[ Page 1455 ]

CONTENTS

Routine proceedings

Committee of Supply: Ministry of Mines and Petroleum Resources estimates.

On vote 171.

Hon. Mr. Chabot –– 1455

Mr. Lea –– 1456

Hon. Mr. Chabot –– 1461

Mr. Gibson –– 1467

Hon. Mr. Chabot –– 1468

Mr. Lea –– 1473

Hon. Mr. Chabot –– 1473

Mr. Lockstead –– 1474

Hon. Mr. Chabot –– 1475

Mr. Lauk –– 1475

On vote 172.

Mr. Lea –– 1475

Hon. Mr. Chabot –– 1475

On vote 173.

Mr. Lea –– 1476

Hon. Mr. Chabot –– 1476

On vote 175.

Mr. Lea –– 1476

Hon. Mr. Chabot –– 1476

Mr. Lauk –– 1476

Hon. Mr. Chabot –– 1477

Mr. Lea –– 1477

On vote 176.

Mr. Lea –– 1477

Hon. Mr. Chabot –– 1477

Mr. Lauk –– 1478

On vote 177.

Mr. Lea –– 1478

Hon. Mr. Chabot –– 1478

The House met at 8:30 p.m.

Orders of the day.

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

ESTIMATES: MINISTRY OF

MINES AND PETROLEUM RESOURCES

On vote 171: minister's office, $87,861.

HON. MR. CHABOT: I'll attempt to be as brief as possible because I know the members are anxious to ask me a few questions, and anxious to move along to more controversial estimates in this House. Tonight I will briefly give a general overview of some of the activities in my ministry in the last year.

Mr. Chairman, 1977 has been a good year for British Columbia.

Interjection.

HON. MR. CHABOT: I'll get to that too.

Mr. Chairman, 1977 has been an active year as far as exploration is concerned for hardrock minerals and coal in British Columbia. This has made it possible for the province of British Columbia to further identify the mineral resource it has in this province, as well as the creation of additional jobs for British Columbians.

One of the barometers - some people don't like to refer to it as a barometer but it does have some significance as far as the interest in the mineral resource of the province is concerned - is the number of mineral claims that are staked in the province. We have seen an increase in 1977 aver the previous year of 28 per cent more mineral claims staked. We escalated up to 37,151 mineral claims last year. It is a far cry from the number of mineral claims that were staked in 1972, but it is substantially better than the number of claims that were staked in 1975, in those dormant years of the mineral industry in this province. The years 1972 to 1975 were dormant for mining in British Columbia.

MR. GIBSON: It went underground.

HON. MR. CHABOT: Yes, as the member for North Vancouver-Capilano says, the mining industry went underground. They turned a lot of ore to waste rock as well in the province of British Columbia.

It has taken some time and some convincing for those people who invest dollars in the exploration of minerals to come back to British Columbia - to convince them that it is an attractive place to invest in, and an attractive place to create jobs for British Columbians. What could be more important than the creation of jobs for British Columbians?

Mr. Chairman, I said I was going to be brief. One thing we can point to with pride is the opening of one mine in 1977.

MS. BROWN: One.

HON. MR. CHABOT: Yes, one.

MS. BROWN: And the closing of how many?

HON. MR. CHABOT: Closing? Just a moment and I will give you the figures on those. I have them here.

We opened the Afton mine in 1977 and the smelter was opened in 1978. We have now in Kamloops 325 productive, meaningful jobs for British Columbians.

There has been a request to find out about mine closures. I'll give you the figures, and I'll give you the names of the mines that closed in British Columbia.

In 1973: Bradina Joint Ventures, Silver Queen, closed - 60 jobs lost; Canex Placer -83 jobs lost; Giant Mascot Mines, Pride of Emery, closed - 198 jobs lost; Placid Oil at Bow River - 49 jobs lost; Reeves Macdonald -119 jobs lost. In 1973 there were 509 mining jobs lost due to mining closures. In 1974: Anaconda Canada Ltd. closed Britannia - 250 jobs lost; Consolidated Churchill Copper closed - 116 jobs lost; Colt Resources - 10 jobs lost; Cominco at Pinchir Lake - 59 jobs lost; Hallmark Resources, the Cronin property - 7 jobs lost; Jordan River Mines, Sunro property - 131 jobs lost; Purcell Development Co. Ltd., Paradise and Mineral King, Invermere, B.C. - 16 jobs lost. So in 1974 we lost 589 mining jobs. In 1975: Consolidated Columbia River Mines Ltd. closed the Vermont property at Parson, B.C. - 25 jobs lost. We lost a total of 1,100 jobs for 1973,1974 and 1975. In 1976, two mines closed: Dusty Mac Mines Ltd. - 16 jobs lost; Texada Mines Ltd. - 160 jobs lost.

Interjection.

HON. MR. CHABOT: There were 176 jobs lost due to mine closures in 1976. In 1977 the number of mine closures is nil.

I can't understand the obsession the opposition has about mine closures, because mine closures were more apparent when they

[ Page 1456 ]

were, government.

But there comes a time when a mine runs out of ore. What are they expected to do - churn dirt? The number of mines that have closed because of economic conditions or because of the lack of ore is really immaterial, because mines come and mines go. So the really important thing is to continue the viability of those that have marginal ore - if possible -and also to encourage the further development of our mineral resource in the province.

Certain minerals in British Columbia were more attractive than others in 1977. It was a difficult year for our two major minerals in British Columbia - copper and coal. They both faced a very difficult year as far as markets were concerned. Others - silver, molybdenum and lead - were far more attractive than copper or coal. Even though we faced a difficult year in 1977 with the two major minerals in the province, I am extremely optimistic for the future in the development of our major mineral resources in the province.

Where our greatest advances were made, as far as my ministry is concerned, was in the field of petroleum resources; 1977 was the most active year in the history of the development of petroleum in British Columbia. There were 304 wells drilled last year, as compared to 173 in 1976. From the figures that I am going to give you about the number of feet drilled, you'd almost think that the whole Peace River is full of holes. But in 1977 there were 1,620, 000 feet drilled for petroleum products in the Peace River, as compared to 928,000 feet the year before. So exploration has been extremely active in the Peace River block.

Interjection.

HON. MR. CHABOT: Yes, they were full of cash for British Columbians.

As a ministry, we have encouraged additional exploration. We have encouraged the industry to drill on summer shoals in the Peace River. We have seen a tremendous acceleration in summer exploration in that area, and we hope to see more this coming summer. The result of this drilling has been to very dramatically increase the natural gas reserves, which we anticipate will again increase in 1978.

We saw the commencement of that controversial natural gas pipeline from the Grizzly-Sukunka region which, in turn, will tap those massive reserves of natural gas which exist in that region, as well as encourage further exploration in that area for additional volumes of natural gas. This exploration activity, which is at an all-time high, has not only been beneficial to the cash flow of the province to the benefit of British Columbians, but has created a boom in the province's northeastern communities such as Dawson Creek, Fort St. John and Fort Nelson. They've never seen such activity. They never had such employment opportunities. The small businesses of that region have never seen the kinds of dollars being spent in the communities that they experienced this past winter.

So the benefits have flowed to the southern part and other regions of British Columbia, and it has been good for northeastern British Columbia as well. It has been good to the rest of the province because of the land dispositions that have taken place up there in the last fiscal year. Because of the encouragement of exploration and the establishment of incentives for exploration, we've been able to accumulate on behalf of the taxpayers of this province $197 million in revenue in the last fiscal year. That is a lot more money, than the $18 million in 1974.

In this year we have started off with the largest sale in the history of Canada - the largest cash offering for land, for the right to drill, ever in the history of this country - in our first sale in January of this year where the province collected $67,293, 000.

Mr. Chairman, with those few words, I want to say that the province of British Columbia has been well served by the policies that have been initiated by this ministry in attracting additional cash flow in order to provide services to people.

MR. LEA: Mr. Chairman, it seems rather strange to me that over the last few months the people of British Columbia have been waiting to hear from this government as to what this government's coal policy is.

MR. GIBSON: You mean what it is today.

MR. LEA: The minister responsible for coal takes his place in the debate, leads off the debate during his estimates and doesn't even touch upon what could be even construed as a coal policy. He doesn't even touch on it. You would think that the Premier had something in mind when he took away the development of coal from the Minister of Economic Development (Hon. Mr. Phillips) and gave it to the Minister of Mines. That's what he did. Because the Minister of Economic Development was becoming a complete embarrassment not only to northeastern British Columbia but to British Columbia and to the rest of the world.

MR. KEMPF: Say it up north - I dare you!

[ Page 1457 ]

MR. LEA: Mr. Chairman, that member down there for Omineca challenged me to a debate in his riding. I went up there and the radio stations made me the offer. He refused and ran. But he can't shut up in the House.

MR. CHAIRMAN: Order, please. We're on vote 171 and altercations with the member for Omineca are not in order under vote 171. Please continue.

MR. LEA: Well, Mr. Chairman, I think you had better talk to the member for Omineca.

This government has sent representatives from the British Columbia government to Japan twice and they've come back empty-handed twice. No wonder the Premier took the responsibility for coal away from the Minister of Economic Development and gave it to the member for Columbia River, the Minister of Mines.

On June 2 - and I'm quoting from the June 3 edition of the Sun - the Premier, the Minister of Mines and the Minister of Economic Development traveled to Nelson. At that point they articulated to the people of this province that they had a new coal policy. What did the Premier say about this policy?

" 'This policy establishes a framework within which this vital natural resource will be developed for the maximum benefit of all British Columbians, ' Bennett told a joint press conference with Economic Development Minister Don Phillips and Mines Minister James Chabot. 'I believe that the economy of this province will be significantly influenced by coal during the next decade and that coal could eventually outrank the lumber business in employment, resource revenue and taxation." 11

These are key points of the new coal policy. The existing $1.50 per ton royalty remains unchanged. Isn't that exciting? Old-age pensioners are paying more money. Every working person is paying more money to live, as is everybody on a fixed income and the handicapped. But this great new exciting policy says that the coal companies won't pay a cent more, even though conservative Alberta is charging considerably more in the same world market under the same conditions than the province of British Columbia.

Bennett went on to say: "It is the philosophy of the government that the coal industry be taxed at a rate similar to that applied to other industries." What does that mean? Similar to other industries - isn't that a great coal policy? At the same time, he said that there would be a bidding system - that companies would have to bid to get coal licences.

HON. MR. CHABOT: No, that's not correct.

MR. LEA: That's what the Premier said, but the Minister of Mines says: "No, that's not the policy." That's the problem, Mr. Chairman. The people of the province have no idea if there is a policy or whether there isn't a policy because we get conflicting remarks from the Premier, the Minister of Economic Development and the Minister of Mines.

Mr. Chairman, the province is now going to be giving approximately 400,000 acres of new coal licences out. We have currently 600,000 acres approximately under licence. We can produce from those 600,000 acres already under licence approximately 35 million tons of coal a year. We are presently producing approximately 12 million.

What is the market for coal? When we have already under licence enough area in British Columbia to produce 35 million tons a year, I think it's incumbent upon us to take a look at the protected market over the years to see whether we need any more coal licences to be given out at this time.

Now during the B.C. royal commission Fording Coal Limited submitted a brief to that commission. What does Fording - one of the major coal producers now in the province - feel about the market in the coming years? From page 4 of the submission it says:

"The outlook for increased sales to the Japanese steel industry and elsewhere is currently clouded by a number of factors.

"1) Japan, after a dramatic rise in steel production since World War II, began levelling off this growth in 1973. Purchase volumes of coal have actually been declining since 1974, and for 1977 it is anticipated that crude steel production will be approximately 100 million tons, about 70 per cent of in-place capacity and 20 per cent below the peak production year of 1973.

"2) Through this prolonged recession, the Japanese industry has over-produced coke, pig iron and steel scrap, and at the same time has maintained full coal stockpiles. Technically, it is very difficult to shut down and start up the coke oven and blast furnace complexes which use coking coal, and throughout this 1973-1977 period the Japanese industry has frequently been optimistically looking for the upturn. The result of these factors is that surplus coal, coke, pig iron and scrap inventories have now accumulated in the Japanese mills equivalent to 15

[ Page 1458 ]

million tons of coking coal, or 25 per cent of their annual requirements.

"3) Hopefully, we have seen the worst of the Japanese steel-making recession, and a steady, but not spectacular, growth of up to 135 million tons by 1982 is anticipated. This implies a growth from 65 million tons of coking coal at present to 75 million tons by 1982.

"4) It would therefore appear that there will be an increase in demand in the order of 10 million tons by 1982. Unfortunately, very little of this additional supply will come from Canada. For technical reasons, U.S. coal imports will have to increase in the order of 3 million tons to keep Japanese coking blends correctly balanced. Full operation of all existing Australian contracts will add 5 million to 7 million tons per year to supplies. Canada's potential share of this expanded requirement would appear to be I million to 2 million tons, and even that might be a hopeful estimate.

"5) Bearing in mind the heavy stock position and the likely slowness of recovery in Japanese steel production, the outlook is for continued volume cuts in existing coal supply contracts, and a great reluctance by the Japanese to consider additional supply. Whatever additional contracts are signed, we are quite convinced they will be small.

"6) In the longer term we feel we can be quite optimistic about the strength of the Japanese economy. They have a highly developed and efficient steel industry, which we do not hesitate to describe as the world's most efficient. A long-term growth rate of 4 per cent per year in steel production would lead to crude steel output of 167 million tons by 1990. We would expect some minor changes in technical requirements for coking coal by that time, but we estimate that conventional coking coal requirements would reach approximately 90 million to 95 million tons by then, or some 25 million tons per year over recent levels.

"7) Australia, Russia, South Africa and other suppliers will provide vigorous competition for this increased tonnage. There may even be in this time span a significant reduction in U.S. coal volumes going to Japan. It does, however, seem reasonable that Canada's additional sales to Japan could be 5 million to 7 million tons of the additional requirement, or 17 million to 19 million tons by 1990."

Now are the opposition and the present producing coal companies the only people who say that this we'll find a problem marketing coal over the next few years? No, there's a member of the Social Credit caucus who feels exactly the same way, the former minister in charge of energy, the member for North Vancouver-Seymour (Mr. Davis) . He feels the same way. Speaking to a chamber of commerce symposium last year in Vancouver at the Bayshore Inn, and being questioned by people from the floor and by the media, the ex-minister said that he agreed that the market for northeast coal or any coal aver tile next year is, indeed, going to be a big problem. There is not going to be the volume that we would have expected from the kind of expansion of the economy that ums going on in the world up to about 1973, and we are in for a big downturn, and probably - and I'm not quoting the ex-minister now, I'm quoting others at that symposium from the coal industry - we could look to 1983 to 1985 before we could expect any increase in our marketplace at all for additional coal of any significance.

I think it's a recognized fact that the market for coal for British Columbia in terms of increased tonnage is indeed not a rosy picture. We are not looking at great increases in coal volume. If we have approximately 12 million tons being produced now from those lands under licence, and those lands are capable of 35 million tons, then can anyone tell me why, for a very insignificant amount of money, we will be alienating Crown lands with coal to the private sector at this time?

All that's going to happen is the same thing that has happened in the past with coal licences and other licences issued from government in a lot of different ways. What's going to happen is that those licences are going to be used specifically for speculation. We know that the coal isn't going to be needed for at least 20 to 25 years. We know that we don't need any more than 10 years lead time, at the very most, to get into production -from exploration to production. Yet 20 to 25 years before the need, this present government is bent on handing out and alienating further Crown land.

What do they get for it? A buck an acre rental. Does it create Employment? Well, if a further 400,000 acres are alienated, the first year they have to put work in at $3 an acre and $2,560 for a coal licence, including the rental. In the second year you can add $640, because they have to do a dollar an acre more work. If you look at the $3, and you look at 400,000 acres, you're probably looking at somewhere a little aver $1.5 million of work that has to be done in exploration.

[ Page 1459 ]

What kind of work is it? is it a big employment programme for $1.5 million? Will British Columbians be the ones who are hired? Not very often, because most of these companies work out of Alberta and they bring Alberta people in. So even though we are alienating new, vast sums of British Columbia land, there is not any work to speak of for British Columbians.

You can imagine, Mr. Chairman, the kind of work that Shell, for instance, would have to do in order to hold its licence. They'd have to pay on a licence $640 for rental, and then a further $3 an acre times $640 for work. Well, you put a Sikorsky helicopter in there for a couple of days and that's gone.

AN HON. MEMBER: You know all about how much helicopters cost.

MR. LEA: You're darn right I do. You ask the member for North Peace River (Mr. Smith) . He rode on it with me.

MR. CHAIRMAN: Order, please, hon. members. Perhaps while I have the member for Prince Rupert's attention, I could remind him of the fact that this subject was extensively covered under vote 5.

MR. LEA: Mr. Chairman, we're under the Mines minister.

HON. MR. CHABOT: You're repeating yourself, my friend. We've heard the same speech three times before.

MR. LEA: We're looking, Mr. Chairman, at relatively little income for the province - $1 an acre rental for new lands that we alienate. Even if they go for the full 400,000 acres, it's $400,000 a year. Now what price is that to sell out our future?

The Minister of Mines is of the old Social Credit philosophy that what we do is take our resources and we say to the multinational corporations: "Look, we've got a real deal for you. We want you to come in and take our resources. Now we're going to charge you nothing, or a token amount, but look what the province is going to gain. We're going to gain jobs and we're going to get income tax from those jobs. We're going to get people spending money, buying groceries, and there's a bit of tax on that. We're going to have the economy going." Right?

I believe that every British Columbian owns a piece of British Columbia. I believe that the government, especially in its handling of resources, should sit back and ask: "What would we do if we personally owned the whole thing? What if we owned British Columbia?" What would we do? Would we actually give our resources away? Would we actually give our future away if we owned it personally?" There isn't one businessman sitting over there who would make that kind of a deal with his own property, with his own resources. They only do it with the people's. You have to ask yourself why, Mr. Chairman.

Politics, under our present system, takes a great deal of money. It takes money for campaigns. Now when resource companies pay for ads on television, in the papers and on radio, what do they expect back? What does a political party have to give them? Nothing.

Political parties aren't rich. I believe that Social Credit isn't a rich party. I don't believe their coffers are flowing with money more than ours or more than the Liberals' or more than the Conservatives' in this province, but they aren't that rich. They can't write a cheque to these multinational corporations and say; "Here, we're going to pay you back for the money you gave us during the campaign."

Is there anybody who is naive enough to think that these resource companies would actually pay for a political party's campaign without expecting some return on their investment? Does the Minister of Mines and Petroleum Resources feel that they would? Does the Liberal leader think that they would? They want some sort of investment back; they want a return.

HON. MR. CHABOT: Is that right, Gordon?

MR. GIBSON: Sure.

[Mr. Davidson in the chair.]

MR. LEA: Surely so; they want a return. What does a government that is elected to office have to give them? A-11 they have are the resources that they are supposed to be the guardians of on behalf of the people who elected them. That's why you see these deals, because a political party, once it reaches government, has nothing to pay these people back with except the resources of the people. It's all they have and that's what they do.

When you see big ads on television with these resource companies saying, "We back one party or we back another, " you know what they're up to, do not you, Mr. Member? Or are they doing it out of the goodness of their heart because they really believe in the democratic system?

When I was a minister I had a guy come into my office - this is a rather interesting story - from one of the bigger consulting firms in

[ Page 1460 ]

British Columbia. He came into my office and put a Bible on my desk. Then he told me about how good his company was, the kind of work that his company had done in the past and what they were capable of doing. At the end of the conversation the buzzer went and I had to go to a cabinet meeting. This consultant, the president of a consulting firm, said to me: "You know, Mr. Minister, with your party we have a bit of a problem. We don't know how to make campaign contributions to your party."

AN HON. MEMBER: He gave you a Bible, didn't he?

MR. LEA: I said: "You know, your problems are over, because if I take your money I owe you. And I don't want to owe you anything." He went away. Two weeks later I got a letter from him. He said: "I think 1 found a way to solve our problem. I've sent a cheque to your provincial office. Don't think there is anything funny about it, because I've sent cheques to all the other political parties."

Now why would a company send a cheque to every political party? Is it because they feel ideologically better toward one party than the other, or are they hedging their bets? I phoned our provincial office and said: "Send the cheque back." And we did.

HON. MR. CHABOT: Sure.

MR. LEA: Sure, I'm positive. Now what did you do?

HON. MR. CHABOT: I never got a cheque.

MR. LEA: Your party has.

HON. MR. CHABOT: Don't ask me what the party does. I don't know.

MR. LEA: Your party has received a great deal of money from resource companies in this province.

HON. MR. CHABOT: How do you know?

MR. LEA: Do you deny it?

HON. MR. CHABOT: I don't know.

MR. LEA: You don't know?

HON. MR. CHABOT: And neither do you.

MR. LEA: Who are getting these coal licences? The Gazette came out not long ago, on the 4th.

Interjection.

MR. LEA: No, this is a new list, this is a new Gazette. And who are these poor little British Columbia companies that are given these coal licences so that they, instead of the people's representatives, will say what the future holds for us? Here we are, and there is a whole long list of them: Canadian Superior Exploration Limited, McIntyre Mines, and Shell. Oh, Shell is again up here. Another one - Shell Canada again. Up here, Shell Canada again; down here, Quintette Coal; and down here Shell Canada again. Oh, just little people. On and on and on: Denison, Granby, Shell, Imperial Metals & Power, Utah Mines. All of them are in for the windfall profits that the future holds.

You know, not long ago British Petroleum bought some coal licences from a private firm in the northeastern part of the province, and they paid $30 million for them. Wouldn't it have been much better, Mr. Chairman, if the province had owned those licences and we could have given those licences to British Columbia Petroleum for maybe $1 million?

MR. LEA: Wouldn't it have been better if British Petroleum didn't have to pay out $30 million added expense to their startup costs because of the speculation that went on with those licences over the years?

HON. MR. CHABOT: How much exploration did they buy?

MR. LEA: They did probably as much as is required by legislation, which is almost next to nothing. That's what they did. And that's what happens with these licences. What happens is that they are traded back and forth speculatively with very little production going in. This government is very, very proud to get up and say that the workers in Canada and the workers in British Columbia are not productive, but they don't talk about the fact that capital can also be non-productive. We see that every day in subdivisions, as the member for Esquimalt (Mr. Kahl) knows.

You have a piece of land that may be worth $5,000 an acre. Okay, what happens to that piece of land to make it worth more? A surveyor goes in and he draws lines on a map. He does not do anything with the ground, just draws lines on a map and chops it up into smaller little pieces. Then the acre becomes worth 10 and 20 times what it was worth. That's all you have to do to make the money. There is no productive work that goes into that division. Yet the property then becomes

[ Page 1461 ]

worth a lot more.

Who pays for it? The consumer pays for it; the average person who wants to build a house pays for it. When British Petroleum Corporation pays $30 million for licences that the province could hold on to and sell at a more reasonable rate when the time demands that coal be explored and coal be produced, then it costs less to start that mine up and we are more competitive on the world market. If we're going to use it for home consumption here in Canada or in British Columbia, it means that we as British Columbian and Canadian consumers can buy it in a more economic manner.

Now 1 think it's pretty hard to argue against that kind of logic - that it makes no sense to, in an unproductive way and speculative way, increase those coal licences, because in the end somebody has to pay for it. That's what the Social Credit can't understand, Mr. Chairman - that in the end, if they allow these companies to get more and more money for those licences every time they turn over, when the company comes along that's finally going to put in a producing mine, it costs more money. Therefore it puts us in a different position in the world marketplace, the same as a raise in wages puts us in a different position in the world market.

You know, the world market doesn't care why the price is up. All it knows is that it's up and you are either competitive or you are not. To say that when wages put the price of a commodity up it affects us on the world market, but when profit and speculation put the price up it doesn't affect us is absolutely ludicrous. Anything that puts the end product that we produce on the world market at a higher price affects our position competitively in the world marketplace. How can anyone argue with that? The world market doesn't break it down and say: "Oh, that was wages, so I guess we can't buy it. But oh, no, that was prof it so we can afford it." All they know is the end price in the world marketplace, Mr. Chairman.

This government is bound and determined that before the NDP, or Liberal, or Conservative Party forms the government, they are going to pay back the political favours that they received to get into power. That's what the whole idea is, Mr. Chairman. Those companies are putting pressure on this government to pay up, and to pay up now, because they're afraid if they wait to get their payment they aren't going to get it. The Liberal leader (Mr. Gibson) says it's the greatest giveaway this province has ever known. We in this party agree.

It's the biggest giveaway under the coal licences, under that minister, under that government.

Those companies want to be paid now because they're afraid that if they wait there'll be a change of government and they will have put their investment into the Social Credit with no return on their investment. That's what it's all about. That minister and that government are selling out our heritage, our children's heritage and our grandchildren's heritage to keep themselves in political power by currying the favour of the multinational corporations who are willing with the government to rape this province of our future. That's what they're doing. And if that isn't what they're doing, then the minister should take his place and tell us what coal policy is in this province. Tell us what it is. Tell us why you have to give those licences away and why you have to do it now.

HON. MR. CHABOT: I've listened to that speech given by that member four times now in the last couple of weeks. I've listened to many hours of debate on coal and the thing that that member over there fails to understand and is unwilling to accept is the fact that there have been no new coal licences issued. There have been some applied for, but none have been issued. You're going on the false premise, my friend, that the licences have been issued.

MR. LEA: Oh, you're not going to issue them.

HON. MR. CHABOT: You're wrong there. I didn't say that. You're going on the premise... He bases his whole speech, his whole argument, his whole vision... His imagination runs away with him, Mr. Chairman, when he suggests that the Social Credit Party is anxious to give away these coal licences because maybe the NDP, or the Liberal Party, or - where is the Conservative tonight? - the Conservative Party might become government in British Columbia some day, and there's this anxiety to give these coal licences away. He says: "You have to give them away very quickly. But he fails to tell the full story that any arrangements or any issuances of coal licences by any government do not bind the actions of a future government. A future government can establish work requirements, can establish taxes, can establish fees and can establish royalties, and they know that full well.

I've never listened to more nonsense in all my life, Mr. Chairman, than I have listened to tonight from that member for the fourth time in the last two weeks. You know, 1 never thought that I would see a member of a socialist party stand in the House here and take the

[ Page 1462 ]

position of what they might call a multinational corporation - Fording Coal. He's standing here defending the position of Fording Coal. I never thought I'd see that. Lo and behold, Fording Coal doesn't want anymore competition in B.C. Does that member realize that?

Mr. Chairman, I'll tell you where the market is. We lost the market. We lost contracts when that NDP was government in British Columbia. When the steel industry was buoyant in the world and when there was an opportunity to sell metallurgical coal in this country, that fumble-bumble former government just couldn't produce. They fumbled their way out of viable contracts in order to sell more coal from British Columbia.

Now we find ourselves in a more difficult situation as far as far as the steel industry in the world is concerned. We find it difficult to market metallurgical coal. The coal companies of British Columbia and the prospective coal companies of British Columbia are knocking on doors around the world, not only in Japan but in other countries as well where steel industries are starting up, such as in Korea, Brazil and Mexico. One company, at least, has been successful in establishing some small new markets in various countries around the world. Kaiser Resources is probably the most aggressive coal-selling company in the world.

MR. LEA: But you hate them.

HON. MR. CHABOT: That member has a great way of twisting statements I make. I suggested that Kaiser Resources is a very aggressive coal-selling organization. And they are also very aggressive in attempting to hold the coal production in British Columbia for Kaiser Resources as well. We've seen that demonstrated by statements made by particular members in this chamber.

One has to realize it takes some time from when a coal licence is issued until a mine come into production. The licences in the Quintette and Sukunka region were issued about 10 years ago and those mines haven't come into production yet. They have been working frantically all around the world in an attempt to establish coal markets, and to explore, develop and identify the coal reserves they have and the quality of coal they have as well.

The member makes reference to a positive statement made. I thought I would have sent you a copy of the policy statements on coal. They were issued some time ago. Once the statement had been made by the Premier, I thought you would have inquired. I thought that your party would be interested in knowing what the new, vibrant ' active coal policy will be in British Columbia. But no, you don't appear to be interested. All you want to do is make speeches with lack of information. All you want to do is cloud up the issue and fuzz over the issue with lack of knowledge.

The press release which you made reference to was issued June 2,1977. 1 had certain policy statements regarding coal. Those policy statements indicated not that we were going to go into a bidding system in the disposal of coal lands but that we were going to examine the feasibility of going into coal land disposal by a bidding system. I'll read it to you:

"Coal rights disposal. It is expected that the present system of disposal, maintenance and control of coal rights in British Columbia will be changed to remove areas of ministerial discretion in the selection of prospective operators and in the issuance of leases. A new system is being considered..."

MR. MACDONALD: How many years are you going to consider it, Jim?

HON. MR. CHABOT: Consideration has come to an end.

"...incorporating a bidding mechanism whereby interested companies and individuals may secure the rights to explore for and develop coal resources through competitive tenders to the Crown."

We've gone through the process of consideration.

The member talks about work requirements. He says that the work requirements aren't sufficient as far as the development of the coal resource in British Columbia is concerned. He suggested that $3 a year was not enough - $3 in the first year, $4 in the second year and $5 in the third year per acre. In 1974 that same little party over there happened to be government and they established the work requirement. And now he has the audacity to stand in this House and criticize the work requirements that are contained in the Coal Act of British Columbia. How stupid can you be?

Mr. Chairman, I think this entire debate on coal is redundant and has been redundant for the last two weeks. I indicated during the question period in response to a question from the member for North Vancouver-Capilano (Mr. Gibson) that we were going to introduce amendments to the Coal Act in which we're going to make changes to the work requirement. If the NDP was not capable of imposing the right kind of work requirements on coal lands, we felt we should make these amendments for them and make

[ Page 1463 ]

them for the people of British Columbia to ensure that there is adequate work on the coal lands of the province.

So all I can say again, Mr. Chairman, is that the statements that have been made four times and about a half an hour each time by that member for Prince Rupert have been extremely redundant. I think the proper place to debate the matter of coal is when the changes will take place when the Coal Act amendments are proposed in this House.

MR. LEA: Mr. Chairman, it would be one thing if coal were the only licences that these people were going to hand out for speculation. But it isn't. It's also going on in terms of oil shale on the Queen Charlotte Islands. There was a company that had 10,000 acres and this government almost insisted that they take another 40,000 acres to speculate with. When we were in government, we took oil shale out of the Mineral Act and put it under the Petroleum and Natural Gas Act. Consequently we put a moratorium on the exploration of oil shale on the Queen Charlotte Islands.

Now what happened? The company at that time which had 10,000 acres was known as Skaist. The name has since been changed to Intercoast Resources Corporation.

Interjection.

MR. LEA: For a minister who was just stripped of his responsibility for coal, you're pretty uppity. This is the only minister I know who brought in a project of economic development in the province and the first thing it did was get two people laid off, just because they both happened to be in his office. He's the first man in the history of British Columbia to bring a project on stream and automatically get two people unemployed -Arthur Weeks and Art Cameron out of his office. He's sits there and brags about creating employment. He lost two people before he started.

Mr. Chairman, what is happening on the Queen Charlotte Islands in terms of oil shale is that this year Link of Calgary is going to spend $150,000 on exploration on 50,000 acres. Now I have talked to people who tell me: "Don't worry about the Queen Charlottes. We're not going to develop it anyway. Donot worry about it. You will be dead and in your grave before we get around to doing anything there. We just want the licences. We're going to spend a little bit of money each year, just the requirements, so that we can hold on to those licences and we can cash them in later. Don't worry about it."

The Minister of Forests (Hon. Mr. Waterland) knows what I'm talking about because it wasn't this present minister that almost forced 40,000 more acres on them; it was the present Minister of Forests who forced those oil shale licences onto them. He couldn't wait. What did he say? On January 10,1976, a letter went to the solicitors of Intercoast, re the Skaist Mines Ltd. application for oil shale permits.

"This is in response to your letter of December 2,1976, and our recent telephone conversation. The delay in the issue of the subject permit is no fault of Skaist. The ministerial solicitor has stated that we must have regulations to cover shale oil permits. Otherwise, such issue for oil shale only would not be possible within the terms of the Petroleum and Natural Gas Act.

"The Act is designed for exploration, development and production of conventional. means, and was not intended to cover oil shale.

"We are presently working on regulations which will enable the issue of permits to Skaist, with knowledge that Skaist is anxious that they are issued as soon as possible. We will endeavour to prepare the regulations with minimum delay.

What happened, Mr. Chairman, is that the government wrote to Skaist and told them that they were going to get their 10,000 acres back plus a further 40,000, before they even had the regulations drafted for the Petroleum and Natural Gas Act. Before they had had them drafted, and before they had had them passed by order-in-council, they were already writing to Skaist and telling them: "Take it all. Speculate all you want. We don't care." They even did that before they had the authority of their own executive council. Before they even had the authority to do it they were passing out favours, passing out licences so that there could be speculative profit made.

What I want the minister to tell this House is why the government - even before they had formulated regulations governing what those new regulations would be in terms of oil shale licences under the Petroleum and Natural Gas Act - wrote to Skaist and told them that they already had them? Under what terms, under what regulations were you empowered as a government to write to Skaist and tell them that they had their 10,000 acres back, plus another 40,000, and to go ahead before they had even passed regulations?

Would the minister care to tell the committee why, before there were even regulations governing the disposition of those licences, a company was told they had them? Mr. Chairman,

[ Page 1464 ]

I think before we go any further with this one, the minister should answer that: why did the government write to a company and tell them that they would have licences issued to them - go ahead, you've got 50,000 acres -before regulations on how it was going to be done had even been formulated or put in place by the government? I think that deserves some explanation.

Mr. Chairman, the minister has known for some time that I would be bringing this up in his estimates. He has known for some time. Answer the question.

HON. MR. CHABOT: I'll answer it.

MR. LEA: Okay, answer it.

HON. MR. CHABOT: In due course.

SOME HON. MEMBERS: Oh, oh!

MR. LEA: Mr. Chairman, they are hiding. That is what they are doing. That government issued licences without having the authority to issue licences.

HON. MR. CHABOT: Nonsense.

MR. LEA: If that is nonsense, Mr. Minister, you file in this House the first letter that went to Skaist after you formed the government, informing them that they had not only their 10,000 acres back but a further 40,000. Because that letter was sent before the letter that I just read out. They could hardly wait to get the seats warm in office before they sent that letter right after they were government. This letter tells them that it is no fault of Skaist. I mean, they had already written to Skaist by the time this letter cam into being and told them that they had the licences. But in this letter they explain that they don't even have regulations governing how those licences would be given.

The minister says "in due course." Due course is now. It is the minister's estimates, and I think the minister should stand up and tell us why the province, through 'the government, gave away 50,000 acres of licences for speculative purposes in oil shale before the government even had the authority to do it. I know it wasn't this minister it was the minister before him, the now Minister of Forests (Hon. Mr. Waterland) - who did it.

MR. GIBSON: He gives away coal farm licences!

MR. LEA: That minister said that minerals were renewable. That minister said: "Don't worry about it. Minerals and ore are renewable." But then, he learned that in university.

Mr. Chairman, I don't think that this is a matter to be shuffled off lightly by the minister, who says: "We'll get the answer in due course."

HON. MR. CHABOT: We'll let the member for North Vancouver-Capilano have his say. I'll find the answer.

MR. LEA: The Liberal leader will defer to the minister so the minister can answer the questions. Why did the government issue licences by a letter to Skaist prior to the regulations? Mr. Chairman, would that not allow a little room for speculation in the stock market? Don't you think that if you were Skaist and you had a letter from the ministry telling you that you were going to get 50,000 acres of licences - as soon as they could figure out how to do it and write regulations allowing it - there might be a little speculation in the stock market? Wouldn't that seem reasonable?

MR. NICOLSON: You wouldn't let that information out, surely.

MR. LEA: And wouldn't the Minister of Consumer and Corporate Affairs (Hon. Mr. Mair) responsible for that area be a little concerned that a department of government had written to Skaist, allowing Skaist or people in Skaist or people privy to that information some time to play with the stock market? I think the minister should table the complete file of all correspondence between government and Skaist, or Intercoast, as Skaist became, because I charge that that government gave it away with the pure fact of letting then make a lot of money.

(Mr. Rogers in the chair.]

HON. MR. CHABOT: Mr. Chairman, that member over there, again, is trying to confuse the members and the people who are in the Legislature tonight, because there have been no exploration permits issued to Skaist - none whatsoever, and you know it. I wrote you a letter, so you're all mixed up.

MR. LEA: No you didn't.

HON. MR. CHABOT: We have not issued any exploration permits to Skaist Mines Limited.

MR. CHAIRMAN: Just before recognizing the

[ Page 1465 ]

member for Prince Rupert, I should remind all members of the quote from Sir Erskine May about temperate language in the House.

MR. LEA: Mr. Chairman, the minister has put me in a position of having to read a report by Intercoast, known previously as Skaist, on its history.

"Incorporated in 1969 as Skaist Mines Limited, the name was changed to Intercoast Resources Corporation in March, 1977. For eight years Intercoast has been investing in resources-oriented assets, particularly their Queen Charlotte oil shale deposit, and the Alberta petroleum industry. The years 1977 to date have been significant."

I'm going to read excerpts from this, but I'll table it in the House.

"In 1974 Intercoast obtained an option to purchase 72 per cent interest in 10,000 acres -of oil shale claims on Graham Island, the largest and most northerly island of the Queen Charlotte group, located off the British Columbia coast about 500 air miles north of Vancouver. Plans to explore the shales were underway when in 1975 a newly elected provincial government amended the Petroleum and Natural Gas Act to include oil shale properties, and by so doing restricted any exploration until new regulations had been made. Intercoast filed a statement of claim against the government, which has now been settled out of court. The claims were reassigned and increased to 50,000 acres in favour of Intercoast. The necessary Class A permits have been received, allowing Intercoast to conduct geological and geophysical surveys as well as exploratory drilling. The 72 per cent interest has been increased to 94 per cent.

"In December, Link Oil and Gas was granted, as part of a larger oil and gas agreement described later, a six-month option to develop the oil shales whereby they must complete a $150,000 first-phase programme within one year from the exercise date."

That, Mr. Chairman, has been announced and will be carried out this summer.

Now the minister would try to lead us to believe that they aren't going in there, and that they have no right to go in there.

HON. MR. CHABOT: No, no. I'll tell you all about it.

Mr. Chairman, the confusion regarding the issuance of these exploration permits for exploration of oil shale on the Queen Charlottes - I believe it's on Graham Island -revolved around whether that particular mineral should be under the Petroleum and Natural Gas Act or under the Mineral Act.

In 1974 the former New Democratic Party government amended the Petroleum and Natural Gas Act to bring oil shale under that Act instead of under the Mineral Act. Well, we've clarified it that far. We've come to 1974. Now one of the reasons the former government was using for the non-issuing of exploration permits on the island was that they had to have additive regulations in place before they would issue these exploration permits.

The correspondence you refer to, if I'm not mistaken, has to do with the preparation of working regulations. So we move from 1974 to 1976, and we look at the amendment of the Petroleum and Natural Gas Art, 1976. Bill 25, section 6 (g) , says that the Mines Regulation Act takes charge as far as exploration of oil shale is concerned. So we have adequate regulations, and the permits were issued with that notation on them.

MR. LEA: What date?

HON. MR. CHABOT: I don't have the specific date. I'll probably get it for you a little later on.

AN HON. MEMBER: Ask your deputy.

HON. MR. CHABOT: It would be 1978.

MR. LEA: In 1978?

HON. MR. CHABOT: I would be inclined to say 1978, yes.

MR. LEA:.Why were they informed in 1976?

HON. MR. CHABOT:'They were probably informed that they were preparing some production regulations.

So at the moment the activity that they want to pursue regarding oil shale is exploration, and exploration is subject to the Mines Regulation Act. Section 11 of the Mines Regulation Act looks after the exploration activities of this company as far as oil shale is concerned. The ministry is still working on the establishment of production regulations, and those production regulations will be in place before production takes place as far as oil shale is concerned.

MR. LEA: They are there now.

AN HON MEMBER: They are not.

[ Page 1466 ]

MR. LEA: Mr. Chairman, what we have is a minister who has no policies whatsoever. The only policy the minister has and the government has is to do any darn thing they can to make sure those multinational corporations are happy, so that the campaign funds will keep rolling in and that, hopefully, through those campaign funds that coalition of opportunists can continue to be government.

That's all it's about. It's becoming more observable every day that there is no policy. I'll bet you that there isn't one government backbencher who could stand up in his or her place right now and tell us what the coal policy is that the government has. The minister can't tell us, the back bench can't tell us, no member of government can tell us, and the people of the province don't know. And yet applications are being received every day for new coal licences. The minister says: "Don't worry about it because they're not going to be granted."

HON. MR. CHABOT: I didn't say that.

MR. LEA: Oh, he did not say that.

AN HON. MEMBER: What did you say?

MR. LEA: Are they going to be granted, or aren't they going to be granted? The minister would have us believe that he met behind closed doors with the companies - alone, with no civil servants - and they talked about coal licences. He'd have us believe that it wasn't discussed how it was going to be done.

HON. MR. CHABOT: Not true!

MR. LEA: It is true. Mr. Chairman, that minister and that government are going to try, before the next election, to sell every bit of natural resource that we have. They're going to give it away - every bit of it, as much as they can - without letting the people think that maybe that's what they're doing.

But I think the people are a little wiser than they were when the old Socreds were in. I think that the young people coming along are a little wiser and I think that the people who were around during the old Social Credit government have learned a lesson also. I think there's no doubt that there were a great many people dissatisfied with us when we were government. That's why we were thrown out. But they thought that when the leader of the Social Credit Party and the political leaders of Social Credit said that they were a new party, that they were not like the old one, that they were going to be a new dynamic force in this province, they meant what were saying and meant to do what they were saying. They are looking now at a giveaway gang that makes the W.A.C. Bennett gang look like a Sunday School picnic. And the member for Skeena (Mr. Shelford) knows that's true. W.A.C. Bennett would never have given the resources of this province away like this gang. He would never have done it. And the Provincial Secretary (Hon. Mrs. McCarthy) knows he would not have done it, and the Provincial Secretary probably is ashamed of the very cabinet she sits in, because she has some close ties with the old government.

Mr. Chairman, every British Columbian should be ashamed of the government and are ashamed of the government that is bound and determined to sell our heritage for short-term political profit. And that's all that is going on.

In natural gas, in oil, in coal, in oil shale - you name it - they're willing to give it away. They don't even sell it at a proper price, they give it away. I'll tell you, you can't accuse the Liberal member (Mr. Gibson) of not being a free enterpriser, and he feels you're giving it away and giving the province away.

I cannot believe that the present Minister of Mines down deep, where he lives at night -because he sure seems pretty shallow during the daytime - does not have moments of turmoil. He must say: "Good God, what will I do to remain in political power?" I believe that that minister knows that what he is doing on behalf of that government is wrong.

The member for South Peace River, the Minister of Economic Development (Hon. Mr. Phillips) , I believe, knows that it's wrong. They are willing to do anything to- stay in power, and part of that doing anything is to give our natural resources away at the lowest possible price and sell out our future.

If we don't need coal, new coal, new licences for coal for another 20 years, why in goodness' name are we doing it now? Why are they accepting licences? Why are they going to issue those licences? The Minister of Mines can stand up and say that they aren't issued yet, that they're just applications, but we know they're going to be issued. What's he going to do - tack on an extra buck on the work that has to be done, tack on an extra buck for the rental?

Boy, I'll tell you, any British Columbian, to get a coal licence, would pay that kind of money to hang onto it for a few years and then sell it off at 100 or 1,000 times profit down the line in about 10 years. But most British Columbians don't have that kind of money. It's a very little amount to hold a coal licence,

[ Page 1467 ]

but in terms of the ordinary citizen, in terms of the ordinary small company in this province, it's a great deal of money. It isn't much for Shell; it is not much for Quintette.

HON. MR. PHILLIPS: Donot look at me.

MR. LEA: I know, you were stripped of your power. It is not much for Imperial Oil but it's a lot for a small company or an average British Columbian.

I'm telling you, Mr. Chairman, that this province is going to be sorry that that government ever assumed office; it's going to be darned sorry. I believe that there are going to be people like the member for Skeena (Mr. Shelford) leaving that party more and more. You've absolutely ruined that member's riding economically by your policies.

Interjection.

MR. LEA: Go up there now, with 30 per cent unemployment, the highest bankruptcy rate in the province, and it's the best place? Donot hand me that.

MR. SHELFORD: You don't know what you're talking about.

MR. LEA: I do not eh? I know what I'm talking about or you would be running again. You would be running again if I didn't know what I was talking about, and you know it. You couldn't get elected again and that's why you're not running again - not because of you, because of them.

Mr. Chairman, that minister and that government, I believe, are going to rue the day. What they think is a non-policy that will hold them in office is what's going to get them out. I believe that people in this province expect more from government. They expect a policy to be out front so people know what it's about. They are tired of secret deals behind closed doors with ministers and the private sector making secret deals to give the resources of this province away. I guarantee you, Mr. Chairman, that that minister and that government is going to go down the tube unless they start being a little more honest with the people in this province.

MR. GIBSON: Mr. Speaker, as I look around the galleries tonight and I observe the press gallery, I see the extent to which this debate is gripping the people of British Columbia and their representatives.

I'm particularly glad we're on the Mines estimates. I see the minister there in his Calgary suit covering his overburden. (Laughter.)

HON. MR. CHABOT: You must be colour-blind.

MR. CHAIRMAN: Does the overburden come with the administrative responsibilities?

MR. GIBSON: It comes under strip-mining. (Laughter.)

But, Mr. Chairman, we really do the people of this province something less than a service if we don't have a bit of a public debate on this question of coal policy.

HON. MR. CHABOT: Yes, under the Coal Act. Amendments are coming up.

MR. GIBSON: Well, the amendments may be coming up, Mr. Minister, but as you know, we're not allowed to discuss those in committee.

HON. MR. CHABOT: I'll allow full debate.

MR. GIBSON: Will you talk to the Chairman?

MR. CHAIRMAN: You may want to, hon. member, but the Chair does not want to and the Chair will not allow it. We're discussing the administrative responsibilities at this time, and other matters will be discussed at a future time in this chamber.

MR. GIBSON: You know, Mr. Chairman, I don't know if people in this province understand quite how important their mineral resources are. We've had a royal commission into forestry, as we should have had. The Minister of Forests (Hon. Mr. Waterland) has taken some action on that and we know it's our most important industry. But as the Premier said in his coal policy up in Nelson: "I believe the economy of this province will be significantly influenced by coal during the next decade, and that coal could eventually outrank the lumber industry in Employment, resource revenue and taxation." It is a very, very important subject, and I think it is incumbent upon this committee to take a bit of time in discussing it.

But I'm particularly glad we're onto Mines, even if we're a little out of the reverse order of the estimates, because it is urgent that we discuss this question. It's urgent on coal. It's been two and a half years since the new government took office; it's been - what? - one and a half years after it took office that they finally announced a new coal policy; and it's been a quarter of a year since they

[ Page 1468 ]

went flip-f lop on that coal policy and announced a new new coal policy.

HON. MR. CHABOT: We weren't that firm in June, 1977.

MR. GIBSON: The minister says across the floor of the House that they weren't that firm in June, 1977. He did a little bit of selective quotation out of the document called "British Columbia Coal Policy, " but he did not quote from the Premier's announcement which, I take it, is government policy and which, I take it, the minister advised the Premier on.

HON. MR. CHABOT: This was attached to the press release.

MR. GIBSON: I appreciate that, but let me quote what the Premier said. "The new policies are outlined in 11 statements, running from taxation to research and development. Key points in the policy are...." Then he goes through a number of key points, and he comes to this one: "A new system of granting licences to incorporate competitive tendering while not affecting the existing or planned development." There's nothing about "being considered" there. That's the new policy.

Now that might have been by accident. I suppose it's conceivable that the Premier might have just pulled that out of the air without any advice from the Minister of Mines. I can hardly believe that. This is a hardworking minister and I cannot think that he would allow his ministry to be pronounced upon in such a way without having his direct advice.

But later on in the year we get proof positive that the minister is indeed involved in this policy very deeply. I'm quoting now from the Victoria Times of October 4, and they are quoting the Minister of Mines, speaking in Edmonton to the 29th Canadian Conference on Coal. The following is in quotes and if the minister has been badly quoted, perhaps he will let me know:

"'We have developed a proposed system for disposal of coal rights which introduces a competitive bidding system for coal rights on selected Crown-owned coal lands, ' said Chabot. 'The system has evolved from joint coal industry and government discussions over the past several months.'

"Chabot said he hopes the new system will be implemented early next year, 'so that we can commence an orderly disposition of new permits, licences and leases."'

That was early October, 1977.

Then on February 10,1978, we get what I call a new new policy announced - a complete change-around which abandons the bidding system, which probably isn't a bad thing, in favour of a so-called priority system, a first come-first served system.

Mr. Chairman, I say that there has been a year of bungling and a year of time lost there, and I want to know why. I want to know what documents are available that justify the government's position and its changing position on coal policy over the last year. I want to know what convinced the government and the convinced the government and the coal committee - and this minister in particular - on the bidding system in June, 1977. That's question No. 1: What convinced the minister in June, 1977 that the bidding system was the right way to go? What were the arguments?

The second question is: What was the precise procedure that the minister has in mind in his statement of October, 1977, when he said a procedure had been developed? What exactly had been developed. And he said it was in consultation with the industry. What consultations had been held with the industry?

And finally the minister announced a totally new policy disposition in February, 1978, a switch right around. I want to ask the minister: What are the arguments that persuaded him in February, 1978 that the arguments that convinced him in June, 1977, were wrong? Would he answer those three simple questions? Why was your policy in June? What was your policy in October? Why was it changed in February?

HON. MR. CHABOT: Well, Mr. Chairman, in the month of June we were looking at the options, we were looking at the possibility of going from the priority way of allocating coal licences in British Columbia to a bidding system. In October we were still looking at the possibility of a competitive bid system and then in February, after further examinations of ways and means of coal land disposition, we found the competitive bidding system wanting. It wouldn't fulfill some of the objectives which the ministry had. Therefore we determined that it was in the best interest of the province in February, 1978, to continue the allocation of coal licences on the same basis that they have been issued in British Columbia since the coal industry was established.

MR. GIBSON: Well, Mr. Chairman, that doesn't tell us very much. The minister says that they were looking at this system in those two points in time, June and October, but that's not what the Premier's announcement said. The Premier's announcement said it had been

[ Page 1469 ]

adopted.

HON. MR. CHABOT: I'll read it to you again.

MR. GIBSON: No, I'll read it to you again, Mr. Minister, because you are reading from a different part of the text. I'm reading the Premier's announcement: "Key points in the policy are a new system of granting licences to incorporate competitive tendering while not affecting existing or current land development." That was the Premier's statement. There is no "considering" or "maybe" there. That was a key point.

The ministers statement to the coal conference in Edmonton was clear too. Why did he change around? He talks about the competitive bidding system they were looking for. Would he be more detailed in what he was looking for? Was he looking at cash-bonus bidding? Was he looking at work-commitment bidding? Was he looking at extra sliding-scale royalty bidding? Was he looking at profit-sharing bidding? Was he looking at reservations on a checkerboard pattern of various types of coal land?

Mr. Chairman, the options that are available to the Crown in the question of the disposition of coal land are so considerable that they are worthy, and the taxpayers of British Columbia deserve a policy statement that sets out all of the options and says what's good about them and what is bad about them.

We all know what is bad about the cash-bonus system of competitive bidding. This is the system that allows the big oil companies and the firms with all the money to come in and take it away. Unfortunately what has happened anyway in due course to the existing coal licences in British Columbia, as the minister is aware, is that a cash-bonus bidding system allows them to have that right off the top.

But is that the case with the profit-sharing bid system? Is that the case with the reservation of certain land, the checkerboard type of system? What are the pros and cons on this? When you are talking about blocks in square miles, Mr. Minister, it's something to be considered, but I'm not a mining engineer, like the Minister of Forests. I'm just a humble member of the opposition who is seeking information from the Minister of Mines as to what was considered.

What were the policy positions considered by his government? Why were some accepted at some times and rejected at other times? And why were change-arounds made a few months later?

Mr. Chairman, in the long range when you consider the hundreds and hundreds - perhaps billions - of dollars riding on this, I don't think it is too much to ask the minister just to give this committee a few minutes of his time to say: "Yes, these were the general policy thoughts that came forward from my department to the coal committee or to the cabinet as a whole, and here's what we thought about this one and that one and the other one. Here's why we initially thought that, and later an we understood our mistake and went to another system."

Could he be a little more forthcoming with us in his thought process? I know this minister well, Mr. Chairman, and I know that he has thought processes. He habitually hides them from the House, but I know they are there.

MR. CHAIRMAN: The line of attack you are on might almost be called a personal attack.

MR. GIBSON: Oh, no. It's an expression of confidence, Mr. Chairman. I know the minister takes it as that.

MR. CHAIRMAN: Well, parliamentary language is never more desirable than when a member is canvassing the opinions and the conduct of his opponents in debate. However, "personal allusions, " I believe, is what we would call it under page 429 of May, 19th edition.

MR. GIBSON: I would have called it, perhaps, an illusion. I don't know quite how you would spell it.

Interjection.

MR. GIBSON: I'll withdraw that remark about throughout processes, yes.

I would like the minister to tell us how he arrived at his conclusions on June 2,1977 -with which I would have to disagree if they were cash-bonus bidding, but he has never made that clear - and why he rejected them on February 10,1978. Can he please be a little more specific about that? This is the property of the people of British Columbia, and you only have their management in trust, Mr. Minister, and you are accountable to the people for that. I know that you want to explain your actions to them, and this is your chance.

Mr. Chairman, I was going to say that we were greeted with a conspiracy of silence, but how can one person conspire with himself? I think we are greeted with a policy of silence.

I want to give the minister a general description of the lands that are currently under exploration licence in the province. At the moment, as the minister knows, the producing lands are basically under Crown grant -

[ Page 1470 ]

some are leased - but there are approximately 940 square miles currently under licence. These are the figures from your department, December 31,1977, Mr. Minister. There may have been transfers since then. I'm certain there have been some transfers.

Brameda had about 40,000 acres; BP had almost 14,000. 1 would say that a lot of those Brameda. acres have since been transferred to BP, but I'm not sure. National Trust Company, as trustee, had 27,000 acres; McIntyre and Canadian Superior, 66,000; Belcourt Coal, 13,000 acres; Saxon Coal, 33,000; Quintette, 100,000; Cinnabar Peak Mines, 19,000; Utah Mines, 55,000; Master Exploration, 18,000; and so on and so on, for a total of 422,000 acres in the Peace River district. All of those are major coal companies.

In the eastern B.C. Kootenay district there are 24,000 for Sage Creek Coal; Crowsnest Pass, 43,000 - that, I assume, is what's recently been assigned to Shell, among others - CanPac Minerals, 24,000; Canada Permanent Trust as trustee, 19,000; Kaiser Resources 19,000; and some other small holdings for a district total of 127,000. There are smaller holdings in other parts of the province but the pattern everywhere is the same. Essentially well in excess of 90 per cent of the major coal holdings in our province has gone to the large companies.

Now what about the licensed lands that are under application? As the minister points out, no licences have been issued as yet. But I will give him the up-to-date list as calculated by my office of the applications, and that includes the latest gazetting of May 11, where Shell Canada added another 40 square miles and Sage Creek Coal added another 13 miles, to a total of 940 square miles. In other words, the licence applications published in the Gazette have now matched the total of all the coal land brought under exploration licence in this province up until 1972, plus the minor additions since then, largely in the- Hat Creek area for B.C. Hydro.

Mr. Chairman, this is pretty important. Of this 940 square miles currently being applied for, unfortunately only 124 square miles are in the hands of individuals, which is to say something like 13 or 14 per cent. I want to ask the minister what thoughts he has in his mind to some extent to work with the emerging concentration of British Columbia coal lands in the hands of the major energy companies, because the applications predominantly that are before him now or will be before him as soon as they filter through the process to his desk are from energy companies rather than from the traditional mining companies. I know the minister is aware of that. The so-called little guy, the person the priority system of bidding is supposed to protect over the cash bonus bidding system, is being squeezed out already to the tune of only 14 per cent. And as the minister will see from the list I read him of older licences, they have been squeezed out almost entirely by a system of purchases over that time.

Is that the way we want our coal industry in British Columbia to go? Perhaps it is; perhaps after debate that's the way it has to be. But I know the Minister of Forests, in looking at the resource under his control, after a good deal of debate has found ways for the smaller operator to have a piece of it. Perhaps in the coal industry it is inherently large operations. But it doesn't have to be inherently large exploration operations. Maybe it has to be large mining operations. I don't know. I'm not 100 per cent persuaded of that. I'm certain it doesn't have to be large foreign mining operations. But at least at this earlier stage, why can't we do better than 13 or 14 per cent for the ordinary British Columbia citizen?

Mr. Chairman, I appreciate that I am posing a difficult conundrum to the minister. I wish that I had an answer to it. I don't think, for example, the B.C. and Yukon Chamber of Mines has an answer to it. I don't know if his department has an answer to it. I ask it as a very sincere question. Given this pattern of holdings and of applications which are very rapidly going the direction of the existing holdings, what, thoughts does the minister have in mind to protect the position of British Columbians, and particularly smaller prospectors, smaller would-be operators, would-be developers, guys with an idea in the mining business, which is what this whole staking system is designed to preserve and encourage? What has he in mind to protect and enhance their position over the historical performance?

HON. MR. CHABOT: I will first point out, as did to the member for Prince Rupert regarding the coal rights disposal and the issuance of licences; that attached to that press release that was issued on June 2,1977, in Nelson were coal policy statements which maybe, in the condensation of the coal policy statements that were attached to that press release, were lost sight of.

MR. GIBSON: I just took the Premier's statement at face value, that's all.

HON. MR. CHABOT: That's right, but attached

[ Page 1471 ]

to it was the fact that the matter was being considered.

MR. GIBSON: Revisionists.

HON. MR. CHABOT: One of the things that concerns me is the right of the individual prospector, the small British Columbia exploration company with its opportunity to be able to acquire coal licences. That was one of the matters that was taken into consideration at the time we decided to go on a priority basis rather than a competitive bid system. The competitive bid system would have assured us that the small, independent prospector or small exploration company in British Columbia wouldn't have had a ghost of a chance to acquire coal lands in the competitive bid system.

When you talk about a small percentage of prospectors and small British Columbia companies that have applied for coal licences, you must be relating to acreage. I haven't worked it out in percentages, but there are quite a few individuals and quite a few small British Columbia companies who have made application for coal lands in various regions of the province. They're not the large, multinational oil companies, and I think they should be given the right of acquiring these lands for development.

I had an application last year, and they are virtually the only two licences issued, with the exception of rounding out some existing licences to facilitate exploration purposes. There were two licences issued in Telkwa last year. The reason they were issued to this individual in Telkwa was because they were required for the purpose of providing domestic coal in this province, and he received the only two new coal licences issued for some time. So some consideration has been given to the small operator in British Columbia.

(Mr. Davidson in the chair.]

One of the other considerations taken into consideration at the time the competitive bid proposal was rejected was that the cost of administration would be relatively high on the bidding system. There was no guarantee either that there would be the return to the Crown that some people imagined in the disposal by a bidding system. Until you know the quality and the quantity of coal, it's really difficult to determine what you are going to pay for that coal. The disposal by competitive bid would have created more uncertainty in the province than this way. There are fixed costs that will be clearly defined to a potential coal mine in the province, and there are fixed revenues to the Grown as well. So there won't be this wild fluctuation. I think that just about covers it.

MR. GIBSON: Mr. Chairman, one of the specific questions I asked the minister was when he was considering the bidding system....

HON. MR. CHABOT: We looked at all the alternatives, really.

MR. GIBSON: Did you look at alternatives beyond the so-called cash-bonus bid system?

HON. MR. CHABOT: Yes.

MR. GIBSON: You looked at bidding systems related to royalties, fixed and sliding, work commitments, bids as to profit sharing, - all of these things were examined? I would like to get the minister on the record on that question.

HON. MR. CHABOT: All those options that you've outlined were examined. I was just asking the deputy minister if the checkerboard proposal that you had outlined has been examined, and he said yes.

MR. GIBSON: Well, Mr. Chairman ' I'm very glad to hear that all of these various alternatives were looked at. Now what I would like, of course, is for the minister to put into the public domain the various arguments that he received on all of these alternatives and the pros and cons, in order that not just he and his officials and other members of the coal committee can assess this question, but so that British Columbia generally can assess it and so that people in the industry can have a look at it.

We get back to this old question of freedom of information. The minister will appreciate that he is - what would be the word? - the husbander, the shepherd of one of the Grown jewels of British Columbia in terms of our coal resources. There's a proposal here that there be disposed of in the next few months as much land under licence as has been disposed in history up to now.

It's important that this Legislature deal with the matter expeditiously and not stand in the way of that exploration because we must delineate that resource. One never knows in the use of any given resource whether a particular point in time will pass them by. So it's important that it be delineated as quickly as possible. We need the jobs that exploration will bring. It's very unfortunate

[ Page 1472 ]

that the bungling of the government's coal policy development has cost us two and a half years since they came into office already, and that the flip-flop has cost us about a year. But all that's said; all that's in the past.

Will the minister now, for the purposes of that public debate that is so important and that will unquestionably carry on up until the time that he brings in the legislation that he has promised, and which, of course, we can't discuss in this committee, undertake to make public a precis of the pros and cons of the various systems that have been brought to his attention? As the minister knows, I'm sure, there's a great deal of academic work being done on this subject which doesn't mean it's right or wrong. Practical knowledge must be brought to bear on these things as well.

But there is a lot of work that has been done. It would be much easier to judge the government's policy on this enormous resource disposition in the light of what is known in other jurisdictions. If the minister could be kind enough to make available to the public the benefits of the advice that he has received.... I'm not asking him to give away such confidential things as what a specific civil servant or a specific company advised on a specific policy. I just would like him to give this House and the people of British Columbia just in a few pages - you don't have to make it too complicated, Mr. Minister - a list of pros and cons: here's what we considered, here's what we liked, here were the problem we say and that's why we finally came to this conclusion. Could you publish that kind of document some time before you bring in your bill, whatever it is? Could you give us that commitment?

HON. MR. CHABOT: 1 will take that into consideration, Mr. Member. I would like to respond to one of the statements made regarding the....

MR. GIBSON: Well, will you do it?

HON. MR. CHABOT: I told you I would take it into consideration.

MR. GIBSON: I know, but that's what this policy said and then you said consideration doesn't mean anything.

HON. MR. CHABOT: I said to you that in the coal policy the matter was under consideration. The matter has been taken into consideration and rejected and found wanting.

MR. GIBSON: Is that what you're going to do with this? I want a guarantee.

HON. MR. CHABOT: I will take it into consideration.

MR. GIBSON: Mr. Chairman, I don't think I am asking too much. I would just like the minister not to say he would consider this kind of thing; I would like him to say that he will provide this kind of thing. It's not unusual, you know, Mr. Chairman. The standing orders of some of the great parliaments of the world -of our mother parliament, Westminster; even of the Legislature of Ontario - provide that when an important piece of legislation is brought in, a policy paper is brought in with it. I think that this would be a great contribution this minister could make not only to resource management but to our democratic process in this province. If he would be good enough to bring in a policy paper at the time of that piece of legislation, it could be of inestimable value and it could be very helpful for him politically, too, I might say, because people aren't going to understand his coal policy unless he comes forward with those kinds of things. I think that's terribly important.

HON. MR. CHABOT: You've confused them. Maybe I'll set the record straight now.

MR. GIBSON: Mr. Chairman, the people aren't confused. They're pretty smart. When the people see that there's as much coal land about to be disposed of now as in the history of this province, they say that's fairly important and they want to talk about it. So we're talking about it. I and the people are going to insist that the minister bring in those kinds of pros and cons. I think the minister will react to that, because he's a skilled politician and has existed over the years shuttling back and forth between Calgary buying his suits. He has existed over the years and gotten votes by straddling the fence with both ears to the ground - it was the hon. member for North Okanagan (Mrs. Jordan) , I think, who coined that phrase. I would hope that he would do that here.

I would like him to say one other thing in this committee. It may even be out of order but I will just put it in one sentence. Will he give the people of British Columbia a forecast on when his bill or bills are coining in so that people can plan for the summer? This is important, I think.

HON. MR. CHABOT: Mr. Chairman, all I can do is repeat that I will take the matter under

[ Page 1473 ]

consideration. Hopefully time will allow, I don't know. I'm a pretty busy man. As far as the other bill is concerned, I hope it will be introduced tonight but I don't expect it to be.

MR. LEA: Mr. Chairman, I have in my hand the first report of the Coal Task Force. I know that the minister has in his hands, or in his office, stage B - the next report done by the Coal Task Force. I wonder if the minister could let us know when that report is going to be made public. Will the minister let us know when that report will be made public?

Also, I notice in the minister's office vote that travel expenses are down for this coming year. I wonder why that is - or did the minister know that?

HON. MR. CHABOT: My travel expenses?

MR. LEA: Your travel expenses for your office are down in real dollars, not even taking into consideration the inflationary factor.

HON. MR. CHABOT: I don't need as much money.

MR. LEA: Would the minister explain why his travel expenses are down this coming year? Is he not intending to go out in the field? Is he not intending to travel around the province? If so, what vote is it coming out of ? Is he not intending to do, obviously, as much traveling as he did -last year from the minister's office? Why is that?

But the first question is: when are we going to see the next stage of the Coal Task Force report? I believe it's called stage B or part 2. Whatever they want to label it, I know that it's done. I know that it's in government's hands. When are we going to get that report? The people have paid for it. When are they going to get it? I see that the minister is discussing that with his deputy at the moment and getting direction as to when he can release it.

HON. MR. CHABOT: The only answer I can give you, Mr. Member, is the reason it hasn't been released to the public is because it hasn't been finalized and it hasn't been put together. I don't know whether we ran out of printing and binding money or what, but it hasn't been put together. If you feel that it's important that it be put together, I can attempt to do so and make it available to you.

MR. LEA: Mr. Chairman, can the minister give us any time estimate as to when he thinks he can ? Maybe he could take a few dollars out of his travel budget and buy [illegible] binding.

HON. MR. CHABOT: I've just been cut down on that.

MR. LEA: Probably the Premier cut him down. He doesn't want him going around the province exposing himself. But, Mr. Chairman, obviously the work has been done. The task force has done its work. All the material is there. The minister says it hasn't been put together yet. What does he mean - that it hasn't been put in a fancy booklet like this? Surely it must be together. How long will it be before the minister can file that report with the people of British Columbia?

HON. MR. CHABOT: Yes, Mr. Chairman, we can put it together. It will take a few months to do so, but it will be in late summer.

MR. LEA: Why would it take that long? If you've got all the information now and it's just a matter of putting it together into a report like this, why ... ? You've got all the information now, haven't you, Mr. Minister? They've made the report; it's just that you don't have it printed in quantity for distribution. Is that true?

HON. MR. CHABOT: No, it's not finalized.

MR. LEA: What does the minister mean by "not finalized"?

AN HON. MEMBER: He means not finished.

MR. LEA: No, it is finished. What does the minister mean when he says it's not finalized? At what stage, precisely, is it now? Has the task force submitted their report to the minister?

HON. MR. CHABOT: No, the task force never did submit its final report to the minister.

MR. LEA: It hasn't? Has the minister asked the task force to submit the report, and if so, by a certain date?

HON. MR. CHABOT: One of the problems, Mr. Chairman, is the fact that the task force was disbanded early in 1976.

MR. LEA: I know that. But I'm wondering .... As a matter of fact, we know that they submitted a report to government on part 2 or stage B of the report. As the minister has now said, it was in 1976. This is now 1978. Is the

[ Page 1474 ]

minister and his government that inefficient that they can't put it together for the people in that amount of time, or is the minister hiding the report? What does the report show, Mr. Chairman? Does the report show that there should be a coal policy heading in a certain direction in this province, and that the government doesn't want to take the recommendations of that task force report? Do they want to hide it?

We have to reach some obvious conclusions. We know the government has the report and it's not being made public. We know that the government is waffling on a coal policy; they're waffling all over the place. Is it because they're afraid they're going to come out with a coal policy which will be contradicted by the task force? Is that what they're afraid of?

Would the minister tell us why - it has been 1976 since they had the report - why has it taken so long to put that report together and bound, so that members of the Legislature and the people of the province can see what the task force had to say in the next stage of their findings? Why is it taking that long?

MR. LOCKSTEAD: Just very briefly, I did take exception to some of the statements of the opening remarks of the Minister of Mines and Petroleum Resources when he indicated that the staking of mineral claims indicates the health of the mining industry in the province. The regulations on that were changed. What actually happens now is that it allows the huge multinational mining corporations to hold literally hundreds and hundreds of claims, and it deprives other people and other companies of exploring in those areas. It inhibits free enterprise, which that minister tells me he's for. It gives these large companies a monopoly. The fact is that we know very well that most of the ore mined in Canada is found in one or two mineral claims in the final analysis.

I'd like to remind the minister as well, through you, Mr. Chairman, that the Afton project was an NDP project, not a Social Credit project.

HON. MR. CHABOT: On a point of order, that's a Teck Corporation project.

MR. LOCKSTEAD: That is a project initiated by the New Democratic Party when they were in office. But in any event, this minister went through a list of mines that closed because of lack of ore. And do you know what that minister used to say when he was over here in opposition? "NDP policies were the main reason for the mine closures in British Columbia." He knew that was a lot of nonsense at the time. And now what's he saying? What is this minister saying now? "It's world economic conditions, the world price of metal, " et cetera, et cetera. But I'll tell you what the problem is, Mr. Chairman. The problem is that Minister of Mines. More mines have closed in British Columbia since that Minister of Mines and Petroleum Resources assumed office than at any other time in the history of this province.

The minister says in the B.C. Mining Industry News, what a sad chore it is to announce a mine closure, but he can't do anything to prevent these closures. Nonsense, Mr. Chairman. Sad chore. Well, that minister has had a lot of sad chores in the last little while.

I just would like to discuss for one moment the proposed uranium mine at Clearwater, which I have a great deal of information on here. I don't wish to delve into all of this material and take up the time of this House. However, there was quite a protest rally up in Clearwater some time ago - in January of this year, I believe - and I would like to ask the minister what the ministry's position is in terms of the proposed uranium mine at Clearwater. I can tell you that I have before me a great deal of information which indicates that the proposal could be very harmful to the residents in the area in terms of health. And I think it's worthwhile quoting Mr. Mario De Bastiani, who has spent some $500,000 in the past two years planning an open-pit uranium mine in central British Columbia and who says he won't be stopped by a few professional protestors. Mr. De Bastiani is vice-president of technical operations for the Toronto-based Denison Mines Limited, major shareholder in Consolidated Rexspar Minerals & Chemicals Limited.

Mr. Chairman, the B.C. Medical Association sent to all the members of this House a brief outlining and protesting strongly the proposed operation of this mine. And I'd just like to quote one section of this brief, signed by Robert F.Woollard, ND, for the British Columbia Medical Association:

"The historical record of traditions in uranium mines clearly reveals that the current arrangement of undelegated federal jurisdiction and invoked provincial regulations is unsatisfactory. The potential for harm in our current unsatisfactory condition is of great concern to the BCMA." Mr. Chairman, I would hope that the minister would comment on that mine proposal.

Last but not least, I was wondering if the minister would be good enough to comment on

[ Page 1475 ]

the $90,000 natural gas pipeline study that the Minister of Energy indicated will be taking place in British Columbia shortly. I would like to ask the minister about security of supply. Should the study indicate the feasibility of the line, do we have enough natural gas to supply Vancouver Island, for example, for the next 30 or 40 years? Are those figures available to the minister as Minister of Petroleum Resources?

HON. MR. CHABOT: Mr. Chairman, based on the requirements for meeting the domestic market for natural gas on the mainland of British Columbia, along with the export contract to the Pacific Northwest, I would say at this time there isn't sufficient gas to look after the needs of Vancouver Island. But as I indicated a little earlier in the evening, our reserves escalated greater than our production this year. So we are building up a substantial block of reserves of natural gas in British Columbia and with the ongoing active exploration programme, in the not too distant future - and I'm talking about two or three years - I think we will have ample reserves of natural gas to look after the needs of all of British Columbia including Vancouver Island. Any pipe line study that is underway or is anticipated to be underway is justified because I think that it's important that we look after the requirements of British Columbia first. That includes Vancouver Island.

MR. LAUK: Mr. Minister, I don't know who you have sitting beside you, through you, Mr. Chairman. I thought I'd put all my files in the UBC archives.

HON. MR. CHABOT: You did. These are current ones. These are from January 1,1977.

MR. LAUK: Mr. Chairman, I think it should be pointed out that what we need in this province are jobs! I'd like to say to my friends, and you are my friends, that we in Columbia River are doing our very best to provide jobs!

It is very difficult for me, Mr. Chairman, to get serious during the minister's estimates because he obviously doesn't take it very seriously himself. But I would like to point out, and set the record straight, that the tremendous project going on in Afton was solely because of the ingenuity and the foresight of the New Democratic Party of British

Columbia. Apart from the misstatements, inadvertent as they may be, Mr. Chairman, by the minister of consumption and corporeal affairs, or the Minister of Mines, the fact remains that the only copper smelter since 1896 or thereabouts was conceived with the complete co-operation of a visionary government and Teck Corporation. For this government to take credit for that is a desperate move by the current minister of mine closures, who is desperately trying to protect his very, very shabby record of the past few months since he has been minister.

For that reason, I'm going to sit down.

Vote 171 approved.

On vote 172: deputy minister's office, $1,145, 667.

MR. LEA: I wonder if the minister could tell us whether Mr. Gordon Bell is still a consultant to the government in some capacity.

HON. MR. CHABOT: The answer is no.

MR. LEA: Could the minister tell us what happened to Mr. Bell?

MR. CHAIRMAN: The minister cannot reply while the member is on his feet. Perhaps the member would like to sit down.

HON. MR. CHABOT: Mr. Chairman, he was on contract and there was no longer any need for his services; the workload came down.

MR. LEA: Mr. Chairman, under vote 172 subsection 60 - rentals and outside suppliers: in the previous year, no money whatsoever; this year, $19,800. 1 wonder if the minister could tell us why.

MR. CHAIRMAN: It's subsection 60, is it?

MR. LEA: Yes. Also, why, with his travel expenses having been cut down, is subsection 10 - travel expenses - increased by almost 40 per cent? And also, why has advertising and publications gone from $1,500 to $98,500?

HON. R. CHABOT: Mr. Chairman, those are transfers from other votes, from the middle resource branch into the deputy minister's office. And the other - rentals and outside suppliers - is some expenses that were previously assumed by the Ministry of Energy, Transport and Communications and have been passed on to my ministry. That's why it's included here.

MR. LEA: Also, Mr. Chairman, I notice that motor vehicles is going from $112,500 down to $100,000. 1 wonder if the minister could tell us why that's down.

[ Page 1476 ]

HON. MR. CHABOT: It would appear that we need fewer vehicles this year, and with the cost of vehicles, that would be approximately one vehicle less that we would need this year - many of the vehicles in the ministry are 4 X 4s.

MR. LEA: You would suppose that you need one vehicle less. Is that it? Or do you know?

HON. MR. CHABOT: Yes, that's right. We need one less.

Vote 172 approved.

on vote 173: mineral resources branch, $4,392, 165.

MR. LEA: Mr. Chairman, I don't know whether the economics and planning division is going from a staff of 14 down to 11. 1 wonder why at this particular time the minister feels it is necessary to cut staff in the economics and planning division. Also there's a cut in staff from 50 to 38 in the titles division, and in the inspection and engineering division a cut in staff from 63 to 60. If the minister is serious in talking about a better economic and planning and all of the extra work that is going to come in handling these applications for licences in coal, why the cut in staff? What's happening there?

HON. MR. CHABOT: Mr. Chairman, we've introduced efficiencies into the titles division. There's been a shift of some of the staff into the deputy minister's vote from the mineral resources branch. That accounts for the bulk of the changes that you have brought to my attention.

MR. LEA: Do you mean that there is no cut in staff?

HON. MR. CHABOT: No. I didn't say that. In the mineral resources branch there is.

MR. LEA: And in the economics and planning division there's a cut by three. Even if they have been transferred somewhere else, I wonder if the minister would explain why he found it necessary to cut economics and planning by three positions.

MR. LAUK: Movement gives the appearance of progress.

HON. MR. CHABOT: Mr. Chairman, these are vacancies that were never filled. They've just been eliminated because they haven't been deemed required.

Vote 173 approved.

Vote 174: petroleum resources branch, $1,400, 434 - approved.

on vote 175: grants and subsidies programme, $585,250.

MR. LEA: I notice under the Chamber of Mines and Mines Safety Association that there's been an increase from $54,000 to $85,250, which is an almost 60 per cent increase in the grant. I wonder if the minister could tell us why there's almost a 60 per cent increase in that grant, especially in light of the fact that they're cutting staff members in economics and planning.

HON. MR. CHABOT: Mr. Chairman, there has been more activity as far as mine rescue and safety is concerned in the province, more competitions, and the costs have gone up. There have been requests by these associations throughout the province for additional funding. Because of the difficulties they've experienced with the previous grants we've offered them and on the basis of their requests and on the basis of additional functions throughout the province, we've increased the grants to these mine rescue competitions. We will be giving a grant to the mine reclamation symposium, the Chamber of Mines of Southern B.C., and the B.C. and Yukon Chamber of Mines also will receive a small grant, which has been increased this year from last year's $10,500 to $14,000.

MR. LAUK: On vote 175, Mr. Chairman, I notice that last year there was no estimate for the cost by virtue of the promulgation of the Copper Smelting and Refining Incentive Act. But this year it's $500,000. 1 wonder if the minister can state where this $500,000 comes from in terms of revenue. You see, the NDP administration had a 5 per cent royalty and now this $500,000 giveaway to Afton Mines appears in the minister's estimates and there's no revenue coming in.

HON. MR. CHABOT: Oh, yes, there is.

MR. LAUK: Where is the revenue? I mean the revenue that was not just the ordinary corporation tax and so on, the Mining Tax Act. Talk about that 5 per cent royalty that's disappeared, that you eliminated in a callous, back-of-the-hand, jackboot fashion. Where is that $500,000 coming from?

[ Page 1477 ]

HON. MR. CHABOT: Mr. Chairman, that revenue could come from a great variety of sources, but it comes from general revenue. I presume that probably the major part of that contribution would come from the tremendous wealth that we've developed through our exploration programme and our encouragement of the exploration of the petroleum resource in this province, which has returned to the province, because of the dynamic policies of this government, almost $200 million more than any year before.

MR. LEA: I'm not going to argue with extra money for mine safety and training programmes and seminars and that sort of thing. I just wonder if the minister could explain to us why he could get money from the Treasury Board for this very worthy cause when the Provincial Secretary (Hon. Mrs. McCarthy) couldn't get an increase for other worthwhile causes. What was it that you had going to that Treasury Board where you could get money while the Provincial Secretary couldn't?

HON. MR. CHABOT: The power of persuasion. (Laughter.)

Vote 175 approved.

On vote 176: mineral road programme, $900,000.

MR. LEA: I wonder if the minister could explain to the House why the Ministry of Highways.... There were public hearings; there were reports. I think the Minister of Environment would be interested in this: the Gerrard River in the Kootenays. There is an old Highways bridge there, and a report came in saying that the bridge should not be there, that it should be moved to the east and go along the side of the lake. That was accepted, I think, by our government and by your government. Now I wonder why the Ministry of Mines has gone in with a bulldozer and pushed a road through two miles south of the Gerrard River existing Highways bridge.

Could the Minister of Mines explain to the House why the Ministry of Mines would allow and pay for this kind of a road to go through when the Minister of the Environment and the Minister of Highways and every other ministry in government is worried and has stopped the thing?

HON. MR. CHABOT: Is the member for Prince Rupert (Mr. Lea) referring to the area around Healy Creek?

MR. LEA: No, I'm referring to two miles from the existing Highways bridge over the Gerrard River. It's in the Kootenays, in Revelstoke Slocan, British Columbia. Maybe if the minister hadn't had his travel expenses cut by the Premier and the Treasury Board, he could take a trip up there.

HON. MR. CHABOT: Mr. Chairman, I don't use helicopters. That's why my expenses are a little bit lower. There are other people who use helicopters and had to have a pretty big expense account.

As far as my ministry getting directly involved in that road under this road upgrading allocation here, I would say no, we weren't involved.

We're not even aware that we have contributed towards the mining road - that is, the half-cost sharing of mining roads. We'd be glad to check into it and report back to you.

MR. LEA: Under vote 176 it says: "A continuing programme of constructing and maintaining exploration access roads to areas of high mineral and petroleum production potential." I wonder if the minister could tell us of one road that the Ministry of Mines is spending money on this year that is of high mineral and petroleum production potential. In other words, is the department spending any money on any road that will bring any mine into production in the next two years or in the next three years? Can the minister tell us of any money being spent by the Ministry of Mines on any road where there's going to be a producing mine in the next three years?

HON. MR. CHABOT: Well, that's very difficult to say, because these roads are basically to establish access into areas of high mineral potential, and it facilitates exploration which, down the road, causes production in many instances, and that's the purpose of this allocation - to facilitate exploration. I can't say whether any of this money is going to result in a mine being opened this year. I can't answer that.

MR. LEA: From the minister's answer I would assume that most of this money is going to be spent so the public can attend mine closures. Is the money going to be spent so the public can attend mine closures? Because I don't know of any road the Ministry of Mines is spending money on that has a high potential and that will be producing in this province in the next three to five years, and the minister obviously doesn't either.

[ Page 1478 ]

MR. LAUK: I wish to stand in my place and defend the minister, and dispel the rumours that are traveling across this province that the entire portion of vote 176 - $900,000 for mineral road programmes - has been expended on the main road in Golden, British Columbia. It's entirely a very bad rumour.

But I do have one question. I was sued when I was Minister of Mines and Petroleum Resources by a fellow who wanted us to build a road to a jade mine on the top of a mountain.

HON. MR. CHABOT: That's before the courts.

MR. LAUK: Is it still before the courts? Oh, I thought you had settled it for me. I'll deal with that later then.

Vote 176 approved.

On vote 177: prospectors' assistance programme, $215,000.

MR. LEA: Under vote 177, 1 wonder if the minister could supply to the House - under subsection 80, grants, contributions and subsidies - a breakdown on whether this money has been spent on individual prospectors as opposed to professional consulting firms or geological consultants, incorporated or not. I wonder if the minister could give the House his word that before the end of this session there would be a breakdown on vote 177 as to where that money under subsection 80 is going.

HON. MR. CHABOT: Mr. Chairman, last year in the same kind of allocation we assisted 125 prospectors. It has been restricted to 15 per cent geologists.

MR. LEA: Professional consulting firms - 15 per cent?

HON. MR. CHABOT: Yes, to individual geologists.

MR. LEA: You'll give a breakdown before the session is over, eh?

HON. MR. CHABOT: Oh, sure. No problem.

Vote 177 approved.

Vote 178: mineral research programme, $77,000 - approved.

Vote 179: mineral data programme, $155,000 -approved.

Vote 180: mineral employment programme, $60,000 - approved.

Vote 181: energy resource evaluation programme, $351,300 - approved.

Vote 182: building occupancy charges, $772,436 - approved.

Vote 183: computer and consulting charges, $315,100 - approved.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Gardom moves adjourned of the House.

Motion approved.

The House adjourned at 11 p.m.