[ Page 699 ]

CONTENTS

Routine proceedings

Tabling documents

Interim report of the advisory committee on the control of Eurasian water milfoil on the Okanagan Lake system.

Hon. Mr. Nielsen — 699

Pacific National Exhibition financial statement.

Hon. Mrs. McCarthy — 699

Oral questions

BCR settlement with M.E.L. Paving.

Mr. Macdonald — 699

BCR settlement with Ragan Construction.

Mr. Wallace — 702

Committee of Supply: Ministry of Economic Development estimates

On vote 79.

Mr. Lauk — 703

Mr. Cocke — 709

Mr. Gibson — 712

Hon. Mr. Phillips — 716

Mr. Gibson — 718

Hon. Mr. Phillips — 719

Mr. Lauk — 719

Mr. Wallace — 720

Hon. Mr. Phillips — 723

Mr. Lauk — 724

Division on the motion that the committee rise and report progress — 724

Mr. Lauk — 724

Hon. Mr. Phillips — 725

Mr. Lauk — 726

Hon. Mr. Phillips — 726

Mr. King — 727

Hon. Mr. Phillips — 730

TUESDAY, FEBRUARY 8, 1977

The House met at 2 p.m.

Prayers.

HON. R.S. BAWLF (Minister of Recreation and Conservation): Mr. Speaker, I have several introductions to make today. First of all, seated on the floor of the House today is my counterpart, the Hon. Allen Adair, Minister of Recreation, Parks and Wildlife for the province of British Columbia.

lnterjections.

HON. MR. BAWLF: Alberta, pardon me! (Laughter.) Well, it was a short stay, Mr. Speaker.

MR. D. BARRETT (Leader of the Opposition): Goodbye, Sam.

HON. MR. BAWLF: Accompanying Mr. Adair are senior officials of his department: his deputy minister, Mr. Tom Drinkwater, Dr. Smith, and Mr. Fisher. I ask the House to bid them a warm welcome.

Mr. Speaker, also seated in the gallery today is a group of ladies and gentlemen from Victoria Silver Threads. I ask the members to issue them a very warm welcome as well. Lastly, but certainly not least, I'm pleased to introduce a group of young ladies — 27 pupils — with their teacher, Miss Smith, from Norfolk House School for Girls. I understand these young ladies have made a special sacrifice today, Mr. Speaker, in giving up an English exam in order to be here today.

MR. G.V. LAUK (Vancouver Centre): Mr. Speaker, I would ask the House to join me in welcoming three distinguished members of the New Democratic Party from my riding in Vancouver Centre — Mrs. Doris Mutch, Mary Engelman and Thelma Pankiw — and Mrs. Betty McKay from Terrace.

MR. A.B. MACDONALD (Vancouver East): Point of order, Mr. Speaker. Mary Engelman is from Vancouver East. (Laughter.)

MR. SPEAKER: The chair accepts your point of order.

MR. E.N. VEITCH (Burnaby-Willingdon): Mr. Speaker, seated in the members' gallery this afternoon are two distinguished residents of that great constituency of Burnaby-Willingdon, Mrs. Florence Cooper and Mr. Walter Cooper, and I would like this House to bid them welcome.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing): Mr. Speaker, with your kind permission today, seated on the floor of the House and just arrived in the chamber is the Hon. Andre Ouellet, Minister of State for Urban Affairs in the national government. Mr. Ouellet and representatives of Central Mortgage and Housing Corporation were in Vancouver for the HUDAC conference which commenced yesterday, and I'm very pleased to be able to introduce him to you and to members of this Legislature.

Also, Mr. Speaker, in welcoming Mr. Ouellet and others to Victoria, I would like to express my appreciation for the very productive discussions which we held in Ottawa just a few days ago, January 31, and for the attitude of cooperation and willingness to work with the British Columbia government which Mr. Ouellet emphasized at that time.

MR. G.F. GIBSON (North Vancouver–Capilano): M. Forateur, je voudrais me joindre du gouvernement pour accueillir M. Ouellet, un ami de beaucoup d'ans, et lui souhaiter une bonne visite à Victoria. J'espere que cette visite va être une autre étape pour améliorer les relations amicales centre nos gouvernements pour les gens de la Colombie Britannique.

MR. MACDONALD: Mr. Speaker, to the minister I would like to say bienvenu et aimez-vous le juge? (Laughter.)

MR. BARRETT: Mr. Speaker, I'd like the House to welcome students from St. Patrick Secondary School.

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, with leave I'd like to table an interim report of the advisory committee on the control of Eurasian water milfoil on the Okanagan Lake system.

Leave granted.

Hon. Mrs. McCarthy tables the financial statement of the year ended November 30, 1976, of the Pacific National Exhibition.

Oral questions.

BCR SETTLEMENT WITH M.E.L. PAVING

MR. MACDONALD: Mr. Speaker, I would like to ask the Attorney-General a question, since his House investigation is continuing. I hope he hasn't got Mr. Vickers investigating me, but the letter says it's continuing. In view of the fact that Mr. Broadbent confirmed in writing that all his actions in relation to the M.E.L. Paving contract were upon the advice and

[ Page 700 ]

consent and with the instructions of the board of directors of B.C. Railway, and the fact that there is a statement by Ray Williston, made on January 22 of this year, that contracts such as M.E.L. Paving were never considered by the board of directors of B.C. Railway, obviously one or other of the two is not telling the truth.

In connection with the continuing investigation I ask the Attorney-General: (1) Will you take evidence on oath from Mr. Broadbent and Mr. Williston? (2) Will there be cross-examination of these gentlemen? (3) Will it be a closed proceeding or will it be open to the public?

HON. G.B. GARDOM (Attorney-General): I'll take it as notice.

MR. LAUK: A supplementary, Mr. Speaker, to the Attorney-General, on the same subject. Today an order-in-council was released, indicating that a royal commission will be held into all aspects of the British Columbia Railway. I would ask the Attorney-General to give this House and the people of British Columbia the assurance that this royal commission would include within their purview of investigation the out-of-court settlement of the M.E.L. Paving case and all aspects having to do with contracts for the Dease Lake extension, including the taking on oath of evidence of board of directors as witnesses before this commission in both current boards and past boards relating to that contract.

HON. MR. GARDOM: I think the question, Mr. Speaker, is more appropriately addressed to the Provincial Secretary (Hon. Mrs. McCarthy). But I would respond to this extent, hon. member: the terms of reference as set out in the order-in-council appointing the royal commission are very, very broad, and broad enough to include all aspects of the railway's operation. As to what the commissioners will look at, it is up to the commissioners.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: Mr. Speaker, I appreciate the Attorney-General's answer, but what is the government's desire? There are specific statements in the order-in-council. Is it the government's desire that the commission specifically look at the Dease Lake extension and the M.E.L. Paving contract? Yes or no.

HON. MR. GARDOM: In response to the hon. Leader of the Opposition's question, I would like to read to him the order-in-council.

MR. BARRETT: I read that.

HON. MR. GARDOM: I'm not too sure that you have, sir.

"Whereas the Public Inquiries Act provides that whenever the Lieutenant-Governor-in-Council deems it expedient to cause inquiry to be made into any matter connected with the conduct of any part of the public business of the province, the Lieutenant-Governor-in-Council may, by commission, issued under the Great Seal, appoint commissioners to inquire into such matters;

"And whereas the operation of British Columbia Railway is of continuing public concern;

"And whereas the future development of the province and, in particular, the central interior and northern areas of the province is in part contingent upon the viability of transportation facilities such as the British Columbia Railway;

"And whereas it is desirable that the operations of the railway be conducted in accordance with good business practices consonant with the development of the province;

"The commissioners are hereby appointed to make inquiry into, and concerning, all aspects of the management and development of the British Columbia Railway, and in participation of the Crown therein as shareholder, and in so doing to inquire particularly into:

" (a) the relationship of the railway to the economic and social well-being of the province and, in particular, those parts of the province presently served, or proposed to be served, by the railway;

" (b) the relationship of the railway with other transportation facilities;

" (c) the foreseeable financial requirements of the railway for all purposes;

" (d) the overall operation of the railway...."

MR. BARRETT: M.E.L., Garde!

HON. MR. GARDOM: Should I perhaps repeat that? That was: " (d) The overall operation of the railway...."

MR. BARRETT: M.E.L., Garde!

MR. SPEAKER: Order, please! The hon. minister has the floor.

HON. MR. GARDOM: It continues:

" (e) the accounting procedures utilized by the railway;

" (f) the procedures utilized by the railway for the acquisition of materials, equipment and supplies;

[ Page 701 ]

" (g) the procedures utilized by the railway for the planning and construction of any part of its undertaking, and the implementation thereof;

" (h) the viability of the railway as it has existed and operated, and the desirability of effecting any changes;

" (i) the legislation applicable to the railway and the desirability of revision."

Those questions, my friend, should be put to the commissioners.

MR. BARRETT: Mr. Speaker, we did not ask whether or not the Attorney-General could pass the core curriculum. We are inquiring....

MR. SPEAKER: What is your supplemental question, hon. member?

MR. BARRETT: The supplementary is — yes or no — will the M.E.L. case be part of the public inquiry? Will the principals be called and summonsed to speak and give testimony? Yes or no.

AN HON. MEMBER: Read it again.

MR. SPEAKER: Order, please.

HON. MR. GARDOM: I would tend to think that I have to repeat this again to the hon. member of the opposition.

MR. BARRETT: Yes or no!

MR. SPEAKER: Order, please!

HON. MR. GARDOM: Commissioners are appointed, "to make inquiry into, and concerning, all aspects of the management and development of the railway...and in so doing to inquire particularly into...the overall operation of the railway."

MR. BARRETT: Yes or no on that!

MR. MACDONALD: Is it a coverup or not?

MR. BARRETT: Yes or no on M.E.L.!

[Mr. Speaker rises.]

MR. SPEAKER: Take your seat, hon. member.

Interjections.

[Mr. Speaker resumes his seat.]

MR. LAUK: Mr. Speaker, having regard for the fact that a question was asked of the

Attorney-General in the last spring session about an out-of-court settlement to M.E.L. Paving, to which he answered that there would be a completed trial in the matter and that was not the case, I repeat the question to the Attorney-General: will this inquiry be allowed to investigate the M.E.L. Paving case and the scandal surrounding it?

HON. MR. GARDOM: Once again, I'm going to have to refer the hon. member to the terms of the royal commission.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

HON. MR. GARDOM: Once again I'm going to have to inform the hon. members what the commissioners will look at. It's up to them.

MR. BARRETT: Oh, you're destroying your reputation! Shame!

MR. SPEAKER: Order!

MR. GIBSON: A supplementary on the same subject. The minister said to this House a few moments ago that in the absence of specific direction it's up to the commissioners whether they decide to look at this or not. There's no specific direction in these terms of reference. Therefore I ask him if it is the wish of the government to have some guidance for the commissioners. Is it the wish of the government that they look into M.E.L. Paving and the contract awards of the past?

HON. MR. GARDOM: I would like to say this to the hon. members once again. I would assume....

MR. BARRETT: Oh, oh!

HON. MR. GARDOM: What are you saying "oh!" about, my friend?

Interjections.

MR. SPEAKER: Order, please!

HON. MR. GARDOM: Just calm down and have a drink of water. You'll feel better tomorrow. (Laughter)

Once again, I will repeat to the hon. members that the commissioners are instructed to inquire into the overall operation of the railway, the overall operation of the railway, the o-v-e-r-a-1-l operation of the railway — the whole bag! (Laughter.)

MR. MACDONALD: A supplementary question to

[ Page 702 ]

the Attorney-General. In view of the fact that the Attorney-General appoints the counsel for this commission of inquiry, will he instruct that counsel that Mr. Williston and Mr. Broadbent attend and give evidence as to the discrepancy in their statements relating to M.E.L. Paving?

HON. MR. GARDOM: I find, Mr. Speaker, with all deference to my learned friend, who is also an officer of the court and, furthermore, the former Attorney-General of this province, that if he would suggest that the Attorney-General will be appointing the counsel and that the Attorney-General will be instructing the counsel...

AN HON. MEMBER: Shame!

HON. MR. GARDOM: ...I would suggest very much that the Attorney-General go back to his law books.

AN HON. MEMBER: Oh, oh!

HON. MR. GARDOM: The commission counsel, my friend, as probably a first-year law student would know, would be appointed by the commissioners.

AN HON. MEMBER: Garde Bonner!

MR. W.S. KING (Revelstoke-Slocan): On a supplementary, I want to ask the Attorney-General if, since the Dease Lake extension of the B.C. Railway is not yet operational, we are to conclude that the terms of reference preclude any investigation of the Dease Lake extension and the contracts awarded subsequent thereto — because it is not operational, and that is precisely exempt from the order-in-council.

HON. MR. GARDOM: How much time do we have left in question period? Do I have time, Mr. Speaker, to continue to read these particular sections?

The question, once again, my dear friends across the street is this: the responses to your many queries.... I would really commend you to read the order, and you will see the depth of it. It is an extremely broad order.

MR. BARRETT: Yes or no.

MR. WALLACE: Mr. Speaker, yesterday the Minister of Economic Development....

AN HON. MEMBER: Aren't you up on a supplementary?

MR. SPEAKER: Order, please.

MR. WALLACE: I never said that.

MR. SPEAKER: The hon. member for Oak Bay....

Interjections.

MR. SPEAKER: Only if the hon. member defers to you. He's been waiting patiently to get into this question period.

MR. WALLACE: Mr. Speaker, I did not imply that I was on a supplementary.

MR. SPEAKER: No, I realize that.

MR. WALLACE: I have another question.

Interjections.

MR. SPEAKER: I recognize the hon. member for Oak Bay.

BCR SETTLEMENT
WITH RAGAN CONSTRUCTION

MR. WALLACE: Mr. Speaker, yesterday I questioned the Minister of Economic Development regarding another settlement which BCR had made with Ragan Construction Ltd. in which the BCR had bought $600,000 worth of used equipment and had paid creditors. He assured the House that he would immediately inquire. I wonder if he could give us the answer to yesterday's question.

HON. D.M. PHILLIPS (Minister of Economic Development): In answer to the member's question, I am informed by management that the settlement was, indeed, 100 cents on the dollar to the preferred creditors and 50 cents on the dollar to the unpreferred.

MR. WALLACE: Can the minister tell the House if he considered that it was customary for the BCR to buy equipment owned by Ragan Construction? What does the BCR have in mind to do with that equipment? Is it going into the construction business on its own?

HON. MR. PHILLIPS: As I informed the House yesterday, the settlement on the outstanding claim by Ragan Construction was settled with counsel for the creditors and counsel for the railway, supervised by the management. I would like to think that they made the best settlement that they could under the circumstances.

MR. LAUK: Supplementary to the Minister of

[ Page 703 ]

Economic Development. Does the minister have any business or political association with any principal of the company known as Doug Ragan Construction Limited?

HON. MR. PHILLIPS: Not that I can recall immediately. I'd say the answer is no. Not that I recall, no.

MR. SPEAKER: Hon. members, before we proceed further into today's business, I just want to make one comment concerning question period. That is that I try to accommodate as many members as possible during the time that we have, according to our standing orders. Now if it's the desire of the members to take up most of that time or part of that time with interjections, so that either members placing questions or members answering cannot be heard in this House, that's the way the time of the question period will be consumed. But if you have a desire to ask questions and listen to answers, then it would be to the benefit of all the members to allow that person who has the floor to ask the question to state it and to allow that person who has the floor to answer the question to give that answer without interruption.

MR. MACDONALD: Mr. Speaker, on a point of order, is it not true that private members cannot ask questions that are already recorded in public documents that are available to the members? If that is true, is it proper for the Attorney-General to take up the time of question period in reading the terms of an order-in-council which is available to the members? You know, I think that is an abuse of the privileges of the House and I wish you'd look at that.

MR. SPEAKER: Speaking to the hon. member's point of order, the question was raised by members of the official opposition. The House has no knowledge of the order-in-council until it is presented by the hon. Attorney-General to the floor of the House; then it becomes knowledgeable to the House because it was presented. I presume the hon. Attorney-General will table the document.

HON. MR. GARDOM: I'd be delighted, Mr. Speaker, with leave, to table this order-in-council, No. 454.

MR. SPEAKER: The hon. Attorney-General tables a copy of an order-in-council.

Orders of the day.

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

ESTIMATES: MINISTRY
OF ECONOMIC DEVELOPMENT
(continued)

On vote 79: minister's office, $141,324 — continued.

HON. MR. PHILLIPS: Mr. Chairman, I'd just like to inform the hon. members of the opposition that I have the president of the Development Corporation in Victoria today, and I would appreciate some knowledge from them if they would mind having any debate on the Development Corporation now so that I can allow him to return to Vancouver.

MR. CHAIRMAN: The Chair will move at the direction of the House.

MR. LAUK: From time to time there will be questions on the British Columbia Development Corporation, and the minister has to keep himself advised. That would be in his discretion. I thank him for his courtesy nevertheless.

MR. CHAIRMAN: What is the wish of the House?

AN HON. MEMBER: Well, proceed to the vote.

MR. LAUK: A number of questions were asked of the minister on the very general speech. I'll just briefly review them. The minister has notes of these, I think, and if he'll indicate by a nod of the head or a raise of the eyebrow whether he has had a note of the questions I asked him last day....

I don't see any movement at all. Perhaps we should send the hon. member for Burnaby-Edmonds (Mr. Loewen) to check him out. Oh, there he is. Well, Mr. Chairman, perhaps the minister can deal with those questions in due course.

A very unfortunate situation has arisen, and the minister is required to comment on it, with respect to the British Columbia Railway. On the one hand, some days ago the Premier, who is not in this chamber....

Interjection.

MR. LAUK: Mr. Chairman, is it allowable for the front bench to participate in speaking in these estimates? If so, could you indicate to the Minister of Mines and Petroleum Resources (Hon. Mr. Chabot) that he will have an opportunity in due course?

MR. CHAIRMAN: The first member for Vancouver Centre has the floor.

MR. LAUK: Thank you, Mr. Chairman. That's probably good enough.

[ Page 704 ]

Interjection.

MR. LAUK: Well, now we're hearing from the Minister of Labour (Hon. Mr. Williams), Mr. Chairman, in committee.

AN HON. MEMBER: You'll have lots of time.

MR. LAUK: He's anxious to hear my every word. He's hanging on my every word and becomes terribly disappointed when there's a pause. I understand he's installed at least three extra phones in his ministerial office to hear the tremendous response to his advertisement for a chairman of the WCB. That and other little problems are probably distracting the minister, and he has nothing better to do than to come into the House and listen to my speeches.

MR. CHAIRMAN: Hon. member, we are on vote 79. May I suggest that we curtail the debate to a point.

Interjections.

MR. CHAIRMAN: Order, please. Perhaps other hon. members might observe the standing order that says a member making his speech ought not to be interrupted.

The member for Vancouver Centre, please proceed.

MR. LAUK: To the Minister of Economic Development, then: the Premier, who is not in this House, tabled in this House some time ago a letter from the chairman of the board of the British Columbia Railway. In that letter, the chairman — and this is the birth of another afterthought, Mr. Chairman, this letter from Mr. Fraine — indicated that the lawyers who were giving the board advice on the M.E.L. Paving case said they wouldn't win, and they settled. Yesterday the Attorney-General, after a long absence from the House — that, I am sure, was justified under the circumstances — tabled a letter that stated, inter alia...

Do you know what inter alia means, Mr. Attorney-General?

HON. MR. GARDOM: Pretty fancy stuff.

MR. LAUK: Well, you're doing away with all that fancy stuff now.

...that the allegations of civil fraud raised by Derril Warren were found some time in 1974 to have no substance. After these many days — this letter is dated February 7, 1977 — we have a very apparent contradiction. On the one hand we have an investigation that albeit is continuing. But on February 7, he was pretty far down the road. And if he wasn't I'd like to find out why after that many days. He says he's found no fraud, civil or criminal. On what basis, then, did the board settle? The board chairman says it's because the lawyers said we should settle because we'll lose the case. Except that they didn't, did they, Mr. Chairman? I wonder if the minister can tell us whether it was the lawyers who advised the board, or the minister or the Premier? That is what I think really happened, because the counsel in charge of the trial said he could win. That's what he said.

HON. L.A. WILLIAMS (Minister of Labour): How many times has he said that?

MR. LAUK: Is the Minister of Labour, with his cross-comment, casting any negative reflections on the ability and competence of counsel for the railway in this case? He says no. I'm glad he said that because I agree with him. He's a first-class counsel.

MR. KING: He always talks when he should be listening anyway. Doesn't he, Harvey?

MR. LAUK: He said that we're going to win. In spite of the fact, on Christmas Eve the government forked over $2.5 million and, by that act, he admitted the guilt of the previous board of at least civil fraud. He had no right to do it. I say it was political interference of the worst possible order. I say that the minister has a lot to answer for in the M.E.L. Paving case settlement.

If the letter submitted by the Deputy Attorney-General is correct — and he does state that all the evidence wasn't before him, but he did see all the evidence that was before the judge and the case was closed as far as the evidence was concerned — and if on the evidence before the judge the Deputy Attorney-General.... And I take it that by the Attorney-General filing this letter in this House, he agrees with the opinions expressed by the Deputy Attorney-General. That must be taken as given. The chief law enforcement officer and lawyer of the cabinet has said on the evidence before the judge there's no civil fraud.

On December 24, 1976, a $2.5 million settlement was announced. Why? Look what's happened since. Everybody is lining up at the wicket from Ben Ginter to I don't know how many others. Perhaps the minister should tell us how many. And they want settlements. Boy, is it easy now. Easy pickings. This minister and this government are shovelling the taxpayers' money out of the back of a truck. They're just throwing millions of dollars away.

MR. WALLACE: It's old Vander Zalm's line.

MR. LAUK: And the Minister of Human

[ Page 705 ]

Resources (Hon. Mr. Vander Zalm) seems to think that's terrible when you're giving an extra $1.23 to a person in a wheelchair. That is disgusting! But it's all right to give it away to Ragan Construction in the minister's riding. It's all right to give it away toM.E.L. Paving and these poor, poverty-stricken, under-privileged British Columbians who live in Alberta. That is all right. But $1.23 to someone in a wheelchair is a travesty. A $1.23 increase to a person on welfare or a person on Mincome is a disgrace. But $2.5 million to M.E.L. Paving and $1.2 million to Ragan Construction, because it's embarrassing, is all right — that's good business.

Well, Mr. Chairman, through you to the minister, if he runs his business in Dawson Creek that way, he should come to see me about a bankruptcy application. That's not good business practice; that's sheer, unadulterated irresponsibility.

These are the kinds of fuzzy decisions that that minister is going to make because he is reeling under a scandal-ridden ministry. He cannot make clear decisions and precise decisions. He is worried where his next ministerial assistant is going to come from and how long that assistant will last, and if he can trust that assistant.

In the same breath he has the unmitigated gall to come into this chamber and say in his opening address and speech on estimates: "I'm going to introduce a Statistics Act." And, of course, you know what that means. He is going to require industries throughout the province to provide confidential information about their investment and structure to a ministry that leaks from the top, middle and bottom. Would you, if you were running a grocery store or a hardware store or a car dealership, Mr. Minister of Finance, tell the Minister of Economic Development your investment plans and holdings and corporate structure when you knew that everybody in the neighbourhood would hear about it the next day?

The minister must relieve himself of his duties and allow the Premier to appoint another minister. There's no question about that. And what about what happens when a minister is concentrating 90 per cent of his time worrying about scandals when he should be looking at the administration of the railway, looking at the administration of his department and of the Development Corporation, and he's ignoring those heavy duties and he's busy putting out fires for his Premier. He's putting out the fires of M.E.L. Paving and Doug Ragan Construction and maybe Ben Ginter Enterprises or whatever.

I saw Ben Ginter waiting outside the minister's office the other day carrying a big box of Kleenex. He knows a good thing when he sees it. He had an empty bag in his hand — one that usually carries money — a satchel.

MR. GIBSON: Was he going in or out?

MR. LAUK: He was going in for his welfare payment. Everybody's lining up at the wicket, Mr. Chairman.

Now it's all right for the minister to feel wounded and sit back and say, "oh, you can pick on me; I'm the martyr of the week, " and not answer any questions. After all of the questions that have been raised in the throne speech debate and in the budget debate in this House, the minister hasn't said two words about it — nothing. He won't answer any questions. He refers to the judicial inquiry, which doesn't even have a review of it, or he takes it as notice, or he doesn't show up. Most of the time he doesn't say anything. He's a wounded stag. But, that's not good enough. A Crown minister has to answer questions. He can't avoid them. He has to give the detailed answers. If he doesn't, we assume two things: he's afraid of the answer or he doesn't know the answer. In either case, that's grounds for dismissal.

The minister has the opportunity now, being on the board of directors of the BCR, that he will not, in any way, prevent the judicial inquiry into the BCR from inquiring into M.E.L. Paving and into the Doug Ragan Construction Ltd. settlements. He must assure the people of British Columbia that he will not politically interfere with this judicial inquiry. Oh, it's fine for the Attorney-General (Hon. Mr. Gardom) to stand up in question period and read out the order-in-council and really look quite surprised at why the opposition presses the question.

Well, you know, in June, 1976, Mr. Chairman, you were sitting in your seat at the time and I'm sure you were as shocked as I was when the settlement took place. We were in this House in June, when the Attorney-General stood up and said: "We will not settle the M.E.L. Paving case out of court." The minister stood up and said the same thing: "We will not settle the M.E.L. Paving case out of court." So is there an objection now when we press the Attorney-General and the minister to assure this House that they will not interfere with this inquiry and prevent it from naturally inquiring into the M.E.L. Paving settlement and the Doug Ragan Construction settlement?

HON. R.H. McCLELLAND (Minister of Health): The member for Vancouver East asked us to interfere. He asked us to interfere.

MR. MACDONALD: I asked to present evidence.

MR. LAUK: You can present evidence. Of course you can! The British Columbia Railway's officers will be called before this commission, or should be.

Interjections.

MR. LAUK: That's correct, and I'd be glad to give

[ Page 706 ]

evidence, and I can give a whole pile. I'd be delighted. I'm checking the supreme court rules now, Mr. Chairman, to see how much witness fees are.

HON. W.N. VANDER ZALM (Minister of Human Resources): You might even pick up the files out of your basement.

MR. LAUK: Oh, here we hear from the Minister of Human Resources, the man from Surrey. You know, poor little Surrey... I really feel sorry for Surrey, Mr. Chairman. This is very apropos economic development. First of all, they had a reeve — I forget his name now — and he was turfed out of office under a cloud of suspicion. Then they had the Minister of Human Resources there — a most unsatisfactory mayor, everybody will agree...

HON. MR. VANDER ZALM: But he defeated the former Provincial Secretary (Mr. Hall).

MR. LAUK: ...and now they've got Ed McKitka.

MR. CHAIRMAN: Order, please, hon. member.

MR. LAUK: Is Surrey to be spared nothing? (Laughter.)

HON. MR. VANDER ZALM: They were spared the NDP!

MR. LAUK: Are they to be spared nothing? Surrey's loss is our gain.

MR. CHAIRMAN: Hon. member, would you please restrict your debate to vote 79? That's the matter presently under consideration.

MR. LAUK: But that's the minister, Mr. Chairman, who I related to earlier who was complaining about $1.23 to somebody who was blind, while his colleague is running around shovelling money out of the back of a truck not $1.23, but bundles of millions of dollars.

HON. MR. VANDER ZALM: Give names.

MR. LAUK: The $1.23? When are your estimates coming up?

HON. MR. VANDER ZALM: Name names! I want names. I don't want to wait until estimates. I want them now.

MR. LAUK: I will give you names. Will you give me $1.23 for every name?

MR. G.R. LEA (Prince Rupert): You've got a whole battery of investigators and you want us to give you names!

MR. LAUK: I seem to have hit a sore spot with the Minister of Human Resources.

MR. CHAIRMAN: Hon. members, may I just interrupt the proceedings long enough to remind every member of the House that we will not be able to proceed with orderly business unless we observe the standing orders of this House? Therefore I will ask all members not to interrupt the member who presently has the floor and who was doing quite well until he was interrupted.

May I also take the opportunity at this present moment while I have interrupted the proceedings to remind all hon. members that matters to be discussed in committee need to adhere to certain general practices of the House? Although matters before a commission are not necessarily out of order to be discussing, nonetheless I would draw all members' attention to the fact that we need not, or should not, address ourselves to evidence or proceedings that are presently before a commission, because in so doing we are really detracting and rendering impotent the very commission that we wish to do the job for us. I would just give this as a general reminder and a short-term warning that this is something that we ought not to be involved in in this House. I know the hon. member will take this into consideration. Please proceed.

MR. LAUK: Mr. Chairman, I appreciate your caution in this respect. I just refer this to Mr. Chairman: I am being guided in my remarks by, and am very cognizant of, the many judicial inquiries and in-house inquiries that this government has knee-jerked itself into.

This very question, Mr. Chairman, was discussed in the House of Commons in Ottawa at some length on May 2, 1976, when Speaker Lamoureux gave what should probably be regarded, it states in The Parliamentarian, as the definitive ruling on the matter. He said:

"The creation of a royal commission is purely an administrative matter. The commissioners are not called upon to render decisions on what has been submitted to them, but are only asked to make recommendations which the government is free to act upon or not, as it wills.

"In other words, parliament is still the highest court in the land. One of its traditional rights is to express its power by the enactment of legislation, and this right cannot be set aside by a mere reference of certain matters to a royal commission for a study thereof, and recommendations thereon. They are, it is true,

[ Page 707 ]

given such powers as are vested in any court of record, but the wording of the Act does not constitute them as a court of record."

Speaker Lamoureux went on to confirm that in discussing the matter before a royal commission members should not delve into the evidence itself, as "we would not want to have a parallel inquiry going in the House at the same time as that now being carried out in another forum," with which I thoroughly agree. I wasn't discussing the evidence at all. I was being critical of recent settlements which may or may not be the subject matter of the inquiry, but certainly do not delve into the evidence.

If the minister says that he will refer the matter and give evidence before an inquiry, I will take my examination into a different area. However, he drew a distinction between the essence of the evidence and knowledge acquired from evidence, which is to be considered in the House as a collateral issue.

I refer Mr. Chairman and the Chairman's staff to The Parliamentarian of July, 1976. There is a very, very excellent article on the sub judice convention in the Canadian House of Commons.

MR. CHAIRMAN: Hon. member, your point is well taken. It is not to debate the issue at all at the moment, but just to give the House a caution on the proceedings, because Speaker Michener, in May, 1968, also handed down a ruling which would read as follows:

"I would accordingly rule that it is not out of o rd er to discuss, in this instance, transportation problems generally when such matters have been — referred to a royal commission. On the other hand, I would also rule that reference should not be made to the proceedings, or evidence, or findings of a royal commission before it has made its report."

I think that this is the area in which the caution is made.

MR. GIBSON: Mr. Chairman, on that same point of order, I have been studying the same ruling to which you have made reference. I would suggest to you, sir, that since the commission has just been constituted, there currently is no evidence or any proceedings. Therefore it seems to me that debate is wide open.

MR. CHAIRMAN: To the point, I think that I must say that there is no way that debate in this area could be called out of order. It is only a caution to members to not make the commission's work more difficult than it may already be.

MR. LAUK: Mr. Chairman, the letter that was tabled in this House, as I stated earlier, by the Deputy Attorney-General.... "It is the opinion of the Attorney-General that no Attorney-General tables a letter of his second-in-command unless he adopts it as his own."

Interjection.

MR. LAUK: No. As a matter of fact, I think most of the letters under the Attorney-General's signature are written by the deputy. I think it is more the other way around, because I don't see any of the Attorney-General's colourful language in the letters I see coming out of his office these days, the colourful language that we were all so used to in the old days, when he sat on this side of the House.

In any event, Mr. Chairman, getting backAp the Minister of Economic Development, if the minister is not prepared, or cannot respond, or feels incapable of responding to the critique that has been well established and set up by the opposition parties of this House, he should step down.

The letter from Mr. Fraine, who is chairman of the British Columbia Railway, indicated that they settled the M.E.L. Paving case because there was every indication that they would lose the case before the judge. The Deputy Attorney-General has investigated. He has tabled the letter, and he says: "There is no evidence of civil fraud." Well, why on earth did they settle the case? Is the Fraine letter a fraud in itself? Is the Fraine letter a self-serving letter that was drafted by the chairman of the board at the direction and the insistence, or at least, encouragement, of his political masters?

Those charges must be answered. They cannot go unanswered, because if it is left the way it is, you have two contradictory bodies of evidence. On the one hand, you have Williston denying that the BCR board ever dealt with contracts with M.E.L. Paving. On the other hand, you have Joe Broadbent, the former vice-president of the railway, saying: "Yes, we did. I received all my instructions from the board."

Who is telling the truth? On one hand you have a letter from the chairman of the board of directors saying: "We would have lost the case." On the other hand you have the Deputy Attorney-General saying "no." Who is telling the truth? Can the minister provide clarification?

The minister has also stated in an opening address.... By the way, I checked my opening address for 1975, and it's almost word-for-word the same address I gave! Then it was new.

AN HON. MEMBER: Were you both living in the same place?

MR. LAUK: He's had 14 months and he comes up.... I'm complimented. I really am complimented. Or should I be? Should I be complimented that the minister would adopt my material, after what's

[ Page 708 ]

happened?

MR. GIBSON: Yes, you should be!

MR. LAUK: Maybe I should. Maybe I should be embarrassed. Maybe I should reconsider those press releases and retract them. I won't say the minister is lazy. He's distracted, and who wouldn't be? He doesn't know whether he can talk to his wife. He's worried about whether he talks in his sleep. Where's the leak? The ship of state leaks from the top, Mr. Chairman.

I think that the minister should carefully consider his position as minister. Last day, he was about to rise in his place — or was that just a way of getting me to be seated so you could bring on the bill? I wasn't quite sure. Was the minister up to his old tricks, Mr. Chairman? Does he have any life left? Gee, I hope so.

I asked him about these coal commitments that he got in Japan. He took a trip to Japan, you see. He said he had new coal commitments for purchases of B.C. coal to Japan. Well, my instructions are, from information I have, that he almost lost the ones we had. I ask the minister to be specific. I certainly hope that he's right, and I certainly would be delighted if he has new coal contracts. Can he give us some of the details in the estimates before the committee now?

There are 112,000 people unemployed in British Columbia today. It's the highest actual number of unemployed in the history of this province. It's worse than it ever was in the 1930s. Of course, there was a smaller population then. But it's worse today, nevertheless, than it was in the 1930s. There are 112,000 able-bodied British Columbian men and women who are unemployed. People who are looking for work — 112,000. I am told there is something like 30 per cent unemployment in the hon. member's constituency of Skeena. The percentages are unbelievable, Mr. Chairman.

I heard that the minister went to Ottawa. He's starting to take care of his own constituency, which is his perfect right to do, but he's the minister for the whole province. Let me just canvass for you what I heard his success was in trying to get jobs for his own constituency. He went to Ottawa and he said to the ministers there: "You have 30 days to come up with the money I need for infrastructure in the coal development in the northeast." Then he left, and everybody in Ottawa looked at each other and said: "Who was that guy?"

MR. LEA: That was about 60 days ago.

MR. LAUK: "Who was that masked man?" Well, 60 days have gone by and he's been waiting by the phone and he says: "When will they call? When are they going to call?"

He didn't check, of course. You see, they didn't have a half-billion dollars. Oh, they could have written one of those $181 million cheques, I suppose — the ones that bounce from here and there. Get Evan the paperhanger to write you a $500 million cheque for the northeast coal development. Or rubber-cheque Bill. It's just not going to happen.

Pipe dreams, Mr. Chairman, are not going to happen. Ministers who do will make things happen in this province — not ministers who dream, who are totally out of their depth, who have revealed no judgment in hiring of personal staff and who have not come up with one new idea in 14 months. Here were the financial wizards who got swept into office and who were going to turn this economy around. Today, at 3:05 p.m., 1977, there are 112,000 British Columbians out of work.

The minister promised during the campaign in 1975 that he would turn the economy around.

MR. LEA: He did!

MR. LAUK: He fulfilled that promise. He turned it around and down. It's now going down the tube. He promised to get B.C. moving again. He fulfilled that promise. They're moving — to Alberta, Saskatchewan, Manitoba, Ontario, California, Washington, Oregon, Hawaii — if they get a flight. He fulfils his promises.

Mr. Chairman, I want you to know, I want the minister to know and I want everybody to know that I do not hold anything personal against this minister. People who sacrifice time and their family life for public service must be complimented, and I do so. Each and every person who enters public life comes under a great deal of pressure, and I don't wish to be a part of the pressure on that minister. But the responsibility of each and every member of this House, including those strangely silent backbenchers in some of whose ridings there's over 30 per cent unemployment — they're very silent — is to represent those people. We haven't got too much time to feel sorry for one another in the stresses and pains of public life. There are people that are lining up for the dole for the first time in the history of this province. There are 112,000 people unemployed. And this minister is sitting back very smugly and saying, "All right, martyr me."

I say, get off your haunches, Mr. Minister, and fight back. Fight back. You've got the intestinal fortitude. You go back into those files and dig up some more of my press releases. Some of them are good. You fight back.

MR. W.G. STRONGMAN (Vancouver-South): Who's got the files?

MR. LAUK: And remember one thing: if you provide positive new programmes for employment in

[ Page 709 ]

this province, you will have the wholesale support of the New Democratic Party. Not only the parliamentary side but all of the membership and supporters in this province will get behind you and push — not over the cliff; they'll get behind you and push if you've got some good ideas.

But that weak, year-and-a-half-year-old speech is admitting defeat. You've hoisted the white flag. We haven't got time for people who sit around feeling sorry for themselves because we represent 112,000 people who today are unemployed and looking for work. It's no longer a joke where we used to call across to each other: "Get off your fat stats." It's no joke for those people, Mr. Chairman. The minister should know that, and I would hope knows that.

These pipe dreams of economic development, this phony pipeline in the northeast and a coal development that he hasn't got any money for — even if they were feasible, would they come onstream in time to help 112,000 families that are not receiving income today?

A word about the Development Corporation. In the first year of operation, in 1975, the Development Corporation averaged under the NDP administration 20 small-business loans a month. In one year, to December 31, 1976, under the present administration, their total number of loans to small businesses was 20. And here is the government that represents small business in this province? This is the government that represents the community businessman?

Another form of treachery — they've turned their backs on the municipalities. They promised revenue sharing; homeowners' taxes go up. They said they'd get the economy moving again; there's 112,000 people unemployed. They said they'd help the community businessman; 20 small-business loans in one year. And in the first year of operation, it was 20 a month. Too small potatoes for the minister? Too busy with Cheyenne Pete? No feeling or concentration on the little businessman in Dawson Creek or Pouce Coupe? And the minister has one of those nervous laughs.

Interjection.

MR. LAUK: Yes, he's sympathetic all right. I don't want him to be sympathetic to me, Mr. Chairman, through you to the Minister of Finance (Hon. Mr. Wolfe). I want him to be sympathetic to the people in his riding. I want him to be sympathetic to the people unemployed in this province. I don't need his sympathy; I can take care of myself. I'm talking about people in this province who relied on his promises for jobs. And all he's worried about is where his next executive assistant is going to come from.

MR. LEA: The same place as the last two — the Premier's office.

MR. LAUK: Well, hire someone quick and we'll hand you over a piece of tape to tape up his mouth and you'll be well away. Have someone who can type with one finger so you can catch him in time.

Mr. Chairman, this side of the House deeply regrets that the Minister of Economic Development has been such a hopeless and dismal failure in his portfolio in one year. I had not thought for a moment that it was possible....

Three minutes, Mr. Chairman. Thank you, Mr. Chairman. The Minister of Health (Hon. Mr. McClelland) is just delighted. I can't wait for the Minister of Health's estimates. I can't wait for his estimates.

Interjection.

MR. LAUK: What a beautiful guy. Do you remember the old Hansard quotations from that member over there? Totally one of the most completely irresponsible opposition members in the history of British Columbia parliaments, and now he's over there so responsible.

"Your three minutes are up."

AN HON. MEMBER: Are you sure of that? Put another dime in.

MR. CHAIRMAN: Hon. member, your three-minute warning was a very short three-minute warning, and the red light is on now.

AN HON. MEMBER: You have so much to say when you're in opposition.

MR. D.G. COCKE (New Westminster): Mr. Chairman, there are a number of disasters in the new government. It's bad, however, to have a combination of disasters at this time in our history that really affect the lives of the people in the province. On one hand, we have the Minister of Human Resources (Hon. Mr. Vander Zalm) who indicates that unemployed employables can go looking, and we have the Minister of Economic Development, who really isn't very much interested in economic development. In his own First Minister's riding — his own Premier's riding — we have an unemployment rate of 20 per cent.

Last year I brought to the attention of the Minister of Economic Development a situation where a carpet company up there decided to move on to Calgary. This was a carpet company owned by the Capozzi brothers and family and all. They were moving to Calgary because they were told they musn't pollute

[ Page 710 ]

the Okanagan area. That minister ignored that kind of thing. He was going to attract business, but he can't even attract his own friends, Mr. Chairman. That's why we have situations, which I am sure the minister is aware of, such as were cited by the member for Skeena (Mr. Shelford) who admitted it in the House. He said: "There are 30 per cent unemployed in my riding." The member for Omineca (Mr. Kempf) denied there was unemployment in his riding. But I suggest, having done a little bit of listening up there, that I have heard there is a good deal of unemployment in that member's riding, so he had better go home and check. Meanwhile, we have 112,000 people in this province unemployed.

AN HON. MEMBER: Shame!

MR. COCKE: Mr. Chairman, it's a lot more than 112,000 people because many of the people who are unemployed in our province and have been on unemployment insurance are now off unemployment insurance, have given up, and are no longer registered as unemployed, so the numbers are considerably more than 112,000. But I think it's significant that in the Premier's own riding his paper, Kelowna Today, on February 2, 1977, just last week, indicates that there is 20 per cent jobless in that riding. If I were the Premier and I were here, I'd fire the Minister of Economic Development for his total inadequacy. We asked him some time ago to look at that minister's record, such as it is — a record that I am sure is deemed by some to be unfortunate and by others to be a disaster.

[Mr. Veitch in the chair.]

Mr. Chairman, who are we talking about? Let's look at that minister for a moment or two in opposition. Let me quote one or two of that minister's — at that time, member's — discussions in this House. Remember, Mr. Chairman, his comments on Gottesman and company? Incidentally, I wonder if any of you read Beale's last newsletter. You would, Mr. Member from Harvard andNorth Vancouver–Capilano (Mr. Gibson). You would have read it.

AN HON. MEMBER: Vicious attack.

MR. COCKE: It's no attack at all. I'm just acknowledging the fact that you would be reading something like that. In the last paragraph of Beale's letter they are talking about this prestigious firm, how they'd endowed a chair at Columbia University in perpetuity, and talking in terms of the chairman of the board, Mr. Wallach. This is what that member said about Ira Wallach in 1974: "Gottesman and company and Ira D. Wallach probably ripped off last year about $8 million." That's what he said, that very responsible Minister of Economic Development. In opposition that's what he said about Ira Wallach.

MR. BARRETT: Say anything! Do anything!

MR. COCKE: Say anything, do anything in order to try and win the next election.

MR. BARRETT: Smear!

MR. COCKE: Smear. He even attracted, with his smear, a Conservative or two and a number of Liberals. I was surprised at that, because if anything would have repelled a person who was really interested in decency in politics, this is the kind of thing that would repel them.

He went on to say, Mr. Chairman: "This is the very thing this opposition pointed out would happen when the ministers of the Crown — indeed, the cabinet — get into business such as they are in taking over the private sector." Do you remember what was happening to Ocean Falls at the time? And he accused us of taking over the private sector. They were down the tube. They were dumped by Crown Zellerbach.

That minister is showing the kind of sensitivity today that he showed then when he was over here. Obviously, that minister must reflect some of the government's own feeling with respect to this whole question. He should hang his head in shame.

There are 20 per cent unemployed in Kelowna and 30 per cent unemployed in Skeena. The member for Skeena (Mr. Shelford) said, and I think he said it very aptly and very well: "They have absolutely no direction." I can see why they have no direction. Every three days we have a royal commission investigating another arm of government, or a Crown corporation, or government wheelings and dealings. I suggest, Mr. Chairman that not only can that minister not run a popcorn stand, but the whole government together can't run a popcorn stand.

MR. BARRETT: It would be cheaper if we gave them a popcorn stand.

MR. COCKE: It really would. And you know, possibly a place to put it would be right outside where they're ploughing for...whatever. Does anybody know what they're ploughing for out there?

HON. MR. McCLELLAND: They're looking for Gary's files.

MR. COCKE: Mr. Chairman, those are interesting remarks from across the floor — interesting indeed!

I just want to go on and quote a few more bits and pieces from that minister when he was a member of

[ Page 711 ]

the opposition. He links the government to Gross, the director of Can-Cel, to a web of international corporations attempting to take over the B.C. forest industry, to possibilities of receiving kickbacks and favours under the table through international trade and black-market trade with the Third World. These are the kinds of accusations he made then when he was an opposition member, accusations that were so irresponsible, had they been reported widely they would have shocked the world. They certainly shocked any of us who had the patience to listen to his diatribe.

Mr. Chairman, many of us wondered where the whole question of a state police force originated. All you have to do is go back in Hansard and you'll find where that original suggestion came from. I'm surprised at the Liberals...

MR. GIBSON: Former!

MR. COCKE: ...excepting former Liberals — that's right, I'm insulting you — accepting partnership with this kind of people.

Let me just go back to where the member, on February 4, 1974, I believe it was, said:

The intent of the Attorney-General, even though he couches it in general terms with establishing a police commission, is to establish a police force in the province of B.C. That's step No. 1. The Attorney-General says we can't give all this socialism at once because it will alarm the people. We must couch it in broad, general terms. We must tell them that we're going to establish a police commission.

Mr. Chairman, he was totally irresponsible with respect to the Land Commission. He spoke for hours and hours upon hours on Bill 42 at the time, showing his total lack of respect for farmland. This side was particularly happy when he was divested of that responsibility. Hopefully, the now minister is going to have a little more concern than that minister showed while he was Minister of Agriculture.

Interjection.

MR. COCKE: We wonder whether he was part of that dinner meeting — or was it a luncheon — with Harry Terry. Or was it a kaffeeklatsch?

MR. CHAIRMAN: We are on vote 79.

MR. COCKE: You're on vote 70, Mr. Chairman; I'm on vote 79. I'm discussing the Minister of Economic Development and the fact that he's led us down the garden path in the past 14 months in this province. He should be ashamed of himself. He should resign. I hope that he'll stand up in the House today and say he is resigning.

Never in the history of this province has there been such utter disaster; never in the history of this province has there been such total chaos. Where did it originate? It originated from a group of people over here who felt that they knew more about economics than economists. They thought that they could squeeze this province dry, Mr. Chairman. They thought that they. could squeeze $500 million out of he economy. Incidentally, when you have the ripple effect of that, it's something in the order of $2.5 billion that they have squeezed out of the economy. Then they thought that they could run a productive province. You can't do it. That Minister of Economic Development has done nothing about it.

Now either he is out there taking the flak, which is not his responsibility, or else he is specifically responsible because this is his area of concern. He said nothing. He gets up once in a while in this House and gives bombastic statements, such as: "Tomorrow everything will be okay. Everything will be fine. We're on the right course." Once, in a Freudian slip, he said: "We'll put this province on the rocks." It's the only thing that that minister has said that has really come true. Last year in some of his press releases he was telling us how "we're getting it together, friends" — I'm paraphrasing — "and we're heading right out there and we're going to do a real good job." Well, how long must we wait must we wait?

We recognize that the western world has problems with respect to the economies of the different countries. But we recognize that B.C. has a special problem, one that, by comparison, has taken us farther down than virtually any other economy. So, Mr. Chairman, will the minister stand up in this House and tell us something definitive about where we're going? Will he tell us something definitive about what he's going to do about unemployment? Will he tell us something definitive about what he's going to do about the exodus of business from this province — and it's occurring. I don't know. There is either an exodus of people and businesses, or somebody was lying a couple of years ago. You could go for miles in the city of Vancouver, and in New Westminster, and never see a "For Rent" sign and never see an empty business block. Now, I suggest to you, you go all over Vancouver, New Westminster, Victoria, or wherever you like, and you'll find empty apartments, empty houses, empty business blocks....

MR. GIBSON: Those are old Social Credit headquarters.

MR. COCKE: Well, that partially solves the problem, but I don't think even they, with all their money, have that many.

MR. WALLACE: Well, there's one on Oak Bay Avenue. It's empty.

[ Page 712 ]

MR. COCKE: Oh, it's empty? Well, Mr. Chairman, that minister has a lot to answer for, particularly in view of the viciousness of his past. We expect that he could stand up and repent, and as part of his repentance, he might be forgiven if he had resigned. He should resign and he should do it now.

He sits there and smiles and he thinks: "What can I say? What can I do? I'll just sit here and smile and maybe it'll all go away." But I'll tell you — between you and the Minister of Human Resources, you're not a very humorous act. You're not a very good act.and I suggest that what we need in this province is some very serious attention paid to the economy. That minister has an obligation to do so, and we need some very serious consideration paid to the people that are affected by the economy of this province. Mr. Chairman, hopefully he's going to get up and respond to some of the questions asked by the member for Vancouver Centre and to some of the questions that were asked by the member for Vancouver-Burrard. I suggest that he stands up and indicates whether he'll resign.

MR. GIBSON: Mr. Chairman, if the minister wants to answer any of the questions, I'll be glad to defer to him.

Interjections.

MR. GIBSON: Well, Mr. Chairman, apparently not right now.

The minister indicated earlier on today that the British Columbia Development Corporation is represented here, and that's very nice. I wonder if we could get some information out of the BCDC representative, via the minister, because the facts we have from the annual report are all too sketchy.

I was puzzled, I might say in passing, by the figures from the hon. member for Vancouver Centre, but the annual report doesn't do much to clear it up.

This report was received in my office — the date stamp says January 26, 1977. It's the second annual report, up to March 31, 1976. It's almost a year old. I don't know what anybody who can't keep books faster than that is doing running the Development Corporation of the province of British Columbia.

AN HON. MEMBER: They needed time because they've got two sets.

MR. GIBSON: Now I don't want to be unfair to the BCDC people. It could be that they keep their books a lot quicker, and it's just that the minister doesn't pass the figures on to us in time.

AN HON. MEMBER: Right on.

MR. GIBSON: But I want to know why that corporation, that should be some kind of an inspiration to all of the businesses of this province, isn't able to get its books out within a month or so, the same as any other corporation is expected to do — preferably even faster, if they're the kind who keep on their toes and make a bit of money. So it's entirely unsatisfactory to me, Mr. Chairman, that we're working on data that's about a year old. But even that data that's a year old is pretty incomplete.

The main job of the BCDC and the reason it was established by this House was to assist and invest in small business around this province. Now, Mr. Chairman, we're given some figures here for the year ended June 31, 1976. It indicates the corporation participated as to loans or to guarantees in the amount of $7,588,000. It doesn't give us any breakdown as to how much is loan and how much is guarantee. It seems a pretty elementary initial question to ask, so I would ask that.

Then I would go on to say: how's it looking for this year? We're 10 months into the fiscal year. How do the first nine months look? The minister has got to have those figures. Of course he has. He's a director of a company that keeps its books properly. What are those numbers so we can judge the progress of this year?

Now the next fact that we're given in this out-of-date report is the fact that there were 72 loans or guarantees approved. Mr. Chairman, what I would like to know, in order to better assess the job that the BCDC is doing, is: what is the name of each company that got each loan and what was the amount of each loan or guarantee? It seems to me that that's an obvious and elementary question to ask. It should be made public.

I notice the minister shaking his head. If he's worried about commercial confidentiality, he can even call a private committee session, perhaps. I can't buy the fact that they shouldn't be made public. I'd like to go one step further. If you're really going to assess the job that this corporation is doing, you not only need a list of who got the loans; you need a list of who didn't get the loans. That is where the real assessment of the judgment of the BCDC comes in. Are they doing their job?

The minister is shaking his head. I want him to stand up and articulate his philosophy as to why that couldn't be. I don't know how else, Mr. Chairman, this House can control that corporation without having information of that kind. An ordinary company has a shareholders' meeting every year where we can go and ask questions. If I had a share in MacMillan Bloedel or something, I could go ask a question. They might not give me the answer but at least I could ask the question; I could raise a little hell.

MR. WALLACE: Just like the House — you can

[ Page 713 ]

ask a question but you don't get an answer.

MR. GIBSON: But there's no meeting of the BCDC I can go to. Maybe we can get at them in public accounts. I can tell you, I'm going to ask for this information in public accounts. But I'd rather have the minister give it to this House now for the purposes of these estimates. Otherwise, we can't judge what kind of a job they're doing. I hope they're doing a good job, but I have no evidence to indicate that.

The next question I have about BCDC — and I'm very concerned about this — is the news that we have received that this corporation is to be in charge of all of the province's industrial land. Mr. Chairman, this might be a good thing on an organization chart. But what protections does this House have and do the people of this province have for the integrity of that stewardship? I want to make it very clear that I'm not making any kind of a charge whatsoever. I'm just saying that as long as those kinds of transactions are within the public service, you have some kind of protection in that there is an oath of office and you're not to profit from insider knowledge and all this kind of thing. What kind of protection do we have in terms of the integrity of that stewardship in the B.C. Development Corporation? I simply can't overemphasize the importance of this, not just to this House but to the minister's own skin in years to come. He has got to be sure that that operation is 100 per cent clean. I want to know what checks and balances there are there. What about the procedures for negotiations when you're dealing with private companies? How do you arrive at the price? We have to have some guarantees on that, Mr. Chairman.

That's what I have to say on BCDC and that will give the gentleman here from that corporation a few minutes to chew away at that.

Now I'd like to go on to the British Columbia Railway, We have been told, Mr. Chairman, that the BCR people were going to be here today, and I'm sorry they're not. Perhaps the minister thought that the Premier's press conference this morning would effectively cool that subject out, but I'm telling you it hasn't. I'm delighted there is an inquiry.

I want to suggest to the minister that there has to be two aspects to that inquiry and that he has to make it abundantly clear to the government, and through the government to the commissioners in his capacity as a director of B.C. Rail, that there must be these two aspects. One aspect is the past and one aspect is now and henceforward. They are both important. The segment of the inquiry which looks into the past will identify some good things and some mistakes. And there is a purpose for that.

The first purpose is so we can learn by them. Who was it who said that if you don't study history you're doomed to repeat it? I wouldn't want to be doomed to repeat the BCR history of the last few years, I'll tell you that. But we can learn from it.

The second thing, Mr. Chairman, is that an inquiry into the past will tell us who is still around who was involved in those good things or those mistakes of the past who today deserves promotion or deserves to be fired out of the back of the caboose. That's the second reason.

The third reason, Mr. Chairman, is very simple: to fix political responsibility for the things that have been going on in that railway. Where does it lie? What years? What administration? Who made the decisions that have led to some of the most incredible overexpenditure ever seen in any government contract in this country?

It is of utmost consequence, Mr. Chairman, that the wish of the government be made known, that this inquiry be retrospective as well as prospective. I was, very disturbed today when the hon. Attorney-General (Hon. Mr. Gardom) refused to give that assurance to this House. He read out terms of reference which might well allow that kind of retrospective inquiry, but then he said that it's up to the commissioners whether they did it or not.

Mr. Chairman, I say that as a director of that railroad, the minister can't settle for that. He has to see that the wish of the government is amply and adequately made known to the commissioners and to the public.

AN HON. MEMBER: Hear, hear!

MR. GIBSON: Retrospective investigation should be made. For greater certainty, it should be affixed and described in an amending order-in-council of those terms of reference, so that it is not discretionary but obligatory on the commissioners to look at that aspect. Alternately, if the minister should say we want this commission to be concerned with the future, then I want another commission to be concerned about the past, because somehow or other that has to be looked at.

Now the second section of that royal commission — and in fairness I think it has to be said, the most important, Mr. Chairman — is the time they will spend looking at the future. As they look at the future of the BCR, without question the most important immediate question is the future of the Dease Lake extension. I am rather inclined to call it the Dease Lake rat hole, because the money has been going down it at an appalling rate.

Would the minister, as a director who will have this information when he stands up in this debate, let us know just a few basic figures? We know what the basic estimate was to start with. That was $68 million, so we don't need that figure. But we do need to know what has been spent so far on that extension. We need to know what the current

[ Page 714 ]

estimate is to finish it. Those figures together are going to total something well in excess of $250 million. Then we need to know what the current revenue forecasts are along that line. Mr. Chairman, I am very concerned about possible future revenue for the Dease Lake line. There are mineral deposits up there. That is correct, but the line is not as well sited as it might be to pick up some of those mineral deposits. I believe that some of the potential producers up there have been doing a few studies that indicate to them that they'd be better to take their ore to tidewater by trucks, for goodness' sake, rather than use this new line. If that happens, what's going to happen to even the very superficial feasibility studies that were done for this railroad some years ago? What's the update on that? Surely this great new power-charged board of directors has a forecast as to what the revenue's going to be off the Dease Lake line.

Mr. Chairman, this is all critical now. We can't afford to wait another year for that information. Do you know how much we're pouring into British Columbia Railway? According to the Minister of Finance, in his budget statement, so far in this fiscal year it's $140 million borrowed for the BCR. In the coming fiscal year, he forecasts $203 million. You put that together and in two years you've got $150 for every man, woman and child in British Columbia that's gone into the British Columbia Railway, and what have we got back for it? I'll tell you what we've got back for it. We're got some miles of the Dease Lake extension built — miles on which we have no revenue forecast at the moment — and we've got some losses.

That leads me to my next question to the minister, a very simple question. What's the loss going to be for this year? What's the loss for the first 10 months? I'll settle for that because that's something the minister knows now.

MR. MACDONALD: Make a note of these questions.

MR. GIBSON: Oh, I'll ask him again, Mr. Member, if he doesn't answer.

MR. MACDONALD: He's not making a note of them.

MR. GIBSON: It's all right. I have a note of them and I'll ask them again if they somehow escape his attention.

What's the loss going to be? I suggest it's going to be well in excess of $50 million. I suggest the operating ratio of that railway is something worse than 140 per cent. Let me have the figures from the minister who knows them rather than causing members on this side of the House to guess about a line that is a tremendous financial burden on the taxpayers of British Columbia. We don't mind burdens if it's for some worthwhile purpose. But I want to know what the minister's plans are for this railway.

I want to raise another specific question on the railway. If he decides to continue the Dease Lake extension, I want to ask to what extent has he examined, and does he support, the Bear River Pass route. This is an excellent submission that was made to the cabinet when they were meeting — I think you were meeting in Terrace, was it, Mr. Minister? — by the mayor of Stewart. Now I haven't inquired for a couple of weeks, but the last time I asked they'd had no reply as to what the government thought of this submission. This is a submission that the town of Stewart paid for out of their meager resources and that are a little more meagre than usual because of the difficulties Granduc Mines Ltd., has been having and the tremendous reduction in the work force there. So this submission meant something to them, and I think they deserved the courtesy of a reply.

But quite beyond courtesy, Mr. Chairman, what are the merits of the submission? What it is, in essence, is a scheme to have an all–British Columbia Railway line from Prince George to the sea. By building through the Bear River Pass, you save the construction I think, of some 86 miles of line that would otherwise be built between the Nass River crossing and Terrace. I think you save that on a net basis — yes, because it's 124 miles in total — and you build an additional 44 miles on the Bear River Pass route. What you have in the end is a complete British Columbia Railway link from Prince George to the sea, Stewart being a very promising seaport. I just want to put into the record some of the conclusions of the consultant that was paid for by the hard-won resources of the town of Stewart.

First of all, he talks about the cost of that link. Going now from Stewart to the Nass River junction, he says: "There would be a net 44 miles for a total of $48 million. In addition, there would be the cost of approximately $2 million for the crossing of the Nass River, for a total of $50 million." Then he goes on to talk about the cost from the Nass River junction to Suskeena, which is on the Dease Lake line. He says: "The distance there is 100 miles, for which the cost would be approximately $110 million. The total cost then from Suskeena to Stewart would be $160 million at today's cost." This is a recent report.

Then he makes this comparison:

"For comparison, the cost of construction of the railroad connection from Suskeena to Terrace, for a total of 224 miles" — instead of 144 — "would be $246 million. This means an additional $86 million to connect the Dease Lake branch of the BCR through Terrace to Prince Rupert as compared to connecting it

[ Page 715 ]

with the viable deep-sea port of Stewart. The probably cost for connection of the BCR from Suskeena to Stewart would appear to be in the order of $86 million less than the cost of construction from Suskeena to Terrace. This is a major saving in construction costs that requires serious consideration."

Well, I would say that's putting it mildly, Mr. Chairman. I would like to know what consideration the BCR and the government has given that suggestion.

Then the consultant gets into the value of an additional port for northern development in our province. He says a little about the value of alternate routes because, I repeat again, this would be an alternate route from Prince George to the sea, and it would give the BCR some negotiating advantages with the CN and it would give shippers a little bit of competition along the route. Here is what the consultant says:

"The alternative of an all-BCR route to a viable deep-sea shipping terminal versus an all CNR route would provide a competitive situation which would certainly result in sharpening of pencils, and would be more likely to ensure that the coal development projects would proceed at an early date."

These are projects dear to the heart of the minister, I would remind you, Mr. Chairman.

"In this respect, it is only necessary to recall the difficult freight-rate negotiations experienced by Kaiser Resources Ltd. with the CPR and the beneficial effect on establishing conditions under which the project could go ahead resulting from the provincial government plans for a railroad connection south into the United States and then up to Roberts Bank."

You remember that, Mr. Chairman — a sad thing that that ever had to be considered in this province at all. The very thought of shipping southeastern British Columbia coal to market through a United States line is abhorrent to me, but you had that competitive situation there with the CPR monopoly. You've got the same thing in northern British Columbia. But you could have a different situation with the Bear River Pass line and a port at Stewart.

I'll just read this penultimate excerpt:

"An all-BCR route from both the northwestern region of B.C., and Prince George to the port of Stewart, would provide an effective tool for the provincial government to use in establishing policies and programmes for the development of these areas, and for the benefit of the people in these regions. Such policy potential would not be within control of the provincial government if the alternate through Terrace on the CNR to Prince Rupert were to be used."

It gives us better bargaining power, Mr. Chairman.

Finally, in terms of the costs to the port of Stewart, the consultant states:

"In terms of the port of Stewart's competitive position relative to the proposed coal terminal at Ridley Island near Prince Rupert, the development cost for handling 5 million to 10 million tons annually at Stewart would only be a fraction of the cost of the initial development at Ridley Island." I repeat: "a fraction of the cost," Mr. Chairman. So you would save money there, according to this report. You would save $86 million on your rail lines. Even this government has to be a little interested in $86 million. You might be in a better bargaining position, or you might not. I don't know. I'm not a railroad consultant. But this report was given to the minister back in September, and I want to know what study has been made of it and I want to know what conclusions he and his board and the officials of the railroad have arrived at.

Once again I want to get back to this question of current results because, you know, the minister was quoted last summer in the BCR magazine, which is called The Coupler, as saying: "The prospects for financial recovery are very bright." Are they really, Mr. Minister? What do you mean by "very bright"? Do you mean we are maybe going to lose only $40 million this year instead of $50 million or $60 million? I think we in this House deserve to know that.

I would like to know if there are any negotiations going on, or if any have been going on, with Ottawa or with the CNR in respect to the possible sale of the British Columbia Railway to the CNR.

Have there been any negotiations, formal or informal, on or off the record, with Ottawa or with CN headquarters in Montreal, or with local CN headquarters here, or with anybody on that general topic? Because we've heard rumours about this, Mr. Chairman. It's terribly important to British Columbia. We'd like to know whether there have been negotiations, and if there have been, under what terms and conditions they are talking. We just have to have this information, and this minister is extraordinarily reticent. Last year I called it the most important department of government.

AN HON. MEMBER: The nerve centre.

MR. GIBSON: They've got a lot of nerve. That's right — the nerve centre. Yet we can't get this information out of them. I'll be back at him asking where the coal report is when I talk later on that subject.

But in the meantime, Mr. Chairman, it seems to me that the BCR is not well. I am riot talking about the crew; I am not talking about that marvellous

[ Page 716 ]

communications system. But that railroad is not well, and that Dease Lake extension is not well. I am glad we have an inquiry but what took you so long to realize we need it? In the meantime, what are you going to do right now about those incredible amounts of money that the public of this province is being asked to pour into that Dease Lake extension? I'd like to hear some of the answers on those.

HON. MR. PHILLIPS: I'll endeavour to answer some of the.very positive questions asked by the member for North Vancouver–Capilano.

With regard to the lateness of the filing of the report, you do realize that we were in the throes of changing our president at that time. The report was evidently finalized about May, and I guess that I am probably responsible for not getting it into this House prior to the close of the session. I can't remember the exact circumstances surrounding it, but the report was prepared just prior to the close of the session last year.

MR. GIBSON: Will it be better this year?

HON. MR. PHILLIPS: Well, I would certainly hope so. As a matter of fact, we are making great progress on the Development Corporation.

With regard to loans and guarantees on the corporation, of course, it's very difficult to put much credibility into some statements made by the member for Vancouver Centre (Mr. Lauk), because the actual facts are that in 1974 there were 25 loans processed, in 1975 there were 85 loans processed and in the first nine months of 1976 there were 47 loans processed. That's a far cry from what I believe the member for Vancouver stated.

AN HON. MEMBER: Twenty a month!

HON. MR. PHILLIPS: Twenty a month. It's very difficult to put any credibility in anything that member says.

Now loans approved in 1974 were 12; loans approved in 1975 were 47; loans approved in the first nine months of 1976 are 33.

MR. GIBSON: Are these calendar years?

HON. MR. PHILLIPS: No, that's the fiscal year I am talking about. I am talking about the first nine months of the 1976-77 fiscal year.

The amount authorized in 1974 was $802,000; in 1975 it was $12,984,000; and in 1976-77 to date it is $5.5 million.

Present authorized loans distributed, and I presume that's for the first nine months of this year.... No, I had better check on that particular figure.

The current production of loans being processed is an average of 10 a month. The total guarantees: for 1975, one; for 1976, seven. The amount of the total guarantees in 1975 was $900,000; and in 1976 the total is $9,773,000.

The number of jobs created or projected in 1975 was approximately 300; in 1976, there have been 1,240.

With regard to the actual names of the persons or companies to whom the loans were made, Mr. Member, I questioned that same thing when I was in opposition. You have the right to question that in public accounts, and I suggest that that's where you do it. We have not listed in the past, nor do we intend to in the future, those applying for loans. It's private knowledge.

MR. GIBSON: Why not?

HON. MR. PHILLIPS: Well, I don't see the federal government making lists available.

Interjection.

HON. MR. PHILLIPS: It's a very sensitive matter. You asked me, and I have made a statement.

MS. R. BROWN (Vancouver-Burrard): We don't like your statement.

AN HON. MEMBER: Public accounts is a public meeting.

MR. LAUK: You're saying that this Legislature can't ask questions at the public accounts committee on this.

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

HON. MR. PHILLIPS: Now with regard to the Development Corporation handling industrial land, I want to point out to the member that that is mainly Crown corporation land. The purpose of it — and it's working very well — is to have one agency in government handle industrial land, the same as we now have the Department of Housing handling all the land available for housing so that you don't have a multiplicity of corporations and government bureaucracies involved in the same purpose.

One of the reasons that this decision was made is because one of the difficulties of establishing a business in this province is finding serviced industrial land. So we're moving forward to have the Development Corporation bring on stream land which is serviced and available so that industry can locate. I don't have to draw you a picture of the problems that industry is having to obtain land, in some instances,

[ Page 717 ]

in the province of British Columbia. What we're trying to do is streamline the process and make it easy for industry to locate here. In the analysis that we did of the economy and how we could attract manufacturers here, and how we could attract industry to the province, this was one of the areas of concern we found that stood out like a sore thumb.

You don't have to go too far, Mr. Chairman, to find instances where an industry wants to locate in a particular area and it takes them sometimes a year, sometimes two years, with a battery of accountants and a battery of lawyers to wade through all the red tape and government bureaucracy, part of it the responsibility of the provincial government, part of it the responsibility of the municipal government. You know exactly what I'm talking about. So what we're trying to do is streamline and make it easy for those wishing to locate here. That is one of the areas of concern.

As you may or may not be aware, through our planning committee of cabinet we've come to grips with the problem of planning bypasses and access to highways. We identified that and we identified many instances where commercial enterprises, manufacturing firms, were driven out of this province because of the bureaucracy that was created within out own civil service by the rules and regulations we had laid down.

I want to tell you, Mr. Chairman, that we have come to grips with that problem and we have made changes. We have published a book whereby a person wishing to have highway access now can have some guidelines instead of working for sometimes eight, nine months or a year repairing a subdivision plan and spending, in some cases, up to $100,000 in preparing a plan only to be turned down by the provincial government — which is fine — but with no reason. We've come to grips with that problem. It wasn't easy because we had to seek the cooperation of the Department of Highways, we had to seek the cooperation of the Department of Municipal Affairs....

MR. KING: Phil Gaglardi.

HON. MR. PHILLIPS: I want to tell you, one thing this government is doing that was not done by that socialist regime is that we have all departments of government working together in a united front. I know there are those on the opposite side who want us to wave the wand and automatically solve some of the problems they created, and create hundreds of thousands of jobs. They want us to put bubble gum on the problem. We're moving, Mr. Chairman. Maybe we're not moving swiftly as I would like to see us move, but I want to assure this House that we are moving steadily and solidly forward.

It will be interesting, Mr. Chairman, to read in some future year — and in the not too-distant future — about those over there who have no faith in the private enterprise system, who are not really recognizing the solid planning that is going on by this great government.

MR. KING: Government by inquisition.

HON. MR. PHILLIPS: Now with regard to the British Columbia Railway — there are some questions I will answer and there are some questions that will be answered by the judicial inquiry.

MR. MACDONALD: You voted against the BCDC. What's the matter with you?

HON. MR. PHILLIPS: With regard to questions that have to do with the current operation, yes, I'll be most happy to answer, because it will be in the annual report when it comes out very suddenly. But I'm not going to get into the area where we have a judicial inquiry, Mr. Chairman.

One of the great disappointments I know that the opposition must be having today is the fact that we have appointed a judicial inquiry into the entire operation of the British Columbia Railway. Prior to this appointment, being made the member for Vancouver Centre and the Leader of the Opposition were crying for a judicial inquiry. We've complied, because I want to tell you that we're also concerned about the operation of the British Columbia Railway. We're concerned where it's going, and this judicial inquiry, Mr. Chairman, will complement some of the work that is presently being done by that great new board of directors, and I want to pay a great deal of tribute to that board of directors today.

Since their appointment some few months ago, they have worked diligently, conscientiously and long hours on the British Columbia Railway. I want to say, as I've said in this House before, that the railway today is probably running as efficiently as it has ever run. It's serving the great industry of this province and allowing the workers of this province to work at their jobs, because the products, the creation of their labour, are being moved regularly every day by the British Columbia Railway. I have faith that that will continue through the years 1977 and 1978 and well into the future.

Now, Mr. Chairman, as to the member's request for actual operating loss to date, I'm trying to obtain that figure for you. I have the projected loss that I will give you at the same time. Here we are here, thank you very much. As of December 31, 1976, the net loss was $53,245,000 and that is an unaudited statement. And, Mr. Chairman, the projected loss for the year is in the vicinity of $69 million.

MR. KING: Way to fire! What a little

[ Page 718 ]

businessmen's government!

HON. MR. PHILLIPS: Mr. Chairman, as I say, I'm not going to be taunted into getting into a full debate on the railway's past, future and so forth.

MR. KING: I guess not.

HON. MR. PHILLIPS: But I want to say that there have been some areas identified by the new board of directors that have given us some concern. I hope that this royal commission on the operation of this railway, when it comes down, will serve as a guide, not only for this government, but for future governments, whoever they may be and whenever they may come in to serve the people of this province. I hope it will serve as a guide for them to see that that railway does serve its original intention — that is, to serve the province of British Columbia in the best manner possible.

[Mr. Schroeder in the chair.]

Mr. Chairman, the member was talking about the submission from Stewart. That submission only becomes functional if a line north of Terrace or Hazelton is built, and that line is not contemplated at the present time. The way I understand it, unless major new lines are built, it would not serve to move coal from Prince George to Prince Rupert because, as you know, that line is already built. It's probably one of the best grades in North America. It's part of the old Grand Trunk Pacific that was originally built to run silk from Prince Rupert through to Chicago. From railway people who have told me about it, I understand it is one of the best grades in North America. Now it has to be upgraded, but so far as the grade and the curvature are concerned, I understand it's one of the best. It's presently being upgraded — heavier steel bed — that portion has been going on for a couple of years.

With regard to negotiations on the coal deal, yes, we're doing cost studies and the CNR is doing cost studies. The BCR is doing cost studies. The Ministry of Transport is doing cost studies. We hope to have some definitive answers to some of our questions, hopefully, in a month or a month and a half.

MR. GIBSON: Concerning the sale of the CNR?

HON. MR. PHILLIPS: Concerning what?

MR. GIBSON: Concerning the sale of the BCR?

HON. MR. PHILLIPS: No, I didn't mention any sale to the CNR.

MR. GIBSON: Yes, but that was my question.

HON. MR. PHILLIPS: Oh. To my knowledge there's no negotiation going on about selling the BCR to the CNR. I thought you were asking questions with regard to rail rates for movement of coal.

Now, as you know, there was a study released in Alaska on Friday afternoon. I would suspect that in the very near future there will be a top-level meeting of probably Alaska, Canada and officials in the United States to study further where we should go from here with regard to that proposal. I think that when you're criticizing the extension of the British Columbia Railway north to Dease Lake and the proposal to go on up to Watson Lake, you must bear in mind the purpose of some of those decisions when they were made at that time.

Now I think I've answered most of the members' questions, and if I've left out any, I apologize and I'd be quite happy to answer them.

MR. GIBSON: I'll just be quite brief on a supplementary, Mr. Chairman. I think we should allow a little follow-up and certainly I'll be glad to allow you that when the time comes.

I thank the minister for the response that he gave to certain of my questions. I have to say on the question of the publication of the companies that get loans from the BCDC, I have to disagree with him. We can't properly judge the operation of that company without that information.

Why should they not be published, Mr. Chairman? It's not a crime to get a loan. It's not an indication of weakness to get a loan. It's an indication of strength to get a loan. It means you've got more money and it means you've got good credit. I can't see how, in any sense, any company would say: "Well, we'd better not approach BCDC because they're going to publish our name that they gave us a loan." That's information that this Legislature should have.

And, Mr. Chairman, other information this Legislature should have, though I still agree that perhaps this should come in camera, is a list of those who did not get loans. That could properly be in camera because if you don't get a loan then that is an indication of weakness; that is something that could be used against you in a commercial sense. So I would see every reason why that might be kept in camera. But the list of people who did make loans should be made public because it is public money — and we have to keep returning to this principle.

On the BCR, there were certain specific questions that the minister did ask and I'm saddened to hear those loss projections. There are other questions he didn't ask which I fear even more, and I hope he will answer them to clarify that. What has been spent on the Dease Lake extension to date? was one I asked. What is the projected total expenditure on the Dease Lake as of this time here? — because there is a lot yet to be spent, when we see the Minister of Finance

[ Page 719 ]

saying we have to borrow another $200 million over this coming year. And what is the current revenue forecast on that line? That's the one that bothers me. We've got to have that.

With respect to the Bear River Pass line I think there must be some misunderstanding of the minister. He probably doesn't have the map in front of him. But he mentions that you don't need that line from Suskeena down to Terrace. You don't need that line unless you're proposing to haul those materials to the sea, which would be the normal thing, unless you have that line you have to go an extra 300 miles back to Terrace. So that line, in effect, cuts off 600 miles.

But there's an alternative to that line which in total is 224 miles. And that alternative is by building from Suskeena to the Nass River junction, which is 100 miles and which is common to either route, and then building an additional 44 miles down to Stewart through the Bear River Pass rather than going the extra 124 miles down to Terrace. The advantage that is advanced for this is threefold. First of all, it would be cheaper by $86 million, according to the consultant. Secondly, it would be much cheaper as to a port facility. Thirdly, it would give the British Columbia Railway a wholly BCR-controlled outlet to the sea and would thereby both improve the negotiation position of the BCR with CN and, at the same time, give some competitive rates to shippers in northern and northeastern British Columbia. It is for those reasons that I think that this proposal must at least be studied carefully.

I would appreciate an assurance from the minister that his department or the railway or both are indeed studying it carefully and that within some reasonable time they will deliver themselves of an opinion on this, which is so tremendously important to the people of Stewart and to the people of British Columbia because it's their money.

I would ask those follow-up questions of the minister.

HON. MR. PHILLIPS: I think when we get into the area of the Dease Lake extension and the extension you're talking about, that's going to be very well covered by the royal commission, because it states very specifically "the relationship of the railway to the economic and social well-being of the province and, in particular, those parts of the province presently served or proposed to be served by the railway." We would like to know the answers to some of those questions as well. So I think they'll best be served, Mr. Member, by the royal commission.

MR. GIBSON: But in the meantime, aren't we putting in $10 million a month or so?

MR. LAUK: The hon. minister neatly sidestepped a number of questions and I'll ask them again.

One, he stated he had commitments for new coal sales to Japan. Could he state what they are?

Two, will he state why the board of directors settled the M.E.L. Paving case — which is not the subject of a judicial inquiry — against the advice of counsel, particularly after the filing of the letter of the Deputy Attorney-General?

Three, which stems from the question period: can he indicate to this committee whether or not he had any association, business or political, with any of the principals of Regan Construction Ltd. which is situated, as I am instructed, in his riding?

Perhaps he'll need some time; he can check that out. But I'd appreciate that he would answer during estimates or in question period.

The minister replied to my question about the number of loans. Well, his figures are quite wrong. I was talking about small loans out of the small-loans division of the British Columbia Development Corporation. Those are loans to the little businessman whom he said he wanted to protect. Those are the figures that he should have. If your chief executive officer doesn't have those figures, well, send him out to get them. The small-business division has fallen flat on its aplomb, Mr. Chairman. That's the point that has to be made. Those are questions that must be answered in this chamber. They certainly must be answered before we can possibly consider whatever amount the minister should get by way of salary.

While he is on his feet, the minister should answer these questions: having regard to his answer to the number-of-loans question, will the minister table the financial statements of the British Columbia Development Corporation for the six months ending September 30, 1977, which already have been presented to the board, together with a revised summary of loans presented to the board up to December 31, 1976?

Another question: is the minister making a note of these questions?

Interjection.

MR. LAUK: Well, we've got lots of time, Mr. Chairman. I'll just carry on.

The minister failed to answer questions with respect to the — number of coal sales that he made in Japan. He stated that he brought back commitments for the purchase of coal in Japan. My instructions are that he — almost lost what we had. Perhaps he could tell the committee what those new commitments are.

Can he tell the committee why the board of directors of the British Columbia Railways settled the M.E.L. Paving case against the advice of counsel, particularly having regard to the recent letter tabled in this House by the Deputy Attorney-General?

Will the minister re-check his facts with the small-loans division?

[ Page 720 ]

Will the minister table the financial statements of the British Columbia Development Corporation for the six months ending September 30, 1977, which have already been presented to the board? Will the minister table the revised summary of loans to December 31, 1976, which has been presented to the board?

Has the BCDC purchased the Canadian National Telecommunications installation and site in Dawson Creek, consisting of 9.8 acres plus eight buildings? Was this bought on behalf of the city of Dawson Creek? Is it not true that it was against the recommendation of his land branch in the British Columbia Development Corporation and other officials?

Is there a deal between the minister and the city of Dawson Creek? What was the deal? Who makes the profit on the resale of this land? Who makes. the profit? Does the BCDC sell the land at appreciated value ' to the city of Dawson Creek, or, as I'm instructed, does it sell to Dawson Creek at cost so that Dawson Creek can make a profit? How does that fulfil the goals under the statute of the British Columbia Development Corporation? Why is it in the minister's constituency that this unusual deal takes place? Did the British Columbia Development Corporation's staff recommend against it? Was it a private deal made between the minister and the civic government- that he took to the board and forced it upon them?

Has the British Columbia Development Corporation authorized a loan to Stothert Management Ltd. so that Stothert can build a pulp mill in Nigeria? If so, for how much? What is the total cost of the pulp mill in Nigeria? How many jobs does that get us here in British Columbia?

The minister isn't making notes, so I'll go back to the beginning. Could the minister indicate to this committee what specific coal commitments he has that he indicated to this House he achieved when he travelled to Japan? I'm instructed that he almost lost what we had. He says we have some. Maybe he can tell us what those commitments are.

Why did the board of directors of the British Columbia Railway settle the M.E.L. Paving case out of court against the advise of counsel, particularly in the light of the tabling of a letter of the Deputy Attorney-General stating that there was no civil fraud?

Will the minister check his facts on the small-loans division?

Will the minister table the financial statements of the British Columbia Development Corporation for the six months ending Septejnber 30, 1977, and a revised summary of loans made up to and including December 31, 1976, all of which has been presented to the board?

Has the BCDC purchased the Canadian National Telecommunications installation and site in Dawson Creek consisting of 9.8 acres plus eight buildings? Was this bought on behalf of the city of Dawson Creek? What was the deal? Was this not made in contravention of the advice and recommendation of adequate and competent staff of the BCDC? Is it not true that that land will be sold at cost to the city of Dawson Creek so that the city of Dawson Creek can speculate in land? How does that fulfil the goals of the Development Corporation, all of which takes place within the constituency of the minister?

The minister still isn't taking notes? Well, perhaps we'll give him an opportunity to reflect on some of those questions and still listen to the speech of my friend from Oak Bay (Mr. Wallace). I have other questions. You might as well answer those now.

MR. CHAIRMAN: Order, please.

MR. WALLACE: My first question is: why does the minister happen to be the first of many ministers to be dealing with his estimates in the House? It seems that there's some unreasonable haste to get the minister through his estimates, probably because of all the day-by-day unfolding of information which is most detrimental to the minister and his department. In all the years I've been in this House, and that's now eight, we have had estimates handled very much on an alphabetical basis starting with Agriculture.... Well, actually we used to start with the Premier, but I realize he's out of town. But beyond the Premier we always went through the estimates alphabetically, and it certainly went through my mind that this is a very unusual change of procedure for the government to put the Minister of Economic Development up first on the whole, series of estimates that we'll be debating.

I find a second puzzle. I understand the Premier is in Ottawa dealing on extremely vital matters with the federal government — exactly these vital matters for which this minister is responsible. Why is he not in Ottawa with the Premier? Very puzzling; maybe it isn't puzzling, Mr. Chairman, because now we find that more and more evidence is unfolding of the incredible mess and smell that surrounds some of the dealings of the British Columbia Railway, and this minister is on the board of that Crown corporation.

I find very puzzling the sequence of two other events: yesterday the Attorney-General (Hon. Mr. Gardom) tabled a letter affirming that, in his opinion, there was no evidence to indicate civil or criminal fraud regarding the M.E.L. Paving case and the day after we have the public inquiry announced. While I certainly wholeheartedly support the concept of a royal commission, I can't but help leave this question with the House: do we really think that we would have had a royal commission had in fact there been a different decision by the Attorney-General?

[ Page 721 ]

I am very grateful to the Chair for the very clear way in which, Mr. Chairman, you have pointed out that the announcement today of a royal commission need not in any way stifle some of the matters which this House should most correctly discuss during the estimates of this minister. The overall image of the B.C. Railway must surely be at its lowest ebb right here and now in the light of all the evidence that's been brought forth in public in the last few weeks and months. I think many people are asking themselves whether or not it is just the incredible bungling and mismanagement of BCR, in which this minister participates, or whether in fact it's just one great big con game with the contractors of British Columbia.

I won't go into detail, Mr. Chairman, on the documentation, which no doubt will go before the royal commission, but there is certainly the most complete kind of evidence which was tabled in the House by the former NDP government. It could only lead one to one of two conclusions: either the BCR was so incredibly incompetent and inept in reaching contracts with contractors it either, through sheer, incredible bungling, provided figures that bore no relationship to the facts, or worse, the railway knew very well that these figures bore no relationship to the truth and they nailed down contractors into contracts which they knew they could not possibly meet but which, at the same time, they could not get out of and where they would lose their performance bond and probably their shirt as well.

So the business practices of the B.C. Railway and the performance of the board of directors, of which this minister is a member, leave a great deal of suspicion in the mind of any individual who tries to view the evidence and take part in this debate on the responsibility or irresponsibility shown by this minister.

I want to talk for a moment about one of the specific areas in which this minister's credibility, if not his integrity, has to come under question. I am dealing specifically, Mr. Chairman, with the matter of Doug Regan Construction Ltd., which is one of the contractors who became embroiled in the ongoing construction of extensions of the B.C. Railway and who finished up with creditors asking for something on the order of $1.4 million.

I would like to quote from the Dawson Creek newspaper of August 18, 1976, where a meeting of the creditors was summoned by Larry Lewin, who is a lawyer in Dawson Creek and is the city solicitor representing many of the creditors. "Lewin, who stated that nearly every contractor who has worked for the BCR in the north has experienced financial difficulties...." He asked that Phillips intervene to get the BCR to put Regan back to work again, so that he could pay off his creditors. "Phillips stated he felt Lewin was an able salesman and could convince BCR officials, while maintaining that he had to hold his position of no political interference with Crown corporations."

Mr. Chairman, I happen to be one of the members of the House who is frequently accused of being naive. But in this particular involvement of this minister in this particular situation, one would have to be the most naive individual that God ever created not to see the enormous conflict of interest which is involved in this particular aspect of B.C. Railway affairs.

I just want to continue with the quote:

"Lewin pointed out the urgency of the situation since assured creditors were prepared to move in and force the sale of financed equipment which could force Regan Construction of Dawson Creek completely out of business."

This next phrase is very important, Mr. Chairman:

"Due to the depressed price of heavy equipment at the present time, returns could be expected to barely cover the amount owing to the finance company.

"Lewin went on: 'We have to have action within a week to forestall this. If the usual bureaucratic procedures are followed, the remedy will just be too late.'

"Lewin stated that he had asked the corporation to guarantee a bank loan" — this is the B.C. Railway corporation — "with money currently owing Regan by the railway, and this would enable Regan to pay off his creditors at 70 cents on the dollar, with the balance to be paid over an extended period. This would entail the railway backing a loan for over half a million dollars to Regan.

"Phillips stated that the matter had been discussed at a meeting of the board of directors of the railway, and the other two directors on the board had been of the opinion that there was no obligation to do anything on the matter.

"Pressing for action, Lewin contended. that other firms like Keen Construction had run into considerable difficulties because of the policies of the BCR. Mr. Lewin stated: 'The small businessman of the north should not be taxed by the failure of prime contractors of BCR.' He asked that Phillips and the board of directors study the policies of the BCR capital expansion department and see that these policies did not further harm the northern areas."

Mr. Chairman, I think out of that background one or two or three or four very reasonable and valid questions arise. I would hope the minister would answer them. Does he consider it quite correct and customary for a minister of the Crown to meet creditors who are seeking redress from a Crown corporation, where he is on the board of directors of

[ Page 722 ]

that Crown corporation and where, in this case, the creditors live in his own riding which he represents as an MLA? Is this the kind of avoidance of political interference that the minister is always talking about?

Later on in this debate I'll quote from a clipping where he said he was only going to be on the board of one of these other Crown corporations for 6 to 12 months — and I'm talking about the BCDC. The 12 months have long expired, and he's still on the board. So we have the minister frequently espousing the principle that there must not be political interference in Crown corporations. Yet in this case, the political interference appears to have been of the most blatant kind.

I would like to know if at any time in the discussions Regan Construction threatened legal action in the same manner that M.E.L. Paving not only threatened but took legal action and finally won their day out of court.

After the August meeting, I would like to know, or have the Minister tell the House, with what parties he discussed the creditors' request, particularly since the two other members of the board of directors felt that there was no obligation whatever for BCR to do anything in regard to Regan.

We now find from the minister's confirmation in question period today that the BCR has coughed up something in excess of $1 million. One has to ask the question: did the minister, the other member of the board of directors, feel differently from the two members who are quoted in the Peace River News?, Did he, in fact, persuade the other two directors that their opinion that they didn't have to take any action was wrong, and that, in fact, there should be a settlement?

What percentage of the outstanding total debt does the settlement that he confirmed in question period today represent? The minister confirmed that preferred creditors got 100 cents on their dollar and the unpreferred creditors received 50 cents. But what did it all add up to? What was the total sum of money that Regan Construction was due, and what percentage of that total sum was paid?

Another question that arises out of this Regan Construction situation is the purchase by the B.C. Railway of heavy equipment which is stated to have been worth $600,000. Can the minister tell the House if, in the course of discussion with the other members of the board, the purchase of this heavy equipment was part of the deal? Who suggested it? Was this another initiative by the minister to try and settle?

I would like to know the market value of the heavy equipment. Did, in fact, BCR seek some outside appraisal to determine what, in fact, they should pay for the heavy equipment and whether or not it was right to buy it in the first place?

I would like the minister to confirm whether or not the $600,000 figure placed on the heavy equipment is correct. Secondly, were there appraisals sought from objective, sources as to what that equipment was then worth on the market? If that wasn't the value, what was the appraised value?

I would also like to know what parties were involved in reaching the final settlement with Regan Construction. I would like to know, and I think this House should be told, if the minister, as a member of the board of directors, was consulted prior to the final settlement being offered the creditors. In case I don't make myself plain, I'd like to know if the minister was a party to the final discussion prior to making the offer to the creditors.

The final question, which surely has to be the obvious one: does the minister not consider that in the face of all these aspects of this Regan Construction issue...? Is it not surely clear to the minister that there is an incredible conflict of responsibility and interest involved in the minister being some kind of intermediary pleading the cause of creditors in his own riding? However the creditors came to find themselves in this position is beside the point. The Minister of Economic Development is frequently pleading for and espousing the idea that there must not be political interference in Crown corporations. Yet here we have the most blatant example of him trying to function an both sides of the fence at the same time by sitting down with creditors who were trying to make a deal with the very Crown corporation of which he is a director.

Now, Mr. Chairman, I just can't see how anyone could not come to the conclusion that the minister has compromised himself to an incredible degree by taking part in these discussions. Unless he can produce evidence to the contrary, on the face of it, at least two directors said there was no BCR obligation to settle with Regan Construction. We find that nevertheless, the final decision made was, indeed, to settle for the very substantial sum of around $1.2 million to $1.4 million.

Now there may be specific figures and facts that the minister can now give the House to put the whole matter out on the table. If I have misquoted, or if the minister can show that some of the information I've collected is inaccurate, then I'll be very ready to withdraw these statements that are shown to be inaccurate. But on the face of it, there is so much evidence to suggest that the minister was drawn into a situation where he — unavoidably, once he was drawn into it — compromised his position and his responsibility. Because his wider responsibility as a minister of the Crown is to British Columbia, not to specific creditors in his own riding. I can sympathize with how he must have felt, or how I would feel if I were in the same position and I were holding ministerial office when creditors in my riding came and asked for help. I would certainly be concerned and try to help. But I think the manner in which the

[ Page 723 ]

minister went about the proposition that was put to him has just incredibly demolished any credibility that he now has.

When, in conjunction with that situation, we have the pre-existing problem resulting from members of his very office — one of his closest assistants — creating the problem for him by making unwise investments in companies about which he had confidential information, one really has to, perhaps regrettably, suggest that this minister no longer retains enough credibility to remain in the very important post of Minister of Economic Development. I don't know. He's probably even created a first in the history of British Columbia politics. He's probably the first minister to have two judicial inquiries going on at the same time pertaining to matters that are very vital to the safe and responsible conduct of his ministry.

There are many other matters that I would like to raise later on, Mr. Chairman, but I think these questions deserve an answer. I still think that with the Premier in Ottawa, dealing with the federal government on such matters as coal development and the pros and cons of the Kitimat pipeline and a wide variety of other vital economic issues, it is most surprising that the Premier would not have the minister responsible for these important issues with him in Ottawa to take part in these discussions.

So just before I sit down, I wonder if I could repeat the key questions. First of all, does the minister have any information that would correct the picture that I've drawn of a minister who became involved in a conflict-of-interest situation and, in fact, persuaded the BCR board to settle with Regan Construction when they had already decided that they had no obligation to do so? Secondly, can I repeat the question as to whether the involvement of the minister as the first one to indulge in estimates debate has any relationship to the fact that it had already been decided to announce the royal commission, in the hope that this would diffuse the heat and the pressure on the minister? Before I ask other questions, Mr. Chairman, perhaps we could hear from the minister.

HON. MR. PHILLIPS: I can't really accept any great amount of — what shall I say? — great intrigue about the fact that my estimates are up first.

MR. KING: It's a new phenomenon to see you stuck for words.

HON. MR. PHILLIPS: Phenomenon? Well, okay. Thanks very much. With regard to the M.E.L. Paving case, I can understand the member trying to talk about conflict of interest and so forth. I want to tell you, Mr. Member, that those creditors were angry. I don't care whether they were in my constituency or in any constituency anywhere in the province. They were angry. I pointed out to them that they had a lawyer who was representing them and I stated that I would not interfere with the settlement. I think that's probably one of the reasons that it took so long to settle. It was the arguments between the lawyers, back and forth, as I said — counsel for the railway and counsel for the creditors. But I want to tell you, Mr. Member, that had you been in the same position — except maybe your constituency is much closer to the parliament buildings — you would have had to talk to those creditors sooner or later. If I hadn't attended that meeting and hadn't talked to them.... I realize that as a director — and I stated as a director — I will not influence a decision. But as I say, had they been in your riding, Mr. Member, they would have been on the lawns of the parliament buildings and rightly so.

I remember, Mr. Chairman, not too long ago there were a number of creditors for another Crown corporation — I don't know whether you'd call it a Crown corporation — one of your agricultural deals, and there were a number of creditors in a small town. This government said those small creditors would not suffer. Money was forwarded to that particular enterprise to pay them off.

MR. L. NICOLSON (Nelson-Creston): Name names!

HON. MR. PHILLIPS: There was another one not too long ago in the case of South Peace Dehy. I'm not going to get into the history of these enterprises which were started under the socialist regime, and I'm not going to propose to say anything more about the intrigue that's being entwined around the M.E.L. case, but I want to tell you, Mr. Chairman, and I'll tell the members of this House that anybody who talks about the character of Mr. Jack Fraine is travelling on very, very thin ice. He's a man respected in this province, a man of outstanding character, honour and ability in the railway field.

MR. WALLACE: Who mentioned him?

HON. MR. PHILLIPS: I would suggest that the letter from the chairman of the board, Mr. Frame, tabled in this House, with the reasons outlined, would maybe not satisfy those members who wish to wallow in the gutter, but for clear-thinking people....

I want to tell you further, Mr. Chairman, that when the railway was probably at its darkest hour....

MR. WALLACE: It is right now.

HON. MR. PHILLIPS: No, it isn't right now.

[ Page 724 ]

MR. WALLACE: Yes, it is!

HON. MR. PHILLIPS: That railway is running under that board of directors and decisions are being made; it is probably better run now than it has been for a long number of years. That's what bothers the opposition — the fact that that railway is running.

MR. KING: Sixty million dollars! Shocking!

MR. LAUK: Sixty million? It was $70 million. Shocking!

HON. MR. PHILLIPS: I want to tell you, Mr. Chairman, we took over a few problems. I'm not going to talk about the past, and the political interference, and all of the directors, and the political pushing around of the railway. I'm not going to talk about that, but I do want to say that in the darkest hour of that railway...

MR. COCKE: Now.

AN HON. MEMBER: Today.

HON. MR. PHILLIPS: ...Mr. Jack Fraine came forward with experience and integrity and reliability, and is serving the people of this province, serving the railway.

MR. LAUK: Was his letter right?

HON. MR. PHILLIPS: Now, Mr. Chairman, with regard to...

MR. LAUK: Did you accept his letter?

HON. MR. PHILLIPS: ...the questions of the amounts of money, those are being obtained, Mr. Member, and as soon as I have them I'll give them to you.

MR. LAUK: Mr. Chairman, it's very nice for him to give an encomium to Mr. Fraine. Not only did the hon. minister leave, but he made such a gesture that leaves me speechless. I've never seen anything like that in my life in this chamber. And there's another one across the way.

Interjections.

MR. LAUK: I couldn't believe it!

MR. WALLACE: It's the Rockefeller sign.

MR. LAUK: Mr. Chairman, I don't see how there's any point in going on when the minister's absent from the chamber, so I move that the committee rise, report progress and ask leave to sit again.

Motion negatived on the following division:

YEAS — 20

NAYS — 28

Mr. Barrett requests that leave be granted to record the division in the Journals of the House.

MR. LAUK: Mr. Chairman, when the minister left I was about to ask him about his magnificent unnecessary defence for Mr. Fraine. It's not Mr. Fraine whom I'm attacking; it's not the chairman of the board whom I'm attacking. I am critical of this minister. Don't sidestep the issue! This minister is so frightened and inept, he's hiding behind two judicial inquiries, three in-house inquiries. (Laughter.) He's hiding behind chairmen, policemen, Attorney-Generals, aprons, his desk.

MR. BARRETT: How much havoc has this one guy wrought?

MR. LAUK: And every time I stand up in the House he runs out into the hall.

MR. BARRETT: Shame!

MR. LAUK: Well, not every time, but I'm sure he'd like to.

Mr. Fraine sent a letter at the request of the government to justify the political out-of-court settlement in the M.E.L. Paving case. Mr. Fraine is the chairman of the board and maybe he believes what he put in the letter. I'm not suggesting that he doesn't. It was a well-written letter, but it flatly contradicted the advice of counsel and the letter tabled the other day

[ Page 725 ]

by the Deputy Attorney-General.

So don't stand up and say: "Oh, that's terrible that the opposition is wallowing in the gutter, and we shouldn't answer those questions." You are a Crown minister; you're responsible for those Crown corporations that are under your administration, and you must answer the questions, however long it takes. The people of British Columbia will be satisfied, and they want the truth. Why was the settlement made in M.E.L. Paving on Christmas Eve, 1976, when it was apparently against the advice of legal counsel and against the weight of the evidence as indicated by the Deputy Attorney-General?

Can the minister indicate to this House what specific contracts he obtained or what commitments he obtained in Japan with respect to the purchase of British Columbia coal by Japanese users, as he indicated in his opening address in these estimates? If he made a slip of the tongue, if there are no commitments for new purchases and now contracts to purchase our coal, for heaven's sake get up and say so. Just get up and say so. Mr. Chairman, the minister just has to get up and say: "Look, I've got so little to brag about these days that I'd thought I'd throw that in and try to get it past the opposition." Admit it! There are no new contracts, Mr. Chairman; we're barely hanging on to the ones we have.

Will the minister table the financial statements of the British Columbia Development Corporation for six months ending September 30, 1977? The Minister of Finance (Hon. Mr. Wolfe), with great glee, has been going around this province saying that he files quarterly reports. Well, the financial statements for the corporation were presented to the board some months ago. They're available to the minister; he's a member of the board. Table them! The revised summary of loans for the Development Corporation has been available to the board for some weeks and available to that minister. Why doesn't he table them?

Can he confirm whether the Development Corporation has purchased the Canadian National Telecommunications installation and site in Dawson Creek, consisting of 9.8 acres plus eight buildings? Can he do that?

MR. LEA: Did he hear that one?

MR. LAUK: Oh, he's heard it four times. He's avoiding it. You see, this is a site, Mr. Chairman, in Dawson Creek. It is not suitable for industrial development. It was purchased, I am instructed, by the Development Corporation so that the corporation can sell it at cost to the city of Dawson Creek who hasn't got the money right now. That land can be parceled out and sold out at great profit to the city, which is in the minister's constituency, Mr. Chairman.

MR. C. D'ARCY (Rossland-Trail): He wouldn't do that; there'd be no jobs.

MR. LAUK: I wonder why. No jobs at all; no industrial development to speak of; no report on industrial development. It was a deal, and it was against the advice of the experts in the Development Corporation.

MR. BARRETT: How many weeks ago was it done?

MR. LAUK: I don't know whether it's "weeks" that we have to worry about in this case.

I want to know whether that's true. What's the deal? Has the BCDC authorized a loan to Stothert Management?

Mr. Chairman, I'll wait for the minister's attention. Can the minister confirm to the committee: did the BCDC make a loan to Stothert Management'so that Stothert Management can use taxpayers' money to build a pulp mill in Nigeria? Can the minister confirm that? Why would they loan money to Stothert Management to build a pulp mill in Nigeria?

MR. LEA: To create jobs.

MR. LAUK: Yes, to create jobs. Three hundred Nigerians are being supported by the taxpayers of this province. Beautiful! Another coup for the minister from Dawson Creek.

AN HON. MEMBER: A military dictatorship.

HON. MR. PHILLIPS: Mr. Chairman, it's almost embarrassing to answer that member's questions. Now with regard to the spider web he's trying to weave around Dawson Creek, no, the land was not purchased by the British Columbia Development Corporation.

MR. LAUK: Was it considered?

HON. MR. PHILLIPS: With regard to the pulp mill in Nigeria, I understand that Stothert Management wanted a $6 million loan guarantee for a loan needed to post a performance bond with the Nigerian government in order to obtain a five-year management contract to operate a kraft pulp mill financed partially by the Federal Export Development Corporation, The board of directors felt they should not support the jobs in a foreign country, so it was sent down to Ottawa.

MR. KING: Do you have any reciprocal agreements with Ian Smith?

MR. LAUK: Did the minister consider, when he was a member of a board, actually proposing that the

[ Page 726 ]

BCDC buy the Canadian National Telecommunications installation and site at Dawson Creek consisting of 9.8 acres plus eight buildings? Was it considered by the board?

HON. MR. PHILLIPS: The Development Corporation, of course, as I said, is interested in having land available and assisting communities everywhere in the province of British Columbia, whether it's assisting Merritt or Lillooet to obtain land to build a prison on or whether it's land in Ashcroft, whether it's land in Surrey, whether it's land in Prince Rupert — which, Mr. Chairman, I would never mention in here. But land in Prince Rupert was purchased by that Development Corporation, I understand, because the previous Minister of Lands, Forests and Water Resources at one time said there was going to be great development in the northwestern part of the province, Mr. Chairman.

MR. LEA: There was.

MR. BARRETT: You sure blew that!

HON. MR. PHILLIPS: I understand that, you know, he went up there and he built up great expectations in Omineca and the Skeena riding and the Prince Rupert riding.

MR. R.E. SKELLY (Alberni): Yes, he even built Babine Forest Products.

HON. MR. PHILLIPS: And the Development Corporation moved ahead in Prince Rupert.

MR. LAUK: How about answering the question?

HON. MR. PHILLIPS: However, as I say, the Development Corporation is considering assisting municipalities everywhere in the province. They didn't buy any in Dawson Creek. But there may be a time when development of that area goes ahead, Mr. Chairman, that it may be reasonable for the Development Corporation to go in and assist the municipality of not only Dawson Creek but maybe Chetwynd, Prince George, Terrace — wherever development takes place. And I'm sure there will be great development taking place in many communities in this province, Mr. Chairman, where the Development Corporation can go in and assist, get land prepared, assist them in financing for putting in the services to make it easy for industry and jobs in this great province of ours.

MR. BARRETT: Why did you vote against the BCDC?

MR. LAUK: Did the board of the BCDC pass the minutes...?

Interjections.

MR. CHAIRMAN: I'm sorry, hon. member, perhaps some of your own colleagues are interrupting you.

MR. LAUK: You're quite correct, Mr. Chairman. I just sent him out of the chamber.

Mr. Chairman, did the board pass a minute approving the purchase of the Canadian National installation site at Dawson Creek for 9.8 acres plus eight buildings for the sum of — or not to exceed the sum of — $300,000?

MR. CHAIRMAN: Shall vote 79 pass?

MR. LAUK: Did the minister, while he was a member of the board, vote unanimously with the board and pass a minute approving the purchase of the 9.8 acres in question for the sum of $300,000? Good heavens! Are you saying that the minister can't hear that?

MR. NICOLSON: In his own riding. Or has he forgotten where Dawson Creek is?

MR. LAUK: Let's talk about Stothert Management for a moment. He's embarrassed at my questions; I'm embarrassed at his answers. We'll be here for a long time. Could the minister table the report with respect to the Stothert Management request for $6 million that he received from the BCDC turning down the loan, as he says it was turned down? Would he table that report in the House?

Interjections.

MR. LAUK: No? He won't do it, eh? Well, did the minister vote "aye" when the proposition was put that they should buy 9.8 acres in Dawson Creek, which is absolutely useless for industrial development? It was just simply a land speculation with your pals on the city council? Come clean!

SOME HON. MEMBERS: He can't remember.

MR. LAUK: The president and chief executive officer of the BCDC is here. Take a moment and ask!

Interjection.

MR. LAUK: Oh, can you remember now?

HON. MR. PHILLIPS: Mr. Chairman, I just would like to inform the member that, hopefully, I have pals

[ Page 727 ]

and friends on all the municipal councils all through the province of British Columbia, because we're going to work with them, not against them. I'm given to understand that what the member is trying to talk about....

As I said before, the British Columbia Development Corporation will assist any community. But evidently I was not present at that meeting in November when the discussion of the Dawson Creek property took place.

MR. LAUK: Wrong! It happened in October. Would you like to refer to your notes again?

HON. MR. PHILLIPS: I guess I'd better.

MR. LAUK: Well, seeing you weren't there, could you ask somebody who was? He's sitting at the back wall over there. He's so anxious to tell you, he's almost embarrassed himself.

HON. MR. PHILLIPS: We'll go back over the minutes.

MR. LAUK: Will you?

HON. MR. PHILLIPS: Oh, sure.

MR. LAUK: Shall I send you over a copy? Which day would you like? (Laughter.)

MR. KING: Well, Mr. Chairman, the minister doesn't seem too anxious to level with the House and answer the questions that have been put to him. But perhaps if I raise a few points on the B.C. Railway, he'll have an opportunity to reflect on the questions put to him by my colleague from Vancouver Centre. Hopefully, he will become more voluble in his customary style and start giving this House information.

Mr. Chairman, the B.C. Railway was a property that was in a deplorable condition when our government came to office in 1972, I think it might be worthwhile to refer to some of the circumstances that obtained in the railway at that time. I would categorize it as a nightmare of inefficiency at that time in terms of the safety of the trackage, in terms of the safety standards relating to much of the operation of the railway, and certainly in terms of the working conditions which were in place at the time and under which employees were obliged to earn their living with the railway. Of course, from that kind of situation grows industrial unrest, instability and the lack of continuity of operation on the railway.

Mr. Chairman, I have no intention of casting any reflection on any of the operating people or the officers of the railway, and certainly not Mr. Fraine, whom I know personally and whose work with CP Rail I know of. He is on the board now but he had nothing to do with the development of B.C. Rail and the operating practices and so on that were in place.

I might go further than the minister and say that the operating vice-president of the railway, Mr. Norris, who is in the chamber at the moment, is a competent railroader, having been trained, as I was, with CP Rail, although he was somewhat junior to me on the seniority list, I believe.

In any event, Mr. Chairman, I certainly think progress was being made under Mr. Norris, stewardship in coming to grips with some of the basic flaws in that railway. I want to tell you about some of the things that were wrong with the railway, particularly as it pertains, first of all, to the M.E.L. Paving situation.

Mr. Chairman, the Dease Lake extension was undertaken without adequate and proper engineering preparation. There were certainly other flaws in the decision to proceed with the Dease Lake extension relating to inadequate environmental impact studies and the lack of proper planning, both with respect to environmental matters and certainly with respect to inadequate engineering procedures, that have ultimately resulted in the loss of millions and millions of dollars of the taxpayers' money in this province because of incompetence and inefficiency, mainly on the part of the previous Social Credit administration.

I want to quote from a letter, Mr. Chairman, directed to the vice-president and general manager of B.C. Rail on December 10, 1973, just a very short time after our administration was in office. It is directed to Mr. Norris from my former colleague, Jack Radford, the Minister of Recreation and Conservation in that administration. I am just going to quote the first paragraph because it is the part that is relevant:

"Dear Mr. Norris:

"As you are aware, no environmental impact planning went into the route location of the B.C. Railway Dease Lake extension. Largely because of this, some serious environmental problems have been encountered by my department and the federal Fisheries Service during construction of this line."

Quoting the letter again farther down, a demand is made upon B.C. Rail for funding of $2,500 per month to fill the gap in that lack of environmental planning that had been incident in the decision to extend the Dease Lake line. Now that's one area, Mr. Chairman, that shows that the former Social Credit government made a political decision to proceed with the Dease Lake extension on the eve of a provincial election, without adequate time or attention being paid to either environmental planning or to the incursion of that rail route on native Indian land claims, and as I say, certainly without adequate and

[ Page 728 ]

detailed engineering analysis that would have allowed proper bids and tenders to be awarded.

The M.E.L. Paving case, of course, has been the subject of great controversy throughout the province for the past month. Up until that point, while it was in court, no one seemed too interested. Certainly not many of the major daily newspapers reported on it. But the gist of it is that on the eve of that case being ruled upon in court, the board of directors of B.C. Rail made a decision to settle out of court for more millions of dollars of the taxpayers' money, and I certainly wonder why. I wonder what the justification was. I want to assure the minister, Mr. Chairman, that I have read the letter from Mr. Jack Fraine, to which he referred and which was tabled in this House. The letter was dated January 17. There are some curious statements in that letter signed by Mr. Fraine.

Mr. Fraine indicates that counsel for the railway.... I am quoting from page 5 of that letter, the second last paragraph:

"The position of the BCR in relation to the other items totalling some $2,200,000 was, in the opinion of counsel, much stronger, although, in view of the conflict in the expert testimony, there was evidence which would justify an award of additional sums to the contractor."

And on page 6, I quote again:

"Counsel gave his opinion that it was unlikely, on the evidence, that the counter-claim would succeed."

That is the claim of the railway for count er-dam ages. Finally, in the last paragraph on page 6:

"The board, therefore, instructed counsel to take up settlement negotiations with counsel for the contractor."

Now, Mr. Chairman, we have read accounts in the paper where the BCR's chief counsel for the M.E.L. Paving case, Mr. Charles Maclean, has stated publicly that he had no knowledge that negotiations were underway for an out-of-court settlement. Mr. Charles Maclean, the chief counsel for the BCR, still adheres to his basic position that, indeed, there was a good chance of winning the suit. So I have to conclude, Mr. Chairman, that there is conflict. There is conflict, and great conflict, between the statements made by Mr. Fraine in his letter, which was tabled in this House, and the public statements made by the chief counsel for BCR, Mr. Charles Maclean. We are talking about $2.5 million of the taxpayers' money that was used to settle out of court. I think that the minister, as a director of the B.C. Railway, has an obligation to advise this House whom Mr. Fraine is talking about when he says that counsel was instructed to take up settlement negotiations with counsel for the contractor. Whom was he talking about? Of the taxpayers' money, $2.5 million was expended on the basis of that instruction. But the chief counsel, paid out of the taxpayers' money and holding to the public position that he had a chance of winning the case, said he was completely unaware that any negotiations were taking place.

Mr. Chairman, this is a conflict surrounding, as I say, the expenditure of $2.5 million of the taxpayers' money, and I think we're entitled to some answers from the minister with respect to that very serious conflict.

Mr. Chairman, I think the minister has an obligation also to answer some other points regarding the railway. He has indicated publicly from time to time over the past few weeks — and in fact he's been joined by some of the media people — that the New Democratic Party administration, when we were in office, should in fact have settled out of court also. Well, the statements still held to by the chief counsel, Mr. Charles Maclean, certainly do not indicate that. I want to quote from a letter, Mr. Chairman, directed on November 29, 1974, to the Deputy Attorney-General, David Vickers, over the signature of George T. Hanrahan, who was at that time general counsel for the British Columbia Railway.

He states: "Dear Sir: Re BCR v. M.E.L. Paving Ltd. and M.E.L. Paving Ltd. v. BCR." That was the counter suit. "Relative to the captionally noted matters I attach herewith the following documents, " and he lists the summonses and so on that have been filed. He concludes by saying: "These documents are being forwarded to you in order that you may be kept fully informed of developments as per my instructions from Mr. M.C. Norris and the Minister of Labour." At that time I was the Minister of Labour and a director of the railway.

I simply quote this letter, Mr. Chairman, to illustrate that not only were counsel for the railway and chief counsel for the suit brought by M.E.L. Paving in possession of the facts and advising our government, but we were keeping apprised of developments and providing all documents to the Attorney-General's department. I find it a bit curious, Mr. Chairman, that the Deputy Attorney-General should at this point be asked to conduct an in-house inquiry when, of course, he has been apprised all along and apparently agreed with the position that no out-of-court settlement should take place because there was sufficient evidence, and sufficient advice by our chief counsel, to protect the government's interest and B.C. Rail's interest in terms of the suit brought by M.E.L. Paving.

Why then? What can we conclude from this? What was the reason for the out-of-court settlement? Mr. Chairman, I don't know what it was, except perhaps to cover up gross incompetence on the part of friends of the current coalition administration, whether it was to cover up gross inefficiency and incompetence by former directors, be they blood relations or

[ Page 729 ]

political relations of the present government. I can only conclude that that was the inducement which would prompt this government to spend $2.5 million of the taxpayers' money to settle out of court and award to a contractor contrary to the advice of their chief legal counsel. I say that's shocking and scandalous, Mr. Chairman — absolutely shocking and scandalous.

As my colleague from Vancouver Centre (Mr. Lauk) has demonstrated to this House, once that precedent was set people were lining up around the block waiting to come in and make claims upon B.C. Rail for any contract that had been completed over the last few years with that corporation. That appears to be true, because we read today about yet millions more of the taxpayers' dollars that are put out to satisfy apparently somewhat belated claims of other contractors.

Mr. Chairman, I would like to hear from the minister what he's doing about some of the inherent problems that the British Columbia Railway faces. He talks about the competence of the new board, and I say fine. I certainly have nothing against any of the board members. But I want to tell you that when our administration took over in 1972, we were facing very, very severe problems — some that we did come to grips with and resolved.

We caused an investigation to be made into the operating rules of the British Columbia Railway because of the high incidence of wrecks and accidents on that property. The director, Mr. Bob Swanson, who is still a director of that corporation and a professional engineer, is a director who knows something about the gradient, about the stability of the right-of-way, about the adequateness of the weight of steel in terms of accommodating the new heavier locomotives and cars that are utilized on the railway. He was appointed by the board to conduct and commission inquiries into those areas pertaining to the physical characteristics of the railway and also the rules and safety arrangements. Quite frankly, Mr. Chairman, these inquiries were conducted and many of the practices that were underway at that time were found wanting.

Again, I want to indicate to you this is certainly no slight to the current management of B.C. Rail. I think that the current operating vice-president was fully in accord and fully aware that many of these changes had to be made. Certainly, it's no slight on his competence because he had only at that time assumed the vice-presidency of the railway.

But we found some very serious problems. I want to quote a letter from Mr. Swanson, the director, to the chief of transportation of CP Rail, dated August 27, 1973. It states in the first paragraph:

"Recently we have had cause for apprehension with respect to rules and their application on our railway, and the board of directors, in their deliberations, have suggested that we approach CP Rail with the request that Mr. E.J. Bradley, system supervisor of CP Rail, be made available to us to conduct a study on the B.C. Railway and submit his recommendations in the form of a report to the board of directors."

Now, Mr. Chairman, that indicated the board's apprehension regarding the standard of safety under the uniform code of operating rules.

Again, a letter on August 29, 1973, to Mr. Beaton of railway transport committee, and it reads: "The board of directors of British Columbia Railway wishes to have an independent survey conducted and a report submitted on the physical condition of the railway." And it goes on to outline the terms and conditions.

Now that demonstrates very clearly that in 1972, Mr. Chairman, neither the operating rules of the B.C. Railway nor the physical plant were safe and adequate in terms of meeting this province's needs. We did come to grips with those problems and we did improve the efficiency and the safety on that railway to a great extent.

Around that time a report was received into the failure of the Blueberry River Bridge. I think I should read to the House some of the statements and conclusions contained in that report to give some indication about the lack of attention paid by the former board of directors to the safety of the railway, to the adequacy of inspection services and so on. It was printed, I believe, in February of 1973; it was, I believe, tabled in the House. The conclusions into the failure of that bridge, Mr. Chairman, I'll read out briefly.

"(1) Damage to the bridge was the result of failure of the south approach fill. The bridge did not itself contribute to the failure in any way.

"(2) The fill failed due to progressive weakening of the clays of which it was constructed. Water penetrated the fill after its construction in 1969, and the clays became progressively weaker as their moisture content increased. Finally they failed."

Well, Mr. Chairman, that indicates two things. It indicates, again, inadequate engineering in terms of construction of a bridge that was essential to the operation of the railway, and certainly fundamental to the safety of the travelling public and the employees.

Without going into all of the recommendations, I'll finish with the last one, No. 5. The finding was that "working conditions at the site were unquestionably primitive by the best modern standards for camp accommodation and amenities. Nevertheless, they conformed to the railway's standard practice." "Unquestionably primitive," Mr. Chairman. And this

[ Page 730 ]

minister has the gall to get up and question the efficiency and the headway that was made under our government. Now obviously we inherited something that was run down, something that was being run by political whim from a board of directors that was mainly political in that day. It's obvious from the reports, from the improved standards introduced as a result of the rules investigation, the physical plant investigation and so on, that great headway was made in improving and standardizing the railway operation in the short three years that the New Democratic Party was in government.

I think the minister should tell this House whether or not the new board is continuing to upgrade the railway. I think he should answer with respect specifically to the questions that have been posed regarding the Dease Lake extension, the conflict between the advice given to the board by their chief counsel and the board's apparently political decision, taken in conflict with their chief counsel's advice, to settle out of court.

As I say, Mr. Chairman, that not only compromised taxpayers' dollars with respect to that particular contract but, as has been so amply demonstrated today, it's further jeopardized the railway and consequently the taxpayers' dollars by setting a precedent by which virtually every construction company having done business with that rail line in recent years can now come back and file further claim. This is a serious matter. It should not be swept under the rug; it should not be whitewashed. Certainly we as the official opposition in this House have an obligation and a duty to demand from the minister that he answer and provide some rational basis, some justification for that peculiar out-of-court settlement.

Mr. Chairman, I have further questions to ask the minister — quite a number of them, as a matter of fact — but I will give him a chance to answer at this time because the previous member asked some questions and I know he's had time to reflect on them. I've posed not too many, but certainly very serious ones, that I very sincerely request answers to. So I'll give the minister a chance to respond at this point.

HON. MR. PHILLIPS: In answer to the member's inquiry, we went through the BCR debate about safety and whether it was built as a resource railway, who made the decision to upgrade it to a mainline, how many new yards of cubic feet did the upgrading increase the contract — we went through that. We spent months in this House when I was sitting on that side of the House, and I'm certainly not going to usurp the responsibility of the royal commission...

MR. LEA: Just tell us how many yards of fill were used!

HON. MR. PHILLIPS: ...that we have appointed today to go through that performance again. I don't think it would serve the public interest or the interests of this House, because if anyone wishes to read that argument, as I say, Mr. Chairman, through you to the member, it's all very well documented in Hansard. I'd like nothing more than to get into a real tough debate with you, and you wouldn't listen as you haven't listened in the past. I will state again, however, that the M.E.L. Paving case was settled by the board of directors. I know, Mr. Chairman, that the members do not wish to listen to the facts and the reasons, the very logical reasons for that settlement, which were contained in a letter which was tabled in this House.

Mr. Chairman, I might take this opportunity to point out to the members of the House just a few of the great, long-range programmes that the Ministry of Economic Development, in cooperation with all of the other ministries of this government, the long-range planning that we are engrossed in to see that the economy of British Columbia once again gets on the move and to see that British Columbia once again is restored to its rightful role as economic leader of all the provinces in Canada.

Now, Mr. Chairman, there has been some mention made of the General Agreement on Tariffs and Trade, and I want to tell you that, under this government, this is the first full-time committee we have working on that. The implications....

Interjection.

HON. MR. PHILLIPS: Oh, Mr. Chairman, the ex-minister of Economic Development would lead some of the House to believe that they did that. But they couldn't get it through Treasury Board, Mr. Chairman, so it was never set up. However, we have, and it has, as has been stated by other members in this House, very definite long-term benefits to the province of British Columbia — and at the same time has some down-sides. That is why we have to do this long-range planning and that is why we are trying to monitor the Tokyo round of tariffs and trade agreements so that we can know what is going on, so that we can make plans for the non-tariff measures here in our own province so that we can advise Ottawa. Mr. Chairman, I want to tell you now that for the first time in many, many years, the province of British Columbia...

MR. KING: Has 112,000 unemployed.

HON. MR. PHILLIPS: ...is negotiating with the federal government, negotiating on many fronts. Mr. Chairman, I want to advise the House that gone are the days of the buffoonery and the clown prince. Our Premier goes to Ottawa. He negotiates as a member of

[ Page 731 ]

Confederation like it should be. We are working solidly and steadily to improve our market penetration abroad. I, like other members of this House, could have used more money in our budget this year, but I want to tell you that one of the ways we have restored confidence to this great province of ours is because the Minister of Finance has brought fiscal responsibility back in the management of the affairs of this province. In analyzing the economy of this province, Mr. Chairman, I want you to know that one of the greatest challenges that this government faced in getting the economy of this province moving once again was to restore to the province of British Columbia sensible management of the affairs of the province so that the investment world would know....

MR. LAUK: Is that why you hired Arthur?

HON. MR. PHILLIPS: ...that we were not going to run the province into debt that they would eventually have to pay for when they become established in the province.

Mr. Chairman, these are not the bubble-gum types of programmes that the opposition would like to see us put in. They would like to see us shovel out money to solve the immediate problems. But our plans go for the years ahead so that there will be profits made by corporations in order that we can tax those profits. I want to tell you, Mr. Chairman, that I don't know of any government anywhere that has been able to tax the losses of businesses, but I can tell you there are many governments who are able to tax the profits of businesses. Profit will no longer be a dirty word in Canada, or indeed in the province of British Columbia.

AN HON. MEMBER: This man's an economic genius!

HON. MR. PHILLIPS: Mr. Chairman, the depression we have in this province today can be cured by profits of the industries in this province. We are working in tandem with many agreements in Ottawa. Maybe these agreements should have been ironed out and finalized, but the programmes that we are working on are long-range programmes.

MR. LEA: What are they — long-term or short?

HON. MR. PHILLIPS: I am sure, Mr. Chairman, that when these are finalized the members opposite.... Well, they won't apologize, and I don't expect them to. (Laughter.)

MR. LEA: Long-term or short?

HON. MR. PHILLIPS: They're good programmes, and they're well thought out. We're negotiating, as I say, with Ottawa.

MR. LEA: What are they?

HON. MR. PHILLIPS: Mr. Chairman, here are just a few of the programmes that just sort of slip by without any mention in this House. There's that great Minister of Highways (Hon. Mr. Fraser) who is once again building a highway system in this province to serve the citizens of this province, to serve the great tourist industry of this province and to serve industry in this province.

You know, they talk about jobs and creation of jobs. Prior to 1972, we had a highway link which would have linked the province of British Columbia, the jobs in British Columbia and the industry in British Columbia with that great and ever-rich Mackenzie delta. So when the construction of that great gas pipeline takes place and literally billions of dollars are invested in that area, the province of British Columbia, the industry in British Columbia and jobs in British Columbia would have been able to take part, as their rightful place in Canadian Confederation, in that great development in the Mackenzie delta and that great gas pipeline.

Mr. Chairman, when that opposition was in government, one of the first moves they made was to immediately stop construction of that land link to the Mackenzie delta. Had that land link gone forward, we might have been able to drive today — it would have depended a lot on the construction season — and there would have been additional jobs in the province of British Columbia. Well, I want to tell you that that has been rectified. Hopefully, when that pipeline is built we will have a road so that the British Columbia Railway into Fort Nelson can serve the construction of that pipeline and British Columbia industries can take advantage of that great development. That's just one area.

We're working on an agreement to finalize the construction of the Stewart-Cassiar Highway. We're moving. You know, we're moving ahead on so many fronts and we're working together. I talk to the Minister of Highways and I talk to the Minister of Agriculture (Hon. Mr. Hewitt), who has great plans for the agricultural industry in this province.

MR. N. LEVI (Vancouver-Burrard) Do they talk back?

MR. LAUK: How about the Minister of Education (Hon. Mr. McGeer)?

HON. MR. PHILLIPS: You know, you talk about the cattle industry in this province. We realize there's a potential for British Columbia to be self-sufficient in the cattle industry. We realize what has to be done

[ Page 732 ]

to solve that problem. I'm not going to steal the minister's thunder, but, Mr. Chairman, I'm just trying to advise the House that we're planning long-range programmes which will, over a period of years, provide those much-needed jobs.

MR. LAUK: What about economic development?

HON. MR. PHILLIPS: Now the member for Vancouver Centre said: "What about economic development?" It's all economic development.

The member in his speech was asking if we made a deal in Japan for coal. I just want to inform the House that this government took probably one of the most successful trade missions to Japan that any province has taken into any country anywhere. I just want to tell this House that that delegation was up and at a meeting every morning at 7:30 a.m. We were sitting down, Mr. Chairman, and we were reviewing what had taken place the day before. We were planning our agreements.

Interjection.

HON. MR. PHILLIPS: Oh, I'll talk about that too, Mr. Member. I want to tell you that that delegation represented this province, and every member of that delegation represented this province, and represented it in an outstanding manner.

MR. LEVI: What did you come back with?

HON. MR. PHILLIPS: And we didn't go to Japan to play rugby.

SOME HON. MEMBERS: Oh, oh!

HON. MR. PHILLIPS: We went to Japan and we worked. I'll tell you, Mr. Chairman, we didn't only talk about coal. We talked about agricultural products; we talked about the lumber industry; we talked about the mining industry.

MR. COCKE: If you were there, we know you talked.

HON. MR. PHILLIPS: I'll tell you, Mr. Chairman, there's great potential in Japan. Mr. Chairman, we came back with an agreement with the Japanese for them to increase their coal purchases from British Columbia.

AN HON. MEMBER: How much?

HON. MR. PHILLIPS: This is not only in the interests of the province of British Columbia.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: Now it's Senator Phillips.

HON. MR. PHILLIPS: As the petroleum exports decline over the years in Canada, the only single commodity that this nation Canada has to balance her trade payments is in coking coal.

AN HON. MEMBER: Yes, Senator.

HON. MR. PHILLIPS: We must be aggressive. We must sell because, I want to tell you, Mr. Chairman....

Interjections.

MR. CHAIRMAN: Order, please, hon. members. We've only got eight minutes until adjournment hour. Perhaps we could restrain ourselves until that adjournment hour and give the hon. minister our attention.

HON. MR. PHILLIPS: It's interesting, Mr. Chairman, to see the frivolity with which the opposition treat economic development. An interesting sideline: I went through their throne speeches over a number of years, and do you know that the word "economy" was very seldom mentioned? As a matter of fact, it was almost absent.

Mr. Chairman, we have and will work with the federal government to make sure that when our oil exports decline we will be ready to bring on our coking coal. I'm not going to talk about the figures, but over a period of years this country has the opportunity to balance her trade payments in the tens of billions of dollars. Mr. Chairman, we will work toward that end.

MR. WALLACE: Next!

HON. MR. PHILLIPS: Now, Mr. Chairman, there seems to be a lot of talk strictly about coal from Japan.

MR. BARRETT: Coal from Japan? No, coal to Japan.

HON. MR. PHILLIPS: Coal to Japan.

MR. BARRETT: Now you've got it.

HON. MR. PHILLIPS: I have a report here, Mr. Chairman — which I'm not going to read in its entirety — which was just very recently prepared.

AN HON. MEMBER: Just table it!

HON. MR. PHILLIPS: I'm not going to table it either.

[ Page 733 ]

Interjections.

HON. MR. PHILLIPS: I'm referring to it. Just sit down, Mr. Member!

MR. BARRETT: You know the rules.

MR. CHAIRMAN: Order, please, hon. members. The Minister of Economic Development has the floor. Please proceed.

HON. MR. PHILLIPS: We seem to be tied up in our thinking of coal with just the Japanese market. There is a market equally as large in the European Common Market. We will be seeking that market as well for British Columbia coal. There is a market in Brazil. There is a market in Korea. There is a market in Mexico. But I would suggest, Mr. Chairman, that over the years the opposition will try and point out....

MR. GIBSON: On a point of order, the minister referred to a report. On a point of order, could he tell us what report it is — what the title of it is?

HON. MR. PHILLIPS: It's a report which was prepare for an independent coal company by a marketing firm in Germany.

MR. GIBSON: Who?

MR. CHAIRMAN: Hon. member, that is not a proper point of order. Perhaps it would have been better to have been asked....

MR. GIBSON: It is a point of order.

Interjections.

MR. CHAIRMAN: Please proceed.

HON. MR. PHILLIPS: Thank you, Mr. Chairman. I'm just about to wind up, but I do want to point out to the people of British Columbia that we do have long-range planning in this department working with all other departments of government.

MR. LAUK: Answer the questions!

HON. MR. PHILLIPS: The economy is starting to improve, Mr. Chairman, and until the debate resumes, I move the committee rise and report great progress and ask leave to sit again.

Motion approved,

The House resumed; Mr. Speaker in the chair.

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

Leave granted for divisions to be recorded in the Journals of the House.

Hon. Mr. Chabot files answers to questions 4, 5 and 53. (See appendix.)

Hon, Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.

[ Page 734 ]

APPENDIX

4 Mr. Lea asked the Hon. the Minister of Mines and Petroleum Resources the following questions:

1. How many tons of copper concentrates were produced in 1975 and 1976?

2. What was (a) the estimated value of these concentrates and (b) the royalty return to the Province in each year?

The Hon. J. R. Chabot replied as follows:

"1. Production tonnage not available but statistics are maintained on tonnage sold during a year, and these figures are as follows:

Short dry tons of copper concentrate production sold

"2. (a) Value of copper concentrates sold

(b) Royalty and mineral land tax assessed on copper concentrate sold

* 1976 figures are estimates, as complete returns for 1976 are not yet available.

† 1976 values are estimates, as complete returns for 1976 are not, as yet, available.

‡ 1976 mineral production from freehold lands subject to mineral resource tax assessable mid-1977 in place of former mill rate assessment on assessed value under Mineral Land Tax Act."

5 Mr. Lea asked the Hon. the Minister of Mines and Petroleum Resources the following questions:

With reference to coal mined in 1975 and 1976-

1. What was the total tonnage of coal mined in each year?

2. What was the total amount of royalty or land tax in lieu of royalty paid on coal mined in each year?

The Hon. J. R. Chabot replied as follows:

"Coal production tonnage not available but statistics are maintained on tonnage sold during a year, and these figures are as follows:

"1. Coal production sold (long tons) 1975 1976*

"2. Coal royalty and mineral land tax 1975 1976t

* 1976 coal production figures are estimates.

† 1976 revenue figures are estimates."

[ Page 735 ]

53 Mr. Shelford asked the Hon. the Minister of Mines and Petroleum Resources the following questions:

1. How many mineral claims were staked in each of the following years: 1972, 1973, 1974, 1975, and 1976?

2. How much money was spent by the mining industry for exploration in each of these years?

The Hon. J. R. Chabot replied as follows:

"1. 1972, 78,901 mineral claims 1,500 ft. sq.; 1973, 35,659 mineral claims 1,500 ft, sq.; 1974, 16,971 mineral claims 1,500 ft. sq.; 1975, 11,751 units 500 metres square; and 1976, 27,652 units 500 metres square.

"2. Exploration expenditures, 1972-75: