CONTENTS

Committee of Supply: Department of Mines and Petroleum Resources estimates

On vote 168. Mr. Richter — 3815

MONDAY, JUNE 23, 1975

The House met at 10 a.m.

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

ESTIMATES: DEPARTMENT OF MINES
AND PETROLEUM RESOURCES

(continued)

On vote 168: Minister's office, $103,728 — continued.

MR. F.X. RICHTER (Boundary-Similkameen): In the estimates of the Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick) in the draft in our estimate book, it is difficult for me to follow the estimates. It seems that there is something missing. I note that in the estimates it is set up in two or three different sections — the executive, the general, the mineral resources. It goes on then to the petroleum resources. But there seems to be a branch that is missing, along with an Associate Deputy Minister as provided for in estimates, and that is the operations branch.

Now it is very difficult to try and talk about the estimates in light of the fact that this one particular branch, as it has been publicly announced, is part of the Department of Mines and Petroleum Resources. But it doesn't show as such in the estimates. There is no salary for the Associate Deputy Minister. I can't seem to sort out from the rest of the estimates just what this Associate Deputy Minister does have control of. What does his branch consist of? Is there such a branch? If there is, I wonder if the Minister would tell us something about it.

Recently we have had many, many reports from the public and the mining industry regarding the decline of the mineral industry, particularly the discovery and exploration. This includes the amount of drilling that has taken place within the past fiscal year. Also there's the fact that with this decline we are going to have a decline in revenues, which I am sure would concern the Minister because it happens to be a resource industry. It happens to be a revenue department. And the declines that have been shown in the estimates, I think, were most conservative because I think you will find that the decline in the returns from the mining industry will be very much higher than what is shown in the estimate book that was given out by the Minister of Finance.

There have been a number of undertakings — for instance, the report of the British Columbia task force. I'm sure this was somewhat costly to produce. I wonder if the Minister has a figure on the cost of this particular report. Really the report tells us nothing more than what we knew before. Actually, in earlier discussions with your Deputy Minister during the time of my administration and responsibilities as the Minister of Mines, we had long discussions in relation to the copper possibilities, smelting and various other matters along that particular course. Much of that report was discussed in the context of the need for smelting operations, the possibilities of a smelting operation. An industry study had taken place; so we did have this information. The technology had been set out long since by way of papers on a technical basis. So really it hasn't produced very much, if anything, as far as bringing a viable copper industry — refining, smelting, marketing, and so on. There is so much here that is nebulous that you can't really determine which direction to go, so it seems like the report has very little benefit.

There was a recent exploration trip by two helicopters into the East Kootenays. In the past the federal government, along with the provincial government, and industry had a very comprehensive concept of the coal potential and the possibilities within the southeast corner of the province. That particular task force, I assume, is preparing a report, if they are going to report. This must have been a substantially costly operation, particularly with helicopter costs at the level they are today. Now with those few questions, and I'll have more later on, possibly the Minister could give me some background.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Chairman, in regard to the estimate book, there's no reference made there to the operational branch. The operational branch was not set up at that time. It has only been set up since the first of the year. It was around March 1 that we actually set up the operational branch, under which comes mineral revenue, economics and planning, accounts, publications, roads and trails. Also, the prospector assistance setup comes under that branch.

Interjection.

HON. MR. NIMSICK: Well, maybe you think it's everything; but come up to my office and I'll tell you exactly what comes under the other branch, if you like.

In regard to the copper task force report, I haven't any final figure as to what it cost. I gave each one a report so that you could make a study of it. Personally, I think it was a good report. There has been no obstacle in the way of setting up a smelter before, if you could overcome the pollution problem and if the government was willing to give a subsidy towards building a smelter, but the smelter that was suggested in 1971, I believe, had a high stack problem. They wanted to put up a high stack which would not only lose all the sulphur — and, to me,

[ Page 3816 ]

sulphur is an important resource of our country, too — but it wasn't acceptable to the people of British Columbia in regard to pollution control.

I think these problems are dealt with in this report. Undoubtedly, any report has various opinions in it. Anyone can have their own opinion about it. But it's for discussion and to try and work from there so that we can arrive at the processing of our copper resources in this province, not only smelting but also refining and right down to fabricating because this is the only area in the world where every pound of concentrates is exported without any processing done. I think this is wrong, therefore it's my hope, and I'm sure it's also the hope of the Hon. Member who spoke, that in some way this will get something off the ground in order to get that processing going along because if you go right down to fabricating, for every ton of ore that you take out, you give that many more jobs by processing right down to fabrication.

MR. A.V. FRASER (Cariboo): And wait till the government purchases it.

AN. HON. MEMBER: And for 20 years you did nothing. What did you do for 20 years? Not a damn thing.

MR. CHAIRMAN: Order!

AN HON. MEMBER: Stand up and tell the House what you did!

MR. CHAIRMAN: Order! The Minister of Mines has the floor.

HON. MR. NIMSICK: Thank you. It seems to me that I have answered all the questions.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Chairman, what the Minister says about British Columbia being just about the only jurisdiction in the world that allows the export of virtually all its copper as concentrate is substantially true.

I had the pleasure last week, on an interparliamentary visit, to meet a representative of the country of Zaire. This country, which is a landlocked country, processes virtually 100 per cent of its copper. It's a nation which doesn't have the good fortune to be as technologically advanced as Canada and British Columbia, so the present circumstance we're in is unquestionably a shocking one in terms of the retention of jobs in British Columbia.

But, that said, I want to know exactly what the Minister proposes to do about it. The immediate press reaction to the publication of his copper task force wasn't exactly encouraging. I'll just quote here some of the reactions of the industry, and the Minister will agree that he should pay some attention to the reactions of the industry unless he's proposing to take over the industry in the province himself, which this smelter task force didn't recommend, nor did it recommend that the government should build a smelter. Here are just a couple of paragraphs:

"Mining officials said that no new properties can be developed to provide the concentrates needed for these" — that's for these two new smelters — "because no one will invest in projects when profits are all taxed away."

That's one paragraph.

Here's another paragraph — this is quoting Mr. Jewitt, president of Granby Mining Corp. His opinion was that it was "inconceivable" that anyone would proceed with a smelter in a frame of legislation that discourages the search for new copper.

Let there be no doubt, Mr. Chairman, but what the search for new copper has been viciously discouraged by the government of this province. There is no question of that whatsoever.

Indeed, in the body of the report itself — I'm quoting here now from the report of George Troehlich:

"Nevertheless, under present circumstances, the province will not be able to maintain the current export volume, let alone increase it at a compounded rate of 4 per cent over the next 10 years. In fact, actual production capability will be reduced to $340,000 tons in the next two years due to ore exhaustion in several smaller mines. Unless further copper mines are developed, copper concentrate production will decline steadily thereafter."

Mr. Chairman, here we are talking about the need for a copper smelter or two copper smelters in British Columbia, and here's a Minister that's making sure through his legislation that the feedstocks for those smelters are not only not being discovered and developed but in fact the producing mines are being depleted, according to his own report, to the extent I just outlined. I'd like to know, Mr. Chairman, as long as we're on this subject, exactly what this Minister is going to do to encourage exploration and development in this province.

I'll give him one very specific question to start out with, a very specific, simple question. The report talks about 19 properties that have been brought to the stage where development is feasible and possible. I want to ask the Minister how many of those properties he thinks will be developed or starting development will take place on during the next year.

HON. MR. NIMSICK: Mr. Chairman, just a few words in reply to the Hon. Member. The present copper-producing mines have been cut back by their export agreements with the Japanese. I don't see that

[ Page 3817 ]

it would make sense to have six more mines in operation to be cut back that much more when we can't sell what we've got. Nevertheless the report details everything in regard to the mines that have potential, in regard to the mines that are in operation and where we would get the feedstocks. It's easy for you to read a press report. But why didn't you read from the report itself, rather than take somebody else's opinion? All you're doing is taking Froehlich's opinion or somebody else's opinion and quoting him; you're not quoting yourself. I'd be very pleased if you would give your own estimation of the report and tell us what you think of the report and the future of the development.

I'm in great hopes that we will move in to the processing of the copper ore. From there we will do something that will benefit the province — not only benefit the province but maybe conserve our ore supply in the future. If you can give 10 more men jobs with the same amount of ore, it means an awful lot to the country itself. I think that this is something we've got to consider.

MR. D.E. SMITH (North Peace River): Mr. Chairman, it's fairly obvious from listening to the Minister's remarks that what he doesn't understand with respect to the idea of refining copper in the Province of British Columbia is that his own policies, policies entered into, I presume, knowingly and with the advice of whoever he takes his advice from, are counterproductive to the exploration and continued search for minerals in the Province of British Columbia. If he can read nothing else, he should be able to read the reports that indicate exploration is down 99 per cent in the Province of British Columbia when it's going up, not 99 per cent but certainly substantially, in every other jurisdiction in Canada. Certainly that should say something to the Minister. Do we have to spell it in letters 10 feet high so you can read, it, Mr. Minister? Does somebody have to get up and hit you over the head with a post mallet before you understand what you've done to the mining industry in the Province of British Columbia? Is that what is necessary?

There can be no really serious consideration given to a copper smelter in the Province of British Columbia until such time as you restore confidence in the industry and bring back the first step, which is an increase in exploration for minerals in this province. That will never happen under existing legislation. You know it, Mr. Minister, the public knows it, and those people who would invest money in this province know it. So your idea of a copper smelter is just a smokescreen and counterproductive to the policy that you knowingly have foisted on the people of this province.

Until you remedy that basic fault within the legislation on the books of this province, there will be no copper smelter. Indeed, there will be no mineral industry left in the Province of British Columbia.

We can go into the field of exploration for gas and oil in the province. The Minister has said, in referring to a bill that is before the House — and I'm not going to dwell on that bill — yes, we're going to place on the books legislation, and it will probably not be used. It is legislation which will enable the government to go into the exploration business of the Province of British Columbia, but we really don't intend to do that.

Mr. Minister, once that legislation is on the books of this province you have no choice. You have no choice at all because not one single company will be able to find the finance that is necessary to go into the business of exploration for gas and oil with that legislation hanging over their heads. So you have no choice. You must enter the exploration business through the B.C. Petroleum Corp. In the Province of British Columbia. And with the lack of expertise that your department has shown so far with respect to running anything, Lord help the taxpayers in this province, because that's going to be a very, very expensive venture on the part of the taxpaying public.

No company will be able to compete with the government, or even seriously consider further exploration when they know that at the Minister's whim…and if they are fortunate enough to find a gas discovery, or an oil discovery after spending millions of dollars, the Minister, at his whim, could then withdraw from them most of their leases and go in and do the exploration from that point on. They would be crazy to do it. Not only that, no financial institution in the world will back them up or give them the finance they need.

Mr. Minister, if you had knowingly tried to destroy the mining and the petroleum industry in the province, you couldn't have progressed in any better manner than you are doing right now. I think it is time that you realized the seriousness of the course you are following. It is time that you told the public in the Province of British Columbia very clearly what your plans are and where the industry that has been with us for a long time fits into the future of this province, because it is at a stalemate right now. At a time when energy resources are required throughout the whole world you have entered into a policy that is not only counter-productive, it has practically destroyed the industry.

Mr. Minister, you have a lot of explaining to do to the people of this province, because it is not only jobs that you have effectively emasculated, but it is also investment capital which would have come to this province as a result of at least the prospect of finding mineral or petroleum resources. It is the future of the refining industry, and it is the future of the mineral industry in the province that is at stake. If you don't

[ Page 3818 ]

understand it, certainly there must be people in your department who understand the seriousness of the problem.

I suggest to you, Mr. Minister, that it is time you took their advice, and for once stand up and be counted as one of those people who support resource development in the Province of British Columbia, not as one of those who is doing everything in their power to make sure that we have no development. What are your policies? What are you going to do, Mr. Minister? How are you going to bring back exploration for minerals in this province? How are you going to bring back to the province a healthy exploration industry for gas and petroleum resources? Just answer those two questions. I'd like to hear your opinions.

HON. MR. NIMSICK: Mr. Chairman, in answer to the Hon. Member, it is rather difficult to answer the question because he posed questions and answered them himself in some respects.

I'm not going to talk about the legislation that is coming up because I would be out of order in regard to that legislation. Surely, I haven't had the power, with the legislation I have brought down, to close the mines in Montana, to close the mines in Quebec, to close the mines in Chile or to close the mines in Europe.

MR. SMITH: Let's talk about British Columbia!

HON. MR. NIMSICK: Well, that's exactly what I'm talking about — the blame you're trying to lay on the legislation I have had before this House, now and in the past. You are trying to blame that legislation for the decline in copper prices — any decline. To me, you haven't made any definite statement as to any exact mine that has closed down and the reasons they closed down.

I think everything is moving along very well in British Columbia in spite of the fact that they stated that capital was on strike. But we have overwhelming numbers of people wanting to develop. We've got a mine going into operation — Northair Mines are going into operation.

Interjection.

HON. MR. NIMSICK: Well, it's still a mine that's going into operation. You said that there wouldn't be any. I'm sure as far as copper development goes, at the price of copper today and not being able to sell the production that's already in existence, you're not going to have new copper mines go into production right away.

If the questions were questions that could be answered…But you are making statements and alluding to the legislation we've passed as though that is the cause of all the problems in the mining field. You could go to the lumber field and blame the legislation we've got for all the causes of the lumber operation. You could go to everything else.

Interjection.

HON. MR. NIMSICK: I think that that is rather ridiculous. If we're going to give it away altogether, we're going to have no stumpage on the timber and nothing for the minerals. If that's what you want to do, well and good. But I'm sure you're not advocating that kind of a policy.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, I've only a few words to say because the Minister's contradicting himself as he goes along. The fact is that in the lumber industry your government did respond to the very fact that the world situation was causing the problem in this province. The first thing you did was reduce stumpage to minimum stumpage. You've done nothing in the mineral royalties field on the same logical basis.

Would it not make sense, even on a temporary basis, to reduce mineral royalties in the same way that in the lumber industry stumpage was reduced? It seems to me that this government is being very stubborn. I know you can't be held responsible for world markets. But it seems very stupid to me to sit back and say well, of course, we can't change the world; we can't change the price of copper. But you could change the valuation price of copper. I've got an article somewhere that says that you can't produce a pound of copper for less than 85 cents at the present time — the cost of production…

HON. MR. NIMSICK: That's not so.

MR. WALLACE: Well, that's been one of the comments from one of the companies. Maybe you can tell us why that's not so. But the fact is that it seems to me that's a very stubborn approach you've taken — that because the world around us is doing certain things in the price of minerals and so on we're just helpless to do anything about it in British Columbia.

When you got into problems with housing, you put on rent control; when you got into trouble with the lumber market you cut down the stumpage. Why in heaven's name can't you do the same with minerals?

AN HON. MEMBER: Look what happened with housing.

MR. WALLACE: Well, at least they took some action. They're taking no action as far as mining problems are concerned. The Minister has often

[ Page 3819 ]

talked in this House about lead time — the years that are needed before you stake a claim, explore, develop and put a mine in production. It's several years, so you've told us. It is no use to sit back at this point in time and say that there's some little mine going into production and that the present mines are still functioning. Of course they're still functioning: they've got capital investment they can't walk away from.

But to suggest that everything's going along fine! Anybody who reads the newspapers and the economic columns in this province, and the opinions from outside the province who make comments in the various journals, the Financial Post and so on, you can't believe that things are going along fine. They are just not. If you can react in various other ways about the economy of our province because of what's going on in the rest of the world, I think it's about time you took a took at the mining situation.

I'll just ask you outright now: do you plan to do something legislatively to change the Mineral Royalties Act? Why can't you bring in a moratorium for one year, or whatever, and wipe out the royalties? The other point about that, which I realize is less than adequate, is that the people in the mining industry are upset about the uncertainty as to what this government may do from time to time, and the discretion which is allowed you, Mr. Minister, in the mining legislation. Again, because of the long times that are involved between exploration and putting mines into production, the investor isn't prepared to put money into the mining industry unless he gets some assurance for X number of years down the road that the government won't keep moving the goalposts.

I don't think the government has realized that there are all these differing factors which are causing the investor to take his money somewhere else. I've had people in my office discussing very anxiously the expertise that's leaving the province all the time. I gather this expertise wasn't just built up in one year or two years or three years. Vancouver became a very internationally known centre in North America for a base of mining expertise and professional staff. I gather that it's automatic and predictable that if the mining industry is not active, these people have to go somewhere else for work and have to take their money somewhere else as well.

Now I don't understand how the Minister can say that everything's going well. I hope that he can answer very specifically the question: does he have, or is he making any recommendations to cabinet that maybe the mineral…? And I'm not necessarily saying that mineral royalties should not exist. In fact, we believe in our party philosophically that the resources belong to the people of the province. We don't believe that mineral royalties should just be taken out or that there should not be government control and conservation and efforts that the companies who mine the ore should not have some respect for the environment and the shape they leave the countryside in when the mine's closed, and all these things. We are agreed philosophically on these. But we are in a situation right now where the province's second industry is in real trouble.

We get the impression — by we I'm talking about people like myself who don't have expertise but who read and listen and watch the world go on around us — that the mining industry is in trouble. The government has taken an obstinate, stubborn stand. I think that probably the data and the analyses on which you base your original legislation were misguided, or so it appears to me. But in the face of all that, you're taking a very stubborn, unrealistic stand. You don't seem to be willing to admit that maybe the legislation hasn't accomplished what you had hoped and, in fact, it's causing a loss of revenue to the government; it's costing a lot of jobs and it's costing expertise of highly-skilled professional people who are leaving the province — and, worst of all, we're losing investment, which just can't be turned back on like you turn a tap on and off.

In the light of all these factors, Mr. Minister, I don't understand how you can make the statement you did a little while ago that things are going along well. I think you should tell the House whether, in fact, there is any reconsideration being taken by cabinet and your government to change the basic structure or guidelines that are included in Bill 31.

HON. MR. NIMSICK: I appreciate these remarks, and I appreciate the fact that you haven't got the expertise to follow up and that you've got to depend to a great extent on what you see in the newspapers.

When you talk about 85 cents — that they couldn't operate at less than 85 cents — do you know how much the royalties bring in on a pound of copper? It's 2 cents and maybe less per pound. Now 2 cents a pound for the natural resource: if that's going to keep a mine in operation or not keep it in operation, to me it's a very small amount that you are talking about. Surely the people of British Columbia should have the right to 2 cents a pound on copper ore.

As far as the royalties go, and as far as changing the legislation, they can defer the payment of their royalties from year to year if they're having trouble in paying the royalties. This is what they can't do about their picks and their shovels and the other things they need to operate the mine. They have to pay for them when they receive them, I suppose….

MR. WALLACE: They defer them.

HON. MR. NIMSICK: They don't defer the payments to the supply companies. But we say that

[ Page 3820 ]

they can defer the payment for the copper ore, and I think that that is quite generous in that respect.

But you didn't tell me in your speech what you would do. Would you go out and subsidize the mines or would you…?

MR. WALLACE: I would listen to what the mining people had to say.

HON. MR. NIMSICK: I have listened to what the mining people said and I've had my economic advisers go over it; and here are the three years. Here is 1972, 1973, 1974. In 1972 the mining companies got 60.7 per cent of the revenue after the operating costs were all taken off. That's what they got in 1972.

In 1973 with the high price of copper they got 82.9 per cent. In 1974 with the royalties on and with the price of copper away down, they still got 5 1.4 per cent.

Now the mining association that has been talking to me tells me that if they can get a 50-50 bargain they're doing all right, and they're getting a better than a 50-50 bargain even in 1974. If we cut out this — part of this is federal taxes and income tax — we're saying that we don't want any revenue for the resources of the country.

Maybe when the price is low they should hang on to the resources for a while and they will maybe go up eventually. But to me, to say that we should give it to them because they're having difficulty….

MR. WALLACE: I didn't say that. I just said, don't bury your head in the sand.

HON. MR. NIMSICK: Well, I haven't buried my head in the sand. I'll send you a copy of this if you like.

MR. WALLACE: Okay.

HON. MR. NIMSICK: It's quite a different picture to what we get from the mining association. Quite a different picture. I don't blame the opposition because they, too, haven't got the expertise to go into these things. You've got to take all your information from the mining association and the mining companies, and this is certainly what they do. You don't take it from me. We've got a whole raft of experts in our department, but you won't take their word for it. You probably won't take the word of this for it, and it is done by experts as well.

Therefore, Mr. Chairman, I see no reason why we should change the legislation. The royalties are not causing any problems. The 2 cents a pound or less that they might pay on copper is very little. If they can't pay it they can defer it and pay it in better days. I think that is very generous.

If you could make a basic suggestion as to how you are going to change the mining industry, the sale of the metal on the markets of the world…. The mining association sent out an MLAs' report a little while ago. You talk about unemployment in the mines; I'll bet you there is hardly a miner out of work in British Columbia. The Rossland Mines put through students for mining, and they are picked up as fast as they can graduate them; and they haven't got enough of them.

When you listen to the mining association, they say that over the last two years there have been 6,000 men laid off. But they don't tell you where they are now. They're all….

MR. GIBSON: They're all in Mexico.

HON. MR. NIMSICK: No, they're not in Mexico, and you know that. To me it is rather ridiculous to say that all these things are caused by the legislation. I think the legislation is good legislation. It is legislation that eventually the people of British Columbia will be very proud of. I'm sure that any government, any future governments, will be proud of the legislation.

MR. GIBSON: Mr. Chairman, I would like to follow up a few of these thoughts with the expert Minister, who is so generously sharing his expertise this morning with the House.

He just finished implying that the Hon. Member for Oak Bay (Mr. Wallace) that that Hon. Member should not have blamed the government for what was going on in British Columbia because, after all, what was going on in British Columbia was going on all over North America.

HON. MR. NIMSICK: That's not what I said about it.

MR. GIBSON: Well, I think you did, Mr. Minister; what you said about it was something like that. You gave that impression to the House.

Interjection.

MR. GIBSON: Now does the Minister appreciate that, according to the B.C. Yukon Chamber of Mines, throughout the area — even including British Columbia — of the Yukon, Alaska and the northwestern United States, aggregate spending will be up 142 per cent in exploration terms despite the substantial decline in British Columbia? How does the Minister explain that?

The Minister implied to this House that exploration is down because of low prices.

Mr. Chairman, a few moments ago the Minister suggested that I should read his copper….

[ Page 3821 ]

HON. MR. NIMSICK: I didn't say exploration was down. I didn't remark on that question at all. Are you trying to put words in my mouth?

MR. GIBSON: You certainly said the copper business is down because of low prices, and you have said before in this House that exploration is down because of low prices.

Interjection.

MR. GIBSON: You've also said in this House — and if you haven't, please stand up and say so right now — that exploration is down because of low prices. Please stand up and tell me if that is wrong.

MR. CHAIRMAN: Shall vote 168 pass?

Interjections.

MR. CHAIRMAN: Order! Order!

MR. GIBSON: It is obvious to the people of British Columbia what kind of a chairman we have again in this House.

MR. SMITH: Mr. Chairman, I don't know what your hurry is this morning and why you seem to be so quick on the trigger, because it was obvious that the Member for North Vancouver–Capilano (Mr. Gibson) was about to get back….

MR. CHAIRMAN: Order! Please deal with vote 168.

MR. SMITH: An exchange was taking place between the Minister and….

MR. CHAIRMAN: Please deal with vote 168.

MR. SMITH: I'll deal with the vote, yes, Mr. Chairman. That's what I intend to do. But I intend to deal with the vote and have the rules of this House respected by the Chair, as everyone else has to respect them. It's about time we had a little bit of impartiality.

MR. CHAIRMAN: Order! The matter before the House is vote 168.

MR. SMITH: Mr. Chairman, to the Minister of Mines and Petroleum Resources. What we are trying to suggest to you this morning, Mr. Minister, is that you take into consideration the economic facts that prevail at the present time.

Don't look for a bogeyman or a scapegoat by suggesting that because the price of minerals is down world-wide that has had a tremendous impact and detrimental influence on exploration in the Province of British Columbia. The thing that has had the detrimental influence on exploration for minerals in the Province of British Columbia is nothing more than the legislation that's on the books. That is the prime factor that has been responsible for reducing exploration by 99 per cent in this province, while in the Yukon, in the provinces to the east of us, in the northwestern United States the picture is completely the reverse of that. Exploration is up by 142 per cent from previous years. Exploration has been declining for three years in the Province of British Columbia, not just the present time. So don't blame the price of copper and other base minerals as the…. Don't use that as a scapegoat. In other mines in other areas exploration continues to increase.

The Minister must be aware that that is the first step in the discovery and the eventual development of a new mineral resource or a new mine. Exploration must take place first.

The Minister has suggested to the opposition: "Show me; point out a few facts." I'll read to you this morning, Mr. Minister, from a report of June 20 in The Vancouver Sun — fairly current, I'd say, Mr. Minister: "Cypress Anvil Mining Co. said Thursday it would like to include B.C. In its exploration plans but sees little justification for substantial expenditures on exploration until the provincial government initiates changes in its mining legislation."

At the same time in the same article they announce a $5 million expansion programme on the concentrator capacity at Faro in the Yukon, So in one breath they have told you what they think of exploration in the Province of British Columbia and in the second breath they have turned around and said in the same news release that "we are fully intending to spend $5 million in increasing the capacity," even with the reduced price for minerals, at Faro in the Yukon Territories. Certainly it would seem to me that you should at least compare the situation of British Columbia with neighbouring jurisdictions, particularly the Yukon and the provinces east of us. I'd suggest that we do have a problem, mainly because of the legislation that's presently on the books. That problem could be corrected for the mining industry the same as it was temporarily corrected for the forest industry — that is, by having some sort of flexibility built in.

The Minister has talked of deferment of royalty. Mr. Minister, deferment is no solution to the problem, because the mining industry realizes that the minute the price of metal increases, and it will increase because it's a flexible market…. Prices go up, they go down, and then they recover and go up again. But the industry realizes that a deferment is nothing more than a contingent liability which will have to be paid the first year the mine shows a profit. What it would really do is just defer that debt at

[ Page 3822 ]

interest — I presume substantial interest — for a short period of time or an extended period depending on the market conditions. Then at the very time when they would ordinarily have had some money for new development, it'll be siphoned off by the government in deferred taxes or in deferred royalties. So they'll really be no better off than they are at the present time. This is why no one is rushing to take the government up on their offer of deferred taxes or deferred royalties.

HON. MR. NIMSICK: You'd be surprised.

MR. SMITH: Nobody's rushing because it's only a temporary solution, and it's not a solution at all in the long run, no more than the legislation which permits deferment of taxation on property for senior citizens is a solution to a problem. All it does is postpone it to a position a few months or a few years down the road.

Make no mistake about it: the situation in British Columbia has been brought about as a direct result of the legislation presently on the books. The situation can be reversed and turned 180 degrees at any time the Minister decides to take the advice and information that's available to him and set up some sort of attraction that will allow not only the present mining companies to continue operation, but further exploration to come about in the Province of British Columbia.

It's ridiculous to say that we are isolated from world market conditions. But, Mr. Minister, it's equally ridiculous for you to sit there and take no recognition of the fact that in every other jurisdiction in western Canada, and in the north, exploration is going up, while in the Province of British Columbia it's going down. That is a responsibility that lies on your shoulders when you are told time and time again by the people in the business that they know there's no future for them under existing tax laws in the Province of British Columbia.

No one in this House argues with the Crown receiving a fair and equitable return for the resources that are extracted, be it coal, be it copper, be it natural gas or crude oil. But there is a relation between the amount of money the government can reasonably expect and over-taxing to the extent that you destroy all incentive and all future exploration in this province. And that's exactly what you're doing right now, Mr. Minister.

I'd like to touch briefly on one other matter before I sit down at this particular time, and that is this matter of an oil refinery in the Province of British Columbia.

Is the Minister or his staff holding talks with the Province of Alberta in the hope of providing crude stock for a refinery, since we do not have the resource available at the present time in the Province of British Columbia? What is being done to assure supply for any proposed refinery in the Province of British Columbia? Are you holding talks with people off-shore so that crude product would have to come by tanker to the shores of British Columbia? At what stage are discussions with the Province of Alberta, which would be the most likely source of supply?

HON. MR. NIMSICK: In regard to the refinery question, that question is under the Premier and the Petroleum Corp., the Crown corporation. I'm not in on those discussions. I'm in on the source of petroleum resources and so on, but I haven't been in on any discussions in regard to the oil refinery, and I don't feel as though it would be proper for me to make any comments. Any comments I would make would have to be my own personal ideas, so therefore I feel that with not knowing it, it wouldn't be fair to you to try and lead you to believe that I knew what they are thinking about in regard to off-shore oil, or in regard to the oil from Alberta.

In regard to the exploration you're talking about, it could be questionable in some respects. It depends on what you're exploring for. If you're exploring for gold in the area where gold is more…. Lead, and zinc too, have held up in price very well, but even that is having its problems now because I understand they are stockpiling some lead and zinc.

All these reports you see in the newspapers and that you're going by may…while in this province they're going to try and point the arrow at the legislation…. When you say that we should give them some encouragement, should we give them a three-year tax-free time for operating a mine? Should we give away our resources? At no time have any of you said that that two cents on copper should be cut out, because I don't think that would make the difference.

I think the people of British Columbia have the right to receive something for the depletion of non-replenishable resources.

AN HON. MEMBER: Hear, hear!

HON. MR. NIMSICK: There's no use us arguing here. We can argue until we are blue in the face, and you can make statements that we should give them encouragement, but you didn't say what kind of encouragement we should give them.

Sure, we could wipe out our pollution controls on some places and maybe they might go ahead, or something like that, but I don't think that the people of British Columbia would want those things.

Our reclamation permits are costing them something. Sure, British Columbia, I think, is in the forefront in managing the resource today. The people who were here from the Yukon — I was talking to them, and what little that they get from the ore that's

[ Page 3823 ]

taken out of the ground up there all goes to Ottawa. I think it would be a different story if they were a province like we are and had control of their resources. They felt that what was going in the Yukon wasn't proper, so I'm not going to comment as to what they might do if they were in power. Nevertheless, I haven't heard anybody yet this morning say that the 5 per cent, which amounts to about two cents a pound on copper, is out of line. When you say we should give them attractions, what kind of attractions? You didn't say that either. I am sure that….

AN HON. MEMBER: …don't take 105 cents of every dollar.

HON. MR. NIMSICK: I'll send you over a copy of this, too, and you can look at it, and I'm sure that you will be interested in it, to show the stories that you hear in the newspapers are not always what they might lead you to believe.

AN HON. MEMBER: I've seen the press.

MR. RICHTER: Just a few short questions to the Minister of Mines and Petroleum Resources under vote 168.

Does the Minister feel concerned about the announced shut-downs that are going to take place in the various mines this year? It seems to me that the Minister has mentioned that all the miners are readily employed, but on the other hand, with the number of cutbacks of a number of mines, and I don't need to name them because the Minister already knows — Gibraltar, Grand Duc, and so on down the line, Endako — they have all cut back their production and by so doing, of course, people have been displaced. That is, they haven't jobs to go to in the chosen industry in which they have equipped themselves for. Does the Minister show any concern because of this fact?

Now as far as the cost of mining today, of course, there has been an escalation because of increase in labour costs. Increase in equipment costs, royalties, mining land tax, all these have added to costs. Now the Minister has stated that 2 cents seems like an infinitesimal amount of money to pay for the resource. If we are talking in terms of a profitable operation in light of all this cost — taxation, et cetera — probably 2 cents doesn't seem very much. But as the Member for North Peace River (Mr. Smith) has just stated, if they are paying $1.05 per every $1 they are getting, then of course it is a losing proposition even on the break-even propositions. They have no alternative but to pay taxes, royalties, et cetera, before they even see a cent of profit.

That's obvious, because I'll quote figures from one particular mine. They lost $125,375 on mining operations in the first quarter of this year, but still had to pay $231,724 in provincial royalties and $32,000 in corporation capital taxes. So these sort of situations make it very hard for people to comprehend what is just happening, in light of the fact that royalty comes off of the top before any profits can be distributed, any profits can be considered.

Only recently have we seen some relief by way of provincial income tax that will accrue to the mining companies to offset the royalty picture in light of the federal attitude. When you figure this, based on provincial income tax, it is not really going to amount to all that great a relief. There is going to be some relief, but it is not going to be the necessary incentive for an influx of mining capital, an influx of development. As has been stated, it takes a certain amount of lead time — five or eight years — for the development of a property, depending upon the quality or the mining conditions and so on, to get into a production period.

Now five to eight years from now we may find a lot of depleted properties, even those that are existing now. We are not going to have that many new ones on line, so we are going to be in the position that the buyers of the product will go somewhere else to get it.

Let me tell you, we only produce about 3 per cent of world copper today, and that's a pretty infinitesimal amount when you take into consideration places like Africa, Australia, and the various other foreign countries that have lower labour costs, lower production costs. We don't have a monopoly, and I've said this many times before.

There is no question but a method could be devised by the amending of the Mining Tax Act, where a revenue could be obtained based on profits from a mining company which would compensate, along with the other tax factors that they are already paying into, that this could substantially take the place of the royalty imposition and still be on a flexible basis in which it could move with the markets and with the profits, because as profits go up then of course, naturally, you would draw a greater amount of revenue. As profits went down, then of course, you'd get the offsetting of whether the mine closes its doors, cuts back, or whatever it does. So I think there is a position that can be taken.

In relation to employment, it seems to me that in the reports we have had over the course of 1973-74 we find the mining industry has a very substantial effect on spin-off employment — service industries. As the balance goes back, and your mining operations decrease, then you're going to get more and more of a setback in the spin-off areas in which services and equipment are required because an operation that is not profitable is certainly not going to go out and renew its equipment as quickly as if it were in a more

[ Page 3824 ]

enviable financial position. So we're bound to have, over the course of time, a very substantial setback in our employment. Unfortunately, other areas are suffering the same way.

As far as the mining operations being not entirely confined to British Columbia, it seems peculiar because you find that the reports from the other areas, and the Minister has just mentioned the Yukon.... Probably they could change their procedures. I know the North West Territories probably would be in the same category as the Yukon — it goes to the federal. However, certainly if the federal government was to impose on the Yukon and the North West Territories the same type of restrictive and putative legislation that we have in this province, you'd hear the same complaints as we are hearing here today.

I think it's a serious enough matter that the Minister should really give this whole matter very, very serious consideration and try and develop a system that would still give the province some return for its resource, and at the same time give the mining companies, in light of the world conditions, an opportunity to operate even if they are only breaking even. Maybe you would drop the royalty if they're not in a profit position. But you would still have that employment; you would still have all those other tax sources that are still applicable to return revenue to the coffers of the province.

I'm quite concerned about the mining industry in British Columbia. I think that the Minister, if he's not, should be.

One final question, as far as I'm concerned is: Mr. Minister, will the final figure of your estimates have to be changed to take care of the requirements of the operational branch, or will it still remain as it's written in the estimates today?

HON. MR. NIMSICK: In regard to that last question, the money is in the budget. It was just a rearrangement more than anything else.

On the question of a flexible basis, I think that the royalty legislation has been very flexible. In all the years that I've been here I always felt that in the operation, in our non-replenishable resource, we should receive a price for it. We made that price on a flexible basis — on a percentage basis of the price of the metal. But in these operations, don't forget, inflation has created a lot of problems for them with the declining price of the metal. The price of the shovels, the reagents, the gas and the oil and everything is going up, so they're having their problems there. If these other supply houses were doing the same as we were, if they were as flexible as we are, they might not have the same problems. But I'm sure they don't expect the supply houses to reduce their prices when the price of metal goes down.

The cutbacks you are talking about are cutbacks in the contracts they've got. It's mostly in copper with Japan. They have cut them back, I understand, 15 per cent. Undoubtedly, with cutbacks like that you're going to have some problems. But when you talk about all cutbacks — Endacko is expanding, and you said it was cutting back.

AN HON. MEMBER: It has cut back.

HON. MR. NIMSICK: But molybdenum — we don't know, it too might take a dive. It's been holding up fairly well. The economic conditions throughout the world are such that a country dependent upon the foreign markets is at their mercy, and we've got little say over them. You haven't told me exactly what you should do to encourage — and you are talking about encouragement.

The mining industry, I think, has fared better in the Province of British Columbia than many other industries. They are doing fairly well compared to the lumber industry where there are 10,000 men laid off.

The mining industry, especially in coal…. When we talk about royalties, I've just had a letter from Montana where they have an Act there — I don't know whether it's enacted yet — where they are asking for 30 per cent royalties. So, I mean, we're picayune compared to Montana. When you say that we should give attractions to them, I just don't understand how you can and receive anything for the people of British Columbia.

MR. GIBSON: Mr. Chairman, the line of questioning I was engaged on when you so thoughtfully interrupted me in your usual charming way a few minutes ago….

MR. CHAIRMAN: Order! Deal with vote 138, please. Oh, 168, I'm sorry. But you have no right to start to tell the Chair how to function here now. Please get on with the vote.

MR. GIBSON: I'll certainly withdraw any implication of thought and charm, if it's your wish, and. If you find them offensive.

I was asking the Minister about his contention this morning that new mines are not opening because of the depressed price of copper. This is a line which is followed often by Members of your caucus, Mr. Minister, so I guess they are getting it from you.

Not this morning, but on other occasions you have said that exploration, too, is not proceeding in this province because of the diminished price of copper, not proceeding at the level that one might wish.

Now a little while ago you asked me to read your copper task force report. Well, now I have it here, Mr. Minister, and I wonder if you've read it. If you read it, I question whether you would have said that

[ Page 3825 ]

because I would draw your attention to chart 4.3, on page 19, which gives the recent price history of copper, going back to 1963. It gives the average yearly price of electrolytic wearbar on three different exchanges — the London Metal Exchange; the f.o.b. U.S. refinery price on the Atlantic seaboard; and the U.S. domestic producer price.

All of those prices, of course, go up and down — that's the first important point. Exploration and mine development, and investment in mine production facilities in any given year don't relate to the price that year; they relate to the average price that the explorer, or developer or producer thinks they are going to find down the road.

Now let's look at recent history as given by your chart on page 19, chart 4.3. All three of those indices I've just referred to bottomed out in 1972 — two of them below 50 cents, one slightly above 50 cents. Comparable to present day prices, Mr. Minister. But what was going on in exploration in 1972 in British Columbia? What was happening in 1972 was 53,000 claims being staked. What was happening in 1974, when those three indices were at an all-time peak, was that 10,600 claims were being staked.

MR. D.T. KELLY (Omineca): So it shows you there's something wrong.

MR. GIBSON: That's right, Mr. Member, it shows you there's something wrong with the mineral policies of this government; it shows there's something wrong with the administration of that Minister and the way he's running the mining industry in British Columbia.

Exploration doesn't relate to today's prices. The putting of new mines into production doesn't relate to today's prices; it relates to prices down the road. The prices down the road for copper in this world are going to be much better than they are today. Indeed, in this task force report, one of the recommendations is that this government and the federal government, or if necessary this government alone, should see what can be done about obtaining associate membership in the forming world copper cartel — ICPEC — to see what we can do about the price of copper. One way or another, that price is going to be up considerably from what it is today.

Price is not the reason for the lack of exploration and development in the British Columbia mining industry. It relates at least 75 per cent to the policies of this government, to the inflexible attitude, to the blind ideological instance on flat-rate royalties and Ministerial discretion. The policies of that Minister give 75 per cent of the explanation for the very sad state the British Columbia mining industry finds itself in today.

I marked down a few quotes here. The Minister said: "Everything is moving along." It's moving along all right.

MR. FRASER: Right out!

MR. GIBSON: It's moving along right out of the Province of British Columbia. The mining ability, the team — technological, engineering, financial — built up in this province over a generation is moving out. It is a very, very sad thing. It is a reversible thing if this government will have the common sense and the guts to say: "We made a mistake and we want the employment and the basic economy to British Columbia that our No. 2 primary industry will provide. Therefore we are going to reverse this idea of an off-the-top royalty and we are going to reverse this idea of Ministerial discretion. We are going to make it possible to plan for the future in British Columbia without fearing that the ground rules are going to be changed any day at the whim of this government or any government that might follow." Mr. Minister, even if you feel that you are the kind of expert that can use these enormous discretionary powers with wisdom, you can give no new miner any guarantee in this province that any future government will use them in that way. They are wrong.

The Minister has been saying this morning: "You want us to give it away. All that ore — you want us to give it away." The Minister is more concerned about revenue to his government to waste in Lord knows what way than he is concerned about jobs for British Columbians — jobs in the mining industry and the two-to-one kinds of jobs that the mining industry generates in ancillary industries.

I say to you, Mr. Minister, that a job is more important than your royalties, that a job brings to the Treasury of this province, through income tax and through sales tax that that person pays through the benefit of not being on social assistance, 100 or 1,000 times what that royalty would have brought you and one million times what that discretion would have brought to you. That discretion brings you no dollars at all; it just brings you a little bit of puffed-up ego and a feeling of importance to say: "I can tell those mining barons where to get off because I have the power." That's all the discretion does for you. It doesn't do any good for the province; it's very serious for the province.

Mr. Chairman, the Minister said: "Offer him an alternative." I'll offer you an alternative, Mr. Minister: tax profits. Eliminate discretion.

MR. FRASER: Right on! Scrap Bill 31.

MR. GIBSON: There's your alternative. You get the taxation not only out of those companies but out of the jobs that otherwise won't be there and aren't happening today.

The Minister talked about conservation a while

[ Page 3826 ]

ago, Mr. Chairman. His kind of conservation is the kind that leaves ore in the ground. He has never answered that challenge; he has never answered that argument that when you are in a decreasing grade situation, a grade tailing off in a large open-pit deposit, a flat-rate royalty alters the optimum mining pattern of that property and causes ore to be left in the ground.

There was a conference held under government auspices in Victoria last September. An expert was brought along and gave the government some advice. Let me just read a little bit of his advice, because apparently the Minister…. I don't know if the Minister was at the conference; some of his officials must have been at the conference. I don't know if they reported to him. I'm quoting now, Mr. Chairman, from a report in The Province, September 20:

"'Mineral leasing policy should be to levy rents or tax on the profit of a mine rather than on its revenue,' a McGill University mining professor said here Thursday. 'A revenue-oriented policy would raise cut-off grades, reduce the size of the mining operations and eliminate many mining developments,' said Brian W. McKenzie in a paper to the government-sponsored conference on mineral leasing as an instrument of government policy."

What a forecast, Mr. Chairman! Raise cut-off grades, reduce the size of mining operations and eliminate many mining developments. It's happening every day in this province. They weren't just warned in this House last year on the Minister's estimates last year, quite apart from debate on Bill 31.

The Minister didn't tell us last year that a year later hardrock drilling in this province in mineral exploration was going to be down 99 per cent. He didn't stand up and say there was any kind of a chance of that at all. You'd think that he would have had the wisdom, since he talks about all his expertise and all his experts, to peer into the future and to say: "Well, this is a possible effect of my policies, because this is what everybody's telling me — just everybody, bar none, except the NDP dogmatists."

This outside expert, not the Minister's own expert but an outside expert, which is maybe why he doesn't listen to him, goes on to talk about government policy. He says:

"The determination of cut-off grade and economic reserves for a metal mining operation may be strongly influenced by government policy considerations. Mineral conservation policy may require mining to the average grade of ore reserves as defined by the true economic margin. The level and structure of mining royalties and taxation may act to raise cut-off grade."

Another quote from that expert: "To raise cut-off grade…anti-conservationist practices," and you say you're in favour of conservation. The leaving of ore in the ground forever!

Mr. Minister in your stewardship of the mining industry in the years to come you will have a great deal to answer for in that regard.

You'll have to answer for it in absentia if he's not there, Mr. Member. (Laughter.) He won't be there as Minister after the next election.

MR. FRASER: After July this year.

Interjections.

MR. GIBSON: So what's the Minister's explanation on this? He says it's only 2 cents. I don't know where he gets his 2 cents, Mr. Chairman. Even if the price of copper is 50 cents a pound, it's 2.5 cents.

Interjection.

MR. GIBSON: That's what is the net smelter return today.

Interjection.

MR. GIBSON: It's a little higher. But you go on to say that other jurisdictions use royalties. Now you pulled a new one out of the hat today. You said that Montana is 30 per cent. What he didn't tell us, Mr. Chairman….

AN HON. MEMBER: That's on coal.

MR. GIBSON: That's on coal. Oh you didn't mention that it wasn't across the board.

HON. MR. NIMSICK: I said coal.

MR. GIBSON: Oh, well, I missed that little thing in an aside then. But let me tell you about some of the other royalties you've claimed in this House over the year.

MR. FRASER: You said that part in a whisper.

MR. GIBSON: The Minister said last year, referring to the Granduc situation, that there's a 22 per cent royalty there. It's on profits; it's not off the top. I'm sure he didn't want to mislead this House, but he did mislead this House when he said that in the Yukon and Northwest Territories there's a royalty…and he implied there's the same kind of royalty that we have in B.C. It's on profits in the Yukon and Northwest Territories. The Minister has gone and looked up the Canada mining regulations in the Yukon Quartz Mining Act, and I congratulate him

[ Page 3827 ]

for that, and he didn't say it in the House that day that he said there's a royalty up there. A tax on profit is an entirely different thing from a flat-rate royalty, Mr. Minister.

The Province of Manitoba — their new Bill 16: have you studied Bill 16, Mr. Minister? It's on profits. It's not off the top, the way you keep talking about and the thing that is ruining jobs, ruining exploration and ruining development in British Columbia. I come back to that one simple question I asked you an hour ago, and you still haven't answered that one simple question. Under your policies, how many mines do you think are going to open in the Province of British Columbia in the next year, and what is going to be the tonnage? I'm not talking about 200-tonners; I'm talking about mines that produce jobs in this province. I want you to be specific.

HON. MR. NIMSICK: Mr. Chairman, I'd have to be quite a forecaster because back in 1972, when the price of copper was so high, the mining industry told me that we'd take in $150 million on our royalties. They also said that never would you see the price of copper below $1 again. And these are men with the expertise in the mining industry. How do you expect me to be able to forecast better than they? So I'm not going to forecast at all. If I can't forecast any better than they did at that time, then I would look a little bit foolish.

I'm surprised at you, Mr. Member for North Vancouver–Capilano. Your dad was standing over there and he was the one that advocated royalties.

MR. GIBSON: On profits.

HON. MR. NIMSICK: No, he advocated royalties right off the top. He advocated royalties on minerals.

MR. FRASER: That's the reason he's not here any more.

HON. MR. NIMSICK: No, that's not the reason. I'm sure he'd be ashamed of what you said, that we shouldn't get anything, that we shouldn't get a thing. You say tax profits. We do put some tax on profits, but I don't believe that an efficient operation should be penalized and an inefficient one should receive the resource for nothing.

This is what might happen. No private industry when they lease out a mine say: "Well, we'll take it all off profits." They have something off the top.

AN HON. MEMBER: That's the usual pattern.

HON. MR. NIMSICK: Every one of them had something off the top. They have royalties.

Then you talk about the discretion of the Minister. You didn't define it. I don't know what discretion you're talking about when you say that I've got too much discretion. Where's the discretion? If it's in regard to a production lease that you've got to sign up, well, I think that that is a good point. We've got to have production leases before they can go into production so that we know exactly how they're going to mine the ore, so we know the feasibility, so we know the infrastructure we've got to build, so we know all the environmental impact — so we know all these things before and not after. I don't think that private industry should be led down the garden path in this regard.

So I'm rather amazed. And in 1972, don't forget, the mining industry predicted that capital expenditure would decline. It's declined in Ontario. I'll admit that it's probably increased in the Yukon area because the Yukon area has more gold up there. People are looking for gold these days because gold is high.

MR. FRASER: You're the best Minister of Mines the Yukon ever had.

HON. MR. NIMSICK: I'm the best Minister of Mines B.C. ever had, too! (Laughter.)

MR. G.H. ANDERSON (Kamloops): Mr. Chairman. I won't be taking up much of the committee's time. Every time I hear that landslide victor from North Vancouver–Capilano (Mr. Gibson) I just feel that there are enough snowstorms there that go on in the winter that we shouldn't have too many snow-jobs in June.

Interjection.

MR. G.H. ANDERSON: I am going to the NDP convention as a delegate Mr. Member, yes.

We always like to hear that landslide victor with his refreshing news about the doom and gloom in the mining industry in the province. He always carefully leaves out a lot of the facts, of course, that are brought to the House by the Minister and by other Members. He probably feels it's to his advantage to do so.

But one of the mines that has been going to develop in this province for, oh, four or five years now is in the Kamloops area. This is carefully not mentioned. As in the last time we debated this Minister's estimates, it was never mentioned about the mine closures from 1965 on. They had to be brought up, I believe, in that debate by myself year by year — and the number of employees laid off. But these were, of course, carefully left out by the Member when he spoke.

There was a six-month report given by the president of the Afton mine, some 10 or 12 miles west of Kamloops. The potential of this mine was

[ Page 3828 ]

discovered quite a few years ago. As soon as they found out the quality of the ore, then the in-fighting started with the companies. Proxies were picked up and shares were picked up and the Afton Mine and Tech corporation got into that famous fight that lasted for almost two and a half years. Just before they had to go to court for the final settlement, a settlement was made out of court.

They put their six-month report in, and it was reported in the Kamloops newspaper. The heading was: "Economics and Not Politics Delay the Afton Project."

"Reports that the Afton Copper Mine will not go ahead as long as the NDP government is in power have been denied by Afton president, Dr. Norman Keevil Jr."

Now of course, he's president of the mine and he says this is not the reason why they're not going ahead, but of course the Members carefully ignore that.

"'That has no basis in fact,' Dr. Keevil told the newspaper Tuesday. He is confident that the double taxation situation which is currently stopping the mine for development will soon be resolved and said it is economics only which is holding up the development."

I imagine, if that Member thinks of economics, into that come the world prices of copper and the quality of the ore you're mining, which he has conveniently left out.

"'We expect the situation will be improving in the near future,' said Dr. Keevil in the statement. He told the Sentinel he expects relief from the problem when federal Finance Minister John Turner brings in the federal budget in June 23rd."

Nowhere in this article does he mention the royalties that the provincial government wants to impose under Bill 31, that are never imposed until after copper is shipped — never in the development stage, never during the high cost of the production.

MR. CHAIRMAN: Order, please!

MR. G.H. ANDERSON: But only after the….

MR. CHAIRMAN: Order, please! There is a substantial amount of buzzing around the chamber. Could the Members please respect the speaker?

MR. G.H. ANDERSON: Although Dr. Keevil is confident the tax situation will improve, he said that a date has not yet been projected for development of the mine site.

"'Before the mine can be developed, a section of the Trans-Canada Highway will have to be moved as the open pit will be situated under the existing highway.' He said plans for a new and better highway have been drawn up, the work will be paid for by Afton, and done to provincial highway standards. The six-month statement shows the $1.26 million has been spent on production and administration of the potential mine, most of the money on a technical feasibility study to determine the quality of the copper ore. He said an economic study cannot be completed until the taxation situation is clarified."

The only taxation situation he refers to is the one brought on by the Liberal government in Ottawa. I repeat: he expects relief from the problem when federal Minister John Turner brings in the federal budget on June 23 — which I think is today, Mr. Member.

So if he doesn't give relief to this high quality mine that will come in production as soon as they get some relief from Ottawa, perhaps you can contact your Liberal friends down there to get a change in the Finance Minister.

MR. FRASER: Thank you, Mr. Chairman.

MR. J.R. CHABOT (Columbia River): Thank you, Mr. Chairman. (Laughter.)

MR. FRASER: Thank you very much, Mr. Chairman. My colleague here has had a few days rest and he's anxious to get going, but so am I.

I just have a few observations to make. First of all, as having the honour to represent the Cariboo where they found all the metals in the first place and British Columbia became a great and thriving province.

I would like to say, Mr. Chairman, to the Minister, that they didn't get all the gold and the copper and the other metals in the Cariboo, there's all kinds of them in there yet, but because of your policies and legislation, nothing is going on. But, Mr. Chairman, there is still a lot of gold in them thar hills up in the Cariboo. Lots of it.

I was surprised to hear a few minutes ago, the Member for Omineca (Mr. Kelly) chirping in. Regarding mining legislation, of all the people that should be standing on their feet talking about the repressive mining legislation, there's one Member, because we just got through a week-long debate on the B.C. Rail and the economics of that railroad and you know what is wrong there. One of the things is the mining legislation of this government.

That railroad was pushed from Fort St. James and it's on its way to Dease Lake and that country is full of metals, Mr. Chairman, absolutely full of them and not a single thing is going on there, and of course, the B.C. Rail is going to be more economic every day because all they're going to haul out of there is hot air peddled by the NDP. There won't be any backloads from the mining industry because they won't go in there under your legislation and develop

[ Page 3829 ]

anything.

The exploration has stopped. You have to have exploration. The exploration has stopped all over the province and following exploration there is lots of room for large mines along that rail extension. That is what it was originally put in there for.

I would like to deal for a minute on gold mining. We keep talking about copper all the time and we have lots of copper in the Cariboo. We have one of the best copper mines in British Columbia in the Cariboo — Gibraltar Mines just north of Williams Lake employing some 400 men. They're operating with the depressed world conditions and the royalties and so on and so forth, but the life of that mine has been cut in half because of your legislation. Any company executive will tell you that. Instead of probably operating 20 years that mine will be finished in 10 years because they can't afford to operate under your legislation.

MR. KELLY: You'd like them to pay nothing.

MR. FRASER: Certainly we'd like them to pay something, but not under the methods proposed here. Our party believes that they should be taxed on their profits and they've always been paying taxes. So have their employees. That's just another myth put in by the NDP socialists and they conducted this political myth in 1972. They'll never get away with it again in another election because everybody is asking questions now in depth and they're finding out some of the facts.

I would like to deal, though, with gold mining, Mr. Chairman, for a minute and tell you there's all kinds of gold still in the ground in British Columbia. There certainly is in the Cariboo and I'm sure there is even where the Minister has the honour to represent — the Kootenay riding.

What is happening in gold mining? Nothing is happening in gold mining and that is caused by the super-royalty provisions. Right now gold mining should be advancing.

HON. MR. NIMSICK: You're behind on your facts.

MR. FRASER: Gold is $160 or thereabouts an ounce right now. In the hungry 30's, Mr. Chairman, they mined all kinds of gold at $25 an ounce and made lots of money at it and we had hundreds and hundreds of people off the welfare rolls making good money those days. Now, with the price of that metal six times the price of that, nobody is bothering to get it out.

The other thing that I resent is this Minister lets the environmentalists through the Department of Recreation and Conservation run his department. He issues a prospector a mining licence and then the environmentalists come along and close him down because he's putting a little muddy water into some river or lake. I'm talking about the individual you wouldn't know anything about, Mr. Member for Omineca, and consequently they have to build impounding ponds and they can't afford to do that so nothing is happening. I think this is disgraceful.

The other thing about it is that in Wells, which is a small town near Barkerville where all the gold was found in the 1860's, last year there was a lot of exploration done there by a company. I believe they spent over $1 million and they found a viable body of ore to expand and put it into production this year.

The finance people were Home Oil out of Calgary. They have a subsidiary company called Mosquito Creek Gold Mining Co. They proceeded this year, then came down here, I understand, to find out if they could get relaxation of the super-royalty. They were told there was no way. They went back home and after spending $1 million, locked up this good, promising gold-mining property. If it had gone into production, it's my understanding that probably 100 jobs would have been created. That is how the impact is happening in a case that I know of.

There's a full-page story on it in the Cariboo Observer, published in Quesnel, Wednesday, May 21. The whole story is right there. I don't want to read all of it, but it gives the gory details of this company, the Mosquito Creek Gold Mining Co., and their experience. They've pulled out and don't intend to be back until you and your government are both gone, and the legislation is gone as well. I'm aware, Mr. Chairman, that they don't have to wait too long, but they are going to wait the length of time, which will probably be within the next 12 months.

I'd just like to comment on the copper smelter. There will never be a copper smelter built in British Columbia as long as these people are government. That is, there won't be a copper smelter built by the industry side — it would be ridiculous for them to go in under restrictive mining legislation that exists. They have no intention of going in; they won't go in.

HON. MR. NIMSICK: Did they give you that information?

MR. FRASER: Well, they've hinted at it — yes.

HON. MR. NIMSICK: Did they give you that information?

MR. FRASER: I'm making that a flat statement. You can deny it if you want to, Mr. Minister, but they will not go in. They probably will go in if you build it — and that's probably what will happen. That's the last thing the industry wants is for you to go in and build and run a copper smelter. So, all in all, we have a lot of people out of work in British

[ Page 3830 ]

Columbia. As far as the mining industry is concerned, there will be a lot more out of work before there are changes in the legislation that's stopping all this activity throughout this whole province.

MR. CHABOT: Mr. Chairman, just a couple of brief questions to the Minister and the government that cares, but the government that fails to take recognition of the fact that in British Columbia we have over 100,000 people unemployed. This is the government of the little people — those 100,000 people who are unemployed in this province today are little people who are seeking work, seeking a livelihood. Yet you and your government have virtually destroyed the mining industry in this province. We now have in this province 15 major ore bodies that could realize an investment of over $2 billion, that could create directly and indirectly over 46,000 jobs. We could almost look after 50 per cent of the people who are unemployed in this country — not only in British Columbia but in this country as well. Because of its repressive tax legislation against the mining industry, this government is unwilling to help those people who are seeking employment in this province.

Interjection.

MR. CHABOT: It's absolutely disgraceful. The Member for Saanich and the Islands (Mr. Curtis) says that we have one-seventh of all the unemployed people in this country. Yet the government sits there and wants to destroy the second most important industry in this province. It's all right for the Minister who is retired from Cominco in Kimberley, who has the pension from that mining industry….

HON. MR. NIMSICK: Don't get personal.

MR. CHABOT: …who not only has a pension from Cominco, he has the old age pension as well. Now he's comfortable here in British Columbia as Minister of Mines with a pension of $48,000 a year plus expenses, I believe, of $6,000 or $7,000 a year. It's all right for you with these pensions and these fat salaries to be unconcerned about those people who need employment in this province while you destroy their means of employment by your repressive legislation. It's about time you recognized the kind of evil you've put on the mining industry and on the ability of people to earn a living in this province.

Mr. Chairman, I want to refer to an article that appeared in the Vancouver Province on Saturday, June 21, that concerned me as I read it this morning. It has to do with grants to prospectors:

"Prospectors' grants under provincial legislation should be mailed to more than 175 recipients by early next week, according to Hart Horn, Association Deputy Minister of Mines and Petroleum Resources. Asked about complaints by a number of applicants that they had been informed they would receive grants a couple of weeks ago but no money has been forthcoming, he admitted there had been delays.

"Part of the trouble has been that the Mines department estimates have not been approved, and like other government departments, it is short of money."

I take exception to that kind of a statement, Mr. Chairman, because we passed two supply bills here to allow the proposed expenditures of your department to proceed up until such time as your estimates have been approved in this Legislature. You know full well that has taken place.

I'm fed up, Mr. Chairman, of political hacks such as Hart Horn making irresponsible political statements out in the public. It is about time, Mr. Minister, through you, Mr. Chairman, that you stop that political hack Hart Horn from making irresponsible and political lies about the funds that are available to you and the reasons why funds aren't available to prospectors. It is an absolute lie he's telling throughout this province, and I resent those kinds of lies coming from a political hack who is Associate Deputy Minister in your department. I take strong exception to that.

You know, I don't mind, if there are no funds available, telling these people that funds aren't readily available. But to tell lies by a political hack from Saskatchewan brought in by your government to assist you in running your department — I take strong exception to that. He's destroying the mining industry. That's what he's come here for: to destroy the mining industry in this province. I don't take kindly, Mr. Chairman, as I said before, to those kinds of lies from political hacks.

Now one other matter, Mr. Chairman. I want to ask the Minister regarding the mines in Trail and the allocation of $800,000. There was an allocation last year of $800,000 for….

MR. CHAIRMAN: A point of order?

HON. MRS. DAILLY: I would like to have a ruling from you on the reference by the Hon. Member on his feet to a civil servant as a "political hack." Could we have a ruling on that?

My point is that I consider it very unparliamentary and should be withdrawn.

MR. CHABOT: On the same point of order, Mr. Chairman, Hart Horn is not a civil servant.

AN HON. MEMBER: He is a civil servant.

[ Page 3831 ]

MR. CHABOT: He is not a civil servant. He's appointed by order-in-council. He's a political hack.

Interjections.

MR. CHAIRMAN: Does the Minister wish to comment on the point of order?

HON. MR. NIMSICK: Well, Mr. Chairman, I feel that this attack on a civil servant is uncalled for. Mr. Horn was the head of the revenue division prior to being promoted to Associate Deputy. He's a member of the civil service and I am very proud of his actions and his operations. I've been here a long time before Mr. Horn was born, and I'm sure I didn't have him to write those speeches back 20 years ago.

MR. FRASER: That's the problem.

HON. MR. NIMSICK: I feel it is uncalled for, and I think that it is not too worthy of the Hon. Member for Columbia River (Mr. Chabot), because he is one that I didn't think would take that kind of a tactic, either personally on myself, being an old-age pensioner, or these things, because he's going to get there someday too, and I don't see why he should remind me of my age. (Laughter.) It makes me feel a little bit bad.

MR. CHAIRMAN: On the point of order, I have been advised that it is not normal, indeed not acceptable procedure, to attack a civil servant in this House when that person is not here to defend himself. If the Member does want to follow that route, he would have to do it on a substantive motion.

MR. CHABOT: Well, Mr. Chairman, first of all I want to apologize to the Minister if I made him feel bad by calling him an old-age pensioner. You know, there is nothing wrong with being an old-age pensioner. Nevertheless, if the Minister objects to my reference in that regard, I certainly won't make that reference again.

On the other matter, Mr. Chairman, I have never, in the 12 years I have been a Member of this House, attacked a civil servant. But I have had no hesitation, since this government has come to office, to attack political hacks. Hart Horn came to this province from Saskatchewan as executive assistant to the Minister of Mines.

AN HON. MEMBER: Withdraw! Withdraw!

MR. CHABOT: He came here as executive assistant, and what he did at the outset was to give the Minister of Mines odd jobs in his office while he ran the department. Then eventually he infiltrated, through some means, into the civil service. But at the very moment he is no longer a civil servant. He can be summarily dismissed by the government by a withdrawal of the order-in-council appointment which he presently enjoys.

I want to say this emphatically, without any retraction whatsoever, to the Deputy Leader of the Government (Hon. Mrs. Dailly), that I take strong exception to an Associate Deputy Minister employed by order-in-council issuing political lies to the public, issuing political lies about the reason why grants are not available to prospectors. Absolute lies! I'm not going to tolerate those kinds of lies by political hacks.

MR. CHAIRMAN: Order! Order!

MR. CHABOT: I've said that before, and I'm not going to withdraw that.

MR. CHAIRMAN: Order! Order, please.

If the Member wishes to attack the policies of the Minister of Mines, as carried out by an Associate Deputy Minister, he is free to do so. But as I mentioned before, a personal attack on an individual who is, in fact, an Associate Deputy Minister is not in order in this House.

MR. CHABOT: It's not a political attack, Mr. Chairman, it's an attack on a statement he has made to the press as to the reason why prospectors' grants are not available in this province, the reason why there's been a delay and the reason why the maximum is not available to the prospectors of this province. He's made that statement. I'm attacking the statement he made. After we passed two supply bills in this House, I take exception to him using political motivation to justify the reason why grants aren't available to prospectors in this province.

Now I want to ask the Minister, regarding the $800,000 allocation for roads and trails in the province, what sum was expended last year. The reason why…. Are you rising on a point of order?

MR. CHAIRMAN: The House Leader on a point of order.

HON. MRS. DAILLY: I asked for a ruling by the Chair, which was given, on what I considered unparliamentary attack by the Hon. Member on a public servant.

MR. CHABOT: Not a public servant. I have never attacked a public servant in my life.

HON. MRS. DAILLY: We have to abide by the public service oath, and I believe that nothing has been done. The Hon. Member has continued, and I suggest that he should withdraw that statement

[ Page 3832 ]

"political hack."

Interjection.

MR. CHABOT: I wish you'd tell the truth for awhile.

AN HON. MEMBER: You wouldn't recognize the truth if you saw it.

MR. CHABOT: Neither would you.

Interjections.

MR. CHAIRMAN: I've been advised that the word used to describe Mr. Horn is not unparliamentary, however, certainly it is not in order to attack the conduct of a high civil servant during the debate on the Minister's estimates. I would like the Hon. Member, and this is the third time I'm asking him, to use restraint in his remarks relative to this topic.

MR. CHABOT: Well, Mr. Chairman, I'm able to use restraint, no doubt about this. But my strong objection was to reading this in the newspaper — a statement made by the Associate Deputy Minister regarding the reason why funds are not available to the prospectors. I was appalled and shocked to see this in the press, that he's making political statements to justify the reason for the delay.

Regarding the $800,000, there's concern expressed by people making applications today for roads and trail allocation. We are into the latter part of June, and dollars haven't been allocated. When are they going to build roads? Half of the year has gone by. I realize that in the first quarter of the year the roads can't be built, but the time is on us in which roads and trails should be constructed to assist prospectors and to assist opening of mines. You've done everything else to destroy mines. Are you going to disassociate yourself from the $800,000 that you have allocated here? Is there going to be allocation? Are the dollars going to be flowing forthwith? I'm informed that the money is not available at this time.

HON. MR. NIMSICK: Mr. Chairman, to correct one impression. The money that's allowed to be spent each month is one-twelfth of the total amount. When they say that there is a delay…you can't very well give one-twelfth of prospectors' assistant grant to the person because it wouldn't work very well. So I don't think that Mr. Horn made any wrong statements when he gave that to the press. Yes, we haven't got the full amount. Don't forget, with prospectors' assistance we need the full amount almost at the start because now is the time they want to get out and prospect. So I'm in hopes that the estimates do get through fairly quickly so that they can give the full amount and get rid of it. We've got a terrific number of applications, and actually, even with the big increase, we're going to very likely be short of money for prospectors' assistance.

MR. CHABOT: How about the $800,000?

The House resumed; Mr. Speaker in the chair.

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

Leave granted.

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 12:02 p.m.