[ Page 2731 ]

CONTENTS

Routine Proceedings

Oral Questions.

Emission standards at Rayonier Port Alice mill. Mr. Gabelmann –– 2731

Victoria-Seattle ferry service. Mr. Skelly 2731

Advertising by lawyers. Mr. Macdonald –– 2731

Medication for handicapped school children. Mr. Lauk –– 2732

Air-sea rescue services. Mr. Lea 2732

Telephone rates. Mr. Howard –– 2732

Tabling Documents.

Ministry of Environment annual report, 1979.

Hon. Mr. Rogers –– 2733

Committee of Supply; Ministry of Forests estimates.

On vote 103.

Mr. King –– 2733

Hon. Mr. Waterland –– 2734

Mr. Lorimer –– 2735

Mr. Levi –– 2736

Mrs. Wallace –– 2738

Mr. Nicolson –– 2741

Ms. Sanford –– 2742

Hon. Mr. Waterland –– 2742

Mrs. Wallace –– 2744

Hon. Mr. Waterland –– 2746

Mr. Lorimer –– 2746

Mr. Gabelmann –– 2746

Hon. Mr. Waterland –– 2748

Mr. Barrett –– 2750

Hon. Mr. Waterland –– 2751

MONDAY, JUNE 2, 1980

The House met at 2 p.m.

[Mr. Davidson in the chair.]

Prayers.

Oral Questions

EMISSION STANDARDS AT
RAYONIER PORT ALICE MILL

MR. GABELMANN: I have several questions for the Minister of Environment. My first question is this. In April 1978 the pollution control branch issued permit no. PA3760, a 30-month permit regulating the particulate matter emissions at Rayonier's pulpmill in Port Alice. The permit allowed a maximum of 0.25 grains per standard cubic foot, with an allowable additional maximum two hours at 0.35 grains per standard cubic foot in each day. The 0.25 is two and a half times the federal health standard, which is 0.1. According to an internal Rayonier report in my possession, the average actual performance during the life of this permit has been 0.64. The range has been from 0.35 to 1.26. Has the minister decided to take any immediate action as a result of this outrageous violation of the pollution control branch permit?

HON. MR. ROGERS: In view of the fact that the information has been in my possession now for about 30 seconds or so, it would be difficult for me to tell you, but I will take that question as notice and get further information. Perhaps the member would make a copy of the report available to me if he wants to refer to it.

MR. GABELMANN: In a letter dated April 2, 1980, to the president of the Canadian Paperworkers' Union local in Port Alice, the minister indicated that no action would be taken prior to November of this year. In view of the company's own evidence in an internal confidential memo that the permit has been grossly exceeded, has the minister now decided to take immediate action?

HON. MR. ROGERS: I could check. I believe the letter you refer to is the one which refers to order-in-council 919, which comes into effect on December 31 this year, but I'll take the rest of the question as notice.

You say it doesn't. I'll have to check on that; I can’t remember the specific permit.

MR. GABELMANN: On the same general subject, I have a slightly different question. Is it the normal practice of the Ministry of Environment to give prior notice of the time of pollution control branch inspections? In other words, does your branch notify the company as to the month and the days on which the inspections will be undertaken?

HON. MR. ROGERS: I'm not sure of the specific methods with which inspections are taken, but I would not suspect that that's the situation. Again, I can't say for sure; I doubt it very much. I presume your next question is to tell me that in fact they have told them they're going to do it. I don't know; I could find out for you.

MR. GABELMANN: There can't be a question. They've told them they're coming in June, and they told them some time ago.

A question to the Minister of Labour. In view of the hazardous nature of sulphur dioxide and the fact that workers in the Port Alice mill are subject to an average dosage six times the normal allowable limit, and that in 1979 some 260 sulphur dioxide poisonings were reported to the company's first aid station, 97 of which required immediate attention, has the minister decided to ask the Workers' Compensation Board to take immediate action?

HON. MR. HEINRICH: Mr. Speaker, this is the first time I've heard of the matter which the hon. member is raising in the House now. I will make the appropriate inquiry on his behalf. I might add that I will be most surprised — in fact astounded — if that matter was not raised with the WBC some time ago and if they have not conducted or are not conducting investigations at this time. I suspect that an answer would be easily available to me.

VICTORIA-SEATTLE FERRY SERVICE

MR. SKELLY: My question is addressed to the Minister of Transportation and Highways. The month-end figures show that between May 16 and May 31, 1980, the Victoria Princess and Flying Princess combined carried 10,598 passengers. This is 5,225 fewer passengers than carried last year by the Princess Marguerite in the identical period. This drop has occurred despite an expensive advertising program this year. Apart from volcanoes. what excuse can the minister offer for the substandard performance of B.C. Steamships service and for the loss of 5,225 revenue passengers during this period this year?

HON. MR. FRASER: Mr. Speaker, I wonder why the member for Alberni is asking the question, but that really doesn't matter. We'll get into the numbers game here as well. I have different figure than you have, Mr. Member, and I am glad to share them with the Legislature. I just got them ten minutes ago. I said we would get figures on this service at the month's end. I am told that we carried 10,466 passengers to Victoria in the first 16 days of operation. Last year on the same days we carried 3,000 less passengers. Your figures are a bit mixed up because you are saying 5,000 less while I am saying 3,000 less. Furthermore, the economic benefit to Victoria is much greater because they stay here a lot longer.

MR. SKELLY: Mr. Speaker, would the minister confirm that the reason they stay a lot longer is that the ship cannot make it out of the harbour because it cannot go out during certain tidal periods?

ADVERTISING BY LAWYERS

MR. MACDONALD: Mr. Speaker, I have a question for the Attorney-General. In view of the fact that the public has a vital interest in the matter of legal advertising in terms of the levels of fees and the right to know and shop around if necessary, has the Attorney-General intervened in the important case that is now going through the courts called Labour v. the Law Society, the Attorney-General of Canada having intervened? It is before the court of appeal today.

[ Page 2732 ]

HON. MR. WILLIAMS: Mr. Speaker, I'm expecting a report this afternoon from the constitutional counsel that we have with respect to that action.

MR. MACDONALD: I take it from that answer that the Attorney-General of British Columbia is not represented in the case, and that he's waiting for a report on it.

HON. MR. WILLIAMS: I've asked the advisers whether we're in the process now, and if we are not, why we are not.

MR. MACDONALD: Has the Attorney-General's department taken any position in terms of representations on this very important matter, having regard to the fact that there would appear to be a violation of natural justice if this question is left to the lawyers alone, even though the interests of their clients are affected?

AN HON. MEMBER: Vicious attack on the profession!

HON. MR. WILLIAMS: Besides that vicious attack.... The position of the government will be taken once this matter is out of the courts. The member knows perfectly well it would be improper for me to make any statement at this time.

MR. MACDONALD: Mr. Speaker, that's an amazing answer. I'm not allowed to say that, eh? After this controversy has gone on for years, you say you're not going to take a position until the next two years?

HON. MR. WILLIAMS: It's sub judice, is it not?

MR. MACDONALD: No, it is not. There's no reason why the government of British Columbia's chief law officer should not be taking a position on behalf of the public interest and not leaving it simply to the courts and the lawyers. That's an easy way out.

I ask one final question of the Attorney-General. In view of the fact that the Law Society has charged a lawyer, Jack James, with the misuse of the name "The Law Shoppe" and the citation is addressed to James and marked confidential, does the Attorney-General have any position as to whether or not that is the proper way to handle a citation of that kind which is obviously a matter of public importance as well as of importance to the legal profession?

HON. MR. WILLIAMS: Mr. Speaker, that too is a matter upon which I'm about to receive advice in the next few days. The action taken by the Law Society in this regard is under examination by officials of the ministry.

MEDICATION FOR
HANDICAPPED SCHOOL CHILDREN

MR. LAUK: To the Minister of Education, on May 21 a question was asked of the minister with respect to teachers in many school districts who, because of the decision to mainstream handicapped children, have had to administer medication to some of these children. The minister took the question on notice and indicated that he was going to be looking into the matter. The minister also indicated at the BCTF general meeting that he was, at least initially, opposed to the practice of teachers administering medication and drugs. Concern has been expressed by parents with respect to non-qualified medical personnel administering medication, and some teachers are quite concerned about their legal position. Can the minister assure the House that the ministry and the resources of government will protect teachers from any problems arising out of alleged negligence in the administration of medication?

HON. MR. SMITH: Mr. Speaker, I thank the member for raising this matter with me in advance as well, and I will be giving a comprehensive answer to that earlier question.

There are really two kinds of problems here, hon. member. One is the emergency administration problem, which, it seems to me, is fairly clearly covered by the provisions of the Medical Practitioners Act. If it's a case of urgent need — a first-aid situation — then the teacher is protected. But the ones you're concerned with and I'm concerned with are the occasional or routine administration of drugs which teachers from time to time are called upon to do. I've been examining how widespread that is and the procedures that are followed by various school districts, and I'll be making a comprehensive statement.

My position generally on this would be that I do not feel that teachers should be required to perform this sort of administration of medication unless they have adequate protection. I'm concerned, as the member is, about the provisions of the Medical Practitioners Act, but I'll give a clear and comprehensive answer to the whole question. I'm not yet in possession of all the information.

AIR-SEA RESCUE SERVICES

MR. LEA: I have a question to the Minister of Inter governmental Affairs. In the last federal election earlier this year, each and every party said that they were unhappy with the air-sea rescue services on the west coast of Canada. I'd like to ask the minister if he can give me the approximate date that his government made representations to the federal government about improving the air-sea rescue services on the west coast.

HON. MR. GARDOM: I'll seek the information, hon. member, and report back to you. I'll have to take the question as notice today.

TELEPHONE RATES

MR. HOWARD: Mr. Speaker, I'd like to direct a question to the Minister of Universities, Science and Communications. The question is predicated on the situation whereby residences of the community of Forestdale, a small community between Burns Lake and Houston, are able to make via B.C. Telephone Co. calls to Houston toll-free, but have to pay long-distance charges to call Burns Lake. Most of their business is conducted in Burns Lake. I wonder if the minister could tell me whether he has been approached by the MLA for the constituency within which Forestdale exists, on behalf of the residents of Forestdale, seeking the minister's assistance to get B.C. Tel to change its policy in this regard.

HON. MR. McGEER: As the member well knows, the provincial government doesn't have jurisdiction over B.C. Tel, so the member would be making an inappropriate ges-

[ Page 2733 ]

ture in approaching me. We have stated that we believe control over B.C. Tel regulations should reside within the province. Should the federal government choose to give us that jurisdiction, then the question would be an appropriate one and we might have some method of dealing with it. As it is, it is a matter, unfortunately, which falls on the shoulders of the federal government. The member has federal connections and perhaps he could pursue those.

HON. MR. ROGERS: I have the honour to present the 1979 annual report for the Ministry of Environment, and I would like to file a question standing in my name on the order paper.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

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

MR. KING: Mr. Chairman, I believe it was last Friday that I raised some questions regarding a shortage of timber supply, particularly for some of the sawmills in the interior of the province. At that time the Premier questioned me as to the specifics of that shortage of the resource. Just for the edification of the Premier — wherever he may be — I want to read into the record of the House the reaction of a group in his riding to forest management generally in the province of British Columbia. It's contained in a telegram that was directed to the Premier on May 27, I believe. I would have thought that perhaps he would have had this material in his hand prior to questioning me about the source of any complaints in the interior. The telegram reads:

TO THE HON. W.R. BENNETT.

AS CONCERNED CITIZENS OF THE OKANAGAN. WE REGRET THE INADEQUATE PUBLICITY AND INCOMPLETE AND MISLEADING INFORMATION GIVEN REGARDING THE OKANAGAN TIMBER SUPPLY AREA YIELD ANALYSIS REPORT. IN VIEW OF THE EXTENSIVE REGION INVOLVED AND THE VITAL IMPORTANCE OF THE FOREST INDUSTRY TO OUR ECONOMY THE SINGLE PUBLIC MEETING PLANNED FOR VERNON ON MAY 28 IS TOTALLY INADEQUATE. AS THESE MEETINGS WILL BE THE ONLY FORUM FOR PUBLIC EDUCATION AND INPUT ON FUTURE HARVESTING RATES AND, INDEED, THE VERY SHAPE OF OUR FOREST INDUSTRY FOR MANY YEARS IN THE FUTURE, WE URGE ADDITIONAL HEARINGS BE HELD IN ALL KEY CENTRES OF THE REGION, THAT THE WIDEST PUBLICITY AND DISTRIBUTION TO ALL CONCERNED ORGANIZATIONS AND INDIVIDUALS BE MADE OF PROPOSALS TO BE PRESENTED AT SUCH HEARINGS, THAT ADEQUATE TIME PRIOR TO THE HEARINGS BE GIVEN TO ALLOW PREPARATION OF BRIEFS, AND THAT THE AMOUNT OF TIME ALLOCATED TO THE HEARINGS BE FLEXIBLE TO ALLOW OPTIMUM PUBLIC INVOLVEMENT AND PARTICIPATION.

PETER C. GRIFFITHS. REPRESENTING BRITISH COLUMBIANS FOR RESPONSIBLE FOREST POLICY.

It is accompanied by a press release which was issued in that area decrying inadequate management of the resource, inadequate public hearings and inadequate access to the resource by competitive elements of the industry. So I say for the Premier's edification, Mr. Chairman, that if he would stay more closely in touch with his constituents and what is happening in his area, he wouldn't have to query the opposition regarding the sources of dissidence from his own riding.

I note that a copy of this telegram was directed to the member for Boundary-Similkameen (Hon. Mr. Hewitt) and the member for Okanagan North (Hon. Mrs. Jordan) as well. So I presume that the Minister of Forests (Hon. Mr. Waterland) has a copy of it and is familiar with it.

There are shortages of timber imminent in the Okanagan-Shuswap area of the province, and there is some general concern regarding what appears to be at the regional level an inclination on the part of the Forest Service to further share that shortage. In other words....

MR. CHAIRMAN: Hon. member, I wonder if I just might take a moment of your time.

MR. KING: I would appreciate a reduction in the noise level.

MR. CHAIRMAN: Yes, and so would the Chair. Hon. members, the member for Shuswap-Revelstoke has the floor, and it would be appreciated by the Chair, many hon. members and also the member who has the floor, if we could contain the noise level to some degree so that the Chair and those members wishing to listen to the member could hear him.

MR. KING: The concern of some of the current licence holders in the Shuswap area and in some of the North Okanagan areas is that they have a constant supply of fibre perhaps for the next 15 years. Because some of the other regional operators are now running out of timber, there appears to be an inclination on the ministry's part to share that remaining old-growth timber held by some operators — in other words, to share the scarcity. This means, in my view, Mr. Chairman, that it hastens the day, simply, that the old-growth timber is exhausted and reductions in production have to flew from that process — that is, reductions in employment opportunity, reductions in revenue to the Crown from stumpage, and so on.

There's a good deal of concern — whether it's valid or not — felt by key licence holders in the area that rather than trying to manage the remaining timber resource and preserve a perpetual yield, it is going to be harvested at a faster pace to accommodate the areas that have already run out of timber. The five-year analysis report which the ministry has released would tend to support that proposition. It points up a fall in timber supply within the next five to 15 years. At one and the same time we've heard the Minister of Forests indicate that increase in annual allowable cut will be considered if the companies engage in intensive forest management.

What I have a little difficulty understanding is this: if we already have this large backlog of inadequately restocked timber lands and we're just now going to embark on extensive regeneration, but a diminishing supply of timber is seen within the next 15 years, how does the minister hope to increase the annual allowable cut or the pace of cutting the trees when stock planted now is going to take in the area of 70 to 80 years to mature — 35 years at most for the commercial thinning stage — and a reduction is imminent within a 15-year period? I have some difficulty with the proposition that just because we're going to engage in massive replanting and regeneration now, we can automatically and immediate-

[ Page 2734 ]

ly increase the pace of cut. I can see that had intensive management been practised for the last 25 years, but that is not the case. Otherwise, Mr. Chairman, we would not have 1.8 million acres of the forest land of this great province of ours inadequately restocked.

I would appreciate the minister's responding to this dilemma that I and certainly some people in the industry see in terms of their supply of material. When you couple that concern of a failure to practise adequate regeneration in the past with the diminishing land base in the forest sector, it seems to me to spell out some very acute problems for the intermediate and long term in the province of B.C.

An analysis of the minister's five-year range and forest analysis report shows some very alarming withdrawals of land from forest production. The ministry tells us: "Wood supply problems lie ahead.... Attempting to increase harvests in the short term would mean earlier and larger deficits." Presently committed annual allowable cuts and public sustained yield units can be sustained through 1985, but thereafter these will be reduced. That's what it says in your report, Mr. Minister.

In tracing through the critical judgments in the technical report — many of which are erroneous from the viewpoint of industry people — the foregoing pronouncements are open to serious challenge. Productive forest land which is defined as the base for allowable annual cut is reported as 3.8 million hectares. This excludes substantial acreages of private forest land which are also part of the base. It appears to be a reduction of 26 percent from the statistics the ministry supplied to the royal commission in 1975. There's a real contradiction here, Mr. Minister, in terms of the 26 percent reduction in the forest land base which you now identify, when only five years ago the ministry presented entirely different figures to the Pearse royal commission. Where did that land go? What happened to that land that's been withdrawn from forest production? I would appreciate the minister's comments on that.

When we see this kind of shrinkage in the land base for productive forests, when we appreciate the enormity of our failure to regenerate, and when the ministry at one and the same time is advocating an increased pace of cut, that seems to me to be a formula for very extreme shortage; shortage that would lead to the closure of plants, massive layoffs and certainly very serious lost revenue to the province of British Columbia. I would very much appreciate the minister's responding to this apparent conflict in the statistics which his ministry has provided within the last five years.

A further reduction of 16 percent is obtained by classifying 600,000 hectares as economically inaccessible or protection forest. Similar withdrawals removed 36 percent of productive forest land in the Prince Rupert region, or 1.2 million hectares. Why, Mr. Minister, is all that land being removed from inventory as forest production land? I would very much appreciate the minister responding to these premises before I continue.

HON. MR. WATERLAND: The member for Shuswap-Revelstoke is saying we are advocating increases of cut in the face of timber supply problems. We are not advocating any such thing. What we have said is that one possible incentive that could be used in those areas where there is a sufficient timber supply is that if individuals are to apply silvicultural treatments above and beyond those prescribed in their licences, one of these incentives could be an increase in cut, providing the timber is available and the age-class distribution of the timber is right, so that we will not, by doing that, lead to falldowns in timber supply in the future. There are some areas in the province where that can happen. There are many areas where it can't. In many areas, perhaps, the incentive will be to have a lesser reduction in cut than might otherwise have occurred; but it is one of the tools we have to work with, to offset the natural falldown effect as we make the transition from old-growth forests to second-growth management. The natural falldown effect can be offset to a great extent, and in many cases more than offset by causing more trees to grow faster.

The member also says we are planning for the removal of some 25 percent of our forest land base. We are not advocating or planning that at all. What we are saying is that that is one of the realities we have to face because the forest land base has been eroded. As our population expands, as the demands on the total land base we have to work with take effect, there will be some losses. We have gone through with other land managers, other resource managers — together with our staff — and we have tried to determine what is a realistic expectation. Although we are not advocating it, we cannot — as one ministry — determine the use of all the land in British Columbia. We recognize the fact that there will be urban expansion; we recognize the fact that there will be wilderness set aside; we recognize the fact that there will be a demand for more farmland; we recognize the fact that there will be more demand for environmental protection placed upon the forest land. The forest land base we have to work with cannot possibly satisfy all these demands. We are being very realistic and looking ahead, not ignoring the fact that this erosion of the forest land base will take place.

If the member will look at the items that we have indicated as causes for the loss of forest land base, one such item is currently economically inaccessible land. We show quite a substantial reduction of the forest land base because some of that land cannot be economically harvested. You will note that after 20 years a lot of that land comes back into operation, as harvesting techniques are refined, as the value of the wood goes up, because we also recognize that there will be an increasing shortage of timber supply throughout the world and thus timber values will increase. None of these things are static. They are changing all the time. Environmental protection areas that we are allowing for will change. As we develop in technology, tools and means for harvesting on sensitive land without damaging it, perhaps some of this land can come back in. At the same time, other environmentally sensitive areas might be removed. This is a fairly objective overview of what might happen, not ignoring the realities as they exist, but recognizing them and planning for them.

The member, in his opening remarks, talked about Peter Griffiths and his representing B.C. for responsible forestry policy. Peter Griffiths pops up once in a while, and if I were to properly name his group I would call it "B.C. for Peter Griffiths policy." That gentleman has approached me and I have met with him literally dozens of times in my tenure as Minister of Forests. Everything that fellow does is designed to have me provide Peter Griffiths with wood. I told him before that we have programs to make wood available to small loggers and small operators, and he has to work into that program the same as everyone else. He has cast himself as an instant expert on all facets of forest management. I say that a person with a little bit of knowledge and interpreting that knowledge to suit his own ends can create a great many

[ Page 2735 ]

problems not only for forest management, but for the public perception of what good forest management is.

The member talked about shortages in specific areas being offset by available timber in other areas. The smaller the unit we attempt to manage, the more critical the supply and demand imbalances. We now have a timber supply area concept. A timber supply area is much larger than the old public sustained yield units. Because it is larger there is a greater variety of both species, but also a variety in terrain for logging and in the costs of providing timber. There is a greater variety in the age-class distribution of wood, so we can fill in some of the gaps in areas without a proper age-class distribution to allow other wood to fill in those gaps as those trees mature.

If we had the province as one timber supply area, it would be completely unrealistic and unmanageable, but that would give us the greatest possible flexibility in making sure that we can even the timber flow. But that is not practical. Our timber supply areas are based upon logical timber supply and haulage patterns. They take into account the species of trees used in the various areas and the transportation systems in place or planned. I think they are a fairly realistic approach to managing the flow of timber.

The Okanagan is one of our tight timber supply areas, not insomuch as the commitments of the Crown are concerned, but in the capacity of the manufacturing plants. We feel no obligation to be sure that all the capacity of all of the manufacturing plants in British Columbia is met. That cannot happen. Many plants have been built and expanded at the owner's own initiative, without any assurance of timber supply, and we cannot continually cut more timber to provide it for constantly expanding plants.

The Okanagan timber supply analysis is all but completed now. Peter Griffiths complained that he didn't have a chance to have his input. He had every chance. If he wishes, my staff will be more than willing to sit down with him and once again hear some of his theories on forest management. We have had public hearings and invited any individual in that area who wished to discuss timber supply analysis with us. We have had a lot of input. That we didn't happen to set it up to Peter Griffiths' particular liking is not a problem of ours. He has had every opportunity.... If he has additional factual information that he wishes to provide, we will listen to him — the same as we will listen to anyone — but we are not going to plan our timber supply analysis for that area to suit any one individual.

MR. KING: Mr. Chairman, I have met Peter Griffiths; I don't know him that well. I really don't think it behooves a minister in the Legislature to attack a citizen who happens to have strong views in this regard. I understand that he was an operator at one time. It may be that he does want timber: I don't know. I don't really see too much wrong with that. In fact, I think one of the general things wrong with the forest industry is that access for small people is virtually impossible. I find the minister's response very interesting.

The other day when I revealed an internal memo from MacMillan Bloedel which seemed to show that they had hidden away a very substantial parcel of timber so that it wouldn't be allocated to the small business program, the minister got up and stoutly defended them. He said there is a valid reason for MacMillan Bloedel to do this. But when it comes to an individual small operator in the province who has some critical remarks to make regarding the ministry, the minister writes him off as being just a self-interested kook. I guess that tells us something about where the minister's allegiance lies, between small operators and citizens in British Columbia as opposed to the large corporations, which enjoy a very secure supply of timber — absolute perpetual tenure. Be that as it may, I suppose that is something the people of British Columbia are going to have to look at come the next election and make their decision about whose interests this government is serving.

The minister didn't respond to my questions regarding the withdrawal of land from the forest land base. He talked vaguely about the dedication of land for other purposes. I just want to say that I certainly am not advocating single use of land in the province of British Columbia for forestry and forestry alone, but there is absolutely no reason, in my view, why forest land can't be used for grazing cattle — in a limited way at least — and for recreation, to complement fish and wildlife habitat, without being removed from the forest land base. Many of these interests can co-exist in harmony.

I find it very difficult to understand the kind of reduction in the land base for forestry which is indicated by the resource analysis. The minister hasn't come to grips with that or explained it in any way, shape or form. I think we're talking about a total reduction in the land base, from 1975 to today, of 1.8 million hectares. That's 4.4 million acres of forest land removed from production. The minister says towns are going to expand and grow. My goodness, Mr. Chairman, I haven't seen growth in any municipalities in British Columbia that would alienate 4.4 million acres of land, and I question that that kind of removal can flow from just uneconomic areas to log.

I don't know what the minister is doing, and he hasn't provided any satisfactory response. But when we look at that figure and we hear the minister say, "Okay, you practise silvicultural programs, you engage in intensive forest management, and maybe we'll increase your annual allowable cut right now," that frightens me and I think it should frighten the people of British Columbia as well. I don't know whether the minister has a firm grip on what's going on in the forest industry of this province or not; I suspect that he's being advised and doing very little to get out and acquaint himself with what's going on in the field.

[Mr. Hyndman in the chair.]

MR. LORIMER: Mr. Speaker, I don't intend to spend too much time talking about the minister's responsibilities with reference to logging in Burnaby, but I do want to ask him a few questions and discuss a few matters with him with reference to the logging practices that are taking place in the Brandywine Creek area near Whistler Mountain. The minister probably knows this Brandywine Creek area has been used extensively by schools for field trips. It's a most scenic area and there is quite widespread use of it by tourists and by local outdoors fans. This area is rather picturesque; Brandywine Creek and the north arm of the Brandywine wind through the area. I'm advised that at the present time and during the past year logging in that area has been taking place, and I'm told that in some spots that logging has taken place right up to the riverbanks.

The area was used by schools, mainly for biological work, studies in triangulation and other educational purposes — the study of streams and other matters. I am also told that the upland meadows there are being logged at the present

[ Page 2736 ]

time. The logging has taken place over the past year, and apparently there has been no effort to clean up the waste in the area; Brandywine Creek is covered with dirt being dumped or pushed into the creek; the creeks are being destroyed with the runoff from the slag at the Brandywine Mine; and roads are being built in that area with little concern about the river and about the landscape generally in this very picturesque area of the province. Actually the area is being destroyed.

I'm not suggesting that the forest crop in that particular area should not be harvested. What I am suggesting is that we must take a look at the educational and recreational values of the area and that care should be taken that all the values are looked at, not only the logging value. Logging to the riverbank cannot be construed as good practice except in certain areas where — in some cases I will agree — it may be beneficial to log what is at the riverbank, or else further damage may be caused to creeks and waterways and so on; but as a general rule I'd suggest that there should be a sufficient area between the logging operations and the creeks to protect the creeks.

I'm not suggesting that the logging operations are anything different than what has been directed by the Ministry of Forests. I'm not suggesting that the person in charge of the logging operations in those areas has been doing anything other than what he's been directed to do by the Ministry of Forests. I'm just questioning the minister as to why he allows this sort of thing to happen in an area which is a beneficial area not only to the logging scene, but also to the other items that I have mentioned: tourism, educational values and the outdoor recreational potential in that particular area.

The minister had a considerable amount of publicity directed to him with reference to last year's logging around the creeks in the Queen Charlottes, but it seems to me that nothing has really changed. This is still going on in other areas of this province.

The Brandywine is not a salmon spawning creek — we know that — but there are trout in that creek that can be caught by able fishermen, tourists and so on. It seems to me that these fish are now in a position of having to try to survive in a habitat that has been basically destroyed by the operations of the forest industry and the mining industry.

Construction of new roads to the Brandywine mine is taking place. Now I know this isn't the concern of the minister; it's not his responsibility. But I suggest it indicates a complete disregard for the rivers, the fish and the natural life that exists in a number of our parks and in sensitive areas in this province.

The logging in Callaghan valley, Cheakamus valley and the Brandywine.... The sludge that goes into the rivers and creeks in those areas ends up at Daisy Lake, which I suggest may cause long-term problems due to the dam at Daisy Lake and the silting-up of the lake over a period of time. As you know, the dam is an overhead spill and will have no facilities for looking after silting.

I'm told that in one area there's a large stand of western red cedar, Douglas fir and swamp plants. This is a special area which might well be protected and not logged at all. Those kinds of botanical happenings that occur in a few spots should maybe be protected so that studies can be made over the years to come. It's my opinion that the fact that a tree is growing does not make it necessary to cut it down. That need may be there. The value may be in logging, but there may also be values in other fields. In some cases the fish values, recreational values and the educational value may be of greater importance and of greater long-term value to the province than the sole question of the logging values. Logging can take place and, in my opinion, be compatible with the other desires that the people of this province have for any particular area.

I think the question of parkland, campsites.... There are areas for campsites in that area that could be developed. The area could be logged and cleaned up and still be compatible if it's done with care for the other requirements that may be of value to a number of people of this province. At Brandywine, I suggest, it's not too late. I suggest the logging hasn't really got into full swing at the present time, and care can still be taken if the minister wishes to take a look at that particular area and see what can be done to see that that area is not destroyed for those involved in recreation and the tourist trade and for the other people in this province who may want to use that valley and the area bounded by the Brandywine.

Getting onto another subject, I would like to state that it's my understanding that the new policy has been in some cases to have the major companies do scaling at their plants. This might be a saving initially in the cost of scaling, but I suggest to the minister that the likelihood of low scales will more than pay for a number of scalers to be put in by the Forest Service. It doesn't take too much imagination to understand that such scaling may be of a low rather than a high nature. The pressures on the scalers are such that if it's mentioned by the foreman at the lunch counter that the scales seem to be a little high, it might have some effect on the person doing the scaling. Those pressures are real. Scaling, of course, is not an exact science; it's based on measurements and allowances off or on. Scaling can vary by a small amount at least and can basically be a true scale.

In my opinion, if this policy continues or is developed in a broad manner throughout the province, the revenues from the forest industry will be greatly reduced over the years to come. I think that we expect to have payment for the logs used. What we certainly desire is a true scale.

I had information from one individual who had been a scaler for a number of years. He applied for a job with one of the forest companies, was given his test and was told that he scaled a little high. Maybe he did. Maybe it was an honest scale and he was not the type of scaler that this particular company wanted to be scaling the logs. I say that what we're doing here is probably putting a fox to babysit the henhouse. The chances of having a honest scale in such circumstances, I suggest, will not be as probable as for an honest scale made by the Forest Service. I would like the minister to tell us if he intends to carry this policy on in other areas and whether or not the time for the scaling by the Forest Service is coming to an end. The matter, it appears to me, is serious. I may, be incorrect in my assumptions, but I'm sure the minister will advise me of what he thinks about this type of scaling and whether it's going to continue.

MR. LEVI: Mr. Chairman, last week we were discussing at some length the question of stumpage rates, and the minister indicated that there will be a White Paper coming down at the end of June in which we'll have an opportunity to view a new system for arriving at stumpages. I'd like to discuss with the minister this afternoon and perhaps get some of his comments on a paper that was done in February by Professor David Haley, who is out at the faculty of forestry. He did a regional comparison of stumpage values in British

[ Page 2737 ]

Columbia and the United States Pacific Northwest. I just want to quote from the abstract and pick out some of the particular points that Professor Haley makes. He says in the abstract:

"Whether appraised stumpage in British Columbia reflects the full value of the province's timber resources is a matter of public concern. In this paper stumpages in British Columbia are compared with those in the Pacific Northwest region of the United States, where public timber is sold in highly competitive markets. In 1978 the average stumpage for public timber in the Pacific Northwest was approximately $40 a cubic meter, and receipts from the sale of public timber were $1,431 million. In British Columbia the average stumpage was $4.58 a cubic meter and the total receipts from stumpage and royalties amounted to $167 million."

We're not now dealing, I appreciate, with things that are equal. There may be a number of variables. However, what we're looking at here is a total difference of $1.25 billion of revenue between British Columbia and the Pacific Northwest. He concludes that there is little doubt that the principal reason for higher stumpages in the Pacific Northwest is that all public agencies involved in timber production encourage competitive bidding for standing timber, whereas in British Columbia competitive sales of public timber have been virtually eliminated. Other reasons include tax considerations on the part of firms in the Pacific Northwest with private timber holdings, higher average quality of the timber resource in the Pacific Northwest compared to British Columbia, and the fact that forest product companies in the Pacific Northwest face better market opportunities, particularly with respect to plywood, than their counterparts in British Columbia. Professor Haley says: "Imperfections in the Vancouver log market may partially explain why appraised timber values in western Washington are higher than those on the British Columbia coast."

The log market we've dealt with. We're looking to a White Paper that presumably will offer some other opportunity for us to do the evaluation. The minister has indicated that he wants to try to find a simplified end-value appraisal system. That's his preference. We've yet to see the White Paper so we can take a look at it.

Dr. Haley does an examination of the two situations, taking the Pacific Northwest, Oregon and Washington, and then going to the Quadra area in British Columbia. He does make an observation. I am sure that when he was writing the paper he was struggling with the business of trying to make some realistic comparisons given all the different problems, including climate and geography and the fact that there is a greater holding of land privately in Washington and Oregon than there is in Canada. He does say that the comparison of total revenue from the sale of standing timber.... I have referred to this before. He looks at some of the arguments which say that the comparisons are not valid. He says on page 8:

"It is sometimes argued that while returns from stumpage and royalty in British Columbia are modest, the public captures part of the value of the timber resource in other ways, notably through various taxes. While total tax receipts arising from the forest industry sector cannot be attributed to the timber resource itself, the interpretation of such others should be approached with caution."

[Hon. Mr. Bennett in the chair.]

I generally find, as an aside, that this is a very cautious paper anyway. He is aware of the questions he is posing. He goes on to say:

"It is of some interest to examine the total contributions of British Columbia's forest industry to public revenue. Estimates of total public revenue attributable to the forest industry in British Columbia have been made by Reed (1975) and Howard (1978).

"In 1975, the most recent year which complete data is available, total public revenue, federal and provincial, attributable to the British Columbia forest industry was $420.4 million (Howard, 1978). This includes receipts from stumpage, royalty, rents, miscellaneous fees of $56.7 million; income from provincial taxes of $158.4 million (from provincial logging tax, corporate income tax, personal income tax, corporation capital tax, social services tax, fuel tax, forest protection tax and land taxes); and federal tax receipts of $205.3 million (corporate income, personal income and excise taxes).

"In Washington and Oregon during the same year receipts from stumpage on public timber alone amounted to $782 million."

If we take the provincial and federal in British Columbia, we come up with a figure of $625 million. In those two states below the border it's some $782 million.

Perhaps the minister will make an observation with respect to the following. Haley says:

"Comparison of average stumpage prices. In 1978 the average stumpage price paid by the forest industry for public timber in Washington and Oregon was $40.38 per cubic metre, compared to $4.58 per cubic metre in British Columbia."

[Mr. Hyndman in the chair.]

Given all the difficulties of equating the British Columbia situation with the Pacific Northwest and having read the paper and discussed it with a couple of people, even with all the allowances one makes for the difference in style of logging and difference in the fact that there is greater public involvement in terms of the ownership of land, the difference of almost $36 per cubic metre of lumber is, for me, very difficult to understand. I come to the conclusion that we are very, very low and that the yield from the point of view of the government is extremely low. Presumably the minister has dealt, from time to time, with this question.

He goes on to say:

"In the Pacific Northwest average stumpage prices range from $27.10 per cubic metre in the United States national forest in eastern Washington to $50.76 per cubic metre in Washington state land in western Washington. British Columbia's average stumpage prices for 1978 ranged from $5.14 per cubic metre in Kamloops forest region to $2.37 per cubic meter in the interior section of the Prince Rupert forest region."

Mr. Chairman, the paper that Dr. Haley has done is replete with examples. He has to go very carefully. He's not, in fact, making comparisons but attempting to weigh the data in such a way that he gets as close as possible to comparing

[ Page 2738 ]

the situation. Nevertheless, there is a very serious gap, as explained by Dr. Haley, in what exists in terms of revenues in the United States and the Pacific Northwest versus what happens up here.

[Mr. Strachan in the chair.]

Without trying to anticipate what the minister's White Paper will be, presumably the kind of information Dr. Haley has come up with has to have some consideration in terms of the discussion or even, perhaps, the development of the new system for evaluation of stumpage that the minister talks about. We know that there are many comparisons made between logging operations in British Columbia and what exists in the Pacific Northwest. One would presume that because we are so close, we must make some examination. There must be some similarities between the operations, and it's important that the minister give us some understanding of whether in fact Dr. Haley's presumption that there is an extremely wide gap.... We are talking at the extreme end of almost $1.25 billion. One could say that because of the system that we use up here the taxpayer, at the very maximum, is being short-changed over $1.25 billion. However, if one has to make allowances within that $1.25 billion, how far down will we go, or in fact how far up can we go, from what appears to be a rather paltry sum compared to the United States — in B.C. $168 million versus something like $1.4 billion in the Pacific Northwest area?

No doubt when we get the White Paper we'll be able to have some very interesting debates about this. In his closing paper Dr. Haley — and I think this is what I've been attempting to say to the minister — posed a number of questions, and he accepts that there are a number of things which have not been answered. I'd just like to read the last part, because I think it puts in context some of the things that he's attempting to say and that I'm trying to interpret for him.

"There is good reason to believe that if public timber in British Columbia was sold competitively, stumpages in many cases would be bid well above their appraised level and Crown revenues would be substantially increased, particularly in those regions of the province where accessible high quality stands of timber are in short supply. One would also expect the real price of standing timber to show an upward trend over time, reflecting its increasing relative scarcity. Stumpages in British Columbia would not, of course, achieve the high levels experienced in Washington and Oregon in recent years.

"In the Pacific Northwest, as in British Columbia, public agencies appraise the value of standing timber before it's offered for sale. The appraisal method used by the United States Forest Service is similar in many respects to the method used by the British Columbia Forest Service. It has been demonstrated in this paper that appraised stumpages for the British Columbia coast are considerably lower than for western Washington. These differences cannot be explained in terms of cost differentials between the two regions and only partially explained by differences in timber quality. A possible explanation is that due to imperfections in the Vancouver logging market" — as an aside, Mr. Chairman, we've already examined that — "log prices used for stumpage appraisal purposes in coastal British Columbia consistently fail to reflect full timber values, whereas the United States Forest Service uses end-product values, lumber, veneer and chips" — this, apparently, is the system that the minister has indicated he favours as a personal choice — "as a basis for stumpage appraisals which are determined in highly competitive markets.

"The evidence presented in this paper strongly suggests that appraised stumpages in British Columbia fail to reflect the full value of the province's timber resource and that, in the absence of competitive markets for stumpage, public revenues from the production and sale of timber are much lower than they should be.

"Many questions are left unanswered which should be investigated. For example, does the British Columbia government capture a substantial part of the economic rent arising from the utilization of timber resources in ways other than through direct stumpage payments? If British Columbia fails to capture the full value of the province's timber resource, where is the excess value being distributed? That is, who are the beneficiaries of low-cost timber? If timber in British Columbia is being sold at less than its full market value, what are the implications in terms of industrial efficiency, conservation of timber resource and incentives for reforestation and more intensive resource management?"

I think that Dr. Haley raises a number of questions, particularly in view of the minister's position in respect to the reorganization of his department, the new approach within the industry, particularly by the foresters, on how to become efficient, more productivity, the whole business of husbanding the resource. Dr. Haley has thrown into the hopper an interesting question — not a new one; I appreciate that comparisons have often been made between the Pacific Northwest and British Columbia. But he's thrown in some figures. As I said earlier, even if we take the strongest argument there is an incredible discrepancy of something like $1.25 billion in terms of revenue. That is something that really needs to be explained. However, Dr. Haley does pose the question: is the return coming to the government in some other way? We know about the taxes — he's explained all that — but there is still the discrepancy in the taxes. I'd appreciate it if the minister would respond. I'm not aware if he's read the paper, and I realize that I've not covered all of it. If he wants a copy of it I'll certainly make it available to him.

Perhaps we might start with the question of the very broad difference — dramatic difference — in revenues: some $165 million versus $1.4 billion. That's approximately a billion and a quarter dollars difference in an industry which is not that dramatically different, although there are all sorts of natural problems in terms of geography, accessibility, and the sophisticated nature of some of the techniques that are being used.

I'd like the minister to answer, because I don't know if my colleague is going on to another area.

HON. MR. WATERLAND: I've got notes on it.

MR. LEVI: You've got notes on it, have you? Okay.

MRS. WALLACE: The problem with this is that by the

[ Page 2739 ]

time the minister gets around to answering these great series of questions from a number of members, it's difficult to know whether or not all the answers have been given. However, if this is the way he wants to proceed, I've no choice but to go on.

HON. MR. McCLELLAND: You can sit down.

MRS. WALLACE: Thank you, Mr. Minister of Energy. I'll sit down when I'm ready. I have just as much right to speak in this House as any other member, and I resent those kinds of remarks coming from that minister.

I, of course, have a very definite interest in this particular debate, because our particular community of Cowichan-Malahat is basically a one-industry community, as the minister well knows. We are geared 90 percent into the forest industry, both logging and manufacturing. So I have some very grave concerns and some very sincere interests in the forest industry, and in what happens in the forest industry related to government programs and the responsibilities of this minister.

I'm certainly not alone in this. I have in my hand here a recent release — May 15 — from the Duncan-Cowichan Chamber of Commerce, where they are talking about the high U.S. interest rates and lack of new housing starts, and the weak market for Canadian lumber, which is being felt by the lumber workers in the Cowichan Valley. They are talking about the high domestic interest rates coupled with a feeling of uncertainty in the lumber industry, which is reflected locally in sagging sales of big-ticket items, in the local stress, reduced consumer loan demand and a lower level of new mortgage registration. Realtors report that most house sales are cash, with assumption of lower-interest, existing mortgages, and the supply is very limited. There is very little speculative housing, and so on. Then it goes on to say that the provincial government has also reduced expectations for the forest industry in 1980 with a forecast revenue decrease of $257.5 million, or 46.9 percent. I'm just reading that into the record, Mr. Chairman, to indicate the concern of people like the chamber of commerce in a community which is so geared to the forest industry, because we do have some very grave concerns.

Of course, in that particular area of Cowichan-Malahat — the forest area there — most of our logging interests are in the control of the majors. It's generally the majors that are involved in that area. I suppose my concerns stem from some of the information that has been brought to this House earlier in the debate, and in other debates, as to what really happens with this ministry and the majors.

I've listened with a great deal of interest to the debate on the setting of stumpage rates. I've listened to my colleague from Shuswap-Revelstoke (Mr. King), who has read into the record the variances that seem to occur in those stumpage rates. The last speaker, of course, spoke of the differences between here and the Pacific Northwest of our neighbour to the south. My concern about this has led me to review somewhat the methods of setting those stumpage rates. Certainly it would appear that they are basically set by two estimates: first, an estimate which is the grade of the logs, the amount of timber, the species and the market — based on the market value; and from that is deducted another estimate, which is the cost to produce those logs. The difference is something which, I believe, is called conversion return — I'm not that familiar with the forestry terms. Twenty percent of that difference is then calculated as the company's share and the balance is the stumpage. That may be a good system, but it's only as good as the estimates are accurate.

It reminds me somewhat, Mr. Chairman, of the person who pays income tax — the worker who has income tax deducted from his cheque. That income tax is deducted on the basis of an estimate of what his earnings will be for that year. less an estimate of what his deductions will be for that year., but there the similarity ends, Mr. Chairman. Because while that deduction is made based on an estimate, the final decision is made based on an income tax return which is filed and sworn to as being the actual fact. That's where the similarity ends, because that is not the case with the stumpage charges with the forest industry.

There are no checks on those estimates. They may be right; they may be wrong. There is a provision for appeal, as certainly the minister is aware, under section 154. I believe it is, of the Forest Act, but that appeal is only available if, in fact, the company decides that they're being overcharged. At that point in time there is a three-stage appeal, and I'm wondering whether or not any of those appeals have ever reached the third stage, wherein the minister sets up a board to review the appeal. I doubt that any of them have ever reached that stage. because I would suggest, Mr. Chairman, that those appeals are covered at the local level and never go any further.

There is never any requirement to make any public in formation available as to how the cost of production is arrived at — the cost of getting those logs off the stump and into the market. There is no evidence ever produced as to how that estimate is arrived at, unless, in fact, there is an appeal. If, in fact, that estimate has been too high, with too big a chunk of money coming off the market value, there is never any appeal: there is never any second check; there is never any audit. I would suggest, Mr. Chairman, that this particular method of handling our Stumpage return — the taxpayers' return for our resource — certainly should be subject to some kind of an audit. I would think that our auditor-general, who has had a look at some of the billing practices of this ministry and has got some results, should also be having a look at how the stumpage is actually calculated.

Unless there is a system of checks and balances, we are putting those appraisers in a very untenable position. They're subject to lobbying; they're subject to pressures — the kind of thing that my colleague for Burnaby-Willingdon (Mr. Lorimer) was talking about with the scaling in the mills. They're subject to the same kind of pressures, only many times greater, I would suggest, in the forest industry when the stumpage is being calculated. Those pressures are there, and we are putting those appraisers into an untenable position. I think that it's their right to have an audit, to have checks and balances. We're talking about the most important industry in this province, Mr. Chairman, and we're talking about a lot of taxpayers' dollars in return for our resource. Without any audit system in place, certainly it is subject to question.

[Mr. Davidson in the chair.]

When I checked some of the tally sheets which are made up by those appraisers and found that coastal cedar is being classed as grade number 3, and when I'm told that that is not the typical situation with coastal cedar — and yet some of

[ Page 2740 ]

those reports are ranging from 40 to 100 percent grade 3 — I have some concerns. Now maybe I'm wrong — I hope I'm wrong — but it isn't right to leave those kinds of questions with no audit, no checks, nothing to assure that not only the people who are expecting the return from that revenue, but the people who are doing the appraisals, are protected from any undue pressure. That has to come about, Mr. Chairman, if we are to have an open-book policy on this business of stumpage; it certainly isn't there at the present time.

I would like to deal just briefly with the report that the minister has recently put out. Again, while I think we can all agree that we're long overdue for some kind of intensive forest management program, I think we should have a good look at what the objectives of such a program should be.

It has been stated by authorities that are far more knowledgeable about the forest industry than I that in order to justify a program of tree planting and manipulation of existing wild stands — that is all the juvenile spacing, commercial thinning, fertilizing and all those things that go on — you must be able to increase the current allowable cuts in line with the yields from those commercial thinnings and the intensive utilization of smaller trees as well, and you must ensure that you retain this increased revenue in the forest system and plough it back, as it were, into your intensive forestry programs.

Those are the statements that I have read from various people that are authorities in the forest industry, who indicate that those must be the criteria that are set in establishing any forest management program. The report that the minister brings down doesn't seem to meet those criteria. He's talking about dwindling old growth and second growth being only about two thirds of the present harvest. Of course, he does talk about the intensive management programs, but the thing that bothers me is that he's talking about curtailing the annual allowable cut, which will cut back on the gross revenue that will be coming back into the system. In addition to that, he's turning more and more of that revenue, from whatever source, over to the private sector. My understanding of many of the tenures under which the private sector presently holds that forest land is that there is a contractual obligation to renew the forest as it is removed, and that hasn't been happening. Now we're going to give them more funding to do what they're already obliged by contract to do.

So what I'm saying is that, certainly as I read the minister's proposals, we're not going to be in a position of expanding our forest industry, but rather we're going to be in a position over the next few years of curtailing that forest industry. Of course, those are the concerns that are facing the people in my constituency — the chamber of commerce, the local trade unions and the citizens generally — who are concerned about this phasing down, because the program that the minister is bringing in does not seem to meet the criteria of building up.

One of the things that I would like to have seen in the report would be an inclusion of a modernization of the industry to utilize the type of product that will be available as a result of the intensified forest management. I'm talking about the thinning, for example. I have a letter from a constituent that talks about Gordon River area. This would be juvenile spacing. It must be, because the timber is being left there. This constituent tells me that they are cutting down trees up to a foot in diameter in that particular area and simply leaving them there. I know that the forestry officials would — or at least I would hope that they would — be checking those kinds of things, but I know that they are very limited for staffing and perhaps those methods, with the best of intentions, are getting a little out of hand if we're leaving that kind of waste timber just lying on the forest floor.

Look at the logs that are wasted in the form of driftwood on the beaches — and I understand that something like 10 percent of the marketable timber that is floated in the water is lost — which could be utilized for chipping and pulp and paper. Think about the trees that are left on the forest floor, as in the instance of Gordon River, where trees as much as 12 inches in diameter are simply left lying there, creating, incidentally, a terrific fire hazard once they're dead, which is another great loss of our resource, of course. Consider that and realize that on the coastal area, which is the area with which I am most familiar, there are 14 pulpmills, I think, and out of those 14 there is only one that is designed specifically to use just chips. There are five that are designed only to use good logs, and the other eight are for varying ranges of that kind of use, but there is only one that can use just chips. What I'm suggesting to the minister is that hand in hand with his intensive forestry program.... "Intensive" to me means complete usage of our forest products. Certainly, then, we should be looking in the direction to see that our pulping facilities are such that we can use that waste product and not use good logs in the production of pulp and paper.

Last year in the House I raised this matter in connection with Rayonier. In fact, I had some rather interesting correspondence with Rayonier as a result of those remarks I raised on the floor.

I have been through the B.C. Forest Products mill at Crofton, where they're feeding logs cut in four-foot lengths into the chippers that are much better quality than the logs I have seen in the Chemainus sawmill or the W.F.I. sawmill. Those few places, and particularly W.F.I., seem to be bereft of good logs, for some reason or other. Of course, I've talked to the minister about that. We know some of the problems that are facing that industry. But when you see those logs cut in four-foot lengths and fed up that endless chain into the chipper, you realize that we are not making the most intensive use of our forest resource.

When I get a newsletter from the MacMillan Bloedel sawmills at Chemainus and Harmac, dealing with Harmac, in fact, talking about the shutdown there.... Because of the severely depressed North American market, MacMillan Bloedel is suspending lumber production in its No. 3 wood room at Harmac for an indefinite period, effective the last two months but it may be longer. It says: "The majority of the 130 wood room No. 3 employees affected will be employed in vacation relief elsewhere in the pulpmill and the lumber complex. The main impact will be that our summer hiring will be sharply reduced." Then it goes on: "Wood room No. 3 normally operates four shifts, three producing lumber and one producing chips for Harmac pulpmill. Beginning May 18 it will run four chipping shifts." That's an admirable move so far as ensuring that the employees are kept working, but I would suggest that what's happening there is that the logs that would normally have been used for sawlogs are going to be put through the chipper to keep that extra shift operating. That's not the best or most intensive use of our forest resource.

It's estimated that the five pulpmills in the coastal area which use nothing but logs use something like one million cunits annually — that's hemlock and balsam. That represents approximately 20 percent of our total coastal hemlock

[ Page 2741 ]

and balsam harvest. What I'm saying to the minister is that that is not only not good use of our resource, but it is also not the most economic use nor is it the most labour-intensive use. Certainly the production of plywood and lumber has more far-reaching economic and employment benefits than does the production of pulp and paper. Our logs should be going into the highest use in order to ensure that we have the resource to keep the industry in operation. You can't have an intensive forest program that only deals with reforestation, juvenile spacing, commercial thinning, fertilizing and all those kinds of things without coupling with that a use of that waste wood and a change in the industrial sector to the point where they can make the best possible use of our resource. We have the technology, but it hasn't been applied and it isn't being applied; there's nothing in this report that will lead to that happening.

There have been many questions about the amount of money set aside for the reforestation program. Many of those questions raised indicated that we may not be able, because of our lack of future planning during the last few years, to actually make the best use of even the meagre amount of money that has been set over. We do not have the trained foresters. We haven't done the research. We have limited our capability of expanding at the rate at which we should be expanding by falling behind in the research that should have been undertaken during the past several years. It is interesting to note that of the nearly $4 million spent last year in the research branch, less than $1 million was spent on tree improvement and only three-quarters of a million on silviculture. There are only 38 people employed in that particular research branch.

Supposedly we've been having a very extensive reforestation program going on in the last few years. The minister has been telling us how he's been beefing it up. But in looking at the figures for the coastal area — the summary of plantings — again they have been going down. There were fewer trees planted in 1979 and 1978 than were planted in 1976 and 1977. In fact, the highest planting took place in the year 1973, and we've never yet reached the number planted in that particular year.

I'm not suggesting that the minister and his employees are not trying to do this. What I am suggesting is that we're perhaps trying to jump in the middle of a problem instead of starting at the beginning. When we've been as slow as we have been in getting the research facilities in place and providing the funding for those kinds of programs that would have enabled us to go ahead at this point, we are perhaps throwing good money after bad, if we can simply go out and plant trees for the sake of planting trees or carry on certain programs just for the sake of carrying on those programs. To do a good and adequate job in the long haul — we are talking about 50 and 80 years in the future — we must be sure that the trees we are planting are the right trees in the right place and that they are treated in the right way. I am not at all confident that sufficient research has gone into this to put us in the position to significantly increase our reforestation program and our intensive forest management at this point in time. I think we have to start with that research and build up a good sound basis for this.

The fact that of the $10 million voted for special reforestation programs last year less than one-tenth was spent, according to my last reading of Public Accounts, indicates just that. We are not in a position to move as quickly as we should be moving. In order to get around that hurdle we must get at the real root of the problem and build up that research, the nursery stock, all the kinds of things the Forest Service has been trying to work at and needs more funding for. We must get more people into the forest faculties at universities and into community training programs for foresters, so they can do the job adequately and build up to a level where we will be able to continue and introduce an adequate reforestation program.

I want to talk just briefly about the rangeland situation, while I'm on my feet. I'm sure the minister is aware of some of the problems that have been occurring in the changeover from leases to permits and licences. I know when I travel around this province and talk to ranchers in various areas they are continually expressing concerns to me about this. Their concerns are, granted, somewhat vague. I think it's a natural concern that people have about change. But one of the specific concerns they have raised is that under the permits and licences they are simply renting the grass, as it were, and there is no sort of assurance that the land is under their control. This is part and parcel of the fact that we have so many ministries involved in this particular rangeland administration. The Minister of Forests, of course, has been made the chief administrator, but coupled with this we have the Minister of Lands, Parks and Housing (Hon. Mr. Chabot), who is involved with land; we have, of course, the Minister of Agriculture (Hon. Mr. Hewitt); we have the Fish and Wildlife who are involved with the wildlife; and we have forestry. I know that there will always be conflicts, and the multiple-use concept is one that is going to take a lot of work and effort. But I would urge the minister to do his best to ensure that the interests of all those people are involved.

I guess, perhaps, I have the kind of natural concern that seems to usually place the agriculturalist on the bottom of the totem pole in any of these controversies. I do have some concerns about the ranchers and just how well their interests are being served by the foresters who are administering this program. I think it's mostly lack of understanding, and at some of the meetings I've been at, it seemed that even some of the people in the ministry were not quite sure of the direction they were going. I believe the program does need some further attention by the minister.

I was interested in the figures on the grazing. Of course, this is where some of the....

MR. CHAIRMAN: Hon. member, I wonder if I could draw your attention to the red light.

MRS. WALLACE: I'm sorry, yes.

MR. NICOLSON: I'd like to bring to the attention of the minister something that has been mentioned by the member for Shuswap-Revelstoke (Mr. King) — the disappointment in terms of the lack of ongoing communication with the communities that have been affected by the Ministry of Forests' reorganization. I know that on the employees' side it culminated in a work stoppage in various parts of the province a few days ago.

One of the other concerns is that it was not handled well in terms of keeping in touch with people in the community. It seemed only after rumours started flying around and after municipal councils got very concerned and wrote letters that any kind of response was forthcoming. I must say that at the local field level that response was fairly good. When local field people were asked to come and speak with village

[ Page 2742 ]

councils in places like Kaslo, there was a good response. But frankly I'm quite concerned that while the minister will argue that they have decentralized so that decisions that would formerly have been made in Victoria are made in the local district areas, I would say that many of the decisions which were formerly made closer to the field are also going to be centralized a little further back in the regional offices.

I would like an assurance from this minister as to whether any kind of a follow-up to this massive reorganization is being written up in a very candid and honest manner in order to prevent a repetition of some of the shortcomings of this reorganization. I will look forward, for instance, to the fact that in this reorganization positions have been created that were missing previously — things like the lack of hydrologists. I know as well that in the industry new positions are being created that are more sensitive to the needs of sophisticated forest management. But I would like to ask the minister if there is going to be a really good, candid post-mortem of the reorganization in order to look at how many things could have been communicated in a better manner, both with employees and with affected communities.

MS. SANFORD: I have a few brief questions for the minister relating to an issue which has developed within my own constituency along the Little Qualicum River, where logging took place. While the federal fisheries people were involved, because the logging operation was on private land, the provincial government had no say whatsoever in terms of the protection of the stream or the river itself, nor does it have any say with respect to anything else that the logging companies undertake when it is land held in fee simple.

[Mr. Nicolson in the chair.]

I'm somewhat concerned about this and I'm wondering if the minister has considered at all somehow ensuring that regulations that apply throughout the province, whether they relate to wildlife or fisheries — and I appreciate the federal fisheries have some say in this — apply to logging operations on privately held land.

In the states of Washington and Oregon most of the forests are privately owned, contrary to the situation in British Columbia. In those states, it is my understanding that the forest companies are required to ensure that whatever wildlife is there is protected, that the fish habitat is protected, that the interests of those who wish to participate in recreational activities are in fact considered, even though most of the forests in those two states are owned outright.

Now on Vancouver Island, because of the E&N land grant, much of the forest is held in private hands; and the Minister of Forests and the Minister of Environment (Hon. Mr. Rogers) — people involved with fish and wildlife — in fact have no say as to what happens in the logging operations on those privately held lands. Mr. Chairman, we've had very recently on Vancouver Island an outcry from people living along the E&N Railway because of the spray that the E&N applied — the herbicide spray along their right-of-way. Because it is privately held land, there is absolutely no necessity for the company to make application to the pollution control branch or to the committee responsible for issuing permits on the spray of herbicides; they can just go ahead and apply the spray. The same thing applies to the logging companies on privately held land. It seems to me that where companies are required to at least go through the motions of making applications for sprays — whether it be for herbicides or pesticides — then, obviously, they have a different set of rules under which to live than those who are operating their logging operations on other tenure, such as tree-farm licences. Residents along that E&N were shocked and angry that because it's privately held land, the company was able to go ahead and apply the herbicide without even notifying anybody.

I am wondering, Mr. Chairman, whether or not the minister has thought about implementing any regulations or in any way adopting the procedures that are used in Washington and Oregon to ensure that the various aspects of fish and wildlife protection and the use of sprays are in fact under the scrutiny and control of the provincial government, even though the logging operations are on private land.

I have one other very brief question, Mr. Chairman. I understand that the Ministry of Forests, in conjunction with the Ministry of Environment, is currently looking at a proposal which would utilize the sludge from various sewage facilities for application on seedlings — in other words, to be applied in the nurseries where various companies and the ministry itself are involved in raising seedlings for reforestation programs. Is the minister familiar with this program, and could he give me some information as to how far along the research is and what sort of success they are having in utilizing this sludge?

HON. MR. WATERLAND: Mr. Chairman, my list is getting a bit long; I should respond to some of the points that have been raised.

First, as far as using sludge from sewage treatment plants for nurseries is concerned, we are doing some work in the Vernon area. As the member is probably aware, we are establishing a research and nursery area near Vernon; we are working there and probably in some other areas. I understand our nursery in Prince George is quite handy to a sewage treatment plant as well, and we are working along these lines. I can't give the member any detail as to just where we are; but if she wishes, I could certainly get an update on the program for her and advise her later.

As far as logging on private lands is concerned, the only time when we really have input is when the land has received a tree-farm taxation status providing a special land taxation rate, for the return to the government of planning a forest and having their plans approved by my ministry; at that point we do have some control as to what happens. We consider anything to do with forest practices on private land. I haven't thought of anything in the way of legislation, but we are at the present time trying to develop an extension service to private landowners to help them in better management of private land; that's in the very early stages. I think there are a lot of areas where we can improve the management of, and perhaps the yield from, private land by having people better informed as to what they should and should not do, and at the same time provide better protection for the environment.

The member for Cowichan-Malahat (Mrs. Wallace), before she had to give up her place, was just into the range licensing program. I have met extensively with ranchers around the province. There is some concern in their minds, as we're going through this change from the grazing-lease program to a grazing licence — from a permit to a licence. I have done everything I can so far, but will continue to try to explain to them what the objective is. And the objective is to provide the rancher with a much more secure form of tenure

[ Page 2743 ]

over the areas in which he has grazing authority. However, you really have to deal with each rancher on an individual basis because their conditions and circumstances are so different. I think it has helped, and will help, to have more of the grazing management and tenure for grazing under one ministry, which will be the Ministry of Forests. The Ministry of Agriculture, of course, will still be involved in agricultural leases. These leases are used, to some extent, for the raising of forage.

The objective of it is to provide a secure licence — I believe the term is ten years — which is renewable prior to expiry. It's an evergreen form. The criterion for renewal of it is simply compliance with the management program and proper management of the range. This is in the interest of most ranchers and the government as well. We can increase the forage and the number of cattle that can be raised in British Columbia with better range management.

We are cooperating with the Ministry of Agriculture in joint agreements with the federal government in range improvement programs. None of them are without some difficulties, but I think we're moving in the right direction.

I would say again that the objection of the range licensing program is to provide secure tenure for ranchers so they know where they're going, rather than the old year-to-year permit system which really left them without something that's bankable. They can assure their bankers that they will have ongoing range privileges. I think it'll be in their best interests in the long run.

The member for Cowichan-Malahat was into several other areas as well, if I can get back to her. She started with the concern of the chamber of commerce in the Cowichan area regarding layoffs in the forest industry. Her concerns are somewhat at odds with factors brought up by the member for Maillardville-Coquitlam (Mr. Levi) when he was talking extensively about stumpage rates and so on. I'll get into his comments on stumpage later. But one of the things that happens when you have these very high stumpage rates.... In the United States they can adjust to it because their economy is so much more diversified. Because the rates are so high, at the least fall in the market the operators are forced to either discontinue manufacturing or discontinue manufacturing and logging. Quite often what they do to carry on their business is log for export because there are wide open log exports permitted there and exports generally bring very high prices. In British Columbia we have, I think, a much more stable system of stumpage which tends to get around the massive layoffs. They have literally tens of thousands of people out of work there, and I think a lot of it can be traced back to the very high cost of their raw material. Stumpage in British Columbia, I think, allows for that, because when the prices are low the stumpage goes down. Operators can stay in business for a much longer period of time.

I can't do anything about the recent high interest rates in the United States and Canada. They have come down substantially, and I hope that will have the effect of increasing our markets in the United States and particularly Canada. Of course, when those markets drop off most operators then start selling into the foreign markets, which become overcrowded, and their markets generally fall off at a later time.

We are concerned about employment disruption, particularly for the small loggers, because they have the most difficult time. They're selling into a log market, and that is the reason that stumpage is critical for the market logger particularly. I've made adjustments recently in the stumpage charges to market loggers when I reduced to them to their own system. As of the first of this month, or yesterday, I guess, we will be putting market loggers on minimum stumpage on the coast and in the interior. This is as far as we can go; we can't go below minimums. This will take place as of today, I guess, being the first Monday after the first of the month. So that will be a break for the market loggers and will help some of them to continue logging.

The member also talked about using firm logs for chipping. I can't advocate that, but there is quite a gradation in logs. What they're best used for is determined, to a certain extent, by market conditions. Some of the higher-grade pulp logs can make lumber in good market conditions, but it doesn't make much sense to me to force those high-grade pulp logs to be manufactured into lumber if you can't sell the lumber. Putting them into pulp at least keeps the pulp industry going and it does provide employment both in pulp manufacturing and in logging. And pulp is a high-value product. Everyone says that it's a waste in material, but it's a high-value product. Admittedly, a lot of the value of it is in very highly automated plants, but it's a very great revenue earner for British Columbia and Canada on the export market. We shouldn't do things on a short term that will discourage that industry, because, fortunately, right now the two industries.... The pulp and paper sector is out of phase with the plywood and lumber, and one tends to support the other. It provides some stability.

The member again went into the billing practices of the ministry, which I dealt with at great length a few days ago. I'll say again that our unbilled accounts have gone from over $88 million a year ago down to about $13 million now. I think it's in reasonably good shape.

The member also talked about revenue from the sale of commercial thinnings going back into our stand-tending work. I would very much like to see that happen as well. However, every dollar that is spent by my ministry — I should say invested by my ministry — in the forest has to be accounted for to the auditor-general. It goes back into general revenue and we have to assure the government that the money will be well spent as we get it reallocated for ongoing forest management work.

The member talked about giving the industry more money to do those things they are already obliged to do. The industry, under the licensing provisions we have, does have obligations to comply with in forestry work such as post-harvesting site preparation and planting. These things are required by the licences. but they are offset as a cost in the stumpage appraisal system. There's only so much value in that log, and all the costs that lead to the extraction of the lumber value are paid for by the value of the log. It comes as an offset against stumpage. but they must do it to keep their licences in good standing. Any expenditures above that must be budgeted again through section 88 and accounted for by us. So it's work above and beyond what is normally required by their licence that we budget for in these other areas.

The member for Maillardville-Coquitlam spoke extensively about David Haley's report on comparing stumpage in the United States Pacific Northwest to British Columbia. He had some difficulty in explaining it and he mentioned, and I agree, that Mr. Haley had some difficulty in trying to make the comparison, because you really can't. The terms of the licences, value of the wood, and things that the government pays for after receiving their stumpage are so different that

[ Page 2744 ]

any simple comparison is really meaningless, because if you extract all of the variances you come up with things that you can't really compare at all.

One of the factors is the quality of the wood. In many of our sites in British Columbia we're into old, decadent stands and the wood quality is very low; therefore the value is not such that will attract a very high stumpage. Some of our higher-valued stands attract to us just as much stumpage per cubic metre or cunit of wood as is received in the United States. The taxation structure is different. Capital gains allowed by evaluating timber stands are based to a large extent upon the value of a log sold. So companies will bid up Crown or federal government timber in order to appreciate the value of their stands. They have a wide-open log export policy there, which again attracts higher values — things which we wouldn't like to have here. Also, the forest industry there is subject to tremendous changes in employment levels. The layoffs in the northwestern states now are probably ten times, at least — perhaps 20 times — what they are here. Communities aren't dependent upon single industries to the extent they are in British Columbia, and as our stumpage goes down operators and manufacturers can continue.

Last year, for example, our direct stumpage revenue was over $550 million, because we had very buoyant markets and our stumpage appraisal system extracts those values. The end-valued system I also favour for the coast, even though it would be a much more complex system. It seems that whenever my estimates come up we have, all of a sudden, a rash of instant experts on stumpage, where everyone is bringing up good points, most of which have been looked at and many of which do require, perhaps, some change. Again, that is why you'll have every opportunity to make definite recommendations when you receive your White Paper. I'm sure then you'll realize some of the complexities of the system.

The member for Burnaby-Willingdon (Mr. Lorimer) was talking about the Brandywine Falls area. That was gone into to some extent by the member for Burnaby-Edmonds (Ms. Brown) several days ago. I haven't been to Brandywine Falls area myself for almost 35 years, but I do remember it well as a young fellow. I used to camp there with my brother. However, again there's some contradiction. The member suggests that there are certain areas that should be set aside — he was mentioning some of the yellow cedar stands. At the same time the member for Shuswap-Revelstoke (Mr. King) was asking: "Why are you alienating forest land?" Well, this is exactly the type of trade-off that we, as a ministry, have to make. Every area where a cutting permit is issued is somebody's favourite fishing hole or campsite. We have to try to practise multi-use on a land base so that we have our forestry activity and recreational possibilities as well. I don't know if the member has actually been to Brandywine Creek lately, but he talks about mud, slash and so on in the creeks. I certainly hope that isn't happening, because our people have very definite prescriptions they must use, and there are certain areas they must leave between harvesting sites and the creeks. At times it is in the best interests of both the forest and the creek or river to log right to its shores, but prescription is site-specific and I hope that they are not allowing damage to occur which isn't necessary.

[Mr. Strachan in the chair.]

The member mentioned also — this is very interesting — I guess the report I had commissioned on scaling of Crown timber. He says that government employees should do the scaling. That is the case now, and except for a few exceptions provided for in the Forest Act, all Crown wood is scaled by government-employed scalers. The member, I am sure, is not implying that non-government scalers cannot be trusted, but that certain pressures will be brought upon them to perhaps be a little less accurate, to scale low rather than high. This is the discussion I am having right now. The Minister of Labour and I are both involved, because it arises from a labour problem at Sarita River in the Alberni area where the IWA felt they should be doing the scaling because they were having some of their people displaced by the move toward dry-land sorting.

My position right now is that I think government scalers should scale for Crown revenue. I am in complete disagreement with the IWA on that. I see the member nodding; he is apparently in disagreement with the IWA on that as well. I have commissioned a consultant, the gentleman who worked with Dr. Pearse's royal commission hearings, to act as legal counsel for the forest policy advisory committee — a very good background in scaling matters. He held discussions with various sectors of the industry and recommended that we make a move away from government people scaling the wood. The final decision is not made on that yet, but I would say here and now that I would be very reluctant to see that happen, because I think the scaling should be done by government employees. I am sure that member will help me when Jack Munro comes back screaming if we don't do what he wants us to do.

I believe that covers most of the points that were raised. I understand the member for Cowichan-Malahat hadn't finished. I believe I have covered most of the things she raised in her discussion.

MRS. WALLACE: Thanks to the minister for his responses. He keeps good notes. The one point he did miss, as far as I'm concerned — this may have been discussed at some time when I wasn't in the House — is that he did indicate that the stumpage rate had been dealt with, and he mentioned that the outstanding billings have now been reduced from $80 million to $13 million or something. That was not really the point that I was basically concerned with.

What I am asking the minister to do is to establish some system of auditing the estimates that are made in establishing the stumpage rate, the estimate of the market return to the logger and the estimate of the cost of production. I think that certainly there is some public knowledge, or it is available, as to how the estimate of the market value is obtained, but for the cost of production there is absolutely nothing except a figure, unless there is an appeal. The only appeals are when the company thinks it's over-charged; there are no appeals if the company is under-charged. I would ask the minister to establish some system of audit, because we are talking about the major resource in this province and we're talking about the return to the citizens of this province from that resource when we're setting the stumpage.

I have been dealing with rangeland. I am sorry to be so long on this, but I doubt I have very much left. I mentioned the leases and the permits and licences. The minister has indicated that he feels this will give a greater degree of security of tenure. Year-wise that is good, and I congratulate the minister for moving in that direction, to extend the term. But I do have some concerns about where the Lands ministry

[ Page 2745 ]

fits into this. If, for example, the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) decides he wants to do something else with that Crown land, what kind of liaison and security is there with the Minister of Forests related to the Minister of Lands, Parks and Housing to ensure that if a rancher goes out and makes improvements to those lands they will be there for a sufficient length of time so he can get his return?

One of the things that brought this point to my attention is some orders-in-council that came out in March of this year: some four orders-in-council issued by the Minister of Lands, Parks and Housing covering grazing leases, and numbered 715 to 718 inclusive. I review orders-in-council fairly regularly, and those are the only such orders-in-council that I have seen — a renewal of grazing lease by order-in-council. These were in the Hazelton district, I think it was. I don't have them here. It was the coast district anyway. It seemed a rather unusual way of renewing grazing leases. If that's the way they're always renewed then I stand to be corrected; but if I'm not wrong I wonder why the Minister of Lands, Parks and Housing took it upon himself to renew those four grazing leases. If the minister can give me any enlightenment on that, I would appreciate it.

The other thing I was just about to mention when the red light came on was the acreage — or the "hectareage" — of rangeland. I notice that it has gone up something like a million acres in the last four years. The animal units have gone up. The animal units per month per hectare seem to be fairly constant at 10, 11, 12 animal units per month per hectare. So that would indicate that at least the rangeland is holding its own, although I notice that the amount of hay being grown, which is included in this total, is going down. I wonder what the explanation is for that. Why are we not putting up as much hay as we have previously on those rangelands?

I think the biggest question of all that occurs to me in looking at these figures is that while the number of animals is going up and the number of hectares is going up, the number of operators is going down. This indicates that rangeland is obviously being concentrated in the hands of fewer people. I'm wondering if the minister has any explanation of why that is happening, Those were all the remarks I had about rangeland.

I do have one very small and very personal criticism. I guess it bothers me every time I go over the Malahat: the new forest fire signs. They are a terrible colour — just awful.

Interjection.

MRS. WALLACE: Yes. Perhaps that's the reason, Mr. Minister of Finance (Hon. Mr. Curtis). Perhaps because it's such a terrible colour it will attract attention — and it does. But it is such a long message and the writing is so small that at 80 kilometres you can't read it.

I think we have a good record of signs with our "Fire kills!" and the things we have had.

Interjection.

MRS. WALLACE: No, I said 80 kilometres, Mr. Minister of Finance. Those signs really do bother me. Perhaps they attract attention, but they certainly don't blend in with the landscape. The colour doesn't seem to relate to anything to do with forest fires; it's more related to orchids in Hawaii or something. It has no relation to forest fires or green forest or anything else. In particular, the message is too long and not strong enough, in my opinion. I've never quite been able to pick it all up, but it's sort of "Please take care of our forests." It doesn't seem to have the punch the old signs had about "Fire kills!''

I have a local case which I have discussed with your chief forester, Mr. Minister. I had hoped that he would get back to me, but inasmuch as I haven't had a response I feel obliged to raise it today. Again it's part of a problem you were speaking about with the member for Burnaby-Willingdon concerning the park areas, and with other people who are concerned about the reduction in forest acreage. As you know, Mr. Minister, we do have a lot of weed trees in that area which are being clearcut at the present time, and this is being done under contract. Some of the results of those contract cuttings are rather disastrous. They are in the area — you may know it — of Cottonwood Creek, which is a park reserve, I think, although it hasn't actually been made into a park facility at this point. There are a lot of treetops and debris in Cottonwood Creek — which is a fish-spawning channel, incidentally — and also at Heather Park, which is on the shores of Lake Cowichan. Treetops have been left.

When I checked with the local people involved, they told me this was all going to be cut up for firewood. I guess what has happened is that Boy Scout troops and so on are going in and doing this — and that's commendable — but the debris is still there. There are some beaches that you just can't get to. If we're setting up those parks to attract tourists, certainly we're going to need all the tourist industries we can attract into that area. It's not really very conducive to that industry to have those kinds of messy logging operations taking place in an area that is a park resort.

Of even more particular concern to the people who live in Youbou and Lake Cowichan is the understanding they have that the area adjacent to the village of Youbou and along the lakeshore is going to be denuded in this clearcutting operation. What they are asking is that some degree of tree cover be left in the areas visible from the highway and around Cottonwood Creek and Heather Park and so on, so that you will have that bit of green protection that still makes it attractive to the tourist industry. As I said, I have talked to your chief forester about this, and he promised to look into it. That was some time ago, and I haven't had a response as yet. So I felt that I must raise it today.

The final thing that I want to talk about.... Again, this relates to billing. You have indicated that the billing has caught up with the outstanding bills. This is a bill from a small logging company in my area, Bradshaw Logging. They have written to the B.C. Forest Service, with a copy to you, Mr. Minister, and a copy to me, on February 21 this year. Their complaint is that their actual operations took place in May and they didn't receive any statements for payment until October. "During the month of November we began receiving scale and royalty accounts dating back as far as May. However, there are still well over 150 loads of wood which we have delivered to mill since last October for which we have not received any statements of scale and royalty accounts." They go on to say that they have to meet their payroll, and pay compensation, various taxes, fuel, repairs and maintenance.

The seemingly unnecessary delays are causing them some very severe problems in the operation of their small logging industry. We do have a few small loggers in

[ Page 2746 ]

Cowichan-Malahat and I want to keep them there. I'm concerned that this kind of delay in getting these accounts processed is really causing a hardship, particularly on these small operators.

Those are the points that I wanted to raise, Mr. Minister.

HON. MR. WATERLAND: I will cover those points. I'm afraid I don't know the particular circumstances of Bradshaw Logging. It's not very often that we have people complain because they haven't received a bill. However, I can understand the management problems it presents to the operator. I know my assistant deputy minister in charge of our finance department has made a note. I'm sure this gentleman will be getting a bill very quickly.

I don't know the circumstances of the problem at Cottonwood Creek which you discussed with the chief forester, Madam Member. I will remind the chief forester that he should get back to you. He is probably trying to accumulate the necessary information to be thorough in his answer.

On the audit of our stumpage calculations, we do very close internal checks. People in the field do not have a free hand, and they don't go without being checked by their supervisors. I can't give the member the details of how we carry this out, but it is certainly audited by their supervisors and the Victoria staff out to the various regions. So please don't get the impression that people out in the field work in isolation and that nobody is watching over their shoulder.

Getting back to the range problem, which we discussed briefly before, and the Ministry of Lands, Parks and Housing renewing grazing leases by order-in-council, I remember these orders being passed. I'm not sure if that is a normal procedure or not; I believe it is. The member may wonder why we are renewing these leases when in fact they are going to be changed over into grazing licences. We have offered short-term — I believe five-year — renewals of some of these leases when we are not in a position to have a range management plan in place. We cannot issue the longer-term grazing licence until those plans are in place. If we are not ready to issue a licence and we don't have the plan worked out, the Minister of Lands, Parks and Housing renews the grazing lease for a short period of time — five years, I believe — to give us a chance to get a management plan in place, after which a licence would be forthcoming.

The security that a person has on a rangeland is a concern that members have. I believe that a lot of people who had leases in the past thought they had more security than they really did, as far as keeping other people out of the areas. I think there is a great bluff carried in many cases where a person would put up signs, posting them and hoping that hunters would stay out. Most hunters probably respect these signs. I don't think the signs, in many cases, had any legal basis; but the ability to protect the area under use will not be any less under the grazing licence, really, than it was under the grazing lease.

I must agree with the member; I think the colours of those signs are lousy too. I didn't like the old, very harsh, red and green ones either; I think the colours were too harsh. I would like to see some signs that fit better with the countryside. Perhaps I could hire the member as a colour consultant. All my taste is in my mouth when it comes to colour.

Range permits are down. I think there has been a consolidation of the number of permits, and there has been some consolidation of ranch units as well. The reason is usually a matter of economics — older people getting out of the ranching business; perhaps the consolidation of several small ranches into a more economic unit.

Hay production is down for the last couple of years, probably more as a result of the severe drought weather conditions we've had in the interior than anything else, but I can't be certain of that.

Interjection.

HON. MR. WATERLAND: You mentioned that the amount of hay produced was also down. The amount of hectares of grazing land has been up, and the reason is probably that we put clearcut into forage during its early regeneration periods; it can be used for both growing hay and for supporting a new forest crop. That is part of the multi-use of the forest land base.

I believe that covers the additional points the member raised.

MR. LORIMER: Mr. Chairman, I want to thank the minister for his replies to my questions. For his own personal knowledge I'd like to advise him that although I haven't been up to the Brandywine area this spring, I'm told by people who were there that the creek is in very bad shape at the present time. There are roads being built along its banks — I think primarily mining roads rather than forestry roads — and there are branches and so on being pushed into the creek.

I would like to say that the minister is familiar with the area, and obviously he enjoys spending hours there, and it's not too late to make sure that the area does remain for multiple purposes. As I mentioned earlier, although logging may well continue, I think it should be done in a manner compatible with other uses for that property.

MR. GABELMANN: Mr. Chairman, I have a few brief comments today. I might begin by saying very candidly that the whole area of forestry is one that I've only very recently begun to try to learn about. In the process of educating myself about forestry matters, as happens so often in learning, each time I learn one factor I discover two more I have to learn that I didn't know existed. My sense of awe about the vastness of the job that faces any Minister of Forests in this province grows each day,

I've had an opportunity in the past 12 months to spend a fair amount of time with company and union officials in various operations in the northern half of Vancouver Island in the forestry sector and in the pulpmill industry as well. There are some things happening, frankly, that are good — and I say that in very general terms — compared to my impression of what has happened over the years. The cut-and-run attitude, the buccaneer approach, appears to be waning at least, if not ending, certainly in some of the TFLs in my area.

For the first time since the Tsitika area has been logged I had a chance to go into the CFP portion of the Tsitika — that's a very small portion, obviously; Mac-Blo has most of it. The different approach to road building in particular was of considerable interest to me. First of all, they don't use a Cat, they use a backhoe, and that makes road building a much better way to go environmentally. I would be interested to know whether or not the standards being recommended for road building in particular and for bridge construction and that kind of activity shouldn't be monitored with a view to imposing a similar level of high environmental protection in the woods on all logging road construction. Perhaps it is

[ Page 2747 ]

somewhat more expensive, but I'm not sure that it's a great deal more expensive, particularly with the modern machinery. Certainly the backhoe makes a much cleaner job that the Cat ever will.

In mentioning Tsitika I just want to say that the battle waged by many environmentalists to try to preserve an unlogged watershed on the east coast of the Island has been lost, in a sense, and that there will be considerable logging in that watershed. It's my understanding there are still four or five or half a dozen unlogged watersheds on the west coast of the Island. One in particular, I think, merits some attention not just by the Ministry of Forests but also by the Ministry of Environment, and I intend to spend more time during the Environment minister's (Hon. Mr. Rogers) estimates on this issue than with the Minister of Forests.

The Tahsish River Valley is unique from a wildlife point of view. The Tahsish River is not far from Fair Harbour, It s under timber licence at the moment, most of the lower section anyway — Mac-Blo has a timber licence on the lower part of that valley. Wildlife biologists in the Ministry of Environment tell us that it's probably the best unlogged river valley from a wildlife point of view. It's also — in discussing with native Indians in Kyuquot close by — a very significant salmon-producing river. It seems to me that we should be keeping one of these systems intact both for wildlife and for salmon-spawning purposes, if only to serve as a comparison. We can look at what's happened in Fair Harbour, where the estuary and the river valley have pretty well been destroyed by intensive logging, and the number of salmon in the river is right down. Not only for the purpose of preserving the runs that exist in the Tahsish, but from the point of view of trying to keep forever in this province some kind of control, some kind of indication of what it would be like in its natural state....

I wouldn't argue, as some do, that we should not log the whole watershed. Already CFP is in the top part of that watershed anyway, and there are other parts of it that it would make sense to log. But in the Tahsish River system the valley floor is quite wide and much of the timber is on islands created by the river. I think there should be some serious consideration between the two ministers with a view to providing an ability for Mac-Blo to perhaps trade for some other timber somewhere and leave that in its natural state so that we can have at least one unlogged river valley on the west coast — in British Columbia for that matter. This is one of the few that we possibly can keep. Many of them aren't particularly worth keeping, quite frankly, but I believe this one is.

I had a chance three or four weeks ago to spend a Sunday afternoon hiking up the valley. There were elk everywhere, even trumpeter swans, and bear, cougar and wolves. Evidence was there of great numbers of wildlife species, and that's confirmed by the biologists in the Ministry of Environment. I would urge that the minister give some consideration to doing an evaluation, together with the other minister, of that particular valley.

Proceeding from there, I want to spend a minute or two on the question of streambank preservation. Let me start by going back a step. We as a society have spent a great deal of time on logging companies, and the ministry has spent a great deal of time concerning itself, quite properly, about wildlife potential in logging areas. The pattern of logging is affected by the wildlife patterns and by needs to preserve cover for winter range and so on; I won't go into all the details. There has been a good response. In my judgment, from most of the companies, to the point of hiring their own biologists and working out plans with government experts in a way that will attempt to keep up the level of wildlife in some of these valleys. I'm thinking particularly of the Nimpkish Valley, where there is a very extensive deer population. But I don't believe we've given the same kind of serious consideration to the fishery.

If you look at it from a global perspective, not even from a recreation point of view but from a food point of view, the fishery has far more impact on our society than does wildlife. There's far more nutrition for the world to be provided from a sound fishing industry in this province than there will be from wildlife. It's not to say that we should do less in wildlife but that we should do more in preservation of spawning grounds. Nimpkish Lake and the river system are virtually decimated. When you look at the counts that natives report existed in the 1800s and prior to that and look at the counts over the last 10 or 15 years you can see that the fishery has not been wiped out but close to it. I don't think there's any doubt but that comes from logging practices over the years in the Nimpkish Valley.

When I talked to foresters and forestry company officials and others about how we preserve stream banks, the whole idea of a 66-foot non-cutting area along the banks struck me initially as being a good idea; but the more I look at it, the more I think it's a crazy idea. You often end up doing more damage to the streams by allowing that timber to stand and then to be blown down in the first good gale. Rather than falling away from the creek, which they'd do if they were felled, they often fall into the creek, at least from one side if there's a prevailing wind. So I'm not persuaded about the almost arbitrary 66-foot approach to preservation of stream banks.

I had a particular example of a way in which it does appear to work better, and that's on a river in the Rayonier TFL in the Holberg area. It's a river called the San Josef, which flows in its final two miles through Cape Scott Provincial Park — about two miles from the park, towards Holberg — and is privately owned by Rayonier for a variety of historical reasons. They logged that particular section earlier this year. I walked in with the manager of the company. The San Jo River is a major recreational river; it is a canoe river. I've canoed down the river myself and have hiked that area and camped in that area. We walked the riverbank with a view to determining whether or not there was a way to preserve the esthetics of the river by not having the obvious [illegible] cut right up to the river, and also to prevent the blowdown. The company — I think they should be credited for it — has clone a very careful selective logging program in that particular section of the river, which meant in some cases taking trees out right beside the river and in other cases leaving sounder trees as much as 300 feet away from the river. That kind of selective logging practice adjacent to major recreational rivers and major fishery rivers is, I think, something that needs to be encouraged a great deal more than now. When I look at the blowdown in so many of the rivers in the northern part of Vancouver Island I think that that policy has been a bit of a mistake.

Another issue I want to raise — and I won't spend too much time on it, I hope — is the whole question of chemical eradication of weed trees — alder and whatever. There is no question that companies want to use the chemicals, but there is also no question that the public mood is very much against

[ Page 2748 ]

the use of chemicals. Certainly, when we get to the Ministry of Environment's estimates, we will talk about the processes and the procedures by which these permits are granted. I don't want to do that today because that is a major issue as well. Today I want just to deal with it from the forestry point of view.

Some efforts are being made — particularly in the Nimpkish Valley, where I've spent some time recently — to do some comparisons between mechanical control, both by felling and by scarification with a Cat in heavily infested alder areas, and using chemicals in another area. They are sort of having a comparison project going along. I would hope that the ministry would encourage that trend, and I would hope that there would be, if necessary, incentives of one kind or another that would make it much more attractive for the companies — if not compelling them to do it — to use mechanical methods of brush control or alder-weed control. I've seen examples just outside of Tahsis where they actually, instead of hacking and squirting, used aerial application, and they missed the target and dumped most of it out in a small lake which later flows out through the river past Tahsis. I think, if only from a pragmatic point of view, the government should be thinking about finding ways to eliminate the use of chemicals in weed-tree control. The public will one day demand that in much stronger terms than they are now and we'll have to find a way to end the use of chemicals. Why not encourage the mechanical methods that are available?

I wrote to the ministry some time ago about the Sayward forest and the concern that a number of residents had raised about the immense amount of slash on the ground from thinning and silvicultural programs. That was feared to be a serious impediment to wildlife in terms of their ability to get through. We're talking about slash that is four and five and six feet deep in places. The concern was raised about wildlife and fire hazard, particularly in the first year following the cutting. Last week in the Nimpkish Valley, I walked through some of another thinning operation. It is a real concern that the trees that are being thinned out.... Because the programs haven't been ongoing for the last 20 years, a lot of companies are thinning areas with 20- and 25-year-old stock. The trees are pretty big and they're just being felled and left. In many cases, if you climbed down into them they would be over your head, and that is going to be a very difficult situation for wildlife and a very difficult situation for potential fire hazard. I am not opposed to the idea of what is happening, because farming our forests is something we all believe in and it's very good, but maybe more care needs to be taken in the regulations concerning how you leave that particular slash.

I just wanted to say very briefly that the commercial thinning operations that I've seen are really quite exciting. I think there are some very interesting, very good things happening with commercial thinning. Again, I hope that that will be encouraged for those companies that aren't really planning to do much of that; I hope they will be encouraged to get into that. Even though they may only just break even in terms of the value today, the value for the future in having that kind of spacing in a forest is really pretty obvious.

I have two other issues. Some months ago in question period I raised the question of the allocation of logs from the old Elk River Timber property, which is now part of BCFP's domain. There is a very real concern on the part of local mill operators — in particular, Raven Lumber in Campbell River. Their real concern is that because the government does not have any control over log allocation from private land, they are at the mercy of the company and could, in fact, wind up in very serious trouble, not having sufficient logs to conduct their own milling operations. Maybe there has to be some control by the ministry over practices and log allocations on private land. That's something I just throw out without going into it in any further detail.

The final issue, one that concerns people in a great many remote communities throughout North Island, is one relating to roads. We have such a mish-mash of Highways responsibility, Forest Service roads and logging company roads. I cite one in particular: the road from the highway just near Woss to Zeballos goes through two TFLs. One is CFP and one is Tahsis Co. The last six miles of the CFP TFL is not being actively logged, so they have no requirement to maintain that six miles of road to a standard that they would maintain an actively logged road. So what happens is that the people in Zeballos drive over some fairly good logging road most of the way, except for the six-mile chunk in the centre. The village council in Zeballos and the residents said to me: "Why don't you try to get the road under the Minister of Highways?" I said: "Well, if you do that, you're going to limit the.... Unless you make it a joint-use road, like you have from Gold River to the Gold River pulpmill, you're going to have problems with 14-foot bunks, licences and on and on, and the forest companies aren't going to want that. So I'm not going to support your request to apply to the Ministry of Highways to make it a provincial highway, because I don't think that's a practical, responsible and reasonable thing to do at this point. But," I said, "I think you have the right to have that road maintained at a high level."

CFP's argument could well be, but I think they're more generous than this: "Why should we maintain that particular section? We're not using it." Yet it's access for a lot of people — and not just Zeballos people, but people who go on beyond there.

The whole question of road maintenance — because it arises in other areas; on Forest Service roads as well — is not clearly enough defined, and the responsibility and the requirements are not clearly enough laid out. I have some sense that the section 88 trade-offs that occur aren't able to be fully enough policed. So unless we can increase the number of staff looking at that whole question, we may have some problems with that whole section 88 trade-off — that's not the right term, but you know what I mean.

I think I'll leave it at that, Mr. Chairman. I've covered a variety of issues. In concluding, let me say that I'm still in the learning process in this whole forestry thing and I'm finding it absolutely fascinating. I think, as each year goes by in the House, I'll be able to contribute in a more meaningful way and I hope that that happens. In the meantime I hope we continue to make some of the progress that I see is happening in some of the basic logging practices.

HON. MR. WATERLAND: Mr. Chairman, I'll respond to some extent to the queries and suggestions made by the member for North Island.

He started off by talking about road construction methods, pointing out that in his view the use of backhoes rather than 'dozers appears to be less environmentally damaging. In many instances he's quite right. I've seen quite a bit of this done, especially in some of the boggy areas in the interior, where backhoes are used and they provide an elevated road surface with good drainage ditches on the sides.

[ Page 2749 ]

Loggers tell me it makes a more dangerous road, because of the rough falloff. I think if the roads were perhaps widened, they could have the best of both worlds. However, it's not something that can be applied everywhere, as the member well knows. I think it does, in many cases and especially in boggier land, provide a cheaper road as well, and there is a move towards this. As a matter of fact, it was a fellow in my constituency a few years back who, I think, pioneered that type of road construction and did a lot of road-building as a result of his pioneering effort.

The member talked about...I'm sorry I cannot pronounce the name of the valley. I have received some correspondence on it. It's another one of the last untouched valleys. If you only knew how many last untouched valleys I've heard of since I've been the Minister of Forests. However, the assessment — and I'm glad you're not suggesting that the entire drainage be preserved — as to preservation of areas like this does take place in a normal referral process to other ministries. Whether or not that valley will be left untouched. I don't know; but we certainly do consider the need.

But at the same time I have to get back to a discussion I had with the member for Shuswap-Revelstoke (Mr. King) on the alienation of the forest land base. Whenever we set valleys like this aside, we're making a conscious trade-off and we're recognizing the fact that we have to remove that volume of timber from whatever it contributes to the allowable cut. So they are serious trade-offs and things that we're always considering. I will not be an advocate of large wilderness set-asides. That's perhaps the responsibility of my friend, the Minister of Lands, Parks and Housing. However, we do consult in sensitive areas like this and, again, I can't say what will happen.

Fish and wildlife habitat, of course, is a very important part of the multi-use of the forest land base. We are now required, as the member knows, by the ministry act to consult with these other ministries and make sure that we do everything we can to manage the land for its total productivity — not just timber, but timber, wildlife, fish, recreation, and water quality. Admittedly, in the past mistakes have been made, and probably in the future mistakes will be made, but I think there is tremendous improvement being made. The awareness of people in my ministry and in industry.... Many companies, as the member said, have wildlife biologists and landscape architects on staff who are very concerned about all of these impacts, and we're much farther ahead today than we were a few years ago. I'm sure that as time goes on we'll get even better at it.

Leave strips along rivers and streams. Sixty-six feet is not a mandatory leave strip, it's a guideline. Of course, what actually happens has to be decided on a very site-specific basis. In many cases, as the member mentioned, selective logging right down to streamside and in some areas clearcutting right to streamside may be better. In fact, streams can be improved as far as fish habitat is concerned, at times, by logging right to the streamside. Perhaps the stream is too shaded or the water is too cold. These things can have a positive effect as well as a negative effect. Again, we must work with other resource managers to find the best prescription for each individual area. They must be site-specific decisions.

As far as the use of herbicides, we still are using some herbicides — I believe less each year. Not only is it probably better to encourage the use of mechanical brushing for the protection of the environment, but also a lot of this material can be used in some way or another. We're trying to encourage the use of alder — especially the larger alder, which can be made into alder lumber. It is used extensively in furniture manufacturing. We have had several bid proposals out recently, attempting to encourage people into harvesting some of these alder stands and recovering the sawlog component. Much of the balance can be used for firewood and other minor uses. As we try to rehabilitate many of these sites, we'll be getting into more of that and we'll try to encourage the use of the product.

Similarly with the thinnings from our commercial thinnings and our juvenile spacing, some of the material can be used for rails, posts and firewood. There is a limit to the amount of that material that can be made available, because, of course, its location is very critical as well.

The problem of slash in the Sayward. A lot of the Sayward forest is so dense, as the member well knows, that it's just no habitat for wildlife even before we touch it. That slash, I'm advised, will break down within a few years and the wildlife will be able to use the area. In the meantime it is a fire hazard. In areas such as this where there is a tremendous value in the growing forest and a tremendous investment in the stand-tending work we have a real incentive to increase our fire protection so that we can protect that investment. What the ultimate answer is I don't know, but I think after thinnings take place like this, there will be a period of time when it appears very messy, but it does break down, and as we get on with it and we can see what really happens, I'm sure we'll all be much happier with it. As a matter of fact, the Minister of Environment and I are cooperating on a study program in the Sayward this year to try to determine the real effect on the wildlife habitat that is had through this thinning work. He says that my ministry has to fund it. Perhaps this year we will. But we are cooperating in those types of studies.

The log supply from the Elk River timberlands. I don't know what the answer is to that. Raven Lumber have expressed to us some concern, as have others who've perhaps relied upon that timber flow. We're advised by B.C. Forest Products that they don't intend to withdraw that wood from the market at the present time, but they do have plans for working that into their manufacturing plants' needs. Otherwise they wouldn't have bought the timber. So the ultimate answer to that I don't know.

The member mentioned, when he was talking about this untouched valley, that perhaps we could trade off some other timber to MacMillan Bloedel. Well, trade-offs are possible if there is timber to be traded off, but then again, we have to make decisions. Do we reserve that timber we would have traded in for our small business programs, and trade it to MacMillan Bloedel, or do we try to manage the area in a multi-use concept and be able to use that timber for our small business programs? Again, trade-offs have to be made and some of these decisions are not easy. My thrust is sensitive multi-use in sensitive areas, and constant referrals to other ministries and other land users.

MR. GABELMANN: I just wondered about the roads. Did you have any comment to make about road maintenance?

HON. MR. WATERLAND: I'm sorry. I didn't cover that.

This type of problem exists in a number of areas in the province where the road is built primarily to service the forest

[ Page 2750 ]

industry, but then communities are established which rely upon a road for access. The companies, of course, are reluctant to have them turned over to Highways, because then they're restricted to legal-sized loads. What the Minister of Highways (Hon. Mr. Fraser) does, in many such cases, is provide funding through my ministry so that we can pay the company concerned for the maintenance of that part of the road that they're not using. I'm not sure about the particular road near Zeballos that you're speaking of, but we have this type of agreement and exchange in many areas, particularly on the Island. I will take that up with the Minister of Transportation and Highways if you can give me details of the specific route.

MR. BARRETT: I just have a few words towards the end of this vote. I want to talk to the minister and ask him a few questions about the availability of fibre to Ocean Falls. I'm sure that the government does an inventory. There is some question about the availability of fibre at Ocean Falls. That must have been part of the input in the decision to close the newsprint down. Would it not be appropriate for your department to help in an inventory assessment, or does your department do this for other corporations? I think that perhaps there has been a difference of opinion about how much fibre has been available. You see, Mr. Minister, it appears that in 1978 the Ocean Falls Corporation, based on information they had as a company, signed a five-year agreement with the Los Angeles Times to sell newsprint. Things were going along swimmingly and the contract was renewed in 1979 — just last year. The contract is to run out in 1984. The contract stipulated at the beginning of the signing — with the assurance of this Crown corporation that later went into BCRIC and the gift of the shares — approximately 35,000 tons a year, which was to be scaled down to 10,000 tons a year.

I am sure the minister is aware that when a contract is signed a contract is a contract is a contract. With the information that Ocean Falls had, they signed this contract and then in March of this year, before the public of British Columbia was notified, the Los Angeles Times was notified that the contract that Ocean Falls had signed was no longer going to be honoured because the newsprint operation was going to be closed down.

This came as a shock to the Los Angeles Times. As a consequence they apparently spoke to Mr. Williston and said: "How could this be? You are in effect a company guaranteed originally by the Crown. Then you became a part of the BCRIC shares." Not BCRIC shares, no. It was kept out of BCRIC so that the Crown was more directly involved. It was really a contract, in effect, with the Crown through a Crown corporation. How could the sanctity of contract be broken with such a government that believes in doing businesslike business? Signing a contract for five years in 1978, renewing it in 1979 and then in March telling a customer that they can't supply! To quote someone at the Los Angeles Times: "The contract was torn in two."

Someone in the Los Angeles Times got hold of a lawyer. Lawyers, being what they are, have read the contract. Much to the surprise of people here, the contract with the Crown and the inventory supplied by the Forests ministry may now be subject to a lawsuit whereby the taxpayers of British Columbia may have to cough up millions of dollars, because while Ocean Falls was in the closing process, someone forgot about the contract with the Los Angeles Times. Because I don't like to deal in rumours and I don't like to deal in corridor exchanges of descriptions of personal relationships, I made a long distance phone call and I spoke to a Mr. Niese. He's a very pleasant, nice man, an American lawyer. I must say he doesn't speak in legalese as much as the Attorneys-General, past and present — only two included, not three. This kind gentleman is the assistant general counsel for the Los Angeles Times. He is saying: "Goodness gracious! We don't want to sue the Ocean Falls Corporation, but they have ripped the contract in two after signing the first contract in 1978, renewing it in 1979, and then with only a few days' notice they were told that the contract is over because the Ocean Falls Corporation was going to close down." This customer was told: "Tough luck."

MR. KING: What happens to our reputation as a supplier?

MR. BARRETT: Don't raise that question, my friend. I'm coming to that.

MR. KING: I can't believe it.

MR. BARRETT: You can't believe it? I'm coming to that too.

I remember the speeches made across the floor by that famous car dealer from the north about sanctity of contract and the need to run a businesslike government, so I spoke to Mr. Niese again on the phone. The assistant general counsel of the Los Angeles Times tells me that he has been in touch with Mr. Williston over this little problem. He tells me that the newsprint market right now is very, very good.

MR. LOCKSTEAD: Tight.

MR. BARRETT: Tight is the description from my colleague. We're talking about the newsprint situation, nothing else related to any members here. It's tight.

Mr. Niese went on to say: "We don't want any trouble; we don't want any arguments; we just want the newsprint that we signed a contract for with a Crown corporation to be delivered." So I said to Mr. Niese: "Are you planning litigation?" He said: "Not at this moment." I assume that he is not planning litigation because the government of British Columbia would never renege on a contract and probably knew when they closed down Ocean Falls that they'd have to replace this newsprint — even though they didn't tell us so publicly.

I don't recall the minister standing up and saying: "We've got a little problem in closing Ocean Falls. We've got a customer with whom we signed a contract in 1978, and we thought it was such a lovely contract that we renewed it in 1979. We forgot to tell him that we were going to close the place in 1980, and the customer is a little bit upset, but we're going to deal with it." I don't remember anybody in the government or the minister or Mr. Williston telling the public: "We've got this little problem about a broken contract."

Let's go into it a little bit further. Mr. Niese, who is a gentleman, said that Mr. Williston....

Interjection.

MR. BARRETT: Oh, no, Mr. Williston is being very nice these days.

[ Page 2751 ]

Mr. Williston has said to Mr. Niese of the Los Angeles Times: "We'll try to find you replacement newsprint." Mr. Niese said: "Would you like us to fly up to Vancouver and discuss the situation?" "Oh, no," said Mr. Williston, "we're on this right away; we'll be back to you shortly."

I said to Mr. Niese: "Well, this does seem to be a problem." He said: "Yes, it is." I said to him: "Mr. Niese, how urgent is this problem?" "Well, it's fairly urgent." I said: "What will you do for replacement?" "Well, if we can't have this newsprint we'll have to go on the open market, and we'll have to pay a premium price for newsprint, because newsprint is fairly difficult to get at this time in the marketplace." I said: "Gee, if you have to go and buy the newsprint to replace what this government has broken a contract to give you, you'll have to pay a premium price?" He said: "Yes, we'll have to pay a premium price." I said: "I suppose then, as a lawyer, you would want the difference in price made up, even if Mr. Williston found you replacement newsprint." He said: "Oh, yes, that would certainly be the desire of my employer."

Now I don't want to call this government dumbbells. I don't want to call them incompetent, bungling or, frankly, totally inadequate in handling business — or perhaps even just stunned, as self-described by one of the Peace River members.

Can you explain to me how the ministry allowed this situation to develop? How have the taxpayers of British Columbia been placed in this situation? When did the minister know that this contract was in place? When did the minister inform Ocean Falls — if they did inform Ocean Falls — that fibre would not be available to meet this contract? Did the minister know that the contract was signed? Is he aware of what is going on now?

Mr. Niese also told me all they want is the newsprint. All they want is that the contract be kept. I said: "If you can't get the newsprint and you can't get the contract met, what have you got?" He said: "You got trouble."

Interjection.

MR. BARRETT: They speak good enough for me. American lawyers are a lot clearer than the member for Kamloops (Hon. Mr. Mair). Then I said: "Well, let's be reasonable about this, Mr. Niese. Let us all be reasonable, because of course we're all interested, even if the government is bungling, even if they don't know what they're doing. We're all interested in saving the taxpayers some money, because they're shovelling it out of the back of a truck to the the Los Angeles Times, if this deal doesn't go...." Where did you hear those clichés before?

Interjection.

MR. BARRETT: Yes, Mr. Chairman, we'll send a gold shovel down to the Los Angeles Times.

Now we don't have a lawsuit on our hands; we have a lot of scurrying around to try and make up this deal.

So I said: "Mr. Niese, what would be a reasonable time to consider in solving this problem, since you only had notification in March?" He said: "Well, it is fairly urgent." I said: "Well, Mr. Niese, wouldn't 90 days be enough time to resolve it?" He said: "Oh, no, it's much more important than 90 days." So I said: "Well, how many days?" He said:"Well, I hope that the matter can be solved, but it can't go on 90 days."

Interjection.

MR. BARRETT: Another lawyer has spoken: "Thankfully, he's not negotiating for the government.'' What kind of dumbbell got us in this situation in the first place?

"So 90 days is not enough time. What would you do, Mr. Niese?" He said: "You're from the opposition. Why are you asking these questions?" I said: "Because it is my duty. Do you know what, Mr. Niese? This story is going to get around, and people are going to ask the opposition some questions, so I want to be absolutely accurate, Mr. Niese." So he said: "Fine. Ninety days is too much time. We have a tight supply. We have a contract that was ripped in two. I'm a lawyer for the company."

Now, Mr. Chairman, I'd like to know from the minister when he knew about this contract and what his department knew in terms of the kind of commitment made by Ocean Falls back in '78. Did Ocean Falls make commitments without consulting your department? Did Ocean Falls renew those commitments in the election year of 1979 without consulting your department? Are you in touch with Mr. Williston over this issue? Is your department involved in any way in trying to find replacement newsprint for the Los Angeles Times? Does the minister know how much the contract is worth? Has this issue damaged British Columbia's reputation in the international marketplace, in that their word can't be kept through a Crown corporation? I ask the minister these questions. I'd like some more information so we can find out exactly, what kind of mess we're really in over this Ocean Falls closure, what the minister knows about it, and what, if anything. the minister intends to do about this situation.

HON. MR. WATERLAND: Mr. Chairman, the Ocean Falls Corporation has not had a timber supply since it was taken over by the former NDP government. As Minister of Forests, my responsibility for the Ocean Falls Corporation is only that my ministry is at the present time trying to identify areas which we had classified as economically inaccessible, for the Ocean Falls Corporation to initiate its new flitch mill. Responsibility for the Ocean Falls Corporation lies through the president of the corporation to the Ministry of Industry and Small Business Development. If the member wishes to discuss Ocean Falls Corporation, then I would suggest that that would be a much more appropriate place to do it, because it does not fall within my responsibility and should not be discussed under this particular vote.

MR. BARRETT: Mr. Chairman, the only reason I'm raising it under your vote is to determine whether or not the ministry was ever asked by Ocean Falls if there was enough supply of fibre to sign this contract in 1978. You were the minister in '78. Did Ocean Falls come to you and ask you, before they signed this contract with the Los Angeles Times, if there was enough fibre to meet this contract? Did they come and talk to you? When the contract was renewed in 1979 — you were the minister — did Ocean Falls contact you or your ministry asking whether or not there was enough fibre to renew the contract just signed a year earlier? Did they contact you, Mr. Minister? If you're being contacted now for a new mill, it only stands to reason that they must have contacted you about the old one. Is the minister telling us that

[ Page 2752 ]

there was no contact with his ministry prior to this new idea of a new process on the question of fibre? If that's so, I'd like to know that too. Maybe they called you in too late.

Now what is it, Mr. Minister? I realize that the bungling is to be laid at the doorstep of the master bungler. We'll deal with that later — trying to sell the Los Angeles Times a used car, rolling back the newsprint odometer. We'll deal with that later, but I want to tell you this, Mr., Chairman: we want to know if you were consulted and when you were consulted on this. I'd like some answers.

HON. MR. WATERLAND: Mr. Chairman, the Ocean Falls Corporation, as far as their wood supply is concerned, has been dealing with my ministry for the last couple of years at least. I was surprised that they had not been dealing with the previous government, when they were the owners of the Ocean Falls Corporation. The Ocean Falls Corporation has been discussing with the Forest Service the possibility of timber supply. We have advised them, as we have advised others, that the timber supply situation in the mid-coast area is extremely tight, and that there would not be enough wood to sustain their operation, because they did not have a licence before the supply situation became as tight has it has. They're also advised that for normal timber allocation, the Forest Act is very specific in that wood must be acquired through competition. The only possibility of making a direct allocation to the Ocean Falls Corporation is under the experimental sale, which we will process when we have identified areas that can be harvested. That is the extent of my involvement in the Ocean Falls Corporation, as the Minister of Forests.

MR. BARRETT: I thank the minister for his answer. He informed us that Ocean Falls has been in touch with his department for at least two years. Then he made the allusion that he didn't know whether or not they'd been in touch with the department prior to his being named minister. I want to inform the minister that — once the acquisition was made — Ocean Falls Corporation was directly under the Minister of Forests. It seemed to us, in our businesslike approach to government, that before we did anything with Ocean Falls, we'd better find out how much timber they had allocated. It seemed to us that the best place to find that out would be through the Ministry of Forests. You're telling me that between 1975 and 1978, no one made that connection? Lordy, lordy! Thank goodness they made the connection when they did! But the connection was made in the very two years that I'm talking about.

Mr. Williston signed this contract in 1978 and renewed it in 1979, and you tell us on the floor of this House that your department has been involved for the last two years. Ironically, Mr. Minister, those are the two years that count. What dumbbells signed the contract to allow us to go into a five year supply of newsprint, when your ministry — as you've said now — knew that there wasn't enough fibre or timber supply to keep the plant going? One ministry of the government doesn't know what its own corporation is doing, and it's bungling. Mr. Minister, if you didn't give this information to Ocean Falls, you've got us in a situation where Ocean Falls was closed down. Ocean Falls was signing contracts based on some information. Lord knows where the information came from in 1978 that they had enough timber to sign the contract, but now that the contract has been "ripped in two," to quote my new acquaintance, Mr. Niese, and your department has been involved for two years, you've got to carry some of the can for this mess or blame someone else. Something has gone very wrong here.

Mr. Minister, you say your department is involved now in the experiment of a new mill. Would you be prepared to inform this House, by tabling either correspondence or reports, of just exactly what information you have given Ocean Falls from your department over the past two years? I know clearly — and I would not want to transgress on that in this very strictly limited committee debate — that the decision about Ocean Falls itself was not the minister's. I will save that for the other minister's estimates. But it is his department, by his own statement here within the last few minutes, that was asked to provide information for the last two years. Did you tell Ocean Falls that they had enough timber for this kind of contract, or did they ask you for that information? What did you tell Ocean Falls? How much timber did you say they did have? Were you aware that they were contemplating signing this contract? If you were, did you warn them not to sign the contract, especially in an election year? I'd like to know that. Were you aware they were going to sign this contract after your department, by your own statement, was involved with them? Were you aware of that, Mr. Minister?

Interjection.

MR. BARRETT: Well, well, well. "It's not my problem," he says. It's the other guy's, the lightning rod of the cabinet. Zing one over on him. Except you just told us yourself that for two years your department has been involved with Ocean Falls. You gave an offhanded crack to the former socialist administration. That's what you did. But you've been involved for two years. Goodness grief! What did you tell them? You're the Minister of Forests. You must have been asked about timber and fibre supply. Did you tell them that they had enough to sign the contract with the Los Angeles Times? Were you asked that question?

Do you know anything about this deal? Have they kept you in the dark about another thing going on in cabinet? Are they treating you that badly these days? Through you, Mr. Chairman, surely you must know what's going on in your own department. Is the minister pleading ignorance as a defence? Mr. Minister, to your knowledge, was your department consulted at all on this contract?

Well, well, well. This competent group of free enterprisers couldn't even run a newsprint stand after they signed the contract, even when the department itself was involved. That Minister of Municipal Affairs (Hon. Mr. Vander Zalm) will be the first to get to the corridor to say: "I had no knowledge of it. If it had been me, I would have done it different." We know what the defence mechanisms are — we've seen them all before. The minister who won't get paid will have another reason. The minister of small economic development will have another reason, but we're asking that minister to stay in order, Mr. Chairman.

So I'm asking that minister: after your own admission of knowing for two years, were you asked for an opinion by Ocean Falls Corporation as to whether or not they should sign the contract? Did you give them any information that would lead them to believe that a five-year contract signed in 1978 and renewed in 1979 would be okey-dokey? Was your ministry consulted before this contract was signed? I'd like some of those answers, please.

Mr. Chairman, this is the most incredible group of bunglers that have ever been in office in the province of British

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Columbia — the whole works of them. You know, the rest of them have smiles on their faces because they know that it isn't their turn in the barrel — yet. They know what's going on; they're all saying: "Hoop-de-do, it's 20 to six; I'll get my supper without a little ulcer tonight, but poor old lonely what's-his-name in the corner is stuck with this mess today. I certainly hope that that big bad opposition won't find out about the goofs in my ministry. I promise to answer questions every day in question period, and when it comes to estimates, I'll try to behave myself by giving information too." But the poor little Minister of Forests today is stuck for words, and nobody is there to help him.

Now I am going to ask the questions again, simply, so the minister can understand what I'm asking. If he's admitting by his silence that he doesn't know the answers, then someone in the opposition should stand up and say that he's incompetent — not me, not yet.

Now I ask you, Mr. Minister, slowly, so that even the minister from Columbia River (Hon. Mr. Chabot) gets the drift of this one. You have told us that your ministry was involved for two years. Were you asked in 1978 for your ministry's information and opinion as to whether or not it would be okay to sign a contract with the Los Angeles Times? Were you asked that? It isn't new — and it wasn't new at the time Ocean Falls was purchased by the government — that fibre is running out. Were you asked at that time whether or not they should go ahead with the contract? Yes or no. Secondly, if you were asked, what advice did you give Ocean Falls — to sign or not to sign? The same questions applied in 1979. Could you tell me that please, Mr. Minister?

If you don't know, Mr. Minister, perhaps you'd like the evening to think it over. Maybe your staff could dig out the stuff. Don't you think it would be appropriate if he had a little time to think it over?

AN HON. MEMBER: He wrote that paper on socio-communists in four years.

MR. BARRETT: Yes, Mr. Chairman, he's very busy writing columns every week so perhaps he hasn't caught up with the affairs of his office, such as informing people whether or not there is enough timber or fibre.

Mr. Chairman, I move the committee rise, report progress and ask leave to sit again.

AN HON. MEMBER: It's too early.

MR. BARRETT: Too early?

Motion negatived.

MR. BARRETT: Mr. Chairman, I watched very closely to see how the minister voted. He didn't want the committee to rise. He said "no." Now that you've said no, let's answer the questions I'm asking you. You would have said yes if you wanted more time to research. You don't want the committee to rise, so you must know the answer. Tell us, Mr. Minister — were you approached in 1978, as minister responsible, by Ocean Falls, to let them know whether or not they should go ahead with the contract with the Los Angeles Times? If so, what did you advise them? The same two questions apply for 1979, Mr. Minister. I'd like to know.

HON. MR. WATERLAND: Ocean Falls Corporation does not consult the Minister of Forests when it is negotiating a contract. Can-Cel doesn't; B.C. Forest Products doesn't; MacMillan Bloedel doesn't; Can-For doesn't. Forestry companies in British Columbia do not consult with the Minister of Forests prior to selling contracts. The responsibility for the administration of Crown timber is mine. I have told the member that I have been discussing with Ocean Falls Corporation for the last couple of years the possibility of timber supplies. I have told the members of the Legislature just what my direction with them has been, that we have a tight timber supply, and that if any timber can be made available it must be that timber which we have currently classified as uneconomical.

I think it would be very inappropriate for the Minister of Forests to be the administrator of Crown timber and also to be a director responsible for Crown timber-using corporations. That previous government apparently could not see the conflict of interest that would develop from such an arrangement. I would advise the member that the timber supply situation of the Ocean Falls Corporation is exactly the same now as it was last year and as it was in 1975 when the former minister was responsible for it and signed his sales contract with the Central National Corp. They were acquiring their timber from the log market then, as they have been now. Nothing has changed in that respect. I'm not involved in the management of the Ocean Falls corporation; I'm responsible for administration of the Forests ministry and Crown timber. I think it would be very inappropriate for companies, whether Crown corporations or otherwise, to come to consult with the Minister of Forests prior to signing any contracts.

MR. BARRETT: I would assume that if any private corporation operating in the forest industry were to sell anything, they'd make sure they had something to sell. I'm sure that if asked questions by forest companies as to how much inventory they've got, the minister would help them determine what the inventory is. If the minister is attempting to say that he doesn't tel I forest companies how much inventory they actually have, and then the companies make the decision based on that information separately, the minister doesn't understand the elementary facts of business: if you haven't got it, you don't sell it.

You told us that you've been talking for two years to Ocean Falls about timber supply. It is a well-known fact that it has been a critical problem at Ocean Falls that they haven't had enough committed fibre supply. Isn't that correct? I understand that that was the basic problem as to why Crown Zellerbach wanted to sell it off in the first place. Is that not correct? It is public knowledge, Mr. Minister, that the reason they wanted to close it down was twofold: they were faced with massive capital expenditures, as they saw it, and they didn't want to make those capital expenditures based on the limited timber supply. Is that correct? Yes. It's public knowledge. The bill was bought. Is that correct? Yes. The minister was consulted two years ago. That's correct. The minister has said that.

The minister has said that they had the same timber supply two years ago as they had a year ago and they have today. Did you not offer any advice to the Ocean Falls Corporation to remind them that they did not have a secure supply and that signing new contracts based on the limited supply would be a mistake, or were you considering making more timber available? Or was Mr. Williston, based on your conversations that more timber would be available, given the

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impression to go ahead and sign the contract? You are telling us by your explanation that Mr. Williston was incompetent and shouldn't have made that decision, because you said clearly that the timber supply was the same two years ago as it is today. Having said that to Mr. Williston, he went ahead and signed this contract; you are branding him as incompetent. Mr. Williston may be a lot of things, but even he is not that incompetent. Somewhere he must have got the impression that perhaps more timber was going to be made available. That is only logical. Somebody goofed. Because of your bungling, it may cost the taxpayers of this province millions of dollars that should be going into hospitals and other services.

Would you state categorically that you were never asked whether or not there was enough supply before this contract was signed? I would like to know whether you were ever asked your opinion, or your department was ever asked to gather information related to this problem, or if your department was ever aware that even though you had an involvement for two years, Ocean Falls was contemplating this contract. If you say that, then you're saying that Mr. Williston went ahead and did this without any new information or any consultation and made a commitment on facts well known prior to your involvement two years ago but put in concrete by your statement that for two years there wasn't enough timber supply. There wasn't enough a year ago and there isn't enough now.

I would like to know, in your discussions with Ocean Falls, whether the possibility of more timber was discussed. Was it based on that possibility that Mr. Williston made this decision? I would like to know that. Perhaps, Mr. Minister, you could go back through your correspondence with Mr. Williston. Go back over what the conversations were. Perhaps there were minutes of the meeting — hopefully not taken by Etienne Reuter; we don't want to go through that again. But hopefully, Mr. Minister, you will have some recall for tomorrow, because the people of this province are going to be asked, if newsprint is not replaced — and hopefully we don't have to pay a premium supplement to that newsprint.... But if it's not replaced we're going to be in court over breach of contract — "ripped up in two," to quote Mr. Niese. That's not a very nice prospect for the government, and not a very nice prospect for the taxpayers of British Columbia. Now, Mr. Minister, would you like to answer those questions?

HON. MR. WATERLAND: Listening to the Leader of the Opposition and watching his theatrics, it's no wonder to me that the government of British Columbia was a complete disaster in this province during the years 1972 to 1975. It's no wonder at all. He's not even a good actor. If my wife had him in one of her drama classes, she would flunk him. Mr. Chairman, I have told the member....

MR. BARRETT: Nothing.

HON. MR. WATERLAND: He has a little difficulty understanding, I assume. But I've told the member exactly what my involvement in the Ocean Falls Corporation has been. It's only been as the Minister of Forests responsible for Crown timber. The Ocean Falls Corporation has not had an allocation of Crown timber as long as it's been a government corporation, starting in 1972 or 1973, shortly after that government over there acquired it. Ocean Falls Corporation does not consult with the Minister of Forests when they contemplate signing these sales contracts, nor does MacMillan Bloedel Ltd. consult with the Minister of Forests, nor does Canadian Forest Products, nor do any of the companies working in the forest sector.

Mr. Chairman, the member opposite is criticizing Mr. Williston for doing exactly the same thing that Mr. Williams did when he was the Minister of Forests. Mr. Williams was in the position of having this conflict of interest, being the minister responsible for Crown timber, and also being the minister responsible for a timber-using corporation. Even though he had both responsibilities, that minister found no timber for the Ocean Falls Corporation. That former disaster government signed its sales agreements with the Central National Corp. a year before they had to be signed. Strangely enough, it was very shortly after the government changed hands, as a matter of fact. What his motivations were for that, Mr. Chairman, I have no idea; I have no knowledge. But this government is very concerned about the fact that there should not be a conflict of interest in a minister's responsibilities. You cannot be the manager in charge of the corporation which uses timber and also be the minister responsible for allocating timber. If ever there was a conflict of interest, that is one.

The House resumed; Mr. Davidson in the chair.

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

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.