[ Page 2657 ]

CONTENTS

Routine Proceedings

Oral Questions.

Alleged polygraph testing of welfare recipients. Ms. Brown –– 2657

Indexed pensions. Mr. Lauk –– 2658

ICBC discount for old-age pensioners. Mr. Hall –– 2658

Liard and Stikine-Iskut dam projects. Mr. Passarell 2659

Moneys held by travel agents. Mr. Barber –– 2659

Election campaign practices. Mr. Macdonald –– 2659

Pollution at Alcan plant. Hon. Mr. Heinrich replies –– 2659

Committee of Supply; Ministry of Agriculture estimates.

On vote 10.

Hon. Mr. Hewitt –– 2660

Mr. Barber –– 2661

Hon. Mr. Hewitt –– 2661

Mr. Hall –– 2661

Hon. Mr. Hewitt –– 2663

Ms. Brown –– 2664

Hon. Mr. Hewitt –– 2664

Division on vote 10 –– 2664

Committee of Supply; Ministry of Forests estimates.

On vote 103,

Hon. Mr. Waterland –– 2665

Mr. King –– 2666

Hon. Mr. Waterland –– 2667

Mr. Hanson –– 2673

Mr. Lockstead –– 2674

Hon. Mr. Waterland –– 2675

Mr. Hanson –– 2676

Hon. Mr. Waterland –– 2678

Mr. Howard –– 2678

School Amendment Act, 1980 (Bill 20). Hon. Mr. Smith.

Discharged — 2680

Tabling Reports.

Agricultural aid to developing countries, annual report 1979-80.

Hon. Mr. Hewitt –– 2680

Appendix –– 2680

The House met at 2 p.m.

[Mr. Davidson in the chair.]

Prayers.

HON. MR. MAIR: Mr. Speaker, I am very pleased to tell you and the members in the House today that I have some very important guests. Following along the lines of the Leader of the Opposition and my colleague the Minister of Education (Hon. Mr. Smith), I know that these guests will ensure unprecedented good behaviour for Mr. Speaker today. In the gallery along with my wife Patti is a dear friend of mine, Mrs. Marion Tepoorten; my cousin Mrs. Ann Robertson; and my mother, Mrs. Kenneth Mair. Would the House please make them welcome.

MR. LAUK: On behalf of all hon. members of the House and particularly the Minister of Education, we have in the galleries today several groups of teachers from all parts of the province, led by the president of the British Columbia Teachers' Federation, Al Blakey, and some members of the executive of that federation. I ask the House to welcome them.

HON. MR. FRASER: It is not often that I have guests from the Cariboo. I am honoured today to introduce to the House teachers from the Cariboo, Mr. Bob Wanless, from Williams Lake School District 27, and Mr. Mike Stevens, from my home town, Quesnel School District 28. I'd like the House to welcome them.

MR. HANSON: It's my pleasure to have my parents here today visiting from Vancouver, and I'd ask the House to make them welcome.

HON. MR. WATERLAND: With the teachers today are a group of teachers from the Yale-Lillooet constituency; one is from Merritt. I'm not sure if the teachers are still here, Mr. Speaker, but visiting with us is a good friend of mine, Peter Malach, who has recently moved from Merritt to Victoria, and one of his associates, one of the teachers, Heinz Lange. Would the House please welcome them.

MR. NICOLSON: Also in the gallery today are Mr. Cliff Faulkner, president of the Arrow Lake teachers, from New Denver, and Loretta Young, president of the Nelson District Teachers' Association, from South Slocan.

HON. MR. CHABOT: Mr. Speaker, we also have, from the great riding of Columbia River, Mr. Brian Domney, president of North Columbia Teachers' Association. I'd like the House to welcome him.

MR. PASSARELL: Mr. Speaker, in your gallery today is an MLA from the Yukon, Mr. Grafton Nyootla. Grafton's riding is the most north western constituency in Canada.

MR. LOCKSTEAD: We have in the gallery today teachers from School District 46, Doris Fuller and Fran Jovick; from School District 47, Mr. Bill Foster; and from School District 49 in Ocean Falls, Mr. Bruce Johnson, who will not be there much longer as the government is shutting down that community. I ask the House to join me in welcoming them.

HON. MR. SMITH: On behalf of the Ministry of Education. I would like to welcome all the teachers who are here today in the gallery today and in the precinct, and particularly Al Blakey, with his TNT button, with whom I had a good half-hour meeting today.

HON. MR. HEWITT: In the gallery today we have Mrs. Hawley, who is a teacher from the Olympic Elementary School in Edmonds, Washington, accompanied by 11 of her students and by two mothers of students, Mrs. Dick and Mrs. Garbinson, who are visiting Victoria. Although Mrs. Hawley is a teacher in Washington, she is a native British Columbian. Accompanying Mrs. Hawley and the students is the wife of my deputy minister, Mrs. Elizabeth Peterson. I'd ask the House to welcome those students.

Also in the gallery today are five teachers from my constituency. My constituency, being one of the larger southern constituencies of this province, I have Mr. Nickel from the city of Penticton, Mr. Paul Wood from Grand Forks. Mr. George Dodd from Oliver, Mr. Michael Palmer from Summerland, and Mr. Huggard from Keremeos. I'd like the House to bid them welcome.

MR. STRACHAN: I would like to introduce to the House a friend of mine, a former president of the Prince George and District Teachers' Association, and now back in the classroom. Just to show you that we're all good friends in Prince Georee South, this gentleman is also the treasurer of the Prince George South NDP association, Mr. Dou Smart.

HON. MR. HEINRICH: Mr. Speaker, I did meet this morning with Mr. Smart and greeted him. I was glad to see the opposition in my office. But with Mr. Smart from the Prince George area and the district municipality of Mackenzie, both within School District 57. are Mr. Don Mullis from Prince George and Mr. Jack McDonald from Mackenzie. I would like the House to bid them welcome too.

Oral Questions

ALLEGED POLYGRAPH TESTING
OF WELFARE RECIPIENTS

MS. BROWN: My question is to the Minister of Human Resources. Has the minister advised the police that polygraph tests are to be used when welfare recipients report a loss by theft?

HON. MRS. McCARTHY: No. Mr. Speaker, our ministry has not advised the police. I think the member's question probably emanates from an article in the morning paper which reports that police are using police investigative tests on welfare recipients. It is not a policy of the Ministry of Human Resources. I'd like the member to know that any investigations which are under police investigation are matters and questions to be asked of the police.

MS. BROWN: Mr. Speaker, first of all. I would like to thank the Minister of Human Resources in her continuing

[ Page 2658 ]

quest to educate me. When did the minister become aware of the existence of this policy on the part of the police?

HON. MRS. McCARTHY: Approximately 4 o'clock yesterday afternoon, when the questioning that had been given to my deputy minister was reported to me. My deputy minister's report in answer to the query of the reporter of the Province was very clear earlier than that, but was given to me about 4 o'clock. That was the first indication and knowledge I had of this subject.

MS. BROWN: On a supplementary, Mr. Speaker, has the minister taken very definite steps to alert the police that welfare recipients are not to be singled out for lie detector tests if they report a loss by theft?

HON. MRS. McCARTHY: Mr. Speaker, it would not be within the prerogative of this ministry to give any kind of direction to the police forces in our province. When there are any charges of fraud or any charges involving criminal activity, I think that it would be within the realm of the police forces in this province and the courts. It would be untoward for me to direct that area of responsibility.

MS. BROWN: Is the minister aware that it is not the policy of the police to ask anyone else who reports a loss by theft to have a lie detector test and that this is reserved for welfare recipients? Is she aware of that?

HON. MRS. McCARTHY: No, Mr. Speaker, I am not aware of that. Questioning of my ministry since this subject has been raised would, as a matter of fact, lead me to think otherwise.

MR. LAUK: I have a question of the Attorney-General. Has the Attorney-General's ministry advised the police at any time that polygraph tests are to be used when welfare recipients report such losses by theft?

HON. MR. WILLIAMS: Mr. Speaker, I have no specific knowledge of the matter which would enable me to respond directly to the member's question. However, I wish to thank the member for indicating his concern on the matter to me before the House sat today. In the few moments available to me I asked for a full report on the practices, and I'll be happy to share that with the House as soon as it is received.

I might say that if such instructions or practices have been given or are being carried out, they're not in conformity with my views on the handling of reported criminal acts.

MR. LAUK: We support that view, but I have one follow-up question to the Attorney-General as he looks into the matter. We are advised that the Ministry of Human Resources officials at the local level have advised welfare recipients, when they report such losses, that they will not be considered for a special allowance unless they have reported the theft to the police; and that the police, on the other hand, have indicated that so many of these thefts have been reported that they have been using polygraph tests and have done so in consultation with MHR officials. Is the minister aware of that? If not, maybe that should be considered in his investigation.

HON. MR. WILLIAMS: Yes, Mr. Speaker, that is part of the information that I have requested to be provided to me. If the member has any specific details of these matters, I would be grateful if he would provide them to me.

INDEXED PENSIONS

MR. LAUK: I have a question on a different matter to the Provincial Secretary, Mr. Speaker. In view of the fact that the Minister of Consumer and Corporate Affairs (Hon. Mr. Nielsen) argues that landlords need an annual rent increase of 10 percent because of inflation, how does the minister justify currently using the figure of 8 percent as a maximum index increase in pensions for, let's say, retired teachers?

HON. MR. WOLFE: This is a matter, as the member realizes, based on legislation before the House. I don't think he'll find a reference to 8 percent in that legislation. What is embodied here is some attempt to put some security in our ability to pay future adjustments to pensioners. I think everyone in this House would support that. It has no relationship, I would say, to other percentages you may wish to throw around in terms of consumer affairs. But perhaps it might be more appropriate to discuss this under the legislation. I think we've had fruitful and friendly discussions with teachers here this morning, related to this matter, and to a large degree they have been a part of these discussion that have worked toward the sort of package of amendments which we have before us today.

ICBC DISCOUNT FOR
OLD-AGE PENSIONERS

MR. HALL: Mr. Speaker, I have a question for the Minister of Agriculture, as the minister responsible for ICBC — also dealing with people's ability to pay. Has the minister instructed the corporation to modify the implementation of the FAIR program by allowing seniors — old-age pensioners, that is — who presently receive a discount on their automobile premiums, to continue receiving it, and applying the FAIR policy effective next year, which will see an end to that discount to, say, new policy-holders only?

HON. MR. HEWITT: Mr. Speaker, I'm not sure what the question was, but I gather the member is referring to a discount to seniors under the FAIR program. At the present time the FAIR program's rates are based on the principle that each person who drives a car will pay a rate and all drivers will be considered to be equal; there will be no discrimination, and that's the FAIR program as it exists at the present time.

MR. HALL: The minister may have some difficulty in understanding the question. I think his difficulty is in dealing with the impact of what he's done as a minister of ICBC. The fact of the matter is, the seniors aren't going to get a discount any more, Mr. Minister, and seniors will not enjoy the discount they have enjoyed in almost every other endeavour of government activity. I'm asking the minister: has he instructed ICBC to modify, in any way whatsoever, the implementation of that program by scheduling it in, delaying the implementation, or at least following the example set by the general insurance sector of ICBC in continuing to give some sort of discount to senior citizens?

[ Page 2659 ]

HON. MR. HEWITT: No, I've given no instructions to ICBC.

LAIRD AND STIKINE-ISKUT
DAM PROJECTS

MR. PASSARELL: I have a question for my friend the Minister of Energy, Mines and Petroleum Resources. Has B.C. Hydro ordered a preliminary study of northern transmission corridors to link the potential dam sites of the Stikine-Iskut and Liard Rivers with the lower mainland?

HON. MR. McCLELLAND: I'll take that question as notice.

MR. PASSARELL: I have a new question to the same minister. Have any studies been deliberately designed to exclude consultation with any group?

HON. MR. McCLELLAND: That is a weird question. I don't know how to answer it.

MR. PASSARELL: Maybe I'll repeat it so he can hear it again.

HON. MR. McCLELLAND: No, I just said it was a weird question.

MR. PASSARELL: A new question to that minister. Have any studies been done by B.C. Hydro concerning the proposed northern dam scheme to exclude consultation with any group in the north?

HON. MR. McCLELLAND: That is a strange question from a strange member and unfortunately I'm just not able to answer it.

AN HON. MEMBER: Do you take that as notice?

HON. MR. McCLELLAND: No!

MR. PASSARELL: Another question to the rude minister. Can that minister assure the House that anyone affected by the northern dam studies will be consulted and that no one will be left off through a policy exclusion of northern dam studies and transmission corridors?

HON. MR. McCLELLAND: At the risk of.... To my friend, who goes around calling people racist and things like that....

AN HON. MEMBER: Aw, come on! That's not true.

AN HON. MEMBER: It's true.

HON. MR. McCLELLAND: Well, he does. It's true. I don't know how many times I have to reiterate government policy in that regard, but there will be legislation coming forward into this House within a matter of one or two weeks which will ensure, for the first time in the history of this province, that every major energy project is submitted to a full public review. That will be enshrined in legislation and will ensure that there will be public input from all those people who are concerned with various major energy projects. It will be a history-making move by this government which has always been concerned that public input and public participation are protected.

MONEYS HELD BY TRAVEL AGENTS

MR. BARBER: I have a question for the Minister of Consumer and Corporate Affairs. Section 7(1) of the Travel Agents Registration Act reads: "Money received by a travel agent or travel wholesaler carrying on business in the province shall be deemed to be held in trust for the person who paid it." Section 22(l) of the same act reads: "The registrar" — referring to the registrar of travel agents — "may at any reasonable time enter the business premises of a travel agent or travel wholesaler to make an inspection to ensure that this act and the regulations are being complied with." Has the minister received from the registrar of travel agents any report, as provided under section 22, indicating that a travel agent is in default of the provisions of section 7 of the same act and is thereby liable for the payment of certain funds owed but not deposited under the terms of the trust requirements?

HON. MR. NIELSEN: I'm not aware of that but I'll take the question as notice and check into it.

ELECTION CAMPAIGN PRACTICES

MR. MACDONALD: I have a question to the Attorney-General in the form of a memory test. Does the Attorney-General have any recollection of work ordered in his department relating to a Mr. Dan Campbell and his unrecorded thousand-dollar bills? This is a long time ago. Has he any memory of that?

HON. MR. WILLIAMS: No.

HON. MR. HEINRICH: I have two or three answers to questions which were asked of me. May I have leave to answer them?

Leave granted.

POLLUTION AT ALCAN PLANT

HON. MR. HEINRICH: The member for Comox (Ms. Sanford) asked whether the WCB regulations would be altered to ensure that former Alcan employees, who may have suffered due to inadequate pollution standards, be allowed to claim compensation benefits. The answer which I have obtained from the WCB is as follows. The WCB is currently analyzing the content of the Brisebois report and will then decide what special action, if any, is necessary regarding former Alcan employees. The act already provides that all workers who suffered industrial injury or disease as a result of their employment are entitled to compensation benefits. Alcan employees and former Alcan employees are now entitled to put in claims if they believe they have been injured or diseased through their employment.

With respect to the second question asked by the hon. member for Comox about whether there is a contact with the former workers at Kitimat, the board has a $200,000 health study underway at Alcan as reported in the WCB's 1979 annual report. The study is being conducted by Doctors Moira Yeung and Stefan Grzybowski, and the board will take whatever action is appropriate on the outcome of that study.

[ Page 2660 ]

A further question was asked by the second member for Victoria (Mr. Hanson) with respect to enforcing regulations. He referred, I believe, to regulation 36.05(l)(d), which requires employers to provide shower facilities for workers exposed to finely divided lead or lead compounds. The answer that I have for the member is that the board does require such shower areas, and the company, Cominco Ltd., is supplying those shower areas. The issue here is one which has been subject to labour arbitration between the United Steelworkers of America and Cominco Ltd. The question is whether the company has an obligation to pay the workers for their shower time in addition to providing the time and facilities.

The board is concerned with industrial health and safety and we are satisfied that the company has provided adequate shower facilities and adequate time. We have no position to take in labour relations matters concerning the issue of paying or not paying for that shower time; that's a matter of the collective agreement.

Orders of the Day

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

ESTIMATES: MINISTRY OF AGRICULTURE
(continued)

On vote 10: minister's office, $129,448.

HON. MR. HEWITT: Mr. Chairman, I just wanted to take the opportunity at the opening of debate to comment on some remarks made by the first member for Victoria (Mr. Barber) yesterday concerning ARDA assistance, or, as he put it, welfare to the agricultural industry. It concerns the ARDA program, and I'd like to go through some of the guidelines for ARDA assistance in order that the member will understand that the program is there to assist and support the agricultural industry and to make it more viable than it is. The one individual who the member attacked yesterday was a Mr. Fitzpatrick of the McLean and Fitzpatrick packing house in the Okanagan Valley, and I think it's only fair that I set the record straight.

The guidelines for the projects under part 4 of the ARDSA agreement.... The objective of part 4 is to provide the support services needed in rural areas to develop the agriculture industry to secondary processing and valueadded stages, thereby improving stability and rural employment opportunities. This ARDSA agreement is a joint federal-provincial agreement, jointly funded — $30 million by the government of British Columbia and $30 million by the federal Department of Regional Economic Expansion — and is for a five-year term. Mr. Chairman, the program provides conditional grants in the form of interest-free forgivable loans. To be eligible, the project must provide a service designed to encourage primary agricultural production, including a number of items such as livestock treatment facilities, produce collection and sale facilities, and community pest and disease control facilities. All sorts of projects can be placed, encouraging primary agricultural production. Also, an eligible project may be to establish a value-added processing operation to enhance the value of food production, packing or grading facilities, which would thereby give a better return to the grower and a better product to the consumer. That is the section under which McLean and Fitzpatrick applied.

The project has to be financially viable and have an adequate supply of raw material and a market for the product, the processor must be technically sound, and the applicant must demonstrate a need for financial assistance. Mr. Fitzpatrick applied to the program and met those criteria. Also, criteria are in place for equity requirements, and the equity of an applicant for a project which is under review must be equal to or greater than 20 percent of the net book value of existing capital assets of the facility, plus 20 percent of the capital cost of the new, expanded or modernized structures, plus 20 percent of the working capital estimated to be required for the purpose of producing the selected primary or secondary products.

So the individual involved has to have an equity position in the venture. We are not looking at welfare for agriculture, but assistance to the agricultural community, and the individual, co-op or company involved must have its equity up front. The assistance ceiling for an operation such as McLean and Fitzpatrick, for expansion or modernization of their plant, is 20 percent of the eligible capital cost of expanding or modernizing the structure. That is the maximum. So the other 80 percent is derived either from financing or equity. Again, that's an indication to the House that we're not talking about welfare to agriculture; we're talking about assistance to agriculture to maintain a viable industry in this province. Then we look at the administration of it. The member across implied that because Mr. Fitzpatrick lived, first of all, in the Premier's riding, and secondly, because he was involved with the Social Credit Party, he got favourable consideration.

I'd like to explain the process that any applicant has to go through in order to get assistance under this program. First of all, there's an investigation of the application by the farm products finance branch of my ministry. After their investigation is completed, that branch makes a recommendation to the subcommittee of ARDSA, which is basically the technical committee. They review that application and the report from my farm products finance branch, and then make a recommendation to the management committee of ARDSA, which is a joint federal-provincial committee. When that committee approves it, the application is placed before the Minister of Agriculture for the province of British Columbia for ratification, and the Minister of Regional Economic Expansion for Canada for ratification. There's no political involvement, as the member across would imply, but a program that is put into place, as I mentioned before, to assist the agriculture industry in this province.

Then the member questioned how he got paid. I advised the member that the project was audited. Just to give him the specific guidelines, up to 85 percent of the forgivable loan was disbursed on presentation of progress reports, which would be presented by the applicant and either the consulting engineers or the contractor in regard to progress of the project and the fact that payments have been made. Once we have an indication that the job is progressing according to the application and that payments have been made, then we, of course, disburse from the ARDSA funds.

I mentioned 85 percent, because the balance of 15 percent is only disbursed after the completion of the project and subsequent to on-site inspection by members of my ministry.

In regard to the program itself, which the member indicates is welfare, yes, it is a non-interest-bearing forgivable

[ Page 2661 ]

loan. The rationale is that 10 percent of the loan is to be forgiven annually on the anniversary date of the final payment of the forgivable loan for the first five years. The balance is forgiven in the sixth year, provided, first, that the applicant is still operating with the approved structures, machinery and equipment and is in the same line of business as was the case when the forgivable loan was granted; secondly, that the terms and conditions under which the loan has been granted have been met. Failing that, the loan is not forgiven.

Mr. Chairman, I just want to take a moment to explain to the House and to the first member for Victoria that I consider this to be an attack on an individual, Mr. Fitzpatrick of McLean and Fitzpatrick, whose family has been in the agricultural business in this province for approximately 50 years and who has employees in that plant who work hard, and who has attempted to upgrade his facility — according to the industry report that was done and was agreed to by the entire industry and by my ministry — only to be named in this House, or to be fair to the member, it was implied in this House by the member that this person got some special consideration in regard to his project. I'm sure that not only the employees but the producers that supply product to that plant would be somewhat concerned about the statements made by the member for Victoria. So that should give an answer to the questions raised regarding Mr. Fitzpatrick and the ARDSA project he has applied for and the funding he has received through that program from my ministry.

MR. BARBER: First of all, I'd like to thank the minister very much for such a detailed reply to my questions.

Secondly, I should like to make certain that he doesn't misunderstand the position of the New Democratic Party in regard to the ARDSA program. We hold that it is a good and welcome program. It's an important investment in the economic life of the province of British Columbia. It's an important and a good program and it will be all the better if it's well and impartially administered.

When I spoke yesterday, the administration of the lotteries funds, for instance, was the furthest thing from my mind when I thought about the possibility of funds being spent in a peculiar way. The lotteries fund never occurred to me. Nonetheless, I thank the minister for his detailed reply.

Secondly, I invite the minister to join with us in making a representation to the Minister of Human Resources (Hon. Mrs. McCarthy) as follows. From now on I ask the Minister of Agriculture to do this. Would he persuade the Minister of Human Resources to rename welfare cheques and print instead on them: "An interest-free forgivable loan to the following citizen of British Columbia"? On that basis, I think, the prejudicial or euphemistic language, depending on which side of the issue you view it, might for once be put to an end. I believe strongly that if business deserves a break from the Crown, and the ARDSA way is a good way to deliver it, that's just fine by me. If individual human beings deserve a break from the Crown, that's fine too. But at the moment there's a social prejudice. When we do something good for business we call it an interest-free forgivable loan. When we do it for a human being we call it welfare, and some people sneer. I wonder if the minister would agree to join with us in persuading the Minister of Human Resources to retitle welfare cheques as "interest-free forgivable loans."

MR. CHAIRMAN: Remembering that we do discuss the administrative actions of the vote before us, I recognize the Minister of Agriculture.

HON. MR. HEWITT: My comments exactly. We're discussing the Minister of Agriculture's estimates. I think I'm standing basically to correct the member. There are no cheques that go out that say "welfare" on them; I think he's aware of that.

MR. BARBER: I'm sure you understand the point.

MR. HALL: Mr. Chairman, I know that you know that I've been sitting here patiently since Monday afternoon to talk about ICBC again, as I've only had one go at the minister.

AN HON. MEMBER: Be brief.

MR. HALL: I don't think we'll be very long if we can keep certain members, mostly on your side, under control.

HON. MRS. JORDAN: You don't have any members present over there.

MR. HALL: When I'm up, I don't need anybody on this side.

The first thing I'd like to do, Mr. Chairman, is to perhaps go a little more deeply into the question at 2(15), about the implementation of the FAIR program for senior citizens.

It seems to me that there was a choice made at the time the directors and the government introduced the full effects of the program of removing discrimination. We voted to remove discrimination on the grounds of sex, age and territorial location. I think it is of passing interest that it is going to take the corporation a number of years to remove the discrimination based on territory. It's going to take them a few months to remove the discrimination based on age. And that was the point of the question I asked regarding the old-age pensioners.

If it's possible to schedule the removal of the discrimination based on territory and slowly to get the thing together tidily and properly without dislocations, without affecting people, without having people too upset over the fact that somebody in Ponce Coupe or Vanderhoof is going to be paying a lot more over a one-year period than somebody in the city of Victoria.... If we can get that together nicely and evenly over a known period of time, why can't we schedule 1n the increase of payments — and that's what it is that old-age pensioners are going to make?

At the same time we've done that, we've announced boldly, and to the chagrin of the private sector — who you always claim are your friends and who the Premier made a very, very strong supportive speech about late on Thursday afternoon — that you're offering large discounts to the senior citizens on their general home insurance, discounts which the private sector say aren't justified and represent a straightforward political interference in the private sector.

All I'm saying is that it seems to me that you got some bad advice. I think, Mr. Minister, if I may use some colloquial language, you've been taken by the board. They've given you something that's not too palatable to announce. It could have been this other way round just as easily, and I think, perhaps, you were too busy on other matters and weren't onto that one.

[ Page 2662 ]

Let me go back to a couple of the questions I asked on Thursday, to which you gave me a reply. You went over the list but the reply really wasn't very satisfactory. I want to just reword it.

I want to indicate to you the strangeness of the following situation. On two occasions only in the history of the automotive business in British Columbia in the past six years the combines investigation people have been present in this province. On only two occasions have the federal combines people entered people's offices, seized documents, checked on invoices and generally caused alarm and despondency and a great deal of expense for lawyers, consultants and everybody else — on only two occasions in the last 10 or 15 years in the history of the automotive industry.

Both of those arrivals of the federal combines people followed closely upon disputes with the corporation. Once is a coincidence, but may I suggest to the minister that twice is enemy action. Frankly, for combines investigation people to start investigating small businessmen in the little communities at the northern end of Vancouver Island, central Vancouver Island, and small operators in the city of Vancouver, is, I think, using a big stick to cure a problem for which some honest-to-goodness negotiation might have been the answer. Frankly, I can't accept your blanket statement appearing in the Blues as: "At no time did the corporation call in the combines investigation people. In regard to the second question — the member cited the use of the federal legislation in calling in the combines investigation people regarding supply companies and, I believe, body shops — I would advise the member that at no time did the Insurance Corporation call in the combines investigation people. "

Mr. Member, who did, if it wasn't ICBC? Was it the government? Maybe I shot the arrow the wrong way. Maybe the government called them in. Maybe the government doesn't need the ten signatures required by law. Maybe it just needs the one signature by the Attorney-General, or maybe the minister himself. I don't know. For a group of MLAs banded together as a cabinet and a government — who ran for office twice on the ticket of free, private enterprise — to adopt that particular weaponry, having asked for tenders, having asked for bids, having asked for supplies and services by the automotive industry, smacks a little bit to me of.... That's certainly not the kind of election promises you were making in 1975 and 1979.

I want now to turn to the other answer you gave, which I think you glossed over rather quickly. That is the question of the driving school rebates. It seems to me that here you are saving $500,000 on the basis of some statistics which have been gathered from 1974 to 1979 — statistics which, even as you corrected them and did away with the scheme effective the end of the year.... The figures were already being challenged in your office, already being challenged in the corporation, and fresh figures were already available to you which indicated your decision was based on incorrect information. Already information was being gathered that indicated that the basic premise upon which you based your removal of the rebate was outdated. I can only come to the conclusion that it's some kind of economy program; the word is out in the corporation to cut down on as many expenses as possible. Taking it by and large, that is a laudable exercise, but not when it goes against what is sensible. When the figures are really examined, as they have been by the association of driving instructors, or when you look at the motor vehicle branch's own figures, you see that there is a difference in the figures, that the figures that were used by the minister's colleagues to remove this rebate....

They now have to admit that the figures were wrong, that the figures indeed show that trained drivers have fewer accidents and demerit points. The minister has had the statistical rating of the schools. He's had correspondence. He's had the copies of the minutes of the driver-training liaison committee. He's got conclusive proof that driver education support and encouragement is necessary. He's got the figures from the various companies. Apparently the companies are superior to both the trained groups and the untrained groups in various of the lerge driver-training schools. He's got evidence from the eastern seaboard states in the United States. He's got evidence that other provinces continue this kind of support. He's got evidence that private sector insurance corporations offer the same kind of rebate. He's got the full commitment from the industry that they're prepared to improve and to meet and to put forward even more classroom hours and more work to make a better program. Yet his answer was just the bland one that they were looking into it.

I want to get a commitment from the minister, if I can, that they aren't going to leave it there, that they are going to see that there is some incentive for people to get driver training and an incentive that means something — some certificate that is going to mean something when they go to buy their insurance at ICBC or when they go to a driving school. That is the kind of incentive that this government always talks about. This government has told us that a bottom-line incentive is the best motivator, and that is the one I am asking for today. I want a commitment from the minister to improve that situation.

Lastly on this review of Thursday afternoon's debate, I want to go back to the minister's strange reluctance to meet with his colleagues and representatives from the industry that deals with ICBC. I find it passing strange that the minister, who is known to be a bluff, hearty, well-meaning fellow, couldn't put an hour in with somebody and, gritting his teeth and with a stiff upper lip, go through it. Why did you say you were meeting under protest? Why did you have to spoil it for them? After all, most of them voted for you. It seems to me that that was a dumb thing to do, if I may say "dumb" in a political sense; the minister is an educated, clever man. It isn't the smartest political thing to suggest to people who wanted to meet with that caucus committee....

I don't want to know what you discussed. That's not my business, as I was told so often. Frankly, I find that what happens in this place is usually public knowledge before very much time goes past. As a matter of fact, here is a letter addressed to Mr. Ritchie from the group that attended the meeting. They were pleased to meet with Mr. Ritchie, the Hon. James Hewitt, senior director of ICBC, Mr. Angus Ree, Mr. Bruce Strachan...

MR. CHAIRMAN: Perhaps, hon. member, you might remember that we refer to members of the House by their portfolios....

MR. HALL: Yes, I'm reading from this document dated May 20, 1980.

... the member for Dewdney and the member for Omineca. This is what I am curious to know about; this is what I am getting down to. I realize that no board of directors of a corporation can commit that corporation to action because he happens to be meeting with his colleagues in a

[ Page 2663 ]

political sense. That's why I said that the minister could probably have stiffened up a little, and smiled, and gone through and listened and said the appropriate things, as the Minister of Health (Hon. Mr. Mair) does when he meets with doctors, and perhaps as the Minister of Agriculture does when he meets with tree-fruit growers.

The member for ICBC — if I can use that language appeared to have some difficulty sitting down that day. I want to know if, when he did sit down.... Now we've got the evidence of what they wanted to do. Have you made any decisions at all, Mr. Minister, regarding the kinds of future negotiations you are going to have with that industry? Are there going to be regular yearly reviews of the rates paid, or are you going to continue to be a year and a half behind, to ignore the facts of the matter about wage rates being settled after you give your allowances out? Are you going to meet with the other industry sectors and have a regular date with them in which those people supplying services to the corporation will know where they stand on a certain date each year?

" If our industry" — and I'm reporting here "had been able to enter into discussions with the corporation as to an agreement on a 1980 charge-out labour rate based on actual labour costs, then yesterday's meeting" — that's the meeting that you were at — "would not have been required. But as we told the caucus, and as is clearly shown in the copies of our recent correspondence with the corporation, and which were left with you" — and I have those — "ICBC refuses to meet with the industry to discuss any adjustment of rates. They have arbitrarily decided the prices they impose upon the industry cannot be reviewed, regardless of the new wage settlement recently won by the union" — by the work-people employed by the supplying industry.

"Operators should not be expected to provide service to the corporation at a loss, and each day makes the situation more desperate. Would you therefore please arrange for the corporation to meet with the industry committee no later than May 29, 1980, so that negotiations for a proper and realistic 1980 rate can take place."

Now what has been the decision there, Mr. Minister? Can you tell me what the corporation is going to do about meeting with the industry committee no later than May 29? It's the 28th today, I think. Now you may get your vote....

HON. MR. HEWITT: Don't give me any false hopes now.

MR. HALL: I've got a sneaking suspicion you may get your vote a lot sooner than you think. You may get your vote very soon, and you'll be out of here, and you can go dashing down to another meeting and be a reluctant hero and get that meeting arranged.

The other main topic discussed with the company....

This is a new subject, Mr. Minister, that has not been mentioned before, but is a serious one, because it goes to one of the things you had said in one of your replies which I happened to agree with you about, and one which I was very proud of. It's a serious one and one I happen to disagree entirely with the Automotive Retailers Association about.

MS. BROWN: Mr. Chairman, I would just like permission from the House to introduce a group of students who are now leaving.

Leave granted.

MS. BROWN: Visiting with us in the gallery this afternoon, Mr. Chairman, were a group of 36 grade 10 students from Edmonds Junior Secondary School, who are studying government. They're accompanied by their teacher, Mr. Dahlo. I wonder if the House would join me in welcoming these students before they leave the gallery.

MR. HALL: Going back to this last question for the minister, the other main topic discussed with the government caucus — I inject the word "government":

"We hope that all our elected officials will support our contention that there is absolutely no justification for the heavy expenditure of our dollars in keeping open the very large corporation- owned, retail body shop in Surrey, known as Autoplan Autobody, which operates in direct competition with shops operated by the private sector.

"Our letter, which accompanies our submission, documents the case for closing down this totally unnecessary facility."

My last question, therefore, in reviewing all the others with you and going into some new material, is: may I get the minister's assurance that that will continue to be a living laboratory and a check on body shops and, indeed, a measurement of the efficiency and cost control in the industry for a long time to come?

HON. MR. HEWITT: Mr. Chairman, if I can go back to the beginning, regarding the increase to senior citizens and the phase-in of that increase under the FAIR program — I think that's how the member phrased the question — at the present time the FAIR program, of course, treats all drivers equally as it comes into being, and the rate of insurance, the premium, will be the same for all drivers. I can understand the member's concern, and it's an approach we can give some consideration to. I haven't got an answer for you, but I have advised this House that we're going to have a planning session of the board of directors of ICBC, and maybe this is one of the issues that we can explore at that time.

With regard to general home insurance, the 20 percent discount given to seniors and the objection — as the member put it — from private companies, a number of other private companies have been giving senior citizens discounts on general insurance well before ICBC. So it's not new or specifically related to ICBC.

In regard to the combines investigation branch, I advised you the other day that ICBC did not call in the combines investigation branch, the government did not call in the combines investigation branch, and the minister did not call in the combines investigation branch. All this of course relates to, I believe, Campbell River; I think you were raising the issue in regard to body shops in the Campbell River area.

As to the driving school rebates, and the $500,000 saving effective next year, when the program of $50 to drivers taking the driving school course will be discontinued, as I advised the member the other day, management is working on a new concept which will make more effective use of the drivers' premium dollars. As the member recognizes, the funds used for any of these programs are not government

[ Page 2664 ]

funds, but funds supplied or provided by the corporation out of insurance premiums paid by the motorists of British Columbia. If the statistics that are gathered indicate that we haven't received the best use of those dollars, then it's only the responsibility of management and the board of directors of ICBC to ensure that the dollars are well administered and well spent, and that we get a fair return on whatever investment is made.

In regard to proper administration, I can't recall just what that one was about, but I only point out to the member that, as in any insurance corporation, the premiums are pooled to cover claims against that corporation; rates are set that properly reflect the amount of dollars required through premiums to cover the potential claims of the corporation. I much prefer that approach, Mr. Chairman, as opposed to the previous administration's approach, where ICBC suffered substantial losses because it wasn't actuarially sound. I think of the recent experience in Saskatchewan. I believe that Saskatchewan government insurance reported a $29 million loss in 1979. I am sure that in the reports that I've seen they are now going to have to address themselves to recognizing the insurance concept, which is really that the premium should pay for claims rather than setting rates on an actuarially unsound basis.

In regard to meeting with the ARA, I have met with the ARA, Mr. Member, shortly after I became minister responsible. I have met with the independent insurance agents, and I've met with the towing company association, the taxi cab association and independent insurance adjusters. As minister responsible I have met with them on numerous occasions to attempt to hear their thoughts, and then, of course, be more knowledgeable when I sit down with the board of directors of ICBC and attempt to determine policies of that corporation.

In regard to the body shop, no decision has been made with regard to the body shop operation. The shop operates. It does have some merit, Mr. Member, as you say, in determining rates for body-shop work, in determining or establishing the latest techniques, providing apprenticeship jobs for young people looking at that for a career. It also has a program where it brings in independent body-shop owner operators and holds courses for them in how they can better manage their own independent operation. So it does have some merit, although it does impact to a certain extent on the body-shop industry in this province. I understand the concern of the Automotive Retailers Association.

MS. BROWN: I'm going to be very brief, Mr. Chairman, because there are a group of students waiting to meet with me.

Earlier in the estimates I mentioned to the minister about the farmers in the Big Bend of the Burnaby area down on the flats. I just want to bring to his attention that on Thursday last they suffered a lot of damage from a hail storm, and a number of those farms — ten of them in particular — were very seriously damaged. As he knows, most of the crops grown on those farms are vegetable crops. Some of them are so seriously damaged that they've had to be ploughed under, and now there has to be some replanting because the damage is so severe. The farmers are talking about damage in the order of about $100,000 and about 100 acres. I'm wondering whether the minister would declare this a disaster area and make these farmers eligible for the Distress Area Assistance Fund, that joint federal-provincial fund that would help them in terms of the replanting and getting back on track on this particular area. This is on the flats.

HON. MR. HEWITT: My deputy minister advises that my staff are assessing the damage down in that area at the present time.

Vote 10 approved on the following division:

YEAS — 28

NAYS — 22

Mrs. Wallace requested that leave be asked to record the division in the Journals of the House.

Vote 11: deputy minister's office, $1,155,166 — approved.

Vote 12: finance and administration, $1,137,221 — approved.

Vote 13: field operations, $9,863,929 — approved.

Vote 14: economics and marketing services, $1,200,310 — approved.

Vote 15: Financial Assistance Program, $52,793,224 — approved.

Vote 16: information services, $233,196 — approved.

Vote 17: Milk Board, $239,987 — approved.

Vote 18: Provincial Agricultural Land Commission, $1,170,317 — approved.

Vote 19: building occupancy charges, $3,078,000 — approved.

Vote 20: computer and consulting charges, $408,400 — approved.

ESTIMATES: MINISTRY OF FORESTS

On vote 103: minister's office program, $123,272.

[ Page 2665 ]

HON. MR. WATERLAND: I have a few brief comments to make before we get into the very interesting discussion on our forest management work in British Columbia. I think we're all aware of the fact that during this year the Forests ministry has done a rather complete analysis of the state of the forest and range resource in British Columbia. This report was presented to the Legislature on March 14, I believe, and I'm sure the members have had a chance to review it. It's the first time in the history of forest management in British Columbia that this complete an analysis of the state of the forest and range resource has been carried out and presented to the Legislature, as is now required by legislation passed by this Legislature in 1978.

[Mr. Hyndman in the chair.]

I have a few comments on the procedure used to develop this information. First of all, each region of the Forests ministry's organization, of which there are six, did their analyses within their regions by further breaking down their regions into districts. Many factors in addition to those factors directly relating to the forest and range resource, of course, had to be considered: what effect our analyses and our perceptions within our ministry of the forest resource that exists and what effect it would have on other resource uses, on the population, on communities.... We had to study the climate of the areas; we had to break the areas down into biogeoclimatic zones, land areas by elevation and, as I mentioned, by soil type, do a complete physiography of the areas; we had to assess the timber land base in terms of forest cover, description of the growing stock which we had in the form of timber, and our ranges, as far as forage for livestock is concerned; we had to assess the level of denuded areas, the regeneration and the areas not satisfactorily restocked; we also, of course, had to consider the industrial requirements of areas — the wood-use projections for the areas.

All these area analyses were then worked into area programs, as was presented in our five-year program, and again each area developed what they thought was a most realistic and manageable program for five years for their particular region for protection for silviculture, range and recreation and how other uses such as agriculture, mining, hydroelectric development, parks, fish and wildlife, land and housing, highway construction, and so on, would affect the use of the forest and range resource. And then we had to develop options for the management and use of this timber.

All this information from the regions was then taken to Victoria for a summary and an overall analysis on a provincial basis. Now this summary, which is the large volume you received, is but a summary of this type of work done in each region, and even it is condensed somewhat. Information by region is available in our ministry offices for anyone who cares to go into more detail than is presented in this report. The same was done for three resource management areas. They are: range, recreation and forests. As a result of this tremendously large job, we have come up with the first ever analysis of the forest and range resource. The next one is due in five years' time. The act presently requires that this be done every ten years thereafter.

Judging from the information which we received from this report, I would perhaps at some later time suggest that we do it at more than ten-year intervals. I think five-year intervals would be more appropriate and keep us much more on top of the changing forest scene as the years go by.

But in any event, each year we must present a five-year management program, a summary of which was presented to the Legislature at the same time the analysis was presented. We have indicated in the analysis that through the various programs, through the special fund passed by the Legislature, through my budget and through offsets to stumpage, we'll be spending in the order of $1.5 billion in the next five-year period. These dollars that we estimate, I would emphasize again because I think this point was missed by many, are 1980 dollars. In other words, the program is based on constant dollars. If inflation has an effect, and I'm sure it will for the next year or two at least, our program will be adjusted yearly to account for the inflationary changes.

There are those who say that it's not enough money. Perhaps it isn't, but in the judgement of the professional staff within the Ministry of Forests. and after consultation with other ministries, and in the judgment of the government, this is the optimum level of spending that can be effectively managed. As I mentioned on debate of the fund bill, yes, we could spend perhaps $100 million more this year, but it would not be wisely spent and we would perhaps waste a great deal of it. In fact, trying to push expenditures at that level could have the effect of degrading the forest stands.

We have a lot to learn about the various forest areas of British Columbia and how they react to the various silvicultural treatments we will be using. Until we learn more about them, we cannot proceed at a faster rate. Also, of course. It takes time and training to make sure that people in this type of work can work effectively and, in fact, will upgrade the stands rather than degrading them.

This was the major thrust of the work by the ministry this year. I would like at this time to pay a personal tribute to all those in the Forests ministry who devoted many, many hours, above and beyond the normal calls of their jobs, in a work of love, really, because they do respect and appreciate the resource they have to work with. They did an excellent job and as a staff should be congratulate for that.

At the same time as this work was going on, the ministry was implementing many other aspects of the legislation passed two years ago. One of these was developing and implementing the regulations to put into operation the resource legislation we passed.

A very time-consuming and at times disrupting thing that we have done, which nevertheless was quite necessary, has been in the reorganization of the ministry. Our objective, which now has the organizational structure pretty well in place, is to have the decision-making at the closest possible level of management to the field operations. A great deal more responsibility is being placed upon our district managers, of which there will be some 46 in the province. A great deal more authority to commensurate that responsibility is being extended to them as well. And as this type of authority and responsibility is extended further and further to the field, we, of course, have in place a formal appeal procedure for looking after people who perhaps feel aggrieved by local decisions.

We have had some uncertainty in people in the ministry, because as we developed the final organizational structure and people were waiting to find out where they fitted in to the structure, rumours began to run throughout the ministry. We have done as good a job, I believe, as was possible in keeping in touch with people in the ministry to make sure that they

[ Page 2666 ]

know where we're going. Towards the end, as the final crunch came, some short-term disruptions for staff did take place. That has now been resolved. Practically everyone in the ministry knows where they'll be working and what their job will be. Now they are very anxious to get on with the job because I think they respect the fact that now, for the first time, they have a good comprehensive program in front of them. They know where they're going. They have been provided with the budgeting and funding for that program, and acceptance of a five-year funding program by the government. Also, the ministry reorganization is in place to help them better fulfill the obligations under the Forest Act.

Of other programs we have underway this year, one is a small business program. I remember a discussion last year when the member for Shuswap-Revelstoke (Mr. King) was asking how quickly we could get it going. I told him then as quickly as we possibly could, and we did. We started on a smaller scale. It has developed rather quickly. As a result of the rather fast implementation we have had some problems with the program, some abuses that we are trying to iron out. I guess whenever you have a new program there are people who try to take advantage of it. It is beginning to work a little better. It is very well received by the vast majority of people for whom it is designed — that is, the small business sector. So far we have actually issued a total of 152 sales under the program and as of the end of March we had another 720-some still pending. The program does require more work to make it work smoothly. I think we're well on the way. After we work out some of the anomalies that exist I'm sure that it will be a well-received program.

This has been the main thrust of our work this year. As we are quite aware now, the forest lumber manufacturing sector is in a rather serious downturn, only a slump, I hope. Recent indications are that it has bottomed. We have indications of a bit of a recovery. We're not yet certain whether this is a trend or just an anomaly because it's been quite recent. This has caused the layoff of quite a number of people in the industry. But I think the industry, by and large, has managed these layoffs in quite a sensitive manner. They've spread layoffs, when they're necessary, over as broad a number of personnel as possible, with staggered layoffs so that plant closures don't occur. They've worked their normal maintenance shutdowns in. More have recently been announced and perhaps more will be announced, but as more people are being laid off, others are going back to work. I really think that we've seen the worst and recovery is in sight, especially with the recent reductions in interest rates in both the United States and Canada, which I think is a good indicator. A number of futures are showing some life. As I mentioned, current prices have shown this little blip in the immediate term. We hope it's the beginning of a trend.

During the debate on Bill 6, the Forest and Range Resource Fund Act, the members asked: "Where are you going to spend this money? Specifically, what programs and projects is it going into?" Just as the analysis was developed from the field levels, condensed and finalized in Victoria, so the actual management projects are being managed in that way. I have an outline here which I think would be a little too detailed and complex to discuss in the Legislature. If members have specific questions I could perhaps help them. But this is available, through my office, to anybody who wants to get into detail. But perhaps the best way, if you're interested in your specific areas, is to deal with your regional manager, who will know what specific projects in the way of stand-tending work, planting, and so on are being undertaken. I don't know, myself, as the minister, about each and every project which will be undertaken this year. I know that we are spreading the money among the regions. The decision as to where it is spent has to be a combination of where the forest needs the work, where the return from the forest response will be the greatest and also those areas in which we have the most serious timber supply problem. That information is available, either through my office, through our headquarters office in Victoria, or through the regions.

I have just one other comment, and that is on reforestation. I wish that members on both sides of the House and the general public would stop equating reforestation with forest management. Reforestation is a very important part of forest management, but it's just a part, something which has been progressing since the 1960s when the government of the day had an objective of being able to produce 75 million seedlings per year by 1975. Work was begun at that time in establishing the Forest Service nurseries with that objective in mind. It carried on through the New Democratic Party term of office and again when I became the minister. The objective was, by and large, reached. Our nursery capacity, right now, is 100 million seedlings, although that is pushing the capacity. It's not a comfortable 100 million seedling capacity, although that's the number of seedlings we have. In order to maintain that capacity, with over-capacity needed to account for losses which are inevitable due to weather conditions and other factors beyond our control, we must have a larger capacity.

As you know by the program, our objective is, by the end of this first five-year program period, to have a nursery capacity of 135 million seedlings in the province, with a production of at least 117 million, to give us a seedling excess capacity of some 18 million. In good years we could produce 135 million. In order to ensure 117 million we have to have that overcapacity. The Forest Service capacity will be levelled off at about 100 million seedlings as we expand our nurseries to be able to have a comfortable 100 million seedlings, and the balance, we hope, will be done in the private sector. Already we have commitments by several operators in the private sector, both industrial and commercial nurseries, to enter into seedling production. It's been received very enthusiastically, and a great deal of planning has been done. I understand that, even now, that physical work on nursery site preparation has been carried out.

That is the general thrust of what the ministry has been doing this year. I hope that we can have some rational discussion on the program, on the analysis. There are many questions that I know the members opposite would like to ask. If I don't have the answers myself, I have two of my staff here who could perhaps help us if we want to go into a great deal of technical detail. We are managing and running the Forest Service in as open a manner as we possibly can. Our staff are always available, ready and willing to provide any information of a public nature that any members wish to have.

So with that, Mr. Chairman, I would welcome discussion from the members opposite.

MR. KING: I want to thank the minister for his remarks and thank him for his offer of cooperation in making more information available to the Legislature, with respect to the very detailed five-year inventory that is being provided by the ministry this year. Yes, there are a lot of questions that I

[ Page 2667 ]

and presumably other members will have. It's good to know that the minister will approach the dialogue with a spirit of cooperation in making as much information as possible available to the public through the Legislature.

I wish I could share the minister's optimism about the fine shape of the morale in the forest industry, and the fact that everybody's all happy and gung ho about the new direction in the ministry, the reorganization and so on. I would suggest that the reality of events in the last couple of days would seem to refute that proposition by the minister.

We had the unprecedented events of the forest staff in the various regions of the province walking off the job and staging what I think was a two-day protest strike against the alleged unfairness of the ministry's reorganization plan. I know that's not the most burning issue in terms of forest policy in the province of British Columbia at the moment, but it's pretty fundamental to the success of the initiatives which the minister has outlined. Obviously, unless we have a ministry composed of staff who feel that there is fair play and who feel that their roles and their capabilities are appreciated, that will indeed detract from the ability of the ministry and its human resources to adequately administer the policies which the minister hopes to embark on.

Perhaps, first of all, since the minister raised that, we could spend just a little time talking about it, and my perceptions of it as I understand it from the outside, admittedly, but nevertheless with some opportunity to discuss the ministry reorganization with the people involved in the various field offices of the ministry, with the ministry staff and, to some extent, with the minister from time to time, as well as with the regional municipalities affected by the reorganization.

First of all, I want to say that I rather regret the fact that the minister failed to live up to a commitment he gave to this Legislature two years ago when I questioned him at that time regarding the proposed phasing-out of various field offices of the ministry. I asked him for an assurance that when he was contemplating this cutting down or the phasing-out of field offices from the Ministry of Forests, he would provide lead time to the municipality in which the office was located, so that regional councils and representatives of the municipality, as well as the ministry staff, would have an opportunity to discuss the wisdom of the move and to discuss its economic impact on that particular area of the province.

The minister gave that commitment, and it's recorded appropriately in Hansard. He said: "Yes, and I will consult with the local MLA for the area. " That commitment has not been followed through. There has been a phasing out of various field offices and the minister has not consulted with the MLA before the fact. The minister, in my view, has not provided lead-time consultation to the municipalities involved either. They have been notified after the decision was made. I don't want to recite once again the importance of some of the field staff offices with their eight or ten personnel as a factor in supporting the narrow balance of local economies for small villages and towns. I think we've gone over that in the past. Nevertheless, it was a commitment the minister made and I regret that he has neglected to follow through on that commitment. I choose to think it was by neglect rather than design. I think the minister must have forgotten. Nevertheless, in my view it's not the kind of performance one should be able to expect from a minister of the Crown.

I think the more important thing is that the new reorganization, as I understand it, has deprived certain ministry staff in the field offices of an opportunity to compete for the new positions designated under the new scheme of things in the Ministry. In other words, unless you are a registered professional forester you do not have the opportunity for the upward mobility within the ranks of the ministry that used to be available. People serving in the ministry who may have 10, 15 or even 20 years' practical experience in terms of appraisals, cruising and the stumpage area are now out in the wilderness in terms of any opportunity for upward mobility within those specific components of the ministry, because under the new scheme of things one has to be a registered professional with those letters behind his name before he can compete for the position. That is what I am advised. Indeed, Mr. Chairman, I am advised that in at least one regional district of the ministry advertisements have been placed in newspapers outside of the province of British Columbia and university graduates from other provinces have been invited to compete for positions in the ministry which have not been available for competition to existing employees of the ministry. The regional manager has been able to accomplish this under his own resources without a proper competition for the position.

These are the main complaints I have received regarding the reorganization of the ministry. I trust that there must be a problem there somewhere. I trust that there must be a feeling of inequity. Otherwise ministry staff and employees would not at this point in time take the very unusual and drastic action of conducting a two-day strike in protest against the ministry's policies on reorganization.

I hope that the minister will try to shed some light on this particular problem. I don't think it's good enough to get up and say that the employees are all wrong, that they misunderstand the intention and the policy of the department. Some of those people have been in the ministry for many years, and I don't think you could provoke them to the point where they conduct a two-day strike unless they have some real grounds for concern and objection. I would appreciate it very much if the minister would shed some light on this particular subject before we go on to other areas that are perhaps more important to the people of British Columbia in terms of the broad issue of forestry. Nevertheless, unless we have a competent ministry with high morale and dedicated to the principles that the minister has outlined, then I question the strength of that ministry in adequately monitoring, regulating and enforcing the very principles that the minister has tried to articulate here this afternoon.

HON. MR. WATERLAND: With regard to ministry morale and the recent two-day work stoppage, we as a ministry have been dealing on a continuing basis with people within the ministry. As a matter of fact, when reorganization planning began, we received recommendations from our field professional staff and non-professional staff, and as the member probably remembers we had outside management consultants assist us, and then of course our own executive in Victoria. All of this form of input was used to develop the organizational structure, and as the actual final structure was being developed, there was constant dialogue back and forth. If we have a failing it is because that type of dialogue back and forth quite often starts rumours, and rumours have to be doused and corrected. So that caused some concern among our staff.

This work stoppage that took place.... Those things which we have the authority to negotiate, to make final

[ Page 2668 ]

decisions on, were resolved with some very serious discussion and negotiation between our personnel people and our personnel — resolved, by and large, to the general satisfaction of both sides.

There are a few issues which are not specifically related to my ministry and which are government-wide — such as early retirement — that some people may feel desirable in reorganization; severance pay if they decide to leave, moving expenses or relocation expenses, a few things like this which had to be negotiated on a government-wide basis. As a result, they had to negotiate on these matters with the Government Employee Relations Bureau, and it was during these negotiations that we got hung up, because we were the ministry trying to resolve them; the job action was taken against us.

Yesterday or the day before yesterday these outstanding matters were resolved, as GERB continued discussions with the employees. So I don't believe there is dissatisfaction, although in any reorganization there are going to be certain individuals who don't agree and who perhaps think they're not well treated. But by and large — and we keep in pretty close touch with our field people — there is general acceptance and a great deal of enthusiasm, Mr. Member, for the types of things they see here.

On consultation with local governments, with members of the Legislature, I believe about a year ago I sent a letter to all MLAs inviting them, if they felt any concerns, to meet with our field people, our regional managers who make a recommendation as to where various people should be located. I don't know if any members opposite took advantage of this; I'm sure they did. I know members on our side have. I have had some problems within my constituency, so I am sure the member will read me some headlines about where local government didn't agree with the decision that I finally had to make on the location of the district office. When it deals with my constituency it's an even more difficult problem, because I am the MLA and I'm also the minister making the decision, but in a case like that I have to make the decisions in the best interest of the ministry, of personnel, the effect on the ministry and the efficiency with which we can function, and that's what's happened throughout the province.

We have met with local governments. We have not closed any locations yet. We are still discussing with governments which object, and if there is going to be a reduction in the staffing level — especially in small towns — local governments will object. But I think our responsibility is primarily toward the effective and efficient operation of the ministry. No forest centre in British Columbia, I think, will forever be in one place, because the forest scene changes, the things we're involved in change, and our people will always have to be mobile to a certain extent.

The problem the member brings up between registered professionals and non-professionals — there are perhaps within the ministry about 300 positions which require professional registration. These are by and large specialized areas such as research officers, and they require not only professional registration but very specialized professional expertise. These are primarily staff people. Most of the field jobs where career development takes place are open to both. There were two that until a few weeks ago did have some restrictions, and these were the silviculture resource officers and the timber resource officers. On further discussion with my staff we've decided that really these jobs require as much in the form of operational ability as in technical expertise, because we do have these other backup professionals in the ministry. So these two critical areas were opened up to open competition. The objective is to get the best possible person in these jobs, whether he's professionally registered or not. I think that's the way it should be. So that's one area of discontent.

Quite frankly, Mr. Member, I feel we're in the right area, because I'm getting just as many complaints from the professionals as I am from the non-professionals, so it seems to be fairly well balanced. The professionals, of course, think many more jobs should be closed to other than themselves; the technicians feel there should be no restrictions. But I think we've struck a pretty good balance and it will be to the benefit of the ministry.

As far as competition, any job in the Forests ministry is open competition. Our first priority and preference is given to people within the Forests ministry, The next level is from the province of British Columbia, and then from Canada or abroad.

There are some jobs which are highly specialized, where we may actually seek, either on a consulting basis or an individual perhaps even from a foreign country, because he has some special research or technical expertise which we need very badly.... We may even write to people and say, "We would like you to work for us, " either on a consulting basis, or on a term basis, or in some cases permanently when there is a specialized job which somebody has very special expertise for, but very, very seldom. By and large our competitions are open and, as I say, our order of preference is in-service, provincial, and out of province. I think that covers the areas outlined by the member.

MR. KING: Mr. Chairman, I appreciate the minister's response. I would just point out to him that the terms and conditions of early retirement and so on for employees of the ministry adversely affected by the ministry reorganization are a proper matter of control and concern to the ministry. It's not good enough to divest yourself of that responsibility by saying that it resides with GERB or the agency responsible for dealing in total and in general with the public service. There are ample examples, Mr. Minister, where other agencies of the government have negotiated special terms with respect to those adversely affected by reorganization; BCBC is one. I think the Minister of Transportation and Highways (Hon. Mr. Fraser) could fill you in on whether his ministry held the responsibility for negotiating special provisions for those adversely affected and whether he recommended it to GERB and had them accept it or not. But he accepted the basic responsibility for those special conditions. There's no reason on earth why your ministry could not have done the same thing, rather than stickhandling it aside to GERB. They're your employees, Mr. Minister. You're the person who instituted the reorganization. So I don't think it's good enough to sidestep responsibility in that regard.

However, be that as it may, I'm sure that the staff all around the province will be receiving copies of Hansard and having a close look at this exchange and monitoring it for exactitude in terms of the responses you give. So we'll see what happens.

I want to congratulate the ministry on the preparation of the five-year range resource analysis. It's a very complex but very competent document. I've had the opportunity to make some remarks about it previously. It's a very good piece of work in terms of pulling together technical data. That was

[ Page 2669 ]

overdue in the province. I think there are many things omitted from the report, though, that provoke a great number of questions. Perhaps it produced more questions than it answered. What it did do, of course, was for the first time acknowledge that in certain specific regions of the province particularly we are facing a very serious shortage of timber. In this respect it's very useful. In respect of the allocation of funds for intensive forest management, it's a very, very vague document. In terms of how and where the money is going to be spent, in terms of what kind of auditing procedures might be available to monitor the expenditure of these public funds to determine whether reasonable value is being returned to the public for the investment of these funds — it is in those areas that I have quite a variety of questions.

[Mr. Strachan in the chair.]

For instance, "in those areas where future timber supply assessments indicate appropriate conditions, additional commitments can be made." Well, I'd like clarification of that point. How is this going to be done? Is it going to be done strictly at the regional level? If so, how is the ministry going to monitor the program? How are you going to determine whether value for this money is being realized, whether the cost-benefit, if you will, justifies that kind of investment in site-specific areas? There's nothing of that nature in the report, It simply says that we're way behind, we need a much larger investment. Of course, that's kind of motherhood, because everyone associated with the forest industry — indeed, most of the public — is aware that we are in fact way behind and there has to be a much greater investment if we are to preserve anything of a vestige of sustained yield in the province that will support our current level of economic activity. But it's not good enough to throw money at it. I think the public — and, I believe, this Legislature — has the right to understand precisely what the initiatives are that the ministry wishes to take. Where are the areas you are going to apply this intensive forest management? What are the steps that are going to be taken to monitor the administration of these site-specific areas?

The five-year plan indicates that within the next five years $448.1 million will be expended in stumpage offsets. Little, if any, information is given as to how these funds are to be used and specifically by whom, other than the forest industry as a whole. What kind of mechanism does the ministry have to monitor these offset claims by the private sector, to ensure that the public is receiving fair value for the offset claims which those private industries are making?

I'm probably more concerned in this area, in light of a variety of recent things.... Basically, the ministry has been telling us, up until the release of this report, that there's really no problem. We have lots of timber and the sustained yield concept is firmly in place. Everything's hunky-dory. The professionals in the industry and the ministry know what they're doing. All of a sudden, boom, out comes this report and we see we have major problems. Perhaps those professionals, over the years, haven't really been levelling with the public, or at least they've been misreading the state and the health of the industry. If that's the case, I have some reason to be concerned that we're now going to embark on a program to recapture our viability as a forest industry and to bring up the intensive forest management approach to the extent that we can rely on having enough fibre in the future. I think we have a right to believe that we have a ministry that is competent to monitor the expenditure and application of all these public funds that are going to be thrown at the problem.

Recently there have been all kinds of reports of the increasing concentration of control in the forest industry by, basically, the major companies. Is there a ratio of any kind, as between the large integrated firms and the small operators, the small quarter-holders and so on, as to what will be accepted in offset costs?

I have a great many questions in this area, and perhaps, before I get too deeply into it and list a whole variety of questions, I should give the minister a chance to respond to my initial concern, which is basically: how are you going to control all this expenditure" The public is being asked to allocate this money for intensive forest management. Do you not think, Mr. Minister, that they have a right to know, in some precise terms, how it's going to be spent, and what areas it's going to be spent on. and how it's going to be monitored to ensure that there's some kind of cost-benefit analysis applied along with the expenditure of that money? That is the basic question.

HON. MR. WATERLAND: The member went over quite a few areas — first of all, basically, I guess, control of expenditures — and he was referring to the offsets, I guess, under section 88, which provide large expenditures over the next five-year period.

Let me advise the member that companies cannot go out, do work, sell and then come and collect funds for it. Any silvicultural project to be carried out by a company from which it expects to get credit under section 88 must first be thoroughly assessed by our staff to make sure that the project is worthwhile and will provide a benefit. It requires prior approval of the ministry. As the work is carried out, it is assessed and checked by our staff. When it's completed there is an assessment of it. Before payment is made, we do have our very strict government-wide financial control — and our ministry's comptroller. We have a comptroller-general, who, I am sure, is just as interested in expenditures provided under section 88 offset as she is on expenditures voted in individual budgets.

So it's not as if we had a free hand to run around and sprinkle this money all over the province; it's very strictly controlled. We provide not only for financial audits, but there are technical audits and checks of what's going in the field as well, to make sure that the work is happening. And before it can happen it must be approved, in any event, by us, because we have to budget those expenditures. I believe in this current fiscal year we have budgeted $84 million for offsets under section 88. So the same type of financial control is exercised there as in other areas of government expenditure. In fact, I think with the zeal of our field staff, we're going to probably have even tighter financial control and be surer of a return for our investment than, perhaps, any other area of government.

The member said, I believe, something to the effect that things seemed to be going along well, and then all of a sudden up jumped this report, and we perceived problems. What this report has done is focus upon problems and opportunities that we have, as a government and a ministry, in our forests. It's given us very valuable lead time. By assessing it, we're planning and projecting our timber flows ahead, deciding what must be down now in order to assure that we don't have this large falldown in timber supply in the future. And we won’t.

[ Page 2670 ]

There are many people who, I'm sure, consider sustained yield as something that says we shall have a uniform, even flow of timber for ever and ever. That's not what sustained yield means at all, and it never has. Anyone who understands forestry at all knows that sustained yield does not mean even flow. Many factors are constantly changing in the forest land base in British Columbia. The yield of timber per acre from a new-growth stand at a rotation of anywhere from 40 to perhaps 120 years will be much, much less than the yield per acre from the old-growth forest, which took perhaps 500 years to accumulate. Every forester and every person in the industry knows that this natural falldown effect will take place when we start making the transition from old-growth liquidation to second-growth management.

We have a constant erosion of the forest land base in British Columbia, which is of concern to me and, I'm sure, other members here. We must protect our forest land base, especially the better sites, because it's on the better growing sites that we grow a very large portion of our timber supply.

These things, the loss of the land base and the natural falldown effect, can be largely.... More optimistic foresters say that it can be more than offset by more intensive management. Some of the others say that perhaps you will have a falldown effect. We don't know who is absolutely right at this point. We can say that any future reduction in cut will be minimal. If we combine the increased growth possible through more intensive management with increased standards of utilization and increased species utilization, I'm sure that all of the future natural falldowns can be offset by these means.

So nothing has suddenly jumped up. I think it's a tremendous opportunity to be able to focus on the overall provincial problem and focus on it within specific areas. We have the lead time needed to offset future supply problems. There are areas in the province where we still have uncommitted timber. There are areas in the province where, by utilizing species that we're not now using, we can increase our cut. I'm sure that as our industry continues to mature and as we, as a government, continue to encourage the utilization of all species and get better utilization within the mills as well, our forest industry and our forest resource will continue to play at least as important a part in our economy as it does now. I'm sure there are many areas for growth opportunity in the future.

So the member can rest assured that there will be very strict financial control and very strict technical auditing of what happens in the forest, and as we learn more about the forest we'll be in a better position to refine and make better decisions on exactly where the money should be spent. That is why I don't think we can rush into it any more quickly than we are.

I believe the member also understands that section 10 of the Ministry of Forests Act requires that a program of evaluation of the effects of these programs must be done by the ministry and reported to the Legislature, which will be a part of next year's program presentation. Our strategic studies branch is already involved in that.

MR. KING: I thank the minister for his response. I wonder what the criteria will be in terms of a situation where a private firm undertakes to reclaim a site that perhaps has been taken over to some extent by weeds and so on, and they propose to reclaim that site for forest production like the site preparation program of replanting. How would you apply their claim for an offset in the first year for the expenditure of a million dollars on a site of that nature? Would your assessment include any appraisal of the success ratio of the seedling planting? Or would you not wait a couple of years to see whether the project was successful? Would you allow that million-dollar write-off in the first year?

The minister says everything is going to be nice. We're going to watch it very closely. He really doesn't tell me very much about specifically how they are going to monitor it. I thought it was just slightly ironic, Mr. Chairman, that the minister based some assurances on the auditor-general's appraisal. I just happen to have with me the auditor-general's report for the years 1978 and 1979. The only reference I find to the Ministry of Forests is not particularly flattering, Mr. Minister. I'll read it for you just to refresh your memory. In the 1978 report, at page 30, section 8(c)(ix):

"Timber royalties and stumpage grazing fees. These accounts receivable represent unpaid billings as of March 31, 1978. My staff has estimated that an amount of $43 million could reasonably have been added to this receivable representing timber scalings made in March 1978 and prior months which had not been billed as of March 31, 1978. Had billings been made on a current basis, it is estimated that $26 million of the above amount would probably have been collected and included as revenue for the 1978 fiscal year. Further details in this regard appear in section 10 of this report."

At section 10 it simply says:

"My examination included a review of the systems of internal control over the collection and recording of major provincial revenues. In the course of this review, it came to my attention that abnormal delays had occurred in the billing of timber royalties and stumpage fees. These delays were attributed to problems encountered with a new computerized billing system of the Ministry of Forests. As a result, an estimated $26 million of revenue which otherwise would have been collected in the 1978 fiscal year was collected and recorded as revenue in the following fiscal year."

Well, maybe we could expect the ministry to do a better job in the subsequent year, after that fairly serious indictment by the auditor-general of the province. What do we find in 1979?

HON. MR. PHILLIPS: Why don't you sit in on Public Accounts? That's all been rehashed there.

MR. KING: Mr. Chairman, if the minister of small things wishes to get involved in the Forests debate, he's quite welcome to get up and talk about it when I'm finished my remarks.

Interjection.

MR. CHAIRMAN: Hon. minister, the member for Shuswap-Revelstoke does have the floor.

MR. KING: We have reference to the Forests ministry on page 15 of the current report of the auditor-general. It comments on the Ministry of Industry and Small Business Development too; it points out the incompetent financial controls in that ministry as well, but I won't comment on those at

[ Page 2671 ]

the moment. We'll deal with forestry. Taxes and other accounts receivable, section 5.10:

"Timber royalty and stumpage and grazing fees. The account balance of $88,288,320... represents unpaid billings as at 31 March, 1979. We estimate that an additional $118 million, representing timber scalings made prior to 31 March, 1979, had not been billed as at that date. We also estimate that, had billings been kept current, $45 million of the unbilled amount could have been collected and included in 1979 revenue. The matter is reported on further in paragraphs 7.26 and 7.27 of this report."

At that point in the auditor-general's report — I'll just read it briefly — it says: "Unbilled fees as at 31 March, 1979, were estimated at $118 million." I trust the ministry will recover that revenue eventually. But what it points out is that the ministry is not in a very strong position in terms of current cost controls. If they cannot protect the public interest by current billings for stumpage due, and cannot ensure that that is in the current fiscal year as revenue to the Crown to be utilized for other programs as well as forestry, then I have to worry a little bit about the minister's assurance: "Oh, we're going to monitor these large tax write-offs in any current way and ensure that the public is receiving value for these write-off claims." Are they going to be a year at a time or on a five-year basis? How are you going to monitor it? I'd appreciate some more details.

HON. MR. WATERLAND: The member identified a problem and presented, perhaps, a partial reason for it. He mentioned the fact that we were getting into a new computerized billing system, which is not an excuse but is a partial reason for some of these unbilled accounts.

MR. KING: That was 1978.

HON. MR. WATERLAND: In 1978, yes. We didn't resolve those problems throughout that year and it went up from 1978 to some $88 million, I believe, by March 1979. I think we have most of our computer problems sorted out and we've made some changes in operation methods within our ministry to help eliminate these unbilled accounts. As of February of this year they've been brought down to a total of $13 million. When you consider the number of billings carried out by the ministry last year — I believe our revenue was $550 million — then $13 million is getting to a more acceptable level. I don't know if we can ever completely eliminate the unbilled accounts. I guess we could if we wanted to be completely ruthless. But many times problems developed in an area where we have approved the cutting permit and for some reason it becomes necessary to move the cutting permit. It may be a fire, problems with other ministries or public concerns. It may be necessary to move a permit, and rather than force an operator to shut down and to lay off his employees, we'll say: "All right, you can start cutting now. As you're cutting, we'll try to determine what your proper stumpage charge should be." That's when we get into unbilled accounts.

However, I think that's in relatively good shape now. It came down from $88 million in 1979 and by February of this year it was $13 million. We can perhaps get it down lower than that. I don't think, in realistic terms, that amount will ever be zero. But I think we've done a good job in responding to the auditor-general, and I think the auditor-general perhaps, after discussion with our comptroller and our financial control people, now better understands some of the complexities of dealing in a province of this size with a resource as varied as forestry is and with conditions as varied as they are. So, that, I think, covers those comments by the member.

MR. KING: The only thing the minister never commented on was the proposition of what criteria he is going to apply to the write-offs claimed by the private sector for intensive forest management. What criteria are there for that?

HON. MR. WATERLAND: The member, I think, probably received a copy of our incentives White Paper. We're still trying to finalize our policy in that regard. Whether or not incentives in the way of additional cuts, should silvicultural work lead to a faster-growing forest and a larger allowable cut.... But on the basis of approving expenditures, we have to approve an expenditure for the treatment of an area before it happens. Money is expended which has been approved in advance by us and will be paid upon completion of the work. If that leads to increased cut as long as.... At the present time if the Forest Service does it directly or if the licensee claims a refund for it. that increased cut is in the hands of the ministry to dispose of it. We're trying to develop in this White Paper approach a combination of incentives, perhaps a partial offset of the cost and a partial increase in cut if it develops from that silvicultural work.

But we haven't yet resolved that problem. We've had a large number of reports back to us. There's no real consensus coming. nothing about which we can say: "It's all black; it's all white: we can do this. I think we have to come up with a bit of a compromise. I believe that paper or those final recommendations will be forthcoming within a month or two. But I can't advise the member yet because we haven't made a final decision as to what part of that cut will be used as an incentive. If the incentive will lead to better, and more, silvicultural work, I think it's in our best interest to have an incentive. I'm not sure that's the case yet.

Our forests, as I've mentioned many times, are terribly complex. The response is different in different areas. The member asked the hypothetical question: what about the reclamation of a brushed-in site? At the present time — if it were to be done in the private sector as an offset — what we would do is assess the area with the licensee. We would have to assure ourselves that there is a benefit in doing that. It may be not be strictly an economist's cost-benefit ratio type of a study because there are other things that have to be considered, but we would assure ourselves in the overall benefit received, in terms of commercial timber, habitat enhancement, stream protection and whatever these factors are, that there's a benefit to us. We would settle on a price with them. They would do the work, and once the work is done to acceptable standards the cost of doing it would be offset against their stumpage.

MR. KING: Mr. Chairman, I do have some philosophical problems with this tax write-off system. Nevertheless, I appreciate the minister's answer. To the question of whether it's a reasonable proposal from a cost-benefit point of view, I didn't intend to imply that you measure this on the normal economic guideline. I can appreciate that in that kind of equation the long-term public interest and the long-term potential is at work. Nevertheless, I do feel that there has to

[ Page 2672 ]

be some kind of cost accounting system, some kind of audit control over the expenditures of these public moneys to make sure that it is a reasonable value in return to the province.

I have some notes here, and perhaps I'll just read from them for a moment to try to make the point a little more cogently than I have thus far. In the report, the goals are set out on page 4 of the five-year program. The only one requiring comment, really, is the stated goal: "to produce timber in a cost-effective manner in order to encourage a vigorous, efficient and world-competitive forest industry." The goals as stated are acceptable. The basic issue is whether the program proposed will, in fact, produce timber in a costeffective manner. To resolve this question, there is a real need for considerably more information than is presently available in the report. One needs to know the survival rates per plantation by forest types and sites for each region in timber supply region, the cost per surviving seedling and the projected growth rates. All of those things, if they were available to the public — these kinds of projections on what kind of return the ministry expects — I think, would go a long way to assuring the public that this is a valid investment in the future. None of those specifics are available in the report. It simply identifies the deficiencies and then says we're going to spend a lot of money to correct them. We want some assurance that, indeed, the expenditure of this money is going to produce reasonably the desired results. There seems to be a vagueness. There seems to be an absence of those kinds of specifics around the report, even though the details of the general report are very good.

The submission dealing with the five-year program really is less satisfactory than the technical report. We're asked to accept on trust the development of a multimillion dollar program without being given access to the reasons for the choices and priorities. This is the problem we have with it. The dollar figures proposed do not represent a substantial increase in the funds available to the ministry, but with the problems presently being experienced as a result of their recent reorganization, it is doubtful if the ministry has the capacity to handle a larger program. Indeed, the one presented will strain the resources of the ministry to the very utmost.

The technical report is, for the most part, a factual account of the ministry's program. It does, however, contain some interesting contradictions, too. For instance, on page 65 it states: "The Forest Act allows the authority of the chief forester to designate, develop and maintain recreational sites and trails." However, the new organization, depicted on pages 120 and 121, clearly indicate that the chief forester has no responsibility for recreation. Perhaps the minister would like to clarify that apparent ambiguity — that apparent contradiction.

This is reinforced in the program description under "recreation" as set forth on pages 150 and 151. However, Mr. Chairman, the real issues are to be found on page 174, contained in the following sentence — and I hope the minister is listening: "The research program is directed towards obtaining information required by intensive forestry operations. Without this data base there is little assurance that moneys spent on various forestry practices will yield benefits in excess of costs." In the report no hard evidence is presented that this, in fact, will not be the case.

That's the basic concern that I've been trying to outline to the minister. He's indicated that, yes, the staff will be monitoring the proposals that the private sector bring forward in terms of their plans for intensive forest management. He has indicated that prior approval will be necessary by the ministry. But the case I'm trying to make, and shed some concern on, is that the ministry is having a tough time keeping current with their stumpage revenue, as outlined by the reports of the auditor-general. The ministry has reorganization problems; witness the two-day work stoppage by ministry staff who felt they were unjustifiably treated in the reorganization. Now you're going to superimpose on your ministry a large new responsibility that really wasn't there before — the responsibility to monitor and control the claim for millions of dollars of tax write-offs by the private sector based on their involvement in- intensive forest management.

I can't help wondering, Mr. Minister, despite your assurances, that I am asked to accept on trust also.... In the absence of any proof, you know, I doubt the adequacy of the ministry to do an effective job of this kind of tight control of audit over these tax write-off claims that you're going to be getting in spades from the private sector as soon as the door is open. Pale assurances don't really satisfy me. I can understand why the constituents up in Yale-Lillooet are looking at the minister with a jaundiced eye these days. I am wondering who he is representing. Maybe they trust him. I hope they do. I trust his good intentions but I'm not sure I trust his competence, in light of the record, to do an adequate job in cost control on these write-off claims.

There are a couple of other areas. I mentioned some of the other conflicts in passing, like the approach to recreation. Maybe the minister would like to comment on that. There are a couple of other things I'd like to mention. I think the ministry should produce their detailed plans by regions, not rely on just MLAs to go to the various regions and say, "Look, I want to see your regional plans, your forest types and so on, your cost-benefit analysis for the various programs in this area." I think that should be a matter of public record. I think the ministry should be laying those before the Legislature. I think they should be available to the public. After all, the public is paying the shot, in large measure, for this investment in the forest industry. Be open about it and lay that material before the public so everyone can see.

I think I'll just let it go at that stage. There's not much point in my standing up here and saying, "I have concern about your ability to keep a tight handle on this whole new program, " and the minister standing up and assuring me that he has. That's a rhetorical exchange which accomplishes little. I've expressed the concern, and I want to say it's not just my concern. Naturally I have consulted with a great many people in this regard, some from the industry. That concern is a fairly broad one, so the minister shouldn't take it just as a political handle proffered by the opposition. That is a genuine concern that people in the industry, people of the public and certainly that we, politically, have too. But I guess that if he's satisfied that his ministry can do the job, that he's got a real handle on what's going on, in the final analysis we have nothing more to do than to accept that and hope that the record proves the minister correct rather than us in terms of the concerns we have.

I would hope that the minister would respond a bit further to some of the questions I raised.

HON. MR. WATERLAND: Very briefly, first of all, the member mentioned tax write-offs. Stumpage is not a tax. Stumpage is the price received by government for the sale of a Crown asset, i.e., timber. The member again mentioned a

[ Page 2673 ]

historical document, the auditor-general's report, which indicated a couple of years ago, and as recently as a year ago, that we had some problems with unbilled accounts. I will say again and emphasize that this is now within reasonably good levels, down to $13 million by February.

As to public involvement and disclosure of what we're doing to the public, I don't know how many MLAs have gone into our regional offices and our district offices since this information was produced, but I can tell them that a large number of the general public have, especially those involved directly in the forest industry or in areas affected by the industry and our management of forests. The public is taking advantage of our openness and willingness to discuss the plans. For example, in the development of our timber supply area analyses, one of the steps in it, before it's approved, once we have gathered all the technical data together and the ministry technical staff have developed what they think is a reasonable cut level for a timber supply area, considering all the other factors such as esthetics, water quality, fish and wildlife habitat, alienations expected for other uses, and agricultural impact.... Once all of these things are put together and we have decided, in the best judgment of the ministry, the level of cut that should be recommended, our next step is to go to the public — and we're doing this now. In Vancouver we had meetings on the coastal timber supply area; at the current time we're having meetings in the Okanagan, because our analysis is completed — and this input we get does effect what happens. So our objective is actually to make any and all information available to anyone who wishes it, and I think we're doing a relatively good job in that area.

MR. HANSON: Mr. Chairman, the rules of the House call for an intervening speaker after a certain period of time, and I'd like the Chair to recognize me as an intervening speaker. Later on in the debate I would like to ask the Minister of Forests how the series of Forests ministers from 1952 through to 1972 could not anticipate the fact that the overcutting was taking place. Anticipation should have been made that the cutting was in excess of the ability of the land to produce the wood. I'd like to talk to him about that at a later time.

I'd also like to talk about the proposed project to have scaling done by the private sector, which I think is something that is coming in the works. It is of great concern to me that the scaling for revenue would probably be done by the private sector, and then a cheque would just be sent to the government. I think scaling done internally by the provincial government is an important function of government as a check and a monitor of the industry. I'd like the minister to respond again on that matter at a later date.

I see that our debate leader is out of the House for a moment, so I'd just like to continue. In 1952, when Social Credit assumed power in British Columbia and the forest industry was the major industry in the province — as it is now — how was it that the cutting was projected into the future to exceed the ability of the land to produce the wood? Since becoming an MLA only a year ago, on two occasions I have taken tours — one by Crown Zellerbach and one by MacMillan Bloedel. The industry is very interested in seeing that we as opposition MLAs see exactly what the present situation is and the so-called falldown effect or shortfall or whatever the term is. On each occasion we went for three days to see the full operations of the pulp, of the wood supply and so on.

It is clear that you don't have to be a sort of geographical wizard to know that wood grows more slowly at higher elevations, that cutting wood at high elevations becomes more costly with road construction and so on, and that wood grows more slowly on slopes that aren't afforded the same exposure to light, the same kind of bioclimatic conditions that the minister referred to in his introductory remarks. At the same time we asked, as opposition MLAs concerned about our number one industry, how quickly reforestation was done in the past. We were given very candid answers, and the candid answers were that much land was left for years before it was actually cleared properly. I know burning was a major practice at the time: it's not so much of a practice now. Many, many acres — hundreds of thousands of acres — were not quickly planted. So the recovery time has been delayed by the inability of people to get quickly onto that landscape and to replant.

I raised a number of questions with the industry that I still would like answers for, and I'd be very pleased to have the minister attempt to answer them for me. We have, as I understand it, a plant succession whereby when forests are cut, various species come back — so-called weed species, alder and so on — on the lowlands or wetlands. What we have in a sense is so-called weed species that replenish the soil in nitrogen and other kinds of nutriments as they fall. Other more dominant species come in at a later date. Our forest industry is primarily based on harvesting of climax vegetation — hemlock and fir and spruce and so on.

I'd be very interested if the minister — or his deputy could advise the minister — could answer my question: what is the long-term implication of harvesting only a climax vegetation and supplementing nitrogen and nutriments by aerial spraying. I know it's very costly to deposit nitrogen by planes onto the surface of the landscape. My question is: what happens to the land in the long run when you deposit nitrogen by air, but you don't allow the alder and other weed species to fall down, deteriorate and supplement the soil? That is something I would like to know, because our industry is based on harvesting a climax forest. That means that we have in a sense a monoculture that is vulnerable in the sense that we may deplete the soil in the long run. I'm not an agrologist. I'm not a soil scientist. but I think it's something people should know.

I'm very interested in the carrying capacity of the land. I'm interested in how the Premier's party from 1952 to 1972 allowed our forests to deteriorate to the condition they presently are in.

Interjection.

MR. HANSON: The Premier says that he would prefer to go on to a different estimate, rather than listen to basic concerns.

Interjections.

MR. CHAIRMAN: Order, please. The second member for Victoria has the floor.

MR. HANSON: The member for Omineca (Mr. Kempf) feels that he is an expert in succession of plant communities and different bio-geoclimatic zones.

MR. KEMPF: How long did you work in the woods?

[ Page 2674 ]

MR. HANSON: I worked in a pulpmill. I know something.

MR. CHAIRMAN: Order, please. No personal comments in debate, hon. member. You still have the floor on vote 103.

Interjection.

MR. LOCKSTEAD: The member for Omineca should address the Chair.

MR. CHAIRMAN: Perhaps the member for Omineca and the member for Mackenzie would be reminded that when a member has the floor no one shall impede that member. The second member for Victoria does have the floor.

MR. HANSON: I am going to sit down in a moment, but I would just like to serve notice to the minister that I am very interested in the proposal. I don't know whether it is a formal proposal by the ministry to actually have scaling done where the calculation of revenue for the public treasury is presently done internally by people in the government — to have that done by the private sector so that the public will not have its own internal watchdog to safeguard the interests of the public. I would like to hear the minister's answers on that in due course.

MR. LOCKSTEAD: Mr. Chairman, I thought perhaps the minister would want to get up and answer those questions posed by the previous member; but I know that the minister is keeping track of all these questions. Before I start asking questions of the minister under this particular vote.... I will have a great number of questions over the next several weeks under the debate of these particular estimates relating to tenures, reforestation and a whole number of issues — the list will go on.

At this time I think I will confine myself to one topic. It is a topic that is very current in the industry. That is the matter of the plight of the small, independent loggers on the coast and in the interior of this province, but particularly on the coast. As the minister is aware, there are a large number of layoffs taking place in the independent sector of the logging industry. One of the factors these independent loggers blame for not being economically able to produce and harvest logs is the high stumpage rates which have remained unadjusted for some time.

I have had personal conversations with the minister and people within his ministry. I might take this opportunity to put on record that, personally, I have had a great deal of cooperation from people within the Ministry of Forests in my own riding and here in Victoria. Be that as it may, it really does not solve the problem of the people that we are talking about at the present time. As a matter of fact, as recently as this morning I had a phone call from an independent operator in Sechelt who employs some 90 people. He has already laid off some of those people, and there will be further layoffs in his particular operation unless a readjustment in stumpage rates is forthcoming.

As I mentioned earlier, the minister put out a press release dated around April 1 this year, I believe — I don't have it in front of me at the moment. There was an announcement about a readjustment of stumpage rates based on some kind of market value at the coast — current selling price. The fact is that those decreases in stumpage rates at all times are some three months behind the actual current selling price of logs. I would like to know from the minister if he certainly intends to re-evaluate that system of re-evaluating stumpage rates so that it's more modern and efficient and so the independents, particularly, get a reasonable break in stumpage rates. Because the net effect of all of this is layoffs in the independent sector on the coast of British Columbia.

[Mr. Hyndman in the chair.]

It has been brought to my attention that several of the large integrated companies as well have asked that the stumpage rates on their forest tenures be reduced. I don't know if that is correct or not. They have, I'm told, asked for the minimum stumpage rates to be paid to the Ministry of Forests and the government of British Columbia. I have no idea whether that allegation is correct or not, so if the minister could clarify that particular matter for me it would be much appreciated.

Tomorrow I have a delegation of independent loggers coming in from.... As a matter of fact, they were supposed to be in today, but their aircraft was cancelled. So they will be in, hopefully, tomorrow morning to meet with me over this very issue. I hope that the minister or someone within the ministry will take the time to meet with these people. Once again, these are a group of independents working in a PSYU in the lower central coast area — an area which I happen to represent — and they have this very same problem. Their stumpage rates have not been re-evaluated, so as a consequence a number of people on that part of the coast have been laid off.

I don't blame it all on stumpage rates. We know that the lumber market is down the tube because of housing starts in the United States. It's hoped that President Carter will initiate some kind of program in the United States so that we'll be able to sell our lumber; 70 percent of our total product is sold to the United States, as we're all very much aware.

By the way, there is a time lag. Even should the United States decide to go into a massive home-building program tomorrow, it would still be a three- or four-month lag before that effect was felt here in British Columbia. Over 7,000 people have been laid off in the lumber industry in British Columbia, and we have reason to believe that further layoffs will be announced by some of the large integrated companies on the coast of British Columbia in the very near future.

Mr. Chairman, I would like to know what the minister is currently doing to alleviate the situation in those terms particularly, and I would like to know on what basis the minister and the ministry evaluate what the stumpage rates will be and how they determine the selling price of the product through the Vancouver log market or exchange. There seem to be anomalies in some of the figures and reams of stumpage and scaling assessments that I've received from independent loggers all over the coast. There seem to be great anomalies in all this correspondence and these log scale sheets that I receive, so I'd be extremely interested if the minister is, first of all, concerned about the plight of the independent, the layoffs that are taking place, the stumpage rates, etc.

While I have a great number of other questions for the minister, I'm going to take my place, and perhaps the minister would answer on this one specific topic that we're now discussing.

[ Page 2675 ]

HON. MR. WATERLAND: I'll deal with the questions in reverse order. The member for Mackenzie (Mr. Lockstead) mentioned layoffs by the independent loggers. Yes, I guess there are some independent loggers who are cutting back production, and there are layoffs in all sizes of forest companies at the present time. Layoffs are not limited to the independents. The industry as a whole is adjusting to the market situation that we have now. Layoffs are not a result of stumpage, at least in large extent. Perhaps there have been some individuals who are in a particular show where it dictates high stumpage and the stumpage may be a factor but, by and large, layoffs are a result of the market situation and inability to sell the product rather than stumpage.

The member for Mackenzie referred to a press release of, I believe, April 1, whereby we put in a special, different stumpage rate for independent market loggers. They are not now having their stumpage dictated by the Vancouver log market because, especially in downturns of markets, they quite often don't receive the values that the log market indicates they should be receiving. So what we're doing now for the market logger is taking a sampling of prices that the market loggers themselves get for the logs they are actually selling, and we're basing their stumpage on their own sales, not on the log market.

The member says that stumpages haven't been adjusted for a long time. Stumpages are adjusted every month, and they run on a three-month average. If we have a month just passed which has had a lower stumpage, that will bring the average down. The member, I think, has suggested that the market logger would be better off if we just had a one-month average which would reflect a more current state. We have assessed this and I got a report as early as yesterday. The effect of going to a one-month average on the market logger, right now, is that it would increase his stumpage, because in this last month he would be considered to have received a better price than he did a few months ago. So it would not be to his advantage at this time to do that. I was considering refining that market logger stumpage thing for that purpose, but it would not be to his advantage to do it, at least at this time.

The member asked if the industry as a whole had asked for minimums. Yes, I received a telegram — or at least my deputy did a few days ago and he passed it on to me — suggesting that now is the time to go to a stated minimum stumpage throughout the province. The member will I remember that that same thing has been done by previous Ministers of Forests. I believe it was done in 1969 by the then minister, Ray Williston. It was done twice in 1974 by the then minister, Mr. Williams. I haven't done it, and I don't think that that's an appropriate thing to do as a general rule. The timing of such a move has to be very carefully considered. If you do it at the wrong time, you could have an adverse effect because you're stimulating a log market which should be adjusting to market conditions for the product. It might have a short-term benefit, but it could have a much more serious long-term detrimental effect. I don't think it is an appropriate thing to use in general terms. It has to be very seriously and carefully considered if it's done. At times there are justifications for it. The timing has to be done very carefully. But it's always an option open to a government. I haven't responded to that request by the industry yet. My staff and I are monitoring market situations almost on an hourly basis. As I mentioned in my opening remarks, there has been some short-term increase in prices. We're still waiting to see if this is a trend or if it's just a short-term anomaly.

The second member for Victoria (Mr. Hanson) asked something to the effect of why, since 1952, the Social Credit government had allowed overcutting. Well, to my knowledge no overcutting has taken place. Perhaps in very local areas the level of cut and subsequent actions as far as the land base, perhaps fires, insect infestations, has led to an overcut condition. But the ministry has never advocated overcutting. There are probably as many people who say that we should have been cutting more and at a higher rate in this last 20 or 30 years than we have been cutting. What we have been doing, largely, is liquidating an old-growth forest, knowing that when that forest is done, we must have the second growth forest coming along so that we can sustain some reasonable level of cut. I don't know if the member was here or not when I discussed the natural fall-down effect, but I'll say it again. The yield per acre from a second-growth managed stand is not as great as the yield per acre from an old-growth forest that took hundreds of years to accumulate. The yield from a natural second-growth stand cannot be as great as a natural old-growth stand. We can increase that level of yield by various silvicultural activities — which we are attempting to do.

No one can say that the forest has been overcut. There are many people who are saying we should have been cutting it faster. There are many areas where our forest is actually losing wood increment through old age. We have decadent stands which are dying, losing wood. We should, if you want to look at it strictly from a timber production point of view, be liquidating those stands at a very rapid rate, getting a new forest growing so that we are adding wood to our total provincial inventory. But for many reasons — social, environmental, economic and others — that is not an appropriate action to take.

The level of cut which has been established, and, with analysis, the forward look we now have, can largely be maintained as we make the transition. This falldown effect was known by foresters in 1952, and by foresters since then, and has been considered as the levels of cut were laid out by the government. There hasn't been planned overcutting. There are those who say we should have been cutting faster and moving more quickly to a second growth forest.

The member asked what the biological effect of continuously harvesting climax forest is, in British Columbia we have quite a wide variety of conditions, soil types, tree species and climatic conditions. I can't give you a detailed answer for each of the areas. But I think we can use, as an example, the Scandinavian countries, which have been managing forests for hundreds of years. Their harvesting technique is the clearcut liquidation of old-growth forest at maturity. Clearcutting is their prime of imax-harvesting method. They do recover timber from commercial thinnings as the forest is maturing, but when that forest is mature they clearcut. They have been doing it for hundreds of years. They do add fertilizers and they have had no troubles. Their species are similar to some of ours. Our technical people in the ministry try to get on top of these situations. I have had no indication that our soils cannot support the rate of growth that our forests can produce. If the member has technical data which disputes that, I would be very pleased if he would provide it either to me or to my ministry. At the present time it doesn't appear to be a problem. Many other jurisdictions

[ Page 2676 ]

have been managing forests on the same basis for hundreds of years and have not found a problem. I believe that covers the topics asked by the member.

MR. HANSON: I'd like to perhaps pursue that line a little later on in the debate. What I would like to ask the minister now is to consider — and I believe it to be within his ministry's jurisdiction — the impact that the forest industry is having on the health of workers in this province. If you have looked at the Workers' Compensation Board annual report you will know that almost two million days of work was lost to British Columbia in 1978-79. One quarter of that total number was in the forest industry; 471,000 work-days were lost in the forest industry.

HON. MR. WATERLAND: On a point of order, Mr. Chairman, I don't want to discourage the member opposite, but the subject he's talking about now — occupational safety, health hazards and so on — does not lie within my ministry, even as it relates to the forest industry. They are subjects better canvassed under the estimates of the Minister of Labour (Hon. Mr. Heinrich). That will save him some time, because I have no jurisdictional authority in these areas.

MR. HANSON: Mr. Chairman, to clarify for you, I am specifically concerned about the health hazard in the industry for which the minister has responsibility. I have a proposal regarding mandatory job training in the forest industry, which could be required through his ministry. I would like to put that proposal to him and provide the background for it. It is entirely within his jurisdiction; it is not the Ministry of Labour. I'm talking about the forest industry and the record of the forest industry in damaging the health of the workers of this province.

MR. CHAIRMAN: If the member could additionally recall the rule — and be so guided — that his remarks must address the administrative actions of the minister and not relate to legislation or the need for legislation, he may proceed within those bounds.

MR. HANSON: By way of background, I'd like to point out that in addition to the 471,000 work-days that were lost in the forest industry, there were 73 deaths last year. These deaths, from my investigation, were primarily among young workers with relatively little experience on the job. Of the total number of claims last year, 23 percent were within the forest industry, and the vast majority are workers within the age group of 15 to 25. What I'd like to point out to the minister — and I ask his consideration — is that it's going to come eventually: there will have to be mandatory training before a person is employed in the forest industry, and this training will be employer-paid.

Just a few moments ago the minister alluded to an example in Scandinavia, talking about forest management and the harvesting of the wood. I would like him to think of the other side, the human side, of the forest industry in Scandinavia, which requires mandatory on-the-job training prior to beginning work in, the forest industry.

MR. KEMPF: Order!

MR. HANSON: I will take my guidance from the Chair, Mr. Member for Omineca, if you don't mind.

Recently I had the.... I can't use the word "pleasure, " I guess, because of the nature of the subject under study, but I think it should be of interest to the minister that I attended the International Woodworkers of America occupational health and safety conference in Prince George; it was a great educational experience for me. There are specific health problems which, if the minister were serious, he could address. One of them is the wood preservative that is used in the forest industry to inhibit algae and fungus growing on all the wood milled in the industry. That wood is....

HON. MR. WATERLAND: Mr. Chairman, on a point of order, I have equal concern for the health and safety of employees in the forest industry as does the member. I too have human compassion; I too believe that people should have the safest possible working conditions. The member is probably aware that I spent a number of years working in the Ministry of Mines as a district mine inspector; occupational safety hazards were my business, and I'm deeply concerned about them.

Nevertheless, this is not a matter which is in my administrative jurisdiction. The member's line of questioning is not in order; I cannot respond to him. This line of questioning should be addressed to the Minister of Labour. It's not because I have no concern, Mr. Member; it's just that it is not appropriate during my estimates.

MR. HANSON: The conduct of the industry is entirely within your jurisdiction.

MR. KEMPF: No, it's not. That's about how much you know about it.

MR. HANSON: Mr. Chairman, what I am trying to impress upon the minister is that the industry for which he has authority and jurisdiction in this province is the main violator; it is the most hazardous work area of this province.

Interjection.

MR. HANSON: I don't care whether it's....

HON. MR. ROGERS: You should care. Rules are rules.

MR. CHAIRMAN: Order! If we might just review the rules, the basic rule is that it is the administrative actions of the minister which are here open for debate. Secondly, legislation or the need for legislation cannot be debated. Thirdly, if the topic clearly falls within a different ministry or set of estimates, that is the place to discuss it. I will hear further from the member if he will respect those parameters.

MR. HANSON: Are you telling me, Mr. Chairman, the minister and the members opposite that if, for example, the work situation in a given hospital were causing damage to the employees of that hospital, I could not raise that with the Minister of Health? Is that what you're telling me?

MR. CHAIRMAN: I'm not making hypothetical rulings, Mr. Member; I'm simply reviewing the very fundamental rules applicable to debate in Committee of Supply, and asking you to be guided by them.

MR. HANSON: What I am saying is that one-quarter of the entire cost of the health damage to working people of this

[ Page 2677 ]

province is caused in the forest industry. The economic impact of that in time loss, medical costs and suffering is monumental. If the leadership is not coming from the Minister of Labour to correct this, then it has got to come from the minister responsible for the workers in that area; and it is clearly the Minister of Forests. That is the main violator.

Before I was interrupted, I was pointing out that a carcinogenic chemical is used in the preserving of wood, widespread in this province.

HON. MR. WATERLAND: On a point of order, Mr. Chairman, I don't want to argue with the member, but the things he is speaking of are not within my administrative jurisdiction. It's a simple fact. He may not like it, he may think they should be; well and good, but they don't happen to be. I'd gladly discuss with him any and every matter which is within my jurisdiction, but this is clearly not. He may be upset by that fact, but it is a fact. If the member would like to discuss these matters with me in my office or anywhere else. I would certainly pass on his word to the Minister of Labour, but if he wants specific answers on these things I cannot give them here. If he wishes to discuss them in the Legislature, it's best, and appropriate, that he do it under the estimates of the Minister of Labour.

MR. BARBER: On the same point of order, Mr. Chairman, it's clear that my colleagues here — and there — share a personal and human concern about the working lives and industrial safety of people in the forest industry. It's also clear, though, from just a very brief examination right here on the floor, that the minister does in fact have administrative responsibility for, in this case, the Forest Act. I refer to sections 125, 126 and 127. Division 5, "Insect and Disease Control," refers to the authority — subject to the Pesticide Control Act — of the minister through his Ministry to enter into certain agreements for the control and suppression of insects...

Interjections.

MR. BARBER: Hear me out.

... pests and other conditions which diminish the value of the forest resource.

My colleague is referring to one of the chemicals used to reduce infestation, rot, and the waste of wood — in the specific case, by fungus. In fact, Mr. Chairman, to conclude on this point of order, sections 125, 126 and 127 of the Forest Act appear to give the minister authority to agree or not agree to the application of certain chemicals for the purpose of suppressing natural forces that reduce the value of the wood resource. My colleague is referring to what happens to the human beings when some of those chemicals are used. It is in fact within the jurisdiction of the minister to control. to permit or not permit, the use of certain of those chemicals. That particular use of a chemical is one of the apparent hazards on the job.

Thus it's not only a shared moral responsibility that every member of the Legislature has, to be concerned about these things, but it is also, by reading of the act, a specific administrative responsibility of the minister. Thus I think the comments of my colleague from Victoria are perfectly in order.

MR. CHAIRMAN: Hon. members, I think we do not in fact have a serious problem here. It may very well be that the minister. In the fullness of time, wishes to give the sort of answer he just gave. Insofar as the second member for Victoria (Mr. Hanson) is concerned, the Chair will simply be guided as follows: that so long as his remarks fall within the normal parameters he shall be allowed to continue. Those are, again, that he must deal with the administrative actions of the minister, he must not touch on legislation or the need for future legislation, and he must not touch on a topic which clearly falls within some other set of estimates. Please proceed within those rules.

HON. MR. WATERLAND: On a point of order — and I hate to keep saying this, Mr. Chairman — the first member for Victoria (Mr. Barber) talked about insect and disease control, and, yes, we have responsibilities for the control of insects and disease in the forest. We are guided there by, and must comply with, pesticide control regulations. We must work through them to get permits the same as anyone else does. As far as the use of chemicals to control fungus or other things at the mill is concerned, again, the industrial operation is not within the jurisdiction of the ministry. The use of chemicals in a manufacturing plant comes under the Ministry of Labour. If the member wishes to discuss it I can't stop him. All I'm saying is that I cannot respond to him, because it's not within mv administrative jurisdiction.

MR. CHAIRMAN: I think the view of the Chair is that we're first going to hear — hopefully in an orderly way — from the second member for Victoria. and it will be the Chair's ruling as to whether he may continue. Certainly the Chair does feel this. that it would be incorrect to suggest that the rule is such that the existence of the Workers' Compensation Board prevents any possible type of discussion in estimates which may relate in the administrative sense to health issues, and the Chair will be guided accordingly. So, within those parameters, the member may continue, and the minister, if he'd have a little patience, may in fact give the same sort of reply; but the Chair will determine if these remarks are in order.

MR. HANSON: Thank you, Mr. Chairman. I accept your ruling and I'll be guided accordingly.

My main concern is that I don't want the health of the workers in the forest industry to fall between administrative stumps, so to speak. What I am pointing out to the minister is that the industry over whose regulation and administration he has authority has the worst record of job safety. In other jurisdictions this problem is being addressed by ensuring that on-the-job training occurs prior to people being employed in the industry.

I think this is a serious problem. The figures of the Workers' Compensation Board are just the tip of the iceberg in the forest industry. They just really address themselves to trauma, to accidents, and not really to the bulk of the iceberg, which is industrial disease caused by chemicals that bathe the lumber after it is cut to ensure that it is not destroyed and deteriorated by fungicides when it is exported abroad. Other kinds of chemicals are in the workplace: red cedar dust is a very harmful agent of respiratory problems; the white finger vibration disease which fallers get....

Mr. Chairman, I'm going to be raising this again under the Minister of Labour's (Hon. Mr. Heinrich's) estimates and the Minister of Health's (Hon. Mr. Mair's), because it's not good enough to just calculate health budgets in terms of

[ Page 2678 ]

hospitals. We've got to be looking at the way human health is damaged as a result of work, and it is damaged in the very worst way in the forest industry. What I'm trying to do today is to get the attention of this minister to do something right for the workers in the forest industry by obliging the industry to have safety programs prior to commencing work so that we don't have this inordinate number of deaths among young people and among people within their first 30 days of employment.

If this debate and discussion today is falling between administrative stumps, I want to serve notice on the minister that we are going to be hounding him to do something right to cut down this terrible loss of 500,000 workdays and all of the time loss that occurs around an accident in terms of other people being involved in helping and the suffering of the individuals that actually are injured. To hide and say that it is not his bailiwick is not good enough. It is too serious, and he knows that the forest industry unions think it is too serious for him to just say, as the Premier did in his estimates: "Please take it up with one of my colleagues; it's not my can of whatever. "

HON. MR. WATERLAND: That member seems to be implying that I have no concern for the health and safety of people working in the forest industry. He seems to be implying that I don't care.

I recall a fellow I grew up with who taught me to play softball and basketball and to swim; I spent many, many years of my youth hiking in the mountains with him. He took up logging; he was a faller working out of Squamish. He broke his back very seriously, and he's badly crippled as a result. I have concern for him, Mr. Member, because he is my brother. I've concern for everyone who works in industry, whether it be the forest industry, the mining industry or any other industry. Concern for people is not the sole thought of those opposite.

This is a serious matter. It doesn't happen to be within my administrative responsibility. I work with the Minister of Labour, and I work with my staff, and we work with the industry. Anything we can do to eliminate hazards, I'll be more than happy to contribute my share.

MR. HOWARD: Mr. Chairman, some time ago there were systems of acquiring timber by way of the timber sale process, as it was identified then, and it meant that a small operator — or on the coastal area loosely called "gyppo" operators — had opportunities to locate stands of timber, to go to the Forest Service and have them put up for sale on an auction or open bid basis. It was fairly common practice to see larger companies outbid the small operator at the auction and get the timber sale — take it out from under his nose after he had done the initial exploratory work of tramping through the bush, surveying and assessing the quantity of timber and the like for his own purposes.

It comes to mind that in once instance back in those periods of time, there was a small operator here on Vancouver Island, who, as the saying went, put up a timber sale. The upset price of it at the time was somewhere in the area of $9 or $10 a thousand. MacMillan Bloedel — and it may now have been before that company became MacMillan Bloedel — bid against the individual and bid the price of that timber sale up to $45 a thousand when the upset price was $9 or $10. MacMillan got the timber sale, which was a good stand of fir, and the small operator got nothing, was not able to continue in business, and went out of business because of inability to find timber, and this was the one thing he was hoping for.

At that time a timber sale required that the successful bidder put up 10 percent of the money. In this case with Macmillan Bloedel it was $4.50 a thousand. I don't recall the length of the sale. It might have been a five-year sale or something of that sort, but partway along through the time of that sale — before its expiration — MacMillan had not touched the timber. They hadn't gone anywhere near it; they just let it sit there. They went back to the Forest Service and said: "Look, we had this difficulty over here. One year we had a fire up here, the market has done this to us, and so on, so we weren't able to touch that timber." When it came up at expiration for resale, MacMillan got it at the upset price — at that time $10 or $11 a thousand, or something of that sort. What that meant was that for a 10 percent investment of $4.50 a thousand — which was not very much to MacMillan — they were able to freeze out a small entrepreneur, driving him out of business and into bankruptcy, and still get their hands on the timber later on. That sort of practice went on quite a bit.

Another practice that was followed was for some of the larger companies to assist in financing the small operator, the small gyppo who might have been successful in getting a timber sale. They'd put up money for equipment, advance payments for wages and this sort of thing, on the basis that the small operator would offer the major company the timber that was boomed at the first opportunity.

Many gyppos found themselves in the position of having gone through that process of phoning the company and saying they had a boom of three or four sections of logs ready — or whatever it was they might have had in the water. And the company — which put up the front money to get them the timber sale in the first place and to back them for their equipment and so on — would say to the individual: "Look, things are a bit tight in the market today. Prices are not really what we'd like to see established. We can't give you $31 a thousand" — for argument's sake — "but we can offer you $27 a thousand; that's the standard price at the moment. "

The individual was required to offer the logs to the company that backed him. Faced with that situation, he had two choices: he could sell the logs at $27 a thousand — using a figure that was general and common at that period of time — and go broke; or he could refuse to sell the logs and go broke. Those were the only choices available to him. The result was — and it was rampant on the coast — a gradual, steady acquisition of logs by major companies, with the small operator doing all the work and getting relatively little out of it. That was one of the contributing factors to the concentration of control in the industry on the coast.

It was aggravated and intensified with the institution — and then the enlarged interest shown by major companies — of the forest management license, later tree farm licence, scheme. We now have a program within the ministry called the small business program. I understand the essence of it and I'll certainly be brought into it in detail if I'm not accurate in this understanding. I understand the essence of that is something similar to what the old timber sale program was: that is, that a small operator can find timber, can see it put up for sale, do the necessary on-site examination for himself, and find that somebody on the telephone in Vancouver or Prince George or some other place who never saw the site, didn't see the timber at all, has bid that small operator out of business and acquired that timber. If that is the way that the system

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May 28, 1980, operates — as I am told by a couple of people I know, one who had a hand logger's licence earlier; that's the way the system was explained to me under the small business program — those people face exactly the same fate as was faced by the small gyppo operator years ago.

The situation is probably compounded by the lack of available timber. Some years ago, when ten years for forest land were different than what they are now, there was a fair amount of uncommitted Crown timber around, hence all the timber sales that were put up. Gradually a lot of that land has been taken under different forms of tenure such as tree farm licences which give the owner or the possessor of the tree farm licence authority and control with respect to that area of land and access to that timber. The scarcity of timber, in a sense too, is going to militate against the small entrepreneur being able to get into the system itself.

I know it has been advocated many, many times in the past that where forest land is given, under licence in the form, say, of a tree farm licence, on a long-term basis, giving to the holder of that licence non-competitive timber, that public policy should demand, I think, or dictate, that a certain quantity or volume of that timber be available to the small operator to be able to get into a functioning logging operating capacity within that tree farm licence, without having to go through the straight contractual relationship operation with the holder of the licence. This is a concern that a number of people have expressed to me about what is facing them in the future.

[Mr. Strachan in the chair.]

In the Prince Rupert forest region there are a number of timber supply areas — nine or ten of them, I believe. Some of them are now under an assessment program to determine what timber is available in them. Others are just being started. In the middle to upper reaches of the Skeena River, there are groups — a couple of them are native Indian groups — who are interested in getting a supply of timber, interested in advancing themselves, and becoming small operators. I'm told that the assessments being made in the timber supply areas in which they are interested, in the Prince Rupert region, has either just commenced or is just about to commence, and as the process is a rather lengthy one, it'll be some time before that assessment and those surveys are finished and someone in the Forests ministry is able to say: "Here's how much timber is available to operators in the area. You can have some, " or, "you can't have some, " depending on the outcome of it.

If it shows up, as I think has been the case in other areas, that the timber supply is under commitment and on a sustained-yield basis cannot stand any additional cut or any additional commitment, then what are these other individuals to do who may want to get into the logging business or into the forest industry? Some procedure must be available for them to do that; otherwise the whole small-business program becomes a mockery. It's fine to have a program, but if you can't fit within it, if you're attracted to try and can't make it because of circumstances outside of your control and denying the opportunity of access, then it becomes just a label and a slogan without any reality to it. I'm inclined to think that that situation is going to get worse.

I'll talk about concentration in the industry, just generally speaking. The Pearse commission a few years back examined that question of concentration in the industry and laid out a bunch of statistical material and data about it. I would like to make reference to something relatively current, something which I have no way of challenging in terms of its accuracy, but if it is challengeable I'm quite sure the minister will do so. This is from the Vancouver Province midweek report of March 5 of this year, an article by Eli Sopow, headed "Forest Concentration Increasing.- It goes into some detail about the concentration of ownership in the industry. I only want to make reference to a table or chart at the bottom of that particular article. It says: "Growth in total timber production and share of the largest ten controlling companies" — 1954 as one time, 1974 as another, not over that period of time as a graph, but taking each year separately. Of the ten largest controlling companies in the forest industry in 1954, the total provincial cut was 9.4 million cunits. Of that, the ten largest companies control 37.2 percent of the cut — just a little more than a third of the cut. Twenty years later, in 1974, according to this information here, the total annual cut in the province has more than doubled. It's shown to have been 21.2 million cunits and the total control of that amount of cut by the ten largest companies in the forest industry in B.C. Is now over half, 54.5 percent.

Those are disturbing figures insofar as the small operator is concerned. because the larger that control gets, as we all know. the more dominant the forest becomes and the less opportunity there is for a person who may want to take advantage of the small-business program. That opportunity declines to the small-business person as the concentration increases and as growth of the forest industry — in one company absorbing in the other and the like — increases. I think as long as that is permitted to continue unchecked and unabated, we are headed for difficulties in terms of control of the industry, in terms of the ability of the Ministry of Forests to have any determination about what goes on therein, and in terms of the ability of the small operator to fit within it and make a living for himself.

Here is another article apropos of this in a different way. The Vancouver Sun, May 9. 1980, carries an article, of which the heading says: "Forest Firm Planned Overcutting." I'm sure the minister knows of this particular article. Again, the validity of it or otherwise can be examined there, but it relates to Canadian Forest Products Ltd. The assertion in the article is that Canadian Forest Products Ltd. deliberately. so it says: "... set out on a program of overcutting in order to convince the provincial government that a certain course of action should have been taken or should be taken."

I'm not getting into the merits of what course of action they want: that's in the article. But here — if this is accurate, if this is correct — is an example of a fairly large company, Canadian Forest Products, engaged in a practice of injuring forest in this province in order to bring to bear some pressure on the ministry to follow a certain course of action. Whether that's an isolated situation or not, I don't know. I'm simply saying that as concentration is permitted to develop unchecked it places all the aspects of the forest industry — the Ministry of Forests, the individual, the small operator, communities which depend upon the forest industry for their livelihood — in a more difficult and more awkward position all the time.

I want to examine another matter very briefly which has to do with the export of raw logs. During the last session we mentioned this very briefly in passing. I put forward the

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contention, and I do now as well, that when we export raw materials we are basically exporting the opportunity to upgrade those materials and are basically exporting job potential. I know there is a rationale within the ministry. I understood the minister to say at one point that so long as that export of raw logs does not exceed 3 percent.... He's shaking his head. I've got it incorrectly then. There is some rationale that exists about limitation on the percentage of raw logs as a total of the total cut that is exported. If there is no such limitation we are in a bad way because it means the sky is the limit.

Information from the Forest Service, the ministry's statistics, show the following. This goes back to 1970, taking each year from 1970 to 1979, and shows a total by species, by grade, so far as lumber is concerned, and the total of logs. I can't see from this what it's measured in; in any event I whatever the units are — it doesn't leap out at me here — it shows that in 1970 the volume, unless there is a misprint here, was 1,036,310.9 units of whatever way they're measuring it. In 1971 that figure was 664,000 — I'll leave off the odd figures at the end. In 1972 — and there may be some significance in this; I wouldn't want to read too much into it for fear that it will upset the minister — a provincial event took place that saw a new government come into office in this province. In that year the volume went down to 203,000 from 664,000 in the previous year. In 1973, another year when the NDP was in government, that volume declined to 41,000 — not even in the millions any more. In 1974 it moved up again to 274,000. In 1975 it was 217,000. In 1976 it was 338,000. It went to 755,000 in 1977, 598,000 in 1978, and 609,000 in 1979, showing that, basically, as I see these, since the Socreds got back into office in 1975 — we can't count that year, because they came into office at the end of it — we find that there has been an escalation, and virtually a doubling, of the export of raw logs from this province. And that's the export of jobs.

There is a procedure, I gather, that needs to be followed in order to obtain permission to export logs. Some form of tenure — probably the earlier Crown grants — don't require any such procedure or any such licence, so I'm informed, but that situation may have changed from an earlier time. In any event, a procedure is required for some of it. Without getting into all the details of it, the procedure basically is that the logs have first to be advertised for sale. If they are not bought, then they are considered to be surplus to the requirements for processing at that particular time, and therefore become available for export.

We know full well that in an area where one company, for argument's sake, dominates the industry — where there is only only one company that's buyer, processor of logs, miller of logs, chipper of logs or whatever they do to them in the processing beyond the raw log stage — that company can dominate the situation as to whether or not logs are bought. The interests of that one company are what are considered, not the interests of keeping logs within the province for further processing and the providing of jobs here.

It gets back again to the question of concentration of control. I'm saying to the minister that the more there is permitted, or in fact supported probably, a growth and a concentration and an authority in corporate hands over the forest industry, the more difficulties of this nature we will be facing. The minister laid on the table a couple of months ago — March, I believe it was — a massive document outlining a five-year program with respect to the forest industry; he's embarking upon a reforestation seedling program; all of which is well and good, all of which is necessary, all of which has been known about by people in the industry for the last four or five years anyway.... While all of that is headed in the right direction, if we continue to permit and give support to the concept of concentration — bigger and bigger is better in the forest industry — the more difficulties we will be facing in the future, and the more problems will be faced by the ministry in trying to deal with it.

The House resumed; Mr. Davidson in the chair.

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

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

HON. MR. SMITH: By leave, seconded by the member for Burnaby North, I move that the proceedings in relation to third reading on Bill 20, entitled School Amendment Act, 1980, be declared null and void and that the said bill be recommitted in respect to section 1 thereof.

Leave granted.

Motion approved.

Hon. Mr. Curtis tabled an answer to a question standing on the order paper.

Hon. Mr. Hewitt tabled the 1979-80 annual report on agricultural aid to developing countries.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:58 p.m.

APPENDIX

22 Mr. Hall asked the Hon. the Minister of Finance the following questions:

1. How many copies of the 1980-81 Provincial Budget have been printed?

2. How many copies of the 1980-81 Provincial Budget have been distributed by the Government?

3. What is the total amount of money spent by the Government in printing these copies of the 1980-81 Provincial Budget?

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4. What is the total amount of money spent by the Government in advertising the 1980-81 Provincial Budget?

5. In which publications were advertisements placed for the 1980-81 Provincial Budget, and in each case, what was the cost of the advertisement?

The Hon. H. A. Curtis replied as follows:

"1. 25,000 copies.

"2. 15,466 copies.

"3. $29,028.78.

"4. $55,108.43.

"5. The advertisements were carried by daily and weekly newspapers and other publications throughout the Province, as well as by the Financial Post and Financial Times. A list of the publications in which the advertisements were placed, together with the cost per publication, follows:

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