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CONTENTS

Routine proceedings

Accountability Act (Bill M 203) Mr. Gibson.

Introduction and first reading –– 751

Oral questions

B.C. Hydro policy on statements to media. Mr. Macdonald –– 751

Funding for rape relief centres. Ms. Brown –– 752

Leg-hold traps. Mr. Gibson –– 753

Use of 2, 4-D. MT. Skelly –– 753

Committee on Crown corporations. Mr. Stephens –– 754

Presenting reports

Committee on Crown Corporations first report. Mr. Veitch –– 755

Committee of Supply; Ministry of Finance estimates.

On vote 92.

Mr. Cocke –– 755

Mr. Macdonald –– 757

Mr. Barber –– 758

Mr. Gibson –– 763

Mr. Stephens –– 763

Hon. Mr. Wolfe –– 763

Mr. Barber –– 765

Hon. Mr. Wolfe –– 765

Hon. Mr. Bawlf –– 767

Mr. Barber –– 768

Ms. Sanford –– 771

Mr. Lea –– 772

Division on motion to rise and report progress –– 773

Mr. Lea –– 774

Hon. Mr. Wolfe –– 774

Mr. Lauk –– 775

Hon. Mr. Wolfe –– 775

Mr. Lockstead –– 775

Hon. Mr. Wolfe –– 778

Mr. Skelly –– 780

Hon. Mr. Wolfe –– 782

Mrs. Wallace –– 784

Hon. Mr. Wolfe –– 784

Mr. Gibson –– 787

An Act to Amend the Royal Canadian Legion Art (Bill PR 401) Mr. Veitch.

Introduction and first reading –– 788

An Act Respecting the Royal Trust Company and Royal Trust Corporation of Canada

(Bill PR 402) Mr. Strongman.

Introduction and first reading –– 788

Presenting reports

British Columbia Medical Centre fourth annual report. Hon. Mr. McClelland –– 788

The House met at 2 p.m.

Prayers.

MR. BARRETT: Mr. Speaker, in the gallery today are two guests from my old home town of Port Coquitlam. I'd like the House to welcome Howard and Dorothy Smith.

MR. KERSTER: I would just like to echo the welcome; the rug was pulled out from under me by the former member for Coquitlam. I would also like the House to welcome Dorothy and Howard Smith who happen to be very good friends from Port Coquitlam.

MR. KAHL: Mr. Speaker, I would like the House to welcome the Rev. Canon C.H. Butler, from Christ Church Cathedral. Rev. Butler said the prayer for us today, He's a constituent of mine and I'd like the House to bid him a special welcome.

MR. NICOLSON: On behalf of the member for Revelstoke-Slocan (Mr. King) , I'd like to welcome Marie and Dick Blithe of Nakusp to the House. Marie and Dick are the aunt and uncle of gallery member Paul Nicholson, and I wish the House would bid them a warm welcome.

HON. MR. NIELSEN: With us in the gallery this afternoon will be 20 students from Samuel Hearne Secondary School in Inuvik, Northwest Territories, accompanied by their teachers, Mr. Graham Swain and Mr. Dave Goeforth, along with Mr. Steve Boggis from Richmond Senior Secondary School. These students are part of the Open House Canada, and I would like the House to show its welcome.

MR. COCKE: Well, Mr. Speaker, this is an annual event. We have 53 people from the royal city, New Westminster, in our gallery today, checking us out, remembering full well that the capital still belongs in the royal city; but they're not letting their frustration go far enough to keep them away, and I would just like you all to welcome the New Westminster group.

MR. ROGERS: Also as part of Open House Canada programme, the Magee High School Band from Vancouver South constituency is hosting 60 students from Joseph Francois Perreault School in Montreal. They have come here, and they were playing in Sidney this afternoon and they will be in the precincts this afternoon, and I would ask the House to make them welcome.

HON. MR. BAWLF: Seated in the galleries today are the Szczecin Choir of Poland, which was founded in 1952. Their cultural exchange with the Vancouver Bach Choir, which takes place in April and early May of this year, is one of a long series of international tours undertaken by Mr. Szyrocki and his superb group of 45 singers. They have toured the world over the last 20 years, and received fame far and wide. They will be with us here in British Columbia from April 10 to May 6, and during that time will give over 20 concerts in such varied locations as the Orpheum in Vancouver, Pearson College on Vancouver Island, and Salmon Ann. I would ask the House to make them very welcome.

MS. SANFORD: I would like the House to join me in welcoming Rev. and Mrs. Malcolm Galbraith from Quadra Island, who are here today.

HON. MR. McCLELLAND: I would like, too, to welcome some people who are here on the Open House Canada cross-country exchange programme. They are in the precincts of the building now, and they are twinned with a school in my constituency, Fort Langley Junior Secondary School, and they have with them some students from three towns on the very tip of northern Newfoundland, Goose Cove, St. Lunaire and St. Anthony. I'm told that many of these students are descendants of the pilgrims who first came to our country; and I'd like all of us to make them welcome.

MR. COCKE: Visiting our galleries today, hosted by Crown Zellerbach Canada Ltd., are a group of students from New Westminster and its environs, and I'd like the House to welcome them.

Introduction of bills.

On a motion by Mr. Gibson, Bill M. 203, Accountability Art, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral questions.

B.C. HYDRO POLICY ON

STATEMENTS TO MEDIA

MR. MACDONALD: In line with our concern for openness in government, I have a question for the Minister of Finance. I have here an

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inter-office memorandum of B.C. Hydro, dated April 13, after Messrs. Young and Turnbull asked their questions of B.C. Hydro which were not answered at the top, and which indicates that after the meeting of the management committee, division managers and all of the supervisors - who, I think, would be 700,800 or 900 people - were not to respond to the media or to media discussions, whether it be confidential data or in supplying material from Hydro records - so, really anything -without going through the top, through Mr. Nash or Mr. McCarthy. I'm asking the Minister of Finance if that is the policy he approves of and which he has instructed Hydro to institute. I'll send a copy over to the minister.

HON. MR. WOLFE: Mr. Speaker, I'm not aware of this policy or the memorandum the member is alluding to. I think perhaps he should supply me with a copy of it.

MR. MACDONALD: Then the minister is saying that he didn't authorize the issuing of these instructions.

Interjections.

MR. SPEAKER: We cannot hear the question, hon. members.

MR. MACDONALD: Mr. Speaker, the minister has had the memorandum. Was it issued with his approval or on his instructions?

HON. MR. WOLFE: I think that question could be considered inadmissible, Mr. Speaker, on the basis of policy. I'm not aware of the memorandum or of the policy. But it seems to me to make reason that questions directed by the press should be directed at certain officials in the company.

MR. MACDONALD: On a supplementary, is the minister saying that a divisional head, say, of transit, can't answer questions about matters of current operations directly to the press without going through Charlie Nash or somebody who is an executive assistant to the chairman of Hydro? Is that the policy of the minister who is a director of Hydro?

HON. MR. WOLFE: Once again, Mr. Speaker, the member is asking a question relating to policy, which I think is clearly out of order.

SOME HON. MEMBERS: Oh. oh!

MR. BARRETT: A supplementary, Mr. Speaker.

I'd like to ask the Minister of Finance: what is his opinion of muzzling Crown corporation employees from speaking to the press?

MR. SPEAKER: Order, please.

MR. BARRETT: Is that out of order?

Interjections.

MR. BARRETT: Well, I've got the floor, not you.

MR. SPEAKER: Order, please.

MR. BARRETT: Can I ask this of the minister? How many ministers do you need to defend you in question period?

MR. SPEAKER: Order, please, hon. members. Questions that seek for opinions or questions that are argumentative in their structure are certainly not in order in oral question period.

MR. LEVI: Could the Minister of Finance inform the House whether he's attended any board meetings of B.C. Hydro at which the matter of communications with the press has been discussed?

HON. MR. WOLFE: I've attended one meeting of Hydro, and the matter of communications with the press was not discussed during the course of that meeting.

FUNDING FOR

RAPE RELIEF CENTRES

MS. BROWN: My question is directed to the Attorney-General. The very valuable work being done by the Rape Relief Centres of B.C. will be terminated on March 31 when their interim funding runs out. As you know, Mr. Attorney-General, they've applied to you for $75,000. Is your department currently studying this application, and will they get it in time so that they can meet their payroll on Friday?

HON. MR. GARDOM: I wish I could give you a specific answer to that question this afternoon. I can't, but I will endeavour to get one before the week is out. I can respond to this extent: I'm aware of it, and yes, we are studying it. Hopefully everything will work out okay.

MS. BROWN: I have a second question to the Minister of Health. It's the same question, and the amount applied for was $85,000. 1 am

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wondering whether the minister is currently studying this application, and whether they will receive their cheque in time to meet their payroll.

HON. MR. McCLELLAND: Well, yes. The answer is yes, we are studying the request, as we do with every grant request. It's my understanding that we've already notified the rape relief organization that we will.... Yes, we have, Mr. Speaker. As we have with every other organization which has received grants from us in the past year, we will be granting at least to the level of the last grants and, on that basis, we have been sending out interim cheques already.

Interjection.

MS. BROWN: Yes, I did see the film, a very good film. Excellent film.

I think the urgency and the reason why the Rape Relief Centres got in touch with me is because their payroll comes up on Friday -that is the urgency - and they're just wondering whether the cheques will arrive in time to meet their payroll.

The same question is directed to the Minister of Education, Mr. Speaker. You received an application for $25,000 from the Rape Relief Centres, and they are wondering whether their application is currently being studied and if they'll receive their cheque in time to meet their payroll on Friday.

HON. MR. McGEER: Mr. Speaker, I'm not aware of any application from the Rape Relief society from the Ministry of Education, but I will check into it. I can, however, tell the member and the members of the House that the few grants that are given by the Ministry of Education are given for strictly educational purposes to school-age children where it spans more than one school district.

LEG-HOLD TRAPS

MR. GIBSON: I have a question for the Minister of Recreation and Conservation. Mr. Speaker, last year the minister made what I took to be a promise to this year introduce legislation with respect to control of leg-hold traps. I was disappointed to see there was no mention of this made in the opening speech. I'd ask the minister what his plans are in this regard.

MR. LOEWEN: What's wrong with leg-hold traps?

HON. MR. BAWLF: Mr. Speaker, I think it would be improper to answer a question which is out of order on the grounds that it's dealing with a matter of policy, but I'm sure we will be able to deal with that in my estimates.

MR. GIBSON: Are you going to do it or not?

USE OF 2, 4-D

MR. SKELLY: To the Minister of Environment. Has the ministry obtained approval from Agriculture Canada to use the 2, 4-D compound Aqua-Kleen 20 in Osoyoos Lake on Project 139-1-78, contrary to the label restrictions, which state: "Do not apply to waters used for irrigation, agricultural sprays, watering dairy animals, or domestic water supplies."?

HON. MR. NIELSEN: No.

MR. SKELLY: Supplementary. Is the minister aware of a critique of the ministry's monitoring studies of the 1977 program which points out inadequacies in sampling methods, lack of control over variables such as current velocities through open test sites, which tend to dilute residue readings, and lack of monitoring for 2, 4-D breakdown products such as 2, 4-dichlorophenyl, which is equally toxic but peaks in toxicity at a different time?

Interjection.

MR. SKELLY: Translation will be provided.

HON. MR. NIELSEN: Mr. Speaker, I wouldn't attempt to identify that particular critique because it could come from any number of publications, but there have been many publications offered, and certainly those people responsible within the ministry have read most of these offerings. Perhaps that's included in one I don't know.

MR. SKELLY: A final supplementary, Mr. Speaker. Is the Minister of the Environment satisfied that a government agency that conducts a pesticide application project should monitor the results of its own application project?

HON. MR. NIELSEN: The persons responsible for the monitoring are competent and I believe that if they are within the same ministry, that is not improper. They are competent people. The environmental laboratory is competent to carry out the tests, and of course, that doesn't mean that any other

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ministry of government or any other agency of the federal government or others cannot also conduct monitoring tests. In fact, we would co-operate with them.

COMMITTEE ON CROWN CORPORATIONS

MR. STEPHENS: Mr. Speaker, my question is for the member for Burnaby-Willingdon (Mr. Veitch) in his capacity as chairman of the Committee on Crown Corporations. I would like to ask him if he can assure us that Messrs. Turnbull and Young, the two Province reporters who asked the questions of the Minister of Finance, will not be subpoenaed before the committee and not be asked questions concerning their sources and their story.

MR. SPEAKER: Hon. member, the question is out of order on at least two counts. First, it is pre-empting a committee's report, and secondly, it asks for commitment of policy. As a result, the question is out of order.

MR. STEPHENS: I wonder if I might direct that question to the Minister of Finance and word it otherwise. Has he taken any steps to protect the custom of these two men to protect their sources so that they will not be subpoenaed and asked questions which he himself could not ask?

HON. MR. WOLFE: Mr. Speaker, I think the question pre-judges what the committee might elect to do or what course of action they might take. I don't know if it would be in order to direct that to me. I have referred a matter to them, which they may or may not see fit to deal with.

MR. STEPHENS: Does the minister not consider it of grave concern that a committee with these powers might, in fact, ask those questions and has he not considered the dangers involved in sending it to the committee?

AN HON. MEMBER: What dangers? Tell us about them.

MR. STEPHENS: What do you mean "what dangers?" The dangers of cross-examining newspapermen on their story, which the minister doesn't have.

MR. SPEAKER: It's a matter which has clearly been referred to the committee.

B.C. RESOURCES INVESTMENT CORPORATION

MR. BARBER: My question is to the Provincial

Secretary. It concerns the British Columbia Resources Investment Corporation. The Act itself, establishing the Resources Investment Corporation, says in Section 1 in the definition section: " 'Minister' means that member of the executive council charged by order of the Lieutenant-Governor-in-Council with the administration of this Act." Can the minister inform the House of the name of the member of the executive council who has been charged with the administration of this Act by order-in-council?

HON. MRS. McCARTHY: Mr. Speaker, I will take that question as notice.

MR. BARBER: A new question to a different minister on the same topic, hoping that someone aver there knows who's in charge of this corporation. My question is to the Minister of Finance. Having asked him last what hopefully he has learned overnight, can the Minister of Finance tell the House which member of the executive council has been charged with the administration of this Act and with carefully looking after $151.5 million in public assets for which the new corporation is responsible? You were asked last night. Surely you found out now who's in charge of the corporation. The Act requires the name of someone. Who is it?

MR. SPEAKER: I think the question is clear.

HON. MR. WOLFE: Mr. Speaker, the answer to that question lies in an order passed November 7, order-in-council 3328, which is public knowledge. I would think the member would have made himself aware. It orders that the Premier and the president of the executive council be charged with the administration of the British Columbia Resources Investment Corporation Act.

MR. SPEAKER: Order, please, hon. members.

MR. LEVI: Mr. Speaker, just during question period, in respect to the Minister of Finance's "referring, " you said "the matter, 11 which was presumably what the minister dealt with last week in the Crown corporation committee, had been referred to the committee. I would point out that nothing was referred by this House to that committee. It was not a referral of the House.

MR. SPEAKER: Thank you. I will take it under advisement.

Presenting reports.

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Mr. Veitch from the Select Standing Committee on Crown Corporations presented the committee's f first report, which was taken as read and received.

Orders of the day.

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

ESTIMATES: MINISTRY OF FINANCE

(continued)

On vote 92: minister's office, $105,330 -continued.

HON. MR. GARDOM: Do the ayes have it, Mr. Chairman?

MR. CHAIRMAN: I'm afraid not. The member for New Westminster has it.

MR. COCKE: The Attorney-General has ayes on his mind today. The ayes will have it, I would say, when there are some questions answered from the Minister of Finance (Hon. Mr. Wolfe) . I recognize that he gave a list of answers to specific questions which were those kinds of questions that one would expect answered very readily, but some of the questions yesterday have not been answered. But I'm not going to go over them. I'm going to suggest, Mr. Chairman, that the minister in his windup of the budget debate should have answered some questions that came up during that budget debate.

I of ten think of that minister as the chief of the moneychangers in this temple and, as such, chairman of Treasury Board. The government members over there smile because they know exactly what is implicit in that: implicit in that is that he gives a great deal of direction, if in fact he is the Minister of Finance. We were witnessing a Charlie McCarthy job earlier today, with the Minister of Education (Hon. Mr. McGeer) answering questions that over here were inaudible, but I suggest that some heard them over there.

Mr. Chairman, it was from that minister's policy as chief of Treasury Board that: No. 1, we had a budget that provided an increase to the government of 9.8 per cent; No. 2, the instrument, the document that was presented to everybody in the House, was a document of restraint asking everyone to restrain themselves. But I suggest, Mr. Chairman, that that's the very thing that that minister did not do. What he did by his own "restraint" -and you can't really call 9.8 per cent hard restraint - is what he did in terms of local taxpayers. The local taxpayers under that minister have been smitten worse.... The two of them are sitting close together. It's really appropriate that they should sit so close together, because the school taxes are the ones that hurt the worst.

Over the last two and a half years the increase in mill rate has been 50 per cent. It's gone from 26 to 39 mills; that's a 50 per cent increase in anybody's books. At the same time we've had an increase in our general assessment of the province, and that is something that I've already talked about. Now that increase in assessment of another 20 per cent really places on the local taxpayers a total of over 60 per cent in terms of increased burden. It's the government of restraint - restraint as long as they can look like they're restraining, but let anybody else carry the can for them.

Mr. Chairman, that's the real criticism because this government has a long list of crimes in that respect. I've got a list here and it's just a partial list. In terms of all the increases, I've listened to small businessmen all over this province talk in terms of cash flow. Why are they worried about cash flow? They're worrying about cash flow for one good reason - this government is grabbing it all themselves and not leaving it out there for the small businessmen.

The only one who has any chance of doing business is the one who is pointing his fingers at me. People continue to die. I guess you'll continue to live as a small businessman, but in the rest of the small businessmen, there is some kind of reluctance on the part of the people to spend their money on anything but the absolute necessities.

Mr. Chairman, I'm going to ask the minister a question.

HON. MR. WOLFE: Good.

MR. COCKE: I can take 30 minutes to ask this question, Mr. Minister.

HON. MR. WOLFE: I just said %good."

MR. COCKE: Well, don't keep me going because you know that's the sort of motivation I need.

MR. CHAIRMAN: Order, please.

MR. COCKE: Mr. Chairman, I'm going to ask the minister this question.

HON. MR. WOLFE: You're a good fellow. Ask me a question.

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HON. MR. McGEER: He didn't get a question out all yesterday afternoon.

MR. CHAIRMAN: Order, please.

MR. COCKE: Mr. Chairman, I'm going to digress, just for the fun of it. Yesterday afternoon the Leader of the Opposition (Mr. Barrett) asked a number of questions, and one particular question so many times that it was uncalled for that the minister didn't stand up and at least present a position to the House.

But anyway, Mr. Chairman, I'm going to just ask the minister when he is going to take the plight of the small businessperson in this province seriously, and when he is going to talk Treasury Board and the government into reversing their field in this matter. When will this minister and the government understand that they are the ones who have brought this doom and gloom to our province, the doom and gloom being the 30 per cent of bankruptcies in all of Canada that are happening just in our province alone.

I want to just get back for one second to the damage your school tax situation is doing. Because of that minister's policy as chairman of Treasury Board, the school tax burden on the local taxpayers in the city of New Westminster is 90 per cent. We pick up 90 per cent of the load in New Westminster. In Vancouver they're picking up roughly 93 per cent of the load. Now if that isn't a crime....

Mr. Chairman, what this government promised to do when they came in was to get government involved in that question and, instead of that, they've got government right out of it. If they could, they'd dump the whole load on the local taxpayers all over the province. There are now three or four school districts in this province who carry the entire can, 100 per cent. It's agreed they've got a very heavy tax base. But I know our little area, New Westminster - with a tax base that's nothing like it was at one time, an industrial tax base that has been hurt by fires and other things, a tax base whose commercial aspect has been hurt - cannot afford 90 per cent of the load.

Mr. Chairman, I suggest that this minister take back to his Treasury Board colleagues, take back to his government colleagues, some of the messages that are out there. If he's not listening to the people, then maybe he should listen to some of us here.

MR. LOEWEN: The chamber of commerce said they haven't heard from you for three years.

MR. COCKE: Mr. Chairman, the chamber of commerce haven't heard from me for three years. The member for Burnaby-Edmonds (Mr. Loewen) has this to say, the most significant thing he's said this year.

MR. LOEWEN: True.

MR. COCKE: How can you defend yourself, that member who represents Burnaby-Edmonds so well in this Legislature? Mr. Chairman, I qualify it by saying that I leave it for them to judge next time round. And I once again extend the invitation: if he would like to run against me, I'd love to have him.

HON. MR. WOLFE: He'd love to have you, too.

MR. COCKE: Mr. Chairman, it all goes back to this: the whole phenomenon started with the increase in ICBC rates, it continued with the increased ferry rates, then sales tax - which, incidentally, this minister, when he got up during the budget debate, took all the credit for ' because it was 2 o'clock in the afternoon and at five o'clock in the afternoon we found out it was Jean Chretien that had given him a bonus, had given him nine months of that reduction in sales tax. That was a great gift. I didn't notice in the budget speech, however, him giving the Liberal government any credit for having passed on this fair amount of change to the provincial government.

We saw it going on in medical care premium going up from $5 to $7.50, we saw it in bus fares, we saw it in electricity rates and everything else that the government is responsible for. But the bottom line, under this Minister of Finance has really cost us, because it has ground us to a halt. The same group that he represented - as a candidate trying for election to the Legislature - who said "Let's get B.C. moving again, " has brought this province to a grinding halt, just because of their archaic, conservative, 19th century policies.

Mr. Chairman, how much proof do they need? You know, the thing that I resent - almost more than anything, because of the fact that it was part of my old area - was when they found it useful to bring up their ambulance charges from $5 flat to a $15 fee, plus 15 cents per kilometer beyond 15 kilometres.

AN HON. MEMBER: You know better than that.

MR. COCKE: I don't know better than that. I know exactly that. That's exactly what you did, and this is the government that you support, and you go and tell the people that

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you support a government with absolutely no heart - tin men.

Interjections.

MR. CHAIRMAN: Order, please.

MR. COCKE: Mr. Chairman, they are getting excited because they know perfectly well that these are the questions that everybody in this province is asking the Minister of Finance. And they're asking him, as the president of Treasury Board, when he's going to start giving some advice to that government that will start turning us in a direction in which we can look forward with some eager anticipation, instead of apathy, to the future.

MR. MACDONALD: Mr. Chairman, to the Minister of Finance. Last night we had, partly as a result of my questions but mostly of those from the member for Victoria (Mr. Barber) , some amazing answers from the minister. He said, in effect, this: that, in evaluation of assets that totalled $151 million - including $64 million of Can-Cel, which I wanted to discuss briefly - four firms were called in from the private sector. I think they were Ames, McLeod, Pemberton and Richardson; and in the important valuation of these assets they didn't charge any fee, but these assets are in the process of passing from public ownership to private ownership. Would there not be a tendency on the part of those firms to undervalue the assets?

I think it is amazing that we do not have proper appraisals of public assets before they pass out of the control of the public sector. The Minister of Finance has not filed any appraisals. I don't know to what extent they exist. He has taken the opinion of these four companies. I see a very arrogant attitude on the part of the government in terms of answering questions about that corporation, public as it is at this stage, although it will not be public for long because it will float shares and pass into private control, and pass, inevitably, into the control of a few large shareholders.

I find it very difficult to accept the valuation that has been placed upon Can-Cel. I have here an article on the latest annual meeting of Canadian Cellulose, which was in The Province of April 22. "Can-Cel Sees Its Profits Take a Sharp Drop." That is true; the kraft pulp market is down. That's a temporary situation. But they are still well in the black and making a good profit. Mr. Watson, chairman of the board, said he's "reasonably optimistic about the rest of the year and said Can-Cel's lumber business is expected to continue operating profitably. The added capacity from the startup next month of a new sawmill in Castlegar is also expected to boost performance. Of course, Can-Cel is totally renovating one of the two kraft mills at Prince Rupert.

It's true that the shares of Can-Cel have been trading in the area of $6.75, but it is also true that the shares traded are only a very small minority possibility within the company; 19 per cent of the capital of the company is privately held. I've never known the minority shareholding of that to reflect on the market the true value of the operation. The minority share tradings are always below real market value. I suggest they are far below the book value of Can-Cel.

We have here one of these people who goes to the company meeting - and he must be a pretty substantial individual, because at the meeting:

"The board of directors were again quizzed by shareholder Irwin Miller, of Montreal, who said he represented over 200,000 shares. Miller has been a perennial questioner at Can-Cel annual meetings and his chief complaint is that the stock is undervalued. Can-Cel shares are currently trading in the $6.50 range.

"Miller was critical that the government had transferred its shares to the investment corporation at a reported value of $6.40. He claimed the book value of the shares is close to $10 and 'in my opinion the shares are worth from $40 to $50 a share.' "

I don't know about the last statement, but I would think that if you took the book value of the Can-Gel shares, which is a very large operation - kraft pulp mills, sawmills and a tremendous tree farm licence that is being harvested mostly by Twin River Timbers, its subsidiary, and is a very big section of the province of British Columbia granted out on a tree farm licence consisting of tremendous acreage and in terms of square miles - you would find it was much above $6.40 per share.

I notice, for example, that on the latest balance sheet for the year ended December 31,1976, its assets continue to grow. Accounts receivable are $26 million; inventory is $69 million; fixed assets are $76 million. The fixed assets alone are more than the amount.... I know it's subject to a mortgage, which has been reduced from $72 million when the NDP took it over to about $40 million today in two debenture loans - a big reduction in debt. So you can't take the fixed assets

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alone. But it also has retained earnings of some $36 million.

Obviously the minister has quoted a figure to this House which undervalues Can-Cel as an operation. If there was a takeover bid for that operation, inevitably in every case I've ever read of the takeover bid would be for a price for the shares that was well in excess of what was being paid on the market. And when those shares are only 19 per cent of the outstanding capital, as I say, that's a fairly depressed value anyway. 1 hope the minister is not going to part with public property on this kind of very flimsy basis of talking it over with four firms that are in the investment business. They may also be acting for clients who may buy into the new investment corporation and may end up controlling Can-Cel. Once the investment corporation has a majority of control in the private sector, they can sell off this asset completely, and it may even come under international ownership again which it was saved from under the NDP administration. Surely the minister ought to have better financial information than that before he takes a public asset and transfers it to a corporation which is very shortly going to be under private control.

We are not at the stage now where the corporation is issuing its prospectus, which might be two years down the road, giving the financial facts of the operation at that time so that investors may make a prudent or imprudent investment as they see fit based on the facts.

We are simply at the stage now where the government of British Columbia has taken an asset owned by all of the people of the province and transferred it to a corporation which it is going to put under private control. At that stage, the people of the province have a right to demand - and it may be their last chance - that they get the proper price for that asset which is passing out of their control. It's going to be too late in the future. If we were dealing, say, with a private company which was going to be the subject of a takeover bid, there would be careful appraisals and court supervision of the amount offered in the takeover bid and a fair meeting of the shareholders and a chance to appeal to court under the new Companies Act. But here are the people of the province of British Columbia, who for the first time in their lives for most of them - 95 per cent of them - are shareholders in a large and successful lumber and pulp and logging operation, being divested of their asset based upon some conversations among four investment firms and officials in the Ministry of Finance and, in the case of the petroleum things, I guess with mining, but they wouldn't come into this picture of Can-Cel.

So I say that this certainly looks - and I think the Minister of Finance should answer -as if this government is continuing the course it adopted at the beginning of consistently seeking revenge upon the previous administration in terms of undervaluating what they did to reduce debt and in terms of undervaluing the assets they built up in this province of British Columbia. That's the political motivation that worries me, Mr. Chairman, because I think there will be a tendency on the part of this government to say: "Oh, that's something the NDP acquired. It must be worthless. It must be worth very little." And I don't think the people are getting a fair return for that very vast forest empire which they are going to see the last of in a very short time. They have seen the last of it; it's passed.

I ask the minister specifically: have you got appraisals showing in some detail how the valuation was arrived at and what its book value is? Never mind what the value of some minority shares are, is there a book value? Is it not well in excess of $6.40 when you take into account the retained earnings, the inventory, the fixed capital assets and the value of a tree-farm licence, which is something to be considered in this province? There aren't that many tree-farm licences that are being given away because the Minister of Forests (Hon. Mr. Waterland) doesn't have too many more trees to give away for tree-farm licences.

Here's a big one. What is, Mr. Minister of Forests, a tree-farm licence of the magnitude of the one that Can-Cel holds worth? Now you don't get that for nothing today.

1 say that the people of the province, who are now the shareholders, are being made the losers. They're being made the losers on this. I would like to ask the minister what the book value of this enterprise Can-Cel is. Can the minister file an appraisal showing in some detail how he arrived at that $64 million figure?

MR. BARBER: I also have questions about the administration of the British Columbia Resources Investment Corporation and the fact that this government has been consistently incompetent and irresponsible in its unwillingness to provide answers quickly and accurately to this Legislature.

Last night, quoting from the Blues, when I was asking the Minister of Finance to tell us who is charged with the administration of this

[ Page 759 ]

Act, may I read to you his remarkable answer, Mr. Chairman?

"Mr. Chairman, I'm trying to understand the nature of the last question raised by the member: who is in charge of administering the Act? There is a minister associated named in every Act which would, of course, in this case introduce the B.C. Resources Investment Corporation. There's no order-in-council to my knowledge naming an administrator of the Act. Once this transaction takes place, this ceases to become a Crown entity, except to the extent of the investment it will hold in the corporation. That's the objective, Mr. Chairman. to divest ourselves of these Crown-owned properties to the extent that the Resources Investment Corporation was formed."

Let me repeat the key line: "There is no order-in-counciI to my knowledge naming an administrator of the Act." Well, we know who it was. We knew the minister didn't know. We suspect that no one over there really knows what they're doing in the administration of this corporation.

Now I have more questions but first of all I would like to, if I may, taking advantage of the fact that the Minister of Education (Hon. Mr. McGeer) is in his seat, ironically beside that of the Minister of Finance, engage in another of the readings from the past that we enjoy engaging in on this side of the House.

You know, Mr. Chairman, in the old days, the Minister of Finance, when he was a Liberal, had a rather law opinion of the Minister of Finance who has always been a Socred. I propose to read briefly, if I might, from Politics in Paradise: "the , authoritative, no-holds-barred, inside account of the use and abuse of political power in British Columbia today." What do we find the now Minister of Education saying about the now Minister of Finance before he changed coats? I refer you to pages 202,203, 206 and 208 of this book.

The opposition has been charging that the Minister of Finance very deliberately has diverted appropriate and reasonable questions from the Vancouver Province newspaper to a committee in order to avoid responsibility for answering those questions himself as one of the ministers responsible for B.C. Hydro. This is known in the parlance as a coverup.

In another session of this sane Legislature some time ago, the same Minister of Finance was also engaged in a coverup. This coverup referred to the expense vouchers filed by one P.A. Gaglardi. This coverup was attacked by the now Minister of Education (Hon. Mr. McGeer) in his famous book Politics in Paradise from which I enjoy quoting so much and so often.

HON. MR. McGEER: Did I autograph that book for you?

MR. BARBER: You autographed another one, but I borrowed this copy just a few moments ago. I remembered during my second reading of the book that your opinion of the Minister of Finance in the old days was rather low, or, to be charitable, certainly different from the apparent opinion you have of him now.

Now judging by the Charlie McCarthy act going on during question period today, one would presume he holds the same- low opinion, because he doesn't press the Minister of Finance to answer questions. However, he was referring to the Minister of Finance's role as chairman of public accounts. Now do you remember that? He scratches his nose - yes, presumably he does. Sure enough, what do we find the Minister of Finance being described as by the now Minister of Education? Well, if I may read from the book, it's appropriate; it connects quite importantly with the arguments we've made and others have made before us about the role of this Minister of Finance now and in the past in covering up actions by his own government, incompetent and irresponsible as those are. If I may quote from page 203 of the book:

"Opposition members of the public accounts committee wished also to question the pilots of Gaglardi's Lear jet regarding expenses connected with operation of the aircraft. Dave Barrett had estimated that it cost the B.C. taxpayer $950 every time the Highways minister flew one way to Kamloops. But vouchers for operating the aircraft could never be found by members of the public accounts committee."

I should point out that the chairman of public accounts at this time was Mr. Evan Wolf e, now Minister of Finance, who takes a bow totally undeserved. To continue:

"Opposition leader Robert Strachan muttered angrily as he strode out of one committee meeting: 'You just can't examine public accounts in this province. For Premier Bennett and the Attorney-General to say that the public accounts committee can look into things is absolute nonsense.'

"As the Lear jet swung off to Kamloops for the weekend, thunder clouds were gathering over Gaglardi's ministry. Although Bonner had stated that Gaglardi would not have to face any judicial

[ Page 760 ]

inquiry, and Evan Wolf e was keeping witnesses away from the public accounts committee, the discontent among Social Credit backbenchers was rising."

I'll be reading in a moment from other sources. I'll table the book; it's available to you. I got it from the library 10 minutes ago.

AN HON. MEMBER: Is it autographed?

MR. BARBER: He says he'll autograph it. Surely, however, no hon. member would want to autograph and thereby endorse the previous or the present coverups by the now Minister of Finance concerning important public business in this province. As chairman of the public accounts committee in times past, the now minister deliberately engineered coverups and, in the words of the Minister of Education himself, "kept witnesses away from the public accounts committee." Why did he do it then and why does he do it now? One can only presume, because he is an honourable man, that he does these things under orders, and that had he any choice in the matter he would do something very different. He would follow the honourable thing. The honourable thing in those days was obvious to the now Minister of Education. He wrote a whole book about it. The honourable thing in these days is obvious to us as well, but apparently not so to the Minister of Education. I'll be getting back to my readings from the past in a moment.

We are very concerned on this side of the House, Mr. Chairman, that the B.C. Resources Investment Corporation, for which the Premier is responsible, about which the Premier refuses to answer important questions in question period, is being mishandled. Last night we asked a number of questions which the minister indicated he would take under advisement. As well, we asked for the tabling of certain documents which the minister more or less generally agreed would be tabled.

Last night we asked the minister who was responsible for the corporation. He replied: "There's no order-in-counciI to my knowledge naming an administrator of the Act." Well, there always was. There has been since November 3,1977. We knew it; the minister apparently did not. The Provincial Secretary (Hon. Mrs. McCarthy) obviously did not this afternoon. But now the minister does. That's good. Maybe overnight he's learned some other things.

So if I may, Mr. Chairman, I'd like to go back for a moment, given that he's had time to reflect and answer questions, to ask again certain questions regarding the valuation of assets formerly owned by all of the people, shortly to be owned by only a few of then at the point of their sale by the B.C. Resources Investment Corporation.

I wonder if the Minister of Education really wants to leave right now, because there are other readings from the past coming up shortly that he may care to hear of again, that will once more attest to the high regard in which the Minister of Education has always held the Minister of Finance.

AN HON. MEMBER: Hear, hear!

MR. BARBER: You should read the book, Evan.

HON. MR. WOLFE: I have.

HON. MR. GARDOM: Wait till the one on the NDP comes out.

MR. BARBER: The minister, regarding the valuation placed on these - quoting from the Blues last night - responding to the question from my colleague, the member for Vancouver East, asking if the assessment made by the four houses - A.E. Ames and Company; McLeod Young Weir; Pemberton Securities; and Richardson - would be made available to the people, replied:

"Mr. Chairman, I can't indicate the exact moment when I could do this because I have to take under advice the question of the underwriting, which would have full disclosure of all these matters involved in it. I can say that I can undertake to make that material available at an appropriate occasion."

My first question to the minister is: has he now received advice as to when he can table in this House the assessment, the valuations made by the four firms - Ames, McLeod, Pemberton, and Richardson - regarding the worth of the assets that have now been transferred to the corporation?

The minister last night found out it's the Premier who is responsible. Hopefully, he also found out whether or not he's willing to table these documents in the House. Will the minister answer this question at the moment? Have you got a date? Have you received the advice? When will you table these most important statements of value prepared by the four investment houses contacted by the government?

Well, that was the first question. Do you want to answer these all at once?

MR. CHAIRMAN: Please continue, hon. member. We only have one person standing at a time,

[ Page 761 ]

and if you take your seat and he doesn't rise, I have to ask f or the vote and see who rises and we proceed.

MR. BARBER: That's very fair, but I'm sure, were you in opposition, as you will be after the next election, you would discover it equally difficult to ask questions when the minister's only reply is silence. However, I'll continue, if I may.

The minister last night was asked by this side of the House whether or not he would name the private consulting firm that assisted his government in assessing the value of the petroleum rights and leases of the land held and the natural gas rights and leases and land held. Will the minister inform us today when, if at all, he intends to table the report from, as I understand it, the private consultant engaged in mining - that's the phrase you used last night, sir - who has been involved by your government in assessing the worth of the petroleum and natural gas rights and leases that are transferred, as the Act provides in schedule A? We'd very much appreciate knowing that. Specifically what the minister said, to refresh his memory, was: "Just to explain, Mr. Chairman, I'm not referring to another investment firm but a consulting firm on mining properties and so on - an expert in that field."

Further, we asked last night whether or not there was any contractual arrangement between the four quite reputable public investment firms - underwriting firms - Ames, McLeod, Pemberton, and Richardson, in assessing this, and the minister said that these companies are investment representatives for the government and that the companies themselves did not have any contract of any sort, nor were they likely to obtain commissions of any kind, nor did they derive a fee of any kind for providing this valuation. Well, it has occurred, Mr. Chairman, to this side of the House that if the government paid nothing for the valuation of these assets, then perhaps that's precisely what that valuation is worth - nothing. If the government paid no fee, offered no commission and signed no contract and thereby provided no reimbursement of any sort to the companies for the work they did, it may well be that the fee they paid, which was zero, is equivalent to the worth of these valuations, which is also zero.

It's reasonable, I think, to ask why the minister would want the government to be treated as some kind of charity case by these companies and why he would tell us, as he did at one point - I'll read it from the Blues: "Mr. Chairman, they are managers for investments and probably would feel an obligation to contribute their services in this respect." Isn't that a marvellous gift they've made? Mr. Chairman, you're in business. If the firms of Ames, McLeod, Pemberton, and Richardson, together or singly, offer to provide a valuation for you, at no charge, of the considerable assets of your family, I'm sure you would be delighted as well. But you, a canny businessman, might ask: well, what's in it for then and why have they provided this great charitable service? What's in it for the government to have such a flimsy arrangement with the perfectly reputable firms? The minister told us that they did it for nothing. We tell you that that's perhaps what their valuations are worth - nothing.

So we ask again, as we did last night, and the minister provided no answer: could you tell the House what instructions, if any, you provided to these investment firms? What did you tell them to look at? We understand that they looked at the value of the minority shares as they were trading on the market at the time of the evaluation. We have told you today what everyone knows to be the case: simply assessing the value of minority shares trading at any given time is by no means a reasonable indicator of the actual worth of that corporation. indeed, the book value and other assets that might go unrecorded at that time will not be reflected in that daily share value of minority shares being transferred or being made available, say, on the Vancouver of Toronto exchanges.

We are not satisfied that assessing the worth of minority shareholdings-on some day in the past is by any means an accurate or adequate means of evaluating the assets that have been transferred. Presumably the minister would also not be satisfied with that; therefore it's important that the minister tell this House what instructions he gave to the firms as to what criteria were to be applied and what tests were to be applied to the worth of these assets. When did you provide those instructions and in what form? Did you send a letter? Was it done verbally? If someone did it for you, who? How was that done? When, specifically, was that done?

To repeat for the last time, Mr. Chairman, we have been informed that the valuation of these most important public assets was apparently conducted for free by four reputable companies, treating the province as a welfare case. We've also been told there was no contract between the government and these companies. We've also been told there was no fee paid and we've further been told that it is likely there will be no commissions made

[ Page 762 ]

available either. Therefore we have to ask why they did it and under what circumstances. The minister has provided no competent answers at all.

I have some other questions that I would like to remind the member of. The minister indicated last night that "an underwriting will be placed before the public with complete disclosures as required by the securities law and so on, which will answer all of the questions that have been directed in this connection. That is the appropriate time, in my view, when many of these questions can be answered."

Well, Mr. Chairman, it is by no means appropriate to us. This House remains the guardian of those public assets. This side of the House intends to guard those assets as long and as well as we possibly can, so I'm therefore compelled to ask the minister: Can he inform the House when this prospectus will be issued? When will the underwriting take place? When will the shares be made available for sale to the public? Did the minister get the questions? He's talking to his Mr. Bryson. Now perhaps he has the answer. When will the prospectus be issued? When will the underwriting take place? When will these shares be made available to the public? The minister last night told us that many of the questions we're raising can only be answered then. Well, if that's your position, tell us when is the then. Mien do you intend to do this?

More questions along the same line: Can the minister inform the House approximately how many shares will be issued, or be made available for sale, at the time of the underwriting? Which firms will be underwriting the sale itself of these shares? Will they include Ames and Company; McLeod, Young and Weir; Pemberton; and Richardson? If not, will they include other firms? If so, which firms themselves will be involved in underwriting the sale?

We have another important question as well, regarding the government's participation as an equity shareholder in the assets of the B.C. Resources Investment Corporation. The Premier, whom the minister now confesses has, in fact, been named and charged with the administration of this Act, has informed the House - and the minister confirmed it last night - that the government itself hopes to own less than 50 per cent of the net share value of the corporation; less than 50 per cent is the government's target. My question then to the minister is: which minister will report to this House regarding the administration of that 50 per cent or less share held by the government in the British Columbia Resources Investment Corporation?

I would like to remind the minister that there is ample precedent established for answering those questions and, indeed, for having a minister of the Grown answer questions regarding less than 100 per cent ownership by the government in any particular firm. I am in particular thinking of the shares owned by the government in British Columbia Cellulose, which became Canadian Cellulose during the term of office of the previous government. As I recall, the largest amount was 79 per cent. It's now 81 per cent; it was 79 per cent at the time we bought the shares when we were in government, and it's 81 per cent today. It was a pattern established, and a pattern important during the previous administration, that our government - even though it did not own all the shares in a particularly important public enterprise such as Can-Gel - agreed to answer questions on its less than 100 per cent shareholdings. It's important to us as well, Mr. Chairman, that that tradition be maintained. The previous government answered questions about Can-Cel, regardless of the fact that some 20 per cent of the shares in Can-Cel were not owned by the government itself. The minister tells us that some 50 per cent of the shares in the B.C. Resources Investment Corporation will not be owned by the government itself. Our question is obvious and straight forward. Which minister will answer questions in this House regarding the administration of the roughly 50 per cent shareholdings to be owned by the government of British Columbia, when the resources corporation finally goes public and sells its assets?

We would very much appreciate an answer to these questions at this moment. They lead to other, equally important questions about the guardianship of these assets. We're concerned that this government has been incompetent and irresponsible in its up-to-now unwillingness to answer any questions at all relating to its responsibility for the corporation. You are responsible. It was your legislation. It was your Premier who brought it in. These were public assets that were once held by all of the people, for all of the people. We insist that you answer questions and accept responsibility for the corporation that you, yourselves, created. We insist you provide these answers, and we will continue to ask these questions until you do.

MR. GIBSON: Would the minister like to answer the questions that have been brought up

[ Page 763 ]

first?

MR. CHAIRMAN: I have no indication of the minister standing. I've recognized the member for North Vancouver-Capilano.

MR. GIBSON: Mr. Chairman, each year about this time I always ask the minister, in a constructive way, if he can tell us how much cash he has in the bank, within $10 million or so. Usually he doesn't know that. I see the deputy smiling this year. Maybe he's briefed him. But I have a special reason for it this year. I'm interested not just in the cash, but the total of cash and temporary investments, because, looking at the minister's estimates, I see that our interest on the public debt is going up from about $14 million to almost $22 million in this coming year. At the same time, as the hon. member for Nanaimo (Mr. Stupich) pointed out last night, our interest on investments that the province holds is going up from about $8 million to $32 million.

The clear implication is there that the province has enough money, be it in terms of cash on hand or cash plus temporary investments, to pay off the debt that the government has on its books as of March 31,1977 - the figure given to us in the budget, and I regret these f figures are always a year late - the deficit repayment of some $261 million.

I want to know from the minister why this amount hasn't been paid off with the surplus funds he has on hand, so that the province can cease paying this interest for what the minister's always pleased to refer to as "the dead-weight burden of debt." I would have thought that this minister, of all ministers, would want to be eager to discharge this kind of dead-weight liability. It occurs to me that just possibly this debt is being kept around to be used as a political ploy in the next election.

AN HON. MEMBER: No.

MR. GIBSON: Surely not. I would hope not, but if that's not the case, Mr. M ' ember, what other possible reason can there be for it being left on the books of the government when they have the resources to pay it off, when we have a minister whom we know is opposed to unnecessary debt? So that's all I want to know from the minister right at this point. I have other questions later, but this particular question arose out of a line of questioning last night, and I'd be glad if the minister would tell us why he doesn't pay this debt off when he can do it.

MR. STEPHENS: Last night I asked the minister three questions pertaining to legal aid which he was unable to answer because it was right in the midst of other questions he was concentrating on. I wonder if he might tell us now whether there is any federal contribution to legal aid, and if so how much, and where it appears in the estimates. Are you able to give me that now?

HON. MR. WOLFE: Mr. Chairman, if I could dispose of that question first, since it was asked yesterday, the member asked whether there are any federal contributions toward legal aid and where they lie in the estimates. The answer is yes, there is $1.85 million in the estimates, and they're to be found on page 47 under "other federal payments" - $50.8 million.

Now, Mr. Chairman, I'd like to go back to the questions raised first of all by the member for New Westminster (Mr. Cocke) . He referred to the restraint in the school budget figures in the budget, and he referred to the provincial mill rate. I'd like to remind this committee that the mill rate increase in this budget is only some 5.5 per cent, which is substantially reduced from previous years' budgets. In referring to that subject, I would refer the members to page 32 of the budget speech, where under the analysis of the Education ministry budgets we find that the public school system continues to be the largest item in the Education budget at $591.6 million, an increase of $27.9 million. We're all aware that the stabilization of the school-age population accounts for the reduced rate of growth in the cost of this programme.

Mr. Chairman, the basic levy for local school district purposes will rise by, as I said, 2.25 mills, which is the smallest increase in three years, and I think that the committee should take notice of that.

MR. GIBSON: It's been so disastrous!

HON. MR. WOLFE: Now one should also be aware of the fact that school budgets, which are the other factor in this equation, have risen 10 per cent during the course of this year. I think this is the part which reflects itself in the local tax bill that is very difficult for the minister to be able to control. The member also referred to small business - the lack of initiative in the budget of small business, and he referred to bankruptcies again. The members opposite continue to refer to the fact that bankruptcy numbers are up, quoting Dunn and Bradstreet and so on.

But what no one is saying is that the

[ Page 764 ]

numbers of incorporations have risen substantially in the province of British Columbia. In fact there were 5,849 more firms incorporated in British Columbia in 1976 and 1977 than in the previous two years, 1973 and 1974, during the course of the previous government's tenure. So the total number of new companies incorporated - just to place this matter on the record - in 1977 to do business in British Columbia was 13,954 compared with 13,012 in 1976. Incorporations in 1975 totalled 10,811 and in 1974 were 10,306. So is it any wonder, in the light of that, that you have to relate the increase in bankruptcies to the fact that we have a substantial increase in the number of incorporations within the province?

I think that it's good, since the member for New Westminster referred to the matter of small businesses and our so-called failure to address ourselves to small business problems, that one of the major initiatives in this budget, Mr. Chairman, has been in the direction of small business.

I would remind the committee what the Canadian Federation of Independent Business said, from their president, in a letter addressed to myself as Minister of Finance:

"Your April 10 budget was a real shot in the arm for British Columbia's small business community. It was, in fact, the best small business budget in Canada, a fact we have recognized in our next mandate."

He goes on to say:

"Your proposals to eliminate the sales tax from new and repaired production machinery, the new $500,000 exemption limit for the capital tax and the new resources available to upgrade management skills, and the pledge to reduce the paper and regulatory burden on small firms, have created a new confidence and excitement amongst our B.C. membership that will pay off in new jobs and improved performance."

That's what the small business community feel about this budget and our attention to this very real problem in the business community.

Mr. Chairman, yesterday the member for Nanaimo (Mr. Stupich) asked a series of questions on the details of revenue items. He wanted further information on the upcoming year's budget for coal, minerals and metal royalties. Since he is in the House at this time, the answer to the fact that the budget has been reduced from $5.3 million to $3.6 million lies in the fact that on January 1,1976, the Mineral Royalties Act was repealed. This explains the reduction in the part affecting that particular revenue estimate.

MR. GIBSON: So it didn't apply to either year.

HON. MR. WOLFE: As a matter of fact, coal is up, Mr. Member.

Mr. Chairman, questions were asked about the B.C. Resources Investment Corporation. They tended to be all over the lawn on this question, but basically, as I indicated yesterday, in answer to questions from the member for Vancouver East (Mr. Macdonald) .and the member for Victoria (Mr. Barber) , these valuations were arrived at on the basis of a valuation report requested of the investment group, which I outlined to the House yesterday, and also on the opinions supplied by the staff members of the Ministry of Finance and the Ministry of Mines.

I indicated in answering this same question yesterday that this valuation report, including the reports supporting the valuation associated with the mineral properties, will be made available and will be tabled. I wanted a chance to review the implications this might have on a prospectus. We certainly don't want to impose on the legal rights involved in the disclosures under prospectus nor affect the valuations which might be there. There will be full disclosure in any prospectus, as you well know. So I can assure the committee that the reports that we're referring to here will be tabled during the course of the session of the Legislature. Beyond that, I have to seek advice on when that can be done. But the matter will contain all of the information that anyone would possibly require or request.

MR. BARBER: Roughly when will the prospectus be issued - two months, six months?

HON. MR. WOLFE: I was also asked when the prospectus would be submitted, when the underwriting would be put forward. I answered that question yesterday, Mr. Chairman. That's in the hands of the Resources Investment Corporation directors. I answered that question yesterday.

I would like to clarify one item, just so there is no misunderstanding. There have been some questions surrounding whether the investment group supplying the opinion on these valuations were under any contractual arrangement for any fee. I would like to assure the committee that of course we have to pay for the expenses associated with this undertaking, which is very substantial. We have not received any billing or any accounting for this, but I can assure the

[ Page 765 ]

committee that this will receive very careful scrutiny and will be a matter of record for public accounts in the future. So I just want to assure the committee that there would, of course, be expenses associated with the work in developing this valuation report, which will be tabled at an appropriate time.

There were other questions related to the question surrounding particular valuation of given shares, for instance, in Can-Gel. I think that these should await the disclosures, the complete descriptions involved in the report, which everybody will have available.

[Mr. Kahl in the chair.]

I might say that as has been asked about and answered in the question in this House, the person who administers this Act by order-in--council is the Premier. I think that really, further questions on this matter should be brought forward during his estimates. As the member brought to our attention in previous questions, the Premier is the person assigned by order-in-council to administer the Act.

MR. BARBER: We're very glad you said that. Thank you.

I appreciate those answers the minister did give, and especially the clarification as to the expenses that will be charged to the Crown for the work done by the four investment houses. I would remind the committee that that was not the minister's reply last night. however, he seems to have better information today, and that's good.

The minister tells us that the expenses will be submitted and thereby made available through public accounts. Unfortunately, as the committee will know, and most certainly its chairman, public accounts won't get to see these expenses until the year 1980. Surely the minister doesn't want us to wait two years before we see the results, and before we understand what the submitted costs will be. I would ask the minister if he will give an undertaking that he will table in the House the expense accounts as filed, when received by the four investment houses. Will he assure the House that we will not have to wait until the year 1980 before public accounts actually gets to see this material?

AN HON. MEMBER: Open government.

MR. BARBER: Yes, open government.

Secondly, the minister did not answer the question which we consider very important, what minister - is it the Premier and, if so, will you say so? - will respond to the House in the future regarding questions concerning the guardianship of the 50 per cent or less shareholding in the Resources Investment Corporation to be held by the government itself? The Premier is charged with the administration of the Act. We now know that; the minister now knows that. What minister will account to the House as fiscal agent for those shareholdings? Will it be the Premier or, if not, who?

As I understand it, traditionally the Minister of Finance has always acted as the primary fiscal agent for these shareholdings. Will it be the Minister of Finance or will it be the Premier? I wonder if he could give us that answer today.

HON. MR. WOLFE: To answer the last question first, Mr. Member, whoever is charged by order-in-council to administer the Act, I would take it, would be the one you could address questions to.

MR. BARBER: He will be the fiscal agent?

HON. MR. WOLFE: That is not the question you asked me, Mr. Member. I'm just answering that whoever is charged under the Act with administering the Act would be the one to pose your questions to.

You said that any expenses associated with the development of these valuations would be a matter you couldn't have access to until 1980. This would be true if you were to request them through public accounts, but at any time the member can ask questions here during oral question period or on the order paper in the House. He's quite free to do that at any time. At the moment, we have no bill or submission of this account.

MR. BARBER: I appreciate that we are quite free to ask questions on the order paper and in question period. What I want from the minister is an assurance that he will be equally free and obligated to answer. It's a great difference, indeed, between being able to ask and being willing to answer, as the minister well knows. And 1980 is the year that it would ordinarily appear in public accounts.

HON. MR. WOLFE: That's right. I was chairman once.

MR. BARBER: Here in Politics in Paradise there's an interesting account of your chairmanship of the public accounts committee.

HON. MR. WOLFE: Send me a copy.

[ Page 766 ]

MR. BARBER: I would like to change the subject briefly.

In his remarks last night, the minister indicated that 1,407 public service positions have been terminated. He indicated that that was attributable to the excellent work of the Treasury Board staff, and he took some pride in it. Well, as I have of ten argued, the people of the capital city of Victoria might not be quite so happy to discover that 1,407 -get that, Sam? - civil service positions have been terminated. In providing that information, the minister specifically said that it was Treasury Board staff, and he referred to public servants. As the committee knows, there's a difference between public servants as they appear in the books under the administration of the Public Service Act and public servants who are employees of Crown corporations. So the question is - and I hope the minister is listening: does the figure of 1,407 terminations apply to the entire public service, including the Crown corporations and agencies, or does it simply apply to those public servants who come under the jurisdiction of the Public Service Act, for which the minister's Treasury Board staff is also responsible? He used the figure 1,407. Does that include the Grown corporations and agencies, or does it not? When the minister answers that question, I have some others that will follow.

HON. MR. WOLFE: Mr. Chairman, I'm advised that it does not include the Crown corporations.

MR. BARBER: I appreciate the answer; that's also the advice that we've received. What we understand then, Mr. Chairman, is that we have lost 1,407 public service positions, plus the hundreds that have been lost with the B.C. Ferries Corporation, and others that will come forward during the debates of the respective ministers. I don't want to trespass the authority and rules of the House by bringing them up now.

So we're looking at, at minimum, 1,700 jobs terminated by this government; and the argument I have made, and will restate again today - and the member for Esquimalt (Mr. Kahl) will certainly hear it in the next election - is that the impact of terminating more than 1,700 public service positions in the capital city has been devastating to the economy of this capital city, devastating from beginning to end. You hurt us irreparably when you doubled the ferry rates, you hurt us again when you increased the sales tax by 40 per cent and ICBC premiums from 100 per cent to 300 per cent. Last night you confessed that 1,407 public service positions have been terminated. I tell you, Mr. Minister, you are doing more damage than you know to the economy of the capital city. We couldn't afford what you did to B.C. Ferries; we can't afford what you've done to the sales tax; we couldn't afford what you have done to ICBC; most of all, the capital city cannot afford this endless hemorrhaging away of jobs from the public service here in the capital itself.

That was the speech. My questions are: Can the minister inform the House from which ministries, specifically, these jobs were terminated? We are aware, according to Mr. Hume of the Colonist, and others, that 732 positions were lost in the Ministry of Public Works alone; and many of those, of course, were located in the capital city. But can the minister give us now - or if he cannot, will he agree to provide shortly - ministry by ministry, a statement of how many positions were terminated, and when those positions were terminated? Secondly, can the minister inform the House which Crown corporations have also had employee cutbacks, over and above the 1,407 to which the minister has admitted; and again, could the minister name those corporations and name the number of positions terminated within each of them?

These are questions that are, to say the least, extremely important when one analyses the problems of the economy in greater Victoria, the only capital city we have.

HON. MR. WOLFE: I think the matter raised by the member for Victoria (Mr. Barber) is just a repeat of the charade he put on here a couple of days ago, which was refuted categorically by the Minister of Recreation and Conservation (Hon. Mr. Bawlf) . What we're talking about here - as I explained very carefully in the budget, and very carefully in my opening remarks yesterday in the estimates - is a readjustment of positions. We are not talking about staff members individually, but positions which were vacant within the government, and a changeover in the reporting of the system from the establishment numbers to actual numbers of people who are currently the staff level. For him to put on this display, once again, of terrific layoffs within the Victoria area, and so on, is nothing else than a charade which he's been through before.

MR. BARBER: The Minister of Finance is not as convincing as he may wish he were. If I may quote from the minister's own statement, page 843-1, made roughly at 2:50 p.m. yesterday

[ Page 767 ]

afternoon, referring to the staff of Treasury Board, for which the minister is responsible:

"Since its inception a little aver a year ago, the Treasury Board staff, Mr. Chairman, has investigated and reported on over 2,800 ministry expenditure requests; it has reviewed and improved organization structures, particularly in the Ministries of Health, Forests, Consumer and Corporate Affairs, and Travel Industry. It has conducted operational reviews in the Ministries of Health and Economic Development and effected" - will you listen carefully, please, especially Sam; get it right this time - "a net reduction in provincial government employment of some 1,407 positions."

The minister's defence is unbelievable. The impact on the economy of Victoria has been very bad, very heavy, and very devastating. Before the equally unbelievable Minister of Recreation and Conservation gets up to attempt yet another lame defence of his government's actions regarding the capital city, may I repeat: the Minister of Finance said: "It has conducted operational reviews in the Ministries of Health and Economic development and effected a net reduction in provincial government employment of some 1,407 positions."

Let me ask my question again. Will the minister inform us, here in the committee today....

HON. MR. WOLFE: You haven't got it clear yet, have you?

MR. BARBER: I think I have it perfectly clear.

HON. MR. WOLFE: You don't understand it.

MR. BARBER: Well, I think I consult with the Public Service Commission probably at least as of ten as you do about this problem, and I think I understand it at least as well as you do, if not better.

Specifically, what 1 would like the minister to answer for us, however - diverting from the speechifying on both sides of the House for a moment - is: in which ministries, one by one, were these positions terminated? Can the minister inform us, name by name, of the ministries and the number of positions terminated? Secondly, now that we've been informed that the 1,407 positions terminated do not include the Crown corporations and agencies, will the minister tell us which corporations have also themselves had cutbacks in approved positions? Specifically, I would ask: does that include the British Columbia Buildings Corporation? As the minister is well aware, there have been, to say the least, some problems internally in the transition from the Ministry of Public Works, such as it was, to the British Columbia Buildings Corporation, such as it is. I would presume that the figure of 1,407 does include the reported 732 positions that were terminated in the Ministry of Public Works. However, if it does not, we presumably have to add those figures to the 1,407-position figure that the minister has talked about.

So to make quite sure, separate from the speeches that we will both make on both sides of the House: department by department, how many positions were terminated, and corporation by corporation, how many positions have been terminated? and most specifically, may I draw your attention to the problems of transition between the Ministry of Public Works and the British Columbia Buildings Corporation. Which side of the ledger - Public Service Act or Crown corporation - does the figure that the minister is shortly to provide apply? Does it apply to the 1,407, or are there additional numbers over and above the 1,407 terminated positions that the minister has been referring to? Your colleague, my friend from Victoria, may want to answer first, because I gather he has a speech prepared for the third time. Are you ready, Sam? No, he's not. Yes, he is; he's standing. Here he goes.

HON. MR. BAWLF: Mr. Chairman, I'm just astounded to listen to that member over there. Having made, as I cited in the House the other day, absolutely hysterical comments about the alleged reduction of employment by government in its Crown corporations in the capital city, and having projected quite precisely a $90 million loss in economic benefits to the capital region, he is now admitting he doesn't have any facts to support that - no facts whatsoever. He doesn't know, so he's asking. He's trying to support his allegations.

MR. CHAIRMAN: Order, please. The first member for Victoria, you're supposed to be speaking to vote 92, and ...

HON. MR. BAWLF: I'm speaking to the same subject which has been on the floor here for five minutes.

MR. CHAIRMAN: Order, please. ...not entering into debate with the second member for Victoria. If you have a question for the Minister of Finance, please proceed.

[ Page 768 ]

HON. MR. BAWLF: I would advise the Chairman that it's not necessary to ask the Minister of Finance a question in order to discuss his estimates.

MR. MACDONALD: On a point of order, I think the Minister of Recreation and Conservation (Hon. Mr. Bawlf) is entitled, as long as he's within the ambit of these estimates, to comment on what happens in other parts of the House, as well as ask questions of the minister. We've always done that. Erroneous as he may be in his opinions, and his failure to read the budget....

HON. MR. BAWLF: That's not a point of order!

As I was saying, that member, having held out this great tragedy to the city of Victoria and projected all sorts of wonderful statistics with great certainty and a great aura of hysteria to the people who are concerned with the economy and the well-being of this community, he now is over here asking the Minister of Finance for the facts to support his allegations.

MR. MACDONALD: No, he read the budget speech. Read that line.

HON. MR. BAWLF: He has yet to learn the difference between an established position in government which may or may not be occupied, or which may not ever have been occupied by an employee, and the question of employment in the terms of people who actually work for government or its Crown corporations. This number of people has not changed so dramatically by any stretch of the imagination as that member over there alleges, and, as he as much as admits now, he cannot support with any facts. He set out the great case for hysteria in Victoria. Now he's fishing around trying to find the facts to support it, and he knows dam well he can't support it.

MR. BARBER: If that's the best the minister can do, I look forward to the all-candidates meetings in the next provincial election, because no one is going to believe that.

Now f or a number of months it has been very clear that this government, that coalition, can not have it both ways. They cannot campaign in the rest of the province on a promise to cut back the civil service, and then in the capital city deny that they've cut the civil service back at all. The coalition cannot have it both ways. You cannot run around in Prince George, the Kootenays, and in the Queen Charlottes and tell everyone how you're cutting back the civil service, how you're cutting back bureaucracy and reducing waste and cost and inefficiency, and then in the capital city tell people: "Well, we're not doing any such thing." And by no stretch of the imagination can one construe that anything like the damage anticipated has actually been done. The coalition cannot have it both ways.

I appreciate my friend from Victoria's political reply to my admittedly political speech. However, I do have questions of the Minister of Finance, and I would appreciate them. I received information that I've used publicly, which the Victoria Colonist - surely one of the friends of this government - has also used publicly. In the Victoria Colonist, a story, as I recall, bylined by Mr. Jim Hume, who editorially has been a fairly consistent friend of Social Credit, said: "732 jobs gone." That was' referring to the British Columbia Buildings Corporation and its transition from the Ministry of Public Works. We stand by the figures that we've used, but, in any case, last night the minister used an aggregate figure that he has not used before. I was interested to hear that, and I think it's reasonable to ask how it's derived. I also thought it reasonable to ask whether or not that included the Crown corporations and agencies. We're told it does not. That's fair.

Now I do appreciate, with respect, and not wanting to engage in a political duel all the time, the difference between an approved position and a filled position. There are often positions approved that are never filled, or they're only filled for a short period of time, or they were filled once and they're still around. I appreciate that.

What Iove asked the minister, very specifically, is the number of positions terminated. Terminated - they will never be filled again. Those jobs have ceased, they've ended, zippo, zero, they're over. And specifically, from department to department and corporation to corporation, not only regarding the political debate about the future of this capital city and the considerably artificial economy upon which it's based - that debate which I raised during the throne speech - but more importantly the planning objectives of this government.

If the minister can inform us today, or at some time in the near future, about the number of positions that have been terminated from department to department and corporation to corporation, we then have further questions to ask. What are your objectives? How many more terminations, in what departments, do you anticipate? How many more positions will be terminated in the Crown corporations and agencies for which you are also responsible?

[ Page 769 ]

It's not just the question of the livelihood of the capital city, although those are certainly important questions. With respect, Mr. Chairman, I support my colleague for Vancouver East (Mr. Macdonald) and the Minister of Recreation and Conservation (Hon. Mr. Bawlf) . I do feel he has a right to engage in this debate. It's important to the people of Victoria as well because we're in the peculiar situation with both a Social Crediter and a New Democrat simultaneously representing the same riding. The positions should be made clear.

The position that I've tried to make clear, and will do so again at this moment, is simply this: given that the economy of this particular capital city, located on an island at the southern end of it, a capital city chosen as the result of political compromise, depends so much on the provincial and federal public service, then we insist that the economy of this capital city be maintained at least at the level of present public service employment. By present, I mean 1975 levels and not 1978. The problem is, Mr. Chairman - and you know it in your own riding - that were the federal government to cut back significantly at HMCS Naden and at the graving dock at the dockyard and so on, you know full well the impact of that on a town like Esquimalt with such an enormous payroll and tax load of which comes from the federal government. You, yourself, Mr. Chairman, would not want the people of Esquimalt to suffer because of significant cutbacks in the federal payroll which the people of Esquimalt presently enjoy, and you'd fight for them too.

Greater Victoria is, to a considerable extent, dependent on the largely artificial economy created by the fact that we are the centre of the provincial government and the seat of Pacific Maritime Command. No government, no matter what the party, can lightly tamper with that largely artificial economy by cutting back public service positions, provincial or federal, without risking enormous damage to the businesses, large and small, and to the families of the capital city itself. I've earlier made the argument, and I wish to restate it to the Minister of Finance in Europe, typically - not always, but typically - the great capitals have always as well been the centres of great culture and commerce, and have been founded at the natural crossroads of trade and enterprise. In North America, two nations of much more recent development, we have frequently chosen to create artificial capitals....

HON. MR. MAIR: You gave this speech before.

MR. BARBER: I'm repeating it now for the Minister of Finance because I'm trying to engage....

Interjections.

MR. CHAIRMAN: Order, please. The second member for Victoria continues.

MR. BARBER: What I'm trying to engage the minister with is a debate on the extent to which, if any, public service employment can be terminated and jobs lost in a capital city like our own. I'll restate the argument. In North America we have frequently chosen to create capital cities that are largely artificial. Brasilia itself in South America is the world's best-known example of that practice. Sacramento in California, Albany in New York state, Ottawa in Canada and so on are also examples. Olympia in the state to the south of us is a further example. The argument and the conclusions are, at least to me, perfectly obvious.

AN HON. MEMBER: How about the capital of the Falkland Islands?

MR. SPEAKER: Order, please. Vote 92.

MR. BARBER: Well, the point is, you can say it. I'm saying this as one of the representatives for the capital city and, if you were, you'd be making the same speech and you know it.

What I'm trying to argue is that it is a dangerous thing to tamper with the economy of a capital which itself cannot rely upon the ordinary functions of a larger economy to sustain it. A capital city that's located miles across the water from the major centre of enterprise in this province, which is greater Vancouver, a capital city located not in the middle but at the bottom of an island, no less, and a capital city that derives its economy so heavily from the payroll, federal and provincial, because we're the seat of the provincial government and Pacific Maritime Command, is a capital city whose economy cannot lightly be tampered with. When you double the ferry rates, when you do what this group did to ICBC and the sales tax and, further, when you cut back in the civil service at all, even a couple of hundred positions - although it has been more - you do danger and damage to this economy.

That is not a terribly partisan debate, although it will be argued and defended

[ Page 770 ]

partisanly. It's also a question of important public policy. To what extent shall a capital be protected. To what extent shall that capital's payroll be maintained? And if that payroll is to be diminished or altered in any way, to what extent does the government that does the diminution or the altering be held accountable for having done so? These are important public policy matters.

I should like, for the last time, I hope, to restate my questions to the minister, because he has used an aggregate figure with which he's not previously been associated: 1,407 positions separate from the Crown corporations. Which jobs in which departments of government, one by one, position by position, have been terminated? The same question is asked in parallel regarding Crown corporations and agencies. It appears the figure is higher, at least judging by the minister's present statements, than we earlier anticipated.

HON. MR. BAWLF: Mr. Chairman, I'd again like to reiterate that the member opposite would like to blithely consider any position which was established in the government service or its Crown corporations, whether or not it was ever filled, as being a job and therefore subject to a statistic as to having been eliminated or sustained. The simple fact is that this government has indeed curtailed excessive job creation in government; this government has indeed effected economies in the civil service.

I'd just like to point out that that party, Mr. Chairman, when they were in government, embarked on a massive hiring program and additions to the civil service. They themselves realized too late what they were doing to their finances, having had three successive budget years in which their aggregate increase was 135 per cent in spending the taxpayers' money. They instituted freezes on positions and on the filling of positions; they instituted those freezes. Those positions, Mr. Chairman, which were not filled in many cases have been eliminated. That does not constitute a reduction of employment of people.

In any case he's asking for a limited statistic; he's asking for positions eliminated. He apparently wants to take no account of positions established, such as the Buildings Corporation itself. He apparently wants to take no account of positions transferred; he just wants to know the one side of the balance sheet and not the other. And I just would once again point out that that member made a speech in this House in which he attempted to express grave concern to the people of Victoria and attached specific numbers which he cannot substantiate now, which he obviously has no factual basis for. I will categorically once again, Mr. Chairman, reject that allegation. He cannot support it factually.

AN HON. MEMBER: Give us some facts.

HON. MR. BAWLF: I will reject that and I will tell him that he must prove that allegation or he owes an apology to the people of Victoria. He always gets his facts wrong. He was in here a year ago reciting tourist economy figures that had no basis in fact.

MR. BARBER: I have been asking the minister if he will give us that information, department by department and corporation by corporation. I would be happy if the minister would agree to do so, but the work might be enormous. If you would detail-I for us name by name those public servants whose positions have been terminated.... However, that might be somewhat embarrassing for the public servants involved. In any case, I am simply looking at the numbers of positions terminated.

Now if the government's defence is that we have created new positions elsewhere, well, let's hear about it. If your defence is that you closed down the Ministry of Public Works and then you turn around and create new positions in the B.C. Buildings Corp., let's have both those figures. I am reliably informed by people within the public service, who are a wonderful source of information... I appreciate it very much and wish to go on record as saying so. In fact, the loss in the Ministry of Public Works in positions filled has been very near that reported by the Victoria Colonist, and under its byline, Mr. Hume, a good friend of your government, ordinarily, at least, in his columns. The figure that he used was 732 jobs which were filled and have been lost in the transition from Public Works to the Buildings Corporation.

HON. MR. BAWLF: Nonsense!

MR. BARBER: Well, take it up with Jim Hume. I'm sure you see him more often than I do.

MR. LAUK: Give us the facts if it's nonsense. You just get up and blubber.

HON. MR. BAWLF: He's reciting all the facts.

[ Page 771 ]

MR. LEA: You say it's not true. Where are your facts?

MR. CHAIRMAN: Order, please.

MR. BARBER: So would the minister give an undertaking to provide, if he prefers, both sides of the balance sheet, the ledger - the statement of the positions created and now filled within each of the departments and Crown corporations of this government, and the positions filled and now terminated in the same departments and same Crown corporations? I'm sure the Minister of Recreation and Conservation would have no problem with those figures from that source.

I for one would be delighted if such should be my position to campaign in the next provincial election on those figures as well. In the meantime, I am quite content to rely on the figures provided us by the Public Service Commission and even by Jim Hume of the Colonist, who specifically used the figure of 732 positions filled and terminated during the transition from Public Works to the B.C. Buildings Corporation.

The minister knows what I am referring to, because I sent him a copy of the article last week with my "compliments" stamp on it. I know he read it because I read the things he sends to me. Appearances aside, we remain good friends. I once worked on his first aldermanic campaign, but not his second.

Will the minister, when putting an end, at least at present, to this debate, give us the undertaking that you will provide those figures for the departments and corporations and agencies of government; that you will tell us of the number of positions terminated, department by department, corporation by corporation; that you will tell us the number of positions filled and now terminated; and, if such is your defence, the number of positions created and now filled? We would be happy for all that information, and the sooner the better.

MS. SANFORD: When the sales tax was increased just after this government took office, I raised an issue with the minister during question period one day with respect to the sales tax as it applied to propane. The minister, as I recall, did not know what I was talking about that day in the Legislature, but did undertake to look into the situation. As a result, happily, the Minister of Finance removed that 7 cent sales tax on propane for residential purposes. I applaud him for that.

Now the next problem, Mr. Chairman, is that the commercial and industrial users of propane fuel feel that they are being discriminated against because the reduction applied only to the residential propane users. I have had a number of requests from people who fall under the category of industrial and commercial propane users requesting that the sales tax be made equitable in that it be dropped the same way as it has been for residential purposes.

I have written to the minister on this, Mr. Chairman, and have had a reply back, which was very similar to a reply that I got two years ago on this same issue. So I am hoping that even though the minister says at this time that it has to be studied in depth, he will soon be able to rectify the inequity that now exists.

The interesting thing, Mr. Chairman, is that the list of industrial and commercial users of propane is quite astounding. I would suggest that if the Minister of Finance does not wish to reduce the sales tax on the propane used by those that are generally considered within the category of industry and commerce, at least he could consider removing that tax on others who are in that category now, but whom I don't think should be.

For instance, I have had representations from the regional districts, from various municipal councils, from the YMCA, the YWCA, the Native Sons of Canada. All of these people are considered to be commercial or industrial users of propane. Hospitals, schools, the Morecroft Camp committee, the Central Arts Alliance.... Now there's an organization which is a non-profit society, and which is funded by the B.C. Cultural Fund. Yet they are considered to be an industrial or commercial user of propane, and therefore must continue to pay the sales tax. The Boy Scouts of Canada is another one which is considered to be a commercial or industrial user of propane.

What I'm asking today, Mr. Chairman, is that, if the minister wishes to continue to leave the sales tax on those users who are considered commercial or industrial in the usual sense, then at least he remove it from others such as hospitals, schools, municipalities, Boy Scouts, YWCA and YMCA, Native Sons and other organizations such as that. I really would like to have some comments from the minister on that particular issue.

I've also had brought to my attention this morning, Mr. Chairman, another inequitable situation with respect to sales tax. People who rent propane tanks - and most people rent these on a yearly basis - find that the cost of this rental is escalating very, very rapidly. This year some of the people are finding that their rental on the use of the

[ Page 772 ]

tank has gone up by 50 per cent. Why is it that a sales tax is charged on the rental of these propane tanks? We already have a sales tax charged on propane, which was removed recently for residential purposes, but people still have to pay a sales tax on the rental of a tank. I don't think that that is fair, and I would like the minister to consider having that tax removed.

[Mr. Rogers in the chair.]

Mr. Chairman, the Minister of Finance, when he was introducing the new Assessment Act, assured the House that there would be no great change in the incidence of taxation as a result of this new 100 per cent assessment. He assured the House that, because the government was going to set rates, this incidence in the various taxations would not result in any sort of dramatic upheaval. But that's not the case in the area of Courtenay and Comox because of a particular situation. I think there are only two or three areas in the entire province that have been affected in this manner. I raised this the other day during the budget debate.

I have a copy of a letter which has gone to the Minister of Finance with respect to what has happened in the assessments within the regional district of Comox-Strathcona, as a result of the drop in assessed values for tree-farm and forest land. Now this represents a major tax shift, Mr. Chairman. It means that the residents of the Courtenay-Comox area are going to have to pay much higher taxes in proportion to what they have paid before. Out of an assessed roll of $116 million, there has been a reduction of $13 million because of the changes in the forest and tree-farm licence assessments.

Now, Mr. Chairman, I'm appealing to the minister this afternoon. The city of Courtenay has gone to the Minister of Municipal Affairs (Hon. Mr. Curtis) with respect to the problems that they are going to have throughout the regional district, paying for the operation of the new pool-arena complex. The only thing the Minister of Municipal Affairs has been able to do for them, to assist them financially, is to allow them to raise the mill rate illegally, with the proviso that they go to the people in a referendum in November of this year. Now, Mr. Chairman, that does not assist them in overcoming the problem of the disparity that now exists. The Minister of Finance assured us that the residents of the province would not have to carry a heavier load, that there would be no great shift; and here it has taken place, and it's completely unfair to expect the residents of that area to pick up this drop in assessed value for the tree farms and the timberland in the regional district of Comox-Strathcona. I'm asking the Minister of Finance this afternoon to come up with some sort of special warrant that could be given to the regional district of Comox-Strathcona in order to assist them with the problem that exists as a result of the new Assessment Act.

The school district has applied to the Minister of Education as a result of this dramatic drop in assessed value. The only thing they got from the Minister of Education was $1,700 or $1,900, which is not going to assist them very much, in terms of the mill rate for school purposes. In view of the fact the minister stated very clearly that he would ensure that there would be no tax shift take place and the fact that we have here an example of a dramatic shift, I wonder whether or not the minister will commit himself and commit the government this afternoon to assist that regional district directly with a financial contribution. I feel that in view of the fact that this shift which was promised would not take place has taken place, the minister should this afternoon offer some financial assistance to those people, as a result of the new assessment bill.

There is one other very minor point I would like to raise with the minister - although it is certainly not minor to the people concerned. This is another issue which I have written to the minister about. As you know, children's clothes are not subject to sales tax. People who live in communities where there is access only by water f find that an essential piece of clothing is a life jacket for a child. They have written to me on several occasions asking why, when this is an essential piece of clothing in the community in which they live, the Minister of Finance will not remove the sales tax from that particular item. I wonder if the Minister of Finance would comment on that as well.

MR. LEA: I'd like to ask the Minister of Finance, in his duty as custodian of the financial affairs of this province, who now owns the $151.5 million worth of assets that are being transferred into the resource corporation. That's my first question; I'd like an answer to that before I go on.

Interjection.

MR. LEA: Maybe I could just get the minister to nod when I hit upon the right answer to the question. I asked who owns the $151.5 million worth of assets being transferred to the resource corporation. Is the answer the

[ Page 773 ]

Legislature? No. Who owns those assets now? We'll probably have to take it as notice anyway, so we'll try to answer it for him.

The people of the province own the assets that are being transferred to that resource corporation - $151.5 million. I don't think there is anybody in this House who doesn't understand and realize that that is a very low estimate of the assets. The people of this province own the assets that are being transferred to the corporation.

The government states that what they are going to do is make those assets available to the people of British Columbia so they can invest in the resources of the province. What I find a little confusing is that the people own those assets in their entirety now. In other words, every person who is a citizen of this province owns a piece of the assets being transferred into this resource corporation. After they are transferred, the people of British Columbia are going to be offered a chance to buy those assets, as I understand it. I think that's correct, is it not? I assume that's correct.

I would like to know from the Minister of Finance what benefit there is to the people of this province to sell their assets to this corporation to be sold to the people of British Columbia. Before he makes this transfer of assets, I'd like the minister to tell me what advantage there is to the people of British Columbia to transfer something they own into a corporation that's going to be sold to the people who already own it. Does it make any sense whatsoever? Maybe it does, and maybe the minister can explain to the House why it makes sense. Or maybe the Premier could answer it. But the minister is in charge of the transfer, through legislation, of those assets.

MR. CHAIRMAN: Hon. member, you have already made the point that the Premier has been appointed as the one who will be responsible.

MR. LEA: He will be after their transfer, but we are talking now about before the fact.

MR. CHAIRMAN: You will relate this to the Minister of Finance.

MR. LEA: Of course. They have to be transferred through the Minister of Finance. It hasn't been done yet. What I want to know is why the Minister of Finance is transferring $151.5 million worth of assets to a corporation that is going to sell them to some of the people of British Columbia. Before he makes that transfer, I'd like the minister to tell me his reasons for doing that.

MR. LAUK: Mr. Chairman, is the minister going to respond to the questions?

MR. CHAIRMAN: The Chair cannot do anything but recognize the member standing.

MR. LAUK: Has the Chairman got any special information from the minister that would indicate that he's going to respond to the questions that have been asked of him for some two hours now? He hasn't stood in his place.

SOME HON. MEMBERS: Order!

MR. LAUK: Mr. Minister, are you going to get up and answer these questions?

MR. CHAIRMAN: Please address the Chair.

MR. LAUK: I move the committee rise, report progress and ask leave to sit again.

SOME HON. MEMBERS: Oh, oh!

Motion negatived on the following division:

MR. LAUK: On a point of order. Mr. Chairman, when there's a request for recording it's not a question of whether we're afraid to have a vote recorded. The question is that on those kinds of procedural motions, I request that all members of the House do not ask that it be recorded because you've no idea of the work that is caused f or the Clerk and the others. (Laughter.)

[ Page 774 ]

MR. CHAIRMAN: That is not a point of order, and I'm sure you're aware of it.

MR. LAUK: Do you have any idea what kind of work these poor Clerks ... ? Look at them there, tears dripping off the edges....

MR. LEA: Mr. Chairman, I think that the people of this province have a right, through the Minister of Finance to know why it will be of benefit to the people of this province to take assets of this province, transfer them into a corporation and then sell them back to the people of the province. For the life of me, I can't figure out why it would be of benefit to the majority to take assets that are owned by all of the people of this province, transfer them into a corporation, and sell them to a few people in the province. There is no logical sense to that, none. So if there's no logical sense, and a government does it, then you have to assume that it's politics. Oftentimes decisions made by government make no sense because they are strictly political manoeuvres.

Can you just imagine, Mr. Chairman, the conversation in the cabinet room? They say: "How do we make ourselves look good politically? Well, I'll tell you what we'll do. We'll tell everybody in the province that we're going to sell the resources to them, that they're going to get an opportunity to buy resources, and they're going to have a stake in this province through purchase of resources. But what resources can we sell them?" So they look around, and they say: "Well, what are the kinds of assets in this province that people may be interested in buying? What are the good assets that people may be interested in buying?" They looked around, and what did they find as the good assets? They found Canadian Cellulose, purchased by the previous government. They found Plateau Mills....

MR. KEMPF: Stolen by the previous government.

MR. LEA: Stolen from whom? You mean you're going to sell stolen property?

MR. CHAIRMAN: Order, please. Hon. member, this subject has been canvassed previously, during the discussion on the bill itself. We are under the estimates of the Minister of Finance.

MR. LEA: Mr. Chairman, we are now getting to the point where the Minister of Finance, under his jurisdiction, is going to transfer assets to that Grown corporation. I don't think it's unreasonable to ask the Minister of Finance what benefit he sees that the transfer of these assets, and the sale, is going to be to the people of this province. What benefit can there possibly be to take assets that are owned by everybody and sell them to a few? I see the' Minister of Consumer and Corporate Affairs (Hon. Mr. Mair) looking perplexed, and so he should, because what are the benefits?

There are absolutely no benefits to the people of this province, and that government knows it. You know something else? The Minister of Finance cannot even stand in his place in this House and defend the bill that was brought in by the Premier. When the Minister of Finance, under whose jurisdiction these assets are going to be transferred, cannot stand in his place in this House and defend it, then the province is in bad shape indeed.

The Minister of Finance can't defend the actions of his Premier and his government. Is he going to sit there all day, or is he going to stand up and defend the policy of his government?

HON. MR. WOLFE: Mr. Chairman, we've just heard a pretty clear description of the real philosophical difference between that membership over there and this government, because the whole purpose of this legislation is to give the people of the province of British Columbia an opportunity to invest in the resources of this province.

MR. LEA: They already own them!

HON. MR. WOLFE: The trouble with that group is that they don't think the people of this province are smart enough to know what to invest in. But we have confidence in the people of this province, to know enough where to place their money and where to invest it. They think the government knows better. We're just saying that. the people of the province are just as smart as the government is - in fact smarter. So that's the whole purpose of this bill. The people of this province should have the opportunity to share in this development by directly investing in this corporation.

Mr. Chairman, I think the member asks very clearly: who owns the assets now? Perhaps he is not aware that, by order-in-council, these assets were transferred on March 2,1978. They have already been transferred, the transaction has already taken place. As he well knows, these questions related to the B.C. Resources Investment Corporation can be

[ Page 775 ]

asked under the Premier's vote. He is the person appointed to administer this Act.

MR. CHAIRMAN: Hon. members, just before I recognize the next member standing, I would like to just read a little passage from the 17th edition of Sir Erskine May's Parliamentary Practice:

"The administrative action of a department is open to debate, but the necessity for legislation and matters involving legislation cannot be discussed in Committee of Supply." It is quite plain. It's on page 766 of Sir Erskine May (17th edition) .

MR. LAUK: Mr. Chairman, thank you for your ruling. That means, of course, any legislation that's presently before the House.

Mr. Chairman, I was very amused at the Minister of Finance's remarks. He said that we didn't think the people were smart enough...

HON. MR. WOLFE: That's correct.

MR. LAUK: ... to know what to invest in.

HON. MR. WOLFE: Right. You don't want to give them the opportunity.

MR. LAUK: With great respect, Mr. Chairman, through you to the Minister of Finance....

HON. MR. WOLFE: Close it up! That's exactly what you think.

MR. CHAIRMAN: Order, please.

MR. LAUK: With great respect, Mr. Chairman, the Minister of Finance is pulling the wool over the people's eyes. He doesn't think the people are smart enough to see through the sham of this legislation that's passed this House, and the sham of setting up the corporation that will deal with these assets. It's not we who do not think the people are smart enough, it's the Minister of Finance and that government who are insulting the people of this province by offering them what they already own.

Now I see that the Minister of Finance is back. I asked yesterday about Mr. Charles Brazier and the appointments on various directorships. Is the minister prepared to answer those questions today?

HON. MR. WOLFE: Yes, Mr. Chairman. I believe the member asked me - although I don't have the specific questions in front of me - which directorships Charles Brazier, who is currently a director of B.C. Hydro, might have. I am informed they are as follows: Aurora Investments Ltd.; of course, B.C. Hydro and Power.... There is a fairly substantial list, Mr. Chairman. I think it might be more appropriate if I tabled the list.

MR. CHAIRMAN: Well, we- cannot table in committee.

HON. MR. WOLFE: I'll ask leave to table later on.

MR. LAUK: The minister will table them in the House. Thank you. With a nod of the head, Foundation Western - was that one of them? Just let him nod his head, Bill. Don't get excited.

MR. CHAIRMAN: Order, please.

MR. LEA: At least let him nod his head once in a while.

MR. LOCKSTEAD: I'll yield to the Minister of Finance if he cares to answer.

Well, Mr. Minister of Finance, through you, Mr. Chairman, I'm going to be changing the topic. I just want to take a few moments of the time of this House to discuss some aspects of B.C. Hydro, for which you are responsible to this Legislature.

Before I get into my remarks, Mr. Chairman, I'd like to go on record as concurring with the remarks made by the Leader of the Opposition, the member for Vancouver East (Mr. Barrett) yesterday on the matter of referring sensitive questions to committees. The reason I wish to go on record as supporting the leader's remarks is very simple. I believe -and this is my personal view - that when cabinet ministers in this Legislature refer important questions such as were raised yesterday to committees that are dominated by government members, committees that do not have the time to properly delve into many, many serious matters that could be referred to these committees, and those answers are not forthcoming in this House.... For example, in the Columbia River deal, British Columbia, through bad management of fiscal policies, made a deal with the United States to sell downstream benefits for power for 5 mills, which are now worth 14 mills. That's part of the reason why that particular project put the taxpayers of this province in the glue for about $1 billion.

However, I did want to talk for a few minutes about Hydro generally - this huge monstrous, unregulated corporation that has

[ Page 776 ]

tentacles that delve down and affect the lives of every citizen of British Columbia. As I said, this huge corporation is unregulated. It operates under its own Act, and by an order-in-council that was passed in July, 1965. Order No. 2193 gives it the authority to have power, to generate, manufacture, distribute, supply power, and to develop power sites, power projects and power plants. In other words, Mr. Chairman, what I'm saying is there is no regulatory agency that that corporation has to report to. They are not responsible to anyone except the board of directors and the cabinet, and that's why we're discussing Hydro at this moment with the Minister of Finance, who sits on that board of directors.

Mr. Chairman, at some point in time the provincial government must surely find it politically expedient to hold a public hearing into the energy future of British Columbia, which raises another point. I understand that the B.C. Energy Commission has recently completed a study of a discussion paper on the future energy needs of British Columbia. What bothers me a little bit is that that paper was not made available to this Legislature prior to these estimates coming up. Of course, I'm presuming that the government will table those discussion papers next year so that all of our citizens will have an opportunity to join in those discussions.

But what I wanted to discuss here at the moment, Mr. Chairman, was one aspect of B.C. Hydro's activities that bothered me a great deal. By now the minister has probably heard about the 500 kilovolt transmission line which B.C. Hydro proposes to construct between the Cheekye substation near Squamish to the Dunsmuir substation near Qualicum on Vancouver Island. The proposed route is from Cheekye over the mountains to Salmon Inlet, to Cape Cochrane on Nelson Island, thence to Texada Island, and from Texada to Vancouver Island, either over Lasqueti Island or direct, with, I think, seven overhead spans and a very lengthy underwater submarine cable. If this project proceeds, it will be the longest underwater transmission cable of this size in the whole world.

Since I started to collect information concerning this project, I have discovered that this power line has far-reaching implications, Mr. Chairman. Vancouver Island's present peak load is 997 megawatts. The new power line consists of two circuits of 1,100 megawatts each, one to be completed in 1983 and the other in 1986. Vancouver Island's present electrical capacity is 1,625 megawatts. By 1986, then, Vancouver Island's peak electrical capacity will be 3,825 megawatts, almost four times the present peak load. The problem here, Mr. Chairman, is that we've pretty well established that B.C. Hydro's projected power requirements for Vancouver Island are vastly overrated. This is what it all boils down to. There are a number of other items that we will be discussing in a few minutes - or at least I will be -utilizing energy alternatives.

For the information of the minister, when this particular project became known to residents of the Sunshine Coast area of my riding, and to people on Texada Island, Lasqueti Island and Vancouver Island, huge meetings were held in many of these communities. I attended many of those meetings. Just as an aside, you might be interested in knowing that in all of my time in political life in this province this is the f first and the only issue where I have seen socialists, Socreds, Liberals and Conservatives joined together on a single issue in protest, questioning the need for this 500 kilovolt transmission line. The environmental impact of this line will be absolutely horrendous.

I might give you, Mr. Chairman, a bit of background on this. Beak Consultants were commissioned by B.C. Hydro to do an environmental and overall study, and the Phase I report - a huge, two-volume manual - was published some four months ago or so. It came to light during the course of meetings that we held with people from B.C. Hydro and Beak Consultants that their ground survey consisted of 10 hours of helicopter time. I understand that the person from Beak Consultants who finally admitted to this is no longer with the firm, but the fact is that that was the basis of a huge, two-volume report. It was very badly done. There were numerous errors. I have a list of the errors in that report here. I won't go through all of them, but I'll do one or two. It says: "Little is known of the freshwater fisheries in the area, but freshwater fishery is considered to be of little consequence at the present time when compared to the salt water fishing." What nonsense! This line proposes to cross two major lakes and six recreation areas. Once again, the consultants' report tells us there will be no real environmental impact on the recreational areas or park reserve areas, and the list goes on and on.

Before I give you our proposal, Mr. Chairman, I should make it very clear that this party is not attempting in any way to hinder, the rational economic growth of Vancouver Island. It is clear that additional

[ Page 777 ]

energy requirements will be needed in the future. However, what we are suggesting is a moratorium on the start of construction of that particular 500-kilovolt transmission line.

We suggested a two-year moratorium for the following reasons: first, to research the possibility of alternate energy sources which could be located on Vancouver Island. This would include the utilization of wood wastes. I have information here which is available to B.C. Hydro and to the government. Some of these studies on the utilization of wood wastes were carried on by the lumber industry of British Columbia, by the B.C. Energy Commission, and by the Department of Economics of the University of British Columbia. This particular report by Mr. Allan Cox, who works with Mr. Helliwell at UBC, is particularly interesting. He claims that it is entirely possible that most of the energy needed by the pulp and other major industries on Vancouver Island could be supplied by the utilization of wood wastes. In fact, in some cases there would be an excess of power.

But part of the problem here, with B.C. Hydro, is that the nine companies that utilize 50 per cent of the energy requirements on Vancouver Island have a much cheaper rate structure than the householder. They are now paying approximately 0.8 cents per kilowatt hour, whereas the residential homeowner pays just under 3 cents per kilowatt hour. So it is cheaper for these huge companies to purchase their energy from B.C. Hydro than to produce their own.

Furthermore - I hope you are listening, Mr. Minister - the fact is that, where a company produces excess energy, B.C. Hydro will not buy back, at a decent price, that excess energy to feed back into the system. As I said, they pay now 0.8 cents per kilowatt hour. In my view, what we must do is reverse the rate structure. We should be charging the bulk users of electricity at least as much as the residential user - perhaps more - and lower the rates to the residential user. I feel this would give industry incentive to look for alternate energy sources and would forestall the need for Hydro lines to Vancouver Island for possibly many, many years. My colleague from Alberni (Mr. Skelly) has put forward in this House several proposals along those lines, which I endorse -they are good proposals. In the huge meetings I have attended, on Lasqueti Island, Texada Island and in Sunshine Coast areas, the people are asking for a full public inquiry into that whole Cheekye-Dunsmuir transmission line.

HON. MR. MAIR; How big a meeting can you have on Lasqueti Island?

MR. LOCKSTEAD: The minister asked me how big the meeting was on Lasqueti Island. lie won't believe this, but, at one point or another, the total population attended that meeting. Here is the amazing part: those meetings went on for two solid days, and there were just as many people there during the last hour as on the first day. I want to tell you, by the way, that the hospitality that was extended to all of us by the people of Lasqueti Island, Texada Island and the Sunshine Coast is to be commended, and I thank those people.

I want to get to something a little bit interesting here, Mr. Minister. This is why I hope you are listening. Our meetings on Lacqueti Island were well attended by representatives from B.C. hydro. That delegation was led by Mr. Nash, and those people made a sincere attempt to answer questions. They evaded some questions, but they made a sincere attempt and they did stick it out. But on at least two occasions, Mr. Nash said, under direct questioning, that the decision on this particular transmission line will not be made by B.C. Hydro, but will, in fact, be made by the politicians responsible. These remarks are on record.

Before I take my seat - I have a number of other items - what I'm asking the minister to do is give us a commitment that there will be a minimum of a two-year moratorium on that line. Will he make that decision now? Will he meet with the board of directors in the near future and make that decision and announce publicly that there will be at least a two-year moratorium on the start of construction of that line until we've had a chance to look at the impact and alternate energy sources?

Mr. Minister, I expect that you will not evade answering this question. This is your realm. I don't want to be put off with the answer that you're going to take it back to the board of directors, or that it's not your responsibility, but that of the board of directors'. It's very clear the responsibility lies with you and the members on the treasury benches yourself and the Premier, in this instance and you can make that decision. It is a political decision, we're all well aware. Even people employed in senior management posts at B.C. Hydro agree that we can easily postpone construction of that line for two years, while we look at alternate energy sources.

We can get into that alternate thing, if you wish. You can have all the information I have,

[ Page 778 ]

and I'm sure you'd agree quite readily, if you had the information I have. But, Mr. Minister, I wonder if you'd be good enough to give us an answer on that particular question right now. Will you undertake to give us an answer within the next month, at your next meeting of the board of directors? I want you to alleviate the fears of those people and conserve those people on the Sunshine Coast and the other areas I've mentioned.

Mr. Chairman, I have no end of correspondence here from individuals. I have correspondence here from the Sunshine Coast Regional District, the board, Powell River Regional District, the Islands Trust, all supporting our request for a two-year moratorium, and that's not asking too much. I have lots of correspondence here from people saying: "Abandon the scheme altogether."

But we're reasonable, we're willing to have a look, and we want to see proper studies carried on in that regard. Proper studies have not been carried on, in spite of the fact that you've already spent $300,000 to big consultants for a Phase 1 report, which is totally inadequate and erroneous in many respects.

Mr. Minister, I'm respectfully asking for an answer on this one question. You've failed to answer other questions in this House. You've had to come back at a later date with an answer. I'm willing to wait. You can check this out with your Premier and your board of directors but, Mr. Minister, on this particular question we're asking for an answer. I want an undertaking from you that we will receive a positive answer that you will honour this request by all these people that I mentioned for a two-year moratorium. I'm very serious about this. This is not a frivolous request I'm making, Mr. Minister.

HON. MR. WOLFE: Mr. Chairman, I wouldn't consider any request from the member to be frivolous. Some may be accused of that, but I would not consider that request frivolous. I'm equally concerned over what I read in the newspapers about this proposal. It is of tremendous concern and interest to residents on Vancouver Island. As you are well aware, I'm merely appointed to my responsibility. I've attended one board meeting, at which the matter was not even under discussion. I'm trying to make myself more familiar, and get briefing on the matter, and until I do this I would not be in a position to indicate when the further information or consultants' reports will be available on the matter, because there is considerably more information to be made available to officials of Hydro before decision's are made.

As you know, they've held these hearings, or meetings, because no decision has been made on the routing of this proposal. At the same time, we must face the fact that there is this projected power need to be satisfied in the future. I believe it's fair to say that there is also a recent projection of increased industrial need which was not on stream previously. These questions must be answered. So I'm equally concerned, as are the other members involved in that area, and you can be sure that we will be addressing ourselves to the question.

MR. LOCKSTEAD: I appreciate the reply, and I understand that you cannot give us an answer today on this. But there will be future board meetings, and I'm asking you now to undertake at the next board meeting to.... I'm very well aware of the studies that are being carried on. There are a whole list of questions about the safety and the need for this line. What I'm asking of you now, through you, Mr. Chairman, is that at your next board meeting this question be raised and that a decision be made. It is a political decision. We were told on at least two occasions, maybe more, by senior management people in B.C. Hydro that it will be a political decision made by political people sitting in this Legislature on the government treasury benches, not by the board of directors. You have the responsibility of making that decision. It will not retard the rational economic growth of Vancouver Island. The people in Hydro are very much aware of this. Mr. Chairman, I will be very disappointed in the government and the minister if the request of literally thousands of people in that area is not met.

Mr. Chairman, while I'm on my feet, I have one or two other items here very briefly. Recently - as of April 1, 1 believe - Hydro announced a rate increase in the cost of hydro, particularly to the ordinary homeowner in this province. I have a great deal of information on the whole thing and I won't delve into it all. That rate increase meant a 12 to 20 per cent rate increase to the ordinary people of this province. What bothers me is that I have received a letter here from a lady, a senior citizen who has kept track from the year 1971 to 1978 of the cost of hydro and her income in comparison. The fact is, to make a long story short, while her consumption on hydro has decreased from the year 1971 from 3553 to 3466, the cost has gone up to this person some $62 per month. What I'm saying is that this type of increase, which is well over the guidelines established by the

[ Page 779 ]

federal government - guidelines that the provincial government agreed to - hits the poor people, the elderly - the working people harder than the rich.

By the way, it is projected that within five years there will be further 60 per cent increase in hydro rates in British Columbia. I don't know if that is correct or not but that is a projection I believe was made by a previous minister, if I'm not mistaken. Am I correct? The former minister shakes his head. Somewhere in that area. And so we're very concerned about these rate increases when we should be looking at alternate sources of energy.

Mr. Minister, I want to discuss another item here for just a few minutes. Last December in the community of Bella Bella we had a power outage which lasted some six days. There was a great deal of suffering in the community because of that power outage. It turned out that the transmission line from Denny Island to Campbell Island was ripped out by a passing towboat in the dead of winter with raging gales and blizzards. I personally did not become aware of the situation until December 8, two days after it happened, when the band manager, Cecil Reid, phoned me and said: "Look, we're freezing to death up here. We have absolutely no hydro. Some people who are lucky enough to have boats have moved into their boats. Other families are moving together into their homes - whole families into one house. Some were burning furniture to keep warm, closing off rooms, no cooking facilities. A horrendous situation."

I immediately phoned the general manager of Hydro and asked him what was being done and he told me he was waiting for an assessment of the situation. He spent two days waiting for an assessment. However, the general manager of Hydro was good enough to phone me back that evening and say: "Well, we have a spare generating unit at Bella Coola and we're going to take it down to Bella Bella, some 80 miles away." They got the tug into the river, but it got frozen in the river overnight and so there was no generating unit.

Once again, he did notify me at that time. What they would try to do was fly in an alternate cable by helicopter. But the fact is, the weather turned nasty again, as it can do up in that part of the coast, with a violent blizzard, below freezing temperatures. The helicopter couldn't fly. The emergency programme people became involved at this point. "The only alternative we have is to divert the Queen of Prince Rupert to pick up the cable from Port Hardy with the crews and get that cable up to Bella Bella as soon as possible."

I must at this point say that the emergency programming, people did an excellent job during this whole situation. But when the emergency programing people phoned the B.C. Ferry Corporation, asking them to divert the ferry, the answer was no. And here are these people freezing to death.

MR. CHAIRMAN: I appreciate your point. I think perhaps this would be better discussed under the Minister of Recreation and Conservation (Hon. Mr. Bawlf) as far as your difficulties with the ferries.

MR. LOCKSTEAD: No, I'm making a point. I want to make two points.

MR. CHAIRMAN: Please relate it to the estimates of the Minister of Finance under vote 92.

MR. LOCKSTEAD: Well, just be patient, Mr. Chairman.

We're talking about Hydro here in a severe situation where people were forced to live in below freezing temperatures and gales. I want to tell you at that point I phoned Mr. Gallagher from the B.C. Ferries, and he immediately, within 40 minutes, diverted that ferry.

But the point I'm making, Mr. Chairman, is this. The generating plant is located on Denny Island, where there are approximately 100 residents, when it should be located on Campbell Island where there are 1,200 residents. Now I know that generating plant was originally put on Denny Island for political reasons by a former Social Credit government. However, that's all water under the bridge. The point is, what I'm asking the minister to do now is to consider building a generating unit or placing a generating unit on Campbell Island where the majority of the population live. That's what should be happening, Mr. Chairman. And that is a valid request to the minister responsible to this Legislature for B.C. Hydro, let me tell you.

How much time have I got, Mr. Chairman? I've got lots more to go here.

MR. CHAIRMAN: Please continue. I'll give you warning.

MR. LOCKSTEAD: Okay, just one more little topic here. I want to discuss one other topic briefly. B.C. Hydro is well known for its practice of spraying all kinds of poisoned material all over the province. I have an article here dated April 2,1978, by Stephen

[ Page 780 ]

Hume in the Daily Colonist. But the point is it says: "2, 4, 5-T Dosage May Be Doubled."

Now I have in my possession, and I have made copies of and passed on, numerous letters from people in my constituency, petitions to the various ministers responsible and to B.C. Hydro protesting the use of these chemicals along Hydro rights-of-way. Once again, the regional board and the municipal councils in my riding have all protested, and environmental groups have protested vigorously against the use of these toxic chemicals. Once again, MY colleague from Alberni (Mr. Skelly) has made the point in this House of ten and very well about the dangers of the use of these chemicals.

I would like the minister to answer the following questions: Will Hydro be using toxic chemicals on Hydro rights-of-way this year? On any right-of-ways, will toxic chemicals be used? Then I would like to know in what areas those toxic chemicals will be used, and what the chemicals to be used are. What chemicals are you going to be using?

It's interesting that in July, 1977, B.C. Hydro put out a pamphlet that says the chemicals 2, 4, 5-T and 2, 4-D are about as toxic as table salt, with no harmful residues, and that you can literally bathe in the stuff. What garbage! What utter garbage, particularly when we heard from the member for Alberni about the effects of some of these chemicals. So, Mr. Chairman, I'll leave it at that. I hope for some answer from the minister, and we'll see what happens.

MR. SKELLY: I'll defer to the minister, Mr. Chairman, if he wishes to answer those questions.

MR. CHAIRMAN: Please continue.

MR. SKELLY: Mr. Chairman, I would just like to endorse some of the points made by the member for Mackenzie (Mr. Lockstead) , especially with regard to that 500-kilovolt line that B.C. Hydro plans to build across the Strait of Georgia from Cheekye to Dunsmuir. I'm pleased to see that the minister responsible for B.C. Hydro in this House has changed, because I understand that the Minister of Finance has a vacation home just north of Qualicum Beach, roughly at the location where that powerline will be coming ashore on Vancouver Island. Perhaps B.C. Hydro will be making moves to expropriate his vacation home.

Interjection.

MR. SKELLY: No, it's just down from Judges Road, but fairly close to where the minister has a vacation home. That submarine cable will be coming ashore on Vancouver Island. I'm sure that when public meetings are held in that area, the minister will be one of those Emotional people out on the floor demanding accountability from B.C. Hydro.

HON. MR. WOLFE: Do you want a sample?

MR. SKELLY: I'd like to hear a sample of your opinion on this question. But the member for Mackenzie did ask that at your next opportunity, when you're attending a board meeting of B.C. Hydro, you put the position before them that they declare a moratorium on planning for that powerline until such time as they have fully examined alternative power sources for Vancouver Island.

I'm not thinking of the conventional forms of generation that B.C. Hydro seems committed to, Mr. Minister of Finance, through you, Mr. Chairman. I'm not thinking of those conventional forms, but other energy alternatives.

In the meantime, Mr. Chairman, there is one thing that the Minister of Finance as Hydro's representative in this House can do while planning is taking place on that 500-kilovolt line. I would like to ask the Minister of Finance if he is willing to support this position which was put forward at the Lasqueti Island meeting: that a citizen of the area affected by this 500-kilovolt line be allowed to sit in on meetings of the project planning committee down at B.C. Hydro to provide for an interchange of communication between Hydro's experts and citizens in the areas affected. Would you be willing, Mr. Minister, to endorse that kind of a proposal, that somebody from the areas affected be allowed to sit on the planning committee?

Now to the credit of the Minister of Forests (Hon. Mr. Waterland) and the people in the Kamloops forest district, when the decision was made to proceed with the development of the Stein River Valley, the Kamloops forest district set up a committee between the resource managers and the recreation people and parks people who are affected by that decision so that they will come forward with a plan of development for the Stein Valley which will be more acceptable to the users and the residents of the area. I think that's to the credit of the Forest Service and the Kamloops forest district in particular.

Now I can't see any reason in the world why Hydro can't do the same thing with this 500-kilovolt line, why they can't put a person

[ Page 781 ]

from the area affected, or a designated person, on that project management committee down at Hydro who could sit in on those committee meetings and assist in an interchange of information between the utility and people in the area affected. All over the world, in almost every province of Canada, citizen input is being sought. In fact, in some areas and some provinces of Canada, citizen input is obligatory. Recommendations of the royal commission on pesticides in British Columbia recommended that there be a citizen committee appointed to review legislation and to review administration. Now the particular Minister of the Environment (Hon. Mr. Nielsen) that we have right now rejected that idea because of his known opposition to citizen involvement in decision making.

I think that Hydro could take a great step forward. If the minister would support the concept of placing a citizen from the area affected on that project management committee, that would be a substantial step forward in citizen involvement. I think it would mean that Hydro's plans would be much more acceptable to the people than they are now, being developed in secret management committees, secret development of power demand projections and this type of thing. What we need is more public input to Hydro and I would hope that the minister would go along with that idea. I'd hope that the minister would at least respond to that suggestion.

There are some other questions that I would like to put to the minister. These relate to his role as Minister of Finance in the province. Taxation is traditionally used by a provincial government as a policy instrument. In the present budget he talks about reducing sales tax to generate more disposable income and to generate consumer spending in the province. In the budget, he also relieves small businesses of sales tax on certain implements to expand small businesses, and this is designed to assist small business in developing and growing in the province. So taxation and relief from taxation is used as an instrument of government policy to move the economy or development in a certain direction.

Now the minister has received a letter from a company called Solcan Enterprises Ltd. in Victoria, B.C. I believe all members of the Legislature have received this letter. They've communicated twice with the minister, asking him to remove sales tax from equipment used in solar water and space heating. Now the member for Dewdney (Mr. Mussallem) made an excellent speech a few days ago on removing the sales tax from vitamins - an excellent speech and a good idea to remove sales tax from vitamins which are useful in the nutrition of people living in this province. That's a wise investment of health dollars, I believe, from my point of new, in removing sales tax from those items .

It's a wiser investment of energy dollars, Mr. Chairman, if the minister would, by regulation, remove sales tax from equipment used for solar space heating and solar water heating. He could encourage low-level technology and energy conservation measures which would eliminate the need for Hydro to spend hundreds of millions - in fact, billions - of dollars on projects such as the Cheekye-Dunsmuir power project and other very centralized, high-technology, environmentally sensitive types of projects that Hydro is currently involved in.

So I would like to ask the minister if he has made a decision. What type of decision is he planning concerning removal of sales tax from equipment used in solar water and space heating? The federal government, under their CHIP programme, has requested the province to remove sales tax from insulating materials and that type of thing. I believe the province has gone along with that proposal and it is something that the province can do by regulation. So I'm hoping the minister will respond to that request, and that you will remove the sales tax from materials used in solar space and water heating.

I have just one final question, Mr. Minister, before going on. I believe the member for Comox (Ms. Sanford) brought up the question of the inequity in sales tax on propane. Members on all sides of the House welcomed your change in the application of the social services tax when you removed the 7 per cent sales tax from residential users of propane - this was in the 1977 budget speech, and we supported that. That, at that time, under a 7 per cent sales tax, reduced provincial revenues by about $600,000. In the meantime, it created an inequity between commercial and residential users of propane, whereby commercial users were paying the 7 per cent and the residential users were paying, I believe, 0.5 cents tax per gallon on propane.

Mr. Minister of Finance, through you, Mr. Chairman, some of those non-residential users include volunteer fire departments and other organizations that are not really commercial users. Now I don't think there should be an inequity at all. I think that if a fuel is taxed at a certain rate for one class of user, it should be taxed at the same rate for every class of user of that fuel. So I want to ask the Minister of Finance, if he is willing to

[ Page 782 ]

re-examine the inequity involved in the tax on propane, especially where it applies to such organizations as volunteer fire departments, people who come under the category of commercial users or non-residential users, but who are volunteer organizations, are providing an excellent service to their communities and a volunteer service to their communities. Is the minister willing to reconsider the application of the 5 per cent sales tax on propane for those classes of users?

HON. MR. WOLFE: The member who was just on his feet reminded me of a question that the member for Comox had asked with regard to sales tax on propane. To repeat, we reduced the tax on propane for residential purposes one year ago, approximately, from 7 per cent, which was the sales tax there applying, to one-half cent per gallon. There is always to be kept in mind that the tax on other heating, such as natural gas and electricity, is still taxed at 7 per cent, so you always have the.... If you were to suggest that we should change the tax on propane for commercial use, you should also consider, then, the anomaly which would be created in the present tax applying to commercial use of electricity and natural gas. This would create a further gap in this respect.

In any event, as we all are aware, we have just changed the sales tax from 7 per cent to 5 per cent, an approximate 30 per cent reduction in the application of that tax. I think with regard to propane this probably would bring it down closer to the relationship of one-half cent per gallon. It probably isn't equal, but it's a substantial change by reducing from 7 per cent to 5 per cent - a change of roughly 30 per cent.

I might say that there are many, many applications for exemption, for special consideration for sales tax removal, and as a matter of fact, we added them up the other day to approximate about half the revenue from sales tax - some $400 million out of the $700-odd million dollars of sales tax revenue.

The member asked a question also about sales tax on solar energy equipment. I think the same answer applies. We just did reduce the tax from 7 per cent to 5 per cent. We also have recently removed all sales tax on insulation for housing - this was some months ago - and not all provinces have done this. The province of British Columbia has removed the sales tax for insulation materials. We can't do it all, Mr. Member, through you, Mr. Chairman, but certainly I think we've gone a big step in the direction of encouraging energy conservation.

MR. CHAIRMAN: Just before I recognize the member, I have allowed a little laxity in this, but there is a bill before the House to reduce the tax from 7 per cent to 5 per cent. So where it hits on the minister's administrative responsibilities it's fine, but would you keep it away from just getting into the sales tax angle until we get into that bill.

MR. SKELLY: I realize that the bill is on the table, but this applies to specific exemptions that can be done under the present legislation by regulation. I'm not asking the Minister of Finance to remove all sales taxes on a number of classes of materials. I'm saying that removal or application of sales tax can be used as an instrument of government policy and as an instrument of energy policy. I'm saying that on the one hand we're planning to borrow something like three-quarters of a billion dollars for B.C. Hydro to get involved in massive generating and transmission projects, where we might be able to obviate a lot of that borrowing by relieving sales tax on some specific items that are designed to conserve energy or else develop energy by a more efficient means. Solar energy is one of those means.

The general accounting office of the United States government is an office that does cost-effectiveness studies of programmes developed by the United States government, and certainly solar space and water heating have been identified as a very effective programme in reducing government costs.

The minister has answered the question in general terms: "No, we're not willing to remove sales tax from these items because if we remove sales tax from everything we have been asked to remove sales tax from, then it would go down in half." But I'm asking whether as a specific policy measure, to attempt to encourage a lower level of energy demand and to attempt to encourage more efficient forms of energy production and use, the minister is willing to examine the effectiveness of removing the sales tax on solar heating equipment, as opposed to borrowing hundreds of millions of dollars through B.C. Hydro for these large centralized generating projects.

I think it would be a worthwhile study by the Ministry of Finance to examine that question. As I said before, it has been examined by the general accounting office and the office of management and budget in the United States, and they found out that solar is the best way to go. It's the most cost-effective programme you could possibly develop. So I would urge the minister to

[ Page 783 ]

consider at least studying that and urge him to remove that sales tax from solar heating equipment.

I'm pleased to hear that you've done it from insulating materials. I know that you did it in order to participate in the federal government programme, and I think it's a darn good idea that that is done. But I would like to see it expanded to solar heating equipment.

On the propane thing, you do mention that Hydro users are taxed with sales tax and natural gas users pay the sales tax. But the thing is that in those cases there isn't a discrimination between the various classes of users. Everyone pays the 7 per cent - or when the new legislation comes in, the 5 per cent. But in this case the commercial users pay more than residential users and I think that's unfair. If we set up a rate of tax on a type of fuel, then there should be no discrimination between users.

In some of the measures that you have put forward in the budget, you say that these measures are designed to encourage small business. Now if you are in favour of encouraging small business, there are some areas where one of the main fuels available to small business is propane. How can you encourage small business in those areas by lowering the tax rate on propane to the same tax rate paid by residential users? It doesn't simply apply to small businesses because some of the letters I have received are from volunteer fire departments. Are they are considered non-residential users? They pay the full 7 per cent whereas residential users whom they are protecting from fire pay 5 per cent per gallon on propane.

So I would just urge the minister to consider the inequity between the classes of users. I would like to hear his response on that.

HON. MR. WOLFE: I recall the correspondence we have had on solar energy equipment. I will be happy to review that and look at that again. I must remind you, however, we did reduce the tax in '75, which I think is a considerable savings to whoever might be involved in such purchases. With regard to propane on commercial users, we must remember that they have tax deducibility. I'm aware of the fact that you are referring to volunteer and charitable organizations, and certainly we could have a look at that.

MR. LOCKSTEAD: I would like to ask the minister again, very quickly and very simply, about the use of toxic herbicides on powerline rights-of-way. I know that the minister can't answer the question this afternoon, but will the minister undertake to find out the answer to the following three questions: Will Hydro be using toxic chemicals on rights-of-way this year? Will herbicides be used on powerline rights-of-way this year? In what areas will those herbicides be used? What chemicals are to be used and in what quantities?

Will the minister undertake to find out the answer to those questions, Mr. Chairman? A nod of the head will do and I'll take my seat, Mr. Minister, or a shake of the head and then we'll be into it. Would the minister undertake to f find out the answers to those three questions I posed?

HON. MR. WOLFE: Yes.

MR. SKELLY: Mr. Chairman, one question I posed to the minister on Hydro related to the 500 kilovolt line and the placement of a citizen representative on the project management committee. Mr. Nash of B.C. Hydro, when he appeared on Lasqueti Island, said he would be willing to have a citizen representative attend a meeting. It is a good policy, I feel, to have citizen representation on project management committees because it does provide that interchange of information. Would the minister be prepared to recommend that to the Hydro directors?

HON. MR. WOLFE: Mr. Chairman, I am advised that with regard to Lasqueti Island, as you know, no decision was been made in terms of any routing that would be proposed; and a member of the Lasqueti Island steering committee has already attended a meeting of the B.C. Hydro working group on the proposal itself, in case you hadn't already heard of that.

MR. SKELLY: The question was: is the minister willing to recommend ' that a representative from the area affected be placed on the committee - not simply attending a meeting - to attend meetings of the committee as the project is developed? I don't imagine Hydro has anything to hide from the citizens of the area on the development of this powerline. It's not as if it were a private company that would possibly have business secrets that would harm its competition in any way. So I can't see any objection on the part of Hydro to permitting citizen representation on a full-time basis on this committee.

Would the minister be willing to develop it one step further and recommend that position to Hydro's directors?

[ Page 784 ]

MRS. WALLACE: I would be quite prepared, if the minister has an answer to the member f or Alberni....

I would like to say that at least it's been a slight improvement in the last few minutes of debate here. We have had some answers forthcoming from the minister. It gets a bit discouraging when we sit here asking questions - a "yes" or a "no" or "I don't know" or even "I'm not prepared to answer" would be more acceptable than just that sort of wall of silence that we get. However, I have been slightly encouraged in the last little while, so I'm going to repeat some of the questions that haven't been answered.

You know, we in the opposition get accused of obstructionist tactics here. But when those questions aren't answered, and we don't know whether or not the minister has a note of them or intends to answer them, then we have to repeat. If the minister had been prepared to answer the questions raised by the member for Comox (Ms. Sanford) , I would not be on my feet now asking them again. But I'm going to have to ask them again, Mr. Chairman.

Just before I get on to that, I would like to mention that the minister has said several times, in response to this propane tax thing, that we must remember that he and his government have reduced the sales tax from 7 to 5 per cent and I would like that minister to remember that it is he and his government who increased the tax from 5 to 7 per cent in the first place.

I want to ask the minister about this situation with the forest lands. Now the member for Comox raised this very clearly and very definitely when she was speaking. In her particular regional district, she has the same problem that I have in my particular regional district, where we have a heavy forest-land tax base.

I have some figures here which outline the assessment decreases in the Cowichan Valley regional district - the area around Lake Cowichan. I know you are aware of this, Mr. Minister, because you have had correspondence with this district and have made responses to them, responses which they say are not to their satisfaction and have given them no really firm answers.

Three regional districts have decreases: $1.1 million in Area B; $6.9 million in Area F; and $12.7 million in Area I. Taking the base we have in one regional district, that represents a fairly large proportion of the tax base, with that kind of reduction in the forest land taxation. As a representative at the local level, you are faced with a very serious problem of trying to raise the kind of funding you need to carry on the functions of local government. Mr. Minister, I would request that you give us an answer as to what you are proposing to do to assist those regional districts such as Cowichan Valley and the district of the member for Comox. Can you give us an answer as to what you are proposing to do in those particular instances?

I would point out that I had the sane situation where the school district of Lake Cowichan has written on the same basis, with the same kind of problems, and with the same lack of answers on that particular aspect of the taxation picture too. I realize that relates more to Education than to your department, Mr. Minister, but do you have an answer on that forest land tax situation?

HON. MR. WOLFE: Mr. Chairman, very briefly, the whole purpose of the equalization of assessments to fair market value has resulted in the fact that any area which had a substantial quantity of tree-farm or forest land would have a shift downward in that particular assessment; I think we- are all aware of this. Therefore if we try to monkey around with this system, it would disturb the very nature of the Assessment Act itself. Of course, the impact of this on certain areas will have the effect of a shift in the assessment, but this policy is province-wide. It would not only affect the area you are referring to but also some others, and the reverse might be true in some others. It is to arrive at an equalized assessment for school tax purposes across the province.

MRS. WALLACE: You've explained the principle behind the Act, Mr. Minister, but you haven't answered the question of whether or not you are prepared to give any financial assistance to regional districts that find themselves in very difficult circumstances this year as a result of your Act.

You did give us your assurance at the time you introduced that Act that there would be no violent upheavals as a result of that Act. When you have that kind of a reduction in the assessments in one regional district, that is a violent upheaval in that area. Are you prepared to make any commitment to this Legislature that you will take some action to alleviate that particular situation that has occurred - not, as you say, in just my particular area, but in other areas of the province? There have been problems. What, if anything, are you and your ministry prepared to do about this?

HON. MR. WOLFE: Mr. Chairman, naturally we

[ Page 785 ]

have to look at all of these situations. I would remind the member that the assessment legislation provides for a three-year phase-in for residential and certain other categories which does ameliorate the effect of that shift very dramatically. So there is a three-year phase-in of that change in the tax base.

MRS. WALLACE: I take it the minister is saying that there will be no assistance -other than that phase-in - from this government. This is really no assistance at all, because certainly these people know what is going on. They know the situation they are faced with. These regional districts are going to be in a very bad situation as a result of your policies, Mr. Minister.

Other areas of the tax structure have been mentioned. I want to bring up just one other factor that hasn't been touched on yet. This is the sales tax on children's clothing. We know that there is no sales tax on ready-made clothing, but if you buy a pattern to make clothing, or if you buy material to use with that pattern, you pay sales tax. There are a great many parents, particularly in the low-income group, I believe, who attempt to save a bit of money in clothing their children by making their children's own clothing. Having to pay tax on the pattern and on material is certainly a rather unfair assessment.

AN HON. MEMBER: It's a tax on thrift.

MRS. WALLACE: That's right. I would suggest, Mr. Chairman, that it is just as easy to police this as it is to police whether or not a pair of socks or stockings is being purchased for a child or an adult. It's just up to the individual. It's even more easy to police, because very often the pattern and the material are purchased in the same place. If the pattern is a size 8 child's pattern, and you buy material to go with it, it's pretty easy to police and would certainly be a great help to parents who are trying to fight inflation a bit by doing some of their own craftwork and making their own children's clothing.

The main item that I wanted to discuss tonight, Mr. Chairman, has to do with - and I'm sure the minister will have guessed it -the farmland assessment. I'm wondering whether or not the minister has received as many letters of concern and complaint as I have as a result of the new policies on farmland. These regulations that were brought in by his ministry after the passage of the Act have wrought a great deal of concern, particularly among the small landholders. If you have a large operation, you're probably not as unfortunate because the $1,600 plus the 5 per cent on additional areas over the 10 acres, providing the productivity value of the land is a fair productivity value, is probably not too difficult to cope with, with the one exception where you do not have a sale for your product. I think one of those areas has been pointed out quite clearly recently in the case on the lower main-land where the potato growers have lost their processing plant and there will be no market for processed potatoes next year. Now if those farmers are not able to sell their product, what are they going to grow on that acreage and what are they going to sell in order to bring in the kind of income that's required under your Act, Mr. Minister, to allow them to maintain the farm classification? Without that farm classification, their taxes are going to skyrocket, and they're going to be forced off that land, because there is no way that they are going to be able to put it into forage crops. Even at the present rate of tax, forage crops will not cover the farmland rate of taxation. So if it goes into another classification, with a higher tax rate, it's just going to mean that that's the end of that land as far as its being used for agricultural production. That, in turn, has the added implications of putting additional pressures on that land to have it removed from the agricultural land reserve. It's part of a very vicious cycle that's going on here in British Columbia, and those of us who have been involved in studying this whole cost of food situation on the select standing committee have had an extensive education into just what is happening in that area. I would urge you, through the Chair, Mr. Minister, to re-evaluate that particular portion of your regulation.

There's another area that has great concern to me and that is the small holder. I have many, many people in my particular area who perhaps have been born on a piece of land. They have lived there all their life. They have farmed on a small scale when farming was carried on on a much smaller scale than it is now. They have reached the age of retirement and they are living in that same family home, but there is no way that they are going to be able to produce $1,600 worth of saleable product off that first 10 acres. What's going to happen to those people, Mr. Minister? Are they going to be forced out of their homes? Senior citizens in receipt of old-age pensions are not going to be able to pay the increased taxation, even with all the benefits your

[ Page 786 ]

colleague is giving them in the way of homeowners' grants.

When you get into that change of classification, your taxes skyrocket. It's a very sad situation to see those people who have lived their entire lives on a piece of land being put into a position where they are extremely concerned about being forced off that piece of land.

It's also very difficult to build up a farm if you are starting. I know you've given a year's extension so that you have a year to build. In the regulations that are put out by the Assessment Authority, item 9 states that the assessment commissioner may classify land as a farm where he approves of the farm development plan for that land, indicating he is satisfied that the land is being developed as a farm and that it is likely to reach the standards for classification as a farm in the near future. Well now, I have some trouble with that sentence. I just couldn't really grasp exactly what they were trying to say so I talked to the assessment officer. He tells me that to classify as a farm, as this is intended, means that you have to have a minimum of 51 per cent of your income or $5,000 gross off 10 acres. Now I don't think your farming experience is too great, Mr. Minister, but I would suggest to you that it's practically an impossibility, if you're building a farm, to reach that level in one year. It's practically impossible to reach that kind of growth in one year. Again, we're going to have a very difficult situation for people who are trying to establish them elves as farmers with the regulations as they now stand.

There's another side to the coin, Mr. Chairman, that I would like to raise with the minister, and that is this. I have heard it estimated by members of the Assessment Authority that they believe that approximately 50 per cent of the land that is now classified as agricultural will not qualify for the farm classification under this regulation, that it does not qualify at the present time. Now, if this is the case, the concern about developing that land to qualify is going to bring on such an inrush of product into British Columbia that I would ask you, Mr. Minister, what you're proposing to do with that extra product, because certainly the farmers of British Columbia are already facing problems of disposition of their product. And if, in fact, we force people to increase production -everybody's getting a couple more cows, or putting in three or four more rows of carrots, or buying some chickens, or whatever to try and build up their production so they can reach this $1,600 that, s required - it's going to put so much more product on the market, either through official channels or unofficial channels - because we here in British Columbia can only eat so much - that it's going to work a very great disadvantage on the market situation, it's going to put pressure on the farm economy. I'm asking you, Mr. Minister, how you propose to dispose of that product that's going to be produced in order to try and maintain this farm classification.

I think it's a very serious situation, Mr. Chairman, and it is one that I would urge the minister to give some consideration to - and hopefully some answers - because, I can tell you, I have been swamped with letters from people who are concerned about this situation, as to how they are going to have to move in order to maintain farm classification, and how they are going to be able to get rid of that product, and dispose of it in order to show the kind of income that is required to maintain that farm classification.

HON. MR. WOLFE: Very briefly, what we're dealing with here, in terms of the farmland classification, is that it is not so much concern over the farmers. Anyone who is farming in the normal sense, and producing, naturally will continue to qualify for that classification. I might say it is a substantial saving in terms of assessment, probably ranging upwards of 10 per cent of normal residential assessments - that would be the benefit obtained through having a farmland classification. Now what we're talking about is attempting to identify clearly those who will in the future qualify for Grown land.

I think the authority, in proposing this to the legislation, is quite flexible in coming down on the requirements for this qualification. For instance, $1,600 has been set out as the requirement for the amount of production off X acres of property applying so that you can qualify for the year 1978. In other words, this requirement is not in effect.... I should say, it's applied to 1979. It does not apply to 1978 at this moment. So I'm just saying that the $1,600 has been a prescribed figure, which is, in my personal view, quite reasonable, but it's not etched in stone. That figure could be reviewed in the future. Any person who now enjoys farmland classification, who might stand in some jeopardy of losing it in the future, has only to file some plan or give some indication, even over a term, that they will in the future qualify for this, and I'm certain that they won't lose their classification.

[ Page 787 ]

MR. GIBSON: Mr. Chairman, I had to be out of the House for a short period this afternoon, but it's my understanding the minister has not as yet replied to my question as to the amount of cash and temporary deposits that he has on hand now, and why he hasn't seen f it to pay off British Columbia's debt of some $261 million, as listed on the balance sheet for March 31,1977. We don't have the balance sheet, of course, for March 31,1978.

I'm asking the minister, since it's apparent from the revenues from government investments having gone up from roughly $8 million to $32 million in this current year that his temporary deposits are very large indeed. Since it is obvious as well that the interest on that debt, which the minister has always been against, is going up roughly from $14 million to $22 million, I would have thought that the minister would want to use the money and the short-term assets he has lying around to discharge that debt unless, as some people have suggested - I hope not correctly - he is purposely keeping that debt around to use during an election year.

AN HON. MEMBER: Oh, he would not do that.

MR. GIBSON: I hope he would not do that but I just want to be very clear on it. Would the minister, at this point, be so kind as to answer that question? Does he have the financial resources to discharge that debt of $261 million carried on the balance sheet now? If he does, why doesn't he pay it off?

AN HON. MEMBER: It's an old Liberal trick.

HON. MR. WOLFE: Mr. Chairman, the only way I could answer that question is to say that arrangements are made to provide for the debt as applied over a term. From time to time we may have resources with which to pay off part of this debt but this would be foolhardy in my view because the cash flow varies very substantially from one month to the next. Therefore it makes good sense at the moment to keep this debt intact to provide for future plans to retire it - which we will do - and in the meantime provide for any surplus funds which accrue from one month to the next, which, as I say, fluctuate very dramatically, through short-term investments.

MR. GIBSON: I don't understand the ministers answer. If he has the money I think he ought to pay the debt off and then if he needs some more money later he can borrow it. I think his answer makes clear that that debt is going to be one of the features of the next election.

Now I'd like to get on to the minister's definition of what the proper percentage of the gross provincial product for the provincial government to be spending is. In a speech last October - I think it was about October 25 - to the Canadian Pulp and Paper Association, the minister indicated that the long-term target for the proper percentage of the British Columbia economy to be disposed of by the provincial government was 12 per cent. I want to ask the minister to explain to this House in some detail - either now or in a statement to be issued in due course - exactly how he defines what should be counted within this 12 per cent.

My personal feeling is that the real target number he should choose should be both provincial and local, because it is possible for this government to shift certain expenditures from the provincial level to the local level. For example, we have seen many millions of dollars shifted back onto school districts and the local taxpayer this year because the foundation rate has been raised for school taxation. We have seen something like $16 million, which is the cost of the Assessment Authority, put on the local taxpayer, rather than carried at the provincial level, and so on. You can juggle these things back and forth - that is my point. The only way you are going to get a fair reading is by combining the two together. Since the municipalities are creatures of the provincial government, it is only fair to combine their expenditures.

What do you include, Mr. Chairman? We often hear comparisons that in Canada something like 40 per cent of the budget is disposed of by governments, and in the United States it is about 35 per cent. But one of the great differences is that in Canada medical costs are paid out of the public purse; in the United States they are paid out of private resources. There is no difference. The same medical costs are being paid.

MR. LEA: Except our per capita expense is lower than in the United States.

MR. GIBSON: But the point is that in the United States they are charged allegedly to the private sector and in Canada they are charged to the public sector. There is no real difference in what is going on. It is just an accounting tool. That is why I say that it is so important that the minister specify just what he is talking about when he makes up this 12 per cent figure.

Does it include - or should it include -

[ Page 788 ]

emanations of the Crown? I have in mind here the British Columbia Buildings Corporation, the British Columbia Systems Corporation, their expenditures, and so on. What about what might be called "commercial Crown corporations" such as B.C. Ferries, the B.C. Railway, B.C. hydro? Is there any reason why the $60 million transit loss should be in the commercial accounts of Hydro rather than in the accounts of the B.C. government? This would raise the alleged provincial share of the gross provincial product by almost .25 per cent, just by that simple accounting transfer. Where should that $60 million BCR loss be? Again, that would raise it another .25 per cent, if it were charged on a current basis rather than capitalizing it, as the minister can do if he wishes.

It's no big deal if, by accounting, one allegedly lowers the percentage of the provincial government in the gross provincial product. When ICBC and it's deficit was stripped out of the provincial treasury. That in itself resulted in the apparent reduction of almost a full percentage point of the gross provincial product out of the account of the provincial government. But there were really no fundamental changes in the cash flows within the province. Insurance was still being bought and sold, and cars were being repaired. The underlying economic situation was the same, but the minister had done some juggling to make things look better. That is why, so we can compare apples and apples, I would like a definitive statement from the minister, whether now or at some other time. It doesn't really matter, it's a....

HON. MR. WOLFE: Could we change the world "juggling, " Gordon?

MR. GIBSON: You juggled from one account to another; you took it out of the budgetary account and put it into a non-budgetary account. I call that juggling. It's a big juggle, really.

What I want to have from the minister - and a simple undertaking that he will, in due course, do it - is a precise definition as to exactly what this 12 per cent target is meant to relate to, exactly what expenditures are taken into account, what revenues are taken into account and which are not.

Would the minister like to reply or would he like a motion to rise at this point?

The House resumed; Mr. Speaker in the chair.

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

MR. COCKE: Mr. Speaker, on a point of order, I have before me a report from a committee. But, Mr. Speaker, when I read that report, I find it's from a subcommittee. I can't imagine a subcommittee having the authority to put forward a report to the Legislature. It's report No. I from the Committee on Crown corporations.

Mr. Speaker, that, to my way of thinking, is somewhat misleading because when I get down to it, I find that I'm named on the front page of this report as a member of that committee. But then I get down and I find that it's a subcommittee report that I was not party to, nor were the majority of that committee. I suggest, Mr. Speaker, it's something that you could look into in terms of future deportment in this House. I'm a little bit fed up at the way this whole thing is working out.

MR. SPEAKER: Thank you. I'll undertake to review the situation, hon. member, and report to the House.

HON. MR. WOLFE: Mr. Speaker, in committee I undertook to table a list of directorships. I ask leave to table this list at this time.

Leave granted.

Introduction of bills.

AN ACT TO AMEND THE

ROYAL CANADIAN LEGION ACT

On a motion by Mr. Veitch, Bill PR 401, An Act to Amend the Royal Canadian Legion Act, introduced, read a first time and ordered to be referred to the Select Standing Committee on Standing Orders and Private Bills.

Motion approved.

AN ACT RESPECTING THE ROYAL TRUST COMPANY

AND ROYAL TRUST CORPORATION OF CANADA

On a motion by Mr. Strongman, Bill PR 402, An Act Respecting the Royal Trust Company and Royal Trust Corporation of Canada, introduced, read a first time and ordered to be referred to the Select Standing Committee on Standing Orders and Private Bills.

Motion approved.

Hon. Mr. McClelland presents the fourth annual report of the British Columbia Medical Centre, 1977.

[ Page 789 ]

Hon. Mr. William moves adjournment of the House.

Motion approved.

The House adjourned at 6:03 p.m.