[ Page 6513 ]

CONTENTS

Private Members' Statements

Atlin constituency. Mr. Passarell –– 6513

Mr. Reid

Mr. Williams

Mr. Barnes

New ferry route proposal. Mr. Davis –– 6514

Mr. Stupich

Mr. Cocke

Math assessment tests. Mr. Rose –– 6516

Mr. Veitch

Mrs. Wallace

Agricultural land reserve. Mr. Kempf –– 6518

Ms. Sanford

Mr. Stupich

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

(Hon. Mr. Rogers)

On vote 22: minister's office –– 6519

Mr. Lockstead

Mr. D'Arcy

Mr. Davis

Mrs. Wallace

Appendix –– 6532

FRIDAY, JUNE 7, 1985

The House met at 10:06 a.m.

Prayers.

[Mr. Strachan in the chair.]

Orders of the Day

Private Members' Statements

ATLIN CONSTITUENCY

MR. PASSARELL: Mr. Speaker, often in this House we, unfortunately, speak of negative issues in regard to our communities. Today I'd like to speak of some of the positive issues in the far north and do a little travelogue on what the north is all about.

The first community I'd like to talk about is Mile 48 –– I doubt if many people in the House or in the gallery have heard of Mile 48. Only about ten people live there. It's on the Haines Road, a couple of hundred miles west of Vancouver. Some of the largest mountains in North America, the St. Elias Range, are up there. There are a number of trappers, probably the major employment in the far north. Very little service is provided by any level of government. There's no school and no medical health station. There's very little there.

If you're traveling farther to the east you have to go up along the Alaska Highway, past Whitehorse, and then you turn south down to the next community in the constituency, which is Atlin. At the turn of the century Atlin was the third largest community in the whole province of British Columbia. It's situated on the largest natural lake in the province, and is also in the Guinness Book of World Records. It has the tallest mountain in the entire world out of a fresh water lake –– 6,500 feet high that comes out of Atlin Lake. Tourism is a major industry in the community of Atlin, where I make my home, and the tourism potential can and should be used further by this government, or by any government in this country.

The other major industry in the community of Atlin is placer mining, which employs usually less than ten people. There are many one-man operations on the creeks surrounding the community of Atlin.

Then you go back up onto the Alaska Highway and drive another 350 miles to the east, and you come to the next community in my constituency, Lower Post, situated where the Laird and Dease rivers meet. It used to be a major Hudson Bay Company trading post at the turn of the century for gold miners going into the far north. Then you go back up to Watson Lake and turn south down Highway 37. Living along both sides of the road for the first 60 miles are many native trappers. There are places like Blue River, Table Mountain. You come to the next community, a place called Good Hope Lake, where I used to live. I was a school teacher there prior to the election of 1979. Six miles past Good Hope Lake you come to a community called Centreville. There used to be 10,000 people living at Centreville; now there are only two individuals, Mr. and Mrs. Zimick. George has been mining that area for about 20 years now. Twenty miles south of Centreville is the asbestos capital of the west, Cassiar, which is a company town. At the turn of the century that area had one of the largest nuggets ever found in the world –– 73 ounces. The Centreville nugget was found in that area.

Interjection.

MR. PASSARELL: That's right. The minister knows that one.

Ninety miles south of Cassiar is a community called Dease Lake, which has the potential to be the economic hub of the far north. It's also the jade capital in British Columbia. Turn west, go along the Stikine, on the ridge, the canyon, the Grand Canyon of Canada as it's called, where B.C. Hydro at one time intended to build a massive hydro development, and go into the community of Telegraph Creek. This is where the Tahltan nation live.

A few miles past Telegraph Creek is the community of Glenora, famous at the turn of the century as one of the stopping-off spots for the miners going north. You travel back on Highway 37, go across the Stikine River, and enter the community of Iskut, a native community.

To the west is the famous volcano, Mount Edziza. To the east is the Klappan coal project, which has the potential of being an economic boost in the far north. Past the communities of Tatogga Lake and Bob Quinn Lake, turn off at Meziadin Junction, go west and you go to the community of Stewart, the only municipality in the Atlin constituency, the most northerly ice-free port in British Columbia. It is a terminus of shipments of asbestos and the Klappan coal, shipments to the world. This area has a great potential for economic development.

Further down Highway 37, you go into the Nass, past the forest company community of Nass Camp and then into the Nishga area, whose largest community is New Aiyansh. Going further west nine miles, you have to cross the Nass River on a swinging bridge, and you go into the community of Canyon City. Thirty miles past that is the community of Greenville, and that's where the road ends. Finally, the last community in my constituency is further at the terminus of the Nass River, and that's the community of Kincolith.

[10:15]

We who live up north do it by choice. We face adversities of gravel roads, record snowfalls and minus 50 degree temperatures in winter. In summer, blackflies and no-see-ums hound us. But with our jobs and our taxes and our lifestyles, we make Canada a better place to live. We are the last frontier in this province and proud of the contributions that we give from the far north to the rest of the community called Canada. That's why we are the strong and free north.

MR. REID: Mr. Speaker, I wanted to comment for a moment on the strong north. Some of the members of caucus had the opportunity last fall of visiting that great area, and I want to compliment the member from that area, especially with the announcement which was made yesterday in relation to the Klappan coal project potential for the Klappan mine up there. What it will have is an initiative and potential for the little town of Stewart.

Mr. Speaker, I wanted to commend the member from that area for the enthusiasm that he's generated in that particular community up there. I wish them the very best of luck, because they deserve some help. If this mine and the anthracite development up there comes off — and there is a good likelihood it will — they certainly deserve the opportunity for the development of that potential. The spirit in all

[ Page 6514 ]

those areas up there.... The Nass camp area and the Indian developments and Atlin certainly deserve a break, being the area of this province which is strong, north and free.

MR. WILLIAMS: I'd like to endorse the comments of the man from the deep south there. Those of us who have been in the northwest of the province appreciate the grandeur of it. I had the opportunity over a decade ago to spend some time in that riding and helicopter much of it. To go down the grand canyon of the Stikine is truly to see one of the great wonders of the world. It's a blessing that B.C. Hydro has its problem of oversupply, because I think in the future it will be seen as one of the great natural monuments in the world.

Of course, the people of the region are a tremendous strength. To spend some time with the people in Glenora or Telegraph Creek or Dease Lake or some of the other places is a wonderful opportunity for the people of British Columbia. So I endorse what the member for Atlin says. It's a unique, special part of British Columbia and it is still the frontier.

I'd just like to make a minor aside about Klappan, however. I did land at Klappan and we did look at the coal in the area and so on, but I'd just like the government to note that the same geologists who worked on northeast coal were involved in Klappan, so before you build a railway and before you build another highway, maybe you could have a second look at it.

MR. BARNES: I don't know how much time I have, Mr. Speaker. I just wanted to say that I had the opportunity to travel on several occasions with the member for Atlin, and there's just one little point that I wanted to make. He forgot to mention that near the community of Stewart is a little part of the United States called Hyder, Alaska. That's a place that all members of this House should visit some time. They have a little outlet there for a refreshment called Everclear. It's a product of about 190-proof spirit from some place in California that's available in Hyder. When you go there, they'll give you the opportunity to have a one- or two-ounce drink, with a glass of water as a chaser. If you're able to drink this stuff without a break, you get it free; otherwise, you buy a round for the House. Anyway, I took a drink of this stuff and was unable to respond for about half an hour. I recall asking the member to please get me a sandwich so I could soothe my throat. I don't recommend that anyone going to Hyder, Alaska, take them up on that offer.

Otherwise, Atlin is a beautiful place, and certainly quite a contrast to Vancouver Centre, where I can get across the riding in about 10 or 15 minutes. We rode all day long just to get halfway across that country. It takes days to go across Atlin. It's good that we have a person who can speak so eloquently about that area. I think that we've all become enriched and felt much more enlightened about the expanses in British Columbia and those areas that normally we don't hear about. So I want to congratulate the member on doing a very good job, and for bringing information that ordinarily wouldn't be available to us about his constituency.

MR. PASSARELL: Everyone is so nice today, and it's not even my birthday. It must be "Thank God it's Friday," or something of that nature.

They call it a rebuttal. I don't really have anything to rebut. Everything has been so cool this morning.

What I'd like to do is extend an invitation for all members of the Legislature to come up north, and we'll get some snakebite and have a good time for once.

NEW FERRY ROUTE PROPOSAL

MR. DAVIS: We need a new crossing over the Strait of Georgia. We need a new ferry link from Point Grey to Gabriola Island. We need a short crossing, a timesaver, an energy-saver. We need a new ferry route, one which will improve the economics of serving Vancouver Island on the one hand, and minimize disruption caused by car and truck traffic in the greater Vancouver area on the other. I don't say build this shorter, better crossing right away. I say begin planning for it now; be ready to build it in the early 1990s. Plan ahead for terminals on Wreck Beach, south of the UBC campus at Point Grey at the western end, and an attractive terminal at the eastern end of Gabriola Island, south of Nanaimo city limits on the other.

Have the Ministry of Transportation and Highways start its work now. Consult with the citizens in municipalities most affected at an early date. Work out their differences; make changes and have a well-conceived design ready when the bulldozers move in and the paving companies gear up five or six years from now.

First, as to expenses. The entire link ferry project, including both terminals, connecting roadways and two short bridges at the Gabriola end, will cost approximately $150 million at today's dollar value. That's what it cost to build the dome at B.C. Place; that's about the same dollar amount as the proposed four-lane highway connector from Merritt to Peachland in the Okanagan.

It's one-third of the projected cost of the Coquihalla Highway from Hope to Kamloops. It's one-fifth of the cost of building a natural gas pipeline from the mainland to Vancouver Island. It's one-eighth of the cost of building the big hydroelectric power line from the Sunshine Coast to Courtenay, north of Nanaimo. It's a drop in the bucket compared to the cost of building the Tumbler Ridge rail line in northeastern B.C., light rail rapid transit through Vancouver, Burnaby and New Westminster, and Expo 86.

It's a tiny investment compared to double-tracking the CNR through B.C., or the CPR tunnelling, once again, through the Rockies. It's a lesser investment with comparable results as far as the public is concerned, improving the lot of similar numbers of people at a fraction of the cost of these other projects. It has, in other words, a favourable cost-benefit ratio.

It's in the first rank insofar as value generated per dollar invested is concerned. It's perhaps number one from a transportation and economics point of view. There are direct savings and there are indirect savings. The direct savings will turn up on B.C. Ferries financial statements. The Point Grey to Gabriola crossing would take three-quarters of an hour sailing time. Departures would be on the hour every hour. Every second hour the same vessel would be back loading, either at the Point Grey terminal or the Gabriola Island terminal. This means several things. It means that one vessel can do the job that two do today on our two main routes, Tsawwassen to Swartz Bay and Horseshoe Bay to downtown Nanaimo. It means that we don't have to add more vessels to our fleet for a long time. It means a savings in vessel construction. It also means that we don't require the same services on board — the same dining rooms, the same large

[ Page 6515 ]

crews, the same high operating costs. B.C. Ferries operating expenses per vehicle or passenger carried will go down accordingly. To put it another way, we double our vessel capacity on the Strait of Georgia without investing another cent. We reduce crew sizes. We deliver passengers and freight-carrying trucks across the Strait of Georgia for a half or at most 60 percent of the unit cost we are experiencing today.

What about the user, the customer, the traveller, the trucker using the ferry system? He or she doesn't have to go north across Burrard Inlet, along the North Shore to Horseshoe Bay, spend two hours on the water and end up in congested downtown Nanaimo. The time will be more than cut in half. It may be cut by as much as two-thirds. Crowding on our First and Second Narrows bridges will be reduced. The jam-up in Horseshoe Bay will be avoided. Time and energy will be saved. Clearly the user benefits considerably from a new one-hour ferry link from Point Grey to Gabriola Island.

People living on the North Shore have to be for it. People going north to Squamish and Whistler have to be for it. Anyone on Vancouver Island destined for the Vancouver International Airport, downtown Vancouver, Burnaby, New Westminster and Richmond have to be for it. The same reasoning applies vice versa to people originating in those areas and headed for destinations north of Duncan on Vancouver Island. It's a big time-saver and energy-saver for all of them. There are hundreds of millions of dollars involved if we look ahead 20 or 30 years and focus on this new connection to the Island.

Environmentally, its pluses outweigh its minuses. By departing from Point Grey we avoid the ecology of most of the Fraser River delta. Building a terminal in the vicinity of Wreck Beach needn't upset our summertime skinny-dippers unduly, and it will tidy up what has been essentially a messy log-booming ground at the mouth of the north arm of the Fraser River. It's a sort of no-man's-land today. Properly planned, this new takeoff point can be enjoyed by thousands of travellers daily. Why reserve it for the few, for a lot of logs and the occasional visitor?

Access through Vancouver — this is a challenge. There are many arteries, however, running east-west through Vancouver South, Kitsilano and the Dunbar area of Point Grey: Broadway, King Edward, 41st and Marine Drive. There's a new four-lane highway running along the south extremity of the University Endowment Lands, dropping down to Wreck Beach. It's entirely within lands under provincial jurisdiction. The province would encounter fewer difficulties there than had it to build an eastern access to the new link through municipal territories.

At the Gabriola or Vancouver Island end, there's a particular problem. Local opinion is divided about fifty-fifty re the desirability of a ferry terminal being built at or close to the Island's eastern extremity. It's a favourite boating area; it's a beautiful cottage area. However, a short crossing to Vancouver Island would make Gabriola a prime residential district. Careful planning, routing and zoning are imperative. That's another reason why the new crossing can't be rushed, why considerable time is needed. Planning must be carefully done.

I'll conclude with the rest of my remarks later.

MR. STUPICH: I suppose my first comment must be one of disappointment that the Minister of Highways (Hon. A. Fraser) is not here to respond this morning. Certainly this is an issue that has been discussed for many years. When I first ran some 36 years ago, one of the first questions put to me by constituents from Gabriola Island was: would I support the proposed bridge between Gabriola and Vancouver Island. They weren't thinking about a third crossing at that time. Over the years I have supported it.

[10:30]

However, as I listen to the member this morning, and as I think about the problems, I wonder whether it isn't the same sort of technocratic approach to a problem as was presented to us by the current Minister of Universities, Science and Communications (Hon. Mr. McGeer) when he proposed an underwater tunnel between the mainland and Vancouver Island.

I don't think it's enough to look at the problem of transportation between the mainland and the Island.... Certainly there was a problem a few years ago. But with the years of experience we've had under the Social Credit administration, when the economy has been damaged to the extent that the present ferries are more than adequate to handle the traffic, we have plenty of time to study the possible solutions before rushing into anything. And the member did recommend that study.

The point that he talked about on Gabriola Island, the eastern extremity, was examined when the NDP were in office. With the advice of the ferry captains in particular, we moved away from it because of the small islands in that area and the navigational difficulties. The ferry captains, I believe, unanimously recommended some other point, if there were going to be a ferry crossing between Gabriola and the mainland.

[Mr. Ree in the chair.]

I would certainly endorse what the member has had to say with respect to study. Let's study not just the effects on Vancouver but also the effects on and around Gabriola as well — on the boating fraternity, and what that kind of traffic would do to that recreational area. Of course, we should also study the effects on Vancouver Island — the major relocation of roads and what it would do to that part of Vancouver Island which would be subjected to the heavy traffic that would be redirected from other terminals. Certainly there is no need to rush into it. There will be no need for a third crossing until something happens to drastically change the economy in British Columbia.

MR. COCKE: Mr. Speaker, I'm not particularly familiar with the other side — that is, the Gabriola-Nanaimo area and what access there might be. Incidentally, I feel that this kind of recommendation is refreshing when you compare it to the recommendation of the minister of science and technology, who was talking about a tunnel from the mainland to Vancouver Island. In my opinion, as my colleague says, it's tunnel vision.

It does make a lot of sense. But there is an alternative to the West Point Grey terminus. That's Iona Island. As a matter of fact, that has been studied a good deal. The reason Iona Island might be looked at as part of the study is that as we grow, as the lower mainland grows, the population is naturally going to be further and further east. To access West Point Grey from, say, New Westminster or Surrey, or whatever, would be a great deal more difficult than it would be to

[ Page 6516 ]

access Iona Island, particularly now with the new bridges and other things going on in terms of east-west links.

I agree with my colleague from Nanaimo that this is something in the future, but I also think that another link to the Island is eventually going to have to happen. The Island is growing. The Island is a very desirable place to be — to holiday or to live. I think that we should have the kind of access and egress that makes us a free-flowing community all over British Columbia.

Hopefully, too, consideration will be given at that point to saving even more money, and that's by using natural gas to power the ferries. I really think that ultimately all the ferries should go on that system. I recognize that there are some problems now in terms of the dangers, but I'm quite sure that can be taken care of.

MR. DAVIS: If there's anything new in what I'm saying today, it's only that I'm recommending that Point Grey be the jumping-off point. I would see traffic that originates in Vancouver city, in Burnaby and, perhaps to some extent, to the east using the crossing intensively. Anyone originating in the United States or the southern interior, or indeed in the southern part of Surrey and so on, might well go via Tsawwassen. If there were a terminal on Gabriola Island, there could be a ferry run north, so that traffic would substantially bypass the congested areas of downtown Vancouver, etc.

Iona Island has often been mentioned in the past, but Iona is linked to Sea Island. First, that's federal. Then there is the sewage outlet problem. It involves the municipality of Richmond. It involves decisions on a major highway artery onto Sea Island, across Sea Island and onto Iona Island. Whereas Point Grey has street and highway linkages right through to at least the Wreck Beach area. So the infrastructure on the western end of this link, on the mainland side, would be much less expensive, and it would really serve substantially Vancouver to Vancouver Island. The up-country traffic and border traffic would perhaps go via Tsawwassen to Gabriola.

I would also like to see the eastern terminal — I'll call it the Point Grey terminal — as far as possible from the Fraser estuary; a minimum environmental impact, in other words.

Again, I'm advocating serious study now, not construction now. But I think another crossing is needed. I believe that the economics of a much shorter crossing, a one-hour crossing, are already compelling.

MATH ASSESSMENT TESTS

MR. ROSE: May I say that I am pleased that the parliamentary secretary to the Minister of Education is here today to respond to my questions. When this rule was first drafted, the idea was that the minister would respond, and I'm sorry that ministers don't take greater opportunity to respond to these things. I think it spoils the whole rule. Mr. Speaker, I know that I'm a little bit out of order, but it's difficult with some of these for a minister to respond. How would you respond to a title, "Our True North Strong and Free"?

On the other hand, mine is a very specific one; it has to do with the math assessment tests going on currently in the schools of British Columbia. I think that when you have to file these things on Tuesday, that should be ample time for the department to prepare a response. I regret it, and it makes the rule flounder, I think, and I'm glad my colleague, who is on the rules committee, is sitting there listening to my complaints. I know he'll do something about it; especially if it comes to a Health matter, he'll be here.

Mr. Speaker, there was a little story in this morning's paper entitled, "Taking Sex Out of Math." It was a very sexy headline. It went on to say, though, that some of the districts, notably Vancouver and Coquitlam, have decided that the gender section of the current mathematics assessment test should not be taken by the students, because it actually not only encourages sexism but encourages people, especially young women, to regard themselves as perhaps not as naturally talented in math.

In addition to that, it raises a number of other doubts. The Coquitlam trustees say that the sexist gender section is none of the government's business, and they're not going to do it. Some parents have asked for the return of the questionnaire, because of invasions of privacy. I've had some of that myself, so I'd just like to pass it along and say that I think the tests are an invasion of privacy in many cases. And they are identifiable; they go through the pretence of suggesting that, well, the kids don't have to sign these things, but there are a number of indications about how a person could be identified. I'll go on with that a little later.

These tests are being given in grades 4, 7 and 11. There are certain classes of people that are going to be very sensitive about certain questions on the test under the section called "student background." For instance, here are questions 9 and 10: "What was the highest level of school or college attended by your father or male guardian?" That's one of them. Take a grade 4 student. I wonder if a grade 4 student would actually be a reliable person to transmit that information. "What was the highest level of school or college attended by your mother or female guardian?"

Here is the list of reasons for studying mathematics, you know. And there are a great number of other things that I think really are not suitable to ask young children, especially in view of the kinds of families that we have now. The assumption is: a nuclear family. Surely the principle that we should follow is that if you're going to ask these questions about family situations, at least you should get a consent form from the parent. You're not getting that now.

I can give you examples of how, on this test, you can actually identify who the student is along with his parent and the attainment. What student wants to feel good about admitting that his mother is a mathematical moron? That is, if his mother is even living in the house. His mother may well be a mathematical moron, or his father only went to grade 4 because his grandfather was in grade 5 and the father didn't want to pass him. There are a number of things here that I think are really inappropriate to ask students to bring to school. Obviously, some of them may not even know.

There are other things, as well, that I think we should look into. The natural parents, or whether or not they have a family which is a nuclear family with mothers and fathers and sisters and brothers.... Half the kids come from, in many cases, homes in which there isn't a natural parent in the home, or maybe only one — or there is only one person in the home.

Then there is all this attitudinal stuff that they're asking about too, which I, and so many other people too, think is inappropriate — a lot of the attitudinal stuff about whether you like math or whether you don't. Then, I think, to throw kids into an emotional turmoil immediately before they are given the test is inappropriate. A lot of these questions can trigger that sort of thing.

[ Page 6517 ]

About the identification here, I've given some hint of that, but just on the attitudinal, on the gender section: "My father enjoys doing mathematics." Now if I'm a grade 4 student, do I really know whether my father enjoys doing mathematics or not? "My mother enjoys doing mathematics." "My father is usually able to help me with my mathematics." Who wants to admit that his father couldn't help him with the mathematics? This is easy to satirize, but that doesn't mean it's funny, or that my intervention is frivolous. It isn't. It's deadly serious. I think these sections should be withdrawn.

How can you identify these kids, for instance? "What language do you speak at home?" Well, isn't it very easy to find out, if you're a recent immigrant from Greece or Hong Kong or Vietnam, which child has answered this particular question? "What program are you in? Have you ever passed a grade or accelerated or have you ever had to repeat a grade?" You have to fill in your age, you have to fill in your gender and your grade. Well, it's a very, very simple way to identify people under that. So on the question of sensitivity, reliability and identification, I think these attitudinal sections on student background and their gender section should not be there –– I think they should be revoked, and I think every school district should take the right to remove these offending sections.

The teachers' guide has some interesting things too, if I can lay my hands on it. We have recently had Bill 35, which entitles school boards to terminate the services of teachers under certain conditions.

DEPUTY SPEAKER: Time.

MR. ROSE: I'll go into that when I'm called again, in the rebuttal section.

[10:45]

MR. VEITCH: Mr. Speaker, the comments on the minister — the minister is out doing good things for education in the province of British Columbia. I just thought I'd pass that on to the critic.

Mr. Speaker, I'm very much in favour of the principle of testing. I think we should always be searching for excellence, no matter in what area within this province or indeed within this country. We ought not to always tie people — like they did during the time of war, tie every ship to the slowest one in the convoy. We should allow people to be able to move ahead.

However, I do happen to agree with the member. I'm sure what the hon. member is saying is correct; I haven't had a chance to look at these tests. I do, in essence, agree with what you're saying. I don't think it's any darned business of a teacher or anyone else to know what the highest level of college or university that the parent or guardian attained. Idiots do not necessarily beget idiots, unless they happen to be politicians from time to time. I agree with the hon. member that this, on balance, appears to be an invasion of privacy, and I think that educators would be a lot better off dealing with educational matters and dealing on a personal basis with their students, rather than burdening themselves with paperwork.

When it comes down to mathematics, hon. member, and they ask the question whether or not the father could help them, I'm glad my 15-year-old son didn't take the test.

As I say, I support the principle of testing in schools there's no question about that — but I don't support the obvious nonsense that goes along with the thing that the hon. member has brought to our attention.

DEPUTY SPEAKER: The Chair recognizes the member for Cowichan-Malahat for almost three minutes.

MRS. WALLACE: Mr. Speaker. I am really pleased that my colleague for.... Is it Maillardville-Coquitlam?

MR. ROSE: Not recently. Coquitlam-Moody.

MRS. WALLACE: We have great trouble with those two ridings.

I'm very pleased he has raised this issue in the House today, because what he has told us today doesn't really relate to a math test or a math assessment test; it relates to prying into private family details. It is absolutely wrong to have children in schools subjected to that kind of a document and be forced to sit down and reply to that kind of document. If that sort of information were asked on an application form for a job, the company that asked it would be in trouble with the law of this land.

Here we are with a brand new constitution that's supposed to protect the rights of everyone, and we have this government subjecting small children to that kind of a form. We're certainly infringing upon the rights of children — absolutely infringing on the rights of children. That is a disgrace. I wish the minister were here, and that he would stand up and tell us that he will remove that from the schools. I'm shocked. I really am. I had no idea, in spite of the fact that I have an office just two doors down from my colleague — we're always so busy, we never have time to talk to each other. But I'm shocked at this.

MR. VEITCH: ...a math test.

MRS. WALLACE: It's not a math test. That is not a math test. It's not even a math assessment test. That is an assessment of the family, the background, the very personal details of that family. It's an infringement on civil liberties; it's an infringement on the constitution. If it were in any format other than in a school, it would be an infringement on the law of this province. The minister should be here to stand up and tell us he will do away with it.

MR. ROSE: What I was about to deal with before my time ran out earlier was the business of the teachers' section as well. I was making the point that now we have a new law, Bill 35, that entitles the boards to terminate teachers without any regard to seniority. Seniority is the third after competence and also the certification.

We're concerned that some boards might take an unfair advantage of it for whatever reason, political work or whatever, and to terminate, since seniority is no longer a particular protection. But look at the teachers' section, if you will, please. Remember now, teachers are in jeopardy.

Here's a question they asked the teachers about on scale S problem-solving — under the teachers' guide. "My district provides adequate assistance and resources for teaching problem-solving." Then it goes through agree, agree to disagree and right through there. Well now, if your teachers are being rather critical of their district, they could be vulnerable, couldn't they?

[ Page 6518 ]

AN HON. MEMBER: Nonsense!

MR. ROSE: The parliamentary secretary screws up his face and says nonsense.

"I am satisfied with my teaching of problem-solving." There's another question. Suppose you say you're not. Does that mean you're not doing a good job? It's easy to teach problem-solving. Here's another one: "How many workshops on problem-solving have you attended in the past year?" You drone — you haven't gone to any and you find problem-solving difficult? What are the reasons for this test, anyway?

If you take the memorandum from Jerry Mussio, executive director of the schools programs division, he'll say: "We have told teachers in the BCTF that these types of questions, background training of teachers, opinions dealing with curriculum, are used to help shape new curriculum materials and that is to ensure new materials meet the needs of teachers and students." That sounds perfectly reasonable until you look at an intro to the teacher's guide by a man by the name of Art Olson, coordinator of the learning assessment branch, the man in charge here. "District and school level results will be sent to your district early in the school year. At that time superintendents will determine how the results will be used in your district." That doesn't sound particularly sinister, unless it has to do with something about teacher termination and teacher retention.

I think the whole thing is badly thought out. I think a lot of the questions could be criticized even in the math part, on the grounds that they ask for recall, they tend to be attitudinal, and they're really not part of an assessment package that I think is acceptable in the schools of British Columbia.

MRS. WALLACE: They really need that now that teachers don't have seniority.

MR. ROSE: Well, that's exactly the point that I'm try to make. So anyway, that's really the concern. I think that a lot of people are concerned about it, Mr. Speaker, and I think it was important to bring to the attention.... I hope it will come to the minister's attention by way of the parliamentary secretary.

AGRICULTURAL LAND RESERVE

MR. KEMPF: Mr. Speaker, on April 18, 1973, legislation was passed in this House, under the guise of seeking protection for agricultural land, which since that time has perpetrated untold hardships on many citizens of this province, particularly northerners. It has removed their freedom and done irreparable harm to the development of the northern two-thirds of this province since that time.

Mr. Speaker, this piece of socialist, repressive legislation masterminded and drafted by the present second member for Vancouver East (Mr. Williams) — I'm sorry he's not in the House today — is still in place after 12 years. It's high time something was done about it.

Mr. Speaker, to have such restrictions in place north of the fifty-first parallel in British Columbia is a travesty. It is — and I've said it many times inside and out of this House — at least 100 years ahead of its time.

You don't understand the problems of small, rural communities in the northern part of this province, or you wouldn't laugh, Madam Member.

Mr. Speaker, in our small communities there is no urban sprawl. There is no development pressure on adjacent agricultural land. There is no danger of wiping out forever, blacktopping over, or placing in jeopardy in any way the agricultural land which exists there. In fact, undeveloped agricultural land is everywhere in the north, and such regulation north of the fifty-first parallel was never and in all likelihood will never be necessary. Development in most areas of rural British Columbia will never, for the next hundred years at least, present a threat to the well-being of the agricultural community. In addition many thousands of hectares of land, which will never, ever make the grade as agricultural land, are frozen within the agricultural land reserve, causing untold financial hardships to our citizens in the north and in the rural areas of this province, literally robbing senior citizens — our pioneers — of a retirement nest-egg which they in many cases have worked their lives for. It's unacceptable, it's unjust, and it must be changed.

Not only in this case, but as well due to this ill-conceived socialist legislation brought in by a government that sought to place the heavy hand of government on everyone and everything, and did not believe in private ownership of anything, particularly land.... Because of this we are literally driving our young people from the land in this province. We make it impossible for sons and daughters to remain on the family farm, resulting in a near exodus of those young people from the agricultural industry.

It's a catastrophe — it's a literal catastrophe — and one which we all will be sorry for in time. Regional districts are using this legislation as a crutch, as a tool for their own narrow, short-sighted and, in some cases, deceitful motives — attempting to direct our citizens as to where it is they think they should live, what they think they should develop, and where. It's literally destroying initiative, using the legislation, I maintain, for what it was designated for in the first place.

This assembly and this government must act now to rectify this wrong, this gross blunder, of 12 years ago. An agricultural land reserve north of the fifty-first parallel has been proven wrong. It has failed, it is repressive and it must be done away with. Many northern British Columbians feel as I do and support me in this endeavour. Many northerners have experienced the hardship created by this legislation. For some, it's too late; for many, we must act immediately. I call upon the government to listen to the needs of rural citizens of British Columbia, to undo what a socialist government did — a socialist government bent on control. I call upon this government to do away, on behalf of the rural citizens of this province, with the agricultural land reserve north of the fifty-first parallel.

[11:00]

[Mr. Strachan in the chair.]

MS. SANFORD: I don't think I've ever heard such a short-sighted viewpoint expressed in this House before, except on other occasions by the same member. If that member were acting in the best interests of his own constituency and his own constituents, he would be demanding that we ensure that the very limited amount of agricultural land we have in this province remains within the agricultural land reserve so we can have food for the very people that he represents.

MR. REID: Isn't that a joke!

[ Page 6519 ]

MS. SANFORD: Well, it's a joke, is it? I would like to know where those members expect to grow food if in fact there is no agricultural land left in this province. Only 4 to 5 percent exists in the entire province. If the land does make the grade, as the member suggested, then let me tell you it would not be in the agricultural land reserve, because it's dependent upon the capability, as determined by agrologists, of that land to produce food. One of the best things that the government did between 1972 and 1975 was to ensure that the agricultural land in all parts of this province was included in an agricultural land reserve. One of the best things — there's no doubt about it.

That member should be up here saying to his government: "Make sure that you change the Land Act to eliminate the political interference by cabinet that's now made available through the changes that were made to the original act back in 1977." What he should be doing is standing up here and arguing with his government to ensure that the precious land that we have that is capable of producing food is not subject to erosion, is not subject to the degradation that's currently taking place. The government should be making far more of a priority of ensuring that the little bit of land that we have is capable of producing food.

Does that member not know that in areas like California and Florida, where we rely very heavily on imports, land is being taken out of production, hectare by hectare? Does he not know that that land down in California and Florida is becoming so salted and so salinized that it's no longer capable of producing food in many cases? Where does he think the food is going to come from, once the Americans have got to the stage where they don't have spare food to export? They will keep it for their own people and we in British Columbia will not be able to produce the food if, in fact, we follow the kind of short-sighted recommendation that has been made by that member today.

I certainly oppose the statement made by the member.

MR. STUPICH: Mr. Speaker, the member expressed concern for farmers. I would suggest that even that member would agree that it's only a small minority of the farmers who stood to gain by the sale of agricultural land for purposes other than for food production — just those who happened, by chance, to be next to some development that society as a whole has allowed or encouraged — perhaps a highway intersection, perhaps a school being built on that property, something like that happening. And because the farmland in question is next to that, it is suddenly more valuable for other purposes. Certainly not all farmland in the province can be sold today or tomorrow or even next week for industrial or commercial purposes. It's just the isolated instances. If that member were really concerned about protecting farmers, then he would be doing something to strengthen the kind of legislation that came in in 1973 to help farmers make a living farming, rather than becoming land developers. If he had the interest of farmers, that's the position he would be taking.

I would remind that member also, Mr. Speaker, that when the legislation came in, the implementation of the legislation was left to the regional district — the local area — and there were public hearings in every regional district, where maps were available to show which areas were going to be included in the land reserves and which weren't. Those public hearings were listened to in his area as well as in the Richmond area.

HON. MR. NIELSEN: The maps were redrawn.

MR. STUPICH: Yes, there was always the opportunity at each stage — the Land Commission then took the maps and, to the best of my knowledge, never included any land that has been left out, except from those areas of the province where the ranchers, in particular, asked for further lands to be included. So it was up to the regional district. The areas were shortened rather than extended after that, and there was provision in every instance for there to be five-year development around communities — enough land left for that purpose.

MR. KEMPF: Well, Mr. Speaker, it's quite apparent that the members opposite did not listen to what I said. I would ask them to go back to Hansard and read what it was I really said in my private member's statement. We hear members talking about California and we hear members talking about the regional district. I said the regional district is using this legislation as a crutch, as they have since 1973, to the detriment of literally thousands of our citizens out there in the rural areas of this province.

Interjection.

MR. KEMPF: If you don't know that, Mr. Member for Nanaimo, you know nothing about the northern two-thirds of British Columbia. You haven't talked to the people out there — not even your own supporters, literally dozens of them, who come to me on a weekly basis, pleading with me to convince government to do something about this repressive legislation. You haven't listened, and I ask you to go back and read the statement which I made and think about what it was that was in that statement. Then maybe you should go to the north, to the area north of the fifty-first parallel in this province, and speak even to some of your supporters, who do not support this socialist legislation.

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

ESTIMATES: MINISTRY OF ENERGY,
MINES AND PETROLEUM RESOURCES

(continued)

On vote 22: minister's office, $184,214.

HON. MR. ROGERS: I would like to just dwell briefly on a couple of subjects the member for Mackenzie (Mr. Lockstead) brought up yesterday during the brief period of time we had to address these estimates. The cost of the Cheekye-Dunsmuir powerline is $840 million. Like you, I would agree that there were some conflicting statements about what in fact it was going to cost, especially during my mock trial at Madeira Park, which was a nice initiation to being a minister and finding out what it was all about — a little experience in speaking to the people. But that was the final cost of building that transmission line. It's also interesting to note that that was the first transmission line built to carry power to the Island since the 1950s. The last one essentially went from Tsawwassen to Galiano Island, across Saltspring Island and then to the major part of the Island.

That circuit was in place for almost 20 years. Then there was an increase in demand. There were times on the Island

[ Page 6520 ]

when people had to be curtailed in their electrical requirements at the industrial end — not in residential, commercial or hospital uses, or anything like that. The decision to make the Cheekye-Dunsmuir powerline was based on some projected increases. I suppose we will probably be well into the next century before the next line has to be built, and maybe even longer than that.

A power transmission line isn't something you make on a very small, incremental basis. You have to make them on a major basis. At the present time we have excess capacity on the Island, and I hope we have excess capacity until well into the next century, because that's a very major undertaking. It causes a great deal of grief for all the communities it goes through, even though this one only transgressed in a few communities. Anytime you make a power transmission line, you cause that kind of problem. Nonetheless, it is in place and it is supplying power to the Island. The Island no longer has to face the possibility of brownouts.

[Mr. Veitch in the chair.]

The Island is about 30 percent self-sufficient in electrical generating capacity through hydroelectric facilities at the present time. Just to dwell on the Cheekye-Dunsmuir powerline for a few minutes, and have a reflective look at it, if Hydro had been given the mandate to just supply the Island with power, this would not have been the number one, pure bottom-of-the-line, dollar choice. That would have been to build a thermal plant somewhere on the Island and supply it with coal, and run that kind of a system on the Island. That's not particularly wise from an environmental, ecological or social point of view. British Columbia has to be looked at as a whole. While we have abundant hydroelectric resources, even if it costs extra money to get those into various parts of the province — and the Island isn't a big profit centre for B.C. Hydro, certainly not like the lower mainland is — it still makes good sense to do that. For some particular reason we don't apply the same kind of logical argument when we look at gas pipelines — I just thought I'd mention that.

The surplus that we have at B.C. Hydro will only last for a short period of time. Once that surplus is gone, then let's talk about what power alternatives there are for the people of the Island. The Island consumes about 2.5 million barrels of oil a year right now, which could be and will be replaced when gas is available on the Island. The projections for the Vancouver Island natural gas pipeline never included an assumption that the pulp mills would go from wood waste to natural gas. It was never our assumption that that would happen. In fact that's not a particularly wise use of an energy resource. It makes much more sense to use the wood waste. But it does make sense to replace imported oil, which at the current time is used to fire the boilers on the Island when it's required, with gas. I just wanted to point out that those projections were made on that basis.

I think that covers some of the questions you brought up yesterday during your brief time. I look forward to your next questions.

MR. LOCKSTEAD: I raised a question out of context in a sequence of issues we wish to discuss with the minister only because of the very limited time we had last night. But I would ask the minister, since we're on the subject for a minute.... I don't want to dwell on this too long, but in my view the appropriate decision was to construct a natural gas pipeline to Vancouver Island rather than the Cheekye-Dunsmuir powerline. The cost would have been less; the benefits would have been greater. Electricity on Vancouver Island would have been used less because people would have converted to natural gas, and certainly some of the industries as well.

The $840 million cost. In my guesstimate I included the cost of the distribution lines as well. My estimate was in excess of $1 billion, and it may or may not have been out. It's difficult for us to get those kinds of figures; those figures are really not available to me.

In any event, one last item on that. I had this question down for a different part of the estimates later, but while we're discussing energy on Vancouver Island perhaps the minister could at some point bring us up to date on the extent of the exploration work for gas and oil that is now taking place on Vancouver Island, or that is projected to take place certainly in the Union Bay and Courtenay area, that whole central east coast area of Vancouver Island. It's been determined — according to newspaper accounts; that's the only information I have on this particular topic — that according to the geological structure of the area, once exploration work gets seriously underway there's a good chance that significant amounts of gas and possibly oil may be found in that area.

Mr. Chairman, I want to start this presentation off this morning by discussing briefly the state of the mining industry in British Columbia. I'll try not to be too lengthy. I've accumulated more information here than I can possibly want, but we'll try to keep it brief.

[11:15]

Listening to the members across the House over the last several years, particularly in terms of the mining industry in British Columbia, you would think the three short years of good NDP government in the province was responsible for every mining closure in the western world and for the decrease in the price of metals throughout the western world. Of course, all of that is nonsense. I'm not going to refight the 1975 election, but in my short time as debate leader for our caucus I've had the opportunity of going through a great deal of material; maybe not as much as I should have, but no human being could possibly get through the mass of stuff that crosses our desks every week. But I'd like to remind the minister — well, the government, because I don't think the minister has been too heavy on this; but certainly the government side — that as far as I have been able to determine, not a single operating mine shut down between 1972 and 1975.

I have been told that a couple of mines which did in fact shut down had nothing to do with the government of the day. It was simply that they ran out of ore. When mines run out of ore, they shut down. They have to. What are they going to mine? Granite? In any event, with those two possible exceptions.... I have no details on those; that's only been reported to me second-hand. But not one single operating mine in British Columbia shut down between 1972 and 1975, in spite of the fact that in 1974 the Japanese, because they had literally millions of tons of excess copper in reserve, dumped that copper — which they had the right to do — on world markets. In 1974 the price of copper decreased dramatically over a very short period of time, from $1.32 per pound to somewhere in the area of 44 cents to 46 cents per pound, as I recall the figures.

Members on that side of the House indicated that we were driving the mining industry out of the province, and I say hogwash. Information from the industry itself indicates that

[ Page 6521 ]

under this government, 14 of the 29 operating metal mines in this province have shut down since 1976, most of them between '82 and '85. Mr. Chairman, 1982 was the worst year on record for the B.C. mining industry, and 1983 was little better. I agree and I understand — I anticipate the minister's response — that poor markets and low prices, particularly in the metal mine sector, were responsible for mine closures and lower capacity at existing mines. Between 1982 and 1985, 14 mines closed in British Columbia. This meant the loss of approximately — well, the figure we have here — 2,700 direct jobs. When I speak with the people in the industry, and I try to meet with them as frequently as I can, and visit mines as well — I may talk about that after a while.... Including the indirect jobs, the figure I have here — and the minister may or may not want to challenge this figure — is that a total of 12,000 jobs have been lost between 1982 and 1985 because of mine closures.

HON. MEMBER: How many?

MR. LOCKSTEAD: Twelve thousand. That's the figure for unemployment. So we have a government that is now talking about job-creation programs, and has introduced a number of giveaway bills in this House in order to create jobs. We shall see. We supported most of those bills. If there is a chance of any of that legislation producing new jobs in British Columbia, fair enough. But we shall see. I'm rather dubious about some of that legislation.

Such job losses have disastrous impact on our society and on the economics of mining towns, which are quite often single-industry towns. I have been involved on three separate occasions where towns or communities have been closed down or partially closed down because mines have closed down or governments have made arbitrary decisions. Ocean Falls is a good example. That was not a mining town, but the disastrous impact on the people involved.... You have to have been there to understand the impact right through the whole community, involving schools and hospitals and what have you — the lifestyle of people. In a moment I'm going to give you one or two very short case histories.

I have a list of all the mines and the number of jobs lost in all those 14 mines that are shut down. I'm not going to go through that — read the list — but I can. The minister is as much aware of these communities as I am. Since having been appointed to this particular critic's role, I've received a great deal of correspondence. This one file alone — I'm not going to go through it — deals with the closure of one mine in particular. I'd like to give the House just a brief case history of that Highmont mine at Logan Lake, and how people are losing or have lost their homes and have been displaced.

Highmont mine at Logan Lake opened in 1980 and closed in October, 1984, it says here, due to depressed copper and molybdenum prices. Workers were originally told there was supposed to be 20 years of work there. The mine closure was announced in September, 1984, with no prior notice or consultation on the part of the company, Teck Corp. The mine formally closed a month later, with 419 employees — I'm reading this, Mr. Chairman, because I want to be as accurate as I can with the figures I'm using — thrown out of work. No compensation or layoff package was offered other than one month's worth of pay after closure date, as had been written in the collective agreement. Of the 419 laid-off employees, 150 had purchased homes in Logan Lake. A major concern of workers was the loss of their houses and the money invested in them. Teck offered forgiveable loans toward meeting mortgage payments for the first 12 months after the closure, or families could vacate their houses and turn over responsibility for the mortgage to Teck. In either case, homeowners in Logan Lake are left with houses that are basically without value. They have little hope of any return on their investment.

The impact on unemployment. This mine closure had a dramatic impact on the unemployment rate in Logan Lake, where most of the Highmont employees lived. In August, 1984, 80 people were on UIC; in March, 1985, 158 people were on UIC — a 98 percent increase in the number of people on UIC over a six-month period. The impact of the closure is also reflected in statistics for the larger Kamloops region, including Cache Creek, Logan Lake, Ashcroft, Merritt and Kamloops, where the miners live. In August, there were 8,523 people on UIC in that area; in March, 1985, 9,163 people. In other words, 640 more people were on UIC over a six-month period, an 8 percent increase in the number of unemployed over six months.

I have a long list dealing with that community and the impact on the people and the morale factor there. New business in some of these communities.... New business activity in Logan Lake is nonexistent, and the volume of sales in local grocery and retail stores is drastically down. Apparently the only businesses which are experiencing increased customers are the bars. When people have nothing else to do, I guess they go to the bar.

Here's another short case history, Mr. Chairman, in terms of the situation in mining in British Columbia. This is coal mining in southeastern British Columbia. Mines do not always fully close down when economic conditions deteriorate. They may operate at less than full capacity, which also results in worker layoffs and severe repercussions on the single-industry communities. This has been the case in the coal mining region of southeastern B.C., where contract cutbacks by our Japanese customers during the past few years have resulted in worker layoffs and economic instability. I have a few examples here. For example, the peak size of the labour force for Westar Mining, formerly B.C. Coal.... The largest coal-mine in the area was 2,153 people in 1981; in 1982, 200 people were laid off; in 1983, 400 people were laid off because of decreased Japanese demand for coal. The current size of the labour force is 1,298 — 60 percent of the size of the workforce some three years ago. I have figures here as well dealing with layoffs from Crows Nest Resources due to contract cutbacks. As I said, they have had a dramatic impact on regional unemployment figures.

The downturn is reflected in housing statistics. In the main mining community of the region, Sparwood, CMHC reported a rental vacancy rate of 8 percent for October 1982; by April 1983 this had risen to 24 percent; by October 1983 — and this is an astounding figure — the vacancy rate had risen to 49 percent. Empty apartments.... I have all that here, but I don't think....

Anyway, the conclusion: contract cutbacks in the coal industry have also created the boom-and-bust situation and economic instability in the southeast coal region of British Columbia. Those are just two short condensed case histories of the impact of mine closures.

We in our party have quite a comprehensive policy on how to deal with some of these matters. It's public knowledge. I'm not going to go through the whole thing here. It's no secret that part of our party policy is quite idealistic, and perhaps not totally realistic. As a result, it is my hope — our

[ Page 6522 ]

leader has announced this — that our resource committee will be travelling the province and talking with the people in the industry, as I do here in Victoria quite frequently. In fact, I have had the opportunity of visiting some mines, closed and open, here in British Columbia over the past several months.

However, one of the prime planks in our policy is this: we believe that there must be greater communication between mining companies, workers, the local community and the government. Each of the groups to be affected must be provided with adequate notification of mine layoffs or mine expansion, and there must be greater community participation in these economic decisions which affect their lives. In other words, we believe that the companies and the government have a responsibility to the people in those communities and to the people of British Columbia.

Legislation dealing with this type of proposal already exists in a number of other countries around the world. For example, in Germany, France and Sweden a review board is established. A company has to file adequate notice of layoffs and has to disclose the financial position which necessitates such action. Through community work or in government participation on the review board, the proposed closure is assessed and alternatives developed.

[11:30]

As I said before, Mr. Chairman, I was in a situation — it happened in my riding — in 1976: a major mine closure overnight and several hundred people thrown out. Many of the people there chose early retirement and are still there. As a matter of fact, it was very interesting when I visited Newmont Mines near Princeton less than two months ago. The company and the union had arranged a tour. The company, I might add, were very gracious hosts. I was very interested in the technological changes that have taken place, particularly on the milling side, since I had been associated with mining in my own riding. I was, frankly, very impressed and quite shocked. But technological change does mean fewer employees and more sophisticated types of equipment — which brings me to another point.

At that particular operation, Mr. Chairman — in examining the operations of this very sophisticated and improved equipment, and technological change — with the people who were hosting and guiding this tour with me, one of the remarks they made really shocked me. The sophisticated equipment is not constructed here — very little here in Canada or British Columbia. They buy their equipment from elsewhere: a lot from West Germany, some from Japan. I would like to know why we are not encouraging the development and construction of a secondary industry here to supply our operations with that type of equipment. But more than that, why should we not be producing this type of equipment and selling it around the world if we can?

Little Australia has about half the population of Canada. One very sophisticated type of machine doing a specific job at that particular mine was manufactured in Australia, of all places. It could easily be produced here in British Columbia, but they had to go all the way to Australia to get this particular piece of equipment.

I only have about two minutes left on this segment, so I just want to get this in very quickly. Dealing with the minister's estimates as I go through the estimate book, total expenditure for the ministry is increasing from $23.6 million in 1984-85 to $25.9 million in 1985-86. Where is the $2 million increase occurring, very quickly? The petroleum resources division will see an increase in expenditure on professional services of $1.704 million. What are they doing? Are you hiring consultants with that extra million? That's a very large increase. What studies are they doing? The energy resource division will see grants and contributions which it spends increased from $1,000 in 1984 to $1,350,000 in 1985-86. The sum has increased by 1.349 times. What is it doing with these grants and contributions? What's that money for? What's it going to be used for? Is it connected with the Vancouver Island gas line? I simply don't know.

I see my time is up, so I'll give the minister a chance to respond.

[Mr. Ree in the chair.]

HON. MR. ROGERS: It may take me a minute just to get the answers to your last two questions, but perhaps I can discuss the VI gas situation — getting back to that for a minute. Even if the gas pipeline had been built prior to the Cheekye-Dunsmuir powerline, there would still have been a requirement for further electrical circuits. So a circuit had to be built in any event, and in the longer term gas is so much cheaper than electricity and so much more competitive that I still see the need for gas to come to the Island very urgently.

We have had continual exploration for gas on the Island. Right now there's some seismic work being done mid-Island, gas and oil exploration. If they are successful in finding one or two wells, or maybe even ten wells, they will be very much.... They won't actually do anything with that gas until such time as gas comes to the Island. You need to have a fairly substantial field before you can convince people to put in a scrubbing plant and a distribution system. You might have one single type customer that would be prepared to take the risk in the field, but if you recall in 1974, I guess, when the Beaver River field in the extreme north of British Columbia watered in, we lost those sales to Alberta. Alberta was able to pick up that volume. That's fine if you're on the mainland and there are alternatives of people that can supply you with gas, but if this is your single source, you'd want to have a very good field. There have always been optimists drilling for oil and gas. I don't like to comment on what the technical side of the people may think about whether or not it'll work, but I wish them all the luck in the world. If they're successful in finding oil and gas on the Island, they will actually need a pipeline here just to be able to substantiate their particular operations.

You talked about mining. I guess we've talked about this every year in my estimates, and we go back to whether Leo Nimsick was really all that good at encouraging people to develop mines, or whether government policy affected it. That really is an old argument. I don't think that, since it involves the current expenditure of my estimates.... You made your statement; you've heard mine before.

But you also said something interesting. You mentioned that the copper mines in British Columbia had a difficult time because the price of copper dropped from $1.20 to 45 cents. If you take inflation, copper is selling for less than that today. That's the big nub of the problem. We have probably excess capacity worldwide in copper right now, although inventories are very low. That's the thing that the mining industry finds promising, but we must look at it not from the point of view of the U.S. dollar and the Canadian dollar. The Canadian dollar is very weak vis-a-vis the American dollar, but the American dollar is so much stronger than the Chilean peso or just about any other currency that the trading companies are involved

[ Page 6523 ]

in. We have copper coming out of Chile, Zaire, Zambia and other places. They're delighted with the price. They are thrilled with this kind of price, because their currency has been devalued 200 or 300 hundred percent and that presents us with a problem.

So we still have a difficulty. You know, in the United States the situation is much worse. Their copper producers are virtually all shut down because of the strength of the American dollar and the cost of energy, and the two of those things are there. It's interesting that the energy prices that were offered to the Arizona producers.... They were offered an 80 percent discount on electricity, but the terms of reference are that it's immediately interruptible, and they'll give you 20 percent if you want a half-hour. Well, if you've been through Newmont, then you have some idea of trying to operate any kind of milling operation with immediate interruption in electrical supplies. You're not going to last for very long at all.

World prices of gold have also fallen very substantially. Asbestos continues to give me a problem in this respect. The finest asbestos in the world is actually mined in Cassiar, because of the length of the fibre. The major Canadian contribution to the satellite program and the space shuttle is not the Spar Aerospace arm; it's the asbestos from Cassiar. But because it's mined in British Columbia, not produced in Toronto, we don't have a flag on it and it's not featured on every television series. There's no question that asbestos is a great product, but the trouble is, we only produce a certain percentage of long-fibre asbestos. The other stuff is medium- and short-fibre, and while almost all the wine in the world is filtered through asbestos filters and almost all the water we drink comes through asbestos pipes, there is a genuine scare because of asbestosis. Therefore the demand for the product has gone down. The Johns-Manville Corp. and what I consider to be some T. Boone Pickens way of getting around their corporate liability — and it's now affected Lloyd's of London — have scared a lot of people away from using asbestos. It's still the only effective way that we know to stop vehicles that are moving. It's still going to be used in brake pads and all sorts of things. People don't recognize the fact that it's around them every day, in and around everything they use. Still we have that problem.

The Highmont mine. I talked about the price of copper. It did have a very serious impact on Logan Lake. When the company attracted miners there in the first place, they offered them fairly substantial discounts in terms of.... The company guaranteed to buy their housing. Why is Highmont not operating and some of the other mines operating? Some of them have much easier rock to work in. The grades tend to be about the same, although some of them have more moly in them than the others, but the Valley Copper mine has a much easier rock to crush, and it requires a lot less energy to crush it.

Also, some of the companies did a better job of contracting. Some of these companies were able to tie up long-term contracts, and while the spot copper price on the LME may be 58 to 66 cents, some of this copper is being sold at much higher prices than that. In fact, the Lornex mine shipped its one-hundredth cargo of copper concentrate about six weeks ago from North Vancouver to Japan, and I had the honour of representing the government and the ministry at that time.

In 1980 the Japanese steel production was forecast to be 150 million tonnes by 1985, and in fact by this year it will be around 110 million tonnes. The Japanese have asked all of their coal producers to cut back on their production. They have not singled out one company or another, but they have gone across the board in their cutbacks, and it's had an effect on all of the metallurgical coal producers around the world that supply the Japanese mines.

You mentioned the mining equipment. A lot of mining equipment is made in the province of British Columbia. Australia is a smaller country, but a much bigger mining-oriented country. It's probably for that reason.... Between their opal-mining and their uranium-mining and their copper-mining and their coal-mining, mining is to Australia if you discount agriculture just for the sake of our debate what forestry may be to British Columbia. Therefore there tends to be more focus there on it.

I would encourage British Columbia manufacturers where possible to either do joint ventures with or compete with.... But I should remind the member that we export British Columbia mining technology and equipment. We're successful in doing that, and if the Australians are more competitive than we are, then it's up to our manufacturers to get competitive.

We see some possibility of improvements in the molybdenum market, but again it depends on whether the steelmakers want to continue to use Russian vanadium, which is also being dumped into the market.

Since 1982 coal production in British Columbia has increased from 10.6 million tonnes to 23 million tonnes in 1985, in spite of cutbacks. That does reflect in some jobs.

I have the answer, I think, to your grants: $1,350,000 is provided to grants under the rural gasification program for the Sorrento–Blind Bay extension to the Inland system. That's the question for that one. There is an increase of $1,740,000 for the completion of the first-year maintenance costs of the Desan Lake petroleum road, which is the one I spoke of yesterday.

We see an increase in gas and oil.... In fact, one of the difficulties in this ministry is that we depend on really highly skilled people, and when the economy starts to pick up in coal- and gas-mining, I'm getting robbed by the federal government and by industry all the time for the bright people that are in our ministry. That's just a difficulty we face.

MR. LOCKSTEAD: Mr. Chairman, just a very brief question, because I know my colleague is just champing at the bit here. I do have a number of other issues to discuss with you under this portfolio. It is my understanding — and I forgot to mention this earlier in my presentation — that there's a possibility of six mines reopening because of the possible intervention of the commissioner of critical industries. I just want to remind the mining industry and the minister that one of the reasons cited by some of these companies which have closed mines here in British Columbia is that since 1981, I believe — perhaps 1982, but certainly since 1981 — this government has increased the water tax by over 1,000 percent. That also affected other industries. I do have the figures, by the way, for what is paid by one of the major companies in my riding, MacMillan Bloedel, in the same regard; but that's another story.

[11:45]

I see now that under proposed legislation — maybe passed by now, for all I know — the government has the ability to decrease the water tax licence and also to cut Hydro rates for new mines. If that means that these four to six mines

[ Page 6524 ]

can possibly reopen and create jobs in British Columbia, fair enough. But I will vigorously oppose giving these people those breaks if the breaks do not translate into jobs for people here in British Columbia. On the other hand, I could support, for a period of time, a break in water tax licences and Hydro rates for these operations if it means they can reopen. But I would hope that they give a good accounting of their costs if they do reopen and hire these employees. I don't want to see those tax breaks....

MR. CHAIRMAN: Order, please.

MR. LOCKSTEAD: Wait a minute, I'm talking on a very.... Go ahead.

MR. CHAIRMAN: The debate might be more relevant dealing with a piece of legislation that is before the House, rather than within the administrative....

MR. LOCKSTEAD: This legislation has been passed, Mr. Chairman. You were here. The legislation has been passed and given royal assent. I'm discussing a philosophy of mines reopening and jobs for people in this province. You must understand that, Mr. Chairman. So if I may continue uninterrupted....

MR. CHAIRMAN: Order, please, Mr. Member. We have a bill dealing with electrical discounts, and if that is the subject matter of your comments....

MR. LOCKSTEAD: No, it's not the subject matter at all. We're talking about mines opening.

MR. CHAIRMAN: Would the member continue on the administrative aspects of the minister's estimates.

MR. LOCKSTEAD: Well, I was just about completed before I was interrupted, Mr. Chairman.

Interjections.

MR. LOCKSTEAD: I resent it when my line of debate is broken up over a matter which is not an issue before this House at the present time. We were discussing....

MR. CHAIRMAN: Order, please. Would the member continue with vote 22.

MR. LOCKSTEAD: That's exactly what we're dealing with, Mr. Chairman.

In any event, the crux of my statement here is that I could personally support these types of tax breaks, but I would like to see full accountability. I'm saying that I don't want to see these tax breaks and that cash flow, the profits that may be made by these companies, going back across the line or to some foreign country. I want to see that money reinvested here in British Columbia to create jobs in British Columbia.

HON. MR. ROGERS: I think I can give the member that assurance, because that's the terms of reference under which the commissioner of critical industries is operating. I'm told that there are three candidates for reopening for sure, and maybe more. What's important is that you don't assist one mine to open up only to shut another one down. We're competing in the world market, so that's not likely to happen. I don't believe that the employed of one community have any regrets about somebody else being able to get some employment. But there are at least three that I know of, partly because of increases in the prices of metal, and there is going to be full disclosure made on that to the commissioner of critical industries. That legislation has been passed, so you know the terms of reference under which that's available. In each case the mining companies have come to my office to discuss it with me to see what we can do about it. We're not prepared to take a second look at the environmental requirements, but at just about everything else that we can. Other than safety and environment we're trying to assist them in any way we can.

MR. D'ARCY: Before I get into my remarks, which largely look at fuel prices and energy, I have to refer briefly to something the minister just said about how we're not in the business of helping some mines to open up so that others can close down. I hope you've learned your lesson from northeast coal, Mr. Minister. My gosh, in the southeastern part of the province Westar Coal alone, which is a BCRIC company, is at only about 60 percent of its former production and employment levels since the advent of northeast coal. So it's very interesting that you would say.... I would agree with you. I hope that's not what we get into, because the province of B.C. is on the hook for large amounts of borrowed money so that some mines could open up and others shut down or reduce their operations.

In any event, I want to discuss the price of energy, especially for those of us who live in the interior. I hope some of those caterwaulers on your side of the House, Mr. Minister, who don't have the intestinal fortitude to get up and defend you and the energy estimates, will do so, especially those from the interior and the north. I want to talk about the effect of some of the things that you're intending to do, through the Govier report and the price of natural gas, to those who live in the interior and the north. I want to emphasize that I'm speaking of the Govier report, because that has been tabled in the House for some time. That report calls for an increase in the price of natural gas to British Columbia consumers who really depend on it, especially if they live in the interior or the north, of over 50 percent in constant dollars and over 80 percent in actual dollars between now and 1990. It's true that the minister may decide to back off on that a bit, but the proposal in the Govier report calls for that. I have yet to hear a single Social Credit member from the interior or the north get up and defend their constituents in that regard. I hope to hear that, because we not only have a lot of consumers there, but we also have a lot of businesses and industries that really depend for their viability on natural gas and natural gas pricing.

After all, the price has increased over the last three years but not significantly — 13 to 14 percent, which is roughly in keeping with inflation. It has certainly increased less than the price of electricity from B.C. Hydro, and it has probably increased less than the price of motive fuels, particularly when one takes into account the regressive taxation which this government and the federal government put on our motive fuels.

The minister says that one of the things he wants to do through the Govier royalty system and through the federal-provincial deregulation agreement, which he was party to, is stimulate drilling activity. It's kind of interesting that most

[ Page 6525 ]

grade 8 economics students can tell you that if you want to sell more jelly beans, the thing to do is not necessarily increase the price. The minister wants to stimulate drilling activity by finding new export and domestic markets for natural gas. Yet he tells us that at the same time, in the face of a recession, he wants to put the price up. I have long said, and so have many other people inside and outside this House, that we should be using our abundant and developed energy resources, particularly those which make us unique — electricity and natural gas — as a lever to give us the competitive edge against the prairie provinces and against our competitors to the south and in other Pacific Rim countries. I know the Minister of Finance (Hon. Mr. Curtis) likes to talk about how our gasoline prices aren't as high as they are in Prince Edward Island or Newfoundland. I don't think too many of our businesses compete with businesses in Prince Edward Island or Newfoundland, but we sure as heck have to compete with competing industries and businesses in the Prairies, in the northwestern states and in the Pacific Rim countries, including Australia and New Zealand. We should be using our resources in that regard and not simply as milch cows to provide revenue for the provincial government.

The minister has been prepared to make cut-rate deals for people who use natural gas as feedstock. One of them is Ocelot in Kitimat. Another one is one of my constituents — Cominco has a natural gas marketing deal. I suppose, as far as it goes, these things are all right. What concerns me is that we're going to move into what I call the northeast coal marketing syndrome, which has cost this province so dear. We're getting into a situation in which the minister and the government are really gung ho to get a massive liquefied natural gas export plant going somewhere in the province of B.C., whether it be on the lower mainland, the north coast or Vancouver Island, or wherever. We'll get into exactly the same marketing morass as we've had with northeast coal, where investors from British Columbia, whether they be public or private — it doesn't matter — will be on the hook for the money. That capital, once it's there, will be captive. You can't dismantle it and move it somewhere else.

The investors from British Columbia will be on the hook, but the Japanese will dictate the volumes and the price. It's all very well for people from the industry and the minister to say, "Oh, we'll get the world price," but we all know what the world price is if you live on the Pacific Rim. The world price for liquefied natural gas is the Japanese price, because they are the only significant buyers. The Japanese price, what they are prepared to pay, is just as it is for coal. The price they are prepared to pay is the lowest price they can get by having a multiplicity of suppliers. They will get as many as they can. They will establish them in Borneo, Mexico, Venezuela, in British Columbia and the western States — wherever they can. They want a multiplicity of sellers. They are the only buyers, and everybody else puts up the money. We're on contract to provide up to certain volumes — if they take it — the same way we are with northeast coal; but they have no requirement to take minimum volumes, nor is there any minimum price.

That concerns me, if we're going to go in that direction. It really does concern me, and from the press releases and discussion, I am concerned that that's exactly what is going to happen to this incredibly valuable natural resource that we have uniquely in British Columbia because we are on the Pacific Rim. We have lots of it; it's developed now. There are many more supplies of natural gas which I feel are going to be discovered, and we should be using it, as I said, as a lever to rejoin Canada and rejoin the world in economic growth. We've been bypassed as everyone else recovers from the recession, and in some parts of our economy are still in a state of decline.

There are many people from the ministry, sober minds, who say our best bet, if we want to have a real solid long-term export of natural gas, is the California market, exactly the same thing as we were discussing yesterday in legislation, which I won't refer to, regarding Hydro electric sales. That is our biggest nearby market, and it's the market that there really is some free enterprise in, because there is more than one buyer and also a significant growth.

Going back to natural gas pricing in British Columbia, Mr. Chairman, if the price goes up, as Mr. Govier wanted it to go up, we do, as Michael Wilson has done, take an incredible amount of money out of the B.C. retail economy. We make it more expensive to do business in British Columbia. We make it more expensive to run pulp mills, to run forest industry operations. We simply make it more expensive to run large businesses, small businesses, commercial businesses, and we make it more expensive for people to live here. That means they have less money to spend on goods and services produced in British Columbia, less money to save and less money to invest in some hopeful expansion of the economy that might take place in British Columbia if this government ever comes to its senses or if they're ever tossed out of office.

Mr. Chairman, I don't want to dwell too long on that subject, but I do want to reiterate that we must use our plentiful resources in some way to get our economy restructured and going again. I want to talk also briefly about British Columbia Hydro. B.C. Hydro is not only one of the largest corporations in B.C.; it's one of the largest corporations in Canada, certainly one of the largest utilities.

Mr. Chairman, I discussed yesterday how Hydro revenue, largely taken out of the British Columbia economy, had to go up last year by $340 million, or 22 percent, simply to meet the interest requirements that largely came into effect due to the capital expenditures on Revelstoke Dam and Cheekye-Dunsmuir hitting Hydro as an ongoing cost all of a sudden. No doubt that had a repressive effect on recovery in British Columbia.

But I want to talk about the actual operations of B.C. Hydro for just a moment. I have taken pride in the B.C. Hydro system, as I think most members of the House have here. It has been in the past, and I suppose technically may be, if not one of the best, perhaps even the best system in the entire world. It's the most modern in terms of generating facilities, the most modern in terms of switching facilities, the most modern in terms of forecasting and handling the incredibly complex runoff situation which you have in different rivers and different reservoirs throughout the province because of the strange weather patterns we have in B.C., and also one of the best and most modern distribution systems anywhere in the world, particularly when you consider the crazy weather and terrain that we have in British Columbia, and topography as well — rivers, straits and so forth.

[12:00]

[Mr. Strachan in the chair.]

But you know, internally, going back to last summer, initially Hydro had an outside consultant, an outside businessman, have a look at what was happening to their ability to guarantee a safe natural gas product to their retail customers

[ Page 6526 ]

on the lower mainland, and I suppose to a lesser extent here in Victoria.

They put some red lights on. They sent up some alarm bells at that time. I raised this in question period a month and a half ago — you weren't here, Mr. Minister — to your understudy from Surrey. While she said in the same breath that she was delighted to have been asked a question, she also took it as notice without stopping for a pause. Evidently she's not had the opportunity in the intervening six weeks to talk to you. But in any event, that report at that time was very critical not only of the reductions which had taken place in the numbers of maintenance personnel in the natural gas system but also of the intention of B.C. Hydro to make further reductions.

I'll quote just very briefly; I don't want to read the whole report. I'm sure the minister has it anyway. It said: "Further reductions in personnel may be viewed as the deliberate withholding of certain vital services, which may have serious ultimate consequences for public safety. Natural gas is classified as a hazardous commodity, and in today's society, too lean an operating corps would not be acceptable and might be perceived as negligent." Since this private sector report was made, there have been some 50 more employees cashiered from the gas division of B.C. Hydro.

Similarly, Mr. Chairman, in January of this year, internally once again, Hydro looked at the electrical distribution system, and they noted the fact that there had been very large cuts in maintenance and personnel due to economic restraint, which this government has not only imposed on itself but also on Crown corporations. I have no statistical evidence that there has been an increase in the frequency or length of outages throughout the system. I hope there hasn't been. There may have, but this internal document this spring says in conclusion, referring to the economic restraint measures imposed on them by the government here in Victoria: "As a result, electrical operations will be required to serve loads with reduced reliability, increased probability of temporary overload during peak periods and increased risk of equipment failure. These deferrals result in increased expenditures toward the end of the period to restore reliability standards as restraint objectives are eased."

What that really says is that not only is it going to reduce the reliability of the system, and hence the confidence that business and consumers have in the system, but it also isn't really going to save much money, Mr. Chairman. Ultimately there's going to be increased expenditures over what would have had to be done, had things been kept up, as the utility has done so well over its 20-odd year history.

So I raise these points publicly with the minister and ask that he use his influence — I think you are one of the directors of Hydro — to make sure that the hydro electric distribution and operating system and the natural gas distribution system not only be safe and reliable for the public but also that it be the kind of system that all of us in British Columbia can have confidence in seeing maintained, considering the $8 billion investment which we all have in that system.

HON. MR. ROGERS: Mr. Chairman, let's talk about the price of gas for a little bit. The sale of natural gas has always been, until last year, subsidized in British Columbia by the revenue from export sales. It was selling as low as 33 percent of the price of oil at one time. With the present marketing situation we have, gas is around 42 percent to 43 percent of the price of oil, depending on where the price of oil happens to be, because it does fluctuate. Gas sells at about 30 percent of the equivalent of the price of electricity. That's the situation we find ourselves in.

In the last year there were 40 wells drilled in British Columbia by gas producers. That's not sufficient for our purposes in terms of even proving up the gas we need to replace. We maintain a 25-year reservoir of gas, as opposed to a seven-year reservoir which is maintained by most of the American states, and we also maintain it to a much higher standard than they do because they had deliverability problems last Christmas when it was extremely cold.

I'd like to see the price of gas get up so that the gas producers find it attractive to drill in British Columbia. That doesn't mean that we have to take the price of gas up to outrageous levels, but gas should not be a subsidized product in this province for anybody. I don't think we have to have anything like the kinds of returns that they receive in others parts of the world, but even if we went to 65 percent of the price of oil, producers would be receiving less in British Columbia than they are in Alberta. It costs more to drill here, and we give them less return here. It's a competitive world. We have to expect people to come and invest their money in the oil and gas sector, and you're not going to get that if it's not an attractive place to invest in Canada.

So that's one of the reasons why we want to look at increasing the price of gas. As the oil price collapses, maybe that 65 percent target won't be there, but the gap between the price of gas and the price of oil and the price of electricity will always be very substantial. There's just no question in my mind about that.

I want to talk to you a little bit about the LNG project. The LNG project would see $2 billion worth of investment in this province, 80 percent of it by the Japanese. So they have, if they were to make this investment — if we were to go ahead — 80 percent of the money sunk as capital, the very capital you refer to as sunk in the ground in British Columbia. They're not going to walk away from that investment any more than you would walk away from an 80 percent investment.

There are other countries that are interested in buying our LNG. I have been approached by people from the Republic of China — I should correct that; the Republic of China, not the People's Republic of China; in other words, Taiwan — and South Korea, both of which have asked about the possibilities of buying LNG from this project. That's a commercial transaction which must take place between Canada LNG Corp. and the various buyers, and there are some political difficulties with doing that because of their own internal problems, but nonetheless, the LNG project will not go ahead unless Mobil Oil, Westcoast Transmission, Petro-Canada and the others can successfully negotiate a 100 percent take-or-pay contract with the Japanese on this gas, and they're convinced that the price is right and that they can do it. Under our gas marketing situation, they become eligible buyers and they pay a royalty to the Crown, but, you know, it will be the gas producers that decide whether or not they want to commit their gas. You're quite right: some of the producers don't think the LNG project is a good thing. They'd like to sell their gas to California for EOR — enhanced oil recovery — and that may very well be the case. If the proponents of the gas project aren't able to contract enough gas in British Columbia.... We're only allowing them 50 percent of the gas anyway. If they're not able to either produce it themselves.... After all, Petro-Canada is the largest producer

[ Page 6527 ]

of gas in the province, in any event. If they're unable to do that, they've got themselves a real problem. They've got to go out and convince the Chevrons and all of the other people that have gas in B.C. to sell gas to them at the kind of price they need to make this thing work.

Chevron, for example, is a very firm believer that gas should be used for enhanced oil recovery in California; in other words, used for making steam for reinjecting into the wells in that state. And that may very well be the case. But I can't look at the possibility of not trying to encourage $2 billion worth of construction in this province, if that's a possibility.

I'm told that we will know within 60 days. We've put all sorts of time lines on this project. This thing was supposed to have died last November. It was extended till January 31; then the Japanese froze the clock, and they said it was still 1984 in terms of this project. Now the thing is back on track. We will know whether it's a go or a no-go. The negotiations go on. I get a bi-weekly briefing from the proponents as to where the thing is going. Alberta has issued an energy-removal certificate. They are prepared to commit 50 percent of the gas. The majority of the benefits of this project revert to British Columbia; that's where the construction will take place.

I can understand your philosophical differences with us on this particular issue, but I don't think you have to have the concern you enunciate. The LNG project would require 200 new wells to be drilled in B.C. every year; that's quite intensive in terms of job creation, as far as I'm concerned.

B.C. Hydro, I believe, is the fourth-largest company in Canada. It's the largest company west of Toronto. You're right: with the rolling in of the Cheekye-Dunsmuir line and the Revelstoke line from being part of their construction project, they could no longer capitalize expenses; they had to be put into their cost base. Hydro had to adjust for that in their accounting procedures.

I share your remarks about the system engineering and the construction, and the way Hydro is run. I'm not so sure that we're necessarily the first in the world, and I'm not so sure that we want to be, because as technology changes, if we always had to have the latest gadget, we'd have even more expenses. There have been some changes at Hydro, as we have gone from being an operating company and a construction company to more of just an operating company, certainly for the time being, because we don't see any major new projects on the drawing board right now.

I want to tell you that you asked the question of my parliamentary secretary; I took the question as notice. Two days later, I believe, I asked leave to file the answer in the House, because it was a rather technical answer, and that answer has been filed in the House. You may find it in Orders of the Day or in the proper documentation where the questions are. We did communicate right away. In fact, that question was there. I think it's just probably an oversight.

I don't think there's a problem with system reliability. I don't think I've had a single complaint about system reliability or the distribution system. I can tell you right now: that's not the area that the executives of Hydro are looking at in terms of where we have difficulties with the company. Where we have difficulties with the company is at the top end — probably a few too many officers and not enough enlisted men. That's what's being looked at.

You made some complimentary remarks about the forecasting department. The forecasting department, in terms of how we handle our entire water distribution system, is recognized worldwide. In fact, the shortage of rain in the Bonneville administration's water area in the last two weeks and the fact that they are required, under some new federal legislation in the States, to give priority to flooding, fisheries, agriculture and power generation.... From a water management point of view, that is a conundrum that just creates all sorts of nightmares for them, and that's why we've been able to actually benefit in terms of some export sales. I think that answers the questions you brought up. You'll have more, undoubtedly.

MRS. JOHNSTON: May I ask leave to make an introduction?

Leave granted.

MRS. JOHNSTON: We have some very special visitors in the House with us today. I would ask the members to please welcome Mrs. Bradley, Mrs. Witty and the No. 24 Surrey Girl Guides company visiting us from Surrey.

MR. D'ARCY: I'd like to advise the minister and the House that he mentioned that we have some philosophical differences. In the matters we're discussing here, the only philosophical differences we have between he and his government are the differences between doing good and responsible business on behalf of the people of B.C. and doing bad and irresponsible business on behalf of the people of B.C. But the concerns we have about the LNG project are not the glowing projections that the minister gives us, because we heard those same glowing projections about northeast coal; we want some solid facts. If what the minister says is all correct or comes to be true, more power to him; that would be wonderful. My concern is that we're going to go the other way, because I think we're dealing with some pretty smart bargainers when we get into international energy deals. We have not been well served, and not only by negotiators on behalf of governments; we have not been well served by negotiators on behalf of big business, either. They've been taken to the cleaners as well on some of these deals.

[12:15]

It's all very well to say, as government people do: "Oh well, it's their money. Let them throw it away." The problem is that large corporations have a way of recouping losses from Joe Blow and Jane Doe when they lose money. Just look at the banks. When they give bad loans to Venezuela, or wherever the heck they do, they get it out of the small businessman and the small borrower. So it's not their money to throw away. As many people have said, it's not just governments who have no money of their own; corporations don't have any money of their own either. They only have shareholders' money and customers' money. They get up what they lose one way or another.

In any event, let's talk about investment in British Columbia that might be forthcoming. I'm talking about the federal-provincial energy agreement. It would have been nice if we had seen some reduction in prices of natural gas or motive fuels because of this. We did see a — what was it? — 0.6 cent or 0.7 cent reduction recently. But that was because the feds removed one of their taxes, and the province didn't move fast enough to grab that money for themselves. They didn't amend the legislation fast enough. That's probably the only reason we saw a reduction in motive fuel prices. We know

[ Page 6528 ]

that when the feds backed off from one of their natural gas taxes, my good friend over there, the minister, moved in immediately to get that money. There was no reduction to the people of B.C. when Ottawa quit collecting that ridiculous tax. We just had another ridiculous tax added on in British Columbia.

So what's going to happen out of this agreement? It's kind of like Michael Wilson's budget: it's kind of an a-wing-and-a-prayer thing. It's trickle-down personified. I hope I'm not being too crude here, but many people have talked about the trickle-down idea as being, well, if you give the elephant enough peanuts maybe a few will make it through undigested. In any event, what have we got here about estimates? These aren't our estimates or political estimates; these are private sector estimates of what that agreement is going to mean, in 1985 alone, to the four major oil companies in Canada. The four major oil companies in Canada happen to be Gulf, Imperial, Shell and Texaco; nobody should be surprised at that, I don't think. They're going to make an additional after-tax revenue of $230 million out of the agreement. That's not gross revenue; that's after-tax revenue of $230 million — after all provincial and federal taxes. It would be wonderful if they invested that in Canada, and a large amount in British Columbia. But we don't know that it's going to be invested in Canada, or even if any of it is, and we don't know how much is going to be invested in British Columbia.

Now Canadian oil companies — their four largest ones are going to make about half that much extra. I'm willing to bet that most if not all of that extra $120 million is going to be invested in B.C. One of the reasons for that is not just that they're Canadian companies, but, as I'm sure the minister knows, Canadian oil companies are the people who are developing, lately, most of the new oil. The foreign multinationals are the companies who have control of most of the old oil. When you can pump that up with deregulation every time you operate your pump, it's a licence to print money, as the figures I gave you have shown. But the Canadian people don't have too much old oil. They have new oil, and they turn their money around pretty fast. They take risks. I hope that the foreign companies join them, quite frankly. But history hasn't shown that.

In any event, I guess we could talk at great length about what the future might hold, or what certain things might happen hypothetically, Mr. Chairman. I'm just standing here expressing my concerns that the benefits to western Canada, and to British Columbia in particular, may not be nearly as wonderful as the federal minister and our provincial ministers say they're going to be. My overriding concern is that none of these changes as yet have resulted in a decrease in prices. They may at some point. At least there have not been increases in prices, but I'm sure the minister knows that ever since the provinces and Ottawa got into the business of periodically coming up with energy agreements, while most of the public have never really fully understood the implications of those agreements, there is one thing that everybody understood and that is that every time an agreement was announced, immediately, if not sooner, the price went up at the gas pump. The price of natural gas piped into peoples' homes went up too.

If there's one thing wrong with the way we do business in British Columbia, it's that we pay too much for our motive fuels, we pay too much for our natural gas, and we pay too much for our electricity. I don't hear the minister saying there's anything wrong with the 13 percent sales tax on gravity that people pay when they pay their hydro bills. I don't hear any of the people on his side of the House saying that the people in their riding shouldn't be paying that because it's a disincentive to modernization, to expansion of industry and to commercial operations, and indeed takes a good deal of revenue out of the retail economy of British Columbia.

So we have not talked a great deal about the actual effect in this House of that federal-provincial agreement, and I am interested to hear the minister's feeling on it. I know he was quite enthusiastic, and probably still is, about that agreement when it took place. But our primary concern on this side of the House is not only that there be increased activity in the exploration and production of natural gas and hopefully petroleum in the province of B.C. but, most importantly, that the price to the consumer will cease to go up and hopefully come down.

MR. DAVIS: Briefly, Mr. Chairman, a subject which is rarely raised in this House: the number-crunchers in Ottawa concerning themselves with the redistribution of income across Canada have been looking increasingly at resource benefits — the benefit or value to the people of the province of a given resource, let's say an energy resource, as opposed to the cost as expressed in rates. In British Columbia, the principal energy area in which there is a benefit over cost is hydro. If we had to use an alternate source or series of sources to generate our electricity, the power would undoubtedly cost us more. If we had to use money and use the financing which you and I, Mr. Chairman, normally encounter, as opposed to private financing and tax avoidance by some of our publicly owned utilities, the costs, the rates and the prices would be higher.

Now we're somewhat familiar with the concern that Ottawa expressed about the revenues that Alberta obtained as a result of the oil boom of the seventies. Their difficulty in trying to translate this into a benefit which they could then spread across Canada diminished the net income to Alberta and increased the net income of all other provinces. Nowadays there seems to be an increasing interest in all resources — an evaluation by federal economists as to what the alternate cost would be in each province of providing sources of energy in equal amounts and assessing therefore what the net benefit to the citizens of the province is.

In other words, if they have unique resources, they have a unique benefit, and that unique benefit should be credited to them. Therefore they're better off than they allege, and therefore the money they receive from Ottawa in redistribution or equalization grants — whatever — is reduced. I trust that in the Energy ministry someone is looking at these numbers that several federal departments, and particularly the federal department of finance, have been publishing in this regard. They've certainly commissioned studies. The Economic Council of Canada has commissioned studies; even the Science Council of Canada has. I feel uncomfortable about their conclusions. They say, for example, that British Columbia is enjoying a substantial net benefit — hundreds of millions of dollars net benefit — as a result of its hydro. The alternatives would have cost more and therefore British Columbia is richer; therefore British Columbia doesn't want the same redistribution of wealth across the country as it might otherwise want if you ignored the resource development area, particularly energy.

[ Page 6529 ]

I merely raise this subject because it is, I think, a matter of concern. It has to be a matter of concern to the Minister of Finance when he's entering into negotiations for the next round, the next five-year revenue transfer agreements between Ottawa and the provinces. I think the ministry ideally equipped to do this kind of analysis and to counter federal claims, at least in terms of guesstimates, is the Ministry of Energy, Mines and Petroleum Resources. Mine is merely a comment and a recommendation, but I think it's important if we look ahead a few years.

HON. MR. ROGERS: I thank the member for North Vancouver–Seymour for those remarks, and I will look into that. I think perhaps it's something that should be done jointly between this ministry and the Ministry of Finance, rather than just this ministry. I would have difficulty quantifying those kinds of values, and I think anybody given that challenge would have that possibility.

The question you raised was answered on May 16. That's the question that was put on the order paper. I just bring up that point.

We talk about LNG. The number one LNG producer in the world is Indonesia, and the operator of the field in Indonesia is Mobil Oil. They're the number one suppliers to the Japanese. It is the most profitable division of Mobil Oil. I have to assume that they're not stupid when it comes to doing international trading. I don't believe that Petro-Canada doesn't have in its arsenal pretty intelligent people when it comes to doing business with the Japanese. From the Japanese point of view, it's quite clear: they're in the position of having at any one time a total of about seven or eight days' worth of fuel in the country — that's all they've got — so they're going to make the effort to diversify to many different sources around the world.

We have to make the decision whether — this has to be a commercial decision — that's the best use of the gas or whether the best use of the gas is to hold it, to have it go south of the border. That's up to the producers of the gas to make that decision. I think it's a good thing to have more than one customer for British Columbia. We could have increased activity in the United States, more discoveries in the United States. The gas bubble in the United States has turned out to be a bit of a sausage. It never seems to go away. There were more wells drilled last year. They've proven up all the gas that they used last year and then some. People come to see me and tell me the New Mexico fields are about to fail, and we're going to pick up all of El Paso's business. But El Paso doesn't tell me that, and others don't tell me that.

PG&E, which is the world's largest utility, buys a lot of gas from Canada and would like to buy more, would like to contract more. I can see both of those markets coming into effect, but the producers have to be approached by those two people as well and decide which way to go.

The western accord does away with the petroleum gas royalty tax and a number of other taxes. I guess if you want to see whether it has any benefit, you have to go to Fort St. John or Fort Nelson and see the rigs that are coming back from the United States, see the amount of effort that is going on. You're right that the Canadian companies — especially Canadian Hunter, probably the most aggressive of all.... Jim Gray is really optimistic now and is now prepared to go and get heavily into debt and start drilling for gas in British Columbia because he's convinced, as others are, that the Elmworth field, which stops right at the Alberta border.... All the drilling seems to be on the Alberta side of this basin, because it wasn't attractive to do it in B.C. He's now convinced it will be, with the changes we've made and the changes in the western accord. So we're going to see some very exciting developments taking place there — at least exciting from my perspective.

I was in Fort St. John when the oil boom was on in British Columbia before the national energy program was brought into place. I don't think that kind of boom is particularly healthy, but I've also been there several times since, and the result is even less healthy. It's just as devastating for that community as the results of collapsed mining ventures have been in single-industry towns. While Fort St. John is not a single-industry town, oil and gas certainly are a major part of it. You will see greater activity. I have written to every oil producer in the province asking them what this will mean in terms of their activity. I've been to Calgary and talked to most of the majors. Each one of them assures me that they will be having an expanded drilling program in British Columbia as a result of the western accord.

Miss Carney made it very clear when we signed this document that unless there was some activity, we collectively — and all of us, all the ministers involved, agreed with this — would see to making other changes in this accord, or to finding some other punitive action if in fact the industry didn't respond as they said they would. So far, every indication I have indicates they are responding and then some. In fact, as land sales go on and you receive the announcements of our land sales, you'll start to see increased interest in this particular area.

So I've written to every company. Each one of them has responded very positively to this. Each one of them has given me a rough outline of the kind of drilling they expect to do in B.C. I think it's a positive thing.

[12:30]

You talk about oil prices and petroleum prices. Remember that in Canada, under the national energy program of the previous government, we had shielded the Canadian consumer from world energy prices. We had pretended that somehow they didn't apply to Canada, and collected tax in one pocket which we used to subsidize gas in another one. It turned out to be a very expensive process. This year we have had the world oil price come down and the Canadian oil price come up to the point where the two meet, and in fact we've moved to world energy prices without having to go through a major upswing in the price of petroleum products. I think that's a healthy thing to do because Canada is not an isolated nation, and it's not a nation that's totally self-sufficient in oil and gas, and we might as well face that reality.

I might also tell you, of course, that some of the taxes that were imposed by the national energy program were to buy companies like Petro-Canada. I don't think it was a particularly good idea. I know you think it's a good idea, or your party does. Maybe yes, maybe no. I'll tell you one thing, when you visit their offices in Calgary you find out what opulence means, because they sure put all the big companies to shame — absolutely. There's nobody that dines as high on the hog as Petro-Canada does. I invite you, if you're in Calgary, to just go into the foyer. You don't even have to go upstairs. It gets worse when you go upstairs. Anyway, that's the reality of what we have. We now have a national oil company. They are the biggest gas-producers in the province of British Columbia. If we're successful with these negotiations with the Japanese, then they will be a major player in the

[ Page 6530 ]

LNG project. I think that their board of directors and their mandate given to them by the federal government means that they're responsible to Canadians just as well as they are to British Columbians — as we're all Canadians — and I wouldn't think that they're prepared to give away their reserves or make foolish decisions which would see the oil and gas which they've in most cases bought in British Columbia, rather than found, given away at rock bottom prices. I think that answers some of your questions.

MR. D'ARCY: Mr. Chairman, I don't want to pre-empt other members, but I just want to comment on what the minister has just said. I don't want to put words in his mouth, but certainly, as far as I'm concerned, the national energy program was a result of somebody in that Liberal government — rightfully turfed out of office — reading a couple of Decima reports and deciding they were going to stitch something together with haywire and bludgeon the industry in western Canada into some sort of submission. Whatever long-term benefit it had for Canada, I think that there were one or two, at least, short-term disbenefits.

Every politician, I suppose, when new activity takes place — and I welcome the new activity in British Columbia, particularly in the Peace River — wants to say that it's something that he did or something that we did, while blaming world conditions when things go wrong. The fact is, while no doubt the agreement has had some effect.... It has to have had if we talk about the kind of figures that I just mentioned. If a few crumbs don't come to us from that, something really is wrong. The fact remains that statistically, Mr. Chairman, there was a large increase in activity in western Canada and in British Columbia in 1984, even before the federal election — more increased activity after that — and there had been increased activity planned during 1985 before that agreement went into place. Maybe that's picky-picky, but the fact is that the activity is there, and we hope that it is sustained. We hope it's not a boom and bust thing, and we hope it brings results, both in terms of energy reserves to British Columbia and in long-term economic benefit to B.C., with a long-term spinoff effect and a multiplier effect on the rest of the economy.

[Mr. Ree in the chair.]

MRS. WALLACE: I want to talk about B.C. Hydro too, but in a slightly different vein. The other day, I think it was in question period, I asked the minister about the work being done by the research department of B.C. Hydro on the control or destruction of PCBs. The minister assured me that those people were still there and still working. I think it might be interesting to review just a little bit of what has been happening with that group as has been reported in Intercom, a little magazine that, as an ex-employee, I still receive. It's an internal paper of B.C. Hydro.

Four years ago, in 1981, three eminent scientists who were working for Hydro actually did make a breakthrough on the destruction of PCBs. Certainly, as it was reported in Intercom, that was the case. It was not heat processes necessarily; what they were saying was that the new process causes an alkali metal, such as sodium, to react with the chlorine in the PCB molecules to produce sodium chloride, or common salt. They had this perfected in 1981; they had a prototype. They were moving to a 20-litre conversion unit, and then they were going to go to a 200 conversion unit. As I say, it's four years ago that they were preparing to move to the 20-litre conversion unit, a unit that could be taken out and reprocessed — take the PCBs out of the oil, purify that oil, and recycle it.

Now when I asked the minister about this.... Of course, I was asking the question because it's a terrific concern that not only I but British Columbians generally are expressing relative to what has happened at the Kennedy substation at Mackenzie. I said 50 capacitors were leaking; now I understand that 300 capacitors have been leaking there over the years and causing this kind of pollution. I know the minister will tell me it's only so many litres or something like that, but as far as I know there have been no safe limits set at any time for PCBs. The minister and Hydro are talking about safe limits; the environmental people are talking about safe limits. I don't think safe limits have ever been established for PCBs, any more than for compounds like 2,4-D and 2,4,5-T. There are no safe limits.

So here we have this situation, and the question I had asked the minister was: with all the layoffs at Hydro, were these people still there? Were they still working? Was it still happening? He assured me that yes, they were. Well, he's one-third right, as I understand. Of the three people involved in this, two are gone; one left in 1983 and the other in 1984. Only one of those scientists is still there, and I'm wondering what sort of a budget he has. What sort of opportunity is he being given, and why are those other two gone? Why didn't we get on with this thing? Why didn't we have this perfected and get it up there? Far less costly prevention than the kind of situation.... You know, you hedged and you held back; you didn't take any action up there at Kennedy. You left those sitting there contrary to the orders. You didn't destroy the PCBs. You didn't put them under cover. You let them sit there on those pallets, leaking into the rivers.

What are you doing about this program that was such a breakthrough? It was a lead program all over North America, and of the three people who were involved and introduced the program, discovered it, worked on it, two are gone. Yet the minister stands up and says: "Oh, they're still there and it's still going on." Well, that's just not so. They're not still there — not the same people that were involved in the first instance.

Here we have a situation that is crucial. We don't know what the long-term effects will be. We don't know whether there are other areas like this. We don't know how much pollution got into soil before those capacitors were actually gathered into Kennedy substation. How much pollution got in at Hudson's Hope? Do we know? Have there ever been any tests taken? I understand that Hydro is very sensitive if anybody talks about testing water at Hudson's Hope. I've had contacts with a party there who had a contract with Hydro and had problems with the water that Hydro was supposed to be supplying to them and couldn't get anybody to test it. So they tested it, and Hydro almost panicked.

Now what they were testing for was something else entirely. What they found was that Hydro was supplying them potable water for their cafe that was actually loaded with antifreeze. That's the kind of thing that Hydro's up to. They signed a contract with these people to run a cafe there, and part of the contract was that they were to provide the water for the cafe. Well, they just hooked up to the heating system, and because of the temperature in that country, the heating system happened to have glycol in it to keep the water from freezing. They fed that in through the cafe; supposedly they were to

[ Page 6531 ]

make coffee for their customers with this water. You know, it's just ridiculous, but that's the kind of things that Hydro does. That minister says: "Oh, everything is fine. It's all under control. We're testing the PCBs. We're looking after it." Well, they're leaking, 15,000 of them stored outside there, 300 of them leaking into the streams. He says: "Oh, everything is fine. You know, it's just a little bit; it's just limited. It's not going to do any harm."

AN HON. MEMBER: Where do they put glycol in the coffee?

MRS. WALLACE: This was at Hudson's Hope.

I don't know what we do with this minister and what we do with Hydro. They seem to think they're a law unto themselves.

AN HON. MEMBER: I don't think he knows either.

MRS. WALLACE: Well, no, obviously he doesn't. So as a result he's doing nothing — just letting it drift, letting it go. He couldn't care less. He's got his nice office and his job and....

Interjections.

MR. CHAIRMAN: Order, please. The member for Cowichan-Malahat on vote 22 — and direct your comments through the Chair.

MRS. WALLACE: I would sure like to know how come you tell me they're still there when they're not, Mr. Minister. Where are you at with this thing? Obviously you're not ready to use it. Even with the strange economic philosophy of this government, that minister and that corporation, if they had something that could destroy PCBs perfected, I think they'd use it. I'm not sure, but it would seem to me they would. When you were this far along in 1981 — four years ago — why have you not put a little more money and effort into that thing, why don't you have it perfected and why aren't you using it?

HON. MR. ROGERS: First of all, I answered the question, Madam Member, about the staff, as a result of having been there only a week or ten days before and seeing several people. They may not have been the same people who had been working on this project, but several people there.... And if people have left and gone to other projects, I apologize to you if I misled you that way. When I was there, there were — and there still are — people working on this project.

It is important to point out that PCB in oil represents 1.5 percent of the PCBs that B.C. Hydro has. It's just PCB in oil that this sodium process destroys. It doesn't destroy the sodium that's in capacitors. It doesn't destroy the PCBs stored at Kennedy. It doesn't destroy the PCB that's in any kind of soaked material. We have an enormous amount of old transformer oil that's worth about 80 cents a gallon, but it's tainted with PCB, and this project will work to remove that. The project was developed by B.C. Hydro and Ontario Hydro. They are marketing it internationally, and they now have board approval to make a working portable project. But that will look after just 1.5 percent of the PCBs in the province. It doesn't work for the capacitors.

The other night CBC's "The National" did a program on how PCB in soaked contaminated material is being looked after in the United Kingdom. They found out that the destroying facility was really wanting, and that the things weren't in fact properly shredded. The best PCB work being done right now is being done by the Royal Military College in Kingston. That's for the destruction of PCB in soaked capacitors. It's based on shredding the material and then putting it through a high-heat plasma-arc furnace. This is not work being done by B.C. Hydro but everybody that has a PCB problem, and every single utility has this problem. It's not just PCBs that are out of service; it's PCBs that are in service. While Hydro has a lot, we only have one-third of the PCBs in the province, and the private sector also has PCBs.

I have my eye on the clock, Mr. Chairman, and I appreciate why you want to interrupt me.

Madam Member, I must point out to you that even if this pilot project available in Surrey had been there, it doesn't solve our problem at Kennedy, and we don't yet have an adequate facility for destroying this anywhere in the system.

[12:45]

I'm not prepared to make a commitment to ship this stuff to somewhere else unless I'm convinced, and I think the Ministry of Environment has to be convinced, that the thing can be destroyed in a proper, adequate, safe and approved manner. I think the project in Kingston probably has the best results. I just got a note that there were tests done yesterday on PCB results from water and sediments at Williston. They are under any standards.... There is no trace in any fish flesh in Williston Lake. There is, in the fish liver, less than 1.39 parts per million. The standard that is acceptable is 2 parts per million, and this is information I have from B.C. Hydro. I'd be able to give you that in written form if you like.

The House resumed; Mr. Strachan in the chair.

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

Hon. Mr. Chabot tabled an answer to question 33 on the order paper.

Hon. Mr. Nielsen moved adjournment of the House.

Motion approved.

The House adjourned at 12:46 p.m.

[ Page 6532 ]

Appendix

WRITTEN ANSWERS TO QUESTIONS

33 Mr. Hanson asked the Hon. the Provincial Secretary and Minister of Government Services the following questions:

1. On what basis does British Columbia Buildings Corporation provide space in Government buildings for employee operated cafeteria services in the Capital District?

2. Is there a contract or lease agreement for the use of Government buildings for employee operated cafeterias? If so, what is the content of these agreements?

3. What steps has the Minister taken to ensure that such cafeteria services are, in fact, employee operated and that employees are eligible to achieve membership in the association and are able to participate fully in its affairs?

The Hon. J. R. Chabot replied as follows:

"The British Columbia Buildings Corporation falls under the jurisdiction of the Minister of Municipal Affairs and the question should therefore be redirected to his attention."