[ Page 4717 ]

CONTENTS

Routine Proceedings

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

On vote 98: minister's office –– 4717

TUESDAY, MARCH 24, 1981

The House met at 10 a.m.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

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

MR. LOCKSTEAD: Yesterday it was brought to the attention of the minister that the government had involved itself in the land transaction involving Pacific Logging and the CPR. It is no use going through the details of that again. But the minister, in answering the questions of my colleague for Vancouver East (Mr. Macdonald) and the member for Shuswap-Revelstoke (Mr. King), did say that he would table the agreements. I was shocked to learn, Mr. Chairman, that the minister apparently signed that agreement without a proper appraisal of the property or timber contained thereon — fee-simple ownership to Pacific Logging.

Last but not least, I noticed that the minister, in his reply yesterday to the second member for Vancouver East, said there was nothing secret about the deal. Mr. Chairman, I want it on record that that transaction was carried on in entire secrecy. Nobody on the Sunshine Coast, nobody living in the communities in that area and none of the people involved in the industry were aware of this transaction until it was leaked from the minister's office or from somewhere. I'd like the minister to now tell this House if he's prepared to table that agreement signed between himself, the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) and Pacific Logging Co. Ltd. Is the minister prepared to table that agreement now? Is he prepared to give us some information'?

MR. MACDONALD: I yield to the minister. The minister undertook to let us see this agreement this morning, and I'm sure he will do that.

HON. MR. WATERLAND: Yes. I have advised the House that I see no reason why the agreement cannot be tabled in the House. Out of courtesy I think that I'm obligated to advise the other party to the agreement and also to advise various people who at this time are leasing parts of the land that are presently owned by Pacific Logging Co. Ltd. Once these people have been advised, they'll know at least as early as the general public as to what is happening, and I'll be very happy to table the document.

MR. MACDONALD: That answer isn't satisfactory at all. This is a government document made by the government. Why shouldn't it be tabled? Why do you have to advise...? Why do you have to get the consent of somebody who's leasing part of the old CPR logging lands? You don't need their consent. It's a public transaction. You're under scrutiny now in the Legislature. Why won't you table what you've done on behalf of the public? You're the minister. Are you ashamed of what's happened? We want it at the time of your estimates so we can question you about it. All the indications are, Mr. Minister, that this is the hidden consideration for the exchange of the CPR lands which the government acquired in False Creek and that the true consideration includes this swap. It sounds absolutely ridiculous to me that logged-off land around Comox — prime recreational land — was given up by the CPR so they wouldn't have to reseed and restock it. It was of no value to them until perhaps 40 or 50 years down the way. So they dumped that back on the public and they say that's fine and receive an exchange of commercially valuable timber land and the fee simple thereof, and, I suppose, the right to subdivide the waterfront in the future and make a killing which would run into who knows how many million dollars — $50 million or $60 million.

HON. MR. FRASER: Tell us about Grizzly Valley.

MR. MACDONALD: Oh. you want to divert the subject matter to Grizzly Valley. That's another story. Can I reply on that point, or would I be out of order?

MR. CHAIRMAN: Order, please. Hon. members, the second member for Vancouver East has the floor. We're on vote 98, the administrative responsibility of the Ministry of Forests. If I could just ask the hon. member to address the Chair, and other members to afford him the courtesy of being able to speak uninterrupted. we'll proceed.

MR. MACDONALD: I just have these three matters to go into: the Marguerite, Grizzly Valley and this question of the exchange of lands to the CPR.

Mr. Minister, as the member for Mackenzie (Mr. Lockstead) has pointed out, you kept this matter very much in your back pocket. There was no public announcement. You and the Minister of Lands, Parks and Housing (Hon. Mr. Chabot), who is also a signatory to that agreement and has graced the House with his presence this morning....

HON. MR. CHABOT: I'll take it up in my estimates.

MR. MACDONALD: Old stonewall. Yes, wouldn't be it great, eh. Oh, boy, that'll be the day. You could make the Minister of Industry and Small Business Development (Hon. Mr. Phillips) look like a real forthcoming chap.

Mr. Minister. we're asking that the agreement be tabled under your estimates so you can be questioned about it, because I don't think you should have affixed your signature to that exchange. I think the public lost on it, and the CPR had you in an unbearable bargaining position and was able to exact its price out of the people of British Columbia, having got the original lands of Pacific Logging for nothing — for building a railway and then discontinuing the passenger service. We took it from the Indians, gave it to CPR, and now they exchange this chunk of it and make a tremendous fortune.

Mr. Minister, will you file the agreement? Secondly, will you get up in your place and tell us just what this deal involved? How many acres for parks? Was it the recreational land? Is it mountainous land? Had it already been logged, and if so to what extent? Had there been any reseeding done by Pacific Logging before the exchange took place? You have never told the public — let alone filed the agreement — just what this exchange involved. Will you get up now and describe it, because surely you wouldn't set your signature to something when you didn't know how much timber was involved.

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HON. MR. WATERLAND: Mr. Chairman, if the member would refer to the Blues, I am sure he would find that I explained yesterday basically what the agreement involved. The member is seldom in the House, so he probably didn't hear me; but he certainly can read the Blues — I assume he can read.

Some of the lands which are being received by the government have been logged and have been regenerated, others have not been logged and contain immature timber, and all of the lands have very good recreational value with actual recreational facilities in place. There are some leases held by individuals right now on some of these lands, which would have to be a part of the consideration of the value of the land. I told the member that as a matter of courtesy to these people, we would advise them prior to tabling the documents in the House.

The documents provide that there will be an independent evaluation of the lands by appraisers. If there is a difference, if the Crown lands are of more value than the nine parcels of Pacific Logging land, then the difference will be paid to the government. If the reverse is true, no difference will be paid to Pacific Logging. It will go on a value basis, evaluating all of the uses that the lands can be put to, and using the highest possible values for both pieces of land.

It is a good deal for the government. We will receive twice the acreage that Pacific Logging will receive. There are timber values on it. The lands are widely scattered. Those values that can be harvested in the near future will be put into a small business program. We have a difficult time on Vancouver Island providing sufficient timber for that program, so the small business sector on Vancouver Island will benefit from this trade, as will the general public in the recreational uses to which this land can be put. The member can read the details in the document when it is tabled. It will be tabled, once I have done the courtesy of advising the people who hold leases.

MR. LOCKSTEAD: I don't want to belabour one single topic, but this is becoming a great deal more serious as we go along. First of all, the minister did say that there was no secrecy involved in this transaction, and it was a totally secret transaction. It is peculiar that that transaction took place at the same time as Marathon was negotiating with the government for property for B.C. Place. More to the point, the timber values on this property — the minister now admits the agreement was signed without appraisal.... I'm told there could be at least $60 million worth of timber alone on these 5,000 acres. That's not including the $5 per foot for water frontage — the going price for waterfront in that area at the present time. You can imagine how much 5,000 acres is worth in real estate value on theSunshine Coast at the present time.

We're very curious about the whole transaction. We want those documents tabled in this House under this minister's estimates today. As the member for Vancouver East pointed out, the minister's estimates are up now. The minister does not have to consult with anybody else on this transaction. Yesterday we found that the Minister of Lands, Parks and Housing was involved. Because they couldn't utilize a section of the Forest Act, they had to utilize that minister's. So obviously there was consultation prior to the negotiations taking place.

I'm not satisfied with the answers that we have received from the minister on this matter. It's a very serious issue. I want the minister to rise in his place right now and tell us that he is sending out for those documents and they will be tabled in this House today.

MR. KING: If the minister wishes to answer, I'll yield the floor, Mr. Chairman. There's the document. I presume he's going to table it.

I just want to make a couple of points to the minister. He talks about a courtesy to the parties to the contract. As a courtesy to them he is consulting them before he'll table the documents in this House. The minister gave a commitment yesterday to table the documents. I say what about a courtesy to the people of British Columbia who own the resource. What about the courtesy of open dealing so the people of this province can understand and make some judgment on the secret deal that the minister is consummating with Pacific Logging?

It's ironic. We hear a great deal about public involvement in the forest industry of the province today. I have here a press release from the Ministry of Forests: "Public Involvement Sought for Forest Decisions. 'If British Columbia's forest resource is to remain healthy, the public must get involved in decisions about forest use, ' said Bill Young, British Columbia's chief forester." How on earth is the public to get involved in decisions regarding the forests in this province if the minister sits on secret deals that were made without the benefit of any appraisal of the value of the forest resource on the lands being traded off to Pacific Logging? It looks serious and it looks suspicious.

We know that this government was in a bind in terms of making a public commitment to an international association to host Transpo '86 when they had not yet acquired the site necessary to hold the function on. As a result of locking themselves in and committing themselves to acquisition of that land, CPR had the whip hand. This government had to go before them cap in hand, begging for a deal on False Creek so that B.C. Place and Transpo '86 could go ahead. There's a dark suspicion in the public mind that CPR and their subsidiaries exacted a tremendous price from the people of B.C. for the clumsy bargaining posture of that government.

The minister gets up in answer to my colleague and he says: "Well, some of the land has been logged and some has not." What a pathetic response from a minister of the Crown! That's insulting to this institution. The minister should know — he's been here long enough now — that when his estimates are before the House it is the one time during the year, traditionally and historically in all parliaments in the British Commonwealth, that a minister is obliged by tradition to account precisely for the administration of the affairs of that ministry over the past year. We don't need those bland, anemic and foolish statements that some of it has been logged and that some of it has not. That's obvious even to the Minister of Industry and Small Business Development (Hon. Mr. Phillips) as he flies over it in his government jet. He can look down and he can determine that some has been logged and some has not.

What we want is more precise information. We want to know how much has been logged. Has it been clearcut? Has it been restocked? If not, what will be the cost of restocking that land? What is the acreage involved, and what will be the rotation period on that new crop?

All of these factors and specifics must be weighed if the public of British Columbia is to have an opportunity for any intelligent assessment as to whether the deal was a good or

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bad one for the people of this province. His own chief forester says, as I indicated before, that the public must be involved in decisions about forests. The professional foresters stress public help and involvement. The headlines — the minister commits himself to a similar policy in a similar direction. The Sierra Club said a short time ago in their background paper number 11: "Barriers to public involvement and public understanding must be removed." Yesterday I quoted a letter from the Minister of Transportation and Highways (Hon. Mr. Fraser), who had this to say: "The time is long past of industries and government taking action that affects the general public without justifying the need for such action." That's a good statement by your colleague, Mr. Minister.

We're not prepared to pay the minister's office vote, Mr. Chairman, until he starts becoming candid, frank and open with this committee and starts providing the public of the province with some information on why the deal happened at all. Who requested the land swap? Was it Pacific Logging, or did the Minister of Lands, Parks and Housing initiate the negotiations? Was it the Minister of Forests or the deputy? We have no information whatsoever, and as my colleague for Mackenzie (Mr. Lockstead) has pointed out, had it not been for someone in the Forest Service alerting the public, we would still have a completely secret deal on our hands. Lord knows the history and background of the Forests ministry in this province should tell the public and the legislators that we've had enough secret deals in the past from the Minister of Forests' office. The minister has given a commitment. and I ask him with all sincerity and as persuasively as I can to fulfil the commitment he gave yesterday and to table that contract in the Legislature today so that we can study it and fulfill our responsibilities as all opposition to make judgments as to whether or not the public is getting a fair deal on this transaction and see whether it should be reviewed and have any amendments made to the proposed contract. That's not too much to ask, Mr. Chairman, if the minister has respect for this institution and has any basic understanding of his responsibilities as a minister of the Crown. I ask that he table it immediately.

MR. BARRETT: Mr. Chairman. I read the Blues as the minister advised, and I quote back to the minister:

"HON. MR. WATERLAND: The agreement was signed. I can't give the member the date. I can look it up. I don't even see any reason why that agreement shouldn't be tabled in the House. I don't happen to have it with me, but I'm sure there is no reason why it can't be tabled here."

You asked us to read the Blues, through you, Mr. Chairman. We read the Blues and we believed you. Now what has happened between yesterday afternoon and this morning that has become a reason why you can't table those? If you say as a courtesy you want to contact the company, just write a little memo and hand it to your staff. Call over to the company and say: "Do you have any objection to the people knowing what's going on with their own property?" If the company says no, stand up in the House and say that uou'd like to but the company has more power than the minister. They can say whether or not documents should be tabled.

AN HON. MEMBER: Does CPR want this kept secret?

MR. BARRETT: Who's running this province, the CPR or the government of British Columbia? I remember the brave statements of the Premier saying that B.C. is not for sale. The CPR is to stay out of British Columbia. But here we have a minister, Mr. Chairman, who said yesterday that he would table the documents, and today he said that he'd have to check with the CPR. Did you mean what you said yesterday or were you just telling the House something that wasn’t true?

I want to know from the minister, Mr. Chairman: are you prepared to table those documents in this House this morning? Yes or no. Did you mean what you said yesterday or were you fibbing? Yes or no. Who's running British Columbia? Are you the minister, or is the CPR telling you what to do? Let's have it straight. Are you going to waste any more time with this nonsense? Fair enough. But if you're not running the show, say so and we can get on to something else. We'll know that the CPR is running British Columbia. You said this yesterday. You told us to read Hansard. So we read Hansard; we read what you said. Why aren't you doing it? Why aren't you tabling these documents? Have you got a reason? I'd like to hear it.

Mr. Chairman, the minister is struck dumb now. First of all he uses his defence: "Read Hansard." So we read Hansard, and he said he was going to table the documents. He didn't see any reason why he shouldn't. So I'm asking him: are you prepared to table those documents today, right now? Are you prepared to answer? If you want the floor just indicate that you're prepared to answer. Does the minister wish to answer now?

Mr. Chairman, I believe the minister was lying to the House yesterday when he said that he was going to table these documents.

MR. CHAIRMAN: Order, please. Please be seated, hon. member. Hon. member, you have been in this House long enough to know that that is an unparliamentary word which under no circumstances call be tolerated by any chairman. I would ask the member, in keeping with the parliamentary traditions which this House must represent, to withdraw the unparliamentary term "lying."

MR. BARRETT: Mr. Chairman, I withdraw the words "the minister was lying." I am under the belief that the minister was not telling the truth yesterday when he said he'd table these documents.

MR. CHAIRMAN: Again, the hon. member has been here long enough to know that one cannot say one way what one cannot say the other. As I asked previously, I must ask again that the member withdraw the term that the member was not telling the truth. In the interest of parliamentary tradition, hon. member, I so request.

MR. BARRETT: Mr. Chairman. I did not say that he was not telling the truth; I just said I do not believe he was telling the truth. I'm expressing an opinion that I hope the minister will prove wrong. I withdraw, Mr. Chairman.

AN HON. MEMBER: You want to get thrown out. It's the only stunt you've got left

MR. BARRETT: Mr. Chairman, would you tell members that if they wish to interrupt they must do that from their own chair.

May I, in the best of parliamentary tradition, quote back the minister's words to himself again, when he said he sees no reason why he cannot table the documents in the House, and

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humbly ask the minister if he is prepared to back up his words. Will you be tabling these documents in the House during your estimates? Well, could you tell me what the signal means when you pick your nose? Does that mean yes or no? What does it mean?

MR. CHAIRMAN: Order, please, hon. member.

MR. BARRETT: Well, Mr. Chairman, as a member of the House I don't like being treated this way.

MR. CHAIRMAN: Notwithstanding the feelings of the member regarding the answers which may or may not be forthcoming — over which the Chair has no control — the reference by the hon. member to the minister is hardly one of parliamentary leanings. Again, I would caution the member that we must, no matter what our feelings, maintain our parliamentary decorum over all else.

MR. BARRETT: Mr. Chairman, I withdraw the statement that the minister was lying to the House. I withdraw the statement that I am of the opinion he is not telling the truth. I withdraw the statement that he's picking his nose. Now can I ask the minister, plainly, through you: is he prepared to follow up on his commitment to table these documents in the House during his estimates? Yes or no. Would you like the floor to answer the question, Mr. Minister? All you have to do, Mr. Minister, is say yes, you're prepared to answer the question. Are you prepared to answer the question now? Do you wish the floor, Mr. Minister? Fine, thank you.

HON. MR. WATERLAND: I see the member finally remembered that only one member at a time can have the floor and has taken his seat.

Mr. Chairman, I rather resent the implication — which the member has withdrawn — that I was lying to the House. I think there's only one member that's ever been proven to have lied to this House, and that's the member who's just taken his seat. That's a matter of record in the courts.

MR. CHAIRMAN: Order, please. Hon. members and hon. minister, I must ask that the minister withdraw the remark. Clearly members of this House have an obligation to follow parliamentary procedure — and that, as all members know, was not parliamentary. I would ask the minister to withdraw the reference that he just made to another hon. member.

HON. MR. WATERLAND: Mr. Chairma,. I was simply referring to the records of the House, but if the Chairman so wishes I will withdraw.

I have told the member that I will be tabling the documents in the House; I have not told him specifically when. The member does not, perhaps, understand the meaning of the word "courtesy." I will do the other signatory to the document the courtesy of advising him first and will advise those people who presently hold leases with the present landholder as well; then the documents will be tabled in the House. The member may or may not wish to believe that — that's up to him — but that is my intent.

MR. BARRETT: Then may I ask the minister if he is prepared to extend the same courtesy to this House that he is to these private corporations and individuals. Would he inform these people today that it is his intention to table the documents during his estimates?

HON. MR. WATERLAND: I will advise them as soon as I possibly can when they can be reached. There are quite a number of people who presently hold leases, and they will be advised at the earliest possible time.

MR. MACDONALD: Why? They're not parties to the agreement. What nonsense that is!

MR. CHAIRMAN: Order, please, hon. members. Until members are recognized by the Chair, it would be courteous of them to wait.

MR. BARRETT: The minister is extending a courtesy to the leaseholders, who are not parties to the agreement. If that indeed is the scope that he wishes to expand it to, would the minister, in doing his duty to the people of B.C., accept the argument that we step down from his estimates and go on to some other estimates until we can get to these agreements in the House? You know, Mr. Chairman, I'm not included in the group, but there may be some citizens who suspect that the minister is going to try to wait until his estimates are over before he tables the documents. Would that be an undue suspicion? I ask the minister: will he make an effort to contact those people today and table those documents during his estimates?

HON. MR. WATERLAND: I have already instructed my staff to contact the people involved. As soon as that is done, the documents will be tabled. I can't say it any more plainly than that.

MR. BARRETT: I have just learned at this moment that there are now instructions to his staff to notify the people. Thank you very much. Can the minister tell us how long he thinks it will take to contact the people? A week? Two hours? Five minutes? You don't know. Would the minister then accept the proposal that we move on to other estimates?

HON. MR. McCLELLAND: No.

MR. BARRETT: I thought I heard a voice before leave was even asked. You see, there is a suspicion that you're hiding something, What I think will happen, as I've seen this government operate, is that we will go off your estimates, and maybe a day before the House adjourns the documents will be tabled in the House — and you're off the hook. Now if you've nothing to hide in this deal, then the courtesy calls could be made by phone. The principals are, of course, the CPR. The leaseholders are irrelevant in terms of being notified. That's just an excuse. Are the leaseholders signatories to the agreement? They're not. There's just one call that has to be made and that's to the CPR — to Pacific Logging. Mr. Minister. is it correct to say that the other signatory in the agreements is Pacific Logging, that they're the only other party to the legal agreements?

HON. MR. WATERLAND: No.

MR. BARRETT: There are others. Could you tell me who the others are?

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HON. MR. WATERLAND: I advised the House yesterday that there are three signatures on the agreement — that of the Minister of Lands, Parks and Housing (Hon. Mr. Chabot), that of a representative of Pacific Logging, and mine.

MR. BARRETT: To the minister's knowledge, does the Minister of Lands, Parks and Housing have any objection to the agreements being tabled?

Interjection.

MR. BARRETT: None. That goes on record. You were on record as not being opposed to being tabled. You're indicating that the minister is not opposed. So there's only one person left, and that's Pacific Logging. Thank you for the information.

MR. MACDONALD: The minister could very easily enable the House to scrutinize the transaction in the democratic way by standing down his vote, but he makes this very picayune point that we need the consent of Pacific Logging to file a public agreement. If it was the sale of a house or a commercial lease, it would be registered in the land registry office and everybody would see it. The suggestion of the minister that we must also consult lessees, who presumably are leasing parcels to log on the old Pacific Logging lands, is absurd. There's no reason why they should object to an agreement being filed to which they were not party.

The minister has been absolutely unhelpful in terms of describing this transaction to the Legislature and the people of the province. We have no idea whatsoever how much merchantable timber the CPR got, and how much they relinquished on Vancouver Island. Do you mean to say that the Forest Service signed an agreement prior to appraisals and didn't have any idea how much of the merchantable timber of British Columbia they were giving to the CPR? Roughly what do your surveys show? How many acres were logged? How many needed to be restocked? Give us the breakdown as you saw it when you affixed your signature to that agreement. Give us the date of the agreement, Mr. Minister. If you signed it completely in the dark as to the timber that was being exchanged, you are surely guilty of dereliction of your duty as a minister. If you do know, give us what you did know at the time of this agreement. Send to your office if necessary.

This is important. We're not talking about a few dollars here and there. We're talking about a government whose record in terms of giveaways has been far from clean, which has given 5,000 acres of fee-simple land to the CPR. That's not a little thing we're debating here this morning. Does the minister have no answers as to what the exchange amounted to? Quite apart from the agreement, you should be able to stand up and say: "This was the recreational land." You should be able to tell us, if you can, how you evaluate that land. Frankly, I don't know how appraisers do that. You tell us, I'd like to know what the principles are. I didn't sign the agreement. The minister did. So did the other minister.

How do you evaluate? Suppose you get 10,000 acres of recreational land that's now going to be park, and you trade that for merchantable timber. That's apples and oranges. I'd like to know how you appraise those two propositions. It may be that, insofar as the CPR was concerned, to get rid of these lands and not have the obligation to restock them under your forestry program and the rest of it may have been a benefit. Maybe it's just sheer gold for them to get rid of the Vancouver Island properties, where they had creamed the best timber. I suppose that goes without saying.

How do you evaluate prime recreation in terms of merchantable timber? You go to the bank, Mr. Minister, and say, "I've got prime recreational land," and raise a mortgage on it. Say: "I'd like to make a little bank loan." But if you've got merchantable timber, you'll get your bank loan. They're very different things.

Mr. Minister, I would like to know: if 5,000 acres on the Sunshine Coast was to be granted to CPR, why didn't you put that up for competitive bidding according to your obligation under the Forest Act not to relinquish forest lands without giving all companies a chance to bid? The minister has given some malarkey explanation about consolidating holdings which makes no sense. We're dealing with Vancouver Island on the one hand, where you say the Pacific Logging holdings were kind of split up and a little difficult to log. They've managed to do it anyway. Presumably they have logged most of it. But they weren't all adjacent, one to the other, to be logged in a big way, as quarters that were all in the same place. I presume that's what you're saying. So you said they should consolidate. To consolidate that situation, what did you do? You took it off their hands entirely and gave them 5,000 acres that are miles away across the strait. That's not consolidation. How can you expect us to believe that you're living up to your obligation as Minister of Forests when 5,000 acres disappears by fee simple to Pacific Logging with no competitive bidding, when there may very well be other companies, be they big companies or small loggers, who wanted to bid for that and could have given the people of British Columbia a better price than CPR.

You're the Minister of Forests. Through the Chair, what right have you got to dispose of forest lands without competitive bidding? You're bound by the Forest Act. You went outside your Ministry and got rid of these lands as if it were a Ministry of Lands, Parks and Housing proposition. But there is merchantable forest there. You're supposed to live up to your act.

Mr. Minister, I'd like the date of tile agreement. Do you have to consult big Julie to give us the date? No. Give us the date of the agreement. What information does your department have as to the merchantable timber that has been relinquished by Pacific Logging on Vancouver Island and the merchantable timber they have gained on the Sunshine Coast'? You say that's subject to final fine-tune appraisal. Okay. But surely you knew roughly what you were doing when you signed the agreement in such a hurry last fall. So will you give us those figures? What did the exchange involve?

HON. MR. WATERLAND: I'm sure the second member for Vancouver East understands what is involved in appraisal: the value of the land; the timber on the land and the other uses to which the land can be put form a part of the appraisal; whether the land has been logged; whether it has immature timber on it; whether there is regeneration on it; and whether it has immature or mature timber on it is a part of the evaluation and goes into the total value of the land. We are much more short of forest land, or land that could be used by the public, on Vancouver Island than we are on the mainland. It makes a great deal of sense to both rationalize Pacific Logging's ability to harvest and make other lands available for the small business sector and for recreational use. All of these things make up a part of the evaluation.

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MR. MACDONALD: How much timber was relinquished? How much did they gain'?

HON. MR. WATERLAND: Mr. Member, I've just advised you that that will be a part of the evaluation — exactly how much timber is on the land they'll be acquiring and on the land which they'll be turning over to the government.

MR. MACDONALD: You had no idea when you signed the agreement.

HON. MR. WATERLAND: Mr. Member, the evaluation determines that, and exchange of land and moneys.... If the land Pacific Logging will receive is of greater value, we will receive money in addition to that. If the land which we receive is of greater value, we'll pay Pacific Logging nothing. I would assume that the Leader of the Opposition has been talking to Bill Sloan or someone from Pacific Logging. I have not yet contacted him. I do think we should extend the courtesy to people who have leases and advise them as well. The members may or may not agree with me on that. At the earliest possible opportunity I will table that document in the House. It is a very straightforward document.

MR. BARRETT: I was walking down the corridor, and the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) stopped me in the corridor and said: "Have you been talking to Pacific Logging?" Now do you think that within the time I left here and walked down to my office and got back here — all in ten minutes — I could achieve what the minister couldn't do — that is, pick up the phone and call Pacific Forest Products Ltd., speak to Mr. Sloan and say: "Mr. Sloan, do you have any objection to the agreements being tabled?" And do you think that Mr. Sloan would say no? If I asked Mr. Sloan, "May I quote you in the Legislature?" do you think that Mr. Sloan would say, "By all means"? Well, if you think all that, you're absolutely right. I walked down to my office and I spoke to Mr. Sloan, and I said: "Do you have any objections the agreements being tabled?" He said no. I said: "May I quote you as having said that, Mr. Sloan?" He said: "By all means." The only person who is ashamed and embarrassed about tabling that agreement is the minister right over there. The leaseholders have got absolutely nothing to do with this agreement.

Mr. Minister, I withdrew when I said you were lying; I withdrew when I said you were picking your nose; but I still have a private opinion that I withdrew in public here.

Mr. Chairman, the minister has an opportunity to recover his composure and a bit of his reputation by tabling that agreement during his estimates. Why don't you do it? It's got nothing to do with the leaseholders, and you know it. What are you afraid of'? Pacific Logging isn't afraid. What are you afraid of? If you're not willing to table those agreements in this House, then you're not worthy of being Minister of Forests in this province. You've already nodded that your companion in this agreement has no objection to the agreement being tabled. You said that: you spoke for that worthy minister saying that he has no objection. I can tell by that confident look on his face that if he were in a position he'd be up throwing those documents right across the floor. Timid? Frightened? I think the minister is embarrassed by the deal. What are you hiding?

It took me five minutes to walk down the corridor and make the phone call. Mr. Chairman, a five-minute recess would be enough time for him to confirm the phone call and say: "Yes, the Leader of the Opposition is correct. Mr. Sloan has no objection, and we will hereforth table the agreements, so that the people of British Columbia during my estimates can have an opportunity to read through them." If the minister wishes to submit to the opposition a complete list of leaseholders.... We'll phone those too, if that's what you want. We don't have the staff, the battery of phones or the PR advisers that you've got, but if you can't do the job, we'll do it. But I think, Mr. Minister, that you have been weak, timid, frightened and unsure about your whole handling of this agreement. My colleague, the member from Vancouver has asked you simple questions about how much timber there is; the member for Mackenzie has pointed out that there are questions in his region; and the member for Shuswap-Revelstoke has pointed out that there are unanswered questions. Mr. Minister, are you now prepared to table those documents? Is that the agreement in your hand, Mr. Minister?

Mr. Chairman, I don't want to delay the House, but the minister is now consulting with the other minister with the agreement in his hand. He's getting close to wanting to table the document. We should give him a moment to reflect. Do you want to table the documents now, through you, Mr. Chairman'? Does the minister wish to table the documents now?

Are you prepared to confirm that Mr. Sloan has said that he is willing to have the agreement tabled? Are you prepared to do that? You said you instructed your staff to contact Mr. Sloan, and I assumed that to be correct. I didn't ask Mr. Sloan whether or not he's been contacted by anybody; I wouldn't do anything as discourteous as that. But is the minister now prepared to confirm this by having someone in his office phone Mr. Sloan and see if what I reported to this House is correct? Are you prepared to do that, Mr. Minister?

MR. CHAIRMAN: Before recognizing the Minister of Forests, I must comment, hon. members, that when a member has withdrawn a remark that is unparliamentary, it is equally unparliamentary for that member then to refer to the remark that he has already withdrawn. I would ask all hon. members to keep that particular point in mind in the future.

HON. MR. WATERLAND: Mr. Chairman, there are a number of leases outstanding on the lands held by Pacific Logging. These people, of course, would be concerned as to the continuity of the leases they had and there would be a great deal of uncertainty in their minds as to whether or not the leases would continue when, in fact, the government takes title to the land. It is for that reason that courtesy should really be extended to advise them that the Minister of Lands, Parks and Housing advises me that there will be no adverse effect on the leases. For example, there are quite a number of cabins on leasehold property, subleased or leased from Pacific Logging. There is the Mount Arrowsmith Ski Club and various other lessees who may be in some doubt.

However, I have no objection to tabling the document. It's very straightforward. It spells out the terms and conditions by which a trade will be made and how land will be evaluated, much as I have explained to the House. I am reluctant to table it until such time as the people have been advised that they don't have to be concerned about the continuity of their leases. I have just said that. I would hope that by saying that individually they will know that has been said, rather than hearing some press report that perhaps they would be in

[ Page 4723 ]

jeopardy. However, if the members insist, I'm quite willing to table this document now. I would hope that no distress is caused to the people who presently have the leases.

[Mr. Strachan in the chair.]

HON. MR. WILLIAMS: On a point of order, I have been listening with interest to the discussion which has taken place with respect to this document. The rules do not permit the tabling of documents in committee.

SOME HON. MEMBERS: By leave.

HON. MR. WILLIAMS: Not even by leave. I am sure the opposition would like to have the opportunity of studying the document. I'm sure the document can be tabled when the committee rises at 12 o'clock.

MR. BARRETT: I move that the rules of the committee be suspended by leave and leave be granted for the minister to table the document in committee.

MR. CHAIRMAN: Hon. members, I am not prepared to accept that motion at this time. Could the debate continue on the minister's estimates, and I'll have an opinion shortly.

MR. BARRETT: Mr. Chairman, to make it easier for the Chair, I ask leave of the committee for the minister to table the report during committee.

HON. MR. WILLIAMS: Mr. Chairman, the Leader of the Opposition is aware that the Chairman has declined to accept the motion at this particular time. If the Chairman wishes the opportunity to consult with the Clerk of the committee, I would suggest it be permitted.

MR. BARRETT: Mr. Chairman, I appreciate the anxiety of the Attorney-General about an attempt to interpret the rules. All I'm asking is that the Chairman put my request of leave of the committee that the document be tabled.

MR. CHAIRMAN: The document cannot be tabled in the committee. Leave cannot be given. The committee is only empowered to debate the estimates of vote 98 — the vote before us at this point. The committee cannot accept tabling of this document. The document will be tabled when the House resumes. I would ask that we return to the debate on vote 98, the estimates of the Minister of Forests.

MR. BARRETT: Mr. Chairman, would you cite what House order prohibits a committee member from asking leave during the committee that the rules be suspended? I want to know what House rule says that committee cannot grant leave to suspend a rule.

MR. CHAIRMAN: We'll have a decision momentarily in response to the member's question.

When the committee rises and reports to the House. the committee can ask leave that a document be filed at the same time as the report is made to the House.

The debate continues on vote 98.

MR. BARRETT: To be correct, I asked the Chair to instruct me as to what standing order says that a member cannot stand up in committee and ask leave that the rules be suspended so that some action, whatever it is, can take place.

MR. CHAIRMAN: The Chair has ruled that the documents cannot be filed in committee, and it is not up to the Chair to advise the House on that matter. The document can be tabled in the House when the House resumes. I would ask all hon. members if we could return to vote 98, which is what this committee is empowered to debate, and debate vote 98, the estimates of the Minister of Forests.

MR. BARRETT: Mr. Chairman. I'm not challenging the Chair. I'm asking the Chair to refer me to what specific standing order spells out that a member in this chamber, when the House is in committee, cannot stand up and ask leave that the rules be suspended for the purpose of any specific action. I'm asking what standing order of the B.C. Legislature specifically spells out that you cannot ask for leave in a committee.

MR. CHAIRMAN: Standing order 1.

MR. BARRETT: And what section of standing order is that, Mr. Chairman?

MR. CHAIRMAN: The Chair finds that the committee is not empowered to do anything except that which the House has asked the committee to do, The House has asked the committee to debate vote 98, the estimates of the Minister of Forests, and that is all that this committee is allowed to proceed with at this time. I am of the opinion that there has been adequate discussion on this point of order.

MR. BARRETT: Mr. Chairman, I am not disputing the ruling. I'm only asking instruction. I quote standing order 1: "In all cases not provided for hereafter or by sessional or other orders. the usages and customs of the House of Commons of the United Kingdom of Great Britain and Northern Ireland as in force at the time shall be followed as far as they may be applicable to this House." Could You tell me what rule there is in the House of Commons of the United Kingdom of Great Britain and Northern Ireland that states that the House rules are not applicable to committee, and specifically that a member cannot get up and ask leave in committee that the rules be suspended? That is all I'm asking. I would not dispute the decision. I'm asking the reference and the standing order of the House of Commons of Great Britain and Northern Ireland that specifically deals with a request by a member for leave to have the rules suspended.

MR. CHAIRMAN: Let me quote, hon. member, from B.C. Parliamentary Practice: "In summary, when it is desired to suspend standing orders. the motion being substantive requires two days' notice. Such notice may be waived by unanimous consent, but only by the House, not by the committee." That is my citation, and on that point, hon. member, I would ask that we return to the debate on vote 98.

MR. BARRETT: Mr. Chairman, I ask for leave in this committee that the requirements for substantive order generally required by the House before leave is asked be suspended so that the agreement can be tabled in committee. There is no citation that I am aware of that specifically states that a member, at any time — in committee or otherwise — cannot stand up and ask for leave that the rules be suspended.

[ Page 4724 ]

Otherwise, Mr. Chairman, you're saying that the committee is not subject to the standing orders of the House. This has become even more important than the tabling of the documents. This is an impingement on the rights of the members to stand up at any time and ask for leave. Leave may be denied. Lord knows, that has happened on occasion in the past, but it is my right to ask for leave.

MR. CHAIRMAN: The committee has no power to give leave or refuse leave. The committee has been struck by the House to debate the estimates of the Ministry of Forests, and that is the only thing that the Chair can entertain at this time. In the report to the House, the Chair can be asked to report that a document be tabled, and that will be a matter of the House. The Chair cannot consider any other debate on this matter. The only debate that the Chair and this committee can consider is the vote that is before us now — vote 98, the estimates of the Ministry of Forests.

MR. BARRETT: I have no desire to hold up the business of committee, nor will I challenge the ruling. But this House has not yet been told specifically what standing order of this House, or practice of Great Britain or Northern Ireland, this decision is based on. I will not challenge it, simply because I do not want a precedent established. I would request that upon reporting to the Speaker, this committee report to the House that such a question arose about the granting of leave in committee. I would ask that you request the Speaker, if I may have leave to make such a request.... I add that caveat advisedly. If I may have leave to make such a request I would ask that the Speaker instruct the House what standing order or rule applies that prohibits a member from asking leave in committee for subsequent action to be taken.

MR. CHAIRMAN: That point is well taken, hon. member. That will be the report to the House when the committee rises.

HON. MR. WILLIAMS: I'd like you to know that I certainly support the proposition just put by the Leader of the Opposition. I think that this matter of the conduct of the affairs of the committee should be reviewed and that all members should be made aware of the basis upon which the committee is able to do the limited work which the House gives it to do, and the constraints there are upon that.

On the issue of the document that the Minister of Forests has placed before you, Mr. Chairman, in order that it may also be clear on the record, I would respectfully request that when reporting to the Speaker you advise him that such a document has been placed before you and that leave be asked that it be tabled at that time.

MR. CHAIRMAN: A report will be made from the committee to the House.

MR. LOCKSTEAD: I'm pleased to see that eventually we may have a look at this document that we've been asking for for two sittings now. I don't think that the minister need worry about revealing this information to leaseholders. It's my view that they'll likely be pleased to see what the heck the government is doing to them, with them, around them, about them and over them. Furthermore, if the minister is now tabling documents, obviously the government would not have entered into a transaction with the CPR or Pacific Logging without some kind of an idea of the value of the timber and property involved. Maybe the minister would be good enough to table any preliminary appraisals of the timber and property value of the 5,000 acres that we're literally giving away to the CPR. I think it's important that we know that. We want to know if we made a good deal or a bad deal.

HON. MR. WATERLAND: I advised the member yesterday that I don't have even preliminary appraisals in my hands at this time. When they are completed I'd be very happy to table them with the House or to give them directly to the member — whatever he wishes. I'll publish them in theVancouver Province.

MR. LOCKSTEAD: It's just utterly amazing to me that the minister and the government would enter into any kind of transaction with anybody — in this case it happens to be the CPR — without knowing what we're trading for. We know what they've got. We know the values CPR placed on their properties on Vancouver Island that they received for free some time ago. The minister is now telling this committee that he has no idea what the timber values are on that property that they are.... I was going to say they were proposing to give away, but they've given it away. The minister tells us the documents are signed. He has no idea what the property values and timber values are — no idea whatsoever. For a government that considers itself to be sharp and shrewd — although, of course, that's been disproved over the last few years on every occasion that a business transaction is entered into....

Are you telling me that this government and that minister entered into a deal with the CPR without any idea of what they were trading for? Of course they did it in secret; we know that. Maybe the minister can give us just a rough appraisal. Are the timber values worth $60 million, as has been quoted by people in the area? Are they worth $100 million or $200 million? What's the property value up there on 5,000 acres? How much? Ten thousand dollars an acre? Who knows?

The minister must have some idea of what he was doing before he signed the document. Maybe the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) knows. He's sitting just to your right. He was there a minute ago. Ask him. He might have an idea, since it was under a section of the Land Act that the deal was carried on in the first place. Will the minister table any appraisals on the timber values of that property he has?

HON. MR. WATERLAND: I don't know if the member is losing his hearing or what. I've said a dozen times that I don't have appraisals yet; they're being conducted at this time. They are not in my hands, and when they are I'll be very happy to table them or to give them to the member to do anything he wishes with them.

The member talks about all this foreshore land that Pacific Logging is going to receive in trade for the other lands we have. There is very little foreshore land. When I look at the plan I can see two small areas of waterfront, and in order to harvest and manage a forest in that area some water access has to be provided. The balance of the land doesn't touch the water. It's not waterfront property. The member apparently has the same map in front of him that I have. I think it's very clear if you look at it that there's very little waterfront property, and that was probably included to provide access for forest management and timber harvesting. It's difficult to

[ Page 4725 ]

harvest wood in coastal British Columbia unless you can get to the sea with it.

The appraisals. We know the areas we are receiving. We know that they have timber, recreational and real estate values, and there's quite a bit of lakefront property included in the land we'll receive. I'm not about to suggest a value for them. That's a matter for the professional appraisers to do, and they're carrying out that work now. Perhaps they are completed, but I have not yet got the documents. I don't have them in my hand, and my deputy minister advises me that as far as he knows they are not yet in the hands of the Forests ministry. When they are the member can surely have them. Once we get through the formality of tabling the document he can read what it says about evaluating the lands, how this will be carried out and how differences in appraisals will be rationalized so that a fair value can be placed on both lands if there are differences in the appraisals done by Pacific Logging or the government. It's very straightforward.

This land trade provides considerable benefit to Pacific Logging in consolidating their holdings and very considerable benefit to the government in making land on Vancouver Island, which up until this time has been in private ownership, available for other uses. I'm sure the people on Vancouver Island are very pleased about having access to this land and having the timber values there available for the small operators. Perhaps as we learn more about the specific condition of the forest lands we can start doing some forest management work. We could get some small operators involved in silvicultural treatments. There are lots of things that can happen. But I don't have the appraisal at this time. When I do have it you'll be more than welcome to see it. I'll sit down in my office. I'll give it to you. I'll table it in the Legislature — whatever you wish.

MR. LOCKSTEAD: The point of this questioning, of course, is that the government has entered into a deal with a private party without knowing what they were dealing for and with. This is the point I'm making. It's all very well to do appraisals after the documents are signed. Who knows what happens or what kind of a deal is struck then? It's like me going out and buying a used car from one of your colleagues over there without looking at the car and just taking his word for it. That would be pretty foolish. In effect that is what this government has done. They have gone out and signed a deal, completed their transaction — in this case with Pacific Logging of CPR — not knowing what they were giving away, without any idea of what they were doing. Was the property worth $20 million, $100 million, $500 million? The minister doesn't know, and the deal has been signed, completed. In my view, that's a shocking way to handle the people's business in this province.

MR. HOWARD: Mr. Chairman, I wonder if I could pose an uncomplicated question to the minister and ask him whether he would be able to apprise the committee of his reaction and response to the recent offer by Noranda of $56 a share for MacMillan Bloedel shares. Does the minister have any views to express about that proposal?

HON. MR. WATERLAND: Mr. Chairman, I haven't studied the details of the offer yet, but the procedure will be the same as is the normal procedure when a suggestion of purchase of major control of a company in British Columbia takes place. We have to assess the implications of it — what it means in terms of corporate concentration, of regional monopoly. When that is done we will be making public whether or not we think it's in the best interests of the province of British Columbia. I haven't had a chance to make that assessment yet. It will be done in due course, in the same manner that all such assessments are made when proposals such as this come forward.

MR. HOWARD: Mr. Chairman, the matter of a controlled company is an easy one to understand. I assume the minister is talking about the interpretation section of the Forest Act, which identifies a controlled company as one where more than 50 percent of the shares are held by one person or by a group of companies or persons which are not dealing with each other at arm's length. That one is easily identifiable. It's a mathematical thing. You just see how many shares are out there, and if one person or group has more than 50 percent of them, that company is controlled. I understand that's why B.C. Resources Investment Corporation only sought to acquire 49 percent of the shares of MacBlo, so they wouldn't then run into any difficulties with respect to whether or not licences, leases or timber holdings could be denied transfer to them. We can understand the controlled companies; that's fairly clear.

The minister mentioned an examination made on the basis of regional monopolies. What does he mean by that? Can he tell the House whether there is some guideline as to what a regional monopoly is? Are there some geographic figures that are available? Are there some figures about percentage share ownership in companies and the like? Has an order- in-council or regulation been passed to identify and spell out what a regional monopoly is, so that the committee will have some understanding that what the minister is saying will be examined with respect to this attempt or offer by Noranda?

HON. MR. WATERLAND: Mr. Chairman, spelling out in detail what is meant by.... I don't believe I used the word monopoly. I'm thinking of regional domination or undue regional control in the hands of one company or communities in an area. It's a difficult thing to lay down in black and white. To a great extent value judgments have to be considered.

The effective control and the beneficial control of a company are two different things. The Forest Act, in its definition of control, uses beneficial control as being over 50 percent. Of course we know that effective control can be acquired at a much lesser percentage of a widely held company. These are all factors that we have to judge in deciding whether or not it's in the best interests of the province. Of course we have to consider the interests of the shareholders of the companies involved as well.

People who own MacMillan Bloedel shares now are offered, I believe, the equivalent of about $56 a share — some in shares of Noranda and some in cash. The interests of the shareholders also have to be considered. So there are many factors that have to be judged, and it's very difficult to have a very hard and fast, spelled-out policy with numbers and percentages, because it depends on the nature of the company and how it's dispersed within the province. The only hard and fast number we have is the control of percentages of the allowable cut.

We have said that the present level of control that MacMillan Bloedel has is the upper limit that we would like to

[ Page 4726 ]

see, so that's the only hard and fast number. The balance is largely in our judgment as government and in the best interest of the province of British Columbia and the use of the forest resource.

MR. HOWARD: Mr. Chairman, the minister's answer, as far as the forest industry is concerned, I think leaves them perpetually in some doubt — with the exception of not being in doubt about what is a controlled company, namely beneficial ownership of 50 percent or more than 50 percent of the shares. Apart from that, the forest industry is obviously completely in the dark as to what the intentions of government might be with respect to undue regional control, monopoly, domination or whatever other euphemism the minister unduly may develop to deal with ownership control of the forest industry. It seems to me to make much more sense for there to be some public guidelines, whether those public guidelines relate to allowable annual cut, area, corporate ownership or interlocking directorships or whatever. I think, Mr. Chairman, by doing this the minister is really expressing that he, his ministry and his government haven't got the foggiest idea what they want to do or want to see happen in the forest industry.

We had that spectacle a few years back where Canadian Pacific wanted to buy some shares in MacMillan Bloedel. The Premier, seeing that there was a political ploy, developed the phrase, "B.C. is not for sale, " on no other basis than to take political advantage of a situation. We now have the spectacle of the government having expressed the opinion that if Can-Cel acquired MacMillan Bloedel, it would be undue concentration and that wouldn't be good. But if BCRIC acquired MacMillan Bloedel to the extent of 49 percent, presumably that would be all right.

AN HON. MEMBER: What if Noranda acquires it?

MR. HOWARD: And maybe even if Noranda acquired it nobody knows. The only clear thing is that the CPR can't acquire it. One can't continue, I submit, to run along on an ad hoc basis leaping from week to week trying to assess each individual situation as it arises and say: "Well, we've got no guidelines, no rules, no clear knowledge of what it is we want to see happen, but we'll look at each situation and make a decision at that time about that situation and determine whether or not that constitutes something called undue regional control or regional monopoly or whatever."

In the area from Terrace through to and including Hazelton there is a regional domination in the forest industry. One company, Can-Cel, has got everything. There wasn't any concern expressed by the minister about undue regional monopoly, control or domination, but it in fact exists. Maybe the region doesn't suit the criterion of the minister; maybe his concept of region is larger than that. But until he's come up with some idea and told the general public and the industry what these guidelines are, everybody in the forest industry i's going to operate on the basis of one simple fact only: that they hope whatever they do satisfies the political sense of the minister at any given time. That's a damned poor way to try to run the affairs of this province, but that's what the minister is saying. "Let's have a look at what the politics are, and we'll make the decision on that basis" — the same way as the decision, politically, was made on a political basis about the CPR, or Canadian Pacific Investments, trying to buy into Mac-Blo. It was a political decision for political purposes advanced at that time with the hope that it would paint the Premier as a person who is the defender of British Columbia rights. Maybe the same thing will happen with Noranda. Maybe the Premier will decide we've got to go the same route, and we'll tell Noranda, "No, you can't buy Mac-Blo, because B.C. is not for sale, " or some other catchphrase. All that does is tend to destroy any sort of clear understanding of what is expected of the forest industry in terms of ownership.

I think those fancy phrases, whatever they are, that the ministers talk about — regional monopoly, undue regional control or regional domination — are just so much froth and foam. They don't mean a damned thing, because regional control exists in some regions, and I identify the Terrace-Hazelton area. There is regional domination by one company — a monopoly. Is that what the minister says is not a good thing'? If so, why didn't he stop Can-Cel from buying out Abitibi's holdings in Terrace'? Why didn't he stop Can-Cel from buying out Rim Forest Products in Hazelton if he was concerned about undue regional domination or control'?

MR. BARBER: I'd be happy to yield to the minister if he would care to reply at this time to the questions raised by my colleague from Skeena (Mr. Howard).

If not, I have a few questions about the extent to which the minister has applied the same standards to the British Columbia Resources Investment Corporation's proposed purchase of a 49 percent total interest in MacMillan Bloedel as he has indicated he has intended to apply to any other private purchaser. I wrote down and noted fairly carefully — correct me if I'm wrong — that the minister indicated, in regard to the proposed Noranda purchase of Mac-Blo at $56 a share, as compared with that proposed by BCRIC at $46 a share, that "the normal procedures would apply" and that the government would "assess the implications," which he then went on to identify as being issues of "corporate concentration and regional monopoly." I wonder if the minister could disclose to the committee what study has been made by his ministry of the proposed BCRIC takeover of MacMillan Bloedel, were that to be accepted by the shareholders of MacMillan Bloedel.

I am aware that this morning in the Times-Colonist and the Vancouver Province, and presumably this afternoon in the Vancouver Sun, a major advertisement published by the board of directors of MacMillan Bloedel advises its shareholders to refuse the offer by BCRIC. I'm well aware it's not a fait accompli. They may make the same advice available in regard to Noranda's intended purchase. Nonetheless, the issue remains, and the question is this: has the minister made any serious study at all on the basis of the criteria, which he himself outlined, to assess the implications in regard to corporate concentration and regional monopoly of BCRIC's proposed takeover of MacMillan Bloedel? The minister may reply that 49 percent ownership is not control. If so, I would remind the minister that he himself said in reply to another question that often in a widely held company — MacMillan Bloedel certainly qualifies as that — you can exercise effective control with far less than majority ownership of the equity interest and the shares. Indeed, it's been frequently argued that Canadian Pacific Investments, for all practical purposes, has controlled MacMillan Bloedel with less than 20 percent interest for some six or eight years now. Nonetheless, the concern we have is whether or not the government has applied the same tests and standards to the British Columbia Resources Investment Corporation, and has made the

[ Page 4727 ]

same inquiries that it would make in regard to any other corporation in the private market.

Let me anticipate another concern that the minister may raise. I suppose he might argue that BCRIC is a company like no other, and therefore the rules shouldn't apply to BCRIC. He may argue that BCRIC is so widely held by the people of British Columbia that you shouldn't consider it a corporation like any other. Therefore the concerns raised on the issues of corporate concentration and regional monopoly — the words used precisely by the minister this morning — are themselves not valid.

Well, I argue strongly that that's not so. I argue as strongly as I can that if you're going to apply any rules at all and require of any corporation that they meet tests of corporate concentration and regional monopoly in the forest industry, those rules must adamantly be made to apply to BCRIC. Because, you see, we have the word of the Premier, for what it's worth, that BCRIC is simply now another private corporation, owned by members of the general public, operating in the public marketplace. If that's true, if the Premier is to be believed, if we're to take him at his word that BCRIC is in fact a corporation like all the others, managed by its shareholders and the board of directors which they elect to represent them, then the minister cannot make a competent reply that BCRIC should not be treated like any other corporation when it makes a bid to take over, in this case, a clearly controlling interest in MacMillan Bloedel, the largest integrated forest company in British Columbia.

Therefore I ask the minister if he would be prepared to disclose to the committee the results of the inquiries that we presume he has made into BCRIC's proposed takeover of Mac-Blo. In particular, could the minister inform the committee whether or not he has uncovered and is prepared to reveal any concerns within his ministry on the issues of regional monopoly and corporate concentration? If BCRIC takes over Mac-Blo, what position does that give BCRIC within the possible markets overseas and within the general framework of the current forest enterprise in British Columbia? How large a company, as a forest-operating organization, does BCRIC become? How many licences would be affected if BCRIC won ownership of Mac-Blo, and might be affected deleteriously in the opinion of the minister concerned about, as he says, issues of regional monopolization and corporate concentration?

If the minister is unable to answer these questions, we can only presume two things: one is neglect of duty, and the other is a double standard. Neither of those is an acceptable reply If you have a report on the proposed takeover of BCRIC by Mac-Blo, will you disclose that report to this committee at the appropriate time? Will you release it to the general public as soon as possible? Will you let us know whether or not BCRIC has met the tests and standards which you yourself this morning have said you will apply in the field of regional monopoly and corporate concentration — the normal procedure that you said Noranda will now be subject to, and that we presume BCRIC has already been subjected to within the framework of the policy you've been outlining? If you can do that, well and good. We'd like to see that report as soon as possible. I imagine that the shareholders of MacMillan Bloedel would also like to see it as soon as possible. We certainly would. I call upon you to disclose that this morning, to table at the appropriate moment the report that we presume you've already conducted, or if it's still being conducted, to tell us what stage it has reached, what progress has been achieved thus far.

But if the minister says that that's not available because it hasn't been done, then we have to point out that two things have occurred. First, there is a transparent neglect of duty on the part of a minister who should be willing to examine the implications of any takeover of MacMillan Bloedel by any corporation, including BCRIC. Secondly. there is the possibility that this government applies a double standard, that BCRIC is not be be treated like all the other corporations, and that just because BCRIC proposes to take a monopoly interest in MacMillan Bloedel — and thereby, it would seem, in the whole of the forest industry in this province — it is nothing we should worry our little legislative heads over.

We think these are legitimate questions. I hope the minister is prepared to answer them at this time.

MR. CHAIRMAN: For the benefit of the record, in deference to standing order 36, I might point out that because of a technical difficulty the Chair allowed the member to stand in another member's place. I just wanted to have that on the record, hon. member.

HON. MR. WATERLAND: Mr. Chairman. the ministry has the statistics available. They're available to anyone who wishes to seek thenm — as to the levels of cut that are held by various companies and the levels of cut they hold in various forest regions. There is an unlimited number of combinations of possibilities of company acquisitions. dispositions and so on that could take place. I don't have a report as such at this time about the possibility of BCRIC acquiring 49 percent, or whatever it is, of M&B. These numbers can be put together. If the member so wishes, I can have the specific combination as to what that would mean put together for him and I can give it to him.

The same thing can be done for Noranda's recent offer — the other holdings of Noranda through Northwood Properties Ltd. and their interest in B.C. Forest Products. What percentage interest do they have? What does that interest mean in terms of control? We can give you the numbers. They're very easily developed. You can interpret them as you wish. Those numbers can be made available. I don't have them at this time; I don't even have them in the form of a single report. But the strategic studies branch of the ministry is assembling this information, and it's public information.

MR. BARBER: I thank the minister for his willingness to disclose the numbers. I appreciate that and will in due course call upon him to do so. What I was wondering is whether or not you're prepared to disclose your conclusions. You correctly observe that anyone can interpret numbers his way. What we're asking for is your interpretation. Is BCRIC's proposed takeover of Mac-Blo acceptable to you within the framework of the policy you yourself have enunciated concerning corporate concentration and regional monopoly? We appreciate the offer of the numbers. We'll take you up on it in due time. What we'd like now is your policy, your version, your interpretation, your notion of whether or not it is an appropriate thing for BCRIC to control Mac-Blo.

HON. MR. WATERLAND: Mr. Chairman, I pointed out the other day that the general policy is that we don't wish to see companies acquire more control over timber rights than MacMillan Bloedel has now. That's in the order of 11 or 12 percent of Crown timber plus tree-farm licence lands. In addition. they have private timber rights, which brings them

[ Page 4728 ]

up to about 14 percent of the total provincial allowable cut, including private lands. We've also said — and I said in the House the other day — that we would allow BCRIC to grow larger than that if BCRIC were to acquire control of MacMillan Bloedel. That is, if you took not just the beneficial interest, but the total cut that MacMillan Bloedel has plus the total cut that BCRIC has through Can-Cel, Kootenay Forest Products Ltd. and others, that would amount to something in the order of 18 to 20 percent. I believe that I have said — if not, I'll say it now — that that would be acceptable.

However, there is also an upper limit to which BCRIC should go. That is not a clearly defined line yet, but I would think that it should not grow much beyond that, if at all beyond that, because you're getting quite a bit of total provincial concentration in one company. You then have to look at the regional problems, because BCRIC does operate in several regions in which they are quite large — the northwest, the Kootenays. Then if you combine MacMillan Bloedel with that the regional concentration doesn't change, because the two companies aren't really operating in the same areas. The total provincial picture is what we look at in that respect.

MR. BARBER: If I understand the minister correctly, he's indicated that were BCRIC to take over MacMillan Bloedel, with MacMillan Bloedel currently occupying roughly 14 or 15 percent of the market — putting it crudely and using figures which I realize are approximate — and given that BCRIC currently has control of Can-Cel, Kootenay Forest Products, Plateau Mills and a couple of other minor holdings, that would take that new enterprise, if it were accepted by the MacMillan Bloedel shareholders, to roughly a 20 percent position in the forest industry in B.C. Do I understand the minister correctly? Yes, he agrees. That's a fifth of the whole market. That's a fifth of the future. It strikes me, for what it's worth, that that is itself too much.

I for one hold that the stronger the forests industry will become depends largely on the extent to which it can be diversified into smaller and more efficient holdings. I've seen in studies, I've met with foresters and I've been told in private meetings — and I have no reason to doubt the veracity of it — that, man per man, Sooke Forest Products from Victoria is more efficient than is MacMillan Bloedel. There may be particular conditions of work and there may be particular historical circumstances that justify that, but I think it can also be argued — and not just by Hershell Smith at Sooke, but by lots of other people in the industry too — that in a certain way, for clear and arguably sound reasons, smaller enterprises are often more cost-conscious, more concerned generally about problems of delivery and service, and more urgently required to maintain a good reputation with suppliers and to maintain as well a good relationship with their employees. I think it can be fairly argued that there is much data across the province to suggest that smaller, well disciplined, well-run logging companies are simply more efficient, more effective and more prudent in their use of the forest resources of this province.

I'm not persuaded that by allowing BCRIC to take over one-fifth of the whole show, we're going to be guaranteed any such efficiency, prudence or caution in regard to the best and the highest possible use of the forest resource in B.C. I'm concerned about that. The minister says that at the moment 20 percent is the limit. Well, it may be that with a new minister, if BCRIC's proposal to take over Mac-Blo were accepted, it would become 25 or 30 percent.

You know, there are people in the forest industry of British Columbia, Mr. Chairman, who are desperately concerned that BCRIC might try to take over all of it. One of the reasons why BCRIC has, to say the least, a not entirely good reputation with industrialists in this province is that those industrialists are terrified that, by virtue of BCRIC's considerable holdings and assets, it is in a position to take over virtually any private enterprise it wishes to in this province. The minister well knows, I'm sure — he no doubt has met with the very same industrialists that the official opposition has met with — that that's one of the gravest concerns faced by business in this province. As Mr. Knudsen put it at a press conference last week, it's like being embraced by a large bear when you talk about being embraced by the loving charms of the British Columbia Resources Investment Corporation. I'm not sure it's in the best interests of a healthy forest industry. I'm not sure that it guarantees efficiency, the best and the highest use of the forest and fibre resource, to allow BCRIC to become even that large.

It could be observed that as far as the stock-market is concerned BCRIC is a flop. BCRIC shares were valued at $11.75 when it started. The Premier artificially lowered them to $6. They hit $5.25 a few days ago. They were at 51/8 yesterday. I don't know what they are trading at today. At the moment, as far as the stock-market tests these things, BCRIC is a bit of a flop. One of the reasons it is a bit of a flop is the reason I am concerned about its proposed takeover of MacBlo. BCRIC has not been perceived to be well run or well managed. The deal with Kaiser Resources was presumed to have been a very foolish deal, and is widely perceived by people within the stock-market industry and within trading industries generally across this province to have been an ill-advised, ill-conceived and most certainly ill-managed proposal.

If BCRIC is able to see its own shares start at $11.75, reduced to $6 and tumble to $5.25 — have all of that happen in a political atmosphere which saw BCRIC off to a splendid start and saw BCRIC make the largest single share sale in the history of Canadian enterprise — if BCRIC has been able to mismanage all of that, how much better can we expect BCRIC to do with Mac-Blo? If BCRIC was able to botch the deal to take over Kaiser Resources and create a great deal of public concern; if BCRIC's relationship with the industrial community of British Columbia is as I've portrayed it — and I think it is one of fear on the part of that industrial community that they might be taken over by this monolith; and if BCRIC shares continue to trade far below the paper value stated when the four commercial houses said two and a half years ago that the paper value should be minimally $11.75, based on the assets that were conveyed to it — having been established and added to by the New Democrat administration; if BCRIC has been able to achieve all of those poor things, what kind of performance might we expect from BCRIC if they were allowed to take over Mac-Blo?

The policy argument that I want to leave with the minister is this. Small can be very successful, very efficient, have good labour management relations and can often use the forest resource in a more prudent and conservative way than any large company can ever do. If all of those figures and cases favouring small enterprise are legitimate and valid — and I think they just might be — then it seems to me BCRIC has got to be able to make a far stronger case than it has so far that it is entitled to a one-fifth control of the forest industry of this province. I'm not persuaded that a company as big as

[ Page 4729 ]

BCRIC is competent to manage as precisely and ably as the forest resource has to be managed. We don't have any evidence of it so far. Look at the Kaiser deal — the problems with its shareholding, what happened to poor Mr. Helliwell and all the rest of it. I don't think that big necessarily means better in this case, and we'd like to hear a far stronger argument from BCRIC management, and thereby from this government, as to why BCRIC should be allowed to assume a 20 percent interest in the forest industry of this province if its Mac-Blo proposal goes ahead.

There's a lot to be said for the Sooke Forest Products companies of this world; they're small, efficient, tough, and have good labour relations. They fight like hell in the marketplace, and they succeed. I think one of the reasons they succeed is because they're small. They're small, they're accountable and you can see what they're up to. The shareholders are absolutely satisfied, and the workers like it too. By the way, Sooke Forest Products has also experimented with a number of forms of worker participation and industrial democracy within the plant itself. Apparently that's another reason for the greater efficiency per man-hour of Sooke Forest Products employees as compared with some of the larger companies. But that's a separate issue for another time.

The policy I would argue to the minister is this: if you think BCRIC is entitled to manage and control one-fifth of the forest industry of this province, we'd like to hear a darned strong argument as to how able BCRIC is in fact to meet that promise and those obligations. On the basis of the poor track record of BCRIC so far, we're not persuaded that it is so entitled, and it might be better to leave well enough alone as it is today.

MR. HOWARD: I wanted to follow along on what the first member for Victoria and the minister had to say about control of timber-cutting rights and the 20 percent figure, which seems to be acceptable as a figure. Could the minister advise us — because I understand Noranda officials spoke either with him or departmental officials, although that understanding may have been improperly given to me — whether they discussed this matter earlier with the department? Therefore the department and certainly the minister would have known that Noranda was interested, especially since Calvert Knudsen of MacMillan Bloedel and the board of directors kept telling the investment community that $46 was not enough, that it didn't truly reflect the value of MacMillan Bloedel, that they were in fact asking for other offers and they were bound to get them on that basis.

If the minister had this prior knowledge that Noranda was interested in acquiring MacMillan Bloedel, can he tell us, using the same references and percentage figures of cut, what it would mean if, for argument's sake, Noranda acquired the 49 percent of MacMillan Bloedel? Add that on top of what Noranda now controls or participates in in timber cutting rights in B.C. through B.C. Forest Products, which is one of Canada's largest integrated forest products companies, as well as through Northwood Pulp and Paper, which have cutting rights and a mill in the Prince George area. Northwood has a pulp harvesting licence covering something in the neighbourhood of 2.5 million acres. I wonder if the minister could give us what knowledge he has about the percentage ownership of those companies and so on, so at this point we'll be able to assess, superficially in any event, whether Noranda would fit within that 20 percent limit that the minister seems to think is okay. Could the minister provide the committee with that information now?

HON. MR. WATERLAND: I've already answered that question. I don't know what the specifics are, because I've only now received the proposal. Noranda, in making their offer, have indicated that they would dispose of certain other assets — various things that they would do. Those numbers are being researched in an attempt to draw them together. They're not available at this time. Noranda have discussed with me their intent to do this, and in order to get the numbers regarding other companies' positions, they have discussed this with my staff. They did that prior to making their offer. I don't have the answers yet. They're being developed now.

The first member for Victoria (Mr. Barber) doesn't agree that BCRIC can effectively manage its assets. He says that it's too big and that it shouldn't get any larger. He says that the Kaiser purchase was a bad deal. He says that the value of the shares, when originally stated, were at around $11 and subsequently went down to about $6. I think the member knows what transpired when BCRIC shares were issued. If an unlimited number of shares had been sold, the value would have been at $6, because that was the purchase price of them. The book value of the company was diluted by the increasing number of shares that were issued. The member understands that. The value of trading on the market does not reflect the worth of the company, especially when members such as the first member for Victoria continue to try to do their level best to state to the public that it's a bad investment, The public begin to believe that, and he depreciates the value to shareholders. I don't think that's a wise thing for him or any other member to do.

That member talks about the concentration of the forest sector into one company. Strange that he should speak that way, because the Minister of Lands, Forests and Water Resources under the previous government had as his objective, which was very apparent to everyone, the eventual takeover of the entire industry into a government operation, and he was working in that direction. The member knows that. He becomes somewhat embarrassed when I say that and begins to wail his head around and make noises as do these members.

MR. KING: That's completely false.

HON. MR. WATERLAND: See how nervous they get when I begin to talk about their socialistic aspirations when they were in government? Is it any wonder that investment in the industry stopped and that the plants and machinery of the forest industry began to run down. No one knew when they were going to be the next to be taken over by the socialists.

The purchase of Kaiser Resources by BCRIC has put that company in the position of having control of the largest coal-producing company in this country, or North America for that matter. They have tremendous assets in energy resources. They're currently planning and working toward the construction of another mine. That company is a tremendous asset for BCRIC. Kaiser has been a well-run company, and I can only conclude it will continue to be, because the same managers are involved with the company now as before. BCRIC is a widely held company with a tremendous resource base in the province. It's a great asset for the shareholders of BCRIC to have, and I feel very confident that the real value of those shares will be demonstrated in the marketplace in the not too distant future, in spite of the efforts of the members opposite to depreciate it in the eyes of the investing public.

[ Page 4730 ]

MR. BARBER: The minister misrepresents the case on two counts. He would have us believe that the reason BCRIC shares have tumbled to less than half their book value is that the market decreed it. That's complete nonsense: the Premier decreed it. The book value of BCRIC shares was set at $11.75 by four different investment houses, who examined the worth of the assets that were transferred to BCRIC, having been taken over and enhanced by the New Democrat administration. For political purposes the Premier artificially lowered the value of the shares to $6, and then the shares were sold. For the minister to try to misstate and misrepresent the case in that way is unconscionable. The market did not lower the value of the shares; the Premier did. The book value was $11.75, and the Premier said he would sell them at $6. Well, fair enough: he did that for political purposes, and he got re-elected — that's how it works sometimes in this province. But the minister has no right at all to misrepresent the facts of the case in regard to the value of BCRIC shares and why they went from $11.75 to $6. To say that it was because the shares were so widely sold and therefore diluted in individual value is completely wrong. The minister should know better, or at the very least he should know enough to keep his mouth shut, if he doesn't know what he's talking about in the first place.

But the second issue misrepresented by the minister is the false claim that it was the policy of our administration and of its Forests minister to nationalize the whole of the forest industry in B.C. That is false. It is, however, on the same level of the equally false claim of the now Deputy Premier (Hon. Mrs. McCarthy) that we had established a secret police force in B.C. It has at least as much going for it as that preposterous piece of fiction did, but it has no more going for it than that.

The minister has no right to misrepresent what actually happened when the BCRIC shares went from $11.75 to $6. It is certainly a matter of interpretation as to why they've fallen from $6 to $5.25. That's fair enough: there may or may not be good reasons for that. I would argue that one of the most important reasons for that is the clear, definable, provable public perception that the Kaiser deal was mishandled, that far too much was paid for those shares and that certain individuals profited in a wrongful way. That's one of the reasons. It's got nothing to do with the value of the coal in the ground or the company itself. It's got a great deal to do with the way in which BCRIC has been managed. The competence and the quality of management of any corporation will inevitably be reflected in the trading value of its shares on the VSE or the TSE or NYSE or anywhere else you care to look. The perception is that BCRIC is not well managed.

We know that the assets that were obtained or created by the New Democratic Party and transferred to BCRIC — CanCel, Kootenay Forest Products, Plateau Mills, the holdings in B.C. Tel — were worth a lot of money. We know it because we created it that way and we managed it well, and we're proud of that achievement. We're well aware that those things are worth a lot of money, and they stand as blue-chip assets in BCRIC's own portfolio.

We're also well aware that the value of coal in the ground at Elkford and Sparwood — the coal in the southeast developments of this province — is significant, but that's not the case we're putting, and for the minister to claim otherwise is to claim a false thing.

We say the reason BCRIC shares are trading so poorly is not because the opposition has the nerve to point out the obvious. We say they're trading poorly because the financial industry in this province has lost confidence in your government and is advising people not to buy the shares because of the debt equity relationships that BCRIC currently suffers under.

Interjection.

MR. BARBER: Then stand up and speak for the stockbroking companies if you will and tell us how they are touting BCRIC shares currently. You'll be lucky to find one stockbroker that's doing that.

MR. CHAIRMAN: Order, please, hon. member. If we continue to address the Chair and side comments are kept to a minimum, we'll accomplish our goals.

MR. BARBER: I accept your advice, Mr. Chairman, and I conclude with this advice to the minister. If you expect us to endorse BCRIC's takeover of Mac-Blo you'd better be able to demonstrate to us that BCRIC is well managed, that its decisions are well taken and that the worth of those decisions and that management is reflected by the stock-market itself in this province. It's a bit much, even for that paranoid minister, to claim that the stock-market is a commie front doing the bidding of the NDP and therefore bad-mouthing the value of BCRIC shares for political purposes.

I don't own any shares in anything except one share in Westcoast Savings. I'm in no position to influence the stockmarket. I don't know what the minister's personal holdings are — they're probably greater than mine — but I do know the stock-market itself has its own expectations, its own standards and its own point of view. The current point of view, expectations and standards of the Vancouver Stock Exchange hold that it is worth about $5.50 a share, period. Not the $11.75 it started at, not the $6 the Premier artificially devalued it to, but $5.50, and it's been trading there for weeks and weeks. It'll likely stay there for some time as well. It may briefly go up to $6.50, $6.65 — no more than that — if it manages to take over Mac-Blo, but it will go back down again. To say that the NDP somehow controls....

Interjection.

MR. BARBER: I know how the stock-market works, and I know how you worked when you falsified the record regarding the Princess Marguerite.

MR. CHAIRMAN: Order, please, hon. member. Again, to impute any improper motive to a minister of the Crown is most unparliamentary. I would ask the member to withdraw the word "falsify." Would the member withdraw the remark'?

MR. BARBER: I always withdraw any remark the Chair asks me to withdraw.

The minister's motives were no doubt not impugnable at all. They were typical Socred motives to try to discredit — in this case wrongly — the vessel Princess Marguerite, but that's another issue for another time.

MR. CHAIRMAN: I would ask the Minister of Industry and Small Business Development (Hon. Mr. Phillips) to come to order and, secondly, I would ask the first member for Victoria to return to vote 98.

[ Page 4731 ]

MR. BARBER: The concern we're raising is whether or not BCRIC is entitled to take a 20 percent stake in the forest industry in this province. We hold that unless the government can demonstrate that BCRIC is better run by its management and better respected by the stock-market than it is today, it has no right to obtain such an enormous position in the forest industry of British Columbia.

Interjections.

MR. CHAIRMAN: Order, please. I will again ask the members to come to order. The member for Shuswap-Revelstoke is the only member who has the floor.

MR. KING: Thank You, Mr. Chairman. I'm the only member in order. That's a customary position for me, Mr. Chairman.

I'm rather intrigued by some of the answers the minister gave to my colleagues. He talked about the undesirability of corporate concentration, either on a regional basis or presumably a provincial basis.

Interjections.

MR. KING: Mr. Chairman, the minister of clearcut is interrupting me again. I don't think there's been an adequate program of regeneration there. Perhaps he wants to get involved in the forest estimates here, and I can't seem to subdue the gentleman.

I was intrigued by the minister indicating that there is a double standard in terms of his government's policy of preventing what he refers to as undue corporate concentration. He indicated previously that BCRIC is exempt from this program. He further clarified that a bit this morning by pointing out that BCRIC will be subject to some limitations also. Whereas the limitation for other companies is about 14 percent, by using MacMillan Bloedel as the model, BCRIC would be entitled to acquire a higher degree of concentration, presumably through acquisition of other companies — private purchases — of up to 20 percent. I'd like to hear something from the minister about precisely what his reasoning is. What is it about BCRIC that allows it this special status? Has the minister done my analysis of the share control and ownership within the British Columbia Resources Investment Corporation? What degree of BCRIC's share ownership and control resides outside the province of British Columbia? Why is BCRIC so special that it should be treated differently than Noranda, for instance?

I'm not going to give dignity to the minister's statement that the previous NDP Minister of Forests sought to take over and nationalize the total forest industry in the province of British Columbia. That's patently false. In fact, there was no nationalization whatsoever but the purchase on the open market of the very companies that this government has placed under the control of BCRIC. That's a matter of record, and the minister should know that.

One of the things that intrigues me is that this minister and his colleagues have criticized the NDP over the years and suggested that we might in some way manipulate the private corporations so that their shares would go down and that we would then be in a position to capture them. What is the effect of this government's policy with respect to MacMillan Bloedel? There was an offer made by BCRIC — S46 a share. MacMillan Bloedel's chief executive officer, Mr. Knudsen, indicated that in his view that was too low. I think that when he did so he indicated that other offers would be looked at — he at least implied that, I should say. That has now occurred, apparently. Noranda has made an offer, but because of this government's policy MacMillan Bloedel is apparently not going to be allowed to consider the higher offer from Noranda because Noranda does not fit the optimum size role which this government has set out with respect to concentration of ownership in the forest resource. Now I want the minister to explain to the committee what effect he thinks that will have on the value of MacMillan Bloedel shares. Does this government believe in free enterprise at all anymore? They call themselves free enterprisers and say they are adhering to the market, Mr. Chairman, but here they arc intervening between competitive bidding for the shares of a private company in the province of British Columbia. They're saying: "According to some secret formula or to some hidden criteria we are going to give preference to BCRIC. We are going to ensure through this vehicle that there is no competition." As a consequence, the value of MacMillan Bloedel shares is going to be depressed. Isn't that the natural consequence of the policy that the minister has enunciated here? I think it is. If I'm wrong, I'd be very happy to hear from the minister.

I haven't taken my seat yet, Mr. Minister, but since the minister is anxious to respond fully and frankly, I would be most interested in hearing his response.

HON. MR. WATERLAND: Mr. Chairman. the member has said that I said Noranda would not be allowed to succeed in their offer for a purchase of a major interest in MacMillan Bloedel. I have not said that. and I think it's unwise of you to let that impression be created in any way to be felt throughout this province or throughout Canada. I have not said that. What I said — and the member may or may not have been listening — is that we would have to assess what effect the Noranda offer would have on corporate size and regional domination in the province. We have not said that they will not be allowed to do it. A judgment has not yet been made.

The industry and the investing public understand well that each time a major takeover is considered in British Columbia, the government does judge that. This is common knowledge throughout the investing world and the forest sector. I think it's very unwise of that member to try to leave the type of impression that he just did. I have not said that Noranda will not be allowed. I said that we're assessing the implications of it and we'll make that judgment with the facts at hand, which is probably an unusual way of operating, according to the way that member operates and the way the Minister of Forests under his government operated.

MR. KING: Mr. Chairman, I don't know what school of logic the minister went to or came from, but he has indicated clearly on numerous occasions during consideration of his estimates that MacMillan Bloedel is the optimum size for any firm operating in the forest sector of British Columbia today, and that no other firm is going to be allowed to grow beyond the size of MacMillan Bloedel — except BCRIC. Under that criterion, which he has so clearly laid out, there is no question that if Noranda acquired MacMillan Bloedel's shares, then their cutting rights, in conjunction with the current MacMillan Bloedel holdings, Northwood holdings and some B.C. Forest Products holdings, I believe, would far exceed the model which he has articulated. It would far exceed the

[ Page 4732 ]

size of MacMillan Bloedel. He said: "No one's going to get any bigger than MacMillan Bloedel, except BCRIC." But now he says: "I didn't say Noranda couldn't come in and bid on it."

Well, of course you said it in a backhanded, foolish way, and you're playing with semantics. Do you think these people are stupid? They may have been stupid enough to deal with your government in the past, but not much longer, my friend. He has outlined a criterion for limiting the size of corporations in the forest industry in the province of British Columbia, and now he says: "Well, sure Noranda can bid." But he's already predetermined that they do not fit the restrictions that he has articulated here. What nonsense, then, to get up and say: "Well, I didn't say they couldn't bid." They've got a message — the same kind of message the Premier gave to CP Rail: stay out of British Columbia. It's the same kind of thing. And when a minister of the Crown gives that kind of indication to the industry, you better think that it's taken seriously.

I've never heard such nonsense in all my life as saying: "Well, I didn't say they couldn't bid." By his own policy, which he has clearly outlined here, British Columbia Resources Investment Corporation is being treated preferentially. He still hasn't answered my question with respect to why there's this differentiation between BCRIC and any other private company. What is it about BCRIC? The Premier said it was not influenced by politics, that it was simply a public company operating in the private sector. He has nothing to do with it any more. What is it about BCRIC, if you really don't have that political umbilical cord still attached, that allows for this discrimination against private companies and this preferential treatment for BCRIC? I ask again: has the minister done any analysis of the shareholdings of BCRIC? There has been a great deal of dealing on the stock-market, both in Vancouver and Toronto, since this government created BCRIC. Who knows what affiliations there may be between blocks of shareholders in BCRIC and other corporations? What criteria is he setting out for extending this preferential treatment to BCRIC?

All we've got so far is a minister who's being stubborn and saying: "Look, I'm going to sit in my office and by my discretion I'm going to wheel and deal, dispense favours and dispense different standards of treatment to different corporations in the province of British Columbia. But trust me. My motives are good and therefore I deserve that kind of broad discretionary power." I say that's not good enough. We've found the minister less than forthcoming when asked to table the deals that he has made on behalf of the people of the province. Only after extreme pressure has he been prepared to table documents with this committee. I see no reason why we should trust him to set policy by whim, by ad hockery, when it comes to dealing with the province's forest resource. The government has a mandate to govern and they certainly have a mandate to set policy, but with that they have a concomitant obligation to set it clearly and equally without fear or favour for all people in the province so it's open and clear and readily understood by the public as well as the private corporations in this province. That's where the minister is remiss, and that's where he's culpable. I'm certainly not satisfied with his performance.

I move that the committee rise and report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: The committee reports progress and asks leave to sit again, and further that a document was presented during the debating committee and the committee requests leave that the document be tabled in the House.

MR. SPEAKER: Regarding a document to which the committee referred, shall leave be granted for the tabling of the document?

Leave granted.

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

MR. KING: On a point of order, I just wanted to apprise the Speaker of the fact that discussion arose during committee regarding whether or not documents could be tabled during committee. I believe there was agreement between the House Leaders on both sides that the Speaker might make a ruling or at least consider the rules that are applicable when documents are requested by leave to be tabled in committee.

MR. SPEAKER: A ruling is not required in that the procedures of the House are very clear on this matter. Documents referred to in committee cannot be tabled in committee but can only be tabled when the House is reassembled. Those practices are well established in this House, and I don't think a ruling is required.

MR. KING: A further point of order. It's my understanding that with leave virtually any procedure could be varied either in committee or the House. The point is whether with leave it is not possible to table documents during committee.

MR. SPEAKER: The House, of course, can instruct the committee and can empower the committee in any way it wishes. However, the committee can only carry out those instructions given to it by the House. As I understand the rules which you have placed in my hands, the committee does not have the authority to either grant leave or deny leave. That can be done only in the House itself. Perhaps we could sit down over a cup of tea in my office this afternoon and discuss it.

MR. KING: Is that an invitation?

MR. SPEAKER: That's an invitation.

HON. MR. WILLIAMS: Continuing the matter which has been raised by the member for Shuswap-Revelstoke, the discussion actually went beyond the question of simply whether we were entitled to table documents in the House. The hon. Leader of the Opposition, in attempting to seek leave for the House to suspend the rules for certain purposes at that time, provoked some discussion, and what he sought was some clear enunciation of the rule or precedent which governs the manner in which the committee must conduct its business under the order of the House. It would be appreciated if you, sir, and the Clerks could address yourselves perhaps to a brief memorandum.

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MR. SPEAKER: It would perhaps be advisable to review again the fact that the committee is constituted and given its instruction by the House. It acts independently and accepts the responsibility to resolve any matters of order while they are in committee. They can, of course, report these matters to the House through the Chairman. The Speaker himself does not involve himself in questions of order in the committee itself. The rules speak very clearly, and I would hope that this would not be seeking to establish some precedent to bring up matters which truly belong in committee to the House itself, except by formal report.

HON. MR. WILLIAMS: Without attempting to continue this discussion too long, what the members really sought during the course of the discussion was some clear exposition of those rules which govern the committee and its conduct.

Hon. Mr. Williams moved adjournment of the House.

Motion approved.

The House adjourned at 12:32 p.m.