[ Page 1479 ]

CONTENTS

Routine Proceedings

Committee of Supply: Department of Agriculture estimates.

On vote 3.

Mr. Cocke — 1479

Hon. Mr. Phillips — 1479

Division on vote 3 — 1479

Department of Economic Development estimates.

On vote 36.

Mr. Lauk — 1479

Hon. Mr. Phillips — 1484

Mr. Gibson — 1487

Hon. Mr. Phillips — 1492

Mr. Nicolson — 1494

Hon. Mr. Phillips — 1496

Mr. Lauk — 1497

The House met at 8:30 p.m.

MR. L.B. KAHL (Esquimalt): Mr. Speaker, in the gallery this evening I have three friends: Mr. and Mrs. Charles Danbrook and their niece, Kathy Thompson. I'd like the House to bid them welcome, please.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF AGRICULTURE
(continued)

On vote 3: minister's office, $50,728 — continued.

MR. D.G. COCKE (New Westminster): Mr. Chairman, just some clarification — the next vote, I understand, is 36. Okay. The minister wants to say a few words, I understand.

HON. D.M. PHILLIPS (Minister of Agriculture): I just wanted to say, Mr. Chairman, that the member for Prince Rupert (Mr. Lea) has brought up a very interesting subject. I'd like to give it some consideration.

Vote 3 approved on the following division:

YEAS — 28

NAYS — 16

Mr. Stupich requests that leave be asked to record the division in the Journals of the House.

ESTIMATES: DEPARTMENT
OF ECONOMIC DEVELOPMENT

On vote 36: minister's office, $95,304.

MR. G.V. LAUK (Vancouver Centre): You know, Mr: Chairman, I feel that it's appropriate for the Minister of Economic Development (Hon. Mr. Phillips) not to take his place in his estimates and give the usual review of what he has done in the last four months, because you know what I am going to say, don't you? He hasn't done anything, has he? And you and I both know that. The minister knows it, and out of shame and out of a feeling of guilt he will not stand in this House and tell us, and admit to us, and admit to the people of this province: "I haven't done anything!"

MR. L.B. KAHL (Esquimalt): You took the files; he couldn't do anything! (Laughter.)

Interjections.

MR. LAUK: Is that the kind of help you want? (Laughter.)

MR. L. NICOLSON (Nelson-Creston): I move the member for Esquimalt be now heard.

MR. CHAIRMAN: Order, please.

MR. LAUK: The member for Esquimalt may not be too clever with words, Mr. Chairman, but he knows the minister didn't do anything.

AN HON. MEMBER: That's right.

Interjections.

MR. LAUK: He says that's right.

MR. KAHL: You need some help over there, Gary!

MR. LAUK: Mr. Chairman, I feel that the minister should have made a few opening remarks. He has the only indication of policy….

HON. G.B. GARDOM (Attorney-General): Tell us about your Japanese garden!

MR. LAUK: I'll get to that in a moment (laughter) if you promise to talk a little bit about the Skagit Valley a little later.

It's appropriate for a minister in the beginning, especially when we are discussing his salary, that he stand up and indicate to the House, if he hasn't done so already as a new government, the industrial

[ Page 1480 ]

strategy or the new approach that he is going to take. The only indication of policy from the minister was an article written by Bob McMurray where he interviewed the minister and the minister read out a few of my own press releases to Bob McMurray. Either that, Mr. Chairman, or Bob McMurray got an old article out concerning an interview between he and I…

AN HON. MEMBER: Between him and I.

MR. LAUK: …between him and I…

HON. K.R. MAIR (Minister of Consumer Services): Him and me.

MR. LAUK: …between him and me. (Laughter.) I recall the press release that I gave; I won't read it all — but most of it.

SOME HON. MEMBERS: Ohhh!

MR. LAUK: It had to do with the major coal development in the northeast. It discussed, in greater detail than I noticed in the McMurray article with the current minister, the industrial strategy for British Columbia.

Now that came as a bit of a surprise, because I felt, Mr. Chairman, that the clarion call of the coalition party when it was running in the campaign in December last was that it was the NDP's mismanagement, inability to cope with economic problems and strategy that they were campaigning on. In four months the new minister has given us my old press release.

HON. MR. GARDOM: Like you left in his office.

MR. LAUK: No, I'm complimented. I should have left a few more, Mr. Attorney-General, through you, Mr. Chairman, so at least he'll have something to do.

Now as I said some months ago, if the hon. minister would like to call me and have lunch, we'll sit down, we'll have a little discussion and I'll outline to him further details…

Interjections.

MR. LAUK: …further details of the industrial and…. I've got lots of time, Mr. Chairman. I wonder if the minister has.

MR. G.H. KERSTER (Coquitlam): Should you bring your own thermos?

MR. LAUK: Whenever we adjourn, Mr. Chairman, to 8:30 we're all a little bit frisky in the House.

I'd be glad to provide him with the ideas and the strategies that were developed in the three years of the NDP administration so he could carry on with them. But he knows them well enough, because it was clear from the McMurray article that this is the strategy he is going to continue. It's a wise one. I compliment him for espousing that strategy and for carrying through with it. It's the most logical one for the province and it's the one that has the most chance of success. By success I mean jobs, income, tax revenue, social and economic development in the north, and so on, those kinds of things that I know he and I share. It's our common ground. But I found it a bit amusing because he wasn't saying that prior to December 11. Now was he, Mr. Chairman? But anyway I take compliments wherever I can get them and this is one area where I'm pleased that the Minister of Economic Development followed the correct path.

I have a few comments to make about the Crown corporations and Crown agencies under the minister's charge, and want to ask a few questions as I go along. I hope and I know the minister will make notes, or somebody will for him.

Now the BCDC, the development corporation, as everyone knows, was established under the NDP administration. It was designed to deal fairly with private industry, the small businessman with respect to the making of loans in various communities.

An independent board of directors was established. An independent chairman of the board and policy was arrived at by this independent board, one or two of whom the Minister of Economic Development sacked. He was a little bit greedy for blood at the beginning, Mr. Chairman, and he started thrashing and hacking away and he didn't realize that the personalities on this board were not NDPers. One or two of them might even have supported the coalition. They were independent businessmen, some of them, all of them from different experiences and different backgrounds that could provide the new development corporation with a unique thrust in British Columbia, not one of these development corporations that we see in other provinces under any political stripe that falls flat on its face because it slides into the park barrel. It starts making those friendly little loans to friendly little communities, and so on. It starts getting involved in projects way above their heads, that kind of thing.

It was for that reason that the NDP established a corporation with an independent chairman of the board and an independent board. At no time did political appointees, ministers of the Crown, exceed in number two on this board. There were only two ministers on the board. The majority of the board of directors was independent of the government. I can assure you that on very many occasions those two ministers were outvoted. I think, using some hindsight, it was rightly so.

[ Page 1481 ]

The policies that were established were fair. The criteria for loans were fair. The way of dealing with applications was efficient and it was the only Crown corporation in the history of the province of British Columbia that paid a dividend to the people of the province. It was small for the first year of operation, I grant you, but the symbol of paying that dividend was important to me and I hope as important to the new minister.

AN HON. MEMBER: Where did the money go?

MR. LAUK: It went into consolidated revenue. There was a design for some of that money to be used for the international trade fair. There's nothing wrong with that. Is the minister against international trade fairs? I didn't write a rubber cheque for it. Well, you'll be able to talk about international trade fairs. The international trade fair was a good concept and I think I'll mark that down and talk about that for half an hour.

Now as I say, I want to carefully catalogue the history of….

Would you go over and sit beside Lyle, please? (Laughter.)

lnterjections.

MR. LAUK: He says no thanks.

Mr. Chairman, I think it's important to catalogue carefully the history of this development corporation so we understand how it was established and so that if there is any falling off the track, or the straight and narrow, by the current minister in the coalition government, we can point that out to him and the public can be aware where he is swerving off to the left or the right of the straight and narrow. We can point that out to him — affectionately and without malice.

But one of the first mistakes the minister made, I suppose, in riding very high and being uplifted by his election victory, was that he fired, as chairman of the board, one of the most respected and capable business people in the province, and without any reason, without substantial notice. The chairman, as he then was, was not even in the province to be notified. He didn't even wait until the chairman got back.

I won't comment on the rudeness and the bad taste of that move at this stage; I will pass it over as being, in the first few days of office, an unfortunate oversight. It became clear that the hon. minister was not even aware of this gentleman and his background, because it was rumoured out of the official rumour department in the minister's staff that they weren't aware of who he was — they say.

AN HON. MEMBER: Is that an official department?

MR. LAUK: Or is it an unofficial one? I'm sorry — it was unofficial rumour from the leak department.

Fine, that's not a problem. But who did he replace this distinguished gentleman with? Who did this minister, part of the coalition party which promised to be at arm's length from its Crown corporations if they gained office…? Himself; he appointed himself. A corporation that is a very delicate corporation in the public's eye, a fledgling corporation just starting to grow and have its presence felt in the economy of British Columbia — it should have gotten off on the right foot. We feel it did. This minister made a fatal blunder — he made himself chairman of the board of directors. How can it now be said that this corporation, which makes important loans, albeit some of them small, but important to the small businessmen of this province…? He made himself chairman of the board.

MR. G.F. GIBSON (North Vancouver–Capilano): What is it they say about a man who is his own lawyer?

MR. LAUK: They say a man who acts as his own counsel has a fool for a lawyer. Now I'm not going to be that harsh. I'm not going to say and suggest to you, Mr. Chairman, that the minister, as chairman of the board, will act improperly. But, you see, that's not the issue; that's not the issue. The people of this province must not only feel assured that fair play is the order of the day with such a corporation, but it must be seen that way. There must be absolutely no suggestion that that person can be reached or influenced by the government of the day. In other words, although the government may be the only shareholder of such a corporation, there must be a strong….

MR. G.H. KERSTER (Coquitlam): Gary, you don't believe all that, do you?

MR. LAUK: You see, the hon. member for Coquitlam doesn't understand the concept. This is one of the failings of British Columbia politics: people like that come into this House and they don't understand the basic ethical concepts of this kind of operation.

Interjections.

MR. LAUK: He just said from his seat, Mr. Chairman: "You don't believe all that, do you?" That's the quality of people we have running this province. It's a shame! It's a real crying shame that someone in his seat would say: "You don't believe all

[ Page 1482 ]

that stuff." In other words, you don't accept ethics; you don't accept the concept that these kinds of almost-banking or financial institutions should not be controlled and politically directed. Do you want to know something, Mr. Chairman? That's a sad way to do business; it's an inherently unethical way to do business.

What I would suggest to the minister is that he still has time to rectify this blunder — relieve himself of that post and find an independent chairman of the board. I will not for the moment comment on other personnel that he did not see fit to renew. I want Mr. Chairman to realize that I did not resign, and I didn't have notice of my firing. I don't resent that at all. I heard through the press that I was fired.

HON. MR. PHILLIPS: No kidding!

MR. LAUK: That was fair enough.

HON. MR. PHILLIPS: I was going to send you a message, but I couldn't find your address in the files. (Laughter.)

MR. LAUK: We shredded the telephone book. (Laughter.)

Mr. Chairman, in all seriousness, though, I do urge the minister to take himself out of that delicate position.

AN HON. MEMBER: Perhaps you should remove yourself.

MR. LAUK: Don't be rude.

It would only bring him into disrepute with the public. It will call into question the ethics — the apparent independence of the corporation. It should be at arm's length. I agree it should. It was established that way. There should be at least one minister appointed to the board but never in a position to dominate the board, and it should be run as an independent institution, not as an arm of the government of the day, because it's important. The projects that were undertaken, Mr. Chairman, by this corporation were good projects and, I'm sure, will be carried through by the minister — at least I hope they will. I hope that loans that are made are loans that are fairly make, without interference with the criteria that were originally established by that board. If they're not, he, as chairman of the board, is especially susceptible to public criticism. I think that it should never be opined that a person got a loan because they had a membership in the party.

Now as far as the corporation's activities, let me make some comment by way of reports, seeing that the minister did not. The development corporation has been increasing its number of loans to small businesses throughout the province. Among its criteria is that it usually emphasizes small industries that are unique and, hopefully, not within the lower mainland region, which, it was the view of the board, was considered to be in need of less assistance of that type than regions in the north and in central British Columbia and some parts of Vancouver Island and so on — worthy objectives, I am sure you will agree. As I say, an ever-increasing number of loans have been made, in a totally unbiased way, to all applicants who have fulfilled the criteria of the corporation. I think the minister has found the corporation's loan department is efficient, that its analysis of economic viability was second to none, and that the moneys placed in its hands by the sole shareholder were well invested and well utilized.

The other project that was very important to me when I was minister was the industrial land project. The philosophy behind the government involving itself in exemplary industrial parks is manyfold, not the least of which is in assisting in decentralizing industry not only from the lower mainland to other regions of the province but within various regions themselves — away from urban centres to more suburban areas and so on, making access to work places shorter and easier.

HON. MR. PHILLIPS: Like Tilbury Island.

MR. LAUK: Like Tilbury Island. I really regret that the minister thinks that's funny. I really regret it because he's missed the point, and if he's missed the point that means the Tilbury project may not proceed. If the Tilbury project does not proceed it will not only be a tremendous loss of investment but it will mean the failure of this government and this minister to understand the vary basic thing here on the lower mainland, and that is that these industrial parks are absolutely necessary to decentralize industry — to relieve the pressure from the urban area. They're very important, Mr. Chairman — absolutely important — and the minister should realize that.

He shouldn't just, with a wave of the hand — a partisan wave of the hand, I might say — dismiss these projects and say: "Oh, well, we attacked it in the House. We voted against the bill and we voted against the project and we spoke against it — therefore we can't support it now." I hope he can bury the old election hatchet and become a minister for all the people of this province. Don't destroy what is good. Don't throw out the baby with the bath water. Don't get caught up on rhetoric, Mr. Chairman.

I'm sorry the minister is bored and looking around the House, but I mean what I say with dead seriousness. I hope that he takes the matter to heart. The land department of the British Columbia Development Corp. is second to none — small and efficient. It's an excellent land department. I hope he

[ Page 1483 ]

understands that.

As far as the British Columbia Railway is concerned, the minister is again on the board and I think that he should be thinking seriously of getting that board to an independent position to help solve, among other things, the extension problems it's having, construction costs, and its labour-management disputes, which are constant. I don't think you can come down with a guillotine in this matter. I think if the Minister of Labour (Hon. Mr. Williams) has done so it's incumbent upon this minister to intervene — not for the sake of political expediency but for the sake of the public of British Columbia and for the sake of the railway itself. He must establish a new management, an efficient one. It's under-managed as it is.

He must take on or appoint a new financial officer — I understand there isn't one there now — and perhaps even a committee of finance to undertake the very difficult and delicate but absolutely necessary task of refinancing the railway. I think that perhaps the BCR should look outside of internal financing in a very substantial way. I think that should be done.

The board of directors, as I say, should be completely independent, and I would ask the minister — I know he is committed to that concept — what his timetable is with respect to an independent board and for changes in management. I know he can't comment specifically on changes, but…what his timetable is. I assume that it would follow appointment of an independent board of directors.

Mr. Chairman, dealing with the minister's department — and I'll be very brief — I would like his views on the trade mission programme as established by the NDP administration. It only just got started. As you know, trade missions are very important. They have some immediate successes, but a lot of their success depends on a long-term, consistent approach. I hope that that trade mission programme is continued. I'm not satisfied — as I wasn't under my administration — with the amount of money that was available for the trade mission programme, but I hope it continues to grow and that it's regarded not as a cocktail circuit for various people on the public purse, but regarded as I regard it, and as the NDP administration regarded the trade mission programme, as sending capable people abroad, businessmen, salesmen of their own enterprises, to other jurisdictions to sell the very valuable products that we make here in British Columbia. I think it was beneficial; it only just got started and I hope it's continued. I would like some comment from the minister with respect to that. It can be a feather in his cap as we felt it was a feather in ours.

The Vancouver office was established under my ministry, Mr. Chairman, and it was designed to be based in Vancouver to service the bulk of the lower mainland industries, as well as the interior, but mostly the lower mainland. It also had the trade mission headquarters there, but the Vancouver office was also designed to serve the small-businessman public. It had a series of programmes and information, a lot of information there for the small businessman. Some of the simplest things that small businessmen, because they are so busy on a daily basis, tend to miss can be pointed out by the trade development officers and the other officers in that Vancouver office. They have some expertise that I know was very helpful to the small businesses throughout the lower mainland and throughout the province.

Their seminars, their management seminars that also the Economic Development department and the BCDC did jointly, were very well received throughout the province, and I would ask the minister to comment on whether those will be continued.

Now to get into the great industrial strategy — but just before I do, I said I was going to comment on the international trade fair. I regret very much that the minister cancelled the trade fair. I don't know what their problems were at the point that he was cancelling it. There wasn't much of a press statement on it. I don't know whether or not I can sympathize with the minister's decision. It only just got started. I recognize it may have been a little late to get all of the countries in that we wanted to get in. We were trying to accommodate the People's Republic of China. But I was informed during the election, in the last report that I received, Mr. Chairman, that there were a number of countries that indicated interest and were about to commit. That may have been delayed somewhat as of December 11, and not for any reason of the change in government of itself, but simply by the normal delays that take place.

If there's a reason or explanation, then certainly I wouldn't criticize the minister for cancelling the trade fair. But the concept was an excellent one. Yes, it was established under the previous Social Credit administration….

Mr. Chairman, can I have your undivided attention? I just want at least one.

As far as the international trade fair is concerned, could the minister indicate whether he is planning one for next year? I think it would be appropriate. I don't know whether China would be still involved, but one has been long overdue. They're good — trade fairs. They bring businessmen from all over the world here, and they can be quite a good project indeed for the minister's department.

As far as the industrial strategy is concerned, Mr. Chairman, I was looking at the article written by Bob McMurray, as I stated. I say, quite seriously, that it's just a reiteration of the industrial strategy of the NDP administration, and I think that that's good. I have my old press release here, for example, and there are many others I have that I am sure the minister has

[ Page 1484 ]

available to him where I outline the strategy as it was developing of economic development in the province. I remember announcing a $1 billion programme to develop the coal resources of northeastern British Columbia, to be shared by governments and the private sector.

There's been a great deal of speculation — I said at that time, Mr. Chairman — in recent weeks about prospective multi-million dollar projects in the northeast, and I went on to describe how studies that had been made by the Economic Development department had led to the inescapable conclusion that the coal resource development in the northeast must be accelerated. I talked about coalition mining, some of their problems, discussed briefly — no, this is a private company — talked about Quintette coal and the B.C. Rail, Canadian National Railway. I described the Neptune Terminals feasibility study and how they're proceeding at Prince Rupert. I discussed the role of the Department of Mines and many other things. And I would certainly be delighted to carry on in a moment about some of the details of that programme.

But, Mr. Chairman, one of the things I did not announce, and that I hope this minister takes very seriously, with the Alberta government, is cooperation in the coal development of that great northern area. It was discussed between our government and theirs, that the British Columbia Railway build a line, roughly, through the Monkman pass and connecting up to the Alberta resource railway. This would not only avoid the competitive struggle that may ensue with our railway and the two national lines, but it would be a tremendous demonstration of cooperation between Alberta and British Columbia.

I had discussed it briefly with BCR officials, and we were about to embark on a surveying programme through the Monkman Pass, in cooperation with the Alberta resource railway, and connect up with them at a point on the border, ship their coal west and some of ours east.

I think it was a major project. I wonder if the minister would be prepared to comment on that idea we had some year or so ago and see if it's a distinct possibility, because I think it would be an excellent idea.

We did not have time to study its economic viability, but the crews of BCR surveyors were being lined up to go into the Monkman Pass area, when weather permits, to do such a survey. I know I've asked the minister a number of questions and made a few points to him. I wonder if he's prepared to reply.

HON. MR. PHILLIPS: I see that the ex-Minister of Economic Development is in a very conciliatory mood this evening. I guess he should be because he did have some ideas when he was Minister of Economic Development, but unfortunately — and I told this to the former minister before — while that man held that portfolio his hands were tied by the real minister of non-economic development, the Minister of Lands, Forests and Water Resources (Mr. R.A. Williams), who actually ran the government.

You know, I used to tell the minister, when I was sitting over on that side of the House, that I actually felt sorry for him because he was just like a puppet on a string. When the Minister of Lands, Forests and Water Resources pulled the string, he danced. But the minister didn't very often pull the string, so he didn't dance very much, and he really wasn't able to carry out some of the programmes that he did have in mind.

Now he mentioned a number of things. One thing he failed to mention, Mr. Chairman, was some of the areas in the province where industry really wanted to go, and they were held back….

MR. G.R. LEA (Prince Rupert): Pourquoi?

HON. MR. PHILLIPS: Oh, various items. I don't want to bring all of them up now. (Laughter.)

Interjection.

HON. MR. PHILLIPS: Well, certainly. When I was up in Kamloops, I travelled north of Kamloops to a little Savonna.

AN HON. MEMBER: It's Savona!

HON. MR. PHILLIPS: Savona? Okay, Savona. People in that area were very upset because a certain industrial group wanted to put a ball plant in there for making steel balls to service the mining industry in the Highland valley.

AN HON. MEMBER: Quebec Steel.

HON. MR. PHILLIPS: Yes, Quebec iron foundries. That industry did not come into British Columbia.

MR. LEA: Do you know why?

HON. MR. PHILLIPS: Yes, I know why — because of certain rulings from a certain department, the Department of Highways.

Interjection.

HON. MR. PHILLIPS: But, Mr. Chairman, the ironic part of it is that that minister stood idly by; he didn't fight for that industry. He didn't try and do anything. That minister should have gone and fought for the industry for that area. Now it's too late. I've contacted them; they were frustrated with British

[ Page 1485 ]

Columbia. That minister stood idly by and somebody else was doing the planning. That minister really had his hands tied.

Interjections.

HON. MR. PHILLIPS: You know, Mr. Chairman, there was a strong economy in British Columbia in 1972, and it carried on because even that government couldn't stop it, but it was gradually grinding to a halt.

It's interesting to hear the ex-Attorney-General (Mr. Macdonald) who was minister of energy. I listened to his comments this afternoon, and I'll have to tell the people of British Columbia at the appropriate time…. But there's a man who drove more industry out of British Columbia, as minister of energy, than any other…well, no, I won't say more than Mr. Williams, the ex-Minister of Lands, Forests and Water Resources.

But I want to tell you, Mr. Chairman, that already there are strong indications that the attitude toward British Columbia is changing; industry is coming back, and we're establishing strong policies that will see this great province again be an economically viable province.

MR. LAUK: We've heard that speech. What else have you got to offer?

MR. MR. PHILLIPS: Now the minister mentioned trade missions. Yes, we're going to continue the trade mission policy. We're going to enlarge it, but we're going to make some changes in it. We're going to make a few changes in it. We're going to improve on it.

AN HON. MEMBER: How are you going to improve it?

HON. MR. PHILLIPS: Well, you mentioned a few things, but we have some ideas and we're going to make some improvements. You mentioned certain aspects of it that we're…. You know, we're going to make some improvements. It's a good policy, because I want to tell you, Mr. Chairman, that British Columbia and, indeed, Canada has to be a trading nation or economically we will fail. We have to be a trading nation and we have to become more aggressive in that area. It's sort of ironic to talk of building up a secondary manufacturing base in the province of British Columbia unless we're prepared to go out and capture those markets. But I'll talk about that. I'm sure it will come up and we'll have more discussions on it later.

With regard to the trade fair, yes, we had to cancel the trade fair, Mr. Chairman, through you, to the member, because we couldn't get enough of the nations of the world to participate. You realize that the trade fair was called a year ahead of when it should have been, and would normally have been, because of the former Premier (Mr. Barrett) coming back from China. It was his desire, and he actually ordered the trade fair.

Interjection.

HON. MR. PHILLIPS: Well, all right, but the Premier actually ordered the trade fair. He ordered it a year ahead of time and the nations just couldn't get ready, so it had to be cancelled. It was unfortunate, but it shouldn't have been called ahead of time. It should have been called in the normal year and it probably would have gone ahead with success. But there, Mr. Chairman, is a case of interference by the Premier, and I guess if it had been a success we would have said "great deal," but it was a failure and we just couldn't carry it through. But we will take another look at trade fairs.

Mr. Chairman, the former Minister of Economic Development (Mr. Lauk) was talking about the northeast coal study. Oh, yes, Mr. Chairman, there were great announcements made during the election about a billion-dollar coal development in the northeast part of the province. Somebody alluded to that this afternoon — I think it was the member for Oak Bay (Mr. Wallace) — that it was going ahead just because it was in my constituency.

MR. G.S. WALLACE (Oak Bay): Right.

HON. MR. PHILLIPS: Well, Mr. Chairman, I want to tell you the history of that project. That project had been going ahead and was all set to go in 1972 and would have been in production today. It would have been supplying tax dollars to the Province of British Columbia; it would have been supplying jobs, but there was a change of government and the whole thing was brought to a grinding halt. So it seems a little bit ironic that….

Interjection.

HON. MR. PHILLIPS: You'll have your chance, Mr. Member. It seems just a little bit ironic that just before the next election this member would announce a billion-dollar coal deal in the northeast. When I came to Victoria, I started endeavouring to find out when this project was going to go ahead, when the coal was going to start moving. I found, Mr. Chairman, that there really hadn't been all that much study done. There were no deals made, although you did say there were no deals signed. We had to put together a task force, a committee of cabinet to start doing some studies, which we are doing now, Mr. Chairman.

[ Page 1486 ]

Interjection.

HON. MR. PHILLIPS: You didn't do any studies. That's just about the point I was going to bring up. There were really no studies done at all. It was just political mish-mash that he was trying to bring out in the heat of an election campaign. I won't hold you responsible for that, because the ex-Premier probably told you to do that. But we are progressing solidly and soundly, doing the proper studies so that we can determine whether it's going to be an economically viable project. We're doing it in conjunction with all the departments of government which will be involved. Those studies, Mr. Chairman, are presently going on. We're not only involving the Department of Highways and Transport and Communications; we're involving the Department of Labour, the Department of….

Interjection.

MR. PHILLIPS:. Yes, but you didn't do anything. You might have been going to do something, but the point is, Mr. Chairman, they didn't really do anything.

MR. LAUK: We did it.

HON. MR. PHILLIPS: No studies were done.

Now, Mr. Chairman, the member got Vancouver Centre (Mr. Lauk) spoke about the British Columbia Development Corp. and chastised me somewhat, although he was not too rough about the British Columbia Development Corp. He said that I was trying to influence the board and he hoped that I wouldn't, and so on. Now I want the member to know that, as chairman of the board, you don't have a vote. In other words, I have less to say and have less influence on that board than if I were a director, because I don't have a vote. The member also knows that when a subject comes up on that board, I can't really discuss it. It's merely for me to sit there and see that the deliberations carry on and….

MR. WALLACE: Shame! Shame!

HON. MR. PHILLIPS: Mr. Chairman, the member knows that I can't exercise any influence over that board, because I don't even have a vote on the board.

SOME HON. MEMBERS: Oh, oh!

Interjections.

HON. MR. PHILLIPS: Mr. Chairman, as a director — and I want you to know, Mr. Chairman, that there's only one director. It's a completely independent board and I, as chairman, do not even have a vote on that board. Now how much further out on the limb at arm's length politically could you get that corporation?

AN HON. MEMBER: Try it again.

AN HON. MEMBER: Is that the way Bonner is with Hydro, too?

HON. MR. PHILLIPS: I want to tell you I don't even have a vote on that board.

MR. WALLACE: Poor Don!

HON. MR. PHILLIPS: Not two cabinet ministers; one with no vote. I tell you we've got a good board, but I'm not condemning your previous board. We've got a good board.

MR. LAUK: Why didn't you call him up before you fired him — pick up the phone and say: "I'm sorry"?

HON. MR. PHILLIPS: Hawaii's a long way away. (Laughter.)

I want to tell you that the British Columbia Development Corp. will play a very important role in the future development. But it will be at arm's length and it will be complete…from political interference.

Interjections.

HON. MR. PHILLIPS: Mr. Chairman, there was some mention of the British Columbia Railway. When we think of the British Columbia Railway, we have said that that will be apart from political interference. There will be only one cabinet minister on board; no cabinet minister will be the president of…. We won't have three of four others on there. I want to tell you that if anything in the history of British Columbia was under the influence of political interference for the last three and a half years, it was certainly the British Columbia Railway, of which that member was once the vice-president.

The Minister of Labour was the vice-president, the Premier was the president, the member for Fort George was a director. That railway, Mr. Chairman, was just about on the rocks — not the rails, on the rocks — in December of 1975 because of political interference. The morale of management was low; the morale of the workers on the railway was worse than low. We're moving slowly but steadily to put the British Columbia Railway back on the rails and to make it once again so the workers on that railway and the management are proud of that railway.

Mr. Chairman, it…

[ Page 1487 ]

AN HON. MEMBER: Is that what Bill 22 is all about?

HON. MR. PHILLIPS: …was very, very disappointing to learn of the amount of political interference that was exercised over the management of that railway in the last three and a half years. I'm not going to go into all the details, but I do want to assure the House…. Maybe we're not moving as swiftly as we should, but we're moving surely and progressively and making good, solid decisions that will once again make that railway a great movement in the economy of the province of British Columbia.

I want to tell you, Mr. Chairman, that there is the Hall royal commission on railways that is doing a survey of all railways in western Canada. I hope that there will be some progressive major steps come out of that for rail traffic in all of western Canada. I'm not just sure how that Hall royal commission will fit into the British Columbia Railway, but it certainly should be considered. It's not in their terms of reference but there are some ideas that may have a bearing on the future of the British Columbia Railway.

MR. W.S. KING (Leader of the Opposition): Which Hall was that, Don?

HON. MR. PHILLIPS: Mr. Justice Emmett Hall.

AN HON. MEMBER: A professor?

HON. MR. PHILLIPS: Yes.

AN HON. MEMBER: That's the long haul.

HON. MR. PHILLIPS: A very learned gentleman….

MR. KING:There was another Hall over here.

HON. MR. PHILLIPS: No, no, Mr. Justice Emmett Hall.

I want to say, Mr. Chairman, that we are making some very positive moves because that railway probably more than any other single factor outside of a policy decision affects the economy of the province of British Columbia. I can see in future years that that railway will have even a greater impact on the economy of British Columbia. As we move to complete a new northwest rail agreement with Ottawa, as we move to have the spur lines to move that coal out of the northeast part of the province, and as we move to negotiate to see that the Ashcroft-Clinton line is brought into being, that railway will have even a greater impact, probably greater, as I say, than any other single factor other than a policy. It is very important.

It must be well run; it must be away from political interference. The board of directors must be responsible not only to the government but to the opposition as well. They must answer for their actions. It must be run like a railway, and that is the way we are moving in that direction.

I think I've answered, Mr. Chairman, all of the member's questions. If I have missed any, I will try and pick them up again at another opportunity.

MR. GIBSON: Mr. Chairman, I'm going to restrict my remarks tonight to what you might call the background for economic development in British Columbia. I think that Economic Development is about the most important portfolio in British Columbia right now, because in spite of all the starry-eyed phrases that a lot of people get off at election time, the British Columbia economy is not in particularly good circumstances.

I would have hoped that the minister in opening debate on this estimate would have given some of his thoughts about the direction we might be going. Once again, as I said earlier on, the Social Credit Party was very voluble during their campaign as to where we might be going, but once they actually got into office we aren't getting much in the way of detail.

I'll try and sketch the situation as I see it. We start off, Mr. Chairman, with an economy that is thoroughly polarized, just as our politics is polarized, between management and labour, as the minister is very well aware. That is one of the fundamental problems of British Columbia.

Interjection.

MR. GIBSON: No, it is not unique to this province, Mr. Member, but it is endemic in this province and it is more serious in this province than in most parts of Canada, and far more so than in most parts of North America. We can get on to the details of that in the Labour estimates, Mr. Chairman, but I'll make that statement: there's a definite….

Interjection.

MR. GIBSON: I'll get to that in a little bit, Mr. Minister. I want to set the scene, if I may.

And, of course, we have a polarization on the political side as well between the right and the left, between two groups of people, each of which thinks they have the answer. The only person in politics that I will ever say is absolutely wrong is the person who knows they have the answer. Anyone with an open mind, I say they might be right. But anybody, who's sure they have the answer, I know they're wrong.

Our situation today, Mr. Chairman, is uncomfortably similar to the situation in the United Kingdom. The United Kingdom has a terminal case of

[ Page 1488 ]

a disease that British Columbia has right now. I'll tell you why it's an identical situation. In both cases there was a competitive edge that gradually started to slip away as the rest of the world moved on. In the United Kingdom it was a competitive edge of capital investment in technology and the whole outgrowth of the Industrial Revolution. The United Kingdom was on top of the world. Gradually the rest of the world moved on; the rest of the world's technology became better and its productivity became better. A lot of this was because of the political system which saw the energies of that great nation directed inward and against itself, and one class against another. We see the same kind of thing happening in British Columbia.

Our competitive edge, Mr. Chairman, is the resources of this province. That's traditionally been our competitive edge: the resources of fibre and the resources of mineral — hard rock coal and petroleum. We're losing that resource competitive edge, Mr. Chairman, particularly in per capita terms as the years go by while the rest of the world — and I'll document this later — is building up around us. We're falling behind.

Can things really be that bad? I want to cite a little evidence. I tabled this in this House the other day: a study printed in the Financial Times which showed that over the years 1963 to 1974 British Columbia was 10th out of 10 provinces in terms of economic growth per capita. I say that not as a political statement, Mr. Chairman. There were two different governments in power over that period. Neither one of them, in my opinion, did a good job of economic development in this province.

AN HON. MEMBER: Over what years?

MR. GIBSON: From 1963 to 1974, Mr. Member. Over that period B.C. was 10th out of 10 — the worst, the last in economic growth per capita in this country. In the year 1975 our gross provincial product per capita went down. While the rest of Canada, on average, was holding about even, we went down. Is this a short-term trend? No, Mr. Member. Let's go back 40 years — two generations. In 1936 the per capita income per British Columbian was 133 per cent of the Canadian average. There's a steady decline over the years up to 1974 when we're down to 107 per cent.

British Columbia, in terms of income per capita, has been losing out for the last two generations. I say it has something to do with our development policy. It's about time that some government took hold of that and looked at it.

Interjection.

MR. GIBSON: The hon. member suggests that labour strife in the province of B.C. may have had something to do with that. I suggest it may well have, Mr. Member, but it doesn't, through you, Mr. Chairman, explain that tremendous discrepancy. Remember that British Columbia was getting to be a unionized province even back then in 1936. So we have to look to something else to explain that decline. The something else, as I see it, is an increasing exploitation of increasingly marginal resources. I'll come back to that later.

I say that's evidence, Mr. Chairman, that our economy has been run not badly, but without understanding, for at least the last two generations. We have been living in a phony economy; we have been living in a fool's paradise. I suggest that the only thing we have to sell in this world — because we are a trading nation, we do not make most of the things that we consume — is our productivity, value delivered per dollars received. That's the only thing that we have to sell. When our productivity starts to get badly out of line, then we're in trouble.

We are a very high-cost economy, Mr. Chairman. A recent study looked at the average hourly earnings in manufacturing. Manufacturing, God knows, is not our strong suit, Mr. Chairman. We are trying to develop it. We'd like more of it. The average hourly earnings in manufacturing in British Columbia were $6.53 while in Ontario they were only $5.17. Let's be proud of that. Let's be glad we have the highest average hourly earnings in B.C., but let's make sure that somehow we can maintain that — because we're falling behind. The sooner we see it and adjust, the easier our adjustment will be.

Let's go to some of the major industries — the forest industry. I'm glad the Minister of Forests (Hon. Mr. Waterland) is here tonight, and I'll be talking about mines in a minute, too. Our forest industry came to an early development because we are proximate to a major market in the United States, because we had a politically stable situation, because there was capital in abundance available and because there were good, coastal, low-cost stands available to be exploited. Our forest industry built up very rapidly. That was the first wave of expansion — through the war and up to the mid-50s.

The second tremendous wave of expansion was in the interior pulping operations, through the 60s. It was another tremendous wave of expansion fueled by the same things: political stability, proximity to markets and easy capital availability.

Then things started to change a little bit. Our costs started to go up — not just our labour costs, though they went up considerably, but capital costs. Capital costs went up tremendously in the forest industry. In the first half of this decade they tripled, and that made an enormous difference to what wood was economic in this province and what wasn't.

So we've reached the state now where the head of

[ Page 1489 ]

the British Columbia Investment Dealers Association makes a careful submission to the Pearse Commission and claims in his remarks about it that forestry is now a no-growth industry in British Columbia. Think of the significance of that for a moment, Mr. Chairman. This is the industry which has fueled our advance for the past generations. This is the industry that's been providing the extra jobs that we need, the trend line 5 per cent more jobs per year during the 70s — from 1970 to 1975.

If this is a no-growth industry, where do we turn? We aren't Arabs of the world in terms of fibre or in terms of minerals, though a lot of people think we are. Trees grow four to six times as fast in New Zealand or Brazil; they grow three or four times as fast in the southern United States in the pine stands there. They are more accessible and cheaper to harvest. We have a high-cost product in our fibres. It's a slow-growing product, it's a quality product, but it's high-cost. There's no point in pretending we're Arabs of the forest industry. That competition in previously undeveloped parts of the world is going to hurt us badly.

Interjection.

MR. GIBSON: We're a small percentage of the American market. You're not thinking of sawlogs, I don't think, Mr. Member, but we'll get back to that.

Look at the mining industry. It's either static or in decline in most of it, with the one special factor of coal — I'll come back to that. In hard rock, Mr. Chairman, particularly copper, we have the same magnificent kind of history we had in the forest industry where access to market, a political stability, a capital access and, above all, a tremendously skilled body of mining people in British Columbia combined to allow us to build up a team that exploited the lowest grade copper resources anywhere in the world — 0.5 per cent and below.

AN HON. MEMBER: Until 1974.

MR. GIBSON: Until 1971 or 1972, Mr. Member. I'm sorry I have to say this now because that momentum was cut in 1972. I'm sorry to have to say that, but it's true. That momentum which was built up over a generation was killed in 1972 by Bill 31, by a new philosophy of government. I'm convinced that it was done not deliberately, Mr. Member. I'm convinced it was done in ignorance, not deliberately. Nevertheless, it was done.

Let's not kid ourselves: the world has other copper deposits. When you get down to the southwestern United States you have copper deposits of double the grade. You work down through South America, as the Minister of Mines knows, and it goes up to triple and quadruple the grade. You get around to the Philippines and it's the same thing. As we lose that unique advantage of political stability — and believe me, Mr. Chairman, we did — and we lose that momentum, we're in difficult straits in the mining industry.

I have sympathy for the Mines minister. I'm going to give him every support I can. Coal is one bright spot but, Mr. Minister, even there I would suggest you are going to have to put a lot of money into that northeastern coal patch if you think you're going to make something grow. While a firm like Kaiser Resources could bring their coal production onstream in the late 60s — completing their plant in 1969 or 1970 for in the neighbourhood of, say, $30 per annual ton — it's triple that now and more.

Where the Kaiser deposit came in it was serviced with the infrastructure — the roads, the rail lines were all nearby, townsites nearby — but not up in the northeast. All those things are going to have to be built. It's not going to be easy, Mr. Chairman, and I beg this government to tell that story. Don't say it's going to be easy, because it's not. It's going to take a lot of hard work.

Petroleum and natural gas: a declining asset. We're living off windfall profits that the Arabs bestowed on us a couple of years ago. That's why I call our economy a bit of a fool's paradise, because they're great profits, they're wonderful to have and they're windfall, but they're going. They won't be around to fuel the British Columbia economy in any great degree a generation from now. That's why I say we have about a generation to change some ways our economy works. I'll get back to that again later.

Agriculture we've just debated considerably. I won't go into that again.

Tourism, called by many our third industry, is static. It has hardly moved at all from 1974 to 1975, and it has a political unpopularity among some sectors of the population.

Retirement is a major industry in this province. In terms of absolute growth, it is one of the great engines of our growth, but it is not a solution for productivity — not by any means. It is a thing that will build up the service industries in our province, as people from other parts of the country bring their treasure and their transfer payments to British Columbia, but it will not increase our productivity, and that has to be the basic solution for the per capita wealth of this province.

Government sector expansion as well has been an engine of our growth, and that's another fool's paradise thing in the equation because government sector expansion does not bring productivity, in general terms. Some government activities do bring productivity — a new highway or something like that — but, in general, government is a necessary service and not an addition to productivity. It's a necessary service that, in some fields, we've expanded too far.

[ Page 1490 ]

The greatest example of all of the fool's paradise is the wealth and standard of living that British Columbians obtain from the sale of their assets, be it their resources, or, above all, our land, which we are selling off, either to foreigners or to newcomers — perhaps newcomers from other parts of Canada or other parts of the world — at good high prices, and living off that capital in very large degree. Where it's invested, it tends to be invested again in real estate, which drives the price up again further with no new wealth being generated. That's a fool's paradise, Mr. Chairman, when you live by selling your assets and call yourself rich, because you can't do that long.

All of this comes back in the end, in British Columbia, to the dilemma of growth in population. Our growth in population has been the thing that has hurt our growth in income per capita. What are the origins of British Columbia growth? What's the trend line, first of all? It's around 3 per cent a year, and it doubles every 22 years, roughly. This has gone on for quite a while in British Columbia. It slacked off last year to about 2.6 per cent, but that was probably because of the difficult economic year that all of Canada had, because that's been a pretty good long-term trend line. That growth comes about 40 per cent from other parts of the world and about 60 per cent from other parts of Canada, which means that really only 40 per cent is more or less controllable, and that by the federal government, not by British Columbia. As British Columbia's population grows and we are forced into the utilization of more and more marginal resources, there's less and less economic rent there and we're less and less able to pay the high wages that we've been accustomed to.

We have changing settlement patterns in this province, and we should have changing settlement patterns. I see where the minister in a press statement the other day mentioned that settlement away from the lower mainland is going to have to be encouraged, and it certainly is in our various industries. I'll mention specifically the retirement industry, which most people are not used to thinking of in those terms, but the retirement industry is going to be increasingly concentrated on the eastern slope of Vancouver Island. That's just natural. It's a nicer place to live with more amenities. It's nicer for people who retire, and it makes more sense rather than the increasingly crowded and industrialized lower mainland. That's the kind of thinking I suggest somebody in the cabinet has to do, and I hope this minister does it.

But let's look again at that growth rate, Mr. Chairman: 3 per cent per year. If we were looking at an underdeveloped country, we would say: "Well, my God, the poor devils, how can they ever help themselves and build up their gross national product? They have a growth of 3 per cent per year. It's impossible." Yet we have that here in British Columbia. This is a problem that other parts of the world have tried to grapple with and it's been very, very difficult for their economy. Here we have it right here, so let's not sneer at any underdeveloped countries; we have their problem. Just because they haven't found a solution to it, let's not feel we're very smart. We haven't found a solution to it either. But it does give British Columbians one very good reason not to be afraid to aid other parts of Canada and other parts of the world because, believe me, to the extent that can make other parts of Canada and other parts of the world more desirable to stay in and slow our rate of growth, that's a good thing to do for all of us.

So our future, Mr. Chairman, is continued growth and fewer jobs out of our traditional industries. I mentioned earlier a 1970 to 1975 trend of 5 per cent per annum, which doubles in 14 years. What do we do? I suggest that we have about one generation to convert our existing competitive edge to another kind of competitive advantage.

Our competitive advantage has been, as I suggested earlier, resources. That cannot continue to be our competitive advantage because other parts of the world have richer resources per capita. You only have to look at a country like Brazil of some of the other nations, particularly round the rim of the Pacific, South-East Asia aside.

If resources are going to cease to be our competitive edge, the only thing I can think of that can be our new competitive advantage is people — skilled, educated, productive people, based on the existing industries we have, the existing kind of training we have, naturally — but, nevertheless, a tremendous change in the way our economy works. That is a very, very great challenge, Mr. Chairman. And the first step towards meeting that challenge is to recognize it, and to look for the right solutions.

I suggest that the old proposed solution of resource upgrading is not going to solve the problem. It will be of some help; I think we'll have a copper smelter in British Columbia. But studies that are done on things like what you might call the fabrication stream of copper suggests that your highest employment per dollar invested is in your final fabrication process. We're going to have very little of that here in British Columbia, because you get into your lighter copper shapes, and so on; these are very closely market-related because of transportation factors.

Then the next step in terms of labour per capital dollar invested is in the mining. Thank God we've already got that bite of the apple; we've got it pretty well developed. After that comes smelting and the drawing of wire. This is a setup where there are very high capital costs for the amount of labour generated. It's not going to solve our job problem. There'll be some of it — there may be a steel mill — I think more

[ Page 1491 ]

likely a direct reduction, using B.C. scrap, or on a smaller scale with direct reduction of our ores, but there may be some kind of…. Let's not kid ourselves. We can do some of this, but it's going to be marginal.

I want to quote a man who is the vice-chairman of the Economic Council of Canada — a very important speech, in my view, that was made last June. He makes this statement — I don't want to quote him out of context, but he makes this point often: "A generation hence I would expect that a substantial slice of manufacturing activity, as we know it in Canada, will have been relocated to other places."

His basic thesis is that Canada is going to increasingly get out of the secondary manufacturing business; it's going to be taken up by other parts of the world, by the less developed parts of the world. He suggests that we are going to have to move into other areas: "Thus we in developed nations must focus on the fields of high technology as well as on other activities in which there is a large component of educated labour, items that incorporate design skills or require special skills of other kinds." I think that's right, Mr. Chairman; it comes back to this idea of skilled people.

We have got to move into what some call the "knowledge" industries, this whole area of high technology. It's so nebulous when you talk about it that way, yet it's one of the jobs of this minister, as I see it, to nail these things down and say that means exactly this industry, and this one and, this one, or at least these are the possibilities; let's develop some kind of a shopping list of these kinds of industries, and then go out and get them.

The California of Canada, maybe. We've got the climate. We've got the other things about being a desirable part of the country to live. Somehow it hasn't grown here; maybe we have to try and use a little bit of political clout, the way California did in the United States to get some of that high-technology business located in that part of the country.

You know, when you look at H.A. Simons, when you look at Sandwell and when you look at Wright Engineers…we can do this kind of thing; we can build on these kinds of skills. Around the world these companies can compete, bar none.

I want to make a specific suggestion: I believe that the next great frontier in the mining business is undersea mining, and that is particularly going to start in the Pacific Ocean — roughly, off Hawaii, between here and Hawaii. We are well situated in a geographic sense for that.

As the minister may know, all those manganese nodules on the floor of the Pacific contain something like a thousand years' supply of copper, nickel and cobalt, and manganese in abundance — more than you could use. But those nodules grade around 0.5 per cent copper — I think that's right, isn't it, Mr. Minister? This is what we're mining now in British Columbia. We should be there, Mr. Chairman, at the very advance of that frontier.

We have in British Columbia the B.C. Research Council that's doing extensive work on undersea mining, some of it on a federal programme. We have a firm like International Hydrodynamics in North Vancouver, absolute leader in world technology in submersibles. We have multinational mining firms, Canadian-owned and based, and operating here in British Columbia, that can provide the springboard or be part of the consortia that get working on this undersea mining out of British Columbia. Some of the large mining firms are looking at this right now, as you know. One or two of them have taken the plunge into the undersea mining, so to speak.

My suggestion is: let the government provide whatever is necessary to get this mobilized in terms of shared investment if necessary, in terms of research if necessary, in terms of seed money if necessary. Let's get that going because that could be another generation or two resource technology for British Columbians. It's something we already do very well. It's going to take a decade or more to develop; we have to get started now. This is an example of moving our competitive advantage from one area to another, with some relationship between them.

I mentioned earlier the Pacific Rim. How about a Pacific Rim trading corporation acting out of British Columbia and fostered by the B.C. government? We have some smaller companies working in segments of that field right now. I'd like to know more about it. I'm just suggesting it as an example that the minister might look at.

Here is the conclusion and recommendation I bring out of all of this, Mr. Chairman. I'm not going to talk about any of the details of the minister's department tonight; I'll do that later on. The conclusion and recommendation I bring out of all this is: is now not the time to have in British Columbia what Canada had a decade or more ago in terms of a royal commission on the economic prospects of our general industrial structure and the way people make their living?

I suggest that we are the watershed, Mr. Minister, through you, Mr. Chairman. There is a point where you have to "grasp time by the forelock," in the words of Shakespeare, and make sure that we know where we are going. A royal commission could look into each of these industries and ask: just where is the forestry going? What's our growth going to be for the next year? How many jobs will it provide? How many jobs will mining provide? How many jobs will secondary industry of various kinds provide? How about the shopping list that the department develops, and how many jobs will that provide? I think it's going to need some kind of group like a royal commission or a task force or whatever you want to

[ Page 1492 ]

call it to undertake this enormous, not just research project but conceptual project.

We have in the government, and in British Columbia, universities, and in the labour and business community we have the brains to put these ideas forward. What is needed is some kind of a mechanism to bring them all together. I very sincerely ask the minister for his earnest consideration of setting up and asking for a report within a year or two — because this isn't a short-term problem — a royal commission on the economic prospects of British Columbia.

HON. MR. PHILLIPS: Mr. Chairman, I'd just like to reply briefly to some of the comments made by the member for North Vancouver–Capilano. When he started out I thought he was going to give me some solutions to some of the problems.

MR. GIBSON: I only had 30 minutes, Don.

HON. MR. PHILLIPS: I recognize the problem. I analysed this; I have agonized over it. There are really four main problems that we have insofar as developing a high-technology growth in British Columbia, a high technology in our industrial sector, which we must develop if our economy is really to progress. It will progress in certain areas, but if we are really going to go out and compete in the real world, in the Pacific Rim, we must have new highly technological industries established here, not necessarily labour-intensive.

Now what are the drawbacks to this, really, in the real world? The first thing we have to examine, Mr. Chairman, through you to the member, is the present tax structure in Canada. You see, those industries that are well established in the province of Ontario can basically live with our income tax structure today because the majority of them are old and established. They have their plants written off and they have a cash flow. The plants they have were built on uninflated dollars. But today our income tax system does not leave those dollars in the hands of private industry. They haven't available the necessary cash to do the research to build the plants because they have to build them on inflated dollars — all of their profits would be siphoned off. The industries that are established here just are not going to be able to have that cash flow to do it. We have to talk to Ottawa; we have to talk to the Economic Council of Canada.

Mr. Chairman, I smile to myself, not because I disagree with the theory of Canadians owning Canada; but I want to tell you, I don't know how Canadians are going to own Canada when the federal government takes the bucks away from them that we need to own our own industry in Canada.

I think, Mr. Member, through the Chairman to you, that if you think about that situation and if the Economic Council of Canada thinks about that situation…and indeed all governments must think of that situation. The thing applies to what happened in England as well.

MR. GIBSON: Very much so.

[Mr. Veitch in the chair.]

HON. MR. PHILLIPS: Because as your bureaucracy in government grows, then the cost of government grows and siphons off that cash that is needed to build new industries. You know, we condemn our friendly neighbour to the south, but they leave money in the hands of individuals so they can own the United States instead of the government owning it. I think if we really were to look at it…and I'm not trying to make excuses for what we can't do, but we do have to recognize these problems. I'm saying that the Economic Council of Canada — and they have had some missions on this very point — are going to have to go to Ottawa and they're going to have to say: "Look, if we want to own Canada, if we want to build up a high technology in our industry, if we really want to compete…." You know, Ontario is practically the only province in Canada that has any secondary manufacturing industry, and if it wasn't for the automobile industry down there being in the close proximity that it is, and some of the other industries that have been there for a long time, Ottawa would be suffering too. That's one point.

My second point is that the province of British Columbia is considered from the Ottawa front as a "have" province, Mr. Chairman, a "have" province. But what Ottawa fails to realize is that in order for us to grow, it takes more dollars to provide those infrastructures and the railways and those roads than it does in some of the other provinces in Canada. In order for us to grow, we must spend those dollars today. Really, a dollar today doesn't build…. Well, I shouldn't say a dollar doesn't build roads, but we'll say $1 million in British Columbia today doesn't build very many roads. It doesn't build very many railroads. Ottawa has to realize that, sure, British Columbia may be considered a have province, but our cost of growth is severe today, and even in our resource industries, where we have to build additional railroads and additional roads, Ottawa has got to recognize that we are not necessarily a have province when it comes to expanding.

During the past three and a half years, there have been practically no agreements made to pick up those Ottawa DREE dollars, and I don't say that I necessarily agree with that programme. I would far sooner those tax dollars stay here in British Columbia in the first place.

[ Page 1493 ]

MR. GIBSON: We should opt out of a lot of the programmes and take tax points.

HON. MR. PHILLIPS: That's right, but why not leave… ? Now I'm not saying that we shouldn't donate to the rest of Canada, but why should we send those tax dollars down to Ottawa and then go down on our hands and knees to get them back? Why not take a look at that? I realize I'm treading on another jurisdiction, of federal-provincial relations, but it all has to do with the economy of British Columbia. Now we're going to go after those tax dollars. We're going to go after them in four separate programmes, but we're not going to put those DREE dollars in direct subsidy to industry, because if the industry goes broke…. We've seen that's what happened in the Okanagan. You put industry where they shouldn't be. We're going to use those DREE dollars all we can to assist us with our infrastructures and our railroads and our roads, those high-cost items, and we're going to go after them.

We're also going to ensure that where an industrial development goes in, the people in that area and the local taxpayers who used to think, "Oh, it's great; we're going to have industrial development…." But there's an impost put on that local community. What I'm really saying, Mr. Chairman, through you to the member, is that we've got to have those Ottawa dollars. We've got to have lots of them, because even if we're going to develop our primary resources, our coal…. Yes, in the forest industry we're not completely developed yet. In the northern part of the province the forests may not be as abundant as they are…but those forests are not committed, particularly in the northeast and certain parts of the north. But there again, our forest industry will stagnate unless the industries are allowed to make a reasonable profit, because there is new technology that can be brought into the forest industry. Many of the products that we are burning today other countries of the world — ones that do not have the abundant forests we have — are using those byproducts through new technology so that nothing is wasted. But that takes dollars. So I just want to discuss with you those two areas. Now you could say: "What are you going to do about it?"

Interjection.

HON. MR. PHILLIPS: Yes, where are we going to move? We're going to have to move. We're going to have to make submissions to the Economic Council of Canada. We're going to have to point this out to them, even though it's been pointed out. We're going to have to get away from the syndrome that every industry, if it makes a big, fantastic profit, is ripping off the people.

We're got to get back and realize that industry has to make a profit if it's going to have the money to provide that new technology, and to provide the jobs. But first of all we must establish a policy that we do want growth. And that policy has been kicked around in the last three or four and a half years. I think the young children of today, going to be the citizens of tomorrow, are entitled to grow up in a healthy economy, and there are going to be limitations.

I want to tell you, Mr. Chairman, through you to the members of the House, that we haven't finalized all of our economic policy at the present time. We're working on it, but we haven't finalized it, One of the reasons we haven't finalized it is because we want to make sure, when we do bring it down, that there has been a lot of thought put into it, that we don't make any mistakes and that we realize the parameters in which we can grow in British Columbia.

You mention growth away from the lower mainland; we've recognized that. We also recognize that there are certain growth factors that are going to prevail on the lower mainland, and over which we have no control, and that is the prairie immigration. I don't blame those people for coming to want to live in British Columbia after working hard and spending all their years in those rough winters on the Prairies. I don't blame them for that.

AN HON. MEMBER: You got part of the prairies too.

HON. MR. PHILLIPS: Yes. And we can't move certain industries out of the lower mainland; we can't move our ports; we can't move our ship-building industry; we can't move a lot of the manufacturing that's there. But we can assist in directing any industry that is economically feasible to move away from the lower mainland — yes, we can assist. But we're going to have to ensure that when those industries move to the north there are amenities provided for the work force in that area.

So, as I say, we're working at it. We haven't finalized it, but I'd be happy to discuss other aspects of it if you want to bring them up.

I just have to say this in closing, Mr. Chairman: what we're doing in the department is not working in isolation; we are working with all of the departments of government so everybody has a chance for input. I just have to think of the Minister of Human Resources (Hon. Mr. Vander Zalm), who is not in this House tonight. Some of his policies are going to be a big factor in the economic growth in British Columbia. People laugh at me when I say that because they say: "What has Human Resources got to do with Economic Development?" It is all part and parcel of establishing a climate where everybody is going to put their shoulder to the wheel and everybody is going to work to make our economy vibrant so we can all share in the benefits.

[ Page 1494 ]

MR. L. NICOLSON (Nelson-Creston): Well, I'm glad to hear the minister talk in those terms. Maybe since he brought up the subject of the Department of Human Resources, provision of jobs and involving people in the economy in a positive way, I'd be interested to know what the Minister of Economic Development's proposals are for the handicapped.

Some people don't like to use the word "handicapped," you know — they have other ways of describing themselves. In fact, I think the word "handicapped" has become rather confusing because in housing it's almost come to mean someone confined to a wheelchair. In other cases it means mentally retarded. So a good word has fallen into some rather disuse.

I would ask the minister, in terms of what he just said about the Department of Human Resources and the aims and objectives of his department, if he would care to elaborate on ways in which the physically disabled — for instance, amputees who have skills — could be brought into the labour force, perhaps with the government or maybe some of the Crown corporations of which he is a director setting the example.

We have in Nelson, Mr. Chairman, an organization of amputees. Now one of the people, Mr. Kusma Poohachoff, who is heading this up…. I'm sure that if I was to direct Mr. Poohachoff to the minister, he would find out the determination that this individual has to make a meaningful contribution in society. He has one artificial leg: he can still run equipment; he still, of course, drives a truck. He can run a backhoe and various types of equipment.

We have found there is no end of difficulties in terms of…. There are problems in trying to parachute people into certain jobs where they don't hold seniority and various things such as that. But has the minister given any consideration when he's talking about the Department of Human Resources and what they might do?

In Nelson there is an organization of at least 10 very active members that would fall into this…who are amputees with maybe a leg or an arm or a physical disability this way, an amputation or maybe something that's been madly smashed up in an industrial accident and virtually impaired.

I've tried — and, in fact, through some of those efforts there has been a special person hired in the Public Service Commission, herself an amputee or a handicapped person — to try to guide some of this in government employment. But I would urge the minister to consider that.

One of the other things that I was quite surprised with was when I often used to listen to the Minister of Economic Development, when he was on this side of the House, and some of his concern was about what was happening with the boxcar plant at Squamish. Now, of course, he's the minister, and he has the opportunity to learn first-hand just what is happening there, and this, of course, I see as a success. The things I keep seeing…and I keep listening to the minister. Now he's the minister and he's a director of B.C. Rail and during a recent bill he seemed to give the impression that he wasn't happy with the boxcar plant, that he still wasn't convinced.

I was taken aback. I thought that production was going ahead, and everything else I'd heard, Mr. Chairman, had been favourable. But no, the minister…. Perhaps I got the wrong impression from what he said during the debate to extend the borrowing power of the B.C. Railway into which this was brought. Of course we have a fuller opportunity to discuss B.C. Rail now, because we're under the correct estimate and it is the minister's responsibility.

Well, you can imagine my shock and my delight when I saw on television the other evening Mr. Lloyd Bingham, the general manager of B.C.'s railcar plant. The press had come up and they had looked at the product that was being turned out, the new chip car, the first big run from B.C. Rail's boxcar plant, and it turns out that they had estimated about $30,000 per car — that was the estimate — and lo and behold, we had an under-run in this Crown corporation that was started under the NDP. The boxcars were coming out, in spite of the inflation which took place, the unpredictable inflation which has not just caused some troubles in things in which government's involved — but when one reads reports of various private corporations' annual reports, one can't help but see the role that they see played by inflation.

But here is the B.C. Rail boxcar plant — railcar plant as they call it — and I understand that the cars were coming off the line at something like $1,500 less. So I'm concerned that either I misunderstood the minister or maybe he, too, is proud as a British Columbian. Maybe he, too, is proud to be a part, especially to be a director of B.C. Rail, and to be part of the B.C. Railway's railcar plant — because, you know, they even loaned free to CP and CN Railways one of these new $30,000 chip car products. They painted it white, especially painted up, and it says: "Railwest Manufacturing Co., western brand of railcars." It is reported by Mark Wilson on the Province business page, and it is something that I think we can point to with some pride.

Of course, Mr. Bingham had a method in his madness. He's hoping that the transcontinental railways of Canada and, indeed, the United States and other countries, will show interest, and interest they are showing. He'd be happy to see Victoria use some leverage in the way that other provinces do. So I think there is a pretty subtle statement.

Well, I think the minister could carve out a very good career for himself if he'd to into politics, the Minister of Economic Development. I think he has the lungs for it!

[ Page 1495 ]

Interjections.

MR. NICOLSON: Now I have his attention.

What Mr. Bingham has said is: "I would be happy to see Victoria use some leverage in the way that other provinces do." I think that's a subtle little suggestion — communication. Has the minister met with Mr. Bingham?

HON. MR. PHILLIPS: Yes, I went to the plant.

MR. NICOLSON: That's good. You have been through the plant. I would ask, with your indulgence, whether maybe the minister could interject and say….

Are you happy with the plant? What's happening there now, Mr. Minister? That's one of the questions I'd like him to answer. If he answered it now and it was out of order, I wouldn't object, Mr. Chairman. But if he would answer it later…. What are your feelings now? The press seem to be quite impressed. Both on television and in the Vancouver Province on the business page there was some coverage, and I think some well-deserved coverage.

The minister was complaining about the number of cars that were being produced. I remember him saying just last year: "Oh, you haven't produced one car over there. You haven't produced one car." Well, now they've produced…. This one — I think the white one — was the 390th car built at Squamish in the plant's newly completed initial run of 400 chip cars for B.C. Rail. Railwest has now embarked on a second run of cars for the parent railway comprising 500 bulkhead flats for carrying forest products.

I remember, Mr. Chairman, very well these people getting up, particularly people like the Minister of Highways (Hon. Mr. Fraser) and members who lived on the line, complaining about the shortage of cars and how the major railways were not returning the B.C. Rail cars through the pool and so on, how they would rather pay demurrage charges and so on and tie up these railcars than build cars of their own, and they were misusing them. These people, like the Minister of Highways, were calling for more railcars on the B.C. Railway because it was crippling the industry.

So not only is it providing jobs in Squamish, but it's stabilizing the flow of products right from up in the North Peace through the South Peace and down the line in terms of badly needed railcars, and we're doing it ourselves. We've proved that we can have a major manufacturing industry — a fairly heavy industry — right here in British Columbia, that we don't have to be beholden to the eastern companies to do this type of thing for us.

Now, indeed, we can start maybe selling this type of product to the east, because the prices have done quite well. In fact, 70-ton capacity chip cars will cost the BCR somewhat less than $30,000 apiece, as it says here, and bulkhead flats, which have less steel in them, should cost $27,000 each and possibly less. Bingham said that if steel prices remain stable, other costs can be controlled and outside orders won. The cars may be priced as low as $25,000, so the company appears to be competitive, in the opinion of the manager.

Since then, employment at the plant has built up to 200, and another 50 will be recruited by midsummer when Railwest should be completing four cars a day. You know, that's jobs. That's producing jobs in a very primary industry, and when you produce a job in an industry like this, the whole line of support for service stations and other services…. There's a ripple effect and, of course, there's a job multiplier, so we know when we talk about 200 jobs we are talking about closer to 2,000. The second order for the BCR should be filled by November and a further order from the parent railway seems likely.

In addition, Railwest could land a major contract from offshore as the company has gone selling in the Far East, South America and the Caribbean. So they are looking into the Far East, South America and the islands of the Caribbean. One possibility is that a South American country may place an order for knocked-down parts for railway vehicles. Under such an arrangement, Railwest would supply all the components and pre-cut steel for cars which would finish assembled in the purchase country. The sales opening may also develop in Mexico which, though largely self-sufficient in rolling stock, does need specialty cars from abroad. So here's the story. I am wondering if the minister, now that he has had the opportunity, as he says, to talk with Mr. Bingham — he's met with him; he's been through the plant, I think he said — have you had a change of heart, Mr. Minister? Do you believe now that some cars are being produced up there? Do you believe that jobs have been produced? Is the minister big enough…? Is he going to change his role from the unctuous…

Interjections.

MR. NICOLSON: …from the rodomontade stance that he's taken in the past? Is he going to embark upon a new career of statesmanship and be willing to admit that he's wrong when the evidence is out, when it's clear? Will he take a positive attitude and not try to dismantle everything that the NDP did? If he takes this positive attitude towards B.C. Rail, I am hopeful that he will take a positive attitude in other areas, other industries — like Swan Valley Foods.

I suppose he's visited, for instance, the entree plant which has produced many jobs in Richmond, because it's pretty close by, but I don't believe he's been up to Creston yet. Maybe after the session is

[ Page 1496 ]

over, next fall, you and I can go up to….

Mr. Chairman, when I say "you" I should say "he". I should use the third person. When I say "you," I should mean you, Mr. Chairman.

I would hope, Mr. Chairman, that the minister might accompany me. He was up in my riding once when he was a member of the Select Standing Committee on Agriculture. He expressed interest in the fledgling industry of Swan Valley Foods, which is an industry. It provides jobs.

MR. A.B. MACDONALD (Vancouver East): That's why you were re-elected. He helped you to be re-elected.

MR. NICOLSON: Well, I think that the Premier helped me to be re-elected more than the minister, but they all contributed, Mr. Chairman.

I would hope that the minister would come up to the riding and that I could accompany him. I guess I shouldn't be so presumptuous to say that he should accompany me, although I could maybe show him around a little bit and help him find his way out to Swan Valley Foods. We could look through and see what's happening there, look at some of the other industries in the riding and then go to Nelson and look at the industrial parkland which the city was starting to assemble before 1972 and on which it got encouragement from us. He could see the needs in the riding in terms of providing jobs, see the need for certain highway work to be done and see that commitments which were made under the Department of Highways be kept, because they are vital to providing an industrial site in a town like Nelson, which has certain amounts of property.

I would like the minister, under his ministerial estimate, to get up and reassure me he has had some change of heart, that he has confidence in the railcar plant in Squamish, that he's not going to be close-minded about things, and that he's going to become more statesmanlike.

I would hope that he would give a commitment to come up to Nelson-Creston and travel with me so that I could help familiarize him with some of the problems and some of the tremendous possibilities which lie in Nelson-Creston. Most of all he will have to show courage and imagination, but I am sure that when he sees the tremendous things that we have been able to accomplish — the turnaround of Kootenay Forest Products, for instance, the kind of people that are there, the experience, the expertise and the way in which they can contribute….

He mentioned the Department of Human Resources. We have a lot of people who want jobs. I'm talking about women as well as men, Mr. Chairman, who want jobs and who have to rely on the Department of Human Resources for a livelihood.

If the minister would give an undertaking to come up to Nelson-Creston with me and we could thoroughly travel through and meet with the various councils, the industrial development commissions and so on, and go through the plants, then perhaps we can cooperate together as I cooperated with the present Minister of Municipal Affairs (Hon. Mr. Curtis). He invited me to go out to his riding in Saanich. We toured through and we looked at housing opportunities. I think that is the kind of spirit that should prevail.

If he wants an undertaking from me, I promise that if he comes to my riding, Mr. Chairman, I will go up to South Peace. I will go to Dawson Creek and Rolla and Pouce and Kilcairne and Tornslake and Chetwynd. I'll travel up there with the minister, too. I will tell the people that he is not all bad, that he came to Nelson-Creston and that he is interested in Nelson-Creston.

Mr. Chairman, I'll sit down now and I will eagerly await the words of the Minister of Economic Development. What I'd like to hear are some of your impressions of the B.C. railcar plant, Mr. Minister, and your interests in some of the economic enterprises in Nelson-Creston and the potentiality.

HON. MR. PHILLIPS: Mr. Chairman, I want to stand in the House and say I made an error.

MR. MACDONALD: Repent! Repent!

HON. MR. PHILLIPS: Yes, repent, repent! I made an error. I thought when that member for Nelson-Creston stood up that he was going to ask intelligent questions instead of making mistakes. Now I did made an error — an error in judgment.

MR. NICOLSON: All seriousness aside.

HON. MR. PHILLIPS: Yes, all seriousness aside. I was very interested indeed, Mr. Chairman, in the member's remarks about the Railwest car plant, that great plant that was started by that previous administration and brought to fruition and finished and given credit.

But the thing that bothered me about that plant, Mr. Chairman, is this: they had the opportunity and good case to go to Ottawa and get some of those dollars that I was talking about about a half-hour ago, because Ottawa has those dollars available and by…. Yes, just take a look through your DREE book and see some of the plants elsewhere in Quebec and Ontario that are subsidized. Oh, yes, my friend, you look at it. Now they had the opportunity. As a matter of fact, Ottawa dollars have gone recently to help finance steel plants in England. So I'm sure we would have a tremendous case.

But by not taking advantage and by not doing that, Mr. Chairman, they have cast over that Railwest

[ Page 1497 ]

car plant a problem, because that car plant was built with inflated dollars and recent costs. They're going to have trouble competing with those plants that were established years ago and have written their plant costs off. Because as we determine the costs of those railcars, we have to take into consideration interest. We have to take into consideration the full capitalization of the plant. We have to take into consideration….

MR. LAUK: Write it off.

HON. MR. PHILLIPS: Oh, you're telling me to write it off. I'm glad you said that, because I just…. Yes, yes, I remember the ex-Minister of Economic Development said to write it off and forget about it and don't take it into consideration, because that's exactly what we might have to do, Mr. Chairman.

MR. LAUK: That would be irresponsible.

HON. MR. PHILLIPS: No, it wouldn't be. If we're going to get that car plant functioning…. I want to tell you, Mr. Chairman, it's like a lot of other things the NDP did. You know, they got the car plant functioning, but who's going to use the cars? Mr. Chairman, if we don't go in the market and if we don't find sales for those cars, we may have to close the plant down. As I say, we're faced with the problem of the high costs, depreciation on the plant, the high interest rates. We may just have to, for a while, in determining the cost of those cars, forget about the interest rate and forget about writing off until we get the thing rolling. Because it's going to be a case…. I don't want to hear them standing in this House and saying that we subsidized railcars for some other railway, because in essence we won't be subsidizing. But we're going to have to take a real solid look, and in order to get the plant going and in order to keep it going, we just may have to take a look at the cost of producing those cars. Now it's about $30,000 per car, depending on the car — yes, $30,000 per car.

MR. LAUK: What have you been doing in the last quarter?

HON. MR. PHILLIPS: I mean, $3,000 per car, I'm sorry, and we may just have to bring that price down to $2,500 to compete.

But I'm glad that the opposition has taken that realistic view, and I give them credit for having some business sense. So if we do have to put out some bids where maybe we don't take into consideration all of the built-in costs like depreciation and interest, and start-up cost and so forth, I know they'll be understanding, because that's about the only thing they ever did that they completed. I know that they want it to be a jewel that they can look back on and say: "We built that great plant and we brought it into production, and look at the services provided."

MR. LAUK: We'll be back in office.

HON. MR. PHILLIPS: Well, the plant will be…. By the time you're back in office the plant will have run its day, and it will probably be crumbling and we'll have to build a new one.

MR. G.R. LEA (Prince Rupert): Two years.

MR. LAUK: Mr. Chairman, briefly about the car plant, I think that it is appropriate to underbid initially, and the minister knows full well that I was a member of the board of directors that initiated that proposal.

[Mr. Schroeder in the chair.]

Now as far as Ottawa dollars are concerned, the minister knows full well…. I wish him well. If he can get money from Ottawa, then for heaven's sake let's get it. But you know, the government in Ottawa — we all know this — the government in Ottawa has a special place in its heart — I think it's because of 75 per cent of the seats in the country — for the Niagara peninsula and Quebec and Ontario. You know perfectly well that they'll pour money into railcar plants, to finance this and that and the other in central Canada, but to get the hard-earned pennies that we contribute to Ottawa…dollars and only get pennies back from Ottawa — you know the whole thing.

Interjection.

MR. LAUK: The minister says we didn't try. Mr. Chairman, that is absolutely incorrect. We tried to get money from Ottawa. We tried to bring up that imbalance of the payment of our taxes. Something like 11 per cent of the federal budget comes from British Columbia and, you know, we get 4 per cent back. It's another one of my press releases that you gave out a couple of months ago. I've been saying that on several occasions. You know as well as I that British Columbians are British Columbians and the facts are the facts.

Interjection.

MR. LAUK: No, I don't think we should rush these estimates through. I don't think we should rush these estimates through, Mr. Chairman. You know, I've been looking over the press clippings. I've been taking my magnifying glass. I've been trying to find out what is the new policy. Not our policy, not the

[ Page 1498 ]

policy we were bringing about; what's the new policy?

I saw this smiling face in a local magazine. It says: "From the Legislature: A Familiar Face Behind the Throne" — and in brackets, "though we don't recognize the voice." And here we have comments about the new Minister of Economic Development:

"In every cabinet there develops a power behind the throne, a minister who gradually takes on more responsibility than his ministry would normally dictate, whose department becomes the focus of a wide range of governmental activities — the power behind the Social Credit throne.

"It is becoming increasingly clear that the man who is going to fulfil the same role in Bill Bennett's cabinet is Don Phillips. Phillips will not retain both portfolios…"

Fascinating!

The minister has not commented on this, Mr. Chairman.

AN HON. MEMBER: Are you reading from your files?

MR. LAUK: It appeared in a relatively obscure publication of local origin — I hope the second member for Victoria (Mr. Barber) doesn't feel offended — but it was an interesting article. It was by Barbara McClintock of the Province newspaper — an astute journalist, not one who is easily deceived. She has inside information; she knows.

AN HON. MEMBER: What was in your basement?

MR. LAUK: What are you doing up so late, son? She knows that the Minister of Economic Development is the Cardinal Richelieu of this government, the éminence grise. (Laughter.)

He still hasn't commented. I want his comments. Does silence mean consent? Is he admitting that he's the man, the power?

MR. WALLACE: We decided that was the case with Rafe.

MR. LAUK: I'm glad you straightened that out.

MR. LEA: The power on the throne. (Laughter.)

MR. CHAIRMAN: Order, please.

MR. LAUK: Mr. Chairman, I think it would be appropriate for the hon. minister to comment on that because very serious political implications flow from that journalistic speculation — very serious indeed.

I think it's appropriate that there be…. Because people are people, and there are people with some talents and people with other talents, and so on. If the natural leader, the intellectual and strategic strength of the Bennett cabinet is going to be the Minister of Economic Development, the people of British Columbia should know that — so we could all pack our bags and run for the hills, because if he is the mindermasse behind the throne, we're in trouble. (Laughter.) For four months he's been whimpering about the files in my basement, reading old press releases of mine, not answering any questions and refusing to meet with agricultural groups. If that's the power behind the throne, we're in trouble — a whole lot of trouble right here in River City, Mr. Chairman. (Laughter.)

Interjections.

MR. LAUK: The only thing I could find was that comment that he was the power behind the throne, and now….

Interjection.

MR. LAUK: Would you stay out of my personal life?

Do you know, Mr. Chairman, the only comment, as I say, was Bob McMurray's article in the Province — "The Grand Industrial Strategy." And what does it say? Dateline Victoria, April 21, 1976:

"The Social Credit government is working on an industrial strategy for British Columbia, a document which would give some idea of the direction that is wanted for development." I would think the strategy is still in the study stage."

Interjections.

MR. CHAIRMAN: Proceed if you can, Hon. Member.

MR. LAUK: You know, the more things are changed, the more they stay the same, Mr. Chairman. (Laughter.)

Interjections.

MR. LAUK:

"The strategy is still in the study stage; could it be tied in with a plan to use B.C.'s resources, particularly forests and minerals" — that's very clever — "as trading bait for establishment of further secondary industry here?"

Now where have we heard that before?

MR. NICOLSON: Waldo Skillings.

[ Page 1499 ]

Interjection.

MR. LAUK: Retract that. That was out of a rather well-put-together press release of mine in 1973.

1 think it's apparent to everyone in British Columbia now how much that minister admires me, and the feeling is mutual. Any person who could quickly pick up on my strategy like that and understand it, especially the part about still being in the study stage, has got to be a good minister.

It goes on to say: "This would mean that B.C. would try to get resource customers to agree to buy secondary manufactured goods in return for being guaranteed a long-term supply of" — and then he says offhandedly — "coal." (Laughter.) My goodness, is that news! Hot off the presses! What did he think I was doing with NKK for three years — the Japanese trip, negotiations, the signing of the steel agreement? Every time I got a chance I used to jump in front of a TV camera and tell them this was because we were having a trade-off on the sale of our resources.

"Various cabinet committees and sections of the provincial civil service are working on the industrial strategy and related ideas. The cabinet has set up a new committee structured to expedite the work of planning.

" Some of the details were explained here during an interview with Economic Development minister Don Phillips; others were gained from other government sources. Phillips said he could not provide any information on industrial strategy because it's still being worked out. He said there were a number of major considerations in determining how B.C. should be developed in order to provide jobs and income. These include a need to slow down the growth…."

Here's another newsflash — are you ready for this?

"These include a need to diversify from resource production into further secondary manufacturing, and a need to remember environmental restraints."

Now haven't we heard that before someplace? Here we thought there was going to be a vast new direction, a change in policy — again, lifted entirely. Stolen! Stolen from one of my press releases — one of my speeches. I don't resent that. No, I retract "stolen." Liberally borrowed.

MR. WALLACE: The sincerest form of flattery.

MR. LAUK: I was flattered. "While he would not comment on the trading bait idea being a key part of the industrial strategies, neither would he deny that it was an integral part" — falling cleanly between two stools, as they say, Mr. Chairman.

"This philosophy" — Bob McMurray hastens to add, because you know he's been around — "was expressed by the former NDP administration." That's kind of an understatement.

Well, anyway, I don't want to pick on the minister. I think that he's doing a good job following the programmes that I set up.

SOME HON. MEMBERS: Aye! Aye!

MR. LAUK: There's a group of sailors over there, Mr. Chairman.

I think that he's doing an excellent job and I think that it's appropriate that he follow the industrial strategy of the NDP administration. It took us three years to start the major industrial strategy and planning for economic development in this province, after 20 years of ad hockery of a Premier of this province who had his accounts receivable in one pocket and his accounts payable in the other and his files in his hat, and nobody in cabinet knowing what on earth he had planned next.

MR. C. BARBER (Victoria): And remember Wenner-Gren.

MR. LAUK: Oh, yes. He did bring us Wenner-Gren — another famous chapter, another magnificent Social Credit industrial strategy.

The only thing that the former Social Credit administration relied upon was a yellowed copy — an old, dusty copy in the desk of the former Premier. Remember the old reconstruction committee report? He dug that our whenever a new election campaign rolled around. He'd look at that and he'd tell old Broadbent: "Well, we'll put a railway way up here and we'll put a sawmill there." It says right here in the report. Even that was dominated by CCF members, as I recall — the 1947 reconstruction committee report. It was a good one. Actually the good parts of economic development in this province have been monitored and guided by the wise and intelligent hand of the CCF-NDP for the past 25 years, starting with the reconstruction report, an all-party committee. When we took office, it then started to take off with the IPA studies, the joint studies between the federal and provincial governments. An increase in the staff in research and planning in economic development and a joint cooperation between all departments made the tremendous inroads that now this minister — and I'm glad he can — can take advantage of for the benefit of all the people of this province.

Another part of this article is interesting as well. The minister revealed, still playing his cards close to his vest that there will be a coal development in the northeast. He said: "While the policy has yet to be developed on how much coal royalties we need now — they're now $1.50 a ton — the government is considering a user fee to be paid by mining companies to pay for

[ Page 1500 ]

townsites and their amenities that would be established by the government" — another news flash. Well, I think that just to set the record straight, Mr. Chairman, I'll read liberally from the press release that the minister read liberally from when he was talking to Bob McMurray. It's a press release under my name as the Minister of Economic Development, as I then was.

"There has been a great deal of speculation," I said in this press release….

"There's been a great deal of speculation in recent weeks…."

Well, then resign, Mr. Member.

Interjections.

MR. LAUK:

"…in recent weeks about prospective multi-million dollar projects in the northeast. It is time the air was cleared and the whole development viewed in its proper perspective. Lauk explained that he had just come from a meeting with the Peace River representatives and that such meetings were part of his government's commitment to continually work with the people most directly affected during all phases of major developments in the province. I presented him with an up-to-date progress report of our activities and explained in detail the intentions of this government and the mining companies. All these developments are in line with the alternatives that were first outlined in the northeast report, 1975, and then reviewed by the representatives from the region, the mining companies and the government agencies involved.

"The statement of overall intention that I make today on behalf of the government is our response to these suggestions and comments, and represents our firm commitment that the resources of this province will be developed in an orderly and responsible manner, consistent with our economic needs and the concerns of the people most directly affected."

Sound familiar, Mr. Minister?

"The development and their status at this time are listed below: Coalition Mining Company is completing preliminary feasibility studies on their Sukunka property 38 miles south of Chetwynd on the Sukunka River. We have commitments from the company that these will lead to engineering and feasibility studies which will be carried out in cooperation with the government.

"The company is currently contemplating a phase one mine development, producing 750,000 tons per year of coal by 1979-80 and employing 350 to 400 people. Construction for the mine site, coal-washing plant, access road and other facilities could begin in 1976-77 and employ up to 400 people.

"Quintette Coal Ltd., of which Denison Mines are the major shareholders, has agreed to proceed to detailed feasibility and engineering studies of its properties, again in full cooperation with the government. Completion of this study is expected by December, 1976, at which time a final decision concerning the timing of production will be made. In the detailed engineering and feasibility…."

Interjections.

MR. LAUK: I think I've lost my place. I'll go to the beginning again, Mr. Chairman.

Interjections.

MR. LAUK:

"Quintette Coal" — as I say — "if the detailed engineering and feasibility studies verify preliminary findings, production could commence in late 1979 with an eventual output of five million tons of clean coal annually. B.C. Rail is committed to constructing a rail line."

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 10:59 p.m.