Let us suggest that, based on their new figures of depreciation, this figure is correct. The railroad lost over $36 million this year — not $3.5 million, but $36 million. The projection for the future is not bright. It's not bright at all because of the lack of management we have on that railroad.

When the Premier made his speech on Friday he suggested that management had remained constant on the BCR. You know, that isn't current with the facts because the only top management on the railway....

I'm not going to talk about the former NDP candidate that's now on the board of directors, but I'm going to mention some of the top names. They were on the railway — efficient, knowledgeable railway people. There's only one left — Mack Joris is

[ Page 3445 ]

the only one that's left.

What's happened to Broadbent? He's long gone. What happened to Esterbrook? He's long gone. What happened to Miller? He's long gone. What happened to Wakeley? He's long gone, too. Now we have Trask. He's gone. And the government has the gall to suggest that there's been no political interference, Mr. Speaker? Certainly there's been political interference, and that's why the top management, the top personnel of that railway is gone, because of the political interference by that government over there. Three of the others that were prior to this government in top management have been brushed aside. Don't fire them; they might raise a stink. Oh, don't fire them; keep their salaries but give them no responsibilities. Roy Richmond, the industrial relations officer, has been given the sideways shuffle. Norm Bennett, the chief mechanical officer, has been given the sideways shuffle. And they say that there is no political interference. I suggest to you there has been massive political interference by that government over there with the BCR. No wonder there are problems of morale on that railway today.

I want to speak a little about a speech made by the Minister Without (Hon. Mr. Nunweiler) on Tuesday afternoon, June 10. He made a few statements about the railway and its operation. He talked about the railway being a resource railway. That was the opening remark: "I'd like to point out that the British Columbia Railway is a resource railway." If he knows anything about railways, he knows what kind of standards are built for resource railways. He goes on: "It should also be important to the people that it has good management." Why you've just fired all of the good management. It's all been fired.

"It should have good standards and a good quality of roadbed." The Member for South Peace River (Mr. Phillips) talked about the roadbed and talked about the statement made by Mr. Swanson of the BCR in 1970 in which he stated that the railway was in a safe condition. Yet the Member for Fort George (Hon. Mr. Nunweiler), the Minister Without, suggested that something is terribly wrong with the roadbed of that railway. He talked about the accidents on that extension from Fort St. John to Fort Nelson. Well, it's obvious the Minister is not prepared to compare figures with what takes place on other railroads. C.P. Railway, a first-class railway, probably has had as many accidents as that northern extension of that resource railway between Fort St, John and Fort Nelson in the operation of its coal trains between Sparwood and Roberts Bank. There was a spell there when they were dumping a coal train almost on a daily basis — on a high-grade railroad. They were losing coal trains almost on a daily basis. It's not unusual for a coal train to hit the ditch on a weekly basis. They've had severe problems on a first-class railroad.

Interjections.

MR. CHABOT: No, I'm suggesting to you that the main line from Golden through to Roberts Bank is a first-class railroad. Now, with the upgrading of the Windermere subdivision, that is a first-class railroad as well. And I'll talk about that a little later.

Yet we have problems with the native people in the north which we're unable to resolve. The Minister Without apparently wants to talk to them, providing they meet on certain guidelines established by him. They must stop the blockade, according to the Minister, before he'll discuss anything with them. Well, if it's your responsibility to deal with native people, I think you should deal with them, not beat around the bush. You've even engaged an expert, a former man from Ottawa. Frank Howard has been engaged. He's there to solve all the native problems in British Columbia, apparently. I don't know what his role is, Mr. Speaker, outside of touring through the library and maybe passing the peace pipe around; I don't know what else he's been doing.

But there are serious problems up there, and the native people want this government to deal with the problem of expropriation of land. There was an agreement in place which the government, because of its firing of its management, didn't finalize. They didn't get the thing signed. There was an acceptable agreement in place that wasn't signed because this government was too busy firing the top management from the B.C. Railway. And they have the gall to say that the former government didn't negotiate on the matter of the land on the extension to the Dease Lake.

Now this article has been quoted before, but I'll quote it in a different context. It has to do with the potential tonnage that could be derived on the extension to Dease Lake.

This individual who is the geologist-engineer consultant talks about how busy he is. The headline is: "Is Government Cutting Its Own Throat on Railway?

"Seraphim who says he is so busy he is turning away work, hasn't done anything in B.C. this year, although he has made many trips outside the province and outside Canada, including four to Arizona. Next week he leaves for Alaska."

He talks about the various ore bodies that exist in the vicinity of rail line extension to Dease Lake. He talks about the number of railway cars, and the tonnage which would be generated by the establishment of these mines. He talks about the Stewart-Cassiar asbestos and about the 10 railway cars of products that would be generated up there. He talks about the mining policies of the government. He talks about the Hekla Silver Standard mine at Shaft Creek. He talks about the 13 railway cars of concentrate that would be available to the railway on

[ Page 3446 ]

a daily basis.

Talking about Shaft Creek, the people in the north and the people of British Columbia have been shafted by this government and its Bill 31.

He talks about Stikine copper, and another 20 carloads of concentrate, which is a conservative figure here, he says, on the daily basis. So in all we have a projected 43 cars of mineral production on the extension, available if the government was to remove its mine-destroying legislation, Bill 31.

After examining the annual report of the railway, Mr. Speaker, I find that 43 cars is an average train on that railroad. One additional train per day would be generated if the government was willing to remove this mine-destroying legislation it has on the books.

Now there have been a few statements made by a variety of people regarding the Dease Lake extension, and one was made by the Member for Skeena (Mr. Dent). He talked about the tremendous growth that these extensions and this northern agreement, in principle, which has been signed with great glee and with great expectations. I can remember the glowing press releases from the Minister of Economic Development (Hon. Mr. Lauk) after he signed all these agreements — the master agreement with the government was a transportation agreement in principle. I recall very vividly how he talked about the great development that was taking place. Since that time what is taking place is the destruction of the potential for growth in northern British Columbia.

But I'll just quote very briefly, Mr. Speaker, from one of his glowing speeches, one made on February 13, 1974, slightly over a year ago. He talked about the growth of the extension. He talked about the agreement in principle at that time — the transportation one is what I am talking about. It says: "First of all the rail line, as you know, goes from Terrace, north to the Nass Valley, and then to Meziadin Lake, then finally to Groundhog, which is a point on the proposed B.C. Rail run. It is to be built in three stages: the first stage from Terrace to the Nass Valley; the second stage from the Nass to Meziadin Lake; the third stage from Meziadin to Groundhog."

Mr. Speaker, the first stage of that happens to be where Howard Paish has a private hunting reserve, given by this government.

"The first stage is scheduled to be completed around 1976, in about two years. Work has begun on that rail line. Surveying is going on apace, and construction crews are beginning to be assembled. The actual construction is now about to begin." February 13, 1974.

Where is that construction? That tremendous growth that you and your Minister of Economic Development and that government over there talked in such glowing terms about — where is it? "The actual construction is now about to begin" — those are the words from the Member for Skeena (Mr. Dent). You wait until those people up in his constituency hear that nothing is taking place, when on February 13, 1974, he suggested that work was about to begin.

Nothing has taken place, Mr. Speaker. Absolutely nothing. Is it because of severe distrust of this government by the national government of this country? Is that the reason why there has never been a transportation agreement in the north? Is there a distrust by the national government?

We have other statements here by the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) — the tsar of everything, the architect of their downfall, too, Mr. Speaker.

He talked about the extension from Fort St. James on February 13, 1975. It must have been an historic railway date because the Minister of Lands, Forests and Water Resources says at one point, Mr. Speaker: "We actually stopped rail construction on the line that was being built from Fort St. James to Dease Lake on the Bennett run."

"We actually stopped it." he said. So, in other words, they are suggesting that the overruns are the responsibility of the former government, when they in fact shut it down. That was the Minister of Lands Forests and Water Resources (Hon. Mr. Williams) speaking about 14 months ago. I wonder, Mr. Speaker, on this contract for the Dease Lake extension awarded in August, 1972, what part of the capital used on this part of the extension was the responsibility of the present director? It appears to me to be substantial. In fact, when the Minister of Lands, Forests and Water Resources said that it was shut down, I wonder as well, when I look at the agreement in principle negotiated between the national government, signed by Jean Marchand, and signed by that Minister of no-growth Economic Development, whether the federal government approved of this extension where they are going to share in the costs of this extension as agreed to in the agreement in principle.

The Premier made a great to-do about the matter of depreciation. He hangs his hat on depreciation, in fact, in his make-believe scandal.

AN HON. MEMBER: He hangs his shirt on it, too.

MR. CHABOT: Yes he is hanging his shirt on it, too. He is liable to lose his shirt too on this issue. Yet, when I examine the Minty report, Mr. Speaker, which I have here somewhere, it says in section 12: "The BCR is said to have employed rates used by the CPR in its operation." Depreciation rates used by the BCR are the same as those being used by the Canadian Pacific Railway, a railway that has been subsidized substantially by the taxpayers of this nation. Then he suggests that there is something wrong with the

[ Page 3447 ]

depreciation rates of the railway as practised by the former government since 1956.

Time does not permit me to go into some of the statements made by the Minister of Economic Development when in April 5, 1974, he again talked about the projection of load factor, the kind of load factor that would be generated by the extension of the railway to the north. Oh, yes, he was very ambitious in those days, Mr. Speaker. He is not as ambitious today.

I look at this agreement in principle on joint transportation and development programmes in northern British Columbia and it talks about some of the extensions you talked about, Mr. Member for Skeena (Mr. Dent) — Clapham to Telegraph Creek, Groundhog-Terrace connection. He talks about the joint financial participation by the national government and the various extensions and the kind of federal contribution share. Nothing has taken place on this agreement signed in principle since 1973. We have the general agreement as well, signed by the Minister of Economic Development. Nothing has happened there either.

It goes on. I am just going to quote very briefly from it. In talking about some of the projections, it says:

"The two governments will use their best efforts to ensure that the resources of the region are processed within the province rather than exported in their raw state, that the necessary social and community infrastructure is developed consistent with each government's area of responsibility."

It says:

"The two governments will share equally in the capital cost of the construction of a railway line between the CN transcontinental line at Ashcroft and the BCR line at Clinton, such a line to be operated by CN with B.C. Rail to have equal traffic rights and perpetual running rights from Clinton to Ashcroft, and with CP Rail to have emergency rights to operate trains over this line. The Government of British Columbia, Canada, is subject to the repayment of the capital contribution from operating profits generated by this line."

Now where is that extension, Mr. Speaker? Where is that extension between Clinton and Ashcroft? Has the first sod been turned? Certainly not. Nothing has taken place since this agreement was signed in principle in 1973. It gives a projection of the development. It talks about Fort St. James to Dease Lake, 1975; Terrace to Nass River, 1976; Nass River to Meziadin Lake, 1978; Meziadin Lake to connection in 1980.

There is no evidence whatsoever that anything is taking place, but one of the things in the agreement in principle that bothers me is this one, item 6. It says:

"British Columbia waives its prior claim for federal construction grants towards former PGE lines in recognition of the funding arrangements and considerations which were effective for the northern railway development programme."

Now the government has clearly indicated that it is prepared to waive the right to tens of millions of dollars of construction grants that are due that railroad. It is clearly spelled out here. They have destroyed, in my opinion, their opportunity of getting any financial benefits from the CN if they don't go ahead with a finalized agreement on the extension. You have indicated very clearly that you aren't willing to fight on for that grant of $25,000 a mile that is due that railroad.

With all the kinds of statements that have been made here, primarily by the Premier, Mr. Speaker, much inaccurate information relative to the B.C. Rail, there's no wonder there is labour unrest on that railroad. With the kind of statements that are being made — inflammatory statements — the kind of erroneous information, the kind of political interference that's taking place on that railroad, no wonder the morale is low on the railroad with the kind of interference we've seen since 1972. It appears to me, Mr. Speaker, that this government merely wants to refight old battles dealing with B.C. Rail. It's just a cheap political speech on the part of the Premier last Friday — just jiggery-pokery with the figures on depreciation, that's all it is.

MR. BENNETT: A smokescreen.

MR. CHABOT: Exactly, that's what it is. It's a straight smokescreen to hide your losses — to hide your $32 million loss. That's a loser government, Mr. Speaker.

Interjection.

MR. CHABOT: ICBC, $34 million....

Interjections.

MR. CHABOT: No, $36 million; B.C. Hydro Transit, $17 million; B.C. Ferry Authority, $25 million; Levi overrun $103 million — this is a loser government. All he's trying to do is generate a smokescreen to hide your inefficiency and to hide your lack of competence and to hide your losses. You try to suggest that all governments make mistakes — all governments made mistakes.

I was shocked because I've always been one to hold a Premier of a province in great awe....

Interjection.

[ Page 3448 ]

MR. CHABOT: Mr. Speaker, I'm surprised that the Premier would use the kind of deceitful figures and deceitful tactics that he's utilized...

SOME HON. MEMBERS: Oh, oh!

MR.CHABOT: ...in trying to create a political issue.

DEPUTY SPEAKER: Order, please. I just want to draw to the attention of the Hon. Member that his green light is on.

MR. CHABOT: Oh. Well, Mr. Speaker, I want to say this. No wonder there is a railcar shortage on that railroad. No wonder there is chaos and confusion in this province today with the lack of competence and the irresponsible statements made by that government and its Premier.

MR. N.R. MORRISON (Victoria): Mr. Speaker, may I...?

Interjection.

DEPUTY SPEAKER: Order, please. There was a little problem technically with the mike — it's on now.

Interjections.

MR. MORRISON: Mr. Speaker, before commencing, I would like to comment for the record that the Premier was standing there with his shoe off. Was he preparing to pound the desk? Did you have some intention with the shoe?

HON. MR. BARRETT: I found a rock in my shoe. (Laughter.)

MRS. JORDAN: You've got a rock in your railroad, too.

MR. MORRISON: I understand there's some significance in ....

Interjections.

MR. MORRISON: Would it be a fair question to ask, concerning the Premier's kidney stone, if he had any other stones x-rayed? I'm referring to the rocks in his head concerning the railroad.

Interjections.

MR. MORRISON: He doesn't want any sympathy.

DEPUTY SPEAKER: Would the Hon. Member speak to the principle of the bill, please?

MR. MORRISON: It, too, will pass.

Interjections.

MR. MORRISON: We're here today debating Bill 27, which is to give this government an increase in its borrowing abilities from $440 million to $650 million.

AN HON. MEMBER: How much?

MR. MORRISON: $650 million.

MRS. JORDAN: That ain't hay!

MR. MORRISON: That's a lot of money.

Interjections.

MR. MORRISON: Oh, I would think the Premier fully intends to file a corrected prospectus with the New York Stock Exchange. I'm sure he wouldn't like to mislead those people who are asked to invest additional millions of dollars for the need of this railroad.

Interjection.

MR. MORRISON: I'm sure they'd like to check it out very carefully before they did accept the report from us — any alteration.

Today, although we are debating the increase of this money, all of us know the need for the railroad in this province. There has never been any question in any speaker's mind as to the fact that this railroad is necessary for the lifeblood of this province and for the growth.

Interjections.

DEPUTY SPEAKER: Order, please. I would ask the Hon. Members not to interrupt the First Member for Victoria. He has a speech he would like to make.

MR. MORRISON: I also notice that the Premier was travelling on that particular railroad in the steam engine. I noticed he was up front where he likes to be, huffin' and puffin' (Laughter.) He had along with him, I see, the former member of the board who I assume was shoveling the coal. I won't make any other reference to the things that are shoveled around here.

But as I was saying, none of us has quarreled with the need for the railroad. We all appreciate what this railroad has done for this province and what it will do for us in the future. Without this railroad, the people who are living in the north today would not be serviced adequately. This is a resource railroad. Never

[ Page 3449 ]

let us forget what this railroad was built for: the resources of this province; the people of this province; the food and energy that has to come from all areas to be serviced in Vancouver and the reverse — to service those people who live in the north.

All of us have been told the history of this railroad. In this debate it has been alluded to. But we've all agreed that it was necessary regardless of the cost. Regardless of the method of how we've gone into the working on this railroad, the need was there, and the need will continue throughout the years. Regardless of cost, it is necessary to open up this province, and this railroad was the key to the opening of the province. I don't think anybody quarrels with the need, and particularly those who are in the north, who are using it.

Frankly, I don't profess to know a great deal about railroads. I'm not going to stand here and try to profess to be an expert on railroads, but I do understand something about the operation of businesses. I'm dissatisfied with the manner in which the Premier has operated this railroad since he became the president. I associate myself with the remarks of the other Members in this House who have suggested that the Premier should resign and that we should employ people who are experts in their field — who are experts in the railroad field — and that those people should be given not only the authority but the responsibility that goes with that authority to carry out the directions of this railroad for the people of this province.

Interjection.

MR. MORRISON: Frankly, I couldn't agree with you more that that's the way it perhaps should have been.

It disturbs me to see this railroad running this way, as it disturbs me to see all the other Crown corporations operating the way they are. They're in complete disarray. The accounting principles that we're quarrelling about today...really, if you hire three lawyers you get nine opinions on any subject and if you hire three accountants you're going to get at least three different opinions.

MR. WALLACE: Now you've got Gardom all upset.

MR. MORRISON: Well, I realize that.

MR. BENNETT: He's never been able to give nine opinions.

MR. MORRISON: Well he's certainly never been able to collect for nine opinions. (Laughter.) That doesn't mean he isn't prepared to give them.

But I do believe this railway should have a new board of directors, and the sooner the better. The Premier in his discussions here in this House has alluded to the fact that he's prepared to resign, and I applaud that.

MR. PHILLIPS: He said in Hansard he is going to resign and pass it over to the Minister of Transport and Communications (Hon. Mr. Strachan).

SOME HON. MEMBERS: Oh, no!

MR. MORRISON: Well, really, that's out of the frying pan into the fire. I mean if he proposes to elect the Minister of Transport and Communications as the president of the railroad I shudder to think what the losses will be within one year on ICBC under his direction with the $34 million loss.

MR. BENNETT: $36 million.

MR. MORRISON: $36 million loss.

Interjection.

MR. MORRISON: Yes, and he promised there never would be a subsidy in ICBC.

AN HON. MEMBER: How much is the subsidy going to be for ICBC?

MR. MORRISON: Who knows? $100 million? $150 million? Even he doesn't know what it's going to be. But the Minister of Transport and Communications doesn't only have one error to his credit; he has many other errors to his credit. Look what he's done to the transportation system that this island needs — to the ferry system. Granted that the ferry system doesn't come under this bill, and we're not talking about the money that is necessary under this bill for the transportation to Vancouver Island, but there is a fair comparison: the people here on Vancouver Island need the ferry system just as desperately as those people who live in the interior and in your riding.

I also have here — and I would like to give you some reports from it — a report that was commissioned by the government from the Price Waterhouse Co.

MR. PHILLIPS: On the recommendation of Minty.

MR. MORRISON: On the Minty recommendation, that's correct. It was received and filed in this House on September 18th, 1973.

MR. PHILLIPS: Are they a good firm?

[ Page 3450 ]

MR. MORRISON: Yes, they're a highly recognized firm of chartered accountants.

DEPUTY SPEAKER: Order, please! I would ask the Hon. Members not to enter into this form of debate. I would ask the Hon. Member to say his speech and I would ask the other Hon. Members not to interrupt.

MR. PHILLIPS: They provided the prospectus, too!

MR. MORRISON: That's correct. They sent that prospectus to New York. But on August 31, 1973, in this prospectus....

Interjection.

MR. MORRISON: I would assume the government requested it.

DEPUTY SPEAKER: Order, please! The Hon. Minister of Health on a point of order.

HON. MR. COCKE: Mr. Speaker, on a point of order, most of the Members in the Socred Party have spoken. What they're doing in order to protract this Member's speech, is continual kibitzing. I think it's taking a very serious matter lightly, and the Leader of the Opposition is trying to smokescreen a very serious situation.

MR. BENNETT: On the point of order, I don't take kindly to the Minister of Health trying to put interpretation on what's on any Member's speech. Some of the worst speeches in this House have come from him and his colleagues, and I don't think he has any reason to editorialize. There is a very serious question before this House — and what is this? That we have one financial report in New York to borrow money, and another financial report in B.C....

DEPUTY SPEAKER: Order, please! The Hon. Leader of the Opposition caused me to break my gavel. (Laughter.)

Order, please! Would the Hon. Leader of the Opposition please be seated? I wish to comment on the point of order.

Order, please! Hon. Members must take their seats!

[Deputy Speaker rises.]

Hon. Members, I just want to comment on the point of order. The point of order is well taken in this respect, that when an Hon. Member is on his feet speaking, he is supposedly making his own speech and therefore I think it's unbecoming procedure for him to waste a few minutes for someone to give him the words. Rather, he should speak himself.

Interjections.

DEPUTY SPEAKER: Order, please! The Hon. Members are much too excited. I've not finished my remarks.

Interjections.

DEPUTY SPEAKER: Order, please! Would the Hon. Member be seated? I'm just waiting for adequate quiet. The point is that the Hon. Member is on his feet to make his speech and he should not be interrupted by other Members. That's the point. Now would the Hon. Member proceed?

[Deputy Speaker resumes his seat.]

MR. MORRISON: Mr. Speaker, I appreciate those kind words from you and I would like to comment if I may on the point of order that was raised by the Hon. Minister of defence across the way. He did say this is a serious subject, and it is a serious subject, and he did say that it's a smokescreen, but we know who the smokescreen's from. We know who the engineer is and who the huff and puff is, we know where the smokescreen is. There isn't any doubt about it.

Interjection.

MR. MORRISON: This is a serious subject and it is late in the day, and it is late in the sitting, this is the 11th sitting in this session and I hope you're aware of that. There's no question that everybody's tempers are getting short, and there's no wonder that they're getting short because at this time of the session, we are debating some of the most important bills ahead of us, bills that should have been brought in months ago. Bills such as this one, Bill 27, which has been on the order paper for weeks. There's no wonder that people's tempers are short and they're irritable, and they have every right to be irritable — absolutely every right.

Interjections.

MR. MORRISON: Are you taking directions from somebody else now, or do you take your own orders?

DEPUTY SPEAKER: Will the Hon. Member proceed? The Chair will rule on points of order as they arise.

MR. MORRISON: Now this report of Price Waterhouse and Co. Is dated August 31, 1973, and the letter is sent to Mr. G.S. Bryson, Deputy Minister

[ Page 3451 ]

of Finance, Province of British Columbia, Victoria, B.C. It says:

"Here is the report, the review of financial reporting and control practices of the British Columbia Railway. Our study was carried out in accordance with your instructions to review certain of the matters raised in the special report of the comptroller-general dated March 29, 1973 — the report commonly known as the Minty report.

"Our terms of reference exclude any requirements for us to examine the financing of the railway, or its physical operation, and it was understood that other consultants had been retained to examine overall corporate planning and organization, construction estimating, bidding and cost procedures. In all other respects there were no restrictions placed on our review and we were requested to exercise our own judgment in determining its scope."

That's the Price Waterhouse Co.

"We advised you that we did not consider it appropriate to undertake a detailed financial audit of the railway accounts, but that, in the light of all circumstances, a management-oriented review designed to produce constructive recommendations for improvement would be desirable. To this end, it was agreed with you that the main emphasis of our study would be placed upon such matters as management reporting, financial planning (budgets ) and control, accounting practices and systems, electronic data-processing, internal audit and other accounting control practices, finance division organization and personnel practices."

There is much more to this letter, and I am not going to read it all, but I would like you to sort of get to the end of it.

"We would also like to note that while the report of the comptroller-general raised a number of valid concerns about the effectiveness of the railway's financial systems and controls, in other instances our more-detailed study placed a different perspective on the comments and criticism that were made."

"Different" — note that. Different perspective — different from the Minty report. Don't miss that point.

Section 1 does give a summary of some of the recommendations. It says:

"Many of the financial control and administrative practices of the British Columbia Railway were adopted at a time when operations were smaller and less complex...."

Of course, that leads us into the history of the railroad, the need for it, why it went ahead and how some of those procedures were adopted and adapted as the railroad grew.

"...and they could be controlled on the basis of personal knowledge and contact by senior executives."

That contact, it would appear, has been lost under the present administration because the senior executives are political. They are not aware of concerned about the day-to-day operation of their railroad, nor are they competent to judge on it, frankly.

"These practices, in many instances, have not kept pace with the growth and the change of the railroad."

That is a valid criticism. There is now a need for important improvements to be made, particularly in the area of financial planning and control systems because of the growth.

"This report is focused upon areas of weakness and opportunities for improvement, and it makes no attempt to describe the many administrative and operating practices of the railway which were found to be well-conceived and effective."

I would like you to pay particular attention to that note: "...it makes no attempt to describe the many administrative and operating practices of the railway which were found to be well-conceived and effective."

MR. CHABOT: That's a compliment.

MR. MORRISON: Yes.

AN HON. MEMBER: Is that the Price Waterhouse report?

MR. R.H. McCLELLAND (Langley): Is that like saying they were just ordered to find something wrong?

MR. MORRISON: Sounds that way.

"However, we would like to emphasize that during the course of our review, we were very much impressed by the high level of employee morale..."

MR. MORRISON:

"...the dedication of the staff to the company, and their obvious willingness to work hard to discharge their duties and their responsibilities."

MR. PHILLIPS: It hardly sounds like a charge of fraud to me.

MR. MORRISON: Remember, these are the employees who have been with this company for

[ Page 3452 ]

many years, and running it, operating it.

MR. RICHTER: Is that a charge of misrepresentation?

MR. MORRISON: It certainly doesn't sound like it.

MR. RICHTER: Is that a charge of cooking the books — a charge of fraud?

AN HON. MEMBER: The Premier says it is buried.

MR. MORRISON:

"The findings and recommendations arising from our review are set out in detail in the following sections of this report, and 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 railroad."

One of their suggestions, of course, was to conduct a review of depreciation practices, and they did in fact do that. But there is no indication that the former practices were improper or irregular.

MR. BENNETT: Isn't that something the Premier hung his whole case on?

MR. MORRISON: That's correct. He hung his whole case on depreciation.

They did suggest that they assign responsibility and authority to senior employees of the railway to initiate a company-wide systems improvement programme — senior employees of the company.

HON. W.S. KING (Minister of Labour): You're reading quite well, Newell.

MR. MORRISON: Thank you. I went to school, just as you did.

AN HON. MEMBER: He's out of order.

MR. PHILLIPS: You don't like to hear the report that your Premier asked for — the one that says there is nothing wrong with the bookkeeping. You don't want to know the facts, do you? You got fired. You got fired off the railroad.

DEPUTY SPEAKER: Order, please.

Interjections.

DEPUTY SPEAKER: Order, please.

MR. MORRISON: But one of the items which I particularly want to draw to your attention, Mr. Speaker, is the recommendation that they establish the position....

DEPUTY SPEAKER: Order, please. Before the Hon. Member proceeds, it might be well to remind the Hon. Members on both sides of the House of standing order 17(2). "When a Member is speaking, no Member shall pass between him and the chair, nor interrupt him, except to raise a point of order." I would ask the Hon. Members to observe this standing order.

MR. MORRISON: One of the major recommendations which I'd like to draw to your attention was to establish the position of a vice-president of finance and administration to be responsible for all aspects of financial management, and the administration of purchasing, personnel, systems and data-processing functions of the railway, and to establish a financial planning and analysis section under the direction of that vice-president — that's a vice-president of finance and administration. They also suggested that they should carry out a detailed view of salary levels in the railway, and develop and apply improved salary administration practices.

Section 4 of this report...have you got the report there? Well, maybe you'd like to turn to section 4, page 14.

MRS. JORDAN: Why don't you read it?

MR. BENNETT: Not like that selective reading we have had.

MR. MORRISON: The accounting practices:

"In conjunction with our assessment of the financial control and reporting systems of the British Columbia Railway, we reviewed certain of the underlying accounting practices of the company. Our comments concerning these practices, together with recommendations for improvement, are set out in the following sections."

Interjections.

MR. MORRISON: No, as a matter of fact, if you care to go through that whole report, and the section which you say you have in front of you, Mr. Minister of defence, you'll find that in the depreciation section they did not find anything wrong. They found that the accounting practices were standard, the allowances for depreciation were normal — they conformed with accepted accounting practices. This report, which was commissioned by this government, shows that the depreciation practices were not the

[ Page 3453 ]

least bit unusual.

MR. PHILLIPS: So, where is your scandal?

MR. MORRISON: However, what they did suggest — and I think it's important — was that they conduct a comprehensive review of depreciation practices, and develop a clear statement of depreciation objectives and policies. Here, I suggest, is where the difference comes — that they have now decided to change their objectives for this railway. Not to change, necessarily, the accounting procedures; not to change, necessarily, the depreciation, but to change the objectives of this railway.

Interjections.

MR. MORRISON: That's right — hide behind the statement that no railroad makes money.

"We 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 should include definitions of what assets are to be capitalized, the value to be placed on them, and the practices to be followed in their depreciation and eventual retirement.

"Once established, these policies should be applied uniformly to all capital assets."

I suggest that this is one of the critical parts of this whole report — that this government has chosen to change the direction of the accounting practices for their own reasons. Not that there was something wrong; not that there was something irregular, but strictly because they want to develop a new basis of comparison.

Section 8 talks about the organization of the finance division and the salary administration. It says that they recommend the establishment of the position of vice-president of finance and administration to establish a financial planning and analysis section, under the direction of the vice-president. It talks then about the salary administration:

"During the course of our review, which took us into many of the department and sections of the railway, much dissatisfaction was expressed concerning present salary levels. There has been adjustment of salaries since January 1, 1972, and it is believed that many employees' salaries paid do not reflect the true worth of their present positions with the company. "

Now that means that the president who was then in charge of the railway, and those people administering his policies, had not made any salary revisions since 1972, but they had operated that railway since September 1972. It says: "The present system of salary administration, reportedly, is patterned after that of the Canadian Pacific Railway."

Salaries of non-union employees are determined on three programmes. I won't go into the details of those programmes. Suffice it to say that there were some salary changes made, but also suffice it to say that there was a serious strike on that railroad, a serious strike which affected the economy of this whole province. Those that wondered about the need of this railroad prior to that strike were brought up short and suddenly were conscious on a day-to-day basis of how important this railroad was to their economy and to the communities that this railroad served.

Interjections.

MR. MORRISON: Well, that's right. They found out that the railroad was an absolute necessity. I believe that it is important for those of us in this House to realize that this report, received in September, 1973, commissioned by the government and given by the Price Waterhouse Co. gives the former railroad a clear bill of health, an absolutely clear bill of health. But it does show the change in direction that was asked for and has now been followed.

Interjections.

MR. McCLELLAND: Do you want to go for supper?

Interjections.

MR. McCLELLAND: Okay, I thought you would.

It is interesting to watch the Premier attempting to claw his way out of a hole. He's proved to be a bungling Premier in charge of a bungling government. What's more, the incompetence of that government is becoming a joke around this province. Now we see the Premier grasping at straws to get out of the hole he is in, clutching at half-truths, clutching at distortions, innuendoes, giving selective passages from various reports in an attempt to build what has proved to be now a very weak case against a railroad that is the lifeline and lifeblood of this province.

The Economic Development Minister (Hon. Mr. Lauk), a man who should be interested in providing the people of this province with jobs, stood in this House the other day and talked about a scandal.

Well, the scandal, Mr. Speaker....

Interjection.

MR. McCLELLAND: Yes, April 10 — and since. Just the other day as well.

[ Page 3454 ]

Interjection.

MR. McCLELLAND: The scandal, Mr. Speaker, is the mismanagement of the British Columbia Railway since the election of this government.

You know, the previous speaker, the First Member for Victoria (Mr. Morrison) referred to the strike on the railroad, a disastrous strike which had disastrous effects for many parts of this province. You know, the official opposition decided at that time that it would send a team of its MLAs out around the province to talk to the people regarding that strike, and to find out what was going on.

AN HON. MEMBER: To talk to the men on the railway.

MR. McCLELLAND: To talk to the men on the railway, to talk to the community people, talk to the chambers of commerce, talk to the mayors, talk to the aldermen, talk to the school boards, talk to the businessmen, talk to the people who were really affected, Mr. Speaker, by this strike.

AN HON. MEMBER: Little sawmills.

MR. McCLELLAND: Sure, the little sawmill operators who were forced out of business, Mr. Speaker, in referring....

Interjections.

DEPUTY SPEAKER: Order, please. Would the Hon. Member for Langley proceed, please?

MR. McCLELLAND: Mr. Speaker, the First Member for Victoria (Mr. Morrison) in referring to the Price Waterhouse report of August, 1973, I believe, quoted a passage in there in which Price Waterhouse suggested that morale in the railroad was high. Yet what did we find out just a year and a couple of months later, in December, 1974, when the strike was on, and when the Premier skipped the country again to go to China — when the Premier skipped the country as he does every time this government is in trouble? What did we find out then, Mr. Speaker? Just a year and a few months later, after that report by Price Waterhouse had indicated that morale was at a very high level in the BCR, we find in December, as the Member will attest, and I read from a report that was given by those Members: "In talking to B.C. Railway employees....

Interjections.

[Mr. Speaker in the chair.]

MR. McCLELLAND: This is by the Member for South Peace River (Mr. Phillips) a report of meetings that he had: "It appears, based on what I was told by those employees, that there is a total breakdown of confidence in the management of the railway on the part of its employees." That's just about 14 or 15 months after that report had indicated a high level of moral in the BCR.

I quote again from the report.

"It was suggested to me over and over again that the management of the railway is in a state of chaos, because competency has gone, because railroad men have been replaced by NDP political hacks who know nothing about railroading and keep their office doors shut to the people who run the railway."

Again, from Prince George, talking again to employees on the railroad:

"Loss of respect for the management of the railway, no communication, breakdown in grievance procedures and charges of political appointments at the expense of good management."

Again and again and again, Mr. Chairman, as our Members travelled around this province at that time of strife on the railway, we found the same theme occurring over and over again. That theme was that the railway employees lost confidence in the management of their British Columbia Railway, just a year and a few months after Price Waterhouse reported that morale on the railway was at a very high level. Replacement of railroad men with political hacks in position after position — that's what the people on the railroad said, Mr. Speaker, not us...

HON. MR. BARRETT: Name one.

MR. McCLELLAND: ...in junior, middle and senior management of this railway.

HON. MR. BARRETT: Name one, you smear artist.

MR. McCLELLAND: The Member for Cowichan-Malahat, the Minister of Transport and Communications (Hon. MR. Strachan), got up in this House the other evening, and talk about smear! The Minister of Transport and Communications stood in this House the other night and did the usual pitiful smear job by that born loser. He's the man who has the Midas touch in reverse — everything he touches turns to dross.

MR. BENNETT: Leadfinger. (Laughter.)

MR. McCLELLAND: He's the man who took ICBC; the man who stood in this House to condemn the B.C. Railway, which is the lifeline of this province; the man who took ICBC, a socialist dream,

[ Page 3455 ]

and turned it into a nightmare of mismanagement — a horrible nightmare — for the people of this province and for the employees, as we saw today, forced to march on Victoria to bring their grievances before this government because of the Minister's mismanagement. A horrible nightmare of political interference, waste, mismanagement, scandalous subsidies from the public purse, and that man gets up and talks about mismanagement of the railroad.

He talks about the opening up of the other parts of this province under his great government.

HON. MR. LEA: We did not ask for a confession.

MR. McCLELLAND: He says this government has opened up the north country. Good grief! What a foolish statement from a foolish Minister, Mr. Speaker. From a government that has destroyed the mining industry in the north, and all over British Columbia, a government that confiscated the car insurance industry, a government that has throttled the independent adjusters' industry in this province and is now threatening to run out the private sector in the auto body business, in the auto parts industry....

HON. MR. BARRETT: You've got your hands in your pockets and everything else.

MR. McCLELLAND: Oh, I'm sorry, Mr. Speaker.

MRS. JORDAN: Get your hands out of the people's pockets.

MR. McCLELLAND: It's a government, Mr. Speaker, that has literally driven out...

MRS. JORDAN: Get your hands out of the people's pockets.

MR. McCLELLAND: ...the petroleum exploration industry...

Interjections.

MR. SPEAKER: Order, please.

HON. MR. BARRETT: Order! One at a time.

MRS. JORDAN: Get your hands out of the people's pockets.

MR. SPEAKER: Order, order.

MR. McCLELLAND: ...a government that has literally destroyed investor confidence in this province. This is a no-growth government. While 100,000 people are out of work in this province, our no-growth Premier gets his bags packed for another junket — another junket. He skips the country again when his government is in trouble.

MRS. JORDAN: At the taxpayers' expense.

MR. McCLELLAND: He's off to see the changing of the guard in London while B.C. is still reeling from the knockout punch that his government has delivered to the economy of this province.

The only Member to make any sense on that side of the House in this whole debate on Bill 27 was the Member for Kamloops (Mr. G.H. Anderson). The Member for Kamloops made good sense when he got up and spoke and said — and I quote from Hansard — "One of the finest things the previous government did was to complete that railroad. It was a good decision."

Interjection.

MR. McCLELLAND: I'm still quoting. Yes, no wonder the Premier got up and told him: "Sit down and shut up." "Sit down and shut up," he said.

Interjections.

MR. McCLELLAND: To continue the quote, Mr. Speaker, the Member for Kamloops said: "It was a good decision. It was a decision that had to be made, and it was made. Once again, I compliment them for that." For once somebody on the government side of the House decides to tell the truth. I compliment the Member for Kamloops for that.

MR. SPEAKER: Order, please. I would ask the Hon. Member to withdraw the statement: "For once somebody on the government side..."

MR. McCLELLAND: I withdraw "for once."

MR. SPEAKER: Thank you.

Mr. McClelland moves adjournment of the debate.

Motion approved.

Presenting reports.

HON. MR. LEA: Mr. Speaker, I ask leave to file a report that I read to the House this morning.

Leave granted.

Hon. Mr. Macdonald presented the annual report of the Department of Corrections, 1974; the report of the Law Reform Commission of British Columbia on

[ Page 3456 ]

the costs of unsuccessful lay litigants; and the Law Reform Commission of British Columbia reports on the law of agency, 1 and 2.

Hon. Mr. Lorimer files answers to questions. (See appendix.)

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 5:57 p.m.

APPENDIX

39 Mr. Bennett asked the Hon. the Minister of Municipal Affairs the following questions:

With reference to British Columbia Hydro and Power Authority urban transportation—

1. What was the total expenditure for the calendar year ended December 31, 1974?
           2. What was the total revenue for the calendar year ended December 31, 1974?

The Hon. J. G. Lorimer replied as follows:

"1. Operating, $38,698,395; capital, $3,076,890; total expenditure, $41,775,285.
           "2.  Total revenue, $22,980,595.
           "NOTE—The answers given above are with respect to Mainland and Island urban transportation systems, and the revenue of $22,980,595 includes the Provincial transit subsidy of $2,000,000."

107 Mr. McClelland asked the Hon. the Minister of Municipal Affairs the following questions:

With respect to B.C. Hydro—

1. What is the total number of (a) permanent staff and (b) temporary staff now employed by B.C. Hydro?
           2. What was the total number of (a) permanent staff and (b) temporary staff employed by B.C. Hydro as of September 30, 1972?
           3. What was the total number of staff hired by B.C. Hydro in the 12-month period ended January 31, 1975?

The Hon. J. G. Lorimer replied as follows:

"1. Detailed information as at February 21, 1975, is not available. Statistics as at January 31, 1975 are: (a) Permanent staff, 10,154; (b) temporary staff, 1,130; total, 11,284.
           "2. As at September 30, 1972: (a) Permanent staff, 7,245; (b) temporary staff, 1,000; total, 8,254 (see Note (1) below).
           "3. Staff hired for the 12 months ended January 31, 1975, was 4,814 (see Note (2) below).
           "NOTES—(1) The figure shown as at September 30, 1972, does not include IPEC staff. To make No. 2 of the question comparable to No. 1, the 569 IPEC staff must be added to the 8,254 to give the comparable total of 8,823. The IPEC staff records were not classified in the 'temporary/permanent' categories and this breakdown is not available.
           "(2) The question asked for the number of hires for the 12 months. The net increase for the 12 months ended January 31, 1975, was: (a) January 31, 1975, 11,284; (b) January 31, 1974, 9,846; net change, 1,438."

[ Page 3457 ]

APPENDIX

158 Mr. Wallace asked the Hon. the Minister of Municipal Affairs the following questions:

Regarding the $5 bus passes issued, in Victoria only, by the Transit Division of B.C. Hydro—

1. Is there any consideration being given to have the passes issued from a central Vancouver office for the convenience of the majority of users?
           2. What are the plans for issuance of passes to Vancouver residents in the event of a postal strike?

The Hon. J. G. Lorimer replied as follows:

"1. No; for clarification, this is a program under the Minister of Human Resources.
           "2. It has been our policy to extend the period of former valid passes until renewal procedures can be restored."