[ Page 2675 ]

CONTENTS

Routine proceedings

Miscellaneous Statements Amendment Act, 1976 (Bill 78) Hon. Mr. Gardom.

Introduction and first reading — 2675

Oral questions

Resistance to ferry fare increases. Mr. Lea — 2675

Fraud charges against BCR. Hon. Mr. Phillips answers — 2676

Designation of Jericho Hill School site. Mr. Gibson — 2677

Gasoline price increase at self-service stations. Mr. Macdonald — 2677

Mine closings. Mr. Lauk — 2678

Committee of Supply: Department of Mines and Petroleum Resources estimates.

On vote 130. Hon. Mr. Waterland — 2680

Mr. Skelly — 2678 Mr. Chabot — 2680

Hon. Mr. Waterland — 2679 Mr. Lauk — 2681

Mr. Lea — 2679 Mr. Bawtree — 2683

Introduction

Mr. Joe Clark presented to House. Hon. Mr. Bennett — 2683

Mr. Wallace — 2684

Mr. Barrett — 2684

Mr. Gibson — 2684

Routine proceedings

Committee of Supply: Department of Mines and Petroleum Resources estimates.

On vote 130. Mr. Barrett — 2706

Mr. Bawtree — 2684 Mr. Chabot — 2706

Mr. Skelly — 2685 Mr. Lauk — 2706

Mr. Barber — 2688 Mr. Barrett — 2707

Mr. Rogers — 2690 Hon. Mr. Waterland — 2707

Mr. Gibson — 2690 Mr. Barrett — 2707

Mrs. Wallace — 2692 Point of order.

Mr. Skelly — 2693 Mr. Bawlf — 2708

Hon. Mr. Waterland — 2693 Mr. Gibson — 2709

Mr. Lauk — 2697 Mr. Chairman — 2709

Point of order. Mr. Bawlf — 2709

Mr. King — 2700 On vote 130.

Mr. Bawlf — 2700 Mr. Lauk — 2709

Mr. Chairman — 2700 Hon. Mr. Waterland — 2709

Mr. Haddad — 2701 Mr. Lauk — 2709

Mr. Hewitt — 2701 Mr. Gibson — 2710

On vote 130. Mr. King — 2711

Mr. Lauk — 2701 Mr. Lauk — 2711

Hon. Mr. Waterland 2703 Motion to reduce minister's salary.

Mr. Lauk — 2704 Mr. Lauk — 2712

Hon. Mr. Waterland — 2705 Mr. Barrett — 2712

Mr. Barrett — 2705 Hon. Mr. Waterland — 2712

Mr. Lauk — 2705 Mr. Barrett — 2713

Statement

Details of First Minister's Conference. Hon. Mr. Bennett — 2713

Mr. Barrett — 2716

Mr. Gibson — 2717

Mr. Wallace — 2718

Appendix — 2718

The House sat at 2 p.m.

Prayers.

HON. W.R. BENNETT (Premier): Mr. Speaker, I'd like to welcome back to the press gallery a member of the gallery who is the winner of the Louis St. Laurent fellowship in journalism, and is back after a year's absence at Queens University. I'd like the House to welcome back Candide Temple.

MR. G. HADDAD (Kootenay): Mr. Speaker, from the great constituency of Kootenay, up in the gallery I have Mr. Mel Wooley, manager of the Kimberley Chamber of Commerce. Would you please welcome him here today?

MR. G. MUSSALLEM (Dewdney): Mr. Speaker, I wish to address you, sir, and say that seated on the floor of the House today is a former member of this House who sat with us in this northwest corner and anchor of the House some years ago, and who by purest accident was defeated in the provincial election in 1972, who subsequently resisted with all his might but was forced to take the nomination for Fraser Valley West and was elected to the House of Parliament. He says what he misses most is the decorum we had here, the thrust and brilliance of debate, but nevertheless he is in Ottawa. I ask you to welcome Mr. Bob Wenman, MP.

MR. G.H. KERSTER (Coquitlam): Mr. Speaker, in the House today, at approximately 3 o'clock this afternoon, there'll be a group of students from Mary Hill Secondary School in Port Coquitlam. They'll be accompanied by their teacher, Mrs. C. Cuthbertson. Would the House join me in advance of their arrival in making them welcome?

HON. H.A. CURTIS (Minister of Municipal Affairs): Mr. Speaker, three constituents of mine are in the members' gallery today. One is the wife of the distinguished and very highly regarded Chief of Hansard, Mr. Chazottes — I refer to Mrs. Daphne Chazottes — and two friends of the Chazottes', Mr. and Mrs. Christopherson.

I should point out for Hansard the spelling of Chazottes is C-h-a-z-o-t-t-e-s. (Laughter.)

MR. L.B. KAHL (Esquimalt): Mr. Speaker, seated in the gallery this afternoon is my most capable constituency secretary, Mr. Frank Vinson. I would ask the House to make him welcome, please.

Introduction of bills.

MISCELLANEOUS STATUTES
AMENDMENT ACT, 1976

Hon. Mr. Williams, on behalf of Hon. Mr. Gardom, presents a message from His Honour the Lieutenant-Governor: a bill intituled Miscellaneous Statutes Amendment Act, 1976.

Bill 78 introduced, read a last time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

HON. MR. BENNETT: Mr. Speaker, I'd just like to advise the House that I will be asking leave to make a statement on the recent federal-provincial conference in approximately half an hour. Because of some of the technical nature of my remarks it's still being typed, and I hope the House will allow me that privilege then.

Oral questions.

RESISTANCE TO
FERRY FARE INCREASES

MR. G.R. LEA (Prince Rupert): Mr. Speaker, a question to the hon. Minister of Transport. Last Tuesday, at the Canadian Transportation and Research Forum, Dr. William Hughes, research director of the B.C. Department of Transport, said that public resistance to the recent fare increases by B.C. Ferries is much greater than was expected. He said the people are staying away from the ferries in droves. He said he is studying the possible economic advantages of providing free service for foot passengers on B.C. ferries. Last week the minister repeatedly assured the House that publicity regarding a possible strike and not the government's massive ferry rate increases was responsible for the sharp decrease in ferry traffic.

Because of that answer I would like to go on to ask the minister so people might understand some facts instead of excuses.... Would the minister tell this House now how many vehicles and passengers were carried on the major routes during the first half of this month and also the comparative figures for June 1 to 15 last year, and would the minister also inform us of the corresponding revenues to the ferries in those two 15-day periods?

HON. J. DAVIS (Minister of Transport and Communications): Mr. Speaker, I'd be glad to take that question involving details as notice.

MR. LEA: Mr. Speaker, I appreciate the minister taking the part for the details on notice, but I would like him to comment, if he would, on the apparent discrepancy between the minister's statement last

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week and what one of the directors of his research branch said this week.

MR. SPEAKER: I think you heard the minister take the question as notice.

MR. LEA: Mr. Speaker, I think the minister was prepared to answer, and this should be a question-and-answer period, not a Speaker period.

MR. SPEAKER: Order, please!

FRAUD CHARGES AGAINST BCR

HON. D.M. PHILLIPS (Minister of Economic Development): Mr. Speaker, I am pleased to respond on behalf of the Attorney-General (Hon. Mr. Gardom) to the question asked yesterday by the Leader of the Opposition (Mr. Barrett) with respect to the court proceedings between M.E.L. Paving and the British Columbia Railway.

To begin with I should point out to the Leader of the Opposition that I am advised the matter is not one involving the Department of the Attorney-General. As I would have thought the hon. member knows, the action is against a Crown corporation, the B.C. Railway, which in its own right has engaged its own counsel, Mr. Harvey Grey,  and Charles Maclean.

Nevertheless, in answer to the question of the Leader of the Opposition, I am advised that the case was adjourned on action initiated by the plaintiff, M, E.L. Paving. When counsel for M.E.L., Allan McEachern, amended his statement of claim by making further claims against the railway, solicitors for the British Columbia Railway were ready to proceed on May 15 as was previously scheduled. The amendments, I understand, have resulted in the need for railway engineers to commence further studies which are now underway so a proper defence of the new claim can be prepared. As a result, both parties asked the judge for an adjournment to a later date in October.

Mr. Speaker, as this matter is before the courts and therefore in the hands of the solicitors, it would be improper for me or anyone in this House to comment further as to those proceedings, save to say that due process is being followed and that the case shall be heard in the fall.

MR. D. BARRETT (Leader of the Opposition): Mr. Speaker, may I then interpret the minister's answer by way of a statement that it is not the intention of the Crown agency, nor have they received any instruction, to settle out of court?

HON. MR. PHILLIPS: Not to my knowledge.

MR. BARRETT: Would the minister then answer he question as to why Clarkson Gordon was instructed to set aside $12.5 million in their report on instruction from the government for settlement for contingent liabilities of the railroad, unknown other than perhaps for that court case?

HON. MR. PHILLIPS: Mr. Speaker, maybe the Leader of the Opposition is not aware that the railway is being run now by the management of the railway; and if this was the case, this was a decision of the management of the railway and not a political decision.

MR. BARRETT: I want to thank the minister. A further supplementary: I want to ask that the advice of the 1976 auditors of the B.C. Railway...legal counsel has been advised that the railway should be successful in defending itself in the fraud and conspiracy case launched by M.E.L. Can the minister assure this House, since this is the report you tabled, and I quote from that report, that the railway, even though having set aside the money, will not settle the case outside of court?

HON. MR. PHILLIPS: Again, as I stated, Clarkson Gordon is working for the management of the railway. Certainly if they've taken any instructions, they have taken them from the management of the railway. I say again that the railway is now being run by the management of the railway and not being run out of Victoria, as was the case for the last three and a half years. Maybe it's difficult, Mr. Speaker, for the ex-president of the railway to understand this.

MR. BARRETT: The minister is incorrect in saying that Clarkson Gordon prepared the railway's annual report.

MR. SPEAKER: What is your question, Hon. Member?

MR. BARRETT: I am referring to B.C. Rail's annual report and the conflicting statements between Clarkson Gordon's statement and B.C. Rail's statement.

MR. SPEAKER: What is your question?

MR. BARRETT: I ask the minister: who is the auditing firm for B.C. Rail?

HON. MR. PHILLIPS: Mr. Speaker, the auditors for the railway are a matter of public record.

AN HON. MEMBER: Oh, oh!

MR. BARRETT: On a supplementary question,

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the minister stated today that Clarkson Gordon is the auditor for B.C. Rail. I want to know when that appointment was made.

HON. MR. PHILLIPS: Maybe the Leader of the Opposition misunderstood me. I said the auditors of the railway are a matter of public record.

MR. BARRETT: I ask the minister then to correct the statement. Is the auditing firm for B.C. Rail now Clarkson Gordon?

HON. MR. PHILLIPS: As I stated before, Mr. Speaker, the matter of the auditors for the B.C. Rail is a matter of public record.

MR. KING: You don't know!

AN HON. MEMBER: He doesn't even know who the auditors are!

DESIGNATION OF JERICHO
HILL SCHOOL SITE

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, I have a question for the Minister of Education. I would like to ask the minister about order-in-council 1669, passed on May 27 of this year, which had the effect of changing the designation of the property on which Jericho Hill School is situated. It was changed from being a school specifically for the deaf and blind to merely a general designation of the site for educational facilities. I would ask the minister what the reason is for this change. What will the other facilities consist of? Who will operate them?

HON. P.L. McGEER (Minister of Education): Mr. Speaker, the change in designation for the Jericho Hill School property is related to the fact that there are currently on the Jericho Hill School campus five surplus buildings which were built out of public funds and which are not currently being used. It's the desire of the government and the Department of Education that the facilities at Jericho be put to the best possible use for the people of British Columbia within the educational sphere. It will be a matter of government policy as to how best to use these surplus facilities as time develops. There will be announcements made in the future.

MR. GIBSON: On a supplementary question, an article in The Vancouver Sun on June 8 with respect to Jericho Hill School mentions that Mr. John Anderson has been given the job of determining which children presently at the school could benefit from being put into community classes. It quotes Mr. Anderson as saying: "We're working now to see that the kids get the best service possible within the minister's policy." Will the minister inform the House the terms of reference given to Mr. Anderson's committee?

HON. MR. McGEER: Mr. Speaker, I'll have to take that question as notice. I have given the gentleman no specific terms of reference but I would be happy to provide that to the House.

MR. GIBSON: Just one final supplementary: was Mr. Anderson given a maximum number of beds or positions that would remain open for deaf children on the Jericho Hill campus?

HON. MR. McGEER: No, Mr. Speaker. It will be there to satisfy the needs of communicatively impaired British Columbians. It's been that way in the past and it will continue to be that way in the future.

GASOLINE PRICE INCREASES
AT SELF-SERVICE STATIONS

MR. A.B. MACDONALD (Vancouver East): Mr. Speaker, I would like to ask the Premier a question in view of the fact that the self-serve stations in the Victoria area have increased the price of gasoline to consumers by 2 cents a gallon. Of course, they are company-operated and that would be an evasion of the refinery gate freeze that the Premier talks about. Will he therefore take immediate action to see that the Energy Commission orders that the 2-cent increase be rolled back?

HON. MR. BENNETT: If I understand the former Attorney-General and the first member for Vancouver East, he asked a question concerning retail gas stations which are not covered under the freeze at the refineries level. We recently passed legislation, which that member voted against, giving the government the power to freeze prices on the retail level or any prices in British Columbia that weren't covered under the Energy Act. The Minister of Consumer Services (Hon. Mr. Mair) has this under review.

MR. MACDONALD: On a supplementary question, I am asking the Premier if he does not recognize that when the big oil companies, through their own self-serve stations that they operate themselves, maintain the freeze at the refinery gate and increase the price to the consumer at the self-serve station, they are deliberately evading and bypassing the freeze. There is power now under the Energy Commission Act — the other one hasn't come up — to order rollbacks.

HON. MR. BENNETT: Mr. Speaker, I might advise

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the first member for Vancouver East that the advice we had from the energy board originally was that the high competitive factor at the retail level governing all gas stations had kept British Columbia gas prices down at a time when they were accelerating elsewhere. That was the reason the advice of the energy board was taken in maintaining the freeze at the refinery level but freeing up the area where there was a competitive factor to keep competition working.

MR. MACDONALD: Final supplementary. Do I take it that the Premier will not do anything through the Energy Commission or through his office to see that this price increase is rolled back in the self-serve stations?

AN HON. MEMBER: By the oil companies themselves.

MR. MACDONALD: Is that what you're telling me? That you won't do anything?

MR. SPEAKER: Order, please!

AN HON. MEMBER: They're not going to do anything. They're going to let them make the profit.

MR. MACDONALD: Inflation and evasion.

AN HON. MEMBER: Ripoff.

MINE CLOSINGS

MR. G.V. LAUK (Vancouver Centre): A question to the hon. Premier. Yesterday, Mr. Speaker, I asked the Minister of Economic Development (Hon. Mr. Phillips) about Doman Industries curtailing their operations in Ladysmith and Nanoose Bay, with the loss of many jobs, Today I have been notified that Coalition Mining Ltd. has closed down, and that as of Saturday, June 12, 1976, over 40 men were laid off.

MR. BARRETT: Driving the mining industry out of British Columbia.

MR. LAUK: Mr. Speaker, in view of the fact that the hon. Premier and others in his cabinet have made several announcements with respect to the industrial strategy of the north involving coal, is this in keeping with that strategy?

MR. BARRETT: Close down the mines under the Socreds.

HON. MR. BENNETT: Mr. Speaker, I'm not aware of the announcement. As he knows, I was in Ottawa, but I'll take the part of your question under advisement as to what we can do to further deal with facilities that are laying off employees, because we are as concerned about it as is this whole Legislature.

Secondly, Mr. Speaker, it took the member for Prince Rupert (Mr. Lea) and his cohorts three years to slow it down; surely he will allow us more than five months to get it moving again.

MR. LAUK: Supplementary, Mr. Speaker.

MR. SPEAKER: Unfortunately, Hon. Member, the bell, which does not seem to be working properly at the moment, was just rung by the hon. lady Clerk,

MR. LAUK: I have no objection, Mr. Speaker.

As a supplementary to the hon. Premier....

MR. SPEAKER: Order, please! The question period was terminated by the bell.

HON. MR. DAVIS: Mr. Speaker, if, I could, I'd like to table two answers to oral questions which are rather lengthy. One question relates to prices charged to senior citizens using buses travelling on B.C. Ferries. It was asked by the first member for Vancouver East (Mr. Macdonald) . The second is a reply to the member for Oak Bay (Mr. Wallace) about food services on the ferries.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF
MINES AND PETROLEUM RESOURCES
(continued)

On vote 140: minister's office, $80,964 — continued.

HON. G.M. McCARTHY (Provincial Secretary): Mr. Chairman, by agreement of the Whips, the Minister's office of the Department of Forests is being discussed under this vote.

MR. R.E. SKELLY (Alberni): Mr. Chairman, just before we closed on the minister's office vote, I believe it was on Thursday night, he was prepared to stand up and answer some of the questions that were asked of him at that time. I wonder if the minister is prepared to answer those questions at this time. It was just after his question: "What are they doing to my estimates?"

I'd like to ask a question relating to the forest development roads programme. I understand that this is one of those budgets that has been cut this year under the forestry vote. From $7.6 million last year,

[ Page 2679 ]

this year it's down to $4.6 million, which is a $3 million cut. In view of the fact that forest development roads provides the only access to the north Island communities, particularly Tahsis and Zeballos, I'm wondering how much of this budget has been allocated to such roads as the Head Bay road, the Nimpkish Valley road and the Zeballos road in that area.

I'm also wondering if the minister plans to continue the Roscoe Bay road between Ocean Falls and Roscoe Bay and what other roads will receive capital development and maintenance under this section of his budget.

HON. T.M. WATERLAND (Minister of Mines): Mr. Chairman, I think that perhaps detailed questions like this would better be asked during the actual vote on roads for the Forest Service.

However, regarding the logging roads which service communities primarily on the Island, discussions are now being held with the Department of Highways in which certain funds hopefully will be provided to the Forest Service so the Forest Service can actually do the maintenance work, some funds coming from the Highways department for that.

The Roscoe Bay road, as you know, was suspended last fall at the point when a bridge was required. We had no plans for continuing that road during this current fiscal year.

MR. SKELLY: The problem, Mr. Chairman, is that the Highways capital budget has been cut back significantly this year. Also the Highways maintenance budget hasn't been increased enough to account for increased costs, and I'm sure the Highways minister (Hon. Mr. Fraser) will agree with that.

In view of that fact, I'm wondering how the Forest Service, because their forest development road budget has been cut back by some $3 million, plan to maintain access to communities on north Vancouver Island, and particularly in my riding to Tahsis and Zeballos.

If the Highways budget has been cut back, capital and maintenance, and if the forest development road budget has been cut back by some $3 million — cut in half, in fact — how is the minister going to assure access to these communities during the balance of this fiscal year? What's going to happen to winter maintenance on the Nimpkish Valley road, on the Zeballos access road and on the Head Bay road, which gives access to Tahsis from Gold River?

I'm also wondering, since the tenders that were supposed to go to contract this year on the Sayward to Woss Camp section of the north Island Highway.... That's a highway that's been promised since 1956 by the Social Credit government. You'll recall that when Dan Campbell, the present minister of intergovernmental affairs, was first elected for Comox he promised to build the north Island highway within two years.

MS. K.E. SANFORD (Comox): Gaglardi did too.

MR. SKELLY: Oh, Gaglardi did too, but we never believed his promises. (Laughter.)

But the member for Comox at that time promised to build it within a few years — within that term, after 1956 — and the NDP kept that promise. Something like 16 years after the Socreds had made it, we began work on the north Island highway and we did put money — maintenance funds — into that road. I'm just wondering if the minister will assure us that there will be access guaranteed to the north Island communities and to Tahsis, Zeballos and other communities over the Nimpkish Valley road in this fiscal year.

HON. MR. WATERLAND: Mr. Chairman, I think the member for Alberni is somewhat confused. The Sayward-Woss Camp highway is a Highways project; it's not being built by the Forest Service. Perhaps he could raise that same question during the Highways estimates.

As far as the maintenance of the roads....

Interjection.

HON, MR. WATERLAND: My apologies; when the actual roads are being used for logging, then the users maintain the roads. As for those roads which are not going to be actively used for logging, there is provision in the Forest Service budget for maintenance of the roads, although we are cutting back substantially on road development as such.

MR. G.R. LEA (Prince Rupert): Mr. Chairman, a question to the minister, and the question has been asked in part by the hon. member for Port Alberni in a previous session of the estimates.

I would like to know whether there has been any communication, oral or written, between any of these people: Twin River Timber, Canadian Cellulose, B.C. Cellulose, MacMillan Bloedel, or any other forest company, in the question of share transfers, management contracts, whether or not any member of cabinet, any civil servant, any employee of any Crown Corporation or any person or agency representing either government or a Crown agency, has had talks with MacMillan Bloedel or any other forest company in terms of a transfer of shares between either B.C. Cellulose, Canadian Cellulose, MacMillan Bloedel or any forest company.

I think the minister can grasp the question. I want to know whether there is any discussion whatsoever, any correspondence whatsoever, about transferring of

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shares from any of the Crown corporations, B.C. Cellulose and Canadian Cellulose — Canadian Cellulose, of course, not being a Crown corporation, but that one also — about management contracts, and sellout whatsoever. Transfer of shares, management contracts — I want to know the complete story on that.

HON. MR. WATERLAND: Mr. Chairman, in answer to the question from the member for Prince Rupert, only one completely unrealistic offer for the purchase of Ocean Falls has come to me. It was such an offer that it could not be considered in any seriousness whatsoever. As far as I know, no such offers have been made; they have not come across my desk. Early in our tenure of office there were suggestions, overtures made to various ministers of this government suggesting possible arrangements for the disposal of the assets the Crown has in these forestry-based companies. But none of them were considered; none of them came to anything except a verbal inquiry.

Now there may have been talks between Can-Cel and other Crown-based corporations, but none of these things have come to my attention as long as I have been the Minister of Forests.

MR. LEA: Mr. Chairman, and also management contracts — in other words, that MacMillan Bloedel would be hired as management for Canadian Cellulose, Twin Rivers Timber or B.C. Cellulose.

HON. MR. WATERLAND: Mr. Chairman, so far as I know, no such contacts, communications or suggestions have been made. They have certainly not been made to this minister.

MR. LEA: One more question, Mr. Chairman, just to nail this down: would the minister be aware of any talks of an official nature that may have gone on?

Interjection.

MR. LEA: Okay. The minister says that he's not aware of any talks. If talks had gone on, would you be aware of them? Is it possible that talks could have gone on by either one of your colleagues or someone else around the items I have mentioned? Is it possible? Has the Premier talked to anybody?

Interjection.

MR. LEA: So you're not completely denying the fact.

HON. MR. WATERLAND: Could I answer your question, Mr. Member, by saying that so far as I know no such talks have taken place? We could speculate on the possible/impossible forever, but it would mean nothing.

MR. J.R. CHABOT (Columbia River): Mr. Chairman, I think everyone in British Columbia fully recognizes that the forest industry plays a dominant part in our economy, that it contributes 50 per cent of all the income in this province. I want to say at the outset, before I make my remarks, that I am a strong supporter of parks in the province of British Columbia. Nevertheless, I have to recognize the fact that we are facing a very serious situation within the constituency of Columbia River because in the last three and a half years that government over there hasn't been particularly concerned about jobs in the forest industry or any other industry in this province.

SOME HON. MEMBERS: Hear, hear!

MR. CHABOT: That former government, which mouthed platitudes about multiple use, has committed considerable land in my constituency to a single-use concept. That pertains to the establishment of the Purcell Wilderness Conservancy, which is 119,000 acres in size, the establishment of the Top of the World Park and the expansion of the Mt. Assiniboine Park extension.

Those people over there applaud because apparently they're not happy with people working, because the establishment of these parks and these wilderness conservancies in my constituency means people are facing unemployment. That group over there has the gall to applaud that kind of action. They bring to mind the kind of statement — I won't use the kind of derogatory words that were used by the minister when I picked up the map outlining the Purcell Wilderness Conservancy — in which he said that the next wilderness conservancy will be established in the vicinity of Golden at the expense of jobs for my constituents.

MR, LEA: He didn't say that.

MR. CHABOT: No? I'm not going to repeat because the....

MR. LEA: He didn't say so.

MR. CHABOT: He said that the next wilderness conservancy would be established in the Golden are "in the "g--- d----" Golden area; that's what he said.

Interjection.

MR. CHABOT: That's what he said!

MR. CHAIRMAN: Order, please!

[ Page 2681 ]

MR. CHABOT: The forest industry in my constituency, now that it has locked in 222,000 acres into a single-use concept, into wilderness conservancies and parks in a constituency that has more natural parks and provincial parks per capita than anywhere else in the world.... We have in my....

Interjection.

MR. CHABOT: Well, there's the member for Know-it-all-for Cowichan (Mrs. Wallace). (Laughter.) She doesn't recognize that in my constituency there are seven million acres of national parks — Yoho National Park, Glacier National Park and Kootenay National Park — seven million acres. Now we have also the massive Bugaboo class A park, we have the Hamber provincial class A park, and we have the Assiniboine class A park; we don't want any more parks.

SOME HON. MEMBERS: Oh, oh!

MR. CHABOT: We have found that the establishment of these parks.... With the expansion of parks and wilderness conservancies in the last three years we find there has been locked in 407 million cubic feet of timber.

Interjection.

MR. CHABOT: Yes, 407 million cubic feet of timber. Along with the denial of access to an additional 50 million cubit feet which is not available, 457 million cubic feet of timber has been locked into parks.

The second member for Victoria (Mr. Barber) laughs about this, but he doesn't recognize the fact that we're told in the House by the former Minister of Lands, Forests and Water Resources (Mr. R.A. Williams) that the timber operators, the small operators, in my constituency face a cutback in allowable cut of at least 25 to 30 per cent, which means jobs in my constituency.

Now we're facing a further intrusion into the forest economy within my constituency with the proposal that is presently being put forward for the establishment of the Palliser wilderness area. The Palliser wilderness area comprises approximately 100,000 acres of area in my constituency. If this area — along with the other intrusion, the other establishment of single-use concepts to the detriment of jobs in my constituency — is established, I assure you that you can look forward to much more unemployment in my constituency.

I want to ask the minister what his attitude is toward the serious situation which exists in my constituency, and whether he's going to tolerate the kind of situation we are facing in my constituency where jobs are at stake when British Columbians have never faced such a high degree of unemployment. And the member for Victoria applauds the unemployment; he's happy about unemployment in British Columbia, and he's suggesting there should be more unemployment in my constituency. All I want to say is that in my area there are more parks than anywhere else in British Columbia or in the world, We don't need any more! What we want is jobs! We want jobs in the forest industry; we want jobs in the mining industry; we want jobs in the recreational industry. We want to make a living in my constituency.

MR. G.V. LAUK (Vancouver Centre): Well, Mr. Chairman, the minister nodded to me to answer, so I'll answer on behalf of the minister. (Laughter.)

Mr. Chairman, the unemployment in the constituency of Columbia River hasn't been caused by parkland. I know the hon. member has spoken against parkland year after year; he's against parkland.

MR. CHABOT: That's not true.

MR. LAUK: He's against preserving the wilderness. He's against preserving this corner of the earth from the massive pollution and destruction caused by the major development firms. He's against that.

The unemployment rate in Columbia River has been caused by the very questions that have been raised in this House by the opposition members, Mr. Chairman. He hasn't been listening. Where was he? We just stated that the loss of jobs in Columbia River was caused by the 7 per cent sales tax — everybody's going to Calgary. The member himself went to Calgary to buy a suit because he knows that 7 per cent sales tax doesn't exist in Alberta.

It's the regressive-taxation members that have oppressed the economy of this province, and it's that government over there that has caused the loss of jobs in his constituency. He's raising a smokescreen in this legislation chamber today; he's trying to get something in Hansard for the good people of Columbia River. Well, they're not going to believe it, because they know the truth: it's the regressive, backward, steel-boot legislation of the government over there that has caused the highest unemployment rate in the history of this province. And for him to raise parkland as an excuse for the good people of that constituency who are walking the streets without an income is a sham and a fraud. He should resign his seat in this Legislature for trying to raise a smokescreen. What a disgraceful performance, Mr. Chairman. Absolutely disgraceful!

Doman Industries...a member of the British Columbia Development Corp., a man who has been

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long since known as a member of the Social Credit League, and now the coalition party, has closed down his plants in Ladysmith and Nanoose, laying off several dozen people — more families unemployed. Coalition mining, because of the neglect of this government, has closed down another 40 people. We now have 115,000 people unemployed in this province. Why? In June, in the summer months, when everybody should be employed, we have the highest unemployment rate in British Columbia.

AN HON. MEMBER: Hear, hear!

MR. LAUK: Need I say more about those facetious comments of the hon. member for Columbia River?

MR, CHAIRMAN: Now to vote 130, please.

Interjections,

MR. LAUK: With respect to the Minister of Forests, who, I'm sure agrees with everything I've said — I've spoken on his behalf in answer to the member for Columbia River. I've noticed that he has not said — and he should say, because he's an honourable man, he's fair and honest and not yet tarred with the brush of many years of politics....

Interjections.

MR. LAUK: He admits his mistakes — he said he was a little remiss. But he admits his mistakes. Now he should get up and set the record straight, Mr. Chairman.

Whonock Industries issued an annual report, and they've said something here that is repeated in annual reports throughout the whole lumber industry, and it's something that the coalition party, during the election, never mentioned. They were strangely silent about the attitude of this government, and the former Minister of Forests, towards the forest industry because, you see, they were doing a job of creating a myth in this province for the consumption of voters during an election campaign. Something they neglected to say — they didn't tell lies, but they didn't tell all the truth. I thought: all right, it's not going to get the press....

AN HON. MEMBER: Why not?

MR. LAUK: People are not going to generally know it. But I want on the record what we did for the forest industry when we were the government of this province.

AN HON. MEMBER: Nothing!

MR. LAUK: We helped preserve jobs during the worst recession in the forest industry in the history of North America.

We took a flexible action; we took action to preserve jobs in the interior and the central part of British Columbia. Whonock says — and this is a company that's not known to be an active supporter of the New Democratic Party of British Columbia: "The government of the province of British Columbia have recently" — and this is in 1974, — "come forward with considerable aid to the interior independent sawmilling companies with a reduction in stumpage rates to minimums, and guidelines for chip prices, thereby enabling sawmills to operate and maintain full employment."

This is repeated in annual report after annual report. I've not yet heard that hon. minister stand in his place and say that yes, we did the right thing, and forget about the mythology of the election.

The final point with respect to the forestry aspects of this minister's estimates is raised in an editorial today in The Province. It says: "Forester Williston," and it supports.... It is the first time that The Province editorial page, the editorial page which speaks substantially for the coalition government.... Let's face it, everybody accepts that not the working press, but the editorial page of The Province we know is currently the spokesman for the coalition government. And it tries to sneak past an excuse; it tries to sugar-coat an appointment of a former Social Credit cabinet minister, a man who was on the board of directors of the British Columbia Railway when it deliberately hid the losses of that railroad over many years, a man who was roundly criticized by environmentalists, not only in this province but throughout North America, for his 19th century attitudes toward forest use. He is now, I am told, being touted as the new head of B.C. Cellulose.

MR. LEA: He went to New Brunswick to run a railroad.

MR. LAUK: This will deal a fatal blow to the integrity of B.C. Cellulose and Canadian Cellulose — a fatal blow, Mr. Chairman. He should not be pressured by the Premier; he should not be pressured by the old-line politicians in his cabinet. He must have the integrity that I know he does have. He must resist any pressure to appoint this man to such a high position in this province.

MR. G.F. GIBSON (North Vancouver-Capilano): He'll be the real Minister of Forests.

MS. R. BROWN (Vancouver-Burrard): That's right!

MR. LAUK: This is a good point. The hon.

[ Page 2683 ]

member for North Vancouver-Capilano says that Williston will become the real Minister of Forests. I warn you, sir, through you, Mr. Chairman, that if that appointment is made, you will no longer be a minister; in reality you will be a puppet, you'll be a showplace, a facade as a minister.

AN HON. MEMBER: He is now.

MR. LAUK: Oh, I don't accept that. But I will say that the pressure is on that minister. We know on this side of the House that the pressure is on you, sir. Resist it!

AN HON, MEMBER: Hear, hear!

MR. LAUK: We know you're an honest man. Resist this political hackery! Don't appoint Ray Williston to that board. It will haunt...if I can borrow a phrase from the Liberal leader (Mr. Gibson), it will haunt the life of your ministry.

MR. CHAIRMAN: Please address the Chair.

MR. LAUK: Mr. Chairman, it would be the worst possible choice to make. I do not wish to further erode Mr. Williston's reputation in this province. I wish that he were not involved in the public life in this province to avoid the necessity of doing so. But can we stand as honourable members in this House in the opposition and let an appointment like this go past without comment? I would say that's impossible.

I would ask the minister now to refute any such suggestion that Mr. Williston will be appointed to that high office. I would ask him to clearly state that any such appointment to that office will be a person who is skilled in the field of forestry and in the management of forest companies, without political connection and at arm's length from the government — the way it should properly be. I ask the minister to make that commitment now.

MR. L. BAWTREE (Shuswap): I would like to take a place in this discussion on the minister's salary at this time, if I might. I would like to bring to the minister's attention, Mr. Chairman, the sad state of the industry, particularly the logging and the lumbering sections of the industry, in my riding. The forest industry still is by far the most important industry in this province, and as far down the road ahead as we can see it will remain one of the most important industries and it will determine the standard of living of everyone in this province. The standard of living of everyone in this province, regardless of whether they live in Shuswap or Omineca or in downtown Vancouver, is determined to a very large degree by the harvesting of the timber of this province.

Mr. Minister, although I do not have many answers, I would like to point out some of the difficulties being encountered in the industry.

The costs of lumber production in this province are getting completely out of line with those areas where we must compete. I would just like to bring to the attention of the House, Mr. Chairman, some of the changes that have taken place in the industry since 1973.

On the coast in 1973 the average log sales value was $65. That same figure is operable today, It is still $65 but the average cost of logging, according to the appraisal statistics, has gone from $32 in 1973 to $62 in 1976 for an increase of 94 per cent. In the interior the average selling price of lumber has gone from $143 in 1973 to $150 in 1976 and the logging cost allowance has gone from $21 a cunit to $36 a cunit for an increase of 71 per cent.

What this means, Mr. Chairman, is that the revenue from stumpage has gone from $248 million in 1973 down to an estimated $35 million this past year. The labour costs in the industry have eaten up the stumpage, and stumpage is the people's share of the natural resources.

There have been some changes made just recently in order to help the industry at least to overcome some of the environmental constraints and the high costs.

Mr. Chairman, I would like to adjourn this debate,

Interjection.

MR. BAWTREE: I would just like to pause here a moment, while the Premier would like to say a few words.

HON. W.R. BENNETT (Premier): I would ask leave of the House to introduce a very important visitor to our Legislature this afternoon — in fact, three very important visitors who have a long history in politics. Mr. Chairman, may I have leave?

Leave granted.

HON. MR. BENNETT: Mr. Chairman, it's my pleasure to introduce to the Legislature this afternoon the member for Rocky Mountain, the leader of the Progressive Conservative Party and the Leader of the Opposition in the parliament at Ottawa, Mr. Joe Clark.

Mr. Clark has a history of political activity and contribution to the country and, I might say, starting as far back as 1963, he was the president of the Progressive Conservative Student Federation. He later moved on to be special assistant to the Hon. Davie Fulton in 1967. He was executive assistant to the Hon. Robert Stanfield, the Leader of the Opposition in the years 1960 to 1970, and was first elected to

[ Page 2684 ]

the Parliament of Canada in 1972, as I said, as the member for Rocky Mountain. He was re-elected in 1974 and perhaps, even for those of us who could stand back in a detached way and watch, he was elected leader of the Conservative Party in one of the most exciting contests the country has watched in this year of 1976.

Mr. Clark is accompanied by his wife, Maureen, and is accompanied by the wife of the member for Oak Bay (Mr. Wallace), Kathy. I ask the members of the Assembly to welcome Mr. Clark, Maureen and Kathy.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, you're always in such a hurry to get on with the estimates.

Mr. Chairman and fellow members, it gives me great honour and pride to welcome our national leader and his lovely wife, Maureen. I notice that our politicians are often accused of being in favour of motherhood. We've got a leader and his wife who certainly support that concept and I'd like to congratulate you.

The Premier mentioned the convention which elected our national leader, and I want to say how confident I am that our leader, whose roots are in the west, is a man with a very clear national and international overview of events. The main reason that our leader is here today is to meet with Premier Bennett in a series of meetings with other provincial premiers and also to build some of the understanding which I believe recent events have shown is somewhat lacking at the federal-provincial level.

Our leader, Mr. Clark, met yesterday with President Ford, and I think this is another example of the wide and responsible attitude which Mr. Clark is bringing to his role as national leader. I'm just delighted that he has been able to be presented to the House today, and I appreciate the courtesy of our Premier.

MR. D. BARRETT (Leader of the Opposition): Mr. Chairman, I, too, would like to join in a welcome to Her Majesty's Loyal Leader of the Opposition and to Ms. McTeer; also to Mrs. Wallace, who is accompanying the hon. Leader of the Opposition. I am pleased to note that the Leader of the Opposition is visiting all of the provinces as his predecessor did. I was a fond admirer of your predecessor who, above all, was a gentleman. I thought that those qualities were outstanding in the role that he played, and you have already displayed that same form and that same approach.

In light of your responsibilities federally, may I conclude by saying bienvenue and bonne chance.

MR. GIBSON: Mr. Chairman, I, too, would join in welcoming to the chamber Mr. Clark and Ms. McTeer and Mrs. Wallace, very much so. I had the opportunity of working in Ottawa at the same time that Mr. Clark was the very respected assistant of Mr. Stanfield. I had also the opportunity of running federally against his colleague, John Fraser, in 1972. John lost in a sense and had to go to Ottawa. (Laughter.) The national Leader of the Opposition is very welcome here, Unlike Ottawa, he will note the tremendous numerical strength of the provincial Liberal Party in this House (laughter), and we all make him welcome.

MR. BAWTREE: Mr. Chairman, I was elaborating on some of the things that are happening in the industry regarding the income from stumpage. It is being eaten up to a very, very large degree by the increased labour costs. The environmental constraints that have been relaxed to some degree recently — any advantages are going to be eaten up by the cost of labour.

The next step, Mr. Chairman, in my opinion, will be to find the need to subsidize our logging in this province, our lumbering industry, by the direct taxation of our people. This, to me, would put the province so far down the road that they would probably never recover in their logging and lumbering industry.

There are many indications that the viability of the sawmills in my riding of Shuswap, and I'm sure most of the mills in the interior of this province, is getting a great deal worse. There are nine major sawmills in the Shuswap riding and I believe three of them, or 30 per cent, will be out of business in the very near future. If this comes to pass, Mr. Chairman, this will have a very serious effect on this very important part of the province and, to a lesser degree, to the total province. The problems in the industry are caused for many reasons, and I would like to mention just a few of them. The member for Revelstoke-Slocan (Mr. King) stated there were great advantages to the industry in this province. I can tell you that there are a great many disadvantages also — disadvantages that many of the areas against which we have to compete do not have.

Some of the companies that are operating in my riding, Mr. Chairman, are companies that are also operating in the southern United States. In the southern states they can grow a crop of trees in anywhere from 20 to 30 years; up in this area it take us anywhere from 80 to 100 to 120 years to grow a crop of trees. Their harvesting and reforesting down in that area are also done by mechanical means while ours, to a very large degree, because of the terrain and snow conditions, have to be done by hand.

I would like to compare some of the wages paid in the U.S., where we want to sell our lumber, with those paid in B.C. and in my riding. The basic rate in Arkansas is $2.75 an hour compared to $6.14 in my riding; a millwright in that area gets $4.64 compared

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to $8.70; a sawyer gets that same $4.64 compared to $8.30 for a sawyer in my riding. The wages in B.C. will go up on July 1 by 75 cents an hour to $6.89, which will increase the wage spread between the province and our competitors to an even greater degree. These wage rates are only just part of the total labour costs, because there are fringe benefits which represent an additional 20 per cent cost and which must be charged to that labour.

I do not begrudge the workers in the industries their high wages or their fringe benefits. Mr. Chairman, in fact, I know they are underpaid in relation to most of the employees in the public sector. Just recently the hospital workers in this province were awarded a settlement which must not only be borne by the private sector but also must be matched eventually by that private sector. The cost of this one increase alone in this public sector is going to be $60 million. That's what the cost to the province for that settlement in the hospital industry is. I believe that the workers in the primary industry are entitled to the same benefits that the public sector is able to get.

The public sector workers have far greater security in their jobs. They have higher wages, shorter working hours and more fringe benefits. Just a few of the fringe benefits that they receive that the workers in the sawmill industry or the logging industry do not are four weeks of paid vacation after just one year, six weeks after 24 years, and uniforms are supplied and cleaned. We don't get that in the logging industry. One of the biggest problems facing the forest industry is how to match these large awards in the public sector with what can be paid for by those of us who are working in the lumbering industry.

I have to admit, Mr. Minister, through you, Mr. Chairman, that I believe your problems are nearly insurmountable and certainly will not be solved in isolation. You've seen the detrimental effects other parts of our economy can have on this primary resource, and B.C. Rail, of course, is a very good example. It's unfortunate that the settlement was delayed for several days. It was unfortunate that there were people out of work for a longer period of time than necessary.

There are going to be problems with the native people that are going to have to be solved. That really is not within your department but it's going to have a great effect on the lumbering industry.

Wage awards in the public sector, I've already mentioned, are very high and probably cannot be met in the forest industry.

Highways — again this is not a department over which you have any control and yet it has a very great bearing on how effective our logging industry can be, in the interior of this province particularly.

Human Resources is another area that has a great effect on the lumbering industry because when the snow gets very deep in the interior and in our mountain areas, it takes a lot of dedication for most people to want to go out and cut trees down. If they can get paid by the Minister of Human Resources to stay at home this is what is going to happen.

Parks and recreation — the member for Columbia River (Mr. Chabot) brought this subject up. We have removed large, large areas from production and have kept it for a single use. We have put parks ahead of jobs. We have too many people in this province, Mr. Minister, who said: "To heck with you. I'm all right, Jack, I've got a good job. I want to enjoy these parks and I don't really care if people are out of work because they can't harvest these trees."

I would like to say just a few words, Mr. Minister, through you, Mr. Chairman, about one other aspect that is not going to have any effect on the lumbering industry to any great extent but does affect another user in our forests today, and that is the cattle industry. The cattle industry feel very concerned at this large, large amount of land that has been set aside for a single use, and prohibiting its use for the raising of food in this province.

I would just like to say in conclusion, Mr. Minister, a few words about a report that was done by Dr. Alistair McLean with regard to the damage that might be done by cattle on our rangeland. Dr. Alistair McLean is from the research station in Kamloops and his main findings in the research that he did was that the cattle damage to rangeland was only of any importance in the early spring and early winter. In early winter when the snow is deep — and most ranchers, of course, know very well they should not have their cattle out there at that time — there is some damage. "But with these exceptions, joint use of range by cattle and mule deer is mutually beneficial, under moderate stocking rates and good management."

Dr. McLean goes on to say that "cattle are especially beneficial to rangeland in early fall when they clean out the old grass growth. This makes it easier for deer to reach new shoots during the following spring."

I'm glad to see, Mr. Minister, that this philosophy is now being looked on with greater favour by people in all the resource areas, and in the Ashnola and the Junction areas the multiple use is going to be practised, we hope, in the very near future,

MR. SKELLY: Mr. Chairman, the member for Columbia River (Mr. Chabot) and the member for Shuswap (Mr. Bawtree) mentioned the importance of the forest industry to British Columbia. I don't think there's a single member on this side of the House who disputes the importance of that industry to this province. But I think we're concerned about the way the forest industry has been managed under the present Social Credit government and under the

[ Page 2686 ]

previous Social Credit government, and I'd like to re-emphasize something that I said last Thursday: when we met with the Council of Forest Industries' executive, they congratulated the members of this party on the flexible approach that they adopted when they were in government to the forest industry in a time of severe economic dislocation throughout the world, in the markets that that forest industry enjoys throughout the world, and they congratulated us on our flexible approach to the forest industry which helped to keep that forest industry afloat during difficult times.

They expressed the wish that our American counterparts, as governments south of the border, had adopted the same flexible approach, I imagine they'd be expressing the same wish with this government — that they would adopt the same flexible approach — but I don't imagine they will. They seem to be going into this management of the forest industry with some strongly preconceived notions and, I think, notions that will be damaging to other resource values in the provincial economy.

The member for Columbia River pointed out that at the present time 50 cents out of every provincial dollar is attributable in some way to the forest industry. It's interesting, looking back over the Social Credit regime and doing a little historical research, that in presenting amendments to the Logging Tax Act, way back in 1953, the Hon. Robert Sommers — and that was the last time that they had combined the Minister of Mines and Forests, and it was a very unfortunate combination at that time as well — but at that time, in presenting the amendments to the Logging Tax Act, that minister said that 62 cents out of every provincial dollar was attributed to the forest industry, so we've gone down in 20 years of Social Credit reign, 20 years of Social Credit administration; less of the provincial economy has been attributable to forest industry than in 1953.

Bob Williams, the former Minister of Lands and Forests, also pointed out what happened to the small sawmilling industry in the province — those family-owned sawmills that were the centre of their community, that enjoyed the confidence of their community — 2,500 sawmills existed when Social Credit took office in 1952 and by 1972 there were less than 1,000 left.

SOME HON. MEMBERS: Shame!

MR. SKELLY: The policy of the previous ministers, under the previous Social Credit government, was to drive those small sawmills out of business and replace them with the huge integrated companies. That was the policy of that former Social Credit government, and I imagine that we can expect a return to that kind of policy under the present government considering the sources of campaign funds that that government has.

MR. L.B. KAHL (Esquimalt): What happened to Williams?

MR. SKELLY: So there was a decline from something like 2,500 sawmills to less than 1,000, and under the NDP administration that number increased — under the administration of the former Minister of Lands, Forests and Water Resources. Somebody mentioned Ray Williston. Where is he today? You know, under Williston's administration we had a small company called Northwood Pulp, a subsidiary of Noranda that had operations up in Prince George, and that company grew from one of the smaller operations in British Columbia to one of the larger operations — the second largest operation, I believe, in British Columbia — under the benevolent regime of Ray Williston, who also represented the same area in which Northwood Pulp operated,

When Ray Williston left office...and the biggest example of broadcast burning that ever took place, Mr. Chairman, was what happened to Ray Williston's files when he left office. I think he left office and went on a tour of New Brunswick at the invitation of Fraser Lumber Co., which was a subsidiary of Northwood Pulp, and I believe he was hired as a consultant to Fraser Lumber before being hired by the Province of New Brunswick to revamp their forest administration,

MR. CHAIRMAN: Order, please, Would the member please show how this relates to the administrative responsibilities of the minister?

MR. SKELLY: Well, somebody simply read into the record the accolades given by The Province editorial this morning to Ray Williston and suggested that he would be a good manager for B.C. Cellulose, replacing Ray Jones. I'm not sure that with Mr. Williston's connections to other large forest companies in the province, and with the management of the forest industry which took place over his regime, that he would be an appropriate person to hire as chairman of B.C. Cellulose, or chief executive officer of B.C. Cellulose.

There was a cosy connection between that minister and certain elements in the forest industry. I hope that they are not considering the appointment of Ray Williston as chief executive officer of B.C. Cellulose Corp,

The member for Columbia River (Mr. Chabot) also mentioned how the last government created parks and recreation areas that took something like 450,000 acres — or was he talking about millions of cunits? — out of production in this province. What he didn't say was there was no access to a lot of that timber because the national parks branch refused

[ Page 2687 ]

access through national parks to that area between the national park and Mount Assiniboine Park. When I considering the resource values in that area between the national park and the previous boundaries of Mount Assiniboine it had to be taken into consideration that access was denied by the federal government through the national parks to that timber between Mount Assiniboine and the national park.

Interjection.

MR. SKELLY: I'm talking about the area you were talking about, which is the area between the national park and Mount Assiniboine Park that takes up a lot of that 457 million cunits.

I am really concerned about the parks in this province. Under the previous Social Credit government we lost more than two million acres of parkland to exploitation by forest companies and to exploitation by mining companies, which the present Minister of Mines seems to be committed to, although the Premier seems to have some difference with him, and possibly the Minister of Recreation and Travel Industry (Hon. Mrs. McCarthy). I am concerned that they are going to take this land out of parkland, that there is a bit of pressure from the lighweights in the back bench such as the member for Shuswap (Mr. Bawtree) and the member for Columbia River (Mr. Chabot). I hope he doesn't respond to that pressure.

Also, on forest development roads again, we haven't really had the assurance from the minister that access will be maintained to the north island communities such as Tahsis and Zeballos year-round under this vote, considering the fact that the Highways budget has been cut back. Certainly we can ask questions of the Minister of Highways (Hon. Mr. Fraser), but that money that was expended in previous years was expended by the Minister of Highways through the Forest Service and then expended on those forest development roads. I am wondering specifically if the minister can assure the communities of north Vancouver Island — Talisis and Zeballos — that their roads will be maintained by the Forest Service on a year-round basis and that there are adequate funds in the budget to maintain those roads. All he has to do is answer that question — yes or no. It's a very simple answer; all he has to do is provide that assurance.

It is interesting how the budget amounts have shifted and how the allocation of money has shifted in the minister's department. There have been increases in some areas of his department and decreases in others. I'd like to ask the minister some general questions on the rationale behind those increases and decreases. It appears that there has been a $5 million increase, from $4 million to $9 million, in the scaling programme. Under the old water-scaling programme there was a return to the government that pretty well eliminated the cost of scaling — that balanced the cost of scaling. It appears now that the province is paying the full cost of the weighscale programme. Perhaps that's not the case; perhaps he an answer that question. But in any case, it appears that the province is assuming the full cost of the weighscale programme to the tune of $5 million this ear.

Also, there is a $4 million increase in the fire suppression budget. Yet in general forest protection there has been a slight decrease in the budget even though there is a tremendous amount of damage due to forest pests. We have read a little bit about the tussock moth spraying programme north of Kamloops and how successful that has been. But in discussing the question of pests with the forest protection division, apparently there are something like 300,000 acres of spruce budworm damage in the province. They only have the money and the personnel to do test work on something like 50 acres of the total of the 300,000 acres that are damaged by spruce budworm. I am wondering why there has been a cutback in that department, considering the large amount of damage that is being done by the spruce budworm in areas in the interior of the province.

Also, there has been a $3 million increase in administration of the department. The member for Shuswap talks about the high cost of civil servants and how their wages are increasing drastically while the wages in the forestry sector are falling behind the public sector. Yet we see in the Forest Service budget that one of the areas in which increased costs have been allocated is in the administration sector. Is that to pay higher wages? Is that to hire more staff in Victoria? Just what is the reason behind the increase in the administration sector?

Last year it was estimated that the cost of the reservoir waterway improvement programme was $10 because of the recovery of funds from that programme — that expenditures would be recovered from, I imagine, sale of timber and debris — and I'm wondering what this programme does cover. Is this to clean up the mess that was left behind the dams that were built by the Social Credit government? Is that what it's for? If so, what reservoirs are being cleaned up? Are they reservoirs behind the dams that were built by Social Credit where no cleanup was done in advance of construction, or inadequate cleanup was done in advance of construction, where they went ahead and built dams without consideration for the environment under the previous Social Credit government? Why the increased cost, from $10 to $7 million, in this programme?

The member for Shuswap (Mr. Bawtree) also compared wages in British Columbia with wages in the southern pine area of the United States — how labourers up here were making $6.14 an hour and down there they were making $2.75 an hour and that

[ Page 2688 ]

therefore the capital was going to flee the country to this area of lower costs. And the forest companies are always telling us how, because of increased costs and low productivity in the industry up here, they're moving to other areas of the world, and especially increased costs as they relate to second-growth management, telling us how they're going to go to places like Brazil — and it used to be Mozambique, but it's not longer, or Angola, and a few other places like that. The main reason for the export of capital from British Columbia of our forest industries here to those other parts of the world is the low wages and high productivity.

But I'd like to read into the record some of the other attributes that seem to appeal to the companies doing business in this province when they're making decisions to allocate capital to other areas of the world. Here's a letter from The Vancouver Sun of February 13, 1975, talking about the economic miracle of Brazil — and we know that MacMillan Bloedel and B.C. Forest Products and other companies operating in British Columbia, in conjunction with Brascan and a few other companies, are investing in tree farms in Brazil in advance of installing pulp capacity down there, and he talks about the economic miracle of Brazil. And according to World Bank statistics, in Brazil in 1970 the richest 5 per cent of Brazilians took 38 per cent of the national income and the poorest 40 per cent of the Brazilian people took 3 per cent of the national income.

In Brazil, 100 children out of every 1,000 born die without reaching the age of one — die of malnutrition and disease. Indeed, conditions for workers and peasants in Brazil are so horrible that the Catholic bishops in Brazil, long the bastions of landlords and bourgeois rule, have openly called for socialist revolution as the only way to rationalize Brazilian economic and political life. Is that the kind of stable economy that the forest industries of this province are looking for, the member for Shuswap is looking for, moving to the southern pine areas of the States where wages are shamefully low, moving to areas in Brazil where not only are the poor so poor they can't afford to work, they don't have any wealth at all, not even the ability to deliver themselves to the workplace where companies are exterminating Indian tribes in order to make the country safe for the forest industry? Is that the type of situation that this government and the forest industries which it represents prefer?

I'd like to have the minister — for a change — answer some of the questions that have been presented to him on his department. And I particularly refer to the questions he seemed to be prepared to answer back on Thursday, questions relating to his own qualifications. We asked him what his qualifications were and related it back to some statements that he made. Mr. Chairman, I hope I am referring to the appropriate vote here. When I asked him what his qualifications as Minister of Forests were, he said: "Well, I've been raised in the bush in this province and I've probably spent more time in the bush than most people have." I'm wondering if he has any other qualifications other than those.

Interjection.

MR. C. BARBER (Victoria): I'll be quite brief. I wish to start by reporting to this House that I witnessed a very strange event three nights ago when the moon was full. I was driving by Beacon Hill Park and I saw the member for Columbia River (Mr. Chabot) slinking about like a fox.

MR. CHAIRMAN: Is this on vote 130?

MR. BARBER: It most certainly is. He had in his hand an enormous tape measure and I saw the member for Columbia River bounding from tree to tree measuring the stump. It occurred to me that night that this was a very peculiar kind of behaviour and I wondered what was going on here. He was there in Beacon Hill measuring our trees. Today in his speech, he made it clear what was going on, and I wonder if this House might join me in congratulating Sir James Douglas for being possessed of prophetic wisdom — more than 100 years ago — to declare Beacon Hill Park in Victoria a municipal rather than a provincial park, because, were it in provincial hands, and were one to conclude from the actions of the member for Columbia River measuring the trees in Beacon Hill Park and their suitability for cutting — because parks are wasteful unless you can cut the trees within them, aren't they? — we would lose our park. It would be a total wasteland.

Interjections.

MR. CHAIRMAN: Order! Order, please. The second member for Victoria has the floor.

MR. BARBER: So, hearing considerable applause for the resolution to congratulate old Sir James for making it a municipal rather than a provincial park, thus keeping it safe, I wish to proceed onto another topic. A couple of years ago the predecessor of the present minister was responsible for helping develop one of the most remarkable, one of the most inventive and imaginative community and economic projects we've yet seen in the province of British Columbia. I am referring to something that is generally called the Burns Lake project, and I have a couple of questions that I would like to put to the minister about it.

The aspect of community development implicit in

[ Page 2689 ]

this project is the one that interests me the most. What we have seen in the Burns Lake Native Development Corp. and in the Burns Lake Community Development Association is the remarkable combination of two different kinds of energies, two different kinds of skills, two different kinds of needs. What we have seen in this outstandingly successful project is the combining of local and native talents and skills, energies and traditions in the formation of a community development association that did not previously exist and which has, in its present form, taken outstanding steps to reduce unemployment, to obtain training for its workers and to broaden substantially the economic base now available to the native Indians in the Burns Lake area.

Simultaneously, the previous government chose to grant that association an 8 per cent interest in Babine Forest Products Ltd. And through the granting of that interest it was able to give, in the form of equity, a genuine interest and a genuine purpose to the involvement of native Indians in these developments in the Burns Lake area.

I wish to review a couple of them very briefly and then ask the minister whether or not in principle he believes that this combination — government support of native training and retraining and of equity participation in the sawmill at Babine — is something that he supports, whether or not he is willing to support it in cabinet, whether or not he is willing to take additional initiatives and whether or not he is willing to meet certain specific requests made by the Burns Lake Community Development Association in a brief which, I understand, has recently been presented to him.

The brief itself has already been adopted in part by that provincial government. The Minister of Human Resources (Hon. Mr. Vander Zalm) in his estimates allocated the sum of $188,000 to the Burns Lake Community Development Association. I congratulate the minister for doing that and I congratulate the Minister of Forests (Hon, Mr. Waterland) for, no doubt, advising him that this was a reasonable and proper project and deserving of his support. But there are additional requests that have been made to the minister and I wonder if today he will tell us about them.

Before I get onto that though, I would like to review briefly the work of this association, and to point out again the outstanding level of imagination, the outstanding level of community participation and the outstanding results derived from the Burns Lake project. This project has provided employment for more than 300 persons. Of those 300,148 at this time are native Indians. This programme has provided educational upgrading for more than 130 persons so as to provide, through that training, opportunity to participate in industrial work throughout Canada.

The Burns Lake project has provided training for more than 110 persons in skills varying from office procedures to heavy equipment operation.

To quote from their report — and it is by most accounts, including that of the Department of Human Resources, an accurate report — the Burns Lake project has resulted "in a reduction in the local welfare rolls by approximately 60 per cent, and in a reduction in unemployment insurance claimants by more than 50 per cent." Because of the initiative taken at Burns Lake, 60 per cent of the people previously on welfare are no longer on welfare in Burns Lake. They are now working. They are supporting themselves and their families. Because of the initiative taken by this project, 50 per cent of the people who were previously in receipt of unemployment insurance are now working and supporting themselves and their families. This is an outstanding project. It's worthy of the minister's support; it's already won that of his colleague, the Minister of Human Resources.

In the operations of Babine, as they report here, some nine million board feet have been produced in an outstandingly short time. The mill itself began four months before it was scheduled to begin. The operations began four months in advance because the people of that community backed it 100 per cent, because the people who came in from the outside to provide the training, the expertise and the management backed it 100 per cent, and because the government of the day showed initiative and leadership and developed it in the first place.

They have made a very specific request, though. They have made a request to that minister. I wonder, in conclusion, whether or not he is willing today to tell us whether or not he chooses to exercise his leadership and the particular role that he plays in cabinet to meet a request for application for additional capital loans and required timber.

I won't go into the tremendous details of it, but they include in 1976 expansion by an additional 25,000 cunits per annum operation. They ask for some very specific help from this government in order to obtain it. They make some requests that, it seems to me, are reasonable and fair. They make requests on the basis of practical experience, the result of which is success, success, success: reduced welfare by 60 per cent; reduced UIC claims by 50 per cent; 300 people employed; 130 people trained — of the 300 people employed, 148 are native Indians.

This in 1974-75 was an outstanding achievement; it deserves praise from every side of the House. I want to know from the minister whether or not he recognizes the achievement, whether or not he supports the opportunities for further achievement in the future, and whether or not he is willing to grant the requests made in this document for additional timber-cutting rights, for the cunits required to allow

[ Page 2690 ]

the Burns Lake Native Development Corp. and the Burns Lake Community Development Association to continue its quite remarkable work.

MR. C.S. ROGERS (Vancouver South): Mr. Chairman, last week the Leader of the Opposition, who is now the member for Revelstoke-Slocan (Mr. King), was speaking on these estimates, and he talked about the natural advantages that the lumber industry in the province has over the United States, especially Washington and Oregon. While he pointed out a lot of natural advantages, he didn't point out a lot of natural disadvantages which I think should be read into the record. Those people who have been involved in the industry for some time know the list of disadvantages is quite substantial.

To start off, the bulk of the machinery used in the forest industry is manufactured in the United States. With some exceptions in heavy steel spars, the great majority of the stuff is imported into this country. Everything from pickup trucks to hickory axe handles has to be brought in and is considerably more expensive than it is in the United States.

The same thing applies to everything from hardhats to raingear. Caterpillar Tractors from Peoria, Illinois, are extremely expensive, much more here than they are in the United States That is something which we have to take into account.

The second thing that I'd like to bring up, Mr. Chairman, is the fact that during my maiden speech I spoke on the subject of debris and debris control. I spoke about the floating debris that persists in the waterways of the Strait of Georgia and the Strait of Juan de Fuca and persists all the way up to the Queen Charlotte Islands and other areas. While some of this debris is the direct result of the forest industry, the percentage of the debris that is caused by the forest industry is, in fact, only 20 per cent of the total debris that currently infests the waterways and the beaches of the province.

Interjection.

MR. ROGERS: The Forest Service put out that result, Mr. Member. If you checked into it as I did, you'd find that was also true. In fact the Council of Forest Industries and the forest industry in the province have been quite busy working on trying to clean up the debris, although they've, in fact, spent 80 per cent of the total budget involved in debris control.

Now there are three forms of debris that are prevalent, or there are at least three uses for the debris that's available. The majority is hemlock logs, which are the sinker type or the deadhead variety. There are several sawmills currently involved in the procedure of cutting and reclaiming this wood. However, they're paying stumpages based on the s same rate as would have to be paid for wood that came in on a regular boom, which is a bit of inconvenience because of the problem of towing and extra cost incurred. The second is that, basically, a log that has bark on it is a log that can be chipped, and a log that has no longer got the bark on it is a log that can't be chipped. This is primarily because of the ingestion of sand into the fissures of the log. So there are three purposes: one is sawn lumber, one is chips, and the third is to be run through a bone mill and put into hog fuel.

I would ask that the minister in his continuing efforts in his department would give more consideration to debris control. In the past, in a position on the Fraser River at a little place called Laidlaw, they have built a wing dam during the freshet which has captured an awful lot of the debris that is natural and also man-made which comes down the Fraser. They have taken this wood and salvaged what they could and burned the rest. This has been a Forest Service project. Some of it has been successful. This year it wasn't continued. I would ask that they give serious consideration to making it a permanent effort. The mayor of Surrey had his vessel holed by a log that was floating, and there are several other people that boat. All of us who are involved in maritime exercises, including the float-plane pilots of this coast, would like it very much if we could do something to help eliminate this debris.

The other thing that I'd like to say is that we don't have a monopoly on the world's production of softwoods, as has been pointed out. The Soviet Union has the capability, if they would ever get their act together, of running very, very extensive inroads into the world softwood markets. We must remain competitive, as many other members of this House have said. We are in a position to have our No. 1 industry seriously curtailed if we don't maintain our very competitive position in the world market.

MR. GIBSON: I want to draw attention to a really basic problem at this stage and I hope that the minister will tell us what he can do about it. The forest industry is very sick at the present moment, and I'll give a few figures to support that contention, but before I do that, let me say that British Columbians have to appreciate that if the forest industry is sick the province is sick, and that's exactly where we are today.

We have seen a situation where the forest industry in the past five years has switched from being the engine of growth in British Columbia to a virtual no-growth industry. I think that the officials sitting behind the minister will assure him that that is indeed the case — and not through their fault. I'm not meaning to imply that.

One of the most important briefs that was submitted to the Pearse commission, Mr. Chairman,

[ Page 2691 ]

wasn't right on target of the Pearse commission, but it's something that should be brought up in this House, and that's the brief that was submitted by Murray Leith, who was at that time the president of the British Columbia section of the Investment Dealers Association of Canada. Mr. Leith brought to the commissioner's attention the changes in capital costs in the forest industry over the past few years.

The figures I'll cite at this moment relate to new pulp capacity, which is the most capital-intensive sector of the industry, but they apply in general format right across the field. These are costs of new pulp capacity which relate to numbers of dollars per annual ton required to be invested. In 1971 the total figure was $133.30. By 1976 this figure had gone up to $310.62 — almost a tripling, Mr. Speaker.

If you look at the capital component of that loan the figures went from $44, roughly, to $118, roughly — once again, almost a tripling. The distribution of costs for selected periods evidences the increased size of the capital charges. Back in 1966-67 capital accounted for about 22 per cent of the annual cost. By 1976-77 it had grown to 40.1 per cent.

If there's been a tremendous thirst for capital in the forest industry that's one thing. You can get along with that if at the same time you're getting a good return on that capital. What are the facts about return on capital? In a talk in early April of this year, Jamie Angus, who is the Council of Forest Industries economist, brought out some figures for 1975, the most recent year, and for the decade before that.

Angus was speaking of the figures for 15 coastal members of the Council of Forest Industries. The coastal members, I should say, Mr. Chairman, should be the most profitable group in the industry because they have the best quality of wood. The rate of return as measured by this index on capital invested in the industry amounted to only 4.6 per cent in 1975, and the 10-year average — 1966 to 1975 — was 5.8 per cent on invested capital.

Some people might say: "Well, that's invested capital — the return on equity was better." It was only very marginally better. In 1975 the return on equity was 5.1 per cent; the 10-year average return on equity was 7.6 per cent.

Mr. Chairman, let me be very clear — this is not a problem which I'm saying is in any way the fault of the minister. I'm saying that it's a problem that somehow he and his department and his government and this Legislature have to tackle. Figures like 5 and 6 and 7 per cent return on invested capital just aren't good enough in this day and age to get the new kind of investment in this province we need to change forestry back from being a no-growth industry to a provider of jobs in this province. We all know that we're a long way from sustained yield in this province, but we also know that the timber that's maturing every year and rotting isn't capable of economic harvest, by and large, because of our cost structure. A large part of that problem is the return on capital invested in the industry.

Mr. Chairman, people are too prone to look at the profits of the forest companies and say, "oh, millions of dollars — that's a lot of money, " but you have to compare that to the amount of money that's invested in there by shareholders and by bond holders in the first place. Any time people who are saving in any way — whether they're saving in their own bank account, whether they're saving through a pension fund or an insurance company or whatever the means of capital intermediations may be — have to say the rate of return that they'll get by going to that particular industry is less than enough to compensate them for inflation, and is less by a considerable margin than they can get by going down to a trust company and taking an ordinary certificate out, then that's not a very good place to put their money. That bodes very ill for the future of British Columbia, in my opinion.

The minister has limited manoeuvrability. There's not much he can do about labour costs, although I think the government as a whole can do some things about labour costs in terms of improving the industrial relations climate in this province. I think that one of the most sensible, practical, down-to-earth unions in this province is IWA; the pulp unions haven't showed quite that degree of leadership, I think. But there's not much this minister can do, in any event, about labour costs.

There's not too much either he can do about capital charges, but there's a great deal that he can do about wood costs. That comes in two general areas. One is Crown charges for timber, and the other one that he can perhaps get at more quickly, and has to some extent already, is the cost of acquiring that timber in an operational sense — the logging guidelines, to be specific. The minister has changed those guidelines to some extent recently. I'd be grateful if he would give some details to the House on the additional cash flow that he feels that this might inject into the industry.

I was very concerned to read of some testimony that was given at the final session of the Pearse royal commission. According to the newspaper report, and I'll just quote it here:

"No serious attempt was made by the B.C. Forest Service to assess the cost in lost revenue of enforcing new logging rules on the coast, though the bill might be as high as $120 million a year, it was revealed in Vancouver Thursday.

"At the final hearing of the Pearse Royal Commission on Forest Resources, deputy provincial Forests Minister, John Stokes, admitted under questioning by Duncan Shaw, acting for M and B, that there had been general discussion of the cost of guidelines introduced

[ Page 2692 ]

in 1972, but no attempt at serious cost analysis.

"Stokes said that he did not accept the figure of $100 million advanced by Shaw as the true cost of the loss in government and industry revenues as a consequence of implementation of the guidelines, but he did not advance a counter-figure as to what the real cost is."

Mr. Chairman, what I would like to know is: what was the cost of those new guidelines? Does the department yet have an estimate? And what is the benefit of the slacking off of the guidelines? How much more possible is that going to make it for the industry to operate in an efficient way in this province?

Mr. Chairman, make no mistake, the basic concern here isn't about industry profits. Industry profits are just a means to an end. The basic concern has to be about the jobs that are generated by industry in this province, jobs that are generated by new investment in that industry, which we have just not been seeing for the last few years, and of course about the taxation revenues that are generated when an industry is in a profitable position.

It's a thing which is of just enormous concern to me, Mr. Chairman, and I know that it's of concern to the minister as well. He's only been in this portfolio for a few months now, but he cannot fail to have tackled this question and, I would assume, to have discussed it not only with industry groups but with union groups as well. I know, for example, that the IWA is very concerned about the underlying economics of the situation, as they have to be, because they have the highest wages of forest workers in the world. They want to maintain that, and I want to maintain it and I think the whole House does. But to do that the industry simply must be in a more economic position than it is today.

I would ask the minister if he has any news he can give us, or any analysis or approaches to the problem that need not await the results of the Pearse commission, because they're not really along the lines of tenure questions, they're much more along the lines of financial questions. I wonder if the minister could tell us his current analysis of this very, very serious economic question for British Columbia.

[Mr. Veitch in the chair.]

MRS. B.B. WALLACE (Cowichan-Malahat): Mr. Chairman, I represent the constituency that probably has one of the highest per capita logging-oriented and forest-oriented industrial areas of any constituency in the province. As such, I am of course naturally very concerned about the health of the forest industry within British Columbia. Not only am I concerned, Mr. Chairman, but I would like to tell the minister, through you, that the residents of my constituency are very concerned about the position that the forest industry is having to face up to in the international marketplace. They're concerned, Mr. Chairman, about the fact that in this instance, as in so many other instance with this government, we find one minister charged with so many responsibilities. We find the minister charged with responsibility for not only the forest industry but for the mines and for I don't know how many other things, Mr. Chairman.

I am more than particularly perturbed when I hear that minister, by his own admission, say that he feels he's qualified as a Minister of Forests because he has spent a great deal of time in the bush. I would suggest, Mr. Chairman, that it takes a great deal more qualification than spending a lot of time in the bush to be able to manage the complexities of the forest industry in this province in this day and age, and I am concerned, as are my constituents, about the future of the forest industry in B.C. under the tutorship of this minister.

He has indicated that as one means to try and bolster the forest industry he is going to institute a stumpage policy which will do nothing but create a loss of our overall timber stands by leaving more unused timber or a lower grade of timber standing in the forests. This is one thing that disturbs me, Mr. Chairman, as it does disturb the people in my constituency.

But really, Mr. Chairman, I rose today to speak about another facet of this minister's activities, and it's a very strange facet that he has to be concerned with. That has already been raised by the member for Shuswap (Mr. Bawtree) — the matter of rangeland management. We, of course, have embarked into an area of multiple use for rangeland, and I certainly agree in principle to a degree with that approach.

I asked the minister the other day about whether or not he had undertaken any major changes in rangeland management, and he replied to the effect that there were no major changes in effect. I'd like to just speak specifically at this point about one specific range, Mr. Chairman, and that is the Fly Creek range.

Now in that area there is one medium-sized rancher; he does some logging and he's also a cattleman, and he's had his ranch there since 1958. He's a good citizen of that area, Mr. Chairman. He puts up hay — even more hay than he can use for his present herd. He has a permit for 86 head on the Fly Creek range. He applied this year to have his permit doubled. This was refused and he was forced to sell some 80 head of his herd.

Now, Mr. Chairman, I understand that on this same range there is a large ranch in that area, the X Bar H. Now that X Bar H does not fall really into the category of the small local farmer. It's a corporate industry that comes in, it ships cattle in, it puts them on the range, it takes them out. It contributes nothing to the economy of the area, yet the X Bar H has been given permits which considerably increase

[ Page 2693 ]

the number of cattle they are allowed to graze. I would suggest, Mr. Chairman, that this does represent a change of policy, and I'm very concerned about this X Bar H ranch being given this kind of increased permit to range.

They put up no hay; they buy no machinery or supplies. They contribute nothing to the community, and yet they are being allowed to use government land to benefit their enterprise and the person who has been in there as a small rancher and contributing to the community has been allowed no increase.

Now I understand that the G Triangle, a small ranch, was offered the right to put some cattle onto a new part of the range which had been fenced off but he was told that he could only keep them there until April 1. He felt that there was no point in putting cattle on there until April I because then he would have no place to put them, so he couldn't increase his stock for that kind of an arrangement. Yet, Mr. Chairman, the X Bar H did put cattle in there and had them on well after April 1. In fact, the last word I had, which was sometime in May, the cattle were still on that new part of the range, put there by the X Bar H — the large group of corporate people who were in there to make nothing but money off that land and return nothing to the community.

I suggest to you, Mr. Chairman, that that does represent a change of policy, and it's a change of policy that I am certainly not in accord with, the farmers and the ranchers of this province are not in accord with, and it's a change of policy that is contrary to the concepts that have been established over the last few years.

The member for Shuswap (Mr. Bawtree) mentioned the McLean report, and I would refer that as good reading material to the Minister of Forests. I know he's a very busy man, but I think that if he is charged with the responsibility of handling such things as grazing land for ranchers and farmers in this province, then he is duty-bound to be aware of what's going on and to be a responsible minister and take a responsible view towards the usage of this rangeland for the purpose which will return the most benefit to the community specifically and to the economy of the province as a whole.

MR. SKELLY: There is just one last question I'd like to ask of the minister before he gets up, and spends two or three hours answering all the questions we've asked of him before. This relates to the highlights of a staff meeting held June 14,1976, among Forest Service staff. A report from the engineering division — part of this report — says: "The summer work programme for the management engineering section has begun. The initial McGregor diversion project has been completed and work has been lined up for other projects in the Prince George area." I'm wondering just what the nature of the McGregor diversion project is that the Forest Service is working on through their engineering division. Are they doing work for B.C. Hydro which will result in the creation of the McGregor diversion? This is the diverting of water from the Fraser River system into the Peace River drainage which has been called by some people "an ecological time-bomb" that threatens to bring parasites from the Peace River drainage into the Fraser River system that threatens one of the major industries in this province — the fishing industry on the B.C. coast — and which could be as dangerous as the St. Lawrence Seaway construction which brought the sea lamprey into the Great Lakes and completely wiped out the Great Lakes fishery for years and years.

I am wondering just what the nature of the work is that's being done by the Forest Service for B.C. Hydro on the McGregor diversion system. Are you doing the preparatory work for B.C. Hydro to create the McGregor diversion which will take water from the Fraser system through the W.A.C. Bennett Dam and release this ecological time-bomb on the Pacific coast fisheries?

MR. CHAIRMAN: The Minister of Mines and Petroleum Resources.

HON. MR. WATERLAND: And Forests.

MR. CHAIRMAN: And Forests et al.

HON. MR. WATERLAND: Thank you, Mr. Chairman. It pays to advertise, doesn't it?

MR. CHAIRMAN: Sometimes.

HON, MR. WATERLAND: Mr. Chairman, first of all in response to the latest remarks from the member for Alberni (Mr. Skelly) the only work that the Forest Service would be doing in the area of the McGregor diversion would be in assessing timber values. We are not doing any work specifically for B.C. Hydro. Please, I don't think that the Forest Service has any responsibility towards bringing all kinds of scary monsters out of the north into that river system.

MR. SKELLY: You're just preparing for it.

HON. MR. WATERLAND: Yes, we're just preparing for it.

As for the member for Cowichan-Malahat (Mrs. Wallace), let me assure you that there have been no policy changes in the management of rangeland. I deal almost daily with individual problems that individual ranchers have. I would only ask that if members of your constituency do have problems relating to grazing that you please bring them to my

[ Page 2694 ]

office yourself and I will be more than happy to try to resolve the problem if it possibly can be. I don't want to have the members in the opposition feel that because they happen to be in the opposition they don't have access to this minister's office. I am here to serve all the people insofar as my portfolio is concerned. So do bring the problems. Don't let them get out of hand. We can oftentimes nip these things in the bud. They are much less of a problem to resolve if attacked early.

That member, as did one of the other members — the member for Alberni (Mr. Skelly) — is wondering about my qualifications to be Minister of Forests. I said I was raised in the bush and I was. I'm quite proud of the fact that I was raised in wilderness areas of British Columbia, in the bush where the trees are. That in itself does not qualify me for being the Minister of Forests.

Interjections.

HON. MR. WATERLAND: I have been involved in resource industries in this province all of my working life and indeed for my entire life. There are quite a few similarities really in the basic natures of our two main resource industries, mining and forestry. There really are a lot of parallels that can be drawn. I believe my qualifications as Minister of Forests are probably far superior to those of the member raised in Vancouver East who was a town planner.

SOME HON. MEMBERS: Oh, oh!

HON. MR. WATERLAND: Again, the member for Cowichan-Malahat (Mrs. Wallace) remarked as to what new directions are being taken in range management. I said that so far no new moves have been made. However, the previous government had hired Mr. Bill Anderson to study integrated resource use of rangeland and other basic resource uses of the land. This study is proceeding. Some initial moves into this area have been made in the Kamloops, Nelson and Williams Lake areas. By the way, we will shortly be appointing a new director of grazing. Because of the importance of grazing, this position will be raised to that equal to a department head in the Forest Service.

The member for North Vancouver-Capilano (Mr. Gibson) brought up the problems of the economics of the forest industry. The member for Shuswap (Mr. Bawtree) quoted you some figures. I'll go over those figures again. The easiest ones to go through are the coast, because we have a much simpler appraisal system there. We don't have to go through the manufacturing on the end-value system. But he said that on the coast in 1973 the average value received for timber was $65 per cunit. That figure estimated this year is about the same. At that time the Forest Service had a cost allowance in their appraisal system of $32; the logging cost at that time was $32 a cunit. That logging cost today has gone up to $62. So all we have is a spread of $3 between what the material is worth on the market and what it costs to produce it. That $3 must provide a return to the province in the way of stumpage and other direct charges to the forestry companies and it must also provide a profit for the people in the industry who have committed their capital in expectations of a return. There just isn't enough money there to provide both of these.

That represents a 94 per cent escalation in costs over that three-year period. Now that cost — I'm not going to try to pin the blame for that on the previous government or on anyone else. There has been general inflation in the world and in British Columbia in particular, and in particular in the forest industry it has hit us very, very hard. But this industry is indeed in serious trouble. If we try to fool ourselves into thinking that anyone — Peter Pearse or anyone else — is going to come up with an instant solution to solve the problems of this industry, we are fooling ourselves.

That member also said that the loggers — the IWA in British Columbia — are the highest-paid loggers in the world. That may be true, but they are still not getting as much as the people working in the supermarkets and people working in the government. That, somehow, to me doesn't seem right. I haven't worked in a logging operation but I have in my youth spent a lot of time clearing right-of-way for roads. I know what type of work these guys have to do. I didn't have a powersaw in those days; I was on a string-board with a crosscut saw. A power saw helps somewhat. But there is tremendous physical exertion required in logging.

It's a tough way to make a living, and these people deserve a better return than people working in supermarkets and retail stores — and for the government, for that matter. But where is it going to come from? There's three bucks left there, in the coast — there's no more pie to split up. So you tell me what's going to happen. I really don't know. If you look at the cost of wages in British Columbia over the last few years in the Forest Service, they have gone up remarkably; they have stayed ahead of the rest of the forest industry in North America. However, the productivity has gone down by about 30 per cent. The higher wages, the lower productivity, when related to the cost per cunit of wood, has a terrible effect.

Interjection.

HON. MR. WATERLAND: That is productivity — man-hours per cunit of wood produced. In 1971 it was at a figure of 2.1 man-hours per cunit; it is now 2.8 man-hours per cunit — about a 25 to 30 per cent

[ Page 2695 ]

increase. Why? I don't know, but it has to change. The people who are employed in the forest industry, I am sure — as that member said — are aware of the fact that their industry must be competitive and they must be more productive, because the only way they can possibly get any more wages out of that industry is by increasing productivity.

In that $2 spread the government must take its revenue. In the same period of time, from 1973 until this year, the direct stumpage revenue taken by the government from this industry has gone from $248 million in 1973 to $35 million direct revenues from stumpage last year. So there's nothing left there. Now we're talking about a $2 billion industry, and a direct revenue from stumpage of $35 million. We cannot increase that because it just is not there, so we really do have serious problems. I don't have instant answers. Perhaps our member for Kootenay (Mr. Haddad) who is a magician, could come up with something — it's going to require something like that.

The government does have things that can be done. The environmental constraints, the logging guidelines that were imposed, did have a tremendous effect on the cost of logging. I can't give you figures on that, but this is one of the areas that can be worked on. We must have more realistic approaches to the standard of roads, for example, because those roads must be paid for by that resource. If there's no more money there, the first thing that should go is the standard of the roads, because all the logging people really need from their road is a pathway to get their timber out of the bush. Now if it is required that there be a better-class highway in there, then that forest industry cannot afford to pay for that; that revenue must come from other sources because it's just not in that forestry sector. It's not, and anybody who says it is is fooling themselves.

We had to hold back somewhat on the standard of utilization on the coast — and this is only being done through permit application by any individual company; it's not a blanket thing. We're saying to the companies that until the end of this year only we will allow you to leave slightly larger pieces of junk in the bush because when you bring it out you can't sell it anyway and it winds up as part of our debris problem in the coastal waters.

Now that will somewhat change revenue to the government because the average market value of material brought out will now be slightly higher, which in turn will be reflected in slightly higher stumpage return to the province. But that is only a temporary thing, and one of the reasons that that came about was because we have a terrible excess of pulp logs on the coast and wood chips in the interior. This stuff, if it's going to be taken out, is just taking if from one place where it's of no value and putting it somewhere else where it's of no value.

I'm afraid that if costs continue to escalate in this business, someday in the not-too-distant future only the very, very best quality wood in this province will be economic. That other wood — the fantastically good utilization standard that we have gotten down to over the last 20-some years — will be meaningless, because if you can't sell the stuff for more than it costs to produce it, it has to stay in the bush.

AN HON. MEMBER: And that means fewer jobs.

HON. MR. WATERLAND: That means many, many fewer jobs. The forest industry is a half of our economy, and it's in trouble. I think everybody, whether we be opposition members or government members, must recognize that fact, and we must all collectively work towards a solution to that, because if we don't come up with a solution, believe me, we will be in trouble.

The second member for Victoria (Mr. Barber) saw a monster in Beacon Hill Park. Ooooh! (Laughter.) I wonder what it was doing there? I must tell you something, Mr. Member, about Beacon Hill Park, and this is going to shock you — it's going to shock the whole opposition — and my members, too, I believe. On the 26th of this month we will be having a mining operation underway in Beacon Hill Park...

Interjections.

HON. MR. WATERLAND: ...and I invite you all. On the 26th it's the Canadian annual mine rescue competition. It's a mock mine; it won't destroy the park — but I would like to see you all there. I realize this is forest estimates, but I thought, what a lovely time to tell you about mining in Beacon Hill Park.

MR. N. LEVI (Vancouver-Burrard): What are you going to do if you find something in the park? (Laughter.)

HON. MR. WATERLAND: Then we have a problem. (Laughter.)

The Burns Lake Development Corp., I must agree, is a good thing. It is providing our native people in that area with a chance of being productive, of working the same as everyone else does in a competitive industry. And they are doing a good job.

There are better operations. These people are learning fast. They are good workers and very competent people. We have similar proposals coming forth from other Indian bands. There is one, the Kitwanga band, which recently had entered a bid proposal for a quota of timber. There were two bids put in for that, and when the bids came in it appeared that the Kitwanga band were not going to be awarded it, because we want these people to compete on a competitive basis with no favours and that is the way they want it. They don't want to have stuff handed

[ Page 2696 ]

to them. They've told me. Mr. Brown, the president of the Burns Lake Development Corp., and Ken Spinks from the Lytton band, come in and say: "Look, all we want is a chance to bid on that, the same as everybody else, and if we're not competitive we don't want it. But if we are, we want to have a chance, the same as everybody else in this province." I think that is a beautiful attitude and I will do everything I can to encourage the native people to do just that.

As a matter of fact, when the people from the Burns Lake Development Corp. came down they didn't get a particular forester's sale. However, while they were there I suggested that we get staff from the Department of Mines together with them and give some of their band prospecting courses so that they can go out and also become involved in the mining industry. They are doing this right now.

I think it is a good thing to encourage all our native people to become involved on an equal basis with us and let's not separate them from us. Let's just work together without any preference. As a matter of fact, as the Minister of Forests, there is no way, other than writing in very strict sociological advantages, that I can direct forest value to the native people. But they don't want it directed. They just want to have a fighting chance with everyone else, and I think that's a beautiful attitude.

MR. G.V. LAUK (Vancouver Centre): Williston!

HON. MR. WATERLAND: Ray Williston — who's that?

The Premier has announced — he and I have been together before he went away — and we have decided that my responsibility for the forestry-based Crown corporations puts me at less than arm's length distance from these corporations. I am the minister responsible for the disposing of values in the forest sector. I should not also then be the minister responsible for these Crown corporations which are acquiring forest value. So the responsibility for these Crown corporations will be taken out of my hands and an announcement probably will be made by whoever assumes that responsibility as to the replacement for Ray Jones who resigned recently.

By the way, I must publicly thank Ray. He did a good job with that corporation. He's a very dedicated man and he will stand on, for a time at least, as a director of the Crown corporations and he will be available on a consulting basis for whoever replaces him. But Ray Jones is a very good person and I do appreciate the devotion which he gave to that corporation.

MR. LAUK: Who is the responsible minister?

HON. MR. WATERLAND: That announcement as to the responsible minister and replacement for Mr. Jones will probably be made later this week or early next week.

MR. LAUK: But you're still responsible. Can you answer the question?

HON. MR. WATERLAND: No, the appointment will be made by the minister who assumes this. This person will not be working with me.

Interjection.

HON. MR. WATERLAND: Not really.

MR. CHAIRMAN: Order, please.

HON. MR. WATERLAND: The member for Alberni (Mr. Skelly) was talking about the drop in the number of independent sawmilling operations in British Columbia, Yes, that's quite true what he said, that in 1952 we had some 2,500. He called them independent family-operated mills. I think they are more commonly referred to as bush mills, and there is no way that this type of mill, under today's environmental constraints, would be permitted to operate.

MR. CHAIRMAN: Hon. Minister, would you defer for a moment to the House Leader?

HON. MR. WATERLAND: By all means.

HON. MRS. McCARTHY: Mr. Chairman, I wonder if I could just establish that when the minister has completed his statement we move into the estimates of the Department of Mines. Thank you very much.

MR. CHAIRMAN: Thank you. The hon. Minister of Forests.

HON. MR. WATERLAND: Yes, as I was saying, these 2,500 independent sawmills were what was commonly known as bush mills, and under today's environmental restraints there is no possible way that these mills could exist. They wouldn't be allowed to exist. They couldn't exist economically. There are still a number of small independent sawmills around, and everything that I can possibly do I will do to ensure their continuing viability. I have said many times that I believe in the independent operator, the small operator, and I do. But so many of these small operators have a habit of becoming successful and then they become big operators. So this is one of the reasons why the smaller ones have disappeared. More power to them. There's nothing wrong with being successful and growing.

That member also mentioned that in 1952, 62

[ Page 2697 ]

cents of every dollar came from the forest industry. Now because it is 50 cents doesn't mean that the forest industry has not continued to thrive and prosper. I think our whole economy has broadened and that 62 per cent figure is now 50. But it is just because we have had quite an expansion in other industries such as mining, agriculture and tourism.

The member for Columbia River (Mr. Chabot) is very concerned about park creation, as I am. In the southern half of British Columbia the timber supply is totally committed. There is no more wood available. The wood that is committed is committed to people who are operating sawmills, pulp mills, whatever, and every time you take a piece of quota away from these people, you are eliminating jobs. I think we must respect the parks which we now have.

I really think we must be very, very cautious of single-use alienation of land. If we want to have special recreational facilities or usage of areas, this type of thing can be done jointly in a multi-use concept with proper management of our forest resource. This is not an unusual thing; it happens in all parts of the world, and the two can be compatible. I personally don't think that we can afford to alienate to single use much more of our province.

We have quite a substantial amount of parkland and a tremendous amount of wilderness in British Columbia, a tremendous amount of bush, and I know because I was raised there. Let's be very careful about isolating pieces of British Columbia which have the potential for creating wealth, employment and productivity for this province. Let's be careful about tying it up, because as that population is expanding we need more jobs; we need more development for the people. Let's look after what we have and be very careful, very thoughtful, before we tie up too much more land for single use.

I discussed the forest development roads; the British Columbia Forest Service will maintain roads into communities. The primary responsibility for the maintenance of logging roads is with the logging operators; if, however, they are shut down for their logging season in a particular area, we will provide maintenance as best we can. We will be receiving, hopefully, some funding from the Minister of Highways' (Hon. Mr. Fraser's) department for that, but we are concerned about the people in these remote areas. Once again, I'm very sympathetic towards them because most of the places I was raised in never did have roads. We had to go in by fishboat or...not dog team, but pretty funny ways of transportation at times.

AN HON. MEMBER: Burro. (Laughter.)

HON. MR. WATERLAND: The member for Revelstoke-Slocan (Mr. King) was mentioning the first time we had a run at my estimates. I forget what happened then, but it didn't turn out to be too successful. He was talking about the advantages that the forestry-based companies in British Columbia have over those in the United States, and most of the things he said were really not correct. In fact, they were absolutely wrong. (Laughter.)

I have some notes here on it. First of all....

Interjection.

HON. MR. WATERLAND: No, I think he's just misinformed. I don't think that member would deliberately mislead us. He said that British Columbia is closer to markets with their forest products, and that is simply not a fact. British Columbia is the most distant from the market of any major producing area in the world, This is a fact.

Interjection.

HON. MR. WATERLAND: You don't want to hear the answers to the questions you asked?

There is one remark that the member for Revelstoke-Slocan made which I would like to touch on because I think it's very important. He was suggesting cures for the forest industry. One thing he said is that the workers in the forest industry must be aware of the data base to be aware of what is happening in that industry. I think that's a good thing.

We have an example right now, Kootenay Forest Products, where we do have worker-directors, and those men are very aware of the costs of operating that company. However, it is strange that the greatest resistance for the installation of worker-directors at that operation came from the union. The union did not want to have their men involved that closely with the company. I think they were aware of the fact that if they became too aware of just how tight this cost-price squeeze was, they may, instead of asking for, as the member for Revelstoke-Slocan said, a 28 or 26 per cent increase, they may realize that they must take a 10 or 15 per cent cut.

I'm not suggesting that a cut be taken at all, but if the members realize just how close that cost-price squeeze is, I'm sure they're going to have to be much less demanding in wages, because this is one of the areas where we're pricing ourselves out of the market.

I think that covers most of the questions that were raised in the forestry part of my estimates, and I would be pleased now to go into mining.

MR. LAUK: Well, I just rustled myself out of that doze I was in. Mr. Chairman, I am disappointed that the minister is passing the buck on the Ray Williston issue. I don't know whether he's going to be appointed the head of B.C. Cellulose or a mining company or whatever, but it's dodging the issue and

[ Page 2698 ]

it's dodging the minister's responsibility; he has not given an answer. He's being less than straightforward with this committee. I think that's disappointing indeed.

Now what about mining? The minister has brought in the long-awaited taxation bill, and I'm not going to talk to the bill, but it's been couched in such a way that it raises a cloud over this man's ministry. The mining promoters and the coalition government millionaires have tried to hide the real meaning of the taxation policies of mineral resources in this province. If you dig a little and you come down to the hard rock principle of this minister's taxation policy, it's a political payoff.

I better wait for the minister to pay full attention here. Are you listening? Good.

Interjection.

MR. LAUK: Your taxation policy in mineral resources is a political payoff to friends and maybe even some members of this House. The real purpose and the impact of his policy of taxation is not to tax the mining industry, but to subsidize the promoters and the entrepreneurs of the big companies of this province.

Well, let's explore the prospectors and promoters who staked out their claims inside the coalition cabinet already, and they've sold this taxation policy to the Socred caucus.

The day he introduced his bill, for example, Mr. Chairman, the Mines minister said that it was drafted by a four-man committee, only one of whom is a civil servant — his deputy minister. The others were: consultant, Grodon Bell — that's fine, he's well-known in the industry; accountant, George Stickle who said: "You're not going to collect a dime under this Act" — he ought to know, he drafted it; and the third, Mr. Jurgen Lau, a lawyer. Now he certainly knows about and has a deep interest in mining; he is the president of Barrier Reef Resources Ltd. of Vancouver, a mining company no less, and he drafted this bill. What does Barrier Reef do? What does it look for? It's got copper properties and other properties that will be affected by the taxation policies of this minister. Barrier Reef Resources, Ltd.

MR. ROGERS: MPL.

MR. LAUK: MPL Ltd.

AN HON. MEMBER: Et cetera.

MR. LAUK: CIA. (Laughter.)

The conflict of interest, for Mr. Lau is obvious. What is not obvious, Mr. Chairman, is why this minister persists in employing people with conflicts of interest. Remember his TV show admission? He said: "Perhaps I was a little remiss in appointing Fothergill's son to put together an advertising package for the mining industry with public funds." He said that he was a little remiss. Perhaps his portfolio should be renamed under the new Ghengis Khan bill brought in by the Provincial Secretary (Hon. Mrs. McCarthy): we should call him from now on the "Minister of Remiss."

Was Mr. Lau also paid public funds for drafting up the taxation law that has been tabled in this House — a bill that will financially benefit all mining company presidents like himself? The other directors at Barrier Reef Resources are very interesting indeed.

Mr. Chairman, may I have your undivided attention, because I know you may be interested in knowing who the other directors of Barrier Reef are. Mr. Lau is president of a mining corporation and he sits on the board of Barrier Reef with Mr. A.F. Reeve, a securities salesman — well, that's all right — and Mr. R.P. Chilcott, a geologist. So far, not too bad. Then the third director is a Mr. Brian Reynolds. Sound familiar? You might say he's a copper-plated director. Believe it not not, Mr. Lau, the drafter of legislation by message bill coming into this House, and privy to its contents, is not only a mining company president; he also is a close business associate of old B.J., the executive vice-president of Bethlehem Copper and the son of Patrick Reynolds, the president of Bethlehem Copper. A cosy family compact, Mr. Chairman.

HON. MR. WATERLAND: Who's his great grandmother?

MR. LAUK: "Who's his great grandmother?" the minister says. He doesn't understand the conflict in this situation any more than he understood the conflict in Fothergill. We'll put you back on "Capital Coma...Comment, " Mr. Minister, and you'll be able to say: "Well, perhaps I've been again a little remiss."

The man who drafted the legislation sits on the same mining company board as B.J. Reynolds, who is the vice-president of Bethlehem Copper — a cosy family compact that runs one of the biggest mining companies in British Columbia. B.J., the scion, wrote in Bethlehem's last annual report: "The new government, which was elected on December 11, is pledged to repeal the onerous Royalty and Mineral Land Tax legislation imposed in 1974. Anticipated increased selling price for our product" — does he mean the shares or the product? — "and a lower tax structure give us confidence for better earnings commencing 1976." I should hope so. By the way, Bethlehem reported gross earnings of $6.5 million last year.

AN HON. MEMBER: What was their net?

AN HON. MEMBER: After taxes.

[ Page 2699 ]

MR. LAUK: It was $6.5 million last year.

Interjection.

MR. LAUK: Of course, Mr. Reynolds had every reason to be confident, didn't he, Mr. Chairman — if he had a chat with Mr. Lau about the work he was doing for the Minister of Remiss? A little chat — maybe even in the elevator going up to the boardroom. Patrick Reynolds, the father, was succinct when he told the press June 5 — how long ago was that before the tabling of the legislation? — "I think the new legislation is a very positive thing. I'm looking forward to 1977 with great anticipation."

That's certainly emphasizing the cooperation of interests, as young Fothergill might say.

Of course, knowing Fothergill's sensitivity to creation and imagination, he would probably have sung it to the tune of "Oh Rising Star of Bethlehem."

There is a clear and serious case here of conflict of interest in this minister's appointment of mining company presidents to draft major tax concessions to the mining industry. It is imperative the minister table a full disclosure of the background interests of all persons who helped draft that legislation and any future legislation that may be tabled in this House.

AN HON. MEMBER: Hear, hear!

MR. LAUK: A complete list of the Barrier Reef shareholders should be tabled in this House now — the current list of shareholders; a complete list of Bethlehem Copper shareholders — their names, their addresses, their connection should be tabled in this House; a complete list of all mining interests including directorships and shares held by each person who drafted the tax legislation that's before this House, and that may come before this House.

It's been reported by the Vancouver Stock Exchange that since February of this year 1976, during the time that this committee was appointed to draft the legislation tabled in this House, the trading on Bethlehem Copper has been heavy and increasing. This is so serious a breach of proper procedure, Mr. Chairman, that the minister's resignation would be demanded by any Premier with a shred of respect for the parliamentary system.

A taxation message bill drafted by the president of a copper company — it's the most shameless thing I've seen in the history of this province! But I know the coalition cabinet and back bench of opportunists and millionaires won't do so, because this bill will not only line the pockets of mining presidents and their friends with funds which really should go to the provincial Treasury, but there are many members who sit on the government side who draw dividends from mining stocks.

MR. CHAIRMAN: Hon. Member, we are discussing vote 130, not Bill 57.

AN HON. MEMBER: Glad you recognized it, Mr. Chairman.

MR. LAUK: Let's deal with that. Mr. Chairman, thank you for drawing my attention to those people who sit on the government side and who draw dividends from mining stocks. For instance, the first Member for Victoria (Mr. Bawlf) is the name of one shareholder of Charta Mines.

MR. ROGERS: He doesn't take dividends.

MR. CHAIRMAN: Hon. Member, we are discussing the minister's bill.

MR. LAUK: The Member for Vancouver South is a little nervous. He's on the list too; I'll get to him in a moment.

MR. ROGERS: It's in Alberta and it doesn't pay dividends.

MR. LAUK: Bawlf, the first Member for Victoria, is the name of one shareholder of Charta Mines.

The member for Boundary- Similkameen.... No, pardon me. Who is? That's you.

Interjections.

MR. LAUK: He owns shares in Cominco. The Member for Columbia River....

MR. CHAIRMAN: Hon. Member...

MR. LAUK: I'm getting to you in a moment.

MR. CHAIRMAN: ...I fail to see where this has any reference to the minister's office. We are dealing with the vote of the Department of Mines and Petroleum Resources, vote 130, the minister's office.

MR. LAUK: Let me assist you, Mr. Chairman.

MR. CHAIRMAN: Thank you.

MR. LAUK: When we are dealing with the Mines portfolio, and the administration of largesse through the power of the state through this minister, it is appropriate that government back bench and cabinet members alike have all of their holdings exposed to the public. I'm assisting in that process. It is relevant and traditional within the discussion of the estimates of the minister and the relevant department.

MR. CHAIRMAN: Hon. Member, there is a

[ Page 2700 ]

process of disclosure. Would you kindly deal with the minister's...?

MR. LAUK: That's what I'm doing now, thank you, Mr. Chairman.

As I said, the member for Columbia River (Mr. Chabot) owns shares in Kaiser Resources. The Attorney-General (Hon. Mr. Gardom) owns shares in Casino Silver Mines, Dynasty Explorations — copper — and Rocket Mines....

MR. CHAIRMAN: Hon. Member, Hon. Member....

Interjections.

MR. LAUK: Mr. Chairman, you're absolutely wrong. I can explore the shares held by members of the government side. Please do not interrupt me any further unless you have a point of order.

MR. CHAIRMAN: Hon. member, this is not relevant to the administrative responsibilities of the minister.

MR. LAUK: It certainly is relevant to the administrative responsibilities, and I can continue....

MR. CHAIRMAN: Hon. Member, not to the personal holdings of private members.

MR. LAUK: The member for Kootenay (Mr. Haddad) owns shares in Brunswick Mining and Smelter....

MR. CHAIRMAN: The hon. member for Revelstoke-Slocan on a point of order.

MR. LAUK: The member for Boundary-Similkameen (Mr. Hewitt) owns Starletta Mines.

MR. CHAIRMAN: Will you take your seat, please, Hon. Member?

MR. LAUK: The hon. member for North Okanagan (Mrs. Jordan) owns shares in....

[Mr. Chairman rises.]

MR. CHAIRMAN: Hon. Member, will you take your seat, please?

Interjection.

MR. CHAIRMAN: Hon. Member, there is a point of order on the floor. Kindly take your seat.

Interjections.

[Mr. Chairman resumes his seat.]

MR. CHAIRMAN: The hon. member for Revelstoke-Slocan on a point of order.

MR. W.S. KING (Revelstoke-Slocan): Mr. Chairman, the first Member for Vancouver Centre has tied together the connection between the interests and holdings of members of this House and the prerogative and jurisdiction of the Minister of Mines.

The member has indicated that there is a conflict of interest, which is a very, very serious matter in terms of the minister allowing unauthorized people, the numbers of which we are yet completely uninformed.... The members call for the minister to reveal to this House whether there was further conflict of interest through the counsel of members of this House who hold shares in mining properties in this province. Therefore it's clearly in order and it clearly pertains to a possible serious conflict of interest which the minister himself has admitted. So it's completely in order, Mr. Chairman.

MR. CHAIRMAN: Just one moment please, Hon. Member.

MR. S. BAWLF (Victoria): Point of order, Mr. Chairman. The former acting Leader of the Opposition has raised the point that this is reference to shareholdings in mining operations in British Columbia. As I interjected, but perhaps wasn't a matter of record with Hansard, the member for Vancouver Centre has mentioned Charta Mines, my singular holding in the mining field. That is not, Mr. Chairman, a mine which has any holdings in the province of British Columbia. The same would apply with regard to....

SOME HON. MEMBER: He is not in order.

MR. CHAIRMAN: Order, please! This is not a point of order, Hon. Member.

MR. BAWLF: The same would apply to Dynasty.

MR. CHAIRMAN: Hon. Member, this is not a point of order. Please take your seat,

Interjections.

MR. CHAIRMAN: One moment, please. Hon. Member, what is relevant here is the administrative responsibilities of the minister, and unless you can show a direct....

Interjections.

[ Page 2701 ]

MR. CHAIRMAN: Order, please! Unless you can show a direct relationship between other members and the minister, I must ask you to desist. But if you can, kindly proceed.

MR. LAUK: I'll draw this connection: I'd hoped it would be obvious and I am disappointed....

MR. G. HADDAD (Kootenay): Point of order, Mr. Chairman. The hon. member for Vancouver Centre mentioned that the member for Kootenay held shares in a mining company. I have 50 shares in Burns Lake Mining.

Interjections.

MR. HADDAD: Well, but he said I held shares in British Columbia. I haven't.

Interjection.

MR. HADDAD: Yes, he did.

AN HON. MEMBER: Revelation — it's good for the soul.

MR, J.J. HEWITT (Boundary-Similkameen): Point of order, Mr. Chairman. I think the record will show that the hon. member mentioned that I held shares in Cominco. He is incorrect.

AN HON. MEMBER: I bet you wished you'd done your homework.

MR. LAUK: The Member for Shuswap (Mr. Bawtree) holds Cominco shares. The member for Boundary-Similkameen owns Starletta Mines. Now before I continue with the litany, Mr. Chairman, let me put it to you this way: a minister of the Crown is in charge of drafting legislation, either by introduction in this House of his own movement or by a message from His Honour the Lieutenant Governor.

When it is a message bill it affects the purse strings, if you like, of the Crown, and also affects matters which should come by message from His Honour the Lieutenant-Governor. In so doing, certain taxation measures, or measures that will affect the public in a taxation way, one way or the other, or certain information, if made privy to certain people who could benefit in the private sector of the economy, is improper.

It is the proper administration of the minister to make sure....

MR. ROGERS: In Alberta?

MR, LAUK: I'll get to Alberta in a moment, my friend; I'll give you all the rope you need.

Interjections.

MR. CHAIRMAN: Mr. Member, are you suggesting that any member has a direct pecuniary interest — within the medium of standing orders?

MR. LAUK: I'm not here to answer those questions. I drew it to your attention and now I'm drawing it within the administration of this minister. Don't play games with my speech, either with or without the help of the table. I'm telling you now: this is within the administration of this minister, and whether or not I'm making other charges is another issue. If you'll let me finish my speech you'll know full well what I'm getting at.

Interjection.

MR. LAUK: Utter nonsense! This is a deliberate attempt to protect the front bench of that government.

MR. CHAIRMAN: Hon. Member, I'm not trying to protect anyone.

MR. LAUK: Well, let me get on with my speech.

MR. CHAIRMAN: Hon. Member, the Chair has to have the information in order to make a proper ruling.

MR. LAUK: I'm telling you what the information is: the administration of this minister is that he must draft legislation that is completely above reproach, and that no person who may derive pecuniary interests for the private sector of the economy has prior knowledge or assisted in the drafting of that legislation. I'm showing you, by showing you the interests of the various members of the benches of this government, how that conflict of interest can be developed if it is improperly used.

Now you know: Boundary-Similkameen — Starletta Mines. Let's deal with Charta Mines.

Interjection.

MR. LAUK: He said it's Alberta. Charta can come into B.C. tomorrow. And I say that they would want to come into B.C. tomorrow if they passed the legislation that's already been tabled, for example. Charta negotiates from time to time with properties in the Yukon and Northwest Territories and in British Columbia. What kind of nonsense is the first Member for Victoria (Mr. Bawlf) trying to put over in this House?

[ Page 2702 ]

AN HON. MEMBER: It's only a tax for B.C.

MR. LAUK: Now the member for North Okanagan (Mrs. Jordan), who's not in her seat, Giant Mascot Mines; the member for Coquitlam (Mr. Kerster), Caroline Mines; the member for — get this — the first member for Vancouver–Point Grey, the Minister of Education (Hon. Mr. McGeer), Corrie Copper and Stanrock Uranium. What about the Minister of Consumer Services (Hon. Mr. Mair)? Rio Plata Silver Mines. What about the member for Dewdney (Mr. Mussallem) ? Where is he, that distinguished Whip? Silverquick Mines and Chromex Nickel. What about the Minister of Economic Development (Hon. Mr. Phillips) ? Here's a good one for him — Cry Lake Minerals. He's been a crybaby ever since he took office. Cry Lake Minerals — but he won't be crying when the new legislation makes his stocks worth a little bit more.

What about the member for Vancouver-South (Mr. Rogers)? Charta Mines again. He's always involved in the same operations as the first member for Victoria (Mr. Bawlf) . Here's a good one for the member for Vancouver South. He owns shares in International Mogul Mines and in Mexxon Mines and in Colt Resources, and they don't all produce sugar.

What about the second member for Vancouver South (Mr. Strongman) ? International Nickel....

MR. CHAIRMAN: The hon. first member, on a point of order.

MR. LAUK: He's not arguing under section 42 of the rules of order.

MR. CHAIRMAN: Hon. Member, I must hear him to know whether it is a point of order. Would you kindly take your seat?

MR. ROGERS: Mr. Chairman, the member is referring to stocks that are listed on the public officials' disclosure form in his reference, and one of the things that form does not show is those stocks in which the members of the government benches hold short positions, and many of us do hold short positions in mines.

MR. CHAIRMAN: Hon. Member, that is not a point of order.

MR. D. BARRETT (Leader of the Opposition): I would ask the Chair, perhaps, Mr. Chairman, to clarify that if any member feels, under our standing rules, that a statement is incorrect, it is their ability after a member has spoken to rise and responsibly make that point. I would ask the Chair to assist those members, since points of order, as I'm dealing with a point of order, are the only means of interrupting the member.

MR. CHAIRMAN: Hon. Members, the point is well taken. If you feel that you've been incorrectly quoted or done by, would you please wait until the member's finished speaking?

MR. LAUK: My very good friend, the second member for Vancouver South (Mr. Strongman), very quiet, reserved, and the owner of shares in International Nickel, Placer Development, Fort Steel Mines and Sapawee Gold Mines.

What about the administrator of largesse to the poor people of this province? What about the protector of the poor? What about the man that is holding himself up to be the greatest thing that ever happened to the Department of Human Resources, the minister himself (Hon. Mr. Vander Zalm), who owns shares in Nicola Copper Mines?

[Mr. Schroeder in the chair.]

Interjections.

MR. LAUK: Nicola, what is it, nickel or copper? Nicola Copper Mines. What about the Minister of Mines (Hon. Mr. Waterland)? Silver City Mines. He owns shares in Silver City Mines — the old kid from the bush.

There's the list, Mr. Chairman. The Chair has taken on different proportions again. I was just going through the list, Mr. Chairman, of people who owned various shares in various mining companies who could directly or indirectly benefit from the taxation policies of the Minister of Mines, including himself — 16 members of the government, including six cabinet ministers, who stand to benefit financially by voting for taxation legislation, including the Minister of Mines himself. That's something the public should think about.

This government claims the royalty system is bad. Well, if it is so bad for the public why doesn't this government ban private royalties too? I mentioned Bethlehem Copper. Bethlehem Copper, and you remember Bethlehem Copper. Patrick Reynolds is the president and Brian Reynolds is the vice-president and he sits on the board with Jurgen Lau, who drafted the Tax Act. Isn't that cute? Bethlehem Copper, for instance, owns some mineral land that it has turned over to Valley Copper Mines, a Cominco subsidiary, to develop. Under the agreement, Valley Copper pays to the landowner, Bethlehem Copper, a share in Valley Copper equity, an option for a minority working interest in the development and — do you get this? I'll just wait for you to finish yawning, Mr. Chairman — a royalty payment from Cominco to Bethlehem. When Bethlehem wants a fair return on its own mineral land, it imposes a royalty

[ Page 2703 ]

on the developer. So when Bethlehem's executives and the rest of the mining industry argue against a royalty for public mineral lands, the only conclusion is that they don't want to see a fair return to go to the public treasury. That's the only conclusion that can be drawn.

There are many other comments, Mr. Chairman, that I will make in relation to the taxation bill itself. It should be discussed under the principle of that bill and not under estimates, but I would like to point out to you, Mr. Chairman, that this minister has involved himself in a network of conflict of interest since he was appointed. Fothergill, he was dragged before the public and had to admit that he'd made a childish mistake, and now he's involved a man to draft taxation legislation that will directly benefit himself and his friends — Mr. Lau, and his friends, and why? That's the big question. Why?

I repeat my charges, Mr. Chairman, and I ask the minister, for the public good and for the good of this chamber and for his government's sake, to file with us now a complete list of Barrier Reef shareholders, a complete list of Bethlehem Copper shareholders — the current list; a complete list of all mining interests including directorships and shares held by each person who drafted the bill already tabled and any other taxation legislation you are planning. It is a serious breach of responsibility on the part of the minister. It's an abrogation of responsibility for the Crown and the government; it should be heartily condemned by the public and certainly by this chamber.

HON. MR. WATERLAND: Mr. Chairman, I won't stamp my feet and sulk like the former speaker did. Silver City Mines, my only holding in the mining industry, is much like the holding that the former Premier had when he made his first disclosure. It's a dog. It has a small silver prospect in the Yukon Territory and absolutely no mining interest in British Columbia.

Interjection.

HON. MR. WATERLAND: To my knowledge, Mr. Chairman, this company has no holdings in British Columbia. My knowledge of it is that it does not have any. It is presently worth 3 cents a share. Anybody who would give me 3 cents is welcome to it.

MR. LAUK: It'll be worth a lot more when that bill of yours passes — that's the point. Don't you understand that?

HON. MR. WATERLAND: Mr. Chairman, will you ask the member there to contain himself?

Mr. Jurgen Lau resigned as president of Barrier Reef in December. Mr. Jurgen Lau is a professional geologist; he is a lawyer. He worked on the tax committee to do research into the level of taxation which could be borne by the mining industry while still maintaining a viable industry. That member well knows that legislation is drafted by legislative counsel. Mr. Lau had nothing to do with the drafting of that legislation. Mr. Lau and the other people who worked on that committee presented a report to this minister. This report was then discussed in our planning and priorities committee. In our cabinet the levels of taxation were decided. This information was given to legislative counsel, and that is where the bill was drafted.

MR. BARRETT: Are you telling us that Lau did not see the draft of this bill?

MR. CHAIRMAN: Order, please!

MR. BARRETT: Is that what you're saying? He did not see the draft of this bill?

MR. CHAIRMAN: Order!

MR. BARRETT: Is that what you're saying? Did he see the draft of the bill or didn't he?

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

HON. MR. WATERLAND: Mr. Chairman, further to Mr. Jurgen Lau's relationship with the government, Mr. Lau was hired by the NDP government in 1973 because of his knowledge of the legal aspects of the mining industry, the same reason for which I hired him. He was hired to work on a coal Act, which he did.

MR. BARRETT: Did he see the draft of the present bill? Yes or no.

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

HON. MR. WATERLAND: While Mr. Lau did draft the Coal Act, he did not draft the Mineral Resources Tax Act. Mr. Lau is a professional person; he knows what he was hired for. I'm sure that that member really does not intend to question the professional ethics of that well-respected man in the industry who did a very good job for us, along with others — Mr. Stickle, Mr. Gordon Bell...

MR. BARRETT: Did he see a draft of the bill?

HON. MR. WATERLAND: ...and my deputy minister, Dr. Jim Fyles.

[ Page 2704 ]

MR. BARRETT: Did he see a draft of the bill?

HON. MR. WATERLAND: The NDP, Mr. Speaker, so mistrusted the mining industry...

MR. LEA: Did he see a draft of the bill?

HON. MR. WATERLAND: ...that when they began to bring about their legislation they could not believe the data supplied to them by the mining industry. As a result they brought in legislation which was completely disastrous to that industry. Perhaps, Mr. Chairman, the reason was that that former Premier had been so stung by buying a dog that he wanted to get his revenge on the mining industry. It appears to me that was the only possible reason he could have for bringing in that type of legislation.

Mr. Chairman, that former Minister of Mines set up a commission to look into aspects of taxation in the mining industry. One of his members was Mr. Monty Alton, from one of the hierarchies of the United Steelworkers of America. What kind of political payoff was that, Mr. Former Minister?

HON. D.M. PHILLIPS (Minister of Economic Development): Why did you order the files removed to his basement when the legislation was in them?

MR. CHAIRMAN: Order, please!

HON. MR. PHILLIPS: Why did you order the files removed to his basement?

MR. CHAIRMAN: Order, please! We are on vote 130.

HON. MR. WATERLAND: I would hope someday, Mr. Chairman, that the legislation which we have got in and which will be debated in this House will have a beneficial effect on the mining industry for the benefit of all of the people, including the former Premier, who someday might get back some of his wallpaper which he probably hangs in his bedroom now.

MR. CHAIRMAN: Order, please!

MR. BARRETT: Did he see a draft of the bill or didn't he?

HON. MR. PHILLIPS: Why did you order the mining legislation that was in those files removed to his basement?

MR. CHAIRMAN: Order, please!

MR. BARRETT: Shame on you!

HON. MR. PHILLIPS: Watergate! Cover-up!

MR. CHAIRMAN: Hon. Members, may I remind all of the committee members that in committee each person can have as many opportunities to speak as they wish. All they need to do is to rise in their place and address the Chair. The member now recognized is he first member for Vancouver Centre.

MR. LAUK: Mr. Chairman, the minister of fertilizer over there just cross-commented that the former Premier ordered me to take files down in my basement. It's untrue. Secondly, there was no legislation drafted in those files.

HON. MR. PHILLIPS: Prove it!

MR. LAUK: Are you still beating your wife? (Laughter.)

HON. MR. PHILLIPS: Prove it!

MR. LAUK: Prove it? Are you still beating your wives? (Laughter.)

MR. CHAIRMAN: Order, please! Hon. Members, let's move to vote 130.

MR. LAUK: Mr. Chairman, I don't want to encourage that member to get thrown out of the House again, but I would like to say that I have referred to him as the power behind the throne, the Cardinal Richelieu of this government. I now change that to the jester — the Clown Prince.

Interjections.

MR. LAUK: I'm referring to the minister of hot air and fertilizer.

Mr. Chairman, just to give you an example of the kind of flim-flam and the red herrings that are being dragged across this carpet, this minister will not answer one simple question. He's got the minister of defence on the front bench desperately trying to protect this young minister from an attack by this little opposition just trying to get the truth. That's all — just trying to get the truth. I asked the Minister of Mines and Petroleum Resources one simple question: did Jurgen Lau see the final draft of the taxation legislation now known as Bill 57? Did he or did he not see any draft of that legislation? If you're not prepared to say that in this chamber, my charges stand — and you stand condemned of impropriety and conflict of interest.

MR. CHAIRMAN: Would the hon. member please address the Chair?

[ Page 2705 ]

MR. LAUK: I'm sorry, Mr. Chairman. That's the question I have of the minister. Can he answer that question? If he says otherwise, we're in a different position, aren't we? Why can't the minister stand up, Mr. Chairman, and say: "It's all right. Jurgen Lau just gave me general information and from there we went to draft this bill." That's fine. But if Mr. Lau was privy to a draft of the legislation, the charges I have made in my opening remarks in his estimates are true, and he should resign.

As far as the first member for Victoria (Mr. Bawlf) is concerned, he said Charta Mines operates in Alberta. Well, the Financial Post Survey of Mines, 1976 indicates Charta Mines holds mining claims in Bridge River area, Lillooet mining division, British Columbia.

SOME HON. MEMBERS: Oh, oh!

MR. LAUK: It's news to him. And what about the Minister of Mines himself with Silver City Mines? What did he say about his mining company?

MRS. WALLACE: It's a dog.

MR. LAUK: It's a dog? Oh, I see. Well, this dog owns 87.5 per cent interest in Pan-Canadian Petroleum, in United Pemetex Ltd., which holds copper prospects — 60 claims, two groups, White River area, Whitehorse, developed in previous years in the area. Its head office is at 580 Howe Street, Vancouver, B.C. It's heavily involved in the mining industry.

He says it's a dog. Think of how much that dog of his is going to be worth after his mining legislation passes the House.

AN HON. MEMBER: The dog has a crooked hind leg.

Interjection.

MR. LAUK: It won't be after this mining legislation passes the House.

May I point out, Mr. Chairman, in the text of my remarks I stated that Bethlehem Copper's trading turned very heavy in February when this committee was formed to draft the legislation. What more can be said? Will the minister answer that question? Did Mr. Lau see a draft of the legislation before it was introduced by message in this Legislature?

HON. MR. WATERLAND: Mr. Chairman, that member, I believe, must take a course in geography. He must be aware that Whitehorse is in the Yukon Territory, not British Columbia.

MR. LAUK: That's correct.

HON. MR. WATERLAND: Mr. Chairman, when this legislation was drafted it was a message bill. Two copies were presented to me, both of which stayed in my custody until such time as they were introduced in this House.

MR. LEA: What about the draft?

MR. BARRETT: I think it would assist the debate and my very good friend and the minister if we have a clear-cut answer to a very simple question. Are you saying that no one else saw drafts of this legislation other than you? Are you saying to this House that no one else saw a draft of this legislation other than yourself — the staff? Yes or no — did Mr. Jurgen Lau see a copy of this legislation in draft before it was presented in this House? Yes or no. That would assist us immeasurably in getting on with this debate.

MR. KING: Come on, you can answer that. That's your responsibility.

MR. BARRETT: Mr. Chairman, I want to avoid a repetitive, unnecessary, perhaps inflammatory debate. It's a very simple question. If the minister doesn't answer, is he indicating perhaps — through you, Mr. Chairman — that he doesn't know who saw the draft bill? And I don't want that left in the press's mind, more than anyone else. No, because they might go out saying he didn't answer the question and therefore he didn't know whether or not somebody saw the draft of a message bill.

We need to be assured one way or the other. Did Jurgen Lau see a draft of this legislation which was later presented as a message bill or did he not see a draft of this legislation? That's a very simple question. How tight is your security? Did he see a draft or did he not?

Interjections.

MR. BARRETT: Shhh!

MR. CHAIRMAN: Order, please.

Interjections.

MR. BARRETT: If I make the accusation here to at minister that Mr. Jurgen Lau did see the legislation in draft before it was presented to the House, is he in a position to deny my allegation?

MR. LAUK: Mr. Chairman, Mr. Lau did see a draft of that legislation.

MR. BARRETT: Shame!

MR. LAUK: Mr. Lau did see a draft

[ Page 2706 ]

of that legislation. He drafted it.

MR. BARRETT: And you should resign.

MR. LAUK: Mr. Chairman, he drafted it.

MR. KING: You have to resign.

MR. LAUK: I make that statement in committee today. Mr. Lau drafted that legislation and he saw a draft of that legislation before it was produced by message in this Legislature.

MR. KING: Resign!

MR. BARRETT: Put your seat up against it. Did he see a draft or did he not see a draft of that bill?

MR. CHAIRMAN: Order, please! The member for Vancouver Centre has the floor.

MR. LAUK: If my statement is correct, I would expect the minister to resign.

MR. BARRETT: This is a very serious matter. The member's accusation is now on record that Mr. Jurgen Lau did see a draft of this legislation. It is a very serious charge, one of the most serious charges I've heard in my years in this House, and I ask the minister either to stand up and refute that charge or admit that Mr. Jurgen Lau was actually there at the meeting where a draft was discussed and he did see a draft — one way or the other, Mr. Minister.

You have a responsibility beyond this Legislature, to all the people of this province to let them know whether or not outsiders were present at a meeting where drafts of this legislation were discussed. A very serious charge has been made. Silence is not the answer. If the member is incorrect, stand up and say so; if the member is correct, stand up and resign — one way or the other.

MR. CHABOT: Mr. Chairman, I....

Interjections.

MR. CHAIRMAN: Order, please. We've recognized the member for Columbia River.

MR. CHABOT: I think the member for Vancouver Centre (Mr. Lauk) has had an opportunity to ask questions. I think...

MR. LEA: No answers.

MR. CHABOT: ...that as an elected member in this House I have a right to stand in my place without the opposition suggesting for one moment that I don't have that right to express my concern regarding what's happening in British Columbia in the mining industry. I want to compliment the minister on the very positive steps he has taken vis-à-vis getting the mining industry going again, because I know that the member for Vancouver Centre, who took over from the former member for Kootenay (Mr. Nimsick) who was Minister of Mines, had no confidence whatever in that Minister of Mines.

He made the statement that the previous Minister of Mines went 100 miles an hour in one year and ruined the mining industry. That's what a member, who is supposed to support his colleague in the cabinet, had to say about a former colleague of his: that at 100 miles an hour in one year, he was responsible for the destruction of the mining industry in British Columbia. That's very indicative of what really took place, and I couldn't have said it any better than the former Minister of Economic Development (Mr. Lauk) said it, Mr. Chairman.

But what I want to discuss very briefly is my concern about the protection of class A parks in British Columbia, and I hope that never again will we see orders-in-council such as was passed on July 25,1974...

Interjections.

MR. CHABOT: ...by the NDP. Order-in-council 2465 permitted Silverstar Mines Ltd. to explore for undeveloped minerals on certain recorded and Crown-granted mineral claims within Kokanee Glacier Park. I have heard a lot of pious and pompous statements by that group over there about the protection of parks in British Columbia; however, they had the gall to present an order-in-council in July allowing a mine to explore and develop within one of our class A parks in the Nelson area, and then they suggest that they are concerned about parks. All I want to say, Mr. Chairman, is that I hope we won't allow any further mines or any further exploration companies to explore and develop, or attempt to develop, mineral claims within class A parks in British Columbia such as was done under the former government.

MR. LAUK: Now back to the point, Mr. Chairman. The Leader of the Opposition and myself have asked the Minister of Mines on several occasions: did Mr. Lau see a draft — any draft — of the proposed Mineral Resource Tax Act? It's already been tabled in this House. This is an issue of grave responsibility. The minister stood up and he implied in this House that, "no, he did not, " because the minister had only two copies of the message bill. I got up and said that the minister was not telling the truth because I said that Mr. Lau saw a draft of the legislation. That's what I said.

[ Page 2707 ]

The minister has chosen to stay in his seat. Why has the minister chosen to stay in his seat?

I will rephrase the question for the minister. Maybe he can answer this question. Did Mr. Lau attend a meeting with others in Room 223 of the parliament buildings here in Victoria at 2 p.m. on Thursday, May 13, 1976, to discuss the latest draft of the proposed Mineral Resources Tax Act?

HON. MR. WATERLAND: Mr. Speaker, I don't believe I attended a meeting in Room 223 in which legislation was discussed.

MR. LAUK: That's not the question.

Mr. Chairman, that minister has consistently, during his term of office, shuffled the buck over to somebody else. He is the responsible minister of his department. He must answer for his civil servants and he must answer for himself. He's in charge. You're not a mining inspector down in Lillooet, you're a minister of the Crown,

I will ask this question again, Mr. Chairman. You have your deputy minister right beside you. You have other officials at your beck and call.

MR. CHAIRMAN: Please address....

MR. LAUK: I'm sorry, Mr. Chairman.

The minister has these officials at his beck and call. I ask the question of the minister again. Did Mr. Lau attend a meeting to discuss the latest draft of the proposed Mineral Resource Tax Act in Room 223 in the parliament buildings here at 2 p.m. on Thursday, May 13, of this year? Nothing could be more explicit than that, requiring an explicit answer. It's within the purview of the knowledge of the minister of the Crown.

MR. BARRETT: Mr. Chairman, must we interpret the silence on this question to mean that the minister doesn't know?

Do you know, Mr. Minister, whether or not he did see a draft at such a meeting, or is this an allegation that has no basis in fact?

Does the minister know whether or not Mr. Lau saw a draft of the bill?

Do you know, Mr. Minister, through you, Mr. Chairman?

Interjections.

MR. CHAIRMAN: Order, please! The Leader of the Opposition has the floor.

MR. BARRETT: I ask you again through you, Mr. Chairman: does the minister know whether or not Mr. Jurgen Lau saw a draft of this legislation? Does he know? Is he in a position to say "absolutely no, " "absolutely yes, " or "I don't know"?

Silence, Mr. Chairman, is what concerns us. Before we go any further, Mr. Chairman, we need to know the answer to that question. This is a very serious matter, Mr. Chairman.

Mr. Chairman, does the minister know whether or not Mr. Lau saw a copy of that bill?

Would it be wrong, Mr. Chairman, if the consultant did see a draft of that bill? Yes, it would be. It certainly would be.

Would the minister resign if he found out that Mr. Lau had indeed seen the draft of that bill and placed himself in a terrible position of a charge of conflict of interest because of the minister's — or, if he wishes to accuse his department — his department's lack of propriety? We need to know, Mr. Minister. We need to know now. Yes or no, Mr. Minister. Please stand up and tell us.

MR. CHAIRMAN: Let me just take the opportunity to remind the hon. members that in committee we, as individual members, have the prerogative to ask questions either one at a time or a dozen at a time. It is also the prerogative of the minister to choose when he wishes to answer the question, or if, indeed, he wishes to answer the question at all. We cannot insist on an answer. I think that the hon. members recognize this.

HON. MR. WATERLAND: Mr. Speaker, that Leader of the Opposition is doing his utmost to create some terrible conflict of interest here. He says that if anyone outside of the government sees a message bill as it is drafted or is involved in the drafting of it something is wrong. That former Premier of this province knows that his Mines department hired Mr. Lau to draft a message bill entitled Coal Act, 1973. If there is wrongdoing by having outsiders seeing drafts of message bills, then that Premier was a party to that type of thing.

MR. BARRETT: Mr. Chairman, I ask the minister to state clearly to this House whether to his knowledge, as a responsible minister of the Crown, Mr. Lau saw a draft of this legislation before it was sent to this House. Yes or no, Mr. Minister, through you, Mr. Chairman.

HON. MR. WATERLAND: Mr. Chairman, I don't know if it's in order for me to ask that member a question or not, but I ask him again: is it wrong for someone outside of the government to see a draft of a message bill?

Interjections.

MR. CHAIRMAN: Order, please! Hon. Members, we can only recognize one member at a time.

[ Page 2708 ]

Interjection.

MR. CHAIRMAN: It is very difficult to hear the member who has the floor.

The Leader of the Opposition.

MR. BARRETT: When it comes to my estimates I'll answer the questions. Right now I'm asking the minister the questions.

Mr. Chairman, I ask the minister again: to his knowledge did Mr. Lau see a copy of this legislation in draft before it was presented to the House? Yes or no. Whether you see nothing wrong with it or see something wrong with it is irrelevant. I'm asking a question of fact, not a question of opinion.

Did he see the draft or did he not see the draft, through you, Mr. Chairman? Do you know whether or not he saw a draft?

Mr. Chairman, I am asking a question of fact of a minister who chooses not to answer. Will his silence be interpreted that Mr. Lau did not see a draft? Will his silence be interpreted that he did see a draft? Or will his silence be interpreted that he doesn't know.

Do you know or don't you know, through you, Mr. Chairman, whether or not Mr. Lau saw a draft of that Act? Do you know the answer to that question, through you, Mr. Chairman?

Mr. Chairman, I don't understand this reticence to answer. I think it's a matter of concern to me and to the Chair to proceed with estimates. We can't proceed with estimates on a matter of silence. It's a very simple question.

MR. CHAIRMAN: Hon. Member, he cannot answer as long as you have the floor.

MR. BARRETT: That's right. Well, I'm more than anxious to yield the floor to him if that's what he's indicating. If that is what you say, Mr. Chairman, I now yield the floor to the minister. Thank you for your assistance.

Oh, wait, Mr. Chairman — you've been misdirected! Oh, Mr. Chairman, I thought that you....

Interjections.

MR. CHAIRMAN: Order, please! The Leader of the Opposition continues.

MR. BARRETT: Mr. Chairman, I was under the impression that you were sending a signal to me that the minister wanted to answer my questions.

MR. CHAIRMAN: Just reminding you of the rules.

MR. BARRETT: Oh, I'm aware of the rules. I was thanking you for your assistance. I'm happy to yield the floor to the minister.

Interjection.

MR. BARRETT: My friend, I will reserve my comments about you to a later, more appropriate time. If you think you're defending the minister from a very simple question, perhaps you'll answer. Do you know whether or not someone else saw a draft of this bill? Do you know? Does the cabinet know?

MR. CHAIRMAN: Order!

MR. BARRETT: I'm directing this question to the Minister of Mines and Forests, a position that would have been more skillfully handled by people who have more knowledge but who were overlooked because they didn't come from other political parties. Nonetheless, he is the minister. He has been chosen by the Premier. The Premier is responsible for all cabinet ministers' actions. His silence condemns not only himself but the Premier as well. He has an obligation to tell us, the Premier and the people of this province whether or not Mr. Lau saw a copy of the text of this legislation. Yes or no, Mr. Chairman. That is what we're looking for — yes or no.

Interjections.

MR. BARRETT: Do you know? Do you know whether or not Mr. Lau saw a draft of this legislation? It's very simple to clear it up. Do you know or don't you know, through you, Mr. Chairman?

Does the minister want to answer now? Has he not heard the question? Is he confused by the question? Is it difficult for him to interpret the question?

I'll give all the help that he needs. I'll say it slowly, through you, Mr. Chairman — once over again, slowly, in estimates, where we have to find out what's going on. Once over, slowly, through you, Mr. Chairman: Did Mr. Lau see a draft copy of this legislation? Did he not see a draft copy of this legislation, through you, Mr. Chairman? Did he know? Does the minister know? Yes or no, Mr. Minister.

Do you understand the question, through you, Mr. Chairman? Do you understand the question? Let us establish that fact first. Yes or no. Do you understand the question?

MR. CHAIRMAN: Order, please. The first member for Victoria on a point of order.

MR. BAWLF: Mr. Chairman, albeit a neophyte here in this House, nevertheless I understand the standing orders of this House to look rather badly on the question of tedious and repetitious debate.

[ Page 2709 ]

AN HON. MEMBER: Then sit down.

MR. BAWLF: Mr. Chairman, I find the antics of rant-and-rave over here very tedious. I would suggest that a ruling is in order in that regard, because I've heard the same question repeated innumerable times.

Interjections.

MR. BAWLF: Mr. Chairman, further on that point of order, it is not the obligation of the minister to answer any questions.

MR. CHAIRMAN: Order, please. The member for North Vancouver-Capilano on the same point of order.

MR. GIBSON: On the same point of order, Mr. Chairman, and just for the benefit of the hon. member for Victoria (Mr. Bawlf), who I think is new to the House, I would remind him of a couple of times in the past when concern has been expressed by members of the government with respect to tedious and repetitious debate. One of those times was just previous to the ejection from the House of the now hon. Leader of the Opposition (Mr. Barrett) in some questioning that preceded the 1972 election. Another time it happened a couple of years ago, but perhaps I won't go into that in too much depth.

MR. CHAIRMAN: May I just express an opinion on the previous point of order, and that is that the member may be becoming tedious and repetitious. However, the Chair must give adequate opportunity to ask questions and we must also give adequate opportunity for the minister to answer questions. However, he may choose not to do so.

The first member for Vancouver Centre (Mr. Lauk) had the floor just while I was interrupting him.

MR. BAWLF: Further on a point of order, Mr. I Chairman, I've been watching the clock, and I find that the same question has now been asked here for over half an hour. Mr. Chairman, if that isn't tedious and repetitious, I don't know what is.

MR. LAUK: Have you ever heard one of your speeches?

MR. BAWLF: The minister has replied to that question on several occasions.

Interjections.

MR. CHAIRMAN: Order, please. Your point is well taken.

The first member for Vancouver Centre.

MR. LAUK: Mr. Chairman, I repeat the question that I asked the Minister of Mines, which is within the purview of his knowledge — or he can get up and say, "I don't know whether this is true or not," and this is not the point that we are trying to get across. Can the minister confirm that Mr. Jurgen Lau met with others to discuss the latest draft of the proposed Mineral Resources Tax Act in Room 223 of these parliament buildings at 2 p.m. on Thursday, May 13, of this year?

All the minister has to do, Mr. Chairman, is answer the question. He can either say, "Yes, I can confirm that," or "No, it is not true," or "I don't know whether it's true or not." Can the minister answer that?

MR. CHAIRMAN: I believe, Hon. Member, that the minister does have the question. Perhaps the member would like to proceed to....

MR. LAUK: The minister is up.

HON. MR. WATERLAND: Mr. Chairman, I do not know whether Mr. Lau met in Room 223 on May 13. I cannot confirm that. I do not know whether he met on that day with any members of the government or the tax committee or anyone else.

MR. LAUK: Mr. Chairman, I understand that a Mr. Ross is the head of the mineral taxation division of his department. Is that correct? Mr. Chairman, I believe that's true.

Was he or was he not working together with Mr. Cross, QC, of the Department of the Attorney-General, and other government officials on the drafting of the legislation now known as Bill 57? Can he confirm that?

You don't know? The minister indicates he doesn't know! That's the most incredible admission I've ever seen in my life! Who on earth drafted this legislation?

He doesn't know, he says. That can't be believed, Mr. Chairman. That simply can't be believed.

MR. LEA: Was he in charge of the bill?

HON. K.R. MAIR (Consumer Services): Who drafted the Coal Act?

MR. LAUK: Would somebody take Charlie McCarthy out to the washroom? (Laughter.)

Mr. Chairman, the minister's responsibility is clear. There is a clear conflict of interest. Mr. Lau saw a draft of the legislation. Mr. Lau helped draft the legislation. He will not answer any questions. I must emphasize that Mr. Lau is now a mining president as well as a consultant. He didn't help to draft legislation to increase taxation; he helped to draft

[ Page 2710 ]

legislation that would decrease taxation and increase income to mining companies. That's the conflict of interest. Surely the minister understands that. Surely he grasps that. Mr. Lau assisted in putting together legislation that increases the benefits of the mining companies of which he is very much a part.

Did Mr. Lau meet with other officials in his department, in the Attorney-General's department, to discuss a draft of the Mineral Resource Tax Act known as Bill 57? Can he confirm that? Will he confirm that to this committee?

This is the most incredible abdication of responsibility I've ever seen, Mr. Chairman. I can see now that there is a great deal more to the Mines estimates that must be discussed by the official opposition — a great deal more. We've seen a minister here who has demonstrated, in the short period of time that he's been minister, a complete misunderstanding, to put it politely and charitably, of what a conflict of interest situation is — a complete misunderstanding.

First of all, there was $1,000 of public money given to his executive assistant's son to help tout the mining companies — the major cartels in the province — and now we have a man who is very much a part of the private mining industry drafting his legislation for him.

He said — you know, Fothergill says — "it's a cooperation of interest." This is more than a cooperation of interest. This is a conflict of interest situation that raises a cloud over his ministry, and he doesn't answer the questions.

Mr. Lau is still a director of Barrier Reef. The minister has stated he was not.

Interjection.

MR. LAUK: Oh, he said he wasn't the president. You're playing games with the truth, Mr. Minister. You're playing games with the truth, Mr. Minister.

SOME HON. MEMBERS: Oh, oh!

MR. LAUK: He comes into this House, Mr. Chairman, and he says he doesn't know whether it was in room 223. He doesn't know whether it was exactly at 2 p.m. or whom he met with. He can't confirm that, he can't confirm that and after all he's no longer the president of Barrier Reef. Now we find out he's a director of Barrier Reef and he says, "Oh, a but I said 'no longer the president'." You're playing games with this committee and you're playing games with the truth. You stand up and you tell the truth.

MR. CHAIRMAN: Order, please. Please address the Chair, Mr. Member.

MR. LAUK: He said he resigned as president and we find out that he's still director of Barrier Reef. You know what you mean when you stand up in this House and you say: "Well, I can't really confirm." Then he said — "Well, I had two copies of the message bill and I didn't let them out." He's giving the impression that what we're saying is not true. He's twisting facts. He's implying things that are not true. That's what the minister's doing.

MR. CHAIRMAN: Hon. Member, may I just caution you that the approach that you have taken toward the minister's actions and statements is very, very close, very borderline, on attributing to the minister untruthful statements, and, as a member, you know that we cannot do that. I must caution you that the debate is borderline. Please change either your subject material or your approach.

MR. GIBSON: Mr. Chairman, I think perhaps it might be good to put on record why these questions are important and why it seems to me that it would be a good thing for this House and a good thing for the minister and a good thing for the government if he could answer them.

HON. MR. MAIR: Are we going to get a lecture now?

MR. GIBSON: You're not going to get a lecture, Mr. Minister of Consumer Services. You're going to get a small exposition of something that you should know, not only as a minister of the Crown but as a member of the legal profession,

Interjections.

MR. GIBSON: You should know.

MR. CHAIRMAN: Please address the Chair, Hon. Members.

MR. GIBSON: You know, Mr. Chairman, that minister's been sitting here in this House for the last half hour screaming across the floor: "What about the Coal Act? What about what he did with the Coal Act?" Do you think two wrongs make a right? Is that the kind of minister you are?

MR. CHAIRMAN: Order! Order, please. Please address the Chair.

MR. GIBSON: That's a rotten kind of philosophy, Mr. Chairman, and to the extent that that represents the philosophy of that government, that's a rotten government.

Interjections.

[ Page 2711 ]

AN HON. MEMBER: A rotten government.

MR. GIBSON: Mr. Chairman, a taxation bill is the same as a budget bill. The identical rules of procedure and the identical rules of integrity in the parliamentary system apply to a taxation bill as to a budget bill.

The bill, the drafting of which we have been discussing, is a taxation bill. It is a bill which will change the taxation method in the metallic mining industry in British Columbia. It is a tremendously important piece of legislation. It is a legislation that has tremendous financial ramifications. Hon. members in this House may disagree as to the usefulness of the bill or not, but that is not what is in question today. What is in question today is whether anyone outside of the government was privy to the probable form of the new mining tax legislation as to any important particulars which would in any way give them any sort of financial advantage — even potential financial advantage — through the use of that knowledge.

Were there any persons who were privy to such information who were not sworn to secrecy, and specifically were there any persons who were discussing drafts of that bill who were not sworn to secrecy?

There was allegedly a meeting on May 13. Allegedly an official of the Department of Mines, Mr. Ross, was present. We do not know at this moment if the deputy was present. The deputy is in this chamber. The minister can ask his deputy to ask Mr. Ross two things. Who was at that meeting on May 13 and what was discussed?

He can ask Mr. Ross to produce the agenda of that meeting, the minutes of that meeting and the papers that were involved in that meeting. By so doing he can clear it up one way or another whether there has been a serious infraction of parliamentary privilege and taxation bill secrecy or whether there has not. It is a very important question. I would ask the minister very simply: will he undertake to be back in this chamber tomorrow with that information?

MR. KING: I have listened intently to the debate and the questions on this matter this afternoon. It occurs to me that perhaps the Minister of Mines, being a neophyte minister — being a neophyte member of this House — is not really completely familiar with the rules of this House — is not really completely familiar with the rules of propriety that extend to a minister's jurisdiction and to the need to maintain absolute confidentiality with respect to message bills in the same way, as the hon. leader of the Liberal Party (Mr. Gibson) has pointed out, the confidentiality of budgetary matters must be protected and kept privy only to the Minister of Finance and ministers of the Crown.

I just would like to draw an example, Mr. Chairman, for the minister and say to him and to his colleagues: what would the reaction have been of the members on that side had I, for instance, as a former Minister of Labour, had one of the parties to industrial relations, either a trade union or a management group, participate in the writing of labour legislation of this province? It's perfectly acceptable to ask for dialogue and to ask for representations, but when it comes to the final drafting, when it comes to the precise language and provisions even of legislative statutes of that nature which in no way pertain to monetary advantage or to pecuniary interest, it would still be grossly improper. Because the Crown must be seen to be the arbiter without favour or preference to either side,

Yet here we have a minister of the Crown, not without experience, mind you — a previous employee of the same department where he was charged with the responsibility of regulating the mining industry in this province — and he seems to find nothing improper whatsoever in apparently allowing senior representatives of major mining corporations in this province to not only participate in and be privy to the legislative language of a bill but the precise taxation provisions of that bill. This is a grossly serious indiscretion; it's an impropriety. The minister must answer.

I want to say, Mr. Chairman, that this opposition has no intention of allowing his estimates and his salary to be processed through this House until he starts to take this matter seriously and gives answers that the House deserves.

MR. LAUK: Mr. Chairman, I'm going to ask the minister one more time. Will the minister please indicate to this committee whether or not Mr. Lau saw a draft of the legislation now known as Bill 57? I am sure it is within the purview of his knowledge and the deputy minister. Can the minister stand in this House now and indicate fully Mr. Lau's involvement and whether he did see a draft of that legislation?

MR. CHAIRMAN: With great respect, Mr. Member, I believe the minister has the question. Perhaps you would want to move to some other material that you have before you.

MR. LAUK: Mr. Chairman, the charges that have been made against the Minister of Mines are very serious. Mr. Lau has momentarily, two moments ago, admitted to questions of the press that he said: "Of course, I saw Bill 57 before it was introduced in the House."

MR. BARRETT: Shame!

[ Page 2712 ]

SOME HON. MEMBERS: Resign!

AN HON. MEMBER: An absolute sellout to the mining companies!

Interjections.

MR. CHAIRMAN: Order, please! The first member for Vancouver Centre has the floor.

MR. LAUK: Further, Mr. Chairman, there was a meeting that took place in room 223 of these parliament buildings on Thursday, May 13, 1976.

MR. BARRETT: Shame!

MR. LAUK: At the meeting were Mr. Gerald Cross, QC, of the Attorney-General's department, Mr. Keith Prowse, Mr. W.W. Ross of the Mines department, Mr. W. Wood, Mr. Peter Myers, departmental solicitor, Mr. Jurgen Lau and Mr. George Stickle to discuss the draft of the Mineral Resource Tax Act.

I have here a memorandum to that effect signed by Mr. Peter D. Myers, the departmental solicitor, which I shall file as soon as the committee rises. I move, Mr. Chairman, because of that evidence, and the debate that has occurred this afternoon, therefore, that the salary of the minister in vote 130 be reduced by $1.

MR. BARRETT: Mr. Chairman, as pointed out by the first member for Victoria (Mr. Bawlf), this question has been asked repeatedly now for over an hour. The question was framed before this motion was presented, and the reason we're debating this motion for censure was whether or not the minister knew Mr. Lau had seen a draft — yes, no, or I don't know. In the interim a reporter has contacted Mr. Lau, and Mr. Lau said: "Of course I saw a draft." It's either — at least — a case of gross incompetence by the minister that he didn't know, or else he must be prepared to come clean as Mr. Lau has come clean. If Mr. Lau can remember, if the member can produce a memorandum to prove that Mr. Lau was at a meeting, how come the minister sat silent for over an hour in this House this afternoon?

Interjection.

MR. BARRETT: By his silence he condemns the man. The speech by the leader of the Liberal Party (Mr. Gibson) is absolutely correct related to this motion. A responsible minister of the Crown sat in this House for over an hour and refused to answer a question that was already public knowledge — only he wasn't aware of that. He didn't know that someone else had blown the gaff. He sat in silence while Mr. Lau, in good ethical and moral conduct stated very openly and clearly and plainly: "Yes, indeed, of course I saw a draft."

MR. D.G. COCKE (New Westminster): And the Premier's hiding.

MR. SKELLY: Where's the Premier?

MR. BARRETT: No question about it — Mr. Lau admits openly, clearly, and as he should, to no violation on his part. He was asked to read a draft, but what we've heard from the minister is silence. Who asked him to see a draft? Did the Premier know? Mr. Chairman, I think it's very important that this minister, in the best parliamentary tradition, before we complete the debate on this bill, announce that he's resigning rather than we have to go through the embarrassment of this debate, which has been rarely used in this House in such circumstances.

Interjections.

MR. BARRETT: I can't believe that a citizen of this province has already stated that, yes, indeed, he saw a draft, but that a minister of the Crown has refused to admit what a citizen has openly stated. I don't understand why we should have such silence. I don't understand why, for over an hour, you sat there and refused to answer, through you, Mr. Chairman.

AN HON. MEMBER: Do you understand why you lost the election?

MR. BARRETT: Now we have no course other than to give the minister the opportunity to make up his statement that he's resigning or to pass this motion in this House, because anybody who would vote against this motion is saying that anything goes in drafting message legislation — anything goes.

Tell us why you sat silent for an hour. Tell us why you sat silent. Tell us if you did know or you didn't know. Those are the questions we need to know now. We need to know those answers, and right now, Mr. Chairman.

HON. MR. WATERLAND: Thank you, Mr. Leader of the Opposition, for the fine theatrics.

The information which the former Minister of Mines (Mr. Lauk) has, a memo describing the meeting on May 13 in room 223, in which he states that Mr. G. Cross, director of civil law of the Attorney-General's department, Mr. Peter Myers, departmental solicitor for the Department of Mines, and Mr. W. Wood of the legislative counsel, discussed this draft legislation with members of the tax committee, is a fact. I was not aware that these men were present at this meeting, The people responsible

[ Page 2713 ]

for drafting legislation, Mr. Chairman...

MR. BARRETT: Why didn't you tell us an hour ago?

Interjections.

MR. CHAIRMAN: Order, please.

HON. MR. WATERLAND: ...are the legislative counsel and the Attorney-General's department advisers. Surely these people know what is and what is not the proper thing to do.

Interjections.

HON. MR. WATERLAND: If there's anything wrong with these people who worked on the tax committee sitting down with legislative counsel and senior people in the Attorney-General's department to look at the legislation...

MR. BARRETT: Why didn't you tell us that an hour ago?

HON. MR. WATERLAND: ...why did they do that?

Interjections.

HON. MR. WATERLAND: I was not aware of this meeting at the time, Mr. Chairman. If this funny little group on the other side are trying to bring up conflict of interest because someone saw a message bill, why then were they so prone to do the same thing?

MR. BARRETT: Why didn't you tell us?

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

MR. BARRETT: You forgot to tell us an hour ago.

MR. CHAIRMAN: Order, please! The Leader of the Opposition.

MR. BARRETT: Mr. Chairman, I find it very strange that three-quarters of an hour ago when the member for Vancouver Centre (Mr. Lauk) asked the specific question if such a meeting took place, we were met with silence. But after once having been shown evidence that such a meeting took place, the minister said: "Oh yes, someone has just told me." What were you doing for three-quarters of an hour, through you, Mr. Chairman? You were trying to evade your responsibility in answering this very important question.

For over an hour we've seen — Minister of the Crown deliberately sitting in silence when the information was available to him. He did not leave this chamber to get more information; he has not left here for an hour. He got the information; he could have got it an hour ago. Perhaps he did get it an hour ago through a whisper in the ear and still did hot give it to this House.

You are timid at the very least, Mr. Minister, and you are derelict in your duty as a responsible minister of the Crown to this House. I think that motion should be passed by every member of this House. The Premier himself has a responsibility to chastise you — if not in public, right down in his office as soon as we leave. And, Mr. Chairman, to give the Premier an opportunity to select a successor among those who were vanquished because they didn't belong to the Liberal party, I draw your attention to the clock.

MR. R.L. LOEWEN (Burnaby-Edmonds): You win an Oscar!

The House resumed; Mr. Speaker in the chair.

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

MR. LAUK: Mr. Speaker, a discussion arose in committee whereby I undertook to file a memorandum in the House as soon as the committee arose. May I have leave to file such a document?

Leave granted.

HON. MR. BENNETT: Mr. Speaker, I'd like leave to make a short statement to the House regarding the recent First Ministers Conference.

Leave granted.

REPORT ON FIRST MINISTERS CONFERENCE

HON. MR. BENNETT: Mr. Speaker, I'd like to report to the House on the recent First Ministers Conference held June 14 and 15 in Ottawa.

The meeting was called primarily to deal with the fiscal arrangements as a followup to the meeting of the Finance ministers held last May. British Columbia's opening statement was tabled in this Legislature on Monday, and during the two-day conference our basic position was expanded on and developed to the conference.

I might point out to this House, through you, Mr. Speaker, that the matters are very complex, and as a result some misunderstandings may have developed in the public mind as to what was actually being discussed, because the whole nature of revenue guarantees, shared-cost programmes and the way the provincial and federal governments share taxes and

[ Page 2714 ]

revenue is a mystery to most of the taxpayers, and, if not, to most of the members of government in this country. For clarification I wish to provide a short statement as to the history of federal-provincial revenue transfers.

The Canadian government employs three revenue-transfer techniques. The first of these is the constitutional separation of revenue sources between the provinces and the federal government. The second most effective transfer is the sharing of revenue — that's the revenue, the sharing agreements, that have been under discussion at the recent conference. The third device is that of grants-in-aid from government. The recent tax conference in Ottawa dealt primarily with the second point — that of revenue sharing and negotiated agreements.

Mr. Speaker, the idea of revenue-sharing started primarily with the Second World War. The federal government at that time deemed it necessary to gain full control of personal and corporate income taxes for the duration of the war and one full year after. Compensation for the provinces in this emergency was agreed upon.

In 1947 the federal government was able to negotiate considerable tax agreements for the fiscal years 1947-48 to the years 1951-52 with all of the provinces except Quebec and Ontario. The agreeing provinces at that time gave up three direct taxes in return for rental payments.

New agreements were negotiated in 1950 for a further five-year period, 1952-57. The terms were similar to those of previous agreements. Tax credits of 7 per cent of corporate profits, 5 per cent of personal income tax and 50 per cent of succession duties were allowed to provincial governments.

In 1955 the Dominion raised the credit for personal income tax up to 10 per cent. The 1957-1962 agreement allowed tax credits on federal taxes to taxpayers in any province which chose to levy any or all of the three direct taxes. Credit was to be determined on the basis of three standard rates of taxes — corporate and personal income tax and succession duties. Each province was free to levy and administer any or all of these taxes at rates of its own choosing.

Ottawa paid to each province an unconditional equalization grant, sufficient to compensate for the difference between what the province's per capita yield was, or would be from the standard taxes, and an average of the three per. capita yields of the two provinces with the highest per capita yields with respect to their standard taxes. This was, in effect, the birth of equalization for the provinces in Canada.

All of the provinces, except Quebec and Ontario, rented all three of the tax deals at that time. The federal-provincial fiscal arrangements for the period 1962 to 1967 were the outcome of a unilateral decision taken by Ottawa, rather than one of mutual agreement between the federal government and the provinces. The main points of this agreement were:

1. That the provinces were to levy their own personal and corporate income taxes at rates of their own choosing, which the federal government would collect at no charge.

2. The federal government undertook to withdraw from the corporate income tax field by 9 percentage points of corporate income and from the personal income tax field by 16 percentage points, and an additional 1 per cent in subsequent years to 1962, up to 20 per cent in 1966. Subsequent agreements increased the actual 1966 figure to 24 per cent.

3. There were two guarantees of provincial revenues in this arrangement. This would be the first of the provincial guarantees. The 1967-72 negotiations saw the federal government increase its abatements of personal income taxes from 24 per cent to 28 per cent of the federal taxes payable in the province. Whereas earlier abatement by the federal government to provide taxing room to the provinces had, as a rule, been unconditional, the extra 4 points of personal income tax and 1 per cent of corporate income tax granted to the provinces in 1967 was linked to expenditures for post-secondary education and was a substitute for the previous per capita grants for university costs.

The new equalization formula was now based on 16 individual revenue sources, the primary ones still being personal and corporate income tax and succession duties. Agreements for 1972 through 1977 changed the equalization formula from 16 tax fields to 22 revenue sources. At that time it also gave the provinces 30.5 tax points. What with major changes made in tax-sharing, the federal government — and this is significant — gave a revenue guarantee based upon a formula submitted by them, by the federal government, called the econometric approach, which guaranteed the provinces would not receive less under the new formula. That meant the provinces would not receive less during the years 1972-77 — but not only that; it was a formula advocated by the federal government.

These guarantees were covered by the Fiscal Arrangements Act and by regulations established under this Act. The guarantee was to cover the full negotiated period. The present meetings, Mr. Speaker, which have just taken place, were designed to deal with the sharing of revenue for the period 1977 to 1982. At these sessions British Columbia, as I say, advocated the positions that were tabled in this House, but, in brief, the British Columbia government advocated the transfer of tax points to the provinces in lieu of cash payment. This would allow more flexibility in dealing with their own cost programme, would provide less bureaucratic duplication and excessive administrative costs that are borne by the taxpayers and would have some relationship of the

[ Page 2715 ]

ability to raise taxes to the cost of paying for services.

In effect, what we're saying is that the formula we've had before, where many governments have been forced to chase those mythical free federal dollars, has forced provincial governments to provide services beyond their necessity. We're all aware of the extra provision of acute-care beds across the country, because it was the only way provinces could get federal money. This type of formula, which is supported by most of the provinces, would give more flexibility to the provinces and would end the duplication of mutual audit staffs, both in the provincial and federal sphere, where we have a build-up of bureaucracy and less of the money gets through to the people for the services.

British Columbia also advocated that a new equalization formula be established that would recognize more than the ability to raise taxes but would also recognize the higher costs some provinces have in providing services.

I'm sure we all recognize that the idea of equalization is to provide a standard of service, and the ability to raise taxes is one way of recognizing equalization, but if it's to provide services, then the cost of getting those services should be recognized, High-cost provinces, like the province of B.C., that has higher wages and such programmes as post-secondary education, which are most 80 per cent wages, or even hospital programmes which are mostly 80 per cent wages, cost this province more, so the higher taxes we get from income tax from wages comes back to haunt us unless we have a formula that relates to cost.

We also asked that it recognize the penalty of excessive growth experienced by some of the provinces, primarily by British Columbia. Again I point out that British Columbia has a growth rate double that of the national average.

MR. KING: Not last year.

HON. MR. BENNETT: Historically, and it is double the national average — and we are trying to deal with a broad picture here.

What it means is that the growth rate then brings people to this province at a time when they are demanding more services from government. If they are retired, it. costs us more, yet they have not contributed to the social capital of the province in their productive years. Also, those others moving demand services from the municipalities in the way of water and sewage systems that are financed over many years, and they will cost this province in the future, yet they bring no immediate production. It's a cost to the province, and this was recognized by the meeting.

We also asked that the federal government not be allowed to erode the tax points that are being transferred by any unilateral moves. Now this would be that the federal government can, when it transfers tax points still in its own budget, bring in extra capital-cost allowances which at one time give reductions to them but also reduce the value of the tax points they have given to the provinces. With methods such as this they should have discussion with the provinces first.

We further asked and advocated that the federal government transfer to and through the provinces some of its taxing capacity to stabilize the finances of local government. It is my impression that the conference, although not arriving at formal agreement, has moved a long way towards the British Columbia position, and in this respect this conference was a success.

A further meeting of provincial Finance ministers with the federal Finance minister will take place in July to provide figures and further technical proposals in arriving at any new finance formula. I must point out to this Legislature, however, British Columbia's disagreement with the unilateral action proposed by the federal government, which affects the revenue guarantee agreements for the 1972-to-1977 period, as provided for in the econometric formula.

As members are aware, the federal government's Finance minister first proposed in May to arbitrarily and unilaterally change the formula to the detriment of approximately $700 million to all the provinces over the years 1974, 1975 and 1976. This action would in fact be making a retroactive assault on dollars owed the province. Under this agreement, and while the cash has not yet been paid to the provinces for these years, it is in effect an accounts receivable owing to the citizens of British Columbia by the federal government, as it is to all provinces. The amount is estimated to be approximately $60 million to the province of British Columbia, and would, in effect, mean a loss of services for people that these dollars would provide in coming years. Because while they are owing for these past years, the dollars have not yet been paid.

It was with some anger that the 10 provincial premiers unanimously expressed their opposition to this proposal to federal Finance Minister Macdonald. It is with horror and disappointment that, in the light of sound arguments placed before the conference by all the provinces, the federal government has not yet moved from this inexplicable position. Because of this the conference, which had been successful up until and through most of the Tuesday discussions, ended under a cloud.

British Columbia will continue to press, individually and collectively, members of the federal government to prevent them from passing the necessary order-in-council to support this federal position. British Columbia is also examining the legality of the proposed move.

[ Page 2716 ]

I might also point out that there was also a private meeting of the First Ministers at Sussex Drive. At that meeting we discussed the patriation of the Constitution. I have previously placed before the House British Columbia's position which was simply that patriation should be an act of unity and should have the unanimous agreement of the provinces and the Government of Canada in bringing the Constitution to Canada. Establishing the Constitution in Canada should be used as a move to unite the country. We opposed at that meeting any unilateral move by the federal government in isolation to bring the constitution over before they have the approval of the provinces. In fact, we view this as an act to disunify the country, an act of divisiveness at a time when this country needs unity more than ever.

Mr. Speaker, primarily, those were the proposed agreements that were discussed in Ottawa, and I would be pleased to table this report.

MR. BARRETT: Mr. Speaker, I want to thank the Premier for his lengthy statement, and I'd like to deal in reverse with the matters in response.

First of all, on the matter of the Constitution: it has been the policy of preceding governments in this province for almost a generation and a half not to support any position on unilateral patriation of the Constitution. I am pleased, regardless of political philosophy, that British Columbia, as a province, has a not altered its position. I agree completely with the arguments that were presented some 10 years ago, 20 years ago and today that any unilateral move on the Constitution would be detrimental to this country. I must say with some regret, Mr. Speaker, that I feel that perhaps the Prime Minister is viewing the constitution as a political issue. I would hope that my suspicions are totally incorrect. I would hate to see a situation in this country where it would be faced with a federal election on the issue that I will bring back the constitution if you elect me. Any politician of any federal party who would use that as a device to solicit votes would be doing a great disservice to this country. I do believe and I do hope that there is no effort by the federal Liberal Party to make any effort at all to use that as a federal election gambit.

It is my firm personal opinion, Mr. Speaker, that the position taken by this province has been correct for these 10 years. I believe that the average man in Pouce Coupe, in Terrace or in Oak Bay really doesn't spend his waking hours worrying about the BNA Act. But if any Prime Minister tried to make that a primary issue, the only response would be one based on emotion, and that would be bad for this country.

In terms of the first comments of the Premier, let me say that I disagree completely with the position of the present government of British Columbia, which is not shared, apparently, by the present Minister of Health (Hon. Mr. McClelland) and the present minister of Human Resources (Hon. Mr. Vander Zalm), and apparently not even shared, unambiguously, by the Premier's own statement. I refer, Mr. Speaker, to the opening statement of the Premier given on June 14 where on page 3, under the matter of health care — and I assume this was directed by the health people — the Premier read the following words:

"The federal government has entered cost-sharing arrangements on health based on the principle of sharing actual costs on an average of 50 per cent across this country. British Columbia would like to indicate its concern at the abandonment of the 50 per cent principle."

You can't have it both ways, Mr. Speaker. You can't say you're concerned about the abandonment f the 50 per cent and have your other ministers go back to Ottawa saying they're against the abandonment of the 50 per cent, and then on page 5 say that you have alternate proposals which in effect abandon the 50 per cent position. No, Mr. Speaker, that is a matter of your own written word. I disagree. I'll tell you why I disagree, and I think this is a matter beyond any kind of major philosophical gap or anything else. There was a tremendous battle in this country to establish medicare. Medical health costs across this country by and large are rising dramatically. Yes, it may cost a little bit more in British Columbia, a little bit more in Ontario, but it is my opinion that any attempt to make separate tax points arrangements with the provinces will mean an abandonment of this basic service plus all the social services under the Canada Assistance Plan inevitable in the Maritimes and in Newfoundland and in other poor provinces of this country. It would lead to balkanization that none of as Canadians want. I respect and admire the positions of anyone fighting for British Columbia, but my own frame of reference, as important as British Columbia is to me, Canada is even more important.

Canada is more important. We took this position in May 23 and May 25 in Ottawa in 1973. I don't believe that anybody is moving in this tax points area for any other reason than to get the best possible tax deal for their jurisdiction. I applaud that. But sometimes when pursuing the best possible tax deal for the jurisdiction you represent you miss the whole. I feel very strongly that any abandonment of the 50 per cent cost-sharing of health care and of the Canada assistance Plan will mean an abandonment of the high level of service to the Maritimes and Newfoundland and other Canadians.

For the Premier to say — and that's valid if he wishes to interpret it that way — that citizens coming to this province in their non-productive years do add burden to British Columbia is one way of interpreting it. I don't interpret it that way. I say any

[ Page 2717 ]

citizen who has been productive anywhere in Canada has the free right to get equal service at any age, any time, anywhere in Canada.

There are British Columbians who may wish to retire to Nova Scotia. I would hope that the Premier of Nova Scotia would make these people welcome. I know that our Premier makes them welcome, but to differentiate by saying that they're coming in their non-productive years is a mistake, in my opinion. If they have been productive in British Columbia and decide to live in Nova Scotia in their declining years, I hope they are welcome there just as we have an obligation to welcome others who wish to do the same by coming to British Columbia.

Mr. Premier, I agree with you completely on the BNA Act. I believe that you are wrong in pursuing an alternate to the tax sharing. I have found the federal government, as you have now found them, to be changeable within hours on their position. The safest course for us to go, in my opinion, at least through another federal election, is not to tamper with the 50-50 cost-sharing deal. It may give your Minister of Welfare (Hon. Mr. Vander Zalm) a few bucks now, but it will cause a nightmare in a matter of months — the same with your Minister of Health (Hon. Mr. McClelland). That is why when they went to Ottawa they took the position that they wanted a continuation of the 50-50.

So, Mr. Premier, I say you've found that they wish to back out. I say let us not abandon — that is our position. We would not abandon the basic federal commitment of 50-50, regardless of the rising costs — 50-50 down the line. That's the only way we'll keep this country together.

MR. GIBSON: Mr. Speaker, I welcome the Premier's lengthy and complex statement on federal-provincial financial relations. I completely agree with the attitude of British Columbia in seeking tax points back for the additional flexibility of our province. I can't agree with the stand taken by the Leader of the Opposition (Mr. Barrett), and I can only believe that he doesn't 100 per cent understand what is going on here.

Interjections.

MR. SPEAKER: Order, please.

MR. GIBSON: There are two questions here, Mr. Speaker. One is the maintenance of services in other parts of the country, and let me get to that in a minute. But the other question is the flexibility in the delivery of services in British Columbia. Why should the priorities set by federal politicians and federal bureaucrats distort the way that we spend money in British Columbia? Why should we be forced into spending more money than necessary on acute-hospital beds and not nearly enough on intermediate-care beds?  — and you know that, Mr. Leader of the Opposition. That's why your government never put in that intermediate care that it should have. Why is it that because day care is under the Canada Assistance Plan we can't phase it in with the schools, which logically it should be? It's these kinds of distortions of British Columbia spending priorities that these cost-sharing programmes have done.

The principle of equalization in this country is one of the pillars of Confederation, and one that we have to support; and the way you support that, once you get back the tax points, is to give a better deal on the other equalization formulas to the rest of the country, because believe me....

Interjections.

MR. SPEAKER: Order, please. The hon. member for North Vancouver-Capilano has the floor on the statement.

MR. GIBSON: Believe me, the cost-sharing programmes have just been another form of equalization. They have been reverse equalization, which you should know, Mr. Leader of the Opposition, because only the rich provinces have been able to take full advantage of them. So let's not have this nonsense.

Now the next thing I would comment on is that the request for the changes in these formulas, to take into account the high cost in British Columbia and the high growth which British Columbia is experiencing and must finance, is absolutely correct. The one about high growth is a relatively new theme in British Columbia's stand with Ottawa. I hope the Premier keeps hitting it and hitting it hard, because our growth rate, and therefore the cost of growth and the infrastructure we have to assume, is over double that of the rest of the country.

The question of the revenue guarantee — it's an important one to governments but it's not quite so important to taxpayers. It's around $700 million involved this year nationally, and I think it is about $93 million for British Columbia, a retroactive figure of some $60 million, as the Premier said. That is payments not yet made on fiscal years back to 1974. This results in a change in what the Premier called the econometric formula, the yield of the tax base as compared to personal income and a change to the side-by-side calculation method, which can be argued to be more accurate or less accurate. You can argue it both ways. While it is important for the provincial government and it's important for the federal government, fortunately it is much less important for the taxpayers, Mr. Speaker, because it all comes out of the same pocket in the end.

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On the matter of patriation, I agree there's a lot more talking required before that should come back, and not only talking, but agreement.

MR. WALLACE: Mr. Speaker, the statements by the Leader of the Opposition (Mr. Barrett) and the Liberal leader (Mr. Gibson) have only confirmed the initial announcement by the Premier that this is a complex area that most of us don't understand. While I would hesitate to compete with the Liberal leader in his knowledge of economics, I do think that underlying all this is the matter of trust and the example set by the federal government in undermining agreements entered into in good faith.

While I could talk a lot about cost-sharing in the health field, which is an area I happen to know a little about, all I would be trying to find in our decisions and discussions with Ottawa would be two fold, and that would be, first of all, to establish, let us hope, that atmosphere of trust where big decisions really are reached in an area of consultation, and not unilateral decisions which can only lead to confrontation, particularly in the last hours of a two-day meeting when obviously progress was being made, suddenly to be seriously disrupted by this kind of unilateral imposition of a very serious nature.

The second goal — and I confess I don't understand what the better answer would be — but the other goal is, indeed, to try and bring about arrangements which, as far as possible, will solve or mitigate the problem of regional disparity. Quite by coincidence, while I was in the Premier's office this afternoon with our national leader (Mr. Clark) I happened to meet a former resident of British Columbia, a man who served this province well, who has spent some years in New Brunswick lately. Quite in a conversational way he pointed out that regional disparity in Canada is not improving. It is getting worse.

Therefore my plea, as a layman who does not understand all the complicated financial arrangements, would be surely to keep in mind that as Canadians it is very much a primary responsibility to minimize regional disparities across the country but at the same time, as the Leader of the Opposition (Mr. Barrett) pointed out, to obtain a fair and, even more importantly, a reliable agreement with the federal government which will enable us in the most economic way to use both federal and provincial sources of revenue.

Hon. Mr. Bennett moves adjournment of the House.

Motion approved.

The House adjourned at 6:29 p.m.