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CONTENTS

Public Works Fair Employment Act Repeal Act (Bill 35).

Mr. Wallace. Introduction and first reading — 557

Statement

Details of Ottawa finance ministers' conference. Hon. Mr. Wolfe — 557

Mr. Gibson — 558

Routine proceedings

Oral questions

Abridged budget. Mr. King — 558

Vancouver International Airport. Mr. Gibson — 560

Hat Creek coal studies. Mr. Wallace — 560

Thompson River system report. Hon. Mr. Nielsen answers — 560

Budget debate (continued)

Hon. Mr. Nielsen — 562

Mr. D'Arcy — 564

Mr. Shelford — 568

Supply Act, No. 1, 1976 (Bill 10) Committee stage.

On section 1.

Mr. Nicolson — 574

Hon. Mr. Wolfe — 574

Mr. Nicolson — 574

Mr. Gibson — 575

Amendment to section 1.

Mr. Gibson — 575

Mr. King — 575

Hon. Mr. Bennett — 575

Mr. Cocke — 576

Mr. Chairman rules out of order — 576

Mr. Lauk — 576

Mr. Gibson — 577

Mr. Chairman — 577

On section 1.

Mr. Lea — 577

Mr. King — 577

Hon. Mr. Wolfe — 577

British Columbia Deficit Repayment Act, 1975-1976 (Bill 3).

Committee stage.

On section 1.

Mr. Lea — 578

Hon. Mr. Wolfe — 578

Mr. Lea — 579

Hon. Mr. Wolfe — 579

Mr. Macdonald — 579

Mr. Skelly — 579

Hon. Mr. Wolfe — 580

Mr. Skelly — 580

Mr. Stupich — 580

Hon. Mr. McGeer — 581

Mr. Lauk — 582

Hon. Mr. Phillips — 582

Mr. Lea — 582

Hon. Mr. Bennett — 583

Mr. D'Arcy — 583

Mr. Lauk — 583

Mr. Levi — 584

Hon. Mr. Bennett — 585

Mr. Skelly — 585

Hon. Mr. Wolfe — 585

Mr. Lauk — 586

Mr. Stupich — 586

Mr. Gibson — 587

Hon. Mr. Wolfe — 587

Mr. Stupich — 587

Hon. Mr. Wolfe — 588

Mr. Stupich — 588

Hon. Mr. Wolfe — 588

Mr. Skelly — 588

Mr. Macdonald — 590

Hon. Mr. Wolfe — 591

Mr. Macdonald — 591

Hon. Mr. Wolfe — 591

Mr. Lauk — 591

Hon. Mr. Wolfe — 592

Mrs. Dailly — 592

Hon. Mr. Wolfe — 592

Mr. Skelly — 592

Hon. Mr. Wolfe — 593

Mr. Skelly — 593

Mr. Gibson — 593

Mr. Cocke — 593

Mr. Lauk — 594

Mr. Nicolson — 594

Hon. Mr. Wolfe — 594

MONDAY, APRIL 5, 1976

The House met at 2 p.m.

Prayers.

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, I'd like to make welcome some guests with us today. In the gallery, among other guests, we have Mr. Walter Morris from Harrisburg, Pennsylvania, who is the international president of the American Waterworks Association, representing water utilities of North America, and having 24,000 members.

In addition, from our neighboring province of Alberta we have three guests today, two of whom are in the gallery: Mr. Walter Solodzuk, the Deputy Minister of Environment; Mr. T.C. Roberts, who is executive assistant to the Minister of Environment; and on the floor today with us we are very pleased to have the hon. Dave Russell, who is the Alberta Minister of Environment.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, not to be outdone in terms of distance of visitors, I would introduce in the gallery today first of all a visitor from a close place, Alderman Helen Boyce of the city of Vancouver, and Mr. Panos Sarantopulos, her cousin and a visitor from Athens, Greece.

MR. W.G. STRONGMAN (Vancouver South): Mr. Speaker, I would like today to have the House recognize and welcome a group of grade 11 and 12 students from David Thompson School, who are visiting with us today with their teacher, Mr. Ellis.

MR. E.N. VEITCH (Burnaby-Willingdon): Mr. Speaker, I would like the House to make welcome a long-time acquaintance and friend in the gallery today, Mr. Peter Barnet.

MR. W. DAVIDSON (Delta): Mr. Speaker, in the gallery today is the mayor of Surrey, Mr. Ed McKitka. I'd like the House to join in welcoming him here.

Introduction of bills.

PUBLIC WORKS FAIR
EMPLOYMENT ACT REPEAL ACT

On a motion by Mr. Wallace, Bill 35, Public Works Fair Employment Act Repeal 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.

Presenting reports.

Hon. Mr. Fraser presents the Department of Highways and Public Works report for the year ending March 31, 1975.

HON. E.M. WOLFE (Minister of Finance): Mr. Speaker, I ask leave to make a brief statement.

Leave granted.

HON. MR. WOLFE: Mr. Speaker, this has to do with my recent attendance at a finance ministers' conference in Ottawa.

I just attended a two-day meeting of finance ministers there to discuss the future changes in the Fiscal Arrangements Act which expires in 1977. I can only say that in general terms I was disappointed with the outcome of this first conference since much of the restraint which the federal government is attempting to exercise has come at the expense of the provinces.

The meeting included discussion of the equalization programme, the post-secondary education financing and the revenue guarantee, a system designed to protect provinces against the effects of the tax reform measures introduced by the federal government in 1972.

I expressed particular concern over the unilateral action the federal government has taken on the revenue guarantee. The decision to abandon this programme in 1977 produced serious problems for all provinces, including B.C. British Columbia has received federal payments under this programme since 1972, which simply proves that the changes to the tax system in 1972 adversely affected provincial revenues as claimed at the time by the province.

The federal government has given every indication in the past that it would put forward new proposals after 1977. It therefore came as a great shock to the provinces to be told at this meeting that they intended to abandon the revenue guarantee after 1977. This will place a great strain on provincial budgeting in future years.

In addition, the federal government has also changed the method of calculating the present guarantee programme, and this is retroactive to 1974. This change has reduced the province's revenue expectations. As an example, for the 1974 year the province will lose $14 million and in subsequent years the loss will be much greater. This, regrettably, sets a poor tone for the important negotiations that are beginning between two levels of government during this year.

I also indicated to the federal government that the 15 per cent limit placed on the federal share of post-secondary education costs has particularly worked to the disadvantage of B.C. The strong

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expansion of B.C.'s post-secondary education in recent years, combined with the federal limits in sharing, has placed a greater burden on the provincial treasury. B.C. Is looking for a fairer financing arrangement in the post-secondary education field in the negotiations which are to continue through 1976.

We also presented to the meeting our view that the discussions on the Fiscal Arrangements Act must include discussions of the financial aspects of other major shared-cost programmes such as hospitalization, medical care and income maintenance.

I would like to emphasize to this House, Mr. Speaker, the importance of the present discussions with the federal government. We intend to take a vigorous part in negotiations to protect the province's position. After considerable objections from the ministers of finance, the federal government agreed to withhold any action in connection with the proposed changes in the revenue guarantee until provincial premiers could discuss the matter with the Prime Minister of Canada at a meeting to be held possibly in May of this year. I might say that our own Premier has already requested this to be an item of priority for the agenda of the Western Premiers' Conference on April 28 and 29, which leads up to the First Ministers' Conference later this spring.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, on behalf of my party I would thank the minister for his report to the House, and suggest that he will probably be assured of all-party support on any questions of provincial rights.

I would encourage him, as he reviews the questions he has brought to our attention, to study the possibility and the possible benefits to British Columbia of entering into a considerable expansion of the opting-out programme in order that we may avoid these kinds of difficulties in the future by regaining our own tax points and allowing British Columbia to set our own expenditures according to our own priorities with the use of our own tax funds.

Oral questions.

ABRIDGED BUDGET

MR. W.S. KING (Leader of the Opposition): Mr. Speaker, on Friday night a copy of a new and abridged budget was directed to the hon. member for Prince Rupert (Mr. Lea).

Perusal of that new budget, Mr. Speaker, indicates that changes have been made despite the fact that the introduction indicates that this document was delivered in the Legislative Assembly on Friday, March 26, 1976, and the fact that debate has been underway on the contents of that budget for a considerable period of time since, I wonder if the Minister of Finance can assure the House that the financial information and the budgetary matters dealt with are the same in the two documents. Or is the only change related to the conclusion of the budget?

HON. MR. WOLFE: Mr. Speaker, in response to the Leader of the Opposition's question I will be happy to enlarge on that and, if I may, just make a comment or two about the situation I also read about in the news media over the weekend about which you ask the question now. Recently there have been statements in the media regarding the distribution of the 1976 budget speech, and I think it might clarify the situation if I just made a comment or two.

Firstly, there are two editions of the budget speech, you might say, currently being distributed. Neither edition conforms exactly to the speech as given in Hansard, as this would be impossible. This procedure also conforms to the established practice in prior years of release of the budget speech. If you go back and look at prior years' budgets, the actual distribution speech does not conform to quite a degree to what you might read in Hansard. The second edition of the speech differed from the first edition only by the deletion of all but the first three paragraphs of the conclusion which you referred to — on page 34. The so-called second edition which I am referring to was prepared in abbreviated form for distribution to the financial markets and for other governments outside of British Columbia. It was felt that the last few paragraphs of the conclusion were important to be stated to British Columbians but, on the other hand, had no bearing on the financial markets of other parts of North America.

Interjections.

HON. MR. WOLFE: This minor abbreviation in the speech had no bearing whatsoever....

Interjections.

MR. SPEAKER: Order!

HON. MR. WOLFE: I ask, Mr. Speaker, the members to wait and hear the rest, because they might be interested in what follows.

This minor abbreviation in the speech had no bearing whatsoever on the budget itself, as you asked, or in the economic presentation. I direct your attention to former budget speeches and the fact that the speeches given in Hansard differ substantially from the speech which was distributed. For example, the 1975 budget speech given by the former Premier and finance minister (Mr. Barrett) differs considerably between Hansard and the speech as distributed in that there are several sections spoken in the House and not recorded in the distributed

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version, and, on the other hand, there are also sections which appear in the distributed version...

HON. D.M. PHILLIPS (Minister of Agriculture): Right on!

HON. MR. WOLFE: ...that do not appear in Hansard. I might refer the members of this House to last year's Debates of the Legislative Assembly dated the same date as the budget came down — Friday, February 29. You only have to look through there to see not one, not two, but 20 or 25 or 30 differences between what is presented in the speech and what one finds in the distributed version.

MR. G.R. LEA (Prince Rupert): Nobody's arguing with you.

HON. MR. WOLFE: Well, that's fine. I really think it should be pointed out to all members of this House that it is not unusual at all to find expressions in Hansard of a considerable nature.

MR. G.V. LAUK (Vancouver Centre): Don't be so defensive.

HON. MR. WOLFE: As a matter of fact....

MR. KING: Mr. Speaker, I would just like to point out two or three items.

MR. SPEAKER: Order!

MR. KING: I am asking for an answer to the question and I think some latitude has been granted, but....

MR. SPEAKER: Hon. Minister, perhaps if you would refer to the document you have in front of you and the pages that it's contained in in Hansard, the members can look it up for themselves.

HON, W.R. BENNETT (Premier): The financial information was left in.

MR. SPEAKER: The Member for Oak Bay on a point of order.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, since this contentious issue was originally raised under privilege, would it not seem reasonable to avoid taking this time, valuable as it is, out of question period and raising the matter again under privilege?

MR. SPEAKER: The matter, as you know, was settled on Friday about privilege, You also know the fact that the hon. Leader of the Opposition asked a question, and the Minister of Finance is replying to that. I would suggest that he keep it as concise as possible.

HON. MR. WOLFE: Mr. Speaker, I would be glad to do that and I will be very brief. Once again, it would appear that the members ask questions that they don't want to have answered.

Interjections.

MR. SPEAKER: Order!

HON. MR. WOLFE: Mr. Speaker, I refer the members to pages 263, 264, 265 and 267 in the listing of these debates. In so doing, I would like to emphasize the fact that these differences in last year's budget speech are substantive differences in material content...

MR. LEA: We're not even arguing.

HON. MR, WOLFE: ...whereas I would suggest the matter referred to here today is relatively immaterial. So, Mr. Speaker, I trust this brief explanation will really satisfy all members of the House on the question being raised.

MR. KING: A supplementary question, Mr. Speaker. I submit that this is complete abuse of question period. I asked a specific question not for a political diatribe and a debate. I did not ask about records of Hansard; I asked whether we could have the Minister of Finance's assurance that only the conclusion of the original budget speech has been changed, but that the financial data contained therein remain constant.

He has given that assurance, but I wonder, Mr. Speaker, why on the weekend the Minister of Finance indicated to the media that he was not aware of any change in the budget. I ask him who authorized the change in the conclusion of the budget, because this is the first time in the history of this province that there have been two editions of the budget speech. The first time! And we are debating a document in this House, Mr. Speaker, that we must have assurance is continuous and consistent with the original introduction of the budget speech.

MR. SPEAKER: Hon. Member, your question is out or order. I will refer you to comments from Beauchesne which say: "To inquire whether statements made in the newspaper are true or not is not a proper question in question period."

AN HON. MEMBER: That's not the question.

MR. KING: Mr. Speaker, I think it's of important enough nature that we must have some assurance. I

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think Mr. Speaker himself would want to be assured that there was proper authority for tampering with a document that was introduced in this House. On whose authority was it changed?

HON. MR. WOLFE: Mr. Speaker, not to prolong the discussion, but I do want to satisfy the member and all members of this House that there has been no substantive change in the budget through these.... There's been no substantive change at all, and the budget itself goes out in several different forms, as it has done so before. If you want to refer to political statements being made, refer to last year's budget speech.

MR. KING: Mr. Speaker, on a supplementary: who authorized the editing and the change in the budget speech as it was presented to this House? There are two editions now.

AN HON. MEMBER: The government.

MR. KING: The pages are altogether different; the conclusion doesn't even start on page 34 any more. Who authorized that "change, can the Minister answer?

HON. MR. WOLFE: The government.

VANCOUVER INTERNATIONAL AIRPORT

MR. GIBSON: Mr. Speaker, a question to the Minister of Transportation and Communications in his capacity as provincial spokesman on transport questions: is the Minister prepared to develop a provincial position on the matter of the second major runway at Vancouver International Airport, and make representations in this regard to the federal minister?

HON. J. DAVIS (Minister of Transport and Communications): Mr. Speaker, as the hon. member knows, that is substantially a matter of federal jurisdiction. I will, however, take his question as notice.

MR. GIBSON: A supplementary, Mr. Speaker: in view of the large meeting to be held on this question in Vancouver tomorrow night, will the province be represented at that meeting? —

HON. MR. DAVIS: I'm not aware of the meeting, Mr. Speaker, but I'll take it as notice.

HAT CREEK COAL STUDIES

MR. WALLACE: Mr. Speaker, I'd like to direct a question to the same Minister of Transport, but responsible in his office for B.C. Hydro. With regard to recent bids for engineering studies of the proposed Hat Creek coal. development, is it a fact that a short-list of three companies of engineering consultants has been selected by B.C. Hydro, and that all three companies are American companies, even though several other companies, totally Canadian-owned, were also bidding?

HON. MR. DAVIS: Mr. Speaker, it is a fact that there is a short-list of three companies. I believe those three companies have strong American connections.

MR. WALLACE: Mr. Speaker, on a supplemental: since the Americans have a clear statement of policy at the border that nobody will be employed in an American job that can be done by an American, is the Minister realizing the unemployment in British Columbia and the fact that many consulting engineers are unemployed? Has he issued any directive to B.C. Hydro instructing B.C. Hydro to give preference to Canadian-owned companies?

HON. MR. DAVIS: Mr. Speaker, I'm certainly aware of the problems posed by the hon. member, but no directive to that effect has as yet been issued.

MR. WALLACE: Just a quick final supplemental, then, Mr. Speaker: is the minister in a position to tell us what is the dollar value of the contract that the three short-listed American companies are still competing for?

HON. MR. DAVIS: It's a multi-million-dollar contract, but I would have to take the detail of the question as notice, Mr. Speaker.

THOMPSON RIVER SYSTEM REPORT

HON. MR. NIELSEN: Mr. Speaker, in response to a question asked Thursday, a supplemental question from the member for Prince Rupert (Mr. Lea) and regarding a report relative to the Thompson River system, I prepared an answer. I offered a copy to the member for Prince Rupert, and I'd like to read the reply to the original supplementary question, I believe it was.

It's with reference to a summary report on sources and effects of algae growth, colour-forming and fish-tainting in the Thompson River system. The report was prepared by the Department of Environment Canada and the provincial pollution control branch, water resources service, and the experts working for these two organizations as a result of complaints in 1971 concerning deteriorating water quality in the Thompson River system.

The summary report was co-authored by R.H. Kussat and Dr. J.M. Olan. It was transmitted to the regional director of the environmental protection

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service and to the director of the pollution control branch in December, 1975. After a review, a meeting was held on January 8, 1976, in the offices of the environmental protection service in West Vancouver. This meeting brought together the two principal dischargers named in the report, the city of Kamloops and Weyerhauser Canada Ltd., and the authors of the report and the members of the study committee.

The purpose of holding the meeting was (1) to fulfil a commitment, made in 1974-1975 to the city of Kamloops, that the report would not be released without first making them aware of the report's contents, (2) to permit the dischargers named in the report to clarify with the authors the meaning of various sections of the report and (3) to advise the dischargers as to the method by which the recommendations of the report" would be implemented, mainly on orders from the director of pollution control issued under the jurisdiction of a provincial statute, the Pollution Control Act, 1967.

The order is in the form of a permit; amendments would follow the availability of the technical reports and would be subject to appeal in the normal way. It's noted that the letter transmitting the report to the directors, dated December 1, 1975, stated: "The findings and conclusions of the summary report reflect the overall view of all task force submissions and therefore may vary slightly from those expressed in the individual technical reports." At this meeting, the directors inquired as to when the back-up technical reports would be available, and in the absence of these reports how to determine the degree of variation referred to in the letter of transmittal.

One final comment. Following discussion by the study committee, the authors agreed clarification of certain sections was required prior to final printing, which was done by the federal Queen's Printer in late January, 1976. Three hundred copies of the report were printed, and besides being distributed to federal and provincial government departments, copies were made available to such public groups as the Steelhead Society, Savona Community Association, Spences Bridge chamber of commerce, B.C. Cattlemen's Association, Pacific Trollers Association, United Fishermen, and the Native Indian Brotherhood of B.C.

MR. LEA: Supplementary. Did any of the environmental groups concerned in this matter have the same courtesy extended to them as was shown to the city of Kamloops and Weyerhauser? In other words, did any environmental group get a sneak preview before going to the Queen's Printer?

HON. MR. NIELSEN: I would have to take that question as notice. The report as offered to me seemed to cover most of those but if you'd like I will check that out as well.

MR. LEA: One final supplementary you can check also. Who authorized the meeting in January between Weyerhauser, the City of Kamloops and the people mentioned in your answer?

HON. MR. NIELSEN: I am not sure that authorization as such was required. I believe the arrangements were originally made some time back by the deputy minister of the department that such a meeting would take place when the information was available for the technical people.

MR. KING: Point of order, Mr. Speaker.

I wonder if you might not, in the interests of preserving question period in this House, direct that ministers, when they have answers to give that are that lengthy and take up such a large bulk of the question period, would simply table those answers with the House rather than take tip the time of question period.

[Mr. Speaker rises.]

MR. SPEAKER: Hon. Members, may I make a comment, please?

There is a problem for the Speaker, as in most Houses, I presume, in question period, and that comes about when people ask questions and the questions are taken as notice, and then the reply comes back to the floor of the House some other day of the session. It would seem to me that if the original questioner wishes the answer, then it's entirely in keeping for the minister to give that answer. But I would suggest, in order to preserve as much time as possible in question period for answers and for questions, that the ministers who find the answer to be of quite a long length, or will take several minutes to deliver, might well ask leave before the question period to table that answer, or table it in the House.

On the other hand, I would hope that the hon. members who ask questions would extend the courtesy of the House to the ministers who are trying to give answers.

[Mr. Speaker resumes his seat.]

MR. KING: Mr. Speaker, for your comment on this matter, this matter came up some time previously when oral questions by members were allowed. That was during the government of the New Democratic Party. It is in the hands entirely of the Speaker, and we're delighted that Your Honour is taking this matter seriously. Ministers should be encouraged to give very short, concise answers and, on the other hand, questioners should give short, concise questions. If answers are to be long, ministers should do one of two things: either, say, put it on the order

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paper — that's unusual, but they could do that — or, what is more proper, ask leave as Your Honour has indicated, not taking up this valuable time. I refer to the example given by the Minister of Labour (Hon. Mr. Williams) some days previously, an example which should be followed by all of his colleagues.

Orders of the day.

ON THE BUDGET

(continued debate)

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, I will resist the temptation to read that answer again. It was almost a speech unto itself — I appreciate that.

It is indeed an honour and privilege to address this assembly in my new role as MLA for the electoral district of Richmond. Mr. Speaker, I, too, would like to express my congratulations to you in your new role as Speaker of the House and to the hon. member for Chilliwack (Mr. Schroeder), who was chosen to be Deputy Speaker. It is without question that this House will be served most successfully by its wisdom in choosing such capable members for these positions.

In that this is my first speech of any length in this assembly, I feel pleased to recognize the other hon. members who are joining in this venture of active politics for the first time. I share with them their pleasures and their anxieties. I recognize as well the contribution and wisdom of those members who are continuing to serve our province with their presence in these chambers.

I would like to offer to this House a few brief comments about the municipality of Richmond, one of the most important communities in this magnificent province. Richmond will be celebrating its 100th anniversary as an incorporated township in just three years' time — November 10, 1979 — and by that time will have a population exceeding 100,000 persons. Presently an estimated 85,000 people call Richmond their home with great pleasure.

The character of this municipality has diversified over its long history from an unexplored series of islands in the late 1800s, to fertile farmlands on Lulu and Sea Islands, to the salmon capital of the world with its dozens of canneries by the turn of the century, to the industrial and residential development of later years and continuing with all of these aspects today.

The municipality of Richmond historically has welcomed persons from around the world almost since its beginning: the early adventurers from the British Isles and European nations, the influx of Japanese at the turn of the century, to where today Richmond has the distinction of containing the largest concentration of Japanese — approximately 4,000 citizens — in any one area of Canada. In Richmond you will find representatives of every race or nationality of the world contributing to the success of this fine community.

Since its earliest days of settlement by such pioneers as Hugh McRoberts, Thomas Kidd and many others whose names are still recognized by placenames in the municipality, to the latest family to move into Richmond yesterday, Richmond has often been in the forefront of progress. We are most pleased to be the home of the Vancouver International Airport. It is of some historic interest that in 1910 it was Richmond where western Canadians were first to witness the flight of an airplane.

The long history of service associated with Richmond goes back as far as 1894 when Richmond had its first MLA represented in Victoria: the gentleman I referred to earlier, Thomas Kidd, was the first MLA for Richmond. Of some interest, his great-grandson, Mr. Gil Blair, is now the mayor of Richmond.

Richmond today is very typical of the areas of this province which find themselves faced with the social problems common to our day: the problems of space, transportation, recreation, housing, education, policing and income. Mr. Speaker, the needs of our community are many, among which are proper access to the mainland area because of our unique dependency upon bridges; the internal drainage problems which we share with our neighbouring suburb of Delta; the need for facilities to maintain our thriving fishing industry. I am pleased to say that some action seems to be forthcoming from the federal government for the construction of a major harbour in the Steveston area. We are quite encouraged to see some progress after many years of waiting — in fact, after almost 20 years of waiting.

Our recreational needs are many, as are our educational and hospital requirements. Services offered to the citizens of Richmond by the provincial government are sometimes in short supply because of a tradition. It has been traditional for Richmond residents to make use of such facilities in Vancouver or elsewhere in the greater Vancouver area. While it seems to be very natural to make use of such services in neighbouring municipalities, we find a burgeoning population in excess of 85,000 people who are denied some basic services which you would find in most other urban areas of the province.

The time has arrived, Mr. Speaker — in fact, the time is much overdue — when this municipality of Richmond no longer be regarded as a flat, sleepy, bedroom suburb of the greater Vancouver area. The time is now that Richmond be recognized as a major centre of population in this province. I'm sure it will begin to receive such recognition by senior governments so that the municipality may function internally without the dependency for services from

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the neighbouring areas.

It's been my pleasure to share the good life available in Richmond for the past 25 years and, indeed, an honour to represent this community as MLA. Mr. Speaker, our government has bestowed the honour upon me to be the first Minister of Environment for the Province of British Columbia. We recognize the changing attitudes and needs of our society to preserve our environment so that the citizens of this province will better be served by government and so our precious natural heritage will be protected.

It is the responsibility of the Department of Environment to work together with other government departments so that the environment — the land, the water and air — will be given the greatest of consideration as we endeavour to develop the province to provide the jobs and incomes necessary to maintain a high level of service to our people.

It's most gratifying to find public service personnel in the Department of Environment capable and most willing to execute their duties to permit the Department of Environment to function efficiently and intelligently. Most of these senior public servants, I am pleased to say, have already served this province very well for many, many years, and I intend to ensure that these public servants are recognized for their continuing efforts.

The hon. Minister of Finance has revealed to the House that in excess of $43 million will be allotted to the Department of Environment for the upcoming fiscal year. It will be my duty to ensure that such moneys are wisely used to fulfil this government's obligation to the environment of this province.

The environment encompasses many aspects of our lives. Most obvious, of course, are the elements of the province — the land, the water and air. But environment also encompasses much more — what we may refer to- as the social environment. This social environment will play a large part in the actions of this department over the years, because very often what we do to our land we do to the people who live on that land.

Our budget day message to the citizens of British Columbia appears to have been well received. While acknowledging the lack of popularity raising taxes brings, Mr. Speaker, this government has faced the problems of the province squarely, and through intelligent consideration and study has decided on its course of action. That is direct confrontation with the enemy: inflation, the growing cost of government and the wasteful habits of government departments. All of these elements contribute to the decline in our standard of living.

There will be those who will decry the methods used by this government in an attempt to bring the provincial economy back into full production, but we recognize, I am sure, Mr. Speaker, that such arguments are in part attempts to appeal to the citizens of the province, some of whom have been encouraged to keep their hand out looking toward government to give, give and give more, without being asked to make their contribution towards the betterment of all. It's patently obvious that there's nothing in life which is free. We have accepted the challenge of the times and have reacted quickly in an attempt to facilitate the needs of this province for the betterment of its citizens.

The budget, as presented by the Minister of Finance, is a clear indication that this government is not about to play games with the people and that this government will not choose what may be the most popular method of balancing the budget, just to keep the criticism away. We have chosen what we believe is the necessary route to return a stable economy to this province in order that we may avoid the destructive path onto which we were heading, thanks to impractical and strangely motivated options chosen by the previous government. .

This government has accepted the overwhelming mandate from the people of British Columbia, and it's our intention and obligation to pursue a course which will enable this province to remain strong, not only for the time of this mandate but for years to come. We will not be charged with having short-term goals designed to fool some of the people some of the time, in a vaguely hidden attempt to buy the votes of some of the public.

The people of the province of British Columbia have a right to be permitted to expand and improve their lives through the most basic of lifestyles: the lifestyle which has served us so well for more than a century, the lifestyle which permits an individual to improve his position in life through honest effort without the heavy hand of government interfering in an attempt to prove some poorly conceived political theory.

Mr. Speaker, government has an obligation to the people it serves, and that obligation, in part, is to provide an environment which will encourage growth — expansion while maintaining order and freedom. Governments too often have forgotten their role in life and have attempted to become a substitute, hoping that the citizens will then become so dependent upon government for the most basic things of life that they will forever return that government to power, afraid not to for fear of doing without the essentials.

I'd like to go back 200 years to a British professor by the name of Alexander Tyler, who seemed to be a man of his time then and seems to be a man of the times today. One of his best known quotations, to quote from Alexander Tyler in 1775, is this:

"A democracy cannot exist as a permanent form of government; it can only exist until the voters discover that they can vote themselves

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largesse from the public treasury. From that moment on the majority always votes for the candidates promising them most benefits from the — public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by dictatorship.

"The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: from bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to apathy; from apathy to dependency; and from dependency back again to bondage."

Mr. Speaker, I leave the conclusion to the individual citizens of this province as to how far down that line we have been at some times in our history.

I would say, though, that there are some people, perhaps, who have had their hand out for too long, but generally the people of this province cannot be bought. The people of this province and the people of this country are made of better stuff. The elderly cannot be bribed, and the elderly are insulted when you suggest to them that they should give up their independence and become wards of the state, dependent upon government for their very existence. The young cannot be bought with false promises of cheap services, again hoping that they will support such a government through irresponsible fiscal nonsense.

The middle-aged, the majority of the people, cannot be fooled by government, and all governments are continually making more demands upon the people through poorly-thought-out and poorly planned attempts to alter the economy towards state socialism from which many feel there is no return.

Let us never again attempt to insult the intelligence of the voters of British Columbia. Let us recognize the need for a government to serve its people, not to control them or have them dependent upon the largesse of the public purse for their very existence. Our democratic system serves us well, Mr. Speaker. Far from being perfect, our system permits the citizens to make political errors but retains the strength to reverse such errors through our democratic system.

Mr. Speaker, one other area of vital concern to myself, and most ably expressed in the budget speech by the Minister of Finance (Hon. Mr. Wolfe), is services to people. Our somewhat enlightened society over the years has recognized the need for all people to group together at times to provide services to people: the collective needs of protection from crime or fire or natural calamities, the needs for health services, education, transportation and many other areas of common human needs.

I would like to point out to any member of this House, but most particularly to those in opposition, that no one member of this assembly has a monopoly on the desire to help those in genuine need, that no one member of this House can claim to have greater compassion for those in our society who are less fortunate than others. I say with sincere pride that it is my belief that people come first, that the greatest resource we have, and will ever have, is our children, and that efforts will be made by myself and this government to provide a better life for the citizens of this province with emphasis placed on those who need the help most. Do not challenge me on my sincerity in this respect, for such a challenge would be ill-founded and without validity.

Mr. Speaker, I thank you.

MR. D'ARCY (Rossland-Trail): I'd like to greet the House today and say how happy I am to take a position in the budget debate. I'd also like to indicate my appreciation for the fact that we have an extension on the time of the budget debate, in spite of the amount of verbiage that surrounded second reading on Bill 3 last week.

I'm going to commence my remarks with some general thoughts on what is the primary industry in this province, and an industry which supports fully 30 per cent of the jobs in basic industries in my riding; that's the forest industry, Mr. Speaker.

We have in the Kootenays in general — indeed, I think all over southern B.C. and perhaps in the north as well, but I don't know about that — a problem with oversupply of chips. We have a shortage of capacity in the pulp industry and perhaps an overcapacity in the plywood and lumber manufacturing end. Now this has partly come about, I think, through demands by the Forest Service, and I think they are legitimate demands, that people in the industry use all of the wood; that they leave less in the bush; that they burn less for slash and that they utilize all of the product. In other words, there should be a maximum utilization of the amount of allowable annual cut in terms of cubic feet.

The problem is, however, that with more and more decadent stands being used up and with smaller and smaller tops being used — and perhaps some people in the industry would indicate that over the years they've had a tendency to cream cuts — in the average allowable cut in any given unit there is a greater and greater percentage of pulpwood and a lower and lower percentage of wood which is suitable for veneer, peelers and lumber. The result is that either we must substantially increase the supply or the available facilities for handling pulpwood, or we're going to have to cut back on the capacity of our sawmills and plywood plants.

I would suggest that the policy of the former

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Social Credit government, which was to create a distinct imbalance between the stumpage and wood costs between pulpwood and lumber at a point in the early middle 60s, certainly encouraged capital expansion. During that period we saw massive pulpmill developments in Prince George, Kamloops, Prince Rupert, Kitimat and Skookumchuck as well.

Once again, in the mid 1970s — indeed I guess we're getting into the late 1970s — we need substantial incentive if we are not to, as I said earlier, see a cutback in the allowable cut of our saw-log supply. Of course, the alternative is the export of chips, either the export out of the province or, as we see it in the West Kootenays, an export out of the West Kootenays to the Kamloops area, possibly even to Prince George or to the Cranbrook area. Certainly we have no desire to export jobs, export business, any more than any other part of the province has,

So I would hope very much that the proposed expansion by Canadian Cellulose — in Castlegar will proceed, although that is a corporate decision. I must say, Mr. Speaker, I am very, very pleased with that company's independent decisions on pollution control, Our level of atmospheric turbidity, if that is the correct term, has certainly been reduced by the several million dollars which have been spent on atmospheric pollution control over the past three years by that company, and I gather they are spending some more money.

The same thing, I think, in fairness has to be said in the city of Trail, where there have been substantial improvements in the S02 levels and in the fallout levels in the city of Trail due to the efforts of Cominco Ltd., efforts which are over and above the requirements of the pollution control branch.

While I'm dealing with resources, Mr. Speaker, I would like to talk about the third major corporate citizen in my riding, which is British Columbia Hydro. British Columbia Hydro has a $0.5 billion project a few miles south of Trail on the Pend-d'Oreille, and I must say, Mr. Speaker, that their efforts to be a good corporate citizen regarding the impact of that project on the community have been very good. Certainly the involvement of local groups and municipal appointees in what projects Hydro can assist in, to improve the community while they are there, have certainly been well received.

I must say that while British Columbia Hydro has always spent large amounts of money on attempting to assuage public opinion, very often they have spent it on the wrong things and, in fact, they have a very poor image, I think, in the Kootenays, as everybody knows. They are seen as people who come and flood large amounts of land, force people off their property and, in the final analysis, do not provide any jobs of a permanent nature. So I'm glad to see that development.

Mr. Speaker, one of the major projects which the fish and wildlife branch of the provincial government has proposed to B.C. Hydro is a fish channel proposal on the Inonoaklin River, which is just beyond the boundaries of my riding. Actually it's in the constituency of my colleague for Revelstoke-Slocan (Mr. King), However, I would point out, Mr. Speaker, we did lose a good part of a major sport fishing resource on the Arrow Reservoir through the activities of the provincial government and its agent in the area, B.C. Hydro, in the mid 1960s.

We, have a natural meandering spawning channel river. It only requires fish ladders to get there from the main reservoir and certainly we well know that the fish and wildlife branch is not in a position to fund such a project. I've spoken with B.C. Hydro on several occasions about this, and to supply not only a sport resource but also an economic resource to the area, which was there once, would certainly be a project which would be very much in order for that major corporation.

Still dealing with the Arrow Reservoir, Mr. Speaker, I would like to note that we still today have no land settlements. In the mid 1960s, in the early 1960s, when people were forced off their property in the Arrow Reservoir, many of them above the waterline, for which there was no legal or moral reason, B.C. Hydro gave a moral if not a legal commitment that they would make every effort to resettle when the reservoir was cleaned up and the driftwood problem was overcome and when the potential sloughing problems were overcome.

I would point out that we are now in the late 1970s. There is still no land settlement that has been finalized, even though I believe a resource committee, including all of the agencies of the provincial government in the area, has agreed on a tentative proposal, I would certainly hope that that would take place and the land would be made available to Canadians and to former owners and their descendants. I have to say their descendants because of the long period, Mr. Speaker, since the early 60s. Some of the former owners, in fact, have passed on.

One of the major problems — a final note on the reservoir — that I have in that riding is that there has never been, Mr. Speaker, a legal survey done on any reservoir, to my knowledge, in the entire province, even going back to the Slave Lake flooding which I believe was before the First World War.

As far as the Department of Highways is concerned and the Department of Lands, land still exists down to the original natural water level. This is true in the Nechako Reservoir. It is true on the Arrow. It's true on the Mica. It's true, indeed, on every reservoir that's ever been created in this province. It is an absurdity that tax notices and corner posts still have to be located, perhaps hundreds of feet below the water level, but I would hope that that is something that the government will

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deal with in this session. Certainly there need to be amendments to the Highways Act and amendments to the Land Act. But I would say this situation is rather absurd and long overdue to be resolved.

I'm sure if the general public knew that this kind of a problem continues — that sub dividers and individuals wishing to register lots had to get easements over land which was flooded — if the public and the rest of the province knew how ridiculous this was, it would have been resolved a long time ago.

I'm glad to see that the Minister of Municipal Affairs (Hon. Mr. Curtis) is in his seat, as he usually is, Mr. Speaker. I raised a question with him, and I'd like to put it before the House now. I hope that the restructuring grants that are paid to different municipalities in the province who have restructured themselves are based on some reasonable formula, recognizing the problems of those areas.

I have a city in my riding which restructured itself voluntarily by a vote of over 60 per cent in all of the jurisdictions involved. There was no compulsion there. The city of Castlegar has received so far $214,000 from the provincial government, and all of us there are very thankful for that. However, when we hear about literally millions being handed out to other restructured cities, we wonder if perhaps we couldn't have a review of the situation regarding Castlegar. Certainly that city is much smaller than the others that were restructured; however, I'd like to assure the House that the same, similar or even greater problems existed in a city of 7,000 as exist in the much larger cities of Nanaimo, Kamloops, Prince George or Kelowna.

One of the things, Mr. Speaker, which I intend to reintroduce — a private bill that I've had before the House in previous sessions — and something I believe tremendously important, is capital assistance for municipal, regional and even improvement district water systems. This is something that has been greatly lacking. It is not something that is really a problem in developed urban areas such as Victoria or Vancouver, but I assure the House that it is a problem in every small- or medium-sized community in the province of British Columbia.

Certainly, when we look at the crisis which hit Fort Nelson, Mr. Speaker, in your riding, a year or so ago, I'm sure you will agree with that. I would hope that the Minister of Municipal Affairs and the Treasury Board would look on a proposal at some point during this parliament, look favorably on a proposal of that nature, because it certainly is very important.

In my own riding we have a huge supply of soft water which is thus far not available to the public. Soft water from the Columbia River does not need pollution treatment as long as we get it above the Canadian Cellulose Mill, and it could well supply homes, industries and agriculture in my riding from one source.,

I was very pleased to see in the budget that there is going to be assistance for municipalities for each housing start of around $1,500; I believe that is the figure we have seen. We have an incredible problem with developing lots in my riding. We've had one survey work done by the Department of Housing which shows that in the city of Trail, even if lots are brought on at cost, it could be as high as $30,000 per lot — even put on the market at cost. If we are to think about bringing the cost of housing down, or thinking about making detached homes available to individuals, I think we have to go a good deal further than what we have.

I certainly question, however, the value of the remarks by the government that they're going to make Crown land available for housing. Perhaps in some regions of the province, the plateau area, the Cariboo and so on, there is Crown land available. I want to assure the House, though, that in my riding, and certainly around Vancouver and Victoria and, I believe, all over the province, there is little or no Crown land available except on the tops of mountains. Apart from whether or not people would like to live there, I believe the cost of servicing such land would be enormous.

I rather think the making available of Crown land may look good on paper, but I don't think it has much validity for most areas of the province. Certainly, as I pointed out, in my riding at elevations below 4,000 feet, Crown land has been alienated for years and years and years; there is none left and there has not been any left.

I would like to point out and re-emphasize once again that I have a terrible shortage of detached homes in my riding. Indeed, it's very difficult for industries and businesses to attract the kind of skilled, technical and professional people that they need due to a shortage of houses. Thanks to the efforts of Dunhill, CMHC and local builders, I'm happy to report that the terrible apartment shortage we had two years ago has been largely alleviated, although we still have problems.

Still dealing with municipal matters, Mr. Speaker, I have been aware that a week or so ago there had been some statements made in the press at the local level by the Consumer Affairs minister, the member for Kamloops (Hon. Mr. Mair), that the transit system there, which was in abeyance, is likely to move ahead very quickly. Indeed, the Minister of Municipal Affairs at least intimated to the media in Kamloops over the weekend that maybe something might be happening before the summer.

I would like to let the House know that I hope there's not going to be any special treatment of one city over another. We in Trail also have a transit system which is held in abeyance. Again, it's not as

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large as the one which is proposed for Kamloops, but I'm sure that the minister is aware, through you, Mr. Speaker, that we have a four-to-one referendum passed on that transit system by the electorate of Trail, and that electorate is not known for its financial liberalism. It tends to play its cards fairly close to its vest, and they don't finance money bylaws too easily.

HON. H.A. CURTIS (Minister of Municipal Affairs): Was that in November?

MR. D'ARCY: That was in November, yes. I would certainly hope that the financial formula of 100 per cent capital and 50 per cent operating losses, if any — but I'm sure there will be — will stay in effect, because this is something that the people of the city of Trail.... I would note, Mr. Speaker, that I have in the city of Trail a very high percentage of senior citizens, many of whom do not — cannot — drive and couldn't afford cars even if they do. I also have an increasing number of students and young people living in the riding.

I would also hope that the government would see fit in its term of office to begin looking at a greater number of regional transit systems which, I believe, make much more sense than those simply operating within municipal boundaries because, certainly, the need in my riding is for a regional system much more than for a civic system within the city of Trail. The reason we have that referendum, of course, is that the city council of Trail has been very positive and very aggressive in moving in this direction.

Mr. Speaker, I would like to make some remarks regarding health care, particularly with regard to my own riding. I see the Minister of Health (Hon. Mr. McClelland) is also in the House. I note in the budget there is a substantial provision for nursing home care, and I'm very glad to see that. However, we have a severe restriction on us in the city of Trail where a programme was started last year with only three full-time and four part-time people. They are, nonetheless, serving 25 to 35 patients, making even more visits than that daily.

I would note that in my riding there is a $70 a day difference between the cost of acute care and the cost of home care, and if they're servicing 30 patients, that is a saving to the public treasury of $2,100 per day. Certainly any moneys that can be spent in this regard are well spent, and I hope very much that nursing home-care services in my riding, in Prince George, and in other areas of the province just getting started — saving a lot of money, in my opinion — will be not only allowed to continue, but will expand.

In my area, we have a significant shortage of dentists and optometrists. I note that there is a section of the Optometric Act on the books which I consider restrictive, I haven't been able to find out why it's there, but it's section 12 which limits the ability of optometrists moving to British Columbia from other parts of the world to practice for the first few years. I suggest that this is restrictive; it's not fair in a civil rights sense. I think anyone moving to British Columbia, moving to Canada, if they're acceptable to the immigration people, should be allowed to practise. It makes it somewhat difficult for optometrists who may want Lo come to my area from Great Britain or the United States to take up a practice, As I pointed out, Mr. Speaker, we have a shortage not only of optometrists but of dentists, and I would hope that whatever efforts can be made in keeping the democratic procedure to help us in that way would be made by the government.

I'm very concerned with the recently announced cutbacks in ambulance services. We've always had good ambulance service in my riding, even before the provincial system came in. The only thing is that before the provincial system they were funded by private societies, private operators and the civic taxpayer. We have had an excellent mix there. We just don't have a blanket ambulance service operated by the province. Castlegar has a private service operated by private businessmen with some provincial employees attached.

Rossland and Trail have ambulance services working in cooperation with the fire departments within the city limits, and on their own outside the city limits; in the Beaver Valley we have had a private society. The main impact of the provincial system was better training, good workers — although we had them before, but now they're better trained; they've had that opportunity — and a saving to the municipal and civic taxpayer. Certainly I hope that doesn't change.

Mr. Speaker, we have some major highway problems in my area, and it is something for which I look at the budget and I see there's not a great deal of money for capital expenditures; indeed, I wonder if the existing contracts can be continued with. Perhaps the government feels that's necessary. One thing I'm also concerned with: I don't see a great deal of money for maintenance and upkeep. I would like to note that there is some serious deterioration, in terms of surface, in the southern interior. Certainly I think drivers on the Hope-Princeton route would appreciate an early start in the painting procedure. It's impossible to find a white line or a lane marking or a yellow line for roughly 100 miles of highway there — all those areas which see a lot of sand and salt, in the winter. In the interests of safety and good driving I would hope that there will be sufficient money in the budget to allow this kind of simple maintenance not only to proceed but to proceed as soon as possible.

I have a major contract which is still out to tender — has been for three months — in my riding. I would suggest, Mr. Speaker, that before any work, can go

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ahead, assuming this contract will be let this year, the land — roughly seven miles — has to be cleared. We've had problems before of this nature where the department here has let a contract too late in the spring.

It was impossible to clear the land because of burning restrictions put on it by the Forest Service, and everyone lost a full year of construction. I hope to see this not happen. This particular stretch of highway is not open yet. It's the Ootischenia Meadows section of the southern transprovincial highway and there has already been $7 million of public money spent on it. Until (when and if) the highway is opened, the taxpayers of B.C. can get absolutely no return on this investment, and I would hope to see it proceed.

Another area which I see can badly affect my riding — and I note there is not much money, if any, allowed for it in the budget — is the recreational facilities fund. I gather this fund is presently overspent. A number of commitments have been made to local communities, local private societies and local civic agencies. The taxpayers in many parts of the province — certainly in mine — have put up a substantial amount of money. After all, they are responsible for two-thirds of it. Their resources, at the local level, are far less than the province, but they have made commitments for these facilities. I also note, Mr. Speaker, that the demands on the fund are steadily diminishing. Because of this two-thirds requirement, the ability and the desire of local societies and civic groups to put up the other two-thirds is decreasing, and I suggest that a reduced amount of money could be put into this fund and still meet the demands of it.

I am very concerned, Mr. Speaker, that the 2 per cent sales tax in B.C., as I said earlier in debate, is going to take a significant chunk out of retail spending in British Columbia, apart from putting a hardship on our citizens. I do believe the cost of living in B.C. has already been put up substantially, and I believe that the level of retail sales in British Columbia is going to be substantially curtailed, if not reduced, during 1976. This concerns me very much. I hope for the government's sake that heading into 1977 they are going to be able to prove that this sales tax increase was necessary; I suggest that it was not necessary. I hope that it's certainly going to look bad for the government next year if not only the economic situation but the taxation revenue situation does not show that this sales tax increase was justified, because I think that of all the tax and rate increases which we have had since December 22 in this province, probably the most onerous and the most unnecessary was that sales tax increase.

Just before I sit down, I am going to deal with a favorite topic of mine, and that is the question of a provincial government building in the city of Trail. We have never had one. I suggest that there is no city anywhere near the size of Trail in British Columbia which has not had a provincial government development. It's the home, I would say, of secondary industry and of mineral development in British Columbia. I have 4,000 employees in my riding directly employed in the metallurgical industry. The city of Trail has never been recognized with any kind of provincial regional agencies.

I was very happy to see a statement a few weeks ago by the Minister of Public Works (Hon. Mr. Fraser) saying that rather than outright capital development of provincial buildings in this area, they hoped to secure assistance from developers and sign long-term leases with developers in order to save capital spending of provincial money for other things such as hospitals and schools. I hope that we can move in that direction.

We certainly have been lacking for many, many years and I feel discriminated against in my area, in spite of the fact that an incredible amount of wealth has been poured into not only the coffers of the provincial government but also into the coffers of private citizens, shareholders and so forth. Most of it has been extracted from the area over the years and spent in other parts of the province and other parts of the world, and I would hope that the provincial government would recognize the incredible mineral wealth and also the technological skills and abilities of the people in my riding who do metallurgical engineering on a worldwide basis and who have developed a number of pollution control techniques. My area has continued to be the only area where there is substantial or even any secondary industry surrounding the mining industry in B.C., although I gather that there is finally something happening with Afton Mines in the Kamloops area.

Thank you, Mr. Speaker.

MR. C.M. SHELFORD (Skeena): Mr. Speaker, first of all I would like to congratulate you on being elected as Speaker. I would further like to congratulate all the new members in the Legislature, because certainly by now they know that they'll have an exciting time in this Legislature. With all the problems we have in our ridings in trying to satisfy people, you'll certainly be able to keep yourself busy. Contrary to what our friends in the press say — that we don't work between sessions — I would only point out that I know, for myself, that if I were four people I couldn't take care of all the calls and demands I get from people within my riding, because the problems we have today are certainly 10 times greater than what they were even five years ago.

MR. G.S. WALLACE (Oak Bay): Come down here for a rest?

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MR. SHELFORD: Yes, that's right. It's far easier while you're in Victoria than it is in your riding, because of the distances we have to travel by boat, plane or whichever other way we can get around. We even had to walk ashore on a log boom recently in making a tour of my riding. I walked on log booms before but I never did with a suitcase on my arm before, which made a little bit of a difference.

Certainly those people that are just starting in politics will find a great difference between political life and any other type of occupation. I think in political life experience is a liability rather than an asset like in all other forms of occupations.

One thing you should take note of when you're writing to a constituent; always be straight to the point so that he understands exactly what you're saying.

I have here a little bit of advice. Now we talk about communications which, of course, started a long time back. Communications were learned a thousand years ago. A lady wrote to her government department — and I can just imagine this happening — wanting confirmation of a neighbour's advice that sulphuric acid would clean her sink. A very junior clerk replied with a six-page letter full of phrases like "The inherent possibility of the modular transformation of the electro-chemical micro-positional reaction having an inhibiting effect; on the intricate part of the mineralized conduct."

The woman, of course, didn't understand the words, which is quite understandable, and wrote and thanked him for saying it was a good way of cleaning the pipes.

The young scientist hastily took the problem to Ids section leader who wrote the woman a two-page letter full of phrases like "reservation about the effectiveness of the proposed introduction of corrosive liquids within the drainage system of the abode."

Once again the woman wrote and said thanks for telling her it was okay. The section leader hurriedly sent the letter on to the departmental head who wrote a one sentence letter saying: "Don't pour sulphuric acid down the sink. It eats hell out of the pipes."

I think all of us should take note of that and send letters to our constituents that people can understand.

One thing I would like to speak on this afternoon...I would hope to see shorter sessions in this Legislature, for the simple reason it doesn't give ministers an opportunity to get around the province and see things as they actually are. I know during my term as minister I spent every single day possible out with the farmers, talking to the farmers over a bale of hay or a sack of carrots. It's wonderful the information you get from the various people out in the field. I look on this as the same as a general in the army. If he has all of his troops tied up on defensive action he never wins a war.

I believe one of the greatest problems in Ottawa today is the lengthy sessions which do not give an opportunity for the ministers to get out in the countryside and take a look at how things are really going. Because it always looks a lot different when you're sitting behind a desk.

It's interesting to note the budget which I think is a very good one, but the budget in 1965 was exactly the same size as the increase in the budget this year.

Another thing we'll likely see is the fact that even though the budget of the Department of Highways, for instance, is an awful lot larger than what it was back in 1965, I wouldn't mind hazarding a guess that the actual roads built in 1965 will be far greater than what will be built this year because of the increased costs of paying just salaries to people rather than actually building roads.

I think a very serious thing facing governments wherever they may be is this tremendous increase in costs to do the same thing.

I am very pleased to see the government moving to remove the tax on senior citizens' homes and, of course, increased aid for those from 55 to 69.

I am also very pleased to see the Department of Labour moving to strengthen the training programmes. I'm very interested in this, and I know one of the Indian chiefs in my area will be also very pleased because Hubert Maitland, chief councilor at the Kitimat village, brought this up not long before the session.

I thought he had a very good point. He was asking the question: "Why advertise in Europe and other countries for skilled workers when there are hundreds on our reserves who want to get trained and don't have the opportunity?" I do hope that the Northwest College at Terrace will try to bring training programmes right into the village.

They put on a short course in accountancy and 25 young Indians took this course, so it does show they really want to learn. It does seem a shame that you see 30, 40 and even 50 per cent of the native Indians of some of these villages unemployed, wanting to take training and they can't get it, when Alcan and Eurocan were up advertising in Europe to bring people in when they can't even employ the people whom we have at home.

I certainly want to compliment the Minister of Labour (Hon. Mr. Williams) in taking a look at these training programmes, because there's no better work he can do, I would say, than get into a training field and help especially our Indian people get out, and they do want to get out and work.

I would like to ask the Minister of Transport and Communications (Hon. Mr. Davis) to take a look into the possibility of a ferry link into Kitimat, because it's never too easy getting from Terrace to Prince

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Rupert. I know, I tried four times this past winter and was held up by slides three times out of four. It is going to be a hazard for some time; in fact, it's a mighty expensive piece of work to try and put snow shelters over the slide areas. I would think it's the solution to this whole north country. Our friends in Atlin could drive down through the Nass to the Stewart-Cassiar into Terrace and over to Kitimat and pick up the ferry going south from there. I think it would be a great improvement to that whole north country:

SOME HON. MEMBERS: Hear, hear!

MR. SHELFORD: I was again very pleased to see the Minister of Labour take a special interest in Indian land claims. Certainly this is well overdue because, certainly, the Indians throughout the years have been getting more frustrated all the time in listening to promises by governments — especially at election time — that negotiations will start. Then, of course, after the election was over, nothing happened. So I think this is certainly something we have to work on very hard to try and reach an agreement.

Now I don't think anyone should kid themselves that agreements are going to be easy, because they are not. But certainly one of the most important issues facing Canadians today, not just in British Columbia, is what will happen on these land claims and the final settlements that are reached. It could very well affect many of our social and educational programmes because it could develop into a mighty expense settlement.

I would like to see local persons on the negotiation committee so that the group's negotiation, whether they be federal or provincial, will know exactly what the people of the local area are thinking, because what's good for Canada and what's good for British Columbia might not necessarily be that good for the local people in the area.

I do hope that there's sufficient backup staff for the minister, who is extremely busy in the Labour Department, to help him in resolving some of these various serious problems, because there's no doubt that in a lot of cases there's overlapping between one group of natives and another.

Another point that I wish to bring up this afternoon is the issue of the oil companies and their agents. It seems that many of these agents and service station operators are losing their life savings due to heartless company policies of canceling agreements at very short notice, and it is something that we can't live with for long.

I would ask the Minister of Transport and Communications to get the energy board to investigate these contracts and report back to them possibly during this Legislature.

It's not too long ago, Mr. Speaker, and I think you'll remember it very well, when you and I sat in a committee of the Legislature chaired by Herb Capozzi and listened to the companies of that time telling us: "Don't take any action, because we will resolve the problems ourselves. We will do it." I think you could find that in your report that was filed in this Legislature.

MR. G.R. LEA (Prince Rupert): You didn't believe it, though, did you?

MR. SHELFORD: I didn't believe them; that's why I submitted a minority report. I didn't believe it.

Interjection.

MR. SHELFORD: You have it? Good. It was a good one, wasn't it?

I didn't believe it was going to happen because I have studied this question ever since I came into politics in 1952. I read the report by Justice MacDonald, so I might say it was one of the best reports ever filed on this question in North America. Believe me, there have been many of them — right from the MacDonald report, the Moore report, which I was involved in, the Mackenzie report in Alberta, and the Westcoast report in the U.S. Of course, they have one for practically every state in the U.S. A very elaborate one was filed also in Nova Scotia.

The interesting thing is that all of these reports really say about the same thing: nothing will happen unless governments make it happen. I don't want to blame any government, because all governments right throughout history have agreed that this maybe should be done and then have done nothing about it.

One thing that this does is to try to eliminate the independent. I think it's a deplorable action, because the independent is the only one that ever brings about real price competition. You never see real price competition between multinationals; there is always the price leadership where one follows the other. But real price competition and the thing that makes free enterprise work is the independent that is willing to get out and bid against another one or cut prices.

I asked for action as far back as 1957, and I'll certainly do it again today because after 10 years it is very obvious that companies are not going to do it by themselves. We need competition to give the motorists a fair deal. As I said before, let's have a little bit of free enterprise. We talk about it all the time in this Legislature and I think it's time we saw a little bit in this industry.

If the independent was able to call for tenders — because some of them have a very large gallonage — and if a private forest company called for tenders on the same type of gallonage, he'd get it for between 8 and 10 or 12 cents less.

I remember that during the time that I was

[ Page 571 ]

speaking on it before in this Legislature B.C. Hydro at that time had just picked up their yearly supply at 12 cents a gallon, which is not very much. I would think that there are still companies.... I know I can pick it up through a farmer's institute for 10 cents less than what a service station can pick it up for right now up at Burns Lake. I picked it up last summer. I might say I organized the farmers' institute to show them how they could get it for less.

What I want to see is the motorists of this province get it for less. There are thousands of them and there is no reason why this shouldn't happen. Naturally, divorce is really the only answer. I don't mean divorcing your wife, so don't all get panicky, but divorce of the service stations from the refining companies is really the only answer that will really resolve this problem. We can use Band-aid methods and talk about this and that and look at the contracts but nothing will really resolve this problem without complete divorce, which will take up to five years. But some of these contractual arrangements should be looked at right now.

I was interested to hear — I'm sorry he isn't here, too — my friend from Vancouver East (Mr. Macdonald), who always gives a good talk in this House. I was interested in his speech, which was a rerun of his speech in 1966. I'm sure he just dusted it off and started again.

MR. WALLACE: Watch out, Cyril. We'll catch you for that one.

MR. SHELFORD: I must say he gives a very vigorous speech; I must say I enjoy it. I only wish he'd have resolved some of these problems when he was sitting over here in government, because he's a tiger in opposition and a pussycat on this side of the House. (Laughter.)

I was in Vancouver the other day and I must say I very nearly cried when I drove down Kingsway to see the signs of gasoline 25 cents less than in Terrace — 25 cents less. When I was studying that question before when the Morrow Commission was on, the actual freight of gasoline from the lower mainland by barge to Kitimat was three-quarters of a cent. I'd be quite interested to know what it is today but I'm quite sure it won't be over 2.5 to 3 cents. But 25 cents difference in Terrace! You can go further north into my friend's riding, and no doubt it is greater than that.

AN HON. MEMBER: $1.25.

MR. SHELFORD: $1.25. The prices I am quoting are regular gas. I've never used premium gas in my life because I remember the companies on the stand at the Morrow Commission saying: "Well, you don't really need to use premium anyway." The only reason you use premium is to think you're in a higher class of income. Ninety-eight per cent of all cars don't require premium gas at all. It's only in the motorist's head, not in anything else.

The only reason, as I mentioned the other night, that I came back into political life was the tremendous downturn in the economy of the northwest, I don't think I need to repeat all of the figures that I mentioned the other night, except for the fact that the producing mines did produce more dollars than they did in 1972. The part that bothers me is that the exploration for new miles went away down to practically nothing. The claims were 10,000 in 1974, and they were 53,000 in 1972. As for the little prospector, he just wasn't getting out into the bush. He was either leaving to go to Alberta or the Yukon, and we'll pay for this as far ahead as 1985 because a claim that was staked this year and went into development wouldn't have gone into production anyway until that time.

Now I'll just give you an example of the impact this has on the community in which I live on all types of business. For instance, the Terrace Co-op sold $375,000 worth of food to the exploration companies north of Terrace in 1972; by 1975, this had gone right down to only $20,000 — $20,000 from $375,000. This is true in Smithers, Hazelton, Terrace and anywhere there is any mining development.

I know another contractor in Smithers who was doing over $1.5 million work with backhoes, Cats, et cetera, for exploration companies north of Smithers. Last year, all he had was $25,000. He had his equipment sitting idle and he has been sitting idle for two years. That is part of the $20 million worth of equipment that's sitting idle right today in Terrace, and has been during this time.

In 1973 the forest industry started to go down. First hit were the independents, which are always the backbone of any community because, for one reason, they buy everything in their community whereas a larger company buys from outside, so they're the ones who keep a community going. If someone wants to start a hockey rink or a curling rink or anything else, it's always the small businessman who picks up the tab — it's never the large company who picks it up — and we only have a few large ones in our area.

Now the smaller contractor was paid too little, I would think, during the good times so that he didn't have enough of a cushion to weather the bad times, especially those working for Can-Cel which has a long history of bad relations with contractors. Last year there were six major contractors went bankrupt in that area alone. One contractor, Twin Valley — and I know it was discussed in this Legislature last year — he went bankrupt working for Can-Cel and left a trail of debts right from Stewart and Smithers to Terrace of over $200,000. That's only half of the story,

[ Page 572 ]

because those cheques that bounced to the other contractors of course bounced again, because they wrote out other cheques to their supply companies, et cetera. There's one supply company in Terrace that has over $264,000 in debts from contractors that went broke from Can-Cel. The community is the one that suffers.

In 1974 things got even tighter. The supply companies started to get hit and several of them went bankrupt — one Pacific Tariffs and the other B.C. Equipment — and three-quarters of the work force of those left have been laid off, which has caused a great strain on the economy of that district. Once a downturn like this starts, it's something like throwing a rock in the water: the ripples keep going out further and further and affecting more people. Fortunately, the mining industry is showing some signs of recovery, but one thing we quite often forget is the fact that an economy is built on faith and nothing else — the faith of people who come in and develop, who build a sawmill, develop a mine, hotel, motel, plywood plant, or even a farm.

This faith was completely destroyed during this time. It's the thousands of individual decisions that make a prosperous nation, and government make-work programmes fail to achieve this. It takes the thousands of individual people, building this and that, employing one or two people, to finally end up with a prosperous community. Now it appears that the socialist system destroys the personal initiative and replaces it with nothing. That seems to be one of the failures of the system, whether it be in Great Britain, Australia, New Zealand or elsewhere.

All of us in the northwest want Can-Cel to prosper but, of course, not on the backs of the independents and the community.

AN HON. MEMBER: Right on!

MR. SHELFORD: The economic stability of the northwest hinges on Alcan, Eurocan and, I would say, an ultramodern Can-Cel.We would like to see Can-Cel enlarged so that it has the most modern pulp mill in the world, a modern plywood plant and, of course, a modern independent sawmill supplying it with chips. I would hope that the Department of Economic Development will look into the feasibility of a specialty cedar mill and a plywood plant.

I would like to say again that to be successful the Can-Cel operation will have to be the most modern in the world to survive with the decadent wood they have to deal with and also the high costs in many other fields.

There is no question, as I mentioned the other night, t hat the stumpage rates charged to Can-Cel...the average is around $1.10, and I'm not saying that this is too low. What I'm saying is that the stumpage to the independents such as Rim, that were paying $22.75 at the same time, is too high, because I believe, with the type of wood we have to deal with in that north country, the $1.10 figure is likely a realistic figure. Can-Cel this year cut back its logging operations by nearly 50 per cent due to the high inventory. I would say it would be better for the area if the TFL holder — and the only reason I'm dealing with Can-Cel is because Can-Cel is the only one there but it would be true for any other TFL holder — held 70 per cent of their needed pulpwood and had to buy the rest on the open market. Everyone would be better off. They now pay $21 per cunit, which costs $34 to produce, which is a direct subsidy by any independent of $15 a cunit to the company.

Now the Forest Service makes the independents take this wood out regardless of cost. With 50 per cent of the total stands in that area pulpwood, and you have to make up a $13 subsidy on every cunit you cut of pulp, the lumber price has to be pretty high before you can make a go of it. This is one of the greatest problems facing the sawmills in that region.

I think really the solution to it is that the forest service is too sticky. They make you take out logs, say, that much around, and you've got an outside piece of three inches which is sound. That small piece actually is 50 per cent of the total, so you have to take it out, and then it collapses once it gets into the chippers and barkers. Can-Cel has a problem as long as anyone else because 16 per cent of all the wood that goes down to Prince Rupert ends up in dust and is thrown out into the saltchuck — 16 per cent. That 16 per cent is too much with the high freight costs from Terrace and the Nass and all up through the north country just to have it thrown away.

We maintain that the Forest Service should take a close took at this waste wood. Why be so picky? It's been rotting in the bush for the last 1,000 years, and it's only just part of the recycling of nature, and I think that poor stuff should be left. Economics will dictate what will come out.

I think Dr. Pearse got this point when we presented it to him in Prince Rupert. He asked me the question: why take it out at all if it's that bad? Of course my answer was that it shouldn't come out, and I don't think it should.

Another problem that's affecting us — well, not just in that area, but the whole of the province — is the massive regulations brought in by the former minister (Mr. R.A. Williams), and I must concede it was even staring to creep in before that, in fairness to the former government.

Now environmental guidelines cost the industry approximately $10.75, and some claim over that, mainly by extra costs, by extra road-building, and various other regulations that were brought in. Now most of these regulations, I have to concede, are okay in a sense. The only question is how many can we

[ Page 573 ]

afford and still stay competitive on the world market?

I don't think I would attack the type of regulations. It is just whether we can afford them. If stumpage is based on the selling price of lumber, less the cost of production, then it is very possible that we will never get back to anything other than minimum stumpage, because costs are going up so fast, and even with lumber prices going up, it is very doubtful if it will ever raise off that floor price. Because last time I checked with one of the forest companies, and I think it was Can-Cel, that price still has to go up another $10 before it would start lifting off the $1.10 minimum figure. That is something we should take note of, and people that talk about the tremendous revenues government is going to get from the forest industry, I would say, say it with your tongue in your cheek, because it's not likely to happen. Dr. Pearse agreed with me when I said this before his commission, that it is very unlikely with the present costs we heap on the industry.

If you take this $10.75 which is the environmental cost for extra road fill, et cetera, that the Forest Service forces onto logging contractors, on the total cut of 21,219,120 cunits which were cut in the province last year, that means there should have been extra revenue which comes to $228 million. Half of that would to go the people of this province, which would mean 114 million at $52,770 to the coffers. I am quite sure the Minister of Finance would gladly accept that kind of money about this time, and a lot of the other ministers would like to see it come in so that their departments could get a chunk of it.

But this is the type of thing we're doing, and when we blame world market conditions, and we blame this or that, we should take a look at ourselves and see what we're creating for the industry; we're heaping costs on that we can't expect them to bear,

These are costly regulations that hamper foreign sales, especially in times like this. One thing we have to accept is that we have to export or die in this province. Otherwise, our standard of living will have to go down better than 50 per cent if we say: "Let's drop our export market." We just can't afford to do it.

Red tape in the Forest Service — and I must say I don't blame the people in the Forest Service either, because they don't like it either — is impossible to live with as far as the industry is concerned,

I've been working with this during the last three years, but since 1973, for a simple timber sale, which used to take two months to get, it now takes two years. The very best you can get a timber sale is two years. So if a company decides to go into production for a special cut.... For instance, Northwest Loggers, which I worked with, got a contract for 60,000 ties which means, certainly, about $400,000 to $500,000 into the economy of an area. We couldn't get the timber in time and lost the contract. So time means money to the industry. They can't afford to sit back like they have during the past few years.

For instance, Can-Cel is the largest company in the area, and for us to prosper they have to prosper, But Can-Cel is only three months ahead of themselves in the planning for roads, et cetera, because they couldn't get clearance from the Forest Service. What this means is that they are hauling on roads we call "green roads" because they haven't settled properly, so they have to cut the loads down which makes it more expensive. I certainly don't know how they managed to carry on a company of that size when they are only three weeks ahead. They should be at least five years ahead to be doing a good job on management of our resources.

I think the government should have a committee look into the performance of the tree farm licence holders on whether they are cutting their maximum cut and whether they are living up to the 50 per cent contractor clause. Now the contractor clause has a long history back — certainly, your did did a great deal in bringing in this contractor clause. The contractors lost the right to bid on these very large areas, and for that they were given 50 per cent of the area to log and haul from harvest.

Now in some cases they haven't lived up to this. The companies, right at the moment, are laying off contractors and keeping their own work force going. But, really, they are cutting only about 50 per cent what they did last year. It's mainly the contractors who get laid off. Yet there are still people who want to buy the material if they could get it from the contractor. Now if the companies are not going to cut it, well, then certainly the contractors should be able to cut it and sell it on the open market, which would create, certainly, a competitive system in the log market on the coast.

Another thing, it is interesting to note that the pole companies, like Little, Haugland & Kerr up in Terrace and MacGillis & Gibbs, pay to the various tree farm holders between $20 and $80 a cunit for those poles. What really happens is: either one of those companies pay more in stumpage to tree farm holders than the tree farms holders pay in their total stumpage to the government. Now this seems wrong that the independents should be paying more stumpage to tree farm holders than what the tree farm holders pay on their whole cut to the government which helps to keep this province going.

Another problem the industry faces is: who do they go to? This is something which we were really frustrated about, because we couldn't find out if a sale was held up. We went to the Forest Service, and they'd say that it was all clear. Federal Fisheries is involved, so we'd go to them and they'd say: "No, we've given it clearance; it must be Fish and Wildlife." We'd end up at Fish and Wildlife and

[ Page 574 ]

they'd say: "No, we cleared it; it must be the Forest Service that's holding it up." So we could take these circles back and forth and end up with no timber sale at all.

Now I hope that there is not going to be a fourth — that the environment service is not going to be the fourth stumbling block. I hope, Mr. Minister, that no matter who it happens to be, but certainly one department has to have the final say. If it's your department, and I hope it is yours, if there's any problem I hope we can come to you and you will get clearance from the other departments, because someone has to have the say or nothing happens at all.

[Deputy Speaker in the chair.]

I would point out that we only have two ways to go in this province: we either have to bring down costs through slicing regulations, increasing productivity, and, of course, maintaining reasonable wages and salaries, or otherwise we'll see our producers and industries go down the drain, which reduces 54 cents out of every dollar and, of course, by this we'll lose on the foreign market. We just simply can't afford to see this happen.

Interjection.

MR. SHELFORD: That's good. I can bring up the rest later on, Mr. Speaker.

Now the costs of production in this whole area of the forest industry are far too high. I don't think we should blame any single group, but just point out that it's there.

I'll close on this, Mr. Speaker: for instance, a company, operating in Terrace, with fringe benefits pays their employees an average of $9.03 an hour. The same company with a company in Oregon pays $6.09 with fringe benefits. A company in the southern U.S., in Mississippi, pays $4.09. That's a reason why they can produce a ton of pulp $36 cheaper in the U.S. They can produce pulp $46 to $50 cheaper in Malaysia, Brazil, Thailand and the Philippines. Now these are the types of problems that we have to face.

I would hope that the Minister has heard enough this afternoon to know that the industry is in real serious trouble. And let's not kid ourselves: unless we find solutions quickly, the forest industry in this province will go down. Believe me, the world of today doesn't have to have our products; they can get them from other parts of the world. I thank you.

Hon. Mr. Mair moves adjournment of the debate on behalf of Hon. Mr. Vander Zalm.

Motion approved.

HON. G.M. McCARTHY (Provincial Secretary): Public bills and orders: committee on Bill 10, Mr. Speaker.

SUPPLY ACT, NO. 1, 1976

The House in committee on Bill 10; Mr. Schroeder in the chair.

On section 1.

MR. L. NICOLSON (Nelson-Creston): Mr. Chairman, during the second reading of this bill I asked the Minister of Finance a question pertaining to student summer employment, which gave me great concern. This section 1 would take one-third of the total amount and apportion it for a period which I reckon would end at the end of July. Student summer employment would be very active in May, June, July and perhaps August. One could anticipate that while high school students are a very significant part of the programme, university student employment would be three-quarters completed by the end of this time. I would like some assurances from the minister that student summer employment is not to be jeopardized by the careless, perhaps non-.... Perhaps it's in here in some sort of legal terms, but certainly not something that would give any reassurance to a layman. So I would like to have some reassurance from the minister as to whether or not this is going to jeopardize the student summer employment in the ensuing months. It's Bill 10, I believe.

HON. E.M. WOLFE (Minister of Finance): Mr. Chairman, I was only going to point out in answer to the member's question that it is really irrelevant to the total being proposed in this particular Act which, of course, has to do with taking the total budget for the year and appropriating it to the given number of months which would be more than ample to cover the remainder of the session, realizing that we would hopefully expect there will be no limitation on the amount of time being spent on estimates. It simply takes the total for the year and divides it by the number of months appropriate. I think it would be more appropriate to bring up the question you raised the other day under the estimates for that department.

MR. NICOLSON: What you think might be appropriate...it's hard to say when this will come up. Until the end of July we might be operating on this interim supply. I'm not sure if the minister understands the question, so I'll try to phrase it in this manner. If we just take, for instance, Mr. Chairman, university students who were perhaps looking at about three months' employment which

[ Page 575 ]

will be covered under this to the end of July, out of what we might anticipate to be an average of about four months, that's about three-quarters of a programme for university students, although for high school students it would cover about one-half of the programme in this time period — in both cases covering more than one-third of the time period. Is this a prorating? Is every programme going to be funded at one-third of its rate, or is there going to be some give and take between programmes? That's the question I'm directing to the minister.

Mr. Chairman, the minister doesn't seem to take this very seriously. I would suggest this is a very serious matter. Is the student summer employment programme to be cut to one-third, or are we going to prorate? Are you going to steal from some other programme in order that the student summer employment programme can go ahead?

MR. CHAIRMAN: I think, Hon. Member, that by the word for "steal" you mean the word "transfer."

MR. NICOLSON: Yes, or "appropriate."

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Chairman, the objection I wish to raise to section 1 of this bill is not an objection to interim supply in principle, which, of course, we've already passed, but rather to the amount that this House is being asked to grant. It was the practice last year and in previous years to not ask for so much as one-third of the entire year's appropriation. As a matter of fact, I think the supply Act we passed on March 26 of last year asked only for one-sixth. I think that is a more reasonable amount because it provides that if things don't go along that well the government has to come back to the House again for some authorization in a couple of months. I think that's only right, because we're being asked to approve this supply Act before we've entered into any debates on the estimates at all, and who knows what may arise during that debate period that perhaps should be canvassed again under the rubric of another supply bill?

Therefore I would move the following amendment in section 1: that at line 3 the amount should be cut in half from $1.222 million to $611 million, and that at line 6 the time period should be changed from one-third of the year to one-sixth of the year, which it seems to me does give the government ample room and flexibility, and allows them to come back to the House if that is required.

MR. CHAIRMAN: Hon. members, in reviewing the amendment, it needs to be determined by the Chair — and this is why it is taking just a few moments — whether or not, in approving the bill in principle, we actually approved the allotment of the one-third portion. Perhaps we could invite some comment by members of the House in trying to help the Chair determine whether or not we have already approved this in principle. Perhaps the mover to the amendment would like to speak first.

MR. GIBSON: Mr. Chairman, just speaking to this for a moment, I would draw to your attention the analogy of the estimates debate at which time, for example, it is competent on any member of the House to move that a minister's salary be reduced by $1, or to $1. In other words, these figures are far from being sacred. What we do on second reading, as I would see it — and, of course, no private member can move that they be increased — is approval in principle that supply should be granted to the government for a certain period. Then committee stage is where detail is normally dealt with, and we arrive here at the important detail, admittedly, but nevertheless a detail, as to exactly how much supply should be provided.

MR. CHAIRMAN: I invite other comment.

MR. W.S. KING (Leader of the Opposition): Mr. Chairman, I would reinforce the argument put by the leader of the Liberal Party by pointing out that during the debate on second reading of this bill I think the point was stressed quite strongly from all quarters on this side of the House that there were grave reservations about the need for the amount contained in the bill. Indeed, it was stated by the official opposition, as well as the other parties, that while we did not object in principle to the provision of interim supply, we were very concerned about the amount of money that was being asked for, and questioned at that time the need for one-third of the budget as interim supply on an emergent basis. This is a very, very large amount of money — it's more than $1 billion — and there's concern that the details of this amount cannot be adequately dealt with; they cannot be adequately identified. The minister has already shown that he is not in a position to be accountable for the full expenditure of this amount of money...

MR. CHAIRMAN: Order, please.

MR. KING: ...and, under those circumstances, I believe that the amendment is in order, Mr. Chairman.

HON. W.R. BENNETT (Premier): Well, Mr. Chairman, just a point: the unusual amount of supply — one-third — is not unusual when you consider the circumstances of asking for supply this year — our interim supply — as compared to last year. Last year, this assembly had new rules of restriction upon debate of estimates in the Legislature, and the

[ Page 576 ]

government of the day could effectively determine the end of the debate on estimates and thusly was able to come in for a shorter period of interim supply. They knew full well that rules they had passed in this assembly would force this Legislature to stop debating estimates and would, in fact, not then hold up supply for essential services in the province. I think that's what we're talking about, because the motion for interim supply is usually a motion that is not debated. It's usually a motion so that the government of the day can guarantee services while debate is allowed to continue in a free and most full manner.

Now this year we already have a motion on the order paper under my name — without getting into that debate — to remove the restrictions on debate of supply, or estimates, as you would call it, Mr. Chairman. For that reason, the government is not able to determine the conclusion of the debate and it was our willingness to have more opportunity for debate that led the Minister of Finance (Hon. Mr. Wolfe) to bring in this particular term without trying to drive an arbitrary deadline on the assembly but to allow full opportunity for debate for all members.

I would also say that we're in unusual circumstances, some of it because the government, being elected in December, being called just before the beginning of the year, could not possibly call a session and have its legislative programme and a budget at the ready for the usual date. Now other governments have been elected and called fall sessions which dealt strictly with legislation in a quicker time. In this instance we're called upon to present a budget, and that took us to a period closer to the start of this year and still in the budget debate before we can get to estimates.

This length will be further carried forward in the budget debate because it was suggested in here that we would grant leave to make up for the time so that any member could speak in the budget debate who may have felt that his time was restricted because of the introduction of both the bill to borrow and the interim supply bill. That way, every member of all parties would have full opportunity to speak to the debate. That means it is quite possible that there may be four or five or six sittings added on to the time allotted to the budget debate.

So we are not yet able to determine, Mr. Chairman, when the actual debate on estimates will start. That will depend on the pleasure of this assembly and the opportunity to speak on the budget debate that's taken by all the members. So I'd suggest it's not an unreasonable amount. I would further point out, because there was some confusion with one of the members — I believe it was the member for Nelson-Creston (Mr. Nicolson) — saying, is this going to be one-third of a programme? I only say interim supply is merely an amount calculated over months to take us to a point in time. It doesn't take a third of a programme. It guarantees that those programmes can be met within the framework of the estimates that all members, I'm sure, have read in detail.

MR. CHAIRMAN: Thank you, Mr. Premier.

MR. D.G. COCKE (New Westminster): Well, Mr. Chairman, we very much appreciate the Premier's long dissertation on the need for a third of the budget. But what he didn't explain to us is the need for this...it's the term really that we're talking about. The money, we know, has to come down in either one-sixth or a quarter or a third or whatever, We are talking about the time-frame, and the first minister has decided to discuss the question that, somehow or another, this should carry through to the end of the estimates.

Mr. Chairman, I think you know full well that you can have two or three supply bills during the course of parliament and if, in fact, we've found ourselves in the middle of estimates, and the Premier has gratuitously given us this no-limit situation, which we're not particularly keen on.... We indicated, I think, our position quite clearly in the last parliament, and that is that a certain number of hours are enough to discuss estimates, and the rules are the same now until the motion is put forward. So, Mr. Chairman, I suggest to you that what really the member for North Vancouver–Capilano is asking is that we think in terms of contracting the period, and if the government finds themselves in a position where they need to put another interim supply bill, they'll be given a very open hearing from this side of the House, I'm sure.

MR. CHAIRMAN: I think, with all respect, hon. members, we are becoming embroiled in a debate which should be subsequent to the decision as to whether or not the amendment is in order, and perhaps the Chair would like to take the opportunity to apprise the House that my decision here cannot be based on adequacy of this bill. It cannot be based upon competence. It cannot be based upon time-frame, but I have to decide whether or not the amendment is in order.

Order, please!

Therefore the ruling of the Chair, according to the authority given to me in May, under functions of a committee on a bill, in subsection (1) the 18th edition, page 494...I must rule the amendment out of order in view of the fact that the principle has already been agreed to in the second reading. So the amendment is out of order.

MR. G.V. LAUK (Vancouver Centre): On a point of order. Mr. Chairman, nowhere in my reading of May.... I'm afraid I only have the 17th edition, but

[ Page 577 ]

it's clear to me that the principle of the supply bill is to grant supply. The issues about amendments to particular sections which may include the amount of the supply are for committee stage. I don't think that this committee would offend the rules of order if we allowed such an amendment. The principle that was passed in second reading was that this House shall grant supply, and that was agreed to. But amendments as to amounts, terms and so on must be left to the committee stage, and I don't think that offends my reading of May, unless the 18th edition is somewhat different than the 17th.

MR. GIBSON: On this same point of order, Mr. Chairman. Continuing this discussion of whether or not the amendment is admissible, I'm looking for the exact section right now — I can't find it at the moment — but the general principle stated in May, as to the admissibility of amendments, is that they should serve to restrict the operation of the bill without, of course, reversing the operation of the bill, which would be destructive of second reading. But a restriction is the very essence of an admissible amendment. It's the essence of what is proper in an amendment in a bill and it seems to me that this is clearly not only a restriction but a proper restriction, It proposes to restrict to one-half.

Now one could presumably also move to reduce it by $1 or $10 or something else, but in every case a restriction within the clear principle laid out in May, and therefore perhaps....

MR. CHAIRMAN: Order, please!

MR. GIBSON: Perhaps you are...

MR. CHAIRMAN: Order, please! May I cite the section for the decision which has been made? The subsection reads:

"A committee is bound by the decision of the House, given on second reading, in favour of the principle of the bill, and should not, therefore, amend the bill in a manner destructive of this principle."

To cite, for instance, parallels in debate on estimates is not to cite a parallel at all, in the opinion of the Chair, because nothing has been agreed to in principle during debate on estimates. The amendment is out of order.

Shall section 1 pass?

SOME HON. MEMBERS: Aye!

MR, LEA: On your ruling, the only thing it really points out in section 1 is whether or not....

MR. CHAIRMAN: Order, please. Mr. Member, the ruling is that the amendment is out of order. If you wish to challenge the ruling then it can be brought before the House.

MR. LEA: Well, I am speaking to section 1.

MR. CHAIRMAN: You said you were speaking on a point of order.

MR. LEA: I'm speaking to section 1.

We're talking, Mr. Chairman, about the amount of money that's going to be passed in this interim supply bill, Bill 10. If I can read it correctly from the Premier and his explanation of what's going on, either we say, "Okay, one-third," or there will be no opening of the debates on estimates — that's clearly what I understand. I'd just like to point out to this House and to the people of British Columbia that our principles don't change no matter which side of the House we're on. We believed that there should be limited debate in this House when we were over there as government; we believe in it now. If that's what they're trying to do, then there's no deal. It's just as simple as that.

MR. CHAIRMAN: Order, please, Mr. Member. We're on section 1.

MR. LEA: Is that what the deal is, Mr. Premier?

MR. CHAIRMAN: Order, please!

MR. KING: Mr. Chairman, I would like some cooperation from the Minister of Finance (Hon. Mr. Wolfe) in getting some assurance on a matter that is of concern. The member for Nelson-Creston (Mr. Nicolson) attempted to elicit from him information on the application of the student summer employment programme. It's been discussed in the House before; I know that the first stage has been initiated. Money, as I understand it, was budgeted to fund the second phase of that programme. Information has come to me that that request for funding of the second phase has been turned down by Treasury Board. That alters our understanding of what is being voted on here in terms of the use of those funds.

I would simply like the assurance of the Minister of Finance that the programme working in government is going ahead with the necessary funds to provide the jobs for high school and university students consistent with the programme's funding and job creation last year. Could you give me that assurance, Mr. Minister?

HON. MR. WOLFE: I think you asked that question previously, and we wish to reassure you again that the second phase of the summer employment programme has not been turned down.

[ Page 578 ]

It hasn't been turned down at all.

If I might comment on the question related to the summer employment as it bears on this amount that we're looking at here in terms of approving the supply Act, we're asking for a proportionate amount of all estimates through the year regardless of when they might take part — July, May, October. I don't think it really would have the effect by approving this supply bill for four months, you might say, of restricting the summer employment expenditures because they took part through the entire summer months. In other, words, in effect, we would be approving one-third of all the estimates that you are considering.

The House resumed; Mr. Speaker in the chair.

MR. SPEAKER: When shall the committee sit again?

MR. WALLACE: A point of order. I don't recall having a vote on either section 1 or section 2.

MR. SPEAKER: We're just reporting progress, hon. member. Anytime a bill is discussed in committee, hon. member, it is taken as reporting progress even though you don't pass any sections. Once you open the debate up and debate the issue, that is, in itself, progress.

The committee, having reported progress, was granted leave to sit again.

HON. MRS. McCARTHY: Committee on Bill 3, Mr. Speaker.

BRITISH COLUMBIA DEFICIT
REPAYMENT ACT, 1975-1976

The House in committee on Bill 3; Mr. Schroeder in the chair.

On section 1.

MR. LEA: Mr. Chairman, maybe you could give me some direction. There are some questions I would like to ask; I think possibly under section 1s the time.

In section 1 it says: "The Lieutenant Governor-in-Council may authorize the Minister of Finance to borrow on the credit of the province an amount not exceeding $400 million to make good the anticipated deficit arising out of the operations of the government for the fiscal year ending March, 31, 1976," So we can talk about, I suppose under section 1, whether or not this money, indeed, should be voted.

MR. CHAIRMAN: Section I authorizes the loan and I think you are in order.

MR. LEA: There are some questions I have for the Minister of Finance. One is: why did the government approve a grant of $26 million out of current revenue for the 1975-1976 fiscal year when legislation approved by this House has provided for $50 million borrowing authorization regarding capital transit operations? There is already legislation allowing that. I am just wondering why.

MR. CHAIRMAN: May I just refresh the member's memory that we cannot canvass those areas already canvassed under the debate in second reading? Therefore all of your debate is in order under section 1 with the exception of that which has already been canvassed. This is just for your information.

MR. LEA: Well, Mr. Chairman, did we not approve the bill in principle in second reading before this House? Now we can start dealing with the need under section-by-section. We can take each section and discuss each section. It seems to me that in section 1 there is $400 million being asked for for borrowing, and I am just wondering why this money is needed. Obviously, the full amount isn't needed. For instance, why did the government approve a grant of $26 million out of current revenues for the 1975-1976 fiscal year when there is already legislation provided by this House for $50 million borrowing authorization for capital transit operations? So why this money out of 1975-1976 when there's money there available for capital expenditures and amortization? Why didn't you use the legislation that is already provided as opposed to bringing it in in this legislation? There's already legislation there. Why do it here?

HON. MR, WOLFE: Mr. Chairman, in reply, I believe the grant lie is referring to involved transit expenditures which the Minister of Municipal Affairs (Hon. Mr. Curtis) has dealt with in quite considerable detail, but involving very heavy expenditures for committed capital expenditures for transit and equipment that was put on line by the previous government and had to be met. I believe what you are saying is: why didn't we borrow for those purposes rather than go to an authority to borrow which we are proposing before the Legislature now? It wasn't within our policy to decide whether we were going to borrow for the purchase of that equipment; nor was it, I think, the intention of the previous government.

Interjections.

MR. CHAIRMAN: Order, please! Mr. Member, the Hansard has a difficult task trying to keep track of voice recordings unless you are identified. I recognize

[ Page 579 ]

the member for Prince Rupert.

MR. LEA: That's a good point, Mr. Chairman. But that still does not explain why the existing legislation was not used. First of all, why bring in this legislation when there's already legislation to do that? I don't understand that. It's redundant legislation to ask to borrow money for this when there's already legislation passed by this Legislature to do just that. I don't understand that.

HON. MR. WOLFE: Mr. Chairman, I don't honestly see how that bears on the request to get authority to borrow an overall amount of $400 million, which we had a clear indication may be required by virtue of the Clarkson, Gordon report.

MR. LEA: First of all, you have to remember that we are not agreeing, Mr. Minister. So what we are saying is that there is already existing legislation and we will take each one of the amounts set forth in this bill and we'll question each one of them. This is only No. 1. We are asking why there is this redundant legislation when the legislation was already there. Now if there isn't a good reason we can only assume that you wanted to bring it in in this manner for political purposes. So I am asking you in all seriousness: why did you do it? Why not use the existing legislation? Why bring this bill in at this time when there is already legislation and you can do it any time during the year?

MR. A.B. MACDONALD (Vancouver East): Mr. Chairman, this section is predicated upon the province being in very dire financial circumstances, and therefore we have to borrow money, although all the word I get is that the government has been shovelling money out before March 31, 1976, as if it was going out of style — giving it to agents....

Interjection.

MR. MACDONALD: It's not so? This is the occasion we get to ask questions, you know, and it seems to me that you made a mammoth effort to funnel that money out to agencies, commissions, government — the whole thing — even though they weren’t asking for the money. Now I listened to the exchange between the hon. member for Burnaby North (Mrs. Dailly) and yourself, for example, about $7.5 million for the universities. I would like to ask the Minister of Finance: was there a written request for that money? Will the Minister file that with the House? I suppose it would come from the chairman of the university council, but I don't know. Would the minister agree that it be tabled in the House?

MR. CHAIRMAN: Order, please. We are under section 1.

MR. MACDONALD: As I understand it, Mr. Chairman, that money is just sitting to the account of the various universities, perhaps invested with some interest, not needed now — needed, perhaps, for an increment to pay a salary increase next July or something of that kind. But when can we have that letter tabled in the House, Mr. Minister? Perhaps you could send for that. I really think that you have made, for the first time perhaps in the history of British Columbia, a tremendous effort to spend money, as if it were water, before March 31.

Interjection.

MR. MACDONALD: That's right. Special warrants — $145,000 — $145 million often.

Interjection.

MR. MACDONALD: Some of them would be needed and some of them would not be needed. I just wonder if there's any suggestion here that you are trying to pull the wool over the eyes of the people of the province of B.C.

MR. CHAIRMAN: Order, please.

MR. MACDONALD: I suggest you were shovelling money out, even though it wasn't being asked by departments and agencies of this government.

Interjections.

MR. MACDONALD: "Wouldn't you like a little money before March 31st? We're glad to give it to you because we want to pile up that debt."

MR. LEA: Sure it's enough?

Interjection.

MR. MACDONALD: When could we. expect to see that particular letter?

Interjections.

MR. MACDONALD: When?

HON. P.L. McGEER (Minister of Education): Education estimates.

MR. MACDONALD: But that's too late for this bill.

MR. R.E. SKELLY (Alberni): Mr. Chairman, the wording in this section is kind of confusing to me. I

[ Page 580 ]

wonder if the Minister of Finance can answer a question for me.

On an anticipated deficit it seems that after the date of March 31, 1976, the province either has a deficit or it doesn't have a deficit. But I wonder about the wording, and whether the Minister of Finance can explain to me the wording "anticipated deficit". In addition, it sounds to me like this is an attempt to discuss the advisability of adjourning at midnight to a time that's 11:05, or something like that. Maybe there is some Social Credit logic to that, and perhaps the minister can explain that to me.

Another thing is the question of the amount of $400 million. Possibly the minister can explain the reason for the amount, and detail the actual amount included in that $400 million figure. Does it include the government grant to ICBC of $181.5 million, which was granted to ICBC but not cashed, and which the government may borrow back and which, in any case, ICBC will not need till October?

Interjection.

MR. SKELLY: Well, yes. Could the minister explain those figures for us?

HON. MR. WOLFE: Mr. Chairman, the hon. member has asked about the words "anticipated deficit" and why would we not realize right now, right at the end of March, what that deficit was. Well, it's quite reasonable that it takes some weeks to determine what the deficit is. The previous Minister of Finance (Mr. Stupich) would understand this quite well. They take a considerable number of expenditures from April of the current year, which reflect themselves on the previous year's operation, and until, I would say, April and beyond you're really not in a position to know what your deficit is for the year. The bill is predicated, naturally, on an anticipated deficit which we cannot determine right now.

The only Member for Vancouver East (Mr. Macdonald) commented earlier on warrants, and a suggestion that we are pouring out the money previous to March 31 — just pouring it out. Well, I can tell you Mr. Member, we were faced with a great many emergent expenditures, the likes of which I've never seen before, that had to be made.

I think you should realize, if you don't already, that we come second in the business of writing warrants because this year, in the period of 30 days prior to the session sitting, I believe we were responsible for some 23 warrants which were issued in that period to cover urgent matters. The previous year your government put through 40 warrants, Mr. Member. That would seem to me to be somewhat in excess of what we will put through this year.

The other question the member raised here was: "Did the $400 million anticipated deficit include the ICBC expenditure, or the proposition to pay for the deficit?" Of course, the answer is yes.

MR. SKELLY: Now I wonder what constitutes an expenditure, Mr. Chairman. The government has stated that it made a grant to ICBC of $181.5 million, but ICBC has said that they will not cash that cheque, and that they will not need it in any case till October and may lend it back to the government. I'm wondering if a rubber cheque constitutes an expenditure, and if part of the $400 million in this bill is, in fact, a rubber cheque.

In any case, Mr. Chairman, if they don't need the money until October, then I wonder why the urgency of discussing this section now. . The Minister of Finance said that the reason for the wording "anticipated deficit" is that some of these expenditures will be made during the month of April, for example, and we may not know what those expenditures will be. Well, in that case, what's the urgency of discussing this bill at the present time? Perhaps we should put off discussion on this section until sometime in the future.

After all, Mr. Chairman, we haven't even had an opportunity to discuss the fiscal policies of the present government at any length. We haven't completed debate on the budget speech itself. We've had a second revision of the budget speech, and not all members have had an opportunity to take a look at the second revision of that budget speech. And before we can really consider the fiscal policies of the government, then I think we should at least have an opportunity to look at the abridged or the changed or the foreign edition of that budget speech.

So considering all those things — the fact that ICBC doesn't need the money granted to it, or not granted to it as the case may be; considering that some of these expenditures will not be made until late in April; and considering the fact we've not had an opportunity to discuss the fiscal policies of the government — I really question the need to discuss this section at this time.

MR. D.D. STUPICH (Nanaimo): Mr. Chairman, if I may comment first on the question of special warrants: the Minister of Finance (Hon. Mr. Wolfe) gave some figures, but I think he might well have given the figures for the number of special warrants passed in the first nine months of this fiscal period under our administration, when I think the total was something like four or five, because in that period we were in....

Interjection.

MR. STUPICH: No, I'm saying you might have, because in that period we were in a period of some

[ Page 581 ]

tight control of finances and presumably the whole fiscal period was a time when the government might have exerted that kind of control.

However, with respect to the special warrants, our concern was not with the amount or even with the number, but simply that the Minister of Finance and the ministers responsible for bringing forward each one of these special warrants didn't seem to know what they were required for. Certainly with respect to the number passed by the previous administration, I think that in every case either the Minister of Finance, any member of treasury, or the minister responsible for bringing forward those special warrants, would have known something about what the money was required for.

In the case of the one for universities, we have tried unsuccessfully for about a month to find out exactly what the money was required for, other than the fact that it went to the universities. They wanted the money, but we were never told why. As the first member for Vancouver East (Mr. Macdonald) said, maybe it was — for salaries that are going to be paid a couple of years from now. We just don't know. The details have never been given.

MR. MACDONALD: Table the letter.

MR. STUPICH: Apparently the minister just doesn't know.

MR. MACDONALD: Send for the letter.

MR. STUPICH: Mr. Chairman, I asked a question about scaling fees, and I think perhaps the Minister of Finance was going to answer this one other day when he got up, and I'm still wondering about that one — a $10 vote that is suddenly a $900,000 vote.

That's just an example of the kind of things that we were suspicious of — these warrants seemed to be coming forward — and at the time we asked the questions, when one would have thought they were fresh in the minds of the ministers bringing them forward, or the Minister of Finance, or the Premier, or the Minister of Economic Development and Agriculture (Hon. Mr. Phillips) who is also a member of Treasury, nobody seemed to know what they were for, except that somebody wanted money.

With respect to part of the figure of $400 million, one section of it — some $20 million — is to do with a grant to BCR, and I wonder, although this has been commented on in the House previously under the discussion: is the Minister of Finance aware that when this was discussed at some length in the House a year ago that it was pointed out that although it was recorded as a grant initially, because BCR had exhausted its borrowing power, nevertheless in discussing it in the House the Minister of Finance at that time made it quite clear during the discussion that it was intended to be a recoverable grant?

Is he aware that the minutes of the directors' meetings of the BCR on several occasions recorded that they recognized that this grant was going to be a repayable grant and that on that basis, on the basis of the discussions in Hansard and of the minutes recording the directors' meetings of BCR, it was fully intended that these grants would be repaid once the BCR had the borrowing authority to do so?

With respect to ICBC, we have managed to get some information from the minister responsible for ICBC as to the extent of ICBC's current cash situation. I wonder if, in considering the requirements of ICBC, the Minister of Finance received information from the minister responsible, or even directly from ICBC, not only as to their present cash situation but as to the extent of the installment accounts receivable as at the end of February or the end of March. I ask this because there must be a substantial amount of money there that will come in to ICBC within the next three or four months that would be available and that would extend the time during which ICBC can operate on its cash without that $181.5 million grant, much beyond the time suggested by the Minister of Education (Hon. Mr. McGeer) of October.

With respect to another item that is included in the $400 million, and I hope you can remember all these — if not, I'll have to stand up and remind you — another item was a difference in the shortfall between budgeted expenditures and budgeted revenue at the time of the Clarkson, Gordon report — that was $80 million. I notice in the figures included in the budget speech the gap has been narrowed by approximately $30 million. We have closed that $80 million gap by about $30 million. I wonder if the Minister of Finance can tell us whether the same experience was continued into February and March, or whether he anticipates that it will be, and whether indeed at that rate the $80 million would be more than closed.

I wonder if you can comment on some of these questions. You're not making notes, so I'll hold the rest until later.

HON. MR. McGEER: In an attempt to enlighten the former Minister of Finance (Mr. Stupich) with regard to the situation at ICBC, Mr. Chairman....

MR. LAUK: Will the real Minister of Finance stand up?

Interjections.

AN HON. MEMBER: We're giving you lots of opportunities,

MR. CHAIRMAN: Order, please.

[ Page 582 ]

HON. MR. McGEER: Well, they're not interested in the answers, Mr. Chairman.

HON. MR. WOLFE: No, they're not.

MR. LAUK: I think, Mr. Chairman, that the member for Prince Rupert (Mr. Lea).... I don't intend to yield my place, but he's been up and down. You aren't ignoring him, are you, Mr. Chairman?

MR. CHAIRMAN: I have recognized the member for Vancouver Centre.

MR. LAUK: I'm much obliged to you for that.

With respect to the Minister of Finance, through you, Mr. Chairman, with respect to the BCR loan that perhaps he doesn't recall — he wasn't in the House at the time, having been defeated in 1972 at our hands — that the debate around the $20 million recoverable grant....

AN HON. MEMBER: The groan.

Interjection.

MR. LAUK: For the benefit of the Minister of Consumer Affairs (Hon. Mr. Mair), a recoverable grant is often used. It's been used in loan legislation, federal jurisdictions and so on. It's a well-known term, and I'll send him over some notes so he can familiarize himself with that.

With the $20 million BCR loan that was made, the Minister of Finance, as he then was in the former administration, indicated it would be recoverable. It was a loan, but until the borrowing authority of the BCR was extended we could not expect repayment. The BCR borrowing authority has been extended. Now this was in response, Mr. Chairman — and I want to bring the Minister of Finance up to date — to the criticism of the then opposition that there were too many grants being made to the BCR, that they had to be accountable for their own accounts fairly and squarely and honestly represented to the people of British Columbia. In other words, how much money is the BCR spending? So that's why we needed a loan. We had the legislation passed to extend the loaning power of the BCR for that purpose.

Also in this House, last spring, that may not have come to the attention of the Minister of Finance, who was not in the House at the time...that the accounting of the BCR for the past 15 years was indeed a cover-up.

MR. CHAIRMAN: Order, please. The Chair has appreciated very much your assistance a little while ago. May I give you some assistance? Standing order 61 (2): "Speeches in Committee of the Whole House must be strictly relevant to the item or clause under consideration." I'm sure the member will keep his remarks....

MR. LAUK: Thank you, Mr. Chairman, I'll draw my remarks to the point at issue and that is this: that in response to this problem we had with the people of British Columbia, not knowing the real accounts of the BCR, we had to make this initial grant a loan and many others that were to follow so that the proper accounts of the BCR could be kept. Now we find we're going back to the old days, a grant made unnecessarily to the Crown corporation, and again the people of British Columbia will not know the true financial picture of the BCR. We're moving again into an area where this government can be charged once again with a financial cover-up with respect to that railway. Now why doesn't the minister admit to that fact now and have the BCR repay that loan and not write it off as a grant to the BCR? Why do you write it off? We're not ashamed of the BCR. Why should you be?

HON. D.M. PHILLIPS (Minister of Economic Development): I'd just like to remind the House that there was a grant, groan, whatever you'd like to call it, because they were so mixed up when they were in government with their finances that they really didn't know whether they were making a loan or a grant of some $15 million, which was passed prior to the fiscal year-end last year and not repaid by that wise and know-all government now. You know, it really amazes me, Mr. Chairman, when they know fully well....

MR. CHAIRMAN: Order!

HON. MR. PHILLIPS: We're talking about the $40 million and the bill.

MR. CHAIRMAN: We are on section 1, on Bill 3.

Interjections.

HON. MR. PHILLIPS: Well, they were talking about $20 million. If I'm not allowed to talk about it, I would suggest that you use the same rules on both sides of the House.

MR. CHAIRMAN: We are on section 1.

MR. LEA: Mr. Chairman, on section 1 the amount is $400 million that the government is asking this Legislature to approve, that they want to borrow — the government wants to borrow.

Now under this section, we in the opposition want to know what those specific borrowings are for and why. Now in one of the areas where in this last fiscal year there would have been $30 million coming into

[ Page 583 ]

the province from the rail agreement with the federal government, if that agreement has been signed — a total of $117 million. It was to be signed, Mr. Chairman. Now what happened.... No, we're talking about $30 million last year and probably closer to $100 million for this next year. Now the government says it was a bad agreement, they won't sign it.

MR. CHAIRMAN: Order, Mr. Member. We're on section 1.

MR. LEA: I know we're on section 1, and we're talking of whether there's a need to borrow $400 million under section 1. That's what we're talking about, whether $400 million is the right amount, and I suggest to you that it isn't the right amount. It isn't the right amount because we'll show over the questions asked in discussing section I that the need isn't there.

Now $30 million is missing because that rail agreement was not signed, about $117 million over a two-year period. All the government has said is that it isn't a good agreement. I would like to ask the Minister of Finance why it is a bad agreement, because I suggest that as soon as this goes out of this House you'll sign it and you'll have all this money; it'll be a nice cushion. Then it'll become a good agreement and nothing will be changed.

I ask the Minister of Finance why it was a bad agreement. Why didn't the government sign it? Why was it a bad agreement? Tell the House.

HON. MR. BENNETT: Mr. Chairman, just to clarify this bill, because some of the members seem to be making more of the amount than they will of the principle that the province has, to this time — and will have to borrow during this year — up to $400 million.

Now the reason this bill specifies an amount is that amount was clearly indicated by the Clarkson, Gordon review. We don't want to go back to the old days with open-ended borrowing, so that is why this bill puts an upper limit. We don't want to put legislation on the books that, had it been on the books when that party was government, would have led to indiscriminate borrowing up into the billions if they had their way and if they had the legislation. We want to have, as this bill clearly states, a one-time borrowing, and there is a limit. When it's paid off there won't be the opportunity for any future government to make indiscriminate borrowing for current accounts.

I have been in the Legislature, Mr. Chairman, when the past government came for money for Hydro, and said that on projections we'd have to increase the borrowing limit, or the authority. At that time this Legislature did not ask for detailed accounting; we accepted the word of the information available that somewhere up to that figure B.C. Hydro could meet its accounts, but more than that, in doing so, could meet the power needs of the people of this province, We as opposition did not hold up that authority to the detriment, or the possible detriment, of this province.

Now in holding up any bill, especially a bill that gives an assurance to the Legislature that we'll have limits, not an open-ended blank cheque like some governments may want, may have wanted in the past and may want in the future...this puts an upward limit and clearly states that when this bill is dealt with, and this borrowing is dealt with, and when it's repaid, no future government can borrow money indiscriminately to any amount without having to come back to this Legislature and giving a proper accounting to the people.

MR. D'ARCY: Mr. Chairman, if that is the case, then the Premier is going to have to give an undertaking to repeal part of the Revenue Act, which gives the government power to do indiscriminate borrowing, as he calls it, at any time...

HON. MR. BENNETT: Oh, no.

MR. D'ARCY: ...providing they balance the books at the end of the year.

AN HON. MEMBER: Just leave the books alone.

MR. LAUK: Mr. Chairman, it was very interesting that the Premier interceded in the Minister of Finance's bill...

HON. MR. WOLFE: Why shouldn't he?

MR. LAUK: ...and he did so to the Minister of Finance's detriment.

Interjection.

MR. LAUK: When we came into this House before, Mr. Chairman, to ask for extending borrowing limits for Hydro and Crown corporations, that's exactly what we did: for Crown corporations and agencies. Never did we propose such a bill to extend the borrowing power of the government, so don't try and confuse the public, Mr. Premier. That's just nonsense: open-ended blank cheque. Legislation was never proposed in this House before; this is the first time it's been proposed, and $400 million is too high. They know it's too high and that's why we are questioning it. I have a question for the Minister of Finance, and the Premier would be much better off signing his mail and not interceding on his minister's behalf.

[ Page 584 ]

MR. CHAIRMAN: Order, please.

MR. LAUK: Insofar as ICBC is concerned, Mr. Chairman, through you to the Minister of Finance we would still like some questions answered. Because of that blank, or rubber, cheque that was sent to ICBC — and the president of ICBC after several very long discussions with the Minister of Education (Hon. Mr. McGeer) decided that he wasn't going to cash the cheque — we still want to know why the $181 million is needed when we know now, through the Minister of Education, that there are funds in their short-term and long-term investments that could easily take them to October — that's his own admission. Secondly, we still don't have the figures for installment plans. How much is coming in every month, or every quarter, or every third of the year in installment paying for insurance rates? We don't know that yet. We want those figures to know why the $181 million blank cheque is being paperhanger over there at ICBC.

MR. CHAIRMAN: Order, Mr. Member. Order, please. Please relate your remarks to section 1.

MR. LAUK: Mr. Chairman, my point is this: if we know the exact figures about whether ICBC needs this money or not, we'll intelligently vote on section 1. But if we're kept in the dark by this juggernaut majority, how can we vote on that section? Now what I'm saying is this: if we know the figures for installments — like what can ICBC expect over the next several months by those people who couldn't afford those usurious rates of insurance....

MR. CHAIRMAN: Order, please.

MR. LAUK: What are they paying every month? That's what we want to know. How much will that add up to over the year? Wouldn't that relieve the burden on the government to supply money to ICBC? I would think so. Secondly, when does the Minister of Finance expect to be able to borrow, on the basis of a rubber cheque, money back to the government from ICBC?

Interjection.

MR. N. LEVI (Vancouver-Burrard): The Premier was making references before, Mr. Chairman, to equating the borrowing of the government for $400 million with the way B.C. Hydro goes out and borrows money. I would certainly hope that B.C. Hydro doesn't go out and borrow money on the basis of the kind of evidence that we have from Clarkson, Gordon on this one. Why, we didn't even get an audited report, so that kind of argument is, I think, a little bit spurious.

I would like to ask a question of the Minister of Finance and I hope that none of the other cabinet ministers will get up and jump to his defence.

AN HON. MEMBER: Why?

MR. LEVI: Because he hasn't been up yet, you know. I would think with all the rubber that's floating around he would be bouncing up and answering questions.

All right, a question to the Minister of Finance. Why was $26 million left in the B.C. Petroleum Corp. at the end of 1975-76 when it was government policy to transfer all natural gas revenues into consolidated revenue?

You're looking at that one, are you? You're not writing it down.

AN HON. MEMBER: He's listening to advice.

MR. LEVI: He's listening to advice? Well, let's pursue another one. I'll give you two at once so you can think about it. This is another question to the Minister of Finance, Mr. Chairman.

Interjections.

MR. CHAIRMAN: Order, please!

MR. LEVI: I'll wait until the Minister of Finance sits up. Then all the blood will flow from his head. That's the important thing.

Why did the government — this is another question, Mr. Minister — why did the government make a $32.6 million grant to B.C. Hydro in 1975-76? Presumably that was for operating transit losses. Are you not expecting any losses next year? My understanding is you've made no provision for them next year.

Well, mind you, that we can deal with in the budget debate again.

You're not expecting any losses. Are you expecting to operate a transit system?

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources): Is this question period?

MR. LEVI: Of course it's question period, Mr. Minister. That's what the committee stage of bills is about. (Laughter.) When you bring in your mining legislation, you'll know it's question period.

MR. LEA: I would like to know from the Minister of Finance why the government did not sign that rail agreement with Ottawa. If you are going to sign it, when? What changes do you plan to make in the agreement? It affects the amount of money in section 1 of this bill. I'd like to know why you're not signing.

[ Page 585 ]

What's wrong? What's bad about it? Look, you're the Minister of Finance, Mr. Minister. It's your bill. We want to know why you are not going to sign that agreement with Ottawa, because it's money into the consolidated revenues of this province, which come under your jurisdiction. We want to know why, or are you going to sign it, and, if so, when? Come on now, let's have the reasons. Are you going to sign it any time, Mr. Premier? Are you going to sign that agreement at any time?

HON. MR. BENNETT: The Minister of Finance cannot be expected to give policy decisions for every other minister, but it's the feeling that the member for Prince Rupert hasn't been paying attention to what's happening in British Columbia or he'd know that the Premier sent a telegram to the Minister of Finance in Ottawa saying we didn't accept the change in terms of the rail agreement made with a lame duck government, while they were under siege in an election, and we wouldn't sign such an agreement, but yes, we asked them to put any moneys that had been negotiated, not only by the former government but the government before that, in any northwest agreement into trust during which term we would negotiate a fair and proper deal by a government dealing from strength in British Columbia. That money hopefully from the Minister of Finance in Ottawa is in trust subject to British Columbia getting a fair deal and a reasonable deal, and not a deal made with a government desperately prepared to sign anything in the face of an election,

MR. SKELLY: Mr. Chairman, in discussing this amount of $400 million and the advisability of borrowing up to that amount, the Premier mentioned that it was dictated by the Clarkson, Gordon report, and that report has already been questioned and discredited throughout this province. The instructions given to Clarkson, Gordon were to include the figures for ICBC B.C. Hydro and other figures in that report, and Clarkson, Gordon issued a disclaimer on the very first page of the report saying it was not an audit. They were consolidating certain unaudited information provided by the government, certain unaudited information.

Now the member for Nanaimo (Mr. Stupich) questioned the Minister of Education concerning the cash position of ICBC....

MR. KING: Evan, stand on your own two feet.

MR. SKELLY: I'm on my feet now, Mr. Member. (Laughter.)

The member for Nanaimo questioned the Minister of Education concerning the need to transfer $181.51 million to ICBC, and he questioned that minister on the cash position of ICBC, the short-term and long-term investments. of ICBC and the accounts receivable in order to determine whether this money was necessary to be transferred before March 31, 1976, in order to be included in this $400 million figure that we're discussing, in order for this discussion to be in order, Mr. Chairman.

The minister got up to reply, but then he sat down again without giving the answer. Considering some of the answers that he's given to questions on ICBC before, I can understand why he sat down without answering that question. Perhaps that's when the Premier came in with his sheaf of letters and told the Minister of Education that he better keep out of it, because both of his feet were already occupied,

So I don't blame him for wanting to avoid the question, Mr. Chairman, but we would like some clarification on this S181.51 million and whether ICBC requires it or not, and why it should be transferred within the fiscal year 1975-1976. We were told by....

Interjection.

MR. SKELLY: Just let me finish my question, Mr. Member. We were told that the money was transferred on March 30, that cabinet then authorized on March 31 that ICBC wasn't going to cash it, and that they wouldn't need it until October. In fact we were also told via the newspapers that ICBC was going to change the way it's going to charge premiums in the province. For example, if a person buys his premiums on May I he can then buy his premiums for a full year, and his insurance policy will then expire on May I the following year, so ICBC can anticipate far more revenue than they could under the straight fiscal year system that ended on....

MR. CHAIRMAN: Order, please. These points were well canvassed during second reading.

MR. SKELLY: No, not this point, Mr. Chairman, because the government didn't tell us this; we found this one out through the press. And there is a question, Mr. Chairman, as to whether ICBC needs the money, as to whether it's in a deficit situation at all, as to whether they have enough accounts receivable — short-term and long-term investments and borrowing power and their cash position — to make this $181.51 million grant from the consolidated revenue fund necessary. So the minister hasn't really answered the question to the satisfaction of this side of the House. The Minister of Education got up on his feet to answer the question — I guess he was ordered to sit down, and now he's left the House — and we're still seeking a truthful answer to that question.

HON. MR. WOLFE: Does the member infer that

[ Page 586 ]

there have been less than truthful answers?

MR. SKELLY: No. No answers at all.

HON. MR. WOLFE: We'll pass that, Mr. Chairman. Various members have raised the question of the ICBC deficit on which it has been clearly enunciated by this government that we intended to pay, as was included in the Clarkson, Gordon report. I know that the members opposite want to have it paid in some other period or not at all. This is clearly their intention by attempting to delay, obstruct the passage of a measure such as this, because, Mr. Chairman, you realize that the consequences of not paying ICBC within the previous fiscal period would simply mean that the premium rates for ICBC would be higher than they already are — so this is the importance. And the stated part of this government's policy is that that deficit, which amounts to $181 million now, should have been paid in the prior period, and is obviously a part of an anticipated deficit of $400 million.

MR. LAUK: You know, the Minister of Finance doesn't see our point, and I think that he legitimately thinks that we don't see his. I think we do. You know, it was a self-fulfilled prophecy of the last election that there would be a deficit, and they'll do whatever they can to create one where one would not otherwise be.

But in terms of our questions, Mr. Chairman, really, he should answer the questions. The information is easy to come by if you are the Minister of Finance, and one of the other questions that has not been answered is: what do you expect in the way of installment payment income to ICBC over the next several months? How will that defray the costs of running the day-to-day and month-to-month operations of the insurance corporation?

Interjections.

MR. CHAIRMAN: Order, please.

MR. LAUK: Because we are discussing an emergent need for money under this bill.

MR. CHAIRMAN: Order, please. We are discussing under section 1 the $400 million. that's required, and the questions regarding ICBC, the Chair would suggest, should be asked of the minister in charge. Now on section 1: proceed.

MR. LAUK: With respect, Mr. Chairman, the hon. Minister of Finance has conduct of a bill that wishes to borrow sufficient moneys to make good a cheque that was never intended to be cashed. Now what we want to really know is: if, by some mistake, that cheque is cashed, if perhaps the Minister of Education was not able to communicate his desires to the president of ICBC in clear enough terms, the cheque may be cashed — and we all know what would happen then. What I want to know is: why $400 million in relation to the income to ICBC that's current, the short-term investment and so on you've given us...? What about the instalments that will be paid from time to time.

The second question that hasn't been answered satisfactorily is: why wasn't the BCR asked by the government to borrow the $20 million and repay it to the government so we didn't have to worry about this bill in the first place? You haven't answered that question. Why doesn't the BCR borrow, which they have power to do, the money that they owe the government and pay them back?

Another thing: the rail agreement, Mr. Chairman, where they could have at least had a great portion of the $117 million on the table today, was not signed. The Premier got up and said it was a last-ditch negotiation. Well, with respect to the civil service of this province — the people who are still employed by the government, I hope, unless the axe has not reached to that level yet — they negotiated for several months with the federal government on the details, the terms and the amounts involved in that agreement. So this sort of election petulance on the part of the Premier, sending a telegram back east — he's now got to live through that one. He promised us a deficit; now he promised the agreement was no good. He's never given us a reason. It was no good because we announced it; that's why it's no good. It's just election petulance on his part.

But getting back to the Minister of Finance, who seems eminently more reasonable in these matters, although rather not talkative, why won't he answer these questions: installments in ICBC, the BCR $20 million repayment, and what the real reasons are for not signing the agreement?

AN HON. MEMBER: What are you going to do with it? No answers.

MR. STUPICH: Mr. Chairman, I did put several questions to the Minister of Finance. I know he didn't make a note of them; I'm not surprised that he's forgotten them. I'll just remind him of them.

There is one other area that I do want to touch on. It is the Minister of Finance who is bringing forward this legislation that is asking for $400 million. The Minister of Finance and the Premier, in referring to this amount of $400 million, draw on the Clarkson, Gordon report. I would remind the Minister of Finance, through you, Mr. Chairman, that the Clarkson, Gordon report is addressed to him as Minister of Finance, and that it states quite clearly in the Clarkson, Gordon report: "We have been advised

[ Page 587 ]

by you that this amount" — that refers to several grants that were going to be made, among them the ICBC grant — "will be paid prior to March 31, 1976, and therefore it is included in this deficit figure." So obviously it is a government decision.

The question I would like to ask, Mr. Chairman, through you, is: were Clarkson, Gordon advised on the day they were asked to undertake this assignment — I believe that date was December 22 — were they advised at that point in time that several grants were, by government decision — and government certainly has that choice; I'm not questioning that for one moment was it on that date that they were advised it was government policy to include in this deficit that was going to be arrived at a grant to ICBC of $175 million, a grant to the transit of $22 million and a grant to B.C. Hydro of $32.6 million? Was Clarkson, Gordon advised on that date that it was government policy not to recover from BCR $35 million that, as I said earlier... ? I'm not sure whether the minister was aware that it was discussed in this Legislature and in directors' meetings of BCR that it was going to be returned to the province. Was the minister aware that it was going to be returned? Were Clarkson, Gordon advised on December 22 that it was government policy not to have those amounts returned?

I also asked you whether or not you realized that in one month some $30 million of the discrepancy was recovered in the different figures between the date the budget was prepared and the Clarkson, Gordon figures were consolidated, and that on that basis you weren't.... Well, the figures aren't that much different: the discrepancy between budgeted revenue and expenditure had narrowed by $30 million from the time the budget figures were accumulated and the time that the Clarkson, Gordon.... That's not surprising — they were probably a month later. I'm not surprised there were some changes in the figures; I'm not quarrelling about that. I'm just wondering whether that trend is carried forward in the next two months.

We did ask specific questions about special warrants; I thought you were going to comment on them during this debate. Maybe you'd rather do it at another time.

SOME HON. MEMBERS: Let's have an answer on that.

MR. STUPICH: Did you instruct Clarkson, Gordon on December 22 that those grants were going to be paid in this period or at some later date, or who did instruct them? Even if you don't know the answers, I'd appreciate that, Mr. Chairman. If the minister stands up and says: "Well, I just don't know the answer to this question, " then I'd cross it off my list.

MR. GIBSON: Mr. Chairman, I would just like to ask the minister a little bit about cash management under this section. The total authorization is for $400 million. It's a permissive upper limit; he can borrow a good deal less than that at different times. I would ask the minister, taking into account all the cash flows that he can foresee, such as the need to pay that $50 million in natural gas producers' tax to Ottawa and so on, and managing that debt as best he can over the coming year: what does he expect it will peak out at? I presume it will be something less than $400 million because I would expect he's left himself some flexibility and manoeuvring room in there for unforeseen contingencies. When during the coming fiscal year does he expect that that debt will achieve a maximum?

I would anticipate that his cash managers in the Department of Finance will naturally have prepared this kind of forecast, and I would hope that the minister would be familiar enough with it to afford this House the opportunity of knowing what the peak level of the debt will be and, roughly, when that peak will occur.

HON. MR. WOLFE: Mr. Chairman, as I mentioned earlier, at this stage we would not be in a position to know what the fiscal result would be for the immediately past fiscal period until we get through April or beyond, because there are transactions in April which would affect that. But in answer to your question about what we might peak out at and so on I would say $400 million.

MR. GIBSON: And when — roughly?

HON. MR. WOLFE: In the near future and beyond, perhaps, if it turned out that the economy did not produce the revenues that we had anticipated. It's not exactly a very large outside figure, in my opinion.

MR. STUPICH: It seems that the Minister of Finance has forgotten my question again. I am just going to remind him that included in the Clarkson, Gordon report were figures that Clarkson, Gordon said they were including in the deficit because they were instructed by someone on some date. Those are the two questions I am trying to find out about. Certain amounts that we had anticipated bringing into revenue were not going to be brought in, and certain amounts were going to be paid out that we had not intended paying out. If I could just list them again, Mr. Chairman, for the minister: the B.C. Railway recoverable amounts of $35 million; B.C. Harbours Board recoverable amount of $25 million; a grant to ICBC that we did not intend to make in that period but they have been advised by government that it's going to be done in this period — $175

[ Page 588 ]

million; grant to the transit bureau of $25 million; grant to B.C. Hydro of $35 million — it adds up, Mr. Chairman, to a not inconsiderable $300 million.

My question is to the Minister of Finance, not the Premier: when Clarkson, Gordon say they were advised by government that this policy was going to be followed, who gave them that advice, and were they given that advice on the day they assumed this undertaking to consolidate the figures given them by the Minister of Finance? Was it on that date they were told that in consolidating these figures they were to take into account this $300 million and make sure that appeared in the deficit figure? I am not suggesting, Mr. Chairman, that there is anything wrong with doing that. As Clarkson, Gordon say: "It's up to the government whether we go this route." But was it on that date that the advice was given them that these figures were to be included, and who gave them the advice? If the minister doesn't know, well, tell the House.

HON. MR. WOLFE: The principle involved in these questions that the member continues to ask has more to do with what I could call fiscal responsibility, because the attitude that this government has is that we should absorb within the period incurred losses of this nature. You cited a whole series of losses, including ICBC, the transit deficit which we committed ourselves to pay — these were all publicly known facts — and you slide in the B.C. Railway, the harbours board, and other advances or grants which, I say to you, Mr. Member, there was no intention to have repaid until the former government got into such financial difficulty that they saw within the return of these grants some means of coming close to balancing the budget.

What I am saying, Mr. Member, is that our government takes the position of fiscal responsibility in attempting to put out front, where people can see it, what these true losses are and not bury them away in some Crown corporation and say: "Why didn't you borrow in the Crown corporation?" — and hide the true facts from the public. That's not our position.

MR. STUPICH: Mr. Chairman, I am disappointed that you don't call the Minister of Finance to order because I asked him a couple of simple questions an he prefers to make a speech that is not dealing at all with the questions I asked. Now we are not questioning whether or not it's correct policy or incorrect policy, whether it's financial responsibility or financial irresponsibility. Clarkson, Gordon make it quite plain in their report...and I have to respond to the minister's remarks in order to draw his attention to my questions. Clarkson, Gordon make it quite plain in their report that whether or not we recover millions of dollars from the B.C. Harbour Board is entirely a government choice, and I don't quarrel with that. We chose one route and you chose another. Now neither one is fiscal responsibility or fiscal irresponsibility. My questions are not questions of principle, p-l-e, but principal, p-a-l.

What I am asking, and I have asked it several times already but the minister forgets my questions in his rhetoric, is: were Clarkson, Gordon advised of these government policy positions on December 22, 1975, the day that they assumed this undertaking to compile the figures; or when were they advised? Secondly, who gave them the advice? Was it the Minister of Finance or the Premier, or was it somebody in the Premier's office?

Now those are the two simple questions. Who gave them the advice? On what date were Clarkson, Gordon told to include these figures in the deficit that they were to arrive at? Now, Mr. Chairman, I would appreciate it if you would help me get those answers from the minister, or else have him stand up and say that he doesn't know.

HON. MR. WOLFE: Mr. Chairman, I can only answer again in terms of the specific questions that the member is asking, which I suggest do not really relate to the amount to the deficit we're looking at. In answer, though, the decisions individually on those items were made by the departments involved.

MR. STUPICH: Mr. Chairman, again, apparently, the minister has not heard my questions. Did he pass on to Clarkson, Gordon this advice about all these amounts, or did someone else? Or doesn't he know?

When was this advice passed on to Clarkson, Gordon? Now it is possible that if he didn't do it, he doesn't know, and maybe that he doesn't know who passed on the advice. I just want to know who told Clarkson, Gordon and what day they were told.

HON. MR. WOLFE: This information was obtained during the period of the review made by Clarkson, Gordon and obviously it would be on various days throughout the period of their work.

MR. SKELLY: Mr. Chairman, the Minister of Finance talked about fiscal responsibility, and the reason why we are borrowing this $400 million is an example of fiscal responsibility, somehow. He, accused the members on this side of the House of attempting to obstruct and delay the passage of this bill by asking extremely important questions about the amount of the money and the need to borrow that amount of money.

This is responsibility. It is a responsible opposition. We are asking questions about a sum of $400 million which the people of this province will be forced to borrow by that government over there. They'll be forced to pay the interest payments, forced to pay the debt service charges by that

[ Page 589 ]

government over there when it is not necessary.

We're questioning the necessity of that figure of $400 million. We weren't given a proper answer on the ICBC question. On the one hand we're making a grant of $181.51 million to the Autoplan section of ICBC because the Minister of Finance says that's fiscal responsibility, that they shouldn't be expected to pay claims out of revenues or premiums for the subsequent year. Yet the Clarkson, Gordon report says that you should do that for general insurance. Why the difference in policy? Have you got two standards in the Clarkson, Gordon report?

Interjection.

MR. SKELLY: You've got two standards. The Clarkson, Gordon report says that on the Autoplan section you should pay out of general revenues. They're advised by the government...in fact it says in the report that that $181 million should be paid out of general revenues, and yet in the general insurance provisions it says that it should be financed out of next year's premiums. That's what it says on page 33 of the Clarkson, Gordon report.

Mr. Chairman, this is a common practice in all insurance companies, and all insurance companies are in difficulty right now, Mr. Chairman. Anybody who reads the Financial Post or the newspapers realizes....

Interjection.

MR. SKELLY: My story hasn't changed, Mr. Premier. You may be talking about someone else. My story hasn't changed.

The fact is that all insurance companies doing business in North America are suffering during this period of economic problems.

Interjections.

MR. CHAIRMAN: Order, please. We are on section 1.

MR. SKELLY: The Wooton report suggested that the establishment of the Insurance Bureau of Canada was setting up a monopoly on the establishment of rates in this country,

Interjections.

MR. CHAIRMAN: Hon. Members, order, please. The member for Alberni has the floor. We are on section 1. Please address the Chair,

MR. SKELLY: Thank you, Mr. Chairman, I was attempting to address the Chair.

What they are saying is that while other insurance companies in North America, those doing the insurance in the private sector, should be allowed to finance claims out of revenues for subsequent years, and out of premiums for subsequent years, yet ICBC should not be permitted to do so. It's a conscious decision on the part of the government to take money from general revenues of this province — money that is not necessary because ICBC is in the position right now to meet the demands upon it and the claims upon it. So that money is not necessary to meet the current demands on ICBC.

The government admitted it over the last two or three days. They said that claims amounted to $27 million a month. They've admitted that the cash position of ICBC, the short-term and long-term investments and accounts receivable are enough to cover the demands on that corporation until next October.

Really, we should be discussing this bill, Mr. Chairman, sometime in the fall. I hear they're going to have a fall session in order to take some of the burden off the mining companies through royalty taxes and this type of thing. So maybe we should come back in the fall and discuss the advisability of borrowing part of this amount during the fall, because it is not necessary right now.

So we're questioning the necessity, Mr. Chairman, of borrowing this $400 million. The minister has not answered the question as to whether it is needed by ICBC. The Minister of Education (Hon. Mr. McGeer) attempted to get on his feet but he was told to leave the House and he hasn't come back again, because he tried to answer the question....

Interjections,

MR. SKELLY: Well get him back in his seat and let him answer the question.

Interjections.

MR. SKELLY: What did you do, tell him to go and sit in the back corner?

MR. CHAIRMAN: Order, please!

MR. SKELLY: Put a conical hat on his head because he has made so many....

Interjections.

MR. CHAIRMAN: We're on section 1, Mr....

MR. SKELLY: Yes, Mr. Chairman, and I'm attempting to keep to the point of this section and the need to spend $400 million and we haven't received the information that we need in order to make a decision on this section from the Minister of

[ Page 590 ]

Finance (Hon. Mr. Wolfe).

We've heard that they have written a cheque to ICBC, that ICBC didn't need it, and in fact they're not planning to cash it, and they don't need the money until next October, Mr. Chairman, and we want to know if it's proper to saddle the people of this province with a $400 million debt and the debt service charges attached to that debt in this bill, when ICBC doesn't really need that money until October, 1976. That's a valid question and they haven't answered that question.

MR. MACDONALD: Mr. Chairman, I think it's very important when we have a government in the province of British Columbia putting B.C. Into debt for the first time in 21 years — is it 23? — that we get....

Interjections.

HON. MR. PHILLIPS: You put it in debt.

MR. MACDONALD: Oh, no, you're doing it now. You're doing it now and you haven't justified it. You're putting the province of B.C. Into debt that has had a clean record for 24 years and you're not answering questions. You're not answering questions as to why this debt is necessary, that's what....

MR. CHAIRMAN: Order, please! Would the member please be seated?

Interjections.

SOME HON. MEMBERS: Oh, oh!

[Mr. Chairman rises.]

MR. CHAIRMAN: Hon. Members, there's only one way we can conduct orderly business and that is if we can understand what the speaker is saying. Please, let's give more attention to the member who has the floor, and I would encourage the member to address his comments to the Chair.

[Mr. Chairman resumes his seat.]

MR. MACDONALD: I appreciate it, especially the part that members should give attention to what the speaker is saying.

MR. GIBSON: On a point of order.

Mr. Chairman, I'd like to raise this point of order. I agree with you that I was trying to hear what that speaker was saying, and his microphone was turned off. I'd like to ask how that happened.

AN HON. MEMBER: My microphone is off right now.

MR. GIBSON: What are the rules now?

MR. CHAIRMAN: There is a rule in the House that says only one member can stand at a time. There is another rule that says that when the Chairman stands then all other members will be seated.

AN HON. MEMBER: ...shouldn't turn his microphone off.

MR. CHAIRMAN: It is a practice in this House that is at least of two years standing, to my knowledge, that when the Chairman stands the microphones on the speakers' desks are turned off.

AN HON. MEMBER: Oh!

MR. CHAIRMAN: If this House wishes to change that, it needs to be as a substantive motion, and I would suggest that you do so. The hon. member for Vancouver East has the floor.

MR. MACDONALD: My questions are very short. The first is about the letter from the university council. To say that that would be filed on the Department of Education's estimates when the needs should be shown now, before we plunge this province into debt, is pretty obvious. So I would hope that before this bill goes through that letter will be tabled with this House. It's only one item out of many, Mr. Chairman, but it's important that we seek some justification for something that would warrant us putting this province into debt. The other thing is, in response to the hon. member for Nanaimo (Mr. Stupich) who asked a very simple question — and I'll restrict it to ICBC — he asked who gave the instructions, and when, that the money should be paid before...?

Interjections.

MR. MACDONALD: Yes, and he said the answer was that various dates....

HON. MR. BENNETT: From the various departments.

MR. MACDONALD: Oh, by the various departments. Now I understand from then that that various departments were getting in touch with Clarkson, Gordon and one of them gave the instruction that $181 million should be paid out by the province to ICBC before March 31. That's hard to believe.

[ Page 591 ]

Interjections.

AN HON. MEMBER: Is that what you're saying?

MR. MACDONALD: One hundred and seventy-five.

Interjection.

MR. MACDONALD: Was it at various dates these instructions were given to Clarkson, Gordon?

HON. MR. WOLFE: Mr. Chairman, the point continually seems to arise that we have instructed Clarkson, Gordon.

AN HON. MEMBER: That's right.

HON. MR. WOLFE: Absolutely the reverse is true.

Interjections.

HON. MR. WOLFE: I would like an opportunity, with respect, to explain that in conducting their job they went to various departments. They went to the Minister of Finance. They went to other ministers and asked for decisions on what our policy would be on certain matters because they were projecting the financial picture forward to the end of March, at a time which must have been around the middle of January. So we were not instructing them to inject certain matters into their forecast. They were asking the government and the various ministers and departments for information in order to make their report more valid and correct. So I think the emphasis is wrong in suggesting that we were instructing Clarkson, Gordon how to prepare the information in that report. That's simply not correct.

MR. MACDONALD: As I recall page 9 of their report, and I've heard it so many times that I've forgotten the wording, but nevertheless....

Interjections.

MR. MACDONALD: It says: "We have been advised that this grant will be made prior to March 31, and it is therefore included in the current year's expenditures." Now who gave them that advice, and when? That's what we're asking. I would hope that there wasn't contact between this government and Clarkson, Gordon on kind of a various-date basis, because we're told that Clarkson, Gordon were making an independent review of the finances of the province. Was the government then kind of constantly in touch with them, to get their point of view over to them? Here's another question — did you see a draft of the final Clarkson, Gordon report prior to that report being submitted to the government? Was a draft made available to any ministers over there? Particularly, when was that instruction about the ICBC money transfer given, and by whom?

HON. MR. WOLFE: I think I indicated earlier that these instructions or decisions were made by discussion between the auditors — Clarkson, Gordon — and various departments at various dates. I couldn't give the exact date when that particular one was.

MR. LAUK: Mr. Chairman, we have an admission by the Minister of Finance. Maybe we can move from that admission, to get more details on what happened with the Clarkson, Gordon report.

MR. CHAIRMAN: We are on section 1, Mr. Member.

MR. LAUK: That is correct. The Minister of Finance said that Clarkson, Gordon went to various ministers for political decisions as to what should be included in that report.

Interjections.

MR. CHAIRMAN: Order, please!

MR. LAUK: That's what he said. He said that Clarkson, Gordon went to various ministers for a decision on whether or not....

HON. MR. BENNETT: Point of order.

MR. CHAIRMAN: Order, please!

HON. MR. BENNETT: Mr. Chairman, I am sure we can resolve this discussion if members do not attempt to twist words or put new words into the context. At no time did I hear the words "political decisions " — at no time!

MR. LAUK; The Premier again is showing his lack of respect for the rules....

MR. CHAIRMAN: We're on section 1, Mr. Member.

MR. LAUK: Thank you, Mr. Chairman; the Premier was not. Now, Mr. Chairman, as far as we can see, maybe there were various dates where ministers made political decisions affecting the Clarkson, Gordon report, but we should have in detail what those decisions were and when the instructions were received by Clarkson, Gordon. The hon. member for Nanaimo (Mr. Stupich) and the member for Vancouver East (Mr. Macdonald) have read that

[ Page 592 ]

section out. Clarkson, Gordon didn't lie — that's part of the report. They received those instructions, they said, from the government. The Minister of Finance said they received those instructions from various ministers at various times — which is a frank admission that they were political decisions. Now when were they?

HON. MR. WOLFE: I think it's very obvious that Clarkson, Gordon, initiated to do the job they had before them, went and asked questions of ministers and various departments to get the information they wanted. These were not political answers, but they had to get the answers to project the picture for the year. I don't know why you have to take a political inference out of all that.

MRS. E.E. DAILLY (Burnaby North): Mr. Chairman, it's become quite obvious to us then — and my question is to the Minister of Finance — that the ministers did give information to the Clarkson, Gordon people which was requested, The Clarkson, Gordon report showed in the Department of Education an over-expenditure of $10 million. Now we're asked to approve this bill, which obviously includes some of those special warrants, and yet we are not given any information as to what those warrants were for. Now how can we possibly sit here and approve this at this time? I wonder if the Minister of Finance will tell the House, finally, what the warrants were. We'll start with the Department of Education, with $10 million — $7,500,000 for universities.

Now you have told us that each minister gave advice to the Clarkson, Gordon people. If they gave their advice they must have based it on knowledge of what they needed the money for. Now we have been sitting in this House for two to three weeks without being able to get an answer from the Minister of Education or the Minister of Finance as to what that money was needed for. I know that the hon. member for Vancouver East (Mr. Macdonald) has suggested that the request from the universities council, which obviously came from them, or should have, be tabled. Frankly, I'm not satisfied with that being tabled during the educational estimate. I don't see how we can approve this until we know — right now — what that money was for.

HON. MR. WOLFE: Mr. Chairman, through you to Madam Member, I attempted to answer the questions on warrants a few days ago last week, and I was prevented from doing so because of considerable reaction to my being able to answer any questions on the floor of this House. I would like to ask you when there would be another opportunity to reply to those.

I have information which I am proposing to bring in in the question period, which is quite the appropriate place to do this, and I'll be happy to answer those questions. As you know, we were prevented from answering them in an earlier date, so....

MR. SKELLY: Mr. Chairman, the minister originally said that Clarkson, Gordon arrived at its figures in consultation with various directors and officers of Crown corporations and various civil servants arrived at the figures necessary to calculate the deficit that appeared in the Clarkson, Gordon report. Subsequently, as these people cannot make dispositions from consolidated revenue fund and cannot make dispositions of government funds, the minister said that Clarkson, Gordon consulted with the ministers on whether that money should be paid out of consolidated revenue fund because only the ministers have the power to make those decisions to spend money from the consolidated revenue fund. So the minister has admitted that the cabinet members told Clarkson, Gordon, advised Clarkson, Gordon, or instructed Clarkson, Gordon that those moneys would be paid out of consolidated revenue and that was a political decision.

Now, I'm wondering just what kind of terms of reference were provided to Clarkson, Gordon when they were originally commissioned to do the study. The only indication that we have is on page 1 of the Clarkson, Gordon report on the letter of transmittal to the hon. Minister of Finance, where they say: "You requested us to co-ordinate the production of certain unaudited financial information from the year ending March 31." And quite a production it is!

MR. CHAIRMAN: Order, please. Mr. Member, this point has been well canvassed. Will you please move to another point?

MR. SKELLY: No, Mr. Chairman, this is a very important point. We are wondering, relating to the $400 million debt that this government intends to burden the people of this province with, what terms of reference were provided to Clarkson, Gordon when the government originally commissioned this study.

MR. CHAIRMAN: This point has been well canvassed.

MR. SKELLY: No, it has neither been well canvassed on the opposite side nor have the questions been answered. We would like to know what terms of reference were provided to Clarkson, Gordon when they were initially asked to draw up this report. Were they told to come up with a deficit of $541 million? Just what figure were they told to come up with, in terms of a deficit for the fiscal year, 1975-76? I'm asking the Minister of Finance, Mr. Chairman, if he's

[ Page 593 ]

willing to table the terms of reference or if there were terms of reference provided to Clarkson and Gordon,

HON. MR. WOLFE: A point of order, Mr. Chairman. The member has made a direct reflection on a reputable firm involved in a profession in the province, inferring that they would take directions and come up with whatever kind of a deficit that we would request them to come up with. That is absolutely ridiculous.

Interjections.

MR. CHAIRMAN: Mr. Member, if you have in any way impugned any member of this House in....

MR. SKELLY: This is a point of order, Mr. Chairman. The member rose on a point of order and I would like to speak to that same point of order.

MR. CHAIRMAN: Order, please! You will assure the House that you have not impugned any....

MR. SKELLY: I will assure the House that I did not intend to impugn any member of this House.

MR. CHAIRMAN: Proceed with section 1.

MR. SKELLY: The fact is that Clarkson, Gordon did take instruction and did in their own report, on page 9, say that they took instructions from that government on how money from the consolidated revenue fund was going to be transferred to Crown corporations. They say that themselves. On page 1. Again they say they took instructions, They were requested to produce certain unaudited figures — or financial information related to certain unaudited figures — and I'm asking the Minister of Finance if he could provide to this House the basis of the Clarkson, Gordon report, the terms of reference that were given to Clarkson, Gordon, if he's willing to table those in the House. Were they in written form and where are they in the Clarkson, Gordon report?

MR. GIBSON: I would like to address a very simple question to the minister on this subject which has been brought up now. Could the minister advise the House whether he, or any other member of the government, was given an advance draft in whole or in part of the Clarkson, Gordon report and, if so, whether any segments of it were sent back for amendment and what, if so, were the particulars of those requested amendments?

Oh, surely the minister is going to answer that question, Mr. Chairman. Would he answer the first part of the question? Did he, or any other member of the government receive in whole or in part an advance draft of the Clarkson, Gordon report before its final submission?

AN HON. MEMBER: Go ahead. Don't be afraid. Tell the truth, Evan.

MR. GIBSON: It seems an important question, Mr. Chairman.

MR. CHAIRMAN: Hon. member, you must either continue your speech or take your seat.

MR. GIBSON: I was just waiting for the minister to answer, while he searched his memory. I would have thought it was something that would have stuck in his mind, but if lie doesn't....

MR. CHAIRMAN: Hon. member, as long as you're standing the hon. minister cannot answer you.

MR. GIBSON: Well, if he'd give any indication of attempting to rise to his feet I would quickly resume my position in my chair. As a matter of fact, I'll sit down right now, Mr. Chairman. I've been caught on this one before, but I'll be trusting on this occasion and sit down and see if the minister stands up on this simple question.

AN HON. MEMBER: You're filibustering your question.

Interjections.

MR. CHAIRMAN: Order, please. May we have a little more attention in the House?

MR. COCKE: Obviously, Mr. Chairman, the $400 million that the government is espousing they need is not a figure that they can defend, because we've asked questions with respect to ICBC, we've asked questions with respect to other recipients, or potential recipients, of some of this money, and the particular question that I thm!, could very easily be answered by a minister of the Crown is the question of warrants. I just can't comprehend why the minister would stand up and say: "I have the information. I was prepared to give it to you in question period providing you let me take the whole 15 minutes of question period, but I won't give it to you now."

Mr. Chairman, we know that they're paying as many bills — and this is pertaining exactly to this $400 million — in the last fiscal year as they possibly can, including so much money that is to be expended — or normally expended — next year. Aside from the fact that they're not....

HON. MR. McGEER: He says we let you off with $300 million.

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MR. COCKE: Mr. Chairman, listen to that Minister of Education who hops up and down like a Jack-in-the-box. He doesn't even know what his portfolio is...

MR. CHAIRMAN: Order, please.

MR.COCKE: ...from one session to the next.

Back to section 1: if we could have some answers, then maybe we could begin to understand the import of this bill, but the government can't even defend their own bill — the need for the $400 million. They haven't even started to defend it. That's the only time. I've listened to a minister who sits behind the Minister of Finance say: "What is this — question period?" Has he never even sat in the gallery? That's precisely what it is in committee — always question period.

Mr. Chairman, I just ask one more question: did the minister receive the first draft of the Clarkson, Gordon report? Did he receive the first draft?

HON. MR. PHILLIPS: The draft goes through your brain.

MR. CHAIRMAN: Order, please!

MR. COCKE: Mr. Chairman, listen to the winds of the north speaking. (Laughter.) I'll sit down and let the minister answer, but please, Mr. Minister, through you, Mr. Chairman, won't you recognize that the people of British Columbia, and the opposition in particular, deserve some answers to questions about the $400 million debt that you're going to plunge us into? Don't you think it's about time'you got up and made some answers?

HON. MR. PHILLIPS: You plunged us into debt.

Interjections.

MR. CHAIRMAN: Order! Order, please.

Interjections.

MR. LAUK: Mr. Chairman, in all seriousness, I regret...

MR. R.L. LOEWEN (Burnaby-Edmonds): Seriousness?

HON. MR. PHILLIPS: You haven't got a serious bone in your body.

MR. LAUK: ...very much the delay that's been caused in the committee stage of the reading of this bill.

Interjections.

MR. LAUK: I think that this matter could be brought to a vote very quickly if the hon. Minister of Finance could answer one or two of the questions that have been put to him. In particular, Mr. Chairman, the hon. Liberal leader (Mr. Gibson) and the member for New Westminster (Mr. Cocke) have asked a very serious question. There was speculation in the press, I should remind the committee, that there was a first report that was submitted to the Premier and the Minister of Finance. There was some speculation that that report was not good enough; it didn't provide a big enough deficit, so they sent it back with instructions. If the Minister of Finance does not answer the question about whether or not he was satisfied with the first draft, which he most obviously received — if he doesn't answer that question — then he — must remain condemned in silence in his chair as having tampered with Clarkson, Gordon's report.

Interjections.

MR. CHAIRMAN: Order! Order, please.

HON. MR. PHILLIPS: Leaderless party!

MR. NICOLSON: Mr. Chairman, I too have no desire to prolong this debate.

SOME HON. MEMBERS: Oh, oh!

MR. NICOLSON: If the minister indicates he's willing to rise, I would certainly be pleased to yield the floor to this most important question. Do you intend to, Mr. Minister? Yes?

Interjections.

HON. MR, WOLFE: I would like to assure the House, Mr. Chairman, with regard to the Clarkson, Gordon report that I received the only copy of this report and that no change was made in any figures supplied by this report.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mrs. McCarthy moves adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.