[ Page 3967 ]

CONTENTS

Routine Proceedings

Bikeways Development Act (Bill M215). Mr. Barber.

Introduction and first reading –– 3967

Committee of Supply; Ministry of Attorney-General estimates. (Hon. Mr. Williams)

On vote 26: corrections –– 3967

Mrs. Dailly

Mr. Nicolson

Mr. Lorimer

Mr. Hanson

On vote 34: Law Reform Commission –– 3971

Mr. Hanson

On vote 37: fire commission

Mrs. Wallace

Votes 37 to 43 approved –– 3972

Committee of Supply; Ministry of Energy, Mines and Petroleum Resources estimates. (Hon. Mr. McClelland)

On vote 64: minister's office –– 3972

Mr. D'Arcy

Mr. King

Mr. Hanson

On vote 66: finance and administration branch –– 3981

Mr. Barrett

Votes 66 to 74 approved –– 3981

Pension (Public Service) Amendment Act, 1980 (Bill 43). Second reading.

Mr. Howard –– 3981

Hon. Mr. Wolfe –– 3982

Pension (Teachers) Amendment Act, 1980 (Bill 29). Second reading.

Hon. Mr. Wolfe –– 3982

Mr. Howard –– 3984

Ministerial Statement

Financial Administration Act.

Hon. Mr. Curtis –– 3985

Routine Proceedings

Tabling Documents

Travel Assurance Board report for the year ending March 31, 1980.

Hon. Mr. Nielsen –– 3986

Trade Practices Act annual report, 1979.

Hon. Mr. Nielsen –– 3986

Appendix –– 3986

FRIDAY, AUGUST 15, 1980

The House met at 10 a.m.

[Mr. Davidson in the chair.]

Prayers.

MR. KING: Mr. Speaker, with us in the gallery today, visiting from Salmon Arm, is Mr. Dave Hadley. I would ask the House to extend a warm welcome to him.

MR. RITCHIE: Mr. Speaker, I am always proud to introduce to the Legislature friends of mine from Central Fraser Valley, and today is no exception. We have with us today Joyce and Len Greer of Abbotsford. Joyce is secretary to our Member of Parliament for Fraser Valley East, Alex Patterson. Would the House please welcome Joyce and Len.

MS. BROWN: Mr. Speaker, I wonder if the House would join me in bidding welcome to Mr. John Bowman, who is visiting us from Ontario.

Hon. Mr. Mair tabled answers to questions on the order paper.

Introduction of Bills

BIKEWAYS DEVELOPMENT ACT

On a motion by Mr. Barber, Bill M215, Bikeways Development Act, 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.

Orders of the Day

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

ESTIMATES: MINISTRY OF
ATTORNEY-GENERAL

(continued)

Vote 22: administration and support, $4,538,565 — approved.

Vote 23: court services, $34,558,563 — approved.

Vote 24: criminal justice division, $9,139,726 — approved.

Vote 25: police services, $46,035,075 — approved.

On vote 26: corrections, $63,679,321.

MRS. DAILLY: Mr. Chairman, under this vote we have the expenditures for the Lakeside Correctional Centre, which, for the information perhaps of some of the members of the House, formerly was called the women's section of Oakalla. I just have a few brief comments on this vote and a few specific questions to the Attorney-General. We're all aware, of course, of the considerable amount of publicity that was focused on the Lakeside Correctional Centre during the last year. We were aware that the Proudfoot report was commissioned, which I think was a fairly good report, through the Attorney-General's department. I think the main point that I want to bring to the attention of the Attorney-General is that we are very pleased that there was apparently a fairly extensive report by Justice Proudfoot on the problems in the women's section of Oakalla, but I think the thing that concerns me and many others is what has happened with the recommendations since. In the past the Attorney-General was quite satisfied — I may be open for correction here — that many of the recommendations were being fulfilled. I think that's about all I've heard the Attorney-General comment on it.

My question to him is: how do you know what recommendations have taken place at the women's section 1n Oakalla? Are you just getting advice from the people who work within the institution? Frankly, without any disrespect for the people who operate and manage the Oakalla women's section, I think that we would all agree that when there is massive public investigation of an institution and recommendations are suggested, the public has a right to know if those recommendations have been fulfilled. I'm asking the Attorney-General if he is just accepting internal memos which state that everything is fine there now, or has he actually monitored through outside agencies what is going on in that section of Oakalla?

HON. MR. GARDOM: That's last year's speech.

MRS. DAILLY: No, not really, because it's still there, former Attorney-General. I believe Proudfoot recommended a monitoring committee, and I think there were several very distinguished women in B.C. who were willing to serve on that committee to see if the recommendations were being implemented. Was that committee ever set up? To my knowledge it never was. Therefore I want to ask him why not.

The basic thrust of my questions is that if things are much better at Oakalla, we're all very pleased to hear it, but really how do we know unless you have set up a monitoring committee made up of people who are not just involved very directly with the institution?

Secondly, I understand that a considerable amount of money has been spent on the women's section of Oakalla. My information tells me that it's over a million dollars for renovations. I think I asked the former Attorney-General the same question last year. The money is being spent on Lakeside Correctional Centre, the women's section of Oakalla. I'd like to ask the Attorney-General if this means that the millions of dollars spent on that section is intended to make Lakeside Correctional Centre permanent. Is it going to stay there permanently? If it is not going to be there in the future, I really want to ask the Attorney-General why so much of the taxpayers' money is being spent on an institution which is apparently supposed to be temporary.

Mr. Chairman, at this time those are the two basic questions on Lakeside Correctional that I'd like to pose to the Attorney-General.

HON. MR. WILLIAMS: I thank the member for Burnaby North for raising this matter. It gives me an opportunity to say that since the report that was given many months ago with respect to the implementation of those matters — the Proudfoot report — the recommendations with regard to the physical plant have been completed; the recommendations

[ Page 3968 ]

with regard to program upgrading and division of teachers has been completed; the new library is in place; the new visiting areas have been developed. We have indications from the Elizabeth Fry Society expressing general approval with respect to the changes that have been implemented.

The question of the citizens' committee. My colleague and my predecessor, the previous Attorney-General, as you know, rejected the concept of a watchdog citizens' committee. But we have in place a citizens' committee which is advisory to the director of Lakeside and which concerns itself with necessary redevelopment of the facilities required there.

The point was raised about whether the facility is going to be permanent, and therefore whether we can justify the continuing expenditures of moneys. We propose to have a new women's facility. Whether it will be on that site or at some other location is a question we have not been able to resolve at this time.

In the provision of new women's facilities I had meetings with the Solicitor General of Canada to discuss with him the plans that the penitentiary service might have in phasing out the women's facility at Kingston. We are concerned not only that women from British Columbia who become inmates of the institutions in the provincial sphere be in British Columbia, but also that those from British Columbia who go to Kingston be brought back here. I met with him when he was here about two and a half months ago, together with the commissioner of corrections and his staff. We made strong proposals for the federal government to become involved in the construction of a new women's institution with us, so that we would be able to provide facilities in the same institution for women who are sentenced to a provincial or a federal institution — separated, but a shared capital and operating expense arrangement. This is in line with arrangements which are being developed between the federal government and the province of Alberta. I'm pleased to say that just in the last week I've had a response from Mr. Kaplan, saying that his officials are prepared to discuss with us and to cooperate in the construction of a new women's facility in British Columbia, so that when they phase out Kingston there will be modern facilities here.

Why are we spending the money on Lakeside? Unfortunately, in the development of institutions such as this the time-lag in planning and development is about five years. I am concerned that the time is so long, but it appears that from the time you say go until all the designs can be done and construction is over, about five years is expended. This is not helped by the fact that we will be discussing with the federal government their needs as well as ours. Therefore we wish to ensure that the facilities we have at Lakeside Correctional Centre are kept up, and that we don't fall into the circumstances we've experienced in the past, whereby, due to inadequate facilities, the inmates are distressed and create circumstances with which we have to deal. Therefore we will continue, during the period required to plan, design and construct the new facility, to maintain the facilities at Lakeside at the highest level we can.

MRS. DAILLY: Mr. Chairman, I thank the Attorney-General for that explanation. There is just one further point I want to make. There is confusion between a monitoring committee and a citizens' advisory committee. You see, the citizens' advisory committee is not what I was talking about, Mr. Attorney-General. I was talking about the recommendation for a monitoring committee to see if the recommendations of the Proudfoot report have truly been implemented. I would just hope that you would give it consideration. I believe there are a number of distinguished women in B.C. — politicians and non-politicians — who have offered to serve on it, who would be willing to go in and assist management to see if the recommendations of the Proudfoot report have been implemented. I wonder if the Attorney-General would give consideration to setting up this monitoring committee.

I was interested in his remarks about the phasing out of and the movement from the Kingston federal penitentiary to one unit in B.C. I just wanted to ask the Attorney-General if he is philosophically in favour of that phasing out. Does that mean the provincial government has a cost-sharing process with the federal government? Is that how it works? I don't quite understand how the setup would finally end up.

HON. MR. WILLIAMS: Philosophically, it is our position in the ministry that no distinction should be made in the facilities required for a person who is sentenced to a period of imprisonment, whether he is sentenced for a period of two years or less, or two years or more. The arrangement that was discussed with the federal government is that they will share in the capital cost of the facilities, which will meet our needs and theirs, and that the matter of operation will be something which will be handled on a contract basis under our service.

MR. NICOLSON: At this time in the deliberations it gives me great pleasure to introduce a member of this House who has made a career of the Oakalla Prison Farm institution and its repatriation as a useful, liveable space to the people of Burnaby. I give you the member for Burnaby-Willingdon.

MR. LORIMER: I want to thank the member for Nelson Creston for the very kind introduction.

I want to say that I have spoken many times about Oakalla. I guess there have been about seven or eight talks over the years on Oakalla Prison Farm, and I would merely refer the Attorney-General to my past statements. Over the years I have had a number of occasions to visit Oakalla and discuss the problems of Oakalla with directors, the warden and so on. I had a long visit with them a few months back.

As everyone knows, when Oakalla was built, it was built out in the country in the center of the bushland. Now we find the antiquated prison in the centre of a large metropolitan area and in the centre of my riding. Over the years, I might say, there has been a phasing out. During our term we had the farmlands transferred out of the prison section, but there is still the prison there. And that is what we want to talk about this morning.

It would appear to me from the advice I received that no matter what you do in the present facility you're still not going to have a modern penal institution. So I think the question of making a decision to phase out Oakalla completely has to be made. The sooner it is made the better, because there is no way, I am told, that a proper prison establishment can be now built from the ruins of Oakalla. That is also the case in the women's section. So I might say that Oakalla has been very kind to me in a political sense in that it's the major issue in that particular riding, and as long as it stays there it should certainly help my stay here. I certainly think — and I'm sure the Attorney-General is aware of Oakalla — some effort should be made to close out Oakalla — phase it out over a period of one or two years.

[ Page 3969 ]

One of the previous Social Credit Attorneys-General, Mr. Bonner, promised the removal of Oakalla around 1966, and it's been a good promise over the years. As I say, I won't spend any time on it this morning. If you want to have further information, just refer to my previous speeches on Oakalla. Let's get rid of it.

HON. MR. WILLIAMS: I want to thank the member for his comments. As he is aware, the government has already transferred 158 acres of that site to the municipality. The phasing out of Oakalla has been before the government for decades. The tenders will be called for the new 150-bed remand centre for men in the first week of September, which will allow us to move towards the reduction of the population at Oakalla, which is necessary when one is considering the concept of new facilities, wherever they may be. Currently there are 48 women and 480 men in the facilities at Oakalla. The capacity is much greater than that. With the new remand centre in place we'll be able to reduce that by 150 and it will enable us to take the consideration necessary to find a new location and build the new facilities — maybe in the same place.

MR. LORIMER: I didn't quite hear the Attorney-General's opening remarks. Did he state that he had transferred the properties or given the farmlands to the municipality of Burnaby? Because if that is what he said I would like to carry on further on this subject.

HON. MR. WILLIAMS: The acreage to which I refer was transferred to the municipality early in 1979. I'm sure the member is aware of that. What the municipality proposes to do with that is up to them.

MR. LORIMER: I'll go through the history of this removal of the farmland. In early 1975 there was an agreement to lease, which was signed by myself, the mayor of the municipality of Burnaby and Mr. Hartley of the Department of Public Works, agreeing to lease the property for 99 years at the fee of $1. The agreement to lease was that the lease would be executed within a year. The reason for the delay was the fact that it was agreed that there should be a second fence built to separate the remaining part of the prison from the land that was to be used for a park. Also, there was still some farm stock in Oakalla which had to be sold, disposed of or transferred in some manner in order that the lands could then be used as parkland. The agreement was that the municipality could enter onto the lands, use the lands to prepare them for parkland, but they wouldn't be open to the public for a period of a year. In the intervening time there was an election in which the Social Credit Party was elected. The Social Credit government then refused to execute or comply with the terms of the lease, and as a result it wasn't until election day in 1979 that the lease was actually signed. It was signed on election day in 1979.

The whole thrust — the whole operation of the transferring of this land — was done through the efforts of the New Democratic Party at that particular period. I will not accept the view that, because the final signing of the lease took place in 1979, the action was taken by anyone else other than the New Democratic Party in the agreements that were reached in 1975.

MR. HANSON: I, too, would like to reiterate some of the comments I made during the last session under this particular vote. It is a concern I have regarding the disproportionate number of Indian people who are in prison in British Columbia.

As the minister knows, a very large percentage of the female inmate population is native people. The number increases as you move out of the lower mainland. I would imagine the figures, for example, for Prince George, to be rather high. I don't have the report in front of me at the moment, but I have followed this particular issue now for some time.

This Attorney-General is in the position of having the responsibility for Indian people in this province, and, at the same time, having the responsibility for the correctional institutions. My question to him is: in his term as Attorney-General — and I know there are native court workers, and I know he has people...? He has a Mr. Exell in his department, who has some function as a liaison with Indian people. I question the effectiveness of that liaison. But I would like to ask the Attorney-General: in your time as the Attorney-General, what action have you taken to address the problem of the disproportionate number of native people incarcerated in British Columbia?

HON. MR. WILLIAMS: Of course, the member will be aware that the number of persons who are inmates of institutions directly reflects the number of persons who find themselves offending the law. I don't have the statistics with me in this book this morning, but I'll be happy to provide them to the member.

The general inmate population of our correctional centres is decreasing. The proportion of those inmates who are native Indians is also decreasing. As a matter of fact, compared with other jurisdictions the proportion of native Indian persons incarcerated is less than in other jurisdictions in Canada.

I'm not suggesting, by any means, that we've reached the limit of what can be done. In corrections we are moving more and more to providing facilities in local communities which will make it unnecessary for persons to be transferred to major institutions for the period that their sentence provides. These are being expanded, particularly in the outlying regions of the province, and therefore would be more accessible to members of the native Indian population.

The problem of native Indians in conflict with the law is not, however, I think, a matter for corrections. It is a much larger problem which needs to be addressed throughout this country, because this is one of the aspects of the native Indians' position in Canada which must give all of us concern: the extent to which they find themselves in circumstances where they are in conflict with the law.

MR. HANSON: Mr. Chairman, I found it very difficult to accept the opening remarks of that minister when he pointed out that the number of people incarcerated is in direct proportion to those who violate the law. The point I'm making, Mr. Chairman, is that when you have a population that represents perhaps less than 5 percent of the total population and you look at the female inmate population which is approaching 40 percent, there is a sociological problem, there is a cultural problem. There is a culture of poverty there, and I'm telling this minister it's not good enough to say: "It goes beyond my ministry." That minister is responsible, at the provincial level, for Indian people in this province. I'm asking him what representation he has made to

[ Page 3970 ]

the Minister of Health (Hon. Mr. Mair), the Minister of Human Resources (Hon. Mrs. McCarthy), or the other ministers, advocating on behalf of Indian people who in many instances are in jail because of language problems, because of a culture of poverty. It just so happens that his ministry is the interface institution between Indian people and the larger community.

Now that, to me, is not acceptable; there have to be progressive, innovative, creative approaches — sitting down with Indian people and trying to find out the reasons why and what actions can be taken to keep Indian people out of jail who are in there unnecessarily. It is a pointless, circuitous route. I'm saying that it is unnecessary. Many Indian people are there because they are Indian people and because their language may be Carrier or it may be Chilcotin — it may be another language. They don't understand their rights; they don't understand that they would have a better opportunity of staying out of jail if they went directly to a lawyer.

Often there are not enough native court workers; there are not enough facilities and programs directly related to this specific problem. It's a high-cost aspect of our correction system. It costs a lot of money to incarcerate people for long periods of time, and I'm saying that money would be better spent giving people opportunities to lead a healthy and happy life outside of a corrections institution, rather than pouring money into jails and the kinds of institutions that my colleague from Burnaby is trying to get rid of. I would like some specific answers on what representation you've made to other ministers to get them to address this problem.

HON. MR. WILLIAMS: Mr. Speaker, with respect to the general condition of the native Indian population, I wish to assure the member that with my colleagues, the Minister of Health, the Minister of Human Resources and the Minister of Education (Hon. Mr. Smith), I continue to press to ensure that the programs of government, which are available throughout this province to all citizens, are also available specifically to the native Indian people. This is a slow process, and one which requires the cooperation of the Indian people and of the national government. This is the direction in which we're moving in this regard.

Unfortunately, the national government sometimes deems it their responsibility to move in their own direction without consultation or cooperation with the provincial government. I think this is most unfortunate, and in my discussions with the federal minister I've urged him to move in directions which involve us directly in those services which we can provide and that he can provide. We think that the delivery of services can be dealt with more effectively at the provincial level than it can be through the federal agency. There is a continuing difference of opinion with respect to that.

Those persons who come in direct conflict with the law are served — and served extremely well — by the Native Courtworkers and Counselling Association, which, I'm sure the member knows, has been subjected to a major reorganization inside the last 12 to 18 months. This is funded through the Legal Services Society and I will be meeting with the Legal Services Society and the Native Courtworkers and Counselling Association in the next few weeks to discuss with them the level of the program which is being conducted. In addition to the Native Courtworkers and Counselling Association, the Legal Services Society has its own native Indian program. That program is one which, I believe, must be reviewed to determine whether or not it should not be entirely taken over by the NCCA.

MR. HANSON: I have another question of the minister, Mr. Chairman, and that relates to Wilkinson Road jail. Wilkinson Road jail is a provincial jail for people who are serving terms of under two years. My understanding is that many "offenders" for more serious crimes are remanded there awaiting trial. On numerous occasions, concerns have come to my attention that people with relatively minor offences — short-duration offences — are being subjected to other people charged with much more serious crimes and long-term offenders. Now that's a concern of mine. I would like the minister to respond to me and give me his thoughts on whether that, in his judgment, is an appropriate situation.

Secondly, at one time there were activities at Wilkinson Road jail; there were activities outside of the institution that people with under two-year terms could involve themselves in; there were farming programs; there were trades programs. These are all gone now. So people just cool their heels in a cell, eat their meals and walk around a recreation area. I mean, is that the idea of rehabilitative, reformative approaches to corrections? I mean, is this what you call corrections, or is this just incarceration? I would like the minister to give me some answers on the kinds of programs he envisages for Wilkinson Road jail.

HON. MR. WILLIAMS: First of all, with respect to the question of persons under sentence and persons in remand at Wilkinson Road, they are maintained separately. While they're in the same facility there isn't the mingling of persons sentenced to terms of less than two years and those who may be under remand for more serious crimes.

The program of corrections is one of rehabilitation, and those sentenced persons who are at Wilkinson Road are transferred as quickly as possible to two camp systems which we operate on Vancouver Island in order that they are not just left in Wilkinson Road without the facilities to engage them in a productive effort, which hopefully will serve them when they return to the community.

Wilkinson Road is a facility which must be replaced. It ranks equally, in my mind, with the need to move Oakalla. We will be doing so with both of them this next year.

Vote 26 approved.

Vote 27: Legal Services Society, $11 715,293 — approved.

Vote 28: justice development fund, $1,022,486 — approved.

Vote 29: legal services to government, $4,826,766 — approved.

Vote 30: superior and county judiciary, $1,342,993 — approved.

Vote 31: provincial judiciary, $6,009,712 — approved.

Vote 32: coroners, $2,557,118 — approved.

Vote 33: British Columbia parole board, $382,506 approved.

[ Page 3971 ]

On vote 34: Law Reform Commission, $329,314.

MR. HANSON: I have a question of the minister. Could he tell me how many native people are on the Law Reform Commission?

HON. MR. WILLIAMS: There are no native people on the Law Reform Commission, Mr. Member. If you don't have the names of the people, I'd be happy to provide them to you. They're all senior lawyers in the province, both practising at the bar and at universities, under the distinguished leadership of their new chairman. The staff are also legally trained people.

MR. HANSON: Do you not think that the consumers of the so-called corrections justice system should have a place on that Law Reform Commission? Following from my earlier remarks regarding the disproportionate number of native people incarcerated and native people coming in contact with the law, would it not be appropriate to appoint a number of native people whose names were put forward by the Indian organizations to assist you in finding the real reasons why this is occurring and the remedial steps and corrective action that could be taken to help native people and get them out of jails in British Columbia? Would you not consider appointing a number of people?

HON. MR. WILLIAMS: I think the member is confused as to the role of the Law Reform Commission. It does not deal with the matters which the member would wish to have addressed. They look far into the future with respect to changes in the laws which may be required because of changing circumstances. They deal with very specific project tasks, and it's not the kind of organization to which the member is addressing his mind.

I think perhaps he may be concerned about membership on the Legal Services Society, which is in the business of delivering legal services. I'd like to draw the members' attention to the fact that one of the directors of the Legal Services Society is native Indian, Alfred Scow.

Vote 34 approved.

Vote 35: Criminal Injuries Compensation Act, $1,918,200 — approved.

Vote 36: public trustee, $1,820,944 — approved.

On vote 37: fire commission, $1,613,155.

MRS. WALLACE: I would like to ask a few questions relative to the volunteer firemen and firewomen who work in the province. I'm sure the minister is aware that there are some difficulties in getting funding for these voluntary people. I'm wondering whether or not he has considered the possibility of including something in his budget to provide a little more assistance, not in the way of manpower costs but in the costs of equipment, which is getting more and more expensive all the time, and in the need for buildings and those sorts of things.

Another point which I would like to raise with him — I have raised it before — is the difficulties that occur in rural areas in attempting to get a burning permit, now that the volunteer firemen have been given this responsibility rather than the Ministry of Forests. Those people have to earn a living, and they are giving of their time voluntarily as far as firefighting is concerned, but when it comes to trying to get a permit to do some burning, it is almost impossible to contact them because you may or may not know who actually serves on that volunteer fire department. The only contact you have is the local firehall, which is unmanned. They come in maybe once a week to have a fire drill, but unless you are familiar with just when they are going to be there and what they are going to be doing, it is almost impossible to contact them to get a burning permit.

When it comes to burning you time it with the weather; you want to go just before a heavy rain, perhaps, so you can get the particular piece of property cleared and burned; you have your piles stacked and ready to go. If you can't make that contact it means the loss of a whole year. It is a real problem in the rural area for people who are trying to get burning permits, apart from the fact that it's putting an extra chore on those people who are already volunteering a great deal of their time free gratis as a community service. It just seems to me to put that extra load on them.

On top of that, it just isn't working, because it is so impossible to try to locate one of these people and get him to issue you a burning permit. On top of that, once they issue that permit, if they are really doing the job, they have to come out and check the site, they have to be aware of when you are going to burn, and they have to be prepared to come and do something about it if it gets out of hand. It is a tremendously heavy responsibility to put on a volunteer group.

I think the Attorney-General should talk to his colleague, the Minister of Forests (Hon. Mr. Waterland), about taking that responsibility over again because it worked much better. Those people are paid employees of the government who have an opportunity to do it.

The other point that I wanted to raise is the problem that we've had in the issuing of a prospectus which has indicated that there is fire protection from a volunteer fire department. We've had a big problem with this in my constituency. It's one particular company. It was a misunderstanding, I know. I've raised this before. I've had a lot of correspondence — and a lot of cooperation, I would say — from the Attorney-General's office in attempting to resolve this. But we still have this situation.

I think there are about six people involved in the first section of this subdivision who were told that they had fire protection. About six of the lots went over the boundary of any volunteer fire department. Because this was pointed out, in the next section of the development the prospectus was changed to say that there was no fire protection. So those people bought the lots knowing that there was no fire protection. However, this leaves approximately six people in there who were getting insurance based on the fact that there was fire protection. Now that they have found that there isn't, it has caused a terrific increase — about $600 a year in some instances — in their costs of insurance.

The only out would be some kind of class action against the company to try to recover this over the next 10 or 20 years — whatever it might be estimated that that extra cost would be — with not too great a chance of winning the court case because the realtor could claim lack of knowledge. I think they would be able to prove that it was very difficult to establish just where those boundaries went.

What I am suggesting to the minister is that he take some kind of action to ensure that this doesn't happen in another

[ Page 3972 ]

instance, that boundaries are firmly and clearly defined, and that he set up some kind of liaison. Any realtor who is advertising that fire protection is provided by a volunteer fire department must check with his ministry to ensure that that is in fact the case.

HON. MR. WILLIAMS: Mr. Chairman, with respect to the prospectus requirements for subdivisions, the point that the member makes is well taken. The whole process by which such prospectus material is prepared and filed is under review by the Ministry of Consumer and Corporate Affairs. We hope to have changes before this House in 1981 which I think will accommodate the concerns that the member raises. In this matter there will be the requirement from the fire commissioner's office that they make sure that these matters are clearly spelled out.

On the question of fire permits, I was aware that there was a particular problem in the member's area. It was my information that the matter had been resolved. If it has not been, then I would be very pleased if the member would let me know. I'll take it up with the fire commissioner and with the Minister Forests, because I certainly agree that the citizen should have a place where he can go and get his permit from some official who's there on the job on a regular daily basis, it not being wise to chase after someone who happens to be a volunteer. If the procedures that were put in place, as the member has raised before, are not working, would she please let me know and we'll see that they are. What happens if you don't facilitate the issuance of permits at the appropriate time is that some people then will say: "Well, I'll go ahead and burn without a permit." Then you've got, perhaps, a more serious problem, and that's what we want to avoid.

MRS. WALLACE: What about financial assistance for the volunteer firemen?

HON. MR. WILLIAMS: The question of financial assistance for capital works, with regard to volunteer fire service, comes under the Ministry of Municipal Affairs. My budget does not include that. If the member will look at the description of the funding for the fire commissioner, it deals with investigations and inquiries into fires, the conditions under which fires occur, the study of fire prevention and fire suppression, and the provision of advisory services. We aren't funded in my budget for capital works.

MR. HANSON: I rise on a point of order, Mr. Chairman. I wish to correct the response from the Attorney-General regarding the Law Reform Commission. The Law Reform Commission would have jurisdiction over sentencing policy, which would have a very great effect over native people in terms of the cultural dimension of the problem. I think that he could take it under advisement and could, perhaps, make the necessary appointments to fill that vacuum.

MR. CHAIRMAN: A point of order is not required, hon. member. You simply took your place in debate, which was quite in order.

Vote 37 approved.

Vote 38: British Columbia Racing Commission, $1,037,410 — approved.

Vote 39: film classification branch, $143,795 — approved.

Vote 40: land registry program, $7,110,955 — approved.

Vote 41: Order in Council Patients' Review Board, $102,350 — approved.

Vote 42: building occupancy charges, $37,903,000 — approved.

Vote 43: computer and consulting charges, $1,750,000 — approved.

HON. MR. GARDOM: Mr. Chairman, I call vote 64. I would say, Mr. Chairman, there is, of course, Bill 42 on the order paper, the Utilities Commission Act. We are aware that there will be considerable policy discussion during that debate.

ESTIMATES: MINISTRY OF ENERGY,
MINES AND PETROLEUM RESOURCES

On vote 64: minister's office, $153,841.

HON. MR. McCLELLAND: It's my honour to be able to bring forward the debate on these estimates for the budget of the ministry for the first time — for me at least, having been appointed to this ministry last winter. Mr. Chairman, I want to say first of all that I'd like to pay some tribute to members of the ministry who have had some difficult and anxious times over the last few months with major reorganization of the ministry and the major policy statement regarding energy, the preparation of which took up a good degree of time by those members of the ministry, many of whom will be joining me in a short time on the floor of the House. I just want them to know that all of the employees of the ministry have the thanks and appreciation of the people of British Columbia for the work they do on their behalf. It goes without saying that they also have my thanks.

I'm going to take a few minutes this morning, because it is the first chance I've had to talk about energy in this House in a major way. I want to describe some of the government's initiatives in the energy sector. If the House will bear with me I will take 15 or 20 minutes before we open the estimates up to general review.

I want also to outline some of the government policy initiatives and ministry programs which have been put in place to sustain the current levels of activity and productivity in all of those vital areas of concern to this province in the years to come.

We all know that mining is, and always has been, extremely crucial to the economic prosperity of British Columbia. Through the years, from the time of the Kootenay mining camps, the Fraser and Cariboo gold fields, the Anyox and Britannia Mines, and a host of other successful ventures, the health of the mining industry has been directly reflected in the health of the British Columbia economy.

It has worked the other way round too, Mr. Chairman. During the early seventies, for instance, mining in British Columbia went into severe decline and critical sectors of the economy followed suit. The two are tied together and cannot

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be divorced. In 1972 the mining industry was booming. Almost overnight, however, things took a turn for the worse. Some of the symptoms were that the number of new mineral claims staked annually went from 79,000 in 1972 to 35,000, then to 17,000 in 1974 and to a low of 11,000 in 1975. Exploration money spent in B.C. went from $38 million to $37 million in 1973, then to $25 million and $22 million in succeeding years — this at a time of double-digit inflation. These declines had far-reaching effects on the province as a whole. The lack of exploration expenditures meant the loss of jobs for people and the loss of revenues for the province. With less exploration, of course, fewer mines were found, and still fewer were developed.

It's taken some time to reverse that downward trend and to earn back the confidence of the British Columbia mining interests. But exploration and production figures since 1975 show that the industry has become healthy again. From that low of 11,000 that I mentioned earlier, the number of new mineral claims rose to more than 55,000 last year. Exploration dollars show a similar rise, recovering their former level. Mineral production figures of $2.8 billion have been estimated for 1979. My ministry is predicting that by 1982 new production will contribute an additional $2 billion: production from newly announced mines like the Carolin; from rejuvenated mines such as Kitsault and Granduc; from mines which were known but uneconomic in 1975, such as Goldstream, Highmont, and Sam Goosly; from extensions of producing mines, like the Lornex mine doubling its production, and the extension of operations at Similkameen's Ingerbell-Copper Mountain mine; not to mention possible producers such as the Adanac, the Dolly Varden, the huge Valley copper mine, and a host of others.

All this, Mr. Chairman, is because the industry decided that the economics were right and that British Columbia was again a good place to spend exploration dollars and a good place to operate a mine. The net result for us as British Columbians is a continuing influx of investment capital, new ventures, expanding exploration and more jobs. There's more. It means new and expanding communities meeting the needs of the mine personnel and their families for housing, service and recreation and generating their own revenues. It means new secondary manufacturing, along with increased export of refined metals, broadening the province's economic base. It means increased revenues to the people of British Columbia through the government so that we can then return those revenues to the owners of the resources in the form of improved social services, better highways, improved educational facilities and better health care. In fact, it means a better standard of living. It all adds up to increased prosperity and continuing security for the people of this province in the years to come.

The petroleum and natural gas industry of B.C. also makes a significant and growing contribution to the economic health of the province. Activity in exploration for oil and gas has followed much the same pattern as mining in recent years. Total wells drilled went from a high of 225 in 1972 to 178 in 1973 and 148 in 1974, the year of OPEC, to a low of 82 in 1975. Mr. Chairman, you don't find oil or gas unless you drill for it. Lease revenues, another indicator of industrial activity in this sector, went from $21 million to $13 million over that same period. Not even the combined efforts of OPEC and inflation could offset the decline caused by the policies of the government of the day. Fortunately, though, the trend in oil and gas exploration too has been reversed since 1975. Activity in the industry reached record levels last year. For the fourth year in a row, drilling operations exceeded the total for the preceding year. There were 82 wells drilled in 1975, some 175 in 1976, some 310 in 1977, then 393 in 1978 and 395 in 1979. In 1979 we reached what appears to be a peak in annual operations potential for a number of reasons; the most important probably is the Canada-wide shortage of drilling rigs and the difficulty of gaining year-round access to parts of B.C.'s production areas. The government is working to correct that deficiency.

[Mr. Davidson in the chair.]

However, the 56 percent success rate of drilling ventures in our province continues to spur exploration. Oil production for 1979 was up 7 percent, and gas production was up 14 percent over 1978. The total wellhead value of oil and gas production during 1979 was $896 million, compared to just under $600 million the year before, The industry itself responded to that ongoing success by spending an estimated $800 million in this province in 1979 — a 25 percent increase over the previous year. Revenues to the people of this province from Crown reserve sales continued to increase from their low of $13 million in 1975 to a high last year of $191 million. Total revenue to the province from the petroleum and natural gas industry — not including corporate income tax — was $516 million, which was up $117 million from the year before.

So all in all, Mr. Chairman, the prognosis is very good for the mining, petroleum and natural gas industries. Mining, now B.C.'s second industry, will soon gain pre-eminence and provide the jobs, cash flow and revenues necessary for B.C.'s continuing prosperity and security. Petroleum resources also bring in vital revenues. In the first four months of this year bids on B.C. oil and gas rights are up more than 25 percent over the same period last year, with four more sales still to be held. Both the mining and petroleum industries supply, of course, premium fossil fuels, on which our province's energy security depends.

This last issue of energy security is our prime and most immediate concern. The figures I have just quoted to you on natural gas and oil replacement through exploration contain a warning which we cannot afford to ignore. Twice the amount of natural gas was added to the province's reserves as was taken out of production. However, only half as much B.C. oil was added to the stocks of reserves as was used up.

The health of our province, the development of our mineral wealth and consequent manufacturing, economic and export strength in the year 2000 depends very heavily on how we face up to the energy issues in the meantime. I want to turn just very briefly to a few descriptions of those issues.

We have an energy policy statement which is some four months old now and it's a framework upon which we can build for the future. Already we've taken a number of steps which will flush out that framework — positive steps which we hope will help us to put that security in place. The statement points out our strengths and weaknesses, and, as we've seen, our major weakness is oil. At present we bring in 75 percent of the oil we consume and we'll need to bring in proportionately more as our own small supply of oil is used up. The best answer to our oil dilemma is to cut down on our consumption and learn to rely instead on the energy strengths that we do have in our province.

The transportation industry and the private automobile

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account for a large part of B.C.'s oil consumption. Therefore we are taking steps and must continue to take steps to promote fuel efficiency in all sectors. We hope to set an example for fleet operators by down-sizing our own government fleet of automobiles. Crown corporations have been asked to follow suit. Big cars can no longer be a status symbol in this province.

For the general public we've gone through some successful educational programs. One is called Operation Tune-up. We've just published a booklet called "Fuel Economy and You." We feel that it's one of the best of its type produced here or anywhere else, and we hope the general public will take advantage of it.

Industry too consumes more of our precious oil and natural gas than the province can afford. The government, therefore, is encouraging industry to switch to cheaper, more plentiful fuels. In support of this policy, we've recently released a feasibility study on coal conversion at B.C.'s cement plants. Some plants still use oil and some use natural gas to power their operations. Coal conversion is a good possibility for those high-energy users and it is in fact actively taking place in other parts of this country, the Pacific Northwest and the world.

Clearly, then, coal is one of the ways of the future in powering industry. It's interesting that today in the northeastern United States, where ten years ago the whole cement industry and others as well switched over to oil because it was a cheaper and more plentiful fuel — at least that was the thought process that went on in those days — those same industries are now switching back to coal at great cost to them. A similar kind of situation is presently happening in Japan. British Columbia should benefit from those kinds of changes in corporate or governmental philosophy in other countries, because our export market will be well served because of them.

Not just the cement industry, of course, but many other industries in British Columbia have yet to explore the full possibilities of coal, wood waste, thermal coal and other energy alternatives. It's time they did, and we will help them as much as we can in providing incentives and encouragement to do that.

Energy conservation is one of our most important sources of energy. We cannot consider sources of energy without using conservation as one of them. And that must be for everybody — not just government, but individual and corporate citizens as well, who can help us to achieve that end. We all know that energy conservation is the issue on the tip of the world's tongue right now. It's a motherhood issue, because everybody recognizes that our resources are limited. But not everybody recognizes or realizes that we must start to act now. Not everybody knows how to go about energy conservation either. We ask: "What difference will my little contribution make? What can I do, if I should be doing anything?" Well, we'll try, through government and the Ministry of Energy, to provide some of the answers. What we have to do is to attempt to connect people's understanding of the "whys" of energy conservation with a set of "hows." If we can give the people that, then the "whys" and the "what can I do's" will come easily.

Last year our ministry sponsored a number of energy conservation programs, ranging from lectures with prominent speakers to a computer program display at the Pacific International Auto Show. Our energy bus program is being continued by the ministry and has already identified potential energy savings of $5 million dollars for its clients; that will continue as well. Our conservation strategy will have to extend right across the entire spectrum of B.C. society, so that the people of this province then become one of our major energy strengths.

We are also engaged in technological research through which we may realize more energy strengths in British Columbia. The Energy Development Agency, of which I am chairman and which has as its members as well the Minister of Industry and Small Business Development (Hon. Mr. Phillips) and the Minister of Universities, Science and Communications (Hon. Mr. McGeer), along with our deputies and some other technical people who are supportive of the agency, is currently looking into the liquefaction of coal, as well as the development of feasible alternatives to those traditional energy sources which we all know about. For instance, coal, wood wastes and biomass could be treated to produce gasohol or other gasoline additives. Natural gas liquids — at present only a portion of these liquids is removed in processing, and there's real merit in examining how we may make better use of our natural gas resource. Propane might be used to a greater extent among fleet operators, reducing our consumption of refined oil products. Ethane can be upgraded to plastics for export or local consumption. We're looking at natural gas in a major way, as an alternative to gasoline for automobiles.

The technology division of the ministry itself, outside of the Energy Development Fund Program, has also undertaken studies to assess the potential for increased co-generation of electricity and process heat at industrial operations in the province. They are now administering a pilot project to place solar hot water heating panels in a hundred British Columbia homes this year, a project which has met with tremendous public response.

Recently I presided at the start-up operations of the wind power generating station at Rocky Point, here on Vancouver Island.

We are also acting to strengthen our stock of traditional energy resources. It is government policy to encourage a further expansion of exploration activities for oil and natural gas, as well as to enhance a secondary and tertiary recovery from well-known fields through a favourable royalty structure.

We are also encouraging the coal industry to expand its activities. Active exploration in the northeast, as you all know, has been underway for some time, with companies establishing reserves and extending their exploration targets, assisted by studies undertaken by my ministry, the Ministry of Industry and Small Business Development, and others. The recent negotiations with Japan, and the negotiations which are presently underway regarding northeast coal, will lead to the further activity and development of our coal resources in this province, and will open a huge area of this province to further economic development and growth. In the southeast several new producers are anticipated in the near future as the Crowsnest coalfields continue to be developed and continue to find export markets and local markets for their commodities as well. Studies are now underway at Hat Creek, which is the thickest thermal coal seam in the world, with a view to developing an on-site thermal generating plant there.

All of these developments will benefit the province of British Columbia, but we recognize as well that no development takes place without cost. Part of the government's

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mandate then is to ensure that the benefits are worth the costs, and not just in terms of dollars and cents. In developing our coal, hydro and other natural resources we will ensure that we do not squander other less tangible resources such as the quality of life and the integrity of our environment. Therefore — and I don't want to reflect on a bill which is before the House, Mr. Chairman — an energy project review process will soon be in place to make sure that development is both necessary and desirable from all of those points of view.

The review process will present guidelines for expansion, not necessarily impediments to growth. As I have said, growth is essential to British Columbia's continuing prosperity — but not uncontrolled growth. An adequate supply of appropriate energy stocks — whether they be gas, coal or hydro — for people in all parts of our province, now and in the future, is the essence of the government's overriding goal of energy security.

Security of supply, then, is our chief and major concern. This is the reasoning, Mr. Chairman, behind the government's commitment to bring natural gas to Vancouver Island, so that the Islanders too may come to benefit from this energy strength. The government is all so aware of the special circumstances of weather and geography which affect a northern British Columbian's use of energy as well, and we are committed to establishing fair pricing policies and reliable supply networks to meet their energy needs as well. In fact, energy security has to be put in place on the basis of fairness and reasonableness of access to every British Columbian, regardless of where he or she might live.

Mr. Chairman, I would now take great pleasure in moving these estimates for my ministry forward. I'd be pleased to have the input of all members of the committee, because I know that we need their input to help us to achieve our goal of energy security for all citizens.

MR. D'ARCY: Mr. Chairman, I certainly welcome the minister's statements of various intents in the energy field in British Columbia. Unfortunately we on this side of the House have not seen too much evidence of the actual effect of many of those intentions. However, we will continue to take the minister's statements in good faith.

I wish to deal with some of the items the minister raised, as well as to throw a few things of my own into the hopper. First of all, Mr. Chairman, I want to deal with the minister's recent statement that the government has a commitment to bring natural gas to Vancouver Island. We've been hearing this from several governments over a period of years. In my discussions with two of the companies that are interested in bringing gas to Vancouver Island — Westcoast Transmission and B.C. Hydro — they have both indicated that they feel they may be looking at as long as a two-year approval process from the time the minister gets into place a streamlined modern two-stage structure, or whatever it is he's planning to put into effect under his proposed utilities bill.

Mr. Chairman, I would hope that the minister, when he's replying to my remarks, will tell us that is not so, that we're not looking at a further two-year lead time in the approval process, and that a decision not only in principle but on the details of a natural gas line to Vancouver Island and all of the servicing that it involves to the various communities — transmission lines on the Island and the servicing within the communities and to the industries involved — can take place with all possible and deliberate speed. I feel that it's been all too long that people on Vancouver Island have been deprived of the use of a cheap and plentiful resource which we have in British Columbia — we don't have to import it — a resource which has been available to most of the other residents of British Columbia. Certainly there are some communities in the interior and in the north that do not have natural gas supplies, but as the price differential between other forms of energy in the home, in industry and in business changes, we have an even greater and greater argument as to why certain residents of the province should not be deprived of this resource.

Mr. Chairman, I would like to have the minister give us some idea of why his ministry rejected a recommendation, approximately five years or more in the making by the B.C. Energy Commission, regarding the transfer of assets in the hydroelectric field from Cominco Ltd. to its wholly owned subsidiary, West Kootenay Power and Light. As the minister is well aware, there has been a great deal of concern about this in the west Kootenay area and in the Okanagan area, because not only do these areas wish to maintain their sources of low-cost industrial power — on which, as I'm sure the minister knows, our economic well-being and the location of industry, both present and future, is based almost entirely — but we also wish to ensure that our utility base load for other smaller industries and commercial and residential users is maintained. So there is considerable concern about this. In view of the fact that the Energy Commission, after a great deal of deliberation and a great deal of expense on their part and on the part of the applicant over a period of five years plus, made this recommendation, I believe this House would be very interested in knowing why the minister saw fit to turn it down, and perhaps some direction as to what the applicants may consider doing if they wish to pursue this matter. As I mentioned, Mr. Chairman, it's not that I wish to fight battles in this House for the Canadian Pacific Railway and its subsidiaries; but the fact is that there is considerable concern, economically and socially, in the southern part of the province of British Columbia.

[Mr. Strachan in the chair.]

I happen to believe that there is a great deal of room in the province for a new government attitude towards investment in saving of energy in the home, in industry and in commercial development. An old adage is: a penny saved is a penny earned. Well, we certainly know now that a kilowatt saved is many more kilowatts earned. Look at the absolutely enormous capital cost, not just of new energy projects but of getting the energy from A to B. I need only mention some of the major transmission lines — across the southern part of the province, from the northern part to the southern part, and from the mainland to Vancouver Island — to illustrate what I mean. Since these funds have to be borrowed at interest rates in the neighbourhood of 12 and 13 percent now and in the foreseeable future, any way that capital can be spent which would encourage or affect — if I can use a nasty term — the marketplace regarding the desire of industry, business and residential users to conserve energy is, I believe, money far better spent than on massive new projects to transmit and generate electricity, until those projects are absolutely necessary.

I was very encouraged to hear the minister's remarks regarding a good co-generation policy with industry. But once again I want to note that industry will be completely governed by the marketplace, as it should be in these matters.

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I am quite sure that, given their druthers, other things being equal, industry would prefer to be self-reliant when it comes to energy, from the point of view of both protection from price increases and security of supply. I might point out that B.C. Hydro and the other industrial producers have had a very good record in that regard. Nonetheless, I am sure that industry would prefer to have its own sources, were they economic.

If the minister is serious about what he is saying regarding co-generation with industry, rather than a stated government policy by himself and from the government, the real agency of government energy policy when it comes to delivering energy in this province is not directly the government; it has been the government's wish as carried out by the large Crown corporation, British Columbia Hydro. I would be much more interested in hearing the minister tell us that he is going to be directing the directors of B.C. Hydro, whom he appoints, to adopt a policy change in this regard. To date, B.C. Hydro tells me that they still have no policy except the traditional one regarding co-generation, which is that they will buy industrial power from industry at the same rate at which they are prepared to sell it. As we know, this does not provide for the marginal cost of additional generation to B.C. Hydro, nor does it provide for the marginal cost of new transmission lines to supply that power. We have a postage stamp rate all around the province, and that rate is based on capital costs and operating costs everywhere, whether we are involved with a new project or an old one.

By the way, this is in marked contrast to at least one of the private utilities, West Kootenay — and Cominco. Even though their industrial and residential rates are much lower than B.C. Hydro's to start with, they are prepared to deal with industry based on their marginal cost of adding new facilities, both for generation and transmission. If the private sector can adopt such a policy, I believe that there is room for it to at least be considered by the public corporation involved in serving industry.

Perhaps the minister could confirm as to whether or not, through his influence as the minister responsible, he is going to be not just voicing platitudes in the House regarding co-generation but actually doing something about it through the major energy agency which he ultimately controls.

I would also like to hear the minister make some indication as to his approach and the government's approach regarding sales of power on an east-west basis. Clearly we have had a policy of selling power on an interruptible basis to our friends below the border over a period of time, when that power is available, and getting the best possible price for it. I don't argue with the sale of power on an interruptible basis when it is available, but I would certainly like to hear the minister's thoughts on selling power on an east-west basis. In the national interests of our country, it certainly seems to be an absurdity that our two neighbouring provinces to the east, which have enormous amounts of fossil fuels but lack in hydroelectric power, should be generating power from those fossil fuels when we in this province have surpluses of a renewable resource, hydroelectric power.

I would also like to mention that it has been known for some time that power moved on a north-south basis faces the same kind of peaking problems. The high-demand period in Portland, Seattle or Los Angeles is exactly the same high-demand period as in Vancouver or Prince George. Naturally, the high-demand period in Edmonton or Saskatoon is different due to time zone changes. So possibly some savings can be made there in total generation capability, in peaking capacity, and possibly even in some trade-offs on an east-west basis, depending on low water years and that sort of. thing.

Mr. Chairman, there has been considerable discussion in the construction industry and in the housing and building development areas about mandatory energy standards for new buildings. Certainly the federal government has made noises in this regard over a period of years. In a time when there are a number of accusations going back and forth on a number of issues between federal and provincial governments, the federal government has been claiming, rightly or wrongly, that the provinces, including British Columbia, have been the major stumbling block for mandatory energy standards for new buildings. I appreciate the fact, as does everyone in this House, that this is going to add somewhat to the capital costs of most new buildings. It's been estimated in the area of 4 to 5 percent, although we know that costs have been going up that much and more every year.

However, it is my belief — and our belief on this side of the House — that these kinds of reasonable standards that can be met by individuals building homes and the private sector when it constructs commercial and residential buildings need to be established in this country. I would suggest that every other developed country in the world has these kinds of mandatory standards. It's one thing to talk about assistance for people to make more energy-efficient existing buildings, older homes, older buildings, but why do we have to continue to build structures which are going to give us the same kinds of problems on an instant basis when it would be far cheaper to do the job right in the early stages?

Perhaps the minister has some thoughts on this through tax credits, or in some way to at least allow some incentive and ease the burden so that individuals or development companies building homes can ease their way into energy-efficient standards. Clearly the standards have to be set by government, because it's unfair in a marketplace situation to hope that some builders will comply and face the costs in the marketplace that other builders don't have to comply with.

Mr. Chairman, I have some concerns that I've expressed publicly, and I would like to express them in the House to the minister, regarding the level of indebtedness that British Columbia Hydro is getting into. I appreciate the fact that Hydro has to supply the energy demand in British Columbia as it exists. We also know that should some major parts of the economy decide to electrify — I'm thinking particularly of transit systems and the railways of British Columbia — that electricity demand could increase markedly. What I've been concerned about is the financial bite that's being taken out of the economy of B.C. by virtue of the fact that it has always been government policy for B.C. Hydro not to pay off the principal of its indebtedness.

Most people in the province, I suspect a number of people in this chamber, and certainly many people in the media still operate under the illusion that British Columbia Hydro pays off the capital. That is, when it makes its debt repayment, it pays off principal plus interest. That is not the case. The fact is that British Columbia Hydro pays only interest on its indebtedness and when its bonds mature they simply go out and borrow some more after coming, presumably, to this Legislature for permission to do so. Although there is some money set aside for sinking funds and parity development

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bond repayment, over the last ten years it amounts to only between 1.4 and 1.5 percent of the total amount owed by B.C. Hydro.

We also see that last year — the fiscal year ending March 31 — for the first time the interest paid by B.C. Hydro on long-term investment has exceeded 50 percent of the gross revenue of that corporation. Mr. Chairman, I think this has to be a concern for everyone in this province, both on the basis of now and in the future. I'm not sure the old bromide of why the present generation should pay for our future generations' power needs was ever valid. Certainly there is some concern if we were paying it or were paying part of it. For instance, nowadays the money spent by our predecessors in the early and middle '60s would be one thing. The fact is, as I pointed out, we are not paying for that. We're merely paying the interest on it. But when our predecessors borrowed that money they were paying 3, 3.5 or 5 percent. It's hard to think about those days. Now, when B.C. Hydro goes into the borrowing market, they are paying 12.5 or 12.75. It's much higher percentages to refinance that money which was borrowed years and years ago, in some cases by B.C. Electric and the B.C. Power Commission.

Mr. Chairman, we on this side of the House have considerable concern that when the government's new energy program is in effect there are going to be some major delays in the decision-making process which could be a major cause of problems in British Columbia regarding getting those decisions made.

I'm not going to dwell on matters that, as the government House Leader mentioned, may well be dealt with under the utilities bill. However, I'm going to deal with some points which I think are of significance.

The minister stated that it was the government's policy to encourage exploration in B.C. for petroleum and natural gas. Surely the minister must be aware that the amount of oil available in British Columbia is decreasing as a portion of our total demand. Just a year or so ago the industry was stating that we were supplying perhaps 25 percent of our needs; now they're saying that we're supplying only 22 percent of our needs. While there is the occasional attempt at drilling an oil well, the fact is that there has not been any oil discovered in B.C. because we're simply not geologically suited to it.

Not only that, unlike some provinces to the east of us we do not have the kind of heavy oil or oil sands deposits which, though very expensive to develop, at some point in the future offer some security of supply. Very rapidly, in fact, we are getting into the same kind of petroleum supply situation that provinces such as Manitoba and Ontario find themselves in, even though at one time these provinces thought of themselves as being major petroleum producers. They're still petroleum producers, but the amount available is becoming an increasingly small part of their total requirements. With that in mind, it's strange to me that the minister still likes to talk about us as being a petroleum-producing province, particularly in the strong support he gave Alberta in its unilateral plans to raise the price of petroleum. Surely this is not only going to have a great effect on the standard of living and cost of living in British Columbia; it's also going to have an effect on our competitiveness in international markets as far as industry goes.

On this side of the House we accept the fact that the price of petroleum in this country has to go up. However, we do not believe that the only two provinces — Alberta and Saskatchewan — which at this point have more petroleum within their own boundaries than they need domestically should be able to make decisions unilaterally without the involvement of the rest of Canada. I certainly believe that the minister, on behalf of all the people of B.C., should be doing hard bargaining with those provinces regarding the price of petroleum, rather than simply saying: "Go ahead, raise the price; we support you." Clearly, if we were talking about the price of manufactured goods imported to British Columbia from some other part of Canada, I can't imagine the Minister of Industry (Hon. Mr. Phillips) or the Minister of Finance (Hon. Mr. Curtis) going to those companies and saying: "Go ahead, raise the price. It's good for business in Canada. Keep shoving the prices up. We don't care about the cost of living or the cost of doing business in British Columbia." It's a strange attitude on the part of the government of B.C.

Mr. Chairman, I had to smile a bit when the minister was talking about coal conversion. I always considered the term "conversion" attached to "coal" as a rather silly euphemism. Certainly I believe that if we have large amounts of both thermal and metallurgical coal in B.C., we should be looking at greater utilization of these resources. But when you talk about coal conversion — I suppose it is a nice petrochemical sounding term; a nice clean industry — what you're in fact talking about, Mr. Minister, is industry burning coal instead of using wood, petroleum, natural gas or hydroelectric power. We're talking about people burning coal, whether it be in their homes, businesses or industries. Let's call it burning coal. Of course, we don't like to talk specifically about burning coal, because it means that we're going to have to get concerned about the necessary pollution controls, particularly regarding sulphur dioxide emissions. Acid rain is a major concern all over North America because of the environmental and social effects of large amounts of sulphur dioxide released into the atmosphere, largely from the burning of coal and residual fuel oils with a high sulphur content.

While I support the notion of using more coal in B.C. because we have lots of it, I certainly don't support the idea of confusing and misleading the public by using silly euphemisms which, I think, are primarily designed to perhaps anesthetize the public from realizing that we're really talking about burning more and more coal in fireboxes, fireplaces, stoves and industrial boilers. Let's hope that at a reasonable price modern technology can allow us to afford to put the correct pollution abatement devices in place — to make this economically viable.

I want to say just a few words about activity in the mining industry in British Columbia, which we certainly welcome from both an exploration and a productivity point of view. There are a number of mines which are being developed and some which are being expanded at the moment. Of course, we are aware, as the members on the other side of the House are, that this activity is primarily based on the world prices of base metals, which are very good right now, and the availability of investment on an international basis. We, on this side of the House, also welcome the fact that governments both at the provincial and federal level have stopped their squabbling over who should get the biggest or any piece of the action regarding royalties and taxation. Certainly one of the major problems that existed in Canada in the early part of the '70s was the fact that the industry was not only suffering from depressed world prices but from a depression in the amount of capital available on an international basis and, clearly, the uncertainty based on the entry of the federal government into the taxation field by the removal of certain write-offs which had existed up to that time.

We on this side of the House are aware, even if the other

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side doesn't want to admit it, that the drop-off in activity both in the drilling field for petroleum and natural gas and in exploration for mining took place universally at the same percentage across Canada — in Ontario, Saskatchewan, Alberta, Manitoba, British Columbia and Quebec — proportionately in the same amount at the same time. It had to do with international conditions and the various attitudes of the provincial and federal governments at the time. However, I don't wish to belabour the point; I just want to make the minister and those on the other side of the House aware that we certainly don't accept their ability to predict the past in these regards, and we welcome the healthy international conditions at the moment regarding world base metal prices and the fact that the industry has responded to the plentifulness of resources in British Columbia to take advantage of that situation to the benefit of British Columbia.

Mr. Chairman, to return for a moment to the minister's statement that they were encouraging activity in the oil and natural gas drilling field in British Columbia, the industry has been complaining for some time of receiving a higher wellhead price for natural gas produced in Alberta, and even the small amounts available in Saskatchewan, than they are getting from the government of British Columbia. If the minister is sincere about wanting to encourage the industry, surely he's going to have to take some action in this regard in dealing with the industry, because, once again, if the marketplace is to govern the actions, it would only be normal....

Certainly if I was an investor in that field I would be investing in that part of Canada which is more likely to produce a significantly higher wellhead price and have a significantly higher demand for the product. I suppose this is one of the reasons why the B.C. Resources Investment Corporation is spending its development money in oil and natural gas not in Canada but south of the line, simply because they perceive a better climate for these kinds of developments — using B.C. capital, I might point out — that we're all aware of.

Not only that point, but if the minister is sincere about encouraging this kind of activity in British Columbia, surely he must have reconsidered his belatedly quiet opposition and concern expressed about the pre-build and the so-called natural gas pipeline from Alaska. In fact, there's an Alberta to United States natural gas pipeline. With the activity that has already taken place in the province of Alberta we have the industry telling us already that they are pooling more and more of the capital that they have available to them, and of course it's a limited supply of capital that the industry has for drilling. As well, as the minister mentioned, there's a limited number of drilling rigs available, and since they are concentrating more of this activity in Alberta just since the announcement on the pre-build, we must assume that this can only happen to the detriment of activity in British Columbia. Certainly I would like to have the minister's comments as to how he equates this with his statement that he and his government intend to encourage this sort of activity in British Columbia because he wishes to see self-sufficiency.

Mr. Chairman, the last point I want to raise is that I'd like to have the minister's thoughts on what he and his government are prepared to do about or whether they support the idea of electrification of railway services in British Columbia. Not only does this save considerable amounts of petroleum energy, but it could provide a whole new secondary and tertiary industry in British Columbia. As we know as well, one of the values of electrification of rail services, as the Europeans — particularly the Swiss and Italians — discovered years ago, is that rather than braking and destroying or losing energy on the downgrade you can generate almost as much power with the railway rolling downhill as it took to get the train uphill in the first place.

Since virtually all of B.C.'s railways go up one side of a mountain and down the other side.... I'm thinking particularly of the CPR main line — that company, by the way, has already done a major amount of work — and the British Columbia Railway, more valid than the CN, perhaps. I would like to have the minister's thoughts as to whether his government is in fact going to look at this in a technical way and whether they have looked at the economics of B.C.'s entering into this kind of activity in a major way.

HON. MR. McCLELLAND: Mr. Chairman, I would like to respond briefly to some of the questions and comments that the member made. Electrification of railways has not come before me, and it hasn't been one of the considerations I've made since I've been minister. The government doesn't have a position on it at this point, but we'd be glad to take that as notice and look into it. As time goes by I'm sure the member will ask me further questions on it.

On the matter of the pre-build and the so-called belated opposition by the government, the government is on record quite clearly as having developed its opposition, in fact to the point of intervening at the National Energy Board hearings on the pre-build, through the Ministry of the Attorney-General. Our opposition was reasoned and consistent throughout the discussions. But there comes a time when you understand — at least if you're at all a realist — that things are going to happen. The federal government, perhaps with the exception of one minister, was determined that the pre-build was going ahead, for its own reasons, one being the economic incentive to many industries in eastern Canada, Quebec and Ontario particularly. Once the realization was made that the federal government was going to approve the pre-build, it became important for the province of British Columbia to set in place ways in which we could ensure that our future economic stability would not be threatened. We have those things in place now. We are attempting to secure new market operations and to secure understandings with our neighbours, particularly Alberta, of ways in which we can get that security.

The gas pricing question, I'm sure the member knows, has been put before the B.C. Energy Commission, soon to be known as the B.C. Utilities Commission. They will be holding hearings, next month I believe, into all gas pricing, both field and wholesale. I assume they will make recommendations to us very quickly, after their hearings have commenced, as to price changes which would satisfy both the domestic and industrial consumer and the field producers.

The question of mineral activity — I made some comments about activity in my opening remarks, and I think the member and I will disagree about some of the reasons. They've all been made, and the public make their own decision on that one. There's no point in our getting into a debate on it; I think we've had it in this House several times, among many members.

Coal conversion. Sure, if you're going to burn coal it means burning coal, and it means we have to take some important environmental safeguards if we get into that in any major way in the future. I don't try to hide that. But coal conversion can also mean liquefaction, various kinds of combustion — with B.C. Hydro and English interests we're

[ Page 3979 ]

looking very seriously at fluidized-bed combustion, which I'm told limits the environmental consequences of using coal; it can mean many other things as well. When I talk about conversion — sure, we talked about burning coal, and I accept that.

The price of petroleum. The only reason the government has supported the increased cost is that we support it. We have the cheapest petroleum products in the world, gasoline in particular. It is cheaper by far than in most countries of the world, and a good deal cheaper than in the United States. We are also the world's greatest hogs of gasoline. There are some other reasons for that; our geography is one, I'm sure, Nevertheless, we far outstrip the rest of the world in gasoline consumption, and while the rest of the world's consumption is going down, including that of the United States, ours is still going up. I'm sure the whole relationship is not in price, but some of it is. So we support more sensible pricing of petroleum products, and more sensible prices. That doesn't mean we're in favour of seeing those prices necessarily tied to some international cartel. We want the prices tied to something on which our own society is based. We agree that prices must go up, Mr. Chairman, and I think you agree with that as well.

We are finding some oil in British Columbia. I said in my opening remarks that we added some 7 percent to our reserves. But we are using more too. It's a no-win situation, as it is in oil everywhere, I guess. There is some opportunity, perhaps, for new oil discoveries. Canadian Hunter is on a five-year, $25 million to $27 million exploration program in the Nechako Basin in the Cariboo. While they're not overly optimistic, they think they might find some oil. I suppose there's some chance, somewhere in the future, of some offshore finds of oil as well. Those things are not beyond the realm of possibility, but certainly oil is our major weakness and we have to accept that.

The matter of co-generation. Yes, I am a director of Hydro, and there has been some difficulty with the incentives to co-generation. I would hope that we will be able to set newer policies in place which will encourage co-generation more than ever, particularly within industry.

The Cominco problem that you raised in terms of the transfer of assets of West Kootenay. It wasn't my ministry who didn't accept the recommendations of the commission at that time; it was a cabinet decision. Cabinet approval is necessary to make that acceptance for an order. One of the problems was that — I don't want to be too vague on this — the original proposal put forward by Cominco for a long-term lease-to-purchase arrangement with West Kootenay was hardly an arm's-length relationship. There were no guarantees built in that those things would happen in the future. The Energy Commission recommendations were good ones, certainly better than the offer we originally got, but we felt, at least at this point, that there could be some improvements made. I can guarantee the member that the government's concerns are the same concerns that he has, and that is that that major source of electrical power be secured for the people in that area who are dependent upon it at the present time, and be secured over the long term, not just on a short-term basis. I can say that there are some further discussions going on with the principals at the present time. I would hope that we'll be able to come up with a way in which we can secure that power supply for the people of the West Kootenays. We'll work towards that.

I think the first question that you touched upon, Mr. Member, was the matter of the natural gas pipeline. Perhaps I could just deal with the conservation thing a little bit more, because I said in my opening remarks that conservation is probably one of the major sources of energy that we'll have in the future. We can consider it in exactly the same light as we consider our natural gas, hydroelectricity, and everything else. It's a source of energy, and it will become increasingly important in the future. In the last 12 or 18 months we have signed an agreement with the federal government on a joint conservation and renewable program dealing with a number of various areas. Out of those programs a significant part of the $27 million which will be spent in the next five years will be in conservation programs — buildings, industry and transportation. They'll be demonstration projects for which there'll be hard dollars made available. I expect that in the $10 million that's available in this year's budget for the Energy Development Agency, many of the proposals which will come forward to that agency, both solicited and unsolicited, will also be dealing with conservation programs. We're conscious and anxious to improve our track record there as well.

The matter of the natural gas pipeline to Vancouver Island. I have committed that that will be built as quickly as we possibly can. We have, as you may be aware, three proposals at the present time, each of them from separate people. I'm told that there is at least one other who wishes to make a proposal on the transmission line itself, not to mention the distribution lines on the Island. So we will have four proposals basically different in nature with different costs and different routes. It will be my intention to, in one way or another, deal with that as quickly as we can in order to choose the proponent. I think I could guarantee that the hearing process will not take anything like two years. The forecasts that we're making at the present time would be that once the choice is made we should have gas on Vancouver Island within a three-year period. That would include construction and all of the approval processes that are necessary. Perhaps it'll be less than three years, if possible. I think we can, as much as possible, guarantee that that kind of delay will not be put in place.

MR. KING: I just wanted to raise briefly with the minister the frequent complaints I have had from the interior of the province regarding the lack of any natural gas supply as an alternative to oil-fired furnaces and so on, mainly for heating and domestic use. I think the minister has had some correspondence on this from representatives of the regional district of Columbia-Shuswap as well. Certainly I've had a great many letters and inquiries from individuals in that area. I know some of the problems involved. I'm aware that the government is not a direct supplier; that comes from the private sector. There are the economics of the question. It's difficult to justify expensive trunk lines to sparsely populated areas, and so on.

Nevertheless, the question that citizens do ask — in my view, with a great degree of validity — is: how is it that we can export such vast quantities of natural gas, which it is suggested are excess to British Columbia's needs, when vast areas, particularly of rural British Columbia, do not have the opportunity to utilize this cheaper, and in many cases more desirable, form of heating fuel and domestic supply of energy? It seems to me that while the minister certainly may not be in a position to dictate to the private companies in terms of the precise economics and their plans in terms of extending

[ Page 3980 ]

their service, he certainly is in a position to weigh the obligation that is on them to provide this kind of service to British Columbians against the justification for the export of what is allegedly excess natural gas from the province of British Columbia.

I guess what I want from the minister is some indication of what his thinking is. I know he commented briefly on it — not precisely from this perspective, I don't think — but I would appreciate it if the minister would give me some indication of what approach he takes on this question and whether or not he has any up-to-date information on new initiatives that may be planned in terms of widening the supply of natural gas to areas like Revelstoke. Salmon Arm has some now, but many of the rural communities lack any opportunity to utilize that source of energy at all. So if the minister could give me some indication I would certainly appreciate it.

HON. MR. McCLELLAND: Yes, I recognize that concern. I know when I made the speech in Victoria regarding the Vancouver Island natural gas pipeline, I also said at that time that in saying we advocate a policy of making natural gas available to British Columbians, we have to mean all British Columbians; we can't just mean Vancouver Island. I believe the Premier, in a speech recently, said much the same thing. So we accept that responsibility, and it's a matter of how we do it next.

I might say that in terms of the federal government, in what it's calling, at the present time at least, its off-oil conversion program, it contemplates some help for private industry and for homeowners in, first of all, getting gas to them, and secondly, helping them with conversion. We in the ministry are at the present time in the final stages of preparation of a feasibility study on a rural gasification program. That study should be available to me, I would expect, in the next few weeks. It will be the subject of discussion by the Cabinet Committee on Economic Development. So the province will, I would hope, be able to get some guidelines from that program.

The policy, though, can not be that we make natural gas available to only stated parts of the province. I think if we're going to have that policy, then it has to be a province-wide policy.

MR. HANSON: Following the line of discussion of my colleague from Shuswap-Revelstoke (Mr. King), I can't impress upon the minister enough the concern of getting natural gas to Vancouver Island. We're about 24 years late compared with the lower mainland. I think they had it in 1956. The Hydro reports that I have read estimate that Hydro would take something in the order of four years to bring it right to the consumer. That is in a very recent report: "A Vancouver Island Natural Gas Transmission Distribution System, May, 1979."

Also, on the west coast line proposal, coming through from Williams Lake to a junction on northern Vancouver Island, I would like to ask the minister if he could be a bit more specific on a timetable that he's looking at for the selection and then the go-ahead, construction and final completion. Could he be more specific as to exactly what he's looking at at the moment?

HON. MR. McCLELLAND: I would hope that the selection could be made before the end of this year — route and proponent — and that hearings into the process could begin immediately, which would put us into shortly after the first of the year. I would hope — and I can only guess at this because I don't really know how long the hearing process will take — that unless some very, very serious environmental concerns are discovered, they shouldn't take long. I can tell you that the last time I talked with one of the proponents — the latest proponent, Centennial Pipeline — we sat in our office and we were looking at a 1983 completion date. Now the distribution can go apace — we have, I think, four or five applications from distribution companies as well — and the minute that the gas is assured, those programs can be put in place immediately. Of course, in Victoria and Nanaimo there is a pretty significant distribution system in place already. So 1983, Mr. Member, is what we've been looking at. If we can meet the timetable of taking some action on choice of location and proponent by the end of this year, I believe that we can meet that deadline.

MR. HANSON: I thank the minister for his response. There is another aspect I would like to deal with briefly, and that is that on Vancouver Island we have an ideal situation for the utilization of wood waste, tying in on a co-generation basis with some of the forest industry companies on the Island. The private member's bill of my colleague for Alberni (Mr. Skelly) before the House.... The concept that he's proposing there, of having Vancouver Island looked at as an energy entity, I think warrants a lot of merit.

Discussions that I've had with staff people at B.C. Hydro indicate to me that there has never really been a thorough review by Hydro of the long-range energy needs and requirements of Vancouver Island. I was surprised to hear that, because with these major projects like the Cheekye-Dunsmuir and the natural-gas pipeline, it would seem to me that it should be a requirement that there should be some overall review of what the needs are going to be and how conversions could take place to perhaps reduce the long-range amount of electricity transmission that we're going to require and move into things with more of an ecological orientation towards the Island, its biomass, its wood waste. I think there are possibilities for wind power for smaller communities on the northwest coast of Vancouver Island. I think that if we could look at Vancouver Island as an entity, we want to make it as energy self-sufficient as possible and reduce our reliance on synthetic gases like propane and so on, which are here and stored — and they're a hazard and a problem. I think that that's the long-range view we would like to see. So would the minister comment on it, please?

HON. MR. McCLELLAND: Mr. Chairman, one of the things that I was a bit surprised to discover when we were dealing with our energy policy was that British Columbia now gets fully 18 percent of all of its energy from wood waste. Frankly that surprised me a bit; I didn't think it was nearly that high. But anyway, I agree that's not good enough, and the government is putting programs in place. I mentioned earlier, I think — perhaps I didn't — that the federal government, industry and ourselves are cooperating in the funding of a new type of hog fuel burner at Port Alberni — designed and manufactured by a British Columbia firm — which will be put in place for two reasons: one, to achieve the objective you want us to achieve, and secondly, to attempt to develop a new British Columbia industry for the world. That's not in place yet, but it's about to be in place.

[ Page 3981 ]

Also, Mr. Chairman, I understand that B.C. Forest Products at Crofton is committed to a new hog fuel burner which will more fully utilize their wastes. Hydro tells us that the hog fuel waste on the Island is almost fully utilized at the present time, but there is certainly room for improvement. I hope the use of wood wastes will become an even more important source of energy, on the Island particularly.

MR. HANSON: One last suggestion to the minister. A proposal that has been made actively to deal specifically with the greater Victoria area is the sewage treatment situation. Now in my investigations of various solutions to sewage treatment, one of the problems with secondary or tertiary treatment is that you're left with the sludge — and that is a problem in itself. In some jurisdictions they are mixing that sludge with wood chips and other organic material to make synthetic oil, and that is something that, I think, the minister perhaps could take also under advisement as a possible source of energy generation for this area.

For example — hypothetically — if a secondary treatment plant and power plant were built in conjunction on, say, Trial Island or some other location in this area, that could utilize that sludge mixed with wood chips to generate power for Victoria. I think that would be a very desirable direction to move in and I think it's worth exploring by your ministry and something that I would like you to take under advisement.

HON. MR. McCLELLAND: Sure, Mr. Chairman, I'd be happy to do that. I'd just suggest to the member that if he has some knowledge in this area and is anxious to see it go, he get together with Dr. Bob Evans in our conservation and technology division. He can give his thoughts and suggestions to him and we'll see where it goes from there.

Vote 64 approved.

Vote 65: executive management, $413,298 — approved.

On vote 66: finance and administration branch, $1,245,832.

MR. BARRETT: Mr. Chairman, I have some questions under this particular vote. Perhaps we can leave it open enough, as the House Leader said, that we will be able to debate some of these related energy matters under the energy bill itself.

HON. MR. McCLELLAND: Mr. Chairman, I can't speak for the Speaker or anybody else, but I assume that if they are contained in the policy of the bill we will be able to debate it at that time.

Vote 66 approved.

Vote 67: British Columbia Energy Commission, $1,059,225 — approved.

Vote 68: energy resources branch, $5,021,213 — approved.

Vote 69: mineral resources branch, $7,370,570 — approved.

Vote 70: petroleum resources branch, $3,452,553 — approved.

Vote 71: Resource Access Program, $521,500 — approved.

Vote 72: office of coal research, $176,047 — approved.

Vote 73: building occupancy charges, $1,262,000 — approved.

Vote 74: computer and consulting charges, $450,000 — approved.

The House resumed; Mr. Davidson in the chair.

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

HON. MR. McCLELLAND: Mr. Speaker, I move public bills and orders.

DEPUTY SPEAKER: So ordered.

HON. MR. McCLELLAND: Adjourned debate on second reading of Bill 43.

PENSION (PUBLIC SERVICE)
AMENDMENT ACT, 1980

(continued)

MR. HOWARD: Mr. Speaker, I adjourned the debate on this bill the other day. I had at that time concluded one aspect of the consideration of the pension fund itself which is administered by the government. I had set out for the minister that I hoped the one person from the employees' section, as I understood him to say, who would be appointed to the management committee — or whatever it is that administers the pension fund — would not be just simple tokenism. There is a necessity to have more people from the employees' section than from the management section administering that fund. After all, the employees are the ones who are the beneficiaries or otherwise of the pension plan itself. They should certainly have — and should have had before now — a greater say in it. I also set up for the minister some specifics with respect to some of the investments that are held in the fund.

As the House knows, this bill is the replacement for the earlier bill which the government had introduced and which has now been withdrawn — Bill 28, I believe it was. I only make comment on that for reference purposes. This bill is the result of a very intensive and properly oriented objection to Bill 28 by employees in the public service in British Columbia who felt, and rightly so, that Bill 28 impinged upon their expectations of a proper and adequate pension for those who will be retiring in the future. The public servants obviously amassed a very successful campaign, because the bill before us now is the result of negotiations which took place between BCGEU reps and the government with respect to the earlier proposition contained in Bill 28.

I regret very much, though, that government has not seen fit to take the principal points contained in the bill before us and incorporate them into other bills, notably Bill 29, relat-

[ Page 3982 ]

ing to the teachers' pension plan. The teachers, as I understand the situation, feel likewise disadvantaged as a result of a decision of government to introduce legislation.

Our proposition is to support this particular bill, because it does reflect the results of the negotiations. I express the thought, in closing, that the government should also see the errors of its ways with respect to the other bills touching on pensions of people employed — and I use this word in its broadest sense — in a service to the public, be they teachers or working for the provincial government.

HON. MR. WOLFE: I appreciate the remarks of the member for Skeena, and the fact that their members appear to support this bill, Bill 43, which amends the Pension (Public Service) Act.

In closing the debate I might just make one or two comments having to do with the pension investment committee. Previous to now the investment superannuation fund has been handled by experienced staff of the Ministry of Finance, dealing with the placement of these funds. The placement of all superannuation funds have been made from time to time at existing market rates. I think the record of the pension fund investment has been creditable in the interest of employees. The new departure here is that we have stated publicly, on behalf of my ministry and the government, that we intend to invite a representative or representatives to participate on the pension investment committee. It would be impossible to have a great many employee representatives on a committee of that type, because it deals with investments of several different funds, both for teachers, public service, and so on. I only wanted to say that for that reason we have in this bill the creation of a consultative committee. I think this is very significant in terms of public service employees per se, in that we have established in the bill the creation by order-in-council of a consultative committee relating to pensions. We have already had a number of approaches and a great deal of interest from the various employee representative groups on this matter. I feel safe in saying that input can be provided on the matter of investments, both from the consultative process and also from the pension investment committee itself.

Secondly, I would say that the bill itself, which has some further amendments to the original bill proposed, was made possible certainly by discussions, but also by the simple fact that the funding status of the public service pension plan is considerably different from that which pertains with regard to the teachers. In effect the public service pension plan has no unfunded liability as such because, aside from the initial contributions by employees and employer, in each case where a man retires the balance is picked up at that time as a bulk payment. Therefore, from time to time, there does not exist what is known as an unfunded liability. This plan is funded in a different manner than comparable plans such as the teachers' pension plan. Therefore it has become possible to slightly amend the contribution going to the indexing fund, which has been a matter of concern.

One further matter arises having to do with the companion bill associated with the teachers. There is in fact a substantial unfunded liability there. We have addressed that question with the new funding policy related to teachers. There has been a package proposal presented which has been a part of substantial discussions, and agreement, by their group and the government representatives. In effect, the contribution by the government to individual teachers, where the teachers' plan is concerned, is substantially more as a percentage of their payroll than pertains in the case of the public service.

With those two things in mind — first, the funding of the public service plan is different from the other plans; secondly, the government has already accelerated the contribution to the teachers' plan to some 10.2 percent of payroll — it is therefore simple to say that it is not possible to have the two plans exactly the same.

Mr. Speaker, I move second reading.

Motion approved.

Bill 43, Pension (Public Service) Amendment Act, 1980, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. WILLIAMS: Mr. Speaker, second reading of Bill 29.

PENSION (TEACHERS)
AMENDMENT ACT, 1980

HON. MR. WOLFE: This bill proposes fundamental changes to the basis of financing of basic pensions and to the basis of determining and financing adjustments to pensions already granted in response to increases in the cost of living. Both these changes are proposed to ensure that teachers' pension benefits will be secure in the future. In addition, a number of minor amendments are included which are intended to make the plan more equitable or to improve its administration. Finally, specific adjustments are proposed in those retired teachers' pensions which were calculated on a basis of a salary-averaging period of greater than the five years which now applies, or on a basis of restricted earnings because of the salary ceiling which applied to pensionable earnings until the year 1972.

So I should say that all of the changes included in Bill 29 represent a package of changes which have been developed through a process of intensive discussions for more than two years between government and the British Columbia Teachers' Federation. I might add that the federation agreed to and requested this package of changes last year.

With regard to the financing of the basic pension benefits, the independent plan actuary has recommended that the level of contributions to finance basic pension benefits should be increased. This bill will increase total contributions to the recommended level. I am pleased to say that government and the British Columbia Teachers' Federation have worked together in developing this strengthening of the plan's financing. Both sides brought to these deliberations an attitude of genuine concern, both for the continuing financial stability of the plan and for future generations of teachers and British Columbia taxpayers.

Mr. Speaker, this bill provides that teachers will contribute an additional 0.5 percent of salary for basic benefits and that the government contributions will be increased by well over 2 percent of teachers' salaries. In fact, government contributions under this bill will be some 10.3 percent of teachers' salaries in total compared to 7.6 percent contributed by teachers. Employers' contributions to the teachers' pension plan will be well above those required under the other British Columbia employee pension statutes.

The over 2 percent increase in government contributions represents a budgetary increase of $13 million per year and

[ Page 3983 ]

reflects government's determination to ensure that the excellent pension benefits provided to teachers are soundly financed so that they will be secure in the future.

Mr. Speaker, the Pension (Teachers) Act and the other pension acts of this province presently provide for unlimited quarterly cost-of-living indexing of pensions. The acts also make provision for contributions of up to 1 percent by each of the employees and the employer, to finance this indexing on what I call a pay-after-you-go basis. The contributions which are collected to finance the indexing benefit do not even cover the past indexing payments that have been made. No funds have been set aside to support the future pension payments which must be made to retired teachers in respect of indexing increases granted between 1974 and now. This is an intolerable situation and it endangers the future security of the past indexing increases.

The present indexing arrangements were enacted in 1974, apparently without regard for the long-term consequences which can be predicted. The superannuation commissioner has already had to trigger the maximum permissible contributions of 1 percent by each of the teachers and government to finance the indexing which has taken place since 1974. He estimates that by 1985 this 2 percent of salary will not be sufficient to finance the present indexing. At that time it will be necessary either to further increase contributions or to severely limit future indexing increases. Confirmation of the fact that action is required comes from the independent plan actuary, who has advised that the present indexing system is not stable and needs to be revised.

A similar situation will develop before long under the other pension acts as well. Obviously, such a situation is intolerable both from the points of view of the employees and the employer, who will have to pay completely unknown and ever-increasing contributions in the future if the open indexing is retained. From the point of the view of the pensioners, they will face the prospect of having the indexing arrangements suspended or drastically curtailed for the future should the employees and employer ever decide to limit their contributions for indexing. This government has been wrestling for some time now with the difficult question of how to reform the present indexing basis. We are determined to ensure that pension adjustments, once granted to pensioners, will be secure.

Accordingly, this bill amends the indexing provision of the Pension (Teachers) Act as follows: first of all, all pension indexing adjustments granted through to and including January 1981, will be guaranteed and form part of the basic obligations of the plan. Then, commencing October 1, 1980, teachers and government will each contribute 1 percent of salary to a separate inflation adjustment account to finance future pension adjustments. In addition to these contributions the inflation adjustment account will accumulate interest and will also be credited with excess interest from the basic fund. These funds in the separate inflation adjustment account, as at September 30 of each year, will be used to provide fully funded pension adjustments as of the following January. The first annual pension adjustment will be granted under the new system in January 1982.

[Mr. Strachan in the chair.]

Mr. Speaker, similar amendments in indexing provisions are proposed in the public service, municipal and college pension acts. Under the new system no unfunded liabilities will be created by the pension supplements which are granted each year. The supplements will be fully funded out of the separate account and supplements will only be granted to the extent that funds are available.

Full cost-of-living increases will not automatically result every year, but the adjustments which are granted will be fully secure in the future. It is expected that the new system will give effective protection against foreseeable levels of inflation. The new system will give full protection against annual cost-of-living increases of up to 8 percent or more.

So the new system will still provide British Columbia teachers with one of the very best indexing arrangements in any pension plan in North America. Most other teacher pension plans in Canada place limits on the indexing of their pensions or provide no formal indexing at all. For example, Nova Scotia limits indexing to 4 percent per year; New Brunswick to 6 percent; Ontario and Prince Edward Island to 8 percent; Saskatchewan limits indexing to 80 percent of the cost of living, while Manitoba uses a system like that proposed in Bill 29. Alberta and Newfoundland have no automatic pension-indexing provision at all. Only Quebec, of all of the provinces, provides open pension-indexing.

Finally, I'm very hopeful that in moving to provide meaningful indexing on a financially responsible basis, we will be making a contribution to the future development of pension plans across the country.

Another change proposed will increase the pensions of many retired teachers. In 1973 the Pension (Teachers) Act was amended to provide that future pensions would be calculated on the basis of a teacher's highest five-year average salary, and in 1971 it was amended to eliminate the salary ceiling which was then imposed for pension purposes.

This bill provides for adjustment of teachers' pensions which were calculated on the basis of a highest average salary over more than five years and/or were affected by the salary ceiling. Such adjustments were recommended by the independent Wiggins report of 1975, which was jointly financed by government and the British Columbia Teachers' Federation. It is estimated that over 2,000 pensions will be increased, in varying degree, by an average of $50 per month.

These adjustments correct what has been seen by the British Columbia Teachers' Federation and many pensioners as inequitable treatment of those teachers who retired between 1962 and 1972, relative to more recently retired teachers.

Government and active teachers will share equally in the cost of financing these pension adjustments. Active teachers will pay a special contribution of one-tenth of one percent of payroll for eight years to finance their share of this cost. The government share will be paid either in a lump sum or over a number of years.

This bill also proposes a number of relatively minor amendments which are designed to make plan provisions more equitable and to improve plan administration. The following specific changes are proposed by this bill. Teachers who are on British Columbia teachers' fund sick leave benefits may elect to contribute to the plan for up to one year. The reinstatement provision will be broadened by eliminating the maximum ten-year period that a teacher can be out of teaching. This change will ensure that teachers who return after extended periods of child-rearing will be able to reinstate previous teaching service, provided a refund of contributions was not taken. The bill will permit teachers to qualify for a pension after ten years of service, regardless of whether part-time or full-time teaching was involved. This

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change recognizes the growing significance of permanent part-time teaching employment in the school system. It will permit eligible service with an approved employer to count for eligibility purposes under the plan for teachers coming into British Columbia teaching, in the same way as it now counts for teachers who leave British Columbia for another province. It will broaden the basis upon which superannuation commissioners may enter reciprocal pension transfer agreements with other pension plans. It will eliminate limitations that now exist, which prohibit crediting of interest on teacher contributions in certain cases. It will permit the Lieutenant-Governor-in-Council to provide for interest on regular teaching contributions in the future, which is higher than the 4 percent provided in the act.

Finally, I would like to advise the House that I have recently invited the British Columbia Teachers' Federation to nominate a teacher representative to sit on the investment committee which oversees the investment of the teachers' pension fund. This appointment will meet a long-standing desire by teachers to be directly involved in the investment process and will directly reflect this government's conviction that teachers should be involved in this process. Mr. Speaker, I move second reading.

MR. HOWARD: Mr. Speaker, there is something seriously wrong in the information the minister has given to the House. It's something that puts into question what has taken place with respect to teachers' pensions.

The minister tells us that this bill is basically a package, and that the teachers' federation requested this package last fall. Then when the bill was introduced, teachers from all over the province converged on Victoria to lobby members, to lobby government, opposing the introduction and passage of the bill. How can a group on one hand request a package, and then when they see the package find that there is something amiss in it? Obviously the package requested is not the package that the minister has introduced. Obviously there is either something missing or imposed.

The minister talked at length about intensive discussions with the teachers about their pension structure. If this is the result of that, then why do the teachers object to it?

In the discussions I've had with teachers, they say that this bill does not reflect what their hopes were and what their aspirations were, and what their understanding was of the agreement or the results of the discussions with the government. In fact they entered into discussions, these continued over a number of months, they were led to believe that a certain thing was going to come out of those discussions, and then when they were faced with Bill 29, they found that it did not reflect the results of those discussions. It's an imposition by government upon a group of people in this province.

With respect to Bill 43 which we just passed, it came about as the result of negotiations and discussions with a group of employees in the public service. They agreed to follow a certain course of action — mutual agreement as a result of free, open negotiations or discussions. Why don't you treat the teachers the same, Mr. Minister? Why does this government want to make fish of one and fowl of another? The government is committed to the principle of free collective bargaining — and I use that in a very broad sense, not the narrow sense of the Labour Code, because free collective bargaining doesn't exist with respect to teachers dealing with school boards. If the government is committed to the concept of free, open, full collective bargaining, why not apply that principle to a group of employees in this province called teachers? Why not follow your commitment through to the end? Why subject teachers, who came to this capital city following the introduction of this bill, to the indignity of having to go and visit the Premier, and for the Premier to tell whomever it was who visited him to get out of his office? If they didn't like the bill, he'd withdraw it, and the teachers wouldn't get anything. That's blackmail; that's an imposition upon free people in a free society. It is government saying: "Regardless of what your desires, aspirations and hopes for the future are, no matter what you think you should be entitled to when you retire, no matter what you think arose out of the discussions, no matter what you believe we agreed to, this is what you're going to have. Take it or leave it." That's a highly improper way to go along with discussions with a group of people in a free society. On that foundation alone — never mind the detailed statistics and figures — I don't think this bill can be objected to too strenuously.

Interjection.

MR. HOWARD: We do object to it and we don't think that objection can be engaged in too strenuously. That's what I'm saying.

Certainly there are fundamental changes to the current pension legislation relating to teachers. The bill amends the indexing feature that, as I understood the minister to say, came about as a result of free negotiations with the teachers in 1974. My colleagues who are with me now and who were in government at that time — and I know what they are saying is truthful because they were and we are committed to the concept of mutual agreement, not imposition — entered into that arrangement in 1974 to provide indexing of pensions for teachers by mutual agreement. What has happened in the meantime? If there is a shortfall, if the contributions don't cover the indexing, how did that come about? Either through mismanagement of the established fund or carelessness on the part of government when this was first noticed — when that was I don't know.

Sit down with teachers again in a free collective bargaining atmosphere and say: "Something is amiss here; can we sit down and negotiate it as free people in a free society?" Be committed to the concept of putting into legislation that which has been reached as a result of mutual understanding, mutual negotiations and mutual agreement. To do otherwise is a travesty of the concept of intensive, open or free discussions or negotiations or whatever label is used to identify them. It is highly improper to enter into free discussions with a group of people, as was done in this case, lead them to believe that mutual agreement would show up in legislation, and then come around and sneak something into that legislation which was not reflected in the free discussion.

I notice the gentleman behind — and I'm very reluctant to do this.... The gentleman sitting behind the minister just shook his head when I said that. I don't know what the shake of a head was for, but I'm reluctant to engage in a discussion of that nature. Perhaps if the minister would shake his head and say what I am saying is incorrect, then that's a different kind of thing. I think we have a situation here in the Legislature where guests are not only to be seen and not heard, but are also not to indicate opinions about what's taking place.

DEPUTY SPEAKER: Hon. member, that point is very well taken by the Chair.

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MR. HOWARD: If that is so — that the minister has shaken his head, although I didn't notice it; that what I was saying was incorrect — then I've got to come back to the initial point that if the federation requested this Bill 29, which is the package.... If that was requested last fall then why are they now in disagreement with it? Maybe the minister can't answer that, but that question has to be asked. I'll get back again to follow that along.

When teachers came here to Victoria to talk with members and the government about this particular bill, teachers that I spoke with were offended by the bill because they said it did not reflect what they were led to believe it would reflect. They were sold a bill of goods — that was the expression they gave to me. They fully expected that the concept of full indexing would be respected in the legislation. It's not. That's obviously the crux of the matter; that's obviously where the difference comes in. They had entered into negotiations in 1974, which resulted in full indexing, and they now have entered into negotiations or discussions over the last year and were led to believe that full indexing would be there. Obviously they are faced then with the de facto Bill 29, which cuts the feet out from under full indexing.

That's wrong in principle. It separates and divides. It says to one group of people — the B.C. Government Employees Union, a large organization which somehow or other was able to get to the government and convince the government of the error of its ways with respect to the other bill.... The teachers, for some reason or another, have not been able to accomplish that.

There are rumblings and discontent among the teaching profession in British Columbia as a result of this. It may well be that what leverage the teachers felt they would have in their hands would not be available to them until the school year starts. It may well be that they felt better prepared to wait and try to exert some leverage at a more appropriate time than was the case earlier; I don't know that. But I do know that the minister has offended many teachers by this piece of legislation. The government has offended them, and that may well result in an altercation of some nature later on. If that does happen — I'm not one who advocates it — then the full responsibility for that rests with this government and nobody else, because of the imposition of this bill.

[Mr. Davidson in the chair.]

The minister ran along a list of provinces, saying certain provinces had certain restrictions of a percentage nature on the indexing factor and some didn't have any restrictions at all.

HON. MR. WOLFE: One.

MR. HOWARD: Some have no indexing and one has no restriction; all right. The figures really don't matter.

The point I'm trying to make is that I think it is not fair debate for the minister to select, out of a very complex structure — which pensions are — one set of figures, namely a percentage figure relating to indexing, and try to compare them all. That doesn't take into account the fact that maybe in some of those provinces they do a better job of managing the pension fund than they've done in this province. It doesn't take into account the level of contributions. It doesn't take into account formulae which may exist in all of those provinces. It's just picking out one particular item and using that to try to lead the House to believe a certain situation exists which is commendable. I say the situation is not commendable.

Until we can straighten out the indexing feature, until the government is prepared to do something of that nature and give some intimation that it's prepared to sit down and negotiate with teachers over this — that it's prepared to enter into discussions and negotiations with them fully, openly and completely — we don't have any choice than to further put forward the case on their behalf.

In this regard, Mr. Speaker — perhaps as an aside and just musing aloud.... Having on another occasion adjourned the debate on second reading of this bill — I don't want to run afoul of the rules — I wonder about the permissibility of doing the same thing again right now. Can the same person move adjournment of the debate until the next sitting of the House?

DEPUTY SPEAKER: With leave, hon. member.

Interjections.

MR. HOWARD: I was a bit off base on that. I would move that the debate be adjourned until the next sitting of the House.

DEPUTY SPEAKER: Shall leave be granted to put the motion?

MR. HOWARD: You don't need leave; you don't need it anyway.

DEPUTY SPEAKER: Hon. members, shall leave be granted?

Leave granted.

MR. HOWARD: I don't need it, Mr. Speaker. That's all right. I've got it anyway, so I'll move that the debate be adjourned until the next sitting of the House.

DEPUTY SPEAKER: Hon. member, the Chair understands now. This is a separate bill, and the motion can quite well be put.

Motion approved.

FINANCIAL ADMINISTRATION ACT

HON. MR. CURTIS: Mr. Speaker, I wish to make a brief statement. I have today released a discussion paper on a new Financial Administration Act for the province of British Columbia. Copies will be delivered to the offices of all hon. members, and others, within the next several hours, and in some cases Monday morning at the latest, I would think. The proposed act — and it is that — is intended to update two pieces of existing legislation, the Revenue Act and the Financial Control Act which govern financial management in the provincial government,

Mr. Speaker, the reason for this rather unusual — and, I trust, acceptable — course of action is the proposed legislation is very complex, so the Ministry of Finance is first making it public in the form of a discussion paper. We shall invite — indeed we do now — comments, observations and suggestions on the contents. These comments will be care-

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fully considered by a committee, a task force, to be chaired by the Deputy Minister of Finance, and the proposed act will then be redrafted to reflect the findings of the task force.

I intend to introduce the Financial Administration Act in its final form early in the 1981 legislative session.

I thought that members of the House would appreciate hearing of the course of action that is being taken today, rather than simply receiving the document on their desks with relatively little explanation.

Hon. Mr. Nielsen tabled the report of the Travel Assurance Board for the fiscal year ending March 31, 1980, and the Trade Practices Act annual report for 1979.

Hon. Mr. Williams moved adjournment of the House.

Motion approved.

The House adjourned at 1:03 p.m.

APPENDIX

83 Mr. Cocke asked the Hon. the Minister of Health the following questions:

1. What is the total amount of money budgeted by the Government for advertising the Provincial Denticare Plan?

2. How much of the money budgeted by the Government in advertising tile Provincial Denticare Plan has so far been expended?

3. As of July 29, in which publications were advertisements placed, and in each case, what was the cost of the advertisement'?

4. Did the Government use an advertising agency for the purpose of designing the advertisements?

5. If the answer to No. 4 is yes (a) what is the name of the agency, (b) how much has the agency been paid, (c) what is the name of the account executive, and (d) who were the members of the creative team?

The Hon. K. R. Mair replied as follows:

"1. $314,000.

"2. $57,268.40.

"3. Publication and cost:

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"Yes.

"5. (a) Foster, Young, Ross, Anthony and Associates; (b) no billings have yet been received; (c) Peter Ross; and (d) Peter Ross, Penny Webb, Dennis Hutchins, and Derril Rolssen."