[ Page 6533 ]

CONTENTS

Oral Questions

Sewage dumpage. Mr. Lauk –– 6533

Satellite open-skies policy. Mr. Michael –– 6534

Sewage dumpage. Mr. Lauk –– 6534

Mr. Reynolds

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

(Hon. Mr. Rogers)

On vote 22: minister's office –– 6535

Mr. Lockstead

Mr. Michael

Mr. Passarell

Mr. Davis

Mrs. Wallace

Mr. Cocke

Coal Amendment Act, 1985 (Bill 51). Second reading

Hon. Mr. Rogers –– 6546

Mr. Lockstead –– 6546

Mrs. Wallace –– 6547

Mr. Williams –– 6547

Hon. Mr. Rogers –– 6548

Natural Gas Price Act (Bill 52). Second reading

Hon. Mr. Rogers –– 6548

Mr. D'Arcy –– 6549

Mr. Williams –– 6550

Mr. Lockstead –– 6551

Mr. Davis –– 6551

Mr. Macdonald –– 6552

Mr. Cocke –– 6553

Mr. Hanson –– 6553

Hon. Mr. Rogers –– 6554

Division –– 6555

An Act To Amend The Trinity Western College Act (Bill PR406). Second reading

Mr. Cocke –– 6555

Mrs. Dailly –– 6556

Mr. Veitch –– 6556

Mr. Rose –– 6557

Mrs. Johnston –– 6558

Division –– 6558

Miscellaneous Statutes Amendment Act (No –– 2), 1985 (Bill 42). Hon. Mr. Smith.

Second reading –– 6559

MONDAY, JUNE 10, 1985

The House met at 2:06 p.m.

Prayers.

[Mr. Strachan in the chair.]

HON. MR. CHABOT: We have in the members' gallery today, from the B.C. Wildlife Federation, Mr. John Carter, president; Carmen Purdy, past president; Greg Norton, director; Stu Reeder and John Stebbing. I wish the House would join me in welcoming them here today.

MR. MacWILLIAM: We have some special guests in the gallery today: my wife Arlene and our eldest daughter Laurie. Accompanying them is a young lady and family relation from Jakobstad, Finland, or, as they say in Finnish, Pietarsaari. Vill husen ge en varmt valkommen till Jeanette Hongisto, or, in English, would you please give her a warm welcome.

MR. VEITCH: In the members' gallery today is my favourite school trustee from School District 41, my wife Sheila.

MRS. JOHNSTON: In your gallery this afternoon are some very special ladies from Surrey. I would like to introduce Peggy Steacy, Phil Reynolds, Barbara Freeman and Eileen Martin, who represent our auxiliary in Surrey. I would ask the House to please give them a warm welcome.

MR. REID: Mr. Speaker, it gives me pleasure to introduce four of the other ladies who were fortunate to bring the sun from sunny Surrey to Victoria for today. It's with great pleasure that I introduce Rita Waenink, Rütta Pearson, Jeanne Faessler and Audrey Hadley. Would the House please make them welcome.

DEPUTY SPEAKER: As well, hon. members, would you do me the honour of welcoming my wife Beverley, who is with us this afternoon.

Oral Questions

SEWAGE DUMPAGE

MR. LAUK: Last week I asked the Minister of Environment to look into the question of the dumping of 40 million litres of raw sewage into the Fraser River. Subsequently we have seen that it has caused some alarm in and around the city of Vancouver and the greater Vancouver district. We are told that the greater Vancouver district has decided to dump this sewage a week earlier, they say, to lesson the health hazard; I say it's to avoid political outflow. Has the minister taken any action at all to look into the health hazards of this sewage dumpage, and if so, can he report to the House?

HON. MR. PELTON: I'm advised that the health authorities of the city of Vancouver and the municipality of Burnaby were included in discussions prior to the issuance of the licence to discharge the effluent into the Fraser River. I have also been advised that it is not considered that there is any danger to health as a result of this.

MR. LAUK: Dr. Blatherwick of the city of Vancouver will be pleased to hear that information. It is his view that there is a health hazard, and he has taken precautions to....

Interjections.

MR. LAUK: If the Minister of Environment acted as quickly to prevent this possibility for the tidings of the city of Vancouver as he did a garbage dump in his riding, we'd have quick action here. Am I to understand from the minister that he abjectly refuses to intervene in this situation? Tomorrow is the day they're opening this flow of sewage into the river. Does he refuse?

HON. MR. PELTON: The Minister of Environment doesn't refuse to do anything. The permit was issued, and the dumping should take place in a period between June 1 and June 25, I haven't been notified when it's going to happen precisely, and certainly the time when it's going to be dumped will take into account the flow of the Fraser River — when it's at high water and when it's flooding, which it is doing right now. The dilution of the effluent, I'm given to understand, could be as high as one in 10,000 and as low as one in 4,000.

[2:15]

MR. LAUK: To the Minister of Human Resources. In her capacity as Deputy Premier....

Interjection.

MR. LAUK: Oh, sorry — acting Premier. Will the minister, as acting Premier, advise if she has made a decision to intervene and stop this sewage dumpage that will flow onto beaches that are largely bordering on her constituency and will affect the children coming out of her schools in two weeks?

HON. MRS. McCARTHY: The member for Vancouver Center is incorrect; I am not acting Premier, and I suggest that that question be asked of the Minister of Environment.

MR. LAUK: May that answer go to all of her constituents. I would ask a question of the Minister of Health. Last week he undertook to look into the question of the danger to health as a result of this sewage dumpage. Has he done so, and is he now prepared to report to the House?

HON. MR. NIELSEN: The immediate responsibility for the maintenance of public health in Vancouver is with the city of Vancouver under their medical health officer. It's the responsibility of the Vancouver health department. I asked the chief provincial health officer, Dr. Hugh Richards, and members of the ministry's public health inspection units to inquire into the matter. Unlike the member for Vancouver Centre, I will not attempt to provide an answer for one of the medical doctors. I'd rather hear it directly from him.

Dr. Richards assures me the planned discharge does not constitute an immediate health hazard to citizens of Vancouver. He has advised me that medical engineering consultants of the Health ministry have determined the expected dilution, which will take place when the effluent is discharged at peak

[ Page 6534 ]

river flow, and the flow of river currents suggests that Vancouver can expect no health hazard as a result of the discharge. I heard Dr. Blatherwick on the air the other day: he said he was not an alarmist, and I did not hear him say he expected any danger to public health.

The chief provincial health officer, Dr. Hugh Richards, has advised me, as I just said, that they do not suggest that Vancouver can expect a health hazard as a result of the discharge.

MR. LAUK: Mr. Speaker, to the Minister of Health. I am informed that the mayor of the city of Vancouver is concerned and is consulting with his own health officials. Dr. Blatherwick has instructed that health warning signs be placed on the beaches. Can the Minister of Health explain whether or not this is in accordance with Dr. Richards's views? Why put up health warning signs if there is no danger to health?

HON. MR. NIELSEN: Mr. Speaker, I am advised the Vancouver health department has, as a precautionary measure, posted signs at beaches in the city suggesting to members of the public not to swim in the water during the discharge period as a precaution. But I am assured by my officials, who have been in contact with the Vancouver health department, that the Vancouver health department does not consider the discharge to constitute an immediate health hazard but is posting the beaches only as a precautionary measure. I'm also advised that the Vancouver health department will be testing the water daily to ensure there is no health hazard.

I would think, Mr. Speaker, that the officers of the Vancouver health department do frequently post notices and issue advice to the public as a precaution, which is part of their responsibility. That is the information we have received from the Vancouver health department through the provincial health officer, Dr. Hugh Richards.

SATELLITE OPEN-SKY POLICY

MR. MICHAEL: Mr. Speaker, I would like to direct a question to the Minister of Universities, Science and Technology. It has to do with the open-sky policy of the provincial government.

There was a court case recently held in my community dealing with Shuswap Cable Ltd. The firm was prosecuted, and I would like to hear from the minister whether this prosecution in any way affects the open-sky policy of the provincial government and their control over satellite cable?

Interjections.

HON. MR. McGEER: May I answer? Is that agreeable to the opposition? Mr. Speaker, Shuswap Cable was found guilty of rebroadcasting and fined $1,500. They were not found guilty of showing American satellite signals, because it was agreed by the federal government and the defence that this did not constitute broadcasting. It therefore is a non-broadcasting service, and the public utilities commission of British Columbia licenses non-broadcasting services.

I might say, the heinous crime that the people of Shuswap Cable were guilty of in this particular case was showing CBC and CTV, not American satellite signals. Those dreadful people were showing CBC and CTV. Can you imagine that?

They went too far distributing Canadian broadcasting signals.

DEPUTY SPEAKER: Thank you. The question has been answered.

HON. MR. McGEER: In any event, we will not take responsibility for licensing people to distribute CBC and CTV, and members will understand why. But American satellite signals are under British Columbia jurisdiction.

SEWAGE DUMPAGE

MR. LAUK: The Minister of Health has admitted — and it's public knowledge that signs will be posted as a precaution by health officials — that health officials will be testing the waters daily, and that the GVRD has moved ahead by one week the sewage dumpage because of the alarm that it would arrive at the same time as swimmers on the beach. In the light of those facts, is the minister of the view that he should reinvestigate this matter before tomorrow's deadline and intervene if necessary under the Health Act?

HON. MR. NIELSEN: Mr. Speaker, the member is in error in part of his statement, which is unfortunately not that uncommon. The date of discharge has been chosen by the engineers within the Greater Vancouver Regional District for purposes of maximum dilution, rather than for some nefarious reason as that member would suggest. I have confidence in the capability of our public health officers, and particularly in the chief provincial health officer, Dr. Hugh Richards. Dr. Richards and the others who are responsible for the discharge of this effluent because of the need to cut a sewer line in that area do not take their positions lightly. They have agreed at this time that it does not expose the citizens of the greater Vancouver area to an immediate health hazard to discharge this amount of effluent along with the 40,000 cubic whatever it is per second discharge of the river itself, the dilution factor being between 4,000 and 10,000 to one. They believe it is quite safe to allow that effluent to be discharged at that, time. These professionals are not making a decision other than that based on their own science. I have every confidence, when Dr. Richards advises me, that the discharge does not constitute an immediate health hazard to the citizens of Vancouver. Further advice from the medical and engineering consultants has determined that the expected dilution will take place when the effluent is discharged and that Vancouver can expect no health hazard as a result of the discharge. Dr. Richards has no political gain in this matter.

MR. LAUK: If the minister is suggesting that I do, then he's sadly mistaken, and he doesn't know me as well as he thinks he does.

Interjections.

MR. LAUK: What's happened here is that we've abdicated health responsibility to engineers, and the government is acquiescing to that simply for its own timetable at Annacis Island.

DEPUTY SPEAKER: Order, please. There must be a question.

[ Page 6535 ]

MR. LAUK: It's an absolutely disgraceful display of cowardice on the part of the government.

DEPUTY SPEAKER: Order, please. One moment, hon. members. Our standing orders advise us on page 19 — standing order 47A, "Oral Questions" — that "questions and answers shall be brief and precise, and stated without argument or opinion."

HON. MR. NIELSEN: Mr. Speaker, on a point of order, I would ask the member, who is quite exercised at the moment, to withdraw his statement that it is an act of cowardice on the part of the government.

MR. LAUK: I didn't name any minister, and it's perfectly permissible under the rules to describe the government as acting in a cowardly fashion.

HON. MR. NIELSEN: May then, Mr. Speaker, I respond by saying the opposition is acting in a gutless way?

DEPUTY SPEAKER: Hon. members, imputation against a single member is always withdrawn if the Chair so requests. Comments such as have been made are not really appropriate; they do not indicate parliamentary courtesy. I guess they will be allowed.

MR. REYNOLDS: A question for the Minister of Environment. In view of the concern shown by the second member for Vancouver Centre about the pollution of our waterways, and in view of the fact that the city of Victoria, as well as other major municipalities on this island, has been pumping raw sewage into the ocean here for years, can the minister advise us if he's had any questions, ever, from the members for Victoria about this same problem?

HON. MR. PELTON: Insofar as I can recall, Mr. Speaker, the answer is no.

Orders of the Day

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.

MR. LOCKSTEAD: On Friday we had the opportunity of discussing a number of matters with the minister. There are still a number of matters that have not been discussed.

Mr. Chairman, I'm waiting for the House to quieten down, and they will. I'm not worried about it. You don't have to say anything, but before launching into my presentation....

MR. CHAIRMAN: May we please have order in the House.

MR. LOCKSTEAD: This portfolio is so large that over the last several months, almost a year now since we last debated these estimates, I've accumulated something like 18 monster files full of information. We could be here for the rest of the session,

We're attempting basically to stick to some of the larger and more important issues. We discussed mining and related issues last week. A very major development that has occurred within the last six weeks or so is the signing of the so-called western accord. I want to make sure I have the minister's attention. I know I have.

The western accord, Mr. Chairman, deals with an agreement that was signed finally, after a great deal of delay, between the four western provinces and the federal government. I've had the opportunity to go over the highlights of that agreement, and I have a number of comments to make. I am going to be dealing with some facts and figures which I presume are correct. Mr. Minister, the topic that we're dealing with now, in case you did miss it, is the western accord. You got it, Mr. Minister.

[2:30]

First of all, I want to discuss what this agreement may do and probably has done in terms of windfall profits to the multinational corporations and to the petroleum industry. It is our view that windfall profits as a result of deregulation of the price of oil mainly, though not exclusively, will accrue to the multinationals. This is because, on balance, multinationals hold more conventional old oil reserves and aggregate barrels than Canadian-controlled premium companies.

We have a considerable amount of research. I know when we're talking about old oil and new oil and these kinds of things, Mr. Chairman. It gets rather complicated. I don't expect all the members to grasp the significance of this, so I'll try to stick to the highlights. I have decided to choose four of the major multinational companies and give this House and certainly for the record what will happen as a result of this western accord.

Gulf Oil, for example. As a result of deregulation, windfall profits that will result for that company in 1985 alone would be an increase in their profits of $58.9 million; Imperial Oil, $54.9 million; Shell Oil, $43.7 million increase in profits for this one year alone; Texaco, $76.8 million. If you look at the four largest oil companies in Canada that are strictly Canadian, you will find that the figures.... Murphy Oil, $0.51 million increase, which is considerably below the multinationals; Pan-Canadian, $45.9 million; Dome Petroleum, $45.7 million; and $8.8 million for Aberford Resources.

In 1984 it was a good year for the petroleum industry in Canada, In the first six months of 1984 the petroleum industry revenues rose by 10 percent to $31.2 billion. compared with the same period in 1983. The four largest oil companies in Canada reported an increase in profits in 1984 over 1983: Gulf, 23.1 percent; Imperial, 60 percent; Shell, 41 percent; Texaco, 23.1 percent. In terms of millions of dollars, for Gulf that means $218 million; Imperial, $332 million, Shell, $102 million; and Texaco, $344 million.

In other words, what we're saying by signing that agreement.... One of the things we're saying, because I have other things to say as well, is that that has, in fact, been a giveaway to the large multinational oil companies. There is no guarantee that additional revenues will be employed by he industry to help us achieve energy supply security or that they will be reinvested to create jobs. This is one of the major questions I want to pose to the minister. I'll stop in my presentation right there.

[ Page 6536 ]

The federal Minister of Energy and the provincial ministers have said on many occasions, prior to but certainly since the agreement was ratified, that the windfall profits to the companies will in fact produce tens of thousands of new jobs for Canadians, particularly in the west. Well, we fail to see how. I've read the minister's press releases. I've read the federal minister's press releases as well. I've obtained as much information as I can. One of the reasons for this is that between 1974 and 1980 the industry was a net capital exporter of capital to the tune of $4.1 billion.

That's the second question. How are we going to police this export of capital moneys accrued through the largesse of the federal and provincial governments to these large multinational oil companies, when they're taking those profits and sending them out of the country at a time when our senior citizens are being de-indexed?

In addition, the record shows that Canadian-controlled companies continue their historical performance of reinvestment of their cash flow in petroleum-related investments at much higher rates than the foreign-controlled firms. I have a list of figures here. But the fact is that in Canadian-controlled companies in 1984, 76 percent of their profits were reinvested back into Canadian companies; in 1983 it was 81 percent, and in 1982 an unbelievable 97 percent. Foreign controlled companies over the same period of time reinvested 58 percent of their profits back into Canadian projects in 1984; in 1983 it was 60 percent; in 1982 it was 77 percent. There are no job-performance guarantees attached to that agreement.

I know, Mr. Chairman, that the government across the floor and the federal government have said: "Well, we're going to monitor the industry. We're going to watch them very closely." How is this monitoring to be carried out'? Even if the industries decide that they want to utilize their capital and these windfall profits in another way, what's to stop them? What in that agreement is to stop them? Nothing. This is a very serious question for Canadians, Mr. Chairman.

Another very major item in that agreement. As a result of removal of petroleum gas revenue tax, large profits will accrue to the oil industry again, with an attendant loss of revenues to the federal treasury. It is estimated, with the stepping down of the PGRT, the western accord, that $5.26 billion will be lost to the federal treasury by the end of 1989. I have a table here. I won't read this into the record, because it's quite lengthy. But I have a table here which has been well researched and outlines what would have been paid before the signing of the agreement. So we have this loss to the federal treasury of nearly $6 billion, while senior citizens' pensions are being de-indexed, while we have lineups at food banks, and on and on.

There's no point in restating the miserable economic history of the government opposite. But why did we sign such an accord? The net result of all this, of course, will be higher prices at the pump, depending on whose figures you believe. We know that starting in September the federal government has levied an extra 2 cents a litre on.... Theoretically, gas prices at the pump are supposed to have been reduced, but we know very well that's a short-term measure — and shorter than we thought. In most cases gas prices at most pumps throughout the province have not actually been reduced in any serious or meaningful way. We know that the price of gas at the pump is going to increase. That's what people are really concerned about and think about.

According to the Independent Petroleum Association of Canada, as I said before, $500 million to $600 million will flow through to the petroleum industry next year as a result of decontrol over oil prices alone. I haven't really discussed the natural gas situation, because there is a bill before the House, and we can get into that bill. But in an overall way, every time the federal government.... For example, one of the things the agreement did was remove the federal Canadian ownership special charge from the wholesale price of natural gas; but the provincial government immediately moved to take over that vacated charge. That seems to be the pattern of this government. If we take these figures as a constant and add to them what the industry will receive through tax breaks as a result of the reduction and eventual elimination of the PGRT, then the industry will receive an overall increase in profits of about $7.5 billion by the year 1989, according to the figures I have here. I have a number of other examples listed here as well, which I won't read into the record — they're for each individual oil company involved. They range from Shell at 41 percent — which is the highest; another multinational.... There's no guarantee that those funds....

In summary, dealing with this very complicated and massive item — and basically dealing with jobs.... Just remember the hue and cry the public raised a few years ago, in 1980, when it learned of the unbelievable windfall profits made by the big oil companies in Canada. I think, folks, people of this province, it's time to fill our lungs again and let our feelings be known, because those times are coming back.

Mr. Chairman, to put this all in perspective, let's say your small business made a profit of $40,000 last year. If you had a 40 percent increase in profits, it would raise your profit figure to $56,000. That's an excellent increase by anyone's standards. However, the 40 percent profit increase did not satisfy the big oil companies, nor apparently their friends — and we know who their friends are.

The western accord deregulates oil prices, thus eventually putting Canadian oil prices on a par with world oil prices. Higher prices at the gas pump, as I said before, will result — some estimates say a minimum of 5 cents per litre and soon. It could be a little lower or a little higher, depending on the world price. But I can tell you....

I see the green light is on, Mr. Chairman. I haven't quite finished. But these policies will affect everyone in Canada and British Columbia: the fisherman, the trucker, the salesperson, the consumer — all will suffer from these outright gifts, in my view, to the large oil companies. With that, I will end this portion of my presentation. I'll wait and listen to the response from the minister.

MR. MITCHELL: May I have leave to make an introduction, Mr. Chairman?

Leave granted.

MR. MITCHELL: I would like the House to join with me in welcoming a group of people not only from my riding but also from all of British Columbia, and some from other parts of Canada — 30 members of the Armed Forces who are at Naden on a course. They are down here to see how the civilian part of Canada works and what we are doing in British Columbia. I ask you to welcome these 30 members of the Armed Forces in the members' gallery.

[ Page 6537 ]

HON. MR. ROGERS: I recall that in central officers' school one of the things I was told by my instructor was that you're not allowed to speak about politics nor attend anything about politics. Gentlemen, there are times when I think it wasn't bad advice. However, here we are.

I wish the member for Mackenzie could have been with me on the weekend, because I was in about eight inches of snow at an oil rig working in the north Peace River country, owned by a Canadian company. They drilled all last winter. They found four wells that produced and 15 that didn't. Maybe you'd get some perspective of what this industry has to put up with and what the risks and rewards are.

You told us how much money these oil companies made, Mr. Member, but you didn't tell us whether that was Canada or British Columbia. When you quoted those numbers about what the various oil companies made, that was the Canadian figures, not British Columbia figures, and of course the oil revenue is largely out of Alberta and, to a smaller extent, out of Saskatchewan, British Columbia being somewhere between 25 and 30 percent self-sufficient in oil and no more than that. Just for other interesting little statistics: the federal government took a mere $11 billion revenue out of the oil and gas industry last year.

What you fail to understand about PGRT is that it's not a tax on profit, it's a tax on cash flow, and as a result of that the industry wasn't interested in drilling here. Drilling rigs that were Canadian-owned moved south of the border. They paid the duty, went to the United States and went to work. They're gypsies; they go to where they can get a decent return. The western sedimentary basin had less activity during the time that the national energy program was in place than anytime since the discovery of Leduc. Sure, there was activity in the offshore, in the Beaufort and in Atlantic Canada, and by Canadian companies. They've got pit money to do it, so the great Canadian companies in some cases putting up as little as 10 cents on the dollar for exploration activities, in the case of one company putting up nothing on the dollar.... If they find money, the company would do well. I suspect the shareholders never did see much out of it.

[2:45]

One of the other interesting little aspects I would point out is that one of the companies, Texaco, found it more lucrative to invest in a convenience store chain than they did in oil and gas, and so they bought a large chain of eastern Canadian midnight-till-midnight food markets in which they felt the returns were so good.

You talk about the export of capital. I don't know what documentation you have about the export of capital, but one of the things we're trying to encourage in this country is the importation of capital. If you want people to be able to import capital to invest here, you also want them to have the knowledge that they can remove their capital and their profits if they choose to do so.

Canadian companies are very active drilling overseas, not the least of which is Petro-Canada, which is drilling in the South China Sea. Now what that does for the people of Canada I'm not sure, but nonetheless the Canadian-owned company, which your party was so vociferous in its support of, is investing overseas.

One of the things you have to do, I guess, is go to Fort St. John. Then you'll understand why we're so delighted with the signing of the western accord. A city which was virtually boarded up in the middle of this national energy program is now coming back to life as people are moving back into the province. There is much more increase in drilling activity. If the LNG project is successful in going ahead, you'll see even greater activity there and that town get back to the kind of activities that they had.

I told you on Friday. and I guess I want to repeat it, that I have written to every major oil company drilling in British Columbia and asked them what their views are of the western accord. Not only do they expect to reinvest the money they're making in British Columbia: they expect to bring more money here to invest. That's what we're interested in — activity — and activity means employment. You asked how this would be monitored. There is a federal agency in place, fully staffed, that has the capacity right now, and by agreement. It's called the Petroleum Monitoring Agency. It's an agency of the federal government, and they re going to share that information with us.

All of us who are signatories — actually, we didn't sign it, we initialled it; it has yet to be officially signed — of the western accord are delighted with it. You wonder why British Columbia signed the western accord. There is no question in my mind that it was a great thing for British Columbia. I'm not so positive that it's absolutely the very best thing for Ontario, and that's just a terrible thing. They're going to get the spinoff activity, but we're going to get the activity here because there is a return on investment which wasn't there before. It's as simple as that. You can't expect people, if you're going to charge them an incredible royalty and a charge on their cash flow before they make any profits, to be interested in investing here. They're just not.

There were a few statements made on Friday which I'd like to correct. The member for Rossland-Trail (Mr. D'Arcy), who is still with us today, said that Westar is operating at 60 percent of its former production and employment levels since the advent of northeast coal. I'd like to correct that. The company has lost some sales in Japan. but they have picked up new markets in Europe and South America and Korea. It is operating at 85 percent of capacity in terms of the plant capacity. It is limited now by the capacity of the wash plant, because of the change in the type of coal they're doing. Employment is not 60 percent of its former levels; it is now 90 percent of its former levels. The output of the company is actually at an all-time high of eight million tonnes. So that's just something I'd like to correct.

You made another statement about the decrease in electricity consumption at the residential level. I have before me the figures from 1975 through to 1985. Every single year there is an increase in the consumption of electricity at the residential level. and an increase in the number of residential customers. In fact, the same figures apply for all of the customers — transmission customers and everything except for irrigation and street lighting. They had a special rate, and because of an extra-wet year one year, a little less irrigation expenditures than in others.

So we talk about what effect the increase in rates had on customers: did the electricity demand go down? It did not. For the first time this year, we have over one million electrical customers. and we're still continuing to sign them up at about 32,000 a year. That's the rate that I discussed this morning. We have 1,050,533 residential customers, as of March 31. I just thought I'd bring that information to the House.

I think that will do it for now. More questions?

MR. LOCKSTEAD: Mr. Chairman, I just have a few comments to make. This government actually believes that

[ Page 6538 ]

the oil companies will pump so much of their profits back into the Canadian economy that it will create jobs. This has never happened in the past, and it is doubtful if we can rely on non-Canadian multinationals to worry themselves over Canadian jobs. In fact, industry has always been a net capital exporter, as I said earlier. Also, the petroleum industry is a poor investment in terms of job creation.

In fact, there is one school of thought which has been put forward in Ottawa in terms of the western accord: that this western accord could cost us possibly tens of thousands of jobs. I don't know if that's correct or not. I know you will deny it, Mr. Minister — through you, Mr. Chairman — but, well, there seems to be a double standard at work here in this government and with the federal government in this agreement. The federal deficit is no problem when it comes to giving money away to the oil companies, but when it comes to helping ordinary Canadians, both governments moan about the deficit. Provincially, our deficit seems to climb every year

But I want to mention that another major problem, in my view, that I see with this agreement — with the deregulation aspect of the western accord — is the danger of pegging oil prices at the world level. That puts Canadians at the mercy of OPEC's whims. Even though the oil prices have dropped in the past few years, the oil market, as we have seen, is a volatile one and can fluctuate crazily. Therefore I repeat that I have not had a satisfactory explanation as to how many jobs and where these so-called new jobs are going to be created as a result of this massive giveaway, what powers.... We will see higher prices, in my view, down the road and at the pump, and once again ordinary consumers will be paying the bill for this massive giveaway.

Last but not least, I don't know what powers the agency you mentioned has — the federal monitoring board. Does it have powers to advise, to regulate, to implement or just to advise federal or provincial cabinets?

HON. MR. ROGERS: Well, I guess the member and I are going to have a little difficulty on philosophy here, but I don't think corporate morality has ever known any international boundaries. I have seen Canadian companies which I didn't think displayed the very best of corporate morality, and I have seen multinationals and foreign nationals that have treated their employees in an exemplary manner such as Canadians should be proud to follow. So I'm sorry. I don't share your view that Canadian companies are all good and foreign companies or multinational companies are all bad. In fact, if you look at the record in the forest industry, I think you'll find that in some cases the nationals could learn something from the internationals. But does a company that's headquartered in Calgary have greater morality or greater Canadian feelings than a company that's headquartered in New York or New Jersey or something like that? I suppose the chairman of the board has a Canadian flag on his lapel, so he feels more about Canada.

Interjection.

HON. MR. ROGERS: The multinationals.... Sorry Mr. Chairman, I shouldn't allow that intervention to go ahead, but, sure, the multinationals repatriate some of their capital. They brought the capital in here in the first place they should be entitled to repatriate it. We want Canadians to be able to invest in this country and overseas, and we want Americans and others to be able to come and invest in our country.

The second thing I think that's important is.... You talk about the world oil price. If we're to protect ourselves from the world oil price, then we're just being ostriches. We can say: "Fine, the Canadians will be protected from such great horrendous shocks." That meant that Canadians were slower to adjust to the smaller automobile and to all the energy conservation methods. And what happened? All you're doing is taking it out of one pocket and putting it into another. You talked earlier about the old age pensioners. Are you going to explain to an old age pensioner that the federal deficit is greater because we protected the motorists from the reality of what world oil prices are? Canada is not self sufficient in oil. It may be, as a result of the western accord. We might find enough exploration activity for people to go out and look for oil and gas; and if we find enough to become a self-sufficient nation, we'll be much better off for it, but we're not right now. We're self-sufficient in natural gas; we're not self-sufficient in oil. So if the price of oil goes up — and I have every indication that it will not, but that in fact it will continue to monitor down at least until '93 or '94; that's a culmination in my office of all the different estimates sent by all the different petroleum agencies, and there are hundreds of them....

Those same experts who told us that oil was going to be $80 a barrel are now telling us it's going to be $18. On that basis, people invested in the Athabasca tar sands and all sorts of other things — some rather large and rather white elephants, I might tell you, in some of those operations. I don't think it's important that the motorist should be hidden from the realities of what the price of oil is. All you had is the federal government picking up the subsidy or taxing you through another pocket. Why not let the motorist and the consumer know right at the pump what the actual cost of oil is, instead of getting involved with subsidizing them? So that's where we have a difference of agreement. The agency that I spoke to you of has an advisory capacity role. It advises both the federal government and the provincial governments appropriately.

MR. MICHAEL: The Minister of Energy, Mines and Petroleum Resources is perhaps fortunate to have that portfolio in this particular period of time. Certainly for the last year it has been — and I see for the next few years — the most exciting ministry of all in the province because of the things that have happened, and the things that are on the drawing boards to happen. It's very interesting, Mr. Chairman, to look at some of the statistics on what went on in that ministry in 1984. As an example, gas and oil exploration was up in 1984 over 1983 by 155 percent. It's very exciting indeed to look at the figures on coal production in British Columbia. The opposition talks about southeast coal and the doom and gloom attitude they seem to have. All of my figures indicate that coal production is up throughout the entire province, including the southeast. Indeed, coal production in British Columbia was up a whopping 78 percent in 1984 over 1983. Looking at coal revenue, we see that an additional $365 million was brought into this province by additional coal sales in 1984, and beyond a doubt those figures are going to be even greater in 1985. Mr. Chairman, it would appear that the opposition have not done their homework or done much close examination of the effects and the magnitude of the LNG plant proposed for Prince Rupert, and of course the fertilizer plant that has

[ Page 6539 ]

already been announced for Annacis Island on the lower mainland. If they had done their homework, I am sure they wouldn't be speaking negatively, as the member for Rossland-Trail (Mr. D'Arcy) spoke on Friday about the proposed LNG plant for Prince Rupert. Perhaps they would be interested in looking at some volume figures.

The fertilizer plant proposed for Annacis Island is going to consume 20 billion cubic feet of natural gas a year. The LNG plant for Prince Rupert: my research indicates that that plant will be consuming in the neighbourhood of 140 billion cubic feet of natural gas a year. Just to rattle off figures like this doesn't mean too much until you compare it to the number of households that that would heat. The fertilizer plant alone is going to utilize enough natural gas to heat 200,000 homes. The LNG will heat the equivalent of 1.4 million homes. Adding those two together, if that LNG plant goes ahead, those two plants would utilize enough natural gas to heat 1.6 million homes.

[3:00]

Relating this a little bit further, Mr. Chairman, for the sake of getting the message across to the opposition as to the enormous volume and what this means to our province, perhaps I should read into the record the average number of homes using natural gas as a fuel in 1983 in a variety of provinces throughout the Dominion of Canada: British Columbia, 419,789; Alberta, 571,979; Saskatchewan, 210,817; Manitoba, 173,357; Quebec, 162,666; and New Brunswick, 286. Taking the total of all of those provinces, there are 1,538,894 homes heated by natural gas. That means that these two plants, if the LNG plant goes ahead — and I'm convinced it will — will be utilizing more natural gas than all of the homes in those entire six provinces combined. A tremendous opportunity for the north country! I thank our lucky stars that we have an aggressive minister and government, and that we have in this province a government which has the faith of the private sector and the international investors to bring those dollars into British Columbia to create those necessary jobs.

[Mr. Veitch in the chair.]

MR. PASSARELL: A couple of questions to the minister. The first one is an article that was in Friday's newspaper: "French Firm To Get Funds for Road into B.C. Gold Mine." Your government is giving $4.5 million to Serem, a French firm. This is good, because there's a definite need to have that road; it's a very isolated area. The 130 jobs that would be generated from this new gold-mine would be of immense value to the constitutuency of Atlin.

I'd like to know if the minister has looked to see if it would be feasible — and how much it would cost — to run the road past Serem into Klappan. It's not that far. We're talking 20 or 30 miles maximum. What we could do is give an extra $2 million to run the road in, and then Klappan would have the road all the way through to Smithers. It would be a great idea, since we're giving the money for the project already. Has the minister looked at the aspect of continuing this road through into Klappan? What would the cost be? I 'm sure it wouldn't cost that much to do. That way they would have two avenues. If I'm not mistaken, right now it’s going to cost quite a lot of money to put that 140-kilometre road down into 37. If we could work it out through this grant, we would be encouraging development in the area and have a road that would be useful not just for one or two projects but for longterm ventures of many operations into that area.

The second question I'd like to direct to the minister regards the red codes that are put onto streams, particularly when they deal with placer operations. I wrote a letter last year to the minister regarding some small placer operations, which are employing one or two or three men. Red codes are put onto these streams. and once you put a red code onto a stream, it's very difficult for the placer operator to continue working. In some of those areas where the red codes were put, there haven't been fish for probably a million years. I understand why red codes have to be put on the rivers, such as the Stikine or major rivers. or even some of the smaller grayling rivers in the constituency of Atlin, but around this particular area, the Surprise Lake area, it's just not feasible. I have talked to people who have never seen a fish in some of those streams for years. Old Bob can even talk about that. Old Bob knows that area, and he wonders why. So I would like to see some opening of these red codes on streams, because it does affect the placer operator. We have to put the environment ahead of us, but I think we go a little overboard at times when we start putting in red codes.

I know those are pretty difficult questions, and I know I've upset the minister with these questions that I've directed to him. He can hardly contain himself in his seat. I thank you for the opportunity to address these two important questions to the Minister of Energy, Mines and Petroleum Resources.

HON. MR. ROGERS: The Serem gold corporation has a mining claim called Lawyers property. When they first came to see me, I said: "I'd like you to change the name of the mine before anything else happens, because I’ve got a bad taste in my mouth." Anyway, what they have is a well-drilled and well-delineated ore body of fairly high-grade ore that requires an actual mining operation and milling operation — concentrating operation — to be built on the site.

We didn't actually give them the money; it's a loan. The loan is structured on a very fascinating type of payback. They will be producing more bars, but it's structured on a trigger price of $385 U.S. for gold and, I believe, $7.60 U.S. for silver. Also in the trigger price is an either/or, and we've also covered both currencies: the Canadian currency and the American currency, So if the Canadian dollar were to go to par or above par with the American dollar, we've covered it so we get it that way.

Interjection.

HON. MR. ROGERS: Well, anyway, they needed the money.

So we're doing the road assessment work this summer. It may be that we go off the end of the Omineca mining road. It may also mean that we use the forestry road for access. This is an extension from the Omineca mining road, but the Omineca mining road is not in the best of repair. What may very well happen.... I'm not positive of the name of the forest access road, but there is a forest access road that's in better shape and is only some 15 kilometres from the Omineca mining road, The road may be pushed through from there.

It is, however, quite a long way from Klappan. It's a lot further than I think you believe it to be. I don't know the exact

[ Page 6540 ]

distance, but we are not looking at that. However, my ministry is currently doing a study with Gulf Canada — or Olympia and York, Canada; I don't know if they've changed the name of the coal outfit yet, or if they even bought the company — on which is the best route to go from Klappan back down the BCR right-of-way, and then which particular valley to get over to the Nass, and then go down the Nass and into Stewart.

I had a look at it this past summer by helicopter. We went up through, I believe, Summit Lake, a small lake up there, and looked at both routes. Road building is a little difficult. In one particular aspect there are a couple of bridges that have to be built, but in view of the fact that they'll probably move a million and a half tonnes of coal per year — rubber-tired operation, rather like Cassiar does with asbestos — then that does seem to be the more practical route to go.

Both of those things are proceeding. The Serem deal has a lot of catches in it. We have to have a firm commitment from them to begin employment. They have to give us a guarantee that they'll actually start construction, so before we advance any funds, it's all there. Incidentally, they plan to have that as a fly in and fly out for the crew, but they need the road access to move in materials and, of course, fuel for that particular operation.

I was in your constituency last summer visiting a number of placer leases. To say that your constituents are independent and colourful would probably be correct, and I think you'd agree with that as well. Federal fisheries, the provincial Fish and Wildlife and the water comptroller are largely the people that make these determinations. I suppose the ministry puts them in place.

The gold commissioner is in the gallery today, and you brought a smile to his face, I'm sure, when you discussed the possibility of opening up some of these areas. There is resistance to it. If there aren't fisheries documented in these areas, then I think perhaps we should have a look at them. But again, it's not my ministry to do it. If you left it up to the Ministry of Mines to determine which place is going to have placer leases.... I'd be very popular with my constituents for opening it up. But you know that there is a more important environmental aspect to be looked at. They have to be given those considerations.

We have released a bunch this year, as a matter of fact. There's been better cooperation — or, I should say, more expeditious cooperation, I think — in the last year than there has been in previous years, because we have released quite a number of rivers that were previously in reserves. I could talk to you individually, if you want, about individual one-on-one cases, or as you choose.

MR. PASSARELL: Just a few further questions on this. The minister mentioned he'd be very popular with his constituents if he opened up....

Interjection.

MR. PASSARELL: Okay, because I was wondering how many placer operations we could get going in Vancouver South in some of their smaller streams.

I'm glad to hear the minister talk about Klappan, because that's going to be a major project for the far north and the Atlin constituency, as well as the province.

When I brought forward the suggestion of the road, I thought it might be of some value to have access on both ways, but that's okay. My concern is that Stewart is needed as a major port, so if the road is going to come to the 146.... I know in the article they were talking about the railroad. I don't know if that's feasible. It would be a tremendous expense to run a rail line in from Klappan into Stewart, but if we got the road upgraded into that.... Would the government be in a financial position to give Klappan Gulf money as a loan — not as an outright grant — for development of a road into that area?

The other aspect I'd like to talk about is what the minister mentioned on trigger prices in regard to gold. It's a very difficult situation, because so many different mines have different prices when it comes to trigger prices, as the minister is aware. You could look at something like Scottie Gold or Erickson Gold, where the trigger prices are so much different in those areas than, let's say, the Lawyers claim we were talking about. It's a difficult situation to know exactly what the trigger price is in a gold placer operation.

So I certainly hope — and I know — that the minister will be doing anything he can to encourage Klappan and to get some type of assistance into that area to make that project get off and benefit the province of British Columbia. Those are just basically the last ones I wanted to ask the minister.

HON. MR. ROGERS: Of course, getting back to the Lawyers property and Serem, anything that they ship out they fly to New York, London or Zurich and turn that into cash right away. They wouldn't need to use the road to Stewart. I think I'll get a map prepared for you so you can see the difficulty. It's a great distance between the two, and it wouldn't be a looping road, as you suggest.

The Serem is a hard-rock operation. The company is quite confident that by the time they get this thing into production they'll do it; they'll be able to pay back the loans and funds we've advanced them. Of course we have first charge against the plant and equipment that's there, but it's just the little bit of incentive they needed to do it. In fact the economic activity that we get from this operation almost balances the cost of building a road. Nonetheless, these industrial operations aren't charities. You have to look at each one of them for what you can do to encourage them without giving everything away. The same thing applies to Klappan. We're going to do the study this year. If they can get the contract to sell the coal, then we may advance them the money to build the road, or to build the road as a public road and then charge them on a per-tonne basis.

The difficulty I had with the Lawyers property in the Serem property is simply this: that Toodoggone area has an awful lot of gold prospects in there. What happens if, as a result of opening this road, we get greater access and therefore great...? You have a little pressure from the hunting side, from the resident hunter and the guide-outfitter. The guide-outfitters have got to face this whenever there's an expansion of road. But if there are other mines developed in that area, if further gold-mines are to go ahead and if there is another operation to go in there, I'm just going to have to go to the company and say, fine, we've now got enough economic activity out of this; the province has got more than its share of economic activity out of this; we'll either get the new company to share its costs to the road, or we'll fold the cost to the road because we'll have already received it in revenue. In each particular case we're trying to deal with what we have to do to get them here without spending too much money, and how much we can cover in terms of them walking away. In

[ Page 6541 ]

both cases I'm convinced that, despite the fact they're multinational companies, they're very substantial financial organizations and will honour their commitments.

[3:15]

MR. DAVIS: I'm sure we all can applaud the government for its efforts to bring in additional capital and new industry, and provide additional jobs. British Columbia has two energy sources of significance: natural gas is one and hydroelectric power is the other. I agree that they both should be used as catalysts for developing new industry and providing new job opportunities. Some progress — I think, considerable progress — has been made in the natural gas area; less so in respect to electricity.

In the case of natural gas the government now allows the private sector to go to the field, to the source, and contract for supplies at prices and for firms which suit both the buyer and seller. Previously the B.C. Petroleum Corporation, a corporation set up by the NDP, was the sole buyer. We had a situation for too many years, beginning in 1974 and continuing down to very recent times, in which a government agency bought the energy in the form of natural gas. I've consistently been critical of that policy. In the hydro area we are still following the NDP approach of having a large government corporation produce — certainly transport and market — the energy. The NDP approach was essentially one of averaging. It was one of developing a government monopoly which controlled the source of energy exclusively, be it hydro power or gas, and it was the sole marketer.

Generally speaking, the approach to natural gas on this continent — certainly in the United States and down the years in Alberta — has been to allow the private sector to go to the source and contract supply; and require the transporter, be it Westcoast Transmission, Trans Canada Pipelines, Alberta Natural Gas or whomever, to carry that energy — natural gas in this case — as as a common carrier. That has permitted the user — a large energy-intensive user, for example, making petrochemicals — to develop a source of supply with prices and transportation costs which are reasonable in the eyes of the firm but, more important, predictable over time. It has been possible to contract sources of supply for long-term purposes. And the long-term purpose which is of most importance is financing the industry. Unless you have a source of energy at a price which is predictable, a reliable supply at a known future cost, you're not likely to attract the capital necessary to build the plant necessary to carry out the processing of that resource.

Latterly, in respect to natural gas in British Columbia, we've reverted to what has customarily been the North American practice, but certainly not the NDP practice, of allowing an industry to go to the source and buy its raw material over a long period of time at a known cost, and of course, transport the raw material to the plant, wherever the plant is located. Latterly we've even allowed plants to set up in the lower mainland. As a result of this change in policy we have, for example, a big $600 million development on Annacis Island: a petrochemical plant making fertilizers, buying a predictable supply from a private producer at the source, and with transportation supplied via common carrier to the destination industry. This is now happening in the case of Kitimat. The new plant that's going to be built there is also going to be able to buy its gas at the source from a private supplier and have the gas moved via common carrier to Kitimat. So the investor in that case, and in the case of the large new petrochemical plant on Annacis Island. knows what he's up against when it comes to the cost of raw material — in this case gas as a source of chemicals.

We've in some measure privatized the gas industry. We've at last given overseas investors, as well as our own investors, an opportunity to contract for a British Columbia product — in this case natural gas — over a sufficient number of years that they can be assured of a reasonably economic operation. That's why we're beginning to get investment in natural gas-using industries akin to the type that Alberta has had in spades for many years. We've moved, I think, significantly in that direction and with respect to natural gas; we haven't moved at all with Hydro. Now the minister has brought in legislation which allows Hydro — or Hydro under some instruction from the government — to sell some incremental or some additional power for some short period of time. That isn't going to attract new industry. It may cause an existing industry to continue or even expand its output using existing capacity and perhaps fulfill an export contract or two, but it's not going to attract new capital on any large scale. It's not going to create many more jobs.

What we had historically in British Columbia, and certainly historically in Canada. was private enterprise finding a low-cost source of hydro power, obtaining the development rights for that particular power site — in effect capturing the costs; at least it knew the costs — and owning the site and controlling the source as a predictable source of hydroelectric energy. Cominco's vast developments in the Trail area are based on hydropower, which Cominco developed in the West Kootenay plants. Many of the power-intensive industries in Ontario and certainly in Quebec and some in Manitoba have developed that way. They were able to obtain a power site — perhaps a series of dams in a short section of river — and with their costs known and with a reliable supply of energy, they then were confident they could finance a processing plant or series of processing plants, and provide continuous employment. And they upgraded resources. They took minerals in concentrate forms and processed them; they took forest products and further processed them.

That hasn't happened in British Columbia in recent years, and the main reason it hasn't happened is that B.C. Hydro, has been inserted as the monopoly — the sole developer of hydro power sites, certainly the sole transporter and distributor or seller of hydroelectric energy. And Hydro, operating on a large scale, building very large projects, connecting them all up with expensive transmission lines — investing heavily in distribution also — has homogenized the hydroelectric resources of the province. The high-cost sources are mixed in with the low-cost sources. They're all connected together with expensive links, and the whole becomes expensive. As long as Hydro is permitted to charge one set of rates which apply from one end of the province to the other, and only one set of rates, those rates are going to be high rates. There are raisins in the cake, if I can draw an analogy, but we have not — the NDP did not certainly, and we have continued the practice — allowed particular sites which are low cost to be developed by a separate entity, public or private, to utilize the energy close to that site, where the energy is relatively low in cost, for particular developments.

Now there's an industry which we're losing to Manitoba right now — to an NDP province — polysilicon. The Japanese need polysilicon. They need 50 megawatts. They need energy predictably for 15 to 20 years, the life of a plant — a

[ Page 6542 ]

plant, incidentally, that would employ several hundred people continuously at high wages. They can get a rate and then can get a predictable source of supply in far-off Manitoba, but they can't from B.C. Hydro. B.C. Hydro is not able to quote what I would call competitive rates. Manitoba is able to quote something like 15 mills per kilowatt hour. The costs in British Columbia are high. The whole cost structure is homogenized. There is no way that Hydro can quote a price which is an average cost.

Now it should be possible for us to sell energy at a particular site that is close to the site — I'll draw an analogy, although it's not altogether appropriate: sell to a polysilicon plant at Revelstoke right next to a dam — and not charge all the costs of transmission and so on. That way you can attract industry into the interior, into the north, into areas where the raw materials exist.

We have a pricing structure, a corporate approach, which favours Vancouver. It favours the big city. It gives no preference in terms of power costs whatsoever to outlying areas. It takes unique power sites, which may be uniquely low in cost, and just averages them into this big total. We have, by deliberately telling the private sector that it can't develop a particular site for a particular project, deliberately first generalized the whole power structure and secondly made it at least equally advantageous to go to Vancouver to set up shop.

Now the one thing we aren't offering is a predictable source of supply over many years at a predictable price. Hydro's rates rise as its costs rise, and its costs tend to rise with inflation — certainly with interest rates — and therefore Hydro cannot really market the kind of energy that the Japanese, who want a secure supply of polysilicon, want.

It's about time that we as a government started to tell the Japanese and other people: "Look, if you've got an industry that is power intensive, we've got a few unique power sites in British Columbia." They don't have to be developed by B.C. Hydro. You might even have a subsidiary of B.C. Hydro develop them, but develop them at the uniquely low cost of that particular site. Attract these power-intensive industries to outlying parts of the province and give them a supply not only at a relatively attractive cost, but for a sufficient number of years to attract the hundreds of millions of dollars in investment which is involved. The Aluminium Company of Canada is at Kitimat because it has a secure source of energy supply all its own. Many people regret the contract that the province signed with Alcan back in the early 1950s, but the Aluminium Company of Canada knows what its costs will be. It isn't up against a utilities commission or someone else continually jacking its costs or prices against the new plant. So they are inclined to build a new plant because they have their own unique source.

If the province really wants to break out of this straitjacket, as it did with natural gas, it has to consider allowing private developers to develop certain unique Hydro sites, to do their own costing and have a predictable cost of energy.

[3:30]

HON. MR. ROGERS: In November 1983 the government changed its policy to allow private development of hydroelectric power in areas that were suitable but outside the B.C. Hydro service area. A couple of places come to mind that would fit that. One is a place in the far northwest called Moore Creek, which had been looked at by a number of companies. In fact, three electric utilities looked at it on behalf of various industrial operations. Another is the Homathko, which Hydro looked at in the past and ruled out for some considerable time in the future. One aluminium smelter corporation came to see me and looked at the possibility of developing the Homathko, of building their own power grid over to the Island and seeing what the possibilities were then of building an aluminium smelter somewhere in the Campbell River area. In both cases they want to get the Alcan kind of long-term security of supply.

I have great difficulty with abandoning the postage-stamp rate. You say that it favours Vancouver. If electrical rates were actually factored out, Prince George would have lower rates than Vancouver but the Island would have significantly higher rates. The smaller communities farther down the line would have considerably higher rates. Rural rates would be much higher than urban rates. It's certainly much easier to deliver power to a block of apartment buildings in the downtown core than to a group of farmers or ranchers stretched out over the countryside.

We've had the postage-stamp rate for a long time. I think it has served us in good stead. We have the ability, if companies are so anxious for power, for them to go ahead and build their own. Of course, a company that is building polysilicon can contract with Alcan. Alcan has surplus power right now, but it's difficult to see whether or not they would have sufficient surplus power to attract a company to Kitimat. I would have great difficulty finding out where to get on and off, or abandon that particular aspect. We know what the blended cost of electricity is for everybody. I don't think anybody actually would tell you what the real cost is per household. I suppose the people in Fort St. John or Chetwynd or Revelstoke or Shuswap would be paying the lowest rates just because of their proximity to the generating facility, but the accounting never has been done on that basis. It's been done on the postage-stamp basis, which I think is what we'll stick to. I think our policy really does accommodate a major company that wants to have secure long-term electricity, should they want to make that investment.

MR. DAVIS: I've stated that new capital is unlikely to come, particularly new capital aimed at creating a power-intensive industry. Unless the power rates are average or below average, the cost to that operation has to be seen as reasonable in a worldwide context. More important, of course, is the term, the length of time over which the company can assume that this cost of energy is predictable and will be reasonably stable. That's the magnet. That's what will attract industry.

If we're determined to homogenize all our costs and then just strike an average, which is perhaps the easiest thing in the world to do, rather than be selective, we'll always have very high power rates. Our terrain is obviously very difficult in British Columbia. Dams are expensive to build; you're normally damming a very deep valley and not putting a small berm across an immense area, as is the case on the plateaus in upland Quebec and so on, where the costs of dams are very low. Our costs, especially if you include transmission over our difficult country, are way out of line, very high. So okay, Hydro is the monopoly corporation. Hydro is up against these difficult, physical factors. Hydro inevitably has high average rates. There's no way, using Hydro as the agent, you're ever going to attract power-intensive industries to British Columbia. That's end of story. If you think that we should be processing some of our raw materials here, you've got to commit certain sites. They may be remote, and that

[ Page 6543 ]

takes a certain amount of political courage, but it's the only way you're going to decentralize some of the industry in this province, and the only way you~re going to process resources.

Now predictability includes the rate for water. Suddenly, a few years ago, the province discovered that it could jack up water rates and thereby progressively cut into what otherwise would be the profitability of power-using industries. There would have to be a fixed rate for water, also, in the contract. Otherwise the costs would run away simply because a particular tax would be introduced. So you have two wild cards. With B.C. Hydro, you have the Utilities Commission reviewing rates, finally swallowing all the costs, jacking the price. That happens annually or bi-annually. Then in addition you have the government — which for revenue reasons may decide it needs more cash — suddenly jacking the water rates. You're never going to get power-intensive industries that way. Obviously Manitoba has decided on a different course. Obviously Quebec has. They're getting power-intensive industries; they're getting the jobs, we're not. If we're wedded to Hydro, forget it.

MRS. WALLACE: I'm going to be changing the subject slightly. If the minister has any response, I would certainly yield.

I would like to ask this minister, as the minister responsible for energy in British Columbia, what his position is on nuclear energy. There has been ample evidence that the people of British Columbia and of Canada generally are opposed to nuclear power. In fact, a Gallup poll held just recently shows that two-thirds of Canadians are against nuclear power. I'm wondering whether or not the minister is prepared to give a firm commitment that as long as he is the Minister of Energy that will not happen in British Columbia.

MR. CHAIRMAN: Hon. member, are you asking for a future policy of government?

MRS. WALLACE: I'm asking the minister a question, Mr. Chairman.

MR. CHAIRMAN: If you are asking for future policy it would be out of order.

MRS. WALLACE: This is not question period; this is estimates.

I would also like to know what his position is on the moratorium on uranium-mining, as he is also the Minister of Mines. I believe that that moratorium is soon to expire, and I am wondering if we will see him introducing legislation — and now I may be treading on the rules, Mr. Chairman — that will extend that moratorium.

I have a grave concern, not just because the general populace is concerned but because of the difficulties that occur in the use of nuclear in the matter of waste and waste disposal. The cost is prohibitive; if you think Hydro is expensive — the major Hydro projects that the member for North Vancouver–Seymour (Mr. Davis) was just talking about — certainly nuclear is far more costly. It's costly in a lot more ways than just dollars; it's costly in the way of hazards. the dangers and the difficulties with disposal.

It's now been apparently proven without a doubt that there was actually a meltdown at Three Mile Island, even though it has been denied quite extensively. The Ontario people have had some pretty definite and costly problems at their plant, and I would hope that the minister would be able to advise us that we will not see nuclear power in British Columbia, nor will we see a reopening or allowing of uranium-mining. I would hope, too, that the minister would pressure his colleagues to accept a bill that is presently before the House to declare B.C. a nuclear-free zone. That is certainly a direction that would put to ease the minds of a great many people who have concerns for their own welfare and the welfare of their children and their grandchildren. I don't know if the minister has ever been involved with the Physicians for Social Responsibility, but I have attended both of the conferences that they held at UBC. I have the papers, which were incorporated into books, and I would certainly recommend them to that minister as.... Well, I won't say bedtime reading, because it's a bit....

HON. MEMBER: Heavy.

MRS. WALLACE: Yes, a bit heavy for bedtime. But I would recommend them to him for mandatory reading. If he were to read those documents and the papers that were presented to those two conferences, it might influence his thinking greatly as to the advisability or the feasibility or the survivability of nuclear arms and nuclear war. Certainly, when we're talking nuclear, we have to bring into that the nuclear power, because the same scientific research and the same approach is used to make power as to make weapons. One of the areas where Canada has been very remiss is in the export of reactors, theoretically for power production, which can well have been used, and have most certainly been used in some instances, I think, for the production of nuclear weapons.

I have a couple of other minor items, but I would like the minister's comments on those two.

[Mr. Strachan in the chair]

HON. MR. ROGERS: I don't have any difficulty answering the questions on nuclear power, but you asked about the period of time that I'm the minister. With our present hydro surplus, that's assuming that this government will be in power well into the next century, and that I'll still be the Minister of Energy, Mines and Petroleum Resources. I would hope to change portfolios in another five or ten years and go on to something else, just because, after a while, it's a good healthy thing to change portfolios.

Interjection.

HON. MR. ROGERS: No, you don't run out of energy.

The problem of nuclear power for British Columbia will probably be addressed by my grandchildren or perhaps my great-grandchildren. By that time, the whole world will have come to accept it or to to reject it. But I think the last place in the world that's ever going to have to face a choice of whether to go to nuclear power or whether the lights go out is British Columbia. With our abundant geothermal resources, our coal resources and our hydro resources, I just don't think that it's ever going to be a problem for B.C. Therefore we can be in a rather smug position about it.

I personally don't care for it. My personal feelings are that there has not been sufficient training of the operators of these things. I think there have been some problems. The

[ Page 6544 ]

American nuclear reactor system, which was designed primarily for use by the navy — relatively small reactors and relatively small ships.... Well, they're very large ships, but compared to the land-based reactor, relatively small. They were just multiplied by a factor of tens or twenties or something and made into land-based operations, and they haven't anything like the technological developments that the Canadian reactor, which is a more peaceful reactor, has.

They all have waste disposal problems. The Ontario ones have had a very good safety record, and a very good reliability record, but they're now having difficulty getting the new one finished. It's going to be very interesting to see what happens in the province of Ontario, with the NDP holding the balance of power and with the decision on whether to proceed with the nuclear power plant only weeks away.

I had a meeting with some people from Ontario Hydro the other day, and the decision is going to go to the chairman of the board of Ontario Hydro. I presume the government in Ontario will fall within a week. Therefore the new government will have a choice of accepting the recommendations of Ontario Hydro — I think after 42 years they'll be anxious to change the chairman and the directors of Ontario Hydro — and they're going to be faced with that problem very quickly. So your political cousins in Ontario are going to have a very difficult time supporting a government that's going to make a decision on whether to proceed past where they are on their next nuclear power plant. If they don't, they're going to have to make a major decision on building a new coal-fired generation plant. It's called Ontario Hydro, but hydroelectricity does not provide that much of the power in Ontario. An enormous amount of it's coal and a lot of it is nuclear.

Nuclear power has been a benefit to British Columbia in its unreliability in terms of our exports. The Trojan plant in Oregon goes down periodically, and of course the WPPS, which has caused such a nightmare in Washington state — and I wouldn't wish that fiscal nightmare on anybody — has helped us with some of our exports as well.

[3:45]

The other thing is the proliferation of nuclear power plants around the world. France is probably the leader in building nuclear power plants. Even with the change of government, they don't even bother going through the public hearing process, or they go through a public hearing process while the plants are under construction, which must be pretty frustrating for the interveners. France, the U.K. and the Soviet Union are the big generators of nuclear power — and that pretty well covers the spectrum of political ideals — and yet they're still all going full-speed ahead on it. Acid rain seems to be something you can solve a little easier than nuclear fallout. It seems to me that you can't solve nuclear fallout with a scrubber on the top of your stack, and you can solve the problem of acid rain with doing that. Nonetheless, that's another jurisdiction.

Your question on whether or not B.C. should be a nuclear-free zone would be best addressed to the Minister of Intergovernmental Relations (Hon. Mr. Gardom) when his estimates come up. There are not often a lot of questions during his estimates, and he is the man responsible. That's a responsibility of his ministry, and it would be inappropriate of me to comment on something that's his area of responsibility.

The uranium moratorium is not legislation; that's just a government policy. It has less than two years to go, but long before it is expired the government will have considered the ramifications of either terminating it or extending it, or extending it to a point that the next government can make a decision. But it has just under two years to go, so a policy decision will have to be made before 1987. I think there's ample time for cabinet and the government to consider that before that occurs.

MRS. WALLACE: I thank the minister for his remarks. I'm sorry that he hasn't been able to give me a firm commitment that that uranium moratorium will be continued.

The other comment I have relates to B.C. Hydro, and we were cut off by the clock last Friday. This has to do with staffing at B.C. Hydro. The last figures that I have are for 1982-83, which I believe was the last year that Mr. Olsen was employed by Hydro as the general manager at a salary of $125,000, according to this figure.

But I understand that Mr. Olsen was taken on contract, subsequent to his leaving the payroll. I wonder if the minister can tell me what that contract is and for how long. My understanding is that it almost doubled Mr. Olsen's salary, from $125,000 to $250,000 a year. I don't know if that's correct or not. I would also like to know what fringe benefits Mr. Olsen has. For example, does he get travel expenses, living expenses, in addition to the figure that we've heard touted — whatever the correct figure is — and does he have transportation? Does he get a car provided? You know, what are the terms of that contract? How long does it run, from when to when?

HON. MR. ROGERS: There was a board meeting at B.C. Hydro this morning, and Mr. Olsen is still at the board meetings and still the chief operating officer of the company. So you startled me when you said "when he was still with the company." He's still there now. He had 35 years of service with the company, originally with the B.C. Power Commission. and when he reached the period of time when he had maximum contributions to the pension program — this is quite similar in private sector companies — he had the option of retiring with full pension at, I believe, the age of 61 or 62. He must have started when he was fairly young.

The decision of the board of the day — and I wasn't on the board at the time — was to offer him a contract so that he could collect his pension, which he would be entitled to, and put him on a contract for the remainder of the time that he is to serve. I believe they gave him a three- or four-year contract, which would have brought him to a year past 65. I think that's correct. I'll have to get you all the details and, if you don't mind, I'll table them in the House or take it as a question, because I can't give you the exact numbers off the top of my head and we don't have someone from Hydro here today.

He is given an automobile. He operates as the president of the company, so to all intents and purposes he is retired and operating on a contract with us. I think that's about all I can tell you about that. He had reached his maximum contributions to pension, therefore did not want to contribute any further to pension and we don't require him to make pension contributions. We have him out on contract. I can get you all the details, and maybe if you ask more questions I can get it now.

MRS. WALLACE: Well, yes, if the minister will get me the details as to the terms of the contract and the per annum payment, and also the car: what kind of a car is it, and at what price. I understand that the car that Mr. Olsen was driving has

[ Page 6545 ]

been put up for bid, and it was a very low mileage and a relatively new car, so I'm wondering why that car was sold if in fact he still is provided with a car. So I'd like the details on the new car, and also what happened to the old one, why it was disposed of if in fact he is still there and still needs a car. I would thank the minister for bringing that information.

HON. MR. ROGERS: I'm sure it's a more elaborate car than the one I drive, but I'll find out the information for you.

MR. COCKE: I note that B.C. Hydro is laying off engineers, and generally cutting back on their overall direction. There's no question, they're not building dams. Nor are they needed at the moment particularly. I've always had a tremendous interest, living on the west coast of Canada and just this side of the mountains, in geothermal power. As a matter of fact, years ago I talked about it, and subsequently there was some work done in Hydro.

I'd like to ask the minister what they're doing about their Pemberton experiment at the present time, and how far they've gone, and when or where they'll be doing any more of that kind of work. I think it's quite important that while at the present time we have a surplus, there will be a day when we'll be faced with the need for alternatives. Certainly the alternative of geothermal, in my opinion, has a tremendous advantage over many of the other alternatives and, for that matter, over damming up river valleys. I just wonder if the minister has anything to say about Pemberton.

HON. MR. ROGERS: The property you refer to is near Pemberton; it's called Meager Creek. We spent $26 million on this particular project, putting in the test wells. You put a Christmas tree on it rather like you have on an oil well; it's a step-down procedure. They brought in a turbine and tried it for a while. The particular geothermal resource we had in the province wasn't particularly reliable. I guess there was some geological discussion about the structure of this particular geothermal resource; and, in fact, we were prepared to seal it up for the present time. The costs were not.... When we entered into this geothermal thing, we were looking at energy costs going much higher than they are today. With our current surplus, we are just taking the information that we have and holding it.

The resource, however, has some value in the intermediate term. We have asked interested proponents who would like to either run a hot-house operation or a hot springs operation with this particular resource to submit proposals to us. One company is looking at doing a greenhouse type of operation, another person a Japanese spa kind of place. Again, of course, they all need road access, and they all want the Ministry of Highways to build a road in to their resource if we were to give it to them. B.C. Hydro is canvassing the ministries of government that may have an interest, Agriculture, Tourism and Economic Development, to see what interest they have in the resource that we have there at the time. The rest of the equipment has been removed. And the information is kept on file at B.C. Hydro. But at the present time we don't need it.

MR. COCKE: Mr. Chairman, I see what's happened: there's no need for that power at the moment. I was wondering just what the experiment did in terms of Hydro's feeling towards geothermal power for the future. Did that $26 million provide us with significant evidence that it's going to be a good or a useful alternative in the future? Were they able to experiment with the corrosion of turbines and that sort of thing? What really came out of it?

HON. MR. ROGERS: Yes, as a matter of fact, that's one of the things they discovered, that we did have a fairly serious problem with corrosion. But on a more important note, the reason that geothermal resource in the United States has become so fascinating is the legislation the Americans have, where utilities must buy power from any new supplier, at utilities-avoided cost. So you have some geothermal resources and, of course, much higher power costs in the PG&E service area, and more abundant and closer-to-population geothermal resources. So that's the reason that it's done there.

I guess you have to put a lot of the stuff that Hydro does down to R and D and exchange information. Utilities aren't terribly protective about all of their information that they gather. It probably wasn't the very best investment we made, but I think we know an awful lot more about geothermal resources in British Columbia should the time ever come that we're going to have to go ahead and develop them. The R and D people have been very much involved with the engineering people, and they have all the data that was there. I don't know that I can answer much more than that.

MR. COCKE: The one other alternative I would like to ask the minister about.... Hydro at one time was also experimenting with wind power on upper Vancouver Island. How is that going?

HON. MR. ROGERS: It charges the batteries for lighthouses — these small, remote lighthouses. The rest of it just has not.... Where we have consistently strong winds, we don't have the population base, or in fact any kind of load, to support it. Don Quixote, I guess, is right in a way. There is a world full of windmills for alternate energy sources that are placed, and not an awful lot of them have been successful in terms of generating electricity. The Hawaiian Islands have had a few experiments that have given some very modest returns. And they have exorbitant power rates in the Hawaiian Islands; even there they have abandoned them. So within our service area, with our relatively cheap costs of hydroelectric power, it doesn't make sense. It does make sense in some places as an alternative to diesel, but in those areas they are relatively sheltered from wind because they are places on the coast, for example, like Shearwater and Waglesla that really don't have.... The whole settlement is built in a niche in the coast somewhere where the wind doesn't blow, because that's the safest place for the community to exist. I don't see it happening for some time to come. It still would appear to be cheaper to run remote diesel, even though we do run them at quite a subsidy.

Vote 22 approved.

Vote 23: resource management program, $20,970,041 — approved.

Vote 24: British Columbia Utilities Commission, $1,436,210 — approved.

Vote 25: Fort Nelson Indian band mineral revenue-sharing agreement, $3,325,000 — approved.

[ Page 6546 ]

The House resumed; Mr. Ree in the chair.

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

HON. MR. NIELSEN: Second reading of Bill 51.

COAL AMENDMENT ACT, 1985

HON. MR. ROGERS: In moving second reading of Bill 51, Mr. Speaker, I would perhaps remind the members that this legislation could be called housekeeping. But I'm not really sure that's correct. I think if I'd gone back and looked through the Journals of the House, which I have done, and seen all of the coal legislation that has existed since this province was the union of the Island and the mainland.... There have been amendments to our legislation dealing with coal, and this in 1985 follows along in that way. It is, however, best probably described as a spring-cleaning of the Coal Act, which has been needed for some time. The last series of amendments to the Coal Act occurred in 1974, and then in 1978. It included, among other things, increased work requirements, increased reporting requirements and increased government control; in other words, I think, increased paperwork and red tape for industry to cope with.

[4:00]

Since the time of these last amendments, conditions in the world markets have changed. British Columbia's coal industry is under intense competitive pressure, and the Coal Act is not meeting the province's objectives for managing our coal resource. This legislation redesigns the Coal Act so it can do what it's supposed to do to encourage new development and make the province more attractive to investors.

The Coal Amendment Act contains several significant changes. In a general way it reduces the overregulation which has been costly to both industry and government. It removes government intervention in areas that are most effective and leaves those to the marketplace. More specifically, it ends the statutory work requirements, which are not necessary for the management of our coal resources and which have been a burden to the industry. The coal industry makes its investment decisions on the basis of what's happening in world markets, not as a result of the nuisance value of work required by law. In fact, the act defines areas where a free miner may enter and explore and develop coal. It establishes a mechanism for settling disputes between property owners and holders of coal tenures through a mediation and arbitration board. It also provides significant improvements in the tenure for holders of coal leases. It ensures that all sections of the Coal Act dealing with revenues and fees comply with Treasury Board directives, and it opens the way to improving the return to the Crown from coal lands and rentals.

The end result of these amendments will be to enhance the economic exploration and development in British Columbia. To begin with, the front-end costs will be reduced, which should be of particular benefit to the small resource companies, Also, industry will be able to tailor its exploration expenditures to respond to market forces and not to government requirements. This legislation, therefore, will allow industry to operate more efficiently and more competitively, and will also allow the government to operate more efficiently. It will increase the returns to the province from its coal resource and, most importantly, it will act as a signal that British Columbia welcomes investment in its coal resource.

As a closing remark in second reading, as I move second reading, I might point out that it would take a container to ship the documentation required from some of the companies just to Victoria. We have neither the staff nor the requirement to read an entire container-load of reports. We can get by quite a bit without it. I bring the act forward now in an attempt to try to facilitate those people that are acting as operators in the coal section of the province. I move second reading.

MR. LOCKSTEAD: It's quite a busy day for our interests and activities in this Legislature. Some days it goes like that, don't it?

Anyway, Mr. Speaker, we do have some questions to ask on the bill. I might introduce.... Unfortunately, because of our activities here today, I have just met very briefly with Mr. Dick Marshall of the Coal Association of Canada, who is in the gallery, and I ask the House to join me in welcoming him.

We've had the opportunity of discussing some aspects of this proposed legislation with Mr. Marshall, and it's our understanding that the ministry has consulted with the people associated with the industry regarding this proposed legislation. However, I do have a few questions, and I might add that I'm a bit dismayed that the legislation was just introduced quite late last week. That really gave us very little time to probe the bill in depth. Last but not least, it's the kind of legislation that's better discussed in committee, as pertaining to the many sections of the bill. This bill and the next one are much the same in that sense.

I won't get into section-by-section questioning of this bill at this point, but according to this bill, the Mediation and Arbitration Board will settle disputes. My question is: who previously settled disputes with regard to surface rights, and why this change?

According to this bill, a licence can be disposed of or transferred without the minister's approval. What does the term "disposed of" mean exactly? Why has the minister decided to allow companies to do this without submitting any kind of documentation as to why they're doing it, or what they plan to do with the land?

This bill also repeals a fee which had to accompany the request to dispose of a licence. How much did the Crown collect last year from this fee? Or any year? And what will this change mean in terms of lost revenues?

The bill replaces the coal administrator with the chief gold commissioner. Why this change? What does gold have to do with coal? Nothing, as far as I can see. What happens to the coal administrator?

Another part of the bill deals with applying for a licence to explore and develop coal. The mining company will now, according to this bill, only have to submit an application fee and a plan describing the location for which they want the licence. No plan of operations is required and the application will not be published, so objections cannot be received and dealt with. This speeds up the whole process of granting licences to explore and develop coal. But there's a question to be raised. The people of B.C. deserve to know what plans are being made for the coal resources which they own. Look what happened to northeast coal, when decisions were left entirely to private companies and an untrustworthy government which is closely tied to big business. They brought in two huge coal-mines at a time of declining demand for coal. Prices and volumes have now been cut, provincial revenues have been affected, over $700 million of taxpayers' money

[ Page 6547 ]

went into it, and they didn't even get the hole in the right place. And I'm sure you're going to hear more about that in a few minutes — or maybe you won't.

Mr. Speaker, this bill makes it easier for mistakes to be repeated. In extending a licence, a portion of the act is now being repealed, so that now no proof will be required to show that work is actually being done in an area held under licence. I know that there has been some discussion and some difference of opinion on that particular section, but we'll deal with that when we get into committee stage. A licence can now be held by a company and then automatically extended, without anything having happened to that land.

The application procedure for a mining lease is also being changed. Under this bill there will be no publication of the application info in the Gazette. It's my understanding that government publications issued from the ministry will take care of this particular matter. That is not good enough. Those of us who work and serve in this Legislature and have quite close ties with many ministries, if not all of them, all get the Gazette, but we are not privy to many of the publications that come out of various government agencies. Certainly people living in remote communities and even local newspapers.... What I'm saying is that unless these items and the government's intentions appear in the Gazette, we have no notification.... It's not only us but also the general public out there — smaller communities, environmental groups which may have a direct interest in the opening of a location of an operation or whatever. So how will we know? What plans are being known to develop our coal resources? In any event, there are a few questions for the minister in second reading, and I don't know if anyone else has anything to say. Apparently not, but perhaps the minister could respond.

MRS. WALLACE: Mr. Speaker, I don't think we should let this bill go through just like this. Here's another example of centralization of power in the hands of cabinet, once again putting the decision-making power in the hands of a minister without public hearing, without advertising — just concentrating it in the hands of the minister. It's just one more example of how this government is moving in their autocratic way of taking control of everything in this province.

Certainly when you're dealing with any of our resources, you cannot look at them in isolation. You cannot develop one resource in isolation from all the other resources or from the impact that the resource has on the general state of the surrounding area, be it environmental concerns, fish and wildlife concerns or recreational concerns. You can't just set that aside.

Here we are: no public hearings, no advertising, all in the hands of the minister. I don't like that, Mr. Speaker, and I don't think the people of British Columbia like that. I just can't speak strongly enough against going in this direction, because it is just one more time that that's what we're doing, and it exemplifies that this government is determined to get everything under their thumb, everything under their control — little dictators, autocratic. That's the direction. This shouldn't go through without people recognizing that that's what this bill is all about.

They always come in as housekeeping. I've seen that happen so many times. This housekeeping seems to mean that what you do is just take away the public participation, take away the powers of the Legislature, put it all in the hands of cabinet. That's the direction we've been seeing happening right down the road for the last.... Ever since I've been in this House that has seemed to be the direction this government wants to take — single-line bills with everything spelled out in regulation under the orders of the cabinet and nothing dealt with on the floor of this House.

Again, here's a bill that has come in — I'm not sure when it was introduced, but I think it was probably Thursday. We've had two days to look at it, on the pretence that it's just housekeeping, and we're supposed to be up here debating it. That certainly hampers the ability of all members of this Legislature to be able to deal with a piece of legislation adequately.

I don't want to keep repeating it, but that's what the bill does. It wipes out public hearings. It wipes out any kind of multi-use concept. It wipes out the idea of evaluating anything except the mining interests, and it puts it all in the hands of that minister behind closed doors to make those decisions. I object to that very strenuously.

[Mr. Strachan in the chair.]

MR. WILLIAMS: Mr. Speaker, I think the points made by the previous two speakers are worth considering. It does seem clear that at the initial stages at least it’s an easier ride for the corporations. I don't think there's any doubt about that. In terms of requiring the delivery over a period of years, in terms of performance on the part of the corporations, that's not there. That was spelled out fairly clearly in the previous statute. It blows me away to see that ministerial approval is not required with respect to the transfer of these privileges.

What we're talking about here is a system that is going to allow these guys to get in there and then flip the licence. That's the way it looks to me in terms of the benefits here. There's nothing there, and it eliminates restrictions on private royalty arrangements. Well, that's pretty neat too.

[4:15]

It seems to me that royalties are essentially what is due the Crown as the owner of the resource. What we're doing here.... Again, you've spent a year with all of your various staff people working with the industry, and you drop the bill before the Legislature and we have it before us within a day or so. That's not a very satisfactory arrangement.

It really does make it easier for the companies in the initial stages. It appears to make it very easy for them to nail down the reserves. Coal isn't, as we all understand it, like these other minerals. We know where coal is in British Columbia. This isn't a matter of looking for molybdenum, silver, copper or the other minerals. These are areas that we know now. We know where our coalfields are, as I understand it, in British Columbia.

You know, it's one thing to argue in the regular run-of-the-mill mineral legislation that there's a finder's advantage, because they've had to put all this effort into finding the other minerals, but in coal that isn't the case. What we're doing here is making it easier to stake out territories that we already know are there. It makes it less costly, or at least lets them move the costs around so they don't have to put the bucks down the way they did before — to nail down our resource and then satisfy themselves when the markets are there that they're going to get active and do something.

That's a neat kind of flexibility, but it strikes me as terribly one-sided, i.e. benefiting the guy that's going out there and nailing down a piece of ground. Maybe the minister can allay our fears to some extent. I hope he can. To remove the

[ Page 6548 ]

restrictions on private royalty arrangements only reinforces this fear that I have that these people can come in, stake the ground, not put up very much, and end up with control of the resource in the better market times down the road. It's a fairly neat arrangement for the corporations. I can't blame them for wanting it. But what kind of government do we have in terms of protecting the public interest if they swallow that one whole?

HON. MR. ROGERS: Perhaps if I address the comments in reverse order. To the member for Vancouver East, one of the things we're going to do in this: when we reduce the work requirements, is also at the same time.... There is a fee for holding a coal licence. After you've held it a certain amount of time, the cost of holding that licence escalates quite rapidly. In fact after five years.... The large companies could afford to do the work requirements, especially if they're large multinationals. They don't have any problem if the government required them to do a certain amount of work; they'd go out and do a certain amount of work. The people that were hurt were actually the relatively small — when you're talking coal mining companies, you're talking relatively small — nationals or British Columbia companies. Really, those are the people we're trying to assist, during that period of time when there's no call for them to be out in the international market. Where the markets are telling them not to spend money, to hold back, I don't see that there's a necessity to force them to go out and do work.

The coal companies are required to file a notice of transfer with us. In the past the minister had to give his approval. Ministerial approval had never been refused before. The coal companies found it to be just an unnecessary impediment and we saw no reason why we shouldn't remove it.

The member for Mackenzie introduced Dick Marshall. I'd like to say hello to him as well. I appreciate the fact that he came here to watch the progress of this bill.

Mediation and arbitration never happened before. We did not have a mediation and arbitration board. Such disputes were therefore settled in the courts, eventually. It took a great deal of time to settle those particular disputes.

He asked why the gold commissioner and what happened to the coal commissioner. The position of coal commissioner is a very junior one within the ministry. It's a clerical position. By having the gold commissioner, while his title is gold commissioner, the position is very greatly enhanced from that of the coal commissioner. Within the established bureaucracy, the gold commissioner is quite a powerful person. In fact, it gives a greater emphasis on this particular piece of legislation.

The member for Mackenzie asked about plans which are no longer required to be submitted. Well, as a matter of fact they are required to be submitted under the Mines Act. That's why we're taking out that particular section. It was a duplication of work. We require a plan under the Mines Act and a plan under the Coal Act. We had to drop one of them. Every mine has to put one in under the Mines Act in any event, so we went ahead and did that.

We still require the escalating royalty under licence extension, as I mentioned earlier, and of course a report has to be filed on all their geological work.

The member for Cowichan-Malahat (Mrs. Wallace) brought up the fact that there's no public involvement on the issuance of a lease. Only on a lease for a coal-mine was there ever even a requirement for publication. For all other mines, when they apply for the licence, if it was a copper mine or a molybdenum mine or an asbestos mine, there was no requirement. This was a redundancy within the legislation which has been corrected. Of course, public hearings can take place and should take place more appropriately under the Environment Management Act.

I move second reading.

Motion approved.

Bill 51, Coal Amendment Act, 1985, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: I call second reading of Bill 52.

NATURAL GAS PRICE ACT

HON. MR. ROGERS: It's my day, Mr. Speaker. Since the creation of the B.C. Petroleum Corporation in 1973, the pricing of natural gas in the province has been set by cabinet. It has been left to cabinet to establish both the wellhead price, which determines the producer netback, and the wholesale price, which is the price at which natural gas is sold to the domestic utilities such as B.C. Hydro, Inland and PNG.

This pricing agreement has not worked efficiently. In recent years, it has led to protracted delays in increasing wellhead and wholesale prices to the extent that domestic gas consumers have been subsidized out of the revenues from natural gas exports to the United States of America. Also, under that system BCPC was the only buyer and seller of natural gas in the province. The Petroleum Corporation bought gas from the producers and sold it to Westcoast Transmission, which then enjoyed another monopoly situation as the only marketer of our natural gas. As a result of these monopolies and the lack of flexibility in domestic and export pricing, there has been very little incentive for aggressive marketing of our natural gas, either in this province or in the United States.

Furthermore, British Columbia was failing to provide a significantly high return — high level of netbacks — for the producers to keep drilling rigs in this province. Rigs started moving to Alberta, where the petroleum industry was getting a much better deal. Because of the industry's and my ministry's concern about the state of our affairs, a task force was commissioned in 1982 to look into all aspects of gas marketing administration. That task force was led by the preeminent expert in natural gas matters in Canada, Dr. George Govier.

The Govier study involved extensive dialogue with the petroleum industry, with the utilities, with the major industrial users of this province and, I might also say, with the public. Dr. Govier brought in his report in 1983, and it was reviewed by the government in August of that year, and then it was made public along with the government's decision to accept most of the report's recommendations. A further dialogue ensued with the key players. This was followed by another cabinet review and a decision to implement several additional Govier recommendations. The sum total of these policy decisions was the new natural gas marketing and royalty system that restructures the entire financial framework for this province's natural gas industry.

[ Page 6549 ]

Now we have brought forward the legislation required to implement these decisions. The Natural Gas Price Act, together with the consequential amendments to the Petroleum and Natural Gas Act, will complete the job that was begun in 1982. The overriding theme of this new marketing system is the reduction of government's regulation of the natural gas industry, giving the private sector a chance to operate more freely; in other words, getting market forces to prevail as much as is practical.

How do we go about doing that? To begin with, BCPC and Westcoast Transmission both lose their monopoly positions in buying and selling and marketing of natural gas, while provision is made for the protection of the Petroleum Corporation on its take-or-pay commitments to existing gas contracts. The door is now open for direct negotiations between gas producers and gas purchasers. In recent months, direct sales have been authorized between producers and buyers for the western LNG project and for the petrochemical industry in this province. Also, some minor short-term gas contracts have been negotiated between B.C. producers and American purchasers. The system has already begun to work.

What then becomes of the Petroleum Corporation? BCPC becomes capable of taking an active role, along with Westcoast Transmission, in the marketing of our natural gas both at home and in the export market. B.C. Petroleum Corporation also continues to manage its contracts with producers, although these contracts will be renegotiated to remove the expensive take-or-pay commitments.

I'm advised that the producers are prepared to go along with this process. In fact, I was involved personally in those negotiations. What else does this legislation do? Well, it allows the implementation of a wholesale pricing regime which brings a much needed element of predictability to gas pricing, which will allow the province partial or even full deregulation of gas pricing when the national and international circumstances make it advisable. A new royalty system will be set up under the Petroleum Natural Gas Act which will allow the province to collect rent from all natural gas produced in B.C.

This rational and predictable royalty will be a great improvement to an old system which depended on pricing regimes set spasmodically by cabinet in which revenue was collected indirectly through the B.C. Petroleum Corporation. Together these pricing regimes and royalty systems are designed to improve the netbacks for the producers, which is vital if we are to encourage exploration and development in our gas fields.

The Natural Gas Price Act covers some very complex issues such as managing the flowback to the producers from premiums on export sales. However, principles embodied in the bill are easy to understand. We are reducing the government's involvement in the gas industry, and letting the market forces prevail as much as possible. We are encouraging the private sector to become more competitive and aggressive in marketing British Columbia's natural gas. We are giving the producers higher and more predictable netbacks — not as great as they are in Alberta but nonetheless closing the gap.

We are decreasing the financial risk to the B.C. Petroleum Corporation and giving it a new role as a marketing agency, and we are increasing gas revenues to the province through a rational, market-responsive system of direct royalties. It's a fundamental redesign of the way the province deals with its gas industry, and I'm confident the system put in place by this legislation will be a potent force in the revitalization of this industry. Mr. Speaker, with that I move second reading.

MR. D'ARCY: Some of the ground in this bill was covered last Friday in estimates, when we discussed the Govier report. In his remarks the minister used some strange choices of words. The title of this bill could well be amended to Natural Gas High Price Act for British Columbians and Low Price Act for Competing Buyers in Other Jurisdictions, because that's what it does.

The minister very interestingly says: "Well, the government is getting out of regulation." The bill allows him — and the Govier report recommends that to the government — to regulate the price up to 65 percent of petroleum. Now if petroleum does not drop over the next few years, it's going to mean an 80 percent hike over the next five years in the price of natural gas to domestic users. An 80 percent price hike by government edict and the minister somehow wants to tell the House and the province of B.C. that the government's getting out of regulation.

[4:30]

He suggests that because Dr. Govier had some discussions with some of the players, they all agree. Can you imagine an industry in this province which requires for its ability to remain competitive or even stay in business...being happy about an increase of 80 percent over four or five years? Can you imagine a home consumer or a commercial building consumer being happy and telling Mr. Govier and the minister they really want an increase of 80 percent? Can you imagine a utility — and there are, what, four or five private utilities marketing gas, as well as B.C. Hydro, a public utility...? Can you imagine Inland Natural Gas, Pacific Northern or Columbia, or Hydro, being happy about that kind of a price hike to their customers? I really doubt it.

The minister said: "Oh, this is wonderful, because it's going to give predictability." Well, it sure as heck is, Mr. Speaker. It's going to give predictability that the price is going to go up. Everybody is going to know that. It's predictability that the minister is going to sell high domestically in British Columbia — another revenue grab and a further depressant to the B.C. economy. But he's going to give everybody the option of selling in the California, Washington and Oregon markets — western North America, or wherever the gas can be delivered — at whatever price our American friends are prepared to give. It's the same idea as we see with electricity. Domestic people, who should be able to use that precious resource to lever our economy into a better competitive position.... Instead, the minister is prepared to allow many sellers to virtually give it away to give other jurisdictions a competitive edge over us in terms of their industrial strength.

Sure, increased export sales, are going to increase government revenue. I say "sure"; I hope increased export sales are going to increase government revenue. But what about the revenue from the B.C. economy? What about the revenue government gets from people in British Columbia who are working, who are not on welfare? What about the revenue government gets from viable British Columbia businesses and industries employing people and paying revenue to the provincial and federal governments? You're going to need a lot of revenue from export sales, Mr. Minister, to make up those losses in revenue and to make those social service

[ Page 6550 ]

payments which the government will have to make to keep people from starving to death in British Columbia.

I am disappointed that during estimates not a single one of the seven Socred members from the southern interior or the six from the north got up and saw fit to defend their constituents, their businesses and their home users against this revenue grab and these price hikes being put through by the minister. I'd love to hear them at some point on this bill, but I doubt that I will. Not a single one will stand on his feet in this House and defend his constituency against this kind of revenue-grabbing by the Victoria government.

[Mr. Ree in the chair.]

The minister says that this is a wonderful bill because it has increased the amount of drilling activity — so he says. But he cannot give us any evidence that drilling activity wouldn't have increased anyway, that the export markets wouldn't have increased anyway. One thing we know for sure is that domestic markets for natural gas are hardly likely to go up under the rate structure which the minister is proposing through the Govier report.

Mr. Speaker, over the years there has been a large amount of revenue from the sale of natural gas to the Crown in B.C. I don't particularly care how that revenue is collected, but I hope that the government continues to collect revenue, and if the price is going to go up by what the minister wants to raise it, the revenue to the Crown had better increase by a large amount.

However, no amount of resource revenue to the province of B.C., however it's collected, from whatever natural resources, is worth depressing the economy for, putting people out of work and making British Columbia a more expensive place to live or a more expensive place to do business or manufacture a product. We have half a million people in this province on UIC or welfare, and the economy needs all the help it can get to get moving again and provide employment opportunities for those people. The government's attitude is to increase the prices of basic natural resources, the very natural resources that have the potential to give us a competitive advantage and get our economy going again.

So I'm very disappointed in this bill. I'm very disappointed that the minister and his cabinet colleagues, after all this study — and he and his predecessors had the Govier report long before it was released to the public — have seen fit to bring in a bill which is only going to depress the economy of British Columbia even more than it is and place a hardship on all consumers of natural gas, whether they be industrial, commercial or residential.

MR. WILLIAMS: It should be retitled — I guess we could debate that under third reading — Natural Gas Price Act. But it guts the corporation that has turned in tremendous revenue over more than a decade. It guts the B.C. Petroleum Corporation in terms of its fundamental role. The BCPC was established over a decade ago and has provided, if my memory serves me right, something like $2 billion in revenue to the province of British Columbia. Your office boys can check out the numbers, but it's something like that: a tremendous amount of money, under a system that has been very beneficial to the people of British Columbia. It provided such a huge revenue that we could indeed subsidize natural gas consumption in the province, so that we didn't have the problems of the people in the Maritimes; so that we, in our cold winters, didn't face the same problems that they've had in other parts of Canada. That provided cheap energy for British Columbia and British Columbians. It was a tremendous success. What this does is gut it. What it does is guarantee, as the member for Rossland-Trail (Mr. D'Arcy) says, that local people will pay more. We can count on it; it's inevitable. You're not going to be getting the returns that you got before, so the subsidy will be more painful for the government coffers. I think it follows as night follows day.

The justification for all this is greater production and new plants and new operations. But why don't we look at the kind of stuff this minister has been doing over the last year in this particular area? When you see a government squeezed for revenue, and then it brings in a program that will mean that we move this natural resource faster; that is, an asset that has a considerable value, one wherein we will end up providing cheaper gas in various ways.... A good example that one could look at would be Ocelot up in the northwest. Look at the games that have gone on there, in terms of that operation. We've ended up being a banker for the corporation. What did we lend them through BCDC — $40 million? Something like that. So we've ended up being a banker, in order to try to get a project moving. Then we allowed them to get out of the BCPC contract. Let them out of the contract; let them get a sweeter deal, because they're getting the cold pressure from the Japanese. It sounds a little bit like northeast coal.

It's a matter of forgoing Crown royalties and revenues in order to help move the private sector quickly in what are apparently non-market situations, or difficult market situations. So the squeeze play begins. All of this is to accommodate that squeeze play to some extent. One might buy these ideas, in terms of forgoing Crown revenues, if they were really producing all the jobs that we'd like to see now. But this latest one, in terms of Ocelot, is.... How many employees in the new ammonia operation? Ten to fifteen jobs.

Interjection.

MR. WILLIAMS: You, Madam Member, don't have a clue as to how much the subsidy is — $75,000 a year subsidy for jobs.

DEPUTY SPEAKER: Order, please. Would the member please direct his remarks to the Chair.

MR. WILLIAMS: I could indeed apply them to the Chair, I'm sure, Mr. Chairman, and to a good many backbenchers.

But there you are. In that one operation alone, in Kitimat, the new expansion in terms of ammonia: $75,0000 a job, just in terms of sales tax, property tax and related concessions. That's just one side of it. We allowed them to get gas under new arrangements, at how much less? How much forgone revenue to the Crown? That's the kind of thing you're getting yourselves into. It would appear to be only the beginning, in terms of this kind of process. The revenues the public was getting before, through BCPC, were considerable. But now you're opening up the prospect for these various arrangements in terms of these new programs. It makes northeast coal look modest in terms of its cost per job.

What kind of sense does that really make? As soon as you start applying interest rates and taking a broader view of these questions, one really does wonder how much we're forgoing

[ Page 6551 ]

for these jobs. It looks like monumental amounts of dollars. In your May release you say that this year alone the two tax measures will be worth $750,000 a year to the new operation. Those two tax measures will be worth $750,000 a year for ten employees. You've forgone in that one operation $75,000 a job. What do the employees get? The average industrial wage is probably $25,000. Does that really make sense? I know there's the initial construction jobs, but they're not monumental.

In terms of what you're forgoing in terms of trying to achieve some apparent action and immediate benefit. It looks like a strange economic equation. The prices there are something around $1.15, I think, in terms of the new arrangements between producers and Ocelot versus our export price currently to the United States of something like $4.35. Let's look at that. One producer gets a deal at $1.15 and we're getting $4.35 somewhere else. It's an interesting flexible pricing arrangement we've got here, but what does it mean in terms of forgone rents, forgone revenues and future jobs for British Columbians?

You've been willing to take a bargain basement approach to dammed near everything you people do. In order to get something going now to cover up previous incompetence, you're willing to forgo incredible amounts of revenue. That kind of difference sure needs a lot of explaining. It would be $1.15 there at Ocelot — pretty neat — and they're still getting squeezed by the Japanese. Another rate for the homeowner in British Columbia. It means a great loss to the people of British Columbia. The industry has done extremely well under the new federal-provincial agreement, and this ensures that they will do even better.

I'm not at all satisfied that there has been the kind of thoughtful analysis at the provincial level to make sure that our long-term future in this field is assured. There might well be short-term quick benefits, but the question of longer-term returns to the Crown looks pretty dismal indeed.

[4:45]

MR. LOCKSTEAD: Mr. Speaker, I felt like getting up on this bill because it deals with matters we were talking about earlier today under your estimates. It's a bill along the same lines as the western accord. Once again the bill means mainly windfall profits for a few large oil companies. The B.C. Petroleum Corporation was set up by a good New Democratic government to collect the rents for the people of B.C. from the natural gas resource of the province, which they own. Since 1973, the B.C. Petroleum Corporation has returned over $1.8 billion into the provincial treasury. By 1986 this would reach, as my colleague from Vancouver East pointed out, about $2 billion.

The question has to be asked: why is the government killing off the B.C. Petroleum Corporation? To me, the answer is pretty obvious. It's another example of the government moving to privatize viable government operations for a purely ideological reason. I can quote a number of examples: Manning Park, the general insurance operations of ICBC, and on and on. The oil companies wanted to take over the marketing of natural gas. They communicated this to the government, and the government acquiesced. No problem. This began in September 1983 with the Govier report.

We go into some natural gas pricing here, but let me give you the bottom line. The price now for residential customers is about $4.49 per thousand cubic feet. That will increase to $8.09, according to our figures, by the year 1990. This represents an 80 percent increase over seven years.

I would very much appreciate it if some of the government members would get up to defend this bill; I really would, particularly the interior members. I have in my files, which I don't have in front of me at the moment because the bill was called rather quickly, copies of correspondence from various mayors throughout the interior — primarily Prince George — who are very much opposed to a further increase in the price of natural gas to their areas. Not only do the homeowners depend upon this source of energy to heat their homes, but business prospects in those communities, the mayors feel — particularly the mayor of Prince George — will be seriously impaired.

Anyway, what guarantees are there that this giveaway to the companies will result in job creation? I know we went through this chapter and verse earlier today regarding the western accord, but let's do it again. Why not? We've got lots of time. That's what we're here for. I suggest it will just lie in the pockets of the big oil companies while increasing heating costs for the ordinary B.C. customer. It will also impose onerous burdens upon northern residents who have high heating bills, and stifle development there, as I just mentioned.

I believe as well, Mr. Speaker, that the forest industry stands to be hurt from increased gas prices. I have quotations here from various newspaper articles that have appeared, some recently. I'd like to just quote this one paragraph that appeared in the Vancouver Sun on June 7, 1985. This says: "Rogers said the market-sensitive legislation should increase B.C.'s gas revenue and give producers higher and more predictable returns." I couldn't agree with you more, Mr. Minister. It certainly will give the producers higher and more predictable returns — moneys that they can take out of the province and invest in all other parts of the world, usually in the United States.

MR. DAVIS: I support this bill because it makes it possible for the first time to have a petrochemical industry in this province. I support it, in other words, because it will provide new industries and more job opportunities.

Historically, the main reason that we haven't had any gas intensive industries in the province, that we've used natural gas primarily as a source of heat in homes and industry, is that the price has been too high. The opposition is making a great deal out of the fact that the price which petrochemical firms will pay will on the average be less than the bulk price which other consumers have paid in the province. That really is the pattern in other parts of the world where there are petrochemical industries.

What this legislation does is allow an industry.... This could apply to forest industries. A pulp mill, for example, if it wants to increase its consumption of natural gas, can go to the field now; as petrochemical firms can go, it can go to the source. Assuming there's a willing seller, they can buy gas. We've got lots of surplus gas in northeastern British Columbia. It can buy gas at a price which the owner of the gas is prepared to accept. That is not the present high average price which the B.C. Petroleum Corporation, a corporation owned by the province and set up by the NDP, pays. The Petroleum Corporation, if it pays a different price to a supplier, has to make the same price available to all other suppliers. If it were to pay a lesser price to some supplier in order to supply a new industry, it would have to reduce payments to all other firms

[ Page 6552 ]

— that is, to comply with the legislation — and that is not acceptable, because it has firm contracts with all the other suppliers.

But a firm interested in, for example, setting up a fertilizer plant in Vancouver can go to the field now and find gas which is surplus, which is otherwise closed in, that will not otherwise move, that could produce jobs but won't produce jobs if you follow the reasoning of the second member for Vancouver East (Mr. Williams). The fertilizer company can purchase that gas on a long-term basis with the price escalation known, the quantities known, and then it can finance its plant. It also is assured of a predictable cost of transportation, because Westcoast Transmission, for example, becomes a common carrier and is subject to regulation. Again, the cost of transportation, like the field cost, is predictable. That's the only way you're going to get gas-using industries of the petrochemical type in this province. They have many in Alberta, and the main reason is that the corporations have always been able to go to the source and buy firm amounts at definite prices for a period of 10, 15 or 20 years, long enough to amortize their new petrochemical plant. The cost of transport from the field is regulated on a common carrier basis. This is true around the world. It's true in Texas, Oklahoma, the Middle East. Those are our competitors. We've not been able to compete; we've not had petrochemical industries, because we've had one big purchaser. If you averaged everything in together, that one big purchaser could not make specific agreements and had to make one big general agreement.

AN HON. MEMBER: That's not so.

MR. DAVIS: Well it has, and that's the situation. One of the members is suggesting...

AN HON. MEMBER: You don't know what you're talking about.

MR. DAVIS: ...that B.C. Petroleum Corporation could sell on a differential basis, firm by firm. It certainly hasn't.

AN HON. MEMBER: Where were you before 1972? Certainly it has.

MR. DAVIS: The purpose of this legislation is to enable us to develop a petrochemical industry that will provide jobs during the construction stage and jobs in the operating phase. Admittedly, the operations of petrochemical plants involve few people in the operations. They involve a lot on the maintenance end of things, and a considerable number in the construction stage. Witness $600 million of investment on Annacis Island to build a petrochemical plant. That's a lot of jobs. That's many thousand jobs directly and a multiple of that indirectly. This legislation allows that to happen.

The opposition is saying: "This is the kind of business we don't want to have in British Columbia. We want to continue in the same old pattern. Gas is only for homeowners and stores, who don't really care too much how much they pay. It isn't a crucial item in their costs; therefore let's really not look at industries which are attracted to reasonable supplies," in our case to abundant supplies of natural gas, and reasonable costs.

This legislation allows us to get into the petrochemical industry. It allows us to generate jobs. It allows us to do something which is done elsewhere in the world, and we have to be competitive with other systems in other parts of the world if we're going to have this kind of industry. There's a myth being broadcast, particularly from the other side of the House, that the export price will somehow also be lower. Even if British Columbia wanted to give the gas away, it can't, because the National Energy Board — that's at the national level — requires that the price for exported gas never be lower than any price charged internally in Canada, particularly in the source area.

So that's a myth. That's ridiculous. We're only talking about new industry of a particular kind, a kind that's competitive in the rest of the world, working within legislation of this nature. To be competitive, we have to have this legislation. The minister calls it deregulation; I suppose it is, but it's an opportunity for the private sector, for willing buyers and willing sellers, a transporter getting a full return, to operate and we get jobs, and that I think is important.

MR. MACDONALD: Mr. Speaker, it's a tragedy for British Columbia that we have a public presence for own natural gas, which will not last forever and is going to be very valuable in the future in different uses, and that we're abandoning that public presence today to the international oil and gas industry. Those little producers who are going to bargain directly with their customers, say across the line, are mostly controlled already by their customers across the line, and their customers across the line will know how to get the best price out of British Columbia.

That's the situation that used to exist in this province, and you're turning the clock back by 30 years. You're turning the clock back to where the international companies were in control of our natural gas, and they were getting it for 32 cents per 1,000 cubic feet across the border at Huntington, with nothing coming back in terms of public revenue to this province. Since that time, at least a billion and a half dollars have been brought into the public revenues of the province of British Columbia. I'm informed that it's $2 billion.

The member who has just taken his seat says that BCPC couldn't do this and promote petrochemical industries and the rest. He says it was too rigid a structure. That's simply not true. The Petroleum Corporation had the authority to make contracts with the producers in the field; also to assist them with grants if necessary to get wells underway and producing, and at whatever prices. The Petroleum Corporation also had the power to deal with the proposed petrochemical industry, whether Ocelot or Cominco, or whatever might come along, and to give them a price break if they wanted, if it was a valid argument in the public interest. So everything that that member said can be done under B.C. Petroleum Corporation, but he says let's go with Ronald Reagan and Pat Carney and turn it over to the tender mercies of the international companies and hope they will let some crumbs fall from the table to the people of British Columbia. Well, we've been through all that.

I can see today, on this very sad day where we're turning this clock back, Mr. Speaker, that the international oil companies once again have done everything to this Legislature except refine it.

[5:00]

[ Page 6553 ]

MR. COCKE: Mr. Speaker, I suggest very strongly that again this government is being influenced by the Fraser Institute, which tells us, whatever we do, let's depend on the private sector, that beneficent group, to provide us with jobs, to provide us with this and to provide us with that. The private sector has not done that, and the private sector won't do that.

I recall the history of the gas business in this province before the NDP government set up BCPC. We were absolutely being taken to the cleaners. We were selling our natural gas in this province for 32 cents a thousand cubic feet when Texas gas wells were selling their gas to their own compatriots in the United States for around a dollar and more.

[Mr. Strachan in the chair.]

Now, Mr. Speaker, what we're saying here is: let's turn it back; let's let them do it to us again. There is no question that we have at this time a surplus of power, a surplus of energy. One would not have thought that it would be the case just a few years ago, the way things were going. But yes, we have. And there will be more of it. But unless we use that energy for the public good, not for the good of those major corporations....

I can remember when a number of representatives of major oil corporations visited our government. They sat there. They weren't visiting a government, they felt; they were visiting somebody that they could push around. It didn't take them very long to learn that they weren't going to push us around. They just got up summarily and walked out.

You see, Mr. Speaker, I don't have the same great respect for that whole major energy institution called Imperial Oil, Rockefeller subsidiaries, Standard of New Jersey and Shell, all of these oil companies that have never seen fit to be good corporate citizens. They have only seen fit to glean every nickel they can out of every economy.

Mr. Speaker, if the member for North Vancouver–Seymour (Mr. Davis) is prepared to set up a fertilizer plant in Vancouver by bringing natural gas down there, I wonder where that pipeline is going to be. They're going to build another pipeline? He says they can do it themselves. They can go to the ground, get the gas and bring it to Vancouver and manufacture fertilizer from it. Sheer nonsense.

The fact of the matter is, we have a good system. We have a system that can be improved. But to take that system back, farm it out to those major oil companies, who are never going to serve our best interests, in my opinion.... Mr. Speaker, we're doing the wrong thing. They have to deal with our own corporation. We'll deal with our own corporation. So why should we give it back to them? Remember the history. If it hadn't been for the hon. first member for Vancouver East (Mr. Macdonald) and the thought that went into setting up BCPC in the first place, we would still be in that terrible position where we were giving away our natural gas. But he had the presence of mind to take that natural gas and become the wellhead purchaser of that natural gas and keep it for that long. He didn't say we were going to then distribute it and all the rest of it. It was just to establish the purchase price of that natural gas, and it was then that the federal Ministry of Energy was able to come in and establish a gas price for this country. Before that we were selling it at 32 cents. It was absolutely the most ridiculous thing.

Now this government, who are broke, who are going deficit after deficit, with this marvellous opportunity to continue to get some revenue from this important energy resource, are going to give it away. We have close to $2 billion from that resource, and now we're going to give away this opportunity. I think it's the most stupid thing. I expect that sort of thing from this government, but I don't think they should get away with it without some of us saying a few words.

MR. HANSON: Mr. Speaker, I want to take my place in this debate and indicate my displeasure at a breakdown of the rents that we're receiving for our natural God-given resources in this province.

It's well known that we export raw logs. We export our fish in the round. We export our coal, with just a $2-per-ton royalty on it. Yet here we have one of the few natural resources that we're receiving a rent on, through the B.C. Petroleum Corporation. It has been stated by the member for New Westminster (Mr. Cocke) that the member for Vancouver East put in place for future generations a mechanism whereby the generations of British Columbians would receive some rent into general revenue from the export of our natural gas. Here we have this very sad day, where we're rolling the clock back again in British Columbia, as we're doing in all matters with respect to our natural resources. No wonder, Mr. Speaker, this government is so inept and so inadequate in managing our resources, in providing the revenues for our health institutions and for our education and for diversification of our economy. It's because they continue to knuckle under to the big corporations, who have total control of our natural resources — whether it's gas, fish or wood. Yet we then become, as we have been in the past, hewers of wood and drawers of water.

What are the young people going to say about this Social Credit government, this Social Credit government that is soon to be swept away and obliterated in the next general election in this province? We will be going to the people with a program of proper management of our resources, with proper and fair rents, so that our children can have proper university education, so that our people can be doing something other than sweeping up around McDonald's or sweeping up around computers for the rest of their working lives. That's all that Social Credit means. This is just another block in that overall building block of putting us back in complete and utter subservience. We will never be masters of our own house. We will never be able to properly diversify our economy, because all of the control will again be in New York or Los Angeles, and we will simply be sweeping up around McDonald's.

I don't expect those back-benchers over there, who now have been bought off by being executive assistants, and carrying the baggage of the cabinet ministers, and picking them up at the airplanes, and distributing their press releases in the gallery...

DEPUTY SPEAKER: Order, please.

MR. HANSON: ...and making sure that they've got candies and peanuts in their desks....

DEPUTY SPEAKER: Order, please. To the bill, please. The member will come to order. Bill 52, please.

[ Page 6554 ]

MR. HANSON: It doesn't take much, Mr. Speaker, to buy them off.

But it is a black day for British Columbia. It's a black day for the young people.

No, Rita, sit down.

DEPUTY SPEAKER: One moment, please. The first member for Surrey has risen on a point of order.

MRS. JOHNSTON: Mr. Speaker, I would ask that you have that previous statement withdrawn, about being bought off. I resent that.

DEPUTY SPEAKER: The point is well taken, hon. member. The Chair called the member to order, and there was an imputation against other hon. members of this House. I will ask the first member for Victoria if he will withdraw any imputation against another hon. member. Please withdraw.

MR. HANSON: Certainly I will withdraw.

DEPUTY SPEAKER: Thank you. Please proceed. Bill 52.

MR. HANSON: I guess it's just that everybody is such a make-believe cabinet minister over there that they can't really have their own voice in that government.

DEPUTY SPEAKER: To the bill, please.

MR. HANSON: They can't speak up for their own well-being of the region.

That member from Shuswap-Revelstoke, you'll not be able to hold your head up in that area after this kind of bill is passed.

DEPUTY SPEAKER: Order, please. Personal references are most unparliamentary. Can we return to debate on the bill. I'll ask all hon. members not to interrupt while another hon. member has taken his place in the debate. Bill 52, the first member for Victoria continues.

MR. HANSON: Mr. Speaker, it is only going to be a short period of time that the B.C. Petroleum Corporation legislation is repealed from the books of this House. When we are in office, after the next election, this will be back in place to protect future generations of British Columbians.

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

HON. MR. ROGERS: I don't doubt that this bill would create some emotional outbursts on both sides of the House. Many members want to vent their particular ideas. I would almost say that the member for North Vancouver–Seymour (Mr. Davis) did such a good job of closing debate on this, or at least explaining many parts of it, that there are only a few things I want to add. But I think I'll try to go through the whole list of things. First of all, for the first member for Vancouver East, the biggest oil company in the province is that horrible multinational company called Petro-Canada. They are such a big player in the thing that they own 30 percent of the gas in this province.

MR. MACDONALD: Are you going to privatize that too? If you had the chance, you would.

HON. MR. ROGERS: I'd have to move to Ottawa to do that, Alec. I might also....

Interjection.

HON. MR. ROGERS: Let's review what BCPC actually did. It took an implicit revenue. Now we're going to take an explicit revenue. You didn't charge a royalty at the wellhead. BCPC just paid producers apart of the proceeds from the sale of the gas and kept the balance, and that's how B.C. had its profits.

The other member for Vancouver East mentioned the fact that there are so few jobs involved in Ocelot, other than the construction jobs. Well, you know, the petrochemical industry is important to this province. It is not a major employer of people at the actual plant. It is certainly an employer of people in the oilfields and the gasfields — looking for, developing and servicing oil wells and gas wells throughout the province. I think it's a positive step. We can have a philosophical difference about whether you want a petrochemical industry now, or whether you want to keep the natural gas for some time in the future when you think that there will be a higher and better use for it. Other jurisdictions, such as Alberta and others, have had this kind of process in place, and that's the reason why they have a petrochemical industry and we don't.

It will mean a higher return for the producers. The member for Mackenzie (Mr. Lockstead) mentioned the fact that there will be a higher return for producers. Producers still don't make anything like as much in this province as they do in Alberta, and it costs significantly more to drill in British Columbia. You have to make it attractive for those people to go ahead and produce in British Columbia.

One of the things that the member for North Vancouver mentioned in his address was about BCPC. BCPC will be allowed to contract on behalf of small producers who do not want to be involved in direct sales of gas to eligible buyers. BCPC is given that flexibility, and has already been approached by some people to go ahead and market their gas. That will be one of the tasks given to these particular companies. The second member for Vancouver East talked about BCPC setting the price. Why should the cabinet and BCPC set the price of gas? Why don't the producers set the price of gas — when you talk about dealing with eligible buyers?

Interjection.

HON. MR. ROGERS: No, let the producers do it. Let the person who has found the gas, who has invested the money in it....

Interjection.

HON. MR. ROGERS: Well, gas just comes up out of the ground like a potato.

Interjections.

DEPUTY SPEAKER: Order, please.

[5:15]

[ Page 6555 ]

HON. MR. ROGERS: Well, that's the state of the debate.

The other thing we talked about is the 65 percent of the price of oil. There is flexibility in this act, and should the situation in Canada be such that that particular target is not an achievable target or an optimum target, it can be adjusted. In fact, gas remains by far the best bargain in this province. It's presently at 40 to 41 percent of the price of oil, and electricity is about 120 percent of the price of oil. I can't see us losing gas customers when it's still the cheapest fuel by a factor of 35 percent.

Interjection.

HON. MR. ROGERS: Well, Mr. Member, you had your opportunity to intervene both now and during my estimates. I have a feeling that you're going to be terribly disappointed when we find a way to build a gas pipeline to the Island, but we're going to have them go ahead and do that.

We talked about the export price of natural gas. The National Energy Board sets the floor price for the export of natural gas — it's not less than the price of gas sold anywhere else in B.C. But I don't believe we should have a situation where the export price continues to subsidize the domestic consumer of gas.

One of the things that did happen with the National Energy Board setting the export price of gas is that the export price rose so much that in 1980 B.C. Petroleum.... I wish the first member would pay attention. I listened to you, Alec.

Interjection.

HON. MR. ROGERS: I'm glad. Now everybody's listening.

In 1980 BCPC's revenues from the sale of gas were $320 million, and because of the increase of the border price we continued to lose markets so that by 1983 we got $92 million. Now the very process you put in place was absolutely destroyed by Mr. Lalonde, Edmund Clark and others, and by 1985 we are projecting to make $113 million from the sale of gas, and if the LNG project goes ahead, by 1990 we'll see $300 million worth of revenue coming to the Crown from natural gas. That's not spent by this ministry; that's spent by my colleagues in the social service ministries. This ministry is a revenue-earning ministry for government. That's our mandate; that's what we enjoy doing. Because we turn it over to the other ministries who spend it on their so worthwhile social and infrastructural expenditures.

The member for Mackenzie talked about the windfall gains. I might tell him that the royalty price is sensitive to the rising price of gas, and the old royalty system was not. I have the graph here. I'll hold it up and show it to you. It shows precisely the situation — and I'll send you a copy if you like — with the rising price. So when the price of gas goes up, the royalty price will escalate with it. It didn't happen in the past. but it will happen in the future. As I said, 65 percent is the yardstick used for 1990. It's the yardstick used in eastern Canada. We may not go to that. We may go to a more flexible.... We have the flexibility to go to a lower rate. but we'll just have to see how the energy picture unfolds in this country.

We've looked very carefully at the forest industry. The total cost of natural gas makes up between only 5 and 7 percent of their costs. Energy costs are quite realistic. I don't I see any reason why this particular industry should be subsidizing the others.

With that, Mr. Speaker, I move second reading.

Motion approved on the following division:

YEAS — 24

NAYS — 15

Bill 52, Natural Gas Price Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Mr. Speaker, I call adjourned debate on second reading of Bill PR406.

AN ACT TO AMEND THE
TRINITY WESTERN COLLEGE ACT
(continued)

DEPUTY SPEAKER: The Chair recognizes the first member for Surrey (Mrs. Johnston).

MR. COCKE: Mr. Speaker, I adjourned the debate.

DEPUTY SPEAKER: My regrets. The member for New Westminster.

MR. COCKE: I gather the member for Surrey felt it would be a good idea to get up and close debate. Debate on the bill never started.

I must confess that I'm not in exactly the same position as the rest of my colleagues in caucus. I think there are one or two of us who feel this way. I for one am opposing this bill. I'm opposing it on the basis that I feel that a university in this province should be part of the Universities Council proposition that we have for the public universities. I don't think that standards can be relied upon by permitting a proliferation of private institutions. I don't care who's the founding group behind those private institutions.

Interjection.

[Mr. Ree in the chair.)

MR. COCKE: The minister says: "What's wrong with a little bit of Christianity?" The next one could very well be a

[ Page 6556 ]

Maoist institution. The next one could be something else. So let's not throw smoke at this issue.

The fact of the matter is I don't believe that they should be.... We have a Universities Council in this province. The Universities Council is responsible for the level, the standards of our universities. I think it's very important that we should all remember that.

So, Mr. Speaker, as a minority within my own caucus, I'm just announcing that I'm opposing this bill on those grounds and for no other reason.

MRS. DAILLY: Mr. Speaker, I also am opposing this bill, and I'm taking my place in this debate so I can put my reasons on record briefly. Primarily I am against the process which was used by even sending the granting of an institution's right to call themselves a university to a select standing committee of lay people. This was my objection when it first came up years ago. The process was absolutely wrong.

It is a very important step in the province of British Columbia when it is decided to grant an institution the right to call itself a university. Irrespective of how good Trinity Western College may be.... That is not the issue. The issue is the responsibility of the members of this Legislature to take seriously the granting of the term "university" to any institution in this province. When you allow a process which does not provide for the proper examination — or the proper controls of whether the degrees should be granted or not — the right to call itself a university, it's abrogating our responsibility. I say to the Social Credit government that you are absolutely wrong to handle this in this manner.

The Universities Council of British Columbia asked that this be delayed, so that it could have changes made in the University Act which would make umbrella legislation, possibly, to include public and private universities. Their main concern is nothing against Trinity Western; they are taking their rightful responsibility as advisers to the government to see that proper process is initiated in this province. I think it's a very sad day when we have proper process being thrown away, and when we're being asked to vote to grant university status without any proper mechanism to decide whether some institution should have that status.

Mr. Speaker, I think that the members of the government surely have not given proper thought to this. I am disappointed that the minister in charge of universities did not even show up in the committee and did not see fit to take his place in this Legislature.

This is the place where we have a responsibility to all the citizens. Mr. Speaker, I understand there are at least 40 other institutions which could be coming before this same committee, or future standing committees, to ask for the university degree-granting status. Now they may be inferior to Trinity Western, quite possibly, but once you've granted this without due process, what right would you have to refuse it to any other institution? I say to the members of this House that you are indeed making a serious mistake. I think this whole thing should not be voted for. It should go back to changes in the University Act. I ask the members to listen carefully.

[5:30]

MR. VEITCH: I want to rise to support this legislation. It's interesting that the hon. member for New Westminster (Mr. Cocke) says that it should be controlled by the Universities Council. He doesn't want private educational institutions in this province.

MR. COCKE: I never said that; I said private and public both.

Interjection.

MR. VEITCH: No, I won't withdraw, hon. member.

The hon. member for Burnaby North states that lay people should have nothing whatever to do with deciding educational issues. I remember that member when she was the Minister of Education. Granted, you were a lay person, and maybe, for whatever reason, you didn't do a very good job of it at that point in time; I'll go along with that. Really, Mr. Chairman, they're showing their true colours. They want the government to stick their nose into every single thing in this province, whether the government is funding it or not, and that's what it's all about.

What they fail to realize is that this institution does not take one dime of public money. Lots of people will pay tuition fees, sometimes double what they pay in a public institution. They will send their children to this institution because they think they'll receive a good quality of education. The proof of the pudding has to be in the eating. People are putting their money where their mouth is, and they think that this is a good educational institution.

You say that you don't care whether Trinity Western College or University — whatever you want to call it — is a good institution or not, but it should be controlled by the government in some way or other.

MR. COCKE: Not so.

MR. VEITCH: Oh, I see.

MR. COCKE: Well, is it good enough for UBC to be controlled by the council?

MR. VEITCH: Should it be controlled by the government regardless of where the funding comes from?

Interjection.

MR. VEITCH: Listen, hon. members, I support this institution.

MR. COCKE: You wait — next....

MR. VEITCH: Do I have the floor, Mr. Speaker?

DEPUTY SPEAKER: Order, please. Other members have had their opportunity.

MR. VEITCH: I support this bill and I support Trinity Western University. There's no question about that. I've had a personal involvement with it. I've never been there as a member of faculty, I've never worked there as administration, but I've had a long personal involvement with it. I was involved when they were able to go from a two-year to a four-year college. I've watched its growth; I'm not talking about size of university in terms of physical plant or anything like that. I've watched the growth of their faculty and the growth of the students who are graduating from that particular school, and I can tell you that they measure up against any public university in this province. There's no question about that, and in some areas they exceed their ability.

[ Page 6557 ]

This is a unique institution in British Columbia, but it didn't have to be unique. We had Notre Dame University at one time, which was essentially a Catholic university. The government took it over and it got closed down. I happen to think that the turning point in this university, and the worst thing that could happen to this school, is for the government to get its long nose in and take it over, and start taking it away from the role that it has.

There's a lot of background involved in colleges. The University of Victoria wasn't always a university. As I understand, it started as a religious institution and at one time was a campus of McGill. It grew and became a good university. We look at universities such as Harvard, Yale, Columbia. How do they think these universities got off the ground? Did the government of the United States or the states that they were in come up at that point and say: "We want you to be a public university"? No, they started as private schools and they grew from that. I'm not sure they wouldn't be a lot better if they had stayed as private schools in a lot of instances. I'm not sure of that at all.

I'd like to comment on the quality of degrees issued by Trinity Western College. The public universities in this province are more than happy to take undergraduates from this institution into their graduate schools. There's no question about that. They take them above a lot of other schools. They're accepted by the three public universities in this province. When you talk about graduate degrees, which is really the only change in this bill, what they've said here, if the members had read the bill, and I wish they would.... It says: "...a baccalaureate degree, a theological degree, and such other degrees as authorized by the Lieutenant Governor-in-Council following academic review by three qualified academics from other universities approved by the minister responsible for universities in British Columbia." What more checks and balances could one want than that?

It's interesting to me that there seems to be some sort of stigma attached to this institution because it happens to be a Christian institution. I ask you, what's wrong with that? If we're talking about morality, and there's another way to do things, I'd like to hear the other way as well. It's about time we started to realize that we can't separate what we are from what we do in this world. If they do have a Christian principle or a Judaic principle or a Muslim principle that works, I say let's build on that principle, and build on it in education as well as we can in other areas.

I'm very happy to support this bill. Two of my children and I attended the University of British Columbia; I'd be happy if my 16-year-old son attended this university.

MR. ROSE: I am going to support the legislation. I do so without a great deal of reluctance. It would have been my first choice, too, to have this Trinity Western University, as it's going to be called, come under the umbrella of the Universities Council. I think that's where it belongs. However, I'm not prepared to hold it up on that ground. I think that it will become plain that with the proliferation of private universities — and surely they'll come — some umbrella legislation under the Ministry of Education — perish the thought — or the Ministry of Universities — double perish the thought — would be, I think, a step forward.

I think it tends to be a bit of a misuse of the committee for a private bill to establish a name change or a change in status or degree-granting status — to occupy the time of the private member's bill. I think it's a back-door approach.

The whole history of Trinity Western College has been one in which there's a little bit of the story of the camel's nose and the tent. They have gradually, through growth, received more and more power and influence, and I think they have an undue influence, perhaps, on the Social Credit Party. But saying that — if I say all that — I have to ask myself the question: is it worthwhile holding this up while we inch our way to Universities Council umbrella legislation, which might come in the next century? Or should we let them proceed and try to develop a quality program, albeit a graduate program?

I can't buy the stuff that the member for Burnaby-Willingdon (Mr. Veitch) is talking about. What did he say — "sticking the long nose of government into this university"? Well, I think the long nose of government has been pretty intimately stuck into that university for a long while. They have a lot of supporters there. I would ask the member whether he believes the government, as it had to do recently, should stick its long nose into Expo, or whether or not it should stick its long nose into BCIT and PVI. It stuck its long nose in there, and it caught some rather awkward and nauseous smells.

Interjections.

DEPUTY SPEAKER: Order, please.

MR. ROSE: Please, Mr. Speaker, protect this tyro from the tirade of the unruly of the government....

DEPUTY SPEAKER: The member for Coquitlam-Moody on Bill PR406.

MR. ROSE: Mr. Speaker, I have a justifiable concern that they will deflect me from the major thrust of my speech.

I would suggest to the minister that I think it was useful that the minister stuck his long nose into a rather smelly situation, in that instance. I'm just using that as an example. Perhaps the government should stick its long nose into some other things too, and have a look at something else that might be happening.

Let's get back to the bill. I realize that I tended to be a bit discursive there, but it was really to indicate a point. I have had a long association with Trinity Western. I've known that institution since it established itself as a two-year campus in Langley, living in Langley at that time, and was well acquainted with its president at that time, Dr. Calvin Hanson, who is an estimable gentleman, and, I think, an academic leader; also Robert Thompson, of fame in such diverse places as the House of Commons and Ethiopia. So its association with the Social Credit and certain sectarian groups is hardly arguable.

Interjections.

MR. ROSE: As soon as the exchanges between the reincarnated Sir Wilfrid Laurier and the old man of the mountain cease, then I shall proceed with my main argument. I had to ask myself....

Interjection.

MR. ROSE: No, but he had the same hairdo.

[ Page 6558 ]

DEPUTY SPEAKER: Order, please. Will the Provincial Secretary (Hon. Mr. Chabot) come to order.

MR. ROSE: Mr. Speaker, I have to ask myself whether or not we are opposed to private universities. If I'm not opposed to private universities, and a university that is a private one meets all the criteria that I think are important for a university and its faculty and its program and its future, then I can see no real reason to oppose the bill. That's strictly how I look at it, and I realize that we all have a different value system. Therefore I think that rather than be criticized for not voting with some of the rest of us, the members for Burnaby North (Mrs. Dailly) and New Westminster (Mr. Cocke) should be congratulated. There should be more free votes, not fewer, in this institution.

I wish some of the other side would take a little lesson from this, as they once did before they were all made parliamentary secretaries. They probably wouldn't dare there.

What are the crucial elements? Are the standards acceptable at Trinity Western from an external point of view? The answer to that question is yes. Their teaching training and their placement is taken over by Simon Fraser University. I've looked at their calendar, and certain of their prerequisites are higher than those of UBC — higher, not lower.

Are they going to be using public funds? They have used public funds, federal funds under EPF, and they are going to be using research funds, but so is every other institution, including probably General Motors. Certainly General Dynamics does, but that's not a Canadian situation. All right, that's the second point.

The third point is whether they are going to have any postgraduate or graduate degrees vetted externally, and again the answer is yes. I think we have to admit that they didn't come to that with us. They tried to smuggle a little housekeeping bill in here — and I give them credit — but they finally came to that conclusion, because they felt they would lose out otherwise. Some of us were very concerned that they might become possibly a sort of Oral Roberts diploma mill.

I don't think that some of the so-called Bible colleges or pray-TV teacher universities are acceptable models for us, nor is their behaviour on pray-TV by some of them.... Again, I digress. Were we opposed to Notre Dame when it was established by the Catholic church? Are we opposed to places such as Harvard and McGill and all sorts of privately endowed universities? I think the answer is that we're not. So if we aren't, I do not buy the argument that we have to wait for the University Act to fulfil itself and come into being before we can allow.... Remember, there will be no degrees granted for three years, and then they will be vetted on the outside.

I think it's perfectly reasonable, in view of the fact that we've got here and given them permission to grant baccalaureate degrees, for them to plan to move into a further stage. I don't think that any public institution is at risk. Anybody, any parent or any student, has the right in our society to have both diversity and choice. He has the right to attend a university of his own choice, and he also has the right to attend an institution in which his own values, social values and lifestyle are constant.

So from that point of view, I think that, while I believe that any private universities or degree-granting institutions in the province should come under the aegis of the Universities Act, that isn't the issue at the moment. The issue is should they and will they be allowed to proceed. I'm going to vote for it.

[5:45]

MRS. JOHNSTON: I have just taken a lesson from the previous speaker, and I will be voting with the member for Coquitlam-Moody. The purpose of the bill is to recognize university status of Trinity Western by way of a name change from " college" to " university " and to provide for the eventual granting of degrees other than the undergraduate baccalaureate degrees presently permitted.

Mr. Speaker, this is a private institution which does not request or receive government funding and which has been chartered to grant degrees since 1979. The name change will obviously do much to clarify Trinity Western's university status.

Mr. Speaker, this bill seeks to lift the presently existing curtailment of Trinity's degree-granting capabilities, and certainly the precedent has been set many times in Canada and has been mentioned by previous speakers. It would be quite unusual for any university in Canada, public or private, to need to repeatedly reopen and revise its basic charter every time it wanted to institute a new graduate-level program. Trinity has already more than proven its value to our education community and has earned our support for these requested amendments.

Mr. Speaker, I move second reading.

[Mr. Strachan in the chair.]

Motion approved on the following division:

YEAS — 32

NAYS — 2

Bill PR406, An Act to Amend the Trinity Western College Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Second reading of Bill 42, Mr. Speaker.

[ Page 6559 ]

MISCELLANEOUS STATUTES
AMENDMENT ACT (NO. 2), 1985

HON. MR. SMITH: Mr. Speaker, because of the fact that this bill is a veritable kaleidoscope of fascinating amendments, I would move second reading of it.

MR. LAUK: The opposition is opposed to many sections of this bill, and we'll take them up in debate in committee stage.

HON. MR. SMITH: I thank the member and move second reading,

Motion approved.

Bill 42, Miscellaneous Statutes Amendment Act (No. 2), 1985, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.