[ Page 3737 ]

CONTENTS

Ministerial statement: B.C. Systems Corporation data. Hon. Mr. Curtis –– 3737

Mr. Hanson

Routine Proceedings

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

(Hon. Mr. Rogers)

On vote 20: minister's office –– 3738

Mr. Lauk

Mr. Lockstead

Mr. Nicolson

Mr. Passarell

Mrs. Wallace

British Columbia Transit Amendment Act, 1984 (Bill 10). Committee stage. (Hon. Mrs. McCarthy)

Third reading –– 3755

FRIDAY, MARCH 9, 1984

The House met at 10:04 a.m.

Prayers.

HON. MR. NIELSEN: Mr. Speaker, today marks the last day at work for Mrs. Pat Fish, who has been a faithful member of the Sergeant-at-Arms staff for the last eight years during ten long sessions. I would like the members to wish Mrs. Fish a happy birthday and a long and successful retirement.

HON. MR. RITCHIE: I would like the house to extend a warm welcome to a group of visitors to our city: the governors and federation board members of the Soroptimists International of the Americas. We have with us Dorothy Molin from Oregon; Dr. Liz Blanchard and Petty Zimmerman from California; Mary Helen Madden and Joan Mintz-Ulmer from Philadelphia; from Tennessee, Millie Gramer; from Alaska, Marsha Holomon; from Panama, Gail Dawson; from Japan, Eiko Yuasa; and the president-elect, Joyce Blake, from Calgary. With these guests is my executive-assistant, Christine Haley, who is the Soroptimists International board member for western Canada. Would you please welcome these ladies.

B.C. SYSTEMS CORPORATION DATA

HON. MR. CURTIS: Mr. Speaker, I wish to make a ministerial statement.

Yesterday afternoon in question period the first member for Victoria, who is not in the House at the moment, alleged that a computerized address label from within the data bank of British Columbia Systems Corporation had "fallen into the hands of the Social Credit Party." He further suggested that this label, which was part of the Ministry of Industry and Small Business Development mailing in April of 1983, was also used on a fund-raising letter sent by the British Columbia Social Credit Party over the signature of the former party president, Mr. Bernie Smith. In a fit of piety, Mr. Speaker, the member asked how such a breach of security from a databank in B.C. Systems Corporation could "fall into the hands of the Social Credit Party." In a supplemental question the member said that his informant is extremely concerned that his label, with an incorrect address and a computerized number from a government codified bank, has turned up in the hands of a political party. The member added, toward the end of the questions, that I had not satisfied the House with respect to a breach of security surrounding this matter. Mr. Speaker, I hope now to satisfy that member and this House.

The member's allegations attack the professional reputation of employees of a Crown corporation, B.C. Systems Corporation, in a manner which I find irresponsible.

Mr. Speaker, a minimum of research, which I would expect any member of this House to undertake or request, would quickly reveal the facts of this matter, which are, as I understand them, the following. The number code on the address label in question shows that it is part of a Dun & Bradstreet mailing list.

This list, Mr. Speaker, is available to any legitimate business firm, organization or society. I am informed by the Ministry of Industry and Small Business Development that they have routinely used such lists to distribute ministry publications, such as "Talking Business," mailing them to key members of the financial and business communities. They have taken that list and have added other names mainly international — to provide a larger list.

It appears that the British Columbia Social Credit Party, wishing to address a message to similar individuals, purchased this list on its own, independent of any government involvement whatsoever. So, Mr. Speaker, simply put, at least two organizations, the Ministry of Industry and Small Business Development and the British Columbia Social Credit Party, along with, I would think, countless other organizations regularly and routinely purchase mailing lists. That fact should come as no surprise to any hon. member, including the one who raised the matter yesterday.

Further, Mr. Speaker, some members of the Legislative press gallery, to their credit, yesterday went to some trouble to check the veracity of the allegations and apparently found them to be without foundation. Other news outlet representatives did not. I hope — indeed, I believe I am entitled to expect — that those who published the allegations yesterday and today will now give equal prominence to the facts as I have stated them this morning and as I earnestly believe them to be. Because of the seriousness of the charge yesterday I believe I have every right to request that this correction occur today.

MR. HANSON: Mr. Speaker, at the same time as that particular event occurred — the letter from Mr. Smith — as you will recall from the press coverage, a number of government employees and managers received similar kinds of letters from the Social Credit Party. People who were managers in government, people who were individual citizens, even staff members of the New Democratic Party caucus, received solicitations for funds. The question arises: where do those names come from? How does the Social Credit Party get control of those kinds of lists?

When I raised that question yesterday, it was raised in good faith....

Interjections.

MR. SPEAKER: Order, please. Hon. members, the ministerial statement was made and the member has the right to respond in a way that also can be heard.

MR. HANSON: Mr. Speaker, the question of security surrounding the sale of B.C. Systems Corporation is a legitimate and valid one of concern to all citizens of this province. That minister has not satisfied this House that the security arrangements, having that kind of control of public information in the hands of a private corporation...that the citizens of this province would have confidence in that matter.

I would like to hear from that minister how government employees' names appeared on Socred mailing lists for solicitation of funds. It was covered in May of last year, when government employees felt intimidated and were quoted in the press as saving that they had concern that their future with this government might depend on their volunteering money to the Social Credit Party. If that minister feels that that weak response to that question is going to satisfy this House, he is sorely mistaken.

It is a matter of public record that public funds were used for private political purposes in advancing the cause of Social Credit in the use of massive advertising, and that minister has never responded to the questions on the order paper. I'm

[ Page 3738 ]

saying that there's a cloud that hangs over that government which requires a forthright response to legitimate concerns raised by constituents through their MLAs in this House.

[10:15]

Interjections.

MR. SPEAKER: Order, please, hon. members. While the rules that govern this House are somewhat non-existent regarding both ministerial statements and responses to ministerial statements, nonetheless there is some necessity on a member when replying to a ministerial statement to stay within the confines of the subject matter covered, and I would commend that to all members in future.

The second member for Victoria (Mr. Blencoe) has advised the Chair that he wishes to raise a matter under standing order 35.

MR. BLENCOE: Mr. Speaker, I ask leave to move adjournment of the House under standing order 35 to debate a definite matter of urgent public importance. The matter concerns the critical level of unemployment in British Columbia.

Unemployment in British Columbia has jumped once again as a direct result of this government's lack of action or concern for the critical employment situation throughout British Columbia. Vancouver Island is now experiencing an official unemployment rate of 19.3 percent, and we know that the real rate is even higher than that, Mr. Speaker. Victoria has the dubious distinction of being the city with the second highest unemployment rate in the nation, with the rate for February jumping to 17.6 percent, up from 16.2 percent.

The southern interior of the province is staggering under an unemployment rate of 22.6 percent. Since these figures....

MR. SPEAKER: Order, please. Hon. member, we must not enter into debate when we are canvassing a 35. We must constrain our remarks and briefly state the matter. With all due respect, hon. member, clearly you are now entering into debate on the issue.

MR. BLENCOE: I'm just trying to justify the reasons for the section 35, Mr. Speaker.

Since these figures don't include the people who have stopped looking for employment, have only worked for a few hours or desire full-time work, it's clear that the real rate of unemployment in the province of British Columbia is far higher than the figures indicated by Stats Canada. People all over the province are hurting from this government's lack of direction. Clearly there is no recovery in the province of British Columbia, and that's the reason I have a motion under section 35, if you will permit me to put it forward.

MR. SPEAKER: Thank you, hon. member. The Chair will undertake to bring a response back to the House at the earliest opportunity.

HON. MR. McGEER: Mr. Speaker, I don't know whether this will be comparable in nature to some 45 or so motions that have been brought forward, each of them turning out in the long run to be an abuse of the rules of the House. Mr. Speaker, we need to bring down a decision in this House that will clarify whether or not abuse of the rules of the House is taking place, or whether a legitimate matter of urgent public importance...

MR. SPEAKER: Order, please.

HON. MR. McGEER: ...is being placed before the House, because the time and valuable interests of the House....

[Mr. Speaker rose.]

MR. SPEAKER: Order, please.

[Mr. Speaker resumed his seat.]

MR. SPEAKER: Hon. members, the Chair was engaged in reading a matter that had been forwarded to the Chair, and I cannot recall whether the Minister of Universities, Science and Communications stated for which purpose he sought the floor. Would the minister please advise the Chair as to the method by which the Chair allowed the member to gain the floor.

HON. MR. McGEER: Mr. Speaker, I was seeking a clarification of a ruling that Your Honour would bring down, which would be to deal not just with this specific instance but with the general abuse...

MR. SPEAKER: Order, hon. member. Thank you.

HON. MR. McGEER: ...of a series of this matters which this member feels is an abuse of the House...

MR. SPEAKER: Order, please. Order!

HON. MR. McGEER: ...itself.

MR. HOWARD: On a point of order, it just seems to me, Mr. Speaker, that of all people in this House who need clarification, it's surely the Minister of Science. I hope you give it to him.

MR. SPEAKER: Hon. member, the Chair will undertake to possibly enlarge a little on the 35 that has been presented and will bring that back as well.

Orders of the Day

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

ESTIMATES: MINISTRY OF ENERGY,
MINES AND PETROLEUM RESOURCES
(continued)

On vote 20: minister's office, $151,016.

MR. LAUK: Yesterday when we left off, I think we had just heard a stirring speech from Placer Jack, and I wonder if the minister would care for a few moments to respond to the hon. member's inquiry, is the minister going to introduce an amendment?

Interjection.

MR. LAUK: That could be fatal.

[ Page 3739 ]

Mr. Chairman, energy is a portfolio that has to be watched very carefully, one reason being that hydro is, I believe, part of the responsibility of this minister. The B.C. Hydro sale of surplus electricity to the United States is a very important issue with us — not only with the New Democratic Party opposition but with a lot of British Columbians. Therefore we watch and monitor most every public communication of the minister to decipher what policy the government has today and what policy it may have in the future.

With that in mind, we are disturbed to hear that the government may be embarked on a program of hydroelectric development designed for the purpose of exporting power. The minister has confirmed that to some extent in a communication between himself and the B.C. Wildlife Association; but it comes as a point of concern to us, and I think to all British Columbians, that the Minister of Energy has stated at least an initial intention on the part of the government to seriously consider hydroelectric development and construction at great capital cost — and at great environmental cost, which we all have to face in terms of hydroelectric development — for the exclusive or near-exclusive purpose of the export of that energy to the United States. Although the New Democratic Party supports the idea of selling excess or surplus electricity, we do not think that that is a blanket support from the opposition for the government's move. We want to qualify it very seriously with this government. We will fight quite vigorously any move this government makes to embark upon a program of developing electrical energy in this province through great capital investment for the purpose of supplying that power, which in effect exports jobs, to the United States. If that's the purpose of the government, we charge that the government is betraying the heritage of this province — that this government has deliberately embarked upon a course of permanently placing future generations of British Columbians in a most subservient position to the United States economically.

The committee may recall that some years ago certain key American politicians suggested a North American power grid, if you like: a continental energy plan, which patriotic Canadians quickly identified as an attempt to undermine Canadian sovereignty, as an attempt to harness and enslave the massive energy resources of Canada to be put to the sole purpose of serving, at cheap cost, the massive industrial machine in the United States — providing jobs, wealth and income to Americans and providing very little or nothing to Canadians except future generations of being drawers of water; in this case, water for electrical use. That must be avoided at all costs. Certainly the export of surplus power to the United States at these times is a responsible move. But we oppose any move of this government to participate by using taxpayers' money or the capital of Hydro to participate in any kind of north-south power grid supplying a permanent supply of power to the United States, which indeed exports Canadian jobs in the long run.

Interjection.

MR. LAUK: Mr. Chairman, obviously the minister of economic development, by his cross-comment when he says that I don't agree with the governments of Manitoba and Quebec, does not quite grasp the point that I'm trying to make. The export of surplus power may be of short-term benefit to Canada and particularly in this case to British Columbia. I say "may," and I'll deal with the deal that's been made by the government in a moment and point out some weaknesses. But the idea of a permanent link or encapturing of our power resource for United States industry is anathema to everything we've dreamed of in this country. This government shouldn't be so foolish, for short-term gain, as to make those long-term commitments to the United States. It would be a serious and terrible mistake. Our unemployment rates are going up; in the United States they're going down. In Canada we should be most aware of our responsibility to the current generation of working people and the next generation of working people. This short-term, fast-buck type of mentality has to stop. Responsible sales on an interim basis is one thing. Long-term commitment and sale of electrical power to the United States is a sap's game, a fool's paradise, and it will lead us into a permanent economic stagnation here in British Columbia. It is not very clever and it is not very imaginative.

I hope it's a hint, and maybe the minister will confirm it was just thinking aloud, and nothing in the way of government policy that we will have a long-term commitment. I'm talking about capital investment jointly with United States users of our power or unilaterally to develop hydroelectric projects and transmission lines for the sole purpose of the permanent export of our power. Otherwise this minister will go down in history and in infamy as the minister who tolled the death-knell....

Interjection,

MR. LAUK: Well, I hope so, to the Minister of Agriculture and Food (Hon. Mr. Schroeder), who says that what I'm saying is an exaggeration. I pray so. This is not a partisan political issue. But this minister will go down in infamy if he is the one who introduces that short-sighted policy for the province of British Columbia and its electrical energy.

[10:30]

The second point I want to make is about the contract with the United States for the export of hydroelectric energy. It is clear that the price we're negotiating is very low; to say it's competitive is an understatement. When you look at the projected amount of energy that we are going to sell at the prices being negotiated, it is interesting to point out that if this kind of outflow at those prices to the United States occurs over a year or so, it won't even meet the yearly interest charge on the Revelstoke Dam. You can pick any major electrical project under Hydro, and the interest rates won't be met by the sale of this energy. Those costs are very low. We're selling it pretty cheap; maybe we had to price it low to get a commitment from those customers in order to sell this energy in the next little while. I can understand that kind of a market penetration strategy, but at the same time I am concerned that the price is quite low. Correct me if I'm wrong, but I think it's less than a third of what is being charged for power in the Seattle and northwest areas of the United States. That's pretty cheap power.

British Columbians have paid a lot for that power, and they're paying a lot of interest on the projects that generate that power. Through generations the people of this province have paid a lot for hydroelectric development in terms of their environment and lifestyle. Who accounts for those costs? If we're going to sell power, let's not give it away. I understand that we have to be competitive, and I even understand a market penetration strategy of being very competitive. But it leaves off from the word competition and goes into....There is a question of competence when you sell power at a

[ Page 3740 ]

very low price, when that low price may not be necessary to capture the market.

On those two points I question seriously whether the minister is administering this part of his ministry as competently as I know he can. I bring those to his attention and ask him to consider my remarks.

The other point that I want to make.... The member for Prince Rupert (Mr. Lea) has asked me, in his absence, to raise the issue of northeast coal development. I've touched upon this subject before. I am concerned that we have concentrated very heavily on what Ron Basford calls an ironclad contract, and to a great extent ignored the practice and custom of Japanese importers of our coal over many years. Roberts Bank had an ironclad contract 20 years ago. When the Japanese steel mills have stockpiled coal, we know how they don't pick up that coal.

Interjection.

MR. LAUK: The Phantom Maru is correct. They're famous. "The last word we heard from Tokyo," says Roberts Bank, "is that the Phantom Maru is in the Bering Strait, just rounding Saturn." In other words, these ships never reach their destination, according to the expected times of arrival and the expected times for picking up the coal that this "ironclad" contract says. If they don't pick up that coal, they don't pay for it. They know that.

To say "ironclad" in the coal business is nonsense. The fact is that if we were the only producer, or even major producer, of metallurgical coal for Japan, ironclad would have more meaning than it really does. But Australia and, to some extent, China are supplanting us as the major supplier of coal. It is interesting that the United States is levelling off too. It seems to us that they lost a lot of the market through inefficiencies, and that we gained. But now we're falling off the edge of the earth, and it seems to me that the government has a role to play.

I am very critical of high ministerial travel allowances, but if they're going to be there, I would be very keen to see this minister, who is articulate, eloquent and knowledgeable, find out what is happening to our export markets in Japan. Our percentage share of the metallurgical coal supply to Japan has dropped drastically in the last two years. Australia's is soaring. Even the trickle of metallurgical coal from China has increased quite remarkably, and they haven't completed transportation lines into their major coalfields to supply Japan. Major contracts have been signed with Japan.

We're too parochial, it seems to me, in dealing with the northeast coal project. This is what happens when you have such a political and emotional investment in a project such as the northeast. First, the southeast and northeast depend greatly upon whether or not the steel mills of Japan are working and working at capacity. Second, they depend greatly on a competitive price. It doesn't matter what kind of so-called ironclad contract we have with Nippon Kokan; they will buy coal from Australia at lower rates; the coal from Australia is at a much lower cost per tonne than it is from British Columbia. We've got to be crazy to ask people to expect to believe that the Japanese steelmaker is going to buy our coal at premium rates when he has lower-cost coal of comparable quality from Australia. Has the minister considered this critical situation? Has he developed a policy to save the falling coal sales to Japan, or to increase our sales there? If so, what is it?

Lastly, I'm asking the minister to not attack only the federal government's subsidies of Nova Scotia and other coal suppliers. I would ask the minister to also consider, when he is attacking the subsidies of the federal government to the Maritimes to supply coal to Japan, the fact that Denison Mines is hiring Nova Scotian miners in its mines. It seems to me that with the very heavy unemployment rate in British Columbia.... I know we're all Canadians, but I think we should consider why, with one of the highest unemployment rates in Canada, we can't hire British Columbian miners. And if there aren't any, why not? Is it because they closed the mining school in Rossland? Maybe not, maybe so. Is it because the vocational component of our education system has failed? What about training? What about apprenticeship? What about all of this — giving opportunities to British Columbians to take jobs in our projects so heavily subsidized by the public purse? What answer can he give this House with respect to Denison's bold move to hire 150 miners from Nova Scotia? I know they're good miners, and I know they're fine Canadian citizens. But after all, it was over a billion dollars of British Columbia tax money that went into that project, not Nova Scotia tax money. I would like to know that some of our young people can get job opportunities up there in the mines — permanent jobs.

Interjection.

MR. LAUK: My friend from Nelson-Creston (Mr. Nicolson) says it costs a million dollars a job. That's really capital-intensive. Surely to goodness we can supply those jobs to British Columbians who have helped to pay that. Those are the initial points that I wish to raise with the Minister of Energy, Mines and Petroleum Resources, Mr. Chairman.

HON. MR. ROGERS: B.C. Hydro — if I could start off with the way you went through your list.... If the member will appreciate the time lag in building a major hydroelectric project in this province, then he will appreciate that at the time the Revelstoke project, which is the one that is on stream right now, was announced there were people saying that if we didn't complete this one and start Site C instantly and also look at two or three others, the lights would be going out in British Columbia. I don't think there was anybody who forecast quite the downturn in electrical load....

MR. NICOLSON: I did. I put it in writing. I put out graphs — a whole monograph.

HON. MR. ROGERS: You can speak a little later on if you like. I was quite quiet actually when he was speaking.

Anyway, lots of experts and other people.... I suppose that in a previous portfolio I might have even been critical of this operation on occasion. However, we now find ourselves with surplus electrical energy for the first time. What do we do with it? We can spill it over the top of the spillway until such time as our domestic load grows to the point where we can use it, which is not very productive. We've already done the environmental damage while this particular dam was being built. So what do we do with the rest of the power? Well, we can export it, we can spill it, or we can try to give it away.

[ Page 3741 ]

Our neighbours to the south have a surplus of power. They are bound by legislation under the Bonneville Power Administration which prohibits them from exporting some of their surplus. We aren't quite so hidebound as they are; in fact, Bonneville could have easily taken that market from California that we have captured had they been allowed to do so. It's a seller's market for electricity right now.

Arizona has brought on a very large major coal-fired generating plant in the Flagstaff area, which is producing electricity that they are trying to market into New Mexico and Texas. But guess which market they look to most favourably? They look to California, which at the present time is in the enviable position of being in a buyer's market, although not by their own design. PG&E and the other utilities in California are very much aware of the fact that they are burning fossil fuels to generate electricity. They have a long-term problem which is much more severe than we're able to handle — or even want to handle — on a short-term basis. So we're going into a competitive market with California. It costs money to wheel power the distance that we have to wheel it, between the border and our California markets; therefore our price can't be the same as someone who can deliver that power to the Los Angeles city gate. Nonetheless, we sold that power at 22 mills. That's revenue that comes directly to the province.

We do not have a policy of building for export. The Premier enunciated that recently, and I enunciated that recently. If that were to be a government policy, it is something that at present is not even advocated by the province. In fact, this whole matter of exporting surplus electricity is based on the fact that power companies can't...you can't stop a project as big as Revelstoke, or as big as any of the major power generation projects that we have in the province, just because the load disappears. Once you've made that commitment, you're into that position. In the past we've been able to export some of the power on a very short-term basis. British Columbia always wants to be in the position of being self-sufficient in electricity, although not very long ago there was some suggestion that we'd be importing electricity from Alberta.

There are anomalies in the United States. There are areas such as Seattle City Light and Tacoma City Light — that have power dams that were built in the FDR era, back at the height of the Great Depression, with extremely low-cost power. They service only the downtown areas of these municipalities. The growth has all been in the urban areas, which are serviced by other utilities, so you have pockets of very cheap electricity in the United States. Those anomalies do exist. We have a postage-stamp rate in British Columbia, so that that doesn't exist. While there are places where the rates are very low, people who have power from Puget Power or from many of the other power utilities in the States are facing horrendous increases in power. So it does vary all over the place.

We don't plan to build for export; that's not a government project right now. But I do plan to maximize every single possible dollar that we can out of the dams that we have built. If it means that we export power at a competitive price — it's not even a market-clearing price, but a competitive price with the other utilities — then we're going to do that. We own this utility, and the maximum amount of return we can get for the shareholders, the smaller the rate increases that Hydro has to ask for when it next goes for a rate increase.

[10:45]

I think that answers your question on hydro. I am concerned about the production of coal in Cape Breton Island, where one miner produces 4.5 tonnes of coal per day versus the 30 to 35 tonnes per day produced by a miner in British Columbia. I'm also concerned that there are subsidies for the asbestos mines in Labrador. whereas the people in Cassiar who produce asbestos aren't in that privileged position. If you consider the fact that miners in Cassiar are paying federal income taxes, some of which go towards literally employing somebody else to produce the same product with a subsidy, this must be of concern to them. It's not a major factor, but it is a factor. It means that Nova Scotia coal has been able to go, at $50 and $52 dollars a tonne, into a market which has been considerably higher than that for both steaming coal and metallurgical coal from British Columbia.

All of the coal-exporting areas of British Columbia now export coal to 42 different countries. We go through the Pacific as far as Karachi in Pakistan, and through the Atlantic as far as Alexandria in Egypt. So Japan is not our only market, but you're right that it is our major market. We have had coal from British Columbia getting into northern Europe as far as Denmark, and there's a great possibility of our being able to export coal into Belgium. But you're quite right; the majority of our coal....

MR. LAUK: Does it go by mail?

HON. MR. ROGERS: No, it doesn't, actually. In fact, the one big market where we have a potential is India. Their difficulty is that they can't take ships larger than 25,000 tonnes, because of their limited port capacity. We can compete with Poland in exporting coal into Pakistan, and we do. As a matter of fact, four to five major vessels a year deliver coal there. So the market isn't that insignificant. In fact, the more we can diversify our markets the better off we are. We are competing quite convincingly in South and Latin America in coal exports.

How do I as the minister view the problems with our exports to Japan? I think price negotiations have to be company-to-company. I don't believe that's the role for the minister to be involved in. I think our role is to monitor the fact that when coal shipments are made from British Columbia, one particular area isn't favoured over another area, or one particular mine isn't necessarily held up to ransom over another one. There are Australian producers that have lower costs of production. but not all Australian producers have lower costs of production: many have higher costs of production than we have in British Columbia, but some — especially the BHP property that was formerly the Utah property — do have a lower cost of production than some of the British Columbia mines. But coal is different. Different coals have different steaming capacities and different metallurgical capacities, and therefore there is a requirement for different qualities of coal.

The one thing that I think would be in the best interests of the Japanese buyers to do is to see that the reduction in their steel production. which is now, I believe, down to 105,000,000 tonnes a year.... If it were to be the case that the corresponding reduction in their requirements for coal is shared among the various coal producers — Australia, the United States, the People's Republic of China and British Columbia — on a more or less equal basis, which I suspect is what's in their best interest and probably in our best interest,

[ Page 3742 ]

then we will have survival in the industry. The industry can make up their own minds about what their costs of production are and what they're prepared to sell their coal for. I don't believe that's a role that I want to get involved in. Price negotiations are going on at the present time in Tokyo with each of the British Columbia producers, all of which are very big companies. I believe they each go over for a week at a time to deal with the various steel companies involved.

I believe that answers the questions you put forward.

MR. LOCKSTEAD: Because we did many estimates less than a month ago, I think we're pretty much aware of the state of the mining industry. I am going to confine my remarks at this point to mining; other aspects of the minister's portfolio we'll deal with later, presumably. I intend to take a more positive approach. I think that we on this side of the House, and people who have any interest at all in the mining and petroleum industries, are all pretty well aware of the state of the mining industry, with mine closures, unemployment and this kind of thing; I feel it would be redundant to quote those figures over again and again, as we tend to do sometimes in this House. The industry monitors itself quite well in terms of what is happening in the industry, and all of the members of this House receive publications from the industry and occasionally from the ministry.

While saying that I was going to keep my remarks a bit more positive this time, there is a certain publication that hasn't come before this House since 1979 — I see the minister smiling — and the minister is bound by section 21 of his own act to produce an annual report every year. The minister did tell me while we were going through his estimates in a mini form a few weeks ago.... My first question to the minister, since he hasn't complied with his own act, is: is he now going to resign? No? I guess not. I think you should, but if you did, who would we get, Mr. Chairman? Maybe we'd get you, Mr. Chairman. Okay, the minister is not going to resign, so I guess we should proceed then, shouldn't we?

There are many problems in the mining industry — and I'm really saying that for the record and not for the minister's edification; he is very familiar with the problems in the industry. It's quite evident to some of us, and certainly to me, that the government really has no long-term — and not even a short-term — strategy to alleviate what is a pretty bad situation in the mining industry in British Columbia today. So I've prepared a bit of a statement — it's quite short — and put forward a very positive suggestion to the minister and given some reasons for my proposal. It shouldn't take too long.

The mining industry is an important element of British Columbia's economy, accounting for about 5 percent of gross provincial product directly and 8 percent when indirect effects are included. It is of particular importance to several regional centres of the province: the Kootenays, northern British Columbia, and the list goes on. The industry, however, has a number of characteristics which have created economic problems. It is highly capital-intensive, requiring over half a million dollars of capital investment to create one direct job in the industry. It is expected that a trend toward lower direct labour requirements will continue. As a direct consequence of this capital intensity, the industry tends to be controlled by large, externally based corporations rather than by British Columbians. Mining developments are increasingly located in remote areas, making the provision of new roads, railways, power lines and townsites a highly expensive proposition for the citizens of this province.

Finally, mining has been highly cyclical, especially during the 1970s. The current recession is a dramatic instance of a recurrent pattern of boom and bust which has created unacceptable levels of economic and social dislocation. I believe a mining policy in the 1980s must accomplish two broad goals. Firstly, it must ensure that the mining workforce and the communities dependent on it are protected as much as possible against unstable conditions of the industry. Secondly, ways must be found to maintain the viability of mining and to increase its contribution to the provincial economy. To alleviate the devastating pattern of community shutdowns during the inevitable bottom of the market cycle, the provincial government should investigate concrete ways of maintaining production. Mr. Chairman, I want to tell you that I am putting these forward at this point as suggestions, not as policy either on my part or my party's. I don't think any of these suggestions should be dismissed lightly.

One would be to offer loans to mining companies to cover the real operating losses for a specified period, thereby maintaining provincial production facilities in good condition for the inevitable market upturn. I would like to suggest to you, Mr. Chairman, that this is not a new or radical idea. Some countries in the world do utilize and practise this type of economic...to flatten out economic impact of the industry.

Such a program would involve an initial outlay of public funds but would decrease unemployment and welfare payments — as well as avoiding the large costs of starting mines when economic conditions improve. Another option deserving careful study is perhaps stockpiling minerals during periods of low demand and selling them when prices improve. This is another tactic that has been used somewhat successfully by several northern European countries that we could name. I am sure the minister is much more familiar with the process than I, because he deals with it every day. I am putting these suggestions forward in the hope that the minister will consider them seriously.

To improve the stability and liveability of mining-dependent communities, a mining stabilization fund should perhaps be established. Once again I am putting this forward as an idea. It may not be a good idea, I don't know, but it should be considered. Its role would be to provide alternative productive employment where temporary mine shutdowns cannot be prevented, to relocate workers and protect homeowners' equity when mines must close permanently and to ensure the provision of a better quality of life in isolated mining communities.

[Mr. Pelton in the chair.]

There are a number of ways such a scheme could be funded, but those who bear the costs of industry and stability should have first claims on the revenue it generates. Disbursements from the fund would be made by a stabilization board containing representatives from industry, labour and affected communities.

Another way in which the needs of the mining-dependent regions can be ensured is through the negotiation of general planning agreements between industry and the provincial government. Such agreements could establish site-specific safety and environmental standards, established levels of

[ Page 3743 ]

procurement from domestic industries, require local recruitment and training of workers and establish levels of government infrastructure and participation. In a situation where new mines are becoming increasingly remote, requiring high levels of government support for new facilities, development decisions should be undertaken, in my view, jointly by representatives of all of British Columbia.

To maintain and improve the contribution of mining to the British Columbia economy, a number of new policy initiatives, in my view, are required. One of the most important is to increase the level of mining-based manufacturing in British Columbia. That's probably one of the most important points I'm making throughout this whole presentation. The trend of deindustrialization which has seen the share of the mining industry rise from 50 percent to 75 percent in Canada between 1965 and 1980 must be reversed. In the situation where fierce international competition is forcing mines to replace workers with machines, the only way to maintain employment is to manufacture the machines here in British Columbia. Secondary industry is what we're talking about job-related activities.

[11:00]

If I may stop there for just a moment, Mr. Chairman, it is my firm belief that we have the technology here in British Columbia to manufacture the type of equipment that is and will be required around the world. We're having a difficult time, and I think the minister did mention this aspect as part of the problem we're facing here today. We have countries like Chile, Zaire — which I think you mentioned — that have a higher quality of ore than we have in British Columbia. It may be of some interest — I know the minister knows this, but I know a lot of people don't — that we in British Columbia many years ago pioneered the processing of low-grade ore, particularly copper ore, less than 0.5 percent in some cases.

A related area of concern is the need to ensure a higher degree of technological innovation in mining and, equally important, to ensure that British Columbians participate in its development. It is not enough, in my view, to talk in terms of high-tech as a new industry. We must be particularly concerned with the development of new technology in our traditional industries like mining or else our ability to compete and maintain employment in this rapidly changing market will be eroded. If such technology is developed and implemented from abroad, all British Columbians will be the losers.

The general planning agreement mentioned above is one way of ensuring higher levels of both manufacturing and technological development. Additionally the provincial government could create an agency to promote domestic development and use of new technology in its traditional resource industries, fund research in our own centres of higher learning and investigate in detail the barriers to developing new resource-based manufacturing in the province.

Having made that statement, I am now going to request through you, Mr. Chairman, that the government and the minister seriously consider setting up a royal commission on mining in British Columbia, for some of the reasons that I've outlined above and a few more reasons I'm going to put forward very shortly. We have not had a royal commission on the mining industry for some time, and the non-solutions being put forward by the present government, I think, are band-aid.

When the minister gets up to reply, he is going to reply about the world markets and world prices and competition from abroad. But I think the reasons for requesting a royal commission into the mining industry go far beyond just that problem, which is a major problem that we all, hopefully, more or less understand. For example, Mr. Chairman, I have reams of material here which I get from the mining industry and the ministry, and we have estimates and revenues, income, output, expenditure but as I go through those documents, it's very difficult for me to know if we are receiving a fair return for the people of the province from the mining industry. Maybe we are. Perhaps some of the complaints of some of the large mining companies are valid. Maybe they feel they are being overtaxed in some cases, but maybe they're not. The point I'm making is that we don't seem to know; that information is not available. I think a royal commission could make some of these determinations. The mining industry is complaining a great deal about certain controls placed upon the industry. Perhaps a royal commission could.... This would give these companies, their owners and operators an opportunity to take their proposals and problems to the commission, and the commission staff could evaluate the mining industry.

In my view, the people who work in the mines have many genuine concerns. I receive from the various unions involved in the mining industry in British Columbia a great deal of information regarding their concerns over health safety standards in certain aspects of the mining industry, relating to everything from silicosis pensions and WCB involvement — or lack thereof — to gaps in the current mining industry regulations in British Columbia. In my view, a royal commission could address itself to some of these problems.

Mr. Chairman, before I take my seat I would like to put forward other points on this one matter that I have been discussing. I have already mentioned the possibility of looking at a stockpiling program, which may or may not have merit. But in my view, a royal commission could look at these aspects of the mining industry. What we're really talking about is a stabilization program.

There is a great deal of genuine public concern — maybe not always rightfully so — about the environmental impact of mining operations in some areas. In my view, that is another aspect that the royal commission could seriously consider. When a mining company wishes to develop a new mine, there is a process which it should follow. We are always assured that when a certain mine — and I'm not going to start naming them, but their names appear in the newspaper from time to time when there's a spill.... The fact is that we are always assured that there will be no environmental impact of a mine locating in a certain valley bottom, mountain or whatever, and the next thing we know there is a spill, and there is a severe environmental impact, with people's health being possibly involved in terms of drinking water, fish kills, and on and on. In my view, a royal commission could address itself to looking at the environmental impact of these situations, and perhaps put forward recommendations for future mining development.

I want to make it very clear at this point that I'm not opposed to mining development in our province. In fact, our economic well-being in this province is to a large extent dependent on the mining industry. There is a way of doing things, and a royal commission could address itself to many of these problems, which would be in the best interests of the mining industry and of the public of British Columbia. If we

[ Page 3744 ]

can receive a fair-share return on that resource — which belongs to all of the people of this province — program cutbacks in social services, health, education and so on could possibly be alleviated or avoided. I think the government has a responsibility in this matter, and at this time I request, in a positive way, that the minister and the government seriously consider appointing a royal commission to look into the mining industry here in British Columbia.

While I'm on this part of my presentation, Mr. Chairman, I want to make one other comment. People in our party do understand that mining is a high-risk, capital-intensive venture. As a rule of thumb — and I think the minister has used this figure himself before — it usually takes about five years between the moment a decision is made to develop a mine after exploration and the time that mine actually goes into operation. There are a number of agencies that the mining developers must go through in order to bring that mine into production.

I want to make it clear that it is not the intention of our party — certainly not mine — to discourage exploration and the development of mining in British Columbia. We understand very well that high-risk capital has to be attracted to the province in order to develop these properties.

This brings me to my last question on this phase of my presentation. During the course of the throne speech, Mr. Chairman, there was a paragraph relating to some deregulation in the mining industry. I wonder if the minister could explain exactly what he has in mind in that regard. Does it mean that the developers of a proposed property will simply go to one agency rather than going through seven, eight, nine or ten, as they are now forced to do? It includes lands, environment, water quality, and on and on, and the federal government is often involved. Perhaps the minister could explain what His Honour meant in that one single paragraph in the throne speech about new regulations in the mining industry.

Certainly I have a number of other questions to the minister, but I'm going to take my seat at this point, Mr. Chairman. We have two other people who wish to say a few words in this regard.

HON. MR. ROGERS: Mr. Member, I do stand on my statement about when the annual report will be down. It actually is at the printers. There are only two people in the ministry involved in the printing of these documents. There's been quite a collection of documents put forward and tabled, and you're aware of them. I do actually have a collection of them here that have been done in the last two years. I can assure you that our annual report is at the printers.

I take your comments as suggestions for what we can do about stabilizing the mining community — not as policy of the opposition. In discussion with me, the mining companies seem almost somewhat disposed to the idea that communities grow when mines come, and then the communities die afterwards. Of course, the problem is the pain that goes through a community. Last year my colleague the Minister of Human Resources (Hon. Mrs. McCarthy), through the employment development fund, did some bridging for some communities that were involved in shutting down. It's my hope that world markets bring back life to these communities.

You mentioned stockpiling, which is rather interesting. If we had stockpiled molybdenum, we would be really wondering whether the world steel industry is going to switch off vanadium and back to molybdenum. I'm now understanding that the Soviets are importing molybdenum after all. That is where vanadium came from, so maybe they've been exporting their vanadium for the high-quality stainless steel and now find they have to import moly. There's a possibility that the price of moly is starting to move up a little bit, and it could come back. But we could end up stockpiling a metal, the use of which is dropping, such as copper. Half the copper in the world is buried underground and belongs to the American Telephone and Telegraph Company. Now it's broken down into little bits. With the change in fibre optics and all those things, we don't know if the market for copper will ever return. Domestic plumbing uses, smaller automobiles, lighter cables, better electronics.... A modern television set has almost no copper in it at all compared to the copper that was in one as little as ten years ago. And that's the market that they trust.

We talked about coal. Lead is not doing well, because the automobile again is the major use of lead, although with the latest spurt in the American automobile manufacturing, we may see some increase in lead use. Zinc is improving, and zinc prices are firming nicely. We are now starting to see some improvement there. Of course our small pet mineral — jade — is looking better all the time. There's greater exploration and interest in it, but it is not very substantial.

You talked about a royal commission. We have had an advisory commission of the industry in the last two years looking at a whole host of things we do — geology, titles, economics and safety inspection. In the case of safety inspection, the employees and unions were well represented on that. We wanted from the industry — not at the royal commission level but at an advisory commission level — critical and constructive suggestions as to things that could be done. As a result of that, the Price, Waterhouse study was done, and we are now going into computerization for titles, so it will take a lot less time to search a title and to get a title inspected.

[11:15]

You talked about the high risk and the difference between the decision to open and the time that you actually do open. Why don't you go even one step further and decide how long it is between the day you borrow the first dollar and the day you pay back that borrowed dollar with the interest? That's what makes the whole business risky, and I guess it's what makes it exciting and makes people take that challenge. People come along in the mining industry, I look at them, and I've learned not to judge them by their cover. Those who look the least likely to succeed are often the ones who are the most successful. I want to give anybody who comes along and wants to go through our process all the encouragement, even if they're not successful. The economic spinoff of an unsuccessful operation.... After all, only one claim in 10,000 actually develops into a mine. How many of those mines pay dividends? That's the full equation. After all, that's the decision you make when you decide to take your risk capital and invest it.

Interjection.

HON. MR. ROGERS: Yes, His Honour did speak about shortening things up.

About seven years ago, coal- and metal-mining guidelines were put in place so that we did have a one window approach. We think there are several places where we can streamline that. I thought some of the agencies that we would send a particular proposal to didn't see the urgency

[ Page 3745 ]

that we saw in our ministry for making decisions. We are now thinking of saying: "If we don't hear back from you within 60 days, we'll assume you approve this particular project." After all, the investment of capital that a mining company has put out is ticking away. That interest that's referred to is ticking away all the time. If it's sitting on somebody's desk because they're too busy to make a decision or haven't got around to making a decision, we're going to have to know if they've got a problem or not. So we want to simplify that process. There is an enormous cross-referencing process that goes ahead. It's not fair to do that. As a matter of fact, a revised schedule has recently been approved by ELUC. It's going to encompass all of the environmental standards, all of the heritage standards and all of the other things we want to do. But we want to impress upon the people who have the ability to slow these things down, or to indicate what the mitigation is, that what we need quickly is a decision, because, of course, of the time that's involved.

You did talk briefly about other countries and what their production is. There are three or four standard things that they don't do that we do. Most of them have no environmental standards at all. Worker safety is not something that's even included in the case. We are by far the most efficient from a manpower point of view. There's nobody who comes any.... Well, there are a couple in the United States, in some eight cases, that come as close as we do. But by and large the Canadian miners are extremely efficient people in terms of their production. Sometimes they're prepared to even sacrifice the national currency for the sake of their mining endeavours. You know, mining is very important in British Columbia. We think it's probably — from my perspective — the number two industry in the province statistically. But there are other ministers who disagree with that. We're competing in the big world out there, and we're competing with people who don't use the same standards. I wouldn't propose that we should lower our health, safety or environmental standards. I don't think you would, either. So we have to compete with them on an efficiency basis. In the long run, the greatest things we have going for us are our reliability as suppliers and our ingenuity in production.

MR. NICOLSON: Mr. Chairman, in his remarks to the second member for Vancouver Centre (Mr. Lank), the minister said that no one foresaw several years ago that we would have a surplus. I think that we should learn some lessons from this. What I did in January 1978 was take a look at what the B.C. Hydro performance had been. Several things came out of that, one of which was that the people in B.C. Hydro, including its chairman, Robert Bonner, accepted the principle of what we in mathematics call geometric growth — that is, a growth that doubles predictably every ten years, every twelve.... At the time they were using 12.5 years. They were saying that the demand for electrical energy was going to double every 12 years. If you do that it goes up and up and up. Of course, it eventually becomes absolutely impossible.

There are many mathematical analogies to explain what geometric growth is. Probably the most popular one is a fictitious story about the person who discovered the game of chess. He went to this Persian king and the Persian king wanted to reward him. So he said: "Well, all I want is a chessboard full of grain, but I want it filled in the following way. I want one grain on the first square and two on the second square, four on the third square, eight on the fourth square, etc. for the 64 squares." Well, by the time you get up to the sixty-fourth square. there would not be enough grain, even in the world today to cover that, because if you double something 64 times, you get up to an enormous number. That was the trouble with geometric growth.

What I discovered from a very unsophisticated — I might say, clumsy — analysis of B.C. Hydro, though, was that it was not growing geometrically; it was growing what we would call in mathematics "arithmetically": in other words, it was growing by almost equal increments each year; it grew as a straight-line graph, not as a curve. If that's what it had done over the decade from 1967 to 1977, during a period of remarkable economic growth, then it would seem to an unsophisticated person that that might be the trend for the future. If that were the trend for the future, it would predict that Hydro's projections were way off. I suggested that there should be an inquiry. I said that an inquiry might show room for a ten-year moratorium on B.C. Hydro growth. But I would expect more sophisticated persons than I to conduct such an inquiry.

It got blown a little bit out of proportion, but I don't mind the nice headlines: — "NDP Urges Inquiry, Ten-Year Pause in Hydro Projects." If you read the monograph, that isn't exactly what I said. In fact, I said: "I would not argue that my analysis alone justifies a quick cessation of all B.C. Hydro thermal and electric projects, but the evidence presented certainly justifies an immediate calling of a public inquiry into their electrical utility operations." The chairman of the board, Mr. Bonner, slammed the moratorium. "It would take you from brown-out to black-out," Bonner said. Then he said that he would not admit that Hydro was building unnecessary or premature projects, but said that for 15 to 20 years we re going to have to do certain things, so we might as well do them ahead of time, thus providing needed employment and allowing the sale of surplus power on a short-term basis to the United States to earn income to help repay U.S. borrowings.

What has happened? The minister knows that even if we manage to sell all of the output of the Revelstoke dam, which we can now say is surplus.... We've even had statements come out of B.C. Hydro that there's enough extra power for a ten-year moratorium — they used the term, not I, three months ago. If you were to sell all of that power into the California market under the terms and conditions being proposed, it wouldn't pay the interest charges.

It also concerns me that we have record unemployment now and we should now be building the Revelstoke project, not back in 1977-79, in which time we were in a very major boom and other things were happening. If we were building it today, we might even see a 10 percent or 20 percent saving in constant dollar terms — probably 10 percent. We would have more competitive bidding and a more competitive situation even in the labour force, and we would experience the kind of thing being experienced in other sectors of the construction industry right now.

I would suggest to the minister that B.C. Hydro needs a new direction. It needs a new chairman; it needs a person who would take the conserver attitude into account. I could even, I think, name a name, but I wouldn't embarrass that particular person by placing them into what might be construed as a political controversy. But I could think of the name of an excellent person well within the knowledge of the minister. B.C. Hydro certainly needs a new direction. It needs new leadership from the top. It needs someone who understands the difference between geometric and arithmetic

[ Page 3746 ]

growth. When I see how much better our economy could be today if we had delayed that decision, if that construction project were going ahead today and if there had been more time to properly harvest some of the forest fibre behind there, and when we look, too, at the jobs that we lose.... When we flood valleys, we are losing employment opportunities in the forest industry. So I would ask the minister if he would agree that Hydro needs some change in direction and something more oriented toward looking at energy alternatives, or simply looking at scheduling in a more imaginative way and challenging what I think is a rather discredited system of projecting hydro energy needs.

I would also ask the minister what his reaction would be toward having an immediate task force to look at the alternative to exporting this power. Obviously we don't want to spill it over the dam. I suppose if you could sell it for a quarter of the interest costs, it's better than spilling it over the dam, if it is truly on a very fixed-term contract and we do not put ourselves in this position again. But I would like to have the minister's reaction to an immediate task force to look at ways of utilizing that surplus energy here in British Columbia.

I talk about such things as getting ahead with an Alcan smelter, and not waiting for whether or not they go ahead with Kemano 2 at this particular time, but prebuilding a smelter. I would ask about railway electrification throughout British Columbia. In fact, is it too late to change some of the design specifications of the new CPR tunnel? It would be different; there would be less need for ventilation if they were to electrify. This has been proposed before. I think that there could be tremendous ramifications in terms of national energy objectives, of replacing non-renewable petroleum resources with electrical energy, and creating employment in British Columbia right now by getting our idled construction industry back into gear and building when I think costs could be very advantageous.

So I would ask the minister's response to those two things: the idea of a task force for alternative uses, other than exporting to the United States, where I'm afraid we are simply going to stimulate employment and jobs down there, and the proposal for British Columbians to build a transmission line through the States, which I find just mind-boggling when we are in the state we're in today.

HON. MR. ROGERS: A lot of things have happened since 1978, Mr. Member. At that time the Energy Commission did the forecasting on behalf of the government; now it is done in-house by our ministry.

[11:30]

MR. NICOLSON: They were lower than B.C. Hydro.

HON. MR. ROGERS: Yes, we were lower — we sure were. The ministry forecast, I guess, was part of the reason that when the Site C hearings were undertaken it became fairly evident that perhaps the urgency for Site C wasn't as obvious as was being made out. In fact, at the start of the Site C hearing there were people who said, if you remember, in the Peace River country: "Stop the hearings; building the dam." Now, while they'd like the employment in the area, they appreciate that there isn't the demand for it.

I think there are two compounded problems. One is that no one predicted the depth of the recession. Secondly, no one predicted the effectiveness of conservation in everything from more efficient household appliances to just people turning off lights. It's been staggering, partly price-related but partly conservation-mood-related. On Vancouver Island, on occasion, before the Checkye-Dunsmuir line was completed, Hydro asked people to conserve power during certain times of the day. The public response was much greater than they had anticipated because of the public's awareness of conservation and what the problems were.

[Mr. Strachan in the chair.]

I think that with the scrutiny we put Hydro through at the Utilities Commission and their own internal awareness of what the problem is now.... I sit on the board along with my colleagues the Minister of Finance (Hon. Mr. Curtis) and the Minister of Universities and Science, (Hon. Mr. McGeer), and we closely question them on their forecasts.

They are spending more staff time and putting more work into trying to be more accurate in their forecasts. It is a problem that didn't just happen to B.C. Hydro. If it had just been B.C. Hydro that had made this mistake, then I think we'd have to look for a bogeyman here, but we don't. In Washington state they had the same problem in spades, except that they chose to build the wrong kind of power station and therefore got a more complicated problem. Even with everything they've got, they don't have a surplus with all their shut-down nuclear power plants. In California, which is our market for surplus power, they were shut down by all sorts of protest groups that didn't want the Diablo Canyon or any of the others and a lot of engineering problems that turned out to be nightmares.

I think we are on the right track now. I think Hydro is going to go through a pause in its construction. The length of time that the pause is there will depend very much on when the load-growth starts to come back. We are not going to build for export. However, predicting when unemployment is the worst.... I can tell you, in 1978 there were unemployed people. It's hard to tell. You're right about construction costs. Lord knows construction costs now are probably lower, and you're getting a better quality of workforce. You are getting fewer green people, everyone's working a little harder on the job site — we don't want to say why they are working a little harder — and things are coming in under cost. So now is the time to go ahead and do those things, but you don't want to do it unless you have a reason — which brings me to Alcan. I think there is a possibility of us selling surplus power to Alcan in the short term, but I don't think Alcan would be prepared — in fact, I know they're not — to make the commitment to build the smelter to use the electricity unless they know for sure that they have the permission, or that they have everything cleared away, to complete the Kemano completion. They're not going to risk being subservient to Hydro for the next 50 years of the life of the plant and find out later, after they've spent the hundreds of millions they would have to to build their plants, that they wouldn't do it. What is probably more likely is that when Alcan goes through the Utilities Commission process and gets their approval, they could then say: "Fine, we will do a power swap with Hydro." While we have surplus power, they would buy it from B.C. Hydro and then later commit to make up that power from their own particular project, which might give us better flexibility, because the price differential would not make the Alcan project attractive.

I agree with you on electrification. I won't divulge any secrets, but I'm the one who insisted on electrification of the

[ Page 3747 ]

Tumbler Ridge line. I'm a great electric railway fan for a whole bunch of other unrelated reasons. Whether or not the CPR or CNR see the wisdom of electrifying their lines, the first one that they should electrify is probably the line from Cranbrook to Golden. That's the steepest grade they have, and they've looked at it and decided not to do so. But the first North American line that's going to be anywhere is the Anzac–Tumbler Ridge line, which will be a big success. There are a lot of reasons for electrifying the lines. There are health reasons for the crew on the tail-end of the train in the tunnels, the reliability factor, putting energy back into the system and much less of a break-down problem.

There are a whole bunch of advantages, but remember General Motors has been building diesel locomotives since 1945 in a big way, and railway people don't tend to be all that flexible. You can have a nice argument with Ian Sinclair — well, he's not there anymore. I'm not so sure that that mental flexibility is there. I would like to see it there. I think that's something we could do.

My colleague the Minister of Universities, Science and Communications would tell you that he thinks we should have a nationwide grid running across the railway system so that as the clock moves westward we could move electricity that way. Perhaps that's something we should look at, because our grid tends to be north-south between the producing and consuming areas of the province. It requires a commitment by the railroads, and I think the BCR demonstration may lead to a much more successful look at that by the utilities. They had to go to Britain to get the technology; there aren't any in North America. You know how forward-thinking and progressive the railways are when it comes to changing something. Most of them would still rather be shovelling coal into a steam locomotive if they had their choice in terms of the romance of the railways. I believe that answers the member's question.

MR. NICOLSON: Could I just ask the minister one other thing. Since he's taken such a personal interest in the BCR use of electrification, and of course it has meant that they haven't had to put up quite as much money in ventilation, has the problem of the ozone been discussed in that matter?

HON. MR. ROGERS: Not that I can tell you specifically. The biggest problem we were interested in was ventilation in the tunnels. There's natural ventilation at this time of the year because of the temperature differential. In cold weather the wind just whistles through the tunnel, and they have an icing problem. But that won't be the problem in the summertime when it gets quite warm in that part of the world. I'm not really so interested in just the tunnel aspect of it. I'm interested in it from electrification of the mainline of the railway, because of the reliability and a whole bunch of other factors that come into play. I could look into that specific question for you.

MR. PASSARELL: Mr. Chairman, I have a number of questions for the minister. I know we just finished his last year's estimates not too long ago, and I wonder if it is proper to use the same speech as I did for last year's estimates?

The first question I'd like to discuss is placer and the amount of staking that went on in the last year, particularly in the fall, and in this year already. An idea that I stated to the minister in his last estimates was the need for a gold rush in this province — some kind of encouragement. I know you can't really go out and start giving away free placer claims to individuals, but there is a need — particularly in the north, where we're finding our major mines have closed down — for small placer operations for gold. I share some of the minister's concerns and hopes with the price of gold, and I hope that it continues to rise. We have two excellent gold mines in the far north, the Erickson Gold Mining Corp. and Scottie Gold Mines Ltd,, which are performing well. But once again, as with all minerals, it's tied into the world price, and one of the things that engineers have told me is the need of keeping gold over $400 for a profit, and hopefully the price will stay at that.

The second concern I have is the mines in the north. I know that when you have something like GrandDuc close down, it is very difficult for the government to step in and say they're going to continue the mine in operation even though the company, Esso, can't make a profit on it. A concern that I have is that when the main source of employment falters in these mining towns, the workers are trapped, in a sense. For instance, if Granduc closes down in Stewart, and you have a mortgage on your home and your children are in school, what happens when the only source of income in the area, per se...? You could still try Scottie Gold, but Scottie Gold is much smaller than Granduc. What can you do for individuals trapped in a company town? Let's take a hypothetical case — and I don't think it will be that hypothetical — of something like Cassiar. I think the minister and I share the same kinds of concerns when we see what the federal government does with asbestos in the east and what someone like Brinco has to do without any subsidies from the federal government. What happens to a company town — we're finding fewer and fewer company towns in this province — if Cassiar falters, runs out of asbestos and finds it unprofitable to go underground for the ore body, as it will have to do in the next ten years? What happens when a town like Cassiar closes? That's just an idea. Maybe the minister has some suggestions. I think we agree on subsidies in the asbestos field, as the federal government provides in the east. It's difficult for Brinco to be in competition.

The third is the use of garbage as a source of power, which we discussed in the earlier estimates. Particularly on the mainland we're finding more and more problems in the storing of garbage. Some other countries — particularly Scandinavian and some eastern European countries — are using garbage as a source of power. In this country we find some area to dump it, and when that gets full we just get a Cat in there and cover it up. Perhaps we could encourage private industry to use garbage as a source of power in this province.

The fourth issue is hydro development. After last year's estimates I've been able to squash that rumour about the Stephen Rogers Dam on the Stikine. I've told them that won't be the name of it, because it'll be so far down the road. That's something the minister and I have discussed, Mr. Chairman; there's no problem on that.

The need for small hydro development in this province is something I think we have to take a further look at, instead of building big, particularly when you look at the debt that B.C. Hydro has. The use of small streams for power generation.... I'll use the example of the community that I live in, Atlin, where B.C. Hydro has a diesel plant. It's very expensive to bring diesel into the small community of Atlin by trucking it in from Whitehorse, but we have a major stream, Pine Creek, that could be used for hydro development. I don't know the degrees of the fall on Pine Creek, but

[ Page 3748 ]

engineers who have been in the area have said it would be a perfect stream for small hydro development. The community of Atlin could keep the diesel plant out and generate its own power for the entire community from a small megawatt dam on Pine Creek.

The fifth issue I'd like to address to the minister is the moratorium on uranium, which will soon be expiring. Will the government extend the moratorium on uranium in this province? I think that's something we have to address. Uranium mining and development in this province was a major issue four years ago. If the minister is still the minister in charge, will the uranium moratorium continue?

Those are five questions for the minister.

HON. MR. ROGERS: You'd like a gold rush, but you really don't want the fools and the dreamers flooding into downtown Atlin wanting to know where the Four Seasons Hotel is. I think you'd like to see a little more enthusiasm among the professionals: the few people that have that strange ability it takes to be a gold bug, where you work a 14-hour day — longer in the summertime — and seem to live with mosquitoes and not let it bother you. You do it all for the fact that you know you're actually working on the mother lode but just haven't found it yet. That's what you need; you don't really need a bunch of people from the city with soft hands and soft shoes who want to go up and make the easy money in Atlin. They learned the hard way in the Yukon. It's a great historic site now, but there was a lot of pain and suffering and I don't think your community really wants that kind of thing. What we would like to see, though, is a little more enthusiasm or a little more investment capital, because it's capital that's required to take the risk — and it is a risk.

[11:45]

You mentioned Granduc. As you may know, I've taken the staking reserve off the Granduc, the reserve that had been placed right at the base of the mountain. As you also probably know, somebody with a Cat who was pushing a little rock around one day exposed a vein of gold, and we may in fact have another gold-mine not very far from Scottie gold-mine. That has been staked, and offers some hope for that particular area.

The Cabinet Committee on Economic Development did quite an extensive study of the northwest to try to find out what we could do to encourage the place. Of course, the Mt. Klappan anthracite project is probably the most exciting potential there now. There is some potential, of course, for private power development on More Creek, depending very much on what the demand is. But I'm going to warn you that Hydro is going to continue to complete the stream surveys they've done on the Stikine — you asked me about that earlier. I've checked with Hydro, and they want to have that detailed information, so that when they reopen the file, all of the work they've done so far isn't for naught because they haven't got the complete information.

Using landfill or garbage for power, I guess, really transcends into my former ministry, and I'll speak from expertise that I have from that ministry. Most of the places in the world that have built incinerators to burn garbage and collect power have them shut down right now. The cost is too high; it's about $40 a tonne to incinerate garbage and it's about $8 to $9 a tonne to landfill it. When the garbage from Buckingham Palace is landfilled — which we found out in England when we went to see some of their operations.... What you really discover is that unless there is an absolutely critical period when they can't find any place to landfill...only then do they incinerate, and almost never do they try to recover the power from it, because of the inconsistency of the feedstock. There just is too much variation in the temperature of the steam.

Small hydro power. There are several of us who are enthusiasts about it. But one of the things we run into on the engineering side of it is that the highest demand for small hydro comes generally at the time of lowest stream flow. In the case of Atlin, I don't mind having a look at that one. I think the difficulty is that much of the year you could probably have a small hydro project running when you have a decent flow, but at the height of winter when the flow is lowest is also when the demand is greatest.

Your last question: the uranium moratorium is a policy decision that will be addressed by government at the time that moratorium expires. I have no particular thoughts on it one way or the other, except to suggest that perhaps the world market for the product is so soft that I doubt very much there would be much exploration even if the moratorium was lifted.

MR. PASSARELL: Regarding the Four Seasons Motel in Atlin, I think it's more of a one-season motel at this stage of the game.

Looking at the hardships when it comes to placer development, there was an interesting article in yesterday's paper about prospectors being a dying breed — I don't know if the minister was able to see that article. It went on about prospectors being almost a dying breed of entrepreneur in this country; fewer and fewer are able to go out and do it. I agree with you to a certain extent about bringing the "city folks" up to Atlin, trying to get their hands a little dirty and picking up nuggets that are just floating down the stream.

Something I forgot to bring out earlier was the northwest development. I think that's an encouragement to people up in the far north regarding the three sites we are looking at. The budget speech and particularly the throne speech with regard to northwest development talked about the infrastructure the government will have to proceed within the three areas. If we look at a recent article in the Times-Colonist by that illustrious columnist Jim Hume, who wrote about the three areas.... They are very isolated areas. It would be difficult to make it a profitable operation, being that far back into the bush with no access to Highway 37 or even access to the oceans. While the minerals are there, it's going to be difficult for private industry to put in their own infrastructure to bring it to market. There will have to be encouragement — public enterprise — by the government to bring these resources to the marketplaces in the south. I'd like to know whether the minister has any positive direction on whether the government is going to be using any public enterprise this summer or next year or in the foreseeable future for infrastructure in those three areas that were pointed out in the northwest development report.

In regard to Pine Creek, I agree with the minister that the flow levels in winter are down. It comes out of Surprise Lake. But my suggestion is that we use the diesel plant there — the structure is there — and use the underground turbines that the Swedish have come up with. Use a project like that for summer, fall and spring during the run-off, and then you could switch back to diesel in winter. Maybe it would save the government, and particularly Hydro, some money by having a two-phase project with the turbines on Pine Creek, and then in winter when the flow regulations are down, turn it over to

[ Page 3749 ]

diesel. Those are the further questions that I had for the minister.

HON. MR. ROGERS: No particular plans to spend money on the Mt. Klappan project until we get a little further development by the companies that own the claims, and what they're prepared to put into it. Very long range is the Windy Craggy copper cobalt project, which is in your riding but I think almost totally surrounded by Alaska. It's probably the most remote spot in the province and would probably come out through Alaska in the very long term.

One of the problems with running a joint small hydro and diesel is that you end up getting two disciplines and staff. You've got to have a whole bunch of dam people come in and construct a dam and run the maintenance on that, and then at a certain time of the year when your flow drops off, switch over. The question is what's the most cost-effective method of doing it, and to date it's to run small diesel. With the price of diesel fuel escalating, as it is doing, these things become more attractive.

MR. LOCKSTEAD: Mr. Chairman, I know we have people who wish to question the minister, but I do have two or three more questions dealing with the mining portion of the minister's responsibilities and a few questions on the petroleum side.

I want to ask the minister about the cuts under vote 21, the resource management program. This falls almost exclusively on the energy resources division, whose budget this year falls from $6.5 million to $2.3 million. The major victim is the conservation and renewable branch, which has been eliminated. The branch was responsible for grants to industry for energy saving, the administration of CREDA grants to industry and business, the energy bus program and energy audits of business and the energy conservation demonstration houses. With the elimination of the branch, there is no consumer focus left in the ministry. I would assume that some programs will be kept going by the federal government acting alone in this regard.

I must question the minister on the impact of the cut on other energy resource activities such as project reviews. energy forecasts and strategic studies. Is the B.C. energy supply and requirement forecast, which is a useful reference and counterpart to B.C. Hydro studies, to be continued? Elimination of the conservation and renewable branch explains about $2.5 million of the $4.2 million cut, but the ministry people are not letting us know how the rest is being saved. Perhaps the minister could answer that question for us.

Mr. Chairman, I don't want to dwell on this — I think other speakers may mention it — but I do want to get it on record, in terms of B.C. Hydro, that I am very dismayed that the Crown corporations reporting committee has been emasculated and is not functioning — no budget allowed for that committee. That committee afforded all members of this House and the public of British Columbia the opportunity to look into the various activities of Crown corporations and, in terms of this portfolio, of B.C. Hydro. Now we really have no effective watch-dog agency able to look independently at the activities of that large Crown corporation, which many of us feel is literally out of control.

Interjection.

MR. LOCKSTEAD: I'm just saying this for the record and in passing. It makes it difficult for many of us. I'm going to be discussing the termination of the committee itself under another estimate, but what I'm saying is that it makes it much more difficult, when we're attempting to do estimates in this House, now that the valuable information relating to B.C. Hydro is not available to members of this House.

In terms of the petroleum side of his responsibilities, I want to ask the minister.... I know the minister mentioned this question in passing yesterday in terms of the proposed natural gasline to Vancouver Island. It seems to me that we discuss the proposed natural gas line to Vancouver Island five, six or ten times a year in this House, but it is of vital importance to people on Vancouver Island. Certainly it is of great interest to my constituents in Powell River; in fact, there is a delegation here this morning. I met with them briefly, and I believe the minister met with them as well. However. I don't think that particular delegation is of my political persuasion. I've got that feeling, since once of the people in the delegation ran against me as the Social Credit candidate in the last election. However, that's beside the point. No. we're good friends, and I frequent Mr. Price's business establishment. They have very good meals in his resort restaurant.

I ask the minister: are the Utilities Commission hearings into the proposed natural gas line on time? When will that report be in? When does the minister expect or hope that that report from the Utilities Commission will be in, which will be presented to cabinet and presumably considered by cabinet? We know very well that sometimes these reports get to cabinet and sit there a long time. I hope that doesn't happen in this case, because a number of major petroleum companies in British Columbia — including B.C. Hydro — have spent a great deal of money preparing briefs, doing on-site work and all these kinds of things. A decision in that regard should be made as soon as possible. But more than that — and I know the minister is very much aware of this — the fact is that the federal government will not make any commitment to a subsidy for that proposed pipeline until the report of the Utilities Commission is in and cabinet has made some kind of decision on the recommendations — one way or the other. Until that has been done in British Columbia, the federal government — it may be a different federal government by the time the report is in and a report comes in from cabinet, but I can assure you.... Well, we don't know that. It depends on the timing of the federal election. Whether it's a Conservative or Liberal government federally.... Hopefully it will be an NDP government, but I think it is going to be a pretty tough uphill fight.

AN HON. MEMBER: It's 13 and dropping.

[12:00]

MR. LOCKSTEAD: Oh, that's great. I thought that it was 11. I think we should gain a few more federal seats in British Columbia and across Canada, but it's going to be a tough fight.

Back to reality, Mr. Chairman. Where was I? We were talking about the federal government. It's understandable that no federal minister of energy will make a commitment one way or the other in terms of a subsidy for a proposed natural gas line to Vancouver Island until the provincial government has made a decision. I don't think I'm saying anything that the minister doesn't already know anyway

[ Page 3750 ]

I have another question for the minister while I have the floor. I don't want to be too much longer. My question deals with the elimination of the offshore administration branch; we note the last employee was laid off March 15, 1984. Joint federal-provincial hearings on the issue of lifting the moratorium will be held under the auspices of the Ministry of Environment. In my view, the branch certainly had a role to play in securing the provincial interest in ownership and control of offshore resources if the development is contemplated. In response to that statement — or question, if there's a question in there somewhere — I suppose I'm going to hear about the recent supreme court decision concerning the offshore ruling relating to the Hibernia oilfield off Newfoundland. I understand Premier Peckford is having conniption fits at this point in time over that ruling. I presume the ruling would apply to British Columbia as well as being a landmark decision that applies on the east coast of Canada. It is a supreme court decision which may or may not be appealed. I don't know if it is appealable, quite frankly, but the same circumstances would apply in British Columbia. I suspect offshore drilling and exploration will proceed at some point in British Columbia, as I think the oil companies have very powerful lobbies. One day they will decide they want to continue offshore gas exploration on the coast of British Columbia and, as usual, they will get their way. In any event, the minister may wish to present his views on that matter.

Last but not least, the budget of the Utilities Commission has been progressively cut from $2.54 million in 1982-83 to $1.54 million this year. I guess $700,000 has been made up by awarding costs against applicants. Part of the saving will be realized by a streamlined review process, as for Kemano 2. However, the cutback in a commission of this nature distresses me. The commission, which allows people from all walks of life, whatever their concerns, whether they be industrial, economic, environmental.... The work of that commission could be seriously hindered by cutbacks in its budget. In the long term, I don't see that there would be any real saving to the population of British Columbia. I know the minister is not going to do anything to restore funding just because I got up here and said that, but I just want to express my personal concerns in that regard. I think I'll leave it at that for the time being, Mr. Chairman. Perhaps the minister may have a remark or two.

HON. MR. ROGERS: In the budget review this year, of course, every ministry had to go through the process of choosing those things we like to have and those things we need to have. When our turn came to reduce, one of the areas we decided to reduce was in the area of our resource management programs.

The $2.5 million figure you alluded to was part of the transfer of the federal government's contribution to the B.C. Rail electrification for the Anzac–Tumbler Ridge line, and as a result of that, of course, that figure is no longer there.

One of the things we observe is that the private sector is very much involved in the energy conservation business, both at the private level and the commercial-industrial level. Therefore we didn't particularly want to abandon this program, but if you're in the position that you have to do that, at least that's one of the things that can be done.

The annual energy forecast will be done by the ministry and will be out later on this year. The B.C. Utilities Commission, of course, will continue to examine all the various rates.

You talked about the Vancouver Island natural gas pipeline and its report to cabinet. I can assure you, Mr. Member, that the minute cabinet gets this document, they will examine it very quickly. I can't think of a better time than this particular time in our federal history to have a reconfirmation of that commitment. In that regard, the chairman of the Utilities Commission and I have talked at length, and I believe that a recommendation, at least to the on-Island portion, may be coming forward in a short period of time. I would hope that the moneys that are required and the recommendation from that commission are here before the federal election. I think, perhaps, it would be a nice idea if it were here before the Liberals decide who the next leader is going to be. It would certainly be nice to see a bunch of enthusiastic federal cabinet ministers come out here all confirming the commitment which their previous illustrious leader made. It'll still require quite a substantial federal government subsidy; there's no question about that. Robin Abercrombie admitted that in his report.

You can't look at this project strictly from a hard dollars point of view, because of the net benefits to Canada of getting off oil and having our national energy program incorporated including Vancouver Island as part of the national energy program. Remember, Nova Scotia and New Brunswick were offered natural gas pipelines as part of the Canadian system, and the Premier of Nova Scotia said: "No, thank you." He wanted to reverse the gas from Sable Island. We have not said "No, thank you," and Vancouver Island is the last major market in this country that should be serviced. If the national energy program means anything, it means that British Columbia be treated the same way as the trans-Quebec and Maritime and other pipelines have been done. I hope they remember that in Ottawa, whoever is government.

You asked about the offshore case. The Strait of Georgia case is currently before the Supreme Court. The Hibernia case, which came down yesterday, I think, is quite different. I had the opportunity, with my colleague the Minister of Labour (Hon. Mr. McClelland), to visit the Ocean Ranger before her fatal sinking, and therefore we went off the Grand Bank to where the Hibernia is, and that is a considerable distance offshore. It's not quite the same thing. I would hope that the two cases are viewed differently.

You mentioned the cut in the budget for the Utilities Commission. Yes, their budget has been cut, but their cost recoveries have also increased. People who, for example, want licences to broadcast television.... I don't think that's the taxpayers' problem to pay for that. Cost recovery should be there.

MRS. WALLACE: I will be dealing specifically with B.C. Hydro. I have a variety of items I want to raise, some of which are connected and some of which are not; some of them have been touched on but are items on which I want to go into a little more depth.

One of those items that has been discussed to some degree is the proposed export of power. A January issue of the Province had an article which indicated that B.C. Hydro had signed a contract with the Los Angeles Department of Water and Power for firm export of power. It would appear that this is a binding contract and yet I'm sure it must be subject to the approval of the National Energy Board. The way the article is written and the comments we have been hearing indicate to me that both the B.C. Hydro people — Robert Bonner — and the government consider this as just one unnecessary step and

[ Page 3751 ]

will really not change things, that this is a fait accompli. This power sale is going ahead and the National Energy Board will not come down with a decision to the contrary.

That concerns me, because I think the purpose of those boards is to deal with all aspects and to hear all interveners, and to make a decision on a very unbiased general approach. It's not something where a contract is already signed and Hydro is already saying: "We're going to get a $200 million return from this and $15 million will go into the government's coffers as water licence money. If we hadn't done this, consumers would have had a four cent per kilowatt hour increase." It's all decided that this is what we're going to do before those hearings even begin, which is the end of this month.

I want it to be understood very clearly that neither I nor my colleagues have any objection to the sale of surplus power on a short-term or interruptible basis. That's not the issue here. The issue is that while Hydro has — I assume — agreed to a three-year contract, their application is for six years. We know that Hydro has overbuilt for four years. It's been pretty well established that Hydro's estimates have been too high and that they've overbuilt for a period of four years. But here we have an application that really isn't for three years; it's for six years. The chairman of Hydro has been quoted in the press as saying that he would like to pursue this option. He's saying it would be "damn good business" for B.C. to pay part of the cost of a new transmission line from the border to southern California in order to gain assured access to markets there. That worries me. He also says 15- or 20-year commitments for contracts for firm power sales.

I'm even more concerned when I get hold of a letter which indicates that this minister has indicated that government policy has actually changed and that he intends to consider building electrical generating projects to serve the export market, I understood the minister to say earlier during his estimates that he did not believe in building for export. But it's my information that he has indicated to certain groups around this province that there is a change in government policy and he does intend to build for export. I have some very grave concerns about that.

[12:15]

I wonder just how closely the minister has really considered telling Alcan, for example, that hydro power will be available from B.C. Hydro. I'm not about to prejudge what will happen to the fishery industry if Alcan is allowed to go ahead with its projects as proposed for Kemano 2 regarding those two rivers up there, but I know that a lot of questions were being raised by federal fisheries, local residents and others. Why risk it when we have all this excess power? Why don't we simply say to Alcan: "This is cheaper power than you can buy anywhere else, even if it costs you a little bit more than it would to dam those fishery rivers. You will be competitive; you can be competitive, and if you're not interested, we'll get somebody who is." Sure, we want the industry up there. We want the smelter; we want a lot more things up there. But I think this minister has it in his power to ensure that we have the best of both worlds in this instance. I'm not really convinced that he is doing all he could do to ensure that that happens. He's talked about his commitment to electrical railway systems, and certainly what's happened in the Anzac tunnel is great. If it was his idea, I congratulate him for insisting that that happen. He says that maybe we can't convince CPR and maybe we can't convince CNR. What about BCR? The Minister of Energy is just as responsible for job creation in this province as is the Minister of Labour or the Minister of Industry and Small Business Development, and he has a great opportunity here to create some jobs in British Columbia.

If he were to electrify the B.C. Rail, and if he could persuade CPR and CNR to do so — and electrifying those lines could be done on an economic basis — think of the jobs that would result in the construction of transmission lines. Do you know where the towers are built for those transmission lines, Mr. Minister? They are built in British Columbia. That's right. That's jobs for British Columbians. You mention General Motors — the electric motors are built in Canada. He knows these things. But is he doing anything to ensure we are getting those kinds of jobs here in British Columbia? We would then have a railway that could operate more cheaply on a renewable resource that is our own, and we would provide all kinds of construction jobs in the meantime. Now I don't see that minister taking any initiative in those directions, and certainly that's of concern to me.

The minister has indicated that it is a buyers' market for the sale of this power. Yes, it's a buyers' market, but the closest competitor that I can find was an offer — I believe it was from Bonneville — for 5.6 cents a kilowatt hour. I don't think we negotiated a good deal in the first place; in effect, the return from that power is not even going to begin to pay the costs of the interest on the construction of the Revelstoke Dam.

If, in fact, we were to export all the power that dam could produce — 7,200,000 kilowatt hours at 2.4 cents a kilowatt hour Canadian — the shortfall of revenue to cover only the interest charges would be $90.8 million a year. Sure, we are getting some minor returns, but I think if it does one thing more than anything else, it points out just how great is the cost of this overbill in which Hydro has involved itself. The old energy commission tried to tell them. A lot of people on this side of the House tried to tell the government benches. The minister said nobody knew; there were a lot of people who knew that Hydro's exports were too high. I don't really blame Hydro. It had its terms of reference; they were very simple — to provide an ample supply of electricity. Hydro takes its direction from government. I blame the ministers who sit on those cabinet benches for not giving Hydro a slightly different term of reference and for allowing them to continue to escalate their forecast figures and, as a result, to escalate and self-perpetuate and expand their own operation. Because that's what it was: it was a self-fulfilling promise. Now we have an overbill that will last us for four years. We had, just a couple of days ago, a layoff of some 17 long-term, high-paid officials in the construction section. Sure, that's tough, but it is a direct result of not planning properly in the beginning.

I've been talking about jobs in British Columbia. The other side of the coin to the sorts of things I've been talking about is the export of power at such a cheap rate — because it is, in no uncertain terms, the export of jobs, If California can get power at a rate lower than that for our own customers in B.C., which is what's happening, then that provides unfair competition as far as any industrial development here in British Columbia.

HON. MR. ROGERS: But they can't. We're selling it to B.C. industry cheaper than we're exporting it to California.

[ Page 3752 ]

MRS. WALLACE: Not according to my figures. If I'm wrong on that, I'd like the minister to correct me.

I've always been interested in alternative power, and that's been touched on briefly; but I am concerned about.... I'm moving on to a different subject. Do you want to answer that particular part right now?

HON. MR. ROGERS: The member asked about Hydro's export of power. You're quite right, they haven't got the permits from either the federal government or the provincial government. However, the particular export of power to Los Angeles Water and Power falls within the guidelines set down by the National Energy Board. They still have to go through the hearings; they're aware of that and the customers are aware of that. They also have to get a provincial energy removal certificate and they're aware of that as well.

[Mr. Pelton in the chair.]

So nobody in California is labouring under the delusion that this thing is done and dusted; it is not. They have to go through that process. However, the National Energy Board guidelines are fairly clear. They will go through the process, there will be people there objecting and people asking questions, and I'm sure they will go through it. If that sale is not successful, then we're stuck with a surplus of power for which there aren't other markets. B.C. Hydro put out an incentive rate, lower than the rate we're exporting it for, for new industry or anybody who would bring on a new electrical load. Only one customer in the province — in Campbell River — took advantage of that particular situation. I think it's a good idea to go out and do that. I think it's a good idea for Hydro to call on some of its customers, which is something they don't do very often, to find out what they can do about increasing the electrical loads.

I don't agree with you about the export of jobs. I don't really think the short-term export of power to California is necessarily going to mean loss of industrial jobs to British Columbia, because we don't have it here. Alcan will not build a smelter unless they are assured of a long-term supply of electrical energy. That's what they tell me. I can go to them and say, "You're going to buy power from B.C. Hydro," and they'll say to me: "Fine; we're not going to build a smelter." It's as simple as that. They have lots of other opportunities. We are in a competitive world. The province of Quebec is making it extremely attractive for Alcan to build their next smelter in Quebec where they have lots of surplus electricity. We have to be competitive here, and we have to look at the market that way. I think there is flexibility for B.C. Hydro and Alcan to come up with a power swap.

You mentioned the electrification of the railway. We have a demonstration now of the first one actually in operation, which is the BCR one. Remember that in that particular case the incentive for them to electrify that railway was the tunnel ventilation problem; the BCR doesn't have other tunnels of any significant length, although there are a few short ones. The CPR and CNR would electrify the railways the minute they thought it was economical to do so. That's the only encouragement they have. I talk with the people at the CPR and they tell me that they don't choose to do it because it's not economical; if we choose to subsidize them they'll look at it. I don't think we want to do that. I think we want them to choose to do that.

You asked if the ministers give Hydro any direction. As a matter of fact, twice in the last three years, as a result of input from this ministry, Hydro has reduced their forecast. But they are scheduled to have a surplus till 1990, and for that reason we're trying to do the best we can to maximize the provincial benefit from that surplus. As I stated earlier when you weren't in the House, it is not my intention, nor is it the intention of the government, to build for export. Like any other policy, government can examine it. It is not examining it now, to my knowledge, and I don't think they will examine it.

Quite frankly, I don't think there's a market for it. I think we've captured what market there is for surplus power, so to that extent I don't think there's great viability in it. Instruction will continue to come from the cabinet to Hydro on their policy directions. This particular change for export of power was started by my predecessor, now the Attorney-General (Hon. Mr. Smith), when he had the portfolio. They were aware of the surplus that was starting then and has carried on during the time I've been responsible for Hydro. I think, though, that the whole export-of-power business will be gone within a four- or five-year period, on two very simple things. One will be a recovery in the economy whereby the demand will rise, and the second will be just a straight, regular growth in electrical demand as fossil fuels such as oil, in areas where electricity and oil compete, become more expensive.

MRS. WALLACE: I was in the House and I did mention perhaps you were out at that point, Mr. Minister — that I had understood you to say that it was not your policy to build for export. I am somewhat concerned because people are telling me that they have had information from you to the effect that it is the government policy to build for export. I'm also concerned about Bonner's remarks about the transmission line and preparing for 15- to 20-year exports. I'm also concerned about the six years. I think we get into these things and it's very hard to get out of them. Of course, I am not familiar with the actual terms of the contract that has been signed, but I would hope that it's very firm, that as far as the three years go, that's it, and there's no commitment to carry on past that. The six-year thing does bother me, because it seems that we have started with three, are up to six, and by the time we're through with this thing it may be the 16 or 20 years that Robert Bonner is talking about.

You have allayed my fears slightly, Mr. Minister, but certainly not entirely. I still have a great many concerns that by committing ourselves to firm power sales for a period even as long as six years, we may well find ourselves started down a road from which there is no return. We will become the builders of dams and the storers of water for the producers of jobs in the southern States, rather than in British Columbia. I think that is a valid argument and one that certainly appears to a lot of economists to hold water.

MR. LAUK: We trust you; it's just your successors we're worried about.

MRS. WALLACE: Well, I'm not even sure I go that far, Mr. Member.

I had started to mention alternate energy, and as you know — we talked about this when you were in a different portfolio — I certainly do believe that Hydro could be putting a greater share of its emphasis on alternate energy, and in a little different way.

[ Page 3753 ]

[12:30]

I was rather concerned about the tidal experiment that you were trying in the Queen Charlottes. There was a press release that went out back in October 1983 relative to this tidal power feasibility study in the Queen Charlottes. Now that's a pretty expensive type of study. It is highly engineered, debt-intensive, the same way as a lot of hydro installations are debt-intensive. It is not particularly environmentally oriented. Now tidal power in some instances, I think, would and could be a valuable asset. But I'm wondering, basically, what the status of this Queen Charlottes experiment is at the present time, what the cost has been and what the results are, What have you come up with? Have you found out anything about that? What has it cost you? Where is it at, at this point?

HON. MR. ROGERS: Well, you've got me there, Madam Member. It has never been discussed with me. I know Hydro has been looking at some wind farms, and we have had some private proposals on that. We have had private energy proposals from people in the United States who are involved in those processes. I'm not aware that Hydro is doing this particular work. I will investigate it for the member.

MRS. WALLACE: Thank you very much, Mr. Minister. I'll send you a copy of this. It's my only copy, but I'll send it across to you. It's from B.C. Hydro public affairs. Perhaps at some later date you can give me a response.

While we're talking about alternative power, you did discuss garbage incineration briefly with the member for Atlin. Some little time ago, a year ago maybe, your ministry.... I'm not sure whether that was when you were minister; I think it was probably under the previous Minister of Energy. There was a report about some preliminary work that had been done jointly between your ministry and local government in Victoria relative to utilizing waste for energy production. The study indicated that in ten years the capital investment in that particular operation would have been totally recouped and any energy that had been generated from that source subsequent to the ten years would have been pure gravy. The result of that was that the government ordered further study. That again was about last summer, I would say, and I'm wondering what the status of that study is.

HON. MR. ROGERS: I think that question would better be addressed under the estimates of my colleague the Minister of Environment, because they are the lead agency in dealing with this particular matter. Our expertise on it has only to do with the small energy part of it. The reason for that study was solid waste disposal, not energy recovery. Perhaps it would be more appropriately addressed at a later time in committee when we're dealing with the other minister's estimates.

MRS. WALLACE: I believe it was the Minister of Energy who issued the release. So perhaps you would check that out a bit more, too. And certainly it was for power production, because it was going to be self-capitalizing within a period of ten years.

A report came into my hands some time ago entitled: "B.C. Hydro: Time for a Change." It doesn't have an author, actually.

HON. MR. ROGERS: I've got a copy.

MRS. WALLACE: Okay. On page 7 it talks about regional electrical utilities. The idea seems to be of putting anything below 230 kV up for bid to private companies. I go back long enough in the power business to remember the days of the old Nanaimo Utilities, long before we even had the Power Commission; and then, of course, I remember the merger between the B.C. Electric and the Power Commission. That bothered me a bit, because certainly we would have the same situation there as we had in those days where the lucrative markets in the densely populated areas and the highly industrialized areas would be able to sell power for far less than you're selling it to the Americans probably, and in the outlying regions it would be prohibitive. I see you saying, "No, no, no," and I hope that means that you're not considering that.

HON. MR. ROGERS: I normally don't even comment on unsigned documents. While all of us have a certain level of frustration with B.C. Hydro. I don't think that is anything like a solution to the problem. There are a whole host of opportunities in dealing with the corporation, but by splitting it up into small marketing agencies for various regions you lose all the advantages that the company has internally with engineering and distribution. That's really not where the problem lies, in my opinion.

MRS. WALLACE: People are asking me how long I'm going to be, and I really can’t say exactly. But I'm getting through this pile, let's put it that way.

The next item I wanted to raise dealt with PCBs. Some of the Hydro employees came through with a method of nullifying PCBs. Of course, Hydro are the big polluters with PCBs, because they're used in transformers. I saw this little article in a Hydro newsletter that I get, that the employees had come up with a solution to this and they were going to work on it and try to perfect it. But I haven't seen any more about it, and I am curious as to what has happened with that. It would be a tremendous breakthrough for Hydro and for all of us if in fact PCBs could be treated in such a way rather than having to burn them or transport them long distances, which is hazardous.

[Mr. Strachan in the chair.]

HON. MR. ROGERS: I recall seeing that when I was Minister of Environment. I haven't seen it as Minister of Energy, Mines and Petroleum Resources. I will check for the member, and virtually take that question as notice and bring the answer back. I haven't seen anything else on it at all.

MRS. WALLACE: I thank the minister. It has been a while, and if that process has failed, then we should know. If it can be successful, that's great, and we should know about that. It would be nice to know what the status is.

I spoke a little earlier about the 17 people who had been laid off. Last year there was something like a 13 or 14 percent reduction of Hydro staff under the restraint program. I raised this earlier on in a different venue and in a different session of this Legislature. It seems to me that some of the highest-paid officials in B.C. Hydro are continuing to get increases. When I raised it before, I quoted from figures over a period of years, and I think it was the Minister of Finance (Hon. Mr. Curtis) who promised to look into it. But of course we have heard nothing more. So I'm going to raise it again. The years I have

[ Page 3754 ]

go back to 1981, 1982 and 1983. For example, in 1983 several people received fairly substantial percentage increases, which seemed to be above the guidelines for other people. The vice-president of gas operations — and I will use the titles rather than the names, because unfortunately I know a lot of these people from the days that I worked at Hydro — received a 5.2 percent increase for 1982-83 over 1981-82. The executive vice-president of engineering received a 7 3/4 percent increase. The vice-president and general counsel received a 6.6 percent increase. The vice-president of general corporate services received an increase of 8.3 percent, which in fact brought him to $125,000.04 in a year, plus some $15,000 expenses, Mr. Minister. The manager of internal audit received a 5.6 percent increase. The manager of stations projects received a 6.9 percent increase, and the manager of properties received a 9.3 percent increase. Those are large salaries. Probably about the lowest salary we're talking about was increased to $68,000 a year — that was the lowest — to the maximum to $125,000, plus expenses. I've only picked out those above 5 percent, which seem to me to be the maximum cutoff for ordinary folk. This was only up to 1982-83. I don't have figures beyond that. I wonder if the minister can tell me whether those people have received increases again. As the pattern was, it was running every year. The manager of corporate affairs, for example, had gone from $84,000 in 1981 to $114,000 in 1982 and then to $125,000 in 1983. So it wasn't just a sort of catchup; that had been happening all along. I guess my real question is: did the manager of corporate affairs get another increase this year? Did those other people also get increases?

If we're talking about restraint and holding the line, and if we're laying off people who are working in the $8,000 to $10,000 brackets — or whatever the lower brackets are; I imagine they're about $10,000 with Hydro now — it just doesn't seem fair. I can certainly understand the concern and distraught attitudes among the people who work for Hydro in the lower brackets, when this kind of thing is going on in the upper brackets. It seems to me to be inexcusable, Mr. Minister, and I'm not sure if you're even aware that that has been happening. I would like your comments, and I would also like your commitment to check and see whether it has happened this year and whether it is going to continue to happen.

HON. MR. ROGERS: I'll give you the commitment right now to find out what the increases have been. They are under restraint and therefore have to go through the same 6 and 5 that everyone else has to now.

It's always difficult when you're describing the salaries of a chief executive officer and senior officers of a company when you compare them with salaries that people in the lower echelons receive. This is the sixth-largest company in Canada and the largest company in B.C. People running much smaller companies would normally, in a competitive sense, get much higher wages. It's important that Hydro be able to have the best management team possible at the upper end, just as it's important to have good people. In fact, on an industry-comparative scale, the one area where it is not competitive is at the upper end. People running comparable industries on the outside are getting significantly higher salaries. You and I would both aspire to have that kind of salary and would probably wonder what we'd do with all the extra money. But that is what the competition is and what they pay. I can't add anything to that other than to get to the answers as to what the increases have been. The senior executive officers' increases are dealt with by a committee of the board, and I'll get you a report on it.

[12:45]

MRS. WALLACE: I thank the minister. I'm sure he would agree that it's that kind of thing that causes poor public relations and poor internal relations with the workers in the company. It's a very small example, but it's one that certainly upset a lot of workers at Hydro, where the children's Christmas parties were cancelled last year because of restraint and yet very recently a group of supervisors were called in to Victoria, and I imagine a similar group was called in to Vancouver, and wined and dined at the expense of Hydro to repay them for all the overtime they put in during the labour difficulties.

I have only one more very brief question for the minister. He answered some questions on the order paper last year relative to leased space in the greater Vancouver area. He gave me some figures and, lo and behold, last month I got a letter from him...which had asked these questions in his estimates. He was now going to reply to them. The figures he has given me in the letter are different than the figures he gave me on the order paper, and I'm confused.

HON. MR. ROGERS: You asked the questions both in my estimates and on the order paper — you asked twice last year. The reply that came from Hydro for the question on the order paper was exactly that. That is the sort of freeze, take-a-picture, what-have-we-got-today approach? Then, of course, when they finally got around to responding to the question from my estimates, some of that space had been sublet, and the numbers changed. That's why there is a difference.

I sent you a letter on another question — I remember signing it this morning. You asked the question both in my estimates and in the order paper. I guess that's just inevitable. Hydro is trying to cut down in its space. It's winding down some of its construction operations, and one of the things it is going to have is vacant space until such time as they can rent it. As you know, the market for space isn't what it was.

MRS. WALLACE: One last comment on that, Mr. Chairman. Perhaps if the minister would answer the questions on the order paper more promptly, I wouldn't have to ask them again in estimates.

Vote 20 approved.

Vote 21: resource management program, $18,381,400 — approved.

Vote 22: B.C. Utilities Commission, $1,546,444 approved.

Vote 23: Fort Nelson Indian band mineral revenue sharing agreement, $3,500,000 — approved.

The House resumed; Mr. Speaker in the chair.

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

MR. HANSON: Mr. Speaker, I rise on a question of privilege. My question concerns the use of information from government mailing lists by the Social Credit Party. Mr.

[ Page 3755 ]

Speaker, earlier today the Minister of Finance (Hon. Mr. Curtis) made a ministerial statement in which he indicated that the government and the Social Credit Party purchased an identical mailing list from Dun & Bradstreet. Mr. Speaker, I have learned from two independent sources that the mailing label in question initiated with the government of B.C., rather than Dun & Bradstreet, as the minister had indicated.

The individual concerned requested of government that he receive the publication "Talking Business." The government then turned this information over to Dun & Bradstreet to be sold in their labels. The individual did not request that the material be given to Dun & Bradstreet, the Social Credit Party or anyone else. By failing to clear up this aspect, the minister has placed a cloud over hundreds of similar cases. There are many government employees, for example, who receive letters from that governing party opposite asking for funds. Some such letters arrived at home. Many were shocked to find this material arriving on their desks at government offices.

Mr. Speaker, I'll be putting a notice of motion on the order paper requesting that a commission for security of government information on citizens of this province be established to look into the matter of government information that is being made available to private agencies to be sold without the consent of those individuals in question.

MR. SPEAKER: Hon. member, I will rule on that at the earliest opportunity, but the Chair must note that unless certain basic mechanics accompany a notice of such nature, it cannot possibly hope to succeed.

HON. MR. NIELSEN: Mr. Speaker, I call committee on Bill 10.

BRITISH COLUMBIA TRANSIT
AMENDMENT ACT, 1984

The House in committee on Bill 10; Mr. Strachan in the chair.

Sections 1 to 18 inclusive approved.

Title approved.

HON. MRS. McCARTHY: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 10, British Columbia Transit Amendment Act, 1984, reported complete without amendment, read a third time and passed.

MR. SPEAKER: Earlier today the hon. second member for Victoria (Mr. Blencoe) asked leave to move adjournment of the House under standing order 35, and said that the matter concerned the critical level of unemployment in British Columbia. I have examined the Journals of the House and the material supplied by the hon. member, and find that the matter raised does not qualify under standing order 35 in view of the fact that the matter complained of is of an ongoing nature. In this regard I refer hon. members to the decisions of this House on May 7, July 12 and September 14, 1982.

Most hon. members are aware that there are strict limitations to an application under standing order 35, and unless the rules relating thereto are altered by this House, the Chair must continue to enforce them as they exist. Bearing in mind the number of occasions on which matters of unemployment have been raised under standing order 35 and have been turned down as being inappropriate, it could well be considered that continued application of a like nature constitutes an abuse of the procedure of this House. All members consider unemployment to be a most serious matter, but all members will also wish to avoid an abuse of application under standing order 35. Mr. Speaker Dowding canvassed this same matter at some length in 1974 and concluded the matter of unemployment does not qualify under standing order 35.

Any uncertainties in the minds of hon. members will now be fully resolved in relation to the subject matter of unemployment and the propriety of an application under standing order 35.

HON. MR. NIELSEN: Prior to adjournment, I wonder if I may have leave to make an introduction.

Leave granted.

HON. MR. NIELSEN: I would like to welcome to our galleries today and draw to the attention of the hon. member for Atlin that a good friend and resident of that area is visiting the gallery. I would like the House to recognize the former Social Credit candidate for Atlin in the last election, Bobby Ball.

MR. BLENCOE: I would also like to make an introduction before we close.

Leave granted.

MR. BLENCOE: Visiting the precinct today and in the gallery earlier on were visiting exchange students from Quebec staying with students at Norfolk House, in Victoria. I would like the House to wish them welcome to the city of Victoria.

Hon. Mr. Nielsen moved adjournment of the House.

Motion approved.

The House adjourned at 12:55 p.m.