[ Page 1371 ]

CONTENTS

Routine proceedings

Committee of Supply; Ministry of Energy, Transport and Communications estimates: On vote 102:

Division to rise and report progress –– 1371

British Columbia Hydro and Power Authority (1964) Amendment Act, 1977 (Bill 4) Second reading.

Mr. Gibson –– 1371

Skelly Sanford Levi –– 1371

Wallace, B.B.

The House met at 8 p.m.

MR. L.B. KAHL (Esquimalt): Mr. Speaker, with your kind permission I'd like to introduce someone to the gallery this evening, my sister Carol Nelson, who comes to us and brings greetings from that far north city of Whitehorse.

MR. J. J. KEMPF (Omineca): Mr. Speaker, in the gallery this evening is someone very close and very cherished by myself. I'd like the House to make welcome my sister, Jan Conti.

Hon. Mr. Gardom files the report of the Law Reform Commission of B. C. dealing with the rule in Hollington v. Hewthorn.

Orders of the day.

HON. G. B. GARDOM (Attorney-General): I move the House proceed by leave to public bill sand orders.

Leave not granted.

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

ESTIMATES: MINISTRY OF

ENERGY, TRANSPORT AND COMMUNICATIONS

On vote 102: minister's office, $134,140.

HON. MR. GARDOM: I move that the committee rise, report great progress and ask leave to sit again.

Motion approved on the following division:

YEAS

NAYS - 16

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

The House resumed; Mr. Speaker in the chair.

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

HON. MR. GARDOM: I move the House proceed to public bills and orders.

Motion approved.

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

BRITISH COLUMBIA HYDRO AND POWER

AUTHORITY (1964) AMENDMENT ACT, 1977

(continued)

MRS. P.J. JORDAN (North Okanagan): Where's your red suit, Gordie?

MR. G. F. GIBSON (North Vancouver-Capilano): I have on red suspenders, Madam Member. (Laughter.)

MR. SPEAKER: Order, please. Now that the hon. member has received sufficient recognition, will they allow him to continue?

MR. GIBSON: Resuscitation, Mr. Speaker.

MR. SPEAKER: Recognition, I hope.

MR. GIBSON: Mr. Speaker, as we commence upon this momentous evening, I think it would be useful to be quite clear on the subject of the debate. I should explain to the House in advance that the nature of my remarks will be somewhat discursive, perhaps as a result of the well-known phenomenon that is easier to prepare a short speech if a person has time to do so. But when there is no advice as to the business of the day and no advice even to the fact of a night sitting, then it becomes a little more difficult to make remarks as concise as one might otherwise wish.

HON. MR. GARDOM: Oh, baloney!

MR. GIBSON: The Attorney-General says "baloney," but he can say "baloney" every Monday and Wednesday evening from here on as long as he pulls this kind of caper.

Mr. Speaker, just before the hour of the adjournment, I had occasion to compare some of the statements made by the Minister of Energy (Hon. Mr. Davis) last

[ Page 1372 ]

Wednesday, in which he referred to interest rates over the years and suggested that there was some correlation between political events in this province and the interest rates paid by British Columbia Hydro. I had used figures that in my opinion demonstrate conclusively that the rates paid by B.C. Hydro over the years fluctuated exactly as did the New York money markets. I hope that the minister who does not close this debate because it's not his bill, will find time in committee stage to stand up and apologize for his revisionist approach to history.

AN HON. MEMBER: Revisionist?

MR. GIBSON: He's a capitalist roader, as you know. (Laughter.)

I continue with the perusal of that minister's speech, which is fascinating, and he says that we have the lowest gas rates to consumers in Canada.

MR. R.E. SKELLY (Alberni): Except for Alberta.

MR. GIBSON: Yes, with the exception of Alberta.

AN HON. MEMBER: Did he say that?

MR. GIBSON: Yes, he did say that, Mr. Member. I should have quoted the whole sentence.

MR. SKELLY: Good point.

MR. GIBSON: I want to ask that minister how he stands on the subject of conservation of this rather precious natural resource that we have, and whether he does not think it fit that natural gas pricing for new users in this province ought to be brought up to full BTU value - equivalence with oil immediately for new users. I don't speak of existing natural gas users, because they were, in a sense, entrapped by British Columbia Hydro over the years. The fact of the matter is that the ads have been there saying: "Hydro natural gas prices haven't gone up for 10 years or 15 years, " or whatever it is. "This is your best investment, to put in natural gas in your home." So the existing users were entrapped, no doubt about it. But the new users, particularly industrial users....

MR. SPEAKER: Hon. member, may I draw to your attention the fact that this bill is under the jurisdiction of the Minister of Finance and not the Minister of Energy, Transport and Communications? The Minister of Energy, Transport and Communications has already taken his place in this debate, so that he does not have an opportunity to reply to what you have said except when his estimates are before the House, and that would be a proper time to address questions to the minister toward whom you seem to be now directing your remarks.

MR. G.V. LAUK (Vancouver Centre): A point of order, Mr. Speaker. When you interrupted the member for North Vancouver-Capilano (Mr. Gibson) , you pointed out to him that we're not debating a bill that was sponsored, or is led, by the Minister of Energy, Transport and Communications. But the Minister of Energy chose to enter the debate and made various comments about this bill and the hon. member is dealing with those comments. I for one, as a member of this House, wish to hear what his response is to the hon. minister. With respect, Mr. Speaker, all of us who have spoken in this debate will have no chance to reply after the Minister of Finance cuts us all down when he closes debate.

MR. SPEAKER: I just suggest that the hon. member for North Vancouver- Capilano indicate that there is no opportunity for reply by the hon. minister because that's not permitted in this debate and....

MR. G.R. LEA (Prince Rupert): I would like to hear what he has to say, Mr. Speaker.

MR. SPEAKER: I'm prepared to listen to the hon. member, as long as he keeps within the rules of debate.

MR. LAUK: You're a dictator.

MR. GIBSON: Thank you, Mr. Speaker. I'm just to....

MR. SPEAKER: Order, please!

[Mr. Speaker rises.]

MR. SPEAKER: Hon. member, I distinctly heard the hon. first member for Vancouver Centre say: "You're a dictator." It doesn't matter, hon. member, whom you directed that remark to. It's unparliamentary if it was directed at another member of this House or the Chair. Would you please either withdraw, or determine for the benefit of the Chair that it was not directed to a member of this House?

I Mr. Speaker resumes his seat.]

MR. LAUK: Mr. Speaker, I did not direct that comment to you. Your interruption of the hon. member's debate was a separate issue. The hon. Minister of Mines (Hon. Mr. Chabot) said: "I'm not interested in hearing that member's speech." And I said: "Don't be a dictator." I wasn't directing that remark at you at all, sir, and I certainly would not dream of doing so.

[ Page 1373 ]

MR. SPEAKER: In that case, if you directed it to another hon. member of this House, it is unparliamentary and I think it should be withdrawn.

MR. LAUK: I didn't say he was a dictator. I said: "Don't be a dictator."

MR. SPEAKER: Will the hon. member withdraw the remark?

MR. LAUK: Well, if the hon. minister doesn't want to hear the member's speech, he should leave the chamber.

MR. SPEAKER: Will the hon. member withdraw that statement?

MR. LAUK: I withdraw any offensive remark that would hurt the feelings of the Minister of Mines.

MR. SPEAKER: Or any other member, I assume.

MR. LAUK: I know that's almost inconceivable, but if it hurt the feelings of the Minister of Mines, I withdraw.

MR. GIBSON: Mr. Speaker, just so that there can be no uncertainty as to the propriety of this particular line of questioning, I would draw Your Honor's attention to page 421-2 et sequitur of the Blues of last Wednesday, at which time the hon. Minister of Energy, (Hon. Mr. Davis) was quite properly concerned with the price of natural gas as charged by B.C. Hydro. This is not only of concern to the people of the province but it has to do, rather directly, with the ability of B.C. Hydro to repay the extra moneys that this House is being asked to authorize tonight.

Now as I had started to say, the minister stated that we have, with the exception of Alberta, the lowest gas rates in Canada, and I was making the proposal that this most precious natural resource should, insofar as new users are concerned, be charged out at full BTU value - equivalent to oil - failing which, we are giving an implicit subsidy to the users of natural gas and a disincentive to the use of oil. Natural gas is a precious asset of our province and it should be charged at full cost to those who have an option in using it. Those who do not have an option, those who are already using it as a result of the enticements of B.C. Hydro in recent years, in my view, ought to be given a period of years to be phased into the full value. I would be glad, because the hon. minister does have an opportunity to comment when we arrive at committee stage of this bill, to have him comment on that. Now next I must, with some concern and alarm, discuss the Minister of Energy's remarks insofar as load-growth forecasts are concerned. He speaks of the relative load-growth forecasts of the Energy Commission and of B.C. Hydro. He says this:

The experts on forecasting power requirements from B.C. Hydro and the B.C. Energy Commission have since met a number of times. They've cleared up various misunderstandings. They're using the same historic data; they're focusing on B.C. Hydro - not on B.C. Hydro, and the investor-owned utilities, and the industries generating their own power, but B.C. Hydro.

They're treating power losses in the same way and they're making some of the same assumptions about conservation in the future. As a result, their estimates as to future needs - electricity needs in this case - are closer together. They're close - within a few percent of each other in 1980. They're both in the 7 to 8 per cent range for the next decade - that is for the next 10-year period ending in the 1980s.

[Mr. Veitch in the chair. ]

Now isn't that interesting, Mr. Speaker? Let us compare the statement of the hon. minister with a press release issued by his office on January 21 of this year. Let us see about the load-growth figures over the next 10 years - we start in 1976 and we end in 1986. Let us take, first of all, the B.C. Hydro projection. The preliminary actual of 1976, according to B.C. Hydro, is 25,000 gwh ending up at 56,400 gwh in 1986. That is a compounded annual rate of growth of 8.1 per cent.

The B.C. Energy Commission is rather different. It starts out at a 1976 figure of 28,306 gwh. Interesting, eh? Over 2.5 million over the B.C. Hydro figure. It is quite true, as the minister says, that they're within a couple of hundred thousand difference in 1981. Then again they've diverged by 1986, and the reason is very simple, Mr. Speaker. The compound annual growth of the B.C. Energy Commission is only 6.2 per cent by those figures. It makes quite a difference. The only reason they're anywhere near each other in 1981, as the minister brags about so much in his speech and in this press release, is because the B.C. Energy Commission starts out from a much higher figure than the actual of 1976.

So all of this bragging about the closeness of the rates is bootless sophistry. The fact of the matter is that the compound annual rates of growth are almost 2 per cent different. They still haven't been brought into harmony by a good long shot.

I don't know if he knew it or not, but just to show how important this is, Mr. Speaker, let's look at 6.1 per cent over 25 years. Oh, my, that almost broke down the machine. I should have plugged it in before I came in here. No, I'm going to have to do this tomorrow, but the fact of the matter is that a 2 per cent rate of growth, over 25 years, makes a tremendous, tremendous difference at this level.

[ Page 1374 ]

MR. KAHL: How much?

MR. LAUK: Are you keeping us in suspenders?

MR. GIBSON: I'm keeping myself in suspenders, Mr. Member.

So this alleged harmony of the projections that the minister brags about in his speech is simply not there, and I don't think he ought to brag about it.

He goes on and he talks about the use of natural gas to save capital facilities for B.C. Hydro, and I just threw up my hands at this. What he's saying is the following: he's saying that we should use a commodity now for space heating, as a matter of choice.

He's saying we should use a commodity which is appreciating in value year after year at a tremendous rate. There can be no question, Mr. Speaker, that this is what is happening to natural gas. He's saying we should use this in preference to a commodity, namely electricity, whose value we can freeze and fix by the act of, this year, putting into place a hydro plant of which there is still enormous capacity in British Columbia, or putting into place a coal plant of which we have tremendous supplies in this province.

He is saying that we should appropriate into space heating needs, and even into electric generation needs, though he denies this, because the Burrard thermal plants are still spinning on natural gas from time to time. He's saying that we should appropriate this rather than make use of electricity, when it is common wisdom all over this continent that electricity is the direction we're going in, and that our precious hydrocarbon reserves should principally be used for higher-grade purposes and petrochemical purposes.

Our friends in the United States must learn this lesson. I don't know how many members of this House are aware that the United States uses about twice as much natural gas per capita as we do in Canada. The reason for that is their intense use of natural gas for electrical power generation.

Now if I contemplate this device for a moment: 6.45 times over 25 years at 6.2 per cent and 8.1 per cent over 25 years - that's backwards. Who sent me over this rigged computer?

AN HON. MEMBER: It's a Social Credit computer, which is a leghold trap.

MR. GIBSON: In other words, there's a whole factor of I at the end of 25 years. You go up 4.2 times with 1. If you need $1 billion now, you need $4.2 billion at the end of 25 years; with the other one you need $5.1 billion. There's that amount of difference with just that little 1.9 per cent difference in the forecasts.

Interjections.

MR. SPEAKER: Order, please.

MR. GIBSON: Thank you, Mr. Speaker, but I was quite happy to receive that comment of the hon. minister because he suggested that you can look at these things every 12 months. Of course you can, but you can't stop building the Revelstoke Dam once you've started building it - that's the trouble. These figures are being used to justify the building of the Revelstoke Dam, as that minister well knows, sir, through you.

After saying, Mr. Speaker, that B.C. Hydro has to use natural gas in order to keep capital expenditures down, he then goes on, at page 423-1-bt, to say the following.

MR. LAUK: What was that page again?

MR. GIBSON: Page 423-1-bt. He says: "Also we happen to have large reserves of coal at Hat Creek. This new power source is much closer to Vancouver, our principal load centre, than our remaining undeveloped hydro sites. Hat Creek, in other words, can help us keep our capital expenditures down and our borrowing down."

Welcome words, Mr. Speaker. Good news. Why did the minister not also adduce that argument in order that we would not have had to use up our natural gas reserves quite so quickly through the kind of space heating at low charge that he advocates so freely in this House? I don't think that there's any concept in this corporation, of which the minister is a director, of the need for conservation of the precious fuel resources of our society.

Interjection.

MR. GIBSON: No, it's quite clear from the expressions of the chairman of B.C. Hydro that there is no real understanding of conservation. All there is there is an understanding of how to manipulate the public and how to say: "If you don't give us Revelstoke, you're going to get Hat Creek, and if you don't give us McGregor, you're going to get nuclear power, so watch out, British Columbia. Give B.C. Hydro anything it wants." That's exactly the line they're talking. It's emotional blackmail on the people of this province.

Now, Mr. Speaker, the principal objection I have to the things that this minister said is the following. We all know that it is essential that British Columbia Hydro somehow be brought under the purview and control of the people of this province so that they must justify their actions. What does the minister say about that? He said and he quotes here at some length:

[ Page 1375 ]

"People ask about the regulation of B.C. Hydro by the B.C. Energy Commission, for example. I have already referred to this possibility in a speech which 1 gave to the Legislature in January. B.C. Hydro itself recognizes this possibility of rate review by another public body. In its financing prospectus published in the United States on November 23,1976, on page 22, we read:

" 'The provincial government has announced that ' it is contemplating legislation which will create an authority to review all rate applications made by Crown corporations and agencies, including the Authority.' "

The provincial government is "contemplating legislation.- They are certainly taking their time in getting there, Mr. Speaker. There's no such legislation anywhere near before this House. Does the minister give us a clue? He goes on to say:

"So the people out there who are lending their money to B.C. Hydro, people outside this province as well as people who live in British Columbia, know that this sort of thing is being considered seriously by the government. This announcement appeared in the Speech from the Throne in April, 1976. While we have no legislation along these lines scheduled for 1977, 1 hope we will have a bill along these lines to introduce next year in 1978."

In 1978, Mr. Speaker! Possibly, some time in 1978, a bill will be introduced to finally control British Columbia Hydro, probably to have effect in 1979. A nice election promise, and in the meantime B.C. Hydro has had a chance to run more hog-wild for the next two years with the kind of rate increases that corporation has been making without justifying them in any way whatsoever.

The government side of this House has been talking about B.C. Hydro pricing in such a way that it would reward low-consumption users and penalize high-consumption users. And what happens? We find a levy placed on customers - a flat rate levy right off the top.

AN HON. MEMBER: It's illegal.

MR. GIBSON: Which may be illegal, Mr. Member, I don't know. But the trouble with B.C. Hydro is it can do no wrong. That seems to be the law in this province. You can't get at them.

AN HON. MEMBER: It's illegal but they're above the law.

MR. GIBSON: That's a good way of putting it.

That is the exact opposite of the kind of pricing that you need for conservation. It doesn't make sense. That minister, in short, completely failed in his speech to justify the activities of the corporation and, in particular, failed to give us any assurance that there will be an adequate control structure regulating, , that corporation within the next year. To me, Mr. Speaker, it is absolutely impossible to support an extension of borrowing authority by one penny such time as that kind of regulatory authority and the necessary justification of rate increases is in place.

AN HON. MEMBER: Hear, hear!

MR. GIBSON: Now, Mr. Speaker, may I turn my attention from the remarks of the Minister of Energy, Transport and Communications (Hon. Mr. Davis) to the remarks of the unhappy sponsor of this bill (Hon. Mr. Wolfe) who, on his opening presentation, told us what things were going to be used for. This again is in last Wednesday's Blues on page 409-1-bt, Mr. Member, at 2:35 p.m. He spoke here of the reasons for the increase from S3.5 billion to $4.15 billion and he said: "It might be helpful to members of the House ... to elucidate the major projects. . . .", which, indeed, it was. He said: "First of all, Mica Creek. The underground powerhouse at Mica will ultimately house six generating units with a capacity of 2.61 million kilowatts. The first three generating units are planned for service in fiscal 1977."

Mr. Speaker, I'm noting these because I want to compare them in some detail with a document known as "Alternatives: 1975 to 1990, " published by the British Columbia Hydro and Power Authority in May of 1975, , which remains, insofar as this Legislature is concerned, the Bible, you might call it - the definitive public document as to the planning process of B.C. Hydro.

The minister suggested what we used to call back in the Columbia River Treaty days the "machining of Mica." This is going to take some of the money. He says: "That work, plus the 500-kilovolt transmission lines from Mica to the greater Vancouver area, is expected to cost $50 million in the 1977-1978 year."

He goes on, Mr. Speaker, and discusses the Kootenay Canal, including a three-mile long canal and powerhouse with four generating units and so on; and the scheduled fiscal 1977 expenditures there are $5 million. He doesn't mention fiscal 1978, 1 note, which seems to me the proper planning span for this particular project. Then he moves on to Site 1, which is on the Peace River, and states that this is budgeted for $104 million for the coming fiscal year, which is presumably the time that this particular borrowing authority will largely cover.

He moves on to Seven Mile which, including the transmission preparation, is an expenditure of some $100 million in 1977-1978. And he mentions a fascinating paragraph to me, Mr. Speaker, which I will read.

[ Page 1376 ]

Interjection.

MR. GIBSON: This is 409-2-bt. Thank you, Madam Member.

He says:

Then there is Hat Creek. Plans for development of certain coal reserves are underway, and an electric generating plant is to be constructed at a cost of $18 million in 1977-78.

That's what he said - a generating plant to be~ constructed for $18 million.

Mr. Minister, you shrug and throw your hands up. I don't understand it any better than you. It seems to me you build an awfully small generating plant at Hat Creek for $18 million. I didn't know it was planned to start there at all; I thought it was just investigation at this stage. Hat Creek with its enormous reserves -500 million tons in one ore body, Mr. Minister of Mines (where did you get to?) and probably a billion tons in another ore body of good, reasonably low-sulphur thermal coal - and they're talking about an $18 million plant in the next fiscal year. I don't understand it.

This is an area where B.C. Hydro, which of course owns the leases, should be giving consideration to a major synthetic-natural-gas project in this province, as was so eloquently outlined in the coal report - the one, small technical coal report which has been thus far released to this House. We can't get our hands on any of the rest of it.

Going on, the minister describes other generating facilities not otherwise specified. It's going to cost $16 million in additions and transmission facilities, including the Williston-Skeena Line - $81 million; transformation substations and so on - $105 million; upgrading of distribution circuits for $84 million; other electric facilities, communication and control laboratories, and service centres - $70 million; gas facility plant additions are $42 million estimated. I wish he'd been more specific on that particular one; it's a little bit mysterious to me. What exactly does "gas facility" mean? It could mean a number of things. The minister didn't specify; maybe he doesn't know. He says this is an estimated list, and that's what he comes up with.

Mr. Speaker, let us take a moment to compare that sketchy outline, attempting to outline $650 million in two or three pages of the Blues, which I suppose only amounts to one or two pages of the final published Hansard, trying to justify $270 per capita - man, woman and child - extra debt in the province of British Columbia in that fuzzy way with lack of detail. Let's compare that to the very careful survey done and published by B.C. Hydro (May, 1975) with a letter of transmittal, June 16,1975. Now I think probably the proper place to start our consideration of this report would be at No. 3, point 4, page 34.

Interjections.

MR. GIBSON: Here's a subject which the minister ought to have read before he introduced his bill. It's called "econometric forecasts." I want to outline the basis given for these particular forecasts in order that the minister will understand them and will understand the variance between B.C. Hydro's and the B.C. Energy Commission's thinking.

HON. E.M. WOLFE (Minister of Finance): We've covered that already.

MR. GIBSON: Excuse me, Mr. Speaker, the minister interjected across the floor that he had covered that already. I think I should probably note here how the minister covered it. At 409-2-bt....

HON. MR. WOLFE: I said you covered it already.

MR. GIBSON: Yes, but you don't seem to understand it. Let me read how you covered it. He said:

There has been some discussion recently over the forecast rate of demand for electricity as to the accuracy of B.C. Hydro and Power Authority's forecast, when compared with that of the British Columbia Energy Commission. I am advised that the difference in the two forecasts is due to the British Columbia Energy Commission's inclusion of other utilities and private industrial generation, and they're starting from a higher base estimate.

MR. LAUK: Not exactly.

MR. GIBSON: Now that's not exactly correct, is it, Mr. Member? Not whatsoever! I gave the figures based on the Minister of Energy's press release which netted out those other utilities. There was still a 2 per cent difference.

Then do you know what the minister goes on to say, Mr. Speaker? He says: "Without arguing which is right at the moment, both estimates agree that from 1976 to 1986 the gross energy requirement will rise from about 26 thousand billion kilowatt hours now to about 52 thousand kilowatt hours in 1986." That's not exactly what it says, Mr. Minister.

HON. MR. WOLFE: Read the next sentence.

MR. GIBSON: Read the next sentence, yes: "It is apparent from these figures that the electricity capacity will have to double in the I 0-year period to meet the demand."

HON. MR. WOLFE: We'll deny that.

MR. GIBSON: You still don't understand, Mr.

[ Page 1377 ]

Minister. I'm going to have to go back over this release again.

AN HON. MEMBER: You tell him, Gord.

MR. GIBSON: You see, the B.C. Hydro projection goes from 25,900 to 56,400. Let's divide that. That's a factor of 2.09 times. Let's look at the other one: 51,900 divided by 28,306 - that's 1.83. Those don't agree, Mr. Minister, and when you're talking about billions upon billions of dollars they don't agree by hundreds and millions. I don't know what kind of Minister of Finance that is. Here's the press release.

HON. MR. WOLFE: Are you denying that it's going to double in 10 years?

MR. GIBSON: Yes. Here's your minister's press release. Do you want me to send it over? I just don't understand the kind of thinking on that side of the House.

HON. MR. WOLFE: All wet.

MR. GIBSON: Mr. Speaker, one group doesn't talk to another. Now I understand that - I wouldn't want to talk to a lot of them myself. But they are there in the business and they should be together. I don't understand.

Interjections.

MR. GIBSON: Anyway, Mr. Speaker, we'll get back to the B.C. Hydro and Power Authority document "Alternatives 1975 to 1990, " which I assume....

HON. MR. WOLFE: I'll send a phone book over. It will be more interesting.

MR. GIBSON: Well, Mr. Minister, that's generous of you to offer a phone book. It has a wonderful cast of characters but a lousy plot, in my opinion. If you don't mind, I'll read from these economic surveys, which were done at great cost to the government of the province of British Columbia. I think it would be a good thing if you read them now and again.

Now at page 34, as I mentioned, under the heading "Econometric Forecasts. . .

Interjections.

MR. LAUK: Oh, you're in trouble now. Lyle Kahl's listening. If he's listening you'd better change your speech.

MR. GIBSON: Is he going to heckle me?

Interjections.

MR. GIBSON: Mr. Speaker, I think it's delightful the way that the backbenchers.... If that's the Wizard of Oz, those are the Munchkins - you've got to know that. I think it's wonderful the way that they're taking an interest in this speech.

HON. R.H. McCLELLAND (Minister of Health): You're the straw man.

MR. GIBSON: Oh! Mr. Minister, be careful! Don't tempt me into going into the scarecrow and the tin woodman and the wicked witch of the cast.

MRS. JORDAN: Oh, come on. Let's see if you can do it.

MR. GIBSON: And who's Toto? Do you remember Toto? (Laughter.)

MR. SPEAKER: Could we get back to the principle of the bill now?

MR. GIBSON: Yes, Mr. Speaker, thank you. The delightful member for North Okanagan distracted me. I want to get back to this section on econometric forecasts, again at page 34, and this important statement:

"In order to even out the effect of short-term fluctuations that may not sustain themselves over longer periods, economic growth to 1990 will be generally consistent with that experienced over the 20-year period 1953 to 1973 as recapitulated below."

Mr. Speaker, that is a very important assumption that the coming 15-year period or 17-year period in this forecast is going to be the same as the last 20-year period. My personal opinion, sir, is that that is very questionable. It's questionable because the baby boom which has had such an extraordinary demographic impact on our country and on this province is just about past its peak now. It's questionable because the immigration data and the immigration rules and regulations of the federal government, which were unusually generous in the past 20 years, appear to be in the way of being considerably tightened so that our net immigration may fall from something around 200,000 a year to something around 100,000 a year.

It's also difficult to agree with in the sense that the increasing social programmes in different parts of the country, including, curiously enough, the very guaranteed annual income or negative income tax which this minister sponsors, are going to lessen incentives to mobility in our country. I'm sure he doesn't expect it to have that impact but that's what it's going to do.

[ Page 1378 ]

MR. LAUK: Well, he doesn't think any further than today.

MR. GIBSON: You're right, Mr. Member. Therefore it's likely that British Columbia's population growth will not continue at the same amount. And let's look at the assumption in this report: population - 3.0 per cent. Mr. Speaker, it's correct - 3.0 per cent was the growth that we had in 1974.

MR. LAUK: Not in 1975.

MR. GIBSON: And not in 1975 and not in 1976.

MR. LAUK: It's less.

MR. GIBSON: The trend is way down now. It's probably down about 1 per cent per year, and let me tell you the difference, Mr. Speaker. Three per cent doubles in 22 years, I per cent doubles in 70 years. That's a difference, just as simple as that. That minister's sitting there, planning on the basis....

MR. LAUK: He needs a calculator over there.

MR. GIBSON: Well, I don't know if his batteries would work the thing either, but he can take my word for it - 22 years - 3 per cent doubles; 70 years - I per cent doubles. That's the change in the population that we have.

MR. LAUK: That's a critical difference, and he's not even taking that into consideration.

MR. GIBSON: Next, we're talking about a change in gross provincial product per capita, going up 5.9 per cent overall. Mr. Speaker, we're not going to hit that this year. I doubt we're going to hit it next year, certainly under the economic tutelage of this government and the genial Minister of Economic Development (Hon. Mr. Phillips) there, doing his best, but going out and hunting for elephants instead of trying to bag the bread-and-butter items that should be in our province.

AN HON. MEMBER: One guy is hunting pheasants; he's hunting elephants.

MR. GIBSON: He is a pheasant hunter.

So the growth that this forecast is based upon is unlikely to happen, in my opinion. Now listen to this: "Point 2" and this is on page 35 - "In recognition of potential limits on the future development....

Interjections.

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

Interjections.

MR. GIBSON: "In recognition of potential limits. . . ."

Interjection.

MR. SPEAKER: Order! The hon. member has the floor.

MR. GIBSON: Thank you, Mr. Speaker. I was astonished to hear the Minister of Finance hurl sotto voce across the floor: "Get him to address the bill." Mr. Minister, I'm reading B.C. Hydro load-growth forecasts. Would you think that was somewhat relevant? Just an itsy-teensy bit of the corner of the principle of the bill? Didn't you kind of factor that in~ a little bit when you were deciding how much money Hydro should borrow?

MR. LAUK: The answer is no.

MR. GIBSON: I'm afraid it is. Point 2 on page 35: "In recognition ......

AN HON. MEMBER: Call your stockbroker. Your broker is on the phone.

MR. SPEAKER: Order!

MR. LAUK: Your real estate agent is on the phone.

MR. GIBSON: It says:

"In recognition of potential limits on the future development of natural resources within the province, there will be a marginal but progressive decline in the proportion of provincial product contributed by the primary extraction and manufacturing industries. However, this decline will be largely offset by a progressive increase in the proportion contributed by the secondary manufacturing and service sectors. The contribution of other sectors will remain substantially the same as at present. The net effect of these changes will be to decrease marginally the electric energy required per unit of real economic output independent of other factors."

Well now, Mr. Speaker, that too is a very interesting forecast, particularly given the performance of the Minister of Economic Development (Hon. Mr. Phillips) in managing to attract secondary manufacturing to our province. His record is.... Well, it's not just zero. He gave a speech

[ Page 1379 ]

last September, if I recall rightly, saying 8,000 jobs had left the province. One has to wonder whether this forecast is going to be borne out in view of that kind of economic record.

The paper goes on. It relates to energy price considerations; it relates to energy product elasticity coefficients. I won't bore the House with that particular data, except to say that it can be found at page 36 of this very valuable document, if anyone wishes.

Yes, Mr. Minister of Health (Hon. Mr. McClelland) , I'll send you over a sample; it's very good for you. The trouble is ... exactly how long one can consume this and stay in their place and talk, I'm not at all sure.

So now, at page 36, we get into the meat of the matter, which is this:

"The planning forecast for B.C. Hydro. A planning forecast of the electric energy demand on the B.C. Hydro system is given on exhibit 3-14, page 54. The forecast is illustrated on exhibit 3-15, page 55, plotted relative to past growth and to the econometric forecast discussed above."

I will turn to page 55 in a moment and describe what one finds there, but I should note in passing that there is a significant regional difference in electrical energy demand predicated in this particular forecast. For example, metropolitan Vancouver is contemplated to drop from 38.6 per cent in 1973 to a forecast percentage of 31 per cent in 1990. Fraser Valley, as the hon. member for Dewdney (Mr. Mussallem) will be glad to know, is proposed to climb from 8.5 per cent up to 13 per cent.

AN HON. MEMBER: That's all in his lot, too.

MR. GIBSON: All in his car lot, yes. That's exactly right. The lights are burning bright tonight in Dewdney.

MR. LAUK: He's going to put up a new sign.

MR. GIBSON: In the central interior, there's relatively little change. There's very nearly a doubling on the north coast, a considerable growth in the southern interior and, I'm sorry to say but perhaps members for the area will not be, a considerable decline in electricity demand on Vancouver Island dropping from 24.4 per cent to 18 per cent. Residents of Vancouver Island, of course, might accept this news with delight because I know there is some concern about the tremendous trend in population growth in this area.

MR. LAUK: Without delight. (Laughter.)

MR. GIBSON: Without de light. Mr. Member, go to the head of class. That was very good. I must tell you the difference between a lawyer and a rooster, but I won't do it now.

Interjections.

MR. GIBSON: Again, just before moving to the exact forecasts on page 55, they do add to caveat. First of all, they suggest the annual load-factor will stay constant at 63.5 per cent, and then they note as follows: "Changes in customer demands may serve to increase the system load-factor in future (i.e., decrease system peaking requirements) ." Mr. Speaker, you will understand the importance of peaking requirements in a system such as B.C. Hydro where there are extraordinarily heavy demands at some times of the day and some times of the year, and these are the expensive parts of the system. In effect, we're building all of this tremendous surplus capacity of the system purely to meet peaking needs.

AN HON. MEMBER: To meet one hour's load.

MR. GIBSON: To meet one hour's load - exactly, Madam Member. If we had a way to charge for our electricity in a way which was sensitive to this, and to discourage people from using power at these times of high load and encourage them to use it at times of low load when the generators are spinning anyway, how much more economical our system could be.

MR. LAUK: Economical? We can cut back on capital investment by hundreds of millions of dollars.

MR. GIBSON: We could, indeed, Mr. Member, cut back on capital investment by hundreds of millions of dollars. What does it take, I ask you? What it takes is a more sophisticated kind of electric meter that you change the rate according to the hour of the day. At the high peak time of day you send a little signal down the telephone line and, zap, the meter jumps into the high-rate mode, and then you get into the middle of the night and you send another signal down the line and, zap, it's into the low-rate mode. People at that time are encouraged to run their dishwashers and their electric clothes dryers and all these other appliances that have some genuine variability as to the time that they can be run.

MR. LAUK: That's a fantastic idea.

MR. GIBSON: It is a good idea, Mr. Member, and, you know, it's not a new idea. It's entirely within the ken of those hon. members opposite. The difficulty is, of course, they would rather spend hundreds of millions of dollars on new plant and equipment than they would rationalize the metering system in B.C. Hydro.

[ Page 1380 ]

MR. LAUK: The only thing they know about meters is how to spin them back.

MR. GIBSON: The report continues respecting these changes in consumer demands:

"These changes cannot be predicted accurately in advance but might include: (1) an increase in the proportion of high-load factor heavy industrial loads served (2) an increase in the amount of electric space-heating load if installed in conjunction with off-peak storage heaters, or (3) the widespread use of battery-operated electric vehicles in conjunction with off-peak recharging of batteries."

Think, Mr. Speaker, what a difference the adoption of the electric car in the next 15 years, should it come about, might make to B.C. Hydro, and might make to many of the car dealers in this House. It could be an event of tremendous consequence. I don't know if there's as much gross margin in electric cars.

But under these assumptions, and with the caveats mentioned, we see a chart on page 55 to which I commend the attention of all members of this House. I do have to say, Mr. Speaker, that the median forecast is 8.6 per cent, and that is so high above the forecast of the B.C. Energy Commission, and even above the current forecast of Hydro, that we have to say: how does all of this gibe with this latest suggestion as to development of capital resources, as suggested by the Minister of Finance, to justify the borrowing of this very consequential sum of money?

[Mr. Schroeder in the chair. ]

Well, it could be, you would say, Mr. Speaker, that the correct answer is not the installation of this kind of capacity contemplated by the minister, principally hydro-electric, with the exception of that rather minor expenditure for the Hat Creek situation. In that context, I think it would perhaps be useful to the House to review the different energy resources that lie within the province of British Columbia.

First of all, they make this summary statement, and I'm quoting now from page 57 of this invaluable report. They state:

"The annual demand for electrical energy in the B.C. Hydro integrated system is expected to grow by 70,000 million kwh, from 22,000 million kwh in 1974 to 92,000 million kwh in 1990. The following resources appear to be the most economic available to serve this growth in demand."

First of all, projects under construction: Burrard unit No. 6, the Kootenay Canal, and the Mica, yielding a potential annual energy, in terms of millions of kwh, of 10,500 million.

Next, hydro-electric resources, which include Site I and Seven Mile projects, which have been approved.

Next, as to Columbia River projects - 12,000 million.

Next, as to Peace River projects - 15,000 million. Then the orbit of the attention of the survey switches to what the describe as "thermo-electric resources on a 35-year-life basis." First of all, in terms of Hat Creek coal, they refer to that portion of the coal, which is what they describe as proven and probable, as yielding a potential annual energy increment of 16,500 million kwh. Hat Creek coal additionally inferred - another amount of the same magnitude: 16,500 kwh. And then East Kootenay coal, proven and probable - 9,000 million kwh. That's a total of 79, 5 00 million kwh, in excess of the forecast growth of demand to 1990.

They add a caveat, and a proper and important caveat, to those figures:

"The resources of oil and gas in British Columbia are limited and, as such, have not been considered for use in the production of electric energy over the long term, except for the operation of the existing Burrard generating station, isolated system supply, or to meet standby and peaking requirements."

Well, I don't know about that operation of the existing Burrard generating station, Mr. Speaker. I don't think that should be operated any more with natural gas whatsoever.

Then they go on to speak of nuclear power, which they say "could be available in the period to 1990 but does not appear to be as economic a choice as the alternative resources listed above."

Well, we'll get to a chart later on in this particular presentation which in fact does show that the nuclear alternative is cheaper than some of the other options they mention, but be that as it may for the moment.

They discuss, to some extent, the alternatives for supply of Vancouver Island, and they're talking too much gas there, natural gas generation. I think that's the wrong route to go, as I've said before.

They speak of our hydro-electric resources. First of all, the Peace River basin. They move on to the Columbia River basin, and I think members of this House are relatively familiar with both of these great systems which are both relatively developed now, although, assuredly before I sit down, I will have questions of the minister on the Kootenay-Columbia diversion which I expect he will answer, or else it's another reason we can't vote for these moneys.

But then we get on to the other river basins. Let's look at the Nechako River. I quote here again:

"The existing Kemano project diverts part of the Nechako River flow through a power plant into the Kemano River. The Kemano 11 project could use more of the Nechako River flow in a newer power plant located adjacent to the

[ Page 1381 ]

existing powerhouse.

"In addition to the use of the Nechako River flows diversions from Nanika Lake, the Dean River and Morice Lake could be considered. The date shown on exhibits 4 (l) and 4 (2) are for a project including these diversions.

"Although this project would be economically attractive, it has not been considered available to B.C. Hydro in the plans to 1990 because the water rights for the Nechako River and the Nanika diversion are held by Alcan until 1999. Studies of the environmental effects of the project are now being undertaken by the fisheries service of Environment Canada, B.C. fish and wildlife branch, and the International Pacific Salmon Commission."

Well, that's another pretty important question -that whole river basin. The minister hasn't touched on it; he hasn't touched on the general category of what this study described as undeveloped river basins. And again a caveat is entered. They state that relatively little detailed information is available on potential projects in undeveloped river basins either from an engineering or environmental standpoint. Future studies will be required to confirm the date given in exhibit 44 and discussed below.

Then, Mr. Speaker, they go on to describe a multiplicity of projects on the Elaho River, the cutoff mountain project on the Skeena River, the Homathko River projects - being Waddington, Mosley Creek, Nude Canyon, Tatlayoko and the Iskut-Stikine project. All of them, Mr. Speaker, have tremendous possibilities for the future of British Columbia, some of them, unfortunately, with significant environment dangers attached to them.

The study canvasses Fraser River projects, but, Mr. Speaker, I will not take up the time of the House with those because I hope and pray that this government will assure us the Fraser River projects are not on the books - the salmon industry is too valuable. We have had no such statements from the minister in asking for this extra $650 million.

From there, Mr. Speaker, the study moves into fossil fuel resources, particularly coal. I'm not even going to read the petroleum and natural gas reserves, except a little portion related to the Burrard thermal unit. But let's listen for a moment to the marvellous description of the Hat Creek deposit. "B.C. Hydro owns and holds licences for reserves of coal in the Upper Hat Creek Valley, 12 miles west of Cache Creek." Mr. Speaker, I've had the pleasure of inspecting that area, largely from the air because that's the best way to see it.

Interjection.

MR. GIBSON: It's the best way to see it quickly,

Mr. Member. I agree with you, one is better to go on the ground. I envy your ability to spend so much time in your riding, which is a beautiful place, but I have largely seen the Hat Creek area in any event, Mr. Speaker, from the air.

As the report notes, the proven and probable reserves established to date are 478 million tons, with an estimated average heat content of 6,000 btu per pound. Now, Mr. Speaker, as you know, that is not particularly high btu coal. Some of the thermal and indeed metallurgical coal can go up to the 10,000 or 12,000 btu per ton range, but there's a lot of this coal so the actual heat content is not of that much importance. With this 478 million tons, I think they must be referring to it as the first delineated pit. There is much reason to believe that the second pit which has been staked out later on is more in the nature of one billion tons, which has, as I said earlier, exciting potential for in situ generation of SNG.

Interjection.

MR. GIBSON: George, I hope you'll speak tomorrow on Hat Creek. I just want to lay a bit of a foundation tonight for you. I have a good deal of information to give the House.

DEPUTY SPEAKER: Order, please, hon. members. The member for North Vancouver-Capilano has the floor. If he would continue addressing the Chair, it would be much appreciated.

MR. GIBSON: Thank you, Mr. Speaker.

Interjection.

MR. GIBSON: Mr. Speaker, would you ask that member to speak up? I can't quite hear him.

They go on to state:

"These reserves are equivalent to 16,500 million kilowatt hours per year for 35 years, adequate to supply a 2,500 megawatt thermal electric plant. Based on 1974 price levels the cost of mining would be about $2.60 per ton or 22 cents per million btu, inclusive of royalties, resulting in a fuel cost of about 2.2 mills per kwh. -

Mr. Speaker, at this point I have to express my concern at this habit of B.C. Hydro of costing out their Hat Creek reserves at the cost of mining them, rather than at their value, what they could otherwise be sold for. It's exactly what we're doing with our natural gas. We're saying that just because we won it we're willing to use it and charge ourselves at a price less than its full value. So we're using precious natural gas in this province to spin the turbines at the Burrard generating station. B.C. Hydro is analysing Hat Creek coal in the same way, and I don't think that's the

[ Page 1382 ]

right way to cost that coal out. I think that coal has to be costed out at full economic value, whatever that may be. Now it could be you can't sell it anywhere else, and if that's the case then the cost of mining is a fair cost.

Interjection.

MR. GIBSON: Mr. Member, are you suggesting that that fine Hat Creek coal has no other market?

MR. G. MUSSALLEM (Dewdney): Sit down and I'll tell you.

MR. GIBSON: Are you suggesting that it is beyond the wit of this province, beyond the entrepreneurial skills, beyond the grasp and imagination of this province to develop in situ synthetic gas production from those extraordinarily copious reserves?

Interjection.

MR. GIBSON: Well, Mr. Member, through you, Mr. Speaker, all I can say is you disagree with the Coal Task Force, but then they were paid more than you so I'm inclined to believe them a little more on the subject of coal - not on many subjects, Mr. Member, through you, Mr. Speaker, but on this specific tiny question of the value of Hat Creek coal. But I'm ready to listen to you and I look forward to that talk of yours tomorrow.

Interjection.

MR. GIBSON: Should any time arrive tonight I'd be glad to hear them tonight too, of course, Mr. Minister.

Now a particular question that I want to put to the Minister of Finance that he must answer before he asks the House to pronounce on this bill is referred to on page 66 of this report under the heading of "Comox deposits." I wish the member for Comox (Ms. Sanford) were here because she is a diligent member and I know she is one who has expressed a good deal of interest in the potential of coal in her riding.

I want to make a quote here:

"The Comox coalfield, comprised of the Cumberland and Tsable deposits, is located on eastern Vancouver Island and is centred in the town of Cumberland. Proven and probable reserves accessible by underground mining are estimated at 64 million tons. These would be adequate to supply a 500-megawatt plant for a life of 35 years if a deep underground mining is feasible and acceptable. Possible coal reserves available in the Comox coalfield and in the Campbell River area immediately to the north are estimated to be 525 million tons. The cost of mining would be about $17 per ton or 88 cents per million btus, resulting in a fuel cost of about 8.7 mills per kilowatt hour."

Interjection.

MR. GIBSON: Well, I know that sounds like a high fuel cost, Mr. Member, but when you're talking about Vancouver Island and when you talk about the alternative being spinning those turbines with natural gas, which is so precious, maybe we have to look at that and look at the possibility of providing that local industry, too, in an area that needs it.

AN HON. MEMBER: How many jobs would that create?

MR. GIBSON: Mr. Member, I wonder how many jobs that would create. That's a very good question. I think we would be in an underground situation there to a great extent. I would just be guessing but it would certainly be in the hundreds, Mr. Member.

Interjection.

MR. GIBSON: It would be worth this government considering.

The report goes on to consider the East Kootenay deposits, of which I think the House is well aware, though, for other reasons. The main attention that has been paid to East Kootenay coal thus far has been in terms of metallurgical coal. The discussion here, of course, relates to thermal coal and will, I am sure, somewhere down the line, be of interest in the development of the East Kootenays, particularly if it can help stave off such environmental sacrileges as the Kootenay-Columbia diversion.

The report moves on to oil and natural gas. As I stated, I simply want to read this one excerpt concerned with the Burrard generating station.

"The Burrard generating station has been fuelled in the past by natural gas and residual oil as the secondary fuel. The average cost of natural gas used for generation at Burrard in 1974 including gas purchased under both firm and interruptible supply contracts was 56 cents per million btu and resulted in a fuel cost of about 5.5 mills per kilowatt hour."

Now let me do a little arithmetic in my head here, Mr. Speaker. A million btus is 1,000 cubic feet of gas, more or less, when you're talking about natural gas. If you're talking about coal gas, sometimes you have to hydrogenate it to bring it up to that value. But natural gas takes a million btus for 1,000 cubic feet. Fuel cost - 56 cents per million btus. The cost of those million btus to our American customers at the

[ Page 1383 ]

border - almost $2. In other words, B.C. Hydro at the Burrard thermal station is burning up the chimney at $1.40 per thousand cubic feet of gas when they could be using it for export to our American customers who aren't having their demands satisfied because of our so-called force majeure on the contracts. Yet B.C. Hydro finds it possible to throw $1.40 per thousand btus up the stack of the Burrard generating station.

Mr. Speaker, I say that's insanity, and I say that any government and any management of the British Columbia Hydro Authority that allows that to go on any longer is incompetent and should be fired. There are all kinds of reasons why the present management of Hydro, particularly the chairman of the board, should be fired in any event, as far as I am concerned. But this is a particular other reason, and there you have the numbers that go with it.

The report carries on here. It talks about hog fuel, which I very much hope will one day become a significant resource in this province. As you know, this is the waste and residue of certain operations of the forest product industry and if capital costs come into line there should be some way that the forest industry could use this residue in greater ways for the generation of their own internal energy requirements.

Of course, down the road there's the interesting possibility of using more of this waste and residue of hog fuel for the production of methanol, being, as you know, Mr. Speaker, a type of alcohol distilled from wood products or other deteriorating organic products which can be added to gasoline directly in your car. I think it can be added in the ratio of about one to six, without affecting the burning capabilities of the fuel, without changing the carburetion, and effecting a significant gasoline economy. This is the kind of possibility we have down the road in such things as hog fuel and what is generally referred to as biomass. These are possibilities.

The report gives, in my opinion, very short shrift to the opportunity to geothermal industry in our province. The hon. member for New Westminster (Mr. Cocke) had some interesting and apt things to say about geothermal energy. I'll quote the entirety of this paragraph just to show how inadequate is the present state of thinking.

"B.C. Hydro is presently investigating the feasibility of a geothermal development in the

Lillooet River valley, one favourable site out of some 10 possible areas of geothermal potential identified in the province. Since interim information on the extent of this energy resource and the potential feasibility of development for power generation purposes is still incomplete, no provision has been made at this time for its inclusion in alternative plans to 1990.11

Well, I think that's a shame, Mr. Speaker.

Geothermal energy, of course, is hardly new. It is well developed and functioning in the state of California and has been for many years. It is under active investigation in the state of Hawaii now, and, if my memory serves me correctly, there is an installation in New Zealand as well. I don't think B.C. Hydro has moved nearly quickly enough on this. I'm afraid there's a certain commitment to the traditional there, on the part of the top management, which they're having some difficulty breaking out of.

Here's a statement about other energy options on the same page:

"Other resources that may be used to generate electric energy, such as wind power, paddle power, solar power and nuclear fusion, offer considerable scope for development in the future but are not practical for inclusion in a programme of development to 1990 for a number of reasons. Nuclear fusion is not expected to be available until the end of the century. Electric generation from solar power is not developed to a commercial stage and may not become economic. Wind power is practical on a small scale only and is effectively limited to areas of strong, steady winds. The present state of the art for tidal power does not indicate that such developments will be economic in British Columbia in the near future."

Interjection.

MR. GIBSON: Well, that's again a pretty discouraging write-off of what many people hope is part of the energy future of British Columbia, Mr. Member. I think that in Dewdney there are people who are saying to themselves tonight: "Solar power's maybe it." Maybe we should be looking a little bit more at that.

AN HON. MEMBER: Wind power?

MR. GIBSON: Wind power, tidal power....

HON. MR. WOLFE: Candle power.

MR. GIBSON: Pyramid power.

AN HON. MEMBER: People power.

MR. GIBSON: There are these opportunities, Mr. Speaker, which B.C. Hydro is not sufficiently chasing down. Now then it exhibits 4-2 on page 7 3.

HON. MR. WOLFE: What's the name on that book?

MR. GIBSON: The name on this book, Mr.

[ Page 1384 ]

Minister, is "Alternatives 1975 to 1990." It's a very thorough document published by B.C. Hydro. You've read it, of course, Mr. Minister.

HON. MR. WOLFE: What's the date on that?

MR. GIBSON: The date is May, 1975 - the most recent, up-to-date report of all these alternatives available to the House. I had assumed you'd read it. But since the minister obviously hasn't read it, there's obviously some merit in continuing these quotations.

HON. MR. WOLFE: I'm asking you what it was before you gave your song and dance.

MR. GIBSON: Now I got as far as this chart on page 73, exhibit 4-2. Here we have a scale. On the ordinate is plotted the comparative energy cost index, and on the abscissa is counted the discount rate in percentage points. The various projects are displayed as sloping lines, going in one direction or another. Here we see what is economic and what is not, in the view of B.C. Hydro.

Now I'll tell you what bothers me, Mr. Speaker. It is the fact that the lowest cost on this whole list is the Kootenay diversion. I think this is why B.C. Hydro has their beady eyes fixed on that project that would flood out that beautiful area. Because at a discount rate of 12 per cent, it's less than half the price of the next alternative. The next alternative itself is Moran Dam, so no wonder they have their eyes fixed on that, too. Believe me, Mr. Speaker, B.C. Hydro has not for one second given up the Kootenay diversion or the Moran Dam or the McGregor Dam. In fact, they intend to get them, in that reverse order, in my opinion.

Interjections.

MR. GIBSON: Mr. Speaker, this is fascinating. The hon. member for New Westminster (Mr. Cocke) quotes the chairman of B.C. Hydro as saying that energy conservation isn't going to mean anything. Is that what he said to the Employers Council of British Columbia?

MR. COCKE: That's right.

MR. GIBSON: Well, I'm shocked at that, because we've seen in the last couple of years just what energy conservation can do. We've seen what can happen as cars get smaller. We've seen what can happen as homes get better insulated.

Mr. Speaker, I wonder if the members opposite yet have any concept of exactly what the proper insulation of homes can do. Are they aware of the programmes that are underway now in Nova Scotia and Prince Edward Island? Nova Scotia - $63 million federal contribution. They hadn't even heard about it over there. Why don't we go out and get some of that to insulate our own homes in British Columbia? A $12 million contribution in Prince Edward Island. Do you know what that's doing in terms of energy conservation, Mr. Speaker? The forecast there is that that will conserve sufficient energy to pay for itself in terms of barrels of oil not imported into this country within two and a half years. And here we have the chairman of the British Columbia Hydro and Power Authority saying conservation doesn't mean anything.

Interjection.

MR. GIBSON: Thank you, Mr. Member. The member for New Westminster elaborates that quote a bit further to say that the chairman does agree that there would be some conservation if we had a depression which caused conservation because of economic consequences.

DEPUTY SPEAKER: Order, please. Hon. member, perhaps some of the coaching that is coming from the member for New Westminster might better be made when the member for New Westminster makes his speech in this debate.

MR. GIBSON: Mr. Speaker, as you know, what happens on an evening like this is synergistics. The interaction of many minds brings out ideas that sometimes would not by themselves have come out, so I very much welcome the interventions of the member for New Westminster. He has already, of course, spoken in this debate, and this is a little sidelight that escaped his remarks when he was on his feet, so I am happy to have the opportunity.

We were talking of conservation, and I hope that point is made - that if we devoted some of our resources in this province to conservation instead of the building of ever more dams and the flooding of ever more valleys for B.C. Hydro, we could not only save ourselves a lot of money but we could also save ourselves a lot of energy, and energy, make no mistake, Mr. Speaker, is going to more and more be considered the coin of the future, because that, like the touchstone of the alchemist, is what can be turned into anything.

I want to get back to this exhibit at page 73 of the report, exhibit 4-2, because after the Kootenay diversion which is the cheapest and also the worst project, we find the Moran project which is also a very bad one. It shouldn't even be considered, but it's the second cheapest. Then we find that the McGregor is the next in the scale of importance with B.C. Hydro. Then we get onto Revelstoke, and Seven Mile and Site I and, of course, these are under construction, so where do we go from there? The

[ Page 1385 ]

next one up is Hat Creek. Well, good. Let's look at and study Hat Creek, but I ask the minister again what he meant by saying we're building a plant there next year for $18 million. What kind of a plant do you build at Hat Creek for $18 million? I'm puzzled at that, Mr. Speaker. I genuinely am. He's got to explain that on second reading when he closes debate. The next least costly is Site C, and the environmental objections there are just tremendous. Then, after that, we get to East Kootenay and surface coal, and then we get into the Homathko and the Iskut-Stikine and East Kootenay coal. Cutting in about that point comes nuclear power incidentally, Mr. Speaker. That was back in 1974 capital costs. I suspect nuclear power might have moved somewhat lower cost on the scale at this point.

So that's the plan. That's the B.C. Hydro plan as of 1975, and when they've finished with that planning they come up with a proposed recommended future. Let's go through this a little bit and let's see how close it is to the suggestions of the minister in his opening statement.

First of all, and we're now at page 108, Mr. Speaker, there is what is referred to as the generation programme. There are naturally two main parts in terms of capital costs. There's a generation programme and a transmission programme. For our purposes, I think the generation programme is the main item to consider tonight.

"The programme through 1980 is substantially the same as in earlier plans. Projects at Burrard, Kootenay Canal, Mica and Cow have been committed, and most of the major supply and construction contracts have been let. A review of the balance of the programme for this period led to interim recommendations as follows:

" (1) Site I hydro-electric project should be constructed for service in 1979 as previously scheduled."

That's going ahead.

" (2) The Seven Mile hydro-electric project should be scheduled on the basis of the first unit being available for service in April, 1980." That's going ahead.

"The Duncan Bay hydro-electric project previously scheduled for service in 1980 should be deferred indefinitely."

That's item No. 3. I'm not so clear as to why that should be.

Then they move on to the recommended generation programme beyond 1980. No. 1, the construction of a 300-megawatt gas turbine plant on Vancouver Island with 150 megawatts scheduled for service in 1981 and 150 megawatts for service in 1982.

Mr. Speaker, I would like to know how much of this $650 million we're being asked to authorize is going to be dedicated in any way to Vancouver Island. Vancouver Island is continuing to grow in this province and is proving out as one of the most desirable areas to live in our land, particularly for retirement purposes. There is going to be an electrical energy problem on this island. And yet every fibre of my being says it's wrong to use natural gas for the generation of electrical energy in this province. So what solution does the minister have on that now and what portion of this $650 million is going there?

The second recommendation - this is at page 109 - is the construction of the Revelstoke hydro-electric project with an ultimate installation of 2,700 megawatts in six units of 450 megawatts each, units I and 2 scheduled for service in 1981 -, units 3 and 4 for service in 1982.

Well, Mr. Speaker, that more or less brings us up to the present, doesn't it? It's bulling through this very project on the basis of the high load forecast and the high growth forecast that has so worried the hon. member for Revelstoke-Slocan (Mr. King) , who spoke so eloquently as the designated spokesman of his party earlier on in this debate and expressed the myriad concerns - to which I shall turn in due course - of those who were testifying in the Revelstoke Dam hearings, and which saw a certificate of convenience and necessity granted without, in my opinion, sufficient time for mature consideration. So that's where we are now: Hydro is going ahead with the Revelstoke project.

But then, past that - and this is recommendation No. 3 - the construction of a major coal-fired thermal-electric plant at Hat Creek.

"The initial stage would comprise a four-unit 2,000-megawatt plant with the first 500-megawatt unit scheduled for service in 1983. The second stage, provided sufficient additional coal reserves are proven, would comprise a four-unit 2,800-megawatt plant with the first 700-megawatt unit scheduled for service in 1986. Investigations are in progress as to methods of obtaining cooling water and meeting pollution control requirements both for the first stage of development and ultimate full-scale development of 48 megawatts as presently contemplated."

flow does this jibe within our planning horizon with the minister's statements about Hat Creek? I ask this as an honest question of puzzlement, Mr. Speaker. I want to quote him again:

Then there is Hat Creek. Plans for the development of certain coal reserves are underway, and an electric generating plant is to be constructed at a cost of $18 million in 1977-78.

That's interesting: "development of certain coal reserves" Does that mean the decision has been made, Mr. Speaker? Where's the Hat Creek file here? Oh, my goodness, here's an environment study on it which I

[ Page 1386 ]

want to cite from a bit. Another clipping here from last year says: "Hydro Hesitates on Hat Creek Scheme." I don't think the decision has been made yet, and yet here's an expenditure of $18 million for the development of certain coal reserves and a generating unit. I really must ask the minister to explain that when he closes debate on second reading. You could send the document over now, if you like, Mr. Minister. Send it over now; I'll read it with interest. I'll delightedly read it out. And as to the prospectus, of course, I'll be getting to that in a bit.

Interjection.

MR. GIBSON: That's good.

Interjection.

MR. GIBSON: Oh, good! Could you tell me what page?

Interjection.

MR. GIBSON: Page 20. You know, I wonder if we have different pagination of our copies. This is the prospectus - with your permission, Mr. Speaker -dated November 23,1976; First Boston Corp., Kuhn, Loeb & Co., and so on. "Planned Major Generating Facilities" is what I see on page 20.

Interjection.

MR. GIBSON: All right. Hat Creek 2 and 3.

Interjection.

MR. GIBSON: Additional: 18.9. Oh! Well, what that is, Mr. Minister - through you, Mr. Speaker - is preparatory work.

Interjection.

DEPUTY SPEAKER: Order, please. Is the minister closing the debate?

MR. GIBSON: No, no.

DEPUTY SPEAKER: The member for North Vancouver-Capilano. Please address the Chair, hon. member.

MR. GIBSON: Thank you very much, Mr. Speaker. I appreciate very much the minister elucidating that for me because I understand now. Obviously what he is referring to as the $18 million is not, in his words, an electric generating plant in the sense that it's going to be a complete plant. There's work being commenced there, in other words. But the major expenditures of $519 million in 1979 through to 1981 and $548 million for the five-year total have, really, yet to take place. So that explains that one to me.

Interjection.

MR. GIBSON: Thank you, Mr. Minister. I do appreciate that. Somehow or other, we have another hour and a quarter to fill and we might as well do it in the most educational way we can.

Now we move on to recommendation No. 4 here. This is one that scares me, Mr. Speaker. Recommendation No. 4 is the construction of the Kootenay diversion project for service in 1984 - an interesting year - as permitted by the terms of the Columbia River Treaty. This is the recommended plan of B.C. Hydro, Mr. Speaker.

Now at this point I really think it would be a good thing to quote from the hon. Premier at the time that he was visiting - the dateline here is Cranbrook. The date of this clipping, and it's from the Times, is November 26,1976.

"CRANBROOK (CP) - Premier Bill Bennett expressed his concern Thursday about B.C. Hydro's proposal to divert the Kootenay River into the Columbia River. Speaking to a youth conference here, Bennett said he is personally against the project and intends to fight it because it would result in major flooding from Golden to Windermere.

"Bennett said he might reconsider his objection if B.C. Hydro could come up with proposals that would remove concerns about the project by environmentalists." - listen to this quote - "The arbitrary way Hydro appears to operate is one of his main concerns with the project."

Mr. Speaker, when our Premier talks about "the arbitrary way that Hydro appears to operate, " how can we in any good conscience provide $650 million further until that kind of arbitrary way of operation is cleared up? And yet that's what our Premier said. You know, it was a funny thing, Mr. Speaker -my heart leaped when I read that because I am a foe of the Kootenay diversion. I will not mislead you, sir; I will not suggest any other thing. I am a foe of the Kootenay-Columbia diversion plan for a very good reason. There are too many people and too much land and too much wildlife that would be adversely affected for insufficient reasons. But hon. members, somebody zipped the Premier up. They zipped his lip after he said that and he never said it again. Did you know that? He got back into the lower mainland and the B.C. Hydro officials got on top of him and King Robert I told him where it was at and he said: "Don't you say any more about that Kootenay-Columbia diversion, because we've got it on our list. It's No. 4

[ Page 1387 ]

on our list and it's the cheapest one on our list, so you just be quiet about that, Mr. Premier."

He hasn't said anything further and I just wish that one of the ministers, as he was introducing this debate, had at some point or other said: "Hon. members, you can relax because there's nothing in here for the Kootenay-Columbia diversion." But the fact of the matter is they're still studying it. What have we here? Here we have a status report on the Kootenay-Columbia diversion project. B.C. Hydro, July 1,1976, and I don't know whether to read this first, Mr. Speaker. Perhaps it would be valuable at this stage to give some idea of local sentiment with respect to the Kootenay-Columbia diversion, because I want to tell you that there is a lot of local sentiment.

Here's a letter from the area:

"I believe it's important that we inform you especially about our concern about the Kootenay River diversion. In essence, no more flooding on the Columbia River system. The enclosed article expresses well the feeling of this valley."

And what is the enclosed article? It's from the Lake Windermere Valley Echo of Thursday, April 22,1976, and it is a heartfelt plea by a gentleman by the name of Ron Ede. I want to just read what he says:

"I have lived in this valley for over 50 years. During that time the area has experienced many man-made changes, but when I look at the mountains and the lake and the river bottom, they appear the same as they did when I was a boy. There have been changes, such as the buildup of residences along the shores of the lake- the draining of the meadows and [illegible] Beach Sloughs, to name just two, to make them suitable for subdivision; the odd scar left by logging roads; and the fact that it's difficult now to find a big tree. But in the main, the lake and the surrounding mountains and the river bottoms running north are virtually visibly unchanged.

"The entire world is facing an energy problem and we in B.C. are not exempt. The trees have been taken from our hillsides and even though some advocate that we return to this resource for cooking and heating, it only makes sense that if all were to use wood, this resource would be consumed in very little time. Our oil and gas reserves cannot last forever. They do not come from a bottomless pit and what we have used and are using is gone. It is a non-renewable resource.

"Solar and other envisioned means of producing usable energy are still products of the future. Atomic energy is expensive and creates an environmental problem of water overheating that to date has not been solved. So electrical energy by means of thermal or water power is still the answer and the demand for this type of energy is increasing every year.

"Estimating the decrease in consumption of oil and gas as it becomes less and less available and more and more expensive, and the increase in population and industrial growth, figures are projected to anticipate our power needs over a given period of time. B.C. Hydro has expressed such a set of figures for British Columbia until around the year 2000. Included in projects to meet the anticipated demand during the next 10 years are the Revelstoke Dam, the Hat Creek thermal unit and the Kootenay-Columbia diversion. The diversion of the Kootenay into the Columbia, tentatively scheduled for 1984, provides more water to provide more power at Mica, an increase in power terminology of 90 megawatts. "

May I insert parenthetically here, Mr. Speaker, the obvious comment that this gentleman has done some study of this situation.

He continues:

"How much is 90 megawatts? In B.C. Hydro's report of the task force on future generation and transmission requirements released in May, 1975, there is a chart on supply and demand, a recommended plan. In the chart existing, hydro in use in B.C. today was expressed with a 7/32-in. thickness and Mica generating about the same. Revelstoke, planned to be in use in 1981-82, again, is about the same. Hat Creek, planned for 1983-84, when in complete operation in 1990-91, is 1-7/8-in. thick. The Kootenay-Columbia diversion and its 90 megawatts is about the thickness of a pencil stroke, "

He's comparing the magnitude of this diversion with the others, and it's very small.

"It's inconceivable that with planned generation increasing tenfold or more by 1990 the 90 megawatts developed by the Kootenay-Columbia diversion is necessary. And at what cost? B.C. Hydro Authority say it is exceptionally cheap in terms of actual dollars to be spent, but what of the people who live here and visit here? What about the environmental impact and the effect on the ecology of the valley? from B.C. Hydro say that the valley will be kept at approximately 1974's high-water mark during the months of May until October. Anyone looking back at high water 1974 knows that all beaches on Lake Windermere were flooded beyond use. With no Crown land available on lake shores for this purpose, what do residents and tourists get in return for these beaches? Many homes in low-lying areas will be flooded. The owners of

[ Page 1388 ]

these homes built in those locations because of certain conditions that were appealing to them. How will they be compensated for their loss, not in terms of monetary value, but in terms of environment?"

Again parenthetically, Mr. Speaker, may I remind you of the loss and suffering at the time of the flooding of the Arrow Lakes and the fight that was met at that time by Bert Herridge. You will remember well that Bert did a great job on that but it was flooded any way. Carrying on with the quotation:

"Kootenay River water is many degrees colder than Columbia River water, which is exposed to the sun over the surface of two large lakes. It is realistic, then, to expect the temperature of Columbia and Windermere Lakes to drop considerably. Will this have a detrimental effect on the swimming and other water sports enjoyed at the two lakes?

"Over eons of years the sloughs between Athalmer and Golden have developed a culture all of their own. It is built on so many months of flooding and so many months of drying. With the added water this ecology, which supports various waterfowl and wintering big game, as well as unique species of plant and aquatic life, would in all probability be destroyed.

"What about the fishing? What about the mud and garbage left on the shorelines after the high water recedes in October? What about the possibility of the alluvial fan at Dutch Creek giving out under the additional pressure of Columbia River water and the subsequent draining of Columbia Lake? What about the environmental and pollution factors connected with the lesser flow of water downstream from Canal Flats? And will another dam be built upstream from the diversion on the Kootenay River to trap runoff water so that the flow north and south can be regulated at the cost of another valley being flooded?

"'All these realities and possibilities to residents here and visitors to the valley are beyond the scope of monetary value. They are the non-dollar debits to provide power that measures a pencil-line thickness on an overall power chart that measures 5.5 inches. Speculation is that rather than value power gained, the whole impact of the project is to force the U.S.A., because of the diversion impact on the Libby Dam, to negotiate with B.C. in terms of power kickback from the Libby project. But the Kootenay diversion only reduces the total flow at Libby by 25 per cent, hardly a bargaining proposition. But 48 years from now, in 2024, the terms of the Columbia River Treaty expire. Then B.C. could build a dam at Bull River and another at Luxor, and 75 per cent of the water could be diverted from Libby.

"Water and power 48 years from now will be even more valuable than it is today. Perhaps the thought is that the U.S. will be willing to pay dividends to B.C. today in terms of power to eliminate any interference with the Libby project now or at any time in the future."

Again, if I may editorialize, Mr. Speaker, let us not forget that it has been well within the capacity and performance of Social Credit governments over the years to sell off future benefits in terms of water power for the benefits of today. Mr. Ede makes a good point. Let us never forget the downstream benefits from the Columbia. The downstream power benefits were sold for 30 years at a fixed rate in one of the monstrously financial pieces of stupidity in Canada in this century. Here's a suggestion that the same sort of thing, the same kind of deal, could be entered into for today's benefits under the Kootenay diversion.

I'll return again to the text:

"Whatever B.C.'s reasoning, we must consider the tremendous damage possible in this valley for the acquisition of a pencil-line thickness of power. In no way can the balance sheet be equated.

"I've lived in a valley that has suffered few physical changes over the past 50 years, and even less for all the years before that. I sincerely hope my children and grandchildren, their grandchildren and generations after will continue to see this valley as nature intended."

That's the end of the quote, Mr. Speaker. And what is it? It's a heartfelt expression of a British Columbia citizen who has taken the time to put pencil to paper to tell his local newspaper how he feels about something. It's a message that we in this House must not overlook. It's a message which the powers that be at B.C. Hydro at the corner of Burrard and Nelson in Vancouver, in their great big building, find it all too easy to overlook.

It's the job of this House to bring these messages home, and the only way we can do it, Mr. Speaker, is by objecting and protesting the continued expenditure of billions upon billions - and in this case $650 million - by B.C. Hydro completely beyond the control of this House once we've let the money go out the window.

So that was the Kootenay diversion project. A little bit later I may get back to some background on that because I have a press release of some extent from the British Columbia Hydro and Power Authority, dated July 1,1976. So I may return to that.

I want to continue for a moment, working my way through the recommendations of the B.C. Hydro

[ Page 1389 ]

document titled "Alternatives: 1975 to 1990." Members will recall that recommendation No. 4 was the construction of the Kootenay diversion project. Recommendation No. 5, Mr. Speaker, is one of some significance. I would say it certainly should be of some concern to members of this House.

"Construction of the McGregor diversion project for service in 1985. An earlier development of this project would be economic and should be considered if environmental concerns can be resolved in time."

Now , Mr. Speaker, at this time I want to pay tribute to the hon. member for Alberni (Mr. Skelly) who, during this debate, has flagged this very concern. Mr. Speaker, what a funny thing it is that not a single member on that side of the House has said anything about the McGregor diversion during this debate.

MR. KEMPF: We haven't had a chance, Gordie.

MR. GIBSON: Haven't had a chance! Oh, Mr. Member. Through you, Mr. Speaker, I think the member must be shy.

AN HON. MEMBER: Gun shy!

MR. GIBSON: Mr. Member, I don't know if they allow you to speak. Do they?

You know, we got a little clue on the McGregor diversion in an article in The Province of December 21,1976. Now listen to this, and you'll see, Mr. Speaker, how this is connected. Well, I'll explain.

"The 10th generating unit is to be installed in B.C. Hydro's Bennett Dam, says J.K. O'Kelly, production superintendent. Construction will start in the spring and take two years. The new unit will generate 300 megawatts. The Bennett Dam has slots for 10 turbine generators, though only eight were put in at the start. Unit nine went into operation last year.

"Previous B.C. Hydro information was that there was insufficient water in the Williston Lake reservoir to operate the 10th unit. According to O'Kelly, the company was mistaken in this."

Goodness, Mr. Speaker, the company was mistaken, apparently by a factor of one-ninth, about 11 per cent, in the amount of water available to drive turbines in the Bennett Dam. Are you surprised that B.C. Hydro would be out by 11 per cent? But of course they disagree with the B.C. Energy Commission too, so I suppose that's possible.

Let's carry on with this article here-1 it will possibly explain it. Speaking again of Mr. O'Kelly, the newspaper quotes him:

"He denied that the decision to install the unit implied a commitment to the McGregor diversion project. The proposal to divert the south-flowing McGregor River near Prince George into the Parsnip arm of Williston Lake has extracted wide-spread opposition from conservationists. They fear that the loss of water to the Fraser system will increase the concentration of pollution in the lower reaches of that river, causing major damage to the salmon fisheries."

So we perhaps start to see a little bit of the game that is played by B.C. Hydro, all too typically. The game is called "put the public in a position where they have no other choice." All you have to do is find another choice that's so bad that you say: "I just have to do whatever it is the corporation is telling me to do." In one case the choice might be "well, if you don't go for Revelstoke, you've got to go for nuclear power, " or "if you don't go for Hat Creek, you're going to have brownouts in your homes four years from now, " or, in this case, "if you don't go for McGregor, maybe you're going to have one unit, 10 per cent of the capacity in the Bennett Dam, not working because there's not enough water." They're conveniently denying that for a moment saying they made a mistake, and there wasn't enough water before, but now there is.

Then after the generating unit is in they're going to say: "Well, we've had less rainfall than we really expected and we just have to have that diversion to make this thing economical." That would be entirely consistent with the game that B.C. Hydro has been playing with the people of this province -manipulation, emotional blackmail, doing whatever is necessary in jiggering around the information available to the public to have them say in the end: "Well, I guess we have no choice. I don't like it, but if we want to keep our lights burning I guess B.C. Hydro knows best, so we have to have whatever it is they say." That's the game they play.

That recommendation was not ambiguous. There's nothing ambiguous at all in this document in 1975. I'm afraid that's what they're up to. Did the cabinet pay any attention to this? There was a brief presented to the provincial cabinet in Prince George, October 7,1976. Were you there, Mr. Minister? You would have been there, Mr. Minister of Highways (Hon. Mr. Fraser) . You probably remember this brief presented by the McGregor diversion group. What I want to know is whether the cabinet paid any attention to it. They make some recommendations here at page 5 of this brief:

" (1) Secrecy: Information gathered by B.C. Hydro and government agencies is all too often released on a very selective basis. Major reports that are printed and ready for distribution often sit for years gathering dust, apparently out of fear of the public. For example, we

[ Page 1390 ]

cannot even obtain a 1974 study of Prince George diking costs because it is bound up in the secrecy surrounding the McGregor diversion proposal. The 1974 Environment Canada report detailing the effects of system E on the Fraser River salmon industry has not been released although it is nearly three years old."

Parenthetically, Mr. Speaker, as you know, system E is a particular scheme of dams and diking for a combination of flood control and power purposes on the Fraser River. It was a joint federal-provincial study many years ago.

Carrying on:

"Mr. Premier, we feel that a Freedom of Information Act is needed to rectify this injustice. It would be a most worthy complement to other advances made by your government in the civil rights field, such as providing an ombudsman and an auditor-general."

MR. H.J. HADDAD (Fort George): How many of those are confidential now?

MR. GIBSON: Well, they sure were at that time. I could give you quite a list of reports that are still confidential, Mr. Member, if you really want to go into a debate on government secrecy, through you, Mr. Speaker.

MR. LAUK: How many reports don't we know about?

MR. GIBSON: How many reports, as the hon. member says, do we not even know about? I know the member intends to speak in this debate later, Mr. Speaker, so I hope he will just answer this question. Does he disagree with this statement that is the operative statement of that paragraph? "Information gathered by B.C. Hydro and government agencies is all too often released on a very selective basis." Do you disagree with that?

MR. LLOYD: I'm asking how many are released right now.

MR. GIBSON: Are you completely content, or even half content, with the openness of your government?

MR. LLOYD: Sit down and I'll tell you.

MR. GIBSON: I can hardly believe that he is. But you never know, he might be. He's a backbencher. The Munchkins - it does funny things to you.

DEPUTY SPEAKER: Order, please.

MR. KEMPF: There's enough hot air - we could do away with B.C. Hydro.

DEPUTY SPEAKER: Order, please.

MR. G.S. WALLACE (Oak Bay): That wouldn't be a bad idea.

MR. GIBSON: Point 2: water licence hearings.

"it is now increasingly clear that the implications of damming rivers are much wider than the scope of the Water Act. Economic, social and environmental considerations are now so complex that an agency with a broader mandate is required. It is simply not credible to expect the comptroller of water rights to ever turn down B.C. Hydro, regardless of the merits of its case. We feel that the B.C. Energy Commission or the Environment and Land Use Committee secretariat are more suitable agencies for proposals of such a large magnitude."

Mr. Speaker, I think that's self-evident. It's been to the convenience of B.C. Hydro and the government to maintain the present system - keep it all nicely in-house and under their thumb and don't have any uncontrollable nasty little agencies out there that might ask some questions and raise a little trouble for the government or, even worse, for B.C. Hydro.

MR. LAUK: Robert 1, energy czar.

MR. GIBSON: Emperor Robert 1, energy czar. That's right.

"No. 3: B.C. Hydro. The McGregor Action Group is forced to publicly ask if B.C. Hydro is given the policy direction that can only come from the elected representatives of our province. B.C. Hydro is an independent Crown Corporation but it is acting increasingly as if it were an empire unto itself, responsible to no one. Surely the events at Revelstoke have seriously damaged B.C. Hydro's credibility and, if unchecked, will reflect poorly on the entire governmental process.

"Recommendation for energy conservation. The McGregor Action Group is most disappointed in the record of energy conservation practised by B.C. Hydro. Energy conservation means more than a few ads with Bob Fortune peering into oversized air vents."

How right they are in that.

Mr. Speaker, here is one group of many - this particular group meeting with the cabinet, trying to give their best advice, particularly concerned, of course, with the McGregor diversion. As their press release mentioned, they're a Prince George-based non-profit organization formed two months after Hydro said it was giving serious attention to building

[ Page 1391 ]

a storage dam on the McGregor. It was formed because if that proposal is proceeded with the dam would back up water across the Continental Divide and into the Parsnip River, and that has consequences which relate, as Your Honour knows, not only to the flooding of that valley, but to the possibility of parasite infestation from the Arctic Ocean into the salmon population of the Fraser, into an admitted decline which, I think, we have to take as a minimum baseline of 7 per cent in the Fraser salmon fishery.

Again B.C. Hydro is trying to justify this on the big scare of an 1894 flood all over again. The diking system is built up to 1894 flood levels now, or underway, in most parts of the lower Fraser Valley. We've got to know a lot more about the trade-offs on this. It can't just be a question of dollars and cents, and that, Mr. Speaker, to me is the only way that B.C. Hydro thinks.

It's interesting to note, as we proceed through the ensuing recommendations, that we then move on to much less controversial things: a two-unit, 1,400-megawatt, coal-fired, thermo-electric plant in the East Kootenays. Unit 10 at G.M. Shrum generating station in 1985 - seems they moved that one up a little bit, doesn't it? Before, they were only going to install that after the McGregor. That gives a little bit of credence to the suggestion that that's a part of the argument - that it's going to be installed and they were going to say: "We have to have the McGregor."

They are suggesting units 5 and 6 at Revelstoke in 1989-1990; unit 4 at Seven Mile at 1990; and I think perhaps I skipped units 5 and 6 at Mica in 1986 and 1988. All of these enormous installations compared to what you're talking about ... the Kootenay diversion, for example, or the McGregor diversion, as far as that goes, and yet they want to sneak those in en route, early enough so that they can still say: "Well, if you won't do this there are going to be brownouts." Those are the tactics of B.C. Hydro.

So, Mr. Speaker, that's the essence of that report, except for this little section here about load-growth adjustment. They say what they do if they get higher load-growth, but that's just not likely with the very high levels that they're taking. Then they go on to talk about lower load growth, which seems to me the far greater risk at this time. Members will find this at page 114. 1 quote again.

"If, with time, it appears that load growth over the short term of five to six years will be lower than the planning forecast, a reduction in revenues, with the attendant risk of financial loss, should be anticipated. To some extent the reduction in revenues will be offset by reduction in fuel costs. There will also be the possibility of selling surplus electric energy to other utilities at prices which will largely compensate for the shortfall in revenues."

There'll not be much reduction in fuel costs when you're talking about hydro plants. The sale possibilities may well be there, but in the meantime you may have been forced into prematurely approving a project not sufficiently justified on the basis it was needed for a date when it wasn't really needed at all.

A good deal of the money that is earmarked here will, in one way or another, be having to do with the Revelstoke project. I have a very important piece of testimony given at the Revelstoke hearings which I would like to peruse for the benefit of members of the House at this time.

Oh, but first, because this piece of paper is above it on my desk, I want the minister to make some comment, when he closes debate, on the note to the B.C. Hydro and Power Authority pension fund statement as put together and, I presume, transmitted to him by Price, Waterhouse and Co., chartered accountants, on November 16,1976. As in many auditing reports, the relevant data appears in the notes to the statements, and I'll just read note I here:

"An actuarial report dated December 1,1975, indicated an evaluated accrued deficit in the pension fund of $41,057, 000 as at December 31,1974, largely resulting from changes in the plan since the last actuarial report.

"British Columbia Hydro and Power Authority has assumed responsibility for financing the accrued deficit over a 25-year period by quarterly payments of $765,250. The first payment was made in June, 1976, to cover the period from April 1,1975, to June 30,1976, and amounted to $3,826, 250. This is in addition to estimated past service costs at the time the plan was introduced, which are being funded by annual payments by the Authority of $393,800 over a 15-year period, which commenced April 1,1967.

"The actuarial report also indicated that if contributions to the plan continued at the rates in effect at December 31,1974, there would be a future additional evaluated deficit in the plan of $10,702, 000, which could be funded by an increase of 1 per cent in the rate of contribution."

An increase of 1 per cent in the rate of contribution, I will say parenthetically, Mr. Speaker, and a future additional evaluated deficit of $10 million. Returning to the note:

"The rate of contribution was increased by 1 per cent effective September, 1976, the increase being shared equally by employees and the Authority.

"Effective July 1,1975, cost-of-living supplements, based upon the quarterly increase in the consumer price index, were paid to

[ Page 1392 ]

eligible pensioners. These supplements are to be financed by additional employee and Authority contributions at the rate of 0.5 per cent of contributory earnings when the accumulated supplemental payments exceed I per cent of the member's total earnings for a continuous 12-month period. A further 0.5 per cent in the rate of contribution will take place when, in any continuous 12-month period, the total of supplements paid in that period exceeds I per cent of the total members contributory earnings. The changes in the plan and increases in rates of pay since December 31,1974, will result in an additional deficit, the amount of which will be determined by a future actuarial evaluation."

That's the end of that quote. What I want to know is the amount of that additional deficit which is foreshadowed by Price Waterhouse, and which will be determined by a future actuarial evaluation. The minister, I think, if he's talking about this amount of money, is going to have to give the people borrowing the money something a little bit more concrete than the words "a future actuarial evaluation."

Now if I may return for a moment to the Revelstoke Dam question, and once again pay tribute to the extraordinarily eloquent testimony of the hon. member for Revelstoke-Slocan (Mr. King) on this subject in the House. I know that the member attended those hearings and testified himself.

I was much struck by a copy of a statement that was sent to me by Dr. Ernst R. Berndt, who, I believe, is at the University of British Columbia.

MR. W.S. KING (Revelstoke-Slocan): Michigan.

MR. GIBSON: Michigan, is it? I see. The note here says "Economics, UBC." In any event, he dealt at some length on behalf of the B.C. Wildlife Federation with this question of rates of growth. That's the one? I want to take the opportunity to acquaint hon. members of the House with this analysis, because it is a good one and one that does not seem to have been adequately taken into account by the Comptroller of Water Rights who, to no one's surprise, did exactly what the government and B.C. Hydro want. This is the statement of Dr. Berndt:

"I have been asked by the B.C. Wildlife Federation to prepare and present a statement at these hearings, evaluating the reliability and credibility of the electricity demand forecasts published by the B.C. Energy Commission and the B.C. Hydro and Power Authority, and to comment on the extent to which these forecasts justify immediate commencement of construction of the Revelstoke Dam."

And, of course, parenthetically, Mr. Speaker, that was the question at issue: the immediate commencement or not, what time was available for the acquisition of further information? B.C. Hydro, with its manipulative tactics was saying, "There's no more time." They were saying, as a matter of fact, "We've got to get going even before these hearings are concluded." And they had let a contract or, at least, certainly called tenders.

Carrying on with Dr. Berndt's statement:

"I should like to emphasize at the outset that the statements in this submission are my own and that they do not reflect the opinions or judgments of any institutions or individuals with whom I am, or have been, associated.

"A salient feature of the two forecasts is the discrepancy. The B.C. Energy Commission forecasts a growth rate of electricity demand considerably lower than that projected by B.C. Hydro. This divergence of forecasts does not surprise me. Rather, it is to be expected. Indeed, the experience of a publicly or privately owned utility projecting higher growth rates than those of an independent analyst or energy regulatory commission is not unique to British Columbia, but is presently occurring throughout North America: California, Oregon, Massachusetts and Ontario, to name but a few examples."

Again, parenthetically, Mr. Speaker, later on, Dr. Berndt gives chapter and verse on exactly how those estimates differ in some of those jurisdictions, and I will be citing those as well.

Continuing with his statement:

"The reason I would expect a divergence of forecasts is the following: in any non-regulated and highly competitive industry I would give considerable weight to the industry's own forecasts of future demand, since the industry is risking its own capital on the accuracy of its predictions. However, this is clearly not the case in an industry such as electrical power, where, for example, in British Columbia, B.C. Hydro has a virtual monopoly and faces very little competition. If B.C. Hydro were to err, by overestimating demand, and thus were to find itself having built too much capacity, it would not face the consequences of intense competition from other firms which would reduce the return on its capital investment. Rather, Hydro would suffer very little penalty on its excess capacity investment. It could simply unilaterally increase rates to cover the costs of the mistaken investment and not face price competition.

"Indeed it is my understanding that in British Columbia under the B.C. Hydro and Power Authority Act, it would not even be necessary for B.C. Hydro to hold public hearings justifying its higher rates."

[ Page 1393 ]

How sadly true that is, Mr. Speaker, as we saw, and as we are seeing this month when our bills are starting to go up. No need to justify it. Dr. Berndt is absolutely right. Continuing with his statement:

"Like any other competitive industry, Hydro might forgo net revenues should it underplan for future demand. However, in contrast to a highly competitive and non-regulated industry, a monopoly utility like B.C. Hydro undertakes very little risk when it overestimates demand. Since there's little incentive for B.C. Hydro to project accurately and virtually no penalty for overestimation, I believe the discriminating resident of British Columbia ought to be wary of taking B.C. Hydro's projections at face value."

- That's putting it mildly.

"The above comments ought not to be startling. Indeed, in his written submission to these hearings, Mr. J.A. Poulson of B.C. Hydro has candidly acknowledged 'an intention to bias the planning forecast somewhat high." See page 1, of his testimony.

"In its submission, however, Hydro has argued that its past forecasts have been reasonably accurate, and that their forecasting experience has involved a substantial amount of underestimation. In defence of this position, Mr. Poulson produced a table - Table I in Mr. Poulson's submission. I have closely examined that Table 1, and find little evidence supporting the Hydro accurate or underestimation hypothesis. Indeed, there's considerable support for a rather different conclusion.

"In particular, one can examine whether Hydro's forecasts are getting better or worse over time, and determine whether there is a trend in the direction of their forecast errors. If such a trend is present, then one can use this information in evaluating the reliability of the most recent Hydro forecast.

"Based on the information in Mr. Poulson's written testimony, I have examined the time trend of average forecast errors. The results are summarized in Table A. There it is seen that, on average, B.C. Hydro's forecasts have not been conservative and that the per cent over estimation has been increasing in recent years."

Interjection.

MR. GIBSON: Gentlemen.... I'm speaking to the Social Credit back bench through your government, which arranged the courtesy of this evening. I'm directing all of my intention at you. Now you've disturbed me. I may have to reread one or two of these lines.

AN HON. MEMBER: Please do!

MR. GIBSON: Yes. You will recall that Dr. Berndt was talking about the possibility of there being a trend to deliberate overestimation on the part of B.C. Hydro. So picking up there:

"If such a trend is present, then one can use this information in evaluating the reliability of the most recent Hydro forecasts. Based on the information and Mr. Poulson's written testimony, 1 have examined the time trend of average forecast errors. The results are summarized in Table A. There it is seen that on an average B.C. Hydro's forecasts have not been conservative and that the per cent overestimation has been increasing in recent years. The forecasts made in 1965 and 1966 did indeed on average underestimate future demands while the 1967 forecast was, on average, remarkably accurate."

At this point, Mr. Speaker, there is a footnote saying: "The average absolute value of the estimation errors in the 1967 forecast is, however, 4.3 per cent using actual '76 data or 4.1 per cent using adjusted '76 data." It's pretty close, though.

"Ever since 1968, however, the average error has been positive. The average areas of subsequent forecasts have increased with time. These time trends tend to persist even if one adjusts the 1976 data as Hydro has done. This is shown in the last column of Table A. Hence, contrary to the contentions of B.C. Hydro, 1 do not find Hydro's track record in forecasting to be particularly good and erring on the low side. Rather than being spot on or conservative, the overestimation in B.C. Hydro forecasts appears to be large and increasing with time. The trend is, 1 believe, cause for concern.

"Another method of examining the B.C. Hydro forecast is to compare it with projections recently made by other utilities, regulatory commissions and researchers in Canada and the United States. If, for example, it were found that Hydro's forecast is much higher than most or that the Hydro forecast is one of the highest in North America, then Hydro should be prepared to explain, elaborate and present evidence providing persuasive reasons for such an atypical forecast. On the other hand, if Hydro's projections were found to be in the same order of magnitude as those forecast by most other analysts and the B.C. Energy Commission's forecast were one of the lowest, then it would be the responsibility of the B.C. Energy Commission to justify its extremely low projections."

You'll recall, Mr. Speaker, that the object of this exercise is to try and bring these two projections into

[ Page 1394 ]

harmony. The Minister of Energy, Transport and Communications, for all his figure finagling in that press release he put out, still had them 1.9 per cent apart.

Continuing with the statement of Dr. Berndt:

"I have attempted in recent weeks to obtain publications of alternative forecasts for electricity loan demand made by British Columbia, for other Canadian provinces and for various states in the U.S. While I have not been able in the limited amount of time to obtain an exhaustive set of forecasts, I believe my survey provides a reasonably indicative comparison forecast. The results of the survey, together with full documentation of sources, are presented in Table B."

AN HON. MEMBER: You could have just tabled it, Gordon.

MR. GIBSON: I think it's important that the people of the province, Mr. Member, should have access to a good deal of this data.

AN HON. MEMBER: They don't read Hansard, though.

MR. GIBSON: Oh! Mr. Member, through you, Mr. Speaker, it would surprise you how many people read Hansard. I'm overjoyed every time they read your speeches.

If we look at the average annual percentage area in forecast electricity demands, 1968-76.... Let's look at the forecast made in a particular year - let's say 1965 - and compare that with the result using actual 1976 data. There's another column here with Hydro-adjusted data but I like the actual data better. In 1965 it was 12.79 per cent under; '66 was 7.44 per cent under; '67 was about bang on - plus .07.

Then the discrepancy started to grow and Hydro started overestimating. In '68 they overestimated by 1.9 per cent; in '69, 2.34 per cent; in '70, 5.58 per cent; in '71, 6.8 per cent; in '72, 11.1 per cent; in '73, 12.7 per cent. Up and up go the overestimation errors of B.C. Hydro as you look at them over time.

Then there's an interesting comparison of recent forecasts for electricity load demand growth. First of all, a B.C. Hydro forecast for 1973 to 1990 projected annual average rate growth - 8.6 per cent. A study by the B.C. Energy Commission, 1976 to 1991 - 5.1 to 5.4 per cent. That figure has since been adjusted upwards somewhat, Mr. Speaker, and the Hydro figure has been adjusted somewhat downwards, but these were the figures that Dr. Berndt had to deal with at the time.

A John Wilson study, which was titled "Electric Utility Rates in Future Power Demand Trends in British Columbia, " prepared for B.C. Hydro by John

Wilson in 1974, gave a projection of 6.5 per cent. Prepared for Hydro but well below their figures. An Energy, Mines and Resources study, titled "EMR Energy Demand Model Documentation: Department of Energy, Mines and Resources, Energy Policy Analysis Division; Ottawa (March, 1976) came up with an even lower figure - 4.7 per cent.

A funny thing now, isn't it, that B.C. Hydro should be so much above the forecast of everybody else.

AN HON. MEMBER: 1 wonder why.

MR. GIBSON: Now B.C. Hydro has a little bit of company in terms of the forecast for Alberta for 1976 to 1990 of the Electric Utility Planning Council - 8.3 per cent. Alberta, however, is growing rather more quickly than British Columbia these days, and they have costs of energy and sources of generation which are quite unique to them.

Suppose we go to Ontario. The source here, footnote 6, is figures drawn from "A New Public Policy Direction for Ontario Hydro." Mr. Minister, that is the final report of the select committee of the legislative committee investigating Ontario Hydro, which is an interesting idea, isn't it? Their figures find the Ministry of Energy forecast at 7.2 per cent. It ranges down from there through a number of individuals. Ontario Hydro thinks only 6.6 per cent. The lowest figure is the Sierra Club - 5.5 per cent. The average Ontario forecasts are very considerably below B.C. Hydro.

Interjection.

MR. GIBSON: Yes, that's right. Those figures are from the Sierra Club. I don't suppose you're surprised at that any more than you're surprised at the fact that the highest figure is B.C. Hydro's.

Did you notice where those figures are drawn from? The select committee of the Legislature investigating Ontario Hydro. A good idea! Shouldn't we have a select committee of the Legislature investigating British Columbia Hydro? We most certainly should, and it should be appointed and complete its work before this bill is passed, before every man, woman and child in this province is saddled with an additional $270 worth of debt because of the unplanned, uninvestigated, uncontrolled expenditures of this corporation.

HON. MR. WOLFE: You're going to vote against it, are you?

MR. GIBSON: You have divined my intention correctly. I'm going to vote against this bill; I'm going to vote against one more cent for British Columbia Hydro until it is brought under control. I shouldn't

[ Page 1395 ]

have said it is unplanned - it is very carefully planned. But I don't know that all the necessary facts are known to the public.

HON. MR. WOLFE: You're all through then, are you?

MR. GIBSON: Sit down, Mr. Minister! Sit down! Come back tomorrow.

DEPUTY SPEAKER: Order, please, hon. members.

MR. GIBSON: So isn't that a shame that we have to take a lesson from the Ontario Legislature which saw fit to appoint a committee to investigate Ontario Hydro?

MR. WALLACE: It's a Tory government, Gordon.

MR. LAUK: Let's appoint Inspector Clouseau.

MR. GIBSON: Inspector Clouseau is already in the cabinet. We should have that before this bill passes.

Dr. Berndt also cites some figures for the United States as a whole. These are drawn from the 1976 National Energy Outlook.

HON. MR. WOLFE: Which project do you want to stop?

MR. GIBSON: Mr. Minister, I'm still in the middle of my speech. If you'll give me some time, I'll come to these thoughts.

MR. WALLACE: Phillips is worried about his record; he's looking very worried about you. (Laughter.) You've got about 12 hours to go!

HON. MR. WOLFE: We're going to play this back for you later.

MR. GIBSON: These figures for the United States nationally, I should say, are drawn from a document titled "The 1976 National Energy Outlook" by the Federal Energy Administration (February, 1976) . The Oakridge National Laboratory 1973 forecast figure, 1974 to 1985, was 4.4 per cent. The Arthur D. Little 1974 was 6.4 per cent. Other estimates range from 5.6, 5.5, 6.0, 5.1, 5.0, 5.8, 5.4, 6.3 per cent. Not one of these figures is anywhere near the figures of B.C. Hydro. The growth of the province of British Columbia is now down, in terms of population, to the same order of magnitude as these other jurisdictions.

HON. MR. WOLFE: I notice they're all different too.

MR. GIBSON: Of course they're all different, and they're all lower, which might certainly suggest to you, Mr. Minister, that if there's a certain clustering around a lower value from a multiplicity of different approaches, there might be some wisdom in that lower figure. Perhaps you might look a little more closely at that B.C. Hydro figure of 8.6 per cent or 8.2 per cent, whichever one you choose to take, and say: "Maybe we don't really have to commit our money in this province quite so fast. Maybe we don't have to commit to flooding those valleys quite so fast as Hydro is trying to push us into doing."

Interjections.

MR. GIBSON: Which percentage couldn't I figure out ?

DEPUTY SPEAKER: Address the Chair, please.

Interjections.

MR. GIBSON: What should the figures be? I think they should be somewhere around 7 per cent - 6.5 or 7 per cent, in my opinion.

AN HON. MEMBER: Why?

MR. GIBSON: Because I trust the B.C. Energy Commission more than B.C. Hydro.

DEPUTY SPEAKER: Hon. members, may I ask your indulgence for another 18 minutes?

MR. GIBSON: Thank you, Mr. Speaker.

MR. WALLACE: How long, oh Lord - how long?

[Mr. Speaker in the chair.]

MR. GIBSON: Dr. Berndt takes those numbers and makes a little bit of them. He says:

"I begin with a comparison of forecasts for British Columbia. I am aware of only four f o recasts of British Columbia electricity demand growth. All of us are, of course, fully conscious of the 8.6 per cent B.C. Hydro forecast and the considerably lower 5.1 per cent to 5.4 per cent forecast published by the B.C. Energy Commission earlier this year."

MR. Member, 1, of course, am not reading my speech. I am reading somebody else's speech.

In 1974 the B.C. Hydro and Power Authority task force and future generation and transmission requirements commissioned Dr. John W. Wilson of Columbia, Maryland, to do a study on demand forecast and rate design in British Columbia. His conclusion on forecasting appears on page 86.

[ Page 1396 ]

"Whether future demand growth approaches the rates of increase that have prevailed during the past decade hinges largely on three principal factors: price changes, population growth, and increases in income. Given the best current population forecasts, if after substantial rate increases in the 1974-76 period further electricity utility rate increases can be held below the overall rate of inflation and real income can be expected to increase as it has in the past, it is reasonable to anticipate an overall average annual demand growth rate of approximately 6.5 per cent between 1973 and 1990."

Thus, as Dr. Berndt Points out, the Wilson forecast falls in between the projections of the Energy Commission and B.C. Hydro. Perhaps that's a good figure to take, returning to the member on the other side who asked which figure would be best. Maybe this is the golden mean; maybe this figure of 6.5 per cent is a good one. I would certainly, as I said before, trust it more than I trust the Hydro figure.

AN HON. MEMBER: How did they do it in Hydro? Did they draw lots?

Interjections.

MR. GIBSON: Dr. Berndt is a gentleman who was engaged by the B.C. Wildlife Federation to present some of the figures to this hearing. It would have been a very good thing of B.C. Hydro presented them. I think Dr. Berndt did a good job in his presentation and I wish that more attention had been paid to it.

Now, carrying on with his statement:

"A fourth forecast for B.C. has recently been published by the Department of Energy, Mines and Resources in Ottawa. This forecast for B.C. was but one component of the EMR projections for all of Canada, as published by them in 'An Energy Strategy for Canada, Policies for Self-Reliance.' The B.C. projection has been published on page 128 of a technical document, EMR. Energy Demand Model Documentation. By calling it a demand model I imagine it was one of those computer simulations."

AN HON. MEMBER: Gordon, what's your source again on that?

MR. GIBSON: The source on this particular paper, Mr. Member, is a submission by Dr. Ernest R. Berndt.

"EMR forecasts electricity demand to grow at a rate of 4.7 per cent, slower than that projected by the B.C. Energy Commission, Dr. John Wilson and B.C. Hydro. Hence, of the four B.C. forecasts, Hydro reports the largest anticipated growth while the Department of Energy, Mines and Resources projects the lowest growth rate. The Energy Commission and Wilson's forecasts fall in between.

AN HON. MEMBER: Is that all in fine print?

MR. GIBSON: No, that's not the fine print, that's the large print, and that's the large print that the Comptroller of Water Rights seemed to overlook, as he overlooked so many of the fine presentations that came before that Revelstoke-Slocan hearing and made a premature decision that, I hope to God, some day the people of British Columbia aren't going to regret. It was a little premature.

Mr. Speaker, I don't want to miss any important points before I I o'clock because I don't want to take too much time tomorrow. I want to just quickly review some of the. . . .

HON. MR. WOLFE: How about the rise and fall of the Roman empire?

MR. GIBSON: No, no, there'd be no need to go back to the rise and fall of the Roman empire, but I will go back momentarily to the Columbia River Treaty.

HON. MR. WOLFE: Which article?

MR. GIBSON: Which article of the treaty? The one that particularly referred to downstream benefits and flood-control benefits. I'm just trying to remember, Mr. Member, which article that was. It was around 5 or 6, wasn't it? In any event, that's where the tragic error was made,

Interjections.

MR. GIBSON: That's right. The gentleman who is now the hon. Minister of Education (Hon. Mr. McGeer) used to have a good deal to say about that. I wish I had one of his old speeches here - I could simply put it into the record. Instead I'll just have to pay some attention to this prospectus and read from it at page 31, where again we're looking now, Mr. Speaker, at notes to the financial statements:

"The cost of plant financed by contributions arising from the Columbia River Treaty and by contributions in aid of construction, which include grants for rural electrification from the government of the province of British Columbia and amounts paid by customers towards construction of plant, is included in the property account. Contributions arising from the Columbia River Treaty are being amortized over the remaining term of the treaty and the

[ Page 1397 ]

credit resulting therefrom is offset against, and is equal to, the annual provision for amortization and for depreciation of the related assets. Contributions in aid of construction are being amortized over the estimated service lives of the related assets and the credit resulting therefrom is offset against the applicable provision for depreciation."

The important thing in this Columbia River business is the lessons that we can gain out of it for the future and the incredible change in the cost of energy over time. The hon. member for Columbia River (Hon. Mr. Chabot) , who's very naturally familiar with the Columbia River Treaty, would perhaps recall to some of his colleagues the fact that the Premier of our province back in 1963 (Hon. W.A.C. Bennett) insisted on selling the downstream power benefits of that Columbia River Treaty for 30 years in advance. He had an option....

MR. KING: Without any inflation factor.

MR. GIBSON: Without any inflation factor. Exactly, Mr. Member. He had an option. He had several options. There was a provision to take that power back at the boundary of the province every year - take that power back in the busbar of the province and have it for distribution in the province of British Columbia. Then you automatically would have benefited from the increase in the value of energy as the years went by.

MR. KING: That was a shrewd business.

MR. GIBSON: That was a shrewd business, as you say. How much did we lose on that, Mr. Member? What would be your estimate? How many hundred million?

Interjection.

MR. GIBSON: I don't know. It depends what rate of interest you put on it.

He had another option. He could have negotiated the price on that return power year after year. What did he do? He sold it 30 years in advance. Why did he sell it 30 years in advance? Because he wanted to make the big deal, because he wanted to make the big move, be the money man. What was it - $279 million? Do I recall rightly? How much more would it have been had we retained those benefits over the years? That's exactly what Social Credit power policy is all about.

MR. LAUK: He said: "Nothing is freer than free, my friend." That's what he said.

MR. GIBSON: He did, indeed., say: "Nothing is freer than free."

Interjections.

MR. GIBSON: If we want to talk about historic Columbia River deals, Mr. Speaker, how about the Kaiser deal in 1954? He tried to sell the Columbia River for $1 million. Do you remember that one?

Interjections.

MR. GIBSON: How about the Wenner-Gren proposal? You were here, then, Mr. Member. You can't stand up and defend that - you know that.

Now this is Social Credit resource management policy, but back to the Columbia River.

Interjections.

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

Interjections.

MR. GIBSON: There's the old master speaking!

Mr. Speaker, getting back to the Columbia River Treaty, we still have this sword of Damocles hanging over the valley under the provisions of that treaty. Mr. Member, I don't remember the article of this provision either, but one of the articles provides that there is a possibility of diverting water out of the Kootenay-Columbia diversion project which would divert some water....

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources): Article 13.

MR. GIBSON: Article 13 - thank you, Mr. Member. Let me give you a little statement of background because I think the scene should be set. This is an official B.C. Hydro and Power Authority press release dated July 1,1976.

"Under the Columbia River Treaty ratified in 1964, Canada has the right after the expiration of 20 years from the ratification date to divert not more than 1.5 million acre-feet of water a year from the Kootenay River in the vicinity of Canal Flats, British Columbia, to the headwaters of the Columbia River, provided that the diversion does not reduce the flow of the Kootenay River immediately downstream from the points of diversion below the lesser of 200 feet per cubic second or the natural flow."

Incidentally, there's an asterisk there, Mr. Speaker. In 2024....

MR. SPEAKER: Hon. members, it would be

[ Page 1398 ]

beneficial if you would keep the roar low enough so that the hon. member for North Vancouver-Capilano could be heard.

MR. GIBSON: Thank you, Mr. Speaker.

"In the year 2024, the Columbia River Treaty allows a further diversion of all but 2,500 cubic feet per second of the Kootenay flow at the U.S. border - much more than is being considered in the Canal Flats project."

That, of course, is the additional diversion that was mentioned by Mr. Ede in his very eloquent article.

But this is not until nearly 50 years hence, as the press release points out. That project is not in B.C. Hydro's programme, and its development will probably be decided by our grandchildren if they want it or need it, says the press release.

What does this mean?

"This water destined for the Libby Dam could give British Columbians extra power to the amount of 820 million kilowatt-hours. But to divert 1,500, 000 acre-feet of water annually is equivalent to diverting 2,070 cubic feet per second on a continuous basis. At some times of the year, such as late fall and winter, this amount is not available in the Kootenay diversion.

"This means that to divert the full amount of water permitted under the treaty, diversion flows of up to 6,000 cubic feet per second would have to be made at other times of the year when both rivers are already at high level." Now I'd like to underline this::

"Significant environmental problems could be caused by higher water levels on the Columbia between Canal Flats and Golden, and by lower levels downstream on the Kootenay. Depending on the amount of water diverted, diversion could be expected to flood wetlands between Columbia Lake and Golden, which are used by waterfowl as nesting grounds.

"The village of Athalmer, summer cottages, sawmills, and portions of the CP tracks beside the Columbia might have to be relocated to escape flooding.

"Water pollution problems in the Kootenay downstream from Canal Flats to below the U.S. border could be aggravated by the reduced flow, since the Skookumchuck pulp mill and Cominco mining operations at Kimberley both discharge waste to the river."

There is quite an admission in B.C. Hydro's own press release of the kind of environmental problems that can be brought about by this particular diversion.

This is B.C. Hydro talking about the environmental problems - nobody else. The press release continues.

HON. MR. CHABOT: What press release was that?

MR. GIBSON: B.C. Hydro. Do you trust them, Mr. Minister? I've been quoting quite a few of their documents this evening.

Interjection.

MR. GIBSON: Well, you're just going to have to wait for the rest of the press release. They bring quite a number of these things out.

"A task force, commissioned in 1974 by B.C. Hydro to prepare alternative programmes for meeting demands for electricity, recognized the attractiveness of the extra power to be gained from the Kootenay diversion project.

"While the task force recommended the project for 1984 in-service days permitted by the Treaty, it was recognized that there were environmental unknowns associated with the diversion. Accordingly, B.C. Hydro initiated environmental, social and technical studies in early 1975 to assess potential impacts and to provide data to facilitate a future decision on the feasibility of the project."

Then, Mr. Speaker, they go into a general description of the project and, insofar as I am concerned, all that can be said with certainty is that they have not been able to convince the people of the area of anything except that they do not want their land flooded. Yet we still see these statements of B.C. Hydro, like in-service date of 1974 for the Kootenay-Columbia diversion project.

AN HON. MEMBER: Now he wants the rest of the time.

MR. GIBSON: He wants the rest of the time tonight.

HON. MR. WOLFE: Tell him he can leave the room. It's quite safe tonight.

MR. GIBSON: In my mind, it's just improper that the minister should be asking for anything like this sum of money without giving us some assurance in this House as to what's going to happen on the Kootenay-Columbia diversion project. I am glad to see the Premier is back in the House because he said up in Cranbrook that it was his personal opinion that the diversion should not go through.

AN HON. MEMBER: That's not what he said down here!

MR. GIBSON: No, he came back down here and the Hydro boys got at him and Bob Bonner got at him and they said: "You watch out, Mr. Premier,

[ Page 1399 ]

don't you talk about the Kootenay-Columbia diversion like that. That's our baby."

MR. KING: Mr. Speaker, I would draw your attention to the clock.

MR. SPEAKER: I think I recognized the hon. member for New Westminster (Mr. Cocke) , initially on a point of order.

MR. COCKE: Mr. Speaker, the point of order is that, having the Speaker's attention drawn to the clock, the only acceptable motion from the House Leader would be a time adjournment and that's it. Mr. Speaker, the member for North Vancouver-Capilano (Mr. Gibson) has the floor.

MR. SPEAKER: The hon. member for Revelstoke-Slocan (Mr. King) interrupted the member for North Vancouver-Capilano by drawing the

Speaker's attention to the clock. But routine motions can take place including the setting of the time for the next session and the adjournment of this debate. The hon. member for North Vancouver-Capilano does not lose his place because of a motion by the House Leader that the debate be adjourned until the next session of the House. I think if you would all recall a previous occasion, that matter was settled.

Hon. Mr. Gardom moves adjournment of the debate.

Motion approved.

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 11:03 p.m.