[ Page 1733 ]

CONTENTS

Routine proceedings

Oral questions

BCR Fort Nelson extension. Mr. Barrett –– 1733

Meeting between Premier and Alaska governor on future of B.C. Rail. Mr. Barrett –– 1733

BCR Fort Nelson extension. Mr. Gibson –– 1734

Compulsory heroin addict treatment programme. Mr. Stephens –– 1734

Funding for independent schools. Mrs. Dailly –– 1734

Kelowna lap-sitting project. Mr. King –– 1735

Log dump in Cowichan estuary. Mrs. Wallace –– 1735

Meeting on Tantalus subdivision. Mr. Nicolson –– 1736

Provincial Home-owner Grant Amendment Act, 1978 (Bill 15) Committee stage.

On section 2. On the title.

Mr. Skelly 1736 Mr. Cocke –– 1737

Hon. Mr. Curtis 1737 Report and third reading –– 1738

British Columbia Hydro and Power Authority (1964) Amendment Act, 1978 (Bill 4) .

Second reading.

On the amendment. Division on the amendment –– 1748

Mr. Nicolson 1738 On the motion for second reading.

Mr. Barber 1740 Mr. Kerster –– 1749

Mr. Levi 1742 Mr. Barrett –– 1750

Mr. Cocke 1745 Hon. Mr. McGeer –– 1753

Hon. Mr. Wolfe 1746 Hon. Mr. Wolfe –– 1754

Mr. Gibson 1747 Division on second reading –– 1756

Heroin Treatment Act (Bill 18) Hon. Mr. McClelland.

Introduction and first reading –– 1756

Committee of Supply; Ministry of Health estimates.

On vote 125.

Hon. Mr. McClelland –– 1756

Mr. D'Arcy –– 1759

Hon. Mr. McClelland –– 1764

The House met at 2 p.m.

Prayers.

HON. MR. CURTIS: In your gallery today, sir, is Mrs. Peggy Shield of Saanich. I'm informed that this is her first visit to the Legislative Assembly and I trust that it will not be her last. Would the House make her welcome.

MRS. WALLACE: I have two schools visiting from Cowichan-Malahat today: the grade 7 students from Mill Bay Elementary School were in the precincts earlier today-, and at the present time the students from Queen of Angels School near Duncan are visiting. I would ask the House to join me in welcoming both groups.

HON. MR. BAWLF: Mr. Speaker, seated in the gallery today is Alderman Murray Glazier of the city of Victoria, who is also the city's chairman of finance and a member of the Capital Regional District board. I would ask the members to make him welcome.

MR. LEA: I would like to ask the members to join me in welcoming two of MY constituents from Prince Rupert, Margaret and Ray Gardiner, long-time hard workers for the New Democratic Party, and I would ask you to join me in making them welcome.

HON. MR. McCLELLAND: Mr. Speaker, I'd like the opportunity to introduce Dr. Norman Rigby, the director of the British Columbia Medical Association, who is here in anticipation that the Ministry of Health estimates might be up fairly soon. I understand he has to get back in a hurry, so he wishes to see them over as quickly as possible, as I do.

HON. MR. WILLIAMS: Mr. Speaker, in the gallery today we have students from the Howe Sound Secondary School in Squamish. These students are members of the Canada Club, here with their teachers. The students are new Canadians and they have come to see the Legislature in action. I trust the members will give them a welcome.

MR. SPEAKER: Hon. members, it doesn't happen very often, but the Chilliwack constituency is represented today by a school. The Vedder Junior Secondary School is here - 45 of its students accompanied by Mr. Gardner, their instructor. I would like the House to make them welcome.

Oral questions.

BCR FORT NELSON EXTENSION

MR. BARRETT: Mr. Speaker, I'd like to ask a question of the Minister of Economic Development. Is the minister aware that the B.C. Railway officials testified at the McKenzie royal commission hearings that the government's failure to place orders before March 1,1978, for material for the Fort Nelson extension will cost the taxpayers of British Columbia an additional $4 million?

HON. MR. PHILLIPS: I want to inform the House that at the board of directors meeting on Friday morning I was assured that the upgrading of the extension would not be lost due to any time element. It will proceed according to schedule at the costs that were originally estimated.

MR. BARRETT: A supplementary. Could the minister explain why the deadline of March I was given by the B.C. Railway officials at the royal commission, and what are the conditions that have altered that deadline?

HON. MR. PHILLIPS: Mr. Speaker, I haven't read all of the details of the submission made by the board of directors of that railway, but as I have explained to the House, this assurance was given to me at the board of directors meeting on Friday morning.

MR. BARRETT: A supplementary, Mr. Speaker. Would the minister be prepared to table with this house the original estimates and the reasons now given by the board that inflation won't be added to the projected costs because of the delay?

MR. SPEAKER: We cannot have the tabling of documents during question period, hon. members.

HON. MR. PHILLIPS: 111r. Speaker, as you know, we have said that there is a transportation policy being formed for cite province of British Columbia which will- take all aspects of transportation into consideration. In due course certain information will be tabled with the Legislature.

MEETING BETWEEN PREMIER AND ALASKA

GOVERNOR ON FUTURE OF B.C. RAIL

MR. BARRETT: I would like to ask the minister: since he is the only cabinet member who is on the B.C. Railway board of directors, why

[ Page 1734 ]

is it that the Premier is at a meeting with the governor of Alaska to discuss the future of that railway and has not invited the minister? Does the Premier know something that is already obvious to us?

HON. MR. PHILLIPS: I know there have been many things obvious to you in the past which haven't proven to be too right - for instance, the fact that there was no gas in the Grizzly Valley area. I could go on this afternoon but, since my estimates are through the House, I am going to be kind to the opposition. The Leader of the Opposition knows the Premier is in Alaska because he is also Minister of Energy, Transport and Communications in the province, and there will be a major decision made with regard to the way out. None of the board of directors is at that meeting. From my own standpoint, I realize that my presence is very necessary here in the Legislature. We did not want to take everybody to Alaska. However, I appreciate the member's concern for my wellbeing. I will take that into consideration.

BCR FORT NELSON EXTENSION

MR. GIBSON: My question is also to the Minister of Economic Development. Last Thursday, when on his estimates, the minister told us that his ministry had developed their own figures on the question of the continuation of the Fort Nelson line. I asked then if he would make those figures public, and he replied: "Certainly, in due course."

Now that the decision has been announced, due course, it seems to me, is here. In order that the public can better understand the implications of the decision, will the minister table his ministry's figures today?

MR. SPEAKER: We cannot table documents in question period, hon. members. The question is out of order in that it reflects upon future actions of a minister. Perhaps you have another question, hon. member.

MR. GIBSON: Perhaps I might put it this way: is it the minister's intention to table those documents today? I hope it is.

HON. MR. PHILLIPS: In answer to the members question, as I said previously this afternoon: in due course.

COMPULSORY HEROIN ADDICT

TREATMENT PROGRAMME

MR. STEPHENS: My question is to the

Attorney-General. Since the government is about to embark upon the expenditure of approximately $15 million towards the compulsory heroin addict programme, can he assure us that it is constitutionally sound and that this matter will not end up being reversed by the courts?

MR. SPEAKER: Hon. member, we cannot ask for a legal opinion in question period.

MR. STEPHENS: Let me ask a supplementary. I'd like to ask the Attorney-General just what he's done to satisfy himself that it's constitutionally sound.

FUNDING FOR

INDEPENDENT SCHOOLS

MRS. DAILLY: My question is to the Minister of Education. Can the minister assure this House that not one penny of taxpayers' money under the independent schools Act is being spent on anything other than non-capital education costs?

HON. MR. McGEER: Yes, Mr. Speaker.

MRS. DAILLY: A supplementary question to the minister. The answer was yes. According to press reports and according to a statement made by the minister to the press, he did not intend to interfere. So if you don't intend to interfere, how can you then show that you are being accountable to the taxpayer?

HON. MR. McGEER: Mr. Speaker, the inspector of independent schools is charged with the responsibility of evaluating the programmes that take place in the independent schools, and certifying whether or not they are eligible for group I classification or group 2 classification. As the member knows from the legislation that was passed during the last session, group I classification takes into account non-capital costs of an operating nature that do not include instruction, and group 2 includes instruction, and there is a formula by which payments will be made to the schools partially to cover the costs of those two facets of their operation.

MRS. DAILLY: One final supplementary to the minister. You are quite correct, of course. In the Act it states it must be used only for operational costs. My question, though, which I started with originally, and which the minister has not answered, is; how are you, as minister, going to ensure that the costs are going just for operational costs?

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HON. MR. McGEER: Mr. Chairman, as I explained to the member, we've got an inspector of independent schools whose duty it is to be certain that this is the case, and I have no doubt at all that he will be successful in his mission. The member should realize that independent schools are only going to be partially covered in their costs by the moneys made available by the provincial government. The average cost for people in the public school system is several times that which will be offered in the way of a government subsidy to the independent school.

KELOWNA LAP-SITTING PROJECT

MR. KING: Mr. Speaker, a question to the Minister of Recreation and Conservation. A report appeared in the May 8 edition of the Kelowna Courier and I quote briefly from it:

"A Canadian record was set in the outdoor lap sit event at the Fitness Festival held in Kelowna on Sunday. Before the festival officially got underway, 738 people successfully sat on each other's laps in the field at the Parkinson Recreation Centre. The lap sit was the highlight of the new games that Wendy Robertson, government co-ordinator for fitness festival, was hoping would set a record."

My question to the minister, Mr. Speaker, is: were any public funds beyond Wendy Robertson's $28,800 a year annual salary expended to organize the lap sit event?

HON. MR. BAWLF: Mr. Speaker will be aware from previous questions and answers in previous question periods that Mrs. Robertson is not earning $28,800 a year as the member opposite alleges. Furthermore, Mr. Speaker, the answer to the question regarding that rather brief event among a long slate of events, which included 3,000 people in the city of Kelowna running some three miles that day, is that the event that was called the lap sit did not require any funds from the province.

MR. SPEAKER: Order, please. Before we proceed, hon. members, perhaps I should remind the House and its members that the House adopted on February 27,1973, the guidelines for questions. Section 2 of those guidelines says that "facts on which a question is based may be set out briefly provided the member asking it makes himself responsible for their accuracy, but extracts from newspapers or books, quotations from speeches, et cetera, are not admissible." I'd just like to remind hon. members for their guidance.

MR. KING: Mr. Speaker, your instruction is appreciated. The minister has acknowledged the event. My next supplementary question to the minister is: did the minister or any of his cabinet colleagues participate in this lap sitting event in Kelowna?

HON. MR. BAWLF: The answer is no.

MR. KING: Final supplementary, Mr. Speaker. Can the minister explain the benefit of this exercise? Mr. Speaker, is it therapeutic? Is it psychological or simply because someone in Kelowna longs for paternal security?

MR. SPEAKER: Next question, please.

MR. GIBSON: Supplementary to the minister, Mr. Speaker. I wonder if the minister would agree that this programme was really a lapse in judgement. (Laughter.)

MR. SPEAKER: Does someone have a serious question?

LOG DUMP IN COWICHAN ESTUARY

MRS. WALLACE: This is to the Minister of the Environment. It relates to order-in-council 3339, which dealt with the task force in the Cowichan estuary.

That order-in-council says: "No person shall undertake any new or further construction, alteration, extension or renovation of any building or structure until an environment impact assessment has been made." Can the minister explain why Doman Industries has proceeded with the construction of a log dump, which was completed in February, while this order-in-council was dated November? This is an old-style log dump of the slide-in rather than the lift-off type. That log dump was being utilized up until May 26. 1 would like the minister's explanation of how this structure was able to go ahead in the face of this order-in-council.

HON. MR. NIELSEN: Mr. Speaker, presumably if that went ahead, it was in violation of the order-in-council. I believe Doman's was advised to cease and desist in undertaking any of that. I believe they were advised to cease and desist in this matter, if this is the one the member is speaking of.

MRS. WALLACE: Yes, I believe that is correct. They were advised to cease and desist. But I understand that as of May 26, they were still dumping as much as 40 loads a day during the week and 100 loads a day on the weekend up

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until last Saturday.

What is the minister prepared to do to ensure that this cease-and-desist order is complied with?

HON. MR. NIELSEN: Mr. Speaker, since this is the first time the member has brought this to my attention, we'll investigate the matter to see if her statements and conclusions are correct. If they are, we shall proceed under the order-in-council as law permits.

MEETING ON

TANTALUS SUBDIVISION

MR. NICOLSON: A question to the Minister of Municipal Affairs and Housing. I would like to ask the minister if there is to be a meeting concerning the Tantalus subdivision. If so, where and when will it be held?

HON. MR. CURTIS: Yes, I believe I indicated in the debate on my estimates that such a meeting was scheduled. It is scheduled for June 2 in Victoria. I'm afraid I can't provide the precise location in the legislative precinct to the member.

MR. NICOLSON: I would ask the minister if the owners have been invited to this meeting.

HON. MR. CURTIS: Initially, probably not, but certainly the representatives of owners are welcome to the meeting. I am in no way inclined, other than through the space limitations of one of the committee rooms or sow similar location, to limit the numbers who attend the meeting.

MR. LEA: I'm going to ask leave of the House.

Motion 15 on the order paper, dealing with the maintenance of the present international boundary at 54'40" and Dixon Entrance, is quickly drawing to an emergency situation. The negotiations are quickly coming to an end between Canada and the United States, and I'd like to ask leave of the House to discuss motion 15 standing on the order paper in my name.

Leave not granted.

Orders of the day.

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

Leave granted.

PROVINCIAL HOME-OWNER

GRANT AMENDMENT ACT, 1978

The House in committee on Bill 15; Mr. Rogers in the chair.

Section 1 approved.

On section 2.

MR. SKELLY: Mr. Chairman, on Friday when we initiated discussion on second reading, I mentioned the concern that I have on this section of the bill - that it excludes some handicapped people from coverage who would otherwise be covered if there were changes in the regulations under the Guaranteed Available Income for Need Act. So I have submitted an amendment which reads as follows:

"To insert after the words 'income assistance' in section 2 at line 3 the words 'persons between the ages of 60 and 64 in receipt of age benefits under the Guaranteed Available Income for Need Act who, in the opinion of the Minister of Human Resources, would be entitled to handicapped persons' income assistance if they were under the age of 60 years.'

I would move that amendment.

MR. CHAIRMAN: Just one moment, please. Hon. member, your amendment, if passed, would be unintelligible from its straight language point of view, and therefore it is out of order.

MR. SKELLY: I'd appreciate an explanation of it.

MR. CHAIRMAN: The amendment is out of order.

MR. SKELLY: Out of order in what way?

MR. CHAIRMAN: It's unintelligible.

MR. SKELLY: Is that because the Chairman can't understand it? I think the minister probably understands it and would probably accept it. Perhaps if I read it in context....

MR. CHAIRMAN: I think, hon. member, if you take the opportunity to review your amendment it will be readily apparent to you that it doesn't make sense. It would render the whole of subsection (2) unintelligible.

MR. SKELLY: In order to make it intelligible to you, Mr. Chairman, allow me to read subsection (2) with that Section included.

[ Page 1737 ]

HON. MR. McCLELLAND: It's out of order.

MR. SKELLY: The Minister of Health says it is out of order but he doesn't explain why. He hasn't read it.

MR. CHAIRMAN: It's possible you may wish to submit another amendment but, as I see it from the Chair, it's out of order on the basis of it being unintelligible.

MR. SKELLY: Allow me Lo read the section with that part included, Mr. Chairman. It will then become entirely clear to you.

As it presently reads, the section covers applicants.... You're absolutely right, Mr. Chairman. I withdraw that amendment. (Laughter.)

HON. MR. CURTIS: Mr. Chairman, you've ruled an amendment out of order, but it is correct that within the context of this section.... The other day the member for Alberni advanced a proposition with which I am in general agreement. I cannot today guarantee the committee that we will be able to do this without legislation but there is a reasonable degree of certainty that in fact that can be done, and I so indicated on Friday last. Therefore, I am not speaking to an amendment which has been rejected but rather to a point which was made in second reading and which bears on this particular section.

MR. SKELLY: This is embarrassing. It's not very often that you have to go through this.

As the legislation now stands, I wonder if the minister could explain if it will be possible to include this group as quickly as possible under the new homeowner grant legislation. They are suffering as a result of last year's taxation problems. Many of them are being forced to pay that minimum of $50 nominal tax and they are not entitled to the extra $200. It is really a problem that should be solved now.

For months now, the Minister of Human Resources (Hon. Mr. Vander Zalm) has been sitting on what he calls a policy problem and has refused to deal with it. In the meantime, many people in that 60 to 64 age bracket are suffering.

The intent of the amendment was worthwhile even though the wording became confused; I admit to that.

Is there any way that the minister can speed up this procedure so that those people are covered and possibly covered retroactively? When is he willing to consider this change?

HON. MR. CURTIS: I would hope that we can undertake this particular change and that it could be done quickly. 1 think it would be rather foolish of me to give the kind of undertaking with respect to date. I want to do what the member has suggested - indeed, what has been suggested previously. I shall direct staff to research it as thoroughly as possible in order to achieve that which more than one person seeks in this committee.

MR. SKELLY: There is an interesting report on taxation done by the National Council of Welfare about how the burden is unequally imposed on the poor and how the costs are unequally shared. In a programme like this it seems that we should seek a kind of universality maybe through income tax credits so that it is based upon ability to pay. I think there should be some percentage of the value of the home that for tax purposes should be waived or exempted, and the balance should be based on ability to pay.

We seem to be going in precisely the opposite direction in this section by exempting certain specific groups and making the tax burden different based on whether they are handicapped or whether they were serving in a war or something like this. There should be some kind of policy direction where we are taxing people based upon their ability to pay and sharing the benefits with people based on their socio-economic status. It seems that in this homeowner grant we are going in the opposite direction. I had hoped the minister would consider that broad policy area.

Sections 2 to 5 inclusive approved.

MR. COCKE: Mr. Chairman, just to reiterate what I said when the bill was introduced for second reading, the title indicates that this is an amendment to the homeowner grant. I would reiterate the fact the title is a little bit misleading in that respect. It doesn't amend the Act the way it should amend the Act - that is, for all the people in British Columbia - it leaves all those people who are being hit with high homeowner taxes out of the purview of this bill and only bests the increase on the old age pensioners. Incidentally, B.C. Hydro has taken that away from them.

Title approved.

HON. MR. CURTIS: Mr. Speaker, I move the committee rise and report the bill complete without amendment.

[ Page 1738 ]

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 15, Provincial Home-owner Grant Amendment Act, 1978, reported complete without amendment, read a third time and passed.

HON. MR. McCLELLAND: Adjourned debate on second reading of Bill 4.

BRITISH COLUMBIA HYDRO AND POWER

AUTHORITY (1964) AMENDMENT ACT, 1978

(continued)

MR. NICOLSON: Mr. Speaker, the amendment which we have before us, if considered and if accepted by the government majority, could bring a saving to the people of British Columbia of $5.9 billion. It's a very serious and very genuinely offered amendment.

I would draw the attention once again of the House to the study applications of marginal cost pricing principles to B.C. Hydro by Sanford L. Osler, Department of Economics, University of British Columbia, done under their programme for natural resource economics, financed by the Canada Council. In the abstract of this work - which unfortunately there isn't enough time to read into the record of the House - it says: "Under the median elasticity estimates, the rate structure reform reduces electrical growth rate from 9 per cent to 7 per cent in 1976 to 1990, reduces average real accounting costs from 18.1 to 16.5 mills per kilowatt hour and reduces the gross debt outstanding in 1990 from 17.1 billion to 11.2 billion historic dollars." That is a potential saving of $5.9 billion.

We find that British Columbia Hydro, when the directors are questioned about what direction they're going in, say that any such change in pricing structure would have to come as a result of a political decision. When we talk to the politicians that are in charge, they claim that Hydro is.... Some of them even say that it is out of control, as the Premier did when he as in Cranbrook. Something is out of control. I think it is the government which is refusing to take charge in Hydro, refusing to give it the kind of policy direction that it needs.

The present pricing structure of B.C. Hydro is one which has three basic classes: residential, the normal commercial type of usage and the bulk consumer. The minister, in handing out some second reading notes, has told us where the money is going to be spent: Site 1, the Seven-Mile project, Revelstoke, Hat Creek,

Mica, and miscellaneous trucks and gas facilities and so on. We see that the bulk of this expenditure is slated for hydro-electric generation. He talks about the expansion programme which 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 million kilowatt hours in 1976-77 to 52,340 million kilowatt hours in 1987-88. He says that this is going to necessitate these borrowings.

I wonder if the minister knows the answer to this question. Who is going to take up this increased demand? Who are we increasing the capability for? Are we increasing it for the residential customer, for the commercial customer, or for the bulk user?

Again, according to the information which Mr. Osler was able to obtain from within B.C. Hydro, it appears that two-thirds of this is going to supply the needs of the bulk users, and the bulk users are about 50 in number -the greatest part of the electricity used in that manner. The bulk users take in electric power at about 60,000 volts - very high voltage, and they have their own transformation facilities - and yet we have been selling them power at extremely low rates. I believe I recall the figure as being three-tenths of a cent, and I understand that it is to be doubled somewhat.

But the whole present pricing structure of B.C. Hydro will dictate that the bulk users will continue to use this type of power and will have a disincentive to seek any other type of energy utilization, such as using up hog-fuel - which is presently just using waste products in sawmills. A great number of these bulk users are sawmills and pulp mills and, rather than using their waste products in terms of hog-fuel and generating their own electrical needs, there is a disincentive because we are subsidizing those operations.

Mr. Osler suggests in this paper that it might even be well if we were to bring up our prices - a marginal price to equal marginal costs for each of the three basic user groups; that we would have a very substantial impact on demand; that there would be an incentive to utilize other forms of energy, and that we could actually reduce the borrowing needs by 1990 by $5.9 billion.

All that this amendment is asking the government to do is to not read this bill a second time now but refer the subject matter of this bill to the B.C. Energy Commission for that little bit of delay, that little bit of buying time. We could start to consider other alternatives. We could look at the pricing structure of B.C. Hydro and see whether it is

[ Page 1739 ]

not indeed subsidizing certain industries. If it is decided that it is necessary to subsidize those industries, then they should at least be forced to pay the full price for hydro, and then incentives could be given to them to convert to other, energy-saving types of energy utilization.

The concept of marginal cost pricing - and fitting it to marginal cost - is a little bit complicated. But suffice it to say that various sub-routines were set up on a computer and various types of variations were fed into it. It's very obvious that, if you start to charge bulk users the true cost of generating electricity, they might be forced to make other, more economic decisions for themselves. It wouldn't be proposed that this be done overnight, but if this were done in a systematic way, it would have an effect on demand. It could cut down demand; it could cut down the indebtedness, cut down the borrowing, and it could also lead to some very interesting side benefits for the residential user.

Also, of course, within our whole price structure, is the fact that we have a surcharge for residential hydro customers of, I think, about $3. Beyond that, we have a certain basic rate and then we have a lower rate once you get beyond a certain minimum consumption of power. That also is something that could be called into question. Now the impact on the customers of using this type of marginal price structuring is that, if there is no structural reform, the cost to residential customers in the years 1981 ' to 1990 would be $6.5 billion; $7.5 billion to the general customer - and that is the commercial user - and $4.1 billion to the bulk user.

With full marginal cost pricing we could see a reduction in the cost to the residential user and indeed, using the base case - that is a very pure and simple application - we could see that for the residential user there could be a decrease of 26.2 per cent in terms of the revenues that would be taken from that sector. In fact, there could be reductions in every class. With full marginal cost pricing, there would be in the short term a large increase to the bulk user, but in the long run we would be able to reduce our capital requirements by $5.9 billion.

One of the sidelights of this type of capital borrowing is that we know that the federal government has been borrowing similar amounts in order to shore up the Canadian dollar. It would appear that if we go to the market and we borrow the $750 million that we're authorizing this year, it will actually help to bolster the Canadian dollar. It will be at counter-purposes to our export economy here in

British Columbia and it would actually have a hindering effect on our lumber and pulp industry. Yet the amounts that we're talking about borrowing in Foreign markets are of an order in which they could actually have an impact. I mention that just as an aside, but it is something which, again, is mentioned in this paper.

What we can see by looking at this as just one alternative is that some reconsideration of the whole pricing structure of B.C. Hydro, according to this very sophisticated paper, can have an impact of reducing the capital requirements for B.C. Hydro by about one-third by the year 1990. So let's have the B.C. Energy Commission look at papers such as this one put forward by Mr. Sanford Osler of the University of British Columbia.

Also, Mr. Speaker, another thing which I think should be looked at is the projections upon which B.C. Hydro predicates its future demand. It appears that this book is no longer open to the right page, so I might have to go by memory, but suffice it to say that in the 1975 study, "B.C. Hydro and Power Authority Alternatives" - and I know that they have since reduced these and modified these projections slightly, but not very much - the population growth on which they predicated future demand was at a rate of 3 per cent. The performance since that study came down for 197677 is 1.4 per cent and 1.3 per cent, less than half. If you can delay the bringing on stream of one of these major projects by even one year, it does not - contrary to some of the things that have been said - just inflate costs because inflation goes up. There is no real saving in proceeding prematurely with one of these hydro-electric projects. If that were the case, we'd bill them all next year, wouldn't we? But in fact, there can be a considerable saving of dollars if we can delay some of these projects by one or two years. Already, population growth has run at 1.4 per cent and then down to 1.3 per cent last year, as opposed to the population growth figures in the B.C. Hydro alternatives report of 3 per cent, so we're running at less than half of that rate.

The gross provincial product performed not at 5.9 per cent, as predicted in this report, but at 4.3 per cent. I think this year Minister of Economic Development's department is projecting 4.8 per cent, not 5.9 per cent. So if we were to look at some of these projections, and have the British Columbia Energy Commission look, and just recompute the baseline, we could also find some potential savings by coming up with a new schedule, and not have it done by B.C. Hydro. It has to be

[ Page 1740 ]

done by some outside source. I believe that the British Columbia Energy Commission is the fastest thing which could respond in a reasonable period of time to this.

Mr. Speaker, I have worked out many different graphs on potential rates of growth, and I've worked out the rates of growth of some of these projection figures, and I've plotted them against some of the actual performance. I've plotted various rates of population growth and various rates of growth in the gross provincial product. It appears that the rate of population growth has really levelled off, month by month or quarter by quarter, according to Statistics Canada. It has been a very consistent rate of growth down around the 1.3 per cent per annum rate, and that, as I say, has tended to be very steady over each quarter for which Statistics Canada reports.

With these things, and with the enormous amount of money that we're considering here, I am sure that the minister cannot confirm or deny when he sums up in this debate on second reading whether or not two-thirds of our energy demand that we're looking at is going to go to serve the needs of the bulk users as put forward in Mr. Osler's report. If that's the case, then surely there would be a reason to re-examine the pricing structure right out of hand.

I'm proposing a very simple, a very conservative, a very small consideration, and that is that the bill not be read a second time, that we not immediately proceed to marginal cost pricing, that we not immediately proceed, as I said the other day, to where I believe we could actually have a 10-year moratorium without a blackout. Even B.C. Hydro is projecting its growth rate predicated on the fact that we have only one power shortage per 10 years. if we have a power shortage, what happens? You force the bulk users to shut down for a few hours. That's what happens.

Mr. Speaker, in my riding, in the case of natural gas, that was the rule. We used to have to close down Kootenay Forest Products and Cominco and Can-Gel for years because the old British Columbia Energy Commission, the PUC, wouldn't allow them to build a gas linkup with Alberta and Southern Gas pipeline. It didn't completely cripple the economy. That used to happen every year. B.C. Hydro's safety margin, according to them, is that we have a power shortage no more than once every 10 years. If you overbuild something that much, I think that we should know what the cost of that overbuilding is.

How much does that mean to the residential user who's having to pay surcharges and 20 per cent and 30 per cent increases in Hydro rates every year when other things are being held down? Is the residential user really, as I believe, subsidizing the bulk user? Are we going into this huge overexpansion, as I believe we are, to provide hydro-electric power for bulk users who already have an energy source readily at hand and would use it only if it were made economically feasible to do otherwise? As long as we are going to give them this bulk power, there will be no incentive for them to utilize hog fuel, and so we will tend to see hog fuel plants being built in areas served by power utilities such as West Kootenay Power, but we won't see them in areas where they are served by B.C. Hydro.

Mr. Speaker, I've enjoyed the rapt attention you've given to me during speaking to this amendment.

Interjection.

MR. NICOLSON: The member for Esquimalt (Mr. Kahl) is still sore because he thought that this motion was out of order, but if he would study his rules he would learn. The member for Esquimalt isn't interested in saving the people of this province $5.9 billion. He wants to see....

Interjections.

MR. SPEAKER: Order, please.

MR. NICOLSON: Well, Mr. Speaker, I am quite concerned. I think that the minister has shown a great deal of attention also during this debate because I am sure that he is concerned about whether or not we increase our borrowing. We're talking right now about going up to about $4.9 billion total, and yet just a little bit beyond one decade, in about 12 years, we could be looking at a saving of $5.9 billion, more than we're even in debt or going to be in debt if we go up to the full authorization of this bill. That is according to a very serious report.

Here is a very modest request, a very modest proposal, Mr. Speaker: let's not read this bill a second time now; let's refer it to the British Columbia Energy Commission.

MR. BARBER: Mr. Speaker, in my own opinion there are three significant reasons to support the motion put forward by my colleague for Nelson-Creston (Mr. Nicolson) to refer this proposal to increase Hydro's borrowing authority to the B.C. Energy Commission. The committee is aware that if this bill goes through in its present form, we will be in debt, thanks to B.C. Hydro, to the tune of $4.9 billion by

[ Page 1741 ]

the end of this fiscal year. The committee can further anticipate - and Hydro makes no secret of it - that it is likely that our indebtedness at the end of the next fiscal year, if everything remains the same as it has in the last seven, will be $6 billion, thanks to B.C. Hydro.

We are arguing today that the assumption this year of $4.9 billion and the likelihood next year of $6 billion of debt is so grave and serious a matter that this House must adopt a unique remedy to come to grips with it. We will never get out of debt to B.C. Hydro; this province will be indebted, thanks to Hydro, forever, because of the fiscal and the planning and the spending policies of that corporation.

One of the reasons why I personally believe this amendment is a worthwhile and an intelligent and a conservative approach is because I too am afraid of that kind of permanent, impairing indebtedness. We will never, ever get out of debt, thanks to B.C. Hydro. There are, as I said, in my own opinion three significant and valuable reasons, three very conservative approaches that could be taken, all of which support the motion put forward by my colleague.

The first reason is that in a special sense this Legislature is incompetent to deal with Hydro's spending plans. It is simply incompetent because no one knows enough, and that most certainly includes the government. This Legislature is competent to ask important questions; this Legislature is not competent to provide the answers. There is no one, to my knowledge, from Hydro on the floor today. Its chairman is not here; its chief financial officers are not here; its budget and fiscal officers are not here. Those who study Hydro's indebtedness within Hydro are not here either.

One of the problems of this archaic, obsolete House of ours is that we don't have the opportunity to examine in detail the important spending programmes of the major Crown corporations; all we have is this committee and it too is inadequate. We know roughly and crudely what the important questions are; we do not have anything like the answers. And for me the first reason why this amendment makes great sense is that it recognizes that special area of incompetence that all of us suffer under, because all we know is the questions to ask and we never, ever hear the answers.

Let me illustrate, if I may. On Friday, our keynote speaker, the member for Alberni (Mr. Skelly) , gave what was in my opinion one of the most well-researched, detailed, thoughtful and critical speeches this House has ever heard on the nature of Hydro. It was, I think, a brilliant speech. The member spent literally dozens upon dozens of hours raising those valuable, intimate looks at Hydro that must be raised, that must be asked. He had probed in a thoughtful, clear and scientific way some of the present and some of the likely problems of this corporation. He asked question after question after question about means of valuation, about means of providing alternate power, about means of creating vertically and horizontally new structures within the corporation itself. He asked question after question about alternate means of power generation. He asked question after question about new means of financing Hydro from its own revenues and from borrowings. The member for Alberni did a brilliant job of raising those questions and deserves the congratulations from every member of this Legislature for having done so.

We have not heard the answers from the government, nor, I expect, will we. They too suffer under the particular problem, which is that Hydro itself is almost unmanageable by this or any other government. This Legislature is a very good place to ask the questions; it is a very poor place to obtain the answers.

There is another institution. It is called the British Columbia Energy Commission and it was established by the previous government precisely for the purpose of allowing another voice, another point of view and a somewhat less self-interested agency to take a crucial, close look at Hydro's plans and proposals. Surely that less self-interested agency, with the staff and the answers at its command, real and potential, should be asked to take a look at what we're doing. That's the first reason.

There is a second reason why, in my personal opinion, this motion should be accepted by the House. It's an important question of public policy. It revolves around the question of public ownership and it's a matter of particular concern in my own party. The reason why it concerns us is because many people active in the democratic socialist movement in this province for many, many years have believed that if only the people owned the great corporations, the commanding heights of the economy, then that alone would be adequate to solve the problems of directing capital in such a fashion as to employ all of the people doing good work for all of the rest of the people. And for a long time, socialist thinkers have concluded that all we need to do is have title to these corporations and that solves the problem. Well, in my opinion, they were wrong, they are wrong, and B.C. Hydro is the best example I can give of it.

B.C. Hydro was not socialized or nationalized by our administration; it was socialized

[ Page 1742 ]

by the previous Social Credit government. It was taken; it was nationalized forcibly by W.A.C. Bennett. It was nationalized brutally by W.A.C. Bennett. As you know, there was a long court case about it.

One of the lessons of this has been - to my own party in particular - that simply owning publicly an enterprise like Hydro does not mean you control it publicly, that having title is by no means adequate to the job. What you must also control is information, priorities, and planning. What you must also develop are sensitive new means of making Hydro accountable to the people in the communities that it serves. The old socialist thinkers were - in my personal opinion - wrong because they thought that the job would be done when we owned Hydro. The fact is we own Hydro and the job hasn't been done at all; we don't control it.

The second good reason is that question of public policy which suggests ownership is not enough. Control in sensitive, subtle and new ways is in fact the bargain that must now be hammered out with Hydro. This Legislature, once again, is not competent to exercise that control. We don't know-enough, we are not told enough, and what we are told is frequently self-serving and misleading.

That brings me to the third reason why I support the motion of my colleague for Nelson-Creston (Mr. Nicolson) . Hydro is in a position of a desperate conflict of interest. Hydro, in order to justify itself for years past and past promises of growth and growth performance, must continue in years to come to deliver on that, whether or not we actually need growth, whether or not the performance is actually necessary. Hydro is in a position of conflict of interest and in a special sense cannot be believed when they make these proposals. The government itself tells us that they did not believe Hydro either, and claims to have cut Hydro's borrowing requests this year from roughly $1 billion to roughly threequarters of a billion. The government didn't even believe Robert Bonner - its friend, Robert Bonner, Q.C., at the head of Hydro -when he said he needed all the money he needed this year; in fact, the government cut it back.

We too on this side of the House are suspicious. As my colleague for Alberni (Mr. Skelly) pointed out masterfully on Friday: "Hydro can't have it both ways. Hydro can't tell us how conservatively and cautiously they are dealing with the public purse, how much they care to do so, and then turn around and be exposed as deliberately and arbitrarily inflating rough projections. They were exposed last year and the year before last, when the B.C. Energy Commission - that other, less self-interested voice - said: "Hold on, Hydro, we've done some calculations too. We've taken a look at the same base figures and we've drawn some very different conclusions. And we think you're wrong." Last year Hydro admitted it was wrong and reduced its projections. This year it may well prove they are wrong again.

The self-fulfilling prophecies that victimize Hydro victimize the whole people. This year it's $4.9 billion in debt; next year it will likely be $6 billion. Well, I for one propose not to pay for that, because I don't believe for a moment that Hydro has told the whole story nor sought by any means to explore the whole range of alternatives that exist. Hydro continues in a very conventional, ordinary, witless and unimaginative fashion to do what it has always done. That is simply unacceptable; we cannot afford it any more; we couldn't afford it to begin with; we can afford it fiscally even less today.

At the very least there are three valuable reasons - conservative reasons - why this massive increase in borrowing should be rejected by this House at this time and why the question should be referred to the B.C. Energy Commission instead. We can ask the questions here, but we get no answers at all, and we're not likely to.

Secondly, the question of public ownership and public direction of Hydro has never been resolved. In the minds of those of us on this side of the House who have long been concerned about public ownership, we're not at all satisfied that public ownership nowadays means public control. In the case of Hydro it is obvious it does not.

Thirdly, Hydro is in a position of conflict of interest that cannot be remedied by Hydro itself. The voice, the alternative information, the alternate pole to which we should look for advice and guidance is the Energy Commission. I cannot understand why the government - if it does - will ref use this motion. As far as I'm concerned, they have everything to gain by seeking another opinion. They have everything to gain by cautiously and conservatively refusing to give in to Hydro's ever-increasing avariciousness and ever-increasing public debt. The position we've taken finally is, indeed, a very conservative and cautious one. We hope the government joins us in it, and I personally hope the government supports the motion of my colleague for Nelson-Creston.

MR. LEVI: For the last six months I, along with other members of this House, have been

[ Page 1743 ]

involved in an attempt to get a grasp of what goes on in B.C. Hydro through a committee of this House. I think in six months we have learned the enormity of the task that we took on, and we are also aware that, once you start asking questions in respect to an operation like this, you can be literally drowned in an avalanche of information that is always forthcoming. The recommendation and amendment by my colleague for Nelson-Creston is that we give it to someone who, in the first instance, is better suited to an analysis of what goes on in terms of B.C. Hydro.

The history of Hydro in respect to this province has been that it started out as an instrument of political policy. It was needed by a previous Premier in order to carry out some of the vision that he had for the province. That vision was carried out in what now begins to appear a very vivid fashion, without any regard at all for the financial consequences to the province in the future.

We now know that this Hydro, which is really a hydra-headed monster, an incredible operation, is going to every year request increases from the government. When the minister introduces the legislation, he's asking for the money, and he says: "This will cover estimated borrowings by British Columbia Hydro and Power Authority for approximately one year." It boggles the mind. Three-quarters of a billion dollars, and that's what they need for approximately one year. Presumably, this time next year we will be going through the same kind of operation. The minister's interest in the bill will simply reduce to how small the bill can be when he brings it in so that it looks somewhat invisible. However, by next year we might be in a little better position than we are now to offer some analysis.

In terms of referring it to the B.C. Energy Commission, we need to ask some very pertinent questions about B.C. Hydro and about the energy policy of this province. The Energy Commission has attempted in previous reports to outline this policy. But in practice the energy policy of this province is not in the hands of the government; it is in the hands of Hydro. That is one of the problems. Really, when it comes to Hydro, this chamber is really a puppet chamber. We simply are here to respond to what they say they need. We do it, as we have done in the past, very quickly to pass it, to get it out of the way. Most people have been somewhat fatalistic about Hydro. They come and they ask you about money and you say: "Well, how can you refuse?" I think that this amendment serves notice on Hydro and should serve notice on the members of this House that we can no longer take for granted the requests that Hydro makes. If we are going to make grants in this House as legislators and we are the final arbiters of expenditures of government money in this province and of all moneys that are guaranteed by the government, we want to have a great deal more information than the minister gave us when he introduced the bill.

Again, I suppose, he's in a learning stance. The minister is on the board of Hydro. We would hope that after a few months he will become much more knowledgeable about what goes on in Hydro. He's in a very difficult situation. He's the Minister of Finance of the province and he's a member of the board, so he has to talk to himself about agreeing to bring in the bill. As a director, he says to himself: "We need $750 million. Are you prepared to approve it?" Then he puts on the other hat and says: "Yes, of course." Well, that's a very difficult situation for anybody to be in. The minister, Mr. Speaker, is in a conflict-of-interest situation. He really shouldn't be sitting on the board because he cannot arrive at a rational decision if he sits on the board that's requesting three-quarters of a billion dollars which he, in fact, has to recommend to cabinet for approval. So he's in a conflict-of-interest situation. So he should remove any suggestion of a conflict-of-interest situation by the minister and look at recommendations in terms of what is needed by an outside body. Because the government over there is fond of saying that Crown corporations are at arm's length. But as soon as the Minister of Finance goes on the board, they're not at am's length any more, they're embraced.

So the logic is that if we're going to have an arm's length operation and we're going to have an am's length opinion, then we must look at a body like the Energy Commission to do the analysis and to make the recommendations to this House. That's through public reports, reports which they publish from time to time on the basis of the operation. That is what we've been asking for over here. In terms of the standing committee that has been set up by this House, that is a long, hard, difficult job that that committee has taken on. It's going to be perhaps a couple of years before that committee is going to be in a position to table the kind of reports in this House in which an analysis of the financial operations of Hydro is going to be useful to this House. Meanwhile, we've got to go to the people who have put together a team - that is the Energy Commission - in terms of experts, in terms of energy, to be able to give us sufficient information that the energy policy of this province is made in this Legislature and not in the board room down on Burrard Street in

[ Page 1744 ]

Vancouver.

If we don't do that, then we're going to be in a position of not being able to deal with Hydro at all, of simply having to say that it's there and whatever they want they will have and there will be no real vision about the development of an energy policy other than the ones from the engineers in Hydro. It's been pointed out that where people, members of the public, have taken the time and the energy and have obtained assistance from a number of interested people, they have been able to make the kinds of arguments that have slowed down some of the drive that Hydro exhibits in terms of what it says are the energy needs of this province. Again, that is the kind of role that the Energy Commission can play.

Then sometime down the road, once the standing committee is in a position to be able to understand the operation of Hydro, they can make the recommendations. But in the meanwhile we do have the Energy Commission, which is an all-important part of the energy structure of this province and we, as the Legislature, can call upon them. They are a creature of this Legislature in the sense that we set them up in this House with a piece of legislation. We should be making use of them in such a way that we have a much more intelligent approach to the passing of a sum of money in the order of three-quarters of a billion dollars.

I know one can only conclude from the way the minister introduced the bill that he sat back and he knew that the opposition would get up and make the kind of statements that have been made, but he's somewhat fatalistic about that. As soon as it is all over, it'll pass, and then they'll get the okay to go to the money markets and get it. But that's not good enough. It's simply not good enough any more. After all, that's the government that constantly talks about the bottom line.

We hear great talk about "we mustn't leave the next generation with all sorts of debt." I have never subscribed to that idea, when in terms of their thinking this is the kind of debt which will guarantee that the future generations will be paying for 70 or 80 years. This completely knocks on the head any argument they have about their concern about fiscal responsibility. But we're not talking so much now about the future debt. We're talking about one of the future energy needs of the province. That's why we have to go to the Energy Commission. That's why we have to stop and think about what we're doing.

For almost 20 years in this House the former Premier was looking for a vision and then from 1960 on, once they had taken over B.C. Hydro, he was bound and determined that he would develop the kind of energy policy that was needed. It almost seem parenthetically that regardless of the cost.... And we know about the costs. We know about the billion dollar overrun in terms of the operations. We know about the exaggerations of energy needs. We know about the loss now; we know about the loss of money and how we sold out the downstream benefits for nickels and dimes when we would have been in a much better position to get a significant amount of continuing revenue in this province.

But what body was there available to give advice to this House on what was going to happen as a result of this? During the debates of that time we had a number of officials, well-known people, including the former general who was so well known in opposition to this particular project, who pointed out to us that there was a need for us to know more specifically what we were getting ourselves into. We don't seem Lo have changed.

The attempt by the previous government to come to grips with this was in terms of the Energy Commission - to develop a policy, to assist the government. But it se that this government is not interested in getting that kind of assistance. It's not interested in questioning right now just what the energy needs are, and making the decision that we in this House and that government over there will make the energy decisions, not B.C. Hydro.

That's the battle that we have, Mr. Speaker. We have a battle of wills. One is the will of the Hydro, particularly as personified by the chairman who was in this House for a number of years and was an extremely powerful member of a former Social Credit cabinet. He's actually the economic czar in this province, because this province operates without a serious, well-thought-out energy policy. But the problem is that we don't have a serious, well thought-out energy policy. What we have is a B.C. Hydro policy which is simply to go on in the engineer's frame of mind - to build and build.

There are no discussions in any meaningful way about alternative energy sources or the question of conservation. None of this is being put forward by the government. We have yet to receive from the government a piece of policy in respect to what they think about the energy policy and how it should be in this province. They have not requested anything from B.C. Hydro or the B.C. Energy Commission, but B.C. Hydro, unsolicited, offers us this policy. That's wrong.

The intent of this amendment is to point out to the government and to the people of the province that we can no longer continue to

[ Page 1745 ]

approve large amounts of money, which will always reflect itself in terms of increased rates. The public already realizes that they are paying between 45 and 47 cents on every dollar that they pay to Hydro in terms of debt retirement. This will add to that.

What we want to know when we refer to the Energy Commission is that they should tell us, .... They should find out for us, and talk to Hydro and say: "What are the plans over the next five or 10 years?" What are the rates likely to be next year and the year after and forever on, as long as they are going to be allowed to continue with this policy of theirs, which is now becoming a reckless policy? It's reckless because we're beginning to realize that it is not the easiest thing in the world now to go to the money markets and to get the kind of money at the cost that we used to be able to get it. It becomes more difficult. So we don't have to make a commitment that whatever we have to pay we will pay.

We have to look at the whole operation itself and decide that we must operate within the context of what we really need - not what the engineers think we need, but rather what a body like the B.C. Energy Commission will tell us, and what the members of this House in debate in discussing an energy policy will have some understanding about.

Mr. Speaker, I support this amendment and I would urge the government members to at least speak on it.

MR. COCKE: I'm amazed that neither the government supporters in the back bench nor the cabinet have taken an opportunity to stand up in this debate on an amendment to a three line bill. I think the arguments have been put forward rather succinctly and rather well by the member presenting the amendment and by two speakers since.

The Energy Commission was set up to take a look at the energy needs of our province. The first fights that began very soon after they brought out their original reports were real fights with B.C. Hydro. You will remember that the B.C. Hydro projected demand was something on the order of 9 per cent per year and an increasing demand at that rate. The B.C. Energy Commission said no, it would be under 6 per cent. That was a tremendous difference.

In looking at Hydro we found that it has a tendency to bring out self-fulfilling prophesies. When we have a government that is noted for its support for anything that Hydro says or does, and brings in a bill which asks us to increase their borrowing up to virtually $5 billion to the tune of $750 million this year, it strikes me that that should have gone through some kind of process where we could have seen justification for that kind of expenditure and borrowing. We see no justification.

The Minister of Finance (Hon. Mr. Wolf e) stands up and reads a typewritten sheet which he generously provided and which told us the areas where there was need, but no real justification. On that sheet of paper he doesn't answer some of the proponents of alternative sources.

I suggest to you, Mr. Speaker, that Hydro is the child of permissive parenthood. In other words, they are spoiled brats. They get whatever they want. All they have to do is speak to little rich Evan, and he comes romping back to parliament and says: "Do you know what Bob Bonner wants? He wants $750 million measly little dollars."

I don't think we should sit back and give them borrowing power of $750 million without a lot more justification. The true way to justify this borrowing would be to follow the suggestion in the amendment of my colleague from Nelson-Creston (Mr. Nicolson) . All he asks is that this bill be put before the Energy Commission and let the Energy Commission assess the need. That should have been done before it was ever brought to this House. There should have been a report from the Energy Commission suggesting that what Hydro was doing was in line with the energy needs of the province and the thinking of those who are far less involved in terms of any kind of commitment to that old-fashioned Hydro way of doing business. These are fresh minds.'

MR. SKELLY: They are sitting on a report.

MR. COCKE: The member for Alberni says that they are sitting on the report. No doubt they are. This is that businesslike government. This is the government that we are to admire because of their business acumen. I haven't seen any evidence of it yet. I see the province taking a dive on account of a blundering government, a government that has shown no business acumen. There's no justification. They just bring it in and we'll romp it on through. And everybody, the Munchkins and all, will support this three-liner bill.

That three-liner gives Hydro another $750 million. I'm here to tell you that there should be far more assessment of this than just putting it before the House with the kinds of arguments that we have seen so far.

Mr. Speaker, I just ask the question in support of the amendment: why is there no report from the Energy Commission supporting this request? Failing the minister's ability

[ Page 1746 ]

to answer that or to produce a report, then I say that the member for Nelson-Creston is right on. Let the Energy Commission review this matter. It's far too important a matter to be supported in any other way.

HON. MR. WOLFE: I've listened very carefully to the comments associated with this amendment. Let's just be reminded of what this bill proposes. It's to increase the borrowing power of the B.C. Hydro and Power Authority by some $750 million, and it is associated with specific capital expenditures already laid before this House - many commitments having been made - to be incurred during the current fiscal year.

Now members have said: "What control has been exercised or review has been made of this request? It is a fantastic amount of money." Well, just this, Mr. Speaker: the original request by B.C. Hydro was a $1 billion increase in this borrowing authority. After careful review, this has been reduced to $750 million, associated with the specific projects which have been laid before this House. This approval has already been delayed as long as possible. I would refer members to the B.C. Hydro prospectus - the most recent one, of June, 1977 - in which the seven-year projection of capital expenditures is laid before investors. I would draw your attention to page 18 referring to "capital expenditures estimated." For the year ended March 31,1979, the estimated total programme at that time, almost a year ago now, was close to $1 billion -$988.9 million in estimated capital expenditures.

Well, Mr. Speaker, the government is concerned about the growth in the borrowing and the responsibility which is being shown by Hydro in requesting these borrowings, and both last year and in the current year reduced substantially the approval of this request. As a matter of fact, let's look at why reference is made to the B.C. Energy Commission. There has been a lot of debate about the divergence between their estimates of load growth and those of Hydro. Within the past year and a half, the load-growth forecast of the B.C. Energy Commission has been reduced from 8.5 per cent annually to 6.6 per cent annually. That's a 10-year projection of electrical load growth, practically a 2 full percentage point reduction in the load-growth estimates of the B.C. Energy Commission and B.C. Hydro. At this stage you will find that the projections of load growth of the B.C. Energy Commission and the B.C. Hydro with relation to electrical demands are basically exactly the same.

MR. COCKE: Oh, come on, Evan, that's absolute nonsense!

HON. MR. WOLFE: Are you disputing that fact that the estimated load growth of B.C. Hydro has been reduced as of this date in 1977 to ... ?

MR. COCKE: Yes, agreed - under pressure of the B.C. Energy Commission.

HON. MR. WOLFE: It's a fact, Mr. Speaker, that resulting from this revised load growth based on the nature of the economy and many other factors examined by the researchers and economists of British Columbia Hydro, who have now been able to reduce the demands on increased borrowing, as I say, from $1 billion for the current year to some $750 million....

Now, Mr. Speaker, what about the borrowing of Hydro? I'd just like to mention one thing. We talk about a borrowing requirement or total authority of practically $5 billion. It's a fact that when you relate B.C. Hydro's borrowing to Hydro in Ontario and to Hydro in Quebec, you have a very similar comparison when you relate their total liabilities per customer. So I just simply relate that for the benefit of the members of the House, the total debt of Hydro compares almost within a very few dollars between the three major Hydros within Canada - namely Ontario, Quebec and British Columbia.

Mr. Speaker, it's rather amusing to hear the concern over borrowing growth across the way and rather interesting to hear references that this should be referred to the B.C. Energy Commission. That particular possibility is a matter which we can consider, but why didn't the NDP consider that in the years 1974 and 1975? They obtained increased borrowing authority in 1974 of $500 million. In 1975 the previous government requested and obtained from this Legislature, or a previous one, an increased authority of $750 million. There was not one word then about asking for outside review of this borrowing. Why do they now say with such great hindsight that this is such a great idea?

I think what is very important is that the authority to authorize this borrowing authority lies with the Grown. The Minister of Finance, through the Crown, is the fiscal agent responsible, the one who has to be held responsible for this borrowing, the guarantor of these fantastic borrowings. Although we would appreciate outside opinion on these matters, we simply cannot abrogate the responsibility of the Grown to be finally responsible for authorizing that degree of borrowing.

[ Page 1747 ]

Every additional borrowing which Hydro makes within this legislative authority has to be approved by the government and through its fiscal agent.

Mr. Speaker, I think the member should give consideration, when asking for outside authority to review rate administration and other matters, to the possible implications of this. What I'm referring to here is the fact that the outside administration of rates would most definitely result in higher rates than pertain today. Mr. Speaker, it would most definitely result in higher rates than would pertain today.

AN HON. MEMBER: Oh, explain that.

HON. MR. WOLFE: Yes, I will, Mr. Member.

Mr. Speaker, currently the debt- to-earnings ratio of Hydro is a very difficult one of some 96/4. Any application for a rate adjustment before some outside authority would have to take into consideration the desirability of changing that debt-to-earnings ratio to what is more acceptable in the marketplace - for instance, 80/20.

Let's look at the profit record of Hydro. I'd like the opportunity to table this before the House, Mr. Speaker. In fact, the 10-year record of profit return of Hydro is an aggregate of 2.1 per cent on their total revenues. If you were to reduce that to the last four or five years, which is on this list before me, you'll find that it's actually at about a break-even point. And I recognize there are other factors that you might want to consider in reviewing those results. Here is a newspaper article in the Vancouver Province on May [9: "Quebec Hydro Profits Zoom." In their annual report Quebec Hydro is reporting an increase in their profit return of 32 per cent in one year. That's a profit return, Mr. Speaker, in Quebec Hydro on revenues of 32 per cent. For a comparable figure on Ontario Hydro, the profit return on revenues is 10 per cent in the most recent fiscal year. What is B.C. Hydro's? I just told the House: 2.1 per cent over a period of 10 years.

Now in the consideration of subordinating rate administration to outside bodies - which we are considering - I just want to remind members that the results of this would have an implication on the rate base of customers of a substantial increase on any kind of a justification that you want to consider.

So I really think that what is fundamental to this amendment is the need to develop hydro power to the extent that it is environmentally acceptable and available within the province of British Columbia. Hydro power is very capital-intensive, Mr. Speaker, but very much more economical to operate with once a dam has been constructed. So it makes every bit of economic sense to develop our hydro potential, which does require borrowing in advance -there is no question about this - because of the capital-intensive nature of these projects. We should feel fortunate that we have these projects available, which are receiving careful examination insofar as environmental effects are concerned. But within British Columbia that is the reason for the requirements of these borrowings. In effect, Mr. Speaker, any given dam project will never be cheaper than it is today for the citizens of British Columbia and for the ratepayers.

So, Mr. Speaker, the amendment which would turn over the responsibility for recommending approval for this borrowing need, which has been specified in the list of projects already, would abrogate the responsibility of the Crown in this regard. On those grounds I cannot support the amendment.

MR. GIBSON: Mr. Speaker, I really hadn't intended to speak in this B.C. Hydro debate and I'll be very brief even now.

MR. SPEAKER: We're on the amendment.

MR. GIBSON: I appreciate that. The amendment introduced by the hon. member for Nelson-Creston I think has some merit and I want to support it.

In the past, this House has really had no alternative but to support whatever dollar borrowing authorization the government brought in because we didn't want to see brownouts. We wanted to see sufficient energy for British Columbia development. The House all too often had to make its decisions on a terrible lack of information and incomplete justification from across the floor.

Now finally, I must say, we do have an instrument in the manifestation of the Crown corporations committee which will, on a year-to-year basis, be able to audit the policy actions of Hydro rather more closely, including, in particular, its capital budget, which is what this bill is addressed to. We will be able to do that in depth. It is very clear, however, Mr. Speaker, that the Grown corporations committee will not be able to do that job this year, or at least not right now in time for the purposes of assessing this bill. That committee's plate is overloaded and it's not going to be able to get around to that.

So when I heard the hon. member for Nelson-Creston suggest a study at the present time by the B.C. Energy Commission, I had to agree.

[ Page 1748 ]

That commission will be able to get to that task right now. They have the staff to do that much sooner than the Grown corporations committee could do, at least for this specific inquiry in this specific year. In fact, in any future year, I would suspect that the Crown corporations' reporting committee would call upon the expertise of the B.C. Energy Commission to advise them in this regard.

One can say, in a sense, that rates are made by costs and that if you build a dam you have to pay for it. Therefore rates are not really that much of a debatable question. You have to get some return and, in a sense, that's right. But that's not the case as to how rates vary between different classes of customers and what rates say about the building of new facilities.

For example, do rates spread the load fairly or unfairly as between different classes of users, be they residential, industrial or commercial? I'm not saying they do or they don't. I'm just saying it's an open question in the B.C. Hydro rate structure. Do the rates encourage or discourage conservation? I think that is not a particularly open question. I think that B.C. Hydro's present rate structure doesn't encourage conservation. Whether I would go so far as to say it discourages, I do not know, but it certainly doesn't encourage it. We don't have any peak period pricing of any consequence and we have what I regard as probably too large a bulk rate discount. But again, that's something that a study of this kind would be able to assess.

The reforms that can be made in rate structure are such things as marginal cost pricing. I'm familiar with the Osler paper that the hon. member for Nelson-Creston (Mr. Nicolson) mentioned, which I believe was prepared in connection with the Revelstoke Dam inquiry. There are some grounds for believing marginal cost pricing would actively encourage conservation. Utilities in some parts of the continent are switching towards this type of pricing. I believe that Ontario Hydro has had a major study underway in this regard. So this kind of a study by the Energy Commission I think would be a good idea.

However, I must say I would not want to see, as a result of this study, any of the ongoing projects being suspended. We are in the middle of most of the projects that the minister announced when he gave the justification for the raised borrowing authority in the first instance, and there's only about $50 million in borrowing authority left. So any study that would be done would have to be a reasonably rapid study within a period of a couple of months. But I think it could be done. I think the commission could get back to the House and give us good information in this regard.

I simply can't agree with the minister's suggestion that an outside rate-making authority would lead to higher costs in the corporation. The minister speaks of the higher rates. I can't see that it would lead to higher rates. That's right - rates, not costs.

The minister speaks of the possible adjustment of the debt-equity ratio, now standing at 96/4, more towards the limits of Ontario or Quebec Hydro which are more in the nature of 20/80, or 25/75. W11, there's some reason for believing that B.C. Hydro has every intention of doing this in any case. At that moment, they are their own rate-making authority. No one in this province has any control over the rates they make. They are completely in charge of that.

The proposal here is not that the B.C. Energy Commission should have the power to set their rates but simply that the B.C. Energy Commission should have the power and indeed the instruction from this Legislature to review the structure. I think that would be a good thing, quite frankly. I think it would add to the public information; I think it would add to the public dialogue. I think it would assist the the important work of the Crown corporations committee and I'm all for it. I think the minister should be too.

Amendment negatived on the following division:

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

[ Page 1749 ]

MR. KERSTER: Mr. Speaker, I recognize the need to ensure this province has guaranteed power supplies to not only meet today's demands but properly plan developing capacities to accommodate future growth. I will support Bill 4, but not without first expressing some very deep concerns for the manner in which B.C. Hydro conducts itself - or maybe I should say misconducts itself. Hydro's spending, Hydro's planning, Hydro's priorities and Hydro's impact on this province and its people all must come under closer scrutiny.

This government has created the mechanism by which the Power Authority's spending can be brought into check; that is the Committee on Crown Corporations. It is a positive step towards exposing and preventing any further Hydro-type binges. But what about rate increases? What about planning? What about priorities? What about the impact of these areas alone on this province? Frankly, if permitted to follow its present course, B.C. Hydro will continue to scar British Columbia and place a burden of costs for its inconsistencies on every man, woman and child in this province. I think B.C. Hydro is out of control. I think it is arrogant. I think it is unilateral in its thinking. I think it is irresponsible. It must be brought under control before any more foolish blunders are made.

[Mr. Rogers in the chair.)

Only a total reorganization of this giant Crown corporation can eliminate these problems. I think serious consideration should be given to removing from B.C. Hydro the responsibility of delivering natural and propane gas services and transit services. Transit services should rightfully be the responsibility of a transit authority. Natural and propane gas should be placed under another authority, leaving Hydro with the single responsibility of electrical generation and the delivery of that service. Such a separation, particularly in the gas and electrical services, could create something which is sadly lacking in the present Hydro structure: cost efficiency and a healthy rate competition. To assure that such rate competition does in fact exist, an overseeing body should be established to monitor all public utilities and Crown corporation rates. Before any rate increases could be implemented, the public should have input or at least have the opportunity to be heard. Such rate scrutiny would also be helpful in areas such as the B.C. Ferry Corporation, lCBC and B.C. Telephone.

Mr. Speaker, I can understand Hydro's need for increased borrowing power. One factor alone, their net debt servicing cost for 1978, exceeded $314 million. But their plans and their priorities are totally out to lunch. I'd like to give you just a few examples.

I think it was last Friday that the member for Alberni (Mr. Skelly) , whom I do not often associate myself with, mentioned the fact that I think Vancouver Island should have a thermal generating plant. I haven't changed my stand on that one one iota, I think with very good reason. This island should be self-sufficient in generating capacity. Why should Vancouver Island's power supply hang on 14 underwater threads - those present 12 submarine cables that transmit power from Tsawwassen to this island, and another two underwater cables in that goofy Cheekye-Dunsmuir project that they are proposing?

All that has to happen is one slice from a heavily loaded coal freighter, and how long would this island be without power? What does Hydro say? They in effect say: "Who cares? Hydro's ideas are good ideas. They must be good because they are hydro's ideas." Well, that's not good enough. That is the type of arrogance from that Crown corporation that we can no longer accept in this province.

In my own constituency Hydro has further displayed a total lack of response. They insist on wasting $300,000 on a silly series of oil-burning tests at the Burrard thermal plant. They attempt to justify that blunder with contradictions and funny numbers. We all know that that thermal plant can burn oil; you don't have to spend $300,000 to prove that. A-11 my communities ask is that they burn low-sulphur-content oil and then only in a real emergency situation. I don't think that is too much to ask.

Another example of Hydro's response to the desires of my constituents is its response to the removal of the ancient, dilapidated and improperly maintained transmission towers on Como Lake Avenue in Coquitlam. These towers are a disgrace. They look like little old oil derricks. They are rusty. Because of their placement some of them are bent and twisted from occasional encounters with automobiles. They span the sidewalks and, without any exaggeration at all, they pose a very serious threat to life and limb. Wires continually fall from these things because of lack of maintenance.

When I approached Hydro and asked them to remove these decrepit disasters, I requested that their removal and replacement with concrete poles - which are at least aesthetically acceptable to my community - be to Hydro's account. I was informed that this wouldn't be

[ Page 1750 ]

a problem so long as the rights-of-way could be reconciled with the municipality. The municipality has done its part, but Hydro has moved the goal posts right in the middle of the game. Now they say the municipality must pay the entire shot. Arrogance? You bet it is. I'll tell you that Coquitlam is not going to pay to clean up Hydro's act. Hopefully with the passage of this bill Hydro can find the money to keep their prior commitments to my area.

I have one last example of planning and priorities, and this is a real boomer -another example of the type of planning that we no longer can accept from that giant Crown corporation. Recently, a beautiful transit centre was constructed in Port Coquitlam. It's all very nice, but I don't think that Hydro thought about one minor little point when they pulled this one off. How are they going to get the large number of buses reportedly to use this centre in and out of the area without creating more serious traffic problems? We'd need at least one more overpass and a couple of underpasses just to get the buses in and out. It's ridiculous.

At this point I think it's very apropos to mention that this centre was built on 14.6 acres of land purchased by Hydro for goodness knows how much money. I couldn't find that out. The puzzling part of the entire exercise is the fact that about five blocks southeast of this site, adjacent to a new highway project, the Maryhill bypass, which would remove the traffic problem entirely, Hydro already owns 31.46 acres of land. They completely forgot about that piece of property - maybe they didn't know they owned it - and went out and bought 14.6 acres more. Mr. Speaker, this is ludicrous. And I tell you that I fully intend to pass this information on to the Committee on Grown Corporations so this matter can be fully investigated.

As I've said, this province's power needs must be properly met, and this is going to require adequate funding. On that basis alone I can support Bill 4. But I must emphasize that just because British Columbia is very rich in natural resources, it doesn't give Hydro the right to be obsolete in its planning.

MR. BARRETT: I just want to comment about a number of aspects on this increase of borrowing power to B.C. Hydro as has been brought forward by the government today. The previous member of the Legislature commented on the fact that $300 million a year goes from B.C. Hydro's income just to pay the interest on loans alone. I think that's roughly correct, but what the speaker did not define and what we need to remember is that $100 million a year of the hydro users' hard-earned money goes to pay interest on the borrowings related to the Columbia River Treaty.

The last figures [illegible] had presented to this House by the former Minister of Energy, Transport and Communications (Mr. Davis) , who was on the B.C. Hydro board and is presently in the House today, indicates that the shortfall on the treaty with the United States concluded by the former Social Credit administration, in the exchange of downstream benefits for cash, has caused a $1 billion debt by that Crown corporation that the people of this province have to pay.

AN HON. MEMBER: Not true.

MR. BARRETT: If it is not true, then those who say it is not true are calling the member for Vancouver-Seymour (Mr. Davis) a liar.

The information given to this House by that cabinet minister indicated that we were over $1 billion overspent, and that is verified by the government's own accounts. So if that is not true, then I suggest that the Minister of Mines and Petroleum Resources (Hon. Mr. Chabot) get up and demand an explanation as to why the province's own accounts indicate that debt. I don't hear the Minister of Finance (Hon. Mr. Wolfe) echoing the "not true" statement. Not true?

Interjections.

MR. BARRETT: Well then, the member for North Vancouver-Seymour was lying to this House when he gave that answer. He gave that answer in this House.

MR. SPEAKER: Please address the Chair.

MR. BARRETT: I'm making my statement. When you call across, "It's not true, " you are calling the Minister of Energy, Transport and Communications a liar, and I won't accept that in this House. If you want to call him a liar, say so, but don't do it in front of me. He told this House that there is $1 billion owing on that treaty. I knew that when we were in government, and that still remains today.

We were forced to borrow money for the first time in Hydro's history in 1973 because of the increased debt piled up and piled up from that sell-out on the Columbia River Treaty. Every year $100 million comes out of the pockets of every homeowner, every hydro user in this province just to pay the interest alone on that fiasco of the Columbia River Treaty.

[ Page 1751 ]

That's without even reducing the principal and still we don't have the total cost of that t disaster.

There's $100 million a year that could be spent on schools, could be spent on hospitals, could be spent on roads, could be spent throughout this province on services to people, to old-age pensioners - $100 million for interest alone because of the Columbia River Treaty.

Mr. Speaker, the United States government t paid cash, and at the time they paid the cash for the downstream benefits, we were told by the former administration that those cash sums would be enough - including the downstream benefits payment and the flood control payment to pay the cost.

Who was the first to attack that, Mr. Speaker? The now Minister of Education (Hon. Mr. McGeer) , who is on record in Hansard indicating what a disaster the Columbia River Treaty was, sitting next to the now Minister of Mines and Petroleum Resources (Hon. Mr.Chabot) . Is the Minister of Mines saying that the Minister of Education told a falsehood when he made those speeches in this House about the billion-dollar debt of B.C. Hydro?

History has a strange way of bringing back haunting memories. How ironic it is that two former Liberals are the ones who are on record exposing the disaster of the Columbia River

Treaty, only to find one of them sitting today as the Minister of Education. He will not get up today and defend the Columbia River Treaty.

What could the Minister of Education do with that $100 million that is going down the drain because of the disaster of the Columbia River Treaty? The Minister of Education could reduce school taxes right across the board in this province if he had that $100 million. The Minister of Education could give more funds to the universities if he had that $100 million.

The Minister of Education also used to say that that treaty should be renegotiated, Mr. Speaker.

HON. MR. CHABOT: It's a phony argument. It's a false premise. It's nonsense.'

MR. BARRETT: Who am I to expose this conflict in the cabinet, when the Minister of Education is listening with one ear and the Minister of Mines and Petroleum Resources is saying: "Nonsense."? If you're going to fight it out, have the decency to go into the corridor. Mr. Speaker, I can't stand the sight of blood being shed between that Socred and that Liberal over the back of the recorded speeches of the Minister of Education.

HON. MR. CHABOT: You talk nonsense. You know hat.

MR. BARRETT: Don't you say that about the Minister of Education. He's got degrees from universities, and you don't have degrees from universities. Why, when he was the Liberal leader, he used to get up with all of his degrees hanging out, and he used to say to the government: "How terrible; you've blown it on he Columbia River Treaty. We have to borrow 11 this money." And now he's sitting next to he Minister of Mines and Petroleum Resources and he's being attacked by the Minister of Mines and Petroleum Resources for his earlier statements. You should know better than that. e went to school.

A hundred million dollars a year is coming rom your pocket, Mr. Speaker - from the backbenchers' pockets, from every citizen's.

Interjection.

MR. BARRETT: That's right. I knew I'd get the attention of some backbenchers when I said that they're paying for this too - $100 million to pay off the interest on the biggest sellout in the history of British Columbia, caused by the previous Social Credit administration.

We could buy even more Royal Hudsons for the Minister of Travel Industry (Hon. Mrs. McCarthy) to go on. We could buy her a new ship to go to Seattle. We could hire a piper. We could do all kinds of things for the Minister of ravel Industry.

For the Minister of Recreation and Conservation (Hon. Mr. Bawlf) , we could have some parks and some money to put trout in the lakes.

DEPUTY SPEAKER: Hon. member, I think we are straying somewhat from the....

MR. BARRETT: I'm talking about the $100 million....

DEPUTY SPEAKER: I appreciate the fact that you're talking about $100 million. However, we are on Bill 4 and the principle of the bill rather than on what we could do if we had some savings.

MR. BARRETT: Here is the bill, Mr. Speaker -very clear.

DEPUTY SPEAKER: I have a copy in front of me.

MR. BARRETT: It says right here in the bill

[ Page 1752 ]

that section 47 of the British Columbia Hydro and Power Authority Act is amended by striking out $4,150 million and substituting $4,900 million. I'm only talking about the $100 million we have to pay in interest; I'm not talking about the other $750 million that we're asked to increase the borrowing power. Just think of the things we could do with that.

Mr. Speaker, I am amused by the deep interest of the Minister of Education, when he's reminded of his old speeches when he used to be a Liberal. Do you remember when he used to be a Liberal? I remember that. Some say he still is, that it's a secret plot to bore within - I certainly think that it's boring. Yes, Mr. Speaker, the Minister of Education used to make speeches attacking Social Credit as being the biggest bunglers when it came to power; yes, the Minister of Education attacked Social Credit for allowing the debt of Hydro to escalate because of the disaster of the Columbia River Treaty; yes, I used to sit in awe at the wisdom and degrees studied and the depth of analysis given by the member for Point Grey about Hydro's debt. And he's strangely silent today.

Mr. Speaker, I would like to see the Minister of Education get up and now endorse the Columbia River Treaty so that we could see the total conversion, the absolute conversion to Social Credit. The thing that would let me walk away in some sense of tranquillity from the House would be to have the Minister of Education get up and endorse the Columbia River Treaty as his ' absolute testimonial of faith in now joining Social Credit and all its malarkey as well. I would like to feel that the conversion has been complete, that the Minister of Education will get up and renounce his statements about his analysis of the Columbia River Treaty, so that all could rest in peace in that cabinet and we could continue to pay the Americans for the disaster caused by that administration and its successors.

Mr. Speaker, $100 million a year is $50 a year for every man, woman and child in this province - just to pay the interest on the debt from the Columbia River Treaty. And that is what is going into this bill here today. When we came to government we discovered that the shortfall was $650 million; when we were defeated, the new Minister of Energy, Transport and Communications (Mr. Davis) , who sat on the Hydro board, informed us that the bill went up to a $1 billion shortfall. They gave away our cheap power, they sold away the asset of the people of this province and now, on top of it, we have to pay these huge interest debts after they have given that away. And the member for Columbia River (Hon. Mr. Chabot) , who's sitting next to the Minister of Education, says: "Nonsense." I apologize, Mr. Speaker, for referring to history; I apologize for referring to the Minister of Education's old speeches, when he used to stand up in the House when he was a Liberal and demand that we renegotiate the treaty with Ottawa. Oh, I'm sorry that Hansard bears such testimony to those old speeches that he used to make. A family of five has $250 a year taken out of its pocket to pay for the Columbia River disaster that was foisted on this province by that Social Credit administration - a $1 billion debt, a handout for the United States by the Social Credit administration to the shortfall of schools, hospitals, roads and food to old-age pensioners, and any other services that are lacking.

Interjections.

MR. BARRETT: My dear friends, it may be true that it is an annual speech; but in the case of paying off this debt, I could make this speech for 500 years, and at the rate you're going you still wouldn't have it paid off. But you're the money masters; you're the ones who know best how to handle money; you're the resource developers of British Columbia; you're the economic housekeepers; you're the smart guys. The dumbest thing that was ever done was perpetrated by Social Credit, and this bill deals with paying off that very dumb thing.

It is tragic that only the Minister of Education is sitting here, because the other former Liberals used to get up and condemn this legislation too when we asked for more money. I remember the present Attorney-General (Hon. Mr. Gardom) chuckling in his Liberal wisdom about the disaster of the Columbia River Treaty; I remember the Minister of Labour (Hon. Mr. Williams) chuckling in his Liberal wisdom about the Columbia River Treaty; I remember the member for Kamloops (Hon. Mr. Mair) , when he was a Liberal - but I don't know if he spoke about the Columbia River Treaty; I remember the member for Surrey (Hon. Mr. Vander-Zalm) , when he was a Liberal. Here we are today: those Liberals who attacked the Columbia River Treaty and the $100 million a year we have to pay in debt servicing are forced to defend it. I can hardly wait for the vote to see those Liberals stand up and support the very thing they fought against -it will be the culmination of floor-crossing and opportunism.

My friend, the Minister of Education, is so much more educated than the rest of us in

[ Page 1753 ]

this humble chamber; my friend, the Minister of Education, is so much more knowledgeable than the rest of us in this chamber; my friend, the Minister of Education, is so much more aware of the scientific, technical and intellectual aspects of human life than the rest of us in this chamber.

I would ask, Mr. Speaker, if the Minister of Education would explain to us in scientific terms what goes on in the human brain when one argument against the Columbia River Treaty now has changed into one for the Columbia River Treaty. How does formaldehyde affect that political transformation? How does the laboratory provide the tools to allow this schizophrenic change to take place without the loss of principle or idealism? I'm sure there must be a scientific explanation for these things. Only a humble person like myself couldn't understand why the former Liberals would now support this legislation. I almost apologize for having the nerve to stand in my place and remind the former Minister of Education about his positions.

HON. MR. McGEER: Former.

MR. BARRETT: Oh, the former Minister of Education. You didn't hear about it? Up in Alaska they've shifted you out of the cabinet.

Mr. Speaker, I know this will not make startling news across this province, but we are dealing in this bill today with a coverup of one of the major disasters ever visited on this province of British Columbia. The Columbia River Treaty was exposed by that member for Vancouver-Point Grey, now a supporter of this administration. It's $100 million a year to cover up a political fiasco of the first order, and the Minister of Education will now have to change his story.

It's embarrassing, Mr. Speaker. I think I've got him ready to go. I think I've got him hyped up. I think he's ready to leap. He's ready to give public evidence of his complete conversion. We are now going to see the butterfly become a caterpillar - a reverse metamorphosis in political terms. Get ready, Mr. Speaker, here it comes. A $1 billion disaster and he's going to put his name to it. I want to see the reason for the change. Have you seen the light? Did W.A.C. buy you a cup of coffee? What was the news that gave you this new approach? I can hardly wait.

MR. LEA: A born again Socred!

MR. BARRETT: Yes, let us hear from the Minister of Education how he now justifies the $100 million a year that the people of this province have to pay in interest alone on that dead-weight debt left by Social Credit, whose principles he now clutches to his breast.

Mr. Speaker, I don't intend to vote for this bill.

HON. MR. McGEER: Mr. Speaker, that was an interesting account by the Leader of the Opposition. He referred to a major disaster in the province of British Columbia. Yes, there was a major disaster in the province of British Columbia, and that's when he and that govern ment took over power in British Columbia - not Hydropower, but all power. That was the disaster in British Columbia.

Yes, Mr. Speaker, I thank the member for drawing attention to some of the speeches I made years ago about power in this House. I take back not one word of those speeches. But I say this: if you thought those speeches made sense then, listen to what we have to say now, Mr. Leader of the Opposition. Because we'll tell you this: there is not one single export that British Columbia could put on the market today that would be more profitable or more secure than power. That will go on for the next 50 years.

Already interruptible power can be sold by B.C. Hydro for 26.5 mills. How different that was when we were telling people 15 years ago about the danger of long-term sales of power and 3.5 mills seemed like a lot of money. I'll tell you this, and I'll say it again: during all those years in opposition when people were developing the idea that if the NDP ever came to power they would be able to govern the province, they did not realize that in those years the NDP was relying entirely on the Liberals, and now on the Liberals and Conservatives, to carry the debate, to present the ideas. Left on their own, they're totally devoid of ideas, just like they were totally devoid of capability of governing when They got into power. It's a perfect example of the Peter principle, Mr. Speaker.

I tell you this: by their opposition to this bill, it is the Peter principle showing they're incompetent to be opposition.

DEPUTY SPEAKER: Order, please. We're on second reading of Bill 4. Perhaps you can relate this to the bill.

HON. MR. McGEER: Well, Mr. Speaker, how better to demonstrate the Peter principle of the opposition than their refusal to grant borrowing power to B.C. Hydro.

Mr. Speaker, what would they have us do? This is for $750 million. That's the total gross sales of B.C. Hydro. Would they have us

[ Page 1754 ]

not borrow the money and double electric rates in British Columbia? Is that what you want? Perhaps we shouldn't supply the power. Not for export - the most secure and profitable commodity that we have in British Columbia today. Perhaps they would have us be short of power, equalize the way the socialists want. We'd all have 100 volts. Is that what you would like instead of 120? Would you like us to have all the power we want for 20 hours a day, then shut it off? "Turn off the lights, " said the Leader of the Opposition.

Well, if you don't have the power you have to turn the lights off. That's what your policy would be. This is the best opportunity that we have to borrow money, with no equity given away, and produce a product that will give us the most secure export that we could possibly have in British Columbia or, failing that, build for our future power needs. There isn't a better business that we could go into than this. There isn't a more secure investment that we could make. Here we get an opportunity to produce our most abundant natural resource and a renewable resource at that.

And what's that opposition, Mr. Speaker? They're against it. You're not fit to be opposition, much less to govern. What you need over there to prop you up is more Liberals and Conservatives, because you can't carry the opposition duties by yourself. You cannot handle it.

When they were in power, Mr. Speaker, they had a minister of tourism who told the tourists to go home. They had a Minister of Mines who said to the miners, "Get out." They had a Minister of Lands and Forests.... Well, we cannot repeat what he told the people in that industry. That's what they did when they were government. They revealed it all in their opposition by the level of their debate. They were just propped up by the Liberals and Conservatives and they're revealing it now by the level of their debate and turning down bills such as this one, Mr. Speaker.

Never could there be a sounder investment in British Columbia today than power. Never were higher prices available on international markets. Never a more secure market. Never a more certain need for this in the future than we have today. The best position British Columbia has ever been in with a resource, and a renewable resource at that. You people over there in the opposition, you cannot even see that. I tell you, Mr. Speaker, it's a sad day, whatever the faults of the government may be -no government is perfect - to know that we've got such a totally inept and incompetent opposition as we've got in this House.

I say you ought to be having caucuses with the leader of the Conservative Party and the leader of the Liberal Party, so they can clue you up a little bit on what some of these bills mean and give you some ideas for debate so at least when you come into the House you don't come up with the nonsense that we had from the member for Nelson-Creston (Mr. Nicolson) and the member for Alberni (Mr. Skelly) .

MR. BARRETT: One hundred million dollars a year to pay off the debts of the Columbia River Treaty and you've said not one word on that.

HON. MR. McGEER: Sure. When you were the Premier of the province, what did you do about it? Not a thing did you do about it. That's the problem, Mr. Speaker. They're good at yelling and shouting but when it comes to performance - absolute zero. No ideas, no policies and, when you've got power, no performance. That's what the difficulty is.

I will say this. The leader of the Conservative Party is a new member but at least he sees through that immediately. We've got some common sense over there and thank heaven we've got a little common sense in the opposition.

Well, I want to tell you this. I'm certainly going to support this bill. I say that you people should have listened more carefully 15 years ago. You should be listening more carefully now and, for heaven's sake, you should get some people in your party who can plan for the future.

MR. BARRETT: Mr. Speaker, I want to withdraw a statement. I want to apologize to the House and withdraw for having referred at all, in any way, to the member's former speeches. I regret doing that. I want to state my....

DEPUTY SPEAKER: Order, please.

MR. BARRETT: The conversion has finally come. Not a single word on the Columbia River Treaty - not a single word.

DEPUTY SPEAKER: Hon. member, I must remind you that gaining the floor on a point of order when you do not have a point of order is in itself a violation of our rules.

HON. MR. WOLFE: I'thought perhaps the Leader of the Opposition, when rising on a point of order, was going to correct his statement about the loss of $100 million per year on the Columbia River Treaty. Because, as per usual, the Leader of the Opposition, on his favourite topic, the Columbia River Treaty, alleges that that treaty in fact has lost $1 billion. You

[ Page 1755 ]

know how wrong he is? He's wrong by 1000 per cent. We've had demonstrations of this kind before. That statement is misleading. It's inaccurate, it's incorrect, it's 100 per cent wrong. They deliberately chose to include generation, transmission, and other costs not associated with the Columbia River Treaty. That's absolutely true, Mr. Speaker. They chose to include other....

Interjection.

DEPUTY SPEAKER: Order, please. The Minister of Finance has the floor. Would you please address the Chair?

HON. MR. WOLFE: He is 1,000 per cent wrong, Mr. Speaker.

Mr. Speaker, the Columbia River Treaty was associated strictly with storage projects on the Columbia River. The estimated total cost of treaty storage projects, to date, is some $603.5 million. The contributions arising from the Columbia River Treaty are $479.1 million to date, for a net estimated total cost of the Columbia River Treaty projects to B.C. Hydro to date of $124.4 million, not $1 billion, Mr. Member.

I think the member should stand up and apologize. He knows full well, Mr. Speaker. He should stand up and apologize to this House for going around this province alleging....

Interjections.

DEPUTY SPEAKER: Order, please.

HON. MR. WOLFE: Mr. Speaker, he should stand up and apologize....

Interjections.

[Deputy Speaker rises.]

DEPUTY SPEAKER: Order, please. Only one member can be recognized at a time, and I recognize the Minister of Finance. If other members wish to enter into the debate, the fact is....

Interjection.

DEPUTY SPEAKER: However, I'm asking you to take your seat, please. Since the minister is closing the debate, there won't be another opportunity in second reading.

[Deputy Speaker resumes his seat.]

HON. MR. WOLFE: We're used to this degree of miscalculation, deliberate as it is, in putting forward incorrect figures. They choose, by calculation....

DEPUTY SPEAKER: On a point of order, the Leader of the Opposition.

MR. BARRETT: I ask the minister to withdraw the word "deliberate."

HON. MR. WOLFE: Mr. Speaker, I withdraw. I am simply trying to say - and the Leader of the Opposition doesn't like hearing it .... I have to believe that he does know that they're including in these costs many of the generating facilities not included in the Columbia River Treaty. It's as simple as that.

MR. BARRETT: Not true!

HON. MR. WOLFE: So his statements alleging the terrific loss of the Columbia River Treaty of $100 million per year in interest costs for a total of $1 billion are absolutely incorrect and inaccurate.

MR. BARRETT: Stake your seat on it.

HON. MR. WOLFE: They are not correct.

MR. BARRETT: Stake your seat on it.

HON. MR. WOLFE: It's time that people understood that this is a fact. They're deliberately bandying these figures around. They are not accurate.

MR. BARRETT: You stake your seat on it. We'll have a couple of by-elections. Tell the truth.

HON. MR. WOLFE: Mr. Speaker, on and on it goes, the debate over the Columbia River Treaty. The Minister of Education (Hon. Mr. McGeer) placed the case before the House just a moment ago. The fact of the matter is that the generation of this power project has been in the best interests, and the alternative, as proposed by the group opposite, would be simply darkness in this room.

Mr. Speaker, in the debate on second reading on this bill there's been quite a lot of reference to accountability by Hydro, reference to Hydro being a monolithic monster out of control. A great deal of control has been placed on responsibility of Hydro in their demands for these authorities to borrow. In terms of public accountability, the development of the Crown corporations reporting committee and the fact that British Columbia

[ Page 1756 ]

Hydro, in the last four years, have held some 250 public meetings in terms of their various projects and various developments.... I suggest to you that that's not a case of abrogating their responsibility or accountability to their customers and to the citizens of this province. True enough, they bear examination, but to my mind their attitude towards public hearings, for putting their proposals before the citizens of this province, is a responsible action.

Mr. Speaker, I would just like to close the debate on this bill, which is an annual debate which we go through in this House, by reminding the members that after all, this exercise of hammering our major Crown corporation, which is the responsibility of this Legislature, should be taken in light of the fact that we have some 13,000 responsible, dedicated employees who do feel the results of this constant barrage. I think that out of respect to the job they try to do, we should try to remember that these employees are trying to do a job for the citizens of this province and we should take into consideration the fact that we have a responsibility to their attitude towards the job that they do. We must try to show a more responsible attitude towards the objective of this corporation.

Mr. Speaker, I therefore move second reading.

MR. STEPHENS: On a point of order, Mr. Speaker, the Minister of Education attributed to me the ability to see through the arguments of the opposition. I'm sure that was intended to be complimentary, but in fairness, and in order to keep the record straight, and at the risk of sounding immodest, I claim the same talent insofar as the activities of the government are concerned.

DEPUTY SPEAKER: That's not really a point of order, but we've allowed you to say it.

Motion approved on the following division:

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

Bill 4, British Columbia Hydro and Power Authority (1964) 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.

HEROIN TREATMENT ACT

Hon. Mr. McClelland presents a message from His Honour the Administrator: a bill intituled Heroin Treatment Act.

Bill 18 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

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

ESTIMATES: MINISTRY OF HEALTH

On vote 125: minister's office, $139,851.

HON. MR. McCLELLAND: I have just a few notes that I would like to pass along to the House before we open up debate on the ministry's estimates. Since the passage of the estimates last year, which went in very short order, several significant developments have taken place in the health programmes of the ministry. Not the least of those were new arrangements for Health finance worked out between the province and the federal government. But in addition, a number of new programmes have been introduced, and there were some further organizational changes in the ministry which we hope will continue to improve the administrative and operational efficiency of the ministry.

In April of last year the Premier announced in Vancouver the introduction of a new longterm care programme to start on January 1 of this year. The programme was a very massive undertaking. We could have very easily delayed its introduction for six months or a year or whatever was required, but we chose the most difficult course, which was to start the programme on our original target date, because we

[ Page 1757 ]

wanted to make the benefits of that programme available to as many people as possible. The comprehensive programme provides coverage for intermediate- and personal-care levels as well as extensive benefits for care in the home. It is estimated now that some 20,000 people are entitled to receive coverage under those services. The programme, of course, places important emphasis on maintaining people in their own homes. A major role in this type of service is being played by the more than 70 societies throughout the province which provide homemaker services and which have assisted in recruiting and orienting a reserve of homemakers for the programme. Over 200 field staff are now available throughout the province to meet the needs of the public. The assessment of residents already in care facilities was well underway prior to the start of the programme. I would be the first to admit that the programme has not been without some difficulties, but I am pleased to be able to report that it has already proven to be a godsend to thousands of British Columbians. The Ministry of Health has allocated $500 million for new hospital construction in a five-year period which ends in 1981. Close to $300 million of that construction is either in the final planning stage or is actually underway.

We have asked for officials in the ministry to provide reports on the job-creating potential of projects for which approval might be accelerated. If we can help to relieve the unemployment situation in this province to even a limited extent by accelerating the capital programmes of the ministry, then that is what we want to know and that is what we wish to do.

The ministry also intends to strongly support local groups that would like to build care facilities for beneficiaries of the new long-term care programme. Approximately $40 million of new construction for this type of facility is expected to be completed within the next two years; and another $22.5 million worth is now in the planning stages.

We are building a number of local health centres for our public health programme. In each of those instances we have asked our people whether or not those programmes which are in the planning stages might be moved ahead so that we can create additional jobs at this time. The initial impact would be on the construction industry in our province, which is suffering the most serious unemployment rates probably of any industry. But, even with that, each job that we create there is of sufficient stimulation to the economy in order to generate one other indirect job.

As part of that construction programme we have now allocated a $113 million package for a long-range programme for hospital development or redevelopment in the Greater Vancouver Regional Hospital District. That $113 million is in addition to a number of projects already underway, such as those additions at Burnaby General, Royal Columbian, Lions Gate and St. Vincent's. It doesn't include the extendedcare facilities of Queen's Park Hospital, or that at UBC, or the new health sciences hospital underway at UBC; nor does it include the $45 million directly allocated from my ministry for the redevelopment of Vancouver General Hospital.

Other improvements in the ministry's health programmes, Mr. Chairman, are major alterations to the emergency health services, and that includes for the first time in this province a full air ambulance service and an extended ambulance crew training programme. A provincial dispatch office has now been established at Victoria to co-ordinate and arrange all long-distance patient moves within the province, whether by air or by road ambulance, and decisions to the most suitable means of transport are now made by the physician in charge of the patient, in consultation with that provincial dispatch centre. Of course, whenever they possibly can they work in concert with the air evacuation services which are provided by the federal government.

In June of this year, Mr. Chairman, the government established an interministerial youth committee, composed of senior representatives of the ministries of the Attorney-General, Education, Human Resources and Health, to deal with the complex issues involved in the care and treatment of emotionally disturbed youth and children with special needs. This committee reports through the deputy minister's children's committee to our social services committee of cabinet and maintains contact at the local community level through appointed interministerial regional committees. Initially, that programme is focusing on children in crisis, but the committee is moving rapidly into a number of areas of mutual concern, and there's every indication that it will prove an effective instrument in co-ordinating and developing special programmes for children.

Major initiatives and improvements have been introduced, Mr. Chairman, in the past year in the province's drug and poison information programme, which is jointly operated by the ministry and the University of British Columbia. As well, a new programme of a cooperative effort of the Ministries of Education and Health is presently underway to pro-

[ Page 1758 ]

vide quality classroom and home auditory training equipment to hearing-impaired children in British Columbia. That's presently underway in Victoria, Kelowna, Surrey, Prince George and Kamloops. I think it's important to note too that during the year the ministry initiated the first major revision of the British Columbia Health Act in over 30 years. Of course that Act has been the cornerstone of government public health policy and it will be a most important one that will come before this House in a year or two.

The report of the vision task force established in April, 1976, made its recommendations and completed and submitted its report in March of this year. It is an extremely detailed report. I'm indebted to Mr. John Liersch and his associates for a report that will form the basis of much serious discussion and, of course, future policy in terms of delivering vision care to the people of our province as well.

The work of another major committee has just begun with the establishment of the medical manpower advisory committee in March. It will be the responsibility of that committee to make recommendations on the distribution of the physician work force in this province. We were indeed fortunate to obtain the services of Mr. Wesley Black as chairman of that committee. He is well known to members of this House as a former Minister of Health and as Provincial Secretary. He was one of the founders of the medical care insurance plan that exists in this province today.

MR. COCKE: He used to always say: "I know the name of the game."

HON. MR. McCLELLAND: That's right. That's why we appointed him, because he knows the name of the game.

The committee has representation from the B.C. College of Physicians and Surgeons, the B.C. Medical Association, the Health Education Advisory Committee and, of course, the Ministry of Health as well, and one other lay person, who is the vice-chairman of the committee. I'm hopeful that that committee will be in a position to make its report - at least a partial report anyway - before the end of this year.

Mr. Chairman, changes in the senior administrative parts of the ministry coincided with the retirements of Dr. George Elliot, Deputy Minister of Community Health Programmes, and Mr. Bill Lyle, Deputy Minister of Medical and Hospital Programmes. Under this change, the previous branches of medical and hospital programmes and community health programmes were brought together under the administration of an executive director of health programmes. In addition, the ministry planning and support services were placed under the direction of an associate deputy minister. In August the government announced the appointments of Dr. Chapin Key as executive director and Mr. Jack Bainbridge as associate deputy minister, planning and support services.

I would like to pay tribute, Mr. Chairman, at this point to the outstanding contributions to the health services of this province over the many years made by Dr. Elliot and Mr. Lyle. I think we all should be particularly grateful to them for the admirable way in which they assisted toward the melding of the health ministry, which not long ago was virtually four separate and distinct organizations.

As some of the members of the House may already be aware, Mr. Chairman, my senior deputy, Mr. Jim Mainguy, has announced his retirement and will be starting on pre-retirement leave in November. It was with a great deal of regret that w accepted that announcement but I felt that it would have been asking a lot to ask for any further demands on a man who, as the opposition on the other side so easily recognizes, is so young. He has given this province, at least by the time of his retirement, 38 years of service.

Because I'm not positive whether or not we will be back here in the fall for another session of the Legislature, I thought I would like to say just a few words about Jim's service to his province.

He entered our service in 1941 in the division of vital statistics in the ministry in which he would ultimately become the first lay public servant to be responsible for the function of the provinces entire health service. As a layman, his appointment - and Mr. Cocke will recognize this - required a change in legislation. He has served since then, and before that, of course - in a number of senior positions in the government service and on several important federal and provincial committees, working as chairman or member with great distinction for all Canadians, not just British Columbians.

In particular, I would like to mention that Jim was appointed chairman of the national task force on beds and facilities for this country in 1969. This group was one of seven established to inquire into the means of restraining health service expenditure without impairing the quality of care.

Those more than 35 years of government service were not without interruption. From January, 1942, until November, 1945, Jim

[ Page 1759 ]

served in the north Atlantic and European theatres of war aboard destroyers, corvettes and frigates as a Royal Canadian Navy officer. On demobilization in 1945, he ca back into the public service in the bureau of economics in the Ministry of Trade and Industry.

In 1947, he took a one-year leave of absence to take a post-graduate course at the University of Toronto. In 1948, he was seconded from his position as consultant on staff of hospital insurance service to serve with a firm of consultants in a major survey of hospital and health manpower requirements in British Columbia.

In 1949, he took a second educational leave of absence to receive his Master's degree in hospital administration from the University of Minnesota, where his scholastic abilities were recognized in his graduating year of 1951 with the presentation of the achievement award.

Jim plans to start his pre-retirement leave in November. I know, Mr. Chairman, that he takes with him the warm thanks of this House for the distinguished service he has rendered the province. I know that everybody here, Jim, wishes you and your lovely wife, Lorna, a long, healthy and happy retirement.

Mr. Chairman, in closing, perhaps it would be opportune of me at this same time to inform the House that on the retirement of Mr. Mainguy, on November 1, the position of deputy minister will be filled by Dr. Chapin Key, who is presently executive director of health programmes.

Mr. Chairman, I look forward to any of the questions that the opposition or my other colleagues in the House may have for me.

MR. D'ARCY: Mr. Chairman, I also would like to say that I regret the retirement of Jim Mainguy. It seems to be the year of retirement for distinguished civil servants. We have had Jim Dennison and John Harding from the Ministry of Highways, John Stokes from the Ministry of Forests, and, as previously mentioned, George Elliot. I would like to note that the very distinguished medical health officer in my area, Dr. Schmitt, is also retiring from the civil service this year.

I almost wonder whether some of these distinguished administrators and professional people are finding it a fact that it's possible that sometimes some governments are tougher to live with than others. Certainly I think the statements that we had by the Premier over the weekend that he and his office were going to expect all the ministries to clean up bureaucracy in their departments can hardly be construed by the senior administrators in those departments, which, in my experience, are mostly pretty competent people and pretty dedicated people, as anything less than an attack on them directly. Mr. Chairman, what concerns me is that we may be losing some of the best people and perhaps retaining some of the people who are competent but not the most outstanding people that we have in the civil service.

Mr. Chairman, I want to talk a bit about the long-term care programme. Certainly it's a well-intentioned scheme. I certainly have some concerns about it and I also have some questions as to whether it is really anything more than reorganization of existing services as we have known them in British Columbia and a transfer of a funding action from one ministry to another.

Mr. Chairman, we have seen that residents in long-term care facilities who were in those facilities and being funded by the Ministry of Human Resources at amounts of around $750 a month.... I assume that this was a recommended amount by the field workers in the Ministry of Human Resources. 1 also presume that over the last two or three years the present Minister of Human Resources, as well as his predecessor, has had ample opportunity to review that rate and find out whether or not it was an adequate one. We find out that the rates actually being paid to the private facilities dispensing long-term care are, except in the case of intermediate level 3 patients, less than that particular figure, in spite of the fact that, as we all know, costs have gone up in the last couple of years and are continuing to climb.

It seems remarkable to me, Mr. Chairman, how the ministry can expect a private operator, with all of the costs that a private operator has which a public operator does not, to dispense personal-care services at $13 a day, and levels 1, 2 and 3 of intermediate-care services at $16.45, $20.55 and $28.30 a day. As stated a moment ago, only level 3 is in fact a higher rate than was previously received.

The point is that if, as has been stated by this party in office at the moment, they really have any commitment whatsoever to the private sector and any commitment whatsoever to the use of private investment funds, they would hardly, if they were acting in keeping with that philosophy, be following a policy which would work as a total disincentive for anyone to invest money in this particular field or even to keep up and maintain the facilities that they have. Rather obviously, if we're going to have proper levels of care in this province, we have to be prepared to pay a reasonable amount based on a reasonable assessment.

[ Page 1760 ]

Once again, Mr. Chairman, I find it rather strange that the publicly operated facilities, through non-profit societies, are paid a rate that ranges between $25 and $32 a day for the same services that the Ministry of Health is expecting a private operator, who is paying taxes and other things which a public nonprofit society is not paying, to deliver those same services at an average rate of somewhere around $18 or $19 - $5 or $6, at the minimum, less than what the non--profit operations are being paid. I find it totally inconsistent, totally unconscionable with that party's stated philosophy and, quite frankly, totally inconsistent with what people on this side of the House, in the official opposition and in the two minor parties, would expect if we were in on the government side. I cannot imagine a government by the New Democratic Party taking policy actions which, while attempting to put the private operator out of business my be stretching it a bit, certainly would be a total disincentive to improving facilities, or to expanding, or to any investor considering building new facilities. There is simply no point in it at all.

Not only that, Mr. Chairman, but quite frankly the policy is discriminatory against the residents who are already in a privately operated facility, for the simple reason that the operators of those facilities on the lower rate are simply unable to provide anything more than the minimum care and attention that is required under the licence issued to them by the Ministry of Health. There is simply no room for anything extra, which means that a resident in a publicly operated facility will, in fact, receive better service. That is a competitive disadvantage for the private operators who in many cases have invested their life savings in what has become a labour of love - or what was a labour of love.

[Mr. Rogers in the chair.]

Mr. Chairman, I would also like to make some comments on the financing of the long-term care programme. By the way, I would like in passing to pay tribute to the assessing teams in the various parts of the province. I think that they were given a monumental task by the minister, that they were not given the kinds of funding of facilities to do a tremendous job. They were asked to dig up a mountain with a teaspoon and they have made a deep impression on the job that has to be done and they're continuing to work at it. I'm very pleased and surprised that there are people in the public sector with the kind of dedication that they have. The fact that there have been a number of bureaucratic mix-ups only goes to show that they have been asked to do something which is absolutely impossible to do in the time that they've got to do it.

But I want to talk about the funding and the financing in terms of government, Mr. Chairman. First of all we transferred the function, as I mentioned earlier, from the Ministry of Human Resources to the Ministry of Health. We've seen the transfer of the function from one office to another and we've called it a new programme. But, of course, we know that anyone who had needed long-term care in the past has never been turned out on the street. The facilities were found; the bills were paid through the Ministry of Human Resources. It would be interesting to know how much money this has, in fact, saved that ministry and how much the new bill just for that cost alone of indigent people has been to the Ministry of Health. We note that the service, now that it has been on stream, has been used as an excuse by the Ministry of Human Resources to withdraw GAIN cheques and HPIA cheques from people who go on the programme.

It means that all former recipients of GAIN or HKA who are now on the long-term care programme have become in fact welfare recipients, and if they require anything above the $6.50 a day they have to appeal to the social worker to get a comfort allowance. Certainly it's a great change in funding procedure, and obviously once again a cutback from the Ministry of Human Resources being absorbed by the same B.C. taxpayer but under a different name, the Ministry of Health.

Of course, we know why the government wished to do this. It's because, as that party always used to say when it was out of office: "Human resources spending is bad: health spending is good." So if we have a function which can be called a health service presently under Human Resources they will make every effort to transfer that function to the Ministry of Health, give it a different name, and make it respectable. But I don't wish anyone in B.C. to think that a new service is being put out. It's really some minor additions plus a total reorganization.

We note also, Mr. Chairman, that the per them has been raised for long-term care in extended-care facilities from $4 a day to $6.50 a day, an increase of 62.5 per cent. Once again it's a saving to Hospital Programmes of that difference in money which is now being paid by the recipient.

And finally, something that I find very distressing is the double billing for longterm care beds and acute beds for patients which, by nature of illness or injury, must

[ Page 1761 ]

receive acute care on a short-term basis. They have to come up with both costs; either that, or the hospital has to absorb the loss. What usually happens in the case of the disabled and the elderly is that very often the taxpayer, through Human Resources, once again, makes up the amount. Mr. Chairman, I don't believe there should be double billing. This was advertised by the Premier, by the Minister of Human Resources and by the Minister of Health as a new programme which was not going to cost anyone more than $6.50 a day, and we find there is going to be an extension of acute hospital services, and we find that people who need a different kind of care on a short-term basis in fact pay twice. They pay double: they pay the acute-care billing plus the long-term care billing.

I will return to intermediate care in a while, and to long-term care. I would like to ask the minister if he can advise the House of any recent developments regarding the B.C. Cancer Institute. I'm sure he recalls the controversy this spring where the budget was given him by that institute. There was no indication that that budget was not going to be allowed. It was felt it had been reasonably worked out by the board of that hospital, which is made up of representatives from government and from the various major hospitals in the lower mainland. We had the controversy of the budget being cut, and part of it being restored. I understand that the minister may be considering other things. I'm wondering if he can enlighten the House in any way during his remarks as to what he has in mind regarding the B.C. Cancer Institute.

Eighteen months ago the agency was promised some extra funding particularly for capital costs and for operating costs. I would note that this facility is really the only intensive care cancer facility in British Columbia, particularly involving chemotherapy and radiation treatment. They have particular problems in the sense that the care they give is somewhat lower than what you would normally call intensive care in most cases, although not always, but somewhat higher than an ordinary care rating. The result is that they need a level of funding on a per patient basis which is somewhat higher than what would be normally expected for an acute-care hospital. I would suggest that the Ministry of Health either at the civil servant level or the ministerial level have not understood this simple point. I would ask, in the event that they don't believe the statements from the Cancer Institute and the board, that perhaps they could do their own assessment and find out for themselves. There is a particularly high staff demand in areas such as medical records. For the patient level you would normally think there might be the normal complement in a B.C. hospital of 10 people for a hospital of that size. In this particular operation they require 45 to 50 people just to handle medical records. Obviously it's an increased cost; obviously it's peculiar to that particular type of hospital.

If there is a statement forthcoming from the ministry we certainly would like to hear it. I have indicated that an answer to specific requests was promised some 18 months ago. There has been no answer, and it has been hinted recently that there may be something to be said by the end of the month by the minister. In case the minister hasn't looked at the calendar, the end of this month is midnight on Wednesday. I believe that the Cancer Institute should receive some kind of an answer.

The final point I would like to make is that according to the budgets of other similar operations in the United States and other provinces of Canada, we see that on a per patient basis the B.C. operation is between 25 and 35 per cent underbudgeted. I doubt, Mr. Chairman, that our costs of operating a hospital are 25 to 35 per cent less than other parts of North America. It simply doesn't stand up.

HON. MR. McCLELLAND: How do you know?

MR. D'ARCY: Mr. Chairman, one other thing I would like to suggest is that perhaps the ministry could consider at least a partial election of the public to the board of the Cancer Institute by a public society. I recognize that it is not a normal general hospital situation, so I'm not suggesting that only people elected by public society be on that board. I do believe, though, that there would be greater public understanding of the importance of the Cancer Institute if that change were made.

Another hospital, Mr. Chairman, which I think should have a sunshine policy regarding election to the board is Riverview. Again I realize that this is not a hospital in the common sense of the word. However, I think that there is something strange when, to get information on such a serious occurrence as the death of a patient in Riverview, the public or myself has to get the information -just simple information in communication -through public agencies such as the RC21P, the coroner's office or medical practitioners, and that information is not freely available through the administration of that hospital. Certainly not only must justice be done, Mr.

[ Page 1762 ]

Chairman, it must appear to be done. That's an old saw. I believe we could have a little more sunshine in the operation of our major provincial mental health hospital.

Mr. Chairman, I wish, while discussing hospitals, to have the minister discuss with the House the question of the UBC medical centre. We had considerable debate in this House last year over the issue of whether or not were doctors were needed at all in B.C. If more doctors, indeed, were needed in B.C., did we need a new teaching hospital or hospitals, or could we simply expand the existing teaching facilities in the hospitals in the lower mainland and greater Vancouver? The third question, of course, was: if indeed we did need a new separate facility, why on earth did it have to be as far away from the population centre of the lower mainland as you can get, which is to put it on the UBC campus?

We never received adequate answers to those questions, nor did the general public. However, getting on to it now, we find that recently the federal government has come through with $16 million for the teaching hospital at UBC, not the $25 million or $30 million that some people on the other side of the House suggested they were going to come through with. We also know that last year it was suggested that this facility could cost as much as $40 million, and the minister in particular pooh-poohed that suggestion. We see that that is now, a year later, not an unrealistic estimate. We also look at very huge operating costs.

What we also don't know at this point is whether or not the facility is even going to be used, because the statements made last year on this side of the House were that certainly the case was unproved as to whether the facility was even needed and whether it could be operated. Now we find that the extendedcare hospital that has been completed has never been used for teaching, except in a very peripheral way. Now we wonder, when this huge capital expenditure, partly federal, mostly provincial, is made, possibly unnecessarily, probably most certainly in the wrong place, as to whether the thing is even going to operate at all in the immediate future.

Certainly, Mr. Chairman, when we have a need, when we see cutbacks on every hand in funding for health and social services, the government can give us some rationale in a businesslike sense as to why they are taking these actions with large amounts of money.

Mr. Chairman, I would like the minister to tell the House whether he has any response at all to some of the statements which were made by trustees at the recent hospital association convention. Certainly he didn't address himself to anything when he was there and that's perhaps understandable. Perhaps he hadn't had time to review what had been said. But hospital trustees in my experience, Mr. Chairman, are a very conservative group of people. They're very rational. They're very hard working. They're very determined to do the best they can within the context in which they work, and I compliment them all.

But I thought it was very significant when a statement was made, and not opposed at all, that said the government on many occasions substantially undermined the ability of trustees to regulate operating budgets and construction programmes because government guidelines were either unclear, unspoken, inconsistent or unreasonable. I'm surprised that the minister did not address himself to that statement, and I would like to hear if he's had time to do so now, since the occasion occurred several weeks ago.

We would also note that, on other occasions, it was stated that trustees were given enormous responsibility and yet too often were treated by the ministry as if they didn't have any brains or judgment at all - rather a scathing indictment, and again no answers from the minister.

I'm not going to go into personal remarks, but I think that we should consider the fact that it was alleged that the minister was perhaps more of a presider than a manager and that perhaps he should take a more active role in working with the people beneath him. I think that I have had that suggestion from many sources who were not, by the way - at least I've never thought of them as being -supporters of new democracy in this province. These individuals, who probably have open minds and possibly have voted in other directions in the past, have expressed the feeling that the ministry is being run on the basis of technocratic decisions and that the minister himself is party to that particular policy. Also I found it curious to have a statement made that there was an insensibility on the part of the ministry to good ideas, which are shot down because they don't conform to some government policy "you've never heard of before and which you probably feel was made up on the spot as a convenient and unarguable way of saying no." Mr. Chairman, I find that kind of an allegation doesn't lead to confidence in the province's concern for health care and for the efficient administration of hospitals in general.

I would also like to reiterate the statements, which we made many times in the past year, about how the government should be

[ Page 1763 ]

dealing more and more with preventive care and preventive levels of medicine, which I believe it is paying lip service to but not in fact taking part in. There has already been a tendency on the part of the medical practitioners in this province to not have their patients overstay. The average patient stay in B.C. hospitals has come down in the last few years. Hospitals which had acute-bed shortages of a few years ago have seen those shortages in some cases partially alleviated by the fact that the medical profession has taken it upon itself to treat patients, if possible, more and more as out-patients. I commend them for it and I would really wonder what-the govern-ment is doing to encourage this trend, not only among the practitioners but also among the general public. Certainly if the ministry were more involved with prevention and general health rather than sickness, it would be a tremendous saving to the taxpayers of the province of British Columbia.

Mr. Chairman, I talked initially about what I feel is the unnecessary and unwarranted intrusions of the Ministry of Health into the private sector under the auspices of the longterm care programme - an intrusion which, rather than encouraging the construction of new facilities, was in fact destroying any hope of the private sector constructing new facilities and, indeed, placing in jeopardy the continued operation of some facilities which have been operating for a number of years.

I have some concerns about the operation of the speech therapy and audiology division of that ministry, in the area of the celebrated question of the hiring of people from outside of this country. The minister, to my knowledge, has never given any answer whatsoever -let alone a satisfactory answer - to the questions which have been posed by the member for North Vancouver-Capilano (Mr. Gibson) and others as to how he can show that, in fact, graduates of the course in UBC are not adequate for his purposes. Nor has he shown the House what steps he may be taking to correct that.

It makes no sense whatsoever to have spent millions and millions of dollars in a continuing way on training individuals into a profession in B.C., and then the government itself will not hire them. 1 always find it curious that other semi- and quasi-government agencies do not have the same hang-up. It's interesting to note that the UBC graduates who aren't good enough for the Ministry of Health are good enough for the private sector in British Columbia. They are good enough for hospitals when they need these kinds of professional services, and they are good enough for government agencies such as the Workers' Compensation Board; but they're not good enough for the Ministry of Health. I'd be interested if the minister could tell us in what way specifically these people are not adequate, and what steps he is taking - in consultation with his colleague, the Minister of Education - to convert this useless tax drain. This procedure is terribly disappointing to individuals who have taken the course in good faith - and who probably got good marks - to find employment with the government service. Simply importing people - not even from other provinces in Canada, where they have long-established faculties in this area, but from other countries - makes no sense whatsoever.

I want to talk about what I think, as I said, is the ministry's totally unnecessary and irresponsible intrusion into the private sector with regard to the hearing-aid dealers in this province. On many occasions the minister has said that the ministry has no intention of competing with the private sector in this regard. He said that his programme does stand on its own two feet. I ask the minister to show this House how indeed his programme is self-supporting with regard to the testing and dispensing of hearing aids. Certainly it has performed a tremendous service in areas where the service in the private sector was either non-existent or totally inadequate. I would like the minister to advise the House how he can possibly justify the intrusion made into the private sector, when on numerous occasions - both before he was Minister of Health and since he has been minister - he has stated that he has no intention of using an individual's tax money to turn around and put him out of business. I would like Lo have him show us how in fact he is delivering in those areas that were - and in many cases still are -adequately served by the private sector, where there are no complaints or established malpractice charges through the hearing-aid board, to which he has the exclusive right to appoint people.

How can he possibly justify the establishment of clinics when there is no professional indication that these are, in fact, needed? Certainly there is a mutually agreeable need for assessment, a mutually agreeable need for identification of individuals with problems. I believe that everyone in British Columbia, including the dealers, would welcome these aspects of ministry activities. What has been found reprehensible by this side of the House and found reprehensible by many people out there in the electorate is the fact that Linder the guise of doing a few things which were

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badly needed and overdue, and under the statement that something could be worked out - on numerous occasions the minister has said that something can be worked out with the dealers -in fact, the ministry is proceeding in many cases to simply take away the customers of the people who are already in the business. Mr. Chairman, I really would like to know how the minister has allowed this to happen and how he intends to curtail the activities of his ministry so that public funds will not be used to put any private businessman or professional person out of business. Certainly this never happened under the former government.

I think it's rather significant that one of the hotliners in Vancouver, in a programme I was listening to, asked one of the individuals who was involved, a representative of the dealers: "Well, what would you think if this happened under an NDP administration?" The individual replied: "Well, it did not happen under an NDP administration. Never in one case was public money used to put a private individual out of business." Yet it's happening under a Social Credit government. The hotliner came back and said: "What about ICBC?" and the man made the point. He said: "No insurance agents were put out of business through ICBC."

Mr. Chairman, the minister wants to respond. Thank you for your indulgence.

HON. MR. McCLELLAND: Yes, I can hardly wait. Mr. Chairman, perhaps I'll start at the beginning of the member's comments and work down, but while I'm doing that, maybe with regard to the hearing aid programme, the member would like to discuss his thoughts with the former Minister of Health (Mr. Cocke) , the member for New Westminster. I'm sure that they could have a mutually beneficial discussion together although they probably don't agree.

Mr. Chairman, dealing with the long-term care problem, I find it difficult to understand some of the comments of the member. Sure, some of the programme was transferred over from the Human Resources ministry. We've never made any secret of that. Nobody ever made any secret of that. There was a budget under Human Resources for some of the people who were being cared for in some homes of about $40 million.

Our budget this year for long-term care is $120 million. There were about 6,000 to 7,000 people under care in the previous programme. There are now probably 17,000 under care.

It was true, as he said, that people who were truly in need could get care through the Human Resources ministry. But what the member doesn't understand is that that's the very reason we moved in and expanded this programme, because we didn't want people to have to wait until they had expended all of their life savings, until they had mortgaged their homes, until they had nothing left and they were destitute. This government wanted to move in and allow those people to maintain their dignity before they had to reach those kinds of debts, and that's what the government has done. So instead of 6,000 people in care, there are now 17,000 in care. There was hardly simply a reorganization.

The rate structure that the member talks about is not correct. Previously the flat rate for personal care was $340, and $500 for intermediate care, not $750 as stated by the member. So there is quite a significant difference. I might say that that rate was negotiated on the basis of an average rate for all of the non-profit facilities. In other words, what our staff did was to take all of the rates for non-profit facilities. They took an average and they came up with a rate which we felt would also be applicable to the private facilities. That rate was not imposed without a number of meetings with the private-care facility operators, many of which I attended myself, and many others which were attended by members of the staff in developing these. It was with the private operators that these fees were negotiated and accepted by the private operators. To this date - I don't have the exact figure available - about 90 per cent of all of the private facilities in this province are now part of our long-term care programme. They've come in freely of their own will to take part in a programme that they know is a great stride forward for the people of British Columbia.

MR. D'ARCY: Their own free will: they could go out of business or they could join.

HON. MR. McCLELLAND: What do you mean, go out of business? There are some who aren't in and, as a matter of fact, there are some nonprofit facilities which decided not to join in for one reason or another. Some of them wished to restrict their admissions simply to people of their own faith, perhaps, in those kind of institutions, or there may be other reasons. We fully accepted that.

But over 90 per cent of everybody who's involved is in this programme, and they're in at rates which, as I say again, were negotiated with them, and they'll be renegotiated when necessary. For the first time we aren't dealing with these people in a knee-jerk way. It's a programme which they understand and which we understand and which we'll be able to deal with in a rational way year by year.

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You asked about double billing. The kind of double billing that you described does go on and I don't know how we could stop it. Frankly, what happens is that a person continues to pay rent for their home while they're in an acute-care hospital - the same as you or I do - and we also pay the acute-care bed rate as well. That's the way things work out and I don't think you'd really want it any other way. These places are their homes and we wish to maintain them as their homes; that's another concept of the whole programme.

The member asked, Mr. Chairman, if there were any recent developments in the business of the cancer control agency of British Columbia. I must say at the beginning that there was no budget cut; the budget was negotiated again as it is with every hospital in British Columbia. But there have been a number of things that happened with the cancer control agency in the last little while. We've had a lot of meetings with them and we're getting their capital programming moving. As the member will know, there is a $15 million approval for a capital programme for the cancer control agency of British Columbia. We've relieved the cancer control agency of the cash flow problems that they had.

As to the member's suggestion that we look into their problems and negotiate those with them, that's what we're doing. Our staff has been totally involved in the last several weeks in making sure that hospital budgets get out on time this year. That's now pretty well cleared up, and so our staff will be making personal visits to a number of agencies and hospitals who are experiencing some special problems, as the cancer control agency is. They'll be doing on-site inspections of those, including the cancer control agency, within the next few weeks.

We have a couple of other urgent problems that our finance people must deal with, and those include some deficits of hospitals around the province and year-end adjustments that need to be straightened out for those hospitals right now. As soon as our staff has cleared those things away, that kind of in-depth review of the kind of problems that have been presented to us by the cancer control agency will be looked at and a solution will be found.

It's interesting that the member asks about the cancer control agency reverting to a public agency, a public society. It used to be one until the previous government split it into two different societies; it was a public society. We're going to talk to them about that. We think it's unwieldy the way it is right now. Certainly there should be some public membership on there. There are two people appointed by the Ministry of Health on their board and I assume that the reason the Lieu tenant-Governor-in-Council is asked to approve certain people to represent the government on councils like cancer is to have those people representative of a wider community. That's what is done now, we hope. I have made two appointments to that agency, both of whom I consider to be good representatives of the public at large. But there will perhaps be further changes.

Riverview is the same. We're discussing Riverview very seriously, and I expect that it won't be very long before we announce that there will be some public participation in a board of Riverview hospital - when we're able to establish one. I can also say that - the announcement: was made a short time ago - a fast-moving, fact-finding committee to look into complaints at Riverview is in its final stages. Today, as a matter of fact, I have put all the names together and they will be going forward to cabinet for approval in the next few days, and that's happening now.

I guess the next question that was raised had to do with the whole UBC teaching hospital business. I don't intend to go into that debate again this year. I think we had enough of it last year. That hospital is under construction. It's ahead of schedule and it's coming in under budget. The announcement that was made about the $16 million from the federal fund was not expected to be any more than $16 million. The whole fund ums $25 million and it will be used for teaching facilities. But as that member knows, of the total budget that we announced last year for UBC teaching facilities, $17 million of that total budget was not meant for the campus hospital, but rather is being spent on the existing teaching hospitals downtown. So a part of that also will receive some of that federal fund, which, as the member knows, is to be used only for teaching facilities.

The extended-care hospital, the Dr. Harry Purdy unit on campus, is being used extensively for teaching. Now there isn't the kind of teaching going on there that one would expect to see in the corridors of Vancouver General or St. Paul's or Shaugnessy or, in fact, what will be going on at the new hospital once it gets its doors open. But there is teaching going on at that hospital, and quite a lot of it. It is the kind of teaching for which that hospital was designed, but the full force of the new teaching facility on campus will only be realized when that hospital opens its doors. We have moved ahead of that time to put together a committee of UBC people, hospital

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people and our own ministry people to develop a policy for sharing between ourselves and the Ministry of Education that kind of cost for campus or off-campus facilities. I think it's the first time, again, that there's been some rationale to be developed in terms of what gets developed where, and that's what we're doing now. That policy will be ready when the hospital is ready, and perhaps before. In fact we know it will be sometime before.

Many of the questions that were raised at the British Columbia Health Association convention were answered by the president of that association in his speech to the delegates. But I can say that there sure has been concern over the years from hospital trustees about operating budgets, and still is. It's a very complicated, drawn-out affair that people need to go through to provide for the operation of the province's 100 hospitals or so. But it's about a $600 million a year budget, paid for by all of us as taxpayers, and it's to be expected that it would not be a simple matter to develop those budgets. For the first time ever, we have managed to get those budgets out to the hospitals earlier than has ever been done in the history of this province. There are, I think, only a handful of hospitals today left without their budgets for this year; and that's unprecedented in this province. We know that in previous years it has been June, July, August and in some cases September before a hospital got its budget -eight or nine months after the hospital started its budget year, before it knew how much money it had.

Well, this year for the first time within 30 days, or not much more, of the hospital's budget year - because it now coincides with our year - we have those budgets out. We made that a promise to the hospitals and we told them: "If you get your budgets into us, we'll approve them within a month." For those hospitals that did, we did. We've said to them that if they don't, then they can expect to wait. I think that's fair enough. It's an unprecedented thing that's happened this year.

I don't know who complained about insensibility to new ideas in the ministry. I think that of anyone, the British Columbia Health Association knows that we have an open-door policy in my office. Those people meet with me on a very regular basis, as does everybody else in the health-related field. We have regular meetings now with everybody involved with delivering health services to the people of this province.

As a matter of fact, in the whole matter of budgets, hospitals have been complaining about budget procedures for years and years. So I've said to the British Columbia Health Association: "If you've got some ideas, bring then to me." So the association has now got some funding from us and they are now embarking on a study to decide whether or not there are ways in which we should be changing budgeting procedures. If better ideas come forward, we'll accept them. But they have those ideas, they say, and we're going to ask them to bring them forward. If they're good ones, then everybody in B.C. will benefit.

Mr. Chairman, there were some questions about hearing aids, but with your permission at this point, I'll answer them after we have all had the opportunity to have some supper.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mrs. McCarthy moves adjournment of the House.

Motion approved.

The House adjourned at 5:54 p.m.