[ Page 5515 ]

CONTENTS

Tabling Documents –– 5515

Ministerial Statement

Hospital waiting-lists. Hon. Mr. Nielsen –– 5515

Mr. Hanson

Tabling Documents –– 5515

Committee of Supply: Ministry of Attorney-General estimates. (Hon. Mr. Smith).

On vote 11: minister's office –– 5515

Mr. Skelly

Mr. Lauk

Mr. Williams

Mr. Hanson

Mr. Davis

Mr. Blencoe

Ministerial Statement

Energy agreement. Hon. Mr. Rogers –– 5525

Mr. Skelly

Presenting Reports –– 5526

The House met at 10:06 a.m.

Prayers.

MS. SANFORD: Mr. Speaker, we know of Steve Fonyo's run across the country and we know of the work that Rick Hansen is doing by wheeling great distances. Today in the galleries we have with us Hildegaard Buschhaus, who has decided that she's going to walk across Canada in order to raise money for the blind. She started in Tofino, has now walked as far as Victoria and is present with us here today. She leaves today to head across to the lower mainland, where she starts her trek across the country. She is accompanied today by her husband Gunter, who is driving the van accompanying her across the country. I would like all members of the House to join me in giving her a very warm welcome and a good send-off on her trip.

MR. R. FRASER: Mr. Speaker, I'd like you to join me in welcoming members of the Islands Trust: Nick Gilbert, Glen Snook, Bo Helliwell, Deborah Daws, Harnish Tait, Carol Martin and Inga Nykwist. Would the House please make them welcome.

MRS. WALLACE: On behalf of the opposition, I would like to join in welcoming the members of the Islands Trust to our galleries today, and wish them success in their ventures.

I would also like the House to join me in welcoming a group from Duncan who are in the precincts, and will be in the gallery a little bit later. They are grade 10 students from the Duncan Christian School, accompanied by their teacher, Mrs. K. Vos.

MR. LEA: Mr. Speaker, in your gallery this morning is a British Columbian who is no stranger either to this House or to politics in this province. I'd like to ask members to join me in welcoming Jack Radford, who has spent all of his life actively involved in the affairs of this province. For over 30 years Jack Radford was an active member and worker of the New Democratic Party, and he sat in this House as an MLA and as a cabinet minister. He spent over 35 years in the labour movement, the last 12 years working for the Canadian Labour Congress. I'd like to ask you this morning to welcome Mr. Radford here as a new member of the United Party of British Columbia.

Hon. Mr. Pelton tabled the annual report of the Ministry of Environment for the period April 1, 1983 to March 31, 1984.

HOSPITAL WAITING-LISTS

HON. MR. NIELSEN: Mr. Speaker, I have a short ministerial statement.

The member for Okanagan North (Mr. MacWilliam) yesterday claimed that one of his constituents had been waiting since June 1983 for back surgery — spinal fusion. I asked the member to advise me of the patient's name, which he did yesterday, and staff checked into the matter.

The name of the constituent — I believe he is from Lumby — was submitted to Shaughnessy Hospital by his surgeon on November 19, 1984. At that time the surgeon also supplied to Shaughnessy Hospital the names of 169 other patients who required this surgery. This gentleman is one of 170 patients for whom this surgeon has requested hospital time. The surgeon is a specialist in a highly specialized form of back surgery, primarily for back deformity. He is the only surgeon in British Columbia apparently capable of this type of procedure. The closest surgeon to Shaughnessy Hospital other than this doctor resides in Toronto. This particular surgeon had been practising orthopaedic surgery for a number of years, and with the encouragement of Shaughnessy Hospital and others he went to the United States to take extensive training in this specialty. Shaughnessy Hospital is attempting to refer other orthopaedic surgeons to the same school to have them develop similar skills. This surgeon receives a tremendous amount of operating time, frequently on a daily basis at Shaughnessy, and often uses as much as 40 percent of the emergency time on weekends. Because of his specialty he is in control of his list; he brings forward the most urgent cases.

[10:15]

We have asked the patient in this case to speak to his own general practitioner to determine if his condition perhaps could be attended to by other than this particular physician. This doctor is attempting to farm out many of the procedures which he feels lie within the competency of other physicians. It is not known at this time if the constituent in Okanagan North is suffering from the particular difficulty that this physician specializes in. But, Mr. Speaker, I think it's important to know that this gentleman has not been waiting for back surgery since June 1983. He was on a list of 170 patients submitted to Shaughnessy Hospital on November 19, 1984. The surgeon is in control of the list; the surgeon decides which of the patients will be dealt with first. Mr. Speaker, a list of 170 people on this one surgeon's list would indicate that there is a very long period of time for some of them to wait if he is the only person capable of performing that particular surgery.

We've been in contact with the patient. We've offered him some non-medical advice, and we hope perhaps there may be some resolution to it. But it is a case of a highly specialized procedure with, unfortunately, very, very few practitioners capable of performing it.

MR. HANSON: Mr. Speaker, in the absence of the member from Okanagan North (Mr. MacWilliam), it is our information that the individual in question has been on WCB for two years without employment, and that fact should be before this House. That person has been denied the livelihood to earn a living because of the inability to get into the hospital to have that particular surgical procedure done.

Hon. Mr. Rogers tabled the annual report for the Ministry of Energy, Mines and Petroleum Resources for the year 1983.

Orders of the Day

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

ESTIMATES: MINISTRY OF ATTORNEY-GENERAL
(continued)

On vote 11: minister's office, $223,385

[ Page 5516 ]

HON. MR. SMITH: Mr. Chairman, I want to make a comment at the outset on the court decision that came down yesterday — that is, the decision on MacMillan Bloedel versus Mullin, Martin and others. Having had an opportunity overnight to read all the decisions of the court.... It is a three to two decision of the British Columbia Court of Appeal. Mr. Justice Seaton wrote the majority judgment, with two judges dissenting. Putting that in context now, as I have, I am going to advise the Lieutenant-Governor-in-Council that we not appeal the decision. The decision, it seems to me, is an interlocutory decision only. It says that the natives have a case to be litigated on aboriginal title. We agree with that, and have never disputed that they have a case to be litigated. The sooner it's litigated and proved in a court, and the public of this province learns the extent of it, the better.

The injunction that the court of appeal has ordered to November 1, 1985 — the other parts of this decision allow the company to do survey work and other things on their property, but not to log until November 1 — contemplates an early trial. The court did so because it believed that the natives had a fair case to litigate, that the trees on Meares Island were of sufficient importance in a lawsuit that they should be preserved, and that Meares Island itself was a special case — that Meares Island had great significance to the natives and that therefore it was fair to allow this injunction to proceed on those limited terms.

We will accept that decision, and we will prepare for trial. We have no desire to try to have endless court applications to delay a day in court. We think the sooner this day in court takes place, the better.

Mr. Chairman, I was frankly appalled to read — and I hope that it's not a correct reporting of him — statements attributed to the the Leader of the Opposition in this morning's newspaper, in which he is reported to have said that the Meares Island decision is "a triumph of justice" and accused the Social Credit government of "dealing with Indians in a racist way." Maybe that's not an accurate quotation of what he said. But you know, I was so angry when I read that that I contemplated a motion of privilege, but I don't like motions of privilege, and I think they should be used sparingly.

But it's a sad day, really, that when we have an issue that is as important as native title.... It's an issue in which there are two legitimate points of view in this province and in this chamber, with a government that has represented the view of every government since Confederation — namely, that aboriginal title doesn't exist and was extinguished — and an opposition that says: "No, we think there is native title; we'd like to negotiate it and pay major sums of money to the native bands after those negotiations." We have an honest difference of opinion. When I debate this matter with the member for Atlin (Mr. Passarell), who's a very fair-minded member, we have these differences of opinion. But I have never claimed that anyone that doesn't agree with our point of view is racist. Why is it that someone that doesn't agree with his point of view is racist? It's reverse racism, Mr. Chairman, and it's the kind of talk that divides the people in this province, divides communities, and sets one community off against another.

I can tell you that the Premier of this province, who I have had the honour to accompany on native negotiations for the past two years, and the Minister of Intergovernmental Relations (Hon. Mr. Gardom) have dealt squarely and straight-up with the natives. We haven't kidded them, we haven't bamboozled them, we haven't said: "Listen, fellows, we're nice guys. We've got some lolly for you in the comer; just come along with us." Other governments have treated them that way. The former federal government treated them that way. We have been upfront and consistent. And we have not treated them in a condescending, paternalistic way, either; we've dealt with them straight one on one.

I've had extremely good personal relations with native bands, received hospitality from them and been to potlaches, and I have a high regard for them. I take enormous umbrage at this kind of comment, and I think there should be a withdrawal.

MR. SKELLY: Mr. Chairman, I believe the minister has distorted my comments, or else the press has misquoted me. I think if the minister will check Hansard he will find out the comments I did make in the House yesterday, and I stand by those comments.

MR. LAUK: With respect to the Attorney-General's comment — just so that one lawyer's view does not prevail — as to the decisions of their lordships of the Court of Appeal, the test for granting an interim injunction before trial is a test of reasonable cause of action, which does relate to the aboriginal title claim of the applicants. The aboriginal title claim is recognized by the court of appeal. I think that if the Attorney-General had a reasonable, objective view of the decisions to date, this is a high-mark decision and justifiably characterizes a triumph of justice, because the tests for an interim injunction are reasonable cause of action with a reasonable chance of success; and, on a balance of convenience, in the likelihood and probability of success at trial, an injunction is granted. So I don't think it diminishes the decisions of the three members of the five-man court whatsoever. To be characterized as granting the injunction just out of safety's sake is not a proper characterization of the decision.

MR. CHAIRMAN: Hon. members, it's becoming clear to the Chair, in listening to the discussion, that we could be offending the rule of sub judice. I stand corrected in that. I realize the Attorney and the hon. member have spoken, but perhaps a warning to the committee is in order at this point.

MR. LAUK: I think both sides of the House would agree that it's not sub judice at this stage.

MR. WILLIAMS: Mr. Chairman, before closing yesterday we had some discussion about the member's responsibility with respect to B.C. Steamships and the Princess Marguerite. The minister did not indicate that he has investigated the various resignations that have taken place within B.C. Steamships: the managing director, Mr. Wright; the manager of vessel operations, Mr. Hart; the comptroller, Mr. Hoare; and the general foreman, Mr. Hodgson. All of these senior people in this small corporation have left. Has the minister had the opportunity to review those resignations and to look at the various reports that were available within that Crown corporation?

HON. MR. SMITH: Yes, I have briefly reviewed each of those resignations, if you want to call them resignations. It doesn't seem that any of those resignations, from the material I've seen, are statements of distress over the competition — or possible competition — from the jetfoil. Mr. Hart was a consultant whose consulting contract terminated on January

[ Page 5517 ]

23, 1985; the reason given was the pressure of other business commitments. Mr. Hoare was a comptroller; in an internal management reorganization he was offered another position, that of the Victoria terminal agent, which he declined. Mr. Hodgson was a maintenance foreman and his job was altered in a change in maintenance procedures; the new position that he was offered, which I guess wasn't as active a position of responsibility as his previous one, was not acceptable to him.

The member may have talked to these people, who may all have similar views on the jetfoil, but I don't know that that's the reason they left. I would think the jetfoil will have to compete for quite a different market. Its rates will be higher, it won't carry vehicles and it will bring passengers quickly from downtown to downtown. It will have a good buildup, particularly in 1986. It seems to me that the potential traffic from Seattle to Victoria can stand that other service. At one time, probably when you were associated with the Marguerite, we had a harbour-to-harbour air service run by Air West, as it used to be called. I used to take that from time to time to downtown Seattle. I don't think it impacted heavily on the Marguerite.

[10:30]

1 have no evidence that those resignations were on that issue, hon. member

MR. WILLIAMS: A little more digging might be in order. The board did not approve this deal at an earlier stage with Island Jetfoil. The decision of the board, as recently as November, as I understand it, was negative. Obviously there was some intervention, in terms of the regular, sound operation of the Princess Marguerite. Obviously there was intervention by other parties, in terms of determining what should be done. Yesterday I inquired about the lease arrangements with Island Jetfoil at the terminal site here in Victoria, and the minister indicated that one more signature was necessary. Maybe he can comment on the lease arrangements in Seattle, which are complete.

HON. MR. SMITH: I told the member that I will make public the terms and amounts of the leases when they are both completed. There is a signature required on one of them — the signature of the government of Canada, as I recall. But I will make those public. I have absolutely no hesitation in doing so.

MR. WILLIAMS: Presumably the arrangements in Seattle are complete, so why can't we be privy to the information with respect to the arrangements in Seattle?

HON. MR. SMITH: Well, you will be. But I prefer to do them together, with a statement treating them as part of the same enterprise, and you'll have ample opportunity, if you wish, to deal with that information in question period. You're not precluded from raising it.

MR. LAUK: Just an intervention for a moment, Mr. Chairman. It's the view of the opposition that those matters are of sufficient importance that they should be reviewed during the Attorney-General's estimates.

HON. MR. SMITH: The opposition may be of that view, but having no obligation to file such documents but agreeing to provide the information on the leases when they're both complete — and provide that publicly — and to answer questions on it.... It may not be quite as free-ranging as it would be in estimates, but you have ample opportunity to question me on them. I do not think that I should deal with them piecemeal; I think that I should deal with them together. And I will make them public.

MR. LAUK: Can the Attorney-General have those documents available by April 9, the reconvening of the committee?

HON. MR. SMITH: I have absolutely no idea whether they'll be available on April 9 or not, but I'll make the information contained in them — that is, the term of lease and the amount of money — available at the earliest opportunity, when they've both been signed.

MR. WILLIAMS: One of the obvious questions that follows is that the company that is owned by the same people that own Island Jetfoil has harbour facilities here in downtown Victoria. They own the Ogden Point area. Anybody that reviewed the press of the last week will note that they're completing construction of docking facilities there. In view of the fact that this operation, or its sister operation, has waterfront facilities in downtown Victoria, why was this lease entertained, in view of the fact that there were internal documents that indicated there would be a cash-flow haemorrhage for B.C. Steamships if you proceeded with the lease?

HON. MR. SMITH: Well, I'm not the spokesman for Island Jetfoil, nor the rationalizer of why they would want a particular space in the Inner Harbour, but I think common sense would tell us that the Inner Harbour space is more desirable from a tourist point of view. There is a facility there already, which the Marguerite uses, which is a natural facility in terms of availability of customs, accessibility to tour buses, and many other advantages that would make that a better facility.

But I think the member's remarks are all predicated on the gloomy proposition — he's always gloomy about these things — that this is a haemorrhage, and that you can't have two modes of transportation from downtown Victoria to downtown Seattle, He's negative on that. He wants the Marguerite to continue to provide the only service, I guess. It was, at least, adjudged by the board of directors after reconsidering the matter that the service of the Marguerite was not going to be materially threatened by this service. There is no doubt that the community of Victoria, the chamber and other spokesmen from the community, including the city council, who endorsed the proposition — unanimously, as I recall — were of the view that both services were good for the city of Victoria.

MR. WILLIAMS: Nobody's disputing the right of a company to go into business for themselves, even though they mainly use federal tax credits to pay the bill. The point is that they are the owners of valuable shoreline land in downtown Victoria and could well have used that for their purposes, as most private entrepreneurs would have, rather than try to elbow in on a successful Crown corporation's situation, which is exactly what's happened. But we're talking about a decision later — a reconsideration of this matter by the board; a reconsideration after four senior people decided to pack it in, deciding that this was not in the best interests of the Marguerite. It's certainly one thing for the additional service

[ Page 5518 ]

to be made available, and that's fine. It could well be done at Ogden Point. But the minister chooses to ignore or has not reviewed the internal staff documents that indicate how much of a haemorrhage this could represent for B.C. Steamships; and that means us, the public of British Columbia, picking up the bill if there's a deficit. The minister is aware that there was an internal study carried out by the comptroller and the accountant auditors for B.C. Steamships — Thorne, Riddell — and maybe he could advise the House the extent of the haemorrhage they saw in terms of making this kind of leasehold deal with Island Jetfoil.

HON. MR. SMITH: I can certainly advise the member the extent of the effect of the Marguerite's season based on our own marketing plan. I told the member yesterday that it is our plan to use the full marketing facilities of Tourism B.C. We have projected that traffic volumes on the Marguerite this season will rise from 287,000 to 325,000. So we believe that we're going to increase our market, not decrease it. In last year's operation we decreased the deficit, which had stood previously at about $1.1 million. That was lowered to $500,000, and we expect to cut that $500,000 deficit in half again this year. We expect to grow this year in volume, and in the Expo year the marketing growth will be increased very sharply over what we're projecting this year.

So I'm not negative, as the member is. I'm sorry that he is, and I'm sorry that he doesn't believe in any form of competition and believes in public monopolies. I have some optimism about this community, and optimism about the service.

MR. WILLIAMS: The point is, there is an internal study. Four senior people resigned because of the negative impact of this subsequent review decision after political interference in the operations of B.C. Steamships. The minister, I'm sure, has checked out the report. The report indicates that there would be losses in revenues otherwise anticipated, exceeding $1 million, as a result of making this deal. So clearly there are serious negative implications in making this kind of deal with the competing operation. Maybe the minister can advise us who the Crown and B.C. Steamships were dealing with in the negotiations for this lease. Obviously it was a person of considerable access.

HON. MR. SMITH: I wasn't minister during those dealings or negotiations; I was presented with leases in draft form, and I asked the requisite questions about the leases and ascertained that the leases were supported by appraisal. I was cognizant of the view of the community, as I've expressed before, that there was room for this other service. The board of directors of the B.C. Steamship Company voted to accept the leases, and accordingly I signed the leases. I think that the member's attempt to link four departures from the service of the steamship corporation to some gloomy report that he purports to know about, while it makes very good detective story reading, really doesn't wash, because I told him that the estimate we have on volume this year is that there's going to be an increase in volume and a decrease in the deficit. So we expect to do better in the Marguerite this year in the face of that competition. Sometimes, you know, it's just possible people do better under competition. It's been known to happen.

MR. WILLIAMS: The deficit and accounting is easy enough to deal with. One can shift expenses from one year to another fairly readily. I think the Minister of Education (Hon. Mr. Heinrich) has come across that in a couple of his reviews on other matters in terms of accounting procedures. So the $500,000 deficit that the Marguerite has had in the last year has probably included, and I am satisfied does include, costs that might more properly have been attributed to this year's operation so that the real deficit for the previous year was indeed considerably less than $500,000 and so that there is a cushion in this year's operation in terms of attributing costs that should have been applied to this fiscal year but were pushed over into the last fiscal year, accounting for the $500,000.

Enough of that one. Who was carrying out the negotiations for Island Jetfoil? Is it not so that the person carrying out the negotiations for Island Jetfoil in terms of elbowing in on extremely valuable sites in downtown Victoria and in downtown Seattle was none other than Ian Stewart, long associated with the Social Credit Party in this city, long associated in terms of consulting with other ministers in this government, and long involved with the Social Credit Party itself and their financial interests? Is it not the case that Island Jetfoil had this man working for them with respect to this administration?

[10:45]

HON. MR. SMITH: I think that he was representing them in some of this as a consultant; the member is absolutely correct. But the president of the corporation was Dr. Stewart Vinnels. He was the president and the promoter and the person who raised the R and D money that supported the purchases, as I understand it. But yes, I believe that Ian Stewart was engaged as a consultant, as he....

AN HON. MEMBER: You have a passing acquaintance with him?

HON. MR. SMITH: Yes, the gentleman and I have met. Ian Stewart is a very able and loyal British Columbian who has performed many valuable services. There's no question about it. You'll get no denial on that from me.

[Mr. Ree in the chair.]

MR. WILLIAMS: I guess the term that might be used is bagman, among less effete social circles.

But the interesting thing is that we should ask ourselves who abandoned ship here. The guy who abandoned ship isn't sitting in his seat right now. Why should he pack this mess on his back? If the local people in Victoria are playing games with the Princess Marguerite, if Ian Stewart is in it up to his eyeballs, why should he pack it around? Why, he's only the Minister of Transportation (Hon. Mr. Fraser). That's the reasonable job in terms of looking after the Marguerite. No, he decided to abandon ship. He knows a problem when he sees one, and it was one that was not of his making. No wonder he abandoned ship when he was dealing with this mess, because he was part of the board's decision at an earlier stage that said: "Nothing doing; if this is going to hurt the Marguerite, we want nothing to do with it." No wonder he abandoned ship. No wonder he said: "Let one of the local people deal with this one, because he clearly has a greater interest in it than I." The cabinet has gone along with those kinds of interests; that's what has happened here.

[ Page 5519 ]

HON. MR. SMITH: I was hoping, hon. member, that in return for relieving the member for Cariboo of his onerous duties as president of the B.C. Steamship Company I would in turn be put in charge of the Anahim Lake Stampede, but I haven't received that appointment yet. That was the quid pro quo.

MR. HANSON: I think the little facetious remark made by the Attorney-General is an attempt to deflect the questioning that is taking place in this House on a very important matter with regard to the Marguerite, which is a very, very important economic fixture in this region, serving Vancouver Island extremely well. I want to continue on that questioning, with some questions that relate to the way the Marguerite is being managed at the moment.

In long-range maintenance of a vessel such as the Marguerite, there is a survey plan; in other words, a maintenance plan. To be healthy and to run properly, a vessel has to be maintained. It has to have regular refits. It has a survey plan. In fact, the Marguerite has a four-year survey plan. This year, Mr. Chairman, the refit is due. It may come as a surprise to you, but I don't think as a surprise to the Attorney-General, that there was no refit. There was no cleaning of the bottom; there was no making it efficient in energy consumption. We hear a lot about the bottom line with respect to operating expenses for the Marguerite: how much fuel, how much labour costs, etc. Anyone who has a vessel, a sailboat, a powerboat, or a commercial or industrial vessel, knows that unless there's proper maintenance the operating costs will be exponential, because things just get worse and worse. When you take a vessel like the Marguerite and you don't refit it after four years — it's a four-year survey plan — you don't bring it out of the water, and you don't clean off the hull, what does that mean? It means an inefficient vessel in terms of its operating expenses; it means you bum more oil; it means it runs inefficiently. So why — my first question to the Attorney-General — when there was a scheduled refit due on a four-year plan, has no refit or cleaning of the hull been carried out? I'd like to have an answer, Mr. Chairman, to that very important question. That vessel is a key part of the economy of this city.

HON. MR. SMITH: That's another question, I guess, for the member for doom. I don't know why you dwell on so many negative features, particularly when.... There just might be someone, you know, who listens to this debate or reads garbled extracts of it later, and thinks: "My gosh, this vessel, perhaps, isn't clean or safe or seaworthy." It's irresponsible.

You know, I'm sure, that the refit on that vessel is not due under the licence until the end of this season, and it has passed inspection. As for the bottom cleaning, it's nice of you to give us marine survey advice on that, but even before you spoke, we had scheduled a cleaning for the bottom next week. I have no doubt that you may have had some complaints about that, because it's not going to be done in the ordinary way by hauling it out of the water and spending $110,000. It's going to be done by divers who are going to do the cleaning and also shine the propeller. They're going to do this for under $10,000. So it may be that there was some loss of traditional lolly, and you probably have had some complaints about that.

But I can assure you that the bottom will be cleaned. The refit is not required at this stage, and it will be done at the end of the season. The vessel is, and will be, in A-1 working order, despite, maybe, some disgruntled people who aren't going to have quite as much work to do this year as last.

MR. HANSON: Again, the Attorney-General tries to make light of the fact that there's a four-year survey plan in place. It would be irresponsible not to raise this issue in this House; it's such an important feature of this economy, as I've said. It's not just the cleansing of the bottom of the vessel that hasn't been carried out. The turbines haven't been opened up for a check either, and they're due. There's no money in the budget for a refit. That vessel, as I've said, is an important feature. It's an important transportation link and an economic factor in this region. If you're going to play fast and loose with that, and you've tried to monkey around as a government.... You've monkeyed around with that vessel in the past, and it has had disastrous implications here in our local economy. When did you last ignore a refit like this? When was the last time you monkeyed around and didn't do the refit properly? It was in 1979, when you tried to kill the Marguerite.

So, Mr. Attorney-General, I want you to give an undertaking to this House that there is no plan in place to put forward spurious arguments to dismantle that run. That run must have your commitment to run on an ongoing basis. When you don't do the maintenance, you don't check the turbines, you don't get proper marine consultant reports, and when you do the cleanup of the bottom on the cheap by rubbing it with old BCRIC shares — or whatever you do with it — then you're playing with the economy of this city, and you know what kind of implication that has.

Who are the marine consultants now who are advising you on the maintenance of the Marguerite? Who are the people engaged now to provide you with this information about whether the turbines should be opened or whether the bottom should be cleaned, and so on? Are they the same people that were involved in 1979?

HON. MR. SMITH: Jimmy Gorst is doing it, actually.

I would be pleased to give you the names. We'll have them shortly; I don't have them at my fingertips. I am advised that it has been done professionally, and I will be glad to give you the names.

MR. SKELLY: In opening his remarks today the Attorney-General made some statements concerning my speech to the Legislature yesterday and the way that speech was reported in the Vancouver Province. I had not had the opportunity until now to read the Vancouver Province article. The Attorney-General quoted the article accurately. The Province article did not accurately reflect my statements in the Legislature, but I'm sure the Attorney-General had an opportunity to make that comparison between the time he read the Province article and the time he stood up in the House.

MR. LAUK: I saw him reading the Blues ahead of time, so he's really playing double shuffle here.

MR. SKELLY: I'll get to that in a moment.

Mr. Chairman, my statements yesterday indicated, and in fact I was quoting from a Province article in the newspaper of March 27, 1985.... My statements were to the effect that Indian children die at 45 times the rate of non-Indian children in British Columbia. Whether there is racism in this society

[ Page 5520 ]

legally or whether there is racial discrimination in the law or not, then there is de facto racism when Indian children die at 45 times the rate of non-Indian children. When Indian teenagers commit suicide at six times the rate of non-Indian teenagers, when four out of ten Indian people in this province die violent deaths, when Indians are admitted to the hospitals at twice the rate of non-Indian people in this society, when the drop-out rate for Indian students is 80 to 85 percent, and unemployment in Indian communities is at 90 percent.... That was the article I was quoting from in the Vancouver Province.

I indicated at the time that if all of those things were happening to Indians in British Columbia, then whether there is racism legally in this province or not, there is de facto racism in our society. If the Attorney-General expressed offence at my statements, I would suggest to you that the Attorney-General should be more offended at those statistics, at how unequally our society treats Indians as opposed to non-Indians. If he has any complaint about the statistics, I would have expected him to stand up in the House and complain about those statistics.

But the facts are that those statistics are drawn from federal government statistics on the health and economic conditions of Indian people in British Columbia. I would certainly have expected the Attorney-General to take offence at those kinds of statistics that are present in our society today.

Mr. Chairman, I have no hesitation in saying that the Province took my quotes out of context, that what I was referring to in the Legislature yesterday was the way our society treats Indian people unequally because they are Indians. The Attorney-General, if he is going to be offended at anything, should be offended at, firstly, the treatment of Indian people in our society, and, secondly, the way the Province misrepresented my statements. I am certainly offended by the way the Attorney-General attempted to use those things in the Legislature this morning, and I'm certain that all members of the Legislature should feel the same way.

HON. MR. SMITH: I am delighted to hear the member say that he didn't make that statement in the way that it's reported. You have to understand that there is nothing in this Province story to indicate that these are remarks that you have made in the Legislature. If it was attributed to you in the Legislature, or if the context of this article was talking about what you said in the Legislature, I think it might have been understandable. But it looks as if you are commenting on the Meares Island decision, and you're making an accusation against the government. I guess the article is so garbled and has so many things crammed into it, including Ottawa's new proposal, that it's very hard to get context. I understand that....

MR. LAUK: Is that an apology?

HON. MR. SMITH: Well, I certainly am comforted, and I accept exactly what the Leader of the Opposition said — that he didn't say those things, and I accept that.

[11:00]

MR. LAUK: I had not seen the article before, Mr. Chairman, and I am greatly surprised that the Attorney-General would march into this House, when the galleries were full, and make that unwarranted charge against the Leader of the Opposition based on this article. Respect for the kind of contextual reporting in the Province newspaper has been lessening over the months. I know that's also the view of the Attorney-General, and for him to rely on that kind of reportage to attack the hon. Leader of the Opposition without standing up and abjectly apologizing for relying on this kind of research is beyond me.

Interjection.

MR. LAUK: Well, I'm delighted he's comforted at any rate.

HON. MR. SMITH: I'll just give the information the member for Victoria was seeking, and that is that an inspection was done by Canadian Steamship Inspection or CSI. In February and March of this year they conducted a general mechanical survey and a turbine and engine room survey, and gave the vessel a clean bill of health.

MR. WILLIAMS: Well, that's all very well, but the normal procedure is a refit every four years. That's the standard that was traditionally applied by the CPR, the former owners of the ship, and in normal times by B.C. Steamships. So it isn't just a matter of what the federal bureaucrats say; it's a matter of what's best, and what has been standard procedure. Standard procedure has been the four-year refit. So that one doesn't wash.

The question of the Seattle terminal is of equal concern, in a different way, in terms of the arrangements they have made with this company that has interesting associations with Social Credit members. The site in Seattle is one in which the jetfoil will be elbowing in in front of the Marguerite, right at the foot of the finger pier. The original intent of the first draft of the lease, in terms of a deal at Pier 69 in Seattle, was to elbow the jetfoil in in front and leave a 25-foot gap between it and the Marguerite. Just think of that. You've got this jetfoil zooming in, getting there in front — got the prime location — the old steamship comes along behind it and there's a 25-foot space left between their lease and the Marguerite's lease. Anybody who's been on the Marguerite and knows something about manoeuvring ships knows that that isn't good enough. But that's the deal that was contemplated. After much complaining and concern on the part of staff and others at the Marguerite, a change was made. They will now allow a 50-foot gap between Island Jetfoil and the Marguerite lease. That's almost as dangerous. And that's the lease that's been signed for Pier 69 in Seattle. The front of the Marguerite is where most of the people get off. They all cram up at the front. They're all busting to get off after an enjoyable trip, and you have this other vehicle in front. There is the potential for danger there, in terms of the deal that's been signed: stupid in terms of the financial arrangements; stupid in terms of the deal that's been cut here in Victoria, with its negative impact on cash flow for B.C. Steamships; but inexcusable in terms of safety implications in Seattle. Can the minister comment on the safety implications as a result of letting his friends elbow in in front of the Marguerite at Pier 69?

HON. MR. SMITH: I can reassure the member that the Marguerite has priority at the dock, and that the jetfoil won't be at the dock when the Marguerite docks. The jetfoil would come in later, and the jetfoil is very maneuverable. The

[ Page 5521 ]

information I have is that the safety factors have been well canvassed and are not believed to be a real concern.

MR. WILLIAMS: If the Marguerite runs late, then they'll be there at the same time. If the minister checks the records, he'll find that the timing is not precise. There are implications in terms of them being there at the same time.

But let's just think about the jetfoil itself. Fine — it's free enterprise. They're using federal tax money to do this number. But I guess the minister would call that free enterprise. They're using federal tax money taken from the general public to finance Island Jetfoil. That's modem-day Social Credit free enterprise. Okay. We'll call it that, for the sake of his argument. But what has been the success rate of jetfoils around the world? What has the success rate of these machines been, the ones that are elbowing in on the Marguerite? They tried them in Hawaii and they failed in Hawaii. They tried them in Venezuela, and they failed there; they ran into some whales and fell apart. They've tried them in the United Kingdom, and they failed there. They've tried them in the past here in Victoria as well. They tried them in '76, they tried them in '78, they tried them in '80. Sounds like an election speech, doesn't it? And they failed each time.

What about Seattle itself? That's where Boeing is. How come the jetfoil doesn't operate in Puget Sound? What about all those islands in the San Juans, Whidbey Island, Vachon Island, Bainbridge, Shaw, Lopez, you name them? None of them is being served by jetfoil. There's only one service left on the planet, between Hong Kong and Macao, and that one's being phased out now.

Interjection.

MR. WILLIAMS: That's right. This is lemon city.

The maintenance problems of the jetfoil are so severe that even in this operation, after she dumps her people in Seattle she will go to the Boeing facility every night. It's that kind of heavy maintenance cost that is a constant problem with these things. Every night after traveling the Sound and the Strait to Victoria, she will have to go into the Boeing facility to be checked. That's the kind of operation that we're talking about here.

One doesn't like to be doom and gloom, but what we're talking about here is not the traditional kind of free enterprise question at all.

We've had these resignations. The minister can dismiss the refit because of federal regulations, but that doesn't wash. The foreman who resigned, Mr. Hodgson, was specially trained. The turbines on that ship are a very specialized item, a very advanced technology of the day — 1947, I guess, for the turbines and fans — and he was the only one who was qualified or had had the training to deal with that end of the operation. You've lost him now, as you've lost these other people of significant competence.

Mr. Chairman, what we've got on board the Marguerite now are bagmen and buccaneers. They're taking a kind of easy ride in terms of elbowing in for the latest game they're playing, which is jetfoil. They've elbowed in in downtown Victoria for a fee that I suspect will be modest, and they're elbowing in in downtown Vancouver at the SeaBus terminal for a fee that I expect will be modest — these friends of Social Credit. Imagine....

Interjection.

MR. WILLIAMS: Yes indeed, at the SeaBus terminal as well. If you had to ask yourself, "Where is some valuable downtown real estate I'd like to elbow into," and you had to think about downtown Vancouver, you'd say: "Boy, if I wanted to elbow in, it would be at the SeaBus site — all that redevelopment of the waterfront. If I wanted to elbow in in downtown Victoria it would be at the Marguerite site here, just opposite the legislative buildings. And if I wanted to elbow in in Seattle I'd want to elbow in at Pier 69, near the Edgewater Inn and all those other facilities on the downtown waterfront of Seattle." That's what would happen.

One has to ask: is there a game plan behind this? It's hard to dismiss the prospect. Is there a secret agenda? Do these friends of Social Credit have a secret agenda? And we have to ask: is it a hope that the Marguerite will indeed fail? The pieces are here that were there when they tried to force failure before — anticipated cash losses as a result of this elbowing in. Or is it anticipated that somehow the jetfoil and Marguerite might be linked together in the future and not as a government enterprise? One can't help but think that behind all of this activity there has to be an agenda, an agenda that's not in keeping with the kind of service we've had from the Marguerite in the past.

HON. MR. SMITH: The jetfoil, as I've said before, is not something that I'm responsible for; the Marguerite I am. There is no game plan to phase out or diminish the Marguerite whatsoever. I tried, in my first announcement as president of the B.C. Steamship Company, to make it clear that I intended to enhance the Marguerite — enhance its marketing, extend its season, promote it and make it vital. We are projecting increases in traffic; we certainly don't intend that it be phased out or replaced by jetfoil.

If all your dire predictions about jetfoil are correct, and if, indeed, jetfoils operate on the basis of federal tax shelters — you seem to see some kind of insidious plot in this whole thing — you can rest assured that the leases, hon. member, are not assignable. So it will not profit anyone to have Seattle Seabus location here in the Inner Harbour, for the purposes of getting in, and then to assign those lease rights. Those rights are non-assignable, and they are limited to the operation of a Jetfoil.

I'm not going to comment further on the political intrigue that you're postulating. I guess it depends on whose ox is being Gorst.

MR. LAUK: As a result of the questions of my colleague from Vancouver East, I've become so interested in the leases. Non-assignable leases — that's interesting.

HON. MR. SMITH: You have an idle mind.

MR. LAUK: Well, I've been sitting opposite the hon. member too long, perhaps.

It seems to me that the committee should have these leases before it. Now we find out they're non-assignable. I wonder what form that is. There are various forms of lease that are non-assignable. There is also a body of jurisprudence that deals with lease rights and leasehold rights. I think the matter is altogether too curious, from the public point of view. I would ask the Attorney-General to bring to the attention of the committee this morning the leases in their present form, signed or not signed, executed or unexecuted, so that we can ask questions about them. Is that a possibility?

[ Page 5522 ]

[11:15]

HON. MR. SMITH: No, I'm not going to do so until both these leases are signed, sealed and delivered. I will be happy to give you the details when that's done.

MR. LAUK: You see, Mr. Chairman, it's not an ordinary business transaction. We have the Attorney-General's closest friend representing the jetfoil corporation, a private group, and negotiating terms of a lease with the president of the steamship company, and both of them are like brothers. Surely the Attorney-General would be the first to want us to vet in a public way the negotiations between these two very close friends, with respect to the alienation of public rights and assets. Surely the Attorney-General is the first one who would want to have the committee do that.

There's no great harm in producing unexecuted leases. It's not going to affect, as I understand it, the negotiations. You've already announced the details of the negotiations, so that's done. It's just a question of execution of the documents.

It seems to me a little intransigent of the Attorney-General to refuse to produce those documents for the committee — because we take him at his word that he has nothing to hide. So let's have a look at them. Would the Attorney-General send away for those documents? We can wait. We're not going to adjourn until noon.

HON. MR. SMITH: I'm just going to respond to the cute remarks about how I've been negotiating with my best friend. You know, that's really, I guess, like suggesting that you get special coverage on the CBC — that's silly. I know that you don't, because you look as bad on there as I do. My association with Ian Stewart is not as you describe it. I have no negotiations with Ian Stewart in my capacity as president of the jetfoil.

MR. LAUK: He speaks very highly of you.

HON. MR. SMITH: I speak highly of him, too. But I had no negotiations with him, so even if he were my third cousin, my association with him had nothing to do with the leases or the negotiations. I didn't negotiate with him. Those negotiations were done before I assumed the mantle of admiral of the Marguerite.

MR. LAUK: Is the Attorney-General suggesting that he had no discussions with Mr. Stewart with respect to this project? Did you have any discussions with Ian Stewart with respect to the jetfoil project and how the steamship company would leave the minister of transport's hands and come into yours in short order? That was never discussed?

Could the Attorney-General make a clean breast of it this morning and tell us what happened here? Surely the Attorney-General had a discussion with Mr. Stewart, who was negotiating for jetfoil, and the discussion included the transfer of responsibilities for B.C. Steamships to himself. Surely the Attorney-General can give us that information?

[Mr. Strachan in the chair.]

HON. MR. SMITH: Well, it's a Josephine Tey scenario lovely fiction — but it wasn't so. As a matter of fact, the first I heard about my duties in charge of the Marguerite was when I was told upon my return. I was out of the city and I had no idea I was going to be put in charge of the Marguerite. I had no forewarning of it. If you had suggested that to me a month ago I would have been clearly and frankly surprised, and I was surprised but delighted when I got the responsibility.

MR. LAUK: Do you mean to say that Ian didn't tell you about it?

MR. DAVIS: Mr. Chairman, I hate to interrupt the exchange between these learned gentlemen, but as a lowly engineer I thought we should get back to the estimates of the Attorney-General and not try to pillory either the Attorney-General or others with respect to some particular conversation which he may or may not have had with another person.

Ours is increasingly a litigious society. I'll call it a lawyer-ridden society. We've got many more lawyers in this country per thousand of population than most other countries on the face of the earth, with the exception of the United States. I understand that the number of lawyers practising in Canada and the United States per 100,000 population is 20 times that of Japan, six times that of Sweden, three times that of West Germany. There are several reasons for this. One is that we continue to pass more laws. Every time the Legislature meets, it passes more laws. Executives, cabinets, pass a host of regulations which increasingly relate to each law we pass.

So we have laws passed in the public view in forums such as this chamber, the legislatures and the Commons, and then we have laws, or at least regulations with the force of law, passed behind closed doors in cabinets or by executives. Every year the number of these dictates rises; they go up in the thousands year by year. Very few laws are withdrawn, are struck from the statute books, and many of them are old laws which didn't have regulations attached to them. The number of regulations out there is multiplying faster than the number of laws, and as most people know — at least those who have been in the courts — regulations have the same force as law in the courts.

So more and more the individual, the Canadian citizen, the British Columbian, is surrounded by laws and regulations, which they've never seen and rarely understand. They may be surprised that they're infringing one or more of these laws or regulations when they are, in fact, charged. So this is a real concern.

1, for one, have been in favour of a bill of rights and freedoms, because it sets out in the Canadian charter clear guidelines as to the rights and freedoms of an individual, and what the freedoms are which we basically enjoy. There are many laws out there that have been passed over the years which infringe or impinge on these individual rights and freedoms. I understand that legislation will shortly be coming into this chamber, hopefully to eliminate a number of laws that are in obvious conflict with the bill of rights and freedoms. That's all for the good. This is one of the reasons why I'm glad we have a bill of rights and freedoms.

Many lawyers, especially older lawyers, were opposed to the bill of rights and freedoms because it was charting a new course, opening up fresh ground. It wasn't the kind of background they had. But as time goes by, of course, there will be a whole series of cases before the courts. Case law will develop, and the lawyers will develop a vested interest in the new bill — eventually the old bill — of rights and freedoms.

[ Page 5523 ]

So there will be a limitation on some of the laws we've had to observe in the past. Some of them will be struck off the statute books because they're in contradiction with the freedoms which fundamentally we believe we enjoy in this country.

Why do we have so many lawyers? One reason is the greater number of laws and regulations. But another fundamental reason is that in the English-speaking world, indeed throughout much of the western world, confrontation has been the way of resolving disputes, of dealing with disputes; whereas in the Asian countries — in Japan, for example — they don't have lawyers mostly because the mode is to get the warring parties, the parties with differences, together. The art is much more one of reconciling their differences through a mediator than the two parties to the dispute hiring lawyers who have a vested interest in keeping the war going. That is another reason. One is the great mass of laws and the other is the very different manner and tradition in which disputes are resolved.

I know that there's some movement in this country, indeed even in this province, to hopefully resolve differences through what I'll call mediation, and so on. I'd appreciate it if the Attorney-General might comment, however briefly, on that possibility of our resolving more of our differences — individual to individual, individual to corporation and corporation to corporation — by the mediation approach; resolving differences in a reasonable way and with both parties eventually going away, if not satisfied, feeling that perhaps the right thing was done, rather than going away with one winning and the other wounded.

Behind the scenes there's been a certain amount of this kind of thing happening: I'll call it plea-bargaining. The previous Attorney-General stood up in this House and said: "There's no such thing as plea-bargaining in British Columbia." Now plea-bargaining is a situation in which the lawyer for one party gets together with the lawyer for the other party in a dispute, and they themselves come to some understanding. One will reduce the severity of the charge if the other will give up. In other words, they'll come to some accommodation. This is not done in the full glare of public opinion. It's not done out in the open in the courts. It's presumably not done with the full knowledge of the judge or judge and jury. It's done behind closed doors. This practice is becoming quite general, especially in the United States. The main reason it's becoming quite general is that the courts are so clogged up with cases that many of these disputes are not being resolved; they're simply being put off month after month, indeed year after year. So plea-bargaining occurs, certainly in the United States, and I think it is taking place increasingly here.

Judge Nemetz, Chief Justice of British Columbia, who and I'm reading from the Globe and Mail of May 4, 1984 considers himself to be liberal-minded, except in cases of violent crime, says he generally opposes plea-bargaining and would not want to see it become as common in Canada as in the United States."

"In plea-bargaining the defence lawyer and the Crown negotiate for a guilty plea to a reduced charge, thus doing away with the need for a potentially long and costly trial. The Chief Justice" — that's the Chief Justice of B.C. — "says plea-bargaining may one day face a constitutional challenge under the Charter of Rights and Freedoms for putting the administration of justice into disrepute."

I've implied disrepute by saying these deals are made in private, not out in the open, after an action has begun and proceedings have been underway some time, often in the courts themselves.

"The Chief Justice realizes that those who bargain pleas in the United States say the court system would grind to a halt if guilty pleas after negotiations did not vastly reduce the number of trials. He admits negotiations have value in some instances when the Crown cannot prove guilt beyond a reasonable doubt. In those cases the best the prosecutor can do is bargain a conviction.

"The problem the Chief Justice sees is that the judge usually does not know whether there has been plea-bargaining, and no statistics are available to show how extensive it is. He's concerned that it might be growing and suggests a federal-provincial investigation or a study by the Law Reform Commission of Canada."

[11:30]

From what Chief Justice Nemetz says, plea-bargaining is a fact. It may not occur as often in this province or in Canada as it does in the United States, but it's of growing concern to him — and I suggest that it is a fact in this province. I certainly know firsthand of several situations in which plea-bargaining did in fact occur. So I can't agree with the previous Attorney-General, who said that there was no such thing as plea-bargaining in British Columbia.

Class actions, a modem development, indicate a move away from concern about individuals as such toward group action. There is now a body of law developing which sees whole groups. Many of these groups may be totally innocent of an infraction or crime, yet the whole group is subject to a penalty or a conviction. I'm concerned about class actions. I don't know whether the Attorney-General would be prepared to comment on that. Victims of crimes are a great concern.

Native land claims. I really can't understand the basic philosophical approach of the opposition with respect to native land claims. The opposition does not perceive property to be a right, or the ownership of property to be a fundamental right. This has been the traditional position, certainly of the NDP: that the right to property or the ownership of property may be a fact, but it's not one of the fundamental rights. It's not currently in Canada's Charter of Rights and Freedoms. Despite the fact that the federal government of the day initially wanted to include it, it wasn't in fact included, and largely because the NDP in the federal House dug in its heels in respect to that particular concern. Here, with respect to native land claims, the NDP is claiming that land claims are somehow sacred.

Land claims have to do with property, and one day I would like to hear, not from the Attorney-General but from the other side, how philosophically they bridge this gap between no fundamental rights to property for me or most other Canadians, but somehow land claims are sacred and held above all other law in respect to native Canadians. I don't differentiate between Canadians, native or otherwise.

Mr. Chairman, I see from your motions that my time is running out. I would also like to have asked the Attorney-General about this latest court ruling about tax-free purchases on reserves, but I'll sit down and listen to what he has to say.

[ Page 5524 ]

HON. MR. SMITH: The member has raised, in a thoughtful way — as he usually does — a number of important issues.

His comments on the number of lawyers: without having the per capita breakdowns or the comparison of those breakdowns, Canada has 35,000 lawyers in practice. British Columbia has 5,412 members of the Law Society, not all of whom practise. Most lawyers in British Columbia are located in the lower mainland. We don't have very many lawyers in this Legislature, unlike the House of Commons in Ottawa. We're rather thin on the ranks of lawyers.

Interjection.

HON. MR. SMITH: That's right; I think the electorate is probably discerning.

The comments that he made on the Charter of Rights are appropriate, because we'll be introducing a number of charter amendments after the recess.

His comments on plea bargaining. Plea bargaining is always, I think, an issue that's probably very misunderstood. In some jurisdictions plea bargaining is done with the judge involved. In this jurisdiction, if there is plea bargaining it often amounts to a discussion in front of a judge as to the appropriate range of sentences. It doesn't usually involve a bargain. I don't think plea bargaining is practised in British Columbia in the odious sense. There are some cases, it's true, where charges are laid and then they are reduced later on the basis of evidence. It's true also that in some cases charges are laid, and those charges are withdrawn or stayed in return for that person cooperating and giving evidence, furnishing information to bring to justice other persons who are the more serious kingpins in the crime. I know of cases where we've given immunities to unindicted co-accused in return for their testimony.

I think there's a pretty high level of integrity practised by the prosecutors that work under our administration. They only reduce a charge if the facts and circumstances warrant it, not because somebody that they know happens to be representing the accused on the other side or because they don't want to work on a Friday afternoon. They do it in the best interest of justice. We could probably discuss plea bargaining at considerable length.

I am glad to see that he expressed concern for the victims of crime. I have tried to strengthen our concern for victims of crime in the ministry, to have a victims' committee established, to have a structure whereby we could develop better policies that are sensitive to victims and meet the needs of victims, that inform victims about the process, that deal with them when they're going through the judicial process, which is often strange and hostile to them. I don't think that we've had a very good record in Canada in the past 50 years in the field of victims' rights, and it's only just recently, I think, that we're discovering that area of responsibility. It may well be that both the legal profession and the police have not been sensitive enough to the rights of victims. But I certainly detect that that's changing, and I thank the member for his very thoughtful comments.

MR. BLENCOE: I want to go back to the Marguerite issue, if I may, Mr. Chairman. Unfortunately I wasn't able to be here to get the earlier discussions, but there are some other questions that I would particularly like to have some answers to. Perhaps the minister will give us some responses.

One of the major components of Island Jetfoil and the Island Research and Development Corp., which are connected, is that the Island Research and Development Corp. and its subsidiaries have acquired $60 million in tax credits — a substantial amount of money. Consequently, this means that in many respects, Island Jetfoil Corp. and its subsidiaries will be a public company in terms of having to report certain things. The public, I hope, will be able to find out some of the details of what we think is something we need to get to the bottom of.

In light that the public is involved and public money is involved, I'm wondering whether the minister can confirm that the auditors for Island Jetfoil Corp. and the auditors for the B.C. Steamship Co. Ltd. are the same — Thorne Riddell Inc. Both companies have the same auditor, one company having taken $60 million dollars of public money in tax credits, and the other, of course, being the B.C. Steamship Co. Ltd., which is a public company. Does the minister see any conflict of interest in the fact that we have two companies, one supposedly a private company using public money, having the same auditors and therefore having to make reports on two companies? Does he see any conflict or any public conflict in this particular issue?

HON. MR. SMITH: No, I don't think so. It's common to have auditors, and I don't think they present the problems that a lawyer would have dealing in a transaction between two parties — one selling and one buying. I don't think that auditors do. I did question that at the time, and if it does present any suggestion of a conflict, we'd make changes on that. If there is a problem in it, we would change the auditor. I did inquire into that, and it didn't appear to present a problem, and I'm told that it's not uncommon practice.

MR. BLENCOE: It may not be uncommon practice, but we're dealing with two public companies here, one which is about to go alongside the Marguerite, which is dearly loved and has a special place in this community, and a jetfoil company that has acquired $60 million in tax credits. It's now known that Mr. Ian Stewart, a well-known associate of the Attorney-General, having worked in many capacities for the Attorney-General, is on the jetfoil board and is well connected to that entire operation — and they have the same auditors. I think he would be concerned, more than just asking a few questions, that we have the same auditor for the two companies. There is a potential conflict of interest, and I think the minister should say a little more about this particular issue.

HON. MR. SMITH: Well, he keeps making assertions about $60 million of tax credits. Apparently he constantly intermixes the jetfoil with the research company. I'm not responsible for their financing or their funding or whether they have $60 million or $100 million. I'm not going to answer questions relating to that.

As for the choice of auditors, the auditors were selected by the directors of the corporation. Advice was sought on the appropriateness of having the same auditors — legal advice, I might say, was sought, Mr. Member. If it presents any difficulties of real or apparent conflict, then that will be addressed. But the auditors are not managing the company or advising on business transactions. The auditors are dealing with the books and financial statements of the company.

[ Page 5525 ]

[Mr. Ree in the chair.]

MR. BLENCOE: We will probably have more to say about that in due course. I want to move to a different aspect.

I am wondering if the minister would confirm for this House whether the new consultants for the B.C. Steamship Company are Marine Design Associates.

[11:45]

HON. MR. SMITH: No, I cannot, but I will be glad to furnish you with that information.

MR. BLENCOE: The reason I ask, Mr. Chairman, is that my understanding is that the consulting firm in place now is one that recommended the retirement of the Marguerite in 1980. I am wondering if the minister will be able to bring that information back to the House too.

HON. MR. SMITH: No, I can't shed any light on that. But as I say, I will bring the member that information.

MR. BLENCOE: I assume you heard my last question.

HON. MR. SMITH: Would you repeat it, please.

MR. BLENCOE: I would like you to confirm that the firm I named was the same consulting firm that recommended the retirement of the Marguerite in 1980.

HON. MR. SMITH: Yes, I will confirm that if it is correct. I don't know that it is.

MR. BLENCOE: I want to move on to a different area in terms of the jetfoil operation. I am wondering if the minister can inform this House whether he has the rationale or the reasoning why the jetfoil has made a decision to run under a U.S. rather than a Canadian flag.

HON. MR. SMITH: No, and I can't tell you whether they paint their bottom red or blue, nor do I care.

MR. BLENCOE: Well, I would suggest, Mr. Minister, that you in your position as chairman of the B.C. Steamship Company, having given a lease to this company to take a very useful position alongside the Marguerite, would want to find out about that particular aspect. Victoria is struggling in terms of unemployment. We need as many jobs as we can get. I would have thought you would be interested to know whether this particular vessel, which you have granted a location alongside the Marguerite, is going to fly under a Canadian flag or a U.S. flag, and be proud to be a Canadian ship rather than an American ship.

HON. MR. SMITH: That's the old party line. If you had some concern about jobs in this community you wouldn't be so negative about the jetfoil all the time. Even your friends on Victoria city council wanted it in the Inner Harbour. Everybody wants it there. It's not my business to inquire into their operation. It's not in my terms of reference to do so. If you're so interested, you inquire.

MR. BLENCOE: Mr. Chairman, I think that's an unfortunate position to take. There's an opportunity here to have a major employment opportunity for Canadians on this side, and I would think the minister would have tried his best to ensure it was a Canadian ship, not a U.S. ship.

The House resumed; Mr. Speaker in the chair.

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

ENERGY AGREEMENT

HON. MR. ROGERS: Mr. Speaker, it's about ten minutes to three in Ottawa, ten minutes to two in Regina, ten minutes to one in Edmonton, and it's ten minutes to twelve here. With some luck, my two colleagues from the government of Alberta and the government of Saskatchewan are able to make the same announcement as the federal Minister of Energy in Ottawa.

I'm pleased to announce that British Columbia, along with Alberta and Saskatchewan, has concluded the energy negotiations with Ottawa that began last October. The negotiations, though long and at times difficult, have been well worth the effort and have now been confirmed by the four cabinets involved.

In a sense, these negotiations began in October 1980, when Ottawa unveiled the national energy program. That program involved a massive intervention by the then federal Liberal government into Canada's energy sector. Energy prices were determined by administrative fiat and a number of new taxes were introduced, most notably the petroleum and gas revenue tax, known as PGRT, which was really a quasi-royalty on what was up to that point considered to be a provincial resource. As well, a number of incentive programs were introduced, most notably the petroleum incentive program — popularly known as PIP — which directed the investment away from the western sedimentary basin of Western Canada's oil and gas lands toward the so-called Canada lands, which includes offshore Atlantic Canada and the Arctic.

Through energy negotiations and agreements in 1981 and 1983, some of the more undesirable elements of the national energy program were eliminated. With this energy agreement that I am announcing today we have essentially put the national energy program behind us, and with it all of its negative characteristics. From British Columbia's perspective there were two major issues to be negotiated: oil pricing and the federal fiscal regime for the energy sector.

Over the last number of years, oil prices in Canada have been determined by a complex and inflexible administrative procedure designed to provide one made-in-Canada price for oil. I am pleased to announce that effective June 1, 1985 crude oil prices will be deregulated in Canada. Oil prices will be determined not by the federal government but by the marketplace. Producers of oil will be assured of getting a fair share on their investment and will have increased flexibility in marketing their product. In moving to deregulated oil pricing, we have ensured that consumers will be adequately protected in the event of sharp increases in the price of crude oil. Specifically, the government of Canada, in consultation with the provincial governments — something which didn't happen in the previous administration — will take appropriate measures to protect Canadian interests. Also, Canada's long-term supply of Canadian crude is protected by licensing arrangements which have been agreed to.

[ Page 5526 ]

Turning for a moment to the fiscal regime, a number of incentives have been agreed to which will significantly improve the health of the oil and gas sector in British Columbia, and will stimulate investment, provide jobs and enhance energy security.

In 1984 approximately $100 million was transferred from the oil and gas industry in British Columbia to the federal government via the petroleum and gas revenue tax. With the energy agreement I am announcing today, this tax will be eliminated. Specifically, the PGRT, now at an effective rate of 12 percent, will be phased down to zero by January 1, 1989. It will be at an effective rate of 10 percent between January 1, 1986 and December 31, 1986, dropping to 8 percent during 1987 and 6 percent during 1988, at which time it stops. For the production of oil and gas and gas liquids from new wells, as of April 1, 1985 PGRT will go to zero.

For natural gas consumed as a result of the following projects in British Columbia, PGRT will not apply: the Vancouver Island natural gas pipeline, the Canada LNG project, the ammonia facility proposed to be added to the Ocelot petrochemical plant at Kitimat and the proposed world-scale ammonia urea fertilizer project. The last negotiated achievement is particularly significant for British Columbia, where there are significant quantities of shut-in gas and limited market opportunities. No PGRT on these projects could involve up to 80 billion cubic feet of natural gas not being subjected to this tax.

The petroleum incentive program — PIP — will be terminated one year from today. With provisions for grandfathering, all PIP expenditures will be terminated within three years. Further, Ottawa has agreed that any new incentive programs will be of general application and not involve discrimination of locations or activities as to ownership and control. As a result of these measures, the west will no longer be paying for investments in Canada Lands, and we can expect to see increased investment in British Columbia.

In addition to the above, there are also measures to assist the exploration and development companies which are not currently paying corporate income tax. Most of these are Canadian companies. As well, a number of other federal taxes will be removed or eliminated. Specifically, the natural gas and gas liquids tax, including the natural gas export levy — currently at zero — will be taken off the books. As well, the incremental oil revenue tax will be eliminated. Further, the Canadian ownership special charge, the crude oil export charge and the petroleum compensation charge will be eliminated.

Now that this new energy pricing accord is in place, federal Energy minister Pat Carney and I have agreed that we can move quickly on other energy issues which are of common interest to us. We have instructed our officials to bring forward by May of this year revised, calculations for the subsidy required for the Vancouver Island natural gas pipeline in light of this new agreement. I continue to be optimistic that Ottawa will honour its commitment to the people of British Columbia on this important project.

In conclusion I would like to assure the House that this agreement represents some very positive news for our oil and gas industry and for the people of British Columbia. This industry has been hampered for far too long by a punitive tax regime, and I'm confident the measures outlined in this agreement will lead to renewed investment and activity in this important sector of the provincial economy. Mr. Speaker, I thank you for the opportunity to make this statement.

MR. SKELLY: We appreciate the fact that the minister has made this statement in the House. We realize he's had some agreement in timing between the other ministers across Canada and the national Energy minister. However, in cases where ministers do make statements to the House, especially statements of this nature and importance, it would probably be of some advantage to both sides of the House if the courtesy of a briefing could be given to the opposition in advance of the statement being made. It would help us to make an informed response. We realize that in these cases nobody should seek political advantage out of these types of things, and that assurance would naturally be given to the government if a briefing were offered to the opposition.

I think that before making any kind of definitive response to the minister's statement, we would have to take a careful look at the agreement and a careful look at the material that has gone into the agreement. We would appreciate an opportunity to meet with the minister to examine the documents and, perhaps, to have some briefing relative to the discussion. So again thank you to the minister for making the statement to the House first. We look forward to meeting with the government to discuss the contents of the agreement.

MR. REE: Mr. Speaker, your special committee appointed on March 4, 1985, to prepare and report lists of members to compose the select standing committees of this House for the present session begs to report that the following are the lists of those members. I move that the report be taken as read and received.

Motion approved.

MR. REE: I move that the report now be adopted.

On the motion.

MR. HOWARD: Certainly we'll proceed to adopt the report, and thus establish the membership on the committees themselves. I only want to make one comment, and that is that the ratio of membership representation on the various committees does not reflect the true relationship of numbers in this chamber. In other words, it is not appropriate, I think, to have committees structured in such a way that in all instances on the committee the government arrogates to itself to have twice as many members on each committee as there are for members of the opposition. It's most disproportionate.

Much more valuable within the context of the need for cooperation is the recognition that in order to have cooperation, those that have the power — namely government — should dilute some of that power once in a while in order to ensure that cooperation

Motion approved.

HON. MR. NIELSEN: Mr. Speaker, before moving the motion, I would like to advise the members and the general population, who are very interested in knowing, that our

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minister who just offered his message is also celebrating his birthday today, so it is a special time for him.

To coincide with the so-called spring break and the Easter festivities for members, I move the House at its rising do stand adjourned until 2:00 p.m., April 9.

Hon. Mr. Nielsen moved adjournment of the House.

Motion approved.

The House adjourned at 11:59 a.m.