[ Page 801 ]

CONTENTS

Statement

Telegram of condolence to King Hussein — 801

Routine proceedings

Oral questions

Royal commission on BCR operations. Mr. King — 801

Legal adviser to Consumer and Corporate Affairs department. Mr. Levi — 802

Meadow Creek Farms racetrack proposal. Hon. Mr. Nielsen answers — 802

BCGEU agreement. Mr. Gibson — 802

Royal commission on BCR operations. Mr. King — 803

Committee of Supply: Ministry of Economic Development estimates.

On vote 79.

Hon. Mr. Phillips — 804

Mr. Lauk — 807

Mr. Gibson — 808

Hon. Mr. Phillips — 811

Mr. Wallace — 814

Hon. Mr. Phillips — 817

Mr. Levi — 818

Mr. Nicolson — 822

Mr. Lockstead — 823

Mr. Barber — 826

Hon. Mr.Phillips — 833

THURSDAY, FEBRUARY 10, 1977

The House met at 2 p.m.

Prayers.

MR. C.S. ROGERS (Vancouver South): Mr. Speaker, in the gallery today I have two very special guests, Mr. Mohammed Daoud and his wife Zohra, who are with us from Kabul, Afghanistan. I think perhaps they may be the first visitors introduced in this House from Afghanistan, and I would ask the House to give them a very special welcome.

MR. R.E. SKELLY (Alberni): Mr. Speaker, I would like to have the members welcome a group of students from the Arrowsmith Seventh Day Adventist School in Coombs. They are here visiting the buildings and observing the session under the direction of the principal of the school, Mr. A.E. Blake.

MR. D. BARRETT (Leader of the Opposition): Mr. Speaker, I would like the House to welcome a prominent Vancouver businessman who is in the gallery today, Mr. Roger Trentanaro.

MR. L. BAWTREE (Shuswap): Mr. Speaker, I would like the members to make welcome an old, old friend of mine, Mr. Mosie Adams, who is in the gallery this afternoon. He is a citizen of this total province.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I would like to make everybody welcome this afternoon, because I understand that this very day is the 79th anniversary of the first sitting that was held in this chamber. I think it should be recognized.

MRS. B.B. WALLACE (Cowichan-Malahat): I would like the House to join me in welcoming a class of high school students from the G.E. Bonner Junior Secondary School in the Duncan area, together with their instructor, Mr. Nimsey.

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, I'd like the House to join me in welcoming three constituents from the municipality of Richmond: Rose Morrisette, Lorraine Ferrier and Claire Hahn.

HON. G.M. McCARTHY (Provincial Secretary): Mr. Speaker, I would ask the House leave to make a statement.

Leave granted.

TELEGRAM TO KING HUSSEIN

HON. MRS. McCARTHY: On behalf of the government, Mr. Speaker, I would like to read a telegram that has been sent by the Premier of the province of British Columbia to His Majesty King Hussein of Jordan:

MAY I, YOUR MAJESTY, ON BEHALF OF THE GOVERNMENT OF BRITISH COLUMBIA, EXTEND OUR HEARTFELT SYMPATHY AT THE TRAGIC DEATH OF YOUR WIFE, QUEEN ALIA. SHE WILL BE LONG REMEMBERED WITH AFFECTION BY THOSE WHO MET HER DURING YOUR VISIT TO BRITISH COLUMBIA IN 1974.

MR. BARRETT: Mr. Speaker, we too wish to express our condolences. The King, who did visit British Columbia in 1974 along with his wife, spent some very fruitful hours in this province extending a new contact with the Middle East at that time that is still presently of value.

Oral questions.

ROYAL COMMISSION ON BCR OPERATIONS

MR. W.S. KING (Revelstoke-Slocan): A question to the acting Attorney-General in the absence of Attorney-General Bonner...I mean Gardom. (Laughter.) Last night, the chairman of the royal commission on the B.C. Railway, Judge McKenzie, was interviewed by Arnold Epp of CJOR radio. The substance of Judge McKenzie's comments was that the MEL Paving case would not be allowed to divert their main concern and focus from the overall operation of the railway and, further, that the MEL case would only be investigated if it was deemed to be relevant to the commission's main focus on the overall railway operation.

Will the Attorney-General now amend the royal commission's terms of reference to specifically include a detailed investigation of the MEL Paving case?

HON. L.A. WILLIAMS (Minister of Labour): Mr. Speaker, I was otherwise engaged in other matters this morning. I know that the Attorney-General has this matter under consideration and I expect he will be in the House shortly. Perhaps the member would defer that question until he arrives.

MR. KING: Mr. Speaker, I want to thank the Minister of Labour. I wonder if the Attorney-General will put in an appearance during the question period.

[ Page 802 ]

LEGAL ADVISER TO CONSUMER
AND CORPORATE AFFAIRS DEPARTMENT

MR. N. LEVI (Vancouver-Burrard): Mr. Speaker, a question to the Minister of Consumer and Corporate Affairs: does the department office in Kamloops have a legal adviser?

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): We don't have a legal adviser on staff, Mr. Member, but there are a number of lawyers, I understand, from time to time that are called upon for advice on an ad hoc basis.

MR. LEVI: Could the minister tell the House if Mr. Doug Smith is an adviser to the office in Kamloops?

HON. MR. MAIR: Yes, I believe he is, Mr. Speaker.

MR. LEVI: Is Doug Smith with the firm of Mair, Horne, Janowsky and Blair?

HON. MR. MAIR: He is, Mr. Speaker.

MR. LEVI: Another supplementary: is the minister still connected with that firm?

HON. MR. MAIR: Mr. Speaker, no, I am not.

MR. LEVI: Mr. Speaker, I draw the attention of the minister to an advertisement that exists in the Canadian Law List, 1976, which states underneath the rest of the members of the firm: "Counsel, the Hon. Rafe Mair, MLA." What is this? Is this a touting for business or just for information to the public?

HON. MR. MAIR: Mr. Speaker, I've already indicated that I have no interest in the firm and, therefore, I have no control over what advertisements they may put in any publications. I simply have no interest in the firm whatever.

MEADOW CREEK FARMS
RACETRACK PROPOSAL

HON. MR. NIELSEN: Mr. Speaker, in response to oral questions asked the other day, the member for Alberni (Mr. Skelly) asked if the Ministry of Environment had conducted tests in the Hazelmere Valley area which would indicate a replacement cost for artesian well supplies of $6 million. The question was: had we conducted such studies to indicate this? The answer to that question is no.

The member for Oak Bay (Mr. Wallace) asked if the Land Commission, when considering the Meadow Creek racetrack application, had before it three separate studies regarding the soil that were carried out by the Department of Agriculture and property management branch. The answer to that is yes.

The first member for Vancouver East (Mr. Macdonald) asked who requested a trip by myself to view the Hazelmere Valley area. He asked specifically: was it by Captain Terry? The answer to the question is: the chairman of the Land Commission, Mr. Garry Runka, advised me that he was touring the area to familiarize himself with the area in question — there were three separate properties — at no one's request, and I stated that I would like to accompany him on that tour.

Finally, Mr. Speaker, there was a question from the member for Vancouver-Burrard (Mr. Levi). He asked if when I visited the Hazelmere properties there was an application before the Land Commission. The answer to that: yes, there were three applications before the Land Commission and they were refused.

BCGEU AGREEMENT

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, I have a question for the Minister of Finance. The other day, the general secretary of the BCGEU, Mr. John Fryer, was quoted in the press as saying that the recently approved agreement amounts to an increase of 24 per cent over 22 months. I would ask the minister if he agrees with these percentages as stated by the BCGEU.

HON. E.M. WOLFE: (Minister of Finance): Mr. Speaker, I would like to thank the member for giving me notice of this question. First of all, with relation to the final settlement made by this government in the last week or two, on the basis of the union vote, the answer is no. In fact, the degree of settlement in that respect was something like 2 per cent. When I say 2 per cent, I am referring now to the final proposal which was based on $123 of a lump-sum payment in lieu of retroactivity plus a $25 per month increase effective February 1 of this year which would extend to the end of the contract for six months.

In explanation of that answer, I'd like to read a brief statement here which will perhaps explain.

"The recently announced agreement with the B.C. Government Employees Union completed the second tier of bargaining, with a resulting increase in the average monthly wage rate of slightly more than 2 per cent. The union has accepted the government's offer of a $123 lump-sum payment to each employee with a $25-a-month increase to wage rates effective February 1, 1977, for the remaining six months of the agreement.

"In this second tier of bargaining, management was able to negotiate greater

[ Page 803 ]

flexibility in work schedules, enabling the efficient use of longer workdays to reduce overtime costs. The master contract, which was agreed to in September, 1975, contains improvements to working conditions and a staged cost-of-living clause, the combination of which will result in employment costs at the end of the contract being at an estimated 21 per cent higher than they were in September, 1975. Accordingly, the two rounds of bargaining, combined, result in benefit increases of approximately 24 per cent by the end of the contract, of which this administration is responsible for approximately 2 per cent and which is more than offset, we believe, in the saving achieved in ship scheduling costs."

I'd like leave to table this statement.

MR. GIBSON: A supplementary on that then, Mr. Speaker, since the minister does seem to indicate that it is approximately 24 per cent over 22 months, if I understand him rightly in the final analysis, which is around 13 per cent a year. I would ask him if he considers this to be within the guidelines and the general thought of restraint of the government.

HON. MR. WOLFE: Mr. Speaker, if I may answer that question: the entire cost-of-living index phase of that increase was approved in September, 1975, and was put before the Anti-Inflation Board, which approved this as being a concept developed prior to the guidelines programme. In other words that cost-of-living and the entire master-agreement phases of the contract were approved under the Anti-Inflation Board. The present increase is to adjust for the salary increases that had not been received, except for COLA, dating back to September. As I said, there was a $123 lump-sum payment in lieu of retroactivity, plus a $25 per month increase effective February 1.

One can reflect different percentages on this, depending on whether you average the percentages over the length of the contract, or whether you apply them from time to time as you go through.

MR. WALLACE: A supplementary question to the Minister of Finance: since there's also been considerable public reaction to the publication of certain parts of the management statement of personnel policy which documents the management-executive group plan awarded to public employees who are not in a union, could the minister, in view of the fact that only part of the information has appeared in the media, agree to table the documents outlining the full content of that agreement?

HON. MR. WOLFE: Mr. Speaker, I believe the information I tabled would have that basic information, but I can supplement it if you wish.

MR. WALLACE: Since the agreement covers three years up to March 31, 1977, can the minister tell the House what procedures, if any, have been agreed to for ongoing negotiations in future years? Are these negotiations now underway, since this agreement ends next month?

HON. MR. WOLFE: Mr. Speaker, just a matter of correction. The agreement does not expire until July 31, 1977, and the matter of negotiations will of course be under the auspices of the Government Employee Relations Bureau.

ROYAL COMMISSION ON BCR OPERATIONS

MR. KING: Mr. Speaker, the Attorney-General is present now so I'd like to place a question to him again.

Last night, the chairman of the royal commission on the B.C. Railway, Judge McKenzie, was interviewed by Arnold Epp of CJOR radio. The substance of Judge McKenzie's comments was that the MEL Paving case would not be allowed to divert their main concern and focus from the overall operation of the railway and, further, that the MEL case would only be investigated if it were deemed to be relevant to the commission's main focus on the overall railway operation.

My question is: will the Attorney-General now amend the royal commission's terms of reference to specifically include a detailed investigation of the MEL Paving case?

HON. MR. GARDOM: Hon. members, it's not possible for me to interfere with or comment upon remarks that have been attributed to the commissioner or commissioners, and I've not heard them. I would again just like to draw your attention to a couple of items within the order, and expand the statement as well.

MR. BARRETT: Yes or no.

HON. MR. GARDOM: It is the responsibility of the commissioners to look into the conduct of the railway. It's the responsibility of the commissioners to see that the operations of the railway were conducted in accordance with good business practices. I would assume, Mr. Member, that if there was evidence led before the commission that it was not conducted in accordance with good business practices, that would certainly be within the terms of their responsibility to look into.

I'd also like to say that insofar as a personal and a government interpretation of the terms of the order,

[ Page 804 ]

it is our view that the various contracts, the settlements and what-have-you concerning B.C. Railway extension, the Dease Lake extension, the Keen, the MEL, the Jones or whatever else the contracts may be are ones that can be before the commissioners and certainly within their very broad terms of reference.

MR. BARRETT: Yes or no, Garde.

HON. MR. GARDOM: It was the government's intention, Mr. Member, in drafting the order-in-council, that everyone would be given the fullest opportunity to present their briefs, to offer their opinions and, certainly, present evidence before the royal commission.

MR. KING: On a supplementary, yesterday the hon. Liberal leader pointed out that the Sloan commission had the broad authority within their terms of reference to investigate the Sommers case but, lacking the specific direction from the government, failed to do so. Am I to conclude then, and is the House to conclude, that the Attorney-General and the government will not directly require the royal commission to investigate the MEL Paving case?

HON. MR. GARDOM: As I stated to you, hon. member, it is the interpretation of the terms of the order, insofar as the government is concerned, that all of those matters are before the royal commission — MEL Paving, Keen Industries, you name it. It's a completely broad order, but it was the government's intention to provide these commissioners with the broadest terms of reference. It was not the intention of the government day by day to amend orders or bring in specifics and say...

SOME HON. MEMBERS: Ohhh!

HON. MR. GARDOM: ...that the commission will be doing this, that or the other thing. Again, I want to say that in the interpretation of the government, yes, by all means. I can't really do more than that. The powers are there and, in the government's interpretation, these are matters that the commission should look at.

MR. BARRETT: Four days of whitewash!

MR. SPEAKER: Order, please. Hon. members, I would like to draw to the attention of the members in the House a quotation from Beauchesne regarding question period. It is stated that it is not in order to multiply, with slight variation, a similar question on the same point or to repeat in substance a question already answered.

MR. BARRETT: It wasn't answered!

HON. MRS. McCARTHY: Mr. Speaker, I would like to file an answer to an oral question that was asked me by the member for Burnaby North (Mrs. Dailly). If you like I could read it, if we're still within question period.

MR. SPEAKER: The question period is terminated, but you could file the answer.

Hon. Mrs. McCarthy files an answer to a question.

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. D.M. PHILLIPS (Minister of Economic Development): As the House rose last night, I was talking about a subject which the opposition opposite seemed to be very interested in, and that is the MEL Paving case as it surrounds charges of fraud. I'm sure their efforts are wearing a little thin.

I was very interested in what the member for Vancouver Centre (Mr. Lauk) had to say about my remarks. He said that my allegations — and I made no allegations whatsoever; I clearly outlined to the House certain facts....

MR. G.V. LAUK (Vancouver Centre): I didn't say that either.

HON. MR. PHILLIPS: He said my allegations are simply a red herring. The ex-president of that railway, the second or third member for Vancouver East, just recently shouted across the floor that it was all whitewash. Now it appears to me that the opposition are doing a bit of doubletalk, and I'd like to ask them again why they did not settle the MEL Paving case.

Maybe I should outline to the House just a few facts surrounding this situation. I want it to be clearly known that the MEL Paving contract, the Keen, and the KRM were all contracts on the same railway extension, the Dease Lake extension which is from Mile 0 to Mile 335.

Interjection.

HON. MR. PHILLIPS: The contracts had in them

[ Page 805 ]

the same terminology. I wish you would ask the member for Vancouver East not to get so excited and to please maintain his cool for just a moment while I outline a few statements to the House.

All the contracts were basically the same contract; they had the same terminology. All three contracts were basically working under the same conditions; they were working under the same railway management; they were working under the same weather conditions; they were all faced with the same inflation rates, rates which I referred to in the House yesterday afternoon.

MR. LAUK: Which ones?

HON. MR. PHILLIPS: They had the same railway engineers.

MR. LAUK: Which figures are you referring to?

HON. MR. PHILLIPS: But during the period the discussions were made, they made them not to re-negotiate the MEL case. At the same time, under all of these similar conditions — the same contract, the same line, the same management, same weather conditions, the same everything, and even the same board of directors — they chose to negotiate with Keen and KRM.

Now it seems to me Mr. Chairman, that they're stating a case here. I ~on't think history has ever proved yet where you could be just a little bit pregnant. The member for Vancouver Centre, who, I understand, is in the law profession, says, however, that although MEL Paving were experiencing basically the same problems, they were experiencing them to a much greater degree and were making much more serious charges about them.

Now I ask the House, Mr. Chairman, is there a degree of fraud? The lawyer from Vancouver Centre full well knows that if the contracts were the same, if there were allegations of fraud in one, there certainly would have been the same conditions that applied to the other.

Now it's very difficult for me to put any blame on the member for Vancouver Centre, because when the decision was made on the MEL case he was not at that time a director of the railway; he replaced the member for Revelstoke-Slocan part way during the socialist reign in this province. He was a party to the negotiation with Keen, and I think, Mr. Chairman, that he probably brought a little bit of sensibility to that board of directors, the president of which was the socialist Premier whom we had in this province for about three years.

Both contracts suffered from inflation, both contractors suffered from changes in the standards of the grade, both contractors suffered from new and stricter environmental standards which were brought in during the term of their contract. However, the same board of directors chose to settle one out of court and one in court.

Maybe the court case was because MEL Paving was forced off the job and was not given the opportunity to sit down with the board of directors and negotiate its case. But I must reiterate, Mr. Chairman, that both problems existed for both of the contractors.

Now I'm not condemning the Keen settlement, but I do think we have to come down and condemn that previous administration and that previous board of directors, of which the socialist Premier (Mr. Barrett) of this province was president, for not settling out of court with MEL Paving. I am condemning that non-settlement. It was a very grave error in judgment on behalf of that board of directors. The president — the ex-Premier of this province — the member for Revelstoke-Slocan (Mr. King) and the minister without from Prince George were the principal directors on that board. It was a grave error and it cannot be overlooked.

MR. J.J. KEMPF (Omineca): It wasn't their only error.

HON. MR. PHILLIPS: No, it wasn't their only error, but I don't wish to go back into the many errors that that government made while they were in power because the people of British Columbia condemned them for that on December 11. I think possibly we might be able to overlook their error in judgment — and it was an error in judgment, But for them to be building up some kind of a smokescreen for the people of British Columbia about charges of fraud leaves me just a little bit dismayed. I think it's a direct attempt by that previous administration to hide behind a smokescreen that they have created, using innuendo, smear and smut and dragging this Legislature into the muck.

AN HON. MEMBER: That is unparliamentary.

HON. MR. PHILLIPS: I condemn it, Mr. Chairman, as a slovenly act on behalf of that opposition over there. Mr. Chairman, we can forgive the graveness of their error but in considering this, I think we have to take into consideration some of the problems that it has put on the people of British Columbia — the taxpayers — and on the railway itself. Their decision to go to court with MEL has set construction of that railway back a long number of years, and no one will ever be able to determine exactly.

AN HON. MEMBER: Shame!

HON. MR. PHILLIPS: It has worked a great hardship on that construction company. It has given

[ Page 806 ]

months of additional work to the very hard-working management and staff on that railway.

The original contract to MEL Paving was from Mile 286 to Mile 335. It was let in July, 1972, for $5,464,840. Mr. Chairman, what happened when the MEL Paving case was not renegotiated and when he was not allowed to stay on the job and finish the contract? That contract was re-let last July — that would be July, 1976 — in two portions. I want you to bear in mind that the original contract was for about $5.5 million. The contract re-let to finish that portion of the railway was in two sections; one let to Chinook Construction and Engineering Ltd. In July, 1976, in the amount of — and this is only for a portion of the original contract, and remember the original contract was for $5.5 million....

MR. LAUK: Is that a low bid?

HON. MR. PHILLIPS: It was let in July of last year to Chinook Construction and Engineering, for a portion of the original bid, for $10,268,812, nearly double the amount of the original bid. The second portion of the railway contract which MEL had was let to Miller Cartage and Construction Ltd., in the amount of $5,471,470.

Now Mr. Chairman, there's one other factor that we must consider. During the increased costs of those contracts to the contractors, the railway was building a new plant facility known as Rail West, in Squamish, and in a little over two years, the cost of that plant escalated some 84 per cent.

MR. KEMPF: They built one car.

HON. MR. PHILLIPS: So the board of directors, who were the politicians, knew that there were increased costs in contracting in British Columbia. Mr. Chairman, I don't know how much additional cost is going to be incurred by the railway because of this action of driving MEL off the contract and not renegotiating, but those members opposite, on this deal, so far as I am concerned, are talking out of both sides of their mouth as they wallow in their own gutter, because, unfortunately, that's exactly what they're doing.

You know, Mr. Chairman, it's typical of the manner in which that opposition has conducted itself during this session. They have condemned every positive thing this government has done. They have not offered one positive suggestion regarding the economy. Prior to the opening of this session, their leader (Mr. Barrett) stated publicly that he is enjoying the fact that the economy of British Columbia is not as good as it could be. He said that he's enjoying seeing the economy in its present state, that he's enjoying seeing the number of persons we have unemployed in this province unemployed. So, Mr. Chairman, I just thought that I'd point out to the House some of the aspects surrounding the MEL case so that you will at least have the knowledge in this House.

Mr. Chairman, there has been a tremendous amount of talk about whether or not the line should be extended into the Dease Lake area. It was interesting to go back into the history books and recall some of the debates that took place in Ottawa prior to the construction of the Pacific Railway, because it reminds me of the same type of conversations and debates that we are having today. Just for the House's edification, Mr. Chairman, I thought....

Interjections.

MR. CHAIRMAN: Order, please. The member for Vancouver Centre on a point of order.

MR. LAUK: I am really asking whether the minister will be courteous enough to indicate whether that's under the heading: "The Pacific Scandal Debate." Is that the one he is referring to?

MR. CHAIRMAN: Order, please. That's not a point of order.

MR. LAUK: Oh.

MR. CHAIRMAN: It's not really proper to interrupt a minister's speech with that kind of a frivolous point of order.

HON. MR. PHILLIPS: Mr. Chairman, we are coming to understand that that particular member for Vancouver Centre rises on his feet in this House and never has a legitimate point of order. As a matter of fact, practically everything that member says lately leaves a lot to be desired, and we have to take it with a grain of salt.

Mr. Chairman, I just thought that it might be interesting, because this debate is taking place, to give you some examples of criticism about the economic worth of the rail link to British Columbia. The government was going to be condemned for "the willingness to expend hundreds of millions of dollars on a railway in a barren and mountainous country." That must have been the NDP opposition in those days.

MR. LAUK: Nonsense!

HON. MR. PHILLIPS: "The B.C. economy cannot form settlements because there is so small a proportion of land fit for cultivation." This was one of the forward-thinking opposition members in Ottawa at that particular time. "Cultivatable lands are

[ Page 807 ]

not available in B.C., this miserable region in the west. B.C. residents are represented as being of wasteful and extravagant habits." I could go on, Mr. Chairman. There are many instances of the type of debate that we are having today with regard to the British Columbia Railway extension into Dease Lake.

I don't have to think too hard to recall similar conversations and similar debates that were made when the decision was made to extend the British Columbia Railway north of Quesnel to Prince George, and on into the Peace River country. However, history has proven that that was the right decision at that time. I am sure that as negotiations with the United States of America and the state of Alaska continue, as mineral and economic development continues in the Yukon Territory, history will prove someday that it was the right decision to build the extension on the British Columbia Railway into Dease Lake. When we look to the future and see that great railway as the only railway link to Alaska, I'm sure that history will look back and pat those forward politicians who made that great decision on the back and say that indeed, they had vision, and indeed, they had courage.

MR. LAUK: Mr. Chairman, the minister has personally recalled the debates in Ottawa in 1868. He was there stalking the corridors, providing leaks to the press. I don't think it is relevant, because this side of the House never opposed the railway, does not oppose the railway, and in all likelihood would oppose any attempt by that government to sell off one of the most important economic levers for the province of British Columbia to a national railway whose interests do not coincide with the development of the economy of British Columbia, with this government, this opposition, or anybody else who lives in the province. So that was, I am sure, a little bit of a colourful tour through history which we all appreciate. We'll all rush to our Pierre Berton this evening and double-check.

Even though these aren't my estimates, I'll answer the questions that the minister raised. First, there was no fraud alleged in the Keen-KRM case.

HON. MR. WOLFE: Table your answers.

MR. LAUK: When he says "degree of fraud," there was no fraud alleged, so let's get that clear.

Secondly, it was a situation where counsel and officials of the railway advised the board that the action by MEL Paving could be won and that the allegations of fraud should be heard at a judicial tribunal.

He referred to the socialist Premier. Well, let me talk about the capitalist minister, and let's define the difference. The capitalist minister gives away money by the cabooseful to private contracting companies; the socialist government takes every step to protect the interests of the taxpayers of British Columbia — all of them. The socialist government takes a principled stand when allegations of fraud against high-level public officials, elected or otherwise, have been made. That's the issue, Mr. Chairman, and that's the issue I now believe that side of the House will never understand.

There are many subjects with respect to the previous day's debate on this minister's estimates. All questions that have been raised have not been answered, and that may come as some surprise to the minister. I know he has made every attempt to answer them and I hope he will today. Some of the questions — indeed not all — that have not been answered are: Was the Minister of Economic Development the unnamed cabinet minister who stated that the British Columbia Railway will need $1 billion over the next five years? Did the British Columbia Development Corporation act on a resolution of the board to purchase 9.8 acres from Canadian National Telecommunications in Dawson Creek? What were the coal commitments that the minister received as a result of his trip to Japan?

Those are a few of the questions that the minister has carefully avoided and that should be answered. I would ask the minister to consider carefully those questions again and give replies.

Another question is: will the minister personally refer the MEL Paving case to the royal commission? He's raised the KRM and Keen negotiations, which, by the way, were negotiations up until December 10, as far as my recollection is concerned. This negotiation took place very skilfully and arduously over several weeks and months, trying to keep KRM and Keen within contract commitments. I would suggest that both these situations be referred to the royal commission. The opposition would be fully satisfied with a review of that situation. Let's call Mr. Broadbent, Mr. W.A.C. Bennett, Mr. Williston and Mr. Gunderson to give evidence under cross-examination and evidence in chief before that commission.

Let's not take potshots at each other in here. Let's have the judicial tribunal deal with it. Let's not have them pass it around like a hot potato and avoid it like the Sommers case. Let's let the sun shine in and let's have a thorough hearing. There is nothing that this side of the House is afraid of having exposed to the public and neither should you. Let's do it.

I have some other questions for the hon. minister. Did the British Columbia Development Corporation make a loan to Silverton industries, I believe the name is, or Silverton mines in the minister's constituency; and if so, in what amount?

Another question, by the way, that the minister has not yet answered and that I'm very interested in is: did he have any political or business association with any of the principals involved with Ragan

[ Page 808 ]

Construction company?

Another question has to be answered if the other royal commission is to act properly. You will recall that two British Columbia Petroleum Corporation employees resigned. Arthur Weeks and Mr. Cameron have resigned for dealing in shares. Is the minister satisfied that no other Crown-corporation official or employee purchased shares in August, Cheyenne or Quasar? Has he conducted an investigation of officials and employees specifically with the Development Corporation? If the minister would indicate that he has and that this information will be given to the commission, I'll be satisfied for the purposes of this debate with that answer. But I think it's important that I find out about two things that have happened in the minister's riding that there's a cloud of suspicion over because the nature of the deal that I'm aware of creates a very, very serious conflict of interest.

One is the Dawson Creek case where the officials of the BCDC said, "No way; it's not in our interest to take this land. It's not useful to the BCDC," and where the minister — I'm suggesting as a possibility — suggested to the board: "Well, no, let's buy this land because Dawson Creek can't afford it; and when they're ready to speculate or deal in the land, we'll sell it to them at cost."

I refer the minister to the Act that established the BCDC. That's not what the BCDC is for. It's not for constituency porkbarrelling. It's to establish industrial land, to encourage industries, to make loans, and to encourage industrial development. That question is very important.

The second issue in the minister's riding is Silverton industries or mines — I haven't got the note with me now. But Silverton, as I recall, applied to the BCDC several times when I was the minister responsible for that corporation. They just were not, in any way, able to fill certain criteria. My understanding is that against the recommendation of all of the officials of the BCDC, the minister intervened to make a loan to Silverton. Now I would ask the minister to refute that if it's not true, but that's the information that I do have. If it is true, why did the minister intervene? How much was the loan? Did the minister conduct an investigation into the development corporation vis-a-vis trading in shares in August, Cheyenne and Quasar?

MR. GIBSON: Mr. Chairman, before going on to other matters I would like to return to a subject that was discussed yesterday, namely the Pemberton report. We seem to have smoked out a little bit of information as a result of that debate yesterday, Mr. Chairman. I suggested at the time that that tremendously important report forecast a considerable loss of jobs in our basic industry — the forest industry. I suggested that the stories I had been told were 50 per cent of the jobs in the coast forest industry.

Today we find in the Vancouver Province of this morning that Mr. Murray Leith of Pemberton Securities has given another figure. Let me just quote the report here. He says that he'd never talked about a 50 per cent drop in jobs and, in fact, he said the report didn't indicate any specific number, but then he goes on: "A subjective guess would be something in the order of 20 to 25 per cent" — 20 to 25 per cent, Mr. Chairman. This is from the horse's mouth this time. It's not rumours about a secret report. It's a statement by, I would say, the foremost expert in these questions in British Columbia — a possible loss of 20 to 25 per cent.

What does that come down to in terms of direct jobs? It could be 7,000 to 8,000 direct jobs, and 15,000 to 20,000 indirect jobs in addition to that. Remember, our forest industry and its employment permeates every aspect of our economy. Up until now it has been the industry that has fueled the growth of British Columbia. Now we have a report that indicates that not only will it not be growing in the future, but it will be contracting, and we have Mr. Murray Leith saying that there may be 25 per cent of the jobs gone in the coast forest industry because of the factors that are discussed in that report.

Mr. Chairman, that's nothing less than a crisis in British Columbia's economy. I said yesterday that that was an incendiary document, and it is. It simply must be released now that we have this independent verification that that, indeed, is the way that the firm that authored that report sees the future. Whether the magnitude is to be 25 per cent or 50 per cent only the future will tell us. It remains within our hands in this province to do something about it, to try and make certain that the kinds of requisite modernization and forest tenure policies, and so on, are adopted which will cause this gloomy forecast not to come about.

But, Mr. Chairman, we cannot do that — the public of this province can't do it, this Legislature can't do it, the industry can't do it — unless they have access to this secret report. The minister yesterday in his reply said that he couldn't release the report because of confidential financial information contained therein. Mr. Chairman, that's nonsense, and I'll tell you why it's nonsense.

A report was presented to the Pearse commission by Pemberton Securities which discussed the same question, and there was no difficulty with the publication of that report. As I say, it was publicly presented. What did it contain? It contained public financial information already on the public record from some of the major companies in this province. If this latest report contains something more than that, if it contains data on individual firms which the minister considers should not be released because of

[ Page 809 ]

commercial confidentiality, then there is no problem because the figures for the various companies can simply be aggregated so that specific firms and their specific problems can't be identified. Then you release the report, and then the public has the benefit of the information and forecasting in that report.

MR. CHAIRMAN: Hon. member, maybe I should just interrupt you long enough to ask whether or not this particular item might not be more adequately discussed under the Minister of Forests' vote.

MR. GIBSON: I don't think so, Mr. Chairman, because that report was commissioned by the minister's department and submitted to his department. Indeed, my information is that the Minister of Forests didn't get it for a little while after it had been received, which I don't think is very good.

MR. CHAIRMAN: Please proceed.

MR. GIBSON: So, Mr. Chairman, that blows any excuse the minister may have for secrecy. Now that the general direction and the general gloominess of that report has been confirmed on the public record, I say he simply has to release it. Twenty-five per cent of the jobs in the coast forest industry is something that's just too serious for that minister to sit on. That information has got to come out in public so we know how to avoid that disastrous future.

MR. H.J. LLOYD (Fort George): You're saying there doesn't have to be confidentiality?

MR. GIBSON: No, Mr. Member, through you, Mr. Chairman. I'm not saying there doesn't have to be confidentiality. What I'm saying is that the information can be released without injuring in any way the cause of confidentiality.

As you may be aware, the census department, for example, runs into this problem every day when they have to release information which is based on small geographic, or financial, or industrial units, which would tend in some cases to identify the private operations of individual firms. They simply aggregate the cases into large enough numbers so that you can't identify the individual firms, and then they release it. The public has its information, and the confidentiality of the data is respected. There's no problem there. That's a complete red herring. The minister can release that report on that basis.

Next, in re-reading the minister's remarks yesterday, I notice he did not reply to my question concerning the Hazelton connection from the mainline of the CNR up to the Dease Lake extension. I suggested that the minister's statements that this wasn't really needed right now, assuming he is going to go ahead and continue the Dease Lake extension, constitute a major policy pronouncement. As the minister knows, most of the potential traffic for the Dease Lake extension is tidewater traffic. It has to be gotten to tidewater. So how do you get to tidewater? Unless you have that cut-off, you have to haul it all the way back to Prince George and then all the way back on the CN line. That is about an extra 600-mi. haul. It's going to be hard enough for the resources up there to pay the freight on that line, if you're going to try and do anything like recapture your costs. But if you're going to try and pay the freight on an extra 600 miles, then it becomes, as near as I can see, impossible.

I'm particularly puzzled by the minister's approach to this because my recollection had been, and I may be wrong, that this was to be federal money rather than provincial money to build this cut-off. If that's the case, then of course the minister should be advancing it as quickly as he can. I simply don't understand why he is telling this House that that cut-off connection is now in question. I would very much like him to clarify that.

Also, the minister didn't comment on the curious case of the missing president. I won't go over the description of that, but an individual had, in my opinion, been very badly treated in terms of his employment, which he thought was employment and which was then abruptly terminated just when he was ready to move out here to take on the job of president. I ask the minister why that was done.

Interjection.

MR. GIBSON: And how much did it cost? That's a good question, Mr. Member; that's an excellent question. I pass it on to the minister: was there any settlement involved?

Continuing on the BCR and getting back to the Dease Lake extension, the minister supplied us with figures yesterday, which I appreciate. They indicated that roughly $170 million has been spent so far on that extension, and there is about $95 million yet to be spent till completion. He did not give us revenue estimates, Mr. Chairman, and that is what it all has to turn on. We've got $170 million in there, and there's no going back on that. That money's spent. We're paying the interest on it. We have to maintain the work that's been done.

Now is the time to go ahead and put in the extra $95 million to $100 million. Does he have revenue traffic forecasts which indicate that that $95 million is a good investment? Let's use $100 million, because it's easier to calculate. If you're paying interest on that money, you have to figure maybe $10 million a year there. If you're figuring depreciation on the track and roadbed — I don't know what you choose to use as your depreciation period; let's say 15 years — then you have to look at another $6 million or $7

[ Page 810 ]

million right there. Can the minister even tell us if he sees, by the time that line is completed, after operating costs, what you might call an operating profit sufficient to carry those capital charges of the extra $100 million yet to be put in there? It's a very important question, Mr. Chairman, because B.C. Rail is costing a lot of money to our people.

Those are questions from yesterday, Mr. Chairman. I would like to just briefly raise one new point at this time, because it's a question that spans several departments: unquestionably, the department of this minister; probably the Department of Environment; and the Minister of Energy, Transport and Communications (Hon. Mr. Davis). That is the current attitude of the government, and specifically of this minister, on the Kitimat pipeline proposal.

My recollection from last summer — and I don't want to put words in the minister's mouth, so I'll simply say that it's my recollection — is that he came down pretty squarely in favour of that pipeline proposal I'm wondering if he's backed off a little bit on that because I haven't heard him talk about it too much since. I would say to him, Mr. Chairman, and to the rest of the government, that British Columbia must have a position on how oil is to come in to the western coast of this continent. It's not a question of whether, it's a question of how.

In an excellent article in The Vancouver Sun the other day, the former chairman of the Energy Commission, Andrew Thompson, makes that point. He says we don't have a choice any more. Now that Alberta crude is no longer flowing down to the three or four refineries around Cherry Point, somehow they are going to be serviced with oil. They're either going to be serviced overland somehow from Canada, or they're going to be serviced by tankers. Those tankers are either going to off-load at Cherry Point, or Port Angeles, or Burrows Bay, conceivably.

I know the government has a report from the Environment and Land Use Committee on this. My purpose at this stage is not to go into the overall merits of that question. Rather, it is to say to the minister that these questions are important enough to Kitimat and to the lower mainland of our province that the provincial government must develop a position. The question is important environmentally; it is important economically; it is even important in terms of our relations with our neighbour to the south.

The provincial government must develop a position to submit to the federal government, which has final jurisdiction in much of this. To do that, they must hold hearings. They must hold hearings that make it possible for the people of Kitimat to state their concerns, for the people of the lower mainland to state their concerns, for the various oil companies, or pipeline companies, or whoever might wish to come and state their concerns. But particularly, the concerned citizens of the province should have direct access to their provincial government on this question which is concerning and vexing the minds of many of us right now.

Mr. Chairman, when you look at the latest incredible suggestions from TransMountain Pipeline that Cherry Point should become the main unloading area for the tanker traffic that would come in to service not only Cherry Point, but the American midwest as well.... This suggestion is one of the most astonishing and, in many ways, amusing that I've ever heard — that their pipeline should be reversed a few days a week to ship the oil up to Edmonton and then down to the U.S. midwest, and the rest of the week run oil down to Vancouver, the excuse being that Vancouver refineries can't handle the Alaskan-type crude. But, of course, you would think that other types of crude could be brought into Cherry Point or that the Vancouver refineries could be modified. But, of course, that wouldn't solve TransMountain's problem, which is that the through-put of their line is going down and down and down, and they want to fill it up. So they've come up with this incredible suggestion of running it one way one day and one way the next. So a barrel of oil makes a 1,000-mile-plus round trip when it could have just gone across the street. We are getting further and further into Alice's wonderland.

HON. MR. PHILLIPS: Come on, there are different types of oil.

MR. GIBSON: Sure there are different types of oil, Mr. Minister, but you can offload different types of oil at Cherry Point, and you can also modify the refineries to use the different types of oil. You'll recall that those Cherry Point refineries were originally built for Alaskan crude. They were modified simply enough to use Alberta crude. Vancouver refineries are built for Alberta crude. They could be as easily modified to use Alaskan crude.

AN HON. MEMBER: How?

MR. GIBSON: Just back and forth. I'm suggesting that that should not be done, because I don't want to see that Alaskan crude coming into Cherry Point. I think that's entirely the wrong solution. I'm just saying how Alice-in-Wonderland this whole situation is getting and the provincial government should hold some public hearings to put together their position on this so that they can make it unmistakably known.

I want to take a few sentences to congratulate the minister on the establishment of the tariff analysis unit in his department. I am told it consists of about five people and I think there will be few expenditures the government will make that have a potential for a higher benefit cost ratio. It is an unequivocally good

[ Page 811 ]

move. I congratulate him on it. The economic facts of life behind it are that British Columbians pay at least $500 a year per man, woman and child for the tariff wall that surrounds us. We sell on the world market and we buy on this protected market and it just costs us a lot of money. It makes our production facilities a higher cost and makes it more difficult for us to earn our living in the world through our unprotected exports. So every way that the minister, through the application of reason and common sense and the figures and arguments developed by this unit, can chip away at that tariff policy of Ottawa's and try and get the recommendation of the Economic Council of Canada adopted, which says it's better for all of the country to gradually get rid of our tariff walls, the quicker he can do that the better, and I congratulate him on that.

My final thought at this point, before sitting down, is to make my regular plea for the establishment of an economic council of British Columbia. Mr. Chairman, I won't go back over the sad story of the Economic Policy Analysis Institute of British Columbia. I'll just say that there is a continuing need of this government, and of the people of British Columbia, for independent economic advice. The government is very concerned, for example, with our competitive situation in the world. It is using that as an argument for both management and labour to show restraint. Unfortunately, it does not have the figures, the research, or the hard facts to back up that argument. It's largely a matter of waving of the arms and saying that our competitive situation is serious. An economic council provide exact data on that kind of thing.

We have an unusual economy in British Columbia compared to the rest of Canada or the rest of North America. We are an economy exceptionally dependent on trade. We are very heavy in primary industry and in tertiary industry — services — and very, very light in the secondary area. That's a strange kind of animal as economies go, and the usual economic theory doesn't tell us too much about what's the best way to run with that. This is the kind for thing that an economic council of British Columbia could look at, and it could look at so many other things that are of concern to the people, to the government of the province, and to this House — things like rent control. The list could go on and on — mineral royalties, and all of the vexatious economic questions of the day that are subject to interminable argument across the floor of this House. They might be so much better ventilated and the dialogue improved by an economic council to look at these things and to bring in sound, reasonable arguments and provide some kind of a foundation for the public dialogue on the economy because, whether we like it or not, governments are getting further and further into the economy. That means the economy is run on that basis of political decisions, because that's what governments are, and those political decisions have to come back, in the end, to the opinions of the public. So the opinions of the public in economics are important, and they must be soundly based or else the government will be forced into unwise economic decisions.

As I say, that's a regular plea, Mr. Chairman. I am confident that the government will one day see the light and I will sit down in the hope that the minister will stand up and say he has seen it right now.

HON. MR. PHILLIPS: I think the member for the high plant of the questions which he has just recently asked. First of all, I'll endeavour to deal With the Pemberton report. I know the member would not want to leave the impression with this House that a spokesman for Pemberton Securities did predict a 50 per cent decline or, indeed, did predict a 25 per cent decline in the employment in the lumber industry. Now if you read the article very carefully, Mr. Chairman, and I am sure the member has done this, what he said, according to the press report is:

"'We've said there is going to be a decline in employment but have never tried to quantify it,' Leith said. He said he could not discuss the report prepared for the government but added that his firm's views on the forest industry are well known and it has never 'talked about a 50 per cent drop in jobs.'

"A subjective guess, he said, would be 'something in the order of 20 to 25 per cent...50 per cent would be an exaggeration.'"

That is in the Vancouver Province report. However, the wire story states this:

"However, in Vancouver a spokesman for Pemberton Securities says the 50 per cent-reduction prediction is incorrect. Director Murray Leith says there will be a reduction but the company has never tried to predict by how much. He says he can't discuss the report but a substantive guess would put the figure somewhere between 20 and 25 per cent."

But those are figures from Pemberton not necessarily based on the report. I want to call to the member's attention again that since this report has come out, we now have the Pearse report. As you know, his is a complete and thorough report that has been heralded in the province by the industry and, I believe, by opposition and by everybody as a very thorough analysis of the lumber industry in British Columbia.

MR. GIBSON: The Pearse report is pretty gloomy too.

[ Page 812 ]

HON. MR. PHILLIPS: Well, yes, it's pretty gloomy. However, the purpose of reports — at least as I see them — is to gather all the facts so that decisions can be made. As you know, we have a committee right now set up to study ways of implementing the recommendations of the Pearse report, When those recommendations are implemented, I would hope and pray that there will be sufficient changes made in the industry so that we will not be faced with this decline in employment in the lumber industry. There have to be changes made in production; there have to be some changes made in tenure; there have to be some changes made in the way we do things. The purpose of doing these studies is to bring to our attention and make recommendations. I would hope that when the Pearse report is implemented — certainly with some of the problems that we are facing now in our lumber industry — enough changes will be made, Mr. Member, that we will not, indeed, be facing those gloomy days ahead. Again I say that the Pemberton report deals a tremendous amount with the profitability of individual companies and the industry on the whole — the reasons why some of the profits are lower than others. As I say, it's really confidential information, and I will not be releasing it at the present time.

One of our major analyses on the General Agreement on Tariffs and Trade relates to the lumber industry and plywood. What comes out of that agreement will certainly have a very large bearing on the lumber industry in British Columbia, and that's why we are so concerned about it. I certainly thank the member for his statements with regard to our tariff analysis unit; we certainly agree with him. I think it's one of the major hurdles that the government of British Columbia will face, and with sufficient knowledge and planning, hopefully, overcome. As everybody knows in British Columbia, that's one of the areas which at the present time really has our economy tied in many areas, and we can't move. This is one of the first and, as one of the members said, one of the most important areas that British Columbia can move in.

[Mr. Veitch in the chair.]

With regard to the Terrace-Hazelton connection, I'd like to point out to the member that the connection is still part of the agreement being negotiated with the federal government. I also realize that timing is an issue in this. However, I would suggest that probably no decision will be made on that connection until such time as the royal commission brings in its recommendations. It states very specifically and clearly in there that the royal commission must make recommendations with regard to areas presently being served or those areas that the railway proposes to serve.

With regard to the cost of extending that railway, sometimes, as the member knows, it's very difficult to come up with hard and cut-and-dried revenue projections. But what you have to base your decisions on, in many instances, is the potential.

But in many instances, what you have to base your decisions on is the potential. Certainly if there was no potential in the area you would not be extending. I mentioned this when the committee first sat this afternoon. I talked about the potential of linking up with Alaska. But I would like to say that we would probably have substantial revenue from that line today had we not had that mining legislation which basically — and I mentioned this again yesterday — stopped all exploration and stopped the ongoing projects that were in that area. That would have given revenue immediately. However, the potential is still there, and a lot of it, of course, will depend on the economic climate and development in the area.

As I say, there's a forecast of potential, but the forecasts that were made some years ago have, of course, changed. The timing has changed. We must also realize that the viability of extending that railway through to Alaska has become of much greater importance today than it was in 1971 or 1972 or, indeed, in 1969. There have certainly been a lot more minerals and more exploration in the Yukon.

With regard to the Kitimat pipeline, as you know, the preliminary announcement was made in 1976. Formal application has now gone to the National Energy Board, and they are the ones who really have the jurisdiction in this case. The provincial government, through the Department of Energy, Transport and Communications, is currently studying the information available and will make a decision very shortly whether to intervene on behalf of the government in the National Energy Board hearing.

You know, of course, the Kitimat-Edmonton pipeline is only one of a number of pipelines and shipping proposals to transport Alaska crude oil to southern markets. But I did appreciate the member's summation of the situation and the understanding of it. I look on British Columbia's role as figuring how the province will best benefit from the best proposal. With regard to the benefits to British Columbia, I believe a lot of misunderstanding does exist today. However, I think the intervention of yet another government body at this time would just serve to confuse the issue. However, as I say, we are studying the entire problem, and various solutions to it. But before committing the province we want to make sure that we have had the opportunity to do a thorough study.

I would like to just say that all committees and people in the province should, indeed, not be making statements with regard to that pipeline until they have, indeed, looked at all the facts, surveyed all of the safety measures that can be taken and taken a

[ Page 813 ]

look at the benefits. Now as I say, the hearings are going on, and I think they are being monitored and a position will be taken.

With regard to a plea for an economic council of British Columbia I certainly appreciate the member's comments in that regard, and I certainly appreciate the fact that there is, indeed, need for dialogue with the public on some of the economic issues. As a matter of fact, I have tried to convey some of my feelings on the economy of the province, as determined by this ministry, to the public. But we do know what the key issues are. I think we have identified them in our studies, and they concern the General Agreement on Tariffs and Trades; they concern transport; they concern taxes; they concern incentives, interests, markets and so forth. Sometimes we know what the problems are, but the difficulty is knowing how to implement them. As I have said earlier, that is one of the reasons we are now negotiating with Ottawa and not confronting with Ottawa, because there are many areas where Ottawa has control over many aspects of the economy of this province. However, I am heartened with the attitude that Ottawa is now taking, because they realize that British Columbia does indeed have the potential and the resources and the people and the markets to give a big boost to the economy of Canada. I am very heartened with this attitude and I think it's a change in the right direction.

However, I do thank the member for his suggestion with regard to the economic council. I would not want the economic council of British Columbia, if and when one is formed, to not come to grips with some of the problems that are facing the Economic Council of Canada because I think that they could more readily apply themselves to the main issues.

I think you know that one of the main issues facing the business world in Canada is the need to retain some of their own profits in their own pocket so that they indeed can expand and run their own affairs. As I have said before, I had a meeting with Len Marchand in my office, when we were surveying ways in which we could help the small independent businessman. I said: "You know, Mr. Minister, we have a tendency to take money away from the business community and send it to Ottawa, launder it through the bureaucracy, and then form another bureaucracy in finding ways and means in which we can give incentive back to the very people from whom we took the money away in the first place."

Now to you, Mr. Member — through you, Mr. Chairman — that may seem like an oversimplification. But I think that if we looked back at what has happened over the past few years, that is exactly what has happened. Every time we find a particular segment of society making a few dollars, we have a tendency to move in and say: "No, we're going to stop that."

I think one prime example of that is when professional people in our country were investing in housing and in rental accommodation. The government came along and saw that they were investing their money and, lo and behold, they were making a profit! Canadians were actability making a profit and keeping their money in Canada and the government had to come along and say: "No, you bad boys, you can't do that! Now, we'll take the money away from you and we'll put certain curbs on what you can do and then we'll take it down and we'll launder it through the bureaucracy in Ottawa and then we'll come back and we'll subsidize housing and we'll subsidize accommodation." Now to my way of thinking that is not good business sense. Maybe that's an oversimplification, but one of the reasons that we have a shortage of rental accommodation in Canada today is simply because of that fact. So what do we do?

Then we come out, a couple of years later, after we really killed the industry and killed the incentive and taken away the desire for the professions to build accommodation. I'll use them as a prime example.They've since taken their money and are investing in accommodation in the United States, into Washington and Seattle. So now we have to take the money that we've taken away from them on this profit and we have to come back and we have to find ways of subsidizing the accommodation. We come out with incentives to give them more than they had in the first place. I think it's a comedy of errors the way governments had taken away the incentive from the business world. In my humble opinion, that is one of the reasons we are faced with the economic problems and woes that we have in Canada today.

Now I can see that there must be some normal dips and balances in the economy, and that happens. But immediately the government steps in and tries to smooth that out, there is where we have been getting into the problems. I say yes to an economic council. But let's implement the things that we know and the things that we should do. Let's implement them first. Then I would like to see that we have an economic council in British Columbia that would help us cope with growing problems.

You know, the province would be growing so fast that we would have to have an economic council to decide how we're going to limit it or where we're going to put it in what direction we should be going. That would please me if we make some of the progress that I think Ottawa is going to make because they recognize this problem. Hopefully I will be meeting with the Minister of Industry, Trade and Commerce next month, when some of these decisions will be made and I look forward to representing British Columbia at that time.

[ Page 814 ]

MR. WALLACE: Mr. Chairman, I would like to return just for a few moments to the B.C. Railway, both because some points have not been made and because the minister has not answered questions that were posed yesterday. But there is certainly one person who's been overlooked in all this mess on the BCR, and that's the small businessman in the north country. The evidence, regardless of the government of the day, is overwhelming that projects on the B.C. Railway were planned and conducted by a seat-of-the-pants approach, to the degree that the engineers involved in the planning are now under the scrutiny of their own peers. It makes it quite obvious that the degree of planning and the efficiency of the engineering planning have been so abysmally inadequate that even the engineers employed by B.C. Railway are being investigated by their professional brethren. Now, Mr. Chairman, there is neither the need nor the time to go off in that particular direction. The point that I think has to be made is that regardless of the government of the day, the manner by which the railroad has been functioning for many years is clearly most inefficient and unbusinesslike. That is no longer debatable, or at least let's say that it hardly needs debate. When you have an ad hoc approach to large projects involving millions of dollars, sooner or later it has to come to disaster, particularly when external economic factors such as inflation add a further dimension to the inadequate planning and the inadequate projection of costs that have been done in the first place.

In researching the more specific problem of Ragan Construction, I've done a lot of phoning in the last day or two. I would just like to be sure that this House and the whole of British Columbia know that it isn't just the contractor who ends up in difficulties. It's the numerous small-business people who do business with the contractors who end up holding the bag.

Mr. Chairman, I think I should make it plain that in trying to become knowledgeable about this whole situation, I have found that I really can't have too much sympathy for the contractor. It seems to me that both parties to this miserable kind of procedure knew exactly what the score was. The government, through the BCR, knew very well that the engineering, planning and projection of costs might as well have been figures plucked out of the air. They certainly bore little relationship in the ultimate analysis to the specific amounts of rock, gravel and what-have-you that had to be moved.

Without taking up the time of the House again to quote chapter and verse, the documentation which was produced in this House earlier on showed that overruns were the order of the day. It was just the size of the overrun that was in any way changeable.

AN HON. MEMBER: Right on.

MR. WALLACE: So whether the government was acting directly under the thumb of the then Premier, W.A.C. Bennett, in telling one man to cut back by X millions of dollars, or whether it was an engineer or whether it was a project manager, I'm not even interested in getting into today. I just think that it should be established once and for all that this was a game and both sides knew what the game was.

The government was fudging on the projection costs. The contractors simply looked at previous situations with previous contractors, who, in many cases, went ahead with work and knew very well it would cost 100 per cent more, and subsequently made a deal, if they could, with BCR on overruns. As I say, we won't go through all the documentation, but both sides of the game, Mr. Chairman, knew what the ground rules were, and they're not very respectable ground rules. I think that for everybody to get so hurt and holier-than-thou about some of the inadequacies and unprincipled behaviour on both sides of the situation is just a little much to swallow.

What I want to say is that regardless of the fact that there are two sides to a very expensive game — expensive to the taxpayer, that's for sure — all kinds of responsible small businessmen get absolutely nailed right in the middle. The more I dig in to the Ragan Construction agreement, the more obvious this becomes. There were over 100 small, unsecured creditors who were owed money by Ragan Construction. Had it not been for the various measures which were taken, many of them would have gone broke in their own business.

Just to take the Ragan Construction situation as an example of the general point I'm trying to make, there's no question that it may be all very well for a Crown corporation and various contractors to play a kind of guessing game where they hope that in the long run they'll get enough to make a profit, but couldn't care less about 100 or 120 other little businessmen who finish up in bankruptcy because the little game didn't quite work out the way they had expected.

MR. LAUK: Are you suggesting a conspiracy, Mr. Member?

MR. WALLACE: No, I'm not suggesting a conspiracy; I'm suggesting that a lot of small businessmen in places like Dawson Creek in the north country where the railway developments are occurring, enter into business in good faith with contracting companies, and it is their livelihood. It may not prove to be the complete livelihood of a contractor who can move to richer and greener fields on another occasion, but if you've built a small business in Dawson Creek, or Terrace, or wherever, and you find that because of the fact that the contractor had been sucked into a deal which leaves

[ Page 815 ]

him greatly short of funds, you go broke as an individual businessman, there don't seem to be too many people to weep for you.

That's particularly galling when this government in the 1975 election made a very strong pitch for voter support based on the fact that they realized and sympathized with the problems of the small businessman. The people in the north are not too amused — and I've talked to quite a few of them — by the fact that this government and other governments — and ours if we were government — always talk about the key value of our national resources, such as gas and oil and minerals, which come out of the north country. The people in the north see all of these hundreds of millions of dollars worth of resource assets being shipped out and taken out of the north country but they are not very convinced that the kind of revenue, benefits and services which this government provides find their way back into the north country in an equitable ratio to what is taken out.

There is no question that the B.C. Railway, or whoever owns it one day, is a key element in the wise and progressive development of our resources. But the people in the north, and particularly the small-business people, are not at all amused that a large Crown corporation like BCR, and contractors like Ragan Construction, Keen Industries, MEL Paving or whoever, can enter into this basic prerequisite of developing the railway. But all that happens to the small businessman is that he goes bankrupt in the process because of this game that I referred to earlier.

MR. KEMPF: Name names, Scotty.

MR. WALLACE: Why don't you go back to sleep! I just explained, if you had been listening, what the game's all about.

MRS. P.J. JORDAN (North Okanagan): Well, he lives up there.

AN HON. MEMBER: He lives up there? Are you kidding? He's semi-conscious.

MR. WALLACE: Well, Ray Jones Ltd. went bankrupt. They are a company in the north country who were doing business — not in a large way, but a small business. There are other companies which I am sure the minister knows very well, among the 120 creditors. I don't know if it was exactly 120, but somewhere around 100 creditors. All of them or many of them were facing bankruptcy because of this contract between Ragan Construction and BCR, where BCR knew very well that the work could not be done for the cost which has been projected.

I can't but respond to the minister's comments in answer to the Liberal leader. One of the big problems in continuing to develop our economy is that private enterprise doesn't finish up with enough money in their pockets as profits. That is indeed a very integral part of any economic system that is based on private enterprise — namely, that if there is inadequate net profit, there is less incentive to the ongoing investment of more and more capital, without which the economy can't expand.

It keeps coming back to this basic fact of economics: if you have excessive taxation, that is one of the primary reasons that the companies don't have the profit left in their pocket. They are overtaxed. I don't know how long it's going to take this province, and indeed this country, to look and listen to our very much more successful brother south of the border who has seemed to realize that tax cuts have that very predictable and essential result of encouraging the development of the economy, of encouraging investment. As I mentioned in an earlier debate, we have to remember that we compete with whatever sources of capital are available, with other countries such as the United States, Japan, West Germany or wherever.

So again, I just say to the minister: why is it not that instead of the kind of tax increases we had last year, which have had a very dampening effect on the economy — and we needn't go over for the nth time the fact that consumer spending or the money available for consumer spending was greatly reduced by perhaps $500 million...? Why cannot we learn from that, and try to learn also from the American policies regarding tax cuts? I have already referred to the Corporation Capital Tax Act, which is just another addition to the cost of doing business by corporation.

The minister made great reference to the bureaucracies that are involved in cost-sharing programmes and in dealings with Ottawa, and that is a valid point also. But I would like the minister to respond, and tell me his own position and his own policy regarding the role of tax cuts in the present state of our economy.

It would seem to me that we've proven that the tax increases did nothing but increase an already high rate of unemployment. Now that President Carter seems to be willing to set the example and since we, in turn, know from the million times it's been mentioned in this House that our economy waxes and wanes parallel to the American economy, it would seem to me that this is an ideal time for tax cuts.

Mr. Chairman, if I could just return for a moment to some of the specific questions dealing with the Ragan Construction settlement, I wonder if I could ask the minister again what total sum of money Ragan Construction was asking when it was decided to try and help the creditors. Secondly, what was the appraisal figure which was arrived at as to the market

[ Page 816 ]

value of the equipment? Who did the independent appraisal? I've been given inaccurate information and I've been on the phone today again, and I can't seem to track down who the appraiser was. I think it would simplify life a lot if the minister would just tell me.

I would also like to know, if the value that was paid out on the equipment was $600,000 and the total that was paid out was $1.2 million, could the minister tell me how the other $600,000 was allocated?

I would also like to know — and this is a very key question which I would like to ask, because there is a great measure of confusion, obviously, in the B.C. Railway in relation to a large number of contracts — if I could ask the minister if he was ever involved in any other meetings with creditors involved in other contracts where overruns occurred, other than the Ragan Construction situation.

It seems that there are a variety of ways in which these embarrassing overruns have been tackled. We've had quite a variety. We've had the MEL Paving situation which went to court. We've got evidence that Keen Industries settled on one occasion, late in the middle of December. And here we have this specific instance of Ragan Construction, where the creditors called a meeting and invited the minister to attend. We know that, subsequent to that meeting, a negotiated settlement was arranged. Now I just want to know whether the minister got involved in a similar capacity in any of the other contracts where the contractor was asking for a payment on overruns and, indeed, whether this was meant to be some kind of precedent for future negotiations regarding other contracts where the BCR's projected costs fell far short of the contractors' expenses.

I asked yesterday, Mr. Chairman, in this same debate, as to the finance companies that were involved in benefiting from the settlement which was negotiated in the Ragan Construction situation. In Hansard, the minister mentioned Toronto Dominion Bank, Wardley, Finning, IAC, FMCC and Traders. I would like to know, in particular, what involvement Traders Finance Company had in this particular settlement, because I've been doing a little bit of research and the minister himself, in his disclosure document as a provincial employee or a provincial official, has listed Traders Finance Limited as one of his personal creditors. Now there may be some explanation of this. The terminology is the same. But it certainly raises again the point that I raised earlier in debate, that this minister became involved, albeit with the best of intentions, on behalf of creditors in his riding to try and solve their problems.

I want to make it very plain I'm not disputing at all the fact that these creditors, many of them small businessmen, were in a real bind and needed some fair and just settlement of the financial problems they were faced with. Nevertheless, the facts seem to indicate that one of the finance companies which did benefit from the settlement is described by the minister here yesterday as Traders, and that was the only word the minister used. In his disclosure document, under section 31(3), the minister has listed Traders Finance Ltd. as one of his personal creditors.

There are many other points which have arisen out of this whole sorry situation on the B.C. Railway. I regret the fact that the Attorney-General (Hon. Mr. Gardom), in answering questions in question period, seems to think that everything's going to be all right now that we're going to have a royal commission, even if the royal commission may not spend enough time looking back into all the various problems that have arisen on the B.C. Railway and which have been ventilated here in this House.

Yesterday we heard that an unnamed cabinet minister had suggested that the cabinet was looking at the option of selling the railway, and when I try to look at all the ramifications of the railway activities over the last 10 years or more, it would seem to me that there has been immense political interference by W.A.C. Bennett in the days that he was Premier of this province. Even as late as this Ragan settlement — which was made only recently and which followed an initial meeting by the minister with creditors in August, 1976 — even as late as that date there is still political interference. Just because we have a royal commission, this is no kind of guarantee that we will get to know all the facts surrounding many of these contract disputes. It's no assurance whatever that we're going to be seeing less, or no, political interference in the running of the railway.

This minister has particularly stated on many occasions, Mr. Chairman, that there should not be political interference with Crown corporations, and with that I couldn't agree more. I also agree that if there were many small businessmen going broke in Dawson Creek because of the particular Ragan Construction financial difficulties, I again have to ask whether it was appropriate for the minister to become involved to the degree that he did in discussions over the ways in which Ragan Construction might receive some, if not all, of the money they claimed was owing to them.

We also have the minister on another Crown corporation, the B.C. Development Corporation, and more than a year ago he again repeated his philosophy that there should not be political interference or ministerial representation on the boards of Crown corporations. More than a year has gone by and there's no evidence that he's about to step down. Really what I. am trying to sum up is the fact that we've had a tremendous amount of discussion on BCR — many of the fundamental reasons it's in the mess it's in have been clearly demonstrated in debate — and we have certain

[ Page 817 ]

statements by the minister, both in this debate and in months gone by, regarding his strong belief that politicians should stay out of the functioning and the administration of Crown corporations, and yet there's no evidence whatever that he is about to remove himself from the sphere of activity of the B.C. Railway or the B.C. Development Corporation.

[Mr. Schroeder in the chair.]

What this House, I think — and certainly the opposition parties — is pondering is whether, on the basis of bad decisions, the minister should step down anyway, or whether, on the basis of government policy that ministers should not interfere with Crown corporations, that should happen anyway. All I know is that somewhere in this debate I, or someone else, will be trying formally to bring that about if, in fact, there is no evidence that the minister himself sees the wisdom and the improvements that could be made if he removed himself from the board of the B.C. Railway and the board of the B.C. Development Corporation.

AN HON. MEMBER: And from the cabinet.

MR. WALLACE: That is not intended as any kind of threat but is simply meant to be what I believe is an objective look at what we've seen by way of evidence not only of the inefficiency of the management of the railway, but of the minister's involvement in an ill-considered attempt, however well motivated, to help certain individuals in his riding.

While the responsibility of all of us as MLAs is to try and help people in our ridings, the minister, in his capacity, had a much wider responsibility. His responsibility, as a minister in cabinet, is to the overall well-being of the province of British Columbia and, at the same time, to the avoidance of conflicts of interest of the very kind he injected himself into. Perhaps that's not quite fair — I'm sure he didn't "inject" himself into this situation. I'm sure he was very keen, if he had the option, to stay right out of it. But at any rate, he showed bad judgment in being dragged into it when, in point of fact, he inevitably finished up with a foot on both sides of the fence. He was supposed to be meeting his responsibility as a director of B.C. Rail, and he was trying to help people in genuine hardship in his riding.

If the minister had not been on the board of B.C. Railway this conflict of interest would never have arisen. He would have been quite at liberty to work for as much benefit as he could on behalf of the creditors living in Dawson Creek and in that area. But I think the minister has shown the same kind of bad judgment on the Ragan Construction settlement as he did on the choice of his immediate staff. That bad choice has already resulted in the need for a judicial inquiry.

We now have a judicial inquiry regarding the B.C. Railway. One has to wonder just how many more pieces of evidence are to be discovered or unfolded in this House surrounding this minister's portfolio and his responsibilities.

This is no attempt to simply pursue this minister and play political games, There is a high question of principle involved in the role of a minister of the Crown involved in the type of meeting where he inevitably compromises his own integrity. I would hope that we don't have to go on and on and on asking the same questions day after day, but I just want to end, Mr. Chairman, by saying that I'll be asking these same questions this afternoon as long as I have to ask them in order to get an answer.

HON. MR. PHILLIPS: Mr. Chairman, I'll endeavour to answer some of the member's questions...

AN HON. MEMBER: Why not answer them all?

HON. MR. PHILLIPS: ...although I find it just a little difficult to understand that pious member for Oak Bay...

MR. WALLACE: Oh, don't get personal!

HON. MR. PHILLIPS: ...who would stoop to new lows in this House to try and weave in the fact that Traders Finance happens to be a creditor of mine — not directly, but through a company — to make sure that I disclosed everything. Actually, it's a company that I don't even have a one-third per cent interest in. He would try and weave that around my endeavour to try and help small businessmen in my constituency when I found them in a situation which he very well delineated. It's just a little much, particularly when that member tries to be so pious and so righteous.

MR. WALLACE: I'm only asking questions. What's the purpose of the disclosure?

Interjections.

AN HON. MEMBER: Oh, that's not the purpose, Scotty! For goodness' sake! You know better than that!

HON. MR. PHILLIPS: I wonder, Mr. Chairman, if we should check and see if that member has ever talked about a hospital, or the medical profession or anything, but I wouldn't stoop that low.

MR. KING: Stand straight up!

[ Page 818 ]

Interjection.

HON. MR. PHILLIPS: Your time will come, Mr. Member for Prince Rupert. Don't get excited.

MR. G.R. LEA (Prince Rupert): Your time is now!

HON. MR. PHILLIPS: Your time will come; you'll have your say.

MR. CHAIRMAN: Order, please.

HON. MR. PHILLIPS: I realize it's difficult for the member for Prince Rupert to be quiet.

MR. LAUK: You're approaching your Good Friday.

HON. MR. PHILLIPS: I was very interested in what the member had to say about the benefits to those firms in the north with regard to natural resources. The member might be interested in knowing that one of the reasons so many of the small businessmen found themselves in the dire financial state they were in because of Ragan Construction was the fact that during the previous two winters most of those companies had nil business in the oil patch in Fort Nelson. A lot of those companies which were servicing the industry and some of the smaller companies in the Fort St. John area had, indeed, gone broke.

I will relate to the member again that he tries to weave a conflict of interest around me meeting with these businessmen. I would have met with those same businessmen had they been in any constituency. The member knows that whether I be a director of the British Columbia Railway, a director of B.C. Hydro, the Minister of Highways or any other cabinet minister, where there are businessmen going broke because they thought they were dealing with the government and they thought they had a secure base, that particular cabinet minister would have to step in and see if there was anything he could do, I do not appreciate that member for Oak Bay (Mr. Wallace), who very seldom, by the way, gets out of Oak Bay — he should go up in the north and spend some time — trying to weave that there was a conflict of interest. You'd better rest assured that if that Minister of Highways let a contract to a contractor anywhere in the province, even in your own riding, and did business with the local merchants.... Although you have very few local merchants or local people serving a service industry in your area, and I realize it's hard for you to come to grasp with that.... But I don't care what area of the province it was in; if the minister of Highways let a contract to a contractor and that contractor went out and bought goods and services from the local people and then the contractor went broke, you can rest assured they would be in the Minister of Highways' office or they'd be on the lawn of the parliament buildings.

We have to have more discretion in letting contracts out. I am very pleased to say that the railway has instituted major capital control proposals in the last year. The latest two contracts negotiated that I mentioned earlier in this House this afternoon included clauses that if quantities exceeded the amounts estimated by IS per cent, the unit prices are to be negotiated. The situation now has changed drastically.

Again, I want to emphasize that in spite of all of the cost overruns and the way contracts were bid and the engineering, that railway line is still going to be built at a very low cost per mile-- in spite of all the charges, counter-charges and talks about engineering and cost overruns and so forth. I think that's something everybody in this House should bear in mind.

With regard to the secured creditors, there was $410,179 paid out to secured creditors. There was $190,216 paid out to preferred creditors and $601,605 paid out to unsecured creditors. I might say just for the members' edification that Traders Finance got $1,820.79, so I hardly think that the fact that Traders Finance might by a very remote manner be a creditor of mine would have anything to do with this settlement. As I say, I very much resent that. Had I owned shares or something in Traders Finance, then the member could have had something to say. Absolutely. But because a person has credit with a certain finance company, to weave an area of intrigue around that is really, really something.

The equipment portion of the equipment bought by the railroad was appraised by, I understand, Finning Tractor.

MR. WALLACE: Will you check that out?

HON. MR. PHILLIPS: Well, I'll have to look it up and I'll get back to you in a moment. If I'm wrong in saying it was Finning, I'll correct myself in just a moment.

AN HON. MEMBER: That's what Phil said.

MR. N. LEVI (Vancouver-Burrard): Mr. Chairman, it's interesting watching the old stag, or maybe it's the old goat there, wrestling on the ground, being very upset because....

Are you having trouble with that one, Mr. Chairman? I'll repeat it, if you like.

He was having trouble with the member for Oak Bay because he lays out a case. You know, I can remember the kind of cases that that minister used to lay out when he was on this side of the House. He used to get up and he was kind of like the high priest

[ Page 819 ]

of calumny, and away he would go.

MR. SKELLY: That minister is a case.

MR. LEVI: There he would be, laying out unfact with unfact, and developing such nonsense and accusation. As the first member for Vancouver East (Mr. Macdonald) said yesterday, he made statements which outside of this House would have been libelous and were proved libelous in a recent case.

He's hurt because the member for Oak Bay attacked him. Then, of course, he in turn attacks the member for Oak Bay and says he never gets out of Oak Bay. I think he's been in the minister's riding recently, as most MLAs have been in his riding.

But I just want to make some reference, before I go on to the Ragan Construction case, to the minister's economic philosophy. He's truly got to be the Milton Friedman of B.C. He stands there and his only contribution to the kind of economic philosophy that we can have in this province is that we are going to concern ourselves with GATT. He has an absolute obsession with GATT. I don't think all the members know what it means, but he has an obsession with it. You know, it's a concern of the national government, but this minister somehow has latched onto the idea that if he has a little committee considering GATT, somehow it's going to improve the economy of this province.

Then he talks about not needing an economic council right now because the suggestion is that he has got all the economic policies at the back of his head. Well, what we want to happen is for them to come out of the back of his head, to the front of his head, onto the tip of his tongue, and then we'll understand what he's talking about. But he rejects the idea of an economic council. I would point out to that minister, Mr. Chairman, that here in Victoria, through the initiative of the second member for Victoria (Mr. Barber), an economic council of greater Victoria is actually being considered by the business community. Day after day in the press there are more people in the business community talking about getting involved in that economic council as suggested by that member.

But our Minister of Economic Development wants to leave it all to Ottawa — to the Economic Council, which is a group of eggheads that meets four times a year and really has no relevance to the kind of economic policy that the federal government gets involved with at all. But this is where he's pinning his hopes — looking at GATT and the Economic Council of Canada. He's an incredible man. He really truly is a Milton Friedman — there's no question of that.

I want to talk a little bit about Ragan Construction because there are some things that concern me about it and I'd like the minister perhaps to enlarge on it for me as to what happened. I agree with the member for Oak Bay that the minister made a very serious mistake when he got himself involved in that kind of discussion. He made a very serious mistake because as a cabinet minister he's got to appear to be above everything. Not only that, but we don't know yet — I don't think he's told us specifically — whether he was involved, as a member of the board, in the decision to pay out Ragan Construction when he was a member. Has he told us that yet? I recall that he couldn't remember. Well, Mr. Chairman, if he was involved in that decision, then that is a very serious conflict of interest.

What I would like to know is: where did the initiative come from in the Dawson Creek area about the settlement for the Ragan Construction? Who took the initiative to approach the Minister of Economic Development, or maybe they approached him simply as the MLA. Did he receive a phone call from his assistant, the stock manipulator who he had to get rid of who was formerly the president of the Social Credit Party in South Peace River? Did he get a call from him saying, "Don, you'd better come up here because the natives are restless and we've got some problems on our hands"? Who initiated the discussions?

Now one can read between the lines and we presume that it was Mr. Lewin, who is a solicitor and also a city solicitor — but presumably that's only a part-time job. Now we all know about Mr. Lewin because Mr. Lewin formerly was a president of the Social Credit League in South Peace River. I know that the minister knows him quite well because back in 1972 when the then sitting member for South Peace, Don Marshall, crossed the floor, there was a meeting up there with Mr. Lewin and Mr. Warren, who was then the leader of the Conservative Party. Yes, you can shake your head, Mr. Chips, but this is how it happened. There was a meeting, and the Minister of Economic Development was at that meeting. He wasn't the Minister of Economic Development then, he was just a private citizen. He had decided to get out of politics in 1969 — he was tired. He indicated then that he was going to support Mr. Marshall. He was going to leave the Social Credit and support Mr. Marshall.

You didn't know that, Mr. Chairman? Well, it's a little bit of history. You can find it in the newspapers. That was a very interesting occasion in 1972 in South Peace. But, lo and behold, after he said he would he turned around and, in a little kind of double-cross, he ran against him. As I recall, he got elected by about 20 votes.

AN HON. MEMBER: He didn't want to come here.

MR. LEVI: Not really. He was reluctant. He had to be dragged down. He came down really to have

[ Page 820 ]

some fun, and he really did have some fun in the three years when he came back.

As I understand it, Mr. Chairman, the initiator of the discussion with the creditors was Mr. Lewin. He's the one who was the lawyer for the creditors. The minister went to a meeting, and we don't know from the minister whether the meeting was public or private, but nevertheless there was a meeting and some kind of proposal for a settlement was agreed to.

Nevertheless, there was a meeting and some kind of settlement was agreed to, or a proposal for a settlement was agreed to. Then we don't know what happened after that, other than that a decision was made by the BCR to pay off Ragan Construction. Now we don't know if the minister voted in favour of that or whether he said to his fellow directors: "I'm in conflict here. It's better that I not become involved in the decision." Of course, we're not going to be able to find that out unless the minister is prepared to table the minutes of the BCR meeting. Of course, he told us yesterday that it's very difficult to get any kind of documents from the BCR. These are all internal documents.

Well, we are going to have to have the minutes of that BCR meeting because we want to know exactly what position the minister took when that item came up at the board of directors' meeting — whether he voted or whether he abstained. You know, this whole business in the north, in Dawson Creek with Ragan Construction, has an old odour of the Social Credit in-group that used to exist under the previous government. We have a minister of the Crown who was a Social Credit member. He has an executive assistant who was a former Social Credit president in the area. We have the man who calls the meeting who was formerly a Social Credit president. So what's going on? Is this a cozy little get-together where they sang: "We've got to save Don so we'll get together and pay them off"? How much pressure was put on?

You know, he stands in this House and he reads from documents that he's not even prepared to table. He knows the rules about it in this House: you quote from a document, you table it! If you're not going to quote from it, then don't bring it into the House. That's the way you have to behave in terms of that kind of information. Let us know what the facts are. But there is no way that he wants to tell us this. He keeps going around and around, and every day he lets a little bit more out.

His deputy is here, because the minister is out somewhere. I don't know where he is. Perhaps he could make a note of the questions that I would like him to answer.

Was he at the board meeting of the BCR when the BCR decided to pay Ragan Construction over $1 million? Then I want to ask him a second question. After reflection, is he prepared to stay with the statement that he made in reply to a question from the first member for Vancouver Centre (Mr. Lauk) which said: "Supplementary to the Minister of Economic Development: Does the minister have any business or political association with any principal of the company known as Doug Ragan Construction Limited?"

Now I watched the minister answer. He waited for a while and then he said: "Not that I can recall immediately. I'd say the answer is no. Not that I recall. No." Well, does he have a fresh recall? Is he sure that he had no business or political association with any of the principals of the Doug Ragan Construction company?

Oh, he's back. I was getting worried about him, Mr. Chairman. He disappeared but he is now back.

Perhaps I might go over, Mr. Chairman, for the benefit of the minister, the questions that I just asked his deputy to write down — we've only got to the second one anyway.

The first question was, Mr. Chairman: was the minister present at the board meeting of BCR when the decision Was made to pay Ragan Construction Limited over $1 million?

The second question is: after reflecting, is he prepared to stick to his statement that he made in response to a question by the first member for Vancouver Centre and that question was: "Does the minister have any business or political association with any principal of the company known as the Doug Ragan Construction Limited?"

The minister replied: "Not that I can recall immediately. I'd say the answer is no. Not that I recall, no."

Now that you've had time to reflect on that, Mr. Minister, through you, Mr. Chairman, can you tell us very specifically whether you are still staying with that statement?

The next question is: Was the minister aware, when he met with Mr. Lewin — and I presume he was at that meeting with Mr. Lewin, either the public or the private meeting — that Mr. Lewin was a shareholder in Keen Construction? Was he aware of that? The Keen Construction people had recently reached an agreement with the government. Perhaps the minister would tell us whether his former business sold any equipment to the Ragan Construction company. Are they, in fact, on the list of the creditors — the preferred creditors, the secured creditors or the unsecured creditors? Of course, it would help us if he would table the whole document. Then we wouldn't have to do this one by one.

Prior to the meeting that was held in August in Dawson Creek, had the minister eve r spoken with Mr. Ragan? After all, Mr. Ragan had been in business in that riding since 1969. He had lived there for some time. Had he spoken to Mrs. Ragan or Mr. Wheat? Did you speak to Mr. Wheat, who is one of the shareholders in the company? Is Mr. Wheat a member

[ Page 821 ]

of the Social Credit Party? Is he somebody that you know, through you, Mr. Chairman?

Interjection.

MR. LEVI: Ah-ha! Do you see that? We get a crack from the side: "It's none of your business!" It's none of our business, eh? That's the way it is, isn't it? You pay out $1.2 million to a company, the minister is present, and he says, "It's none of your business!" Well, it is our business. That's why we are here — to get at the facts. Yes, we'll get at the facts. It will take some time because this minister is just standing there and stonewalling, but we'll get at the facts. Slowly we'll get at the facts, and then we'll get at the other facts later on.

"It's none of your business!" Well, isn't that a remarkable statement from a minister of the Crown! "It's none of your business!" Well, that shows a great degree of responsibility towards the taxpayer. "Why should you know what's going on? We'll make all the decisions. We're in the saddle now. You don't have to know anything." That's why we are here — to question these kinds of decisions.

Yesterday we had the Minister of Economic Development stand up and tell us about open government, how it's good for the province that now they have a new government that is going to be open. He talked about letting the sun shine in. Well, we are going to have to keep stretching, and pulling, and pushing until eventually we get the answers.

You tell us, Mr. Minister. You know you can get it over with. Be candid, and then we'll get onto something else. But you're not being candid. You keep avoiding it. Give us the list of the preferred creditors. After all, the money was paid by the taxpayers. They have a right to know what money was paid out and to which people. They have a right to know that, because that is the position that minister took, Mr. Chairman, when he was over here. He demanded to know everything. Well, we demand to know everything. The information was forthcoming from that side when we were over there, and the information should be forthcoming from you now that you're over there.

It is my impression that this minister had enough trouble when the staff that he had around him was dabbling in the Grizzly affair. But it would seem to me that this affair now, in relation to Ragan Construction, is one that does have to be looked into. It does have to be looked into because we can't have the kind of situation where we have the minister standing up and quite rightly saying that he has to have a concern about small businessmen. That's quite right, but he can't say that if he happens to be a member of the board with which that group is indirectly doing business. He cannot do that; that is not the appropriate behaviour of a cabinet minister.

1 want to cover just one other item with the minister which relates to the discussion yesterday in respect to the Grizzly gas reserves. We still do not know, although we have to take it from the minister, that some assessments were done by the B.C. Petroleum Corporation staff, although they don't have that kind of staff to do it. Perhaps they went to the Department of Mines and Petroleum Resources. I would like to bring the minister's attention to a statement that appeared in the Vancouver Province on January 27. This relates to a release out of Ottawa dealing with Foothills Pipe Lines. I would just like to quote from it, Mr. Chairman. It is in relation to reserves:

"Foothills Pipe Lines Ltd. has chopped nearly two trillion cubic feet from its estimate of natural gas reserves in the Mackenzie River delta.

"The company, one of the two seeking permission to build the northern pipeline, says that it is filing with the National Energy Board that it now estimates the reserves at 5.7 trillion cubit feet compared to 7.5 trillion cubic feet a year ago.

"Figures in the filing include gas already discovered as well as estimates of probable or possible future additions.

"Earlier this month, the other applicant for a pipeline, Canadian Arctic Gas Pipeline Ltd. put reserves at 6.7 trillion cubic feet, which was up slightly from 6.2 trillion. Much of the drop in the Foothills estimate results from lower forecasts of natural gas."

Now the question is that with Foothills Pipe Lines, there was a difference of two trillion cubic feet between the original estimate and the actual one that they filed with the National Energy Board. As I understand it, with Grizzly we are dealing with something around two trillion feet. The question is: how accurate are they in terms of the assessment they have done on the reserves? Because when they go to the National Energy Board and file the statement on reserves, is that the figure that they are going to go with? Is the government prepared to give us that kind of information or do we have to wait for the Premier to come back because he did indicate to the House that he would file it?

But the first member for Vancouver Centre (Mr. Lauk) was concerned about the estimates. He was concerned about it because if there isn't sufficient reserves then the whole operation does not become economical. But the minister has not really dealt with that in his statement. He should tell us on what basis these estimates of reserves were made. Give us more specifics. Don't tell us that BCPC did it when we know that they don't have any staff to do it. We need to know this; it's important for us to be able to make this kind of estimate because they're presumably

[ Page 822 ]

going to put a great deal of money into this effort.

The other question, of course, relates to the inquiry that's going on with respect to a lot of people down on Howe Street who appear to have made a great deal more money on this. But that's something we'll have to wait for in terms of the inquiry.

I would appreciate, Mr. Chairman, if we can get from the minister the answers to the questions I asked him in relation to whether he knows any of the principals in Ragan Construction. Is he prepared to stick with his statement that he thinks not? Was he present at the BCR board when the decision was made? If he was, how did he vote, or did he abstain, as he should have done? Did the minister speak with anyone before that meeting? Did he speak with Mr. Ragan or Mr. Wheat or Mrs. Ragan? Perhaps he'd tell us exactly what took place and what his role was at the meeting, and what he reported back to BCR.

HON. MR. PHILLIPS: Very interesting to hear these questions from the $100-million man over there. The $100-million man blows $100 million with one swipe of the pen. But all of a sudden he's so interested in a very small amount of money that went to some very small businessmen.

MR. LEVI: Oh, what's a million, eh?

HON. MR. PHILLIPS: That's what you said what's a million? — when you blew $100 million at one crack of the whip, and never even batted an eye. Now all of a sudden he's very interested. I just want the record straight. I noticed how that member twisted around this "none of your business" deal. I did not state that.

MR. LEVI: I didn't state that.

HON. MR. PHILLIPS: Oh, yes you did!

MR. CHAIRMAN: Order!

HON. MR. PHILLIPS: Mr. Chairman, the member can sit over there, but he said that coming from a minister of the Crown, it's none of your business. I did not state that.

MR. LEVI: You were not in the House.

HON. MR. PHILLIPS: I realize that it's very much of his business exactly, and that's why I've answered the question.

MR. CHAIRMAN: Order, please, hon. members. I will just read a citation out of May's 16th edition. At page 458 the good man says: "Good temper and moderation are the characteristics of parliamentary language, and parliamentary language is never more desirable than when a member is canvassing the opinion and conduct of his opponents in debate." I would suggest that that's right now, and perhaps we could have a little more order in the House.

HON. MR. PHILLIPS: Thank you very much, Mr. Chairman, for your guidance. I just wanted the record straight that I did not say that to the member.

The answer to question No. 1: was there a board meeting and was I there? Yes. Did I vote? As I recall, yes, I did.

MR. C. BARBER (Victoria): How did you vote?

HON. MR. PHILLIPS: Does the minister have any business connection with Ragan Construction? Well, you know, the question is really redundant because the member knows that any business connections I have after selling most of them out on becoming a cabinet minister are lodged securely with National Trust, in trust, and I don't have any operating businesses. The member knows that, but I'm sure I understand why he asked it.

MR. L. NICOLSON (Nelson-Creston): The minister has shown some willingness to answer some questions. Yesterday I asked some questions which I think should be answered.

The minister, last year, refused to tell this House a fact — that he was one of the directors of Swan Valley Foods. It wasn't until we got to the Minister of Labour (Hon. Mr. Williams) and to the Premier that the fact came out that this minister was on the board of directors. I asked him this yesterday; he heard it yesterday. He talked, looked knowingly and winked at the Minister of Agriculture (Hon. Mr. Hewitt). The minister has been there for some time, with Swan Valley, and I asked him when the last general meeting of Swan Valley Foods was held. Was there an election of officers?

HON. MR. PHILLIPS: The answer to question No. I is: the last general meeting was held in Creston on February 3. Yes, there was a financial statement. Yes, there was an annual general meeting. The directors of the company are the same as they were last year: Mr. Powrie, Mr. Piper, Mr. Peterson, Mr. Phillips and Mr. Williams.

MR. NICOLSON: And officers?

HON. MR. PHILLIPS: That's the total board of directors.

MR. NICOLSON: Through you, Mr. Chairman, is there no president or secretary of the company as well?

[ Page 823 ]

HON. MR. PHILLIPS: Mr. Chairman, the member knows that I'm the president of Swan Valley, and the secretary is the law firm that we've had before.

MR. NICOLSON: There was the financial statement. I'd like to ask the minister, through you, Mr. Chairman, if he'd make that financial statement public, if he would file this, or how soon he intends to file it.

Is the government still pursuing the sale of Swan Valley Foods? If they are, is it through the minister's office, or through the B.C. Development Corporation, or through some agent? I'd like to have some details on that.

HON. MR. PHILLIPS: Yes, Mr. Chairman, I'm sure that all of the people of the province will very shortly see the financial statements of Swan Valley. Yes, I'm sure of that.

MR. NICOLSON: Well, we certainly know, Mr. Chairman, that the government has been carefully working very hard for over a year to create every obstacle in order to prove that at least one of the operations in which the provincial government was engaged at the time that they came to office was in financial difficulty. They took a company when it was engaged in marketing, and took a company which had a completed factory — all the capital costs had been completed — but didn't allow it to turn a wheel.

Yes, we have heard, Mr. Chairman, the dark warnings from the Premier, which came from the $100-a-plate dinner, referring to a Bricklin. It's taken that minister just over a year to perhaps turn Swan Valley into a Bricklin.

Now he's chuckling right at this very moment, Mr. Chairman. But I'd like to say that the people of Creston, the people who looked forward to 104 jobs in that area from this, don't see anything to chuckle about; the free-enterprise people who invested in this corporation certainly see nothing to chuckle about.

I would like to find out from this minister how he is going about the peddling of the government's interest in Swan Valley Foods. Is it through the minister’s office? Is it through BCDC, or has he hired a consultant or some legal firm to peddle this? Who is approaching people? How many people have been approached? How many people have been interested? What type of activity has been going on?

HON. MR. PHILLIPS: I'm not really just sure how to answer that member for Nelson-Creston, because if he only knew.... But I will assure you and the House at this time, Mr. Chairman, that every effort is being made with regard to Swan Valley to protect the taxpayers' money. We have two firms working on Swan Valley. I don't have the exact number of the firms that have been contacted. I don't know if it's 100 or 120. I haven't got the exact figure here at my fingertips, but I want to assure the House that all of the facts and figures and the entire story of Swan Valley will be related to the public of British Columbia in due course.

One of the reasons, Mr. Chairman, that I don't want to say more at this time is there are ongoing negotiations. I just don't want to prejudice those negotiations.

MR. D.F. LOCKSTEAD (Mackenzie): I'm going to change the tack of this estimate debate, Mr. Chairman. I have a few items I wish to discuss, and some questions that I wish to ask the minister on matters relating to my constituency, and perhaps one or two other matters before I sit down.

That minister has not been too visible in my riding in terms of economic development. There hasn't been a great deal of economic development; as a matter of fact, there has been a downgrading of development in my riding, a real downgrading.

First of all, Texada Mines, which is located on Texada Island, as you well know, Mr. Chairman, shut down last December 17, 1976. Forever! There were 180 jobs gone!

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources): No more ore.

MR. LOCKSTEAD: The Minister of Mines says no more ore. Well, that's debatable.

But the fact of the matter is, Mr. Chairman, that what I am discussing here is not the fact that the mine closed — the mine is shut down. What I am discussing here, or trying to discuss, is what the Minister of Economic Development's intentions are or what he has done in terms of future economic development. And to the Minister of Mines, Mr. Chairman, I'll be discussing the content of how much ore was left underground under his estimates. So you'll get your turn, Mr. Minister.

HON. MR. CHABOT: What are you waiting for?

MR. LOCKSTEAD: Anyway, the economic impact on a small community like Texada Island, when you lose 180 jobs, right now is horrendous to witness. I wish the minister would come up there and have a look. For example, I would suggest there are at least almost 200 people unemployed, in spite of the fact that many of the miners who were employees previously employed at Texada Mines have gone to other locations in the province and the Yukon and places like Sparwood, perhaps. The impact of that kind of thing is that it splits families, Mr. Chairman. It splits families. We have husbands and fathers working all over various parts of the province. There are about 40 people who have left the mine now and

[ Page 824 ]

taken jobs in other communities. It does break up families.

There are now 43 homes, I was told yesterday, for sale on Texada Island, and real estate values are very good there at the moment. For some of you people who speculate a little bit in real estate, just go up and have a look. Good waterfront property. This is a commercial.

I would like to know from the minister, and hopefully get some answers from him: Has he had anybody from his department up to Texada Island? What are the future economic prospects for that island? Are there other mining properties on that island that may be developed? Are there other industries on that island that could possibly be developed?

As Texada Mines pulls out, they will be leaving a lot of established things like machine shops, for example, fully equipped. They can make anything you can possibly imagine in that machine shop. It will likely be torn down and taken away. Perhaps that minister's department should be looking at the possibility of an industry, a small industry, that could start utilizing that well-equipped machine shop and some very highly trained and capable people there now. A few have left, Mr. Chairman, but most of them are still there.

In that area alone I think that if the minister hasn't done something about that, hasn't taken an interest, it's about time he did. Certainly there hasn't been too much activity on Texada Island that I've been able to see from that minister.

Finally I'll say — and I am sure the minister has seen this: "Economic Prospects Bleak for Texada Island." But do you really know? I don't think you've done anything. You haven't had a study; you haven't looked at the situation. I am not sure you even care, as a matter of fact.

HON. MR. CHABOT: Don't be so miserable.

MR. LOCKSTEAD: Mr. Chairman, I am always nice.

Powell River is the largest single community in my riding. Right now there are 200 less jobs at the MacMillan Bloedel pulp mill in that area. There wasn't a massive layoff with a whole bunch of people just cut off. Because of so-called modernizing of the plant, they put in a thermal-mechanical pulping process. The upshot of the whole thing is that there are still 200 less jobs. That's direct jobs, plus possibly 500 to 700 indirect jobs affected in Powell River and related industry. So once again there are a lot of homes, and real estate values are down.

I really would like to know if that minister or his department has taken an interest in that locality. Have they looked at alternate forms of industry? It's really a one-industry town, Mr. Chairman, and I think that we should be looking at the possibilities of introducing other industries into that community. The Powell River Chamber of Commerce and the Powell River T.I.C. have undertaken to do an economic survey on their own.

You may be interested to know — and I don't intend to go into the various aspects of that survey at the moment — what bothers me is in a recent article in the Powell River News, dated February 7.

"Karen Boyer, co-ordinator of the Powell River Economic Survey, says she has been in contact with the Ministry of Economic Development. 'But my feeling is that Powell River is not a priority area with the government,' she says, 'and they are looking to the east and north for development of raw materials. That came out in the mid-coast report.'"

So it would appear that that minister, Mr. Chairman, doesn't even care. The population's dropping. The potential for economic development is there. There is great potential. Part of the problem, of course, is that government's transportation policies.

The article refers to the mid-coast report. I have a copy here and I'm sure the minister's read it. I'm not going to read it into the record, Mr. Chairman. In any event, the one aspect that you find going right through the report is transportation services. No rational economic development can take place on this coast without proper transportation services. The fact is that service, despite Social Credit promises to increase the frequency of ferry sailings, improve transportation services....

Interjection.

MR. LOCKSTEAD: Election promises that they elected you on, Mr. Minister, through you, Mr. Chairman. Promises that haven't been kept. In fact the service has deteriorated to the worst it's been in 60 years.

So we have places like Powell River that are suffering of a direct result of your ministry and your government, Mr. Minister.

You know, in the northern part of my riding which is really the central coast area.... I should perhaps explain some of the economic opportunities, economic, development opportunities, that exist in that area. You know, with a proper transportation service, I firmly believe that we could have a sawmill capable of producing a half-million board feet of timber a day in the Bella Coola Valley — an environmentally sound project.

If you could get some money out of the Minister of Highways (Hon. Mr. Fraser) — because we do need an improvement of highways through that valley — I think the chances of utilizing Rivers Inlet timber and Chilco Plateau timber in that valley would employ

[ Page 825 ]

perhaps 60 people. There's a very high unemployment level in the Bella Coola Valley at the moment. And I think that would be a good project, tied in with the Ocean Falls complex, Mr. Minister.

Talking about Ocean Falls, the government has before it now a number of studies based on the modernization and upgrading of the Ocean Falls area. There are a number of options available to us. I hope to discuss this matter further under the Minister of Forests (Hon. Mr. Waterland) . But the fact of the matter is, Mr. Minister, you should be aware that, instead of 400 people being employed at Ocean Falls, with a proper, modern upgrading programme in that community we could easily have 800 to 1,000 people.

Of course, I do agree and you're well aware that, once again, transportation services have to be upgraded to that community. It's worse now than it was even two months ago when the provincial and federal governments were subsidizing a terrible service into that area. Passenger service by water is completely cut off at Ocean Falls at the moment. People have no way of getting in or out of that community at all, except to fly. And at this time of year, as you well know, we go for sometimes two or three weeks on end without an aircraft being able to fly into that community. But you'll be hearing more about that as well, Mr. Minister.

Also, there's a large Indian community, Mr. Minister, called Bella Bella in the northern part of my riding, with about 1,200 native Indian people living in that community. They've been doing a marvellous job and have received a considerable amount of help from the federal government in upgrading and utilizing their own people. They've put in a boat works, built a hotel, upgraded the wharf. They've done a whole number of really good projects in that community. And they've done a great deal of it on their own, Mr. Minister. But the fact is that fishing is the main industry — it should be the main industry — in that community. A study was done approximately a year ago, in regard to the fishing industry and how they could create self-sufficiency in employment in that community. As far as I'm aware — and I'm sure your department has a copy of that study — no action has been taken on that matter, and nothing has been done. So I'm asking you now, Mr. Minister, if you're aware of that study, if any action has been taken or if no action has been taken. Well then, I'd like to hear from you on this.

Mr. Minister, approximately a week ago I suggested that there should be a 30 per cent decrease in ferry fares. I'm sure that when you go to cabinet, Mr. Minister, and when you go to the Treasury Board, you'll support this request of mine. You're interested in economic development, and I know that a 30 per cent decrease in ferry fares will stimulate the economies of Vancouver Island and the Sunshine Coast areas which have been very depressed since your government's doubling and tripling of the ferry fares.

I know that I can count on your support and I know that you're going to get up in the House here in a little while, Mr. Minister, and support me publicly on that issue.

I have a few notes here on the proposed Kitimat oil pipeline business, but I think I'll just leave that for the moment. Before I sit down and await the minister's answers...that minister has not responded to questions in this House over the last three or four days.

There are over 100,000 people unemployed in this province, many of them in my own riding — 18 per cent unemployment, by the way, Mr. Chairman, in my own riding.

AN HON. MEMBER: Under Social Credit, you're lucky!

MR. LOCKSTEAD: Yes! And this after this government campaigned to get B.C. moving again. It's been said in this House many times in the last few days — moving backwards. People out there in the province are picking up the phrase: Got B.C. moving again — moving backwards.

AN HON. MEMBER: Moving for millionaires.

MR. LOCKSTEAD: This minister had a job at his disposal when he took office. In December of 1975 he had a job available paying $29,000 a year. For that kind of money he could have hired somebody substantial, somebody who could make a genuine contribution to the people of British Columbia, someone who could have drafted real responses for him instead of the non-responses we've been getting from this minister.

But who did he hire, Mr. Chairman? Do you know who he hired? He hired a political henchman, a practitioner of dirty tricks. That's right — for the Premier. He's a man well known for at least a year before the hiring as one who didn't know right from wrong. Do you remember the doctoring of the cheque of the Minister of Human Resources? That's well documented in the Hansard of this House. Arthur Weeks did not hire himself, Mr. Chairman; this minister did — possibly at the instruction of the Premier, I don't know.

Well, Mr. Chairman, I know hundreds of constituents of mine who would be very delighted to take a job for $29,000 a year, and they wouldn't have to resort to dirty tricks. I bet you we'd get better answers than we've been getting in the last three or four days out of that minister. No judicial inquiry can absolve that minister of the responsibility of hiring that henchman, no matter what its findings.

[ Page 826 ]

No judicial inquiry, no royal commission, no Attorney-General's investigation can absolve that minister from his utter failing to do his job. If this minister had any understanding of the responsibility of his office, any vague notion of what the people in my constituency are suffering because of the policies of that government and that bungling, he would have resigned long ago.

Mr. Chairman, my constituents cannot live on long-range promises. That's what we're getting from him — long-range policies. What are those policies? Let's hear some definitions. What we need now is jobs!

SOME HON. MEMBERS: Jobs!

MR. LOCKSTEAD: Right! The 18 per cent unemployed people in my riding want jobs now, Mr. Minister. Let's hear it from you; let's hear some answers.

SOME HON. MEMBERS: Jobs!

HON. MR. PHILLIPS: I was very interested in listening to the remarks of the previous speaker. I must ask him, however, why he did not take the offer from the Minister of Mines to come to the minister's office and sit down and go over all of the details of Texada Island so that he would be informed of the problems asked and what some of the solutions would be in the future.

MR. LOCKSTEAD: Mr. Chairman, I have those details already.

HON. MR. PHILLIPS: Well, maybe you should sit down with the Minister of...it would be now the present Minister of Mines, but I do know you were invited by the previous one. I just wonder why that member has never come to my office, and sat down and explored some ideas with me as to what he could do for his constituency.

You know, a lot of the members come into my office and sit down and we talk about what are possible solutions to some of the problems.

Interjections.

MR. CHAIRMAN: Order, please, hon. members. You have asked questions of the minister and he is seeking to give his answers. Perhaps we could give him the courtesy of listening.

HON. MR. PHILLIPS: The member said, Mr. Chairman, that there were no studies done in his constituency. The mid-coast-North Vancouver Island regional study was published last fall, and the purpose of that is to identify opportunities and to create dialogue. Now we realize the problems of transportation in your community and that is why we are working so diligently with Ottawa. That is why we are working so diligently to solve some of the problems in the member's riding. But I invite the member to come up and sit down with me, and let's explore some of the avenues so that we can help him with some of the problems he's got in his riding.

MR. LOCKSTEAD: First of all, I would like to correct the minister. I did not say there were no studies done. The problem is that there were just too darn many studies done and not enough action. That's the problem.

MR. BARRETT: The do-nothing minister!

MR. BARBER: Mr. Chairman, this minister has conspicuously declined to answer any of the questions save those for which he has a clever answer. He does not answer the questions about whether or not he received campaign donations from Quasar or August or Cheyenne Petroleum. He does not answer the questions about his business associates, and he seems not much to like the questions about who, through personal or political connections, might be understood to have benefited from various of the settlements previously and presently being offered by B.C. Rail.

During debate about half an hour ago, one of the members opposite — one of those in the back bench — when the request was made by the member for Vancouver-Burrard (Mr. Levi) to learn some of the names and establish some of the business and political connections, commented "None of your business." Do you remember that, Lyle? You yelled out: "None of your business." Now that's a most interesting comment.

HON. MR. PHILLIPS: On a point of order, I just want to have the member rectify that as I said I was not responsible for that quote.

MR. CHAIRMAN: Hon. members, the practice of the House is that if a misquote can be cited, the time to make the correction is not during the member's speech, but after he has concluded. Perhaps we could observe that practice.

MR. BARBER: Had the minister been listening, he would well have realized that what I was pointing out is that the quote did not come from him; it came from the member for Esquimalt (Mr. Kahl), Were the minister listening, he wouldn't have wasted the time of the House with his spurious point of order.

It was a very interesting comment representative of a very interesting point of view held by members opposite. It was a very interesting comment because

[ Page 827 ]

it points out an attitude held by members of that coalition about who should be understood to be able to do business with this government and who should end up on someone's blacklist instead.

MR. KING: Lyle Kahl, eh? "None of your business"?

MR. BARBER: None of your business was the comment when the question was raised about who, for political or personal reasons, may be granted the present financial favour of the BCR. Now I think that's especially interesting, because later on in the estimates of another minister we are going to be raising the case of a curious development in a local riding of southern Vancouver Island proposed by a developer who is also the vice-president of the Social Credit constituency association, a Mr. Ridley.

MR. LAUK: Politics!

MR. BARBER: We are going to be talking about the history of that development and the extent to which, apparently, one gentleman of this House went to bat for him. Indeed, he went so far as, at least on one day, to make a phone call from that developer's office to the office of a civic official...

MR. BARRETT: No!

MR. BARBER: ...from the developer's office — not even from his own phone, but from the developer's phone — proposing a certain decision that should have been made, but was not made, fortunately, to remove certain lands from the agricultural reserve. So we are going to be talking about the attitudes of that whole coalition.

MR. CHAIRMAN: Hon. member, any material that you'll be using in this particular debate will have to be relevant to vote 79.

MR. BARBER: Yes, it is.

Interjections.

MR. BARBER: Oh, be careful! We know a great deal more than you realize. Be very careful!

AN HON. MEMBER: Are you feeling guilty, my friend?

MR. CHAIRMAN: Hon. member, I am sorry to have to interrupt you again, but may I ask the Leader of the Opposition (Mr. Barrett) to return to his own chair?

MR. KING: Tell them to quit interrupting over there.

MR. BARBER: We are concerned, when reasonable inquiries were made about who stands to benefit from BCR and other government decisions, that we get the response from at least one of the backbenchers — and presumably from more but they were not so foolish to speak up — "none of your business."

There is a response we do need, however. We have been asking for it for four days and the minister has yet to give it. It's a response to a series of questions put by myself yesterday, and the day before, and the day before that, in this House and outside this House, about the fate of Oakland Industries and the employees — at maximum, 300 in number — who are presently out of work because of the failure of that company. We are waiting for word from the minister. Has he made a decision? Have the meetings resulted in anything? What have been those results and when will they be announced? How many people will be put back to work? How soon may that business open up? How soon will the minister give a commitment to the people of Victoria?

He's making notes, I see, ripping up his papers. How soon will that minister make a commitment to the people of Victoria that for once he has taken an initiative and for once has some good news for the people of this riding? The jobs of some 300 people are at stake.

For four days the minister said: "I'm meeting, I'm considering." That's reasonable enough; that's fair enough. Of course he should do that. We want to know when he will be prepared to make an announcement. I continue to get phone calls every day at my office and every night at home. Those people want a decision, and so does this House. What is the minister prepared to do in order to save 300 jobs at Oakland Industries? That's not none of our business, as I'm sure the Chairman recognizes.

The minister made another statement earlier in this debate. He said that the opposition has yet to come up with one positive proposal for job development and job creation in the province of British Columbia.

AN HON. MEMBER: Yes. Resign!

MR. BARBER: That is, of course, nonsense, and the minister knows it. As he is well aware, a number of days ago I first mentioned a proposal for a Greater Victoria economic development council on which a group of us in Victoria are presently working. I referred on two occasions in this House to that proposal, and any attempt by the minister to pretend that this opposition is unwilling to make positive proposals for economic development simply cannot be believed.

[ Page 828 ]

I also promised several days ago that I would release at a convenient time the details of this proposal, and I intend to do so now. I hope the minister realizes that in doing so I'm pointing out that this particular opposition, as the result of the complete failure of that government to do anything but blunder from crisis to crisis and stagger from scandal to scandal.... To end up seeing that particular minister's department run by the RCMP in several inquiries.... It means that we in the opposition have to take responsibility for something creative and something positive. We've done that.

I'm prepared now to report on the details and to ask the minister to criticize them, to point out where those details are inadequate and fall short of the job — he's paying attention, I'm sure, to every word of the debate — and to indicate what response he will make, if any, when, as I predict, a proposal comes forward very shortly inviting the participation of his ministry in a proposed greater Victoria economic development council.

One of the problems in greater Victoria, apart from the fact that we suffer from some of the most stupid and primitive fiscal decisions any government has ever made, is that this particular community has taken too much for granted for too long. We presume that the visitors will keep coming, that the pensioners will keep spending, that the civil service will keep reproducing and that the economy of greater Victoria will keep expanding without stopping. But it's only in the light of the failure of the tourist industry last summer, and in the light of the repercussive effects that failure has had on the economy as a whole, that we have begun to realize just how fragile the economic balance is in this particular community.

In the last six months in my riding we've lost 26 jobs at the Alberta Wheat Pool elevator; 65 jobs at the Ste Michelle winery, which is closing down; 112 jobs at the Royal Jubilee Hospital. Our local plywood plants are presently operating at 65 per cent capacity. We lost Bapco Paint a number of years ago, and hundreds of people were thrown out of work. Tonight we stand on the eve of the loss of 3 00 jobs at Oakland Industries. There are some 9,800 people out of work in my riding, and in the spring B.C. Hydro's gas division will dismiss another 65 persons.

AN HON. MEMBER: Shame!

MR. BARBER: We can't afford to keep on losing these jobs, Mr. Chairman. We're already anemic enough; we cannot afford to be drained altogether. We wait for some positive initiative to be taken by that minister in regard to the failing economy of Greater Victoria.

Most tourist businesses in Victoria lost heavily last year; British pensions are worth less and less to United Kingdom pensioners who live here on them; civil service positions are being left vacant; cutbacks in agencies of government are well-known throughout the capital city; bankruptcies in Victoria, I am informed by the chamber of commerce, are running higher than the provincial average, which is itself running higher than the national average.

We're in another difficult position, Mr. Chairman. As you know, the coalition government has refused to pay its fair and full share of property taxes on the properties it owns in the city of Victoria. They promised they would do so, but they have failed completely to do so.

Not only are we out of work, not only is unemployment running at 10 per cent, but the government itself is contributing to the economic problems of the whole community by failing to pay its property taxes in the city of Victoria. Therefore, it seems reasonable enough for a responsible opposition to come forward and propose reasonable and positive alternatives. We have done just that. They are in the works now, and I'd like to bring you up to date.

I met at lunch two days ago with the second-in-command of one of the major financial institutions presently operating in greater Victoria. They have assets in excess of $80 million; they do transactions every year in excess of $280 million. They are a major financial institution. Their board of directors has considered, and I understand will shortly announce, their formal endorsement of this proposal for a greater Victoria economic development council. They're interested; they're committed; they're concerned. They're willing to come forward and meet with business and government, with labour and industry, with people from the University of Victoria, and with interested citizens to create what we so badly need, which is a strategy for economic recovery in the greater Victoria area.

I'm also pleased to announce that I had lunch just today with a major real estate developer in the city of Victoria. He's not one of our party's supporter, he's one of theirs.

AN HON. MEMBER: Name names!

AN HON. MEMBER: Who paid for it?

MR. BARBER: He paid for it, I'm happy to say, and it cost him $5.40.

SOME HON. MEMBERS: Oh, oh!

MR. BARBER: I'm happy to have lunch with this particular businessman anytime because today and on previous occasions he has expressed his concern for the fate and for the future of the economy of greater Victoria. He, too, has expressed interest in this, and I look forward to his participation.

1 met this morning for two hours with an

[ Page 829 ]

employee of the Canada Manpower organization and, in particular, a director of the Canada Manpower adjustment programme branch. This particular gentleman had already been quoted in the press and will, this afternoon, be quoted again. He will be announcing that he expects shortly to be invited by the Capital Regional District to sit down and to work, on the basis of this proposal, on a contract and an agreement with the federal government, which hopefully the provincial government will agree to co-sign, to develop an organization that itself would develop this strategy for recovery that we so badly need.

There is progress today in the city of Victoria, Mr. Chairman. I expect to be meeting shortly with Victoria Labour Council, and I'm informed privately that various leaders of that organization are also willing to get together. I've already met with various members of the executive of the chamber of commerce and spoke recently to the tourist bureau of Victoria. All of them are agreed that we need a strategy; all of them are agreed that we need to bring together some of the best minds of our community to talk about the problems we have and in a co-ordinated, serious and tough way to begin to plan for the future.

Now that's what this particular opposition is willing to do, Mr. Chairman. Of course we have criticisms of the mistakes and policies of that government; of course we have things to say about their failures. Equally importantly, we have things to say about what we believe is important and must be done. And when they fail to do it, with all of the armaments and instruments and power of government, then we. as individual members of the opposition, will try to do it ourselves. Of course we will. And I will continue to outline these proposals.

We need a strategy for recovery that first of all tells us what the problem is. I'd like to report that a number of weeks ago an alderman in the city of Victoria, Mr. Murray Glazier. an engineer by trade, presented a resolution to the Capital Regional District which would "organize the production and presentation of research papers as a basis for forums and seminars in the community to identify the realities of the region's economy and to identify ways for improvement."

It identifies a major need, Mr. Chairman, of which I'm sure this minister is aware. We require a body of research and documentation that tells us how our local economy works right now, that tells us where the potential for development really lies, and that tells us how we can best meet that potential. We need, right now, an inventory of land and facilities and people available to the task of promoting clean, important, compatible secondary development in the capital region.

I believe that minister's department has a responsibility to cooperate, and I hope that when this organization is created, that when these people come forward, he will agree to meet with them and he will agree, if he feels it compatible with his department's terms of reference, to help support it in a number of ways.

Initially, one of those ways must surely be the provision of that information. In Victoria, those most important questions have never even been asked, let alone answered in a coherent and scientific fashion. We need those answers, and on the basis of them we need to do a great deal of original thinking.

In Victoria a number of people — by no means just one member of this Legislature — have been doing a great deal of discussion, have been undertaking a great deal of study themselves. They include the mayor of Victoria, Mr. Michael Young; the chairman of the Industrial Development Commission of the chamber of commerce, Mr. Jeremy McCall; the chairman of the Capital Regional District, Mr. Jim Campbell. These people, and many others, have been talking about the need for an economic development strategy in the capital region. They have been talking about the possibility of employing an industrial development commissioner, most likely to work with the cooperation of and in the offices of the Capital Regional District. I think that's an extremely important step, and it's one which I hope the minister will recognize and will, at an appropriate time, support and endorse in a forceful and positive way.

But it has occurred to a lot of us that no one person can by any means do this job. No one commissioner sitting in an office can read all of the reports, entertain all of the advice, consider all of the criticism, develop all of the ideas and enact all of the proposals into concrete reality. No matter how gifted such a person may be, he needs people around him who can criticize. He needs people around him who can analyze and provide ideas — constructive, thoughtful and original material — that he or she could work on. As my colleague for Mackenzie (Mr. Lockstead) has already pointed out, the people of Powell River are presently engaged in such a development. I hope that before the end of this session the people of Victoria will be engaged in such a development.

I think it's important that we take the concept of development of a strategy beyond the idea that it should be restricted to the work of one person, to the work of one commissioner, and, indeed, propose a greater Victoria economic development council. I suggest that such a council be headquartered at the Capital Regional District and that it be composed of representatives of municipal and regional government, of the Chamber of Commerce and the tourist bureau, of the Victoria Labour Council and the University of Victoria, and of the provincial Ministry of Economic Development.

[ Page 830 ]

1 believe, Mr. Chairman, that minister's department has a most important and creative role to play in the development of a strategy for economic recovery in greater Victoria.

I would recommend that this council meet at least monthly and that, in doing so, it act as the advisory and co-ordinating body for the research, the inventory and the economic studies required, for the meetings and hearings that will be necessary to gauge public opinion, for analysis and criticism of concrete proposals for economic expansion, as the chief spokesman to provincial and federal government, as a policy-making body to which paid development personnel might report and, most importantly, as a tough and hard-nosed think-tank struggling to bring some sense and design to the economic development of the capital region.

I'm personally persuaded that a dynamic and persuasive council could, if it were composed broadly enough, be an extremely powerful force for inter-disciplinary thinking and research and imagination. I think, personally, that it's extremely important to invite organized labour and the University of Victoria to participate. In this province, unfortunately, organized labour is almost always left out in the cold. They are viewed by many businessmen as the enemy; they are viewed by many politicians as an unwelcome guest. I think that's a very serious mistake.

Labour has a body of expertise, has a point of view, has an interest obviously in employment that must be represented on any such body. I for one will be arguing as hard as I can that in this particular instance the Victoria Labour Council, and as well the University of Victoria, and particularly its department of economics, be involved directly and personally in the proposed greater Victoria economic development council.

I'm happy to report as well that a professor at the University of Victoria economics department, Dr. Gerry Walter, participated on a panel that we organized last week and endorsed the idea, as fully as he could, and indicated that he hopes very much his own department will participate. We look forward shortly to making an announcement about that as well.

In regard to organizing this particular group as well as keeping this House aware of its progress through debates in the Legislature, we're informing the public that we expect to organize a weekend workshop of the offices of the Capital Regional District, most likely for the end of March of this year. The point of that workshop, of course, would be to bring together those representatives of municipal and regional government, of the chamber of commerce and the tourist bureau, of the labour council and the University of Victoria, and of the minister's own department — if he will accept such an invitation — to get together to talk about the problems, to hammer out terms of reference on the basis of this and other proposals — many other proposals — and, having decided to get together to talk about those things, to announce that they expect to stay together over a reasonable period of time and begin to develop that strategy.

After they've done that, there are some resources which this particular organization will require. I'd like to inform the House about the research which we've conducted into some of them, to tell you about how some of those resources may well be employed in a co-ordinated and tough way by this council, and how, by using those resources — because they’ve never been properly employed before — we may begin to develop that kind of economic strategy before the year is out.

The council requires the setting of terms of reference for itself and, beyond that, setting up terms of reference for the research and the planning and development staff it will need. I am not proposing, and nor is anyone else — certainly not the mayor, certainly not the chamber of commerce, and certainly not the labour council — that we establish a new bureaucracy. What we are proposing to do is to tap people who are already in place by seconding them — by bringing them in from business and labour and government to do a job that needs to be done — and, having been seconded for the purpose and having completed the job, they can then go back to where they came from and continue work. We do not require a bureaucracy. It would be a waste of money. We do require the bringing together of the best talent we can find and putting them onto an important job and giving them advice and criticism through such a broadly based council. We will thank them when they have done their job and go back to your ministry, when they go back to RoyNat, when they go back to IBM, when they go back to the IWA, when they go back to the university. They will have made their contribution. That's the kind of staff we need.

There's a role for that minister's department, Mr. Chairman. I hope he accepts it. I hope he will be willing to accept various requests for the seconding, for specific jobs and tasks, of various of the members of his staff in order that we can proceed without hiring a lot of people unnecessarily and without creating a bureaucracy that will only slow us down.

The university itself has a most peculiar and important role here. They're in a position to contribute literally dozens of doctoral students who are looking for things to study, and it won't cost us a cent. They're in the position, through the various masters and doctoral programmes at that university, of being involved, in a creative and important way, in doing the research we need done at no direct cost whatever to this council. It's another resource that we've yet to tap in a serious or scientific way. This

[ Page 831 ]

council, acting as leaders in this debate, can begin to tap that resource like it's never been tapped before.

There are a number of agencies whose support and investment in Victoria should be invited and co-ordinated by the council. I'd like to name some of them; others have already been named in this House. Without doubt, the B.C. Department of Economic Development, with its trade and industry, small business assistance, special projects, and industrial location divisions should be involved. The importance of the industrial location division is absolutely crucial in the early stages of the council as its mandate — if I may quote from its own report — is: "To assist in the documentation and correlation of regional economic, geological, engineering, environmental, and social data as it relates to industrial development in each community."

We need the participation of that particular agency, and I invite the minister to indicate whether or not he is willing to give it. I'm sure he will be. I hope the minister will be willing to recognize the strategic use, through this kind of council — no matter what its name may finally be — of contributing to this development of a strategy in Victoria.

Without doubt, the Federal Business Development Bank must be asked to cooperate in the granting and expansion of loans to businesses being invited by the council to invest in Victoria. They must be asked to cooperate in the design of a strategy — tough and sound and hard-nosed — that we can live with. They must be informed of that strategy and invited to participate in it.

Thirdly, the federal Department of Supply and Services must be pressed by this council and that ministry to expand its purchases from greater Victoria businesses and manufacturers, especially in regard to the federal installations here. The Department of Supply and Services must, through the present operation Access, established in that minister's department under the previous minister, continue to offer long-term contracts to such suppliers as must be invited to establish here and supply their goods in a capital city like our own.

Fourthly, the Department of Regional Economic Expansion has never yet, in a serious way, been invited to consider the economic problems of the lower Vancouver Island. I hope that the minister, through his own initiative, and the council, through its, will begin to invite that federal department to take a serious look at some of the problems going on here.

Fifthly, the Canadian Commercial Corporation, as the minister knows, is the major insurer and guarantor of Canadian export contracts. We've tried to find out whether or not the Canadian Commercial Corporation has ever taken any initiative whatever to solicit applications for such contracts in Victoria. Our information is that they have not, I certainly stand to be corrected, but it's my present understanding that the Canadian Commercial Corporation has never been involved in a serious, positive or imaginative way in soliciting long-term contracts and in participating in a thorough way with those suppliers of goods and services here in Victoria that might, through its own agency, be made available for export.

Sixthly, the Canadian International Development Agency, with its better than $1 billion annual budget, as you know, loans and grants money to foreign nations in order that they may purchase Canadian goods. CIDA must be compelled to recognize greater Victoria as a source of those goods. It is a common complaint, based on analyses of CIDA's purchases, CIDA's arrangements through or loans and grants to developing nations, that western Canada — certainly including British Columbia, most certainly including greater Victoria — has often received the short end of the stick. The purchases and the recommendations by CIDA that should have been made to foreign nations purchasing in Canada have disproportionately favoured Ontario and Quebec. This is not satisfactory; this is not acceptable.

Such a council could point out those disparities; its research could document them. Such a council could exercise leadership with the federal government, hopefully in cooperation and consultation with the minister, to begin to compel CIDA to take greater Victoria and southern Vancouver Island more seriously as a source of some of those potential exports.

Seventh, the Department of Industry, Trade and Commerce must be asked to consider the designation of greater Victoria as a "study and development area" and to consider making available funds — presently it may do so within its mandate — to the council for those related research, planning and developing of secondary industry proposals that may come forward. They have a job here. I'm informed by local business representatives that they're capable of doing it elsewhere. We'd like to know whether or not that's the case; if it does apply, how it should apply; and if it does, how it can be made to apply as quickly as possible.

Finally, eighth, is the Government of Canada itself, which, as you know, has advertised for obvious political reasons the relocation of various of its enterprises to various parts of the country. It's hardly any secret that the next Member of Parliament from Victoria will be Allan McKinnon, the present member. It's very likely that he will be the Minister of Defence in the next federal government.

I would hope that the minister and every member of this House will take the opportunity of this foreknowledge to begin to lobby Mr. McKinnon, to put some pressure on him to come up with a bit of relocation in favour of the riding that surely is going

[ Page 832 ]

to send him into the federal cabinet after the next election. I would hope the council might have a role here too.

Interjection.

MR. BARBER: I think everyone knows about it. We'll hardly cover up the truth. Sure, there's no doubt indeed that Mr. Clark will be the next Prime Minister of Canada, so it appears. It may indeed be the case that various members of the government backbenches will be running for the Conservative Party in the next election. Am I looking in the right place? Or the Liberals. I suppose they could choose.

However, if it's possible that Mr. McKinnon will be elected to represent the people of Victoria again — and I expect he will — and if it's likely he'll be the Minister of Defence in the next federal cabinet, he should certainly be pressured now to work for a bit of relocation of those agencies to the capital city of British Columbia.

There's a very special problem we have in Victoria, and that's the problem of land assembly. I see the sign; I'll be getting back to this a little later on as I continue offering constructive proposals for economic development, to talk about the specific problem we have in greater Victoria of land assembly.

Precisely because we've lacked a co-ordinating and representative greater Victoria economic development council to speak for us, greater Victoria at the moment has a fairly serious problem in the provision of suitable, serviced, cheap land for secondary development, for clean, compatible industry. We don't have very much of it; it's a very serious problem. It's one I believe the department can and should address itself to, hopefully in co-ordination and consultation with the business, labour and government enterprises which I believe will be coming together under the umbrella of a greater Victoria economic development council to do that job.

I will continue later on in the debate, Mr. Chairman, if I may, pointing out further of these details and asking the minister further for a commitment on each of the aspects of this proposal, and hoping very much for his positive reply.

HON. MR. PHILLIPS: I want to thank the member for some of his very positive suggestions. I must say this department will be most pleased to cooperate with anybody in the province — particularly those communities that want to help themselves. The economy of this province cannot be directed out of Victoria.

I hope that the member and his council, or the greater Victoria council, and indeed all of the people who live on Vancouver Island who want economic development on Vancouver Island, will remember something that I said when I was in opposition: liquid cash is nervous money, and it's looking for a secure base where it will grow. That liquid cash that I'm referring to is the investment money that British Columbia needs all over the province. We are not an island unto ourselves as a province in the financial world of the world. That's a good one.

We must as a province, generally we must as a regional district, and we must as a community invite the type of development that we talk about. We must ask it to come; we must not put up too many roadblocks. Asking it to come on one hand and putting up stops signs at every turn of the road on the other is not going to accomplish the type of industrial or economic growth that you want. So all segments of society must want economic growth.

Now we've heard a lot about wanting economic growth on the island and we have a case here just north of us, in Duncan, where there was a shingle mill that could go into a particular area and could employ 120 to 150 people. Maybe those roadblocks that have been put up are necessary. But I do just want to tell you, and I do want to remind the member, that if we want economic development, we must truly want it and all parts of your community must want it. I've mentioned this before in the House.

It will not be good enough, Mr. Member, just to voice your concerns, and then at the same time halt economic development and then blame it on the provincial government. Economic development will go to communities that want it and invite it.

With regard to land, I'm glad the member identified that particular area. As I stated, that's one of the reasons we have made the moves in this department that we have made. We realize that one of the big drawbacks to location of economic enterprises is the shortage of serviced land. As I said before — and I'll say it again right now — every time an industry or a development wants to locate somewhere, they have to send in a battery of accountants and lawyers. Sometimes it takes up to two years before that is authorized. I'll tell you, if you want economic development, the communities have got to get together, and the people within the communities and the various groups, and they've got to work together. That's why I like your idea. Certainly you will have cooperation from this department.

As a matter of fact, we're working very closely now, as you know, on a new DREE agreement. One of the many prongs that that agreement will have — and it's a multi-pronged agreement — will be to help industrial development commissions, or economic councils or whatever terminology you wish to place on them, to do studies in their own communities. We will assist you in any way, of course, through the department, that we can. I don't think that you'll have any difficulty with the Ministry of Economic Development in assisting you with your role.

[ Page 833 ]

One of the purposes of the regional studies which were commenced when the member for Vancouver Centre (Mr. Lauk) was Minister of Economic Development was what I call an inventory of opportunities. Those studies have all been completed, and they were partly paid for in conjunction with the federal government, to identify opportunities in an area, like they identified Grizzly Valley pipeline and the scrubbing plant in the northeast sector as an opportunity for development. Those studies are done, and they should be used by the council that you're thinking of forming as a dialogue, a discussion paper, to identify those areas where you can move. They are in there. Rather than you doing all that research, you should use that as a starting point.

1 certainly want to tell the member that I hope that this happens all over the province of British Columbia. That is exactly what this government is talking about — long-range planning and letting the private sector do it themselves.

That member for Vancouver Centre must be thinking. At least we're getting to him because he has identified what we've been talking about for the last year and a half, right? Part of the policies put in by our own members for Vancouver and Esquimalt — that's what we've been telling you fellows over there. That's what we want to happen, and the member for Vancouver Centre has identified it.

MR. BARBER: Victoria.

HON. MR. PHILLIPS: Now I suggest to the member that when he's ready to go, he should talk to some people in our policy and planning branch as the way to get started.

We also have, as you know, the British Columbia Development Corporation that will move in. And even though their actions may be condemned in my own riding, of going in and assisting communities to buy land and get it serviced for industrial development, that is exactly what that great Development Corporation will do. Also, if you have a big, major project, if you want a project manager, if you want a group to make it happen like we did in New Westminster with the ICBC property, then that's part of the role, and we will certainly help you.

However, I do want to tell the people of Victoria that they must not be self-centered, because as the province grows, even the development up in the northeast and the northwest and the centre and all over the province where development goes, a lot of it is going to help the city of Victoria. As I said yesterday, profits from business are the greatest source of growth for the civil service. I am sure the people of Victoria realize that.

AN HON. MEMBER: Really profound, Don.

AN HON. MEMBER: Why are you cutting Sandy's salary?

MR. CHAIRMAN: Order, please. The Minister of Economic Development has the floor.

AN HON. MEMBER: Well, he's cutting his deputy's throat.

HON. MR. PHILLIPS: Would you, Mr. Chairman, instruct those yapping members over there to be quiet while I finish my talk?

I know that you want me to stand in this Legislature and wave a magic wand and automatically put those workers in Oakland Industries back to work. You full well know that that cannot happen. But I have worked diligently to bring about a resolution of the problems on Oakland Industries, I don't think, unless you want to get really political — and I know you wouldn't do that — you can fault me for what I have done. I am very positive that we are going to reach an agreement. I have brought the parties together, I have made suggestions and I am very positive. But I want to point out, Mr. Chairman, that that member never came to me with any suggestions. He never helped to bring people. It was the member for Victoria (Mr. Bawlf) and the member for Esquimalt (Mr. Kahl) who brought the people together and who made positive suggestions.

MR. BARRETT: Oh, you're playing politics.

HON. MR. PHILLIPS: Social Credit members. I didn't hear one peep out of that member over there. But he can sure stand up here and yak and yak and yak, but not one positive suggestion from that member.

MR. BARRETT: Stop playing politics.

HON. MR. PHILLIPS: No, I wouldn't play politics. But, you know, Mr. Chairman, there's been a lot of gloom and doom around the province. The members opposite have told us how bad things were, how the province was going to wrack and ruin....

MR. BARRETT: You're a minister now. Be responsible.

HON. MR. PHILLIPS: Now, Mr. Chairman, I'd like to give you a couple of figures here. These are figures for 1975-1976 over 1975 to the end of November, and some of them are to the end of September, but I'll identify those areas. Factory shipments from British Columbia, to the end of November....

AN HON. MEMBER: Saving on the deputy's

[ Page 834 ]

salary.

MR. CHAIRMAN: Order, please.

HON. MR. PHILLIPS: Mr. Chairman, the member for Vancouver Centre (Mr. Lauk) doesn't want to hear the facts.

MR. CHAIRMAN: Order, please. The Minister of Economic Development has the floor.

HON. MR. PHILLIPS: This year they are up 21.6 per cent.

MR. BARRETT: Bull shipments are up 100 per cent.

HON. MR. PHILLIPS: The first year of Social Credit government, factory shipments are, up to the end of November, up 21.6 per cent.

AN HON. MEMBER: That cheers the unemployed. They're happy to hear that tonight.

HON. MR. PHILLIPS: I don't suppose that the members opposite realize that factory shipments mean jobs for people, do they? And if factory shipments are up, jobs are up. No, they wouldn't understand that.

Mineral shipments are up 26 per cent. Lead shipments are up 26 per cent. Zinc shipments are up 16 per cent.

AN HON. MEMBER: Bull shipments are up.

HON. MR. PHILLIPS: Timber scale — up 33.9 per cent. Lumber sawn up 43.5 per cent. Paper production up 39.3 per cent. Pulp production up 40 per cent.

MR. BARRETT: Unemployment up.

HON. MR. PHILLIPS: Everything's up and up and up in British Columbia.

MR. BARRETT: Unemployment up.

HON. MR. PHILLIPS: Sure, and the population is up as well. They don't like to hear these figures, do they, Mr. Chairman? They don't like to hear these figures.

MR. CHAIRMAN: Order, please. Hon. members, you will all have a chance to participate in the debate. The hon. minister has the floor.

HON. MR. PHILLIPS: Thank you, Mr. Chairman. Building permits are up 11.3 per cent to the end of

November. Housing starts.... Remember, there used to be a shortage of housing because of the housing policies of that government. But when our great minister of Housing, the member for Saanich and the Islands (Hon. Mr. Curtis), came in with the new policies of this dynamic government, the people had faith to invest in British Columbia. Housing is up. Housing starts are up 19.8 per cent. And completions, just so that we won't be able to talk about starts, are up 8.7 per cent.

Now, we've heard a lot of talk about retail sales, and how the sales tax and the ferries and everything was spreading gloom and doom around the province. Why, one of the members over there — I think it was the member for Port Alberni (Mr. Skelly) — last year said, "Oh, my gracious, the retail stores are going broke." What happened last year?

AN HON. MEMBER: You put up the sales tax.

HON. MR. PHILLIPS: What happened last year to the end of October? Retail sales were up — and this is 1976 over 1975 — 13.8 per cent. Exports out of Vancouver, in the tons, were up 17.9 per cent.

And what's this? I don't know where this figure comes from, but it says employment and income, wages and salaries, to the end of October, 1976 over 1975, are up 15.3 per cent. Now where are the gloom-and-doom boys? I want to tell you, we can't call them the doom-and-gloom boys. We've got to call them Barrett's bunglers, because that's what they did to the economy.

Now just to show you that this is on a continuing basis, and I'm just talking about month to month....

MR. BARRETT: What happened to last week's?

HON. MR. PHILLIPS: In other words, last November was up over the previous November, 1975 — when those birds over there were government — building permits were up 27.1 per cent. Now how do you like that?

Now I talked a few moments ago about housing.

MR. BARRETT: Is that your resignation speech?

HON. MR. PHILLIPS: Let me point this out to you: housing completions — units — in October, 1976, were up 58.4 per cent over 1975 when Barrett's bunglers were in power. Now we've had a lot of talk about retail sales.

MR. CHAIRMAN: Hon. minister, we don't refer to members by their names, please, in the House.

HON. MR. PHILLIPS: Oh, I was referring to a group. I apologize.

[ Page 835 ]

MR. BARRETT: Don't apologize. I'll talk to my mother about this.

HON. MR. PHILLIPS: To make sure there wasn't any surge, in October, 1976, over October, 1975, retail sales are up 12.1 per cent. I just happened to look through a very recent article out of the Victoria Times, dated today. What's the headline?

MR. BARRETT: "Phillips Goes! Hurray!"

HON. MR. PHILLIPS: What is the headline? No it wasn't "Phillips Scalped." It says: "Great Social Credit Government — Retail Sales Are Encouraging."

MR. BARRETT: What is that — the Unity News?

HON. MR. PHILLIPS: Mr. Chairman, just let me quote to you: "Retail sales were stronger than expected in January, managers of the major department stores said Wednesday." Most of the managers were expecting a bleak month, so the dynamic policies of this great government are even exceeding the expectations of the retail stores' managers. Sales were 8 per cent higher than the previous January, above the level of inflation.

MR. BARRETT: It's a great comedy.

MR. KEMPF: Eat your heart out!

HON. MR. PHILLIPS: "Most of the managers of the major retail stores expressed great satisfaction with sales." It said: "Normally a good year is one in which sales are up by four percentage points above the inflation rate, but retail sales for 1976 were up 12 per cent."

I want you to realize the significance of this. This is an increase in retail sales in January when there was practically no ski equipment sold, which is a major retail sales item, and practically no winter clothes were sold because it's been raining even in the north. I want to tell those members opposite that things are looking good in British Columbia. I want to tell them, Mr. Chairman, that that's just a taste of the announcements that this great government will be able to make when those long-term, dynamic policies of this government finally grab hold and people start coming back to British Columbia to invest their money.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 6 p.m.