[ Page 2907 ]

CONTENTS

Routine Proceedings

Home Purchase Assistance Act (Bill 49) Second reading.

Hon. Mr. Curtis — 2907

Mineral Resource Tax Act (Bill 57) Second reading.

Hon. Mr. Mair — 2908

Mr. Veitch — 2909

Mr. Bawtree — 2911

Mr. Kempf — 2912

Mr. Lloyd — 2912

Hon. Mr. McGeer — 2913

Hon. Mr. Phillips — 2914

Mr. Haddad — 2915

Hon. Mr. Waterland — 2915

Dentistry Amendment Act, 1976 (Bill 70) Second reading.

Hon. Mr. McClelland — 2916

Mrs. Jordan — 2917

Mr. Lloyd — 2918

Hon. Mr. McClelland — 2918

British Columbia Ferry Corporation Act (Bill 24) Second reading.

Hon. Mr. Davis — 2919

Mr. Bawlf — 2919

Mr. Hewitt — 2920

Mr. Kerster — 2921

Mr. Lloyd — 2921

Mrs. Jordan — 2922

Hon. Mr. Davis — 2923

Guaranteed Available Income for Need Act (Bill 28) Second reading.

Mr. Strongman — 2923

Hon. Mr. Vander Zalm — 2924

Committee of Supply: Department of Labour estimates.

On vote 123.

Hon. Mr. Williams — 2925

Mr. Lloyd — 2926

Mr. Kahl — 2928

On vote 128.

Mr. Mussallem — 2928

Hon. Mr. Williams — 2929

Mr. Rogers — 2930

TUESDAY, JUNE 22, 1976

The House met at 10 a.m.

Prayers.

HON. D.M. PHILLIPS (Minister of Economic Development): Mr. Speaker, pursuant to the Public Bodies Financial Information Act, I ask leave to table the financial statements of the British Columbia Railway for the fiscal year ended January 2, 1976.

Leave granted.

Orders of the day.

HON. G.M. McCARTHY (Provincial Secretary): By leave, second reading of Bill 49, Mr. Speaker.

Leave granted.

HOME PURCHASE ASSISTANCE ACT
(continued)

MR. S. BAWLF (Victoria): Mr. Speaker, I take great pleasure in rising to support this bill this morning.

MR. SPEAKER: Hon. Member, before you proceed further, I believe that you have already spoken to second reading on the Home Purchase Assistance Act, according to my records.

MR. BAWLF: That may well be, Mr. Speaker. I did rise to make a very few comments the other evening. I stand corrected.

MR. SPEAKER: I'm sorry, Hon. Member. I cannot recognize you a second time because, while you rose and spoke briefly, as I recall it, you adjourned the debate until the next sitting of the House. Debate then continued after that time and we listened to a number of other speakers. So, according to the rules of our House, you have exhausted your right to speak again on the motion. I cannot permit you to speak a second time to second reading of this bill. However, there are other members of the House who have not spoken in the debate — if they wish to take part. If there is no further debate, the hon. minister closes second reading.

HON. H.A. CURTIS (Minister of Housing): As you observed, Mr. Speaker, there were a number of speakers prior to adjourned debate on second reading of Bill 49. I would like to take a few moments for the benefit of members and for Hansard to respond to those comments which were made at the time.

I think the bill has had very productive review since it was introduced and indeed since debate was adjourned. The member for Nelson-Creston (Mr. Nicolson), who was the lead-off speaker for the opposition on this particular proposal, touched on several points which I would like to respond to.

I think it's correct to summarize one of his observations with the phrase that there was the danger of a massive bureaucracy to police certain limitations. Mr. Speaker, this will not be so. The declaration of value on the form will normally be accepted — that is, the form of application for the benefits that are contained in the bill — without investigation. We admit that there will be additional work in calculating the reduction of payment in the cases of need — I would refer members to section 10(2) of the bill — but the rearrangement of staff which will be possible with other initiatives in the Department of Housing will cover this. This really results in the same staff but a saving of approximately $15 million a year in terms of amounts paid out.

The member also asked about what happens in the case of self-built homes. I'm informed by my department and satisfied that an application from a self builder will be adjudicated on the basis of the cost of the land and the actual costs of construction. The applicant's own labour will not be taken into account. This is the practice now, and it will not be changed under this proposal.

He went on to say that a piece of land is subdivided first of all from a larger parcel and transferred perhaps as a wedding gift. Section 14 of the bill provides that in the case of family transactions the eligibility committee — that is a committee of the Department of Housing which has been established, I believe, since, (and I'm subject to correction) the department was first set up — must be satisfied that the transaction is bona fide for full consideration.

The hon. member went on to say: "Where are we going to find $47,000 homes for families in Vancouver?" I appreciate, Mr. Speaker, that a number of members have asked themselves the same question and I've discussed this with members from around the province with respect to the limits which are set in various regions of the province; $47,000 is the highest amount for AHOP under this proposal, and it ranges to $43,000 in the greater Victoria area and so on. I thought that in the introductory remarks I made it clear that the guidelines will be, and are, under review by the development industry, and full consideration will be given by the department to all constructive suggestions received.

We're not discussing my estimates at the moment, but it may be of interest to the House to know that in greater Vancouver just under 1,000 units costing $47,000 or less have been approved, and we anticipate that another 1,500 will be funded before the end of this calendar year. Of the 1,000 approved

[ Page 2908 ]

to date, one-half of those are single, detached homes. I think it's important to emphasize again in closing debate that the bill is not fully operative until the end of November of this year — November 30 — and in the interval we've given several months for individuals to apply under the existing formulae or under the new one, whichever they consider to be their best advantage. They can continue to make applications under the Provincial Home Acquisition Act. This long transitional period is deliberately in place to avoid pulling the rug from under a particular family who were moving on a specific home acquisition proposal.

The question was also asked about the amount in the home acquisition fund. I think the member for Nelson-Creston said it was somewhere in the neighbourhood of $200 million. Well, he was just a little short of the mark. At May 31 of this year, the actual balance was $231.4 million.

The first member for Vancouver-Burrard (Ms. Brown) expressed concern that some of the sections tied penalties to a spouse. In point of fact, Mr. Speaker, the expression "spouse" is used in section 4, which allows an applicant to benefit from the residence qualifications of the spouse; section 6, which prohibits second chances where a person or the spouse of that person has had previous help from the province; and section 20, which amends the Provincial Home Acquisition Act to prohibit second chances where a person or the spouse of that person has had help under the main provisions of the bill.

The intention of the bill, Mr. Speaker, is that second chances will be denied to any person who has had previous help from the province. It's considered that a spouse who has shared a family home and received such benefit simply cannot be given this second-time-around assistance. On marriage specifically, whether the marriage is between single persons or whether a divorced person is involved, if either spouse has received benefit, neither can apply in future.

I recognize that that does work a hardship in a number of instances but frankly it is my information.... I've worked with the department on this specific point. It's a very difficult one to resolve because, while you might be able to introduce an exception or two, we can't possibly cover all the eventualities in terms of second chance. Therefore the decision has been taken, after a great deal of thought, that no, it will not be available to someone who has had the assistance before.

I think the same member also asked about the position of a person purchasing a condominium rental unit converted to ownership, under the Provincial Home Acquisition Act, entitled to apply for either the $500 grant or the $2,500 mortgage. I would draw your attention to section 7 of the bill. This would entitle that person to apply for the $5,000 mortgage.

The second member for Vancouver-Burrard (Mr. Levi) also spoke at length, and he was among those to quote, apparently, statistics from the Real Estate Board of Greater Vancouver, I assume. Well, I don't know what the members did with the information subsequent to receiving it, but it certainly does not tie in or jibe with the information that we've received. Of all sales, 26 per cent in greater Vancouver Multiple Listing Service sales in the first quarter of this year were under $47,000 — that is the greater Vancouver AHOP limit — and 43 per cent in the New Westminster area in the first three months of this year. Further, 32 per cent of all sales over the last year in metropolitan Victoria listing sales were within the price limitations suggested for this Act.

The proposal is a very exciting one, Mr. Speaker, and I think that we're going to see the delivery of housing which this government promised in its campaign and is now in the process of delivering and assisting.

I move second reading.

Motion approved.

Bill 49, Home Purchase Assistance Act, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. McCARTHY: Mr. Speaker, second reading, Bill 57.

MINERAL RESOURCE TAX ACT
(continued)

HON. K.R. MAIR (Minister of Consumer Services): I would like to comment very briefly on this legislation, as it very much affects my constituency. I must say that I am very pleased to be in the House today living up to my responsibility to do the people's business.

Mr. Speaker, I am distressed that, for reasons which I cannot fathom, there does not seem to be anybody on the opposition benches to ask the questions that my constituents, I am sure, would like to have answered concerning this legislation.

My constituents would particularly like to know, Mr. Speaker, the rationale behind the legislation that this replaces, which would tax an industry on its ability to produce to such an extent that they cannot economically produce that which the government wants to tax.

Mr. Speaker, it is a pity that the opposition are not here to make comment upon that. My constituents would be interested in knowing why in three and a half years, between 1972 and 1975, no new mines opened in British Columbia and in particular no new mines opened in my constituency. It seems clear to

[ Page 2909 ]

me and clear, I am sure, to members on this side of the House, that that wasn't because the mines weren't there to be opened but was because the climate of the government was such that no mining man in his right mind would consider opening a mine.

Mr. Speaker, the people in my constituency would like to know why it is that Afton Mines, discovered in 1972, did not open until the change of government and only considered reopening when the then Minister of Mines, the now first member for Vancouver Centre (Mr. Lauk) indicated that, notwithstanding the fact that the Legislature was not in session at that time, he would at some time in the future make a deal so the legislation would be changed to accommodate them.

Mr. Speaker, these are a few of the interesting questions raised by the fact of the NDP government over the last three and a half years. These are some of the questions which will not be necessary after this legislation has passed.

Mr. Speaker, this bill and other mining legislation and programmes proposed by the government will assure that once again mining takes its rightful place as the second major industry in British Columbia. Mr. Speaker, constituencies such as those of my colleague the Minister of Mines, my own, my colleague the Minister of Highways and others will once again prosper — not just prosper because of the wealth from the mine itself, but from all of the things that go to contribute to a mine: the heavy equipment, the labour that must be necessary, the houses that are necessary, the supplies that are necessary.

This, not only in terms of what it will do because of the legislation itself, but because of the psychology that will result, will ensure that once again British Columbia will move back on the road to prosperity. Mr. Speaker, I close by congratulating the Minister of Mines for bringing this country back in a position where it is safe for business to operate.

MR. VEITCH (Burnaby-Willingdon): Mr. Speaker, I am pleased to rise and support Bill 57, the Mineral Resources Tax Act. Your Honour, I believe the greatest failure of the New Democratic Party has been a misunderstanding of what makes the economy of British Columbia work. Although Bill 57 deals with mining, what I have to say about the damage the NDP has done to the economy applies to all resource industries. We often see bumper stickers saying: "Mining, British Columbia's Second Industry." Becoming more common was a sticker saying: "Welfare, British Columbia's No. 1 Industry." I don't know where this would leave forestry, but I think that we all agree that it lies ahead of mining. Mining must therefore be third at best, and the way things were going prior to introduction of this bill it would be unlikely to have sustained that position for even very long.

No one expects such departments as Education, Health and Human Resources to be self-supporting. The money spent by many departments has to come from industries that produce new wealth, through taxes, both corporate and personal, royalties and so on. These contribute more than they receive in services. One of these areas, Mr. Speaker, is mining.

The provincial budget for 1975-1976 called for an expenditure by the Department of Mines and Petroleum Resources of $9.6 million. The estimated income to the provincial treasury from mining alone, not including petroleum, for that period would have been about $126 million. This means for every dollar spent the government took in about $13. One would think that here indeed is a goose that could conceivably lay golden eggs. The previous government thought this too, but it seemed to want more and more golden eggs. And the way to get more golden eggs was to increase taxation, Mr. Speaker, levy royalties and increase ministerial interference and discretion regardless of what happened to the goose. Well, the goose over the last few years has become very sick. Whether or not it has a terminal illness depends upon the result of Bill 57 and other amendments to the Mineral Act.

In the past 38 to 40 years British Columbia companies have seen the mining industry emerge from a comparatively primitive condition that prevailed during the '30s to the highly efficient operation of the '60s and '70s. During the '50s and '60s and the first two years of the '70s, mining enjoyed favourable legislation from both federal and provincial governments, although the federal government became somewhat difficult when they introduced the capital gains tax and eliminated the three-year tax-free period in the late '60s. These have been important incentives for those who provided the capital, and the tax-free period in particular has been a great help in the first few difficult years of any mine's lifespan.

As a result, the mining industry grew and prospered until British Columbia in general and Vancouver in particular became the leading centre of mining expertise in western North America. We then enjoyed a worldwide reputation. The situation changed dramatically. Staking up to this year has been down 80 per cent since 1972 and exploration was virtually at a standstill. Many major companies closed their offices in British Columbia and junior companies have been hard pressed to pay their rent. Various suppliers of goods and services throughout the province were suffering, since mining often provided a considerable part of their revenues.

In his opening statement the hon. Minister of Mines noted that there were over 200 of these types of firms which employed many, many people. Investor confidence had been so badly shaken that it was virtually impossible to raise money for projects

[ Page 2910 ]

with respect to mining in British Columbia. Students have missed their summer money and experience that used to be provided to so many of them by mining experience and mining activities.

It is interesting to note that last year the government proposed to provide something like $70,000 to young people to give young people the kind of training that mining companies used to provide at no cost whatsoever to the taxpayer.

What then, Mr. Speaker, are the reasons for this decline? One that is often advanced is economic conditions — world economic conditions. Now it is true that prices and demand fluctuate, but these fluctuations are normal and have little effect on exploration and development, because there is usually a three- or four-year time lag between the discovery of the deposit and the production of a marketable concentrate. Another reason often advanced by the previous government's apologists was declining metal prices. All right, then. Let's examine this and have a look at what happened during the time since the NDP government assumed office in 1972 until last December.

According to the then Minister of Mines — Mr. Nimsick's — report for 1972, the average price of gold for that year was $57.52 an ounce. Toward the end of 1975 it was $150 per ounce. Similarly, silver had gone from $1.66 to $4.40 an ounce. Copper had gone from 45 cents a pound to 58 cents per pound. Lead, Mr. Speaker, had gone from 15 cents a pound to 20 cents a pound and zinc from 16 cents a pound to 36 cents. These increases were more than enough to take care of inflation.

The Yukon, which receives the same price for its metals as British Columbia, boomed. And the Yukon is subject to the same federal taxes; and the Yukon is presently enjoying a tremendous boom in mining. The real reason for the problem in British Columbia is now and has been the legislation brought down by that prior government. With its anti-industry bias and its wide discretionary powers, it created an atmosphere of uncertainty in most industries, not only in mining. Before investors — and these range from banks down to individuals with a few shares and a few junior companies — put up their money, they want to believe that they will be fairly treated and get a reasonable return for their investment. Without these prospects they will invest elsewhere. That is exactly what happened in British Columbia. There are more than enough risks in mining without the government being an additional part of the problem.

This adverse legislation takes several forms. It has been mainly embodied in three Acts: the Mineral Act, the Mineral Royalties Act and the Mineral Land Tax Act. One gets the impression that these Acts were hastily drawn up by people who really didn't know what they were doing, were guided mainly by doctrine and therefore they had to be correct. Many points are spelled out, but just as many are covered by such blanket expressions as "at the discretion of the minister," defining words not defined in this Act and so on and on.

Most investors, I am sure, would have preferred to have had confidence in the minister at that time before becoming involved in the exploration and development of any mine or mining property. In some cases, decisions of the minister may have been appealed, but not to the courts, Mr. Speaker, oh, no — to the cabinet, to the cabinet of that day which, as far as this individual can see, is basically an appeal back to that minister in which the mining industry had no confidence in the first place.

This didn't only create an uncertainty in the industry but created uncertainty in the civil service as well. At one time one could get an answer from a relatively junior person in the service. But up until our government assumed office, that was not the case any longer. Those people, due to the uncertainty of the legislation, were just as confused as the mining operators. The legislation that has done most to discourage mining in British Columbia is that contained in the Mineral Royalties Act, then known as Bill 31. Mr. Speaker, I intend to devote a few moments to that Act.

Royalties set up in that legislation are not in any way taxes on profit. They are charges levied on minerals and smelter returns with no regard whatsoever to profits, and little or no regard to costs. They were justified by the previous government on the grounds that other industries pay for their raw materials. However, there is quite a difference, say, between manufacturing and mining in this respect. In establishing a new factory or plant, a site will be chosen where raw materials, transportation, markets, labour and taxes are all available at the lowest possible cost. Mines, on the other hand, cannot choose their locations. They must of necessity be at the ore deposits and these deposits have a habit of being in the most inconvenient places.

In applying royalties, the previous government did not take this into consideration. The levy on a pound of copper or an ounce of gold was basically the same whether that commodity came from a high-cost mine in northern British Columbia or from a mine at Merritt close to settlements, power and transportation. The only concession in this connection is a credit for transportation on the concentrates shipped out, but no allowance was made for transportation costs, on labour going in and out, on groceries, fuel, power, steel and so on — costs that are much higher than the costs on concentrates.

These royalties were imposed in two ways. The first is a 4 or 5 per cent levy on net smelting returns. Now note that this is based on the selling price, not on the profit. In other words, all production and financing costs, as well as taxes, had to be met from

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the remaining 95 per cent. The second was a levy based on price and was called a surcharge or super royalty. This was based on the difference between 120 per cent of the basic value per ounce or pound, determined by the government, and the amount received from the smelter. Half of this is taken by government. In the case of gold, taking an approximate base price plus 20 per cent, it is about $110. With gold at $160, the difference is $50 and the government takes half, or $25, out of every ounce that is produced. Is it any wonder that the gold mining and gold production has been down in this province over the last few years and that unemployment in these areas has been at an all-time low?

One of the worst effects of this royalty legislation is that it turns tremendous tonnages of low-grade ore into waste that can never be recovered. Let us mentally feature a typical ore deposit. Quantities of ore, Mr. Speaker, are rarely homogeneous. Rather they are made up of large tonnages of low-grade materials and small tonnages of high-grade ore. Depending on metal prices and production costs, an average grade that will yield a reasonable profit is determined, and this in turn determines the cutoff or lowest grade that can be mined without making the operation uneconomic. Anything at all that increases costs makes a higher average grade necessary, and royalties had this effect. So our average grade moves upward, this moves the cutoff higher, and the remainder of the ore is now lost to the people of British Columbia in the ground forever. It has to be left behind. The mineral tonnage is reduced, the life of the mine is shortened, and employment and other benefits are greatly diminished.

I wonder how the NDP felt that this was maximum utilization of resources. Why couldn't the New Democratic government understand this very simple point? I am not a mining man and it's completely evident to me. The damage being done is documented in the previous government's economic review released in September of 1975. It shows an across-the-board decline of dramatic proportions in mining exploration for 1974 as compared with 1973. For example, Mr. Speaker, copper declined 40 per cent — and this is from the records that the previous government released — zinc declined 43 per cent; silver declined 24 per cent; gold declined 15 per cent; iron concentrate declined 8 per cent; nickel, 39 per cent; cadmium, 47 per cent; and last but not least, lead declined by 65 per cent. It is evident that the NDP couldn't even get the lead out. These figures are in units of production, not dollars, and therefore were related directly to jobs.

Mr. Speaker, hon. members, British Columbians have to realize that this province has no monopoly whatsoever on minerals — or even on raw materials of other types. We do have very large reserves, but in general they are low in grade compared with those of many other countries, and our costs, particularly our labour costs, are high. And with the imposition of royalties imposed by the previous government, the competitive position of British Columbia and the British Columbia mining industry was left in a very sorry state.

If the New Democratic Party thinks that high royalties can be collected and still have a competitive industry, it is very sadly mistaken indeed.

The love that has been preached by the former Premier is of very little importance in the international world of metals. If the buyers and users of metals cannot get them from British Columbia in adequate quantities and at reasonable prices, they have plenty of other sources, and British Columbia's mining industry will continue to decline. And that must be tremendously obvious to anyone.

It has been said that never before in history had so few had such a large and rich province to use as an experimental laboratory. Bill 57 moves to restore sanity in mineral taxation.

Mr. Speaker, hon. members, I implore you to support this bill.

MR. L. BAWTREE (Shuswap): I notice, Mr. Speaker, that it's much easier to get the attention of the Chair this morning than it has been in the past.

I also rise to support Bill 57, Mr. Speaker, because although the area I represent does not have any large mines, large corporations digging out the mineral resources, we do have in my area of Shuswap many small pockets of ore. The Adams Plateau is a very interesting place where many of the small miners and prospectors have worked for many years. The Kingfisher Creek area also has been prospected and has had some development for just about as long as I can remember. And yet, because the bodies of ore have been so small, there has not been any great development in the area.

I think that Bill 57 recognizes the fact that in many places in our province there is no place for any large mine. It is going to be the small pockets that are going to have to be developed if we are going to remove any of the ore and if mining is going to have any place in the area at all.

I think that this provision that allows the very small mines to operate, up to a maximum of $25,000 before they have to pay the tax, is going to be a very worthwhile piece of legislation in order to get some of the people in my area back to work again.

It is certainly true that in 1972 and soon after the mining in my area came to a virtual halt. Nobody could operate the marginal mines or the marginal prospects that we have in the Shuswap and pay the kind of royalties that were imposed by the previous administration.

But there are still one or two problems, Mr.

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Minister, through you, Mr. Speaker. One of them is access, because of the development in the Shuswap area, the development which has taken place. I'm referring to the development of what had been Crown land and is now either farms or subdivisions along most of our valley bottoms. It's very difficult for these miners to get the roads and the access they require through this private property. This is one of the problems that is occurring in my area, and with the very small value of the mines that are going to be developed, people cannot pay large amounts of ransom to the landowners of the lands over which they must cross. I would think, Mr. Minister, that this is one avenue that should be very carefully looked at.

Another aspect of this legislation, Mr. Minister, is the removal of the mineral land tax, not only on the mineral lands but on the agricultural lands as well. I know that the ranchers in my area will be very happy to see this tax removed. However, again, it is not all that clear. We know that those who have paid their taxes over the last few years will not have to pay them in the future in order to retain their mineral rights on their agricultural land. But what about those people who forfeited, who felt that they could not afford to pay those taxes over the last two years? I think that provisions should be made for these people to pay that tax that they omitted to pay over the last few years and get their mineral rights back once again on their agricultural land.

I'm very happy, Mr. Speaker, to support this bill. I know it is already having some impact on the activity in my riding, and I'm sure it will have an impact right across this province. It will help the other industries that are not wealth-producing industries, our schools and our hospitals to get the money that they require in order to keep operating and to establish standards that we all want in this province.

MR. J.J. KEMPF (Omineca): Mr. Speaker, I rise to very briefly speak in favour of Bill 57, the Mineral Resource Tax Act, as I am happy to see the return in British Columbia to a fair and equitable form of mineral taxation since the introduction of Bill 31 by the former administration, Bill 31, their Mineral Royalties Act, which brought to a standstill the mining industry in British Columbia.

Bill 57, Mr. Speaker, will not only ensure the people of this province a return from the mining industry, but will also ensure the people of this province a return on the invested dollar by the stockholders, many of which are British Columbians.

Bill 31, since it was introduced, a bill better known as the Yukon Development Act, has caused a situation in British Columbia where no new mines were opened, there were no expenditures for exploration, and, Mr. Speaker, because of this my constituency was hurt and hurt very badly.

The constituency of Omineca is very dependent on the mining industry, especially on the exploration dollar. Many dollars are spent from April to October in each year on exploration in my constituency. Many, many dollars are spent by those mining companies in my constituency for the goods and services needed for that exploration. Grocery stores, accommodation facilities, hotels, motels, hardware stores, equipment rentals, vehicle rentals, all were hurt badly by the loss of that exploration dollar. We're all affected by the loss of that exploration dollar, because what happened with the introduction of Bill 31, those dollars no longer stayed within our province but went to the Yukon, to the province of Alberta, or to other areas in the world that had sane mineral taxation.

You see, Mr. Speaker, with the introduction of Bill 57 my constituency will again prosper. The mining companies will once more mine the low-grade ore which they have not done in the last two or three years.

I was appalled, Mr. Speaker, when during the campaign prior to the December 11 election I spoke to the manager of Endako Mines, the second largest moly mine in British Columbia — or in the world — that's located in my constituency. The manager of that mine told me at that time that because of Bill 31, because of that mining legislation introduced by the former administration, that company was required in order to operate and stay financially above board to mine only the high-grade ore on their property.

The original expectation of life of Endako Mines was 21 years, and I was told at that time that should they continue to be required to operate in the high-grade section of their property the life would be reduced to seven years.

Bill 31, Mr. Speaker, also stymied the opening of a new mine in my constituency at Houston. This backward legislation that was brought in by the former administration made it impossible for Equity Mining Capital of Vancouver, British Columbia, a British Columbia company, to get that new mine off the ground. A new mine now with the advent of Bill 57 will certainly, within the next couple of years, go into production.

It was unable to go into production, Mr. Speaker, in the last couple of years due to the fact that they were unable to obtain a mere $25 million in investment capital because of the atmosphere created in this province by that mining legislation. So you see, Mr. Speaker, the people of my constituency are very happy to see legislation such as Bill 57. It is on their behalf that I stand today and heartily support and commend the Minister of Mines for the introduction of such legislation.

MR. H.J. LLOYD (Fort George): Mr. Speaker, I think some of the other members have covered this

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very well, the revenue and the opening up of the resource. However, I would like to speak just briefly of the benefit to my riding, what it should realize out of this. There will be a great deal of development taking place in the interior of the province, just north of Prince George. Certainly, I am sure, entire communities will welcome the mining business getting back on the track again in British Columbia by the repeal of Bill 31 and the institution of a fair and proper Mineral Resource Tax Act, Bill 57.

I think right from the prospectors to the mining engineers they will be relieved to see mining once more become established as B.C.'s second major industry. Also, a number of people will be greatly affected in my area — the airline charter companies and the helicopter outfits. In the last few years they have had to move out of the province into the Yukon and into Alberta. I am sure that we will welcome them back to British Columbia and into our area.

Prince George is already a distribution centre for the forest industry in the interior and certainly it will be a jumping off point for the mining industry in the future. I think here particularly of the Denison coal project which will be going ahead. I realize that initially it will be serviced from the Chetwynd area, the closest location, but I think in the realm of reality we should look at the development of rail access from slightly north of Prince George — the BCR would be a lot shorter route, or possibly up through the McGregor, whichever proves to be the most feasible. Another access, of course, at a later date will probably be taking off from the McBride area to the southeastern end of that particular field.

I think one of the other things we will look at as well as rail access — I certainly hope the minister or ministers concerned will have a good look at it — is the providing of highway access on a more direct route to Prince George from this Denison project. I think anyone working and living in the community will want as short a link as possible to a major cultural centre, recreational centre and shopping centre. So I think they would appreciate having a link back into the Prince George area, which would give them a more direct access route to the coast and to the rest of the province. So I hope that is one of the things that will be taken into consideration with the development of that major field. It's certainly going to provide a lot of extra jobs for the province, and particularly for people in that part of the area.

Another area of my riding that probably should be considered is the town of Mackenzie. As you know, it relies now on the forest industry; it has two pulp mills and three sawmill complexes, so it is entirely dependent on the whims of the forest industry and the market and other conditions that affect it. But it also lies just south of some major mineral deposits in the province. I think we should study closely the extension of access roads from that area, and the upgrading of their airport. They do have quite a good airport there now and it would be a nominal cost to upgrade it into a major line. So I would hope that we would keep this in consideration for further development.

Mr. Speaker, while Bill 57 is undoubtedly going to give a boost to the entire B.C. economy, it certainly is going to help in the interior of the province and particularly in our area. Another area I can't help but think will greatly benefit is the operation of the BCR. I think, as we all know, it has been operating at a slightly greater loss every year for the last several years. Certainly the movement of the mining supplies, the mining equipment and ultimately the moving of mineral ores should greatly add to the revenue we can expect to get from our British Columbia Railway. I would hope that we could see this get back into the black again, get back to being the railway that all B.C. was proud of and, I am sure, can be proud of again.

I would certainly like to congratulate the minister on the introduction of this bill. I think it is a very fair bill — getting back to a taxation basis rather than a royalty basis. So I would certainly recommend this bill for passage.

HON. P.L. McGEER (Minister of Education): Mr. Speaker, I rise to support this bill now and make a few remarks partly for the benefit of those who are in the assembly, but just as much for the record in Hansard and for those members of the opposition who are sitting in their offices now listening to what is going on in this assembly over their loudspeakers instead of being attending to the people's business.

Mr. Speaker, I suppose the reaction of the opposition — their irresponsibility today — was only matched by their irresponsibility in office and their treatment of the mining industry. Before the NDP came to power British Columbia was noted around the world as having a mining industry which was very high on technology, making it possible to mine grades of ore that nowhere else in the world could be economically mined.

We depended upon the skill and capability of technologists and engineers, the enterprise of people who undertook the harsh job of discovering new mining properties, and relied on the capital of Canadians and others around the world to put these enterprises into a position that would bring employment to British Columbians and tax revenues to government.

In three and a half years of socialist rule in British Columbia there was a dismantling of this industry, perhaps not a conscious dismantling, but one, Mr. Speaker, which was the inevitable consequence of the legislation that was introduced raising the taxes in the province to a point where the industry was no longer economically viable.

I recall, during the election campaign, being in the

[ Page 2914 ]

riding of the hon. Minister of Consumer Services (Hon. Mr. Mair) which, prior to the socialists taking over, was one of the hottest mining areas in British Columbia, with new developments on the drawing boards. One of the people, Mr. Speaker, with whom I spent some time during that election campaign, said that before the NDP had taken over — he ran a mining exploration business — he employed 250 British Columbians. He asked me at that time to guess how many employees he had now, and I said I really couldn't hazard a guess. He said: "Well, then, I'll tell you: zero." He said: "I spent 10 years of blood and guts building up a business employing 250 people, many of them people of extraordinarily high technical capacity."

As soon as the new mining legislation was brought in, the business was destroyed because people were no longer willing to explore. They were no longer willing to explore because they knew no matter how wealthy a prospect was discovered, there was no possibility of risk capital coming in to develop that mine. Why? Because they knew that with vengeance taxation already introduced, and with a government in power that was almost committed to the destruction of the mining industry, there would be no way that their capital would be fairly treated and their enterprise would be a success in the future.

So what was the point? No point at all in new mines being developed. No point at all in bringing capital into British Columbia. So what happened with the people who were concerned with exploring the mines? What happened, Mr.Speaker, is that they went elsewhere, all around the world — to Mexico, to South America, to Southeast Asia, to other parts of Canada. Mr. Speaker, it took 10 years to assemble that team, to develop an industry here in British Columbia. The team is scattered now around the world. That team, Mr. Speaker, cannot be reassembled at a moment's notice. It can't be reassembled over the period of a year. It's going to take someone else, a younger person with the same drive, 10 years of work to rebuild a company of that capability.

This bill which is before the House, Mr. Speaker — ironically, in the absence of that same opposition who, when they were government, led to the dismantling of the mining industry in British Columbia — is a bill which still imposes very heavy taxes on the mining industry. We still in British Columbia have the most heavily taxed mining industry of any democracy in the world, so it isn't going to be easy. Nor do we suggest by this legislation, Mr. Speaker, that the mining industry should not pay generous resource taxes to the people for the rights to mine a non-renewable resource.

The opposition, were they in the House, no doubt will be taking their case — that they would not bring in the proper form here in British Columbia — around the province that there is some kind of giveaway going on. They even made a phony charge to the minister here that there was some conflict of interest in the tax consultants that he brought in to assist in the drafting of the legislation, the same tax consultants, Mr. Speaker, that that NDP government had hired. Had they been wise enough to take some of the advice he gave them, the mining industry wouldn't be in the sick state in British Columbia that it's in today.

It was a case, Mr. Speaker, of irresponsibility when given power and irresponsibility on the actions of that party when they were in opposition. Fortunately, Mr. Speaker, there are still some responsible people in British Columbia such as the Minister of Mines (Hon. Mr. Waterland). There are some cool heads in this assembly, and because of that, Mr. Speaker, and only because of that, are we going to be able to return an industry to its proper state in British Columbia to bring employment to British Columbians, union and non-union alike, and prosperity to the people of this province.

HON. D.M. PHILLIPS (Minister of Economic Development): Mr. Speaker, I, too, just want to state a few words in support of this legislation which is before the House this morning. I remember when the legislation which this bill replaces was passed through this Legislature not too many years ago. I remember at that time warning the government of the day what would happen to the great mining industry of British Columbia if that punitive legislation was passed and brought into law. I don't want to say "I told you so." We don't have to look back. But some of the arguments that we brought forward to the government of the day unfortunately actually happened in British Columbia, and the mining industry was brought to its knees to the detriment, Mr. Speaker, not of the big multinational mining corporations but to the detriment of the ordinary people who worked in those mines in British Columbia — the labourers and the small companies who make it all possible. Those large multinationals, when this legislation was brought in, were they hurt?

AN HON. MEMBER: No, they moved.

HON. MR. PHILLIPS: No, they picked up their bags and they moved to a better climate. I can't say, Mr. Speaker, that I blame them, because, as I said in this Legislature before, liquid cash for investment is very nervous money and it's going to go where there is a secure base.

This legislation restores a sense of fairness, and I hope that now if all of the people of British Columbia — the men who work in the mines, the companies that develop the mines and the taxpayers of British Columbia — are again sharing equally in the benefits

[ Page 2915 ]

of our natural resource, gradually mining expertise and risk venture will once again return to the province of British Columbia. As I have said in this House time and time again, if we are to carry on the social programmes that we have in existence in British Columbia today, our educational programmes, our programmes in human resources and our health and welfare programmes, we have to have a strong economy in British Columbia or those Programmes are going to suffer and suffer to the detriment of the ordinary person in British Columbia.

There is one thing that I do want to put into the record this morning. If you will recall, after the then Minister of Economic Development (Mr. Lauk) was made Minister of Mines, the real engineer, the real architect of this punitive legislation, the then Deputy Minister of Mines all of a sudden resigned his post because the then Minister of Economic Development, who was the new Minister of Mines, did not agree with this legislation when it was passed through this House and fought in his cabinet against it. The then Minister of Economic Development argued, when this legislation was being passed, with the then Minister of Mines, the member for Kootenay (Mr. Nimsick) . He argued against this legislation being put forward because he knew that it would bring the mining industry to its knees.

Mr. Speaker, I want to tell you this morning that that government had planned to change the mining legislation had they been returned to government. They promised in a letter to a mining company: "We will have to review the mining legislation because we realize that it has brought the mining industry to its knees." They planned on changing the mining legislation. Draft copies of that mining legislation were contained in the mining files that were removed from that office and are now presently in the basement of the ex-Minister of Economic Development. Had they been returned to power, Mr. Speaker.... Don't you let them tell you otherwise and don't let anybody in British Columbia tell you otherwise.

They may fight against this legislation, but I want to tell you that they planned to change the legislation similar to the legislation that we have before us this morning. Make no mistake about it. I want that firmly in the record. It gives me a great sense of pride to stand in this Legislature this morning and support this legislation.

MR. G. HADDAD (Kootenay): Mr. Speaker, I'll only be a moment but I would like to add my voice to this, and I would like to congratulate the Minister of Mines for Bill 57. I speak on behalf of the city of Kimberley, which is in my constituency, and this city is completely dependent upon the Cominco mine there. Bill 31 caused this mining company, one of the largest in the world, to leave their low-grade ore in the ground. Now with Bill 57, they will be able to mine everything. This also will lengthen the life expectancy of this mine.

Bill 31 had reduced the life expectancy considerably. There are in the city of Kimberley approximately 8,000 people that are dependent upon their livelihood in this mine. I would say, Mr. Speaker, that the Minister of Mines is to be highly congratulated on this bill, and I would like to congratulate the other speakers for the fine way that they covered all of the main facts. Thank you.

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources): Mr. Speaker, people who spoke in support of this bill covered most of the reasons that it was necessary. I would like to go over the main objectives of the mineral policy of British Columbia as I did on the opening of the second reading of this bill.

This government believes that a mineral policy must ensure for the people of British Columbia the optimum amount of revenue from the exploitation of its mineral resources over the long term. The mineral policy must also encourage exploration for, and development of, mineral resources to increase the mineral resource base and to maintain such a base at the optimum level. This policy must encourage employment opportunities and establish the base for economic diversification. The mineral policy must encourage regional development and the development of roads and transportation systems. The mineral policy must control the environmental effect of the exploration and exploitation of mineral resources.

Mr. Speaker, this spells out what the mineral industry has been doing in British Columbia for over 100 years now. This industry has led the way for the economic base that this province has. Everything we use in our everyday lives in some way depends upon mining. Every person in this province is much more dependent upon mining than they may realize.

In our study of mining taxation systems across Canada we made a computer model of 70 different mines, real mines in this country, and we used varying levels of profit-based taxes and royalties to determine which type of a taxation system will in the long run return a maximum amount of revenue to the governments.

It was proven beyond any doubt that profit-based tax returns a much greater revenue to the government in the long run. Certainly a royalty, especially an onerous royalty such as we had in the last few years, gives you immediate gains but in the long run it does nothing but destroy your resources. It changes ore into waste and it makes it impossible for mining venture capital to earn a return, and therefore such capital will not come to this province. In effect, that type of taxation kills the mining industry.

Mr. Speaker, I could go on for a great length of

[ Page 2916 ]

time reading letters to you which I have received from prospectors, from people not really related to the mining industry in a direct manner, but people in all walks of life and every endeavour in this province, thanking this government for presenting Bill 57, for they know the effect this legislation is going to have on the province.

It's not going to mean an immediate boom in the mining industry, but it's going to give the industry a chance to regain its rightful place in the economy of this province.

Mr. Speaker, the previous Premier of this province in 1972 stated: "Unless we can get a better deal for what we are doing, we will leave the ore in the ground and, " he said, "I mean it." Mr. Speaker, that's exactly what happened, the ore stayed in the ground and the jobs and opportunities for the citizens of this province became non-existent.

The mining industry supports this bill, and the mining industry includes the many, many thousands of people who are employed in it. And it was not the mining companies that elected me, and it was not the mining companies that elected this government; it was the people who work in these mines. The people will realize the benefits from a healthy mining industry.

Mr. Speaker, I move second reading of Bill 57.

HON. MR. McGEER: Mr. Speaker, there are many empty seats on the other side including, I'm ashamed and embarrassed to say, that of the leader of the Liberal Party (Mr. Gibson) . Are we sure that the division bells are working?

MR. SPEAKER: I feel certain that the division bells are working and heard within the precinct area.

Motion approved unanimously on a division.

Division ordered to be recorded in the Journals of the House.

Bill 57, Mineral Resource Tax Act, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. McCARTHY: Second reading of Bill 70, Mr. Speaker.

DENTISTRY AMENDMENT ACT 1976

HON. R.H. McCLELLAND (Minister of Health): Mr. Speaker, basically this is a housekeeping Act. It provides for some 13 amendments to the Dentistry Act. The most significant are two of these amendments to section 3 and 80 that will authorize the College of Dental Surgeons of British Columbia to finance and establish clinics in areas which are presently dentally underserviced.

Mr. Speaker it is with some degree of pride that we say that the College of Dental Surgeons has been very cooperative with the government in attempting to reach these hard-to-service areas with the dental profession.

At the present time there are two or three other areas ready to go ahead with dental services and are being held up only because of a problem with the college making bank loans in order to finance these clinics which will eventually be completely repaid by the dentist who practises there. These amendments will allow the College of Dental Surgeons to take out mortgages on, these clinics. For that reason it is very important, Mr. Speaker, that the Legislature pass this bill as quickly as possible.

Other amendments to the Act authorize the council to require dentists to have undertaken continuing education before having their licences renewed, and likewise to carry liability insurance on behalf of themselves and their employees. Both of these amendments are designed to protect the public's interest. Also, again for the public's protection, there is an amendment which ensures that when a dentist is suspended from practice for an offence against the Act, that dentist will not be able to continue to practise until the decision of the council is overruled by a court of appeal. In other words, while the appeal is pending and a dentist has been suspended from practice, the suspension will be in effect until the appeal is heard. Again, this is a most important amendment for the protection of the public from a practitioner who may be a danger or a menace to the public.

Another amendment, Mr. Speaker, would just facilitate changes to the rules and bylaws of the college. However, it would also rest the power of veto with the Lieutenant-Governor-in-Council — the cabinet.

There is an amendment which requires the council to publish in their rules and regulations — which also in effect means that the college would get the approval of the Lieutenant-Governor-in-Council — the qualifications necessary for persons to be eligible to write the examinations of the college and thereby to become registered and licensed to practice in this province. At present the qualifications are determined simply by a motion of the council of the college. Nobody, because of that regulation, knows exactly what the regulations are — what the criteria are for a person from outside of Canada to become licensed in this province.

There has been some discussion and argument that anybody who has completed training in a dental school listed in the directory published by the World Health Organization should have the right to be licensed here. However, many dental schools included there are in underdeveloped countries. Some are in

[ Page 2917 ]

central European countries where the standard of dental education, Mr. Speaker...there is no comparison with that which is inherent in the North American, the British, the Australian and the New Zealand schools. So what we are saying here is that at least the college must publish its criteria, and those criteria must be approved by the Lieutenant-Governor-in-Council.

Basically, Mr. Speaker, those are the amendments to the Act — basically housekeeping but with those two very important amendments which, as I mentioned, will allow the college and the government to get on with the job of servicing hard-to-service areas in British Columbia. I now move that the bill be read a second time.

MRS. P.J. JORDAN (North Okanagan): Mr. Speaker, I rise to support this bill. Really, in listening to the minister's explanation, I don't think there is too much that can be added. But in speaking for those dentists with whom I have had the opportunity to meet, and also from experience around the province in relation to public need, it is a much-needed bill. While it is termed a housekeeping bill, I think we can recognize that housekeeping should hold — it always has and should still hold — a major position in family life and in government life, because sometimes it is through the housekeeping changes in legislation that we do remove the blocks or the obstacles to some really progressive action.

Certainly, the shortage of dentists in all of North America, particularly in the remote areas, is a matter of public concern. I would personally like to see this approach whereby the profession itself is assuming the financial backing that is needed to encourage dentists to practise in the more remote areas of the province. This is a direct saving to the taxpayers. It assures the public of a more efficient type of service, we hope. I believe that this ensures a high quality of dental service in the more remote areas.

The minister didn't mention it and I would hope that in closing he might make reference to the fact that we have had in British Columbia, well, not a large, but a very effective mobile dental unit service. It was started by the former Social Credit government; it has served very well. It did act as an impetus to young, very bright dentists to go out into the remote areas because of the opportunity to get into practice without a heavy financial burden if they were carrying a number of debts from their training. While this was basically financed in capital costs by the government, it then operated on a solely fee-for-service basis. It proved very effective and it proved attractive to young dentists.

I hope this will continue and, rather than the government financing these services, that a cooperative discussion, in terms of areas of need, between the minister's department, the government and the dental profession would see them also move more into this area. There are some areas where I think it's absolutely impossible to consider that we would have resident dentists, and yet with the mobile-type unit they can facilitate the people and make it economically feasible as well as offering a minimum of inconvenience to the dental staff itself.

Continuing education is always a matter of concern, whether it's a mechanic, whether it's in the area of retailing or wholesaling and certainly in the professions. It's been evident in the dental profession, as with many other professions, that those who attend the seminars and do volunteer to take part in continuing education are usually those who least need it. And those who could benefit from it, either for reason of overwork or perhaps a lack of knowledge of the need to upgrade their training and their practice, have not always taken advantage of this opportunity. Once again, this will ensure, I think, a higher standard of dentistry in the province of British Columbia as well as assuring the public — not only in the metropolitan areas but, again, in the remote areas — of the very latest and most responsible techniques in dentistry.

I think the appeal procedure is self-explanatory. Again, while it is classed as housekeeping, in my view it's a very important aspect of this bill, because nothing could be more disastrous to a patient than having a dentist who is under review still practising when the cause for that review might be his patterns of practice, or the standard that he's practising.

Again, the other major amendment which does outline for all to see the qualifications for a candidate to qualify as a dentist in British Columbia I think is an excellent move. This removes any mysticism or any question that might have existed in terms of who can qualify as a dentist. It removes any suggestion that there could have been discrimination in the opportunities for people from either our own countries or other countries to qualify. It also lets the public know the amount of training and the degree of responsibility an individual must have before they can even begin to sit to qualify as a dentist.

All in all, I would fully support the minister's statements. I would just ask, in regard to qualifying, if the minister would let us know whether this qualification would be published in an international dental journal so dentists from other countries who might wish to come to B.C. wouldn't be so foolish as to come to Canada, for example, and then hope to qualify for B.C. exams when in fact they didn't have the required training. I realize they can write and get this information, but many people don't think this far ahead, unfortunately, and if there is an international publication it might well be a good idea — certainly when this Act is passed — to make it known to all dental schools around the world.

So again, Mr. Speaker, I believe, while it is classed

[ Page 2918 ]

as a housekeeping bill, there are very important amendments in this bill and the standard of dentistry in British Columbia will benefit and thus the public will benefit.

MR. LLOYD: Mr. Speaker, I'd like to join with the member for North Okanagan in welcoming the amendments proposed under Bill 70. Certainly I feel it will help provide dental services to some of the more remote communities in the area. I think probably next to the fluoridation of all the community water supplies in the province, this programme is probably one of the more ongoing programmes.

I would just like to ask the minister for a little more clarification on what is meant in section 1, the guarantees to borrow money and secure mortgages. We've had a situation in Mackenzie where they had a problem attracting dentists to the area because of the high expense of setting up clinics. In that particular case the provincial government loaned money to the area of Mackenzie to establish their clinic. I just wondered if you could clarify just exactly how this power to borrow money was meant. Would it be meant to loan money to municipalities or to groups of dentists, or what role they would actually play in that? Other than that, I would certainly commend the amendments to this bill.

HON. MR. McCLELLAND: Mr. Speaker, I appreciate the comments made by the two members. For the member for Fort George, the power to borrow is meant only for the College of Dental Surgeons itself, which would borrow the mortgage money to set up its own clinic which would then be rented to the dentist who goes into that area, and it would be a self-liquidating mortgage back to the College of Dental Surgeons.

It's intended that the cooperative effort between the government and the College of Dental Surgeons will continue, Mr. Speaker, in that in some areas, such as Mackenzie, as mentioned by the member, it will be the government which will take the initiative and either loan the money to a non-profit society or to the municipality, or the government will set up a clinic.

Sometimes the government supplies equipment to a dentist to help him get started, so the cooperation is there — between the government initiative and the college initiative. It's one that's working very well, and we hope that it will continue and in fact improve.

With regard to the two questions from the member for North Okanagan about, first of all, licensing: I can recommend to the college that they distribute these new regulations wherever they possibly can, and I am sure that might help. But it should be remembered that even though an applicant from some other country may not be acceptable to the college because of the school from which that applicant graduated, that applicant can still become licensed in British Columbia simply by writing the examinations of the Canadian National Examining Board, which are held at the University of Western Ontario. I rather feel that most graduates from schools all over the world know that they can come in. If they can pass those exams, then the College of Dental Surgeons will license them for practice in British Columbia. Graduates from schools which are recognized by the council, and those will be the criteria which will be published in the regulations, need only pass the local examinations which are much less intensive.

In regard to the programme we have going of dental externs — the young graduate dentists who travel throughout the province for 11 months of the year in mobile clinics — yes, by all means that programme is continuing. As a matter of fact, just last week I had the privilege to inspect the mobile fleet which is now up to its hoped-for level of six mobile units. There are a couple of brand new ones out on the road now and there are six young dentists who just left — some of them left last week and I guess they will be leaving for the next couple of weeks — to travel all over British Columbia. They spend a certain amount of time in each of the communities they visit. They are gone for 11 months and it's quite an exciting career for them as a start for their new profession. In fact, one of them is on his second term as an extern, which proves that the programme is both worthwhile to the patients in the communities and to the young people who are getting this much-needed experience in parts of this province.

This programme, incidentally, has been going about 20 years now in one form or another and is now only reaching its full fruition. It bodes well for the service to these communities. The idea of expanding as much as possible the opportunity for both the college and the government to initiate new programmes in hard-to-service areas is to then move the extern programme into another area that needs it. So once we get a permanent or even semi-permanent facility, then the extern programme doesn't have to visit that area and we can send them somewhere else. Hopefully within the next few years we will be able to say that this province is covered adequately, at least, by dental service. I now move second reading of Bill 70.

Motion approved.

Bill 70, Dentistry Amendment Act, 1976, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. McCARTHY: Second reading of Bill 24, Mr. Speaker.

[ Page 2919 ]

BRITISH COLUMBIA FERRY
CORPORATION ACT

HON. J. DAVIS (Minister of Transport and Communications): Mr. Speaker, I would like to say a few words in support of the legislation which would incorporate a B.C. Ferry Authority. For many years there was a separate corporation. In 1968 this was terminated and B.C. Ferries became a part of what is now the present Department of Transport and Communications. I think it's desirable to go back to the old arrangements whereby a separate corporation, a separate Crown agency, operates the B.C. ferries. It is desirable from several points of view, not the least of which is to report and operate as a separate entity which operates substantially along business lines. It will, however, be necessary for that corporation to receive an annual subsidy from the government.

Reference is made in the legislation to a highway equivalent subsidy. The highway equivalent subsidy forecast for the rest of this fiscal year is $25 million. This subsidy may be altered from year to year at the discretion of the government.

Over and beyond the subsidy, however, the ferry corporation will be expected to operate within its own budget. In other words, the users of the ferry system will pay for the costs of the ferry system, with the exception of the subsidy which is provided for in this legislation. The basis of the highway equivalent subsidy may be of interest to hon. members. In arriving at the $25 million figure, it has been assumed that the mileage covered by B.C. Ferries of the order of 600 miles — and that, of course, includes the Kelsey Bay to Prince Rupert run — would be the equivalent of the Trans-Canada Highway, two lanes built in the most difficult territory in British Columbia, namely in the Fraser Canyon, the most expensive sections of that highway, and, of course, at present-day costs. Assuming that that mileage then is of that difficulty of construction and that difficulty of maintenance, we arrive at a figure of the order of $ 25 million subsidy for the current year.

The ferry corporation, operating as a separate Crown agency with this statutory subsidy, will have a reasonable degree of operating independence. It will however, have to report its financial results in accordance with generally accepted accounting principles, and it will be responsible for its own future capital expenditures.

I emphasize "future" because the current assets of B.C. Ferries will be turned over to the new corporation at the cost of $1. Those assets have been in large measure, paid for by the users of the ferry system in the past and there is really no good or equitable reason why they should be paid for again in the future hence the transfer of existing assets at the cost of $1. All future capital assets would have to be arranged for and met out of the income of the corporation, including the highway-equivalent subsidy.

The assets of the corporation would, of course, include all of the vessels, would include the unique terminal facilities. I emphasize the word "unique" — the facilities at the terminals which are unique to the vessels, unique to the ferry system — because otherwise the terminals would be part of the highway system and paid for out of normal government revenues by way of the Department of Highways and Public Works estimates.

The new ferry corporation will have to refer certain matters to cabinet for approval. The appointment of directors is a matter for cabinet discretion. The control of the annual highway-equivalent subsidy is also a matter for the government's discretion. Further matters: disposition of assets would have to be cleared by cabinet; adding or deleting major routes is another item; and certainly major changes in ferry fares would have to be also approved by the Lieutenant-Governor-in-Council. Otherwise, the corporation will operate, as does B.C. Hydro, for example, as do other Crown corporations, with a fair degree of independence, certainly independence in respect to matters such as negotiations with unions, purchase of supplies and so on.

We have had a number of studies made. Already reported to this House is the study carried out early this year by Price Waterhouse. At that time, Price Waterhouse reported that in order to break even the income of B.C. Ferries would have to be trebled, and perhaps even quadrupled. We have moved, since that time, to increase the income to the ferry corporation by raising fares — approximately doubling the fares on the various routes served by B.C. Ferries — and we have effected a number of economies. Nevertheless, the shortfall this year will be of the order of $25 million, will be of the order of the $25 million subsidy which I have described already.

Mr. Speaker, there are a number of details in the legislation which hon. members may wish to discuss. There may be a number of questions which hon. members may wish to raise, but at this stage I would like to move second reading of this bill.

MR. BAWLF: Mr. Speaker, I rise in support of this bill with a few comments in mind.

First of all, basically I think it is a very progressive bill that we are able to put the ferry system into a Crown corporation which will have the capability of standing on its own feet and which will not distract from the operations of government through its general revenues, except to the extent, of course, that the general transportation network in this province is subsidized out of those general funds. In that regard, of course, I think it is a very reasonable proposal that all of the residents of Vancouver Island and indeed

[ Page 2920 ]

British Columbia will accept that the system be subsidized to the extent that the B.C. highway system is itself subsidized.

There are, of course, many people in the province of British Columbia who may never see a B.C. ferry who will be contributing toward that subsidy. On the other hand, those people in some parts of the province who will not, perhaps, have the opportunity to ride on a ferry for many years are receiving in return subsidies on their local or regional road network from residents of Vancouver Island and the Gulf Islands, and so as a reciprocal arrangement it is, I think, quite reasonable.

I am aware that the bill establishes a subsidy which I think is quite generous in that respect. Considering the cost of maintaining a comparable distance in transportation link, highway link, in other parts of the province, $25 million is a generous allocation of funds. It would reflect certainly the most costly link, namely the Fraser Canyon, that could be found in the province. I don't think it is by any means open to question. It is a most generous allocation and one for which I think all the residents of the islands of British Columbia which are served by these ferries will be most grateful.

Mr. Speaker, one other aspect of this subsidy, however — I would like to be assured that it will be indexed, that it will be in some way pegged to the escalating costs of that highway system as the residents of these areas that are contributing to the highways in other parts of the province would be expected to meet the rising costs of highways. I would hope the province would be prepared to adjust the reciprocal arrangement.

With regard to the operations of the corporation, I'm not sure technically, Mr. Speaker, whether those operations can be extended across an international boundary. There's been some debate on this subject in and outside of the House on previous occasions. I am in that regard mindful of a particular programme which I would like to see pursued which is the development of a long-term stable set of links across from Vancouver Island into the Puget Sound area. It has become apparent that the service which has been rendered by the Princess Marguerite which is, as I understand it, presently a separate entity, is not adequate to take advantage of the real interest and demand for a transportation link between Seattle and Victoria.

There is a vessel which is presently idle in the B.C. Ferries fleet, one which is a very fine vessel in its own right, the Queen of Surrey. It was purchased from, I believe, Sweden at a lost of some $17 million. It is a vessel which was unfortunately purchased with a view to a run on which it subsequently proved to be too costly to operate. The characteristics of the vessel are that it is slow in the turnaround at the terminal and therefore the shorter the run the less efficient it is. It was built for the Baltic crossing. It was built as a deluxe ship. It has many amenities on board which have not been utilized to date in the B.C. waters.

However, having been taken off of the Horseshoe Bay-Nanaimo run, I believe it is, and sitting idle, it is nevertheless ideally suited for the Victoria-Seattle run. Of course, bearing in mind the tremendous importance of the visitor economy on Vancouver Island, we must consider the advantages of providing the best possible service to Victoria on the Victoria-Seattle run. The vessel is capable of carrying some 160 cars by comparison to the 60 cars which the Princess Marguerite can carry. It is the type of vessel which can give a very high standard of service, particularly year-round by virtue of its car-carrying capacity. It is not merely an excursion boat. It is a full-fledged ferry.

I could go on at some length about that, Mr. Speaker. I'm hopeful that the minister may be able to find an avenue to maintain that vessel in the corporation and yet operate it across the international boundary and perhaps even find us similar kinds of support and subsidy of a federal nature that are being received in other parts of this country on the eastern seaboard for such an operation.

Returning to the principle of the bill, certainly it is one that will be welcomed, I think, by all British Columbians in that it puts our ferry system in order. It certainly will be welcomed by my constituents and all of the residents of these islands who are directly affected by the ferry service inasmuch as it clearly sets out a fair means of support reflecting the contribution that these people are making to the transportation system of the entire province. I welcome the bill, Mr. Speaker, and I thank you for the opportunity to speak on it.

MR. J.J. HEWITT (Boundary-Similkameen): Mr. Speaker, I rise to support Bill 24, the British Columbia Ferry Corporation Act. I am pleased to see that the minister has brought this bill in to set up the ferry system in this province as a Crown corporation — as a Crown corporation, I feel, giving that system first of all independence and, secondly, as a Crown corporation, making it responsible to the Legislature. I don't see it being any different from B.C. Hydro. I think that the fact that it can enter into or will be able to enter into negotiations and it will be able to acquire its materials and supplies will make it more accountable to the public in regard to its operation and the viability of that operation.

Considering section 11, Mr. Speaker, in regard to the possibility of adjusting fares or fixing fares, tolls and other charges for the use of the ferries, this is important that a Crown corporation can elaborate, set out in its books of account and its financial statements actual costs of operating that system.

[ Page 2921 ]

Sometimes when we have it as a department of government, the total cost — the administration costs of the system — get hidden and we do not truly know the exact amount of the cost of the operation and therefore cannot truly set out to the public the reasons for fare increases.

I think this is important — that the public be aware of the costs of operating the ferries, the reasons for the increases. The Crown corporation has to set all this out in its financial statements. The one protection that the public has, Mr. Speaker, of course, is that any increases in fares would be subject to the approval of the Lieutenant-Governor-in-Council. I feel that there has to be considered, as I think another hon. member has mentioned, the fact of subsidies, the fact that that water between Vancouver and Vancouver Island should be considered as part of the highway system to connect the island to the mainland and should be subsidized to some extent.

The other comment I'd like to make, Mr. Speaker, is in regard to the corporation employing its own employees as employees of that corporation as opposed to public servants. I see under, I believe, section 22 the seniority and the benefits accruing to the public servants to this point — when they become employees of the Crown corporation those benefits and seniority, of course, will pass through to the Crown corporation. I think that is important that that be mentioned, Mr. Speaker, in order that employees who sometimes get a little bit concerned or possibly a little bit misled feel that there is some jeopardy involved when this service becomes a Crown corporation.

One thing, Mr. Speaker, just in closing in commenting on this bill, is I believe that this province should continually push the federal government in an attempt to have the crossing considered as part of the Trans-Canada Highway and that subsidies be forwarded by the federal government to help offset the cost of operating that ferry system.

Those are my few comments on the bill. I think it's a step forward. It creates a Crown corporation that is in effect at arm's length from the government. It will be able to do its job, provide its service and report to the public as an independent corporation and stand in regard to its possible fare adjustments. But it will be accountable, Mr. Speaker, to this Legislature — to the people of the province — but it will be accountable in such a way that all costs incurred will be set out in order that people understand just what is involved in operating that system. Mr. Speaker, I would support this bill. As I say, I think it's a step forward.

MR. G.H. KERSTER (Coquitlam): Mr. Speaker, I would at this time be very proud to associate my remarks on this bill with the Minister of Transport and Communications (Hon. Mr. Davis), the first member for Victoria (Mr. Bawlf) and the member for Boundary-Similkameen (Mr. Hewitt).

I would expressly refer my remarks to the flexibility which this bill, Bill 24, will give to the proposed Crown corporation regarding fare structures. We have recently seen some extremely beneficial alterations in fares — reductions in fares — to various sectors of users of the ferry system. However, I would like to go on record as requesting that the hon. minister when considering any further alteration of rates consider that school students be given a reduced rate when they travel as a group with their teachers and chaperones to Victoria on educational visits to our provincial capital and the parliament buildings.

Again, the Crown corporation concept is a definite advantage to all people of this province — to all users of the system, to all employees, to the employer, all users alike. Again stability will return to the British Columbia ferry system; accountability will return through the operation, on a businesslike manner, of the system under this bill.

MR. LLOYD: I would like to make just a very brief comment in relation to what the first member for Victoria said. I certainly agree that the users on Vancouver Island deserve a subsidy somewhat in line with what the highway costs are, but as the minister himself has outlined, that's a pretty high standard of highway construction which we aren't realizing anywhere in the province right now. Certainly when the economy of B.C. picks up again I am hopeful that our government can restore a realistic highway rebuilding programme to the entire province of British Columbia.

I think one of the other things we have to remember when we talk about putting larger ferries into service on special runs is the cost of the approaches and the highway access to these. Certainly while I think it is a very desirable thing to encourage as much traffic as possible to our capital city and to the Island, I think we do have to bear in mind that there is already this $25 million subsidy.

I am sure a lot of the people in the more remote communities of the north and the interior...when you talk of subsidizing Gulf Islands residents, they think of the smaller communities and residents outside the mainstream of cities. When you are talking of a ferry system like this you are actually talking about a transportation subsidy similar to what B.C. Hydro gives in Vancouver and the lower mainland.

So I think it is something that should be borne in relationship. It seems rather unfortunate that just three years ago we started losing money on this operation. Up until that time it was quite an economical service and the pride of British Columbia.

[ Page 2922 ]

I would certainly be hopeful that with the better operating procedures and the improvement in labour-management relations that should be able to be realized under a Crown corporation, and with a more realistic rate schedule, we will be able to cut down on this subsidy that is necessary for this run.

Again, I am not speaking against the subsidy for the Vancouver Island residents, but I would just like all the members to bear in mind that the people in the north haven't had a realistic highway programme for the last four or five years either. I certainly support the bill, however.

MRS. JORDAN: In rising to support this bill, I don't intend to repeat the other excellent remarks that have been made in terms of the need for this and the hopes for the future in the operation of our ferries in B.C. and an equitable distribution of moneys for highway services throughout the province, whether it is ferries or roads in an area such as that that I represent where we have serious road problems that have developed over the last few years and which do need attention and which, we hope, will get it as the economy of the province improves.

But I would like to address myself to something that may raise some levity in the House but it is an important factor, although small. That is in the new rate structure in relation to equestrian, otherwise known as horses and horse riders. In British Columbia it is a matter of great interest in that area that B.C. has not been able to place in the Olympic team this year, although there are two or three standbys from British Columbia. However, the ability of our western riders has greatly improved over the last few years through more intensive training, a better quality of horse and certainly much better instruction.

We have a number of interior riders who undoubtedly will form our team for the British Empire Games in the next two years. Also, there is no question that we will be bringing along riders for the Olympics in the future if they can get the experience along with the instruction. That experience means that they have to move around to competitions not only in other provinces but within our own province. Most of these people are children from ordinary British Columbia families. They are not wealthy and they are faced with more extreme costs in this sport than almost any other sport.

I would ask that the minister consider a review of reduced fares for amateur horses on the ferries. This could be qualified if they moved in the off-peak times — perhaps Fridays, if they are attending a weekend event on the Island, or Fridays if they are attending a weekend event on the mainland. As I say, this is a small thing. We are talking directly to B.C. Ferries but we have to remember other parts of development and other areas of interest in our province.

Recreation is a major part of our lives in North America; it's a major part of our life in British Columbia. Having just had the opportunity to visit the Olympic site, and as much as I admire it architecturally and as much as I don't intend to get into the cost of it, it does disturb one to see so much money being put into physical facilities for so short a period of time as far as the major event is concerned, and so little help being given to our athletes who are the very people who make the event possible.

I would hope that the minister would take under advisement this suggestion. He may set down any qualifications he sees fit, but remember that horses are very costly to begin with. The training is extremely expensive.

We are competing in the west with Alberta and Manitoba, who have extensive training programmes and which are progressing very well. If our young people or even our older people are to take their places in this part of the athletic world, their ability to compete in all parts of the province is essential, and consideration of cost in this area would be just one small way of helping some of our British Columbia athletes.

MR. C.S. ROGERS (Vancouver South): In listening to the last remarks, I was thinking, well, if we're going to let the horses on, then I suppose we'll have to let the people on who have hot rod cars that go around to the various car races around the province — but I'll try and relate my remarks more to the matter at hand.

In these galleries, under normal circumstances, we usually have a group or two of high school students from various parts of the province. I was quite concerned recently, having received a letter from the principal of a high school in my constituency, when he informed me that because of the increased cost that would be encumbered upon the students or their parents, they were unable to visit these precincts on their annual trek to Victoria. I have entered a notice of a private member's bill, but this is just as good a time as any to discuss it.

If consideration is to be given to transporting the horses and the people who look after horses around the province at a reduced rate, I think the high school students of this province who wish to come to Victoria from the lower mainland or any area should have assistance on the ferries to the point that when they come on an official delegation or an official visit, they should have some type of free or reduced-rate use. I wonder sometimes when I sit in this House whether or not the trip is really worthwhile, but nonetheless it's something that should be given some consideration, and I will ask the minister to take that under advisement.

MR. SPEAKER: The hon. minister closes the debate.

[ Page 2923 ]

HON. MR. DAVIS: Mr. Speaker, very briefly in answer to comments from the first member for Victoria (Mr. Bawlf), certainly the concept behind the highway equivalent subsidy is that it would be indexed. As highway construction and maintenance costs rise due to inflation and other reasons, similarly the subsidies to B.C. Ferries would also increase. He also referred to international routes. B.C. Steamships (1975) Ltd. was incorporated as a separate company from B.C. Ferries to operate the Marguerite because it was on an international run. I think it will always be necessary for us to have a separate corporation or vessels which are engaged in, say, the B.C.-Washington state ferry operations. Those corporations, of course, come under federal jurisdiction, whereas B.C. Ferries is incorporated to operate totally within the province.

The member for Boundary-Similkameen (Mr. Hewitt) referred to federal subsidies. Previous governments have, without fail, endeavoured to obtain a subsidy for B.C. Ferries from Ottawa and have not yet been successful. We are continuing to press hard in this respect and also, incidentally, to press now for a subsidy on the international run of the Princess Marguerite under B.C. Steamships — since even in the original terms of Confederation when British Columbia joined the Dominion of Canada there was provision in a specific clause for federal assistance for international routes.

The member for Coquitlam (Mr. Kerster) referred to the desirability of support for schoolchildren in meeting B.C. ferry fares. Schoolchildren going to and from school do not pay any fares. However, schoolchildren and especially those over 14 who may, for example, be visiting this Legislature from Vancouver require assistance. We recognize this. There is a 25 per cent reduction in ferry fares available to them if they travel by bus. There is also some money available from the Department of Education which, I believe, should be increased beyond $1 per child for tours of this kind.

The member for Fort George (Mr. Lloyd) mentioned losses since 1971. They have skyrocketed. Prior to that, B.C. Ferries operated substantially in the black on operating account. It didn't always cover its capital charges but it certainly met all its wages, fuel and other operating expenses. From the early 1970s onwards the costs have risen very substantially, and we ran into deficits in the last several years running into many tens of millions of dollars.

The member for North Okanagan (Mrs. Jordan) referred to groups other than schoolchildren who might also warrant special rates or receive special assistance from departments of government to meet their ferry costs. Certainly those are under consideration. Bicycles, incidentally, travel free now on our ferries as do, for the first time, senior citizens. They travel free between Mondays and Thursdays anywhere on the B.C. Ferries. I think, Mr. Speaker, that covers the main question s raised by members in this House.

I move second reading of Bill 24.

Motion approved.

Bill 24, British Columbia Ferry Corporation Act, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. McCARTHY: Second reading of Bill 28, Mr. Speaker.

GUARANTEED AVAILABLE
INCOME FOR NEED ACT

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr. Speaker....

MR. SPEAKER: Hon. Minister, if I recognize you, that terminates the debate. I believe there are other members who would like to speak on it.

MR. W.G. STRONGMAN (Vancouver South): I rise today to support Bill 28.

Before entering my remarks, I'd like to preface them by saying that I was elected as an MLA to represent the people of the constituency of Vancouver South, not just as a Social Credit member in this Legislative Assembly, but also and more importantly as a representative of the people who voted for me in that constituency. Some of the members today seem to have forgotten that responsibility. They follow an irresponsible leader with a foolish policy, and they're an insult to this House and an insult to the people who have represented British Columbia for generations. They seem to forget that the people who elected them elected them to represent their constituency and their beliefs. I don't see how they can do that loitering in the halls, drinking coffee in the dining room upstairs.

MR. SPEAKER: Order, please. Would the hon. member please get back to the principle of the bill?

MR. STRONGMAN: Thank you very much, Mr. Speaker, I certainly will.

I'd like to end that part of my remarks by saying I deplore their action, Mr. Speaker. I think that we should move on now to the concept of Bill 28.

1 arrived in B.C. some 10 years ago, and I understand and recognize that its record in the field of social assistance in this part of the country has been untouched by any other area. A generation ago, the Social Credit government under Premier Bennett began a system of social assistance that has been unparalleled anywhere. This programme was

[ Page 2924 ]

expanded by the NDP government and they should be commended on some of the programmes that they brought forward. As an opposition member, I envied some of the things that they introduced. I support them and I am pleased to say that our party has developed them to an even finer level than they have been up until now.

One of the comments that I do have to make, though, is that although their answer to Steve Austin couldn't jump fences or run 80 miles an hour and didn't have bionic arms and legs, he did cost considerably more. Those of you who have young children might understand some of the humour behind that if you missed it.

In my opinion, the highlights of Bill 28 are beyond the attack of any responsible opposition. The previous Mincome programme is extended to more people over 65. The programme continues for people from 60 to 65 and, even more significant, we have extended the benefits to encompass people from ages 55 to 59. All of these programmes are tied to the cost of living, something that has not been done up till now and something that I support wholeheartedly.

PREP: Provincial Rehabilitation and Employment Programme. For the first time, there's going to be a programme in this province that will attempt to get people back into the work force who are able to work and are now on social assistance. In conjunction with Canada Manpower, this programme has been designed to get up to 12,000 people back into the work force — people who are now having to use social assistance. Twelve thousand jobs created by Mr. Ron Stew, who is directing the programme. It's a programme I think all of us should be proud of.

Single-parent families, especially where the mother is the head of the household, are increasing in numbers, not only in this jurisdiction but almost everywhere in North America. This type of family is usually deserted, left to fend for itself alone, badly in need of help if the family unit is to stay together.

The GAIN programme provides extended health coverage for the mother and children during periods of employment, works towards exemption of more earned income to encourage independence, provides increased income to meet the costs of shelter, food and clothing and, likely the most important benefit to people, especially women in this particular category, establishes a collection agency for alimony and support payments on behalf of mothers in receipt of social assistance and their children.

Mr. Speaker, in closing I'd like to say that I'm proud of the minister who brought this programme forward. I'm very proud of his staff. It's the type of legislation that everyone in this province should support. I'm proud of being part of the government that has brought it towards its fruition. Let's hope we pass it soon.

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr. Speaker, when this bill was last discussed and debated, certainly a number of questions were posed, and for the most part those were answered at the time.

I'm just sorry that some of the other members which were in the House then are not here today so that I might provide the further answers, although I'm hoping that maybe they're listening on their speakers in the offices.

The GAIN legislation, as was mentioned, provides a number of benefits that previously didn't exist. Furthermore, it certainly gives a guide to all in one very neat package for what exactly we intend to do with respect to social services in British Columbia.

It allows us to provide the additional income in the areas of greatest need, particularly the groups aged 55 to 59, and to also give additional assistance to single parents and to the handicapped.

The question was posed as to why so much of this had to be dealt with in regulation and why actually it could not be spelled out in the Act. The answer is simple: you cannot, because it's changing too often to govern these things in legislation. They must be dealt with through regulation. This is historically so and it's being done again, and actually we're now in the process of negotiating with the federal government the highest possible rates that we can pass on to these recipients, or to these potential recipients that we're attempting to give additional assistance to.

Actually, comments were made with respect to the authority given in the legislation to the minister, and I would like to point out now that there's no more, no less, but certainly no more authority here than there was in the previous legislation. In fact, it makes it very specific, very clear, and removes many of the questions that might otherwise have been put. It's spelled out very accurately in the Act so that everyone will know just exactly what authority exists there and what can be dealt with through regulation or otherwise.

The Act will allow us, as was mentioned, to establish a system of incentives, benefits and other programmes for the purpose of encouraging income assistance to work or gain work through training, rehabilitation or other employment services.

It also, as a further encouragement, allows us to extend the health benefits to single parents, ones taking employment, and to the handicapped if they wish to take employment even for a short time.

It allows us to share costs of wages for handicapped people, and this again is determined by regulation since much of the assistance to employers employing the handicapped will be a cooperative effort between ourselves and the Canada Manpower offices.

Again, we are negotiating now the highest rate and

[ Page 2925 ]

the greatest amount of benefit that might be extended to the handicapped through these particular programmes. While we have some assurances already from Canada Manpower as to the amount they will share, we're still attempting to make it available to more and more of the handicapped people that would like these services made available to them.

For the first time, too, there is not only the penalty for fraudulent claims, but there is the onus on the recipient of income assistance to report any change of income, of circumstance or status. The onus is now clearly, through legislation, on the recipient. If, in fact, such reports are not made, then we can take whatever action is required to assure that the requirements of the Act are being attended to.

There's also a section which deals with refusal to accept employment. I think it's very clear in prior policy statements. We've certainly made it clear there that if a recipient able and capable of accepting employment refuses to do so for any number of reasons as listed, then in fact they may be cleared ineligible for social assistance.

The question is to whether, perhaps, there isn't too much discretion given in this area and other areas is answered, I believe, best through the section of the Act which requires us to establish a tribunal to receive and attend to any and all appeals that might come forth from individuals or groups.

Mr. Speaker, I move second reading of Bill 28.

Motion approved.

Bill 28, Guaranteed Available Income for Need Act, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. McCARTHY: Mr. Speaker, by leave, I move that we revert to order of Committee of Supply.

Leave granted.

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

ESTIMATES: DEPARTMENT OF LABOUR

On vote 123: minister's office, $99, 58 1.

HON. L.A. WILLIAMS (Minister of Labour): As the committee addresses itself to the several votes in this small Department of Labour, I would like to say a few words at the outset which may assist the members in the consideration of these estimates.

In the first place, let me say that the Department of Labour is too often looked upon as one which involves itself almost entirely in the resolution of matters which affect employees and employers or the unions representing the employees and the employers. Certainly that is the high-profile part of the department and one that attracts a tremendous amount of attention. I don't in any way suggest that the importance of those activities must not be recognized. And in so saying, may I pay a special tribute to those members of the department who have involved themselves, under Associate Deputy Minister Ken Smith, in the matter of mediation services which are made available to parties during the negotiation of collective agreements.

While one often reads of the activities of industrial inquiry commissions, special mediators and other appointees of the minister's office, let me assure you that by far the vast number of collective agreements which are resolved in British Columbia, and requiring the services of the Department of Labour, achieve fruition through the hard work and long hours of the mediation officers. They are not subjected to any great publicity, and so it should be, because the nature of their involvement with the parties to collective bargaining negotiations are such that they can best perform their activities when they are not subjected to the glare of press coverage.

Nonetheless, these men in the mediation services are highly skilled in matters of collective bargaining negotiations. They spend long, long hours; they make themselves available at any time of the day or throughout the week, and they separate themselves from their families for considerable periods of time. I think that it bears recognition for the service they perform to this province, and to the employers and the employees upon whom our economy depends.

However, Mr. Chairman, aside from the aspect of mediation services, collective bargaining relationships and those other activities relating to employers, employees and their unions, I would like to draw specific attention of the members to the other side of the department, and particularly to that aspect of the department which falls under the responsibility of the Associate Deputy Minister, Rangit Azad, and often referred to as the manpower division — that aspect of the department which covers pre-apprenticeship training, apprenticeship training, industrial training and other manpower aspects. It's probably, quietly, one of the most significant areas of responsibility that the Department of Labour has.

In order for a province such as British Columbia to assume its rightful role and to make a productive contribution to the economy of this nation, and for the benefits of the citizens of this province, it is essential that we have available to us a continuing supply of highly skilled manpower. The activities of this division contribute, to a major extent, to filling this great need.

As we embark upon new initiatives in economic development, one must always remember that

[ Page 2926 ]

however great the planning may be, unless we have the skilled men and women in our work force, the initiatives will fail. They will fail unless we seek other avenues to obtain that skilled manpower, either by robbing existing industries, or indeed by achieving our manpower needs through the processes of immigration.

Each of these activities, while they have been carried on in the past, nonetheless create for this province very serious social consequences. When a new industry achieves its manpower requirements by borrowing the skilled employees from another, then it creates a dislocation in an already existing and established industrial field.

Similarly, when we supply our needs for manpower through the process of immigration, we deny to some of our own men and women, boys and girls the opportunity to achieve a place in the work force, and as well we present ourselves with other serious social problems — the provision of houses, the matter of language training, and other similar aspects.

The manpower division performs another very major function, and that is the co-ordination of programmes with the federal government. There is a divided responsibility as between the provinces and the national government in this whole field of manpower — indeed, manpower and immigration.

Too often it is forgotten that under the British North America Act the province has a responsibility with respect to matters of an immigration nature. I assure you that through the Department of Labour these things are not being ignored. It was my pleasure to attend a federal-provincial conference in the city of Toronto a few weeks ago, at which all of the manpower ministers of the 10 provinces were addressing themselves to this particular problem — and while it may seem to be insignificant, some significant advance was made at that meeting following a number of staff meetings prior to the meeting of ministers; and we have finally achieved with the national government a consultative process which has never been in place before.

We look forward, at the meetings to be held in late September or early October of this year, for a continuation of those activities which will ensure that there is a better co-ordination as between the two levels of government in this very important field, each having a responsibility.

The decision to consult is one which is extremely important to ensure that the programme, of the national government and the programmes carried out by the several provinces do not conflict but rather support each other.

In this field of manpower, as the hon. Minister of Human Resources remarked in his closing remarks on his legislation a few moments ago, he is involved too. It is interesting to note the number of departments of government who come together on this whole subject of manpower. The Department of Economic Development, the Department of Education, Department of Human Resources and indeed the Department of Health as well are all directly involved in this concept of manpower. It is with some pride that I find that the Department of Labour is in a position to assist those other departments in a co-ordinating function in this most important responsibility.

I might say, with respect to pre-apprenticeship training and apprenticeship training, that this government, by actions on the part of the hon. Minister of Education (Hon. Mr. McGeer) and I, together with our senior staff, are planning new and exciting initiatives in this regard.

We find that for too long there has not been co-ordination between these two departments in this particular field, and as a consequence too little attention has been given to vocational and industrial training in our educational system.

It has always been easy in this province for a young man or woman who decides to pursue his or her career in education to go to one of the learning institutions and take one of the subjects of arts, for example, or to study the sciences, or in the professions to achieve their destiny in that particular regard. The government has made available significant facilities to enable this kind of training to take place. Yet far too little attention has been paid to vocational and industrial training.

The consequence of this has been that in British Columbia we find that we are today lacking in those skills — mechanical trades — which are so essential for our economic development. Let me assure you, Mr. Chairman, that as a result of the actions which are being taken by the Department of Labour and the Department of Education, together with active support from the Department of Economic Development, this government intends to see that that oversight is corrected in the shortest possible time.

Mr. Chairman, beginning with the individual votes there will be questions which members may wish to ask dealing with specific details of the departmental functions, and I look forward to their contribution in this debate.

MR. LLOYD: I have a few comments I'd like to make on the Department of Labour's estimates. I am very pleased to hear the minister stress the cooperation that is going to be realized between these unemployment insurance programmes — the hiring services — the Department of Human Resources and the manpower services under the Department of Labour to make sure that a better opportunity is given and more incentive is given to people to gain employment.

I think, along the line of the job-training

[ Page 2927 ]

programmes, another thing we should try to encourage is an apprenticeship programme again in the province. In a lot of the industries when you hire a worker off the street, you are expected to pay the going wage for him. This creates a problem for industry which is already working on a limited profit margin.

I think it's something that was common practice in the old country years ago to have an apprentice wage where, when you are breaking an employee in and he's gaining experience, the company is given a little relief on the wages. By the same token it creates an incentive to hire students or people not so well qualified. I think this is something that we should look at. I don't know what this resulted from really, probably a certain amount from union activities, insisting that people coming off the street get the same wages as the union worker who is operating next to them.

I know that particularly in some summer hiring programmes like the Forests department, this has created a problem in hiring students. Back a few years ago it was common that they would be hired at a lesser rate than the regular employees, and because they were inexperienced and young, no one expected them to put in a full heavy day shift. But when you have the circumstance of them coming out and being hired at the full wages of regular employees, I think it's only natural that their supervisory staff will make a bigger effort to control their activities and ensure that they are trying to live up to the production of the older and more experienced operators.

I think it creates ill feeling both ways. The people who have spent years learning their trade...all of a sudden a young fellow comes along and he's getting the same wages as they are. So I think this is unnecessary and it also creates an atmosphere that you're entitled to these wages. It's just a going thing. It's not something you have to develop a skill for or put any particular effort into.

Again, I think this is pretty dangerous to young people nowadays. They lose their perspective and sense of values, and I think it's something that should be looked at quite hard. While I think we all realize students going ahead in their studies require as much funding as possible, still when you look at the overall number of students that could be employed if the wages were a little more reasonable, I think it would really be beneficial to a larger number if these wages were structured along an apprenticeship-type of wage.

One other thing I hope the Labour department is going to look at is the closed shop and the union hiring hall practices which restrict and disallow local residents opportunities to work on projects in their own areas. Here I am referring to highway projects or hydro line clearing projects, gas or oil line construction, railway construction and so on. Quite often the hiring practices are controlled through a union hall and people are sent all the way from the coast up to different areas of the community, while residents living right in that community can't gain employment on that particular project. I think it creates unnecessary hardship plus an unnecessary expense of putting up accommodation for workers from other parts of the province.

Quite often they have a problem even finding enough qualified workers, and I think, because of the additional cost to the public purse, that it's something we should look at. We have an instance right now at Hudson Hope. I was talking to some people up there the other day. They can't get work on this project No. 2 of the Hydro programme because the union hiring hall decrees that you have to belong to that certain union. They're sending the people out of the lower mainland and not allowing local residents to join the union.

Speaking of union problems and what they create for employment, I think the right to picket allied organizations and the strikes or walkouts by key unions are things that are going to have to be looked at in this province. When we have the type of unemployment that we're facing these days, I think it's very essential that the Labour department studies very carefully this right to strike allied unions. I believe it's been used indiscriminately many times and it's forcing a lot of people who aren't even concerned in that particular labour confrontation onto the unemployment roles as well. Besides which, of course, it's stopping many of our key industries by not enabling them to keep a steady work programme operating.

The other efforts that I think the Labour department should look into is trying to establish or restore the rights of the individual members in unions...by secret ballots, on whether they're satisfied with labour negotiations on their behalf and on the operation and election of the officers in their unions. I am not trying to generalize, because you can't generalize. Some of the unions are very fair and have provided very worthwhile services for their members. But it's been heard time and again in the last few years that the larger and ever-larger unions are getting completely unresponsive to the individual members. I think that's quite dangerous, particularly when you see government employee unions banding together in one federal union.

I think the individual member is a pretty small member of that organization and certainly his rights and his problems aren't going to get a fair hearing unless we are very careful with the responsibility that should be allocated to that particular union.

Another problem, I think, that we didn't really have to face this year was the changes in the Minimum Wage Act that came in just recently. It seems rather odd with 90,000 people out of work in

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the province that we should be looking at raising the minimum wage at this particular stage of the game. I think this is something that could have been let go for a while. Some of the smaller businesses operating in the province just use part-time help. This has created quite a hardship for them in securing a stable work force.

The other part of the change in the Minimum Wage Act relates to the overtime benefits, and I can't really see where this had that much connection with minimum wages as such. It certainly has created a problem in seasonal industries such as the farming or logging industries where they're working on a very restricted season and when the weather permits. I think we've all heard the saying: "You make hay while the sun shines." Well, certainly it's just as true in the logging as it is in the farming. This is something I'd like to have the Labour department take a very good look into because I think it's creating a lot of unemployment at this particular time.

I would like to compliment the Minister of Labour and his staff for their efforts made over the past several months to restore the BCR, for one, to operation. This strike was really causing a very crippling effect on our entire economy up north. I think the patience that the minister showed and the fortitude in sticking with this and getting this problem resolved....

It's unfortunate that we had to have that much government intervention, but certainly this is something that, unless the unions are going to take a more responsible stand, this government is going to have to show leadership in. We just can't let the public or the taxpayers be blackmailed, and I don't think we can bear that sort of thing at all. But I would like to compliment his staff. I think they've done a terrific job on that. Thank you, Mr. Chairman.

MR. L.B. KAHL (Esquimalt): I'll be very brief in my comments, through you, to the minister.

I first want to compliment the minister and his staff in the way they've handled the labour situation in the province. It has been very trying times and I think they've done an excellent job.

I do have, however, a couple of concerns that have been brought to my attention by constituents of mine, and they basically concern the Workers' Compensation Board. The Disability Rights Association is a group of individuals. The president lives in my constituency and they have been of late very active in attempting to communicate with the Workers' Compensation Board regarding claims and how they as individuals feel they have been treated by the board over the past few years. I would like to make a suggestion, through you, Mr. Chairman, to the minister that someone in the department be made available to take a closer look at their situation. They have presented many cases. One of the gentlemen, a Mr. Miller who is a constituent of mine, has I believe been in your office, Mr. Minister, and has discussed various things with you.

I would suggest that the purpose in looking at the association's cases are twofold. No. 1, it's felt by a great number of the members that they have not been treated fairly and, No. 2, the Disability Rights Association also puts forward proposals that would return a number of the people in their association to the work force.

They have what's called "Operation Mainstream." In my opinion they have some extremely good ideas, and I believe they are worthy of investigation. I believe that we should spend some time with the association to see if there are a number of those people who indeed have not been treated as best they could and also to see that those who do have some productive days and some productive hours be given the opportunity to use their time in a more beneficial manner.

I suggest that to you, Hon. Minister, and I do hope that someone on your team can look into that.

Vote 123 approved.

Vote 124: departmental administration and support services, $1,358, 260 — approved.

Vote 125: manpower training and development, $12,836, 693 — approved.

Vote 126: employment programmes, $137,384 — approved.

Vote 127: occupational environment and compensation advisory service, $1,079,800 — approved.

On vote 128: services to collective bargaining (mediation, arbitration, industrial inquiry commissions), labour standards, and human rights, $3,254, 404.

MR. G. MUSSALLEM (Dewdney): Mr. Chairman, I would have preferred to have made my remarks at the beginning before the minister's vote had passed, but I selected this vote, and trust I am in the right category.

I feel that in British Columbia we have come to a sorry pass with our labour negotiations. While to the south of us in the United States we find labour using judgment and understanding, in this country we find ourselves tied into a whirlwind that we cannot control. It is to me a serious situation and I do hope the time will come when we will approach the area of labour maturity — not only labour maturity but perhaps maturity in management as well. I see no difficulty in appealing to management because management needs

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labour, and labour needs management, and management will move. But it is the labour organizations of this country that we must look to to bring back our competitive positions in the markets of British Columbia and the markets of the world.

The least of these matters is not the civil service. I am really distressed with the civil service position and its allied associations. I am distressed because we find wage settlements totally out of control. We see the ferry system — wages there completely out of control — and on all facets, not only civil service for the government but also civil service for the municipalities in all these areas. I appeal to the Minister of Labour that the time is here and the public is ready. I think it should be done today, as soon as possible — when we'll have to set the civil service up not to be the poorest-paid civil service in Canada but the highest paid. But tie the civil service to the settlements in industry — not industry to the civil service. We cannot hope to compete in the markets of the world if we are going to set our wages by the civil service which can, without trouble, pass on their costs to the public. Industry cannot do this, and as a consequence we are losing our markets daily.

The Minister of Labour has a tremendous responsibility in meeting the challenge. It's not going to be an easy thing, but it is vital, very vital, that we move in the area, and that the right to strike in the civil service has gone too far. We have today taken the power of the government of the country away from the government and given it to the ones who are controlling the civil service, labour unions. And with trouble of this kind, it is unreasonable and unfair to expect the government to continue to administer when they have no choice and have no binding ability.

I recall a very famous remark of a previous minister when he said: "The negotiator was meeting with a gun to my head." Well, gun-to-head negotiations must stop. I say today that we are leading on to a position of anarchy, that anarchy is coming toward us faster than we can cope with it. We see right in this House today an example of anarchy when we see the opposition abrogating their duty. We find this House forced to pass legislation without the benefit of the government in council. We can also abrogate our responsibility and walk out....

MR. F.A. CALDER (Atlin): They should be expelled from society.

MR. CHAIRMAN: Order, please!

MR. MUSSALLEM: We ourselves could also abrogate our responsibilities by leaving here, but it's not our.... Our duty is plain: we must carry on.

But in the matters I have mentioned to the hon. Minister of Labour, I hope that we will put back the system where the civil service was the best civil service in Canada, where the settlements were based.... They were not before, but they should be based on the average of the highest paid in industry. Civil service must be paid well, but they must not set the tempo, because industry cannot keep up. Today, even now, our great lumber mills are in trouble. Even now they cannot sell their product, and it's all because of settlements that are unconscionable and improper. There is no other way to go.

I ask the Minister of Labour to set wheels in motion in the civil service and also in industry. I assure you that management will solve it, because we are almost past the point of no return in British Columbia, and unless we move quickly we can be in very deep trouble.

HON. MR. WILLIAMS: Mr. Chairman, I wish to thank the member for Dewdney for his remarks in the debate; however, I would just like to express some regret at his suggestion that we are approaching or have a condition of anarchy as far as our civil servants are concerned. Let me assure you that is not my view of the matter. All of the evidence indicates, in fact, to the contrary. The member does, however, raise two very significant points, and I wish to assure him and the members of the committee that the government is addressing itself to both of these.

The first is the creation of differing attitudes between management and labour in this province. The activities of the Department of Labour over the past six months have been directed at this particular aspect, and I think that the moves that have been made in the resolution of difficulties with British Columbia Rail — I am not talking about the particular dispute, but the legislation which you dealt with under Bill 58 — are an indication that the government wishes to create this new attitude between management and labour whereby there can be a coming together, with assistance if required, in order to assist them in the resolving of their problems.

I can also say that in my discussions with representatives of unions and of employers there seems to be a growing awakening to the fact that in this province they have got to sit down very carefully and consider their particular problems and the consequence which the incautious resolution of those problems can have upon the economy of this province and upon the very welfare of the employers and the employees who are directly involved in those negotiations. Over the next few months I hope to be able to announce some positive step under the auspices of the Department of Labour which will allow this to continue.

A recent study has been made of experiences in other parts of the world. I am speaking of the study made by Mr. Charles Connaghan following his visits to Germany. We find opportunities there which, for

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some reason or another, we have completely overlooked in Canada and certainly in British Columbia. I think we can learn much from the experiences in that country and there is much that we can import to British Columbia which will improve these attitudes which are so essential to the resolution of difficult labour-management negotiations.

One of our own Crown corporations, Kootenay Forest Products, has moved in this direction. It did it under the previous government, and I give them full credit for it. There are two workers who are directors of that corporation and recent information has come to me as to how well that has functioned. It's to such an extent that through the Hon. Minister of Forests (Hon. Mr. Waterland), an invitation has been extended to the president of that corporation to visit us in Victoria and discuss in some detail the experiences they have had with that exercise in industrial democracy.

Now the other subject raised by the member is the claims that the public service and government make upon our economy. This is a matter of very grave concern to this government. We recognize that while our public service must be properly and adequately paid, and while we must have the most efficient, most professional civil service that is possible — one which will enable us to discharge the responsibilities to the people — nonetheless, there must be a real relationship, an honest relationship, between the demands which we make upon the taxpayers in that respect and the ability of our economy to meet those demands.

I can assure you, Mr. Chairman, that steps have already been taken by this government to study this problem and to determine the methods by which the difficulties can be avoided. How quickly this programme will develop I cannot say, except to assure you, the members, that it is being actively pursued at this time.

MR. ROGERS: Specifically regarding this estimate that we are on, we have seen in the last month that we have been in office in Victoria several strikes which have been very knowledgeable to the public. Everyone has been aware of them — the hospital strike, the problem on the ferries and the problem on the BCR — and because of their horrendous importance to the province they get a lot of very speedy action. All strikes deserve some credit, I suppose, and the longest strike continuing in this province continues at Marpole, in the constituency that I share with the second member for Vancouver South (Mr. Strongman) . That's at the Hunting-Merritt shingle mill.

Now obviously one shake and shingle mill in the province shut down for three and a half, almost four years doesn't affect the entire economy of the province, but it does affect the lives of the 120 men and their families and all the interrelated groups that are affected by that group of people who are on strike. I believe it is the longest strike continuing in the province which has had a picket line for that period of time.

It is a very unfortunate situation that this one group of individuals has been chosen by an international union to be singled out as the test tube and the proving ground for breaking into the entire forest industry contract. The men and their families have become pawns for the internationals. I know that the minister has given it his attention, but this is he estimate on that particular subject, and I take this opportunity just to mention it once again. These people are patient, but one wonders at the limit of heir patience.

Vote 128 approved.

Vote 129: Labour Relations Board, $1,114, 935 — approved.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mrs. McCarthy moves adjournment of the House.

Motion approved.

The House adjourned at 1:15 p.m.