[ Page 1341 ]

CONTENTS

Privilege

Payments to handicapped persons. Mr. Gibson –– 1341

Routine proceedings

Oral questions.

Aid to handicapped persons. Ms. Brown –– 1343

Mr. Gibson –– 1343

Funding for Vancouver Association for children with Learning Disabilities. Mr.

Wallace –– 1344

Ferry rates. Mr. Cocke –– 1344

Aid to handicapped persons. Ms. Brown –– 1345

Hydro rates. Mr. Levi –– 1346

Presenting reports

Fifth annual report of the Criminal Injuries Compensation Act. Hon. Mr.

Gardom –– 1346

Corporation Capital Tax Amendment Act, 1977 (Bill 8) Second reading

Mr. Lea –– 1346

Mr. Gibson –– 1346

Mr. Wallace –– 1346

Mr. Stupich –– 1347

Hon. Mr. Wolfe –– 1348

Division on second reading –– 1348

British Columbia Hydro and Power Authority (1964) Amendment Act, 1977 (Bill

4) Second reading

Mr. Barnes –– 1348

Mr. Bawtree –– 1351

Mr. D'Arcy –– 1352

Mr. Lockstead –– 1357

Division on motion to adjourn the debate –– 1360

Mr. Cocke –– 1360

Division on motion to adjourn the debate –– 1363

Mr. Nicolson –– 1363

Division on motion to adjourn the debate –– 1365

Mr. Gibson –– 1366

Tabling documents

B.C. Energy Commission fourth annual report. Hon. Mr. Davis –– 1369

The House met at 2 p.m.

Prayers.

MR. W.S. KING (Revelstoke-Slocan): In the members' gallery today we are honoured to have with us May-Britt Karlsson, who is the labour attache to the Swedish embassy in Ottawa. I would ask the House to join me in extending a warm welcome.

HON. P.L. McGEER (Minister of Education): Mr. Speaker, in the galleries today we've got Professor Balmer of Lewis and Clark college and 30 of his political science students. This is the 20th anniversary of visits by that college to our Legislature. I'd like the members to bid a special welcome.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing): In the members' gallery today is an individual known to many members of this House, Mayor Jack Campbell of Port Coquitlam, who also has the added responsibility this year of chairmanship of the Greater Vancouver Regional District Board. Will the House make him welcome?

MS. R. BROWN (Vancouver-Burrard): In the gallery today are a number of handicapped people, many of whom got up at 4 o'clock this morning so that they could catch the first ferry from Vancouver. They're representatives of a number of groups: the B.C. Coalition of the Disabled; the International Society of the Handicapped; Mental Patients' Association; Downtown Eastside Residents Association; the ISOTH Housing Society for the Handicapped; Coast Foundation; Association of the Concerned Handicapped; Association of the Blind; The National Association for Cerebral Palsy; the First United Church; and the B.C. Association of Social Workers. I would like the House to join me in welcoming them.

MR. L.B. KAHL (Esquimalt): Further to what has just been said, I too would like to extend a warm welcome to those people from the various groups that have been mentioned. I had the pleasure of meeting with them for an hour this afternoon. Again I would like to welcome them, and many of the people, into the precinct today.

MR. G.F. GIBSON (North Vancouver-Capilano): I am rising on a question of privilege. If I understand the rules correctly, I have to bring this to Your Honour's attention at the earliest possible moment. The document upon which this is based just came into my hands this morning. First of all, if it might be helpful, I would draw to Your Honour's attention the brief discussion of privilege on page 64, May's J 8th edition, which defines privilege as "the sum of the fundamental rights of the House and its individual Members as against the prerogatives of the Crown, " among other things. Proceeding further to a definition on page 132, which , I know Your Honour is familiar with, that refers to those things which have "a tendency, directly or indirectly, to produce such results" - those results being the impedance of the House and its function. They "may be treated as a contempt even though there is no precedent of the offence." I don't know if there is for this particular offence. It is an offence which tends to draw this House into disrepute. Therefore I refer Your Honour to a quotation at the bottom of page 140 of the same edition, referring to "Speeches or Writings Reflecting on Either House"; and further at page 143 under the heading: "Other Indignities Offered to Either House."

Mr. Speaker, the document, of which I became aware for the first time this morning, is a form letter that is being sent out by the Minister of Human Resources (Hon. Mr. Vander Zalm) to persons who have written to him making complaint about the fact that an amount of money, being $22.50 a month, is not being passed on to them from the federal government. Without commenting on the merits of that case, I would suggest, Your Honour, and I will send this document up to you, that the document taken as a whole, and in particular paragraph No. 6 on page 2, makes the case that these extra funds cannot be paid to handicapped persons in this province because of the lack of action of this Legislature. Your Honour , I feel that this is an attempt to blame this House for an action that the minister has not seen fit to make. It is false, first of all, because there is an underspending of about $25 million in his budget as of the first nine months of this year in that particular category, and secondly because, as the minister knows, rates are changed by order-in-council and not by this House. He suggests here in paragraph 6: "It was not increased because it cannot be increased without providing the opposition the opportunity to scrutinize the expenditure in the Legislature during the budget debate."

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

MR. GIBSON: Mr. Speaker, he refers there to the budget for the handicapped which, as I have said, is underspent at this time, and the regulations which can be changed by his own hand. But, Mr. Speaker, I want to make the case that if the minister *ants such a resolution, he should bring it in this afternoon.

Mr. Speaker, I would ask Your Honour to consider the matter and exercise appropriate discipline of the House.on that minister, if Your Honour sees fit.

[ Page 1342 ]

MR. SPEAKER: Order, please. Speaking to your matter of privilege, hon. member, first of all, as you know, it is improper to engage in a debate on the matter in stating the case, and you've certainly, at times, in presenting this material to me indicated a willingness to debate the matter before it was even decided whether it was a matter of privilege or not. I just draw that to your attention for your guidance.

Further, as to the matter of privilege, because matters of privilege are very serious and cannot be settled quickly, I'll reserve a decision on it until 1 have had time to get a transcript of your remarks which you have just entered to the House, and the matter which you have put before me, and get back to the House with a decision as quickly as possible without in any way impairing your rights as an individual member. If it is held to be a matter of privilege, I'll certainly advise the House so.

Before we enter into oral questions by members today there is a matter which I wish to bring to the attention of the House with respect to the oral question period. It's fairly lengthy, but I make no apologies for that because of the fact that on a number of occasions members have asked about the propriety of oral questions in question period and whether they are admissible or not.

Hon members, in response to the request of both sides of the House I have reviewed and considered the practices and procedure within oral question period and their enforcement by the Chair. Hon. members will recall that a report of the Select Standing Committee on Standing Orders and Private Bills presented to the House on February 27,1973, and adopted by the House, includes the following provisions: first, "questions without notice must be urgent and important." I think I should stress that for the consideration of everybody - they must be urgent and important. "Supplementary questions may be allowed by permission of Mr. Speaker. No debate shall be allowed during questions. The decision of Mr. Speaker shall be final on allowing or disallowing any question.---

Supplementary to these rules are those set out in May, 16th edition, at page 356, relating to questions in general. Among these supplementary rules are the following:

"The purpose of a question is to obtain information or to press for action, and it is not to be in effect a short speech, or limited to giving information, or framed so as to suggest its own answer or convey a particular point of view. The facts on which a question is based must be set out briefly, provided the member asking it makes himself responsible for their accuracy, but extracts from newspapers or books ... quotations from speeches, et cetera, are not admissible. Questions of excessive length have not been permitted.

"Questions addressed to ministers should relate to the public affairs with which they are officially connected, to proceedings pending in Parliament, or to matters of administration for which they are responsible. Within these limits an explanation can be sought regarding the intentions of the government, but not an expression of their opinion upon matters of policy.

"Questions addressed to unofficial members must relate to a bill, motion, or other matter connected with the business of the House for which such members are responsible."

"A question to an ex-minister, with regard to transactions during his term of office, is inadmissible.

"An answer to a question cannot be insisted upon if the answer be refused by a minister. Questions may not be asked regarding statements made by members outside the House.

"A question to the Prime Minister" - in our case, the Premier - -whether a statement made by a minister represents the policy of the government is in order.---

Further examples of any inadmissible questions are as follows:

"Questions seeking an expression of opinion, or containing arguments, expressions of opinion, inferences, or imputations ... Referring to debates or answers to questions in the current session ... Seeking information about matters which are in their nature secret, such as decisions or proceedings of the cabinet or cabinet committee, advice given to the Crown by law officers, et cetera ... Dealing with matters referred to a royal commission, or with matters before a Parliamentary committee before the House has received a report from the committee. . . . Putting to a minister a question for which another minister is more directly responsible, or asking one minister to influence the action of another ... Dealing with the actions of a minister for which he is not responsible to Parliament ... Reflecting on the character or conduct of those persons whose conduct may only be challenged by a substantive motion ... Raising matters under the control of local authorities ... Seeking for purposes of argument, information on matters of past history ... Raising questions of policy too large to be dealt with in the limits of an answer to a question ... Repeating in substance questions already answered or to which an answer has been refused ... Multiplied with slight variations on the same point."

Sir Erskine May's 16th edition, at page 363, makes the following observations about oral questions and

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supplementary questions:

"An answer should be confined to the points contained in the question with such explanation only as renders the answer intelligible, though a certain latitude is permitted to ministers of the Crown. Supplementary questions without debate or comment may, within due limits, be addressed to them, which are necessary for the elucidation of the answers that they have given. It follows that as a proper supplementary question seeks clarification or explanation of an answer already given, there cannot be a supplementary question to a question taken on notice.

"The number of allowable supplementary questions is not fixed by any practice, so long as questions are properly supplemental. So long as other members are not unfairly deprived of an opportunity to participate in the question period, the Chair need not intervene to limit the number of supplementary questions."

It is my recommendation that whenever an hon. minister has a lengthy answer to any question taken on notice, the minister concerned should advise the House at the conclusion of oral question period that an answer has been tabled. In this way, neither the time of the House within oral question period nor time allocated for other business after oral question period would be infringed upon.

My perusal of the Hansard reports of oral question period since its inception in this House clearly shows that very great latitude has been taken by hon. members, both in the posing of questions and in the answers given thereto. The tenor of the points of order taken on Thursday last when the Chair was asked to review oral questions indicates to me that it is the view of many hon. members that there has been too much latitude and liberality of interpretation taken with reference to both questions and answers. Accordingly, the Chair can only respond by seeking the co-operation and adherence of hon. members to the numerous but explicit rules relating to oral question period.

It might be of interest to hon. members to know that on the last occasion - in 1921 - when this House intimated to the Chair a desire to have the practice clarified in regard to questions, the then Speaker did so. Upon the rules found to be applicable, he disallowed no less than 90 questions that appeared on the order paper.

It is my hope that all hon. members will familiarize themselves with the rules I have set forth and thereby assist the Chair in guiding the House in accordance with correct practices.

Oral questions.

AID TO HANDICAPPED PERSONS

MS. BROWN: Before going into my question, may I thank you for that very lucid, intelligible and concise clarification of the question period.

My question is directed to the Minister of Finance: Mr. Minister, are you prepared to introduce today into the House a resolution making it possible to pass on the $22.50 which Ottawa is paying into your coffers on behalf of the handicapped people of this province to the handicapped people themselves? May I assure you of the support of all the members of the opposition if you are prepared to introduce such a resolution.

MR. SPEAKER: Hon. member, this is an example of the exact type of question which I have just indicated to you is out of order. It's the type of question that must be ruled on by the Chair and it is an out-of-order question in the manner in which it was stated, hon. member.

MS. BROWN: Mr. Speaker, this question came under the section which you referred to us as "to press for action." This is a to-press-f or-action question. May I repeat myself?

SOME HON. MEMBERS: Order!

MS. BROWN: Mr. Minister of Finance....

Interjections.

MR. G.R. LEA (Prince Rupert): You don't like the question.

MR. SPEAKER: The hon. member for North Vancouver-Capilano.

AN HON. MEMBER: Rules are rules.

SOME HON. MEMBERS: Oh, oh!

MR. G.V. LAUK (Vancouver Centre): Hiding behind the rules.

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

MR. GIBSON: Well, Mr. Speaker, perhaps I'll follow up with a question to the Premier in his capacity as presiding member of the executive council ...

MR. LAUK: Such as it is.

MR. GIBSON: ... and ask him how changes are made in the rates of assistance to handicapped

[ Page 1344 ]

persons. Is it not simply an order-in-council, Mr. Premier?

HON. W.R. BENNETT (Premier): Mr. Speaker, changes are made by the minister responsible for making recommendations.

MR. GIBSON: Mr. Speaker, since the Premier, I take it, indicates that these rates are indeed changed by order-in-council....

MR. LAUK: That's what he said.

MR. GIBSON: Rates to handicapped persons. Yes, I specified it, and they are changed by order-in-council. I would ask the Premier if he will now direct his minister to pass that $22.50 on, the $22.50 that comes to this province from Ottawa additional, as of last October 1, in respect of allowances to handicapped persons. Will he direct his minister to do so?

MR. SPEAKER: That in itself is an improper question - to ask a minister to influence the decision of another minister.

Interjections.

MR. SPEAKER: Order, please.

MR. GIBSON: On a point of order, it is very clear from precedent everywhere that it is proper to ask the First Minister if a matter is a question of government policy. That is exactly what that was.

MR. SPEAKER: Next question.

AN HON. MEMBER: Help the millionaires.

MS. BROWN: A supplemental to the Premier, Mr. Speaker. Now that it has been brought to your attention, Mr. Premier, that the Minister of Human Resources has been deliberately withholding $22.50 per month from the handicapped people of this province, are you still prepared to say that you support his every action, and that you are proud of him?

MR. SPEAKER: Order, please. That question is out of order.

FUNDING FOR VANCOUVER ASSOCIATION

FOR CHILDREN WITH LEARNING DISABILITIES

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, the Minister of Education took as notice a question regarding financial aid to the Vancouver Association for Children with Learning Disabilities, and promised that he would bring a message back to the House. I wonder if he can tell us if the funding will be provided by this government.

HON. MR. McGEER: I have the question as notice, Mr. Speaker. I haven't got the information yet but I'll give it to the House as soon as it's available.

FERRY RATES

MR. D.G. COCKE (New Westminster): Living within the constraints of the question period, I'd like to ask the Minister of Energy the following question: after the disappointing announcement of the B.C. Ferry Authority ...

SOME HON. MEMBERS: Order!

MR. SPEAKER: Order, please.

MR. COCKE: It was a disappointing announcement, Mr. Speaker, that's a fact. . . . on rates of ferries, Mr. Speaker, I wonder if the minister would indicate to us what the new, increased rates for cars will be, because at the same time they indicated that rates for cars would go up.

HON. J. DAVIS (Minister of Energy, Transport and Communications): There is no recommendation from the B.C. Ferry Corporation directors, or no intention on the part of the government at this moment to increase any rates on the ferries above present effective rates.

MR. WALLACE: In relation to the same announcement made regarding ferry rates which are meant to discourage car users and encourage foot passengers ...

SOME HON. MEMBERS: Order!

MS. BROWN: Every question is out of order.

AN HON. MEMBER: Is the fix in?

MR. SPEAKER: Proceed, hon. member.

MR. WALLACE: That was the stated purpose of the announcement, Mr. Speaker. Can I ask the minister why it is that in recent weeks a substantial number of foot passengers who arrive at the terminal well ahead of the sailing are unable to go on that sailing because the ferry can only accommodate a certain total number of persons traveling? This would appear in contradiction to the aim of encouraging foot travelers.

HON. MR. DAVIS: Mr. Speaker, it's quite unusual

[ Page 1345 ]

that there are overloads on the ferries, but occasionally there are too many cars or too many passengers presenting themselves. Under those circumstances, of course, we have to adhere to the standards laid down by the Canadian steamship law and limit the loads that the ferries take on.

MR. WALLACE: Could I ask the minister if, in terms of the crew aboard these ferry vessels, they are now the minimum number allowed by the federal regulations?

HON. MR. DAVIS: Yes. The number of crew on, say a stretch ferry.... Thirty-one is the limit number, the minimum number required by federal regulations. The federal government, however, is looking into the possibilities of classifying these as protected or inland waters, under which circumstances the figure would be much lower. The United Nations figure, for example, is 14 for inland or protected waters.

MR. WALLACE: In view of the policy of trying to increase foot passengers, could I ask the minister if any consideration is being given to increasing the number of crew so that more passengers could be carried each sailing?

HON. MR. DAVIS: As I indicated in my answer to the first question, it's rare that there is an overload. The new fare structure does encourage more people to ride in each vehicle and it does encourage that specifically in off-peak periods - Mondays through Thursdays, Saturdays and in the late fall, winter and spring months. It's the intention to encourage more passengers without discouraging vehicles because there is no change contemplated in the vehicle fare.

MR. LEA: If the province is successful in having the regulations changed to make it inland waters and therefore make it able to run with less crew, how many more ferry workers will be laid off when you're successful in your plea to the federal government?

HON. MR. DAVIS: There are no changes contemplated at the moment. We intend to continue to operate with 31 employees per ferry.

MR. COCKE: As a supplemental on my original question, Mr. Speaker, the minister indicates that 31 is an adequate number. I am told by some of the ferry workers that. 31 is inadequate to man the lifeboats. Would the minister like to comment on that question?

HON. MR. DAVIS: I am really not competent to comment on that. These are the standards laid down by the federal regulatory authority, and I assume that they are correct in their judgment.

MR. E.O. BARNES (Vancouver Centre): In view of the rationale when the ferry rates were increased initially, and assuming that there were scientific methods used, could the minister now tell the House why he is reducing the rates back to where they were before and calling them new rates, when in fact there are less people using the ferries today than there were at the time the rates were increased?

HON. MR. DAVIS: Mr. Speaker, the rates have not been rolled back except in exceptional circumstances - off peak - and only in respect to passengers, not for vehicles and not for drivers. As to the overall rationale, the user still only pays roughly two-thirds of the cost of operating the ferries. The remaining one-third is paid by the taxpayers of the province in the same fashion as the taxpayers pay for highways.

The directors of the corporation have made a recommendation that there be special off-peak ferry rates Monday through Thursday and on Saturday during the late fall and winter and, ~ spring months. This will have a minor impact on revenue, and we hope more people will travel and make better use of the ferries.

AID TO HANDICAPPED PERSONS

MS. BROWN: Again to the Minister of Finance: would the minister tell us just how much money the province is saving by not passing on the $22.50 which the federal government is giving them to the handicapped people of this province?

MR. SPEAKER: Unfortunately, hon. member, the minister has not indicated a reply to the original question, so I cannot allow a supplemental on that particular question.

HON. E.M. WOLFE (Minister of Finance): The member asked a similar question earlier and it should really be directed at the Minister of Human Resources. I'd be happy to look into this and report back at a later time.

MS. BROWN: Fine. At the. same time, would the Minister of Finance check two other things for me?

MR. SPEAKER: Order, please. If you recall....

MS. BROWN: This is a supplemental. He's not taking it as notice; he's promised to look into it. Mr. Premier, you discipline your people; you don't discipline me.

MR. SPEAKER: Order, please. I hope you'll

[ Page 1346 ]

accept the direction and guidance of the Chair, Hon. member. The minister has indicated that he would come back to the House with an answer. That would be the proper time to pose a supplemental question; if the answer came back in the form of a return to the table you could follow the matter up.

MS. BROWN: Mr. Speaker, please, I'm asking the minister, while he is checking on the amount of money, if he would also at the same time cheek on the interest which the government is also making on this money which they are withholding from the handicapped people of the province. Would he also check as to whether that money is being used to wipe out the succession duties in this province?

MR. SPEAKER: Order, please.

HYDRO RATES

MR. N. LEVI (Vancouver-Burrard): The question is to the Minister of Consumer and Corporate Affairs. Was the minister, or any official in his department, informed by B.C. Hydro of the proposed increases in rates and the surcharges on the bills for gas and electricity?

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): Mr. Speaker, the answer is no.

MR. LEVI: A supplementary, Mr. Speaker. Has the minister discussed with B.C. Hydro the increases in rates which go beyond the AIB regulations?

HON. MR. MAIR: Mr. Speaker, I've had no conversations with B.C. Hydro.

MR. LEVI: Has the minister, as the minister responsible for the protection of the consumers, discussed with the Minister of Human Resources (Hon. Mr. Vander Zalm) the impact of the increases of these hydro rates on people on fixed incomes -for example, the kind of people who are here today? Has he had any discussions with the Minister of Human Resources?

MS. BROWN: Or does he care?

HON. MR. MAIR: The answer is no, Mr. Speaker.

Presenting reports.

Hon. Mr. Gardom presents the fifth annual report of the Criminal Injuries Compensation Act of B.C.

Orders of the day.

HON. G.B. GARDOM (Attorney-General): Adjourned debate on second reading of Bill 8, Mr. Speaker.

CORPORATION CAPITAL

TAX AMENDMENT ACT, 1977

(continued)

MR. LEA: Mr. Speaker, the official opposition supports this bill and we would like to inform other members of the Legislature that we support the bill in principle. But we will be bringing in an amendment in third reading of the bill.

MR. GIBSON: Mr. Speaker, I appreciate the guidance the House was given on this bill by the member for Prince Rupert. It is an amendment that is only proper, I wish the government had gone further and removed the corporation capital tax from the books in its entirety. I seem to recall that back in the days when that party was on this side of the House it had a good many things of an adverse nature to say about this Corporation Capital Tax Act. Nevertheless, I suppose we must be thankful for small blessings, and what this bill does is make it possible to deduct from the tax base, insofar as the calculation of corporation capital tax is concerned, amounts that were otherwise not deductible from income pursuant to the Income Tax Act of Canada. Therefore in a sense we're being asked to pay tax on losses - it really comes down to that - or, at least, on capital invested but having no chance at the moment of earning any productive income. It seems to be this was a definite disincentive, particularly in the field of mining where these kinds of exploration expenditures are normal. For that reason 1, too, intent to support it.

MR. WALLACE: The problem with this bill is that, of course, the tax itself, regardless of the amendment proposed, is a nuisance tax, and really shouldn't be on the books at all. I've done a little bit of research on the application of the Corporation Capital Tax Act, Mr. Speaker. I understand that by the time small businesses calculate what they owe, the actual bills they have to pay to the accountants to come up with the final figures sometimes exceed the actual tax paid. I gather that this government projects an income of somewhere around $20 million to $21 million from this tax in 1977-1978. So the actual functioning of the tax means that it's a real nuisance to many businesses.

Although this bill represents an effort to make the situation more easily applicable to mining companies, I just regret that this is such a pathetic small step in the right direction. The overall application of the tax and its nuisance value and its relatively small amount of net revenue to the government, I think, clearly make it obvious that this tax should be abolished

[ Page 1347 ]

altogether. It's a capital-intensive tax, and all the debates to which 1 have listened in this House many times indicate that we're all trying to attract secondary industry to British Columbia.

As 1 mentioned in the budget debate, if you're to attract industry to British Columbia, you have to compete with other jurisdictions where it is more attractive for manufacturing and secondary industry to locate. This corporation capital tax is just one more layer of paper work which is imposed on industry and business. It may not be a large part of the deterrent to new businesses to locate in British Columbia, but is just one more part of the total spectrum of reasons why we find it difficult to attract industry and business to British Columbia.

We talk endlessly about unemployment, as indeed we should, and about the need to diversify our economic base so that our two main sources of employment will not continue to be just the forest industry and the mining industry. It seems to me that while this step in this bill is certainly positive and in the right direction, there are many reasons why the government should have looked more seriously at the possibility of removing the tax altogether.

1 wonder if, when the Minister of Finance winds up the debate on second reading, he could pass any comment as to the longer-range appraisal of this tax which he's carrying out in relation to the negative aspects that I've just mentioned. What is the cost of collecting this tax, Mr. Speaker? I'd like to know, for example, if there is all this paper work involved by accountants in calculating what a business owes on utilized capital, how much is involved by the Minister of Finance's staff in collecting the tax. Since the government believes in the positive measure, for example, of abolishing succession duties where the revenue amounts to about the same kind of figure, would it not be an equal incentive, applying the same reasoning, to attract manufacturing industries to British Columbia if you removed the corporation capital tax altogether? These are some of the unknown factors which make it difficult for the opposition to be thoroughly conversant with the impact of this particular Act.

The bill we are now facing and debating is certainly positive in the sense that it recognizes that this tax, per se, is not a very substantial one and not a very effective one. 1 would hope that perhaps the Minister of Finance can tell us that in making this step in the right direction he really intends to take a serious look at the possibility of repealing the Corporation Tax Act completely.

M R. D.D. STUPICH (Nanaimo): Mr. Speaker, I'd like to ask, I suppose, some of the same questions as did the hon. member for Oak Bay, although not necessarily arriving at the same conclusion. I too would like to know just how much money we're giving up. 1 recognize that the total source of revenue is in the neighbourhood of $35 million, but 1 wonder what this particular amendment is going to cost the people of British Columbia by way of taxes that will not be collected. I'd like to know whether or not there have been any particular representations from this industry for this kind of relief. 1 know we've already given them relief by saying: "No more royalties." Now we're saying: "No more capital tax." So 1 wonder whether this has been their second main approach to the government for relief to encourage them to do some exploratory work in the province. If they have a shopping bag, what's next on this shopping list of changes that they'll want before they will start to do the exploratory work in the province of British Columbia?

I wonder whether any other group of industries or any other type of economic enterprise is making similar representations to the government with respect to this particular legislation. 1 wonder, as does the member for Oak Bay, whether the government is doing a study to consider the advisability of making either substantial changes in this legislation or wiping it out entirely and replacing it with some other form of revenue - preferably some revenue from corporation generally.

Is there any kind of research being done in his department on the effect of the corporation capital tax? 1 think we established earlier that there's absolutely no research going into the effect of the removal of succession duties, that it's done just on the spur of the moment, almost, or in keeping with an old election promise. We hope it will achieve some results in the province, but there's absolutely no evidence to support the contention that it will have a good effect on the economic activity in the province.

What about with respect to this particular amendment - has there been any research done? I've been trying to find in the Blues the minister's remarks, and 1 just can't find them in the time between now and the time he closes the debate. I'll have an opportunity later on to check. But 1 wonder whether any research is being done. How much is it going to cost? What will be the effect? Have there been some promises that there will be a significant increase in exploration once we've done this or is there a longer shopping list? What will be the effect of making other changes in the corporation capital tax, including going the limit suggested by the hon. member for Oak Bay - that is, wiping it out entirely?

What kind of studying is being done about taxation generally? - that is the question I'd like to ask. But with respect to a discussion of this bill 1 will have to limit my remarks to ask what kind of study is going on into the effects of this particular type of revenue-raising and what the possibilities of further changes are.

[ Page 1348 ]

HON. MR. WOLFE: Mr. Speaker, if I could deal, in responding, just in a general way first and then with two or three specific questions, the general thrust of this bill is to remove the unfairness associated with what is exclusively exploration activity. To a great degree, many explorations are incurred without the development arriving at any resource of any kind - a total waste of money upon which a venture is unable to deduct against any revenue. Therefore it becomes a capital loss. We all understand that this amendment is perhaps necessary to make it comparably fair for a corporation which is exclusively involved in exploration to be able to deduct these expenditures for future corporation income taxes.

As I said the other day, an exploration expenditure is any expense incurred by a taxpayer for the purpose of determining the existence, location, extent or quality of a mining or mineral resource. It includes such items as prospecting costs, geological, geophysical or geometrical surveys, test drillings, trenching, test pits and preliminary sampling. The importance of this is that it is activity where there is no revenue derived to be able to pay for these expenditures and therefore it is necessary to give them some comparable feature to deduct. That is the only reason for the amendment.

If I could revert, then, to two or three items of interest to the member for Oak Bay (Mr. Wallace) , he referred to complaints that the cost of accounting -the payment that a person would incur to hire an auditor to develop these returns - is sometimes more than the amount of the tax. This could have been said once upon a time, but the exemption has now been raised from $25,000 to $100,000, and I don't think that's a fair complaint any longer.

The type of information the company has to develop to prepare a corporation capital tax return is not really much different to what is already necessary under the corporation income tax Act. There is simply a form to fill out which is not that complicated and, I would suggest, can be done in half an hour. As I said, the exemption level has been increased to $100,000.

Interjection.

HON. MR. WOLFE: Well, at the same time, Mr. Speaker, a corporation with a capital of $100,000 should be able to afford the minor degree of accounting expense involved in support of that argument.

Could we eliminate the tax altogether? We recognize that like any taxation it's not always popular, particularly so because it is incurred regardless of whether a company has a profit or does not have. At the same time, the revenue from this tax is approximately $35 million per year, which is about the equivalent of two points of personal income tax. So we have to supply some offsetting degree of revenue where we are to consider the possibility of eliminating it.

The cost to collect it, I'm informed, is something like $200,000 to $250,000 per year against the revenue. We must remember that the tax itself is deductible for federal income tax purposes, which is an added advantage.

The member for Nanaimo (Mr. Stupich) , Mr. Speaker, asked what would be the lost revenue derived from this amendment where we permit deducibility of exploration expense. The answer to that question is approximately half a million dollars.

He asked whether we've been approached by other areas of interest, other organizations. Certainly we have been approached by many, but none would meet the criterion developed in this amendment where there was an unfair lack of deducibility of this type of expense for corporation capital tax purposes.

With those remarks, Mr. Speaker, I move the bill now be read a second time.

Motion approved unanimously on a division.

HON. MR. GARDOM: Adjourned debate on second reading of Bill 4.

BRITISH COLUMBIA HYDRO

AND POWER AUTHORITY (1964)

AMENDMENT ACT, 1977

(continued)

MR. BARNES: Where is everybody going? (Laughter.) This is a very important topic, Mr. Speaker, and I was hoping that we would have exuberance and enthusiasm among the hon. members wanting to anxiously wait to hear my critical remarks about this bill that the Minister of Finance (Hon. Mr. Wolfe) so enthusiastically read and introduced for second reading. In fact, as I remember, he was suggesting that it was always nice to be able to move second reading of a bill so popular as the B.C. Hydro and Power Authority Amendment Act, 1977.

1 would just remind the Minister of Finance of the words of the Premier, who is himself suggesting that he has been concerned for some time about B.C. Hydro and that he feels it's like a big iceberg moving along out of control. He has indicated at times in the past that there has to be some way of controlling this monstrous corporation. From some of the comments that we have been receiving from consumers of B.C. Hydro services, he is not alone in those fears.

Now I've listened very carefully to the minister's outline of projects that were going to be undertaken or continued with the increased borrowing that is being asked for under this bill - an additional $650 million. I understand that there is approximately

[ Page 1349 ]

one-eighth of a million dollars presently remaining to be borrowed under the present authority, which would approach very closely an additional $1 billion in addition to the present debt that B.C. Hydro has, making it well in excess of $4 billion by the end of the present fiscal year.

No good citizen in this province would want to see Hydro, a Crown corporation, a public utility, in any way impaired or made to have to suffer needlessly in the carrying out of the services to the people. Some of the Projects that have been outlined by the Minister of Finance appear to be important, at least on the surface. It is being forecast that in the next 10 years the consumer and industrial requirements of Hydro services will double from approximately 26 million kilowatt hours to something like 52 million.

1 think the questions that we have to start asking in being consistent with other concerns that the government has itself expressed are: When do we begin to regulate those requirements? When do we take a look at trying to level off? If we're going to double the capacity of B.C. Hydro in the next 10 years, does this mean that in fact in another 10 years costs will also double? This type of logic doesn't seem to be all that responsible. Certainly if it is a fact that because of certain growth factors Hydro is running out of control, then maybe we should take another look at how Hydro is constituted as a public service, as a public utility, how it is managed.

Perhaps we should take into consideration, Mr. Speaker, some remarks that were made by the general manager of B.C. Hydro, Mr. J.N. Olsen, who was remarking recently in a report in the Victoria Times on February 11 of this year that Hydro rate increases are decided on by Hydro personnel, approved by boards and implemented unless cabinet intervenes.

Mr. Olsen went on to state that Hydro is not a power unto itself, despite popular believe, and that it is a creature of the provincial government. Well, I would agree with him in theory, but the only thing that perhaps isn't theoretical about his remarks is that it has turned out to be a creature of some very devastating proportions in terms of cost.

If, in fact, what Mr. Olsen is suggesting is that they are not an entity unto themselves with full authority to operate exclusive of cabinet opinion, then why isn't it that the cabinet is influencing the rate structures? The Premier suggested quite recently that he was concerned about the unwieldy nature of Hydro. Many citizens have been concerned over many years about Hydro's powers to expropriate and its seeming autonomous ability to make decisions and regulations that affect the incomes and the stability of, people's lives in this province. 1 would just suggest, Mr. Speaker, that if the government were to use the powers that it has, perhaps we could have some renewed support and enthusiasm for this Crown corporation.

1 think, in keeping with this possibility, that the government, instead of asking the Legislature to approve an additional capacity to borrow more funds, should also give the Legislature the opportunity to deliberate on rate increases as well. If B.C. Hydro in fact is not an entity unto itself and cannot operate without final approval of any major policy changes by cabinet, then perhaps the logic one should follow is that when it is making other major decisions that will have an impact on the consumer, the public, the real shareholders in the corporation, then the Legislature should have the opportunity to represent the realities that the rate increases will have upon the consumer. This certainly would be consistent with the government's pronouncements that it is a democratic government and is concerned about citizen input at the grass-roots level, that it is fiscally responsible, and that it uses scientific data and expertise in making all of its critical decisions.

If for no other reason than the fact that this government distinguishes itself as a business government as opposed to the prior government that it accuses of not being capable of running a peanut stand.... I am saying that this would allay any suggestions that perhaps what you mean by business is the example that you gave and that peanut stand is the limit to which your imagination goes, and that when you come to things like B.C. Hydro, the B.C. Ferry Corporation and other large public corporations, you become confused and myopic in your vision and have very little capacity to realistically regulate the affairs of such organizations.

So, Mr. Speaker, I am really appealing to the government not so much to undermine the important work of B.C. Hydro, because certainly the projects that have been suggested as having to be carried out are probably very important within limits. We, on the opposition side, feel that this government's abilities are limited when it comes to any imaginative change and innovative ideas about new alternatives and varying tradition to the extent that it will be responsive to contemporary considerations and problems. It just isn't good enough to suggest that the only way to cope with inflation or to cope with rising costs is to jack it up and pass it on down the line. It may be suggesting that there have to be some alternatives, some new ideas, some examples set by those in a position to lead and to make the decisions.

The chairman of B.C. Hydro - the former Attorney-General, a former member of the Social Credit Party, and presently a member of the Social Credit Party - Mr. Bonner, is suggesting that Hydro is not expected to lose money under the federal anti-inflation programme. He suggested that if a corporation is losing money it has the right to protect itself. That's a rather one-sided approach. If the federal government intends for inflation to be arrested on the backs of the people, who are in no

[ Page 1350 ]

position to have the input into most of the independent and exclusive corporations, as Hydro seems to be, then I would say you are not going to get the kind of support you need and the leadership you say you're going to give is rather wanting.

Therefore we don't have the commitment, we don't have the response, to your request that the public tighten up their belts and exercise personal restraint. We don't have that kind of co-operation and confidence in the programme that you're bringing in because you're not including yourself in those same restraints. In fact the record will show that when the government joined the federal anti-inflation programme, it very carefully excluded itself from the regulations that it was intending to impose upon the rest of the province right down the line. I don't think that very many people would doubt this, especially those who have to pay additional sales taxes, Autoplan insurance, those who are caught 'twixt and between Hydro, natural gas taxes, hospital insurance and so forth.

Now Hydro, of course, was excluded right from the beginning. 1 think that was one of the major ones that should have been included, if for no other reason than to set an example that the government was sincere. What is happening now, Mr. Speaker, is that if you were to carefully analyse the take-home pay of disposable income that the various individuals who are working have today compared to, say, one year ago when the government imposed all these new increases. I'm sure you would find that the wage increases they have been successful in winning through the federal guidelines, which probably were averaging about 8 per cent - in some cases maybe 10 or 12 per cent....

That difference compared to the impact of such things as automobile insurance, that was 300 per cent increased some, the hospital insurance, the social service taxes, personal income taxes and a host of many other things that were raised simply because the pressure on the dollar was perhaps doubled in some cases due to lack of consumer activity.... Indirectly, the end result was that as more people became unemployed because of the lack of activity, there naturally was a greater demand on goods and services because those people who were able to stay in had to demand more or go broke.

The kind of ripple effect that the policies of this government are having - and Hydro is no exception - has meant that we're having more and more personal and corporate bankruptcies. Businesses are folding all the time, especially the small entrepreneurial establishments. Those that perhaps are generating under $50,000 a year gross are beginning to find that it is very difficult with the costs being escalated and them having no protection.

Is this $650 million increase that the government is asking the Legislature to pass part of a scheme to improve unemployment? Is it related to the impact upon disposable income in the future? Does it relate to the present ability of people to participate in an economy that is going to become more healthy, or is it just an attempt on behalf of Hydro to continue to get itself deeper in debt? For all its good intentions -and certainly energy is vital to our community and to our society - I'm wondering if the government is just not doing a Band-aid job.

Now what you're asking for this evening is no exception, Mr. Speaker. The B.C. Ferries also have something like $200 million, I believe. If I'm incorrect on that amount you can explain, Mr. Minister, when you stand up, but I know that they have at least $1 million or so in addition that they will be borrowing. You have the B.C. Buildings Corporation that will be borrowing. In fact, all of your corporations are being extended in terms of their ability to go deeper in debt.

Now 1 would ask you to explain to the House how you rationalize this philosophy of permitting Crown corporations. . . .

Interjection.

MR. BARNES: You will get your chance in a moment, Mr. Minister. I hope that you will answer these questions because you've tried to convince the people of British Columbia that you spend only what you take in, which is fine, but how realistic is it? Are you finding that you're no different than any other jurisdiction in this country, that you too have to recognize that there are curves realistically predictable, curves that mean that you have high times of production and then you have those times when production is down or when activity is down and you have to deficit finance and sometimes you accumulate?

What you've managed to do - and I'm sure you're embarrassed - is accumulate money in things like the ICBC when you shouldn't have, and you're trying to sneak it back with rebates. In Hydro, it would be nice if you would play a game on the people and surprise them and give them something back, too.

Now I'm only looking at it from the standpoint of rational thinking. How can you logically argue that you're going to balance the budget at all costs when you extend borrowing with Crown corporations? 1 think that you should explain this because, as Mr. Olsen, the general manager of Hydro, has pointed out, Hydro is nothing more than a creature of the government and it has no ultimate power of its own. It is the government and the government is responsible. It's a Crown corporation and the shareholders are the people of British Columbia. Now if that's true, then you should show that in your balance book when you present to the people the budget expenditures - the $3.8 billion that you claim

[ Page 1351 ]

you're going to spend. Let's make sure that you spend no more than that come the end of this fiscal year.

MR. SPEAKER: Hon. member you're in your final three minutes.

MR. BARNES: I think that that.is the crux of the matter. It's not a question that expenditures do not have to be made, that there are not real problems in the community, that unemployment is an unreal thing because it's I 12,000, that we have to accept that. I think that you should come forward, tell the people what your overall fiscal plans are. Convince those of us in the opposition that you are rationally considering all of the policies that you bring out and the impact that they will have upon the economy, and your projected plans about improving and recovery. Don't just do a Band-aid job and ask for more money to get us deeper in debt. Unemployment is getting higher, and you're talking about things that are as abstract as guaranteed income which, as you know, is going to require co-operation right across the province. It sounds nice, and some people say: "Oh, yeah, great. We're going to get a guaranteed income." But that's unreal right now. What we want right now is an opportunity to participate. We have a rather paternalistic attitude, that I feel should be allayed somewhat by this government, in suggesting that it knows better what's good for the people than giving the people an opportunity to have some input. You're going to, I'm sure, ramrod this expenditure through after everyone has had an opportunity to express his concerns. Be that as it may, we will be asking the question, Mr. Speaker, over and over again: Is the government really staying within its budget? Is it really staying within the projected S3.8 billion it said it would spend in the next fiscal year'? Is it really that much more responsible, as a business-based government, than the previous administration that it accused of having no understanding about expenditures and throwing money away wildly'?

I would like to know what the budget would look like if they included all of the expenditures that they've excluded as saying they have no power over. You know, this is the kind of hoax that you should face with the voters of the province of British Columbia, and if they can accept your projections, with economic conditions the way they are, let's compare those expenditures with what you say you're going to do in improving the economy. Let's see how many jobs you are creating with these expenditures and see what ability we have to pay, because it takes money to pay for these expenditures. It takes money to pay for these debts. If unemployment is going up, I can't see where the taxpayers are coming from.

MR. SPEAKER: Hon. member, your time is up.

MR. BARNES: I will have, perhaps, some other remarks to make in the committee on this bill. In the meantime, I hope the minister will have taken note of the one question I asked him about the philosophy behind no-deficit financing. That's the one question that's been bothering me ever since you were fortunate enough to assume your portfolio.

MR. L. BAWTREE (Shuswap): It was not my intention, Mr. Speaker, originally to enter into this debate. I would have seen that the needs that Hydro has for sufficient funds to make sure that we do not run short of power in this province were obvious to everyone. But there were some remarks made which seemed to me rather emotional and I would like to clarify some of them.

I noticed the other day that the member for Cowichan-Malahat (Mrs. Wallace) made some remarks in the House in this debate. She mentioned the amount of land that was being used by B.C. Hydro, both for damming of the rivers and providing storage, and also for the areas that are needed for the transmission lines. Now I don't take exception to the figures that she produced at all. I'm quite sure that they were most likely accurate. One million acres was the figure that was given. But it is implied that a lot of this land is usable for agriculture. It is also implied that this land, once it has become flooded, is no longer going to be available for agriculture. Well, Mr. Speaker, this is not the case. If the need for that land and the value of that land, without water on it, becomes greater than the value for storage, then there's no doubt in my mind that the gates will be opened and that land will become available again. When it becomes available, whether it be five years or 100 years from now, the land will be much more productive and More usable, more valuable when it comes out from under that water than when it was originally flooded.

We have seen what happened in a country such as Holland during the last war, where thousands and thousands of acres were flooded with salt water and the land was destroyed for a short period of time because the land was salt. But it didn't take very many years to reclaim all that land and make it just as productive as it had ever been in the original instance. I'm sure we can do that much faster in this province. I believe it wouldn't take us more than 18 months, once we decided that that land is needed for growing food, to have it all back in production once again.

MR. GIBSON: Where would you get the power from?

MR. BAWTREE: I am assuming by that time, Mr. Speaker, we will have found a way to either harness

[ Page 1352 ]

the tides or some other form of energy which isn't even conceived at this point in time. We are surrounded by energy.

There's one point I would like to make, Mr. Speaker, with regard to the rights-of-way that B.C. Hydro uses. Everybody in this province seems to think that we want to keep a very healthy agricultural industry. Yet one of the simple things that needs to be done to enhance the grazing and the cattle industry in this province is to control the weeds and the brush on our hundreds and thousands of acres of right-of-way. Yet every time we turn around we have somebody complaining that Hydro is spraying the rights-of-way and controlling the weeds, and they don't want it done. They're saying in the one instance that we must have agriculture, and in the other instance they're tying our hands behind our backs so we can't use Hydro land.

I noticed that the hon. member for Cowichan-Malahat (Mrs. Wallace) also made the remark that you can't eat electricity. It's true that you can't eat electricity, but you're not going to eat very well in this province or in this country without electricity either. It is absolutely essential that we keep firm power available to industry.

The second member for Vancouver-Burrard (Mr. Levi) said that there is a responsibility by this government to enunciate that they are not going to be part of a policy of producing energy on demand by the various industries. Well, I can tell you, Mr. Speaker, if we don't have energy on demand, a great many industries in this province aren't going to exist. Last week, because of a power failure - not because it had anything to do with B.C. Hydro - there was one flock of pullets wiped out in the Fraser Valley in three hours because of a lack of power. That was $45,000 lost in that one instance alone.

Another thing that's being said in this House is that the McGregor diversion could lose for this province a great deal of agricultural land. I've indicated already that the agricultural land can be reclaimed. As far as diversions are concerned, diversions have been going on in this province and in this country down through the centuries many, many times over. People don't seem to realize that our river systems have changed many times. The North Thompson and the South Thompson did not originally flow into the Fraser. They flowed out through the Okanagan and flowed into the Columbia. So these things have changed many times and they will no doubt change again.

One thing that is of concern, Mr. Speaker, is the lack of opportunities for a lot of our local people in getting jobs on our hydro developments. The other day the mayor of Revelstoke, Mr. Sid Parker, appealed to B.C. Hydro to allow the people in his area to work on that project, whether they belonged to the union or not. This has been supported by the regional district; they are giving unanimous support to this same concept. 1 hope we can find a way of doing this because there are many other government projects which are not available to the people in my riding at the moment.

We have seen just lately some fairly large investments by some of our forest industry people. Those investments would not have taken place, they would not have been outlined at this time - even though they are just for upgrading their present facilities - if they thought that the power was not going to be available on a firm basis. Not only must that power be available on a firm basis, but they are under the impression that B.C. Hydro is going to be competitive in Canada once again in the field of power.

We are all unhappy, I'm sure - 1 know my constituents are - with the increases that we have seen in the Hydro rates and that it would appear are going to be continued because of the costs that are being borne by Hydro.

But although we are very unhappy with the increases in the rates, we don't seem to be prepared to do anything about the vast increases in the labour costs that Hydro has to incur. Many of the costs that Hydro incur are our own doing. We want Hydro to undertake more and more studies. We want greater and greater delays and every one of these costs us money. I'm not saying that some of these studies and these delays aren't necessary and worthwhile, but they all do cost money.

1 would like to close, Mr. Speaker, by saying that until somebody comes up with an alternative to the hydro power and the cost of that - unless we can find a cheaper alternative - then I'm sure that we're going to have to go along with the budget which Hydro is presenting us with and we are going to have to pay for these enormous capital costs, even though we would much rather find another way to do it. I would therefore support this bill.

MR. C. D'ARCY (Rossland-Trail): 1 certainly support the previous speaker's concerns that we have enough power in British Columbia to support our present industry and present economy and anything that we may be fortunate enough to develop in the future. What I'm concerned about, though, is that we are getting deeper and deeper into debt when we already have projects going which will, when completed, increase the capacity of British Columbia Hydro to produce and supply power into the provincial grid by 55 per cent. I'm concerned that that is going to give us a fantastically large overproduction of power and that we are going to be in a position of being forced to sell the secondary power at probably uneconomical rates to the United States, where they will produce jobs and produce prosperity with this very low-cost power for a period

[ Page 1353 ]

of time. We will have the debt, we will have the unemployment, we will have the flooded valleys and they will have the jobs and the prosperity. That's my concern.

I have long felt, and I felt this when the New Democratic Party was in office, that British Columbia Hydro should not be making decisions on power. They can make decisions - they're very, very fine engineers. They build wonderful power projects. But they should not be making decisions on whether those projects are needed in the first place. They should not be making decisions on whether a dam is built in a particular location, whether a dam is needed, whether a thermal project is built, or whether a. . . . I suppose it's a spectre to me, but I can imagine B.C. Hydro making decisions on whether a nuclear plant is built somewhere in British Columbia.

To enumerate some of the projects not fully developed or not onstream: the Mica project is only delivering half the power into the grid that it could and will deliver when fully complete; there are, of course, no generators installed in the Keenleyside Dam; the Kootenay Canal is not fully operational. In any event, we are not aware in British Columbia how much cash is available for these projects without a raised ceiling on borrowing. Certainly we do know that B.C. Hydro has considerable borrowing capacity now. We also know that British Columbia Hydro has a significant cash flow. Of course, at one time this particular party which at present holds office in B.C. was consistently running around talking about "pay as you go" and "only spending money out of cash flow, " et cetera, et cetera, and I would like certainly to have those figures. I would like to know what the resources of B.C. Hydro are to complete the projects that are presently started out of cash flow before I would like to vote on increased borrowing capacity for B.C. Hydro when they already have $3.5 billion worth of it.

We have become and are becoming more of a major power exporter. It's true, I suppose, that somebody could jump up and say we've recently cut off the exports of power to the United States which were being sold on an interruptible basis. But, Mr. Speaker, that was after four or five months of very unusual drought and, significantly, we stopped selling the power. But then we turned around - or B.C. Hydro did; Mr. Bonner announced it - and he sold the capability for producing power in the United States. They said: "We have no extra power to sell, but we'll sell you a whole bunch of water so you can produce it." I suggest, Mr. Speaker, that we cannot afford this kind of export industry. It is not the sort of export industry that we can afford in B.C., because we can't afford the borrowings. Our industry, our consumers and our public can't afford the kind of rates from B.C. Hydro that are necessary to support this kind of international philanthropy in terms of energy-developing in the United States.

Mr. Speaker, how long are we going to be saddled with these high interest rates and high debt payments that are going to shackle our ability to support ourselves in British Columbia at a reasonable standard of living? I suggest that British Columbia Hydro go back to the point where we once were in British Columbia, where we certainly once were under Social Credit - at least in B.C. - back in the palmy days of the 1950s, where we attempt to internally generate funds, at least until we absolutely know we need the power, at least until such time, Mr. Speaker, as some kind of responsible, independent source, like the B.C. Energy Commission, is making decisions on what kind of power requirements we have today and in the future.

We know that we are overproducing power right now. We know that we are going to increase our generating capacity by 5 5 per cent just by completing the projects which are presently under construction at Site I on the Peace River, on the Pend-d'Oreille River near Trail, on the Kootenay Canal, and at Mica. We're not even talking about Revelstoke Canyon here, and we're certainly not talking about Hat Creek. Those are extra.

We have no crisis of power. We have no shortage of energy. We have lots of power to sell. Because that water is being sold to the United States....

Mr. Speaker, I will just make as aside here. It was my opinion when the Columbia River Treaty was brought in, and it's my opinion now more than ever, that not only was that a bad deal in terms of power and flood control, but also the benefits to the United States of having the water in a usable form were never even figured into the matrix.

I suppose somebody could say: "What a funny thing to say. The water was going to get there anyway. It's all got to go downstream." The fact is, though, that if it comes down in controlled amounts, the water is useful for industry, useful for irrigation, useful for domestic consumption, useful for recreational purposes. That's one of the major reasons why the United States is prepared to pay for water. They're prepared to pay for water now, and B.C. Hydro isn't making the same mistakes that the former Social Credit government made. They know enough to sell that water because that water, which would be going down to the United States anyway, if we abandon, if we sign away our right to generate power in Canada with it because we don't need it at the moment, if we lower our reservoirs to the extent of 1.8 million acre-feet - and that's going to mean, Mr. Speaker, about a I 0-foot drop probably this summer in the Keenleyside reservoir in the Arrow Lakes - if we sell that to them, it's worth money because they can use the water. It has nothing to do with power at all - they must need the water.

But we will have a loss in Canada. We will have a

[ Page 1354 ]

loss in recreational values on the Arrow Lakes. People will not be able to swim on the beaches because it's going to be perpetually at low tide. You people who come from coastal areas and have a tourist industry in your riding care about tourism. How would you feel if someone lowered the Strait of Georgia artificially by 10 or 15 feet and left it that way all summer -left your mudflats exposed? That's what B.C. Hydro is doing to the Kootenays, all for some extra money. They don't care about fish spawning. They don't care about the recreational resource. They certainly don't care about the amenities to people who live there.

1 have done some short calculations on the kind of borrowing that B.C. Hydro has done. It is revealing because it shows the absolutely colossal growth rate. In the first four years, 1963 to 1966, the Authority borrowed $1.14 billion. In its second five years, Mr. Speaker, 1967 to 1971, it borrowed $2.6 billion. That was an unusual increase of 26 per cent and a total increase of 130 per cent. In its third five years, 1972 to 1976 - and this is rather significant because for three of those five years the New Democratic Party was in office and appointed the board of directors of B.C. Hydro - the borrowings of B.C. increased to $3.6 billion. That included the $500 million that the present government borrowed last year. That, Mr. Speaker, was only an increase of 40 per cent. Yes, Hydro continued to borrow money. Yes, it continued to build power projects, but the increases were held down to a reasonable level - only 40 per cent. That's an 8 per cent growth rate in the Hydro debt per year - 40 per cent over those five years. That was down from 130 per cent for the previous five years.

Now where are we going? The minister in charge of B.C. Hydro and the Minister of Finance have told us that in the next five years British Columbia Hydro is going to borrow $1 billion a year. That's a 300 per cent increase over what it was compared to 40 per cent when the NDP was in office. That's 60 per cent a year. That's what the debt load of B.C. Hydro is going to gain over the next five years - or so we have been told - if this government has its way.

Mr. Speaker, I don't think we can afford that in B.C. 1 really don't think we can. What happened to "pay as you go"? What happened to the no-debt government? What happened to the bottom line?

We have also been told - this time by the people at British Columbia Hydro themselves - that of the $5.3 billion the Authority will owe by 1981, 86 per cent will be totally borrowed and only 14 per cent will be internally generated. That's 14 per cent over the entire 19 or 20 years that would have been internally generated over that long period of time. All the rest will have been borrowed, Mr. Speaker, who are the spendthrifts? Who can't be trusted to mind the store? And who seems to be incapable of knowing what's going to be on the bottom line?

To be a little more graphic, in 1976 the Authority paid $213 million in interest alone, and that exceeded the gross revenues of as recently as 1968. Eight years before, the gross revenues didn't even come up as high as the interest payments on borrowed capita. By 1981, five years hence, the amount of interest will be approximately $500 million, and that's going to exceed 1976 revenues. Five years from now the interest alone will exceed last year's total revenues. Those aren't figures that I've pulled out of the air, Mr. Speaker; they are figures given by British Columbia Hydro themselves.

I repeat my request that Hydro should not be making decisions regarding energy requirements, regarding the cost of projects, regarding the type of projects, whether they be thermal, nuclear or hydro-electric, and certainly not on the location or the height. I think we should have an independent look at all the possible sites. It frightens me to think that the Authority could be looking at developments on the Clearwater River, at Moran on the Fraser, the McGregor diversion, and on the Homathko. These decisions should be made by public commissions with public input, public responsibility and, most of all, public accessibility.

With all due respect to the very, very competent engineers and civil servants, the comptrollers of water rights and their advisers, to Mr. DeBeck and his predecessor, Mr. Paget - I have a tremendous amount of respect for both those men; I have known them personally and known how hard they worked -- but really, Mr. Speaker, can we have them making major decisions, not just on whether or not you can build a dam in a particular area but on the sociological, environmental and financial problems that may accrue if water licences are given? I think it is an unfair thing to do when there are far weightier problems, normally completely beyond the terms of reference of even the most competent engineer or water comptroller whom the world could ever imagine.

Mr. Speaker, I believe that British Columbia Hydro, as I said, is an extremely efficient operator of projects and has extremely efficient engineers. I think it builds and constructs some of the most sophisticated and safe hydro-electric projects in the entire world. But the fact remains that it has a vested interest in producing power; it does have a vested interest in building dams and other generating facilities. While it should have the responsibility of building them, it should not have the responsibility of deciding where they should go and of what type they should be.

Getting down to more financial details, Mr. Speaker, I believe there certainly should be an assessment and an accounting done of the cost of power - power alone; not transmitting or distributing it but the cost of producing power - from every British Columbia Hydro source presently in place or

[ Page 1355 ]

under construction. This should be done by an independent public inquiry. Every dam in this province, and every thermal plant should be assessed and the costs broken down of producing firm power, peaking power and secondary power, and should be put into a matrix. Secondary power is the power which I mentioned earlier, the kind that you sell on an interruptible basis. In our case, we sell it to the United States and, I suppose, occasionally to private industry as well. But all that should be put into a matrix so that a frank and very candid assessment at last can be made of the actual power generating costs in the province of British Columbia.

Nobody has ever been able to make an accurate assessment of the real and continuous costs of producing power in the Bennett Dam, from the Kootenay Canal, from Mica Creek or from any major power project that B.C. Hydro has constructed. And no one has assessed the projected costs of power from projects presently under construction such as Revelstoke Canyon, Seven Mile and Site 1. No one knows the potential cost of producing power from the Keenleyside Dam, from the Duncan Dam and from such undeveloped, low-level sites on the Columbia as Murphy Creek and Fort Shepherd. We have a tremendous amount of upstream storage available to us.

I think it's entirely feasible that we could, say, put on the computer the costs of maintaining flood control for Bonneville Power downstream and for protecting ourselves. I believe, Columbia treaty or no, we owe the Americans total and complete flood control. What we don't owe them is their determination to maximize their power, their irrigation, their recreational benefits and their use of water at our expense, the expense of potential power generation in Canada, at the expense of recreational benefits here and at the expense of our future needs f or the water itself that's in the river. That's what has been happening up to this point as long as the Columbia River is administered by British Columbia Hydro and not by the water resources service of British Columbia.

We might find out, for instance, that if we didn't use the full storage capacity on Duncan and Keenleyside, whatever losses we might accrue in revenue for extra power generation would be more than compensated for by the extra peaking power and extra firm power we might get from those projects. The point is, Mr. Speaker, we don't know that this is true; we don't know that it's not true. We should have some accurate assessment to find out what it would mean if we held our reservoirs at a somewhat higher level, if we maximized the benefits of our rivers to our communities and the controls we have on them, still guaranteeing flood control downstream - what benefits might there be, and what costs might there be? - and find out if we come out ahead or not. I'm of the opinion that we'd be a long way ahead if we did that. Mr. Speaker, I believe that there has never been a rational analysis of cost of power delivered into the provincial grid from, , any given generating site, whether it be fully developed, half-developed, or undeveloped, and whether it be thermal or hydro.

We have invested $3 billion up to last year, and these are some of the major reasons I'm not going to be supporting this bill. More than that - we've borrowed $3 billion and invested more than that in generating facilities alone. Yet we know nothing of the exact cost of power from each individual site, and I find that absolutely incredible. No one is even sure of the composite cost. We know of the total cost of operating the power system of B.C. Hydro, but it's not broken down into transmission costs, load-centre costs, regional distribution costs and generating costs.

So not only, Mr. Speaker, is there no planning for the future, but there is no assessment of the past. We haven't even given ourselves the benefits of hindsight. Disregarding the biggest fiscal blunder since the sale of Manhattan Island, Louisiana and Alaska put together, which is the Columbia River Treaty, in my opinion, why is it we do not know objectively what power from the Columbia or Peace actually costs overall when broken down site by site?

Why don't we know that? I'm sure that the minister who's presenting this bill to the House not only doesn't know the answers to these questions, but I'm sure he didn't even know the question before. I think possibly the Minister of Energy knew the questions - he doesn't know the answers either -because he knows something about energy from his experience in the federal field and his experience with the British Columbia Electric Company before the former Social Credit government pulled the rug out from under him.

Mr. Speaker, I think that we should have this analysis because I think that somewhere in the party across the way there are some people who really do believe in fiscal responsibility. It's not just a rhetorical line to hand the people of the province. I think they should tell themselves and tell the public exactly what power is costing us.

Finally, when we know what that assessment is, I think we should have some assessment in what it costs to transmit power, delivered from the Peace area, for instance, to the lower mainland, what it costs to transmit power from the Kootenay area to the lower mainland. Because the Peace River area and the Kootenays have never received any benefits from their massive power exports to the rest of the province. All they get is the privilege of buying power at the same rates that everybody else does.

It seems strange, Mr. Speaker, that when we're fighting for a refinery price for gasoline and fuel oils you would add on the real cost of transporting it to

[ Page 1356 ]

other parts of the province. Those parts of B.C. which are keeping the province going in terms of electrical energy are receiving absolutely no benefits from the fact that they have those power-generating plants there. Not only do they not get any sort of preferred rates, but the areas in which these plants are located get absolutely no tax benefits whatsoever.

My colleague from Victoria has made a number of very good speeches in this House about how the provincial government owns massive amounts of property in Victoria and other parts of B.C. and they only pay grants in lieu of taxes - perhaps 15 mills. The member for Hudson Hope ~Hon. Mr. Phillips) over there, I'm sure will be very much aware of how much money the W.A.C. Bennett Dam pays into the school district in his riding and into the regional district in his riding. It's not 15 mills, it's zero mills. There is no assessment and there is no mill rate whatsoever. But I know he's fighting for those areas; I know he's trying to see that there's some taxation on that basis.

I think, Mr. Speaker, that when we know the cost of transmitting power and distributing it there perhaps should be some rationalizing in terms of rates for people living near power-generating sites so that some benefit accrues to the areas that have them. Even areas which are mining coal, areas which are producing oil, areas which are producing timber products - all the basic natural resources of British Columbia going to the benefit of all the people of British Columbia.... At least some of those benefits should stay in the area in which they're generated.

It's not so with power in British Columbia. None of those benefits stay there - in fact, you lose. You lose bottom land, you lose agricultural land, you lose the recreational land and economically, particularly in the case of the Mica reservoir, there's an absolutely massive total and continuous loss of a great timber resource in the area.

That's not a reason, Mr. Speaker, for not having built that dam - I'm not advocating that. What I'm suggesting, though, is that a tremendous economic loss has been visited on the people of the northern part of the West Kootenay district and even part of the area of my friend from Shuswap (Mr. Bawtree) who spoke last, which will absolutely benefit nobody in the area. It has led to unemployment, lack of development and a general lowering of the quality of life and the standard of living in those regions.

We have two graphic examples of the taxation problems right in my own riding. On the Pend-d'Oreffle River we have one completed project at Waneta, owned by Cominco Ltd. and one partly completed project known as the Seven Mile Dam, which is, in fact, nine miles upstream. The power project pays $800,000 a year into the coffers of the regional district of Kootenay-Boundary and the school district of Trail. The project upstream pays, and will pay unless there's a major change of policy by the government, absolutely nothing. Two dams, approximately the same height, generating approximately the same amount of power on the same river: one pays $800,000 a year, each and every year; one pays nothing.

In the other regional district and school district in my riding, Mr. Speaker, we have a similar situation. We have a dam at Brilliant on the Kootenay River. It pays $600,000 a year to the school district of Castlegar and the regional district of Central Kootenay this time. Five miles away, on the Columbia River, there is the Keenleyside Dam that denied a massive amount of revenues from land taxation to local government, cut down a major contract logging industry - well, there are no contract loggers left, Mr. Speaker, on the lower lake. We lost our beaches, we lost our sport fishing industry, and that dam sits there, partly within the city limits of Castlegar, and pays absolutely nothing, whereas five miles away, a privately owned power operation pays $600,000 to the school district and to the regional district.

If we expect our private corporate citizens to be good corporate citizens, I think it's very reasonable to expect our public corporate citizens to be the same way. Other Crown corporations do pay taxes, or some do. B.C. Development pays taxes and Canadian Cellulose pays taxes at the same rates as everyone else. I see absolutely no reason why British Columbia Hydro can't and shouldn't be expected to do the same.

I would like to once more renew a plea to the Minister of Finance and the Minister of Energy, Transport and Communications that they seriously consider a slowdown in construction of power projects in British Columbia until an assessment -certainly a reappraisal, or maybe it would be a first appraisal because I don't know of any accurate appraisal that's ever been done - of what our power requirements are today, what they will be, how much is going to be added by what is under construction today, what it is costing us, and what the real cost of power delivered to the major load centres is. Because the apparently theoretically very positive idea of a postage-stamp rate for power in British Columbia, in my opinion, has militated economically and environmentally against those areas that produce power - like the Peace River region and like the west Kootenays - and very much in favour of the rest of the province where the jobs and the prosperity are. We have all the problems. Other people have all the power and all the wealth that comes from the power being delivered at a postage-stamp rate. I don't think that's fair and I don't think it's reasonable. A start would be made if the B.C. Hydro and Power Authority started paying its taxes.

The last time I spoke on this, the Finance minister

[ Page 1357 ]

turned to his deputy and got up and said: "Oh, but B.C. Hydro does pay taxes. It pays taxes on substations and that sort of thing." It's true. It does. And it's a typical answer from a member of this House who comes from Vancouver and understands the situation in Vancouver but doesn't understand the situation where the generating facilities are and where no taxes are generated at all to local government or to education.

The government should seriously consider this because if they're going to live up to their claim to be fiscally responsible and if they're going to live up to their claim to care about the bottom line, they are going to at least arrest the rate of growth of B.C. Hydro borrowing until we have this kind of assessment. Why can't we go back to an increased borrowing rate of 8 or 10 per cent a year or even 20 per cent a year, instead of going back to the rate which we're going to now of 60 per cent a year, and a billion dollars in borrowing added each and every year for the next five years? I don't think this province can afford it. That's too high. It has to be held down and it has to be cut back. I'm not saying we should stop hydro-electric development in this province. I'm just suggesting that we seriously consider slowing it down until we can afford to build new projects. Let's complete the ones we have now then stop this ceaseless borrowing until we can be generating the revenue out of cash flow for new projects.

Let's remember that we're not talking about the right to borrow just $6.15 billion. We're talking about the right to borrow $6.15 billion in addition to whatever extra moneys may be available out of retired debt. Of course, original debt is being retired all the time - debt that stems from 1960,1961,1962 and 1963. That's being retired, and B.C. Hydro has that power to spend that capital without this bill. We're just talking about extra borrowing power. So for those members of the House who believe we're only talking about giving Hydro the right to borrow $6.15 billion in the next fiscal year, or over the next year of so, we're not talking about that. We're talking about that much in addition to borrowing power it already has and flexibility which it already has.

MR. D.F. LOCKSTEAD (Mackenzie): I have a few brief remarks on this particular bill, primarily to do with two or three items in my constituency. Mr. Speaker, while I was doing research on Hydro generally, I came across some articles out of The Vancouver Sun. I think it would be worth quoting to the House some of the things that were said as long ago as 15 years ago in 1962. In 1962 during the course of the throne speech debate: "The Speech from the Throne today indicated Premier Bennett" -this is the former Premier, obviously, W.A.C. Bennett - "still has no intention of bowing to Ottawa on the Columbia River issue." He is quoted in the speech as saying:

"Early ratification by the Parliament of Canada of the Columbia River Treaty, together with the completion of arrangements for purchase by the United States of the British Columbia share of new power generated in the United States, will enable my government to call tenders for construction of the necessary works without delay. The resultant production of extremely low-cost power at site within British Columbia will be of immeasurable benefit to the people for generations to come."

The speech continued.

However, Mr. Speaker, on that same day in Ottawa the External Affairs minister, Mr. Howard Green, after having learned of what was said in the speech said: "Premier Bennett appeared determined to keep cheap power out of British Columbia." He said the B.C. government was "out to force the more expensive Peace River power on the consumers of the lower mainland." Mr. Speaker, I want to point out to you that Mr. Green was right and the former Premier, Mr. Bennett, was wrong. We are now paying for his mistakes with this bill that's before us today -the $560 million. It's unbelievable!

Interjections.

MR. LOCKSTEAD: Oh, $650 million - okay.

Mr. Speaker, I think it's worth quoting as well the former leader of our party a few days later during a course of a speech on that very topic. I quote from The Vancouver Sun, dated January 30. "Strachan said in the Legislature that Keenleyside, in a Nanaimo speech, recently gave the impression that the late A.E. Dal Grauer supported the government policy of selling Columbia River downstream benefits to the United States."

I want to tell you, Mr. Speaker, that Mr. Grauer was quoted as saying:

"It would seem to be sound policy to keep the cheapest power for British Columbia and to stimulate the economy and economic development here, rather than export that cheap power to the United States. The cheapest power seems undoubtedly to be the downstream benefits of the Columbia River.

"There might be some pressure from the United States to buy Canada's share of the American generating plants where it is produced, rather than returning it to Canada. To succumb to such pressures would be, in my opinion, a tragedy" - I'm quoting Mr. Grauer, Mr. Speaker - "that has never seen the like in British Columbia."

Quite frankly, Mr. Speaker, the facts have proven this to be the case as well.

[ Page 1358 ]

Finally, I have one last quotation from the former Speaker of this House, Mr. Dowding. This appeared in The Vancouver Sun on February 9,1962, as well: "Gordon Dowding read conflicting power statements issued today by Bennett and the past years. He told Bennett: 'Your power policies are a complete and utter shambles and a hoax.' " Well, they were and they still are and we're still paying for those mistakes, Mr. Speaker.

"Dowding read a 1956 press statement by Bennett in which he declared himself against" - this is 1956 now, remember - "the export of B.C. power. Dowding quoted Bennett as saying: 'All of the power would have to stay in B.C. On top of that we would want a return in power, not cash, from generation downstream that is made possible by the shortage of water in British Columbia."'

MR. GIBSON: Who said that?

MR. LOCKSTEAD: Gordon Dowding, former Speaker of this House. He was quoting the former Premier, W.A.C. Bennett, in 1956.

MR. BARRETT: And nothing is freer than free, my friend!

MR. LOCKSTEAD: Dowding recalled that "Bennett's stand now is for the sale, in the United States, of B.C.'s downstream benefits."

Dowding also quoted Bennett's remarks on October 17,1956, as reported in the Sun:

"Premier Bennett said Tuesday that he has asked the federal government to ban export of hydro-electric power from British Columbia. 'This request, ' the Premier said, 'was to make doubly sure that the future power needs of Vancouver and other parts of B.C. would be adequately met.'

"But the Burnaby member went on to quote the late Mr. Dal Grauer, former chairman of the B.C. Electric. He said: 'Grauer said it would be financially impossible for any one agency to undertake development of the Peace and Columbia Rivers simultaneously.' "

Well, Mr. Speaker, events have once again - and today's bill, I think - proven that prediction. As my colleague pointed out here a few minutes ago, the fact is that the secondary and primary industry was developed in the United States based on our power, the jobs were created in the United States, and very little of that work was created here in Canada, and in British Columbia particularly. The power policies have been disastrous, as we well know.

Mr. Speaker, there is another topic I'll just dwell on briefly. It's been covered to such a large extent in this House, but I think it's worth - particularly in this instance - discussing it briefly again. I'm assuming some of this money that is t10 be borrowed will go through for the proposed dam on the McGregor River. The fact is that the two members of the United Fishermen and Allied Workers' Union in my riding, one Mr. John Daly and Mr. Ray Philips, at their own expense, last December took a trip to Prince George and met with people in that area regarding the proposed McGregor dam diversion. They were concerned, Mr. Speaker, because they had been fishermen all their lives. Mr. Daily has been in the industry for 5 1 years of his life. He has spent 5 1 years in the fishing industry on this coast and he has a concern, as most fishermen do. They met with people in that area, at their own expense, spent a considerable amount of time, and they came back and, as recently as last Sunday, sent a telegram -after a meeting of 59 fishermen was held in Pender Harbour last Sunday - to the Premier and to the Minister of the Environment, Mr. Nielsen, opposing the proposed McGregor dam as a threat to all future commercial and sports fishing on this coast.

Interjection.

MR. LOCKSTEAD: A member says that they're an NDP front group. Well, I doubt that very much.

Mr. Speaker, I think it's worth quoting as well -we have quite a bit of information on the proposed McGregor site, and I'm certainly not going to go through all of that this afternoon - but I think this one quotation from this famous Mike Halleran article which appeared in The Vancouver Sun on April 9,1976, is worth quoting. It's very short:

"Hydro has described this project as economically attractive. Bonner says the McGregor diversion on the upper Fraser is another proposal currently under construction at Hydro. Like heck it is. It has been planned for years. The basin is being logged now to make way for it, and when the Gordon Shrum powerhouse was built at the W.A.C. Bennett Dam 10 years ago, provision was made for the extra head McGregor diversion energy would provide. Does Bonner know that by proceeding with the McGregor dam we could be activating an ecological timebomb?"

Well, there is a conflict of statements there, and I hope that when the minister gets up to close debate on this bill, Mr. Speaker, he will clear up some of these matters.

One last item on the McGregor. This is a most recent article in The Vancouver Sun again, February 23,1977, and I'll just quote the three lead paragraphs:

"The Fraser River salmon fishery could be reduced by more than 25 per cent by proposed flood control projects at the northern B.C.

[ Page 1359 ]

headwaters of the river system, say federal fisheries experts.

"That would translate into an annual loss of $6.4 million on the commercial fishery with a wholesale value of about $40 million annually. Declines in the prized Sockeye catch would generally exceed those of other species -chinook, Coho, pink and chum.

"The projections are made in a report prepared by the Fisheries and Marine Service, a copy of which was obtained Tuesday by The Vancouver Sun."

So you can see, Mr. Speaker, we do have reason for deep concern on some of these matters.

Something else that has not been discussed at too much length in this House, Mr. Speaker, in recent times anyway.... I have here a copy of "Fish Power Studies, Northern B.C. and Yukon, " a preliminary report prepared by the Department of the Environment Fisheries Service. In this report, the section that concerns me.... The whole thing concerns me, as a matter of fact, but the section that's of great concern in the northern parts of my riding is a proposal where they're discussing the diversion of the Dean River into the Nechako water system, Mr. Speaker. I want to tell you that the Dean River is a major salmon producer in this province as well as one of the most favoured of the steelhead fishing rivers in this province.

I have in my files numerous pieces of correspondence, particularly from fishermen living in that area - and there are many hundreds of fishermen living in that particular area of my riding, Mr. Speaker - who were greatly concerned when this report was finally made public. At least, we obtained copies. I'm not sure it has been made public. Anyway, we do have copies of it. They are deeply concerned about the diversion of the Dean River into the Nechako water system, and I hope, Mr. Speaker, that when the minister is closing debate on this bill he would assure this House that that particular project, and the money now being borrowed, will not be to divert the Dean River into the Nechako River system. I don't think I've got his attention, Mr. Speaker; however I see the deputy is taking notes so I'm sure I'll get an answer.

Before I sit down, Mr. Speaker, I just want to quote from another report I've received which I think may be of interest to this House. It was prepared by Environment Canada, Ottawa, 1976: "Images of Canadian Futures: The Role of Conservation and Renewable Energy."

I would like to quote just two or three paragraphs that may be of interest, Mr. Speaker. On page 81 we have:

"An unfortunate aspect of renewable energy and conservation policy-making has been the absence of planning input. Unlike the situation with respect to non-renewable energy resources and hydro-electric power, the development of unconventional sources has been hindered by a dearth of planning. Even where it has taken place, it has been small-scale and not co-ordinated. As a consequence, the management of renewable energy resources and conservation has suffered from an insufficient implementation of available technology, an inability to stimulate public awareness, and lack of government commitment."

1 think that's a very apt quote, particularly in view of the type of monster we have over at B.C. Hydro today, Mr. Speaker. One other quote from page 82 of the same publication:

"Energy resources are income-producing assets. However, since some of these are non-renewable and rapidly becoming exhausted, their exploitation must be carefully controlled. Taxes, royalties, licence fees and other charges can be used for this purpose. There are numerous illustrations in the oil, gas and electric power industries in Canada of various kinds of levels being imposed by both federal and provincial levels of government.

"Generally, these changes have been effective both in regulating production and in providing revenues for the administrative programmes of various governments. Taxes, royalties and other charges could play an important role in the development of renewable energy resources. For example, such disincentives might be levied against non-renewable energy resources that are nearing exhaustion, and the revenue so derived could be used to stimulate the adoption of renewable alternatives"

Well, the whole question and matter of energy alternatives is a lengthy one, and I know we have dealt with them at some length in this House. I don't propose to deal with that at this time, but I do hope that the minister and the Minister of Energy will look at alternative sources of energy.

Finally, Mr. Speaker, one last article. Once again we seem to be favouring The Vancouver Sun today, but on January 11,1977, we have an editorial entitled "Topsy-turvy." I won't read the whole thing, but the last paragraph of that particular editorial says:

"Why do we have this topsy-turvy situation? Because Hydro is its own master. Because it does not have to justify its rate increases or its rate structure to anyone. Perhaps during the coming session of the Legislature the government might see fit to change that."

1 do hope, Mr. Speaker, that some time during the course of this session, the government will make

[ Page 1360 ]

Hydro accountable to the people of this province and to this Legislature in a manner that a democratic system and society demands.

Anyway, Mr. Speaker, we haven't had too many people from the government side speaking in this debate. In order that some of these people may prepare their notes and go to their offices to get their notes, I'm going to move adjournment of this debate until the next sitting of the Legislature.

AN HON. MEMBER: Of the House!

MR. LOCKSTEAD: Of the House. Next year's fine.

Motion negatived on the following division:

YEAS - 18

NAYS - 29

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

MR. COCKE: Mr. Speaker, the hope was, of course, that the government would support their own bill. It would appear that they're not really in that kind of a mood. But we are suggesting, Mr. Speaker, that there are a number of dimensions here.

One of the dimensions that I would like to discuss for a moment or two is that we are heading on a path leading to bigger and better dams, bigger and better energy forms, we are locking ourselves in, in my view, to a future without alternatives.

Mr. Speaker, I truly believe, as I'm sure you rather believe at this point, that there are alternatives. As a matter of fact, I recall listening to a speech with you one day on this very question by a very well-informed individual. And I refer to a speech we listened to in P.E.I.

1 listened to the Minister of Finance call across the floor that many of these areas were areas of previous government commitments. Mr. Speaker, I see us meeting our commitments; I see us borrowing money. But, Mr. Speaker, how can 1 endorse that without seeing B.C. Hydro do some innovative work? How can I endorse that, seeing B.C. Hydro in exactly the same position as almost all power generation authorities across this country and, for that matter, across the two countries, side by side?

Mr. Speaker, it strikes me that major allocations have to be made now to research alternatives. 1 hear people paying lip service to the possibility of geothermal power. 1 hear them talking loosely about tidal power. 1 hear them whispering from time to time about solar power. Mr. Speaker, what are we doing about it? What's Hydro doing about it? What kind of commitment has Hydro got to researching alternatives to present methods of producing energy? I hear nothing coming out of that ivory tower that even the Premier admitted is nothing much more than that. The premier said - if I can paraphrase what he really said - that the government has no control over Hydro. He says that whatever Hydro wants to do Hydro does. Mr. Speaker, one way this Legislature has some power over Hydro is to suggest to Hydro: get your act together or you're not going to have the borrowing. Pure and simple.

Mr. Speaker, I'm not talking about taking $100 million out of the $500 million that they're asking for. I'm not suggesting anything like that kind of figure be the figure we're looking at. But 1 am suggesting that Hydro, along with the other power authorities on this continent must seek other non-polluting methods of developing power.

We happen to live in a very fortunate area with respect to geothermal power. If you were to suggest geothermal power for Saskatchewan, you'd be talking about having to go down 20,000 feet and, once down there, you'd have to put an atomic bomb in to create a cavity so that you could heat your water that you would very likely have to introduce. But when we're talking in terms of the west coast where the heat section or part of the core of the earth is much closer to the surface, then it seems to me that we should be doing a great deal more work in this regard.

AN HON. MEMBER: Hear, hear!

[Mr. Veitch in the chair.]

MR. COCKE: A great deal more. When we were government, we asked Hydro to put a reserve on as many areas as was possible. And I believe they did. At least here we aren't suffering with what's happening in the United States where the oil companies and other resource developers are the ones that are claiming some of what appear to be areas of potential

[ Page 1361 ]

geothermal power. You must go beyond that; you must start developing research in production of power in ways that we're not producing now.

I worry terribly about atomic power. The only thing I hear coming out of Hydro is: 'Well, we've got two choices.--- That's really what they're saying. They're talking a little bit about thermal power -maybe they can use Hat Creek, maybe they can't.

Interjection.

MR. COCKE: I agree. It is a blackmail situation -emotional blackmail - when we hear as an alternative to hydro atomic power, which not very many people in either the lay world or the scientific world really trust. 1 don't believe that there are very many people in this country who trust atomic power. One of the reasons for that is that even those people who are in authority and even those people who have been working with atomic power for some years cannot come up with what 1 consider necessary, and that's a guarantee of how you're going to get rid of the waste. They just can't say how they can do it safely, and that's not quite good enough.

1 am suggesting that Hydro, in order to justify some of these long-term objectives that they are giving us now, should go one step further and say to us: 'Ve will thoroughly research alternatives.- People smile when you talk about wind power. It strikes me that there are areas in the world where they tie in wind power from one area to the next and they are producing some power. Maybe it's not the best source of energy but it strikes me that a number of these areas should be researched and possibly tied in in the future. 1 don't really think that I have great confidence in B.C. Hydro, who have set their course arbitrarily and set their course in such a way and with such authority and with such power that even the Premier has to say: 'Ve really have lost control." He didn't say it in those specific words but he certainly indicated that that was the case - that Hydro was an authority and a power unto itself and so, therefore, people should look forward to more of the same. There are faltering steps that Hydro puts forward, suggesting maybe this and maybe that, but, Mr. Speaker, it's all faltering. 1 think that in order to justify this kind of a loan - this monstrous increase again - it's time that Hydro told us that they are going to do something better than what they've done before. What are they telling us right now? I'll tell you what they're telling the people in New Westminster. They are telling the people in my constituency: "Watch out for your salmon industry." They're telling the people in my constituency: "Watch out of your salmon industry." They are telling those fishermen in Delta: "Watch out for your salmon industry." It goes without question that if you divert the McGregor, you'll increase the temperature of the Fraser River. They admit that they will cut the salmon run by 7 per cent, but it's going to be a lot more than 7 per cent.

Interjection.

MR. COCKE: Mr. Speaker, it's really no laughing matter. It's a very serious matter. I'll tell you it's a very serious matter to my constituents, when we see this kind of power being vested in an authority like Hydro. Really and truly, do they need all that new acreage of water behind the Bennett Dam? I suggest to you that the likelihood is no. I doubt very much if it will produce the kind of energy potential that they want it to. Mr. Speaker, I would like to see the Fraser River left alone - no McGregor, no Moran. "Start getting innovative, Hydro" - that's what this Legislature should be saying. All this Legislature has to do is say to Hydro: "Get off your fat backside and get on with some new and innovative thought process and some new and innovative direction."

AN HON. MEMBER: Fire the chairman.

MR. COCKE: An excellent idea, Mr. Member. "Fire the chairman, " he says. That's a very good start.

AN HON. MEMBER: Garde can take the job. He's next in line.

MR. COCKE: I really worry when all the people who are really in the know in this whole development of energy are beginning to get worried and are saying it out loud. Mr. Speaker, you and I sat and listened to an engineer in Charlottetown and so did the other Speaker who was sitting there just before you. Three or four of us sat and listened to a man tell us that if we don't make some room now - today, this very day - for development of alternatives, we will forever regret the course we've set. The course we've set is so expensive, so demanding of money, that there will be nothing left for alternatives all down the road. It would be kind of nice - I think I could be a little bit proud - if our provincial energy producer said: "We are going to start to lead, rather than follow."

Mr. Speaker, it's easy to say you can dam up a river and you can get power out of that river. They were even talking about damming the Fraser at Moran. Had they done that, they would have had power for 20 or 30 years. After that the dam would have been filled with silt, of absolutely no use to anyone. Think of the cost. There was serious consideration given by that corporation.

Mr. Speaker, any dam ultimately is going to become less and less effective. Some will last a long time where a stream is clear and there isn't going to be that much silting, but all of them eventually peter

[ Page 1362 ]

out. We are given an earth that we hope to live on from generation to generation. We do owe something to those people down the road - not our kids and their kids, but I'm talking in terms of away down the road. We owe something to them. We owe them some decisions around alternatives that only we can make. We can't ask them 5 0 to 100 years from now to make the decisions if we set a course of action from which there's no return.

1 suggest to you, Mr. Speaker, that there is no return, there's no way around once you've set a course that's so money-demanding. You have no room for any kind of alternative, even if you can research it. People become preoccupied with directions that they feel uncomfortable with. They don't want to consider change - and I'm talking about all levels, all walks of life - because with change one becomes a little nervous. You hear the snickers, you see the smiles around some of the alternatives that have been suggested, particularly when people talk about solar heat and wind.

We saw a house, Mr. Speaker - you and 1 - not far from Charlottetown. It's a good innovative proposition, in my mind, utilizing all sorts of different kinds of power. We were impressed, Mr. Speaker, weren't we? We were most impressed. Sure, it was a wee, wee project, a very small project. 1 suggest to you that that in microcosm is what we need - people thinking along those lines. There was wind power utilized there.

Incidentally, remember what they told us. They said: 'Ve can generate this wind power but we don't think that Hydro" - they're Hydro down there - "is going to reciprocate. When we're feeding into the system, we don't think they're going to counter-bill, or that we can bill them. They'll bill us for any utilization of power that we cost them, but we don't think. . . ." 1 hope that Hydro down there has gone a positive way in that respect.

Yes, we saw them using other forms of power. We say them using solar power. We saw them trying in a faltering way to develop alternatives, Mr. Speaker. 1 was proud that the government of Canada was involved in that. 1 was delighted. But, Mr. Speaker, tell me, when have you ever seen B.C. Hydro do anything like that, anything innovative at all? They put ads on the television; they put ads on the radio. "Conserve power, " they say. It wasn't very long ago that 1 can remember those ads saying: ---Buy a new washer! Buy a new dryer! Use lots of power!" Well, at least they've backed off that a little bit, but they've got to go way beyond that.

Why don't they put some of this money to work in development of alternatives? There are, there must be, there are going to be alternatives. 1 have a great deal of faith in humanity; 1 have a great deal of faith in mankind. 1 believe that mankind, if given an opportunity, if given a few bucks, can go to work on some alternatives.

I just desperately wish that we could hear something else coming out of Hydro other than damming the McGregor and damn the consequences. 1 would like to see, something come out of Hydro that would say: "Yes, we're going to really try to develop alternatives." It's not too much to ask, and it's certainly the time to ask it, Mr. Speaker. They're asking us to boost their borrowing power another $500 million.

Interjection.

MR. COCKE: Oh, $650 million? Even worse.

Mr. Speaker, 1 can recall when we were government and Hydro went out and did a little borrowing.

MR. JJ. KEMPF (Omineca): The people of British Columbia can remember it, too.

MR. COCKE: I can recall the hue and cry and the screams from choked-up people like the member for Omineca, bless his soul. He hasn't been up fighting for this borrowing. 1 hope he gets up, 1 hope he shows us what a mighty fighter he is on behalf of Hydro. But 1 hope when he gets up he's going to put some kind of demand on Hydro and say: "Sure, Hydro, we're going to help you, but we want you to help us and future generations. We want you at the same time to develop some alternatives to this present system that's taking us down the road of no return." I'm sure that all those mighty fighters will be up making suggestions to the chairman of Hydro. I'm positive of it; 1 just feel it in my bones. They'll be doing it, Mr. Speaker, and we'll be right along with them.

In order to give them a chance to put their arguments together, 1 suggest that they go to their offices, put their notes together, and in order to give them that opportunity 1 move adjournment of this debate until the next sitting of the House.

DEPUTY SPEAKER: Hon. member, as you fully well realize, it is an abuse of the rules of this House to ask for a further adjournment. The House has already decided that question.

MR. COCKE: Yes, Mr. Speaker, on your ruling, or on your judgment - I'm not sure which it is at this point - but there has been intervening business. There's been intervening debate. 1 ask you on what basis you make such a ruling.

MR. KING: A further point of order, Mr. Speaker. 1 submit that the question of abuse of the rules in moving adjournments is a very, very subjective one. 1 note that the Speaker has not been able to refer to the standing order upon which he based his initial

[ Page 1363 ]

judgment. In light of the fact that there has been intervening business, in light of the fact that the government itself has moved from estimates to bills in very rapid and apparently unco-ordinated fashion, I think that the motion should be allowed to proceed.

MR. GIBSON: Mr. Speaker, on this point, I would draw your attention to standing order 34, which states that a motion to adjourn, except when made for the Purpose of discussing a definite matter of urgent public importance, shall always be in order, but no second motion to the same effect shall be made until after some intermediate proceedings shall have been had. Of course there have been intermediate proceedings. On the face of it, under standing order 34, the motion is in order.

DEPUTY SPEAKER: Hon. member, it has been a practice of the chair to refuse a motion when there's been just a short intervening business. However, I will allow the motion to proceed.

[Mr. Speaker in the chair.]

Motion negatived on the following division:

YEAS - 18

NAYS - 28

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

MR. L. NICOLSON (Nelson-Creston): This evening - or at this time of the afternoon - I intend to tell a tale so frightening, so alarming, that I think any of the more fiscally squeamish members of the government had better leave the House, because this is strictly for adults.

First I have a few quotations from chairman Bonner. Mr. Speaker, back in 1976, February thereof, upon taking his new position the former Attorney-General, but more significantly, I think in hindsight, the former director and chairman of MacMillan Bloedel, took over one of the Crown corporations, B.C. Hydro, of which we are today debating the extension of borrowing in the amount of $650 million. At that time the headline was: "Hydro Operating On a Thin Line of Credit - Bonner." "B.C. Hydro is operating at 96 per cent debt and 4 per cent paid-up capital, " Hydro chairman Robert Bonner said Wednesday. Mr. Speaker, for the benefit of some here that is a ratio of 24 to I of debt to paid-up capital.

He cited that by comparison Ontario Hydro was operating on the basis of 80 per cent debt, and 20 per cent paid-up capital for a ratio of four to one. But what he was saying is not true. B.C. Hydro was not at that time in that state of affairs. It was in fact a ratio of 84 to 16. He claimed then that it was 96 per cent debt to 4 per cent paid-up capital when in fact it was 84 to 16. It was not true then, but by this bill it comes closer to being true every day.

Mr. Speaker, the indebtedness of B.C. Hydro should be of major concern to all British Columbians, and indeed to Canada. In fact, Mr. Bonner later in those remarks said that "if it were not a Crown corporation it would be impossible for it to borrow on the basis of those figures." I'm quite sure that that's quite true.

It's interesting to look at the indebtedness of B.C. Hydro since it was first taken over in 1963. The other day I asked the minister....

Interjections.

MR. NICOLSON: Was it not 1963?

AN HON. MEMBER: No.

MR. NICOLSON: Was it '62? Going back to 1963, at any rate, the indebtedness of B.C. Hydro was half-a-million.

Mr. Speaker, if one is to take the predictions of the article which appeared in the February 9,1977, edition of the Vancouver Province, it says: "Back in 1962, when Hydro was formed by former Premier W.A.C. Bennett. . . ." Perhaps he doesn't know that the takeover of B.C. Hydro was ruled illegal, and that it was not taken over in 1962. That was an illegal act, and retroactive legislation had to be brought in to do it.

Mr. Speaker, as the article quite rightly points out, back in 1962 when Hydro was formed to take over B.C. Electric Company, a subsidiary of the investor-owned B.C. Power Corporation, its borrowing power was set at $500 million. By 1970 it had raised to $1.25 billion. Since 1974 there have

[ Page 1364 ]

been increases between $500 million and $750 million each year to bring us to the present level.

If one takes the prediction, which also comes from this article, that the indebtedness of B.C. Hydro by the year 1981 will be $8.3 billion, and one takes the period of time that it will take to arrive at this figure, one will find that the indebtedness of B.C. Hydro is doubling approximately every four and a half years. If every four and a half years the indebtedness of B.C. Hydro is going to double, and if it's going to continue to double, it means that starting with the year 1963 when the borrowing authority was half a billion dollars, by the year 1967-and-a-half it would be $1 billion. By the year 1970 it was in fact $1.25 billion.

Following this model of doubling every four and a half years, by 1972 the Authority's indebtedness was $2 billion. In 1976, by the prediction, it was in fact $3 billion. By 1976-and-a-half, according to the model, it would be $4 billion. By the year 1977, it was in fact $3.8 billion. By 1981, it will be, according to the predictions, $8.3 billion and, according to the model, $8 billion. By the year 1985-and-a-half it will then, following this model which has been very accurate in predicting the indebtedness of B.C. Hydro, rise to $16 billion. By the year 1990 it will be $32 billion, by the year 1994-and-a-half, $64 billion, and by the year 1999, just before the turn of the century, $128 billion.

MR. LAUK: Bonner has admitted that.

MR. NICOLSON: I hope I'm around at that time and I hope that I'm proven wrong. But I think that the experience with exponential growth shows that unless some very strong measures are taken, the indebtedness, just for B.C. Hydro alone, will be $128 billion.

Mr. Speaker, the manner in which Social Credit has kept this government going has not been by encouraging secondary industry; it has been on a high, injecting and mainlining foreign investment dollars and borrowings into the economy of British Columbia. This is something for which there will be a day of reckoning if there are not some major innovations taken and if there is not a little bit more serious consideration given to the predictions of the B.C. Energy Commission, rather than relying on B.C. Hydro and its growth figures.

What this Hydro Authority and this government should be doing is setting regulations on maximum candlepower which can be used in offices and in airports. About a week ago I was sitting in the Victoria airport at about 6:30 in the morning and reading quite comfortably. The Cara shop opened up and suddenly they turned on all the lights, which I was not aware were out. It was blinding. The waste of electricity exemplified by that is just one example. In fact, we are encouraging the overconsumption of electrical energy. We have street lights in excess of our needs in many parts of the province and perhaps not as much as we need in other areas. We have used car lots lit up with 24-hour daylight and absolutely no need for it.

AN HON. MEMBER: Secondhand stores.

MR. NICOLSON: Well, there's going to be a lot of secondhand stores, through you, Mr. Speaker, to the Minister of Mines (Hon. Mr. Chabot) over there. I'm not talking about high-quality antique shops. There are going to be lots of secondhand stores, though, as your government plunges this province deeper and deeper into unemployment and deeper and deeper into bankruptcies and other things. But the minister has pulled me away from order and away from the motion of this bill.

Mr. Speaker, there should be more insistence upon the utilization of the energy that we have.

AN HON. MEMBER: Hear, hear!

MR. NICOLSON: For instance, when land clearing takes place, particularly when dams are built without proper removal of the lumber in that area, when building sites are cleared without removal of wood even just for consumption in fireplaces and such things, we have to certainly call this into question.

Earlier in debate, I believe on the budget, the member for North Vancouver-Capilano (Mr. Gibson) talked about ways and means of encouraging capital investment in the forest industry. Certainly, if we are going to bring in incentives and if we are going to reduce various types of taxation, perhaps one area in which there could be some fast tax write-offs and some financial incentive would be in the area of power generation and the creation of hog-fuel facilities in our sawmills. There should be very direct incentives to encourage that, rather than this mindless continuing use. The use of electricity is outstripping population growth; it is sort of a self-fulfilling thing.

B.C. Hydro predicts that the growth rate will be 9.2 per cent and then they encourage the overlighting of offices, of streets, of parkades....

AN HON. MEMBER: Massage parlours.

(Laughter.)

MR. NICOLSON: Mr. Speaker, there is another area - and I see that the Minister of Education (Hon. Mr. McGeer) is not present - in which we are going more and more to electricity and lighting. I know it can be argued that there is an energy saving in going to windowless classrooms, but there are ways and means of building windows that will let in natural light and that will not, again, encourage the overlighting of classrooms. In fact, if one goes into a

[ Page 1365 ]

classroom that was built even 10 years ago and goes into one that has recently been completed. Just try that sometime. Go in and count the number of fluorescent tubes in the two different rooms. I am sure you will probably be amazed to find it will most likely be four times as many. So this is the type of waste.

The member for New Westminster (Mr. Cocke) talked about the lifetime of a hydro dam. There's a popular misconception that a hydro dam is a renewable resource and that it does not have a limited lifetime. There is such a thing as silting. I think that one could look at the breakwater which originates at Iona Island at the mouth of the Fraser and notice the amount of situation that has taken place between those two breakwaters. This will give some idea of the rate at which a river can deposit and reduce the volume of water stored behind a dam. That silt might stop depositing in the Fraser Valley and it might stop the very natural and healthy process there, and be retained underwater, filling up the dam - the W.A.C. Bennett Dam and the various other storage dams.

The B.C. Hydro has embarked upon this mainlining of foreign dollars and of debt as a substitute for any economic policy toward creation of secondary employment. It has been a substitute in this province. It seems that this government has no intention of going in any other direction. They are not looking at alternative methods of power generation for which we have some great potential in this province. They are going by the predictions of B.C. Hydro and not by the more conservative estimates of growth.

The Attorney-General (Hon. Mr. Gardom) is very amused. Because he is a lawyer, he can't appreciate the concept of exponential growth. I have not used the more complicated formula that N equals E, natural logarithm to the power KT. I have just tried to do it in very simple terms that members of this assembly can understand over there. I am sure that the member for North Vancouver-Capilano (Mr. Gibson) can understand it. It can be simply explained as a doubling. Here's a calculator with the exponential E on it.

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: That's right.

MR. NICOLSON: That's right. That member knows all about the exponential.

AN HON. MEMBER: Just give me the numbers, Lorne.

AN HON. MEMBER: Don't get plugged in.

MR. NICOLSON: So I would like to emphasize that this model, whereby B.C. Hydro debt can be traced back to its origins in 1963 as being half-a-billion dollars, of doubling every four and a half years, is consistent to the year 1891 and the projections that have been made. The extrapolations beyond that depend on policy of the government and of B.C. Hydro. The government and the Premier have taken the attitude that the board of B.C. Hydro is a law unto itself and not subject to direction from this House and not subject to direction from himself or the cabinet. 1 say that that policy has to be changed and that the board of directors has to take charge and embark upon a philosophy and be given terms of reference in which energy conservation is the prime consideration. If they don't there will be $128 billion indebtedness by the year 1999.

AN HON. MEMBER: Whew!

MR. NICOLSON: That's what will be coming in here. That's what this Bill 4 will be. It will be the British Columbia Hydro and Power Authority (1964) Amendment Act, 1999. That's what that bill will be.

MR. GIBSON: What's your rate of growth, Lorne?

MR. NICOLSON: My rate of growth is every four and a half years. That is T.

So, Mr. Speaker, 1 see that some of the members of the government back bench took my warnings. Others bravely stood in here, stood their ground, and listened to these fiscal facts. I'm sure that they are shocked, that they are dismayed. Now they are saying: "If 1 only knew, 1 would have done some homework. I would have come in here and urged the government to proceed more cautiously and to take a more responsible attitude towards B.C. Hydro." 1 don't want to see the British Columbia Hydro and Power Authority (1964) Amendment Act, 1999, extending the borrowing authority to $128 billion. That's why 1 have brought these facts to their attention. It's not something that 1 wanted to do. It would be nice if we didn't have to say these things in the House with the public looking on and realizing that B.C. Hydro is really going out of control. So with that added bit of information, Mr. Speaker, 1 would hope members would have time to consider these facts and prepare themselves to enter into this debate.

Mr. Nicolson moves adjournment of the debate.

Motion negatived on the following division:

YEAS - 18

[ Page 1366 ]

NAYS - 29

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

Interjections.

MR. GIBSON: Mr. Speaker, I would gladly defer to the hon. member.

MR. SPEAKER: I recognize the hon. member for North Vancouver-Capilano.

MR. GIBSON: Mr. Speaker, this bill, as you may be aware, sir ....

MR. KING: On a point of order, a member is allowed to yield the floor and defer it to another speaker, if he so wishes.

MR. SPEAKER: I recognize the hon. member for North Vancouver-Capilano.

MR. KING: He indicated that he deferred.

MR. SPEAKER: No, he didn't.

MR. KING: Yes, he did, Mr. Speaker. I'm sorry that the Speaker didn't hear that but I'm sure the rest of the House did.

Interjections.

MR. SPEAKER: The hon. member for North Vancouver-Capilano.

MR. GIBSON: Thank you, Mr. Speaker. I am sorry if I inadvertently took the place of the hon. member for Fort George (Mr. Lloyd) but time will be available tomorrow, I imagine.

AN HON. MEMBER: He's only got one term to give his speech in.

MR. GIBSON: Mr. Speaker, this bill, as you are aware, sir, provides for the borrowing by the British Columbia Hydro Authority of $650 million. That amount of money, exchanged into pennies and stacked one on top of the other, would stretch for 52,000 miles. It is a new burden on the people of British Columbia of $270 per capita, which is a serious burden, I think, Mr. Speaker, from a government that said that they were not in favour of a deficit. I think they have a debt wish, Mr. Member. (Laughter.)

AN HON. MEMBER: Good line!

MR. GIBSON: In accordance with the solemnity of that question, I think it only right that this matter be considered at a measured cadence, and in appropriate depth.

To me, Mr. Speaker, we have the situation here of not one but two Crowns in British Columbia. We are accustomed to Her Majesty the Queen coming before this House and asking supply, but here we have a message from His Majesty King Robert I of B.C. Hydro, asking for $650 million.

AN HON. MEMBER: That was the first King of England. It was Robert 1.

MR. GIBSON: Was Robert I the first King of England?

AN HON. MEMBER: No.

AN HON. MEMBER: Yes.

MR. GIBSON: Robert Kilowatt? (Laughter.) Who?

AN HON. MEMBER: He was electrocuted. (Laughter.)

MR. GIBSON: He was electrocuted. (Laughter.) I will take a history lesson from you, Mr. Member, in a short time.

But here we have this demand, this extraordinary demand, for the authorization of another $650 million for a corporation that is already spending 41 cents out of every dollar of revenue for debt service.

AN HON. MEMBER: Wrong.

MR. GIBSON: Mr. Speaker, is that wrong? Okay, what's the number? I got that from another member.

MR. WALLACE: No, that's right - 41 cents.

MR. GIBSON: Okay, I'll look that up over the

[ Page 1367 ]

dinner hour, Mr. Member, and correct it.

MR. WALLACE: In 1974 it was 34 cents.

MR. GIBSON: In 1974 it was 34, Mr. Member, and now it's 41 cents. Thank you.

But whatever it is, Mr. Speaker, this Legislature should not authorize 1 more cent of Hydro capital until the corporation is brought under control.

AN HON. MEMBER: Hear, hear!

MR. GIBSON: I would have expected the Premier to have applauded that sentiment, Mr. Speaker, because I recall so well an interview that he gave before Christmas.

MR. LAUK: He didn't hear it. You better repeat it.

HON. MR. BENNETT: What did you say?

MR. GIBSON: Oh, you didn't hear it. Oh, I'm sorry. I'll say it again more slowly. What I said is: I do not think that this Legislature should authorize I more cent of borrowing authority for Hydro until that corporation is brought under control.

AN HON. MEMBER: He didn't hear it. You'd better repeat it again.

HON. MR. BENNETT: Maybe it's the way you say it.

MR. GIBSON: You see, Mr. Speaker, the Premier, in an interview before Christmas, expressed his concern about Hydro. In view of the person of the chairman, I wouldn't be surprised he would be concerned. But he said he was worried about the system as well. He ~Said that he thought that the system was not one that provided for the proper oversight and control of B.C. Hydro by the government of this province and by the Legislature of this province.

MR. BARRETT: They haven't even called public accounts this session.

MR. GIBSON: Hon. Leader of the Opposition, you are entirely right. The public accounts committee has not been called, but even that is an inadequate vehicle for the examination of British Columbia Hydro when you think that we are being asked to authorize $650 million on the testimony of two ministers before this House, ministers who, with due regard to them, are not experts in the field of hydro.

Who can we call before this House? There is no provision for expert witnesses the way this bill is being handled. There's no provision for us to have testimony from the B.C. Energy Commission, from the general manager of Hydro, from other directors of Hydro. In fact, we simply have to take the admittedly inexpert word of two ministers, one of whom is a director, the other of whom bears the cross, 1 might say, of being the fiscal agent of the corporation. It is a difficult burden, Mr. Speaker.

Hydro must be brought under control. The people of this province demand it, sir. You must receive letters; members opposite must receive letters of the kind that are received in the opposition.

MR. BARNES: They don't read them.

MR. GIBSON: It may be that they don't read them, but they'd better.

AN HON. MEMBER: They move their lips.

MR. GIBSON: The letters describe the outrage of people who are now being slapped with a charge for zero service, a charge right off the top for their hydro supplies.

MR. LAUK: Head tax.

MR. GIBSON: The letters describe the reaction of the people of this province to an increase in electrical rates of something like 14 per cent. The increases might, of themselves, be justified, Mr. Speaker, but increases imposed without the need to justify them to any independent tribunal of any kind whatsoever is wrong. 1

There is no requirement that Hydro justify what it does to the Energy Commission. The hearings that the Energy Commission is going to hold later on this year are not good enough. They have no control over Hydro. They have no right to say: "No, you have not justified that increase, and you must.--- These will simply be hearings to say: 'Well, how much is energy going to skyrocket?" There is no ~control and Hydro must be controlled because the people in this province own it.

There's no provision for continuing accountability to a legislative committee. The public accounts committee, in my view, Mr. Speaker, is nowhere nearly good enough because, as Your Honour is aware, it is not provided with funds for expert staff or the various resources for the kind of in-depth consideration of technical questions that are required when you're looking at a monster like Hydro.

What is needed, in my estimation, is an ongoing committee of this Legislature, charged with the duty of overseeing our great Crown corporations and, in particular, B.C. Hydro, calling those corporations before them on a monthly or bi-monthly or even quarterly basis, and saying: ---Now, you have done

[ Page 1368 ]

thus and so. Will you justify it? You are going to do such and such. Justify your plans and tell us what they are."

Mr. Speaker, mindful of the constitutional dictates under which we operate, I naturally have no suggestion that such a committee should exercise executive authority over B.C. Hydro. That is the proper responsibility, of the government. Such a committee could, however, on behalf of the public, ask questions and exercise a detailed oversight. People, with the kinds of increases in Hydro rates they're getting, want that kind of oversight exercised.

Now how is this justified by the two ministers who spoke in the debate? Let's pay some attention to the remarks of the hon. Minister of Energy (Hon. Mr. Davis) on Wednesday last and to the Minister of Finance (Hon. Mr. Wolfe) on that date as well.

AN HON. MEMBER: That'll be short.

MR. GIBSON: Well, it would be short, Mr. Member, if we just looked at what he said, but it's when you look at what he didn't say that it becomes necessary to elaborate.

The Minister of Energy was attempting to justify this bill, and he makes this statement: "Our rate of growth in the province in population, as well as energy-usage terms, is far above that of the rest of the country." Now, Mr. Speaker, that is not correct. I think the minister ought to come in here and correct himself. If he will speak to the minister who sits directly in front of him, the Minister of , Economic Development (Hon. Mr. Phillips) , and obtain from him the benefit of his departmental figures on population growth in this province, he will find that it has slowed down enormously. The Minister of Energy is obviously using incorrect, historical figures.

That, you might say, is a technicality, but I want to go on to another place in the speech of the Minister of Energy where he became, I think, a little unfairly partisan in his interpretation of history. He said this:

If the utility itself is in poor shape, or if the political climate in the area in which it operates looks rocky, then interest rates tend to go up. This is the main reason why B.C. Hydro-bad to pay high interest rates in recent years.

Mr. Speaker, I think the minister ought to come into the House and explain to us whether he thought the corporation looked rocky - I don't think that's what he meant - or if he was saying that it was the political climate which had something to do with interest rates.

Now I think I share with that minister much concern about the political climate of those days, but let us be fair. The rating of British Columbia Hydro -the rating of its bonds - did not change throughout that period. As that Minister of Energy ought well to know, that is what determines the credit and the charges on the bonds of a particular company. The rating of B.C. Hydro did not change.

Interjections.

MR. GIBSON: Aha! But they did not! Give us that evidence, Mr. Minister. Perhaps eventually we will smoke things out if we talk long enough.

Now let's go on to this comparison that the Minister of Energy made as to the fluctuation in the energy rates over the various years, because that is another matter of interest on which that minister ought to check his facts a little more clearly. I'll quote him again, and I'm picking:up exactly from the end of the previous quote, Mr. Speaker:

... interest rates in the order of 10.5 per cent in 1974 and more than 10 per cent in 1975. Money costs of that order of magnitude have a major Impact on the power and gas rates - the price paid for energy by people. In the 1960s the interest rate charged on a typical borrowing by B.C. Hydro was around 6 per cent. In 1971, it was 7 per cent. It took off in 1971 -first it was 8 per cent, then 9 per cent, and finally 10 per cent plus. That was the price for new money that B.C. Hydro had to pay when the NDP was in power. That's one of the reasons - the biggest single reason -why power and gas rates paid by people have been going up and continue to go up in B.C. Now they should be levelling off. The latest borrowing in New York cost B.C. Hydro 8-5/8 per cent. So money costs, at least, are moderating. The interest burden is tending to level off. Political sanity has returned to British Columbia.

Now that would be an interesting comparison if the minister had been kind enough or assiduous enough to give us the comparative rates in the New York bond markets in those various years in which he spoke of the figures. Unhappily, he did not. But I have tried to remedy that oversight and will read to you from a chart that comes from a bond survey dated November 22,1976. It has a nice little chart here.

If we look at U.S. government securities yields, long-term bonds, we find that back in 1961 they were about 3.5 per cent. So Hydro bonds back in 1961, it seems, were about 2.5 per cent above U.S. long-terms.

MR. BARRETT: What about the exchange rates?

MR. GIBSON: Well, this is just the return on money, Mr. Member, so I think we can compare it.

MR. BARRETT: By the time they get around to it, they're going to blow the whole thing.

MR. GIBSON: Now let's go on to 1971, which was the next time cited by the Minister. He noted that Hydro was up to 7 per cent and U.S. governments in

[ Page 1369 ]

1971 were up to about a little over 5 per cent. Then, he says, it "took off" in 1972, and so on. Now what are the figures I've got here? The next one I have, I think, is for that 10 per cent-plus, which he said was in 1975, and lo and behold, the U.S. long-term rate at that time had gone up to 7.5 per cent. So you still have that more or less 2.5 per cent spread. It's a funny thing, the Minister didn't mention that.

Would you like me to adjourn, Mr. House Leader?

Interjection.

MR. GIBSON: It's immaterial to me. Let me just....

HON. MR. GARDOM: I'll accept it.

MR. GIBSON: You'll accept it? Good.

Let me just note this final point. The minister then suggested that the interest rate now for B.C. Hydro in 1976, after his government took office, was down to 8-5/8 per cent - political sanity having returned to British Columbia, to crib his words. But he fails to mention that, at the same time, on the New York market where B.C. Hydro does much of its borrowing, the interest rate had dropped down to 6.5 per cent. It seems to me, Mr. Speaker, it's just not 100 per cent right of that minister to develop the argument he did without giving the other side of the case. I don't think that's entirely open with this House.

Interjection.

MR. GIBSON: The rate in Washington? Are you speaking of the Federal Reserve discount rate? What sort of thing would you like? I'll endeavour to research it for you over dinner, Mr. Minister, if your facilities don't admit of that.

At the suggestion of the House Leader, and on the understanding that he is accepting this motion, I move the adjournment of this debate.

Interjections.

MR. GIBSON: I'll have to take his word. Let me just try on some language, though. I want to be sure 1 do this right. (Laughter.) Would it be right to move the adjournment of this debate to the next sitting after today?

Interjections.

MR. GIBSON: Would there be an adverse vote on that?

SOME HON. MEMBERS: 04, oh!

MR. BARRETT: Oh, he was misleading you.

MR. GIBSON: I was going to try and slip that in, you know, but I didn't know if it would be noticed. If we go past 6 then it's an automatic return at 8. They put in that order at the beginning of the year, as usual. He might have another time in mind so I'll be glad to move the adjournment of this debate until the next sitting.

Mr. Gibson moves adjournment of the debate.

Motion approved.

Hon. Mr. Davis tables the fourth annual report of the B.C. Energy Commission for the period ending December 31,1976.

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 6 p.m.