[ Page 2755 ]

CONTENTS

Routine Proceedings

Oral Questions.

Kettle Valley Railway. Mr. Barber –– 2756

Air-sea rescue services. Hon. Mr. Rogers replies –– 2757

Stikine-Iskut tourist facilities. Mr. Passarell –– 2757

Archaeological sites. Mr. Hanson –– 2757

Miscellaneous Statutes Amendment Act (No –– 1) 1980. (Bill 34). Hon. Mr. Williams.

Introduction and first reading –– 2758

Tabling Reports.

Kettle Valley Feasibility Study for a Scenic Railroad under Canadian-British Columbia Travel Industry Development Subdidiary Agreement.

Hon. Mrs. Jordan –– 2758

Committee of Supply; Ministry of Forests estimates.

On vote 103.

Mr. Lockstead –– 2758

Hon. Mr. Waterland –– 2759

Mr. King –– 2759

Hon. Mr. Waterland –– 2760

Mr. Lockstead –– 2760

Hon. Mr. Waterland –– 2761

Mr. King –– 2761

Hon. Mr. Waterland –– 2762

Mr. Barrett –– 2763

Hon. Mr. Waterland –– 2763

Mr. King –– 2768

Hon. Mr. Waterland –– 2769

Mr. Lea –– 2770

Hen. Mr. Waterland –– 2770

Mr. King –– 2773

Hon. Mr. Waterland –– 2774

Mr. Levi –– 2774

Hon. Mr. Waterland –– 2775

Mr. King –– 2776

Hon. Mr. Waterland –– 2777

Mr. Cocke –– 2780

On vote 104.

Mr. King –– 2780

Tabling Reports.

Ministry of Agriculture annual report, 1979.

Hon. Mr. Hewitt –– 2780

The House met at 2 p.m.

[Mr. Davidson in the chair.]

Prayers.

HON. MR. FRASER: It gives me great pleasure to introduce to the Legislative Assembly exchange students from Scotland, specifically the Orkney Islands, who are in the galleries today. Their hosts in British Columbia are Columneetza school in Williams Lake. The students have just come in from Scotland and are on their way to the great Cariboo area, specifically Williams Lake. Mr. Longridge, the principal of Columneetza, is accompanying them as well as Mr. Nelson and four students from the school. The teachers accompanying the group of 13 students from the Kirkwall Grammar School in the Orkney Islands are Mr. Meason, the headmaster, and Mr. Rich, teacher. I'd like the Legislature to give them a hearty welcome.

MR. D'ARCY: Joining us today from Trail are three people: Mayor Charles Lakes, who is also president of the Union of British Columbia Municipalities, the dean of Trail aldermen, Mr. Norman Gabana, and the group vice president for Cominco resident in Trail, Mr. A. V. Marcolin. I would hope the House would give all of these outstanding citizens a warm welcome.

MR. SEGARTY: Mr. Speaker, in the gallery today is Nicholas Smith and his wife Jacintha, who are holidaying from Ireland and touring British Columbia. I'd like the House to welcome them.

Also in the gallery are Gus Conroy and his wife Joyce. Joyce is membership secretary of the Kootenay Social Credit Constituency Association. I'd like the House to welcome them as well.

MR. LAUK: On a point of order, Mr. Speaker, I wonder if I couldn't have leave to greet all of the honourable ministers who aren't in their seats today.

DEPUTY SPEAKER: Hon. member, that is not a point of order that can be raised, and the member is fully aware of that.

MR. LAUK: I wonder if Mr. Speaker couldn't provide some advice with respect to the absences of ministers, when we have only a 15-minute question period, and the front benches are empty.

DEPUTY SPEAKER: The member rose on a point of order. The point of order is not in order. The member, with all due respect, is fully aware that he cannot raise this as a point of order.

MR. LAUK: Well, Mr. Speaker, I challenge that ruling.

Deputy Speaker's ruling sustained on the following division:

YEAS — 28

NAYS — 23

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

DEPUTY SPEAKER: The member for Nelson–Creston rises on a point of order.

Interjections.

DEPUTY SPEAKER: Hon. members, the member for Nelson–Creston has been recognized on a point of order.

MR. NICOLSON: Mr. Speaker, I draw your attention to standing order 16(2), the last part of which says: "No member shall enter or leave the House during the stating of the question, nor leave the House after the final statement of the question until the division has been fully taken, and every member present shall vote."

It's become almost habitual for the second member for Vancouver South (Mr. Hyndman) to leave the House during divisions. In order that divisions can be taken most expeditiously, I would recommend to Your Honour that he bring that to the attention of all hon. members.

DEPUTY SPEAKER: Thank you, hon. member. That is before the question has been stated, not after. Nevertheless the Chair will undertake to review the matter.

Oral Questions

MR. BARRETT: I have a question for the Minister of Industry and Small Business Development (Hon. Mr. Phillips) — the only one who ran out of the House.

DEPUTY SPEAKER: Mr. Clerk.

Hon. members, the Chair can only recognize members who are standing. There was no one standing. I recognize now the first member for Victoria.

MR. BARBER: I thought the Minister of Industry and Small Business Development, who left for what I'm sure was an important reason, was going to come back.

[ Page 2756 ]

DEPUTY SPEAKER: Order, please. Hon. members, we're in question period. The member has a question?

KETTLE VALLEY RAILWAY

MR. BARBER: I have a question for the Minister of Tourism; it's in regard to the Kettle Valley Railway. This railway was built in 1915, and what remains of it runs some 58 miles from roughly Kelowna to roughly Penticton. The railway was used during the filming of The National Dream by the CBC. The railway is an important part of Canada's heritage — at least in the western part of the country. A moratorium has very recently expired. The impact of that expiry, I'm advised, is that the CPR has now let tenders and, I'm further advised, as of last night was proceeding to rip up part of this track.

My first question to the Minister of Tourism is: could she inform the House as to what precisely are the recommendations of the very recently obtained TIDSA report...

AN HON. MEMBER: You tell him, Bill.

MR. BARBER: Should I ask the Premier?

AN HON. MEMBER: Yes, I think so.

MR. BARBER:...which, as a matter of public knowledge, has been commissioned regarding the tourist and other economic potential of the Kettle Valley Railway? That's my first question to the minister.

HON. MRS. JORDAN: Mr. Member, I appreciate your very genuine interest in this whole subject. As to some of the other members, I'd just say that, unlike your party, our leader speaks to us and we speak to him, and we talk about a lot of things.

The member was kind enough to indicate his interest in this project. I think that, to answer your question — which would require about 15 to 20 minutes of question period time — it would be best to file the report right after question period, so you'll have an opportunity to read it for yourself.

MR. BARBER: Mr. Speaker, I appreciate the minister's reply and look forward to reading the report. I wonder if the minister might tell us what the current policy is in regard to the preservation of the Kettle Valley Railway in respect to the alternative recreational and tourist purposes to which the line could be put.

HON. MRS. JORDAN: Mr. Speaker, it would interest the House to know, I am sure, that nearly a year ago the government, through the Minister of Economic Development (Hon. Mr. Phillips), outlined at a public meeting that they appreciated the public interest in this whole project, and that they would seek a moratorium from the CPR for one year. They did, and that expired as of June 1. They also committed themselves at that time to enter into negotiations with the CPR to secure the right-of-way of this corridor. Those negotiations are underway. They also made clear, and felt in cooperation with the private sector, that a purpose of the moratorium would be to allow those in the private sector who were interested in this project to have the time necessary to look at the project objectively, to do their own analysis and to make proposals as to how they felt they might wish to operate such a railway if in fact it was to be operated.

Following that, the private sector did apply to TIDSA, which as some members know, is a federal-provincial agreement, and received approximately $42,000 to assist them with their study. That study was filed with TIDSA a couple of weeks ago and has come forward as a management summary, which is what I am proposing to file in the House at this time. The Minister of Industry and Small Business Development did reply to the citizens in a wire on Friday, and I am sure he will be pleased to file that with the House or the member when he has returned to the House.

MR. BARBER: I have a question on the same subject to the Provincial Secretary, responsible for the B.C. Heritage Trust. I wonder if the minister can inform us what steps, if any, the B.C. Heritage Trust has taken to assess and designate, to recognize in law, the heritage value of this unique stretch of Canadian rail, and whether he could report to the House today any steps he or the Heritage Trust have taken to attempt to re-establish a moratorium and to stop the basically irrevocable tearing-up of the track, the ties and the roadbed that will inevitably result if the CPR has its way and the track is ripped up and the scrap sold to Japan, which is the current plan. Can you tell us what you and the Heritage Trust have done to prevent that?

HON. MR. WOLFE: I would like to thank the member for giving notice of this question to give us an opportunity to look into the matter. I think the first thing that should be explained is that CP Rail has put out a tender on this proposal to recover the track. This tender does not close, as I understand it, for another 30 days, at the end of the month. It is not correct to say that today there are elements of this being removed. It would be in the next period of time, and I just wanted to explain that fact.

From the point of view of the Ministry of the Provincial Secretary, the matter of this being considered as a heritage matter did not come to my attention until the Kettle Valley Rail Heritage Society telexed me on May 30. I could only say that they have not yet received what you might call a formal application in this regard. This is not to get around the question, but the response to that Telex is such that it could not be considered a practical measure for a heritage designation.

For the information of the members, I would like to perhaps further read into the record the response by the Minister of Industry and Small Business Development to this question, which was directed to this society by Telex on that same date. It reads as follows:

"I respond to your Telex dated May 30, 1980, and to Telexes similar in content which you have sent to the hon. Premier and the hon. Pat Jordan.

"I would advise that I have considered the contents of the Kettle Valley feasibility study to which you make reference. I would reiterate the position of the government on this matter, which I made known publicly last August, that the government of British Columbia had prevailed upon the CPR to keep in place the railway tracks between Penticton and McCulloch until June 1, 1980. In addition, through the travel industry development subagreement, the provincial government has shared the cost of the feasibility study, in the amount of $42,000.

"As has been made clear throughout, our purpose has been to assist your organization or other private sector interests to determine whether or not you wish

[ Page 2757 ]

to proceed with a proposed scenic tourist railway. In any event, the government is in the process of negotiating the possible acquisition of the right-of-way, minus the track, between Midway and Penticton for a variety of public purposes."

Mr. Speaker, I'd like to table that reply submitted by the minister on May 30.

In further response to the member's question and just an initial look at this consideration, you're now speaking about some 115 to 120 miles of right-of-way in trackage. I think we'd have to say that this is simply not suitable for heritage designation at this point in time, in the view of the staff. In other words, it could not be regarded as a heritage project as such. I think the member should appreciate that to designate a site of that size under the heritage act would involve substantial financial commitments, let alone other considerations under the Heritage Trust. As I understand, from information to be tabled here very shortly, the cost implications of this consideration enter into the $25 million to $30 million exposure. In other words, from a Heritage Trust point of view, by making a designation, I would say that we would immediately expose the trust to financial obligations far beyond its means to consider. I've given this response just briefly to the Telex I received on May 30 last. Beyond that, I think I can only indicate on behalf of my ministry and the heritage conservation branch that that's just an initial response to this request.

AIR-SEA RESCUE SERVICES

HON. MR. ROGERS: Yesterday the member for Prince Rupert (Mr. Lea) asked a question of the Minister of Intergovernmental Affairs (Hon. Mr. Gardom), but the area falls under my responsibility more than it does under his, so I'm taking the opportunity to respond. This is about air-sea rescue, and representations by the provincial government to the federal government. The Premier discussed it on June 19 last year with former Prime Minister Clark. I discussed the matter with Fisheries Minister Romeo LeBlanc when we met in March of this year, and I discussed it again on Saturday with the federal Minister of Environment, Hon. John Roberts.

MR. LEA: I'd like to ask the minister what, in a general outline, British Columbia's position is, in terms of air-sea rescue.

HON. MR. ROGERS: We'd like to see the matter improved. Part of the problem that I identified to both of the federal ministers, Mr. LeBlanc and Mr. Roberts, is the fact that there are so many different areas of discipline involved: the RCMP's marine division, the Coast Guard, the Canadian Armed Forces under the DND. I might tell you, the matter is on the agenda for the conference — assuming I'll be able to get there in September; I guess you'd have to get confirmation from your House Leader to find out whether we'll still be sitting in September — in Charlottetown, when this will be discussed between the federal and provincial governments.

STIKINE-ISKUT TOURIST FACILITIES

MR. PASSARELL: I have a question to the Minister of Tourism. What steps has the minister taken to protect the tourist facilities in the Stikine Valley in light of the proposed Stikine-Iskut transmission corridor?

HON. MRS. JORDAN: I appreciate the member's question, although I'm not quite sure what he means. Could you be more specific about what tourist aspects you think you're referring to?

MR. PASSARELL: There are approximately six tourist facilities in the Stikine-Iskut valley. The question, again, to the minister is: what steps has the minister taken to protect the tourist facilities in that valley from the proposed Stikine-Iskut transmission corridor?

HON. MRS. JORDAN: Has the member any specific facility to refer to which he feels is threatened?

MR. PASSARELL: Mr. Speaker, the one tourist facility I bring to the minister's attention is Mr. Willy Williams', which will be right in the proposed Stikine-Iskut transmission corridor. Does the minister know the area I am talking about, the Stikine-Iskut transmission corridor — or any tourist facilities in the north?

HON. MRS. JORDAN: I would ask the member, with great respect, whether he knew what he was talking about. If you would be so kind, if you have a constituent with a problem, I would very much appreciate knowing the constituent's name and the details. Perhaps then I could do his work for him.

ARCHAEOLOGICAL SITES

MR. HANSON: Mr. Speaker, I have a question for the Provincial Secretary. On March 13 in question period I pointed out to his colleague, the Minister of Transportation and Highways (Hon. Mr. Fraser), that there are four archaeological sites representing the Indian history of the lower mainland that are still intact, and that one of these is on the approach to the Annacis Island bridge. The minister took it on notice and has not reported back. I'd like to ask you, as the minister responsible for heritage resources in this province, what steps you have taken to ensure that the proper investigative work is carried out at that particular site. The summer is proceeding and if the work is not done over the summer and work proceeds on the construction of the bridge without that, we will lose irretrievable heritage information.

HON. MR. WOLFE: Mr. Speaker, if my recollection is correct I have already dealt with this matter, at the request of either the member or some other person. I have already received a report on the matter from the archaeological people in the heritage branch. They are prepared to make these investigations that the member is referring to. I would be happy to supply him with a copy of that information.

MR. HYNDMAN: On a point of order, and with respect to the point raised by the member for Nelson–Creston (Mr. Nicolson), in considering your opinion, Mr. Speaker, may I ask you to consider Beauchesne, fifth edition, page 74, paragraph 217. It outlines the practice which as deputy Whip on the government side I have followed, and it clearly out-

[ Page 2758 ]

lines that Whips are entitled to take steps to assemble their members before the final stating of the question.

MR. NICOLSON: On the point of order, I would respectfully submit that what the member is suggesting is that we go by standing order 1, which is that "in all cases not provided for hereafter" — that is, in the following standing orders — "the usages and customs of the House of Commons of the United Kingdom of Great Britain and Northern Ireland as in force at the time shall be followed as they may be applicable to this House." It has also been established that Beauchesne, which relates to the federal House of Commons, is followed where these rules are silent. But as it is a rule in the red book, Mr. Speaker, I would submit that you not look too much further.

Hon. Mr. Wolfe tabled the Telex to which he referred during question period.

Introduction of Bills

MISCELLANEOUS STATUTES
AMENDMENT ACT (NO. 1) 1980

Hon. Mr. Williams presented a message from His Honour the Lieutenant-Governor: a bill intituled Miscellaneous Statutes Amendment Act (No. 1) 1980.

Bill 34 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. Mrs. Jordan asked leave to table the TIDSA report: Kettle Valley Feasibility Study for a Scenic Railroad under Canadian-British Columbia Travel Industry Development Subsidiary Agreement.

Leave granted.

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. LOCKSTEAD: I did want to follow up with a few questions. Some of these matters have been raised in the Legislature, but I don't think we have received, in my view, appropriate answers from the minister. I want to say first of all, though, that I'm a bit disappointed that the Minister of Industry and Small Business Development ducked out of the House immediately the vote was taken in order to avoid answering questions in this House on a very important topic relating to the question that we're about to discuss here. Where was he? Certainly the minister can spend 15 minutes in this House answering questions. I'm extremely disappointed in the performance of that minister.

MR. CHAIRMAN: Hon. member, we are in committee on vote 103, the estimates of the Minister of Forests, and our discussion must relate to that vote. The member for Mackenzie continues on vote 103.

MR. STUPICH: He was the one who said: "Ask Phillips." How can we ask him?

MR. LOCKSTEAD: My colleague makes a very good point, Mr. Chairman. The Minister of Forests said yesterday in reply to certain questions posed to him: "Ask Phillips. Ask the Minister of Industry and Small Business Development those questions." We were prepared to ask the minister those questions today and he ducked out of the House. Anyway, I will get back to vote 103.

The Minister of Forests did reply to some questions I posed last week and did tell us that certain timber would be allocated to the proposed flitch and chip mill at Ocean Falls. He didn't say when or where, but he said that these timbers would be allocated, and I believe him. I hope that that project will proceed on time.

One of the questions I wish to pose to the minister this afternoon is this: I would like to know when the TFLs that Crown Zellerbach acquired when they purchased the Ocean Falls Corporation some years ago expired. Did those TFLs expire in 1978, and were they renewed at that time? Those are the TFLs that the Crown Zellerbach company acquired when they purchased the Ocean Falls Corporation. What year was it? Was it 1977, 1978 or 1979? It is a perfectly valid question to ask the Minister of Forests, Mr. Chairman, and I see he is in the process of getting the answers from his deputy.

Pursuing this Ocean Falls thing for just a moment, first of all in terms of what happened in the Legislature late yesterday afternoon, I was amazed to hear that the customers of the Ocean Falls Corporation knew very early in March that the government was planning to shut down that operation. Yet in spite of that, the Premier told the residents and the union in that community at a meeting on January 16 of this year that they would not — this is 103, Mr. Chairman — put a foreclose sign on the door of Ocean Falls without discussing the issue with the residents first. As a matter of fact, the Premier didn't even have the courtesy to discuss that issue in this Legislature prior to making that announcement on April 6 of this year. Yet the customers of the Ocean Falls Corporation were apparently told early in March that the corporation would be closing down June 1.

I did have the opportunity of talking to Mr. Williston yesterday, president of the B.C. Cellulose Company and chairman of the board of the Ocean Falls Corporation. We discussed, among other things, timber allocation. This is relating to 103, Mr. Chairman. He told me that he had heard rumours that the Los Angeles Times was considering suing the Ocean Falls Corporation for breach of contract. Yet after that conversation with Mr. Williston, in a phone conversation with the solicitor for the Los Angeles Times, he told me he had direct contact with the chairman of the board of the Ocean Falls Corporation, who in this case is Mr. Williston. Somebody is not telling the truth here, Mr. Chairman. I am just trying to ask the minister if he could set us straight on this story.

MR. CHAIRMAN: Hon. member, the questions and the whole discussion in committee must relate to the minister and the department whose estimates are before the committee. Our standing orders indicate that we cannot discuss a grant on which the committee has resolved or a grant which has not

[ Page 2759 ]

yet been brought forward. That is clear in the understanding of the committee system. With that said I would ask the hon. member if he would contain his debate, as our standing orders indicate, to vote 103, the administrative actions of the Minister of Forests.

MR. LOCKSTEAD: Thank you, Mr. Chairman. To continue, this does deal with some of the reasons why the Ocean Falls Corporation was put out of operation by order of this government on June 1.

Wood allocation is one of the problems. I posed a specific question to the Minister of Forests and I expect that we will be receiving an answer, because it was Mr. Williston as well who told me again, yesterday, and said so on the radio again this morning, that no wood had been allocated to the Ocean Falls Corporation. That is one of the reasons why they had to go out of business. The fact is that, in my view, there was wood available. Wood fibre could have been allocated to that corporation. I am accusing this minister and this government of making a conscious decision to deprive the Ocean Falls Corporation of its needed fibre supply in order that that operation would become uneconomic in order to close it down because it was an NDP operation. That is what I am accusing this government of. I expect the minister to get up and answer those questions. We have conflicting statements coming from Mr. Williston and from certain members of the government, some of whom run out of the House when question period comes up.

You know, Mr. Chairman, that if the Los Angeles Times decides to pursue legal action for breach of contract with this government, it could cost the taxpayers of this province, based on the current price of pulp and paper at $440 per ton, somewhere in the neighbourhood of $22 million. It could cost more. It could cost up to $26 million or it could be as little as $16 million. Still, that is a great deal of money. The anticipated revenue loss of the Ocean Falls Corporation because of lack of fibre supply was going to be, in the government's view, about $13 million this year. This means that the government could have kept Ocean Falls in operation for this next year, and further indicates to me, quite frankly, that somebody is not telling the truth — not telling us the whole story, to be more charitable. They're not being candid with us, because we do have conflicting statements from the chairman of the corporation, from the government and from other people on this whole situation.

While we're discussing this topic, perhaps the minister would be good enough to tell us how many other orders or breaches of contract Ocean Falls Corporation subjected their customers to. Are there going to be other impending lawsuits? We could be in the $50 million range. Who knows? Perhaps the minister would be good enough to answer some of these questions.

I want to tell you, Mr. Chairman, that the NDP government, when we were the government, honoured our contracts. We kept our commitments. This government is a government that doesn't honour their contracts and doesn't keep their commitments. Their word is not trusted anywhere in the world now. Mr. Chairman, I hope the minister will get up and answer some questions.

HON. MR. WATERLAND: Mr. Chairman, the member goes into a great deal of discussion on the Ocean Falls Corporation. The Ocean Falls Corporation as such reports to the Minister of Industry and Small Business Development (Hon. Mr. Phillips). The member asked again about the timber supply study that is taking place right now with the cooperation of the Ministry of Forests staff and consultants of the Ocean Falls Corporation. I can advise the member — as I have done over the last several days — where we are on that study. It is my understanding now that the final report of the consultant and our staff will be presented to the Ocean Falls Corporation and to Mr. Williston on June 9. I believe I reported this in previous discussion on the subject. It will then be discussed with Mr. Williston of the Forest Service on June 11, and my understanding is that the report appears to be quite favourable in the chances of making some of this wood that has been classified as uneconomic available to the Ocean Falls Corporation so that they can get on with their experiment of harvesting techniques and the operation of a flitch and chip mill at Ocean Falls.

Other areas discussed by the member are more properly discussed under the vote of the Minister of Industry and Small Business Development.

MR. LOCKSTEAD: Or question period.

HON. MR. WATERLAND: Or in question period, if you wish.

MR. LOCKSTEAD: But he runs out at question period.

HON. MR. WATERLAND: Certainly, Mr. Chairman, it's not within my responsibility and therefore I cannot respond to the member.

MR. KING: The minister insists on holding that he bears no responsibility for ensuring that contracts which are entered into for timber products supplied to either offshore customers or customers within North America south of the 49th parallel are honoured. I find that rather curious, Mr. Chairman. Social Credit members on that side of the House are very fond of travelling the length and breadth of this province decrying the fact that industrial relations strife, whether they be strikes or lockouts, interferes with British Columbia's reputation as a secure supplier of timber products abroad. We have to curb these terrible work losses. Otherwise it may tarnish our image for competing in the international marketplace for the export of our products.

On the other hand, we have here a Crown corporation, presided over by a cabinet minister which had plans underway to close their pulp and newsprint plant, entering into an agreement with an American newspaper, namely the Los Angeles Times, for the supply of certain newsprint. This contract was renewed last year, and that contract has apparently been breached by the closure of Ocean Falls, which, in effect, Mr. Chairman, was not only a cabinet decision, but certainly a decision that hinged upon the timber supply over which the Minister of Forests has jurisdiction. The minister says: "Well, that's of no interest to me. Go to the minister of small." Well, Mr. Chairman, I submit that the Minister of Forests has a mandate and an obligation to ensure that there is efficiency in the utilization of forest products and efficiency and reliability in every aspect of the forest industry from harvesting to processing to marketing — that's what we're dealing with here, the marketing of a resource which was contracted for and then breached with the government's acquiescence; and the minister declares himself devoid of any responsibility.

[ Page 2760 ]

Mr. Chairman, division (6) of the new Forest Act, which the minister introduced, deals with applications for pulpwood agreements, which is basically supply — it may not precisely fit the terms that Ocean Falls found themselves in; nevertheless, under this section the minister is given broad powers. Let me quote, Mr. Chairman:

"(1) Where the minister determines that (a) wood chips, sawdust, shavings, hog fuel or other residues or byproducts of timber processing are produced in an area of the Province; or (b) timber below the standard of utilization then in effect for sawmilling purposes exists on an area of Crown land in a public sustained yield unit or a timber supply area in the Province, or both, in sufficient quantities to warrant the continuance, establishment, or expansion of a timber processing facility, the minister may designate the area as a pulpwood area and may enter into a pulpwood agreement for that area.

"(2) Where the minister makes a determination under subsection (1) he may, on request or on his own initiative, by advertising in the prescribed manner, invite applications for a pulpwood agreement."

Now if the minister is given that kind of mandate to determine whether there is sufficient low-grade timber and residue that is not being fully utilized, that he can precipitate by his own initiative plant expansion and plant continuance, how is it that he denies any responsibility that Ocean Falls, this Crown corporation, after having entered into a major newsprint supply contract with the Los Angeles Times, closed their plant arbitrarily, breached the contract of supply to the Los Angeles Times and in so doing subjected this province to the potential loss of millions of dollars in damage claims?

[Mr. Hyndman in the chair.]

The minister has a clear mandate and a clear responsibility in the total scheme of forest management, as I indicated earlier, from the harvesting process through the processing and the marketing, to ensure that proper utilization takes place, to ensure that waste material is utilized to the maximum, optimum level. He denies all that; he wants to slough off the responsibility for proper management and for protecting the reputation of British Columbia as a secure and reliable supplier to offshore and North American customers. He wants to shift all of that to the minister of industry, small business and small other things — I forget the appropriate title of that minister, Mr. Chairman, and you'll excuse me for doing so. I mean no slight upon that minister, but he knows what he is, and that's perhaps why he ran out of the House in question period today.

Mr. Chairman, the minister is clearly responsible not only for the protection of our forests; he's responsible for the maximum utilization of the resource, and certainly and clearly he has an obligation to protect the reputation of British Columbia as a source of forest-product supply to all customers. What are offshore customers going to feel now that they have seen a government agent with the apparent blessing of cabinet, certainly with the blessing of a former Social Credit cabinet minister who is the chief administrative officer of the Ocean Falls Corporation, and with the passive acquiescence of this Minister of Forests, participating in wantonly breaching a contract of supply?

I submit, Mr. Chairman, that that kind of irresponsible action will not only subject the people of British Columbia to very major loss in terms of damage claims, but will also do irreparable damage to British Columbia's image as a secure and mature supplier of forest products all over the world. It's bad enough when some unforeseen circumstance such as a work stoppage, extended fire season or market conditions interferes with our ability to maximize our export of products flowing from the forest industry, but to have it abridged by an apparently deliberate willingness to breach a contract that had been entered into, and then have the minister who presides over all of the forest industry and who is clearly responsible for its efficient utilization in the public interest, declare disinterest, declare himself devoid of any responsibility, is either crass ignorance of the role which he has been appointed to play or complete irresponsibility.

What steps does the minister intend to take to ensure that the contract with the Los Angeles Times for newsprint supply will be fulfilled? Has he entered into any discussions with any alternate supplier to see whether or not a supply could be provided at the same price which was contracted for? Has he entered into any discussion, in any way, to ensure that our credibility as a supplier of paper, newsprint and various lumber products is not going to be impaired and tarnished forever by this very, very unfortunate incident? I would appreciate knowing what the minister intends to do.

HON. MR. WATERLAND: The corporate dealings of the Ocean Falls Corporation are carried out by the corporation. The minister responsible for the Ocean Falls Corporation is the Minister of Industry and Small Business Development.

As Minister of Forests I have, as I've said a number of times in the Legislature, had my staff work with consultants working for the Ocean Falls Corporation in an attempt to identify a wood that could be made available through an appropriate type of tenure. The most appropriate type for the short-term basis of the experiment would be a direct timber sale licence, which can be carried out under the terms of the Forest Act without competition. A pulpwood agreement would not be an appropriate vehicle at the present time. A pulpwood agreement, as the member well knows, requires public hearings, and others are at liberty to enter into competition for a pulpwood agreement. That is not the most appropriate vehicle at this time. If the experiment is successful, it may well be that a pulpwood agreement in combination with a forest licence would be an appropriate vehicle. Attempting to go that route is premature at this time.

I would say again that my responsibility to the Ocean Falls Corporation is the same as it is to any other company working in the forest sector, and that is the administration of Crown timber. I've advised the members that we are doing just that. The final report of the consultants and the Ministry of Forests staff will be in the hands of Mr. Williston on about June 9. We are proposing that the Forest Service then meet with Mr. Williston a couple of days thereafter. Our understanding is that the report will be favourable. We can then proceed with a special experimental timber sale to Ocean Falls Corporation without competition. There ends my responsibility to the Ocean Falls Corporation, Mr. Chairman. The Minister of Industry and Small Business Development is the appropriate minister to be asking the other questions of.

MR. LOCKSTEAD: I did ask the minister about the allocation, reassignment and renewal of TFLs. As you know,

[ Page 2761 ]

when Crown Zellerbach purchased the Ocean Falls company many years ago they acquired with that company large tracts of timber under various tenures — TFLs, what have you. Some of those TFLs expired — I don't recall the exact year; I think it was 1978, but it could have been '78, '77 or '79. I want to know from the minister if, after the leases were expired, all those TFLs were renewed, and why, since those TFLs were assigned to the Ocean Falls company for wood to supply their plant, they were not reassigned to the Ocean Falls Corporation when they came up for renewal so they would have an assured fibre supply. Those TFLs were assigned to the Ocean Falls Corporation to supply that company with wood, not Crown Zellerbach. I've nothing against the Crown Zellerbach company. They have, I'm sure, their own sources of wood supply; they must have or they wouldn't be in business, would they? So why weren't those TFLs reassigned to the Ocean Falls Corporation when they expired?

I was not suggesting for a moment that the minister could have or would have contemplated breaking a valid, legal contract on the 21-year leases or the type of tenure it may have been at the time. There were five or six different types, as the minister well knows. Perhaps the minister could tell us when these TFLs were renewed. I'm assuming that they were renewed to Crown Zellerbach Canada Ltd., not reassigned to the Ocean Falls Corporation. Perhaps the minister could answer that, Mr. Chairman.

HON. MR. WATERLAND: When Ocean Falls Corporation was acquired from Crown Zellerbach by the NDP government, there was considerable legal discussion at the time as to whether it was appropriate or not to transfer licences to the Ocean Falls Corporation; I believe this got to the courts at times. There are a number of licence forms involved. The old temporary tenures, which are one-time tenure for the harvest of timber that happens to be on a site.... These receive various treatments under the Forest Act. Where timber sale licences — and I guess some timber supply to the Ocean Falls Corporation when it was owned by Crown Zellerbach was through tree-farm licences as well....

I'm afraid that I can't help the member with individual licences and where they are. They are in various stages of being rolled into either the new form of tenure.... As the member knows from the Forest Act, old temporary tenures within a tree-farm licence.... When they are used as an old temporary tenure, it will become a part of the tree-farm licence, and those outside of the tree-farm licence become Crown timberland. So the various things that happen are all spelled out very clearly by the Forest Act. I would have to research it, because there are quite a number of licences involved. If the member wishes it, I will certainly get back to him with the details of just where we are on those various licences.

MR. KING: Mr. Chairman, I don't accept the minister's answer at all with respect to his role in Ocean Falls. The minister clearly has a mandate under the Forest Act, which he introduced a short time ago, to properly manage the forest industry in the province of British Columbia. It includes some very broad powers: powers to require the continuation of an operation; powers to grant timber rights, conditional on proper processing facilities. If the minister asks us to accept that he exercised those powers in harvesting and processing and that he's completely devoid of any authority to ensure the proper marketing of the resource, then I have to say he has a shallow understanding of his responsibilities.

Be that as it may, I guess, Mr. Chairman, we can't really expect very decisive action from this minister. He's prepared to let our reputation be tarnished. He's prepared to let the contract for the supply of newsprint go down the tube, with possible damage claims against the province of British Columbia and the loss of millions of dollars of the taxpayers' money. All he wants to talk about is: "Oh, well, maybe we'll give them some timber for a chip and flitch mill." Well, that in no way is going to provide the contract that was negotiated in good faith by the Los Angeles Times and the Ocean Falls Corporation for the supply of newsprint. The minister simply refuses to address himself to that problem. His colleague runs out of the House for fear he might get a question about it, Mr. Chairman. What we have here is a whole government on the run, without the confidence or the character to face up to their responsibilities. I think that's absolutely shocking.

Yesterday when the minister got up to respond to my friend, the Leader of the Opposition, regarding this question of Ocean Falls, he made some statements that I want to refer back to him. I want to ask him for clarification on what he meant. I quote from Hansard, page 758-1:

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 corporation 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.

Now I want to ask the Minister of Forests precisely what he was implying when he said he didn't know what the former minister's motivations were. Before I ask him to answer, I want to comment briefly on his allegations of conflict of interest.

The Minister of Forests, under the NDP administration, presided over the Forests portfolio — Lands, Forests and Water Resources, I believe it was in those days — and he also presided over, from the cabinet level, a Crown corporation called Ocean Falls, which was purchased on the open market by the New Democratic Party, not expropriated, not seized, in the fashion that the Social Credit government of the former Bennett had seized and expropriated B.C. Electric and Black Ball Ferries. Rather, Ocean Falls was purchased on the open market. What we had was a duly elected cabinet minister representing the public interest in a Crown corporation at the cabinet level wherefrom any profits and any appreciation of assets flowed to the public. Now one can argue — this may be a philosophical difference between the minister and our side of the House — that that is an unfair advantage over the private sector. Fair enough, if you want to make that argument. But when the minister uses the words "conflict of interest," he implies that the minister himself was in a position to benefit in some way by presiding at the political level and over the public corporation at the same time. I say that that is an absolutely untrue statement, Mr. Chairman. I say that it is a rather poisonous slander of a former member of this House. I ask the minister to spell out precisely what he means. He said: "I don't know what that minister's motiva-

[ Page 2762 ]

tions were. " Well, I can tell the minister, for his edification, that no member of the New Democratic Party has ever been charged in a court of law with impropriety regarding or surrounding his cabinet portfolio, either for accepting kickbacks or bribes with the issuance of forest licences, or for any other misdemeanour, be it of graft nature or any other, or petty theft....

HON. MR. CHABOT: What about provincial treasurer Fines from Saskatchewan?

MR. KING: I'm dealing in the province of British Columbia, Mr. Chairman.

HON. MR. CHABOT: What did the judge say about Williams? What did the judge say about Dowding?

MR. CHAIRMAN: Order!

MR. KING: Well, if the mouthy member for Columbia River has some charges to make regarding any member of this House current or past, let him have the gumption to get on his feet and do so. But I dislike these poisonous allegations and aspersions being cast on people when they lack the intestinal fortitude to get on their feet and make them.

HON. MR. CHABOT: Sy Kovachich — who lied there?

MR. KING: Well, you should know who lied, Mr. Minister. Perhaps you're more familiar with that pattern than people on this side of the House.

MR. CHAIRMAN: The member for Shuswap–Revelstoke has the floor on vote 103. Would all members give him their closest attention?

MR. KING: I appreciate that, Mr. Chairman. The members on that side are fond of trying to divert the heat from one of their colleagues when he is in some trouble, rather than having the confidence in him to answer for his own sins of omission or whatever they be.

The minister has made some very objectionable statements regarding the administration of Bob Williams. If you don't like the man and you disagree with his politics, fair enough. But, Mr. Minister, if you are implying some improper motivation or some wrongdoing in terms of the private life of that individual, then I challenge you to get on your feet and spill it out rather than making poisonous slurs and allegations in the fashion that seems to be indicated from your comments yesterday.

HON. MR. WATERLAND: Mr. Chairman, I don't know what the member for Shuswap–Revelstoke appears to be so bent out of shape about. In my remarks yesterday I said that in my view there is a clear conflict of interest when a minister is responsible for a Crown corporation which is a consumer of wood and is also the minister responsible for the allocation of wood. It seems very clear to me that he is both landlord and tenant and he'll beat himself coming around the corner. That must be apparent to everyone. Our government will not deal in that manner. Our Minister of Forests will not be directly responsible for its own corporation that uses wood. It is that simple.

The member signed a contract to the Central National Corp. What his motivation was, I don't know. The reason I asked the question was that Ocean Falls Corporation, at that time, did not have a secure supply of wood. What vehicle was that minister to use in the Forest Act which would provide a supply of wood to secure that contract? It's the same question you're asking us now, Mr. Member. I certainly never implied any impropriety on the part of the former minister. That member seems to be reading things into what I said that were not there at all. I don't know what he's so upset about, Mr. Chairman, but I don't see how I could function as a minister responsible for the disposition of Crown wood and at the same time be responsible for a corporation that uses wood and not find myself in a very difficult position at many times.

As a matter of fact, the member will recall that when our government was first formed I was appointed Minister of Forests. At that time I was the Minister of Mines and Petroleum Resources as well. For a short time I had been assigned that responsibility and I saw a very clear conflict of interest there. I asked the Premier to please appoint some other minister responsible for these Crown corporations in the forest sector because I couldn't deal that way. I think it's very clear to members that there must be some conflict when a member has a dual responsibility like that — the giver on one hand and the taker on the other. Certainly there must be a conflict there. I think that is a very inappropriate way to have the responsibilities of cabinet distributed among cabinet members. As far as renewing the contract, you accused Mr. Williston of renewing the contract when he didn't have a wood supply and me of not supplying the wood. That former minister was in exactly the same position. He signed a contract with Central National Corp. — for some reason before it was necessary — and he didn't have a wood supply for the Crown corporation. There was no vehicle in the Forest Act at that time for making a direct allocation of wood without amending or at least breaching the act. Those are the questions I raise.

MR. KING: I don't feel that I'm bent out of shape over this issue. Certainly my mind is not bent out of shape, but I detect that in some of the statements that come from the other side. The minister's wording, as I read it from the Blues, questions the motivation of the former minister. Mr. Chairman, I think that if I questioned the motivation of any member of this House you would direct me to withdraw any such inference because that is unparliamentary and considered a slight against a member of the Legislature.

HON. MR. WATERLAND: He resigned from the Legislature to make room for your leader.

MR. KING: That is quite true. The former Minister of Forests is not in the Legislature anymore. If he were he would be quite capable of looking after his interests and his good name. Since he is not here I see no reason that we should not extend to him the same kind of courtesies that we demand for ourselves. What we demand for ourselves is that no member of this House has the right to call into question the motivation of another. That is the parliamentary rule. Just because the member is not in the House at this time, I see no reason why he should not receive the same consideration and the same courtesy from the minister.

The minister talks about the conflict of interest. Provided he spells that out in terms of a principle their government

[ Page 2763 ]

disagrees with, fair enough. I understand that. I do not consider it a conflict of interest in the traditional fashion of that term when the minister is exercising a public responsibility and any benefit flowing from his position flows to the public, whom he represents. Conflict of interest does seem to imply that an elected person, in his public duties, stands to gain some private benefit. If the minister is not astute enough to understand that, then I accept his misunderstanding. But there's an unfortunate inference in the term. He has given me an assurance that he in no way meant to cast that aspersion on the former minister, and I accept that. Fair enough.

Mr. Chairman, I still disagree with the minister in his non-role on the Ocean Falls thing. He makes the point that the former Minister of Forests under the NDP government entered into a contract for the supply of pulp and/or newsprint when there was a shortage of timber supply to that company. He questioned whether or not the authority resided within the Forest Act of that time for the minister to exercise that discretion. Well, maybe that's a good question. Maybe Bob Williams took his cue from Ray Williston, who is the former Social Credit minister.

I recall coming to government in 1972 and a fairly major sawmill from the interior of the province coming to me and saying: "Hey, we have to close down and lay off 300 men unless we get a timber supply." And I said: "Well, how can that be? You have just embarked on a $2.5 million expansion of your plant. Are you coming here to tell me that you undertook a $2.5 million capital investment in expansion of plant without a secure supply of timber?" They said: "It would appear so." And I said: "Well, I have great difficulty accepting that. I know you as hard-nosed businessmen. I know that you wouldn't put out that kind of capital investment without some indication that timber supply was going to be forthcoming to you." They said: "Well, we did, you know, have a kind of tacit indication from the minister that something may be coming." That was just before the election in 1972. I think they finally got their timber supply under this minister, ironically enough. Then they sold out to another firm.

The point that the minister makes is something that's been going on for a good long time in the province of British Columbia, and I agree it's something that is not desirable in terms of ministers acting without proper authority under the act in the allocation of timber. I've made our position clearly known to the minister in debate on the act, and in subsequent debate in this House, that I feel there should be wide-open competition for timber in the province of British Columbia.

The minister says the problem with the Ocean Falls thing is.... He said: "Well, if they went under the pulp harvesting licence, there would have to be open hearings." What's wrong with that, Mr. Minister? Oh, it's complicated and takes a little longer, but that's the way you secure the public interest. I know the minister doesn't believe in that. I know how he would rather do business through an exchange of correspondence with people like Mr. Ainscough of MacBlo on the renewal of tree farm licences, changing conditions and even changing the names, and replacement of TFLs 20, Tofino, and 21, Alberni — all conducted through private negotiations between that minister, his staff and that private corporation, and not one public hearing, one tender, or one chance at public bid, but all done in secrecy — the roll-over of tree farm licences, major timber supply areas in the province of British Columbia, all within the secrecy of that minister's department.

He gets up and says about this little pulpwood supply for Ocean Falls: "Oh, gee, we couldn't do that. It would be cumbersome to involve the public in a discussion on supply. Don't involve them; just lay off 300, 400 or 700 workers at the plant, close down the town and let them go home." Wouldn't it be a terrible shame, Mr. Minister, to have some public debate regarding this policy, for you centralists, for you bureaucrats who want to dictate policy and impose it on everybody rather than having any dialogue?

Well, Mr. Minister, you held that it was a conflict of interest when a cabinet minister served as Minister of Forests and served the public interest also as the board member on a Crown corporation, despite any preferential benefits that might flow from that relationship going to public revenue and to the public treasury, but you don't find any conflict at all about sitting behind closed doors, along with your staff, and deciding that MacMillan Bloedel shall have tree-farm licence 20 and 21 rolled over through a perpetual tenure arrangement without public hearing, without any guarantee to the public that they are receiving fair value, without any vestige of competition, without any opportunity for the small indigenous B.C. operator, without any guarantee to the public that the fisheries and the environment and the wildlife will be protected. You sit there smug and secure that you, in isolation and in secrecy, can serve the public interest.

I think the people of British Columbia are going to have a message for you when the next election rolls around, Mr. Minister.

MR. BARRETT: I have some questions to ask of the minister; I know I have the minister's full attention. Could the minister tell me whether or not his ministry has been asked to help in any way to resolve the problem created by the lack of newsprint now for the Los Angeles Times? Has his ministry been asked in any way to help them resolve this problem — you know, an inventory analysis or production analysis or anything like that?

HON. MR. WATERLAND: Mr. Chairman, I as minister have not been asked, and my deputy advises me that he has not been asked.

MR. BARRETT: Could the minister tell me when he first learned of this problem? Was it yesterday that he was first aware?

Through you, Mr. Chairman, perhaps the minister didn't hear me; sometimes I speak too quickly. Could the minister let me know when he first heard of this problem of the shortage of newsprint and the breaking of the contract with the Los Angeles Times?

HON. MR. WATERLAND: Mr. Chairman, if a problem exists, the first I heard of it was when the member discussed it in the Legislature yesterday. As I told the member, I do not have responsibility for the Ocean Falls Corporation, and it would certainly have been brought to the attention of the minister responsible long before it would come to my attention.

MR. BARRETT: The first you knew that there might have been a problem was when Her Majesty's loyal Leader of the Opposition brought this problem gently to your attention yesterday, is that correct? That's right, thank you. And you tell me that your ministry has not been asked to help in any

[ Page 2764 ]

way — even perhaps by an inventory survey or production capabilities of some other plant. There has been no call upon your office to help with this problem, which you just learned about yesterday, that may not be in existence. Well, that's okay.

HON. MR. WATERLAND: I answered the questions.

MR. BARRETT: You did; you're a good boy; you're a nice boy; thank you very much. Yes, he answered the questions today; we're getting somewhere. Really, you're a nice fellow. Don't get nervous, I'm just getting around to helping you.

Did you ever have any discussions with Mr. Williston about the possibility of Ocean Falls running out of timber or fibre and therefore in the future having problems meeting existing contracts?

HON. MR. WATERLAND: Mr. Chairman, the responsibility for the Ocean Falls Corporation — the corporate operation of that company — lies with the Minister of Industry and Small Business Development. As I said yesterday, I've been discussing with Ocean Falls Corporation, through the Forest Service, the possibility of timber availability for the last couple of years, but it has never been related to any corporate dealings of the company outside of British Columbia or to the sales of its products. My responsibility lies with the administration of Crown timber.

MR. BARRETT: Mr. Chairman, I asked the minister if he had any conversations with Mr. Williston personally about this problem of shortage of timber and fibre supply for the Ocean Falls mill.

HON. MR. WATERLAND: Mr. Chairman, that's not what the Leader of the Opposition asked. He asked if I had discussions about the fibre supply as it relates to the fulfilment of a contract, and I answered the question.

MR. BARRETT: Well, if I didn't ask it before, I'm asking it now. Through you, Mr. Chairman, on vote 103, did the minister have any conversations personally with Mr. Williston about the problem of the shortage of timber and fibre for the Ocean Falls mill?

HON. MR. WATERLAND: As I said yesterday, for the last couple of years my staff have been discussing with the Ocean Falls Corporation the possibility of timber supply, and those studies are going on now. The report, which is being developed by consultants of that corporation and my staff, is due, I believe, on June 9. That is the latest information I have.

MR. BARRETT: The minister tells me that he did have conversations with Mr. Williston, who is the chief executive officer of the corporation, concerning the shortage of timber and fibre for the mill. At any time in those conversations with Mr. Williston, did he indicate to you the necessity of guaranteeing a supply of timber and fibre based on existing contracts that Ocean Falls had? Or, during all of those conversations, were you totally unaware that there were existing contracts up to 1984, based on a timber allocation that was not there? Were you aware that those contracts had been signed with the full knowledge that there was no timber to back up those contracts?

HON. MR. WATERLAND: The provision of timber, if available, is the extent of my responsibility to the Ocean Falls Corporation. I told the member — three times, I believe — that I have not discussed with Ocean Falls Corporation, or Mr. Williston, anything related to their contracts, or how their timber supply affects their ongoing contracts. The member could ask me the question twenty times and the answer would be the same.

MR. BARRETT: I'm just trying to be accurate and exact in dealing with what appears to be a very simple problem, and it shouldn't take too long for me, as limited as I am, with no backup staff to help me in these complex questions, such as: "Do you remember meeting with somebody?" So I've got to go through it slowly. I am led to understand by the minister that he did have conversations with Mr. Williston. He did discuss the shortage of timber and fibre. That's fine. That's only proper. But at no time did Mr. Williston say to him: "Look, we have contracts and obligations, and if we don't get timber we can't meet those contracts and obligations." In other words, the minister is stating here in the House that his conversations were purely related to the timber and the fibre, and that at no time did Mr. Williston alert him to the fact that the shortage of timber and fibre could lead to the closure of Ocean Falls and the non-fulfilment of existing contracts. I'm to assume, from what the minister said, that he had no knowledge that that would be a consequence of a shortage of timber or fibre.

If my assumption is wrong, then that's what I want to know. I want to be able to say, in discussing this matter, that the minister assured me that even though he discussed with Ocean Falls their request and need for more timber and more fibre, he was not part of any conversations, related to those discussions, which indicated that if they didn't get the timber and they didn't get the fibre, existing contracts might not be met. Now am I incorrect in that statement — after listening closely to your answers?

You see, Mr. Chairman, that's why I get so mixed up with that minister.

MR. REE: Well, you're mixed up anyway.

MR. BARRETT: Oh, I know, Mr. Member. I'm not a lawyer. I'm just a humble servant of the people trying to find out how this member can ski in June in Victoria — ice skate and slip around. What he's trying to do is leave me with the impression — never mind anyone else...he's trying to leave you and me with the impression, Mr. Chairman, that he did discuss with Mr. Williston, in his capacity as chief officer of the Ocean Falls Corporation the fact that Ocean Falls was short of timber.

Interjection.

MR. BARRETT: We're not dealing with Cargill, or with the fantastic success of the compulsory Heroin Treatment Program. They're next.

HON. MR. McCLELLAND: Sexist.

MR. BARRETT: I've never referred to the gender of any tree, Mr. Minister. I have not referred to the pollen or the

[ Page 2765 ]

birds and the bees. There have been no overtones of any kind of interpretation of generic relationship. I'm just trying to determine the minister's recall abilities. It's got nothing to do with sexist. After a certain age, Mr. Minister, sexism is not a problem with ministers and others.

HON. MR. McCLELLAND: I hear you had a problem in your caucus the other day.

MR. BARRETT: Well, Mr. Chairman, it wasn't a problem of sexism.

MR. CHAIRMAN: The Leader of the Opposition does have the floor.

MR. BARRETT: Yes, that's me, Mr. Chairman. I'm on my feet and I enjoy the kind of interruption from the former Minister of Health.

To come back to the matter at hand, Mr. Minister, would I be correct if I made a public statement outside this chamber saying that the minister stated in the House that although he had discussed the shortage of timber and fibre with Mr. Williston and/or representatives of Ocean Falls, at no time did he discuss with them or they with him the consequences to the existing contract of not obtaining more fibre or more timber? At no time was the need for more timber and fibre to be able to meet existing contracts shared with you or discussed with you. Is that right?

HON. MR. WATERLAND: Ocean Falls Corporation has not, since my term as Minister of Forests, had a Crown timber allocation. Their timber supply has been through purchases either on the market or through private purchases. Ocean Falls Corporation has had a number of proposals to do various things with their plant during our term of office as government. Of course, it has always hinged upon a timber supply. I've advised the House that there's a tight timber supply in the mid-coast. We and our staff in the ministry have been dealing with consultants of the Ocean Falls Corporation in an attempt to define an operating area in timber that is currently classed as economically inaccessible, and that's as far as my responsibility to the Ocean Falls Corporation extends.

MR. BARRETT: Then I'm safe to say, without denial from the minister, that we are to believe that he did have discussions with Mr. Williston about the timber and fibre supply at Ocean Falls but at no time was that conversation related in any way to the need for timber and fibre to keep Ocean Falls going and existing contracts met. Is that right? Is that wrong?

HON. MR. WATERLAND: Over the last couple of years I and my ministry have been attempting to determine whether or not a fibre supply from Crown timber can be made available to Ocean Falls Corporation. It has become apparent that there's an area of wood in the mid-coast classified as uneconomic. My staff and the consultants at the Ocean Falls Corporation have been attempting to identify areas in which they can operate. A report of those consultants is due on June 9. Shortly thereafter, it will be discussed with the Forests ministry. It appears that it is going to be favourable; if it is, then perhaps a timber allocation can be made to Ocean Falls Corporation. As long as I have been the minister the Ocean Falls Corporation has not had a timber allocation. That was the case when it was under the previous government as well. They acquired their timber and fibre supply from purchases either in the log market or private purchases. If they acquire a Crown timber corporation it will be as a result of the procedure that I have outlined to the member.

MR. BARRETT: I want to thank the minister for being so careful in his answers. The minister said that the reports from the consultants will be made available to him on June 9. Can you tell me why, in your opinion, Ocean Falls would close before they had the consultants' reports on their desks?

HON. MR. WATERLAND: I'm sure the member is well aware that the plan of the Ocean Falls Corporation is to install a flitch and chip mill to upgrade wood as it's harvested, to resell it and perhaps provide a supply of chips. If the experiment is successful it could lead to an increase in the cut on the coast as this timber is brought into the economically usable category. There's a possibility that down the road a pulp operation could be established at Ocean Falls based upon what is currently uneconomic fibre.

MR. BARRETT: I thank the minister for his answer. On June 9 the minister will receive reports....

HON. MR. WATERLAND: Williston will.

MR. BARRETT: Williston will receive the reports. You will be familiar with the reports. The government and Mr. Williston will know better on what basis to guide their future policy with an inventory that is being prepared and will be delivered on June 9 for a flitch and chip mill. That is correct. I'm talking about something before that mill. Did you prepare any reports for Mr. Williston or Ocean Falls in the two years that you discussed with them their need for a timber or fibre supply to keep the newsprint operation going? Did you discuss that with them?

HON. MR. WATERLAND: During the period of time that we were investigating the possibility of a wood supply and the state of wood supply on the mid coast, we of course produced a number of reports. I am sure that the Ocean Falls Corporation has been working with the ministry and has copies of the wood supply situation. What it indicated is that presently, in wood that is in the allowable cut, there is not sufficient available, if it could be allocated to Ocean Falls Corporation through some form of licence, to carry on the paper operation. That is why that corporation has decided to go this experimental route to try to increase the wood supply by demonstrating that some of this uneconomical wood can in fact be used.

MR. BARRETT: Then we have the minister saying that reports were introduced indicating that there was not sufficient supply to continue the operation of the newsprint part of the Ocean Falls. Is that right? Could the minister tell me what date, approximately, those reports over the last two years were given to the Ocean Falls Corporation from your department indicating that there wasn't enough fibre and supply of material to keep the newsprint going?

HON. MR. WATERLAND: I can't help the member with any specific dates, I'm afraid. I would say the last

[ Page 2766 ]

summary of the timber supply situation on the coast as it relates to the Ocean Falls Corporation and to other wood users on the coast would be within the last six to eight months; I'm afraid I can't be any closer than that.

MR. BARRETT: Think you, Mr. Minister. Would it be reasonable to assume that people in the industry, including Ocean Falls, knew that you had such studies in process and that they did know before the studies were concluded that there was a problem of a shortage of fibre and timber for the newsprint operation going back to the early seventies? That was publicly known, but your reports in the last six or eight months confirmed what was already knowledge — that there was a shortage of timber.

Do you know what I'm getting at, Mr. Minister? Could I be very candid with you and let you know what I'm getting at?

HON. MR. WATERLAND: Why don't you come out and say what you're getting at?

MR. BARRETT: I think your ministry probably did its job. When asked for information it probably gave information to confirm that there wasn't the timber and fibre supply to keep the newsprint going. There is an honest desire on the part of Ocean Falls to move to the flitch and chip mill which would use material that ordinarily would be discarded. That is what I understand. What it reveals to me is that perhaps the advice from your department, publicly and privately known by Ocean Falls, was ignored. What I'm trying to get at is whether there was any information that your ministry provided that would lead the management of Ocean Falls — specifically Mr. Williston — to believe that when he signed the contract or allowed the contract to be signed in 1978 and 1979 he was going to get the supply to keep the newsprint operating. Otherwise he wouldn't have signed a five-year contract in 1978 and renewed it in 1979.

As I understand what you are saying today, you gave them all the information that they requested. As I understand your position, it was a confirmation of a historical fact — there wasn't enough timber and fibre. Yet the contract was signed in 1978 and renewed in an election year, 1979, to run for five years when, by your own statements here, Mr. Williston must have known that he couldn't fulfill that contract unless he got more of a timber supply. He must have known that. If you tell me that in your conversations with Mr. Williston or with your department none of the motivations for the study, or in any of the discussions on the study you had any knowledge or awareness of the importance of finding a new supply of timber and fibre for Ocean Falls — to your knowledge — so that they could meet those contracts....

In other words, you were an innocent adrift in a world of facts, removed from the policy demands of Ocean Falls and of keeping those people employed and meeting the contract that had been signed. That's fair enough. I take your word for it. But you're leading us to a situation where you would want us to believe that you were just gathering this information for the sake of gathering the information, that its application was absolutely none of your business. Fair enough. If it's a conflict of interest you viewed, and it's another minister's responsibility, and you never talked to Williston about it.... You're telling us — and I accept it — that you had nothing to do with it, that your reports confirm that there was no timber, that there was no fibre supply to maintain Ocean Falls, and that Ocean Falls had that information but still signed the contract.

Mr. Chairman, now that the minister has said that he didn't know about these contracts until yesterday, as I understand it, I would like to ask the minister's opinion of a business that would sign a contract for the delivery of a product when they had no guarantee of supply of material to manufacture that product. Would that fall in the category of not being very nice, Mr. Chairman? How would you describe a business operation owned by the Crown, or by private enterprise, that would go out and sign a contract for five years to supply a product, knowing at the time they signed that they didn't have enough material to meet the demands of the contract? They renewed the contract in 1979, a year later, to run to 1984 with knowledge from your department that there was no timber or fibre supply, and they still signed the contract with the full knowledge that they couldn't meet the contract. What would you say if you were a shareholder and somebody acted on that information, and you were the minister and you were never consulted about it? What kind of business practice would you describe it as?

HON. MR. WATERLAND: As I've said a number of times, the Ocean Falls Corporation has had no Crown timber allocation since it was acquired by the government. Their timber supply has been coming from purchases either in the log market or the private sector. They have signed a number of contracts since they were acquired by the government in the early seventies. They were in exactly the same position, I guess, as far as the timber supply was concerned when the last contract was signed as they were when the first one was signed, in '72 or '73, whenever it was signed. So nothing has changed.

MR. BARRETT: Well, you see, Mr. Chairman, the point has just been made by my colleague. When they signed the contracts in the early seventies, they met the contract. When MacMillan Bloedel signs a contract, they fulfill it or face legal action; that's true.

When you employ someone to sign a contract, and they have knowledge, as testified by the minister over and over and over today.... The minister has testified in this House that they knew they didn't have the timber; they knew studies were going on; they had no guarantees — I have to take the minister's word for that. Is a wink as good as a nod in a conversation with Mr. Williston? Was there any way at all that he could believe in a handshake and a chat with you over a cup of coffee that you hinted that timber might be available? I don't think you did. I think you're innocent, in the best sense of the word. I don't think you gave him any hint whatsoever that there would be any timber; you were just looking into it. Now there are skeptics in my group who might disagree with my conclusion. There might be people in the public who would think: "My goodness, it's mighty strange that Mr. Williston never discussed the contracts with the Minister of Forests." But not me. Mr. Williston is a busy man, and he's very cautious about who he spends his time with. So if he ignored the minister, I understand. But what you're really saying and confirming in this House is that Mr. Williston, on behalf of this whole government, including you as a cabinet minister, signed a contract with full knowledge that at the time he signed it he could not guarantee that he could fulfill it.

[ Page 2767 ]

MR. CHAIRMAN: Hon. member, once again I will refer all hon. members to May, seventeenth edition, which says that the administrative action of a department is open to debate during Committee of Supply, but that matters involving high public servants cannot be criticized, and a member cannot discuss a vote which has not been brought forward. We are on vote 103, that of the Minister of Forests.

MR. BARRETT: Is that the sixteenth or seventeenth edition?

MR. CHAIRMAN: Seventeenth, hon. member.

MR. BARRETT: Could you give me the page, Mr. Chairman?

MR. CHAIRMAN: Page 739.

MR. BARRETT: Yes, I'm not familiar with that passage. I'll certainly make note of that. I'll leave that for the time being, and I want to thank the Chair for his advice.

But I should point out that what I've been left with in leaving this is that the minister — and I only refer to the minister's part, because I don't want to bring in Mr. Williston — has told us that as far as he recalls, his department completed some studies six or eight months ago that were related to the attempt to find more wood fibre for the newsprint operation at Ocean Falls, but that up to that time — and included in the reports — there was no guarantee that Ocean Falls would have the supply that it needed to continue operating.

We'll leave Mr. Williston alone and the fact that he signed a contract knowing that he didn't have supply; it would be out of order to even say that. So I won't say that he signed a contract when he knew that he didn't have supply. But we know from the minister — related strictly to his responsibilities — that at no time was he asked to give an opinion on contracts and he didn't know about those contracts until yesterday.

With all due respect to the minister, I'm left with this conclusion: this government doesn't know which end it's coming from. You can't run a Crown corporation with taxpayers' money and be responsible in cabinet and say you don't know what the Crown corporation is doing — but you told them there was no timber — and then wash your hands of it and say that that contract has got nothing to do with you. Mr. Chairman, I'll tell you this: in my opinion, the government and this minister have absolutely bungled this whole matter. As my colleague has pointed out, because of this bungling we may end up paying close to $20 million in court — because of inadequacy of communication in dealing with the business responsibilities that people get when they're elected to office.

Failure, failure, failure! Twenty-two million dollars may go out of this province because of this failure. How many hospital beds would it build? How many services would it provide? It could have kept down the health care costs and it would have made the Minister of Finance (Hon. Mr. Curtis) happier. What we've had today and yesterday is the catalogue of an exposure of a bungling government that doesn't know the first thing about a commitment to signing contracts with full knowledge that they couldn't be fulfilled — and signing them again in an election year, perhaps to give the impression to voters that they were going to keep Ocean Falls alive. "Tut, tut, tut" would be the most damning thing that I could say.

Mr. Chairman, this government has displayed an arrogance of indifference towards its responsibilities from one department to another. The minister has washed his hands completely of this whole operation by saying: "It's that minister's fault. It's in his department. It's Williston's fault. All I did was tell them they didn't have timber." Well, if that's all you told them and that's all you felt you were obliged to tell them, then you explain to the taxpayers of this province how we got in this mess simply because you want to isolate yourself from what's going on in the rest of the world of the cabinet and government that you belong to. If it means that this minister wants to leave on the record that he has nothing to do with this, that his skirts, metaphorically speaking, are clean, that he had done his duty and that he never discussed the contracts with Ocean Falls, Williston or the Minister of Industry and Small Business Development, let that be the matter of record. But I tell you, Mr. Chairman, it is no defence to isolate oneself from the rest of the cabinet and say: "Whatever mess they're in is not my fault. I did the reports and I had conversations, but I didn't know what they needed the reports for."

That's what you want us to believe. You didn't know what they wanted the reports for. Oh, goodness gracious, they wanted those reports for something; but: "Don't tell me what you want the reports for. Don't tell me that you need to meet contracts. Don't tell me that we might be in the glue. Don't tell me that we might have problems. All I'm telling you is you haven't got the timber and fibre. Don't tell me why you asked me the question. Don't tell me why you want this problem solved.'' If that's the way you want to operate — in an ivory tower encompassed by lead, so you won't get any radiation from other problems — so be it; but that's hardly a way for the taxpayers of this province to be protected and it's hardly a competent manner in which to run a government. You're going to have to explain, along with your colleagues, how we're going to have to make up this money because of this mess.

What about the other competing forest companies, from the very humblest to the super-humble. MacMillan Bloedel? They're going to have to have their taxes increased to clean up the mess that you made. What do you think about that? Because you didn't want to say: "Fellows, you haven't got enough timber, and I know why you're asking me to see if you've got enough timber." All you said was: "Oh, if you're asking me, I'll go and try to confirm it." You've been the only minister, to my knowledge. who hasn't been shifted in the cabinet.

MR. KING: He shifted from Mines.

MR. BARRETT: Oh, you shifted from Mines.

AN HON. MEMBER: Split in half.

MR. BARRETT: Split in half. Nobody had Mines — Lands and Forests to begin with. Is that right? He's the only survivor. Just Mines. But he survived, and how did he survive? No matter what kind of mess his colleagues got into, he swam away from it. What a way to survive! Don't you have any responsibility to add 2 and 2 together and figure out that Ocean Falls was asking for timber because they might be in trouble? I knew Ocean Falls was in trouble in 1971 because

[ Page 2768 ]

of a lack of timber supply; I knew it in '72, in '73, in '74, in '75, in '76, in '77, in '78, in '79, and it closed in '80, but you only knew about it from '78 on. You didn't tell the fellows: "Tut, tut, don't sign any contracts!" If that's what you want us to believe, fair enough, I'll believe it. But that's even worse than taking the position of going out and warning them: "Fellows, you don't have timber, don't sign any contracts!"

You're thinking of saving your own skin and your own image, and the line you've been peddling to us yesterday and today confirms that the only interest you had was to be pristine in terms of any discussions. Oh, no, you didn't hear any evil, speak any evil or see any evil related to the possibility that the Crown corporation might be signing contracts that they couldn't fulfill. Well, if that's the way it is, so be it, but that's one heck of a poor way for a cabinet minister to define his responsibilities: just wash your hands of it. "It's a mess — it's got nothing to do with me." Fair enough.

If that's the way the whole outfit operates, who's left to take the can? They can't even find someone in there to take the blame for writing a phony name on a letter, let alone dealing with some real issues. What an outfit! What a minister!

MR. KING: Mr. Chairman, I would like to ask the minister when he was first notified that the Crown corporation had made the decision to close their plant. As I understand it — and correct me if I'm wrong, Mr. Chairman, though you to the minister — the Crown corporation, like any private-sector corporation, would be obliged to notify the Minister of Forests when they intended to suspend their operations; and as I understand it from the act which the minister himself introduced and was passed, he has certain authority with respect to closure of plants, the curtailing or discontinuance of any processing, to receive certain undertakings from those corporations. So I would like to know specifically when the minister was notified that Ocean Falls intended to close on a specified date, and whether upon receiving that notification the minister entered into any discussions or set any conditions surrounding the closure of the Ocean Falls plant.

Now let me read the pulpwood agreement. I appreciate that Ocean Falls was not applying for a pulpwood licence per se, but they were applying for a supply of pulpwood to transfer into newsprint so that they might fulfill their contractual obligations with the Los Angeles Times. Mr. Leader of the Opposition, I hope you listen to this, because I think this directs some statutory responsibility to the minister. It says:

"(1) Where the minister determines that (a) wood chips, sawdust, shavings, hog fuel or other residues or byproducts of timber processing are produced in an area of the Province; or (b) timber below the standard of utilization then in effect for sawmilling purposes exists on an area of Crown land in a public sustained yield unit or a timber supply area in the Province, or both, in sufficient quantities to warrant the continuance, establishment or expansion" — and get that — "of a timber processing facility, the minister may designate the area as a pulpwood area and may enter into a pulpwood agreement for that area.

"(2) Where the minister makes a determination under subsection (1) he may, on request or on his own initiative, by advertising in the prescribed manner, invite applications for a pulpwood agreement.

"(3) The minister shall not enter into a pulpwood agreement under this section unless he advertises as provided in subsection (2) and a public hearing is held on the applications.

"(4) The application shall be made to the minister in a form required by him and shall include a proposal, providing information the minister requests, for the continuance, establishment, or expansion of a timber processing facility in the Province."

Now I'd say that that is an awfully broad mandate, for the continuance of a processing plant within the province anywhere.

I appreciate that there has been a shortage of timber for pulp in the Ocean Falls area for some considerable length of time. But I believe they use chips at that plant, do they not, Mr. Minister? Did the minister contemplate diverting to Ocean Falls any of the chips we are now exporting out of this province by the shipload, so that plant may continue to operate? Did the minister consider the supply of pulping material, be it hog fuel or chips, from other areas of the province where there's an excess and it's not currently economic to use it? In some cases it's being burned or wasted. In some cases it's being stockpiled until it spoils.

Mr. Minister, don't tell me that Ocean Falls didn't even advise you that they intended to close down and lay off — how many men was it? — 423 men; completely kill a one-industry company town, in which the public of the province of British Columbia has an investment of some $7 million to $9 million in public facilities — schools, hospitals, roads and so on. Does the minister really intend to tell this Legislature that he just stood aloof from the whole process? It would be scandalous, Mr. Chairman, if he took that position and posture with a private-sector corporation. It would be scandalous then to think that he was so insensitive and so ignorant of his statutory mandate that he stood back and said: "Let it happen, because in this area I and my bureaucracy have not been able to come up with a supply in the immediate area of Ocean Falls." It would be scandalous if he hadn't looked beyond there to some possible alternative supply.

Is he telling us that Ocean Falls never advised his office that on such and such date they intended to close the plant down and depart from this town and lay off over 700 people, and torpedo $7 million to $9 million of public investment in plant in that town? I suggest, Mr. Chairman, that that corporation would be in violation of the Forest Act had they not notified the minister. I suggest that if the minister, at the time he was notified, did not undertake, as the act empowers him to do, the obligation to set some standards and to require some undertakings, then I suggest that that minister is derelict in his duty in an absolutely unacceptable way.

I see friends around the gallery representing private sector companies. I kick them around a little bit from time to time, but I believe most of them are pretty efficient operators in British Columbia; they're doing a fair job. I want to ask the minister what he would do if Crown Zellerbach or MacMillan Bloedel entered into a five-year contract for the supply of newsprint to an offshore customer and then said: "Well, we're going to close down our plant. We're going to breach those contracts. We're not going to confer with the ministry in terms of phasing down the closure and protecting the jobs. We're just going to do it." How would the minister react? Would he consider that under the language of the act he designed they were a responsible and efficient operator in the province of British Columbia? Would he be prepared to

[ Page 2769 ]

extend more timber rights to them, if they alienated customers and tarnished the reputation of British Columbia as a reliable supplier of resources? Would he consider that acceptable? If the same company that had conducted itself in such a shocking way then came back and set up another corporation, or purchased another corporation, and came back and said to the minister, "Okay, we want additional timber supply," would he give it to them? Or would he say, "Look, your performance was such that you violated a contract which you had entered into. You show shocking and abysmal irresponsibility in terms of signing contracts which you knew you did not have a supply of fibre to fulfil, and consequently you're down the tube. You're not going into business with my sanction in British Columbia anymore." I want to tell you, Mr. Chairman, that as I understand it, Mr. Williston, as the custodian of Ocean Falls, has a great deal to do with Can-Cel as well. Is that not so? Is he not on it anymore? I believe he still has something to do with Can-Cel. I wonder how the minister is going to respond to dealing with Mr. Williston if, indeed, Mr. Williston is as irresponsible as the minister indicates. How are you going to deal with him with respect to Canadian Cellulose? Do you have any confidence in him? Is he going to be fired for subjecting the government and the people of the province of British Columbia to millions of dollars worth of damages?

Working people in the province of British Columbia who subject their employers to garnishee proceedings are fired. Should not an executive who enters into an agreement for the supply of millions, thousands or hundreds of tons — whatever it was — of newsprint in a five-year contract and then wilfully breaches that contract receive some sanction and discipline? Or is the minister prepared to do business with people like this as if nothing had happened?

MR. CHAIRMAN: Hon. member, I will once again remind all hon. members that our standing orders do indicate that the actions of high public servants cannot be criticized except by substantive motion.

MR. KING: I don't think that I've referred to any high-standing public servants during debate in the Legislature today, Mr. Chairman. If I have I would be pleased to have that indicated to me but I'm not aware of any public servants that I have referred to.

I am referring to a corporate chief administrative officer installed by that government. I know it was without any reference or consideration given to his political allegiance. I know that it must have been made purely on merit, in the fashion that the Minister of Health (Hon. Mr. Mair) appointed a certain lady a short time ago.

I want to ask the minister — and I hope he gives me a response — when he was notified that Ocean Falls was going to close. What undertakings did you demand from the corporation in terms of phasing out this plant in the province of British Columbia over which you have jurisdiction?

HON. MR. WATERLAND: The member for Shuswap–Revelstoke surprises me to some extent. First of all he says that Ocean Falls Corporation is required to notify the Minister of Forests when they plan to close the plant. I think the member realizes that the requirement to notify a minister is a condition of various forms of licence and I have said to that member a number of times that Ocean Falls Corporation had no licences.

MR. KING: You said they had no statutory obligation to notify you?

HON. MR. WATERLAND: Right, Mr. Member. They don't have tree-farm licences, timber-sale licences or forest licences, and it is those documents that require notice to the minister. Yes, I was notified as a member of cabinet in a cabinet meeting. That member knows very well that I can't discuss when and what is discussed in cabinet meetings. The member was a member of cabinet at one time in a disaster government. Perhaps they discussed it in public and breached their oath of confidentiality that they took on being sworn into cabinet. I don't operate that way.

That member surprises me in another way. When they were the government they acquired the Ocean Falls Corporation in 1972 or 1973, somewhere around there. I don't believe that member ever went through the Ocean Falls operation. Perhaps he did, but if he did he went with his eyes closed because he talked to me about providing a chip supply to the Ocean Falls Corporation. The Ocean Falls Corporation does not use chips. They have the groundwood process, which requires very firm logs cut into small blocks to make pulp. A few days ago that member was telling me that firm-wood sawlogs should not be used for the pulping process and now he's telling me to direct this good saw material to Ocean Falls Corporation so they can cut it into little blocks and grind it up and make mechanical pulp.

The member doesn't understand the first thing about the process there. He probably hasn't been there and if he has I'll stand corrected. But if he did he was completely unaware of what type of operation existed there. It is a paper mill which made paper from groundwood pulp blended with raft pulp which they purchased. A pulp supply, in the normal sense of the word, would not be appropriate for Ocean Falls because they cannot make pulp out of decadent wood when you're using a groundwood process. You have to have very firm, solid blocks of wood cut from logs which would probably best be used in lumber and plywood manufacturing, as a member advocated here a few days ago.

MR. BARRETT: Why would they sign a contract then, if they had that knowledge?

HON. MR. WATERLAND: The Leader of the Opposition keeps yipping in his seat, Mr. Chairman. He continues to ask questions of me as the Minister of Forests which are not appropriate to my estimates. He's been called to order a number of times.

Why Ocean Falls Corporation signed a contract is a question which you'll have to ask of the minister responsible.

The member from Shuswap–Revelstoke (Mr. King) gets a little bit of information: he's read us twice today some of the terms of a pulpwood agreement. I'm glad to see that the member can read and he's actually reading the Forest Act, because it's about time.

MR. KING: Aren't you a sarcastic little cuss! With an intellect like yours you should be more humble.

HON. MR. WATERLAND: After sitting here listening to the garbage that you've been throwing across this floor all afternoon, I think I'm entitled to be a little bit sarcastic — really I am.

[ Page 2770 ]

You talk about the Ocean Falls Corporation where you have such concern for the people. You don't even know what they do at Ocean Falls. You think they purchase wood chips and make them into paper. Well, they don't. They use groundwood pulp, Mr. Member, which is made from firm blocks of wood, which you say shouldn't be used for pulp. You say they should go into sawmills and plywood mills because it's an obsolete process and wood can be put to better uses than pulping in a groundwood process at an obsolete plant, which requires not pulpwood but good sawlogs if it's going to continue to operate in the way it has in the past.

MR. LEA: I know it's beside the point, but I'd like to share some secrets with the minister if he wants to discuss the operation at Ocean Falls. I worked in that pulpmill and I know a little bit about it too, but that's not really the point. A minute ago, when he was talking about taking those round logs and wasting them in a pulpmill when they could be used for plywood or sawlogs, did the minister forget that almost every month he signs export permits for round logs that go out of this country and are used somewhere else to create jobs somewhere else? What is the priority of the government?

AN HON. MEMBER: Does he not know that chips are made out of wood too?

MR. LEA: He should know that but he probably doesn't.

I'd like to ask the minister a question. When the decision was made to close Ocean Falls, did that corporation and/or Mr. Williston recommend to cabinet that Ocean Falls be closed or did that corporation and/or Mr. Williston notify cabinet that Ocean Falls was closing? I'd like to have an answer to that before I continue my questioning.

HON. MR. WATERLAND: The member for Prince Rupert surprises me. He said he actually worked at Ocean Falls. Why didn't he advise the member for Shuswap–Revelstoke what happened there before he made such an ass of himself?

MR. CHAIRMAN: Hon. minister, that is not parliamentary.

HON. MR. WATERLAND: I withdraw, Mr. Chairman.

MR. CHAIRMAN: The minister withdraws.

HON. MR. WATERLAND: The member for Prince Rupert has asked me to tell him what was discussed in cabinet. He said: "When was cabinet advised? Was it discussed with cabinet or did cabinet take part in the decision?" The member, I think, was a cabinet minister at one time. You couldn't tell from the highways he administered, but he was a Highways minister. He knows the confidentiality of cabinet and he expects me to breach that oath of secrecy and confidence which I took. I can't do that, Mr. Chairman.

MR. LEA: We used to admit every day that we came out of there that we'd been in there. That's not big. Every day we'd come out of there and say: "Today we passed an order-in-council. Today we made a decision on this; we didn't make a decision on that." You say it breaches the privilege of secrecy of cabinet to talk about the decisions that were made in cabinet, but I didn't ask that anyway. What I asked was this: did Ocean Falls Corporation and/or Mr. Williston notify cabinet that Ocean Falls was closing, or did they recommend to cabinet that Ocean Falls was closing? I'm not asking about the decision in cabinet; I'm not asking about a conversation in cabinet. All I'm asking is what the procedure was. Did it get to cabinet and how did it get there — by what route? Was it a recommendation or a decision? That's what I like to know. I think the minister will admit that I'm not asking about a decision or conversation that happened in cabinet.

HON. MR. WATERLAND: The member for Prince Rupert says: "Did Ocean Falls Corporation come to cabinet and recommend, or come with a decision?" He's asking me to tell them what took place in cabinet. I can't do that.

MR. LEA: Was it a cabinet decision to close Ocean Falls? Was it a cabinet decision or did Ocean Falls make the decision?

MR. CHAIRMAN: I'll have to remind all hon. members that during Committee of Supply we discuss the administrative action of one department. The department before us right now is the Ministry of Forests.

HON. MR. WATERLAND: Mr. Chairman, just to follow up on what you said, I've been trying to tell these members for almost the last full day that questions regarding the Ocean Falls Corporation are the responsibility of the Minister of Industry and Small Business Development. I would suggest that they address the questions to him. These questions, according to the rules which you have quoted to us, Mr. Chairman, are not appropriate to my estimates. I can't help the member.

MR. LEA: Mr. Chairman, I'm referring to a statement made by the minister today in this chamber, not something that happened a long time ago. The minister said that yesterday was the first he learned that there was a contractual arrangement between Ocean Falls and the Los Angeles Times that may or may not have been broken. He learned about it yesterday. I'm going to suggest, and the minister can correct me if I am wrong, that somehow or other — perhaps by visiting cabinet, in written form or on electronic tape — Mr. Williston and the Ocean Falls Corporation conveyed to cabinet that either they had made a decision or they wanted a decision made.

Somehow or other Mr. Williston reported to cabinet. Is the minister asking us to believe that Mr. Williston reported to cabinet that Ocean Falls was going to be closed and didn't talk about contractual arrangements that that corporation may or may not have had? Is he asking us to believe that Mr. Williston is a complete dumbbell and a stumblebum? Is that what he is trying to do?

In his report to cabinet, either verbal or written, the minister is asking us to believe that Mr. Williston had a one-liner: "Please close Ocean Falls," or "I have just closed Ocean Falls." He is asking us to believe one or the other, and that there was no discussion in cabinet about Ocean Falls. If there had been a discussion, he is asking us to believe that Mr. Williston failed to mention that there were some contractual obligations that could cost the province millions of dollars.

Maybe it's because Mr. Williston, in his role with the

[ Page 2771 ]

B.C. Cellulose Company and Ocean Falls, didn't spend most of his time working in that particular area. Maybe it's because Mr. Williston spent a lot of time in the office of the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland) talking about energy problems and solutions and the Kitimat pipeline. Maybe that's what Mr. Williston was doing all the time he was drawing his paycheque to try to make sure that a forest industry in this province, or a segment of it, worked properly. Instead, maybe he was off running around, meeting the CNR in Edmonton about energy, and meeting with the pipeline people about pipelines from Kitimat to Prince George. Maybe he was doing that. Maybe the Energy minister could let us know in his estimates whether that is how Mr. Williston earned his money.

HON. MR. McCLELLAND: When did you work at Ocean Falls?

MR. LEA: It doesn't matter when, Bob.

MR. CHAIRMAN: Order, please.

MR. LEA: I could ask you when ran your country-and-western magazine out in Langley, but it doesn't matter.

HON. MR. McCLELLAND: But I could tell you.

MR. LEA: I know you could tell me, Bob.

HON. MR. McCLELLAND: You can't even say when you worked at Ocean Falls.

MR. LEA: Yes, I can, Bob. It's none of your business.

MR. CHAIRMAN: Hon. members, I wonder if the Minister of Energy, Mines and Petroleum Resources....

MR. LEA: I mean, Conway Twitty — to heck with him.

HON. MR. McCLELLAND: When did you work at Ocean Falls?

MR. CHAIRMAN: Hon. minister, if you would come to order, and if the member for Prince Rupert would continue debate on vote 103, the Minister of Forests.

MR. LEA: Can the Minister of Forests tell me: did Mr. Williston inform the government that Ocean Falls was to close? As the Minister of Forests surely this is not too hard for him.

HON. MR. WATERLAND: Mr. Chairman, very simply, no, I cannot inform the member. I cannot tell the member what takes place in cabinet. Whether he informed the minister responsible, he will have to ask that member. I don't know how many times I have to say to that member just who is responsible for the Ocean Falls Corporation. If I say it enough, eventually he might understand.

MR. LEA: What we are trying to find out, Mr. Chairman, is whether or not the minister taxed his memory enough when he stood up in this House earlier today and said yesterday was the first time he found about the Los Angeles Times having the contract with Ocean Falls. In other words. had there been a discussion in cabinet surrounding Ocean Falls? I'm not asking for the details, but it seems highly unlikely that Mr. Williston, either by letter or by a visit in person, would talk about the closure of Ocean Falls without talking about the contractual arrangements. It seems darned odd that the Minister of Forests wouldn't be either informed or at that meeting. It seems mighty odd to me that yesterday was the first time he heard about it. Either he's got an awfully poor memory, or Mr. Williston has an appalling administrative record in this province — and he's drawing dollars from the taxpayers to do the job. It's one or the other. He can't have it both ways.

Interjections.

MR. LEA: I'm not asking what happened in cabinet. I'm asking: did a recommendation go to cabinet? I'm not asking what cabinet did, what they discussed. What I'm asking is.... Let's try it a different way, to see whether the minister can worm out of it this way.

MR. BARRETT: Ask him to read standing order 67.

MR. LEA: Okay.

Could the minister tell me whether it was a cabinet decision? I don't want to know how you arrived at the decision. In fact, we have orders-in-council that come out of there every day, Mr. Chairman, saying this was passed in cabinet. But now, according to the minister, we're not going to be able to tell the public what decisions cabinet made. I mean, cabinet makes decisions. Do they let the minister into cabinet? Let's start with the simple ones. Does the minister attend cabinet meetings? Does the minister know whether it was a decision of Ocean Falls Corporation to close Ocean Falls, on its own, or was that decision ratified by the government?

Interjection.

MR. LEA: Well, let's leave out the cabinet; he's got a hangup on the cabinet.

Interjection.

MR. LEA: Oh, is he? Can I see that?

Well, I don't want to act confusing. Standing order 67 says:

"It shall not be lawful for the House to adopt or pass any vote, resolution, address or bill for the appropriation of any part of the public revenue, or of any tax or impost, to any purpose that has not been first recommended to the House by message of the Lieutenant-Governor in the session in which such vote, resolution, address or bill is proposed."

Did he fall down over there? Where is he?

MR. KING: He did the disappearing act. He went out to find Phillips: he's supposed to answer.

MR. LEA: Okay, there are some things we know do happen in cabinet. For instance, we know that they don't pay Pat.

Would the Minister of Forests please tell me if he knows whether or not Ocean Falls Corporation made the decision on

[ Page 2772 ]

their own, with no direction from government? Can the minister tell me whether Ocean Falls made the decision, completely autonomous from government, to close Ocean Falls?

HON. MR. WATERLAND: The responsibility for the Ocean Falls Corporation lies with the Minister of Industry and Small Business Development (Hon. Mr. Phillips), and I would again suggest that the member for Prince Rupert direct questions about Ocean Falls Corporation to that minister.

MR. LEA: Mr. Chairman, I hate to remind the minister, but he is the Minister of Forests. There's a direct responsibility for the Minister of Forests in any forest operation. Surely the minister knows whether or not Ocean Falls made the decision on their own.

It seems to me that the minister is afraid to answer these questions. He's afraid because he doesn't know what Mr. Williston is saying right now, somewhere else. He doesn't know what the Minister of Industry and Small Business Development is saying somewhere else. He doesn't know, so the minister is afraid to tell the truth. He's cowering over there afraid to tell the truth in this House.

[Mr. Chairman rose.]

MR. CHAIRMAN: Hon. member, I'll have to ask you to withdraw any imputation that the minister — any member in this House — is not telling the truth.

[Mr. Chairman resumed his seat.]

MR. LEA: Sure.

Now the minister obviously is afraid to tell us what he knows. That's what he's afraid of, because he's afraid that he'll be contradicted by a statement being made somewhere else in this province today, and because it's his estimates and he can't leave the House. He's just afraid silly, because he knows his job's on the line. That's what he knows, and he's afraid to level with this House and tell us what he knows.

Once again, to the Minister of Forests: did Ocean Falls make the decision, autonomous from government, to close that plant?

HON. MR. WATERLAND: Mr. Chairman, the responsibility for the Ocean Falls Corporation lies with the Minister of Industry and Small Business Development. I don't speak on behalf of other ministers in the chamber, or outside, unlike the previous government, where the leader of the government fired people in other people's ministries without even telling them about it. I am responsible for my actions as the Minister of Forests. The Ocean Falls Corporation is the responsibility of the Minister of Industry and Small Business Development. If the member wishes to know anything about the Ocean Falls Corporation, then I suggest he ask that member. Our government doesn't work in the manner that that disaster government worked in previous years. We don't take on the responsibilities of other ministers and fire people in other ministries without them even being aware of it. The Minister of Industry and Small Business Development can speak for himself. And if the member would ask him questions, I'm sure he would answer them for him.

MR. LEA: Okay, let's go at it from a different way. As the Minister of Forests, was his ministry ever notified that Ocean Falls was closing? It's a simple question. Was the Minister of Forests or his department ever notified that Ocean Falls was closing, and by whom?

HON. MR. WATERLAND: Mr. Chairman, the member has changed his question. He said: "Was the minister ever notified or was the ministry ever notified?"

MR. LEA: Either one.

HON. MR. WATERLAND: I've told the member that we have discussions in cabinet which are confidential. Do you expect me to breach that oath of confidence? I don't know how those members operated when they were forming the government, but judging from the results, it wasn't in a very appropriate manner.

MR. LEA: So we now know, by his own admission, that the minister found out in cabinet that Ocean Falls was closing. That's in Hansard. The minister won't tell me when he found out that Ocean Falls was closing because he found out in cabinet. We know that for sure. So now the minister wants us to believe that during that cabinet debate Ocean Falls didn't explain that there were some contractual obligations out there, even though Ocean Falls was to be closed. He didn't know about those. He said he just found out yesterday that there were contractual obligations with the Los Angeles Times. He also said he didn't know about any other contractual arrangements that Ocean Falls had, but now he admits that he did find out about the closure while in the cabinet meeting. That's what he's admitted now.

You didn't? Then when did you find out, Mr. Minister? Then you don't have to worry about your confidentiality.

HON. MR. WATERLAND: Mr. Chairman, I told the member, as I've told him a dozen times, that I do not discuss what takes place in cabinet. He asked me a number of times: "Did Ocean Falls Corporation come to cabinet with a recommendation or with a notice that they were closing?" I've told the member a dozen times that I don't discuss what takes place in cabinet.

MR. LEA: Just before I go through this résumé of decisions in cabinet for the minister, because he hasn't heard of them.... I'm not asking what the minister learned in cabinet; I'm talking about his administrative responsibilities as the Minister of Forests. When did he, not as a cabinet minister up in the cabinet room but as the Minister of Forests in his office...? When did the administrative notification come to the minister or his ministry that Ocean Falls was closing? Not up in the cabinet room, but when did you, as Minister of Forests, in your office, find out that Ocean Falls was closing — or did you?

Ah, now the minister won't talk. He can't talk. He doesn't have the oath of secrecy around cabinet to protect him. Administrative responsibility, under vote 103: when did the minister, in his role as the administrator of the Forests department, find out that Ocean Falls was to be closed, how did he find out, and who informed him — not a cabinet decision, but in his role as an administrator? As a Crown minister responsible for the Forests ministry, when was he or his department notified that Ocean Falls was to be closed?

[ Page 2773 ]

MR. KING: Well, the minister is struck dumb, Mr. Chairman. He doesn't want to answer.

I want to tell you that the minister's attack on me was extremely painful. He really caught me out. I hadn't visited Ocean Falls and actually seen the plant, and I wasn't aware that they used groundwood rather than chips. What a terrible admission! The fact of the matter is that I haven't visited every pulpmill in British Columbia, but I've visited quite a few. I appreciate that there are various types of material used and there are various processes in the development of pulp in the province of British Columbia. But I think the minister misses the point. When I talked about the export of chips, I want to advise the minister that wood chips are made out of logs too. They're wood, Mr. Minister. The point is that if you are chipping an excess supply to the pulp needs of the province of British Columbia to the extent that many of the woodchips in the province are being used for purposes other than pulp, are being lost because of ageing, or being exported as is the case now, logically, that would seem to dictate to me — and I would hope to you as minister — that perhaps we shouldn't chip as much of the wood supply as we are doing, when a pulpmill in the province is without a supply of the necessary groundwood to continue their operation. Did the minister consider the supply of the excess material that is now being chipped and shipped offshore? Did he consider transferring that into a supply of groundwood for Ocean Falls? To me, that would seem like a reasonable thing to look at. Maybe it's illogical. I don't know, but I can't find any evidence that the minister even investigated any alternatives in terms of keeping that pulpmill going.

[Mr. Hyndman in the chair.]

The minister hides behind the fact that he won't reveal publicly what went on in cabinet. We're not asking him about the discussions that went on in cabinet; we're simply asking him about public business decided in cabinet. For the minister's information, the government themselves put out an order-in-council résumé. The latest one was issued on May 30, 1980. It outlines the orders-in-council passed at cabinet. It actually talks about decisions made at cabinet. Apparently some of those foolish colleagues of yours, Mr. Minister, feel that that is valid public information. I want to quote a few of them.

The public service approved order-in-council 1178, appointing James D. Rae deputy minister of tourism, at $50,000 a year, effective May 27, 1980. Do you think that's a breach of cabinet confidence, Mr. Minister?

What about this one? Here's order-in-council 1212, PSGA — public service — salary of one David P. Brown, communications adviser, be increased by $3,615, effective — get this — October 1, 1979.

AN HON. MEMBER: A retroactive secret!

MR. KING: A retroactive pay increase to good old Dave Brown, eh?

AN HON. MEMBER: Goodness gracious!

MR. BARRETT: Holy cow!

AN HON. MEMBER: Don't tell anybody, Tom!

MR. BARRETT: No, we won’t tell anybody. Don't spread that around.

MR. KING: Mr. Chairman, I see a whole variety here concerning energy.

MR. BARRETT: What does Dave Brown do?

MR. KING: Dave Brown is communications adviser.

MR. CHAIRMAN: Order. Could I remind the member that the rule of relevance applies in committee as it does in the House. Would he continue?

MR. KING: Thank you, Mr. Chairman. The minister has been refusing to answer for his administrative responsibilities on the grounds that any decisions made in cabinet should not be shared with the Legislature. Having been a brief occupant of cabinet rank for a period of time, I appreciate that the discussions and deliberations undertaken in cabinet are to be secret. But the public and the Legislature has an absolute right to expect that decisions affecting the public interest and public business be a matter of public record and be available. I'm suggesting that it's completely improper for the minister to try to hide behind that dodge.

There are a lot of appointments here. Mr. Chairman, respecting energy: Ludgate, Gish, King. Mrs. Marie Taylor, Burnaby, appointed as commissioner and chairman of the B.C. Energy Commission on June 1, 1980 — $60,000. Bingo!

MR. BARRETT: Let's keep that one secret.

MR. KING: Better not tell anybody, Mr. Minister; it might breach cabinet security. Somebody might even say that that lady is the daughter of a former Social Credit MLA.

AN HON. MEMBER: Don't say that. That's a secret.

MR. KING: Far be it from me to tell anyone that.

The point I made when I referred to the pulpwood licence is that that sets the general scope and parameters of the minister's responsibilities. I appreciate that Ocean Falls held no licence: I appreciate that. But is the minister saying that because they held no tenure, no quota, no licence, they are completely absolved of all of the directions and undertakings of the Forest Act? Is he saying that because they have no licence — even though they have a major plant in British Columbia which employs over 700 people in a one-industry town — they are absolved of all the undertakings?

Mr. Chairman, can you control the Premier? I think he's talking to someone who's not here.

MR. CHAIRMAN: Hon. members, all members are equal in this assembly and shall have equal respect for the member now on his feet.

MR. KING: Thank you, Mr. Chairman. I appreciate your administering that sanction to the Premier. That was an act of courage, and if he tries to retaliate in any way I shall defend you, Mr. Chairman.

Interjections.

[ Page 2774 ]

MR. KING: The wild man from Kamloops is heckling me again, Mr. Chairman. I don't trust that man. I understand the doctors have come up with a new medical procedure for removing fungus from one's facial area.

Mr. Chairman, the point we're trying to make to the minister is that he has stated his policy on forest management; he has long articulated the proposition of "manage it, use it or lose it"; he has said that inefficient operators in the province of British Columbia would have sanctions imposed against them and would lose the right to harvest timber. Is he saying that because this company had no licence they're absolved from all of the rules and regulations that he applies to every other forest operator in the province? That's the issue. It's no use playing cute little games because this specific part of the act doesn't apply exactly to the Ocean Falls situation — that's a cute little dodge.

The minister has set the guidelines. He has articulated many times that he demands efficiency; he demands high utilization; he demands as a condition of the act — not only for acquiring wood supply but for the operation of facilities — that there be a public benefit, continuity of employment opportunity. That's inherent in the Forest Act, Mr. Minister; you yourself articulated it. How is it, then, that this major plant was able to close without your applying any of those tests? I think we're entitled to ask that, and I think we're entitled to a forthright explanation.

I would like to know when you were notified. I would like to know whether upon learning of the proposed closure you explored matters related to how the employees were going to be compensated; how their employment was going to be phased out; whether there was a possibility of alternative employment opportunities; whether there was any plan for severance pay; and how the impact of that closure might be mitigated with respect to the town and with respect to the total public interest. That is clearly your obligation.

When Vanply in Vancouver decided to close down, the minister lost no time — at the urging of the IWA and other parties — in intervening and trying to persuade the company that their closure should be phased and proper provision made for the employees losing their employment security. What's so different about Ocean Falls? If you intervened in the private sector in the fashion that you did, how can you then divest yourself of a similar obligation in this case? It doesn't add up, and I am afraid that the Legislature is left with the impression and the concern that you're attempting to hide something from us when you don't address these questions that we have a right and an obligation to ask.

HON. MR. WATERLAND: Mr. Chairman, the Minister of Industry and Small Business Development is the minister responsible for the Ocean Falls Corporation. Questions relevant to that operation should be directed to that minister.

As far as their compliance with the Forest Act is concerned, Ocean Falls has done an excellent job. They've always done an excellent job of planting trees on areas they didn't harvest because they didn't have a licence; they've always done an excellent job of fire protection in the forests in the areas where they weren't harvesting; they've done an excellent job in building environmentally sound roads to cutting permits which they didn't have because they didn't have a licence; they did a very good job of complying with the utilization standards on the cutting permits under the licences which they didn't have.

Mr. Chairman, the responsibility of the Minister of Forests is to administer Crown forest lands. The Ocean Falls Corporation had no licences and so is not involved in Crown forest. If the member wishes to address questions regarding the operation of the Ocean Falls Corporation to a member of cabinet, I suggest he do it to the member responsible for the Ocean Falls Corporation.

MR. LEVI: Yesterday I raised with the minister some aspects of a report by Prof. David Haley. I wasn't in the House when the minister replied — if one can characterize it as a reply — but he did make some brief comments. I would like to ask the minister a number of questions.

First of all, he finishes his first statement by saying: "Mr. Haley had some difficulty in trying to make the comparison in terms of licences and values of wood and things that the government pays for after paying their stumpage. They are so different that any simple comparison is really meaningless, because if you extract all the variances you come up with things that cannot really compare at all." This is what the minister said. I don't think the minister has read the report at all. That is the first thing. He doesn't really have any idea what's in it. Somebody whispered in his ear how to answer it.

A couple of weeks ago I had an opportunity to listen to Mr. Juhasz, who works for the minister. In this province he is probably one of the people who can really address himself to the complexities of the stumpage situation — how it is arrived at and what the difficulties are. Yesterday when I raised the matter with the minister I used the report by Prof. Haley because what he was doing was making a comparison between stumpage values in British Columbia and United States' Pacific Northwest. The minister replied in short, stating a couple of things which concluded: "It's not possible to make comparisons." Presumably that was based on some knowledge that he had. If that is the case, it's not the knowledge that his expert in the department has, because he very specifically said, when asked about stumpage.... One of the questions was: "How do B.C. rates of stumpage compare with Washington state, Oregon state and the world markets?" His reply was: "Our minister has already instructed us to take a look at that but time has prevented us from doing it. On the surface it appears we'd better take a look at what they do but we have not in fact been there. Hopefully we'll get there before very long." Presumably the minister has been there but his expert hasn't.

I don't think the minister has been there either. What you were saying yesterday came out of a report by the Council of Forest Industries which was written in 1973. It's a very difficult report to get hold of. I sent the Minister of Industry and Small Business Development a note yesterday asking if he could facilitate my receiving the report. He apparently has the only copy and I'm still waiting to hear from him. The thing that I would like to know from the minister is where he gets his information about the stumpage rates in Oregon and Washington and the comparison, if Mr. Juhasz said that nobody's been down there to look at it. It is all very well for you to say that you couldn't make comparisons. He goes on to say that it is the nature of the wood we have in British Columbia that puts us, presumably, at a disadvantage.

I was asking him yesterday why the difference between the stumpage revenue is almost $1.25 billion. He hasn't addressed that question. I don't think it's sufficient for the minister to say: "Some of our highly valued stands attract to us just as much stumpage per cunit of wood as is received in the United States. The tax structure is different." Well, we

[ Page 2775 ]

know that. That is part of what Prof. Haley was talking about. He talked about the wide open log market in the United States. Nevertheless, that report — if the minister has read it — is also strongly suggesting that even given all those factors, that does not explain the large difference, as he pointed out there, in terms of the revenue.

I ask the minister if he has read the report. Perhaps he might comment on it. That's not to say that somehow he couldn't bring it together in terms of, I presume, matching apples and oranges, but surely there is more to it than the answer he gave. It's not a question of somebody becoming an instant expert, as is suggested when somebody gets up to talk about stumpage. The reason we talk about stumpage is because it is revenue. That is the kind of the thing the government is concerned about; that is the kind of thing everybody is concerned about.

He talked about last year's revenue. He said: "Last year, for example, our direct stumpage revenue was over $550 million because the very buoyant market in their stumpage appraisal extracts those values." Right? That's fine. It was an exceptionally good year last year. Then he talks about the end-value system. The thing is, perhaps the minister would be a little more candid in telling us how he has all this knowledge that he arrived at if people in his ministry haven't even gone down to look at it? We know that in 1974 the task force started to look at this question. Perhaps the minister has reports on this matter that nobody else has, because in the bibliography that's attached to Prof. Haley's report there is a report by a Mr. Ruderman: "Production, Prices, Employment and Trade in Northwest Forest Industries — First Quarter, 1979."

It's a 57-page report. It also refers to the Task Force on Crown Timber Disposal. This other document, which is the one that Prof. Haley deals with quite specifically is from the United States Department of Agriculture, Forest Service — "Production, Prices, Employment and Trade in Northwest...." He's incorporated all that. What has the minister got that's new? What does he know that other people don't know that brings him to the conclusion that somehow the report isn't valid and he has some kind of knowledge? Maybe he would tell us.

[Hon. Mr. Bennett in the chair.]

HON. MR. WATERLAND: Mr. Chairman, there are literally dozens and dozens of reports on various approaches to stumpage and to the comparisons between the methods of stumpage charges in various jurisdictions. I have not read the complete David Haley report, but I've read extracts and summaries of it.

Perhaps Julius Juhasz has not been to the northwestern states to specifically examine their stumpage system. As a matter of fact, the Forest Policy Advisory Committee, when they were working on the development of our Forest Act which is in place now, travelled to various states in the northwestern states and discussed with officials there many matters, including stumpage and methods of charging stumpage. There are many, many reasons why you cannot compare the two systems. I went through a number of them yesterday and there are many others as well, The member can read my remarks in the Blues if he wishes. I believe I mentioned the quality of wood, the differences in the federal tax system and how they're offset. The federal Forest Service responsibilities — what funds they get from stumpage which have to go back into road development and other pre- and post-harvesting responsibilities which the government assumes there and which the licensee assumes here.... The percentage of private wood down there is much higher than here, and in many cases the federal government wood is simply an incremental wood supply. Really, a comparison of the two systems, when all of these differences are taken away, amounts to nothing, in my opinion. That is why we haven't been able to rationalize it as a ministry — not just myself, but people much more knowledgeable than we within the ministry.

I can't help the member any further, Mr. Chairman. I have advised him that our White Paper on stumpage will be at the Queen's Printer later this month, to be distributed in July. I'm sure that the member will be very willing at that time to present us, as a government, with his recommendations as to what should be done to improve the stumpage system, if it can be improved. I look forward to that advice from him.

MR. LEVI: Oh, he's gone. He's disappeared. The minister's gone. I just wanted to ask him another set of questions. I hope he comes in. Maybe I can talk to the Premier while he's waiting to come in. Somebody must be taking notes for that minister.

[Mr. Strachan in the chair.]

The minister has indicated, as he did yesterday, that there's a White Paper coming down. The one anxiety that I perhaps have about the White Paper, based on what Mr. Juhasz has said, is that we'll have a White Paper which could very well not incorporate the very valuable information that presumably he felt was necessary in evaluating the stumpage system and the new system that they are hoping to look for, because that's something that the government has indicated they want to do. If that White Paper comes down, is the minister able to tell us whether it will in fact include an overview of what is going on in the Pacific Northwest? It appears that there is some relevance in looking at that. The comparison is okay. Maybe, finally in completing a comparison, not all things can be compared; but there is obviously some value in them.

I want to ask the minister another question which I did want to ask the other day. The minister replied to a question which I asked about the inspection under section 88, which is the offsets that you can get from stumpage if you do the right kind of work relevant to that section.

There was some question as to whether in fact they would have enough staff. There has been some.... The minister said that will be okay: it won't be a problem. One of his staff was present in the other forum, and he was asked a question about that. I'm just going to quote, and then maybe the minister can give us an observation. The individual, Mr. Johnston, said:

"I think what you're getting at is to do with the adequate staff to effectively and efficiently monitor the performance of people doing the forestry work. We're just completing a workload study of the area, which includes taking a look at the standards of monitoring that are required and whether we have adequate staff to meet these standards. It is just in the final stages of working it through, and it would appear that we may not have an adequate level of staff to achieve the standards that we think should be performed. As a

[ Page 2776 ]

result of that, we'll go back and take a look at where the trade-offs are. So it's under consideration, and it's a point that we're concerned about as well. "

There was some discussion in the other forum about this, because certainly what's available under section 88 is very good, if that is the kind of incentive that can be handed out. But there is the question of how it's monitored, and we do have a little bit of a conflict as to whether in fact there's going to be enough staff. Certainly the people who are in the know — the senior staff — have some concern about that and, presumably, given the problems that have existed in the department in terms of the billing.... And that's a staff question. That was a technological question that had to be worked out with the BCSC. What kind of assurances can the minister give us that he's okay on those grounds? Because he's somewhat at variance with what one of his staff said. They're not about to embarrass anybody. It's not a question of that. But is he satisfied that it's going to be okay? That's the question. We were dealing with this in another forum, and I think it's worthwhile if we can get a comment from him.

HON. MR. WATERLAND: As Mr. Johnston said — and Mr. Johnston is on the floor of the House with me today — we are doing staff reviews, and we're constantly trying to improve the administration of the Forest Service. We have a good system of checks now, and we're always trying ways to improve those. As the member knows, we have just completed a reorganization. As this new organization gets in place, we'll be reviewing many areas of our operation to see how our staffing levels are, whether they're adequate, whether they can be improved. The ministry will never sit back and say it's as good as it can be. We'll always be trying to improve our administration.

MR. KING: Mr. Chairman, since we've departed from the minister's non-role in the Ocean Falls fiasco, I do have a few more things I wanted to deal with before we consider the minister's vote. I had been dealing late last week, I guess it was, with the stumpage appraisal system on the coast. I and some of my colleagues have outlined the difficult times that small operators have in terms of having interest payments applied to log booms that have not as yet been sold. I would sincerely ask the minister to consider, once again, applying that interest only after the sale of the log boom. I think it is extremely punitive for small operators to have to store logs that they have not as yet found a sale for, and to, at the same time, be taxed, fairly heavily, as I understand it, on the basis that this is an asset which the small operator holds — well, indeed all operators. I think it's reasonable for the ministry to apply a tax or an interest charge once the sale has been made. I understand the objective of trying to minimize their outstanding accounts, which have been criticized by the auditor-general, but I don't think the minister should over-react in a punitive way by applying this interest charge before the logs have been sold, thereby impairing in a very serious way the cash flow of, particularly, small operators in the province of British Columbia.

I wanted to read into the record — and I hope the minister would comment on it a bit — a paper that's been submitted to me by a small operator on his views on the stumpage appraisal system. I do this, Mr. Chairman, because I thought it was a rather detailed piece of work, and also because I think that it should be in the record of the Legislature and that I should give the minister an opportunity to respond, because whether or not the allegations and the criticisms contained in this paper are all valid or not, certainly they are perceptions, and I would think the minister would recognize the sincerity behind them and want to deal with them. I'm going to read the essence of it, because it's fairly brief:

"What follows details a mess, damaging to the public interest, which demonstrates the incompetence of the ministry. Simply expressed, stumpage assessment starts by estimating the grades of logs by species in the timber sale area. This establishes market value of the logs. Cost to produce and deliver to market is then estimated. The difference is called conversion return. This is shared between the government and the logger. The logger's share is fixed by profit and risk allowance, roughly 18 to 20 percent of market value. The remainder is stumpage. The principle is sound and simple to administer, but it is only fair and workable if there is accurate estimating by the forest officer who does the appraisal. When his estimate deviates from accuracy, whether from lack of knowledge, incompetence or manipulation to please a friend, the resulting erroneous stumpage charge, particularly if it is too low, is not detected, because the ministry maintains no overall scrutiny or audit of the appraiser's work."

I have read sections of this before, but I want to continue with a bit of it, Mr. Chairman, and give the example which is cited here. This is the example of an appraisal in order that one can study the principles. "Please refer to the attached cost appraisal sheet" — and I'm prepared to show that to the minister if he would like to see it. While the worksheet has a lot of pseudo-scientific bafflegab of slight relevance, the example isolates the crucial factors in a stumpage appraisal. The example is from the cedar column on the worksheet. Market value selling price received by the logger is listed at $54.05. This is determined on its prorated value by applying a percentage of grades by the values for each grade as set out in the form. The operating cost is set at $32.06. This is an estimate obtained by the appraiser. He does not disclose the source of data or the make-up of costing each phase unless there is an appeal. In the form that I'm prepared to show to the minister there is a sample of his estimate with comment upon its inaccuracy. In a word, it is incompetent costing. The conversion return is shown at $21.99 and that represents the difference between the above amounts quoted. The profit ratio is then calculated on a point system shown at the top of the appraisal sheet. In the example the allowance is about 20 percent of market value for cedar. The discounted market value is determined by dividing prorated selling price of $54.05 to arrive at a value which is shown at $32.06. Profit and risk allowance on the form is determined by deducting the logging cost from the estimated cost of the appraisal.

The comment that's carried along with this is:

"Stumpage appraisal, unlike income tax, which is after-the-fact accounting to share profit, does not deal in facts. Understand everything is an estimate in advance of actually selling the timber and commencing logging of it. When these inputs to the formula are based on false data, sloppy estimating or manipulation, whether by lobbyists, politicians or whatever, the basic stumpage can be enormously wrong. In case of grade estimate, examination of many appraisal worksheets shows great estimates in cedar, ranging

[ Page 2777 ]

from 40 percent to 100 percent number 3 — this is to say no quality in the grade at all, which is not at all typical. Manipulation of the appraisal on the basis of all number 3 grade reduces stumpage, and of course, that's the return to the public. In the sample case, appraisal, on the basis of 100 percent number 3, would reduce prorated selling price from $54.05 to $46.83 and result in a reduction of stumpage from $12.98 to $6.96."

This is a 46 percent undercharge of stumpage, according to this allegation. Mr. Chairman, I think the minister would appreciate that that is an extremely serious allegation to make.

"Another way to manipulate undercharge of stumpage is to overestimate cost of operation and delivery. Examination of random samples of appraisal worksheets for operations of uniform characteristics shows operating cost inputs in the appraisals ranging from a low of $27 to $36 per cubic metre. In the sample case, raising the cost estimate from $32.06, as used, to $35.06, which is only 9.3 percent increase in cost, reduces stumpage 23 percent; in other words, from $12.99 to $9.98.

"Effective manipulation by the lobbyist involves persuading or otherwise obtaining cooperation of the appraiser. This is done in a back room or in the candlelight of a cocktail lounge. In the absence of audit or scrutiny, whether in or outside the ministry, the stroke of a comfortable pen can reduce stumpage by $6.02 in respect to grade and $3.01 on the cost side and result in 60 percent lower stumpage return to the province."

Mr. Chairman, I am not in a position to vouch for the validity of these claims, but they come from a person directly involved in the industry. As I indicated at the outset, if someone is seriously enough concerned to make these allegations — someone who has been in the industry for a considerable length of time and is familiar with it; someone who I believe to be and who has the reputation of being a reasonable, rational, competent operator — if their conclusion is that there is this kind of scope for manipulation, error and influence, then I suggest that we have serious problems in the administration of the Forest Service in the province. We have a problem that should not be pushed aside in an offhand manner by the minister, but one that should be looked at very seriously and investigated.

He deals further with the application of the sliding-scale appraisal and how, in certain market situations, it can adversely affect the operator in a completely impractical way. It is a very complex area and, quite frankly, one I don't understand all that well. I doubt whether anyone other than those directly involved and professional foresters really understand the system all that well and feel that familiar and comfortable with it. Certainly if people involved in the industry have these kinds of concerns and are prepared to make these kinds of allegations, then it is a very, very serious matter.

I have stated on other occasions during consideration of the minister's estimates my concern about the lack of proper cost accounting and audit procedures, with respect to a variety of areas in the ministry. It gives me great alarm when I find that not only one person but a number of people in the industry have been prepared to come to me and provide me with these kinds of allegations which I would hope the minister would respond to and perhaps do something about informing the public and the operators more clearly on in terms of what kinds of principles and audits are applied to make sure that the appraisal system is working fairly, free from influence, to guarantee that equity is applied to the operators in the industry and that the public interest is protected through ensuring a fair and proper return through stumpage.

The minister has tended to answer these by saying: "Look. I have confidence in the staff." Well, I think the minister has good staff too, and it's certainly not my position to criticize them. But if there is the scope, and the feeling within the industry that this kind of thing is going on, then I would hope the minister would answer in a bit more detail and with a bit more substance than simply saying, ''I have confidence in the staff." I think we can have reasonable confidence in the operators, too, in the province. Many of them are honest and competent, and they put forward reasonable propositions as they see them. I would appreciate the minister's response on that question.

HON. MR. WATERLAND: The report the member read repeated what he said previously. I think I did answer to some extent later — after he had read it the first time. I think I said then, Mr. Chairman, that it's very difficult for me to deal with innuendo and suggestions in a report given to the member in the opposition. I asked the member if he would share it with me; he nodded at that time. He hasn't yet delivered it to me. However, I would suggest he also advise the person who gave him the report to come and discuss it with me if he has specific information as to any impropriety or favouritism or any inappropriate action by any member of my staff. If it's happening, I should know about it so that I can take corrective action.

Many of the things that take place in stumpage are judgment decisions. What grade of log is this? Things of that nature are sometimes very marginal; they can go one way or the other. We have to have our people use their expert judgment in many areas such as this.

However, I cannot deal with allegations. I would like to have specifics from the member or from whoever gave him that report — something that I can deal with. I would remind the member that in the new Forest Act there is provision for appealing stumpage appraisals if people aren't happy with them. There is a formal procedure which leads up to an appeal panel appointed by the Lieutenant-Governor-in-Council. Although we haven't had any go that far yet, I'm sure that if they can't be settled at a lesser appeal level, then they should proceed to that level. We do want to be fair in the administration of the stumpage appraisal system.

The member also mentioned the small logger again. I don't know if the member was in the House yesterday when I advised the member for Mackenzie (Mr. Lockstead) that as of the first of the month we have put market loggers on statutory minimum stumpage because they do have special problems. I can't subscribe to the idea of not charging for logs until they are sold. The title passes when they are felled. We started, as of earlier this year, I believe March or February, to charge stumpage on overdue accounts. That was one of the moves we made to ensure that accounts aren’t outstanding — things that the opposition have been urging us to do. It is difficult then to have two classes of people — one you don't charge interest to and others you do charge interest to. The title passes when the tree is felled. It then belongs to

[ Page 2778 ]

the logger and it is up to him to sell it. Because of his costs, the stumpage is due 30 days after he receives his account, which is shortly after the wood is scaled.

MR. KING: It is not the stumpage I'm talking about, of course; it is the interest that is charged; it is whether you deem the stumpage to apply when the logs are cut or whether you deem it to apply after it is sold. I can appreciate the dilemma of applying two standards, one for the majors and one for the small guy. On the other hand, the reality is that for a small operator without the kind of cash flow available to the large integrated companies in the province, it is the difference between continuing to stay in operation or going down the tube.

Maybe there is another option the minister could look at. I don't think it has to be a matter of saying: "Okay, we waive this for the small operators but apply it to the big ones." What about a recognition that there is a small business sector in the province in the forest industry and providing some leeway for them in terms of perhaps a two- or three-month relief from the interest payments until such time as they have reasonable time to make their sales? Perhaps a 60-day relief would be something the minister could look at and still maintain his consistency in the application of the principle. I don't argue with that. It is just that treating the large companies in the same fashion that you treat the small ones is like the old philosophy of, " 'Every man for himself,' said the elephant as he danced among the chickens." The big one survived; the small ones go down the tube. The minister has a small business program within his ministry which recognizes that all things are not equal in the industry, that the small can't compete on the same level as the majors. Having recognized that and established his small business program to deal with them in a different fashion than the major integrated firms are being dealt with, should that principle not be followed through with respect to the application of this interest rate against unpaid stumpage? I think there is some flexibility there that could be looked at and could ease immensely the very real cash flow problems that some of the small companies have. I don't see anything untoward or very difficult about that.

There is another matter I wanted to raise that I raised last year. I don't know whether I raised it in the House last year but I recall having a meeting with the minister about it. That related to small contracts that were awarded by the ministry's regional offices.... I think last year I talked to him about clearing contracts in the Columbia reservoir. This year I have a very sad letter from a couple of young people who were awarded a contract for juvenile spacing of trees. These people come from an area of the province up in the Cariboo where unemployment is very high. They were in rather desperate straits, unemployed, and out of desperation they bid on this contract in which they had no experience whatsoever. They were awarded the bidding contract at an exceedingly low price, obviously far below what the cost would really be. I believe their bid was about $22,000 for this particular thinning contract. The second bid was $44,000 and I think there was a higher one again. It should have been obvious to ministry officials that in no way could the contract be fulfilled without subjecting themselves to a major loss. Yet, despite the inexperience and the desperation of these people, their contract was accepted, and they are now in the glue in terms of trying to meet the terms of that thinning contract. They were unemployed people with no capital to back them up. They had to purchase equipment.

I recall that when discussing this with the ministry on previous occasions they said they do look at the ability of the people to fulfill the contract. They look at their reputation as a small logging contractor, whether it be for clearing, thinning or whatever, and take into consideration their reputation and their record as to whether or not they have the machinery, the experience, the cash flow and the capital behind them to fulfill the kind of contract that they are bidding on. I think that's reasonable....

Interjection.

MR. KING: What's the matter with that person, Mr. Chairman? Is there something wrong with that person?

MR. BRUMMET: No, it's with you.

MR. KING: Is that person stunned again, Mr. Chairman?

MR. BRUMMET: By your stunning performance.

MR. CHAIRMAN: Hon. members, the member for Shuswap–Revelstoke has the floor on vote 103.

MR. KING: I think I was being attacked; I'm not sure.

I was advised by the ministry that they do have a look at the ability of the contractor bidding to fulfill the contract, and if it's some young inexperienced persons they counsel them that they are underbidding in very serious fashion and that they will subject themselves to serious financial loss if they insist on putting forward this bid. I know it's a bit difficult. I know that whenever you receive bids for public work....

Interjections.

MR. KING: Oh, Mr. Chairman, I can't hear myself think. I would appreciate....

MR. CHAIRMAN: I wonder if the member for North Peace River (Mr. Brummet) and the member for Burnaby–Willingdon (Mr. Lorimer) could come to order.

MR. KING: Mr. Chairman, it's getting late in the afternoon, and the government obviously doesn't want to make any progress on the minister's vote, because they're interrupting the debate. I was kind of hoping that we might at least get the minister's vote past us tonight, but, with all of the interruptions and the inane heckling that is going on I fear delay.

Interjections.

MR. KING: I'm thoroughly terrified, Mr. Chairman. All I have to do is look over there and I become quite alarmed. I really do.

This is kind of a tragic case. This happens every once in a while. There is an alternative to the ministry saying to these young people: "We hold you to this contract, even though we recognize through our own appraisals that you have underbid it by $20,000 and you bid out of desperation because you wanted to earn a living in some fashion. Even though you are ill-equipped to undertake the contract, we are going to hold you to it."

[ Page 2779 ]

I know it is very difficult to treat people in different fashions when they are bidding, but it seems to me that at the outset the ministry could monitor a bit more closely and advise particularly inexperienced bidders for forest contracts: "Our appraisal is in an area which demonstrates to us that your bid is far too low and there is no reasonable expectation that you can conclude the contract for the bid price that you have put forward. Under these circumstances, we think you should consider withdrawing your bid." Of course, if after full warning they insist on proceeding, then at least they've had an opportunity, some warning and the benefit of some experienced counsel.

I think that would be the human thing and the businesslike thing to do. In the final analysis they are going to go under anyway. The ministry is probably going to have to re-award the contract and the poor people who undertook it out of desperation are going to end up with a fine or at least a penalty imposed upon them for failing to complete the contract. They were already broke and unemployed. That kind of situation just doesn't make any sense to me.

I would be prepared to provide the minister with a copy of this letter. I didn't think I should raise it publicly in the House, but I would be prepared to give the minister a copy so he can see who they are and perhaps ask his staff to have a look at it. The reason I raise it is that I recall a similar situation last year. Although it wasn't with a thinning contract — it was reservoir clearing — it's essentially the same kind of problem. I wonder if the minister could advise the House whether anything is happening to try to ensure that this kind of thing doesn't continue to happen in the province.

HON. MR. WATERLAND: It is a difficult area. We can't protect people from themselves. If a bid comes in which appears to our staff to be out of line or extremely low, we do discuss it with them. But if we refuse to give it to them, then they would probably be writing to the member for Shuswap–Revelstoke saying that we're discriminating against them. If we don't award it to the lowest bidder, what about the next highest bidder who perhaps is the same type of person but is a little more accurate and responsible in his bidding? I think the government does have a responsibility to be impartial and to award contracts to the most appropriate bidder, which is usually the lowest one. We do administer these programs with as much "sympathetic'' administration as possible. We can't be accused of favouritism by awarding it to someone whose bid was higher, or of telling people: "You can't have it, even though your bid was lowest." We do assess their ability. At times they do get into trouble. We have to be very careful that we are impartial in our bidding and, at the same time, sympathetic in our administration. I wish the member would share the letter with me; and I will see what has been done up to this time.

MR. KING: Mr. Chairman, the problem is that the minister didn't listen very closely. I wasn't suggesting that the bid be denied. I was suggesting that when, in the professional opinion of the minister's staff, the bid is obviously far too low, the people be brought in and counselled on that fact, be given fair warning; then, if they wish to withdraw their bid, that they be allowed to do so — not allowed to bid again, so that they undercut another bidder with knowledge, but to withdraw their bid. Give them that option. If they insist on their bid standing, well, fair enough, they've been warned. But what's absent in many of these cases is any experience upon which to base their bid. They lack the experience: they lack any expertise in properly appraising and estimating costs. In those cases, I think it would be fair, reasonable and human to at least counsel them: "Look, your bid is significantly below what our appraisal is; you have an option. If you insist on your bid standing, fair enough, but we anticipate that you'll lose a great deal of money. Your option is to withdraw without qualification." I don't see that as an unreasonable proposition. I’m not suggesting that there be preference given in the bidding or that there be inequity and unfairness in entertaining those bids.

MR. BRUMMET: That's enough.

MR. KING: What is the matter with that individual, Mr. Chairman? He took a pledge of silence in this institution. He said, Mr. Chairman, that he was never going to speak here again. He wrote a newsletter to his constituents saying that he'd been stunned by the whole process, and yet here he is chirping away again. I don't know what it is, but that Fred Flintstone routine puts me off my track, Mr. Chairman — really it does.

MR. CHAIRMAN: All hon. members will come to order. The member for Shuswap–Revelstoke continues on vote 103.

MR. KING: I just want to ask the minister if he thinks the proposition I put forward is a reasonable one, and if it couldn't be looked at. I would appreciate that brief response from the minister.

HON. MR. WATERLAND: We do just that. As a matter of fact, because bids are so terribly out of line, at times we haven't awarded them. We've asked for a retendering, hoping that the person will come to some reality. But we do discuss with people bids that appear to be way out of line. We don't want them to get into trouble.

MR. KING: There are one or two other points I wanted to raise before I let the minister's estimates go. With respect to the issue I raised earlier about prime sawlogs being pulped, I've had correspondence from the IWA. The minister has as well. I have received a good deal of complaints from various small operators who, again, charge that prime sawlogs are being lost to the pulp process for a lower value. I know that the minister has answered that it happens in isolated cases, but I wonder if the minister would agree, before we leave his office vote this year, to at least discuss some kind of more effective and more frequent spot-check of the various plants in the province to monitor the kind of logs that are being chipped, particularly in a time when unemployment is high and when the lumber market is admittedly low.

I still think it would be prudent for the province to store those logs until the lumber market is restored rather than to lose them to a lower value through a chipping process. The minister took the position that if small operators in this time of low market conditions can't make a go of it, they should shut down and weather the storm. Well, if you apply that same principle to managing the resource well and extracting from the resource the highest optimum value, then just because there is a poor market we shouldn't chip prime saw-

[ Page 2780 ]

logs; we should store them, if necessary, until the market returns so that it's viable to put them through the sawmilling process again.

Due to the widespread nature of the complaints that have received — and I presume the minister has too — would the minister undertake to perhaps come up with some plan of more frequent monitoring of the mills in the province that appear to be putting prime sawlogs through the chipping process at this particular time and throughout the year? I don't think it would involve hiring a great deal more staff or anything, but I think once in a while — without announcement — the minister could send some of his regional people around and compile a listing and get some kind of grasp on what's going on in that area. The complaints are so frequent that I think it warrants a bit of special attention, Mr. Minister.

HON. MR. WATERLAND: Mr. Chairman, I don't see anything wrong with that suggestion. As a matter of fact, we have one crew motoring around constantly. There is no reason, as staff are available, why we can't accelerate that inspection process, and we intend to do that throughout the year.

MR. COCKE: Mr. Chairman, I would just like to add a positive note to this debate. My friend has not had the kind of answers that he would like. However, he could have got them from the member for Dewdney (Mr. Mussallem) who told me earlier this afternoon that he could answer all these questions. Meanwhile, Mr. Chairman, the member for North Peace River (Mr. Brummet) and the member for Omineca (Mr. Kempf) have been trying to answer for the minister across the floor. I felt that it might be a good idea if I would afford them the opportunity to get up and do some of the minister's answering for him now, because I've been listening to them all afternoon doing the answering and chirping away. These people who've got massive forest industry in their areas, who sit in the House and chirp away about forests, are really making no positive contribution. I would think that it would be only fair if they could do that, just like the member for Dewdney would be prepared to do.

Vote 103 approved.

On vote 104: ministry administration program, $2,193,809.

MR. KING: I quite frankly have a good deal of material to deal with under the general administration program. That being the case, I wonder if the House Leader would like me to adjourn the committee.

HON. MR. GARDOM: Yes, fine.

MR. KING: Mr. Chairman, I move that the committee rise, report resolution and ask leave to sit again.

Motion approved.

The House resumed; Mr. Davidson in the chair.

HON. MR. McCLELLAND: Mr. Speaker, I would like to make a brief statement. Earlier today all members of this House were delivered notices asking them to attend a special showing of a film called "Soft is the Heart of a Child." It's one of the most powerful and moving statements that I've ever seen on the subject of family alcoholism. Unfortunately, in putting the program together at the Newcombe Auditorium, we inadvertently scheduled it for Friday at noon, a time when the Legislature is in session. I'd like to announce now that we have arranged for a special preview showing of this film for all members of the Legislature and any of the staff in the buildings who wish to see it. I would commend it to you. It is extremely good and it will be held in the press conference theatre in the basement of the buildings at 12:15 p.m. on Thursday, June 5. The showing for members of the public service and others will be held Friday at the Newcombe Auditorium. I would like to see all members of the Legislature there if possible, Mr. Speaker.

Hon. Mr. Hewitt tabled the 1979 annual report for the Ministry of Agriculture.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6 p.m.