[ Page 3133 ]

CONTENTS

Statement

Operations of Railwest plant. Hon. Mr. Phillips –– 3133

Mr. Barrett –– 3134

Routine proceedings

Committee of Supply: Ministry of Agriculture estimates.

On vote 93.

Hon. Mr. Hewitt –– 3135

Mr. Cocke –– 3140

Mrs. Jordan –– 3141

Hon. Mr. Hewitt –– 3141

Mr. Stupich –– 3147

Hon. Mr. Hewitt –– 3151

Hon. Mr. Bennett –– 3153

Mr. Stupich –– 3154

Mr. Levi –– 3155

Mrs. Wallace –– 3156

Hon. Mr. McGeer –– 3158

Mr. Cocke –– 3158

Hon. Mr. Hewitt –– 3159

Mrs. Wallace –– 3159

Hon. Mr. Hewitt –– 3161

Point of order

Requirement for tabling of documents by members in the House. Mr. King –– 3162

Division on Mr. Speaker's ruling –– 3164

The House met at 8 p.m.

MR. L.B. KAHL (Esquimalt): It gives me a great deal of pleasure this evening to introduce to the House a number of guests visiting us.

First of all, we have a former member of this House and Minister of Recreation and Travel, Ken Kiernan, who is the executive director of the B.C. Social Credit Party.

My list is quite long and I know the opposition would like to applaud each one; however, I'll ask them to hold their applause until I'm finished, please.

Also present are: the president of the B.C. Social Credit Party, Peter Hyndman; vice-president, Ron Price; president of the W.A., Zonzabelle Sather; Les Keene, representing Region 4, Fraser Valley, and president of the Coquitlam Social Credit Party; Bud Mesher, representing Region 1, Vancouver Island and Mackenzie; Bert Dann, representing Region 2 from the lower mainland; Norm Kelsey, representing Region 3 from the lower mainland; Peter Gook, representing Region 5 from Cariboo-interior; Ron Bellamy, Region 7, representing the north; Louis Steegstra, from Region 8, representing the Kootenays. I'd ask the House to make them welcome.

MR. G.V. LAUK (Vancouver Centre): That's the entire Social Credit Party.

MR. D. BARRETT (Leader of the Opposition): Mr. Speaker, I'd like to take this opportunity to offer my welcome to the Hon. Ken Kiernan, who was a member of this House for almost 20 years, an outstanding MLA and an outstanding cabinet minister. Although there were many hot disputes in this House, Ken Kiernan was one of those MLAs and cabinet ministers who, during his estimates and in all contacts with MLAs, was open and fair. Although we had strong disagreements, Ken Kiernan served this community and this province well and I welcome him here tonight. There's not a Liberal in the group with the rest of them.

MR. N. LEVI (Vancouver-Burrard): It so happens that the 76 members of our provincial council from the NDP are in the gallery. (Laughter.) I won't introduce them. I just wanted to welcome Ron Price, who is the only one I know. He was a very worthy opponent in Vancouver-Burrard. I say welcome.

HON. D.M. PHILLIPS (Minister of Economic Development): Mr. Speaker, I ask leave of the House to make a statement regarding Railwest and another matter.

Leave granted.

OPERATIONS OF RAILWEST PLANT

HON. MR. PHILLIPS: The situation at the Railwest railcar manufacturing plant is well known to all British Columbians. It's another economic disaster of the previous administration.

SOME HON. MEMBERS: Oh, oh!

HON. MR. PHILLIPS: I spent the day, Mr. Chairman, with the new board of directors of the British Columbia Railway. I

AN HON. MEMBER: You're an economic disaster.

MR. L. NICOLSON (Nelson-Creston): You're a disaster in your own time.

Interjections.

MR. SPEAKER: Order, please!

[Mr. Speaker rises.]

MR. SPEAKER: It's a tradition of this House, and I hope that all members will respect that tradition, to allow a member to speak once leave is granted to make a statement, whether that be to a member of the cabinet benches or to any other member of the House. It is to be hoped that that tradition will be respected by the members of this House and leave, once granted, will be observed while the member of this Legislature makes that statement.

[Mr. Speaker resumes his seat.]

HON. MR. PHILLIPS: Thank you very much, Mr. Speaker. As I was saying, I spent the day with the new board of directors of the British Columbia Railway and I determined today that they have explored every possible avenue that has been given to them to obtain an order for new car manufacturing from the federal government, from the CNR, from the BCR, and from certain other leads that I have passed to them. I have also determined today that certainly the government has done everything possible to explore the possibility of obtaining an order for Railwest cars.

However, I must say that certain politicians from Ottawa have been prevalent in British Columbia of recent months and of recent weeks, making certain statements about the availability of an order for the manufacture of cars at Railwest. Neither the British Columbia government nor the board of directors - I might say the good, very conscientious board of directors of that railway - have been able to pin these orders down. Matters have certainly reached the point, Mr. Speaker, where, if orders are not received

[ Page 3134 ]

in the immediate future, there will be no alternative but to close the rail plant down.

it is with this situation in mind that I intend to leave tomorrow for Ottawa to meet with members of the government to impress upon them the need for federal assistance. No, Mr. Speaker, I think "assistance" is probably the wrong word. I think what we must impress on the federal government is for some attention to the problems that we have in British Columbia. Indeed, I am convinced that, were these problems prevalent in other provinces in Canada, they would have received attention from the federal government long before this.

A carrot of a 300-car manufacturing order has been dangled in front of British Columbians for some months now. I say that this and other promises of railcar manufacturing contracts have been a carrot dangled in front of all of us. I want to find out once and for all, Mr. Speaker, if there is any substance in this carrot of 300 hopper cars or 300 ballast cars or, indeed, the carrot of 1,000 refrigerator cars, which was also dangled in front of British Columbians recently. Or is this just another federal mirage, like so many others that have been promised us in the west?

When I leave tomorrow for Ottawa, I will have with me three people who will be able to explain to federal officials the true situation and, indeed, the capabilities of that Railwest plant in Squamish. They are: the manager of the Railwest plant, Mr. Jim Lyon; the general chairman of the Brotherhood of Railway Carmen, Mr. Stan Hordyski - this union is one of two unions represented at the plant; and the mayor of Squamish.

While I am in Ottawa, Mr. Speaker, I also plan to discuss with federal officials the plight of employees of Queen Charlotte Fisheries Ltd., whose firm is threatened with a closure. This government has explored ways of helping this firm in order that it can remain in operation through the 1977 fishing season. In fact, the British Columbia Development Corporation executive board was meeting all day today. I had a meeting with them at 5 o'clock this evening, after I had left the meeting of the B.C. Rail board of directors. I anticipate hearing from them in the very near future of a firm offer they will make the owners of that plant.

I might say, Mr. Speaker, that this trip would be unnecessary on both counts if members of the federal government paid more attention to the needs of British Columbia.

MR. BARRETT: Mr. Speaker, under most circumstances, I would normally welcome the statement from the minister. But I can't really say that I am impressed, either by the content or the attitude in making this statement.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: If the minister is to go to Ottawa in response to a "dangling" of a car order, hostility and threatening statements prior to leaving serve no useful purpose in an attempt to co-operate between this government and Ottawa.

Mr. Speaker, an attempt to blame Ottawa before arriving there does not serve the interests of the people of this province, who now must rely on two elected governments - one in Ottawa and one in British Columbia - to deal with the lagging economy in this province. This present government has not found itself able in the past 12 months to make a single move on its own to effectively regenerate that railway.

SOME HON. MEMBERS: Nonsense! Hogwash!

MR. BARRETT: Mr. Speaker, in response to the minister's statement, I must point out to the citizens of this province that this mess now in Railwest has been preceded by a B.C. royal commission that has not yet found who was to blame for the massive losses on the Fort Nelson extension ordered by the previous Social Credit administration. Who was it that ordered the MEL Paving settlement that has cost the taxpayers of this province millions of dollars, related to the railway? And further, Mr. Speaker, related to Railwest, there is still no announcement on northeast coal, where Railwest was supposed to support that development by thousands of railcars.

HON. MR. PHILLIPS: You want to close it down!

MR. BARRETT: That could have been established and it is now in jeopardy because the CNR has outfoxed this government and has the running rights; they have the need for the cars, not B.C. Rail.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: Mr. Speaker, I would ask the minister to also stand up and explain to this House why B.C. Rail is leasing cars instead of building them here in British Columbia, when that loss is 10 per cent.

HON. MR. PHILLIPS: Who needs the cars?

MR. BARRETT: Mr. Speaker, I also want the minister to explain to this House why it is -government policy to allow a 10 per cent leeway on B.C. bids for the purchase of goods when, if that 10 per cent leeway was allowed, all the cars necessary for B.C. Rail could be built with that 10 per cent leeway that is allegedly the policy of that government.

Mr Speaker, for the first time in my memory in this House, when a statement is made about a visit to

[ Page 3135 ]

Ottawa, it is preceded by grandstanding on a hollow, flimsy attempt by this government that has left the responsibility for developing Railwest to its dying moments and then attempting to tell the people of this province that it's going to rescue it by going to Ottawa.

SOME HON. MEMBERS: Unbelievable!

MR. BARRETT: Mr. Speaker, I find the minister's performance regrettable to say the best and shameful to say the least. There's no question in my mind that this is nothing more than a political smokescreen to protect the Premier who promised to go and visit those workers months ago, and an attempt to stop the people of British Columbia for laying the blame where it truly rests - and that's with that do-nothing administration over there.

HON. MR. PHILLIPS: Great coverup, Davie, but it won't do. The facts will out.

Orders of the day.

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

ESTIMATES: MINISTRY OF AGRICULTURE

(continued)

On -vote 93: $85, 9S2, minister's office -continued.

HON. J.J. HEWITT (Minister of Agriculture): Mr. Chairman, just before we adjourned for supper there were a few remarks made by the member for Vancouver-Burrard (Mr. Levi) concerning an outfit called Swan Valley. I just thought over the supper hour that I should put something together to give you some idea about the story of famous Swan Valley. So if you'd like to relax, Mr. Chairman and members of the assembly, we'll be here a while, because this is a story second to none in the province of British Columbia.

HON. W.R. BENNETT (Premier): Norm has 100 stories like it.

HON. MR. HEWITT: And so the hon. member and the rest of the opposition may well get their pencils working, because I'm sure by the time you hear this story....

Interjections.

HON. MR. HEWITT: Well, Mr. Chairman, I think before we're through they'll probably all be back.

The history of Swan Valley. The original intent and the start of Swan Valley is something good, something interesting, something very worthwhile. Local businessmen and farmers in Creston Valley got together and decided that they should have a secondary industry for the agricultural production in the Creston Valley area. And they originally were looking at a frozen french-fries processing plant. They went into that endeavour, looked at it, researched it, spent a considerable amount of money on it. As a matter of fact, in 1971 McDonald Research Associates Ltd. produced a report on the feasibility of frozen french-fries production for the Creston Valley farmers as a secondary industry. I may say that that report cost $40,000. The fact is that they came up with a conclusion on the report. There was some concept to proceed and go ahead.

But in the meantime it came to the farmers' information that there was an opportunity to go into a new concept called the "pouch-pack, " where by retorting potatoes you can achieve a non-frozen product that could have upwards of a year or two years of shelf life. It looked like it had a good competitive advantage at that time.

I would like to say, Mr. Chairman, before I get into the sordid history of Swan Valley, there was a dedicated effort of the people who originally started it. They worked hard and they did their research. Also for the information of the member for New Westminster (Mr. Cocke) , who's not here, Dr. Powrie from UBC research staff.... That name probably rings a bell to the Minister of the Environment (Hon. Mr. Nielsen) . He's the man that that member for New Westminster has been criticizing so much - and I'm glad he's back in the House - because of his stand and his comments and his reports on the 2, 4-D committee. He was the same man that entered into an agreement with the originators of the Swan Valley Foods, and researched and developed the pouch-pack concept. Yet the members over there now, of course, attack the same good doctor. And that member over there from New Westminster was on the cabinet at the time when all the money was paid out on Swan Valley.

Two standards, Mr. Chairman - one when it's politically to his advantage to do a little bit of acting-, but then when he was on cabinet and was in the position to give some control and guidance to this company, he reneged. As a result millions of dollars were spent.

So in 1971 McDonald Research Associates carried out their study and then they proceeded on. The research was done by Dr. Powrie on the pouch-pack and a pilot project was started.

Then we came into the grand plan. In April, 1974, the government of B.C. got involved and, boy, they got involved. Here we have it. On April 11,1974: "Government to Pay $50,000 for AgriBusiness Shares." And it says here: "A cabinet order released

[ Page 3136 ]

Wednesday also said that the government will guarantee a $2.5 million loan to complete a $4.5 million financing of this operation of Swan Valley Foods." Remember the figure, hon. members - $4.5 million to finance Swan Valley Foods. And then it said: "The government will have the right to place members on the board of directors and will control further borrowing by the company."

Well, Mr. Chairman, it was the start of a long trail. There was lack of planning, there was lack of control, and there wasn't any feedback at all. No feasibility studies. The original order-in-council was dated May 5 and....

Pardon me, I'll go back to the first one. There are a lot of them here. April, 1974: $2.5 million. Well, it says:

"Whereas the Minister of Agriculture, pursuant to the terms and conditions of an agreement, a copy of which is annexed hereto, proposes to invest in shares of Swan Valley Foods Ltd.;

"And whereas the Minister of Agriculture, pursuant to the terms and conditions of an agreement, debenture and guarantee, a copy of each is attached hereto, proposes to guarantee repayment of a loan by Canada Permanent Trust to Swan Valley Foods Ltd.;

"Approval is given to the Minister of Agriculture to purchase 22,021 common shares of Swan Valley Foods Ltd. at the price of $1.743 per share, and 4,712 preferred shares of Swan Valley Foods Ltd. at a price of $2.50 per share, according to the terms and conditions of an agreement, a copy of which is annexed hereto;

"And, further, approval is given to the Minister of Agriculture to guarantee repayment of a loan of $2.5 million by Canada Permanent Trust to Swan Valley Foods, according to the terms and conditions of an agreement debenture and guarantee, a copy of which is annexed hereto."

AN HON. MEMBER: Who signed it?

HON. MR. HEWITT: Well, the signatures are David Stupich, Minister of Agriculture, and D. Barrett, presiding member of the executive council.

AN HON. MEMBER: It was $2.5 million.

HON. MR. HEWITT: That is the start: $2.5 million. Then we arrive at January 15,1975. I won't read the "whereases." I think we now know we're on the road....

AN HON. MEMBER: We're picking up speed.

HON. MR. HEWITT: We're picking up speed and, oh, how we ran.

"Approval is given to the Minister of Agriculture to guarantee repayment of a loan of $2.5 million by Canada Permanent Trust to Swan Valley Foods Ltd., according to the terms and conditions of an agreement, debenture and guarantee, substantially the same as in form of the agreement, debenture and guarantee annexed hereto."

We are now at $5 million, plus the shared capital investment which gave them the control. Do you remember the control that they wanted to have and the feedback and the information?

Signed by Stupich and signed by Barrett. I'm sorry, Mr. Chairman, maybe I should not use those names. I don't know if that's in order.

We're now at $5 million. July 3,1975:

"Pursuant to the Farm Products Industry Improvement Act and upon the recommendation of the undersigned, the Lieutenant-Governor, by and with the advice and consent of the executive council, orders that:

"Approval be given to the Minister of Agriculture to guarantee repayment of principal and interest under two floating charge debentures in the amount of $1 million and $1.5 million from Swan Valley Foods Ltd. to Canada Permanent Trust in accordance with the terms and conditions of an agreement substantially in form of the agreement attached hereto."

Signed by Stupich and Barrett. We're now at $7.5 million, hon. members.

HON. MR. BENNETT: Whose money, Jim?

HON. MR. HEWITT: The people's money, Mr. Member. You'll recall in April of 1974 it was stated that it was a $4.5 million project. We're now up to $7.5 million, and we're only in August of 1975.

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): A sinking fund on a sinking ship. (Laughter.)

HON. MR. HEWITT: Now we're at $7.5 million. We're not finished yet - don't go away.

Interjection.

MR. CHAIRMAN: Order, please, hon. members. The Minister of Agriculture is making a speech.

HON. MR. HEWITT: Thank you, Mr. Chairman. I think it will go down in history, as it's been mentioned in the news release I made at one time.

[ Page 3137 ]

This is Bricklin of B.C. we're talking about and nothing else. The Bricklin of B.C. - a shocking display of ineptitude, inadequacy, ignorance, stupidity. Shocking!

Interjection.

HON. MR. HEWITT: You're going to hear it. If you sit quiet I'll talk all night, because this one is going to go down forever and a day as the efforts of a government that never paid any attention to the people who worked for it, to the consultants who gave you the reports.... And I suggest that the former Minister of Agriculture, when I'm through, will stand up and have to agree to some of the things I'm going to say.

HON. MR. BENNETT: Apologize to the people!

HON. MR. HEWITT: In August, 1975, we're at $7.5 million.

"Whereas the Minister of Agriculture proposes to lend to Swan Valley Foods"

He's not guaranteeing any more; we're now lending. "a sum of $2 million pursuant to the terms and conditions and agreement in debenture substantiating the form of the agreement and the debenture next year too, approval will be given to the Minister of Agriculture to lend to Swan Valley Foods Ltd. the sum of $2 million in accordance with the terms and conditions of an agreement and a debenture substantiating the form of the agreement and debenture in text hereto."

This was signed by Stupich and Barrett.

We're now at $9.5 million. I want, hon. members, to remember the date of this $2 million loan - it was August 28,1975 - because I'll come back to that. At that time, I should also mention, the government got involved a little deeper. They weren't satisfied with 10 per cent of the share capital, which gave them somebody on the board to report back. They are now going into it for 40 per cent on the same day approval was given to the Minister of Agriculture to purchase 197,783 common shares of Swan Valley Foods at a price of $1.60 per share and 23,554 preferred shares of Swan Valley Foods at a price of $2.50 a share.

Mr. Chairman, that totals up at this particular point in time to a $7.5 million guarantee, a $2 million loan and $425,501 in shares. That comes pretty close, I think, to $10 million.

HON. MR. BENNETT: They bought those shares after the company was in trouble?

HON. MR. HEWITT: Well, I don't think they knew it was in trouble, Mr. Premier. That's the problem and that's why we're here today.

But there was nothing on record, Mr. Chairman. When I came into office the hon. Minister of Economic Development (Hon. Mr. Phillips) was kind enough to hand me this file. I'll never forgive him! There is nothing in the file and nothing on record to indicate the government's concern about this ever-increasing debt. The figure we started with was $4.5 million in April, 1974. We're now in the middle of 1975 and we're up to $9.5 million. Still, nobody is concerned about the effect of that debt load on the viability of this company. If I can just spot them here, on the first debenture that they guaranteed, April 9,1974, the interest rate was 9 per cent; in January, 1975, the interest rate was 11 per cent; and in July, 1975, the interest rate was 10.25 per cent. These were 20-year debentures. So the price was pretty high. But there is nothing to give an indication as to the concern....

AN HON. MEMBER: How many potatoes?

HON. MR. HEWITT: No potatoes yet! Still no potatoes!

But we can't find anything on record of a feasibility study on the pouch-pack concept. I have the feasibility study on the frozen french-fry- plant, but we can't really find anything that updates the concept as to the continuing increase in the costs of this company. There is no financial analysis with regard to that debt load that keeps coming up. So we run into a situation that in July, 1975 - and I told you to remember the date of August, 1975, for the $2 million loan - Woods Gordon was commissioned to carry out a report to find out just what is the state of the nation. That was the first effort that was made by the minister to find out just what was happening.

Then again, I'm not sure whether the minister did concern himself, because I have the report here and the report is not to the minister. The report is to the deputy minister who maybe got concerned enough to suggest he carry out a report to find out just where they were going with this programme. That report of July was completed in August, but at the same time, in August, there was a $2 million loan given to that company. I'll ask the former Minister of Agriculture when he gets up, because I'm sure he'll speak on it, whether or not he saw the report before he agreed to issue the $2 million direct loan.

HON. MR. MAIR: And if not, why not?

HON. MR. HEWITT: I can tell you he didn't see it, Mr. Minister, but "if not, why not?" is a good question to ask. Because this company is now in serious financial difficulty, I've got to tell you.

MR. R.L. LOEWEN (Burnaby-Edmonds): Still no potatoes?

[ Page 3138 ]

HON. MR. HEWITT: Still no potatoes.

HON. E.M. WOLFE (Minister of Finance): Better give them another $4 million!

HON. MR. HEWITT: Well, we have those problems too. I want to go into the report itself. This report was completed in August and is now ready to go to the minister.

Oh, maybe I should go back to the debentures. The debentures are more interesting. This is a government-guaranteed debenture, but I want to know that McDonald and Associates received a 5 per cent commission on a $2.5 million debenture - the one that was issued in 1974. They received 5 per cent on $2.5 million. Somebody can calculate that out - a $125,000 commission to a man who is placing a government-guaranteed debenture with a trust company.

AN HON. MEMBER: Oh, that's tough work, isn't it?

HON. MR. HEWITT: I'm not through yet. I wouldn't really be too concerned about that on the first go-around. I'm sure he did - and I think the record will indicate - explore various avenues of financing, but then it finally came to the government and they went along with it. So he got his 5 per cent; I must say that the board of directors of Swan Valley agreed to the 5 per cent commission. So nothing is illegal or of any great concern.

However, once the government got involved you would think they would say: "Now wait a minute! Five per cent on $2.5 million - the second $2.5 million - is a little expensive, isn't it?" This is a government-guaranteed issue. You're just going back to Canada Permanent for the second time around and surely you wouldn't pay him the $125,000 commission on the second debenture.

AN HON. MEMBER: Did they do that?

HON. MR. HEWITT: Oh, they did! Another $125,000, for what? The man just walked across and said, "hey, I got another government guarantee, " and another $125,000 comes at him. That's not bad. He's in business, and I certainly don't hold that against McDonald and Associates; that's part of their job.

Now let's go on to No. 3. We're now at July 3,1975 - a $2.5 million debenture. The first one you could see the $125,000; the second was shocking. But you'd think....

AN HON. MEMBER: They didn't do it again!

HON. MR. HEWITT: They did it again!

SOME HON. MEMBERS: Oh, no!

HON. MR. HEWITT: The third debenture is for $2.5 million and they paid another $125,000 commission. This $375,000 went to commissions -on what? Government-guaranteed bonds.

HON. MR. PHILLIPS: They ripped off the previous Minister of Agriculture.

HON. MR. HEWITT: Well, I don't know whether they ripped him off, Mr. Minister. I'd love to be able to perform like the former Premier of this province because I could go through an act here tonight that I m sure would go down in history, but I don't have his expertise. I just want to get the facts across.

Now on top of that, McDonald and Associates got $5,000 a month as a consultant. On top of that Hugh McDonald of McDonald and Associates was a director of the company. I don't know whether you could construe that as conflict of interest. I'm not suggesting there was. All I'm suggesting is that here's a government that's getting involved in guarantees, and yet there is no control.

I want to tell you, Mr. Former Minister of Agriculture, that Mr. McDonald, who was a director, who was a consultant, who was the finder who placed the issues with Canada Permanent Trust, never met with that former Minister of Agriculture, never talked to him - not once. He never saw him. The minister couldn't care less. I can tell you since I've been minister, Mr. Member for Nanaimo, that I've met with Mr. McDonald, and got the input from Mr. McDonald, and asked him what the situation was, and he was fairly straightforward and fairly open. But that former minister never met the man who was placing these issues, never met with the man who was consultant for the firm, never met with the man who was on the board of directors. He probably doesn't even know who he is now.

Interjection.

HON. MR. HEWITT: No, I'm sorry, I don't have to. I asked the man himself. I asked Mr. Hugh McDonald whether or not you ever discussed the matter with him and he said no.

The Woods Gordon report was suggested by staff. It was taken under consultation in July, 1975. The report of Woods Gordon is dated August, 1975, yet a $2 million direct loan to this company was granted on August 28,1975. It was filed on September 3,1975, order-in-council No. 2756. The question is, Mr. Member: why didn't the Minister of Agriculture review the Woods Gordon report before lending the $2 million when you knew there was a report being carried out? When you were concerned about that report, why didn't you wait? Why didn't you read it? It was there, ready for you.

[ Page 3139 ]

HON. MR. PHILLIPS: Didn't he say he hoped it wouldn't be true?

HON. MR. HEWITT: Well, I'm getting to that. There was no idea of the situation, as far as I'm concerned. A decision was made without supporting information. That cabinet of that government got around the table and somebody said, "I think we should lend it, " and somebody else said: "That's fine, I think we should, too." There was a bottomless pit in the treasury so they just shovelled it out.

AN HON. MEMBER: Any potatoes yet?

HON. MR. HEWITT: No potatoes yet. Now I want to read from the report because I think it's going to be rather interesting:

"The company has received financing from Canada Permanent Trust Company, guaranteed by the B.C. Department of Agriculture to the extent of $7, 5 million. A portion of these funds was used to finance the research and development of the technology. The support of this research was crucial to the success of the programme and represents, in our view, an astute investment on the part of the department.

"The remaining funds have been used to finance the construction and equipping of two plants, one of which will produce prepared entrees for the retail market, the other to produce French-fried potatoes for the food service industry.

"The future direction - there are two general directions that the directors could consider: hire the necessary management and marketing skills to proceed to develop the Canadian export markets for Swan Valley Products, as well as a licensing programme. Thus the company would become not only a technology company, but also a marketing production company."

I want to tell you that Hugh McDonald of McDonald and Associates said just about the same thing.

On the projections that Woods Gordon came out with, it said:

"We have developed projections of operating results separately from each of the company's three major activities. These include the agricultural operation at Creston, the processing plant at Creston and the processing plant at Richmond. Our estimates of sales volume have been developed from our estimates of the company's potential markets. These are not conservative sales forecasts, but ones which can only be achieved with an active and successful marketing plan."

I would suggest that there was no plan, or very little plan; a very amateurish plan.

"The Creston plant - we have assumed that the company will recover about I I million pounds of saleable product in the year 1975. Of this we estimate only about one million pounds, or 10 per cent of production, can be sold in Canada between the plant's production start-up in August, 1976.... We have documented this estimate in pages 14 to 17 of the report. This means that the balance of the production - 90 per cent - if processed would have to be sold on the export market. This is a major marketing task and one we are not yet certain can be successfully carried out."

This is to meet their costs of production to at least break even, and what happens? In this report which that former minister never read, it tells him here that consultants aren't even certain whether they can reach those figures.

AN HON. MEMBER: What did Phillips do about it?

HON. MR. HEWITT: Well, we'll get to that, Mr. Member. You've got lots of time; we'll get to it.

Interjections.

MR. CHAIRMAN: Order, please! Every member wishing to speak should rise in his place and be recognized by the Chair.

HON. MR. HEWITT: It says here:

"If the export market cannot be developed to the extent needed in these three years, which are the three years from production, the plant losses will increase substantially. To obtain these volumes, the company would require distribution of the four western provinces in the first year and all provinces in the second year. With these volumes, the products would not only have to displace a significant portion of canned and frozen products, but would also have to attract many new entree users.

"We do not foresee the company showing a profit from its Canadian operations within the next three years and likely longer."

Now get this, we're into it for $7.S million, $2 million, $0.5 million share equity. Here are the major findings: "The company requires about $4.2 million more to finance its operation for the next year until August, 1976." Do you remember somebody saying, when we had the discussion about Swan Valley, how close they were? Here is a consultant who was commissioned by the NDP, a consultant who had his report ready for the Minister of Agriculture, a consultant who says, "Mr. Minister, you're going to need $4.2 million more, " but nobody looks at it.

[ Page 3140 ]

Now that's till August, 1976. "An additional $1 million to finance operating losses in its second year and a further $800,000 for the third year." We're talking $6 million more and you're only into it for almost $10 million. What's another $6 million? You never read the report, Mr. Minister. That's what floors me.

MR. G.H. KERSTER (Coquitlam): He doesn't like potatoes.

HON. MR. HEWITT: "The company's management is not now sufficiently experienced or has it the skills necessary to successfully market the products in Canada. It must build a necessary team of people in an extremely short period of time." And that's just to meet those losses. If it didn't do that, it could get worse.

"The company's operating and accounting systems are not adequate to the company's needs even today." That's the next major finding. "As far as we can determine, the necessary systems are not yet in place to monitor or control both the production and the marketing operations of the company." That's in a report dated August, 1975, that should have given an indication to the government of the day why we are putting another $2 million in. But they didn't look at it.

The fourth major finding:

"The company has developed no marketing plans for french fries produced by the Creston plant. The marketing work for the line of entrees, in our opinion, is amateurish and incomplete."

Interjection.

HON. MR. HEWITT: That's right. This is the company that's just about there and is going to make it. I'm surprised at the member for Nelson-Creston (Mr. Nicolson) - you know, the concern about Swan Valley Foods, et cetera. I imagine you never saw this report either. You wouldn't even know this report.

MR. NICOLSON: What is the date of the report?

HON. MR. HEWITT: The date of the report is August, 1975. It was commissioned in July, 1975, by the deputy minister and I'm sure that the minister was well aware of it.

AN HON. MEMBER: It was about 15 or 16 months after the mess started.

HON. MR. HEWITT: That's right.

The company has applied to both Traders and IAC to lease approximately $1 million in production equipment to be installed in this plant. These two firms have turned down the company's application.

MR. CHAIRMAN: One minute.

HON. MR. HEWITT: Don't I have unlimited time? I could go on for hours. Maybe I'll get another kick at the cat.

Here are the systems:

"The management is still not in control of the company's systems and, as a result, will begin to operate without vital up-to-date information. For instance, a complete balance sheet could not be put together during our study without incurring a considerable additional cost to reconstruct the necessary transactions."

Now you're an accountant, Mr. Former Minister of Agriculture (Mr. Stupich) . You know about balance sheets. You know about profit-and-loss statements: "The company did not know it lost money on its 1974 potato crop until June of 1975." They're trying to point out here that the controls weren't there and the controls weren't sufficient.

I could read a number of these other items in regard to the lack of control, but I would just like to say one or two other items since I'm running out of time.

AN HON. MEMBER: Table them.

HON. MR. HEWITT: Oh, I will. I've got lots more here. "We have found that the company estimated their sales volume based on rated plant capacity." That's the capacity of a plant when you've got two shifts going. "As a result, the sales volumes have been seriously overstated." So all the thoughts of where they were going to go and how they were going to sell this product were all overstated.

"At the same time, the extent and cost of marketing effort required to obtain these volumes has been understated. The marketing plans have not been developed for any export markets for the Creston product. Since the development of the Canadian market for french fries will require a great deal of sales effort, most of the production of the Creston plant will have to be sold on the export market, and you know the expertise that is required there." Mr. Chairman, I would be quite happy to take my place and I'll carry on with this at the first opportunity.

AN HON. MEMBER: To be continued.

MR. D.G. COCKE (New Westminster): On a point of order, Mr. Chairman, this has nothing to do with the Swan Valley thing. The minister, who appears to be a stranger to the truth. . . .

[ Page 3141 ]

Interjections.

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

MR. COCKE: Okay, then I'll say he is a stranger to the truth.

MR. CHAIRMAN: Order, please, hon. member. The member has been a member of this House long enough to understand that we can't use that kind of phraseology. In that knowledge, I ask you to withdraw.

MR. COCKE: Withdraw what - that the minister was lying?

MR. CHAIRMAN: Yes.

MR. COCKE: Yes, I withdraw.

It's unfortunate, however, that the minister seems to misunderstand or do something with situations that he should know very clearly. That is the one concerning Dr Powrie.

MRS. P.J. JORDAN (North Okanagan): What's your point of order?

MR. COCKE: I'm correcting a statement.

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

MR. COCKE: I have the right to stand here and correct a statement proposed by an hon. member, or minister, or whatever, of this House. Mr. Chairman, on that basis, I suggest that Powrie opposed - get this straight - the utilization of 2, 4-D in beach areas. He did not support what the Minister of Pollution is doing right now.

HON. MR. HEWITT: Have you read the report -the three of them? Have you talked to Powrie?

MR. COCKE: Yes, I read the report and I quote from the report. He opposed it.

MR. CHAIRMAN: Order, please, hon. members. For the clarification of the House, if a statement is made which is deemed to be in error, then that error can be corrected by any member of the House by standing at the conclusion of the speech - which, by the way, the member for New Westminster did. He waited until the speech was concluded and then made the correction. That correction then should be made without interruption from any other members.

MR. D.D. STUPICH (Nanaimo): On a point of order, Mr. Chairman, if we could have some indication as to just how much longer the minister's press release is, I'm sure we, on this side of the House, would give him leave to continue in order to hear the balance of his presentation.

MR. CHAIRMAN: Hon. members, standing order 45 provides distinctly that 30 minutes is the limit for each speech to be made, and the committee does not have the power to grant leave. Therefore the Chair is bound. An intervening speech would perhaps be considered to be intervening business.

MRS. JORDAN: Mr. Chairman, I really hadn't intended to speak under the minister's estimates at this time, but I must confess that this is the first time, as the member elected for the North Okanagan and an agricultural area, that I've heard the incredible story we've heard part of this evening. I consider this a very significant statement that the minister is making and of great importance to the people of British Columbia. I believe we were up to something like $10 million $7 million spent and another $6 million projected of taxpayers' money from the province of British Columbia. It may not be of great interest to the member for Nanaimo's (Mr. Stupich's) constituents, but I assure you it's of great interest to a number of constituents around this province.

I would like to ask the minister some questions. The first is: in his review, did he find any studies that had been done in relation to competing products from other countries, such as the American market or a European market? If so, was there a comparison done of the cost of production of the Swan Valley products here? I recognize there is a difference in the process; nonetheless, I assume that there would be an analysis of whom that new process would be competing with.

The second question that I'd like to ask is: have there been any studies done as to a potential market offshore - in the United States, in Europe or in Japan? Has there been any analysis done within the province of British Columbia, particularly in the area of frozen potato chip production, as to whether or not this company, which was totally financed by tax dollars, would be in competition with the privately owned company within our own province that was financed by small entrepreneurs?

Perhaps the minister would deal with these questions, and then I would be asking some more.

HON. MR. HEWITT: Well, to the member for North Okanagan: I have a multitude of reports to say that competing products - offshore products or products from the United States - are there. But it's probably the competition from the frozen french fries market. I believe that the total consumption of frozen french fries or processed potatoes in B.C. was 25 million pounds per annum. That is served by a

[ Page 3142 ]

number of processed potato chip plants in Canada, coming out from the east and in B.C. itself.

Anyway, out of the 25 million pounds, some 17 million pounds are institutional and commercial consumption; and about another seven million or eight million pounds are retail. The interesting thing about the pouch-pack concept is that basically it couldn't be used for retail sale. It requires deep fryer to finish the cooking process. As a result, of course, it didn't touch the frozen french fries at the retail level.

Yes, there were efforts to license off shore. McDonald and Associates were looking at licensing fees in order that they could recoup some of the cost for their technology. Mr Hugh McDonald, when I talked to him, was suggesting that to the board. McDonald and Associates parted company from the board of directors of Swan Valley; they couldn't come to an agreement on how they were going to manage this licensing.

Competition with the private sector. Yes, that's something that they would be doing with the 40 per cent equity by the government; we'd have a company in competition. But I don't think that would be too much of a problem, as it was. It's just that the thing couldn't be competitive. The reason it couldn't be competitive was that it had a debt load of $9.5 million sitting on top of it, just forcing it down, down, down. As a result, the unit cost of production for every pound of potatoes was just escalating right out of any possible change of this thing becoming viable. You know what the cost of financing $9.5 million is. I think the interest cost alone in that company is $2,000 a day. That's interest cost alone. Never mind the overhead; never mind the labour costs; never mind the material costs - $2,000 a day just to cover interest.

Now we got the Woods Gordon report; it was never looked at. An additional $2 million was loaned out and we don't know why the minister didn't review the Woods Gordon report. I sincerely think that nobody in that cabinet or in that government had any idea of the situation and how bad it was getting. But then, finally, we got into the situation, if I can just find it here.... Here we are - on October 1,1975, a memo went from the Minister of Agriculture to the deputy minister: "I have just read your memo dated September 24 and it reminds me I have not yet seen a copy of the Woods Gordon report. Perhaps a further comment on the report under separate cover you offered in your memo would suffice." Now that one is September 24, so we're getting close to a little bit of concern here because I imagine that by this time they were going a little farther down the road and the $9.5 million was not going to be enough. It appeared that way.

October 20,1975 - here's where we come to the crux of it; here's where we come to the great remarks that were made by the former Minister of Agriculture

(Mr. Stupich) and the Premier (Mr. Barrett) of this province, saying: "Isn't it terrible what the Social Credit Party has done to this company that was just there, eh?" Over the top, we're going to make it! Only give us several million dollars, and we're going to make it. Here it is, dated October 20,1975, from the minister to the deputy: "The Woods Gordon and Co. report on Swan Valley Foods frightens me. I would like it to be proven wrong."

AN HON. MEMBER: Rewrite history?

HON. MR. HEWITT: Rewrite history.

"I gather this 'would mean more product would have to be processed and sold, and the launch stage should not be long delayed. I know we are not delaying it on purpose. I noticed on the report that the Richmond product launch was expected to be in October and is now postponed to November, and I wonder when it will really happen.

"If you want the report returned I will do so, but I will photocopy a few pages for my own information. Let me know. It frightens me.

It's signed by Dave Stupich, Minister of Agriculture. "It frightens me."

Now I think that's an indication to the people of this province that sometimes what is in the press is political - just sometimes - but there's fact signed by the man who's responsible for this great adventure. We're $10 million into this thing. But now we're down to the crunch. Here's the next one: November 29,1975. The Financial Post comes out with an article, and it says: "Swan Valley's Entree - Packaged Food in a Pouch." And the opening line is this - and you wonder where I got the Bricklin of B.C., hon. members. First line: " 'This is not another Bricklin, ' says David Stupich. 'We don't have Bricklins in British Columbia.' "

AN HON. MEMBER: Oh, oh!

HON. MR. HEWITT: Then we come along to the second to last paragraph. He's commenting on the Woods Gordon report.

HON. MR. BENNETT: You can't get out of it.

MR. STUPICH: Don't leave.

HON. MR. HEWITT: He's commenting on the Woods Gordon report, and the question is asked:

"Does the report give any cause for concern?

" 'I don't think so, ' says Stupich. 'I didn't read anything like that into it, but I wouldn't say that somebody else studying the report

[ Page 3143 ]

couldn't read doubts into it.'

Well, hon. members, a month before that he sends a memo saying: "It frightens me. I want it proven wrong." Then he has the nerve to get up and say to a reporter: "No, I don't think there's any problem with Swan Valley Foods." Now something's wrong.

I must touch on this. I'd like the former Minister of Agriculture to answer this question for me: did the former Minister of Agriculture ever talk to Mr. Roy Steel of Woods Gordon and Co. regarding the findings in this report? I can tell you, hon. member, that the answer is no. You never discussed it with Woods Gordon. Your staff did, but you never had a meeting with Roy Steel, the man who was responsible for writing the report.

Shocking at this particular point in time! The. Financial Post's article, I'd say, misleads the people. The fact is that we've got the letter, we've got the memo to the deputy, we've got the article in the Financial Post. But on top of that we've got a letter from a professor of food sciences at the University of Alberta which was received late in 1975. It basically said: do you really know what you're getting into? The pouch-pack concept isn't that unique, you know. In 1971 when McDonald got involved, they had a competitive advantage. But by this time things were closing down. There is a lot of expertise and a lot of development coming into the pouch-pack concept -the non-frozen process vegetable concept.

So here we are at a situation where we're into this thing by $10 million, and where are we going? Nobody seems to know. If they had read the report, they would have known the markets were almost impossible to obtain. They would have known the administration was inadequate; it was out of control. They would have known that with the cost of the debt load of those debentures and loans there was a serious problem.

I would tell you that Mr. Hugh McDonald of McDonald and Associates had his problems with the board of Swan Valley Foods for those very reasons. He recognized that the costs that were going from this $4.5 million enterprise to $10 million enterprise - still not completed, still not producing potatoes -were going to be excessive and he was concerned and was trying to get them to move into foreign markets.

So, Mr. Chairman, that's something of the story of Swan Valley to this point. I haven't finished yet; I'm just getting warmed up. But the thing is that we've salient points out of the Woods Gordon report. Granted, we had strikes during that time for construction; we had some equipment delays. But the salient point of the Woods Gordon report which I quote was really basically this:

"With an investment of $7.5 million, it is evident that the ministry should continue its support in order to work out its original loans. Such support should only be made upon the assurance that the company will obtain management and marketing strength to control the need for future funds."

Now that's what they said to you, but you never read the report. You didn't put anything into practice. "We believe the company has good technology." They were agreeing with that. It had good technology.

"We do not foresee the ministry's investment being recovered in the near future from Canadian operations. Only with a successful marketing effort in Canada and in export markets, as well as an extensive licensing programme, can the company hope to see any return whatsoever. The company has seriously underestimated the amount of funds, planning and marketing work needed to successfully launch the food products nationally. Since the development of the Canadian market for french fries will require a great deal of sales effort, most of the production of the Creston plant will have to be sold in the export markets."

And finally:

"Management is still not in control of the company's systems and, as a result, are operating, or will begin to operate, without vital, up-to-date information."

All those things were there. They were all available to the minister in the report dated August, 1975. He commissioned the report. He knew it was there. He knew it was being done. At the same time, he lent out another $2 million without looking at it and then, after he got the report, he never met with the man who wrote the report.

The basic question I ask, Mr. Chairman, is: how could a cabinet advance dollars on a piece of paper without some good back-up material? I know when I go to cabinet they sure ask me a lot of questions.

HON. MR. BENNETT: You should have gone to the last one! (Laughter.)

HON. MR. HEWITT: The memo that stated it frightens me. Then I've got one other one here which is again a political comment, I guess, but I should read it. It's a fairly late one.

It says: "Fighting Barrett Blasts Premier Bennett and the Press." He always blasts the press because they are good guys and he gives them a bad time. This is what the former Premier said: "The only thing they have sold off is the agricultural purchase, Swan Valley Foods, and we knew it was risky."

If they knew it was risky, why were they lending money out on it like it was going out of style? Then we have the comment that was made by Mr. Stupich, the member for Nanaimo: "When we cashed in, " as it was put, "we cashed in our chips with Swan Valley." "Meanwhile, David Stupich, former NDP

[ Page 3144 ]

Agriculture minister, accused the government of withdrawing support for Swan Valley just when it needed it, allowing the operation to collapse." Now how could you say that? You had a report that said there were several millions of dollars still to be spent and you're saying, "just when it needed it." I just can't understand it. You had the report and I can't understand what's happening.

HON. MR. BENNETT: He had the report and knew that?

HON. MR. HEWITT: And he said at the end: "Although they (the government) lay the blame on us for mismanagement, I lay the blame entirely on them for not having the courage and foresight to properly support this very innovative process."

If another $6 million had gone into it, you could have sold the potato chips for Lord knows how much, but you could never have made a profit with it. I would say, Mr. Chairman, that this government, through the sale of Swan Valley Foods, for the record.... I'm sure the former minister is going to get up and try and smokescreen as somebody said, and he's going to try and defend his position, I guess, and I don't blame him for that, but I want to tell you what this government did in recognizing a problem. I can tell you from my several months in the Ministry of Agriculture that I've got piles of books, and studies, and everything else I've had to read through and go over time and time again because I had to come up with a decision as to what we were going to do with this. The member for Nelson-Creston (Mr. Nicolson) shakes his head. These are available to you any time. If you need them and you can't see the picture, you're not too swift.

Let's take a look at this.

MR. G.V. LAUK (Vancouver Centre): You sold for about a third less than the breakdown value of the plant! You took a bath! Bush league!

Interjections.

MR. CHAIRMAN: Order, please. All members will have a chance to speak in this debate. The Minister of Agriculture has the floor.

HON. MR. HEWITT: This government, through the sale of Swan Valley Foods, did this: it gave Swan Valley....

MR. LAUK: You took a bath.

HON. MR. HEWITT: I'll get to that. I'll remember those words: "You took a bath." Just hang on, Mr. Member.

This government, through the sale of Swan Valley

Foods, accomplished this, Mr. Member for Nelson-Creston, because it is your riding: we gave the company the marketing expertise because now they have a national company, Hardee Farms, with the staff and the marketing expertise to get that product to market. Isn't that what it's really all about - to get a secondary processing plant to get potato product to market? We did that.

Interjection.

HON. MR. HEWITT: You gave the ship away!

We maintained a secondary agricultural industry in the Creston Valley. We maintained it with no further provincial funds. You would have put another $7 million in there and made it absolutely impossible to get anything.

Interjections.

MR. CHAIRMAN: Order, please. Hon. members, this evening has been a little extra raucous. Perhaps we can all observe the standing orders and speak one at a time. There will be plenty of time for everyone to enter the debate. The Minister of Agriculture has the floor.

HON. MR. HEWITT: We also provided a market for the primary industry in that valley, the potato industry, because now we could get those potatoes to that processing plant and through it to the market.

We did another thing: we didn't sell out to that big corporate giant that you are always concerned about, that you're always saying, "Look at this terrible thing you've done." You may be interested to know, if you don't already know, that the farmer shareholders, the original people who got the idea. and got the concept and were sort of led astray, or not given any guidance by that government who put all that money in, are 25 per cent shareholders in the new company, Creston Valley Foods. They have an equity position. The former president of Swan Valley Foods is now involved and manages Creston Valley Foods under Hardee Farms. They have a 25 per cent equity. The local farmers still have a say in the company that they were originally involved in.

So no, we didn't give the ship away. No, we didn't sell to a big corporate giant. We still have those people involved. Another' thing is that we have maintained the jobs in the Creston area, which I'm sure the member for Nelson-Creston is concerned about. That's what we did. We had the courage to make those decisions.

Now we get to the Social Credit government's "down" side, maybe; maybe you can make some points on this one. You didn't do anything; we had to pick it up and do something with it. This is what it cost us and it's not over yet. We made sure that the

[ Page 3145 ]

creditors were paid: the labourers, the suppliers from the Creston area, the farmers. We made that commitment. In April 1976, we granted an additional $500,000; in June, 1976, we granted another $1.1 million; another $375,000; in September, 1976, $190,616; in January, 1977, $650,000.

MR. LAUK: What did you sell to Hardee for?

HON. MR. HEWITT: Nobody got a commission, hon. member. No, at least we weren't paying commissions on this.

May, 1977 - $186,473, and we'll pay again at the end of this month. Do you want to know why? I'll tell you why.

MR. LAUK: Because you're not too bright.

HON. MR. HEWITT: No, because you committed this company to a $9.5 million debt load that accrues interest at $2,000 a day. If you can add that up, now you know where a lot of our money goes - just to pay the capital debt that you people got us involved in.

MR. LAUK: Tell us about Hardee.

HON. MR. HEWITT: I'll be glad to tell you about Hardee. We had the guts to go ahead. We had the guts to do something with it and we've done it, but it was at a price. You were into it for $10 million; this government's into it for $3 million. I'm sorry, it's the NDP price. We had to shell out another $3 million just to get where we're getting at the present time.

What did we sell the Creston Valley plant for? I'll tell you what we sold the Creston Valley plant for. This great effort that was just about there and was going to make a profit - I'll tell you what we sold it for. I can't remember. I think it was $1.5 million.

Interjection.

HON. MR. HEWITT: Let me tell you what the conditions of sale were, hon. member. The conditions of sale were this.

MR. NICOLSON: Just like the Minister of Economic Development, he can't remember.

HON. MR. HEWITT: Only this is an NDP prize I'm trying to unload. But this is how we sold it: a $1.5 million debenture on the basis that if it becomes economically viable in three years, they'll pay us the debenture. But if it doesn't, they'll give it back to us. Now you tell me that's a great company that you started on down the track. Listen, I'm ashamed of the deal. But whose deal is it? It's your deal, not ours.

We did a number of things. By having to sell this, we went all over looking for buyers, people who wanted to take on this great idea, this great innovative product. We talked to 25 companies.

MR. LAUK: They saw you coming.

HON. MR. HEWITT: No, Mr. Member. We were willing sellers, but we couldn't find a willing buyer. So as a result we committed ourselves and we took our lumps for you, because you started this, like we took them on the ferry service. That's correct, and we took them on all the other things that you fouled up in the last three years.

But what were the terms of the sale? What were the "up" sides of the terms of the sale? Well, they were this.... And yes, we only got $1.5 million. But I must tell you that we still have the Richmond plant we're trying to sell but nobody wants to buy. We're still trying.

MR. LAUK: Why don't you give it away like you did to Hardee?

HON. MR. HEWITT: Well, it would be all right if we could find somebody who wanted it, you see. It presents a problem too.

But all right, let's look at the investment that's involved. Let's look at the terms of the sale on what we did. The terms of the sale were $1.5 million. It's a debenture over three years, but mind you, Hardee Farms had to put something like $0.75 million in to finish the plant and start their marketing programme.

MR. LAUK: Oh, too bad!

HON. MR. HEWITT: Yes, but at least under those terms of sale we said to the buyer: "Look, we know that this plant is there as a secondary industry to agriculture." We said: "You have to complete the plant , if you're going to buy it." That was a cost to us ~because that meant that anybody who wanted to buy it was going to have to spend more money.

MR. LAUK: Very sharp move!

HON. MR. HEWITT: We also said they had to operate it for a minimum of three years to prove that product, to make sure they could do it. We said that they'd have to purchase the potatoes from the local farmers guaranteeing the farmers a market for their product. We said the farmers had to have an equity in that business in order that they might participate in the running of the company. That's what we did, Mr. Member.

I think to myself, sure, the price was high. But we never reneged on that farming community. Sometimes when I see the press and see the remarks that are made, I figure the number of hours and the dollars that were spent by this government to ensure

[ Page 3146 ]

that farming community of Creston that the farmers would have their investment protected - those people who invested in the first original plan - and that the processing plant would be completed. We went to bat for them and it cost the people of this province money; it cost us about $3 million over and above what you spent. But if you hadn't spent it, we wouldn't have had to spend it. If you had controlled, we wouldn't have had to spend it. All you had to do was to at least get a handle on it. Every time you dished out another $2.5 million, nobody seemed to be interested.

Then we get down to the value of the buildings. Just for your information, we had an independent study done. Macaulay Nicolls carried it out in August, 1976. The book value on the building in Creston is $5,871, 462.05.

AN HON. MEMBER: That you sold for a million.

HON. MR. HEWITT: The market value of that building plant and equipment is $1,406, 920.

MR. LAUK: Oh, come on! Where did you get that from?

HON. MR. HEWITT: I'm glad you asked.

MR. LAUK: Table that.

HON. MR. HEWITT: I'm glad you asked, because I want to read you a definition here, Mr. Member, so you'll understand what I'm talking about.

MR. LAUK: Whoever gave you that appraisal ought to be drummed out of the business.

HON. MR. HEWITT: Is that a fact?

MR. LAUK: That's absolutely disgraceful!

MR. CHAIRMAN: Order, please.

HON. MR. HEWITT: Well then, just so you won't be misled, we'll get down to the definition of market value.

MR. CHAIRMAN: Order, please. Perhaps the minister would address the Chair and the other members could afford the minister the courtesy of allowing him to continue. They will have a turn to reply afterwards.

MR. LAUK: He believes everybody who comes to the door, Mr. Chairman.

MR. CHAIRMAN: Order, please.

HON. MR. HEWITT: Well, I usually believe lawyers, too, but I'm beginning to wonder.

But we get down, Mr. Chairman, to the definition of market value, just so that the members across the way won't think we're sort of looking at it as an empty shell. This is a definition that they use for market value:

"The highest price estimated in terms of money which a property will bring if exposed to a sale on the open market, allowing a reasonable time to find a purchaser who buys with the knowledge of all uses to which it is adapted and for which it is capable of being used."

We're talking about a plant with retort equipment basically aimed at french-fries production. The market value is based on that same assumption - that it will be put into a production plant using the retort equipment. The price of that was $1.4 million as opposed to a total investment on the books of $5.8 million.

MR. LAUK: That's the market value for a house, not a plant. What if General Motors sold its plant? What would the market value be? Nobody would dare buy it.

A million dollars for a $5 million plant. You ought to resign.

HON. MR. HEWITT: Mr. Chairman, I just wanted to make it clear.

MR. CHAIRMAN: Order, please, members. Hansard finds this situation impossible; the chair finds it intolerable. Would the minister address the Chair and the other members kindly wait their turn.

HON. MR. HEWITT: Well, Mr. Chairman, that's why I read the definition of "market value" - just so that member over there would understand what we were talking about when we were looking at market value - not breakup value, but market value, using the same plant for the same operation.

Just to give you another idea of a comment that was made in Hansard as an answer to Mrs. Jordan, the member for North Okanagan, on May 20,1975. It was by the then Minister of Agriculture (Mr. Stupich) . There is a guarantee, but the money that has been borrowed by the firm is amply secured by assets in addition to the government guarantee.

AN HON. MEMBER: Oh, oh!

HON. MR. HEWITT: That's a good way to secure things, isn't it?

AN HON. MEMBER: Who signed that?

HON. MR. HEWITT: No, that was out of Hansard.

[ Page 3147 ]

I don't think anybody wanted to sign that.

Now, Mr. Chairman, I'm going to sum up. I've gone on a long time, but I think this is important. It's unfortunate, I guess, that maybe this won't get the exposure that I feel it deserves because of the fact that it's old news now. We've sold half of it. Things have quieted down, but at least the record in this House....

AN HON. MEMBER: Don't you worry. You've got a good friendly friend.

MR. CHAIRMAN: Three minutes.

HON. MR. HEWITT: Well, I may have to sit down and get up again, Mr. Chairman. At least the record in this House will indicate what this government found when it inherited Swan Valley Foods.

Hugh McDonald recognized the market requirement back in 1973-74. He recognized that. He had stated to the directors of the company that their financial problems were there, that the marketing problems were there, that the management problems were there. And nobody did anything.

In 1973, talks were held with Standard Brands by McDonald to see whether or not they could get into the markets. They were concerned about the market. It was recognized at that time in 1973, but in 1975 we were still putting dollars out. The government bought 40 per cent equity in the company and control on the board, but never exercised it. They got on the treadmill of the Bricklin situation, and there was still no marketing expertise to carry it out.

But just to give you this final comment, Mr. Chairman, we have a newspaper article on June 21,1977. McDonald was personally interviewed:

"The non-existent marketing: McDonald proposed that his company, along with Catelli Foods, would buy Swan Valley product and market it across the country. But there was a falling out. The Swan Valley people were afraid of losing control to McDonald." So there's one where he identified it in 1973.

"Talks were held in 1973 with Standard

Brands, but they came to an end a year later when the government took an equity position in Swan Valley." When government gets involved, everybody else gets out of the way.

Then we have the other one: the NDP commissioned the Woods Gordon report in 1975 and certainly attempts were made to make them aware of the problem, but they never looked at it.

"Woods Gordon said there was a lack of management depth, financial controls were inadequate, and marketing programmes were amateurish. (After that report the NDP put another $2 million into Swan Valley, and, as part of its re-election campaign, held an, opening' in the Richmond plant.) "

Mr. Chairman, that is out of the Sun - not remarks made by this minister.

Then the plant is overbuilt.

"John Ronald, the president of Catelli, commented:

'That plant and facilities were overbuilt and overengineered, and probably built too soon.' "

In closing, the people of Creston made comments in that paper that it was a political decision. But I'd like to say that it was a people decision and not a political decision that this government made. We put an additional $3 million into that to ensure that we could protect jobs. We could then protect the farming communities and secondary industry and we protected the small shareholders investment in that company.

MR. CHAIRMAN: Hon. member, your time under standing 'orders has expired. I must ask you to take your seat.

MR. STUPICH: Thank you, Mr. Chairman; at this particular time I don't intend to speak nearly as long as the minister did about Swan Valley. I do have a few words to say about the subject, but I believe that at this point I do have the minister's attention -perhaps for the first time today. I've tried on a couple of other occasions to get his attention about an entirely different question. He never seems to understand my question and never seems to be able to respond to it. So now that I think I have his attention for a few moments, perhaps....

AN HON. MEMBER: You're going to change the subject.

MR. STUPICH: Yes, I'm going to change the subject. It's a subject that I tried to raise earlier....

Interjections.

[ Mr. Schroeder in the chair.]

MR. STUPICH: Just bear with me, very shortly. It won't take me long to explain it to the minister now that I think I have his attention. I'm also hoping that the Premier, who said he was not going to leave, will be here, because I think when I get to Swan Valley I'm going to need his help. I would like to have him here to help me when I do get to my Swan Valley discussion.

Mr. Chairman, you'll recall the discussion that you and I had this afternoon about egg quota when the minister was supposed to be listening. You'll recall us talking about the increase that was allowed in the egg quota when the appointed board increased the

[ Page 3148 ]

allowable quota by 50 per cent. Since then I have come across the newspaper story quoting that, and it does use a figure of 50 per cent. You'll recall us saying that at that time the maximum was 200 cases, and that the market price of quota at that time was between $400 and $500 a case. Now this minister allowed his appointed board to increase that figure of approximately 200 cases - because we changed from cases to hens - to approximately 300, a 50 per cent increase.

MR. KERSTER: I thought we were talking about swans.

AN HON. MEMBER: What is the actual market value?

MR. STUPICH: But now there was a substantial demand for a quota because everybody had 200 cases - and the fact that they were mostly in the ridings of Chilliwack and Langley and mostly voted Social Credit, I'm sure, had absolutely nothing to do with it. But the fact was that their 200-case quota was worth some $400 to $500 a case at that time; and the fact was that by letting the quota be increased by 50 per cent, he in fact created a gigantic market for quota. Because the supply is fixed, as he said, by CEMA, and because he allowed the demand to increase at that rate, a 50 per cent increase in demand by many of the major producers, the price of quota moved from $400 or $500 up to $2,000 overnight - well, not overnight, Mr. Chairman, but in the course of a year. Those people with 200-case quotas found that instead of it being worth $500 a case, it was worth $2,000 a case. He created a paper profit for them - a real profit, a quota that can now be sold in the open market at roughly $2,000 a case. He made for them, within the period of one year, $300,000 without them turning a hand.

Mr. Chairman, I would like to have some explanation of that $300,000 per individual who had a 200-case quota. Mr. Chairman, 10 of them would have made $2 million that he's talking about with Swan Valley. I'd like to have some explanation of that, Mr. Chairman. What was the reason for him doing it or allowing it to happen, and what does he intend to allow happen next? Where is the limit, Mr. Chairman?

Now for Swan Valley, Mr. Chairman. First, I'd like to have the minister's attention again, Mr. Chairman. I'm hoping that he has heard me say "Swan Valley" and I hope he's listening this time.

Mr. Chairman, I do not accuse the minister in any sense at all of not telling the truth when he says that I've never met Mr McDonald. I know he's misinformed on that. I would ask him to check with someone other than the person whom he thought he was talking to when he was talking to Mr. McDonald, because I certainly did meet Mr. McDonald on several occasions.

Interjections.

MR. STUPICH: I'm not suggesting you're wrong; I'm simply suggesting that you check.

Interjection.

MR. STUPICH: I'm suggesting Mr. McDonald, who was a director of Swan Valley Foods - yes.

MR. CHAIRMAN: Order, please!

MR. STUPICH: I met Mr. Hugh McDonald on several occasions. That was one point. And another case....

Interjection.

MR. STUPICH: Well, I don't know. I missed it then, because I heard you say several times - at least, I thought I heard you saying several times - that I had never met Hugh McDonald. You did say that?

HON. MR. HEWITT: Yes.

MR. STUPICH: Well, all right. I did meet Mr Hugh McDonald of McDonald and Associates on several occasions.

HON. MR. HEWITT: On Swan Valley business?

MR. STUPICH: Yes, on Swan Valley business. I've never met him on any other business that I can recall. You said several times during the course of your presentation that I had never read the report, and yet at one point you quoted from a memo that I had written to my deputy after I had read the report.

Interjection.

MR. CHAIRMAN: Hon. member, you'll help me maintain order if you address the Chair.

MR. STUPICH: Gee, Mr. Chairman, I'm always very careful about that. Okay, those are just a couple of small things. Mr. Chairman, I was disappointed at the interjection by the hon. Provincial Secretary (Hon. Mrs. McCarthy) at one point, when she fed the minister the line: "How many millions were we up to at that time?" This is the minister responsible for tourism. You recall what happened to tourism last year, Mr. Chairman: $200 million lost to the economy of British Columbia in one short year!

SOME HON. MEMBERS: Smile!

[ Page 3149 ]

MR. STUPICH: Mr. Chairman, I don't intend to try to trade problems between our government and that government. I'm just saying: let's look at the whole perspective and let's not look at the bottom-line accounting of any single effort or enterprise on behalf of either government. There was $200 million in one department alone because of the actions of that government in one year! Certainly all the indications, along with the smiles, we've had so far are that we're not nearly going to recover that $200 million loss this year! Mr. Chairman, we've got a long way to go to pick that up, much further than we have to go to pick up the $10 million or $1 S million that this government over there dropped because of what they did with Swan Valley.

Interjections.

MR. CHAIRMAN: Order, please, hon. members. It's very difficult to hear the member who has been recognized.

MR. STUPICH: Golly, Mr. Chairman, I thought I was doing my best.

The sale was for $1.5 million, and they have three years to make up their minds whether or not they want to pay the $1.5 million or not, Mr. Chairman. Of course, by then they've got everything. They've got all the processes; they have had an opportunity to copy the engineering of all the retorts - everything that Swan Valley had except the physical plant in B.C. They will have the right to copy that, to duplicate it, to move the processes, to move the engineering - they'll be able to take everything out of B.C., abandon Creston, abandon Richmond, and still not pay the $1.5 million. They can walk out with everything and not pay us anything. That's a great sale, Mr. Chairman!

Even if they want to keep it, supposing they say at the end of the three years: "Well, we'll give you $100,000." What are you going to do, Mr Chairman? A sale? That's a giveaway, that's all it is. It's an abandonment!

Mr. Chairman, the minister interrupted my presentation by saying that I read the report after we had given them another $2 million. He forgets, I think, that he quoted from the report himself to the effect that the government should continue its support. That was the recommendation from the consultants we hired. There were other things in there as well, but it said that the government should continue its support.

Mr. Chairman, we did continue our support. The contents of the Woods Gordon report, the summaries of it, the material in it, were discussed at several cabinet meetings before the date of that memo between myself and my deputy. There was discussion of Swan Valley at different cabinet meetings. The fact that I had not read the complete report didn't interfere....

Interjection.

MR. STUPICH: Okay. Let me tell you the story. Mr. Chairman, I'm being accused of making it worse.

Interjection.

MR. STUPICH: Mr Chairman, that's the point. I don't intend to speak very long on this this evening but I think my point is that I believe the people of British Columbia have a right to know the whole story. I believe the people of British Columbia, those who are interested at all, would like to know the whole story. There is an opportunity for them to know the story better than they'll get tonight by the minister, who knows nothing about it other than the speech he's read, and by myself, who knows perhaps some more but not everything that should be known about it.

Mr Chairman, there will be an opportunity for us to examine witnesses in detail on the Swan Valley thing from beginning to end, because certainly, as far as B.C.'s concerned, we've reached the end, at least if this government survives in office for very long. There will be an opportunity, if I have anything to do about it, but I'm not sure that I have that control.

The public accounts committee met last week on Tuesday, and during the course of that meeting I announced that I would like to invite some of the directors or former directors of Swan Valley foods to a public accounts committee meeting to talk about that company. That would be a public forum. The press would be there and there would be opportunity for the 17 members of that committee to ask questions of the directors of Swan Valley Foods. If anyone on that committee or anyone else would like to see others invited, then I'm only too happy to include them in the invitation as well.

Mr. Chairman, I have some real concerns....

Interjection.

MR. STUPICH: That has been done. That public accounts meeting has been set up for next Tuesday.

I have a problem, Mr. Chairman. I did not intend to raise this this evening but I believe now I need some public attention on it if we're going to have that meeting next Tuesday. I have a memo here that, as I say, I did not intend to read. But I'm afraid now that I need public attention if we're going to go ahead with that meeting next Tuesday, and I need some help from the members in the House, perhaps. Here's a memo addressed to myself as Chairman of the Standing Committee on Public Accounts and Economic Affairs: "Re meeting of committee

[ Page 3150 ]

members. I have been advised by the Social Credit committee members that they will be unable to attend the meeting scheduled for tomorrow, Tuesday, June 28,1977 .. ."

HON. MR. HEWITT: That's not Swan Valley.

MR. STUPICH: ". . . and therefore request that the meeting be cancelled and the B.C. Rail delegation be recalled at a later date."

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: "Further, we request that the next scheduled meeting be convened without any delegations, for the purpose of general discussions." They don't want the Swan Valley meeting next week, Mr. Chairman. It was signed by George Kerster as acting secretary.

I would remind you that there are 11 government members on the public accounts committee, and this memo tells us that they have had two weeks' notice of this meeting. The day the House convened the memo went out. None of the 11 members will be able to attend that public accounts meeting tomorrow morning. That's a strange coincidence, Mr. Chairman. Mr. Chairman, I have drafted a reply, and I'd like to -read my reply. I had it all ready to go in an envelope. I've opened the envelope and this is the reply. Then I'll send it over to the acting secretary, the hon. member for Coquitlam (Mr Kerster) .

Interjection.

MR. CHAIRMAN: Hon. members, may we have order in the committee, please?

MR. STUPICH: Mr. Chairman, my reply:

"This will acknowledge receipt of your memo which was handed to me at 3:30 on Monday, June 27, just minutes after the B.C. Rail vice-president had confirmed his attendance."

Now I didn't know that until I got up to my office and I found that he had phoned just moments before I received this memo.

"Under the circumstances, I think it would be embarrassing for all of us to have to admit that the meeting had to be cancelled for lack of a quorum, especially in view of the Premier's remarks about full-time working MLAs.-

Mr. Chairman, I go on in this memo to say:

"I have checked and established that all four of the NDP members will be present. I do hope that at least five of the Social Credit committee members will attend so that we may proceed with the quorum."

That's not the end of the story; that's the end of the memo, Mr. Chairman. I'll send this over to the hon. member for Coquitlam.

When I got back to my office, just before 6 o'clock I was informed that a message had come in from - whatever we call him - the operating vice-president, Mr. Mac Norris of the BCR. It was another phone call from him, asking whether or not the meeting had been cancelled.

Now, Mr. Chairman, I had not been in contact with him. None of the members of the NDP caucus had been in contact with him. I do know that the hon. member for Oak Bay, Mr. Wallace, received a copy of the original memo - at least it has been addressed to him. The hon. member for North Vancouver-Capilano (Mr. Gibson) is away; a memo is addressed to him. I know neither one of those contacted Mr. Mac Norris. Mr. Chairman, I wonder just who it is on the government side of the House that doesn't want that meeting to go ahead tomorrow and who doesn't want the Swan Valley meeting to go ahead the following week but would rather have a meeting at which they can decide what we're going to do and how the committee is going to be hamstrung by the 11 solid government members of that committee.

Mr. Chairman, as chairman of the public accounts committee, a letter has gone out....

MR. H.J. LLOYD (Fort George): On a point of order, I thought we were on vote 93, the Minister of Agriculture's estimates. What are we doing on the standing committee here, wandering all over the moose pasture?

Interjections.

MR. CHAIRMAN: Order, please! Your point of order is well taken. Let's move to vote 93. As long as the debate is relevant, you may proceed.

MR. STUPICH: Mr. Chairman, I'm certainly trying to keep the debate relevant. I tried to make the point that I feel the best possibility for discussing this in detail would be to invite whomever the committee members would like to invite from Swan Valley to come to a public accounts committee meeting where there's opportunity for cross-examination and opportunity for expert witnesses who know the picture certainly far better than the present minister and better than the previous Minister of Agriculture. There would be opportunity for them to be questioned by committee members.

That meeting has been arranged. Mr. Fred Wilks, the previous manager of the Richmond plant has been contacted; he has agreed to come. A letter has gone out officially inviting him. I would be pleased to invite any other individuals, if members of the Select Standing Committee on Public Accounts and

[ Page 3151 ]

Economic Affairs would care to submit names to me, for them to come as witnesses as well.

MR. CHAIRMAN: If I might make an observation to the member who now has the floor, the matters pertaining to the select standing committee to which you refer might better be decided by a majority vote in your committee. Since this committee is powerless to make those decisions in any case, perhaps you could proceed to the next point in your debate.

MR. STUPICH: Well, Mr. Chairman, it's just this: I'm not asking for your advice or your help in arranging that meeting. The meeting has been arranged; it has been raised at a public accounts committee meeting. It was agreed to there that that invitation would go out. I'm simply letting all the members in the House know that I do not want a full, complete discussion of the matter raised by the minister and dealt with by him at some length. I want it discussed in another arena where there will be better opportunity for an expert, full discussion of it, a better opportunity than between two politicians on both sides of. the House. On that I rest my Swan Valley case.

HON. MR. HEWITT: Mr. Chairman, I always thought that the people's business was done in this chamber.

AN HON. MEMBER: Hear, hear!

MR. CHAIRMAN: Order, please, Mr. Minister, some of the people's business is, of course, committed to committees.

HON. MR. HEWITT: Thank you, Mr. Chairman. You're quite correct. Mr. Chairman, I'd just like to make a couple of comments.

No. 1: the new company, Creston Valley Foods Ltd., a subsidiary of Hardee Farms, cannot move the technology out of the Creston Valley plant. That's in the agreement to which you are not privy. So we have the protection for the technology.

The other one is that you made a comment - and I guess I can have a little bit of licence here to get into the public accounts - in regard to the executive vice-president Mr. Mac Norris. He phoned you just before you got the memo.

MR. STUPICH: My secretary.

HON. MR. HEWITT: Well, he phoned your secretary - I don't care who he phoned. But he phoned this afternoon between 2 o'clock and 3 o'clock, Mr. Chairman - that's what the member said - and he received a memo saying that we would not be available at that time. The vice-president waits until 2 o'clock or 3 o'clock in the afternoon to say he'll be there. We, at 2 o'clock or 3 o'clock in the afternoon, say we won't be there. So what's the problem? It's not something that's arranged two or three weeks in advance. The man just confirmed he'd be there tomorrow. As a result, he's not going to be here tomorrow because the committee is not going to meet, so don't say that this is a terrible imposition on Mr. Mac Norris.

MR. STUPICH: Run through that again.

AN HON. MEMBER: Do you realize what you're saying?

MR. CHAIRMAN: Order, please.

MR. STUPICH: Would you say that again?

HON. MR. HEWITT: Now let's get to the other issue.

MR. STUPICH: I lost something in the translation.

Interjections.

HON. MR. HEWITT: Well, maybe I should repeat it.

MR. CHAIRMAN: Order, please.

MR. LAUK: On a point of order. Mr. Chairman, the House - and the House alone - decides the conduct of committees of this House. This is just a committee of the House, and I wish to point out that fact to the minister.

Secondly, what he has just revealed to this committee should be told ' to the House by him as a breach of privilege, as a complete subversion of the committee system of this House.

HON. MR. HEWITT: What are you talking about?

MR. LAUK: The cabinet has deliberately subverted the public accounts committee by steering away the BCR people and deliberately cancelling that meeting because they wish to cover things up.

SOME HON. MEMBERS: Oh, oh!

MR. CHAIRMAN: Order, please, hon. members. May we please complete one point of order before we recognize another?

The work of select standing committees is maintained, supported, decided, concluded and reported by that committee to this House. They are a committee of this House, and therefore the work of those committees should not be interfered with by

[ Page 3152 ]

this committee or by this House. Therefore it is beyond the scope of our debate this evening to discuss what should or should not be done in those committees. That matter is discussed in those committees and decided by a majority vote in those committees. I hope that is satisfactory for the purposes of this committee.

On a further point of order, I recognize the member for Esquimalt.

MR. KAHL: Thank you, Mr. Chairman. You've covered the point very well and I believe we were on vote 93.

MR. CHAIRMAN: Thank you.

HON. MR. HEWITT: Well, Mr. Chairman, my comments regarding the public accounts were only a response, but I'm not going to deal with it.

I just wanted to finalize the Swan Valley story.

AN HON. MEMBER: They don't want to talk about Swan Valley.

HON. MR. HEWITT: Well, I know, but I want to talk about it some more. The Swan Valley story is not over yet. We still have to sell the Richmond plant in order to finalize the situation. We are having our difficulties in selling it. I would suggest that the loss of the taxpayers' money on this adventure is $9 million-plus and, like Bricklin, I guess, Mr. Member, it was a good product - it is a good product - but it was never really researched, it never had the economic viability because of the fantastic debt load that it incurred. It. didn't have the control that you mentioned in your news article way back in 1974. It didn't have the administration expertise or the marketing expertise. It didn't have that. It was an example of poor planning, no control, very little direction by the government who had 40 per cent equity. I think, Mr. Chairman, that it is another example of the effect of government on business in this province: to reduce the incentive at the local level and when there is a problem they turn to government for further assistance.

I But I want to read some good things out of this. There's a letter addressed to the gentleman Who was involved in arranging the sale, and I just want to read the last paragraph. This letter is from Mr. Bill Piper, the former president of Swan Valley Foods and now the general manager in charge of Creston Valley Foods. This is the last paragraph of a letter dated May 20,1977:

"The Creston group are encouraged by recent activities regarding the plant test runs, the initial 1977 programme, and the market strategy which is forming up. We assess from these recent activities good commitment from the Hardee group. It is my sincere desire that within the next few years we will be able to reflect upon 1976 as the successful, turning point in the development of a new industry in Creston Valley.

"My best regards,

Mr. William Piper."

MR. STUPICH: Mr. Chairman, I just want clarification to make sure that I understood the minister properly. Did he say that he or some other members of his caucus instructed Mr. Mac Norris not to attend the meeting yesterday morning?

HON. MR. HEWITT: No, I didn't say that.

Interjections.

MR. STUPICH: No, I'm serious. That's the way I heard it, and that's what I wanted to know.

HON. MR. HEWITT: I was just straightening out your record.

MR. STUPICH: Well, I would like him to repeat what he did say.

HON. MR. HEWITT: Okay. No, I did not say that. The member heard me wrong.

MR. STUPICH: What did you say?

HON. MR. HEWITT: I would even go so far as to clarify it, if you wish.

MR. STUPICH: That's what I want to hear. Yes, please.

MR. LEVI: Be careful. The Premier is watching.

HON. MR. HEWITT: Well, it's simply this: the member, in his statement to this House a few minutes ago, as I understood what he said, said that he received a memo from the member for Coquitlam (Mr. Kerster) . Is that correct?

MR. STUPICH: That's right.

HON. MR. HEWITT: This was about 3:30 this afternoon.

MR. STUPICH:, That's right.

HON. MR. HEWITT: In your comments you said that you went back to your office and you had a phone call. All I'm saying is that as late as 2:30 or whenever you got your phone call today confirming attendance, you got a memo from our member for

[ Page 3153 ]

Coquitlam at 3 o'clock advising he wasn't going to be there. We're no different from the individual coming from BCR. He advised you the afternoon of the day before; we advised you the afternoon of the day before we couldn't be there. That is exactly what I said, Mr. Member.

MR. STUPICH: Mr. Chairman, I'm sorry, but....

MR. CHAIRMAN: Order, please. Just before the member is recognized, may I remind all hon. members that the explanation of the matter presently on the floor might better be done between the two members because it is irrelevant to the vote before us. It could be handled very easily without taking the time of the committee.

MR. STUPICH: Mr. Chairman, I would like to argue that it is not relevant, because we were talking about Swan Valley it did raise in my discussion of Swan Valley the proper arena for discussing Swan Valley. I expressed my concern because of what I suspected had happened at the instigation of some members of the government caucus - that the public accounts committee meeting at which Swan Valley directors might be examined would not take place.

The third point of what the minister suggested was the fact that after Mr. Mac Norris had confirmed that he was coming and after the members said they weren't coming, Mr. Mac Norris phoned a second time to say: "Is there not going to be a meeting tomorrow?" Who told him not to come?

MR. CHAIRMAN: Order, please! On a point of order, the member for Esquimalt.

MR. KAHL: Mr. Chairman, I believe we're on vote 93. I wish the debate would be relevant to that, please.

MR. CHAIRMAN: The Chair has alerted all members that we are on vote 93. The matter concerning select standing committees ought better to be concluded in the committee.

MR. STUPICH: I'm not sure it will arrive there -that's what worries me.

HON. MR. BENNETT: Mr. Chairman, I believe the matter brought up by the Minister of Agriculture is very clear to this House, and that is that with all good intentions by governments and ministers, given the type of powers the last government gave itself -ministers being able to make financial decisions and acquire shares without the type of scrutiny even of the Minister of Finance, or even giving the Minister of Finance the opportunity to invest the public's money in common shares and in speculative ventures or in guaranteeing loans without reference to the Legislature....

Even with the best of intentions, as they fall in love with their own projects or chase good money after bad when they have made a bad decision, there is only one loser: the people of B.C. The loss is their dollars, and it's the people's money we're playing with. That is why this government took steps, Mr. Chairman, to remove the opportunity for that type of financial misadventure to take place ever again. We've taken the temptation away from ourselves with the sorry experience of that former Minister of Agriculture and that former Minister of Finance and the financial investments - and I use that term advisedly, because they can't be considered investments - and the type of financial arrangements they made on behalf of the people of the province to the people's detriment.

I think any time a government wishes to move in a new financial direction beyond the normal services of government, it should be under the scrutiny of the Legislature. I agree that those types of arrangements should have had the full scrutiny and not have been left to the individual minister who - and this is the best I could say - would throw good money after bad in an attempt to prove he was right in the first place.

I can remember being in this House and hearing the statements that this was the last amount and the only amount we'd ever have to put in and what a great project it was. We saw money after money follow it. It reminded me of the terrible example we had with the Pattullo government and Commotion Creek. That was the province's first big experimentation in socialism, drilling oil and gas wells in the Peace River area.

The government of the day had information that they were in a dry well, but they were going into an election. They were afraid to tell the people of this province and they continued to spend the public's money and to drill because they didn't know how to tell the people they had wasted their money in an investment that was a dry hole.

Here we have the dry hole of the Minister of Agriculture of the former government in the same position - throwing more money down the drain coming into what turned out to be a very fast election for the people of B.C.

I'm just saying that no government and no minister should be placed in that awkward position ever again. We now have more than the Pattullo experience; we have the Stupich experience and the Barrett experience. Now certainly that is enough experience for the people of B.C. and their money.

Yes, we want the agricultural industry to flourish and to have the added value of processing plants. But the private sector is where that type of speculation and that type of opportunity should take place.

[ Page 3154 ]

Allow them the right to make a profit. Allow them the greater right to show a loss and not have it affect the essential programmes for people that losses to government affect.

When you take the taxes of the province and the credit of the province and blow it on a foolish investment, no matter how well intentioned, that's money out of the hands of those in need, money out of children, money out of adults, money away from health programmes, education and hospitals. I say that the people of B.C. don't need the risk of allowing certain ministers of the Crown their opportunity to play the gambling game or the speculative game. Let them play it with their own money and let's leave the people's money for benefits for people in this province. We can't stand the losses.

MR. STUPICH: Mr. Chairman, I'll try to be very careful to stay as close to vote 93 as did the previous speaker, perhaps even a little bit closer.

He was dealing with a hypothetical situation, of course, when he suggested that no minister should have the right to buy shares on his own - perhaps he's being hypothetical or looking into the future, I'm not sure. He had the disadvantage of not having been in the House when we had this discussion earlier this evening or he would have heard his Minister of Agriculture saying, in connection with every one of these decisions to acquire more shares or to invest more money or to guarantee more money on behalf of Swan Valley - in every instance - it was arrived at with the signature of the Minister of Finance after discussion in a cabinet meeting. But, of course, he was absent; he didn't hear all that.

HON. MR. BENNETT: That's not the Legislature.

MR. STUPICH: Well, then you went on to the Legislature. But, Mr. Chairman, you'll recall - you were listening to the Premier and I was listening to the Premier. You'll recall him saying that no minister on his own should have the right simply to back up a previous wrong decision of his own without going to the Minister of Finance and getting his own support. Then he went on further and brought the cabinet and the whole Legislature into it. That's all very well. But he did initially say that no minister on his own should have the right to do that kind of thing without at least getting the support of the Minister of Finance, which happened in every instance, and without having it discussed in cabinet, which happened in every instance. There were reports and there were studies. There was information. There was a government-appointed director on every Crown corporation.

MR. CHAIRMAN: Now to the present minister's debate.

MR. STUPICH: Mr. Chairman, we have been talking so far about Swan Valley, about the directors, about the reports, and about the authorizations for money. The Premier went far beyond that, though, in talking about investments generally. Mr. Chairman, I'm quite prepared at any time to stack our record of fiscal management of the province against his.

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: We talked earlier - again, Mr. Chairman, you'll recall that the Premier was not here when we talked - about this government being responsible for a $200 million loss to the tourist industry in one year alone. Mr. Chairman, he was not here when we were talking about these expenses.

MR. CHAIRMAN: Order, please, hon. member. I think the hon. member would concede that that is a matter out of the realm of vote 93.

MR. STUPICH: How did the Premier get away with it, then, Mr. Chairman?

AN HON. MEMBER: What about Pattullo? What did he have to do with it?

MR. STUPICH: Exactly. I don't know quite how Pattullo, the socialist.... Gee, He'd turn over in his grave if he heard that.

MR. CHAIRMAN: Vote 93, hon. member.

MR. STUPICH: Oh, he's gone again. All right, we'll have a go at that at the next election. Mr. Chairman, we'll have another opportunity to discuss the fiscal management and the fiscal responsibilities of the two administrations.

Interjection.

MR. STUPICH: No, it's not us who are losing. It's the people of British Columbia who are losing. The Premier, in the election campaign, promised to turn the economy around, and he certainly did. The economy in B.C. has never been worse since the election of this government, and it shows absolutely no signs of improving.

MR. CHAIRMAN: Vote 93.

MR. STUPICH: One example of it is in the agricultural industry, Mr. Chairman, where the minister, to this point, has still not tried to tell the House or the farmers of the province that he does believe in agriculture. He has still not said anything other than that he doesn't disagree with the concept of marketing boards. That's pretty small support for

[ Page 3155 ]

marketing boards, Mr. Chairman.

MR. CHAIRMAN: Hon. members, the member for Nanaimo has the floor, and may I ask the member for Omineca (Mr. Kempf) to please restrain himself.

MR. STUPICH: He has said, with respect to income assurance, that it was a five-year contract, that it's running out and "we'll do something." What? When? Will it help agriculture? He has said only that he hopes to be able to work something out with the federal government.

Mr. Chairman, one thing the NDP government of British Columbia was not prepared to do was wait for the federal government. Had we waited for the federal government to move, there never would have been any agricultural land reserve in the province of British Columbia. Had we waited for the federal government to move, there never would have been any agricultural credit programme in the province of British Columbia. Had we waited for the federal government to move, there never would have been any agricultural industry improvement Act in the province of British Columbia. Had we waited for the federal government to move, there never would have been any income assurance programme available for farmers.

This minister had the nerve to say at an agricultural meeting that he doesn't believe in subsidies. Apparently he supports a policy of $4 billion for unemployment insurance, but he is reluctant to pay $35 million in income assurance programmes for our fourth-largest industry.

Mr. Chairman, when is this minister going to stand up and talk for his department and for his constituents as Minister of Agriculture - rather than talking about what was done by a previous administration - expressing concern about that, and telling us that he's thinking about it, that he's talking about it and he's hoping the federal government will move? For 20 years, Social Credit Ministers of Agriculture stood in this House and said they were hoping the federal government would so something for agriculture in B.C. The farmers waited for 20 years and that government was finally thrown out. In three and a half years - and the farmers themselves and all of the agricultural organizations will say it -there was more done under the NDP administration than in the previous 20 years of Social Credit maladministration.

MR. CHAIRMAN: Order, please. Hon. member, vote 93 is the administrative responsibility of the present Minister of Agriculture. May I ask the member, except for a passing reference, please to keep his debate strictly relevant to that particular vote?

MR. STUPICH: Mr. Chairman, I appreciate your assistance. You will recall that the minister so far has responded to several points made on this side of the House but has never once come out strongly in favour of agriculture. The most positive thing that he's said all day, including Friday as well, was that he hoped the federal government would do something. He has no ideas of his own, no programmes of his own. He's not ready to do anything until the federal government will show the initiative first.

The only thing that he has to offer the House is to stand up and read for two hours a speech that somebody has written for him about Swan Valley Foods, which could have been one of the greatest success stories of British Columbia if this government had had the guts to go ahead with it.

SOME HON. MEMBERS: Hear, hear!

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: We'll have an opportunity to discuss that more with expert witnesses at, I hope, the public accounts committee meeting.

MR. LEVI: Mr. Chairman, the Premier in his very eloquent, irrelevant speech said that everything that goes on in terms of the government must have the benefit of the full scrutiny of the Legislature. Well, I would hope that the minister heard that, and that he's prepared to table all of the documents that he's read from today.

You read the report, and it would be appreciated if you would table it. It's a tradition in this House that if you quote from a document, you have to be prepared to table it. Perhaps you might point that out to the minister, Mr. Chairman.

Interjections.

MR. CHAIRMAN: Hon. members, the entire committee for two hours this evening has been somewhat unruly....

Interjection.

MR. CHAIRMAN: Order, please, hon. minister! The House has been somewhat unruly this evening. Perhaps for the concluding hour of committee we could stick to relevance in debate and perhaps follow the standing orders of the House where the member who has been recognized has the floor and the rest of us not interrupt that member, except to raise a point of order.

MR. LEVI: I'd like to say, Mr. Chairman, that there has been from the minister a very extensive quotation from documents. I would like the minister

[ Page 3156 ]

to indicate to us that he's prepared to table the Woods Gordon report and other documents that he quoted from. Plus he might furnish them to the House -bearing in mind again the indication or the instruction, almost, from the Premier that all of these affairs have to have the benefit of the full scrutiny of the Legislature.

He might let us know who the 25 companies are that they went after in order to sell Swan Valley Foods. What we would like from the minister is a lot of information. Perhaps he would indicate to the House whether he's prepared to table all of the documents.

MR. BARRETT: He has to, by standing orders.

MR. LEVI: Yes. He nodded his head when I asked. So perhaps the minister would be prepared to table documents.

HON. MR. HEWITT: No. I'm going to read them out to you for Hansard. As the member is so concerned about the companies, I thought maybe I'd read them out just for the record rather than to table them. Maybe you'd like to know some of the efforts that were put through.

MR. LEVI: Just table them. That's all.

HON. MR. HEWITT: You would like them tabled, would you?

MR. LEVI: Table the report.

HON. MR. HEWITT: Well, I could table the report too, and I guess I will table the report. I guess that's one of the standing rules. But I would suggest that the former Minister of Agriculture, the Hon. David Stupich, had the report in his hands in August, 1975.

MR. LEVI: Now we're dealing with the present Minister of Agriculture.

MR. CHAIRMAN: Hon. members, the committee is not empowered to table any documents, and therefore the documents will need to be tabled when the committee rises.

MRS. B.B. WALLACE (Cowichan-Malahat): Earlier in the debate I was discussing the situation relative to marketing boards and whether or not they were the culprits in the cost of food. I think I would like to read into the records of the House, Mr. Chairman, some figures furnished for the 1976 season by the Interior Vegetable Marketing Board where they dealt with the various products that they handle there, and related the pricing structure of the products from 1970 to 1976.

It's interesting to note that a great many of those products are actually selling at a lower price in 1976 than they were in 1970. Some are slightly up. For example, asparagus is up 10 per cent in those six years. Early cabbage was up 25 per cent. We come to late cabbage, however, and the price was lower in 1976 than it was in 1970 by some 3 per cent. Red cabbage was up 8 per cent. Cucumbers were up 2 per cent. Peppers were up 4 per cent. Then we get into things like sweet peppers - down 16 per cent. Silver-skin onions were down 2 per cent. Fall onions were down 66 per cent. And the list goes on.

I wanted to mention that in reality the farmer's income has been really hampered by the fact that he is not receiving the same kind of increases for his product parallel to the cost increases that he's having to face in the products that he has to buy.

There is another item that I would like to mention relative to marketing boards, and this relates to the Coast Vegetable Marketing Board in particular. The indication is often made that in effect the marketing board keeps the price at a higher level. This letter is one I received from the manager of the Island Vegetable Co-op and it's dated January 23 of this year. He's relating the situation relative to cabbages:

"In the fall of 1976 there was still local cabbage available on Vancouver Island but local cabbages on the mainland were completely gone. As a result of that we saw some very strange things happening in the pricing.

"The local red cabbage was selling at $5 for a 50-lb. case on Vancouver Island. At the same time, California cabbage on the mainland was costing $10 - just double. Green cabbage was even worse: it was $5 in January for a 50-lb. case on the Island and California cabbage on the mainland at the same time was selling for $20." This is the sort of price that the farmer would get, comparing the two like kinds of prices.

"In cauliflower, there was the same thing happening."

So, Mr. Chairman, I would suggest that it's not necessarily true that the marketing board is going to set a price that is higher than the imported price would be. In fact, the reverse is often the case. I think this bears out my earlier remarks that as long as we have our local industry active and healthy, it is a great balance and a tempering factor on the price of food that we have to pay. If in fact we were to be faced with having to purchase all imports and there was no competition locally, we would be at the mercy of those importers and we might not be nearly as fortunate in getting the kind of prices that they will bring into effect when they're having to meet competition from the local market.

I want to go back, Mr. Chairman, to the matter of the $5 million and the question that I raised earlier. I

[ Page 3157 ]

was very disappointed in the minister's answer when he indicated that really there was to be some money put in the Premier's vote, in a surplus disaster fund that would be available in the case of need. I suggest that the minister has entirely missed the point, because that's not the purpose of the aid to developing countries fund. That fund was established very definitely on a different basis than just handing out surplus goods or money in case of disaster. That sort of offhand answer to simply indicate that there would be money available in case of a disaster is not the kind of answer that really relates to what this programme is all about.

Just in case the minister feels that there is some difference between the $5 million that was in the one fund and the $360,000 or $365,000 that's in the other fund, I would point out that in the report from his department - and this committee, incidentally, is chaired by the deputy minister - it indicates that the original intent was the $375,000 a year, which was, of course, in the first instance on a $5 million perpetual investment which this government saw fit to recoup, but has continued a like amount in the budget.

But it goes on to say:

"The $5 million for world aid was placed in the budget of British Columbia Department of Agriculture. The allocation was a capital item to be used as required to enhance food production in developing countries. The criteria for the distribution of these funds were the same as for the original fund, with additional authority to match eligible funds raised in British Columbia by private organizations."

Now, Mr. Chairman, to cut back to the $350,000, to knock that $5 million right out of the budget, is a very short-sighted move, I would suggest. The minister has indicated that he is very concerned about imports from outside countries into the province of British Columbia. I have suggested to the minister -and I think I've backed my arguments fairly substantially - that those countries who are exporting into our food market here in British Columbia are in many instances countries which are in need of food themselves.

I pointed out the whole concept of the good farmland in those countries being taken over by large concerns to grow products for export and urged the minister to consider enlarging this fund so we can go in with the kind of programmes we were in there with before to even a greater extent that we were. This is the thin edge of the wedge where provincial authority can get into doing something about those imports.

As those countries develop economically, their need to export raw food will become less and less. Their whole economy will begin to develop, and we won't be faced with those kinds of imports from those countries. They will be able to utilize more of their own productivity, they will become more productive in their own areas, and they will be able to support themselves at a much better standard and at a point where they will not need to simply export foodstuffs at such low, low costs, with low, low labour rates that are available in those countries now.

What we must do is help those countries to develop themselves so not only do they have a better standard of living but so they also cease to be the kind of pressure that they are now on provinces such as ours. I would ask the minister whether or not he can give us some assurance that he will be moving in the direction of working towards getting some money back into the budget.

Now he has indicated that it is there in the Premier's budget. I indicate to him that I do not believe that this is the way we should be going. I'm very concerned when I find that he is telling people who have written to him about this that this decision was part of an overall programme to reduce expenditure and to help improve the economy of British Columbia.

This is a short-sighted and false step, Mr. Chairman, and I would suggest that until this minister is prepared to stand up and fight for the rights of his ministry, rather than sitting back and letting one thing after the other be cut down, and taking the advice of other cabinet ministers to the extent that he is apparently not standing up for the needs of the agricultural community.... As I said earlier, I am really very disappointed in the fact that he is not coming out loud and clear and taking a stand. I am becoming more and more convinced that he is simply listening to the Minister of Consumer and Corporate Affairs (Hon. Mr. Mair) ; he's listening to the Minister of Human Resources (Hon. Mr. Vander Zalm) ; he's listening to the Premier. He's not standing up for the rights of the agricultural community. This is just one example, this $5 million.

Now it may seem to be unrelated to British Columbia, but it is very closely related to British Columbia and to the well-being of our farmers here in B.C., just as much as it is to the countries outside of the province. There's a correlation there. We cannot isolate ourselves in British Columbia. We can help our own farmers by helping farmers in those other countries as well. I suggest that this point of view of reducing expenditures to help improve the economy of B.C., to cut back on that kind of a programme is a short-sighted programme, Mr. Chairman. I'm wondering whether or not the minister is prepared to make any further comments and any further commitments relative to this $5 million.

HON. P.L. McGEER (Minister of Education): Mr. Chairman, I wasn't going to engage the minister this evening in a question-and-answer session on the price of red cabbage and some of the other delightful

[ Page 3158 ]

vegetables of Vancouver Island, but I did want to respond for a moment or two to some statements made by the former Minister of Agriculture, having heard from the present minister a detailed account of one of the sorriest tales ever told in this Legislature with regard to an economic venture undertaken by the government. It's a case history, Mr. Chairman, as to why governments should never go into business, and a little bit of insight into the fact that it's always those who have the least capability of running businesses who most want to get into it with other people's money.

Two things astonished me about the statements of the former Minister of Agriculture. The first of these is when he said they would be prepared to match their record of fiscal responsibility against our record of fiscal responsibility any day. Well, they did it once, in November of 1975, and they're going to have another chance to do it before too long. The people gave their answer then, and next time the answer is going to come louder and clearer to that former Minister of Agriculture.

AN HON. MEMBER: That's sooner than you think!

HON. MR. McGEER: The part that's disappointing, Mr. Chairman, is that after that detailed account of what happened, the former Minister of Agriculture still hasn't realized what he and his government did.

AN HON. MEMBER: That's right!

HON. MR. McGEER: I suppose, if one were to compare the many disasters of the NDP in office, none would compare with this one for sheer idiocy and bad management. I include in that, Mr. Chairman, the $100 million clerical error of the former Minister of Human Resources (Mr. Levi) . I include in this comparison the disaster of the former Minister of Transport (Mr. Strachan) in his adventures into the insurance industry which, in two years, lost more money than any corporation in Canadian history and more money, as far as I can tell, than any insurance company anywhere, at any time, except one. Do you know what the one was? It was the Government Employees Insurance Company of the United States. But save for that insurance company, ICBC has lost more than any other. Yet for sheer bad judgment, sheer poor management, sheer loss of money relative to the opportunities to lose money, that former Minister of Agriculture holds the record. He holds the record from the former Minister of Municipal Affairs (Mr. Lorimer) and the former Minister of Lands and Forests (Mr. R.A. Williams) , who took B.C. Hydro from black ink to red ink in three short years and racked up record deficits in that corporation. It includes the former Premier and it includes the former Minister of Economic Development (Mr. Lauk) , who racked up record losses on B.C. Rail.

Now I could tell you, Mr. Chairman, that the competition for mismanagement of the public's money in various enterprises of that government was very stiff. To win the prize for the biggest booby with the people's money, which that former Minister of Agriculture did, was a job. But he did it, Mr. Chairman, and having done it, and a responsible minister having detailed for the record the story of what he did, he still got up and said that it was a marvellous venture if we'd only stuck with it. Heaven help us if we'd stuck with that former Minister of Human Resources, that former Premier, that former Minister of Economic Development, that former Minister of Municipal Affairs. Heaven help us if we'd stuck with them. I suppose the judgments of all of these ministers, even 18 months out of office, are still the same. If we'd only stuck with it for a few more hundred million dollars, we'd have been all right. Thank heavens for the judgment of the people, Mr. Chairman.

MR. COCKE: Well, Mr Chairman, we've heard it all now.

MR. LL KEMPF (Omineca): Hang your head, Dennis! Hang your head!

MR. COCKE: We've heard it, Mr. Chairman, from the Minister of Health, Education, and everything else that he observes; the minister who's going to build a monument to himself at UBC that's going to be one of the costliest fiascos that this province has ever enjoyed; the minister who has mishandled the people's money in education of people and mishandled the people's money on tertiary treatment throughout this province.

Mr. Chairman, if you bring me to order, I'll tell you something: you and I will have quite an argument, because he was all over the ball park, and that's precisely where I'll be, Mr. Chairman.

SOME HON. MEMBERS: Order!

MR. COCKE: Mr. Chairman, that minister neglected to say that the Crown corporations in this province that the NDP had something to do with, they happen to be the only things today that this government - and I'm talking about this new government - has going for it. You've got an outrageous financial statement, but the $42 million of the people's money that was invested in Crown corporations in this province will return, this year alone $250 million, but did they say that? No, no, no! Mickey Mouse over there, and Chips, and all the

[ Page 3159 ]

rest of them, are zeroing in on what they consider to be a fiasco.

But you know, that fiasco was one of their creation. Who closed it down? Who didn't give it a chance? That former Minister of Agriculture - not this one, not the NDP one, but the Minister of Economic Development (Hon. Mr Phillips) - has destroyed everything in his way and everything in his wake.

Mr. Chairman, the Minister of Education talked about the insurance industry. He, being the minister, knows that the government owed the Insurance Corporation of British Columbia a couple of hundred million dollars. He knows that because the legislation was there, the money was available when it was propitious that it be paid over.

So he begs the question, but he is now with the government that he criticized so for the $800 million loss on the Columbia River. He is with the Social Credit government who butchered the BCR which today is just the most monumental failure in North America as far as losses go. I understand it has lost over $200 million just in the Fort Nelson extension, let alone the Dease Lake and all the rest of it. I would hope that that Minister of Education will go back to a university and learn a little bit about accounting and that the accountant who is now the Minister of Agriculture will also spend some time studying accountancy.

Mr. Chairman, I would suggest to the Minister of Agriculture that he suggest to his colleagues, who 'haven't the courage to come to a public accounts committee meeting on either the BCR or Swan Valley, that they get to that public accounts committee meeting and listen to the facts from people who can give the facts - experts.

Mr. Chairman, we've heard a lot from these ministers tonight. It's interesting, but ironical in this respect: the government that was supposed to get B.C. moving again has got B.C. on the fastest-sliding chute to infamy that any government has in our history, and that includes the old Socreds. Their ferry rates, their tourism and all the rest of it has practically wrecked this province. Everything that they've done, Mr. Chairman, has been just another move with the wrecking bar. I hope that the Minister of Education goes back to his own portfolio. Hopefully he can do a better job of running that portfolio than he would do with Agriculture tonight.

MRS. WALLACE: I've asked the minister some questions about the $5 million and I'm not getting any answers. Are you prepared to answer, Mr Minister?

HON. MR. HEWITT: Just for the record, it's not, you might say, a $5 million expenditure that is being cut out, because in the last two years, 1975-76, the amount expended out of that $5,350, 000 was approximately $1.7 million. In 1976-77, it was $136 million. So it isn't $5 million that is being taken away. The demands on it weren't there. It was only a little more than $1 million that was spent last year. This year the commitment is $350,000.

But I would say that - again, to clarify some of the remarks - $350,000 is there for educational purposes to improve the agricultural efforts in developing countries. We have spent, since the first of this fiscal year, I believe, $121,280 on funding such programmes. So those programmes are ongoing. The Premier did state in his remarks, and I believe I stated in my remarks on Friday, that where there were situations where world disaster occurs, assistance will be forthcoming.

Then you suggested we are saving money in the fact that we have cut down this $5 million in the budget. You are probably aware of it because you have the estimates in front of you. But my budget increased from $57 million last year to $64 million, an increase of $7 million, even with that reduction in the agricultural aid programme of $5 million that you mentioned. So there is a substantial increase there. We aren't cutting back. We had additional expenses that we had to meet this year in various programmes, so it is not as though we are cutting back. We have spent more in the agricultural ministry.

MRS. WALLACE: The minister said there were substantial increases in his budget. It's true he has that $5 million to play with, but certainly the increase is barely in line with inflation. It's not any great increase. There is some small amount added ...

HON. MR. HEWITT: You know where it is? It's all in farm income insurance.

MRS. WALLACE: ... as far as income assurance goes. That, of course, indicates two new programmes on line.

He has indicated, too, that the $5 million was not needed, that the programme only spent $1.7 million and $1.3 million. I would suggest, Mr. Chairman, that in effect it was a new idea to use this idea of matching funds with organizations. It was first introduced in 1975, and there was a process building up where more and more organizations were becoming aware. They were gearing up and getting together their funds for the matching-fund portion. Now the fact that this has been cut off is going to mean that that is all dropped. I would suggest that by holding that $5 million in abeyance to be used, it would allow these organizations to add to their applications and to continue to put together and administer those programmes that were so much a part and parcel of this very well-thought-of programme which was doing so much in those

[ Page 3160 ]

undeveloped countries.

I'm still not really satisfied, Mr. Minister, that you have made the necessary provisions for the kind of demand that is out there. I know there's a terrific amount of public sentiment that's very concerned about this matter. I know that at this point in time it's not very likely that you're going to amend your estimates; I think that would be a first in history. But I just can't impress too strongly upon you how important I feel it is and how important we on this side of the House feel it is, and how important a great many of the citizens out and about this province feel that that $5 million be reinstated as a continuing and ongoing thing - not something that s here today, gone tomorrow, but something that is there with some guarantee and assurance.

Certainly there are organizations that have to work on a voluntary basis, collecting money to come up with these kinds of matching funds to put together the kind of programmes and do the research that is necessary, You can't just pull that kind of a programme up and down like a window blind. There has to be some assurance of a continuing fund there, and it's most disappointing to me to find that that has gone this year.

I'd like to turn now to some specific matters that I wish to discuss, and I can only reiterate what the member for Esquimalt (Mr. Kahl) has mentioned about the dog situation. It's something that's causing a great deal of problems, and not just in the Capital Regional District here. The member for Esquimalt talked about the problem that they are having in the Colwood and Esquimalt area, but I can assure you, Mr. Minister, that this is a. problem all over the province. It seems to me that it's been very short-sighted of this government to leave such a vacuum by withdrawing programmes before there was something else to put in its place, because the dogs and the sheep. and the problems are still there. It's putting the cart before the horse to withdraw a programme before you have something in place and ready to fill that vacuum.

I would hope, Mr. Minister, that if you are prepared to listen to the member for Esquimalt and keep a protection officer in that particular area, you will not consider that that is the only one that merits that kind of consideration, because there are other areas in this province that need domestic protection officers just as badly as do Colwood and Esquimalt. As far as your point of view that it is not really the Ministry of Agriculture's responsibility, I would suggest that that is probably true of Colwood and Esquimalt because they are very urban areas. But there are a great many areas that are agricultural and that are concerned about this thing.

I quoted to you earlier the number of sheep that had been killed by dogs on Saltspring Island. There were 208 sheep killed on Saltspring Island in 1976.

Up until the spring of this year, 185 had been killed. That is a very grace economic loss to the small, average-sized sheep rancher, Mr. Minister. It's not the kind of loss that those sheep people can afford to absorb. I know we have had some correspondence on this. You have suggested that the RCMP can be involved. I have a case history that came to my mind the last time I was in my Duncan office.

This was in the Cobble Hill area. A dog came in and killed a coop full of chickens. They caught the dog and it was unlicensed. They contacted the RCMP. They had a dog, a proven killer of chickens, and they contacted the RCMP. Do you know what the RCMP told them, Mr. Minister? They told them to kill the dog themselves. They refused to come out and just said: "Kill the dog yourselves."

This chicken rancher did not wish to take that responsibility on his own. He did not wish to kill the dog and, besides, I don't believe he had a gun or anything to kill the dog with. He contacted a neighbour and asked the neighbour to come and kill the dog. Again, this neighbour did not wish to go in and shoot someone else's dog, even though it was not licensed.

This went on from June 7 to June I I before the RCMP finally came and arranged to have someone take the dog away. I think it wound up in the Good Shepherd shelter.

These are the kinds of things that are happening, Mr. Chairman, with the lack of dog control. It has been a year now. We talked about this last year in the House. We asked questions about it and nothing has happened. We have some municipalities that have some control, that's true. But in the unorganized territories where the need is primarily agricultural, you have withdrawn the only protection the farmer had, Mr. Minister. You have left a vacuum and put nothing in its place for a whole year. I suggest this is really backward, Mr Minister, to approach it in that manner.

Another question that's been raised by other members on the floor today is the question of slaughterhouses. I have a letter here from the Cowichan Agricultural Society. It's a copy of a letter to the Premier, and it reads in part:

"At a recent meeting of the board of directors of our society the closure of the last federally inspected slaughterhouse was discussed. It was pointed out that there are still a number of provincially inspected plants in operation but that the province of B.C., along with most of the large chain stores, buy only meat from federally inspected plants."

Now this means, Mr. Chairman, that most of the meat in B.C. must be brought in from other provinces. Our local producers have difficulty enough selling their product without that kind of handicap. The secretary of the agricultural society in the

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Cowichan Valley is suggesting on behalf of his organization that at least the province should buy meat from plants under their own inspection or attempt to have a plant that is presently under provincial inspection changed to federal inspection in order to keep the market for our producers. Now I would urge, Mr. Minister, that you give some consideration to doing something that will protect the farmer along that line.

Another unrelated and different item that I want to talk about, Mr. Chairman, has to do with land-clearing contracts. When you have a government contract, the farmer cannot collect any moneys until the land is ready for crop. Now I would suggest, Mr. Minister, that that means a long delay. A contractor who goes out and does the same thing can collect as soon as he cuts and piles the trees, or he can collect at various stages of progress. But my understanding is that under a government contract you cannot collect until you are ready for planting - ready for crop -and that's a very long time delay.~ If my information is incorrect I would be pleased if you would correct me but this is the information I have from one of my correspondents.

One other item that I have is based on a letter from the agricultural credit branch, dealing with agricultural credit. I realize that he was in contravention of the Act in this instance, but what I'm suggesting, Mr. Chairman, is that there should perhaps be a review of this particular piece of legislation.

Under the Act, only interest paid through either a chartered bank, credit union, Farm Credit Corporation, Federal Business Development Bank, or Veterans' Land Act is eligible for benefits of the programme. In this particular instance this man financed through the machinery company. It doesn't matter what the manufacturer was. He took advantage of their own credit plan. Apparently because of this he was not eligible for the interest rebate on the loan.

It's very normal to finance through your farm machinery sales company. I'm wondering if the minister would consider amending the legislation to allow that kind of loan to come under the agricultural credit corporation.

HON. MR. HEWITT: The member for Cowichan-Malahat made the comments about the withdrawing of a programme under the Domestic Animal Protection Act. The Domestic Animal Protection Act is a continuation, I guess, of the original Sheep Protection Act that was in place.

We have, as I mentioned earlier, one staff member still on duty. We only had three part-time people, and one of those part-time people was involved more in people and dog control as opposed to domestic animal protection. In other words, where dogs were harassing young school children, the domestic animal protection officer was involved.

We communicated with all regional districts back in November, suggesting to them that we feel that the dog control programme should be under the regional districts and we would assist in setting them up. In discussions with the Capital Regional District, we said we would have an ongoing situation this year and we're going to again encourage the regional districts, including the Capital Regional District, to include it in their budgets next year so that they can collect the revenues. All that we do in funding that one person is collect licences; out of the collection we pay the cost of the officer. We're saying that the regional districts could control that better.

Slaughterhouses - I believe that you were relating to Intercontinental Packers when you said it had closed. As I understand it, the hog slaughter part of the slaughterhouse closed. They used to slaughter something like 1,000 or so hogs a day; they're down to 250. It's not economically feasible and they closed it. But their beef slaughter line is still open. There is Richmond Packing, which is federally inspected, as I understand it, and Coaspac, which is also federally inspected.

The next question: I'm sorry, I missed it and I would ask that the next time you raise a question you repeat it.

With regard to the Agricultural Credit Act and your request to review chartered banks and the fact that they and the credit unions - VLA, and farm credit - want to get involved in short-term machinery company financing: the legislation, of course, as you know, when it was written didn't include those companies that finance their own equipment. Just with the ones we cover - which, of course, I think would make up a good percentage of the amount of financing that is done - our expenditures for 1976-77 fiscal year were $7.5 million, a considerable amount of money.

Mr. Chairman, with regard to the agricultural aid of $350,000, as I mentioned, $121,000 of that has been spent since the first of the year, and I thought that maybe in the last few minutes I'd give you some indication of what it was spent on.

There was a YMCA New Guinea project which we spent $22,000 on to assist a programme there; CARE in Colombia; integrated community services water system in some rural communities, $10,000; World Vision India, integrated rural development project for drought areas in the Raman district, $7,000; Canadian Hunger Foundation, Dominican Republic, rice production and processing - another area where assistance is given in developing industry and techniques or irrigation systems for those countries that need it.

Mr. Chairman, there is just one comment I would like to make in regard to some of these programmes

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that are going on. They certainly are needed; there are no two ways about it. There are some areas in the world, whether you call them developing countries or Third World countries, that have serious problems with regard to assistance. Education, I think, is a very important aspect of this agricultural aid, and that is where these dollars are going.

In Tibet, the Tibetan Refugee Aid Society is involved in settlements in India. In Angola there is the re-establishment programme with regard to rehabilitation of thousands of returnees through a series of reception centres. There is assistance given in Bangladesh. The Canadian Lutheran World Relief in Indian has a West Bengal programme. There is the Save-the-Children Fund in Thailand and Laos with food for children. The total amount that we have contributed - and "invested, " I think is probably a pretty good word - is $12 1,000 since the first of this year.

The House resumed; Mr. Speaker in the chair.

MR. W.S. KING (Revelstoke-Slocan): On a point of order, Mr. Speaker, during the committee the Minister of Agriculture referred in very detailed fashion to a variety of documents in discussing the Swan Valley Foods plants at Richmond and Creston. I would ask that the minister undertake to table with the House those reports that he referred to.

HON. MR. HEWITT: Yes, Mr. Speaker. I'll endeavour to do that tomorrow.

MR. BARRETT: On a point of order, Mr. Speaker, according to the rules of this House, once the minister reads from a document he is to file those documents in the House at the earliest possible opportunity, and that is now. If he had the documents and read them, he should file them now.

MR. SPEAKER: Hon. Leader of the Opposition, speaking to your point of order, I appreciate what you have said. The hon. minister has indicated that he would file the documents with the House tomorrow. If he does not have them tonight, I think that's permissible. Is the hon. minister prepared to file the documents tonight or tomorrow?

HON. MR. HEWITT: Well, Mr. Speaker, the documents are part of a great number of papers and excerpts. I just want to make sure I file everything that the members require. That's why I'd like to do it tomorrow.

MR. BARRETT: Mr. Speaker, the rules are explicit, and to avoid any suspicion that any document is tampered with or changed or anything else, we're asking that it be tabled as read, according to the rules of the House, now. He has the documents, he referred to them, and he must table now.

MS. K.E. SANFORD (Comox): He can add some more tomorrow, if he wants.

MR. SPEAKER: Order, please.

MR. KING: Do the honourable thing and don't hold up the House.

MR. BARRETT: Don't read from them until you're prepared to file them. Those are the rules of the House.

MS. SANFORD: What's he nervous about?

MR. STUPICH: What's he hiding?

MR. KING: Open government, eh?

MS. SANFORD: Table all that stuff and bring the rest tomorrow. What are you worried about?

MR. COCKE: What are you reneging for?

MR. BARRETT: Table what you have now.

MR. SPEAKER: Order, please. Hon. members, may I make this observation? First of all, when we are in Committee of Supply, which we were in, there is nothing in the rules that says that when a minister refers to documents in Committee of Supply they must be tabled.

The other suggestion I have to make to you is that the minister has given an indication to the House that he will file the documents with the House tomorrow. Now that's an undertaking on his part which I think should suffice for this evening. There is nothing in our rules that says that a minister who refers to documents in Committee of Supply must immediately file those reports or those documents with the House.

MR. KING: Proceed, Mr. Speaker.

MR. SPEAKER: You've had an undertaking from the minister, which I think should be sufficient in terms of the parliamentary process to all other members of this House.

MR. BARRETT: Mr. Speaker, on a point of order, it is not a suggestion or an undertaking that I accept. I abide by the rules of this House.

In committee the minister stated he would table the documents. When we come out of committee we are governed by the standing rule of this House, and

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that is that when a member speaks to a document he must file that document. That is the practice and the standing order of this House, if the committee Chairman in reporting was well aware that that is part of the report to the Chair. The minister made the undertaking in committee.

MR. SPEAKER: May I suggest to the hon. Leader of the Opposition that the Chairman of committee reported to the House? I put the question: when shall the committee sit again? Before I was able to take the vote it was interrupted by a point of order; I've given you the opinion of the Chair on the point of order.

MR. BARRETT: A point of order.

MR. SPEAKER: What is your point of order?

MR. BARRETT: You have stated that you waited for the committee report to put the motion, and you've not put the motion. That is why the member rose on a point or order, as you so correctly pointed out. The member's point of order deals with the report from the committee. We cannot go past that until that point of order is satisfied. The report from committee, which was not complete.... We informed the House that the minister stated he would file the documents. I am suggesting to you, before you put that motion, that the relevant report includes a commitment from the minister to table those documents, as is a standing rule of this House. I urge you, Mr. Speaker, to follow that procedure, as is normal.

MR. SPEAKER: Hon. members, I have indicated to you that it is not a part of this Chairman's report, and it was not part of the Chairman's report. I have listened to you and to other members of the House. I have suggested to you that there is nothing that says that a reference in committee to documents must be filed with the House forthwith - immediately when the committee rises. You have an undertaking from the hon. minister himself, who has indicated that tomorrow he will file with this House the documents referred to by himself in committee tonight. It's an undertaking that I think all of the hon. members of the House can accept.

MR. BARRETT: On a point of order, I appreciate your opinion that the hon. members may accept it, but I don't accept it. When the committee reports when there is a request for a vote to take place, that is reported to the Speaker. In this instance, there is a request for tabling of documents that was raised at the proper time. I am not asking for your opinion as to whether or not I should accept his undertaking; I want the rules followed. I want those documents filed now, as a report from that committee ordered.

MR. SPEAKER: That's exactly what they're doing, hon. Leader of the Opposition.

MR. BARRETT: Mr. Speaker, are you ruling that the minister is not required to table those documents tonight?

MR. SPEAKER: Not at this particular moment, hon. member.

MR. BARRETT: Are you ruling that those documents are not to be tabled now?

MR. SPEAKER: You raised a point of order. I have spoken to your point of order and suggested to you exactly what it is. He has referred the documents in committee. There is nothing in the rules that Fm aware of that would require the hon. minister to file those documents immediately the committee rises. He has given his undertaking that he will file those documents with the House.

MR. BARRETT: Mr. Speaker, I'm not interested in his undertaking; I'm interested in your ruling. Are you ruling that he does not have to file those documents now? Is that your ruling?

MR. SPEAKER: There is nothing that I can find in the rules, hon. Leader of the Opposition, that requires the hon. member to immediately file documents when the committee rises.

MR BARRETT: Mr. Speaker, are you ruling that he is not required to file those documents now? Is that your ruling?

MR SPEAKER: That is my understanding of the rules.

MR BARRETT: I want your ruling. I want it clear.

MR. SPEAKER: That is my understanding of the rules. If you can find something that is contrary to that, would you bring it to my attention?

MR. BARRETT: I certainly will. Do you care for a recess? Because by the time....

No, Mr Speaker, if you want the rules brought to your attention, they should be brought now because it's a matter of privilege of the House in terms of his filing. If we wait overnight for me to bring it, then there's no ruling. Now you ask for citations; we'll bring those citations right now. Otherwise we have your ruling - one or the other.

MR. SPEAKER: Hon. Leader of the Opposition, you've asked for a ruling. You're about to receive it.

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There is nothing in the rules of this House that requires the minister to immediately file the documents upon the conclusion of the business of the day by the committee.

MR. BARRETT: That is your ruling?

MR. SPEAKER: That is correct. That's true.

MR. BARRETT: I challenge your ruling, Mr. Speaker.

MR. SPEAKER: Order, please. The Speaker's ruling has been challenged.

All those who support the Speaker's ruling please say "aye."

SOME HON. MEMBERS: Aye!

MR. SPEAKER: Those who oppose the Speaker's ruling say "no."

SOME HON. MEMBERS: No!

MR. SPEAKER: I believe the ayes have it.

AN HON. MEMBER: Division!

Interjections.

MR. SPEAKER: Order, please. The only point of order that's in order at the present time would be one that relates to the division itself.

MR. LAUK: That's correct. Mr. Speaker, I have noticed that the hon. Chairman of the Committee of the Whole House, which is the subject of this challenge, is sitting in his seat and is not entitled to vote on this division.

MR. SPEAKER: Hon. member, it's not a ruling of the Chairman which is presently under challenge, it's a ruling of the Speaker. It's not a ruling of the committee that's under challenge. Had it been a ruling of the Chairman of committee it would have been a proper point of order by yourself, but not when it's a ruling of the Speaker.

Interjections.

MR. KING: On a point of order, I appreciate that it is the Speaker's ruling that is being challenged and I would not think the Speaker should preside over that division; rather the Deputy Speaker should take the chair for the division.

MR. SPEAKER: The hon. member for Revelstoke-Slocan has been in this House many times when a Speaker's decision has been challenged. I can never remember - and I'm sure the hon. member can never remember - a time when the Speaker has absented himself from the chair.

Mr. Speaker's ruling sustained on the following division:

YEAS - 22

NAYS - 14

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

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

Hon. Mr. Mair moves adjournment of the House.

Motion approved.

The House adjourned at 11:18 p.m.