[ Page 2341 ]

CONTENTS

Routine proceedings

Nutrition Awareness Act (Bill M 219) Mr. Mussallem.

Introduction and first reading –– 2341

Dykes Maintenance Amendment Act, 1978 (Bill 16) Hon. Mr. Nielsen.

Introduction and first reading –– 2341

Oral questions.

Location of Premier's staff. Mr. Lea –– 2341

Performance of autopsies. Mr. Lauk –– 2342

Premier's expenses. Mr. Gibson –– 2343

Statement

Service of member for Atlin (Mr. Calder) Mr. Speaker 2345

Hon. Mr. Bennett –– 2345

Mr. Lea –– 2345

Mr. Gibson –– 2346

Mr. Stephens –– 2346

Routine proceedings

Forest Act (Bill 14) Second reading.

Mr. Lockstead –– 2346

Mr. Gibson –– 2348

Mr. Stephens –– 2363

Mr. Shelford –– 2364

Mr. Macdonald –– 2367

Presenting reports.

Select Standing Committee on Standing Orders and Private Bills third report.

Mr. Mussallem –– 2370

Select Standing Committee on Agriculture report: "Weeds in British Columbia."

Mr. Bawtree –– 2370

The House met at 2 p.m.

Prayers.

MR. ROGERS: Mr. Speaker, my introduction this afternoon may be just a little bit lengthy, but I trust the members of the House will bear with me.

Last week the Provincial Secretary asked me to attend in Seattle ' on behalf of the government of the province, a function that took place with the Boeing Aircraft Company. In doing so, I decided to select a method of transportation that would be most enjoyable. So last Thursday I absented myself from this House at about 3:30 in the afternoon and boarded the S.S. Marguerite for a trip to Seattle. In the process of doing so, I was taken on a tour of the vessel from the bridge to the very back of the propeller shaft. The tour included the galleys, the bars and everything else on board this magnificent vessel that we own.

When we had completed the tour, one of the crew members asked me why none of the other members had been down, or not enough of our members had been down. I was short for an answer, so I said: "Well, how many of you have come to visit us?"

So with great pride today, Mr. Speaker, 1 introduce the master of the S.S. Marguerite and 20 members of the crew who are here to visit our proceedings on the arrangement that we all take a chance when we have the opportunity to go and visit with them aboard their vessel. 1 would ask the members of the House to welcome the master of the vessel, Douglas Adlem, and members of his crew who are here with us today.

HON. MR. NIELSEN: Mr. Speaker, touring the buildings today and later to be seated in the gallery, I'd like to recognize 35 students from Cambie Junior Secondary School in Richmond. They'll be accompanied by their teachers, Mrs. Taylor, Mr. Armstrong and Mr. Gordon.

Also, later on this afternoon we'll be hosting students from Kars Middle School in Kars, Ontario, part of the Open House Canada exchange. They as well will be accompanied by their teachers and ten students from the J.M. Burnett Junior Secondary School in Richmond.

Mr. Speaker, just of interest, today closes out the touring season for the youngsters. Richmond has seen 1,550 students view the buildings this year.

MR. STRONGMAN: Visiting with us today are three people from various parts of the world. First we have Mr. Charles Flemming, well known to most people in our House as the attorney for the city of Vancouver. With him are two guests of his, two young men, Mr. Rupert Walters and Mr. Chris Hinton of England. Both young men are going to be entering Oxford University this coming fall. I would ask the House to wish them well in their future educational endeavours and to also wish them welcome in British Columbia.

MR. SHELFORD: In the gallery today is a very well-known doctor from Kitimat, Dr. David Kuntz, and I hope the House will make him welcome.

MRS. WALLACE: I am rising today on behalf of the member for Comox (Ms. Sanford) , who is unavoidably out of the chambers, and on her behalf I would like to advise the House that some 20 grade 5 students from Alert Bay Elementary School will be touring the precincts later this afternoon together with their teacher, Miss Kathy Swanson. I would ask the House to join me in welcoming them.

Introduction of bills.

NUTRITION AWARENESS ACT

On a motion by Mr. Mussallem, Bill M 219, Nutrition Awareness Act, 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.

DYKES MAINTENANCE

AMENDMENT ACT, 1978

On a motion by Hon. Mr. Nielsen, Bill 16, Dykes Maintenance Amendment Act, 1978, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral questions.

LOCATION OF PREMIER'S STAFF

MR. LEA: I have a question to the Premier. Could the Premier confirm that Mr. Tozer of his office has worked in his Victoria office since the latter part of 1975?

HON. MR. BENNETT: Mr. Speaker, this relates to questions I took on notice that I guess were not covered during estimates in the first three sessions of the Legislature. The question was from the member for Prince Rupert

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(Mr. Lea) , who asked about four members who work in my office. John Arnett, press secretary to the executive council, was hired in March, 1975, in the Education department of the former government, and his base has always been Victoria. Mr. David Roach, information officer, executive council, was hired in April, 1975, by the same government and his home base has been, then and continuously since then, Victoria. Mr. Tozer was hired by order-in-council 3863, dated December 23,1975, in which he took immediate occupancy and residency in Victoria. His home base has been Victoria since that time. Mr. David Brown, after a period as a consultant for the government, was hired effective September 1,1976. Mr. Brown during the first three months of his operation was based in Vancouver. Since that time he has been based in Victoria.

MR. LEA: A supplementary. From the date of order-in-council 3863, which was December 23,1975, until the end of March, 1976, during which time Mr. Tozer was based in the Victoria office, Mr. Tozer had an expense account of over $4,000. At the same time the Premier had an expense account of just a little over $400. 1 wonder if the Premier could tell us what those expenses were for Mr. Tozer that they were so high. Was he traveling a lot?

HON. MR. BENNETT: Mr. Speaker, 1 suggest that the member go to public accounts, where all vouchers are documented, and if he wishes to put detailed questions on the order paper, I'll attempt to bring detailed answers back to him.

MR. LEA: A supplementary. Does the Premier feel that it is not unusual that for someone based in Victoria, working in the Premier's office - the executive assistant of the Premier - his expenses would be over $4,000? Obviously if he were traveling with the Premier his expenses should be somewhere down where the Premier's were, around $400. Has the Premier no idea of why Mr. Tozer's expenses would be so much higher than his own?

MR. SPEAKER: Before the hon. Premier answers, I would like to say that Beauchesne suggests in section 171 that public information which is commonly available to all must not be asked in question period. Is this in that area?

HON. MR. BENNETT: Yes, Mr. Speaker, I was just going to suggest that this is information that any hard-working member of the public accounts committee could get. As such, I'm sure it will be made available to them, as all such accounts are made available.

MR. LEA: Would the Premier say that the suggestion that maybe Mr. Tozer's room and board was paid by the people of this province during that time may be an accurate description of the expense accounts?

HON. MR. BENNETT: No, I would not be able to state at all that any assumption by the member for Prince Rupert would be accurate in any assumption he might make.

MR. LEA: A supplementary, Mr. Speaker.

MR. SPEAKER: Hon. member, in deference to other members of the House, I suggested that perhaps the last question was the final supplementary.

MR. LEA: You're suggesting that the last question was the final one?

MR. SPEAKER: Yes, hon. member. We've had three or four.

MR. LEA: That's fine.

PERFORMANCE OF AUTOPSIES

MR. LAUK: Mr. Speaker, to the acting Attorney-General, on January 17,1978, Associate Deputy Attorney-General Pearson sent a circular around to coroners discouraging them from ordering autopsies. On May 9,1978, Leroy Wannebo of Langley was murdered. On May 9,1978, Leroy Wannebo was taken for an autopsy. Somehow no complete autopsy was performed or none at all, and the death certificate was signed with no suggestion of foul play. Because of an amazing coincidence, a private citizen found bullet fragments in the deceased's car and an autopsy was then performed, revealing that Wannebo died of gunshot wounds.

Mr. Speaker, will the Attorney-General's ministry now agree to withdraw Pearson's notorious and dangerous memorandum to coroners of January 17,1978?

HON. MR. WILLIAMS: Mr. Speaker, I thank the member for giving me advance notice of this question and I have a partial report at the moment. May I say, however, that I am more than a bit surprised that the honourable and learned member would refer to the death of Mr. Wannebo as being murdered, because, as he well knows, that qualification will have to depend on the outcome of certain proceedings which

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are presently underway in the courts of this province. Therefore his comment is a bit presumptuous.

AN HON. MEMBER: Only a lawyer would know that.

HON. MR. WILLIAMS: But only a lawyer would know that. Mr. Speaker, it is improper for the hon. member to link this particular event to the memorandum dealing with the conduct of autopsies. In fact, in this particular case, the death occurred on Hay 9, and the autopsy was performed by Dr. Coady of New Westminster on May 10. As a result of the autopsy, the condition of the body being such that the complete examination of the head was not possible, it was determined that the death resulted from the automobile accident.

As a result of subsequent information coming, further examination was undertaken and it was found that the death might have been perhaps caused by a bullet. As a result, further investigation has been taking place and a charge has been laid.

MR. LAUK: Mr. Speaker, with respect to the acting Attorney-General's comment about my statement, the Grown has made a statement that it has laid a charge. I have not indicated that person is a murderer and I'm not offending the rule against sub judice nor against presumption of guilt or innocence.

Mr. Speaker, my question to the Attorney-General is this: would he now agree, as a matter of decision, to withdraw the Deputy Attorney--General's memorandum which, I must submit to the acting Attorney-General and to the government, is a very dangerous memorandum? It discourages autopsies in proper cases.

HON. MR. WILLIAMS: Mr. Speaker, the circumstances here do not justify the withdrawal of the memorandum. This was a proper case and there was an autopsy. Therefore, in spite of the member's concerns, I think that the memorandum is not interfering with the proper conduct of the work of coroners in this province.

MR. LAUK: Mr. Speaker, it is clear that, if it wasn't for the coincidence of a towtruck operator seeing that there were bullet frag-ments in the car, the man would be buried and there would be no evidence and no suggestion he was killed by foul play. Is the Attorney-General suggesting that, if that coincidence did not occur, a further autopsy would have been made? That's not the evidence I have. Could the Attorney-General confirm that?

HON. MR. WILLIAMS: Mr. Speaker, the matter is still under examination and I will be happy to provide any further information that comes from that examination.

PREMIER'S EXPENSES

VERSUS SCHOOL BOARDS AND COUNCILS

MR. GIBSON: I have a question for the Premier. The Premier has said that people would defeat high-spending politicians at the ballot box. I note, Mr. Speaker, that the total expenditure for the Premier's office has gone from $331,000 in 1975-76 to $753,000 in this current year. In view of the fact that the Premier's vote has increased by 127 per cent in three short years, does he include himself as one of those high-spending who should be defeated at the ballot box?

MR. SPEAKER: Order, please. Hon. members, I would submit that the question is argumentative, but I can't wait for the answer. (Laughter.)

HON. MR. BENNETT: It's unfortunate that during a large part of my estimates when this was explained, that member was out on his campaign for the federal Liberal nomination. We told those members of the House who chose to be present - and it's in the record, so you could have found it in the Blues - that the cost comparisons between the Premier's office and the number of functions it has taken over from the Ministry of the Provincial Secretary....

MR. LAUK: Guilty.

HON. MR. BENNETT: It's bad enough for the member for Vancouver Centre to talk about murder; he murders the decorum of this House every day he sits.

In answer to the member, we took into the Premier's office the function of the former planning secretariat that was under the former government, and also the function of intergovernmental relations.

I related quite concisely for the members of this assembly what those functions cost in other provincial governments. We found out, much to our amazement, that the cost per taxpayer in British Columbia for running those functions was about 21 cents. It's almost $3 in Alberta. In those provinces that have Liberal governments or NDP governments it is substantially many times higher than in British Columbia.

If the member for North Vancouver-Capilano (Mr. Gibson) wishes to suggest that those

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Premiers are high-spending politicians under the definition I gave, then he has an obligation to campaign in those areas to get rid of high-spending politicians. The best economy has come from the Premier of this province and the Premier's office. I'm glad the member gave me a chance to put on the record once more for the people of British Columbia that our expenses are the lowest in all of Canada; it's lower than even the small province of Prince Edward Island.

MR. GIBSON: A supplementary question: now that the Premier has brought forward what he considers extenuating circumstances on his own account, would he agree that the municipal and school board politicians whom he has been maligning should be judged on the basis of their expenditures rather than on the changes in property tax and other revenues that vary so wildly at the whim of the provincial government?

HON. MR. BENNETT: I stand on my expenses, and I also take issue that I have maligned officials on the municipal level and on the school boards, and let me just...

Interjection.

HON. MR. BENNETT: What did you say?

MR. GIBSON: I said you called then sneaky.

HON. MR. BENNETT: I said any.... My interview, which was quite extensive - and I don't remember you being present...

MR. LAUK: I was present.

HON. MR. BENNETT: ... for the full time. And I would want someone with a better memory than the member for Vancouver Centre....

AN HON. MEMBER: He has an excellent memory.

MR. LAUK: I know when I'm wearing seatbelts. (Laughter.)

HON. MR. BENNETT: It's too bad about your accident.

Anyhow, in talking about assessments, I explained the assessment procedure and how taxes were arrived at at the municipal level. I explained to the press at that time....

Interjection.

HON. MR. BENNETT: I am answering the question, Mr. Speaker.

MR. LEA: Let him go; we need the votes. (Laughter.)

HON. MR. BENNETT: I explained how municipal councils set their own budgets, hire their own people, develop their own programmes, and I also mentioned how they had 20 per cent more money from the provincial government this year - which is the first government in Canada to provide revenue-sharing. I said it would be a shame if under the equalization of assessment - when there is no need for the broad assessment levels to go up to increase taxation -any municipal council would sneak up their taxes and blame it on assessment. I said that would be sneaky and that anyone who did it would be sneaky.

However, I don't expect that applies to all municipal councils, or councillors, nor did I use that in the context of school trustees. MY remarks about the school trustees dealt with the fact that school trustees were responsible for developing their budgets. I think the Minister of Education (Hon. Mr. McGeer) has made quite clear that the actual costs are under their control - as in a school district like Coquitlam, where the student population has dropped significantly and they've hired 36 more teachers. Now they should say that's an extra cost, and they should tell the people why they're spending that extra money.

MR. SPEAKER: The bell ends the question period.

MR. LAUK: On a point of order, Mr. Speaker, on several occasions after question period, you have pointed out that questions should be brief, to the point and answers should be equally brief and responsive. It was clear to me that the First Minister, who is trying to waffle out of what he clearly said before, was asked a straightforward question and took up about half the time of the question period. I ask leave of the House, therefore, Mr. Speaker, to extend question period for 10 minutes.

Leave not granted.

MR. LAUK: Mr. Speaker, I ask leave of the House to extend question period for five minutes.

Leave not granted.

MR. SPEAKER: HON. member, if time is not provided for ten minutes, it is not conceivable for five minutes.

MR. LAUK: Just give me 15 seconds.

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MR. SPEAKER: Hon. members, just on the point that the member raised, I would like to observe that the Chair did suggest that when the question was initially asked it was argumentative. I think that perhaps the Chair has tried valiantly to be sure that questions are framed in the proper form. I have tried to assist hon. members. However, if the House wishes, I can rule questions out of order forthwith.

MR. KING: Mr. Speaker, I think the Chair has done an admirable job of trying to control question period and I appreciate and sympathize with the Speaker. If the Premier's parents couldn't control him, I don't think it falls to the Speaker to control him in question period.

HON. MR. BENNETT: I ask leave to provide an answer which 1 received quickly to a suggestion of a question by the member for Prince Rupert.

MR. SPEAKER: Answer to question taken on notice? Please proceed.

HON. MR. BENNETT: That was the allegation that Mr. Tozer of my office received room and board during the period in Victoria. That is not correct., it has never been paid. What was in the expenses in that period was the movement: of household effects, which is a part of the contract for all people relocating in Victoria, should they choose that option when being hired by the government. It is done under normal government hiring procedures. Just in advance, before the press might get caught up in that reckless allegation, I would like to reiterate that no room and board 'was paid.

MR. SPEAKER: Hon. members, today is a day on which we would like to honour one of our number who has served this House for 25 years. In honour of that occasion, I intend in a few moments to declare a short recess when we will repair to the Ned deBeck Lounge and celebrate suitably.

.The member is the member for Atlin (Mr. Calder) , and perhaps all members would commend him at the moment for his long service not only to the constituency of Atlin but also to the province British Columbia.

HON. MR. BENNETT: Mr. Speaker, before your adjournment, let me on behalf of the people of the province, as the Premier, pay tribute to the member from Atlin, Frank Calder, who has served not only the native peoples of this province but all the people of the north and all the people of British Columbia.

Frank Calder was the first native Indian, Mr. Speaker, elected to a parliament in Canada. He was elected in 1949, serving to 1956, and again from 1960 to the present. He was the first native Indian minister of the Crown in Canadian history. As such, he will always hold a unique place in our parliament and in the hearts and minds of his people for breaking this ground and leading the way to public service and being part of the government structure in this country. For that, he'll always be remembered.

But Frank Calder, the member for Atlin, has never taken a narrow view. His representation has been not just for the native people but for all the peoples, and especially the people of the north. He became the voice of the north. Coupled with other members, like the present member for Skeena (Mr. Shelford) , they became the voice for an area that was isolated in small populations, in communities. They spoke for people who felt forgotten by many governments. Their representation, Mr. Speaker, then as now, crossed party lines. They stood above the party system, and they always will stand above the party system. For that, they will be remembered. People will pay tribute, because narrow partisanship never stopped them from first representing those people who felt they had no voice in the government in British Columbia. They have pressed their case very well. The transportation links and the social and economic bene fits that have come to the northern part of British Columbia have been to their credit. And Frank Calder, the member for Atlin, is just such a representative.

Let me say that he served this province well in the past in this Legislature and he serves today on three standing committees of this House. I want to say that he has been an inspiration to his people, to British Columbians, and all Canadians, and I know that all British Columbians from all parties will recognize and pay tribute to the tremendous job and the tremendous things that Frank Calder has done and will continue to do on behalf of all people.

MR. LEA: The member for Atlin began his political career long before it was popular in a great many circles in this province to be an Indian. I think it is much easier being a person who speaks out for Indians and being an Indian these days, in terms of social acceptance and in terms of every kind of acceptance, than it was in those years when the member for Atlin began his career in

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politics.

The member for Atlin has followed his democratic choice through his political career and there is no one, I would say, within this Legislature or within this province who would deny anyone the right to follow his political choice. He has done that throughout his political career and has served this House long and well.

MR. GIBSON: Mr. Speaker, to put some perspective on the period of service of the hon. member for Atlin, he was elected to this Legislature for the third time on the same election that my father came into this Legislature for the first time. His service to this House spans a very long time and he has had many adventures since those days. He has performed extraordinary service over the years, not just to the people of his riding, but in particular to the Nishga people in their long fight for land claims.

I am very glad to join with the rest of the House in this general congratulation.

MR. STEPHENS: Mr. Speaker, as the newest member in the House to the one who has been around the longest, I have a great admiration for your stamina, sir, and I pray to God it will never happen to me. (Laughter.)

MR. SPEAKER: Hon. members, I declare a short recess. The time to reconvene will be when you hear the division bell.

The House took recess at 2:43 p.m.

The house resumed at 3:17 p.m.

[Mr. Rogers in the chair.)

Orders of the day.

HON. MR. WILLIAMS: I move the House proceed by leave to public bills and orders.

Leave granted.

HON. MR. WILLIAMS: Adjourned debate on second reading of Bill 14.

FOREST ACT

(continued)

MR. LOCKSTEAD: Yesterday I outlined a few of my concerns regarding the principle of this bill. I have a few minutes more here on a couple of areas that I'd like to discuss before I take my seat.

I didn't have the opportunity to express one of my main concerns with the bill - the fact that if this Act is passed in its present form, even if we changed governments, this bill is irrevocable. What I'm getting at is this: this is part of the principle of the bill under which holders of TFLs in the province will have signed contracts in perpetuity on timber rights, which involves most of the province. Even if we wanted to change that section when we become the government again and we wanted to change that section of the Act in terms of tenure, the fact is we'd find that very difficult to do because the first thing, of course, that will happen is the large forest companies will take the matter to court, no matter what legislation this House passes, because they will have signed contracts. The courts, of course, will decide in favour of the claimant, the large timber company, because courts will not break contracts unless there is a very good reason.

So, in fact, what we are doing - and this is a dangerous concept - is passing irrevocable legislation. And it will pass, because the government has a huge majority over there. I'm very concerned about that particular aspect of the bill.

I'm concerned for what's not in the bill -the jobs that could be created by utilizing excess timber on the TFLs. Certainly, the way the bill presently reads means that there is no supervision. I firmly believe that we should follow the recommendation of the Pearse report, particularly where the companies are not utilizing the full potential and the cutting rights on the TFLs, that that timber should be withdrawn and made available to some of the smaller and independent logging firms in the province.

Another aspect of this bill, Mr. Speaker, which bothers me a bit is the industry's method of selling and trading logs. What this really means is that about 92 per cent of the log market is essentially handled and controlled by eight forest companies in the province; and they trade amongst themselves, even though they're competing with each other. They set log prices artificially. Only 8 per cent of the log market is truly independent and so-called free, and even that is not independent and free, because most of the small independents - well, some of them are not so small - are not integrated companies and have to depend on the large companies to survive. So they keep pretty quiet, and log prices are arrived at artificially. But what this really means is that the people of the province are not receiving the fair return for the resource.

I would personally not be opposed to some

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type of log marketing board, if you like, where all the timber in the province must be channelled through this board. This would do a number of things: first, ensure that the people of this province receive a fair return in terms of stumpage and royalties to the Treasury Board, which will provide for some of the many social needs that we require in the province and people are demanding; secondly, such a system would make sure that the smaller, independent, unintegrated manufacturer would have an assured log supply; and, thirdly, it would make it possible for new people to enter the field and get into the manufacturing end of the industry - perhaps the pulp mills and the milling end of it. And so I hope that the minister will consider that particular aspect.

I'd like to turn now to some correspondence I received this morning from the Truck Loggers' Association. It's lengthy, and I won't go into details because they suggest a number of amendments to the bill. But I think I should read this covering letter signed by Mr. David O'Connor, president of the Truck Loggers' Association. It's addressed to all MLAs. I think these three short paragraphs are worth reading into the record. I think Mr. O'Connor expresses here the concern and the views of many in the industry throughout the province regarding the items we have discussed so far under this bill.

"To all MLAs:

"Attached is the view this association released June 9,1978.

"Like most observers we agreed with government statements of the purpose of the Act, but on reading the fine print we recoiled. We find it bad legislation that must be amended.

"The only major group supporting Bill 14 is the Council of Forest Industries, which speaks for the foreign-owned companies. That is because Bill 14 protects their control of timber and the log market and it weakens the role of the domestic operators.

"The government first told us the Act would be held over for examination for several months. Now it is to be rammed through with a closed mind. The government has taken the posture of enlarging the monopoly of the public resource in the hands of eight multinational companies, and reissuing the excessive volume of timber they now control with immunity from public scrutiny..."

I think I spoke about that yesterday, Mr. Speaker.

"...without evaluation, utilizing criteria otherwise required in the statute, and freed forever from adjustment otherwise applying in sections 52 to 56."

Then they go on to list the proposed amendments. It ends up with this final paragraph:

"We hope you will study the foregoing and participate in the legislative debate. It is probably the most crucial forest policy issue ever faced by IAs. Please do not repeat the mistakes of the past, so well recorded in the 1976 report of the royal commission on forestry. Bill 14, if not amended will do exactly that."

I think, Mr. Speaker, that nobody can accuse the Truck Loggers' Association of being exactly a socialist organization. I would think that the minister would at least take the Truck Logger s' Association suggestion seriously. The minister still does have time to make proper amendments if he so chooses.

Mr. Speaker, I have a couple of notes 1 made to myself here. My problem seems to be I can't read my writing. But we'll do the best we can. I was going to discuss for a minute stability in the industry. We've discussed free enterprise and monopoly a lot in debate to date. The fact is, Mr. Speaker, we are tied into a system in terms of the forest industry, to make sure that that industry remains stable. We're not necessarily opposed to TFLs. We're opposed to the way this bill reads in terms of TFLs because it gives the timber away forever and that's wrong. We understand that the large companies, in order to modernize, in order to plan ahead, must have some security of supply and some tenure, and are noted to have a stable working force. We recognize the need for this. We also recognize that, in many areas, only the large companies can afford to purchase the equipment, build the roads and put in the necessary front-end capital expenditures. So I want to make it very clear that we on this side of the House do recognize the need for some kind of security of tenure for these companies.

But you just can't expect the multinationals, of the size that is necessary to get a TFL, to adopt as one of their interests a reliable supply to some of the small enterprises. I spoke about this briefly when I discussed the marketing board concept. But the fact is that the large companies, while they look after their own interests first, ensure that the people on the tail end will once again be the little guy and the little manufacturer - and, right now, people in speciality industry. People who manufacture mouldings for the domestic market and all kinds of special types of wood materials for home building simply can't get wood. There's a

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shortage of cedar. I've had several of these small manufacturers complain to me that they are unable to obtain a sufficient amount of wood at a reasonable price to continue their business.

Mr. Speaker, I have one or two other things. I think I'd like to read into the record a letter from the Truck Loggers' Association to the minister, dated June 9,1978. 1 don't know if this was read into the record before or not because I was out of the House part of the time yesterday. But I think in terms of my own riding. If it has been read into the record I'd like to do it again so that people, at least in my own riding, will know the feelings of the people who sent this piece of correspondence. It's quite brief. This is a copy of a letter to the minister from David O'Connor, president of the Truck Loggers' Association. This covers a confidential memo which I won't read because I know that was read into the record yesterday.

"I attach hereto a copy of a report by the Council of Forest Industries, in which it is implied that you are trying to find a politically acceptable way to neutralize contractors. The implication of the report is if COFI members throw a few crumbs to contractors, the new Forest Act will not be opposed by this association and others.

"Mr. Minister, I am directed to remind you that it is the efficient specialist who provides benefits under sections 27 (5) (a) to (e) inclusive. In short, the private enterprise system with competition does work and monopoly control of public resource does not, and 25 years have proven it."

"However, most particularly after your comments at the Premier's breakfast, saying that we just want some timber to get into manufacture, we have to ask why not. But more particularly, the comment indicates you do not understand the Truck Loggers' Association represents citizens involved in lumber, plywood, shingles, secondary manufacture, timber owners and specialist loggers who contract everywhere, and even one operator committed to enter pulp.

"This association was founded by timber owners more than 33 years ago to defend its members from the pressure of foreign monopoly taking over public resource, and the lack of wisdom of the government in protecting and enlarging it. In that regard, the new Forest Act is worse than the old, and we will redouble our efforts to oppose it.

"We attach hereto our declaration of the objectives of our association. "Yours sincerely, "David O'Connor, Truck Loggers' Association."

So, Mr. Speaker, it is quite clear that people in the industry and citizens of this province are opposed to the bill in its present form. I would suggest that the minister rethink the bill, accept many of the amendments that were proposed and bring the bill back in a more suitable form, because the Forest Act does need overhauling, there is no question about that. It does need modernizing and overhauling and nobody would disagree with that.

If I may leave the minister with one last thought before I take my place, I realize that it is probably quite true to say that only God can make a tree, but laws are made by fools like he.

DEPUTY SPEAKER: You will have to rise and withdraw that last remark, please, hon. member. I would ask you to please withdraw your unparliamentary remarks.

MR. LOCKSTEAD: Oh, sorry. I withdraw.

DEPUTY SPEAKER: Thank you very much. Perhaps you can refer to Hansard.

MR. GIBSON: Looking around the galleries today and yesterday, I'm struck by the fact that there are not many industry people there, at least as far as I can identify the faces in the gallery.

Interjection.

MR. GIBSON: I'm talking about yesterday as well, Mr. Member. I'm not talking about the quality of the remarks.

I think this is a reflection of the fact that the big fellows think that they've got the government pretty well where they want them and they can relax, and that the little operators in the province have a little bit of a sense of despair that any significant changes are going to be made. Had they been in the gallery they would have seen the unusual and ironic spectacle of the speakers so far: the New Democratic Party being the defenders of private enterprise, free enterprise, competitive enterprise, individual enterprise, small-e enterprise; and the government, in the person of the minister, introducing and defending a bill that will perpetuate a state of oligopoly in this province, particularly in the coast forest industry.

There can be no question about the impor-

[ Page 2349 ]

tance of this bill. As is repeatedly said in this province, the forest industry is about 50 per cent of our economy, with direct employment in excess of 85,000 British Columbians of which, incidentally, 26 per cent are in the logging industry and 37 per cent in the lumber sector. So the really capital-intensive sector of the industry, namely pulp and paper, by no means provides the greatest employment.

This industry is no longer a growth industry in our province; in fact it is a shrinking industry. That has enormous consequences for us in British Columbia in view of the fact that for as long as anyone can remember it has been the engine that has fuelled the development of the British Columbia economy, and the industry is under very severe pressure from around the world.

In view of the importance of all, of this, I am frankly very disappointed with the opening remarks given to this House by the Minister of Forests when he moved second reading of this bill. The first thing he did was, minutes before he stood up, to put on the desks of members of this House a very extensive series of amendments covering some 38 different sections of the bill. I say to you, Mr. Speaker, that comes very close to being a contempt of this Legislature putting in that last-minute modification and then calling the debate immediately thereafter. It is very difficult to proceed on that basis.

[Mr. Speaker in the chair.]

There was some importance to those amendments, particularly the one that deals with deletions under section 55 and the information section under 149. 1 still believe there is too much restriction on the information and I'm not as yet satisfied with the deletion section. But they are important amendments -that's the point - and they were brought in at the last minute and that's wrong.

HON. MP. WILLIAMS: Would you rather have them in committee stage, Gordon?

MR. GIBSON: I would rather have had them a couple of days before second reading, Mr. Minister.

MR. LEA: The same as he would have four years ago.

MR. GIBSON: That's right, exactly as the same as the minister would have preferred when he was on the opposition side of this House. There is such a thing as courtesy.

The second thing that disappointed me was the short speech of the minister. He made some nice quotes from Peter Pearse. He then went on to say that the bill was written in very clear language, it spoke for itself, and he sat down.

Well, Mr. Speaker, the bill is written in clearer language than is usual in this kind of complex legislative situation, but it is still a very difficult bill with references and re-references from one section to another. In this complex tapestry, there is hidden a great deal of policy and a great deal of implied directions, which it is the duty of this House to make clear and which I suggest- in the first instance it was the duty of that minister to make clear. I say he did not do that when he introduced this bill.

Those are a couple of reasons that I think that it would be well for the citizens of this province to have another couple of months to ponder the things that are being done in this Legislation. But there's a more basic reason for giving the citizens another couple of months. That is so that they can have time to understand what is the essential impact of this bill: that a sellout is being perpetuated by the passage of this bill in this Legislature. The public needs time to understand that and to protest and to bring to bear the pressure of public opinion on the government.

The sellout continues major allocations of annual allotted cut without any review as to their necessity except in certain terms regarding undercut.

The sellout constitutes the confirmation of existing tree-farm licences for many years ahead - exactly how many years is now unclear in view of the amendments just submitted by the minister - and confirms it without any review in terms of a public hearing at any point. Because of that it will probably, in essence, confirm what we have now for years beyond even the legal requirement.

These TFLs that are being confirmed, I remind the minister, were granted, many of them, during the time in office of a Forests minister who went to jail for having taken bribes for the granting of tree-farm licences. These are immune to review as to their annual allowable cut, even though that annual allowable cut has been expanded many times between the time they were granted and today. I will go into chapter and verse on that later on.

The sellout involves the perpetuation of the monopoly position of a few large companies in the coast forest industry in this province. These are things that the people of this province deserve to have the time to understand in this most basic and most complex of

[ Page 2350 ]

our industries. The minister quoted commissioner Peter Pearse on tree-farm licences. He had a very nice quote endorsing tree-farm licences, which comes on page 86. He said:

"The proprietary interests that licensees have developed in these lands, the incentives the system has provided and the priority given them by the Forest Service have produced the highest standard of forest management in the province, a standard that in many cases is high by international comparisons as well."

That's a good quote to read. The minister somehow neglected to read page 93, which was still talking about tree-farm licences, which suggested there was perhaps something inadequate about the fact that there was too much timber supply being guaranteed. At page 93 Pearse says about new licences:

"Licences should also clearly circumscribe the government's right to reduce harvesting rates when contracts are renewed, a matter which is left open to question under present arrangements. I propose the maximum extent to which the harvest rate attributable to schedule B lands" - those are Crown lands - "may be reduced should parallel my recommendations for forest licences. For those, I propose that the bidding protection available to licensees should extend to 80 per cent of their authorized annual harvest in a 10-year contract.

"I recommend, therefore, that the government reserve the right to reduce the allowable annual harvest attributable to schedule B lands by not more than 10 per cent upon any five-year renewal of 15-year evergreen contracts."

Now isn't it strange that the minister didn't read that quote, Mr. Speaker? He agrees with commissioner Pearse when he wants to, and he doesn't mention him where he doesn't want to. He says that commissioner Pearse did a wonderful job, and he did. I suggest to this House that the recommendations of that commissioner are interwoven, and you do violence to his proposals if you pick and choose without making compensation for the things that you leave out. The core of the recommendations of commissioner Pearse related to competition in the forest industry and the central means that Pearse proposed to secure competition was removal of guarantee of the top 20 per cent of annual allowable cut and putting it up for competition, including competition by the company that used to hold it. It's a strange thing the minister didn't quote that.

The Council of Forest Industries produced a summary of the Pearse report, and under industrial policy there are a couple of things they mention. Under point (b): "Government must improve markets, especially revitalizing the coast log market and freeing chip marketing restrictions." How is the minister going to revitalize the coast log market if he doesn't free up some timber from the control of the oligopoly that now holds it on the coast?

The next line, point (c) says: "The trend to integration and concentration must be reversed and there must be provision for a wide range of enterprises and more chance for new entrants." well, as we shall see later, the combination of the minister's public relations phrase, "use it or lose it, " and the mill licensing provision section 147, operate directly against that recommendation of commissioner Pearse.

There is growing opposition to this bill in the industry. It looked all right at first to, for example, the Truck Loggers' Association, and then people started to read the fine print. A good deal of concern has arisen, and we haven't seen the regulations yet. I would suggest to you, Mr. Speaker, that that's another sad thing for this House in this debate, not to have available to us the regulations that will be so important in the administration of this Act - the regulations, for example, that will tell us exactly what a small business set aside means or if it's a sham and a fraud and there is not enough timber for it.

What does this bill do in plain language without any "use it or lose it" PR talk? It updates a very old and antique Act and does that quite well. It removes some discretion and it spells out criteria for the operation of discretion, but I would stress there is a great deal of discretion left. It sets up what would be, in the first instance, a generally reasonable legislative framework for the management of the forests. Everything is lovely, Mr. Speaker; this would be a wonderful Forest Act if it were being introduced in 1948. It would have been just the thing that was required before the tremendous alienation of timber to the tree-farm licence holders commenced.

It provides a public hearing if a new treefarm licence is to be granted but, Mr. Minister, we know that there aren't going to be new tree-farm licences granted, don't we? What are there now - 33, 34? If there are two or three granted in the next five years you'd be very surprised and I would too. What we really need are procedures for dealing with the existing tree-farm licences and, in that respect, this Act might have been written by the existing

[ Page 2351 ]

tree-farm licence holders.

Everything is fine in this Act, except it does not speak to the fact of declining employment in the forest industry in this province; it does not speak to the fact of declining public revenues; it does not speak to that lock-in of excessive control on the coast by those major companies which, as I say, might well have written this Act. It fails, even after amendments, to provide for adequate public information on the publicly owned resource base. It fails to provide adequate public input into the management of the forests, be it with respect to tree-farm licences of forest licences. It puts extraordinarily dangerous powers in the hands of the minister, some of them probably unavoidable, having to do with the transfers of ownership. But some of them are definitely avoidable, such as power to license mills. Because of its inadequacies it sets up an invitation for the change in legislation the next time the government changes.

Mr. Speaker, if I had any single hope for this Forest Act, it would be that it was an Act acceptable to both sides of the House, so that finally some stability could have been brought to the industry, and finally people could say: "We can plan. We can look down the road. There may be a change of government, but we are reasonably sure what our groundrules are, because there is a broad consensus within the political parties of this province that the legislation we are operating under is the right way to go." Because of just a few things that the minister has declined to put in, that is not possible. It would be so easy to change it. It would make a better Forest Act and it would make a healthier, leaner, more competitive industry in this province, which is going to be needed to provide jobs under increasing competition in the years to come. Mr. Minister, it is relatively easy to fix up this Act, but it is unacceptable if it is not fixed up; and it is an absolute sell-out if it is not fixed up.

I want to go through some of the basics of the world that our forest industry and the employees therein must live in. First of all, 1 want to talk about economic basics. Our forest industry is living in a rough world. Buyers can go elsewhere for lumber; they can go elsewhere for pulp and for paper. It's obvious we must provide a number of things: we must provide quality, at which our industry has always been very good; we must provide competitive price; and we must provide reliability of supply. I think that both management and labour in recent years have come to understand the importance of that third thing called reliability. But price remains critical; price means you must be competitive. In the economic field investors too can go elsewhere, and, generally speaking, they have been doing so; even our own companies are going to South America, Quebec, and other parts of the world. We must provide investors with reasonable opportunities in terms of profit and in terms of fair and predictable rules and legislation.

There are some political basics. Voters too can go elsewhere, other than to the Social Credit Party. The government had better provide the public with a fair return on public resources, employment from those resources, and the fact and appearance of management in the public interest.

There is a question of due process in deciding how to arrive at the framework for this management. The first step was the Pearse commission. It was appointed and it did an absolutely first-rate job, after hearings all over this province. It's a report the competence and calibre of which I would stake up against a resource report done for any jurisdiction in this world. It is one that the minister ignores at his peril. The minister turned the contents of the Pearse report over to the Forest Products Advisory Committee, which worked long and hard and, generally speaking, well; and, again, received representations. So far, the process is not only adequate, it is excellent. Then the suggestions and the draft legislation are received by the minister, and it is at the political level that adequate due process ends.

The minister is on record as saying quite recently: "When this bill is brought into the House it won't be passed quickly. There will be two or three months for people to have a look at it before we move for passage." It's less than one month. The minister went back on that commitment.

Last year the minister gave a commitment on his estimates that there would be opportunity for study of the principles of this bill in committee. I want to quote from Hansard of July 15,1977. In reply to a question I asked, he said:

"You asked about the Forest Policy Advisory Committee and whether it is going to meet with, you suggested, the Select standing Committee on Environment and Resources. Well, I think there are some specific questions, some of which the member outlined, which should be discussed by that committee - some of the general, broad positions such as tenure, tree-farm licences ' allowable cut, appraisal systems and so on. I'm sure the members on that

[ Page 2352 ]

committee can provide the Forest Policy Advisory Committee with some very valuable input, and I would like to see that committee meet some time later this year."

Later on he said :

"I think there is a place for discussion of some of the key policy issues in the select standing committee, and there are some things which we would now like to bring to that committee."

Those are the words of the minister on July 15,1977. That committee has been in existence since then until it was dissolved on March 29 of this year, and it has been reconstituted since. That committee in that almost one-year period has not had one day of sitting on any subject of any kind, let alone on the subjects covered in this Forest Act. I say that is a contempt of this Legislature. And worse, I say that is the minister going back on his word given to this Legislature.

MR. BARBER: Was it an oversight, Gordon, or do you think it was deliberate?

MR. GIBSON: Well, I don't know how to categorize it, Mr. Member. I just know that that minister should understand that a minister's word given to this House is something that is not easily breached. So the process that this Act has taken to reach the current state has not been adequate.

I want to say something about the forest profile basics in this province, because only by understanding the forests can one have some concept of the adequacy or lack of adequacy of this bill. Once again I would direct the attention of hon. members to the Pearse report, particularly to the resource base, page 21. Looking at the coast district one sees that there is an acreage of some 13 million mature and 4.8 million only immature. There is a preponderantly mature forest on the coast even now, much of it overmature, much of it decadent. In the interior the balance is much better, with about 50 million acres mature and about 48 million acres immature.

How much wood can be taken off this acreage every year? Commissioner Pearse discusses that most precisely in his appendix and section D of the appendix, which deals with the specific topic of regulating the harvest rate. His conclusion there is basically this: first of all, that the annual allowable cut is somewhat conservatively defined at the moment, and secondly, that nobody knows exactly what it should be. I want to quote from page D25:

"This brief commentary is sufficient to indicate that the data and procedures used in determining allowable cuts involve a variety of possible biases and sources of error. Whether these result in the aggregate in overestimates or underestimates of the allowable harvest is a matter of considerable importance, and even more critical is the question of whether the current allocation of timber exceeds or falls short of appropriate levels. With present data limitations it is not possible to throw much empirical light on this issue, nor to generalize about likely magnitudes across widely varying sustained-yield units."

Since that is the absolute, fundamental measurement in the management of the forests in this province, it seems to me adequate warning and adequate urging to the minister to get about very quickly the business of improving the state of our inventories in this province. There are sections of this Act and of Bill 12 which would allow and encourage that to be done, but I would like to hear some dollar figures and some dollar allocations as to exactly how and when that is going to be done.

The age of the forest, I mentioned, in some parts of the province is 50 per cent overmature, and even 75 per cent in some high productivity districts. There is a crying need for cleaning these areas out quickly over a reasonable length of time in order that we can restock then or have nature do the same for us, and thereby achieve a much higher annual increment of growth than you would get out of a decadent forest. A decadent forest sometimes even loses wood every year, rather than adding an increment.

These areas must be cleaned out under relaxed standards of utilization if necessary; even in some cases under relaxed standards of B.C. conversion, I would say. The objective must be long-run, stable employment in this province, and a well-managed, second-growth forest, which is what we're going to have eventually. That is something that should be brought about as quickly as can be done.

I do have one worry here. The stumpage available in the cleanout of these decadent areas my be, in many cases, not enough for the silvicultural credits which would normally be booked against that stumpage. I think the government is going to have to allot cash in those cases to make sure that the necessary silviculture is carried out.

The end result of this process is going to be a conversion to a second-growth, more intensively managed forest than we have now that will be more uniform and that hopefully will be a higher grade of species and of trees, as tree stock-breeding work is done.

[ Page 2353 ]

They will no doubt be smaller trees harvested on a shorter crop cycle, utilizing different harvesting and milling techniques. But it is essential that the public understand that the sustained-yield principle must take into account the necessity to clean out these overmature sections of our forest.

I want to say something now about the world competitive basics that our forest industry in British Columbia faces in order to make it abundantly clear that we cannot afford to relax and lay back and feel that we are the Arabs of the wood world and that our resource is of such a wealth that everyone must come to us and we can make a lot of money.

The minister, I know, is aware of the British Columbia forest industry planning conference which took place last March in 1977. 1 think he attended some of the sessions. The proceedings were reported, and British Columbians should be aware of some of the things that were said about our industry and our province by some of the world-renowned international consultants that were present at that conference.

I want to quote first from a paper presented by Dr. Poyry. Here are some of the things he had to say, first of all, about the forest industry generally:

"Traditionally, the industry has suffered from low profitability. As a result, insufficient internal cash has been generated and debt-equity ratios have deteriorated.

"in recent years, new, equally serious problems have arisen. The rate of growth and consumption has plummeted" - consumption of forest products, "and it is fair to say this trend will persist in the foreseeable future. Capacity utilization is most unsatisfactory and prices are depressingly low.

"In many parts of the world, the forest industry is in a crisis, fighting for survival. Worldwide inflation has almost tripled the unit capital cost of a forest products plant since the turn of the decade. This, coupled with an increase in the size needed for economic viability, puts an enormous pressure on the already strained financial structure of the industry.

"Last, but not least, the forest industry has become a focus of increasing public demands for environmental protection." It is an industry, in other words, under intense competitive pressures, Mr. Speaker, even though prices have improved somewhat since the time this paper was presented. Prices, unfortunately, don't stay up in this industry. They go up and down, and they happen to be up now

Dr Poyry goes on to give some perspective on the share of British Columbia in terms of the growth of the world's forests.

"The total growing stock of the world's forests is estimated at about 304 billion cubic metres over bark volume. About two fifths of this is softwood and about three-fifths hardwood.

"Three-fifths of the world's softwood is in the Soviet Union, a quarter in North America and less than a tenth in Europe. British Columbia's softwood growing stock equals that of Europe and is 3.5 times that of the U.S. south and 2.4 times that of Scandinavia.

"In hardwoods, tropical regions predominate. Latin America has just under half, Africa about a fifth and Asia's Far East about one-seventh of the world's total. Only a fifth of the hardwood growing stock is in the temperate regions, mostly in the USSR and North America."

So we are a significant but by no means overwhelming fraction of the world's wood supply here in British Columbia.

What is our competition? Dr. Poyry gets onto that. he analyses wood costs and he says:

"I've spent quite a lot of time analysing wood costs because wood costs significantly influence the resource base development. An example of this is the woodcost curve for Brazil, which perhaps coincidently closely follows the curve for the British Columbia interior. In this context, Brazil represents the general move of forestry and forest industries toward warmer zones. The main reasons for this shift are fibre-supply problems associated with high wood costs in the traditional regions. The chief attraction is the hope of growing cheap raw material in fast-growing plantations."

What is the competition of these fast-growing plantations? In a later paper, a British Columbia consultant from Forestal has this to say:

"Rotations of eucalyptus pulpwood range from six to eight years" - just imagine, six to eight years, Mr. Speaker - "depending on soil conditions, temperature and rainfall, and to a lesser degree on the species. On poorer soils, the rotation might be up to 15 years. Mean annual increments range from 300 to 500 cubic feet per acre" - double or triple British Columbia - "the higher increments being encountered in the more warm and humid regions and the lower increments in regions of more temperate climate.

[ Page 2354 ]

"If grown specifically for pulpwood, the southern pines can be cut at ages between 15 and 25 years, depending on growth conditions. Mean annual increments range from 200 to 350 cubic feet per acre. The tropical pines can be cut at ages between 10 and 15 years. For pulpwood, mean annual increments for these species range from 300 to 400 cubic feet per acre."

Mr. Speaker, when you look at that kind of developing competition in the world, you say to yourself: British Columbia must watch its competitive ability in this world. It's by no means a black picture. Returning to Dr. Poyry, he summarizes by saying:

"The timber resource base for developing British Columbia's forests as an industry as a whole seems promising. It is, of course, true that a sizeable part of B.C.'s timber lies beyond the basic infrastructure, that the quality of the coastal forest is gradually declining and the extraction costs of timber are escalating. Still, there is no other concentration of coniferous timber anywhere in the world with a potential equal to that of British Columbia. Comparing the allowable cut and growing stock columns of figure 5-1, there is still a lot of potential for increasing the wood harvest before there is any danger of overcutting by European standards in British Columbia."

But still and all, our wood costs are high. A table prepared by the Forestal consultant shows that we range among the highest two or three areas of the world in terms of wood supply costs. What all of this means, without further quote from that particular conference, is that British Columbia is in a very tough competitive world and it is not going to get any easier. The wood that we are cutting in our province, as the old forests are being taken down, as the more accessible areas are being taken down, is becoming more expensive. The wood that is being taken in the warmer regions of the world on the plantations is becoming less expensive as their infrastructure costs are absorbed. It is at our peril that we overlook those kinds of trends.

Next, I would draw the attention of the House to the basics of the industry structure in this province. I refer again to the Pearse report, particularly pages 39 to 44, and the extraordinary concentration of cutting rights on public lands in the large companies. On the coast with a committed allowable cut of 7,400, 000 cunits in 1975, 5,786, 000 of that was in the tree-farm licences held by the nine large companies. That's an astonishing fraction. It tells you something about concentration on the coast of the tree farm holders.

Now in the interior, the distribution is quite different. The public sustained yield units in the interior provide over 11 million annual cunits. The tree-farm licence is only 1.6 million, so it's less of a problem there. One of the most graphic measurements of industry concentration is given by Peter Pearse at page B 18, "Control of Timber Rights and Manufacturing Capacity by the Major Controlling Companies." The largest eight companies have 53 per cent of the committed allowable annual cut, which is to say on public lands. They have ownership of 43 per cent of the Crown granted forest land outside of tree-farm licences. They have a full 71 per cent of the so-called old temporary tenures. They control 33 per cent of the lumber manufacturing capacity in the province, 81 per cent of the pulp capacity, 89 per cent of paper and 63 per cent of veneer and plywood.

I don't think there is a need to really cite any more figures than that to make it clear that there is, I would say, a stranglehold by these major companies on the coast. I return again to the chart on page 39.

I'm sorry, I read that chart wrongly the first time around. The fact is that the top 10 had 1,660, 300 cunits in the PSYUs out of a total of 2,893, 000 in the PSYUs, plus they had all of the TFLs.

I said earlier on that many of these TFLs were issued during the term of a minister who, in the end, went to jail for taking bribes with respect to the issuance of a treefarm licence, what was then called a forest management licence. In fact, a full 10 licences were so issued. At page 86 of the Pearse Report, one can see how the annual allowable cut under those licences grew since the first day they were issued. The percentage increase is just incredible.

We will start with tree-farm licence No. 13 issued in 1953. Since it was first established, the cutting rights have increased by 256 per cent. No. 14 increased by 70 per cent. No. 15 has gone up by 594 per cent since it was first established. No. 16 is up by 352 per cent. No. 17 is up by 389 per cent. No. 18 is up by 132 per cent. No. 19 had 202 per cent; No. 20 - 203 per cent; No. 21 - 116 per cent; No. 22 - that was the particular one that was given in evidence at the trial - 126 per cent. No. 23 - 89 per cent.

The point is, Mr. Speaker, over the years since these tree farm licences were first granted the companies that received them have had their annual allowable cuts upped by hundreds of per cent, and what the public alienated in the first instance turned out to

[ Page 2355 ]

time 15,1978

be only a fraction of what eventually was given away. All of this was done on the basis of the philosophy of that day.

I have here some of the daily proceedings from the royal commission on forestry, the second Sloan commission, when prominent figures of that day were giving warnings about what was going to happen. I report on the evidence of H.R. MacMillan, November 3,1955. He says: "Any increase in the number or area of forest management licences in the Vancouver forest district would be harmful." How right he was! He said later on: "Legislation should be passed to prevent public working circles from being raided and turned into forest management licences for the benefit of one large concern. The boundaries of public working circles" - what PSYUs were then called -"should be gazetted and fixed in such a manner that they can be altered only by an Act of the Legislature." What happened, Mr. Speaker? What happened in fact was that today the coastal PSYUs are controlled by the large companies.

Mr. MacMillan went on to say: "A healthy society would be furthered if public working circles are logged only by free-market loggers." Well, I agree with him, Mr. Speaker, and what a long distance we are from that today.

How about security of supply? "Mr. MacMillan admitted that most of the major pulp mills built on the coast of British Columbia were backed by some form of timber security." He doesn't say total timber security, he says some form of timber security. He goes on to say: "The one exception was the Harmac. mill of MacMillan Bloedel, Ltd., at Nanaimo. This mill was built based solely on a considerable degree of optimism." Well, I suggest to you that it was based on a lot more than a considerable degree of optimism, Mr. Speaker. Mr. MacMillan was a pretty shrewd gentleman and he knew that wood supply was available. He didn't have to have it guaranteed to him. He went ahead and built his pulp mill in Harmac without those kinds of guarantees because he knew the wood was going to be available, just as the Herb Domans of the 1970s know that somehow they are going to get that wood. There doesn't have to be this intimate tie-in of tenure and conversion plants that is the justification for all of these tree-farm licences, and has been over the years.

There was one other intervention at the Sloan hearings that I want briefly to quote, because it has been rather prophetic. That was a submission by J. Gordon Gibson on May 26,1955, when he said the following:

"Under the present forest policy, the forest industry may become entirely dominated by a few large corporations. This trend, in turn, may lead to the eventual socialization of the industry." Well, what could be more clear, Mr. Speaker? If it ever comes to the choice of the control of our basic resource by a monopoly or by the government, the public has to say it has got to be the government because we have some control over the government - if it's going to be that kind of choice. And those people in this province who are truly interested in individual enterprise or free enterprise or whatever you want to call it had better think a little bit about what that WFI memorandum the other day called "the bogeyman" of bigness, because it is more than a bogeyman when it comes to mean stranglehold control.

I want to Lay something about employment basics in this industry and the way employment trends are going. Environmental and biological considerations are very important, I don't deny that. But the basic concern of British Columbians with the forest industry has to be for the provision of jobs, and I am extremely concerned with the trend in that area. There is going to have to be modernization by the majors of their existing milling operations on the coast. This is admitted. The capital funds in many cases have been appropriated or at least announced. What is that modernization going to do to employment on the coast? Necessary as it is, I fear it is going to lead to a direct job loss of something like 11,000 jobs as that modernization proceeds over the next few years. I'll give you my calculations on that.

Modernizing the plywood industry, as it must be done, to raise worker productivity - this is on a 3/8 basis - from 1,000 square feet per shift to 3,500 square feet, which is more the standard it should meet, will see the elimination of something like 2,900 jobs. The changeover in sawmills from the current productivity of about 1,200 board feet per man per shift to something like 4,000, which is more like the state of today's competitive necessity, will give rise to the loss of another 7,000 or so jobs - from necessary modernization. That's a total, in the manufacturing side, of 10,000 gone.

Then next you are going to have to improve your lumber recovery. At the moment those mills are getting around six board feet out of a cubic foot of wood, instead of what you might call the state of the art standard of 6.8 board feet, which doesn't sound like much; but it is a big percentage change in the number of logs that you use. That reduces logging employment by 1,000 or 1,200 right there.

So the total modernization losses are something over 11,000, and that's been visible to

[ Page 2356 ]

the IWA and others in the coastal economy for some time. A-11 of the programmes of the major companies, unfortunately, tend to be either closures, as was the Van-Ply case - somewhat modified - or else crash programmes to eliminate people and reduce raw material usage. In other words, it's consolidation and shrinking, and necessary as it is, it doesn't help employment.

What is lacking is any countervailing economic development policy by government to permit expansion of job-creating utilization of the forest by competent and willing entrepreneurs other than the majors who hold those tenures. The policy theme of the minister, as I understand it - I think I'm quoting him properly here - is: "Do not embalm allowable cut. Use it or lose it." That to me is really an implied admission that the majors have more log supply than they need and a suggestion that they must expand. But before they expand they have to modernize, and unfortunately that puts about 11,000 people out of work. Thereafter they must expand export markets for which they must cut prices or at least have a very sharp pencil. And when that happens to the extent that the majors do not strip each other of markets, they're going to pose a very strong threat to the rest of British Columbia industry, who have been the ones who modernized first.

There are very serious job implications and there is a necessity, clearly, first of all to build new manufacturing capacity to use the additional log supply, the additional allowable annual cut freed up by greater efficiency - those thinner saw [illegible] that move it from 6 to 6.8 board feet per cubic foot - and to free up existing unused allowable annual cut in the hands of the majors to more hungry, scrambling, private operators to get out there and log those areas and provide jobs. Somehow it all has to be done at a low enough price to sell that product in the world markets.

So how does this present Act meet the challenge of world competition which we face? Let's go through it a little bit. First of all let's focus on this great basic of allowable annual cut, because that's where it all starts. Unless you can cut it down on a reasonable sustained-yield basis, you don't have any jobs, you don't have any logging jobs, you do not have any manufacturing jobs. The government allots it as the timber owner. The major criteria, according to the Act, are: to create and maintain employment; to provide management and utilization; to meet various development objectives of the Crown; to meet environmental objectives; and to contribute to Crown revenues. Those are good objectives.

The major innovations in the new Act in terms of tenure are to set aside areas for small business. All of the licence contracts in the old Act are terminated and they're replaced in essentially the same form but probably with greater security and privilege than before. In all cases it is mandatory - it says "shall, " not "may" - that the forest officer replace the existing tenure forms with the same cut or the same area whether or not circumstances to the contrary exist. This being the case, it follows that replacements take first priority on the allocation of existing timber and they distribute the annual allowable cut as before. The new form, such as the set-aside for small business, can only be a last priority and then remove whatever slim pickings are left.

On the coast there won't be much left; in the interior it's another story. On the coast as I mentioned before, on timber supply sources, there are about 45 per cent from treefarm licences, only 23 per cent from public sustained yield units, and 32 per cent from the old tenures and private lands. In other words, only 23 per cent of the coast resource is in what you might call "public tenures, " and of that the majors have a very large control of the public sustained yield units. In the interior it's different, the tree-farm licences take only 14 per of the timber, the old private tenures only 11 per cent, and a full 75 per, cent is in the PSYUs. So in the interior you've got something to work with and, in fact, the interior has a wide range of companies.

There is nothing like the industry compensation as it is on the coast. The new Act can be phased in and function there with relative ease, I would say. On the coast the eight major companies control 80 per cent of the timber supply and the few domestic smaller operations are all timber short. As I said before, government has only 23 per cent of the consumption needs in the PSYUs, but of that 23 per cent about half of it again is committed to the majors. The coast is an integrated market with the low cost of water transportation and that means that anything that does come up for bid can be bid on a leverage basis by the majors. With what you might call their base supply of timber at reasonable rates, they can afford to bid very high rates for incremental wood, and incremental wood is a worthwhile thing to have.

So we see this recent sale in the Rivers PSYU where, in bidding against smaller companies, one of the majors bid over $7 a cunit for 50,000 cunits annually for 10 years - over $3.5 million up front. It's just an example of

[ Page 2357 ]

what happens on the coast. When some of the small pieces that are yet to be distributed are distributed, it looks like they're going to the majors again.

The situation just doesn't exist on the coast to provide the kinds of set-asides that the minister has implied for the small operators, unless we can free up some of that annual allowable cut that has been assigned to the majors. Coastal operations are concentrated on the ocean cargo market, as the minister knows, and the eight major companies hold almost all of the TFLs, 48 per cent of the PSYUs, almost all of the old temporary tenures, and the majority of private lands. They control - and get this figure - 80 per cent of the log supply and operate only 60 per cent of the log-using manufacturing capacity. I want to justify that figure, because it is such an important one.

If you go to pages 39 and 42 of the Pearse report and you look at the eight companies having TFLs, you'll find that as to their annual cut they have within the PSYUs about 1.4 million cunits per year. Within their TFLs they have about 5,785, 000 and, on the unregulated lands, the old temporary tenures and the private lands, something like 1.8 million. You can get that by applying a proper annual increment factor to the table on page 42.

That is about 80 per cent of the supply on the coast in the hands of the companies having TFLs. I'm not counting Can-Cel in this particular compilation. How about the usage? The TFL holders need about 3,980, 000 cunits for their sawmills, roughly 725,000 cunits for their plywood and veneer, and about 250,000 for other manufacturing of one kind or another, bringing us to about 4,955, 000 cunits before pulp and paper.

The supply available from the last analysis was a little over nine million cunits, so the surplus available before pulp and paper is about 4,056, 000 cunits. Add to that the pulp logs that are available to the majors from the other producers of about 231,000 cunits. That's available because the majors are the only ones with pulp mills. They have to sell them to somebody so they sell them to those with pulp mills. You are now at a disposable total of 4,288, 000 cunits. If you deduct the ground wood necessary for ground wood usage in newsprint operations of about 1,175, 000, you have an indicated surplus of a little over 3,000, 000 cunits. Then if you deduct from that what you might call the. legitimate pulp logs in the forest profile being operated by these people, you have a surplus of a little over two million cunits in the hands of the eight major companies. That, as far as I'm concerned, Mr. Speaker, proves the statement that the wood controlled is 80 per cent and the wood used is 60 per cent, and I don't see that that is right.

About 10 or 15 years ago in the circumstances of the day, many of these companies stopped maintaining their conversion operations quite as well as they might. They let them run down, expended cash flow elsewhere, or else switched priorities from lumber to pulp and mills which were basically chip-using rather than log-using. About the same time the government instituted closer utilization policies, thereby requiring intensified recovery which contributed to the majors' declining efficiency of wood product plants. Their counteraction, I suppose, was natural under the circumstances - to move into the PSYUs and otherwise increase production of logs for the purpose of using them best in the inefficient mills and casting off the balance to the log market.

The independent plants that didn't own timber had to establish an efficient technology. They didn't have that choice of highgrading. And they did. The programme set in motion, in my opinion, an inadequate management of public sustained yield units and a self-serving motivation of the multinationals to manipulate supply to the log market, to maximize the prices charged for their own cast-off logs. The independents, relying on such logs, had to develop ever-better technology.

In contrast, the majors sunk to a lower level - ever lower, as the figures I cited earlier on I think demonstrate: 1,200 board feet per man per shift as opposed to 4,045 in modern mills.

There are modernizations planned. It's overdue but nevertheless planned. As I said, the unfortunate impact of it is going to be a major reduction of employment in the coastal forest picture. So we have to ask: How is this Act going to free up our forest resources to replace that Employment and, if possible, even expand it? What does it do? In the PSYUs and in the tree-farm licences and even in the old temporary tenures, they are essentially replaced exactly as they are in the new tenures, be they forest licences, be they the new TFL or be they old temporary tenures outside, now incorporated in TFLs.

The minister is shaking his head, but the Act says the forester shall replace with the same area, in the case of TFLs, and with the same cut in the case of the forest licences. Mr. Minister, I don't understand how you can shake your head. You just read section 14 (2) . We perhaps shouldn't be in this detail at this point, Mr. Speaker.

[ Page 2358 ]

"...in total, specify an annual allowable cut equal to the total of

(i) the annual allowable cuts specified in surrendered timber sale harvesting licences, plus increases and minus decreases, if any, in the allowable annual cuts ... since they were entered into...."

It's the same; keep reading. The next sec tion:

(ii) "...the allowable annual cuts specified in the surrendered timber sale licences, plus increases and minus decreases, if any, in the allowable annual cuts made by the Crown since they were entered into, or such portion of them as regional manager determines." It's the same thin . This is the total of No. 9

1 and No. 2, and it is conjunctive; it's No. 1 and No. 2. No. 1 says it is the existing. So I'm sorry, you cannot get off that one on that, Mr. Minister. What you're doing is guaranteeing the same cut.

What about set-asides? All these replacements have priority. That's as a matter of law in this Act aver the proposed set-asides. Where is the timber going to come for the set-asides, particularly an the coast? In the interior, I understand it. Where is it going to come from on the coast? The Forest Service now says that the south coastal units are already overcut. That's the general feeling. So does that mean you're going to move up to the mid-coast? The exclusive location of set-asides for small business in the mid-coast, which is one of the tougher operating areas, would be something of a sick joke In url opinion.

I think the new Act is going to worsen the coastal situation. It ignores that monopoly control and provides mandatory direction to continue it, as a matter of fact, and perpetuates a chronic undercut. I want to give some details of this undercut. As far as I know, this is the first time that these figures have had public release. Calculations were done from the Forest Service files by Thompson and Associates, consultants for the truck loggers. It was a survey of annual allowable cut and actual cut on the coastal TFLs for the five years ending 1976. Here were the results by the companies.

Crown Zellerbach, TFLs 2 and 12 - over the five years, the approved cut for the five years was 1,492, 000; the actual cut was 743,000, for an undercutting of 50 per cent. That was the worst - an undercutting of 50 per cent in those TFLS.

Rayonier - in those five years, an undercutting of 21 per cent.

M & B - in those five years, TFLs 7, 21, 20 and 3, an undercutting of 26 per cent.

Weldwood - an undercutting of 22 per cent.

B.C. Forest Products - an undercutting of 15 per cent.

Eurocan - an undercutting of 42 per cent, which is perhaps more understandable there.

Tahsis and Canfor - in reasonable shape with 5.2 per cent and 7.5 per cent undercutting respectively.

The overall undercut on the coast in this five-year period was a massive 29 per cent, an enormous 6,350, 000 cunits - done by a private consultant, from the Forest Service's files -the undercut on the tree-farm licences held by the major companies. I want to know, Mr. Minister, why that undercut, according to the Forest Service files, isn't redistributed by this Act, as a matter of right, to the smaller operators in this province, rather than privilege being perpetuated. If this 6,350, 000 cunits, or an average of 1,270, 000 per year, were distributed, it represents logging jobs of about 1,400 - at 90 people per 80,000 cunits; in manufacturing, employment of about 1,800 - assuming 25 per cent of the volume goes to plywood, shake, shingle and so an and 75 per cent to sawmill. It's a very important undercut.

The enormity of this particular figure is what bothers me most about this Act. There is no provision for the mandatory redistribution of cutting rights that are not being used. It's simply not there; you have to agree to that, Mr. Minister. A few years down the road there may be some grace and favour provisions, but there is no mandatory provision. Don't tell me: "Trust us." For a generation now we have watched what has happened to these tree-farm licences, and there has been very little reason to trust the government in their administration of them. And there has been very little reason to have a high regard for the efficiency of the majors, in terms of their conversion of those forest products. There has been reason to admire them for the way in which they have managed the log market, I don't question that; but in the conversion, I say no.

Companies that receive an allocation of public resource should make a disclosure of their actual log-using needs, their manufacturing capacity and their plans to sustain or increase its use. That, it seems to me, is a duty that should be incumbent upon them.

In the time that this Act has been before the public, there have been a number of suggestions that have come forward. As yet, there hasn't been time for a true public understanding of what I refer to and believe to be a sell-out; but in some reasonably expert circles there has been a knowledge of

[ Page 2359 ]

what is going on.

There was a paper written for a coalition of organizations interested in forest management that had some suggestions that I want to endorse. I'm not prepared to endorse all of the suggestions but certainly some of them. First of all, I want to refer to their comments on the forest licence. They say:

"Although there is a provision for competition in the initial allocation of new forest licences, the major shortcoming of the bill in this area is the absence of any mechanism for the competitive allocation of timber, encompassed by either existing timber-sale harvesting licences or the ordinary timber-sale licences, the so-called quota-bearing licences which the Forest Service is designed to replace."

There's no competition for those existing forms of tenure. They go on to discuss what Pearse had to say and they say that: "Freeing the remaining 20 per cent for competitive re-allocation was seen as absolutely vital "to protect the public interest in the flexibility of timber supply arrangements."' That is what Pearse said, and the minister has overlooked that. This group goes on to draw a conclusion from this:

"There will be a distortion in the desirable competitive structure for the issuance of new licences by the effective transformation of each 20-year finite licence into a perpetual right to harvest a fixed amount of timber. This will presumably make it more difficult for the smaller operator requiring a more rapid rate of return to compete with the highly capitalized corporation having the ability to withstand skewered bidding for such perpetual rights."

I think that is a proper forecast. It's not as if they were reinventing the wheel. It is what we have seen in the last generation, and it is just being perpetuated. In this aspect of the Act we are ignoring the lessons of the past.

They make a recommendation that: "sections 13 and 14 be amended to provide for the matching bid privileges on 80 per cent of the authorized cut upon expiry of existing quota bearing licences or upon the expiry of new forest licences." That seems to me to be a sensible recommendation. That was the Pearse recommendation in essence.

Speaking of PSYUs, they go on to say:

"...the chief forester be placed under a mandatory obligation to ensure that at least 40 per cent of the total harvest in the PSYUs which, incidentally, is the current percentage under the so-called third-

band licences, be allocated by the new timber sale licence and to ensure that an appropriate percentage of that amount be offered to small business enterprises only.

In other words, small business is entitled to have within this Act a guarantee that not just in theory they may get some, but by law they will - it will be available. I'm sorry, it's just not here, Mr. Speaker. It might have shown up in the regulations, but we wren't given the courtesy of the regulations in advance of the debate on this bill. I'm not pre pared to trust the government for that without seeing it in writing.

This group makes a recommendation - we're now talking about TFLs:

"...section 29 be amended to specifically authorize a reduction of annual allowable cut of up to 20 per cent for each 10-year evergreen renewal period, and that the requisite area of timber land be then removed from the TFL and made available for distribution in the continuous PSYU."

I agree with that, subject, of course, to recognition of the right of the TFL holder to any annual increment brought about by his own silvicultural efforts. This group suggests: "...that the Minister of Forests be statutorily directed to divert sufficient forest revenues to secure a 10 per cent annual reduction in amounts of lands not satisfactorily restocked."

I'd like to see that in the legislation, Mr. Speaker. It's a reasonable thing to have in this province, because unfortunately reforestation in this province has tended to swing up or down, depending on the amounts of money available rather than on the physical needs of the Crown.

There are two final recommendations by this group, again with which I agree:

"Before entering into a replacement tree-farm licence under section 29, the chief forester shall convene a public hearing, at which time he shall receive and consider submissions concerning the past conduct of the licensee and/or considering terms or conditions proposed for a replacement licence, including boundary and cut adjustments."

What that says is that there should be a public hearing once every 10 years with respect to the renewal of the terms and conditions of a tree-farm licence.

What would be more natural? What could be more obvious with respect to the proper administration of a public resource than that the public should get some chance to comment

[ Page 2360 ]

on the administration of that resource in a public hearing once every 10 years? It seems to me that if you had any trust for the public, you'd give them that kind of right. I know what the government is worried about. They're afraid that a lot of environmentalists are going to come around once every 10 years and make a fuss and say: "Haul some of that land out and make a park out of it." Now I think the government should understand that other people will come around and say: "Keep that land right the way it is, because we need the employment in British Columbia."

I don't think they need to worry too much about that. I think what they're really worried about is that this kind of public hearing on existing tree farm licences would highlight and give a public forum for the highlighting of the lack of use of the annual allowable cut in many of these TFLs, and therefore would bring about public pressure to have that additional annual allowable cut severed from the particular TFL. I say there should be a public forum for exactly that kind of dialogue. The TFL-owning company should have the duty and the obligation to come before that public hearing and say: "We need this wood because we have such and such conversion facilities that require it." If they can't make that justification, then I really don't see why they should have it.

Finally this group recommends:

"...that the confidentiality provisions of section 149 be deleted, except with respect to information on prices for timber or products, if the disclosure of such in-formation, namely the price information, might reasonably be expected to prejudice the competitive position of the company concerned."

1 think that is the right approach and it's a better approach than the minister has taken. In other words, the proper approach to the disclose of the information is to assume that everything is public, except that which is explicitly private, and that which is explicitly private relates to price and things that might injure the competitive position of the company. Because the public surely has a right to the maximum knowledge about how the publicly-owned resource is being utilized.

I have a few other thoughts on this bill. It's not just in this bill, but it has continued a tendency more to cash-up-front sales. Now we need bidding practices in the industry, there is no question about that, but I say to the minister that he would be well advised to spend more time worrying about how to improve stumpage bonus sales than the cash-up-front sales. It's a very questionable thing. It discriminates against the smaller operator and it sees the money put up in terms of financial requirements rather than the money being used to buy equipment.

Let me come back again to this 50,000 cunit offer in the Rivers PSYU for which Weldwood bid $7 a cunit. Mr. Speaker, that's $3.5 million up front; that's the amount of money that an operator would need to get started to do his logging in the area, so really you are doubling the burden on him. Now Weldwood can maybe carry that extra $3.5 million - I'm sure they can - but what chance does a smaller operator have?

The minister is a member of the coal committee, Mr. Speaker. The coal committee has just gone through a long and arduous consideration of whether there should be cash-up-front bidding with respect to coal, and they have finally come down against it for two reasons: first of all for the reason that it would favour the large, multinational energy companies; and second, because it would soak up money that is better used digging holes in the ground than going into the government's bank account. I say that exactly the same logic applies in the forest industry.

I suspect I know what the minister's answer will be. If you get the cash up front you've got it and the companies can't come crying to you two or three years later if the market goes bad and say they want it back, whereas if they bid a stumpage bonus they can come to you two or three years later and say: "You've got to help us out."

Mr. Speaker, we don't pass laws around here to make things easy for governments. We should pass laws around here for good administration. I say to you, Mr. Minister, you just have to live with that kind of thing. That's what you are paid for.

Mr. Speaker, I do not see the things in this bill that will give rise to a better log market. A better log market will arise only from a better distribution of annual allowable cut - and I'm talking now particularly with respect to the coast. That is a very important thing. As the minister knows, stumpage currently is determined by the log market.

MR. BARRETT: Where is the cabinet? A most serious bill of this nature....

MR. GIBSON: Well, the cabinet doesn't understand this bill, so it doesn't matter if they're here or not.

A better log market gives a better chance for the independent milling operators to survive because they're buying in a better competitive situation. I don't see in this bill

[ Page 2361 ]

what is needed to improve the log market. I think we're going to see end-product appraisal coining on the coast as a stumpage basis in the reasonably near future, and I would welcome that. It would help, among other things, end the old.... Well, not absolutely end it, but make it more expensive to use saw logs as pulp logs. But even for that purpose I think a better log market is something we need, and it is not provided for in this Act.

Mill licensing, Mr. Speaker, is dangerous. It is anti-competitive and it is a guarantee that the expansion of milling facilities in this province, at least on the coast, will be done by major companies because they are the ones that have the extra timber. Nothing could be more obvious. Why are we being asked by the minister to give him this power to license or withhold licences from a person who would build a conversion facility? What is the merit of that in a government that calls itself a free enterprise government? They're against competition. They're for the majors and they're against competition. That's the only way I can read that general licensing section.

When you tie that Section 1n with the minister's slogan of "use it or lose it, " you see what happens. The major with the extra cut, part of that 29 per cent undercut that I documented earlier on, comes along to the minister and says: "We have noted that you told us to use it or lose it, and we don't want to lose it, therefore we are going to use it. Would you please give us a mill licence?" How are you going to turn them down? You're going to license them, and the expansion, therefore, on the coast will be an expansion almost uniquely limited to those large companies that already control most of the coast. This mill licensing Section 1s extremely dangerous.

This bill, Mr. Speaker, seems to accept the principle that undue competition is not a good thing in the forest industry of British Columbia. Who is the free-enterpriser here? On which side of this House? I am getting very confused.

What about the need for security of the building of plants? I hark back to Mr. H.R. MacMillan who built his Harmac plant basically in optimism because he knew he was going to get the logs from somewhere. People have timber, they're going to cut it down, and then they have to sell it. They can't eat the logs so they have to sell it to people who have conversion plants.

You know, Mr. Speaker, people build canneries without guaranteed fish, they build smelters without guaranteed ore. The minister knows that. They contract a proportion of their ore, but they don't have all of it guaranteed. They build agricultural plants without owning farms. You can buy the logs, and in a competitive situation you can buy the logs at a decent price. Then you have the people cutting them down and competing among themselves to supply the conversion plant at the lowest possible rate, and you have just a bit more independent enterprise in this province.

The people who cut those trees down can't eat the logs they produce, I repeat that. They have to sell them and they have to sell them to the conversion plants. Now you have to keep the supply and demand in reasonable balance, and I'm prepared to say you have to give the plant owner a major portion of his supply in security. But surely we haven't yet reached the time in our society where we say there's no scrambling left at all; it's completely guaranteed to you.

Make an analogy with people. You don't find lean and productive people if you give them everything without some productive effort. What you do if you follow that kind of policy is you make them into slobs and into parasites. Unless you require a lot more competition than this bill requires in the forest industry, you do the same thing to our great corporations, and we have seen a good deal of that developing in the last 10 years. A generation of high-graded timber in more than adequate supply saw a generation of declining plant efficiency in the majors on the coast of this province. It was the outsiders, the people without the timber, who had to scramble and beg and borrow what they could on the log market. They out produce the majors in terms of sawmill efficiency two to one and three to one on this coast.

Mr. Speaker, I'll summarize what I've said and then I'll sit down. much of the bill is not bad. Had it been developed, as I said, in 1948, 1 think we would probably have a better industry today. But there are some very fatal defects. If the minister chooses to clean then, up, you'll have a good bill. And if he chooses to listen to the voice of the public for another couple of months, I think he will clean them up too. He talked the other day about this being in the developmental process for six years, but for only one month have we had the minister's exact views and have the people of this province had the minister's exact views.

AN HON MEMBER: Twenty-four hours.

MR. GIBSON: Yes, 24 hours in terms of the amendments.

We deserve and the people of this province

[ Page 2362 ]

deserve more time to comment on them. If the minister will wait for that comment and pay some attention to it, he will find that he will be getting this kind of advice. People will be saying: "Watch out for that mill licence. We don't like it. The minister should not have that power." They'll be saying: "There is not enough in here about reforestation and guarantees." They'll be saying: "There's not enough here about the log market. We don't have enough information about our basic resource." They will be saying that there is a serious annual allowable cut allocation problem on the coast, and that that problem relates largely to the eight major tree-farm licence holders. They will say to the minister that at the time of the rollover of those TFLs, which will be happening according to this Art between now and 1985, there should be a specific procedure entered into on each of the 30-plus tree-farm licences that have, as I say, increased hundreds of per cent in their annual allowable cut since the time they were first awarded. Some of them were awarded by a minister who was sent to jail for taking bribes in the awarding of these very licences. Do you mean to tell me you're going to renew those without public review?

Here's what should be done: at the rollover point of each of these licences, all of the holdings of that particular integrated company should be examined - the private lands, the old temporary tenures, the PSYU holdings and the TFL holdings. The wood-using facilities of that particular company should then be matched up against the supply. The supply should be allotted to cover, some will say, 100 per cent - some will say 80 per cent, as Commissioner Pearse did - of the conversion needs. The company can always be sure if it's 80 per cent that they'll find some way in the free market of getting the rest. Because, as I say, the people who cut the trees down aren't going to eat them and they're not going to hide them; they're going to sell them.

The rest, then, would be up for competition. The timber that was cut off would be up for competition. I don't see how the hon. member for Skeena (Mr. Shelford) can be anything other than in favour of competition. I think many of the members on that side of the House.... I wish they'd speak up on this particular question. We believe in our society that competition is a good thing, that it keeps companies efficient, that it keeps some balance of power and that it allows governments not to have to intervene too directly in the affairs of any given industry.

But I say to you, Mr. Minister, to the extent you retain the coast forest industry as an oligopoly, you'll retain the necessity of the government reaching further and further into the control of that industry, and I think that's a bad thing. You'll have the situation as has been in this province for so long, where you find the large companies and the big government becoming just a little bit too good friends with each other at election time and at every other time. They scratch each other's backs, and they do it in private.

I don't think that is a particularly good thing for the people of this province. Do this process in public. Go through the reallocation and the rollover of these enormous blocks of timber in public. Surely once every 10 years for an investigation for a shining of the light on a public resource of this size is not too frequent.

Then we will at least have some assurance that we have not given away more than is needed to any one group and that we have not kept out of the industry the many, many individuals and smaller firms who would like to say, "I would like a chance; I think I can do something here; I think I have a way of being more efficient, of scrambling just a little harder than that other person, " and thereby securing to British Columbia in the years to come the replacement jobs that we are going to need for those 11,000 jobs that are going to disappear as the majors modernize.

I don't see how the minister can shirk that responsibility. If he does, if he does not amend this legislation in some of these consequential ways that provide for the cutting off of all timber in excess of conversion plant needs and that provide for the public light to shine in on the rollover process, if he does not do that, I can only conclude that this government is in the pocket of the big companies that are benefiting from the current situation and will benefit from the passage of this Act in this particular form.

MR. BARRETT: Just like a good socialist.

MR. GIBSON: More like a good free enterprise. I'll tell you, the greatest favour anyone can do for the free enterprise system is to make suggestions that will make it work better. The worst favour they can do is to encourage and prop up an oligopolistic situation, which is the case in the B.C. coast forest industry. The minister's bill will perpetuate that. Anybody who doesn't believe that should ask themselves how it is that the only group that still supports this bill is OOFI the spokesman of the large companies.

MR. LAUK: Not many of them, either.

[ Page 2363 ]

MR. GIBSON: Many of the CUFI people don't support it either. The large companies support it because it's just fine by them. And the rest of the people who know something about the structure of this industry and the future of this industry say it is bad.

Mr. Minister, you can fix it up so easily. Cut off that which is not required for the security of the existing plants and distribute it by proper competition, and do it in the light of day. That's all you need. Failing that, I say this government is in the big company's pockets.

MR. STEPHENS: Mr. Speaker, I had initially considered saying nothing on this bill. I will presume and I will hope that the minister will interpret from those remarks to be kind to me and charitable, that I do have some capacity to understand it. But it is so complex that I very much appreciate, probably more than anybody else in this House, the need to adjourn this matter for further consideration.

There is no question that forestry, as our No. I industry, is the most important industry and requires very deep and solid consideration. My friend, the member for North Vancouver-Capilano, has had forestry handed down to him through his genes, and he has a much better grasp of this subject than, I would suggest, anyone in this House, and that certainly includes the minister.

The minister has made the statement to the press in the past that he will consider constructive advice on the bill. Mr. Speaker, I suggest to the minister that he's never had better and more constructive advice than he's had in the last day. I think he should very seriously consider it and he should take some time to do it.

There was a telegram sent to the minister, and I think it is worth reading into the record. It's says:

"Local 1217 of the IWA herewith urges you to delay further legislative action on the new forestry legislation until the next session of the House. Bills 12, 13 and 14 are beyond doubt the most important to come before the Legislature in some years and, as such, they should not be dealt with so rapidly as to deny full public scrutiny.

"Yours truly, E.A. Ewart, first vice president, IWA, local 1217."

It's quite obvious that the people who earn their living right at the heart of the industry, the man who brings the trees to market and the man who drops them, as well as the independent loggers of this province, all of whom have a gigantic stake in this, want this matter delayed. The only people who are in a hurry to push this through are the large corporations who clearly have a monopoly and see an opportunity to solidify it.

This government has found itself in a difficult choice. In the last provincial election it gathered tremendous financial support not only from the large operators in this industry but from the smaller ones. Now it finds it has to make a choice. It has to decide which of these two branches of the industry it wants to butter up, and where the most support will come from.

It has clearly made its choice, and I can say that the independent loggers and smaller companies in the forest industry in this province who supported this government last time around have discovered one thing for sure: when you get into bed with this government, you get more than a good night's sleep. (Laughter.)

I would like to touch briefly on some of the matters that the member for North Vancouver-Capilano (Mr. Gibson) touched on in much greater depth, and certainly with much better background and information. But I want to identify myself with some of those remarks and put myself on record as being in opposition to this bill, simply because as it presently stands it cannot be supported.

First of all, the 10,000 direct jobs provided by the independent sector are extremely important, but they don't reflect the total number of jobs that come from that sector. Those are the direct jobs. There are many, many jobs, as we know, in this province that depend upon that. It is closer to 40,000 jobs that come directly or indirectly through the independent harvesting sector. These people have a stake. They have asked this minister for time - 40,000 people with billions of dollars' investment have asked this minister for time. I think the minister can probably, without too much difficulty, if he chooses, and without hindering this bill at all, give these people just the little bit more time that they've requested. Again, it's just a matter of fair play.

It is my submission that the larger companies must be made, and forced by this legislation, to compete with the independent and smaller companies on the committed timber. There must be some solid legislation that forces the larger corporations to compete on the committed timber which is already allotted by this government or previous governments. In addition to that, the independents should have among themselves the exclusive right to bid on the larger percentage, if not all, of the uncommitted timber. I would suggest that those

[ Page 2364 ]

guarantees are essential if we are to overcome one of the major problems in this province, which is that our forest industry is dominated by foreign investment. We have some very excellent and energetic and dynamic smaller Canadian companies operating in this industry. All they need is a little encouragement and a chance, and this is the minister's opportunity to do that. Foreign investment has always been a problem with Canada, and you cannot, of course, eliminate all foreign investment. None of us would want to; it would not be healthy. But let's take a chance now. Let's give these people the advantage and the help that they are asking for.

I would also like to suggest, and this has, of course, been suggested by many sectors of the industry, that there should be much more public participation. This is an industry, a resource, that belongs to the people of British Columbia. Not only should the public participate in public hearings when these tenures come out for renewal, but there are other matters to consider such as - and this has not been mentioned too much in connection with this debate - the claim of some of the residents and people interested in the Moresby Island proposal.

It's a very, very important consideration and I'm quite aware of the value of that timber and the need in the minds of some, perhaps, to harvest that timber; but that's a most unique area. And the minister shrugs and shrivels up his nose and shakes his head and I can see that he is quite clearly not the least bit concerned about that. Mr. Speaker, all I'm suggesting to the minister is that some of those tenures in that area are coming up for renewal and reconsideration in the very near future. Give the people of that area and the people of British Columbia at least a public hearing on that one. If you don't do that and if that area is entirely lost, then this minister will have to bear that on his back and on his conscience forever, because you will never again to be able to find anywhere in this world anything equivalent to that particular island.

There is a duty on this government and on all of us to consider the environmental impacts of all timber operations, and there are no provisions in this Act for the control of logging operations and the effects that it has on the protection of streams and fisheries. This may come in the regulations, but I don't feel terribly comfortable that there is not at least a statement of policy of this contained in the Act.

The sustained-yield concept is generally ignored; there does not even appear to be a definition of this in the Act. Again the minister might be saying that this will appear in the regulations. Well, he may be right. But I say again that this is a matter that is too important to be left out of the Act and left in the hands of the officials who will administer the Act. The minister and the chief forester will have great powers and very much discretion in the handling of this Act, Mr. Speaker. It always worries me when they have this kind of power without at least some policy guidelines laid down in the Act, so that the public can at least determine whether the policy of British Columbia and the policy desires of British Columbia are being followed.

In closing, Mr. Speaker, I would just repeat that there is no hurry; we've been waiting a long time for this Act; it's now well on the road, and with a little more time and a little more effort, I think we could have an Act that we'd all be proud of.

MR. SHELFORD: Mr. Speaker, I'd first like to welcome Colin Fraser from the Independent Loggers' Association here this afternoon. I haven't seen him here too many times and it's nice to have him here today.

To start off with, I must say I sympathize with the minister in trying to bring some order and vigour back into the industry which has been mainly a closed industry for quite a few years. There are a number of problem areas, as I see it, and features about this bill that I particularly don't like; however, most of these, 1 would hope, can be resolved through the regulations, which 1 feel will be more important than the bill itself.

[Mr. Veitch in the chair.]

I do hope that the minister takes all the input he can get from people out in the countryside on what they think should be in the regulations.

One feature that I especially don't like in this bill is the fact that there are really two principles. The first principle is for the large, with a 100 per cent security of supply; and there is another set of principles for the small independent, where he has to bid for the small amount of supply he has. I think this is the greatest weakness that I see in the whole bill. In other words, we will have free enterprise in less than 20 per cent of the total harvest in our forest and total security in the other 80 per cent.

I accept the difficulties of turning back the clock on tree-farm licences, and the minister is in an extremely difficult position. In fact, when the treefarm licence

[ Page 2365 ]

first came in, you might say it was the end of free enterprise in that section of the industry - and I think we all must accept this. Certainly a good situation would be where the large and small had not more than 80 per cent of their needs. I think it's always good to leave an industry a little bit hungry and then they tend to do a better job of utilization. This would ensure a vigorous and competitive log market which, after all, stumpage is based on in the coastal area of this province. The only problem is that the Vancouver log market has not been competitive for the last 15 years or more.

I remember the committee on forestry sitting on this back in the 60s when I was chairman, and we made recommendations at that time - if anyone wants to look them up - that something be done to try to bring some vigour back into the Vancouver log market, because the question is: how can you pay stumpage on a closed, noncompetitive market such as we have on the coast of British Columbia?

On the other hand, on the small sales, of course, recently you've seen a great deal of competition. I think we should watch very carefully the difference in stumpage between the noncompetitive area and the competitive area where the small operators operate. I am sure on these small sales we will also have to watch out; otherwise we will be back into the blackmail bit that we had many years ago. I believe one way this can be overcome is to put into the regulations that the successful bidder is required to harvest the timber himself. I believe this in itself would do away with the blackmail bidder.

I know of two or three sales up in the north country this last year where bidders have come in and bid up sales four or five times higher than what they normally would be, and then tried to peddle the sales before they even left the room. This is just not good enough and should be clearly closed in the regulations when they come down.

Again, I must point out that we have to watch the stumpage level on the noncompetitive section, which is 80 per cent of the cut on the coast of British Columbia, because in my experience up north over the last six years, when I was very close to the stumpage situation, we saw the difference between 50 cents from some of the major companies to as high as $22.50 for some of the small independents.

I want to compliment the minister on the 50 per cent clause, which will be on all the tenures, I understand. I think this is good, and it is an excellent feature if properly administered, but 1 would go on to say that the administration of this clause in the past year has been practically nil. It just hasn't worked. Companies would use road costs, camp costs and every other thing you could mention, and then convert it into cunits and say they let out 50 per cent to contractors.

I don't think road costs or any of these others should be considered. When we appeared before Dr. Pearse and argued this very point, the counsel for Dr. Pearse agreed with us -the northwest loggers - that the 50 per cent clause was 50 per cent of harvest. I think it is very clearly spelled out in the Act, and I hope the minister lays it down very clearly to the industry in general that it does mean exactly what it says in the Act.

As I say, we've had an abuse of this Act over the years. Some companies have practically ignored it entirely and it is certainly time it was changed and watched very carefully. I would say the only solution to make sure that this clause is properly lived up to is to have a contract supervisor who would go to each company and ensure that they're complying with the rules and are allowing 50 per cent of the total cut to be harvested by independents. If they are not living up to this clause, then certainly the 50 per cent should be deleted from their licence forthwith. This should be spelled out very clearly, I think, in the regulations.

I would hope to see, when a complete inventory is made of the timber in the north country, that there will be room for the Indian villages to either have farm woodlots or small tree-farm licences over their watersheds. I think they deserve this because any one of us would be very concerned if we had a clearcut area over the watershed that came into the village. So I don't think it is asking too much that this could be turned over to their management so they could log it on a selective basis.

The $64 question, as I see it, in this legislation.... There are some very good features on how to get small businessmen into the business, but I don't think it is as simple as it sounds, because I think there just isn't the timber available and it doesn't mean as much as what we might think it does. I believe that the only timber we will likely find available after a real good inventory will likely be in my friend from Atlin's (Mr. Calder's) .

I am pleased to see in the bill a reevaluation every five years to see what timber we have. I would say that inventory information, especially in my area, is greatly lacking. It shouldn't be lacking because we've had so blasted many studies, we should know where

[ Page 2366 ]

every tree is standing. But it certainly appears to be lacking and I would say it is mainly based on a false premise. There's no question that low-yield areas in high elevation parts of the country are all taken in as inventory, and this is, of course, admitted by the Forest Service.

The problem is that these areas are now no longer economic to log. This comes out clearly in the study by Ray Travers and Clay Anderson up in the Terrace area. Most of the very high elevation timber I don't think will ever be logged, but if it is logged, it will take between 150 to 200 years to grow back a new crop. It throws the whole sustained-yield concept completely out. I am quite sure we have to take a complete new look.

Another thing we don't take seriously enough is the fact that when you're cutting timber which is 300 and 400 years old, you will certainly get an awful lot more off an acre than you will when you come to the next crop and cut it at 70 or 80 years. All of these things have to be taken into consideration. Some people say they are, but if they are, well, they've done an awfully poor job of inventory surveys.

I think we're living in a fool's paradise, cutting all the good stands in valley bottoms and leaving mainly the high-elevation sites which are extremely expensive to log and mainly uneconomic even at the present time. I think all of these high site areas should be completely taken out of the inventory until someone comes up with some bright ideas as to how they can be economically logged in the future.

I am convinced after flying over many harvesting areas.... I suggest to any of you who have an opportunity to fly over Cowichan Lake, for one, and an area from Williams Lake west of Quesnel over into the Ootsa Lake, where I used to live, and the Andrews Bay area when you're flying over, try and take the area that is cut over clear.

In your own mind try to multiply that by 80 or 90 years, and the answer doesn't come out. If I'm any judge of areas when I'm flying, I would say without fear of contradiction that there aren't more than 25 years maximum left in many of these areas. I'm pleased to see that the government will get more involved in better management, because, believe me, we certainly need it right across this province. I'm glad to see the bill makes companies harvest. If they don't harvest, then they will lose it. Use or lose is good. One thing I must say I agreed with the hon. leader of the Liberal Party on: I'm not satisfied that it is clearly spelled out on how long a company has before they will lose it.

The leader mentioned a few areas where they didn't harvest. Again, I'm wondering how long it takes. I'd like to read Can-Cel's record of harvesting. In 1976 their allowable cut was 720,000 cunits; their actual cut was only 471,000 cunits. With the allowable cut still at 720,000 cunits, in 1977 their actual cut was only 285,000 cunits. Of course, I have to admit that when the Prince Rupert mill comes on stream there will be a better picture. But we also have to accept the fact that there are so many chips and so much waste wood lying around this province that, really, you could keep that mill going with no more trees at all, which makes it tough on our Terrace loggers.

Eurocan is not much different: they have an allowable cut of 200,000 cunits. In 1976 they cut 126,000 cunits, so they were 75,000 cunits short. In 1977 they were only 25,000 cunits short, so they did quite a bit better there. I think this is something that in the regulations or in the bill itself the minister should make very clear to this House that if they fail for one, two or whatever number of years he wants to make it, it will be cut off, because otherwise it is useless.

I think this is a good feature, providing that if a company doesn't cut the mustard, then the Forest Service itself will delete part of that licence. Otherwise the company -like the rest of us would do - would simply delete the high elevation areas that are uneconomic to log that I described earlier. Sustained yield can only work with good management and a constant acreage on which to grow trees. If we take large areas for single use, then, of course, it scuttles the whole sustained-yield programme.

I am pleased to see the government is doing more in reforestation. Fifteen years ago the forestry committee, when I was chairman - and I know my friend from Atlin (Mr. Calder) , was there - unanimously recommended an increase in spending of $500,000 a year for every year. Now this was not done, as we all know, and it's unfortunate it wasn't done because we would be in an awful lot better position today. Some of those trees now would be 10 or 15 feet high and on their way to being harvested an awful lot sooner than what they will now.

Regulations are extremely important. I urge the government to do its utmost to clearly lay out what is required by all in reforestation. The requirements of a licensee on what they have to do are not really clear. How long a licensee can undercut before losing his area should be spelled out clearly. Strict enforcement of the 50 per cent clause, so that the

[ Page 2367 ]

independent logger does have some protection, has to be based on 50 per cent of harvesting and not include road, camp, et cetera. As I mentioned before, hire a contract supervisor who will do nothing else but to see they comply with this section.

All job-creation programmes should be geared to improve forest management - planting, thinning, brush removal, et cetera. This can certainly speed up our annual harvest, and possibly we can get back on the track of good management in the future.

One thing that concerns me a great deal is the maximum recovery on lumber or timber sawn. Quite often some of the mills are not modern enough, and there's an awful lot of timber wasted or goes into chips that should be going into lumber. That's one of our problem , and why we have such a lot of chips around the province at the present time. One of the ways to make sure of maximum recovery, as I pointed out earlier, is to make sure a company only has about 80 per cent of its requirements. Then it will stretch and also utilize the timber.

I have a short telegram from some of our friends in the industry, and they bring out some very good points. It's from Ian Mahood and Dan Haneuse. I must say I agree with quite a bit of what they say:

"Tree farm licence holders are manufacturing lumber with productivity of only 1,200 to 1,300 board feet when 4,500 board feet or more per man day is needed for competitive efficiency with other countries. Plywood is produced at one-third the productivity level of the U.S."

It is no wonder we've lost so much on our plywood sales in foreign countries.

"Manufacturers - even pulp and paper mills are old and obsolete and below world standards of competitive efficiency." That's why I say it should be 80 per cent of their supply and then they would have to get with it and modernize.

"Their coastal operations languish while they build new plants elsewhere with modern technology, much of it in foreign countries, and thereby create job security for workers in other areas. Now the string has run out and there are only two options: close the coastal plants or rebuild at enormous capital cost for which capital and motivation are not a priority. Therefore they jeopardize all the coastal workers. This is a deplorable low level of productivity.

"If these mills are upgraded" - which they have to be - "we have to accept the fact that with the extra productivity it could very well lay off as many as 10,000 workers."

I think we have to be prepared to make sure these 10,000 workers are in the other end of the forest scale and improve in the growth sites of thinning, et cetera, that I mentioned earlier. I think that is one way we can speed it up.

[Mr. Speaker in the chair.]

"The tree-farm licence holders haven't been given security of supply free from competition. They should then be required to stay out of the public sustained-yield units and address themselves to modernizing the efficiency of their own area."

This is something I spoke on quite a number of years ago. It seems to be unfair that you give a company a very large block of timber to base their plant - which is fair enough - and then they get into the public sustained-yield units and start pushing out the small loggers. There are quite a number of areas where this can be improved, and I hope later on in the debate the minister will address himself to some of these points, because they have to be resolved and have to be resolved now.

My eyes may be getting bad, but I'm not quite sure, when I fly over this province and start multiplying the years left to harvest, I'm all that much wrong. And I would say I'm likely, in some areas, overly optimistic when I say there are 25 and 30 years left - and sometimes I don't think there is even that much.

I think that's about all I wish to say, Mr. Speaker, and I know there are lots of others who want to have a whirl on this very important Act, because we simply can't afford to make any mistakes when at least 50 per cent of all the people working in this province are, you might say, dependent on the forest industry. We have to modernize; we have to improve our tree planting, tree thinning - just plain good management all around. There is no question that the farmer could certainly do a better job growing carrots or wheat or some thing else, because he wouldn't allow land to lay idle for 10 and 15 years before he planted a new crop.

MR. MACDONALD: Mr. Speaker, I'm not an expert on forestry. I've followed the debates; I've read a little bit of the Sloan report and the Pearse report. I find it very difficult, though, to believe what's happening to the province of British Columbia under this bill. Take the great tree-farm licences, where we have given security of tenure already to com-

[ Page 2368 ]

panies - most of them international companies - since the early 1950s, which is a generation ago. As I read this bill, they will have until 1985 to make their initial conversion into the new form of tenure that they will have. And then in the 10th year after that, which brings us to the year 1995, they can convert and get a 25-year licence; and that brings us to the year 2020.

Now maybe I'm wrong about that, Mr. Minister, but it sounds like an awfully long time to entrench a privilege. It's not a right; it's a privilege in the harvesting of B.C. resources that has been had by some of these great international companies since the early '50s. You tell them that under this Act that privilege is going to be entrenched until up to maximum, if they don't wait until 1985 to convert, of the year 2020. Are you serious about this kind of alienation of a public right in the case of the tree-farm licences to the year 2020?

Then you turn to the other section of the forestry lands of the province of British Columbia and you say to the existing holders of TSHLs and timber licences: "You can have until 1985 to make your conversion. And then in the fourth year of your new licence, you shall be offered" -this is entrenching their right - "a new forest licence which can go for a maximum of 20 years and would be at least another 15 years based on that after the first five years."

Now that takes us at least again beyond this century in the entrenching of rights to people who have existing privileges in the forests of British Columbia. I think there is an unbelievable alienation of the rights of the people of British Columbia in the land of their province under this bill. I can't understand how we can really think in terms of a free Canada or a free British Columbia and think that the companies.... Pearse said that only 30 per cent to 40 per cent of them were inter national. I think it is higher than that. I think the large American companies have a bigger role already in the B.C. forest lands than is stated in the Pearse report. We're going to extend the alienation of our lands to these fantastic lengths of time. You know, when you think in terms of whether Canada has a right to call itself an independent country, you have to think sometimes of what we're paying for the alienation of our resources in this country of Canada.

It has worked out - and you get the original figures in the Canada Year Book - that every hour of every day in Canada we send $614,478 out of this country in interest and dividends, every hour of every day, because we have sold off, particularly since the Second World War, our coal rights, our gas rights - the member for Salmon Arm thinks it's funny; he doesn't care - uranium rights, forest rights, you name it. Then as they become profitable enterprises and increase their investment in Canada with our money in our resources, that investment swells within this country. We end up by having at this point of time to pay out every hour of every day $614,000 in interest and dividends. To pay that bill without too much pressure on the Canadian dollar, of course, you've got to sell off more of your country, make larger concessions and try and attract, at any cost, foreign capital. Your interest rates go up and you have inflation and unemployment. Our unemployment rate has always been higher than that in the United States because they largely dominate and own so many of our resources. And our inflation rate has always been higher than it is in that country for exactly the same reason.

Here, under this bill, the minister is proposing what I think is a massive alienation and giveaway of resources to entrench existing licence holders until the year 2020; and in the case of the others, until about the year 2007, according to the calculations I have made for TSHLs, which will be converted into the new forest licence.

I think it's incredible. I think it's perfectly consistent with what this government has done in other areas, but I think it's a tragedy for this province that this is presented to us as the solution to our forestry dilemma.

We have an industry that is in serious trouble in the province of British Columbia. Reforestation, which was touched on by the last speaker, the hon. member for Skeena (Mr. Shelford) , is an extremely serious problem. Some people say - and they're experts - that there are 10 million acres of land that are not properly restocked in this province; others put the figure at only seven million. But whatever it is, there is a huge deficit of restocking to be done; there is a huge job of scientific research to be done in terms of spacing and the right species of trees and fertilization and all of these things, and we're not doing it.

Now that hon. member mentioned that we should have another $500,000 every year added to the budget for that. We did much better than that, I might say, during the NDP tenure. But I think all of us on this side of the House would recognize that we were just beginning to tackle the problem of sustaining our foremost industry in this province. And yet this minister in effect is saying: "We're

[ Page 2369 ]

going to entrench the rights of the private companies for a long period of time on the lands of British Columbia, and hope they'll do the job for us." I don't believe it.

What are the objectives? I'm just going to speak for a few minutes, Mr. Speaker, on this bill, which makes me rather sad. What are the objectives of a'proper resource policy in this field and in any field? Employment and income is vitally important to the province of British Columbia. We have about 76,000 people who are directly employed in the forest industry, and it is our major industry. Environmental protection and multi-use of forest land are important, including recreation, which is not only something which improves the quality of life but is also one of our industries in terms of tourists, and yet under this bill almost all the power has been given to the chief forester, and the multi-use of land, including grazing, I might say, is going to have second place under this bill to timber harvesting by the companies whose rights are being entrenched under the bill.

Then we want to see proper public and private revenue and investment, of course, and I've mentioned that in terms of what has been happening on the international scale, I would say that the people of British Columbia are getting a diminishing return in terms of the wealth of the industry year after year in terms of public revenue. Reforestation would be a vital necessity, with a major programme setting aside a large capital fund so that the interest would be available and so that the reforestation could be planned scientifically over not one year - putting a special $10 million into a budget isn't going to do the trick - but so that the scientists could plan over a number of years and make sure that our forests are restocked, although, as that member says, you will never have them restocked in terms of the wealth of size of timber that we had from the early first original growth in this province.

Now, Mr. Speaker, I'm just speaking for myself, but I think we need a much larger public presence in terms of the protection of the forests. I don't think you can give away these privileges for long periods of time and hope that somehow thereby the public interest is going to be served. I don't think under the present proposals, whether they're Pearse or whoever they may be, that there is going to be a proper return to the public treasury from this resource.

I notice that in the Forest Act now you do have a provision for a timber stabilization board. In my opinion the logs that come from the forests of B.C. on their way to the mill should be owned briefly by the public, so that under a timber stabilization board with the most competent people serving - not large, but the best businessmen in the province, the best engineers and the best social planners in terms of the multi-use of the woods - they would have some control, instead of it being vested in the hands of the great international companies, on behalf of the people of this province. I think that in the woods they could make alive the three Es, which, as I recall them, are: efficiency, effectiveness and economy.

AN HON. MEMBER: I thought it was reading, writing and arithmetic.

MR. MACDONALD: No, no. The three Es are efficiency, effectiveness and economy.

MR. KEMPF: Is that what Bob Williams did to Plateau Mills?

MR. MACDONALD: Oh! I'm not going to answer these ignorant - I almost said an unparliamentary word - interjections from across the way.

Then we would again in this province have control of our basic resource. You know, Canada and British Columbia have become areas of colonial exploitation by great international companies, and we depend on them to make our industry effective. We depend upon them to restock the woods and it's not happening, although it's been happening better under treefarm licences than it has been in the public sustained yield units. I think that by that simple expedient of having a strong public presence in the forest industry we would still have private enterprise, and we'd have a far better chance of having some competitiveness among the timber producers and the loggers in this province than we'd ever have under this system.

This bill wipes out any thought of competition. It entrenches the privileges of the existing companies. But if you want to spark real competition, you have to have some public body that is able to allow the timber cut to be harvested by the one who promises the best conservation programme and the cheapest harvesting of logs and the most efficient use. Then you have to send your timber on and make sure it goes to mills where it will be effectively milled and processed, whether it be pulp or saw-log lumber or whatever it may be.

I think we in British Columbia are just afraid c' this problem. We're afraid to say that we could do better with this industry than the international companies. So we patched up a new Act, entrenched their privileges, and

[ Page 2370 ]

walked away from the problem, because we're peasants and not willing to stand up as British Columbians and say that our people awn the resource and, yes, we can manage. We can do it, though not, perhaps, as well as Denmark and Sweden and those countries where timber is scarce. You fly over those countries in an airplane and you see the woodlots carefully harvested and restored, and then you see where they've logged in another area. Every precious cunit is protected and fertilized and generated and regenerated, and nothing is wasted. We're so far behind that with the international control of our industry that it isn't funny.

Now I don't think we could emulate, for a long time to come, some of the standards of those countries, but I think that we, the people of the province, ought to have a strong public presence and that we can restock those devastated forest lands, up to seven million or 10 million acres. We can do it, and we can ensure that our logging operations are efficient on the one side and that the processing is efficient on the other side. Unless we have that strong public presence we're neither going to get the return from the resource or save an industry which, at the present time, and certainly under this bill, is going to be in a very perilous state indeed in terms of our children to come after us.

Mr. Macdonald moves adjournment of the debate.

Motion approved.

Presenting reports.

Mr. Mussallem from the Select Standing Committee an Standing Orders and Private Bills presented the committee's third report, which was read as follows and received:

Mr. Speaker, your Select Standing Committee on Standing orders and private bills begs leave to report as follows:

That the preamble of Bill PR 403, intituled An Act to Amend the Vancouver Charter, has been approved and the bill ordered to be reported with amendments, all of which is respectfully submitted. George Mussallem, Chairman.

MR. MUSSALLEM: Mr. Speaker, I move that the rules be suspended and the report adopted.

Motion approved.

Mr. Bawtree from the Select Standing Committee on Agriculture, Weeds in British Columbia, presented a report which was taken as read and received.

HON. MR. WILLIAMS: Mr. Speaker, in moving adjournment I would join with the House Leader of Her Majesty's Loyal Opposition in making it known to you that the members of the Assembly and other persons associated with this Assembly require your presence in the Ned deBeck Lounge forthwith upon your leaving the chamber.

MR. SPEAKER: Thank you. I thought we just came from there.

HON. MR. WILLIAMS: Well, we're just going back. (Laughter.)

Hon. Mr. William moves adjournment of the House.

Motion approved.

The House adjourned at 6:01 p.m.