[ Page 8761 ]

CONTENTS

Routine Proceedings

Tabling Documents

Statement of Crown proceeding payments for 1981-82.

Hon. Mr. Curtis –– 8761

Ministry of Industry and Small Business Development annual report 1981-82.

Hon. Mr. Phillips –– 8761

Oral Questions

Takeover of Inland Natural Gas. Mr. Macdonald –– 8761

Cutbacks in health care. Mr. Cocke –– 8761

Mr. Nicolson

Mrs. Wallace

Tabling Documents

Agreement between governments of Canada and British Columbia and Penticton band of Indians.

Hon. Mr. Williams –– 8763

Legislative Assembly Allowances (Limitation) Act (Bill 19). Hon. Mr. Wolfe

Discharged –– 8763

Attorney General Statutes Amendment Act, 1982 (Bill 62). Committee stage. (Hon. Mr. Williams)

On section 25 –– 8764

Ms. Brown

Fire Services Amendment Act, 1982 (Bill 63). Second reading. (Hon. Mr. Williams)

Hon. Mr. Williams –– 8764

Mr. Macdonald –– 8765

Hon. Mr. Gardom –– 8766

Hon. Mr. Hewitt –– 8766

Hon. Mr. Williams –– 8766

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

(Hon. Mr. Phillips)

On vote 51: minister's office (continued) –– 8767

Hon. Mr. Phillips

Tabling Documents

Northeast coal development agreements and reports.

Hon. Mr. Phillips –– 8767

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

(Hon. Mr. Phillips)

On vote 51: minister's office (continued) –– 8767

Hon. Mr. Phillips

Mr. Leggatt

Mr. Lea

Mr. Davis

Mr. Lockstead

On the amendment to vote 51 –– 8785

Division

On the amendment to vote 52: ministry operations –– 8786

Division

Appendix –– 8787

WEDNESDAY, JULY 14, 1982

The House met at 2 p.m.

Prayers.

HON. MR. FRASER: It gives me pleasure today to introduce to the Legislature Mr. and Mrs. Jack Ritson, former residents of my home town who now live in Tucson, Arizona. I'd like the House to welcome them.

MR. KING: Mr. Speaker, I'd ask the House to join me in extending a special welcome today to two visitors from Revelstoke, Harold and Shirlee Ludwig, along with my wife, Audrey, in the gallery.

MR. STRACHAN: I'd like the House to welcome Mr. Jack Hayes from the Rental Housing Council of British Columbia, who is in the members' gallery.

MR. NICOLSON: Mr. Speaker, in the gallery today is the chairman of our party's human resources committee, Mr. Doug Broome. Would members please bid him welcome.

Hon. Mr. Curtis tabled the statement of Crown proceeding payments for 1981-82, pursuant to the provisions of the Crown Proceeding Act.

Hon. Mr. Phillips tabled the annual report of the Ministry of Industry and Small Business Development for the year 1981-82.

Oral Questions

TAKEOVER OF INLAND NATURAL GAS

MR. MACDONALD: I've got a question for the Premier of British Columbia. He signed order-in-council 769 on April 15, which meant that the commission found the case of the takeover of Inland Natural Gas could not be reversed because the government hadn't acted soon enough. They found it wasn't in the public interest and they found that it would be used by the boys, who are Socred fund-raisers for real estate developers and oil....

Interjections.

MR. SPEAKER: Order, please.

MR. MACDONALD: This is the preamble to my question. I want to ask the Premier why that order-in-council of April 15 was signed one day after Jim Anderson and Ben Macdonald got de facto control of Inland Natural Gas, which the commission says is a decision that can't be reversed but is not in the public interest, and Inland Natural Gas is going to be used as a goblet to be drained by those boys. Why so late?

HON. MR. BENNETT: Orders-in-council are signed in the executive council chambers on the days on which cabinet meetings are held and on the days on which ministers present orders for consideration.

MR. MACDONALD: Do you not realize that the order-in-council was passed so late that you let the horse into the apple orchard and then tried to close the gate? Was it not a charade just to allow Inland to be picked up by Social Credit money-bags against the public interest?

Interjections.

MR. SPEAKER: The question cannot be permitted.

CUTBACKS IN HEALTH CARE

MR. COCKE: I'd like to direct a question to the Minister of Health. The government has boasted about the great new Children's Hospital. Now we find that because of restraint it has been cut back 61 beds. Has the minister decided to give the hospital the necessary funding to open to its full capacity of beds?

HON. MR. NIELSEN: The answer to the question is that that decision has not been made.

MR. COCKE: I have spoken to a number of people lately, and doctors are saying such things as: "My dreams for children are shattered." The new Children's Hospital cannot open enough intensive-care beds to look after its caseload. Has the minister decided to stop hiding behind his consultants and provide adequate funding?

HON. MR. NIELSEN: No one in the Ministry of Health or elsewhere in the government is hiding behind the consultants in any of the hospitals where consultants may be working.

MR. COCKE: Some of the load could be taken off Children's Hospital if regional referral hospitals were adequately funded. Has the minister decided to investigate regional backup facilities and, where necessary, provide funding?

HON. MR. NIELSEN: Not necessarily accepting the conclusion reached prior to the question, that matter is being and has been considered by people within the ministry.

MR. COCKE: I can say that once we had planning and now we have none.

The special-care nursery in the Children's Hospital handles seriously ill babies from across the province. In view of the fact that the beds in the special-care nursery have been reduced by 41 percent, what steps has the minister taken to protect the seriously ill infants who need those services once the beds are filled?

HON. MR. NIELSEN: I would take that particular question on notice and ask for details from the ministry and the Children's Hospital as to what they anticipate the future might hold.

MR. COCKE: The Children's Hospital administrator, John Tegenfeldt, states that as a result of health-care cuts, the Children's Hospital has to close beds and cancel some elective surgery, and only urgent cases are getting attention. Jamie Woollard, a six-year-old with Perthes' disease and in need of rehabilitation treatment, is having his treatment postponed as a direct result of these policies.

[ Page 8762 ]

MR. SPEAKER: Order, please. The preamble is exceedingly long.

MR. COCKE: Answers to questions have been exceedingly short.

Has the minister decided to respond to Jamie's question: "Why can't I get my legs fixed?"

HON. MR. NIELSEN: I too have seen the story that was in the Vancouver Province this morning, which I presume is the research the member for New Westminster is referring to with respect to this case. I have asked one assistant deputy minister to get the precise details of the situation at that hospital and regarding that patient, and when that information is available we'll have the opportunity to respond to the member's question. The information is lacking at the moment, but we have inquired as to precisely what the circumstances of that case are.

MR. COCKE: Mr. Speaker, I have spoken to Jamie's mother a number of times, including today, and in the last week she's been in touch with the minister's office, though they didn't seem to know anything about it.

MR. SPEAKER: The question, please, hon. member.

MR. COCKE: Why hasn't the minister decided to have somebody in his office that will take care of problems such as this?

HON. MR. NIELSEN: Mr. Speaker, as I said, I will take that specific question as notice to get details and accurate information. I think it's dangerous to make pronouncements and draw conclusions when the research has not been completed. I think we've seen evidence of that recently.

MR. NICOLSON: Mr. Speaker, I have a question to the Minister of Health. The case of an intelligent 13-year-old girl suffering from severe learning disabilities has come to my attention. Her doctor intended to refer her to the investigatory unit for learning disabilities, which has been cancelled due to health-care cutbacks at the new Children's Hospital. As time is running out for this girl and hundreds of others like her, has the minister decided to restore funding to the investigatory unit for learning disabilities at the new Children's Hospital?

HON. MR. NIELSEN: Mr. Speaker, since the question is asked today, I presume the member has not had the opportunity of forwarding that information to my office for consideration and specific investigation. I presume that he was advised today of the case with respect to that 13-year-old girl, and I'm sure the member will bring the information to my attention and I will have it looked at immediately.

MR. COCKE: Mr. Speaker, I think that this is well known to the minister: as a result of budget cuts the Royal Jubilee Hospital board is forced to shut down the family and children's unit at Eric Martin Pavilion. In view of the fact that no alternative facility remains on the Island, has the minister now decided to restore funding for that vital service?

HON. MR. NIELSEN: Mr. Speaker, I would suggest that the member for New Westminster is incorrect in saying that the Eric Martin Pavilion has shut down the specific unit he's speaking of.

MR. COCKE: Well, Mr. Speaker, let me familiarize the minister with the fact that they're shutting down that facility and they have not opened the one in Vancouver Children's Hospital.

Anyway, in view of the fact that the juvenile justice system was one of the heaviest users of the service, as there is no alternative facility, has the minister met with the Attorney-General (Hon. Mr. Williams) to explore the possibility of opening, and keeping open, this vital unit?

HON. MR. NIELSEN: I'm sorry, Mr. Speaker, I don't know what the member referred to as "this vital unit." Now which unit are you speaking of — the one at Eric Martin or Children's Hospital?

MR. COCKE: The family and children's unit.

HON. MR. NIELSEN: At Eric Martin or Children's Hospital?

MR. COCKE: And the Vancouver Children's Hospital.

HON. MR. NIELSEN: I haven't spoken to the Attorney-General with respect to that, Mr. Speaker.

MR. COCKE: Mr. Speaker, in view of the fact that the Ministry of Human Resources also makes great use of these units — potentially Vancouver, and the one at Eric Martin — has the minister met with the Minister of Human Resources (Hon. Mrs. McCarthy) to find a way of reopening this vital service?

HON. MR. NIELSEN: I presume, Mr. Speaker, that the member again is referring to the same unit at the Children's Hospital. I have not spoken with the Minister of Human Resources with respect to that specific unit.

MRS. WALLACE: I have a question for the Minister of Health. More than three months ago a severely disturbed 11-year-old was admitted to the adult psychiatric ward at Cowichan District Hospital because there was no other place for her. After six weeks in that institution, she was transferred to Vancouver General Hospital, where she remained for five weeks. Four weeks ago she was admitted to The Maples for a trial period....

MR. SPEAKER: Order, please. We must move to the question; it is now the third sentence.

MRS. WALLACE: Mr. Speaker, I'm just coming to the question. Four weeks ago she was admitted to The Maples for a trial period; that institution is for 12-year-olds and over.

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

MRS. WALLACE: Will the minister tell the House what action the distraught parents can take if on Monday next the staff of The Maples decides she cannot stay there because she is only 11?

[ Page 8763 ]

HON. MR. NIELSEN: I will be very pleased to contact the staff at The Maples and try to get the information relative to this specific youngster's case. Come Monday, I will again contact the proper officials there to determine if they have made the decision predicted by the member for Cowichan. I would appreciate it if the member for Cowichan would provide me with the information, which, I'm sure, she received only today since the matter has been brought to my attention today.

MRS. WALLACE: I spoke to the child's father on the telephone this noon, Mr. Minister. I would ask you, Mr. Minister, what happens to other children...?

[Mr. Speaker rose.]

MR. SPEAKER: Order, please. Hon. members, on several occasions the Chair has tried to assist members with questions that are acceptable to the House; it has been suggested that preambles be of one sentence in duration. Debate cannot be permitted in question period.

[Mr. Speaker resumed his seat.]

MRS. WALLACE: I would ask the minister what happens to other young people who do not have someone to bring their case to his attention. Has he decided that providing care for emotionally disturbed children does not come under the jurisdiction of the Minister of Health?

HON. MR. NIELSEN: It may come as a surprise to the member for Cowichan, but many people in the province understand procedures whereby they can bring certain matters of importance to the attention of public officials and others.

Many MLAs bring forth matters of concern to themselves to the appropriate ministries in the government with frequency. Very frequently those matters are resolved expeditiously. In other circumstances, on occasion information is delayed somewhat inadvertently by members and others. Specifically to the last part of the question, the answer would be no.

MR. COCKE: While we're looking at restraint, we have a patient in this town right now at the Royal Jubilee Hospital who was operated on three weeks ago. Because of the fact that Gorge Road Hospital....

SOME HON. MEMBERS: Question.

MR. SPEAKER: Order, please.

MR. COCKE: Mr. Speaker, I would be embarrassed too if I were in government.

He occupied a bed for three weeks when he should have been there for seven days, but because of the Gorge Road rehabilitation beds that were closed recently.... Has the minister decided to fund the Gorge Road Hospital in such a way as to provide for rehabilitation care in this region?

HON. MR. NIELSEN: I don't have the details of the Gorge Road Hospital funding here at the moment. I'll be pleased to look into that.

MR. COCKE: Headlines, for crying out loud.

HON. MR. NIELSEN: Headlines!

Mr. Speaker, I find it very difficult to accept that member's diagnosis of this patient's needs. I'm not quite sure of the competency associated with it.

MR. COCKE: Would the minister accept the word of the patient's surgeon and his own doctor? Because that's their word.

HON. MR. NIELSEN: If I had a choice, yes, I would certainly prefer their opinion.

Orders of the Day

HON. MR. WILLIAMS: Mr. Speaker, before the House Leader proceeds with orders of the day, I ask leave to table a copy of the agreement between the governments of Canada and British Columbia and the Penticton band of Indians, and associated documents referred to yesterday in the debates on Bill 58.

Leave Granted.

HON. MR. WILLIAMS: Mr. Speaker, while I'm on my feet, may I have the leave of the House to discharge from the orders of the day the amendments standing under my name with respect to Bill 59. That bill has already been read a third time and passed.

Leave granted.

HON. MR. WOLFE: Mr. Speaker, I ask leave to discharge Bill 19.

Leave granted.

HON. MR. GARDOM: I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Committee on Bill 62, Mr. Speaker.

ATTORNEY GENERAL STATUTES
AMENDMENT ACT, 1982

The House in committee on Bill 62; Mr. Davidson in the chair.

Sections 1 to 9 inclusive approved.

On section 10.

HON. MR. WILLIAMS: Mr. Chairman, I move the amendments standing under my name on the order paper. [See appendix.]

Amendments approved.

Section 10 as amended approved.

[ Page 8764 ]

Sections 11 to 24 inclusive approved.

On section 25.

MS. BROWN: Mr. Chairman, we were told that this amendment was to correct a typographical error. I want you to tell me whether you think this is a typographical error. The Married Woman's Property Act as it now reads says: "Every woman who marries or has married after April 7, 1887 is entitled to acquire, to hold as her separate property and to dispose of in a manner...." That word "acquire" is being taken out and instead the word "required" is being put in its place. I want to know whether that is a simple typographical error, because it seems to me that it is a major change in that particular section.

HON. MR. WILLIAMS: Mr. Chairman, it is with the greatest reluctance that I stand to respond to the question just posed by the member for Burnaby-Edmonds. May I read the section: "Section 7 of the Married Woman's Property Act, R.S.B.C. 1979, c. 252, is amended by striking out 'required' and substituting 'acquired.' You've read the section incorrectly, hon. member.

MS. BROWN: My most profound apologies.

Sections 25 to 30 inclusive approved.

On section 31.

HON. MR. WILLIAMS: Mr. Chairman, I have no amendment standing in my name to section 31 which would be appropriate to be passed, but at your invitation I move the amendments standing under my name which would add sections 31.1 and 31.2. [See appendix.]

Amendments approved.

Section 31 as amended approved.

Sections 32 to 46 inclusive approved.

On section 47.

HON. MR. WILLIAMS: Mr. Chairman, I move the amendment to section 47 standing under my name on the order paper. [See appendix.] By way of explanation, by reason of the earlier amendments we have to change the proclamation section.

Amendment approved.

Section 47 as amended approved.

Title approved.

HON. MR. WILLIAMS: Mr. Chairman, I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 62, Attorney General Statutes Amendment Act, 1982, reported complete with amendments to be considered at the next sitting of the House after today.

HON. MR. GARDOM: Mr. Speaker, second reading of Bill 63.

FIRE SERVICES AMENDMENT ACT, 1982

HON. MR. WILLIAMS: The Fire Services Act in this province is the one which establishes the office of the fire commissioner, and the legislation as it presently stands provides for the imposition of a 1 percent tax on the premiums charged by companies with respect to fire insurance coverage. By reason of recent erroneous press statements, I wish to take this opportunity to ensure the House that this amendment, which deals with that taxation provision, does not impose a new tax; it deals only with the manner in which the amounts taxable can be determined, and with the rate.

The difficulty arises because it is rare in these days that fire insurance in its narrower sense is written. What is written is insurance with respect to property which covers other perils than fire alone. As a consequence, under the existing legislation the determination of the amount of any premium which may be related to fire coverage has been left to the decision of individual insurers, resulting in a wide variation in the proportion of premiums deemed to be premiums in respect of fire coverage.

Hence, this legislation will provide that in future the portion of the premium to which the tax will be applied will be determined by order-in-council and will apply equally to all property insurance — except for automobile insurance — irrespective of which insurance company may write the coverage. This will provide a more equitable and consistent manner for the determination of this tax. Because this will result in changes in the proportion of premiums which is subject to tax, and because it will necessitate some change in the rate of tax applied, the act also provides that the Lieutenant-Governor-in-Council may prescribe the rate. This will be based upon experience. It is not the intention of this legislation to impose additional tax burdens, but merely to ensure that by the application of a fixed rate of tax set by statute, the amount of tax recovered is inordinately high. Therefore, once the new audit and reporting procedures under this legislation are established, there will be an opportunity to determine what the total portion of premiums will be, subject to the tax, and therefore to adjust the rate of tax so as to keep the matters in balance.

The legislation we will have following this amendment is similar to that found in other provinces. I can only reiterate that it does not impose a new tax; it will just provide for a fairer method of determining the basis upon which this tax is to be paid. The tax is used to support the work done by the fire commissioner and his staff. Their work reflects in improved fire safety standards, and therefore in a reduction in the number of fire losses and, hence, in the number of claims against fire insurance companies. Therefore the use of this premium tax method which has been in place in this province for many years is justified, and we are not making anything more than an equitable provision for the determination, calculation and collection of the tax.

I move second reading.

[ Page 8765 ]

MR. MACDONALD: The Attorney-General has great faith in the government of which he's a member — on Mondays, Wednesdays and Fridays, at any rate. You're changing the imposition of the tax rate from being set by statute to being set by order-in-council. It seems to me that the whole experience of this government has been one of nickeling and diming the people of this province by regulation, always increasing the tax imposition and never reducing it. I suggest that this is one of those days when the Attorney-General shouldn't trust that group that he's sitting with. They're going to raise more money out of this bill, Mr. Attorney-General. You know that. Who's going to pay it? The fire insurance companies, who are mostly national or international? No, it's going to be paid by the public of the province of British Columbia.

The Attorney-General also says that the people of British Columbia enjoy competitive fire insurance rates.

HON. MR. WILLIAMS: I didn't say that.

MR. MACDONALD: You said that the companies out there have varying rates. Didn't you say that?

I suggest to you that the people of British Columbia are being soaked by the private insurance companies. I suggest to you that ICBC has deliberately restricted its share of the market to about 10 percent of fire insurance sales, has met the industry rates and not given the kind of price advantage to the people of British Columbia to which they're entitled. Anybody who owns a house knows that with little change from the time not too long ago when you could insure your home for three years, now you pay that for one year only. The fire insurance companies picked up additional revenue.

Let me quote in second reading, to be followed by questions in committee, some of the facts of what's happening in terms of fire insurance. If you look at the reports of the superintendent of insurance, you find the amount that is paid out in terms of claims, as compared to the amount received in terms of premium income, under the heading of property insurance. By far the largest aspect of that, of course, is fire insurance. Let me give you those figures, bearing in mind — I'll just give you some of them at this stage — that fire insurance is the biggest thing, and that when the Insurance Corporation of British Columbia sells car insurance, which is certainly a more complicated transaction than selling fire insurance, it has an overhead administrative cost of between 8 percent and 10 percent.

In the course of a letter to me objecting to my comments on this subject — I do not get unanimous approval in all sectors sometimes for what I say — the Insurance Bureau of Canada — which did not contribute to my election expenses in Vancouver East — said: "The average industry expense ratio in 1981 was approximately 34 percent, which included adjustment expenses." That's far too high. It's ridiculously high compared to the way we handle auto insurance through a public Crown corporation.

I'm saying that we have the situation which we had in this province in relation to auto insurance many years ago, when the private companies controlled the investment funds and did very well out of that. They controlled the bank. Now the fire insurance companies control the investment funds of the people of the province of British Columbia, and the percentage we're paying in fire insurance premiums is far too rich.

The figures reveal the percentage of the dollar you pay in fire insurance premium that is paid out in losses year by year — and I take them at random. In 1967 it was 50 percent, in 1975 it was 71 percent and in 1979 it was 64 percent — the latest figure from the official report. To me, 64 percent indicates 36 percent for overhead and profit, not to mention what the companies, of course, make on the investment of the capital from the fire insurance business between pay-in and pay-out.

HON. MR. GARDOM: That's only related to premium, eh?

MR. MACDONALD: The exact quotations for 1979 are: direct premiums written, $304 million; direct claims incurred, $194 million — percentage paid out, 64 percent.

In the course of the letter — which was not favourable so far as I was concerned.... I think I may have to sue on this letter. If anybody else had seen it, some of the things they've said here would be libelous. Since it was for my eyes only, I'd only be able to sue myself as having seen it.

It says here that in 1981 the private companies, while making only $908 million on investments in their underwriting portfolio.... Let me repeat that. They're complaining in exactly the same way the international auto insurance companies in British Columbia did prior to ICBC, which, with all its faults, has substantially reduced the cost to motorists.

HON. MR. GARDOM: Is that $908 million for B.C. or Canada?

MR. MACDONALD: Let me read the whole sentence, This is becoming a duet. Are you interested in this subject? Do you pay fire insurance on your home? It's not in Vancouver East, is it? This speech of mine is turning into a duet with the man who took my job in 1975. Please stay out of this for a minute: we're trying to get this session wound up.

HON. MR. GARDOM: I wish you'd left the car there.

MR. SPEAKER: Order, please, hon. members. Let's not interrupt the....

MR. MACDONALD: Do you want to be thrown out again? I'll pair with you. Who said there's no pairing in this House? Of course we have pairing.

In 1981 private insurers lost $833 million on their.... In the figure I mentioned they were making 34 cents out of every dollar they received while making only $908.4 million on their investments. Come on! Who are you fooling?

I say that ICBC under this government is deliberately failing to compete with private insurance companies in terms of price to the consumer. ICBC is a pussycat with respect to fire insurance. ICBC deliberately refuses to move into the market except to the extent of about 10 percent, I think. It's leaving the people of the province of British Columbia to the tender mercies of the international fire insurance companies — and I include Toronto when I say international fire insurance companies.

In a period of inflation we're dealing with something that affects the living costs of practically every family in the province of British Columbia. It's time to call a halt to this soaking of the public by the private companies in the fire insurance field.

[ Page 8766 ]

The tax is a minimal thing. We know it's going up. The important thing is that some action be taken about overcharging the people of this province on fire insurance. The investment pool into which they pay should be used for the benefit of British Columbians; the income from that investment pool should go to reduce their fire insurance premiums.

HON. MR. GARDOM: Apropos the remarks of the last hon. member, it's very true that ICBC does provide excellent service, and I believe it enjoys the lowest administrative costs of any insurer on the continent. I think they are to be greatly congratulated for that and for the type of operation that they carry on. Also, a few years back when I was on the board of that corporation, it was able to provide fire coverage when it was not obtainable from private insurers carrying on business in B.C. The Insurance Corporation, which my colleague the Minister of Agriculture (Hon. Mr. Hewitt) may well wish to speak on, does indeed provide fire coverage today at, I gather, pretty well the same rate. One reason, of course, why the rate has increased right across the board is that homes have become more expensive; also, the cost of repairing or rebuilding after a fire has increased dramatically.

The member made the point, which is very valid, that the private insurers — who are entitled to do this if they so choose — do not plough back the amount of their interest income into reducing the cost of premiums. Insurance is a prepaid trust. In tough times, the prepayments don't come in quite as quickly; very often people pay their premiums on a monthly or annual basis. So there are other sides to the coin. But I think he made some valid points.

HON. MR. HEWITT: I'd like to make a few comments, since the issue of ICBC, a state-owned insurance company, has been raised. I have sent for the ICBC annual report. When you look at the low administration costs of ICBC, you must recognize that it is a melded figure of automobile and general insurance. I believe the member will find that his 8 percent figure is somewhat inaccurate. But I will be prepared to stand corrected after I review the report and advise the member.

My concern, Mr. Speaker, is that the member opposite would lead you to believe that the marketplace in which competition is available does not work. He would prefer to see 100 percent fire insurance coverage provided by a state-owned insurance company — the same way he and his party would prefer to see a state-owned automobile industry in this province, and everything that the socialists could get their hands on. We have a presence in the general insurance field, and I am proud of the fact that it is just a presence and not a total impact on those private insurance companies which compete in the fire insurance or general insurance field.

When we talk about the private insurance companies' profits, we can show the member opposite — and I'm sure he's already aware of it — that there are substantial underwriting losses incurred by general insurance companies in the field. So when he makes an all-encompassing statement about this tremendous profit made by insurance companies, I think he must also recognize that there are substantial losses from time to time for those same insurance companies. The resolution he would like to see, which is a 100 percent involvement by ICBC in the whole insurance field — kick out all the private insurers — I don't support at all. I can support the concept of ensuring that people in British Columbia can get fire insurance, I can support the concept to the point that we should have a presence, but I would not support a concept that the private insurers are "dishonest" in making a profit, and therefore should not be in the position of selling insurance in this province.

MR. MACDONALD: On a point of order, I ask the minister: was he quoting me when he used the word "dishonest"?

MR. SPEAKER: Order, please. That's not a point of order.

MR. MACDONALD: Well, it's a point of correction, Mr. Speaker — that's what I rose on.

MR. SPEAKER: I can't find one of those in my little red book.

HON. MR. HEWITT: Mr. Speaker, I just wanted to make that comment to the member opposite, because he leaves the impression that there are massive profits made by the private insurance companies on the backs of property owners. He is fully aware that the value of the homes that are insured is up; the cost of repairs or replacements for those homes, should there be a fire, is up; and therefore the value of claims, should they be incurred, would be up.

The one final point I would make, Mr. Speaker, is that on those private insurance company profits that he is so concerned about there are corporate taxes which have to be paid, which contribute to provincial revenues which provide the people's services we're so proud of.

HON. MR. WILLIAMS: Mr. Speaker, my admiration for you, sir, grows day by day for the qualities of forbearance that you show. This debate we have had from the second member for Vancouver East (Mr. Macdonald), the hon. House Leader (Hon. Mr. Gardom) and the Minister of Agriculture (Hon. Mr. Hewitt) has been an interesting one. The only difficulty is that it has nothing at all to do with the bill which is before the House for consideration. We're not talking about insurance rates, ICBC or replacement costs for destroyed houses. But I know that some offence to the rules of this House is acceptable, and I do congratulate you on your forbearance.

MR. SPEAKER: Order, please, hon. member. This line of debate is out of order under this bill. [Laughter.]

HON. MR. WILLIAMS: Well, Mr. Speaker, I certainly do accept your ruling. I didn't know who was speaking on the other side of my congratulatory remarks, but if you wouldn't like me to invite such a statement, I'm sure.... However, we'll continue.

In closing, may I simply correct a misimpression that the hon. second member for Vancouver East had as a result of my opening remarks. What I said was that under the present practice different companies have different approaches in calculating the portion of the property premium which they attribute to fire insurance. This legislation will correct that practice and will ensure that there is consistency in the practice by which such determination is made. That will ensure that maybe those companies which haven't been making their proper contribution to this tax will do so, and it may

[ Page 8767 ]

also ensure that those companies which have been over-contributing do not continue to do so. I think that's the appropriate way in which taxes should be viewed.

Mr. Speaker, I move second reading.

Motion approved.

Bill 62, Fire Services Amendment Act, 1982, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

ESTIMATES: MINISTRY OF INDUSTRY
AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 51: ministers office, $249,538.

HON. MR. PHILLIPS: To continue on from when the House adjourned last evening, I will depart from that line of debate. I don't want to talk about the socialist lilies of the valley that might be growing up there and were involved in some of the analysis that we did with regard to the environment.

I do once again want to point out to the House the numerous studies that were done on this development during the period 1976 to 1980. To reiterate for the benefit of the House, this is probably the most studied project that has ever taken place not only in North America but indeed anywhere in the world. To add to that, I want to say that we have studied practically everything possible prior to making a decision. In this regard, I want to say that the cost-benefit analysis, which I will table very shortly, was developed starting back in 1976. Although it was not finite in its delivery, it certainly was a guide to cabinet in making decisions as we progressed on this project. I want the House to understand that.

I will now table the results of studies and reports completed this past year. I know that members of the opposition will realize what a fantastic job we have done in putting this project together. The first document that I would like to table is the comprehensive agreement between the province of British Columbia and Quintette coal. The director of northeast coal development, Mr. Basford, the Attorney-General (Hon. Mr. Williams) and a battery of lawyers worked on this for some time. It is probably the most comprehensive agreement that has ever been developed in putting a project like this together, and I would like to....

MR. LEGGATT: Did they do the debenture for you too?

HON. MR. PHILLIPS: Yes, Mr. Member, the lawyers were certainly involved in protecting the people of British Columbia in developing that bond for $700 million, which the companies.... Was it $700 million or $600 million? It was a tremendous amount of money anyway.

MR. CHAIRMAN: Order, please. Possibly the member would prefer to wait until we are in the House for any tabling.

HON. MR. PHILLIPS: No, I'd like to table these now, Mr. Chairman, because I know that....

MR. CHAIRMAN: I realize that you would like to, but....

HON. MR. PHILLIPS: You mean I can't do it now?

MR. CHAIRMAN: Unfortunately, hon. member, the tabling of documents must be done in the House, not in committee.

HON. MR. PHILLIPS: Are you sure we can't suspend the rules and ask leave of the House, Mr. Chairman. There must be some way we can do this, because you know the minister desires to get these documents on the table.

MR. CHAIRMAN: No, hon. member, we cannot ask leave. The documents must be tabled in the House proper and not in committee. It can be done forthwith when the committee rises.

Interjection.

HON. MR. PHILLIPS. Well, do you want to look at it?

MR. LEGGATT: Yes.

HON. MR. PHILLIPS: I don't know whether I can legally do that. I'm sort of caught in a little quandary here.

MR. LEGGATT: Yes, you can do it. Trust me.

HON. MR. PHILLIPS: Yes, I move the committee rise.

Motion approved.

The House resumed: Mr. Davidson in the chair.

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

HON. MR. PHILLIPS: Mr. Speaker, I ask leave to table documents. I'll tell you what they are as soon as we get back into committee.

Leave granted.

Hon. Mr. Phillips tabled agreements and reports related to northeast coal development.

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

ESTIMATES: MINISTRY OF INDUSTRY
AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 51: minister's office, $249,538.

HON. MR. PHILLIPS: Now it's perfectly all right for me to refer to tabled documents.

I have just tabled the comprehensive agreement between the province of British Columbia and Quintette Coal Ltd. I have tabled as well a comprehensive agreement between the province of British Columbia and Teck Corporation. As these are large legal documents. I have also tabled the northeast

[ Page 8768 ]

coal development notes to the legal framework; in other words, I've had the comprehensive agreement put down so that an ordinary layperson like myself, not a lawyer, can understand it. I have also tabled the northeast coal development planning and implementation document, and a cost-benefit analysis of northeast coal development.

I would like to say a few words about that cost-benefit analysis if I may. This analysis, which the opposition has been waiting for, is certainly a very positive report, showing a positive return to the taxpayers of British Columbia for the money they are investing in the infrastructure for northeast coal. This report was prepared not only by provincial government economists, but private-sector consultants hired by the province and the government of Canada. I hope it puts to rest, once and for all, irresponsible charges that the taxpayers of this province would be subsidizing northeast coal by....

The figures range from hundreds of millions of dollars to a billion or a billion and a half. They are irresponsible statements, because the Price Waterhouse report previous to this....

MR. HOWARD: They're accurate.

HON. MR. PHILLIPS: No, they're not accurate, my friend. They're not accurate at all and you know it.

MR. HOWARD: I know they are accurate.

HON. MR. PHILLIPS: They're not accurate.

I don't want to get into an argument with the member for Skeena. As I was saying, it puts to rest once and for all.... Maybe the member for Skeena would rather that we not put our money in. Maybe we should subsidize the construction of a coal mine in Peru or something that will eventually take jobs away from British Columbians.

MR. LEGGATT: I thought you didn't like cost-benefit analyses. You told us you didn't think they're worth anything.

HON. MR. PHILLIPS: I don't like cost-benefit analyses. I said it in the House last year. But it's a good report, and now that we've got it we're going to live with it. However, there are variances, and it's a very conservative report.

The economists in my department who worked long and hard on this report certainly deserve a great deal of credit, and I want to give them that credit right now.

The work on this report started in 1976. It was rough to start with and we kept developing; but the scene changed, as you know. We had different mines, we changed the railroad, and they were all benefits from the analysis that we did as we went along. It's been an ongoing tool and guide for cabinet in making their decisions.

As I've said before, I don't think there's ever been a project put together in the history of this province or any other province, or any state in the union or place in North America, or probably in the world, that has been studied as much as this project. It just shows that we have done our homework. The project definitely is a great economic development project, not only for British Columbia, but indeed for the whole of Canada. Because we did our homework and moved slowly — naturally, we had to wait to get a sales contract — this is the only project of any size happening anywhere in Canada today. Unlike some of the other projects that were talked about and held out as carrots — that western Canada was going have great economic development — this little government, because we did our homework and we did our planning, was able to put this project together.

I want to point out to the members of the House that this cost-benefit analysis that we have here — the one that I just tabled — differs from the Price Waterhouse cost-benefit analysis in that the Price Waterhouse report included government revenues from personal income tax from the workers on the project. The cost-benefit analysis done by our economist does not include that benefit, because they took the attitude at that time that if the workers weren't involved in the northeast coal project they would be involved in one of the other megaprojects; therefore there would be no benefit because all of the people would be employed. As you can see in the climate that we're in now, with the economy the way it is, those people would not be employed, because there are no other projects. Therefore the timing of the projects could not be better in our economic history, and certainly the member for Prince Rupert (Mr. Lea) well realizes the tremendous impact that it is having on the largest city in his riding.

As I said last night, it has been the dream of the city of Prince Rupert since 1910 to become a major port. Well, this government recognized that dream and did something about it, and now because of our strategy and work, that dream for the great city of Prince Rupert has come true; it's happening. I know there are still people around today.... They even phone me or contact me once in a while, and they say: "Is it going ahead? Is it happening?" Of course, I'm always pleased to say: "Certainly it is."

There is another difference between the Price Waterhouse report and the study done by our economists; that is, that our economists put the report together based on 1980 dollars. The Price Waterhouse report is in 1981 dollars, plus they have a column of benefits in escalated dollars, which certainly shows more benefits accruing to the taxpayers of the province. The other difference, of course, is that both reports are based, I guess, on 7.7 million tonnes of coal, and already we have exceeded the 7.7 million tonnes that the study was done on. At present we have firm sales contracts for 8 million tonnes.

As you know, Mr. Chairman, I'm an eternal optimist, and I am certainly looking forward, of course, to adding sales contracts in the not-too-distant future, and that's where the real benefits start.

The other point that I must make is that the cost-benefit analysis really shows that when you write off all of your capital, what do we have? We have that infrastructure in place owned by the taxpayers of British Columbia for future economic development. I'll tell you, if that isn't a good deal for the taxpayers and for the province, I don't know what is. It is probably one of the best deals that has ever been put together.

Again, Mr. Chairman, for the benefit of those within hearing distance, I will not only table these reports in the Clerk's office, but there will be copies in the ministry library, there will be copies in the office of the director of the regional resource analysis branch in Victoria, in the office of the, Assistant Deputy Minister of Industry and Small Business in Vancouver, in the office of the British Columbia coal coordinator, in the office of the director of northeast coal in Vancouver, in the development offices in Chetwynd and Dawson Creek, and in the public libraries in Vancouver, Prince George, and Prince Rupert; and there will also be internal

[ Page 8769 ]

distribution. So we're making the reports available, as we did with the hundreds of reports that I tabled last year, giving them as wide a distribution as possible, because we want everyone to have access....

MR. RITCHIE: To the facts.

HON. MR. PHILLIPS: That's right — access to the facts. I know that this minister has been accused of hiding the facts, but it wasn't right, and the accusations, of course, were unfounded.

There is a lot that I would like to say about other things in northeast coal and my ministry, but I will now take my place and allow the official opposition to compliment me on the tremendous job that I have done. I know that my official critic is just waiting over there to jump to his feet and tell me what a tremendous job this ministry and the devoted and loyal staff have done over the past year.

Certainly, if you pay attention to the annual report that we just tabled, you will find that last year this ministry did more work for less money. In other words, we have cut the fat out of this ministry. There wasn't any there to start with, but we've cut a little more of it. We run a lean ministry. Our main objective in this ministry is performance for the taxpayers of British Columbia. We have, with less money, produced greater results. I know that the official critic from Her Majesty's Loyal Opposition will recognize that when he reads the report.

Thank you for paying such detailed attention, Mr. Chairman. I look forward to saying a few words later.

MR. LEGGATT: First of all, I want to congratulate the minister for an incredible performance yesterday. I thought that his description of the Rocky Mountain miniature rose and the creeping blue violets which had been protected by the sensitivity that only this minister shows to things like the Rocky Mountain rose was really something we hadn't seen in the Legislature. It was a very enjoyable performance. I think the minister is to be congratulated in deflecting hostility before he gets underway with his estimates.

Last year we had a look at the estimates and had a debate in the House. I thought the minister came on a bit like Jekyll and Hyde. He seemed to change personalities depending on the issue that he was directing his attention to. This year it hasn't happened. This year, in fact, he has come on a little bit like Peter Pan dancing among those Rocky Mountain roses, telling us about the great sensitivity he has to the environment. I'm glad the minister is now showing sensitivity, because there are a few people who have visited Williston Lake and looked at those trees growing out of the middle of the lake. There are some lessons to be learned in the way we go about doing things in the province of British Columbia. The minister is on the right track. There's some improvement in terms of the environment.

I want to quote something the minister said last year when he commenced his estimates. In his initial remarks last year he said this about his performance and his government:

Those in the workforce, those union members, are not worried about losing their jobs; they're not worried about the economy going backward, as they are in other provinces and jurisdictions in Canada. That is because we have done a good job of managing the economy of the province of British Columbia.

This year the minister was very silent about the economy of British Columbia, and he's got good reason.

We'll leave northeast coal for a little bit. Let's talk about the economy generally. We are now facing more bankruptcies and foreclosures than we've ever seen in this province since the Depression. We have seen UIC claimants in this province rise to 180,000. Over last year alone, there's a 128 percent increase in UIC claimants. We have the worst unemployment record west of Quebec. In other words, Ontario, with its car industry completely under and almost totally shut down, has still got a better employment record than the province of British Columbia. We have a worse unemployment record than Manitoba. Saskatchewan or Alberta. There's not much to be proud of in trying to defend this government in what is an economic mess. As I said, it's the worst economic record outside of Ontario.

Perhaps more importantly, the thing that the minister has always prided himself and his government on has been the question of job creation. In spite of the numbers, whenever we've raised the problem of unemployment in this province, he always says: "Oh, but we're creating more jobs than anyone else. Well, that is no longer true. The figures from the Ministry of Labour confirm that we created 50,000 fewer jobs this year than last year. In spite of northeast coal, we created 50,000 fewer jobs.

What does the Employers Council of British Columbia have to say about investor confidence in British Columbia? They should be confident with this free-enterprise group here running the province, but the Employers Council says that it's the worst since the Depression. Very rarely do we consider them close friends.

MR. RICHMOND: It's because of your Liberal friends in Ottawa.

MR. LEGGATT: Oh, you have to blame Ottawa. Who are you going to blame next? It's either Ottawa or the United States or "those socialists." Sometime the buck has to stop with the government, and they have to take responsibility for managing the economy of the province. You can't keep hiding, behind these excuses, like "it's Trudeau's fault" or "it's Reagan's fault."

Interjection.

MR. LEGGATT: No, my friend. When you are government, stand up and be counted and say: "It's our government, and we'll take responsibility, and we'll try to do something about the economy."

Mr. Speaker, this is a one-project government and a one-project minister. This minister has done an aggressive job around the northeast coal question. I give him full marks for his try in that area, but I'm afraid that it's a try that will not bear serious analysis in terms of the viability of the project.

Sometimes it's important to examine statistics, you know. You want to take the areas closest to the northeast coal project. Let's have a look at Dawson Creek. Over this year Dawson Creek has gone from 932 people to 1,851 people drawing unemployment insurance; that's an increase of 98.6 percent in Dawson Creek. Fort St. John has gone from 852 to 1,785; that is up 109.5 percent. Prince George has gone from 3,216 a year ago to the latest figure of 7,482; that's an increase of 132.6 percent. Prince Rupert has gone from 1,302 on the dole to 2,491; that's an increase of 91 percent.

Those are the communities that are most affected by the northeast coal project. If you want to look around the

[ Page 8770 ]

province to see what's happening elsewhere, those figures are modest. In other areas in this province we are facing an economic crisis, an economic disaster and, yes, a depression of the worst order. The problem with this minister's approach is that his entire attention has been hypnotized on one project. This is a one-project minister.

As a result of concentrating on one project, we have seen the small business sector decline to the worst condition it has been in since the Depression. We are facing bankruptcy and ruin in the small business sector because of the direction of public funds. The direction of this government and this cabinet has been that the one thing that is going to go is northeast coal. Everything else has to take second place.

I congratulate the minister for the clout that he obviously has in cabinet and on Treasury Board, and I congratulate him on doing a good deal for his own constituency in the province. The rest of the province is going to hell in a handbasket, my friend. The rest of the province is in trouble.

Interjection.

MR. LEGGATT: The member for Omineca (Mr. Kempf) can groan all he likes, but he knows in his heart of hearts that that statement is true.

MR. KEMPF: You've never been to the north. Come on up to my constituency.

MR. LEGGATT: Go outside and talk to the people in the lineups outside the Salvation Army; go around the lower mainland and talk to people about this economy. I'm not preaching doom and gloom; I'm preaching the reality that's out there. You do not solve that problem by putting all your eggs in the northeast coal basket.

If, by not being one-project ministry or a one-project government, you had decided to take the massive amounts of public money that are going to be spent on building that railroad, and to use that money in alternative ways, then you would be starting to come to grips with some of the economic realities of this province. But instead we have allowed everything else to go, to be sacrificed, because of the minister's dream. The minister dreams well, but he reasons little, Mr. Chairman. The reasoning inside this project will not stand careful analysis. The risk analysis is what the minister should be looking at, not just the cost-benefit analysis. He is risking public funds on that project, drying up public funds for other purposes, because we know this business of taxing people is not a bottomless pit. The result is that because of that concentration on one project, a project that has internal flaws which we'll deal with.... We can no longer be swayed by the minister's charm, because the minister's charm won't overcome the reality of the depression in the province of British Columbia, a depression that he is contributing to because of the emphasis on a single project and his sacrifice of the rest of the things that must be done.

I've had only a very brief chance to look at the cost-benefit analysis, and if my figures are in error, I'm sure the minister will correct me. First of all I want to quote to the minister what he thinks about the cost-benefit analysis. This is what the minister said on March 26, 1981, in answer to a question of mine in the House. I asked him, in respect of the northeast coal deal, as to whether a cost-benefit analysis has been undertaken and what stage that analysis is in. The minister's reply was this: "In answer to the member's question, yes, there is a cost-benefit analysis going on. But I think the member knows as well as I do that that is not really an exact science. It depends on who is doing the study. Cost-benefit studies at the best of times depend on what one wishes the outcome to be."

AN HON. MEMBER: Who said that?

MR. LEGGATT: Who said that? "Let's face it," said the minister, "that's the reality. That seems to amaze the socialists across the way, but that is a fact." Well, Mr. Minister, it is a fact. Cost-benefit analysis is only a prediction about the future — just the same as Jeane Dixon predicts the stars — and the minister's assistants, those star-gazers in the ministry, have tried to gloss over this project using Pollyanna rose-coloured glasses about northeast coal. And I congratulate the minister for putting the best light he possibly could on a project which will still squander millions and millions of tax dollars.

I'm going to tell the minister in some detail how I come to this conclusion and give him an opportunity to tell me where I'm wrong. If we had decided to sell coal or get rid of coal.... After all, we weren't using it. No doubt the minister and I agree that we've got enough coal, and let's sell it and make a profit. There is no dispute about that; we'll sell coal out of the northeast, and so will the minister, and we'll work just as hard as the minister trying to market that coal. But if we'd said to the Japanese, "We've got coal, and you need it for your steel mills; come on over and take it," and the Japanese said, "Well, we will if you buy us a railroad...." That's the bottom line in the project. We have provided the Japanese, not the province of British Columbia, with a railroad. That railroad that the minister is so proud of, which, by the way B.C. Rail wouldn't touch with a ten-foot pole, knowing that it couldn't possible make a profit on the railroad.... They had to have a government handout to build the railroad.

The key problem in the project is the subsidy on the railroad. The federal government's negotiating stance wasn't a bad one. Even on the basis of the minister's own cost-benefit analysis, you will see that the federal government looks pretty good. The provincial government doesn't look very good if you compare those numbers. When you start crunching numbers and making a prediction for 15 or 20 years, if you make just a tiny mistake, it becomes a foot long by the end of that 15-year period. So we're all star-gazing, you know. We're all looking at down-side and bottom-side. It's like trying to predict when the depression is going to end; nobody really knows.

The cost-benefit analysis itself comes to certain strange conclusions, and makes, I submit, inaccurate and false assumptions. Let's look at some of them. First of all, the ministry's officials and their consultants have used a 20-year period, not a 15-year period, to try to determine the viability of the project. The minister knows that he hasn't got any contracts for 20 years. He's got a 15-year contract for 7.7 million tonnes a year. Now he's announced that he's got another 300,000. That will probably bring it up to about 8 million tonnes a year. That's not significant. They lose more coal off the top of the cars going into Roberts Bank than 300,000 tonnes. The minister knows that 300,000 tonnes is not significant. The minister knows it's not, and I'm glad he's shaking his head in agreement.

[ Page 8771 ]

HON. MR. PHILLIPS: Be responsible. You know that's not true.

MR. LEGGATT: Yes, I know it's true. I know that 300,000 tonnes will not make this project in any way viable. The minister knows it's true.

HON. MR. PHILLIPS: You know they don't lose 300,000 tonnes going into Roberts Bank.

MR. LEGGATT: I know the minister can agree with me.

MR. CHAIRMAN: Order, please. The minister will have an opportunity to respond when the member takes his seat.

MR. LEGGATT: The minister is going to agree with me that at least 11 million tonnes more — and probably closer to 15 million tonnes more — a year are going to have to be carried over that railroad before the public receives any protection with regard to its investment.

The first thing about this cost-benefit analysis that I see is that they've used 20 years. That's the colour they put on their glasses. It makes it look a lot better when you use 20 years. But then when I see the cost-benefit comparison — what they call the central case — I looked to see what they've done with the Tumbler Ridge branch line. They're using a cost figure for the Tumbler Ridge branch line of $267.1 million. If its been raised....

HON. MR. PHILLIPS: Look down below. Add it up and you'll find that it's $467 million. My gosh, I'll have to come over and help you oppose this project.

MR. LEGGATT: All right, $467 million. It's not on the list, but I'm very happy to accept the minister's correction. He says that they're using $467 million as the final public cost investment to build the Anzac line. Am I correct?

HON. MR. PHILLIPS: I said that this was all in 1980 dollars, and so are the benefits.

MR. CHAIRMAN: Order, please. Hon. members, we are in committee. A member can stand at any time to reply, but before that happens one member must take his seat before another member is recognized. The member for Coquitlam-Moody continues. He is free to yield at any time to the minister.

MR. LEGGATT: Remember that where that figure is used — whether it be $267 million, $450 million or $460 million — if they are only $10 million out in estimating the cost of the tunnelling and the branch line, this cost-benefit analysis goes down the tube. What is a $10 million or $100 million error at the time the cost-benefit prediction is made, by the end of the road becomes a massive error.

I'm going to quote from page 4, I think, of it. It says: "BCR revenues of $216 million are expected to exceed their costs, excluding the branch line, by $16 million." The branch line is the whole key to the cost-benefit analysis project. The key to the analysis of northeast coal is that you've given a railroad away. You have built that railroad with tax money, money that you have no hope of recovering unless the tonnage over that line is increased to a fantastic degree.

AN HON. MEMBER: What would you do?

MR. LEGGATT: I'm going to tell you what I'd do.

I want to note that the report says something else. One thing about those wonderful economic star-gazers in the minister's department is that they hedge their bets — the Jeane Dixons of the civil service. There they are predicting that everything's coming up roses. "Only time and the efforts to implement the project by the various participants will determine whether these projected net benefits will actually materialize." There's nothing, definite about that.

HON. MR. PHILLIPS: Would you stop the project?

MR. LEGGATT: No.

HON. MR. PHILLIPS: Oh, you wouldn't?

MR. LEGGATT: No, I wouldn't stop the project. But we'll tell you what we're going to do with the project. Before we do, we want to tell you how bad the deal is. You have a cost-benefit study that took six years. You went into a project without a cost-benefit study, which is not a good way to do business. You take six years to produce a report, and the minister says the report's not worth anything anyway, because cost-benefit analysis really doesn't count. I haven't heard him saying that today, but I hope he'll get up and hold to the position he took in the House a year ago, that cost-benefit analyses weren't worth the paper they were written on. You said you could make them look like anything you wanted to, and you have. You've turned a sow's car into a silk purse overnight with those wonderful star-gazers of your department.

The facts are these. First of all, round out the cost of the Anzac line at $500 million and add the interest cost of $75 million — that's just to get it underway. An operating subsidy will be about $7.7 million in the first year — we're estimating that to be 1984 — and that'll give you $582.7 million. You're going to get something back. Your surcharges on the basis of your present tonnages are going to give you $22.25 million, so that's got to come off. That gives you a debt at the end of the first year of $560.45 million. Without additional tonnages.... If the minister can say he's got another 15 million tonnes, I'll be the first one to apologize. I'll be the first one up to say congratulations. It's a viable project. But on the basis of 7.7 million tonnes, the minister knows — and he knew when he made that Freudian slip in front of the press that he needed another 11 million — that the thing won't wash. The minister is a good businessman. He has a background in business, and I respect that. He knew this project was dicey all the way through. He knew it in his heart of hearts. He knows he's got to sell a pile of coal before this breaks even.

Let's go to 1985. That debt goes up to $629.96 million. In '86 it goes to $709 million. In '87 it'll be $801 million. If you take the life of the contract.... Instead of looking through rose-coloured glasses, I'm going to look through dark glasses. I'll admit this is a pessimistic look — to be fair. Let's assume the minister doesn't sell any more coal than he's contracted for. That's a fair assumption it could happen. By 1993 we're in the glue $1,629,000,000; by '96 we're in the value $2,329,000,000; and by 1998 we're in the glue $2,963,000,000. I know the minister can argue that I'm not taking into account inflated dollars. Fair enough. I'll listen to

[ Page 8772 ]

that argument. But we're still looking at a project — a massive tax subsidy — based upon the minister's hunch about world coal markets. I say to the minister that that hunch should have been backed up with evidence and facts.

You should have reviewed the Massachusetts Institute of Technology's world coal study, which predicts real coal demand for the next 20 years — and it isn't there. There is a surplus of coal, and it's a buyer's market, and it's going to be a buyer's market for a long time yet. Japan has shrewdly — and I give them full credit — out-negotiated the minister to the point that we have built them a railroad, subsidized the deal and got rid of a non-renewable resource.

HON. MR. PHILLIPS: If it's such a bad deal, why wouldn't you guys close it down if you were in government?

MR. LEGGATT: I'll be happy to tell you why I won't close it down. We will renegotiate that deal and obtain, first of all, Canadian shipping to carry that coal to Japan and get the shipping industry underway in British Columbia, as the minister should have done. We will begin a steel industry for British Columbia, using Japanese technology and using the leverage of those raw resources, which the minister didn't do. Yes, and we will produce a manufacturing assembly plant for a major Japanese automobile firm right here in British Columbia.

Those are minimums that the minister should have obtained before he gave away the precious resources of British Columbia. But he didn't get it; he didn't get it because he was desperate for a deal. The deal was built on political emergency. The government was in trouble, and he had to make an announcement. If the minister had kept his cool, the deal would have been very different. He didn't protect B.C. suppliers and Canadian suppliers. A procurement policy should have been built in, guaranteeing that British Columbia workers and suppliers come first. Right now we're building two ships in Korea, two in Belgium — at least the Japanese are. We are one of the greatest ship-building provinces in the world, but nobody gives our people a chance to build ships.

A stage two report on procurement policy shows that a substantial amount of the contracts don't go to British Columbia at all; they go to foreign suppliers. Yes, I know; the conveyor belt, as the minister tells me, is practically all being built right here in Canada, in British Columbia. The fact is that the sophisticated technology and the engineering are going abroad, not to British Columbia. That should have been built into the contract and it wasn't. And we should be been producing the railcars for that project right out of Squamish. They should never have shut down that railcar industry.

I'm being waved at by the Chairman, so I'll be very happy to sit and listen to the minister's response.

[Mr. Strachan in the chair.]

HON. MR. PHILLIPS: I thought the official critic for the opposition would have come down out of the clouds, but he's still up in the clouds. He talks about giving away those precious resources. He also says we should sell more coal.We're not giving away any precious resources; we are providing jobs and economic development for British Columbians. If he and his leader continue to chastise our number one customer in public, we may not get those additional sales.

He'd build a steel industry in British Columbia. That's a typical socialist, political dream that you hang out there. The government would probably build the steel industry, just like they built the railcar plant, the most efficient railcar plant in North America. He wanted us to keep that open and produce cars at a cost 25 percent higher than they can be produced anywhere else in Canada. We wouldn't have had room on the British Columbia Railway to run the trains, to haul the merchandise in British Columbia; it would have been filled up with railcars had we kept that plant open for the last five or six years. That's good political fodder, but I would have expected better from the official opposition.

He talks about giving away those natural resources. I wish the opposition would be realistic. Coking coal is an international commodity, and the Japanese don't have to buy it in British Columbia. They can buy it in Australia; in the United States; they can buy it from China and other countries. It's an international commodity, and it's a very competitive world out there. As I have said before, I give a lot of praise to the British Columbia and Canadian coal mining companies that can produce that coal and ship it four times farther than the Australians have to ship it, and yet be competitive on the world market. I give them credit, and I give our transportation system credit, in spite of the fact that we're subsidizing the movement of grain out of western Canada on the backs of merchandise moving in British Columbia. Our lumber industry, our mining industry, our coal-mining industry, all are subsidizing the movement of grain out of western Canada, and have been for years. Although our railway system is hampered by having the Crow rate on its back like a saddle, our transportation system and our railways can still be competitive in the world.

I'm not going to go into all of the statements that the official opposition have made about this project, because they've got their tongues in their cheeks when they start talking about renegotiating it. It's good political fodder to talk about Canadian ships. The member was in Ottawa, and he knows the decision was made in Ottawa not to have a Canadian merchant marine. He knows that federal laws have to be changed in Ottawa to make British Columbia companies competitive on the high seas. I ask that member, who comes out here and floats around that great big political promise of a Canadian merchant marine: what did he do when he was in Ottawa to have the laws changed? What did you do when you were in Ottawa? All you did was get in bed with the Liberals and support some of the policies that are hampering the economy of British Columbia and Canada today, and you know it.

Mr. Chairman, I'm glad that that member stood in this Legislature and said that I was a one-project minister, because nothing could be further from the truth. With all of the negotiations that have been carried on with regard to northeast coal, we have moved on more fronts than any other government in Canada. You can talk about the unemployed; I'm not happy with it. There's nothing I can do about the world market for lumber, although this ministry, working with the lumber industry, is indeed trying to do something to diversify our markets, and we have been successful.

There's nothing I can do about the world situation in the mining industry, although I am working — and our ministry is working — to have British Columbia minerals further processed here. That is something real; it is alive, and it will happen within this decade or the early part of the next. It won't be an airy-fairy steel mill that can't compete when steel

[ Page 8773 ]

mills all over the world are having difficulty. I want to remind that member that indeed Canada has a very efficient steel industry — one of the most efficient in the world. I want also to remind that member that that very efficient steel industry in eastern Canada buys its coking coal in the United States of America. So I guess you would have to say that the United States of America are giving away their precious natural resources. I just wish the member would come back to earth.

I want to give the member a few statistics. As the member knows, it was this government that brought in the assistance to small enterprise program to assist the small businessman. Since its inception we have created approximately 1,894 jobs, and every member in this Legislature was given a list last night, or early today, of the projects that have taken place in his or her constituency. Mr. Member for Coquitlam-Moody, a number of those ASEP loans have gone into your riding.

There are approximately 3,200 jobs in our industrial park program. Our economic development commissions have helped industry and those interested in establishing in British Columbia. That has been one of the best programs brought in anywhere in Canada. I didn't go out and spend millions and millions of taxpayers' dollars establishing offices of the Ministry of Industry and Small Business Development everywhere in the province, but I did bring in this industrial commissioners program so that the communities could help themselves, with our assistance. We are working with each individual community. They hire the commissioner; we assist in the funding. It's been a fantastically successful program.

Our small manufacturers assistance program, which this government brought in, has created approximately 605 jobs. Our low-interest loans assistance program, LILA, and the LISA program have created approximately 2,325 jobs; the tourist industry development subsidiary agreement has created approximately 2,798 jobs.

I hope you are listening, Mr. Member; all in all, those programs have created approximately 10,912 jobs. They are spread throughout the province; it's happening out there in the community. Loan after loan has helped the small business community off the ground to create new products and employment. It's happening. It's been a good program.

You talk about my being a one-project minister. All you have to do is go out there in the real world in British Columbia and take one aspect alone: the tourist industry development subsidiary agreement. You don't even have to take the whole agreement; just take the ski industry anywhere in this province. Through that agreement we are helping to make British Columbia a 12-month-a-year recreation area. I don't care whether you go to Mount Washington on Vancouver Island, the first destination ski area established through that program. It has done a great deal to help the Comox-Courtenay area. It has created hundreds of jobs in that particular area. It helps the economy of Vancouver Island.

MR. KEMPF: Hudson Bay Mountain.

HON. MR. PHILLIPS: Yes, I was just going to mention Hudson Bay Mountain in Smithers, which brings in hundreds of skiers in the wintertime from the neighbouring province of Alberta.

You can talk about Whistler. You can go to Hemlock Valley. You can go into the Kootenays. You can go into Kimberley. Unfortunately, I couldn't be in Kimberley last Saturday when we opened up that fantastic development, which was a result of positive programs brought in by this ministry.

You can go to Panorama, Penticton, Kelowna, Kamloops or Vernon. You can go anywhere in this province. I'll tell you that my dream of making British Columbia the Austria of North America will eventually come true because of the initiative....

You say I'm a one-project minister. Just go up the Island to Duke Point. When that socialist opposition was government there was no development at Duke Point; you held it up because you couldn't negotiate with the federal government. What was one of the first initiatives of this ministry? To get that fantastic development going at Duke Point. Now we have an industrial park which will be home to flourishing industries before the end of this decade.

Go to Roberts Bank. What's happening at Roberts Bank? Hundreds of people are being employed today. It will be another major development here in British Columbia to carry resources in the future. I'm looking to the future. This ministry could never be accused of just living from election to election. Our plan has been from decade to decade — long-term planning. The results are happening right here today.

I want to tell you, Mr. Chairman, that if it hadn't been for the forward planning and the projects that this ministry has brought in.... You think British Columbia has unemployment today, my friend; I hate to think what it would have been if you, with your socialist policies, had been government during the last few years. Northeast coal wouldn't be going ahead. You'd still be arguing about Duke Point. There be no agreement with the federal government. There'd be no LILA, ASEP or TIDSA; none of those programs would have been signed. But you would have had a post office on every corner, and make-work programs.

I want to tell you something, Mr. Chairman. That member over there talks about subsidizing northeast coal. It has been proven, not only by an in-house study but also by an external study, that the Japanese steel industry is paying for a new port at Prince Rupert; they're paying for the upgrading of the Canadian National Railway from Prince George to Prince Rupert, which will serve the farmers and other producers in western Canada who will ship their goods through the port of Prince Rupert; they're paying for the Anzac line; they're paying for the new town of Tumbler Ridge; they're paying for that new power line from Peace River to Tumbler Ridge; and they're paying for highways in my constituency. As I said, never before in history have highways been included in the cost-benefit analysis study or charged to a project. The government should have provided those roads without putting them in, but we have put everything into the cost of that project.

I want to talk about a few other projects, not necessarily relevant to my ministry. Originally the socialists opposite who talk about unemployment today were against northeast coal. They didn't want the project to go ahead. This summer it will be providing 5,700 jobs in the construction industry. The other announcements that I made in this House recently.... The grain and bulk liquids terminal going ahead in Prince Rupert will be providing thousands of jobs.

The Minister of Energy (Hon. Mr. McClelland) is holding a press conference in the morning, and I presume he's going to make another announcement about economic development in the province of British Columbia; something

[ Page 8774 ]

that has had forward planning. And you say that I'm a one-project minister.

MR. LEGGATT: I think you're feeling guilty.

HON. MR. PHILLIPS: It's not so. As I said before, I could be out there practically every day, opening up some new job-creating project in this province, because people are coming to British Columbia. In a time when the economy is low, who's making announcements about projects going ahead? What other province in Canada is making announcements about projects going ahead? Name them. There is none. But because of the forward planning of this ministry, looking ahead in a time of economic recession, projects are going ahead.

There are projects on the planning board now, and they will be announced in due course. The economy of the province of British Columbia is not dead. People are still looking to the province of British Columbia because of the policies of this government. You won't find anywhere else in North America the projects on the planning board and being announced that you will find right here in the province of British Columbia. Those are facts that the opposition have to live with. We have done our homework. People are being employed. Money is coming in. Investment is still going on in this province. You name me another province in Canada that has as bright a future.

I realize that our major industry, the lumber industry, is having some difficult times in the international marketplace. But we are working to correct that so that our markets will be diversified. It disappointed me when the official opposition critic took the side of the automobile manufacturing industry in eastern Canada and said that what the federal government was doing in slowing up the movement of Japanese cars through our province.... He, at that time, was working and talking against employment in the province of British Columbia. What they are doing over there, in the first place, is totally illegal. It doesn't fit in with the general agreement on tariffs and trade. He doesn't seem to realize that 50 percent of the goods and services that are sold to Japan come out of British Columbia. He was taking a very parochial view, supporting jobs in eastern Canada and Ontario against the interests of the province and the people that he is supposed to represent.

Nobody in British Columbia supports that view. There are many statistics that I could get into. There are many other projects that I could talk about, but I don't think that I would convince the member opposite, because I think he's being political in this Legislature.

I can remember — it wasn't too long ago — when the official opposition were saying that when northeast coal went ahead, it would kill the southeast. Nothing could be further from the facts, because in the southeast today we have three, and maybe four, mines that are going ahead. Three are definitely going ahead, and there is going to be one opened in August. Additional millions of tonnes of coal have been sold out of the southeast since the northeast project was announced. We're not only diversifying our markets into Japan. Every time I go on an overseas trip, the opposition stands up and criticizes the amount of money I spend. They say that I'm taking junkets and that I don't produce anything. Nothing could be further from....

MR. LEGGATT: I've never said that.

HON. MR. PHILLIPS: Well, maybe you haven't, Mr. Member, but some of your colleagues have said that.

I want to tell you, Mr. Chairman, and I want to tell all the members of the House, that in British Columbia we have to be more aggressive than we have been in the past in merchandising our goods and products. A time of economic downturn is the time we should be putting more emphasis on it. That is why we cooperated with the lumber industry. They said: "We can't afford the money this year for our travel budget to promote our sales in overseas nations." I went to them and I said: "I can deal with you. We'll fund it entirely if we have to, but now is the time you've got to go out."

We have had missions here. I invited a mission from Korea when I was there and had the opportunity to break into that market. We're making great inroads into the Japanese market, Holland, Italy and the United Kingdom. We're working in the North African market, and we're doing a good job in Australia. We will be tapping new markets and putting in new initiatives, because that is the type of operation that at this time in history we should be putting more effort into and, indeed, we are.

I want to tell you that there are jobs being created here in this province. Although the economy is depressed at this time and a lot of people are laid off in our two major industries, there are things happening, Mr. Chairman, in this province.

So I hope I've answered all of the members questions, and I'll listen for more.

MR. LEGGATT: Mr. Chairman, I want to deal with a couple of areas the minister has raised and a new one that hasn't been raised. Perhaps I can deal with that one while I think of it. It is the question of the employment of native people, women and local people in the project itself. Reading the stage two proposals, there is no affirmative action program, but there is a best-efforts clause in the document in which the companies say they'll use their best efforts. It seems to me, Mr. Chairman, that that's not good enough. The minister should guarantee that local people, natives and women will be trained for that particular project.

The reason I'm making this point, Mr. Chairman, is that in the northern boom-town psychology, using local people is by far the best social atmosphere. Too often in northern communities people from the south, where I live, come to the north with a view to making a stake and getting out. And I think northern people would like to have permanent residents — people who wish to make their lives in that community.

The idea, for example, of a husband and wife both working in the coal industry is very desirable, both of them trained and bringing home incomes. It seems to me that the minister is probably in agreement on this subject. He wants to see this happen in Tumbler Ridge and so do we.

Interjection.

MR. LEGGATT: We'll deal with the question with the unions. The fact is that the unions have not been approached prior to the commencement of the project. It seems to me that the minister should move now. I realize that the construction phase is probably a time when it would be very difficult to change the hiring-hall procedure for the construction work, but I think it's worthwhile.

For example, I congratulated the Premier the other day. I thought it was a good idea that we got the three elements in the economy together and sat down and talked. I think we

[ Page 8775 ]

could do that on the northeast coal project, and I think you'd get some cooperation from the union movement, Mr. Chairman. I think they just have to be approached to make some changes in the hiring-hall practice to provide room within their unions for training of local people and natives so that they're guaranteed that they get a piece of this action in the north.

I'm making a constructive suggestion, not a negative suggestion. My only criticism really is that this should have been confirmed and done before the project was along as far as it is now. If that's going to be a viable community, it'll be a viable community because people are there to make their permanent home in that community. If this is where they want to live and this is the life-style they enjoy, they don't want to go up and make a quick buck and fly back to the comfort of Vancouver or one of the lower mainland cities, which is a different atmosphere. All of us have different lifestyles; there are people who enjoy the north and there are people who don't. I feel emphasis should be put on making sure that the jobs the minister is creating go to those people in the north.

I want to deal with another question the minister raised, which is the question of Japanese car imports. It's a little off the point, but in a way is connected with the whole style of negotiations with the Japanese. I was in Japan about three years ago, and in those days they had grading requirements on B.C. lumber where Canadian lumber suppliers were being beaten out every day because non-tariff barriers at the docks were preventing our manufacturers from getting into the Japanese market. Today we still have a 10 percent tariff in Japan on B.C. lumber products. Try to enter the Japanese market with any manufactured product from North America, Mr. Chairman — just try it.

Japan has got to learn that trade is a two-way street. I know that the minister is going to say that I'm kicking the Japanese around. Well, sometimes you've got to get hard-nosed with the Japanese, because they're the most effective traders and negotiators in the world, as they demonstrated in their negotiations over northeast coal. A temporary attempt to influence the Japanese in the way we have opened our car market to them is not such a bad thing. I agree with the minister that it shouldn't be permanent. I think there is a point where the lesson has sunk home and now we get serious about the way we have our trading relationship with the Japanese. If we continue to simply be suppliers of raw products, hewers of wood and drawers of water, and do nothing to make our high-technology industry sophisticated enough to compete in the Japanese market — and it's a great market in Japan....

We should be into that market in a very large way. We're not going to do it if every negotiation just means that they get our raw products, but they don't have to take anything that's manufactured, sophisticated and highly job-creating

That is why, on a temporary basis, I support efforts of the Canadian government to say that we can't lie down and play dead with the Japanese. We have got to deal on equal terms with that incredible market, with that incredibly sophisticated economy, which is much more planned, I might say, than the one that we labour under here. I make no apologies for the position that I took with regard to the imposition of a non-tariff barrier — a barrier and a name that was invented by the Japanese. They've been imposing non-tariff barriers on products from around the world as long as they've been trading. There's nothing the matter with showing them that two people can play the same game. But I would agree that there's no point in cutting off our nose to spite our face forever, and we can withdraw that, having shown that we can be just as tough as they are in dealing with international trade.

You can't trade internationally on the basis that our markets are completely open and you can take anything you want, except that you'll refuse all our manufactured products. That's the situation we now have in Japan, and it's got to change and the minister has got to help. Instead of just fighting the federal government it's time the minister helped in international negotiations so the Japanese understand they must take Canadian manufactured products — particularly British Columbia's. Yes, it's time we had a look at that tariff barrier on lumber in Japan. Let us show the Japanese we're dealing with them on an equal basis, because at the moment I don't think they get that impression from dealing with the Canadians.

You have a northeast coal transaction in which 38 percent of the Quintette mine is now owned by the Japanese steel industry. That project would not have been financed without Japanese interest rates becoming involved. It's interesting that Japanese interest rates are now among the lowest in the world. Maybe we should study their economy as to how they were able to keep their interest rates down.

There would not have been financing available without Japanese money which could reduce the onerous rates we have now. This project could not have flown at all, on the private side, without what is in effect a Japanese subsidized rate in terms of the loan position. I don't know what the percentages are — those have never been released — as to which bank holds which percentage of the very large loans that Quintette has taken. We'll wait and see with that. But there's no doubt that Japanese interest rates have persuaded the private sector that the thing was viable. It was not viable on Canadian rates at the present time, which perhaps is a lesson to the Canadian government that we've got to have a made-in-Canada interest policy, because we can't even make our own projects fly with Canadian money. We've got to go abroad for an economy that's sensible enough to keep its interest rates at a reasonable level.

That's all I have at the moment.

HON. MR. PHILLIPS: I appreciate what the member has said with regard to jobs for northerners. But as you know, during construction it's under the construction union. It's the construction union that has the closed shop — the worst in hiring-hall practices. Lord knows, I'd like to be able to do something, not only for the native people up there but also for my own constituents. You know that if there's an electrician out of a job in Calgary, Winnipeg or no matter where, and there's a job, the union boy gets it first. They won't allow members to join. That's the way it is in the construction industry. It's a closed-shop union deal.

I've argued with the union leaders. I could talk to you and have quite a discussion on that, because it gets into apprenticeship, training technicians and the whole deal. I think the union leaders would sooner see people unemployed with no trade than they would unemployed electricians, carpenters or tradesmen. They don't want any surplus of technicians on the market. That's their attitude. It's a fact of life. I certainly don't agree with it.

With regard to permanent jobs in there, I think it would certainly be for the benefit of the coal companies to have northern people employed in the mine. I think that will happen. As a matter of fact, I know it will happen. We're already having negotiations with the federal government on

[ Page 8776 ]

that particular aspect of it. I think a lot of those jobs should be trained for. I've met with the native people there. I said: "Look, you should get in there now and start talking to the companies about providing them with people for the jobs that are available, because it's going to be an excellent opportunity." They're good workers. There will be lots of opportunity, because there will be a turnover. A lot of people who go up there from the lower mainland to work and who are not acclimatized will not stay. There's going to be opportunity for the local people.

I don't want to spend a great deal of time on this Japanese car deal, other than to say that the grading requirements on Canadian lumber, because of the negotiations that I've had with the Japanese, are now removed. I still cannot justify and support — and really don't think you can support — the actions of the Canadian government in bringing in an illegal, non-tariff barrier on Japanese cars. My position has been — and Lord knows, I've had enough talks with Mr. Lumley and Mr. Gray in Ottawa: "If you can't negotiate with the Japanese, stand back and I'll do it for you." They showed their weakness in not being able to sit down and negotiate with the Japanese, so they took another tactic that is illegal. That's hampering our reputation not only in the Japanese market but also in the international world, because it's an illegal act. I told them when I was in Ottawa three weeks ago Monday that if the produce were going to Japan from the province of Ontario, this wouldn't have happened. If this was going to save the North American car industry, then I would even say there might be justification. But the ironic part of it is that that it is not going to save the North American car industry.

They want them reduced by some 30,000 cars a year. What it is going to do — and is doing right now — is create unemployment in the province of British Columbia. Don't forget that the importation of Japanese cars has been built up over a period of time, and a lot of foreign car dealerships have money invested in plant, stocks, real estate, tools and employment. If they can't get the cars, there is going to be more unemployment. I just have to tell you this is strictly another case of the Ottawa government and the eastern interests looking after the eastern interests and not working for the good of the province of British Columbia. I cannot condone that and I will not condone it.

You say that if you are government, you're going to get a Japanese car-manufacturing plant here. Well, you trot that out in pretty nearly every election campaign. I am negotiating with the Toyota company, and do you know why the negotiations are tied up? Again, they're tied up in Ottawa; we're waiting for a decision from Ottawa. As I've told them, Mr. Chairman, a "no" decision would be better than no decision at all, because I don't know how to handle it. There's another case of Ottawa not being too interested in British Columbia's problems, even though the leadership of the government of this province is assisting the economy of Canada probably more than any other province. We will continue to do so because we're good Canadians, as witness the results of benefits that flow to the rest of Canada from the great northeast coal project.

We're good Canadians, but we like to be listened to and we like to have a fair shake, and sometimes it gets not just a little frustrating to deal with Ottawa, but very frustrating. Don't forget that when my estimates were up last year, we had sold the coal, we were going ahead and everything was in place, moving ahead. But could I get a decision out of Ottawa on the port? No, I couldn't get a decision out of Ottawa on the port. It went through the spring, it went through the summer, it went through the fall, and all the time there was no deal. This province had the courage to carry on, hoping that we'd get a deal. No wonder I'm grey. Finally, even after I held up letting the contracts on the tunnels for two weeks.... It was the only way I had of forcing Ottawa's hand to come to grips with reality.

I want to go through it again. It went through the spring, it went through the summer, it went through the fall, and it went right into December. I was nearly a nervous wreck, but I still didn't have a deal, because Ottawa wouldn't come to grips with it. That's why this province is espousing the policy that the ports of western Canada should be managed by people in western Canada, not by some bureaucratic insular group of people 3,000 miles away. Did that member fight for that when he was in Ottawa?

I took a trip to look at some world-class ports. I visited a couple in Europe. The one in Rotterdam — I think it's probably the largest port in the world — is run by the city of Rotterdam. But it doesn't only serve the Netherlands; it serves all of the countries in Europe and a lot of countries behind the Iron Curtain. When I say that the port authority in western Canada should be run by western Canadians, Ottawa tells me: "You guys out there.... That wouldn't be in the national interest, because you might hold up the movement of goods and services through that port to the detriment of one of the other provinces."

AN HON. MEMBER: Who's holding it up now?

HON. MR. PHILLIPS: Who's been holding it up, my friend?

We negotiate, and I want to tell you in front of everybody that I've had some good negotiations with the Hon. Mr. Pépin, the Minister of Transport. We've had good negotiations. We sat down, and it didn't take us too long to solve the Duke Point deal. It took us about ten minutes sitting out on the front steps of the Legislature to come to an agreement on the Roberts Bank for that project to go ahead. We've had numerous negotiations on Ridley Island, and I have to say that I think that Jean-LucPépin is a very fine Minister of Transport. If he solves this Crow rate, he will go down in history as probably one of the greatest Ministers of Transport in Canadian history.

I just have to say that I have a lot of time for him. I can pick up the phone and talk to him. He's a reasonable man, but he's hampered in what he wants to do by his other colleagues, and by the interests of the National Harbours Board, which wants to run everything....

MR. LEA: It's the same as you. You're hampered by your colleagues.

HON. MR. PHILLIPS: No, we work together as a unit. Our cabinet works together. We set a common policy, don't we, Mr. Chairman? We work together.

Interjections.

MR. CHAIRMAN: Order! One at a time, please.

HON. MR. PHILLIPS: I don't think there's ever been a government in the history of British Columbia that has worked together as well as this present cabinet. The whole

[ Page 8777 ]

government works together, and we set policies by utilizing the brains of everyone in the government. That's why we're able to come up with these fantastic economic development policies. These policies are indeed helping to employ thousands and thousands of British Columbians today.

We still forecast a positive growth in British Columbia in 1982, and we're one of only two provinces in Canada that can say we're forecasting growth. I want to tell you that when I go over to Vancouver and look around, it reminds me of Hawaii five years ago. Their national emblem was the one-armed crane. You see people pouring money into Vancouver. Why? Because they have faith in this province, and they have faith in this government. That's why they're pouring hundreds of millions of dollars into British Columbia.

You tell me that there's no employment; I want to tell you that our workforce has grown every year that we've been government. There are more people working in British Columbia every year, even with the layoffs in the lumber industry. Let's put that where it is — in the lumber industry. Look at what is happening in the construction industry, and we're not building post offices on every corner.

[Mr. Ritchie in the chair.]

I remember making a little speech in this Legislature last year about monuments. Someone accused this government of building monuments. I said, "Yes we're building monuments, but they're monuments to the people of British Columbia." You talk about employment. We have hundreds of people employed on the B.C. Stadium, a project that you were against, which I think you will regret. We have hundreds employed and to be employed in the ALRT system. We will be employing hundreds in the trade and convention centre. We are employing hundreds at that great development at Lonsdale Quay. We are employing hundreds of people in the redevelopment of downtown New Westminster. This is just in the lower mainland. These are projects that are the result of the planning of this government.

I'll take my seat again, Mr. Chairman, and wait for further piercing questions from the opposition.

MR. LEA: One of the things about politics that never ceases to amaze me — and we're all guilty of it as political parties — is that when times are economically good, politicians stand up and say: "Look at that. The economy is great and it's because of us." When the economy is bad, governments say: "It must be somebody or something else that's causing it." In B.C. the truth of the matter is that the B.C. government doesn't have much influence over the economy. When it's good, it's not particularly to the credit of the government or politicians; when it's bad, it's not particularly because of a bad government or bad political decisions. We have gotten ourselves into a position where our control over our own economy is fairly limited.

There are certain things we can do that can either help or hinder the economy, but even those are somewhat limited. I suppose we could bring in taxation that could kill the economy if we were completely stupid or nuts. We could give it all away and not charge anybody a dime for our resources, if we were just as conversely stupid or nuts in that area. But no government or politician is that completely stupid or nuts.

I think the problems that we have in our economy are more deep-rooted than the day-to-day economic policies or the day-to-day fiscal policies of any government. The reason that we are in the trouble we're in now is obviously because of a downturn in the world economy. There's no doubt about that. As the minister says, this is especially true in our lumber and forest industry, which relies so heavily on housebuilding and the economy of the United States. We're in a lot of trouble.

I'm the critic for small business, which is part of the minister's portfolio. There's very little you can do for the small business community when the entire economy is sour. If the cash flow isn't there, and if the workers in the primary industries aren't working and aren't spending they money in the small business community, there's very little you can do.

All of the programs outlined in the government's booklet "Our Business is Helping Your Business," which is basically aimed at the small business community, aren't bad programs — the LILA, the FREDs, the FLIPs, the grants. But they really don't want no-interest loans; they really don't want grants. What they would like to have is a vibrant economy, where they don't have to come to the government for grants or loans; where from their savings they could invest in expansion and new business, and preferably go to private lending agencies as opposed to government. There are usually so many restrictions that it's hard to make a buck anyway, after you're finished with government.

Regarding our economy, I think we have to take a much deeper and more intensive look at what has happened historically in British Columbia, North America and, I guess, the world — because we're only one small cog in the wheel. A while ago the minister and the member for Coquitlam-Moody (Mr. Leggatt) were talking about the problem of Japanese cars coming here — one seeing it as a problem and the other not seeing it as a problem. The fact is that if the North American car industry were turning out quality automobiles at the same price as the Japanese, we wouldn't have a problem. We'd be buying North American automobiles; we wouldn't be importing Japanese automobiles in the first place. That's the real problem: we are not putting products onto the world market that we can do well, that we can sell competitively. That's what we're not doing, but we're subsidizing obsolescence. All we have to do is take a look at Massey-Ferguson and Chrysler to see that we're not doing anything but subsidizing obsolescence.

The iron foundries were really quite disturbed when the steel industry came along; they tried to stop it. The harness makers and the carriage-makers were really quite disturbed when the automobile came along and tried to stop it. The horses were even more disturbed, because we made them into dogfood. That is what's wrong with the North American economy generally, particularly in British Columbia.

After the Second World War, through the World Bank, the International Monetary Fund and particularly the Marshall Plan, we went into West Germany.... We like to point to West Germany and Japan today and say: "Look how wonderfully they are doing; why can't we copy them?" You have to go quite a way back to find out exactly why we haven't copied them. Through the Marshall Plan, with moneys from North America, we financed and retooled new industry in West Germany and Japan. We put provisions in there. We said: "You can't spend this money on national defence; you can't put it into war; you've got to put it into something else."

Partly through natural inclination, being fairly bright, and partly because of the Marshall Plan financing, the Japanese put a lot of money into research and into the development of

[ Page 8778 ]

the research that looked good. There was a slack time between receiving the Marshall Plan money and the money that had been put into research and development coming back a thousand-fold. We in Canada have not done that; we in British Columbia particularly have not done that — not through this government or any previous government.

We have been satisfied to be hewers of wood and drawers of water over the years, and it has served us fairly well. But the crunch always comes, and the crunch is with us now. We don't have enough markets for the traditional products that we produce. The traditional products of the forest industry and mining industry have very little secondary application and almost negligible tertiary application when going into the marketplace. All of the investment that we have historically looked for in British Columbia has been new money — not to put new products into the marketplace but to develop more of the same old products, which have no secondary or tertiary application, and which are mostly raw — and to ship them out for somebody else to manufacture into the consumable products that the world needs. That's been our role. We have probably run one of the most stupid resource economies anywhere. Forward linkages and backward linkages in our economy have been almost negligible. By that I mean that we have not produced, for the forest industry or for the mining industry, the kind of materials that they need to be the extractors. We've left that to someone else, usually a subsidiary of the parent company that owns the extraction company in British Columbia. At the other end, we haven't been manufacturing or applying any secondary application to the goods before we ship them out.

This government is still doing it today. Last year we put $8.1 million into research — direct government money. Without having access to more government figures than I have, I find it impossible to know what we contributed in tax breaks to the private sector for research.

It seems to me that if we're going to pull ourselves out of this present economic slump, we can't just sit back and hope that the world economy picks up, that housing starts pick up in the United States and we can go back to the same old game that we've always played. Because it won't work. If by magic tomorrow the interest rates dropped in the United States, housing starts were up and our full forestry industry was going flat out, if all of a sudden the prices went up on the London metal exchange and our mining industry was going flat out, we would have unemployed people in this province and could not supply them with jobs. That would be our situation because of new people coming in and our own sons and daughters coming into the workforce every day. What we have to do is find a way to add wealth to those rich resources, and we have to apply something to those resources before we get wealth. One of the wealth-producing things we are doing is the kind of thing we're doing with northeast coal — rail lines, port facilities. That is wealth. The rich resources that we possess can't really do anything until we apply something to them — ideas and capital — and make some wealth for ourselves and for the future. But we aren't doing that in any organized, planned way.

If I have one criticism of this government, it's that sort of a knee-jerk application to projects. You sense it; I think the people sense that there's a lack of vision from the government and that there's a knee-jerk application to the projects that are underway and the ones that the minister mentioned that are on the books. Those are projects that will only get us by.

The minister talked a few moments ago about members of the opposition, regretting that we're against the stadium. We're not really against the stadium. I think it would be beneficial not only for Vancouver but for British Columbia and all of Canada to have a stadium such as the one being built. The point is, when do you build it? The Premier's fond of using the family as a means of explaining higher forms of economics. He says you don't borrow to put groceries on the table, although it's okay to borrow to buy a house. I'll put the stadium in those terms too. It might be desirable to build a swimming-pool for your family. It might be something you want and need for your own recreational purposes; in other words, it might be a worthwhile project. But when do you build the swimming-pool? Do you build it when you don't have enough money to put a nutritional diet on the table? Do you build the swimming-pool when you can't afford to make your medicare payments? Do you build the stadium when you can't afford to keep a good health-care system in place? It's not that the stadium isn't something that we don't all desire or agree is needed or would be good for British Columbia; it's when do you build the swimming-pool in your back yard, and when do you build the stadium?

Really all you've done is transfer jobs. You've said to places like Dawson Creek, Kamloops and Prince Rupert: "We're going to take away some of your jobs in health care. We're not going to put money into the health-care system as we have in the past." Because of that there are going to be fewer jobs in Prince Rupert. I'm not even talking about the services we're lacking out of those fewer jobs. We said to the educational system all over this province: "We're going to cut back; we're going to call it restraint; and there are going to be fewer jobs in the educational system. And we're going to take that money into downtown Vancouver and build a stadium."

The government has only got so much money to spend. Where they spend it is a government priority. They've decided to build their swimming pool in downtown Vancouver, at the expense of health care in my community and in many of yours. It's a matter of priority. When do you build the swimming pool? When do you build this recreational facility called a stadium that we all want, and that I think we all need? It's a matter of timing. You've really borrowed jobs and services from throughout this province for a project that you think is highly visible — the majority of the people in this province live in the lower mainland. I'm sorry to say that I think you've done it for votes. I'm glad to say that I think it's backfiring, because I don't think people are going to put up with a health-care system that isn't adequate in order to build a recreational project in downtown Vancouver where all the votes are.

What you're doing is really a make-work program. The stadium is a make-work program, along the lines of the new deal that Mr. Roosevelt brought in years ago in the United States. You're not giving this economy a shot in the arm generally. You're not looking at the future. You're not putting money into research and development so that down the road we can reap tenfold, a thousand times, benefits, with new jobs, new products and markets. I'm afraid this government is short term. If you look at each one of their projects on its own, you can't condemn it. You can't condemn northeast coal. I believe the infrastructure for northeast coal should go in, and there's no better time than now. You may as well take advantage of what looks to be an inflationary world for some

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time to come. That doesn't mean you have to get skinned in the process.

You're very fond of saying that the only dollars the government has are taxpayers' dollars; the money that the government is putting into northeast coal is taxpayers' dollars. It is only fair that if the government is going to invest our tax dollars in northeast coal, then we taxpayers should expect the same kind of return on our investment as the coal companies get.

We have said repeatedly that we're not against northeast coal, but in return for the investment that the taxpayers are making, we should have an equity position in the coal mines themselves. That doesn't mean run them, in my opinion. I think the private sector is more capable of running coal mines than is the bureaucracy of this or any other government, but that does not mean we shouldn't assume an equity position in northeast coal because of the taxpayers' investment in the project.

Northeast coal is not something you can condemn out of hand, although you may have slight or not so slight differences with the government on the method by which it's being done. Our party's position is that the taxpayers should have an equity, not the government. The taxpayers who are putting up the money should have an equity position in something they're investing in almost equally with the private sector. We can't be against the stadium, although we can suggest that maybe government shouldn't be spending money on a stadium now when health care in this province is suffering. A stadium, yes; maybe not today.

Look at light rapid transit and the transit system. I'm not that familiar with the system that's going in, but people who are — and there are many — for the most part say we've made a mistake in choosing the system. You can't argue with a transportation system that will move the public around in a more energy-conserving and sensible way and get us out of our automobiles, but you can argue about the details of whether it's the correct system.

B.C. Place is an interesting one. The government is bragging about the new commercial space that's going to be created by B.C. Place. What's going to happen to the merchants who are in the old commercial space, or is the economy of Vancouver going to pick up to such an extent that all of that commercial space can be utilized, that we won't have a surplus of space? Because all you have to do is take a look at Nanaimo, Cranbrook and other cities in this province which have built gigantic shopping centres, and see what's happened to the downtown core of these communities and the family businesses.

I think most people in most jurisdictions are starting to take a new look at shopping centres and what they can do to a community — and it's not all good. We have created slums of many downtown sectors of many communities by allowing gigantic shopping centres to draw away from the downtown sector. We see in many communities the strip of porno houses, rows and rows of those video machines, dirt on the street and the dregs of society down there, as we see business move out of the downtown core to the outskirts.

I don't know whether that's going to happen with B.C. Place and all of that commercial space coming on, but I have the feeling that this government hasn't really looked at it in that way; it just seemed like a good thing to announce at breakfast one morning, because there are a lot of votes in the lower mainland and Vancouver. It's going to have effects, and I'm fairly satisfied that the government isn't fully cognizant of or hasn't looked at the effects it may cause. They're just moving ahead, knee-jerk, project to project, without any rhyme or reason or any proper planning. I'm very afraid of that kind of government.

You can look at all of the projects one at a time and you can say there is some good about them, but I just feel that this government has no vision as to where it's going. It's a knee-jerk, economic government that really hasn't put it all together, either for the short term to get us through a bad economic time or for the long term with research and development bringing new products on, and more aggressive ways of merchandising those new products out of research and development into the world marketplace. I believe that the days of protecting yourself by tariffs are over. The international marketplace doesn't allow for that very much any more. The world is too small. Rather than protect ourselves, we have to compete with products that are viable, that we can produce here in British Columbia — do the job well and market those products well, or we're not going to survive.

One thing is for sure: we cannot survive for long if our only means of producing wealth is to go out into the international marketplace for money to invest in further widening the extraction process, and that's all we do. We cannot continue to cut down trees at the rate we've been doing; we cannot continue to take our natural resources and to ship them out unfinished and to create more jobs for new people coming in and sons and daughters coming along into the workforce. We cannot continue to supply jobs to those people through the traditional method of extraction of resources and shipping them out barely processed. Because in the end, as we're now finding out with forestry.... We've always considered it a renewable resource and one we didn't have to worry about, but it is not quite as renewable as we thought if we mismanage it, and we have mismanaged it. I'm not laying blame; 20:20 hindsight is always great. Probably the best way to cut down on the usage of forests is to utilize the wood we take out and to create more wealth per cunit than we've done in the past. We can only do that by finding new ways and new methods.

[Mr. Strachan in the chair.]

I don't suppose things change very much. I suppose when people were looking the industrial era in the face and coming out of the feudal system, they were afraid; they were afraid of the future because they didn't know what the future held. I feel in some ways, or in many ways, that's the way we are today. I think we're moving out of the comfortable industrial era that we've been accustomed to and into new areas, into a highly technical, highly competitive, different trading-pattern world, and we're afraid. Rather than meet those new challenges, do the research that's needed, develop on that new research, go out and sell our wares in the marketplace aggressively, we are determined to subsidize the obsolescence of the old and, in British Columbia's case, do nothing more than ever widen the extraction process of raw resources. Someday those resources are not going to be here for future generations. I believe it's especially a responsibility of this Legislature to ensure that we leave the world as well off in British Columbia as we possibly can. We can only do that by leaving as many resources as we can for new generations to use to sustain themselves and by leaving them with the idea that we were not only living for today, but for the future of our sons and daughters and their sons and daughters. I don't feel we're doing that.

[ Page 8780 ]

Our history has been to accept projects that on their own don't look bad, but in an overall economic view of British Columbia leave us lacking — they're politically good. Don't think that people in the rest of the world don't know when a government is hurting politically and know when to make a deal. When a government's hurting politically, it can be because of stupid political mistakes — but not usually; governments are usually hurting when their economy is down. They can sure make a deal with a government which needs to get some short-term jobs to look good politically. Again, we go into the cycle of selling our resources and ever widening the extraction process, and never getting out of that cycle that will be the doom of us all.

There are some programs that we could implement for the small business community to get them through a bad time. I've mentioned them before. The minister knows very well exactly what we say should be done on a temporary basis to help the small business community. But in the long run it's not the answer. In the long run we have to build a vibrant economy, walk into the future unafraid, be innovative, imaginative and work together. Every facet of our community at this point has to cooperate with every other, at both the individual and the organized levels, if we are ever going to pull ourselves out of the morass we're in.

I don't believe we're in a very temporary position. I think the world economy is in for some very difficult times. I think that the only way we can deal with it is with some guts, imagination and cooperation. I really don't see this government leading. I say to them in conclusion: either lead, follow or get out of the way, because the world won't wait for you.

HON. MR. PHILLIPS: The member for Prince Rupert brought up a very interesting topic of conversation. I have to inform him and all the other members of this Legislature that this government has indeed been leading in the very things he's talking about. That's why we're not only moving ahead with resource development and modifying our lumber industry, but also moving ahead on all fronts in the vision and courage of this little government over here to bring in high technology industry, the very industry that the member for Prince Rupert was talking about. We're light years ahead of practically any other province in Canada. I worked with my colleague the Minister of Universities, Science and Communications (Hon. Mr. McGeer), and through the British Columbia Development Corporation, to establish discovery parks so we could take all that talent in the universities and put it to work with industry. We have the land available. We built buildings so that when high-technology industry wants to come to this province, we are able to facilitate them. That has been done because of the forward vision of this little government over here.

It always breaks my heart when I hear a member representing the people of British Columbia talk about us being hewers of wood and drawers of water. In April 1982 there were 163,000 British Columbians employed in manufacturing. I wish the member for Prince Rupert would get out and get to know his province, because there are many high-technology industries in British Columbia. Just a few weeks ago I opened a heart-valve manufacturing facility in British Columbia. I'm talking about human heart-valves, which they're going to ship into the European market. That is a high-technology industry brought here with the assistance of my very efficient ministry staff. You talk about our having to do things better. Not too long ago I was out opening — guess what? — a bicycle manufacturing shop, assisted through one of our programs. A man had a new idea — he was a bicycle racer himself — and came to our ministry for help. The program was there, and now he's manufacturing bicycles and bicycle frames to sell in the international marketplace. We do have some control over our economy. That is why I'm able to stand here in this Legislature today and say, when all the other provinces in Canada are preaching doom and gloom, that people are coming to British Columbia and investing in plants.

It isn't only northeast coal. The member says it's great to make a deal when the economy is down, intimating that the Japanese were able to make a deal with British Columbia and northeast coal because the economy is down. Northeast coal was not put together this year and it wasn't put together last year; it was put together in a series of negotiations on the economic upturn. It wasn't put together, Mr. Member for Prince Rupert, this year. No, it's the long-term planning, the courage and vision of this little government over here that brought it about. You talk about no manufacturing; there were only 39,000 people employed in forestry, fishing and mining combined. Four times as many people were working in the manufacturing industry.

I wish the members opposite would get out and see the highly sophisticated manufacturing firms that we have in British Columbia, many of them competing in the national marketplace. We have some difficult climates to work with in the province of British Columbia. I'm not going to get into discussing that, but it's going to take combined effort and maybe everybody will have to wake up; I'm referring to labour. It's going to take the combined efforts of government, labour and business to keep the climate for investment in British Columbia so that this will continue. We will take a back seat to nobody. If we continue along the road we're on in British Columbia, if we continue the policies that this government has laid out, not in this decade or the next decade will a state in the union or another province in Canada be able to touch us. We are the leader now. Even though the economy is tough and our world markets for lumber are tough, we are still opening up and making announcements of new things coming to British Columbia.

We will invite in those new high-technology industries, particularly those in the electronics field. You may be asked in the very near future to make some decisions over there to back up what you're saying. You may be asked in the very near future to put your money where your mouth is about bringing new high-technology industries into this province. We have the mechanisms in place; we have the high technology parts and the climate established. We're not just hewers of wood and drawers of water.

I want to talk about the small businessman for a bit. We have created a climate for investment in this province. I sometimes am accused of not doing anything for the small businessman, that all I'm interested in is the international marketplace and megaprojects. This ministry, through this government, has done more to assist and encourage the small businessman than any previous government, or probably any government of any province in Canada. We have relieved the small businessman of a lot of the punitive taxes that were brought in by the socialists opposite when they were government. We negotiated and we brought in programs. You ask about the megaprojects: what does a megaproject do? Megaprojects create opportunity for the small businessman, the small manufacturer and the service industry.

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You say that were a one-track government. We're working with the tourist industry. We're trying to diversify our products so that we don't just sell two-by-fours in the international marketplace. We're helping to add further value to our lumber. You talk about shipping out our natural resources. My friends, we don't ship out any more natural resources of the province of British Columbia than any other resource area, so don't tag us as being just hewers of wood and drawers of water.

As I told you, Mr. Chairman, we are working, and we're on the verge of bringing some metal-processing industries into this province. When some of of the world's processing industries are running at 80 percent capacity.... It's great to sit in this Legislature, surrounded by this stone building, and be great visionaries. But you've got to take into consideration the realities of the real economic world, and that is exactly what we're doing.

Suppose, for instance, that all we had was manufacturing in the province of British Columbia — manufacturing television sets and automobiles. Do you think that our economy would be flourishing today? Do you think that our economy would be better off than it is today? No, it wouldn't be; look at Ontario. What we have done in this province is diversify our markets, our industries, our natural resource base — everything. That's why this province is in better economic shape today than any other province in Canada and why our future is brighter than any other province in Canada. We've certainly taken some advantage of being....

MR. LEA: Drawers of water and hewers of wood?

HON. MR. PHILLIPS: No, we're not drawers of water and hewers of wood. That's great political crap.

You have to look at the real world. You socialists over there can sit and come up with all kinds of great visions and great political fodder, but you're not very good at carrying it out. If you want to talk about people being able to control investment and the economy.... Yes, I think we need a made-in-Canada interest rate policy too; certainly. This government doesn't just sit in this Legislature and make political speeches. We went to Ottawa back in February, and we told the federal government what they should do to cure the economy of this province. If it wasn't for this little province out here — it's the anchor of the economy of Canada — we'd be in a lot worse shape than we are. The policies that you socialists over there espouse of keeping foreign investment out.... I can remember the Leader of the Opposition standing in the Legislature a couple of years ago and just giving me supreme you know what, because we were allowing foreign investment to come into the province. He said: "You should stop that." Today we need that foreign investment, and who do you think is going to bring in those high technology industries? Where is the money going to come from? Where's the technology? It's going to come from outside. A lot of it's going to be foreign investment, and you socialists over there don't want any foreign investment. You don't want any jobs created. You're for keeping foreign investment out of the province.

MR. LEA: We are?

HON. MR. PHILLIPS: Yes, you are, because your leader has given me hail Columbia.

MR. LEA: No. he didn't.

HON. MR. PHILLIPS: Oh, he did. He stood up here and went over the list and he said: "Look at the number of FIRA applications you put your signature to, Mr. Minister. It's terrible. You're selling the province down the drain." You fellows are great theorists over there, but your policies aren't practical.

Mr. Chairman, they talk about unemployment. They wanted to give all of the petroleum industry resources in the province of British Columbia to Ottawa, and they supported that policy. Ottawa is trying to nationalize the petroleum industry today — a policy that they agree with. But what has happened? Employment in the petroleum industry is at an all-time low. They drove the petroleum industry out of the northeastern part of the province in the three years they were government. We just nicely got it back, with lots of exploration, lots of money coming in, and what happens? The federal government drives it out. So, Mr. Member for Prince Rupert.... I'm sorry you're not listening, because you might learn something.

MR. LEA: I am.

HON. MR. PHILLIPS: You really don't touch my heart too much when you start talking about unemployment, because if we had followed your policies, unemployment would be four or five times what it is in British Columbia today, and there wouldn't be any of those great projects on the drawing board. I know that this little government doesn't have control over all the economic factors, but we have created a climate for investment.

The federal government can change some policy, but they seem to adhere to the socialist policy. That's why Canada is in its present difficulty. It would be very simple to change it, and the world would still I be out there. The markets in lumber might not improve tomorrow, the mining industry might not improve tomorrow, but we've gone through that cycle before. Every valley has a bottom and we'll be on the way up. We have to have policies so that when we are on the way up we can encourage the diversification that this government has worked for; then British Columbia will be able to take its economic place in Canada and be the leader. But we can't do it all by ourselves. We've got to have some cooperation from the federal government on these policies. We've told them the error of their ways but they don't listen to us, which astounds me, because we have people coming to our ministry from all over the world saying: "How did you guys do this? You're known out in the world as leaders." We give our advice freely, even though they're our competitors. They're coming from all over the world to learn how this little ministry picked up the economy of British Columbia, when it was on the brink of disaster after 1975, and carried it to the greatest heights known anywhere in North America. Enquiries are coming in from all over the world: how did this little ministry, how did this little government, do such a great job?

[Mr. Davidson in the chair.]

MR. DAVIS: Mr. Chairman. I happen to be one of those who believes there's nothing much wrong in being a hewer of wood or a drawer of water. If we were focusing on our unemployment problems currently, we'd want our people to be hewing more wood, rather than less wood. As far as

[ Page 8782 ]

drawing water is concerned, we're in the very fortunate position of having a lot of hydro power left to develop. If drawing water means hydro power, we're very fortunately situated.

We've got forest industries and we've got a major water using industry, both using resources which are renewable. As long as we're renewing our forests, as long as we're able to use the natural flow of our rivers, we've got industries which are really incomparable around the world.

Let's not knock our forest industries or our hydro power side. We're using the latest technology in those resource industries, and that shows up in the high productivity of our mills and our power plants. I wouldn't downgrade either of those activities at all.

On our mining side we've got some of the most advanced refineries and smelters, not only in Canada but in the world. There's a lot of new technology at work there. Sometimes it puts people out of work, but more often it keeps us competitive.

So again, our resource industries are productive. They've earned us considerable foreign exchange over the years; and they're going to continue to do so. They're going to continue to provide employment for some of the most highly trained minds, highly trained people, in the world.

The opposition is still leery of light rapid transit. Two features of the light rapid transit system that we've chosen are innovative; they're world beaters and they're brand new. The hon. member for Prince Rupert (Mr. Lea) asks why we aren't out there leading the world. Here's an area where we are leading the world, and we're leading the world not only by purchasing a system that has been developed substantially in this country, but a system that requires motors which are in fact now being built in this province. They're world beaters; they're the first, certainly. We'll be supplying not only our own rapid transit system with a unique motor — the electric induction motor — for light rapid transit, but also Ontario and the United States. The Detroit system will use this motor. We'll produce it here in the lower mainland. The same is true of the steering mechanisms and much of the electronics in that system.

We're with it. There's a particular decision that this government made, taking some risks admittedly, but they've turned out to be minimal risks. We're developing and bringing into production a system which I'm sure will be seen during Expo 86 as a world leader. We're in an area there which is not crudely in the area of hewing wood and drawing water, but it's an indication of the diversity of industrial possibilities in this province. In that case, it's leadership shown by the government.

This area of advanced technology, especially in the nature of sophisticated engines, electronic equipment and so on, is also a very dicey one. Looking around the world today at atomic reactors, jet aircraft or some of the most advanced computer equipment, the West Germans, British and Japanese, not to mention the United States, have all led at one time or another in each of these areas. They're all pushing their particular products around the world. They're all now competing around the world trying to get others to use their highly sophisticated equipment rather than the equipment of other countries.

In the main, how are they doing it? They're lending money to the buyer at low interest rates. The competition, essentially, is in interest rates. This is how Canada sold the so-called Bombardier equipment to New York City for its rapid transit system. We didn't sell them Canadian technology so much. It's actually a Japanese design but Canadian production. We didn't sell them an article purely on the basis of the excellence of the article, but on the low interest rate. We offered them the best lending terms. Countries which are doing that really have to be strong in terms of savings. They have to have a capability to save and earn income in excess of outgo and have income in excess of costs, if they can do this extensively.

The United Kingdom was unable to stay the course in jet aircraft development basically for that reason. The United Kingdom has not, at least in the last decade or two, saved enough because it was so intent on spending money on the soft side of the economy — on health, education and welfare, admittedly very important. It had very little left for the productive side of things. It had very little left to push its own production, and especially finance it abroad. It has been unable to stay the course in respect to nuclear power development for the same reason. Canada really won't be able to stay the course with nuclear reactors. With our exceptionally high interest rates, we're not going to be able to compete with other countries long in giving those countries low interest loans to buy our nuclear power equipment, which admittedly is still among the best in the world technically speaking.

The policies which have been followed here, those of balancing budgets, not borrowing unduly and paying our own way, would pay off at the national level if we followed balanced budgeting as a policy and encouraged development of new products within the country but still been able to stay the course in terms of foreign financing and financing the sale of our products abroad. ALRT motors are an exception. They're small potatoes in relation to jet aircraft and nuclear power plant packages. But still, we've done some of it. We're doing some of it in British Columbia.

Back to our resource industries. We have some exceptionally efficient industries here using the latest knowledge in developing new products. I hope we'll have a silicon industry here one of these years, using hydroelectric power to produce silicon as one of the metals we export, a high-technology metal. There are various byproducts of our mines, particularly in the Trail area — other metals, rare metals — which we may be exporting in time. That's resource-industry-related activity, still technologically very interesting.

I think it's obvious that Canada, and certainly British Columbia, for some time will tend to specialize in industries which are closely related to resources, which are essentially byproduct industries; we'll continue to sell platinum and iridium and so on, exotic metals, but they're byproducts of producing lead and zinc in large quantities.

Forest products. I hope we can diversify more from simply selling two-by-fours, as the minister said, or simply selling bulk pulp; we'll get into some of the finer pulp or even paper products in time, but simply as a byproduct of being efficient on a big scale and having the resources.

Hon. members opposite have been critical of the northeast coal project, indeed of the several megaprojects in British Columbia, if I can include the stadium and ALRT, B.C. Place and Pier B.C., which is now really on federal account. Those are sizeable projects. They're about the only projects which produce unique employment in a downturn period when employment is so important, but we should get them in perspective. I've said before that the total expenditure on those projects — at least if you look at our provincial government budget this year — is of the order of 4 percent of the

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budget. Are we only spending 4 percent on job-creating projects? At least those projects total between 3 and 4 percent — but not all of the budget, obviously only a very small part of the budget. So why decry them in terms of other priorities such as health, which takes over 30 percent of our budget, or education, which takes close to 20 percent, or human resources, which takes around 15 percent? All of those projects together take 3 to 4 percent of our total outlay this year. They're going to create some new and unique jobs, so I think they're important and we should judge them in that context. Of course, the opposition is not knocking them as hard now as they were a year or two ago when they were merely visions. Now they're beginning to appear as reality. The more real, substantial and successful they appear, the less likely the opposition is going to knock them.

I don't intend to say much more, but I do want to briefly comment on northeast coal and the cost-benefit study, which the minister has tabled. As he said, cost-benefit studies are just another cut at the economics and finances of a project or projects. They don't prove a great deal in themselves, but they can be useful at times. I've had something to do with the development of cost-benefit analysis, at least in this country. I, and several others, wrote the first textbook on the subject. The one thing that stuck in my mind about that approach to economic analysis was that it was useful in two respects only. Firstly, you would find out whether the benefits out over time were likely to exceed the costs. That's obviously important. If the benefits out over time exceed costs, maybe it's go. The study which we've received doesn't go to this aspect.

Secondly, you must look at other projects — other ways of spending the same amount of money. This study does not do that at all. It simply looks at costs and benefits and finds that narrowly, if at all, benefits exceed costs out over time. I think to be a proper benefit-cost analysis — and this should have been done three, four or five years ago, not now; it's after the event.... A proper approach is to look at, say, a large hydro project or series of smaller hydro projects as another way of spending the same or a comparable amount of money; look at other industrial possibilities or even look at, say, a housing program of a comparable cost and the benefits it would generate and the cost-benefit ratio; or, indeed, take a similar amount of money and simply cut taxes and see what that would do in terms of costs and benefits.

I'll say this much for northeast coal: without it there would not have been a northern rail development program underway now. I think that's a plus. That's one of these would-have-been things a few years ago, an intangible thing. It does bring directly and immediately into focus the fact that we have a marvellous access to the Pacific, generally following the CNR line across from the Yellowhead Pass, through to Prince Rupert. It's the lowest and best grade in all of North America through the western cordillera. There are few bends and turns in that route as compared to the Fraser Canyon route. It's a route that would have developed much more had there been traffic offering years ago. However, now we have not only northeast coal, which is really the first product which will begin to utilize that route and make it financially interesting, but also much of the produce of not only northern B.C. but also northern Alberta and much of northern Saskatchewan. It's another window on the Pacific. It's another outlet to the market of the Pacific Rim countries. It is potentially a cheaper route, a more efficient transportation route for the resources and, hopefully, a lot of resource-related products from much of western and northwestern Canada. It carries with it a great transportation value for the longer-term future, and as the decades go by many industries in the north will benefit from the fact that this rail route to the Pacific theatre is available. It gives British Columbia a second efficient outlet and area for industrial development, and it gives the western half of Canada another route to the Pacific in terms of countries like Japan, a shorter route and in many instances a more efficient one.

Focusing down more onto the cost-benefit study, I've said its principal shortcoming is that it doesn't look at other ways of spending the same moneys. But it can't include — nor can any analysis — the intangible longer-term developments, such as northern mineral developments other than coal, that may come on in time because there's a cheaper transportation artery available. Those are shadow pluses, if you like, and in some instances shadow minuses, which can never be included in cost-benefit analyses.

Focusing on page 151 of the cost-benefit analysis — it's headed "Integrated Benefit-Cost Comparison: Central Case — Quintette and Bullmoose Production...." I assume that's only in relation to the presently contracted tonnages. The mining-sector cost-benefits seem to be awash — more or less equal. In other words, there's not too much there that's economically very attractive, but it looks like break-even. When one looks at the transport sector, the CNR seems to have done a pretty good job for itself. It has benefits that are 60 percent over costs, so the CNR has been reasonably businesslike in approaching this project. Just taking Quintette and Bullmoose production alone, the CNR is going to more than break even. At least that's what the table tells me.

B.C. Rail breaks even. This is only its operating costs, and I assume maintenance costs are included in operating costs. The port operation loses somewhat. Again, this is for an operation of roughly eight million tonnes a year.

When you look at British Columbia — essentially the B.C. government treasury — B.C. breaks even. The break-even, though, depends very much on the high profitability of the mining operations, because the big-income item is royalties and corporate taxes. If those corporations don't make much money during this future period, they're certainly not going to be paying corporate taxes in any large amount. I could even cynically say.... I remember when I was in Ottawa closely following the fortunes of Denison Mines. I used to do Mike Pearson's constituency work for him often and go up and talk to Steve Roman. That company never managed to pay any corporate income tax for over 20 years, although they had an immense mine and an immense operation. So gambling on Denison paying a lot of corporation income tax means denying the past at least. Hopefully they'll do much better in the future. But the income side depends on the profitability of the mines. The outgo side is largely the deficit on the Tumbler Ridge branch line, whose cost is three times its income. In other words, if three times the tonnage is moved, it's break even; if it's only the roughly eight million tonnes a year. Its cost is three times its income.

Canada. Again corporation income tax is a big item. Both Canada and B.C. must want those mining companies to be profitable and to pay their corporate income tax, not to reinvest it all over the place and avoid income tax by diluting their profitability and putting the money back into other mines and places.

Canada does passably well if they do well on corporate income tax. That whole page only relates to eight million tonnes a year. If you double the tonnage, the picture changes

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markedly. If you treble the tonnage — I gather the resources are there and potential mines can be identified with those tonnages — the picture changes remarkably, and I think even the Tumbler Ridge branch line would be seen to be paying for itself. Certainly the income to B.C. and Canada would be up markedly. This analysis really says to me that the whole project, in terms of its own narrow finance, depends on much larger tonnages being sold in the 1990s, the year 2000 and later.

If you move simply from the coal side to the bigger view of a new transportation artery — a very efficient and highly capable one — many other possibilities are being opened up in the north, especially in the mining category. There are many other possibilities being developed and opened up in northern Alberta and Saskatchewan because this new artery will exist. Without the northeast coal initiative, those possibilities would not be there; at least they wouldn't be there in the next few years.

Those are the cost-benefit analysis numbers. My comment on the study is that it doesn't prove a great deal to me. The minister said that it didn't prove a great deal to him. I think it's useful to have a study like that. It helps us to analyze northeast coal in a narrow sense. It gives us some indication of the value of that particular development. But I personally would like to see the government, over the years, also pushing other projects, particularly those in the area of hydroelectric development and industries which use electric power — including silicon, but aluminum particularly, because I think that is a technologically interesting metal that will always be so. In that case we are generally using a foreign raw material, so I really can't see anything wrong with that from an industrial development or income-producing point of view.

We must be developing new transportation modes and arteries. This northern rail development, not just on the Tumbler Ridge line but in the improvement of the main line right across the central belt of the province, is good news. It's very important. In some ways it's overdue, but at least it's coming along. In our present circumstances of high unemployment, lack of savings nationally and lack of investment capital internationally, I think this is the right kind of thing to do.

MR. LOCKSTEAD: I'll try to be briefer than the previous speaker. I know the previous speaker spends a great deal of time; he goes over his facts and figures quite well.

We're discussing the Minister of Industry and Small Business Development. It's my observation that industry and small business has never been in worse shape in this province — never, in my memory. I was too young during the Great Depression, as was the Premier. He wouldn't remember. He always had a lot of money anyway, so things like this don't mean much to him.

I think we've had more business foreclosures under this minister than ever before in the history of this province. I think he should resign, but he won't. He's already said he's going to hang in there until the next election; then he'll be back among the people.

He's a one-project minister. His one project is northeast coal, which is a loser, so far — pumping people's money into one project. I've heard it said by many people out there that this minister is the best minister of economic development that Japan ever had.

My purpose this afternoon in getting to my feet on this estimate is to once again remind the minister that he is responsible to this Legislature for the Ocean Falls Corporation. My questions to the minister are very brief. I'd like to know why they haven't kept their promise to the people of that community. When they decided to close down that operation in June 1980, they told all of us in this Legislature and the people in that community and in this province that within six months there would be a flitch-and-chip mill and other operations in that community. The minister said in a newspaper article in the Peace River Block News, dated July 30, 1980: "Don Phillips Reports. There is presently a three-year experimental logging and timber-use project centred on Ocean Falls. This three-year program will involve the renovation of the wood-preparation mill, and it is anticipated that it will be in operation in late spring of '81 and employ 100 people."

First of all, you were totally wrong. No operation ever started, there is no operation there today, and you closed that community down arbitrarily. We have somewhere in the neighbourhood of over 120 good homes sitting idle. What are you going to do with those homes? The people there are now threatened with the loss of their ferry service for the next winter period. We have some reason to believe that utilities will be cut off to the remaining 57 residents in that community. I want assurances this afternoon, before I'll let your vote go through, that utilities will not be cut off to those residents remaining in that community. I want that assurance, Mr. Minister, or we'll be here all next week on this estimate — you better believe it.

Interjections.

MR. LOCKSTEAD: Who's that chirping from the back benchers there? He should be in the WCC. Why don't you go join the WCC, where you belong? Go get a job, Jack.

Look, Mr. Chairman, what we're discussing here are unkept promises by that government and matters that are very serious to those people living in that community. I know this government doesn't care about the people in Ocean Falls or anywhere else, for that matter. All they're looking forward to is winning the next election, and I'll tell you they won't — not a chance.

Last but not least, I would like to know what the future of that community is going to be. Are you going to let it rot — a brand-new hospital, brand-new schools, libraries, a recreation centre and new homes? What are you going to do with the assets in that community? Tell me, Mr. Minister.

HON. MR. PHILLIPS: I want to say first of all that I appreciate the comments of my colleague on the ALRT, giving a living example of something where the members involved in it are creating a high-technology industry. New development, new jobs are coming here, and I appreciate his remarks.

I could go into a number of similar projects. I want to answer the member for Mackenzie (Mr. Lockstead). He seems a little uptight this afternoon. I don't know what has gotten into that member lately; he's been testy in the House. I thought maybe he'd quit smoking or something like that. Maybe you should watch your blood pressure, because it's hard on your health.

Anyway, we have endeavoured to do something with that big sow called Ocean Falls that we were saddled with by the former NDP government. If the man from Vancouver East

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who tried to get back into politics, when he bought that great deal.... What was his name? Bob Williams, the great socialist architect of the economy. He was the minister of everything. He didn't give Ocean Falls any timber; you know that. They bought it out.

You didn't mention the new fish industry that's going in. How come you forgot that?

Interjections.

HON. MR. PHILLIPS: We are doing our level best. We ran into some difficulties in trying to utilize that decadent cedar. We're still working on trying to do something there, but we're not miracle-workers. If we followed the socialist philosophy, we'd just put in a big funnel that ended at Ocean Falls, and we'd shovel money in there.

MR. LOCKSTEAD: Mr. Williston says this month you've abandoned that project.

HON. MR. PHILLIPS: I listened to you, my friend; now you listen to me for a minute. We're trying to do something. I can't look into a crystal ball. We're working on it. We've run into some difficulties in trying to do something in a positive way for Ocean Falls, and I don't think you give me credit for trying. We do care, and you know it; I've talked to you personally. My friend, you know we're trying. We're not miracle-workers. We're working with a very difficult situation.

MR. LOCKSTEAD: On June 24 you abandoned the project — Mr. Williston, quote.

HON. MR. PHILLIPS: We're still working on it, my friend, and you know we are. We're trying to do something in a very positive way, because I realize that it's in your riding. If I had wanted to be political, I would have just abandoned Ocean Falls and said to the devil with it.

MR. LOCKSTEAD: You have abandoned it.

HON. MR. PHILLIPS: No, we haven't; we're trying to do something in a very positive way.

MR. LOCKSTEAD: I had a couple of specific questions of the minister, and I didn't want to hear all that balderdash that we just heard. The specific questions are: (1) What are you going to do with the assets of that community? Are you going to let them sit there and rot or are you going to do something? (2) Are you going to allow that government to abandon water transportation services, the only transportation service they have in the community, this winter? Are you going to allow that to happen? Yes or no.

HON. MR. PHILLIPS: Well, Mr. Chairman, I have just been informed that the B.C. Ferry Corporation is dropping in there. I'd be happy to provide you with the details. We're taking frozen fish out of there, because of that industry we've got in there, and we have to call in there, but I haven't got the details right with me. I know that my colleague the Minister of Highways (Hon. Mr. Fraser), responsible for ferries, is not going to abandon that place — you know that.

MR. LEGGATT: Mr. Chairman, I have a couple of very brief questions. One deals with the financing arrangements for B.C. Rail on the Anzac line, which I hadn't asked the minister previously. The minister knows that B.C. Rail signed $87 million in short-term notes on July 2. I'm still waiting to find out whether those notes have been rolled over. Is this still a pay-as-you-go project as far as B.C. Rail is concerned, or is there going to be any additional long-term debt to B.C. Rail on the construction cost of the Anzac line?

HON. MR. PHILLIPS: Mr. Chairman, as I pointed out to the member yesterday, the Minister of Finance (Hon. Mr. Curtis) is the fiscal agent for all Crown corporations, and I suggest that when his estimates come up in the House, you deal with the financing with the minister.

MR. LEGGATT: I just thought the minister might be interested to know how much debt he's saddling B.C. Rail with.

We are. I take it, on vote 51 at this point. I might point out to the minister that when he dealt with manufacturing.... In 1974 the percentage of those employed in the manufacturing industry in British Columbia was 15.5 percent. Today it's down to 13 percent. The number of workers actually engaged in secondary manufacturing as a percentage of the total continues to decline. It's doesn't go up. That's obviously a part of the minister's strategy.

Mr. Chairman, under vote 51, which deals with the minister's office, we think it's only fair and appropriate that the minister's expenses should be limited to the expenses that a very generous Legislature gave to him last year. We don't see why the minister continually has to expand those expenses. The amount of the change is really quite modest. Under vote 51, we wish to take off the amount of $28,025, and I so move.

Amendment negatived on the following division:

YEAS — 18

NAYS — 28

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

Vote 51 approved.

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On vote 52: ministry operations, $45,343,633.

MR. LEGGATT: Mr. Chairman, this vote refers to the ministry's operations rather than the ministry office. Again, we find that if we kept those things like travel and office expenses at the very generous level of last year — that's without the cuts this party proposed last year — there would be enough for the minister to do his work. I would therefore move that vote 52 be reduced by $437,302.

Amendment negatived on the following division:

YEAS — 16

NAYS — 28

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

Vote 52 approved.

Vote 53: British Columbia Railway debt-servicing, $70,000,000 — approved.

Vote 54: financing transactions, $5,689,750 approved.

The House resumed; Mr. Speaker in the chair.

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

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

MR. SPEAKER: On Tuesday, July 13, the hon. member for Skeena (Mr. Howard) rose on a matter of privilege. He made a statement to the House relating to the invoices and vouchers apparently under examination by the Select Standing Committee on Public Accounts and Economic Affairs.

As I understand it, the gist of the hon. member's concern is that certain vouchers and invoices which were in the possession of and transcribed by a research worker on one date were not available at a later date when the hon. member for Skeena and some other members of the committee on public accounts and economic affairs wished to examine them. It has been a long-standing rule of this House that matters arising in committee should be settled within the committee itself. I refer you to B.C. Journals, February 14, 1968, pages 52-53. It has also been a long-established rule in all parliaments within the Commonwealth that the House does not have knowledge of proceedings in committee, save and except that which comes to the House by way of a report from the committee from time to time.

Hon. members will understand that it would be impossible for the Chair, in the absence of a report from the committee itself, to make any determination relating to matters before the committee. Even with such a report, it must be borne in mind that matters of a procedural nature arising in committee should be settled within the committee itself.

Accordingly, the Chair is unable to find that the matter raised by the hon. member qualifies as a matter of privilege.

MR. HOWARD: Mr. Speaker....

MR. SPEAKER: There can be no debate.

MR. HOWARD: It's not debate; it's a point of order.

MR. SPEAKER: On a point of order, the hon. member for Skeena.

MR. HOWARD: I seek some guidance. Did Your Honour consider the fact that this did not take place in the committee? It was not a proceeding in the committee; it was a proceeding in the Douglas Building.

MR. SPEAKER: Order, please. The member is now debating the issue. The member is out of order.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6:06 p.m.

[ Page 8787 ]

Appendix

AMENDMENTS TO BILLS

62 The Hon. L. A. Williams to move, in Committee of the Whole on Bill (No. 62) intituled Attorney General Statutes Amendment Act, 1982 to amend as follows:

SECTION 10, by deleting section 10 and substituting the following:

"10. Section 81 is amended

(a) by adding the following subsection:

'(7.1) Where the registrar decides that the owner is the judgment debtor, he shall make an order accordingly and forthwith deliver or mail by registered mail a copy of the order to both the judgment creditor and the owner.',

(b) in subsection (8) by striking out 'where the judgment creditor does not approve of the order,' and substituting 'where the judgment creditor does not approve of an order made under subsection (5) or an owner does not approve of an order made under subsection (7.1),', and

(c) by adding the following subsection:

'(13) This section does not apply in respect of a judgment registered on an application made under section 79.1.' "

SECTION 10.1, by adding the following heading and section:

"Court Order Interest Amendment Act, 1982, Amendment

"10.1 Section 5 of the Court Order Interest Amendment Act, 1982 is amended:

(a) by adding to section 7 (1) of the Court Order Interest Act, as enacted by that section, the word 'simple' after 'annual', and

(b) by adding to section 7 (2) of the Court Order Interest Act, as enacted by that section, the word 'simple' after 'shall bear'."

SECTIONS 31.1 and 31.2, by adding the following heading and sections:

"Property Law Act Amendments

"31.1 Section 16 (2) of the Property Law Act, R.S.B.C. 1979, c. 340, is repealed and the following substituted:

'(2) An instrument or power of attorney executed by a corporation, or an instrument executed by a corporate attorney on behalf of a corporation, is defectively executed under the Land Title Act unless executed under seal.'

"31.2 Section 31 (1) is amended by adding 'a statutory building or statutory letting scheme' after 'a statutory right of way'."

SECTION 47, in subsection (1) by adding — 31.1 and 31.2" before "32".