[ Page 7711 ]

CONTENTS

Routine Proceedings

Oral Questions

Spetifore lands. Mr. Macdonald –– 7711

B.C. Ferries plans for May 24th weekend. Mr. Stupich –– 7712

WCB boards of review vacancies. Ms. Sanford –– 7712

B.C. Hydro rate increases. Mr. D'Arcy –– 7713

Municipalities Enabling and Validating Amendment Act (Bill 8). Committee stage.
(Hon. Mr. Vander Zalm)

Third reading –– 7713

Geothermal Resources Act (Bill 5). Second reading. (Hon. Mr. McClelland)

Mr. Howard –– 7713

Mr. Skelly –– 7713

Mr. D'Arcy –– 7714

Hon. Mr. McClelland –– 7714

Division –– 7715

Municipal Expenditure Restraint Act (Bill 32). Committee stage.

(Hon. Mr. Vander Zalm)

On section 4 –– 7715

Mr. Barber

On section 5 –– 7717

Mr. Howard

Mr. Barber

Mr. Skelly

Third reading –– 7721

Hydro and Power Authority Amendment Act, 1982 (Bill 40). Second reading. (Hon. Mr. McClelland)

Hon. Mr. McClelland –– 7721

Mr. D'Arcy –– 7721

Mr. King –– 7722

Mr. Lea –– 7723

Mr. Mussallem –– 7724

Mr. Lauk –– 7724

Hon. Mr. McClelland –– 7725

Division –– 7727

Transpo 86 Corporation Amendment Act, 1982 (Bill 45). Second reading. (Hon. Mr. Hyndman)

Hon. Mr. Hyndman –– 7727

Mr. Lorimer –– 7728

Mr. Lauk –– 7728

Hon. Mrs. McCarthy –– 7728

Hon. Mr. Hyndman –– 7729

Committee of Supply; Ministry of Energy, Mines and Petroleum Resources estimates.

On vote 28: minister's office –– 7730

Hon. Mr. McClelland

Mr. D'Arcy

THURSDAY, MAY 20, 1982

The House met at 2 p.m.

Prayers.

MR. REE: Mr. Speaker, in the gallery today we have a visitor from Sydney, Australia: Mr. John Parkinson, national promotions manager for the Australian Wine and Brandy Corporation. Hosting him in British Columbia is Mr. Clare MacSorley, who is president of MacSorley, Turner and Graham and a good friend and supporter of mine. I'd ask this House to welcome Mr. Parkinson to British Columbia, and both of them to this House.

MR. NICOLSON: Visiting the Legislature today are 17 students from the grade 7 class of St. Joseph's School in Nelson accompanied by their teacher, Ms. McLean, and chaperons. I would ask the House to bid them welcome.

HON. MR. HEWITT: In the gallery with us today are two visitors from England: Mr. Tom Conaty, who represents the B.C. Tree Fruits Ltd. for the British and European markets, and Mr. Alick Glass, managing director of the Glass Glover Group in London, England. Mr. Speaker, Mr. Glass has been successful in marketing B.C. apples in England. From 1979 when the market for B.C. apples was approximately zero, he has taken that export up to 600,000 boxes in 1981. Those export sales of Okanagan and Creston Valley apples have now approximated 50 percent of B.C.'s offshore sales. I would like the House to express our appreciation to this man who has done such a great job for us in representing B.C. agriculture.

MR. SPEAKER: Although the news the minister brings could be considered good, it's rather inappropriate at introduction time.

MR. KING: Mr. Speaker, this afternoon around 3 o'clock there will be a class from Ranchero Elementary School in Salmon Arm visiting in the gallery, along with their teacher, Mr. Alan Shipmaker. I would ask the House to welcome them.

HON. MR. HYNDMAN: Mr. Speaker, would members join me in welcoming the executive of the Rental Housing Council of British Columbia: the executive director, Mr. Jack Hayes; the chairman, Robert Hunter; the vice-chairman, Denis Doll; and past president Bruce Innes.

MR. LEA: Mr. Speaker, visiting in the gallery today is my mother-in-law, along with her sister Annie from New Westminster. Just so that we get full support in this applause from the other side of the House, they are having dinner tonight with the Socred side of the family.

MR. STRACHAN: Mr. Speaker, all members of the Legislative Assembly are of course in debt to the wonderful program started by Speaker Dowding, namely the legislative intern program. We had the good fortune to take our interns to lunch this afternoon, and this is the last day that we'll officially be able to welcome them to the Assembly. I would ask the House to give a nice warm round of applause and congratulations to the interns from the Socred caucus: David Burgess, Jane Friesen, Cliff Hewitt, lain MacVay, and Carla Wilson.

Oral Questions

SPETIFORE LANDS

MR. MACDONALD: Mr. Speaker, I have a question for the Minister of Agriculture (Hon. Mr. Hewitt), Where is he? Then I will ask a question of the Minister of the Environment, regarding the Spetifore lands and the ELUC meeting on those lands — preceded by a secret meeting in the Laurel Point Inn on July 15, 1980 — which took place on July 16. I ask the minister whether he received any written representation from the member for Delta (Mr. Davidson) prior to that ELUC meeting.

HON. MR. ROGERS: I don't remember any secret meeting. Perhaps you went to a secret meeting. I never went to a meeting at Laurel Point Inn on the subject.

MR. MACDONALD: No, you were not there.

HON. MR. ROGERS: But, I guess, if it's a secret it's something you had better know about, not me. I don't recall receiving any letter on the subject from the member for Delta, but it's some time ago. I may check my files to see if I did. If it's in the affirmative I'll bring an answer back to the House.

MR. SPEAKER: In quickly reviewing the guidelines established by Beauchesne, I notice in section 148 that communications between members and ministers ought not to be referred to in question period.

MR. MACDONALD: My next question is to the Minister of Agriculture. A couple of days ago documents filed before the Utilities Commission by Thorne Riddell showed that the Spetifore lands released in January 1981 are to be sold for $400 million — they used to be assessed at $800,000 — and that there will be a profit of $190 million to the promoters. These projections were very quickly known to the banks, because the mortgage money was readily available to the promoters. Can the Minister of Agriculture confirm that the cabinet and he were aware of this exorbitant profit ripoff to the promoters at the time the decision was made to release these lands from the agricultural land reserve?

HON. MR. HEWITT: The question as to whether or not profits are made on the sale of land does not fall within the purview of dealing with land and its capability to produce food or not produce food.

MR. MACDONALD: I have another question for the minister, who said that he doesn't care how much the promoters are getting — or says he doesn't know.

AN HON. MEMBER: Is that a question?

MR. MACDONALD: It isn’t a question. It's a complaint on behalf of the people of this province, who have been shamelessly milked by secret political meetings giving away vast millions to their political friends, supporters and fundraisers. That's what we're talking about. It's not a joking

[ Page 7712 ]

matter whatsoever. I ask the minister now: was he aware when the cabinet released this land that this property was going to be converted into 2,405 luxury housing lots that were going to sell for $160,000 each, up to 1990?

HON. MR. HEWITT: Again, the purview of the committee deals with agricultural land and its capabilities. The decision to exclude the land was made on the basis of the application and, if I recall, the information provided to us. The determination as to whether or not it's for building sites is a local municipal zoning matter and not a matter for ELUC — and you know that full well.

MR. MACDONALD: In view of the fact that he now knows the tremendous private wealth that's been placed, at the expense of the general public of British Columbia, into the hands of these promoters, Spetifore and Anderson, has the minister decided to take steps to put that land back into the agricultural land reserve?

HON. MR. HEWITT: Mr. Speaker, the decision in regard to the land matters was made by the Environment and Land Use Committee on the basis of the information we had, not who may or may not profit from it. For the member's information, the latest information on file that I'm aware of is that that land is still zoned agricultural by the Greater Vancouver Regional District. Therefore nobody can build on it until the local zoning is changed. So why is he talking about massive profits? The profits may or may not be made if the local zoning is amended.

MR. MACDONALD: Do you mean to say that the banks of British Columbia, who have advanced $184 million against that land already, don't know better than what the minister has just told this House — that it's going to come out through you or Mr. Vander Zalm under his new bill?

MR. SPEAKER: Order, please. I must hear the question. Was there a question?

B.C. FERRIES PLANS FOR MAY 24TH WEEKEND

MR. STUPICH: I have a question for the Minister of Transportation and Highways. In view of the fact that we're approaching a long weekend, I wonder what plans have been made by B.C. Ferry Corporation to accommodate the expected high volume of traffic. I'm particularly interested in Route 2 between Nanaimo and the mainland, but I would also expect an answer about Route I between Swartz Bay and Tsawwassen. What advertising has there been of these plans?

HON. MR. FRASER: I'm happy to report to the member for Nanaimo that an advertising campaign has started today about greater capacity for the long weekend, starting tomorrow, and we don't anticipate any problems on any routes 1, 2 or 3.

MR. STUPICH: How many more sailings?

HON. MR. FRASER: There are 27 sailings a day, I believe, for the long weekend. It's stepped up a lot.

WCB BOARDS OF REVIEW VACANCIES

MS. SANFORD: Mr. Speaker, I have a question to the Minister of Labour. Once again there is a tremendous backlog, nearly 3,000, of Workers Compensation Board appeals, forcing an injured worker to wait six months and more before his appeal is heard before a board of review. Why has the minister not filled the two chairmanship positions, which have been vacant for several months, to clear up this backlog?

HON. MR. HEINRICH: I thank the member for the question. I'm very much aware of the problem. It's my understanding that there is only one vacancy, not two. I might further advise that I have been conducting interviews with respect to filling that particular slot.

I might also add that the present system, with all due respect, is not really adequate to meet the backlog. I did add one further panel about 18 months ago in an attempt to address the backlog of appeals; that, frankly, has not proved to be satisfactory, and the entire system is subject to some review.

MS. SANFORD: The positions of one full-time chairman and one part-time chairman have been vacant for some time. How many people has the minister interviewed to fill those two positions, and when?

HON. MR. HEINRICH: I'm really not prepared to discuss the number of people whom I've interviewed or discussed this matter with. I also concede that the matter of filling the particular slot of part-time chairman is also under consideration right now.

MS. SANFORD: I was not asking for confidential information about the people who were interviewed for the position; I just wanted to know how many he had interviewed. I had hoped the minister would be able to answer that question.

HON. MR. HEINRICH: I have interviewed a number of people, some of whom the people at the boards of review know of, and others whom they do not.

MS. SANFORD: The minister mentioned that it's now 18 months since he last appointed an additional board of review. In view of the tremendous backlog, has he decided to appoint another full board of review in order to handle the cases?

HON. MR. HEINRICH: As I advised a moment ago, increasing the number of panels at the boards of review has not satisfied the problem. As a matter of fact....

Interjections.

HON. MR. HEINRICH: Perhaps the members would care to listen, Mr. Speaker. There were five panels, we added a sixth, and even with the addition of the sixth panel the backlog, in my view, was not adequately handled. As I mentioned to the member, the entire system of the boards of review is subject to review right now and I do have some ideas on how that problem could be handled. You are not going to resolve the problem by doubling the number of panels.

[ Page 7713 ]

MR. D'ARCY: Mr. Speaker, I think the Minister of Labour may find out that all systems of this government are under review by the electorate at this time.

Interjections.

MR. SPEAKER: I think the member is aware that a question would be more in order.

B.C. HYDRO RATE INCREASES

MR. D'ARCY: Thank you, Mr. Speaker. My question is to the Minister of Energy, Mines and Petroleum Resources, who is nearly out of my line of sight behind the large and jolly Minister of Intergovernmental Relations (Hon. Mr. Gardom). B.C. Hydro has announced that in addition to an almost 20 percent increase in power rates since the first of this year, it is now seeking a further 25 percent increase. Mr. Sheehan, speaking for the applicant, has stated that the application is because the corporation needs the extra $57 million this year and $29 million next year not for increased costs of operation but to meet increased water tax payments. In view of the abysmal state of the provincial economy, has the government decided to reconsider further scheduled increased water tax payments already covered by an order-in-council issued last December?

HON. MR. McCLELLAND: The water rentals are not the responsibility of my ministry.

MR. D'ARCY: We are going now to another question involving the Minister of Energy, Mines and Petroleum Resources. If the minister is not aware that industry in this province is directly affected by the water rate increase, then he is not aware of a great deal within his ministry. Well over a month ago the Utilities Commission forwarded a report to the cabinet and to that particular minister regarding the recommendations surrounding the Cominco–West Kootenay Power rate licensing and exemption application. Has the minister decided to release that report to the general public, and has the minister made a decision as to whether they will support their own Utilities Commission on that report?

HON. MR. McCLELLAND: No, Mr. Speaker.

Orders of the Day

HON. MR. GARDOM: Committee on Bill 8, Mr. Speaker.

MUNICIPALITIES ENABLING AND
VALIDATING AMENDMENT ACT

The House in Committee on Bill 8; Mr. Davidson in the chair.

Section 1 approved.

Title approved.

HON. MR. VANDER ZALM: I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 8, Municipalities Enabling and Validating Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Adjourned debate on second reading of Bill 5.

GEOTHERMAL RESOURCES ACT

(continued)

MR. HOWARD: Mr. Chairman, I have some brief comments, the first one being that, yes, there are geothermal resources in British Columbia — untapped, except for the one attempt by B.C. Hydro at its Meager Creek operation. There are other potentials that some of us have drawn to the attention of B.C. Hydro, but they have so far been ignored. The major force in this particular piece of legislation is to give the cabinet, the Lieutenant-Governor-in-Council, the authority to distribute another one of the natural resources in this province to whatever private entrepreneurs the cabinet may decide are most friendly.

MR. SPEAKER: Order, please. Hon. members, if those who are moving could do it quietly, it would be a courtesy to the member who has the floor.

MR. HOWARD: The major intent of the bill is to give the cabinet and the minister the authority to further give away, if they so desire, the resources of this province, just as they did with northeast coal. What will be visited upon the population of British Columbia in the years ahead — if what this government has practised in the past is going to be practised in the future with respect to geothermal resources — will be nothing but a massive debt load around the necks of people in the province, and relatively little in terms of return to them from a geothermal resource. For that reason I don't think the bill is worth supporting.

MR. SKELLY: Our caucus has decided to oppose the Geothermal Resources Act for this reason: an act was passed governing geothermal resources under the NDP government between 1972 and 1975. Under that legislation the control and the ownership of those resources was reserved to the people of the province of British Columbia, under the stewardship of their government.

What we have seen in terms of energy resources all around the world has been that major multinational corporations have been buying and taking control of a wide range of energy resources. For example, Gulf Oil controls uranium, oil, natural gas, minerals that are important in the energy industry such as copper, silver and gold, and coal and other fossil fuels. As a result, there's a huge concentration of ownership of energy resources in the hands of a very small number of very large companies that exercise tremendous control over how these resources are developed and exploited — and in whose interest they're developed and exploited. Making the geothermal resources of the province of British Columbia available to the private multinational corporations takes the control and the development of these resources essentially out of the hands of the people of British Columbia and places development priorities in the hands of companies

[ Page 7714 ]

incredibly rich and powerful and beyond the control of this province.

My concern is that should geothermal resources be a worthwhile direction for this province to invest its energy interests in, it may not be in the interests of Gulf Oil or some of those other major companies who wish to exploit other energy resources to their benefit. We would like to see these resources remain in the hands of the people of British Columbia so that they control the priorities as to the exploitation of these resources and can decide the proper timetable for bringing these resources onstream.

Certainly, we feel that the public corporations should be involved in the development of these resources, and there are avenues, other than simply turning the resources over to those corporations, for so involving them. A number of other countries with geothermal and other energy resources have embarked on programs of, for example, joint venturing between government and private corporations, in which case the priorities of the people who own the resources can be best served. Also, you can bring in the development expertise of private owners and corporations. It seems the private corporations are not averse to this type of involvement with governments in the development of these kinds of resources.

Our side would prefer to see these resources remain in the hands of the people of British Columbia and be developed according to the priorities and timetables of the citizens of British Columbia, not placed in the hands of the huge multinational corporations whose intention over the years it has been, and is demonstrated to have been, to control all the energy resources available to them, through a whole range of energy resources. This includes, as I said before, uranium, coal, gas, oil — the whole range, including solar and metals and minerals that go into the development of solar energies, such as copper. We would prefer to see those people as joint venturers rather than as licensees or owners in the resource. Therefore our caucus would oppose this bill.

MR. D'ARCY: As we have noted, we do oppose this particular bill. I would like to ask the minister, when he is closing the debate on this bill, perhaps to indicate why he feels it is such a tremendous priority, to use his own words, to open up the geothermal area. He said it was essential that we do that and that it be opened up to the private sector. Do we have applications? What geothermal resources is he talking about? To my knowledge, there has been no expressed interest by the private sector in geothermal resources. Who's asking for this is, I think, a very important point. In fact, the one major public corporation that has shown an interest — it's been a very limited interest — in geothermal resources is B.C. Hydro, which has done precious little work on either the Lakelse resource or the Meager Creek resource.

I would also like the minister to tell us that he is going to amend this bill when it comes before the House to make sure that the regulatory body of the province will be in charge of looking after applications in the hearings. It does not appear to me, in reading the bill, that there is any provision for open bidding on the matter. It appears that licensing, if the minister so decides, is entirely at the discretion of the minister. He is not required to turn applications over to the Utilities Commission. He's not even required to open anything up for public scrutiny or public bidding. He can simply decide, in the secrecy of a cabinet room, who is and who isn't to get the nod, and on what basis.

There's no provision for level of royalties. It appears that if there were any royalties at all for the use of this public resource, it would be entirely discretionary on the part of that minister or some future minister. I don't believe that's good enough when we're dealing with a very important energy resource — a renewable energy resource, I might point out. I would certainly, as a citizen, let alone as an MLA, much rather cast the future of the resource on the Utilities Commission than on the discretion on any minister, present or future.

I would also like some assurance from the minister that he in his other hat, as a member of the board of B.C. Hydro, is going to change his attitude of just going through the motions regarding the development of that energy resource by that corporation. If we are to attempt to hold down price increases in the energy field in this province in order to maintain our standard of living and our ability to compete in world markets for our industry, we will certainly have to use every means at our disposal to ensure the greatest possible use of all our energy resources. As has been stated by other speakers in this brief debate, we have not made the highest possible use of our other energy resources that we have had developed so far in this province. I would hope, Mr. Speaker, that we would take all steps in advance to make sure that we don't abuse this particular resource, which mankind has fortunately not been able to abuse as yet.

MR. SPEAKER: The minister closes debate.

Interjection.

HON. MR. McCLELLAND: Mr. Speaker, the member said I was shocked and dismayed. I'm not at all. I just feel that the members opposite are performing true to form. I don't have any apologies to make to this House that we are going to allow the private sector to take the risks — not the taxpayers of British Columbia, as you would have them do. We're not going to have taxpayers' money risked on open markets for the development of this kind of resource, when the private sector will do it not only more quickly, but better.

Mr. Speaker, the members opposite who have spoken talked about not turning this development over to the private sector, but rather keeping it for public development. I'm glad that they did that, because they've now confirmed the statements that the Leader of the Opposition has made on so many occasions that he is willing to give the resources of British Columbia away to the federal government as long as they'll nationalize the entire industry. We've seen one example in Canada recently of government tampering in an area in which there is so much danger caused by that tampering. I refer to the national energy program. We have seen petroleum exploration in this province destroyed because of the folly of the national energy program. We have seen, Mr. Speaker, not some giant multinationals destroyed or hurt, but thousands of small Canadian companies destroyed because of the interference of a senior government. I was in Fort St. John on the weekend. Every second store is either having trouble or closed down. The oil industry is non-existent. Those people aren't giant multinationals. Those people are good, small, Canadian businessmen, ruined because of the policies of the federal government.

Mr. Speaker, do you want the taxpayers to take the risk? Do you know what's happened because the federal government has decided to have the federal taxpayer take the risk? Today in British Columbia, every one of you — and me, and

[ Page 7715 ]

citizens in British Columbia who have to buy natural gas to heat their homes — pays $1.12 a thousand cubic feet to the federal government to pay for the nonsense of the national energy program. Over a third of the total cost of natural gas today in this province goes toward federal taxes to pay for the purchase by Petro-Canada of that great multinational oil company, Merit Oil in Vancouver — totally owned by a Vancouver businessman, bought out by the Canadian taxpayer in the name of Canadianization. How do you Canadianize a Canadian company? Do you want taxpayers money to go to that kind of thing? Do you want the taxpayer to take the risk of spending $2 billion to buy out a Belgian company and send Canadian money over to Belgium ? We send all our money over to Belgium. You know what happened, Mr. Speaker? About a week or ten days after the Petrofina deal.... The Petrofina deal, of course, is where Canadian taxpayers paid $2 billion for a company in order to put a string of service stations across eastern Canada. Not one new barrel of oil, not one cubic foot of new gas was found as a result of that $2 billion purchase. About ten days later we had in my office the ambassador from Belgium, who wanted to come in and talk a bit with us. You know what he wanted to know? He wanted to know where he could invest $2 billion in Canadian energy projects, because they had just found this big bundle of money. They found it because the Canadian taxpayer got ripped off again. The Canadian taxpayer was asked to take the risk, instead of the private sector, where it belongs.

Mr. Speaker, I always get a kick out of that member for Rossland-Trail (Mr. D'Arcy) when he gets up to talk about energy. First of all, he asked me where the priority is, and then he told me where it was.

Interjection.

HON. MR. McCLELLAND: He's never been to Meager Creek, I'll tell you that.

He says: "Why is there a priority?" And then he says: "Why isn't Hydro doing more?" What kind of logic is that? Hydro is doing more; Hydro has spent a lot of time, energy and development in the pursuit of getting us a new, clean and easy-to-reach source of energy. If the NDP is against that, Mr. Speaker, then the NDP is — as we thought all along — against everything.

Mr. Speaker, I'm happy that the members opposite have decided to vote against this bill, because it proves that they are against progress and against developing new sources of energy. They are for nationalization of Canada's resources and they are for giving our resources in British Columbia away to the federal government, to Mr. Trudeau, and they will prove it unless they come to their senses and change their minds before the vote on this bill comes up. I'm happy that they have announced they're going to vote against this bill, because, I'll tell you, Mr. Barrett has been running around telling all the mining industry and the little businessmen of B.C.: "I've changed my stripes. I'm no longer a socialist. I'm just your average Canadian businessman. Come on with me, fellows!" Well, the socialists have now come out of the cracks, Mr. Speaker.

The member for Rossland-Trail, the official Energy critic, doesn't know what he's talking about, nor do the others there. You know, when someone isn't sure what they're talking about, they say they're a little green behind the ears. Well, I'd say that those members over there are watermelons, Mr. Speaker, because they're only green on the outside — they're red on the inside.

Interjection.

HON. MR. McCLELLAND: Somebody said: "They're pretty seedy too."

Mr. Speaker, I move second reading.

Motion approved on the following division:

YEAS — 28

NAYS — 19

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

MR. SPEAKER: Before I recognize the House Leader, hon. members, perhaps it would be timely to remind hon. members about standing order 17(l), which says: "When Mr. Speaker is putting a question, no member shall walk out of or cross the House or make any, noise or disturbance." If hon. members would observe that particular standing order, it would assist us in making our divisions.

Bill 5, Geothermal Resources Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Committee on Bill 32, Mr. Speaker.

MUNICIPAL EXPENDITURE RESTRAINT ACT

(continued)

The House in committee on Bill 32; Mr. Davidson in the chair,

Section 3 approved.

On section 4.

MR. BARBER: What section of the Municipal Act is referred to specifically in section 4 of this bill?

[ Page 7716 ]

HON. MR. VANDER ZALM: Mr. Chairman, the sections referred to are several: section 745, which is the public inquiry section; section 393, which is the illegal expenditure section; and section 392, which is the irregularities of accounts section. So there are in fact three sections that are affected by this.

MR. BARBER: Do we understand, then, that what the minister is advising is that a mayor, officer or person who commits an offence under section 4 of this bill is liable to a fine, upon conviction, of $200 for each offence?

HON. MR. VANDER ZALM: Mr. Chairman, a member of council, certainly, and council itself would be subject to each and every one of those sections referred to and the implications thereof.

MR. BARBER: Section 393 of the Municipal Act, which is evidently referred to under section 4 of this bill, reads as follows: "(2) A mayor, officer or person, with knowledge that a proposed expenditure has been pronounced to be lacking proper authority, who permits or is a party or privy to the expenditure is liable to a penalty, on conviction, of $200, and is liable to an action brought by the municipality or the Attorney-General for double the amount of the unauthorized expenditure." Is it the government's policy to prosecute a mayor of any municipality in British Columbia under the provisions of sections 4 and, simultaneously, 393 of the Municipal Act?

HON. MR. VANDER ZALM: Mr. Chairman, it's the duty of government to uphold the law. Certainly as the question of which sections are applicable for non-compliance was asked, I listed them. They could be individually or severally used to assure that the law is upheld.

MR. BARBER: Well, Mr. Chairman, we have additional proof today of the heavy hand of Social Credit, the heavy hand of state centralism and the heavy hand of this minister, who actually proposes now that in order to meet the political objectives of Social Credit, he is prepared to fine mayors in municipalities across this province a minimum of $200 or a maximum of "double the amount of the unauthorized expenditure." So if a mayor who is doing what he was elected to do goes ahead. and spends $50,000 to improve police or fire services in a municipality and the tyrannical Minister of Municipal Affairs decides that's wrong, that mayor may be liable to a personal fine of $100,000. If a mayor decides that his municipality requires the improvement of an additional $50,000 for police or fire services, this authoritative and centralist government may then turn around and fine that mayor, personally, $100,000 or double the amount of the so-called "unauthorized expenditure."

When has any government, no matter how right-wing and reactionary, ever been that vindictive as to propose section 4 — non-compliance — be handled in such a punitive and unreasonable way? No government in this province has ever taken this attitude toward local government. You're setting up a program of phony restraint which you yourselves will not obey. This government is setting up a program of phony restraint which your own cabinet ministers disobey day after day by luxurious and wasteful expenditures on matters of personal selfishness and vainglory.

The government of $37.50 bottles of wine now proposes to create a system here under section 4 of this bill which would allow, by way of a declared non-compliance, a mayor to have to pay out of his own pocket double the amount of the allegedly unauthorized expenditure. We know what your political objectives are. We know that the political priority called restraint is blowing up in your faces, as it should. It is collapsing in face of the proven hypocrisy of Social Credit. If this bill were entitled the Provincial Expenditure Restraint Act and you proposed to fine yourselves twice the amount of the unauthorized expenditure, we might be a little more interested, but this section proposes to fine a mayor twice the amount of the unauthorized expenditure. This section, requiring compliance, is further evidence of the blatant and repeated hypocrisy of Social Credit. Do we see a provision here to fine the Minister of Municipal Affairs, who made an unauthorized expenditure of $25,000 last year?

MR. CHAIRMAN: Order, please, hon. member. We've gone over this many times. We must be strictly relevant to the section. We will have ample opportunity for further discussion later in committee, possibly in estimates.

MR. BARBER: I know. I am looking forward to it but this government doesn't seem to want to call estimates.

HON. MR. VANDER ZALM: We'll get to it.

MR. BARBER: You'll get to it as late as you possibly can. You don't want us to find out about your waste and extravagance.

MR. CHAIRMAN: Order, please.

MR. BARBER: Anyway, section 4 is the non-compliance section of this bill. It requires a standard to be met by mayors which will not be met by cabinet ministers. It requires a standard to be imposed upon local government which the provincial government refuses to impose upon itself. It is thereby a double standard, hypocritical, objectionable and one of the running jokes called restraint that Social Credit has been telling around this province since February 18. If this act applied equally to cabinet ministers....

MR. CHAIRMAN: Order, please. It doesn't.

MR. BARBER: I know it doesn't. Thank you, Mr. Chairman. You've said it doesn't, and I agree. It is the fact that it doesn't that creates the argument and debate we are leading. If this bill weren't such a double standard and if this government didn't take such a hypocritical approach to restraint, we would be a little more easily persuaded that section 4 should pass.

Have we ever seen a bill — he asked hypothetically — that saw a cabinet minister fined for unauthorized expenditures? No, but here you want to fine a mayor. Why do you want to single out the mayors? What have they done wrong? Why do you want to exercise this heavy-handed power against a mayor? Are your powers of persuasion not adequate? Is your earlier argument about voluntary compliance no longer meant? Did you not mean it when you said, two days ago, that they were all going along with this in any case,

[ Page 7717 ]

as a matter of totally voluntarily choice, and that you didn't entertain any doubt as to the opposite? Which is it?

It is the trademark of this government that they have described the so-called restraint program as: "Jump safely or be pushed." Here, once again, we have evidence of what happens when they get pushed. They get pushed and they get fined, squashed and held personally accountable, as mayors, for municipalities' expenditures which this minister and his inspector of municipalities — who will take political direction from the minister — may decide are unauthorized.

Let's look at that for a moment. The inspector of municipalities, under section 2, already passed, has the power to designate what is or is not an acceptable operating expenditure.

HON. MR. VANDER ZALM: It's already passed.

MR. BARBER: Of course it's passed. I'm not anticipating legislation; I am referring to something you have passed, over our objection.

He now has the power, having decided what an unauthorized expenditure is, to then go on and — regardless of local priority, local choice and what used to be local freedom — impose his view of an inessential operating expenditure. Under section 4 you are giving him the further power to initiate a prosecution which could lead to the mayor's personally having to pay twice the amount that was allegedly unauthorized and had been spent on behalf of the local improvement.

Do you really need such a sledge-hammer approach to local government? Do you really have so little faith in their integrity that you have to impose section 4 on them in the heavy and indisputably tyrannical way you are doing? Is it really necessary to do that? If you meant it when you said they were going to go along with this scheme voluntarily, then you don't need the powers granted under section 4. If you did not mean it, then you should have been a little more candid in the first place.

Section 4 is the heavy hand of Social Credit. It will be brought down on the backs of local government, who may decide that the political instructions you give the inspector of municipalities are not acceptable; that the political advice you give the inspector of municipalities will not be permitted to interfere with the decision in favour of local improvements at a local level. Sure enough, to back up these threats you impose section 4 on them which, as you say, is going to exercise the powers granted previously under the Municipal Act and specifically under section 393.

If you had confidence that local government wanted to do your bidding, you wouldn't need this power. If you lack that confidence, you have to admit that your earlier argument was false. It can only be one or the other situation; both cannot occur simultaneously. If you do have confidence, there is no reason why you should threaten local government which might not agree with the political decision you will make through your employee, the inspector of municipalities, as to what does or does not constitute an acceptable local improvement. If they don't accept it they should have the opportunity to fight it out with the people who have to pay the shot. That's the local electors, and not you. If they don't accept it, why on earth are you threatening the mayors with a personal fine of twice the amount of the politically unacceptable expenditure — unacceptable, that is, to the Social Credit coalition of the day.

This is an extraordinarily heavy penalty you propose. It is a totally unnecessary and absolutely tyrannical step you have taken here. The provisions for noncompliance in this bill are absolutely overdone, overstated and unnecessary. You have no business trying to impose, in such a stupid and heavy-handed way, your view of what is or isn't politically acceptable. Municipalities know that Mr. Woodward takes orders politically. Of course he does. He's a public servant. He's supposed to. He will be taking orders from the Socred Minister of Municipal Affairs as to what does or does not constitute an allowable expense. If the Socred Minister of Municipal Affairs gives orders that some local municipality may not spend extra thousands for police or fire protection, and they decide to do it anyway in the interests of the safety of their citizens, then under the provisions of section 4 the mayor is now liable to a fine in the amount of twice that spent on better fire and police protection. That is a darned disgrace. You have no business threatening local government that way. You have no business asking for those powers.

You say that they wish to enter your program of so-called restraint voluntarily. Now you have turned around and admitted that you're either telling a fib or are asking for powers you should not have under this section called noncompliance. This section is loathsome. The implications of it are completely unacceptable. When the inspector of municipalities takes political direction from the minister, as he must, and local government says that no, that political instruction is not acceptable because they need the extra fire and police protection or whatever other local improvement they wish to pay for, the fact is that the mayor can now be personally threatened with and found liable to pay a fine of twice what the actual expenditure was.

Again, hypothetically, if a local mayor decided to spend another $50,000 to hire another police officer or fire officer, or to obtain more equipment for fire or police protection, and the political instructions given by the Socred Minister of Municipal Affairs said, "No, we won't go for that," the mayor is then liable to an extraordinary fine. That's completely unacceptable. There is no justification for that. This section should not pass.

Section 4 approved.

On section 5.

MR. HOWARD: I have one brief word on section 5. Note that it emphasizes the point that the minister's decisions are directives and are not regulations. They are not a regulation under the Regulation Act. They do not have to be published or filed with the registrar of regulations under the Regulation Act, and are not available to the general public. They can be indicated to a municipality by a telephone call, sign language or a letter. This is the type of legislation that I think probably flows from an earlier association that the minister had in 1968, when he and Pierre Elliott Trudeau ran an advertisement together. It's typical Liberal legislation: authoritarian, controlling and dominating. If there is any indication that Pierre Trudeau has got an influence on this cabinet, it's here in section 5.

That's another reason to oppose the bill. What the minister is doing is exactly the same thing that Benito Mussolini did in the 1920s and 1930s when Mussolini said: "Look, you don't have to understand what I'm doing or what I'm going to do. All I ask you to do is trust me." The minister has not given

[ Page 7718 ]

any indication that that trust can be reposited in him or his cabinet, especially in light of the Surrey Leader ad of June 20, 1968. Mr. Trudeau would be proud of the minister.

MR. BARBER: I wonder what excuse the minister could offer for avoiding the requirements for publication as found under the Regulation Act. The section we're now debating says that he may issue directives. The Regulation Act talks about public disclosure, and requires it. This sneaky provision for issuing directives which need not be published, in all the ways that my colleague from Skeena just outlined, clearly is an attempt to evade the full light of public knowledge on all of these matters.

I ask the minister to explain why he refuses to be held accountable under the provisions of the Regulation Act.

I ask the minister again why he refuses to be held accountable under the provisions of the Regulation Act.

I ask the minister a third time: why does he refuse to be held accountable under the provisions of the Regulation Act of British Columbia.

MR. CHAIRMAN: Shall section 5 pass?

MR. BARBER: Section 5, which we are now debating, reads: "The exercise of a power under section 2 or 3 is not a regulation within the meaning of the Regulation Act." The Regulation Act provides for certain forms of public disclosure and certain important forms of accountability. The Regulation Act is the fundamental instrument through which this government, under the order-in-counciI tradition, makes decisions when the House does not sit. The order-in-council tradition was reformed and amended by the first New Democrat government of this province in regard to better and fuller public disclosure of its contents.

MR. KEMPF: It was the only one that ever existed or ever will.

MR. BARBER: Go back to Moscow.

Mr. Chairman, the tradition of publishing orders-in-council and the full disclosure involved was enormously improved by the first New Democrat administration. One of the advantages of doing so was that ministers thereafter were not entitled to maintain within the secrecy of their offices decisions they had made and for which they were otherwise not accountable. Rather they had to be published, openly and clearly. Mr. Barrett's administration started that, and that is to his credit.

This minister wishes to avoid the provisions of the Regulation Act. He wishes to avoid the requirements for full public disclosure. He wishes to hide behind the secretive authority that section 5 will give him. It says that a directive under this act is not a regulation. Well, it has all the power of a regulation, but it misses one of the obligations. That obligation is full disclosure. It is not found within this act. That obligation is specifically avoided under section 5.

I ask the minister again: what explanation can he offer for his refusal to be governed by the public-disclosure requirements of the Regulation Act? Why is he trying to avoid the requirements of the Regulation Act? It applies to most other ministers, most of the time. Why does he wish to be exempt from it?

HON. MR. VANDER ZALM: Mr. Chairman, the member obviously is well aware that there is only one directive, and that is with respect to operating expenditures. Such directives can only be made after we are able to determine such factors as the inflation rate, after consultation with municipalities, regional districts, and particularly with the UBCM. This can best be handled with directives.

MR. BARBER: The problem with these directives is that they are not required to be disclosed to the general public. There is no requirement in this statute that these directives in whole or in part be disclosed to the general public.

HON. MR. VANDER ZALM: How ridiculous!

MR. BARBER: It is not ridiculous. It is a requirement of disclosure that you are trying to avoid.

HON. MR. VANDER ZALM: How can you direct a limitation and not have the public aware of it?

MR. BARBER: How can you direct a limitation and not have a public statement of it? Easy. The way you guys have done before. Let me illustrate. Under this bill the minister could be permitted to issue a directive, which need not be made public at any stage, that a municipality would agree to hold and receive in camera. It may well relate to a particular property expropriation. It may relate to a particular public works proposal. It may relate to a settlement with given employees, an arbitrated settlement that was imposed on them.

Interjection.

MR. BARBER: We have no faith in the minister; he's a Socred. And precisely because of that, the local council, which for all we know may be 100 percent of the Socred farm team, all Socreds....

Interjection.

MR. BARBER: I'm a New Democrat and proud of it. I've never been a Liberal, never been a Tory.

MR. CHAIRMAN: Order, please. On section 5, hon. member.

MR. RITCHIE: On a point of order, I am just wondering if it is correct to use the description "guys" when addressing a member of this House. The member just sitting down frequently uses that description.

MR. CHAIRMAN: It is not accepted as a parliamentary term, hon. member.

MR. BARBER: What was that, Mr. Chairman? What kind of point of order is that? That's completely absurd. Is that the best you can offer to this debate? Is that it?

MR. CHAIRMAN: Order, please. It is now the member's responsibility to address himself to the strict relevance of section 5.

[ Page 7719 ]

MR. BARBER: It's more obvious in some cases than others why certain members are not in the cabinet, even that cabinet, if that's the best you can contribute.

MR. CHAIRMAN: Hon. member, I am advising you that we are on section 5.

MR. BARBER: There may in fact be a circumstance wherein a municipal council may agree to receive and hold in camera a directive from this minister. There is ample evidence that, historically, certain councils around this province have always been controlled by Social Credit. They've always been Socred farm teams, beginning to end.

MR. KEMPF: That's absolute nonsense and you know it. They're not partisan at all.

MR. BARBER: Says the former mayor of Houston. Non-partisan? You were a Socred when you were the mayor of Houston, and you pretend to be non-partisan? What rubbish!

Local government has, for the last 25 years, largely been the property of Social Credit and has been used by it as their farm team. It's not out of the question that a Socred farm team council could agree to receive and hold in camera a directive issued under section 5 of this bill. Section 5 does not require the municipality to publish the directive; it does not require the minister to publish the directive. It could in fact be related, as I said before, to questions of property acquisition, public improvements, local works improvements of any order, settlements with employees, with managerial employees, or arbitrated settlements.

The simple fact is that this minister, for whatever sneaky purpose, has decided to avoid the requirements for full public disclosure as otherwise obtained under the Regulation Act. There is no good reason, no legitimate reason, why he should do that. If this government had any faith in local government they wouldn't pass this bill in the first place; but they had no such faith, so therefore they impose what they call municipal expenditure restraint. That being the case, this is another reason why no rational and legitimate organization concerned with local government could possibly accept this provision.

If you have nothing to fear, you have nothing to hide. If you have nothing to hide, you should not be trying to avoid the requirements of the Regulation Act. If you have nothing to hide, you should announce today that you will publish all of those directives; that you will in fact be bound by the Regulation Act and this section will be withdrawn. What have you got to hide? What are you trying to hide? Why do you wish the power — one that only certain other right-wing groups have asked for or seized from time to time — to issue directives? Directives, as you call them; directives, as you will issue them, without disclosure, without the requirement for disclosure at any level and in fact without appeal. This is an unacceptable commitment you are making to doing things in secret and without full public disclosure, as would otherwise be required by the Regulation Act.

The explanations you've offered are no better than excuses; and the excuses you've offered are completely unacceptable. The Regulation Act should apply if you wish to exercise these powers. If you propose to exercise these powers, do it in public and under the provisions of the Regulation Act. Don't try to sneak around it, as section 5 will allow you to do.

HON. MR. VANDER ZALM: On behalf of municipal councils, I think I should state that there are those in the House who take exception to labelling councils politically, be it Social Credit, NDP or otherwise. I think the majority of councils are non-political, in the sense of party politics. I think that's been shown time and time again.

The member also appeared to indicate that somehow this section was to accommodate, as he termed it, Social Credit councils who would hold meetings in camera and receive this information. Councils are well aware what matters might or might not be considered in camera. We have very little problem with respect to that. If you want to be labelling again, the only time — and the last time — that I can recall a complaint was when Burnaby had a BCA council that was considered by some to be NDP. There was a complaint about their dealing in camera with matters that they shouldn't have dealt with. I didn't label that action by that council on account of its being so-called NDP, because I didn't see it that way, Mr. Member. I would hope you would be a little more broad-minded in your views of municipal councils across this province and treat them with some respect.

MR. SKELLY: Mr. Chairman, this is the section of this legislation that disturbs me. It seems, as years go by, this government has more and more been eliminating and eroding the rule of law, such as it was, that prevailed in this province for many years.

When we came to office we did change the Regulation Act, because at that time it was possible for a regulation to come down, never to be published, or never to be available to the public. Yet people could be charged and fined and sent to jail under a regulation that they had no access to. There was no way to be aware of it, because there was no requirement that a regulation be published. We felt that in fairness, and to improve the freedom and the rule of law in this province, at least somebody who is going to face conviction, fine and imprisonment would have the right to know that the law was written down somewhere and he could have access to it before proceedings could be taken against him. It is simple fairness. We have a section in this legislation which is totally unfair in the way it has been administered. We have a section in this legislation that says: "In exercising the powers under section 2 and 3 of this legislation, an exercise of power is not a regulation within the meaning of the Regulation Act." So how does the minister communicate an order to the municipalities around the province? This is the danger. Does he go on a free-time broadcast on television, a TV extravaganza? Is that to be considered an order? Is an exercise of the powers of the minister under this act to be considered an order to a municipality? How are the municipalities to understand or receive that order? Is he going to go on radio and make an announcement to the municipalities that they must cut back on operating expenses by a certain amount? Is he going to publish it in the National Enquirer or the B.C. equivalent, the B.C. Government News? Just how is he going to convey this order and the exercise of these powers to the municipalities?

This is totally totalitarian legislation in the extreme. As this government is progressing more and more towards a totalitarian form of legislation in this province we are becoming more and more concerned. People can be fined and sent to jail on the exercise of power under this legislation by the minister, and yet there is no prescription in this legislation of how that power is to be exercised, how orders are to be made

[ Page 7720 ]

public or how those orders are to be conveyed and communicated to municipalities. We could have civic officials going to jail for orders that they haven't received, weren't aware applied to them or weren't aware applied to their municipality. This is dangerous, totalitarian legislation in the extreme. For this section alone, Social Credit members as well as people on this side of the House should be voting against this legislation and asking the minister to withdraw it in total and bring something into this House that is more in line with the free parliamentary traditions that we in this Legislature are used to and that we were elected by our constituents to defend.

I am absolutely opposed to this type of legislation. It is the worst legislation I've seen brought into this House in many a year.

MR. CHAIRMAN: Hon. member, again I must ask, if members are going to stand, that they do so earlier. Granted it was somewhat close.

MR. BARBER: The minister has yet to answer the question as to why he proposes to avoid the requirements of the Regulation Act. I put that question again now.

MR. CHAIRMAN: Shall section 5 pass?

MR. BARBER: This is the fifth or sixth time I've asked. I'll do it again until we get an answer. Why does the minister propose to avoid the requirements of the Regulation Act? Those are requirements for the formal issuing of orders, the full publication of those orders and the full public knowledge of their content. Why does the minister wish to avoid the requirements of the Regulation Act?

Mr. Chairman, let me ask you a question. Why do you think the minister wishes to avoid the requirements of the Regulation Act? Could it be that he has something to hide? If he has nothing to hide, why should he bother to build himself a mechanism that would allow him to hide? The minister, chewing gum in his usual arrogant way...

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

MR. BARBER: ...appears to think he is entitled to make decisions in private without the requirement of disclosure. As my colleague for Alberni has so eloquently said, it was one of the important reforms of our administration that the Regulation Act was changed to require the full public disclosure of all orders-in-council. This was a very important step forward for democracy in British Columbia. It was a step that had been denied by the previous Social Credit government. It is a step that is being avoided by the current Social Credit coalition. It is a step that should not be avoided under the provisions of this or any other act, so I ask the minister again to explain to us and explain to local government why he refuses to be held accountable in the provisions for public disclosure, as found in the Regulation Act.

HON. MR. VANDER ZALM: Mr. Chairman, certainly I don't need to defend this government's accountable approach with respect to our dealings with municipalities. As has been pointed out during this debate again and again, and as I point out once more, the only time that we had a particular example of ignoring municipal wishes was when a government — I won't say which one, but it was about '73 or '74, so perhaps from that you might determine what its stripe was — determined that they could somehow move in on people in Kamloops, Nanaimo and Kelowna and force them to amalgamate against their wishes or without them having any say about the way in which this might be brought about. So we certainly have no apologies to make for our ways and our efforts in dealing with municipalities. We've had a good rapport, and they know well that whenever we advise them on a particular issue, be it a policy question, a change of bylaw or change of law, they're well advised in plenty in advance and there's no complaint.

Again, in this particular instance we're looking at one directive only, and that is with respect to the operating expenditure for the year 1983-84 — '83 in particular. This can be well handled, as it was this year, without any complaints from the municipalities affected. So it's not a matter of avoiding something; it's a matter of dealing with it as we did in '82, when the percentage was established and they were so advised.

MR. BARBER: The information provided by the minister is false and misleading and misses the point altogether.

MR. CHAIRMAN: Order, please. I must ask the member to withdraw that specific statement.

MR. BARBER: I didn't say that the minister had misled the House, I said the information he provided was false and misleading. I'm not commenting on his motives.

MR. CHAIRMAN: Order, please. I must instruct the member to withdraw the statement in the interests of parliamentary procedure and dictates. Hon. member, please....

MR. BARBER: In the interest of getting along with what you wish, Mr. Chairman, I withdraw that and simply say that the information provided by the minister is totally inaccurate on every count — totally, completely and predictably inaccurate. However, what the minister has also done is avoid and evade the answer to the simple question about the basically totalitarian impulses of the coalition of right-wingers, millionaires and car dealers opposite that was made most eloquently by my colleague from Alberni.

MR. CHAIRMAN: Order, please, hon. member. Again I must inform the member that we are dealing with section 5. I don't know how many times I have brought to the members' attention that we must deal strictly with the section. Personal allusions are totally out of order at any time. Again, the member must remember that he must make his debate strictly relevant to section 5.

MR. BARBER: Which allows the minister to avoid the requirements of the Regulation Act, the motivation for which, in our judgment, is political, suspect and wrong.

Section 5 approved.

Title approved.

HON. MR. VANDER ZALM: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

[ Page 7721 ]

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 32, Municipal Expenditure Restraint Act, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 40, Mr. Speaker.

HYDRO AND POWER AUTHORITY
AMENDMENT ACT, 1982

HON. MR. McCLELLAND: Mr. Speaker, in moving second reading, I would just like to say that the major thrust of this bill is that B.C. Hydro be given some increased borrowing power, as Hydro continues to develop new power sources in response to increased consumer demand and continues expansion in hydroelectric generation. More importantly perhaps, gas services require significant capital to ensure their success. Projects and operations requiring funding during the fiscal year will require approximately $1.18 billion; that would be met by the $1.1 billion which is being approved here today. Also, the bill would pick up the shortfall of $200 million which was recently borrowed on the European market and $533 million worth of borrowing limits still remaining to Hydro under the existing statutory borrowing limit. The proposed increase in the borrowing limit would also allow approximately $333 million as a cushion to help guarantee the continued orderly operation of Hydro's affairs in the development of their energy projects.

I'd like to remind the members of the House, when considering this increase, of some significant things. B.C. Hydro's borrowings are done in conjunction with the government of the province. They must be authorized by cabinet. If approved, they carry the provincial guarantee. In addition, because of the province's triple A credit rating, Hydro is able to negotiate more favourable borrowing terms when it goes to the capital markets. The debt of B.C. Hydro is also backed by revenue-producing assets. In total, this debt represents approximately 5 percent of gross provincial product, which as a ratio is lower today than it was 20 years ago. Furthermore, approximately 2 percent of the principal amount of the debt is deposited annually to the sinking funds from Hydro's general revenue to ensure the orderly retirement of these debts. By subscribing to this financial principle, future generations of British Columbians are assured fully paid power sources.

In the news the last day or so there has been information about a renewed forecast put forward by B.C. Hydro. I know the members will ask the question anyway. It will be reflected in the borrowing needs of Hydro, down from about S1.8 billion to $1.4 billion. Of course, should Hydro either not need that total amount or for some reason not consider the market to be fully favourable at that time, they will not borrow the full amount. With those few words, I move second reading.

MR. D'ARCY: Mr. Speaker, the opposition will be opposing this increased debt burden on the province of British Columbia. It won't be the first time this has been said, but we'll say it again. Crown corporations are a way that governments use to hide deficit spending. The fact that the minister knows that is obvious from the fact that he just now in his remarks misrepresented to the House, Mr. Speaker — if those words are in order — the contributions that Hydro makes to its own sinking fund. He said: ...approximately 2 percent of its debt increase." I note that, according to Hydro's own financial statement which he tabled just the other day, last year Hydro borrowed $1.1 billion more than in the previous year. but they contributed only $75 million to a sinking fund. That does not amount to anything like 2 percent. In fact, Hydro's sinking-fund contributions last year accounted for something like .6 percent of its total indebtedness, or roughly a third or less of what the minister maintained it was.

B.C. Hydro rates in this province have increased, just since 1970, more than 300 percent — rates to individuals, businesses and industry. B.C. Hydro's cost of operation in terms of wages, salaries, maintenance and replacements of plant facilities has not increased 300 percent. What has caused that increase has been the debt-interest load. B.C. Hydro — in spite of what the minister said and what previous ministers have said — does not borrow today to provide facilities to be paid off tomorrow. B.C. Hydro does not retire its debt. What happens when a bond issue matures with one financial agency? B.C. Hydro then goes and refinances it with another financial agency. They don't pay off their debt. What has happened in the past year or so has been that we've all been affected by higher interest rates, but bond issues which were originally taken out by the predecessors of B.C. Hydro — the B.C. Power Commission or B.C. Electric Co. — have been maturing. They have had to be paid off, and bonds that were previously carrying rates of 5, 6 or 7 percent have been replaced by bonds carrying interest rates of 15 or 16 percent. This has impacted directly on the people of B.C. and on the private sector of industry in B.C., whose interest, the government says, they have at heart. Maybe they used to have it at heart, but they haven't in recent years, certainly not under this administration. Many people in industry in this province have said to me that they don't believe in the privatization of public debt. That is what we have been getting from this minister and this government in B.C. Hydro borrowing.

Spokesmen for the government, I am sure, are going to say that we need the jobs, we need the construction. It has been demonstrated by numerous financial experts and economists — whether they have a right-wing or left-wing political persuasion or no political persuasion at all — that the capital that has been going into B.C. Hydro projects could be spent in far more job-intensive ways on almost any expenditure the government should desire. We could be protecting our energy resources and energy availability at the same time.

The Hydro people themselves have pointed out — as has been discussed earlier today — that they are going to be putting their rates up by as much as 50 percent over the next year, largely because of government action. That means that there is going to be a further depression of demand for hydroelectric power. It is not only going to have an effect on the economy of B.C., already hard hit, but it is also going to have an effect on how much electrical energy industry, businesses and private individuals are going to buy. We are all resistant, at some point, to price increases. I think the economists have a nice phrase for it. They call it elasticity of demand. The elasticity of electrical-power demand in British Columbia has been stretched very thin.

I don't believe that the province of B.C. and the individuals of B.C. should carry this increasing debt burden for electrical-energy transmission and generation. I would point

[ Page 7722 ]

out that if we look at the revenue B.C. Hydro gets from B.C. sales of electrical energy alone, we find that considerably more than 50 cents on every dollar collected is simply going for interest. The fact remains that the debt of B.C. Hydro is almost entirely made up of facilities for electrical generation and transmission. It does not come from the gas division or the rail division, and it did not come from the transit division when B.C. Hydro had responsibility for that. B.C. Hydro debt is almost entirely made up of electrical-transmission and -generation facilities debt, started initially by the terrible error that the Social Credit government made on the Columbia River Treaty.

It has been pointed out, by economic experts outside this House and outside the New Democratic Party, that if we simply began today to negotiate with Bonneville Power for the recapture of even half of the downstream electrical benefits of the Columbia River Treaty, when the initial 30 years of each increment expire, we could provide ourselves with substantially more power in B.C. than we would obtain from both Hat Creek and the Site C proposals. We would do so at a considerable saving to ourselves, resulting in much lower costs of electricity to the economy of British Columbia, and without the environmental problems associated with those two megaprojects. It is simply not good business for the government of B.C. at this time to put the public of B.C. into the incredibly straightjacketed debt position which they wish to do with this borrowing. The public of B.C. is never happy with government borrowing for any purpose — and they are correct, Mr. Speaker.

In the state of an economy such as we have today, borrowing, when there is no demonstrated need for it, is straight economic insanity, straight political irresponsibility. When we have that electrical energy available to us simply by starting on negotiations which are already guaranteed to us under the Columbia River Treaty, it makes no sense whatsoever. We in the opposition have opposed increases in Hydro borrowing in the past. We will oppose this increase of $1.1 billion in Hydro borrowing even more emphatically than we have opposed the increases in the past.

MR. KING: Mr. Speaker, I can't let the opportunity go by without commenting very briefly on my opposition to increased borrowing power for B.C. Hydro as well. The public is not persuaded that B.C. Hydro is accountable to an extent merely adequate to public priorities. On the contrary, they are convinced that B.C. Hydro is an entity out of control, a bureaucratic nightmare with unacceptable powers — powers to deprive people of their private property by expropriation, powers to set the objectives for power developments and to override any and all private individual rights of ownership, and other rights in the process. While most people in the Legislature would, I think, agree that there is a need for powers of expropriation where the overriding public good is involved, we are certainly not persuaded that Hydro has exerted their powers of expropriation in a sensitive fashion or with a demonstrable display of overriding public interest. Rather, in my view, they have flaunted the arbitrary power of expropriation they have to the detriment of the rights of ownership that every citizen of the province of British Columbia should be able to enjoy.

To simply keep on doling out additional moneys to this Crown corporation which the taxpayers of the province of British Columbia guarantee, without any indication from the government that this agency is being brought under some kind of control and some kind of accountability to the public, is unacceptable. I want to say, Mr. Speaker, that the taxpayers of British Columbia do not support this kind of debt load for that public Crown corporation. I think many of us have come to observe over the years that corporations, whether they be public or private — it makes little difference if they are arbitrary and inefficient; if they are insensitive to the public interest and more concerned with perpetuating their own positions and their own objectives, despite what the best public policy may be....

This is a fantastic increase in borrowing power, an increase from $7.2 billion up to $8.3 billion — a $1.1 billion increase in authorized borrowing power this year. And this is a government that trades on the principle that they believe in wise financial management, that they believe the budget should be balanced and the province debt-free. Well, Mr. Speaker, whom are they trying to kid? The taxpayers of the province of British Columbia are accountable and responsible for every dollar of this $8.3 billion; it's guaranteed by the government of the province of British Columbia through the taxpayers. The government is simply transferring the responsibility to a convenient Crown corporation.

I've been highly critical of B.C. Hydro, Mr. Speaker, because my particular area of the province has experienced tremendous disruption as a result of that agency. Again, I recognize that there have to be power developments, and so does the public, but the public wants some opportunity to have a voice in what the priorities and the directions shall be. They receive none through B.C. Hydro. The hearings in the past have been a charade. It's been a fait accompli once Hydro has embarked upon a certain direction and the public had little or no opportunity to affect the policies. Rather, as a result my area and the area of my colleague from Rossland-Trail (Mr. D'Arcy) have undergone major changes in the environment and the lifestyle and a whole variety of matters that affected the citizens of that area.

Perhaps these things, like some of the Columbia developments, were necessary. We wouldn't have agreed to approach it the way this government and their Crown agency did. The main problem is that the almost unlimited financial borrowing power of the government extends to Hydro. The almost unlimited autocratic power to override the rights of individual citizens is the thing that people object to so strenuously. Certainly I have had my share of frustration, Mr. Speaker, in trying to deal with B.C. Hydro to find redress for citizens who have been adversely affected by their developments. In general I have a pretty arbitrary, authoritarian reaction from that Crown agency. All they do is ask the government for approval of their borrowing power and they go blithely ahead with whatever program — with government support, of course. They're not accountable to anyone.

Personally, I resent being asked to vote ever-increasing and enormous borrowing authority to that agency until I see some legislation, some action which is going to cut B.C. Hydro as a Crown corporation down to size and make it accountable in a real way to the people of British Columbia. We know we need power development in this province, but is this the most appropriate way to go? There should be an avenue, a mechanism for the citizens of British Columbia to have access to all kinds of information and to have a shared role in determining the directions that we wish to take. Power development has a major impact on the quality of life, on the environment and certainly on the lifestyles of people in many of the rural parts of British Columbia. Until I see some

[ Page 7723 ]

indication that the government is prepared to start making this agency accountable and sensitive to public preferences, there is certainly no way that I am in favour of voting this kind of enormous borrowing power to that Crown agency.

MR. LEA: I think energy — energy projections, energy needs into the future — is something that we all feel a little uncomfortable with in that we know we're in trouble and we're all searching for a direction to try to achieve some self-sufficiency in the province. But I think it's worth looking at B.C. Hydro in light of how it fits into the rest of our economy and where it fits into the scale of borrowing.

There are only three other agencies that borrow more than B.C. Hydro. They are Hydro-Quebec, who have an export policy for energy, the World Bank and the International Monetary Fund. They're the only three that borrow more money than our energy agency. I think that would stagger the mind unless you listen to the rationale from Mr. Bonner, who met with our caucus.

HON. MR. McCLELLAND: What about Ontario Hydro?

MR. LEA: Ontario is behind us — big, but behind us.

When we met with Mr. Bonner, he told us — it appeared to be proudly — how much capital expenditure Hydro had been making. I think at that time he classified it at number five. Just from his manner he indicated that they'd like to be higher; they'd like to be number one. It's the corporate thinking that has no place in a Crown agency, or we see the kind of debt load that we're carrying for B.C. Hydro.

We're all searching for the answer, and I don't think there's one side of the House that has a monopoly on the answer to our energy needs and how we're going to supply them. When we met with Mr. Bonner — and I would assume that he's also putting forward the government's policy — he said: "Here are the projections of our own energy needs to the year 2000 as we see it through B.C. Hydro." There's some question as to those projections, but let's take it on face value and say they're as close as anybody else.

He said: "Here are the energy needs that we have. Instead of waiting until these needs come on, why don't we build them now and export the energy to the United States." His words were: "It's like a licence to print money." I am really afraid of that policy. I think when the minister is closing this debate I, for one, would be interested in hearing if that is also the government's policy, that we build these energy producers now. Until we have the need for the energy we will export it on what he called "an interruptible basis" to the United States — as our needs come on we pull it back. It sounds good, but I don't think it's dealing with political reality. Once you start supplying energy to another geographic jurisdiction, industry grows up around that energy, commerce grows up around the industry, and of course the residential uses of the communities that supply both of those two segments of the economy grow, and it becomes politically impossible to withdraw that energy when it comes time. We are seeing that with some of the pacts we have signed in the past — for example, the Columbia River Treaty. I don't think it is politically feasible to go down that route. I would very much like to hear the minister's view on the scenario that Mr. Bonner put forward to us.

The other thing that I've been told by people in whom I have some trust is that we waste approximately 50 percent of the energy we produce now, although not purposely. Our biggest user of energy is our industrial plant, and because of outdated equipment, we have a kind of wastage going on that could be stopped by replacing that equipment with more conserver-oriented equipment. Maybe we would be better off putting our dollars into that kind of program and recapturing some of that energy we waste, as opposed to ruining valleys through hydroelectric projects or causing acid rain through coal energy production.

I am told that it is more job-producing to do it that way. You can produce more jobs by going for a recapture program, I am told that it takes those jobs and distributes them more evenly through our economy. In other words, if you go for that kind of a program there are going to be people working in the Peace River; the lower mainland and the Okanagan. It produces more jobs and distributes them more evenly throughout our jurisdiction. You get a quicker and better return on your dollar. Down the road it makes a heck of a lot more economic sense to go for a recapture program in the foreseeable future than it does to bring new energy resources onstream. I would like the minister to comment on that. I think those are items we can all think of, as legislators; we can work together on trying to solve some of those problems. They affect us all the same.

The other thing, as a lay person, that I look at that leaves me in a little bit of a quandary, is that we are talking about taking natural gas by pipeline to the coast — to tidewater — liquefying it, putting it on vessels and shipping it to Japan. They, in turn, are going use a great deal of that gas to create energy in Japan. When you look at that, you say: "For Japan's energy needs we're going to take natural gas and ship it to Japan. For our own needs we're going to dam the Stikine and the Liard." Isn't something wrong? There may be some academic answer for that, but it sort of evades me. I don't see why, for our own needs, we dam our salmon-producing rivers, causing problems from climate to lost forest land and lost agricultural land.

Maybe we're just going down the wrong road. As a Legislature — not as a government and an opposition — we'd better start addressing some of these plans that are underway. It just seems to me that we have a tendency — especially governments, regardless of stripe — to get sucked in by the bureaucrats. They come to you with all their academic planning, and we're afraid to challenge it sometimes and say: "Go back to the drawing board. In principle we don't agree with you. Here is the principle we agree with. Go back and bring us some technical information to see if our idea has any merit." I think that only too often the bureaucracy and the civil servants of Crown agencies and the government suck the government and legislators in.

Rather than having a strictly partisan debate on this, I think we would be better served if we actually talked about energy and the way we are going. I have some real doubts as to whether we are going the right way. With those doubts I would find it very difficult to vote for more money for a direction that I am not exactly sure we should be going in. I don't think there's anybody here, as a legislator, who has any better ideas than I do. It just seems that we'd be stupid to go in that direction and keep pouring more money into B.C. Hydro — more and more debt — when it may not be the way to go.

To sum up, I'd like to know why we're going to ship natural gas to Japan for their energy needs and dam our rivers for ours. and why we're going to export energy to the United States on an interruptible basis when, in fact, politically I

[ Page 7724 ]

don't think we can do it. What are the government's views on — instead of bringing on a new energy supply — going on a recapture program of the energy we produce now and waste? I think those are three questions we should all apply ourselves to.

MR. MUSSALLEM: I can hardly avoid debate on a subject that has come up almost every year since I've been in this Legislature. That's been a considerable number of years now. I well remember — and the principle of the bill includes — the policy of generation of electricity by B.C. Hydro, especially by damming rivers for hydroelectric power. It comes to my mind that the policy must be maintained. Energy is a vital need of mankind. It's a vital need of British Columbia. When energy is available from a natural or renewable source, it must be utilized to the full.

The hon. members object to the additional borrowing of B.C. Hydro. I'm the one who would object to borrowing from anybody for anything, but Hydro borrows for capital investment. Capital investment is required to develop the tremendous power resources of British Columbia. The resources are there. They are available and are needed for an expanding province. I well remember the years 1972-75, when the hon. members who have just spoken were government. The borrowing went on just the same, although not as great — the size of dollars was smaller then. But for those days in 1972-75, they were large dollars indeed. Unless British Columbia stops expanding and fails to meet the demands of its people, Hydro will have to borrow money for capital investments, not for operating expenditures.

The debate that went on in the sixties regarding the Peace and Columbia Rivers — the two-river policy — was emblematic of what we're doing today. It was said then, by the same party, that it was a totally unnecessary thing, and that British Columbia did not need the power. They certainly did not need the power for that day, but they need the power for today. British Columbia is not at this time able to supply the demands of its own people. Even with Hydro's tremendous expansion that has gone on to the present time, Hydro barely meets the demands of the people of British Columbia. If we had not built those projects in those days, where would we be now? We would not be the British Columbia we are. We would not have the energy resources that are at our command.

The hon. opposition says: "Stop Hydro." Of course the scene changes. It's not like power from coal or nuclear power — which we'll never have in this province — because you can fix the amount of power that's obtained. But hydro power is a different thing. With the heavy snowfall we've just had in British Columbia, we'll have considerably more hydro power than we need. But we don't always get this power generation.

Mr. Speaker, I'm now receiving the assistance of the hon. member for Shuswap-Revelstoke (Mr. King). He does this occasionally. He feels that if he sits there and looks at me hard enough I will get some new ideas from his remarkable presence. However, it doesn't encourage me at this time, except to say that he's so wrong in his thinking. The thinking of that party is to hold back hydro and development. The idea of hydro is to look into the future. You must have the vision that British Columbia will expand to ten times of what it is today. British Columbia becoming greater than Ontario and Quebec is foreseeable for us today. To see that happening, the energy sources must be available. Energy sources are best available through hydro power; hydro power is the answer.

We have so many rivers to be dammed. They say: "We had better have the salmon than dam the rivers." Let me tell my hon. friend that damming the rivers doesn't stop the salmon. They stop the salmon running, but you get a new source of fish greater than ever before. Fishing in the great Williston Lake, formed by the W.A.C. Bennett Dam, is unbelievable in size and amounts. But nobody wants to fish, because there are too many of them. They're too far away for the markets, but that doesn't stop the production of fish. That dam is an asset to the people.

When Hydro needs to stop borrowing, when the needs of Hydro come to a standstill, that will say that British Columbia has come to a standstill. So long as British Columbia continues to progress, humanity must have energy. We must receive the capital funds to make it possible for Hydro to build greater dams and supply the energy for the future. You must look to the future. I'll tell you, hon. members — it's never been brought up in this debate, although it has been brought up before — it takes 10 to 12 years, maybe 13 to 14 years, to bring a power source on line. You must see into the future. It's not that we decide today and build tomorrow; it's a long way away. Fifty years from now the power we have today will seem minuscule to the demands of that day. We must produce that power now. The minister must authorize and this House must authorize this additional borrowing so that Hydro can keep pace, not exceed....

There are power companies in eastern Canada, Quebec and the Maritimes that are producing power for sale to the United States. This hydro system of ours is not producing power for sale to the United States, or to anybody else. It's producing for local consumption only. If there is excess, it's sold on a spot basis at very good prices. That can happen by the variation of rainfall and snowfall.

The urgency is to see into the future. I applaud this bill and I applaud the minister. Hydro must continue to build for the future, not for today, because we are looking down the line 13 or 14 years away. It is fortunate for us that with the Peace River and Columbia River policies we had the vision in those days to say that in 1982 we would not have enough power. We did it and we were stopped every step of the way by that party. What would British Columbia be today instead of being an expanding province, a high technology province? We would be still as we were then, the hewers of wood and the carriers of water. We are moving into the twentieth century — we have been for the last 25 years, except for three years that we stood still. We don't criticize them; we know they have a do-nothing policy. They should see that the generation of power is vital to our citizens and to the future of this province, and I urge them to for once see beyond today, see into the future and support this bill, which I applaud immensely.

MR. LAUK: Seldom does the man fulfil what the boy has promised. In the debates of the 1960s with respect to the two-river policy, we were promised that to develop hydroelectric energy to the extent that both those projects would have developed would create thereby enough reasonably priced energy to create a secondary industry, a manufacturing industry in this province that would provide jobs for future generations of British Columbians. I heard the hon. member make those promises. I heard W.A.C. Bennett make those promises. "Nothing is freer than free, my friend. Think of the future," he said.

[ Page 7725 ]

What we created, Mr. Speaker, is a monster god that all of its subjects have been feeding, bringing homage to and paying tithes to year after year — a new monster god, a god like Mammon. We fell on our knees, put greed on a pedestal and decided that there was a future for us as far as secondary manufacturing in this province was concerned. Year after year the high priests of that god come here and they ask us for more. Since this government was returned to office in 1976 — and they think it's funny — the debt for every man, woman and child in this province has doubled largely because of that monster God. It is insatiable. Now I fear that we're borrowing money to pay interest charges. Forty to fifty percent of every dollar that you pay for your hydro bill goes to pay interest and debt-servicing charges on the huge debt of that monster god. It is controlling our lives. It is stealing our future. It is a mortgage on the future generations of this province, and every year we bring in this act to feed it more. "I want more," says Hydro. We created this idol, this artificial god, and we fall down and worship it. We are its slaves, Mr. Speaker

Ten years ago, even eight years ago, we were told there was a way to start grinding down the power of B.C. Hydro, grinding down its control over our daily lives. They are not borrowing money for capital investment; they're keeping up a front for capital investment. They are desperately trying to create an artificial cash flow so that they can start paying off the debt, which they're not going to pay off because every year it increases the interest, and debt charges are loaded on the backs of ordinary British Columbians, and it's dragging us down to our knees. The promise of 20 years ago has not been fulfilled. It is an anchor, a millstone around our necks, and the people of British Columbia are paying dearly for it. We would be in a much better position had a more reasonable attitude been taken years ago, and it's still not too late to take that attitude now.

I want also to point out a few financial factors. A time of financial crisis in North America and in the west is not the time to be borrowing money. There are no specific plans that I can see for this borrowing on capital expenditure. Even if there were, this is a mistake. The government on the one hand calls upon the civil service and the people of British Columbia for restraint. Yet it makes no demands on its Crown corporation to show restraint. It's greed — insatiable greed. This monster that we've created is out of control. In other words, restraint for everybody except Hydro. Everybody will suffer and pull in their belts except Hydro. We all pay that price for creating that monster god. That's why the opposition is not going to support this bill this year.

HON. MR. McCLELLAND: It's interesting that the previous speaker talked about the way in which borrowing of Hydro has progressed over the years, and certainly over the last ten years. There isn't any doubt that that debt has progressed. It's progressed rapidly — including the years in which members of the NDP were government. Several of the people sitting there today, deploring the borrowing of B.C. Hydro, were just as responsible for the increase in borrowing. In fact, in the three short years in which those members were government, Hydro's borrowing more than doubled, from about $1.75 billion at the end of 1972 to over $3 billion at the end of 1975.

MR. LAUK: We're talking about $9 billion now. When is it going to stop?

HON. MR. McCLELLAND: That's right, Mr. Speaker. But I just point out that in 1974 the increased borrowing was over half a billion dollars in a single year at a time when the inflation rate was far less than it is today and of course wages and all other things were far less. In 1976, the borrowing increased by $750 million in one year. So it just depends which side of the House you're sitting on.

Let's get the thing into perspective. I think that hydroelectric power still is and will be for the foreseeable future the most efficient, the best, and the cheapest form of electric power that we can develop in this province, and the most reliable as well.

I'm not sure, but I thought I heard the member for Prince Rupert (Mr. Lea) advocate that we use natural gas to develop power in British Columbia. If that's his suggestion, I guess the earlier comment he made about acid rain should be thrown out. Because there is a severe environmental problem in using natural gas, far more than with hydroelectric power. In this province, we have only one thermoelectric power plant, and that's at Burrard Inlet. Hydro has declined to use that facility to any great extent because of the environmental problems. We do use the plant from time to time for peak periods when the demands on the rest of Hydro's facilities are heavy. I don't think the member would want us to go into a large-scale program of using natural gas to develop electric power, because I think there's a far better use for natural gas — both here and as a source of export revenue for the province of British Columbia.

The member for Prince Rupert makes a very good point in his comments about recapturing waste power. That's happening in a number of areas. The forest industry is the very best example. The forest industry is modernizing today. I remember when we first came out with our energy policy statement in 1980. There's a statement in there that points out that at that time wood wastes were generating about 17 percent of all the energy in British Columbia. Today, that's up to 21 or 22 percent. or somewhere in that neighbourhood, and improving all the time. Plants like Cominco with the $600 million or $700 million expansion and modernization project at Trail — much of it is designed for better energy efficiency to recapture some of the waste. Plants all over British Columbia are doing that now for a variety of reasons, mainly out of the necessity of prices, some of it out of the necessity to go off oil. I believe that as the problems with imported foreign oil are felt more in our society, those things will happen more and more. That's a form of energy which is important to us.

I'd like to clear up the export policy of Hydro and the government. They are both the same. They are simply this — and it is the policy that has been put forward to the National Energy Board by Hydro in applying for interruptible power which it can sell on the export market. We do not build for export; we build for our own needs, to a critical path. In heavy water years, like last year, when there is a surplus of electricity, we look for the best possible buyers for that electricity and sell it. Last year British Columbia happened to have a record year, because of the record snowpack and record rainfall, and we sold something like $200 million worth of electricity to the United States. The same conditions still prevail, but we don't have a market right now, because the northwestern United States, in particular, also had a good water year, and they now have a surplus of electricity. So those sales have pretty well come to a halt.

This province has only two firm buyers of hydroelectricity from B.C. Hydro, primarily as a result of our

[ Page 7726 ]

good-neighbour policy with Point Roberts in Washington state and with Hyder, Alaska; they both get their power from B.C. Hydro on a firm basis. The rest of the power is sold on the spot market at the best prices we can get at the time and on a fully interruptible basis. That is the present policy of the government. Some people, including some people in Hydro — and I wouldn't be surprised if there were some people in this room who do believe that policy should be changed, that you could build.... In fact, in testimony before the Site C hearings there were some people who suggested that maybe we should be building for the export of power and thereby helping to pay for facilities for the use of the people of B.C. But that isn't the policy of the government.

I was interested in the comments from the member for Shuswap-Revelstoke (Mr. King). I would think that he might want to change his mind about how he votes on this bill. He said he won't vote for the bill until we see some accountability built into Hydro. The first member for Vancouver Centre (Mr. Lauk) also referred to the way Hydro has gone out of control. I recognize that that has been a complaint for many years. As long as I've been in politics — that's about ten years now — we've heard that complaint every year; more so as the years go by, as Hydro is felt by more and more people as it expands its systems.

There has been accountability built into Hydro. We've still got a long way to go but at least we've begun. It's the first time that kind of thing has been done in British Columbia. For the first time in the history of this province — and I believe it's a first in the history of Canada — the British Columbia Utilities Commission was given direct responsibility for regulating the rates of British Columbia Hydro, a Crown corporation. I don't think there is another Crown corporation in Canada that is fully regulated, as B.C. Hydro now is.

You will know, Mr. Speaker, that the first rate hearing by the BCUC into the Hydro operation is underway now. It's a trying time for the new commission, and it's a trying time for Hydro, because neither of them has had to do it before. So in many ways they are feeling their way. We've already seen some direct results. A short time ago the British Columbia Utilities Commission awarded B.C. Hydro an interim rate increase, and I believe they made a couple of landmark moves which have never happened before. The first one was with regard to export revenues. The members will know that British Columbia Hydro has never included export revenues in its overall revenue forecast. They've used those revenues to reduce their debt burden. They have not put them into their rate-revenue calculations. For the first time the B.C. Utilities Commission said: "Hydro, that's not good enough. You must set up a rate-stabilization fund from those revenues. From now on those revenues must be used to give rate relief to the consumers of hydroelectricity in British Columbia." It has never happened before in the history of this province.

Also, the commission looked at Hydro and said: "We think you can do better. We think you can be more efficient." They ordered B.C. Hydro to trim 5 percent from their total operating revenues as an efficiency measure. As it turned out — and you may have read it in the paper the other day — Hydro has done even better than that. They've improved their efficiency, or whatever you want to call it, by more than 9 percent. That's the first time that has ever happened in this province. That's a degree of accountability which we've never before seen in British Columbia.

I might also say — just to remind everyone — that in that regulation it is the British Columbia Utilities Commission which makes the decisions, not the government of British Columbia. On some other issues the government is involved, but not in rate regulation, and not in the revenue-rate-expenditure scenario of looking into Hydro's operations.

There is one other one which will ensure — in the long term, certainly, and it's starting to pay off now — that there is a greater measure of control for Hydro and a greater opportunity for all of us to be involved in the Hydro operation and its accountability, and that is that for the first time in history Hydro now has a real board of directors. They never had a board of directors before — not in my memory at least — including the years in which there was an NDP government in British Columbia.

MR. LORIMER: I was the board of directors!

HON. MR. McCLELLAND: I know, and that's the problem, Mr. Speaker; that member was the board of directors of B.C. Hydro. But it's been true — and I'm not reflecting on any members past or present — that we really have had a sham board of directors in too many instances. We now have a true board of directors.

MR. SPEAKER: Order, please. The member for Omineca (Mr. Kempf) and the member for Shuswap-Revelstoke (Mr. King) will please come to order.

HON. MR. McCLELLAND: Mr. Speaker, not only do we have a board which is responsible for the day-to-day operations of British Columbia Hydro today, but one which was chosen very carefully to represent every region of British Columbia. We chose people from each of the communities which are most affected by British Columbia Hydro, and if people feel disaffected in their community.... They still have the opportunity of writing to me as the responsible minister or to one of the MLAs on either side of the House. They also have the added opportunity now of going to the local director on the board of Hydro and saying face to face: "Look, I want to get something fixed up. Can you help me?" That's an opportunity they've never had before; it's an opportunity that brings a province-wide perspective into the operation of B.C. Hydro, which we sure never had, Mr. Member for Shuswap-Revelstoke, when you were a minister.

Mr. Speaker, Hydro is far more accountable than it's ever been in the history of this province. And that's not at an end, because we're going to continue to make it more accountable.

Mr. Speaker, I just want to make one comment about the member for Rossland-Trail (Mr. D'Arcy). That member said that we use this kind of device — bringing this bill before the Legislature — to hide the debt of B.C. Hydro. Well, I can't think of a more open way to bring the debt of B.C. Hydro before the public of British Columbia than an open forum where everyone has the opportunity to see it, the real forum that should be used in British Columbia: the Legislature of British Columbia. Mr. Speaker, if those members are saying that this Legislature is not accountable....

MR. SKELLY: You're not accountable.

HON. MR. McCLELLAND: Mr. Speaker, I can't think of a better way to bring forward B.C. Hydro's borrowing needs than to bring them before this chamber, which, in my opinion, is the most important chamber in British Columbia.

I move second reading.

[ Page 7727 ]

Motion approved on the following division:

YEAS — 28

NAYS — 17

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

MR. NICOLSON: On a point of order, I draw Mr. Speaker's attention to page 374 of the eighteenth edition of Erskine May: "Voice and vote. Members must bear in mind that their opinion is collected from their voices in the House, and not merely by a division; and that if their voices and their, vote should be at variance, the voice will bind the vote." I won't go further into this, Mr. Speaker, but I draw your attention to the fact that during the reading of the list I heard the name "Mr. Phillips" read as voting with the yeas when in fact I heard him to vote with the noes. Having voted with the noes, I would ask that the tradition of the House.... He said: "No. Shut out the lights." That's what he said when the voice vote was called, and I'm sure that members in the House and the member himself will remember this. So I would ask that the record be corrected in order that his vote be properly recorded.

MR. SPEAKER: Thank you, hon. member. The Chair is bound, of course, by the standing vote, and it is in the standing where we count the actual number of heads. I think that I watched very carefully as all were counted and all were reported, and the vote stands as it was read for us.

HON. MR. PHILLIPS: On a point of order, I want it recorded that I voted for this bill. I don't want to shut out the lights, Mr. Speaker, and I think that member's antenna is overcharged if he heard something different.

MR. NICOLSON: On the point of order, to go further, it says: "A member therefore who gives his voice with the 'ayes' (or 'noes') when the Speaker takes the voices, is bound to vote with them...." This is Erskine May, and I would hope that members would not be so frivolous when the voice vote is being called.

MR. SPEAKER: I agree.

Bill 40, Hydro and Power Authority Amendment Act, 1982, referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Second reading of Bill 45, Mr. Speaker.

TRANSPO 86 CORPORATION
AMENDMENT ACT, 1982

HON. MR. HYNDMAN: Mr. Speaker, I take great pleasure in moving second reading of Bill 45, the Transpo 86 Corporation Amendment Act, 1982. This act is necessary to reflect certain organizational changes with respect to Expo 86 which flow from the very important negotiations between the provincial government and the federal government — between Premier Bennett and the federal government — which culminated in a major announcement of our Premier some weeks ago. Mr. Speaker, members will recall that pursuant to that announcement of the Premier, the provincial government has assumed full responsibility, particularly in the financial sense, for Expo 86. The federal government's participation in Expo 86 will now take place on the Pier B-C site, and Expo 86 will in fact consist of a major world exposition on two sites in Vancouver linked by the new ALRT line: firstly, the provincial government supervised and developed site within the B.C. Place site, and secondly, the federal government pavilion and portion of the Expo site at Pier B-C.

Essentially, Mr. Speaker, I will deal very broadly with the scope of the amendments, and members may have comments in committee. In making general comments about the bill, may I underline that apart from the benefit of Expo 86 in bringing a world-class exposition to the city of Vancouver, the province and the country, and in addition to Expo 86 being the only world-class exposition of its kind that will take place in Canada between now and the year 2000, the commencement of Expo 86 now means important new jobs and incomes for British Columbians. Expo 86 will generate a total of 15,000 man-years of new employment, much of that new employment being available to the 18-to-25-year-old age bracket, a very important segment of our job market.

Additionally, Expo 86 means the generation of an added new economic activity in this province in the amount of $1 billion over the next four years. All kinds of jobs and incomes will be created for British Columbians with that figure. Further, for the taxpayers of this province, there will be a generation of net tax revenue of $65 million, with which the provincial government can provide $65 million more of important people services.

The benefits of Expo 86, both when it is here and on the way to it, are self-evident. The bill before us here accomplishes these objectives: first of all, the name of the exposition is officially changed from Transpo 86 to Expo 86; secondly, the bill establishes the separate post of president of the Expo 86 Corporation, separate and distinct from the position of commissioner-general, which of course continues; thirdly, the board of directors of the Expo 86 Corporation is increased in number from 13 to 15. May I say that in the increase in board members we have also removed the specific provisos that the federal government and the city would necessarily be limited to two and three nominees. The broad reason for that is that at this point in time we do not have the details of the structuring and the membership of the directorship of the federal Crown corporation that will supervise and manage the

[ Page 7728 ]

federal portion of the Expo site. Until we know that, we want to have the flexibility to assure there is adequate representation from the city, the province and the federal governments and adequate inter-liaison between the two corporations. I want to ensure the city of Vancouver that city of Vancouver representation will continue at least at the level it has in the past.

Additionally, the legislation provides for an executive committee of the board of directors. The key reason for the reorganizational structuring of management to now include a president and an executive committee is quite simply that the tempo of preparation, the work and the planning for Expo 86 is now increasing. The commissioner-general, Mr. Patrick Reid, will increasingly be required to travel the world in the course of his international duties and obligations in terms of getting Expo ready and on line with the increased tempo we're going to need a chief executive officer on the domestic side here in Vancouver running the day-to-day aspects of getting the fair together and on line here in the province. Although our board is working hard and meeting monthly, we believe an executive committee of the board, which may be delegated certain of the board functions, will have the flexibility to meet more often if necessary.

In short, we are committed to bringing in Expo 86 not only as an exciting world exposition of which British Columbians and all Canadians can be proud but also to bringing it in within budget and with tight financial controls. This new operating structure will assist us to do that. Our Expo chairman, Mr. Jim Pattison, is well known for his capacity to run a major business project within budget. This new structure will assist our chairman towards that goal.

With those remarks, I move that the bill be now read a second time.

MR. LORIMER: I want to congratulate the minister on being able to speak for five minutes on a nothing bill. The opposition doesn't know if the change in name is going to help or hinder the operation, but we're not going to spend much time debating it.

MR. LAUK: As designated speaker on this bill I prepared a three-hour speech, but I will narrow it down to a couple of minutes.

I find that the minister's explanation of the amendments to section 2 — the section that guarantees city representation on the board — unacceptable. If the minister suggests that this is once again a request that we trust him and the government to protect the city's interest, then we have the very sad experience of the way in which that particular second member for Vancouver South reneged on a promise to support the ward system and complete the will of the people of the city of Vancouver. He represents a constituency in the city of Vancouver. He has turned his back on the people of that city and now he's asking us to believe and trust him when he says that the amendment to section 2, doing away with a guarantee of some city representation, is nothing for us to worry about because he promises he'll maintain at least that kind of representation on the board. I can't hear the things he says because I'm too distracted by the things he's doing. In other words, his actions betray the truth about his commitment to the city of Vancouver, not his vague and unfulfilled promises. At least that section as it stands would guarantee three appointments to the board. I say to this Legislature and to the minister, it's essential that vocal and representative persons at the city level of government be represented on that board — not party hacks or yes people who the minister has carefully weeded out and found will support whatever decisions are made by the government to contribute to this exposition, but people who will represent the city's interests.

Interjection.

MR. LAUK: That alderman would do a much better job than some party hack you've got on there, rubber-stamping decisions. It's very important, indeed, that there be city representation, because city taxpayers are fed up to the ears with having costly projects thrust upon them and having their taxes increased to provide the services necessary to those projects. They want some say and some input into whether the Crown corporations putting on expositions, whether B.C. Place, Pier B-C or all of these things, are going to make a proper contribution to the costs of servicing those projects. That's why you need city representation, not political hacks or backroom politicians, on these boards. You need people who, by their actions and their record, can truly be identified as having the courage to stand up for the people of the city of Vancouver, and who, as my colleague for Prince Rupert quite justifiably points out, have been chosen by the people of the city of Vancouver to protect their municipal interests. I think it's cynicism of the worst possible order — it's a terrible pity to see that cynicism in one so young — to argue that we should trust him, when we know full well that if his actions under this bill are the same — and as trustworthy — as his actions with respect to the ward system in the city of Vancouver, he's simply not to be trusted. We oppose the amendments.

HON. MRS. McCARTHY: I want to speak to this bill because it embodies tremendous initiative for the people of Vancouver. Until the member for Vancouver Centre spoke, I really felt that all members of this House, as the member for Burnaby would say, would support the bill and there would not be much discussion. It embodies such initiative for the province and people of British Columbia that it seemed evident all sides of the House would be for it, so that I didn't think any discussion from this side of the House would be necessary.

It's obviously the negative people on that side of the House who would bring in such words as "cynicism," and all those adjectives so ably conjured up by the member for Vancouver Centre. When the minister introduced this bill and talked about the very small change that is going to be made in the name, and also referred to the makeup of the board, etc., he mentioned the jobs that would be created. He also mentioned the many millions of people who would be here in the province of British Columbia, so that we in British Columbia could show to the world the kinds of things we are able to show them, which would create trade and ongoing jobs for the people not only of British Columbia, but the people of Canada.

On that marvellous site where Expo will be, and the additional site now on Pier B-C.... There will probably never be another site more favoured for a trade fair in all of the world.

Fifteen thousand man-years of work, and the member for Vancouver Centre cannot even mention the positive effect that such a fair will have. He mentions city taxpayers having

[ Page 7729 ]

things thrust upon them. In all of the North American continent there isn't another place as blessed in having the kinds of things thrust upon them that would create the jobs, the activity and the trade in the future as the city of Vancouver in the province of British Columbia embodied in Expo, the trade and convention centre, B.C. Place and the ALRT.

The member for Vancouver Centre, who got  up on his feet to address this bill, talking about the bill in such a way, does not really pay tribute to the faith that people in the city of Vancouver have in sending people to this House to represent them. That member was sent here by the people of Vancouver — in fact, by the people of Vancouver Centre, where these things are taking place. Some 14 million people will be coming into the city of Vancouver, leaving all of their dollars through this initiative, Expo 86 — all of those jobs created up to 1986 and the tremendous thrust it will give to business following 1986. I cannot believe that the member for Vancouver Centre would so disregard the citizens of Vancouver and Vancouver Centre, and the people of British Columbia who are very much behind Expo 86 and the initiatives in this bill.

Mr. Speaker, I support the bill wholeheartedly.

HON. MR. HYNDMAN: Mr. Speaker, I was intrigued to hear the member for Burnaby-Willingdon (Mr. Lorimer) describe a bill that will generate 15,000 man-years of work as a "nothing bill." I will watch with interest what he and his colleagues do when the time comes to take a stand for or against Expo 86.

The first member for Vancouver Centre had some very unusual things to say, particularly given that this great exposition will be in the heart of the constituency he represents, at least for now.

The member had some concerns about the involvement of the city of Vancouver and being kept up to date with what's happening. I should refresh his memory to remind him that the Premier made a special point of meeting with Mayor Harcourt in advance of the federal-provincial announcement to give him the benefit of the briefing and subsequently arranged a special luncheon for him where those two people — the mayor and the Premier — subsequent to the announcement could discuss it in greater detail. Additionally, the member may not know that the Expo board has been meeting regularly since the announcement of the Premier with both Mrs. Robinson and Mr. Hamilton, the two city of Vancouver representatives fully involved; and members of the Expo board have been regularly in touch with the mayor's office. The member failed to note, Mr. Speaker, that we may want to increase the representation and presence of the city of Vancouver, in which event we now have the flexibility to do so.

In terms of taxpayer benefit, Mr. Speaker, it's interesting that the first member for Vancouver Centre seems unable to realize what Expo 86 is going to do for part of the area he at least for now represents. It will take one of the most rundown and blighted areas of the Vancouver core and redevelop it at no expense to the taxpayer into an exciting, attractive, modern urban showplace, leaving after Expo very attractive public spaces and facilities for the people of Vancouver. I would have thought that perhaps one positive note might have been sounded by the member. He's on record. When the people of Vancouver Centre come to cast their ballots next election, they can bear those thoughts in mind.

The member made some reference to the ward system, Mr. Speaker, and I must reiterate my view in response to the point he raised. Just because a citizen of this province supports the ward system, that does not mean he is duty-bound to support the NDP idea of a ward system. The NDP idea of a ward system, advanced by that member last session, was a gross violation of the provisions of the Vancouver Charter, purporting to ram down the throats of the people of Vancouver a change required under the Vancouver Charter by referendum. It was not a surprising approach, coming from that party, the very people who rammed amalgamation down the throats of the people of Kamloops and Kelowna. That much is understandable.

Mr. Speaker, with great regret I've got to observe that the first member for Vancouver Centre would refer to such an outstanding British Columbia businessman, such an outstanding person with a sense of public service as Jim Pattison, as a political hack. That is a regrettable comment about a leading Canadian businessman who also finds the time to devote himself to public service. Mr. Speaker, this government, unlike the opposition, does not view or characterize Mr. Jim Pattison as a political hack; he is a first-rate British Columbian and Canadian. We are fortunate and proud to have him as chairman of the Expo 86 Corporation. I would make the same comment with respect to our commissioner-general, Mr. Patrick Reid, who carries ambassadorial rank of the Canadian government. To suggest that he is a political hack is an insult and slur of the worst order to a man who has dedicated himself to a distinguished federal career in external affairs.

Expo 86 is an exciting opportunity for the people of British Columbia and Canada. It is going to be the only major world exposition of its kind in Canada between now and the year 2000. Even now, for the people of Vancouver and Vancouver Centre, it means important new economic opportunities. This bill will help us on the way to making Expo 86 a reality.

I move second reading.

MR. LAUK: I rise on a point of order, under standing order 42, to correct a statement. The hon. minister stated clearly that I referred to Mr. Pattison and the commissioner-general as political hacks. That is incorrect. I was referring to the amendments brought about by this bill that would allow the Lieutenant-Governor-in-Council to appoint up to 15 members on the board. I made no reference to the would-be president, Mr. Pattison, and the commissioner-general. That is totally incorrect. and later on I'll have further comments to make about that kind of attempt by the minister in this chamber.

MR. SPEAKER: Hon. members, standing order 42 provides for exactly the kind of point of order that has just been raised. In my short time in the House it has been attempted to be used to correct a matter which another member has made in his speech, but that is not the purpose of standing order 42. I just thought that it should be noted that it was used correctly this afternoon.

Motion approved.

HON. MR. HYNDMAN: I move that the bill be referred to a Committee of the Whole House to be considered now.

MR. SPEAKER: Shall leave be granted?

[ Page 7730 ]

Leave not granted.

MR. SPEAKER: The question is: for consideration at the next sitting of the House after today.

Motion approved.

Bill 45, Transpo 86 Corporation Amendment Act, 1982, read a second time and referred to a Committee of the Whole House for consideration at the next sitting after today.

HON. MR. HEWITT: As House leader I call Committee of Supply.

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

ESTIMATES: MINISTRY OF ENERGY,
MINES AND PETROLEUM RESOURCES

On vote 28: minister's office, $212,539.

HON. MR. McCLELLAND: It is my pleasure this year to be the first minister called for estimates. I hope that we will have the opportunity to respond to many of the questions that will be asked by members opposite. The Ministry of Energy, Mines and Petroleum Resources has combated many challenges in the past year. With the present economic conditions that are facing all of us, certainly here in British Columbia and across North America, the challenges promise to be many more. The downturn in the economy and its effect on the mining industry, combined with the disastrous effects of the national energy program on the energy and petroleum sectors, are reflected in the current decreased revenues from all these resources.

However, adverse conditions sometimes bring forward initiatives which otherwise might not have emerged in richer times. I am proud to say that all four divisions of the ministry have responded well during these difficulties, and many initiatives have emerged which will be not only of great value to those sectors coming under my ministry's jurisdiction but to the benefit of the province at large. I would like at this point to thank my deputy, Mr. Roy Illing, and the others under his direction who have been responsible for helping to bring us through these difficult times.

I will try to keep my opening remarks quite short. I do hope, in these opening remarks and in answer to the members' questions later, to be able to convey a sense of the ministry's real contribution to the prosperity and security of the province of British Columbia. I would like to give a brief overview of government policy in each of the three sectors within my portfolio, to review how those policy objectives are being met through ministry activity, and to outline future policy directions which will bring about careful development and wise management and use of British Columbia's energy, mineral and petroleum resources.

With regard to minerals, 1981 was expected to be another boom year. We expect that the minerals produced during that year will have an estimated value of over $2 billion. Production and value of industrial minerals and coal, when those figures are in, are expected to be the highest ever. It's anticipated that increased production of metals will allow this sector to maintain its value, even though lower prices have been received during the period. During the year a number of major mines came into full production: the Highmont copper mine, the Sam Goosly–Equity silver mine and the expansion of the Lornex copper mine. Lornex is now the largest base-metal mine in Canada. Mineral claim-staking declined only marginally, by just about 1 percent, with total exploration expenditures expected to be over $125 million for the year.

The productive climate created in the province has recently been hit by the downturn in the economy, and some of our mines are showing first-ever losses, with the resultant layoffs. We are, however, optimistic about the upswing in the economy, and meanwhile we are very thankful in British Columbia for our diversified mineral resources base. Coal continues to hold its own and gives every indication of doing so for many years to come. In the southeast of the province, Mr. Chairman, Crows Nest Resources' Line Creek coal-mine made its first shipment recently, and by this time next year B.C. Coal's Greenhills property and Fording Coal's expansion will be in full production. As for the northeast, two mines are currently under construction: Denison Mines' Quintette and Teck corporation's Bullmoose properties. These mines are scheduled to come into production by late 1983. Apart from their direct economic impact on specific areas, development of the northeast and southeast coalfields will provide benefits to all areas of the province — in secondary manufacturing, engineering consulting, construction, other services, and in the wholesale and retail areas. To service the needs of coal development in the northeast, the new town of Tumbler Ridge is being established near Chetwynd and Dawson Creek.

Mr. Chairman, this is a project which demonstrates how well all ministries can work together, and also our ministry's policy of negating some of the adverse features of company towns. To avoid having an economic base provided by a single employer, Tumbler Ridge was chosen because it is well located to serve as the home for workers from several different mining operations. It is also likely that employees from industries other than coal, such as natural gas and forestry, will make this their new home. This town is to be a place where people will want to settle. Rather than merely providing public works and commercial facilities, we have considered those physical and social features which will contribute to a high quality of life in this new community.

Last year, Mr. Chairman, we hosted the 1981 mines ministers' conference here in Victoria. One of the major topics of that gathering was the cyclical nature of the mining industry and its effect on the people and their towns. By giving thought to the social and economic base of Tumbler Ridge, we are optimistic that we will overcome many of the inherent problems with towns of this nature. It's a major initiative in our planning process.

A second outcome of that conference was this province's commitment to producing a paper on occupational health and safety in the mining industry. This, of course, is a major concern, and indications are that occupational health is becoming the number one issue among workers in Canada and North America, taking second place now to wages.

The third topic of the conference was skilled labour. Mining is a major employer of people in this province, with over 3,500 persons directly employed in coal-mining alone. This figure is expected to almost double within the next two years with the advent of the northeast coal project. The ministry is working closely with the Ministries of Education and Labour and groups within the mining industry, so that we will have enough skilled workers for these major projects.

[ Page 7731 ]

Modular training programs have been established to give the workers on-the-job experience, and we are studying other provinces in this regard, so that we may also benefit from their experiences.

Also, during the last year we have been very active in the continued implementation of the guidelines for coal development and in the metal-mines guidelines review process.

To sum up the situation for mineral resources, continued emphasis has been placed on a rational approach to managing land use, environmental and community impacts, health and safety, and skilled labour. From an economic standpoint, development of northeast coal has proven to be a wise decision in the face of temporarily depressed metal markets.

Mr. Chairman, with regard to the energy division of the ministry, a number of initiatives have been taken in the past year. Following public hearings by the B.C. Utilities Commission, a commitment to prepare a formula to be used in establishing field and wholesale prices for natural gas was given. We hope that this new formula will provide producers and consumers with a much greater degree of predictability in natural gas-pricing in the province. Recommendations will be made to cabinet in this fiscal year. In consultation with the Ministry of Finance and the Ministry of Industry and Small Business Development, we are undertaking substantial and comprehensive studies on the pricing of all energy resources in the province. The purpose is to develop a pricing policy which will consider energy security, energy substitution and demand targets, industrial developments, government revenues, the cost of new energy sources, conservation and the social impact of energy pricing.

We undertook a lead role in the National Energy Board gas export hearings in order to ensure that our interests are considered in current and future exports of natural gas from British Columbia.

A public hearing is now underway to review B.C. Hydro's application for the construction of a hydroelectric project at Site C. It's expected that the recommendations of the commissioners will be received by cabinet for consideration later in the year.

We have also called for applications from companies interested in providing natural gas service to Vancouver Island. The terms of reference for hearings by the B.C. Utilities Commission will be finalized and these, along with names of commissioners, will be released shortly.

Improved capability in forecasting energy supply and demand requirements for the province will also be undertaken during the coming year, as well as studies to consider the role of alternative energy sources such as wood waste, small hydro, solar and wind energy, and the impact of conservation measures on energy demand.

The conservation and renewable energy branch will continue to administer programs to enhance conservation activities in the public and private sectors and to identify appropriate renewable energy projects worthy of support on a demonstration basis. Increased emphasis will be placed on industrial energy conservation as a result of the federal-provincial agreement which increases funding on the basis of an 80-20 federal-provincial cost-sharing arrangement. Additional energy audit capability will be provided through the addition of a mobile energy bus and through the provision of funding for assistance to small businesses that don't normally have the capability to assess their energy conservation potential.

A number of demonstration projects involving small hydroelectric facilities are expected to be completed during the fiscal year, which will contribute to the reduction in demand for diesel fuel for electric power generation in remote locations. It is also expected that amendments to the Utilities Commission Act which will clarify and streamline the regulation and approval process for major energy projects will be introduced in the Legislature. It will also remove some institutional barriers to the development of electricity by forest companies and other private surplus-energy producers.

The government will continue to fund search and development programs related to coal liquefaction, the development of alternative fuel sources and the use of compressed natural gas as an alternate transportation fuel. The Energy Development Agency funded a research program at B.C. Research during 1981-82, and would anticipate continuing to support their research program, which is directed towards examining various British Columbia coals and determining their characteristics and adaptability to a number of coal liquefaction processes. We'll be examining the economics and the technical viability of processes which can convert forest waste and non-commercial forest species to alternative fuels such as alcohol. In addition, the agency will fund a training program — in fact, that program is underway now, Mr. Chairman — at the Pacific Vocational Institute for mechanics on the conversion of automobiles and commercial vehicles from gasoline to compressed natural gas. You've already heard that $200,000 in grants will also be provided to supplement the federal grants to encourage the conversion of private vehicles to compressed natural gas use.

During the year we chaired the interprovincial task force on oil demand and restraint measures, and we'll be actively developing a program complementary to that federal program in the event of an oil emergency. We are also examining tertiary oil recovery methods which could effectively add some 200 million barrels of recoverable oil to provincial resources.

Last year in September, the British Columbia–Canada energy agreement was signed. Among other key elements, the federal excise tax on our export natural gas was eliminated and the federal government committed to pay and administer all costs of the petroleum incentive plan. The initiatives for natural gas and its promotion as a better alternative, the pricing formula and export policy, combined with our initiatives in energy pricing policy and forecasting, and conservation and research, all point to a strong role in the past year in the stewardship of our vital natural resources.

Last year I expressed my concern about the national energy program and its effect on petroleum and gas development in this province. I regret that the warnings we gave have too clearly come true. There has been a marked downturn in drilling activity in the province, with the continual drift of drilling rigs to other places, along with many of the skilled people we need to operate them. One has only to visit Fort St. John to see the profound impact on people from these ill-conceived policies. Unfortunately, the national energy program was not put into effect as an energy policy. It was, instead, a means to get federal revenues from provincial resources. Unfortunately, it was not recognized that there was a need for petroleum producers to receive a fair return if they are to continue to invest in developing the petroleum resource of Canada. Ill-conceived efforts to so-called "Canadianize" an industry with bureaucratic controls and the sky-high interest rates brought about by the huge deficits of the Trudeau

[ Page 7732 ]

government have combined to cripple this progressive and dynamic industry. The Trudeau government directed its attention to the arctic and the tar sands, and challenged the offshore interests of the province on the east coast. Unfortunately, in doing that, they failed to realize that some of the greatest strengths in our industry come from the continued activity of small, independent Canadian producers and the conventional operations of the larger companies in traditional oil-producing areas like those which exist in Saskatchewan, Alberta and British Columbia. It is these operators who have developed the oil and gas potential of our province in the past few years, and it is this group, mostly Canadian, which has been hardest hit by these policies.

We have tried — a bit, at least — to offset the harm that has been done to the industry by taking several initiatives within the limits of what we can do under the constraints of the national policy. We have improved the level of return at the wellhead for gas producers. I said earlier that we will be providing a more predictable formula. Further, we initiated a public hearing, under the direction of Dr. George Govier, to investigate the level of natural gas which is surplus to the needs of our province. The results of this inquiry will be delivered before the end of this month.

Further, in June of last year I announced a program to maximize benefits from proposals involving the use of any surplus natural gas. Under the natural gas allocation process proposals are now being evaluated in terms of their benefits to the province, including return of revenues, and the potential for job creation and for enhancing the overall economic goals of British Columbia. The program was further refined, recently, when we announced that all natural gas processing industries would be situated in northern and interior British Columbia. This decision reflects our commitment both to create investment and jobs at a time when they're needed and to process resources closer to where they are located. The strategy also complements northeast coal to build a solid industrial base for British Columbia. A total of nine proposals have been received, and I believe that this response shows that the companies interested and the investment community clearly see a bright future for the development of industries using this resource.

One worrying matter still to be resolved, though, in the development of our natural gas resource potential is the domestic tax on British Columbia natural gas that was implemented by the Trudeau government. Today that tax is equal to more than a third of the wholesale cost of natural gas in British Columbia, and it will increase. What that tax does, to some degree at least, and perhaps to a large degree, is to inhibit the opportunity for British Columbia to maximize the use of its own natural gas. I'm sure we will be discussing this in much more detail as the year goes on, but I can say here today that it's my intention, and the government's intention, to move in every way possible to, have the Trudeau government reconsider its national energy program, and certainly to reconsider that tax on our domestic natural gas.

Earlier today we had under debate a new bill that we hope will help to develop the full energy potential of this province by developing geothermal resources, which are available for development throughout British Columbia. We had a good and full debate on that bill earlier today. In the past year we have taken the initiative to develop government policy on west coast offshore resource development. It may indeed be some time before any exploration proceeds there, if ever, but it is our intention that the sound management we have carried out in petroleum development in the northeastern part of British Columbia will be applied as well in areas of provincial jurisdiction off the west coast. Negotiations concerning revenue and management of offshore petroleum resource areas have yet to be carried out, but these negotiations and related measures of environment and socioeconomic assessments are scheduled to begin very soon, and a successful conclusion may bring resource benefits to the province from this area, in oil and natural gas potential.

The natural resources of British Columbia do belong to the people of British Columbia. The government of this province has the responsibility to ensure their wise development and use in a manner that brings the full return to the people of British Columbia, the owners of the resources. This responsibility is continually being widened to recognize changing times. As I mentioned previously, the downturn in the economy has placed more emphasis on our role as a promoter of alternate energy sources. Increased recognition of the impact of our projects is reflected in our initiatives with regard to the environment and other sociological issues.

In closing, Mr. Chairman, I would like to say that the past year's activities reflect our role of maximizing the use of the province's natural resources in an orderly and far-sighted manner. The members of government and the members of our ministries responsible have demonstrated that they can rise to these challenges; and we will continue to do so in the coming years.

MR. D'ARCY: Mr. Chairman, in my first series of remarks I'm going to be talking to some degree about the minister's responsibility for mines. Before I do that, however, I want to make the point that the minister has stated, quite correctly — it's the one thing on which I agree with him — that the federal domestic tax on natural gas is a heinous imposition on British Columbians and on western Canadians in general. What the minister didn't tell the committee was that he and his government are doing exactly the same thing with all other energy sources. They've added a special tax, as we talked about earlier today, to all hydroelectric sources in this province, which has resulted in crippling increases in the cost of doing business and in the cost to consumers. They have an ad valorem tax on gasoline. Over the past year, they have increased rates and taxes on all forms of energy by amounts in excess of 100 percent all over this province. This is exactly the opposite of what they should be doing if they really believed in what the minister says they want to do, which is to maximize British Columbians' use of and benefits from our own natural energy resources.

I would liken the water tax increase to a practice which industry in this province is concerned about. Industry in this province, particularly the forest industry, has said that it might be a good idea if we developed more thermal energy, particularly from wood waste. They're afraid that if the government — this particular government, represented by the minister — should expend shareholders' capital in developing their own thermal electrical energy, what might happen to wood waste is that after that capital is captive — based on the ground rules, guidelines and goal-posts of today — the minister or some other minister would come along and say: "We forgot to tell you. We just passed an order-in-council putting a special royalty on hog fuel. It is now going to cost you four times as much." That is after they have made the decision and invested the money, because that is the way this government deals.

[ Page 7733 ]

I am going to talk, just for a moment, about an action by the Minister of Health. I know you are going to want to call me to order, but it is an action of the Minister of Health, behind cabinet doors, which impacts directly on the industry represented in this House by the Minister of Energy, Mines and Petroleum Resources. This involves the cost to the industry — it affects all industry — of fees paid to the Workers' Compensation Board. The Ministry of Health told the mining industry of this province, as they told all other employers, that the Workers' Compensation Board is now going to be charging 35 percent more for all medical services performed by hospitals. This is the kind of thing that happens behind closed doors and changes the cost to industry without any discussion in this chamber unless one of us on this side of the House brings it up a month later and says: "Why did you do this? Will you please explain it? It's having a bad effect on the ability of the mining industry to do business in this province." How bad is the situation for the mining industry? I think the minister probably does know that. I think he knows that, because I'm sure he's been told by many of the companies and their representatives in the Chamber of Mines and the Mining Association. He knows very well that the revenues from the mining taxes that he can expect this year are probably only about 10 percent of what the government received two years ago — roughly $6 million, when two years ago the revenue was something in excess of $60 million. That party over there used to say that taxes to industries should be based on the ability to pay. So what did they do when they found out that they were only going to get $6 million instead of $60 million? They decided they were going to get the other $54 million plus anyway by increasing rates such as water licence fees. In other words, the government's desire to raise revenue from the industry has nothing to do with the ability to pay. If they don't get the money through one taxation levy on the right hand they simply go behind closed doors and change the rate structure with their left hand.

I would like to raise some complaints before the committee that have been made to the government. The minister may not remember these complaints, but they were made to us as well from the mining industry. The mining industry said to the government and the media:

"We would like to talk to the government because we want to draw their attention to a serious deterioration of several key services that are by law the responsibility of this minister. These services, which impact directly on the exploration phase of the industry, relate primarily to the acquisition and maintenance of mineral title, claim recording, updating of claim maps, processing of assessment reports and provision of professional geological services to the industry and the public, including the collection of mineral resource data and the protection of prime mineral lands from single-use alienations."

It has been stated by the industry and by trade unions who have members working in the industry that in their view this minister doesn't give a dam about the mining industry; he is primarily concerned — if he has concerns at all for the public of British Columbia — with energy matters. I am going to deal with that lack of concern and the way that it has impacted upon the ordinary people of B.C. who have been employed in mines — and would like to be employed again — and those employed in processing facilities and, of course, on those individuals either in the service industries or employed by the service industries who have been severely impacted as well by this minister's lack of interest in their concerns.

It is interesting to note that when the Mining Association talked to their members, nearly 70 percent of the respondents said that the current delays of four to six months in processing applications and plotting new claims created serious problems for them. Only 3 percent rated the minister's services as excellent. Seventy-one percent said that the processing period for assessment reports. which took up to eight months, was unreasonable and unjustifiable.

This is the most interesting thing, though. The majority of the people in the industry said that the government reports — in particular the annual reports — are published so late that their usefulness is destroyed except perhaps as a historical recording of events. That's quite an indictment, Mr. Chairman. It appears that a large part of the industry think that the minister and his ministry, as it applies to mines, are irrelevant.

I think the points have been made here, but I would also like to note that one of the reasons the mining industry has been so incensed and disappointed in the government and this minister's attitude toward them when it comes to fee, rate and tax increases is that they have stated on numerous occasions that if they received even half-decent service from the ministry and from that minister they would be prepared for increased fees. What they've got is reduced and inadequate services and, at the same time, fee and rate increases that have averaged in excess of 100 percent in a time of economic decline in British Columbia.

[Mr. Davidson in the chair.]

I want to note before the committee that some companies — not all, maybe only a few — and all of the people employed in the industry have for years been asking that the same level of standards be maintained above and below ground in terms of safety and inspection. We have had the ridiculous situation going on where workers above ground in the same mining operation are covered under a compensation board inspection and WCB regulations and workers underground are covered under the Mines Act. Mr. Chairman, I am not questioning the competence or ability of mining inspectors or compensation board inspectors; what I am suggesting is that the government should move quickly to bring the same standards and the same group of inspectors under the same department of government for the safety and industrial hygiene of all workers within the mining industry. If that means bringing some mines inspection people into the WCB, so be it: if it means moving some WCB people into the Mines ministry, that's fine too. But it should be uniform, and there should be uniform standards to protect the interests of workers — and the companies, by the way — in the province of British Columbia.

Mr. Chairman, I want to talk once again about the minister's evasiveness in dealing with the question that has been before the Energy and Utilities Commission in B.C. for seven years now, and that is the question of Cominco's exemption from the Utilities Commission Act. The minister said that he intended to introduce some amendments to make it easier for the private sector to get involved in small hydro developments and thermo-electric generation on site. The minister knows full well that the major problem there is that industry quite understandably does not want to be regulated when it comes to the generation of energy; they don't want to

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be forced to provide the energy to utilities beyond a certain level. Mr. Chairman, I believe that's a reasonable concern.

The question in my riding, which involves the welfare of my community, as well as the welfare of Kimberley in the riding of Columbia River, to some degree involves whether Cominco Ltd. is going to have the opportunity to guarantee to itself a minimal supply of industrial power, energy that has not been supplied at taxpayers' expense or at the cost of borrowing through B.C. Hydro, but indeed has been provided by shareholders of that corporation over the years. They simply want guaranteed access to their own power for the ensuing years so that they can make plans for the future diversification and expansion of their industrial operations in the southeastern part of the province.

We heard the minister say it was wonderful that we were seeing this expansion in modernization. Well, I suggest to you, Mr. Chairman, that that expansion and modernization would never have taken place if that company had thought that the goalposts and the ground rules were going to be changed after their investment capital had become committed and had become captive.

We also need our utility in the southern part of the province, which, I might point out, also serves the south Okanagan — Kelowna, Penticton, Princeton, Osoyoos — as well as the boundary country. That utility, West Kootenay Power, is greatly in need of updated and expanded plant facilities, generation facilities and transmission and distribution facilities. They do not, under the present circumstances, have the financial resources to do that. They need the opportunity under this application to proceed with that. That application and the recommendations by the Utilities Commission are sitting on the minister's desk and have been there for over a month now. Once more he delays economic activity in the province of British Columbia.

Mr. Chairman, I note that the government has yet to produce the guidelines for the Utilities Commission regarding the Vancouver Island pipeline issue. The issue was first brought up by Social Credit politicians in this province in the 1956 election. That was 26 years ago, and they've made it an issue every election. I guess they don't want to do anything about it because they think it's a good issue.

It is my view — and I'm not from a Vancouver Island constituency — that the residents and industry on Vancouver Island should have the same access and opportunity to B.C.'s most readily available fossil fuel as the residents of the interior and the north. The government should quit talking about it and get on with the matter. If the pipeline is not economic on its own two feet, then that question should be examined dispassionately by people technically qualified to examine that question, and a report should be made. If there is to be a loss on it and if the cost of providing gas to Vancouver Island has to be rolled into the rest of the province, then the rest of the province should know what that cost is going to be.

One way or another that cost is going to be borne by British Columbians, whether through wholesale prices through Westcoast Transmission, retail prices through B.C. Hydro or some other private-sector retailer. The fact is that there is no free lunch, but Vancouver Island people should have the opportunity to plug into that resource. The costs need to be known, and the minister should get his act together and lay down the requirements and the terms of reference for the Utilities Commission. For two years he refused, in spite of requests by municipal people and members on this side of the House, to simply open the question up for public scrutiny. We weren't asking that a political decision be made. We were simply asking that the question be put up for public scrutiny in the same way that the government would put a taxi licence application up for public scrutiny. For the greatest length of time they refused to do this. Now they have said they will do it, but they won't say when, because they don't have the imagination or the initiative to lay out simple terms of reference. I am sure the correct suggestions could be made by any number of people who are familiar with the industry but who do not have a personal axe to grind in the matter.

I want to return to the mining industry. It is our recommendation, on this side of the House, that in order to renew the industry's confidence in the minister and the ministry, in order to end the deterioration — as the Mining Association has said — of several key services that are by law the responsibility of the minister, the government should re-establish a Ministry of Mines. We think it should be a separate industry. We think this would be particularly attractive to the juniors in the mining industry because we note that these people have been probably the hardest hit by the fee and rate increases put forth arbitrarily by the government. I would note that the junior mining companies in this province still, in spite of the present economic situation, have accounted for more than 50 percent of all major mineral discoveries over the last few years. In many cases the major companies come in with the development capital but it is the junior companies that have the courage, initiative and perseverance to go out there in British Columbia and make the major mineral discoveries.

Mr. Chairman, I would also note that the larger operating companies have served notice on numerous occasions that they fear a long-term falldown in their production, because a number of the major mines are going to be curtailing production or shutting down in the next few years because of ore depletion. That process has been hastened by the current economic situation, and they don't see major operations coming on stream. They would like to work with the government of the day, if the government would ever listen to them, in reversing that trend.

We would note that some of the work that the government has been doing, in conjunction in some cases with their federal counterparts, has involved infrastructure requirements for the development of mining properties in the northwest. The surprising thing that we have found, though, is that many of the government people involved with that have not been from the Ministry of Energy, Mines and Petroleum Resources, but rather from the Ministry of Industry and Small Business Development. I suggest that people familiar with the mineralization and geological properties of British Columbia should be involved in that.

Mr. Chairman, the minister talked about all the things that they were going to be doing in a regulatory way for the development of offshore resources. There's no question that we on this side of the House believe that there should not be two tiers of government involved in the development of offshore resources. What the industry has been complaining about is that if they wish to apply for permits or licences, in order not to alienate either level of government — which they don't want to do, because most companies operate nationally and internationally; if they don't, they wish to at some point — they are forced to work under two sets of guidelines, work with two sets of bureaucracies, two sets of inspections, and usually they don't know what the ground rules are with either, because neither government is firm on what they expect. It is

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our hope on this side of the House that the federal government will require, if they wish, certain standards of development to protect resources under the federal government's jurisdiction. That is reasonable. It is our hope and anticipation that the provincial government will be able to work out a single set of standards and requirements for the development of B.C. offshore resources. It's something that we need to do; the time is overdue. We have been given a bit of lead time because of the fact that there have been no major discoveries made. But when the time comes that there is a significant mineralization discovery, whether it be fossil fuels or metal resources, we are going to have to have our act together as a nation and as a province. I would hope that we would have one set of rules and one set of guidelines. I would hope that the federal government would come to its senses on the west and east coasts of Canada and realize that the continental shelf resources are as much a part of the provinces' resource operations as are the resources that exist on the land.

I note that we are nearing the hour of adjournment, and therefore I would move we rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.