[ Page 2809 ]

CONTENTS

Routine proceedings

British Columbia Buildings Corporation Amendment Act, 1977 (Bill 66) . Hon. Mr.

Fraser.

Introduction and first reading –– 2809

Committee of Supply: Ministry of Energy, Transport and Communications estimates

On vote 102.

Mr. King –– 2809

Mr. Lea –– 2811

Mr. Lauk –– 2811

Hon. Mr. Davis –– 2814

Mr. Lea –– 2816

Mr. King –– 2817

Mr. Lauk –– 2819

Mr. Kerster –– 2822

Mr. King –– 2825

Mr. Barber –– 2826

Mr. Skelly –– 2828

Mrs. Dailly –– 2828

Hon. Mr. Davis –– 2829

Mr. Lauk –– 2830

Mr. King –– 2831

Hon. Mr. Davis –– 2832

Mr. King –– 2833

Mr. Barber –– 2834

The House met at 8 p.m.

Introduction of bills.

BRITISH COLUMBIA BUILDINGS

CORPORATION AMENDMENT ACT, 1977

Hon. Mr. Fraser presents a message from His Honour the Lieutenant-Governor: a bill intituled British Columbia Buildings Corporation Amendment Act, 1977.

Bill 66 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the day.

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

ESTIMATES: MINISTRY OF

ENERGY, TRANSPORT AND COMMUNICATIONS

(continued)

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

MR. W.S. KING (Revelstoke-Slocan): Mr. Chairman, I have a few questions here to ask the minister, so I wouldn't want anyone to get hasty.

Mr. Chairman, I posed a number of questions to the minister before the dinner hour adjournment and I wondered if the minister would care to respond to some of those questions now. I have further ones to add. He doesn't wish to respond.

The gist of those questions were: is the minister not concerned about the liability which may accrue to the government and B.C. Hydro should his cabinet colleagues on the appeal committee postpone construction of the Revelstoke Dam or, indeed, should they veto the conditional licence issued by the water comptroller? I think the government should know something about the liability that may extend to Crown corporations and government departments when contracts are cancelled and I certainly would not -want to see the people of British Columbia called upon to make very, very large settlements with agencies in the Revelstoke area should the dam be terminated. I wonder what contingency plans the government is considering with respect to this whole matter.

One of the other questions I wanted to ask the minister relates to water sales from the Columbia River basin to the United States last year, and recent public indications, which I suppose at this time are not much more than speculation, that perhaps a further water sale is pending to the United States from the Columbia River system. I'm concerned about this practice, Mr. Chairman, because Canada has traditionally avoided becoming locked into any system of water sales to the United States.

As many of us know, it's been a political thrust within the United States over the past number of years to try to develop a continental resource policy. That resource policy envisages the sharing of resources, be they power resources, water and presumably a variety of other types of resources, minerals and so on, on a shared continental basis. This is something that Canada, of course - at least those politicians within Canada who have some concern for the sovereignty and the protection of our resources in this nation over a long-term basis - has resisted very strenuously. I'm concerned when B.C. Hydro and Power Authority starts developing the thin edge of the wedge by selling blocks of water to the United States. I think that this could develop a very, very dangerous precedent and give encouragement to the continental resource-sharing policy which I certainly believe should be resisted.

There's another matter that relates to the sale of the water and which is of a more local interest in the riding which I represent. I believe the cabinet knows something about that concern. They were recently presented with a brief by the village of Nakusp outlining a variety of concerns that that area has with the low water in the reservoir in the Nakusp area, particularly if we can afford to export water to the United States in large block sales, then the wisdom of doing that should be weighed against the need to maintain reservoir levels in the Nakusp area to such an extent and elevation that the whole recreational value of that reservoir is not destroyed.

But unfortunately that is precisely the position in which the village of Nakusp now finds itself. Boat-launching ramps are high and dry half-a-mile from the reservoir because of the low elevation. Beaches are unusable because they are simply the areas where vast dust storms are developed along the reservoir now. There is no water action to make the beaches worthwhile places of recreation, swimming and so on.

I think the minister is aware of this. As I say, a very detailed presentation was made to cabinet a week or so ago from the mayor of the municipality of Nakusp, as well as representatives of local surrounding municipalities. At that time it was reported in the paper, at least, that a very sympathetic hearing was granted by the cabinet members who were in attendance. I would like to see that sympathy translated into some positive action.

I would like to see the minister give a commitment to this Legislature, which is certainly more meaningful than a general public one - that the

[ Page 2810 ]

elevations of the reservoirs are going to be maintained at the levels that were promised by B.C. Hydro, so that recreational use can be made of the reservoirs on the perimeter of Nakusp, of Revelstoke and those communities south of Nakusp. I certainly think it is in violation of the spirit of commitments made by Hydro to sell water and to draw down the reservoirs when these areas have been promised recreational reservoirs at a stable level.

So, Mr. Chairman, I think I will ask the minister to respond to these questions. As I have indicated, I have some more, but I don't want to bog down the minister with too many questions so that he might forget some of them. I would rather he responded now, and I have a few more to ask him.

MR. CHAIRMAN: Shall section I pass?

MR. KING: No, Mr. Chairman. I'll continue then, and if the minister is not prepared to answer at this point, why, I want to assure him that I am certainly as patient as he is. I have quite a large volume of material to deal with so I can very well afford to be patient.

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources): What's your position today?

MR. KING: Mr. Chairman, my position is always in defence of the people I represent. It's too bad the member for Columbia River (Hon. Mr. Chabot) had not taken a position with respect to the Mica Dam when his government, Mr. Chairman, flooded the entire area, submerging valuable farmland, chasing people out of their private property, desecrating the land. . . .

MR. CHAIRMAN: Order, please.

MR. KING: Not a peep from that minister, Mr. Chairman. At that time he was clamouring for a cabinet appointment.

Interjections.

MR. J.J. KEMPF (Omineca): He was riding the caboose.

MR. KING: No, my friend was always on the tail end; I worked on the head end.

MR. G.H. KERSTER (Coquitlam): You were never there for the hearings.

MR. KING: I can respond to that too, Mr. Member, but it wouldn't be parliamentary.

Mr. Chairman, there is another matter which I raised earlier with the minister, and that relates to one individual who lives just south of Revelstoke and who has had his land affected by the increased water table incident to the reservoir level in the springtime particularly at Revelstoke. That man is Mr. Max Koshman. It's not a big matter but it's a matter which should be dealt with in the interest of justice.

I indicated to the minister earlier that at the Revelstoke water licence hearing, a public commitment was given by a lawyer for B.C. Hydro, a Mrs. Barnett. That commitment is contained in the transcript of the Revelstoke water licence hearing records, so it is public and is available to the minister.

The commitment was that Hydro would do one of two things to satisfy the problem that this gentleman had with the flooding of his land - namely, either to purchase it from him with appropriate compensation or to consider filling the area where the water table has risen and rendered the land unusable for crop purposes. Now it's not a big thing - about an acre of land is all - but it's right in the centre location of his total parcel of land and really interferes with normal use of it.

I've been trying to achieve a settlement for this gentleman for over a year and a half now. I've talked about it in the House before; I've appealed to Hydro; I have received a public commitment from Hydro's counsel, and still no settlement; so I do think it's appropriate that the political head of that Crown agency intervene in this case and bring about a settlement of this man's valid complaint. I'd be quite prepared to provide the minister with a copy of my file of this whole matter. I'd be quite prepared to discuss it privately with the minister, but this is a matter that's most annoying. It's a matter that gives British Columbia Hydro and Power Authority a very, very bad name and a poor image in this province. I don't think it does all that much for the image of the government either, quite frankly, Mr. Chairman. So I would hope the minister would be prepared to do something about that specific complaint.

It's issues like that that certainly contribute to people becoming very emotionally upset when any new initiative by B.C. Hydro is planned in their particular area. They hear of how Hydro has refused to recognize disruption and damage to people in other areas of the province, where they have refused to accept their responsibility and bring about fair and equitable settlements with the people. Consequently, any new areas where Hydro initiatives are planned become the scene of very emotional demonstrations and representations. So I think, in everyone's interest, they should try to clean up their act.

The Nakusp brief that I referred to earlier, which was presented to cabinet, was quite an exhaustive one and outlined a whole variety of complaints. I would like the minister to give me some indication of precisely how the government proposes to respond to the complaints raised in the brief from the village of

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Nakusp. I'm not going to read the whole brief because it's quite lengthy, but it does cite chapter and verse of the complaints that are evident in that whole area - from Nakusp to Burton and Fauquier down to Edgewood - where B.C. Hydro, over the years, had made commitments to provide boat-launching facilities, to provide marinas, water systems, recreational beaches, and so on, and to maintain a stable water level in the reservoir. As I say, each community has listed the commitments that were made to them and the commitments which have been reneged upon by the B.C. Hydro and Power Authority.

The cabinet committee did indicate sympathy. They did indicate an interest in perhaps trying to recover some of the arable land that was flooded in the Arrow Lakes reservoir. I would like to hear from the minister on precisely what he is doing; whether or not he has instructed Hydro to reassess their position in that area; whether or not - either through cabinet or through his own initiative - some of these promises that have been reneged upon over the years are going to be fulfilled. I would certainly expect answers to these questions from the minister long before his estimates are allowed to pass in this chamber tonight, Mr. Chairman.

MR. G.R. LEA (Prince Rupert): Mr. Chairman, I would suppose that the minister is keeping track of all these questions so he can answer them at a later date.

AN HON. MEMBER: Yes. He has 10 pages already.

MR. LEA: This afternoon I asked a couple of questions. The minister said this afternoon that the federal government not only didn't let the residents of the coast know that they were going to cancel a subsidy amount of dollars to Northland Navigation, but they also didn't discuss it or have consultation with the provincial government. That's a new bit of evidence that we have for the people. I asked this question this afternoon, but I would like to know: who were the people who negotiated the agreement -the federal people and the provincial people? I would also like to know - and this is a question I didn't ask this afternoon - at whose request the agreement was begun to be negotiated. Was it the federal government that approached the provincial government and said, "look, let's negotiate a deal, " or was it the provincial government approaching the federal government?

I have one other question. The minister, I think, agreed with me this afternoon that the long-range method - or at least the desirable method - of transport on the coast would be self-propelled vessels, possibly one larger one or two smaller ones. I believe the minister agreed with me on that. If that's true, what sort of time frame are we looking at? When can the people of the coast expect that kind of service? I would point out that they are not people who are unreasonable. If the government does have a plan to put those kinds of self-propelled vessels into service, I think they will take into consideration the fact that they were hosed by the federal government and I think they would look upon the provincial government with a lot of favour if the provincial government would pick up that responsibility.

Another question: it seems also, Mr. Chairman, that the minister this afternoon agreed with me that the agreement is exactly what it says - freight means freight and subsidy means subsidy. If the minister does agree with me, then possibly he can explain to me what the Premier and the Hon. Ron Basford meant when they said it didn't mean that.

I'd like to have those questions answered and possibly there will be some more.

MR. G.V. LAUK (Vancouver Centre): I'm going to be five or ten minutes. Is the minister prepared to answer the questions of the member for Prince Rupert now?

HON. J. DAVIS (Minister of Energy, Transport and Communications): I'll accumulate a few.

AN HON. MEMBER: Carry on. You're just getting repetitious anyway.

MR. LAUK: Before the supper adjournment, Mr. Chairman, I was bringing to the committee's attention the fact that before the royal commission, Mr. Fraine, who is the chairman of the British Columbia Railway board, stated before that board that there were strings attached to the $81 million that was being contributed by the federal government toward the construction of the Dease Lake line extension. It was a flat contradiction to statements made by this minister and the Premier of the province on April 5 of this year. When answering questions of the press gallery, they stated there were no considerations for the $81 million.

Perhaps it would be helpful and fair to the minister, if he wishes to refer to the transcript of the testimony.... It was May 30, vol. 17, and I'm referring particularly to page 2251 of the evidence of Mr. J.N. Fraine, chairman of the BCR.

The question: "Now that sets out the position as you and your fellow members of the board understood it at the end of February of this year."

Then the situation changes somewhat.

Answer: "Yes. Early in March, 1977, the directors of BCR were informed that the federal government had changed its position, that the federal government would be agreeable to a termination of construction of the Dease

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Lake line and that substantial funds, amounting to as much as $81 million, might be available only if construction was terminated."

This changed federal position removed the only significant factors in favour of completing construction. On March 10 - and these dates are important, Mr. Chairman - the executive committee of the board met with the provincial cabinet and delivered a memorandum, as follows: "British Columbia Railway proposed abandonment of Dease Lake extension." It went on to recite the proposed abandonment.

On page 2253, continuing on the evidence of the chairman:

"On April 5,1977, the hon. W.R. Bennett announced in the provincial Legislature that on the recommendation of the board of directors of BCR, there would be a pause in the construction of the Dease Lake extension pending a report from this royal commission. Two agreements were tabled."

Mr. Chairman, the memorandum of the abandonment of the Dease Lake line was received on March 10 by the provincial cabinet, including the Premier and this minister. So by April 5, the Premier of this province knew that the $81 million from the federal government was in consideration of the abandonment of the Dease Lake line.

MR. KEMPF: The old garbage.

MR. LAUK: You know, the member for Omineca is very amusing. I've read out of the official transcript of the royal commission and I've stated the actual quotation of the Premier on April 5. Both are flatly contradictory. In the sworn testimony -uncontradicted - of Mr. Fraine, it states that the provincial cabinet knew of the abandonment of the Dease Lake line being a consideration, prior to April 5.

The member for Omineca, characteristically, says, "Garbage." He should join that well-known former member of this House, John Tisdalle, who, I think, was the local president of the Flat Earth Society.

MR. LEA: You should hear Omineca when he doesn't think it out!

MR. LAUK: The reason I'm raising these important issues before this committee is that it is not the terms of reference before the royal commission that concern me at the moment. It's the question of credibility. It's the question of honest answers for the public of this province.

AN HON. MEMBER: You're asking the wrong guys.

MR. LAUK: Indeed, Mr. Member, I'm asking the wrong guys, to use a colloquialism, because this government, and particularly its Premier, do not seem able to respond honestly to questions that the press, on behalf of the public, and the opposition, on behalf of the public, are asking.

On April 5,1977, the Premier, to put it very charitably, was not being candid with those newspaper and media reporters who asked the question. He stated quite clearly: "There are no considerations to Ottawa, in any way, with respect to the $81 million being paid over to the government of British Columbia for the construction to date of the Dease Lake extension."

The Premier and this Minister of Transport denied on April 5,1977, that their announcement was anything more than simply an abandonment of the Dease Lake extension. They preferred to call it "the pause." They were questioned at least half a dozen times - I was there - on what was meant by "a pause" and if it did not mean an abandonment. There was a denial - it was a pause.

The testimony of Mr. Fraine on March 10,1977, three weeks prior to the press conference on April 5, was that the provincial cabinet received the memorandum entitled "The proposed abandonment of the Dease Lake extension, " and recited the requirements of the federal government for the $81 million." Now if the minister wishes to stand up and say that both he and the Premier understood what the agreement was when they signed it with the federal government or that they didn't deliberately mislead the people at this press conference, that's fine, but the evidence is quite clear that until such a denial is made, the public were misled. It wasn't a pause.

Indeed I did, right after the Premier's press conference, state to the press - you talk about press coverage in this province, so let's deal with that for a moment - that this was nothing more or less than an abandonment of the Dease Lake construction. The Vancouver Sun printed the story and The Province completely ignored the opposition statement which has subsequently proven to be absolutely correct. That's the quality of reporting in this province ...

MR. LEA: Or editing.

MR. LAUK: .. . by that particular newspaper. That's the quality of reporting.

From time to time throughout my tenure in this House I would like to discuss a few more things about press coverage. That's one of the problems in this country of ours: it's the least competitive in terms of news coverage of anywhere in the free world. Can you imagine a major public announcement about a pause on construction and the opposition response not being printed by that newspaper - the second

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biggest daily in the city of Vancouver and the province of British Columbia? This was the newspaper that was part of the coverup on the MEL Paving case. This was the newspaper, together with Radler, one of the Social Credit friends, that tried to cover up the backroom settlements in the MEL Paving case.

Getting back to the role of this minister with respect to the northwest rail agreement, the minister has a lot to answer for. Again he stood up and he, I take it, inadvertently misled the committee again this afternoon when he stated. . . .

MR. CHAIRMAN: Order, please, hon. member. I've been listening very carefully to the style of debate of the hon. member and he seems to be trying to say indirectly what can't possibly be said directly. I must ask the hon. member to withdraw any imputation of wrongdoing.

MR. LAUK: I assume that the minister was inadvertent in his remarks this afternoon because he was mistaken.

MR. CHAIRMAN: The member will withdraw any imputation of wrongdoing.

MR. LAUK: There is no imputation that this minister was deliberately misleading this House. I say first of all that we were not misled and secondly. . .

MR. LEA: It was a good try.

MR. LAUK: ... that what he said, if it could have misled, was inadvertent, because I think that the minister probably doesn't understand the agreement. The agreement states clearly that in principle.... This principle has been recited from time to time in the agreements and memorandums of discussions between this province and the federal officials since 1971, in the famous Peel-Broadbent memorandum, for example. The 50-50 cost-sharing formula is a matter of principle. Well, so what? The minister knows full well that the agreement that required the abandonment of the Dease Lake construction states that any cost-sharing formula for any continuation of that construction is open to negotiation. He knows that; that's written in there.

MR. LEA: He may not know it. He probably just read it.

MR. LAUK: But I think he should re-read the agreement before he stands before the committee and makes a statement like that. He's got a responsibility as a minister to be accurate.

We have as best we can received information from federal and provincial officials that at this stage, if the royal commission recommended the continuation of the construction of the Dease Lake line.... We asked the question: how much more would it cost had they continued construction and not had this "pause"? The answer is: as high as $40 million. Now we have not got that army of economists at our elbow that the minister has, but I think the people of the province should know through this committee and know now what the figure is. Is it as high as $40 million? After that royal commission this fall or next spring - and I understand it accumulates - how much extra will it cost the people of this province because we "paused" in the construction? The people have a right to know because if it's as high as $40 million and climbing, then the decision made by this government is one of the most irresponsible imaginable.

Interjection.

MR. LAUK: Have we got a seatbelt for that gentleman's chair yet?

MR. KERSTER: You're not speaking loud enough at this point.

MR. LAUK: Mr. Chairman, one other question of the minister: I've received information that the B.C. Railway line between Fort St. John and Fort Nelson was washed out last week and has been closed down for at least....

MR. KEMPF: The opposition was washed out in 1975.

MR. LAUK: B.C.'s answer to half of the Sunshine Boys!

The B.C. Rail line between Fort St. John and Fort Nelson, which was washed out last week, has been closed down for at least six weeks. Originally it was stated by BCR that the washout could be forded in one week. We are told by people working on the line that the word has come down that the closure will continue until after the royal commission reports. Can the minister comment on this? Railway workers and people in the forest industry, who have been the hardest hit by the closure, state that the closure will continue until after the royal commission reports. Now that's an alarming proposition. Not only have you stopped construction of the Dease Lake, but you're using a washout on the Fort Nelson line as an excuse to keep it closed.

MR. C. BARBER (Victoria): It's their washout policy.

MR. LAUK: Now that is alarming, and that is political interference on the normal operations of a

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railway.

Now there's much more that should be said about the northwest rail agreement, Mr. Chairman, but perhaps the minister could comment on what already has been raised.

MR. LEA: What does Cyril think?

HON. MR. DAVIS: Mr. Chairman, I'd like to answer very briefly several of the questions that have been raised. The hon. member for Revelstoke (Mr. King) asked whether I was concerned about liabilities if the Revelstoke Dam project was cancelled. To that iffy question, I'd have to say yes.

He asks about water sales from the reservoirs on the Columbia River. There's no such thing as water sales. Water that would otherwise rush to the sea in the springtime is stored and released around the year in order to even out the flow of the river downstream. No, there haven't been any water sales. There haven't been any special deals and there hasn't been a special deal involving the additional 50 feet of elevation built on the Mica reservoir which can potentially store water over and above the amounts stipulated in the Columbia River Treaty.

He referred to the concern of those who live around the Arrow Lakes about low water levels, particularly in this year when we've had a very low winter season of precipitation. There is real concern, and certainly the recreational needs of the area's residents should be protected prior to any arrangements to help the United States deal with water shortages seasonally around the year.

The hon. member for Prince Rupert (Mr. Lea) asked who negotiated the ferry treaty - the ferry subsidy arrangements. I did - with some help, but I did. He asked who initiated the negotiations - we did. Certainly the federal government wasn't about to start paying a subsidy in British Columbia when it had just terminated subsidies finally in Ontario and other provinces in respect to ferries.

Interjection.

HON. MR. DAVIS: Well, primarily the minister, but he had several advisers who came and went and visited my office here.

The hon. member for Prince Rupert (Mr. Lea) asked what vessels would be involved in the ferry service up the coast - certainly the Queen of Prince Rupert, possibly the Queen of Surrey. Several other smaller vessels may be required. It would take 18 months or two years for them to be built if they were built in B.C. yards. In the meantime we'll have to make other arrangements to look after the communities, but certainly all alternatives are being explored, including the building in our own yards of vessels which are particularly suited to our requirements here on the coast.

The hon. member for Vancouver Centre (Mr. Lauk) asked several questions about the northwest rail agreement. As he knows very well, there is a master agreement concerning both rail lines and port development in the northwestern corner of the province. That master agreement still stands. It was negotiated by the previous government in 1973. It's still a fact of life; that agreement is still there. There is a commitment on both Canada's part and the province's part to see that various parts of that agreement are, at one point of time or another, fulfilled. The federal government has proceeded with the development of the Port of Prince Rupert, for example, and the province has proceeded to construct the Dease Lake line.

Now to answer several of his additional questions, I'd like to refer to the financial agreement - and this is a subsidiary agreement to the master agreement -which was signed this spring. On the face of it it's described in this way: "This financial agreement details the moneys owed to British Columbia by Canada for the Dease Lake line construction to date." That's the description of it.

As the hon. member knows, certainly during his government's period in office, construction continued with no payments from Canada. The reason why there was no payment made by Canada in respect to the Dease Lake line is that there was no particular financial agreement to provide for the exchange of moneys, to provide for federal money to be paid to British Columbia for the building of the line. British Columbia taxpayers paid but Ottawa paid nothing and didn't pay anything until this agreement I'm referring to was signed this spring

Clause B in the financial agreement, under the "whereas, " says: "Construction of the Dease Lake line" - I'm talking about this latest financial agreement - "was undertaken pursuant to the master July agreement, and it has now been mutually agreed between the province and Canada to suspend the construction of the Dease Lake line." It didn't say terminate; it didn't say wind up forever; it said suspend. It could have said "institute a pause in the construction of the Dease Lake line, " but the precise words are: " . . . mutually agreed between the province and Canada to suspend construction of the Dease Lake line."

Now later in the agreement we read: "Additional funding obligations by Canada" - and that's over and above the $84 million which has been referred to -"shall require another financial agreement in respect to the decision made jointly by Canada and the province to the resumption of further Dease Lake line construction." So in the agreement signed this spring there is reference to resumption of further Dease Lake line construction and another financial agreement.

[ Page 2815 ]

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

HON. MR. DAVIS: Well, you were saying it was over and gone forever; it was finished. It's in a condition of pause and resumption will take place when Canada and the province agrees that the economics of further expansion is there.

Finally, in respect to the moneys paid and the money still owing within the figure of $81 million "Canada shall pay to the province an amount equal to $54 million prior to the closing of the fiscal year 1976-1977.. . ." That $54 million was, in fact, paid early in April to the province, so we've now got $54 million, and that's $54 million more than the previous government had in respect to that agreement. " . . . and an additional payment not to exceed $27 million, subject to audit, to be paid before the closing of the fiscal year ending March 31,1978." In other words, the remainder of the $81 million, subject to audit, will be paid over during the current fiscal year. So in fact during the current fiscal year we will receive a total of $81 million.

The $81 million figure was actually arrived at in this way: the federal government had budgeted, last year and this year, for those amounts because it had been told by the province that this approximately was its liability in respect to the construction of the Dease Lake line. On closer examination it was found that the federal government's liability, to date, would not exceed $81 million. At least that was the advice given to us during negotiation. So substantially, $81 million will pay for the federal government's share under the master agreement signed by the previous government for all construction up to and including the construction undertaken to the date of termination this year. Incidentally, it will also cover - and there is a separate letter to this effect - any wind-up costs involved in the institution of the pause.

So, point 1: there is no termination. There is no suspension.

Interjection.

HON. MR. DAVIS: Well, we've initiated and concluded an agreement to have the government pay us right up to date; the federal government paid the previous NDP government of this province nothing. It has paid us right up to date on the Dease Lake extension and there will be another financial agreement necessary for the completion of the Dease Lake line. So I've quoted the actual words in the agreement and they are words very different than those used by the opposition during the debate.

MR. LAUK: Well, I think it's sort of the Philadelphia lawyer over there - it's incredible. But we've all read the financial agreement, Mr. Chairman; we know what it says.

It seems as if the government has a new seat.

MR. CHAIRMAN: Order, please, hon. members. Perhaps we could just pause until the Sergeant-at-Arms has cared for the interruption.

MR. LAUK: I will pause but not abandon my debate, Mr. Chairman.

[Interruption.]

MR. LAUK: Mr. Chairman, the hon. minister is referring to the financial agreement and we're familiar with its terms and its wording. That's not the point. The point is that in agreements between federal and provincial governments, as indeed between private parties, it's partly written and partly oral in most cases. It was clear that the financial agreement did not cover all the terms which were discussed between the parties, nor the obligations and responsibilities and agreements that arose out of the negotiations surrounding that particular financial agreement. That much was clear and that much is certainly admitted. The point is that at the time the public, through the press, wished to know whether this was an abandonment or a pause, No. 1; and No. 2, as important or more important, did the federal government consider this $81 million to be a payment only if construction on the Dease Lake extension were stopped? That's the issue.

Now let's give you the benefit of the doubt for the moment - that the abandonment is not a permanent one and that there is still a possibility of resumption of construction on the line. The question that was asked of the minister and the Premier at that press conference was: was that $81 million attached to the pause? And the answer was no, it was not a consideration. That statement must have been false. It must have been because we have the very words of the chairman of the board of the BCR saying that the federal government "would be agreeable to the termination of the construction of the Dease Lake line and that substantial funds amounting to $81 million might be available only if construction was terminated." Now those are the words of Mr. Fraine - "only if construction was terminated."

MR. BARBER: Who is telling the truth?

MR. LAUK: Who, indeed, is telling the truth? And the minister must have adopted the answer that the Premier gave. I watched him carefully, he made no move to stop the Premier and to say: "Mr. Premier, that's incorrect, " or, "You're mistaken and try to answer it correctly." You cannot say that they didn't know the truth, because Mr. Fraine goes on to say that "as early as March 10th, an executive committee meeting of the board of directors met with the

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provincial cabinet and delivered the memorandum, 'British Columbia Railway proposed abandonment of the Dease Lake extension'." Now, Mr. Chairman, that's the question that I want the minister to answer. The question is one of credibility.

Now briefly.... Is the minister still there? I see the Attorney-General's back. I wonder if the minister is still in his seat, Mr. Chairman. Oh, yes. Nice to see you.

The minister rose in his place, Mr. Chairman, and stated that there was no money from the federal government with respect to Dease Lake construction. Well, about two years ago we signed an agreement for $117 million. No, we never got it because we were defeated.

Interjection.

MR. LAUK: I wonder what key words there are that turn on the backbench.

AN HON. MEMBER: How about the Munchkins?

MR. LAUK: How about Bill Aberhart? Solon Low? A plus b? Oh, that used to get them. going in the old days, Mr. Chairman. That's the new breed now.

Well, Mr. Chairman, $117 million is a considerable loss. That's almost a $40 million loss that this government has taken. That was $117 million toward the Dease Lake construction,

There are other aspects of the northwest rail agreement which we can go into. We've got lots of time on this minister's estimates. It can be a long summer. We can get into those later - other aspects of the northwest rail agreement which are totally and completely unsatisfactory, a complete and total reversal of two successive administrations' vision of building the railway to the Yukon. They've abandoned that. They've given up running rights to the CNR to the Yukon. It's a travesty. It's a base ineptitude of the worst order.

MR. BARBER: Liberals making deals with Liberals.

MR. LAUK: But someone at that press conference wasn't telling the truth - or Mr. Fraine and his memoranda that were dated and received and all the rest of the documentation that support Mr. Fraine's position - maybe Mr. Fraine committed perjury; I don't know.

MR. LEA: Maybe Mr. Trudeau still doesn't like you.

MR. LAUK: Mr. Chairman, I repeat the question to the minister. I wish he could give me the answer.

What is the view of the Minister of Transport, and was he involved in the political interference that is being rumoured with respect to the closure of the Fort Nelson-Fort St. John line? There was a washout; they said it would take a week to ford and all of a sudden we have a six-week delay. The forest industry and people on the railroad are questioning that. They're speculating and they hear rumours that this is a closure until the report of the royal commission. Maybe that could be settled now because people up there are very worried, Mr. Chairman.

MR. CHAIRMAN: Order, please, hon. members. Order, please. We'll just wait until the Sergeant-at-Arms staff has cared for this.

[Interruption]

MR. CHAIRMAN: The committee will come to order.

MR. LEA: Mr. Chairman, one of the other curiosities about this new agreement between Canada and the province on the rail agreement is that the federal people involved with harbour development in Prince Rupert, and local people in Prince Rupert who are concerned with harbour development - it goes back for years - say that all the money that has been put into the harbour in Prince Rupert doesn't mean a thing now because the province has signed this new agreement with the federal government. What's the harbour for? What are the facilities for? They were put in there with good hard tax dollars to handle the rail infrastructure in the northwestern part of the province. Now what good are they?

But one of the curiosities which my colleague from Vancouver Centre (Mr. Lauk) has pointed out is that Mr. Fraine from BCR pointed out during the commission hearings that the federal government said it was agreeable to paying money to the province if there was an abandonment of the line. But whom was the federal government agreeing with? So they were agreeable. They were agreeable to abandon the line and to pay a certain amount of money to the provincial government. But whom was the federal government agreeable with? Who put the proposition to the federal government that they would accept a lesser amount of money if the fine was abandoned? Who put the proposition to the federal government that made them come back to the province and BCR and say that they were agreeable? Obviously, someone had to go to the federal government before they could come back and say they were agreeable.

I suggest, Mr. Chairman, that this minister and his government went to the federal government and said that they wanted a lesser amount of money than had previously been negotiated because they probably needed money in a hurry. What fiscal year did that

[ Page 2817 ]

original first payment go into? It will be very interesting to see the fourth-quarter report and to find out whether without that money we may have had a deficit budget in this province for last year. Maybe this government was in a deficit position and they had to have a few bucks from the federal government in order to save their skins. For those reasons they went to the federal government and said: "We want a pause. We don't want that to go ahead, because we need a few bucks right away. Never mind, the agreement that was negotiated with the previous government, because we need money, we need it fast, and we need it for a certain fiscal year."

Then the federal government, according to the testimony, came back and said: "Yes, we're agreeable" - we're agreeable to pay some money if the line is abandoned, a lesser amount that had been negotiated with the previous administration. Why else would the wording say that the federal government was agreeable? They didn't put it forward as a proposition. They didn't say: "Here's what we have in mind; are you agreeable?" They said: "We are agreeable." The federal government said they were agreeable to pay the province a certain amount of money, if it's abandoned.

AN HON. MEMBER: Vicious.

MR. LEA: It's not vicious, but it makes sense. Why would the federal government come back and say they are agreeable? Agreeable to what? There had to be a proposition to them in order for them to come back and say: "Yes, we are agreeable." I suggest, Mr. Chairman, that this provincial government, in dire need of money - instant cash - so they wouldn't end up with a deficit position, went to the federal government and said: "Look, we've got a deal for you. Give us a few bucks now for that fiscal year; we'll abandon the line; you get off the hook; you don't have to spend any money for a while and we don't have to spend any money for a while."

That's what it is all about, isn't it, Mr. Chairman?

MR. KERSTER: Who's your researcher?

MR. LEA: In other words, the federal government said yes to a proposition put to them by the provincial government to abandon the Dease Lake extension. What else? The wording couldn't suggest anything else but that they were coming back to the BCR in the province of British Columbia and saying, "Yes, we're agreeable to your proposition. We'll shut it down; we'll give you 81 million bucks; we save the difference between 117 and 81 and you can put that money into that fiscal year and save yourself political embarrassment."

MR. KERSTER: Could you give us a CBC station break now?

MR. LEA: Well, you'll never get a chance to do it. They don't only need voices there; they need articulate people. (Laughter.)

Interjection.

MR. LEA: Look, you gave a time check and it bounced. (Laughter.)

I have a question for the minister. On what date and in what form did the provincial government communicate with the federal government that they wished to abandon the Dease Lake extension? Will the minister answer that one? On what date and in what form did the request go from the provincial government to the federal government that they wanted some money and would abandon the Dease Lake extension for that money? That's the only interpretation that transcript lets you believe....

Don't smile, Mr. Minister. Get up and answer the question.

MR. KING: Mr. Chairman, I want to thank the minister for answering two of the questions I posed to him earlier, but that's not a very good average, because I asked about five questions. I would hope the minister would respond to each and every one of them.

Interjection.

MR. KING: I certainly did. I always was most expansive with the House. I gave out information freely - let the sun shine in.

Mr. Chairman, the minister indicated to me that he agreed that water should not be sold to the Americans while the reservoir is low in the downstream areas, consequently having an adverse impact on recreational opportunity. But I would like a precise answer from the minister in response to two questions: Does the minister oppose the sale of water to the Americans under any circumstances? And is it not true that water was sold to the Americans last year which had been impounded in the Mica reservoir? Was a large volume of water not sold to the Americans as a precise water sale? Certainly it was reported in the press. I would like the minister's response to that question. There are two questions there which I would much appreciate the minister answering.

The third one is: he never responded to my question on behalf of my poor constituent who has been suffering at the hands of B.C. Hydro these past three years, actually, and trying to obtain a settlement for damage to his property. I wonder if the minister will intervene on this man's behalf and request....

[ Page 2818 ]

Interjection.

MR. KING: I beg your pardon. Certainly I would under these circumstances. Oh, I have intervened on his behalf - certainly I have. I have been representing the man for the past year and a half in his representations to B.C. Hydro, but it falls on deaf ears. As the Premier and the Minister of Municipal Affairs have noted, this Crown agency has become a very monolithic monster beyond the political control of the government.

Interjection.

MR. KING: So he alleges. I would like to see the government take the responsibility which they do hold for the policy decisions of B.C. Hydro.

Mr. Koshman has lived in that area all his life and I see no reason why he should have to continue to live with a consequence of Hydro's arrogance which interferes with his ordinary use and enjoyment of his property. Public commitments were given. All that is needed is for the minister to insist that Hydro lives up to those public commitments.

Now I have some other news for the minister. I presume he has already had the news, but the Revelstoke Dam project is now shut down.

MR. KERSTER: You didn't have a thing to do with it! You weren't even at the hearings. Where were you?

MR. KING: Mr. Chairman, I wish somebody would put a seatbelt on that man's chair and equip it with a gag as well. Perhaps he'd be more secure and this place would be more peaceful, rather than that chirping little voice, filtering through a huge moustache, constantly interfering with members' presentations in the House.

MR. CHAIRMAN: Hon. member, I wish you would withdraw any improper motives attributed to people with large moustaches! (Laughter.)

MR. KING: Mr. Chairman, I've seen people cultivate more useful things in various regions. (Laughter.)

Mr. Chairman, I want to tell the minister that the Revelstoke Dam project is now on strike. The workers have struck that project and have left for home because of the unsanitary condition of bunkhouses in which they are expected to live. I've just talked with the shop steward for the Local 170 of the Pipefitters Union. He lives in the city of Winfield and, as a consequence, he has to rely on other MLAs to represent him rather than his local one. He reports to me, Mr. Chairman, that there are three bunkhouses in use on the Revelstoke project at the moment, each containing 40 men. The bunkhouses were first used by Gibralter Mines. They were then transferred to Mica Creek and were in use there for about seven years. Now they are on the Revelstoke project. All of the accumulated filth has gone with those bunkhouses. There has been no cleaning, no sanitary, inspection by the Health ministry, which has been requested by the union. The water supply on that project was completely absent today. There was no potable water; there was no water for washing, or flushes, or things of that nature. As a consequence, the workers walked off the job. I hope the minister gets in touch with B.C. Hydro and instructs them to make living conditions more acceptable to the work force in that area.

The Attorney-General (Hon. Mr. Gardom) seems to think it's a tremendous joke. I don't know. I suppose conditions are much better in Point Grey. I guess one can afford to smile. But these are real conditions, with real people, on a job that's in isolation from their homes. I think they deserve better treatment than that.

Mr. Chairman, I hope the press takes notice because apparently some erroneous reports have been circulated throughout the province on precisely what the cause of the walkout was on the Revelstoke Dam project. I wanted to report to the minister on the situation as it was given to me just a few minutes ago on the telephone.

The other matter I wanted to raise with the minister was a more concrete response that I had hoped to receive from him on precisely what will be done for the downstream area on the Columbia River and the Arrow Lakes. I see no justification for the tremendous fluctuation in the elevation of that reservoir, which is creating havoc both to the tourist industry and to the enjoyment of local people up and down the reservoir. There is absolutely no possibility of enjoying swimming and boating opportunities on the reservoir. Everything is left high and dry since the reservoir is down so low. Dust storms are now the order of the day, not only in Nakusp, but also at Revelstoke too. I'm advised, as I'm sure the cabinet committee was, that unless something concrete is done, something beyond statements of general sympathy from the cabinet, once again we are liable to see damage suits launched against the government and B.C. Hydro. We've got the interruption of contracts on the British Columbia Railway, and we may well see the interruption of contracts incident to the Revelstoke Dam, both bringing with them damage suits against the province and Crown agencies, and yet we have the spectre of further damage suits against the Crown from villages downstream who have lost their right to appreciation of recreational opportunities which were guaranteed to them by B.C. Hydro.

I suggest, Mr. Chairman, that by the time the

[ Page 2819 ]

tenure of this government is complete the treasury is going to be all but empty, because people in this province are seeking redress through the courts after meeting with stony silence, after failing to receive any redress from a government which has already become arrogant and insensitive in a very short period in office.

These are real problems that must be dealt with. They must be addressed by this government. It's not good enough to shirk the responsibility and point to Hydro and say that this monster is out of control. You are the politicians. You are the ones who sought and were granted power in the last election. I suggest to you that you should have the courage to exercise that authority which was vested in you on behalf of the people and quit hiding behind Crown corporations.

Interjection.

MR. KING: Well, there's Attila at it again - the philosophical giant of this House. Man, oh man! I wish he'd make a speech once in a while, Mr. Chairman, instead of sitting down there. He's catching something from the member for Coquitlam (Mr. Kerster) . It's a loose disease that he's catching, Mr. Chairman, and it seems to be of the oral nature. I hope the member will get up and participate in the debate and quit being a nuisance value.

MR. CHAIRMAN: Hon. member, perhaps we could get on to vote 102.

MR. KING: That's right, Mr. Chairman, I've been dealing with vote 102. This minister has the jurisdiction and the responsibility for B.C. Hydro; that's what I've been talking about, I ask him to respond in an intelligent and an expansive way so that his estimates may be speeded through this House.

MR. LAUK: Well, it seems clear that the hon. minister doesn't wish to answer questions either on the northwest rail agreement and the inconsistencies of his conduct on April 5 in relation to the evidence of the chairman of the board of the BCR, Mr. Fraine, before the royal commission on May 30. That's most unfortunate.

The clear wording of the Premier's statement on April 5 was that there were no considerations to the government of Canada for the $81 million. Mr. Fraine says that the federal government would be agreeable. I'd also like to ask the minister about that phrase. Does he have any idea what that means - that the federal government would be "agreeable to the termination of construction"? Because that gives rise to the inference that it was the government of British Columbia that requested the termination of the Dease Lake line. Could this termination be accomplished without losing a federal contribution?

Now I haven't got anything to support that view, but that's even a more critical abdication of responsibility and that makes April 5 look like a complete sham. I mean, does that phrase by Mr. Fraine mean that the BCR and/or the provincial government said: "Well, we would give up the Dease Lake extension, but we're afraid of losing that federal money"? Was that the deal? Isn't that interesting, because that's consistent with the evidence of Mr. Young and Mr. Fraine before the commission. Mr. Fraine stated that the board recommended that they continue the Dease Lake extension if for no other reason than they're going to get $117 million from the federal government. Now that's his testimony.

Then he says: "Well, the feds have changed their position. They'll give us $81 million even if we do shut down construction." Is that the position that the government took? That's critical for the people to know. Do you know why it's critical, Mr. Chairman? Because I think that there's a snow job going on around here. I really do. This government, if they decided -and I think they have a long time ago -

that they don't want to build the Dease Lake extension.... They're going through this charade to make it more palatable to the people, particularly up there, who will be affected by the abandonment of the construction of that line. That's what I think is going on, and that's why the Premier and the minister were not candid with the public on April 5 and did not tell them what the real story was.

Fraine says, "$81 million might be available only if construction was terminated." Now the two statements are a little bit incongruous, but it's the minister who can straighten that out. That information, Mr. Chairman, was available to this minister and to the Premier at least by March 10, about 25 days or so before the press conference at which the minister and the Premier stated there were no considerations, no strings attached, no problems -$81 million. The clear inference after several questions by the press was that they were getting the $81 million whether they had a pause in construction or not. Now that was clear. There was no suggestion that they would in any way endanger receiving that $81 million had they continued the construction of the Dease Lake line.

We now know that had they continued the construction of the Dease Lake line, they would not have gotten the $81 million. Had they not stopped the construction of the Dease Lake line, they would not have got a penny from the federal government. That was the agreement; that was the saw or whatever you like.

Does the minister know anything about the washout on the Fort St. John-Fort Nelson line? The people up there are still on the phone. They'd like to know what's going to happen. It would be very

[ Page 2820 ]

helpful to everyone in British Columbia if we could get a statement of policy with respect to that line. I know the Speaker of this House is very, very anxious about it. The Premier has steadfastly refused to support the member for North Peace (Mr. Smith) when he stated to his constituency that the line would be continued and operated by the BCR.

HON. A.V. FRASER (Minister of Highways and Public Works): The road is open.

MR. LAUK: Oh, yes, the road is open. I just saw the Minister of Public Works (Hon. Mr. Fraser) over here talking to the member for Coquitlam (Mr. Kerster) . We all know what happened to the member for Coquitlam, Mr. Chairman.

MR. CHAIRMAN: Hon. member, we are on vote 102. I know you are going to get right back to the minister's estimates.

MR. LAUK: That's right. Isn't it vote 2 that... ?

MR. KERSTER: Oh, let's hear about the seatbelts again, Gary.

MR. CHAIRMAN: Hon. members, the first member for Vancouver Centre has the floor on vote 102.

MR. LAUK: Well, I don't think a seatbelt would help anyway, Mr. Chairman. I think that maybe the Minister of Public Works should look into putting in a Jolly Jumper over there. (Laughter.) We could attach it to the ceiling.

Interjection.

MR. LEA: Point of order! Point of order! (Laughter.)

MR. CHAIRMAN: Hon. members, perhaps we could get back to vote 102.

MR. LAUK: One of the most uncharitable hon. members in this House suggested that the hon. member for Coquitlam's nose, moustache and glasses come off all at the same time. (Laughter.) I'll leave the other one-liners that I've been saving up.

The people along the Fort St. John-Fort Nelson line want to know. We were told it would take a week to ford the washout there. Now we hear it's six weeks. Then, even beyond that, it may not be until the royal commission reports. The Speaker of the House said that even if the royal commission reports that they abandon that line, it's the policy of the government to continue that line. I'd also like to have that confirmed as well.

The minister did not comment on the figure that I have to restart construction; that the extra cost, because of the pause of construction - or the abandonment of construction - on the Dease Lake line is going to be $40 million. That's not just including inflation. That's because of the current washouts which have been caused by a lack of maintenance. Is that figure too low, or too high, or am I being misinformed, or what? I'd like to know what that extra cost is. He's the principal minister in negotiating this agreement and he surely must have considered the extra cost of abandoning this line if they were going to start it up again. Maybe everything that they've gained - or they think they've gained -with the federal government in terms of dollars and cents has been lost. There's $36 million to $40 million that they've lost, it seems to me, by stopping construction. They've only got $81 million, $10 million of which is really applicable to winding it down, so let's take $71 million. That's a $50 million loss from the contract that was to be signed between the federal and provincial government two years ago. There's no point talking about a 50-50 arrangement for completion, because that's subject to renegotiation.

You know, all our problems started when old Otto Lang became Transport minister.

MR. J.J. KEMPF (Omineca): It all started in 1972.

MR. LAUK: It was then that the problems really got accelerated because Otto Lang doesn't seem to have any interest in this province whatsoever. He's cancelled the subsidies for transportation on the coast. He couldn't care less about the three Liberal seats here. He doesn't know that anything really exists beyond the Rockies . . .

MR. LEA: He's a Rhodes Scholar.

MR. LAUK: ... and he's had access to taxpayers' aircraft so he can come over and see.

MR. CHAIRMAN: Hon. member, we do seem to be getting a long way off vote 102 when we're discussing the aircraft of the federal government and their use by the federal Minister of Transport.

MR. LEA: We want to get to the nanny!

MR. LAUK: Do you want me to talk about Air Canada, Mr. Chairman?

MR. CHAIRMAN: No, I would think that would also be inappropriate at this time. I would suggest that vote 102, the minister's office, $134,140 to defray the cost of the office of the Minister of Energy, Transport and Communications, would be

[ Page 2821 ]

most appropriate.

MR. LAUK: Thank you. Every once in a while it's very helpful for the Chairman to inform speakers of the vote so that we can get back on the track. But getting back on the track in the Dease Lake extension would be difficult because I understand that since construction has been abandoned there are a lot of washouts there.

Well, let me go on. You know, one of the difficulties is that the minister talked about April 5 as if it was a pause, but that's not what the BCR board told the cabinet on March 10, 25 days prior to April 5, when there was a press conference. They said this - and this is included in a memorandum entitled "BCR - Proposed Abandonment of the Dease Lake Extension." They didn't say pause.

MR. LEA: What the BCR proposed! Provincial government, eh?

MR. LAUK: Let me quote it for the record:

"At December 31,1976, the railway has invested $191 million in constructing trackage from Fort St. James north towards the Dease Lake. The cost to complete construction is $120 million."

And so on and so forth. "Once train operations have started, " and they start talking about costs. Then they talk about an exchange of letters:

"Mr. Fraine's letter to Mr. Phillips on February 25,1977, where he suggested that construction should continue was predicated on the assumption that the federal contribution was $117 million."

You said we didn't get anything for the province.

Interjection.

MR. LAUK: We didn't get it. Well, it's predicated on $117 million. You should tell Mr. Fraine that. He doesn't seem to know. He's only a man who's very familiar with railways.

"It could only be obtained on completion of the section. It has now been indicated by the federal government's position maybe that a contribution will only be made if construction ceases. While the board has not yet made a formal decision as to what its position should be with respect to this line, there is a body of opinion within the board which considers the construction of the Dease Lake extension should be stopped. . . ."

AN HON. MEMBER: It's not policy.

MR. LAUK: And listen to this. Mr. Chairman, this puts the cherry on the cheesecake:

should be stopped now and that, indeed, some 113 miles of track already laid north of the last customer on the fine at Lovell Cove should be taken up and placed in inventory. This would provide" - and get this - "$29 million worth of rail, ties and other material to be used against subsequent maintenance requirements on other things of the railway."

AN HON. MEMBER: That's quite a pause!

MR. LAUK: Did you agree to that, Mr. Minister, through you, Mr. Chairman? Had you agreed to that on April 5.. .. You received this memorandum on March 10. Were you being candid with the people of this province when you said there were no considerations for the amount of money coming from the federal government?

MR. L.B. KAHL (Esquimalt): Go on, go on! Did you get stuck on a big word?

MR. LAUK: "On April 5, the hon. Premier announced ... et cetera, et cetera." All right. "On April 5,1977, the hon. Premier announced in the provincial Legislature that on the recommendations of the board of directors of BCR . . ." You see, this assumes - if I can interpolate for a moment - by that statement....

Interjection.

MR. LAUK: Interpolate.

AN HON. MEMBER: That's American. You were in the States too long.

MR. LAUK: Oh, I'm sorry. I didn't go to a private school long enough, I guess. (Laughter.) Or maybe I didn't go to the right one.

Interjections.

MR. LAUK: Academic elitist!

" . . . on the recommendation of the board of directors of the BCR." That clearly indicates that they were acting on this memorandum. Doesn't it to you, Mr. Member?

AN HON. MEMBER: It would seem so.

MR. LAUK: Certainly, certainly. Well, who would read it to you, Mr. Member?

AN HON. MEMBER: We can read.

MR. LEA: Oh, you bragger!

[ Page 2822 ]

AN HON. MEMBER: You move your lips.

MR. LAUK: "You can read, " he says, Mr. Member.

MR. CHAIRMAN: Hon. members, perhaps we can dispense with the levity and get back to the business of the House.

MR. LAUK: Thank you, Mr. Chairman.

In the face of that kind of testimony, Mr. Chairman, the minister certainly has something to answer for, because it appears they deliberately withheld information from the public of the province on April 5th, They were questioned at least a half a dozen times about the details of the $81 million. There was a denial at worst, and at best at least the inference was open - or implication given - that the $81 million would have come to them anyway. And here we have a memorandum recommending to the government that they not only abandon the Dease Lake line but that they pick up the tracks. I am very, very worried about this.

You know, you've got the Alberta government planning an expansion in the north. They are building and rebuilding. They are planning economic development and they are rushing to the Yukon and the Northwest Territories, and they're rushing toward Alaska, and B.C. is getting left behind by a narrow-minded, visionless, unimaginative government, bottom-line economists who have no care about high unemployment. We've got to press on with the development of our north, Mr. Chairman. There's a time for consolidation, and there's a time for expansion. There's a time now for expansion to provide jobs, at a time when the economy is sluggish, not to build fancy, academic, elitist nonsense out at the university - lenses and what have you. I remember the speeches you used to make. The capital investment of half a billion dollars for something with three employees - this is the kind of economic development the Minister of Education would like to see. No, let's move with that rail line up there. We don't need a royal commission to tell us it's going to be costly; we know it's going to be costly. But I'll tell you it's going to be a lot less costly to the people of this province than not building it, in terms of social cost, high unemployment and crippling economic devastation in the whole north in this province.

MR. KEMPF: Build the railway to no place, eh Gary?

MR. COCKE: Your former Premier built it. W.A.C. Bennett was the guy who laid that line out, baby.

Interjections.

MR. CHAIRMAN: Hon. members, the first member for Vancouver Centre has the floor. If the first member wishes to yield to the member for New Westminster or the member for Coquitlam, that may be in order, but at this time he has the floor. Please allow him to continue.

MR. LAUK: Well, I just wanted to lay the backdrop for this pressing of the minister. The people have to know now. The costs are mounting and I don't think that we can be in too much of a rush to grant the minister's salary without hearing some of those answers.

MR. KERSTER: Mr. Chairman, I had a few things that I would like to reflect on as far as B.C. Hydro is concerned under this particular vote. I have recently taken B.C. Hydro somewhat to task because of what I thought was its inability to be a responsible corporate citizen. I think that that concept is changing. This was concerning - and I think most people know about this - the Burrard thermal plant in my constituency and the pollution situation concerning the increase in both particulate and contaminant pollution through the burning of bunker oil.

The corporation has reconsidered. It has reacted to public opinion - requests from myself and others in the community - and has shown its ability to respond as a responsible corporate citizen. For that I want to commend this minister and that corporation, because it is the first time in many, many years that that corporation has responded with a heart after having a headless direction for three and a half years prior to this government taking over.

The first member for Vancouver Centre (Mr. Lauk) , who likes to talk about noses and glasses and moustaches all coming off at one time, who has a winning smile but a losing face, who is really, I think, disturbed in many ways. . . .

MR. CHAIRMAN: Hon. member, order, please. We are on vote 102.

MR. KERSTER: Yes, I'm getting to the pollution factor, Mr. Chairman. I'm relating to B.C. Hydro and pollution.

We've had enough conversation from that first member for Vancouver Centre tonight to pollute this chamber and I wanted to relate it to the fact that he is a bit paranoid about hair, you see, because anyone who can grow a moustache is one above him because he's losing it on the top of his head as well as inside his head.

MR. CHAIRMAN: Hon. member....

MR. KERSTER: Therefore I will now get back to vote 102.

[ Page 2823 ]

MR. CHAIRMAN: Order, please. I am having some difficulty relating your debate to the vote 102. Please continue on the vote.

MR. KERSTER: I have just a few more things to say.

MR. LAUK: Mr. Chairman, if he has any solutions to that problem I'd like to hear it!

MR. KERSTER: Under vote 102, this hon. first member for Vancouver Centre was a director of the B.C. Railway. He was a director of that railway for 30 or 32 months, whatever. It is no secret that he was very impressed....

MR. LAUK: You weren't here at the time. You were in Maui.

MR. KERSTER: I was here, hon. member. In fact, you've been in Hawaii more often than I have.

MR. LAUK: Have you got the tapes?

MR. KERSTER: In fact, some of your people are still there. At least I live in my own constituency.

MR. LAUK: Are you referring to Captain Cook?

MR. KERSTER: It's no secret, Mr. Chairman, that he was very impressed by the fact that he had that title as a director of B.C. Rail. But you know, as he played around with the title - "I am a director of B.C. Rail" - he was playing with his trains and that railroad was going down a disaster course. They are talking about tracks, extensions and settlements. All of this convoluted nonsense that they are trying to press on this government now is nothing but a direct result of their total incompetence when they were government.

He talks about settlements.

MR. LAUK: I hear you've got a backbencher over there.

MR. KERSTER: You were a backbencher. You've been a backbencher and you're still a backbencher and you may always be a backbencher because, god, I hope we never have another NDP government here that will see ministers of your calibre again.

I'll tell you something. We talk about settlements. We talk about the MEL Paving settlement and they make a big hoopla about this thing. Who was responsible for the thing in the first place? What party? The NDP, that former government, made a big issue of the fact....

MR. LAUK: Pat, I wonder if Jack knows how ably defended he is.

MR. KERSTER: There must be a full moon tonight. You're chirping away again. Stay with me, hon. member. I really would like to be alone. (Laughter.)

What I'm trying to relate is the fact that these settlements were nothing but what he instigated. Where was that man when irresponsible settlements were made with Keen and with KRM? How much did you cost the taxpayers of this province? $10 million. The day before the election you cost $71.5 million of it. Try to explain that one away, Mr. Hon. Member, Mr. Former Minister of Economic Development, who ran everybody out of this province with total impunity.

He didn't give a hoot about this province. It was his own personal little snits and whims. . . . Well, Dominion Bridge was an example. You had a little tantrum there and they're in Ontario right now. How many jobs did we lose through that little tantrum?

Now we have the hon. member for Revelstoke-Slocan, Mr. Choo-Choo himself. Here is the letter, Mr. Chairman, that I'd like to read into the record tonight, because we've been talking about the Revelstoke Dam.

MR. LAUK: Did you get it out of the wastebasket?

MR. KERSTER: Not the 1-don't-give-a-damn but the Revelstoke Dam. It's very important that that member for Revelstoke-Slocan listen to this, because with the exception of the hon. members opposite who are not in opposition and the leaders, both honourable, of the Conservative and Liberal opposition, who live in their constituencies, most of you in the official opposition live in Victoria now or in this area and very seldom visit your constituencies. I want to read into the record a letter from the Revelstoke Review. This is regarding that former railroader, former Minister of Labour (Mr. King) , who is up criticizing tonight the operation of B.C. Hydro as it reflected on the Revelstoke Dam. It says:

"Revelstoke is quiet again. The hearings in the B.C. Hydro's application for a water licence for the proposed Revelstoke Canyon Dam are over. Never before in British Columbia's history. . . ."

MR. CHAIRMAN: Hon. member, there is another member rising on a point of order. Would you take your seat so I can hear his point of order, please?'

MR. KING: The point of order, Mr. Chairman, is that the letter the member refers to has already been read into the record of the House, along with my response to it. It seems rather redundant and I

[ Page 2824 ]

wouldn't want to overtax the member's vocal cords by being that redundant.

MR. CHAIRMAN: Hon. member from Coquitlam, kindly proceed.

MR. KERSTER: There have been so many interruptions tonight. I thank the hon. member for Revelstoke-Slocan for being so concerned about overtaxing my voice. Since we've all seen the opposition overtaxing their brains for so long, I am quite thankful for that. Nevertheless, I do want to read this into the record again because I think it's important that people understand. If the hon. member would like to stand and reply to it again, that's up to him, but this is very important because when he was the member and still is the member for Revelstoke-Slocan, he didn't have any criticism. He wasn't around; he wasn't available. Where was he when the constituents of his riding needed his support? Where was all this concern? This concern was somewhere else. It certainly wasn't in Revelstoke-Slocan. If I may, Mr. Chairman, I'd like to go on and read into the record this particular letter.

AN HON. MEMBER: What are you waiting for -help?

MR. KERSTER: Well, there have been so many interruptions. La Bonza is wanting to interrupt now. Do you want to stand up and unchain yourself?

MR. CHAIRMAN: Please proceed.

MR. KERSTER: Thank you. It said:

"One may question the project, the need for or even the procedures required under the Water Act that Hydro must follow to obtain a licence. However, no one can dispute the fact that a fair opportunity was afforded to all who wished to be heard. Be it large business or organization or a lone individual, everyone had the opportunity to say what they felt they had to. This individual participation became very evident when the MLA for Revelstoke-Slocan and a former Labour minister, Bill King, having completed his presentation under cross-examination, was confronted by a private citizen....

I won't . . . . Well, I can. Ralph - let's see....

AN HON. MEMBER: Good old Ralph. We remember him well.

MR. KERSTER: Good old Ralph, yes. Well, whatever. "Where were you, Mr. King, when this dam was planned?" That was the question that Ralph asked you. Do you remember the question?

[Mr. Schroeder in the chair]

MR. KING: You're too much!

MR. KERSTER: Well, I was too much for your leader.

MR. CHAIRMAN: Order, please, hon. member. Please address the Chair.

MR. KERSTER: Through you, Mr. Chairman, to the member for Revelstoke-Slocan, I was too much for his leader. I would like that to be a matter of record.

But, you know, that was a very good question: Where was the Revelstoke MLA, Bill King, when, while the NDP government was in power, we read on January 31 of 1974 right across the front of the Revelstoke newspapers: "Project Now Official, Revelstoke Be Dammed."? Where was Bill King when the Revelstoke Review on February 7,1974, printed on its front page a letter written to Revelstoke, city council from the NDP-appointed B.C. Hydro chairman Cass-Beggs in which the chairman stated "In the meantime we are proceeding on the basis that the Revelstoke project will be constructed for service as early as 1980"? In the same letter Cass-Beggs also promised early release of environmental reports and socio-economic implication studies. It was that study which was being completed by Howard Paish and his associates, information which would have greatly assisted the residents of the Revelstoke area to assess some of the socio-economic impacts of the project.

Now this was in the spring of 1974, one and a half years into the reign of the NDP government. Again we may well ask: where was Bill King at that time? We certainly didn't hear him raise any objections. That's all we've heard tonight - him raising objections.

On Thursday, May 30,1974, another headline in the Revelstoke paper read: "Resources Minister. . .

Who was that? Who was the Resources minister?

MR. KEMPF: Bob was his name.

MR. KERSTER: Bob Williams. "Resources Minister Falls Just Short of Announcing Revelstoke Canyon Dam. Indicates Project will be Reality." Pictures of a smiling Mr. King and then Premier Dave Barrett alongside the news item. Mr. Williams was also quoted as saying he would make an announcement within a month or two.

As the impact of the pending dam continued to build up in his constituency, Revelstoke MLA Bill King proudly assured the members of the Revelstoke Chamber of Commerce that the dam is as sure as death and taxes. In the meantime, the city and other groups continued their efforts to get copies of the

[ Page 2825 ]

promised Paish report. Again, we were assured by Mr. King that these were forthcoming. However, for some reason they never did arrive.

Where was Mr. King in December, 1974, when it was reported in a small newspaper that B.C. Hydro was interested in buying six building lots as newly opened subdivisions to be used as sites for homes occupied by Revelstoke Dam project personnel?

Now the headlines go on. I'm not going to read the whole thing because it's a colossal bore, as is that hon. member, and all of these things To be Used for Sites for Homes." "Hydro Dam Awaits Cabinet Approval." "Revelstoke Canyon Dam to Take Seven Years to Build." "Howard Paish and Associates to Come Forward with Report." "Parker Tells Council on Dam 'Not If But When .. .. .. The Dam Will be Built,

But When?"

These are all things that the former government had committed itself to, and they stand in their sanctimonious nonsense in this chamber tonight and they attack this minister and they say: "We are not responsible as government because we have even considered the Revelstoke Dam." But he wasn't even around when he was a minister in the former government to represent the people of his constituency who obviously have very great concerns for this dam project.

I would just suggest that this whole debate is just further evidence that this so-called official opposition is doing nothing but delaying the operation of this Legislature in carrying out the duties that we're charged with. All of this redundant nonsense is doing nothing but wasting the taxpayers' money, as it did then for the three and a half years it was in power; and criticism of vote 102, holding up the estimates of the Minister of Transport, Communications and Energy, is nothing but more convoluted, misleading, bungling, money-wasting, time-wasting nonsense.

MR. KING: As I indicated earlier, the exchange of correspondence to which the member for Coquitlam referred was already previously tabled in the House and I have no intention of referring to it. It's available as a matter of public record along with my response to that letter. But I think that I should probably just say something about who wrote the letter, Mr. Chairman. F understand it's an old friend of yours, Louie Steemstra, who is on the provincial executive of the Social Credit Party and who sought unsuccessfully the nomination of that party in the last provincial election. So I don't think it was really a very unbiased appraisal.

HON. MR. CHABOT: Is it true or false?

MR. KING: However, the response is a matter of public record and we're dealing with the minister's estimates.

MR. CHAIRMAN: Order, please, hon. members! There was keen interest in the speech just previously made and let's give the same courtesy to the member now speaking.

MR. KING: I would just like to say that we are now in the minister's estimates and I would prefer to deal with those. The rest of it is a matter of public record except that I would like to correct a number of erroneous statements made by the member for Coquitlam when he indicated that I was not in Revelstoke for the water licence hearings. That is absolutely incorrect. I did participate for about three weeks and submitted a brief, which is also a matter of public record. In any event, that's aside and separate from the main business of the House tonight.

I'm concerned and very disappointed that the Minister of Transport and Communications has failed to respond to questions this evening in a way that I think would be conducive to moving along with the business of the House and conducive to developing a climate of co-operation between the opposition and the government. The questions that we are asking are very important ones, certainly the ones I have put to the minister with respect to the British Columbia Hydro and Power Authority as it affects my riding.

The estimates of ministers are the main opportunity that members get to deal with issues of a local nature which affect the lives and the destinies and the fortunes of the citizens of their own ridings. I think it's a poor way to conduct business when the minister simply remains silent and then attempts in a very cursory and selective way to answer a whole range of questions that have been put to him by various opposition members.

The normal course of estimates in this Legislature used to be for questions and answers to be taken on a very brief and short exchange basis between the minister and questioners. That way information can be elicited and the concerns of various members satisfied without a great deal of time being utilized. Now I still haven't received a definitive answer from the minister with respect to what his policy is on the sale of water - not only from the Columbia River system, the general sale of water to the United States. I'm sure the minister is aware that this is an issue that has raged in Canada for many, many years.

AN HON. MEMBER: He doesn't want to talk about dams.

MR. KING: It's a question that the minister has been concerned with at an earlier stage in his career when he was Minister of the Environment with the federal government. I believe his stance has changed a number of times with respect to the wisdom of water sales to our neighbours to the south.

We are concerned at the moment, not only as I

[ Page 2826 ]

outlined earlier from the point of view of protecting the interests of our local areas from a recreational standpoint, but as a general policy matter. I fear that once a policy of water sales to the Americans is developed it's like the sale of power. You become locked in. It's very difficult to terminate and it tends to sacrifice and relinquish control of our own resources and consequently our own sovereignty to other nations.

Now this minister, as the person in charge of British Columbia Hydro, has to be concerned and has to be knowledgeable about the policy adopted in British Columbia. I certainly ask his co-operation in expanding on this question and answering my two-f old question: has water been sold thus far from the Columbia River system to the United States? What is the government's general policy with respect to water sale? This is a crucial issue.

I suspect that within not too many years water, as a resource commodity, is going to become more important than almost any of the traditional resources that we have taken for granted over the years. It's time that some attention was paid to our long-term interests in this regard before we start locking ourselves into positions that we will regret in the future. I certainly want some response from the minister in regard to that question, Mr. Chairman.

MR. BARBER: Would the minister care to respond at this moment, Mr. Chairman? Would you care to do that now?

HON. MR. CHABOT: Go ahead, Froot Loops!

MR. BARBER: Well, I expect to change the topic somewhat, and if you wish to answer it now I'd be happy to take my place.

MR. CHAIRMAN: Please proceed, hon. member.

MR. BARBER: It was on March 24 that I first raised in this Legislature the possibility of the cancellation of the Sidney-Anacortes run by the Washington State Ferry System. The press paid it some attention; the minister paid it none at all. I warned at that time that that system might decide to cut off the Anacortes ferry as early as the summer of this year, or at the latest, the summer of next year. The press paid it some attention; the minister paid it none at all,

Sure enough, as predicted by this opposition as early as March 24 in this House, the governor of the state of Washington, Miss Dixie Lee Ray, instructed the Washington Toll-bridge Authority, which is responsible for that system in the state, to cancel the service in June. A number of us attempted to persuade that governor to change her mind. The press paid attention; the minister paid none.

A number of people, including myself, sent letters and telegrams to the office of the governor, trying to point out to her that as neighbours of that state we were most dependent on that particular system. To the best of my knowledge, a number of concerned people made representations to the governor; the minister made none. We now have the sight of the Minister of Municipal Affairs (Hon. Mr. Curtis) , in whose riding Sidney is located, finally getting in on the act. I suppose better Johnny-come-lately than Johnny-come-never.

MR. CHAIRMAN: Would the hon. member show how this relates to vote 102?

MR. BARBER: I most certainly can, Mr. Chairman. It relates to the minister's responsibility for the B.C. ferry system and the numerous suggestions put forward that B.C. Ferries or the B.C. Steamships Co. be prepared to take over the Sidney-Anacortes run up its dissolution on January 1,1978. I think it relates most directly, Mr. Chairman.

What I'm trying to demonstrate is the history of gross neglect by that minister concerning the Sidney-Anacortes system, the gross lack of interest and responsibility demonstrated by that minister and his coalition government in the economic future of the town of Sidney and the economic health of greater Victoria.

On March 24 we warned the minister that the service might be cut as early as this summer. Sure enough, the governor said it was going to be cut in June of this summer. Sure enough, the minister did nothing and once again it was up to this opposition, together with concerned businessmen in Sidney and members of the chamber of commerce in Victoria and Sidney, to make the case to maintain that service.

On February 22,1977, Mr. Charles Gallagher, general manager of the British Columbia Ferry Corporation, wrote this letter to Mr. Glenn Lee of Seattle, Washington, , the third paragraph of which reads: "I think it responsible the additional auto capacity on the Victoria-Port Angeles run and on the Sidney-Anacortes run should be provided by private sector operators without subsidy."

My first question to the minister is: was that statement authorized by him, and is it the policy of this government that there shall be no subsidy, and therefore presumably no participation of any kind by this government on the Sidney-Anacortes run? Is that government policy? Was Mr. Gallagher making that statement with competence and authority?

Secondly, if it's possible that that does not reflect government policy, does the minister agree with the statement of the Provincial Secretary (Hon. Mrs. McCarthy) , made some 10 days ago, when she said that in her view it was the responsibility of Washington state to maintain the ferry service to

[ Page 2827 ]

Sidney? She said that. Some of us found difficulty believing it, but we checked with the reporters and, sure enough, that indeed, according to them, was an accurate quote. So I wonder if the minister might also tell us whether or not he endorses the statement of the Provincial Secretary which suggested that ferry service to Sidney was not the responsibility of this government, but rather that of Washington state.

Thirdly, I wonder if the minister is aware of the economic importance of that ferry link to the people of Sidney. I should like to point out that in fiscal 1976 the Sidney-Anacortes run carried 111,000 passengers and 64,500 vehicles. I should like further to point out, Mr. Chairman, that some 33 per cent of the passengers using that service are from Washington and Oregon states. Some 22 per cent of the passengers using that service are from California. it must be very clear, Mr. Chairman, to that minister that tourist traffic on the Sidney-Anacortes ferry is very heavy and very important. In fact, it's estimated at being worth between $2 million and $10 million to the economies of Sidney and greater Victoria respectively. That calculation is based on the usual expenditure of some $25 to $35 a day per tourist and an average stay in the greater Victoria area of 3.5 days.

On that basis, therefore, we see that 55 per cent of the total passengers on the Sidney-Anacortes run are coming into Sidney from Washington state, from Oregon state and from California. Other American passengers come through from other of the American states; 55 per cent of them come from the three states immediately to the south of us on the west coast of this continent. We're faced, Mr. Chairman, with the loss of tourist revenue valued at between $2 million and $10 million in the greater Victoria area. We're faced with a Provincial Secretary who tells us: "It's not our responsibility. It's up to Washington State to maintain the service." We're faced with a member for Saanich and the Islands (Hon. Mr. Curtis) who did nothing whatever until Washington state had already made i t s decision and now, Johnny-come-lately, tells us that he's leading a delegation down to Washington state. Well, they're not taking it very seriously, and neither is this opposition.

What we want to know, Mr. Chairman, is whether or not this minister is prepared to initiate a feasibility study to determine whether or not B.C. Ferries, or perhaps more appropriately the B.C. Steamship Company, might be prepared to enter that run effective January 1,1978. Some 98 per cent of the tourist business in Sidney comes from the Sidney-Anacortes run. The most beautiful run in the Gulf Islands is that particular run. It has a remarkable intrinsic appeal to anyone who's ever ridden on it and could, in its own route, be made as attractive as the Princess Marguerite route from Victoria to Seattle has been made.

In our view, Mr. Chairman, B.C. Ferries itself is probably not appropriate for that particular run. It does not serve exclusively citizens of the province in the deliberate way that B.C. Ferries is intended to. It does not have experience traveling between foreign ports. It does not have experience with customs and other regulations of an international sort. The B.C. Steamships Company, however, does, for which the minister is also responsible. What I'm proposing to the minister is that, having been warned as early as March 24 in this Legislature that we might be losing this run, and having been informed that the run is worth some $2 million to $10 million a year to the tourist economy of greater Victoria, would he be willing to authorize a feasibility study? Would he be willing to consider that the feasibility study should be conducted by the B.C. Steamship Company? Does he recognize that the purpose of that corporation, which at the moment is to serve the Princess Marguerite, and which does so admirably, might reasonably be considered as well to include the purpose of the Sidney-Anacortes run? The purpose of that run, like the Princess Marguerite run, is largely to maintain a vital element in the tourist economy of greater Victoria. That is the chief justification for the Marguerite. It is the chief justification for the Sidney-Anacortes run.

If the minister thinks it's possible, will he take into consideration that that constitutional justification for the existence of B.C. Steamships. . . ? The fact that it is small, and flexible, and bright, and imaginative, that it has experience with customs, with American port practices and regulations, that it is chartered to do that kind of thing, might well be the proper place for a new vessel on the Sidney-Anacortes run. It seems to us, Mr. Chairman, that after the damage that minister and that coalition has done to tourism on Vancouver Island, for the minister to turn his back on the people of Sidney would be a most unfair and unreasonable thing.

We think that that minister should be willing to consider and implement such a feasibility study right now. The study would examine vessels which might be available on lease or charter for the Sidney-Anacortes route. It would examine whether or not private enterprise could do the job and, if so, under what circumstances. It would examine whether or not private enterprise doing the job might require, as it does in some other ways, some kind of subsidy in order to make at least a marginal profit.

It's the view of this opposition, Mr. Chairman, that there is likely not much profit, in a direct sense, on that run, although the overall profit to the people of Victoria is important and considerable and necessary. The feasibility study should examine the financing of that, determining whether or not there might be ships presently available within the B.C. ferry system that

[ Page 2828 ]

on charter or lease could be made available to the B.C. Steamships Company and could be put on the Sidney-Anacortes run.

Hopefully such a feasibility study could determine whether or not with similar wit and imagination as was practised by B.C. Steamships when the Princess Marguerite run was revised, the kind of advertising campaigns and public information campaigns that were necessary then and would be necessary in the future, might be similarly undertaken.

What we are asking for, Mr. Chairman, is a commitment from that minister that he will not turn his back on the people of Sidney and on the tourist economy of Greater Victoria, that he will not allow January 1,1978, to come and accept the termination of the Sidney-Anacortes system without having lifted a finger. Is the minister willing today to order such a feasibility study? Would he accept that those might be, in part, some of its terms of reference? Would he accept responsibility for acting now to save a ferry system which is absolutely essential to the people of Sidney and worth again some $2 million to $10 million a year to the economies of Sidney and greater Victoria respectively? Or will the minister do what he did when he was first warned in this House on March 24, which was nothing? Will the minister tonight make a commitment to undertake that study and a commitment to enter the Sidney-Anacortes service if, as is patently obvious, Washington state chooses to abandon it on January 1,1978?

I'd be very interested in hearing the policy and the proposals of this minister in that regard, Mr. Chairman.

MR. R.E. SKELLY (Alberni): It's unfortunate, Mr. Chairman, that the minister refuses to answer questions on any aspect of his estimates. I suppose he's been instructed by someone to keep silent, and it's unfortunate.

MR. CHAIRMAN: Hon. member, I would remind the House again that it is at the election of the minister as to whether he wishes to answer the questions one at a time, altogether or not at all.

MR. SKELLY: Remember the old days, Mr. Chairman, when we talked about setting up a question period in this House and the Socreds talked about an answer period? Well, the question period is about all we have left and that was set up by the NDP.

MR. CHAIRMAN: We are now in Committee of Supply on vote 102.

MR. SKELLY: That's right, Mr. Chairman.

Earlier in the afternoon I asked the minister about the sale of the Langdale Queen and he answered most of the questions, for which I thank him. I asked him if he had an appraisal of the ship done before it was put out to tender and what the value of the ship was, and if an upset price had been established before the ship had been sold.

When the ship was sold it was sold for $50,000, and I understand that the people who bought the ship then sold the engines for $62,000 one month after they purchased the ship, which was a 25 per cent profit on their initial investment in a single month, which wasn't too bad for buying a ship. You'll probably admit that yourself, Mr. Chairman.

AN HON. MEMBER: That's marginal economics.

MR. SKELLY: Or Socred doctrine.

AN HON. MEMBER: You're talking about $12,000.

MR. SKELLY: "What's $12,000, " says the member for Coquitlam (Mr. Kerster) , especially among friends?,

MR. CHAIRMAN: Order, please.

MR. SKELLY: Because I hear that the people who purchased the ship then decided they were going to change the name of it. I hear the vice-Premier was involved in a christening ceremony, because they renamed the ship Amazing Grace. (Laughter.)

I'm wondering if the vice-Premier had any input into who was going to purchase the ship in the first place because the decision, I understand, on selling the ship was made by cabinet, not by the B.C. Ferry Corporation.

AN HON. MEMBER: Oh, oh!

MR. SKELLY: Was it at the recommendation of the vice-Premier that the ship was sold to the people who purchased it, who were not the high bidders, and was it an attempt on the part of the vice-Premier to have the ship named Amazing Grace?

I'm wondering what the appraised value of the ship was, if B.C. Ferry Corporation did an appraisal, what the appraised value of the ship was, and what the upset price was for bidders. Would the minister be prepared to answer that question?

Interjections.

MR. SKELLY: I think the minister is just consulting with his staff now to determine what the appraised value was.

MRS. E.E. DAILLY (Burnaby North): I would like to go back again to the question that has been

[ Page 2829 ]

brought up by the member for Revelstoke-Slocan (Mr. King) , who has not yet received an answer from the minister. I know everyone - particularly on the government side - is anxious to move through these estimates, but it's pretty difficult when there are no answers forthcoming from that minister on some specific areas in his portfolio.

In 1970 at a B.C. Liberal convention the minister whose estimates we're now dealing with stated his policies on the whole matter of selling of our water to the United States. I'd like to just reiterate some points which the minister at that time when he was a Liberal made in his speech to a B.C. Liberal gathering in Burnaby.

AN HON. MEMBER: That's before Trudeau put the stiletto in him.

MRS. DAILLY: The first point was: don't export water to the U.S.A. because you'll never be able to cut off the flow. Second point made by the minister in 1970: don't divert whole rivers from one river basin to the next. Third point: don't regulate water flow in such a way as to jeopardize other renewable resources in the area. Fourth point the minister made in 1970: don't sacrifice trees, fish, wildlife and other living things for the production of power or the protection of real estate unless absolutely necessary.

MR. LEA: He was a Liberal then.

MRS. DAILLY: And, continued the hon. minister, "if we apply these rules, we will say an emphatic 'no' to the diversion of Canadian water in bulk into the U.S.A."

Now I simply want to ask the minister if he can assure the House that that is still his policy.

MR. LEA: Does he agree with what he said?

MRS. DAILLY: I think it's very important to the people of British Columbia to know where this minister and his government stand on this vital question of selling our water to the United States.

HON. MR. DAVIS: Mr. Chairman, the hon. member for Burnaby North said, better than I could tonight, what the basic principles, - certainly that I endorse and what I believe - should be, the principles we observe with respect to our water arrangements with neighbouring countries, indeed even within our own jurisdiction in this country: don't sell water and don't export water.

What the hon. members opposite don't seem to realize is that water, for example, has been running down the valley of the Columbia into the United States for literally hundreds of thousands of years, Exporting water deliberately by diverting from a river that's totally in Canada - flowing to the sea in Canada, into another watershed, presumably in the United States - is a far different thing than allowing water to continue to flow in its natural channel into the United States.

When the hon. member for Revelstoke-Slocan (Mr. King) says, "Did you sell any water to the United States last year?", he should really have said: "Did you hold any back for a period of time? It was going down there anyway; did you get paid for holding it back for a little while?" I would certainly have to answer yes. That's the nature of the Columbia River Treaty.

We're co-operating with a sister nation, and doing a very natural thing. We're simply skimming off the floodwaters, holding them back for a time, letting them run down at another time in the year. That's all that happens. No, we're not selling any water to the United States. Yes, we are co-operating with the United States in the better management of our river systems. It's as simple as that.

The hon. member for Victoria (Mr. Barber) asked if we are concerned about the Sidney-Anacortes run. Of course we are; we're vitally concerned. We're certainly concerned about any transportation artery into any part of this province. The hon. Premier did intervene successfully with the governor of Washington state, and the governor did arrange for Washington State Ferries to continue to run a vessel on the Sidney-Anacortes run, at least until January of next year.

The problem that Washington State Ferries faces, basically, is this: most - nearly all - of their vessels, are old. They don't want to buy new vessels before they have to, because new vessels are very expensive. They intend - at least it was their intention - to switch the vessel on the Anacortes run to a run down in the Seattle area where it would have a year-round traffic that made it more economical.

The problem we face in analysing the economics of the Sidney-Anacortes run is multiple. First, it's a thin-run part of the year. Second, it doesn't break even now with U.S. crews, which are of the order of 14 as opposed to our 31. Third, we don't have a surplus vessel that could operate on that run, nor do we have extra crew. If we were to operate on that run, we would have to use B.C. Steamships and be under a federal charter; we couldn't use B.C. Ferries as the appropriate vehicle. We have had some preliminary studies undertaken, and the net loss of our operating a vessel on that run would be of the order of $3 million a year. We have done some investigations. . . -

AN HON. MEMBER: Which vessels?

HON. MR. DAVIS: Specifically, in one instance, the Queen of Tsawwassen.

[ Page 2830 ]

Anyway, we have looked at it carefully. We're continuing to look at it and certainly I'll ask the B.C. Steamships people to provide us with additional numbers. But it would be an expensive run for us to man, especially on a year-round basis.

The hon. member for Vancouver Centre said that he was interpolating. That, I think, means that he was projecting from one point in time to another. After a while his remarks began to make a little bit of sense to me, and what they added up to really was that he was giving the reasons why the previous government was anxious to enter into an agreement with the federal government in respect to northwest rail. The previous government was indeed short of funds. Why else would they have agreed to a cap on the federal contribution to the whole of the northwest rail agreement, a cap of $117 million for a completed project - not for a project at this present stage, the stage when the pause is now underway - but for the completed project? In other words, they were so hard up they wanted to settle at once and they were prepared to sacrifice a number of things which the management of B.C. Rail at the time regarded as vital to the successful operation of the B.C. Rail. One was running rights which would have permitted the CN to use the B.C. Rail line down across the province. That was one reason why a pause was desirable - to sort some of these things out.

Another was that the CNR - or at least the federal side - which was going to build a line diagonally down towards Prince Rupert, would have no time limit. It would be excused as to any time limit for completion of the federal side of the project. That was another reason why the management of B.C. Rail, late in 1975, did not want the previous government to agree to the conditions imposed by the hon. Otto Lang in his famous letter and which the previous government was prepared to accept. I think the most convincing of the arguments as to why that was a bad deal is the cap. The cap would have put a maximum of $117.5 million on the federal contribution, regardless of what the whole project cost.

Now the present estimate for completion is of the order of $339 million. The federal contribution, essentially on a 50-50 basis for most of the length, would be of the order of $150 million. So immediately the previous government was prepared to give up $30 or $40 million of federal moneys. They were so anxious to get their hands on some money that they were prepared to sacrifice the 50-50 formula for the indefinite future. So I can only explain the questions he's asking in terms of the circumstances that existed 18 months ago. Certainly they weren't the circumstances surrounding our negotiation this spring. Thank you, Mr. Chairman.

MR. LAUK: You know, Mr. Chairman, I think it would be appropriate for the minister to direct himself to the questions which I've asked. The fact is that he and the Premier on April 5 did not tell the truth to the public of British Columbia.

MR. CHAIRMAN: Order, please! I'll have to ask the member to withdraw that statement.

MR. LAUK: I didn't say they deliberately didn't tell the truth. I said they did not tell the whole truth to the people of British Columbia.

MR. CHAIRMAN: It's hardly the point, hon. member. It's language that's unparliamentary and not to be condoned in this House. It's offensive to the whole House, not just to the member.

MR. LAUK: Oh, let's not get carried away with editorialization. Saying that somebody has not told the truth is not unparliamentary.

MR. CHAIRMAN: Will the member withdraw the remark?

MR. LAUK: I did not suggest that the minister told an untruth....

MR. CHAIRMAN: Order, please! Will the member withdraw the remark?

MR. LAUK: I withdraw any remark that would mean that he told an untruth.

MR. CHAIRMAN: So ordered.

MR. LAUK: But I do suggest that on April 5, both he and the Premier knew what the facts were and they did not tell those facts to the press conference they held. The minister has still not explained his actions in that regard. He talks about a $117 million cap and completion of the line and all this nonsense. That's absolute nonsense and you know it.

The government has abandoned this line. It will cost at least $40 million to start it up again, but they know perfectly well they are not going to start it up again because there is a deal between the federal and provincial governments that they would only get $81 million maximum - maximum, Mr. Chairman - if they stopped construction.

The agreement does not say that they will share the completion of the line 50-50. If the agreement says that, then I would have nothing further to say.

Interjection.

MR. LAUK: The master agreement has said that since '71 in the previous Social Credit administration, and it still says that.

[ Page 2831 ]

Interjection.

MR. LAUK: Okay, but you said that the $81 million in agreement for the stoppage of that construction.... You put all of that together because now, finally, you've got a 50-50 sharing agreement. You've always had a 50-50 sharing agreement -always!

Interjection.

MR. LAUK: We didn't give anything up. That's absolute nonsense. The minister is wrong!

MR. LEA: And he knows it!

MR. CHAIRMAN: Order, please, hon. members. Every member has an opportunity to speak in this debate, but he must stand and be recognized.

MR. LAUK: The fact is, Mr. Chairman, that that agreement says that we reiterate the principle of a 50-50 sharing cost on these lines and others pursuant to the '73 agreement in principle, but that any cost-sharing on the continuation of construction on the Dease Lake extension will have to be negotiated. Now that's a fact, isn't it? That's what the agreement says, for heaven's sake! Can't you read it? "Any future negotiations, any future sharing of costs on the Dease 'Lake will have to be negotiated." That's what the agreement said; that's the 50-50. What else does it mean?

MR. LEA: Why would you negotiate 50-50?

MR. LAUK: He's being nice with us, Mr. Chairman - that is, particular - because Otto Lang is going to come back to the table with the royal commission and decide that you should proceed with the Dease Lake extension. And if political heat is heavy, then you might proceed with the Dease Lake extension.

MR. LEA: A fellow Rhodes Scholar!

MR. LAUK: Then you go back to the table with Otto Lang and he will say: "Oh, yes. We agree with 50-50 in principle but we don't agree with continuing the Dease Lake extension." You know exactly what Otto Lang's opinion is and that's it. You're not going to get a penny out of them. You've been buffaloed! You've been boxed in at $81 million and you're the loser. You're down the tube!

MR. CHAIRMAN: The hon. member will please address the Chair.

MR. LAUK: You sold out this province! You've abandoned a line that can bring economic development to the north. You've given away $40 million to $50 million that you had in your pocket from the federal government, and you call that a win.

MR. LEA: It stops the deficit.

MR. LAUK: Boy, when this minister was Minister of Fisheries, Prime Minister Trudeau had a plan for salmon enhancement. You remember the salmon enhancement programme? The first step of it was to get rid of the minister, and I can sure see why!

MR. LEA: The old stiletto in the back with a broadsword!

MR. LAUK: The minister, a little while ago, took credit for negotiating this agreement; he was gleefully taking credit for it. I've never heard of a case of permanent and terminal jet lag before.

MR. KING: Mr. Chairman, there is another matter that I want to discuss with the minister that relates to the energy projections that B.C. Hydro put forward as justification for constructing the Revelstoke Dam. It has been touched on but not in any great detail. I think the minister is quite familiar with the presentation that was put forward to the cabinet appeal committee by SPEC and also the presentation that was put forward by three professors from UBC in terms of a new energy pricing policy by B.C. Hydro. It was dealt with extensively in The Vancouver Sun a few days ago.

I think it is a fact that the rates that are charged for power in the province of British Columbia are very inequitable between the large bulk users and domestic customers. I think the case was made by the SPEC group and by the three professors I referred to perhaps in a more detailed way than ever before.

But I have access to some material on the same proposition, Mr. Chairman, which indicates that there are some very startling discrepancies in terms of the pricing formula pursued by B.C. Hydro. It's true that the large industrial users in the province such as B.C. Forest Products, MacMillan Bloedel, Elk Falls, Canadian Occidental Petroleum - all of these large forest, pulp and mining companies particularly - use a large amount of the power that is generated by B.C. Hydro in the province.

I think there are 25 large industries that utilize 83 per cent of the bulk sales of electricity by B.C. Hydro. That's a relatively small number of companies that use the largest proportion of the block power from B.C. Hydro. When we look at the revenue that accrues to British Columbia Hydro and Power Authority from this small number of large bulk users, we find it's completely disproportionate in terms of revenue with the power that is utilized.

The fact of the matter is that the large bulk

[ Page 2832 ]

consumers are obtaining power in British Columbia at absolutely bargain basement rates as compared to the individual domestic user - the householder. I forget precisely what the revenue is. I think the large domestic users use about 40 per cent of the power generated totally, yet only contribute about 25 per cent of the revenue which accrues to B.C. Hydro. This is certainly supporting evidence to the position put forward by the professors from UBC whom I referred to when they advocate a new pricing policy. It certainly gives support to the SPEC group with respect to the presentation they make. If that kind of approach continues, then of course it's going to be increasingly necessary for B.C. Hydro and Power Authority to undertake new projects - presumably hydro projects which will threaten to flood additional acres of valuable land in the province of British Columbia. This inevitably will bring about tremendous disruption to people's lives as well as a threat to the ecological interests of the province -threats to wildlife and fisheries.

Surely the objective of the government should be to try to diminish the ever-increasing demand for energy in this province. There is no question that pricing policies do affect demand. I think the minister, as a proclaimed free-enterpriser, must recognize that simple equation - that the pricing policies certainly affect the demand and the consumption of energy in the same way that any other commodity would be affected. What we have in the province of British Columbia today is a pricing formula which encourages large industrial users to utilize power heavily, because the larger bulk they buy it in, the cheaper it is.

Conversely, to the householder the same formula is not really true, at least not to the same extent in any event. But whether it be a domestic customer or an industrial user, that kind of approach to power consumption or energy use is clearly at cross purposes with our needs to conserve energy and to try to curb the damage I outlined that's incident to the generation of hydro-electric power, to say nothing of the tremendously mounting debt surrounding B.C. Hydro, the ever-increasing costs of dam construction and so on.

I certainly have some interesting figures on it which I'm not going to recite because I think the case, as I say, was certainly made in a most effective way both by SPEC and by the professors from UBC to whom I referred. A lot of exposure has been given to that presentation. I think that if a new pricing policy was adopted whereby particularly industrial users were to some extent penalized for excessive use of power, the natural consequence would be to create more research in other forms of power use. To some extent the forest industry particularly has been willing to co-operate with government and to expand capital in researching other possible forms of energy use through hog fuel and forest waste that otherwise is burned on the forest floor, in many cases. Unfortunately, the government, rather than acting as the catalyst for this kind of approach, for this kind of initiative, has been leaving the ball in the court of private industry in that regard. I think that's most unfortunate.

So I would like to hear from the minister precisely what his reaction is to the proposition put forward by the groups to which I refer and his general reaction to the current pricing policies which are being followed by B.C. Hydro. I think that the people of British Columbia as well as the members of this House have the right to some indication of policy direction from the minister in this most crucial and certainly very costly field of power policy in the province. I'd like to hear from the minister in terms of where he intends to go and what initiatives are underway. Is B.C. Hydro taking any initiative?

Are there any outside groups being utilized by Hydro or by the minister's direction that are not relying on B.C. Hydro alone but doing some independent research? After all, the problem with an agency like B.C. Hydro is that sometimes they tend to become self-perpetuating. They make projections of power needs, they build their own little empire and they tend to ensure that any of their prophecies become self-fulfilling. I think some independent research and some separate authority from B.C. Hydro is necessary to explore the best ways of maximizing all of the commodities that are available and all the fuels that are available for power generation in the province.

We should not rely solely on the agency which owes its life, its support, to the bureaucracy which it itself has developed over the years in terms of breaking out of that mould, breaking new ground, and possibly saving much of our limited environment, or limited resources, and certainly protecting the people of British Columbia from an ever-expanding capital debt to support the avaricious appetite for power of B.C. Hydro and its large industrial customers in this province.

HON. MR. DAVIS: Mr. Chairman, the hon. member for Revelstoke has asked my opinion of the pricing policy followed by B.C. Hydro. It can stand improvement certainly, and I think the first to say that would be the directors and the management of that large utility. I think all utilities in the power business on this continent, and indeed in most parts of the world, agree that their basic pricing policy has to change.

The main reason it has to change is inflation. It used to be, when prices, wages, et cetera, were much more stable, that larger systems tended to be less costly on the average to run than the smaller ones, and as the system grew, as its customers became more

[ Page 2833 ]

diversified and so on, average costs fell. So there was reason - at least economic reason - to push sales in order to cause the utility to be bigger and to bring average costs down. Rate structures were designed, therefore, with a declining charge per unit of consumption. It takes time to turn that around. Now that we have inflation, each new plant that is built, like each new house that's built, is more expensive than the last. Even though it's better designed, more favourably located, it still tends to be more costly. Each new unit, in order words, is more expensive. A rate structure that reflects that fact is a rate structure that tends to discourage consumption rather than encourage consumption, so we've had a turnaround beginning somewhere in the 1960s in the problems faced by utilities and in their attempt to deal with these problems by altering their rate structure.

The problem is that in altering rate structures you affect people - many people. As hon. members know, there is great resistance not only to rate changes, but particularly to rate increases. Therefore it's a step-by-step process. B.C. Hydro is now embarked on a step-by-step process changing its pricing policies, its price structure, so that those who consume more will, in fact, pay more. That's what the economists suggest is desirable. That's the direction in which B.C. Hydro is going. It's the direction in which nearly all utilities on this continent are going. They are not saying anything new. It's been said by rate engineers, by management across this continent, for nearly the last decade. That's nothing new.

Now the hon. member has said several times in this House that large industrial consumers get their power for less than small consumers or small homeowners do, for example.

There are two basic reasons for that in simple terms: the large industrial user requires much less investment on the part of the utility; and secondly, they take their power more or less continuously. Therefore they use a great deal of power around the year, and the hydro system doesn't at least involve a great deal of expenditure on the part of the utility. Whereas an intermittent user - a. homeowner, for example or a small business operating five days a week only in the daylight hours - uses power intermittently but demands every bit as much capacity, generating capacity, transmission capacity and distribution capacity which often isn't needed in the case of industrial customers.

So there's a basic reason why during the period of the past government and in situations all across this continent the large user, especially the constant user, of power pays less per unit of electricity than the homeowner or the small commercial enterprises. Its fundamental to the system; it's fundamental to the costing of the system. They should pay less; how much less is another matter.

Finally, yes, there is another agency of government, the B.C. Energy Commission, which was concerned about the forecast of future demand and about other ways of generating electricity. It's working closely now with the forest industry as to alternative means of fuelling boilers particularly. The main problem in this province, in the long term anyway, is oil replacement using wood wastes, which incidentally could also produce some electricity.

MR. KING: I have just a couple of points, Mr. Chairman. I appreciate the minister's response in respect to the cheaper cost of supplying large bulk blocks of power, but I don't think that is ~he only criterion to be considered.

The main cost of hydro development is incidental to the initial development - the capital cost of building the dams, clearing the reservoirs, expropriating land and that kind of thing. Once the initial investment is complete and the structure is in place, the cost of maintenance is not a large factor. The cost of transmission and dam structures is usually dictated by the overall energy demand in the province, and certainly that major energy demand is more dictated by large industrial users than the intermittent household user. Therefore to say that it's easier to actually hook up and provide continuous energy to an industrial user is not the whole picture. I think it's an unfair and rather foolish basis upon which to set a pricing policy.

The whole matter of the alarming debt of B.C. Hydro in the area of $4 billion has not been generated through the demand created by population increase in the province of British Columbia. It has been dictated by the need for industrial expansion. When we see only approximately 25 per cent of the total energy generated by that Crown agency used by householders but yet 40 per cent of the revenue to B.C. Hydro supplied by those same individual customers, I suggest to the minister that that's a tremendous discrepancy. It's a discriminatory one and, as in so many other cases under this particular government, directs the load most heavily onto the backs of those who can ill afford to pay for it.

I just want to remind the minister that he was the advocate, Mr. Chairman. That particular minister was the advocate of the user-pay concept on the British Columbia Ferries. He justified the exorbitant rate increases on the B.C. Ferries by a user-pay concept. Well, Mr. Chairman, if he's going to use that criterion, let him be consistent and let the large industrial bulk users of electrical energy in this province pay the real cost of their power needs. Do not transfer that to the backs of the individual homeowners in the province, because that is precisely what is happening. I think the minister is pursuing a double standard in that respect.

Mr. Chairman, I'm not satisfied with the answers

[ Page 2834 ]

the minister gave earlier on the question of water sales from the Columbia River. I come from the interior of British Columbia and I understand pretty well how the river systems in that area flow.

Interjections.

MR. KING: Mr. Chairman, I do not need any instruction from the Minister of Transport in terms of where the sources of those rivers are and where they exit into the ocean. But it's one thing under the Columbia River Treaty, which that minister and his Liberal colleagues of that day were a party to, to store water in Canada under the terms of that treaty for increased power generation downstream and flood control, which were inherent items of the Columbia River Treaty. It ~ is quite another to store water behind the system of dams in the reservoirs in British Columbia and then release that water in a direct water sale for irrigation and domestic use, when in fact that policy means starving our own communities on the perimeter of the downstream reservoirs from a water level that would entitle them to enjoy the recreational potential of the area. That is exactly what's happening.

The minister has a way with words. He makes distinctions between selling water from a source that would not otherwise end up in the United States, but I want to say to him that under the Columbia River Treaty we have an obligation not only to provide flood control and a constant flow for power generation, but we also have an obligation to our own people to maintain the reservoir levels at an optimal level for the use and enjoyment and satisfaction of British Columbians.

The co-operation between British Columbia and the United States is not a one-way street - just because the river flows one way. The minister has an obligation to the citizens of British Columbia - and that's the point.

While the minister may give fairly glib answers in this House, I want to say, Mr. Chairman, that the people who have to live under these circumstances understand the principle very well. They know what is going on, and they are not going to accept that kind of glib response from the minister. Something must be done about it.

MR. BARBER: I can't locate in the estimates book a special allocation for the B.C. Steamships Corporation, and if you've no objection, Mr. Chairman, I will pursue some of those matters now. The minister is responsible for B.C. Steamships.

In particular, of course, I am concerned about the operations of the Princess Marguerite. Since that minister became responsible, we have observed that the Marguerite - at least within its own crewing -has become a distinctly unhappy place to work. I have received numerous phone calls and a few letters from members of the crew and members of the staff of the B.C. Steamships Corporation indicating that staff relations and staff morale are at an all-time low aboard that ship, indicating that there have been cutbacks in services, threats of walkouts by the staff and, I am told, on two occasions walkouts by the staff. I'll get to those in a moment.

I'd like to trace if I may, Mr. Chairman, the history of the deteriorating morale and services aboard the Princess Marguerite and question the minister on why that should be the case. It began, of course, shortly after that minister took office, with his acknowledged threat to sell the Princess Marguerite back to private enterprise.

The minister answered, quite truthfully, in this House during question period that he had indeed met with representatives of private business who were indeed considering making a proposal to purchase the Marguerite - which he indeed was considering selling. Fortunately we were able to persuade the minister not to embark on such a foolish course and the Marguerite, happily, remains in public hands.

However, not content with losing the Marguerite, they then proceeded to lose the manager of the Marguerite, Mr. McHaffie. He was a most excellent man; he was a first-rate administrator; he was a man who as a previous president of the chamber of commerce in Victoria, appointed by our minister responsible, Mr. Williams, had enjoyed the respect and high esteem of the business community in this town and who did an excellent job as the first manager.

We lost the manager of the Princess Marguerite at that time and, sure enough, we see the second step taken toward the diminution of good morale and good service aboard the Princess Marguerite. Indeed, Mr. Chairman, I should like to recall to this House that the manager complained that the new board appointed by that minister appeared to show no interest and no concern whatever for the good operations of the Marguerite. He did point out, and it's to that minister's credit, that the minister himself appeared to be interested, but the board itself appeared to be totally bored by the matter and did nothing at all.

So after they threatened the sale of the Marguerite, after they lost the best manager she ever had, after the manager complained that the board was showing no interest whatever in the operations of the vessel, we then find that they hired spies. The purpose of these spies was to examine the cash registers and to examine the operations on board the Marguerite, especially at the bar, of various of the staff of the Marguerite. It was evidently alleged by the new management of the Marguerite, Mr. Chairman, that members of the staff of the Princess Marguerite could not be trusted to keep their hands

[ Page 2835 ]

out of the cash box.

To the best of my knowledge, Mr. Chairman, no member of the staff has been dismissed for allegedly being unable to keep his hands out of the cash box. To the best of my knowledge the hiring of spies to examine that resulted in nothing at all but the hiring of spies, except in this particular regard: it did result in further loss of staff morale and it did result in the further deterioration of the work place aboard the Princess Marguerite.

They weren't, however, satisfied with this continued degrading of the service and the morale aboard. The next step was to close down the principal restaurant service aboard the Marguerite and to replace it this year with a buffet. I am informed, Mr. Chairman, that the buffet is losing money, that every day they are throwing away pounds and pounds and pounds of good food because the buffet is simply not working. It has detracted from the previous level of service and diminished it. It has allowed the staff aboard to continue to feel that they are being treated very badly and that so are the passengers.

It has allowed us to conclude that this minister may indeed, in an almost deliberate way, be engaging in a course of action which will see the Marguerite become so wholly unprofitable that they will in the near future attempt again to sell the Marguerite back to private enterprise. They replaced the restaurant service with a buffet, it's unpopular with the staff, it's unpopular with the people aboard the Marguerite, it's losing money, and they're throwing food away by the box and the barrel and the pound every day it's in operation.

I'm further informed, Mr. Chairman, that a little while ago the management of the Marguerite attempted to hire three girls as tourist counsellor& The point of this hiring was to place aboard the Marguerite three young women in attractive costumes who, with bright smiles and winsome looks, would proceed to talk to the tourists aboard and offer advice and counsel and direction, all of which sounds very good until it was discovered by the staff aboard the Marguerite that these three girls in question to be hired by the management were not Canadians at all, but Americans from Seattle. They knew nothing at all about our customs, they knew nothing at all about the home port of the Marguerite; all they knew, apparently, was someone who hired them.

The staff rebelled at this absurdity. The staff threatened to walk out, and it was only when the management finally prevailed - at least the more sensible heads of it - and these three girls from Seattle, neither Canadians nor locals in any sense, were told they would probably not be very good tourist counsellors for the Marguerite that we see that that particular plan was not proceeded with, I am informed that the girls were, in fact, hired and were later dismissed.

I have a final question - I am almost through, Mr. Attorney-General - I will proceed with it tomorrow, though. F wonder if the minister might inform us of the per them rate, if any, paid to the members of the board of the B.C. Steamship Company. I wonder if the minister would care to provide that information in the House as soon as possible. I'm advised by the government leader that he wishes to adjourn debate, and accordingly, Mr. Chairman, I move the committee rise, report progress and ask leave to sit again.

Leave granted.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 10:59 p.m.