[ Page 3053 ]

CONTENTS

Routine proceedings

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

On vote 130.

Mr. Nicolson — 3053 

Mr. King — 3055 

Hon. Mr. Waterland — 3055

Mr. Nicolson — 3057 

Hon. Mr. Waterland — 3058 

Mr. Lauk — 3059

Hon. Mr. Waterland — 3059 

Division on vote 130 — 3062

On vote 137. 

Mr. Gibson — 3063 

Hon. Mr. Waterland — 3063 

Mr. Gibson — 3063 

Mr. Nicolson — 3063 

Hon. Mr. Waterland — 3064 

Mr. Gibson — 3064 

On vote 138.

Mr. Gibson — 3064 

Hon. Mr. Waterland — 3064

On vote 139.

Mr. Gibson — 3064

Hon. Mr. Waterland — 3064

On vote 141.

Mr. Gibson — 3065

Hon. Mr. Waterland — 3065

On vote 75.

Mr. Skelly — 3065

Hon. Mr. Waterland — 3065

Mr. Chabot — 3068

Mr. Skelly — 3069

Hon. Mr. Waterland — 3070

Mr. Skelly — 3070

Mr. Lloyd — 3071

Mr. King — 3071

Mr. Lockstead — 3072

Hon. Mr. Waterland — 3072

Mr. King — 3072

WEDNESDAY, JUNE 23, 1976

The House met at 8:30 p.m.

Orders of the day.

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

On vote 130: minister's office, $80,964 — continued.

MR. L. NICOLSON (Nelson-Creston): Mr. Chairman, it is rather interesting to hear some of the information that came from the minister before the supper break. It was revealed that he had three meetings with Edgar Kaiser Jr., and one could maybe surmise and start asking questions, I suppose, about how many meetings he had with Bruce Pepper and various other persons.

But what concerns me is whether the minister discussed the levels of profit. Did he discuss the price of a ton of coal and what Mr. Kaiser might have felt would be the price of coal next year or maybe six months hence?

Mr. Chairman, we have a rather unpleasant situation in all of Canada, I suppose. We have the uneven, unfair manner in which the Anti-Inflation Board and price-and-wage controls are being administered with, I think, only three efforts to control prices and hundreds of efforts to control wages and to roll back wages. This also affects something which I believe the minister should be vitally concerned with, and that is the situation as it particularly involves the Michel Local No. 7292 of the District 18 United Mine Workers of America. These are the miners who mine the coal.

As we know, just since 1974 there has been a meteoric increase in the price per ton of coal — from about $18 a ton in 1974 to what I believe is now $52 a ton. Wages during that period, including what would have been a proposed increase of 17.42 per cent if achieved, would only have increased 35 to 40 per cent as opposed to a 300 per cent increase achieved by Kaiser Resources Ltd.

So we have today miners who negotiated a settlement consisting of a total increase of 17.42 per cent in the first year of an agreement, and 12 per cent in the second. The contract was rolled back by the Anti-Inflation Board to a settlement of 9 per cent and 6 per cent in the following year. Now these members have taken job action and it could lead to diminished revenues. Today we see that our provincial government has also signed an agreement with the federal government, which was released in the House today, compounding the inequity.

I would like to quote just a little bit from the memorandum of agreement which was signed March 3, 1976. Of course, while that minister was perhaps having discussions with Edgar Kaiser Jr. and not asking what Mr. Kaiser might have thought to be a decent return to the people from the one-time harvesting of the coal resource which, as we learned, is being harvested with a royalty being paid in Alberta of $9 per ton.... Here in British Columbia there is a reluctance to go up to $2.50. If I might disagree even with my leader, I think my leader was remiss in not demanding that we go to $5 or more in view of the fact of the way things sit today.

I would like to say that perhaps if these workers could see that government was interested in getting a fair return, that the fruit of their labours was not just going to international mining corporations in terms of profits — and going to feed the various levels of industry, mostly in Japan — they might see some reason for cooperation.

But why should these miners of Local 7292 of the United Mine Workers of America who toil there in the Sparwood area be expected to cooperate when they see a 300 per cent increase in profits, when they see no return to the people? If they could maybe even see that the government was taking $9 a ton and using that to introduce social programmes — if they could see some return of that money into the Elk Valley in terms of facilities....

A new hospital has always been quite a problem there — location of a hospital in Sparwood. Yet that minister, Mr. Chairman, didn't even see fit to raise the issue, the thing which is so obvious. I think that the most exciting area in his field today, here in British Columbia, is the resurgence of the coal industry, and certainly it's incredible to think that that minister could go and have such a discussion and not talk about a better return for the people of British Columbia.

Here we see that there's been a 300 per cent increase in price for Kaiser resources, and we see that wage settlement which if they had got the full 17.42 per cent in the first year would have meant a total increase of from 35 to 40 per cent, depending on various categories in the same time period. Now how can a government that isn't attuned to what is happening in this province...? How can the minister who should be most attuned to the revolution which is happening in this province in terms of the emphasis in the mining industry, the resurgency of coal as an energy source and this dramatic increase in price, which is just about as dramatic as the increase in a barrel of crude oil...?

So here we are. We are one of the OPEC countries in coal and this minister...three meetings with Edgar Kaiser. Has the minister met with Bruce

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Pepper? Has he discussed possible royalty increases with Bruce Pepper? Has he discussed it with the executives of Fording? Is he not aware of this dramatic increase, and is he not aware that the workers of this province are getting pretty sick and fed up with being expected to slow the swell of the Anti-Inflation Board, when there are 300 per cent increases in prices being allowed and going ahead and unheeded when at the same time wages being increased over that same period of several years — since 1974 — are limited to 40 per cent?

Now it might make some sense if they could see that the province was getting a decent return. When we first became government the royalty on coal was two bits, and we raised it to $1.50. I'm sure that if we had raised it each time, of course, everybody would have said that we were going to force the coal industry out of British Columbia — those prophets of gloom and doom. In fact, we didn't raise it enough. But we had an intention to at least raise it to $2.50, and this minister hasn't moved one cent in that direction. So is it little wonder that we can expect people who sign an agreement...?

This is the purpose of the agreement, Mr. Chairman.

"It's the intent of the parties and the purpose of this agreement to preserve and continue the harmonious relations existing between the parties, to ensure peaceful adjustment and settlement of grievances, claims, disputes and differences which may arise between employer and its employees represented by the union."

Peaceful adjustment and settlement of grievances — is this not a grievance, Mr. Chairman — a rollback?

I know what the minister will get up and say. He'll get up and say: "Well, what do you expect them to do? Sell it to the Japanese for $30 and then when the world price is $52, do you expect them to give it away? No, Mr. Chairman, I don't expect that. But what we do expect and what I think some of the miners might accept would be if they could see that their government was not giving it away. Because whether Kaiser, the American corporation, gives it away to Japanese industrial enterprises — that's one question. But the fact is that British Columbia is really the one that's giving it away. It's just shocking that the minister should have a discussion with Edgar Kaiser and not even be able to recall having mentioned the possibility of increasing the royalty and when, that we should be this far.

There was no hesitation, no hesitation whatever, in bringing in all kinds of other tax increases — which have proven to be disastrous to business, ferry increases which have proven to be a disaster to the tourist industry here on Vancouver Island — things that have probably turned out to generate less revenue in total than were actually being received before.

In fact, Mr. Chairman, we have a tax-fed depression in this province. While things are improving in other sectors of the country, in British Columbia things are getting worse and worse. Here is one area where we could take a bite out of the economy that would be non-inflationary. If we were to take a bite out of these coal revenues which have increased — increased since 1974 from $18 up to over $50 — if we were to take a bite out of that...that is export. That is the argument and that's why they went to the Anti-Inflation board and said: "Exempt this from controls." I don't disagree with that, but make sure that we get our fair share. How could they go and ask for an exemption from controls? How could they ask for that and not at the same time realize that the province should get its fair share?

You know, it really has to be ironic that here were these principals of the union — Mr. Cameron, Mr. Caldwell, Mr. Johnson — and maybe, for all that matter, executives from Kaiser Resources — Mr. Riva, Mr. Volkmann, Mr. Roberts and Mr. Williams — sitting down and signing a memorandum of agreement, which would later be ratified, saying and agreeing that it was the intent of the parties to preserve and continue the harmonious relations existing between the parties. What else can one expect but for miners to do the one thing that they can do to protest this type of an inequity? It's a rotten system. It's a rotten bunch of people in control of government at the federal and provincial level that allow this type of an injustice to be perpetrated in the name of anti-inflation fighting.

Where are we fighting inflation? Are we trying to fight inflation in Japan or are we trying to fight inflation here in British Columbia? Everything we've done here in British Columbia has been an increase of taxes to the people. Here is the one area, not like the wood industry where they've had a rough period and where the export price of wood products.... It could be hoped, maybe if profits go up in our export market — and the wood industry is an export market — that they could recoup some of the recent losses or low profits that they've had. But here is an industry that has been on an upswing for quite a few years after a few initial start-up years, and here is one area where we could generate millions of dollars. You, know, just the figure that was mentioned in terms of Kaiser profits alone — and not to mention some of the other smaller operations — here's an area where we could take tremendous profits.

Was there any discussion with the minister? Was there any discussion about the anti-inflation programme and the exemption from controls on their product and the control of their workers' levels of wages? Did that minister, in his concern for the peaceful adjustment and settlement of grievances, claims, disputes and differences which I'm sure,

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being familiar with the mining industry, he should realize is in the best interests of this province — did the minister even bother to discuss labour matters, the effect on labour relations, and the effect on an agreement that was signed in good faith by those persons who were seeking to fix up some regional disparities in the cost of living and productivity?

Mr. Chairman, you know, to go and move into a mining town such as Elkford, it's not quite like going on the market on the lower mainland or some other places. You might expect that things would be cheaper there, and in some ways they are. Some of the company housing is sold at cost and there are some very good deals, but in other respects there's not always an adequate supply, and people have to commute from great distances. Decisions are made not to allow mobile home parks which some of the workers could use. So there are disparities.

I think that this agreement, this company which is free to set prices not under the control of the AIB, this company which sells a product which is not really consumed in Canada to any great extent, this company which is making enormous profits, has created a labour situation which is volatile.

I couldn't expect, as a responsible elected member, to sit in here comfortably while people out there are being expected to bear the brunt, when there is no justice in this from any vantage point. And there's no sense in it — no sense economically and no sense morally.

So I'd like the minister to give us some of his thoughts about the situation that exists at the Kaiser operation in Sparwood, particularly as it effects the Michel Local Union No. 7292.

MR. W.S. KING (Revelstoke-Slocan): I just hope the minister will give some answers to the points that were raised earlier on, Mr. Chairman. I raised a number of points with the minister which I felt he should give some reaction to. I talked about a review of policy to come before this Legislature for future years.

I don't expect the minister to answer the kind of questions I raised at this particular session, but I would like some indication from the minister that in considering and charting mining policy for the future such factors as the balanced return to the public sector will be considered in terms of deciding whether or not it's prudent to go ahead with the development of any particular property. I think that balanced consideration is a valid one, I think the employment factor whether or not sufficient jobs are available and will accrue to be of any significant benefit when weighed against the environmental damage, and the public support that may be necessary for that particular operation — in terms of roads, and perhaps in terms of public facilities such as schools and hospitals....

I would hope that the minister would give some kind of an indication that he'll be considering these things and providing the House with some indication in the future of what the policy direction might be, what ingredients will go into the determination of mining policy.

When would the Department of Mines, for instance, feel that it is prudent to not grant a production permit on the basis that inadequate public benefit would accrue from that operation? Is this a consideration at all, or is the only criterion whether or not there's a profit margin available for the company? These are the kind of questions I think should be answered, and which haven't really been discussed. We've accepted a policy that assumed over the years that because a mine may come into production there was adequate public benefit flowing from that operation.

I suggest, Mr. Chairman, that we've reached the point where that may not be the case, certainly not in all circumstances. I think it's time for the kind of basic, fundamental reappraisal that I call for. I would like to hear the minister's reaction to that.

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources): This afternoon the member for Revelstoke-Slocan asked a series of questions, and posed a series of questions regarding the general policy of the mining industry and the Department of Mines. Immediately after doing this he left the House, and I did answer some of his questions at that time. However, he was not here to hear the answers; perhaps he could read them in Hansard tomorrow.

As far as the responsibility of government in regard to community structure and mines that open up, close down and so on, of course the government is concerned, especially when government funds have to be placed into a community because of a mining development. However, the government must and will assess the overall value to the society as a whole before it commits its dollars to such things.

The question must be asked — in response to that member's question — because a mine operates for a period of years and eventually closes down, as do all mines, is it better that we never did have that mine and the jobs created by it, the revenue to the government, the revenue to the province as a whole? Mining companies, when they make a profit, invariably a great deal of that profit goes back into the exploration and development of new mines, so we must ask ourselves the question: should that mine never have been because someday it will close down? Or shall we benefit from that mine because it does exist and does carry on for five, 10, 15, 20 or 30 years?

Of course, it is impossible to predict 30 years hence whether or not the development of Afton Mines, for example, should have taken place or not.

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But now the creation of jobs, the creation of revenue for the government, the development of our resources for the benefit of the people of the province and also a return to the people who invest in that property, is a good thing. In 20 or 30 years when that mine closes down, people will say: "Well, the mine has been here all this time, has taken wealth out of the ground and has done nothing for us."

But during that 30 years of time, the mine will have added tremendously to the economy of the area in which it is involved. Also it will have added substantially to the direct revenue of the government of British Columbia, and certainly through employment opportunities to its people will have contributed a great deal.

The member from....

Interjection.

HON. MR. WATERLAND: I did cover some of your points, Mr. Member, this afternoon. The other answers which you wish will probably be in Hansard tomorrow.

I referred to the northeast coal development this afternoon when responding to your queries. There is going to be a tremendous commitment by the government for transportation, power, for a community infrastructure, if the coal developments up there go ahead. We are studying it very seriously now. Quite a large number of departments of government...I think there are four or five involved — Housing, Labour, Mines and Economic Development are all involved in this, and Transport and Communications. We hope to have the answers to what the cost of that development is at about the same time the companies are going to be in a position to say whether or not they can commit to their properties for development. At that time the decisions will be made.

But we are also, in that area, probably going to have a user charge on the coal, so although the government and its Crown corporations may have to put up funding initially to provide hydro, to provide transportation and highway connections, most of this money over a period of time will be returned by a user charge on the coal. I think that is as is should be. But we must be forever cautious that we do not place too many charges on our resources to the extent that we make them non-viable economically, because if they are not they will benefit no one. It is a very delicate balance to create. We are going to consider all aspects of any major development such as that.

As far as mines being developed in areas where there are existing communities which will add an increased burden to that community as far as hospitals, schools and so on are concerned, these things are costs of expansion and development, and the taxes charged and the royalties charged to these companies will help to pay for this. And certainly the jobs created will benefit the people.

The member for Nelson-Creston (Mr. Nicolson) was talking about my meetings with Edgar Kaiser. Yes, I had several meetings with Edgar Kaiser. I have met with Bruce Pepper several times; I have met with representatives from most of the major mining companies in British Columbia, and also from most of the major forestry-based companies in British Columbia and many individuals — small operators, individual operators.

Yes, when I was speaking to Edgar Kaiser he gave me a one-page summary of what their total mining cost was, the transportation costs and so on. There was no detail involved in it. This information was useful. However, I think we have to delve into it much more deeply than a single-page cost summary before we can say, yes, this is the position we must be in as far as royalties are concerned.

I said this afternoon that we are looking into the whole royalty situation. But something that we must be aware of is the difference between the low-cost and the high-cost operator. The Leader of the Opposition (Mr. Barrett) this afternoon mentioned that Alberta is going to $9-a-ton royalty. Well, that is not quite true. Alberta is going to a royalty based on the profitability of the profit spread in a particular company. It could go up to $9, but it will depend on the profits that company can generate through its operation.

The Leader of the Opposition this afternoon also mentioned that the profit for Kaiser was in the order of $7 a ton. He was also suggesting that perhaps we could have a $9-a-ton royalty. I am sure he is aware, as I am, that that arithmetic doesn't work out.

However, we must constantly have in mind the fact that because Kaiser is making $7 a ton, they perhaps can pay more than $1.50 royalty. And when we work out our royalty structure, they will be paying more, no doubt. But we also must remember that because Kaiser can perhaps afford $2.50 a ton royalty, that extra dollar a ton could make the difference between a go and a no-go situation to a mine in another part of the province where the transportation costs are higher or the cost of mining is higher. So we must be very careful that what we do to one company is not automatically applied to another and thereby makes that non-viable and makes that resource of the people of no value to anyone.

The Kaiser situation — yes, right now Kaiser is making a profit, according to the Leader of the Opposition, of about $7 a ton. But for the first two or three years of production, Kaiser Resources did not make a profit. This was due to two reasons: first of all, the price of coal was substantially lower at that time and they had a lot of operating problems to overcome — many of which they have now and they have developed a very efficient mining operation;

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this, fortunately for them, was concurrent with an increase in the price of coal. The profit spread is there now. I believe the people of British Columbia, through possibly a profit-oriented royalty, can acquire more direct revenue from that company. But we must be sure that when we change the royalty system we are not eliminating from an actual developable resource the higher-cost operations. This is why we are having a very close and detailed study of the whole coal royalty situation.

I don't believe we should go to a Band-aid approach and start sticking Band-aids on now until we have a good, well-thought-out policy developed.

Byron Creek Colliery — or what was Byron Creek Colliery; it is now Byron Creek — is a surface operation. For example, they were talking to me, other members of the cabinet and the MLA for the area yesterday. They were telling us that they have come to an agreement with Ontario Hydro where Ontario Hydro will pay them up to about $40 a ton for coal from British Columbia in spite of the fact that they can get coal from the United States for $24 a ton.

So there is a policy developing throughout Canada whereby we will make use of our resource and try to develop our resource for the betterment of British Columbians and Canadians, and I think this is as it should be. However, British Columbia has quite a tremendous coal resource, really. We really don't know what we have, but we have literally billions of tons mineable, recoverable coal, more than British Columbia can possibly use for the lifetime of us or our children or our grandchildren or our great-grandchildren, and there is tremendous potential for the development of new coal resources.

I said this afternoon in partial response to the member for Revelstoke-Slocan (Mr. King) that we must try to develop secondary and tertiary coal technology so that we can make fuller use in the petrochemical industry and gasification and liquefaction of coal, and this technology is developing in the world now. We must keep abreast of it; we should be a leader in this type of technology so we can realize a maximum possible benefit for the people of British Columbia for this resource.

If we don't explore for and develop the resource as this technology develops, we will not be in a position to take advantage of it. I do think that we must encourage the exploration for and development of our coal resource, and we must also be fully aware that the people of British Columbia must receive the best possible benefit, but the benefit must be very delicately balanced between making our coal resources viable and making them non-viable.

It is not a simple problem by any means, but it is one that we must approach in a very practical, economic sense, keeping all factors in mind: the return to the investors, who actually do put a great number of dollars into development of our resources, the return to the employees who work at the mines — and I have worked in many mines in this province and throughout Canada, and I know what our miners do and the jobs they have to do, and right now the miners in Canada are the highest-paid miners in North America, and that's the way it should be, because they are the best miners in North America. We will continue to obtain the best possible return for labour in the mining industry. I'm all for that. I think that is absolutely essential.

I will not get into a discussion regarding the Anti-Inflation Board. We must live within the rules of the day. Our miners certainly are upset because they can see Kaiser making a good profit, but a lot of the profit that Kaiser Resources makes right now is being earmarked for development of additional mines in that area, the Hosmer-Wheeler property. They are interested in properties in the north — tremendously expensive properties to bring into production. So a great deal of that profit which Kaiser has realized will be put back into developing the resources of British Columbia so we can really all benefit from them.

MR. NICOLSON: Mr. Chairman, I appreciate the minister attempting to answer in some depth. But I'm not sure. Maybe the minister could nod his head if I'm in the right ball park but I believe it's something over a million tons of coal that are mined in B.C. a year. I think it's something like.... Is it something like 14 million tons? I think one could anticipate something like a $1 increase on a ton royalty is going to bring in something in the order of $16 million dollars, and I'm just going by memory there. You know, that's a lot of money to allow to slip by. As C.D. Howe caused a little bit of a ripple across Canada when he said: "What's a million dollars?"

HON. G.M. McCARTHY (Provincial Secretary): So did Levi. What's $110 million?

MR. NICOLSON: And for the minister to sit there and say that, you know, well, we've got to do this, we've got to do that, we've got to be careful....

Well, we're not talking about going to $9, you know. What we've said, what my leader has said, is, you know, go from $1.50 to $2.50, and that's moderate. It's Kaiser that is working today and it is Kaiser that can afford it, and if Sukunka coal deposits and other things in the north require some different technology and if there have to be some depletions and maybe a phasing-in of royalties or anything else, that's a debate for another day. But today we have Kaiser Coal, and you say we have the best miners in North America. I'll have to agree.

The minister, not only is he charged with getting mines started, he is also charged with the responsibility of mine safety. I think he can remember not too many years ago, when he was

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working and there was no obligation, for instance, when a mines inspector went into the mines, for him to take along one of the union shop stewards. They would quite often tip off the company, tell them they were coming, and....

AN HON. MEMBER: They always tipped them off.

MR. NICOLSON: I wouldn't say always, because there might have been one exception to the rule, but they would certainly.... Then everything would be all cleaned up and they would come in. When I worked in a factory it was much the same, and, of course, regulations were changed. That is something that is appreciated by the miners and by the various unions that there can be representation, and it is mandatory that there be representation when there is a safety inspector present on the site.

The minister is charged not only with stimulating the mining economy and measures and that, but the interests of the miners. Now I would hope that the minister would be more interested in the miners than just to say that he is not going to comment on the Anti-Inflation Board.

I think that this is a very serious thing. It can lead to bad morale. Should the workers be on the job, there could be a spirit of animosity. I don't know if anyone in this House has had to work under these conditions, but I certainly would not be too pleased to be expected to accept a rollback to 9 per cent of a signed agreement which was for 17 per cent, and 6 per cent in the next year to look forward to, when I knew there was no restraint being shown by my employer and that my employer — in this case, Kaiser — was being allowed 300 per cent increases in the same period as these workers are being restricted to about a 30 per cent increase now that they have been rolled back. That's a factor of 10 to 1, Mr. Chairman.

It just isn't good enough that a minister who is charged not just with the responsibility of stimulating mining economy but also the welfare of miners should wash his hands of it. That minister should be making a case in his cabinet. He should be speaking out on behalf of the miners of this province, he should be speaking out against this travesty, and he should be taking immediate action to increase from $1.50 to $2.50 when comparable mines in Alberta would be expected to pay $9, I am sure, to Kaiser. They would be comparable to Kaiser. Their capital costs are a little behind them now and their bad days are behind them. If you want to argue about $9, surely they can afford $2.50.

It might at least be some comfort to know that these people who are working so hard and are such productive and efficient miners are not just working so that enormous profits can be generated by Kaiser at their expense. It isn't fair and it is something that I would hope this minister would realize could be a bit of a time bomb. There's a problem there.

If he is interested in the mining industry, I think he's going to have to look at the anti-inflation agreement and the fact that it isn't working. This is one of the most flagrant areas in which it isn't working. It is clearly the most iniquitous situation in British Columbia today.

HON. MR. WATERLAND: Mr. Chairman, the member remarks about the inspection branch of the Department of Mines listing off the companies before they came in for an inspection. I don't think this happens. I am sure that there are times when a resident engineer or inspector goes to a property for specific reasons. People have to know he is coming in, but the inspections are carried out without notice. I am sure that this is the general practice among the people working in the inspection branch of the Department of Mines.

I had an interesting experience up at Chetwynd at Sukunka a few years ago. The management of the company knew that I was staying at a particular motel each time I came to town. As soon as I made a reservation to stay at that motel, the management would phone the mine and they would know I was coming. So I adopted the practice of once every week or so phoning the motel and making the reservation and then, at the last minute, cancelling it, and I am sure because of that the mine was always in good shape. They were expecting me to come in at any time.

The member also mentioned the mandatory requirement that a representative of the union accompany a mine inspector on his tour of a mine. That is not so. Instructions to the inspection staff were that we should not object to a union representative coming on our inspections. When I was an inspector of mines I always more than welcomed him because I got a great deal of information from the men. As far as I know the management never objected to it. The managements of the mining companies in British Columbia are as concerned about mining safety as is anyone. Nobody wants to see accidents in mines.

For two different periods I worked for the Department of Mines for a total of six years. The reason I chose to work in the Department of Mines is because I have always been very, very concerned about safety in mines. I feel that I contributed quite a bit to mine safety in my way. I have been involved in many, many very unfortunate situations where people have been injured and killed in mines, and I had a responsibility for investigating these accidents. I have been involved in the recovery of the battered bodies of miners from mines and it is not a pleasant thing. I'll do everything I possibly can to prevent this from happening. As long as you have people working

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in a mining industry, there will be accidents. The ultimate goal is the elimination of accidents, and I hope that some day we can achieve that.

The inspection staff of the Department of Mines are quite dedicated people and they are all very, very concerned about mine safety, as am I and I am sure every member of this House is. We don't want to see accidents in mines and we'll do everything we can. We like to involve every employee at the mine and the management at the mine to make mines the safest possible place to work. It is a concern to all of us.

Again, I'm afraid that it would not be in order for me to comment on the present labour disputes at the Kaiser and the Fording operations. Discussions are being carried on daily between management and the union, and I hope something can be resolved. If I were to comment publicly on it, it might have some detrimental effect on the ultimate solution. I'm sure the Minister of Labour (Hon. Mr. Williams) is aware of what's going on and may have to be involved. I would like to see those disputes settled as soon as possible because it is terribly hard on the miners and on the communities in which they live. It's a terrific loss of income for the communities, and I hope that it will be resolved in the very near future.

MR. G.V. LAUK (Vancouver-Centre): Mr. Chairman, when I left off discussing this minister's estimates, I had to take an untimely absence from the House, but now I'm back and I'm sure the minister has been anxiously awaiting the opportunity to provide answers to the questions that were asked at that time.

As a result of the revelation that one Jurgen T. Lau drafted the mining legislation that has since been passed in this House, I asked the minister, as a result of that legislation, to provide the committee a complete shareholders list of Barrier Reef, a complete shareholders list of Bethlehem Copper and a complete list of all the mining company interests, including directorships and shares, held by all members of the committee which drafted this bill. To my knowledge, those answers have not been forthcoming and no returns have been filed with the committee or in the House. Is the minister now prepared to do so?

HON. MR. WATERLAND: Mr. Chairman, in response to the query from the first member for Vancouver Centre, no, I do not have a list of shareholders of Barrier Reef Explorations or Bethlehem Copper Corp., but I'm sure that company maintains a register of its shareholders, and this information would be available for anybody who would care to inquire of those companies.

I understand that another member of the committee, who is working on the taxation legislation, Gordon Bell, tells us that he has no holdings in mining companies in British Columbia. I have not investigated that, but I take the gentleman at his word. As far as George Stekl is concerned, I have not inquired of him; Mr. Stekl is an accountant with Cooper Lybrand and Co. These people are all professionals; they are all bound to a code of ethics. I have no reason to question them, and I'm sure in my own mind that they did not attempt to take advantage of any information they may have had regarding the contents of the taxation report which they presented, and their involvement with legislative counsel in the drafting of and consulting toward the drafting of Bill 57.

MR. LAUK: A code of ethics is exactly what's at stake, Mr. Chairman. If a professional provides advice to the government as a professional, as an expert, that's one thing. But when they do so in a politically partisan nature, when they do so as a representative of that body in society that is directly going to benefit from such advice to government, they have gone beyond the bounds of the ethics of their profession. They are taking a privileged position, the fiduciary relationship between a professional advising government or a client, and go beyond that to their benefit — their personal benefit.

I argued before, Mr. Chairman, and I argue now that perhaps Mr. Lau is not doing anything unusual from his point of view, but the government's responsibility is different. The minister's responsibility is clearly different. His solemn responsibility is to ensure himself that no one will personally benefit from his position, his delicate and fiduciary trust position with the government as an adviser. Mr. Lau is a director of Deer Lake Mines as well as Barrier Reef. The clerk at the Securities Commission confirms that. It's hard for us to chase these things around. It's incumbent upon ministers of the Crown to thoroughly disclose who's doing the advising so the public will have a view of what interests are involved.

I have a letter sent to me in a peculiar form — with the letterhead and addressee clipped out. But I'm satisfied it's a letter sent by Mr. Lau to some of his clients, and dated January 30, 1975. What did he say? Among other things, he questioned the NDP mining legislation. Fair enough. That's freedom of speech. No one says that a lawyer is not entitled to freedom of speech.

But then he said he was going to resign from his firm, and I understand he did. He says: "In my opinion these policies are detrimental not only to those directly affected in the mining industry like myself, but also to the people of this country at large. In the hope that I may be able to play some part in moving governments toward more sensible and realistic mineral resource policies, I have decided to get involved politically." — January 30, 1975. "Although I have no clear idea as to how to best go

[ Page 3060 ]

about it, I will use some of my new-found time to that end." He found his avenue to get involved politically, Mr. Chairman. He became a close personal adviser to a fledgling minister who had been sucked in by the mining industry.

MR. CHAIRMAN: Order, please. Intemperate language is always to be avoided in this House, and although there isn't anything clearly unparliamentary about the speech, I would suggest that with the idea of....

MR. LAUK: I withdraw the offending phrase and say that he's been hoodwinked.

MR. CHAIRMAN: It's perhaps only marginally better. The suggestion is that we should avoid offending language if possible. Please proceed.

MR. LAUK: Inadvertently deceived. In any event, Mr. Chairman, Tom the waterbaby has been taken by the mining industry and trotted down the garden path.

MR. J.J. KEMPF (Omineca): What disrespect!

MR. CHAIRMAN: Order, please. I think that perhaps, just so that there can be a clear understanding, maybe I would just like to read a section from Beauchesne. Would the member please be seated?

Two sections perhaps — the rule relating to personal reflections occurring in debate may be stated thus, namely:

"It is doubly disorderly for any member in speaking to digress from the question before the House and to attack any other member, by means of opprobrious language applied to his person and character or to his conduct, either in general or on some particular occasion, intending to bring him into ridicule, contempt or hatred with his fellow members or to create ill-blood in the House."

I think that's a good citation out of Beauchesne.

MR. D.G. COCKE (New Westminster): Mr. Chairman, my point of order is that I wonder why you had that marked in your Beauchesne.

MR. CHAIRMAN: I always have the rules available and readily indexed.

MR. LAUK: I advise the Chairman that he has no need to answer that kind of a question. (Laughter.) Because the answer is obvious, Mr. Chairman. The book suddenly appeared on the desk when I retook my place in debate. I withdraw any such offensive language to the minister.

MR. CHAIRMAN: I was sure you would.

MR. LAUK: But by no means do I wish to lessen the import of the charge that I make. I think when the smoke clears of this debacle of Bill 57, this monstrous sellout to the mining industry.... I can see the mist clearing now.

I think that what's important for the government to decide and particularly the Attorney-General — and I'm delighted that he's joined the committee this evening — is what is the code of ethics for lawyers and accountants who are involved in a special way through their profession in the mining industry. Should they not be required to divest themselves of all such personal interests — financial interests — in that industry, because it would be natural for the government to call upon the best service possible? I agree with that proposition.

But there are two things which are fundamental which should come out. One is the ethics of a professional advising anyone who is heavily financially involved in an industry that will benefit from his advice, either to government or to any other third party.

Secondly, there is the role of the government to fully disclose the holdings and the interests of the people who advise the government. What is the result of not having those two things prevail? The result is an Act which has swung so far in favour of the industry that it can only be termed a sellout — a total sellout of the mineral resources of this province.

So far the minister has not disclosed. He has not revealed the fact that he discussed coal royalties with Edgar Kaiser, Jr. You didn't discuss coal royalties with Edgar Kaiser, Jr.? Would you care to stand up and say you didn't discuss royalties with Edgar Kaiser, Jr.? Would the minister stand up and give that answer?

No, just a minute now. I asked the minister to stand up. I'm not asking for legal counsel.

MR. CHAIRMAN: Order, please.

MR. LAUK: I'm not asking for legal counsel.

MR. CHAIRMAN: Order, please, Hon. Member. The member took his place. The next member has stood and the Chair will recognize people as they stand to their feet. I think that would be the wish of the member even now.

MR. LAUK: This isn't another plot is it, Mr. Chairman?

HON. G.B. GARDOM (Attorney-General): Indeed it is.

This perhaps, Hon. Members, is not the appropriate time of the evening, but I would very much like to

[ Page 3061 ]

welcome to the gallery my cousin, Mrs. Tuskin, and her husband and their two children. I've never met these people before. They're just from Wisconsin and they're sitting up here. This is the first time I've seen them and I'd very much like to have a chat with them sometime. If I'm not in my seat over the next few minutes, Hon. Members, you'll know where I am.

HON. MR. WATERLAND: Mr. Chairman, my discussions with Edgar Kaiser were very well canvassed prior to 6 o'clock this evening. I didn't tell in detail what we discussed, as that is a matter between he and I as Minister of Mines. I had told him that we are going to review the coal royalty situation. I did not tell him what was going to be done, except that we were going to have to have a look at the whole situation and come up with a royalty system which was equitable to both the mining companies and the people of British Columbia. I'm sure Edgar Kaiser would be more than willing to confirm that fact if anybody wished to call him.

As for Mr. Lau's position on the tax committee and his political involvement, I'm sure that Mr. Lau has a right, as has every other citizen in this province, to express his views as to government policy, which apparently he did in the letter of January 30, 1975, in which he stated that the policies of the government of the day were not good for the mining industry. That's a commonly known fact. It was stated many, many times by many people. Jurgen Lau is a lawyer and a geologist. He's an expert on mining law. I'm sure that is the reason that he was hired by the previous government to draft a coal Act and a mineral Act, and that is the reason he was asked by that government to comment on the Mineral Royalties Act when it was in bill form. Mr. Lau told that government at that time that it was going to be a disaster for the industry and he was proven right. I'm sure that he is a very competent geologist and lawyer, and I have no doubt that his ethics are of the highest possible standard.

The first member for Vancouver Centre (Mr. Lauk) says that he has shareholdings in Deer Lake Mines. I don't believe I've ever heard of Deer Lake Mines, but if he says so, I cannot argue that fact.

The mining industry, Mr. Chairman, I hope benefits from changes in mining legislation, because with a healthy mining industry we develop the resources of the people of British Columbia for the benefit of the people of British Columbia. That is, as I said, the reason I initially became involved in politics. I knew that the royalty legislation was bad for the industry and therefore bad for the people of B.C., because their resources will benefit no one unless they're developed.

MR. LAUK: Mr. Chairman, perhaps the minister does not understand the import of the remarks that I made with respect to Mr. Lau. You see, when the controversy was raised, Mr. Chairman, with respect to a man who is heavily involved in the mining industry, it was stated by the government and by Mr. Lau: "Well, this is fine. I'm just an expert giving advice." In fact, he was politically motivated on behalf of the mining industry.

Now who do you get to revise the Criminal Code? The boys at the Pen? Who do you get to draft the legislation with respect to consumers? Vacuum-cleaner salesmen?

The rabbit's in charge of the lettuce patch. I've never seen anything like it. The minister still doesn't understand what we're trying to say. This bill was drafted by the mining industry for the mining industry and of the mining industry, not for the people, of the people and by the people.

If there's any proof of that, it's the letter Lau sent himself to his own clients. "I'm going to get involved politically and, boy, when I find my mark, I'll do it." He found it. The mining industry, like the oil and gas industry, lays out its lines to catch the suckers. Sometimes they catch one. That's the point we're trying to make, Mr. Chairman.

MR. CHAIRMAN: May I remind the member that this same point was well canvassed in second reading. If you have new points, they may well be introduced now, but....

MR. LAUK: Second reading of the estimates?

MR. CHAIRMAN: No, I'm sorry — of the bill. Do you remember?

MR. LAUK: You mean during that illegal sitting, Mr. Chairman?

MR. CHAIRMAN: It may well be. (Laughter.)

MR. LAUK: During that sitting where for the first time in the British Commonwealth the opposition was excluded?

Interjections.

MR. LAUK: And what did the Attorney-General have to say? He said: "Was the mace on the table?"

That's the issue that's being raised. I don't think that this minister will learn his lesson. I think it's clear that he must resign. He must leave his chair as a minister of the Crown. He's made two fatal errors.

On to another point, Mr. Chairman:

"Westcoast Transmission Ltd. hopes that the increased oil and gas drilling exploration in B.C.
in recent months may eventually lead to significant supplies of natural gas."

Everybody is very hopeful. It is about time that we

[ Page 3062 ]

increased the return to the public with respect to natural gas. It is about time we had some increased return.

The minister is in charge of the British Columbia Petroleum Corp. I wonder why Mr. Thompson resigned from the B.C. Energy Commission. There are meetings going on now. Can the minister direct his attention to those meetings? The meetings with the oil and gas industry are going on now.

MR. R.L. LOEWEN (Burnaby-Edmonds): Why did Williams resign?

MR. D. BARRETT (Leader of the Opposition): Ohhh!

MR. LAUK: I ask the minister: at these meetings...

MR. LOEWEN: Why did Williams resign?

MR. BARRETT: He's in the cabinet.

[Mr. Veitch in the chair.]

MR. LAUK: ...is there a consideration by the government to change the formula by which the BCPC obtains revenue for the Province of British Columbia? At these meetings, is it not true that the minister is discussing the possibility of dismantling the B.C. Petroleum Corp. at a further cost of many millions of dollars of revenue to this province? Can he confirm that those meetings have taken place discussing those subjects?

HON. MR. WATERLAND: Mr. Chairman, there are indeed at the moment, or during these days, meetings taking place with the B.C. Energy Commission. One of the subjects that is being discussed is the netback to producers. I am not personally involved in them. This is a matter for the B.C. Energy Commission and the minister responsible for energy, the hon. Minister of Transport and Communications (Hon. Mr. Davis). No, there have been no discussions in which I have been involved regarding the dismantling of the British Columbia Petroleum Corp.

MR. LAUK: Mr. Chairman, I caution the hon. minister: before you fall into another trap.... This is good advice from a friend and adviser to the minister — his good friend — and he should have good friends on that side of the House so he won't get into the hot water that he has been in in the last several days.

Interjections.

MR. CHAIRMAN: Order, please. The hon. member has the floor.

Interjection.

MR. LAUK: The minister should be aware that the oil and gas industry has increasing profits, and I have reason to believe that the minister is again being hoodwinked into believing that is not true. He is being hoodwinked into selling out again another resource of this province. Look at it very carefully. The netback to the industry indeed! We know full well what those discussions are, Mr. Minister, and we are watching it very closely.

Vote 130 approved on the following division:

YEAS — 26

NAYS — 16

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

Vote 131: deputy minister's office, $1,780,468 — approved.

Vote 132: mineral resources branch, $3,218,082 — approved.

Vote 133: petroleum resources branch, $1,117,312 — approved.

Vote 134: grants and subsidies programme, $55,500 — approved.

Vote 135: mineral development programme, $100,000 — approved.

On vote 136: mineral road programme, $1,100,000.

[ Page 3063 ]

MR. LAUK: I wonder if the hon. Provincial Secretary can do what is traditional and just relate the name of the vote.

AN HON. MEMBER: They're trying to keep it a secret.

HON. MRS. McCARTHY: Mr. Chairman, I thought the hon. member would be following his estimate book.

Vote 136 approved.

On vote 137: prospectors' assistance programme, $150,000.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Chairman, I think this is an excellent programme, particularly in view of the amendment to the legislation that we passed this year. I would ask the minister: how much was expended out of the $300,000 last year in the finality of the programme and why has the amount appropriated been cut in half for this year?

HON. MR. WATERLAND: Mr. Chairman, in response to the question from the member for North Vancouver-Capilano, the programme has been cut this year primarily due to the necessity of cutting back on government spending. I realize that this is a very important area — prospecting is what creates mines for the future. However, over the last several years we have had prospecting continuing and mineral deposits being discovered without being developed; we do have a bit of a bank of mineral deposits that can be further explored. In addition, rather than increasing the size of grants, in fact we have cut down on the maximum amount of grants given this year — to $2,000 from $4,000 — and we have tried to concentrate more on technical advice to prospectors rather than direct grants.

We realize that there are many people who apply for grants whom we are not able to accommodate. This was a necessity of the restraints in our budget. I still think we have a viable programme. We have grubstaked or assisted 50 prospectors this year and we will be offering prospecting courses, as in the past, and providing considerable technical advice to prospectors in this field. As far as the amount actually spent last year, my deputy has just advised me that there was $225,000 spent last year.

MR. GIBSON: Mr. Chairman, all I can say is that I think it's a grievous error that the amount of this estimate has been cut in half. The amount of $250,000 is the kind of two-bit exploration programme you might expect out of some consolidated moose-pasture stock.

Interjection.

MR. GIBSON: It's absolutely fundamental to the economy of your riding, Mr. Member, and many of the ridings of this province, that explorations should continue. Exploration, as you know, Mr. Member, is fundamentally based on the small prospector because the big companies buy the prospects that have been discovered by the small prospector.

I say to the minister that this House will vote this $150,000, I predict, with enthusiasm, but I say to him that if there are applications for this programme above and beyond that amount, he should view them with the utmost sympathy, and that next year when he comes back to this House with his estimate book, as far as his own department is concerned — if he's still there — he should provide something a good deal more than $150,000. It's completely inadequate, in my opinion.

MR. NICOLSON: Mr. Chairman, I think it is absolutely....

MR. J.R. CHABOT (Columbia River): Appalling.

MR. NICOLSON: It is appalling, and I am glad that the member for Columbia River gave me that word I was grasping for, Mr. Chairman. That's a good word — appalling.

When one considers that so many of these prospectors were put out in the front lines, it reminds one of feudal days when knights would go out and recruit an army and the press gangs would take the peasants and send them out with pitch forks to fight again some mythical enemy — no one who was of any threat to them.

AN HON. MEMBER: The cannon fodder.

MR. NICOLSON: Cannon fodder. The mining industry used the small, independent prospectors as cannon fodder during this last political battle, and they recruited a lot of them but not all of them — a good many of them are good friends of mine and good friends of the New Democratic Party.

AN HON. MEMBER: Oh, oh!

MR. NICOLSON: But to think that so many of these prospectors were exploited and this is the thanks that they get. I think it is going to be very difficult for some of the members of this House to restrain themselves from telling some of the people who are interested in mining that these are the kind of priorities, this is the kind of thanks they get, when large corporations are allowed to go with increasing, ballooning profits — $70 million profit for Kaiser Coal, and a cut of $150,000 for prospectors'

[ Page 3064 ]

assistance.

I think it's a really serious error and the minister has again made not just.... If there was any place he could have pared, he should have looked elsewhere than in this vote, because for $150,000...

AN HON. MEMBER: Hear, hear!

MR. NICOLSON: ...you have made a very grave political error, I would submit, Mr. Minister.

HON. MR. WATERLAND: I would like to respond to that question, Mr. Chairman. First of all, the member for Nelson-Creston (Mr. Nicolson) said a $150,000 reduction. Last year we spent $225,000; this year we are budgeting for and will spend $150,000. The difference is $75,000 not $150,000. I too am concerned that we cannot provide more funds for the prospectors, because they are important. They're the grass roots of exploration.

However, the reason that we want to emphasize technical assistance is because the days are fast disappearing when a prospector can go out chipping rocks and find mineral deposits in British Columbia. They must become familiar with and competent in using more sophisticated exploration tools — geophysical methods; geochemical methods — and we must train them to do that, rather than the traditional rock-picking, visual exploration methods. We want to prepare our prospectors for the future, prepare them in the modern technology of prospecting. I dearly hope that next year our budget can increase substantially so we can help fund more prospectors.

MR. GIBSON: Well, Mr. Chairman, all I have to say to that is that I certainly hope the minister appreciates exactly what he means by preparing prospectors for the technological changes, because they're not cheaper; they're more expensive. Modern prospecting is far more expensive than it has been in the past. Therefore it's nonsense to be cutting this vote, and I say it's wrong.

Vote 137 approved.

On vote 138: mineral research programme, $100,000.

MR. GIBSON: Mr. Chairman, could the minister tell us what this $100,000 is for, please?

Interjections.

HON. MR. WATERLAND: Vote 138, mineral research programme — we are providing funds for coal research at UBC, surface chemistry of coal as it affects the use of coal, pollution control agents and such things as using coal for effluent treatment and so on. We are also investigating ongoing reclamation programmes and, as far as the mining industry is concerned, revegetation, growing of various types of plants on tailings, disposal areas, and this type of thing. Generally, reclamation, better utilization of the coal resource — and we are giving professional grants to universities to carry out various small technical research programmes.

MR. GIBSON: A point of detail, Mr. Chairman. Could I ask the minister if in the coal field any of the work is going on with respect to coal gasification or petrochemical industrial work out of any of our coal resources?

HON. MR. WATERLAND: Yes, the University of British Columbia is doing work on coal gasification and we're giving them a grant this year of $15,000. It's a very nominal grant. We have plans in the discussion stage for greatly increasing this type of research and setting up a rather sophisticated coal-research organization. We are not yet sure of the exact format of it, whether it will be part of the government, a Crown corporation, or whether it will be funding to the educational institutes. We will be putting more emphasis on this type of work in the future.

MR. GIBSON: A final question under this vote, as far as I'm concerned — does any of the coal research relate to the non-thermal coal uses of Hat Creek deposit?

HON. MR. WATERLAND: One of the unique qualities of the Hat Creek coal is its qualities that nobody has been able to explain, but it's used as a filtration agent for sewage and effluent treatment. Some of the funds will be used by UBC to further explore this particular quality of coal. As far as funds from this particular vote is concerned, I believe that's all that refers to Hat Creek, but other studies will be made by B.C. Hydro for other than thermal uses of the Hat Creek coal.

Vote 138 approved.

On vote 139: mineral data programme, $200,000.

MR. GIBSON: I'd ask the minister, Mr. Chairman, is any of this vote used for uranium surveys?

HON. MR. WATERLAND: No, Mr. Chairman, none of this particular vote is used for uranium surveys, but we do have funds allocated for a joint programme between the federal and provincial government on uranium reconnaissance work.

[ Page 3065 ]

Vote 139 approved.

Vote 140: mineral employment programme, $75,000 — approved.

On vote 141: energy resource evaluation programme, $600,000.

MR. GIBSON: Mr. Chairman, I wonder if I could have the breakdown as to how much of this is going into coal and how much is going into uranium and how much, if any, is going into either natural gas or oil evaluation?

HON. MR. WATERLAND: Mr. Chairman, $110,000 of this vote will be devoted to a uranium geochemical programme which is a joint programme between the federal and provincial governments. The balance will be in the coal areas, the greater part of which will be in northeast coal fields for the various studies that the Department of Mines is doing in conjunction with the coal task force which, as I mentioned previously, is made up by various governmental departments involved in the study in that particular area.

MR. GIBSON: Mr. Chairman, uranium, if we are to find it in any quantity in British Columbia, could be very important to our province. We have seen stories recently of a purportedly major find in the Okanagan area. I would ask the minister if he has any information on that particular find, or the general potential of the Okanagan area, that he could reveal to the House.

HON. MR. WATERLAND: Mr. Chairman, I am aware of uranium occurrences in the Okanagan. There was one recently quite near Kelowna, I understand. I do not know, nor do I believe anybody else knows, of the economic significance of that deposit. However, I understand that there is a programme underway there now in trying to determine the extent of that deposit. Uranium showings have been known there for a number of years; this is sort of an offshoot of some of the previously known deposits. It will be some time before the real significance of that is determined.

Vote 141 approved.

ESTIMATES: DEPARTMENT OF FORESTS
(continued)

Vote 74: minister's office, $14,000 — approved.

On vote 75: departmental administration and support services, $28,755,041.

MR. R.E. SKELLY (Alberni): Mr. Chairman, on June 16 I asked a question, under the minister's office vote, concerning the McGregor diversion project. At that time I was talking about a June 14 staff meeting of forest officials where the McGregor diversion project was reported to be substantially completed. At that time the minister said that the only work the Forest Service would be doing in the area of the McGregor diversion would be in assessing timber values.

I am wondering if the minister has had an opportunity to further investigate the work that is being done in the McGregor drainage, and if he is prepared to elaborate on the work the Forest Service is doing there.

After all, if they were only assessing timber values in the area, you would expect that another division of the Forest Service would be doing the work — the inventory division rather than the engineering section, which appears under this vote. I am wondering if the minister would explain what type of work is actually being done in the McGregor diversion. It's not simply assessment of timber values; there is other work being done in that area. I wonder if he would elaborate at this time.

HON. MR. WATERLAND: Mr. Chairman, subsequent to that question asked by the member previously, at that time I asked my deputy what was happening there. As far as he was concerned, it was as I stated at that time. However, in further investigating work that was going on in that area, I do have a report back. I could read it to the member, or I could table it — whichever he wishes. But I am sure that member is fully aware, because information was given to him, or to someone associated with him, from the Forest Service office. It is a routine operation within the department. I could table this or send it to the member if he wishes to read it.

MR. SKELLY: Mr. Chairman, in view of the tremendous environmental impact and the impact on the Fraser River system and the Fraser River salmon fishery, I am sure the House would probably be interested in the actual work being done in the area. As the minister states, I did contact the Forest Service engineering section and they told me that the work going on in the McGregor diversion area and the McGregor basin was quite a bit different from what the minister reported to the House on the evening of June 16, that in fact there was a certain amount of air-photo interpretation, locations of roads for the eventuality of removing the timber in that 64,000-acre basin to make way for the McGregor diversion. I would appreciate a full report if the minister has it at this time.

HON. MR. WATERLAND: Mr. Chairman, in

[ Page 3066 ]

response to the question from the member for Alberni I will read the report which I had from the Forest Service, if you wish. It says: "In further clarification of the question from the member for Alberni as related to the in-service news release entitled 'Highlights of staff meeting, June 14, 1976'" — which that member appears already to have or someone from the Forest Service gave it out to someone who inquired of it. It is certainly not a confidential document so if that member doesn't have it I will continue:

"The summer work programme in the management engineering section has begun. The initial McGregor diversion project has been completed and work has been lined up for a series of other projects in the Prince George district. This specific project was based on a request from the district forester, Prince George, under a memorandum dated March 2, 1976, which said in part: 'The following air-photo and/or field investigations are required during 1976 to properly guide licensee operations, to propose primary road access quarters or to check licensee proposals for primary access roads. All items have roughly equal priority."'

There were 15 requests, one of which was the McGregor. This stated:

"McGregor forest road: check Northwood for crossings on Herrick Creek to serve Captain, Otter and Upper Herrick Creek drainages; prepare a cost-benefit analysis of permanent versus temporary access based on possible flood of the McGregor reservoir. "

In order to make sure there is no misunderstanding, I would like to add that over the years, starting in 1970, the engineering service division of the Forest Service has received requests from various agencies, including the Fraser River Ecology Committee and B.C. Hydro, regarding the McGregor River diversion related to timber values, cost of clearing, et cetera, based on various time schedules. These, however, are not related to the specific "highlights" of the Forest Service meeting of that day.

So it is a general involvement of what effect the McGregor power project, if it goes ahead, will have on the forestry sector in the area. Further details I am sure I could obtain for the member if he so wishes, but perhaps it would be best that he contact the particular branch of our department involved. Would you like to have a copy of this, Mr. Member?

MR. SKELLY: Yes, I would appreciate a copy of the report and, if possible, maps and information about the area to be flooded. There appears to be a substantial amount of concern in the Prince George area, although possibly it hasn't been brought to your attention by the member for Fort George (Mr. Lloyd).

I understand that Hydro officials and Forest Service officials have met with regional district staff and regional district directors in the Fort George regional district and have discussed the McGregor diversion project and have presented reports to them.

I also understand that just last week a meeting took place between B.C. Hydro officials in Prince George, the Forest Service and representatives of Northwood Pulp to discuss initial logging plans in the area of the McGregor River drainage. I am wondering if the minister will answer this question: at what rate will the timber in the 50,000- to 64,000-acre McGregor River drainage be disposed of? Will it be at the 55-cent salvage rate, even though it's probably the best timber in the Prince George forest district? Will Northwood Pulp, a subsidiary of Noranda and a good friend of the minister, and of the former member for Fort George (Mr. Nunweiler), will they be the only company involved in cutting that timber? Why was the meeting held between Northwood, B.C. Hydro and the Forest Service? Were there no other companies involved in that meeting? I'm wondering if any time-frame has been established for the removal of timber from the McGregor River basin.

HON. MR. WATERLAND: Mr. Chairman, as the member is well aware, no commitment has yet been made for the McGregor power development. The Forest Service is, of course, anticipating that perhaps it will be made. As far as I know — and I am not cognizant of all meetings held between various quarterholders and tree farm licence holders in the province and the Forest Service — this meeting, I assume, was requested by Northwood because they are involved in the area.

We hopefully will have sufficient lead time so that the timber in the area, if in fact the Hydro development takes place, can be harvested on a reasonable basis. It will require some reorganization of plans by the forest companies working in the area, but we are just now trying to get it together so that if, in fact, the development goes ahead, we can make sure we do recover all the forest value in the area and the province does not lose this value because of the flooding of the area. No commitment, as I said, has yet been made to flood this area. There are other alternatives, and when that time comes we hope to have sufficient information to be able to plan properly for the removal of the forest value before flooding takes place.

MR. SKELLY: At the time I brought the question up, on June 16, I mentioned to the minister some of the concerns I had about the McGregor diversion project and some of the concerns that environmentalists, people from the Fraser-Fort

[ Page 3067 ]

George Regional District and other people in the province — in the salmon industry, in the fisheries industry along the coast — have in particular.

A certain amount of information has been forthcoming from the Fraser River Ecology Committee on the proposed System E development in the Fraser River basin. This summary report has been presented to the federal-provincial task force on the Fraser River. There appear to be some colossal dangers to the fishing industry on the Fraser River, and one of the areas of particular concern is that if the Fraser River system and the Arctic drainage are combined through the McGregor diversion, certain species of parasites which are carried by northern pike would be brought into the Fraser River system.

No study has ever been done on the effect of these parasites on the Fraser River salmon. There have been estimates as to the potential loss on the Fraser River of the salmon industry to the tune of something like $40 million annually to the province. It's a very substantial operation and there is a threat of substantial ecological destruction that could take place should the McGregor River diversion go ahead.

It appears that the Forest Service is operating under the assumption that the McGregor River diversion is going ahead, that they are preparing the way for removal of the timber from that 64,000-acre McGregor River basin, that in fact the McGregor River diversion is going ahead, and that the government is unleashing on this province what some environmentalists — and I'm quoting Mike Halloran from the Vancouver Sun — call an ecological time bomb.

For the last 20 years studies have been done on the possible effects of combining the Arctic drainage with the Fraser drainage that would indicate that the transfer of this parasite of northern pike from the Arctic drainage into the Fraser River could destroy an industry that has an average net value to this province of $40 million annually. I'm wondering if the minister can confirm that logging plans are now being developed in conjunction with B.C. Hydro and Northwood Pulp, to get the McGregor River diversion underway so that it can be in operation either by 1981 at the soonest, or by 1985, as projected by Robert Bonner through B.C. Hydro.

HON. MR. WATERLAND: Mr. Chairman, I'm the Minister of Mines and Petroleum Resources and Minister of Forests, and I'm afraid I have absolutely no information on the ecological effect of diverting Arctic waters into the Fraser River. Perhaps that question could be brought to the minister responsible for power.

The Forest Service is not working on the assumption that the McGregor power development will take place. All we're doing is trying to be prepared if in fact it does, so we can protect the resource there. That's all that's happening now. We have no information and we're not planning to wait for it now. We just want to be prepared if in fact it does. We would rather not see the flooding of valuable timber. We want to plan far enough ahead so that if in fact it does, we can look after the timber resources.

MR. SKELLY: You've mentioned that you've done some analysis of timber values, that your staff has met with B.C. Hydro, that they have met with the forest companies in the area, particularly with Northwood, and that initial logging plans are being developed for the area.

I'm wondering what timber values have been established for the McGregor River basin. What value of timber is there in that area? I'll just quote an article from the Fisherman newspaper of June 4, 1976:

"The backup from the dam would flood enough timber in the McGregor River valley to keep every sawmill in the Prince George region busy 24 hours a day for an entire year.

"It would reduce the flow of the Fraser past Prince George by one-third, causing a severe increase in the amount of pulpmill effluent in the river, in relation to its total volume. Three mills currently empty into the Fraser River above Prince George.

"It would cause the width of the Parsnip River to increase from 100 feet to almost a mile, causing severe erosion, ruining one of the best canoeing rivers in the province."

It has tremendous economic impact and a tremendous ecological impact. I'm wondering what timber values will be lost in that McGregor River drainage, should the McGregor diversion go ahead.

The member for Columbia River (Mr. Chabot), who is not in the House at the present moment, said something like 457,000 cubic feet of timber was lost in his riding to park purposes when parks were created under the NDP government. He quoted such high site timber areas as Top-of-the-World Park, where it's difficult to find a tree, much less cut it down and remove it. He was quoting areas such as the Purcell Wilderness Area and Assiniboine Park, where access is difficult through the national park. But here we have an area which I understand is....

AN HON. MEMBER: Assiniboine Park? Where's that?

MR. SKELLY: Mt. Assiniboine Park? Just through Kootenay National Park there and turn right.

AN HON. MEMBER: That's what you did last year — you turned right.

[ Page 3068 ]

MR. SKELLY: In any case, the member for Columbia River feels we should create no new parks in the province because it takes prime timberland out of production. The member for Shuswap (Mr. Bawtree) believes the same thing — that we should go and log parks and not create any new parks because it takes land out of production and eliminates jobs in the forest industry. Here we are eliminating 64,000 acres of what I understand to be prime timber in the Prince George area. I want the minister to explain to me what the value of that timber is in terms of the value of the timber for jobs, the value of the timber on an annual dollar basis and the value of the timber on an annual saved production basis.

HON. MR. WATERLAND: Mr. Chairman, I do not have that information at my fingertips. The Forest Service does have it and it can be obtained. If the member would like to meet with my chief forester, I'm sure he can have the information. I think we must keep in mind, though, that if that acreage is someday taken out of the forest base and placed into a reservoir for hydro-electric power development, then we must weigh the value of the hydro-electric power development against the value of the forest which could grow there. I'm sure this will be done. The details of the actual volume of timber there can be made available to the member should he wish to visit me and I can get it from my chief forester, or else he can go directly to the chief forester and get it.

MR. SKELLY: The Minister of Forests is also a member, I understand, of the Environment and Land Use Committee. Has this matter been brought before the Environment and Land Use Committee — the complete matter of the full cost-benefit analysis of doing the System E dams on the Fraser with particular reference to that McGregor River diversion which, as I say, many people in the province consider could destroy the whole Pacific salmon fishery industry on the Fraser River to the tune of $40 million annual net value to this province? Has any discussion taken place in the Environment and Land Use Committee on the McGregor diversion?

HON. MR. WATERLAND: To this point in time, Mr. Chairman, no, the matter has not come before the Environment and Land Use Committee. However, as plans proceed or studies of all the possibilities of the McGregor power development go ahead, I'm sure that they will, and every consideration will be given to the effect it will have on the salmon fishery.

MR. J.R. CHABOT (Columbia River): Mr. Chairman, I listened to the member for Alberni (Mr. Skelly) confuse the statement I made in the House last Wednesday regarding the alienation into single use of land within my constituency. I pointed out at that time, last Wednesday, that in my constituency we have over seven million acres of parkland — that is, national parks and provincial parks. Within the whole framework of British Columbia, we have 6.9 million acres of Class A parks. In other words, within the Columbia River constituency we have more parks than there are in the whole province of British Columbia.

I never at any moment suggested there is anything wrong with parks, but I suggested that within my constituency we have an abundance of parks — national and Class A and wilderness conservancies as well — and I suggested that we are establishing parks and proposing additional parks — massive parks. I'm not talking about small parks. I'm talking about the proposed Palliser wilderness conservancy which involves 100,000 acres of land. If there is an additional wilderness conservancy established in my constituency, in an area where timber is fully committed at this time, then it's going to be at the expense of jobs within the riding — an area which has more parks right now than the entire province of British Columbia.

The member suggested there was no timber alienated in the additional 222,000 acres over and above the seven million acres of parkland which exist at this time. I suggest to the member that the timber that has been alienated by the additional parkland reserves of 222,000 acres comprises: the Purcell wilderness conservancy where, for single-use purpose, 284 million cubic feet of timber have been alienated; Top-of-the-World Park, which is 19,800 acres — 33 million cubic feet of timber have been alienated; the expansion of Mt. Assiniboine Park — 90 million cubic feet of timber have been alienated. The fact that the Purcell wilderness conservancy has a line drawn down Flag Creek to the Kootenay Lake has alienated an additional 50 million cubic feet of timber in the Carney Creek drainage.

In other words, over 450 million cubic feet of timber has been alienated to a single-use purpose in an area that has an absolute abundance of massive-sized parks. I'm not suggesting for a moment that there might not be a need for the establishment of a small park in certain areas within my constituency. But I suggest there's a need to take into consideration what is happening to the forestry industry within my constituency that is presently faced with a cutback — an allowable cut — of 25 to 30 per cent. If you alienate an additional 100,000 acres by the establishment of the Palliser wilderness conservancy, you have cost a lot of jobs in my area. I'm not suggesting for a moment there's not a need.

Interjection.

MR. CHABOT: Yes, it was done in the last three and a half years. Yes, Bob Williams, that's right.

[ Page 3069 ]

There have been 222,000 acres of additional land alienated in an area that has more acres of parks per capita than anywhere else in the world. How many times must I say this?

I hope the Vancouver Province is here listening to the distorted report they wrote last Thursday morning in their paper in which they suggested I was advocating logging in parks — a complete distortion of what I was trying to say. I was trying to say that within my constituency we have an abundance of parks and any further alienation into single use is going to cost employment in my constituency that is already faced with a 25 to 30 per cent cutback in that particular industry — our most important industry. Certainly there might be a need for additional parks in British Columbia, but throughout the whole breadth of this province they don't have the equivalent of parks I have within my constituency.

I hope the minister will take this into consideration when new wilderness conservancies and new massive parks are considered within my riding: it's going to be at the expense of employment. The people I represent recognize and accept the fact that we have parks, and are very grateful for the fact that we have three national parks and three massive class A parks and one wilderness conservancy, and they enjoy it, but they think that there are other places in British Columbia at this time which need parks more than my constituency does.

MR. SKELLY: Mr. Chairman, it's strange that the member who has just sat down...when they were building Hydro reservoirs in his area, when they were burying the best timber in his area under water — putting the best timber in that area under water never to be redeemed again — that member didn't protest. Where are all the jobs from B.C. Hydro? Where is all that power going from Columbia River dams? Where are all the benefits going? Down into the United States — drained right out of that member's riding, right out of his area of the province mainly down into the United States. How much protest did we hear from that member when the Columbia River dams were being built, when the best timber in the Kootenays — probably some of the most productive timber in the Kootenays — was being put under water never to be redeemed again and those jobs permanently lost to the people of this province, people working in the forest industry.

What I am concerned about, Mr. Chairman, and what the people of Fort George are concerned about, is that some of the prime timber in the Prince George forest district and in the McGregor drainage will be put under water never to be available to the forest industry of this province again, never to be used to create jobs again. In a report that was done by the Fort George Regional District on the McGregor drainage they say that there will be no long-term economic advantage to that area from the McGregor diversion. It will be....

MR. CHAIRMAN: Hon. Member, may I suggest that perhaps a better time to be discussing this kind of material would be under the estimates of the Minister of Transport and Communications, under whose purview falls matters pertaining to energy?

MR. SKELLY: Oh, Mr. Chairman, he's kicking around senior citizens on the ferries right now.

MR. CHAIRMAN: Order, please!

MR. SKELLY: He's not concerned about forest values in the McGregor River area. When we ask this minister a question, he is laying the track for creation of the McGregor diversion, and he is saying: "Oh, the ecological impact is not my jurisdiction. The economic impact isn't my jurisdiction; that belongs to some other minister." Then when we ask that other minister the question he is going to say: "Oh, the forest values aren't my jurisdiction. In fact, the Forest Service has already helped to log away the timber values so there are none left." Somewhere we are going to have to pin these people down.

AN HON. MEMBER: Right on!

MR. SKELLY: Is the McGregor diversion going ahead or isn't it? Is the Forest Service laying track for the McGregor diversion which, as I said, threatens to unleash an ecological time-bomb on this province...?

MR. CHAIRMAN: With the greatest respect....

MR. SKELLY: We have to begin at the beginning, Mr. Chairman.

MR. CHAIRMAN: Order, please. With great respect, I think that those answers could best be given by the minister under whose responsibilities that particular question falls, I would suggest that would be the Minister of Transport and Communications.

MR. SKELLY: This minister announced that he is working.... In his own staff meeting on June 14 they said the McGregor diversion project was completed as far as the B.C. Forest Service was concerned. His staff in the Prince George district met with B.C. Hydro and Northwood Pulp to discuss logging plans for that area. The McGregor River diversion is going ahead through the Forest Service.

They are laying track for something that has a tremendous environmental and economic impact on the province, and the place where it has to be stopped, or where it has to be analysed in detail

[ Page 3070 ]

before it goes ahead, is right here under this minister's estimates. The impact on this province is going to be tremendous. We could destroy the whole fishing industry on the coast of British Columbia simply because this minister has begun the process to create the McGregor diversion, and somewhere it has to stop or somewhere it has to be analysed and explained.

This minister is planning to remove the timber from that 64,000-acre basin — some of the best timber in the Prince George region. The results of his studies will destroy jobs in that area, and will remove from forest use or utilization forever some of the best timber in the Prince George district.

We would like to see a tremendous amount of public discussion and public information before that department lays the track for the McGregor diversion that will be an irreversible process. By the time we get to the Minister of Transport's estimates, he will say the process is underway and cannot be reversed. We are asking this minister now to stop and analyse it, to put it to public meetings, to get a full public discussion on the environmental and economic impact before anything goes ahead in this area.

Mr. Chairman, these meetings with Northwood Pulp have been held in secret. The B.C. Forest Service staff meetings have been held in secret, and those in-service bulletins aren't distributed to any member of the public or even to MLAs who choose to get them, unless they know a friendly forest ranger or somebody who is willing in the engineering section to bring it up.

HON. MR. WATERLAND: Point of order, Mr. Chairman. The member said that these meetings are held in secret, that the information is secret and the only way he can get it is that he knows a friendly forest ranger. Now I take offence at that, on behalf of my department, because this information is not secret, and if the information was secret there is no way members of my staff would give it to that member or anyone else. These people operate under the civil service oath. If that member is suggesting that these members of the Forest Service willingly violate this oath to give them information, I think this member owes an apology to the members of the British Columbia Forest Service.

MR. SKELLY: Not the Prince George forest district.

MR. CHAIRMAN: Order, please. All I can ask the member who has the floor: is he imputing any improper motive to any member of this House?

MR. SKELLY: Of course not. I think the minister is a little sensitive, Mr. Chairman.

MR. CHAIRMAN: Please proceed.

MR. SKELLY: Would the minister undertake, then, to make available to MLAs the in-service news releases of the Forest Service, if they are not secret?

Interjection.

MR. CHAIRMAN: Please proceed.

MR. SKELLY: I was just asking the minister, if that information isn't secret, would he undertake to make it available to the MLAs who are interested in it?

HON. MR. WATERLAND: It is not of a confidential nature in the Forest Service. That can be made available for anyone who has a specific problem they wish to inquire about. Now if he is suggesting that every piece of correspondence that is sent back and forth between members of the Forest Service has to be made public information, he's being completely unrealistic, and he knows it.

That member also knows that I did not state that the Forest Service is preparing the way for the McGregor Dam, as he said I did. That was an attempt by that member to say that I had said something which I had not said. I said the Forest Service is looking at what effect McGregor power development would have if, in fact, it ever goes forward. We want to be ready for it. We know that if, in fact, it ever does, it will have an effect on the logging plans of the companies working that area, and we want to be ready if and when that ever does happen. There is no commitment by any department of this government towards that development yet. It is being studied and if it is for the benefit of the people of British Columbia it will happen, and if it's not, it won't.

MR. SKELLY: Just one last comment, Mr. Chairman. One of the problems that we have faced in this province year after year is.... Our forestry and fisheries committee found this out when we travelled around throughout the province, including to the Prince George area. They found out that plans were well underway, that engineering was well underway for a single use, in this case a Hydro reservoir or a diversion of the Fraser River system into the Peace drainage, and that, in fact, the plans were almost a fait accompli before other groups and other resource values ever could be taken into consideration.

What we are concerned about is that this work has taken place behind the closed doors of cabinet, within the civil service, without adequate public disclosure, without adequate information going out to the public, and people aren't aware of the values that could be lost to this province as a result of the work that is presently being carried out by the Forest

[ Page 3071 ]

Service. That's what concerns us.

There is a tremendous amount to be lost. There is a tremendous amount of work being done by your department that is laying track for the McGregor River diversion, and people throughout the province are concerned about that fact.

MR. H.J. LLOYD (Fort George): Mr. Chairman, there are just a couple of points that I would like to clear up. The member for Alberni (Mr. Skelly) mentioned the regional district's concern on the flooding of the McGregor. I believe the minister has specifically stated there is no firm commitment right now for the flooding to go ahead.

I do commend the forest district in Prince George for their planning to enable them to get the timber out if and when the plan does go ahead. I think that is only logical planning, and even the opposition should be able to understand that type of planning at times.

There is access into the area. Some of the timber has been taken out. The value that is going to be flooded is quite narrow, 64,000 acres. When it is compared to the amount of parkland that has been taken out in other areas of the province, it isn't all that significant. It is a good fertile area for growing timber, but the upper reaches that are being flooded aren't that high a quality of timber.

MR. SKELLY: How many jobs are under water in your area?

MR. LLOYD: He mentions the fact that it is a single-use purpose that the flooding is taking place for, and that is not entirely true by any means. Even in Prince George — a good deal of Prince George would never have been built if they adhered to today's strict flood level control. For a lot of our city the only thing that keeps the water back is the CNR grade, and to be able to control one-third — I don't think it is quite one-third — to control a substantial amount of the Fraser River would be a real asset to our city. We've got something like $2 million tied up in island cash property right down in the lower part of the river that is completely.... We can't even utilize it at the present time, because there is no adequate means of flood control.

The member for Dewdney (Mr. Mussallem) stated the problem in his area. The whole Lower Fraser Valley is just living under a time-bomb. If that hot weather had continued this spring, with the snow level they had in the Nechako area, in the north area, you would have wiped half the Fraser Valley out. You say it is a single-use purpose, this flood control. I don't think you're particularly accurate on a lot of your figures there.

I commend the personnel in Prince George for the planning they are doing. I think it is long-range planning. I'm sure there will be a suitable hearing before it goes ahead.

MR. KING: Mr. Chairman, I just wanted to comment on the remarks that the member for Columbia River (Mr. Chabot) made. I had to take issue with his description of alienating forests — timber products — for use as parks. I want to say, Mr. Chairman, that that is a strange description of park use — "alienation of forest land."

That demonstrates the basic difference between the government we have in power today and the more progressive, enlightened approach that was witnessed during the New Democratic Party term of office. We recognized that preservation of the environment, preservation of wilderness areas and parkland for future generations was an investment in the future rather than the alienation of a resource. It seems, Mr. Chairman, that that member and his government are not happy unless they are cutting down all the trees that exist and digging out minerals at any expense to the environment, at any expense to the population and the future populations of this province.

Mr. Chairman, the member for Alberni (Mr. Skelly) was quite correct when he said that that little member for Columbia River sat quietly in the former Social Credit government without even a whimper and watched millions of acres of timberland flooded — inundated forever — in the Duncan Lake area. That was a lost timber resource, Mr. Chairman.

MR. CHAIRMAN: May I just remind you that vote 75 belongs to the Minister of Forests and not to the member for Columbia River.

MR. KING: I appreciate that, Mr. Chairman. It is the loss of valuable forest products that I am referring to in the Duncan Lake area, in the Mica Creek area which borders between my own riding and the member for Columbia River's. Unfortunately....

HON. MR. PHILLIPS: Aye!

MR. KING: Unfortunately....

SOME HON. MEMBERS: Aye!

MR. KING: I can see I am going to be here for a while, Mr. Chairman. (Laughter.)

MR. CHAIRMAN: Order, please. On vote 75, please.

MR. KING: Mr. Chairman, that's the alienation that the member should have been complaining about. That was alienation in its truest sense — the loss of a resource without even the opportunity to cut and to utilize that timber buried under hundreds

[ Page 3072 ]

of feet of water, never to be exposed again.

Mr. Chairman, I recall visiting the former Minister of Lands, Forests and Water Resources under the Socred regime, Mr. Ray Williston — a name that has been raised again recently in the public life of the province. Do you know what he told me he was going to do to recapture that timber that was lost in those river reservoirs, Mr. Chairman? He said he was going to get a big barge with some kind of mechanical saws on it that were going to reach down under the water and cut that timber 300 feet below the surface. That's what he told me he was going to do. It wasn't going to be lost at all.

That kind of ridiculous approach to forest management in this province — indeed, resource policy generally — seems to be repeating itself once again when we have an attitude that land or timber that's preserved for the future is, in fact, alienated. I couldn't let the opportunity go by without reminding the member for Columbia River that his definition was a completely inappropriate one.

MR. D.F. LOCKSTEAD (Mackenzie): Mr. Chairman, I did want to ask the minister one or two questions about the community of Ocean Falls. I know that the minister was up in Ocean Falls not too long ago, had a first-hand look at that community and did meet with the local representatives of management and the union and people in the community.

I am concerned about the future of that community, Mr. Chairman. I would like to know, for example, if the minister is prepared to table the Simons report, because I haven't seen that report.

HON. MR. WATERLAND: I understand we are on vote 75.

MR. CHAIRMAN: We are on vote 75.

HON. MR. WATERLAND: Mr. Chairman, vote 75 has nothing whatsoever to do with Ocean Falls Corp.

MR. CHAIRMAN: Perhaps the hon. member for Mackenzie would ask his question under the appropriate vote.

MR. LOCKSTEAD: Vote 75 takes in very nearly every branch of the Forest Service. This is keenly related to Ocean Falls.

Interjection.

MR. CHAIRMAN: Order, please. The Minister of Forests on a point of order.

HON. MR. WATERLAND: Mr. Chairman, the Forest Service has nothing to do with the operation of the Ocean Falls Corp.

MR. CHAIRMAN: Perhaps under the appropriate vote the member would be able to ask his question. We're now on vote 75.

MR. LOCKSTEAD: Thank you, Mr. Chairman.

Well then, perhaps the minister could relate to me how he intends to utilize the timber resources in the Kimsquit valley, for example. That is under vote 75, Forest Service. The future of Ocean Falls is clearly and closely related to the timber resources in the Kimsquit valley, in the Rivers Inlet area and the Chilko plateau. I would very much like to hear from the minister how he intends to utilize those resources that now belong to the Crown that may be alienated from this province, from the people of this province by various private corporations who are interested in that area. I'd like to hear the answer to that, Mr. Chairman.

HON. MR. WATERLAND: Mr. Chairman, the Ocean Falls Corp. acquires all its timber on the log market; they don't have timber holdings of their own. However, the government is always ready to discuss any proposal for the development and utilization of the forest resource both in the area of Ocean Falls and any other area of British Columbia in which there is a resource which is not allocated. The Ocean Falls H.A. Simons report has not been tabled yet. I'm sure it can be made available through the British Columbia Cellulose Corp., which company contracted that report with H.A. Simons.

The report does not come up with any economically feasible operation for the Ocean Falls Corp. but other things are worthy of study, and studies are proceeding. At the present time, Ocean Falls will carry on as it is and hopefully it can be integrated with a more economically viable situation so the whole resource in that area can be more fully utilized for the benefit of the people of British Columbia.

MR. KING: Yes, Mr. Chairman, under this particular vote, I should raise one other matter and I have had an opportunity to discuss it with the minister briefly on another occasion. That is the availability of timber in the province to private individuals who may want to construct log cabins, log homes, in a variety of circumstances — in some cases as a recreational facility, in others as a permanent residence. I know that the minister has some concern in this regard too, because log cabin building and the log cabin lifestyle are coming back into their own in British Columbia. They're earthquake-proof, they're cosy and they represent a more simple way of life.

In serious terms, though, I think that with the difficulty in finding land in urban areas, the difficulty

[ Page 3073 ]

in the high cost of modern building materials, people in the province should be encouraged to avail themselves of timber for the construction of private homes and facilities. Many people, particularly in the interior, in both small town settings and in rural areas, live in close proximity to a whole forest, much of it with no plans to be utilized, much of it on Crown land under various reserves, not necessarily all forest Crown land.

You often find that there's no timber available whatsoever, either for home construction like I've referred to, or on the other hand for firewood, and many people like to go and cut firewood for fireplaces. It seems innocuous and a real anomaly that in a province blessed with the kind of timber resources that we have there's very little availability of woodlots or of Crown land that might be available to the public for cutting logs for home construction and so on.

I wonder, since I talked to the minister about a month ago, I believe, about this, whether he's had an opportunity to talk to his departmental officials to find out whether or not some rational approach can be taken so throughout the different regions of British Columbia the public, the people who after all own this resource, may have some kind of access — both for wood supply for fireplaces, for cutting logs on Crown land, or under some circumstances, to obtain the necessary materials for log cabins and the likes of that — whether there is provision for a reasonable stumpage payment and this kind of thing.

I think it's important, because there's nothing that frustrates people and annoys them more than to be shut out from participation and use in the resource that's available right on their own doorstep. They sit at home and watch large industries exploiting that resource, quite often industries that are perhaps based in some other region or perhaps another part of the land, for that matter. Here the local residents, who are pioneer stock in an area quite frequently, are precluded from utilizing that timber in any way.

While I realize that there must be some pretty strict regulation over timber, I do think that it's important that the public has some mechanism of getting in and finding a right to utilize material in that way. It's a productive purpose. In many cases it's therapeutic, and it's certainly socially desirable. I hope that the minister and his department will take this matter seriously, because it's a matter of frustration that I have encountered, not only in my own riding but throughout many other areas of the province.

I know that the minister is a bit of a log-cabin buff too, and I hope that he will take this matter seriously, discuss it with the chief forester and perhaps come up with some reasonable plan for...

MR. CHAIRMAN: Order, please. The member for Oak Bay on a point of order.

MR. WALLACE: I draw your attention to the clock, Mr. Chairman.

MR. CHAIRMAN: So ordered.

MR. KING: I didn't even get to finish.

...for allowing access to local residents. (Laughter.)

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolution, was granted leave to sit again. Leave granted for division to be recorded in the Journals of the House.

MR. COCKE: Mr. Speaker....

MR. SPEAKER: Hon. Member, one moment please. Hon. Member, I had recognized the hon. Provincial Secretary on a motion....

Interjection.

MR. SPEAKER: It's not a matter of overlooking you, but I had recognized the hon. Provincial Secretary on a motion to adjourn. All I can suggest is that the hon. Provincial Secretary withhold the motion until after I've listened to you if it's a point of order.

HON. MRS. McCARTHY: Yes, I'd be pleased to so do, Mr. Speaker.

MR. COCKE: Mr. Speaker, reluctantly on behalf of the chairman of the public accounts committee, I ask leave that the public accounts committee be enabled to sit tomorrow morning while the House is in session.

Leave granted.

Hon. Mrs. McCarthy moves adjournment of the House.

Motion approved.

The House adjourned at 11:03 p.m.