[ Page 6167 ]

CONTENTS

Oral Questions

Hospital bed closures. Mrs. Dailly –– 6167

Mr. MacWilliam

Vancouver School District. Mr. Barnes –– 6167

Bingo Operations. Mr. MacWilliam –– 6168

Commissioner of critical industries. Mr. Stupich –– 6168

Vancouver Transition House. Mr. Reynolds –– 6169

Social Service Tax Amendment Act, 1985 (Bill 11). Committee stage –– 6169

Mr. Stupich

Mr. Skelly

Mr. Passarell

Hon. Mr. Gardom

Mrs. Wallace

Mr. Mitchell

Third reading

Gasoline (Coloured) Tax Amendment Act, 1985 (Bill 9). Report

Third reading –– 6173

Insurance Premium Tax Amendment Act, 1985 (Bill 14). Second reading

Hon. Mr. Curtis –– 6173

Mr. Cocke –– 6173

Mr. Stupich –– 6173

Hon. Mr. Curtis –– 6174

Insurance Premium Tax Amendment Act, 1985 (Bill 14). Committee stage 6174

Third reading

Resolution 56. (Hon. Mr. Gardom) –– 6174

Hon. Mr. Gardom

Mr. Howard

Hon. Mr. Gardom

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

(Hon. Mr. McClelland)

On vote 44: minister's office –– 6176

Mr. Mitchell

Mr. Passarell

Mr. Barnes

Mr. Michael

Royal Assent to bills –– 6183

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

(Hon. Mr. McClelland)

On vote 44: minister's office –– 6183

Mr. Skelly

Mr. Williams

Mr. Davis

Mr. D'Arcy

Mr. Gabelmann

Mr. Howard

THURSDAY, MAY 16, 1985

The House met at 2:04 p.m.

HON. MR. CHABOT: I'm very pleased this afternoon to introduce in the galleries His Excellency Kokougan Apaloo, ambassador of the Republic of Togo, and Mrs. Apaloo, and Mr. Gary Tarrant from Calgary.

MR. R. FRASER: In British Columbia we're all very proud of the volunteers who serve our community and our athletes and our senior citizens. Last night it was my pleasure to attend the 1985 Gymnastics and Trampoline Sports Championships being held at the University of Victoria by an organization that has some 500 volunteers and some 44 corporate sponsors. Representing that group today in our galleries is Mr. Don Peachey, the organizing chairman. Would the House please make him welcome.

MR. REID: Mr. Speaker, it's with pleasure that I introduce a couple of very special friends of mine in your gallery today: Karey and Nancy Graye from Saanich.

Oral Questions

HOSPITAL BED CLOSURES

MRS. DAILLY: Mr. Speaker, in the absence of the Minister of Health, I'll relate the question to his parliamentary secretary, but I don't think I see him here; is he away also? Is there somebody who's the assistant or replacement to the parliamentary secretary of the minister? Who would I direct this to — could you help me, Mr. Speaker? All right, I shall direct it to the Provincial Secretary.

This question has to do with the St. Paul's Hospital, which has been forced by government cutbacks to consider closing 278 hospital beds for ten days in August. Has the minister, or whoever I'm relating this to, decided to approve this action, pursuant to section 41 of the Hospital Act? I will perhaps explain to the person who answers: the minister is the one who has to give approval for any closure of hospital beds. So I'll read that one again. Has the minister decided to approve this action, pursuant to section 41 of the Hospital Act, or has he decided to restore the $600,000 budget shortfall?

HON. MR. CHABOT: On behalf of the Minister of Health (Hon. Mr. Nielsen) I will take the question as notice. I'm sure the Minister of Health will be prepared to give you a reply to these issues that you've raised, and give you all the details. I'll make sure that he gets the question at the very earliest opportunity.

MRS. DAILLY: I thank the minister for being the messenger. When you take the message, would you please relay to the minister — and I'm being very serious here — that this is urgent? I hope you relay the urgency of my question and we hope an answer will come back very quickly, if not to me and the members of the Legislature, at least to the public.

HON. MR. CHABOT: Absolutely.

MR. MacWILLIAM: I too have a question to the Minister of Health in absentia. The Vernon Jubilee Hospital, as a result of government funding cuts, has also been forced to initiate closures, in this case the closure of one-half of the surgical beds and the loss of three of the five operating rooms during the months of July and August. This will result in the cancellation of elective surgery and a significant increase in the waiting-list. Has the minister decided to approve this action, or has he decided to restore the $900,000 shortfall to the hospital?

HON. MR. McGEER: Mr. Speaker, on behalf of the Minister of Health I would be pleased to take the question as notice. I'm sure that in answering the question the minister will be addressing the normal workload of hospitals in the summer months as opposed to the winter months.

VANCOUVER SCHOOL DISTRICT

MR. BARNES: Mr. Speaker, I have a question for the Minister of Education. Now that the minister has imposed his own operating budget on Vancouver School District, will he advise when local democracy will be restored in the district of Vancouver?

HON. MR. HEINRICH: Mr. Speaker, I have not really addressed that issue, with respect to when there will be an election of trustees in the school district of Vancouver. There are other problems which are much more pressing at this time in the management and administration of the district. It seems to me, in view of what has occurred, that it would be in the interests of all of us to allow the official trustee to carry out his duties; in the interests of the children and parents of Vancouver, so they don't have to be continually subjected to the anxiety of those who perpetuated and continually created that anxiety, which was totally unnecessary — putting out to the public that we have to lay off 480 teachers and support staff, none of which is necessary, other than through attrition and a decline in enrolment.

MR. BARNES: Inasmuch as the minister gave me an unrehearsed response, perhaps I could ask him an unwritten question. I'll make it very simple. He is concerned about the anxiety that was produced as a result of the exchanges that happened between him and the school trustees. What will the minister do to remove the anxiety that the voters in the city of Vancouver and other districts will have with respect to their elected officials having the ability to carry out the mandate they were given, as in the case of the school district of Vancouver this year? In other words, will you be firing those school trustees in the future or will you guarantee that no trustees will be fired in the future, to alleviate any possibility of anxiety on the part of the voters?

MR. SPEAKER: That indicates future action, hon. member.

HON. MR. HEINRICH: Mr. Speaker, all 73 school districts have submitted compliance budgets; two decided to defy the law. The position which we have taken is that the rule of law is paramount. We have no intention of subscribing to the view of the members opposite; that is throwing gas on the embers of anarchy, which seems to be exactly what was going on in the Vancouver School Board — on the steps of the Vancouver board. It's not necessary.

[ Page 6168 ]

MR. BARNES: My question, Mr. Speaker, again to the the minister, is very specific. What guarantees do the voters have that you will not in future interfere with their rights to have their elected officials carry out the mandate they were elected to carry out? In other words, will you be firing school trustees in the future? Is that the way it will be in the province of British Columbia in the future? He is not addressing that question, Mr. Speaker.

MR. SPEAKER: Order, please, hon. member. The question itself is out of order, in that it implies future action on the part of the minister.

BINGO OPERATIONS

MR. MacWILLIAM: Has the Provincial Secretary received the report he requested on the emergence of large-scale organized commercial bingos and gaming-houses which have opened in B.C.? Secondly, has he decided to table that report in the House?

HON. MR. CHABOT: In answer to the first question, no. The answer to question number two is no.

MR. MacWILLIAM: In view of the fact that the minister has fired four of the six bingo inspectors and withdrawn supervision and inspection of the commercial operations, what action has the minister taken to restore some semblance of control over the commercial gaming-houses?

[2:15]

HON. MR. CHABOT: I don't want the member to leave the impression that there is no control. I don't know if there are any violations either, because the member made some allegations here in the House a couple of weeks ago and was going to present me with some evidence of irregularities in the operation of bingos in this province, but he's failed to do so.

It's very nice to make cheap statements under the immunity of this House, but then when you're called upon to deliver, you fail to do so. I think it's most irresponsible on the part of a member of this House to make those kinds of allegations in this House and then not be able to produce. You failed to produce.

I want to say that the question of additional inspectors for lotteries or bingos in British Columbia is under active consideration, but there will be no action until such time as I receive the report from the officials in my ministry. It will more than likely be a verbal report to me. At the moment, it's anticipated to be in my office this afternoon. Then we can move.

I answered your colleague who is taking over from you when you're away, from Victoria, about the issue of an inquiry. In case that's your next question, the answer is that there is no need for an inquiry in British Columbia.

MR. MacWILLIAM: I have here three signed statements respecting the operation of organized commercial gambling houses in British Columbia. These statements deal with possible infractions with regard to the regulations presently in effect. I have instructions to the minister to make these statements available to an impartial inquiry only. With this in mind, will the minister now reconsider his position? The statements are available.

HON. MR. CHABOT: The answer is no in that respect. I want to say that I had an inspector in the Okanagan; I'm not going to identify the community. I will be receiving a report, as I said this afternoon, about the inspections of some of those operations in the Okanagan. If I find from that report that there are any infractions, I'll take the necessary action.

COMMISSIONER OF CRITICAL INDUSTRIES

MR. STUPICH: If I may change the subject, a question to the Minister of Finance. The minister knows that a number of firms in B.C. are facing financial hardship — in part, I submit, as a consequence of excessive tax increases coupled with cutbacks and layoffs by the provincial government. Why has the government decided to restrict the activities of the critical industries commissioner to the forest and mining industries?

HON. MR. CURTIS: I think that subject was pretty carefully dealt with at the time of the establishment of the office of commissioner of critical industries. It was seen by the government, through that process and through the consideration which led to the establishment of the office, that those two industries — because of their great dependence on international world markets and the severity of the decline in those markets for the two activities, mining and forestry — were in need of the kind of assistance which would be offered by the office of the commissioner and his very small staff.

I cannot suggest today one way or the other with respect to the addition of other industries to the commissioner's duties, but I think it's fair to say that the government, through this process, is examining the efficiency of the process and the way in which the commissioner's office is assisting industry. It's very early, it's a very young office, and I will want to have more experience with it, as I know that my colleagues in the executive council will want to have more experience with it, before making any decision with respect to leaving it precisely as it is now structured or adding to its duties over time.

MR. STUPICH: Mr. Speaker, tourism is our second or third most important industry. The B.C. Hotels Association has asked that their industry — the hotel industry — be added to the critical list because of the large number of liquor licences handed out by the government, apparently for political reasons. What consideration has the minister given to the request of the B.C. Hotels Association?

HON. MR. HEWITT: Say that outside and name names.

HON. MR. CURTIS: I don't carry the responsibility for liquor administration in this province, but I know my colleague is somewhat exercised, and I share his concern. That "question" contained a fairly serious challenge, and I wonder if the member would care to discuss that at some length beyond the confines of this chamber.

MR. STUPICH: The minister missed the question, and I'll repeat it. What consideration has he given to the request of the B.C. Hotels Association to be added to the critical industries list?

[ Page 6169 ]

HON. MR. CURTIS: There is no doubt that in much of western Canada the hotel-motel industry has been experiencing difficulties. It is not unique to British Columbia. I have not carried that request to the executive council at this point in time. Whether I do or not in the future, sir, is a question of future policy. I am aware of their concern, and I point out that the problem is felt not only in British Columbia but also in Alberta, Saskatchewan and even, surprisingly, in Manitoba.

VANCOUVER TRANSITION HOUSE

MR. REYNOLDS: Mr. Speaker, as parliamentary secretary to the Minister of Human Resources (Hon. Mrs. McCarthy), I would like to respond to a question I took as notice yesterday from the member for Burnaby-Edmonds (Ms. Brown). The question regarded Vancouver Transition House, and the minister's answer is as follows:

"It was with regret that I heard of the board's decision to cease operating this resource. However, the ministry respects the board's right to decide which services it will offer, and I have every confidence in the board's decision. This decision by the YWCA does not change my ministry's commitment to provide help to women and children in need.

"Assistance with emergency shelter and counselling is available from all ministry offices. There are currently 32 emergency shelters or transition houses operating in the province. In the lower mainland alone there are nine resources. Counselling and support services continue to be available through social workers in ministry offices and through community resources.

"Presently there are 96 emergency beds in the Vancouver lower mainland region, and there are only 10 beds being closed at Vancouver Transition House. On average there are 15 vacancies at all times in the lower mainland region."

Mrs. Johnston, Parliamentary Secretary to the Minister of Energy, Mines and Petroleum Resources, tabled an answer to a question.

HON. MR. SMITH: Mr. Speaker, the member for North Okanagan (Mr. MacWilliam) was raising certain allegations a few minutes ago which I listened to. I would urge the member to bring forward any evidence he would have of those allegations so that they can be dealt with by my staff, instead of making such allegations in this chamber only.

MR. SPEAKER: Hon. members, with the greatest respect, that is an obligation that the member himself must undertake and cannot be instructed so to do by the House.

Orders of the Day

HON. MR. GARDOM: Mr. Speaker, I call committee on Bill 11.

SOCIAL SERVICE TAX AMENDMENT ACT, 1985

The House in Committee on Bill 11; Mr. Strachan in the chair.

Section 1 approved.

On section 2.

MR. STUPICH: Mr. Chairman, I asked the minister briefly about this yesterday in second reading. Is it really increasing the tax? Is it simply clarifying something that was vague before — that is, the delivery charge with ready-mix concrete? It would seem to me there would be no need to do it unless it was levying an additional impost on the construction industry, which right now doesn't really need any of that kind of help.

HON. MR. CURTIS: This really is a clarifying amendment. This practice has been in place. In the majority, firms were paying; in the minority, some were not. Therefore we have taken the.... So it's not new, but it is clarification. Those who were not paying will undoubtedly not be pleased, and those who were paying will see that justice is being done.

Section 2 approved.

On section 3.

MR. SKELLY: I'm a bit concerned. There are a number of subsections in this section, and one of these provides for the taxation of pay television services — applying the sales tax to pay television services. There is some concern....

MR. CHAIRMAN: Hon. members, please, from both sides of the House, there appears to be an awful lot of noise here. It is really detracting from the debate as it's proceeding. Could we please have some order.

MR. SKELLY: There is some concern on the part of pay television operators that adding a tax to the services they provide is going to make things very difficult for a new and expanding industry in Canada and in British Columbia. This makes it difficult to attract new subscribers, because it adds substantially to the cost. I understand that this is going to add $1.5 million to government revenues from what is essentially a growing industry in western Canada.

We would suggest to the Minister of Finance that this is not a desirable tax. In fact, it makes it much more difficult for this industry to survive, an industry that has committed itself to providing some stimulus to culture and the arts in Canada. Taxing it makes it far more difficult for that industry to thrive, and difficult for them to subsidize some of the cultural developments that are taking place. We see that in British Columbia there's a growing movie industry and that we're attracting investment by movie producers from all over the world, and particularly from the United States because of the advantage provided by the value of our dollar. This is one of the industries that is promoting the Canadian movie industry, and we feel that it's counterproductive to employment to tax this industry at a time when it's just growing in this province. We would question the Minister of Finance as to what his reasons were for levying this tax on a growing industry and what alternatives there were to this kind of tax.

[2:30]

HON. MR. CURTIS: Mr. Chairman, this is section 3(e)(z.92), which deals with cable-television services. The Leader of the Opposition will recall that we looked at a host of suggestions to lower taxes and to raise taxes as a result of the tax study, which occupied the best part of two months,

[ Page 6170 ]

around the province last year. One decision that I made immediately was that I would not in any way tax basic cablevision service. The member has not suggested that, but I just want to put in perspective, as I did yesterday with the member for Nelson-Creston (Mr. Nicolson), that I certainly could not in any way consider the taxation of that basic service.

Mr. Chairman, the Leader of the Opposition might like to know that or might indeed know that pay-television is taxed in the province of Manitoba. That may not change his mind. It certainly is taxed in most provinces, with B.C. now added. It is taxed in all provinces with the exception, I'm informed, of Alberta and Nova Scotia.

It was seen as a discretionary service. The member for Nelson-Creston made the point yesterday, as did the Leader of the Opposition today, that it has an educational aspect, but it also has an entertainment aspect. Certainly it speaks to, if I may say so, my general philosophy with respect to taxing those items which are discretionary, not basic. I understand that the pay-television industry — speaking to this section — is not happy about it. I didn't think they would be; indeed, I would have been astonished if they had said that it was a good thing, long overdue. But the hardware that is used in some pay-television — that is, the remote-control unit — is already taxed. The member would understand that. But, Mr. Chairman, it is not an unusual tax now across Canada.

MR. SKELLY: I suppose maybe that's our concern, Mr. Chairman. If the minister was doing with the revenue that he generates the same kinds of things Manitoba is doing with the revenue they generate, there would be thousands more people working in the province of British Columbia right now. That's the difference between what's happening in this province and Manitoba. So the comparisons aren't equal. In Manitoba taxes are generated and then used to create employment. As a result, things are much better in Manitoba right now than they are in British Columbia.

Our concern is that if you constantly levy taxes on virtually everything that's happening in the province, especially on a growing industry like this, when other aspects of your policy are designed to thwart economic development, this creates even more of a problem. That's our concern with this additional tax on pay-television services. The pay-television companies in the province of British Columbia and in western Canada have agreed, as part of their conditions for getting their licence, that they will encourage the development of film and television industry in western Canada. That's something we should be encouraging. If any fiscal stimulus should be applied, Mr. Chairman, it's in this area.

We realize that the difference in Manitoba is that they apply a fiscal stimulus in a different way, and they are encouraging the creation of new employment. I wish we had the unemployment rate that Manitoba has; we'd all be a lot better off, and we wouldn't have to raise taxes like this today.

MR. PASSARELL: Mr. Chairman, I'd like to discuss with the minister subsections 3(b) and 3(c), where it makes a statement in the explanatory note: "Portable buildings will no longer be taxable." I'd like to pose a question to the minister. Many of us who live in northern communities have our homes on skids. For instance, at the house in Atlin I have a chicken coop, a greenhouse and a house, all on skids. Now it says here in the subsection: "Portable buildings will no longer be taxable." Does that mean that on your assessment no longer will you have to pay taxes if a house is on a skid? Because I know your tax assessment does list, let's say, outbuildings as part of the property taxes.

The second thing is trappers' cabins. Often trappers' cabins are put on skids too. They're portable; they move around. Is the minister now making it so that all trappers' cabins that are movable in the bush will no longer be taxable? Those are two questions I direct to the minister.

HON. MR. CURTIS: To the member for Atlin, this deals with sales tax. It has nothing whatsoever to do with property tax. The member is on the wrong tack in this regard. I could expand on it later, but this has nothing to do with property tax.

MR. PASSARELL: That's fine, but if I'm going to build a new house in Atlin, and I put it on a skid, I don't have to pay sales tax on any material that I'm using for a portable building?

HON. MR. CURTIS: Mr. Chairman, we canvassed this yesterday in second reading. We had an appeal to the court with respect to the portable building question. The decision was handed down in May — in fact, just one year ago — that portable buildings were tangible personal property and were subject to tax on the sale or lease price. What we're doing here, Mr. Chairman, through this amendment, is reverting to that which has been in place for a good long time in B.C. — that is, the practice of taxing the materials that go into a portable building only — whether on skids or whatever — not on the finished portable. The court case forced us to bring this amendment; that is why it's here. We did not want to further tax portable buildings. The court case overthrew the earlier law in this regard.

MR. PASSARELL: I just need one more clarification on that. You say " non-taxable"; no sales tax for portable buildings. If I'm going to build a new house in Atlin, and I want to go in and buy stuff for the new house, and I'm going to tell the contractor, or the supply house, that I'm buying all this material for a portable house.... I'm going to be building a new house up in Atlin, and I'd like a little letter from the minister. If this is true, I'll build a portable house and won't have to pay any sales tax on any of the material. I'm sure there are a lot of people.... There has to be some clarification on what a portable house is. If you don't want to, that's fine; we'll just take a bunch of letters, and nobody will pay sales tax in Atlin, which we shouldn't have to pay anyway.

HON. MR. CURTIS: Mr. Chairman, the member has missed the point; I don't say that unkindly. We'll be happy to explain it this afternoon, if you wish to deal with officials or with me. We do not want the tax to be applied on the completed building; that's what the court case said had to be done. You pay the tax, depending upon what material it is, Mr. Member. You pay the tax, whether it's for a portable building or a three-bedroom full-basement house, Some materials are tax exempt and others are not, but that's got nothing to do with this.

This amendment corrects the situation in which we were placed, when the court case said: all the materials are put together in a portable building, and the building itself is sales taxable; we don't want that. That's what this amendment

[ Page 6171 ]

achieves. So we're returning to that which has existed for a good number of years.

HON. MR. GARDOM: I'd just like to make one observation concerning item (e), Mr. Chairman, dealing with bottles that are used to hold milk products. I only wish that Mr. Ev Crowley had lived to see this amendment. I certainly know that his son and Mrs. Jean Crowley will be delighted to see this. It's been advocated for some time, and I'm glad that the Minister of Finance has now succeeded in making it a reality.

MRS. WALLACE: I am sure there are a lot of returnable milk bottles in use these days, so it's really a big item for the minister to make that concession.

I would like to ask the minister why he has seen fit to include returnable milk bottles and basic cablevision equipment in exempt, and has not seen fit to include the equipment that is used by volunteer fire departments.

HON. MR. CURTIS: Well, Mr. Chairman, that isn't in this section. I used to sit on that side of the House, and the Chairman and the Speaker of that day wouldn't let me talk about what wasn't in a section. Mr. Chairman, I have difficulty answering a question from the member for Cowichan-Malahat (Mrs. Wallace) about matters which are not in this section in committee. Now if the member....

Interjection.

HON. MR. CURTIS: That's a non-question. Mr. Chairman, if the member wants to launch an attack in the debate on my estimates, which will occur in August or September, or whenever, later this year, then I'll be happy to discuss with her and other members why some items are taxable and some are not. But I feel constrained, dealing with section 3, in terms of why something else is taxable.

Madam Member, you said — and I appreciate you said it in good humour.... If you think returnable milk bottles is not a big item, boy, I'd like you to see the mail I had last year. It was a very....

MRS. WALLACE: Dollar value.

HON. MR. CURTIS: Oh, dollarwise, no, it's not a large amount of money. But I think we spent a fair amount of the public's money answering the letters which inundated my office. I dreamed occasionally of returnable milk bottles. They were walking past....

Section 3 approved.

On section 4.

MR. STUPICH: Mr. Chairman, I spent some time yesterday discussing six years as opposed to four. The minister has since issued an invitation for me to meet with him and discuss it. I accept with pleasure, and I believe our respective secretaries are working out the details. I didn't really expect that this change would be made this year. I think it's something that we should look at; perhaps it's not wise that we go from ten years down to four all in one jump. It is a subject that I will want to bring up again, and I look forward to discussing it with the minister.

[Mr. Ree in the chair.]

Sections 4 to 7 inclusive approved.

On section 8.

MR. STUPICH: Again, I raised this very briefly in second reading. I'm wondering whether the minister has reason to believe that the instances of wilful failure to remit tax have increased, that there is a substantial volume. Is that why this and other related sections are included in the legislation?

HON. MR. CURTIS: It has been on the increase. I think that the information I received in the course of reviewing all that we'd heard in the tax study and from the series of officials' meetings that occurred later.... We've seen this trending over a number of years. It has reached a point where I think the tougher penalties are appropriate.

It has to be seen in lock-step with the amnesty program, which is not in this section. It is alluded to in the explanatory note. Amnesty has been undertaken elsewhere in North America with some interesting results. It's a little early for me to comment on that. But there has been a slow and steady increase in wilful evasion of declaring tax payable or, more particularly, in the case of the social services tax, collection of the tax from the consumer and then deciding not to forward it to the Crown.

MR. STUPICH: When we discussed this yesterday, I raised the question of the number of auditors. I believe the minister said that he was giving active consideration to the possibility of having more sales tax auditors out in the field.

HON. MR. CURTIS: Mr. Chairman, I will commit to have the information the member wants when my estimates are called. I understand his interest in that, and I'll have it.

Section 8 approved.

On section 9.

MR. MITCHELL: Mr. Chairman, I'm not sure if it's section 9 or section 11 where they bring in the penalties. It's not so much what the particular piece of legislation says or the publicity that is being given to it, but from what I feel it may say — and I would like some confirmation from the minister of my reaction to it — it's kind of tightening up a lot of the regulations. I know from experience and a lot of correspondence that took place between my office and the minister's office and various groups....

They started to enforce the collection of the 7 percent sales tax from the Boy Scouts' sale of Christmas trees. In a broad discussion on the collection of sales tax with members of the minister's staff, it was mentioned quite strongly that we have a whole grey economy out there, in which people are dealing in garage sales, church bazaars, church rummage sales and community group rummage sales, and no one is collecting sales tax. There are a lot of complaints from second-hand stores and groups within the retail trade who feel that the ministry should be tightening up and going after this revenue.

[2:45]

[ Page 6172 ]

I feel that some of the wording in there may be a hidden bomb that is not being brought out to the public. Is it the minister's intention to go after some of the money that is being lost in this grey economy? I believe we were all given an amnesty; I'm not sure if it's run out. Last year I bought an outboard motor from my neighbour, and I paid $200. Now should he have collected sales tax on that sale and am I in jeopardy, when I walk out of the House, of having this evidence used against me in a collection? If the minister's intention is to go after all the private sales that are made between neighbours, that are made by church groups, community groups and garage sales, get up and say that this is what they want to do: that they want to tax that economy to get the revenue. I quite believe that if you take that attitude and that threat....

I remember being active one time in a community organization where we used to put on boxing shows. Ministry officials came down every little boxing show we had to collect the amusement tax. We had to keep the first ticket we sold and the last ticket we sold, and we had to pay whatever the amusement tax was on that community show. If this is what we're going to go back to.... It's too bad Hansard was not in operation in 1952, because I opposed it then. Somewhere down the line the Ministry of Finance of those days got rid of the amusement tax for community groups. Are we going back to another type of tax on little community groups, on church groups or on garage sales in the neighbourhood? Is this the thin edge of the wedge, the tightening up of the regulations? That's a thought with some of the officials that I've talked to; is that thought going up from the officials or coming down from the government? I've heard from one of his colleagues that they too have received complaints from the people in the retail industry; those who run legitimate second-hand stores are saying that their sales are down because people are buying their second-hand goods at garage sales.

Is this what the government really wants to do? Are they going to set up this whole bureaucracy to go out and pick on little family groups that are making money? I'd like something on record to know where we're going to go, and if that fear is out there.

HON. MR. CURTIS: First, with respect to the sale and purchase of an outboard motor, I am not here to offer the member the kind of advice which he could get from any official in the Ministry of Finance consumer taxation division, or indeed from his own caucus research. Or if the member for Skeena wishes, he can come to my constituency office and we'll be happy to assist him in that regard. That's for the member to determine, not for me to advise.

Interjection.

HON. MR. CURTIS: Mr. Chairman, I hear an interjection from a member who is not in her seat: "What does the law say?" I think we're all required to know what the law says.

No, I assure the member seriously and very directly that we have no intention of using this or any other section to move into that incredible area of garage sales and sales of goods by societies and organizations, other than those which are in place now. The Christmas tree one is very frustrating, I think, to a number of us on both sides of this House, and I'll be looking at that again, Mr. Member. So let's not get into that debate today, if you don't mind.

Quite apart from how it would be received, quite apart from the foolishness of attempting to do it, the cost of going around to every garage sale in the province of British Columbia, whether small or large, with an official from the Ministry of Finance, or a government agent, to collect 7 percent sales tax on those items which are taxable in another area — that is, if they are sold by a commercial enterprise — would represent sheer lunacy in terms of proper utilization of government employees. I have no intention of sneaking behind this to do that. If anyone has suggested that within the consumer taxation division of the ministry, I'll make it very clear. I'll send them a copy of Hansard from this afternoon. It is not in the cards. It's not something the government seeks; it's not something the government is studying; it is not something I would personally countenance.

What may have happened, because in the course of the tax tour we did receive some submissions from individuals who said that these garage sales are really getting very large and very regular.... These were people speaking to us. This was not a question of our offering a view to the individuals who came along to those tax meetings all across the province. They spoke about them; fair enough. It was an open season on any tax topic. I know also that the member is correct when he says some second-hand stores are concerned with respect to the proliferation and regularity of garage sales. They seem to occur quite often in certain areas. But I am not interested under any circumstances in moving to that area of taxation. That's the bottom line; no equivocation; absolutely, flatly, positively no.

MR. MITCHELL: I'm quite happy that I have that assurance from the minister that it is not going to be the thin edge of the wedge. But I still can't understand why we even got that thin edge of the wedge when they started picking on Christmas trees. You may say that that has nothing to do with it. But it still was a method that community groups, Boy Scouts groups and all types of groups used to raise money. Much to their surprise, they were nailed with an inspector, the regulations were read out and all kinds of interpretations were given.

I'm not going to go on to Christmas trees. I'm glad that he's going to review it. I know that you're not going to have collectors going to every garage sale, but once you start hitting one, two or three, the rest of the public are going to get into line and submit. I know, as one who years ago got into line and submitted.... But so long as I can have that assurance from the minister, it's on record that if things change, then we know that we can quote the minister's statements that Christmas trees were the end of the line and there's nothing else.

HON. MR. CURTIS: Mr. Chairman, with respect to garage sales, again, no. Whether it could be done by long distance, by telephone or by whatever means, it's not in the cards. I can't make a more straightforward statement to the member on that point.

The Christmas tree situation I will review. It's a very contradictory situation. I'll be happy to discuss it with that member or any other member of the committee at any time. But I expressed my frustration with it, particularly at Christmas 1984, although I think it also surfaced at Christmas 1983. I can't promise a solution; I can't promise an easy

[ Page 6173 ]

solution. There isn't such a thing as an easy solution here. You see, the point that is made by some is that some of the non-profit sales of Christmas trees are very big business. I want to address it. I won't be addressing it in the next few weeks, but I hope to address it before Christmas 1985.

Sections 9 to 16 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Strachan in the chair.

Bill 11, Social Service Tax Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Mr. Speaker, with leave, I call report on Bill 9.

Leave granted.

GASOLINE (COLOURED)
TAX AMENDMENT ACT, 1985

Bill 9, Gasoline (Coloured) Tax Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 14.

INSURANCE PREMIUM TAX AMENDMENT ACT,
1985

HON. MR. CURTIS: Mr. Speaker, amendments to the Insurance Premium Tax Act are introduced in Bill 14. I move second reading of that bill.

The amendments are for the purpose of increasing the rate of tax for general insurance premiums and also to extend the tax to include marine insurance for pleasure craft. The rate of insurance premium tax on general insurance premiums — property, liability and other non-personal items — is being increased from 2 to 3 percent. The rate of tax on life and personal health insurance premiums — sickness, personal accident and wage indemnity policies — remains at 2 percent; there is no change. This tax rate structure is similar to insurance premium tax rates now in place in Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia.

The increase in the general insurance premium tax rate is scheduled to take effect on January 1, 1986, in order to allow insurance companies to plan for the rate increase when establishing annual insurance premiums. As such, no increased revenue will be collected during the 1985-86 fiscal year. The increase in general insurance tax is expected to generate $5.8 million in additional revenue for the following fiscal year, 1986-87.

Insurance premiums for pleasure craft which are insured by marine insurance policies and are not included in personal property policies will become subject to tax. In order to allow insurance companies to plan for this change, the application of tax to marine insurance for pleasure craft takes effect on January 1, 1986. The tax is going to be phased in in this instance, at the rate of 1 percent for 1986, 2 percent for 1987, and the general property insurance tax rate of 3 percent for 1988.

This measure will have a rather minimal revenue effect, but it will ensure uniform taxation of insurance premiums for pleasure craft. Mr. Speaker, taxation of marine insurance will not be extended to premiums for commercial vessels, and I think that point should be emphasized.

In summary, these amendments are necessary to provide consistency with the taxation of general insurance premiums in a number of other provinces in Canada, and for the taxation of pleasure craft. I move second reading.

[3:00]

MR. COCKE: Mr. Speaker, one of the things that I should bring to the House's attention is the fact that the tax increases every year in any event. My experience over the many years that I have been purchasing general insurance has been that the rate increase has gone sky-high, so we are getting that increase in any event.

I'm not opposed to the increase to 3 percent, because it does put us in line, but I'm really surprised that the life lobby is as strong as it is. I had expected that the life insurance premiums would have been treated in exactly the same way. I've had some experience with them, and I know they're a pretty strong bunch, something like the doctors. But strong to the extent of excluding life insurance from this increase! I realize that elsewhere in this country they've managed to be excluded from the increase mainly because of the fact that they have a very strong lobby. They make great sounds and put forward arguments that for all intents and purposes are great arguments. But, Mr. Speaker, I was somewhat surprised that it didn't happen that the life insurance premiums were treated in the same way as general insurance. Normally at least sickness and accident always used to be considered under the casualty line. Life insurance, of course, has a "savings element," and probably that is one of the reasons it was excluded, but there's no such element as far as sickness and accident are concerned.

We're supporting the bill, but as I say, I'm somewhat surprised, and I'll look forward with pleasure to what the minister has to say in his closing remarks on second reading.

MR. STUPICH: Mr. Speaker, I want to talk a little more generally about it. It is significant, in that of all the tax increases imposed by the minister in this budget.... There haven't been very many; I grant him that. I suppose there must have been the temptation to try to get more revenue. After all, this is the third time in a row that he has introduced deficit budgets. The one he introduced in 1983 was the first one in some 45 years in the province of British Columbia. So I could see where he would be trying to find ways of cutting down that deficit. Although the amount to be raised is the second-largest.... Leaving aside the B.C. Rail, which I believe is a special situation, it's still the second-largest increase, and I'm wondering why at this time.

The minister does say that it's bringing it into line with other provinces, but I wish we could bring other things into line with other provinces. I wish we could bring our unemployment rate in line with the other provinces. I wonder too whether those provinces increased their rate at the time of

[ Page 6174 ]

greatest economic depression. It seems to me that the timing could have been better. It could have been better to have done this when things were going well in the province, rather than to load it on the backs of many people who are going to have to pay higher insurance premiums on very low insurances maybe — property that's low in value — so it's not going to hit them very much individually. But it's just one more way, it would seem, of extracting money.

The minister said that he had these representations during the hearings all around the province. Did anyone suggest to him that one way of making up some of the losses he was experiencing in the other areas was to increase by 100 percent the rate of tax...? I'm sorry, that was 100 percent for marine. In this instance it's a 50 percent increase in the rate of tax. Did anyone suggest that to him? Did that come out of the hearings? I can well imagine that someone might have suggested increasing the tobacco tax. It could be argued that people who are smoking are not paying nearly enough tax to make up for the added cost on the rest of us for the health facilities that must be maintained because of all these smokers. So that might well have been done. But did anybody suggest to him that one way of making up the shortfall was to increase the tax on insurance premiums?

DEPUTY SPEAKER: Pursuant to standing orders, the House is advised that the minister closes debate.

HON. MR. CURTIS: Mr. Speaker, to the member for New Westminster (Mr. Cocke), the most important change here, I think, is not the increase in general property — and I will speak about that in a moment — but rather the introduction of a nominal, modest insurance premium tax for pleasure craft. I think that, again, is in line with ability to pay. Certainly it seems to me to be fair.

I can tell both members that I had no lobby one way or the other. The "life insurance lobby," to use your phrase, Mr. Member, didn't come before the tax hearings. I'm almost certain of that. I don't recall any — not even an individual who came from the life insurance industry.

Similarly to the member for Nanaimo (Mr. Stupich), no, we didn't have anyone who suggested this as a revenue source. This came about as a result of the final, if I may use the phrase, debriefing through which the five of us went after concluding the tour. We had made a number of recommendations with respect to those taxes which should be reduced and which have been dealt with in other bills, and then I had to start considering how to increase revenues in some other ways. This was seen as one which was relatively painless. So we're moving into a new field, marine insurance premiums. I made the conscious decision not to get into life in general. That was a decision made within my office in terms of not wanting to intrude on that.

Mr. Speaker, I move second reading of the bill.

Motion approved.

HON. MR. CURTIS: Mr. Speaker, with leave I move that the bill be referred to a Committee of the Whole House forthwith.

Leave granted.

Bill 14, Insurance Premium Tax Amendment Act, 1985, read a second time and referred to a Committee of the Whole House for consideration forthwith.

INSURANCE PREMIUM TAX AMENDMENT ACT,
1985

The House in committee on Bill 14; Mr. Ree in the chair.

Sections 1 to 3 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Strachan in the chair.

Bill 14, Insurance Premium Tax Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Mr. Speaker, I call Resolution 56 standing in my name on the order paper, which I will read into the record:

"That the Special Committee of Selection appointed on March 4, 1985, be empowered to appoint a special committee to select and unanimously recommend the appointment of an ombudsman, pursuant to section 2(2) of the Ombudsman Act, and that the special committee so appointed shall have the following powers: (a) to appoint of their number one or more subcommittees and to refer to such subcommittees any of the matters referred to the committee; (b) to sit (i) during any period in which the House is adjourned and during any sitting of the House, and (ii) to adjourn from place to place as may be convenient; and shall report to the House on the matter referred to it during this session, or following any adjournment of the House, or at the next following session, as the case may be."

I so move, Mr. Speaker.

On the motion.

MR. HOWARD: Mr. Speaker, I'd like to make a few comments with respect to the motion and, of course, by doing that indicate our endorsement of it. In fact, we would have endorsed it a month ago or a month and a half ago or at some earlier time. We would have preferred the motion to have been dealt with earlier than this moment, because we feel that the special committee, which will be assigned the task of making a unanimous recommendation with respect to the ombudsman, should not feel pressured by time; should not feel under any compulsion to do something in a hasty way. We have a concern that the office of the ombudsman may become vacant by default, which would be a regretful thing to have happen. I need, therefore, to refer to the Ombudsman Act in that regard to indicate to you how I think this vacancy could come about by default.

Section 3 points out that "the ombudsman shall be appointed for a term of six years...." Our research branch of

[ Page 6175 ]

the New Democratic Party caucus tells me that that six-year period will expire at midnight, June 30, which is not too many weeks from now. When we reach section 7 of the bill, I think a very ready construction can be placed upon it: that the office of the ombudsman might become vacant if a decision is not made by the 30th and if other factors are operative at that time, namely.... Let me read from it. Subsection 7(l) says: "Where...(b) the office of ombudsman becomes vacant for a reason other than by operation of subsection (2)(c)...." Subsection (1)(c) is the potential suspension of the ombudsman, or the office of the ombudsman becomes vacant when the House is not sitting, and the like.

I submit that when we put those two together there is a possibility, if on June 30 the special committee has not made its determination, and has not made a report to the House about this matter, and the House is not sitting — we don't know that — that by default a vacancy will be created. The term of office will have expired. I think the office of ombudsman is far too important to be left in any doubt or in any question, or for there to be any uncertainty about the necessity of having the office filled on a continuous basis.

As I read the act, there are certain things that only the ombudsman himself, or herself, can do. If that office becomes vacant by default, some aspects of the activity of the office of the ombudsman come to a dead stop until a replacement takes place. I think it's far too important to have that element of uncertainty existing there. The office, of course, is also far too important to have people, members particularly, railing against the office and raising questions about its authenticity or its function, either directly or indirectly.

I've heard the argument, and others have, that MLAs used to do the work of the ombudsman before the office of ombudsman existed, and that MLAs now do some of that type of work. That's quite true. Problems, situations and cases come to the attention of members, and every member tries assiduously to see that justice is done with respect to whatever those complaints are.

But there are certain disadvantages facing an MLA. Ordinarily an MLA has no power to investigate the complaint, except by way of being a supplicant and phoning a department and asking for information; by contrast, the act setting up the ombudsman gives that specific authority and power. An MLA has no power of access to documentation; an MLA can't go and look at records and files or anything of that sort; an MLA has no power to take evidence or to discuss the matter with witnesses or whatever the case may be; there is no possibility of making a formal report to the House or to Mr. Speaker about instances. There are a number of authorities and powers that the ombudsman has, by virtue of the very fine statute that was passed by this House a number of years ago, that permit the ombudsman to function in a much better way than can a mere MLA, who doesn't have those authorities, those powers of access to information and the ability to look at records and to be able to make some formal reports if the question may arise.

[3:15]

1 think, Mr. Speaker, if I could, in dealing with the value of the office, quote a few sentences to indicate how important this office is. This is a quotation:

His basic function — with respect to the ombudsman — will be to investigate complaints from individuals who feel aggrieved by the administrative processes of government. Where there's been an inequitable decision to an oppressive practice, it will be the job of the ombudsman to make inquiries, to gather all necessary information. Then if the decision or the practice has not been corrected, he will be enabled to make appropriate recommendations to the authority concerned, to the cabinet or to this assembly itself.

He's required to maintain confidentiality of information that is received by him in the performance of his duty, but he's empowered to publicize his findings, which will ensure on both counts the best of service before the general public.

...to any people who may see the advent of the legislation as a disadvantage to government or to the public service, I would indeed respond very much to the contrary, because it will be welcomed as a means whereby members of the public can be satisfied as a result of an investigation of a third impartial adjudicator that their affairs are being handled equitably and their affairs are being handled fairly.

There are a number of other quotations in a similar vein, all delightfully and properly phrased, indicative of the heartfelt feeling that the originator or speaker of those words had and still has about the office of ombudsman. The quotation is that of my colleague immediately across from me, the Minister of Intergovernmental Relations (Hon. Mr. Gardom), spoken in this chamber on the occasion of the introduction of the bill, when he held the office of Attorney-General. Those words will stand for all time, in my mind, as being declaratory of the purpose and function and value of the ombudsman.

I think the committee probably needs to look at what should be the qualities of an ombudsman, apart from the obligations by law. Those qualities, I think, need to be that the person must be intellectually very capable and very competent. Even though the ombudsman himself does not need to examine each and every case that is brought to the office of ombudsman, he should have that intellectual capacity to be able, if necessary and if required, quickly to read files to assess the evidence and the information and come to a conclusion readily about what that problem might be. He needs to be intellectually strong and intellectually very able and very competent.

And the ombudsman has been the experience in other jurisdictions.... I recall, when I read the speech made in 1977 of the Attorney-General of the day, that he had occasion then to introduce the person who was then the ombudsman in Ontario, Arthur Maloney, QC, now gone — a delightful person, a person of intellectual ability, a person who was determined, strong, fair, gutsy and prosecuted the office of ombudsman in Ontario to the full without fear or favour. That's what we need to have in the quality of ombudsman, wherever that office might exist: someone who is determined, committed, able to stand up to government if that necessity arises, able to ferret out the truth if it is denied to him, and without fear or favour able to deal with the problem brought to the ombudsman's attention in a fair and a just way. Those are absolute qualities, and there should be no dilution in our minds as to those being the qualities we seek in the person for that office, remembering that the ombudsman represents the citizens of this province — not the government of this province, not the legislature of this province, not the power structure of this province, but the citizens thereof. When the special committee is appointed, which I hope is soon, I hope it will come to a conclusion fairly quickly, because I would not want to see by default the office of ombudsman become vacant by the process that I mentioned before.

There is, and it seems to me.... I hope it isn't an expectation, but there appears to be in the motion the thought that perhaps the special committee, which is sought to be coming into being shortly, may not be able to conclude its

[ Page 6176 ]

deliberations by the end of June, because incorporated within the motion is that the special committee can report either during this session or following any adjournment of the House or at the next following session, which might be next year. As I say, I hope that that is not put in there as a sort of guidepost for the activities of the special committee.

But if the occasion does arise whereby, because of the circumstances of time or the functioning of the special committee, or because of its deliberations, or because of the desire of the government to adjourn the House for any reason over an extended period of time — and that's the prerogative of government.... If, because of any of those factors, we find the force of the Ombudsman Act comes into play and that office is vacant by default, then the Lieutenant-Governor-in-Council has the authority to appoint an acting ombudsman in that circumstance. I would submit that if that arises, the Lieutenant-Governor-in-Council has no alternative, without equivocation and without question — not placing any doubt whatever in the minds of anybody — and has no other obligation, I submit, but to appoint the present ombudsman in an acting capacity. There's no other choice available. To do otherwise would indicate that politics prevails with respect to the ombudsman. That should never be permitted to be the case.

DEPUTY SPEAKER: Pursuant to standing orders the House is advised that the minister closes debate on the motion.

HON. MR. GARDOM: I'd like to thank the hon. member for Skeena for his kindly observation. The talk that he was referring to was one that I gave on August 15, 1977. I've had occasion now to reread it. You know, you're absolutely correct: it was a very good talk indeed. I think we'll have to take it as read for the purposes of Hansard and historians, or anyone else who may be interested in the topic. But I did make a couple of points that I think bear repeating.

To any people who may see the advent of the legislation as a disadvantage to government or the public service I would respond very much to the contrary. I said it would be welcomed as a means whereby members of the public could be satisfied, as the result of an investigation by an impartial adjudicator, that their affairs were being handled equitably and fairly — which is a point that was emphasized by the hon. member for Skeena. That, of course, is one of the principal concepts and one of the obvious qualifications for an ombudsman as a person who can represent the conscience of the state, provide additional service for our citizens, move aside the bureaucratic roadblocks, wade through the red tape, approach the unapproachable and recommend improvements to administrative practices and procedures, because the realm of the ombudsman is certainly within that administrative jurisdiction and that administrative arena.

The person in question — again quoting from that talk of this nameless individual of August 15, 1977.... It was an evening sitting, I well remember that. I also well remember my good friend Arthur Maloney sitting in the gallery. He was very impressed with this legislation. I may say — and I think he would like to have it noted publicly — he considered the act that was brought forth in British Columbia to be the best act of its kind in Canada.

I made this point concerning the qualifications of the individual to the office. It's obviously a position that is open to a well-trained individual, a person with the highest standards and of the greatest integrity and — I said in response to the hon. lady member from Burrard, as it then was — of either sex. Indeed, the function is one that is open not just to a man but to a woman as well.

I think the concerns of the hon. member for Skeena as to whether the function would be continuous or not are ones that he really should not be too troubled about. I think it's clearly contemplated within the spirit of the act, and indeed the spirit of the office, that we would not have a vacancy in the position. If the committee was unable to conclude during the time-frame in question, there would be the appointment of an acting ombudsman, because there is a responsibility that the office continue — from its statutory conception if nothing else. Furthermore, Mr. Speaker, I feel that the committee will be able to proceed with all dispatch.

Perhaps I could make a public suggestion now that when the committee of selection meets, the hon. opposition House Leader and I both be members of that committee. The committee of selection was, of course, a committee formed on opening day. Perhaps Her Majesty's Loyal Opposition could bring their three names to the committee, and I will certainly endeavour to see that the government will bring their names to the committee. It's no secret now for me to mention that I have brought the question as to whether or not the hon. member for Prince Rupert (Mr. Lea) would like to be a member of the committee, and he expressed in the affirmative. So I did make the motion in opening. If you need me to reiterate I shall do so, and I move the resolution.

Motion approved.

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

[3:30]

ESTIMATES: MINISTRY OF INDUSTRY
AND SMALL BUSINESS DEVELOPMENT
(continued)

On vote 44: minister's office, $196, 94.

MR. MITCHELL: Mr. Chairman, there are two particular industries in my riding that I sincerely hope the minister and his ministry will take a very close look at. One is Sooke Forest Products, which I have spoken on in this House on many occasions. In spite of what the minister may believe — what he said earlier this morning in debate with one of my colleagues — this is a forestry matter. The industry of this province is not the sole jurisdiction of one minister.

We as the elected Legislature and the minister as a member of the cabinet must realize that we cannot have a solid industrial workforce if there is not 100 percent cooperation with both...with all ministries. We could go through the Finance minister, through Energy, through Forestry, but what we have to look at in that particular industry is the financing cost. We all know — and this is shared by those in the forest industry — that Sooke Forest Products is one of the most efficient mills in operation. It is a high-state-of-the-art industry in what they get out of a log, how they run the operation. It has all the new innovative machines that are needed to compete in a very tough industry.

[Mrs. Johnston in the chair.]

[ Page 6177 ]

But somehow that particular operation was allowed to drift. I brought it to the Minister of Forestry's attention that you cannot run an operation like that without an assured, affordable log supply. It was allowed to drift because there was not the cooperation needed by the government to make sure logs were made available. Logs were not allowed to be bought up and exported to the other markets. There has to be that cooperation, making sure that the resources of this province are made available to create the workforce that is needed in any community; in my particular case, the community of Sooke. That mill has been allowed to grind to a halt. I'm not saying that their methods of financing were wrong, or that one particular bank was a little more vindictive than was needed, but what has happened is that the whole community of Sooke has slowed down. Businesses are going bankrupt because the workforce of 150 to 200 people are not spending money in the community.

The minister has a heavy obligation to keep on top of communities, keep on top of industries, to make sure we don't have that drift; that we don't have communities going broke; that we don't have people losing homes. It's nice to set up a critical industries commission, but it's far better to act before it happens. It's far better that the minister speak up in his own cabinet to make sure he has the clout to coordinate, talk and meet with the established industries that are there to review them, to give suggestions when needed. If he doesn't take that responsibility, we're going to have other companies in other communities suffer the same fate as Sooke.

I'm hoping and praying for each one of those employees who are out of work today, for that whole community that needs that revitalization. They need that positive economic stimulant to the community before more people go under. When my colleague for Vancouver East talked about our present Ministry of International Trade and Investment, he said that the ministry in Japan had the same initials: MITI. They coordinate every company, their resources and investment. You know, you are the junior representative of the same type of philosophy: we must have cooperation, we must have coordination and we must keep jobs in operation.

The other company the minister referred to was the Victoria Plywood co-op that has started. As one who has gone through the various trials and tribulations with that particular group of people — and many of my friends have invested in that — I think there are still problems facing that particular co-op. I think one of the major problems that they are going to face in the plywood industry is the great market of beautiful fir knot-free plywood that a lot of us used to buy and build cupboards with and then paint it so no one really knew what was underneath it.

The main market today is not for the clear plywood, but it is for the finished panels. It doesn't matter really what type of a panel it is, but it has to be finished when it is put on the wall. This is the new technology that this particular mill, like all the plywood mills, is going to have to recognize and start phasing in now to get that market and provide the product that will allow them not only to continue in operation but also to enlarge.

The minister, through his staff, should start the consultation and the cooperation that is needed now, while all the enthusiasm is there and the operation is going. They should start looking at changing over now, not waiting until it goes down and becomes another statistic of an industry that tried to take shortcuts but didn't succeed.

We just can't allow one more company, especially in my riding, to go that route. I think it's important that that consultation, that input from the minister and the studies and the research that is available to the government is made. The groups that are involved should be consulted with, and they would move onward and upward. Through you, Madam Chairman, to the minister, we should start that consultation, start that research and try to get the Sooke Forest Products going. They have a great group of people there. They have had some excellent cooperation from the company that owns the mill, the CPR. They have been given all the breaks and the cooperation, but let's not just leave it there. Let's not have media hype while it's starting, and let's make sure it keeps going.

What type of input is his ministry prepared to give to companies like that, to employees and to communities.

HON. MR. McCLELLAND: Madam Chairman, we'll continue to support the opportunities for companies like Victoria Plywood. I hope the member will also continue to work with us in a cooperative way to ensure that industries within the communities, which all of us as MLAs represent, will continue to be supported as much as possible.

The Sooke Forest Products matter — of course the critical industries commissioner is looking at Sooke Forest Products. We'll do whatever we can to help him in his recommendations when they come forward and to develop the programs that we hope will be able to be tailored directly to those companies. Again, I must emphasize that we're not interested in propping up non-viable industries. We are, instead, hopeful that all of the people within the communities, whether they be labour, management, government, suppliers, purchasers or whoever, can work together to make sure that viable industries can continue to be viable in our community.

AN HON. MEMBER: A helping hand.

HON. MR. McCLELLAND: That's right, it's a helping hand. It's not government imposing restrictions or making impositions on companies, rather we would like to be the person who gets everybody together. Cooperation is going to be the key to the future in our province, and I hope that that will happen in the two instances that the member has talked about.

I just wanted to say that there seems to be some kind of focus developing here with the forest industry over there and everything else over here in the development of the economy. That's not true. The forest industry is a vital part. As your colleague from Vancouver East suggested, it is our basic industry, and it will continue, in my opinion, to be our basic industry for as long as we can ever think about.

It's not a sunset industry. It's a vibrant industry which has every opportunity to grow, and we as government, you as opposition, and everybody in our province need to support that. It's not something else that's over there somewhere; it is a part of our industrial fabric in British Columbia. It is the reason, as a matter of fact, that the programs that we've put forward in our budget and in some of the bills that are going to be debated at a later time.... I won't comment on them, because that offends the rules of the House, Madam Chairman. Those programs are geared to the industrial benefits in the province.

[ Page 6178 ]

I'm told, having had a quick financial analysis done by some of my staff people, that 50 percent of all of the benefits which are contained in the budget and the other programs will go to forest-related industrial opportunities — 50 percent of everything that we're doing. Research and development, processing, manufacturing — those forest industries will benefit from those programs which we're putting forward now in this package.

One hundred million dollars per year, from 1987 onwards, will go into forest-related developments, whether it's through the corporation capital tax removal, which will mean ultimately, starting this year, something in the neighbourhood of half a million dollars, working up to $8 million per year.... The gasoline tax is starting with $5 million and working up to $6 million in the third year. The property tax revisions that this government has made will relieve the forest industry of something in the neighbourhood of $33 million this year, working up to $86 million in the third year, for a total, as I've said, of $100 million in relief of taxes.

Then add on to that, Madam Chairman, some of the programs which will allow for loans, other programs under the ERDA agreement and everything else, and you see a very significant, important and real commitment to the forest industry by this government — not as something other than everything else we're doing but as a vital, important part of the fabric of this province and, in fact, of this nation, because all of Canada depends on the development of our forest industry in British Columbia.

We have a real commitment to that, and it's not only a commitment philosophically but it's a commitment in dollars as well. In terms of the two things you mentioned, we'll be extremely interested in working, first of all, with Sooke in trying to solve that problem, and secondly with Victoria Plywood, making sure that that is not a flash in the pan or a short-term solution, but one which will be a long-term solution for employment in this region.

[3:45]

MR. MITCHELL: I wanted to endorse what the minister said, and I'm glad that he did listen to my colleague from Vancouver East, because it was my impression that he thought that the member for Vancouver East was talking in the forest estimates. As the member said....

Interjection.

MR. MITCHELL: He wasn't. He was talking about industry; industry, development and jobs in this province. You can't separate them, and I'm glad that the minister has come over to our view over the lunch hour. He does realize what the member for Vancouver East was saying: that we must cooperate.

Interjection.

MR. MITCHELL: He has converted you? Then I'm really impressed with the member for Vancouver East.

AN HON. MEMBER: You did the converting.

MR. MITCHELL: No, he was giving me the same lecture that the member for Vancouver East was giving to him, and then he gave it to me — that there is a need for cooperation.

Interjection.

MR. MITCHELL: Madam Chairman, will you have that cabinet minister make his own speech and not interrupt mine?

I really wanted to stress that there is that need for that cooperation, but there also must be some planning ahead. He seemed to miss what I said. For the last number of years we have allowed these companies to drift, and if the minister is going to pave some new roads and take a new tack in that particular ministry, it's so important that he work with all of the companies. There are two categories: (1) a company that has the top of the technical arts for production of lumber, Sooke Forest Products; and (2) another one that is becoming antiquated. We must upgrade the one, and that planning must take place right now.

I know a lot of people run off and hide when you start to talk about planning. But that economic planning, that job preservation, that change must take place in the product. It has to take effect now, and it has to be led by somebody. The minister has that particular responsibility, and I hope he accepts it.

MR. PASSARELL: Thank you, Madam Chairperson. It's good to see you in the chair, and I know that you're in good hands with the Clerk from Kicking Horse Pass.

I have three specific questions to address to the....

Interjection.

MR. PASSARELL: Order? Yes, we'd like some order here with regard to regional development in the northwest, and I have three specific questions to address to the minister.

The first one is the Stewart port expansion. Yesterday the federal government started to put signs around Stewart, stating that Stewart was no longer a port of entry with regard to shipping, customs and that kind of thing.

The Hon. James Fulton was able to discuss this matter in the federal House. The signs were held incognito for the time being, and it would be worthwhile for the government to pursue this matter and not allow the federal government to come into Stewart and close Stewart as a port of entry. Stewart is the most northerly ice-free port. The minister has been up there and he understands what I am talking about.

This was a decree that was made yesterday by the federal government, and the Hon. James Fulton was able to hold that back for the time being. I would hope that the minister would be able to pursue that on his level, because Stewart is an expansion port for the mineral developments in the far north, and the entire transportation link. It's of major importance, I think, for this government and all citizens of British Columbia that Stewart is used as an expansion of the ports.

The second issue I'd like to direct to the minister regards regional development and the application by the Nishga nation to use tree-farm licence No. 1, which is currently being held by B.C. Timber-Westar and has not been in production, per se, for the last two years. It would allow the native people to put people back to work. As the minister is aware, those reserves — Greenville, Kincolith, Canyon City and New Aiyansh — have 95 percent unemployment. Westar is not using its tree-farm licence properly, and as the Forests minister did say at one time: "Use it or lose it." The Nishga people would like the tree-farm licence turned over to the

[ Page 6179 ]

Nishga people; it's their land, they understand the consequences of forestry in this province, and it would be a boost to the regional development.

The last specific question to the hon. minister is transportation links in the far north. There are a number of possible major mineral developments in the far north, but they will not proceed unless there is some kind of transportation link in the far north. For instance, Stikine Copper is 40 miles from the closest road and then has to truck over to Dease Lake and then 250 miles down to the port of Stewart.

So there has to be some kind of regional development with regard to transportation, and I know the minister is aware of this and is probably as concerned as I am about the need for improvement of transportation in the far north.

Those are three specific questions: firstly, the need to expand the Stewart port and to stop the federal government from closing the port of entry of Stewart; secondly, the Nishga tree-farm licence; and, thirdly, the improved transportation link in the far north.

I think my honourable friend knows that I went four minutes and 35 seconds.

HON. MR. McCLELLAND: I've not heard about the matter of the Stewart port and the federal government. This is the first I've heard of it. I've asked my deputy to make sure that we find out what's going on. Our interest, of course, is to make sure that Stewart does become an opportunity for shipping, whatever developments we might be able to bring forward in that northwest sector of British Columbia.

I didn't quite understand what the member meant about keeping those signs incognito. Was that in Chinese? I don't know.

Interjection.

HON. MR. McCLELLAND: Okay, so they're hidden somewhere. Well, we'll try to make sure that wherever they're hidden we cover them with dirt or something like that.

Tree-farm licence No. 1. I'll contact the Minister of Forests (Hon. Mr. Waterland) and find out where we're at with that, and if there's an opportunity for that transfer. I'm also not that familiar with tree-farm licence No. 1. But I have had good meetings with the mayor of Stewart, Gary Hubbard, in the last ten days, and we talked about the way in which we think that.... We'll continue to try to develop those opportunities. There are a number of transportation issues particularly related to mining development in which we might be able to take some initial steps now: airstrips and some other things in some of the mining areas that would lead for us later to have more full-scale developments, which would lead to further opportunities for that whole northwest sector, including Stewart.

I'm fully sympathetic with the concerns of the member. We'll do everything we can to try to make sure that those opportunities are not lost by any actions of any other level of government, for sure. Again, I'm not aware of what has actually happened, but I will find out, and we'll try to turn that around a bit.

MR. BARNES: I would like to present to the committee a bit of information that is available in a study that was presented to the thirty-seventh annual general meeting of the Community Arts Council of Vancouver last September. It's entitled "British Columbia and the Arts" — the investment, the dollars, the jobs, etc. Under this particular ministry, Madam Chairman, I just wanted to raise this matter, hoping that the minister would indicate to the committee the strategy that his ministry may be considering with respect to the arts as one of the major industries in British Columbia, and certainly in Canada.

If we are to believe trends in the world, one of the graphs that I was looking at with respect to the arts.... This is a Stats Canada graph that was produced last April: growth in the arts labour force in Canada compared to growth in overall labour. The province of British Columbia has seen an 87 percent increase in the arts labour force, compared to 53 percent generally with respect to the overall labour force. This compares with a 53 to 50 percent increase in Newfoundland, a 112 to 32 percent in Prince Edward Island, a 69 to 32 percent increase in Nova Scotia, and a 62 to 33 percent increase in New Brunswick. Quebec has a 76 percent increase in the arts, over 38 percent generally in the labour force; Ontario, 65 percent to 33; Manitoba, 49 percent to 22; Saskatchewan, 61 percent to 23. Our neighbour, Alberta, has had an increase of 124 percent in its arts labour force, compared to a 75 percent increase generally in the labour force.

HON. MR. McCLELLAND: On a point of order, I really like listening to that member; he's one of the delightful members of the House. But this has nothing whatsoever to do with my ministry. I don't understand why we're doing it here. The Provincial Secretary (Hon. Mr. Chabot) is responsible for discussions and financing under arts and culture. I don't mind, but I'm sure that it offends almost every rule of the House.

MADAM CHAIRMAN: Hon. member, would you confine your remarks to the ministry.

MR. BARNES: I'm really very disappointed at the minister for coming down so hard on the arts industry like that. I appreciate that it is not normally considered to be part of his ministry because the arts are suffering so much. That isn't to say that the minister shouldn't consider the possibility that the arts are one of those industries that he as the Minister of Small Business Development, in his role in trade and in industrial development, and his general background and interest in the best economic direction for the province of British Columbia, certainly will appreciate the significance of these points that I wish to make. I am addressing myself specifically to those aspects of the arts as they relate to the economy, as they relate to business, as they relate to a healthy economic environment, tourism, the multiplier effect with respect to employment and all of these things. So I would hope that if the minister is serious when he says that I am out of order by raising this matter, he will reflect upon the need for change, the need for a more innovative view of things, and with that in mind would permit me to expand perhaps briefly — just as a compromise — on just a few of the submissions that were made. I will restrict my comments in light of the possibility of disagreement on what is clearly defined as being relevant under this ministry and just comment on the jobs aspect, because that is certainly something that that minister and his government have concern for.

If that is okay with Madam Chairperson, I will just proceed to make some of these points. I notice that the Chairman has not interrupted me, so I presume that it's okay.

[4:00]

[ Page 6180 ]

Madam Chairman, there are two distinct arts-related employment populations. Together they included about 414,000 workers or 4 percent of the Canadian labour force in 1981. In fact, arts-related employment is nearly as large as the agricultural labour force and total federal government employment, including Crown corporations, together. The first group is the arts labour force made up of workers who use arts-related skills in their day-to-day jobs, such as artists and arts technicians, including curators, librarians and camera-persons. Between the years 1971 and 1981 the arts labour force increased 74 percent from 156,455 to 272,640 — or 2 percent of the Canadian labour force, which as a whole increased 39 percent between 1971 and 1981. In British Columbia the arts labour force increased 87 percent compared with an increase of only 53  percent for the entire labour force, as I pointed out to you in the diagram earlier.

Madam Chairman, the second group is the arts industry labour force made up of workers employed in arts industries such as advertising, publishing, motion pictures, live stage events, fine arts schools, etc. In this category only 35 percent of the arts labour force are employed in the arts industry. Between 1971 and 1981 the arts industry labour force increased 58 percent from 150,080 to 236,110, or 2 percent of the total labour force. Of this total, 52 percent were men and 48 percent were women, compared with 60 percent men and 40 percent women in the total labour force. Artists made up 24 percent of the arts industry labour force, arts technicians 18 percent, arts administrators 8 percent, and other support personnel about 50 percent.

The employment efficiency question is equally of significance to this ministry. The 1981 census of manufacturers comparison between the 20 largest Canadian manufacturing industries and the performing arts reveals that of every revenue dollar earned by manufacturing companies, only 20 cents was spent on salaries and wages, compared with the performing arts, where 66 cents of every revenue dollar was spent on salaries and wages. Given that average wages in the arts are less than half those in manufacturing, then dollar for dollar the performing arts enjoy an employment advantage of six to one. Furthermore, the fine arts provide meaningful employment with a high level of job satisfaction, long-time career commitment and appreciation of human capital rather than depreciation of capital-intensive plants and equipment. I would suggest as well that in the area of industrial location, the investment of industries that may be seeking the most desirable regions and locales within a province.... They quite often prefer those areas that have the basic amenities. On this the report had this to say with respect to the industrial location:

"The arts also have a role to play in attracting new industries to a province or community. Traditional industrial location theory suggests that companies locate plants in a particular community for access to markets, raw materials and energy supplies. During the 1960s, however, many companies, particularly but not exclusively in the service industries, began to locate headquarters according to the amenities available in a given community — for example: good weather, easy access to cultural, educational and recreational facilities, etc. The tendency to make industrial location decisions based on a community's amenities has been amplified by the shift from traditional smokestack manufacturing to high-tech industries. A number of observers suggest that jobs now follow people in high-tech industries, rather than people following jobs. To attract and retain scarce, highly-trained workers, companies and communities must offer an increasingly attractive quality of life which includes the fine arts."

"An increasing number of businesses find that the cultural ambience of a community influences whether executives and workers — including marketers, of course — want to work and live there. In recruiting, companies frequently emphasize two matters very much related to the arts: the cultural facilities of a community in which the companies are located, and the corporation's involvement in the arts."

Then it goes on to talk about productivity, again recognizing the importance of a good state of mind with respect to employees and the role of the company with respect to recognizing the multiplier effect by employing people who are highly skilled in various forms of the arts.

Madam Chairman, I basically wanted to introduce the idea. Perhaps I could ask a specific question to the minister with respect to the availability of capital funding — seed money, so to speak — for people who are in small businesses and the arts. I'm sure the minister recognizes that small business in the province of British Columbia may be anything from one person to a group of individuals, say six or eight, who have maybe $250,000 capitalization. But many people are operating on very marginal budgets who are contributing a great deal of their effort, their time and study.

What I would like to know is what access artists have generally to loans and grants and to ways of being encouraged to make contributions. We know about the Industrial Development Bank on the larger scale, but what other facilities are available within your ministry to assist the small entrepreneur and investor in the arts, the smaller individuals?

HON. MR. McCLELLAND: Madam Chairman, just very briefly, the member referred to the arts industry, and if the arts industry can qualify under the terms of our targeting arrangements — if they're manufacturing, if they're processing, if they're expanding into export markets — the arts industry would be treated no differently than any other industry in British Columbia, whether it be the forest industry, the mining industry or anyone else. As long as they can meet the targets and the criteria that we have under the various programs that are available.... In fact I would encourage it — very much — if we could have people who are developing small manufacturing operations to support the movie industry, for instance, which is one of our growing industries in British Columbia. Then I would encourage them to come to us to take advantage of the programs we have. They will be treated exactly the same as every other industry in British Columbia, and we would be very happy to help them.

[Mr. Strachan in the chair.]

MR. BARNES: This question is one that I didn't have notes prepared for, but when the minister was commenting on the right of all the various people in the arts industry to apply for funds on the basis that any other industry would, I wondered if the minister has given any thought to the fact that it is of a different nature; the arts community generally is not able to compete on the same basis as others, because of the criteria. Quite often a financial institution sets some pretty

[ Page 6181 ]

rigid standards with respect to qualifying for grants and for loans and these kinds of things.

It's been my experience that many artists are not experienced in business in that sense, not understanding just how to qualify themselves, but they nonetheless are investing a lot of time, effort and energy and clearly are willing to work for wages generally far less than the average wage. So there is a difference. These people are in a different category. They're highly motivated, willing to make great personal sacrifice, as is unfortunately the problem with many small industries — family operations, the husband and wife and the children. They work hard day and night. They get rid of the telephone and they don't have a car. They pay people's wages, except themselves. They can barely make the payments on their mortgages and so forth.

But it seems to me that when you analyze the contribution of these people to the industry, they are probably the ones that we should be willing to make special arrangements for. It seems to me that there is a distinction between this kind of an entrepreneur and the person more experienced in the business of finance. I'm wondering if the minister can see any possibility of a special trust or one that recognizes the advantages of keeping some of these small operations afloat. I'm not suggesting that you are pouring good money after bad, but clearly these people are contributors, and we know from experience that it's the small operations that are the most labour-intensive and return the greatest percentage of the dollar into the community simply because they are constantly trying to keep afloat, and their dollars rarely are fleeing the province, so to speak.

HON. MR. McCLELLAND: As the member likely knows, Mr. Chairman, there are a number of grant programs available, not in my ministry but in the Ministry of the Provincial Secretary, which are available to help the very people he is talking about, usually non-profit societies who will support various kinds of artistic endeavours, whether it be a community music school or community artists' school or something like that. Those programs are available, but we have to remember first of all that anything that my ministry offers to somebody else comes from you and me and everybody else who pays taxes in the province. So we must have some criteria that protect the taxpayer in terms of how we support other industries. That's why I have some guidelines given to me by this Legislature that I can't go beyond. I wouldn't really want to go beyond them.

However, one thing we do have, and it is very successful, is a business counselling service out of our Robson Street office in Vancouver. That is open to everybody; it doesn't matter what kind of category they fit into or anything else. I would encourage the member to counsel people who may be interested in developing some kind of a business interest, whether it's in the arts or anywhere else, if they don't have the financial capability.... I agree, a lot of people just lose because they don't know where to go. But we have that opportunity available. I don't know how many people come and see us every day, but it's a very busy office. We've got business counsellors who can talk about business plans, financial plans, marketing plans and the way in which you yourself might advance the various financing that might be available through the Federal Business Development Bank or the B.C. Development Corporation or the normal banking system. That's probably the first step that anybody in that position should take. Come and see us, get one of our business advisers to talk about the way in which we might or might not be able to help, whatever it turns out to be. But we've got that business service available to people, and we encourage them to use it. Perhaps the people that you're talking about could very profitably use it.

[4:15]

If they're into the business of supplying the arts industry, one of the things that you said in that report that you quoted, and they are actually making things that supply the arts industry, they would certainly qualify for some of the programs that we have already. But the business counselling program is available to everybody, and I would hope that the people that you're talking about would come and see us.

MR. MICHAEL: Mr. Chairman, I'm pleased to take my role in the minister's estimates at the committee level. I must compliment him on the final resolution of the ERDA agreement with the federal government. I am particularly happy to see the $300 million figure in ERDA for silviculture. It's interesting to note the emphasis that the two governments put on forestry in the province of British Columbia, for in looking at the figures, the $300 million forestry section is in excess of 50 percent of the total. I'm certainly pleased to see that. I'm also pleased to see that tourism obtained $30 million in that program and agriculture received $40 million, as both are very significant industries in my constituency, and certainly growing industries. It's interesting to look over the last two or three years, which indeed have been hardship years: the fact that agriculture has held in there very well, with the exception of a couple of segments. But by and large it's held in there very well, and indeed has withstood the downturn of the economy quite well.

I'm also very happy to see the number of announcements being made by the private sector in job creation, in new plants and facilities that have been announced in just these last few weeks or months. It's good to see the announcement of Ocelot Industries, the ammonia plant in Kitimat, a capital expenditure in the neighbourhood of $65 million. A very positive announcement, and something that will certainly mean a lot to the community of Kitimat.

[Mr. Ree in the chair.]

I was also very pleased to see the announcement of the fertilizer super plant on Annacis Island, a capital cost of $600 million that will result in thousands of jobs and steady employment for approximately 200 people. Along with that it's interesting to note that the fertilizer plant on Annacis Island is going to be consuming in the neighbourhood of 20 billion cubic feet of gas a year. That will mean a lot to the north country, a lot for the natural gas industry, and will certainly have long-lasting effects on that industry in British Columbia. I would hope that the minister and the government will be successful in completing the negotiations with the federal government for them to fulfil their commitment to the Vancouver Island gas pipeline, as that again is going to create 20,000 man-years of employment and several hundreds of full-time long-lasting jobs for the province.

I would hope that we will very shortly see a successful conclusion of the long-discussed liquefied natural gas plant for the Prince Rupert area. It is a capital expenditure in excess of $2 billion — two thousand million dollars, Mr. Chairman — and large consumptions of natural gas, opening up the

[ Page 6182 ]

massive fields and massive reserves that we have in the north country.

It's been very interesting sitting here listening to the debate from the members of the opposition for the last couple of hours. I think it's been very positive. Some very constructive suggestions have been put forward by the opposition. It's certainly rewarding to see that type of positive, sincere suggestion put forward by the opposition in an attempt to further lead this province into recovery and create those much-needed jobs.

It's very interesting and somewhat in contrast to one member of the opposition, the second member for Vancouver East (Mr. Williams), who seems to think his sole role in this Legislature is to talk negative, negative, negative. It's very interesting to look at the facts of coal production, the facts surrounding Quintette and the northeast coal venture. I intend to read just a few into the record today, and perhaps the second member for Vancouver East would like to take note of some of the facts and figures of the tremendous growth of the coal industry in British Columbia.

In 1983 the quantity of coal produced in the province was approximately 11.5 million tonnes. In 1984 that figure had grown to 19.26 million tonnes — pretty significant growth. Looking at the dollar value, very interesting figures again: $556 million of coal produced in British Columbia in 1983, and in 1984 that figure was well in excess of $900 million. The quantity of coal produced is estimated to have increased by 7,800,000 tonnes, 1984 over 1983, and the value has increased by in excess of $365 million in 1984 over 1983. I'm amazed, in looking at these figures and listening to the member opposite talk about.... He tries to imply through his questions, Mr. Chairman, the failure of northeast coal and coal production in British Columbia. The value of total mineral production in the province during 1984 was a record $3.3 billion, according to the Ministry of Energy, Mines and Petroleum Resources. The total is up 15 percent, from less than $2.9 billion in 1983, and compares with just under $3.1 billion in the previous record year of 1980. Why are those figures so high? They're high because of this government's vision and determination to develop the northeastern part of British Columbia.

It's also interesting to look at a recent article from the Canadian Press, a story about Quintette Coal.

"Quintette Coal Ltd. in northeast British Columbia has confirmed a Japanese industry newsletter report that it is ahead of target in coal production this year."

These are not my words, Mr. Chairman; they're quoted from the Canadian Press. This was written in the last two or three days.

" If Quintette's April production is sustained for the rest of the year, the mine would produce 5.1 million tonnes of coal, ahead of the targeted 4.4 million tonnes set for all of 1985. Anijad Ali, controller of the coal division, Denison Mines Ltd., said Monday April's production amounted to 426,000 tonnes of saleable coal. Denison Mines owns 50 percent of Quintette and is the operator of the mine. Ali's confirmation of the mine exceeding its target production came as the May 2 issue of the Tex Report, a Japanese industry newsletter, reported the better-than-expected production figures."

Mr. Chairman, I don't read this as doom and gloom, like the second member for Vancouver East.

"Ali also said that a former B.C. chief geologist's claim about lack of exploratory drilling at Quintette wasn't borne out by independent geologists' reports."

It's interesting to look at some more articles on coal and at the positive aspect of coal production in British Columbia. An article from the Westar mining newspaper: "The 400,000 tonnes for Westar represents 13.6 percent of Balmer's current annual production. Fording Coal has affirmed that they will be supplying Japanese companies with 175,000 tonnes of a similar product." Positive articles, Mr. Chairman; and no question about the future of coal in British Columbia, one that indeed is going to be very positive and is truly a growth industry.

Looking at another article, the headline says: "American Utility Looks at B.C. Coal to Fill Fuel Needs." It reads:

"A U.S. east coast power utility, with an annual appetite for 3.2 million tonnes of coal, is continuing to discuss a major purchase of fuel from B.C. Glenn Schleede, president of New England Energy Inc., the transportation subsidiary of New England Electric System, said talks are continuing with Fording Coal Ltd. of Calgary. Fording delivered a 40,000-tonne shipment of fuel to New England Electric in November 1984. The fuel moved by rail from Fording's East Kootenay mine to Vancouver and then to a Japanese owned bulk carrier, the Sanko Eternity, to Brayton Point, Massachusetts, a total trip distance of 14,129 kilometres. Schleede said the coal had a lower landed price than coal moving from mines in Virginia, West Virgina and Pennsylvania."

Looking at the statistics, Mr. Chairman, it's very plain, for any who wish to look, that the production and future of coal in the province of British Columbia is indeed a very positive one.

Looking at job creation, Mr. Chairman, I know that the minister has a very difficult task indeed in British Columbia. We know that we are probably the province most susceptible to the devaluation of the currencies in the European area, in Sweden, and in Chile and Brazil. It's been very difficult to keep pace with the new people coming on the employment market, people coming from out of province, in excess of 15,000 in a year over the last five years, people who are graduating every year through our school system, spouses who are coming onto the labour market, and immigrants coming from other countries.

It's interesting, Mr. Chairman, to have a look at job creation in British Columbia since the end of April 1985 from the end of April 1984. It's very interesting to note that there have been 29,000 additional jobs created in this province during that 12-month period; twice as many jobs as the three other western provinces combined. During that same period the province of Manitoba that we hear so much about has had a reduction — 1,000 fewer people were working on April 30, 1985, than on April 30, 1984. Mr. Chairman, I think it's interesting to look at the type of....

MR. SKELLY: On a point of order, Mr. Chairman. Three days ago Statistics Canada issued their April summary. It showed that 4,000 fewer people were working in British Columbia than a year ago.

DEPUTY CHAIRMAN: Order, please. That is not a point of order.

[ Page 6183 ]

MR. MICHAEL: Mr. Chairman, I know some of these statistics hurt when the facts are read, and I appreciate the rattledness of the members opposite in not wanting to digest or comprehend the facts, but perhaps they should have their research department check them out, and I'm sure that they will find them very accurate indeed. If any members opposite would like to check those facts with me after reading the Blues tomorrow, I would be very pleased to meet them and show them the statistics and prove them to be authentic.

Mr. Chairman, in conclusion, perhaps before we start comparing ourselves and the competitive position with Sweden or comparing ourselves and the competitive position with Chile — which is our greatest copper competitor; and the country of Sweden is our greatest competitor in the wood products field — they should look at the devaluation of those currencies over the last two or three years. The Swedish krona....

Interjections.

MR. MICHAEL: I'm sure they're not interested in this, Mr. Chairman, but anybody with any knowledge of the international marketplace will know that as a foreign country — a competitor — reduces the value of their currency, it puts them in a much more favourable position to compete with the Dominion of Canada and the province of British Columbia. The Swedish krona, Mr. Chairman, has been devalued by approximately 35 percent in the last 24 or 30 months and the Chilean peso has been devalued by 100 percent in the last 24 months.

[4:30]

HON. MR. McCLELLAND: Mr. Chairman, I understand that the Administrator is nearby, and I would like to move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Strachan in the chair.

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

DEPUTY SPEAKER: Hon. members, the Legislative Assembly is advised that His Honour the Administrator is in the precincts. I will call a brief recess and ring the division bells, with the understanding that His Honour will be approaching shortly.

The House took recess.

DEPUTY SPEAKER: Order, please, hon. members.

His Honour the Administrator entered the chamber and took his place in the chair.

CLERK-ASSISTANT:

Workplace Act

Assessment and Taxation (Miscellaneous Amendments) Act, 1985

Corporation Capital Tax Amendment Act, 1985

Gasoline Tax Amendment Act, 1985

Gasoline (Coloured) Tax Amendment Act, 1985

Motive Fuel Use Tax Amendment Act, 1985

Social Service Tax Amendment Act, 1985

Tobacco Tax Amendment Act, 1985

Hotel Room Tax Amendment Act, 1985

Insurance Premium Tax Amendment Act, 1985

Business Licence Repeal Act

British Columbia Transit Amendment Act, 1985

Ministry of International Trade and Investment Act

Legislative Assembly Allowances and Pension Amendment Act, 1985

British Columbia Railway Dispute Settlement Act

CLERK OF THE HOUSE: In Her Majesty's name, His Honour the Administrator doth assent to these bills.

His Honour the Administrator retired from the chamber.

HON. MR. GARDOM: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF INDUSTRY
AND SMALL BUSINESS DEVELOPMENT
(continued)

On vote 44: minister's office: $196,194.

MR. SKELLY: We were hoping that the member for Shuswap-Revelstoke (Mr. Michael) would continue reading newspaper articles. I don't know where he did his research, but Charles LaVertu is doing a fine job.

Mr. Chairman, the member for Shuswap-Revelstoke was talking about the minister's job creation successes and about 24,000 jobs that were created in the last little while. This doesn't seem to fit very well with the statistics that come out of StatsCan. Let me quote the statistics for April 1985 relative to March 1985, talking about the unemployed in British Columbia. On a seasonally adjusted basis, between March 1985 and April 1985 the number of unemployed in the province increased by 6,000 people. Between March 1985 and April 1985 the actual unemployed increased by 1,000 from 15.3 percent to 15.4 percent. That, we are told by StatsCan, is the fourth highest in Canada in terms of unemployment. The number of employed in British Columbia — and the member was talking about creating 24,000 jobs — went down between March and April 1985 from 1,223,000 to 1,219,000. From March to April 1985 the actual number of employed in British Columbia went down by 1,000. That's only between March and April, Mr. Chairman. But I think the people of British Columbia would get a better idea what has been happening in this province if we were to check a few other statistics.

Between 1975 and 1985 unemployment averaged.... In 1975 there were 92,000 unemployed in the province of British Columbia. That's when the member for Shuswap-Revelstoke wasn't so happy about the employment statistics or the unemployment statistics. In February 1985 the statistics showed 226,000 people unemployed. Unemployment since Social Credit came to office in this province has increased by 246 percent. That's the statistic we should be looking at. There are 246 percent more people unemployed in the province of British Columbia today than there were when this government took office. That's after northeast coal; that's

[ Page 6184 ]

after ALRT; that's after the BCRIC boondoggle; that's after the construction phase of Expo — 246 percent more people unemployed today than there were when this government took office in 1975. All of their megaprojects, all of their highway projects, all of their politically motivated projects have not reduced unemployment at all; in fact, unemployment has increased by 246 percent since they came to office.

[4:45]

Interjection.

MR. SKELLY: Income assistance....

MR. CHAIRMAN: Order, please. The Leader of the Opposition has the floor. All other members will have an opportunity....

Interjections.

MR. CHAIRMAN: Order, please, Mr. Member for Omineca (Mr. Kempf). All members will have an opportunity to participate in debate. Would the Leader of the Opposition continue.

MR. SKELLY: Income assistance recipients in the province since this government took office in 1975: an average of 127,551 people were receiving income assistance in British Columbia in 1975; in January 1985, 237,119 people were receiving income assistance in British Columbia — a 186 percent increase in the number of people on welfare in B.C. since this government took office.

This government? There are only two cabinet ministers in the House. Not even the minister is sitting in his seat. Are they afraid to listen to these statistics?

Since this government took office, there has been a 186 percent increase in the number of people on welfare, in spite of all of their politically motivated projects — northeast coal, ALRT, Expo, the BCRIC boondoggle. In spite of all of those employment-generating projects, there are now 186 percent more people on welfare in British Columbia than there were when they took office in the first place.

UIC recipients, people on unemployment insurance in British Columbia: in 1976 an average of 78,416 people in this province were on unemployment insurance.

Interjections.

MR. SKELLY: Is there no order in this House, Mr. Chairman. No minister, no government, no order. What kind of province are they running? What kind of House are they running?

MR. CHAIRMAN: Order, please. Remarks or reference with respect to the Chair should be withdrawn.

MR. SKELLY: I am talking about the disorder that's taking place in the back benches of the Social Credit caucus.

MR. CHAIRMAN: Order, please. The debate is on vote 44, the minister's office, not with respect to others. Please carry on.

MR. SKELLY: Mr. Chairman, unemployment insurance recipients in the province of British Columbia since this government took office: an average of 78,416 people were receiving unemployment insurance in 1976; in February 1985, an average of 239,740 people were receiving unemployment insurance in this province — an increase of 306 percent since this government took office. In spite of their vaunted northeast coal project and in spite of all of the figures that the member for Shuswap-Revelstoke (Mr. Michael) was giving about coal development and mining production and economic development in British Columbia, there is a 306 percent increase in the number of people receiving unemployment insurance since this government took office.

Business bankruptcies: 151 in 1975. Remember how they cried about that? The average for the year, based on February bankruptcies, is 1,500 bankruptcies — an increase of 993 percent. What a record this is. And I hear that member for Shuswap-Revelstoke talking about how great things are, how much coal is being exported from the province, how high the value of minerals is from the reports of the Ministry of Energy, Mines and Petroleum Resources.

These are the figures that this minister should be concerned about. These are British Columbians we're talking about; these are people who are unemployed, humiliated by this government; these are business people who have lost their businesses, lost everything they ever worked to accumulate during their working lives; these are the figures we should be concerned about.

What is this minister doing to reduce the unemployment figures in this province? What is this minister doing to reduce the numbers of people on welfare and unemployment insurance that are a net drag on the provincial economy? What is this minister doing? He's doing precisely nothing, absolutely nothing. There is nothing in this minister's policy statements that make any sense to these people who are suffering the brunt of this government's economic policy. A 246 percent increase in unemployment in the province since this government took office, a 186 percent increase in people on welfare since this government took office, a 306 percent increase in people on unemployment insurance since this government took office, a 993 percent increase in business bankruptcies since this government took office. This government's record is shameful. They don't represent the people of British Columbia at all. If they did they'd be working at putting every effort into getting these people back to work, but they're doing nothing. They're doing absolutely nothing.

The budget speech talks about 14.8 percent unemployment in the province of B.C. last year, Mr. Chairman. They're talking about the results of their policies reducing that to 14 percent. It's going up; it's 15.4 percent. This is the time of year when things are supposed to be getting better in British Columbia; in fact, for most people they're getting worse. The government's policies with respect to education are going to result in the layoff of more people.

The member talks about the Westcoast Transmission fertilizer plant on Annacis Island. Congratulations to Westcoast Transmission for building that plant, with more than $600 million being invested. I talked to the Westcoast Transmission people, and they were willing to put that plant in in spite of the so-called municipal partnership agreement, because things are looking good around the world in terms of markets for nitrogen fertilizer derived from that natural gas.

Thanks. I think West Coast Transmission is doing an excellent job — not this government. As soon as West Coast Transmission announces they're going to put in this plant with their partners, the government announces policies in education and in health care that will result in thousands more

[ Page 6185 ]

people losing their jobs in this province. Everything this government does is counterproductive to economic recovery in the province of British Columbia. The way they generate confrontation throughout the province, the way they attack certain groups in society, investors are reluctant to come here. Thank goodness Westcoast Transmission is willing to make the kind of investment they're making, and then the government turns around and does something absolutely counterproductive.

Mr. Chairman, this government has a record in terms of job creation and the protection of jobs in this province that's absolutely shameful. This minister has nothing to be proud of in terms of what he's done for economic development in the province of B.C., and I'm surprised that his back-bencher would stand up and express his happiness about the ERDA agreement. This minister has done absolutely nothing.

HON. MR. McCLELLAND: I just wanted to make a comment about something that was raised by one of the other members earlier in the debate. He said that the biggest increase in my budget this year was in advertising. I don't have any money in my budget for advertising — not one nickel. The biggest increases in the budget are in small business and regional industrial development — something in the nature of $3.5 million; economic renewal, over $8 million; and low interest loans assistance for small businesses, $2.5 million — not in advertising.

The other thing that I might just quickly mention in passing at least is that we are creating new jobs in this province faster than all of the other western Canadian provinces combined. I just draw the attention to another item from Statistics Canada. I don't think it does much good in the House to fool around with statistics, because you can do anything you want with them, as the member opposite, the Leader of the Opposition, knows and is so good at. But one statistic that might be of interest to the House is that....

MR. SKELLY: On a point of order, is the minister suggesting that I'm misusing the statistics that come from Statistics Canada? Is that what the minister is suggesting?

HON. MR. McCLELLAND: On the contrary, I said that that member was very good at using the statistics. He's a master at it, as a matter of fact.

Mr. Chairman, one item from those same statistics points out that in the migration away from some provinces of Canada.... They point out one from Alberta between June 1983 and May 1984, more people moved away from Alberta than any other province. The statistics show that of the 106,000 people who left Alberta, 33 percent moved to Ontario and 31 percent moved to British Columbia, that awful province that the Leader of the Opposition paints such a terrible picture of. That's over 33,000 new people who came to British Columbia from only one province. You know it's important that we develop new jobs. Sure, the unemployment rate is too high. I would be the first to agree with the member that the unemployment rate is too high, but we are creating new jobs in this province at a faster rate than all of the other western provinces combined, and we'll continue to do that.

MR. WILLIAMS: Go peddle that line in the north Okanagan; go peddle that line in northwestern British Columbia; go peddle that line on Vancouver Island. What absolute garbage! You go out to the soup kitchens; you take Soup Kitchen Bill along with you. You check out at the food banks, and you try to tell the people out there that you're proud of the job-creation record. You see what happens to you back there by Christ Church Cathedral in Vancouver. Only the smarmy smug on that side could peddle that kind of garbage in this session.

Interjection.

MR. CHAIRMAN: Order, please. Would the Minister of Tourism come to order. All members will have their opportunity.

MR. DAVIS: Mr. Chairman, briefly on two subjects and I hope in a positive vein — our forest industries in Canada and certainly in British Columbia are basic to the economy. They have been seen over the years as bread-and-butter industries, industries which were able to pay their own way and, more than that, generate tax revenue from which we could afford a variety of services for our people. Much of the talk we've heard in the chamber in the last few days has been of the nature of government subsidies or government help or government aid for the forest industry in the area particularly of silviculture and reforestation. I would argue that those industries should continue to pay their own way and that they substantially should fund silviculture and reforestation.

Admittedly some of them are in a cash squeeze at the moment, but the long-term policy which I believe the Canadian government should have — and mirroring it, the provincial government — would recognize the fact that the return from silviculture and reforestation is long term. It's a matter of decades. It's often beyond the financial horizon of the companies and the individuals concerned. So they're making an investment, admittedly, but an investment in a new resource which they are unable, in their lifetime, to harvest.

In the mining industry traditionally we've had an allowance called the depletion allowance. I've never fully been able to understand it, and I'm not sure that the depletion allowance is fully warranted, but if there is any case whatsoever for a depletion allowance in mining there is certainly a case for an allowance for the forest industries. I would see it in the form of reduced taxation, reduced income taxation, reduced corporate income taxation. To the extent that the firm or individual in question engaged in silviculture, reforestation and so on, clearly the effort would have to be measured and would have to be policed. That tax credit would then be legitimized. It would be recognized as a cost one hundred percent by the taxing authorities and a benefit to future generations and not a benefit, immediately at least, to the firm.

[5:00]

Now the key, of course, lies with the federal government, but I would argue that British Columbia should have in the past, and should now, and certainly in the future should argue with the federal government that there should be a special provision in Canada's corporate income tax structure for forestry firms or firms engaged in cutting down trees, which gave them a credit for reforestation and silviculture. It would be, let's say, a forest renewal allowance, if you like, but it would be linked of course to profitability and would only be achievable by firms making a profit, but nevertheless would come out of the firms, and the firms would then direct the moneys in the way they felt would likely benefit the forests they managed over the longer term. There would be less

[ Page 6186 ]

government involvement and there would be a greater likelihood of good forest management.

My main point in this area is to think about a special allowance — a forest renewal allowance — in the Canada Income Tax Act, and, of course, in the administration not only of that act federally but also of the provincial Income Tax Act.

In the area of high-tech research and development it's a statistical fact that a large majority of inventions have occurred in small enterprises; the initial discoveries have been made in small firms. Admittedly, some of these small firms have grown into large firms, but the bulk of innovation has occurred in smaller, individualistic entities. The majority of large corporations, while they improve on these inventions, have not been responsible for the initial ideas. I think we should pursue that thought further.

I personally lament the fact that most of the research and development in Canada is carried out by large laboratories, large corporate entities, most of them funded by the federal government or funded by the federal government in cooperation with a large industry. Very little help, if any, is given to small corporations, small firms or individuals to carry on research and development. Indeed, I doubt if government assistance, which carefully screens the nature of the assistance, is desirable.

I think that if some limited funds were made available to small firms to use at their discretion — as long as it was employing people with certain categories of technical training — and left to the ingenuity of the individual or firm in question, this would produce the best results in the long run. I can't see anything wrong with a policy whereby a government would make available for a year or so to any firm that applied the equivalent, say, of the salary — it shouldn't be the full salary; 80 percent or so would do — of an engineer or an accountant or some other technically qualified person. It would help to employ some of our engineers who are currently unemployed, and other categories of technicians who are currently unemployed. Those firms, because they'd have to supply the remainder of the salary, the overhead, the support staff and so on, would make sure that the money was well spent — at least, in their own view of things.

That's the way I would spend R and D money, certainly at the provincial level. I think it would go more directly to employment — it would employ people directly — and it would involve a minimum of bureaucracy. All that would be required would be to make sure these people had the proper technical qualifications, and leave it at that. I think that's a logical approach, Mr. Chairman.

To quantify our research and development effort in Canada, we're well down the scale among nations, mostly because most of the R and D is government; industry carries out very little research and development. Canada's percentage is in the order of 1 1/4 percent of gross national product. In countries like the United Kingdom and West Germany it's more in the order of 3 or 4 percent. In the United States and Japan it's even higher.

Provincially we have a minimal effort. In Alberta they have the most energetic program, and it's in the order of 1 percent of the gross provincial product; whereas ours is a fraction of 1 percent. I would still argue, though, that the best way to spend the money — and I would certainly urge that more money be spent in British Columbia — would be to allow individual firms to hire one individual each. In other words, MacMillan Bloedel could hire one more, the small laundry on the block could hire one more, and then use them in a way that would best benefit the firm. I think that in the end we'd invent more, we'd develop better processes, and we'd be closer to the grass roots. In fact, we'd be doing true research and development, which would be beneficial to the province.

MR. WILLIAMS: The minister says he's proud of their job creation development here. Really, the gall, the nerve! You tell it to those tens of thousands of people out there, people that have gone bankrupt, supporters of yours who voted for you because they thought you'd produce some jobs — and you didn't. You have not delivered in any respect. You have simply not delivered to the people of this province. What you've delivered.... Well, what have you delivered? More propaganda than I've seen in years; a mammoth blundering project in the northeast that continues to lumber along, where some 56 international bankers have had to huddle around the world to see how we deal with this monster. That's what you guys have created. Your number one project in the decade you've had in British Columbia to diversify this province, and what has it been? It's been that thing in the northeast.

What kind of job creation have we got there anyway? We've got 2,300 jobs at the site. That's it. That's $1 million a job in this $3 billion project. Some of the most thoughtful people in economics have argued that if we're going to be realistic, the new kind of delivery of jobs has to be something on the scale of the annual income of a worker — $20,000, $30,000, $40,000. Those are the kind of jobs we've got to create in British Columbia. Something that costs $1 million a job we simply can't afford, and something that costs $1 million a job and blows up in your face we can't afford at all. Your biggest project; ten years of the new Social Credit administration and you've delivered us a blundering hole in the wrong place in northeastern British Columbia, with railways and everything tied to it. That's what you've delivered after ten years, and then a list of failures.

The minister gets up this morning and sanctimoniously tells us in his best CJCC voice that he too believes in small business; that that is what we have to depend on; that we really have built this economy; that we in fact have ridden on the backs of small business. But everything they've done is big — blundering and big. That is the mark of Social Credit: blundering bigness. That's what your plan has been this last decade in British Columbia, and it has been a miserable failure. Ask any of the people in the soup kitchens if it's a miserable failure. They'll all tell you. Give them the chance to vote now; they'll all vote. They'll tell you.

Then you tell us: "We don't have any money for advertising, not little old me. No, we don't have money for advertising." Well, what are the words you used? I haven't seen propaganda because that's what you produce. I think you call it communications; lots of money for communications. Expo's got lots of money for communications, government information services has lots for communications, and you've got lots for communications. "Oh no, not at all. Not one little penny. I wouldn't use money for propaganda, not little old me. No, no, no." What do you call this crap that gets dumped on doorways around British Columbia? What do you call that nonsense? Look at it. A dozen cabinet ministers' mugs in your latest production, the "B.C. Economic Bulletin." What would you call this? Is this like a dictionary? It's got 11 cabinet ministers' pictures, and you're trying to call it

[ Page 6187 ]

an economic bulletin. It's just political propaganda. I'd call it advertising and be kind.

Your communications program has changed. The last time you turned out an economic bulletin you actually had a few facts in it. I think it's fair to call the new stuff advertising, propaganda. I thought, why have they changed their advertising in this ministry? They used to provide a table in the back, as recently as December under the former minister. This minister is making big changes in that department. We don't want any dangerous facts to get out there. It's all got to be advertising, it's got to be propaganda. That's what you're delivering. You're not delivering jobs; maybe for the few paper boys that dump this garbage on the doorsteps, but that's all. Those are the only jobs you're creating right now.

I looked at the back of the previous bulletin, which did have some information in it, and you know what? It took me a while but I actually figured out why you don't want the information there anymore. What does it tell us? It tells us that unemployment is worse in British Columbia. That's what the figures tell us. The absolute number of unemployed was worse. That's what the figures in the last bulletin told us. What else did it tell us? It told us that pulp production was down by a significant amount. What did it tell us about housing starts in British Columbia? It told us housing starts were down 20.8 percent. Not good news, but real words, real facts; not the factoids we're getting from the junior member on the other side. What did it tell us? Lumber production is down. Even that is down. Manufacturing shipments were down to 0.3 percent. Capital expenditures were down to minus 12.3 percent.

Those were the figures that were in your economic bulletin as of year end December. Even the poor hotel men are complaining about all you folks over there. The hotel occupancy rate was down 53.8 percent. What does that tell us? It tells us you're a monstrous failure.

In the back of this little journal we used to get some information. Instead we're getting complete propaganda. The minister gets up this morning and just a while ago, and he sanctimoniously says: "We don't have any money for advertising." It's communications. It's a new euphemism.

[5:15]

MR. D'ARCY: Mr. Chairman, on a point of order, could you bring some of these caterwauling members, notably the one in charge of liquor promotion and sales, to order so that we can hear what the hon. member who is speaking has to say?

MR. CHAIRMAN: It is a good point of order in that....

MR. WILLIAMS: I don't know why the Minister of Tourism (Hon. Mr. Richmond) is being smart today.

Interjections.

MR. CHAIRMAN: Order, please! It's a good point in that there seems to be a number of members speaking from their chairs. It would be appreciated if we could enjoy the noise of silence and allow one member to carry on.

MR. WILLIAMS: It was so good to hear from the Minister of Tourism, now that they've sacked their vice-president of planning at Expo and given him 10 months extra pay on his way out. That's another one of their great operations. The minister is keeping pretty quiet on that one right now.

Look at the numbers. Economics and statistics branch, communications has increased by 42 percent; small business and regional development section, communications risen by 88.34 percent.

The minister unctuously gets up there and tells us he doesn't have any money for this sort of thing. We've just seen the kind of product he's producing — the B.C. economic bulletin, which is simply advertising a dozen cabinet ministers.

Interjection.

MR. WILLIAMS: That's exactly what it is.

You know, this morning I talked to the minister about the state of our forest industry and the fact that we are now a couple of generations behind. We really still have a non-department here. In their history as a department, they've only really tried one big project. Otherwise, it's been a statistics-gathering agency and a little bit in terms of economic development here and there — modest stuff. But the one big project that they've tackled is northeast coal. The previous minister said they spent $10 million on studies — just on studies.

They still didn't anticipate the geological problems; they still didn't anticipate the marketing problems; they still didn't anticipate the technological changes in steel making in Japan in terms of less demand for coal; they still didn't understand the decline in terms of worldwide demand. They made all the wrong decisions. Every time there was a decision to make, they made the wrong one. That's what their biggest project in the last decade has involved. It's little wonder at this stage that they should devote more and more of their funds to advertising and propaganda, because the real numbers — the real truth about what has been going on in this province for the last decade — are there for those who want to really see.

That's why they have to spend the kind of money they're spending in propaganda, in advertising. It's for this huge effort called government information services. What we have in British Columbia is government disinformation services. That's what it is. That latest product — the economic bulletin, so-called — is disinformation. It's disinformation, and to try to tell the people in the soup lines of British Columbia that you're proud of the job creation program is the ultimate insult to the people that really are bearing the cost of your incompetence.

MR. D'ARCY: I would like to talk with the minister about maintaining employment levels in my constituency as well as adding to the employment levels over the years. I recognize that we do have a problem in this province, in that we're not keeping pace with the rest of Canada. I don't want to dwell on that, but while in the year that ended April 30 there have been tens of thousands more Canadians working, from St. John's right through to Whitehorse, reflecting the 4.7 percent real growth rate of 1984, the fact is that in B.C. we have lost 4,000 permanent jobs. All of us in this House want to turn that around.

In my riding, in Trail we have what can best be described as a not-so-elegantly superannuated lead smelting and refining operation. It's basically 40 years old; basically it's 50 year-old technology, and it's a loser. It's a loser in bad times; it probably would be a loser in good times, for lead prices. The

[ Page 6188 ]

fact is, though, that in most if not all non-ferrous metals mined in British Columbia and in northwestern United States, lead is a component of the ore. So if you're going to refine the ore, you've got to literally get the lead out of it.

Even with a modernized process, lead production in Trail or anywhere else would probably be marginal. The company there, Cominco, has acquired a process from one of our eastern bloc neighbours, shall we say — one, I might point out, that that country, the Soviet Union, was not prepared to spend money on itself. They were prepared to do a prototype project but not a major, full-size development. It's interesting that other state governments and other corporations in the private and public sector worldwide weren't either, but they were in Trail, and it does work. There has been, as the minister is aware, an application under the former IRDP program that fit all the guidelines, and I am told that this is still being considered by the federal government in somewhat different form, outside the ERDA agreement.

I want to point out to the committee here, Mr. Chairman, that we in British Columbia have paid our dues constantly over the last few years in federal taxes, both under the former government and under the present government. But we have not been getting, shall we say, a refund on what we've been paying in federal taxes; that's why I'm very happy to hear that the ERDA agreement was finally signed. Other provinces in Canada, both under the former government and under the present government in Ottawa, have in fact been receiving what has been described as federal largess. But the fact is that they're simply receiving money that they have paid in.

There may be people in this House and people in British Columbia on both sides who do not like the idea of federal money being given to private industry — to any industry. The fact remains, though, when I hear that so many millions in federal dollars are going into a Domtar plant in Windsor, Quebec, just to use one example, I know very well that probably 11 or 12 percent of those federal dollars are B.C. dollars, because we contribute 11 or 12 cents on the dollar to every federal dollar that they have. I think it's high time that we got some return on some of the money that we have paid in over the last few years.

We were not properly represented numerically in the Liberal cabinet; we are not properly represented numerically in the present Conservative cabinet in Ottawa. There are 40 cabinet ministers; only three are from British Columbia, and they're all city slickers. They may be fine people, but none of them represents the resource-producing areas of this province; none of them is from the southern interior, from the north, from Vancouver Island, or even from the Fraser Valley, where the minister's own seat is. They're all from Vancouver city and its immediate suburbs. That doesn't take anything away from any of them personally. The fact is that we don't have the numerical clout that we should have.

I hope that the minister.... I know that he's had federal discussions over this matter of subsidy to the lead modernization project in Trail, but I hope he has taken the message to them, as I have, that they should recognize that there already has been a provincial contribution in property tax changes. There has already been a municipal contribution in forgoing property taxes. As I mentioned, we have more than paid our dues over the last few years into federal coffers from British Columbia.

The fact remains that some federal spokesmen — there seems to be some confusion — have indicated that they do not intend to put money into this project unless there is some greater provincial contribution. I hope that is not the case; some other spokesmen — federal politicians — have denied that that is the case. They say we have paid our dues and now we expect to have something back.

I want to emphasize to the committee that I am not speaking just on behalf of my own constituency. The fact is that with Cominco bringing on its Red Dog mine in Alaska, because of the nature of that ore and because of new technology, the lead actually can be separated out at the concentrator site in Alaska. In other words, they don't need to bring it down. What that means is that we're not just talking about the future of lead refining and smelting operations in Trail; we're also talking about the longevity of the Sullivan mine in Kimberley. Without the Sullivan mine, not only would the economy of the Kimberley-Cranbrook area be severely depleted, and also the economy of British Columbia, but I'd like to point out that the city of Nelson.... I don't know whether it's the largest employer, but certainly a very significant employer there is the CPR with its regional divisional headquarters, its car-cleaning, locomotive shop, car repair and technical and clerical services, all operating out of Nelson. There probably would be little need for them to be there in the absence of the regular ore trains and commodity trains travelling from the East Kootenay through to Trail. So we're not just talking Trail with this project; we're talking both east and west Kootenay in a major way.

[Mr. Kempf in the chair.]

With those remarks, I would like to hear if the minister has any comments. I want to reiterate before I sit down that I am very happy to hear that the ERDA agreement has finally been signed. It's also my understanding that the Cominco corporation and its employees recently reached a two-year agreement. That is encouraging as well. The people, the workers, the businesses and the shareholders in the Kootenays need this project to proceed forthwith, or we could have a severe economic problem in the area and indeed add to the economic problems of British Columbia.

HON. MR. McCLELLAND: I couldn't disagree with anything the member for Rossland-Trail has said, including the fact that over the years British Columbia has certainly paid its due in confederation. We remain still one of the two provinces in Canada which is a net contributor to the stabilization programs that have been put forward. We don't complain about that. I think British Columbians are by and large happy to be able to support other regions of Canada, as our economy has been reasonably strong. We also, though, I think must ask the federal government to recognize that only historical relationships distort a lot of the things that happen in our economy and that we have to recognize that when the economy suffers in certain regions of the province perhaps some adjustments need to be made. I think some of those adjustments have been made in the ERDA agreement that we've reached.

The member will know that the community of Trail, the union at Cominco and the company were one of the first to come forward to British Columbia with the suggestion that the agreements that we've now made should happen. Trail was the first community in British Columbia to agree to forgo some taxes, even before the legislation that enabled them to do that.

[ Page 6189 ]

Interjection.

HON. MR. McCLELLAND: Yes, that's correct. And Trail was the first community as well to suggest that they could forgo some developments of certain kinds of recreational facilities if it would help us to reach the kind of agreement we needed to allow that expansion to go ahead.

So the community of Trail is to be congratulated, as are all of the others that were involved, including the member and the union and others who saw the need for that kind of adjustment. Cominco has now agreed that in the programs that we put forward in our budget and those which are to come forward in legislation, we have not only achieved what they asked for but we've achieved that and more, from the provincial point of view.

[5:30]

The question now is whether or not the federal government will in fact give British Columbia its due and help Cominco in the same way that they've helped other companies in other parts of Canada. I've had a number of discussions with my counterpart — the minister in Ottawa — and we're continuing those discussions. I certainly hope that they'll result in the opportunity for Cominco to be able to modernize that plant. I agree with the member that it goes far beyond Trail and that it has some ramifications for the continuation of that entire company operation in British Columbia, certainly on the lead side for sure.

So we'll work hard. I appreciate the member's support. I know that the member, Mr. Chairman, is contacting his counterparts in Ottawa, and I think in the achievement of the ERDA agreement we found out that it's extremely important to be able to include the caucus members on all sides of the House in attempting to influence the federal government. I would hope that that member will continue his efforts to influence the caucus members who support his particular party, as I will the caucus members whom I have access to, to make sure that the federal government understands the importance of coming to some agreement with Cominco.

MR. GABELMANN: I have a couple of issues relating to the regional economies in North Island. There are essentially two economies in that area. I think until we begin to recognize that we don't have a provincial economy per se, but a whole bunch of regional economies, and begin to plan on that basis, we're going to be in trouble in terms of employment and resource development. I want to deal with two specific things, one very specific and one a wee bit more general.

The first is a particular project in Campbell River. I might say that Campbell River in the last three years has had unemployment rates in its construction industry varying from 80 percent to 100 percent. At the present time it's in the 90 percent range. That's three years of constant unemployment for more than 80 percent of the people who work in the construction industry. Unfortunately, the only major construction project of any size in that area in the last little while employed people from mostly outside the area. That was on the mine at Westmin.

One project that the minister knows about — we've corresponded about it — is a community project for a $2.9 million museum. More than that, it's a major tourist-related endeavour. I just want to say that I wrote to the minister on December 19, 1984, and since it doesn't go by Canada Post the lack of a reply can't be blamed on the post office. I still don't have a reply to that letter addressed to the minister as chairman of the Cabinet Committee on Economic Development. It was a friendly letter too, Mr. Chairman; it was a Dear Bob letter. It followed up on a meeting the minister had with the employment stability committee in Campbell River, which is still functioning, I might say.

I'm not making a big deal about the fact that the letter is unanswered. What I'm concerned about primarily is whether or not the ministry or the cabinet committee, or whatever the appropriate process is, has given any serious consideration to this particular project.

The problem is that the funding, the $2.9 million, is lined up for the most part, but at least half of it is dependent upon an indication that the province will support the project financially. We have an opportunity to attract to British Columbia somewhere around $2 million from outside British Columbia, from both various federal government agencies and private national organizations. We could attract into this province a couple of million dollars that otherwise would not come to British Columbia for a cost to the province of around $400,000. That cost to the province would be more than repaid in taxes paid directly to the province — sales taxes, building materials taxes, income taxes and the like. Much more than $400,000 would return to the province on the construction project itself, in my view. I haven't done the precise arithmetic, but it's clear that that kind of expenditure would generate that kind of revenue.

More than that, this particular facility, apart from generating that kind of construction activity in Campbell River, would provide in the order of at least a dozen, probably 20, additional permanent jobs. This doesn't sound like much when we're talking about several hundred thousand people unemployed, but it's an important part of the regional economy in our area. I would ask the minister — either now, or if he can give me a better answer later in writing that would be just as satisfactory or even more satisfactory — to give me some indication whether or not there is some way, if not through the lotteries branch then some other way, that we can indicate to other potential financial supporters of this project that, yes, the province is prepared to participate financially. That unlocks the door to so much more money. I'll leave that issue at that.

The other is a concern about the economy in the rest of northern Vancouver Island. I'm really talking here about half of Vancouver Island, which is the other two-thirds, or geographically the other 90 percent, of my constituency — literally half of Vancouver Island. It's been primarily forestry and mining and some tourism — not nearly enough; it could be much more. The forestry economy is clearly on the decline in terms of the number of jobs, and will stay down unless we develop an economic strategy that includes some manufacturing and wood processing on site.

I spent some time last weekend travelling around the bush in northern Vancouver Island and looking at wood left on the ground that would ordinarily go into a chip-and-saw, but can't because the cost of transporting it to Vancouver is such that it is uneconomic, according to the companies involved. If there were chip-and-saw facilities, small pulp mill facilities or paper mill facilities available on site, they would be able to be utilized. It would help to deal with an impending catastrophe in northern Vancouver Island, and that is that if the Utah Mines ore body runs out, as it will within ten years, and if no other large-scale ore body is found to replace that particular mine, the already devastated economy will be nuked by that particular closure in northern Vancouver Island.

[ Page 6190 ]

When you go through — as I'm sure the minister hasn't, because there are just too many of them.... You can go through the figures in this stuff that was sent out in terms of all of the financial grants and assistance that have been provided to various businesses in the communities. Look at all of the receiverships and failures in that particular area — money that has been blown, in effect, by big grants and loans to hotels, in particular, that have gone belly-up. Others show indications that they might go belly-up and that they're undercapitalized. The notes are all here: they're undercapitalized in some cases and the debt loads are just too high, and on and on.

There has been an immense amount of public money not wasted but invested badly in a sense because of the nature of the changing of the economy in that particular area. Anybody who goes to Port Hardy now sees the overdevelopment and the underutilization in the business community and in the hotel industry and everything else, and if they realize that 1,100 jobs or thereabouts are dependent on that particular mine at Port Hardy, they'll realize that we're talking about a very real economic problem not too many years from now. It's one that I think needs to be resolved at all levels of government, but I think this ministry is the one that should be involved in taking the lead role in working out solutions to those kinds of problems before they develop.

This is a perfect example of an area where we can see a particular crisis coming. A lot of the investment that went into Port Hardy was wild gambling on a gas or oil industry off the coast, and people thinking that Port Hardy would be the centre of that. If it ever did happen it's more likely to be Prince Rupert, in any event. There was some spinoff perhaps in the Port Hardy area, but not nearly what was envisioned.

We have an opportunity in that particular area to recognize that there's going to be a serious crisis. It's an opportunity, I think, to try to develop, through BCDC, through the ministry, through the regional district and through other agencies, a regional economic plan for that particular area. I think that this ministry is the appropriate vehicle to take the lead role in that particular development. It should include all of the things that are beginning to happen in encouragingly large measure in the mariculture and aquaculture fields. I think some very good things are beginning to happen there, and that should be encouraged.

But I think that forever the basic industry in the north part of the Island should be — and will be if it's done properly — the forest industry. And yet, except for that old pulp mill in Port Alice and a couple of very small sawmills that don't produce much in the way of lumber, we don't have any basic manufacturing, and of course no secondary or tertiary manufacturing of the wood in that area. The companies argue that they have to ship it all to Vancouver; that it's the only economic way. I'm not convinced of that, and I'd be interested to know whether or not studies have been done in the ministry on that kind of issue: whether or not there could in fact be small modern pulp and paper mill facilities built in that area; whether or not in fact sawmilling or other manufacturing of the wood products in that area could be done economically. To date, because the area has been given up, in effect, to the major companies in tree-farm licences and there's very little Crown land and very little opportunity for small business people to get their own timber — and if they can get it, they have to sell to the big companies anyway — it's a very locked-in kind of situation.

[Mr. Ree in the chair.]

I just wonder whether or not those kinds of studies have been done, independent of the advice that we get from Western or Canfor or Mac-Blo or Crown or any of the others who prefer to manufacture in the Fraser River area. Crown, I think, sets a good example, in having its pulp mill and a very modern, efficient sawmill in conjunction with the pulp mill in Campbell River utilizing its wood in and around the Campbell River area. I think that, whether it's jointly done by the companies or some kind of consortium is organized which would allow the independents access to it as well, there could be some real prospect of manufacturing the wood products in that particular area. It's urgent now, I think, because we've probably got just ten years' life in that Utah pit.

I'd be interested to know whether the ministry has engaged in any of those activities in general, and whether it would be prepared to engage in some specific studies to develop an alternative economy for that part of Vancouver Island.

HON. MR. McCLELLAND: I'm not aware of any studies of that nature, up to this point at least, but certainly we'd be willing to make staff available if requests came from the community, the region or whatever in terms of putting something together. I'd be happy to look at that.

The other item that you raised at the beginning: I thought I answered that letter, but obviously I haven't. I remember the letter very well; I remember the meeting very well; I know the issue reasonably well. It is, I think, a lotteries question more than anything that I've got available in my ministry. First opportunity I get, I'll dig the letter out of my files and make sure that it's answered. Again, I don't think there are any funds available, certainly not in my ministry. Perhaps in either Provincial Secretary or in Lotteries itself — that is where funds would be found. I'll trace that down and make sure that we get it steered in the right direction.

[5:45]

MR. GABELMANN: May I ask you to do one more thing as well, apart from just tracking it down and answering it? If you agree with the economic argument I'm making about the value of a very small investment of 12 or 13 percent of the total cost, the value of that project to that community and in effect to the government itself, I wonder if the minister would also — he doesn't have to answer this now — help me in putting some pressure on the Provincial Secretary to find a way to make sure this thing can fly.

MR. HOWARD: Mr. Chairman, I think one of the problems we have in British Columbia with respect to economic matters and economic development is a failure on the part of the government to recognize the value of small business to our economy. It's a well-known fact that small business ventures employ more people per dollar of investment than do large corporations. Per dollar of investment, they employ more people more regularly and more consistently than do large corporations. Small businesses, from my experience, especially in small communities, feel an obligation — and they carry it out — to keep people on the payroll even though times may be a little tough for them, because they feel a social obligation, a familial obligation. They want to make sure that those workers have a good feeling about the firm for which they are working, and come back again if they do have to be

[ Page 6191 ]

laid off. A large corporation virtually can ignore that. Employees become numbers and a factor in the balance sheet, and that's about it.

Small businesses spend more of their money on a pro rata basis — the size of the company — within small communities than do large corporations. They have more money to spend in the communities because they're not faced with head office expenses and all the overhead and administration costs that go along with that. They tend pretty well all across the board to be more valuable contributors to the economy than do large corporations. That fact of life, I think, is missed by this government. They don't recognize that, don't appreciate that.

Over the years, the approach of this government to small business has been like a tap being turned on and off. Sometimes small business is given some recognition. Sometimes it isn't. We had a period of time in which a government program with respect to small business was confined to manufacturing and processing, or an aspect of small business that services manufacturing or processing, and then that was abandoned. The mad doctor from Vancouver–Point Grey got into it and said that high-tech is the way to go. So the small business money that had originally been available for manufacturing and processing was wiped out of existence, and the concentration was on high-tech — which may well have some relevance to an urban or metropolitan area, because that's where a lot of these things tend to congregate, but which has practically no relevance whatever to rural areas and to small communities. So it wasn't available to them.

But that was the on-again off-again, the switching of the parameters, the alteration of the guidelines, the moving of the goalposts. Now we're back, somehow or other, for perhaps another reason — a larger provincial reason — into LILA again, which was wiped out of existence at one time. I maintain that the government.... While this minister may be new in this portfolio, he's certainly not new to what happens in government. He's the chairman, and has been for a long period of time, of the Cabinet Committee on Economic Development, and knew what it was all about, and was a participant in this on-again off-again scheme.

It can't function that way. It can't be turned on and off. I submit that because it has been turned off and turned on and adjusted and juggled and fitted into different ways, the poor small business person out there that may want to take advantage of some government program was not able to know from one moment to the next what was available. There's no continuity of thought or continuity of attitude about it.

The other problem is that philosophically I think the government has as an attitude — the idea that we do our best economically when we export the raw materials, or the near raw materials, and buy back the finished product; that we're at our best then. Look at the raw-log export situation. When we were producing copper in this province, it was official policy of government to export the concentrates and buy back the finished pipe, the wire and the other manufactured products. That's the attitude with respect to coal: ship out the coal and we'll buy back the steel, or something of that nature. That kind of balance-off was taking place. That has all been injurious to the totality of our economic well-being, because while we may get — and this is figuratively speaking — $10 for some copper concentrates that we sell to be smelted in Japan, we spend $50 to buy the product back again. And who gets the $40 difference? Not workers in British Columbia, not industry in British Columbia, but industry in Japan and workers in Japan, because they are employed in the process of taking that nearly raw material and transforming it into something usable in a consumer sense.

That's where we're still headed. We still don't have any rational policy of advancing manufacturing and processing in this province, of giving that an emphasis. So long as that attitude prevails, we will be faced with the unemployment figures that exist now, and perhaps higher ones. We'll be faced with the fact that here is a government that believes that we need to have a welfare state, hence $800 million will be going out in social allowance payments. The government's saying: "That's the way we do it. We want to export the raw material and get what money we can for it, so that we can tax that money in some form and then dish it out in welfare payments." That's money down a hole — money down the drain. At the end of that period of time the recipients of social assistance haven't got the money. They've been able to buy the bare necessities for themselves, their families and their children, but they haven't got it left. It's dissipated and hasn't created any employment. There needs to be an entirely new concept and a new purpose with respect to economic development in the province.

A few years ago I made a speech similar to this with a great deal more emphasis than I have the time for right now, because it's close to six — a great deal more emphasis upon what economists call valued-added. What we know is that if you process raw materials further and further through the chain of manufacturing and production, you create wealth, you add value and you employ more people doing that; you increase the value of that product, and you increase the wealth to the province by doing it. The comment I got from the minister's predecessor was: "Oh, that's all guff. That doesn't mean anything. That doesn't count." It's nice to make a speech of that nature, but it just won't work. And that, I submit, is the attitude of this government. If it does not fit within the narrow confines of their mental vision of what should happen economically, then it's not worth trying, it won't work. That works to the detriment of the people in this province.

I want to ask the minister a question, if I could, about the document that was distributed earlier today — the listing of funds made available to various groups, such as municipal governments and companies. This one relates to the small manufacturers' assistance program in the constituency of Skeena. It's on page.... The minister may not have this, but he might be able to get it from his deputy. One of them listed is Lakelse Computer Sales Ltd., Terrace — authorized February 17, 1983; amount, $6,325 — to purchase equipment to start a business specializing in computer software packages and hardware. The earlier tabulation of this a year before or something of that sort — and all of that same information, except that I believe the amount was something like $12,000 or $13,000.... I'd like to know why a couple of years ago was it $12,000 to $13,000 and now it's $6,325. What occurred with respect to that company requiring that money to have it cut in half in that period of time? What was the rationale for that?

HON. MR. McCLELLAND: I don't have that information with me now, but I would be very happy to get it for the member and make sure that he has all the details of what negotiations went on and what we did with that particular company. It's only coincidental that that material was distributed today. I think it was mailed yesterday or the day

[ Page 6192 ]

before. It has been a practice of the ministry to make sure that all members get full details of the activities of the Ministry of Industry and Small Business Development that go on in their communities. So I'd be happy to get all that information for the member and bring it back to him either later in my estimates or by letter — or in whatever way is necessary.

MR. HOWARD: There is something about that that somehow or other doesn't ring true.

I want to draw something else to the minister's attention. This deals with what I think is probably....

Interjection.

MR. HOWARD: Lakelse Computer Sales Ltd.

The other item I want to mention is that in this same listing — and this is carried on from time to time too — is a company that was afforded assistance in the amount of $250,000. It was Madig Industries Ltd., modular home builder, again in Terrace; approved on March 10, 1978. Now somebody made a decision about that. That project never got off the ground; it went belly-up shortly thereafter. We finally have a reference in this book here that it's in receivership and the loan recovery is unlikely. The information was available in 1979 that the loan recovery was unlikely, because they just fairly well disappeared from the face of the earth. Somebody in the ministry who made that decision didn't do a very good examination of things, I submit, because most people around Terrace knew what was going on. It didn't take any great intelligence for people to discover what was happening here.

Then the following year, on December 21, 1979, Hexagon Forest Products Ltd., $30,000.... There's a notation here: "In receiver, 8/81, no distribution." Madig Industries, the one that got a quarter of a million dollars for a project that couldn't move in any event, is the same as Hexagon Forest Products. They got another $30,000 the next year.

Somebody is not looking seriously at these applicants. Really, all we were doing there was pouring taxpayers' money somewhere. It produced relatively little, except expectations that were never met in Terrace.

I wonder if I could leave it at that, Mr. Chairman.

[6:00]

The House resumed; Mr. Strachan in the chair.

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

DEPUTY SPEAKER: I've been advised that the member for Okanagan North (Mr. MacWilliam) has a question of privilege.

MR. MacWILLIAM: During the question period earlier today, allegations were made that I was withholding evidence regarding possible infractions in operations of commercial bingos, and that was certainly not the case. The Attorney-General (Hon. Mr. Smith) did request that such documentation be submitted to him. My only hesitation in doing that at the time was that I wanted to check with the individuals involved, and after checking with those individuals, whose signatures on the documents confirmed the possibility of infractions, I've been advised that the release of such to the Attorney-General is permissible.

The documents are submitted by three Vernon residents acting on behalf of my office in the area and are submitted without prejudice. I would like to ask that the Attorney-General, after perusing the evidence, would recommend the formation of an impartial inquiry regarding the operation of commercial bingos, based on the following reasons. Firstly, due to the firing of four of the six provincial inspectors, there is inadequate present supervision over the commercial bingo halls. Secondly, the recent proliferation of the large commercial halls is in fact threatening a very important source of revenue for the charitable organizations.

DEPUTY SPEAKER: Order, please. Hon. member, at this point the submission does not really constitute a motion of privilege. I respect that you wish to table documents. Do you wish to table documents in the House?

MR. MacWILLIAM: No, Mr. Speaker, it's not a point of tabling the documents; it's just the point of giving them to the appropriate minister.

HON. MR. CHABOT: Mr. Speaker, on this so-called point of privilege....

DEPUTY SPEAKER: It is not a point of privilege.

HON. MR. CHABOT: Well, on a point of order then, in response to the so-called point of privilege, I just want to say that the member said during question period that he would be prepared to present the so-called evidence — so-called allegations — to a public inquiry on bingos, in the event there was a public inquiry.

He identified his willingness to do so at that particular time prior to having had the approval of those individuals. He indicated very clearly that he was prepared to do that prior to having the approval of those individuals. He now indicates that he has sought the approval to make those documents available to the Attorney-General. There's a very serious lack of consistency here on the part of that member.

DEPUTY SPEAKER: There will be no more discussion. First of all, we did not have a point of privilege...

Interjections.

DEPUTY SPEAKER: Order, please.

...nor did we have a point of order. The member has indicated a certain action, which is certainly favourable to the House, I'm sure.

I recognize the member for Skeena.

MR. HOWARD: The point of order I want to raise with you, Your Honour, is that you cannot permit the Provincial Secretary to make a false accusation based on incorrect information when the member for Okanagan North today specifically said that the people who had written the letters said that they would be prepared to present them to an inquiry, and not the member himself. That minister, noted for his ability to falsify things in the House, should not be permitted....

[Deputy Speaker rose.]

[ Page 6193 ]

DEPUTY SPEAKER: Things are going very well, but we do have a little problem here, and the member must withdraw. The member for Skeena will rise and will withdraw any accusation of falsification by the member.

[Deputy Speaker resumed his seat.]

MR. HOWARD: The minister also has to, because he falsely accused the member....

DEPUTY SPEAKER: No, no.

MR. HOWARD: He did. He accused the member for Okanagan North of doing something which the member did not do or did not say. That is a false accusation, and the Provincial Secretary should be man enough to withdraw that.

DEPUTY SPEAKER: I'm sure that the Provincial Secretary will withdraw any imputation of incorrect motives. Please withdraw.

HON. MR. CHABOT: There's nothing to withdraw, Mr. Speaker. You haven't had that member withdraw the fact that, after you had him withdraw the first time, he suggested that I'm attempting to falsify the records and I've made false accusations. Now, Mr. Speaker, I feel offended by that member and his cheap politics in this House.

DEPUTY SPEAKER: No, there's no more now. Order. We've got another problem again. Please be seated. Thank you. I think the matter is settled. Both members have indicated to the Chair clearly that there are no imputations of improper behaviour.

HON. MR. GARDOM: Before someone draws attention to the clock, Mr. Speaker, I move the House at its rising do stand adjourned until 2 p.m. this coming Tuesday.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6:06 p.m.