[ Page 1707 ]

CONTENTS

Routine proceedings

Provincial Home-owner Grant Amendment Act, 1978 (Bill 15) Second reading.

Hon. Mr. Curtis –– 1707

Mr. Barber –– 1708

Mr. Skelly –– 1708

Mr. Cocke –– 1708

Mr. Smith –– 1708

Mr. Gibson –– 1709

Mrs. Dailly –– 1709

Mr. Rogers –– 1710

Hon. Mr. McGeer –– 1710

Mr. Nicolson –– 1711

Hon. Mr. Curtis –– 1712

British Columbia Hydro and Power Authority (1964) Amendment Act, 1978. Second reading.

Hon. Mr. Wolfe –– 1713

Mr. Skelly –– 1714

Mr. King –– 1721

Mr. Cocke –– 1724

Mr. Mussallem –– 1726

Mr. Nicolson –– 1730

The House met at 10 a.m.

Prayers.

HON. MR. WATERLAND: Mr. Speaker, in the gallery today is a gentleman who spent many years within the Forest Service in the service of the province of British Columbia, the former Deputy Minister of Forests and former member of the forest policy advisory committee. I would ask the House to welcome John Stokes.

MR. BARNES: With us this morning are some students from Admiral Seymour Elementary School in Vancouver with their teacher, Mr. Dean. I introduced them yesterday as I thought they were coming yesterday, and I find they're here this morning. They're waiting out front. I'm going out to have a few words with them and I'd like the House to make them welcome.

Orders of the day.

HON. MR. GARDOM: Mr. Speaker, I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Mr. Speaker, I call second reading of Bill 15, the Provincial Home-owner Grant Amendment Act, 1978.

PROVINCIAL HOME-OWNER GRANT

AMENDMENT ACT, 1978

HON. MR. CURTIS: Mr. Speaker, I'm happy to speak on behalf of Bill 15, the Provincial Home-owner Grant Amendment Act, 1978, and I consider it to be a commendable piece of legislation. Not only does Bill 15 represent another forward step in this government's commitment to continue to reduce the burden of education taxes for the property owner, but it also corrects - and I feel most pleased about this part - a source of complaints about time limits on claims of the grant.

First, Mr. Speaker, under this legislation the maximum supplementary grant available to senior citizens and certain veterans' allowance and handicapped pension recipients will increase from $150 to $200. The basic grant for all property owners remains at a maximum of $280, but recipients eligible for the supplementary grant may now be entitled to as much as $480. And that is an important assistance for a deserving group of taxpayers whose needs, we know on both sides of this House, are especially pressing. It demonstrates the particular ability of the homeowner grant mechanism to direct extra benefits to selected categories of recipients. I trust that there will be the wholehearted support of the House on this aspect of the measure.

Mr. Speaker, the introduction of a late claims period is, as I indicated a moment ago, extremely important. Too often governments tend to, for their own convenience perhaps, introduce deadlines of one kind or another. When you step back and examine the rationale for the deadline, you find that there is very little rationale indeed.

Every year a number of eligible taxpayers neglect to claim their homeowner grants, whether through illness, family difficulties, carelessness, or misunderstanding. Now the number is not large, Mr. Speaker, but it is large enough that we seek through this amending legislation to ease their situation. The members will know that under the existing rules the right to claim a grant expires at the end of each calendar year. Earlier it was the end of the government's fiscal year, March 31, but it was still a deadline. The obligation to pay due taxes naturally continues well beyond that deadline. So we propose today to take the sting out of that anomaly by allowing taxpayers one extra calendar year in which to claim their grants.

Now, sir, in order to relieve municipalities of the administrative burdens associated with late claims, this Bill 15 identifies a provincial administrative procedure, and we believe that it is the best route Lo follow. Any applicant who has not received a grant in a particular year and who possesses the appropriate qualifications, may submit a simple written claim to the provincial government during the following - the subsequent - calendar year. If the applicant's claim is accepted, a provincial cheque will be issued. Where the applicant has no outstanding real property taxes - in other words, all the taxes have been paid in the gross amount - then the cheque will be sent directly to that applicant. But where the applicant has outstanding taxes, the cheque will be sent to the municipality, which will then be responsible for deducting the amounts due to it and forwarding the net grant, if any, to the applicant.

The homeowner grant is a major social programme which this year will distribute $171 million in British Columbia. The improvements provided in Bill 15 have made the programme even more generous and flexible, and it is the flexibility which certainly appeals to me in this respect. On that basis, I am pleased to move second reading.

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MR. BARBER: On behalf of the official opposition I should like to advise the government that we entirely support this bill. We think it a long-overdue and welcome change and wish it speedy passage.

MR. SKELLY: On behalf of at least one member of the opposition, Mr. Speaker, I would like to express some regret. I brought this matter to the attention of the Minister of Human Resources (Hon. Mr. Vander Zalm) in relation to a part of the principle of this bill. Certain categories of people who are in need are left out of the $200 extra benefit given to people under the War Veterans Allowance Act and the Handicapped Persons Income Assistance Act, and that is the people who apply for handicap benefits between the ages of 60 and 64. 1 have been in touch with your deputy and with the Ministry of Housing requesting that these people be given some consideration for the additional $200 homeowner grant benefit.

The reason given by the Ministry of Human Resources for not including them is that those people between the ages of 60 and 64 are considered handicapped because of age. But in spite of that, they are handicapped, and should be entitled to some consideration under the homeowner grant Act. In the National Council of Welfare report that was recently done, it was stated that a lot of money that goes to people in low income areas, or is designed to go to people, is misallocated. It should be done rather on the basis of a flat grant to everybody who has a home and who pays homeowner taxes. It should be done through the federal income tax on a progressive tax credit basis and should be an income-based grant, so that the people whom this homeowner grant is really designed to serve should derive the maximum benefit.

So on behalf of at least one member of the opposition, I would like to say that I'm not entirely satisfied with this particular section of the Act. I do wish to congratulate the minister for extending the time for application, because a lot of people have problems -just the general problems that citizens as a whole have in interpreting legislation, reading the back of their tax forms and this type of thing. So I think it's good that more discretion has been granted to your department and to municipal governments in allowing the extension of that late period.

MR. COCKE: First let me say I agree with the member for Victoria who indicated we will support the bill. There are some areas that we are very pleased with, particularly the extension and also the increase for those in the senior-citizen category. However, this government has spent some time - as a matter of fact, two and a half years - dumping their obligations on the local taxpayer. I want to tell you that: they have increased the cost to the local taxpayer to the tune of 78 per cent. I don't think they should come out of this unscathed in that regard. It strikes me that what we expected from this bill would be something to assuage that particular area and something to recompense those people for the extra burden they have accepted on behalf of this bungling government.

In times gone by, the old Socreds used to use that as their pap for the local taxpayer saying: "Look, we have taken it away from you with this hand but we have given some of it back to you with the other." But this time those people under 65 are not getting a cent back. I think that is unjustified. It is not what the bill is providing; it's what the bill is not providing that I an concerned with.

I certainly agree with the member for Victoria. Naturally we will support this, but it is half a loaf. To the largest number of our citizens this is a meaningless piece of legislation going through this House at this time. It's great for the senior citizens, and I'm pleased with that aspect.

I'm not blaming particularly the Minister of Municipal Affairs and Housing, because it is the Minister of Finance, the Minister of Education and the First Minister in this province who have been doing all the dumping on the local taxpayers. One of these days the local taxpayers are going to wake up and understand that it is this government's fault and not the fault of the local school authorities that they have such an increase in their local tax bill. It has just been a move by a government that doesn't like to take fiscal responsibility for an obligation which should be theirs and has been theirs up until this government that so relentlessly turns its back on its own obligation. other than that, Mr. Speaker, we will certainly support the bill.

MR. SMITH: It's a pleasure to take part in this debate this morning and to speak in support of a piece of legislation that I believe is directed toward the thing that all of us are concerned about: the plight of senior citizens in the days of high inflation and .fixed incomes which become a real problem to them.

Once again the member for New Westminster (Mr. Cocke) has demonstrated the expertise of the official opposition by faking his place in this debate to get up and, for public consumption, loudly criticize any and all of the

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policies of government. But when it comes to the vote - let me tell you, Mr. Speaker - they will all be voting in favour of the particular piece of legislation that is before us this morning. It's nothing new to see the official opposition take this tack on debate on any piece of legislation that's designed to be of benefit to groups of citizens in this province - in this case, the senior citizens.

The thing that the hon. member for New Westminster failed to observe is the fact that all homeowners in British Columbia, be they 65 or 16, are entitled to a homeowner grant if in fact they own a home. So those people under 65 years of age are entitled to all of the homeowner grants that anyone else is entitled to and certainly, if they own a home, they receive those grants.

I would like to say to the minister that it is a worthwhile advantage to those people over 65. 1 would like to say to the minister that, if there is some means of simplifying the type of forms and paperwork that is involved in claiming the homeowner grant from the province of British Columbia - or in some instances, many other grants - then that should be looked into very closely. Because it's been my experience in talking to senior citizens that one of the problems we run into is that, while they are aware of certain benefits, including homeowner grants available to themselves, they're reluctant to apply for it because of the type of form and paperwork that is involved. It's like, in some respects, filling out an income tax return these days. It becomes more and more complicated all the time and it would sometimes seem that it was best designed to make sure that everyone has to hire an accountant to fill out the form.

So while many people, I'm sure, come to the members of this Legislature for assistance and help, there are many who remain silent and, as a result of that, forfeit the benefit that would otherwise be payable to them. I'm glad to see the extension of a year, and I would hope that the fact that there is a year's extension will become widely known to the members of the public at large so that they will be able to take advantage of any homeowner grant that they are entitled to. It's a good piece of legislation, coming in at a time when inflation has hit all of us and those people on fixed incomes more than anyone else. And it deserves the unqualified support of all of the members of this Legislature.

MR. GIBSON: The homeowner grant which this bill speaks to was introduced many years ago to assist homeowners in dealing with education costs at the local level. I see the Minister of Education (Hon. Mr. McGeer) is in his seat and he will be aware that the provincial share of education costs has gone in the last five years from 60 per cent down to its current 40 per cent - really just opposite from what that minister's policy always was when he was in the opposition. The homeowner grant for most sectors of society has not been increased to take account of this. So I say this bill doesn't go far enough by any means.

I note that the hon. member for New Westminster said that this bill is really only half a loaf. It's a smaller fraction than that, Mr. Member. It's not just half a loaf; it's a slice of baloney. Just a small portion of the largesse is being given out here. Based on the old proverb that half a loaf is as good as a mile, I think we- have to accept that small mercy and vote for the bill.

MRS. DAILLY: Speaking to the bill, I would first like to comment on the remarks made by the member from North Peace River who seems to think that if the opposition stands up and points out areas that they think need improvement in a bill, that means they're speaking on both sides of the fence on the question. I just want to make the point here that I hope it's clear that the opposition has the right and the duty to point out errors in any bill, and I don't think that terrible attack was warranted from that member for North Peace River.

But, Mr. Speaker, back to the bill again. I was not really going to speak on this, because we had already had the general statement from our caucus critic on our support of it. But when I heard the minister, in introducing the bill, make the statement that this bill is easing the educational tax burden, I really felt bound to rise to my feet to point out the situation in my own area in Burnaby North.

In Burnaby North there are approximately 4,445 people who receive the supplement. Obviously that increased supplement will help them with their school taxes. But the rest of the Burnaby taxpayers do not receive that supplement. The homeowner grant is staying the same for them. Yet what are they faced with? In Burnaby we find that the gross school budget for education purposes has risen by 6.75 per cent, which is a very realistic increase -I'm sure the Minister of Education would agree with that. But what is the situation as far as what is going to happen to the taxpayers because of the policies of this government? Remember, the budget is only increased by 6.75 per cent. But the portion payable for this year by Burnaby taxpayers has risen 18.64 per cent, while the portion payable by the prov-

[ Page 1710 ]

ince of British Columbia under the Social Credit government has decreased 12.31 per cent. That is the situation with the Burnaby taxpayers' base.

This government, which came in on the promise of decreasing education costs, has done nothing but increase the burden. And that's why I feel that it's necessary to make this point to the Minister of Municipal Affairs (Hon. Mr. Curtis) , whom we cannot hold responsible - he's only one member of cabinet. But he should not make statements that this eases the educational burden, when his own government has increased the educational burden and done nothing for the majority of the taxpayers in Burnaby and other districts with the homeowner grant to assist in this decreased share of educational tax by this government. I think that it's a deplorable situation that they're facing the taxpayers of British Columbia with, and I'd just ask the Minister of Municipal Affairs to please level with the people of British Columbia and not to make those extravagant statements that he's reducing the educational tax, when most of the citizens of Burnaby are not finding that. And I want that on the record, Mr. Speaker.

MR. ROGERS: Mr. Speaker, I support this bill in principle. But I have a couple of objections to it and they're specifically this: The homeowner grant applies to people who live in fixed homes and it also applies to people who live in mobile homes, but it doesn't apply to people who live in floating homes - and the minister is aware of my concern about this. There are about 200 people in this province who are currently living in floating homes and paying a lot of taxes. And your colleague, Mr. Minister, the Minister of Finance (Hon. Mr. Wolfe) , has had his Assessment Authority go around and assess these floating homes. I don't know what you tax them as, because they're not businesses and they're certainly not industry. They are homes and they do not qualify. The Assessment Authority can go in and assess these residences just because they aren't included in the amendments or in the regulations of the Provincial Home-owner Grant Act, and I think that's disgraceful - some of these buildings are now assessed in the $45,000 to $50,000 range. They are residences and they should qualify. However, I will support the bill.

HON. MR. McGEER: Mr. Speaker, the member for North, Vancouver-Capilano (Mr. Gibson) , who just left the assembly, has referred to this bill as a slice of baloney. It will be interesting, when the vote is called, to discover whether or not that member votes in favour of things that he calls slices of baloney. But I can tell you, Mr. Speaker, for the senior citizens of this province it's a fairly thick cut of steak, which is what the Social Credit government is out to do for the senior citizens of the province.

Several members opposite have bemoaned the costs of education.

MR. COCKE: Right on.

HON. MR. McGEER: "Right on, " says the member, and they have blamed me. We've just heard the member for New Westminster - and I'm delighted to have the member for New Westminster blame me for the high cost of education. I want to say, Mr. Speaker, that I don't set the education budgets in British Columbia. If the members opposite thought that the Minister of Education should set the education budgets for British Columbia, then, when they were in office, they should have brought in legislation to that effect.

But we don't believe in dictatorship, Mr. Speaker; we believe in democracy. We believe that the school boards in this province should have the right - as they do now - to set the educational budgets for British Columbia.

MR. SPEAKER: Hon. member, may I remind all hon. members that the scope of the bill has to do with the provincial homeowners' grant. Although a passing reference to school taxes would be perhaps allowable, nonetheless a full-fledged debate on school taxes is not in order under this bill. I think all members will take this under advisement. Please proceed.

HON. MR. McGEER: Yes, of course, Mr. Speaker. May I say that was the least of my intentions, but occasionally people do get diverted by the cat-calling from the other side of the House. And if they promise not to divert me in my remarks, I promise not to digress into the field of educational financing. But the fact remains, however, that the homeowner grant, including this portion that is specified in the Minister of Municipal Affairs' bill, goes first to covering educational costs.

In practical terms it means that when educational costs are financed at the local level ... and we're leaving the privilege with the school boards to set this as high as they wish. Believe me, Mr. Speaker, one only needs to look at the gross of school budgets in British Columbia to learn that that is very high indeed - higher than the provincial

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government would wish by a considerable margin. But the homeowner grant is designed to offset that.

What it does mean is that some of the burden for educational purposes is shifted to business. In fact, this has been happening. Business has been paying an increased share of educational costs, something that I would have thought the members opposite would approve. It's a cause of worry to the provincial government, I can tell you. Nevertheless, what the homeowner - and particularly the homeowner over 65 - has to pay to educational costs is minimal if not nil. This is another reason, Ur. Speaker, why I strongly endorse this particular piece of legislation. I can tell you, I certainly am going to vote for it - not because it's a slice of baloney, but because it's a rich piece of steak to the people in British Columbia who need it most.

MR. NICOLSON: Mr. Speaker, after the remarks of the previous minister, I'd like to just say in this debate that he said that most senior citizens in this province pay a very minuscule amount in property taxation. I think that that is perhaps what the member for North Vancouver-Capilano (Mr. Gibson) was referring to. We have to look at the number of senior citizens who are already paying less than $430 in taxation - those who live in small cottages and rural areas. It's not going to help them; they have been given the help that they need. We support helping those senior citizens who are paying more than $430 with the possible exception of one constituent in my riding, Mrs. Blaylock, whose husband built up Cominco. She lives in a very large, rambling mansion that would put almost anything even here in Victoria to shame, save Government House, in its size. Whether she gets an extra $50 in the homeowner grant, I'm sure she's not too much concerned.

So what we are talking about is helping a group of senior citizens who do need some help. I say that I would support the concept of trying to help people who perhaps through no fault of their own, perhaps through ignorance or one reason or another, sometimes are not familiar with all the intricacies of the homeowner grant and how to apply for it, or are ignorant of the fact that they can apply for the homeowner grant even though they are not in a position to pay for their taxes. They get themselves into a position which the minister seeks to rectify by another section of the bill.

But in this area we have to face up to the fact that in the area of school taxation, property owners in this province are being forced to bear an extra and disproportionate amount of the cost of elementary and secondary education. The school finance formula, Mr. Speaker, provides for a basic mill rate, so it means that if a budget is set....

MR. SPEAKER: Order, please. I think the same caution should be voiced again. We are not in a debate on school financing. We are in debate on a municipal homeowner grant.

MR. NICOLSON: Mr. Speaker, I think that if you were to review the press releases of the day, one would see that the whole concept of the homeowner grant is tied up in terms of being a form of school tax relief. That was certainly the intention of the former Premier of this province, and it has always been, if not spelled out right in the legislation, part of the debates. So it is a measure of school tax relief. I believe it was opposed by our party in its original instance. It was never opposed by myself. I've always supported the concept of the homeowner grant. That was many, many years ago when it was first introduced.

But, Mr. Speaker, in terms of the education finance formula and the other action which has been taken by this government in increasing the basic mill rate levy from 24 mills .... We increased it to 26 mills, but now it's been increased about five mills in each year. It means that local property owners, when they try to look for relief from the homeowner grant, will find that there is none. Because the provincial government now, on what used to be a budget of this much for the fundamental basic education programme, with the lower education finance formula and lower mill rate levy.... It meant that the first 24 mills of that had to be raised locally - maybe about this much. Then the provincial government supplied this much of the remaining basic programme, and if there were frills, that again was borne by the local property owner. Now with this new increased basic mill rate levy it means that the programme is this big; that this much has to be raised locally. Perhaps the provincial government comes to their assistance to help with this much, of the total educational programme and then anything considered so-called frills is borne over and above that.

There is less money going out in support from this government to local school boards in just absolute real dollars, let alone in terms of inflated dollars, to help defray the cost of elementary and secondary education, and there has been no relief. There has always been an overall increase in the homeowner grant, I think, in almost every budget since

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it came in. I know in the early years that maybe wasn't always the case. Certainly it was the case, I would say, from 1969 onward, and certainly since 1972, in the years 1973,1974 and 1975, the years in which the NDP government brought down budgets. There has not been an increase for the general, overall increase in the homeowner grant for all those years.

So there has been a huge erosion, a tremendous transference of a tax burden onto property owners, and what this government is trying to do is to tax people out of their property at an early age. They want to make it easy for their real-estate friends to come along and pick up and assemble large areas of property they want. By holding this down, they want to make it possible for the assembly of large areas and then the applications for rezoning, which will also be facilitated by another act of this minister, and redevelopment of large sections and destruction of communities. These people are for private ownership of property as long as you're a millionaire, but if you're a simple working person, or a professional person at a certain level, then there's no place for you to own property. According to their philosophy, you don't deserve to.

HON. MR. CURTIS: I thank the members for the various comments with respect to Bill 15. The member for Alberni (Mr. Skelly) , who is still in his seat, has pointed out an area where we believe we can co-operate with the Ministry of Human Resources. That would not require a legislative change, and we shall attempt to work something out in that respect.

A number of remarks, as you will know, Mr. Speaker, dealt more with the Minister of Education (Hon. Mr. McGeer) than with me as minister sponsoring this particular bill. I don't think I made an extravagant claim in the opening remarks. I simply alluded, as did the former government and the former, former government, to this assistance being directed toward the education portion of the tax bill. I rechecked my notes, and it certainly didn't occur to me and doesn't appear now to be an extravagant claim. The Minister of Education, I am sure, will anticipate continuation of that part of the discussion when his estimates are presented in this assembly sometime soon.

The question of simplification of claim was raised by two members. I think the member for North Peace River (Mr. Smith) was one. The claim really is a very simple one, but as I indicated in the opening comments, it is the reverse side. There is a notice on the front side of the form to please complete the application, but for a variety of reasons, as I tried to suggest and as we all know, I think, that occasionally is not done, but it is not always the fault of the homeowner who is making the claim, or has failed to make the claim.

Indeed, I would like to share with the House in these closing remarks - I trust, Mr. Speaker, this is in respect to the principle of the bill inasmuch as that's an important feature of the bill - that here is a resident of Richmond who has written to the ministry on the basis of the first announcement when the amending bill was introduced a few weeks ago. I won't read the entire letter, but it starts:

"I an enclosing all the information I received last year from your office and CNHC."

This is a letter to the township of Richmond, I should point out.

"CMHC pay my taxes on such-and-such a property, but I was unsure of the home owner's grant. I phoned CMHC and they assured me not to worry, I didn't have to apply for it because it was automatic through them."

Well, shame on CMHC! We've had other examples of this. It is not an isolated case where [illegible] or someone in the organization in British Columbia soothes a telephone caller and creates a great deal of difficulty. This person in Richmond - until the amendment was introduced - was facing $308 additional taxes for 1977. 1 did not point it out in introducing the bill today, but with passage of this bill and royal assent the permission will extend back to the beginning of 1977, so this particular case will be taken care of.

We do have lending agencies, we do have mortgage companies and we do have CMHC, and perhaps we have, in a couple of instances, municipal collectors who give incorrect information rather than insisting that the person who is making the inquiry - the homeowner grant applicant - turn the form aver and complete it. There can be no assurance given by anyone in any office that, in the absence of the claim being completed on the reverse of the form, somehow the grant will be taken care of - the application has to be made.

I think I have covered most of the points. Undoubtedly there will be comments with respect to the Minister of Education, and we will leave that debate for its appropriate place. I thank the members for their indication of support for this bill. Whether they are completely satisfied or only partially satisfied, I think it is another move forward for residential property owners in British Columbia.

I move second reading of Bill 15.

[ Page 1713 ]

Motion approved.

HON. MR. CURTIS: I ask leave to refer the bill to a Committee of the Whole House for consideration forthwith.

Leave not granted.

Bill 15, Provincial Home-owner Grant Amendment Act, 1978, read a second time and referred to Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. CHABOT: Second reading of Bill 4, Mr. Speaker.

BRITISH COLUMBIA HYDRO AND POWER

AUTHORITY (1964) AMENDMENT ACT, 1978

HON. W. WOLFE: The sole purpose of this bill is to increase the borrowing authorization of British Columbia Hydro and Power Authority from its present level to $4.9 billion. Members will recall that this bill is quite often referred to as a simple two-line bill. I recall this being mentioned several times last year. I want to mention, Mr. Speaker, that it is now a three-line bill. We have improved it by 50 per cent; I want that on the record.

In fact we are requesting that the borrowing authority for B.C. Hydro be increased from $4.15 billion to $4.9 billion, an increase of $750 million. This will cover estimated borrowings by British Columbia Hydro and Power Authority for approximately one year.

I'll be supplying members with these very brief second-reading notes which will give a listing of the proposed projects covered by this borrowing. I will circulate this list in due course. I can't give it to you right now because there is a correction being made in it.

The estimated costs of the major projects for 1978-79 are as follows:

1. Site 1. This project is on the Peace River, downstream from the W.A.C. Bennett Dam. The work, including transmission preparation, is budgeted for $145 million in the 1978-79 year.
2. Seven-Mile project on the Pend-d'Oreille River. It includes a concrete dam, surface powerhouse and transmission preparation - $115 million is expected to be spent in 1978-79.
3. Revelstoke. This project consists of a 530-ft. concrete gravity dam and six generating units located on the Columbia River, downstream from Mica. The amount budgeted for the project is $75 million in 1978-79.
4. Hat Greek proposal. The development of coal deposits and an electric generating plant are expected to cost $19 million in the 1978/79 fiscal year.
5. Mica. An additional generating unit and transmission lines are budgeted at $18 million in the 1978-79 year.

Other generation facilities will require $27 million in the 1978-79 year, and other additions to transmission facilities will require $98 million. Transformation substations all over the province to break down the power from high voltage to subtransmission and distribution voltage in 1978-79 will require $52 million. Upgrading of distribution circuits all over the province to accommodate the growth will require $80 million in 1978-79.

Mr. Speaker, other electric facilities, communication and control laboratories, and service centres will require $38 million in 197879. Gas facility plant additions will require $34 million. Passenger transportation, equipment and facilities in 1978-79 will require $36 million.

Lastly, miscellaneous trucks, vehicles and railway equipment will require $14 million in 1978-79.

Mr. Speaker, these capital projects total the sum of $751 million. At this time, $54 million of the present borrowing authority remains. This amount plus the additional sum proposed in this bill will enable the British Columbia Hydro and Power Authority to proceed with its projects and leave a minimal borrowing power available for any unforeseen events. The expansion programme of the British Columbia Hydro and Power Authority is planned so that there will be sufficient electric power to meet anticipated demand. The projected increase in demand for electricity rises from 25,958, 000,000 kilowatt hours in 1976-77 to 52,340, 000,000 kilowatt hours in 1987-88. This increase means a demand for almost double the power generated now and necessitates borrowing funds being available for plant expansion required to meet this anticipated demand. The necessary plant expansion is timed so that it is done as economically as possible. The government believes that any request for an increase in borrowing authority by the British Columbia Hydro and Power Authority should come before this House.

The Authority did request a larger increase, but after study the government is only prepared to recommend an increase of $750 million. The increase in borrowing authority does not automatically allow the corporation to borrow UP to that amount. Each borrowing must have the approval of the Lieutenant-Governor-in-Council.

[ Page 1714 ]

As an additional piece of information for the House, I might say that the only refundings of bonds required in this fiscal year by British Columbia Hydro and Power Authority is a $25 million parity issue and a $7.8 million B.C. Electric Company issue which is due in February, 1979.

I want to emphasize that although this request is to increase the borrowing authority by $750 million, this authority will of course only be used as required and as authorized by the government through order-in-council. As I said earlier, I have copies of these remarks which will provide details of the projects I have just referred to, and which I am going to make available to the members.

Mr. Speaker, I move the bill be read a second time.

MR. SKELLY: I would like to thank the minister for presenting a breakdown of the funds required under this bill. It's unfortunate, however, that the situation in this House is such that background information cannot be provided to members well in advance of the Act coming up for second reading in the House so that we can all have an opportunity to analyze those financial requirements on a project-by project basis, which will allow us some ability to research and comment on the bill in an informed way.

Each year a similar bill is brought forth in the House and each year, traditionally, the opposition parties have supported the bill, recognizing the requirements of B.C. Hydro and generally taking B.C. Hydro at its word for its financial requirements.

Last time a similar bill was brought to the House the NDP opposition broke tradition and opposed the bill. Just to serve notice on the minister, we intend to do that again. The opposition will not support Bill 4 to increase the borrowing authority of B.C. Hydro by $750 million.

There are a number of reasons why we did this in the previous borrowing bill. I think it is worthwhile today, if the minister is listening, to restate the reasons. You know, every time the Premier stands up in the House to recycle his election speech he mentions the massive debt that he states was created by the NDP - the debt that will be left to our children to pay principal and interest for years and years to come, money that will be taken out of their pockets, according to that Premier, to finance the borrowings and the direct debt of the province of British Columbia. He talks about saddling our youth with this problem of debt and yet, at the same time out of the other side of his mouth, he brings in a bill to increase the borrowing authority of Hydro this year by $750 million.

Almost every energy proposal that the minister brought forward is that same type of capital-intensive, centralized energy proposal that Hydro has been following through for years and years - ever since they were acquired by the British Columbia government: the Revelstoke Dam, the Hat Creek proposal, the Cheekye-Dunsmuir power project, for example, which is presently under way. There are no energy proposals at all that we see in this statement of financial requirements offered to us by the Minister of Finance that don't seek the other path.

The Premier stated during debate on his estimates that something like $2.2 million was being allocated over the next three years to examine solar energy projects through the B.C. Energy Commission and other alternate energy projects concerned with conservation. Yet compared to this year for B.C. Hydro we're voting a borrowing authority of something like $750 million for those centralized conventional energy generation projects that have a tremendously high impact.

Over the last three years this province under this government has increased the borrowing authority of Hydro by somewhere in the neighbourhood of $2 billion. It wasn't too long ago that the whole budget of the province was $2 billion so we're really getting into a tremendously heavy debt burden attached to a single energy corporation which produces one quarter of the energy in the province. Yet in alternate energy areas we're allocating the paltry sum of $2.2 million, which won't even be the interest on this amount on an annual basis.

When Mr. Bonner, the political hack who was appointed chairman of B.C. Hydro and Power Authority, came before the public accounts committee last year, he expressed serious concern about the debt of B.C. Hydro and Power Authority and how future generations were going to accommodate the debt and pay for the debt-servicing on the loans that have been issued by the Authority. Because of Mr. Bonner's association with the Trilateral Commission and other international financial groups we are concerned about what Mr. Bonner's actual function is with relation to B.C. Hydro.

B.C. Hydro is the major debt-creating Authority in the province of British Columbia and the organization which Mr. Bonner represents internationally is the major creditor organization - the Chase Manhattan bank and the Rockefeller connection and the whole thing. There have been some real problem with

[ Page 1715 ]

nations such as Great Britain, for example. When the pound was under attack and the value of the pound was declining relative to other currencies, the very international financial associations which Mr. Bonner is connected with imposed on Britain some conditions for sustaining the value of the pound and for propping up the value of the pound through international loans from the world bank and from the IMF. The conditions for this interfered with the sovereignty and the rights to sovereignty of a sovereign nation, Great Britain. They demanded that Britain sell part of its ownership in the British Petroleum Corporation and they also demanded certain changes in the welfare policy of the government of Great Britain.

We are concerned that by increasing the debt load in British Columbia to creditor organizations that Mr. Bonner represents we are opening ourselves to some kind of interference with the sovereignty in this province by those creditor organizations. It is something that we are extremely concerned about, given Mr. Bonner's connections. The same things have happened in Chile and Peru over the last few years - mainly in connection with the Inter-American Development Bank and their interference in the internal sovereign jurisdictions of countries like Peru and Chile which has resulted in revolutions.

So we are extremely concerned about the way the debt is being generated and the accelerated way in which debt is being generated by B.C. Hydra and Power Authority, especially on highly capital-intensive, debt-intensive projects such as the ones the minister outlined today in his presentation on second reading of the bill. That is one of the major concerns we have and one of the reasons we will be voting against this bill on second reading.

Another concern that we have is some of the high-impact projects that Hydra is engaged in at the present time. They seem to have an inertia in that direction. Hydra seems to be convinced that the only way to go as far as energy generation and transmission in the province of British Columbia is concerned is in the direction of those capital-intensive, concentrated, high-impact projects such as the McGregor diversion, the Revelstoke Dam, the Kootenay diversion and the Cheekye-Dunsmuir transmission projects and other 500 kilovolt, 750 kilovolt powerline projects through the province. There are other ways to go.

We thought the McGregor diversion was cancelled when Mr. Bonner made his statement some months ago saying that they had found some fish or parasites in the Fraser River system that might be transferred over the Divide into the Mackenzie system or vice versa. Now Mr. Bonner has never tabled those reports and we're not sure even if the reports exist, but in any case that was the excuse used by Mr. Bonner in cancelling the McGregor diversion project. But right after the project was cancelled or suspended, as Mr. Bonner said, a few months later, in March of this year, the Minister of the Environment (Hon. Mr. Nielsen) went up to Prince George and announced that he was building a low-level dam on the McGregor River. It's in the headlines in the Prince George Citizen - if the minister of mine closures would like to read some of the papers around the province. The Minister of the Environment announced that they were going ahead with a low-level dam on the McGregor that may cause floods on the lower mainland.

Engineering people who have advised us have indicated that the problem of river gradation hasn't been adequately studied to determine what might happen should you slow down the momentum of the Fraser River at Hope. You increase the deposition of material sediment load in the river by something like 50 per cent for every 10 per cent you slow down the momentum. These come from engineers who advise our caucus about concerns over the McGregor Dam - whether you're talking about a high level dam in the McGregor Canyon or a low level, so-called flood control dam. And they say that by increasing sedimentation at Hope, you're going to change the deposition of material in the river, you're going to raise the bottom of the river, it will overflow its banks at Hope and seek a new course through the existing deltaic area and cause flooding the likes of which we have never known. So before we go into any kind of a decision to build a dam on the McGregor - a low-level dam, a high-level dam - those problems should be studied, because we stand to lose hundreds of millions of dollars in development and in farmland in the Fraser Valley if these kinds of decisions are not made without informed input. The fact is that we do not have the informed input and the Minister of the Environment doesn't seem to be concerned about seeking it out.

The Revelstoke Dam problem has been well discussed. It went to a water rights hearing before the comptroller of water rights and it went before a cabinet committee during which a lot of people - concerned people, expert people - presented some pretty high-quality information against the construction of the Revelstoke Dam and the possibilities and the dangers of the Revelstoke Dam and proposed some alternatives to the continued construction of those high-impact, capital-intensive,

[ Page 1716 ]

debt-intensive generation projects such as the Revelstoke Dam. Now cabinet has made up its mind before the proposal even went before the comptroller of water rights, and the cabinet had made up its mind that the Revelstoke Dam was going to go ahead regardless of the danger, regardless of the social impact, regardless of the environmental impact, and it was a cabinet decision made well in advance of proceeding to the hearing before the comptroller of water rights.

The Cheekye-Dunsmuir power transmission project. Whenever we go to a public hearing they send down 14 or 15 of Hydro's flack people to tell us that they're still looking into the routes and they're still studying the possibilities and haven't really made up their mind yet. But in fact Hydro has made up its mind to proceed with the construction of that 500 kilovolt line and was-simply talking about the route. That 500 kilovolt line involves integration of Vancouver Island into the mainland power grid, and that's something that we're strongly opposed to on Vancouver Island, especially on central Vancouver Island, Lasqueti Island and Texada. Island, which are going to suffer the main environmental impacts of that 500 kilovolt line without deriving any of the benefits. Hydro has now contracted out two-year contracts to Pirelli in Italy and to other companies, looking into the possibility of building undersea transmission lines over such long distances. It will be the longest submarine cable in the world. Hydro isn't sure, because of the lack of technology and the lack of research in this area, They're not sure if they can even go ahead with the project, but they are committed and obviously cabinet has made a commitment that Hydro can go ahead with that project. So we're concerned that these types of things are going ahead.

The Kootenay diversion is another one. Now we're not sure just what position cabinet is taking on this, or how much money is being allocated by Hydro to studies of the Kootenay diversion. The preliminary report on the Kootenay diversion indicates, as the member for Kootenay (Mr. Haddad) has stated, that there are serious environmental repercussions to the Kootenay diversion should the whole project be followed through, and there are also serious social repercussions in the area of Canal Flats, just south of the Minister of Mines and Petroleum Resources' (Hon. Mr. Chabot's) area there, which could result from the construction of the Kootenay diversion project and the impact of that project back through the Columbia River system.

The member for Coquitlam (Mr. Kerster) made a facetious suggestion, Mr. Speaker, that the Burrard thermal plant should be packed into suitcases and moved to Vancouver Island. It was a bit ridiculous. I do share his concern about the potential pollution problem that this Burrard thermal plant is going to create in the Vancouver area by burning heavy, high sulphur oils. It's going to cause real problems in an area where we already have a high pollution problem and where the medical health officer for Vancouver has stated that there are real dangers to the health and safety of people in Vancouver should we go ahead with the burning of heavy, high-sulphur oils in the Burrard thermal project, not to mention the increased tanker traffic %which will result in and out of the Strait of Georgia and in and out of Burrard Inlet, should the government decide to proceed with the Burrard thermal project on a heavy, high-sulphur oil basis.

Those are some of the things that concern us. It appears, Mr. Speaker, to the Minister of Finance (Hon. Mr. Wolfe) that Hydro doesn't have that concern for those common property, life-sustaining resources that are so undervalued by the present government in British Columbia. I'm talking about clean air, life-sustaining air. Hydro doesn't seem to care or attach much value to that resource, yet we all need that resource in order to survive, and productive land - productive forest land in the case of the McGregor diversion, which will be put under the water forever.

1 took a boat trip up the McGregor River a few years ago with some of the people in the area who were concerned about the McGregor diversion and the construction of the high dam. We stopped at a place at the junction of the McGregor river and James Creek where the water from the Fraser system was to be diverted aver the divide and into the Peace River system. We stopped at a point where Sir Alexander Mackenzie - I don't know when his bicentennial is coming up, but it should be in a few years -stopped at the confluence of the McGregor River and James Creek. The old guide who had taken us up the river said: "You know, back in 1789 or 1790, Alexander Mackenzie stood here when he was on his way to the Pacific and if they build the McGregor Dam, this place will be put under water and you'll be looking up 300 feet to the surface." You'll be wiping out the history of the area, wiping out the environment of the area, wiping out that productive forest land in the area.

For the first time, Northwood Pulp and Timber stood up in opposition to the McGregor River diversion because it would destroy thousands of acres of productive timberland. When we're looking at the shortage of productive timberland that we'll have in this pro-

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vince, especially if we pass the new Forest Act, and the fact that the timber commitment is now equalling or exceeding the annual allowable cuts through the province, then we should really be concerned about the impact on productive land that these power projects will have. So it's a common property resource, Mr. Speaker, land that's owned by all of the people in British Columbia - very productive land. We are concerned that Hydro doesn't have the concern for this productive land and that money allocated under borrowing bills such as this is going to destroy forever productive land that can be used for the production of timber and forest products. What we're doing is placing that land under water forever and destroying the productive value of that common property resource.

In another area, the Site C project on the Peace River, it's obvious that Hydro has decided to proceed with the Site C project.

They're already buying land downstream or in the reservoir area of the Site C dam, and one the reasons.... In fact, in the Alaska Highway News just a little while ago, Mr. Speaker, it was pointed out that the Minister of Economic Development (Hon. Mr. Phillips) and the member for North Peace River (Mr. Smith) down there, who has recently fallen in some stature in this House, assisted people in the reservoir area to sell their land to B.C. Hydro. I wasn't aware that Hydro was in the farmland business. They sold it at very favourable rates, although they won't tell us who sold the land and they won't give us any indication of the lease-back rates for this farmland. But Hydro bought that land in order to avoid any public confrontation with these people over water rights and aver the fact that something like 40,000 acres of prime farmland in British Columbia are going to be destroyed as a result of the construction of the Site C dam. So these are things that we are concerned about, Mr. Speaker, that Hydro understates and isn't concerned about the value of those common property, life-sustaining resources.

That is food production land. As land in California is lost to food production for various reasons, as land in Mexico is lost to food production for various reasons, or the food is required down there by their increasing population, we aren't going to be able to import cheap food as we did in the past - just as we're not able to import cheap energy as we did in the past, because of the increased cost of oil through the OPEC cartel.

It was mentioned by Max Saltsman in the House of Commons a few years ago. He said: "You know what really controls inflation?"

AN HON. MEMBER: Where does he invest his money?

MR. SKELLY: Not in British Columbia under you guys - no way.

AN HON. MEMBER: In the U.S.A.

MR. SKELLY: What we're doing now is investing money in the U.S.A. by selling loans for B.C. Hydro down there.

Max Saltsman [illegible] that the two things that contribute most to inflation are the increasing costs of food and the increasing costs of energy - the things that we need most as human beings. It's those things that are going to cause problems and we have to work out a trade-off. Yet it seems that Hydro undervalues the productive food land and, as we lose this food land, we may be paying less for energy in the future but we're going to be losing this productive food land in the Peace River and we're going to be forced to pay a lot more for food. We've never really analyzed that kind of a trade-off and Hydro doesn't seem to be concerned about that analysis.

We are concerned that the Site C Dam is going ahead. We are concerned that, as the borrowing authority of B.C. Hydro and Power Authority increases, we are committing ourselves to these highly centralized, highly capital-intensive, highly debt-intensive projects and that somewhere down the line our children and their children are going to be in trouble because of the decisions we make in bills like this.

We have to recognize that there must be another way to go. Another way to go is the soft energy path, as Amory Levens called it. Yet, as the Premier stated in debate on his estimates, something like $2.2 million is being allocated over the next three years to examine those alternate energy paths - solar energy, wind energy and other forms of energy that are less capital-intensive, more labour intensive, more supportive of local business and that require less debt on the part of the province. Yet those alternatives and that energy path aren't being seriously considered at all by the present provincial government. That's what we would like to say: not $2.2 million over three years for alternative energy and energy conservation as opposed to something like $2 billion in debt over three years, which is being proposed by the present government on the other side of the House.

You know, the people who are doing the work in the soft energy path, in the labour intensive energy path, are volunteers and people in community conservation centres and

[ Page 1718 ]

people in small business - the people whom they say they support. Yet these people are receiving no support at all from the present minister responsible for Hydro.

When I questioned him in his estimates on finance, and asked him about sales tax and the removal of sales tax on solar energy collectors and equipment, he said that they would consider it, or maybe he nodded or something like that, but he never showed any serious intention of doing anything about it. Yet the material he has presented on B.C. Hydro in some detail indicates that this is where his real concern is. He wants to set up this huge energy-intensive, capital-intensive, debt intensive corporation; that's where his major commitment is.

Another reason why we're opposed to this project is that the government appears continentalist in its approach to energy and its approach to the management of our water resources. One of the things we have in this province, which is kind of the key to our economy, is pure water - again, another common-property, life-sustaining resource. These people seem to undervalue those common property, life-sustaining resources. They are willing to store the water and then ship it down to the States, where it generates power to produce industry down in the States. Under the Columbia River Treaty we lost $1.5 billion which we'll never recover. They talk about renegotiating the treaty and the treaty coming due at some time in the future. But in the future the United States will have adopted that alternate energy path. They're spending hundreds of millions of dollars in the United States looking into energy alternatives. In the future they may not need the energy and the stored water that we have under the Columbia River Treaty system. They may tell us to go packing. "Keep your water. Keep it stored. We don't need it any more. We've taken the other path, the path not taken in this province."

So we've got into some real problems because of this continentalist approach. When the former Minister of Energy, Transport and Communications (Mr. Davis) , who has also fallen from grace - or Bill - got up to make speeches in the House, he talked about selling power to 4:he United States. And the -present Minister of Economic Development (Hon. Mr. Phillips) talks about making revenue for the province by selling power to the United States, and he advertises in all the newspapers outside of British Columbia about the cheap power that we have here in British Columbia. "Come to British Columbia because of the cheap power."

Well energy isn't cheap anymore, unless it is underpriced. And the only way you can underprice it is to trade off the other values - the life-sustaining resources - to trade off productive forest land, productive agricultural land, and the safety of communities like Revelstoke. Trade off the social impact that our people will have to bear sometime in the future and trade off the debt load that our children and their children will have to bear in order to finance these energy-in tens five projects.

Another reason we're concerned about this bill is the rate structure and the management of Hydro in determining rates. In one of the prospectuses issued by B.C. Hydro and Power Authority - maybe they forgot to put a date on it - anyway, for series EN, due in the year 2007, they talk about the regulation of rates for B.C. Hydro. They say:

"The provincial government has announced it's contemplating legislation which will create an authority to review all rate applications made by Grown corporations and agencies, including the Authority" -meaning B.C. Hydro. "The provincial government has advised the Authority that, if such legislation is enacted, the provincial government expects that the Authority will be permitted to change rates that will enable it to recover operating costs."

It is two years ago that this announcement was made, and yet there is no authority in British Columbia that sits in judgment on rate increases proposed by B.C. Hydro.

There is no way the public, which is obliged to pay Hydro rates, has any input into the rate structure of British Columbia Hydro and Power Authority. When we talk to B.C. Hydro at public meetings and we question their rate structure and we say that it may be possible for Hydro to cancel the construction of some of these dams and powerline projects, when we question Hydro on that basis they say: "We don't have a mandate to set rates in order to encourage conservation." They don't have the mandate from the government to do so.

They don't have an authority which sits in judgment on their rates and probably could suggest to them: "Well, if you had this rate and changed it to such and such, then you would encourage conservation and save billions of dollars in capital costs and debt costs somewhere down the line." We simply don't have that separate authority which the minister promised to bring in when he produced that prospectus back in, I believe, June 15,1977. So we don't have that authority here in British Columbia. And without any independent

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authority to determine and to decide on rates, I don't see how we can possibly support this bill. We have no way of knowing - and it's never made public - the Authority's ability to pay off the debt, other than by going into debt in the future to redeem bonds as they mature. When I wrote to Hydro and questioned them as to why they increased the residential rate a little while ago and asked them if they had done a study on the impact of these rate increases, they wrote back and said: "Yes, a study had been done several years ago, but we have chosen to ignore it." That is the content of the letter that Hydro sent to me. So there is no independent adjudication, either through the Energy Commission or through a rate setting authority of the province, as there is in almost every other province and every state of the United States. You simply can't pass through your costs to the consumer without going through this regulatory body first. We don't have it here. We don't know if we can pay off this debt that the minister is attempting to foist on us. So, in the absence of that authority, we cannot support this bill.

Another thing is co-generation. When we appeared before Hydro at Lasqueti Island, for example, an economist presented material to the Hydro officials on co-generation and the fact that, if Hydro would purchase electricity from pulp mills and saw mills, we would be able to bring energy into the system and obviate the need for new generation and transmission projects.

Also, to solve some problem that we're experiencing in the Quesnel area, where the Minister of Highways and Public Works (Hon. Mr. Fraser) comes from, they're dumping acres and acres and cubic foot upon cubic foot of hog fuel, and it's going to waste. That hog fuel is stored energy, and we're dumping it and allowing it to rot and to go to waste -stored energy, material that's come from the forests of the province, that people have paid money for in the form of stumpage. Yet they're being forced to dump it, to destroy productive land and to destroy that potential energy source.

We're also exporting wood chips and biomass material from the province. We're going to be building a new terminal in Vancouver for $12 million to $14 million to ship this potential energy out of the province, that we could be using here to obviate the need for new power generation and transmission projects.

In addition, as a result of decisions made by the Minister of Forests we're leaving a tremendous amount of wood waste in the forest. He's dropped back from close utilization in the coast forest industry to intermediate utilization and he's allowed those people to leave a tremendous amount of wood waste in the forests.

In a previous speech I mentioned studies done by Dr. Harry Schmant at the University of Detroit where he said that just by cleaning waste wood from a 2,500-acre piece of land each year, you could produce a wood-thermal energy station that could generate energy for a community of 20,000 people. A project is already under construction in central Michigan to do just that. I'm not talking about merchantable material; I'm talking about waste. The wood waste that we leave in the forests could be used in the United States to provide almost as much energy in oil equivalence as the United States imports every year. Yet we're leaving that in the bush and we're wasting it.

Hydro is ignoring those wood thermal possibilities. Now the Energy Commission, I understand, is doing some studies in this area; In fact they've probably now tabled a policy paper with cabinet but we haven't had access to it. It hasn't been published. The former Minister of Energy said last September a paper was going to come down and hearings were going to be held into the possible energy future for the province of British Columbia. That paper hasn't come down and those hearings haven't been held. In the absence of those hearings, why should we approve an increase in the borrowing authority of B.C. Hydro which will allow them to continue on the same path, in the same capital- intensive, debt-intensive direction that we're proceeding in now?

So there's no public involvement in any effective way into Hydro's energy projections and the type of projects that they are going into. One of the problems, and one of the reasons why Hydro discourages effective public involvement, is the sheer size of the corporation. It is too big. It is too vertically integrated. I've talked to the minister about this before; I've written to the minister about this before. Although the Premier has said, "Gee, I don't know about Hydro. I'm really concerned. It seems to be operating out of control, " actually what he's been doing is the good-guy bad-buy routine. The Premier controls Hydro. The Premier controls the direction of Hydro and as the minister stated a few minutes ago, all Hydro's individual projects have to be approved by cabinet.

So Hydro isn't out of control. If the Premier doesn't control Hydro, that means that Robert Bonner controls the Premier. If that is the case, one of them should either be fired or should resign, because if Robert Bonner

[ Page 1720 ]

controls the Premier through his position as bagman for the Social Credit party, then the Premier should quit. If Hydro's control over this government is related to the fact that Bonner was the bagman, then the Premier should quit. I just noticed your light went on ' Mr. Speaker, and I have now designated myself as speaker.

Partly this is due to the sheer size of the corporation. Every corporation that grows as large as Hydro develops a kind of inertia that keeps moving it in the direction it's going in, in spite of the fact that that direction has become obsolete and, in fact, has become destructive to the economy, to the environment and to the society of the province of British Columbia.

I have suggested this to the Premier before: perhaps Hydro should be broken up and it should be done both vertically and horizontally in two ways. It should be broken up vertically to separate the planning authority of Hydro from the actual operating company. That planning authority should be turned over to a body such as the B.C. Energy Commission. When we were in office, Mr. Speaker, that is precisely what we were in the process of doing - setting up an energy authority, a separate planning authority for the province of British Columbia which ultimately would decide which energy direction we were going to go in and then give instructions to companies like Hydro to follow the policy directions as laid dawn by the government through its instrument, the B.C. Energy Commission. So Hydro should be broken up vertically in the first place and the planning authority should be separated from the operating authority. All B.C. Hydro should be doing is running generation and transmission plants as instructed by a planning authority which is directly responsible to the government and directly responsible to the people of this province, as Hydro is not.

Another suggestion that I've made - I've put it into a bill, but I won't discuss the merits of that bill now - is that Hydro should be broken up in a horizontal way. Perhaps we should have separate Hydro authorities throughout the province. I'm not saying we shouldn't have a grid system throughout the province whereby we can take advantage of power being produced at different rates in different regions even though the needs are different, so that power from the Peace River can be transferred down to Vancouver when it's needed, or power from a different time zone such as the Kootenays can be transferred down to Vancouver when it's needed. I'm not saying that shouldn't happen, but Hydro should be broken up into more regional authorities and a governing policy authority such as the B.C. Energy Commission, when it matures and develops, should decide how that power should be transferred from area to area. It should be broken up both horizontally and vertically in order to give to the people in various regions of the province more control over how energy is produced and distributed in British Columbia and what type of energy path we should be following in British Columbia.

Those are only some suggestions. The reason I am making those suggestions during this bill is because we have never had an opportunity for an independent review of Hydro's management, of its structure and of its operation. In Ontario they are following through with a royal commission. The royal commission involves a tremendous amount of public information and public involvement. Position papers such as this one are being circulated among the people of the province of Ontario. Certain ideas are being thrown out to them asking: "Which way do you want to go? Do you want those centralized, capital-intensive, debt intensive projects or do you want to want to go another path? Or do you want to go a certain path in a certain region? What are your requirements? Is there really such a things as energy demand as separate from energy need? Are we really trying to feed a demand that has gone out of control? Or should we talk to people about their actual energy needs?" A lot of these questions are being thrown out in papers presented by the Ontario royal commission to the people of Ontario to allow the people of Ontario to decide which energy path they plan to follow.

A few weeks ago the minister referred a number of questions he had received from a newspaper in the province to a special standing committee of the House. That is not the direction to go. We and the people of British Columbia should have an opportunity to examine all aspects of British Columbia Hydro, everything about Hydro, all aspects of energy demand in this province, all aspects of what direction we are going in in terms of energy demands, needs, uses and forms of production -this type of thing.

We are going to oppose this bill. We cannot support an increase in the borrowing authority to the tune of an additional $750 million, when the government doesn't give any credence or serious support to other energy paths.

There is no necessity to present this bill at this time. We can stop for a year or two. I'm not talking about stopping construction of projects already underway; I think we have committed ourselves to those projects. But we

[ Page 1721 ]

can stop for a short time to re-examine our direction and our priorities. Before we burden our children with this increased debt, we should re-examine what we are doing in the way of these capital-intensive, debt-intensive projects, because our children may not be able to financially support the decisions we are making now.

I've traveled throughout the length and breadth of this province in my capacity as environment critic for the official opposition. No matter where you go, the people of this province have lost confidence in Hydro. The organization is too large; it's too secretive; it's too integrated. There is no information available about the company. There are serious concerns about mismanagement of the company. They feel, in fact, that the corporation has lost confidence in the people they serve.

Mr. Speaker, our official opposition intends to vote against this bill.

HON. MR. WOLFE: Mr. Speaker, could I ask leave to make an introduction?

Leave granted.

HON. MR. WOLFE: In the gallery today are students from Lake Trail Junior Secondary School in Courtenay, and their teachers Mr. Henderson and Mrs. Smith. I ask the House to recognize them.

MR. KING: First of all, I want to acknowledge and congratulate my colleague from Alberni on what I think was a very brilliant and a very useful speech in this Legislature, and one that I certainly hope the government pays some serious attention to. I honestly feel, as I think many members on the government side feel, that this particular issue should not be a partisan one. This is a matter that is so fundamental to the interests of our Citizens that I think people on both sides of the House should pay very, very close attention when you receive that kind of very detailed and very intelligent dissertation, which certainly has its roots in a great deal of research into the whole area of energy production and use.

Mr. Speaker, I want to add a few things and highlight a few things because, as the House well knows by now, I come from an area in the province which has probably suffered more social, economic and environmental disruption as a result of power developments by B.C. Hydro than any other particular territory of the province. That kind of disruption is still underway with the construction of the Revelstoke Dam.

There are a couple of things I want to deal with. I was intrigued by the minister's notes that he was kind enough to distribute to certain members of the House. A statement appears in those notes - and the minister commented on it - that there is concern that there will be sufficient electric power to meet anticipated demands. MV colleague from Alberni dealt with that problem, the problem being that here we have a large corporation that is really in the business of generating electrical energy in this province, building transmission lines to deliver it, while at one and the same time controlling the volume of their sale. Now if you relate that to any other enterprise, private or public, one can readily see that such an authority or power delivers to that corporation the ability to build their own empire, to estimate energy needs related to a self fulfilling prophecy and the desire for their own empire building, rather than paying attention to the public interest. These are the things that have to be looked at, I think, before we consider providing spectacular increases in borrowing power for this agency to run future generations yet further into debt. -

The structure of the agency is important. It is the fundamental problem in terms of coming to grips with any change and any dismantling which will make this monster more accountable to the public of this province. That should be the objective of the government. That should be the objective of this Legislature because right now it is an agency that is autocratic and ham-handed in terms of its dealing with the public.

I do not blame the agency, Mr. Speaker. I think too often politicians have said that we turn our guns on B.C. Hydro. The fact of the matter is that B.C. Hydro and Power Authority is an agency of the Crown. It is authorized under the statutes passed by this Legislature. It is controlled by cabinet order- in- council with respect to policy decisions on construction. It is controlled by cabinet authority with respect to funding, borrowing and so on. So to suggest that this is an agency unto itself out of control is a neat political twist.

I suggest, Mr. Speaker, that the government holds the authority to bring this monster to heel in the public interest any time it chooses to do so. The government has developed a neat dodge, you know - the dodge that there are decisions to be made with respect to delivering large blocks of power to industrial users out there. That objective will conflict with regional priorities, with environmental

[ Page 1722 ]

concerns, with social concerns and with other land use concerns which my colleague has pointed out. So what we do is set up this monstrous bureaucracy and we establish them as an arm's-length agency from government and we let them take the heat when, in fact, we as a government are responsible for those decisions and hold veto power over those decisions. It is a neat political dodge to set up a straw man to take the heat for government decisions. That is precisely what is happening.

Who controls B.C. Hydro? A chairman, appointed by the government - former Social Credit cabinet minister Robert Bonner. Who appoints and directs the senior personnel? The chairman, who has his roots in a political association with this government. As I've pointed out, the government does control the borrowing power.

There is no question that through the structure of this agency there is no chance for public accountability. But for the Premier and other ministers to go around the province saying, "Yes, we're afraid that Hydro's getting a bit out of control, " is really a bit of a deceitful ploy in terms of inferring to the public that we'd like to control this monster, but it's out of control and there's not much we can do about it. All of the policies with respect to an unending demand for new energy at the expense of social concern, at the expense of arable land, at the expense of disruption of whole communities and individual farms and holdings are directly a government responsibility, which this government can control through existing statutes.

Mr. Speaker, there's no question that a number of things should be done to improve public accountability and they should be done at this session. They should certainly be done before there's any increase in approved borrowing power for B.C. Hydro and Power Authority. One of those things is to set up a public agency which would conduct hearings, which would allow for public objections to proposed rate increases. I know of no other agency delivering fundamental social services such as transit, such as electrical energy, transportation, telephone and communications areas; I know of no other agency delivering those fundamental services that is allowed to increase its rate to the public without a proper hearing, without having to justify those increases, and without allowing the venting of public opposition to those proposed rate increases. The government has it within its power to bring in that fundamental requirement this session.

I think that the government of this province should be looking at the rate structure of B.C. Hydro and Power Authority. Any cursory examination of the rate structure demonstrates that the large block users of electrical energy in this province are receiving their huge chunks of power at bargain-basement rates, while conversely the home consumer of electrical energy is paying a far higher rate for the small proportion of energy that he uses. In other words, the rate structure is encouraging the never ending demand for increased generating capacity. Of course, the public then, in the final analysis, through bills such as that before us now, is held responsible for the intensive capital investment to produce that increased generating capacity which is largely created by the large block energy users in this province. It's a complete and utter discrimination against domestic consumers in this province. These things shouldn't be allowed to go on. The government has it within their hands very simply to change these particular areas and to create more accountability on the part of B.C. Hydro.

What about the expropriation powers of B.C. Hydro? This has been one of my favorite subjects that I've talked on when I've had occasion in this Legislature for eight years now. Surely the statute that gives B.C. Hydro and Power Authority the power arbitrarily to seize private property and land in this province without any public hearing to justify their need for that particular property is wrong. Certainly, in my view, anyone who is obliged to give up personal property in recognition of a higher need of the public of the province should be protected to the extent that no more of his possessions are taken than are absolutely to the public interest. The fact of the matter is that with respect to B.C. Hydro, they have used this appropriation power to seize land which was far surplus to their reservoir needs and then used that land to speculate on the real-estate market. It's an arbitrary right to seize and virtually to compensate at whatever their offer is.

We recommend and were preparing a bill which I had something to do with. My colleague the former Attorney-General (Mr. Macdonald) had a bill virtually ready for introduction which dealt with this arbitration process. The principles involved in that bill were very simple ones. First of all, Hydro should be obliged to justify their need for any private property. Secondly, the landowner who is attempting to obtain fair compensation where seizure of his land is necessary should be provided with free technical assistance so he's put on somewhat of an even footing with B.C. Hydro in that arbitration process - such as hydrologists, soil experts, free appraisals. Finally, if no nego-

[ Page 1723 ]

tiated agreement were possible, then a system of free arbitration to the landowner should be provided so that he is not subjected to high costs to protect what is already his own possession. These things are absolutely gross in terms of the laws that allow B.C. Hydro the kind of unusual and extreme powers they enjoy today.

Let me tell you some of the things that are happening in the city of Revelstoke at the moment. We have a dam under construction about three miles out of town. It's going to loom almost 600 feet above the city of Revelstoke. We are assured by the engineers and so on that it's a safe structure and will be safe, and I certainly hope that's the case. But I want to tell you that the people of Revelstoke have some cause for concern when in the initial construction phase of that Revelstoke Dam a small creek called Deadman Creed has to be diverted just north of the dam site, and that diversion takes place, and Hydro engineers subsequently admit that they miscalculated. Mr. Speaker, that creek went on the rampage and washed a new canyon down into the Columbia River with such intensity and such volume that it completely shut off the Columbia River flow on a temporary basis. It deposited hundreds of thousands of tons of silt into the Columbia River system which was washed into the Arrow Lakes, having an undetermined effect on the fisheries of that area, and Hydro tells us: "Well, we're sorry - we miscalculated. We didn't expect this creek to go on the rampage and cut this kind of swath through this particular area just north of the dam."

Well, we're stuck with the dam. We're stuck with it up there, and I can only say, Mr. Speaker, that I certainly hope that Hydro's engineers and technicians are more exacting in terms of their calculations with respect to the dam structure itself. What has the government done as a result of that tremendous washout that occurred on that creek? What kind of demands has the minister made on B.C. Hydro in terms of the damage to the fishery, in terms of greater efficiency, greater engineering attention being paid to those kinds of things? That kind of accident is going to have an impact on not only Revelstoke but the whole Arrow Lake chain - the area of Nakusp south of there - for years and years to come.

I don't know whether the House knows that after the Mica Dam was built we were promised a beautiful recreation reservoir on the perimeter of Revelstoke and Nakusp. What we've had, in fact, Mr. Speaker, for the last number of year's are the most incredible dust storms that anyone would ever see. In the place of a beautiful green valley that once was, we now have a reservoir subjected to a 40-ft. drawdown in the reservoir level and consequently the mud flats that follow that raising and lowering of the reservoir and consequent dust storms. It has adversely impacted on our tourist trade; it has certainly impacted on the enjoyment of that community when you have fine silk dust blowing through your doors and windows and into homes. I say to the minister: pick up a copy of the Revelstoke Review for this past week. There are no less than six letters directed to the editor of that local paper decrying the mess that has been made of the area, the fishery, the scenery, as a result of the development practices of this monolithic company, B.C. Hydro.

Government does have it in its power to control B.C. Hydro. It's a political dodge to say that's a corporation out of control. It is an agency and a creature of the government, and it is subject to the government's directives and policy, both through its chairman - the political man in Bonner - and directly through the need to obtain executive council sanction, both for policy decisions and for borrowing power which are essential to any new venture. I'm concerned that the government doesn't seem to have the will or the desire to exercise that 'Kind of control; I'm concerned that the government seems satisfied with following the political dodge of making the bad man and the bogey out of B.C. Hydro when the government themselves are in fact responsible and elected to giving a mandate to set policy directions in this province.

Finally, I do want to comment on the proposed Kootenay diversion.

HON. MR. WOLFE: You'd better call Digger. He sounds in bad shape.

MR. KING: No, I'm going to live, Mr. Speaker. But I tell you, many people in this province are in bad shape as a result of the ineptitude of the poor little Minister of Finance who I don't think even perceives the problems. I don't know whether he's left Vancouver or not to look around this province and to try and assess the impact of these giant developments. I doubt it. He knows how to finance Wolfe Motors, Mr. Speaker, and I suspect that he thinks his sole responsibility is to finance more borrowing for B.C. Hydro and to heck with the consequences. I don't think that's very responsible.

The Kootenay diversion thing is another classic example of Hydro's approach to major development, to major environmental impact, to major impact on fisheries, agricultural land and timber land. They proceed with their in-

[ Page 1724 ]

vestigation and they start putting out papers with a variety of options that might be pursued if a decision is made to proceed with the Kootenay diversion. But they don't tell the people of the province that a firm decision has been made and the people are left in the dark until finally the licence is applied for and all of a sudden there is a short, sharp public debate. The hearing, which is a formality, is held and away goes Hydro on yet another major development with the cursory rubber-stamp procedure which is the issuing of a water licence in this province today.

I tell you, Mr. Speaker, that there is a body of opposition growing in my particular area and throughout the Kootenays both east and west to the proposed Kootenay diversion which this government had better pay attention to. It is not going to be directed at B.C. Hydro, it is going to be directed to the governing party of this province which was elected to set policy and give leadership. They are going to be held accountable for that with respect to the Kootenay diversion question.

Everyone in that area who is concerned with the impacts we've already suffered, who is concerned about: the future of the Kootenay Lake, which is one of the last and most beautiful interior fresh-water lakes that is unpolluted and relatively free from major development, and certainly a haven for recreation boating and fishing and a tremendous attraction to the tourist industry.... Its destiny hangs in the balance with respect to the decision on the Kootenay diversion. If we divert water out of that system and as a consequence reduce the level of the Kootenay Lake, there is an impact on the temperature of the lake, there is a tremendous impact on the fishery - the particular species of that lake. I can tell you that one strain of rainbow trout in that area is absolutely peculiar to that area of Trout Lake and Kootenay Lake alone. Its value in terms of a resource and in terms of a contribution to the tourist trade in that area is incalculable.

I want to warn the government that if they follow the same process they have followed on other major developments with respect to the Kootenay diversion they are going to face a wave of public hostility and public reaction that is going to sweep this government right out of office - without question. And there is going to be demand for accountability not only of B.C. Hydro, but of governments to control them, to exercise their mandate and control agencies which are creatures of the government.

Mr. Speaker, these are the comments I offer, it and I hope the government does take it seriously. I certainly cannot support increased borrowing power for B.C. Hydro and Power Authority. I see no improved accountability. Until the government is prepared to come be fore the House dealing with those matters -expropriation powers, public accountability, the breaking down, as my colleague said, of that monolithic, vertically integrated structure and certainly some control and some public accountability in terms of the rate structures in this province - the opposition certainly cannot support this kind of increase in borrowing power.

MR. COCKE: I was pleased to hear the remarks of the last two speakers, my two colleagues, the member for Alberni (Mr. Skelly) and the member for Revelstoke-Slocan (Mr. King) . The member for Alberni did a great deal of indepth work in terms of the total situation. The member for Revelstoke-Slocan took a look at his own particular area and homed in on that.

I would just like to ask the question: when will the voracious appetite of our own Gargantua be satisfied? I can't believe Hydro. We're only asked today for $750 million! That's all we're asked for. We were told we're not even going up to $5 billion; we're $100 million short - almost $5 billion borrowed for that our own Gargantua. And we get exactly the same kind of paper today as we always get - all of the traditional forms of power development, and not a word about research. Out of $5 billion that company has spent virtually nothing on our future, and our future is in research, development of other sources of power. How many rivers are there to dam? How much coal is there to be burnt? How many Burrard thermal plants can you develop across the province?

There are needs in those areas, but I cannot support this bill because I don't see a corporation with any kind of future vision. I've listened to people in other jurisdictions discussing the desperate need for alternatives. The member for Alberni talked about wind, sun, solar power and other forms of power. What, for example, has been done in this province where geothermal development is a higher potential than in any other area in this country? They are developing geothermal power down in the United States. And what are the reasons they're doing that? It is because some of the energy corporations, some of the oil companies, have already made claims to the land where they suspect that geothermal power will be easy to secure. In British Columbia, when we were government, we insisted that Hydro lay

[ Page 1725 ]

claim to the land where geothermal power is a good potential. Nothing more has been done since. I see nothing in this paper suggesting that there are potential alternatives; I only see us going down this extremely expensive garden path.

What a smile one has to have on one's face, if one has any kind of sense of humour at all, when one listens to the arguments that this government brought forth subsequent to their election - about the debt that was left. And let's say that it was true. That debt was miniscule in terms of what we're looking at here - $5 billion, and we're no better off.

We're not developing the kinds of alternatives that are necessary for this province. We're not developing the kinds of alternatives that are absolutely essential for the future. Let's just think in terms of dams on any river system. Depending on the sedimentation rate, that dam eventually will become unusable because the lake will fill up and will become less and less an available source of power. Anything, for example, on the Fraser River system would be an utter disaster for the reason that there is a tremendous amount of sedimentation in that particular river system. All you have to do is look at the whole delta region of the lower mainland. That was all land that was placed there by that Fraser River system. You dam that river system up anywhere back and you're going to have that sedimentation occurring behind the dam.

We're going to have to think of other ways. Mr. Speaker, we've made mistakes. We'll all admit today there was a billion dollar mistake on the Columbia River, which incidentally would have brought this $4.9 billion down considerably. We might be discussing $3.9 billion had it not been for that fiasco. Let's not go into that history. Let's look at the future. if, out of $750 million, they can't raise a few million dollars to look at alternatives, then they're not being thoughtful about our future. They're going to leave their mistakes behind them. It's not our generation that has to pay this enormous bill to the extent that future generations are going to have to pay. That's where we're in trouble.

There are people right now in trouble in terms of paying their electric bills. I got a phone call from an old-age pensioner in my constituency the other day. This couple have a house which is 750 square feet. Their electric bill last year was $63. Guess what it is this year? It's over $90. That very generous Minister of Municipal Affairs a short while ago made a gesture to this couple. He increased their homeowner grant. Mind you, he didn't in crease the homeowner grants of those younger than 65 but he did increase their homeowner grant.

Hydro wiped it out. There's nothing left. They're going to have to pick up the increased educational costs in New Westminster because of this Gargantua with the voracious appetite that can't be satisfied. I suggest to you that it will never be satisfied as long as we keep going down the same path. How long to we have to inquire? How long do we have to ask them to set up some kind of research to do other kinds of power development?

They talk about the weeds in the Okanagan chain; at Cultus Lake they're worrying about the weeds. Why not harvest the weeds and extract methanol? I believe it's the plant with the highest methanol content - methyl hydrate, for those who are not familiar, a source of energy - of any plant, or certainly of most plants, in any event. There is none of that kind of work being done by this immense outfit, nothing imaginative.

[Mr. Rogers in the chair.]

I was at a conference in Prince Edward Island a couple of years ago. I listened to an engineer talking about this whole question. You know, he talked to an awful lot of people - a cross-section of parliamentarians. He said; "It's time we woke up. It's time every power corporation in North America and, for that matter, in the world woke up." This direction in which we are going is not endless. There is an end to the power development the way we're going. He said a fraction of what we spend today on power development should be spent on alternatives. Mr. Speaker, I see nothing here. All the traditional power development that we've seen year after year brings us now in this House to accept a debt of virtually $5 billion on behalf of one corporation. That corporation can be called nothing but Gargantua.

Mr. Speaker, there are alternatives, but there is not one cent in this particular document for any kind of research. If I could only see some development in terms of geothermal .... I would just like to say for those who are not too familiar with the development of geothermal power that it's the power that you get from super-heated steam below the earth's surface and above the earth's crust. Here it's very shallow; the earth's surface going down to the crust is quite shallow. If, for example, you went to the Prairies, you might have to go down to 20,000 or 40,000 or 50,000 feet. Here in some areas you don't have to go down very far at all. There are some refinements that are needed in the development of geother-

[ Page 1726 ]

mal power, but they are actually developing geothermal power in some parts of the world. In California there are a number of geothermal plants.

MR. MUSSALLEM: One.

MR. BARRETT: That's 100 per cent more than we've got here.

MR COCKE: There are a number.

New Zealand, Iceland.... But, Mr. Speaker, this is a kind of power that could be developed here. Now certainly you're not going to do too much in a short time, but you have to at least start. All you have to do is go to Harrison Hot Springs and you'll find that you're fairly close to the development of that kind of power right there. But it's all over our province. The overburden here is thin, and therefore I would think it's an excellent opportunity for us to really get in there.

The former government set up a process whereby the geothermal power sites have been claimed by Hydro. Thank heaven for at least that much thoughtfulness. That took the input of the former government. It never would have been done otherwise. But now having claimed that area, my suggestion is that we get on with doing what should be done automatically -the development of that power.

I'm delighted with only one aspect of what has happened around Hydro in the past few months. I'm delighted that finally the Energy Commission got through to them and they reduced their estimate of future need from 9 per cent down to roughly 6 per cent. I think, Mr. Speaker, that that says a lot for that Energy Commission. I'm delighted that the Energy Commission exists and hope that it is strengthened because everything that Hydro does they do with a vested interest. I feel that there has to be an outside authority with a great deal more muscle to tell Hydro what to do. Obviously this government isn't prepared to exercise any kind of muscle at all. They are prepared to accept the same old request for an increased amount of money without any government insistence upon having anything there outside of just the traditional power development.

Mr. Speaker, on behalf of the people in my area, we're repaying the bill; we're repaying the interest. Forty cents or more on every dollar we pay for power we are paying for old debts now. What are our kids and their kids going to be paying for the debt that we taking upon us today? When will it end? It will only be modified when we begin to become imaginative and start other thoughts in terms of power development. We are going down a very rough road in this particular bill.

MR. MUSSALLEM: The debate, as I've heard it so far today, would have been excellent had it been three or four years ago, because at that time you could justify the manufacture of electric power from the oil reserves of the world - cheap oil at $1 and $2 a barrel. But how anyone can stand in this House today and discuss and attempt to prove that we should not be developing this resource is almost tantamount to smashing British Columbia's future in the face.

As I see it, it is essential that we develop every possible form of water power that we can make available to us for the main reason that this is what we are talking about - thermal power. Water power is, in effect, thermal power. It is power from the sun. You may say it is indirectly that way, but it is truly that way. That is the way it's come, and that is the way it develops.

MR. BARRETT: On a point of order, there is not a quorum in the House, Mr. Speaker. I draw it to your attention that the House is no longer able to do business. There are not 10 MLAs in the House.

DEPUTY SPEAKER: In order to ascertain whether or not there is a quorum, I'm going to ring the division bells.

MR. BARRETT: Thank you.

DEPUTY SPEAKER: I can now see that there is a quorum. Would the member for Dewdney please proceed?

MR. BARRETT: On a point of order, Mr. Speaker, did you ring the bells to ascertain if there was a quorum?

DEPUTY SPEAKER: I did.

MR. BARRETT: Under what standing order was that?

DEPUTY SPEAKER: The reference is in Sir Erskine May under our established procedure. Quoting from the 18th edition: "After the House has been made to notice that 40 members..." - and this is the British book, so it doesn't apply for this House - "...are not present, the Speaker directs strangers to withdraw; the members are summoned by ringing the division bells." And that is precisely the procedure that we carried on.

MR. BARRETT: Strangers did not withdraw, Mr.

[ Page 1727 ]

Speaker - I'd point that out to you. Secondly, there is no appropriate standing order in our own rules here in this House. I ask you clearly under what standing order of our House you rang those bells.

DEPUTY SPEAKER: Under standing order 1, hon. member.

MR. BARRETT: Is that your ruling, Mr. Speaker?

DEPUTY SPEAKER: Hon. member, standing order I says that where our rules are silent -the rules of the British House of Commons apply.

MR. BARRETT: All right. Then I'd point out to you, Mr. Speaker, that the strangers did not leave the chamber.

DEPUTY SPEAKER: Regarding the question of the strangers in the chamber, if any member had chosen to bring that matter to the attention of the Speaker, the Speaker would ask the strangers to withdraw; however, it does not affect the quorum.

MR. BARRETT: Well, that's the reference that was given. Is that your ruling, Mr. Speaker?

DEPUTY SPEAKER: The ruling is on standing order 1.

Are you on a point of order? One moment, please, I must hear this point of order.

MR. BARRETT: I'm waiting for a ruling.

DEPUTY SPEAKER: There is a previous ruling that I can quote for the members' attention -if they care to give it now. It is from September 22,1977, when Mr. Lea rose on a point of order - namely, that Mr. Speaker's attention was drawn to the lack of quorum and the Speaker had forthwith to adjourn the House. Mr. Speaker ruled that upon notice having been taken that the quorum is not present, the division bell is rung and members are summoned as if for a division and after the expiration of the prescribed time the Speaker proceeds to count the House. Upon such count, if a quorum then be present, the business of the House then continues. The Speaker referred to the 16th edition of Sir Erskine May, page 331.

MR. SMITH: Thank you, Mr. Speaker. On a point of order....

MR. BARRETT: Thank you, Mr. Speaker. I accept that ruling. However, I would submit that the stranger should be asked to withdraw.

AN HON. MEMBER: Order! He doesn't have the floor.

DEPUTY SPEAKER: I have recognized the member for North Peace River on a point of order.

MR. SMITH: I draw to the Speaker's attention that our rules concerning the quorum are contained in rule 6. It says: "The presence of 10 members of the House, including Mr. Speaker...." I'm sorry that the hon. Leader of the Opposition is unable to count, because there were, indeed, 10 members including the Speaker at the time he drew it to your attention, sir.

MR. BARRETT: He rang the bell. If he wants to make an argument we'll have an argument over it.

DEPUTY SPEAKER: I must admit, hon. member, I neglected to count myself in my assessment. However, we now do seem to have....

MR. STEPHENS: On a point of order, Mr. Speaker, it is my submission that you did make a ruling that there was not a quorum, and therefore you rang the division bell.

DEPUTY SPEAKER: That is correct.

MR. STEPHENS: I would now ask that you follow the procedures in standing orders 6 and 7.

DEPUTY SPEAKER: Hon. member, all I did was attempt to ascertain whether or not we had a quorum. In order to do that I rang the division bell and we now have a quorum. Would the member for Dewdney wish to continue?

MR. MUSSALLEM: Yes, Mr. Speaker, I'd like to continue. A very interesting side debate, I must say. I'm rather surprised that at no time did we have less than 10 here including the Speaker. I'm surprised the hon. Leader of the Opposition would take that opportunity to delay the debate.

DEPUTY SPEAKER: Order, please, hon. member. We are discussing the principle of the bill. Therefore your last remarks would be out of order. Please continue.

MR. MUSSALLEM: I thank you. But, Mr. Speaker, I wanted to assure you that I attempted to get your attention on two occasions in a loud voice, saying: "Would you hear me on a point of order?" The Speaker did not hear me. I would have told you then, but now I tell you at this time.

[ Page 1728 ]

I proceed to gather my thoughts together and to wonder where I was. I was saying what a disaster it would be for British Columbia had we been listening to the members of the opposition during the days of the two-river policy. We would have been in darkness today. We would not have had postage stamp rates all over British Columbia where the people of the north buy power at the same price as the people in Victoria and Vancouver. Read the papers and see where they said this would be the great disaster that would overflow British Columbia, that we have power coming out of our ears and that we don't need this power.

What do we see today? If there was any way to obtain this power without borrowing money I would be all in favour of it, but there seems to be no way. Even with this Politics in Paradise.... Who wrote that?

Interjections.

MR. MUSSALLEM: I know. There's nothing wrong with that book. There are many good books. It was written by the Hon. Dr. McGeer - Politics in Paradise. That was his opinion in that day. Isn't it a good thing that we have differences of opinion and that we have different opinions? Without that, we wouldn't have a parliament. Without that, we wouldn't need to be here. That is democracy in action.

Even with the borrowing and the problems, today we have power at 7 and 8 mills. That's a magnificent record for B.C. Hydro. I'm not one of their advocates, but when business has been well done I've got to admit that it has been well done. The two-river policy and the Peace River: all these efforts brought together have created a paradise of power where power is available in British Columbia.

Our hon. member for New Westminster (Mr. Cocke) smiles as if to say: "You know, it's too bad he does not understand anything. It's too bad that he can be so naive when we know it all."

I want to refer to his alternatives: geothermal power and wind power. Wind power, yes!

MR. LOEWEN: They've got wind power!

MR. MUSSALLEM: But we don't have him in the right place at the right time.

He said to me in California they are experimenting with geothermal power. Yes, they are. In several places, he said. I know of one and it's a very small, mediocre development. It could never be very much. He says we've got power in the Prairies if we dig down 7,000 feet. Do you know how many miles that is? How ridiculous! Geothermal power may be available in Iceland but how do you get it aver here? In boxes a;d freeze it? There's no way. We've got to make the power where the power is.

What are the alternatives? Wind power? May I tell you about wind power? I tell you we haven't got it at the right place at the right time. If we had them there, it would help. But being as we do not have them at the right place at the right time, we have this. We would have a string of windmills all the way from Aklavik, wherever that is, pretty far north - that's up on the Arctic Ocean - Lo British Columbia. We would have to have a line of windmills all the way down unbroken to develop as much power as is developed from one generator at the Peace River Dam. That's wind power.

MR. BARBER: Who told you that?

MR. MUSSALLEM: See? -They throw little spears. "Who told you that?" He wants me to bring out the book and say "on such and such." There's no such page or verse. There's just logic and common sense. That's the thing that they lack - logic and common sense.

If we did not have the two-river policy and the policies that have been continued by this government, where would we be today? In darkness. Where would our jobs be? No jobs. Where would the north be? Where would the mills be? Where would all the development be? Fort Nelson, yes, on the great railway that goes there and will continue to go there. Now listen to me - I'm telling you that will not fail. Am I making a statement? I have never been told but I know that our forward policy will never let Fort Nelson down. No one told me. I'm guessing on the premise that this government is forward-looking and determined that British Columbia shall be the greatest province in Canada. Today it's the only place in Canada where we have a rise in employment. It's the only place in Canada where we have a rising economy. And in no mean measure is it because of hydro power that is available to us.

Today, if we had to buy power.... According to that party's principle we would be buying power, if we could buy it, but from where? We couldn't buy it because our customers to the south are trying to get it from us, and we do give them power and spare a bit. But if we had to buy power we would be paying anywhere from 20 to 30 mills. It would just defy....

MR. BARBER: Who told you that?

MR. MUSSALLEM: Who told me that? The same little toy spear paper dart. Who told me that? I know that British Columbia sells the same

[ Page 1729 ]

little toy spear paper dart - who told me that? I'll tell you who told me that. If you would want to read, it's the simplest little reading. I regret that they spend so much time on politics and power; if they'd read the little things, the unimportant things, they would see that British Columbia Hydro is selling power to the United States in interrupted lots, not by guarantee of contract, for 20 mills right now.

AN HON. MEMBER: Frozen?

MR. MUSSALLEM: No, not frozen at all. Free power. The Maritimes are buying power for 30 mills and that's what they would have in British Columbia, this great organization that says they know.

Let me go back to the hon. member for Revelstoke-Slocan (Mr. King) . There's a brilliant man; I have great respect for him. I rode with him in an airplane all the way from Edmonton one day. I was amazed at his knowledge. It was surprising to me because I learned a great deal. But I'll tell you about that amazing man; it's surprising to me that he knows so little about power. He was speaking about labour, and I give him credit. He was quite knowledgeable about the labour scene, I give him credit for that. Why should I detract from a man who has knowledge? He told me things about the labour problem in British Columbia that I never realized. It's a shame he didn't put them into action when he was the Minister of Labour.

I think there are forces within that party that do not allow people to put their principles into effect, because he had the opportunity of creating labour peace. His ideas are great, but what did they have? A war of such a size that was never seen in British Columbia's history before, when the Leader of the Opposition (Mr. Barrett) , then the Premier, had to order the people back to work with all the policies of that Minister of Labour.

How do you justify this? You justify it because there was no understanding. They have great theorists, but theories never developed power, theories never ran an engine or made a job. But let me tell you about this man. He knocks the dams, and I'm for the dams. I stand here and tell you I'm for them, because we need to develop every dam we can. But he says: "What damage does a little creek do?" Wait till the people of Trail hear this remark he made, the people of Trail who were saved from a disastrous flood in 1970 and 1974.

Did you ever hear such nonsense? Let the people of Trail hear that. I was addressing you, Mr. Speaker, not this rabble. Pardon me, 1 withdraw the word.

It's a strange thing that my friend from Revelstoke said - that B.C. Hydro makes an application for a water licence and has a rubber stamp effect. Now I am sorry to hear what I consider to be an intelligent man make a statement like that, because he either has to lack intelligence or be totally dishonest -he has to be one of those, and I would prefer not to think you're dishonest. So I'm in the peculiar position of not being able to reconcile the situation because he knows full well that Hydro goes through the eye of a needle to obtain a water licence; Hydro goes through the eye of a needle to attempt to get a coalburning licence at Hat Creek. It goes through a tremendous sitting, great hours of debate and consideration, with many intelligent and able people designing and proving that to British Columbia it is not a failure, that you can burn coal without polluting the atmosphere, proving that you can develop power without damaging the country.

For example, the McGregor diversion is an important diversion - I would have liked to have seen that diversion go through - but when it was found by our government that that diversion would affect the flow of water to the Peace. There are diseases in the fish -not the fish of the Arctic, but the fish in British Columbia - that might affect the Arctic fish, and for that reason, in favour of the ecology, that thing has been stopped. I hope that somehow that will come back, because it's important for the people of the Fraser Valley. I'm telling you this: the day will come - and it must come - when we in the lower Fraser Valley will be drifting out into the Gulf of Georgia on the roofs of our houses. That's the day that we're waiting for - the 100-year, 200-year flood. That will come.

Now if we could dam the McGregor and save two feet of water from cresting, then we would be safe in the Fraser Valley. It was a great help when we built the Nechako dam; we saved 10 per cent of the Fraser River water that was diverted into the sea. If we could control the water of the W. Gregor from going into the Fraser at a critical time, we could save a disaster that one day will happen to the Fraser Valley. You've got to make a decision: will it be fish or will it be people? That's the decision that has, to be made.

I say that Hydro is doing the right thing and Hydro is moving correctly when they move in the direction of creating dams - which is thermal power for the people of British Columbia - for without power we will be stagnant. Without our policy we would have failed. Our

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success today in British Columbia - because we have employment and a rising economy - is because we had foresight and have foresight today.

AN HON. MEMBER: Hear, hear!

[Mr. Speaker in the chair.]

MR. NICOLSON: Mr. Speaker, I have listened to this debate and I think that it is no laughing matter. It is a very serious matter of committing ourselves to another $750 million worth of debt. I certainly don't think the offerings from the government side have done justice to the seriousness of this bill which we are considering. The opposition has presented some very well researched concerns and, in order that this bill might be given the serious consideration that it deserves, I would move the following amendment to the motion: "that the bill be not now read a second time, but that the subject matter thereof be referred to the British Columbia Energy Commission."

MR. SPEAKER: The amendment appears to be in order. Please proceed.

MR. NICOLSON: Mr. Speaker, I feel that the subject matter of this bill, which really is the continued acceleration of the indebtedness of British Columbia Hydro, which is growing exponentially.... It is time that this bill which we tend to bring in annually with only the ' figures slightly changed.... As the minister has pointed out, it is actually one line longer this year. This bill has received assent in a very straightforward manner. It's not been traditional until last year that it be opposed.

Mr. Speaker, I have looked back to the year 1962 and looked at the actual authorized or projected debt of British Columbia Hydro and I've watched how it has grown. I have also created a model of exponential doubling on the basis of which it appears to double every four and a half years. It appears that it is doubling at an exponential rate. So I feel that the subject matter of this should be referred to the British Columbia Energy Commission where we have professional expertise outside of British Columbia Hydro where there is an alternate way of examining the very real concerns which have been said. Because no matter how well they are said by the member for Alberni or no matter how well they are said by the member for Revelstoke-Slocan or the member for New Westminster or indeed, by the member for Dewdney, we are really out of our depth in this Legislature when we start talking about the growth projections, the alternatives that we have in terms of pricing, the effects that these will have on supply and demand, on the growth of the nameplate capacity of British Columbia Hydro, on the growth of the entire generating and storage capacity and on where we are heading if we do not examine the whole business of price structuring within British Columbia Hydro.

Mr. Speaker, I circulated a monograph about a half a year ago. As a result of that, I suggested that just by looking at the growth of the nameplate capacity of B.C. Hydro, it would appear to me, and only to me, to be justified that if a moratorium were to take place for 10 years on new dam projects, we would have 10 years of breathing space. I do not mean that we would not install any new facilities. We would of course go ahead with the installation of further generating facilities in the Mica Dan as is outlined in the Securities and Exchange Commission report from British Columbia Hydro and Power Authority made on June 15,1977.

There's a schedule laid out in that. It tells of the proposed scheduling and the bringing on stream of the extra generators as they are needed at the Pend-d'Oreille project. It's already underway. It would be completed. And as additional energy was required, it could be supplied by increasing the nameplate capacity of the Pend-d'Oreille project, as outlined in B.C. Hydro's own report which they made to the Securities Commission.

The amazing thing about this is that it indicated that the growth of nameplate capacity as one indicator of demand took a very sudden jump and has grown at a very steady rate for several years. I have graphed this and I have distributed this. I have made it available to British Columbia Hydro. It was requested from British Columbia Hydro. It shows that in 1968, when the nameplate capacity of the system was almost identical to the peak one-hour demand - that is that day in January when it is very cold and everybody turns on a little bit of extra heat at the time when meals are being prepared and the industrial complex has not yet shut down - it did reach that dangerous situation where it was almost identical to the peak one-hour demand. That is the condition that creates brownouts.

In the year 1969, with the coming on stream of some new projects, the nameplate capacity was increased and there was a very comfortable margin of safety created. It remained considerably above the peak one-hour demand until the year 1977, when I believe that with the

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startup of the first generators from Mica and with the projected coming on stream of further generators from the Pend-d'Oreille project, without even going ahead with the Revelstoke Dam and with all of the things that are just not being completed, like Site 1, the Pendd'Oreille project and the additional generators at Mica, that timetable which is fairly firm to the year 1982.... We would have an excessive capacity to the year 1992. By looking at this one supply and demand factor -that is the peak one-hour demand and the nameplate capacity of this system - and the present growth trends projected on what has happened in the past decade, there would appear to be a justification for taking some time to look at something.

Now, Mr. Speaker, I wouldn't propose and I did not propose - but I don't complain as to how it was reported - that a moratorium be created on the basis of my investigation. I am a member of the Legislature. I am not an economist or an engineer. I just have some training in mathematics and physics, and I said in conclusion in this monograph that I would not suggest that this layman's analysis would justify an immediate cessation of all B.C. Hydro and thermoelectric development projects.

There appears, as a result of this analysis, to be a prima facie case which would justify the immediate calling of a public commission of inquiry into the electric utility operations of B.C. Hydro. That's what I hoped I could bring about, and I do not mean by that a referring of this to another legislative committee, and that is the Committee on Crown Corporations.

There is a real need to have some outside commission, and I don't think it should be headed by a judge. I do think that we have, right under our nose, the British Columbia Energy Commission. They should be given that opportunity to really look at some of the alternatives that could be proposed. I would hope as this debate goes on to propose and to give some idea of some of the things which we might look at. We might look at the application of marginal cost-pricing principles to British Columbia Hydro, as suggested by Sanford L. Osler in a paper with assistance from the Canada Council.

Mr. Speaker, I think that I would like during this debate to outline my concerns about some of the projections upon which our future building programmes are predicated and some of the facts which have come to light since those projections were made which would call for a drastic reappraisal, so that this very important subject could be given some of the consideration that it deserves, a $750 million - three-quarters of a billion dollars - assumption of further debt without any assurance that we are not going to have to come back here next session and be presented with a fait accompli.

Mr. Nicolson moves adjournment of the debate.

Motion approved.

MR. BARNES: With leave, I'd just like the House to give me an opportunity to introduce a few visitors.

MR. SPEAKER: It's out of the order of the day, but shall leave be granted?

Leave granted.

MR. BARNES: Mr. Speaker, we have with us this afternoon Dr. Richard Tolmie and his wife Laurice. Also we have some students from the girls' alternative school in Victoria with their teachers, Dama Hanks, Margaret Brown and David de Rosenroll. The students are Sandy Mead, Judith Pallel, Elizabeth 'MacPherson and Rena Anne Wray. There is also a visitor from the S.I.U. School of Medicine in Springfield, Illinois, Dr. Clifford Moore. I believe that concludes the list.

Hon. Mr. McClelland moves adjournment of the House.

Motion approved.

The House adjourned at 12:57 p.m.