[ Page 5345 ]

CONTENTS

Tabling Documents –– 5345

Oral Questions

Resignation of university dean. Mr. Nicolson –– 5345

Mr. Macdonald

Interest reimbursement program for farmers. Ms. Sanford –– 5346

ERDA subsidiary agreement. Ms. Sanford –– 5346

Mr. Stupich

Corporate tax cuts. Mr. Stupich –– 5347

Ministerial statement

B.C. participation in Expo 85. Hon. Mr. Phillips –– 5347

Mr. Williams

Budget debate

On the amendment

Hon. Mr. Heinrich –– 5348

Mr. Williams –– 5351

Mr. Mowat –– 5354

Mrs. Wallace –– 5357

Mr. R. Fraser –– 5359

Mr. Lockstead –– 5362

Mr. Michael –– 5365

TUESDAY, MARCH 19, 1985

The House met at 2:05 p.m.

HON. MRS. McCARTHY: Mr. Speaker, today in the House we have some very distinguished visitors, representatives of the Vancouver Chinatown Lions Club, who last Saturday evening raised $25,000 for young people in need of extra care — crippled children — and for services to very many people in our community. In addition to choosing a talented and artistic young lady to represent the Chinatown Lions as Miss Vancouver Chinatown, we were all honoured to meet and greet a talented star of television and movies in Hong Kong who gave of her services for that evening, to the delight of all who were present. May I ask members to welcome, from Hong Kong, Katie Chan. Accompanying Katie Chan are Mr. Len Lowe and Mr. Peter Tseng, representatives of the Vancouver Chinatown Lions — probably one of the most aggressive and active clubs in the international family of Lions.

MS. SANFORD: Mr. Speaker, today is agricultural day in the B.C. Legislature, and visiting us are members of the executive of the B.C. Federation of Agriculture. Many of them are in the precincts at this time and some are in the gallery. On behalf of the official opposition, I would like the House to welcome the representatives, president John Savage and executive members of the B.C. Federation of Agriculture.

HON. MR. SCHROEDER: Mr. Speaker, in the gallery today are guests from Algonquin College in Ottawa. They are hosted by students of the east campus of Fraser Valley College, which is in Chilliwack. I wish you would make them welcome.

MR. REYNOLDS: Mr. Speaker, in the gallery this afternoon is a businessman from Delta, Mr. Frank Keane, along with two associates, Mr. Steve De Jaray and Mr. John MacPherson. I would ask the House to make them welcome.

MR. R. FRASER: In the gallery today are two people who, I submit, are typical of the Canadians who built this great country. They are people who devoted years of their time to community service, and I'll tell you some of their accomplishments. Phyllis Barbour is a member of the first revived Winnipeg Symphony Orchestra and a long-time community worker. Harold Barbour is a gold medal winner in economics and law from the University of Manitoba in 1922 with an average of about 98, I believe. He holds the Queen's Coronation and Jubilee Medals and the Canadian Centennial Medal and the Ontario Medal for volunteer work. He is the Canadian champion revolver shooter and a coach of one of the Canadian Olympic teams. Would the House please welcome Mr. and Mrs. Harold Barbour.

MR. MOWAT: Mr. Speaker, I would ask the House to join us in bringing a happy birthday to one of our colleagues, the hon. Minister of Environment, "the Senator," Austin Pelton.

MR. LAUK: I'm sure all members of the House will be pleased to know that Mrs. Schroeder, wife of our esteemed minister, is out of danger and recovering in hospital. I would ask that Mr. Speaker send the regards of both sides of the House to Mrs. Schroeder.

MR. SPEAKER: It would be a pleasure for the Chair to undertake that charge.

HON. MR. HEWITT: Mr. Speaker, in your gallery there is a lady from Penticton. She is a member of the Penticton School Board and a former member of the executive of the B.C. School Trustees' Association and was recently appointed to the board of governors of the University of Victoria. I would ask the House to make Mrs. Sue Irvine welcome today.

Hon. Mr. Nielsen tabled the 1984 annual report of the Insurance Corporation of B.C.

HON. MR. WATERLAND: Mr. Speaker, today is silviculture day in British Columbia. As required by the Ministry of Forests Act, I take pleasure in tabling the 1984 forest and range resource analysis, the 1983-84 Ministry of Forests annual report and the five-year forest and range resource program for the years 1985 through 1990.

Oral Questions

RESIGNATION OF UNIVERSITY DEAN

MR. NICOLSON: My question is to the Minister of Universities, Science and Communications. Today we heard of the resignation of yet another top academic. Dean Bruton of the faculty of engineering at the University of Victoria announced his resignation, saying that the government is "completely mishandling its relationship with its universities." I want to ask the minister if he has decided to stop the hemorrhaging of our universities. This is the second topflight academic in as many weeks.

HON. MR. McGEER: Mr. Speaker, as with President Pedersen, we thank him for his service to British Columbia, and we wish him well in his new post. In each case, I'm informed that the person involved went to a better-paying job in another province. That kind of thing happens. We can't prevent people from accepting promotions. My own deputy, who is a very fine public servant, left a year ago to take a better-paying job in Alberta. This is the circumstance that occasionally occurs. We don't begrudge people promotions and an opportunity to better themselves in life.

I disagree that university finances have been mishandled in any fashion. I am convinced that the sky will not fall in. Tomorrow will be a new and brighter day for our institutions and for everyone in British Columbia.

MR. NICOLSON: The dean indicated that on February 8, 1983, a letter to Dr. Petch from the minister approved start-up funds for the faculty through to 1988-89, but that a later letter, on December 13, 1984, reduced the commitment to half the amount approved earlier. This year they've had only half of the funding they were earlier promised.

I want to ask the minister: did he not have a telephone conversation with the dean on Friday last, and did he not fail to give a commitment, even at that late date, as to whether funding would be coming or not?

[ Page 5346 ]

HON. MR. McGEER: No, Mr. Speaker. I did give my personal assurance to Dean Bruton that engineering was indeed a very high priority of the provincial government. That was indicated by the special start-up funding that we had provided through the University of Victoria. It was evidenced by the new engineering building now under construction, which my colleagues the Attorney-General (Hon. Mr. Smith) and the Minister of Finance (Hon. Mr. Curtis) attended. Mr. Speaker, all of the money that could be spent was provided to that faculty of engineering. It is true that additional money that could be banked and not used now was not provided to that engineering faculty, but that's the circumstance in British Columbia where we're not funding bank accounts at a time of billion-dollar deficits. When the University of Victoria needs the funds for its engineering school, they will be there.

MR. NICOLSON: Did the minister not say in that conversation that the money simply has not been available from Treasury Board, that the dean said in his statement of resignation that the university...?

AN HON. MEMBER: It's on the next page.

[2:15]

MR. NICOLSON: Well, the minister jumps around denying various things here, but he states very clearly that only half of the start-up funds for this year have been allocated. The minister has just said that all of the start-up funds have been allocated.

HON. MR. McGEER: I think the Minister of Finance could answer this question in more detail than I, and I would defer to that.

The money which had been previously allocated had not been spent simply because the faculty is still in the start-up phase. I think it perfectly reasonable of the ministry not to fund a kitty bank at a time of billion-dollar deficits, but to say that the money will be there when you need it.

MR. NICOLSON: In his letter of resignation, he said: "I hope that my resignation will send a clear signal to the provincial government...." Is the minister himself prepared to send a clear signal to this provincial government about the lack of funding, the changes in plans and the lack of keeping up commitments? Is he willing to give a clear signal to this government by himself offering his resignation?

Interjections.

MR. SPEAKER: Order, please, hon. members. The member for Nelson-Creston knows that while part of the question may have been in order, certainly part of the question was not in order. The minister may respond.

HON. MR. McGEER: I don't know how much clearer a signal could be sent than the answers to the questions which I gave in the House today. All I can say is that if there's any fog around, it's over there.

MR. MACDONALD: On a supplementary to the same minister, there are conflicting reports as to whether Dr. George Pedersen, a very good man, received severance pay or had a five-year contract and was to be paid even after he had quit. What is the true state of affairs?

HON. MR. McGEER: Dr. Pedersen had a five-year contract. He requested to be relieved from that contract. That request was granted by the board of governors of UBC. There is still, according to the latest information I have received, some discussion between Dr. Pedersen and the board of governors as to what would be appropriate in terms of holiday pay and other normal benefits that would accrue to him for the time of service he gave to the University of British Columbia. When those details become available, I will be pleased to provide them to the House.

INTEREST REIMBURSEMENT
PROGRAM FOR FARMERS

MS. SANFORD: I have a question for the Minister of Agriculture and Food. Interest costs are a very high component of the operating costs of farmers in British Columbia. Nonetheless, the government has steadily eroded that partial interest reimbursement program, first of all by reducing the amount available from a fixed rate of 9 percent to 2 percent below prime, and now to prime. I would like the minister at this point to assure the House that he has decided not to take the next step — based on the direction the government has been going — which is to eliminate the program, and that, in fact, he has decided to improve the partial interest reimbursement program for the farmers of the province.

MR. SPEAKER: Hon. member, as the member is fully aware, the question of future action cannot be raised in question period. Further questions?

MS. SANFORD: Mr. Speaker, I asked the minister whether or not he has decided at this point. I believe that's in order.

HON. MR. SCHROEDER: If the member would turn her attention to the budget, she will see that support for the partial interest reimbursement program is in place for this year.

MS. SANFORD: It's unfortunate that the minister has decided not to improve the program, as is the request of the farmers who are here today.

MR. SPEAKER: Order, please, hon. member. This is question period. While a preamble is allowed from time to time, entering into debate is certainly not. I would ask the member at this time to phrase her question.

ERDA SUBSIDIARY AGREEMENT

MS. SANFORD: Next question, Mr. Speaker. Much of the minister's hoped-for improvement in production technology and agricultural jobs is predicated on a subsidiary agreement between the federal and provincial governments under the ERDA program. Will the minister advise why he has failed to date to procure this agreement on behalf of the agricultural sector?

HON. MR. SCHROEDER: On the contrary, Mr. Speaker. This little minister has been very successful. The fact is that the budget reflects the attitude of the provincial government as regards the future ERDA agreement, not only as far as agriculture is concerned, but as far as all of the component parts under the ERDA agreement. The ERDA

[ Page 5347 ]

agreement anticipates total funding of some $650 million, and this government is leaving no stone unturned in trying to secure agreement so that all of the factors, including the federal government's half, can flow in its natural form to the parts of the industrial and agricultural sector that require it.

If the member will look at the budget, she will see that agriculture's full $30 million commitment is there, and just as soon as we have the other signature we can begin business, which I anticipate should be on April 1.

MS. SANFORD: Mr. Speaker, I am fully aware of what the budget contains at this point, but my question to the minister was not answered: that is, why has he failed to obtain the agreement of the federal government at this point to that ERDA agreement between the province and Ottawa as it applies to agriculture? He has not done it.

MR. STUPICH: Mr. Speaker, a question to the Minister of Finance. Would he confirm that as of this date, B.C. has still to sign the first subsidiary agreement?

HON. MR. CURTIS: Mr. Speaker, I don't carry the responsibility for the conclusion of ERDA agreements — the umbrella agreement or the subsidiaries. I think that in the course of the last couple of days questions have been answered with respect to various components, but I don't have the duty, on behalf of the provincial government, to see that in the course of the last couple of days questions have been answered with respect to various components, but I don't have the duty, on behalf of the provincial government, to see that ERDA is concluded. I have the duty to provide the provincial money, and it is there.

MR. STUPICH: Mr. Speaker, the budget speech was read in this chamber on Thursday last. On that date the Minister of Finance told us that the first subsidiary agreement had still to be signed. I ask him whether that is still the limit of his knowledge: does the first one still remain to be signed?

HON. MR. CURTIS: Mr. Speaker, I can't help the member with respect to that question.

CORPORATE TAX CUTS

MR. STUPICH: Mr. Speaker, I note that he didn't say he didn't know — just that he can't help.

I have another question for the Minister of Finance. On Friday last I referred to a report by Canada Employment and Immigration with respect to the effectiveness of corporate tax cuts. I wonder whether the minister has had an opportunity to review the report, in particular with respect to the effectiveness of corporate tax cuts, as to whether or not they are the least cost-effective method of job creation.

HON. MR. CURTIS: No. I was in the House, indeed, when the member made that reference, or nearby. I have not read the report.

MR. STUPICH: Mr. Speaker, I commend it to his reading.

I'd like to ask another question. Will the minister advise why no specific employment creation targets are referred to in the budget, with respect to the tax concessions, which are supposed to be creating employment?

HON. MR. CURTIS: Mr. Speaker, I don't know that it would be appropriate in question period to deal with something as far-reaching as that. I took two hours to make the presentation on the budget. I would be happy to comment in my estimates, and I'm sure the Minister of Labour (Hon. Mr. Segarty), would be happy to comment in his estimates on the several — indeed the many — job-creation activities contained in the budget. But I do say one thing, Mr. Speaker: the early word reaching me suggests that the people of British Columbia, in particular small business, are responding quickly to the thrust of that budget.

MR. STUPICH: Mr. Speaker, my question was with respect to the tax concession aspects of the budget, not the total budget presentation. The study I referred to uses the medium-term forecasting model of the Conference Board of Canada and the focus model of the University of Toronto when they're forecasting job creation. I assume the minister must have had job creation in mind when he introduced these tax concessions, and I'm asking him what studies he used in preparing his estimates of the job-creating impact of the tax cuts in his budget.

HON. MR. CURTIS: Mr. Speaker, we used a wide variety of information. Again, I'm sorry that I have not read the specific report to which the member refers, but we have reviewed a great deal of information relative to job preservation and job creation. The budget process, as the member probably knows, started last summer and continued, almost without interruption, right through until its presentation last week. It contains very significant job preservation and job creation elements. If the member wants a number this afternoon, I am unable to provide a specific number. But I assure the member that the whole thrust of the construction of the budget and of spending allocation is directed to that about which I spoke last week — that is, job creation for British Columbians today and in the future.

B.C. PARTICIPATION IN EXPO 85

HON. MR. PHILLIPS: Mr. Speaker, I wish to make a statement. I would like to advise the House that Expo 85, the international exposition in Tsukuba, Japan, was officially opened on Saturday, March 16, by the Crown Prince and Princess of Japan. Canada was represented at the opening by our ambassador to Japan, Barry Steers; John Powles, the commissioner-general of the Canadian pavilion; and by my deputy minister, Jack McKeown, who is commissioner for British Columbia participation.

Following the official opening, Ambassador Steers, accompanied by Mr. Powles and Mr. McKeown, welcomed a number of important visitors to the Canadian pavilion, including the speaker of the House of Representatives in the Japanese Parliament and the Korean Minister of Commerce and Industry. I am advised that the Canadian pavilion — with British Columbia as the major provincial participant — is proving to be very popular with fairgoers during the first two days. Reaction to the presentation in the British Columbia theatre has been very positive, and a number of British Columbians who have already visited the pavilion have expressed pride in our presentation.

Mr. Speaker, I am particularly proud of the presentation and the film, because it was developed by a team from British Columbia. The only outside influence on the film was when

[ Page 5348 ]

we had to take it to Los Angeles to dub in the numerous speakers in the system. But the whole film was made here in British Columbia by a B.C. team.

The uniforms which were worn by the four young actors and actresses during the film were designed in British Columbia by British Columbia designers and manufactured in British Columbia by British Columbia manufacturers, and at the present time we have 16 young people from British Columbia acting as British Columbia hosts. Twelve of the 16 speak fluent Japanese.

This province has had two principal objectives in deciding to participate in Expo 85, These are a desire to enhance the overall relations between British Columbia and Japan and a desire to reinforce that this large Japanese audience sees the image of Canada and British Columbia as a good place to do business and a beautiful, fun place to visit — especially during Expo 86. Early indications are that we have accomplished these goals.

[2:30]

MR. WILLIAMS: Well, we appreciate the report from the Minister of International Trade and Investment about the great events in Japan. The only thing we didn't hear was whether the ambassador's wife was dressed in green or red, and whether tea or coffee was served. If we ever had any doubts about the new portfolio of International Trade and Investment, they were cleared up today. We now know where that one's all at. The only problem is that the minister didn't have his Gold Card ready to join them at the tea party.

The issue really is the problems here at home, Mr. Speaker. This reinforces more than ever that jobs are needed here at home. They can be created here at home. We're losing brains at UVic in engineering, and everywhere else. The job to do is here at home, it's not at tea parties abroad.

Mr. Stupich tabled documents.

Orders of the Day

ON THE BUDGET

(continued debate)

On the amendment.

HON. MR. HEINRICH: Mr. Speaker, my colleague the Minister of Finance has presented a challenging budget statement. The theme is economic renewal, partnership and the creation as well as the preservation of jobs. It's one that we should all support.

[Mr. Strachan in the chair.]

We're emerging from a recession. Times have changed and we must be ready to change with them. There has been a great deal of debate over education for the last couple of years. We recognize what the opposition and the critics have been saying. We recognize that a strong education system is essential to economic recovery. I think the Minister of Finance has recognized this and has provided us with adequate funding.

The estimates show an increase in the budget for our ministry from $1.355 billion in 1984-85 to $1.428 billion in 1985-86, which is 5.3 percent. The Education ministry absorbs 15.7 percent of the resources provided by the provincial budget. While it is very interesting for the critics to make reference to the actual percentage of the provincial budget, I think what is really important is the unit cost, whether we're looking at post-secondary or at the school system.

Once again the largest proportion of the ministry's budget is dedicated to supporting public school education. Over $1 billion from general revenue is provided for various grants and contributions, $565 million for operating grants, $109 for debt-servicing grants, $98 million for contribution to the teachers' pension plan, and $272 million from the homeowner grant. In addition, $576 million will be collected by the province from non-residential taxation and distributed to school districts. This is an interesting point: $576 million from non-residential taxation. We should recognize the thrust of the present budget. I'll have more to say about that in a moment.

Altogether the province's financial contribution will cover 86 percent of the cost of running our public school system. Forgetting about the argument from consolidated revenue, and the split between consolidated revenue and nonresidential taxation, the point is that 86 percent comes from either commercial-industrial or consolidated revenue, and about 8.25 to 8.5 percent from the residential system.

Local residential taxpayers, I think, do very well. I've made reference to the amount they are paying: 8.5 percent provincewide. There is a small amount picked up under miscellaneous, and this is from the Department of Indian Affairs, as well as the Department of National Defence.

Even more interesting is what has happened over the past four years. The contribution of residential property tax payers has declined from $187 million to $159 million. That's a significant reduction.

This budget provides enough funds to pay for authorized school district expenditures for 1985-86. What is really important, I think, now that the funding has been finalized is that we must focus our energies on management. We have a responsibility to our children and to our taxpayers to use our resources wisely.

The Minister of Finance announced major reductions in school taxation for non-residential tax payers. This is a policy change which has been advocated by many, including the B.C. School Trustees' Association. In 1985-86 non-residential school property tax will decline from $663 million to $576 million, a reduction of $87 million. Another interesting point is that we have been able, under the control of public expenditures, to maintain the non-residential allocation for three consecutive years at that figure of $663 million. Going into the fourth year, we're getting a reduction.

To compensate for this $87 million, general revenue grants will be increased. It's a modest increase in revenue from residential taxation. It will result, I think, based on new residential properties which have been added to the assessment roll. I welcome these measures.

Tax relief for the non-residential property tax payer is long overdue. When the provincial government assumed the responsibility for taxation of non-residential property in 1982, the objectives were, firstly, to provide a more equitable distribution of tax revenue, and I think everyone concedes that point; and, secondly, to redress the drift — and it was a drift — towards a heavy burden on commercial and industrial tax payers. As a result of this change in responsibility and the control exercised over school budgets, tax relief is possible  today.

[ Page 5349 ]

Funding for post-secondary colleges and institutes remains unchanged in 1985-86. Despite the harangue which we have picked up from the press, as well as from the opponents and some members of the opposition, I'm pleased that we did receive 100 percent. Frankly, I thought the program was 95 percent of the 1984-85 budget. It turned out to be 100 percent, and I'm delighted with that.

Over the past two years post-secondary has responded well in the reality of public sector spending control. Through careful examination of all programs and increases in productivity, colleges have been able to enrol 9 percent more students, without corresponding increases in their budgets. I applaud those efforts, I really do. Details of the 1985-86 allocations will be made in the near future, I hope reasonably soon.

Independent schools will continue to be financed according to the formula based on costs in the public school system. Enrolment has increased in independent schools, and our grants are up accordingly. The budget for independent schools has increased $2.7 million in 1985-86, because of an enrolment increase of 8 percent, and a further $1 million following a change in accounting practice recommended by the auditor-general, which was going from the cash system to the accrual system.

I must remind all members of the House that the existence of independent schools remains a cost-effective option. If those pupils were incorporated in our public system today, there isn't any question the taxpayers would have to come up with another $60 million.

Mr. Speaker, I believe the cause of education in our economic future has been well served by the new budget. This viewpoint is not — and I repeat, is not — shared by all. I would like therefore to comment on the current debate over school funding.

We can go back a few years to 1981-82, and we can read the headlines which were in the newspaper when trustees, administrators and officials — it didn't make any difference — in the system were calling for some kind of reform. Well, reform we did bring in. It is interesting to note that even those critics I've encountered — and a lot of it, I might say, has been constructive criticism — have all conceded one valid point. To me, anyway, it's valid: the system is far better now than it once was. There are some problems. We are trying to accommodate them.

We recognized early the magnitude of the economic slowdown and its impact on workers, on businesses and on taxpayers. We placed a priority on our own domain. By "our own domain," I mean the public sector. We have put our own house in order, and in doing so, we've been able to contain the deficit and avoid an unbearable tax burden. An unbearable tax burden is the fear that I always had.

As the Minister of Education, I am the advocate of public education. There's one thing: to be its advocate sometimes requires the necessity of perhaps imposing a little bit of pain. But at least what we have done has precluded the explosion of a system which was not going to survive under the weight of the taxation which was coming to pass.

Mr. Speaker, if I am going to be responsible for executing these duties, I think it is only fair and proper that we start with our own ministry. We have achieved some considerable efficiencies in the management of our own operations. Over the last three years the budget has been reduced by almost 20 percent, with the full-time staff levels failing by greater than 33 percent. If you will note, we started at 711, and as you'll see in the blue book today, it's 475. As all members on both sides of the House know, these numbers vary from time to time, and sometimes it's difficult to explain, but I am sure those members opposite who were once on this side of the House understand FTEs and the way they work.

The fact is that we have reduced and have reduced substantially. The same type of careful financial stewardship is essential throughout the education system. We knew that our actions would be unpopular in some quarters, but we have carried through with our program and can see in this budget the opportunities our efforts have produced.

It reminds me of something I came across. A former Minister of Education.... Believe me, I have all the compassion and understanding for the member for Burnaby North (Mrs. Dailly), because I remember a statement from when she was having some difficulties — the same ones which I am experiencing now. I always get a charge out of it: when she sees me, there's a sort of knowing smile and a twinkle.

But there was a quote in the Vancouver Sun on December 18, 1973. After trying to resolve some of these problems, this statement was made: "The new government, as it has loudly promised, lifted these controls. Mrs. Dailly now says this was done on the assumption that school trustees would exercise restraint." As the member well knows, sometimes it's difficult to get everybody to exercise restraint. So we knew that some of our actions in '73 were going to be unpopular, as they are in 1983.

As have all sectors of the economy, the education system has been asked to make some difficult adjustments over the past three years. Both the school system and the college system have had restrictions placed on their funding. However, their treatment has been fair, and it has been reasonable.

[2:45]

Too often the facts are overlooked, and the tightness of funding limits overstated. Let me give you an example. This budget includes funding for the 1985-86 school year. In 1982 the total gross operating expenditures per pupil were $3,500. Our funding targets will allow for the same level of spending per pupil in 1985-86. Operating expenditures per student will not decline. Total spending will be lower by $35 million, but the difference is all accounted for by a decline of 12,500 in enrolment.

Therein is the other point which we must not ever forget, and that is that the decline in the student population in British Columbia has been quite significant over the years.

Interjection.

HON. MR. HEINRICH: I'm saving a few minutes at the end to have a rap session with my critic, Mr. Speaker.

Any reduction is difficult and certainly unusual in the public sector, but the system was put on notice three years ago that expenditures in the public sector must be controlled. In setting spending levels, the government has been as fair as possible. Ample warning was given, and a system of allocating funds has been developed and discussed with all interested parties; that discussion has continued and innumerable changes have been made. The details of the formula have been adjusted in response to problems identified in its first year of application, and the original spending targets were increased by $25.6 million.

[ Page 5350 ]

Have we been wrong to control education spending? Have we been wrong to control property tax increases'? My answer is an unequivocal no. The government's policies have been right for both the near term and the future of the province. As we enter the third year of controlled budgets, a number of school boards are having difficulty making the final adjustment. March 15 was the deadline for districts to submit budgets in compliance with ministry guidelines, and so far 54 budgets have been received. I can report that of the 54, 31 boards have been able to make the hard decisions and keep their '85-86 budgets at the authorized level. For those who have complied, the task has been no easier than for those who submitted budgets in excess of the guidelines. The difference is that these districts have accepted the need for control, have planned for it and have concentrated their energies on the task of managing the system.

Of the districts that have not complied, some are simply making a political statement and will comply, I am sure, when they receive the directive that will be issued today requiring them to comply under the act. Many school districts right now have two budgets already prepared. As a matter of fact, they have come to my office and delivered two budgets: one a compliance budget, the other a needs budget. Some of them have been reasonable; others are making, in my view, staggering statements with respect to the differential. Other districts cannot comply because they have included in their budgets an allowance for compensation increases. I have told the boards repeatedly that there are no funds available in 1985 for salary awards. The Minister of Finance's statement reinforces that point.

It is interesting how members of the opposition, and particularly the Leader of the Opposition, is always free to quote Manitoba. Here's a March 6 statement from the Winnipeg Free Press: "As well, the proposed budget does not include salary increases for 1985, which are being negotiated with staff." A further quote by a trustee in the Winnipeg school division: "'It's the fashion to blame both the provincial and federal governments for education underfunding,' said trustee Esther Sims. 'But it's up to us to cut the fat."' No doubt Manitoba can pick on some things here, but the fact is that it's not all peaches and cream in Manitoba. We're going to have more to say about this tremendous comparison which is always being thrown at us from across the floor.

I repeat, the Minister of Finance's statement in the budget speech reinforces the point that there is no further money for education. In particular we're talking about salary increases. The funds are to be used to maintain services to our children, not to increase the income of teachers and administrators. Every increase in salary will result in fewer jobs for teachers. The BCTF executive will of course say that this is unfair; that teachers have been put in a difficult position in having to choose between jobs and pay increases. Mr. Speaker, I can sympathize with their position and with those members or past members of the BCTF executive who are present in the chamber today.

AN HON. MEMBER: Where are they?

HON. MR. HEINRICH: I'm sure I saw....

May I have leave to make an introduction, Mr. Speaker?

Leave granted.

HON. MR. HEINRICH: I'd like the House to welcome Larry Kuehn, who is a past president of the B.C. Teachers' Federation.

DEPUTY SPEAKER: I should point out to the minister that leave is not really required during your own speech. You can just refer to the guest.

HON. MR. HEINRICH: It's a matter of courtesy. I'm not going to take advantage.

Mr. Speaker, I can sympathize with their position. They would like to have both. We would all like to have both, but government does not have that luxury. The unemployed people in this province do not have that luxury. Small businesses who have lost their investments do not have that luxury. We must make choices and the priority must be jobs. I am confident that teachers will make the same choice and work with school boards to protect jobs and maintain service levels for their students.

MR. HANSON: Who wrote this?

HON. MR. HEINRICH: Myself and a couple of others worked for some time — the same as the member for Victoria when we listened to his material on Bill 3.

I cannot deny that some jobs will be lost. Enrolment in public schools has declined. However, the number of jobs lost can be minimized by a cooperative attitude on the part of teachers' organizations and an understanding of the management problems faced by school boards.

Mr. Speaker, jobs are the number one priority; salary increases are not. I repeat: jobs are the number one priority and salary increases are not. It makes no sense for school boards to budget for increases; they do not have the ability to pay. I expect school boards who have done so to revise their budgets. Many districts have already complied, and others will submit revised budgets this week.

Some, however, insist on perpetuating the myth that further cutbacks in funding will devastate levels of service. Some have chosen to organize campaigns for more funds rather than face the task of running their school districts. I have listened carefully to their arguments for special treatment and to their lists of what they call "unique problems." I am left with one question: why is it that some boards can manage, Mr. Speaker, but others cannot? I'm not convinced that boards such as Vancouver and Delta, who have not complied, have valid reasons for special consideration or have unusual difficulty in meeting budget guidelines. I can only conclude they are incapable of making the transition from a period of ever-expanding budgets to the very different fiscal realities of today.

I was told by some boards that government should return full local taxing power to them so that budgets could be expanded by increasing residential property taxation. We gave boards an opportunity to seek additional funds from their taxpayers, but they decided to forgo the option. Now they expect the provincial government to put additional demands on the taxpayers of the province. We will not do what they have refused to do. That discussion should now be put to rest; our task is to manage — and manage well — with the funds we have.

One of the reasons given to me for why referendums were not acceptable was that there wasn't adequate timing. All I know is this: if we can drop a writ and conduct a provincial

[ Page 5351 ]

election for the entire province in one month, surely there was ample time if people felt they wanted a referendum. Everybody told me when I visited — and as you know I spent a lot of time in three and a half months traveling — that this issue crosses political lines and parties; there is concern. There was the opportunity for those people to take that initiative if they so wished, but they weren't prepared to do so.

One of things I think we're doing that I think is very important right now is redefining the roles and responsibilities of the groups involved. That process had begun. In January a discussion paper on education was published, and interested parties were invited to participate. A public debate was held on these issues. March 15 — and that time has now expired, and no doubt there are probably some submissions still being made.... I can advise you, Mr. Speaker, that the response from the members of the public has been very good. The returns received as of today represent input from more than 17,000 people. I think that's an extraordinary response — 17,000 people, who have made one comment or several comments, or submitted briefs, or half a dozen people who have submitted a brief together. At least 17,000 people have said there're interested in the public school system, and they would like to advance their views.

From the public dialogue we should all gain a better perspective on the directions for education for the next five years. From that perspective a new School Act will be developed for this House to consider.

MR. ROSE: When?

HON. MR. HEINRICH: All I want to advise the member, my critic, is that I will work very hard, harder than I'm working now — as I can; we can all work harder if we try harder — and we'll have it here for you.

Interjections.

HON. MR. HEINRICH: I've heard about that for 25 years from people in British Columbia — about wanting a new School Act. I give you my unequivocal commitment that there will be a School Act in this House, and I'll bring it in.

AN HON. MEMBER: Before the turn of the century?

HON. MR. HEINRICH: Yes.

Mr. Speaker, I've discussed the wider implications of this budget for education and also the necessary response of the education system. I think it's been good. The budget speech has reminded us of our economic and social potential. Let us put the funding issues in proper context and get on with doing the job.

Now there were some comments made yesterday by my critic which I think have to be responded to. I enjoy the comments which he hurls across the House from time to time, but I know that he too has his difficulty finding solutions. I enjoyed this statement from the Alberni Valley Times, which no doubt has come to you, Mr. Member: "Rose long on criticism, short on solutions." It felt wonderful to see this line, because of course I've had that unfavourable headline in a lot of the press around British Columbia.

[3:00]

MR. ROSE: More than I have.

HON. MR. HEINRICH: I know, but I just want you to know that I'm glad you haven't got all of the solutions either.

There were a couple of comments yesterday with respect to the states of Washington and California. Maybe, Mr. Member, you and I have the same clippings. I just want to refer to the budget from the state of Washington, our neighbours immediately to the south, which you referred to yesterday. It's from the March 15, 1985 Seattle Post-Intelligencer. "Legislative leaders responded cautiously, but leaders of teachers' and state employees' unions reacted angrily. The governor said no decision will be made until next year about when and whether salary hikes will be given to teachers, state employees and faculty at community colleges." It makes references to penny-pinching and the state's teachers' union. We've got all of the points here, and I don't understand where you're coming from with respect to your comments. "The amount of money which was advanced by the budget under the current leadership wasn't anywhere near what was expected to be brought down." Is that correct?

In conclusion, I wish to say this: it's our job — and mine in particular — to preserve the public education system, to be its advocate. Our concern — and we planned this over a three-year period — was to prevent the system from exploding and roughly doubling in seven fiscal years from $1 billion to $2 billion. I'm rounding those figures. Something had to be done. I think the formula we brought in is equitable and fair. I'm not saying it is infallible or perfect, but it's been a tremendous benefit and improvement. The counsel I received from those responsible for administering the school districts throughout the province — superintendents, officials, secretary-treasurers, trustees, some chairmen — was: "Good marks on the system. There's just a concern at times, and if we had a little more money it would make it better. Other than that, we give you full marks for what you've done."

[Mr. Ree in the chair.]

All I have to do is refer to the Province dated February 7, 1982, when everyone was clamouring. No politics, no partisanship; it came from everywhere. Members of both political parties — there are pictures of them at the bottom of the page — were saying: "Please change the system to try to bring in some degree of equity between districts and some soundness in funding."

In concluding, I speak against the motion advanced by the member for North Island (Mr. Gabelmann).

MR. REYNOLDS: Mr. Speaker, I ask leave to make an introduction.

Leave granted.

MR. REYNOLDS: I would like to advise the House that in the galleries this afternoon I have 21 grade 8 students from the new co-ed Collingwood private school in West Vancouver. I couldn't think of a better time for them to arrive in the House, to listen to the Minister of Education and now the eloquent second member for Vancouver East. I would ask the House to welcome these students and their chaperone, Mr. Gallagher.

MR. WILLIAMS: I want to talk today about two things, one being the relative decline of the industrial structure of our forest industry. We've had a lot of speeches in this House that

[ Page 5352 ]

have made it clear in terms of the decline of the forest itself and the land base, but we haven't yet addressed our failures in terms of industrial structure. I think that's a serious matter and one worth some long discussion.

I wanted to talk about another issue as well, so I had to make a choice. The other issue is the Shoal Island report no. 7 of the ombudsman to the Legislative Assembly of British Columbia. That document arrived in this House about a year ago. I would like to reflect on some of the things the ombudsman told us in terms of the problems of scaling at Shoal Island, on some of the information I've since been able to obtain from various departmental memos in the Ministry of Forests, and on the job that the ombudsman has done, which has been of considerable benefit to the people of the province.

Why talk about Shoal Island? Because it's one of the serious cases, maybe the most serious case, that the ombudsman has brought before the Legislature in his nearly five-year career. Why? Because the ombudsman was regularly stonewalled in his efforts to prepare the document; because the Attorney-General of this province abused the power of his office before the ombudsman submitted the report to the Legislature and tried to prevent that report from arriving here and obfuscated afterwards with phony criminal comments. Why? Because at the height of the ombudsman's investigation we were at the height of restraint.

What was the ombudsman trying to tell us? The ombudsman was saying that there were millions of dollars' worth of trees not being counted at Shoal Island. But the government seemed unconcerned, consistently. The deputy, the minister, the Premier, the cabinet, assistants to the Premier and assistants to the cabinet turned a blind eye to what the ombudsman was trying to get through to them. Restraint was beginning, you were closing down rape-relief centres, you were cutting back on day-care centres, and all of this at the time that the ombudsman was trying to tell you that millions in real revenue that was legitimately ours was not being collected. The government was unconcerned. The government closed its eyes to as many as 4,000 truckloads of logs coming through the gates at Shoal Island.

It's important to look at Shoal Island because there were five other dryland sorts operating in a similar manner, the bulk of them operated generally by the same company: British Columbia Forest Products.

HON. MR. BRUMMET: How do you relate this to the budget?

MR. WILLIAMS: This is money that we have lost in British Columbia, that we have still not collected. It's worth reflecting on it in terms of the continuing grinding-down of the Forest Service, and the continuing privatization that's going on, including the privatizing of scaling itself. It's like turning over the cash register in the supermarket to the people taking out the groceries. That's what you guys want to continue to do with our forest resource.

What we're talking about, Mr. Speaker, is public timber. It has an immense value. It's important to look at Shoal Island because the company, B.C. Forest Products, would not cooperate with the ombudsman. They would not even cooperate with the ministry or the minister, despite legislation that makes it clear that the ministry and the minister have the power to obtain information from those corporations. They would not and have not opened up their books to either the ombudsman or the ministry.

It's important to review Shoal Island because the issue is still unresolved, because some of the timber that went through there is still unaccounted, and because the contractors — the people actually logging on BCFP lands — have still not been fully paid. The whole matter, strangely, has been referred to a medium-level civil servant: the regional manager for the Vancouver forest region in Vancouver, Mr. Grant.

It's important to review Shoal Island because it's important to show the need for a truly independent ombudsman, which we have, and because it appears that the ombudsman — and people like the member from West Vancouver are challenging him — is in jeopardy at the hands of the current government.

Let's summarize the basic case, Mr. Speaker. Shoal Island, owned by BCFP, is a dryland sort. It was started in 1978. BCFP pioneered dryland sorts, rather than water sorts. There are significant advantages in dryland sorts in terms of retention of logs and the rest. While scaling itself is simple enough in theory — it's just a counting and measuring of the size of logs — BCFP set up a system at Shoal Island and the other depots that was complex and could not be checked. While the logs were brought in in bundles, the scaling was not done when the logs came in by bundles but by individual sort codes of some 20 different types of logs on different parts of the site. It was a hustle operation on the part of BCFP. Many of the sorts got boomed away again very quickly to other plants so that the original bundles were never properly reviewed. There was no single checkpoint, and there was no doublecheck either, as the act asks for.

One of the contractors that had worked for BCFP cutting timber on the contract area packed it in in 1980. That was Kyuquot. They packed it in because they couldn't make any money, and because they had some doubts about whether the scaling was correct. At any rate, they couldn't make any money. The contract was taken up in turn by a long-time contractor, a man with long-time connections — ironically — to the Social Credit Party, Mr. Mahood — Mahood and Traer. They commenced feeding the Shoal Island operation in 1981. They had doubts by April about the correctness of the tally with respect to that operation. So they hired independent scalers to check the material for a couple of weeks, without advising either the Crown, the Forest Service or B.C. Forest Products, and they found an 11 percent shortfall. It clearly was the difference for them between profit and loss, or life and death. That check-scaling was stopped, though, because B.C. Forest Products intervened and blocked it.

There were subsequently other checks by other consultants and the ministry. All of those further checks indicated a shortfall. One was the T.M. Thomson report, an estimate prepared by an outstanding forest consultant who works internationally out of Victoria. He estimated a shortfall of some 226,000 cubic metres. He said that was a loss to the contractors of between $4.5 million and $6.3 million, and it was a loss to the Crown, in terms of stumpage, of $1.3 million to $2 million. But that was only half of the volume involved, because BCFP was logging half of the stuff themselves from that particular show, and that was coming into the yard as well. So if we put those numbers together, what we're talking about at Shoal Island is a shortfall of revenue to the contractors and revenue to the Crown of some $10 million, and the same thing happening on five other sites — a potential loss to contractors and the Crown, in a time of so-called restraint, totalling some $60 million.

[ Page 5353 ]

The Shadforth scale then said there was a shortfall of 11 percent. That was stopped, as I said, by B.C. Forest Products. Why would a company do that, Mr. Speaker? If the scale was less, then the company would benefit; that couldn't be the reason. If the scale was the same, the company is in the same position. But if in fact there were more logs going through, then the company would face a loss on the improper profit it had been receiving.

When did Shoal Island start? It started in 1978. When did this problem finally get noticed, and when did the whistle blow? Not until late 1981. Some four years were lost. There were subsequent scaling checks as well: Whittaker made a check and reported to Mr. MacPherson, who is now the Deputy Minister of Forests, and it was clear that the problem was serious and should be dealt with. So by November the ministry realized they had a serious problem on their hands. But a year later the minister replied to the contractors. A year later they were still dealing with the fact that they hadn't got their money. They said, in a letter to Mr. Mahood, the following. That's the deputy minister, Mr. Apsey, who has now gone back to the Council of Forest Industries — the industry's lobby — from where he came. Apsey's letter to Mr. Mahood, November 15, 1982, is interesting, Mr. Speaker.

[3:15]

What does the deputy minister say, after he's got all this information, checked by several sources, all of them reliable? He says: "Scaling is a statutory procedure to assist in the calculation of revenue due to the Crown." "Assist," he says. I thought it was supposed to be a precise measure of volume to determine the value of the Crown's assets. What does Mr. Apsey carry on to say? "Scaling was performed at the request of the licensee." But it's required by statute, Mr. Speaker, And then he said: "Any duty the Ministry of Forests had would be to the company" — that is, B.C. Forest Products — "for whom the scaling was done and not to its agents or contractors independently." But surely the ministry's duty was to the public at large. It's interesting to see that the COFI Deputy Minister of Forests saw his first duty as being to British Columbia Forest Products.

Then Mr. Apsey said: "It would appear that any reliance placed on the scale returns by your company was at your choosing and based largely on the licensee's assurances that the scaling at Shoal Island was reliable." In effect he's saying: "If you accepted our numbers, the more fool you." That's what Mr. Apsey said to the contractors. This letter was written to Mahood on November 15, 1982, in reply to Mahood's letter of an earlier date. It was written despite all of the information the deputy minister had in his files and advice from his staff to the contrary: in effect that there were serious problems at Shoal Island, and that both the Crown and the contractors had lost.

Finally, the matter gets to the minister's desk, the member from Yale. A memo from Mr. Apsey to the minister of May 19, 1983, says that.... It deals with the 11 percent shortfall, and it goes over truck volume details that Mr. Thomson, an outside consultant, had gone over, and it kind of fogs them up.

A good minister can tell when he's getting fog from his staff and when he isn't. But this minister didn't quite see it. If you put the numbers together closely, the truck haulage weight was far less during the Shoal Island operations period than either before Shoal Island or after. The cubic metres from the same group of contractors increased significantly before the dryland sort and after the dryland sort. But the numbers are jumbled in the report, and I can see that the minister might have got lost in that minor bit of fog that his staff left with him. But it is abundantly clear what happened, and it was abundantly clear to Mr. Thomson, the international consultant here in Victoria who looked at the same numbers.

In his report to the minister Mr. Apsey says the company refused to provide its own information. Did the minister do anything about it? Did the minister pick up the phone and demand the information? Did he bring in the lawyers and demand that the data be provided? The minister did not.

What happened, though, was that when the Forest Service staff did one small check in the September period, they found a 6 percent difference, and that was after a considerable amount of checking — by then much more careful work had been done. As a result, B.C. Forest Products paid an additional 6 percent ex gratia to the contractors. But did B.C. Forest Products pay the 6 percent to the Crown? The answer is no, Mr. Speaker.

In his memo to Waterland, Apsey said that in their studies for September and October of '81 they were sufficiently disturbed to.... It was disturbing, and they said there was direct evidence that logs were being missed at Shoal Island, and further, that recently interviewed scalers and scaling supervisors who had worked at Shoal Island were of the opinion that there must have been a continuing situation in which logs were being missed. That's in the memo to the minister of that previous date, Mr. Speaker. Mr. Apsey continues in the memo and says the volume lost was at least 85,000 cubic metres. The contractors argued that there were 226,000 cubic metres lost, as Mr. Thomson argues. The truth was clearly more than what the company had paid.

Finally, in the memo to the minister, Mr. Apsey said: "If the ministry takes no action, then the contractors may go to court, and to the ombudsman to intercede on their behalf. In either event the investigator would have powers to obtain evidence under oath and obtain documents and require that they be produced" — this despite the fact that the deputy and the minister had the right to obtain information then and there, but did not. The minister, in face of this information and all of the data that showed there was a significant shortfall, simply accepted the recommendation from Mr. Apsey that the ministry could not determine what volumes went through Shoal Island unsealed. That's the fighter for fair play; that's the fighter for equity who is the Minister of Forests.

After all this, the ombudsman got on their tail. What did Mr. Apsey say in the letter of January 6, 1984, to the ombudsman, after considering the report? He said: "By issuing a new account, the ministry would be conceding that its scale returns are inaccurate in the amount of the new billing. The ministry makes no such concession" — this despite the fact that BCFP paid more to the contractors for one of the four years in question, and despite the fact that his staff said that it wasn't working right. His staff said the numbers were wrong, and four groups of outside consultants said the numbers were wrong, that there was always a shortfall. Mr. Apsey said that despite all the background information he had.

What's been said, I think, is clear. It was available at a very early stage, and the minister tended to ignore it. There was a memo that went out to all the scalers and supervisors in the Duncan forest district way back after those initial studies. It said: "By now I am sure that you have heard any number of stories about the errors in scaling at Shoal Island, Crofton. I am taking this opportunity to set the record straight." This

[ Page 5354 ]

was a memo from Mr. Holloway, the operations superintendent for the Duncan forest district. He said:

"Our scalers have been missing pieces, a significant failing. The error.... . does not reflect on any scaler's technical ability to scale. The fault lies in the system under which the scalers are required to work at Shoal Island."

"If you have personal knowledge of the system at Shoal Island, I probably need say no more. If you are not familiar with Shoal Island, I think it suffice to say Shoal Island employs probably the most complex system of record-keeping — not to be confused with scaling — of any dryland sort in the province, with virtually no built-in checkability."

That was a memo made available to all scalers in the fall of 1981.

Since then the minister has finally referred the whole matter to the regional forest manager, Mr. Grant, in Vancouver, to determine the amount of unscaled wood at Shoal Island. Since then there was a hearing in September, a hearing that was supposed to take five weeks and instead received only written briefs and lasted no more than two days. Still we have no report to the public, no statements from the minister, no redress for the contractors, no additional stumpage for the Crown. Where are we now? We still don't know. There has still been no report from the minister. There's been no report to the public.

I am aware, though, of an additional memo, Mr. Speaker, dated September 20, 1984, from Mr. H.J. Whittaker, who was then the regional scaling coordinator — that is, in charge of this whole area — for the provincial government and a long-time Forest Service employee, to Mr. D.L. Clancy of the legal services branch. He says — and he's pretty clear about what his duties are, unlike Mr. Apsey, who clearly saw his duties related to British Columbia Forest Products and the major corporations: "My primary duty is to ensure that a true and accurate scale is done by all scalers, and that no parties that have an interest in the scale suffer because the scale was inaccurate for whatever reason. In this case there are at least four parties involved: (1) the logging contractors who were under contract to BCFP to log certain timber; (2) BCFP, who would consume a portion of the timber...; (3) other lumbering companies who purchased timber that had been scaled and processed at Shoal Island; and (4) the citizens of British Columbia, who own the timber." Later in the memo he's clearly responding to the kind of push he's getting from the lawyers in the Attorney-General's office, because he says: "Is it not reasonable to assume the Thomson report has some merit?" He underlines "reasonable" and "some." Then he asks if it isn't reasonable to assume that check scales conducted at Shoal Island by his staff in September and October have some merit. Then he says: "Is it not reasonable to assume the Burdge-Whittaker report (on truck load sizes) has some merit, and is it not reasonable to assume that the check scales from two of BCFP's converting plants have some merit?" That's what Mr. Whittaker said to Mr. Clancy of the legal services division.

What that tells me, Mr. Speaker, is that there's continuing pressure from the Attorney-General's office on this issue, just as there was from the Attorney-General before, in terms of blocking process and procedure. Mr. Whittaker has since taken retirement, like other senior people in the Forest Service, and we've lost him. He had a different point of view. He said it wasn't just one big company's interest that he was concerned about, as Mr. Apsey did.

Despite that pressure, Mr. Whittaker responded, and his concluding paragraph in that memo reads as follows: "I accept that the premise" — and clearly he has been challenged by the A-Gs office again — "that the reasons why I think a shortfall in volume occurred is narrow in scope. Nevertheless, it's my opinion that a shortfall in volume took place at Shoal Island during the entire period in question" — that is, throughout the four years. The chief scaling person for British Columbia concluded that there was a shortfall, and that BCFP got an improper benefit for four long years. Their hustle-hustle operation at Shoal was to serve their interests. It served not the contractors, the hard workers, the loggers in the bush. It served not the Crown, the owners of the timber. It served British Columbia Forest Products.

What's the member for Yale, the Minister of Forests, doing about it? We don't know. It has been stonewalled by various sections of government. And we're all the losers. All of this in a time of restraint, when that money could be used to pay for the schools that this minister a few minutes ago said you didn't have. It was there but you were turning a blind eye to it, because it was public timber and the public be damned.

When this man became Minister of Forests a decade ago, Mr. Speaker, for some reason he found it necessary to give a speech. It was his first speech, and he said: "I want everybody to know that I'm no patsy." I wonder why he felt it necessary to give the speech, Mr. Speaker? One thing Shoal Island tells us is that the minister is indeed a patsy.

[3:30]

DEPUTY SPEAKER: Mr. Second Member for Vancouver East, I presume you were not implying anything untoward toward the minister on the statements....

MR. WILLIAMS: A patsy is a patsy, Mr. Speaker.

MR. MOWAT: Before I start my speech in support of the budget, I'd also like to welcome, as the member for West Vancouver-Howe Sound did, the students from Collingwood School. It's a pleasure to see them in the gallery this afternoon.

It is with pleasure that I rise and speak in support of the budget brought down by this government. I would like to thank all the hard-working individuals who have aided the Minister of Finance in his preparation and analysis: the economists, the accountants, the managers, the secretaries and all the staff who worked on the publishing at the Queen's Printer. It represents a great team effort. The publication "The Economy in a Changing World" is must reading for everyone in British Columbia.

I congratulate the Minister of Finance for preparing a budget of economic recovery and partnership in progress. This budget provides B.C. with a tremendous opportunity to get its economy working in high gear as it pulls out of a global recession. Incentives are there for business to invest, to expand and to hire more people. The potential for even greater growth is out there in our people, in our resources and in the spirit of B.C.

Mr. Speaker, the budget provides very well for those social services that make life more livable for all of us, especially for the less fortunate in our province. This budget will help our citizens to continue to achieve the greatest possible degree of independence.

[ Page 5355 ]

In health, education and social assistance it will sustain the generous levels of support which British Columbians have come to expect. In health, education and social assistance the expenditures will be $6.3 billion, up 6.9 percent over last year. Another way of putting it is that 70 percent of our budget for this year will be spent on health, education and social assistance. For example, in health alone, it is up 5 percent over last year, to a total of $2.677 billion. Just one small example is the fact that we will be purchasing over 50 new ambulances this year to provide a very needed, vital and essential service to our citizens. This alone, for providing just 50 ambulances, will be $1.8 million.

The government in this budget is able to provide incentives and maintain services because it has, in the past years, acted responsibly in the face of rising government costs. We have not allowed British Columbians and their children to be buried under an excessive public debt, which would not only cloud the future of economic growth now but also that economic growth which our children will create and enjoy.

As the Premier said in his television address of February 16, we now have room to move, to take positive action and to mobilize our resources within government and the public sector to get our people back to work. Some would tell us not to worry about deficits; just to accept them as a way of life, and to get more money into people's pockets. Well, Mr. Speaker, I too want people to have more money in their pockets, but I want it to be their money. I repeat: I want it to be their money, not our children's money. That's what would happen if the government of this province forgot its responsibility to the future.

The interest on the provincial debt this year — just the interest alone — is $384 million; or another way of putting it is that over $1 million per day every day of this year will be spent to pay the interest on our debt. Our children will have no future if we continue to add to the provincial debt in this manner. I repeat for the students who are here: we're going to be paying a million dollars per day interest on the debt. If we continue to add to our provincial debt, that interest is going to increase, and there will be no future for our children. They'll go to work to pay the debts that we've incurred.

Responsibility to the future demands that we refrain from spending, even when we might otherwise want to, and that we invest in our future growth. We must be at once bold, measured, original and timely, within the confines of the information and money available. This government has taken what I believe to be firm and positive steps toward providing all British Columbians with a future they will benefit from and look forward to.

Part of the future will be the result of the upcoming Expo 86 in the city of Vancouver, in which I take deep pride. Already 35 countries have committed themselves to a pavilion at Expo 86. Most recently Japan and Switzerland have joined these ranks. Each of these countries, innovators in transportation and communications, one in Europe and one in Asia, see the value of Expo, and the value of British Columbia not just as a market for their own products but also as a secure and important place to invest.

Fifteen companies have signed with Expo, the most recent being General Motors, which will be building a $7.2 million pavilion complete with a theatre and a display area. Pacific Western Brewing of Prince George have just come on and signed an agreement to be the official suppliers of beer to Expo. It is very interesting that a provincial company out of Prince George is taking on that. They will be spending $1 million to do this. We welcome the international and corporate guests, as do the 72 community committees which have been formed throughout the province and are planning special events and visits in conjunction with Expo. They demonstrate better than anything that the spirit of Expo is the spirit of British Columbia.

Mr. Speaker, to give some of our less informed members an idea of the scope and worth of Expo, I would just like to review a few numbers. The provincial government, through the lottery program and other sources, will make $800 million available to Expo during the economic life of the project. That sum will nearly be matched by $700 million from the private sector, for a total investment of approximately $1.5 billion. The return through the economy will far exceed the investment. Approximately $3.7 billion will be generated in the Canadian economy in the form of wages and purchases of goods and services. Of that, $1.34 billion will be in British Columbia. It is well to remember that these figures do not include the benefits in investments, in new jobs created by Expo and in having stimulated a global interest in British Columbia. The jobs generated just by Expo are impressive. I take particular interest in these figures, not just because of their size but because any number could represent some man or woman in my riding of Vancouver–Little Mountain working and supporting themselves and their family. Over all, 63,000 person-years of employment will be created. During its operation, in terms of both direct and spinoff jobs, 13,800 people will be working on the Expo site and 21,000 people will be working off the Expo site.

I would like to mention that Expo has proven conclusively that all British Columbian workers can work side by side in harmony and productivity. There are very few projects of this size in the world that have enjoyed the solid and stable working relationship that Expo has. Expo exemplifies a spirit of cooperative labour relations which will guide our province in years ahead.

[Mr. Strachan in the chair.]

Mr. Speaker, I could go on about the benefits of Expo, but I want to stress one thing. It's going to be a heck of a lot of a good old-fashioned fun. It will be exciting to see; it will be even more exciting to participate in. We will all learn from the exhibits. We will all enjoy meeting people from around the world and, I must confess, sampling many of their cuisines. Even in something as basic as food, we British Columbians have a great deal to learn if we are going to remain competitive in developing our agriculture industry. I am reminded of a story that the Minister of Agriculture (Hon. Mr. Schroeder) recently told, that our sales of apples to the Chinese market picked up considerably once it was realized that to them the perfect apple is striped and long, rather than our own British Columbia idea of a perfect apple being red, round and large. The Pacific Rim agricultural show at Expo 86 will be a perfect opportunity to learn such similar ideas important bits of information.

The experience of new people, new ideas and new advances in communication and transportation will teach us something about the world and about ourselves. I hope particularly that the people of British Columbia and Canada will learn more from the example of one young man, Rick Hansen, who will be coming to Expo when he returns to Canada as part of his journey around the world. Mr. Hansen, a paraplegic, has a dream. His dream is to wheel around the

[ Page 5356 ]

world, 27,000 miles, and with it he will leave a legacy. The legacy will be left twofold: firstly, in the awareness of the needs of the disabled throughout the world; and, secondly, he will exemplify the programs that are available in British Columbia for a seriously disabled person to achieve what he will be doing on behalf of British Columbians and on behalf of Canadians.

He will be leaving on March 21 at 9 o'clock from Oakridge Shopping Centre. He will be traveling through 11 states of the United States — Washington, Oregon, down the coast and over to Florida, touching 11 states. He will then go to Ireland, Scotland, England, France, Belgium, Netherlands, West Germany, Denmark, Sweden, Norway, Finland, the U.S.S.R., Poland, East Germany, Czechoslovakia, Austria, Switzerland, France, Spain, Portugal, Gibraltar, Morocco, Algeria, France, Monaco, Italy, Yugoslavia, Greece, Jordan, Israel, Kuwait, Singapore, New Zealand, Australia, Hong Kong, Japan, Korea, China and Taiwan, returning to the United States, where he will go through 17 more states starting with Hawaii, back to Florida and up the eastern coast, leaving Maine and entering British Columbia. He'll have gone through 34 countries and over 100 major cities.

He will come back to Expo 86 in September after traveling across Canada through our ten provinces. He will bring, again, a ray of hope to all the disabled in the world, and leave a legacy in dollars for spinal-cord research and also bring a legacy of rehabilitation.

Our permanent benefit to Expo will be to provide for making Vancouver a permanent city for conventions not only in North America but throughout the world. Already conventions have a strong impact on the Vancouver economy. The president of the Greater Vancouver Convention and Visitors Bureau, Mr. Art Jones, estimates that in 1984, conventions contributed approximately $100 million to the Vancouver economy.

[3:45]

Canada Place will be instrumental in Vancouver emerging into the big leagues of convention cities. At present, our largest facility in Vancouver can accommodate 1,200 participants. With Canada Place that number will climb to 6,000 persons. It will provide Vancouver with a range and flexibility met by only a handful of North American cities. The Trade and Convention Centre at Canada Place holds particular promise. The investment of $144 million by the federal government and $50 million by Tokyu Canada in their hotel is a clear demonstration of the faith in the future not only in Vancouver but in the whole province.

The federal government contribution to the total project at Canada Place will be over $250 million. This is indicative of the growth links between British Columbia's economy and that of the Pacific Rim trading partners. When we look at what the provincial government has done for Expo, we look at the moneys they've invested in the city of Vancouver and the lower mainland. The B.C. Place Stadium, $200 million; the ALRT will represent an investment of $1 billion by the time it reaches Surrey; Expo will be $800 million in provincial government dollars. The Annacis bridge will be another $150 million towards bringing people to Expo. The city of Vancouver has contributed $5 million to the Trade and Convention Centre in the form of road access, and it is to be commended for its efforts. But it is to be hoped that the city of Vancouver will continue its interest and efforts to ensure that the centre is run and maintained to its maximum potential.

The benefits to Vancouver as a city will be great. The city of Vancouver will be receiving this fantastic structure free. There will be no capital expenditures for the city of Vancouver, and therefore it must be the responsibility of the city of Vancouver to show aggressive leadership, particularly from our mayor Michael Harcourt, to bring forward a task force of the hotel industry, the restaurant industry, the trade and convention centre business and the chambers of commerce. The first ministers should be available. The mayors and councils of the lower mainland should be on the task force. I only wish that the first and second members for Vancouver Centre were here to listen to the problems that we're having in the city of Vancouver. No one wants to take over the leadership of the convention centre; no one has come forward to run the convention centre. We are already losing many of the conventions that this centre can hold. Last week we lost a large one from Texas. Unless the city of Vancouver comes forward and shows some leadership in running and maintaining this potentially great investment for the citizens in terms of jobs and money, and the many industries I mentioned — the restaurant industry, the hospitality industry, the taxi industry — we are going to have a very difficult time with a convention centre that will not be used.

B.C. Place Stadium is already attracting events which otherwise would not have taken place in Vancouver, and has proven the market. Last year there were 12 trade and convention shows held in B.C. Place Stadium, four of which were brand new to the province. Special events, such as the Michael Jackson concerts and the papal visit have shown the capacity of the stadium. The potential for job creation in the convention and tourist industry is even stronger now that B.C. is regaining its full confidence and asserting its full appeal. Certainly this budget recognizes its potential, as it contains measures dealing with hotel room tax relief, it also provides a stimulus to the fishing industry and to the recreational boating industry through a tax reduction on marine fuels, aviation fuels and bunker fuels — used by our larger vessels — from 20 percent to 7 percent.

We should nonetheless remember that B.C. continues to create jobs. From December 1983 to December 1984, 20,000 new jobs were created in British Columbia. No other western province created more. From February 1984 to February 1985, 29,000 new jobs were created in British Columbia. Manitoba, for instance, in that period of time created only 5,000. Indeed, in the last three months British Columbia has led all other Canadian provinces in its job creation rate. It is on a rise. We heard this morning from two agencies that they are getting continual requests for job placements.

This is not to deny that too much unemployment still exists in our province. As long as there is one person who wants work but can't find it, there is too much unemployment. However, we must remember that B.C.'s population continues to grow, not only through our own birth rate but also through migration into the province from other provinces.

Mr. Speaker, I beg your indulgence to present some more statistics which our colleagues may be unfamiliar with. From 1980 to 1984 approximately 77,000 people immigrated to British Columbia. In comparison, 16,000 left Manitoba. Many of those former Manitobans have ended up in British Columbia. I can't say that I blame them. We have the climate, we have the greatest potential to create jobs and we have a strong belief in our future. Yet there is no doubt that when people move to B.C. they look for work, and in many cases

[ Page 5357 ]

enrol in our exemplary social programs. After a little figuring, I'm willing to suggest that had B.C. not experienced the immigration that it has had in the last five years, our employment rate would be a full two points lower.

But that aside, Canada is a free country, and B. C. is a free province. We welcome people to B.C., because we believe in the power of the individual, no matter what their origin. B.C. cannot be great if it does not grow. That is the message I hope our colleagues here will appreciate. Growth requires strong commitment, both to be responsible to the future and to invest in the future, whether it be in tourism, the convention industry, northeast coal or aquaculture. This government has shown its commitment in this budget. That is why I do not hesitate to join with my colleagues in supporting this budget. I call upon the people of British Columbia to do the same.

MRS. WALLACE: I was going to remind the House that we were discussing an amendment, because that didn't seem to be very noticeable in some of the speeches that I've been listening to lately.

I couldn't help but think, as the last member was speaking and as he was talking about the $800 million that they were going to get in from the lotteries, that perhaps this government might be termed the "lottery and liquor" government, because they are certainly getting a major portion of their income from lotteries and liquor sales. It's interesting to note that liquor sales are forecast to be some $390 million, which is well over twice the amount that they expect to get from our forest and resource industry. That's a shocking figure, when we have historically been a resource-based province and forestry has certainly been our number one resource, to find that while we get $154 million in estimated return from forestry, we are proposing to take in $390 million from liquor sales and $800 million from lotteries. It indicates to me there's something radically wrong with what's been going on in our forest industry.

When the Minister of Forests introduced his five-year forest program — a milestone in the history of forest management in B.C., as he indicated — back in 1980, he said the objectives of the province were "to realize the maximum contribution of available forest and range resources, now and in the future, towards the social and economic well-being of British Columbia." Certainly the Forest Act indicates that when the minister grants a tree-farm licence and holds a public hearing, the first thing he has to look at is the

"... potential for (a) creating and maintaining employment opportunities and other social benefits in the province, (b) providing for the management and utilization of Crown timber, (c) furthering the development objectives of the Crown, (d) meeting the objectives of the Crown in respect of environmental quality and the management of water fisheries and wildlife resources, and (e) contributing to Crown revenues."

Well, it hasn't been happening. Certainly the employment figures indicate that — or the unemployment figures. Nearly half a million people are out of work in British Columbia, out of a 2.7 million population. If you add all the UIC recipients and the social assistance recipients together, those are the kinds of figures that you come up with.

There was recently undertaken in my own constituency an economic review, with the aid of a federal grant, of the situation in Cowichan-Malahat. They came up with some startling figures. What appears to be the case in Cowichan-Malahat, which is a forest-based community, is that we have a population of approximately 45,000. In their study, they found something like 7,000 people out of work — employable people either in receipt of UIC or social assistance, or in receipt of nothing if they've fallen through the cracks. The average family size in Cowichan is three people, so if you multiply that 7,000 by three, you have 21,000 people out of 45,000 people dependent on either UIC or social assistance. That's close to 50 percent.

I was in Lake Cowichan last weekend. You will recall that Lake Cowichan has had one mill closed. There's been a great curtailment in the logging industry as a result of one of the companies moving out of the area. Now the last existing mill, B.C. Forest Products, which has already put in an automatic greenchain which put some 50 or 60 people out of work.... I'm not knocking that, because nobody wants to work on the greenchain, but those are the kinds of things that happen when you get those improvements. They also took out their veneer and moved it to Victoria.

Now 47 more employees have received their notice and will be through there, finished work, on March 22 — over, out. Another 11 will be going June 15. It's expected that a further 19 will be getting a further notice. And B.C. Forest Products is saying: "No, we don't really intend to close down. We're going to do everything we can to prevent that."

[4:00]

If ever there was need for a government-sponsored silviculture program in the Cowichan Valley, it is now. What we've been doing in the way of reforestation.... The government will tell you that they've improved; they're now planting one hectare for every two that are logged, instead of one for every three. But that's disgraceful. We're not even keeping up and we're doing nothing to catch up on the 1.2 million hectares that are insufficiently restocked; yet this government sits on its hands. While every other province has been successful in negotiating agreements with the federal government under ERDA, this province has not. Today in question period the Minister of Finance gave a very evasive answer as to what was going on there, but he admitted in his budget that that was the case.

If we are to realize the maximum contribution from our forest industry, then certainly we must move to ensure that we do just that. Ninety-five percent of the timber resources in this province are owned by the Crown, and they're made available for use by the private sector. The quantity of land that is let out under tree-farm licences is startling. I know we cannot use charts or demonstrations, but I have in my hand a map that the minister put out which indicates the number of tree-farm licences issued in this province in 1981-82. It is amazing, the amount of our forest land that has been turned over, almost in its entirety, to the private sector, because once you issue a tree-farm licence, you as the owner of that property, lose control. The control goes to the private operator.

There are many other forms of acquiring timber — the timber licence, forest licence, woodlot; lots of other ways of doing it. But this government, in its wisdom, has seen fit to expand the tree-farm licence. We inherited some of those. Back in 1906 it was the only method that the government of the day found available to get any kind of control over the lands that had previously just been tossed away. Through the years we have gone on issuing those long-term tenures, which are either in perpetuity or else almost automatically renewable, and we have begun to turn over more and more of

[ Page 5358 ]

that Crown land to the private sector under that very firm and secure type of tenure.

At the present time about 28 percent of our annual allowable cut is controlled by the holders of tree-farm licences. But this minister is presently looking at 45 applications from holders of forest licences or timber licences to extend the amount of timber — the number of hectares — in their treefarm licences. If all of those applications are accepted — and there's no reason to think they won't be — it will mean that 56 percent of our annual allowable cut is in the hands of the private sector. That means we are losing control.

If you have occasion to check into those tree-farm licences, they're very interesting documents. I had occasion some months ago when another of our mills was closing — that was the Chemainus Mac and Blo mill — to check into the tree-farm licences, and it's very interesting. The original document is still the licence, and all the changes are just little notes and appendages attached to those licences. They seem to go on and on forever, with a million little changes here and there. Basically the principle is still the same as when that licence was first issued. The case in point was the Chemainus mill and the Mac-Blo tree-farm licence there. The old original licence had indicated.... There is a provision in those tree-farm licences to ensure that what they cut out of those tree-farm licences must be processed. When that licence was drafted way back when, it referred to the fact that they must maintain a processing plant at Powell River. You will recall, Mr. Speaker, that it used to be MacMillan Bloedel in Powell River. Of course that has changed completely. There are many other processing plants. All that was done when the licence was renewed was that they dropped the words "Powell River." It simply read that they would maintain processing plants — completely open-ended. That's just one example of the kinds of things that happen.

Another example occurred with Crown Forest Industries. They used to have tree-farm licence No. 47 up on the north coast, which had some provisions that the government could sell the mature timber in that site to other holders if Crown didn't take it out. This minister, in his wisdom, saw fit to roll that over and issue No. 47 — a combination of old No. 2 and old No. 12 under that provision — and simply left that out, because it had supposedly expired.

Again it seems to me that the Ministry of Forests is still involved and is moving in the direction of trying to privatize our forest land almost completely. If we can move from 26 percent to 56 percent in a matter of a few months, we can certainly assume that that is the direction he's proposing to go.

The recently completed operation with Canfor Corp. or Westcan; it has a different name now — is an example of how wrong that is. When you create a tree farm, you create a single use, a single purpose: it becomes forestry. The licence that has just been completed with Canfor.... I'm not sure if it's Westcan. I'll call it Canfor, because that's what they were calling it at the time it was completed. Thirty-two percent of that area covered by the application was productive forest land; the remaining 68 percent is high-site land for wildlife and agriculture. You will not have the concept of multiple land-use working if you are going to alienate that land to a single use under a tree-farm licence. That is exactly what is happening.

My colleague for Vancouver East pointed out some of the problems that have occurred in the past relative to accurate scaling and getting an accurate return for our forest resource. I think that is just one example.

The Minister of Forests was quoted in the House the other day in a report of an interview that he had held in your town, Mr. Speaker, saying that there was no competition, so we might as well just turn it over to the private sector. The reason there's no competition is the fact that that minister is not prepared to use the powers he has under the Forest Act. He is not prepared to move in the direction of protecting the interests of the Crown in this resource. That move, of course, means that the small enterprise in the forest industry, the small operators who want their opportunity to make a living and employ people and operate in this province, are being denied that opportunity. Any productive forest land is being alienated into the single-use purpose under the tree-farm licence and under the control of the major operators. Certainly I'm concerned about that, as are all our caucus, because this is not the route to go. The small regional operations are the best users of the resource. We don't have the loss of return from the small operator that we do with the big operator, and I think that has been proven over and over. For that reason, if no other, we should not be continuing to expand those tree-farm licences.

Certainly we have seen a move to privatize not just the land but the whole operation of the forest industry. We have seen this government move in the direction of not only giving that land, the operation of that land and the control of that land to the forest company, but then saying to them: "You can police what you do." Rather than sending people — Crown employees — whose interest and purpose for being there is to represent us as the owners of that resource, what we have said to those companies is: "You go ahead. You hire somebody to do that, and we'll take their word for it." That is certainly one of the reasons why we're in the situation that we're in today, with such a low return from our forest resource.

We're now looking at proposals where we're going to go even further. We're going to say to those companies: "Look, not only can you decide how you're going to manage this and police the management, but we're also going to let you tell us how much timber you're taking out. We're not going to bother to come in, review and check this out. We're going to let you tell us what you take out."

If ever there was an example of sending the fox to watch the chickens, this is it. And this is it in our one basic resource — our most valuable asset — in this province. Here where we have some 50 percent of the total forest industry in Canada, we're saying to ten major operations: "You take it. You manage it. You tell us how much you've cut. You tell us what your expenses are, and if there's anything left over you could send us a cheque." In some instances, they say: "Sorry, there's none left over. You owe us something." That has happened.

[4:15]

That's what we are doing with our resource, and I think it is shameful that this government has taken such an attitude toward the forest industry. It has been one of the major employers of people, and it will continue to be our most valuable asset. It's not a dying industry; it is going to continue. If the government managed it properly, and if the government was committed to getting a fair return from the resource for the taxpayers of this province, instead of being committed to doing all they can to line the pockets of the corporations managing that resource, we would see a far better return and a far better managed forest. We would see a

[ Page 5359 ]

commitment to ensure that the people of British Columbia continued to enjoy jobs in the forest industry, and to ensure that we continued to process our product, rather than shipping out raw logs.

We've seen the export of raw logs doubled and trebled from other years, with the blessing of this minister. We've seen him back off.... You know, when there's an election on, it makes a difference, Mr. Speaker. When there's an election on, he has a big stick and he tells MacMillan Bloedel, in the Chemainus situation: "Use it or lose it. If you don't build a mill here I'm going to take away some of your timber cutting rights." But that all faded out once the election was over. Of course, eventually MacMillan Bloedel did build a small mill in there, which is operating with about 150 people, compared to the 600 before.

What is happening to those 600? They are some of the people who are sitting on the welfare and UIC rolls in Cowichan, making up that 50 percent of our total population, that are.... Two terrible things have happened as a result of this. One is the social cost to those families — the discouragement and the lack of opportunity for the young people. It's a very sad thing to have a man who has worked all his life and supported his family come into my constituency office and say: "You know, I'm out of UIC. What am I going to do?" I say: "Look, you're going to have to go down and apply for social assistance." He doesn't want to do that. He wants to work. He feels unwanted, unneeded, and that rubs off on the family, on the wife, on the children. It works both ways; we have women in the same situation.

It becomes debilitating, and the social costs are high, but also the loss of productivity. For every person on unemployment, we're losing something like $4,000 a year in productivity returned to the gross provincial product. It's not necessary. If this government had a different set of priorities we would see that there were jobs for those people in the forest industry. You have to take a long view, because if we now undertake the silviculture programs that the professional foresters have been telling us for many years are needed, we will have trees for the future, we will have jobs for the future, and we will have income to the Crown in the future, if there's any way we can stop this minister and this government from giving away in perpetuity that forest resource.

We must try and turn that around. We must try to ensure that we, the owners of that resource, keep control of it. At the very worst, if we alienate land into a tree-farm licence, then at least we live by the terms of the Forest Act and ensure that the corporations who have those tree-farm licences carry out the principles under which they have been granted, including creating and maintaining employment opportunities and social benefits in the province, providing for the management and utilization of Crown timber, furthering the development objectives of the Crown, meeting the objectives of the Crown in respect of environmental quality and the management of water, fisheries and wildlife resources, and contributing to Crown revenues.

Those things are not happening. They are simply being ignored. The companies are being given carte blanche to mine our timber, not to forest it. Those programs, Mr. Speaker, should be in place. They have been ignored in the past. The minister has run and hidden and let the companies do as they please. He's not only privatized the land; he's privatized the foresters, he's planning to privatize the scalers, and he's planning to write collusion into law. If there is bidding involved on a piece of timber, the act says very specifically that there should be no prearrangements, that there shall be no agreements that one company will fail to bid on this one and the other one will bid on that one. Now the minister is saying — and he's doing this because he's been letting it happen and it's become a precedent — that it's okay to do that as long as the regional forester knows about it. That's collusion, and that's being sponsored and pushed and advocated by the minister responsible for our forests in this province. It's a disgrace.

[Mr. Ree in the chair. ]

MR. R. FRASER: I rise to speak against the amendment and therefore for the budget. I can tell you there's nothing that makes people go in this province better than listening to those who cry that the world is coming to an end. This is not the way this province was built. These are not the kind of people who are going to get us out of the difficulties that we're facing because of our special circumstances here.

I want to thank the Minister of Finance for coming down with this great budget that's going to give businesses a chance to hire people. It is not a business budget, Mr. Speaker, it's a people budget. They are not megaprojects we're talking about, they are people projects. People work on them; people make money on them. That's how they pay their rent. And the interesting thing about the people who built this great country, Mr. Speaker, is that they were self-reliant. They didn't rely on governments in the old days in the beginning of the country, because there wasn't one, really. So they learned to rely on themselves and on their neighbours, and they could count on them for help if it was needed. If it wasn't needed, they didn't ask. We really have to come to the point pretty soon where everybody stops looking to the government for money, for a handout or for an idea, and starts to solve some of their own problems.

We heard yesterday the suggestion that the moly battery was an accident. It was no accident. It was designed on purpose, on the theory that it could be done, and it was done. But the most significant thing, I suspect, with that battery is not that the university physics professor found out how to make such a battery work, but that he found out how difficult it is to get research off the shelf and into the marketplace. It wasn't until he hooked up with an expert in that field that, in fact, the battery came to life in the real sense of the word.

It's the people who can make things happen that we need; we don't need the tears of the crocodiles coming down upon us, Mr. Speaker. We need people to dig in and get going, and all I hear from the other side is cry, cry, cry that it's over; and it's not over. Every opportunity is there, you just have to find it. You can't just wait for it to fall on your lap. You've got to look, and that's what we're talking about.

I was so delighted when the Minister of Municipal Affairs (Hon. Mr. Ritchie) came out with a partnership deal for the municipalities. I'll tell you why I was delighted about that. Because a man that I happened to know on a casual basis told me he was building two plants. One he was building in a lower mainland municipality, and one he was building in the United States. And guess where he got the best reception. Not here, not in the past; for sure not here. Good heavens, all the hurdles the poor man had to go through finally to build the plant were unbelievable. The frustration level was incredible, and he got so frustrated trying to create a job opportunity for the people in the lower mainland, and he damn well couldn't do it. He finally did it because he's got drive and incentive.

[ Page 5360 ]

He's the kind of person that makes the country grow, and we need more of those people.

On the other hand, when he went down to the States, he found that he was received enthusiastically by the community he went to down there. They said: "Welcome to our town. Do you need any financing? The local merchants and farmers here will each put up a certain amount of cash, and we'll help you. Can we help you with the road? By the way, we have a stable labour force here. We have a bunch of people who want to work here, really want to work, and we're going to help you." And he built the plant down there. As a matter of fact, it wouldn't surprise me if he had moved, because I haven't seen him for quite a while.

We really want to get the message through to the municipal governments that in fact it is an advantage to have job creation opportunities in the community, Mr. Speaker. It is so important to make them think that if they don't get the plant in their neighbourhood, somebody else will get it in theirs, and away goes their tax base. What a wonderful opportunity to have extra taxes to provide the extra services that people really want. I think it's terrific.

You know, in the city of Vancouver we have a planning department that is so difficult to deal with that you can't even talk about it. They're afraid to talk about the planners in the city of Vancouver. I've tried to arrange meetings with reputable people in the city to talk about that department with the elected people there and, by God, they won't meet with them. They just won't, because they're afraid of retribution. I don't think that's healthy.

I would certainly like the mayor of our great city — it is great — to come down with some decisions with respect to where he wants the city to go. He hasn't done anything yet.

AN HON. MEMBER: He likes our programs.

MR. R. FRASER: Oh, he likes our programs. Gee, I'm not surprised; he couldn't think of one for himself. Good heavens, you know, he won't do anything in the city, but he wants to take a delegation to the Orient. Well, maybe we should get him a one-way ticket or something. Good gracious, it would be cheaper in the long run probably.

There are things in the city that are so important. We're so lucky to live there. The long history of good councils and parks boards that we had in the city of Vancouver that kept the open space, which some councils in the recent days have given away, which is goofy.... We have to have a place for the kids to play. We have to have a little better effort, a little more thought; we have to have municipal districts and city councils that will actually work and stay working and get something done. It's so easy to be popular, to go to all the meetings and have all the fun, but for heaven's sake, make a tough decision and what happens to you? Oh, the world is coming to an end, Mr. Speaker. Good God!

[4:30]

Interjection.

MR. R. FRASER: The member over there is complaining that we haven't signed the ERDA agreement. Well, we hear it's going to be signed. Is it a problem whether it's today or yesterday? It's coming, it's coming, and you'll be delighted. The Premier asked you over there to get your federal members to help, and I haven't heard anything over there except the cries: "It can't be done, it can't be done."

Mr. Speaker, it can be done. I speak against the amendment on exactly this basis. Then somebody else says we shouldn't export logs. Well, I can tell you, the people in my riding who have mills want some of those logs to get exported, because that provides the cash flow that keeps the company alive that keeps the existing employees on the payroll. That's why those things are done. Sure we'd like to mill them all here — and we will. But in the meantime don't drive every business in the lower mainland, the interior and the up-coast area out of business.

MR. LOCKSTEAD: You're driving them out of business.

MR. R. FRASER: If you'll come to your senses, Mr. Member over there — which will be a big job, I know — you can help. I don't want to hear any more about problems. Good gosh, we need solutions, and you actually could help, you know. You're that kind of a member.

We hear about education. Gosh, I'm in a city that has a very big and powerful school board, and a much bigger head office for the B.C. Teachers' Federation — an enormous lobby group. I know a fair bit about education, because it happens to be a subject close to my heart. I spend time in those schools in the riding, and I spend time in schools outside the riding. I can tell you that the difference between schools is related directly to the attitude of the principal in charge of the school. If he feels positive, his mood goes to the teachers, that mood goes to the children and the children go home. We've got a great school system in Vancouver, for sure. That I know. It wouldn't surprise me that we have it all over the rest of the province. On the other hand, I'm getting complaints from parents whose children go to schools outside my riding, and they're saying: "My children are coming home saying, 'I can't have this because the government won't let me have it."' So I talk to that principal, and I say to him: "Has there ever been a time when the school board has had all the money it would like to have?" And he said: "No, there never has been and there never will be." "In that case, " I said, "why is it then that the children from this school are complaining to their parents that it's the government? It's you. It's your attitude. It's you that's not helping."

You know, the kids are ingenious. They like to use their imaginations. Anybody in the room who has ever had children will tell you that five minutes after the toy is out of the box on Christmas Day the children are playing with the box, because they can use their imaginations. There are lots of things to do in the schools besides complain that the government is not giving you the money. The government is providing the money. There's lots of money out there for the schools.

It's just incredible. The city of Vancouver.... We heard from over there a suggestion that the ESL budget was racist. Well, I was in a school in my riding one day. I wrote a number on the board and....

Interjection.

MR. R. FRASER: Yes, they have blackboards, and you could learn something, Mr. Member.

I wrote a number — 30,000,000 — on the board. I asked the children to describe that number. One of them said: "It's a big number." Another said: "It's a small number." They weren't quite sure what I was trying to get at. I said: "Is it a

[ Page 5361 ]

female or a male number?" No, a number does not have gender. "Well, is it a Chinese number, a Greek number, an Anglo-Saxon number?" They said: "No, no. A number does not have race." I said: "That's the point I'm trying to make." I hear people in our district saying it's a racist budget for ESL. Mr. Speaker, I would doubt there is any other jurisdiction in the world that commits a bigger percentage of a school board budget to immigrants coming from another country than here: $30 million annually — or very close — in the city of Vancouver alone. That's for 9,000 students who want to become Canadians and who have communication problems, and for 1,100 students who have difficulty communicating at all, out of a population of some 46,000 to 47,000 students — out of a budget of about $150 million. That's 20 percent of the budget to new Canadians. I suggest to you that that's a commitment of faith in people who come here. Come here and feel welcome, Come here and become Canadians. Come here and retain some of your ethnic history and your ethnic culture. But you are Canadians first, and always first. That's the way it has to be.

We've all read, I guess, the book In Search of Excellence. We find that in times of difficulty there are businesses out there who innovate. Because they innovate, and because they think about what the customer wants, they succeed. That doesn't sound too amazing, does it? They think about what's out there. They address the problem at hand, and then they solve it. That's what I call the Canadian spirit. Those two fine people that I introduced today, 85 years of age, who never stopped working, never stopped giving to the community, they were never wealthy. They never stopped being part of society. Never a tear. All through the Depression, all through the hard times, it was work, work, work. Get at it. Get your shoulder to the wheel, for crying out loud! That's what we have to do now.

AN HON. MEMBER: You have to have a wheel.

MR. R. FRASER: You have to supply me with a wheel. You have to figure out an answer for me. Help me! What is my problem? You've got a brain. We want the kids to go to school to learn how to think, not to give them everything. Turn the brains on. How do you think?

I was at a meeting in my city, outside my riding, and the then chairman of the Vancouver School Board said: "I've been on the school board for almost ten years. All we ever did was add programs and costs. I said to my fellow board members, 'If we don't address the problem of re-evaluating some of our old-fashioned programs, someday Victoria will have to do it for us.' Look what happened."

All we're asking the boards to do, anywhere in the province, is to make it work, to think about being positive. We don't have to supply everything to the kids. We can supply lots and lots of good basic education. In the schools I go to where the principal is positive, the attitude is wonderful. The kids are having a great time. They put on great concerts, they work hard in school. The kids have never worked harder. I've got a lot of faith in those kids. They can make it. A lot of people here had a tough time for one reason or another at a given time in their lives. Do you cry to the government? No. You try to solve your problem. If you need a hand and you're in big trouble, I'll help you. But if you can solve your own problem, go to it. Gosh, there's no other way.

I could go through, page by page, document by document, about people who are getting old-fashioned — some who are winning and some who are losing. I happen to have a company that has a collective agreement with a trade union, and guess what? It works very well. It works well because that union knows it has to survive, and it's not surviving by being pig-headed. That very union has gone in to companies in the Vancouver area and told every man and woman working there to take a salary reduction to save the business and save their jobs. That seems to me to make a lot of sense. The unions that survive are going to be just like the businesses that survive, not the dinosaurs of the world. It's going to be the unions that can think and can help their members, who can think about what it is we're trying to do. My union people tell me that they don't want my company to go bankrupt. Gee, I share that feeling. I don't want to go bankrupt either. But they understand that the business has to make some money. That's why I speak against the amendment.

We've organized tours in Vancouver South into the plywood mills and the sawmills, and where we have union and management representatives we've found that sometime during the course of the tour the management side and the union side will both come up to you and say: "Yes, it's true. At the bargaining session we'll beat our brains out, but once the deal is made we're working together because we know that this company has to make a profit." Profit — it's a lovely word. You have to have it. Everybody who knows anything knows it has to be there. Those people working in the businesses I spoke of a minute ago know that. They're not doing all kinds of silly things, like trying to wreck the business or the gear. They're trying to make that business profitable. After all, Mr. Speaker, a business is only the people there.

As recently as the late seventies a couple of people here started Thrifty's food store. We're in tough times, right? Nothing can be done, right? No solutions, right? That's wrong. Two people started a little store and now they have four stores employing 200 people, with a payroll of $3 million and sales of $30 million in 1984. They had an idea and they made it work. There are people who have had far more difficult problems to solve than we do, and they didn't stand up and cry about yesterday. They looked at tomorrow, There is no other way.

I've been in business long enough to know that if I'd known what I know now I wouldn't have done it. But it's been fun, I'll tell you — the great response you get from people when you're fair and straight. Sure, I like to pay our people as much as I can. I'd like to pay them more. But if it isn't there and they know it, they're not going to ask; they're not dumb. I'm here to tell you that there are thousands and thousands of people in the workforce who aren't dumb — they're smart. They understand the reality of the company making a profit on every single sale.

Now I get back to that wonderful organization, the BCTF, which was once the proud professional group of the teachers and is now the proud union of the teachers. I must say I regret it. I can hardly believe the things that that organization does in the name of the teachers they represent, who are obliged by law to be members — which makes me wonder, Mr. Speaker: obliged by law to do things that can't be in their conscience. I know too many teachers. I understand them better than the BCTF, in my view. There can't be 27,000 teachers in the province who want to boycott Eaton's. There can't be whatever number of teachers at UVic who want to make a contribution so that CUPE can boycott Eaton's.

I remember going years ago to the B.C. Ferries. If there hadn't been a secondary picket line there I would have

[ Page 5362 ]

wondered what the crowd was all about, but there was. I can recall being infuriated. This was the same union that had organized my own business, and I wrote to the head of the union and said: "Look, you and the company you're fighting are bigger than me. You're big enough to fight in your own yard; go and fight there." Guess what? I haven't seen them do it since, and I hope I had something to do with that.

Solve your problems on your own time and in your own space. People can do that. Here is the BCGEU: "' Our union feels the LRB should assist workers to join unions, not hinder them from doing so,' Richards says." The Labour Relations Board is not here to help people join the union or to get out of the union. The Labour Relations Board is here to make sure the wishes of the workers — not the leaders, not the management, the workers — are understood and adhered to. That's what it's all about. We're not setting up these organizations to help people get into a union. We're here to help them do what they wish to do. Gosh, it can't be any simpler than that, Mr. Speaker.

In search of excellence, making people think positively and productively and hopefully and wishfully. As my friend from Dewdney will tell you and maybe has already, the song "Look For the Silver Lining" was written in the bottom of the Depression when there wasn't any hope, I guess; there couldn't have been much. But somebody thought there was hope. Somebody thought there had to be a way, and there was. Everybody just worked a little harder and tried a little harder and created a little more, took a little less like we're all doing.

[4:45]

MRS. WALLACE: And a war.

MR. R. FRASER: There was a war, sure, but I'm certain it wasn't invented to get over the Depression. What a stupid remark. I'm disappointed in that speaker. Of course there was a war. It wasn't invented to solve the Depression. The Depression would have been solved anyway by the will of the people, Mr. Speaker, and that's really it.

We know, Mr. Speaker, that this province is dependent on exports; everybody knows that. The world is much smaller today. There are more people supplying products today. We don't have an exclusive any more. It was nice when we had it; it was terrific when we had it; but we don't have it any more. We have to think in a slightly bigger picture. There's no doubt about that. We have to get a world perspective.

I said a minute ago that I have a lot of faith in the seniors of this country. I've met a lot of them. I like them. They've got a great attitude. They've made it by working and by thinking and by planning, and even the students — who surprise me sometimes by suggesting that they should have a stockpile of cyanide pills at the university in the event of a nuclear attack — give me that good feeling when I find out that they vote against that sort of thing. Can you believe anybody at that age, with that opportunity, going to a post-secondary school at great public expense, not being hopeful and not being wishful?

No, Mr. Speaker. We'll come out of it, and we'll come out of it faster if we all work together. I would like the other side to think about getting in touch with their federal members so that some of the things B.C. should have will come to pass, and I hope they do. I'm doing my share, and I ask others to do theirs.

[Mr. Strachan in the chair.]

MR. LOCKSTEAD: Mr. Speaker, before I launch into my few brief remarks, I've listened carefully to the presentations made by the government members in the House.

MR. VEITCH: Do you agree with them?

MR. LOCKSTEAD: No, I don't agree with them, Mr. Member, but I'll tell you that I've never heard such negative speeches in all my life. I would have expected that those members over there would have been defending this nothing budget that was brought into this House a few days ago. But the members over there are still fighting the 1975 election campaign. The New Democratic Party was a marvellous government for three years and three months in this province, out of 118 years since we entered Confederation, and here we are still fighting the 1975 election campaign. It's just ridiculous.

Mr. Speaker, I'm going to address myself primarily to two matters: a short presentation dealing with mining and a bit dealing with the forest industry of this province, and perhaps how it affects my riding. In terms of this amendment, I will be supporting it. It is, in effect, a motion of nonconfidence in this government, and I am going to find it very easy to support this motion. After nine years of lurching from one Social Credit false hope to another, it is impossible to find plans in this budget which are worthy of any real hope of economic improvement.

Ordinary British Colombians are going to have very little to cheer about in this budget. Wage-earners have borne the brunt of the tax increases. Remember, Mr. Speaker, that the Premier told us in his nationwide address, which only went provincewide, that British Columbians would face no new tax increases. Yet in the legislation accompanying the budget speech, quite clearly there are several bills dealing with tax increases for British Colombians. So once again we were not given the full story. There's another term that can be used outside this House, but not in here, so I won't use it. There's no tax relief for "ordinary British Columbians" — the term the Premier uses from time to time.

There's no sign of a let-up in the provincial government's ongoing feud with local authorities. I know that our provincial Premier is now traveling around the province trying to mend fences with municipal governments. I want to take this opportunity to warn every municipal government in this province: watch your back. This partnership deal that the government is talking about is like a partnership deal between an elephant and a mouse. This government has taken unto itself almost full fiscal control of municipal governments and school boards in this province. Any agreement they enter into with this provincial government, I would suggest, should be examined very carefully. When I say "they," I'm talking about the municipalities.

British Columbia now enjoys the distinction of having one of the worst economic records in the industrialized west, and that's a fact. In Australia, the Labour government of Bob Hawke has been extraordinarily successful in cutting inflation and unemployment by avoiding spending cuts and working for a consensus between management and labour. In Sweden, the new Social Democratic government has had similar successes with similar policies, as they have had in the province of Manitoba where we have a good Social Democratic government.

[ Page 5363 ]

HON. MR. PHILLIPS: Do you believe that?

MR. LOCKSTEAD: Yes, I do, Mr. Minister. I do believe that. It's quite obvious. Read your mail. Read the material that crosses your desk every day, and you would know.

I want to talk a bit about the mining industry in this province, and I'm going to be very brief because this material is more properly discussed under debate of the spending estimates. The government is talking about reducing taxes in this budget very significantly to the major industries in this province, and a case may be made for some of those tax cuts. I have met with people in the mining industry — working people, steelworkers, the head of the Mining Association of British Columbia, and the list goes on. But Mr. Enemark from that association is very disappointed in the budget in terms of the lack of relief of the water tax.

Earlier I said in this House that if this government offered genuine incentives in its budget to reopen any one of the 14 of the 29 metal mines in this province, and if there was a fair return of that resource to the people of this province, these tax measures would create new employment, and I would support those measures. I've gone through — unless there's going to be more legislation introduced, and we don't know that — this budget in that regard quite carefully. Based on the criticisms put forward by Mr. Enemark in this regard, it would appear likely that I will not be supporting those measures. What has the government really done?

MR. HANSON: How many are closed?

MR. LOCKSTEAD: Fourteen of the 29 metal mines in this province are now closed. Somewhere between 12,000 and 14,000 people who were previously employed full-time as miners are currently out of work in this province. It's really more than that if you consider the small communities where stores have had to close and people are unemployed. Logan Lake is a good example where people can't afford to move out. They own their homes; they've got nowhere else to go and no other jobs to go to. They're losing their homes. They can't pay their mortgages on UIC — for those who are eligible — and the list goes on.

In any event, I wanted to serve notice to the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. Rogers) that this topic will be raised under his estimates. I would hope, when that member gets up in this House to make his presentation in this budget speech debate, that he, like some of the other ministers — a few of them — have had the courtesy to do, will address himself to some of these matters. Maybe the new czar.... We are creating a new job in British Columbia. One new job will be created out of this budget, and that will be the czar of critical industries for British Columbia. I would suggest right now that mining is a critical industry in British Columbia and that it needs examination, and very badly.

I have previously called for an all-party legislative committee to meet with the mining industry, for that committee be formed in this House as soon as possible, and for that committee to be empowered to travel the province to discuss the problems with the workers and the people and the operators of the mining industry. I know that that proposal will be rejected, but what the heck, at least we're trying. It's something positive. Over there from that side all we get is negative, negative, negative.

Do you know, Mr. Speaker, that not one operating mine in British Columbia shut down between 1972 and 1975. There was not one single mine closure in this province in that period.

There's one other topic that I want to discuss very briefly, because I really want to get into my forest information.

HON. MR. PHILLIPS: You sound like a broken record.

MR. LOCKSTEAD: Yes, but why don't you listen for a change? Why don't you go back to Japan and have another steam bath? In fact, I happen to know you're going. Have two steam baths; have one for me.

HON. MR. PHILLIPS: You sound like a broken record.

MR. LOCKSTEAD: You know, Mr. Speaker, that minister of international trade and travel and development can't even come up with a good one-liner. I'm disappointed.

Interjections.

DEPUTY SPEAKER: Just one moment. I'll ask the House to come to order, and I'll ask the member to address the amendment.

MR. LOCKSTEAD: Another area that I would like the Minister of Energy, Mines and Petroleum Resources to address himself to — because time is running out — is the oil decontrol agreement, which could take place as early as May of this year. This agreement, which has not been signed yet, will produce a most radical change in the way Canadians buy and sell oil here in this nation. Some industry sources speculate that the federal government wanted to wait until April — traditionally a very slow month for crude sales, where potential production of 300,000 barrels of oil a day could go unsold.

Neither government nor industry seems to know the exact full effects of decontrol. The ultimate impact on the consumer is also unclear. Predictions seem limited to educated guesses, because we are not getting the information in this House from that minister in this matter. And it's a serious matter. This could add millions and millions of dollars to the natural gas prices and the cost of fuel oil to consumers in this province — by decontrol. That's really what this whole thing is about.

I'm not going to get into a lot of detail, Mr. Speaker. But I would like the Minister of Energy, Mines and Petroleum Resources, in his presentation, to explain to this House the government policy in regard to the proposed decontrol of petroleum products in this province. That has not been done since that minister took office, as far as I'm aware. If he has explained that policy, it has certainly not been in this Legislature.

[5:00]

Mr. Speaker, I want to discuss briefly some of the effects that the government's forestry policies have had all over the province of British Columbia, and how some of the things that are happening affect my riding.

First, I want to discuss just briefly the availability of timber for small loggers. To give you one example, there is a small independent logger in Bella Coola. He used to employ maybe anywhere from 4 to 15 people, depending on the situation. He has not been able to purchase a single block of

[ Page 5364 ]

timber over the last two years. Consequently, those people who used to be employed by him.... He's going to go broke, probably; he thinks he is if he can't pick up timber. In the meantime, large tenure holders are not fully utilizing their allocation, while small loggers and sawmills are in desperate need of more lumber. Yet the Minister of Forests continues to deny small operators access to this undercut. Jobs, business opportunities and revenues are consequently lost to the people of this province.

But, Mr. Speaker, I think it's scandalous when these large tenure-holders are underutilizing their annual allowable cut, and small operators in many parts of this province can't get a stick of timber. We have the same situation with hand loggers on parts of the coast — and there are quite a large number of those people, who will sometimes work quite independently and sometimes hire a few people as well. Nonetheless, all of these people pay stumpage — and, by the way, a great deal more stumpage than the large forest companies pay, a great deal more per hundred cubic feet. They employ people: revenues to the province, revenues to the Crown. They all pay taxes. They all shop somewhere and spend money if they have it to spend.

Mr. Speaker, I wanted to discuss something else briefly. I know that the minister has denied this in the past, but I can tell you from experience in my riding and on other parts of the coast in British Columbia that I have visited — I'm not that familiar with the interior, although I have visited operations there as well from time to time — that it's.... The ministry — i.e., the minister — is allowing certain companies to get away with logging practices and lost revenues to the Crown, which I really and totally disagree with.

I can give you an example of one operation that I'm very familiar with where timber was left on the ground. And all of this is confirmed by a professional forester and other people in the area — documented by a professional forester. Pictures of the whole operation are in my possession, and I hope to table some of that material during debate of the estimates. Nonetheless, timber was left on the ground to rot for years and years on end. No stumpage, as far as I'm aware — and confirmed by some local forestry officials — was ever collected on that timber. That's one site. This has occurred at other locations which I could name as well, with other companies that I could name too; their names appear in the newspapers quite frequently. But I will name names at the appropriate time.

Interjections.

MR. LOCKSTEAD: Believe it.

The point I'm trying to get at here, Mr. Speaker, is that these kinds of practices: long-butting, logs buried, no stumpage being paid.... I'm not talking about small little operations. I'm talking about millions and millions of board feet and possibly millions of dollars in lost revenues to the Crown at a time when this government is cutting back on education, health and social services and increasing taxes. Here they are letting their friends get away with what I term sheer bloody murder. They are; that's what's happening. So, once again, in the debate on the estimates I intend to get into that matter in some detail.

Mr. Speaker, I want to discuss as well another topic that really is of some concern to a lot of us here in British Columbia; that is, the export of raw logs from this province. I don't know if this topic has been raised, because I haven't been here for every speech, but I think it's worthwhile discussing it here briefly. It is my belief that the present provincial government has purposely adopted a policy that allows for the virtually unrestricted export of raw logs. It is my view that this has resulted in a severe drain of jobs in British Columbia.

Interjection.

MR. LOCKSTEAD: Okay, Mr. Member, I can give you one example. One of the large locals of the IWA — Local 1-217, for example — which had a membership some four years ago of 5,000 members, has been reduced to approximately 3,000 members. A number of operations within their jurisdiction have shut down completely: Bay Lumber, 200 employees; Horne Brothers Shingle, 60; Vancouver Plywood, 375; Crown Forest's Richmond plant, 120; L&K Lumber, 160.... The list goes on and on. That local blames part of the reason for the shutdown of those mills on the almost unrestricted policy of this government to export raw logs, in effect exporting jobs out of this province in the process.

I want to make it clear that a case can be made under certain circumstances — and I don't know if all of my colleagues would agree with me — for the export of raw logs of certain species that we don't use here or that can't be utilized here. But let me give you some figures. In 1976 the province exported, in raw logs, 585,917 cubic metres, which translates into 124,232,000 board feet.

AN HON. MEMBER: One medium-sized sawmill.

MR. LOCKSTEAD: That's right.

Now let's move right up to '83, although I've got the list right from '76 to '84. We can see a steady increase in the export of raw logs over the years. In 1983 the ministry allowed 2,235,126 cubic metres of raw logs to be exported from this province. Last year — you're not going to believe this — the ministry allowed over 3 million cubic metres of raw logs to be exported from this province. Anybody driving down-Island or visiting Bella Coola or many other locations in the province.... I have not driven down-Island from my home in at least the past year when there have not been ships loading raw logs — sometimes two or three ships at a time — in Ladysmith and Cowichan harbours. Raw logs are going out steadily. Three million cubic metres of raw logs would probably keep the largest sawmill — at least a very good sized sawmill — in this province in wood for five years. A good-sized sawmill can employ as many as a thousand people with direct and indirect jobs.

So there we are, exporting jobs in this manner. I object to that. To be fair, as I think so many people have objected to this practice.... Certainly many of the small logging associations that I've talked to object to the practice. They can't get a stick of timber. Some of them are going broke because they can't. They can sell their logs if they can get logs, but they're going broke because they can't get logs, and here we're selling out holus-bolus, basically to Japan, and China is now taking up an increasing part of that market as well.

I wanted to be a bit fair here, so I may as well say that as a result of protests I understand the minister has said that starting in December 1985 the procedures for reviewing the permits to export raw logs will be reviewed. But I expect that with the speed that that minister moves, it would be 1990

[ Page 5365 ]

before he comes back to this House with a decision. In the meantime these practices that I am discussing will continue, in my view.

[Mr. Ree in the chair.]

I haven't discussed silviculture, which is a major item. It's been stated in this House many times that approximately one million hectares of backlog has not been replanted over the last 20 years or so. I have information here from the British Columbia foresters' association which confirms all of the remarks that I am making, and that about half of the areas now being logged are not being replanted at the present time. That's absolutely scandalous.

Silviculture, tree-planting, thinning and site preparation — these kinds of things — are job-intensive. Why couldn't we take 30,000 or 40,000 or 50,000 people.... Let's be modest; let's start with 20,000 this year. Take 20,000 people off welfare or UIC — employable British Columbians — and put them back to work. Look at the benefits: when those people are working they are not a drain on the government's social service rolls. They are earning money, supporting the small businesses in their community, paying taxes to both levels of government. They have the pride of having a job. But the biggest benefit of all is that future generations of people in this province will have trees to log. At the present rate of these areas not being restocked with the appropriate type of trees for that area, it will probably mean the loss of some — I want to be very careful about this figure — 55,000 jobs in the forest industry over the next 20 years,

Mr. Speaker, this government in this budget — and part of the reason I will be supporting the amendment is strictly on that basis — has cut back by $4 million its contribution to mariculture this year. As well, in 1982 it used its $83 million silviculture fund to offset the provincial budget deficit, and since that time eight other special forestry funds have been diverted. And they call themselves good managers over there? It's just incredible to us that the government would be so narrow-minded. Only 3 percent of this year's total provincial budget has been allocated to the Ministry of Forests — 3 measly percent of this whole budget. Yet there will be a billion-dollar deficit. Many of the major industries in this province will be reaping great tax benefits as a result of this budget if the government implements these measures. The major industry in this province, where I think 95,000 people are directly involved and many thousands of others are involved in secondary ways....

So here we have a budget. The government once again has signed no agreement with the federal government at all, as the ministers admit in this House every day. They say: "We're going to pretty soon now." They've had seven months to discuss the issue with the so-called new government in Ottawa. They're not new any more; they're an old government now in Ottawa. I wish people would quit referring to them as the new government, because they're not new.

I see my time is almost up, and I haven't even had a chance to discuss the disgusting figure of $375 million going to the Coquihalla Highway project while my riding gets practically nothing, like many other ridings in the province. I'll have to wait for estimates, but, by George, I do intend to talk about it.

[5:15]

MR. MICHAEL: It's gives me a great deal of pleasure to take my role in the debate today and rise to speak against the amendment and in favour of the original motion to support the budget as brought in by the minister last Thursday. I must congratulate the minister. I congratulate him for taking the time and energy to travel this province, length and breadth, and listen to the hundreds of presentations in the various towns and cities and villages throughout this province. I know in my own community, Mr. Speaker, he spent a full day in Salmon Arm, and he received somewhere in the neighbourhood of 20 presentations. I can say that in listening to the budget being read last Thursday, I was amazed at the number of concerns that he had addressed and, indeed, resolved or gone a long way toward resolving.

I have listened to a lot of media reaction, and I've listened to a lot of debate. I am somewhat amazed at the mix of comments regarding this budget. Some people say that it does nothing for small business, and others say that it does everything for small business but nothing for big business. Others say that there are no job-creation initiatives contained in the budget. I suppose that the opposition and the press have their little games they play, but I am very confident that when I take this budget and its contents back to my constituency, an awful lot of people back there are going to be very happy.

B.C. has gone through a very difficult time, and it's still in a very difficult period in its history. We have a situation internationally where the value of our resources has tumbled. British Columbia is a province that exports somewhere in the vicinity of 80 percent of the raw material production. We depend on those raw materials for our employment to a large degree, and we depend on those dollars to keep the engine turning in British Columbia.

Within our province we have two primary resource industries: the mining industry and the forest industry. Internationally we face competing countries like Sweden, which has intentionally devalued its dollar in the neighbourhood of 45 percent in the last two or three years. We must compete with countries like Chile, which in the last 24 months has witnessed its peso devalued by a full 100 percent. Two years ago the value of the Chilean peso was 74 to the U.S. dollar; today it is 148. We all know what an effect this has on competition in the international marketplace. Lumber prices have fallen an average of about 40 percent as to what they were three short years ago. Copper fell by a full 50 percent in less than 30 months. We can listen to all the comments and criticism of the opposition, but I would like to know what the provincial government could have done to counteract those enormous drops in the value of the Chilean peso and the Swedish krona, as compared to the 8 percent drop of the Canadian dollar. Those other countries are able to compete in those particular areas much more aggressively than British Columbia is able to do. Thus, we are in a difficult period.

It's very interesting to go back five years and look at the migration figures from province to province in western Canada. If I take the figures from 1980 to 1984, I find that in those five years Manitoba lost an average of 3,023 persons per year in migration outflow. In that same period Saskatchewan had an average inflow of 622 people per year from other provinces. It's very interesting to look at the migration figures for the period when the NDP was ousted from Saskatchewan and the Conservatives elected, which was in early 1982. In 1980-81 they had a negative growth — very close to 5,000 people leaving the province. Since the

[ Page 5366 ]

election of the Conservatives, Saskatchewan has had a growth of somewhere in the neighbourhood of 8,000 people.

Looking at British Columbia for those same five years, bearing in mind that Manitoba had a loss of 3,023 people, British Columbia had an average inflow from other provinces of 15,466 people each year. I suppose that if I was unemployed and living in Alberta, particularly northern Alberta, or in many areas of Saskatchewan or Manitoba, I too would probably decide to migrate to British Columbia. I think that goes a long way toward explaining some of the percentage figures on unemployment and social assistance in British Columbia.

We should perhaps also look at some job growth figures for Manitoba. Let's talk about figures for November 1983 to November 1984. I have a document from research that I will read into the record.

During the year November 1983 to November 1984, which was four short months ago, B.C. created jobs faster than any other province. The B.C. job creation rate increased 3.7 percent. This was a better rate of increase than the 2.8 percent in Ontario, the 2 percent in Quebec, the 1.7 percent in Manitoba and the I percent in Alberta. The national average was 2.4 percent, according to the central statistics bureau. Perhaps, Mr. Speaker, it might do well to update those figures from November. Perhaps the members opposite think those figures are a little old because they're from November 1984. Let's move up to December and look over the figures for the previous 12 months of job creation. From December 1983 to December 1984 Manitoba created 4,000 new jobs. In that exact same time-frame British Columbia created 20,000 new jobs. Perhaps the members opposite would like to move up past the December line. They don't like that line. They would like to move up to February. Let's get something really current. Yesterday I was able to get the figures from February 1984 to February 1985. During that 12-month period Manitoba increased its rate from 4,000 to 5,000 new jobs. British Columbia moved up from 20,000 to 29,000 jobs.

I find that very interesting in view of a report in the Winnipeg Sun for August 5, 1984, which points out the amount of federal money that was moved into Manitoba by their very good friend, Mr. Lloyd Axworthy. The Hon. Lloyd Axworthy has bestowed an estimated $780 million in various grants and projects on Manitoba — they nicknamed him Santa Claus in that province. But what does $780 million mean in B.C. dollars? We find that the population of Manitoba is 1,060,500. The October 1984 population in British Columbia was 2,882,800. In other words, it's 2.71 times greater than that of Manitoba. Had we had the equivalent amount of federal money come into British Columbia from the Hon. Lloyd Axworthy as Manitoba enjoyed, we would have had, on a per capita basis, $2.12 billion. There's a lot of job creation there, Mr. Speaker.

But I'm afraid that in Manitoba the pot has gone dry. So what they have to do is cook the books a little bit. A paragraph in a little document I have in my hand, the provincial auditor's report, reads: "The Manitoba government changed their reporting presentation in 1983-84 from 1982-83 in order to eliminate expenditure related to capital assets in determining their reported net operating deficit. This gives the impression that the deficit was $165.5 million in 1983-84, whereas on the previous reporting basis it would be $428.9 million. For 1983-84 the British Columbia deficit is equal to $355 per capita and the adjusted Manitoba deficit is equal to $455 per capita, or $100 more."

[5:30]

Mr. Speaker, we hear a lot about money going to large corporations in the way of tax relief on water. We hear a lot about megaprojects and how much better we would be to support the economy in other ways. I am a 100 percent supporter of small business. They are tremendous job-creating institutions. But I wonder if we shouldn't think a little bit about the big corporations in this province. I wonder how many small businesses there would be in Trail without Cominco. I wonder how many small businesses there would be in Alberni without MacMillan Bloedel. I wonder how many businesses there would be in Kitimat without Alcan Canada. I wonder how many jobs and small businesses would be lost in Revelstoke without the CPR. I wonder how Salmon Arm — my hometown — would be without the sawmill-plywood logging complex of Federated Co-op, which employs about 450 or 500 people. I wonder where Kamloops would be without the large mines and pulp mills and sawmill complexes in that area. I wonder where Armstrong would be without Crown Forest Industries, and I wonder where Victoria would be without the B.C. government located in this city, which is certainly a megaproject or a large institution.

You hear the members opposite talk about the ALRT. We hear the members opposite talk about the Coquihalla and the CPR, the double-tracking, the tunnelling, Expo and northeast coal. They make it sound as if there are no small businesses whatsoever involved in these big corporate enterprises. Mr. Speaker, I can tell you that that's not a fact. There are many small businesses that benefit from these. Many small businesses in my community are currently doing work in the way of equipment, materials and manpower on the Coquihalla Highway. There are many industries manufacturing concrete products for the CPR tunnel. There are many industries in my constituency manufacturing ties for the railways. There's a massive trickle-down effect. So I would appeal to the members of the House not to be snowballed by those who would make it seem, or would like you to believe, that all these dollars are going into a monstrous pot, with no spinoffs or trickle-down effects whatsoever to the small businesses, because there certainly are.

Probably one of the saddest things, in my view, that have happened in the province of British Columbia in the last year was the loss of that tremendous potential business in Nanaimo on Duke Point, a tremendous job-creating business. Somewhere in the neighbourhood of 750 jobs were lost, mainly because of a ridiculous ruling of the Labour Relations Board. I don't know where they got their background from to make such a ruling, but to me, to rule that all of the members — the entire local union — should be permitted to vote on a contract such as that is a very sad day in the province of British Columbia. It's unfortunate. I'm sure that the financial critic of the opposition, the member for Nanaimo (Mr. Stupich), must feel some remorse that that tremendous job creating corporation was lost to Duke Point, and all those spinoff jobs. There probably would have been somewhere between a thousand and 1,500 jobs going full bore right now in Nanaimo had that Labour Relations Board not made such a ridiculous decision as that.

Another point I'd like to cover is the continued negative references to northeast coal. I wonder how many members opposite have bothered to examine the growth of the coal export industry in the province in 1984 over 1983. There was

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91 percent growth. We shipped 91 percent more tonnage in 1984 than we did in 1983. Thousands of permanent jobs have been created, and a base for tremendous growth in the future. Here are a few clippings of very recent date: "New Goal for New Coal. Gulf Canada Resources has signed a deal to ship 20,000 tonnes of anthracite coal to Europe on a trial basis" — announced just a short time ago. More growth — the opposition don't like that, Mr. Speaker. "Canada Shows a Yen in Coking Coal Sales" is the headline. "Tokyo. Canadian coking coal exports to Japan were up 62 percent in the first half of the Japanese fiscal year, which began last April, Ministry of Finance figures show." We're all aware of the recent contract signed to ship additional tonnage — I believe it was 200,000 tonnes a year — out of the southeast. Lots going on. Negotiations are going on in several areas, and I expect to see more positive announcements made on more volumes in this coming year. So I would appeal to members: please, let's put the northeast coal criticism to rest. Sure the prices have fallen somewhat. But volumes are up, government revenue is up, and jobs are being created and jobs are up.

I've sat here for the last couple of days and listened to the members opposite ask questions repeatedly about the ERDA agreement and why it isn't signed, what's going on, what's in the budget and what's not in the budget, and where the $300 million for forestry is. Mr. Speaker, I don't know if the members opposite didn't get their reference material, but certainly I've read mine. In the supplement to the estimates for the fiscal year ending March 31, 1986 — on page 18, for the members' reference — it's very clear that $65 million has been set aside in this budget for the economic and regional development agreement.

Further to that, I would like to read into the record a telegram from the Hon. Tom Waterland, addressed to his federal counterpart, the Hon. Gerald Merrithew, Minister of Forests, House of Commons. The telegram reads as follows — and I would ask the members opposite to please listen to the telegram so perhaps we can get onto some other subject in the question period and make life a bit more interesting for all of us. It says:

IN CONFIRMATION OF OUR MANY TELEPHONE CONVERSATIONS RE A FOREST MANAGEMENT AGREEMENT, THE FOLLOWING IS THE FORMAL POSITION OF THE GOVERNMENT OF BRITISH COLUMBIA:

1. THE GOVERNMENT OF B.C. HAS BUDGETED FOR AND WISHES TO CONCLUDE AN AGREEMENT FOR A $300 MILLION FIVE-YEAR FOREST MANAGEMENT AGREEMENT TO BEGIN ON APRIL 1, 1985.

2. THE FOREST AGREEMENT IS TO BE SHARED EQUALLY BETWEEN THE PROVINCIAL AND FEDERAL GOVERNMENTS.

3. THE FOREST AGREEMENT IS TO BE A PART OF A TOTAL $650 MILLION FIVE-YEAR ERDA AGREEMENT BETWEEN OUR TWO GOVERNMENTS.

MAY I STRESS AGAIN THAT ANYTHING LESS THAN THE ABOVE ARRANGEMENTS WILL BE UNACCEPTABLE TO THE PROVINCE AND TO THE PEOPLE OF BRITISH COLUMBIA. I TRUST THAT I HAVE YOUR FULL SUPPORT IN CONCLUDING SUCH AN AGREEMENT.

Rather than the members opposite continuing to persevere with questions in question period in this Legislative Assembly, I would appeal to them to join us in the spirit of cooperation, contact their federal counterparts in Ottawa and join the Progressive Conservative caucus in pressing the federal government to get on with concluding the agreement with British Columbia. B.C. has made its case 100 percent clear in the budget tabled last Thursday.

Mr. Speaker, going down in the budget somewhat further, I listened to comments about no jobs, gloom and doom and everything is bad. I see a reference in there to the fact that the Chase-Blind Bay-Sorrento area, which happens to be in my constituency, is going to get a natural gas pipeline. Mr. Speaker, that area is going to enjoy the benefits of natural gas by the end of this year. The total project is going to cost $6.3 million. It's going to create thousands of man-days of employment. It's going to create employment in the manufacturing of the pipeline. There's going to be machine time, and there are going to be tremendous spinoffs inasmuch as people will be rallying to install new furnaces by the deadline of March 31 to qualify for the federal COSP agreement. So lots of activity, Mr. Speaker, and lots of jobs are going to be created as a result of that.

Another point I would like to commend the Minister of Finance on is the reduction by 50 percent of the off-highway gasoline tax. That is going to do a lot for areas in my constituency — the aviation industry, the houseboat industry for all those who enjoy pleasure craft on the many lakes within my constituency, and, of course, the very strong agricultural segment within my constituency.

[Mr. Speaker in the chair.]

I'm also very pleased to see the sales tax removed from the aquaculture industry. I've been a very strong advocate of building this industry. I feel that the many bays along the coast of British Columbia have tremendous potential for saltwater aquaculture, as well as inland. I look forward to some very good growth in this area in the coming year.

There's another item in the budget on page 18. I compliment the minister for mentioning this in his budget, and I certainly expect to see the Minister of Lands, Parks and Housing (Hon. Mr. Brummet) come through with something on this question very shortly. That's on page 18, the top paragraph, where he says: "The pricing policy of Crown land is also being reviewed, including lease rates for marina operators and agricultural land." Good stuff, Mr. Speaker. Certainly there were a lot of presentations on that in my constituency during the Minister of Finance's visit. I'm very pleased to see some progress being made in that area.

Also, Mr. Speaker, something that doesn't get much attention but is certainly a very high-profile item in my constituency is the amount of money being spent on downtown improvement programs. We have programs already in place in Salmon Arm, Enderby, Armstrong and Revelstoke, and I'm pleased to say that a major program is getting under way in Chase this year. It's good to see that kind of stuff in the budget, that kind of job creation and the cleaning up of the interior towns and the small communities. Good revitalization. The merchants are very proud and the residents very happy.

The other point that I'd like to cover very briefly again, items I've noticed during question period — has to do with the natural gas line to Vancouver Island. It would appear that when the members opposite think of a natural gas pipeline coming to Vancouver Island all they think of is heating the homes. That's all they have on their minds, I'm sure, because the questions they've been asking are zeroed in along the lines of using that gas just to heat homes. It's obvious that they're not thinking of the utilization of natural

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gas to run vehicles. Whether the members opposite have done any research on this particular matter I'm not sure, but I can tell you that the average car burns somewhere in the neighbourhood of twice the energy that a home does for heating purposes.

I support the natural gas line. It's a B.C. resource. I think it's an excellent investment. Further to that, in looking at the facts of history, where the federal and provincial governments got together and negotiated that energy-pricing agreement.... It's history that the federal government at the time promised the provinces there would be three pipelines built, fully financed by the federal government. Two of those lines, one in Quebec and one in the Maritimes, have been built, and I think the members opposite would do well to again join this government in the spirit of cooperation and press their federal counterparts to get Ottawa to commit itself to build that gas line over to Vancouver Island.

[5:45]

They talk about job creation. That pipeline will create 20,000 man-years of construction-related employment alone, as well as 800 permanent jobs, not to mention all the spinoff factors — furnace conversions, the lower costs and extra dollars in the hands of the consumer, as well as the converting of automobiles and heavy equipment. It's a tremendous project, Mr. Speaker, and I think the opposition would be well advised to get on side — join with the government and contact their federal counterparts. Let's get on with the job of creating more employment in B.C., a stronger economy and better years ahead for all citizens of the province.

Mr. Michael moved adjournment of the debate.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:46 p.m.