[ Page 2807 ]

CONTENTS

Routine Proceedings

Oral Questions.

Fire standards in rest homes. Mr. Cocke –– 2807

Alcohol and drug dependency of juveniles. Ms. Brown –– 2808

Ocean Falls Corporation contracts. Mr. Barrett –– 2808

Gambier Island mining. Mr. Lockstead –– 2809

Proposed fixed link between Vancouver Island and mainland. Mr. Lauk –– 2809

Administration of medication in schools. Mr. Lauk –– 2809

Presenting Petitions.

Elimination of telephone operators in Dawson Creek and Vernon.

Mr. Skelly –– 2810

Committee of Supply; Ministry of Forests estimates.

On vote 104.

Mr. King –– 2810

Hon. Mr. Waterland –– 2810

On vote 105.

Mr. King –– 2811

Hon. Mr. Waterland –– 2811

Mrs. Wallace –– 2812

Hon. Mr. Waterland –– 2813

Mr. Lockstead –– 2813

Hon. Mr. Waterland –– 2813

Mr. King –– 2814

Hon. Mr. Waterland –– 2814

Mr. Lauk –– 2814

Hon. Mr. Waterland –– 2814

Mr. King –– 2814

Hon. Mr. Waterland –– 2815

On vote 106.

Mr. King –– 2815

Hon. Mr. Waterland –– 2815

Mrs. Wallace –– 2816

Hon. Mr. Waterland –– 2817

Mr. Mitchell –– 2818

Hon. Mr. Waterland –– 2820

Mr. Skelly –– 2820

Hon. Mr. Waterland –– 2821

Mr. Mitchell –– 2821

On vote 108.

Mr. King –– 2821

Hon. Mr. Waterland –– 2822

Mr. Skelly –– 2823

Hon. Mr. Waterland –– 2825

On vote I 10.

Mr. Nicolson –– 2826

Hon. Mr. Waterland –– 2827

Forest Amendment Act, 1980 (Bill 17). Second reading.

Mr. Gabelmann –– 2827

Hon. Mr. Waterland –– 2827

Credit Union Amendment Act, 1980 (Bill 12). Second reading.

Hon. Mr. Nielsen –– 2827

Mr. Levi –– 2828

THURSDAY, JUNE 5, 1980

The House met at 2 p.m.

[Mr. Davidson in the chair.]

Prayers.

HON. MRS. McCARTHY: Mr. Speaker, I would ask the House to welcome four visitors to the gallery today. Mrs. Myrtle Russell from Vancouver, Mr. and Mrs. Frank Alpen, and Mr. Ralph Alpen are, visiting us, and I'd ask the House to welcome them.

MR. LEGGATT: I'd ask the House to welcome two old friends of mine from Port Coquitlam who are visiting, Mr. and Mrs. Reid. With them are Mr. and Mrs. Gordon Smith from Woking, England, and Mr. and Mrs. Kennaugh from Wokingharn, England.

HON. MR. NIELSEN: I'd also ask the House to acknowledge the presence of a hard-working community worker from Ucluelet, Mr. Ted Walker.

MR. BARRETT: I'd ask the House to welcome two very old friends of mine from North Delta, Mr. and Mrs. Arne Knudsen.

MR. BRUMMET: Visiting Victoria for most of this week, and in the galleries today, are two very good friends of mine from Fort St. John, Roy and Dottie Snippa. I would ask the House to give them a warm welcome.

MS. BROWN: A group of grades 4 and 5 students from St. Thomas de Sales School are visiting the precincts. They are not in the gallery. They are accompanied by their teacher, Mrs. Parsons, and I wonder if the House would bid them welcome.

MR. BARRETT: Mr. Speaker, I rise on a point of order. I'm aware that there is a House committee on privileges. I've attempted to define the particular problem I have, and it appears that the best manner is to seek your advice as to procedure in handling this particular problem.

Some days ago a member of the staff of the Minister of Universities, Science and Communications came to my office and asked for permission to hook up the television set in my office to the satellite. Being aware of the somewhat blue nature of some of those programs, my secretary wisely gave no permission. Subsequent to that denial there was no further contact with my office, and today, after some days, I turned on my set and discovered that all I got was a screen shattered with electronic signals and no picture at all. It seems that without my permission the minister had hooked me in to the satellite, which has completely distorted everything on my TV screen.

AN HON. MEMBER: You miss "Captain Kangaroo''!

[Laughter. ]

MR. BARRETT: I am not upset, Mr. Speaker, at the loss of my television set; I do miss "Sesame Street," because it has a certain relationship to cabinet activities. However. I seriously want to raise this with you in that since the committee on privilege is meeting, I would appreciate a ruling from yourself or some advice to this House as to the sanctity of one's office, including electronic connections with one's office. I'd like to pick my own programs and I just wonder if this is not bordering on an infringement on the sanctity of members' offices.

DEPUTY SPEAKER: The Minister of Universities, Science and Communications on the same point of order.

HON. MR. McGEER: Mr. Speaker, may I offer my humblest apologies to the Leader of the Opposition. I concur with the Leader of the Opposition. I think the reception has been very poor and the movies, have not been nearly as good as many might have anticipated. Unfortunately, the equipment that was promised was never delivered, and it had been my information that it was the desire of the NDP caucus to be on the same feed, as the rest of the building.

MR. BARRETT: No.

HON. MR. McGEER: Since the NDP wishes not to be put on that feed, we have had to put the whole building back onto the regular cablevision service, but we hope that there will be optional satellite reception when the equipment is delivered tomorrow. I apologize to the the Leader of the Opposition. For those who wanted the satellite reception today, I apologize to them, too, but we can't please everybody.

MR. BARRETT: Mr. Speaker, on the same point of order, I enjoy the exchange of humour on the matter. The point that must be dealt with somehow is the sanctity of a member's office. No permission was given, and I would not want the sanctity of a member's office dealt within a cavalier fashion.

DEPUTY SPEAKER: Thank you, hon. member. The Chair will undertake to review the matter and report back to the House. I thank the Leader of the Opposition for conferring with me prior to raising the matter in the House.

Oral Questions

FIRE STANDARDS IN REST HOMES

MR. COCKE: Mr. Speaker, I would like to direct a question to the Minister of Health. Can the minister advise whether it is government policy that all private extended-care and long-term care facilities should meet national building code fire standards?

HON. MR. MAIR: I believe the answer is yes, Mr. Speaker.

MR. COCKE: Mr. Speaker, I have another question. In view of the dilemma faced by city councils, who must either ignore fire standards or close substandard facilities, what steps has the minister taken to ensure upgrading of the fire standards at private long-term care facilities?

HON. MR. MAIR: I don't have an answer to read to the question that was just read to me, Mr. Speaker. I will take the question as notice.

[ Page 2808 ]

MR. COCKE: Mr. Speaker, as a matter of fact, I read the question because I want him to understand that it is carefully worded. In view of the estimate by Fire Chief Eric Simmons that 30 Victoria rest homes housing some 500 patients do not meet fire standards, what steps has the minister taken to alleviate the fire risk to these patients?

HON. MR. MAIR: Mr. Speaker, I believe that the Attorney-General has already given an answer to the press with respect to this matter; but I certainly will take the question as notice and come back with an answer for the member from the Minister of Health.

MR. COCKE: I have another question, Mr. Speaker. The minister is aware, of course, that there continues to be a lengthy wait for entry into long-term care facilities — as much as a year. We have discussed that before. Does the minister then agree that closing these facilities is an unacceptable solution because no real alternative exists for these patients?

HON. MR. MAIR: Mr. Speaker, I wonder if the member, in order to assist me, would tell me what facilities are being closed. Which ones is he referring to?

MR. COCKE: Mr. Speaker, this is my question period. I gather you can't have it both ways. Either we adhere to fire standards or we don't. The minister says that we will. The private hospitals say that they can't do so and maintain a facility. Anyway, in view of the minister's statement last December questioning the role of private profit in the provision of long-term care, can the minister advise whether he has decided to take over the private long-term care facilities and run them according to established standards?

HON. MR. MAIR: I listened very carefully to the question, Mr. Speaker, and the answer is no.

ALCOHOL AND DRUG
DEPENDENCY OF JUVENILES

MS. BROWN: I have a question to the same minister, Mr. Speaker. I just want to preface my question by thanking him for the showing of that film on alcoholism among young people, though it was actually the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland) who did it.

There is a growing need for counsellors to work with juveniles that have alcohol and drug related problems, as demonstrated by that film. These counsellors have always proven to be most effective when they are working within the school system at the community level. Can the minister tell me whether the Alcohol and Drug Commission has decided now to rescind its instruction to remove the only family and youth counsellor from the Burnaby area?

HON. MR. MAIR: I can't answer yes or no to that, Madam Member, but I will certainly take the question as notice and bring back an answer.

MS. BROWN: If in taking the question as notice the minister would also, at the same time, take a look at a report done for his ministry on the assessment of alcohol and drug dependency of youth in the lower Fraser Valley, which shows the incredible increase in alcoholism among teenage children in the Burnaby area, I think that that would probably help him to make a decision on leaving that counsellor there.

OCEAN FALLS CORPORATION CONTRACTS

MR. BARRETT: Yesterday I asked the Minister of Industry and Small Business Development a number of questions that he took on notice. One in particular was when he could inform the House he first knew of the Ocean Falls closure and its subsequent impact on the contract with the Los Angeles Times to supply newsprint. I wonder if the minister has the answer to that question today.

DEPUTY SPEAKER: The question was taken as notice, hon. member. Technically speaking, it is out of order to ask it again, particularly only one day thereafter. However, the minister may wish to reply. He declines.

MR. BARRETT: It was reported on the news yesterday that the minister had stated in the corridor that there were other companies that have been affected by the closure of Ocean Falls. Would the minister inform the House today what other companies were affected by that closure in terms of contracts?

HON. MR. PHILLIPS: In answer to the Leader of the Opposition's questions, the answer is no.

MR. BARRETT: I would like to ask a supplementary question, Mr. Speaker. Could the minister inform the House what the estimate is of the total provincial liability for the breach of contract, particularly the Los Angeles Times contract?

HON. MR. PHILLIPS: Well, I would say, Mr. Speaker, that if the Leader of the Opposition has his way, the liability might be great. What he's trying to create here is a problem for that Crown corporation of which his government is the founder. The founder of the problem sits right over there, and he's the man who's asking the questions.

MR. BARRETT: Mr. Speaker, it's impossible for me to create the problem. I had nothing to do with the creation of the minister.

Mr. Speaker, I have another supplementary for the minister.

Interjection.

MR. BARRETT: I understand the Premier's nervousness.

Can the minister confirm that a contingency fund has been established to protect B.C. Cellulose against such liabilities, either through settlement or court action?

HON. MR. PHILLIPS: Mr. Speaker, in answer to the Leader of the Opposition's question, I think we're quite capable of handling the situation, if he'd just quit trying to create a problem for that Crown corporation.

MR. BARRETT: Mr. Speaker, perhaps the minister would like to abolish the opposition and ignore facts.

I have another supplementary. In view of the fact that the

[ Page 2809 ]

major paper producers in B.C. have little or no surplus production, can the minister inform the House which source of newsprint he has contacted to assist in the supply of newsprint to the Los Angeles Times and other contracts?

Interjection.

MR. BARRETT: "Take it as notice," Bill said.

HON. MR. PHILLIPS: Mr. Speaker, in answer to the member's question, I think the situation is well in hand.

GAMBIER ISLAND MINING

MR. LOCKSTEAD: Mr. Speaker, I have a question for the Minister of Municipal Affairs. Now that the Attorney-General (Hon. Mr. Williams) has declared he is powerless on the Gambier open-pit mine proposal, has the minister decided to use his good offices to support the Islands Trust legislation and the Islands Trust in preventing the open-pit mine which may be established on Gambier Island?

HON. MR. VANDER ZALM: There's no proposal before the ministry for an open-pit mine, nor has the ministry received any petition on that from the Islands Trust.

MR. LOCKSTEAD: Mr. Speaker, I have just a quick supplementary. I would ask the minister if he or his government have decided to continue their assault against the Islands Trust legislation.

DEPUTY SPEAKER: The question is not in order, hon. member.

PROPOSED FIXED LINK BETWEEN
VANCOUVER ISLAND AND MAINLAND

MR. LAUK: I have a question for Mister Science on the missing link — the fixed link. Can the minister inform the House what selection criteria were used by his ministry to select the companies now studying the fixed-link proposal?

HON. MR. McGEER: At least one contract has been entered into. I'll endeavour to get detailed information about whether others have yet been entered into to provide the ministry with estimated costs of building a fixed link across the Strait of Georgia. The criteria used were the ability and expertise of the companies involved to provide this kind of information within the budget available to the ministry.

MR. LAUK: Can the minister name the three successful companies that have been reported employed or contacted by the ministry for the purpose, together with those that also received consideration but were not selected?

HON. MR. McGEER: I'll endeavour to get that information for the member tomorrow. However, Willis, Cunliffe, Tate and Co. were one firm.

MR. LAUK: Could the minister inform the House of the value of the contract to Willis, Cunliffe, Tate and Co., and what instructions the contractors have been given?

HON. MR. McGEER: I'll get that detailed information for the member tomorrow, Mr. Speaker,

MR. LAUK: Finally, could the minister inform the House when the reports from these contractors will be due and available for submission?

HON. MR. McGEER: I'll have that information tomorrow too, Mr. Speaker.

MR. LAUK: The Minister of Universities, Science and Communications doesn't know that I'm usually not available on Fridays. I wish he'd show some more consideration.

ADMINISTRATION OF
MEDICATION IN SCHOOLS

MR. LAUK: I have a question to the Minister of Education. School District 36, Surrey, procedure 9181 — I think the minister already has a copy from my office. I apologize if it hasn't arrived yet. Re treatment of students with medical problems at Simon Cunningham School: the procedure outlines something as follows, that the minister should be aware of. "One's day supply of medication with a separate container for each medication will be sent to the school in a container or containers with a child-proof lid. Each container will be labelled with the student's name, the name of the medication, the dosage, the doctor's name and the method of administration." Does the minister have any advice for teachers at that school if the medication fails to arrive? Secondly, are they responsible if the teacher fails to notice the non-arrival of medication?

HON. MR. SMITH: Does the member want the answer on Friday also? I will respond to this question and the question that was asked of me by the member for Burnaby North (Mrs. Dailly) on May 21 and by the first member himself on June 2, and will say this. On May 21 the member for Burnaby North asked me a question concerning the administration on a regular basis of medication to students by teachers. I said at that time that I was concerned over this matter and took the question as notice. Since that time I've directed officials in the ministry to conduct a comprehensive review of this matter and to recommend ways of addressing it. The problem is not a new one but it is becoming increasingly prominent as a result of greater acceptance into the public school system of children with varying degrees of handicaps. Any solution to the problem has to meet a number of criteria, foremost of which is the safety and health of the children and the protection of teachers and staff members as well.

My ministry staff is working with their counterparts in the Ministry of Health and the Attorney-General and ICBC to develop an overall solution, The immediate policy on this varies from school board to school board. Normally speaking, routine administration of drugs is only done at the request of a parent and also with the written authorization of a medical health officer. I'm talking about the administration of drugs that is not done by a public health nurse or medical practitioner in the school. There is concern, of course, that this may violate the Medical Practitioners Act, and we're addressing that. I am also assured that teachers who do administer such drugs are covered under ICBC insurance provisions for the school districts. What I am going to do is to make a full statement as to government policy, and if it does

[ Page 2810 ]

require some proposed amendments to existing legislation, we will make them. I'm sure the hon. member wouldn't suggest that we have a duty to provide a doctor and a public health nurse with every student in every school. We're trying to be practical and to give the protection required.

Presenting Petitions

MR. SKELLY: Mr. Speaker, I beg leave to present two petitions.

Leave granted.

MR. SKELLY: The first petition is from Vernon and contains 2,756 names. The second petition is from Dawson Creek and contains 2,262 names. The prayer reads as follows:

" Briefly stated, the petitioners pray that B.C. Telephone Co. cease and desist with their proposal to eliminate telephone operators from the city of Vernon and of Dawson Creek; and, secondly, that the CRTC be required to hold public hearings in the city of Vernon and in the city of Dawson Creek to establish what effect B.C. Tel's proposed elimination of telephone operators from those communities would have. Specifically, they petition that the CRTC look into the effects of B.C. Tel's proposal with respect to quality of service, employment, community income, emergency assistance before the commission makes a decision on whether to allow B.C. Tel. to proceed."

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

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

MR. KING: Mr. Chairman, I just have a brief question for the minister regarding the overall administrative costs for his department. I note with considerable interest that the ministry has undertaken a major program of intensive forest management on a five-year scale. The ministry has also undertaken a new program — a considerable expansion — which provides for major tax write-offs by private corporations practising intensive forest management. I note a very, very small increase in the overall administrative allocation for the department for the current fiscal year, and I want to ask the minister if he feels that he has adequate staff under the existing structure to adequately monitor expenditures for the new intensive forest management program, and claims from the private sector for the tax write-offs incident to their intensive forest management and silvicultural programs.

HON. MR. WATERLAND: Mr. Chairman, there's no program in the Ministry of Forests which provides tax write-offs. There is an offset-against-stumpage program, and that's probably what the member is referring to. Stumpage is not a tax; it's the value received, for the sale of Crown timber.

This particular vote provides for the executive direction of the ministry, and as the member knows, in the last year or so we have reorganized our executive, along with other parts of the ministry. In this particular vote there is an increase of one ADM for the entire year, which was only partially funded last year because it wasn't in place for the entire year, and we have provided some additional funds for strategic studies.

Yes, at the present time we have a good ability to monitor expenses. We are, as I mentioned during vote 103, doing a complete ministry staffing review to see in what areas we could possibly improve our administrative programs.

MR. KING: The minister may not wish to refer to it as a tax — fair enough. It's fealty irrelevant whether you call it stumpage or not. But it is a benefit on a scale that was heretofore not available to private corporations. Many people in the industry, and certainly many people in the public of British Columbia, hold that the major forest-licence holders in this province have an implicit obligation to do their own intensive forest management as a return, a recognition, and a benefit to the province for enjoying the right to harvest the timber. Now they are going to be, in effect, subsidized through stumpage for doing that which even the minister claims they have been inherently and historically obliged to do — to manage the licence areas that they hold in a wise fashion, commensurate with the sustained yield principle.

I'm worried about the kind of provision that is made for millions of dollars to be deducted from stumpage in recognition of intensive forest management. When the minister responds, "Yes, I've hired another associate deputy minister...." Mr. Chairman, I'm not so concerned at that level of the bureaucracy; where I am concerned is in the field — to make sure that intensive management, intensified silvicultural procedures, regeneration, thinning, and so on, are actually carried out. Certainly some obscure assistant deputy minister tucked away in some corner of the parliament buildings in Victoria is hardly going to be able to keep a handle on that kind of monitoring. So what I'm interested in is ensuring that there is some capacity within the ministry to actually study in the field and make some kind of appraisal of the claims which the private companies are making as a write-off from their stumpage costs. Does the minister have any plans in that regard at all, or is he just going to accept at face value the write-off claims which these private corporations make? Is it a matter of that kind of trust, Mr. Minister, or do you not think you have an obligation for closer monitoring in the field, to ensure that this public subsidy to private corporations is going to be met with full face value to the public?

HON. MR. WATERLAND: The subject that the member is talking about has been canvassed extensively during vote 103. I'll tell him again, though, that basic forestry responsibilities under any forest licences in British Columbia have, for many years, been offset as a cost in the appraisal system. The offsets which will be increasing are only those offsets for specific projects which will have prior approval by the ministry. Once projects have been approved the ministry will check to make sure the work has been done, as has been the case in the past. I would advise the member that through our reorganization, in staff reallocation to the field offices there will be a move of about 300 people from various regional headquarters in Victoria to our field offices, which will help us in our ability to monitor the increasing level of

[ Page 2811 ]

forest management work that will be done to enhance our forests for the future.

Vote 104 approved.

On vote 105: finance and administrative program, $17,236,608.

MR. KING: I have urged the minister for some months now to try to make some accommodation in stumpage costs to the small, indigenous British Columbian entrepreneur who was harvesting areas of poor quality and finding it very difficult, on a cash-flow basis, to maintain a viable operation. The problem is, as we've discussed before, that stumpage appraisal is conducted on the previous three-month market in large measure, and for a small operator caught in the position of a serious declining market, as we have now, and also saddled with a very marginal kind of area to harvest, it was exceedingly difficult to carry on at stumpage rates in the fashion that the major integrated companies could absorb. Of course, usually the major integrated companies enjoy a better quality of timber to harvest through their extensive tree-farm licences and quotas in other areas.

The minister did respond and bring in a variation, I think, of the appraisal on the stumpage for these operators by an order on April 1, I believe it was. I would appreciate it if the minister would explain for me the elements of that change he made to the stumpage appraisal system on April 1. I understand that rather than base it on the Vancouver log market he had based it on the general selling price in the area. Is that correct? I would appreciate it if the minister could clarify for me how he went about providing some accommodation for these people in terms of the stumpage appraisal.

HON. MR. WATERLAND: The stumpage appraisal for market loggers as of April 1 has been based on the price which they receive for logs rather than the general log market price. In order to determine what this price is, we do a sampling of the actual values received by the loggers so that their appraisal is based upon their cost and their market prices rather than prices which are indicated by the Vancouver log market.

MR. KING: Can the minister tell me what particular statutory authority he utilized to undertake that different appraisal approach to stumpage?

HON. MR. WATERLAND: The statute is the Forest Act, Mr. Chairman.

MR. KING: The scope and the breadth of the minister's knowledge absolutely amazes me. I'm most impressed. But perhaps the minister could be a bit more specific and tell me what precise clause and section of the Forest Act he relied upon for the authority to vary the stumpage appraisal system in this regard.

HON. MR. WATERLAND: The authority to determine the appraisal system is section 83. The specifics are given in the way stumpage rates are determined in section 84.

MR. KING: I believe section 84 refers to the regional manager rather than the minister. I believe also that section 84.... It's not an implicit thing; it says "the regional manager may...." Perhaps the minister takes the position that any authority extended to any official of his department is an authority vested in the minister. That's an interesting point. I think that both sections the minister quoted are connected to the condition that the public interest be served in this fashion. If that is what the minister had in mind and if that is why he relied on these two particular sections, I would appreciate his cooperation in explaining to the House precisely how he defined the public interest being at stake in this regard. I am not quarrelling with the initiative the minister took. I am simply seeking to define the legal authority which he felt entitled him to take this particular approach to resolving a very problematic stumpage burden for the small loggers.

HON. MR. WATERLAND: Mr. Chairman, section 84 is quite clear. It spells out the procedures that must be used and the various determinations that must be made by the regional manager in determining the stumpage rate. As the member knows from discussion in the last few days, any of these determinations are subject to appeal if anyone affected considers that they haven't been appropriately handled.

MR. KING: Mr. Chairman, the minister is becoming rather defensive. I am not suggesting that anyone I am aware of would want to appeal the direction the minister took. I am simply seeking to establish what precise statutory authority the minister had to change the stumpage appraisal system. In previous debate the minister decried the fact that previous ministers had appeared to act without full statutory authority in the awarding of licences and the granting of timber supply. I agree with the minister that any minister of the Crown acting beyond the scope of his statutory authority is on very thin ice.

All I am seeking to determine here is how the minister, under the sections of the Forest Act he quoted, feels that he had the statutory authority to suddenly change the stumpage appraisal from the Vancouver log market base — which is the basis of stumpage calculation for all operators in the coastal area — to accommodate what in my view was an area of legitimate concern. I want to know how and by what precise means he felt he held that statutory authority. I quite frankly do not recognize it in the section the minister quoted. It refers, as I indicated, to the regional manager. It refers to this rather qualitative determination of the public interest. Did the minister pass an order-in-council prior to issuing and developing the new stumpage appraisal methodology for the market loggers?

HON. MR. WATERLAND: Mr. Chairman, perhaps we should address ourselves specifically to section 84, if the member wishes to go into that much detail. Section 84 states:

"(1) Where stumpage is payable to the Crown under an agreement entered into under this or the former Act" — referring to the former Forest Act — "the rates of stumpage shall be determined under this section and the regulations by the regional manager or a forest officer authorized by him and the rates shall be varied according to the agreement.

"(2) In determining the stumpage rates the regional manager or forest officer shall (a) consider an estimate of the volume, species composition and quality of the timber; (b) estimate the quantities and values of the forest products specified under section 83 that may be produced from the timber...."

[ Page 2812 ]

In the case of the Vancouver log market, the product used is logs. We can estimate, either through the log market or any other means that we choose, to determine the value of the product produced, which in this case is logs. We choose, under the system for the market logger, to use his market price rather than the market price determined by the Vancouver log market.

MR. KING: I appreciate the minister's reading of the section to me. I had read the section just prior to coming into the Legislature, but I appreciate his refreshing my memory. As I pointed out to the minister, the authority under the section is directed to the regional manager, who will undertake a variety of considerations before invoking the authority given to him. I want to know, since the minister himself and his office were the agency which directed the change in the stumpage appraisal system for the market loggers: what authority does he think he has? Does he feel that he is granted by osmosis the same statutory authority that seems to be uniquely and singularly directed towards the regional forest manager? Can the minister tell the House whether the regional forest manager in this particular case compiled the studies on which this kind of initiative must be based, as stated in section 84? If so, would the minister like to table that in the House? I appreciate that there is some scope in the section, but that scope in the section is directed towards the regional forest manager, not the minister.

HON. MR. WATERLAND: I can't at this time table any specific documents provided me by the regional manager, which in this case would be really two regional managers. It would be the Prince Rupert regional manager and the Vancouver regional manager. We do talk to each other and we have discussed the fact that market loggers are having problems because of the prices established by the Vancouver log market. It was decided and recommended by the regional managers that we change that and go to a specific log market price.

MR. KING: The minister is telling me then that he picked up the telephone and talked to the regional manager at Prince Rupert and Vancouver, and they said: "Look, we think that the market loggers are having difficulty, based on the Vancouver log market appraisal of stumpage, so we recommend changing the stumpage appraisal system thusly." I would assume that if that kind of recommendation was made by a field officer the minister would have some kind of communication from them spelling out precisely what they were advocating. Does the minister have any correspondence with the regional managers that he'd like to table in this regard?

HON. MR. WATERLAND: No, I don't, Mr. Chairman.

MR. KING: Does the minister have any correspondence with these regional forest managers relating to the decision that was made on April 1?

HON. MR. WATERLAND: Yes, Mr. Chairman.

MR. KING: If the minister has this correspondence laying down the rationale upon which they, under their statutory authority, have advocated a different formula in the stumpage appraisal system, why would he not want to table it with the House? I can see nothing that the public should not be entitled to view in that kind of academic work and that kind of exercise that does affect the public interest. I wonder why the minister won't be prepared to table the documents so that I can have a look at them and understand precisely the detailed work upon which these recommendations were based. That seems like a reasonable explanation. It seems like a fairly open activity that the minister should agree to comply with in the public interest. After all, the section refers to the public interest. If some bureaucrat — and I don't use the word disparagingly — in any government agency is allowed to assess and determine the public interest and then retain the information and the data upon which he made that determination of the public interest secret, that seems to me to fly in the face, certainly, of open government. It seems to fly in the face of common sense, and natural justice too, although that is just a little bit of a stretch, perhaps.

Gee whiz, Mr. Minister, if you're going to say, "We did this in the public interest and my regional forest manager made this kind of determination and looked the whole situation over," that sounds very logical and reasonable. Why not share it with us? I'd like to learn a little more about it. I'm trying to learn as much as I can from the minister.

HON. MR. WATERLAND: That's what gave me trouble. The member has so much to learn that I really don't know what to table. Any memos and correspondence and things that took place between the regional manager, the assistant deputy minister in charge of operations, the deputy minister and myself is available to the member if he should wish to come and search it out and determine what it is that he wants. I would be more than happy to table the documents in the House, because we are running an open Forest Service and an open government.

MR. KING: I thank the minister for his kindness. Yes, I do indeed have a great deal to learn. I think that anyone who holds the attitude that they know it all, be they at this level of government or any other, is perhaps destined for a bit of a shock some time down the road.

Be that as it may, I think I've identified very specifically what I would like from the minister and what I would appreciate having him table, and that is the advice and the recommendations from the regional forest managers in Prince Rupert and Vancouver recommending the change in the stumpage appraisal system under sections 83 and 84, I believe it is, related to these areas. The minister has already told me he's acting on the advice of his regional managers, so surely there is a recommendation there, and I wish he'd share that with the House. Does he understand that, Mr. Chairman?

When might this be done, Mr. Minister? I would appreciate having a look at that before we go too much further in your estimates, because I think it's interesting information which will certainly be helpful to me. If the minister could get it in this afternoon, we could possibly deal very expeditiously with his estimates.

MRS. WALLACE: Mr. Chairman, during the discussion of the minister's vote I raised a question relative to Bradshaw Logging in the Cowichan Valley. I think perhaps the minister didn't quite grasp what I was asking, because he indicated in his comments that it was unusual for anybody to be complaining about a late billing and left it at that. To just qualify this thing very clearly I would read in part from a letter to the

[ Page 2813 ]

B.C. Forest Service, February 21 of this year, a copy of which I and the minister received. This is from Barry Bradshaw, the owner-operator of Bradshaw Logging. He says in part:

"I understand it is Forest Service policy for the companies receiving the timber to pay the stumpage. It is also the policy of most companies receiving timber to pay us, the logger, when they receive the scale and royalty accounts. In the past this has been a satisfactory arrangement, as the S&Rs were sent fairly soon after the logs had been scaled."

Then he goes on to say:

"I worked in the forest industry for four years taking the scaling books from the government scalers, computing footage and summarizing logs according to grade and species for the FF-72s. The procedure is very simple, so you can see why I'm appalled with the inefficiency in the issuing of the S&Rs within a reasonable length of time. Aside from excessively late SRs, we have received S&Rs cancelling four and five previous S&Rs, and on two occasions we have sent wood to Western Forest Industries Ltd. at Honeymoon Bay and the S&Rs have been sent to Doman Forest Products in Duncan. This is holding up processing of payments even further. I'm sure you can understand that a small business cannot afford to have tens of thousands of dollars being held up in this process."

Incidentally, he attached a copy of a letter from Doman Forest Products Ltd. supporting his arguments. He goes on to say:

"We cannot stop paying our men's wages, compensation, taxes or accounts payable for fuel, repairs and maintenance, et cetera, because of this unnecessary delay of issuing S&Rs."

Certainly it's not a case of a company that is being a bit unusual in requesting immediate billing. This is the case of a logger who supplies the logs to mills, and because of the delay and repetition and confusion in sending those statements to the wrong companies, they find themselves in a position where they just have no cash flow.

That's the point I was raising with the minister, and I would hope that he would be able to now recognize the point and perhaps assure the House, and Mr. Bradshaw in particular, that steps are taken that will rectify that and that these small loggers will not find themselves in this position in future.

HON. MR. WATERLAND: Mr. Chairman, I didn't realize the member wished me to respond. I thought she was giving me some advice. She's talking primarily about arrangements between someone who harvests logs and someone who sells them, and whatever their financial arrangements are is their business. If they base their sale price upon our stumpage accounts and we delay that, that's unfortunate. As I mentioned to the member, I was looking into that particular case and we'll do everything we can to eliminate delays when they occur. I think we've done an awful lot in the last year or so to reduce those delays down to what we consider is a reasonable level at this time. But if there are instances where difficulties are caused, then I'll be more than happy to try to sort it out. I didn't realize she was talking about a private arrangement between a seller and a buyer of logs outside the Forest Service. If it is a problem, we're more than willing to do everything we can to speed the process up.

MR. LOCKSTEAD: Mr. Chairman, I just have a very short question to the minister relating to funding for personnel within regional and local areas throughout the province. I have over the last couple of weeks received some complaints from local forest rangers that they have been very short of funding and have had to cut back on what they consider to be essential people within their local district. Also, they were unable to hire summer students, in some cases, because of this lack of funding from the ministry. I don't know if the problems lie within the regional manager's office, the office of the minister, or where.

The other rumour I've heard on a couple or three occasions is that some of these people, who really don't want to be identified. tell me that the reason they're given for not receiving this funding is because we haven't passed the minister's estimates. The fact is, of course, Mr. Chairman, as you well know, we passed interim supply in this House some two months or so ago. But these are some of the reasons that I've been given. I don't know if that's correct or not. I can't say. But the fact is that this is what I'm told.

Perhaps the minister would care to comment on the shortage of staff and the lack of funding for these essential people out in the field.

HON. MR. WATERLAND: Mr. Chairman, it's very difficult to comment on rumours that the member has heard and is passing on here, but if he would like to be more specific either here or in my office or wherever, I'd certainly be happy to address the problems. All of our funding under interim supply is allocated. We have no problems with getting the money. As the member knows, our reorganization is now all but complete and our field officers are being rearranged slightly, but as far as I know we don't have any funding problems to carry on the programs which we have approved. There may have been some local delays for reasons I'm not familiar with, but the member will have to be more specific so that I can search out the answer for him.

MR. LOCKSTEAD: I can be very specific if it would be helpful to the minister, but the fact is that in one local forest region ranger area they are short 12 people at the present time for essential duties. The reason I'm given, once again, is lack of funding. The minister spoke about rumours and things, but I'd like the minister to answer what the problem is in terms of a lack of funding. Is this a situation that's going to be rectified, or are these local areas, such as, for example, the Campbell River, Powell River and Sechelt areas, going to continue to try to operate with the lack of people? The problem is funding, Mr. Minister. That part is not rumour. The only part I can't verify is the fact that somebody within the ministry said that the lack of funding is because we haven't passed the estimates in the House, which we know is nonsense, because there has been interim supply.

Let's forget that for the moment. The reality is right out there at the moment. In parts of the province of British Columbia there are some areas that are short-staffed and lack essential people. It's as simple as that. Perhaps the minister would care to comment.

HON. MR. WATERLAND: Mr. Chairman, all allocations to our various areas have been made. The member is saying that somebody in the Forest Service told him we're

[ Page 2814 ]

short of funds. I can just say that funds which have been approved are available for the programs and things are moving along.

MR. KING: I just made it to my feet with a heavy statute in hand. I'd ask the minister if there's any possibility in a few minutes he could table the correspondence on which he based the variation in stumpage application for the market loggers. Surely he could send to his office and get that. I'd be very interested in seeing it. If the minister would undertake to provide me with a copy of the correspondence later on in the day, that would be quite acceptable. Would the minister do that?

HON. MR. WATERLAND: Mr. Chairman, I'm not sure that I can do it today. I will do it as quickly as I possibly can, though. The correspondence will be in my office and my deputy's office and in other offices. I think it would be inappropriate to give you one set without the total package, and I'll endeavour to do that at the earliest possible time.

MR. KING: Can the minister tell me when he, received these appraisals from his regional forest managers? Was it early in April, the middle of April or when? I assume it was prior to April 1.

HON. MR. WATERLAND:, It was effective April 1.

MR. KING: Yes, I know. The changes were effective April 1, so I should have said the middle of March rather than the middle of April. I presume the advice and recommendations he received from the regional forest managers was in March sometime. Was it prior to that?

HON. MR. WATERLAND: Well, prior to April 1, for sure.

MR. LAUK: Just one comment before the vote passes. It seems to me that the minister should be prepared in Committee of Supply with some of these answers. The critic has asked him several questions and he's nodding his head and saying "prior to this date" and "prior to that date." The responsibility of ministers is to come to Committee of Supply prepared.

HON. MR. WATERLAND: If the member had given me advance notice of what he wished to have tabled here, I could have brought it with me; but he didn't, and I don't have it with me. I'll get it as soon as I possibly can.

MR. LAUK: Vote 105 is very specific. He has advance notice. His House Leader informs him when his estimates are going to come up. Vote 105 is in the book. He's got advance notice.

MR. KING: Mr. Chairman, I think the minister is a bit timid. He gets a bit panicky when you ask him a series of questions. I'm not attempting to lay any trap for the minister or anything. I simply wanted him to state very clearly the statutory authority on which he changed the stumpage appraisal system.

Interjections.

MR. CHAIRMAN: Order, please. Hon. members, the member for Shuswap-Revelstoke has the floor.

MR. KING: The minister still hasn't explained to me satisfactorily where he gains the authority. As I read section 84(2), it specifically grants the authority to the regional forest manager, not the minister. I don't disagree with what happened; in fact, I think it's fine. I had advocated to the minister that the market loggers get a break in their stumpage rate, and I'm not coming back now criticizing the minister for doing that which I advocated. Rather, I am simply questioning his legal authority to take the route which he took, I don't quite appreciate yet where the minister found the statutory authority to change the stumpage appraisal system, when it appears to me from reading the statute that that authority is vested solely in the regional forest manager rather than the minister. You see, Mr. Chairman, there can be an important principle here, because it's not a very healthy thing, necessarily, for a politician to be in a position to manipulate stumpage rates in response to lobbying. Perhaps that's why the statute appears to give it to the regional forest manager rather than the politician. What I am arguing and trying to explore is whether the minister exceeded his statutory authority, for a good objective but nevertheless by serious error.

I have seen a copy of the letter which the deputy, Mr. Apsey, sent out explaining the change. Just let me quote from that letter.

"Dear Sir:

"The Hon. T. M. Waterland, Minister of Forests, has instructed the Forest Service that effective from April 1, 1980, appraisals for the coast market loggers will be developed from log prices that are experienced by that segment of the industry.

"The minister felt that these measures were necessary at this particular time because the product, of the market logger is in a slump and this group is currently unable to get a price for logs that would reflect the price that is used in their appraisals. The minister's directive to the Forest Service is made in nine points. For your information we have summarized these points as follows."

There is the senior administrative officer, the deputy minister, stressing in this letter advising of the change in the stumpage appraisal system that "the minister has instructed," "the minister felt," "the minister's directive." I still have had no satisfactory explanation from the minister upon what precise statutory grounds he felt he had the authority to do this. It seems to me that the regional manager probably did have that statutory authority. The minister said he received advice and recommendations from the regional managers which he is not able or prepared to table with the House yet; I accept the minister's word on that. But I find it a bit curious that the deputy sought to stipulate in specific terms that the minister had instructed, the minister held this view. The deputy didn't say it was our advice from the regional forest manager, upon the appraisal of the material being harvested, the market conditions and public interest. The deputy didn't say that at all. He said it was the minister's view and the minister's instructions.

I just want to make sure, Mr. Chairman, that that minister, or any other minister, does not act beyond the authority which this Legislature gives to him, because the minister himself has decried the fact that some ministers in the province's history have allegedly acted beyond the scope of their

[ Page 2815 ]

statutory authority, I would never want this little minister to get into that kind of problem, Mr. Chairman.

HON. MR. WATERLAND: Mr. Chairman, I read part of the Forest Act to the member for Shuswap-Revelstoke a few moments ago, and he advised me that that wasn't necessary, that he had already read it. Well, I think perhaps it's necessary to read to him further from the Forest Act. I told the member that the actual determination of the prices is something done by the regional manager. He goes out and selects what prices to use once he knows what product is going to be used for the appraisal. The authority to say what product, in this case the product of the market logger, lies with the minister.

AN HON. MEMBER: Where does it say that?

HON. MR. WATERLAND: Well, if I could read for you from section 83 of the Forest Act, it says: "For all or part of a forest region the minister shall specify the forest products" — in this case I specified the product of the market logger — "the values and production costs of which shall be used in determining stumpage rates applicable to-timber cut in the forest region or part." It says, "the minister shall specify the forest product," and that's what the minister did. The regional manager then accumulates the cost of that product which has been specified by the minister and makes a recommendation to the minister as to what the stumpage shall be. It's very clear and straightforward. If the member could perhaps get some legal advice from the member to his left, we could have saved a great deal of discussion here this afternoon.

MR. KING: Mr. Chairman, I have read section 83, and I made reference to that when I discussed it earlier with the minister. Certainly the minister has some authority in terms of developing the overall standards. But, Mr. Chairman, there already is a standard in the Vancouver forest region, and that is the Vancouver log market. That is the standard that has been established as the basic formula from which stumpage is calculated.

Now the minister has intervened and set up yet another appraisal system within the same region; and as I said at the outset, I don't argue with the objective and the particular economic circumstances that warrant its consideration. But the minister is a little bit on the cocky side for a junior minister and a new person in the legislative role, in terms of: "Oh, you don't understand the statute." Well, you know, I like to operate with a bit of a spirit of cooperation, rather than lectures from....

Interjection.

MR. KING: Oh, you know, the largest noises come from empty vessels, Mr. Chairman, and it never seems to fail that the minister there with the iron lungs is constantly interjecting.

MR. CHAIRMAN: All hon. members, the member for Shuswap-Revelstoke has the floor on vote 105. Order, please.

MR. KING: Mr. Chairman, they're a bonny bunch, aren't they?

If that's the minister's proposition, that's what I seek from him. I don't seek sarcasm in terms of giving a lesson, and who I should get legal advice from. I simply seek straight-forward answers. If the minister believes that under section 83 he is granted authority to take the ministerial action that he seems to have taken, as far as I can determine, without advice from the regional forest manager, so be it; tell me. I question that, but we're entitled to a difference of opinion. All I'm seeking from the minister are forthright answers. If you hold that to be your statutory authority to superimpose yet another stumpage appraisal system in the Vancouver forest area, where the Vancouver log market is already held to be the basic system of stumpage appraisal, fair enough. All I want from you is an answer, Mr. Minister — an honest, forthright answer. If that is your answer, fair enough, I accept that. But I don't appreciate being admonished by the minister or anyone else for a question which I think is clearly in the public interest.

MR. CHAIRMAN: Shall vote 105 pass?

MR. KING: No, Mr. Chairman. I want a clear answer from the minister. Does he hold that section 83 of the Forest Act gives him the authority to amend the stumpage appraisal system in the Vancouver forest district, as he did? If so, I would appreciate his saying so to the House.

HON. MR. WATERLAND: Parts of the Vancouver forest region for which this special appraisal to help the market loggers was used were those parts upon which the market logger is operating. I'm not a lawyer. There may be other areas of the act which also apply, but as far as I know at this time that is the authority.

Vote 105 approved.

On vote 106: forestry program, $60,191,667.

MR. KING: I would like some more information from the minister. I think this is the appropriate section to ask questions under regarding Ocean Falls timber supply area. If my recollection serves me correctly there were some licences granted in the Ocean Falls timber supply area, I think, to Crown Zellerbach — or was it Doman's? I think there was another firm from the Charlottes too. Oh, golly, I forget. It seems to me there were a couple, anyway; maybe the minister can recollect and refresh my memory on it.

As I recall there were some exchanges made for small tenures — I don't know whether they were old temporary tenures or what form of tenure they were — on the periphery of the Ocean Falls timber supply area, and they were traded, in effect, for a new supply area within the Ocean Falls supply area. I think one was CZ and the other was.... Golly, the name escapes me. I forget. Can the minister confirm, or can he remember, the awarding of any contracts in the Ocean Falls timber supply area between 1975, when the Social Credit Party assumed office, and the first of this year?

HON. MR. WATERLAND: I don't have, at this time, any recollection of trades of old temporary tenures. That's not to say that something hasn't taken place. There have been some mid-coast sales which took place a couple of years ago that were advertised and competed for publicly, but I can’t recall trades for OTTs. I would have to research it to find out for sure whether or not that has taken place.

[ Page 2816 ]

MR. LAUK: Have you ever met Herb Doman?

HON. MR. WATERLAND: Several times, yes.

MR. KING: Mr. Chairman, as I recall it, an inventory had been conducted, I believe in 1975, of the Ocean Falls timber supply area to determine whether enough fibre existed within that unit to supply the Ocean Falls pulpmill or a modernization plant in the area. Can the minister tell me whether any full inventory has been done subsequent to that time regarding the fibre supply in the Ocean Falls timber supply area? Has any detailed appraisal been done since 1975 of the timber supply in the Ocean Falls timber supply area?

HON. MR. WATERLAND: Over the years a number of assessments of timber supply are done as our inventory is updated. Timber supply changes constantly with various changing conditions. I really don't know what the member wishes me to say.

MR. LAUK: You're the worst minister we've had.

MR. CHAIRMAN: Order!

MR. KING: Most people in the Legislature, and I think most people throughout the length and breadth of the province, understand that the supply changes somewhat according to growth patterns of the trees throughout the year, according to infestation, blowdown, and a whole variety of factors. But that's not the point, Mr. Minister. The point was that I wonder what kind of handle.... We've had evidence that Ocean Falls closed their pulpmill basically — cause they didn't have an adequate timber supply. They closed their pulpmill and they breached a contract for the sale of newsprint to the Los Angles Times. Is the minister seriously telling me that he really doesn't know what kind of timber supply there is in there — whether it would be enough to supply a pulpmill located at Ocean Falls of the vintage of the old one, or possibly a new mechanical mill? Surely that kind of work has been done. It seems to me I recall that there was also an offer made by an eastern forest firm to buy Ocean Falls and to acquire some kind of timber supply in the area. Did the minister not examine that at all? Does he have no information for the House on what kind of timber is available there? He doesn't know whether he gave any away since 1975 and perhaps eroded some of the supply in that area. What does he know about it?

HON. MR. WATERLAND: I told the member that a number of ongoing studies are taking place. We had sales somewhere in the mid-coast — I can't be specific as to what drainage — a couple of years ago. There were bids put in by several companies, including Ocean Falls, who I think cooperated at the time with Richmond Plywood on a bid. They weren't successful. The Forest Service is just now completing their finalization of the cut for the timber supply area. We have had public hearings and meetings in Vancouver to discuss it with the general public and the industry. I believe Sandwell did a study for the Ocean Falls Corporation a few years ago. I know that another consultant, E.M.O. Hood, did a study for Ocean Falls Corporation when they were having discussions with Kruger. The Forest Service itself has done studies. Finalization of the mid-coast timber supply area is just now being completed after these studies and after running the information through the, computers again. The strategic studies division of the ministry itself did a specific Ocean Falls–oriented study, one that I mentioned to the Leader of the Opposition a couple of days ago. That one indicated for that specific area, economically tributary to Ocean Falls, that there wasn't sufficient timber to satisfy their needs or the needs of any expanded plant. That is the state of things at the present time.

[Mr. Davidson in the chair.]

MR. KING: The minister doesn't seem to have any precise knowledge on the up-to-date inventory in the area. As I understand it — the minister can correct me if I'm wrong — the minister does have the authority under the Forest Act to direct the utilization of timber through a specific mill or a specific fabricating plant. I just wonder why the minister has apparently been awarding licences for the harvest of timber from that area to be utilized in plants other than Ocean Falls. It seems to me that that direction was calculated to ensure that there would not be a timber supply for the Ocean Falls plant or any replacement thereof. That is what I was trying to get at.

It seems to me, with Kruger making an offer to purchase Ocean Falls, they must have at least believed that the old, obsolete plant could be replaced and that there was, in fact, a timber supply available to warrant capital investment in a new plant of some description as a viable economic enterprise. Kruger is a very large company, they have a lot of expertise and experience, and I don't think they would enter into that kind of offer without their own economic analysis and assessment indicating that there was a viable operation there. I find it a bit peculiar that the minister doesn't really seem to know what was available there, and that he doesn't seem to have considered retaining all the supply in the Ocean Falls timber supply area, to ensure that it was directed to a fabricating plant in an existing town where there were existing jobs in jeopardy, but rather let it be eroded away, a bit at a time, to other companies who were directing it elsewhere, and in so doing guaranteed the demise of Ocean Falls and the loss of jobs incident to it. That seems a little difficult for me to understand and believe. Surely Kruger didn't come in and make what I understand was some kind of a firm offer to take over the enterprise out of ignorance, without some indication that there was a fibre supply available.

There are some strange goings-on with regard to Ocean Falls — breaching contracts, timber being allocated to other operators when the minister had the authority to direct that all the fibre from that area be allocated to the Ocean Falls plant. He has that authority under the act. It seems a highly questionable approach to the management of a resource in the province of British Columbia.

MRS. WALLACE: I wanted to ask the minister about the Nitinat Triangle. I discussed this with him previously, but there have been some long-standing negotiations going on there between the provincial and the federal government relative to the timber supply there and the allocation of that timber supply. I had thought the thing had been resolved, but I had a letter from one of the companies involved just a day or two ago which indicated that their future operations were more or less dependent upon the decisions and suggested that it was taking a very great deal of time to come to any decision

[ Page 2817 ]

on the disposition of that timber. Naturally, I'm sure, the minister can understand my concern, because we're talking about jobs in the Cowichan Valley. They depend a great deal on the distribution of that timber, because some of the areas are very short of log supply and others perhaps have other sources of timber that they could utilize. So I would like some comment on the status of the negotiations with the federal government and with the logging companies there relative to the Nitinat Triangle, if the minister is prepared to give us any information.

The other item — and I think this is the vote — has to do with the contracting out of tree-planting. Am I on the right vote, Mr. Minister, for contracting of tree-planting? I'm assuming that this is the vote it will come under anyway; I can't see any other one where it would fit in.

I've had several people in my constituency office who have in fact had to make some claims for payment of wages — these are people who work for contractors who were hired by the B.C. Forest Service to plant trees — and, of course, when the company doesn't pay the wages and if they cannot be found or so on, I understand there is some provision.... Certainly these people — and the person I was dealing with — were employees of the B.C. Forest Service, which was making some compensation to these people because their wages had, in fact, been defaulted on by the company. The company was not available; they'd gone bankrupt or they'd disappeared.

It seems that in talking with the people who were handling this, there is really little or no screening of the contractors who come in to plant. In fact the advice I got was that sometimes contractors who have given a great deal of trouble — there have been a great deal of problems occurring after the fact — when they bid again, perhaps because they are the low bid they will be rehired to plant again, even though their record has been very poor on previous occasions; they haven't paid the people they've employed to plant for them. I'm wondering whether or not the minister has decided to take any action and to screen these people a bit better.

Well, I see it's not just the Minister of Universities, Science and Technology (Hon. Mr. McGeer) who has new toys in this Legislature; the Attorney-General (Hon. Mr. Williams) has joined the club.

Mr. Chairman, I'm wondering whether or not the Minister of Forests has considered at all coming up with some different method and not just simply taking the low bid, if that's what he does, in fact, on those contracts for planting trees. If, in fact, that's what he's doing, it encourages contractors who are not completely responsible or reliable to put in a lower bid and then to hire people who go out and do the job and then can't collect their payment.

I know I had some half a dozen people who had all worked for the same contractor coming into my office. We did eventually get payment of wages but not from the company who had hired them; it came through a government source through the Labour Relations Board, I believe, and certainly would eventually come out of the taxpayers' pockets. This is certainly not in the best interests of the tree-planting system, if we have people who are coming in on this basis to plant trees and then not getting paid: certainly it's not going to be conducive to the best efforts in tree-planting either. I know that we've had some previous discussions about the regeneration rate and so on that occurs with these people when they are planting, but if you have a company that is hiring and is not particular about paying their employees, then they're probably not going to be very particular about policing the kind of job that is done.

While the Forest Service, I know, is very sincere and dedicated, it can only cover so much ground. It's been mentioned by my colleague from Mackenzie that there certainly is a shortage of staff, and that's something that has been raised by other members in this Legislature as well — that the actual people out there in the field doing the job, the skilled technicians and the trained people, just aren't numerous enough to do an adequate job. There just aren't enough people there. So when you're contracting out forest regeneration — the tree planting — under this particular vote. I think if you just simply accept the low bidder without any specifications as to their financial stability or some means of quality control, you are not doing the best possible job for the forests of British Columbia or for the spending of the taxpayers' money. In addition to that, you are encouraging poor labour practices on the part of contractors, who perhaps deliberately underestimate their costs in order to get the bid and then opt out. Certainly the company that we — the officials of the Labour Relations Board, myself and the people concerned — were attempting to deal with was a company that was just impossible to contact. I think the representative from the board said that he had tried on 40 different occasions and simply got an answering service. They were just unavailable. He'd gone to the addresses of the supposed shareholders and they weren't there. So there was no way of picking up this money from the company. As a result, the taxpayers were being charged with the costs that should have been borne by the company that was doing the job; in a roundabout way the taxpayers were paying as a result of it coming out of funds that are set aside for those kinds of things.

Mr. Chairman, I would hope that the minister can answer those two questions: the one relative to the Nitinat Triangle timber supply and where the negotiations are on that particular issue at this moment: also, whether or not he has any ideas or whether he's taken any steps to prevent the kind of abuse of labour practices that seem to be taking place with contractors.

I know it's not just my own area: I had a complaint from an area around Dawson Creek. I believe — in the northern part of the province — in which people have been hired and in fact received no pay at all. They worked several days and the person who had taken the subcontract — it was a subcontract in that particular instance — from a contractor had been paid, but the people that he brought in with him received no pay at all. I think they just gave up on that one. I don't think they carried it through they just decided that it wasn't worth the effort, because they hadn't worked that long. I'm raising the point because it is just one more example of how these things are occurring in the reforestation program. Certainly there have to be some measures taken to ensure that those contractors are reliable contractors and are going to meet their payroll.

HON. MR. WATERLAND: Mr. Chairman, the member for Cowichan-Malahat first talked about the Nitinat Triangle. Negotiations. I believe, are now getting cranked up again between the Ministry of Lands, Parks and Housing and the federal government. As the member knows, the problems that we are having in the area as far as forestry is concerned are caused by trade-offs that may have to be made in order to establish the Pacific Rim Park. Prior to the election before the

[ Page 2818 ]

last one, we were getting down to the point where negotiations were, beginning to come together as to what responsibility the federal government would have and what the provincial government would have. Unfortunately, these were interrupted by two different federal elections, and in the meantime.... I read a letter from the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) just a few days ago, and I understand that he is again in touch with the federal minister responsible and that these negotiations should be underway again soon. They've been going on now for some ten years and I'm not sure just when they'll be finalized, but it is a tremendous delay.

The member talked about the payment of wages to people who contract planting with the Forests ministry. We do require a declaration by contractors before we pay them that they have paid wages and other outstanding accounts as a result of their operation. I guess from time to time this isn't completely satisfactory and people do not pay their employees, but we try to police it just as closely as we can. We have literally hundreds and hundreds of planting and other silvicultural contracts each year, and occasionally someone will, I guess, sign that declaration falsely, and it's very difficult to catch up with him. However, we do monitor it and we also make very close inspections of all planting contracts prior to payment. As a matter of fact, we have a little slide show now which is being used to advise all planting contractors as to just what procedures we go through in examining and assessing the quality of their planting work. Their pay is determined on how successful their work has been. They get 100 percent payment only if they do a very adequate job. We have deductions for those who do not do a completely adequate job at a level of, I believe, 80 percent on the scale that we use. If it is below that 75 or 80 percent, they don't get paid at all unless they come back and correct it. So we monitor it very, very closely and I'm sure the government is getting very good value for the money we spend in reforestation. These problems with the occasional person skipping out without paying his employees are something we try to control by requiring these statutory declarations. Occasionally it doesn't work.

MRS. WALLACE: Just a couple of questions as a result of the minister's answers. Do you in fact go to the lowest bidder? Is that part of the requisite? Is it always the lowest bidder who gets the contract, or do you look at other requisites? What you are telling me is fine; you are checking up after the fact. But are there any prerequisites? Do you look at all at these companies' past records? For example, the company I was talking about had planted trees previously with the same kind of history and then they were right back in there doing it all over again, repeating the same kind of bad history of not paying employees.

You talked about the inspections, and that the company is only paid 100 percent if they have done a good job, Perhaps it is not your responsibility, but if in fact the company is paid 80 percent because they've done such a terrible job, what happens to the employee then? Does he get paid at only eight-tenths of the number of trees he has planted, or does he get paid for all the trees he's planted?

HON . MR. WATERLAND: How the contractor pays his employees is between them. Some of them go on a piece basis, some go on an hourly basis and there are various arrangements made. We discussed that to some extent the other day, I believe, when the member for Shuswap-Revelstoke (Mr. King) was talking about going to the lowest bidder. We usually do. If the bid is extremely low we discuss it with them and try to find out why it is so low and if they can actually carry on at that low a level. At times we have refused to award a contract on a bid that is so ridiculous that we know the person can't possibly complete the contract satisfactorily without losing money. We do follow the history of planting contractors and if the history is of abuse or poor work then we have at times refused a contract to people on that basis as well. So it is not just a matter of getting the contract if you are lowest. We do try to assess the ability of a person to perform as well.

MR. MITCHELL: I would like to switch a little from the large multinational corporations and the large timber resources that my fellow members have been discussing. I would like to bring the House back to a question I raised in the minister's estimates earlier on — that is, the development of the salvage of forest waste. I feel that the ministry, under the leadership of our minister, should develop a policy such that we can have an effective labour-intensive industry that is going to create jobs. I've travelled throughout areas in my riding and I have spoken to a lot of men and women who have attempted to earn a living from the forest industry about the waste today that is going up in smoke, the waste today that is being allowed to lie on the ground and rot. I know the minister stated in his offhand way that it doesn't just rot, that it gives nutrients back to the ground. I agree with that. He may be interested in producing nutrients for the ground, but I am more interested in producing food for the tables of people who are not working. There is a vast group out in the community who don't have a trade or a college education, but they are prepared to go into the forest and do an effective job of salvaging wood that otherwise has been allowed to rot and be burned each year when they burn the slash.

I have toured some of the areas and though I have talked to different groups of people and different salvagers, I am going to confine my remarks this afternoon to one part of my riding, the area covered by tree farm licence no. 25 in the Jordan River area, the area that is controlled by Rayonier Canada Ltd. This goes back over a period of five or six years of one particular enterpriser making a living and hiring anywhere from five to ten employees who, instead of being on welfare or instead of claiming unemployment insurance, were going to work every day, earning a living. But because of the petty little bureaucracy, or the regulations that were developed by the ministry, this particular industry ground to a halt and was shut down. At present at least two of the workers who were earning a living are back on welfare. I won't mention any names, but I am more than happy to give to the minister the name of the particular company, the dates, times, and the copies of all letters.

I would like to have a review of what happens when a group of individuals are prepared to go into forestry, to go into the slash that is left by the companies who go in and cream it, taking the best of the timber out, who can have the multinational organization behind them so that they can process it. But when you have a group of people who are basically working with their hands — working with the minimum amount of machines and equipment — what they are doing is taking the waste. As they say, the large companies have creamed the forest, and they are trying to make an existence on the skimmed milk that is left.

[ Page 2819 ]

They can make a living on some of the products and can bring them back into the local economy. Some of the products are needed by our society today — products that are and can be utilized, but regulations that have developed have shut it out. I'll just read a few of the products: there is sawn lumber — fir, cedar and hemlock; shake blocks; shingle blocks; fence posts from the debris on the active logging site and also from the commercial thinnings; fence rails; sticks and stakes for gardens; and cordwood. Each one of these products is being produced from waste. They are products that are used. They are products that create employment. They create the pride that a person can develop by getting out into the forest and working. As I stated before, Mr. Minister, the procedure that has developed has shut this one particular operation down.

I'll go back to the letter that actually was the straw that broke the camel's back. It is a letter from Rayonier Canada, dated February 28, 1979. It says:

"Please be advised that due to the request of the B.C. Forest Service, effective on this date all special forest products removed from company lands are to be scaled at the forestry office in Jordan River. As such, you should make the necessary changes in your hauling schedule to have your products scaled during the working hours of 8:00 a. m. to 4:30 p. m., Monday through Friday.

"Also, please be advised that the rates of payment have been increased by approximately 2 percent as a result of the increased work for our staff due to the new metric scaling arrangements instituted by the B.C. Forest Service."

For someone who is working in an office — someone who goes to work every day, has his regular coffee breaks, has an hour for lunch, and goes home with the local car pool — these regulations may fit into your bureaucratic mind. But for people who are out 20 miles from the main road, hustling a living by developing and salvaging waste, when you've left home at 6:30 in the morning and drive two hours, you're 20 miles back in the bush, you start an operation going, and then you realize that to have it scaled, you have to leave at 2 o'clock to get back. The department can issue a scaling licence to individuals. They can issue a testing requirement, and the department can make effective spot-checks to bring in a regulation that actually cuts a third of the day out of the operation. Once you get back 20 miles into the bush, once you have pulled out a few sawlogs that are broken anywhere from seven to ten feet for the slabs that you're running through a small portable mill that you've invested $18,000 in, that you've moved into the bush, you're not running an operation like a major mill; it's an operation of individuals trying to make a living. When they get into the woods, when they get their operation set up, when they have to do their work, and conform to the regulations of the Workers' Compensation Board and all the other regulations that come into employment, they are running an operation.... They are salvaging wood that would normally be burned, salvaging shake blocks, salvaging, out of the debris that has been left out on the piles, to make fence posts, to cut — as a lot of the women are doing now — simple little things like flower stakes for gardens, for Beacon Hill Park. Many of the local nurseries are buying them; they're creating that job. They're getting that person out, and he has to pack all these bundles of sticks out so some person can be there and can get off at 4:30 p.m.

There must be a method of authorizing and training a person — someone in a crew — who can do scaling on the amount of wood that is salvaged. This is salvage that is normally going to be burned; it's going to be allowed to rot. It's not any great amount of forest products that is being ripped off by individuals. It is material that is creating employment, and in this time of economic slump.... In the rural areas there are a lot of people who want to work; they're not happy collecting your welfare, they're not happy collecting unemployment insurance. They are prepared to get out there and do a hard day's work and earn a good living. A lot of new youth without any training can get out and get into the woods, get their training, and then they can move back into the major industries that are in my particular area — and in the rest of B.C.

I feel, Mr. Minister, if, through your department, you could develop some type of ombudsman who could work in conjunction with the Forest Service and the multinational corporations that control the vast areas that make up our tree-farm licences...that there can be a type of regulation that they can work with, that they can work under, and that you can develop an industry. I feel that maybe in the past we could keep the economy of British Columbia going by just having everyone as fallers and buckers and that they could work in the mines and the mills and we could cream the resources. But I think we're coming to a time in our own economic development that we have to develop a secondary type of industry. We must develop utilization of our resources.

I feel that the leadership must come from people within the department. It must come from people with a little bit of compassion, with a little bit of business sense, with a little bit of understanding of working with their hands, not from those who've got the degrees in forestry and those who can create a million dollars with a million acres of timber. These people will survive because they have the ability and the knowhow, and they have the cream that they're taking off our resources. But there are a lot of people that are not even asking for the cream. They're only asking for a simple opportunity to have a share. I say that, Mr. Minister, very humbly. They want a share of the resources that are being allowed to go to waste. Instead of worrying about the nutrients for feeding trees, let's worry about putting food on the tables of people who want to work.

[Mr. Strachan in the chair.]

I've heard all kinds of stories that if you allow people into the woods, they destroy and steal the company's equipment and that they don't do a good job. I think it's only fair — as I'm using one particular company that I'm prepared to submit to you — to read a letter that came from the forester to the particular company that he was working with. He says: "I am pleased with the job you did in salvaging material on our Juan de Fuca operation. I have set up the new agreement for your signature, and if you wish to continue salvaging at the Juan de Fuca River, the new agreement is the same as the old one. Again, if you will sign both copies, return one and keep one yourself." It's continued. Now this operation would have been working today. This operation would have been working and they would be creating employment, but because of the little regulations, the bureaucrats, the frustration, it has been shut down. I ask on behalf of a lot of people out there what the policy of the ministry is on salvaging. What kind of

[ Page 2820 ]

rules and regulations can be brought in to help the little guy who is trying to make a living out of something that right now is being wasted, right now is left to be burned, and right now is left to rot on the ground?

HON. MR. WATERLAND: Well, Mr. Chairman, the member is once again using the old tactic of saying that the big companies are creaming the forests and the little companies and the individuals are getting nothing. All licensees in specific areas in the province must harvest to the same utilization standards; nobody gets any different rates than others.

As far as the ability to salvage after harvesting to utilization standards is concerned, in the past this has been by arrangements made between licensees, because they have had the responsibility for post-harvesting cleanup, etc., on the landsite. So the agreement has been between the licensee and the salver. Now at times salvers have not done their work properly and have actually created problems for both the licensee and the Forest Service — admittedly it's not very many; most of them do a good job. But when this happens, it makes the licensee somewhat reluctant to enter into agreement.

In order to overcome this problem I have an amendment to the Forest Act before the House now which will make it possible to have a licence issued for salvage without placing the responsibility for the salver on the original licensee. He can have a salvage or a special products licence issued either before, after or during the normal harvesting licence's period of validity. So in that particular area of concern one of the reasons it was difficult to do has been overcome. By and large the relationship between salvers and licensees is good, and there is nothing in the regulations or the forest legislation that causes people not to be able to do this; it's a matter of agreements between the two of them. Now we are taking that one step further, whereby we can relieve the licensee of that type of responsibility.

MR. MITCHELL: Maybe the minister, Mr. Chairman, missed what I read from the letter — and I'm prepared to supply him with it. It says:

"Please be advised that due to the request of the B.C. Forest Service, effective on this date" — which is February 28, 1979 — "all special forest products removed from company lands are to be scaled in the forestry office in Jordan River. You should make the necessary changes in your hauling schedule to have your products scaled during the working hours between 8 and 4:30 p.m."

Now up until that time there was a very efficient arrangement between the owner of the tree-farm licence and those who were doing salvage work. To understand, when you are talking about those who are doing the salvage work, they are a small group of people who are going out to log dumps, to where the spar tree had been removed, to where all the slab, the debris and the junk is. They go out and they salvage that on-site and then they bring it out — and in many cases they're 20 miles away from the main road. By the time they get in there.... Many of them want to work throughout the day while there is daylight, because there are a lot of winter nights, a lot of snow, and they can't work. The type of people that go into salvage are people who are prepared to work and to work hard, and they can't be tied down to this simple little regulation of from 8 to 4:30. Once they've got into the woods, once they have got onto the site, they want to work, they want to salvage as much as they can and then they want to bring it out.

Basically what they're asking, Mr. Minister, is that this type of regulation at least be discussed with those who are working there, so they have some input. When they have a regulation like that, you should listen to the explanation that they give that it's not workable, and come up with some other regulation, come up with something where you can issue a person with a scaling licence. They are people who are working in the woods, who understand scaling. No one is complaining about the stumpage rates; no one is complaining about the regulations of producing it; they're more than happy to show their books. There must be another way. When you collect the sales tax, you don't have someone there every time you collect the sales tax so that you have to file a form. You develop a trust with the store owners and those who collect the sales tax, and you develop in that particular branch a method of spot checks. You develop a method; they have to follow within a certain average. If a person with three or four men working in the woods — I say three or four men; some of them are single parents; some are men and some are women. If they are going to fit in that particular schedule, they are going to come up with an average very much like the collecting of the sales tax.

In these sorts of laws, rules and regulations I know that with a little thought, with a little input from those who are involved in it, you can come up with something workable. You can come up with something that is going to produce employment, and it's going to help an awful lot of people who, as I said before, don't have a trade, do not have any degrees, but are more prepared to work than they are to sit back and collect either welfare or unemployment insurance. They want to get out and make a better living. They want the training. As this industry develops, they will be making lots of money.

There is an abundance of resources there. I've been quietly estimating that you could put a six-rail fence all around Victoria with just the thinnings that are lying in the woods and rotting. I can show you on farms all kinds of rail fences that have been salvaged, that have been built, that have been sold. I can show you buildings that have been built with salvaged material — shakes of cedar bark on the side of buildings as a decorative industry. This was something that was normally burned. But this is something that is there to salvage, and it is a product that is sold.

You say it was the simple final straw that broke one particular company's back. I think that the minister, with a little thought, with a little input from those who are involved, can come up and get this operation back onto the rails.

MR. SKELLY: Mr. Chairman, I thought the minister was going to answer the questions of the member for Esquimalt–Port Renfrew.

I have just one question under this vote for the minister, and it relates to the Pacific Reforestation Workers Association and the concern that they have about pesticides. Apparently during the growth of seedlings in provincial government nurseries, a number of pesticides are used to prevent the new stock from being attacked by various bugs, organisms and that kind of thing, and some of these pesticides leave residues on the seedling stock that could have some health impact on the reforestation workers. They are concerned that they've never had any agreement between the

[ Page 2821 ]

Forest Service silvicultural branch and their association to notify the reforestation workers as to what pesticide residues they can expect on the seedling stock, and what possible health impacts these materials will have on those doing the actual work of reforestation in the province of British Columbia.

They did some testing on their own, I understand, of seedling stock, and found out through the environmental laboratories in Vancouver that there were residues of the fungicides Captan and Benalate on the seedling stock. Both of these, I think, are based on mercury compounds, and mercury is an extremely dangerous chemical, as we all know from the minamata experience in Japan. The reforestation workers would like to have some assurance from the Ministry of Forests and from the silvicultural branch that where these chemicals are used in the nurseries, and when residues are evident on the seedling stock, they will be notified and will also be notified of the potential health impacts of these chemicals. I wonder if the Minister of Forests has come to some kind of agreement with the Provincial Reforestation Workers Association that the silvicultural branch will notify those workers when there are pesticide residues on the seedling stock that could have some impact on the health of those workers.

HON. MR. WATERLAND: We have met quite frequently with the western reforestation — I forget the name of the group — regarding the use of these pesticides on seedlings. They have been made fully aware of what we're using. As a matter of fact, when seedlings which have been treated with herbicides of any kind are shipped out to our regional areas, our regional manager is aware of it, and they advise any reforestation workers just what has been used and make sure that they are aware of the fact. We are continuing to discuss these problems with them. We are always using ways of seeking other systems which will not require the use of chemicals. However, at this time it does require that use.

All of our nursery personnel and nurseries are licensed and all pesticide applicators hold certificates of qualification under the various pesticide control regulations that exist. We are in touch with them at all times. As far as I know right now, we have never received seedlings that have been treated with chemicals without being advised of that fact before the planting contract begins. There is a good communication with them. It is a matter we are continuing to discuss and trying to find ways of avoiding that but at the present time the use of chemicals is still necessary. As I said, they are always notified.

The member for Esquimalt–Port Renfrew was talking about salvage. There is no way I can see that any material within the utilization standards should not be charged for. I will not subscribe to the idea that under an agreement with the licensee they should be able to scale their own product. We went through that discussion with the member for Burnaby-Willingdon — whether it is a large or small volume. If it has stumpage accruing as a result of it, I think the scaling should be done by Forest Service people, so I will not subscribe to them scaling their own. However, I believe that material below the utilization standard that is taken out should perhaps be taken out stumpage free, because if you apply stumpage to it, what you are doing is discouraging the use of it. It is a disincentive and I think we can move in that direction. However, as long as it is at or above the utilization standard it will have to have stumpage paid. If they take out that kind of material under agreement with the licensee, it should be scaled by the Forest Service scalers. If the demand were to justify it, I don't think it would be impossible for us to provide for some extra-hour scaling for these people if they have to come out after hours. Whether the cost which we'd be required to pay as a result of that would be justified in benefits which would accrue to the salvager is something we'd have to assess. We are concerned about those problems. We are working with the salvagers and trying to encourage the salvage of a lot of this unusable material.

MR. MITCHELL: There is one other thing you brought up. No one is really complaining about paying a certain amount of salvage. There has been a change in regulations in spite of my colleague who asked why you had different rates. I believe the department rightfully came up with a different rate of salvage. Originally in this particular area they were charging $34 a metre or whatever it is, but they did drop it down because they did recognize that the cream was taken off in the large bulk trees. They came up with a different rate for the salvage material, which I agree with. On behalf of the many people who were salvaging, they appreciated that bending, changing, altering or whatever they did in the rules and regulations of the department.

This other section of getting out in an area.... It is easy to say we can't do it. It's not that we can't do it; it is that there are certain regulations we have to develop to fit a particular problem. As the old saying in police is: if it can't be done, we just work a little harder. I'm sure that the minister with his deputies and with some consultation.... The sales tax people who have developed rules and regulations and the policy of averages can assume — they put in so many types of scale reports and do spot checks — when somebody is ripping off the system. It is quite obvious. It is not for me to come up with the ideas, but it has been tried. The income tax people do it; many groups do it now. This is all I'm asking. I'm asking you to realize there is a problem and come up with a solution.

Vote 106 approved.

Vote 107: fire suppression program, $7,717,500 approved.

On vote 108: timber, range and recreation program, $36,221,670.

MR. KING: I have a brief issue to raise under this vote. I am advised that a firm by the name of Little, Haugland and Kerr at Terrace, which was, I believe, a wholly owned subsidiary of Joslyn Manufacturing and Supply Company, a U.S. firm, sold their plant, and the timber supply was awarded along with the sale to another American buyer, namely Bell Pole. I think the minister is familiar with this transaction. The problem that has been raised with me by a Kamloops firm named Rogers, Hunter and Co. — which represented British Columbia firms interested in purchasing this mill at Terrace — was the fact that they had no notification whatsoever that Little, Haugland and Kerr were interested in selling out their plant. They had no way of knowing that they had gone ahead and made a private arrangement for sale to another American firm in British Columbia. Consequently they lacked any opportunity to bid or make an offer to acquire — and hence repatriate to the

[ Page 2822 ]

province of British Columbia — an interest in our forest industry. The proposed sale was referred to FIRA — the Foreign Investment Review Agency — and it was approved.

It was only after the approval by FIRA that the British Columbia firm became aware that a sale of this plant was pending. At that point, I am instructed, they approached the British Columbia Minister of Forests and asked him to delay any transfer of the timber rights until such time as a public hearing was held and the records of both the American seller and the American purchaser were reviewed. I am advised by Rogers, Hunter and Co. that the corporate record of both the seller and the purchaser leave something to be desired. I am advised that they have evidence that Little, Haugland and Kerr, a subsidiary of Joslyn Manufacturing and Supply Company of the U.S.A., sold some of their products directly to their parent company in the U.S.A. at a far lower value than was available on the open market. This inside selling was resulting, in effect, in the transfer of profits from British Columbia to their parent in the U.S.A. Additionally, that would erode the proper return to the Crown which should have been forthcoming from the harvesting and marketing of a British Columbia resource.

At this point it is not my purpose to say whether or not these allegations are valid; but certainly when allegations such as that have been raised with the minister, there should be a full opportunity for a hearing. I am advised that there was evidence of other practices by both these American firms which certainly were not in the best public interest of the province of British Columbia — poor utilization and other things. I am advised that the Forests minister in the province of British Columbia refused to intervene and delay the transfer of timber rights. I am advised that the cabinet eventually held a hearing at which time Rogers, Hunter and Co. of Kamloops, and their client who was interested in the purchase of the Terrace plant, had an opportunity to make their presentation to cabinet. I am advised further that that opportunity was totally inadequate; they were cut short and not afforded the opportunity to present the evidence they had of poor performance by the two American companies involved in the transaction.

Be that as it may, the real, central question here is: is there not a right for a British Columbia business enterprise to be notified of the pending sale of an American firm in this province, so that they might bid for repatriation of timber rights and control in our own house? The Foreign Investment Review Agency in Ottawa certainly doesn't notify them.

The Minister of Forests here has refused in this case. What is the minister's policy? Is it not to encourage British Columbia firms to take the initiative and develop manufacturing plants, to acquire them by purchase, and to create industrial activity and job creation in the province? Or does he not care whether it goes to foreign corporations? I would be very interested in hearing the minister's response to the story as it's been told to me, and an outline of precisely what the government's policy is when it comes to ensuring that an opportunity exists for British Columbia entrepreneurs to at least be apprised of a pending sale, and have the opportunity to put forward a bid.

HON. MR. WATERLAND: The sale of LH&K's operation to Bell Pole.... The member's right — I believe it was Mr. Ralph Yeo who was represented by the Kamloops law firm. This sale had been approved by the Foreign Investment Review Agency and a request had been made to me for approval of the transfer of the cutting rights when Mr. Yeo requested by letter or telegram — I forget which — that we hold up the approval until such time as he had had an opportunity to present us with certain facts and apprise us of the fact that he was interested in purchasing the plant which was done. I believe that the sale was delayed for a couple of months for that reason. Mr. Yeo sent in an extensive brief, outlining the reasons why he felt that Bell Pole should not buy it, why they should not be allowed to buy it, and why he should be. He was given an extended period of time to present any and all information he wished. His report — I don't know if the member has it or not — which I received and went through in detail, was what the member said: primarily allegations of mismanagement, selling at below cost in other jurisdictions, not complying with the Canadian Income Tax Act, and not paying holiday pay for Mr. Yeo's father, who previously had managed the LH&K plant. This was gone through in great detail and painstakingly by myself and my staff. We afforded an opportunity to Mr. Yeo and his legal counsel to appear before the cabinet committee, at which time Bell Pole also appeared. He was given every opportunity to present any and all information he may have wished at that time, which he did.

The allegations which he made were unfounded. There was no documentation or substantiation of them. In our analysis of the benefits to British Columbia of allowing this to be sold to Bell Pole, we considered their record. Bell Pole has been operating in British Columbia about 50 years, I believe — since around 1930. They have been good operators and good corporate citizens. They've employed a large number of British Columbians for many years and treated their employees very well. As there was no documentation or hard evidence to support the allegations, and as the combination of the LH&K and Bell Pole plants made a lot of economic sense in the Terrace area, a combination of the cuts of the two and the commitment to upgrade the plant will give economic benefit to the area and will secure employment and continuation of employment.

Mr. Yeo had apparently made an offer to purchase to LH&K, and his offer was subject to his being able to raise the funds. It was subject to his being awarded or allocated an additional timber supply. He was advised that if when the TSA analysis was finished there was additional timber, it could only be acquired through the competitive route, and that we would like to reserve some of that timber for a small business program which will keep it in circulation in the area. But his offer to purchase was very conditional, and conditional upon things that I don't think were going to happen — that is, a direct allocation to him of additional wood. So we investigated it very thoroughly. We, as a government, would prefer to see Canadian owners and operators, and if we can encourage that, we will. This case, as is the case with all of these requests for transfers, was looked into in great detail, and the bottom line has to be: "Is there substantial benefit to British Columbia by allowing this to happen?" When the answer is yes, we generally approve it. We don't have objections to Americans or Japanese or any others taking part in our economy, as long as they are good corporate citizens, and as long as they abide by the rules and regulations of the particular areas they happen to be working in.

So Mr. Yeo had ample opportunity to present his case. He did come before the economic development committee of cabinet; even though he may say he was cut short, he had every opportunity to explain his case completely. We did

[ Page 2823 ]

consider it very seriously and carefully, and in our judgment it is in the best interest of British Columbia to have allowed this transfer to go ahead and, therefore, approval has been given to transfer the cutting authority.

MR. KING: Mr. Chairman, I want to advise that I don't know Mr. Yeo from Adam. I haven't talked to the gentleman. Rather, I talked to one Brian Ross, from the legal firm of Rogers and Hunter, who authorized me to use his name in terms of putting forward the whole transaction which had taken place and objecting to it. Fair enough. If the minister feels that a cabinet appeal committee was struck and there was ample opportunity afforded to hear the evidence and that evidence was presided over and considered in a fair and impartial manner, then so be it.

I think the point that concerns me a little more deeply, though, is this. Since I wasn't involved in that hearing, I can make no judgment in that regard. I guess that's between the minister, Mr. Ross and his client. What does concern me a bit, and what the minister never responded to, is the proposition that this kind of sale between one foreign corporation involved in the forest industry in British Columbia and another can take place without any option, public notice or any opportunity for a B.C. firm in the industry to compete for the purchase. I would think that before the minister gave approval for transfer of cutting rights it would be very difficult for the minister to properly analyze whether or not this proposed transaction made economic sense if he had no alternative bid from anyone else.

You know, Mr. Minister, you may say this made great sense for Bell Pole to buy out LH&K in Terrace, but had you not received an urgent eleventh-hour request from a British Columbia entrepreneur who heard by the grape-vine that this sale was going through, what would you have had to compare the economic benefits to British Columbia of the purchase by the American company or the British Columbia firm that was interested? You'd have had no basis for comparison to decide which offer provided the greatest economic advantage to British Columbia. So I would think that before the minister, in his wisdom, decided, "Okay, we'll accept this sale and transfer cutting rights," as a matter of public policy, particularly when it involves foreign companies, which are very, very dominant in the British Columbia forest industry....

It would be different if they only had 15 or 20 percent, but we're looking at around 80 percent dominance by American corporations in the forest industry in British Columbia.

It seemed to me, under those circumstances, that the minister, as a matter of public policy, would say: "Okay, before I'm going to transfer any cutting rights I'm going to ensure that British Columbians are aware of this pending sale and have an opportunity to get into the game." Who knows? Maybe an interested person within the province will come along with the ready cash and a plan of development and investment that would provide a better option for the economic interests of our province. But if the minister is prepared to let the sale transaction slide through with only one proposed purchaser, to run it by the Foreign Investment Review Agency and give his approval for the transfer of cutting rights with no guarantee that anyone else in British Columbia even knows about the sale, it seems to me that's not in the best public interest. That's the point I'd appreciate the minister stating his position on.

HON. MR. WATERLAND: Mr. Chairman, it may not have been advertised as such, but it was common knowledge for the last couple of years that the LH&K plant was for sale. In fact, other companies had made offers which were rejected, for what reason I don't know. It's not a matter of it sliding through; it was common knowledge. I understand that the federal government, under their Foreign Investment Review Agency, are considering a requirement that the sales of companies to foreign companies be advertised to seek possible Canadian participation. We don't have at this time any such requirement in British Columbia. There is no legislative authority to require that. If the federal government does it, it would accomplish the same end result, but these sales usually don't develop without it becoming pretty well known. There's a tremendous grape-vine within that industry, as well as in other industries. I know for a fact that the pending sale and the fact that LH&K was for sale was quite commonly known in the province for at least a year — probably more like two years.

MR. KING: Mr. Chairman, the minister does have the right to transfer cutting rights or to refuse to transfer cutting rights. Armed with that authority, which is virtual life-or-death approval over the sale — certainly as a matter of policy — he could take the initiative and say, when it comes to the exchange of British Columbia timber rights between foreign corporations in this province: "As a matter of public policy I demand that it be advertised so that other interested people have an opportunity to at least make an offer." Why wait for the Foreign Investment Review Agency to set that policy which protects the best interests of British Columbians? I suggest to the minister that that's the very least he can do. Certainly, in assessing the highest public interest and the best economic potential for this province, it's advantageous to have more than one offer — perhaps a whole variety of them. To rely on the grape-vine or hearsay....

Interjection.

MR. KING: Oh. It was common knowledge. Well, these people tell me that they had no knowledge of it until it had in fact been approved by the Foreign Investment Review Agency. That seems like pretty sloppy administration to me.

I see no reason why, as a matter of public policy, the minister would not stand up and forthrightly say: "When it comes to dealing with British Columbia resources, and where the owner is a foreign corporation and proposes to sell to yet another foreign corporation, at least the business community and the public of British Columbia will be notified so that they have an opportunity to compete for the purchase of that right to British Columbia's resources.'' There's nothing so difficult about that, and I commend that policy to the minister.

MR. SKELLY: I think this is the appropriate vote to deal with this — under timber management — and I don't think it's been mentioned during the forests minister's estimates before. I'd like to talk about energy forests under the question of timber management. I'm wondering if this is an issue that the minister has dealt with in his department. I'd like to put forward a few ideas that have come to my attention over the last couple of years from various articles and from discussions with various people it! the industry and connected with energy.

The first is that, as probably the richest province in Canada in forestry terms, we've probably done less than

[ Page 2824 ]

most others in looking at the value of our forests as a renewable energy resource. Most people in Canada don't really understand the relationship between wood energy and other forms of energy, because it's not a big issue — when you hear people talking about nuclear power and people who are opposed to nuclear power. The simple fact is that wood produces about as much energy in Canada as nuclear power, if not more, and it's a fairly high-quality energy source. I'm just wondering what research has been done by the minister in regard to the production of energy from the forests of British Columbia.

I recently visited the province of Alberta — what they call an energy-rich province — at the invitation of the Premier of Alberta, and at that time I met with the director of the Alberta environmental council. They were in the process of doing an environmental assessment of forest management in the province of Alberta. One of the things they looked into — being a province that's concerned about energy — is the energy value of that renewable resource that they have growing over most of northern Alberta, in the poplar belt of northern Alberta. What the director told me was that it was probably one of the most significant energy resources that was available to the province of Alberta, considering the fact that oil and petroleum products would probably not last in Alberta for another 20 years. That wood was the renewable future in energy terms for Alberta.

He talked to me about some of the research they had done with poplar, cottonwoods and alder — species that are related to species that we grow here in British Columbia — in areas that aren't suitable for agriculture at all, but do grow tremendous amounts of cottonwood and related species. He said that cottonwood is the kind of tree that picks up nutrients from the soils and stores a great deal of the nutrients in the leaves. During the winter the leaves fall and restore the nutrients to the soil through the natural process, and what remains within the trunk and the branches of the tree is virtually carbohydrate. It can be burned, it can be turned into methanol. It's a very efficient fuel source, according to the director of the Alberta Environmental Council, and they have a tremendous amount of that renewable energy resource available. We have the same energy resource growing in the area that you live in, Mr. Chairman, and north of Prince George — tremendous amounts of cottonwood, poplar and species related to those growing in Alberta. Because of the till-now easy availability of petroleum products and hydroelectric power in British Columbia, we haven't really examined wood power as a possible alternative, albeit sometime in the future, to the energy resources we now use.

There have been some studies done in Ontario by research organizations and by Ontario Hydro, although they're not too happy about that research being done. Let me discuss just briefly some of the figures coming out of the research in Ontario. They estimate that it is possible to produce 14 to 20 tons per acre per year of fuel wood in the eastern counties of Ontario. They can maintain the fertility of that area by putting wood ash back onto the land or, in the interim, by planting leguminous plants such as alder, which is also itself a valuable fuel. The researchers in Ontario estimate that by taking an area of land 28 miles by 28 miles — that is, 28 miles square of land — and using it for wood fuel, growing poplars, hybrid poplars and that type of thing, they can provide the wood fuel necessary for something like a 500-megawatt electric generator. The capital cost, installed, of the 500 megawatt thermal — generator would be about $245 million,

Just to give you the comparisons that have been found out through research, for the Atikokan coal thermal plant the comparative cost would be $845 million for a 500-megawatt plant. For James Bay hydroelectric — we usually consider hydroelectric power as the cheapest form of power — the installed cost per 500 megawatts of power capacity is $733 million or almost three times what it would cost for a wood thermal plant. The nuclear industry tells us nuclear is the cheapest power in the world. According to Ontario Hydro, the Darlington nuclear plant will cost us $850 million per installed 500 megawatts, something like four times the cost of a wood thermal plant. In addition, the cost of the fuel is relatively cheap. I can just give you the figures for wood and coal. Water is pretty cheap, but some people don't have it, so I can give you the figures for wood and coal. Wood is available to the plant at $17 per dried ton, and that represents something like 15 million btus per ton. Coal is $40 per dried ton, and that represents something like 25 million btus per ton.

With the obvious advantages of wood as a renewable energy resource, I am wondering what kind of research the minister is doing into the use of the forest lands of British Columbia. I am not talking about all the forest lands; I am talking about some of the marginal lands now, lands in the lower Canada Land Inventory categories for forest use. What is the minister doing to analyze those lands and possibly direct the timber growing on those lands to fuel timber for electric generation, or possibly for the production of methanol?

Recently a study was done by Paul Jones and Associates on the availability of wood fuel from logging residues on Vancouver Island. The study, I gather, was made available to the public in late 1978 or early 1979. I don't have that study in front of me now, but I could just paraphrase what was in the study. According to Jones, the 45 percent of the forest residues that were economically accessible could be used — he took the cost of hauling into account — to generate something like 200 megawatts of additional electrical energy on Vancouver Island. He said 50 megawatts of that could be generated at Duncan in the Cowichan area, 50 megawatts at Port Alberni, another 50 at Campbell River and possibly 50 in the Port McNeill area.

It was reported in other studies, such as the Shaffer report, which criticized the cost-benefit analyses done for the Cheekye-Dunsmuir line, that the government in making its decision on the line did not take into account sufficiently the availability of wood waste on Vancouver Island as a partial solution to our electrical energy problems. What has the minister done? What policies are being developed to use our forests as a renewable energy resource?

The Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland) talks about having to substitute for imported oil on Vancouver Island, because it's becoming increasingly scarce and increasingly expensive, and we don't want to depend on this imported oil well into the future when it's going to cost us seriously and dearly to buy this oil. He's talking about alternative fuels. He appears to be afraid to talk about energy conservation, which is our best and cheapest source, but there are other renewable resources on Vancouver Island. I'm wondering and in light of the Paul Jones report, in light of research that's being done elsewhere, for example in Ontario and in Alberta, what the minister is doing to look into the renewable energy value of some of those marginal forests in British Columbia.

[ Page 2825 ]

HON. MR. WATERLAND: Mr. Chairman, the Ministry of Forests is aware of the tremendous potential of using wood waste as an energy source, and in addition there is potential for growing wood specifically for fuel. The lead agency, of course, in developing energy sources is the Ministry of Energy, Mines and Petroleum Resources. Our ministry works closely with them in studies and in policy-setting as far as the use of the forest biomass for energy is concerned.

The Paul Jones and Associates report, commissioned by the federal government, did get the cooperation and participation of people within my ministry. We're not unaware of the report; as a matter of fact, right now the forest industry in British Columbia is just over 50 percent self-sufficient in energy, so the greatest use of energy from the forest biomass up to this time has been used in the industry itself.

We again as a ministry are cooperating with B.C. Hydro and the federal government in trying to develop a generation plant in the Quesnel area, because there is a tremendous amount of hog fuel used there. As a matter of fact, one of the amendments to the Energy Act — or the B.C. Hydro act, I guess it was — last year was to accommodate that type of thing. As the member knows, we are required to establish and have all but completed the appointment of the Forest Research Council, and one of their functions will be to monitor and help to direct research in the use of the forest, one avenue of which is in energy production. So although we're not the lead agency as the ministry responsible for the resource, we're working with other agencies such as the federal government, B.C. Hydro and the Ministry of Energy, Mines and Petroleum Resources to try to see that this happens.

At the present time I believe the economics even on our lower site forest land would indicate that the growing of wood for forest products is probably a better economic use, but that picture is changing rapidly as energy costs go up. At some point in the not too distant future perhaps some of the land should be used for that. But all I can say is that within the ministry we are keeping abreast of what is happening; we are cooperating with other agencies and will continue to do so. I'm sure that the Minister of Energy, Mines and Petroleum Resources would like to discuss this subject, because self-sufficiency in B.C. and Canada is a part of his energy policy too, and he recognizes that wood is a valuable energy source.

MR. SKELLY: I'd like to thank the minister for his answers, and I wonder if he could provide me with some more specifics. I'm wondering who in his ministry is responsible for liaison with the Ministry of Energy, Mines and Petroleum Resources on the development of energy forests. Does he have any studies that have been completed, and are there any demonstration projects underway? I can appreciate, as the minister says, that the economics at this point do not really lead to using forests even on lower sites for energy purposes, and that industry uses waste wood — because it is a waste product and readily available — for energy, but the economics of bringing new wood in may not be indicated at this point.

But lead time is required for wood-energy facilities as it is for any other kind of energy facilities, and it appears that Hydro has projections for energy projects well into the next century — in fact, decades into the next century for thermal as well as hydroelectric energy projects. Other organizations are developing along lead times that would lead us well into the next century as well. I think it's an urgent matter that the minister consider the value of our forests and forest lands as renewable energy resources, and that he get involved well ahead of the economics. We all know where the economics are going; the price of oil is going up along an exponential curve, and there is absolutely no doubt that that resource is going to be extremely expensive in the future. So now the minister has an opportunity, while he has this lead time, to set aside certain forests and to develop certain projects as demonstration projects so that these things will be on line when the economics indicate.

So I'm wondering whether he has any projects in mind. Has he done any studies for particular areas of the province? Who in his ministry is responsible for this concept and is responsible for liaison with the other ministries concerned?

HON. MR. WATERLAND: Mr. Chairman, we haven't gone so far as to look at specific areas for growing fuel wood. The studies being done now are within three areas of the ministry: engineering, special studies, and our technical services group. I can't tell you if there are any reports completed at this time, but if he wishes to discuss it further he should perhaps contact Mr. Apsey, my deputy minister, who can direct him to the proper people within the ministry.

MR. SKELLY: I just have one final question, again relating to timber management. One of the problems, it seems, is that the people hired by the ministry are foresters, and I think it's possibly a mis-appellation that they're called foresters, because foresters seem to me to be people who are trained in how to differentiate the wood from the trees. When they're looking at a particular piece of terrain, they're looking at it in terms of its potential for growing a certain amount of raw material for a sawmill over a certain number of years. They're not looking at the forest as such. So when you talk to a forester, he talks about rotation age, and he talks about the trees on that site being thrifty, or the trees on that site being over-matured, depending on how much merchantable volume they're putting on at any particular period of time during the life cycle. But a forest is something that grows for thousands of years, and grows through different cycles and climaxes. Possibly the foresters are the wrong people to be managing the forests.

We have a particular problem. The Minister of Tourism (Hon. Mrs. Jordan) brought it up, and it relates to the proposal to log the area of Meares Island off Tofino. The major source of income at Tofino is fisheries, which does very little damage to the environment, and forestry, which has a great deal of environmental impact. The other industry, which has virtually no impact on the environment at all, is tourism. But forestry does have some impact on tourism and on fisheries, and sometimes a very poor impact.

I was very pleased that the Minister of Tourism brought up the issue of the logging of the islands opposite Tofino. It's one of the most beautiful spots on earth, and unfortunately those islands are included in a B.C. Forest Products tree-farm licence and partly in a MacMillan Bloedel tree farm licence. What I would like to see is some control taken out of the hands of the Minister of Forests, who is advised by foresters who don't really have the breadth of understanding to deal with those forests as forests. They know how to deal with them as growing sites for trees, and they can tell you that in 80 years those trees will be ready to cut down. They can tell

[ Page 2826 ]

you that maybe some other sites are worth 120 years and then they get overmature, or they're not thrifty, or something like that, but they have difficulty in dealing with the forests as forests. It's a serious problem when people in the tourist industry, or people who are concerned about the tourist industry, try to talk to your staff about the way those forests are being handled and managed.

I think it's a worthwhile thing to look at a policy within the Forest Service which would take this as its objective: all of the forests in the province should be managed on a total forest ecosystem basis; only those areas which are to be cut in a particular year or possibly to be cut within, say, the terms of your five-year plans or five-year projections should be taken out of the managed forests and managed for raw material production for sawmills and pulp and paper mills, and the balance of them should be managed on a total ecosystem concept. I don't think that's being done at the present time.

I think there is a serious problem, as there is in the pollution control branch, where it seems that the engineers have too much sway, or in B.C. Hydro, where it seems that the electrical engineers have too much sway. It seems that in the Forest Service the foresters have too much power to decide. We should implement a policy where, except for those areas where we're planning to cut this year and in the five subsequent years that are covered by your plan, the forests should be managed on a total ecosystem concept for wildlife, for fisheries, for clean water, for clean air. You need more than foresters to manage that aspect of the forest because you're managing the total thing, the total forest ecosystem, which matures possibly over a thousand-year cycle. I don't think the minister has that capability right now. I'd appreciate his comment on that statement.

HON. MR. WATERLAND: I'll just briefly comment, Mr. Chairman. Goodness gracious, I am sure that the professional foresters' association and the universities which teach forestry courses in B.C. will be quite disappointed when they hear you say that foresters are very narrow in their education and that they simply look at trees for harvesting. If you look at the curriculum at the universities, you'll see that the foresters have quite a broad basis of knowledge in many areas. The ministry itself has quite a number of disciplines included in its staff. They're not all foresters. We have engineers of various disciplines, hydrologists, biologists, landscape architects, and we even have one mining engineer, for goodness' sake, within the ministry.

MR. SKELLY: That's the problem.

HON. MR. WATERLAND: Today's modern forester, at least, is interested in much more than just timber management. The forester, if you ask him to define what a forester's role is, will say it's managing the whole forest, not just the trees. He manages wildlife, fish, water quality, and the whole forest system. I certainly hope the member will write a letter to the professional foresters' association and tell them that he didn't really mean that and that they do have a broad knowledge, because indeed they do. Their concerns are much more than just commercial forestry.

As far as the final comments on the energy situation are concerned, no, we don't have specific expertise in energy development, but we do relate and liaise with the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland), who has such staff. I don't think it would be in our best interests to try to duplicate their expertise as long as we can continue to communicate with them and have this dialogue with them.

Vote 108 approved.

Vote 109: field operations program, $24,016,881 approved.

On vote I 10: reservoir clearing program, $10.

MR. NICOLSON: While this shows as a $10 item, it's actually almost a $4 million item. There appears to be quite a change from salaries toward acquisition of land and buildings. I wonder why there's such a change in emphasis, and I would like to know how much money is being spent, which reservoirs are involved, and, particularly, whether anything is going to be spent in the Duncan reservoir.

HON. MR. WATERLAND: Mr. Chairman, I can't give the member a breakdown as to specifically where the moneys are being spent. We are continuing work, I understand, in the 1880 reservoir. That should be almost completed by now. We're continuing to clean up in.... Is it Kinbasket Lake — formerly McNaughton? What is happening here as you see this vote diminishing is that B.C. Hydro is taking on more of the direct responsibility and we are getting out of it. We provide supervision and we try to make sure that the timber values are recovered, but Hydro is moving more into that and the Forests ministry, as far as direct involvement in physical work, is backing out of it. But if the member wishes, I could acquire for him a more specific breakdown as to just what reservoirs the money will be spent in and to what extent.

MR. NICOLSON: I'd like to know the reservoirs, the amount in the various reservoirs, and I'd also like to have some explanation of why there's this tremendous change in emphasis in expenditure from.... It looks as if it's toward capital expenditure — $1.7 million for land and buildings — when it has traditionally just been a program for some sort of remedial work in clearing reservoirs.

HON. MR. WATERLAND: Mr. Chairman, I'll have to get answers to that specific question for the member. I'm afraid I don't have the information with me at this time.

Vote 110 approved.

Vote 111: implementation of new legislation, $3,161,974 — approved.

Vote 112: building occupancy charges, $3,156,000 — approved.

Vote 113: computer and consulting charges, $2,913,797 — approved.

HON. MR. GARDOM: I move that the committee rise, report resolution and ask leave to sit again.

Motion approved.

The House resumed; Mr. Davidson in the chair.

[ Page 2827 ]

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

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

Leave granted.

HON. MR. GARDOM: Adjourned debate on Bill 17.

FOREST AMENDMENT ACT, 1980

(continued)

MR. GABELMANN: In view of the fact that our critic in forestry has been denied the opportunity to speak on this particular bill, we will reserve our comments on the bill until committee stage.

HON. MR. WATERLAND: Mr. Speaker, it is a technical amendment. There is no common principle to the bill, and therefore it is probably difficult to discuss in second reading in any event. Perhaps the best way would be to discuss it in committee. I move second reading of the bill.

Motion approved.

Bill 17, Forest Amendment Act, 1980, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: I call second reading of the Credit Union Act. My colleague, Mr. Nielsen, is just coming into the chamber in one second. Is that okay?

Just before formally calling this, I have a point of order. With every respect I take some exception to the remarks that were made by the government Whip. There was no suggestion whatsoever of denying the hon. member for Shuswap-Revelstoke (Mr. King) the opportunity to speak, as he full well knows.

MR. KING: You did so.

HON. MR. GARDOM: No, that is not the case, my friend.

In any event, Mr. Speaker, I take great pleasure in calling second reading of Bill 12.

CREDIT UNION AMENDMENT ACT, 1980

HON. MR. NIELSEN: The Credit Union Amendment Act, 1980, continues on last year's amendments which will broaden the investment powers of credit unions and extend their branching services. It is a result of the great deal of consultation between the credit union movement and the Ministry of Consumer and Corporate Affairs. Market conditions in the credit union segment of our society are constantly changing and the legislative framework under which credit unions operate must change as well.

One of the advantages of our legislation is that it can be opened up from time to time for revision, unlike the Bank Act. In cooperation with the movement I will be asking the Legislature to consider the amendments affecting financial stability, financial accountability, statutory appeals to the Corporate and Financial Services Commission and a variety of other miscellaneous amendments. For members in the House, two major changes are proposed. First, credit unions will be required to adopt steps to reverse the decline in their reserve levels. Statutory reserve account will be introduced to replace the current retained earnings and the statutory level will be increased from 2.25 percent of most loans and investments to the pre-1975 level of 5 percent.

The decline in the reserve levels is not unique to credit unions but there is no reason for government not to act to ensure the continued viability of the credit union movement in our province. A great deal of discussion was held with representatives from the credit union movement with respect to those reserve levels. It was agreed that 5 percent should be achieved at some time.

Complementary to the increase in the reserve levels is our intention to increase the minimum level of reserves below which a credit union may be placed under the supervision of the Credit Union Reserve Board. No rate is specified in the legislation. It will be set by regulation after consultation with the reserve board and representatives of the credit union industry.

B.C. Central Credit Union will have to hold reserves against some of its loans and investments as well. Many of the proposed amendments are of a technical accounting nature. In general the purpose of the amendments is to introduce standards of auditing and accounting practices to credit unions throughout the province and to bring credit union financial statements more into line with those of companies. The independents of a credit union's auditor will also be enhanced by these changes. Members of credit unions will benefit from the amendment which requires annual reports to be available prior to general meetings in order that members can better acquaint themselves with the affairs of their credit union. The statements of subsidiary and associated corporations will, in most cases, have to be consolidated with those of the credit union. Both the reserve board and the superintendent will be given access to these additional statements for the first time. Further, since neither subsidiary nor associated corporations of a credit union are covered by the reserve board, an amendment is included which will prohibit these corporations from deposit-taking.

A third area of accountability relates to central credit unions. At present there is only a limited check on the activities of a central credit union. Officials of the ministry can inspect a central, but no remedial action can be initiated. With the agreement of B.C. Central, we are proposing to permit the superintendent to report to the members of a central any financially unsound practices of that credit union which he may discover. If the members of the central credit union do not take any action, the matter may be referred to the minister responsible; he will have the option of appointing an administrator if necessary. This is a major initiative. I commend B.C. Central Credit Union for their acceptance of this proposal.

The Credit Union Act provides, as does the Securities Act, the right of appeal of certain decisions of the superintendent and the reserve board to the Corporate and Financial Services Commission. These appeal provisions have been added ad hoc over the years. We have recognized this and have accordingly consolidated all of the appeal provisions in one section. This should result in a more precise, more rational appeal procedure which closely mirrors the procedures to be followed under the Securities Act.

The balance of the amendments are of a housekeeping

[ Page 2828 ]

nature. Of possible interest are amendments that will permit credit unions to introduce automated teller machines at sites other than their branch offices, opening the way for credit unions to pay municipal business taxes and licence fees. While credit unions have been paying property taxes for many years, they have been exempt from these other municipal assessments.

I note that these proposals are only part of an ongoing process which includes considerations of new and innovative means of building statutory reserves, adequacy of liquidity, methods of liquidity management and the possibility of a broader deposit insurance program for all B.C. financial institutions — all aimed at building and strengthening B.C.'s marketplace through the province's own credit union movement.

I would like to emphasize that a great deal of consultation has taken place over the last two years with representatives of the credit union movement in the province and, of course, representatives of B.C. Central Credit Union as well as CURB. We have had excellent rapport with representatives of that industry. The results are before us today by way of these amendments. This bill should go a long way to resolving some of the technical problems which have been identified. It will be complemented in the future when additional legislation will be placed before this House, responding to other problems which have been identified by the credit union representatives and our superintendent.

Mr. Speaker, with those comments I move second reading of this bill.

MR. LEVI: Mr. Speaker, it is not very often in the House that we have an opportunity to get into a somewhat broader discussion about financial institutions. We are able to do it under the present amendment in terms of the Credit Union Act. I think it is significant that we are able to do this, particularly in view of the fact that we appear, with the eighties, to be entering into what could very well be known as the decade of debt for most people, in view of the fact that the country as a whole has lacked a sound fiscal policy in respect to both its banking and its management of interest rates and, as a result of that, the kind of impact that it has on individuals.

The per capita debt in British Columbia is unfortunately no different than the per capita debt in the rest of the country. We are running just over $3,000 per person in British Columbia, in terms of capital debt. That's tough. That's the way it is. It's partly as a result of the financial institutions that we have and the lack of any clear policy in respect to fiscal management in the country.

We had some debate in this House, Mr. Speaker, coming from both sides of the House. We had remarks made by the government members in respect to the governor of the Bank of Canada, Mr. Bouey, in his refusal — I guess that's what it was — to go to the western ministers' conference. We had the Minister of Intergovernmental Relations (Hon. Mr. Gardom) tell us that they tried to get Mr. Bouey to come out and discuss the very serious problem of the then very high interest rates. They're going down, but I don't know whether we can lie back and think that they're not going to go back up again. In this country they are part of the dog that's being wagged by the tail down in the United States, and they are still in a very difficult position.

So under the Credit Union Amendment Act, 1980, I would have hoped that we might have heard from the minister some broader discussion regarding the whole question of fiscal matters, particularly in terms of the capital markets, because that is what the credit unions are part of. They're part of our fiscal management group in the province. I'd like to read their stated definition; this is from "Policies and Practices of the Credit Unions," in which they say:

"The primary objective of the credit union system is to provide financial services to its members on the best possible terms. In meeting this objective, credit unions are constantly under pressure to maximize efficiency and minimize cost. But because their members are owners of the organizations as well as borrowers and/or depositors, credit unions are not subject to the pressures to maximize profits."

That, of course, is something that has to be highlighted, has to be talked about in the light of the very serious problems that exist. They are problems. When we talk about the enormous assets that are held by four or five of the chartered banks, something in the order of $230 billion, it's interesting to note that $85 billion of those assets are invested overseas. It makes one think: what is wrong with the kind of investment that we need in Canada, in British Columbia?

In respect to the credit unions, the minister made mention of the need that they have to increase the percentage of reserves in terms of the credit unions. Ironically enough, before the House of Commons at the beginning of May, the Bank Act amendments were being looked at. As you know, every ten years the Bank Act is amended. It's now 13 years instead of 10 looking at the amendments to the Bank Act, and they're still trying to deal with amendments to the Bank Act. One of the amendments that is before the House of Commons, ironically enough, is to reduce the reserves of the chartered banks. Here in British Columbia we're going to increase them. That's not something that is going to create a problem for the credit unions. They have participated in the discussions on the bill. In Ottawa we have a move to reduce the reserves.

There is also a section in that Bank Act legislation which has a direct effect on credit unions. The Minister of National Revenue, when introducing the bill, said there was a need to create more competition in terms of the banking industry. So what they've done is get a section which encourages foreign banks into Canada to create the competition. Now we understand that the chartered banks are not worried about that, because they're not going after the same market that the foreign banks deal with, but they are going after the same market that the credit unions deal with. That has to be of some concern in terms of that kind of competition. Whether it's healthy competition remains to be seen.

Interestingly enough, over the past few years the number of credit unions as individual units has declined because there have been amalgamations or an increase in certain credit union operations. Some have gone out of business and the membership has been absorbed by others. So we have as of 1979 about 965,000 people who are credit union members. That's almost half of the population of British Columbia. They're dealing with assets of some $4.4 billion. Again, that's a significant part of the capital market of British Columbia.

We would have been in a much better position, I think, to debate this bill if we had a great deal more information about where the government is going in terms of capital market encouragement. We didn't want a lot of verbiage that we get from the members over there, but rather what kind of studies

[ Page 2829 ]

they've done and what can assist us in telling us what the health of the financial community is. I've tried several times — and I'll keep trying — to get from the government and particularly from the minister who is piloting this bill a chance to see the Schroeder report. The Schroeder report was commissioned, in part, to look at the whole business of the capital markets in British Columbia. It is a large, I understand, and a substantial study. Part of it dealt with the stock market. Let's leave that one aside and, as I suggested to the minister last year, let's release the part of the study that deals with the capital markets, because in 1977 when the study was first mooted by the former Minister of Consumer and Corporate Affairs, we had some interesting debate here about the usefulness of that. In fact, we were told by the former minister that that report was in the hands of his ministry in August 1978. It was a large body of material. I characterized it subsequently to that as something that perhaps they wanted to edit or censor, but nevertheless they had it. We had expectations, as a result of a further statement by the former minister, that it would be released once they had a chance to look at it.

By gosh, Mr. Speaker, he got shifted and we got a new minister and I wrote him a letter.

HON. MR. CHABOT: When?

MR. LEVI: When did I write him a letter? I wrote him a letter in October. He knows; he got the letter. He replied to me. I wrote him a letter because I had asked a question a year ago about the study, and I said: "Look, we always have a great discussion in this House about the investment climate and the need to encourage our people to invest in the province and in the country. As a matter of fact, nearly all of last year was taken up either in the House or in the community by various people boosting the whole business of BCRIC. Invest in BCRIC because it's part of the investment process of the province. That was okay.

But I think the logical thing after all that discussion and the issuing of the BCRIC shares would have been for us to receive a copy of the report. It was a substantial report. It cost $125,000. I understand they used some highly technical people, both from London and New York, to assist in the assembling and the analysis and the information. All of it would have been and still is extremely valuable in terms of looking at the whole question of capital markets in British Columbia. Unfortunately I received a reply from the minister saying that it is now not appropriate to release the report, because it is out of date.

AN HON. MEMBER: Thank you very much for your letter.

MR. LEVI: No, he said more than "Thank you, very much for your letter." He said: "Thank you for asking the question, but the report is now out of date." Now here we are in October 1979. The previous minister, a jolly kind of Falstaffian type, said: "As soon as we're through with it, we'll release it." Now he only got it in August 1978. All right, we'll give them nine months to take a look at it, because I understand it was 1,100 pages. That's a lot of work. As a matter of fact I think one of his deputy or associate deputy ministers at the time, Mr. Saddlemyer, was kind of piloting this 1,100-page report through the ministry to see what they could do with it. And then, unfortunately, we were told by the present minister that it's now out of date. That's very unfortunate. You know, $125,000 of taxpayers' money was spent on a report that would have told us a great deal of specific information about the whole capital market question in this province, but we don't have it. I gather that sometime down the road we're also going to be dealing with another aspect of the capital markets in this province — the stock exchange. I understand that report, the Schroeder report, dealt in part with the whole question of the stock exchange. Well, we might say to the minister now, if we're going to be dealing with those kinds of things, that what we badly need are the kind of support documents that would make the debate much more worthwhile. We do not have in this province a very specific document that is even five years old — never mind less than two years old — that gives us an analysis of the capital markets of this province.

There were a couple of other studies that were ordered, also dealing with the fiscal side of our province. Two reports were done by Brown, Farris and Jefferson, who were paid $60,000 to look at the equity market situation and some functions of the stock market. So we have $60,000 plus the $125,000 for the Schroeder report and here we are; we spent almost $190,000 on reports and we have yet to receive one of the reports in the House. Now one has to be skeptical, Mr. Speaker, about what really was in the reports. What is the reluctance of the government to release the reports? Surely if things are as buoyant as we hear from the Minister of Finance (Hon. Mr. Curtis) and from the Minister of Industry and Small Business Development (Hon. Mr. Phillips), then we should know what the studies reveal, but we haven't been able to get those reports. And it does not help us in terms of this particular bill, because part of the review involved the review of the credit unions. They are part of the capital market structure and, after all, they have assets of some $4 billion. So I would urge the minister, as I've urged him now for the past year, and I've urged his former colleague....

But with his former colleague I was prepared to be a little bit more patient, because he needed a little more time to take a look at it.

But I am very upset that the present minister tells us that....

Interjection.

MR. LEVI: Yes, I know. He still loves him, Mr. Speaker. I don't. but he does.

HON. MR. MAIR: I love you too.

MR. LEVI: Oh, bless you.

The important thing is that I would urge the minister to look at those reports and to release them to us. Because otherwise we get into the same category — the same kind of impasse that we got into in 1976, when we had a great debate in this House about the credit union-government joint report in respect to B.C. Savings and Trust.

The previous government was prepared to involve the credit unions in the financial business of the province, and so is the present government. The present government entered into discussions with the credit union movement late last year in respect to its $200 million mortgage program. They had discussions and they were to become and did become the agency through which the money would be paid out. That followed from earlier discussions in 1974 and 1975 where the

[ Page 2830 ]

previous government had discussions with the credit unions in terms of participating in a financial agency. Yet in 1976 we were not able to get the report which cost the taxpayers well over $100,000, which dealt with, as I understand it, all of the questions related to financial management and the idea of a joint partnership of the government and the credit unions in starting its own fiscal agency. But we didn't get that then. We haven't the reports now, and the taxpayer has paid out pretty close to $300,000 in reports dealing specifically with credit unions, with the stock market, with capital markets — all of those reports are sitting on the shelf. That, Mr. Speaker, is very much a tragedy. We should not waste the taxpayers' money in that way. We have seen no reflection, even if we try to understand what might have been in the reports, in terms of the government's approach to the whole question of capital markets and how'they might be encouraged.

The trouble is that we have to rely to a great extent on reading reports done by other governments, particularly Ontario, to get the kind of information we want. Amazingly enough, last November the federal government, when it entered into a review.... I think it was also intruding itself — I think we might well say that — into the whole operations of stock markets, and it wants to look at the possibility of a national agency for stock markets. It tabled reports in the House. I have them, and they run almost a foot high, but they have in them an enormous amount of up-to-date material on all aspects of the stock market and the fiscal management of the country. They did that. They had a draft act in there, and obviously a great debate is going to take place in this country on whether the federal government has a right to intrude itself into what is clearly a provincial matter, on the question of whether you can only get the kind of cooperation you need in that aspect of the financial area by having some kind of national coordinating body. But that's down the road a little bit.

Nevertheless, they've produced the backup document. They've spent a great deal of money, got the best people — three or four of them who wrote substantial papers were from British Columbia. They made their contribution and published them for all those people who were interested in looking it over. I go back to what I started to say before, Mr. Speaker, that those documents — those reports that the government has that it's not prepared to reveal — would be of inestimable value to us in understanding where we're going in terms of financial investment in this province. And we don't have any.

In respect to credit unions, when the last set of amendments came in in 1977, the Bank Act was at that time undergoing its ten-year review. There was some concern, I think, both by the credit unions and by the government. They said to the minister: "Is there going to be some impact, in terms of the amendments to the Bank Act, which would affect credit unions?" There was certainly some discussion about that then — that it would in some way impinge on what they want to do in British Columbia. Well, frankly, Mr. Speaker, neither myself nor the minister were optimistic that those amendments were going to go through anyway. They tried again in 1978, they skipped in 1979, they brought it back in 1980. Now they're before the federal House — in fact, before their finance committee — and there are some problems.

The problems in respect to credit unions have, I think, been well stated. It was said in the House of Commons, and I would like to quote from a statement in Hansard, which goes like this:

"I must agree with the comments made in the House last evening by members sitting on the Conservative benches that these foreign banks will not necessarily be operating in the best interests of Canada or Canadians...."

To digress, Mr. Speaker, you'll recall that one of the moves being made in the Bank Act is to allow the foreign banks to come in on a much broader front than they've been operating. I carry on with the quotation:

"The question whether these foreign banks will be offering services in small communities throughout Canada, and especially northern Canada, was posed. Will these foreign banks or their subsidiaries be offering services to the small entrepreneur in the Canadian context? Will they be providing financial services to everyday working Canadians? I suspect not. I suspect, as the hon. member indicated last evening, that there will be metropolitan banks perhaps skimming off the best deals in the resource and industrial sectors and they will do little for the new small Canadian banks becoming established in Canada today, such as the Bank of British Columbia. And of course, credit unions and caisses populaires are already under undue disadvantages compared with our chartered banks. "

That is what's happening down there. That's what's being admitted by the federal government. They're going to create what they think is a necessary part of operating our fiscal system in Canada, our banking system, to create more opportunity for competition — competition, if it goes the way it's being suggested, that is going to create some problems for our credit unions. That's not in the best interest of Canadians, as has been suggested in the House of Commons. It's interesting that the federal government's position in this, as articulated by the minister who introduced the bill, Mr. Pierre Bussieres, who was speaking for the Minister of Finance.... I guess Mr. Bussieres must be a minister without portfolio, but he's down as speaking for the Minister of Finance. He's all in favour of having this kind of wide open competition, and we have a rather interesting situation going on.

We have the federal government creating what they say is necessary competition in the banking industry, and we're dealing here with a near-bank that deals on the grassroots level with people. Here we have the federal government saying to the foreign banks: "Well, you come in here. You've got carte blanche. You can come right in." At the same time our own federal banks, our five major chartered banks, have got something like $85 billion invested outside the country. And we have debates in this House about what is in the best interest of Canada and British Columbia. Why is it that we're not always able — in fact we've almost never been able — to get the large majority of Canadians to invest in their own country? They always tend — particularly the banking industry — to move outside, to go look at fields much further away, creating greater advantages to the citizens of those countries and, of course, advantages in profits to the banking industry and to the shareholders. But what does that do in terms of corporate responsibility in respect to Canada? That doesn't do anything. Yet they've opened the gates wider, so we have to have some concern, Mr. Speaker, about what is taking place down in the federal House with the Bank Act, which directly impinges upon

[ Page 2831 ]

some of the concerns that we have about the operations of the credit unions. That's important.

All right, the credit unions were brought into some worthwhile significance in terms of their participation in social responsibility with the $200 million mortgage program. If you went to the chartered banks and said to them, "Would you be prepared to go along with the same operation?", I doubt that we would get that kind of cooperation, because they don't exhibit that kind of social responsibility that comes directly out of the movement that started the credit unions. I don't think that we would get that from the banking industry, but we certainly did get that kind of cooperation. Bear in mind that there was some sacrifice in terms of the credit unions' role in the $200 million mortgage program, because the cost of operating the program, which was set at 1.5 percent, was half a percent less than it actually cost them to do the job. But that's their contribution and social responsibility.

That's something that's not generally known, but it should be known. We have a near-banking system — or a banking system.... It's almost a banking system. If, I suppose, one aspect of the Bank Act passes which allows the credit unions to get into what's called the Canadian Payments Association, then they'll be able to behave like banks completely and make use of the clearing houses. That's the kind of operation and the kind of gesture — real social responsibility gestures — that we've got from the credit unions, but we sure don't have it from the banking industry. We don't have it from the banking industry at all.

This is not something that was not known. The former Premier of this province, W.A.C. Bennett, felt for years that it was crucial that this province have its own banking outlet. That's why he put so much energy into the development of the Bank of British Columbia. It was felt by the previous government that what was necessary, concomitant to the Bank of British Columbia, was what we sadly need. What we do not generally have in Canada, except through the credit unions, is a secondary mortgage outlet. We have not been able to develop that kind of thing in Canada. That was the basis of the B.C. Savings and Trust; that was what we would develop, along with the credit unions. We would have had an opportunity, had the government released the report for which it paid well over $100,000, to get a clearer understanding of what the possibilities would have been of developing a secondary mortgage market, which operates to a very complete degree in the United States. It is not only the major banks in the United States that do the financial management, but also the smaller banks, the savings and trust type of banks, which deliver services to people in terms of the kind of operation that they have.

It is kind of ironical, in respect to the United States, that for years those smaller banks, until the recent rise in interest rates, operated at a 12 percent ceiling. There was a ceiling on usurers' charges in terms of mortgages in the United States, down below in Washington, until it became obvious that once the rates had gone up to 19 percent the banks were simply going to sit there — even the small banks — and could not afford to give loans. In that respect, down there they took the lead.

We were interested and we should continue to be interested in the creation of that secondary mortgage market. We should not just be complete slaves to the chartered bank industry in this country. We don't see any great gestures by the branch banks in this province or the chartered banks. We haven't heard of any great gesture that they have made in terms of the province. We didn't hear them say one word about how they would assist in the present crisis — and the crisis is still with us — in respect to the increased mortgage rates. There were no gestures from the banks at all — not the branch banks here or in Ottawa. They said nothing except: "Make more money, make more profit; and be prepared to invest more money outside of Canada because the profits are even greater out there."

That is the kind of thing I would have hoped we might have had from the government in terms of the introduction of this bill. We don't often have an opportunity.... Except now we have a Minister of Finance (Hon. Mr. Curtis) who might just get into the business of discussing the broad fiscal system in the country. He has an interest in it. He has been so annoyed at Mr. Bouey that I am sure he must have sat down in the evening, read all his speeches and now he is very knowledgeable. When his estimates come up I hope that we can have a good go at this and get the government's opinion....

HON. MR. CHABOT: Norm — yak. yak, Yakl

MR. LEVI: You know. Mr. Speaker, I am boring the heck out of the Minister of Lands, Parks and Housing, who is the man in this who has the greatest responsibility in this province and does absolutely nothing. He spends a million dollars on housing for seniors and walks around with his chest poking out, mainly because he's constantly being kicked from the rear; I think that's part of the problem.

But we are looking forward to having an exchange with the Minister of Finance about his feelings on the problems that exist, not only in terms of what the government wants to get out of the federal government, but we want to go beyond that — we want to go much further; we want to know what kind of representations that government is going to make, or has made. I might ask the minister when he sums up, or winds up the debate — which shall probably be on next Wednesday or Thursday — if they have made any representations to the House of Commons committee in respect of the Bank Act as it affects the credit union movement. I'm not aware that the government has made any intervention at all with respect to the amendments to the Bank Act. It may be that they made them in 1977 and they haven't renewed them, but I'd like to hear from the minister about that, because I think it is important for us to know that the government is not only bringing in these housekeeping amendments that they refer to, but that they're also interested in what impact those amendments in Ottawa will have on the credit union movement. The credit union movement has just made a grand gesture to the people of this province, albeit there are not many people that are going to be that affected by the $200 million mortgage, but some people, no doubt, as a result of having to apply for that mortgage money, for the first time came in contact with the credit union movement, and I don't think all of them necessarily were members of the credit union movement.

The credit union movement in this province, as in all provinces — as a matter of fact the credit union movement all across Canada — is becoming the significant body to be reckoned with in terms of the financial community of Canada. What's more important is that the greatest impact that's being made outside of Quebec in terms of the credit union movement is being made in the west. That's where we have extremely high assets — apart from what goes on in the

[ Page 2832 ]

caisse populaire in Quebec — in the west, in Canada, and it looks like we're going to be pursuing the continuing pressure game with Ottawa. No doubt on Monday the first ministers will be discussing some aspects of the need to rearrange the financial community of this country to make it more equitable. And I would hope that we will hear from the government, because we don't hear very much from the government except the normal cliches about: "We have a great province and we're doing well." But nobody tells us the mechanism. They're sitting there with all the reports. We don't know. Every time we get up to ask a question we literally have to drag things out of them. That doesn't augur well for what's going to happen down the road. Have they got any real policy? Has the government formed a policy about how significant the role of the credit unions is? Have they got such an approach? We know that they utilized them for the $200 million mortgage, but that's not the position they took in 1975 when we brought in the B.C. Savings and Trust Corporation. They were not overly happy with that. They criticized it; but, I suppose to their credit, they voted for it. Not too many of them over there did vote for it. As I recall, the present Minister of Intergovernmental Relations (Hon. Mr. Gardom) voted against it.

AN HON. MEMBER: He was a Liberal.

MR. LEVI: It was the Liberals who voted against it; it was the free-enterprise Socreds, who are practically socialists, who voted for the Savings and Trust Corporation. Then what did they do? The minister looks surprised. You weren't in the House at the time, were you, Mr. Minister? My gosh, I'm awfully surprised. Let's see who voted for that in those days.

Interjections.

MR. LEVI: Now if we can have a little quiet I'll tell the members. Let me just inform you, Mr. Speaker, of the gallantry of that crew over there. There is the Minister of Health (Hon. Mr. Mair) throwing up his arms. You'll crawl under the desk when I finish reading the names.

First of all, let's talk about the people who did vote for it. Well, we've got Macdonald, Strachan, Hartley, D'Arcy, Lorimer, King.... That's the NDP side, we don't want that. Ah, Curtis — he voted for it. Wallace voted for it. Kelly, Steves, Barrett, Nimsick, Calder, Cummings, Williams, Robert A., Lea, Lauk, Skelly, Jordan — the Minister of Tourism (Hon. Mrs. Jordan), when she was much saner as a backbencher, voted for it. Phillips voted for it. Richter voted for it. Morrison voted for it. Dailly, Stupich, Brown, Dent, Cocke, Young and all the way down. Schroeder, McClelland, Chabot — you are here — voted for the B.C. Savings and Trust Corporation.

But let's just read off who were opposed to it, who were representing the banking interests, who were against the credit unions. Now we'll talk about all the friends of British Columbia who voted against it: Gibson — he's not here anymore; McGeer — he sits over there; Anderson — he's been transferred; Williams — he's over there; Gardom — he is there in all his glory.

The hour is late and I have a lot more to say and I would move adjournment of this debate until the next sitting of the House.

Motion approved.

HON. MR. GARDOM: Just very quickly, Mr. Speaker, on a point of order, this afternoon I was referring to the hon. member for North Island (Mr. Gabelmann), and I'm told that I called him the government Whip. It was indeed an error on my part, because he's the opposition Whip and he'll never, ever become a government Whip.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6:00 p.m.