[ Page 5809 ]

CONTENTS

Routine Proceedings

Presenting Reports

Select Standing Committee on Standing Orders and Private Bills fifth report.

Mr. Strachan –– 5809

Oral Questions

2, 4-D in Okanagan Lake system. Mr. Skelly –– 5809

Ministry of Tourism automobiles. Mr. Hall –– 5809

Protest against superintendent by Terrace school principals. Mr. Howard –– 5810

McAlpine report on Ku Klux Klan. Mr. Barnes –– 5810

Mr. Lauk

Hazardous chemicals. Mr. Nicolson –– 5810

Violation of Human Rights Code. Ms. Sanford –– 5811

Committee of Supply: Ministry of Transportation and Highways estimates. (Hon. Mr.

Fraser)

On vote 189: minister's office –– 5811

Mr. Lockstead, Mr. Mussallem, Mr. Mitchell, Mr. Howard, Mr. Barber

Division on an amendment

On vote 190: general administration-highways –– 5821

Mr. Lockstead

Division on an amendment

On vote 191: general administration-transportation –– 5821

Mr. Lockstead

Division on an amendment

On vote 201: air transport assistance Program –– 5822

Mr. Lockstead

Division on an amendment

On vote 204: building occupancy charges –– 5822

Mr. Lockstead

Division on an amendment

On vote 205: computer and consulting charges –– 5822

Mr. Lockstead, Mr. Lauk

Division on an amendment

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. Phillips)

On vote 126: minister's office –– 5823

Hon. Mr. Phillips, Mr. Leggatt, Mr. Segarty

The House met at 2 p.m.

Prayers.

MR. COCKE: Mr. Speaker, I have some visitors in the gallery today. In New Westminster we have a community organization called Self Aid Never Ends — the acronym is SANE. Some in this chamber may or may not identify with that acronym. In the gallery are 12 workers for this very rewarding organization. I hope the House will make them welcome.

MRS. WALLACE: I have some guests in the gallery today too. The Shawnigan Lake School has operated for more than 60 years in my constituency. It has provided an educational facility to young men from various parts of this country and others. I'm delighted today to have in the gallery young men of the senior class at Shawnigan Lake School, together with their instructors. I would ask the House to join me in welcoming them.

MR. NICOLSON: Also touring the precincts today are several students from St. Joseph's School in Nelson, their principal, their teacher and two parents. I hope the House would also bid them welcome.

MR. GABELMANN: Mr. Speaker, in your gallery this afternoon are some people who asked me not to introduce them, because I introduced them last year. They are my parents, so I won't introduce them. But I would like the House to welcome my sister Eleanor, who is with them.

MS. BROWN: Mr. Speaker, at 3 o'clock some students from Edmonds Junior Secondary School, accompanied by their teachers Mr. Dahlo and Mr. Smith, will be joining us. Would we welcome them in absentia.

Presenting Reports

Mr. Strachan, Chairman of the Select Standing Committee on Standing Orders and Private Bills, presented the committee's fifth report, which was read as follows and received:

"May 27, 1981

"Mr. Speaker, your Select Standing Committee on Standing Orders and Private Bills begs leave to report as follows:

"The standing orders have been complied with relating to the petition for leave to introduce a private bill intituled An Act to Amend the Vancouver Charter, except for late filing, but with respect thereto the petitioner has paid double fees, in accordance with standing order 98 (3). Your committee recommends that the petitioner be allowed to proceed with said bill.

"All of which is respectfully submitted. W.B. Strachan, Chairman, Select Standing Committee on Standing Orders and Private Bills."

MR. STRACHAN: By leave, I move that the rules be suspended and the report adopted.

Motion approved.

Oral Questions

2, 4-D IN OKANAGAN LAKE SYSTEM

MR. SKELLY: My question is to the Minister of Environment. Two days ago Vernon city council reversed its decision to reject the use of 2, 4-D in aquatic weed control in the Okanagan Lake system. Can the minister assure the House that no member of his ministry interfered with the council by putting pressure on council members in this matter?

HON. MR. ROGERS: Well, there are 1,800 people in the ministry. I don't know if any of them have spoken to anyone on the Vernon city council; certainly I didn't, and no one was instructed by the minister's office to do so. I would be very surprised if anyone in the ministry specifically spoke to them. But the possibility remains that someone from the ministry did speak to people from the Vernon city council. I will investigate and find out and bring an answer back to the House.

MR. SKELLY: I have a new question for the Minister of Environment. It was reported in yesterday's Vernon Daily News that Alderman Yount of Vernon council charged that a Ministry of Environment official, namely Dr. R.J. Buchanan, used threats on the city council to obtain a reversal of their decision. Obviously the minister has decided to investigate this charge. The specific allegation was that Dr. Buchanan blackmailed council, claiming that if they didn't agree to use 2, 4-D they would not receive any other assistance in mechanical weed control from the provincial government. Has the minister decided to investigate this allegation also?

HON. MR. ROGERS: I didn't say I would investigate the first one. I just said I'd look into it; I certainly will do that. I can tell you that the agreement between the Okanagan Basin Water Board and the provincial Ministry of Environment regarding aquatic harvesting of weeds has already been agreed to for this year. I would be hard pressed to understand how anyone in the ministry could threaten to withdraw something that we've already agreed to. I'll look into that as well.

MINISTRY OF TOURISM AUTOMOBILES

MR. HALL: I have just a couple of short snappers for the Minister of Tourism. They're not even multiple-choice questions either. Can the Minister of Tourism advise the House how many automobiles are charged to or belong to the ministry?

HON. MRS. JORDAN: I don't have that information at hand, but I will take the question as notice.

MR. HALL: While the minister is doing that for us, I wonder whether she would find out how many of these cars are painted in the ministry's distinctive colours or with the ministry insignia, and who has charge of those vehicles that are not so treated or identified.

HON. MRS. JORDAN: I assume that's part of the question that I'm taking as notice.

[ Page 5810 ]

MR. HALL: Lastly, having identified that part of the question and that information, would the minister find out who has use of those vehicles that aren't painted in the ministry's distinctive colours or identified with the ministry insignia, and where they're located?

PROTEST AGAINST SUPERINTENDENT
BY TERRACE SCHOOL PRINCIPALS

MR. HOWARD: I'd like to direct a question to the Minister of Education, and ask the hon. minister whether he has received a telegram from the Terrace District Administrators Association — that's the association of principals, vice principals and administrators working within the school board offices — to the effect that that association feels that the activities of the superintendent of schools in the Terrace school district is unfair, insensitive and unacceptable to that body, and that they have a lack of confidence in his communicating skills, leadership style and supervisory practices. If the minister has received such a telegram, could he indicate to the House whether he has decided to respond favourably to the concerns expressed in that telegram?

HON. MR. SMITH: Well, Mr. Speaker, if I hadn't received it, by that question I apparently received the information contained in it, and I'm obliged for that. No, I haven't specifically seen that, hon. member. There have been a number of concerns in Terrace in the past few weeks, as you know, which flowed from a decision by the local board to transfer two principals from their duties as principals back into the classroom. Last weekend I dispatched my Deputy Minister of Education and my assistant deputy minister to Terrace. They went to Terrace on Friday and again on Sunday and held very lengthy discussions, both with the officials and members of the school board and also with the representatives of the teachers. The result was that a wildcat strike planned for Monday was averted by agreement on both sides, and the two teachers who were transferred to the classrooms have been granted transfer appeals according to a procedure which, actually, the member and I discussed in committee. The member had a hand in assisting me in that. The new procedure is that both parties name a nominee. They have chosen — I gather in both cases — their own chairman. The matters in that district appear to be moving toward a resolution. But I will certainly take into account the telegram that he alludes to. I thank him for his question.

MR. HOWARD: Am I to assume that this telegram, which was sent to the minister from the Terrace District Administrators Association on May 19, has not yet been brought to the minister's attention, even though it was directed specifically to him?

HON. MR. SMITH: No, Mr. Speaker, the member would not be correct. I have had a number of communications from that district, and I would not be prepared to respond today to that one. That will be a matter that will be under review, along with the decisions of these two transfer appeals. It would be impossible for me to respond to that telegram until I've had the benefit of considering the decisions of the two transfer appeal committees that have been set up. I could not give a favourable or meaningful response.

McALPINE REPORT ON KU KLUX KLAN

MR. BARNES: I have a question for the Minister of Labour. On May 6 the minister indicated that the only thing required for the McAlpine report on the KKK was the addition of an index. When asked whether the minister had asked Mr. McAlpine to make other changes, the minister replied: "None." Has the minister now decided to table the report?

HON. MR. HEINRICH: The report will be tabled in due course.

MR. BARNES: The author, Mr. McAlpine, has accused the minister of stalling on the release of the report. Is the minister stalling the release of the report?

HON. MR. HEINRICH: The answer is no, I'm not.

MR. LAUK: I have a supplementary to the Minister of Labour. If the minister is not stalling the release of the report, who is?

MR. SPEAKER: A further question from the first member for Vancouver Centre.

MR. LAUK: The report was delivered in late April — 29 days ago. It has 80 pages. If the minister were the slowest reader in the world, that would be two and a half pages a day. Who is stalling release of the report? Why is it not being released now? Can the minister explain that?

MR. SPEAKER: A further question from the first member for Vancouver Centre.

MR. LAUK: Why is the minister such a scaredy-cat?

HAZARDOUS CHEMICALS

MR. NICOLSON: I have a question to the Minister of Environment. The Minister of Forests (Hon. Mr. Waterland) has approved and is using chemicals, Captan and Benalate fungicides, which have caused harm to tree-planters handling seedlings treated with these chemicals. Yet the Forests ministry continues to use them, sending out trees in cartons which are literally dripping with these chemicals. Has the minister decided to investigate?

HON. MR. ROGERS: The simple answer is yes, but I think perhaps if I give the member a little information it might be helpful. This particular chemical is one of the IBT chemicals, which puts it on that list of ones that were approved by the laboratory that didn't do the thorough test. It has been used in British Columbia since 1949 in everything from wallpaper to rose dust and other things.

There is a difference of opinion between the federal Minister of Agriculture, Eugene Whelan, who approves these chemicals, and Monique Bègin, who is the Minister of Health in Ottawa, as to whether or not they should be put to household uses, and indeed to other uses. I will look into the specific question that you brought up. We are in almost daily contact with the federal ministry regarding their position as to whether the use of Captan will be allowed for all the uses that it has been put to in the past. We have no specific record within our ministry of problems in British Columbia in dealing with Captan.

MR. NICOLSON: Mr. Speaker, I've been assured that a person wearing gloves had contact dermatitis occur immediately upon using it. There were six tree-planters planting, in this particular instance. It appears that the trees in question were diseased trees and they were literally soaked — put into plastic bags and then shipped up into the field. I ask the minister which is more important, the health of the trees or the health of the tree-planters?

[ Page 5811 ]

HON. MR. ROGERS: I think the question is facetious. Obviously the health of the planters is more important than the trees. But this concern has not been brought forward to the pesticide control branch of the Ministry of Environment. It may have been brought forward to the chief forester or people in the Ministry of Health, but it hasn't been brought forward to me. I'm delighted that you brought it forward today. On the specific case, I know we've had discussions about this chemical, but if this information has been available to you for some time, I wish you would make it available to me.

MR. NICOLSON: Mr. Speaker, I take it from that that the minister has not been notified by members of his ministry, with whom we've been in contact since Friday. Is that correct?

HON. MR. ROGERS: I've had discussions with officials in my ministry today and yesterday on a wide range of topics. I'm not sure who, specifically, is "we" and who, specifically, you have referred to in the ministry.

VIOLATION OF HUMAN RIGHTS CODE

MS. SANFORD: Mr. Speaker, I have a question for the Minister of Labour. Mr. Gray-Grant, the publisher of Western News, was recently found in violation of the B.C. Human Rights Code by publishing an advertisement which stated: "Male student, 17-25, training for management." The publisher was before a board of inquiry. Usually in cases where there is a clear violation of the code it is normal for a cash penalty to be assessed against the respondent. The penalty in this case was initially set at $750. Can the minister advise why his human rights director instructed that no cash penalty be applied in this case?

HON, MR. HEINRICH: Mr. Speaker, I'll take that question as notice.

MR. SPEAKER: I recognize the member for Alberni, who seeks the floor on a point of order.

MR. SKELLY: Mr. Speaker, in response to a question from the member for Nelson-Creston (Mr. Nicolson), the Minister of Environment (Hon. Mr. Rogers) indicated that he had in his possession a list which he called the IBT list. He cited one of the chemicals from it, namely Captan. I understand that, under our standing orders, if a minister quotes from a list or a document that he has in his possession, he is required to table that document in the House. The minister has consistently refused to make this list public or to table it in the House in response to letters and written questions on the order paper, and I would ask you look into this point of order.

MR. SPEAKER: We have reviewed the practice on tabling documents referred to in the House and even in committee. I will send the member a copy of that recent review.

Orders of the Day

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

ESTIMATES: MINISTRY OF
TRANSPORTATION AND HIGHWAYS
(continued)

On vote 189: minister's office, $213, 962.

MR. LOCKSTEAD: I have two very brief questions for the minister at this point. I would like to ask the minister-or one of the people joining him in this Legislature today-how many mines rights-of-way have been approved in the 1979-80 and 1980-81 period. Is the system which has been in place since 1925 still functioning well, or does the minister have problems with that system?

While I have the floor, I do have another question of a very local nature. It is a matter which I brought to the attention of a senior member of the ministry just a couple of days ago. Perhaps the minister would comment on this matter. It is the proposed ferry scheduling between Texada Island and Powell River. The ministry is planning to withdraw the vessels currently serving Texada Island for two sailings a day to supplement the Comox-Powell River run. The better solution might well be, as proposed by many of the licensed personnel on both of those crews, to put on two extra sailings a day of the Sechelt Queen, which is presently serving the route between Powell River and Comox. There is a great deal of dissatisfaction on Texada Island, which is in my constituency, We know that people living on islands consider the vessel that serves their area as their vessel. I can understand their problem. I did promise such groups as the Texada Island Chamber of Commerce and others that I would mention this matter to the minister, so perhaps the minister could respond.

HON. MR. FRASER: First of all I'd like to reply to some of the observations made by the member for Esquimalt–Port Renfrew (Mr. Mitchell) in the latter part of yesterday. To make some observations in the riding of Esquimalt, we have what we call the Western Community. It's a large, non-municipal area. I don't know how many people live there, but I would guess it's between 30,000 and 50,000. It depends who you talk to, but it's a large unincorporated area. It's probably the largest in our province.

I guess I'm biased. I was in the municipal field. I think the answer to all their problems is incorporation. I know that they've attempted that by votes, but it seems to me that their problems are horrendous and getting worse. Maybe that's not the right phrase. The worst part of it is that as more people come in, it complicates and compounds all the problems that are out there. It seems to me that they continue to deteriorate because of the increase in population. There's nothing wrong with it. It's a nice place to live, but the only authority there is the regional district. I don't know where they're at, or what the member's position is on that. As one person in this Legislature, I think it's worth it to try and incorporate. In the meantime, we all have to try and resolve the problems that exist and have been there for a while. They're going to continue to be there.

Regarding the Western Community and this ministry in relation to roads, more money has been spent since 1976 on better road facilities. I refer to the Trans-Canada Highway. I remember when we first took over government in 1975, and I remember five or six years before that. Blanshard Street had come to a dead stop 20 years before. The widening of the Trans-Canada Highway to the Western Community had been talked about for 20 years. You don't talk about that any more,

[ Page 5812 ]

because it's all done. It was done between 1976 and 1978. This doesn't discount the fact that there are still problems beyond that in the Western Community.

I have some notes here on the traffic volume on Sooke Road beyond Colwood. It's about 70 percent from our normal warrant for four-laning. Consequently, four-laning is not likely to be considered for about five to seven years. I assume that would be based on what has happened in the last three or four years regarding population increase. If that declined or increased, those years would vary. In the meantime, we propose to make progressive alignment improvements each year and to attempt to provide short four-lane sections for passing.

Regarding subdivision approvals which the member brought up, I might say that that's under this ministry's jurisdiction all over the province in rural areas. We do thousands of approvals a year. I think our ministry does a fair job of it. We work in conjunction with the authorities. In the case of the Western Community, of course, we work in conjunction with the Capital Regional District. Our ministry has nothing to do with zoning. They have that authority, but we have the authority of final approval of subdivisions. I'm not so sure that they always see eye to eye on these things, but they do try to work out their differences. "They" are the Capital Regional District, our senior ministry officials and district officials as well.

You mentioned Marler Drive. I've heard that name before in relation to flooding of Craigflower Creek. It's my information that the Marler Drive flooding problem has now been settled; that is, all technical questions have been settled with the residents. We know what we will do. All that remains is the sharing of costs. We will be discussing this with the residents very soon. I might say that various alternatives have been considered to solve the flooding problem. Those include dyking, concrete or sheet-pile barrier walls, filling lots and raising houses to match new elevations, and creek cleaning. The most recent meeting was attended by homeowners and representative officials of this ministry. The homeowners favoured raising their houses. Homeowner representatives have been requested to have estimates updated for raising and subsequent restoration of the houses. Now that the technical work is complete, a joint meeting with the residents, the Ministry of Environment and the Ministry of Transportation and Highways will be arranged to investigate a program for financing of the work. That is a bit of detail on the perennial flooding problem created by Craigflower Creek.

I haven't an answer for the member for Mackenzie (Mr. Lockstead) on the Texada Island-Powell River ferry. I wasn't clear about the question on the Ministry of Energy, Mines and Petroleum Resources right-of-way. I do know that in practice we work in close conjunction with the Ministry of Energy, Mines and Petroleum Resources on rights-of-way. I'll try to find out what's going on with the Texada Island-Powell River ferry. I wasn't aware.

MR. LOCKSTEAD: Mr. Chairman, I'll very quickly clarify a point. I'm sure your assistant deputy minister, Mr. Johnson, will clear up the matter of the Texada Island ferry. The point I was attempting to get at in the question of the jurisdiction of Highways in relation to Mines is that it would appear that you're going to be relinquishing that jurisdiction to Mines. It happens to be the view of many people, including me, that perhaps your ministry is the ministry that is best qualified to decide on this type of road construction, and not some mining company or some Minister of Energy, Mines and Petroleum Resources, as we have at the present time, who won't listen to anyone, will take no advice or direction and is incompetent, among other things.

MR. MUSSALLEM: Mr. Chairman, I would like to thank the minister for his kindness to the constituency of Dewdney. I hope it will continue.

Today I ask for a change in alignment of the Albion ferry on the Albion side. Usually in the mornings, afternoons and evenings there's a large backlog of cars waiting to get on the ferry. These are parking on the regular roadway, almost cutting off one lane of traffic. There was an accident there two or three days ago. I'd like to suggest to the minister that a slight realignment of the highway at that point, moving the road over about four feet and creating a parking lane on the south side of the road, would cost very little, would be very desirable and is very necessary.

As the minister knows, the two little ferries at Albion are carrying more traffic than the number one route of the B.C. Ferries. That's very important and they're very proud of that. At the same time I wonder if I could also ask the minister if you have another ferry standing by of the Klatawa class that would handle six more cars. If you could exchange that for the one we have there — the Laguna — it would help the traffic situation immensely. I understand you have such a ferry somewhere in your backlog of ferries.

I'd like to say to the minister that the heavy traffic at this point in the highway system must indicate to him the necessity and importance of a bridge at Albion. At this time I'd like to ask him formally to give consideration to a new bridge structure in the Albion-Langley area, somewhere within half a mile of Albion either way.

MR. MITCHELL: I would just like to carry on with a little bit more questioning on what I brought up to the minister yesterday. That was some public announcement soon of what potential program the ministry has for the establishment of the Millstream extension and the east-west grid system, especially in the Langford-Colwood area. Today I received a piece of correspondence from the minister in which he indicated that they are going to extend Kelly Road through to Jacklin Road at the intersection of Jacklin and Jenkins. In the correspondence the minister stated that there was no intention of upgrading Jenkins Road. As I said yesterday, Jenkins Road is a small community, and if the extension of Kelly Road is going to be part of the east-west grid system, you're going to be running all this traffic into Jenkins Road, which is a very quiet, narrow little street. It's very much like taking a glass and putting a firehose into it. It's all right if you hold the firehose, but if you happen to be holding the glass you're going to have an awful lot of spillover. Without some serious and proper planning in the whole Western Community you're compounding the problem.

I feel that the ministry, because there's no other jurisdiction out there, must bring in some type of planning and grid system that is going to develop the area and open up some of the land that right now is undeveloped, but is not going to create a problem to the residents who are established in that area. My big problem is a problem that's facing that whole Western Community. All kinds of stories are going about. In six years the ministry has been working on this particular program, and I sincerely believe from information that filters out into the community that there are proposals. I think these

[ Page 5813 ]

proposals should be laid out not to the MLA or regional people but to the general public so that they have a chance to get some input and ideas into the possibility of what's going to happen out in that area. As I said yesterday, the minister is the czar, the supermayor of that area, and until such time as his government does something else to change it, this is a problem.

One other question he failed to cover. I would like to thank him if I read him properly that they are going to settle the problem on Marler Drive. They are going to raise the houses and fill in the low spots. I would like to congratulate him. It's been three years now, and if we've been successful in getting one problem straightened out that's fine.

We have two other major flood problems in that area, and I know the minister met out in the.... One was to discuss the Bilston Creek problem that has been aggravated by the large number of subdivisions that are developing in the Western Community, especially on Triangle Mountain and along the Kershaw canal, which drains Florence Lake and the Millstream area. Are there any plans for flood control of these two particular areas? Is there any long-range program from the ministry, either to the Capital Regional District or to the local community, for taking hold of the problem and trying to get some solution to it?

HON. MR. FRASER: I guess the member for Mackenzie (Mr. Lockstead) has stepped out. But just for his information on his question regarding mines, we have proposed a minor amendment to the Mining Right of Way Act to change the minister responsible. It's to avoid a repetition of a minor legal process. It is a legal change, and really does not affect who builds or maintains the roads.

I have a reply here for the member for Mackenzie regarding the Comox-Powell River run and the run to Texada Island. Last year the Sechelt Queen was speeded up during summer months to give extra trips. Due to mechanical problems experienced last year, we cannot speed this ship up this year. Instead, we have arranged for full use of the Albert J. Savoie at Texada Island and shared use of the North Island Princess for the gulf crossing. This will give at least as much capacity at rush hours and in total more trips per day for Texada Island. I hope that answers that.

The member for Esquimalt–Port Renfrew (Mr. Mitchell) is back again. Discussing Jenkins Road, I remember sending the letter to you. But I think that in this whole Western Community.... The member is asking about planning, and I believe our ministry has some ideas about that. They've dealt with the Capital Regional District about it. I don't think it's acceptable to them, but I don't want our ministry to impose that plan on them. In other words, if the local elected people can't make a decision, we're not going to impose one on them. I think that's really what's going on out there. I would suggest that everybody get together at the elected level, including the MLA, although he said he'd exclude himself. I think we've all got to get together and find out what these people have been talking about and who's holding up what. I believe our ministry — I'm talking about transportation corridors and that — has made suggestions, and they have not been acceptable to the elected people.

Alternatively, I think what the MLA is saying is that the public doesn't know what's going on either. I think it's about time they were informed. I don't know just what vehicle to use, but we should be using the vehicle that the local elected people, the area directors.... If they want to call a public meeting on that, I'm sure that our ministry officials will have their ideas and put them to a public meeting. Maybe that's the avenue we've missed. We've been talking to elected people. They have their rights — whether they like something or whether they don't. They don't have to accept our ministry's ideas about transportation corridors and so on. That's where I think the breakdown has taken place, but I might be mistaken.

You did mention the plans for remedying floods. Basically that doesn't come under this ministry at all. That's the responsibility of the Ministry of Environment. We always get involved in the floods when they happen, with the assistance of the Ministry of Environment. Again, maybe something's missing there, in that the Ministry of Environment is not being notified. I know that our ministry works with them every day in all areas of the province regarding flood conditions. But they're actually the ones responsible for laying out a plan to remedy a flooded area. In other words, in the Ministry of Transportation and Highways we do what we're told by the Ministry of Environment.

A few more notes here. Bilston Creek drainage depends on the organization of the residents into a drainage district or some such solution. Again, I guess this is a local community thing. What we're saying is that they should organize themselves into a drainage district to come up with a solution to that problem. I think that pretty well covers the member for Esquimalt–Port Renfrew. I'm inclined to agree with you that maybe the elected people could call a public meeting. Maybe they have done so, I don't know. If the citizens are confused and the rumours are flying around, that's a good way to clear it up.

MR. MITCHELL: There are just two things the minister said that I would like to comment on, Mr. Chairman. I agree that the MLAs, the ministry and the elected people should meet together. When I kind of invited myself to a meeting he was attending with the Minister of Municipal Affairs (Hon. Mr. Vander Zalm), the Minister of Municipal Affairs thought it would be good idea, but I gather I was not invited by the Minister of Highways.

There is one other thing I would like to mention. You did mention that they should form an organization to look after the flooding on Bilston Creek. I find this very strange, Mr. Chairman, because it was this government that dissolved the last organization that was formed in order to try and come up with some suggestions for the Bilston Creek flood control. It was the present government that dissolved it and left the impression that somewhere down the line there was going to be another vehicle or another organization to take up the problem. Now I kind of gather that the minister is recommending that they form another Bilston Creek improvement group. If this is what he is recommending, I would be happy to get it in detail.

HON. MR. FRASER: Mr. Chairman, I appreciate the observations of the member for Esquimalt–Port Renfrew, but I want to reply to the member for Dewdney (Mr. Mussallem) on the Albion ferry that runs on the Fraser River. We've got a real transportation link in our province here. The Albion ferry crosses the Fraser River between Albion and Langley, and business is so good we can't keep up with it. We had to put on a second ferry at the insistence of the MLA for Dewdney some two years ago, and we still can't keep up. I think we have the same situation going on here as we have between

[ Page 5814 ]

Courtenay and Campbell River — at least that's my version. Everybody who lives on one side of the river works on the other, and vice versa, and they all have to cross, in this case, the Fraser River either to their dwelling place or to their work place.

The member doesn't like me to say this, but he well knows that there is a good bridge in his riding which is just getting completed after ten years. I refer to the bridge at Mission. They don't have to use the ferry, but it's a long way around to the bridge to go from Mission or Haney to work in Langley, or vice versa. So we have this excellent ferry service, and now it is creating problems with congestion. All I'll say to the member there is that we will look into that immediately. We don't like that to happen. This member says: "All we need is a wee bit of blacktop four feet wide." Well, when I take this to the engineers, they'll say: "Yes, but we've got to spend $1 million to put the four feet of blacktop on a road surface." We'll sure try and do what we can, because that's a busy highway, and we don't want them parking there and obstructing it. We'll look into that immediately because of the buildup.

To the member for Dewdney, Mr. Chairman, your other request was regarding a bridge. I can assure the member that there is no bridge in the immediate plans of the Ministry of Transportation and Highways. We're concentrating on another crossing further down on an arm of the river. I don't want you to hold out any hope that we're in imminent danger of calling a tender for a bridge between Albion and Langley, but to the best of our ability we must maintain the ferry service. I think that pretty well replies to the member for Dewdney.

MR. HOWARD: Mr. Chairman, I shouldn't be more than 20 to 25 minutes in relating some of the problems we're confronted with in Terrace, Smithers and the like.

I just sent the minister a photocopy of some pictures I took a week ago last Sunday at a railway crossing called Carnaby crossing, along Highway 16 between the community of south Hazelton and Kitseguecla.

AN HON. MEMBER: While you were driving.

MR. HOWARD: Yes, while I was driving. I was not on the bus.

For the edification of you, Mr. Chairman, and others, it is a picture of a bus that could not, for a variety of reasons, negotiate the sharp right-angle turn off the highway and across the railway track, and thence another sharp left turn back onto the highway. To avoid missing a semi-trailer that was in front of it, the bus swerved to the right onto the shoulder of the road. It took out a railway-crossing signal and went over the tracks and the pot-holes on each side of the crossing and up over the abutment along the curve of the highway on the right-hand side going south.

I just happened to be going from Terrace to Hazelton that day, and arrived there shortly after this had occurred. It was a passenger bus, but it was not in commercial use. It was bought by a private owner who had it as his own van. He was not unfamiliar with the road, as many people are during tourist season.

I send that across to the minister and say to him that, as he knows, that is a very dangerous, very disastrous crossing at Carnaby, because of the approaches to it. There are many instances of cars being unable to negotiate the turn, going either north or south because they're faced with the same sharp S-turn in each direction. The concrete abutments on the side are scarred by burnpers and blackened by tire marks because of previous vehicles being unable to get around there. In many instances, cars have gone right over the edge. The driver of that bus and his family were not hurt; they were very lucky.

That highway needs to be rerouted. You need to eliminate that level crossing, run the highway on the east side of the CN railway line continuing southward, and come back out on to Highway 16 just beyond the place known as Skeena Crossing. That's where the railway goes across to the west side of the Skeena River. I am advised that the Highways ministry has got the right-of-way, the land, and they've got everything in place, but they haven't got around to doing it.

In addition to that, I want to raise a general question of Highway 16 proper, specifically that area between Kitwanga and beyond New Hazelton. The blacktop has been broken up. It has pot-holes and splits in the centre of the highway where the asphalt originally came together, one strip laid on one side and one on the other. It's a very unsatisfactory and dangerous strip of road.

The minister wrote to me in response to a letter I had written to him earlier saying that yes, they were going to fix that road in 1980. Now 1980 came and went, and nothing happened. So I would appeal to the minister to please do that.

I want to make a third point very briefly. This is information that I communicated to the ministry by way of correspondence. I just want to take the opportunity briefly to lay it before him now. Some concentration of effort beyond that which has taken place in the past should be expended upon the so-called back roads, and not just exclusively the arterial highways. We've got a number of back roads in Skeena, as there are in other rural areas, that have been gravel or dirt roads since time immemorial. They've had the occasional grading, and the occasional move to take out a bad comer, or something of that sort; but it's very insignificant in terms of the actual need and requirement.

My people would be most happy to have a diversion of some of the funds that are committed, and have been committed in the past, to arterial — highways. Some of those funds could be used to upgrade those back roads, like the one from Terrace to Rosswood, or the ones at Driftwood and Glentanna, outside of Smithers, and the one up the Kispiox Valley, which will be blacktopped later this year, I understand.

When I raise those questions very briefly to the minister, I don't particularly expect him to reply and make a firm commitment that everything's going to be fixed immediately. But very briefly, I would like to have some commentary from the minister to be able at least to say to folks back home: "Yes, the minister understands what the problem is, and he is either going to do something about it, or he's not going to do anything about it."

HON. MR. FRASER: Mr. Chairman, in reply to the questions of the member for Skeena, the Carnaby crossing requires a relocation, as you said. We don't need to build an overpass. We have to relocate our highway, and we're not quite ready to go. That section is being designed, but we're still having minor problems acquiring right-of-way from the Indian band. We don't anticipate a long holdup, so I hope we can have that crossing eliminated, say, 12 months from now.

MR. HOWARD: Eleven? Are you negotiating?

[ Page 5815 ]

HON. MR. FRASER: I'm speculating. As I say, I hope we don't have too much difficulty acquiring the right-of-way. It's my understanding that a small part of the revision is on Indian land.

Paving on Highway 16 — we've got to do some work on the road before we can pave it, so you're going to have to wait there. I agree with you on the back roads; I'd like to do that. I might say we've started in your riding. I think as we talk here today the road to Kispiox is being paved; I hope it is. It was rebuilt and they're paving it. That's the sort of thing we should do, particularly with all the resource communities. In the case of Kispiox, the logs are coming from 60 miles north, down through built-up areas. Those roads weren't designed for it in the first place. Secondly, the dust stays in the valleys. That's what we're trying to do. We've got a handle on that. A lot of people live at Kispiox. As I say, last year we rebuilt the road so it will hold pavement; this year the paving contract was let and I'm pretty sure they're working.

MR. MUSSALLEM: I thank the minister for his reply regarding the widening of the strip at Albion. I can assure him that it's not a major job; it's a very small job. I hope that he'll do it very soon.

The bridge at Albion — I do not expect that at the present time, of course. I know that the Annacis Island bridge must be first. But I think the ministry should be making a study of the situation — not an in-depth study but an engineering survey of the area — because there's no doubt about it: a bridge will have to be built there in the near future. I hope the minister replies that he will give that some consideration. We don't expect it immediately, but we hope that it won't become a crisis before we start building or planning it. That's the request I make at this time.

MR. BARBER: Mr. Chairman, in many progressive jurisdictions, both in Europe and in other places in North America, Ministers of Highways are responsible for building roads for more than simply the private automobile. They also build roads for bicycles. They build roads for a large number of people in certain communities — a growing number of people most particularly in greater Vancouver and greater Victoria — who choose that particular alternative for reasons of economy, efficiency and personal health. In progressive jurisdictions they have policies that finance the construction of what are usually called "bikeways." In progressive jurisdictions these bikeways serve both recreational and commuter travel purposes. In progressive jurisdictions the value to one's personal health is respected, and the contribution that people who use the bicycle instead of the automobile make to the energy economy of those areas and states is also respected and acknowledged in public policy.

As is frequently the case on the west coast of North America, the state of Oregon is leading the way. For — I believe it is now — six years running, the state of Oregon, via state law, via policy adopted on both sides of that state Legislature, has enunciated a statute which requires that one half of 1 percent of the annual appropriation for state highways shall be directed toward the construction of recreational and commuter bicycle paths.

I realize that the particular label is the sort of thing that causes giggling on the part of some people without vision about alternative modes of transport to serve human beings who either do not wish to use or cannot afford to use the private automobile. But I want to argue as seriously as I can with the minister that in the great urban communities of North America, especially in those blessed by the topography and the climate to allow year-round use of bikeways, it is in fact a very practical investment. It is in fact a step into the future. It is in fact a commitment to the personal health, to the energy conservation policies and to the increasing safety that has to be observed — especially in the case of very young children who use bicycles for perfectly obvious reasons.

I for one — and I'm sure the minister agrees — am sick and tired of reading what happens when we have collisions between three-speeds and Buicks. I think almost invariably the Buick wins, the three-speed loses, and sometimes the child loses her or his life. One of the reasons is that in many of these communities we have no physical separation of the bicycle from the automobile. Invariably the Buick wins, and sometimes it takes a life in the process of winning.

In the Capital Regional District the police estimate there are currently 120,000 bicycles on the road. That's far more than there are automobiles on the road. Again, in particular urban communities where both the weather and the topography encourage this form of transportation, especially — but not exclusively — on the part of young people, we also have a public-policy question of public safety raised, When anyone bicycles in Victoria — for recreational or commuter purposes — on Shelbourne Street, it just isn't safe. I'm sure the minister has driven on it and he knows it's not safe. In the case of that particular street, probably no realignment is possible. However, there are alternatives possible.

I was pleased to be involved in 1974 and 1975 — as one of the organizers and as the treasurer — with the first regional district committee on bikeways. We put together a proposal for recreational and commuter bicycle paths across greater Victoria. It was formally endorsed by the Capital Regional District. We built a bikeway, and unfortunately, no more has occurred since then. Why is that? Because it's hard to get people to take the issue seriously until their kid or neighbour's kid has been run down on a bicycle. Then they begin to worry about questions of public safety. It's hard to get people to take it seriously until you examine the energy economy of North America and begin to realize the profligate waste associated with the private automobile. You begin to wonder whether or not there are other jurisdictions that have had some success in promoting alternative and efficient means of public transport.

It's clearly the case in progressive countries in western Europe that they've had considerable success adopting, promoting, supporting and paying for the alternative modes that must be established in order to make bicycling safe, efficient and affordable. There are many nations around the world where the bicycle, not the automobile, is the principal means of public transport. There's nothing wrong with those nations and there's nothing wrong with that policy. In a country like our own, where gas currently costs roughly $1.60 a gallon, more and more people, for reasons of personal economy as well as in the interests of the public economy and energy conservation, are turning to alternative and cheaper modes of personal transport.

That being the case, I ask the minister — as I've done, I think, every year since I got elected — to consider and to promulgate a policy, in the interests of public safety, personal health and energy efficiency, that at least does what the state of Oregon has done for the last half-decade. They commit a part of the annual appropriation for highways to bikeways. The state of Oregon has a full-time state employee who is an

[ Page 5816 ]

engineer in the highways department and who negotiates with the counties and cities of Oregon the design, placement, siting and configuration of bikeways. Having so negotiated and assisted with the design work, the counties and cities are then entitled to draw from the appropriation by way of a proposal to the state Department of Transportation. It works in Oregon. Similar proposals and achievements have now been attained in Illinois, New York, Connecticut, Pennsylvania, California and, most recently, in Washington state.

In this country, the National Capital Commission has for the past four years pioneered public investment, for the purposes of the safety of individuals — most often children — and for the purposes of personal health and energy economy, in the creation of a network of bicycle paths on the Quebec and Ontario sides of the national capital. They have something like 400 miles of physically separated and safe recreational and commuter bicycle paths.

Interjection.

MR. BARBER: These are paid for by all Canadians, Mr. Minister.

That being the case, it seems to me that all British Columbians might have an interest in examining some of the reasons for the success elsewhere. Once more, I ask the minister to consider such a policy. I recognize that not every part of the province has the topography or the climate to justify it. In many cases the distances are far too great. But in the large, urban communities of British Columbia — and they are many and they are growing — it is, in fact, a rational and intelligent policy. It has precedent and success elsewhere. We should learn from it. We should be prepared to commit ourselves to it and to spend the money necessary to put it in place.

In particular, I ask the minister to look at the old CNR right-of-way. It is clearly one of the ways in which we can both enhance the tourist industry and establish a model recreational bicycle path that runs up the heart of southern Vancouver Island. Any grade that a train can take can most certainly be taken by a human being on a bicycle. Hopefully the CNR right-of-way will be returned to full public ownership in the very near future — by which I mean, local administration in this province — either through the regional district or the ministry. That being the case, it seems to me that one of the most appropriate immediate uses for that is to establish it as a hiking and bicycle path. It's extraordinarily beautiful in many of its stretches. For the purposes of local as well as tourist recreation, there's a tremendous possibility here. If we have any vision, wit and imagination at all, we'll seize this particular opportunity, we'll make it our own and we'll make it work. The relative cost of building that is far less than building an ordinary and conventional road.

I ask the minister to also consider, within the context of his welcome — and I welcome it and support it — proposal for the development of a Vancouver Island regional transportation strategy, further uses to which we could put the Esquimalt and Nanaimo Railway. Once again, it obviously has tourist potential. Hopefully the minister will take a lead, as the minister fundamentally responsible for transportation in this province, in recognizing that we could use the Esquimalt and Nanaimo Railway for more than simply tourism, although tourism is important. We can use it for more than ski trains, although ski trains are important. We can use it, in fact, as the principal new instrument of public policy in the twenty-first century. Clearly — and the member for Esquimalt–Port Renfrew (Mr. Mitchell) has pointed this out on many occasions — we should be using the Esquimalt and Nanaimo Railway now for rapid transit from the Sooke-Langford-Colwood-Metchosin district. The minister could and should be taking a role in the responsibility here. It's a joint responsibility. We have to plan for roads and rapid transit. We have to do the planning in the same room and under the same roof, because it serves the same people and purposes.

I ask the minister to tell us what his plans are for the enhanced use of the Esquimalt and Nanaimo Railway, to complement the other forms of public transport for which he is responsible in this province. I ask whether or not he is considering such a strategy for the increased use of the Esquimalt and Nanaimo Railway, both for Island and regional transportation, rapid and long distance, to serve the interests of all the people of Vancouver Island.

In regard to a particular problem that has been drawn to my attention, I wonder if the minister is prepared to look at the possibility of upgrading the Patricia Bay Highway in at least two or three spots so that it may be used for safe pullover for public transport. I've had complaints in writing as recently as a week ago from residents of the northern part of my riding and Saanich riding who observe that one of the reasons the UTA doesn't work very well on the Pat Bay Highway is because there aren't very many places for it to safely pull over. I ask the minister to advise whether or not it would be possible to build along the Pat Bay Highway pullover lanes and stopping places for UTA service on the Saanich Peninsula running back and forth between Victoria and Sidney. For the purposes of safety and greater convenience those lanes and pull-over places, I think, are necessary and required.

I have a couple of other observations and a few more questions for the minister. The next one concerns the Motor Carrier Commission. I have some problems dealing with this agency, and 1, like many other MLAs, have had to do so for going on six years now. The traditional secretiveness of the Motor Carrier Commission disturbs me a great deal. On several occasions I've received correspondence from them in which they have point blank refused to provide me, as a member of this assembly, with reasons for their decisions. This is, I think, totally unacceptable.

I do note that in the last several months the Motor Carrier Commission has become somewhat more responsive to legitimate requests for information about why it took a particular decision. That doesn't, however, explain the fundamental problem that some of us have — and that I most personally have — with such a commission. It may seem paradoxical to the minister, but I personally believe that in the field of transport of this sort it's just possible that the best remedy is the free market.

I'm not persuaded that the Motor Carrier Commission knows what it's doing when it issues taxi licences in Victoria. It seems to me that the free market might better know what it's doing by way of determining the number of customers and sort of fees and schedules those customers are prepared to pay for the level of services they wish to employ. I'm not sure at all — and I don't speak for my party; I don't propose to speak on behalf of the New Democratic Party in any way — that the Motor Carrier Commission or any other level of government in this particular instance is simply competent to regulate this field. There is a basic regulation required, and

[ Page 5817 ]

that, of course, is again in the field of public safety. We have to be guaranteed that these buses, taxis and other forms of public transit are safe. But after that's done I'm not so sure that we should be in the business of protecting the markets for the entrepreneurs. It seems to me that it might be a better policy to have them fight for themselves. It might be a better policy to have them earn their own share of the market and not have it automatically protected.

As far as I can tell, the business of the Motor Carrier Commission is protectionism, pure and simple. I am sick and tired of having authentic free enterprisers come to my office to ask why they can't get a licence to compete in a freemarket part of the economy called transportation in Victoria. I'm not persuaded that the rationale originally found in the thirties and forties for the establishment of the Motor Carrier Commission is anything better than obsolete today. I personally believe that in this particular instance it's no longer possible to find an intelligent or competent explanation for this continuing intervention in the marketplace, where there are no issues of monopoly except those monopolies created by the Motor Carrier Commission itself. I don't think that's a very intelligent reply for us.

Again I observe that I'm not speaking on behalf of my party. To the best of my knowledge we have no policy on this issue. Neither does the governing party, as far as I can tell. We've both taken for granted that a commission set up decades ago should be allowed to continue into the future without any fundamental re-examination of its purpose. I don't share that. I don't like people who come to me.... I'll read into the record an instance; in this case Better-Rate Cartage Ltd, of 323 Henry Street, Victoria, is telling me that they're perfectly capable of doing a business, providing good service, and providing it at rate slightly lower than their competitors, and they're being told that the field is full, they can't compete, and there's no room for them in the marketplace. I don't buy it. I don't buy that any agency of government is, first of all, knowledgeable enough to make such an assessment and secondly, even if they were Fm not persuaded it is their business to do so in the first place. Why, for instance, is it not possible to consider a policy — experimentally in one community in British Columbia that wishes to adopt it — of abandoning any form, which I suspect to be archaic and obsolete, of protecting someone's investment by issuing a licence and denying other people the opportunity to compete and open it up widespread for a year or two or three on a trial basis? I'm not quite sure how we'd measure that. I realize it's a difficult issue. But nonetheless give it a try somewhere. Attempt somewhere or other to determine whether or not it is just possible that the Motor Carrier Commission as originally conceived has now become an obsolete instrument of public policy and no longer serves a good purpose. The basic purpose of public safety must still be upheld. I simply resent, and increasingly strongly resent, being told that we have an agency governing a particular field of public interest — in this case public transport — where there are no natural monopolies, like a telephone company, that can be justified — obviously, there can only be one telephone company; it's absurd to have 20 competing — and where in the absence of a natural monopoly, all that we examine is what happens when you have a tradition-bound public service bureaucracy protecting the capital investments of people who moved into the field some time ago or protecting the capital investments of the lucky few who manage to move in nowadays. I mean no disrespect to the individuals who work for the Motor Carrier Commission. Within the terms of reference they are given, I'm sure they are all trying to do the best possible job. In many cases — at least in private conversations — a number of them have demonstrated to me their earnestness and their responsibility. But it has also been demonstrated to me — I'll read two cases into the record very quickly — that the current terms of reference are simply not satisfactory.

Better-Rate Cartage Ltd. of 323 Henry Street in Victoria — Sam Boyd, president; Greg Kennedy, director — made a proposal to take over a contract with Victoria Press Ltd. They did so in late November and early December of 1980. This contract had been held previously by a company called D-Line Carriers, which was a licensed agency under the Motor Carrier Commission. For its own reasons Victoria Press chose not to renew that particular contract. I don't propose to go into those reasons; that's their business and not ours. The value of this contract was $180,000, and it was due to expire on January 15, 1981. Better-Rate Cartage Ltd. proposed to take over the contract. It underbid D-Line by approximately $15,000. The basic reason they were able to do so is because they proposed to charge $15 an hour versus $17 a hour that D-Line proposed to charge.

Better-Rate Cartage has three large trucks and was in the process of getting two more. They applied to the Motor Carrier Commission for an interim permit and simultaneously for a permanent permit. They were given a verbal assurance by Victoria Press that they would be granted the contract. I am told Victoria Press was satisfied that they were competent to manage the contract. Of course. with many distributors concerned to receive the Times-Colonist on time, Victoria Press wanted to assure itself — obviously it did — that these guys were able to do the job. However, as it turned out, Victoria Press was advised that the Motor Carrier Commission might look askance at this proposal to issue a new licence in the greater Victoria trading area. Sure enough, they did. Lo and behold, they were denied a temporary permit and a permanent one as well. Better-Rate Cartage consulted a lawyer, who got no further than I did. They consulted me, at my home in act, on two occasions. They have been financially damaged as the result of the refusal by the Motor Carrier Commission to do this.

[Mr. Davidson in the chair.]

What does the Motor Carrier Commission say? At least this time they gave answers, but I'm not at all satisfied with them. I'm not satisfied on two counts. As far as I can tell, Better-Rate Cartage is run by honest businessmen who worked to earn the equity in their company and to buy the trucks and to do a better job slightly cheaper than their competition. As far as I'm concerned, that's good enough for me. If they meet the tests of the marketplace and public safety, as far as I'm personally concerned they are eligible and qualified and should be allowed to compete. I personally happen to believe in that kind of free enterprise. I think it's authentic, important and necessary.

What's happened in this case? Once again, protectionism and an obsolete attitude bound by tradition and no great purpose told them as follows. This was a letter from Mr. Tyson, deputy superintendent of motor carriers in regard to the Motor Carrier Commission. In a moment I'll get to the relationship between the two. This is what the deputy superintendent of motor carriers had to say in regard to the matter,

[ Page 5818 ]

because they were involved too. It's to the attention of their lawyers, Milton and Munch, Douglas Street, Victoria.

"In response to your letter of January 26, 1981, you are advised that the information relayed to your client was with respect to the request for a temporary permit and not a decision with respect to an application for regular annual licence authority. It appears from the information sheet made out upon relay from our Victoria branch office that your client has applied for both regular licence authority and also temporary authority or permit until such time as the commission makes its decision with respect to the regular licence application.

"For your general information, you are advised that applications for motor carrier authority are not issued automatically upon receipt of an application. Applications are issued only when it is seen to be in the public interest for such licence authority to be granted. Applications for regular licence authority are published and assigned a number. Any carriers who consider their activities to be affected adversely have the right of making objection. The Motor Carrier Commission considers the objections as well as the supporting material submitted by the applicant as well as many other factors in order to maintain a sound, economically viable transportation system in the province.

"As to permits, you are advised that the commission's policy is that temporary permits are issued only in the case of an emergency. This means that there is a need of the public for the transportation service and that there are no licensed carriers with the authority available to provide that service. In the case of your client, it appears that in addition to making the regular licence application, a request for temporary permit to start was made.

"A test of need was made, and it was found that there were licensed carriers available. Accordingly the request for the permit was refused. Such a decision on a permit request is, of course, without prejudice to any decision the commission may make with respect to the regular licence application. I trust that the above information will be of assistance, etc."

I mean no disrespect to the individual public servant who signed the letter, either. He is simply carrying out public policy. I would ask the minister, though, if he could tell us what he deems to have been the public interest in this case. Is it in the public interest to protect the investment of an established carrier, to allow a new entrepreneur to get into the business, and to provide, at least according to Victoria Press, apparently a better service than the other principal competitor? Thereby they would earn their way in the marketplace and earn a living to pay for their own enterprise, to pay taxes and to be good corporate citizens.

Where does the public interest really lie? Does it lie in giving the Motor Carrier Commission the authority to shut these guys out of business and to retain it for the people who are already there? I want to say again that to me, personally, that kind of protectionism is obsolete. I don't understand the basis of such a policy.

For instance, in regard to taxis in Victoria or any other place, why should we not consider a system whereby taxi drivers are permitted and encouraged to form cooperatives for the purpose of advertising and dispatching, but no one person shall be permitted to own more than one licence at a time? If we're concerned about monopolies, that's fair enough. I don't want just one taxi company in the city owned either by the Crown or by an individual. I don't want that at all. People should have freedom of choice to go to their own taxi. It's nothing of such grave concern to public policy that we should be in the business of setting up monopolies or of regulating them either.

Why don't we break the monopoly altogether, restrict it to one licence per individual, allow them to form co-ops for dispatch and advertising purposes and be done with it? Is that not also somewhat more in the public interest than it is allegedly in the public interest to protect the traditional investments of people who have put capital into the field but who should be required to compete with younger and perhaps more vigorous entrepreneurs who come along from time to time?

I have one other question. It's related to the same topic. From time to time, people are successful in making appeals to cabinet of Motor Carrier Commission decisions. We've discovered them, and it's been the subject of a court case. I'm referring to the case of Gray Line of Victoria Ltd. vs. Chabot, McClelland et al, registry numbers A801976 and A801977. I'm referring as well to the judgment of the chief justice of the Supreme Court of British Columbia at the Vancouver registry.

In this particular instance, the cabinet decided to overrule the Motor Carrier Commission. I'd like to ask why. The chief justice of the Supreme Court of British Columbia in his decision, which I'm sure the minister has seen, decided that there was something wrong with the way the province looked at its particular decision. In fact, he ordered reconsideration under the Judicial Review Procedure Act. I'd like to ask the minister as well what the consequence of that review has been, because I haven't been able to find out.

An appeal was made on June 17, 1980, was heard by three members of the executive council and was made by Conmac in the presence of counsel for all parties. This is what the Hon. J.R. Chabot, Hon. G.M. McCarthy and Hon. J.H. Heinrich had to say — these are their names as they appear in the Supreme Court document from which I'm reading, Mr. Chairman:

"This appeal coming on for hearing before the undersigned members of the executive council on behalf of the Lieutenant-Governor-in-Council in the presence of officers of the appellant applicant, Conmac Stage Limited... upon reading and their material submitted, and hearing what was alleged by the parties present, it is hereby ordered that the appeal be allowed, and the Motor Carrier Commission forthwith issue to the appellant, Conmac Stage Limited, limited passenger vehicle licence authority as set out in application published as 106279."

There was another appeal as well in regard to Conmac dated September 17, 1979, and the same basic decision was made by the cabinet. Conmac's competitors appealed that decision to the supreme court, and the supreme court said at page 18 of its decision: "I must set aside the two decisions and the two orders-in-council which have been made in these two cases." He then ordered that it go back to judicial review.

What I'd like to ask the minister is, in this instance, on what basis and with which criteria the cabinet decided that the public interest as interpreted by the Motor Carrier Commission in the case of Conmac was not an adequate inter-

[ Page 5819 ]

pretation, and that the cabinet itself was more competently able to assess it than was its own Motor Carrier Commission.

Once again, we have two instances of the public interest being, I think, rather artificially defined — in the first place by the Motor Carrier Commission and in the second place by the cabinet. In both cases it was turned over by the Supreme Court of British Columbia. I would like to know not simply what criteria the Motor Carrier Commission uses to determine the public interest when deciding whether or not to award a licence, but what criteria the cabinet uses when it overrules the Motor Carrier Commission.

In this particular instance the cabinet's procedures — note, Mr. Chairman, "procedures" — were found to be faulty by the chief justice of the Supreme Court of British Columbia. He refers in the same decision, at page 18, to his own uncertainty as to how these decisions were made, and he orders that they be reconsidered. I will quote again from the chief justice:

"As I am in the same state of uncertainty as any other knowledgeable person who could not know who really made these decisions, I do not think it appropriate to apply the curative provisions of section 9 of the Judicial Review Procedure Act. These two matters are accordingly remitted to the Lieutenant-Governor-in-Council for appropriate reconsideration pursuant to section 5 of the Judicial Review Procedure Act."

Well, Mr. Chairman, if the supreme court chief justice finds it difficult to understand on what basis cabinet decided to overrule the Motor Carrier Commission, and if members of this Legislative Assembly — and I'm not the only one — find it difficult to understand how the Motor Carrier Commission makes these decisions, the basic question may be whether there are any tests, standards or criteria that make any intelligent sense at all. If so, what are they? I've never seen them, and I've never been able to find out what they might be. If they're not really there, except by virtue of selfserving rationales made for what are fundamentally arbitrary and protectionist policies, then I don't think that's adequate any more. There may have been a case 40 years ago. If there is, we'll honour it as a piece of history gone by. I'm not so sure the same case can be made today. I am sure that Sam Boyd and Greg Kennedy of Better-Rate Cartage are entitled to compete if they can perform a service that is satisfactory to their clients and that meets the tests of public safety, The other tests that seem to be applied appear to me, Mr. Chairman, to be unfair tests and shouldn't be applied to anyone at all. I'd appreciate the minister's comments.

HON. MR, FRASER: I appreciate the remarks from the first member for Victoria.

I just wanted to conclude a remark to the member for Dewdney. He is probably doing his duty and looking for MLAs. Regarding a proposed bridge for the Albion crossing, we are protecting the right-of-way, and that's as far as it's gone. I believe it's in the community plan for that area on both sides of the Fraser River.

Dealing now with the first member for Victoria's observations, first of all, I think I have some good news on bicycles. I wasn't even aware of this. First of all, I share his concern to a degree about bikeways and so on, and I recall telling him last year that we're paving our shoulders to six feet now. I think we still have a little bit of a down side on that. In a lot of cases it's not separated, so they're on the same level. On all our two-lane roads they're now doing the shoulders to 6 feet, and we get along if guard-rails can be applied and so on. I think we're moving in the right direction. That side was the rural area of the province.

This is news to me. and maybe it shouldn't have been. I'm told by my deputy that under revenue-sharing.... It was changed two years ago and includes bicycle paths. I'm dealing now with the urban areas of the province — villages, towns and cities. They can now get revenue-sharing for bikeways. I wasn't aware of that, but that boils down, if it's approved and so on, to a fifty-fifty share for the development, and maybe that helps.

MR. BARBER: Have you had any applications for sharing?

HON. MR. FRASER: I'm not sure, but I think it's a good point to put out as MLAs. In this case here I think they've done a good job, because I see the signs all over. If there is more money required, it is eligible revenue- sharing, and I would gamble that most of the municipalities don't know that.

Mr. Chairman, as far as transit is concerned, that comes under my colleague the Minister of Municipal Affairs (Hon. Mr. Vander Zalm), but I don't want to duck it completely. Transportation, of course, is my responsibility, and we have the Vancouver Island study getting going now on that.

Regarding the E&N Railway. I think that will get fitted in on that transportation study; that's the observation I want to make there.

MR. BARBER: What about the CNR right-of-way, Alec?

HON. MR. FRASER: I've got a note of that, Mr. Chairman. It's my information that the Ministry of Lands, Parks and Housing is now negotiating on the CNR right-of-way with CN. I don't know where it's at, but that's my information: Lands, Parks and Housing is trying to negotiate something.

On the Pat Bay Highway, we have worked with the Capital Regional District on that. As a matter of fact, the mayor of Saanich came to see me on this subject a couple of months ago — bus stops for transit on the Pat Bay Highway. Yes, there are some problems, but we've eliminated quite a few, it's my understanding. All the bus stops requested have been installed, except the following. Work has started on Royal Oak interchange and will be completed in two weeks. This is at full cost to Highways. At Elk Lake no bus stop will be installed without a signal to safely get pedestrians across the highway. We've got a problem at Elk Lake, in other words. The ministry and Saanich are jointly investigating a signal, cost-shared between the ministry and the municipality. In other words, we can have a pull-out in the Elk Lake area, but we're worried about pedestrians crossing after they get out. They're looking at signalization there. At Tanner Road on the Pat Bay Highway a signal is also required. That is also being investigated with Saanich in both cases, with the community of Saanich. I think we've eliminated some, and we're on the road to getting most of them solved, hopefully, so transit can be better used on the Pat Bay Highway.

MR. BARBER: How about in Sidney? I gather there has been some problem there.

HON. MR. FRASER: I'm not sure about Sidney. I think they did bring that up, and then it got down into those areas that were the worst.

[ Page 5820 ]

MR. BARBER: Would you take a look at the Sidney one?

HON. MR. FRASER: Sure.

Now on my favourite subject, the Motor Carrier Commission, I want to say that it is a semi-judicial body, but it comes under this ministry for the financial part and so on. I speak with a little knowledge, Mr. Chairman and members, because I happen to have the first public freight licence, Vancouver to Prince George, granted by the then Public Utilities Commission. We had a public freight licence that served everything north of Cache Creek, and we built up a large business. So I've been on that side of it.

I guess it is basically made up of three commissioners appointed by the government, and then we have the branch side which does the day-to-day operation. There are three commissioners with a chairman. On the branch side they have a superintendent — you read a letter from the deputy superintendent — and they have branches throughout the province. There's a total staff of about 50. The problem is we need more staff because of the terrific number of applications coming in for permits and everything else from all over the province. I've been authorized — I think it is — to increase by five in the 1981-82 year. So that is the basic structure. They have branches in Victoria, Kamloops and Prince George. They carry out the Motor Carrier Act.

Basically, as I understand the history of it — and certainly things change — it was created to guarantee that the public interest would be protected. In other words, they would have a service. That was the intent behind the legislation that created all this licensing. Prior to that we had chaos, no reliable transportation system, dog eat dog. Consequently most people went bankrupt. So they are granted the privilege of a licence through this legislation and they assume a lot of responsibilities. It depends on the area and the carrier, but the responsibility they assume is that they must guarantee the people in the area for which they are licensed a constant, scheduled service and so on, whether it be taxi, bus or freight service.

It is definitely in the public interest. In our province today there are a lot of publicly licensed freight carriers; Vancouver to Prince George is an example. If they were on their own, dog-eat-dog, I'd ask the committee who'd haul the freight to Spuzzum and Boston Bar, which are small communities en route. But they must take the freight for Spuzzum and Boston Bar, with the licence privilege they've got. Maybe we shouldn't be worried about these things. But as I understand it, that's the basic tenet of that legislation.

As far as the provincial government is concerned, they have a responsibility to see that service in these transportation areas is carried out. Of course licensing is the control.

MR. BARBER: What about in Vancouver or Victoria, where competition could do the job?

HON. MR. FRASER: Of course, we're getting that now. There's competition all over, and more people wanting to get licences to get into the act. They are granting more licences, but it appears to me not as fast as the economy is expanding, whether it be for taxis or buses or freight. When you apply for a licence, you can go to the superintendent of the motor carrier branch and he can grant the licence without any reference to anybody if he thinks it's in the public interest. If he doesn't, he sends it on to the commission and they can have a hearing. They can reject or approve it.

That leads me into the process where the Motor Carrier Commission rejects; then the citizen applying has appeal procedures to the executive council. You referred to a case where it was rejected from the Motor Carrier Commission and came to the cabinet. They overruled the observations, and I guess they had their reasons. I might say in commenting that I sat on a lot of the cabinet appeals, but not once since I've had this responsibility. But I sat on them for two or three years quite frequently until the administration of the Motor Carrier Commission fell under my responsibility. I haven't sat since.

But you say it's secret; well, I guess it is. I believe the act spells out that it can be, if I recall rightly. I'm referring to the Motor Carrier Commission.

Now to finally wrap up on the Motor Carrier Commission, I know that an appeal went to the supreme court. I don't know where that's at, and I don't really think that we have the information, but I'll get it to you if we have.

MR. BARBER: The supreme court ordered in favour of Conmac, and ordered you to take a second look.

HON. MR. FRASER: Well, I can't comment, because I'm not sure. But that's the whole process. I want to conclude — on the Motor Carrier Commission, Mr. Chairman, and to the first member for Victoria — that we're looking at this whole process now. I don't know whether you'll be able to ask a year from now whether I am still looking. I hope not. I think we have to take a harder look at the Motor Carrier Commission and just where we've been and where we're going. Because it started in 1932 and 1933; there have been very few amendments to the act. What I'm saying is that at least, hopefully, we'll have some amendments to it for the 1982 session.

MR. LOCKSTEAD: It would appear that we're prepared to vote on the minister's office, and before I move the traditional amendment — it has become traditional this year — I have one word for the minister. It has been brought to the attention of some of our members, particularly myself, that people out in the regions occasionally, when they go to the regional office on some matter involving budgetary items, are told nothing can be done for them at this time on that piece of highway or bridge — or whatever the problem may be — because the NDP is holding up the budgetary estimates of the minister and the government. I'm sure this doesn't come from the minister's office. At least I hope not. It's the kind of complaint we receive from time to time, and the minister knows very well that we pass interim supply here, and the debate of these estimates has no bearing whatsoever on the funding of these various projects. I thought I'd draw that to the minister's attention.

It has been part of our party and caucus program, when the ministry has budgeted significantly over last year on items like travel, propaganda — properly called "information" — and office expenses, that we reduce the budget on that particular vote by the amount of money in excess of last year. These funds could perhaps be better utilized in housing, health care, etc., particularly some of the information items, where the budgetary items have gone up by vast amounts.

On this particular vote 189 of the minister's office, the minister has increased his office expenses by some 70 percent or $5,800. I therefore move that vote 189 be reduced by the amount of $5,800.

[ Page 5821 ]

Amendment negatived on the following division:

YEAS — 21

NAYS — 27

An hon. member requested that leave be asked to record the division in the Journals of the House.

MR. NICOLSON: Mr. Chairman, I heard the name of the hon. member for North Peace River (Mr. Brummet) read out on the division list. I see that he's absent, because I see that this desk over here bears the name of the hon. member for North Peace River. How do we resolve such a thing? When a division takes place, hon. members are to take their seats. The seat of the hon. member for North Peace River is back here now.

MR. CHAIRMAN: Thank you for the observation, hon. member.

Vote 189 approved.

On vote 190: general administration — highways, $7,679,067.

MR. LOCKSTEAD: This particular vote, in terms of advertising, publications and propaganda, is being increased by 520 percent. I therefore move that vote 190 be reduced by the amount of $280,000.

Amendment negatived on the following division:

YEAS — 21

NAYS — 27

An hon. member requested that leave be asked to record the division in the Journals of the House.

Vote 190 approved.

On vote 191: general administration — transportation, $1,064,894.

MR, LOCKSTEAD: For the same reason as above excess spending on offices, deep-pile rugs and things like that — I move that vote 191 be reduced by the amount of $13,050.

Amendment negatived on the following division:

YEAS — 21

NAYS — 27

An hon. member requested that leave be asked to record the division in the Journals of the House.

Vote 191 approved.

Vote 192: highway maintenance, $ 195,919,712 — approved.

Vote 193: highway construction — capital, $288,993,088 — approved.

Vote 194: Hydro development — highways, $10 — approved.

Vote 195: engineering branch, $1,070,533 — approved.

Vote 196: motor-vehicle branch, $23,582,731 approved.

Vote 197: motorcarrier branch, $1,360,825 — approved.

Vote 198: Motor Carrier Commission, $354,851 — approved.

Vote 199: transportation policy analysis branch, $1,439,776 — approved.

[ Page 5822 ]

Vote 200: air services branch, $3,798,669 — approved.

On vote 201: air transport assistance program, $4,000,000.

MR. LOCKSTEAD: I would move reduction of this vote for the reasons listed above. This happens to be for propaganda purposes in excess of what they spent last year for the same purpose. There's not much on this vote. I move that vote 201 be reduced by the amount of $2,700.

Amendment negatived on the following division:

YEAS — 21

NAYS — 27

An hon. member requested that leave be asked to record the division in the Journals of the House.

Vote 201 approved.

Vote 202: British Columbia Ferries, $63,713,476 — approved.

Vote 203: British Columbia Railway, $13,200,000 — approved.

On vote 204: building occupancy charges, $19,717,071.

MR. LOCKSTEAD: Mr. Chairman, this vote is for building occupancy charges. Would you believe that the increase this year over last year is an astounding $4,361,071? Is the minister moving that whole ministry into the Empress Hotel? I can't understand it. I therefore move that vote 204 be reduced by the amount of $4,361,071.

Amendment negatived on the following division:

YEAS — 20

NAYS — 27

An hon. member requested that leave be asked to record the division in the Journals of the House.

Vote 204 approved.

On vote 205: computer and consulting charges, $4,892,550.

MR. LOCKSTEAD: This is the last vote in the minister's estimates, so before I move the traditional amendment I would like to first of all say that, while many topics weren't covered under debate of the estimates, I think all members on this side of the House really appreciated the time and the lengthy and detailed answers the minister provided to all of us who asked questions. We're pleased by the minister's personal knowledge of his portfolio, and the cooperation of the staff of that ministry was much appreciated.

The total amount of the various vote amendments we've moved here this afternoon comes to $5,474,271, and here we are with a visual display in my scrapbook of the overspending of this government. Look at the overspending — the whole government. Moneys that should be going for health care and other people programs in this province are being wasted, because the government is padding its budget again to get ready for the next election. I therefore move that vote 205 be reduced by the amount of $811,650.

MR. LAUK: I'd like to say on behalf of all members of the chamber how much we appreciated the time and research that went into the opposition critic's handling of these estimates. We express our appreciation for his contribution to these debates.

Amendment negatived on the following division:

YEAS — 20

NAYS — 27

[ Page 5823 ]

An hon. member requested that leave be asked to record the division in the Journals of the House.

Vote 205 approved.

ESTIMATES: MINISTRY OF INDUSTRY
AND SMALL BUSINESS DEVELOPMENT

HON. MR. GARDOM: Now, Mr. Chairman, for the moment all British Columbia has been waiting for — but the Leader of the Opposition has not, because all he's still trying to do is find 1,993 dinner no-shows. It gives me a great deal of pleasure to read: "Vote 126, resolved that a sum not exceeding $204,312 be granted to Her Majesty to defray the expenses of the Ministry of Industry and Small Business Development, the hon. minister's office."

MR. NICOLSON: On a point of order, when the House Leader seeks the floor during committee to introduce a vote, he is not to embark upon debate. I would request that the Chair so direct. Fair is fair, Mr. Chairman.

MR. CHAIRMAN: The hon. member has made a good point.

HON. MR. PHILLIPS: I have certainly looked forward to this opportunity, afforded me during the course of my estimates, to discuss the activities of my ministry. First of all, I would like to say a great thank you to all the members of my staff, who have worked so hard during this past year, both here and in the Vancouver branch. As you know, Mr. Chairman, we are a reasonably small department, very few in actual numbers of employees. But the few of us in the department are certainly a very potent force in the economy of British Columbia, which, of course, also helps the economy of Canada.

I have had — and I'm proud to say so — a great deal of loyalty and devotion from a very efficient and devoted staff. Their devotion in the department and their attention to details, their enthusiasm over the job — which, indeed, they are doing for all British Columbians — has certainly been, in no small measure, a great influence on the success we've had in British Columbia in leading the economy of British Columbia to that height which is unsurpassed anywhere in Canada, indeed in any state of the Union.

I want to tell you, Mr. Chairman, that I certainly look forward to working with the staff in my department in the years ahead. I hope they will find it as enjoyable and as exciting as it has been in the past.

[Mr. Strachan in the chair.]

I want to say a special thanks to my deputy, Sandy Peel, who I hope will join me shortly. He's not coming? He is a very devoted deputy minister and a very efficient one. I also give a word of thanks to Jack McKeown, who runs our department in Vancouver and who has accompanied me through the past year though many thousands of miles of travel and helped me prepare for some very important meetings in various countries in the world and assisted me with debriefings and also with preparations for additional meetings.

At this point, I want to say that in every country where we have travelled we have certainly received tremendous assistance from the embassies, consuls and high commissioners who work for the Foreign Affairs department of our federal government. As a matter of fact, I think they have gone beyond the call of duty in assisting all British Columbia delegations, no matter where they travel in the world, with setting up appointments, ensuring that their itinerary is being followed and, indeed, that the best use of our time is made so that we are able to get on with the business and the responsibility to which we have been delegated.

I have another special word of thanks to Bob Food who has diligently administered our small business programs and our tourist industry development subsidiary loan agreement program. There again, he has done an excellent job. The result has been that our loan department has been very successful in putting money where it should be put so that jobs are created, and small entrepreneurs in this province are indeed helped.

Of course, I always have to say a very special word of thanks to my secretary, who is always at my beck and call, day and night, particularly during the last year when we were in some very tedious and very important negotiations on northeast coal. I also want to say a word of thanks to my ministerial assistant, who kept me away from a number of political pitfalls and has been a very devoted servant. I realize that sometimes that's very difficult, but he has done an excellent job during the past year. I also thank my staff in the constituency office.

Mr. Chairman, I am indeed blessed with a great team which during the past year has given me constant encouragement when things didn't look too bright sometimes. They've been a constant inspiration to me. I think I'm a very fortunate cabinet minister to have such a loyal staff.

The directors and the chairman of the British Columbia Development Corporation are also doing an outstanding job for all British Columbians in administering and running the Development Corporation.

I also have a word of thanks to the staff, management and directors of the British Columbia Railway, who in the last five years have taken that resource railway from a loss of $22 million to a very profitable position. I want to tell you, that didn't just happen. It happened because of hard work, tough decisions and good management. I want to say thank you to the management, the staff and the directors of the British Columbia Railway for doing an outstanding job, not for me or the government, but for all the citizens of British Columbia. If there is one mode of transportation or one area that affects the economy of this province more than any other — Mr. Chairman, being from the north you will understand what I'm saying — it is indeed the British Columbia Railway.

As you will notice, this year the budget of the ministry has increased substantially. The increase is mainly due to increased moneys in the estimates for northeast coal and for the British Columbia Railway debt-servicing. During the past year our ministry went through a zero-based budgeting exercise with Finance, and some belt-tightening on behalf of the taxpayers of British Columbia has indeed occurred.

Now having made those few remarks regarding the ministry and the staff — as I say, I consider myself a very fortunate cabinet minister to have such a loyal and devoted staff — I would like just a few words on the economy and where we are going in British Columbia.

If you were to summarize economic development and how it relates to the people of this province, the greatest benefit of the expanding and growing economy we have in

[ Page 5824 ]

this province has been the very, very strong performance in employment creation. Along with the strong performance in employment creation we have also had an accompanying drop in unemployment. At a time when other provinces and jurisdictions in North America — and indeed in the world — are finding that their economies are either going backward or staying on an even keel, British Columbia has progressed. That progression, Mr. Chairman, is a direct result of the policies of this government, and I sometimes think that the opposition would have us believe that it is automatic.

Our record in employment creation in 1980 was outstanding. With 11.1 percent of Canada's population, the province of British Columbia led the nation in job creation. That is an enviable record, and one which the socialist opposition does not like us to repeat too often. But it's a record, and I want to tell you, Mr. Chairman, it's a record we're proud of. Last year we created in the province of British Columbia 21.7 percent of all new jobs. Since 1975 we have created over 195,000 new jobs in the province of British Columbia. Those jobs have been created not by government going out and spending massive amounts of money to create little flames in the economy here and there; those jobs have been created by the investment of the private sector. Those are long-lasting jobs. The workforce in the province of British Columbia can look forward to the future with a great deal of security. Those in the workforce, those union members, are not worried about losing their jobs; they're not worried about the economy going backward, as they are in other provinces and jurisdictions in Canada. That is because we have done a good job of managing the economy of British Columbia.

Last year our gross provincial product advanced 2.5 percent to 3.5 percent while — listen to this — the rest of Canada declined. Now, Mr. Chairman, I have to ask you: do they not have natural resources in other provinces in Canada? Is there no demand for the products from other parts of Canada? I say to you, Mr. Chairman, that indeed there was and there still is. Then why is the province of British Columbia able to advance, while the nation as a whole, as I understand it, is going backward?

MR. BRUMMET: Policies.

HON. MR. PHILLIPS: You're right on, Mr. Member for North Peace River. It's because of the policies of this government. There are those in the province who would have you believe otherwise. I think they believe that with Social Credit automatically comes a strong economy. But, Mr. Chairman, there is one outstanding feature about the increase in our economy last year: we were able to increase our gross provincial product at a time in history when our lumber industry was not experiencing the best of times. Even with the decline in the demand for our lumber products, because of the diversification of our industry, because of the diversification of our markets, the province of British Columbia was able to increase its gross provincial product in very difficult times.

That didn't happen by chance. It happened because when we became government, we set out on a course of economic development to diversify our markets so that we would not be wholly dependent upon the United States. That policy of diversifying our markets, particularly for our lumber products, indeed paid dividends last year. When housing starts in the States were down, our lumber industry has been able to carry on. It was not the best of times, but not the worst of times, because of the encouragement of the government to diversify the market.

We are making great headway, positive strides in diversifying our markets in the Pacific Rim, particularly into Japan. We are making advances in other countries in the Pacific Rim. Those advances are possible because the government of British Columbia has led economic missions into those areas.

I've been accused of travelling around the world, and coming home empty-handed. I want to tell you that because the province of British Columbia recognized the potential in the Pacific Rim and took the initiative, travelled and sold....

MR. HALL: Over and over and over again.

HON. MR. PHILLIPS: Yes, over and over again, my friend. I want to tell you, Mr. Member for Surrey, that you can't sell sitting on your behind in a soft, cushy chair. You've got to get out and sell. I'll tell you, when we go overseas, we go overseas to work and sell, and the results, my friend, are there. The sales are taking place.

MR. HALL: Show us the price.

HON. MR. PHILLIPS: And I want to tell you further that you haven't seen anything yet. Because in that market, you don't go in with your order book in your hand and get a sale the first time. You have to go back. That's where we've been successful. We have been determined.

MR. HALL: To break all records.

HON. MR. PHILLIPS: That's why we're successful. Yes, we're breaking all records in sales, my friend.

MR. HALL: In travel.

HON. MR. PHILLIPS: And we are dragging the federal government, kicking and screaming, into the decade of the eighties and into the Pacific Rim. We're pulling them kicking and screaming. After the initiatives of this government, the federal government has finally recognized that indeed that's where the action is going to be in the decades of the eighties and nineties. Once again, British Columbia leads the way. Yes, British Columbia leads the way against carping criticism from the socialist opposition, who said we didn't know what we were doing. But the results are there for everyone to see. That's why I'm so proud to stand up this afternoon and tell all the people of British Columbia.

I'm not bragging to say we've done a great job. We must do a better job, and indeed we will. But our record to date is enviable, and it makes the socialist hordes opposite very jealous. They know deep down in their hearts that we've done a fantastic job. They know. We've diversified our economy away from just two or three resource-based industries into a booming, growing manufacturing base. Yet the socialist hordes opposite would still like the people of British Columbia to think we're still hewers of wood and drawers of water. Not so.

British Columbia has a good, strong and growing manufacturing base. We have a growing high-technology industry that indeed, in many instances, is being successful in the world market, competing against the great giants of the European communities, competing against the great giants in the United States and, indeed, competing against the high-

[ Page 5825 ]

technology industries in Japan. That's what we have in British Columbia.

With the initiatives being taken by the Minister of Science and Technology, that high-technology industry base that we have is continuing to grow. It will grow because this government made a policy that we wanted to move into the high technology field. That's where the future is. That's why we created industrial parks. They were strictly for high-technology industry.

Our marine park that we're building out in Saanich is for specialty marine industry. Sure, we made a gamble, and we put in a building and the facilities, What happened, Mr. Chairman? It's full of ocean industries. In the very near future I look forward to going out to the opening ceremonies.

What I have been talking about is very significant: diversification of investment so we don't have all the investment from one country; diversification of our sales so that our sales are not all dependent on one country; and diversifying our economy into a manufacturing base — not only manufacturing but, indeed, high-technology manufacturing. Those policies, plus the forestry, mining, coal policies and all of the great policies that we've brought in in this government....

MR. LEA: Name one. Just name one.

HON. MR. PHILLIPS: Mr. Member for Prince Rupert, you come in here with a big smirk on your face and all you do over there is criticize. You don't want the economy of this province to work. Your leader said so down in Halifax years ago.

MR. LEA: Just name one, Don.

HON. MR. PHILLIPS: Well, I was naming the policies, but you're deaf. You don't want to hear and you don't want to see. You'd rather go around harping and carping criticism and making stupid statements, which I will enumerate in detail, my friend. Yes, I'll name one policy. I told you already. Our forestry policy and our policy of diversifying our markets and investment from one country to other countries.

Interjections.

MR. CHAIRMAN: Order, please. I'll ask all members not to interrupt the minister. If the minister could address the Chair, then we can proceed with orderly debate.

HON. MR. PHILLIPS: Yes, Mr. Chairman. The policies are there and, indeed, the results are there.

In 1987 our gross provincial product is forecast to rise again. It is anticipated that because of the development and investment in northeast coal, our gross provincial product will increase approximately 1 percent. We anticipate more sales of coal, not only to Japan but to the European community as well. Because of the initiatives we have taken, British Columbia will increase not only sales of coal but sales of all our products to the United States, Japan and the European community. There will be great growth in markets such as Australia, South Korea and all of the Pacific Rim countries. The results of these initiatives and the strong economy we have are an expanded labour income and expanded consumer expenditures. All of these have contributed to our growth.

We have had a larger than normal immigration. This has caused a lot of problems for the government, But, Mr. Chairman, I want to say that these are the kinds of problems that this government would rather cope with than the problems of high unemployment, no growth and an exodus from the province.

Interjection.

HON. MR. PHILLIPS: Indeed, Mr. Member for Prince Rupert, the statistics do back them up.

MR. LEA: No, they don't.

HON. MR. PHILLIPS: I know you're hurting over there, Mr. Member for Prince Rupert, to be part of a government that really doesn't have an economic policy. When they did have it, they blew it. I know you're jealous of the fantastic job that we have done over here. I know you're jealous of the fact that the people of Kamloops endorsed this government, when you thought that somebody else was going to win. I know the member for Prince Rupert is bleeding. He's hurting. His whole party is hurting. But I don't feel for them, because they're not even good opposition. They were terrible government, and they're not even good opposition.

MR. LEA: A man with no compassion. I feel sorry for you.

HON. MR. PHILLIPS: I've got to feel sorry for you too, my friend, because I speak to you outside of the House sometimes, and you seem like a fairly normal individual. But when you get in this Legislature you lose command of all your faculties. You seem to go completely berserk. There is no rationale whatsoever.

MR. CHAIRMAN: Order, please, hon. member. Could I just say a couple of things. First of all, Mr. Minister, you have three minutes left, and secondly, we are debating vote 126, the Ministry of Industry and Small Business Development.

HON. MR. PHILLIPS: I'm disappointed that I only have three minutes, because there is such a fantastic story to tell. Hopefully I will have the opportunity to give you more good news before the votes are finalized. I want to talk at length about that great project called northeast coal.

MR. HANSON: Just table the contracts.

HON. MR. PHILLIPS: There's that member over there, the second member for Victoria, who had an article in the paper the other night that said we're going to lose 20 percent or 25 percent of our forest lands to economic development. That's the kind of falsehood that opposition is perpetuating with the people of this province. We lost about 20 percent of our forest lands in the last decade. Where did it go? Of the forest lands that were alienated in the last decade, 99 percent went for environmental purposes or parks and were not lost to the people of British Columbia. But the second member for Victoria will try and mislead the people of this province into thinking that forest land was being taken out for economic development.

MR. CHAIRMAN: Order, please, hon. member. You have impugned another hon. member.

[ Page 5826 ]

HON. MR. PHILLIPS: Shame on him.

MR. CHAIRMAN: Order, please. I'll have to ask the minister to withdraw the word "mislead." Will the minister withdraw?

HON. MR. PHILLIPS: Yes, I'll withdraw, and I'll sit down too, because I think my time is up.

MR. LEGGATT: I too am somewhat amazed at the tremendous personality that we get exposed to inside here every once in a while. There's a Jekyll and Hyde complex in the minister. I have a feeling that he goes out into the bathroom and takes some kind of special potion that changes him. Outside he's a calm, rational fellow who speaks in modulated tones; but after he's had that elixir and he comes into this place — my God, it's drooling-at-the-mouth time.

MR. HALL: Which is the real one?

MR. LEGGATT: We're not sure. We're not sure whether it's Mr. Jekyll or Mr. Hyde. But I always enjoy listening to the minister, because he has this wonderful facility of applying what is really a fundamentalist heating process to the art of politics. Somehow he's able to put his hand on the economy of British Columbia and say: "Heal." He has solved it. The great magician from the north, the great fundamentalist healer of the economy, has suddenly converted us all from — and I'll use his own words — hewers of wood and drawers of water. What is the coal deal if it isn't leaving us as hewers of wood and drawers of water — as diggers of coal, and we'll ship out the coal.

I want to tell you that we are not naive about the question of coal sales. When this government was in office it had planned and developed some interesting, feasible arrangements for the marketing of coal. In fact, if one had continued to study and follow those proposals — proposals, I might say, that were supported by the vast majority of coal experts in this province.... Some of the best thinking people in the province, who looked at the questions of how to market northeast coal properly and how to avoid a massive subsidy by the taxpayers of the province of British Columbia, looked at an alternative proposal, which was to move the coal all the way down the BCR and move it out north through Chetwynd. I'm afraid that proposal still makes the best economic sense.

I'm not relying on the kind of harum-scarum, heal-the-economy approach that the minister takes. It's a case of just looking at good old solid economic horse sense. That's something the minister has not applied in the coal deal. He has entered into a contract in which the taxpayers of this province will subsidize the Japanese steel industry to an extent of much more than $1 billion. We had estimated it would run at $1 billion. Given the present interest rates.... We were using a 12 percent calculation; we don't think 12 percent money is available at this point. So I think you can do your homework — get your pencil out and try recalculating the shortage that takes place in respect of every tonne of coal that is marketed out of the northeast.

In general terms, the deal itself is uneconomic. The taxpayers of the province of British Columbia have been asked to massively subsidize Japanese industry, which, by the way, is so successful in competing, selling their automobiles, that they are putting Canadian workers out of work because of the efficiency of their steel industry. There's also their excellent technology; there's no taking anything away from the marvelous engineering and other skills of the Japanese. I don't know why we have to go about subsidizing them. They're already doing very well, thank you. Do they really need the minister to reach into my pocket, your pocket and the taxpayer's pocket, and funnel off perhaps billions — certainly more than a billion — to subsidize that Japanese industry?

Let's examine the proposal not merely in terms of the economics of the Anzac line. The key defect in this particular proposal lies in the Anzac line itself. If you analyze the numbers and the figures, and you come up with a way of moving that coal to tidewater without the Anzac line, the minister's economics might make some sense. But that $500 million nut in the middle of the project — that somehow has to be paid for — has driven the economics of the deal to the point where it's a bad deal and not a good deal. The Anzac line has on it more tunnels, in terms of mileage, than the Canadian Pacific Railway has from the Atlantic to the Pacific. It has a cost-control problem in the construction of those tunnels that no one knows.

In the desperation to come up with some kind of a deal on northeast coal, and in spite of advice to the contrary, I think the minister has persuaded his advisers that we have to go ahead now or we won't sell the coal. The deal, therefore, is premature; it's economically unsound. There are other problems, which we'll deal with in some detail. It is the worst site for a town, environmentally. It is the worst route for the railroad, environmentally. The question of the social problems inherent in the development of the town have not been adequately or properly addressed. It is a deal at the wrong time and at the wrong place.

I'm not saying that any government — whether it was an NDP government or this one — wouldn't sell northeast coal. Of course we'd sell northeast coal. We would be just as aggressive as the minister has been in trying to sell northeast coal. The only difference is that we would sell it economically; we wouldn't give it away. That's the difference between the approach of this minister and the approach that we would take. We don't need to pay them to take the coal. I know the minister is going to say: "Wait a minute, what about all the new contracts?" If he stands up in the House and says that he's got another seven million or ten million tonnes signed, sealed and delivered to Taiwan, Korea or one of the other rim countries.... We don't think it will ever be Japan, because we know the situation in Japan: that market is glutted. The Japanese have ordered far more coal. They're so optimistic that this member thinks he can sell coal to New Zealand. Remarkable! If you look at the economics of the Japanese market, which obviously the minister and his officials haven't done, instead of this euphoric kind of "everything's onward and upward and we can sell, sell, sell," you'll see that the Japanese have now purchased more coal than they're going to use. All of the studies show that. The world coal study shows that. If there's a margin in that market, it may be about six million tonnes. That's a world market. That's the absolute maximum that the Japanese are going to commit themselves to.

The fact is that it's a bad deal for British Columbia, and we're losing about $10 for every tonne of coal that goes across that line. There's $10 coming out of the pockets of British Columbians. It didn't have to be that way. It was only that way because of unsound economic thinking and very poor economic planning. As I say, if the minister proposes at

[ Page 5827 ]

the conclusion of his estimates to announce that he has ten million tonnes, he'll still be subsidizing the deal but probably at a lower rate. Right now the subsidy is very massive.

Something else that I hope the minister will address in his remarks is the tabling of the contracts. We still would like to see the contracts that have been entered into between Teck, Denison and the Japanese industry. We all have a fear here. The other day I noticed that the minister has gone beyond the preliminary stage now, and he's inviting tenders for the tunnelling in of the Anzac. My recollection is that those tenders are coming in in June, I haven't got the ad in front of me, but the minister can correct me. If Teck and Denison don't have a signed deal with the Japanese and suddenly we have committed public moneys to that tunnel, what a wonderful position for those companies to be in to renegotiate the deal. The minister seems to have made all the commitments so far. We'd like to see those contracts in writing and to see them tabled here. We want to know if the minister is going to back up again, as he's backed up from the very beginning throughout these negotiations. There has been one soft party in the whole thing. Every time the deal started to get soft, who got soft? The minister backed up and sweetened it up. That was the history of the negotiation. I'm not sure whether the minister's saying yes or no.

I know the minister has a memorandum in his possession that was directed to all the deputy ministers from his officials in his department — Mr. Sivertson and Mr. Malkinson. I know the minister wants to be open with us and give us all the information so we can, as good legislators, assess the deal in terms of its pros and cons. The first item on that memorandum of June 6, 1981, said: "Certain changes were made in the financing formulas for the Anzac branch line surcharge escalation to meet the Japanese concerns about future cost competitiveness of northeast coal." Who made those changes? Was it the minister who proposed that the deal be sweetened up in order to close it? I don't suspect it was, the federal government. Would the minister like to rise and tell us how that surcharge got changed? Who changed it? Why was it changed and how much was the change? How much more did we give away on the deal in order to complete it? I hope you'll make a note of these. Perhaps your officials will.

I want to read to the minister an interesting press release that came out from Mr. Perrault back in August 1980:

"Details of the federal response were made known in a release of a federal Telex sent this morning. In a press conference in Vancouver, Perrault said: 'The national government cannot ask Canadians to, in effect, subsidize Japanese purchasers of B.C. northeast coal.' In our view, this latest request from the B.C. government oversteps the bounds of what it is reasonable to ask the taxpayer.

" 'The current proposal from British Columbia, however, provides no indication that either government could directly recover its investment. Quite plainly, the coal-buying interest must be prepared to pay a higher price per tonne if they are to benefit from accelerated development of the Canadian resource.' Perrault said that the willingness of the British Columbia government to use excess amounts of public sector money to put together a coal deal for northeast producers could work to the ultimate detriment of all Canadian coal interests. At the negotiating table, it takes pressure off potential buyers to pay a higher price. Moreover, we wouldn't want to be in a situation where southeast and northeast producers were being played off one against the other — or worse, Canadian interests being played off against other international competitors.' "

Well, Mr. Chairman, Mr. Perrault's predictions made in August 1980 have all come true — every last one of them. Each of the criticisms that were levelled against the proposed deal are still there. But what happened was that the federal government allowed the patsies in the province to pick up the deficit. It allowed the taxpayers in the province to pick up the deficit just so the deal could go ahead. I can't see anything in the figures which shows that the federal government are subsidizing the deal.

Maybe the minister has some indication that there is some non-economic contribution from the federal taxpayers of Canada, but we haven't been able to find it. We found a pretty tough-bargaining federal government and a weak-bargaining provincial government on the northeast coal deal, and that's where the subsidy is coming from and that's why the deal is bad. If you examine some of the other questions that arise from northeast coal, such as the internal problems — and the advice that has been given internally is fascinating. The minister knows — and he can smile at this, because he knows — he wasn't supposed to go ahead with the deal. He was supposed to wait. But I know the minister's personality. He takes another drink of whatever he has and he's on his way, and he says: "No, I'm not going to listen to the silly advice of my experts. I know better." It's a triumph of imagination over engineering, as good old P.A. Gaglardi used to say. And he's right out of the P.A. Gaglardi mould in many ways.

MR. HALL: A legend in his own mind.

MR. LEGGATT: A legend in his own mind, yes. But unfortunately the legend is something the province is going to have to live down, because they're paying for the legend. The legend is a costly legend.

Interjection.

MR. LEGGATT: Oh, yes, the southeast is in great shape. Just ask the directors of BCRIC how the BCRIC shares are doing. I think the shares are at $4.80 today. I'm hoping to hear that member get up and explain the impact of the northeast coal deal as it affects his constituents in the southeast. I'd like to hear you get up and support it. Go ahead.

MR. SEGARTY: I am pleased to take my position here in support of the minister's estimates and to let you know exactly what's happening in southeastern British Columbia with regard to the development of coal in that area. As you know, Byron Creek Collieries was recently purchased by Esso Resources and is currently employing approximately 100 persons in southeastern British Columbia.

MR. LEA: On a point of order, I'd like to have Mr. Chairman inquire, because it seems that it may be about to happen.... There is a rule in our standing orders that members must not read their speeches. I wonder if the Chairman would apply that rule, because I strongly suspect that if he can't read what someone else has written there would be no speech at all.

[ Page 5828 ]

MR. CHAIRMAN: Well, hon. members, of course, we are all aware that we may refer to notes. Speeches cannot be read except in a substantive reply to a speech such as a throne or budget speech. This is the parliament, where we get up and speak. With reference to notes, that's quite acceptable.

MR. MUSSALLEM: On a point of order, I have the honour to remind the Chair that the hon. first member for Vancouver just a few days ago in this House stated he would read copiously from his notes, and he read practically the entire speech. I think that the Chair has to look with a great deal of leniency on this point of view. We did not object to that; neither should we object to our hon. member. He will speak at times, but if he reads from copious notes it should be in order.

MR. LEA: Speaking to the point of order just raised by the member for Dewdney, that what has happened in the past is of no concern, Mr. Chairman, I suggest that you are here to apply the rules. The rules state, as you know, that speeches will not be read.

MR. SEGARTY: I will use notes.

As you know, Mr. Chairman, Byron Creek Collieries has recently been purchased by Esso Resources. They're operating a mine in southeastern British Columbia, close to the Alberta border. Fording Coal is operating a mine in Elkford and at the present time has an expansion plant which is employing approximately 900 people up in Elkford. British Columbia Coal has a mine in Sparwood currently employing approximately 1,000 people.

At the present time there are three mines under construction. British Columbia Coal has the Greenhills project under construction at Elkford. The construction project will start this summer, employing approximately 400 people. They have a 15-year export contract to Pohang Iron and Steel Co. of Korea. Once that project is completed it will employ 350 full-time people.

Crows Nest Resources is also constructing a mine halfway between Sparwood and Elkford, employing approximately 900 British Columbia workers in the construction project alone. It's costing approximately $200 million to construct this mine, I understand that Crows Nest Resources has contracts for all of its coal. Once the project is completed — I expect later on in 1982 — that will employ 350 full-time people.

Esso Resources, since they've taken over Byron Creek Collieries in my constituency, currently employs 100 people. I'm told by officials of Esso Resources that they intend to expand their operation to employ approximately 300 people.

All of these positive economic developments, along with the $47 million Roberts Bank port expansion, should secure markets from southeastern British Columbia for a long time to come. We expect to be exporting 28 million tonnes of coal a year from southeastern British Columbia by the end of the 1980s. I'd also like to say that coal from British Columbia contributed $600 million to the Canadian economy in 1979. I expect that by the time the northeast coal project is completed it will triple that amount.

I wonder if the member for Coquitlam-Moody (Mr. Leggatt) is aware that in December 1975 the former NDP Minister of Economic Development, the first member for Vancouver Centre (Mr. Lauk), announced the northeast coal development. It's reported on page 3 of the Vancouver Sun for December 4, 1975. I'm wondering if the member for Coquitlam-Moody could perhaps provide us with the cost-benefit analysis done at that time by the first member for Vancouver Centre when he was Minister of Economic Development. If it was possible then, then surely it's possible now, five years later.

MR. LEGGATT: I don't know whether we'd still have the cost-benefit analysis study, Mr. Member. I suspect the minister has. It will be in his files. Knowing his approach, if it was anything at all that he could make use of he would have made use of it a long time ago.

MR. SEGARTY: Mr. Chairman, the member for Prince Rupert (Mr. Lea) wants me to table this.

MR. CHAIRMAN: That can't be done in committee, hon. member.

MR. LEGGATT: I appreciate that the member is pleased with the mining industry in his area. Imagine how much more he could be happy with if northeast coal hadn't been competing with southeast coal in contracts. It will continue to compete with southeast coal in contracts. As a matter of fact, the whole system of marketing coal in British Columbia, being an internally competitive system, makes no international economic sense. The minister may or may not have examined this. Certainly coordinated marketing of British Columbia coal is long overdue. But this fanatic concern about what the minister sees as free enterprise principles has in fact resulted in selling far less coal out of the northeast than we should be selling.

[Mr. Davidson in the chair.]

I want to briefly review a few other matters as well. Perhaps the minister might wish to comment on some of the other internal memos. The January 6 memo which I referred to, from Mr. Sivertson and Mr. Malkinson, concluded. as follows: "We think a carefully considered delay of six months in the project and service date would be very prudent from all parties' perspectives." Dalcor — the engineering firm advising the minister — has also made a similar recommendation in their December 11 letter, and several other parties have expressed similar thoughts. It would mean rescheduling of work and commitments to meet a summer of '84 start-up date, instead of the last quarter of '83, which the minister is now in the process of trying to comply with.

I hope the minister will break down the cost of his new offices in Vancouver, and let us know the cost of this brand new level of bureaucracy which the minister has created "to coordinate," as he said, the project. We would like to know who we've got over there — how many staff. I think there may be some indication in a press release, but I think the minister might want to be a little more specific and tell unjust what they're doing and why this coordination is so vital at this particular point.

If you examine this document as a whole, it's pretty clear that the minister has charged ahead, in spite of what seems to be the majority of advice he received. Certainly one of the key questions that I think the minister will have to address — and I hope he will be fairly specific about it — is the level of provincial commitment to the project in terms of expenditure. I realize that these expenditures are going to be staged-

[ Page 5829 ]

in — there will be borrowings staged-in. But if we don't have something totally scaled, signed and delivered with the Japanese, the minister is going to be in an awkward position if Teck and Denison come back knocking on his door and say that they don't like the surcharge or they don't Iike the freight rate. I hope the minister is going to be able to assure us that we're not going to renegotiate the deal again. It has been negotiated several times over. Each time the province has wound up with a hole in their pants.

Interjection.

MR. LEGGATT: Yes, I'd like to deal with cost-benefit analysis before I sit down. The minister indicated at some time that he wasn't all that impressed with cost-benefit analysis, but I'm sure he's got a cost-benefit analysis now. And I'm sure he's going to table it for us, as he promised some time ago during question period. I'm sure the minister will also table any contracts he has. I be able to assure us that we're not going to renegotiate the deal again. It has been negotiated several times over. Each time the province has wound up with a hole in their pants.

Interjection.

MR. LEGGATT: I'd like to deal with cost-benefit analysis before I sit down. the minister indicated at some time that he wasn't all that impressed with cost-benefit analysis, but I'm sure he's got a cost-benefit analysis now. And I'm sure he's going to table it for us, as he promised some time ago during question period. I'm sure the minister will also table any contracts he has. I hope he will also table all the embargo documents that were embargoed previously and are in the hands of the federal government, so we can have an opportunity to analyze the deal. One of the problems with dealing with this is that there is not a lot of public information, except press releases and advertising from Teck and Denison. It would be very useful if we had access to the specific contracts. I also would wonder if the minister asked Teck and Denison what their projected profit picture was with respect to this deal. What kind of an analysis has the government done around the feasibility, not only from its own point of view but as to the feasibility of the companies themselves?

[Mr. Strachan in the chair.]

There are a number of other matters that I think the minister might want to deal with. One is the question of the LILA loans. At the moment my understanding is that they've been put on hold. In fact the small business community has been told that there aren't any LILA loans available unless the minister himself is going to re-examine the criteria on the LILA loans. We'd like to know whether they've developed any new criteria, and we also want to know when those loans are going to start. We think it's a good program. We don't Iike the idea of seeing that program shut down, and I think there are many members of this Legislature who've been receiving complaints.

I would like the minister to explain the B.C. Development Corporation's studies into the fishing industry, which are interesting and fascinating but will create a revolution in fishing in the province of British Columbia. I think the minister might want to deal with that and tell us the proposals that his branch has with respect to organizing the fishing industry. The proposals look to me as though we were going into a kind of industry fish-farming system, where we had special federal regulations around the taking of fish that were farmed by various sections of industry. I'd like to hear about that.

[Mr. Davidson in the chair.)

I would like to hear from the minister about his opinions on the McGregor diversion. Does he support 49 Is he against it? It hasn't been diverted yet; it's going to be. We can ask about future actions — except in question period — so I can ask the minister about future actions on the McGregor diversion. I can't help having a very strong suspicion that the routing of the Anzac line away from the Monkman route was a direct result of keeping the McGregor diversion as a feasible project for B.C. Hydro. I want to ask the minister whether he has had any representation from B.C. Hydro on the route that was chosen — Anzac versus Monkman — in terms of trying to protect that particular project. Obviously a Monk man rail line will be flooded if the McGregor diversion proceeds. I would hope the minister would have a look at that. Perhaps he'd like to comment on it.

And then perhaps he'll tell us why he's spending so little on small business development this year. Anyway, let's hear from the minister now.

HON. MR. PHILLIPS: Mr. Chairman, I want to answer the member's last question first. This government has done more in the way of assistance to the small business community than any jurisdiction in Canada — and probably anywhere in the world. That was certainly....

Interjection.

HON. MR. PHILLIPS: You get in your own seat, my friend, and quit trying to abuse the rules of this House.

As you know, Mr. Chairman, last year I went to Melbourne — to a world symposium on small business. I went down to find out if there were more things this government could do for the small businessman. I was curious because we have brought in new, innovative programs for small business in the province. They've been very successful, thank you very much. The LILA program is a new program — never been tried anywhere else in the province. It's been very, very successful. I went down to Melbourne to listen to people from all over the world on programs for small business. I found out that this government here has practically done a better job than any other jurisdiction as far as helping small business. I know the member for Coquitlam Moody (Mr. Leggatt) would like us to believe that we haven't done a good job, but indeed we have done a good job. I'm not saying there isn't more we can do, because I have a great new idea that I'd like to talk about it a little later in my estimates. It will be another breakthrough for any jurisdiction in assistance to the small businessman. We're working on it, and we've been wrestling on how to put it together, because we didn't want to create a socialist bureaucracy, and we didn't want to create great offices all over the province where people are billed in until retirement and don't really do their job of helping small businesses. So we will continue to expand those programs where the small business community works with the small business community and the government, We assist them to help themselves, because that's the way it really works. I'll talk to you about that a little later.

[ Page 5830 ]

But I want to tell you it isn't always dollars and cents or pumping in money that brings the results. It's how you do it and where you put it. That's why we've been frugal, but that's why we've been successful. We're talking about assistance to small businesses. When they ran BCDC they pumped so much money into so many small businesses that they helped them go broke. By pumping money into a small business you don't always necessarily assist them to be profitable. Sometimes you pump so much money in it goes broke.

MR. LEA: It works with coal companies.

HON. MR. PHILLIPS. I want to talk to you about coal. The member brought up a lot of points about coal. But I want to tell you there's no subsidization to the Japanese steel industry when they're paying over $13 a tonne more than they're paying anywhere in the world. Do you call that a subsidy? Do you call that a giveaway? The Japanese steel industry is paying a premium for northeast coal. They realize the costs are higher and that in today's world, with high interest rates, inflation and opening up a new area, certainly the costs are going to be higher. If we'd taken the attitude of the NDP socialists when we were opening up our lumber industry in the great northern part of this province it still wouldn't be opened up, because the cost of lumbering in the northern part of the province is certainly more expensive and more costly than it is on Vancouver Island.

He tries to perpetuate the old socialist myth that southeast coal is losing out because of northeast coal. I'll tell you the truth of the matter: that group over there would far sooner create jobs in Australia than they would in British Columbia so they can stand up and say we haven't created any new jobs in the province of British Columbia. Those major contracts that went to the northeast would not have gone to the southeast. They would have gone to Australia or some other country. The NDP socialists would sooner see economic development in other countries than they would in their own province of British Columbia.

MR. LEA: Why?

HON. MR. PHILLIPS: Because you're socialists and you've got bad policies. We've known that all along. The member for Prince Rupert was making light of a very serious matter. But he doesn't care about the economy. All they want over there is power. They don't care what happens to the economy. "Just give me the power." They don't care whether they do anything for the people of the province — "just give me the power." That's all they want.

There have been additional sales from the southeast part of the province. What will hamper the sale of coal from the southeast part of the province is the inability of the Canadian Pacific Railway to haul that coal. That's what will hamper sales of coal from the southeast part of the province. That gives me a great deal of concern, but that is the fact of the matter. Because unless massive amounts of money are spent upgrading the Canadian Pacific Railway between now and 1986, and unless their plans are upgraded, all of the coal sales out of the southeast that can be accommodated on that railway are practically sold right now. That will be the....

Mr. Member for Coquitlam-Moody, are you listening to me?

MR. LEGGATT: No, I'm listening to the Minister of Finance. He's making more sense.

HON. MR. PHILLIPS: That is the problem, not that we have flooded the market with northeast coal. There have been additional hundreds of thousands of tonnes of coal sold out of the southeast. Negotiations are still going on to sell additional tonnages out of the southeast. They can sell all the coal they can ship out of the southeast. Why do you think we're going ahead with a great expansion of Roberts Bank to accommodate additional sales out of the southeast projected to be in the vicinity of 30 million tonnes by 1990?

First of all, Mr. Chairman, I want to analyze the member's critique of northeast coal. In the one breath he says they were going to put it together. They announced that they were going to go ahead with it as a political move six days before the election in 1975. They hadn't done their planning. They hadn't done any cost-benefit studies. They would desperately have loved to have sold the coal; but when visitors came here from overseas — when you were government, my friend — they cooled their heels in hotel rooms. Nobody from the government would talk to them.

This was at a time shortly after the oil crisis in 1973. There was a demand for coking coal. The world was knocking at their doorstep. They hadn't done their planning. They weren't interested. They couldn't put the deal together, because they wanted the government to go in and buy out the coal-mines. They wanted the government to do it all. Now they're telling me it's not economically feasible for the private sector to do it. Not only would the government have built the infrastructure, they would have built everything and committed the taxpayers to taking the risk that the independent private sector are taking today. But the coal companies and the countries of the world were knocking at their doorstep. Those contracts went to Australia, the United States, South Africa and other countries of the world.

I was really amazed at the rationale of the learned member for Coquitlam-Moody, who says we should take that coal about 120 miles further up from the Sukunka mine through Chetwynd. He doesn't realize that, because we did our planning and hired the best engineering brains in the world, we found we could not get from the Sukunka mine down across the Murray River without building a long tunnel through a very difficult structure. He doesn't realize that the engineers pointed out we would have to build one of the longest and highest trestles in the world. He doesn't seem to realize that had we gone that route, we would have been hauling hundreds of millions of tonnes of coal an additional 120 miles. I'm at a loss to even offer a rational critique of his assessment, because what the gentleman said just doesn't make sense.

We have spent huge sums of money to hire the best engineering brains in the world to make sure that we didn't repeat some of the mistakes that may have been made on the British Columbia Railway in the past. When that member stands up in this Legislature and says the whole problem with northeast coal is the Anzac line, a line which, with all of the infrastructure in place, and the line.... The government and the people of British Columbia will receive over $350 million in taxes over and above the expenditure, and you tell me it's not a good deal. We still have the line, we still have the infrastructure and we still have all of that in place.

Certainly the federal government is the biggest beneficiary of this coal deal. As I've said before in this House, and I'll say elsewhere, when it comes to British Columbia, any federal government money seems to be called a subsidy. But when you go to other parts of the country, federal government money automatically becomes a grant, a loan or a groan. It's

[ Page 5831 ]

not a subsidy when it's spent in Ontario, Quebec or the Maritimes, but as soon as it comes to British Columbia it's called a subsidy.

Yes, we're good people in British Columbia, because, as I said before, we're leading the federal government kicking and screaming, as I said before, into the Pacific Rim. The hundreds of millions and billions of dollars that will come back to Canada to balance our trade payments are from British Columbia, while the steel industry in Ontario buys coking coal in the United States of America and contributes to the deficit and the imbalance of payments. You sometimes wonder, Mr. Chairman, why we become frustrated in British Columbia. As I said before, other provinces have natural resources, but because of the policies of those governments they are going into debt every year; they're buying more from other countries than they're exporting. British Columbia leads the way in Canadian exports to the Pacific Rim and helps Canada with her balance of payments. That's a side benefit from the development of northeast coal which no economist has been able to put a handle on.

Now, Mr. Chairman, the member said that he was going to haul the coal all the way down to Squamish. Can you see the environmentalists allowing 10 million, 20 million or 30 million tonnes of coal to move out of Squamish, North Vancouver or Port Moody? You see, Mr. Chairman, the problem with the member is that he's got tunnel vision. He's thinking small. I can understand why he's thinking small, because this is the largest single export contract ever signed in the history of Canada. He can accuse me all he wants to of backing up, but I want to remind the member that this coal deal is a very complex deal, because there are eight owner-groups involved.

I also want to remind the member that this coal deal was put together at a time in history when relations between the provincial government and the federal government were, to say the least, not on the friendliest of terms. I want to remind the member that in order to coordinate the groups we had to deal with the National Harbours Board. I'm sure the member knows the National Harbours Board is certainly one of the largest bureaucracies in Canada, and probably one of the most independent and one of the most difficult to deal with. Indeed, we had to deal with the federal government and many departments of the federal government.

We had to deal with Canadian National Railways. Throughout the negotiations, who recognized the benefits of northeast coal? Canadian National Railways could see the benefits and the profits, Certainly they're going to have to spend huge sums of money upgrading their line from Prince George to Prince Rupert. They were going to have to do a vast amount of it anyway, in order to accommodate the new grain terminal at Prince Rupert. But Canadian National Railways has never once been negative on northeast coal, because they could see the benefits to Canadian National Railways.

So far I've mentioned four groups that we had to deal with. We had to deal with British Columbia Railway, an independent Crown corporation. We had to deal with British Columbia Hydro, which is going to supply the power to the new townsite and to the dam. We had to deal with the Ministry of Highways and the Ministry of Municipal Affairs. We certainly had to deal and negotiate with the Minister of Finance (Hon. Mr. Curtis). We had to negotiate and deal with the Attorney-General (Hon. Mr. Williams), who's going to supply services in there, and with Education, Human Resources, Forests, Housing, Mines, Environment, every ministry of government. Over and above that we had to deal with two coal companies and six Japanese steel industries. And we had to deal with the government of Japan.

That's why, my friend, you didn't put the deal together when you were government, You wouldn't have been able to cope with it and pull it together. There was no desperation in signing this deal. But I do want to tell you that had we not made this deal now it would have gone to Australia, and it would have been the next decade, make no mistake about it.... Oh, we could have got a few million tonnes like they were going to deal for — maybe one million tonnes together out of the Sukunka mine — and built a spur-line up to Chetwynd.

This is the way we're putting the deal together. There are definitely net cash flows to the taxpayers. The spinoff benefits to manufacturers and fabricating industries in that member's riding will be tremendous. This deal will spread its tentacles and influence into all the province of British Columbia and into eastern Canada, It will have long-lasting benefits, because, as I've said before, we had to have a major contract to justify the expenditures we're making. We could have got one million tonnes or two million tonnes. When the Japanese came here last April and said, "We'll buy four million tonnes from you, " I said: "No, you won't. It isn't enough." We negotiated it up to 5.5 million tonnes.

The member seems to forget, if he's accusing me of crashing in, that the market will only stand so much. As the tonnages went up, we were able to run our figures through the computer and certainly make a little better deal. But you seem to forget, Mr. Member, that every time we made some adjustments in the freight rate or in the surcharge, the tonnage seemed to go up. You seem to forget that, my friend. It's all part of the negotiations.

You also seem to forget that never in the history of this province, Canada or any state was there written in the deal and in the negotiations all of the infrastructure — the cost of the highways, the powerlines, building the basic townsite and the water and sewer. We'll be paid back if there is any bonanza. In other words, we have protected the taxpayers of British Columbia so that if the price of coal sky-rockets, the coal companies aren't going to make any bonanza. We will collect a surcharge if there's a bonanza in the price of coal.

To the member for Coquitlam, name me one other jurisdiction in Canada where there has been a resource railroad built.

MR. LEGGATT: How about Australia?

HON. MR. PHILLIPS: Yes, I'll tell you all about Australia, my friend. I'll sit here all day and talk to you about Australia, because I talked to the people in Australia. You're not going to snow me with what they're doing in Australia. I've had many hours of very beneficial meetings with the Australians. I'll tell you, when you boil it down Australia does exactly the same thing as we do here.

But I'm just asking you what other jurisdiction builds a resource railroad and asks the first contract to pay for the total cost of it. The member for Coquitlam seems to forget that the infrastructure that we build now will be available for other coal contracts. He seems to forget that indeed we are charging a surcharge on the use of that Anzac line.

I didn't make a note of all of the things that he said, because some of them were really irrelevant.

[ Page 5832 ]

MR. LEGGATT: Oh, be kind.

HON. MR. PHILLIPS: Mr. Chairman, I want to tell the member that I'm really disappointed in the attitude he has taken, but I guess I shouldn't expect anything more from him.

When the Japanese are paying a bonus of $13 more a tonne, you're trying to tell me that we're giving our coal away. I say to that member that because of the tough negotiations we had with the steel industry and with the coal companies, indeed they are paying a large bonus to open up a new area. It's a benefit to them; it's a benefit to us.

MR. LEGGATT: For a little while.

HON. MR. PHILLIPS: For a little while, my friend? I want to tell you, we're talking about now. When 1989 rolls around, my friend, then the surcharge increases, the railway freight is going to go up. Then the price of coal will go up, and the dollar will go back on the freight rate.

Mr. Chairman, I know there is no way I am ever going to convince that member, because we differ in philosophy. He would have us buy all the coal from the coal companies and form a huge bureaucracy. Then we'd go out and sell it around the world. That's what they do. That's their plan: the British Columbia Coal Merchandising Association. Yes, we'll buy it from the companies and we'll go out and sell it. I can just imagine.

MR. LEGGATT: Why don't you get rid of BCBC, then?

MR. COCKE: Did you dump it? Come on, tell the truth, for heaven's sake.

HON. MR. PHILLIPS: Well, BCBC as I've said in this House before, is strictly a tax-collecting agency. That's all it's done. And the sweetheart deal that they made and took off the take-or-pay contracts.... If I were you, Mr. Member, I wouldn't even mention BCBC in this House.

Interjection.

HON. MR. PHILLIPS: You know, you're as much of a disaster as the member for Coquitlam-Moody(Mr. Leggatt). You're the gentleman who told me when we were developing New Westminster: "Oh, you'll never fill it up. Oh, it's going to be a disaster. It'll never work. Oh, you guys have got your heads in the clouds. You'll never get anybody to come in there." One of the leading developments in all North America is the redevelopment of New Westminster, but that member who represents that riding did nothing to help it. All he's done is criticize, criticize, criticize.

MR. COCKE: What have you done?

HON. MR. PHILLIPS: I'll tell you, Mr. Chairman. I'll be over there within two weeks, and I'll tell you what we've done: one of the greatest downtown redevelopments. But I'll tell you, in order to get it going it took vision. It took guts, and that's why we've succeeded. They wouldn't have it.

AN HON. MEMBER: All talk.

HON. MR. PHILLIPS: No, Mr. Chairman, there's no loud noise here. We get results; they're evident everywhere. It's got them so jealous and so confused that they can hardly contain themselves.

I want to talk about that great LILA program. But the hour is getting a little late, so on the very positive note that things are indeed great in the province of British Columbia we have the greatest deal and we have the greatest new, imaginative programs anywhere in the world.... On that very positive note, I move that the committee rise, report resolutions and ask leave to sit once again.

MR. LEA: On a point of order, I'm just wondering, Mr. Chairman, whether you could check your list of unparliamentary words and see whether "positive" is on it. I notice that the government has decided that this is the word of the day. Was it Goldfarb or Heal? Everything has to be positive.

MR. CHAIRMAN: I don't really have to, hon. member. I'm sure the member is aware of that.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

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

Hon. Mr. Rogers moved adjournment of the House.

Motion approved.

The House adjourned at 5:54 p.m.