[ Page 2833 ]

CONTENTS

Petition

Surfacing of Cowichan Bay Road. Mrs. Wallace –– 2833

Routine Proceedings

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

Mr. Levi –– 2833

Hon. Mr. Nielsen –– 2834

Division on second reading –– 2834

Social Service Tax Amendment Act, 1980 (Bill 3). Second reading.

Hon. Mr. Curtis –– 2834

Mr. Stupich –– 2835

Mr. Skelly –– 2836

Mr. Barber –– 2837

Mr. D'Arcy –– 2839

Hon. Mr. Curtis –– 2839

Division on second reading –– 2840

Crown Corporations Borrowing Authority Increase Act (Bill 9). Second reading,

Hon. Mr. Curtis –– 2840

Mr. Stupich –– 2841

Mr. Skelly –– 2842

Mrs. Wallace –– 2847

Special Committee on Privilege report on wiretap –– 2849

The House met at 10 a.m.

[Mr. Davidson in the chair.]

Prayers.

Reading and Receiving Petitions

CLERK OF THE HOUSE: Pursuant to standing order 73(6), I have to inform the House that the petitions presented on June 5 last, with leave of the House, by the hon. member for Alberni (Mr. Skelly) are irregular in the following respects: one, the petitions are not addressed to the Legislative Assembly of British Columbia; two, the petitions are without a prayer.

All of which is respectfully submitted,

I.M. Home, Clerk of the House.

Presenting Petitions

MRS. WALLACE: I ask leave to present a petition.

Leave granted.

MRS. WALLACE: This is a petition to the Legislative Assembly signed by some 300 residents of the Cowichan area.

"We the undersigned residents of Cowichan Bay hereby insist that the Cowichan Bay road be resurfaced with pavement immediately. We have put up with dust, broken windshields, broken springs and ruined tires on our vehicles for far longer than is necessary — all due to the conditions of this road."

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: I would call adjourned debate on second reading of Bill 12, the Credit Union Amendment Act, 1980, which was adjourned by that little fellow over there.

CREDIT UNION AMENDMENT ACT, 1980
(continued)

MR. LEVI: Mr. Speaker, I don't have very much more to say. I can see how well the government thinks about credit unions. They've only had the minister speak. I was hoping we might hear from that gallant member for Boundary-Similkameen (Hon. Mr. Hewitt). He used to work for them. Maybe he wants to give some input to the debate. Now he's up on his feet. Now we're in trouble.

The one point that I'd like to conclude on, Mr. Speaker, is in relation to a comment that was made by the Premier on January 8, when he issued the press release relating to the $200 million mortgage subsidy program. He said at that time — on page 5: "The money will be made available through credit unions, which have wide experience and facilities throughout the province to administer the program." As I indicated yesterday, that takes us back to the effort that was made by the previous government in respect to starting a Crown agency in respect to developing what would turn into a secondary mortgage market. There is an endorsation here by the Premier that that could be in fact a function that the credit unions play, because, as he says, they have experience and facilities throughout the province. Later on at some time when it's available, I would like to ask the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) — I won't do it now, but I'll do it when his estimates are up — whether he can tell us, because he's the minister responsible for the program, I gather, whether he had any discussions with the banking industry about doing this particular function, to find out whether the banking interest ever expressed any interest in helping in the same way that the credit unions did.

The minister has now got some notice on that question and he might want to tell us about it, because I indicated yesterday that I've not seen any demonstrated corporate responsibility towards the people of British Columbia in the times of a very difficult mortgage market, where the banks were prepared to offer anything to accommodate many of the people looking for mortgages that were reasonable, that they could afford. We've already said to the government that the program was a very practical and worthwhile beginning. We have argued that there should be a broader program in terms of the money. That's something that we have to know about. We know that the credit unions have made their contribution, basically because they operate quite differently from the banks. They're a grassroots movement. They are made up of people who participate in the affairs of their organization, which is in contradistinction to what goes on in what really can be called the monopoly monolith of the financial world, which is the banks. We have had no indication whatsoever from any of the banks in British Columbia, or across Canada, that they are prepared to do anything in respect to assisting in the mortgage markets. It is a very crucial part.

We have not been successful in Canada in developing that secondary mortgage market field, something that we need to do. That was the intent of the legislation on B.C. Savings and Trust, which that government, excluding the four Liberal members, voted for.

The important aspect of the credit union movement is that it needs to be encouraged both by the people — some 900,000 now are members — and what function the government can play in using the credit union in other ways besides just tunnelling the mortgage subsidy program. One might well ask whether the government is disposed — and we can ask the Minister of Finance this in his estimates — to putting some Crown money, on a daily basis — they handle some S300 million a month, or more.... As we understand it, there is a fairly long-standing commitment to using the Canadian Imperial Bank of Commerce. The minister indicates that we may be slipping away from that. Well, if we're slipping away from it, let's see whether we can slip some money into the credit unions.

I don't see anything in terms of deposits being made in the credit unions by the government. There was some $365,000 last year. That's quite a drop from what I think was in the last year, 1975-76, some $27 million. If there's an opportunity for us to give some direct benefit to the credit union movement in terms of major deposits by the government, then that should be done. I would hope at the time of the estimates of the Minister of Finance to ask him whether the government has developed a policy about using them as a

[ Page 2834 ]

conduit for getting their money into the community or for whatever bills they have to pay and that kind of thing. I know some of this takes place on a bid basis, but has the government talked to the credit unions about that?

In closing, we will presumably have some more discussion, perhaps not on such a broad basis because of the technical nature of the amendments.

AN HON. MEMBER: You are supporting the bill?

MR. LEVI: Yes, obviously we are supporting it.

These are technical amendments. I said yesterday when I started my speech that I would have hoped that some of the members might have taken the opportunity to get into the debate on the whole question of the capital market system in this province and some of the shortcomings because of the failure of the government to release well over $400,000 worth of reports that have been done but never made available to the public. It is a topic that is constantly on everybody's mind. Strangely enough, we don't have anybody other than the minister from that side saying anything at all, would be worthwhile hearing from the Minister of Lands, Parks and Housing, who always has so much to say when he is sitting down but so little to say when he is getting up. That's a very difficult situation.

We intend to support the bill. We are dealing here with technical matters.

HON. MR. HEWITT: Mr. Speaker, I ask leave to make an introduction.

Leave granted.

HON. MR. HEWITT: Mr. Speaker, in the gallery are two very old friends of mine who are community workers in the city of Penticton. They spend a lot of their time and effort making Penticton the great city it is. I am talking about Norm and Kay Affleck. I would like the House to bid them welcome.

HON. MR. NIELSEN: Mr. Speaker, I appreciate the comments made by the member for Maillardville-Coquitlam (Mr. Levi). I appreciate, as well, that much of the discussion from his side has been broad-ranging and does involve many other aspects of government, many other ministries and probably many other statutes.

I would like to emphasize, as has been recognized, that the bill under consideration today is primarily a technical amending bill. The primary purpose of the bill is to assist the credit unions in functioning somewhat more efficiently and the members of credit unions in benefiting somewhat more from their association with credit unions.

The cooperation of the credit union movement in British Columbia and the government of B.C. is very, very sound. We've had a tremendous amount of cooperation and a great deal of consultation with the credit union movement in the province. Peter Podovinikoff has been of great assistance to us, as has our superintendent responsible. We've had excellent rapport in drafting this legislation over the last year and a half, and as I said yesterday, we anticipate that there'll be further refinements offered for consideration of this assembly in the future.

So many other questions will probably come back during consideration of estimates and perhaps may be more appropriately responded to at that time. One particular point the member raised yesterday was the amendments to the Bank Act. It seems to be a long-standing program of the federal government to come through with certain amendments, but we have no confidence as to when that ever may occur. We recognize that there could be certain situations in conflict, but we're prepared to move first from our point of view and give consideration to that, should the federal government get its act together and make their long-promised amendments to their Bank Act.

With those comments, Mr. Speaker, and considering the degree of discussion we will be able to involve during third reading, I would move that the bill now be read a second time.

Motion approved unanimously on a division.

Bill 12, Credit Union Amendment Act, 1980, read a second time and referred to a Committee of the Whole House for consideration at the next sitting after today.

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

DEPUTY SPEAKER: We're back to the Minister of Finance, who adjourned debate on the Social Service Tax Amendment Act, 1980.

SOCIAL SERVICE TAX
AMENDMENT ACT, 1980
(continued)

HON. MR. CURTIS: Now, Mr. Speaker?

DEPUTY SPEAKER: Now.

HON. MR. CURTIS: Mr. Speaker, Bill 3, introduced in this House on budget day, deals with changes to the Social Service Tax Act. The proposed amendments to the Social Service Tax Act serve three purposes: they contribute to achieving greater energy security; they provide tax reductions for all households in the province; and they provide for greater equity in the administration of the act.

Mr. Speaker, in February of this year my colleague, the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland), presented an energy statement that set out a comprehensive policy framework. As the House will recall, the major themes of that statement included conservation efforts, building upon our energy strength and enhancing research and development efforts. In the budget speech in March 1 proposed a number of specific actions to give concrete effect to these broad policy directions. A number of these are to be achieved through amendments of the Social Service Tax Act.

That February energy statement drew attention to the fact that although British Columbia is energy rich, for which we are all very thankful, Mr. Speaker, we remain dependent upon imported oil. Therefore particular attention has to be given to encouraging oil conservation. Fifty-six percent of oil consumed in British Columbia is for the purposes of transportation; of that total over 50 percent is used by the private automobile. Therefore it follows that if conservation policies are to be effective, some action must be taken to encourage more efficient use of fuels in private transporta-

[ Page 2835 ]

tion. The proposed amendment to the Social Service Tax Act will provide an incentive to purchasers of new automobiles to give greater consideration to the fuel-efficient car.

It is proposed that new cars be categorized according to their fuel efficiency as rated by Transport Canada. As the House will know, the rate of tax on the purchase of new automobiles with a high fuel efficiency rating is reduced to 2 percent. For new automobiles with poor fuel efficiency, the rate of tax is to be increased to 6 percent. On all other new cars the tax rate remains at the 4 percent rate which existed previously. This incentive, we believe, will encourage the trend toward gradual replacement of cars which achieve poor gas mileage with vehicles designed for what is now clearly recognized as an era in which oil and gas are scarce. The variable rates of tax will apply to new passenger cars only. Four-wheel drive jeeps, trucks, vans, light vans and recreation vehicles are continuing to be taxed at the standard rate of tax.

Further encouragement to energy conservation and the use of relatively more abundant fuel is the purpose of proposed exemptions to the Social Service Tax Act. These will be introduced by regulation. Storm windows, storm doors, multi-glazed windows and thermal insulation material are, we believe, sensible investments for families wishing to reduce their home heating costs. To help make these more affordable, these items are to be completely exempt from the social service tax. A number of other items not yet widely used but which also offer the prospect of substantial energy conservation are to be exempted. These include heat pumps used in heating and cooling systems in buildings, heat recovery units or devices, time-controlled thermostats for heating systems and automatic timer controls for electric lighting systems.

Finally, to encourage the use of more abundant and renewable fuels, the following items are to be exempt from the social services tax: wood and coal-burning stoves and furnaces, wind-powered generating equipment, propane converter kits for motor vehicles, and specific equipment for solar heating systems.

Although the costs imposed by higher energy prices can be reduced by more active conservation efforts, each and every family in this province has had to face an increased fuel bill. Therefore it is appropriate that some action be taken through the taxation system to cushion the input of higher energy costs. So you have before you the proposal that natural gas and electricity purchased for home use be exempted from the social services tax. Parallel relief has been provided to users of home heating fuel through repeal of the Fuel-oil Tax Act. Two other proposed exemptions will bring important relief to particular groups in our province while providing some tax savings for all of our citizens.

First, we have proposed the exemption, subject to the approval of this House, of patent medicines. A full list of such medicines will be provided by regulation, but it will include pain relievers, ointments, cough syrups and cold remedies. The House will know that prescription medicines are already exempt from the social services tax. Since many people rely on patent medicines to meet their health needs, it is appropriate that the exemption be widened to cover those non-prescription medicines.

Secondly, it is proposed to exempt the monthly telephone rental charge from the social services tax. Since many people are dependent on the telephone — it was at one time considered to be a luxury or an option, but that is no longer the case, especially for the elderly; we know of their dependency on the telephone, and that of those living in remote areas — it is clearly appropriate to make this exemption. I would like to point out that British Columbia is the first province to propose such an exemption in Canada. Moreover, long-distance calls are already exempt in the province, although taxed in most other provinces.

In addition to energy-conscious changes to the taxation of new cars and substantial new tax exemptions, the act also proposes three changes to bring greater equity in the administration of the social services tax. First, all used mobile homes will be exempted from tax. Without this change, used mobile homes would continue to be taxable if purchased from a dealer but, strangely, exempt if purchased on a mobile-home site. That seems silly. That inequity should be removed and it is being done through this measure. Secondly, the Social Service Tax Amendment Act, 1980, provides for no right of appeal against a penalty imposed for non-collection of tax. This, I suggest, is a move which is important and long overdue. The right of appeal to the minister, which has been the case, is therefore going to be altered. Thirdly, an amendment is proposed that will give unpaid wages priority over unremitted tax collections in the case of a business going into bankruptcy or receivership. The last two amendments — those I've just dealt with — are retroactive to midnight, April 10, 1978. All other proposed changes are effective midnight, March 11, 1980. The revenue loss associated with these changes is expected to be $25.8 million in the 1980-81 fiscal year.

Finally, I think it is important to remind the members in this House and the people of British Columbia that the 4 percent social services tax rate is the lowest sales tax rate applied by any province in Canada that levies such a tax. The sound financial management of this government and the strong economic performance of our people and the province as a unit have combined to produce the revenue strength required to maintain this low rate of taxation.

These items were dealt with at length in the presentation of the budget and in the budget debate which followed. I welcome the comments from members today but obviously this particular bill flows from that budget presentation. I move second reading.

MR. STUPICH: Certainly, any relief from this particular tax — which, we have argued, is a regressive form of taxation — is welcome, and the opposition will support it. We would like to make a few comments, perhaps even ask a few questions. I am sure other colleagues of mine will have something to say on the bill as well. It would seem that every time the Minister of Finance introduces a bill, it requires almost seriatim discussion rather than general principles. However, I think there is not too much problem with this particular bill before us now.

Hardly a week goes by but I get letters asking for further exemptions from sales tax. I'm sure the minister gets many more than I do.

So the list is endless as to the number of items that might not be taxed under this legislation: each year the Minister of Finance brings in new ones to add to the list, and we welcome them. Perhaps rather than talk about the items that might not be taxed — that would be more appropriate under the ministers salary vote — in this legislation we might consider whether the $25.8 million is being spent to the best effect.

With respect to the varying rates of taxation on automobiles. I seriously question whether this is going to have

[ Page 2836 ]

any real influence on anybody going to a car dealer to buy an automobile — to ask in what category of sales tax that particular auto falls. The automobile dealers themselves, or at least the manufacturers, in trying to increase their sales of particular types of automobiles, I'm sure after a great deal of research, came to the conclusion that the best way of influencing people to buy a certain automobile was to offer them a cash discount rather than to say they weren't going to charge quite as much — to drop the price. They determined that the idea of getting some cash returned to one was the best way of influencing people in their buying habits.

I would have thought that had the minister, perhaps on the basis of that study that was done, offered cash discounts to people who buy certain types of vehicles, it would have been more effective than simply saying that there will be varying rates of tax imposed. However, that's my opinion. The minister is not going to change the legislation because I offer that opinion. But I would like to have some review of this done, if it's possible to do it, so that we might ask the minister a year from now whether there was any evidence at all of any positive results from this particular change. It would be interesting for everybody, I think.

[Mr. Strachan in the chair.]

The exemptions that he mentioned from the point of view of energy conservation.... I noticed he said they were for families. I wonder whether he might tell us whether these exemptions for heat-saving devices and energy-saving devices of all kinds and even the telephone tax exemptions are limited to families or whether they will apply to commercial and industrial use as well. I would suggest that they should. If the objective of these exemptions is to increase the emphasis on energy conservation, then certainly the opportunities for energy conservation in commercial enterprises and even industrial enterprises are much larger than in single residences. So I would think that there'd be some advantage in having these exemptions, since they are designed not to reduce revenue but rather to change people's habits. I think the exemption should apply to commercial and industrial enterprises as well.

The relief from double, triple or quadruple taxation on used mobile homes is certainly welcome by anyone buying these, and I compliment the minister on that step. Mr. Speaker, the opposition will be supporting the legislation.

MR. SKELLY: Mr. Speaker, I also rise to congratulate the minister on presenting the bill in the direction that he's taking in using fiscal means to encourage energy conversation in the province of British Columbia. I'm not sure what the effect will be of the application of sales tax on cars of varying energy efficiencies, but I guess, as the member for Nanaimo says, we'll have to wait and see how that performs in the coming years. Hopefully, the minister will table some kind of performance statement as the years go on to show us what effect this taxation measure has had on saving oil in the transportation sector.

As the minister will recall, a few years ago I asked the previous Minister of Finance to provide sales tax relief for a number of items that would be used in homes for energy conservation, such as insulation, thermal windows, heat pumps and that type of thing. The minister said it would be impossible at that time, because if we provided relief for one thing, we'd have to provide relief for everything, which sounded like a good idea to me. So he did nothing. I'm, pleased to see that this minister has taken a better view of the situation, but perhaps the energy situation in British Columbia has become a little more critical since that time.

I would appreciate it, though, in cases like this where we're going to be providing tax relief on a series of items that have been designed to save energy or to use alternative forms of energy, if the minister would table a complete schedule of what he has plans for removing the sales tax from, rather than leave it up to regulations. It would give usa better idea of which direction the minister is going.

One of the problems is that although we're dealing with sales tax here, there's no comprehensive policy with respect to tax on energy commodities and energy-saving devices. For example, when we look at natural gas and oil, we see that their drilling is subsidized by some fairly generous income tax concessions. There are also, for the producers, some fairly generous depletion allowances and favourable income tax concessions as well as price subsidies set up by national and provincial policy.

When we look at Hydro, we see that it is essentially subsidized by allowing it to become a monopoly with the right to set its own policies and to price its energy commodity in virtually any way it chooses. Also, the government's guarantee of B.C. Hydro's debt means that it can operate at a lower interest rate level than a private corporation in the same industry.

So there are these various subsidies that go to other forms of energy — other than energy conservation. The balance is swung unfairly in favour of the consumption of oil, hydroelectricity and natural gas, when we should be swinging the balance a little more competitively towards energy conservation and energy alternatives. Nuclear power in Canada, it so happens, is one of the most subsidized of all energy resources. The research is subsidized by the taxpayers' money through the federal and provincial governments, the industry is subsidized, and marketing is subsidized by a Canadian federal agency. Almost every step of the way, fiscally and through federal government policy, the nuclear industry is being subsidized. I think that while it's helpful to relieve energy conservation and energy-efficient devices from sales tax at the retail end, what we should be looking at is a comprehensive way of making energy efficiency, energy conservation and energy alternatives more competitive in terms of the subsidies they receive and in terms of the subsidies that other forms of energy receive.

I'd like to give the minister some suggestions, which, of course, he can't bring in under a sales tax act; but there are other statutes which come under the jurisdiction of this minister. Some of these concessions to energy conservation and energy alternatives should be exercised through these fiscal and regulatory means.

For example, the building codes in the province of British Columbia have to be changed to encourage people to build more energy-efficient housing and to encourage industry and commercial buildings to be more energy efficient. I understand that the Minister of Labour (Hon. Mr. Heinrich) is presently looking into that in conjunction with a number of other ministries. If I were the Minister of Finance I would impress on the Minister of Labour and that interministerial committee the urgency of developing a code that would make buildings and residences in B.C. more energy efficient and of implementing that code as soon as possible.

Also, there should be a retrofit requirement similar to the

[ Page 2837 ]

one that they have now in Portland, Oregon. It's strange that in Portland, Oregon, they're encouraging energy conservation because of the high price of our gas — in part because of the high price of oil, but mainly because of the high price of our gas. They're paying something like $5.26 per 1,000 cubic feet for it down there, while we're really subsidizing B.C. Hydro at about $1.17 per 1,000 cubic feet. So Portland is requiring that within five years residences be retrofitted to a certain energy efficiency standard or the owners will not be able to sell them. It sounds like a pretty harsh measure; but when you consider the harsh energy measures that people in Portland are going to have to face in the future, having to retrofit their homes to energy efficiency standards is not all that hard compared to what they'll be paying for our natural gas and for oil and electricity from nuclear power plants.

I would like the minister to take a look at the idea of providing interest-free loans, especially to senior citizens or to low-income families. It doesn't really help if you reduce the sales tax on a heat pump....

HON. MR. GARDOM: What's your cost impact there?

MR. SKELLY: Well, this is something I'm asking him to look into. He has the staff and the capability of working out the cost impact of that. I would suggest to you, Mr. Minister of Intergovernmental Relations, that the cost impact would be nowhere near the cost of the Cheekye-Dunsmuir power line, which will probably overrun its budget by the time it's completed by an amount greater than the Columbia River Treaty program overran its budget.

HON. MR. GARDOM: Do you want to abandon that?

MR. SKELLY: The Cheekye-Dunsmuir project? Yes.

MR. KEMPF: Let there be darkness on the Island.

MR. SKELLY: As there is darkness from Omineca.

DEPUTY SPEAKER: Order! This is no time for levity.

MR. SKELLY: I am asking the minister — because this is, in part, within his jurisdiction — to examine interest-free loans to senior citizens and low-income families, because even though we've reduced the sales tax on some of these energy-efficiency commodities and alternate energy equipment, it's pretty difficult for somebody on a fairly low income or a pension to buy a heat pump at the cost of $1,000 to $2,000.

The fact that you have taken off the 4 percent sales tax is not going to be all that helpful to those people. I would like you to look into the possibility of making interest-free loans available to them. Even though you are losing money on interest, you are gaining money because you are saving energy, which is spiralling in cost; you are gaining money over the long term.

I would also encourage the government to embark on a program of free energy audits. They are doing this now in the city of Seattle. Seattle City Light, the utility down there, is doing audits free or at a nominal price for homes in the Seattle area. The same thing is taking place in Portland, Oregon.

I would also like the minister to look at an abatement of assessment on homes that install solar equipment, which represents a fair capital investment that is assessed and taxed by the government. In some states of the United States anyone who installs solar panels and solar equipment on his home receives a five-year tax abatement on the increased assessment that results.

I would like the minister to look at all those other fiscal measures which could be used to assist people who wish to save energy and to make energy conservation competitive with using the existing resources such as hydroelectricity, oil and natural gas. In closing, I'd like to congratulate the minister for this first step towards using fiscal means to encourage energy conservation. I would hope to see more of this in the future.

MR. BARBER: Mr. Speaker, I will be supporting the bill, and I am pleased to. I do so chiefly because it introduces an important new principle, which, as my colleague from Alberni just stated, is some means whereby the government of British Columbia encourages, in an active, forthright and perfectly direct way, people to use some common sense about energy conservation. One of the ways in which people are rewarded for using common sense, of course, is in the pocketbook. That's a good thing. In our system and our society, and given the values by which we live, apparently that is often one of the only ways that you can encourage common sense. But whatever the motivation may be on the part of the individuals who apply such intelligence, I nonetheless congratulate the government for recognizing a very practical way to get the ball rolling. I am pleased to support the bill and to credit the minister who has introduced it this morning for its authorship.

I would like as well, if I may, to congratulate the first member of this Legislature to ever propose such a technique and such a strategy. That is of course the member for Alberni, who just spoke. The member for Alberni, as every member of this Legislature knows, is continually presenting innovative and imaginative ideas...

HON. MR. GARDOM: Division.

MR. BARBER: You know it's true.

...to this Legislature in order to recognize the individual and the corporate responsibility we have as persons and as citizens to conserve energy and to use that energy we do have in a very wise and prudent way. So I would also like to congratulate the member for Alberni, who was the first member of this Legislature to propose this particular strategy of encouraging the use of energy-saving and energy-conserving devices by reducing the sales tax and other measures. The member for Alberni, I think, is developing a well-earned reputation in the province of British Columbia for being consistently one of the first elected persons at the provincial level to put forward such proposals in a tough-minded and highly articulate way. So both the member for Saanich and the Islands and the member for Alberni deserve credit for this legislation this morning. That is among the reasons why we will support it.

I want to add as well, though, if I may, one caveat to section 1. It is, I think, a good principle that persons who continue to purchase private automobiles are encouraged to purchase automobiles that are energy-efficient. It is a good idea it is a necessary idea; it is something we welcome. But there is a fundamental flaw in the argument that any of us would put forward, that the way to reduce energy consumption uniquely and solely lies in the field of encouraging more

[ Page 2838 ]

energy-efficient automobiles. Another way, of course, is to encourage alternatives to the automobiles altogether. One way is to recognize that the automobile is inherently wasteful.

Although this is a good principle within the framework of the use of the modern automobile and the internal combustion engine, nonetheless there is a broader framework that I would ask the minister to consider. That framework, of course, is to encourage, again through the device of the sales tax — an admirable principle enunciated here — much, much more popular use of alternatives to the private automobile. The minister knows exactly what I am going to say.

HON. MR. CURTIS: Hot-air balloons.

MR. BARBER: Balloons, dirigibles of any order — no. Of course I am referring to bicycles, one of the principal modes of transportation in Europe. In the highly urban centres of the western world the bicycle is treated in a perfectly respectful and serious way as one of the fundamental....

HON. MR. CURTIS: Would Barbara come over the Malahat on a bicycle?

MR. BARBER: If we could convert the CN to a bicycle trail, she just might. It would be a marvellous thing.

HON. MR. CURTIS: Barbara shakes her head.

MRS. WALLACE: I think I'll sail in my sailboat..

MR. BARBER: The Minister of Finance knows that I am talking about urban communities. I am not talking about interurban transportation. I am talking, though, about one means. Drawing from the European experience, where in the great urban centres bicycles are encouraged in every possible way, including, I expect — although I don't know for a fact — by the national authorities, who reduced or eliminated the sales tax as one of the principal alternatives to the automobile.... So I want the House to understand, Mr. Speaker, that I support this new principle in section 1; it's a good thing. But I wonder if it's possible that we might think just a bit more originally about not simply encouraging the use of more energy-efficient internal combustion engines, but also encouraging in a dramatic and bold way alternatives to the private automobile where they are appropriate. Of course I'm speaking of cities; of course I'm speaking of the bicycle.

Let me illustrate in a very practical way. In Victoria, according to the city police, there are far more bicycles than automobiles. Typically, bicycles exist at the rate of about 1.7 per household, apparently, in the greater Victoria area. The Minister of Finance will know that I was once active as the finance chairman for the Greater Victoria Regional Bikeway Committee. We discovered that about 100,000 bicycles exist in greater Victoria, and if bikeways were built and bicycles themselves were given preferential tax status, it might be possible to encourage the greater use of them. Now again, I'm not talking about interurban use or commuting from Omineca or Atlin to the capital. It's not very practical. But it certainly is practical and inevitable....

Interjection.

MR. BARBER: We'll be in your riding in a week, as, a matter of fact. I'll bring you a bicycle to ride on.

What we have is an opportunity, through this and other legislation which I hope the minister will consider introducing or amending, to recognize that within the urban communities, it's not simply good enough to encourage the use of less wasteful internal combustion engines. The point is that they are inherently wasteful. The internal combustion- engine is one of the most inherently inefficient engine systems that the western world ordinarily uses. It's tremendously inefficient no matter what you do. I wonder if the minister might consider extending this principle. I call on him specifically to consider, if not at this session then at one in the near future, an amendment to the sales tax which would eliminate altogether the sales tax on bicycles, mopeds and motorbikes.

These three are inherently efficient. They are inherently appropriate in the urban communities of British Columbia. They are safe and, indeed, the bicycle itself is a tremendous encouragement to good public health. It is a tremendous encouragement to people to get out of the automobile and away from arteriosclerosis, early heart attacks and all the other fads of North American living when we rely on the private automobile, and instead get out pumping the heart and pumping the legs and doing something safe, efficient and healthy.

Of course, we need bikeways to physically separate bicycle and automobile traffic. That's necessary. A recent University of Calgary study demonstrates just that in a very direct and practical way.

Nonetheless, in the great urban communities of North America the bicycle increasingly will be seen as a safe, healthful and tremendously energy-efficient means of transporting great numbers of people. Now this is important. It's important to recognize that principle, and I'm sure the minister does, at least philosophically. I expect most people do, at least philosophically. But there is a practical enunciation of it that could be found in this legislation and, regrettably, is not. Maybe next year it will be.

I would urge the minister to consider altogether the abandonment of social services tax on bicycles, mopeds and motorbikes. If, however, the minister is not prepared to go quite that far, I wonder if he might consider a fourth proposal. It is a very simple realignment of that suggestion which would have the abandonment altogether of the sales tax on Canadian-manufactured bicycles.

The minister may well have an argument saying that because of the tremendous influx of Japanese, Korean and Taiwanese bicycles and because of the fact that the Canadian bicycle manufacturing industry, especially in the hands of CCM, which, unfortunately is not a terribly well-managed company — or so it appears by their sales figures.... It might, therefore, be appropriate to give a special dispensation to the Canadian bicycle manufacturing industry which every year turns out, I understand, something like a quarter of a million bicycles. Now that's a good thing, and that should be encouraged.

If the minister isn't prepared to go all the way with a sales tax removal for bicycles, at least go sufficiently far that we simultaneously encourage the bicycle and Canadian industry by abandoning the sales tax entirely on bicycles which are manufactured in Canada. At the very least that serves two important purposes. It substantiates and reinforces Canadian industry — and that's always a good thing — and it substantiates and reinforces the current public attitude, especially

[ Page 2839 ]

among young people, which increasingly is turning to the bicycle as a serious, necessary, and indeed inevitable broadbased means of popular transport of many people in the urban communities of Canada.

I think these are important principles. Because of the comparative reduced cost of the bicycle as opposed to a modern Ford or Chevrolet product, they would, in fact, be far less of a drain on the public purse than the current tax before us.

AN HON. MEMBER: There are too many car dealers over there.

MR. BARBER: Conflict of interest, yes.

I think the cost of such a fiscal measure would be tremendously less than the cost of this fiscal measure today. But the social benefit would, I think, be at least as great, and perhaps in the long run greater, when you realize the inevitable obsolescence of the private automobile in the great urban communities of North America.

I support the bill. I congratulate its authors, the member for Saanich and the Islands and the member for Alberni (Mr. Skelly). I congratulate the government for putting it forward in this form, and I ask the government to consider, just for a moment, reducing altogether the sales tax on bicycles — with, perhaps, a preferential tax reduction for Canadian bicycles only — on mopeds and on motorbikes. This would, I think, be welcomed by many people in British Columbia. It would cost the taxpayer relatively little, and it could lead to social benefits in the energy field and in the health field as well.

For all those reasons I commend these ideas to the government.

MR. SKELLY: With leave of the House I would like to make an introduction.

Leave granted.

MR. SKELLY: We have in the gallery today, wondering what is going on, His Worship Mayor Jim Robertson, Alderman George McKnight of the city of Port Alberni, city manager Mr. Jim Sawyer and the planner, Mr. W.J. Blaikie of W.J. Blaikie and Associates. I ask the House to make them welcome.

MR. D'ARCY: It seems to be my draw to enter into the debate as soon as the minister has left the chamber. However, I have a couple of points to make. I don't want to again cover the ground covered so capably by my friend from Victoria. However, I wish to emphasize the point that while Victoria is an admirable place to commute and do other business on a bicycle — as the member knows, that is how I get around in Victoria — the fact is in most areas of the province....

Interjection.

MR. D'ARCY: Right. You can do very well going downhill in Trail on some of our 10 percent grades, but it's somewhat difficult getting uphill.

The point I want to emphasize is that it is inconsistent to reduce or eliminate the tax on four-wheeled rubber-tired power vehicles and not do it for motorcycles and motorbikes. These are a far more practical way of getting around in my riding than a bicycle is.

I want to particularly point it out for the industrial worker, whom we perhaps forget about in these kinds of discussions. In my area industrial land is at a premium. Both of the two major industrial plants, Cominco Ltd. in Trail and CanCel Castlegar have parking lot problems, not because the companies are too cheap to provide for adequate parking, but there just isn't the space. You run into a mountain, into a river. or into a deep gorge. Both companies have been encouraging those employees who choose to to commute to work either by bus or, perhaps more importantly nowadays, on motorcycles. Many employees are doing just that. They may use the motorcycles in certain weather and certain conditions and bicycles at other times. It has resolved the parking problem to some degree for employees and resolved the parking problem in terms of the use of land and the constraints it puts on expansion and development of those companies. Clearly it is a very poor use of land, as the member for Victoria has stated on many occasions, to have vast acreages devoted to parking lots when there are other ways of transportation. The car just sits there for eight hours.

I want to make another point. Perhaps, Mr. Speaker, you may call me to order and ask that this be brought up under section 2. I am going be very quick, though. Subsection (z) — perhaps the minister will read the Blues and pick this up — deals with telephone services qualifying for a residential rate. A factor that was overlooked — quite honestly so — in drawing this up was the taxation on the service which the resident of an apartment building has when his door is buzzed. The fact is that apartment residences are continuing to be taxed because it is the interpretation of the senior administrators in the Ministry of Finance that the subsection (z) only applies to the monthly rental and not on the telephone itself to the fee charged by the telephone company in the door opening devices. It is a small amount of money and tax, but it is that kind of annoying thing which is totally inconsistent with what I believe to be the meaning of the act, which is an act that we all support. I hope that the minister will take it into consideration that either by an amendment or by regulation that minor inconsistency could be taken out. It is clear that apartment owners should not have to pay a fee which homeowners and other individuals do not have to pay.

DEPUTY SPEAKER: The minister closes the debate.

HON. MR. CURTIS: I was called out on a matter which required immediate attention and I apologize. I was able to keep one ear tuned to the closing remarks — my right ear.

I think a Minister of Finance finds it difficult to respond to suggestions which are made regarding future tax changes, for reasons which are historic in the British parliamentary system.

We have, and I hope all members will take advantage of this opportunity, established a "tax suggestion file,'' for lack of a better term. Suggestions which came in immediately after the presentation of the budget and other suggestions which have come in since, and which I know will continue to come in, will all be given very careful consideration prior to the preparation of the next budget for the 1981-82 fiscal year.

Some of the suggestions are clearly not practical, and as an example I would respond to one which was made in this brief debate today, with respect to the removal of sales tax on Canadian-made bicycles only. Well, nothing is impossible, but the members will know that that would be considered

[ Page 2840 ]

discretionary and would contravene the GATT international agreements which are in place. So that's the kind of problem which we face when reviewing these suggestions.

MR. LEA: Did you sign GATT?

HON. MR. CURTIS: I did not sign GATT. Did you sign the Waffle?

MR. LEA: Yes, I did — the Waffle Manifesto.

HON. MR. CURTIS: I see. Okay. In any event, Mr. Speaker, seriously....

Interjections.

HON. MR. CURTIS: Mr. Speaker, a number of people seem to be closing this debate. The suggestions which have come in and which will come in through the balance of this fiscal year will be pulled together in, I would think, the last part of the calendar year, in late October or November, and will be given very serious consideration by members of this ministry, senior staff and by myself. Some of them, I would hope, will be brought in as part of the budget and accompanying legislation in 1981. I thank the members for their suggestions and I invite all members of the House, as new thoughts occur to them, to please provide me with their suggestions and recommendations. They will be given serious and very careful consideration at the appropriate time.

I thank the members for their support of the measures which have been introduced in the budget and in this particular bill, and I now move second reading.

Motion approved unanimously on a division.

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

[Mr. Davidson in the chair.]

HON. MR. CURTIS: Mr. Speaker, I move Bill 3 be referred to a Committee of the Whole House for consideration at the next sitting after today.

Motion approved unanimously on a division.

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

HON. MR. GARDOM: I call second reading of Bill 9, Mr. Speaker.

CROWN CORPORATIONS BORROWING
AUTHORITY INCREASE ACT

HON. MR. CURTIS: As the Legislature is aware, the Minister of Finance is the fiscal agent for a number of Crown corporations in British Columbia. At this time three of those corporations, namely the British Columbia Buildings Corporation, the British Columbia Railway and the British Columbia Hydro, and Power Authority, have requested increases in the amount of their borrowing authority. This act proposes increases of $100 million each in the limits of the amount of the borrowing authorities for BCBC and B.C. Railway and $750 million for the B.C. Hydro and Power Authority. The increases are proposed to allow these corporations to proceed with their projects and leave a reasonable amount of borrowing power available for any unforeseen events.

The British Columbia Buildings Corporation is projected to have had a balance of $5 million of their $200 million borrowing authority remaining at March 31, 1980. The major projects now underway or planned requiring funds in the next five years include the New Westminster courthouse, Vancouver pre-trial services, Oakalla women's unit, Victoria office buildings, the Kamloops courthouse, Kamloops remand centre, Port Kells highways establishment, Kamloops highways establishment, Prince George courthouse, the Vancouver Island correction centre, Prince Rupert highways establishment and Oakalla men's unit. The borrowing requirements for 1980-81 construction are estimated to total $58 million. This bill therefore proposes to increase the borrowing limit for the British Columbia Buildings Corporation by $100 million, from $200 million to $300 million.

The British Columbia Railway's projected balance of its present borrowing authority is seen to be $39 million as of March 31, 1980. The corporation requires $30 million for acquisition of rolling stock in the present fiscal year. This would therefore leave only $9 million borrowing authority, and, clearly $9 million is not considered sufficient to allow for the possibility of additional capital expenditures.

Mr. Speaker, members will also be aware that an increase in the amount of the borrowing authority does not automatically mean that the corporation can borrow to that limit. Borrowing by the corporation is subject to approval of the Lieutenant-Governor-in-Council, so that the amount of borrowing is controlled by the government initially and in the final analysis by the Legislature through the total amount of borrowing authorization which is given at any particular time.

At this time, in view of the possibility of additional funds being required, it is prudent to increase that borrowing authority limit. Therefore the bill proposes to increase the British Columbia Railway borrowing limit by $100 million, from $900 million to $1 billion.

British Columbia Hydro and Power Authority now has a borrowing authority limit of $5.65 billion. However, again at March 31, the projected balance of that limit is $290 million, and with an estimated $709 million requirement for borrowing in this fiscal year, there is the projected shortfall of $419 million, Major projects, plant and equipment expenditures will approximate that amount. Indeed, in committee stage perhaps I could speak of those. They involve construction of transmission lines, Revelstoke and a number of sites, buildings and a variety of projects, including substations, switching, termination and protection and control of electrical energy during the transformation to distribution voltage process, other electric, including service buildings, control centers, research laboratories, vehicles, tools and equipment, the gas service distribution system, underground storage exploration, rail freight service — that's trackage improvement, diesel and other additions — and, generally speaking, the kind of thing for which similar borrowing authorization has been given in this House over a number of years.

Mr. Speaker, the expenditure for capital projects for B.C. Hydro in this fiscal year would total approximately $858 million. Therefore there is a projected shortfall of $419 million between the present borrowing limit and the amount required. This would therefore increase the borrowing au-

[ Page 2841 ]

thority for British Columbia Hydro and Power by $750 million, from $5.65 billion to $6.4 billion..

One of the points which I think should be referred to in connection with this increased borrowing authority for three Crown corporations is the fact that if it is necessary to go to the markets once again, all British Columbians and all members in this House, I am sure, will be pleased that very significant sums of money will be saved as a result of British Columbia securing through its Hydro bonds at this particular point in time, a AAA rating from Moody's Investors in New York.

That is the general observation with respect to second reading of this bill. Perhaps in committee we can have more discussion, if that is the wish of the members of the House. I move second reading of Bill 9.

MR. STUPICH: Twice this morning the government has challenged us to vote against their legislation. They've called divisions when there was absolutely no opposition in the House to the legislation before us. There were questions and constructive suggestions, but absolutely no opposition. In this instance there will be opposition from the opposition side of the House. We do intend to oppose this legislation.

It's not so much that we are opposed to any of the specific suggestions for spending the money, as detailed by the Minister of Finance; but for a government that professes to not believe in government debt — although on occasion it has embarked on some pretty questionable policies, such as selling three new ferries rather than borrow the $85 million that it desperately needed to balance its budget in the year ended March 31, 1977, and setting up a debt of some $271 million as of March 31, 1976, for purely partisan political purposes.... This legislation before us is actually reaching a new level of hypocrisy for a government that, as I say, doesn't believe in going into debt.

With respect to government borrowing and contingent liabilities, there has long been a debate as to what exactly is the true level of debt in the province of British Columbia. I can recall a previous Minister of Finance, the Hon. W.A.C. Bennett, explaining the difference and saying that in the case of debts that were owed by B.C. Hydro, the money was not coming from the government. Payment of the debts was guaranteed, so these were contingent liabilities rather than real liabilities. His arguments got a bit more shaky when he started dealing with school district capital borrowing, because each year money was paid directly out of consolidated revenue to the various school districts and was allocated specifically to the purpose of paying debt charges. Roughly 50 percent of the total amount required for debt charges in the province for that purpose were a direct impost on the Crown and should have been recognized in Public Accounts as a direct liability — a real debt of the government rather than as contingent liability.

B.C. Buildings Corporation is a case in point where we've gone to the absolute extreme. Every cent of revenue that B.C. Buildings Corporation gets, it gets from the various ministry budgets, where they are recorded as rent expenses. There isn't any other source of revenue for B.C. Buildings Corporation of which I am aware. B.C. Buildings Corporation is an organization that does have some real debt. I don't know what the current figure is. We have public accounts for the year ended March 31, 1979. That is the latest we have available. At that date the long-term debt of B.C. Buildings Corporation exceeded $68 million. In addition to that, there were notes payable to the province of British Columbia in excess of $143 million. Total debt of that corporation, debt that it incurred purely for the purpose of providing buildings for the use of various provincial government ministries, expenditures that were previously recorded fully in Public Accounts, that were not recorded as debts under any previous administration.... But this administration, in order to be able to say that it is not putting the public directly in debt, set up a corporation that by March 31, 1979, had borrowed in excess of $211 million and is now proposing to have legislative authority to borrow a further $100 million.

[Mr. Strachan in the chair.]

Looking at the nature of some of those debts is rather interesting too. Again quoting Public Accounts, the notes payable to the province of British Columbia — as I pointed out — total over $143 million. Over $123 million of those notes bear absolutely no interest at all. One wonders about a source of funds that is actually bearing no interest. The province of British Columbia invests money in a Crown corporation that it chooses to treat as a separate entity, and says that that Crown corporation's debts are its own debts which it will finance out of its own revenue, forgetting that all the revenue is coming from the province of British Columbia, and having loaned that corporation all that money in addition to other money that was granted. Buildings were granted at least, and the figure is shown on the balance sheet.

In addition to that, they have loaned them $123,571,000 to this day that bears absolutely no interest at all. In addition to that, they have a very attractive rate on the balance of $20 million, at least attractive today at 10.5 percent. B.C. Buildings Corporation's debt, at this date, is in excess of $143 million and should be honestly recognized as a direct debt of the province of British Columbia.

The second section of the legislation deals with B.C. Rail. B.C. Rail is getting money from the private sector. It's obvious that B.C. Rail is never going to be in any position to meet its debt payments. The government recognized that this year. Legislation provided for money to be given to B.C. Rail to actually meet its debt payments. The Auditor-General, in examining this particular Crown corporation, argued that since the moneys were totally guaranteed by the province and since it was patently obvious that B.C. Rail itself would never be able to meet these debt obligations, those debt obligations should be recognized in public accounts as a direct debt of the province of British Columbia. This legislation before us does not. It chooses to continue the fiction that this is a separate Crown corporation which is raising money other than through government consolidated revenue funds. It is now going to go out and borrow a further $100 million which will not be government debt — it'll be somebody else's debt — recognizing at the time that the only source of money to meet the servicing charges on that additional debt will be consolidated revenue of the province of British Columbia. It is a long-term debt for B.C. Rail. Again, I have to refer to the latest figures available from public accounts. They're quite old now — December 29, 1978. But the long-term debt at that time exceeded $627 million.

It's interesting to read some of the notes in the financial statements in telling us some of the details of that debt. Note No. 4 says: "Long-term debt is not secured by the assets of the railway." Nobody would take the assets as security for this kind of debt. There's no point in pledging those assets as

[ Page 2842 ]

security for this debt. In that note it is recognized that the only security for that debt is the security offered by the government of British Columbia. It is, in fact, a real debt of the people of the province and should be recognized as such.

Further, note No. 4 says: ''Bonds totalling $143,951,000, which are held by the Minister of Finance for Canada, contain a provision whereby under certain circumstances they may be presented for redemption upon six months' notice given to the railway." Mr. Speaker, that truly is a real debt — a current debt. A debt that can be called anytime within 12 months is considered in accounting fields as a current debt. So that total amount is a current liability. There's no point in saying that it's B.C. Railway's current liability. If B.C. Rail were called upon tomorrow to produce that money within six months, and the agreement is that they would have to meet it, there is no other source for that almost $144 million than the people of British Columbia through consolidated revenue. The government might have to go out and borrow. Nevertheless, it's the government that would have to come up with that. It is a true and a real debt and not a contingent liability. This legislation before us prefers to continue the fiction that this is somebody else's debt and is not really a debt of the province of British Columbia.

A further $48,387,000 of the bonds are subject to redemption after 1979 at option of the holder or the railway. Well, I can't imagine the railway redeeming them. But the holder may redeem a further $48 million. So we now come up with a total of in excess of $192 million. Quite apart from the total debt, some of which is long-term, $192 million might very well be called at any time. The government would have to come up with the money. It is a true debt and not a contingent liability as far as the people of British Columbia are concerned.

The government should recognize that. The Auditor-General gave that advice and it's advice that we can support. The legislation before us chooses to ignore that kind of advice, chooses to pretend that this is not a real debt of the people of the province and chooses to continue in the fiction that it's only a contingent liability and might have to be covered by the people only in the event that the particular Crown corporation isn't able to do so. In fact, we know that those two Crown corporations will never have any ability to pay any of these debts, other than the ability guaranteed and provided for by the people of the province.

We can't support this legislation, because it just isn't dealing with the truth with respect to those two particular Crown corporations.

MR. SKELLY: Just following along with what the member for Nanaimo (Mr. Stupich) said, the opposition intends to vote against the bill for a number of reasons, among which were the reasons given by that member.

I'm particularly concerned about the fact that the bill now combines what the government considers to be the debt requirements of three separate Crown corporations, rather than dealing with the Crown corporations on a bill-by-bill basis. While I don't have much experience with B.C. Rail and B.C. Buildings Corporation, I am concerned about the operations of B.C. Hydro and their plans for the province of British Columbia over the near-term and long-term future. One of the problems I see with B.C. Hydro is a total lack of accountability to the people of this province and to the Legislature. And one of the things I see wrong with the ministers who are placed on the board of directors of B.C. Hydro by this Legislature — or I should say, by this government — is that they fail to account adequately to the Legislature for what is happening within B.C. Hydro and for Hydro's plans for the future.

Occasionally, in spite of the veil of corporate secrecy that's thrown around B.C. Hydro, we do get a little information out of the corporation, but not really enough to give members of the Legislature an accurate idea of what the corporation is doing and whether or not we should be voting money or debt to Hydro to support some of the projects that they are planning over the long-term future. We know what Hydro's anticipated expenses are for the coming year because it appears in their press releases and in their corporate newsletters, but it's been extremely difficult to find out what methods Hydro uses to develop its load-growth projections. It's only been recently that Hydro.... Well, they didn't release this one but they have released forecasts of gross load requirements. It's only been recently that they've made these documents public and made the public aware of some of the methodology that goes into their load-growth projections.

For this reason many of the people of the province do not trust B.C. Hydro and they do not trust the figures given to them by B.C. Hydro. When, and only occasionally when, the Hydro directors who are also cabinet ministers report to the Legislature — and I see none of them are here today to assist the Minister of Finance with this bill — only occasionally can we really trust what they say is happening in B.C. Hydro, because often they don't know.

DEPUTY SPEAKER: Hon. member, I would have to draw your attention to that last remark. If you have impugned any dishonourable motive against a member I would have to ask you to withdraw that.

MR. SKELLY: No, it was a mistake on my part, I think, more than anything else, Mr. Speaker. I do withdraw the statement if it reflected on a member of this House. No, I don't think that they're really capable of knowing what is happening in B.C. Hydro, so that some of the statements they do make to the House don't really reflect what's going on in B.C. Hydro, but it's not intentional that those ministers are so confused.

MR. BRUMMET: But you're an expert. You know you can trust everything you say.

MR. SKELLY: I'm perfectly willing to let the member for North Peace River take his place in the debate and tell me in what way he is an expert on B.C. Hydro, because he's suddenly developed that expertise, Mr. Speaker. During the last election he went around North Peace constituency and people were confused. They didn't know whether he was in favour of the Site C dam or against the Site C dam. But once the votes were counted....

MR. BRUMMET: Point of order, Mr. Speaker. That is incorrect. I made myself clear. That member has just said that during the last election campaign the people did not know where I stood. I made my position clear, so I think I'd ask that member to withdraw that statement.

AN HON. MEMBER: That's not a point of order.

MR. BRUMMET: It's a valid question of privilege.

[ Page 2843 ]

DEPUTY SPEAKER: Hon. member, you have made your point, and the Chair will ask the member for Alberni to speak to Bill 9.

MR. COCKE: On a point of order, Mr. Speaker, the member has, at the end of the speaker's speech — that is, the end of the present speaker's speech — the right to get up and correct what he thinks to be an error. He did not bring up a point of order. He should pay more attention to the rules of the House.

MR. SKELLY: It might be drawn to the attention of the member for North Peace River that it's against the rules of the House to make interjections across the floor, but I wouldn't suggest that to the Speaker.

MR. BRUMMET: It's also wrong to make false accusations.

DEPUTY SPEAKER: Order, please. All members will come to order. The member for Alberni has the floor on Bill 9, second reading.

MR. SKELLY: In any case, during the last election the people in the North Peace River area were confused as to that member's position on the Site C dam. They are no longer confused, because there was a two-page article in the Alaska Highway News recently, sent to me by one of his constituents, which shows that he is solidly in favour of the Site C dam. That article has all the earmarks of being written by B.C. Hydro rather than by that member.

MR. BRUMMET: Of all the dirty allegations!

DEPUTY SPEAKER: Hon. member, the Chair heard that remark and I'm afraid I'll have to ask you to withdraw it. Will the member withdraw, and will the member for Alberni remember that we are on Bill 9.

MR. BRUMMET: Mr. Speaker, I am not that knowledgeable about the rules of the House. I am just familiar with the rules of justice. I will withdraw.

DEPUTY SPEAKER: The member will continue on Bill 9, addressing the Chair.

MR. BRUMMET: I wrote that myself and you know it.

MR. SKELLY: Mr. Speaker, what I was talking about was the kind of lack of trust that people in the province and in the Legislative Assembly have for B.C. Hydro, because of the veil of secrecy that surrounds the corporation and because the plans and projections of the corporation are not adequately communicated to this Legislature on a year-by-year basis. When B.C. Hydro comes to the Legislature to ask us for an increase in their borrowing authority, we really don't have in detailed and concrete terms precisely what it is that B.C. Hydro is planning to do in the future. Also, we don't know upon what basis they are making their plans. People are very suspicious of the data that is presented to them by B.C. Hydro, that data being the data which Hydro says requires long-term planning.

They make some interesting statements in their forecasts of gross load requirements. Here is one statement from page 1 of the most recent — 1979-80 to 1989-90 for all services: "System planning will be developed on the probability forecast, with appropriate testing and contingency planning to ensure that the high projection can be met." In other words, Hydro is really planning to meet the highest projections that they pull out of the figures. They are not working on the probability projections of load growth at all. They are working on the highest projections that they have developed. So the idea within the Hydro organization is to overbuild in order to meet the high projection of load growth demand.

There are also some interesting ways in which Hydro develops the figures for the increase in their bulk loads, their heavy industrial loads. When the regions produce a projection of increase in bulk load requirements, that figure goes down to head office, according to this little booklet. At head office a factor is added to the aggregate figure. Nobody knows what that factor is, how accurate it is or how probable it is that that figure will be met over the term of the load growth projections. So some figure is added at head office to inflate the bulk load requirements of B.C. Hydro over the next ten years.

I would like to give an example from the Vancouver Island figures for residential load growth. Hydro, in its load growth projections, breaks these down into residential homes that don't use electricity for heating, residential customers that do use it for heating, and a total. They show in the historic figures that there has been a decline in the average kilowatt hours used in homes that have electricity as their heating. In 1976-77 the average kilowatt hours for home heating dropped off by 928 kilowatt hours. In 1977-78 it dropped off by 492 kilowatt hours. In 1978-79 it dropped off by 457 kilowatt hours. So over the last three years the historic figures show a substantial decline in the use of electricity in those homes that have electricity for their home heating requirements.

Hydro does something very unusual. They project that decline for another three years in a decreasing way. In 1979-80 they drop 158 kilowatt hours. Then they turn around and increase it by 150 kilowatt hours a year, out to the end of their projection. So in spite of a downturn in electrical energy use in those homes on Vancouver Island that use electricity for home heating, Hydro turns that around and projects that those homes are going to use more electricity in the future.

Those figures simply cannot be trusted, Mr. Speaker, and nobody in the province really trusts Hydro in their forecasts of load-growth requirements. One of the problems with B.C. Hydro is that it lacks the trust of the people of British Columbia. There are no mechanisms by which B.C. Hydro is directly accountable to the people of British Columbia, and the people of British Columbia resent the fact that Hydro comes every year to borrow another three quarters of a billion dollars from the Legislative Assembly without being accountable to the people and without providing accurate information to the people.

HON. MR. FRASER: We'd burn candles in British Columbia if we'd listened to the socialist policies 20 years ago.

MR. SKELLY: That's the kind of inane comment we expect from the Cariboo, Mr. Speaker.

The crown corporations committee, on which some of those people were represented, questioned B.C. Hydro, questioned its accountability, questioned the methods by

[ Page 2844 ]

which it develops projects and issues tenders and awards contracts, questioned B.C. Hydro on the way they account for the projects that they have under construction, and recommended some fairly fundamental changes in the organization of B.C. Hydro, recommendations which seem to have been ignored.

One of the recommendations was that Hydro be broken up into separate operating authorities — a gas authority and an electrical sales authority — and that the planning and the holding company aspects of B.C. Hydro should be separated from the operating aspects so that there would be an improvement in Hydro's performance. In spite of that recommendation, nothing has been done to change the structure of B.C. Hydro.

This is such an important Crown corporation in the province; its work is so expensive to the people of the province; it spends so much money in the province of British Columbia. We're spending more in this bill on energy than the whole Ministry of Energy, Mines and Petroleum Resources, including special appropriation, is going to be spending. Yet there is less accountability in this bill and there are fewer explanatory notes in this bill than we get from the minister during his estimates — I'm just making a prediction; possibly there are more.

Look at the things that happen at B.C. Hydro. The top two floors of B.C. Hydro, 20 and 21, are the executive floors, and we've just done a refit of those floors, because we've hired a lot more executives at B.C. Hydro since the Socred government came into office. Now there is talk about having the elevator stop at the twentieth floor, and you have to have a special executive key to get onto that floor. There has been a big spiral staircase built between the twentieth and the twenty-first floor so that the executives won't have to lower themselves to mix with the working people down at Hydro in the course of their daily work. The total estimated cost of that is $150,000 to $200,000 in the last year. Is that what we're borrowing this money for, Mr. Speaker — to make the accommodation of the executives at B.C. Hydro all that more luxurious? Where does B.C. Hydro account for that kind of expenditure to the people of this province? What would happen if the Minister of Human Resources (Hon. Mrs. McCarthy), for example, spent $150,000 to $250,000 on her office installing spiral staircases and the like? You would be outraged.

HON. MR. FRASER: Tell us about Cass-Beggs.

MR. SKELLY: I'm pleased to hear, Mr. Speaker, that the minister from the Cariboo is outraged. They spent more money on the top two floors of B.C. Hydro than they've spent on road development in my riding in the last two years, and I'm angry. The people of that riding are angry. And you guys allow this to go on.

Interjection.

MR. SKELLY: We're on the fact that Hydro has spent something like $150,000 to $200,000 just redecorating its executive offices to insulate them from the working groups within B.C. Hydro. That's what I'm concerned about. This money is being wasted in B.C. Hydro and there is no accountability to this Legislature.

While I was talking recently to an executive member from the corporation who explained some of these figures to me, he said: "If you think that's bad, and you think that parliamentary restaurant is good" — that everybody complains about down here — "you should come up to our restaurant. Our waitresses don't dress up in uniforms; they dress up in livery. It's like a private downtown Vancouver club."

I see the member for Cariboo (Hon. Mr. Fraser) is laughing because he has obviously been up there. He's not going to the White Lunch in Vancouver; he's not going to the race track; he's going up for lunch at the B.C. Hydro executive restaurant, where you can get anything you want on the menu — not like the White Lunch. You can get anything you want in the restaurant and you can get anybody to serve you. The silverware and the ambience are luxurious.

HON. MR. FRASER: Get out the candles.

MR. SKELLY: They have candles on the tables, while everyone else has fluorescent lights down here in the cafeteria. What I am trying to say is that the executive of Hydro lives totally isolated from the problems and energy needs of British Columbia — totally isolated from accountability to this Legislature and to the people, and we treat them as luxuriously as lords. They are spending money upon money that is raised by the taxpayers, the utility bill payers and the transit bill payers of this province. They are living in luxury, and they have no right to be. They should be accountable to the people of this province, and they're not. We are spending a tremendous amount redoing the offices of B.C. Hydro's executives in order to treat those members as though they were the exclusive members of a downtown private club in Vancouver.

One of the things we are concerned about is the way Hydro develops policies like pricing of energy commodities. It has been discussed in the Legislature and in public meetings on a number of occasions. I wrote to the people in Hydro who are responsible for developing energy pricing, and I got a reply from Robert Bonner. I asked Mr. Bonner: "How do you develop pricing, and what is the policy behind it? Do you develop pricing in order to meet your revenue requirements, to encourage energy conservation or to encourage the use of electricity throughout the province?" The fact is that Mr. Bonner wrote back to me that they have no pricing policy and they haven't done a study on pricing in Hydro for years, even though one of the main criticisms of Hydro is that they discourage other probably more economical energy forms by not developing a pricing strategy that would encourage, for example, co-generation of electricity by some of the industrial concerns in our province. They develop a pricing policy that encourages waste of electricity in the residential sector, because they charge a great deal for the first block of kilowatt-hours used and very little for the rest. If you get over the limit, then you get the rest of the kilowatt-hours virtually free of charge. Hydro's pricing policy encourages the use of electricity and encourages waste of electricity. That is something we are concerned about, because it has an effect on the projected demands and the project requirements of B.C. Hydro. Yet Hydro does very little in the way of studies to find out how they can change their pricing policies in order to encourage energy conservation.

The member for Omineca (Mr. Kempf), writing in the Lakes District News a few months ago, said he was outraged by the fact that Hydro was allowed to increase its price by, I believe, 4.7 percent prior to the implementation of the British

[ Page 2845 ]

Columbia utilities legislation. He said he was going to come down to Victoria and fight for changes to have that price increase rolled back until the utilities legislation had been brought in. I guess he knew at that time that Bert Price's daughter was being appointed to the utilities commission and that it would be a shoo-in for Robert Bonner to get that price or even more, because a political back had been appointed to the commission. No, I don't think he realized that at the time. I think he was attempting to get across....

HON. MR. FRASER: On a point of order, I would like that member to withdraw the remark that a political hack had been appointed to the commission. That's not so.

DEPUTY SPEAKER: Hon. member, all members are responsible for their own statements, and it is against the rules of this House to offend another member. Another member has not been offended.

MR. SKELLY: I will withdraw that statement in any case. A person with political connections was appointed to that commission.

The member for Omineca said he was going to come down here and fight against those price increases because the government had allowed Hydro to slip one by us before the B.C. Utilities Commission had been established, which was going to have the right to rule on those price increases and was going to give the public an opportunity to discuss whether those price increases were justified or whether some alternative form of pricing would have given Hydro its revenue requirements and would have given some incentive to the people of the province to save energy and diminish the need to build some of these huge generating and transmission projects.

So it appears to me, Mr. Speaker, that Hydro has greater control over this government than the government has over Hydro. It's reflected in the changing of the Premier's statements over the last little while. At one time he got up a few years ago and he said: "Well, gee, I'm really worried about Hydro. I'm really worried about that corporation. It seems to be going everywhere on its own, and it's out of control." Just last Friday, or the Friday before, be opened up Hydro's new research facilities and now he says we should all love Hydro. So there's been a change in the first minister's attitude toward B.C. Hydro — I don't think there has been a change, but there's been a change in what he's saying about Hydro. Now he says we should all love Hydro.

Mr. Speaker, they now say it looks like Hydro wrote a part of the throne speech. They said there's all these rivers in British Columbia flowing towards the sea, and they're nothing but a tremendous waste of energy, dumping into the ocean, with a loss of electrical or mechanical energy. It's a shame to consider our rivers from that kind of Hydro tunnel vision point of view. It looks like Hydro has slowly gained control over this government. It's something that we're very concerned about on this side.

Mr. Speaker, I don't think that the minister has adequately explained to the Legislature, at least enough for us to justify voting for this bill, the expenditure requirements for B.C. Hydro and Power Authority, requiring that we vote them an additional $750 million in borrowing authority.

I'm wondering how much of this money is going into the Cheekye-Dunsmuir project. It says in Hydro's material that this year they require $57 million for the new Vancouver Island-mainland link. But last August they awarded to Pirelli Industrie of Italy and to Standard Telephone and Cable Fabric of Norway a $279 million contract to build the submarine cables for the Cheekye-Dunsmuir project. You probably remember yourself, Mr. Speaker, when Hydro said that the total cost of the project was going to be $312 million. I expect that this project alone — one single transmission project that doesn't create a single new kilowatt hour of electricity in the province of British Columbia — will overrun the initial estimates of its cost by the amount of the total overrun on all of the Columbia River Treaty dams. It'll overrun by at least $1 billion.

How has it gone up? In 1978 they said it would cost $312 million. In July 1979 they said it would cost about $640 million — this is without a sod being turned. In January 1980 they said it Would cost $779 million — again without a sod being turned. By the time we get anything on site, Mr. Speaker, it will cost over $l billion, with just a few land lines and some substation preparation. By the time it's complete it will cost well over $1.3 billion.

But how many jobs is it going to create in British Columbia? What is the total job creation of this expenditure, by the government, through debt raised on the backs of the people of this province? What is going to be the total number of jobs created in British Columbia? Well, let me read some sections from a report which Hydro has yet to release. Or maybe they've released it now, I don't know. This is in Phase I, Appendices 1 through 3, "Cheekye-Dunsmuir 500 Kilovolt Transmission Line Route Selection Study. " It talks about employment and income. It says: ''Post-construction employment supplementary to the normal B.C. Hydro crews based in the region is expected to be minimal. With the regular crews responsible for normal maintenance activities, additional work will be generated only through periodic maintenance of the right-of-way.'' In other words: herbicide spraying. No additional permanent employment in the regional offices related directly to the proposed facilities is foreseen by B.C. Hydro. In other words, there is an expenditure of $1.3 billion by Hydro and no additional work within the corporation.

Then they talk about direct employment. Estimates of manpower requirements provided by B.C. Hydro are given in table 3.1. A total of over 400 man-years is indicated for project construction. That's 400 man-years of labour out of an expenditure of $1.3 billion. So, by simple division, you can work out what the cost of each job is, and it's horrendous. But where is this labour going to come from? Until the successful bidders are named, it will not be known how much of the manpower will be drawn from local sources. However, it can be assumed that part of the project labour force would be permanent residents of the geographical areas crossed by the project, particularly those employed as labourers. So in the most unskilled categories, the local areas will provide some of the project people.

But on the same page it says: "Note that the estimates do not include any manpower requirements for underwater cable installation, as this will be handled totally by the supplier" — foreign — "on a single contract. Some unskilled labour may be hired locally by the supplier, but the skilled labour for this aspect of construction is expected to be imported." So in the main, B.C. Hydro, borrowing money from public pension funds in the province of B.C., or perhaps offshore, at the rate of 14.5 percent in some cases, is creating jobs for labourers who will be imported to the

[ Page 2846 ]

province of British Columbia. No labour will be created here on the submarine section of that cable.

I checked with my brother, who's the Member of Parliament for Comox–Powell River, and he has checked through the embassies in Norway and Italy and found out that in the construction of the cable in Italy — the cable is being built in Naples — in addition to plant expansion, they have created over 100 jobs in Naples as a result of the Cheekye-Dunsmuir project. So 25 percent of the total jobs created will be created in Italy. We don't know how many jobs are going to be created in Norway yet, but I will report that to you, Mr. Speaker, as soon as we have the information.

I tried to get the information about the job creation overseas from Charlie Nash of B.C. Hydro. I asked him for a copy of the contract between B.C. Hydro and Pirelli Industrie for the Cheekye-Dunsmuir project and he said: "You can't have it. " I said: "Why not?" He said: "Well, I have to get permission from the suppliers, from Pirelli Industrie in Naples or Standard Kabel in Norway." I said, "Well, I'm sure you'd be willing to do that for me, " and he said: "No, I wouldn't." In other words, I, as a member of the Legislature, and you, as a legislator, and the Legislature in general, were told by B.C. Hydro and Power Authority's chief executive officer, or one of their chief executives, that they had no right to find out what was in the contract between Standard Telefon and Pirelli Industrie with B.C. Hydro to build that submarine section of the cable. This is a Crown corporation that's supposed to be responsible to the people of this Legislature and indirectly responsible to all the people of the province who pay the bills for that corporation, and we were told we couldn't even have access to the contract for building of the Cheekye-Dunsmuir power line.

All of the labour on the submarine section was foreign labour. Only 400 jobs were created in Canada. What about the labour rates that are going to be paid in Canada? Again, this is from Hydro's own figures. Out of a $1.3 billion project — and that's my estimate — the amount of wages paid directly to Canadians would be $10.5 million. That is as much money as Cranbrook, Dawson Creek and Vernon are losing from the loss of operator services through B.C. Tel's elimination of the operator services in that area — $10 million is all of the local labour wages to be created on Vancouver Island and the mainland by the Cheekye-Dunsmuir project. Mr. Speaker, this project is a tremendous loss in terms of wages paid to British Columbians, jobs created in British Columbia, materials purchased in British Columbia and in terms of any economic benefit to British Columbians at all. This job is a tremendous loss. More jobs are being created in Italy and Norway by the Cheekye-Dunsmuir project than are being created in British Columbia by far. It's a dead loss; it's a bad decision by B.C. Hydro.

There were numerous energy alternatives available on Vancouver Island that Hydro chose to ignore. Economic studies of the cost-benefit of this project indicated that Hydro purposely ignored the alternatives available on Vancouver Island — alternatives to that Cheekye-Dunsmuir project, projects that would have been more job-intensive, less capital-intensive, and would have required less borrowing overseas or less borrowing from our provincially trusteed pension plans. Hydro selected the most expensive alternative and the least job- intensive alternative, and we're all going to lose — not simply on Vancouver Island, but also on the mainland of British Columbia. All British Columbians are going to lose as a result of Hydro's decision and the government's decision to proceed with this project.

On that basis, why should we as legislators take B.C. Hydro's word for anything, including their borrowing authority requirements, unless Hydro is called before this House and called upon to explain why they went into the Cheekye-Dunsmuir project without adequately examining the other alternatives available to them? I'm certainly not prepared, as a responsible member in this Legislature, to approve an increase in Hydro's borrowing authority until that has been explained to me.

The other example, of course, is the Site C dam. Again, the question of the Site C dam is: are we to build an 880 megawatt electrical project in an area where we have prime agricultural land and threaten the loss of something like 6,500 acres of prime agricultural land as a direct result of the construction of that dam? Max Saltsman, I believe, made a speech in the House of Commons once in which he said there are two things that contribute to inflation.

AN HON. MEMBER: Who's he?

MR. SKELLY: Read Hansard for a change, Mr. Member, and you'll find out who he is.

Max Saltsman said that there were two things that contributed to inflation. One was the high cost of food and one was the high cost of energy. When you analyze it a little more deeply food and energy are precisely the same thing.

AN HON. MEMBER: There's a message for you. They want you to sit down. Your own members are deserting the ship.

DEPUTY SPEAKER: Hon. member, I've just been informed that the green light is not working; however, you have three minutes left.

MR. SKELLY: I was advised that I was designated speaker, Mr. Speaker.

DEPUTY SPEAKER: Oh, well, in that case, hon. member, carry on.

MR. SKELLY: I think we were back on the Site C dam and Max Saltsman. Max Saltsman said that food and energy were the major contributors to inflation. As the price of energy goes up — energy is an input to everything we do — then the price of everything we do goes up. Every commodity we produce, every service we provide, every time we move ourselves from one place to another on any transpiration facility, energy contributes to the cost of that service, the cost of that commodity, and as energy goes up the price goes up. Food is nothing more than human energy, and you can convert food to human energy. Even the Minister of Agriculture (Hon. Mr. Hewitt) is aware of that. Energy also contributes to the price of food because of all those inputs into the agricultural industry, the agribusiness industry: the gas you put in the tractors, the natural gas-derivative fertilizers and petrochemicals that you use to kill the bugs — and the people who eat the food — all of those things.

Every aspect of inflation is affected by the price of food and energy. Here we are in a classic confrontation with the Site C dam over whether we should produce energy on that valuable agricultural land or whether we should produce food, because there are other alternatives. We can produce

[ Page 2847 ]

energy through wood waste; we can produce 200 megawatts on Vancouver Island according to....

HON. MR. FRASER: And candles too.

MR. SKELLY: Oh, you guys are crazy.

We can produce energy through wood waste on Vancouver Island. The Paul Jones and Associates study shows that there are 200 megawatts of energy available from wood waste and forest residues on Vancouver Island that are economically feasible now — not sometime in the future but right now — if we had the policy direction coming from this government. I suspect that if you took every other region of the province.... The region of the Minister of Transportation and Highways (Hon. Mr. Fraser) is one where there is some possibility of Hydro combining with the industry to produce energy from wood waste. There are a number of alternatives, including area heating, use of industrial waste and burning solid waste which we now dump in landfill sites.

Every possible alternative exists and is available to us now. Every possible alternative exists now as an alternative to that Site C dam. The one thing that there is no alternative for is good, high-quality, food-producing agricultural land. This was one of the things that defeated the McGregor diversion project, Mr. Speaker. The fact that that project would take out of production — and that is in your area — millions of acres of prime forest land was one of the reasons why the McGregor diversion was shot down. Those trees were probably far more valuable to the economy of B.C. than any energy which may have resulted from running the McGregor diversion waters through the Peace River system.

MR. KEMPF: How many acres in Site C? He doesn't know how many acres. He's never even been there,

MR. SKELLY: Yes, I have been there. There are five million acres.

MR. KEMPF: How many acres?

DEPUTY SPEAKER: Order, please. The member for Alberni has the floor. Please continue, hon. member.

MR. SKELLY: I once took a trip on a riverboat just to........

DEPUTY SPEAKER: Speak to the bill, hon. member.

MR. SKELLY: This has something to do with the bill. I am being questioned on it by the member for Omineca (Mr. Kempf), who should know some answers.

MR. KEMPF: How many hectares...?

DEPUTY SPEAKER: All members will come to order.

MR. SKELLY: For the benefit of Hansard, it should be shown that his question was answered. I took a boat trip up the McGregor River right up to James Creek where they were going to divert the water over into the Parsnip River system.

MR. KEMPF: I'm talking about Site C. How many acres?

MR. SKELLY: I'm talking about the 6,500 acres of prime farmland that was mentioned in Mr. Brummet's article in the Alaska Highway News, so argue with him about it.

Mr. Speaker. It is prime agricultural land that would be lost forever, and they are not making it anymore. According to the consultants you hired, changes in the micro-climate would inevitably take place in the area that might have affected agricultural production and the range of crops that could be grown over the agricultural land remaining, and that could have dramatically affected the economy of that North Peace River area. Those are some of the things we are concerned about with the Site C dam, and whether Hydro is the proper authority to make a judgment on whether that land should be used for food energy or agricultural energy. As far as I am concerned, Hydro is not the agency that should be doing that.

Earlier this year in February, the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland) promised that we would have an independent, two-stage, streamlined project review procedure to look at some of these energy projects. He keeps saying that this legislation is going to come down in the House in three or four weeks, or 30 or 45 days, and it never comes down. It will probably come down within the last few days of the session and we'll all be in a rush to get out of here.

MR. BRUMMET: When's that?

MR. SKELLY: That's up to you. It could be December. He wants the procedure to be operating in July. If there is an opportunity to delay the Site C dam by delaying the adjournment of this Legislature until 1985, I am willing to stand up here until 1985 to do that. because I think it is a bad decision. Furthermore. I don't think there has been sufficient public input nor will there be under the minister's proposed two-stage streamlined project review procedure. Until I see that procedure, maybe we should adjourn debate on this bill and then we'll have more information with which to consider this bill.

In any case, Hydro has embarked on a number of projects which have very serious environmental and social implications, serious implications with respect to agriculture. In closing. Mr. Speaker, I would urge all members of the House not to vote an increase in Hydro's borrowing authority until such time as that corporation has become more accountable to this Legislative Assembly and to the province and the people of British Columbia who are so concerned about projects such as Site C and the Cheekye-Dunsmuir transmission line. Again. I would urge members to vote against this bill.

MRS. WALLACE: I am pleased to take my place in opposition to this bill, as I have done on previous occasions in relation to similar bills in this Legislature, because I am concerned that what we are doing here is throwing good money after bad, particularly in relation to B.C. Hydro. I'm not surprised but I am a bit shocked by the comments coming from that side of the House whenever conservation of energy or alternate energy are spoken of.

All we get from that side of the House are comments like "light a match" or "light a candle" or "freezing in the dark." Certainly anyone who has viewed with any degree of depth or seriousness the energy problems facing not only British Columbia and Canada but the world as a whole

[ Page 2848 ]

recognizes that we have to look at alternative forms of energy. This government and B.C. Hydro are not prepared to make any commitment to those kinds of directions.

I'm convinced, Mr. Speaker, that the time is fast approaching when the attitudes are going to change. The attitudes are not going to change specifically because of environmental concerns — though certainly those are concerns. They're going to change because of sheer economics. It has been indicated by many of the people that have reviewed the whole energy picture that large concentrations of generation far removed from the market are not economic. Quebec is in this situation, Mr. Minister of Finance — and I note you're listening with great interest to my remarks — where projections towards future costs of those projects have been so revealing that, though the projections have been made, they have not been released, because it would be a disaster if they were released.

We're in a position where transmission costs represent about 90 cents or more of every consumer dollar in the total delivery of electricity to the consumer, the customer. Those costs are increasing. We're going to have to, for economic reasons, change our perspective in energy production. We're going to have to, for economic reasons, move into more localized types of power supply, and we're going to have to look at alternatives in the very doing of that.

I'm always concerned whenever I hear of a project such as an incinerator going in or any other kind of operation that has waste-heat energy, because we should be utilizing that. It takes a little planning, Mr. Speaker, and that seems to be something that governments in the past, and Hydro in particular, have been very short of. They don't do all-inclusive planning. The don't look at overall needs and possibilities.

We must start utilizing the energy that we are now wasting. Certainly heat energy from industrial sites, incinerators and from those kinds of projects is something that we could be utilizing. The technology is there. It's being done in areas right in this province, as the minister is well aware. It is being done in other jurisdictions around the world. All it takes is a little initiative on the part of this government to move into that direction and use some of that waste energy to provide the kind of local plant that provides energy close to the consumer.

Those are the directions in which we're going to have to move, Mr. Speaker. Unfortunately, there is no provision for those kinds of directions in any of the legislation that we see coming before us. We have instead a continuation of the large centralized power projects, far removed from the consumer. It means that we're going to have very expensive transmission lines, and the previous speaker has outlined in very great detail the costs involved in bringing power to Vancouver Island through the Cheekye-Dunsmuir line — not an extra kilowatt of generation, but millions and millions of dollars to bring that power to Vancouver Island.

We can talk about use of waste energy. We can talk about conservation. We can talk about those things in a concept that maintains our present lifestyle. The minister himself, in a previous bill — and I know I can't refer to it — introduced a measure to try to consume less fuel oil by giving a tax break to cars that have a better rating for mileage. That's one of the steps in conservation. It's not going to change our lifestyle — we're still going to use our automobiles — but we're going to use less energy. The same thing can apply to our homes. It's estimated that individual residences in Canada waste more energy than they use. More energy going into that home is wasted through poor insulation and through poor equipment than could be used if the proper insulation and the proper methods were applied. We're wasting energy constantly and we can move to conserve it. The technology is there.

When I think of solar energy, and I recognize the small amounts of moneys that are being put forth by B.C. Hydro or any other jurisdiction in the experimentation.... We don't really need to experiment; we can be doing. I drive by a place every day that is doing just that. I think his installation cost him something like $7,000, and he's heating his home with that installation.

HON. MR. CURTIS: You're supposed to bicycle by.

MRS. WALLACE: As I said, I'm going to use my sailboat, Mr. Minister.

Certainly it can be done. It is being done. It needs a little push from government and from Crown corporations such as Hydro to take those steps. Unfortunately, we seem to be in a rut. We seem to think that conservation means, as those members have said today, lighting a match, burning a candle and freezing in the dark, and it's just not true. We can live in exactly the same degree of comfort and convenience and still, through conservation and alternate sources of energy, meet those requirements.

As the agriculture critic, I'm faced constantly with problems that occur because of excess farm waste. Those products are high in energy, Mr. Speaker. I believe I've spoken in this House before about an experiment that has been carried on at the University of Illinois, just outside of Chicago, where the manure from the university dairy herd has been put into a pit and heated to the point where it produces gas, which is energy, Mr. Speaker. There is enough energy produced just from the waste from that herd of 100 dairy cows to provide 90 percent of the energy requirements of that operation, plus enough energy to reheat the waste from that herd.

Those are the kinds of technologies that are now available. We can utilize those. Again, it takes a little planning. You know, if you can do that with cow manure, think how much better and more effectively and more efficiently you can do it with hog manure, which is high in methane.

Yet we have over in the Fraser Valley a hog farm there that is continuously increasing its permits to pollute the Fraser River with its effluent. Those permits are being granted and the increases are being allowed. Yet with simple technology that effluent could be used as an energy source. Those are the kinds of projects we're talking about here when we talk about alternate energy. I have no qualms about failing to support a bill that simply adds more money, more borrowing power, to a Crown corporation that has continuously neglected those kind of approaches, and instead of that has continued to proceed on the damming of rivers and the large centralized projects with the long transmission lines that are simply economically unfeasible.

I would think, Mr. Speaker, that that is quite evident when you look at the increase of the borrowing in their own report over the last ten years. They have increased their bonds and debentures outstanding by more than four times over the last ten years. Yet you find that their fixed assets have increased by less than three times. I suggest, Mr. Speaker, that we're not getting a picture of an organization that is able to build up its productive capacity in line with its expenditures, because we're finding that instead of that we're borrowing far more than we're actually capitalizing as

[ Page 2849 ]

a result of those borrowings. We're falling far behind, and that's going to continue. The more we centralize our power generation and the more we continue to build long lines for transmission purposes, then we're going to be faced with these ever-increasing borrowings with less and less value for our money.

Mr. Speaker, with your permission I would like to yield to the member for Vancouver South (Mr. Hyndman), without jeopardizing my position. Now do I have your assurance that I will not lose my place in debate if I do that?

MR. HYNDMAN: Thank you. I would like the leave of the House to make a brief introduction.

Leave granted.

MR. HYNDMAN: May I say I appreciate greatly the courtesy of the member for Cowichan-Malahat in so yielding.

Mr. Speaker, in the members' gallery we have with us some students from grade 6 in the Sir Wilfrid Laurier School in Vancouver South. I wonder if members would join me in welcoming them warmly to the precincts.

MRS. WALLACE: I would like to refer to the report filed by the Committee on Crown Corporations in April 1979 on the construction management practices in the Columbia River Treaty project. But as this is going to take me some time, Mr. Speaker, I suggest that I would prefer to carry on when next this House meets, which may be some little time, I understand.

Mrs. Wallace moved adjournment of the debate.

Motion approved.

MS. BROWN: Mr. Speaker, I wonder if I could have leave of the House to make an introduction.

Leave granted.

MS. BROWN: Mr. Speaker, 35 grade 10 students from Edmonds Junior Secondary School had a tour of the Legislature and were in the gallery earlier with their teachers, Mr. Elwood and Mr. Hiller. I wonder if the House would recognize their presence.

Introduction of Bills

HOME OWNER GRANT ACT

Hon. Mr. Vander Zalm presented a message from His Honour the Lieutenant-Governor: a bill intituled Home Owner Grant Act.

Bill 31 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

HON. MR. SMITH: Mr. Speaker, I have the honour to present a report of the Special Committee on Privileges appointed pursuant to the order of this House on March 18, 1980.

This is indeed an honour, Mr. Speaker, because of the unanimity of the report and the positive work of every member of this committee regardless of which side of the House he sat on. I move that the report be read and received.

Motion approved.

CLERK OF THE HOUSE: Report, Legislative Committee Room, June 6, 1980.

"Mr. Speaker, your Special Committee on Privileges appointed Tuesday, March 18, 1980, pursuant to a resolution of the House of March 6, 1980, begs leave to report as follows:

"The term of reference of the committee was to consider the matter of the interception of a member's communications, brought to the attention of the House on March 3, 1980. The committee held seven meetings and heard evidence from Mr. Ian Horne, Q.C., Clerk of the Legislative Assembly of British Columbia and Mr. Joseph Maingot, Q. C., Law Clerk and Parliamentary Counsel to the House of Commons, Ottawa. In addition to the evidence of the two witnesses aforesaid, your committee considered the Legislative Assembly Privileges Act, the invasion-of-privacy provisions of the Criminal Code, general procedures followed for obtaining intercepts and details of the intercepts complained of, including location and scope of intercepts. The committee also considered and examined the range and scope of matters which were discussed by the member in question during the relevant time period.

"It is accepted by the committee that the authorizations and renewals to intercept communications were obtained in accordance with the provisions of the Criminal Code. The intercepts in question were sought, obtained and implemented by the Royal Canadian Mounted Police. The RCMP and the Department of Justice gave full cooperation to the committee by supplying committee counsel with all information requested by the Chairman and members of the committee. The listening devices monitored telephone calls from the member's office in the legislative precincts, his constituency office and home for a period of approximately one year, and the Legislative Assembly was sitting for approximately nine months of the year in question,

"The committee finds that intercepts were placed on the member's phones in his legislative office without a physical entry to the member's office by the RCMP. The committee finds that matters intimately involved with the member's function in the Legislature were discussed on the phone during the period the intercepts were in place. On approximately 1,700 of the intercepted calls, the member's voice was identified by the RCMP.

"Findings and formal recommendations:

"After considering all the evidence, and in particular the extensive evidence provided to this committee on the law of privilege and contempt by Mr. Horne and Mr. Maingot. and considering the nature of privilege which the member holds in trust for the public, it is the unanimous opinion of the committee that the described actions of the Royal Canadian Mounted Police constitute a breach of privilege and a contempt of this House.

[ Page 2850 ]

"This finding relates to the interception of a member's communications from his office telephones within the legislative precincts and the telephones in his constituency office in the period of January 13, 1977, to and including September 27, 1977, and for the period October 19 to and including October 21, 1977, being the dates on which this Legislative Assembly was sitting.

"Your committee further recommends that no action be taken against the RCMP in this instance, as there is no evidence before your committee upon which they could conclude the police were aware that their actions might constitute a breach of privilege or a contempt of the Legislature.

"Your committee wishes to further add that they have made no specific finding in relation to the interception of the member's communications while the House is not sitting or the intercept of communications to and from the member's home. The committee, however, emphasizes the 12-month role of the modern legislator, and further emphasizes that his legislative and constituency duties extend beyond the session, and in many instances into his home. This committee therefore wishes to go on record, in the strongest possible terms, as disapproving of these practices, particularly bearing in mind the right of the public to have free and uninhibited access to their elected members.

"Your committee members were unanimous in their opinion that fear of intercepts such as the one examined by your committee obstructed members in the performance of their legislative duties. The committee accepts Mr. Maingot's evidence that the test of obstruction is a subjective test.

"Your committee emphasizes that members of this Legislature cannot receive special immunity from an investigation where there is evidence that the member is directly implicated in the commission of a crime. In this case there was no evidence that the member was under investigation or suspected of criminal activity.

"In conclusion, your committee restates that the beneficiary of the law of privilege is the constituent and the public at large. A member does not have special status. The member holds his privilege in trust for those who have elected him, and privilege exists only to the extent it is interwoven with his role as a legislator.

"Your committee believes that parliamentary democracies flourish only when member and constituent can communicate freely, openly and candidly without having the spectre of interception, such as the one recently examined by your committee, interfering with such communications.

"All of which is respectfully submitted. Brian R.D. Smith, MLA, Chairman; Stuart M. Leggatt, MLA, Secretary. "

HON. MR. SMITH: Mr. Speaker, I ask leave to move that the rules be suspended and the report adopted, and adjourn debate on this motion.

Leave granted.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:55 p.m.