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CONTENTS

Routine Proceedings

Committee of Supply: Ministry of Forests, estimates (Hon. Mr. Waterland).

On vote 98.

Mr. King –– 4674

Mr. Skelly –– 4686

FRIDAY, MARCH 20, 1981

The House met at 10 a.m.

Prayers.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

On vote 98: minister's office, $160,231.

HON. MR. WATERLAND: Before the swift passage of my estimates I'm sure the opposition would like me to make some comments on what has been happening over the last year and what we plan for the next year in the management of our most important forest resource. I know all the members recall the fact that in the Ministry of Forests Act, which was passed in 1978, there was a requirement that each year we present to the Legislature a new five-year program for the management of the forest and range resources of the province. Our first program was introduced a year ago, and since that time we have been working on that plan and developing our second plan, which was introduced here in the Legislature about a week ago.

The new program we have introduced has raised our sights considerably on the things we hope to accomplish over the next five-year period. I hope that all members have studied the program which was introduced, and will recognize and accept the fact that the moneys which are stated in the blue-book budget are but a part of the total funds available to my ministry for forest management in British Columbia. We do have allocation from the Forest and Range Resource Fund which was set up last year, and I believe this year we'll be using in the order of $35 million of that money to augment our blue-book budget. In addition we have our section 88 funds which are foregone revenue and which are used directly by the forest industry at our direction to accomplish in any of the things we will be doing in the management of our forests in British Columbia.

The tabling of the five-year management program was accompanied by a brief press release which outlines, very briefly, some of the accomplishments we have had over this last year. I think I should mention a few of these. At the end of this current year we will have harvested 75 million cubic metres of timber in British Columbia, which is, I believe, about the second highest it's been, and is about the limit of allowable cut available to us, as we practise sustained yield forestry. Last year the ministry collected well over $500 million in revenue — a record amount — and this again is the cost the forest industry pays for using that resource which belongs to the people of the province of British Columbia.

This year will see substantial reductions in that income for a couple of reasons. One will be on lower stumpage levels because of the low-priced markets that exist: secondly. we'll probably see some reduction in volumes harvested, at least in the first part of the year, because of the high levels of inventory in both logs and lumber which has been manufactured.

One of the most significant things last year is that we finally achieved the level of 75 million seedlings planted in British Columbia, which has been a goal for quite some years now, and which has been worked towards by three different governments. That was accomplished, and I think that is a milestone. It is also interesting to note that, according to the program which we have presented, we will have doubled that capacity within five years, and that will be done through the cooperation of both the industry and the government.

I think we have made an excellent start in intensive forest management in British Columbia. The speed with which we can increase the level of management is dependent upon knowledge of the forest, the availability of qualified and trained people to carry out the work which we have to do and, of course, the availability of funding. The funding is assured at the optimum level of expansion of this type of work, and this has been committed to both in the budget, in my section 88 offset approvals, and in the funds from the Forest and Range Resource Fund for this year. There was also a commitment by the government for a continuing increase of this type of work over the next five years.

Mr. Speaker, we have approvals in our budget in our blue book and in our range funds for $300,356,000 for expenditures over this year. The Minister of Finance (Hon. Mr. Curtis) has requested all ministries to provide efficiency savings; he has asked my ministry to provide savings in administrative efficiencies to the tune of $7 million. Seven million dollars is a large number when taken in isolation, but I would point out that that is 2½ percent of my total approved expenditures for the year, and I'm sure that the ministry can accomplish those savings without reducing any of the specific programs we have to work with.

Mr. Speaker, here are just a couple of numbers on the things we will be accomplishing this year and how that will change within the five-year program period. Our basic silviculture — and basic silviculture is primarily planting and site preparation surveys for current logged areas — will increase slightly from, for example, 70,600 hectares a year planted in this next fiscal year to 86,000 by 1985-86. That increase appears modest because we will not be increasing the areas that we harvest, and by that time we will have achieved a level of planting of about 50 percent of the areas clear-cut in the province, natural regeneration doing an adequate job on the balance of it.

 The most apparent increases are in our intensive silviculture. Planting the backlog of NSR — not satisfactorily restocked — lands will increase from this next fiscal year of 8,200 hectares to over 41,000 by the end of the program period. That is a very significant increase. By that time we will be spacing over 66,000 hectares as compared to 21,000 this year. We will be increasing our efforts in fertilization, fitting, conifer release and site rehabilitation. It has taken up about 20 years or more to achieve a level of planting 75 million seedlings a year. That will be doubled over the next five years. I think that's quite an ambitious undertaking.

I'd like to make one other point, Mr. Speaker, before I allow the opposition to question me on my activities, just to re-emphasize where our direction and our efforts will be. Last year we spent 28 percent of our total ministry budget on silvicultural work. By the end of the program period we will be spending 40 percent of a much larger budget on silviculture. Our budget over that period of time will rise in fixed dollars from $300 million to over $418 million. We will be spending 40 percent of that budget on actual forest management, stand-tending and planting work. I think that's a very significant undertaking, constrained by our ability to provide the people and to have the knowledge of just how the forest responds to the things we will be doing.

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I think we have a good start in the more intensive management which we identified as one of the ways we must overcome the natural biological falldown effect in the years ahead. We have a long way to go, but we do have a plan. A new plan will be presented again next year. With the additional knowledge that we will have at that time, I am sure that once again we'll be indicating to the people of British Columbia that we do indeed have to invest heavily in dollars and in expertise in our forests if they are to maintain their present position in the economy and also in the esthetic and recreational benefits which flow to B.C. as a result of the management of that resource.

I'm sure that we'll have some interesting discussion on my estimates. I hope that we can address the plan to some extent, because I'm excited about it. I think it's an excellent plan. I would like to congratulate the managers in my ministry for the excellent job they have done in managing last year's program and also in putting forward a very comprehensive five-year plan this year.

MR. KING: Mr. Chairman, it's obvious to me that the Minister of Forests was taken by surprise when his estimates were called totally out of order, which violates the practice over the last number of years in this Legislature.

MR. CHAIRMAN: Order, please, hon. member. Hon. members, in Committee of Supply we discuss the administrative responsibility of the minister concerned. Clearly, hon. member, while the point you raised may be a valid one, this is not the appropriate time to raise that point.

MR. KING: It's obvious to me that the minister was not prepared to bring his estimates before the House this morning. He offered such a pale and weak description of the activities of his ministry over the past years that I know he was taken by surprise. We should be dealing with the Premier's estimates this morning, but as usual he's running away. He's afraid to face the House and the people of this province.

MR. CHAIRMAN: Order, please!

MR. KING: As usual, when he feels some heat he runs away either to Asia or some other far foreign place rather than face the issues in this province.

MR. CHAIRMAN: Order, please.

MR. KING: Mr. Chairman, there is no cooperation in this House.

[Mr. Chairman rose.]

Interjections.

MR. CHAIRMAN: I will remind all hon. members that when the Chair rises, all hon. members will take their seats at that time or will be removed from this assembly.

[Mr. Chairman resumed his seat.]

MR. CHAIRMAN: Hon. members, clearly it is the right of the government to call estimates in whatever order the government so desires. It is the responsibility of the members when debating the estimates that they relate to the administrative responsibility of the minister concerned. The opening remarks by the spokesman for the opposition did not so relate. I would ask the member, in continuing, to relate to the administrative responsibility of the minister concerned.

MR. KING: Mr. Chairman, I intend to relate to the minister's administrative responsibilities. Indeed I do. The point is that the minister is obviously totally unprepared to come before the Legislature this morning. I cannot help but observe that this move is totally without precedent in this Legislature. To allow it to go by without observation, in my view, would be remiss on the part of the opposition. We're prepared to deal with the Forests estimates. I'm most prepared and most enthusiastic about dealing with the Forests estimates. But that Premier should be facing the House. We're tired of "run away and hide, " so I move that the Chairman do now leave the chair.

Motion negatived on the following division:

YEAS –– 21

NAYS — 27

Hon. Mr. Gardom requested that leave be asked to record the division in the Journals of the House.

MR. KING: I think it should indeed be recorded in the Journals that the Premier was absent for the vote.

Mr. Chairman, look at them run. They're following the leader now. I assume that they're afraid to deal in alphabetical order because of the issues that are embarrassing them publicly at the moment. Before I get on to the estimates of the hon. minister, which I intend to do now, Mr. Chairman....

MR. CHAIRMAN: Order, please.

MR. KING: They're a gang of jackals, Mr. Chairman; listen to the interruptions. They're only going to be here for a few minutes, and then they'll skulk back to their offices like their Premier does, and in the meantime all they do is interrupt with nothing positive to contribute whatsoever. They take the lead from their Premier, who runs away and hides on every occasion.

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MR. CHAIRMAN: Order, please, hon. member. Again, I must ask the member either to return to vote 98, which is the estimates of the Minister of Forests.... Please continue.

MR. KING: Mr. Chairman, I assume that you shall protect me against the gang of catcallers from across the way so that I can address myself properly to the estimates of the minister.

There are a number of questions I have for the Minister of Forests, and I might say I was very disappointed in his initial dissertation. It was a very brief and pallid statement from an important ministry that, allegedly anyway, has a large budget to deal with the number one resource of the province of British Columbia, forestry. I'm going to try to elicit more specific information from the minister, because as I see it there are quite a number of conflicts that exist between the minister's stated objectives and the reports that have been filed in the Legislature this year. There are some very serious conflicts, as was pointed out by the budget speech read in the House some months ago by the Minister of Finance, wherein he predicted, and in fact indicated, there had been a major reduction in revenue from the forest industry in the current fiscal year, 1980-81.

I think it might be wise just to paraphrase the budget and to ask the minister how he might account for the discrepancy between this particular reference and the reference in his own annual report, which was tabled a few days later. On page 8 of the budget, it has this to say: "While forestry revenue declined as expected, log prices have held up better than anticipated. Timber sales revenue in 1980-81 is now forecast to be $341 million, $107 million above the original budget estimate. To put it in perspective, however, this is still almost $200 million below 1979-80 timber sales revenue." In the budget, which we are expected to believe, Mr. Chairman, it's indicated that there was a $200 million loss in forest revenue to the Crown in this current fiscal year. A few days later the minister tabled the report of the Ministry of Forests for the year ended December 31, 1980, and it has this to say in the deputy minister's message on page 1:

"The year 1980 was a mixed one for the province's forest industry. The timber harvest in creased slightly to $75 million cubic metres, approximately $1 million less than the record harvest of 1979, but" — and this is the significant part — "forest revenues in the province increased to $514 million, surpassing the 1979 record by $55 million."

It's obvious we can't believe both reports; one of them is wrong. I appreciate that there might be a discrepancy in the fiscal year, but there's certainly no indication, according to that, that revenue for the current fiscal year is down. Indeed, although there was a slight reduction in the harvest, revenue was up for the bulk of that year.

That being the case, and it also being the case that the government has based a great portion of their very large tax increases on the proposition that there was going to be a continuing decrease in revenue from the natural resource sector, I ask the minister if he can explain to the Legislature the discrepancy between the budget as introduced by his colleague the Minister of Finance (Hon. Mr. Curtis) and the annual report tabled by himself a few days later. I would be very interested in having the minister explain this precise discrepancy before we go further into the broader interests of his ministry's responsibilities.

HON. MR. WATERLAND: I think the member opposite, as he was asking the question, by and large provided his own answer. Our annual report, as he well knows, up until this year has been based upon a calendar year, and the Minister of Finance's and our projection for budgetary purposes is based upon a fiscal year.

The member recalls very well that at the end of the last calendar year we still had fairly substantial levels of stumpage because of the lag effect on the stumpage system, and prices were beginning to fall off at that time. So although we had a record in stumpage revenue, we already had the beginning of a decline in stumpage prices. We are anticipating a reduction in revenue this year because that lag effect has already taken place, and by and large, the industry will be on minimum stumpages — at least for the interior and a lot of the coast — this next fiscal year.

There is a bit of an anomaly in the level of stumpage on the coast because the log market, as the member knows, is the base upon which we establish our coastal stumpage charges, and the log market tends to distort prices and artificially buoy the estimated stumpage level when you have a reduction in sales, because it's only the better quality logs which are sold. That's one of the reasons that last year we felt it wise to put the small businessmen and independent loggers on special minimum stumpage. They weren't selling these high-quality logs, and the higher stumpage indicated really didn't reflect what they were getting.

But this year, by and large, we'll be on minimums. As I mentioned in my opening remarks, prices will probably remain low for most of the year. Even if they were to come back towards the end of the year, we also have that lag effect on the upswing in stumpage charges as well, and if there is an increase towards the end of the year, that won't be reflected in increased stumpage revenue until three months after the rise starts. Also this next year we'll probably see a reduction in the volume harvested, because as I mentioned in my opening remarks, the pipeline is full, the log inventories are high and lumber inventories are high as well.

In making forecasts of revenue, we and the Ministry of Finance have to recognize all the possibilities that can happen in that year as best as possible. We are in a year of very intense negotiations with pulp unions and the IWA. There is a possibility that there could be some labour interruption. We hope that doesn't happen, but we would be fools indeed if we were to carry on, as was done in 1974, and ignore that possibility and think that we are guaranteed that continuous level of harvesting. So a factor has been introduced, and I, the Minister of Finance and the Premier have all stated there is a factor which would recognize the possibility — even though I hope it's a remote possibility — of labour disruption and thus a reduction in our revenues during a period of time when harvesting is not taking place.

MR. KING: I think it's a rather sad commentary when the budgeting forecast for the province of British Columbia forecasts labour disputes in our basic industries. I think that does nothing to instil confidence in industrial relations in this province, in responsibility by the forest industry itself and by the unions involved in the forest industry, that they are responsible people and will negotiate in good faith to achieve a collective agreement. When we have budgeting forecasts based on the probability of an interruption, I think it is a very sad commentary and it shows a real lack of confidence. not only in the government in terms of its own Ministry of

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Labour's ability to head off this kind of thing, but it shows a lack of confidence in the industry as well. That's a sad thing, in my view.

The explanation that the minister gives for the disparity between the revenue shown in the budget and that in the annual report of the ministry does not explain it all away, of course. I appreciate that there is a different year involved. The annual report is the calendar year; the fiscal year ends at March 31. But it seems highly unlikely that the kind of performance that is noted in the annual report from December of the previous year to December of last year could be altered in the dramatic fashion that the minister suggests for the last four or five months of the fiscal year.

I think there is another purpose, quite frankly, in the pessimistic forecast of revenue. I think that pessimistic forecast has a great deal more to do with the political objectives of the government than it does with any reality or any scientific forecasting. I think this government has been shown in the previous budget debate to be more interested in creating surpluses now so that they might be able to buy the votes of the people at some election down the road. I think that's the real objective. It's sad when we see the budgets of important ministries such as Forests manipulated for those political objectives. It's a sad thing indeed.

The minister makes much of the five-year plan that was introduced in the House and the creation of the Forest and Range Resource Fund to induce and encourage intensive forest management and intensive silvicultural treatments over the next five years. I want to trace, along with the minister, if I might, my understanding of the handling of that fund in the first year of its existence. It was set up in March 1980, funded with $146.6 million. The first outline of the five-year program forecast that expenditures from the fund would be $19.4 million for the year that we're now discussing, for its first year of operation.

In actual fact what we see from an examination of the third-quarter financial statements, filed December 31, 1980, is that $14.5 million had been spent. That left a balance of $132.1 million in the overall fund. The 1981-82 budget shows that the balance of the fund at March 31, the end of this fiscal year, is $119.6 million. In other words, $13 million of that fund was spent in the last three months of the fiscal year. That seems an inordinately high amount of money when we consider that only $14 million was spent in the first nine months of the year. Total expenditures then from the fund were originally estimated to be $19 million in the first year. In fact, $27 million was spent from the Forest and Range Resource Fund. In other words, it was overspent by $8 million. Obviously that does something to the five-year forecasting of the fund. We have an overexpenditure of $8 million in the first year. Obviously the fund is going to be inadequate to meet the forecast financial commitments from it each year in the next five for intensive forest management — replanting, nurseries, silviculture, thinning and so on.

I submit, Mr. Chairman, that there was an overexpenditure in the Forest and Range Resource Fund to compensate for the reduction in the ministry's spending for the same year. There was a $3.5 million surplus left in the minister's budge — it was budgeted for but not expended in the same year. So it seems to me that we're seeing a trend develop here where in actual fact the ministry's own budget is not keeping pace with inflation — is not even being fully expended — but rather we are seeing the Forest and Range Resource Fund drawn upon to, in effect, subsidize the Ministry of Forests' declining budgetary allocation. The forecast is that in the fiscal year 1981-82 the Forest and Range Resource Fund will furnish $36 million, leaving a balance of $83.7 million at the end of the fiscal year. Now this may vary according to interest that accrues off that fund — I'm not sure what the minister does with the interest which accrues — but you don't receive interest on a fund of $146 million when you are spending $27 million and $30 million each year. It is a declining amount, in other words, that is available to draw revenue from in the way of interest.

As I understand it, and as the minister explained it, there is a new era in forest management in the province. The fund of $146 million that was set up was to be an extra injection of funds to meet the looming falldown in the forest resource — the falldown that was predicted in his range and resource analysis that was tabled in the House, I think, at about the same time. In fact it appears to me that this fund is being utilized to provide a subsidy for a reduced budgetary allocation to the minister's own department, I don't say this idly; I say it with, I think, the ability to demonstrate that the ministry's own budget is, in fact, declining.

When I look at the estimates of the minister's department for 1981-82, I see an overall increase in the budget from roughly $157 million in 1980-81. The estimates for the coming fiscal year show a budget of $162.5 million. That's an overall increase of pretty near $6 million — not a large amount when viewed in the large range of services that the ministry offers if we're to believe the minister's statements that he is going to have his staff people involved in greater research, in more intensive management, in the expansion of nursery capacity and a whole variety of functions that he has espoused as the objectives of his ministry for the coming years. A $6 million increase is not a great amount when viewed against inflation and against an expansion of staff that I would expect in the Ministry of Forests would be necessary to satisfactorily administer some of the new functions and responsibilities imposed by the Forest Act.

But what is more shocking, Mr. Chairman, is that we find in the same budget estimates that the largest increase is in building occupancy and computer services. Those two particular votes are up by $10.5 million. The total budget increase is only $6 million, yet building occupancy and computer services are up $10.5 million.

We find that there's no increase at all left in the field services, in the silvicultural area and in the vital votes of the minister's budget for really managing the forest resource. Vote 101 is the district forest and range resource management. What happened to that vote? It's down by $2,798,000 — almost $3 million. The only thing that went up in the minister's own estimates are votes that are completely redundant to managing the forest resource. This seems to suggest to me that with a declining budgetary allocation within the ministry itself the forest and range resource fund is going to be drawn on in a much heavier fashion to, in effect, supplant the shortage that is occurring in the minister's own budget. I hope I'm wrong. On the face of the figures presented to the Legislature, I'll be most interested in hearing the minister's explanation of the obvious conflicts that are apparent in the material provided to the House by the minister. I look forward to his comments in this respect.

'HON. MR. WATERLAND: The member for Shuswap Revelstoke said that he hopes he's wrong, and as usual he is.

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I mentioned again in my opening remarks — and I guess I'm going to have to keep saying it — that the total funding available to the ministry consists of those funds provided for in the blue book, the funds we use from the forest and range resource management fund and from section 88. All of these moneys are used to provide for the management objectives we have. The member mentioned that certain votes appeared to be going down and that those are areas which should be going up. Once again by looking at the blue book, the member realizes that there's quite a rearrangement of the votes. This is as a result of our reorganization of the ministry staff and the reorganization of our reporting and accounting processes in order to be compatible with that reorganization.

Last year the Minister of Finance put up an early warning sign, saying that revenues this year are not going to be as high as they had originally been projected to be. Each ministry was asked to provide savings. We had a $3 million saving in section 88, which was the industry sector. It involved various things that the savings were realized in. However, the industry was apparently not ready or able to use that funding last year for various reasons. We used the fund to offset most of those savings that the Minister of Finance required. The purpose of the fund is that we do not have to give up essential management programs when there are difficulties with the government's revenues. The very purpose of the fund is to allow us to carry on with our programs without radical reductions in the actual management efforts we were making in the forests.

The member asked: "Where is the increase in funding for increased nursery capacity?" He doesn't see it in the blue book. I'll say again that most of that funding will be coming from section 88. The ministry is going to level off its nursery capacity at about 100 million seedlings a year. The industry will be providing nursery capacity for 50 million plantable seedlings a year. That is a part of the partnership that we have between the private sector and the government in the management of the forests.

The member says that he sees a substantial increase in computer services. Somehow he rationalizes that that is not in any way related to forest management. I think he said it was "redundant" to forest management. The use of computers in the Forest Service is a very real part of our forest management. I hope that the member has visited our computer facilities. We have our mapping and inventory system computerized. The maintenance of the inventory and mapping records of our forests are in up-to-date condition as to what we're harvesting and also to what treatments we're applying, and it's an essential part of our total forestry management work. I don't know if that member realizes this, but B.C. has the most advanced forest inventory system of any jursidiction in the world. In fact it's being copied by many other countries — countries which have been noted for their forest management expertise. Finland, Sweden and the United States are all copying the IGDS system, which we have developed for the management of statistics on the state of our forest and range resource. It provides us with a great advantage in knowing what to do, where to do it and when to do it,

I have to re-emphasize, Mr. Chairman, that the forestry critic, I'm sure, will get on this wicket again and again, but our funding for our total management programs comes from three sources: our blue book, our section 88 and our fund. Our fund will be used whenever we have to use it in order to make sure that we can carry on with our programs. The fund was not set up for five years to be run parallel with the program. The fund can be enhanced. In future years as revenue increases we can replenish the fund, so we will have this constant level of commitment of dollars. We won't have to change our management objectives as funding for the provincial government as a whole changes. I think that's a very worthwhile project. I believe I've covered those points, Mr. Chairman, that the critic has raised in his last session. If I haven't, I'm sure that he will remind me.

I have one final point. In our first five-year program — I think the member has one in his hands right now; if he will look at page 29, year two of our first five-year program — the total figure amounts to $266 million. Those moneys are provided through our blue book, our fund and our section 88 offset. Those were in 1980 dollars. If you add inflation to that amount you will come out with a figure of $293 million, which is the bottom line in year one of our second five-year plan. That level of expenditure is right on target. We also had several issue papers which we went to the Minister of Finance with and had approvals for $7 million. That brought our total bottom line for year one of this program to just over, $300 million. The Minister of Finance then said that we must provide management efficiency savings to the tune of 2⅓ percent of our total allocation, which brings it down to $293 million — exactly where we had projected we should be in our first five-year program. So we are right on target. I'm sure that a ministry the size of the one that I have the pleasure of being the minister of, and with the people we have, can provide efficiency savings to that amount without having an adverse effect on any of our essential forest management programs.

MR. KING: Mr. Chairman, the minister's response to his ministry's budget and his accent on computers being so important to the administration of the Forest Service is understandable. I appreciate that you need a modern system to deal effectively with the inventory of the province particularly. However, despite his sophisticated computer system, the inventory reports that he promised along with the new act have been very slow in coming in some parts of the province.

[Mr. Strachan in the chair.]

The fact of the matter is that the largest increase here, up from $3 million to $10 million, is for building occupancy charges, not computers at all. The ministry hasn't grown that much. I don't see any, large explosion in staff. In fact, I think one of the concerns is the tremendous turnover in staff within the Forests ministry. I appreciate that the facilities, staff and functions of the ministry have to be housed, but I seem to get the impression from the budgetary allocations in his own estimates that there is a greater priority set on this mundane function, rather than the intensive management of the forests, which he said was his priority and his objective.

That priority is not reflected in the increased budgetary allocations. The highest priority here and the highest single increase is for building occupancy charges. Are you taking that out of our Forest and Range Reserve Fund too, Mr. Minister? For the first time the minister has admitted in his response that, yes, the fund will be used to offset any deficiencies in his ministry budget so programs can continue. That was not what he said at the outset, Mr. Chairman. He said at the outset that this large fund of $146 million was going to be available for intensive forest management and

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nothing else. I might have more confidence and I might be a little bit more assuaged in my concern by the minister's references to the write-offs in section 88 if I had confidence that the ministry had either the staff or the capability to monitor adequately those claims coming in under section 88. I think it was something like $94 million last year in write-offs against stumpage.

It seems to me what the minister is doing is playing games again with figures. He is claiming that write-off to industry from stumpage as dollars allocated from his ministry for intensive management. That's one way of doing it. I guess that's fair game in his form of bookkeeping. But I have little confidence that the ministry has the capacity at this time to adequately monitor those tax write-off claims, to ensure that the public is receiving value for the claims. I have some evidence — at least in some cases — that indeed they are not, that intensive forest management is being claimed in some instances as a means of reducing a company's stumpage allocation where the work is really not done.

I have no confidence in the staff ability. It's not a criticism of the staff; it's a criticism of the fact that there's no new hiring; there's no new provision or accent on developing a capacity to do this monitoring. Most of the field offices I've been in touch with are fully involved and committed in terms of staff and in terms of the traditional functions of the ministry in monitoring the industry's performance in harvesting, inventory and planning for reforestation. But they haven't got the staff capacity to go out and check adequately whether these claims under section 88 by the private sector are actually justified or not — whether they are accurate, whether they should be cut down, or whether they should be allowed at all. I honestly do not believe that in many cases, in many areas of the province, any monitoring whatsoever is taking place.

Yet we have the expenditure or write-off of $94 million in taxes that the private sector is claiming. Now we also have the minister claiming that amount as an expenditure by his ministry. In my view, it's a convoluted way of demonstrating his commitment to a new, intensified forest-management posture in the province. I just have no confidence whatsoever.

I want to tell the minister that people from the private sector say privately that there's no way the ministry has the capacity at this time to monitor those write-offs under section 88. They are concerned too that some companies will take unfair advantage of that write-off opportunity without performing the work that they are claiming the write-off for. I'm sure that many — I would say a majority — of the companies are responsible, would do a good job and give an honest accounting of the work they're claiming for.

Nevertheless, if we're losing anything in value, then it's injuring the public interest, and it's certainly injuring and eroding the objectives which the minister states he has — that is, to harvest effectively, to manage and farm the resource in the province of British Columbia. I have no confidence that the grand-sounding program with the high-budgetary allocation that was announced along with the first five-year plan is indeed going to achieve the increased plantings, the increased nursery capacity, and the increased intensive management that the minister assured us it would.

It's not only my own opinion in this regard. It seems to be borne out by concern in specific areas of the province. I note an article from the Prince George Citizen, dated back in January of this year, which was based on interviews with local Ministry of Forests officers. It stated that the Prince George region needs 56.4 million seedlings per year just to maintain a balance between wood growth and harvesting. The ministry's allocation to the district is just 30.4 million seedlings. In other words, the five-year plan, as it is called, does not include any backlog reforestation, and the stated target of halting the growth of NSR land — not sufficiently restocked or replanted land — will not even be approached. There are currently around two million acres of NSR land in the province. The number of seedlings available in the Prince George region is inadequate to keep pace with the annual allowable cut, much less to start catching up on this very large backlog of NSR land.

The local officers up there concede that it would not be an easy task to significantly increase seedling production in the short term, but they argue that the budget of the five-year plan needs to be dramatically increased if the region is to escape future timber shortages. This is the view that's reported of the minister's own staff in that region. It seems to confirm what I fear, that if you sift through all the rhetoric, if you sift through all the brave statements that the minister makes, when it comes down to the harsh reality, the financial commitment is not really there to meet the objectives that minister himself has set.

I can tell the minister that in my own area, in the Revelstoke forest area, there is a major shortfall of seedlings to meet the projected needs of the local forest service. There are two widely separated districts, Revelstoke and Prince George, both far below their needed seedling requests. If they're not receiving adequate seedlings to keep pace with the annual harvest, how on earth are we going to recapture all this land in the province of British Columbia which has not been adequately restocked and which is growing up with weed species and being taken out of commercial forest production as a consequence, land that will accordingly be far more difficult to get back into production once it has been taken over by species of trees that are not merchantable? It becomes a very expensive proposition to get involved in heavy site clearing and site preparation after this area has been left to the ravages of the weed species.

As far as I can see from the ministry's projections, from the handling of the fund, and from the very large write-offs in the section 88 claims by the private sector, at the end of this five-year plan I don't see us coming near the point where we will be recapturing much of this land that is now nonproductive forest land. We may start to reach a point where we have sufficient capacity to keep pace with the annual harvest, although that's questionable, in my view. But I certainly can't see any aggressive program that is going to start catching up on the NSR land.

The minister talks about natural regeneration. It's true that a percentage of the land harvested each year might be satisfactorily restocked in a natural way, but I think it's pretty sparse territory in the province of British Columbia where one could rely solely on natural regeneration to adequately restock the land. There are not that many areas. Indeed, many of the areas that are replanted with carefully selected genetically superior seedlings have to be replanted a number of times before they are adequately stocked. I think the same is true in natural regeneration. It's a bit of a hit-and-miss program. Certainly there are areas where it's much more possible, but the minister indicated something like 30 percent expectation of natural regeneration, if I heard him correctly; and I think that's extremely optimistic, if that is his view.

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The fact of the matter is that it is not borne out by the two million acres of land in the province of British Columbia that are out of forest production, as it were, or designated NSR, because they were left solely to natural regeneration. Obviously the bulk of that forest land was not adequately restocked by natural regeneration and it wasn't tended by any reforestation program. So what we have now is a very large chunk of real estate in the province out of forest production — a very large portion which should be productive forest land in effect sitting there idle, and now we're being called on to come up with some major budgetary allocations to try and recapture some of that.

I don't know — between that rather deplorable situation where this land is unproductive at the moment and the other pressures on forest base land in the province, some coming from the minister's colleague, the Minister of Land, Parks and Housing (Hon. Mr. Chabot), who is chipping away at good productive forest land to accommodate the needs of hobby farmers and other small private holdings.... Between those incursions onto the forest land base and the incursions of urban growth and sprawl eroding away productive forest land, it's no wonder that the ministry is predicting a falldown in forest production over the next 15 years unless something very radical happens to change this process. My concern is that the minister is playing with figures now and holding large sums up, in a way putting in a double claim for expenditure for the portion that is claimed under section 88 by the private sector for intensive forest management when in fact we may be receiving 50 percent value for that expenditure. I'm quite confident that the minister has no more idea than you do, Mr. Chairman, as to whether or not full value is being received for that kind of tax write-off claims.

I'd be interested in hearing the minister address himself to these questions, and I'd be interested in hearing him address himself to the precise question I asked on his estimates about the building occupancy charges. One of his explanations was: "Oh, well, there's been a reorganization and everything's been changed around." I know that because I've talked to many of the staff of the Forests ministry, and I can say there's never been more disaffection and dissatisfaction among the staff, who feel aggrieved because they feel they were treated poorly in the new organization. They feel that the years of service have not been adequately recognized and that many new people coming in have received advantage and preferential treatment over the old-timers — but that's an aside.

I'd like the minister to explain why the building occupancy charges went up in such a dramatic fashion and vote 101 has declined $3 million. The minister says the reorganization has resulted in different things, but vote 101 has this to say. This vote is to provide for a management program "to provide supervision and control for implementation of approved forest and range resource policies and programs in the 46 forest districts of the province, including the district managers, operations superintendents, support services supervisors, their salaries and expenses and those of their immediate staff." The finance and support services program, harvesting program, silviculture program, forest protection program, range program and recreation program are all contained in vote 101, and there is a $3 million reduction over last year's budget. That's hardly enough to keep up with inflation. Just to keep pace with the inflation factor one would have expected, in this very crucial area of his ministry's responsibilities, an 8 percent to 12 percent increase to accommodate inflation. There's not even that. We see a cut of $3 million and at the same time we see an increase of $6 million for building accommodation. Where you did take over all the new buildings?

I'd like to hear something from the minister. What does this mean? You set a higher priority on buildings than you set on the management of the forests of the province. Where are these buildings? Are they sitting here in Victoria? Are they all occupied? Did Treasury Board tell you anything about it? It's not good enough to come in with some bland statements: "Everything's okay, we've changed around and gone to a new style of administration." You're here to be responsible to the public of the province of British Columbia for the expenditure of every one of the dollars involved in your budget, and I want some specific explanations.

Mr. Chairman, I shall await those explanations, and I want to assure the minister that if they are not satisfactory, I and my colleagues are very patient and insistent people. We want some satisfactory answers because this is a most important area of the province's affairs.

HON. MR. WATERLAND: Mr. Chairman. the member for Shuswap-Revelstoke made a rather shocking remark. He says that he has indications or evidence, or something to that effect, that section 88 claims are being fraudulently used. If that is the case, I would certainly hope that he would share with me whatever information he has, because I'm not aware of that taking place. First of all, section 88 claims are all approved by the ministry before funds can be expended by the private sector, which they hope to claim back on section 88, and we do audit all expenditures — actual physical audits on what has happened. We don't, nor do I think we should, go into each and every site of each and every seedling, but we do audit what is taking place in a recognized system that assures us that things are taking place in the proper manner. However, any audit system can miss abuses, and I think that if the member for  Shuswap-Revelstoke has any evidence that fraudulent use is being made of section 88 he should share it with me. I wouldn't ask that he do it here. If he has that information, I would either come to his office or he could come to mine, so that we could have that information and follow up on it. I think that would be his responsibility as a citizen of the province, as it would be the responsibility of any citizen who has such information.

Mr. Chairman, it is quite difficult to make straight-line comparisons between last year's figures and this year's because, as the member knows, there are changes in what the votes include. However, the building occupancy charges are higher. This is for a couple of reasons, one of which is our reorganization in which we are moving people to other areas. The main reason, I guess, is the change in many of our field operations from our actually owning and managing the facilities; we have to B.C. Buildings Corporation doing that. They are taking over some of our buildings. We are going into areas where we do not have facilities, and we have to go directly to BCBC for facilities. I understand from my staff that we have about 35 capital projects budgeted this year for either occupancy or change from our owning and operating to BCBC's owning and operating and billing us for it. I would not consider the provision of adequate working facilities and office accommodation as a mundane function, as the member for Shuswap-Revelstoke mentioned, because the proper housing, facilities and working conditions for our staff are extremely important both to them and to their ability to meet the workloads which they have.

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Once again the member is getting into isolating numbers in the blue book from the total projected expenditures. I really don't care whether the money comes from the blue book, from the fund or from section 88 offsets, as long as it is available to us to do the things that we must do. The member says that section 88 has nothing to do with forest management and reforestation. We have quite a number of new private nurseries coming on stream, which are allowed for under offsets in the forest industry. That certainly has a great deal to do with forest management. Forestry work after harvesting carried out by the industry certainly has a great deal to do with forest management.

Concerning the pace of implementation, we are expanding our ability to produce and plant seedlings at quite a rapid rate. Of course, many people are saying that we should go much more quickly, but we can set our target so high that we'll achieve nothing. Yes, in years to come, perhaps, we should have a level of seedling production at 200 million seedlings per year. Last year we suggested that 117 million was the objective which we could reach at the end of the first five-year period. Now, because of the enthusiastic response from the private sector and the granting of funds by the Minister of Finance, we have raised those sights considerably. We have raised our objective from 117 million to 150 million seedlings in a five-year period.

I think, according to those people who are going to be responsible for providing those facilities, that that is their best estimate right now as to how fast we can achieve that objective. Perhaps next year we can raise that sight again, but right now we don't think we can. Many people in the private sector and in government agree that that is the best rate of increase that we should attempt to achieve right now. Certainly there are individuals in the private sector and in government who say that you should do it more quickly, but the general consensus is that that is about the best rate of increase. Interestingly enough, the Okanagan forestry association has presented a plan for their participation. Their rate of increase is projected at a curve very similar to ours.

We both recognize the fact that we'd like to do more, but it's not like turning a switch. It takes some time to establish a nursery — to make sure that you have the proper seed for it and that you can manage it properly and actually produce plantable seedlings. Our actual nursery capacity by the end of this program period will be 168 million seedlings. From that we hope to achieve 150 million which are plantable, because growing seedlings is much like an agricultural operation — you are subject to weather conditions, losses, and every seed you, plant doesn't develop into a seedling.

I guess I'm no more competent, technically, than the member is to discuss what part of the land harvested should be naturally planted — I have to take advice from the Forest Service and professionals. The level of planting of currently harvested areas will have increased to about 50 percent by the end of the program period. We will still be relying on natural regeneration for about 50 percent not 30 percent, as the member mentioned. Natural regeneration is very effective in probably more areas than he or I realize, according to the advice I get from the professional foresters.

My chief forester advises me that in the lodgepole pine stands in the central interior 98 percent of the areas which have been designated for natural regeneration to lodgepole pine are stocked or overstocked — some of them overstocked to such a level that we're going to have to expend a great deal of money in thinning. Their thought process now is: do we try to suppress natural regeneration and go in and plant in order to avoid that expensive thinning process later on, and if so, how? That's where our research comes in. How do you do that? How do you suppress the natural regeneration, and if you can, can we produce the seedlings to go on in and plant it naturally? Then will there be undue competition of seedlings you've planted with the stuff that will come along in any event? There are lots of technical questions that need answering. That's why, over this five-year period, we're more than doubling our research budget and will be (carrying out our research under other programs and votes as well.

The backlog NSR is a very difficult thing to get a handle on. What regeneration delay is acceptable? Is it three years, is it 10 years, is it 15 years? And, of course, it depends on where you are. We will survey for restocking once and go back seven or eight years later and find that land that was previously NSR has now naturally restocked. I don't think it's good enough to wait that long. I think we should be planting more, and our program says we will be. Hopefully next year we'll be raising those sights again, but let's not raise them to such an extent that we fall flat on our faces, that we do it wrong or don't meet the objectives, because that would be counterproductive.

The member suggested again that section 88 provides us only 50 percent of the value of the credits we provide. I don't know how he arrived at that figure, but I would suggest that we should be getting, and I hope we are getting 100 percent of the value. I think that by and large the private sector does a more efficient and cost-effective job than do governments. That is why we are trying to encourage the private sector as much as we possibly can in this type of work. We do audit. Occasionally, I guess, our audits show inadequacies and we follow up on them. Once again I would urge the member, if he has specific examples, to give them to me in confidence. I will follow them up.

I think that pretty well covers the questions asked recently, Mr. Chairman. Again though, the pace of implementation is something that we have to be very careful about. For example, in all the forest regions in B.C., sowing requests of 209 million seedlings have been submitted for a year and two years hence. Recall that last year, for the first time ever, we planted 75 million. I don't think that we have the capability in people — we certainly don't in seedling production — to either plant or prepare the acreages required for that level of planting. I don't think we could do an effective job. This is not my opinion. It's the consensus of opinion by professional people in forestry. So let's move ahead as aggressively as we can, but let's make sure that we are doing it properly and not fall on our faces.

MR. KING: Mr. Chairman, the minister's comment about companies fraudulently claiming under section 88.... Well "fraudulently" was his word, not mine, but, you know, that's semantics; to some extent I agree. My main point — and what the minister seems to miss — is that the system that he has designed lends itself to abuse. Here is a system, and I ask the House, Mr. Chairman, if it knows of any other area of endeavour in our society and in our economy where a group of people — the private sector forest industry in this respect — has the ability to write its own ticket to the tune of $94 million in tax write-off claims.

The minister makes the point that their plans for these tax write-offs have to be approved by his field staff, by the district manager — that's true. If it were just nursery capac-

[ Page 4681 ]

ity, that's pretty easily dealt with — it's pretty easy to identify the cost and the number of seedlings produced and so on — but it becomes much more complicated than that. Intensive forest management, intensive silviculture, means a whole variety of things. They come in with a plan and the district forester says: "Yes, that's good. You've got a thinning program on in this particular part of your licence. Go ahead, and we'll approve the program."

My proposition is that the ministry lacks the staff to get out in the field to investigate whether or not this work is actually being done in the area of thinning, replanting and possibly in the area of fertilization. There is a whole variety of things; it's wide open. It allows virtually any program, I believe, if I remember section 88 correctly, that the district manager approved. My proposition is — and it's supported by the point of view of many people in the minister's own staff, certainly at the regional level — that there is just not the capability within the ministry to monitor these tax write-off claims. I

I have no evidence of fraud. I do have the opinion of some field staff officials around the province who have looked with a very jaundiced eye at some of these tax write-off claims that have been submitted and have said: "Well, we approved them because certainly we didn't have the staff to go out into field and examine whether or not this work had been carried out and whether the public was receiving value for this gift of tax money to that particular company." That's a lot of money, Mr. Chairman — a $94 million tax write-off.

There is a larger question involved here, and that larger question is: is the public receiving fair value for the forest resource? The private sector, as the minister indicated, is on minimum stumpage; last year they wrote off $94 million from their stumpage costs — a claim against some form of intensive management. The question is what the users of the forest resource should be asked to contribute to the regeneration of that resource. Is it fair, is it equitable, that the public purse underwrites the total cost for renewal of the forest resource which is harvested by these various private companies? Has the minister done any cost-benefit analysis to ascertain what it is going to cost the public in terms of ensuring a new crop of timber 10, 15 or 20 years down the road in terms of their public output of dollars as opposed to the kind of revenue that is generated to the Crown from the use by the private sector? There is a massive public investment here. The question is: is the private sector meeting its obligation in terms of ensuring that the resource that they live on is regenerated and a new supply is available?

Is the revenue that we receive from the private sector operation adequate to offset the public investment in the forests of British Columbia? I'm concerned in this regard. I don't know of many other industries where the raw resource is renewed totally at public expense. The user of the resource perhaps has a decreasing contribution to make in terms of revenue to the Crown, through the wide-open characteristics of section 88 particularly. I worry about that proposition, Mr. Chairman.

I would like the minister to comment on whether he has looked at this equation or done any cost-benefit analysis. The whole question of the adequacy of stumpage in the province of British Columbia has been debated long and loud in this province. We on this side of the House do not believe that the private sector is making an adequate contribution to the revenue of this province from their right to use the people's resource. Academics from the University of British Columbia who are familiar with forestry come to the same conclusion when any comparison is drawn between the return of revenue to the Crown from British Columbia forest resources and the return that the government south of the border receives in the Pacific Northwest. There's a great disparity.

What we're apparently seeing here is an ever-increasing public contribution to the continuity of the forest industry to the sole benefit of the private sector. It's in everyone's interest that we have a healthy forest industry. The real question is: at what cost to the public and at what benefit to the public in the long term? Is the private sector receiving the sole benefit of this massive public investment? Surely the minister would agree that the public demands a fair return on its investment as well. Surely the minister would agree that that return on investment should not just relate to jobs that accrue from the industry when we're asked to put out hundreds of millions of dollars a year. In terms of ensuring that the avaricious appetite of that forest monster out there is fed adequately in the years to come, the public should have some security and assurance that they are going to receive a fair return on their investment in the supply equation too. I'd like to hear the minister comment on that.

The minister has been fairly cooperative this morning, but he hasn't satisfied me that he really has a handle on the objectives of the ministry. He hasn't satisfied me that he has a real handle on the section 88 claims particularly, and that one worries me greatly. I want to reiterate to him that when you set up a program providing for that kind of claim by the private sector or anyone else, there ought to be an effective system of policing that fund. I'll ask my colleague from Vancouver East. Do you think this government would allow the welfare recipients of this province to claim $94 million in one year as a deduction on their income tax without a program to go around and police, investigate and sleuth those claims to make sure they were valid and had satisfied the program upon which their claim for tax write-off was based? Ninety-four million dollars is a lot of money.

The first member for Surrey (Hon. Mr. Vander Zalm), the Minister of Municipal Affairs, when he was Minister of Human Resources, hired a whole army of sleuths to go around and investigate welfare recipients. They receive a cheque of $140 a week in some cases. He didn't trust them to make these claims on the Crown without a system of sleuths to go around and investigate the validity of those claims. Here we have a Minister of Forests who has presided over $94 million in claims on the Government coffers by the private forest industries of this province without any system of monitoring by going out in the field and investigating that their claims are valid. He says we have to trust them. How is it you trust the corporations but not the people of the province?

I'd like to hear some further explanation from the minister on precisely what he has done. How does he ensure that those claims are valid? I'm referring just to the accounting. I'm not referring to someone getting out in the field and making sure that those programs upon which the claims are based are fully implemented.

HON. MR. WATERLAND: Mr. Chairman, I've been over this ground a number of times. I don't know how often I have to say it. We do have what we consider to be an effective auditing system for auditing programs carried out under section 88. It has been improved tremendously over the last few years. I’m not saying that it can't be further improved. The auditor-general is currently reviewing the systems we

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use. Perhaps she can make recommendations for further improvements. If she can, we would certainly implement such recommendations. However, at the present time the people in my ministry who are responsible for these accounting processes are satisfied that we are doing a good job of monitoring and auditing and that we are getting good value for the moneys which are credited under section 88.

I guess we will get into the age-old arguments about stumpage revenue. We have said each year, I guess, that we can't make simplistic comparisons between the United States and here. You have academics who, you say, support the fact that there should be higher revenues, and other academics saying that that's not the case. I would hope that the member opposite has responded to our White Paper on stumpage, because if he has any advice I would certainly be willing and happy to look at it and, if he had some good ideas, incorporate it into what could be a revised stumpage appraisal system. I know this is not his function. He has no more expertise in this area than I do, but perhaps he knows of people who can assist him and help us devise an even better and more equitable stumpage appraisal system.

On the revenue received by the government, in the last, few years we have averaged about $9 per cubic metre in direct revenue which can be attributable to the forest industry for every cubic metre that we harvest in British Columbia. This should be rising in the future as the value of our forest products rises. But if we look at the total benefit of our forests to the province of British Columbia, every cubic metre of wood that we harvest in British Columbia provides about $70 in export value for our province, over $30 in labour income in the province, and $9 in direct government revenue. Our forest industry in British Columbia directly supports 10 percent of our labour force and indirectly supports another 15 percent. There are 24 pulp and paper mills in the province and over 700 sawmills. Other plants....

Interjection.

HON. MR. WATERLAND: We seem to be getting some static from behind the bush over there, Mr. Chairman.

There are 30 veneer and plywood plants and literally hundreds of smaller shingle and shake plants in B.C. These provide many opportunities and jobs in British Columbia. Our forest industry is vital to us. We do get what we consider a fair and equitable return on the sale of Crown timber. If we can get more we'll attempt to, but we're not going to do that at the expense of crippling this industry which means so much to the economy of British Columbia.

A short time ago Mr. Nixon suggested that we're missing out on $2 billion a year in forgone stumpage revenue. I would certainly like to see numbers which can prove that point. I'd be very happy if he would prove it, because I know the Minister of Finance could well use another $2 billion a year in revenue. The simple fact of the matter is that it is not there. That kind of revenue does not exist. The total value of forest products exported from British Columbia last year was in the area of $7 billion, and if somewhere in that $7 billion we're missing out on $2 billion I'd sure like to know where it is. Perhaps the member can give me some advice on that — not general, bland statements, but some specifics. I wouldn't expect him to do it here, but once again I'd be very happy to discuss it with him or with any experts who he might be able to come up with.

MR. KING: The minister has requested that I respond to the White Paper and come up with some information, advice and guidance with respect to the stumpage appraisal system in the province. I thank him for that, and I want to advise the minister that if he has other functions in his ministry which he would like to relinquish I would be glad to assume them also. If he wishes to leave his office and find some other avocation in life I'll take over completely. I'd be glad to cooperate in that fashion, and I should think the people of the province of British Columbia would hail it as a new era.

He says revenue from stumpage is pretty good. Well, we get $9 here, $9 there. The problem in the value of the return to the Crown is that we have nothing to compare it with. The minister hasn't got a clue whether $9 is a fair return, the public hasn't, and people in the industry don't really know. There's only one way to find out whether we're receiving a fair return on the resource, and that's to inject some competition back into the industry. That government, which calls itself a free-enterprise government, has presided over a complete and utter monopoly coming together in the forest industry with respect to the right to harvest our resource. There's no competition any more. If we want to find out the true value of the resource, let's have the users compete on an open market for the availability of supply. That's the way we have traditionally established the value of a commodity in an open free-market system — is it not, you free-enterprisers over there? They're not free-enterprisers, Mr. Chairman; they believe in monopoly. They believe in allowing the giants to tie up and exercise a monopoly control over the people's resource in this province. That's why we don't know whether or not we're receiving a fair return through stumpage. There's no competition whatsoever.

I get a kick out of the Minister of Forests. He's a brave man who is going to inject some competition into the the small operators' area of the forest industry — the timber sale and harvesting areas. I understand that he has a policy now that he's going to cut back some of these licences by 25 percent. Is that not correct, Mr. Deputy Minister? That's what I'm told. Just nod if that's correct. There will be a 25 percent cutback for the small operators on their licence holdings, but there'll be a 100 percent supply for MacMillan Bloedel, Crown Zellerbach and those "big eight" integrated companies in the province. There'll be no cutback or competition for supply there. After all, they've got something like 80 percent of the resource tied up in the province of British Columbia, if my memory serves me correctly.

It's good enough to have some competition in the small enterprise arena. Why is it not then with respect to the vast holdings within the tree-farm licences of the province? If you want to establish the true value of the resource and determine whether or not the public is receiving a fair return, it's easy: cut them back 25 percent. Let them compete on an open log market. Let them bid against each other to determine the true value of the resource. What's wrong with that? The minister seems brave enough to indicate that he's going to impose this on the small concerns of the province of British Columbia. There is some grave inconsistency in the minister's approach. That's one inconsistency. He seems willing to inject some competition for the small holdings of the province that exist on the periphery anyway.

The other inconsistency is that when he brought in the new Forest Act and set up new regulations and a new approach in the forest industry of the province, the act provided for longer tenure — perpetual tenure, some say — for the

[ Page 4683 ]

large TFL holders. It provided no such continuity of supply for the small entrepreneurs in the forest industry in the province. Mac-Blo and the big five received their licence renewals without interruption, without public hearing, without competitive bid — a smooth transition from one structure of legislative administration to the new act. There was absolutely no interruption in supply for the large industries in the province. But the small industries all through the length and breadth of this province — up in the interior in the riding of the Minister of Lands, Parks and Housing (Hon. Mr. Chabot), in the Premier's riding, and in my own riding — are still sitting around waiting to learn whether they are going to have a supply of timber to sustain their sawmill, their small plant or whatever it may be. The ministers know that.

The minister says: "Oh, well, our inventory of that area is not complete yet, and therefore we haven't been able to make allocations; we haven't been able to determine whether one person has too much; we may have to take some away." How was it that they provided a smooth transition of monopoly control for the MacMillan Bloedels, the Crown Zellerbachs, the CANFORs and the B.C. Forest Products? There was no interruption whatsoever. The stock reply is: "Well, these large investors have to know that they have continuity of supply to justify their large investment in plant." There's no risk whatsoever. It's an absolutely firm supply. I suggest that in many cases there has not been adequate inventory there either to determine whether or not they have a surplus to their needs. I make that suggestion. Out the door with you. That minister from the north would never speak out in favour of small business in this province; and he's supposed to be the Minister of Small Business Development. It's in the monopoly grips of the large corporations. There's no intent and no desire to inject some competition into the forest industry of the province.

The other area was that the large operators in this province were treated in a very preferential way. As I indicated, many small operators from the Premier's riding, from the Minister of Lands' riding and from my own are writing letters to me. They're coming down to see me, asking if we can learn from the Forests ministry whether or not they have any future role to play. In some cases they've been operating for 25 years with no firm timber supply — or very little. Many of them are faced with large capital outlays for new plant, either to comply with pollution-control standards or for a greater efficiency in utilization. Before coming up with that capital investment, they want to know that they have a role in the industry and that there is going to be a supply of material available to them. The minister says: "Well, hang on. We haven't finished the inventory." He just keeps you dangling like a yo-yo. "Just hang on and maybe we'll have an answer for you at the end of next month, next year or some other obscure time down the road." How differently they are being treated by a government that claims to be dedicated to small, competitive enterprise in this province. Nonsense! It's a complete and utter sham.

That minister has the gall to sit there and chew on his little pinch of Copenhagen and suggest to us: "Well, we're probably receiving a fair return on the forest resource; we get the jobs that accrue from it." The fact of the matter is that there has never been any businesslike cost-benefit analysis conducted by that minister or his government to determine whether the large public investment in forest renewal is providing a decent return to the investor — and the investor is the people of the province — or whether in fact the return on normal harvesting of the province of British Columbia is fair in comparison to the return received just south of the border in Washington and Oregon. Complicated formulas, a different approach, but there is a simple way to cut through that bureaucracy, to cut through that red tape on those complicated discrepancies in formula. and that is simply to create an open competitive market and let every firm in this province compete — at least for 25 percent of their needs — and see what happens to the bid value of logs in the province of British Columbia. That's the answer. All that is required is that that minister and his government screw up the courage to apply this kind of policy to the forest giants in the fashion that he apparently plans to apply it to the small enterprises in the forest sector.

[Mr. Davidson in the chair.]

I have one other simple question to ask the minister at the moment, and I'd ask the minister's cooperation in responding specifically. What is the policy of your ministry with respect to the size of forest corporations in this province? Do you have a policy that sets an optimum size for any forestry concern in this province? What is the formula? What are the criteria? Where do I find a copy of this policy? It's not contained in the Forest Act, as I understand it. Was it passed by order-in-council, by regulation? How has it developed? And could the minister tell me at the same time what firms in the province of British Columbia have now achieved their maximum allowable size under the guidelines, if indeed they exist?

HON. MR. WATERLAND: Mr. Chairman, I could't really identify too many questions. In the last remarks the member made he talked about open competition within TFLs, outside of TFLs, the dastardly things that we are doing to the small business people in the province. Actually the small business program is developing quite well. We had well over 400 sales last year, and we have identified a lot of administrative problem areas, which we're addressing. We are making changes to avoid some of the abuses that have taken place — both by the small independents and by the larger companies — but I think there is a great level of self policing now taking place. The industry knows that I'm going to make that program work, and they are now becoming very involved in the policing of it; I mean both the small sector and the larger sector.

A cost-benefit analysis of return on investment in moneys invested in forest management? Yes, we have such studies. I don't think that the classic economist can apply the normal criteria he uses to justify whether or not your return on investment in forest management is a good investment in terms of dollars, because your time spans are so large, but even in spite of that there is a positive return. It's probably not sufficient to justify putting money in those places, but really you can't afford not to invest in the forests of British Columbia. We have to maintain a level of social and economic stability in the province, and you can't attach dollars to that. You can't ask how much it is worth to maintain that community out in British Columbia, which may have difficulties in 40 years' time if we don't make the investment now. So you can't put it in crass economic terms; it's the sort of thing where you have to apply lesser demands on return on that investment and recognize the social and other economic factors.

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Again, on open competitive marketing, the member for Shuswap-Revelstoke is suggesting that we do what is done in the northwestern United States. I hope he's aware of the number of plant closures that have taken place over the last year in that part of the United States; we certainly wouldn't want to see that type of thing happening here in British Columbia. Community stability and job continuity are important to us, and the industry by and large, even in spite of very low lumber values and markets, has had very few layoffs. There have been some short market shutdowns, which adjustments are necessary from time to time, but by and large we've maintained the level of activity — even through this rather bad market year — very, very well.

Concentration in the industry. I and the government have said there is an upper limit to the size we would like to see companies in British Columbia become. MacMillan Bloedel is now the largest forest company in B.C. In terms of its control of allowable cut, and we have said that we wouldn't like to see other companies become larger than M&B in terms of the allowable cut they control. If they wish to become larger in terms of values of products produced, we'd be more than happy to encourage that because that means they're doing further manufacturing with the wood flow they have to use. We would like to see more paper plants and more added value in British Columbia, and we would encourage all of the industry to do that. But we don't want to see too great a concentration of the allowable cut in the hands of individual companies.

M&B right now has just under 14 percent of the allowable cut of Crown lands and private lands in British Columbia, and we're saying that this is the upper limit. But we are saying — and I'll say it to you, because that will be your next question — that we think the British Columbia Resources Investment Corporation should be allowed to become larger than that because it is owned, by and large, by people here in British Columbia. We believe the control of the resources of British Columbia should be in the hands of British Columbians as much as absolutely possible. So we will allow BCRIC to get larger, but we won't allow other companies to exceed the present controlled allowable cut that M&B has. If M&B wanted to double the value of the products they produce by doing more manufacturing and producing more expensive products in B.C. that would benefit all of us; of course that would be fine. It would create more jobs and opportunities here in British Columbia.

There was some speculation in the media a couple of days ago that we had a master list which listed the maximum size that various individual companies could get to. There is no such list. We, of course, have statistics which show the percentage of the allowable cut currently controlled by various companies, and we use this information when acquisitions are proposed to us to see what level of concentration that type of acquisition would create in the industry in B.C. Not only is there this upper limit on the size of companies, but we also must address the problem of regional domination. A company could well have less allowable cut than M&B but be tending to concentrate too much of the economy in a specific region of the province under one owner. We don't think that would be socially acceptable or advisable in British Columbia. We like to keep a balance in the various regions so that, one company is not the only employer in a town or a part of the province. You then get into the company-town syndrome where everybody works for the same person and is subject to that person for his employment, and that could, perhaps, stretch into domination in other aspects as well. That is our general policy on concentration. I think it's a good policy and a policy which will benefit the people of British Columbia.

MR. KING: I'm particularly interested in this policy regarding the optimum size of a company. I was not aware that MacMillan Bloedel was the model that the government intended to use for deciding the growth potential of industries in the province of British Columbia. I'd ask the minister when this policy was developed and how it was developed — in fact I did ask him that previously and he didn't respond. Does the industry know about it? Did MacMillan Bloedel know about this policy prior to the Premier's statement the other day? Did the minister know about it prior to the Premier's statement the other day? I'm struck by the similarity between this program and another program I've heard about. There's some other country that I seem to know that is famous for five-year plans relating to growth.

AN HON. MEMBER: No competition.

MR. KING: No competition. I think there's also a policy over there in terms of the optimum size of the communes, the size they're not allowed to exceed. This secret policy drafted by a so-called free-enterprise government is really something.

AN HON. MEMBER: You've gone so far right that you've gone commie.

MR. KING: That's right. There is a natural evolution of the communists and the Trotskyites or the neo-fascists. It spells the Trotskyite philosophy when full cycle has been achieved and the ends become the same in terms of obtaining those objectives.

I think it's interesting that we had a brand new Forest Act introduced in 1978. We had a full and lengthy debate in this Legislature on the provisions of that new Forest Act, and nowhere was it indicated that there was some kind of secret policy to limit the size of corporations in the province of British Columbia. Nowhere was it indicated that the size and growth of the industry would be dictated in secret behind cabinet doors, where the favourite contributor, perhaps, to Social Credit coffers might get the nod in terms of growth potential. What a system! It lends itself to pork-barrelling of the old school — the old style. There were no publicly stated criteria — just some secret whim of the cabinet and some secret whim of the Premier, I suspect. He was the first one that let the cat out of the bag. What does he know about forestry? What does he know about British Columbia'? He's always on the road — always running off to Asia or some other far-flung exotic place to escape his responsibilities in this province. He spends more on travel expenses than on the budget for the whole Forests ministry. What a gang,

These people who claim that they're the devotees to free enterprise make secret policy behind closed doors. They set up monopolies in the forest industry and provide them with absolute tenure on a perpetual basis, but then secretly wheel and deal behind closed doors as to who will be allowed to grow and to what extent and how the resource will be dished out in terms of feeding this growth potential. Then one day, very secretly, the Premier lets it drop that there is such a policy.

[ Page 4685 ]

MR. LEA: Bob Sommers told you.

MR. KING: Yes, maybe Bob Sommers told the Premier about it. I think it's rather scandalous. Then the minister says....

Interjections.

MR. KING: My colleague, I can put up with the Premier prattling and interrupting, but I do want to get some more information out of the minister.

I want to know a bit more about this policy. I want to know whether the industry was advised when this policy was struck. The minister responds: "I know what your next question is going to be. How come it doesn't apply to BCRIC?" He says BCRIC is different; it's owned by the public. I don't know about that. I thought it had become a private company operating in the public sector. That was the description. On that basis it's the same as any other company. The Premier said that he would cut any strings that were attached to it. Now we find the government providing preferential treatment to BCRIC. They are relieving BCRIC of the same kind of strictures that they put on MacMillan Bloedel. It's interesting, because BCRIC is probably half-owned by eastern Canada now. Certainly not many people on the B.C. investment scene seem to show a great deal of confidence in its stock.

It's interesting that that is viewed as one of the favoured companies and is allowed to grow beyond the scope of MacMillan Bloedel at this point in time. MacMillan Bloedel, as I understood it, was a British Columbian firm. I think MacMillan Bloedel is a good company. I think they're pretty efficient. I disagree with some of their policies, particularly their investment policies. I think they should be required to compete for their supply of timber — and that's true of all of the companies in the province — but I think it's a pretty responsible and efficient company.

HON. MR. GARDOM: What about their investment policies?

MR. KING: I don't agree with some of their investment policy regarding large investments of funds earned in British Columbia in places like Alabama and Brazil. I think the revenue generated from our resource should be largely returned to the benefit of our own province. I find it rather interesting that the government has decided to discriminate against this company, which is a major British Columbia company. It is in favour of a company that is the brain-child of the Premier, a company which is limping along in crippled fashion and probably falling constantly to a greater degree into the hands of those eastern Canadians the Premier said could never buy a piece of British Columbia. There's no consistency here whatsoever. It's a rather hypocritical approach for the government to take. I want to ask the minister when the forest industry of the province of British Columbia learned about this policy. I'm most interested in what the minister has articulated about it. When did this policy come into play, and when did the industry learn of it? I want the minister to reply now.

HON. MR. WATERLAND: The member just said that the Premier divulged a "secret" policy some time ago, but it's been spoken of by myself and the Premier in public a number of times. How one can publicly speak of a secret policy I really don't know.

The member made reference to a five-year plan and compared it to those of other countries which have five-year plans. I hope he is not saying that, we shouldn't have a five year forest management plan. We have a five-year plan; we have a 20-year-plan; we have a 100-year-plan. I had lunch the other day with a gentleman from Finland who had just come back from Russia, and he told me of a particular machine that had been bought by the Russians, which they had never got around to putting into place. It was a paper machine. However, their five-year plan indicated that after three years certain parts would be worn out and they must buy new parts. So the Finns got orders for these new parts, because the five-year plan said new parts should be ordered by then, in spite of the fact that they hadn't yet put the paper machine in place. That is the general type of philosophy to which these members opposite adhere — the socialist blind running into oblivion.

I've said as clearly as I can what the policy is. It has been in place for a number of years now. I can add no more to it. I'm very surprised to hear the member opposite say that we should have no limit on the size of companies in British Columbia and they should be allowed to grow and to monopolize the province. Personally I think that corporate monopolies are almost as bad as socialism — not quite, but almost.

The member mentioned these corporate giants coming into our cabinet rooms — these contributors to a Social Credit fund to get special favours. I'll tell you, Mr. Member, the people who contribute to the Social Credit funds are the people of British Columbia. Thousands and thousands of people of British Columbia contribute to our funds, and we are representing those people now and we will be for many, many years to come.

Interjections.

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

MR. KING: Will the Premier try to contain himself, please. I hear a raucous voice spoiling my powers of concentration.

The minister in no way answered my question. He distorted the question completely. He said: "Oh, I didn't know the NDP was in favour of no limitation on the size of a corporation: that would be monopoly." How foolish. How childish. I don't care how big the company is. What I do care about is them holding a monopoly grasp on timber supply in the province of British Columbia. If the minister can't get that through his head, he doesn't understand the difference. I don't care how large the firm is. It should not hold a monopoly grip on the public resources of this province. There should be some competition, regardless of the size of the firm. If the minister doesn't understand that, I'm afraid he will never perceive his responsibilities to the people in any responsible fashion.

He didn't answer the question I put to him, Mr. Chairman. If he says that that's always been the policy of the government, it was certainly not known and was never articulated. It was not contained in the legislation. It was not contained in the five-year plan. It was not contained in the annual report. nor did the minister ever announce it either in this Legislature or elsewhere. The first that the media of this province or the opposition heard about it was just a couple of

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days ago when the Premier of the province said there was an optimum allowable size for any forest industry corporation in the province. That's the first we heard about it. The minister hasn't answered the question. He's just evaded the real question, which is: how is that program governed? What are the criteria for establishing these questions? Because he is not very responsive to the questions that have been put to him, Mr. Chairman, I move adjournment of this debate until the next sitting of the House.

MR. CHAIRMAN: The motion is that the committee rise, report progress and ask leave to sit again.

HON. MR. GARDOM: On a point of order, the motion was made earlier by the same hon. member. We haven't had a transaction of business. I raise the question, Mr. Chairman, as to whether or not the motion is in fact in order.

MR. CHAIRMAN: The previous motion by the committee was that the Chairman do now leave the chair. The motion is in order.

Motion negatived on the following division:

YEAS — 21

NAYS — 28

Hon. Mr. Gardom requested that leave be asked to record the division in the Journals of the House.

MR. SKELLY: Mr. Chairman, just to change the subject a little bit and become a little more specific, I'd like to ask the minister a few questions about a problem in my riding. I know that the minister has responded to some requests to take a look at the problem, along with the Minister of Tourism (Hon. Mrs. Jordan) and even the Minister of Environment (Hon. Mr. Rogers). It has to do with the west coast of Vancouver Island, which I'm sure the minister will admit is one of the most beautiful areas in British Columbia, if not in the world.

HON. MR. GARDOM: Where?

MR. SKELLY: On the west coast of Vancouver Island in what's left of Alberni constituency after Mr. Eckardt took a look at it.

It contains the western most national park of Canada, beautiful beaches, hot springs and some of the most beautiful scenery in Canada. The potential is absolutely fantastic for the money that area could bring into the province in terms of tourist dollars. Also, there is a developing tourist and municipal infrastructure out there that represents investments of tens of millions of dollars and a lot of time and personal initiative on the part of many people in the area and even some from Victoria.

I think the minister will admit that any logging that takes place within the west coast region on the boundary of Pacific Rim National Park has to be handled in a very sensitive manner. Some of those areas are going to have to be forgone as potential logging sites altogether, without risking the actual economic benefits to people in the area — partly to protect the tourist industry and its potential as a revenue generator for the province and partly to protect the investments made by people in that tourist industry in hopes that the industry will grow and thrive on the west coast of Vancouver Island.

I'm talking about Meares Island, off Tofino on the west coast of Vancouver Island. When it first came to the attention of the people in that area that MacMillan Bloedel and B.C. Forest Products planned to log Meares Island, many of the people in Tofino were absolutely outraged that a place as beautiful as Clayoquot Sound and Tofino harbour would be open for logging at all. They weren't aware of the tenure arrangements that had been made in that area back to the turn of the century, before the tourist industry was even considered.

When the attention of people in Tofino and Ucluelet was first drawn to the fact that Meares Island was proposed for logging, thousands of them wrote in to the minister and signed petitions. They were people from all over the world, from all industries: loggers, fishermen, Indian people living in communities in the area. Aldermen and local governments in the area have also been in touch with the minister as well as residents of the area and tourists.

Let me give you an example of some of the tourists who go to the Tofino area and have signed a petition expressing their hope that Meares Island can be reserved from logging for timber: people from France, Pennsylvania, Thunder Bay, Berlin, Saskatoon, James Bay, Saskatchewan, Alberta, Maryland — people from all over the world. At least a quarter of a million people visit that area every year and bring in currencies that are required by British Columbians in order to keep our economy going, most of which is based on foreign trade. Those people have expressed an interest in seeing the beauty of Clayoquot Sound remain intact. They're not saying that there shouldn't be any logging at all on the west coast of Vancouver Island — that simply isn't the case. They are saying that certain areas can be left out of the government's logging plan and left out of MacMillan Bloedel and B.C. Forest Products logging plans in order to protect the investment and the revenue-generation potential of the tourist industry.

The minister responded to many of these letters and calls by setting up what he calls the integrated resource management study for Meares Island. He also appointed a public advisory committee in order to make some comments on how the area should be logged and managed. But the first assump-

[ Page 4687 ]

tion by the minister was that the area shall be logged. There was never any option there to take Meares Island out of the annual allowable cut for the tree-farm licences involved and to consider it as a separate unit and to make a decision as to whether the area should be logged or not. It was always assumed by this minister that that area was to be logged in the first place and all that people had the right to comment on was how it was going to be logged, if that.

The minister also set up what he calls a public advisory committee to study some of the papers developed by the forest companies and by the B.C. Forest Service. They recommend and advise the planning committee on how the area should be logged. But those citizens, of course, aren't represented on the planning committee, which leaves the ultimate decision and recommendation to the minister. The only people on that committee are the district forest manager, a representative of the Ministry of Environment, the fish and wildlife branch, a representative of federal Fisheries, the regional district and B.C. Forest Products and MacMillan Bloedel — the two companies involved. Recently one of the village governments and the Indian tribal council from the area were added. But the citizens themselves and the citizens groups of the area are not permitted to be on the planning committee that makes the ultimate decisions and recommendations as to how Meares Island is going to be logged. Nor are they allowed, as I mentioned in the first place, to make a decision one way or the other or to contribute input to a decision as to whether those areas should be logged or should be reserved entirely.

Let me give the minister an example of some of the comments that come from the local area about the integrated resource management plan and the integrated resource management group. Here is one from a long-time resident of Tofino: "In the Forests ministry's integrated plan for Meares Island it seems to be a foregone conclusion that Meares Island will be logged. What sort of serious study can be realized in the time frame imposed? It seems to me a smokescreen to lull the public into thinking all is well, which convinces me even more that the decision is made and it's just a matter of time." And that's the feeling of people in the area — that the so-called integrated resource management plan for Meares Island has already been done and the Forest Service is simply going through a scam in the form of a public consultation process in order to appease the citizens of the area and make them think their concerns are being considered and that they will have effective input into the way that area will be treated.

On February 13 I wrote to the minister as a result of a number of letters I had been receiving from people in the Tofino area — in fact people from all around the province — many of which the minister himself, the Leader of the Opposition and the Minister of Tourism (Hon. Mrs. Jordan) have been receiving. In response to that letter I wrote to the Minister of Forests and asked him to impose a moratorium on that small area in Clayoquot Sound just off the village of Tofino. I asked him to impose a moratorium on that area under the provisions of the Environment and Land Use Act and to hold a public inquiry under the provisions of the same act. In other words I asked him to take it out of the jurisdiction of the Forest Service altogether and take a more integrated look at the proposals to either log or not log Meares Island, and if a decision is made to log it then how to log it.

The minister refused that suggestion; he refused it, of course, because the intention of the two companies involved is to log it. The minister wants to put the citizens of the area through a process which is really not adequate for obtaining effective citizen input. The minister is afraid to impose a moratorium on that area under the Environment and Land Use Act because he knows it will take it out of his hands and allow an independent and more integrated view of how that area should be treated. The people in Tofino aren't satisfied with the way the minister has been dealing with Meares Island; they don't feel confident that the way the ministry is looking into the proposals for Meares Island will result in that area being treated the way the citizens want. They are concerned that the logging of Meares Island is going to result in a loss of revenue in the tourist industry in that area and a loss of their investment that they have made in the tourist industry. It's absolutely impossible, in my opinion, for this minister, who can hardly give adequate management to his own ministry, to try to decide what's best for the tourist industry and the public on the west coast of Vancouver Island.

In order to get the best possible analysis of the problem of Meares Island, the question should be the subject of a moratorium under the Environment and Land Use Act. The public meetings and the inquiry on whether or not to log Meares Island should be taken out of the hands of the Forests ministry altogether and given over to someone who is more independent of those resource exploitation ministries — someone who the public can have confidence in and who will ensure that the views of the people are going to be heard and heard effectively. I would ask the minister again to reconsider the issue of Meares Island, to declare a moratorium on that area under the Environment and Land Use Act, and to hold an inquiry, under some independent chairman, into the advantages of logging or not logging the area, the relative costs and benefits to the people in the area and the environmental and social impacts on the people of that area that will result should Meares Island be logged. I'm asking the minister again to do that.

HON. MR. WATERLAND: Meares Island is an area of concern, particularly to the people in Tofino. It's an area of concern for myself as well. The Premier, the Minister of Environment (Hon. Mr. Rogers) and I were in Tofino during our trip up-Island. We talked to the the people. As a result of those talks we have provided for public advice and input through a public advisory committee. Please don't take those public advisory committees lightly, because they work well if allowed to. There's a large number of them in place and operating in the province of British Columbia right now. The hon. member uses the words: "Will Meares Island be logged?" This creates the impression in one's mind that every tree on Meares Island would be removed if the island were logged. I have a responsibility under the Ministry of Forests Act to make sure that all values are recognized in planning the use of the forests of British Columbia. Perhaps I should just read that section back to the member. It's section 4(c) of the Ministry of Forests Act, and it states:

"The ministry has the responsibility to plan the use of the forests and range resources of the Crown so that the production of timber and forage, the harvesting of timber. the grazing of livestock and the realization of fisheries, wildlife, water, outdoor recreation and other natural resource values are coordinated and integrated in consultation and cooperation with other ministries and agencies of the Crown and of the private sector."

[ Page 4688 ]

Now that is my responsibility under the Ministry of Forests Act, and that is exactly what we are doing now.

I don't think that you can assume that because we are doing this integrated resource management study that any particular result will come from those studies. I'm not going to prejudge what is going to happen there. I'm going to wait and see what the integrated resource management committee has to recommend after a lengthy and detailed consultation with the public advisory group. I would caution the member that Meares Island is a large island. I'm sure that there are ways that we can make valuable use of all of the resources on that island without adversely affecting other uses. My whole philosophy in the management of Crown forests is the multi-use concept, where you balance the costs and the benefits, the advantages and disadvantages and you manage the resource for the best benefit of all of the people. Perhaps there are ways that we can do some timber extraction on Meares Island without adversely affecting the aesthetic and other environmental factors. Perhaps there's not, but that's what we are attempting to determine right now.

I hear every week of another last untouched area in British Columbia, which are of a particular interest and concern for various interest groups. If I were to accede to the requests every time I receive them for the single-use alienation of specific areas of the province, I'm afraid that it would not be to the best benefit of the people of British Columbia. We do have moratoriums right now in various parts of the province as we carry on with such studies. I don't think the presence of the moratorium in any way adds to or detracts from the studies that we will do, but I see no need for a moratorium. The integrated resource management study is going on, and until that is completed, we will not be using the resource for which we are responsible on Meares Island. It's a very scenic part of the province. It's a very beautiful area, as most of the province is. There is an important tourist industry in Tofino and I don't want to see that tourist industry harmed by forest industry activity, but I'm sure that in most cases you will find that the two can live together in harmony — that we can use our forests and use the other values as well. Perhaps adding some well-controlled timber harvesting activity on Meares Island can even enhance the recreational values of that island. I don't know. It's certainly a possibility which we must consider in our planning. I'm not going to prejudge what's going to happen there. I assured the people in Tofino and Ucluelet, when we were there, that we would be very sensitive and that we would have a public advisory committee to work with the resource management committee and all agencies responsible. That's just what we're doing.

MR. SKELLY: I think that one of the problems is the fact that people have had experience with the integrated management planning process in the past and they've found out that after going through, in good faith, the procedure in what the minister calls integrated-management plans, the areas have ended up being logged in the same way that they've always been logged — that is, with little regard to the public's input. Even the minister's own staff, if you talk to them quietly, will admit that they shouldn't be handling anything to do with integrated resource management. It should be handled by an independent agency with a broader view of how lands in the province should be managed for multiple use.

I've read that section that the minister or the Premier had put in the Forest Act in 1977. That section was the cause of concern by people all over the province — that a minister who was primarily responsible for the exploitation of the forest resource and for turning the forests of this province essentially into tree farms was using a single-use concept rather than a multiple-use concept. Giving that minister the responsibility for other resource values removed any protection that those resource values may have had. The protection of those values belongs in other statutes of this province. Those ministers responsible for those other statutes should have equal rights with this minister in determining how forests should be managed in the province of B.C. Unfortunately, your colleague the Minister of Environment (Hon. Mr. Rogers) sacked the only opportunity we had to do an integrated analysis of problems like these — that was the Environment and Land Use secretariat. I'm sure you, as Minister of Forests, had some comments and suggestions in favour of the sacking of that integrated resource evaluation entity.

The people of the province and the people of the Tofino area simply don't believe in your platitudes, Mr. Minister, about multiple use. They resent the fact that you say that when an area is allocated to park or recreational use that it is a single-use alienation. At least the trees are still there, and they can be used at some time in the future. At least they can be used for wildlife. At least they can be used as sources of domestic water. There are a number of uses that will still remain in that area — multiple uses. It isn't a single-use alienation that the people of Tofino are asking for; it's more uses than would be remaining if the area is cut over as planned by the Forest Service. We're asking for a more integrated approach. The moratorium and Environment and Land Use Act provision will give the people of that area more confidence that the values on Meares Island will be analyzed independently and that equal weight will be given to other values in the area. They simply don't have any confidence in the procedure you've tended to follow.

HON. MR. WATERLAND: Mr. Chairman, I'm sure that member is doing his level best to convince the people in the area that integrated resource management doesn't work; and I'm sure he will continue to do that.

Again, I'll only say that my ministry's responsibilities are not to simply extract timber. Our responsibility is to manage the forests and everything that that means. I believe it was that member who said a year ago that foresters aren't competent to manage forests, because all they look at is timber. One member over there said it; I don't know whether or not it was that member. We have a responsibility to manage the multiple resources in the province of British Columbia for the benefit of the people of this province, and that is what we will do, regardless of how much that member may try to undermine that process.

The House resumed; Mr. Speaker in the chair.

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

Divisions in committee ordered to be recorded in the Journals of the House.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:54 p.m.