[ Page 6859 ]

CONTENTS

Tabling Documents –– 6859

Oral Questions

Mining stock transactions. Mr. Macdonald –– 6859

Khutzeymateen ecological reserve. Mr. Howard –– 6859

Burnaby School District financing. Mrs. Dailly –– 6859

Coquitlam River fish hatchery. Mr. Parks –– 6860

Presenting Petitions –– 6861

Expo 86. Hon. Mr. Richmond replies to questions on notice –– 6861

Forest Amendment Act, 1985 (Bill 3). Second reading

Mr. Howard –– 6861

Mrs. Wallace –– 6864

Mr. Williams –– 6865

Mr. Nicolson –– 6868

Mr. Lockstead –– 6868

Mr. Davis –– 6869

Mr. Mitchell –– 6869

Mr. MacWilliam –– 6870

Hon. Mr. Waterland –– 6871

Division –– 6875

Committee of Supply: Ministry of Tourism estimates. (Hon. Mr. Richmond)

On vote 65: minister's office –– 6875

Mr. MacWilliam

Mr. Barnes

Miscellaneous Statutes Amendment Act (No –– 3), 1985 (Bill 56). Committee stage 6880

Mr. Howard

Mr. Cocke

Mrs. Wallace

Mr. Lauk

Tabling Documents –– 6883

TUESDAY, JUNE 25, 1985

The House met at 2:06 p.m.

MR. VEITCH: Mr. Speaker, seated in the members' gallery this afternoon is a very good friend of mine and, I know, a friend of the Minister of Environment, Mr. Ron Stevenson, with whom I spent many good hours in post-secondary education. I'd like the House to bid him welcome.

HON. MR. PELTON: Mr. Speaker, with my friends in your gallery today are some visitors from Worthing, England: Mr. James Barter and his two daughters, Sheila and Pamela. I would ask the House to make them welcome, please.

Hon. A. Fraser tabled the annual report of the B.C. Ferry Corporation for the year ended March 31, 1985.

Oral Questions

MINING STOCK TRANSACTIONS

MR. MACDONALD: A question to the Attorney-General, Mr. Speaker. There's been a civil case settled with Lac Minerals against Deep Cinch and everybody's been instructed to clam up, including the public relations director of the Vancouver Stock Exchange, but in that civil case there were serious allegations, one of salting, which is a criminal offence and used to be called high-grading, and the other is of a conspiracy to suppress material facts and to blow away cheap stock at the expense of the investing public. In view of those, my question is: has the Attorney-General ordered an investigation into the matter by the RCMP commercial fraud squad?

HON. MR. SMITH: Mr. Speaker, one thing's a deep cinch, and that is that this member usually brings innuendoes to the House and not facts to me that I can investigate. But I will say that the matter of the stock exchange and the dealings there have been under investigation and continue to be under investigation.

MR. MACDONALD: In view of the fact that Peter Brown, who is the president of Canarim, a Socred bagman, one of the Pouilly-Fuisse kids and the finance director of Expo, signed a material statement of fact at a time when the Vancouver Stock Exchange, of which he was on the executive committee of the board of governors, had four other assay reports and reported only the bogus one by Cheintex of Texas, as a result of which people lost an awful lot of money.... I ask the Attorney-General: is signing a misleading statement of fact an offence?

MR. SPEAKER: The member seeks a legal opinion, which is not in order in question period; nor is an answer entitled to be given for a question that is out of order.

MR. MACDONALD: Mr. Speaker, clearly it is an offence. I'm asking the Attorney-General whether he is considering a public inquiry into the New Cinch matter, where the people, including Canarim and others, made about $4 million on the basis of a bogus assay of a gold and silver mine in Texas. Is the public entitled to a public inquiry or not? I ask the Attorney-General.

HON. MR. SMITH: Again, this member in this chamber makes all sorts of assertions and sounds sometimes like the Maharaja of Muck. What I would prefer that he would do is to bring some concrete allegations to my attention and facts to back them up. They will certainly get close attention. But the matter that he speaks of generally is a matter that the commercial crime section have been looking at for some time and have been following. I have not had final reports on that, but it is a matter that they have been carefully following, all aspects of it. The public interest, I can assure you, is being protected. If there are any bases for charges to be laid according to evidence that will stand up in a court of law, well, then that will be done. All individuals will be dealt with the same regardless of their high station or their humble station.

MR. MACDONALD: A final supplementary. Will the Attorney-General, in view of the relationships involved, which are very well known, and the fact that this has been all hush-hush on the part of the government, authorize a public inquiry so the public may judge?

HON. MR. SMITH: I always remember courts being held in public; at least they have been since I've been Attorney-General. Again, it's very easy to make these cute allegations, but we would like to have some evidence and substance. The matter is being fully investigated, and if charges are laid, people will be dealt with in public.

KHUTZEYMATEEN ECOLOGICAL RESERVE

MR. HOWARD: I'd like to ask the Minister of Environment whether he has come to a conclusion about establishing an ecological reserve at the head of Khutzeymateen Inlet.

HON. MR. PELTON: The decision to establish an ecological reserve in the Khutzeymateen has not yet been made.

MR. HOWARD: As a supplementary, could I ask the minister what its status is? Can he predict when that decision might be made?

HON. MR. PELTON: I couldn't predict when that decision might be made, but it's under relatively active consideration.

BURNABY SCHOOL DISTRICT FINANCING

MRS. DAILLY: A question to the Minister of Education. Yesterday the Minister of Education absolved himself and his government of any responsibility for the school tax increase in Burnaby. Is the minister aware that the provincial government's share of educational financing for the school district of Burnaby dropped from 63 percent last year to 57 percent this year?

HON. MR. HEINRICH: I took the question yesterday as notice, but I gave an approximate answer. I thought it was somewhere in the neighbourhood of 60-40. The exact figure for the provincial contribution is 57.15 percent; the residential contribution is 42.85 percent. In the previous full fiscal year it was 62.9 percent versus 37.09 percent. I would add to

[ Page 6860 ]

that particular comment the response which I made yesterday about school taxation in School District 41: net taxes payable by the citizens of Burnaby, $260 in 1981; in 1985, $167; a reduction from 1981 to 1985 of 35.8 percent.

[2:15]

MRS. DAILLY: Supplementary, Mr. Speaker. For the minister's information, the point is that the school district budget went down in Burnaby and taxes went up. Is the minister not aware of the fact that because his provincial sharing decreased, each homeowner has to pay more taxes? Is he not aware of that?

HON. MR. HEINRICH: I'm very much aware of that. I thought that my answer yesterday made it abundantly clear as to the reason why. The amount of taxation paid for school purposes is directly related to assessment. Assessment is a reflection of the true market value. If the value of the property found within the boundaries of School District 41 has increased, which it did by a significant sum — it seems to me it was somewhere in the area of 13 percent — as a corollary to this, the amount of taxation would increase as well.

The assessments are done on a provincewide basis. In parts of British Columbia the value of property has declined. As a matter of fact, the average decline outside of the Greater Vancouver Regional District area, incorporating approximately nine school districts, was minus 1.7 percent. There has been an increase in property values in the lower mainland. I think it obviously reflects the property values. It's been that way for years and years. I don't see the particular mystery. As a matter of fact, I well remember when the member for Burnaby North was on this side of the House, in this particular portfolio. Exactly the same problems were presented before her.

MRS. DAILLY: Is the minister aware that if the commercial and industrial tax base was restored to the Burnaby School District, the government would actually pay no share of the educational costs at all? Are you aware of that?

HON. MR. HEINRICH: Mr. Speaker, I am aware of that. It does not only apply to the Burnaby School District, but we can look to some other preferred districts in British Columbia as well, where in fact the amount of revenue generated from the non-residential area — commercial and industrial — far exceeds the amount of money that can be utilized for school purposes, or even required for school purposes within that district. The whole reason for the provincial government assuming responsibility for the non-residential portion was to give equity to all school districts throughout the province. That's fine. As a result of accident of location, some interior or northern community with a very small residential base but a high industrial base, whether it be a mine, an oilfield, a pipeline, a pulp mill or a major industrial complex of some kind, will be able to have all those funds to the detriment of others. It's the same reason we share timber royalties and gas royalties provincewide.

COQUITLAM RIVER FISH HATCHERY

MR. PARKS: A question to the Minister of Environment. Last summer I had the pleasure of taking my two daughters and in conjunction with the....

SOME HON. MEMBERS: Question!

MR. SPEAKER: Order, please, hon. members.

MR. PARKS: Port Coquitlam fish and gun club took part in the release of a good number of salmon into the Coquitlam River. I was expecting that pleasure again this summer, and I was saddened to learn, yesterday morning, that some 20,000 coho fry and some 5,000 steelhead fry were killed by a release of some chemicals. I wonder if the minister can advise the House if the exact cause of that kill has been ascertained.

HON. MR. PELTON: Certainly the Port Coquitlam fish and game club has suffered misfortune twice in the past four months, having had chlorine accidentally injected into the waters in which they raise the fry.

AN HON. MEMBER: They're accident-prone.

HON. MR. PELTON: Yes, that's quite possible too.

The last one, which just occurred, involved a pipe breaking. It was only a small amount of chlorine that went into the water, but, unfortunately, it doesn't take a great deal to kill very small fry, although by the time the chlorine would get into the river itself it would have no effect. The problem is related to the fact that the hatchery is built below....

Interjections.

HON. MR. PELTON: The competition is getting quite keen, Mr. Speaker.

Unfortunately, the hatchery is built below where the GVRD have their waterworks, and the inlet for the fresh water they use in the hatchery is below the GVRD plant. I understand that the GVRD are ready to move that intake on behalf of the Port Coquitlam fish and game club.

MR. PARKS: Supplemental to the minister. The PoCo fish and gun club has spent years and literally tens of thousands of hours in volunteer labour attempting to bring that river back to a salmon-producing state.

In light of the fact that the Greater Vancouver Regional District has its chlorine plant so close to the present site, and in light of the fact that the kill will in effect result in a significant depletion of the very fragile stock in that river, has the minister considered whether or not his ministry is prepared to assist them either in relocating their hatchery site or even — probably more important — assisting the fish and gun club in transplanting some other fry into the river at this time?

HON. MR. PELTON: As I mentioned just a moment ago, Mr. Speaker — my colleague might not have heard when I said it — that GVRD and this ministry are prepared to assist the club in moving the water intake. I wouldn't like to make any comment with regard to moving the whole hatchery, but certainly the water intake will be taken care of. Also we are prepared in the Ministry of Environment to work actively with the federal people who would be responsible for providing coho fish fry. We are prepared to do our part in trying to assist the hatchery in getting back on its feet.

[ Page 6861 ]

Presenting Petitions

MR. BARNES: I have a petition subsequent to the 10,000 names I presented last week protesting the firing of the Vancouver and Cowichan School Boards — an additional 800 names.

EXPO 86

HON. MR. RICHMOND: I would like to answer questions taken as notice by myself and others over the last few days. About ten days ago, the member for Atlin (Mr. Passarell) asked me a question....

AN HON. MEMBER: Where is he?

HON. MR. RICHMOND: The member for Atlin unfortunately is not in the House, Mr. Speaker, but I would like to answer his question anyway. I understand that he is on a sabbatical for the summer, and I would....

Mr. Speaker, the member asked me about the vintage car show that was to appear at Expo 86 and that had been cancelled. I am pleased to respond to his question today, Mr. Speaker, and tell you and this Legislature and the people of British Columbia that the vintage car display will take place during Expo 86.

Just briefly, I would like to thank the Minister of Human Resources (Hon. Mrs. McCarthy) for her efforts towards this. I would especially like to thank the British Columbia Automobile Association for their contribution, and the hardworking staff at both Expo and the B.C. Place Stadium. I'm pleased to say that some 1,400 vintage cars from across North America and Europe will appear at Expo.

Interjection.

HON. MR. RICHMOND: The accent is on vintage.

I would also like to answer a question asked of me twice by the member for Okanagan North (Mr. MacWilliam), once last Thursday and again yesterday, I believe. He asked about the conflict-of-interest guidelines regarding the Expo 86 Corporation. I would first of all like to make it clear to the member that there is quite a difference between conflict-of-interest guidelines for elected members of this Legislature and the same guidelines as pertains to board members of Crown corporations. I am told that no Crown corporation in Canada has an outright ban on doing business with the companies associated with board members, provided the board member discloses the interest and does not participate in the decision.

I would also like to report that the auditor-general of B.C. confirms that Expo 86 has the most comprehensive set of conflict-of-interest rules of any Crown corporation.

I also undertook during my estimates to make available to the member for Okanagan North summaries of the market research — not polling — that we had done in the states of Washington, Oregon and in British Columbia. I said that we would make this available to everyone in the industry, including the opposition, who, I'm sure, really would like to be in the tourism industry. So, Mr. Speaker, I have pleasure in tabling the results of that market research.

Leave granted.

HON. MR. RICHMOND: While I'm on my feet, I would ask leave to make an introduction.

Leave granted.

HON. MR. RICHMOND: Mr. Speaker, it gives me great pleasure to introduce a long-time constituent, a rancher from the Kamloops area and a good friend, Mr. Jim Cobb. Would the House please make him welcome.

Orders of the Day

HON. MR. NIELSEN: Mr. Speaker, adjourned debate, second reading of Bill 3.

FOREST AMENDMENT ACT, 1985

(continued)

MR. HOWARD: Mr. Speaker, when the minister moved second reading of this debate a number of days ago, I thought it was the most shocking example of arrogance shown to this Legislature in many, many years. Either that, or it exhibits that minister's absolute disinterest in forestry matters.

Here a minister of the Crown, with an extremely important piece of legislation, stands up, makes two limp sentences and sits down. No explanation of the content of the bill, no rationale for what it means or for its effect, or its potential effect. Just a couple of limp statements, one of which was that there was no principal thread hooking together the various segments of the bill. That shows ignorance — if not arrogance as well — on the part of the minister as to the content of this bill, because there is a continuous thread throughout the segments of this bill, and that continuous thread is to give away control over our forests to the forest industry, to give away control over public property to the forest industry. That's the simple thread throughout the bill.

The minister obviously, and the government.... It's not the individual minister. He's a decent sort of guy with a pleasant personality, but he's reflecting what this government is: namely, a government that doesn't have any faith in the forest industry. It's a government that has identified the forest industry as being a sunset industry, not worthy of the full commitment on the art of the cabinet and of any minister in it to try to do something of an assisting nature to the forest industry. With that kind of attitude it's no wonder that the forest industry is in trouble. With that kind of response it's no wonder that the industry is in difficulty, and Bill 3 will just put it into further difficulty.

[2:30]

By contrast, I want to identify very clearly and succinctly that the New Democratic Party has an absolute binding faith in the potential of the forest industry in this province and recognizes the valuable contribution that it has made to our economy, our social structure, our educational institutions and everything else. We've got faith in the ingenuity of people in the forest industry, in the small entrepreneurial people who are in it — small loggers and small sawmill operators as well — who are the vibrant part of this industry.

Just to give you an example of that faith that we have in the potential for the forest industry, within the last five or six weeks the New Democratic Party caucus committee on resources has had hearings in this building every Wednesday morning dealing with the substance of Bill 3.

[ Page 6862 ]

MR. SPEAKER: Order, please, hon. member. With the greatest of respect, the remarks that the member is currently engaged upon, the Chair would have to feel, would be more appropriate in the estimates, which are yet to come, on the Ministry of Forests and would stretch somewhat the limitations we have in second reading of this particular bill. I'm sure the member full well realizes the difficulty the Chair has in trying to relate those very general remarks to the specifics that are indicated to us in a variety of changes and amendments in the bill before us. I would ask that the member possibly bear those remarks in mind and maybe save some of the remarks he has for the estimates, which are yet to come.

MR. HOWARD: Mr. Speaker, it is my considered view that they wouldn't necessarily be appropriate to the estimates, because in the estimates we run afoul of the Chairman, who regularly says you can't talk about legislation. We've got to talk about the administration of the ministry. I point out to Your Honour that Bill 3 contains a proposed amendment to deal with the question of tree-farm licences, a very substantial part of the forest industry in the province. It deals with the question of measuring the wood, which the public owns and upon which stumpage is based, which is revenue to the Crown — a very broad-principle concept. It deals with the question of an appropriation for the building of logging roads, for example, and it deals with the question, which I'll come to in a moment or two, of the bidding or auction process with respect to the sale of the public's property. They are very broad and wide principle questions in the bill. That was what I was seeking to deal with: the forest industry generally, and how we were approaching it with respect to this particular bill.

As I was saying, the New Democratic Party had indicated that commitment and faith to the forest industry, far more than this bill does, by seeking to sit down with.... And we did sit down with and listened to representations from people like the vice-president of B.C. Forest Products, for example; people like the president of MacMillan Bloedel; people from the Association of B.C. Professional Foresters, small business operators, small sawmill and remanufacturing operators — a wide variety of people in the industry — to get from them their opinions about the effect of Bill 3 on them and on the industry.

I want to submit that in my view this bill reflects the fact that the Minister of Forests has not been prosecuting to the fullest the provisions of the Ministry of Forests Act itself. In this bill, that's carried forth even further. Let me quote the Ministry of Forests Act itself. One of the purposes and functions of the ministry — and this is the underlying legal direction and requirement to be met by government and by the minister — is, "under the direction of the minister, to assert the financial interest of the Crown in its forest and range resources in a systematic and equitable manner." I want to point out to you that the practice in the past has been that the minister has not so asserted the financial interest to the Crown; that the minister has been negligent in his duties under the Forest Act; that the minister.... I wouldn't say he has been guilty of violating the law, because that's something that another institution is charged with discovering, if it ever gets to that point. But he has certainly not asserted the financial interests of the Crown either before or in this particular bill.

One of the provisions of the bill relates to a question of establishing something called an official scaler. An official scaler is sought to be a licensed scaler, employed by private industry, to scale timber owned by the people of the province but cut, or felled, by private industry under licence. This seeks to give to the company having the licence to cut the timber the right to scale the timber that it cuts. I submit that there's no foresight in that approach; there's no planning involved in that. One only has to look at another bill, Bill 56, to see that we now have companion legislation to the bill before us, seeking to dilute the impact of it somewhat, and seeking to pay attention to check-scaling and other factors with respect to it. But the establishment of the concept of an official scaler, attempting to privatize scaling, to go back to the case as it was a number of years ago, is simply a blind obedience to some ideological concept called privatization, without regard to the impact or the effect of it.

The Minister of Environment (Hon. Mr. Pelton) earlier today took the occasion to introduce a guest in the gallery, a Mr. Cobb. I don't know if that's the same Mr. Cobb about whom the ombudsman reported to this House a few days ago; it sounds like the same name. The minister just nods at me, and says: "Yes, that is the same person." If one reads the report of the ombudsman with respect to that case as a result of privatizing the scaling of timber cut from lands that Mr. Cobb had, then it's very clear that Mr. Cobb was cheated out of more than 40 percent of the timber cut from his lands; and this goes back into the late sixties sometime when that occurred. That was a private scaling arrangement. And we're seeking here to go somewhat in the same direction. We're seeking to establish a conflict of interest with respect to the people who have the licence to cut the timber.

I know the minister is going to say: "You look for cheating and deceitfulness everywhere." I don't. I'm simply looking at the facts. The minister has said that; I've heard him say that. I'm just seeking to establish the case that it is unfair to a licensee under the Forest Act to place that licensee in a conflict-of-interest position. It is unfair to say to the person who has the licence to fell the trees: "You also should scale those trees. Measure them up, so that on that basis of measuring, called scaling, it will be determined how much you pay the people of British Columbia in stumpage for the trees that the people of British Columbia own." That's the conflict of interest. If there is any doubt in a situation like that.... If any doubt arises, Mr. Speaker, about the propriety or the correctness or the accuracy, or whatever, of the scale.... In the absence of any check-scaling, if any doubt arises over a period of time of a continuation of the process.... If any situation arises, say, on a dryland sort, when the logs are into the dryland sort and out again, gone, chewed up in a pulp mill or a sawmill and not able to be scaled, only able to be estimated and so on, then the finger of accusation can very easily be pointed at the person who has the responsibility for doing the scaling. That's the unfortunate conflict of interest within which one is put by this particular proposal.

It's like the government, which on behalf of the general public runs a retail operation called a liquor store, saying to the general public who use the services and buy the commodities in that liquor store: "Sure, go in. Fill up your box or you bag, or whatever it is you want to buy, tuck it under your arm, walk past the teller and say: 'I've got so much in here. Here's how much I'm going to pay you for it."' That's the same process. The government would not think of doing that with respect to liquor; at least I don't think they would. But

[ Page 6863 ]

they're thinking of doing that with respect to another commodity, another item, another possession of the general public, namely the trees that are growing on the land. That's an unfair and a very inappropriate thing for this bill to seek to do.

Another provision in the bill seeks to allow those who possess a forest licence to apply to roll over into a TFL that portion of the forest licence that they desire to roll over, and either keep the balance as a forest licence or, if it is denuded, worn-out, inappropriate land, not considered good timber land, let it revert to the Crown. Again, it is catering to the owner of the licence — to deal with public property in whatever way the owner of that licence sees fit.

We've got an example of something of this nature with Westar and its TFL No. 1 in the northwestern part of the province. Recently, as a result of ongoing discussions, Westar relinquished, I think, about 30 percent of the area of its TFL No. 1 — gave it back to the Crown. One may say that's fine; they didn't need it. So the public gets it back again, and it can now be available for other loggers or millworkers who want to bid in to acquire it. When the announcement of that 30 percent cutback was made, officials of Westar applauded that decision and said it was the most beneficial thing that had happened to them in years. It was rotten, decadent timber, and they didn't want it anyway. That reflects exactly, I submit, the response of the government in dealing with public property — a response to the owner of the licence to satisfy the owner of the licence and not the public good. What Westar wanted, Westar got. What Mac and Blo wants, Mac and Blo gets. I only use those two companies as typical examples of others in the forest industry who have got this minister and this ministry under their thumb and can get anything they like for it.

There's a provision in here for timber cruising that lays the cost of a timber cruise on the small operator. That's an approach that militates against the small operator in the forest industry, loading additional costs on top of a person who can least afford it, placing against him another expense. We're going to make it that much more difficult for the small logger to get into business.

[2:45]

Probably the most offensive segment of the bill is that which sucks up to the practice that has been going on in the industry for a long time — namely, conspiracies to settle how much they're going to bid on timber sales. There's a provision in the Forest Act now that says licensees shouldn't talk with each other, shouldn't conspire with each other to set a fixed price or to have one licensee bid and the other not. It's illegal to do that. The practice has been just the opposite. The practice has been for people to combine together with each other to serve their mutual interests and agree that certain companies would bid and others would not, completely contrary to the public interest. What this bill seeks to do is establish a provision for bid-rigging with respect to public property. It seeks to legalize that which up until now has been practised but illegal. Just because it has been illegal and people have not been prosecuted by the minister, when the minister knows full well that the illegalities have taken place, is no reason to turn around and place the sanction of law upon what has been illegal practice in the past.

Bill Young, a former chief forester, in dealing with this general subject matter in March of this year, said that such a scenario has been Forest Service practice for years — that is, people sitting down and deciding what they are going to bid on timber. The former chief forester says this has been going on for years. I know of situations in the northwestern part of the province where it has gone on in the past, and now we're going to approve it.

One of the principal points espoused, I gather, by this government when it is convenient to do so is that when you are bidding to do public works, the public should get the best price possible, and the lowest bidder should prevail so that the public has to pay out the least amount of money to get the job done. That's a fine principle. The Minister of Tourism (Hon. Mr. Richmond) applauds that and says that's fine. The companion to that is the auction block, which is having something to sell, putting it up to auction and hoping to get the highest price that you can for the product or the commodity or the item that's being sold. That was the principle behind timber sales. Put up a block of timber for sale, have people interested in getting the licence to log that timber — that timber being public property — then they put in bids. They said: "I'll bid $10 a thousand." "I'll bid $15 a thousand" — or whatever it may come to. The amounts of money vary at given times depending on the species and other factors. The principle of that was that the public would get the highest value possible out of its possession, namely the tree.

We are now going to abandon all of that. As a result of a provision in this bill, the public is now going to legally find themselves getting the lowest price, the lowest value, for their product. If a number of people can sit down and get the approval of the regional manager of a forest region to engage in rigging the bids — having only one person bid on a timber sale when there otherwise might be two or three — then who is going to get the short end of the change? The general public.

The principal philosophic question which this government says it espouses on the one hand, it denies on the other. You shouldn't be entitled to have it both ways. The only reason that you want to have it both ways is that you are not there, Mr. Minister or Mr. Government, to serve the public interest, in your mind. The public may think you are. The public elected Social Credit with the idea that it would be there to serve the public interest, but you are not serving the public interest. You're denying the public interest to serve private profit-makers, and the public loses out in that type of process.

Is it any wonder, with that type of activity, that stumpage revenues go down? Is it any wonder that you've got to raise taxes, to dig into the pocketbooks and the purses of the individual citizens in this land, to make up the shortfall when gifts like this are going on?

The role is reversed. The role of government has been diluted and injured by the very processes that are sought to be established in this particular bill. I think a minister who will bring into the Legislature a bill which sanctions bid-rigging, or the possibility of collusion between parties not to bid on timber, does not deserve the confidence of the people of B.C., because that minister is not serving the interests of the people of B.C. by that process. When people can agree not to bid on timber, competition disappears, and that's what the minister said. He said: "I suppose we could eliminate it with a small business person as well as we've eliminated it with the large operators." He then seeks to say that he was expressing with that thought something which he intended to put into practice.

When you can agree not to bid on timber, competition disappears, the people of B.C. get the lowest possible price

[ Page 6864 ]

for their timber that is being sold, and even worse than that is to place the onus upon a regional manager for sanctioning such bid-rigging practices. All in all, it's a sad day for the general public when this bill, in its total, saw the light of day.

There's one good feature in it, yes, but even that in conjunction with the item in the estimates, which I only refer to in passing, is window-dressing, and the expectation of anything real developing under it will not be met. Part of the good feature of this bill rests upon bonus bid money on timber sales. If you're going to establish a bid-rigging process to cut down on the potential amount of stumpage that you're going to get under timber sales, then the money just will not be available for the job creation aspect that's contained within this bill.

All in all, the bill is a disaster and a sad moment for British Columbia.

MRS. WALLACE: One would wonder why we are debating this bill in the Legislature and addressing our remarks to the Minister of Forests, because really the Minister of Forests has very little to do with this bill. He is simply the messenger that is bringing this bill to the floor of the House on behalf of the major forest interests in this province. He's become a mouthpiece for those major corporations. He has completely disregarded the recommendations that were made by Peter Pearse in his report relative to the Big Ten, as he called them.

[Mr. Ree in the chair.]

Another area that he is disregarding completely in this bill is the matter of land tenure and tree-farm licences. One thing that Pearse said in no uncertain terms was that there should be no more tree-farm licences issued, because that resulted in a giveaway of our resource. Yet this minister has continued to issue those tree-farm licences, and now through this measure is moving more and more in that direction.

In British Columbia we have some 45 applications that's the last figure I had — before that minister for incorporation of other types of tenure into tree-farm licences. I think we're all aware that that particular form of tenure is one in which we, as the people of British Columbia, completely lose any control over what goes on on that land — far more so than any land we hold under other methods of tenure like timber sales, cutting licences and so on. What this does is put the control of our own resource into the hands of major corporations. That's basically what it is. The tree-farm licences are held, in the main, by those big ten, with a few little subsidiaries. There is presently 28 percent of our forest land under that form of tenure, and if these 45 applications are accepted it will be well over 50 percent — 56 percent, in fact.

In this bill we are allowing even greater leniency with those major corporations. We're allowing them the opportunity to pick out the choice bits from other forms of tenure they may hold and put them into their tree-farm licence, and to reject the parts that are not good timber-producing areas — that have been let go, or whatever has happened to them — and turn that back and leave that in the hands of the Forest Service. This is what this bill is purporting to do — something far more crucial than it would appear from what the minister had to say or didn't have to say when he introduced this. What he's talking about is the giveaway of hundreds of thousands of dollars of resource. He's giving it over to major corporations who are able to write off their expenses, and then he will turn around and reduce the stumpage to the point where in some instances we even owe them money for taking out our resource. That's the kind of scenario that this minister with this bill is painting. If that isn't undisputed proof that he's simply carrying a message from the major corporations in this province that are engaged in our forest industry, I certainly will take a lot of convincing to believe that isn't so.

Our forest land base, as the minister will agree, is fast disappearing. There are many demands on that land base. Multiple use is a concept he talks about, that certainly the people who are interested in agriculture and rangeland talk about and that people who are interested in fishing, hunting, recreation and wildlife.... All those kinds of things are related to tree-farm licences, because when you set land into a tree-farm licence you are, in effect, setting that up for single-purpose use, because there is very little opportunity; you're at the discretion of the whims of the particular corporation that has that tree-farm licence as to whether or not there is any multiple-use opportunity on that land. We're losing a resource that we should be maintaining for multiple use in the hands of the Crown as the representative of the people who want to enjoy that.

[3:00]

That's one section of the infamous act. Then it goes on to deal with another issue — again, nothing but a giveaway to the major corporations. There have been many similes used to describe what this represents. It's been described as checking out your own groceries at the cash register; it's been described as setting the fox to watch the chickens. Why should we make it any easier? This government is upset with the fact that our ombudsman has pointed out case after case where the scaling that is being carried out now has left great holes, and where small operators, contract loggers and haulers have not been reimbursed as they should. And now he wants to make it looser. He wants to say to those corporations: "Okay, we'll let you decide who goes out and scales the timber, who goes out and tells us how much timber you're actually taking." I'm not saying that one group of scalers is more efficient than another, but I am saying that when you put a clerk at the till in the grocery store, you don't let the people who are checking out the groceries decide who's going in there. You, as the owner of the store, do that. And that's what that minister should be doing. He should be putting someone in there who is responsible to him for checking out those groceries. He shouldn't be putting the fox to watch the chickens, and that's what he's doing with this particular section of the bill.

MRS. JOHNSTON: Do you guys trust anybody?

[Mr. Strachan in the chair.]

MRS. WALLACE: Yes, but I don't trust someone who has a vested interest to come up with the figures as to how much he has actually taken out — and I don't think you would either, Madam Member from Surrey.

Interjection.

MRS. WALLACE: No, and certainly the things that the ombudsman is pointing out have indicated that. We have seen waste. We have seen all kinds of things going on. I'm now ranging away from the bill a bit, and those are things we'll talk about in the....

[ Page 6865 ]

Interjection.

MRS. WALLACE: Well, I'm not ranging away from it when I'm talking about scaling, Mr. Minister. When we get into those other things about waste, which is in a way related to scaling — if you don't get that log out there to be scaled, it isn't scaled.... But we'll deal with those things more specifically under this minister's estimates.

I want to talk about Section 11 of the bill, which amends section 160 — and you have to go back beyond subsection (c) which it amends. Section 160 deals with offences, and it says:

"A person commits an offence who by intimidation...for an improper purpose threatens to make an application for an agreement...or (c)" — the section which we're amending — "participates in or is a party to an agreement or arrangement among two or more persons, under which (i) one or more of the persons agrees or undertakes not to make an application for an agreement, or to submit a tender or bid...or (ii) particulars in an application made for an agreement, or the amount of a tender or bid submitted, under part 3, by one or more of the persons are arrived at."

So it says that you commit an offence if you make any deals under the table regarding bids for timber.

What does the amendment do? It says that's okay, as long as you tell the local regional manager and get his approval. Well, I don't think it's okay, and I can tell you that there are a lot of people in British Columbia engaged in the forest industry who don't think it's okay. What that does is simply give anybody with an inside track the opportunity to get that timber. And it's certainly taking competition out of the bidding, and as my colleague from Skeena has indicated, bonus bids are going down the tube. They won't happen any more. Why should you pay more if you can get it for less? That'll be the philosophy. And why not? If this minister is prepared to give away our resource, then I'm sure that the people out there who are dealing in forest products are going to take advantage of that. If he's prepared to give it away, that's fine. If he's prepared to let them wheel and deal, that's fine, they'll do it, because if they don't, someone else will.

Mr. Speaker, when I think of this province and its forest resource and what it was a few years ago and what we have done to it in spite of the Sloan report and the Pearse report.... We have denuded our forests, we have given them away, and now we are proceeding to do that to an even greater degree. We're moving to put more and more of our forest land under the control of the big operators under tree farm licences — complete control of that resource with very little input from us as to what happens with that timber. We're preparing to tell them: "Okay, you go ahead and do what you like with it. Tell us how much you take out and we'll bill you for it, and if you think that's too much we'll probably reduce the stumpage." And then we're telling them: "If you want to wheel and deal under the table and come up with private deals so there's no competition and you don't have to pay any more than the bare minimum for this timber, that's okay too." That's what we're doing in this bill. That is an absolute disgrace as far as our number one industry in British Columbia is concerned. As far as the taxpayers of this province are concerned, the need for that revenue is there. We should be enhancing that, getting more and more so that we're able to meet our social service bill, instead of chopping away at health, education and all the other social services. This is one of the major concerns that we should be looking at and building, getting more and more ability to recoup for the Crown from that industry. Instead, we're saying: "Give it away to the forest companies. Let them have it. Let them take it over. It's a sunset industry anyway. Let it die and we won't worry about it."

Mr. Speaker, this bill is one of the worst pieces of legislation to hit this Legislature this year because it deals with our number one industry, an industry on which the very lives and work of our people.... Believe me, I know of what I speak, and I'm sure you know too, Mr. Speaker. There's a lot of forestry in Prince George. There's a lot of forestry on Vancouver Island. There are a lot of tree-farm licences on Vancouver Island, and we have no say over what happens on those tree-farm licences. This is just going to exacerbate the problem and make it worse and worse. Our forest resource industry will soon be a sunset industry if this ministry doesn't take steps in an entirely opposite direction than this. By these kinds of actions, they're presiding at the death of the forest industry, and we will indeed find that it is a sunset industry. That is one of the worst things that could happen to British Columbia, because without our forests we are not going to be able to continue building the kind of society to which we as British Columbians are entitled.

DEPUTY SPEAKER: Before recognizing the next speaker, let me advise the House that although this bill does contain more than one principle, we should confine debate to the principles in the bill and avoid debate that might be better covered in committee stage of this bill, or debate that might be better attended to during the estimates of the minister.

MR. WILLIAMS: Well, COFI's boy is here, and he's been in charge. He's been their boy for a decade.

Interjection.

MR. WILLIAMS: No, no. That's the reality. Who do you hire as deputy? COFI's boy. After he's done all his work, you send him back to the Council of Forest Industries. The lobby is right here in the Legislature. You'd better believe it. They set their agenda, and he jumps to it. That's what we've got before us today. That's been the agenda for the past decade. What the lobbyists want, the lobbyists get. That's what they get at the hands of this minister.

A confidential report was sent to the Premier in 1983. To the Premier! They don't even deal with junior over there. They set their agenda in terms of what they want out of the public forests, and by gosh, they've just about got everything they wanted. Item 17 in their list to the Premier said: "We want privatized scaling." What they're getting in this bill is privatized scaling. That's what they want. It's like they said — they want their boy. They want people outside of government to be measuring the timber. That's nothing short of incredible when you consider that we don't really get what the stuff's worth anyway. It's not good enough that we don't get what it's worth. Our estimates say it will cost $259 million to run the Forest Service. Our revenue from forests will be $150 million. That's a shortfall of $109 million, and with us paying that slack of $109 million, they still want their boy to privatize the measurement of the logs. It's nothing short of incredible.

[ Page 6866 ]

The greed knows no bounds. One might live with it if we had a super-competent, efficient industry, but the very roots of their inefficiencies lie in these kinds of problems, in terms of being their boy. What they should face is genuine competition out there, like the rest of the industry in other parts of the world — in the United States — but they don't. So COFI's boy is here. It's all spelled out in a July 1983 confidential document that went to the Premier, saying: "This is what we want." Recommendation number 17 assigned full log scaling responsibility to the licensees. That's what they wanted, and that indeed is what they are getting. So if we wonder who runs the public lands of British Columbia, all we've got to look at is documents like this. They set the agenda for this minister, and he jumps to their tune. You count on it, because he gets the word directly from the Premier's office as well.

In terms of scaling, it has been a scandal in this province. The ombudsman has documented the scandal. He has documented it in the form of the Shoal Island case, where we clearly lost something in terms of the private sector, the contractors and the public sector, in terms of royalties and stumpage — $10 million. The court case, the examination for discovery, goes on. I will wager the shortfall at Shoal Island was none of this nonsensical 3 percent, 6 percent, doctored document stuff that we've had out of this ministry. I will wager it was a 15 percent shortfall consistently by most measurement....

We still haven't got the report back. What kind of independent inquiry do we get out of this outfit here? It gets sent to a middle-level bureaucrat to come up with the new numbers. What kind of appeal system is that? There is no doubt in my mind as to why you people want rid of the ombudsman. You want rid of him because he has blown the whistle on this and countless other scandals that have been under your noses and that you haven't dealt with.

DEPUTY SPEAKER: To the bill, please.

MR. WILLIAMS: To the bill — yes, scaling. The biggest one that has come under your nose and that you've stonewalled and haven't dealt with is Shoal Island — stonewalled indeed. The most recent one was a small one, a rancher from the interior, cheated in terms of stumpage; cheated in terms of what he should have got, in terms of what was his due for his timber; cheated because he counted on a scaling system that wasn't accurate, that wasn't proper; cheated by almost half of his money. It breaks up the family.... The member for Kamloops (Hon. Mr. Richmond) wrote a letter and said you should compensate.

Interjection.

MR. WILLIAMS: Oh, yes. Well, anyway, let's look at that one. He was cheated. What did the ombudsman say in terms of the way you operate your scaling operations or the way they've been operating? Daily scale sheets were not numbered, so that there could be one sheet taken out and nobody would know the difference in terms of what went through that day.

[3:15]

What else does he say? That particular company had a special arrangement, different than everything the ministry required. How many special arrangements exist in British Columbia? The losses the ombudsman totals up are totalled currently at $257,000. That broke the man. That broke his family. That's what happens as a result of this at the local individual level.

What does he also say? You allow mixed bundles, different markings — no way of checking them at all. They have their own tally sheets, and then they changed the handwriting so that there is handwriting on one occasion that had certain numbers, and then it got redone with different handwriting and different numbers. That's happened as well in terms of these operations. It's nothing short of amazing.

Those are problems we've had. The company is not satisfied with that. They want more. They want to be in charge. Now the minister said when we asked him questions about the Cobb case a week or so ago: "I thought it rather unfortunate that the ombudsman should table the report when he did, because he knew full well that my ministry staff and people from the A-G's office were meeting that very afternoon in ongoing discussions toward the resolution of the problem." What kind of guff is that? That's the same line you peddled when you brought the RCMP out on the Shoal Island case and said: "Oh, dear, the ombudsman shouldn't have told us about this because we were going after it with the A-G's office." A year or so later, the same phony line is peddled. Have you resolved it? No, no, it's just the line that was used on the occasion, hopefully to be forgotten like so many other empty lines that we've got from this minister.

So you want a system of private scalers. Well, then, the question is: who is going to make their paycheques out? You know who is going to make their paycheques out — the guy that gets dinged in terms of the royalty and stumpage charges. What an impossible situation! If they don't like the scaling work that the scaler does, fire the man; hire another contractor. Don't you think the message will get out then, readily, in terms of what they want? You bet it will get out there clear.

Each person wants their paycheque at the end of the month. It's an absolutely impossible, intolerable proposal that does put these people in charge. Your responsibility in this Legislature is to deal with the public interest in terms of preserving the public equity in our trees. That can't be done when you privatize the system of measurement. It cannot be done when you privatize the system of measurement, and that's the job you've got.

I've had calls from people in different parts of this province. I've had calls from people on the coast who talk of a 50 percent shortfall in measurements, in scaling. As recently as Friday evening I've had calls on your former colleague's radio show from people in Prince George, contractors who have been cheated in terms of scaling. Yet you want to carry this one further in terms of giving them complete control.

Mr. Minister, how much monitoring of scaling has gone on since 1976? How much check scaling and monitoring of scales have gone on since 1976? You've been doing it thoroughly? Nod your head. No, you haven't. You'll find, in examination-for-discovery material in cases before the courts right now, that there has not been a conscious monitoring of scaling in British Columbia since 1976. And not satisfied with that, you're putting it totally in the hands of the private sector.

Interjection.

MR. WILLIAMS: Well, it's there and the stuff's coming out. And you say to the poor rancher, Mr. Cobb: "Go to

[ Page 6867 ]

court." He can't afford to go to court. You say to the other contractors, as in the Shoal Island case: "Go to court." It costs hundreds of thousands of dollars to go to court. That is absolute nonsense, because the public trust is vested in you to see to it that we get our due in terms of the value of trees. It just isn't going to be.

The main guy at Holding Lumber said in the Kamloops News just recently: "They are digging back into a past that was full of errors." You can be sure in which direction the errors were made, can't you? What happened with the check scaling that Mr. Mahood had done on Shoal Island? The check scaler operated there for a period of time, but as soon as B.C. Forest Products knew that check scaling was going on, they threw him off the property. He was simply trying to check the public interest.

This is a major scandal, make no mistake about it. It is a matter that has gone to the Premier's office. It has been directed out of the Premier's office, and we are all the losers as a result. Make no bones about that. As the member for Skeena (Mr. Howard) says, it allows collusion. My God, we are getting amendments before this House.... When the minister got up, he mentioned three sections in first reading, which was months ago. He's been hiding in the corner with Bill 3, and we're getting it in the dog days of summer. Does anybody think it's an accident we're debating it no, near the beginning of July? That indicates the kind of feelings over there, the kind of trepidation over there about dealing with this mess. You've lived with collusion through your tenure, Mr. Minister — and it's there, you know.

DEPUTY SPEAKER: Order, please. I find that remark quite unparliamentary. It imputes a dishonourable motive to another member, and it will be withdrawn.

MR. WILLIAMS: Sure, I'll withdraw the comment.

DEPUTY SPEAKER: Thank you. Please proceed on Bill 3.

MR. WILLIAMS: I'd like to quote from a book called Cutting Up the North. The author, Mr. Bemsohn, questioned Mr. Waterland on this matter of collusion: "Did you ever have a case of collusion or bid-fixing brought to your attention, and did you ever prosecute?" What was the response? "I'm not going to answer that question." Do you remember that? The withdrawal was hardly necessary, Mr. Speaker. "I'm not going to answer that question." His assistant, Mr. Bob Wood, was there. He was the prime consultant who helped him rework Peter Pearse's royal commission work, and Mr. Wood said: "That should be answer enough. It tells you what you need to know." Indeed it does. So price-fixing.... The case that Mr. Bemsohn was raising was the case of a $100,000 payoff in terms of a small-scale bidder bidding in place of a major. It is clear from the report in this book that the minister did know about it, and that the ministry was aware of it and lived with it.

Now he brings before the House legislation that will allow collusion, provided the district or regional forest manager is aware of it. So collusion is okay as long as my middle-level civil servants are aware that there's collusion. That's what's involved.

Not only this, you're dealing with the tree-farm licence system as well. As the member for Cowichan-Malahat (Mrs. Wallace) says, you have proposals for turning and rolling over other forest licences into TFLs, and that's a system that gives commitment of the land virtually in perpetuity through an evergreen system: the complete abolition of the public, in terms of the tenure system and in terms of flexibility for the system. What does it do? Their existing licences.... They can get rid of their dog stuff, as the member for Skeena (Mr. Howard) says. So if they've got an existing forest licence and they've fouled up the nest in the north half: "Why, we don't want that in the future; we've already ruined that area." That's happened with Westar. And the compliant minister, the patsy in the comer, simply says: "Okay, boys, I'll roll over and play dead."

DEPUTY SPEAKER: Hon. member, please avoid personal references to another hon. member.

MR. WILLIAMS: That's what the situation will be. So if there is an area where they've fouled up a part of of their existing licence area, they can walk away from it, and then keep the best lands and put it into a tree-farm licence forever. What a neat system! It encourages irresponsibility. They can leave the bad stuff behind, have the good stuff forever, and that's okay. They couldn't do that before: the whole thing had to be rolled in.

That's what I mean. The greed knows no bounds in terms of what's been happening. I don't believe for a minute that when the Council of Forest Industries first came along they thought they could get everything they wanted out of this minister; but they've got it. It's always worth a try. That's in fact what they've done. And every time it is roll over, play dead, what do you want next, boys? That's been happening in this province for a decade. We have a ravaged forest landscape, in terms of non-restocked land — as I said before, a swath 200 miles long and 50 miles wide — and in terms of a legacy of weeds left behind, primarily at the hands of this minister. It's simply endless. It suits the minister fine.

The people that have been cheated are still left high and dry. The report still hasn't come in from Mr. Grant on the infamous Shoal Island case; and that was only one dryland sort. There were another half-dozen of them on the coast, and they all operated the same way: hustle, hustle, hustle, and you can't see what's happening. On it goes. We're all the losers in this exercise.

This minister has not been pursuing the public interest in the way it should be pursued. We are not assured that since 1976 the scales have been proper or adequate. There has not been the review that there should have been. This moves it all into the private sector and leaves the scalers in the most vulnerable, impossible position: that is, they won't be hired if they don't sing the fight tune, because the companies do the hiring. It's an absolutely impossible situation, one that the minister obviously is willing to live with, but one that he's clearly a little ashamed of, because it wouldn't be before us at the end of June when the legislation came forth in February. That tells us volumes about how he really feels.

Of course the opposition will be voting against this legislation. It's just adding to the kind of infamy that surrounds the Ministry of Forests today.

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

Leave granted.

[ Page 6868 ]

MR. REE: Mr. Speaker, from the hub of the Island, the great city of Nanaimo, I'd like the House to welcome Laverne Kilner, Joyce Tisseur, Ian Namath, Stan Anderson, Mauno Pelto, Ken Hallberg and Ed Kisling.

[3:30]

MR. NICOLSON: I too rise to oppose this bill, the Forest Amendment Act, 1985. Mr. Speaker, this bill in principle, I think, proves the Horatio Alger myth is still alive in British Columbia. If you want something badly enough and you work at it hard enough, you can get it, even if it's the forests of British Columbia; you can get it almost for free. I would have thought it absolutely impossible that we would have reached a day in British Columbia when revenues from forestry don't even cover the cost of administration in the ministry and its various programs.

[Mr. Ree in the chair.]

Mr. Speaker, it has been expressed very eloquently. Just to maybe put it a little more concisely: what we are proposing here today is analogous to allowing shoppers to go into Super-Valu and check out their own groceries. That's what we're talking about when we're talking about this new scaling provision in this bill. Safeway isn't stupid enough to let the customers check out their own groceries; Jimmy Pattison's Overwaitea isn't stupid enough to let the customers check out their own groceries, and Super-Valu certainly isn't crazy enough; nor are 7-Eleven and Mac's and all the other people in the grocery business. But this government allows people to check out their own logs. It is absolutely incredible, and that is what we're doing in this bill; that is one of the principles of this bill.

Mr. Speaker, this government is allowing the big majors.... Particularly, in my area, Westar has been allowed to run roughshod over the ministry and the people of British Columbia. Westar abandoned Kootenay Forest Products, but they were allowed to keep the timber rights to the old privately held lands of Kootenay Forest Products, which were purchased back in about 1974. They were allowed to keep the timber rights to those portions which were previously privately held for 15 years. They've got 15 years to harvest that, and they've got an extra five years if they can't get the job done in that time. That's the kind of special treatment they've been getting. They've made an absolute mess of harvesting TFL 23, and, by any measure, it should be taken away from them and turned over to someone else. But again, they will be allowed to walk away from parts they don't want or that now don't fit into their plans but which they have dominated and monopolized and kept out of productivity for some 25 years. Now, after 25 years, they're going to be rewarded by being allowed to, maybe, high-grade that which is left.

What is going to happen in this province is that we're going to see more and more decadent, uneconomic land created. I think this government, along with COFI, are no longer interested in the sawing and manufacturing of lumber, they are simply interested in the cutting and export of fibre, and not necessarily manufactured fibre but raw logs. We've seen the export of raw logs grow from almost nothing to over 5 percent in very recent years, and I think that by allowing these TFLs to be more or less high-graded we're really paving the way for more raw log export and less harvesting in this province.

There are a lot of people who have kept forestry alive in this province over the last two or three years, and a lot of those people have been cut right out of the public lands; they've had to depend on private lands. Those people are paying two, three and four times what the stumpage rates are for these major companies, and they are meeting their payrolls. They have been going through these tough economic times with very tough prices in the world lumber markets, although the volumes being bought have been fairly high.

This is certainly not a solution for the problems we have in the industry. I think this is a way in which we will see less employment in the forest industry. We will see less utilization in the forest industry; we will see rewarding the greedy and penalizing the needy: that is, those people who have shown good faith, who are the real entrepreneurs, the real risktakers, the real business people, the real backbone of the business community of this province. They are the people spurned by this piece of legislation, and the inefficient, the people who have shown an inability to cope, are the ones rewarded, listened to. Certainly in my area I can see that this type of move is going to be of absolutely no good whatever.

So here we have, among other principles in this bill, the new honour system checkout at the supermarket. And we have, I think, a program, the aim of which is to increase log exports from this province. For those two reasons I am absolutely against the principle of this bill.

MR. LOCKSTEAD: Because the major industry in my riding happens to deal with the forest sector, I did want to spend a few minutes on this bill. I don't know what I can add after what my colleagues from Skeena and Vancouver East — and other colleagues — have said, but I think anyone who has an interest in the forest industry in this province, any member in this House, should speak on this bill.

It was interesting to note that the minister, in opening debate on second reading of this bill, had nothing to say. As my colleague pointed out, this bill has been on the order paper since last February, I believe; for several months at least. Here we are into summer, debating this extremely important bill to all the people in British Columbia, and I can't understand why at this time. However, here we are.

The bill deals essentially with two main principles, the first being tenure and the change in stature of TFLs. I'm not sure that that's the correct term, but the minister knows very well what we're talking about. The result of this change in principle was very well explained by the members for Skeena and Vancouver East. I've taken the trouble to read through the Pearse report of recent years. The Speaker will remember that Mr. Pearse, appointed as a royal commissioner by this Legislature under a former Minister of Forests, who sits in this House this afternoon, did a very expensive report on the forest industry of British Columbia. Part of that report deals with tenure. In fact, a goodly portion of Vol. I deals with various forms of tenure here in British Columbia.

I certainly don't intend to get into the various forms of tenure here this afternoon, because what we're dealing with now is a principle that allows the minister, without public hearing and at the discretion of the minister and/or some junior people within his ministry, to turn over — in other words, flip — TFLs, or portions thereof, which is a new concept in forestry here in British Columbia. The reason I point to the Pearse report is that one of the things Mr. Pearse says is: "This kind of activity should never be allowed to take

[ Page 6869 ]

place again in British Columbia." Apparently it did take place at one time in some form of tenure. However, most of the recommendations of the Pearse report — certainly the major recommendations — were never implemented in this province. I see the minister shaking his head, and he's right; they never were. So in terms of that concept, Mr. Speaker.... I was going to quote extensively from the Pearse report — I've marked out several sections here — but the minister knows very well what I'm on about. Suffice it to say that from 1976 onward the types of principles that we're dealing with in this bill were recommended against by Dr. Pearse, by many of the people of this province in this industry. Hopefully it will not be implemented by this government, but I fear the worst.

Just a brief note on scaling, a second major principle of this bill. Actually, I'll pose a question or two to the minister. First, who is best able to protect the public interest in getting a fair assessment of the public's timber resource? Is it the forest company, which owes its highest obligation to its shareholder, or is it the scaler, employed by the government and accountable to it? I wonder if the minister, when he closes debate on this bill, would answer that — if he would answer to this House and the people of British Columbia how privatization of scalers in British Columbia, as opposed to government scalers who are paid for and work for the government, work for the people of this province, have the best interests of all of the people of this province as their main concern — how privatization, which could allow corruption to take place.... The word has been used several times this afternoon. We're opening the door to corruption in this, as has been indicated by many of my colleagues here, the Shoal report from the ombudsman and many, many other examples that have been cited in this House. So that's one question.

I'd like to know how the government can seriously entertain turning over the role of assessing stumpage and royalties of public timber to a body that has a direct interest in obtaining the resource at the least cost. That's what the industry is all about. It's not necessarily big business, small business — they want to make the best profit they can. But there are checks and balances. What the minister is doing here is removing one of the major checks and balances for protecting a resource that belongs to all of us here in this province. Mr. Speaker, that's exactly what's happening, and I'm very much opposed to that happening here in British Columbia.

Mr. Speaker, I'm going to make a promise to you — there's no use making one to the minister — that should we become the next government of this province.... I think there's a very good chance, God willing, for the best interests of the people of this province, that we will be the government after the next provincial election, whenever it happens: next fall, next spring, next summer; that's fine. But I want to make you one promise: I'm going to work as hard as I possibly can, no matter who the new Minister of Forests is, to have this bill and bills like this repealed from the books of this province.

[3:45]

MR. DAVIS: Mr. Speaker, I'll be very brief. On the basis of what I've heard so far in the House this afternoon, I couldn't possibly vote for the bill, but we're dealing here, I assume, with what I'll loosely call privatization. I hold no particular brief for public servants. I'm not at all sure that public servants as scalers are necessarily the best scalers. However, this legislation seems to me to rest on the existence, perhaps even the establishment, of a profession of people — we'll call them scalers — who are in some measure independent, certainly of those who will benefit from deficient scaling. I hope that the minister, when he concludes this debate, will indicate to me how independent these scalers can be.

The members opposite talk about the scalers inevitably being in the pocket of the forest products companies who will benefit if the forest resource is underassessed. Can these individuals be professionals? Will there be a professional group? Is there a professional group with its own code of ethics, its own particular abilities, its own independence? Because if not, we have a problem.

The opposition has said a great deal which implies that there are no checks and balances. I think if there is a profession made up of people who are professionals and who can be checked upon by certain government employees from time to time, perhaps we're covered. The opposition typically has little faith in the ethical behavior of individuals other than those employed by government. I don't go along with that. But I would like to hear from the minister what protection the people of the province have, who in most instances are the true owners of the resource. I'll rest my faith in a profession made up of people who are not necessarily employees of the Crown, but I'd like to hear that from the minister.

MR. MITCHELL: Mr. Speaker, I find it quite shocking that we've only had one member from that government to stand up and defend this bill.

MRS. WALLACE: He didn't even defend it.

MR. MITCHELL: As my colleague said, he didn't even defend the bill. He too has reservations. But we are looking at the main industry of British Columbia; we are looking at the main resource and wealth of this province. If there's ever been a bill that has come before this Legislature, it is a bill of this nature that should have been given to the parliamentary committee so that members from both sides of the House could sit down and listen to the experts who are harvesting our resources, who are working in our industry and who really know the facts that are taking place out in the forest.

In our own caucus we have been very lucky, because our debate leader has arranged every Wednesday for the last two or three months an opportunity for members of the forestry community to come in and meet in open committees and present the problems of this industry. We have been lucky to listen to Ian Mahood and members from all phases of the industry, including COFI, bringing the problems that actually exist out there. Not once did any of the government members take the trouble to come in and ask questions and participate in those debates. The problems that are facing the whole forest industry in British Columbia are because of the mismanagement that has taken place in the last ten years in the rush to give the industry away, to give the resources away to fewer and fewer people in the industry.

I know that in forestry we do have the small business section, and small acres of timber are given out to bidding. We had the opportunity — because our debate leader arranged it — to go and view a 20-hectare piece of the forest that went out to bidding. When you look at the money that was raised from those 20 hectares, the province received $189,000 in revenue. Built into that bid was the total cost of the silviculture, the replanting of the land when it was finished. I believe it worked out to.... The price they paid was in the round figures of $22 a cubic metre, and the cost of

[ Page 6870 ]

replanting it worked out to something like 85 cents a cubic metre. When you take those figures that the province received for their timber they sold under the small business program, if you used the same figures for the rest of B.C. we'd be receiving something like $600 million a year. Instead we're actually losing money from our forests. It indicates the mismanagement that has taken place.

It's nothing more than rot and scandal that has taken place in British Columbia. I can understand why the private backbench members of the government will not get up and defend it, will not get up and add their names to be recorded in the Hansard of this province of what is taking place.

Mr. Speaker, I implore that you maybe have a talk quietly in the corridors, or in an office, or in your caucus — though I know Speakers do not sit in caucuses — and have the minister refer this bill and the problems it's going to create to a parliamentary committee; to a committee that can go out and receive the same input that our caucus received from the people who are involved in forests, people whose livelihoods and investments are resting on the line of what is taking place. We've heard the stories from the Shoal Islands, and we've heard the stories of Jim Cobb. Although the minister from Kamloops denies that he recommended that the government reimburse him, he did state in his letter that he would like fair consideration to be given to that particular individual.

The ombudsman has shown in his in-depth studies time after time the mismanagement that's taking place in B.C., and this bill legalizes a lot of the offences that took place in the past. When you look at it, it's like, in my old profession, turning the police forces over to the Mafia. That's actually what you're doing. We make comparisons of people going into the liquor stores and picking up their stock and running it through the cash register themselves. It's the people who are enforcing and doing the checks and balances out in the industry with a fair, properly administered Forest Service who are going to protect the resources and the people of British Columbia. That is the same position as the police forces throughout our democracies have: to make sure the laws are properly looked after. We all laugh if you say that we'd turn over the police forces and enforcement to the Mafia. But it does happen in places, and you have corruption. Not only must the law be correct; it must appear to be correct.

I implore the minister that this is one of the bills that should be turned over to a parliamentary committee. We should have an opportunity to hear, from those involved in the forest industry, what this is going to do, not only to their jobs and their industry, but to the revenues that should be coming to the people of British Columbia.

We have stated on this side of the House that we will be voting against the bill because the bill is poorly written; it's bad for the finances of this province; and most of all, it is not going to build a competitive, strong industry, because if you continue to give away to larger companies more and more control of the resource, the inevitable thing that will happen is that inefficiency will develop. When one small company can afford to pay $189,000 for the timber from 20 hectares, imagine if they bid for that and paid for it if they were financially competitive and they worked hard. What's happening out in the industry? We're giving our resources away. Now we're allowing the companies to look after the checking. We're allowing collusion. We're allowing all the other inefficient ways of handling the resources, to be turned over to companies and friends.

We are going to be in a worse shape as the years go by. I think it's important that there must be a time when we look at what's happening. We don't have to keep waiting until we get right to the bottom of the pit and have another royal commission. We have the opportunity to have a mini–royal commission by utilizing parts of parliament, and that's the parliamentary committees. The parliamentary committees were set up in our constitution to deal with problems like this. This government has the opportunity to use a mini–royal commission by utilizing the competency of the elected MLAs from both sides of the House to go out and listen to the experts, to listen to those who are going to be affected. I know that though none of the government members will stand up and defend the bill, if they have an opportunity to listen, as we have in this last two months, to some of the experts, they will realize the error of their ways.

MR. MacWILLIAM: I also rise to very strongly oppose this piece of legislation. Many of the arguments have been presented before — pertinent arguments. The minister has just rolled over to the demands of these large firms instead of being hard-nosed about it and saying to them when they complain that they're having'a tough go of it, and they need privatized scalings and the rollover of forest licence tenure, and the TFLs.... Instead of the minister saying, "Upgrade your operations, become more competitive, get out there, and modernize your plants," he's rolled over with a giveaway to these corporations. The provision of the private scaling — I just can't believe that the minister with the due responsibility for control of a public resource.... I just cannot believe, Mr. Speaker, that that minister would roll over and basically allow the wolves to protect the sheep. Because that is what it amounts to. As one colleague was mentioning, it's basically allowing them to ring out their own till in the cash register. Nobody should be given complete control of a public resource in that type of manner. It's not a matter of distrusting anyone; it's a matter of just ensuring that the public interests are preserved in such a valuable resource. The minister has just caved in to these requests. I'm sure that they are rubbing their hands in glee. They cannot believe that he has granted their Christmas gift wish.

Through such legislation, many of the firms are going to have a virtual hammerlock, Mr. Speaker, on our timber stock. It's going to lessen the availability of wood supplies for the small operator. It's going to make competition between the large operator and the small operator just that much more inequitable. This government doesn't seem to be interested in the long-term preservation of this resource. It just doesn't make sense what it's doing, if it has those interests in mind.

[4:00]

[Mr. Strachan in the chair.]

The minister seems to be.... He's referred to the statement that forests are a sunset industry. I want to say, Mr. Speaker, that if he continues in the same direction that he is continuing through this legislation, our forests will be a sunset industry. We will not be in a position to be able to maintain those forests in adequate condition. We're already suffering from neglect in that regard. It's rewarding inefficiency, and it's penalizing true entrepreneurship.

It's happening right now, and it's happened in the past. The American market has long condemned us for supposedly subsidizing the production of our wood products. The minister's response is that basically we're going to give it away by

[ Page 6871 ]

again allowing them to cash out their own groceries at the cash register. The situation is just not acceptable.

The Pearse report in 1976 suggested very strongly that no new TFLs should be granted. I'll make specific reference to it. Page 118 of the Pearse report, if I may cite that report — and this deals with tree-farm licences — says: "Moreover, new licences of this kind should not be issued if the effect will be to concentrate further timber rights in the few large corporations, a tendency that may arise from the fact that they hold much of the land that might be contributed to potential treefarm licences." Right there in the report in 1976 is that recommendation, that caution, nine years ago. The minister is ignoring that caution and proceeding with faulty legislation.

I speak very strongly against this. I don't think it is in the best interests of an industry that is already burdened with inefficiency. I cannot see any reason for rewarding that inefficiency and compromising a valuable resource that has too long been neglected in the province. No wonder we're in such dire circumstances. I do not support this legislation.

HON. MR. WATERLAND: Mr. Speaker, when I introduced second reading of Bill 3, I was attempting to comply with the House rules. In the some ten years that I have now been a member of this Legislature, I have seen numerous occasions when a bill which really is a series of rather unrelated amendments to a piece of legislation.... I have seen many occasions when such a bill has been introduced: the minister states at second reading that it is probably in the best interests of the House that the different unrelated sections be dealt with in committee. That was the reference I made when I introduced this bill. If I was in error in saying that, I offer my apologies to the House.

However, I still contend that this bill does not have an overriding principle, although one was concocted by the members of the opposition. The principle which they seemed to develop was that it is a bill which provides for collusion and theft, and which would demonstrate that the private sector cannot be trusted. That is not my position, Mr. Speaker. But because the bill is a series of rather unrelated amendments, I thought at that time it would best be debated clause by clause in committee. That will doubtless take place in any event. However, because considerable latitude has been provided by the Chair in discussing the various sections of the bill in second reading, I feel that I must reply to some of them.

First of all, Dr. Pearse did not say that new TFLs should not be issued in the future. In fact, Dr. Pearse, in his royal commission report, stated in several places in his report that tree-farm licences have provided in British Columbia the best level of forest management that we have. He actually encouraged that type of licence. He did say....

Interjection.

HON. MR. WATERLAND: Mr. Speaker, I sat here very patiently while the member for Vancouver East spoke and while the other member spoke. He has a great way of, once he sits down, beginning to chirp up to try to again make the comments he has attempted to make during his turn in speaking. I would just ask that he would extend to me the same courtesy which I extended to him and listen to what I have to say. Perhaps, just perhaps, he may team something.

Mr. Speaker, Dr. Pearse did not say that tree-farm licences should not be issued in the future. He did, as was pointed out by the member for North Okanagan (Mr. MacWilliam), say that if they were to result in further concentration of cutting rights in the hands of industry, they should not be issued. Since new tree-farm licences have been advertised and issued, they have not led to further concentrations so far. We are completely complying with the recommendations made by Dr. Pearse.

Contrary to what many of the members in the opposition suggest, tree-farm licences are not a form of licence issued just to large companies, although I don't have anything against large companies, just as I have nothing against small companies. If the member would cast his mind back to the first tree-farm licence issued since the sixties, he would perhaps recall that that tree-farm licence was issued to the Tanizul timber company. It was a rather small tree-farm licence. They are appropriate in small areas as well as large areas, and it was issued to the Tanizul forest company, which is owned by the Indian band in the Stuart-Trembleur part of British Columbia. That tree-farm licence has been very good for that band and has given them a chance to become much more economically self-sufficient than they had been in the past. They combined their private Indian band lands with Crown land and are operating a tree-farm licence.

Mr. Speaker, the rollover of tree-farm licences from forest licences to tree-farm licences is provided for in the legislation. Because tree-farm licences have traditionally given us the best level of forest management which we have experienced in British Columbia, I and my colleagues thought it appropriate that we allow this type of tenure to exist in more places, providing it leads to those same objectives.

Interjection.

DEPUTY SPEAKER: Order, please. The member will come to order. The minister continues.

HON. MR. WATERLAND: Mr. Speaker, that man has never been the same since his government was defeated because of his policies in 1975. He has resented that ever since. He has resented every member who sits on this side of the House since that point in time.

DEPUTY SPEAKER: To the bill, please.

HON. MR. WATERLAND: Yes, indeed, Mr. Speaker, my apologies.

Mr. Speaker, provision is made for the rollover of forest licences into TFLs. This allows us to enter into the partnership arrangements with the private sector, which are good for the forests of British Columbia, good for the forest industry of British Columbia, good for the employees of the forest industry in British Columbia and also provides for good forest management.

Mr. Speaker, Canadian Forest Products held a series of forest licences in the northeastern part of British Columbia, and they determined that they wished to apply for a tree-farm licence. In order to apply for a tree-farm licence, a rather specific area has to be defined. In determining which areas would be most appropriate and not cause conflicts with other operators in the area who also had forest licences, Canadian Forest Products did discuss with other operators appropriate areas of operation so that there would be a rather balanced

[ Page 6872 ]

sharing of the logging chance, the timber quality and species mixes. So each operator would have a good balance, rather than going out and applying for a tree-farm licence and perhaps picking the best part of the area, and then having that ultimately defeated...

Interjection.

DEPUTY SPEAKER: Order.

HON. MR. WATERLAND: ...and ruled against as a result of public hearings, in which I'm sure many people would object to it.

Because a lawyer who works in Prince George — in fact he is in the ex-office of one of my colleagues — suggested that such discussions could be contrary to a part of the Forest Act, we are amending that part of the Forest Act to make sure that companies can discuss among themselves, with the Ministry of Forests and together as a forest group the most appropriate areas for each of them to operate in.

Interjection.

HON. MR. WATERLAND: This policy has been....

DEPUTY SPEAKER: Just a moment, please. Order, please. The second member for Vancouver East will please not interrupt while another member is taking his place in debate. There is a certain parliamentary courtesy here that is extended to all members. The minister continues uninterrupted.

Interjection.

[Deputy Speaker rose.]

Interjection.

DEPUTY SPEAKER: Order, please! Hon. member, when the Speaker stands, all hon. members take their place. I am sure the member is aware of that. The member was continually interrupting. I find that grossly unparliamentary.

Pursuant to standing order 19, I'll ask you to withdraw for the rest of the day.

Interjections.

DEPUTY SPEAKER: Order, please. The member for Skeena on a point of order.

[Deputy Speaker resumed his seat.]

MR. HOWARD: My point of order is that while you were on your feet, and while you were reciting the rule that every member should sit down, and while you were then moving to ask the second member for Vancouver East to leave his seat, you permitted the Minister of Agriculture (Hon. Mr. Schroeder) to stay on his feet on the other side of the House, you permitted him to walk down to his own seat, and you completely ignored the fact that the Minister of Agriculture was violating the very rule that you were enunciating.

Mr. Speaker, I am submitting to you that you either ask the Minister of Agriculture to leave or you rescind the request that the second member for Vancouver leave. If you don't do that, you are exhibiting discrimination in favour of government, and that should not be tolerated.

DEPUTY SPEAKER: The Chair will accept an opinion from the Minister of Health.

HON. MR. NIELSEN: Mr. Speaker, with respect to the conduct of the Minister of Agriculture, the minister had just entered the chamber and was en route to his seat when you rose. He had not been in his seat; he had just entered the chamber. When you rose, he then went to his seat, which he had not been occupying for the past number of hours. It's pretty obvious to the House why you asked a certain member to leave today, and I don't think it had to do with the point mentioned by the member for Skeena.

MR. HOWARD: I'd like to point out to you that the Minister of Health is ignorant of the facts and has so expressed them to Your Honour. I watched carefully. The Minister of Agriculture came into the House before Your Honour rose. He stood between the Minister of Health — behind him — and the Minister of Municipal Affairs (Hon. Mr. Ritchie) and was standing there talking with those two ministers when you rose. He stayed there standing and talking, while you were still on your feet, and casually strolled down. I submit to you, Mr. Speaker, that to be fair and to exhibit fairness, you must ask the Minister of Agriculture also to leave the chamber because he violated the very rule that you were declaring. If you don't do that, Mr. Speaker, the position of the office of Speaker becomes demeaned a little bit and exhibits partiality. I'm sure the Speaker doesn't want to do that.

HON. MR. NIELSEN: On a further point of order, I think it is the accepted practice of the House than when a member is conducting himself in a manner which is offensive to the Chair and the Speaker rises, that member shall then take his seat.

SOME HON. MEMBERS: All members.

HON. MR. NIELSEN: That member shall take his seat. If a member has been unruly, and that is brought to his attention by the Speaker and he continues to be unruly and the Speaker stands, it is expected that that member shall be seated....

Interjections.

HON. MR. NIELSEN: All members shall be seated, but particularly the member who has caused the Speaker to rise.

Mr. Speaker, I would once again suggest that the all-knowing member for Skeena is quite ignorant of the facts, as he suggested earlier, with respect to the conduct of the Minister of Agriculture. The Minister of Agriculture had entered the chamber and was engaged in a discussion with me and the Minister of Municipal Affairs. The Minister of Agriculture was discussing House business. When you rose, he then went to take his chair. Mr. Speaker, the Minister of Agriculture had not been in his chair prior to that time; he was simply going to his chair. I would think that is quite proper.

It's unfortunate, Mr. Speaker, that some members here can't understand that they do not have a privileged position in this House to abuse the rules as they wish to abuse them. I

[ Page 6873 ]

would commend your patience in dealing with a certain member in this House today.

[4:15]

Interjections.

DEPUTY SPEAKER: Just a moment, please. We've had quite a few — too many — interruptions, and now the Chair recognizes the first member for Vancouver East.

MR. MACDONALD: On the point of order, I hope the Speaker didn't take too seriously the last remarks. Repartee and interjections have been part of parliamentary debate for centuries. If a member interjecting, as my colleague for Vancouver East did, is to be ejected from this House, how would that rule apply in Westminster, where there is often uproar? That is part of the parliamentary process. There is not a single member sitting in this chamber who has not interjected in debate as much as my colleague did this afternoon.

Spell out the rule, Mr. Speaker. Are interjections as repartee to be banned in this House? If so, enforce it uniformly, but it's a bad day for democratic parliamentarianism when that happens.

DEPUTY SPEAKER: Hon. members, the member who has been asked to withdraw from the House rose two or three times while the Chair was standing, and I think that was obvious to me. The interjections were made while the Speaker was standing, audible to the Speaker. The decision has been made, and the decision is finished, and that is clear. The Minister of Forests continues.

HON. MR. WATERLAND: I can't understand it, Mr. Speaker. I'm such a quiet individual. This place seems to erupt whenever I get up to speak. I was talking about the tree farm licences, the rollover thereof and the common practice through many decades in British Columbia of various operators together working out the best areas of operation. As a matter of fact, in the Prince George forest region, which you are very familiar with, we recently went through an exercise where all of the many licensees were asked by the regional manager and by myself to please, amongst yourselves, determine those areas in which you feel it is in your best interests to be working, and if you cannot agree, then we as a ministry will come in and sort out the differences.

Obviously, the second member for Vancouver East (Mr. Williams) prefers that the government act as the dictator and force people to do what they wish, rather than work out arrangements which are to the mutual satisfaction of all concerned parties.

When the member for Skeena (Mr. Howard) opened his remarks, he mentioned that the NDP, their caucus, had been meeting with many people from the various sectors of the forest industry. I commend them for that. I think that that type of exchange is very healthy with all political parties, and I very much urge that they continue that, and I urge all sectors of the forest industry to continue dialogue with them. Because the more they and we understand each other, and the more we understand forestry matters, the better job we can do of debating forestry matters and bringing forth legislation regulations that enhance that industry.

I, too, spend a great deal of time in discussions with all sectors of the forest industry — with the large companies, with the small companies, with independent logging contractors and with the trade unions. As a matter of fact, I think you're well aware of the fact that three senior members of the IWA recently accompanied me on a trip to China. During that trip, we had some very good discussion about forestry matters in British Columbia, a great deal of which was centred around the issue of log exports.

A great deal of time was spent in the second reading debate on a section of the bill which refers to private scaling. Companies will not be scaling their own wood. Licensed scalers will be scaling their wood, and it is possible a licensed scaler could be an employee of a company. I think it would be more common that licensed scalers be the employees of a scaling agency or else be self-employed, but there are circumstances and there have been for years, and there has always been provision in the Forest Act for private scaling by company employees or other licensed scalers when it is more cost-effective to do so. We will be extending that principle in practice, somewhat, in the changes to the scaling requirements.

The member for Vancouver-Seymour (Mr. Davis) mentioned the professionalism. Yes, indeed, I think a person who is a licensed scaler has demonstrated his ability to scale, and we don't consider him to be a party to collusion just because he is not a government employee. We will rely to a certain extent upon his professionalism as a scaler and as an honest citizen of British Columbia. I don't believe that because a person belongs to the BCGEU he is more honest, or that because a person does not belong to a union or perhaps belongs to the IWA he is less honest and will do a less sincere and honest job in scaling.

As a matter of fact, as a part of my discussions on the subject of private scaling, I did have extensive discussions with members of the IWA — Jack Munro, president of the regional council No. 1, for example. I might read a letter sent to me by Mr. Munro in response to a bulletin put out by the B.C. Government Employees' Union addressing the subject of scaling in British Columbia. Mr. Munro had this to say, and I'll table this when I've concluded my remarks. It's addressed to me, Minister of Forests. It says:

"Dear Sir:

"I know better than to respond to an unsigned brief" — and he had read this brief of the BCGEU — "however, I must say that I find BCGEU's submission on scaling quite offensive, as it appears they are suggesting that if you are not a BCGEU member you are less honest. The IWA and myself personally support your moves to bring log-scaling back to where it belongs, as long as the persons scaling have a current permit or ticket. We do not need one person in the middle of a logging or mill operation with the right to shut down that operation in the event of a breakdown in their negotiations.

Yours truly,
J.J. Munro, President
Western Canadian Regional Council
No. 1 International Woodworkers
of America (AFL-CIO) "

It's not just the industry's side or the employer's side of the industry that believes efficiencies can be delivered by having more flexibility on who can scale. The employees also believe that; I happen to believe it as well. But I guess the members of the opposition have every right to disagree, for we do live in a free and democratic society.

[ Page 6874 ]

Mr. Speaker, something disturbed me in the remarks by the second member for Vancouver East (Mr. Williams). He quoted out of context something that Bill Young, former chief forester of British Columbia, had said. Then he implied that Bill Young had said collusion had been taking place in the forest industry for years on bid-rigging and deciding who can bid. I think I know what Bill Young was saying. He was saying — as I have just said — that for years we have encouraged operators in an area to determine among themselves which is the most appropriate area for each of them to operate in so as not to interfere with each other, perhaps to get the best mix of species and size of logs and so on for their particular mill's requirements. That was, I'm sure, what Bill Young was referring to. But the member clearly implied that Bill Young had said that he was aware — the ministry was aware — for years of collusion and bid-rigging in tendering for rights to harvest Crown timber. I want to dispel that innuendo, Mr. Speaker. I know of no one who is a more conscientious forester and had a higher level of professionalism than Bill Young when he was with the ministry and now that he is with the Canadian Forestry Association.

I also somewhat resented the member — several of the members — trying to infer what I had said about various matters. I'm quite capable of speaking for myself. I'm perhaps not as articulate as some of the members opposite, but I usually manage to express what I feel and mean.

Another comment made by the member from Vancouver East was when he read a passage from the book, Cutting Up the North, written by Ken Bernsohn. As I'm sure members know, Ken Bemsohn has been, as they put it, a bagman for the local NDP in Prince George for a number of years. However, I think Mr. Bemsohn is quite a competent reporter; he generally is reasonably objective in his reporting of forestry matters. I disagree with him the odd time, but he doesn't do a bad job. The member from Vancouver East implied that I knew something about a $100,000 bribe attempt. Nothing is further from the truth, Mr. Speaker. I know of no such bribe attempt. When he asked me questions in my office, I thought it appropriate not to answer certain questions, and I did not.

Interjection.

HON. MR. WATERLAND: Yes, Bemsohn is the name. I think everyone knows whom I'm referring to. I don't think my responses to a reporter and novelist in my office should in any way lead anyone to suggest that I knew of any bribery attempts or attempts at collusion, for that is certainly not true.

The member for Vancouver East referred again to "the big boy from COFI." He was referring to Mike Apsey, my former deputy minister, and I cannot deny that Mike Apsey is a big boy. Mike Apsey did not work for the Council of Forest Industries just prior to joining my ministry, although early in his career he did. Indeed, when he left the ministry he went to be president of the Council of Forest Industries. Mike Apsey was a very competent Deputy Minister of Forests. His interests and desires, and whole intent, were to be a good Deputy Minister of Forests, to look after his responsibilities of that time. I think it would be very unhappy indeed if we discouraged competent people in the private sector from spending a part of their career with government and made it difficult for them to move back and forth between government and the private sector, for then we would lose the ability and, I think, the right to call upon the best possible people to act as senior administrators within government. The American system, on the other hand, is quite different: it encourages and takes people right from the private sector. They quite often have a leave of absence from their employers, act in senior capacities in government, and then go back to the private sector. I think that is a rather healthy thing to have happen.

The members referred several times to.... When they were talking about the issue of private scaling, they kept saying that only government scalers can be trusted to scale in a competent manner; that others should not be allowed to do that because they are somehow going to be less honest. They also continually referred to Shoal Island, and said there was a 15 percent discrepancy when government scalers scaled at Shoal Island. I don't think there was a 15 percent discrepancy. In fact, I recently received the report of Don Grant; I will probably be tabling that later today, or perhaps tomorrow. The allegations made by the ombudsman as to a 15 percent discrepancy, after having had discussions with a certain logging contractor, left me somewhat puzzled. I know of no contractor who could go on for two, three or four years missing 15 percent of the wood that he had harvested, and not very soon learn about it in his profit-and-loss statements. Anyway, I made those remarks before, when the ombudsman's report came out. But regardless of whether Friedmann was right or not, it is in my best interest, and the interest of the province, if there is an error in scaling at Shoal Island or anywhere else, that I find out about it and correct the situation, because that's my responsibility.

A great deal of reference was made to the Cobb incident in the Kamloops area, in which Mr. Cobb claimed that the wood he had harvested was not properly scaled. The member suggested that we told Mr. Cobb to go to court. Well, Mr. Cobb did go to court, and he received a settlement. As a matter of fact, Mr. Cobb made a $70,000 profit harvesting timber from an agricultural lease — he paid logging tax on that amount — which was quite a substantial profit from the small area of land logged. The dispute there is basically as to the standard of utilization. There's no way of determining that without any doubt or any question. But we are in disagreement with the ombudsman. We have not yet resolved that issue. As a matter of fact, as I mentioned when asked a question last week about it, it's unfortunate that the ombudsman chose to table his report in the House on the day he did, because he knew, and the executive council had already advised him by letter, that we were meeting that very morning on the Cobb thing and still attempting to resolve it. I don't know if it can be resolved, but we were at that time doing everything we could. We will continue to deal with the ombudsman's office in that matter.

I think it was the member for Cowichan-Malahat (Mrs. Wallace) who said the forest land base is fast disappearing. The forest land base is not disappearing by any stretch of the imagination, but there is a great deal of pressure on the forest land base.

[4:30]

Interjection.

HON. MR. WATERLAND: She referred to the forest land base, my friend. You weren't in the House at the time. Perhaps if you were to read Hansard you would know what she said. She said the forest land base was disappearing, and indeed, there is a great deal of pressure on the forest land base. I'm attempting to make sure that as forest land is used for other purposes, those purposes are in the best interest of

[ Page 6875 ]

British Columbia, that they are higher economic and/or social uses.

That is why I have continued to have provincial forests established throughout the province of British Columbia, which simply means that before land can be removed from a provincial forest for other uses, we have to subject any such decision to a test as to whether it is indeed a higher and better economic and social use. The Minister of Forests in the previous Social Credit government, Ray Williston, had a plan of establishing provincial forests so as to protect that forest land base, and that was carried on up until 1972. When the NDP was government between 1972 and 1975, they abandoned that principle. It was only after I became Minister of Forests and the new Forest Act was passed that we again began to protect the forest land base by placing productive forest land in provincial forests, just so we would be sure that we weren't frittering away the forest land for uses that were not in the best interest of the people of British Columbia.

Mr. Speaker, I have a few other comments. Again, I'm simply responding to comments made by members opposite. The member for Nelson-Creston (Mr. Nicolson) said that when KFP was shut down by Westar, we allowed them to keep private timber rights which they purchased in 1974. We allowed Westar to keep those because those rights were not directly related to the Kootenay Forest Products plant in Nelson. That was their property, which they purchased. As a matter of fact, they purchased it when the second member for Vancouver East (Mr. Williams) was the Minister of Lands, Forest and Water Resources. I don't see any reason why we as a government should have removed those privately-held timber rights from them when they shut down the sawmill. We did in fact recover the Crown cutting rights which were attributable to that particular plant, and we have since had them up for bid proposals from the private sector. I hope that in the very near future a new employment base will be established in the Nelson area as a result of bid proposals received.

Members opposite said that most of the recommendations in the Pearse report were not implemented. I didn't keep a score. A large number of recommendations were made. I think we accepted more than we rejected. Some of them we could not accept.

Reference was made to check scaling made by Mr. Mahood at Shoal Island. No check scaling as such was done, although it was claimed to have been done.

I think I have covered the points raised in second reading debate, and my apologies again if the members thought I was being somewhat cavalier or arrogant in not going into a detailed discussion during second reading. I sincerely thought that because the bill was a series of rather unrelated amendments, they would best be discussed clause by clause in committee. The members opposite chose to do that more or less during second reading. So, Mr. Speaker, I therefore move second reading of Bill 3.

MR. HOWARD: Before you put the question, Mr. Speaker, I'd like to rise pursuant to standing order 42(l), with respect to a material part of my remarks that may have been misquoted or misunderstood. I want to clear the record on that regard. The minister a couple of times throughout his remarks said that we kept referring to government scalers as being honest and other scalers, or scalers not employed by the government, as not being honest. In no way was that statement made; in no way was that implication to be left. What I did say was that putting licensees in the position of being able to scale the timber that they have the licence to cut is putting those individual licensees in a conflict-of-interest position. I just want to emphasize that at no time did we intimate or say, or did I intimate or say, that scalers working for one group were honest and others were not.

DEPUTY SPEAKER: Thank you. That satisfies the Chair under standing order 42. Does the Minister of Forests wish a further explanation under standing order 42?

HON. MR. WATERLAND: Mr. Speaker, I'd only say that that was my interpretation of what the member said. If that was not what they intended, the written record of Hansard will....

DEPUTY SPEAKER: Thank you. I think the matter has been dealt with appropriately under standing order 42. Hon. members, the question is second reading of Bill 3.

[Mr. Speaker in the chair.]

Motion approved on the following division:

YEAS — 24

NAYS — 15

Bill 3, Forest 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. Waterland asked leave to table a document referred to during second reading debate.

Leave granted.

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

ESTIMATES: MINISTRY OF TOURISM

(continued)

On vote 65: minister's office, $151,996.

MR. MacWILLIAM: Before we left off the other day, we had made some progress towards discussing Expo 86 on the basis of three reviews. We looked at it in terms of some historical antecedents; we looked at it as a business venture; we looked at it as a fiscal policy. Because the whole process of

[ Page 6876 ]

debate is a few days old now, I want to go over a couple of points and then....

[4:45]

Interjection.

MR. CHAIRMAN: Order, please. The member for Okanagan North has been recognized by the Chair.

MR. MacWILLIAM: Thank you, Mr. Chairman. I'd like to review a couple of important points, I think, in this analysis as well as some of the questions that remain to be answered. In terms of the historical antecedents of the fair, we have discussed the fact that many preceding world's fairs have been notorious money losers, and there were a few cautionary points. One of the cautionary points is that often there is a...

Interjection.

MR. MacWILLIAM: Thank you.

...significant increase in production and construction costs....

Interjections.

MR. CHAIRMAN: Order, please, would all hon. members come to order. There are about ten different conversations going on, and only one person has been recognized. If you wish a conversation, would you please vacate the chamber, and let the member continue.

MR. MacWILLIAM: Thank you, Mr. Chairman. It seems that the other side wishes to play a few little mind games here.

MR. CHAIRMAN: Order, please. It is not only related to one side.

Interjections.

MR. CHAIRMAN: Order, please. The member for North Okanagan will continue on vote 65.

MR. MacWILLIAM: Mr. Chairman, that only hardens the resolve, I guess.

Anyway, we were discussing the fact that many world fairs had been notorious money losers. One of the problems seems to be the escalating production and construction costs associated with world expositions. Expo 86 started off, I might remind the House, as a $127 million celebration of Vancouver's centennial; it has now been blown into about a $1.5 billion project.

Another cautionary note was the fact that attendance estimates are often overly optimistic, and I made note of the fact that the initial gate pass estimates were in the neighbourhood of 20 million to 25 million. They've been brought down considerably, to about 13.75 million.

The third cautionary note was that there's often an underestimation of the auxiliary or ancillary expenses of a fair, such as decommissioning costs, which remain to be yet fully accounted for by the minister, and associated costs of health, fire and safety, as well as the opportunity costs to the land, which we went over in great detail the other day. So there are three cautionary areas that we looked at.

As a business venture we made note of the fact that the primary source of Expo's financial impact will be through local expenditures — that is, B.C. residents spending their money at the fair. Although that will bode well for the ledgers for Expo, there's a danger that unless we make every opportunity to encourage the spinoff for Expo to be dispersed throughout the province into the other areas, it may cause what we could call a redistribution of income throughout the province. In other words, money spent at Expo will be money that would normally have been spent in other areas of the province and in fact may actually cause a drain from those areas. So I think we have to make sure that we promote those tourist developments in other areas of the province in order to make sure that they don't become losers in the competition for the tourist dollar.

The big point to make, I think, is the fact that Expo depends upon attracting new outside visitors to the province — people who normally don't visit the province. There have been published statements that Expo will attract about one million new visitors. The minister recently said that it is going to attract up to two million new visitors. We went over the fact that if we take the one million target and look at visitors to the province from other areas, such as the States and Alberta and other provinces and overseas visitors, we're going to need a minimum 27 percent increase in tourist travel into the province. If we take the minister's updated figures of two million people, we're going to need a 54 percent increase in our new visitors to the province. I'd like the minister to possibly justify his estimates of these figures, because it's an extremely large influx of new tourists, and I don't think the minister has adequately explained or defended these figures.

In addition, the minister has repeatedly refused to make any detailed financial analysis of the fair or a cost-benefit analysis. Many of the figures that were released in the summary analysis by Mr. Pattison can't be justified in terms of other economic analyses that have been done. I think the minister should consider making a full detailed financial analysis in light of this disagreement.

As a fiscal policy, through Expo the government has basically admitted that it has to dive into deficit financing as a means of economic stimulation. Expo is generating some immediate economic benefits. We don't argue that; we welcome it, and we support the principle of Expo. But we do feel that the jobs created are short-term and that there's been inadequate long-term planning. I think we have to make every attempt to ensure that Expo does succeed, and we're backing it in that regard.

We are concerned that the economic impact of Expo may not be as great as it could be if we had taken those equivalent expenditures of $1.5 billion and pumped them into other areas of economic development. The question still does remain: are we getting the best bang for the buck, so to speak? Are we getting the most out of our dollar, in terms of job creation and economic development benefits?

The other question that remains is: what happens after Expo? After the fair is finished, after the jobs are no longer there, after the buildings must be taken apart — what comes after Expo? The minister has argued that it's going to be a great boon to our trade position. Really, when you look at it, Mr. Chairman, there is only one thing that enhances an area's trade position, and that's to produce higher quality goods at lower cost. We've got to develop some long-term economic strategy, some political stability and some economic stability

[ Page 6877 ]

in this province. Expo really does not address those problems.

In summarizing, I want to reiterate that my colleagues and I do support Expo. We support the principle; we support the fair. We want to make dam sure that it does run smoothly and that it does generate the maximum impact that it can have for the province. We want to ensure that every chance for success is ensured. After all, it's really the only game in town right now, and we wish it the success that it can enjoy if these concerns are properly addressed.

I do have a few questions to the minister. The minister made mention that the ticket sales are going very well, well above projections. I would like to bring a couple of concerns in regard to the advance sale of tickets to the minister. In relation to a recent admission cost study done by United Communications Research Inc. in Vancouver, there were a lot of concerns raised from the research poll that was conducted. Rather than go into detail through the analysis, perhaps I can review some of the major points in a short summary.

It seems that the three-day and season passes, at the prices at which they are presently being offered, appear to be quite acceptable to the public. But with regard to the price bumps, there is some interesting stuff that came out of the survey. It indicates that people believe the price hikes are excessive, because after the price begins to bump up, the response ratio drops quite precipitously, indicating that people are willing to buy at the present price but very rapidly become hesitant to buy after the prices increase. So it indicates that the price hikes might be excessive. If tickets are to be sold, it indicates that we have to maximize that push for the sale of those tickets now, at a price that's acceptable to people. Also, if we don't sell sufficient passes before October 14, we may run into some very severe difficulties in selling the passes at the higher prices, which may ultimately endanger the attendance estimates.

Another point of concern that I might mention to the minister is: the analyses show that the cost of the single-day passes is viewed to be excessive. I might mention that it should be reconsidered, especially if the sales projections for the pre-Expo ticket sales are not met.

Some particular questions to the minister in regard to the sales. Has the ministry established any projections on ticket sales? He indicates that he has. If he has, I wonder if he can expand on that. And will the minister reconsider the cost of the single ticket sale to the fair, if these projections are in fact not met?

HON. MR. RICHMOND: I'll respond as briefly as I can. Most of the first part of the member's preamble was all covered the other day and was a rehash of what we had gone through the other day.

On the one figure that I did use on increased tourism to the province — in other words, additional visitors generated by Expo — yes, the figure of one million is probably the most pessimistic figure; the most conservative figure, I guess, would be a better term to use when we're talking about additional tourists. They range all the way up to about two million. The figure I use is probably a middle-of-the-road figure of two million additional visitors. Of course, it's going to depend on the overall number of visits to the fair.

We did indeed bring down the number of projected visits, strictly for financial control and for budgeting purposes — and I mentioned that the other day — to 13, 750,000, but that is a very conservative number. We should do well in excess of that; and if we do, then the number of two million additional visitors is not optimistic.

He talked about the legacy and what is going to be left by Expo. Well, the other day I canvassed that very thoroughly when I talked about the industrial business activity that will go on for years after the fair, as well as the multiplier effect of the tourists coming here. I didn't even mention the legacy buildings that will be left, such as the refurbished heritage building, the CPR roundhouse, the British Columbia Pavilion, the Expo Centre, which is the geodesic dome complete with the Omnimax theatre, and of course the legacy left by the federal pavilion, which will be a convention centre and a cruise-ship facility. So those are just some of the legacies, as well as the serviced land that will be left for B.C. Place to redevelop.

He's right, to some extent, when he says it's the only game in town. It's not the only game, but it's the biggest game in town, and again I am thankful that it is going on at this particular time.

I appreciate his concerns about advance ticket sales, but at this time they are running well ahead of projections. We are very pleased with the way Crown and private corporations, municipalities, etc. have gotten behind the advance ticket sales. One of the reasons for putting the prices low at the start was exactly for this purpose: to generate ticket sales now to get as many tickets out and the cash in right up front. Yes, it's all built into the strategy that the prices will be bumped in October of this year and again when the fair opens. So about all I can say on it is that we are more than pleased with the advance ticket sales. As to looking again at single ticket prices, I don't think they are out of line when one puts them into perspective with other forms of entertainment that are around today.

I think that has addressed most of what the member has asked. If there are any more, I will wait until he has finished.

MR. CHAIRMAN: The member for Okanagan North. The Chair, hon. member, might draw your attention to section 43 of the standing orders, dealing with irrelevance and repetition in debate.

MR. MacWILLIAM: Mr. Chairman, the whole reason for going over that was that there were a number of questions left hanging the other day that the minister did not respond to. Simply setting that agenda and reviewing that agenda for today establishes a number of questions that I am coming to at this point in time, which the minister had not responded to at the end of that session. That's where I will go at this point.

[5:00]

Just before we do that, going back to the research on the ticket sales, the minister didn't address the question as to whether he would reconsider the price of a single-admission ticket if in fact sales projections do peter out before the beginning of the fair. Research showed very clearly that the single-ticket admission price is unacceptably high, and I am just suggesting to the minister that he have a look at that price structure in order to ensure that we maximize the benefit of the fair. The research indicates that if the ticket price were lower, we might sell significantly more tickets than at that present single-day admission price. That's not a criticism; it's a concern I bring to the minister in the light of independent research that has been done. I suggest that in hopes of maximizing the benefit of the fair, perhaps have a look at the

[ Page 6878 ]

single-admission price, and you may find that it warrants a review.

A lot of questions remain, previous questions the minister has not answered, in terms of the financial aspects of the fair. He's been evasive about the details of contracts awarded by the fair. I might remind you, Mr. Chairman, that Expo is a public corporation, and because it is, I think it is incumbent that it be above being squeaky-clean. It has to be above any reproach or any criticism. The fact that the minister has not furnished documents as requested.... The evasive nature has prompted even more questions.

A detailed financial analysis of the fair was requested. It hasn't been forthcoming. Details of the contract awarded to Specialty Mfg. were requested. The minister has not made those public. He did allow somebody a sneak-and-peek preview of it, but won't allow it for public perusal. Details of the contract awarded to certain directors on the Expo board in terms of contracts for the awarding of magazine souvenir sales haven't been made public. A request from this side of the House for audited statements of expenditures of the former president, Mr. Bartlett.... Those have not been forthcoming; although they have been requested, they have not been made public. There has been a refusal to provide any information on the guest list that was canvassed for the extravagant opening on May 2. We had simply requested information as to who was invited, who received the invitation from virtually all over the world at the expense of the taxpayers of British Columbia.

Interjections.

MR. MacWILLIAM: Mr. Speaker, I have considerable latitude in ignoring the comments from across the floor, but I would suggest that the member will be given a chance at a later date if he has anything constructive to say — which isn't very often, Mr. Chairman.

I feel that the public does have a right to know these questions, which have been asked repeatedly by this side of the House for some time now. These questions have been ignored. The minister has not explained why Mr. Michael Powell of the Social Credit advertising firm of Vrlak Robinson has been hired to spend about $25 million on Expo advertising. Perhaps the minister would like to respond to that at this time. What skills does Mr. Powell have, apart from his partisan connections? Were there any open bids on this advertising contract? If so, what applications were received? What applications were reviewed? Those questions still remain to be answered. In the public interest, I would suggest that the minister supply those answers, and supply them now.

MR. BARNES: In line with the questions raised by the member for North Okanagan on the availability of tickets, I'd like the minister to indicate whether or not there will be a policy which provides complimentary tickets during the duration of the fair.

Interjection.

MR. BARNES: Discounts or whatever. In other words, where are the breaks going to come for those of us who can't afford the...?

Interjection.

MR. BARNES: Buy now, you say? It's cheaper to buy now than later.

I'm sure there are some organizations in the community.... There always are organizations that, by the nature of their operation, don't have that much in the way of funds, and they quite often like to raise funds by raffling tickets of one sort or another. I wonder if the minister could comment on whether or not there will be any tickets available for charitable organizations to raffle off — this kind of thing — to generate a little revenue for their organizations. I know the government has a budget for a number of projects that will create interest, including the major event that they held not too long ago, the Expo party, in which I understand nearly half a million dollars was involved. What about sports organizations and various groups that are doing things in the community?

I don't want to belabour this. I'd just like to know what the policy is with respect to complimentary tickets. Will there be any available? What portion of the budget will be allowed for this purpose, and could you explain how you go about applying for some of those tickets?

HON. MR. RICHMOND: I'm pleased to answer the first member for Vancouver Centre. I'll deal with his questions first.

There are several different plans for tickets for those who are, say, less fortunate. There is a plan where the underprivileged will be given free tickets to Expo. Also, you know of the half-price for seniors and children, and within two weeks — I know it's been a little while coming; we've been working on it — we will announce a ticket price for the handicapped. That will be announced very shortly. As far as the privileged list, if you like, or complimentary tickets for charitable organizations, by all means. All you have to do is be in touch with my office, and for any worthwhile cause we will always come up with some. Naturally we want to keep a fairly tight rein on them. As you can realize, in an event like this it would be very easy for complimentary tickets to be flying around all over the place, and we'd be giving away the farm, as it were. To date we have already responded to the requests of several MLAs, including the member for Okanagan North, for complimentary tickets. I believe that was to the Expo Centre for someone in your community.

Interjection.

HON. MR. RICHMOND: We have responded, anyway. I've received requests from MLAs on both sides of the House, and we're very willing to respond. So if you have needs, Mr. Member, please be in touch with my office.

I would hasten to point out, though, that all members of this House are going to buy their season passes, so I urge you to buy them now because the price is at its very best. I'm sure you can get the group rate. If you go as a caucus to buy your yearly passes you will get the group rate, as our caucus is going to do. I hope that clears that up, Mr. Member.

As for the other couple of questions, the name of Mr. Michael Powell came up. Mr. Michael Powell used to work for the firm of Vrlak Robinson, and was hired by Expo 86 strictly because of the experience that the man brings to the job. He has some 15 years experience in advertising and in the placing of advertising. That's precisely what he's doing for the Expo 86 Corporation. As for the advertising contract,

[ Page 6879 ]

yes, there was a competition among the agencies in Vancouver, and that competition was won by and the contract awarded to Baker Lovick.

MR. BARNES: I just want to say thanks to the minister for that very good news. I'm sure that many organizations will be very pleased to know that there is some scope within the Expo program to facilitate their very special request for tickets to raise funds from various sources of one sort or another. But I would hope that the minister would advise the director of sales, who has perhaps been a little protective of the corporation in suggesting that there will be no complimentary tickets available as a matter of policy.... I don't need to say any more about that, but it would be a good idea to inform them, because I think people are requesting the tickets and are not being encouraged. So this is a bit of new information that I hope the minister will circulate in the community in order to assist those worthy organizations.

Another matter — briefly as well, I'm sure — just to get the minister's comment on it. This has to do with the state of affairs concerning the future of Canada Place and the federal government's pavilion, which will be converted to a convention centre after Expo 86. I understand that the Premier has appointed a former minister of the House, Peter Hyndman, to act as a government negotiator in coming to some kind of an agreement respecting the future of the Canada Place pavilion. I read in the June issue of Equity magazine — a local publication — that the government had indeed concluded or was near concluding an agreement with respect to the operation of the Canada Place pavilion, suggesting that the Expo management would in fact be operating that facility at some later date. They also suggested that it may be that the government is saving this little bit of news for an appropriate time to make a little political hay out of it. I was checking with some of the Vancouver city council people, and so far they haven't heard from Mr. Hyndman, and they are wondering who he will be negotiating with. They certainly are afraid that if they were to operate it, it would be without the agreements necessary to defray the expected $2.5 million cost of operation, and they would not want to find themselves left holding the bag. So could the minister comment on the present status of the negotiations respecting the future of the federal pavilion at Canada Place? Will it in fact become the convention centre for the city of Vancouver?

[Mr. Kempf in the chair.]

As well, could you indicate the extent of Mr. Hyndman's contractual arrangements? Is he going to be on an indefinite contract? Or will it be temporary or terminating at some time in the near future after negotiations are completed? With respect to the costs of retaining him, is that a matter of public record, or has information about his per diem rate, expenses and all matters pertaining to the costs of those negotiations been made available? It would be helpful if we could get some enlightenment on that. I'm sure everyone is anxious to know how Mr. Hyndman is doing now that he is re-emerging — mind you, very quietly, considering his eloquence and high-profile style. I haven't heard very much of him lately and I'd love to find out how he's doing.

[5:15]

HON. MR. RICHMOND: First of all, I haven't seen Mr. Hyndman for a while, but I will convey to him your concerns as to his welfare. I'll find out the next time I see him. I think he's doing all right. It was nice of you to ask, Emery.

I don't have all the details of that contract to give you at the moment, but I'm sure it will be a matter of public record. He has been hired to do a specific job which will have a finite term. His job is to speak with the owner of that centre, which he's doing. I can assure you, Mr. Member, that we do not have a deal tucked up our sleeve, as you say. We are working towards that, and I think that before very long we will be pleased to announce that we have come to some arrangement. But at this time we have not.

It will be not only the convention centre for the city of Vancouver but the principal convention centre for all of British Columbia, I would assume, once Expo is finished. So we are working towards that end, and I can assure you that we over here are just as anxious as you and the city of Vancouver and the rest of British Columbia to come to an agreement for operating that centre. The minute that we can announce an agreement we will do so.

MR. BARNES: That satisfies many of the questions that I wanted to ask which didn't have, as I suspected, a great deal of detail. But there is no urgency about it. I was curious to know if Mr. Hyndman was progressing. The problem that I have, though, is that there doesn't seem to he any evidence that he's been in touch with the city of Vancouver. Now you suggested that the landlord has been the main party that he has been in consultation with, but there are three parties involved: the federal government, the municipality and the province.

In light of the risks that the city of Vancouver faces with respect to loss of taxation benefits through the government's policy, surely there should be some negotiations taking place there. There are many matters that have to be discussed civically. I would hope that Mr. Hyndman is talking to the city of Vancouver. That is my concern.

Could you comment? Is he just talking to the federal government? One report in the news indicated that he was still waiting for the Premier to advise him on what people he should talk to. But from just a lay point of view, you would think that he would want to talk to all parties concerned, including the city of Vancouver, and as yet there has been no evidence that he has done that.

MR. MacWILLIAM: Just a quick question to the minister. By the way, my sincere thanks for the gift. I consider it an honour and a privilege. From the other members of the House. Good stuff.

The minister mentioned the tickets to the handicapped, and it did prompt me with a question that I had inadvertently forgotten earlier: that is, the ensuring of adequate facilities for handicapped people visiting the fair. If the minister can expand on that, it's just a simple question, but I think a question of concern for those individuals.

HON. MR. RICHMOND: I would be happy to; it's very short and succinct. We have worked with the handicapped association right from day one, right from the day of the planning, right through and including now and on into the future, to make sure that the fair is adequate and more than adequate — that it is easy for the handicapped people to get in and out of every pavilion and every display. So we have gone, I think, more than halfway to make sure that this has been accomplished.

[ Page 6880 ]

I thank the handicapped association and the second member for Vancouver–Little Mountain (Mr. Mowat) for all of the assistance in doing this. They have put a lot of time and effort into helping us design exhibits to make sure that they are easily accessible to the handicapped.

Just one more comment on the convention centre for the other member. I am sure you can appreciate it is a very complex issue, and a lot of money is involved. The first person whom we have to satisfy and come to some meeting of minds with is the person who owns the facility. So that's where we are starting. But you can rest assured that all the other players will be brought in very shortly.

Vote 65 approved.

Vote 66: ministry operations, $8,344,439 — approved.

The House resumed; Mr. Ree in the chair.

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

HON. MR. GARDOM: Now that we're gathered here, Mr. Speaker, I think it would be appropriate to proceed to public bills and orders. I call committee on Bill 56.

MISCELLANEOUS STATUTES
AMENDMENT ACT (NO. 3), 1985

The House in committee on Bill 56; Mr. Ree in the chair.

Sections 1 to 16 inclusive approved.

On section 17.

MR. HOWARD: Mr. Chairman, what section 17 seeks to do, it seems to me, is to restrict somewhat the opportunity for credit union members to involve themselves in a democratic way in the calling of or the petitioning for special meetings, and to place the responsibility to determine that either in the hands of the directors, which is a consolidation of authority at the top, or upon an appeal to an officer in the service of government to deal with that. I think it's an intrusion into the rights of the average credit union member to fully participate in the affairs of his or her credit union to have those decisions with respect to certain subject matters — special general meetings and so on — be subject to a decision of the directors as to whether or not they're going to call the special meeting.

Without reading the legal side of the bill, but looking at the explanatory notes side, we see that section (b) increases the numbers of members' signatures necessary to requisition a special meeting. I understand it is now 100, and the proposal is to increase that to 300. On balance, I suppose, that's a satisfactory and acceptable proposal. It still maintains the right of a certain number of members to petition for a special general meeting. But under the explanatory note of (c), it points out that where the members requisition it, it requires the directors to either call the special general meeting or, upon certain grounds, to refuse to call it. The section referred to is 97(5)(b) of the act, which says that if it doesn't meet that criterion it can't be called.

I think, really, we should have a provision whereby if the members of a credit union, upon a requisite number of signatures, desire, for the purposes of the activities of their credit union, which they own, to requisition a special general meeting, then it should be called and should be callable, and the subject matters that they want to deal with be dealt with at that particular special general meeting, and the proposal that they want to put forward, whether it be a bylaw change or whatever it is, be subjected to a vote of the assembled members of the credit union at the meeting itself — not to leave it to the control and authority of the directors to determine whether or not there is going to be such a special general meeting.

Even the question of the appeal that the members.... If the directors decide to refuse to call the special general meeting, regardless of the 300 or more signatures that may be set out, they can appeal the directors' refusal, and then that of course brings into play the.... I've forgotten the precise title of the person in the government service who administers the credit union, but it brings into play, in any event, an element of government in deciding further whether or not the appeal should be allowed.

I just think it's an offensive section to bring into play with respect to credit unions, which are based on the principle that each individual is equal and that they vote within the credit union as individual members and not on the basis of how many shares they hold, which is the difference between a credit union or a cooperative structure and a limited liability company, in which you vote money. In a limited company you vote money or shares; here you vote individuals. I think they should still retain that right and it shouldn't be subjected to some decision of the directors as to whether or not they're going to accede to the petitioned requisition or petitioned request of the members of the credit union.

[5:30]

HON. MR. SMITH: Those remarks represent quite a valid point of view. The question is, hon. member, how do you balance a credit union member's need for democratic rights with the obligation that the directors have to manage the affairs of the credit union? You have to balance the two. The problem with the previous section 97 was that it was very bare and lacking in guidance. That may have seemed to be a blessing at one stage, but litigation in 1983, an experience involving one of the major credit unions, brought into the forefront problems of democratic control and process. Because there was not clear statutory procedure, the situation was worse. So what the minister tried to do here was set out some kind of clear statutory procedures.

It's true that it may, with a large credit union, raise the number of members that are required from 100 to 300. It still retains the 5 percent — it was one-twentieth before — or whichever is less. But it does mean that for a large credit union the number will be increased. It's an attempt to have a standard process which members will know. They will be able to exercise their rights under that process to request a meeting. A minority of a substantial number, but a definite minority, will be able to do that. At the same time the directors who manage the credit union, who are elected by the members, can rely on statutory criteria for their role. It balances the two of them.

I certainly don't denigrate your point of view. Credit unions have always been very democratic, and this balances that right with some certainty and some statutory process and control.

[ Page 6881 ]

MR. COCKE: I just want to deal with one part of that whole question; that is, the directors being empowered to turn down the special general meeting. If we look under 97(5)(b), which is really what we're talking about here, under that we have four subsections. We can understand the first one: "...the requisition is not deposited at the registered office of the credit union at least 90 days before the anniversary date of the last annual general meeting...." To some extent I can also understand the second aspect, where the proposal is submitted for a purpose of enforcing a personal claim or redressing a personal grievance. I'm not at all sure what that all means, and I won't even talk about the next one, (iii). But (iv) says: "...there are other reasonable and justifiable grounds for not bringing the proposal forward to be considered at the meeting." That can invite almost any interpretation under the sun. I can see a hard-line board of directors being able, in their own minds, to justify not calling the meeting. All they have to do is refer to this Section 1n the act and say: "There are other reasonable and justifiable grounds, and these are they." It depends on what kind of weight you want to put on "reasonable and justifiable."

I worry about this amendment to the Credit Union Act. I think the minister should give us a bit more explanation as to this whole question. I think he's having some trouble over there.

HON. MR. SMITH: We're listening.

MR. COCKE: Well, I've pretty well said it. I've summed it up by saying that I don't like subsection (iv). That subsection says: "...there are other reasonable and justifiable grounds for not bringing the proposal forward to be considered at the meeting." That's broad, wide and vague enough so that almost any interpretation can be brought forward.

HON. MR. SMITH: Remarkable as it may seem, we agree with you. We're going to propose an amendment to take it out. It's an omnibus power they don't need.

Mr. Chairman, I move that section 97(5)(b)(iv) be deleted.

Amendment approved.

On section 17 as amended.

MR. HOWARD: There is still a concern in my mind about the authority of the directors, and I have concern about (i) there. I don't know that the Attorney is going to accept every suggestion and weed out the unnecessary parts in here, but they can refuse to call a special general meeting if "the requisition is not deposited...at least 90 days before the anniversary date of the last annual general meeting, or at least 90 days before the date on which it is proposed that the meeting be held." I'm basically saying that if on the eighty fifth day — or the eighty-ninth day, for that matter — before the annual general meeting is scheduled to take place they want to call a special general meeting, the board of directors can deny that. They could say, no, you can't deal with that, presumably on the basis that the annual general meeting is going to come along in 90 days or thereabouts, and we can deal with whatever that subject matter is.

But when we get to proposed section 97.1, which deals with general meetings, we again give the board of directors the right to deny the presentation of a resolution to the general meeting if that resolution deals with the subject matter relating to an individual with respect to a personal claim or grievance, or if it is substantially the same proposal as considered at a general meeting held within the two years immediately preceding. You're restricting very much, by the combination of those two things, the opportunity for members of their own credit union at annual meetings or at special general meetings to seek to reverse the decision of a previous meeting.

Even this Legislature doesn't do that. This Legislature, every time it meets, can alter the decisions that it made at a previous sitting or at a previous session — decisions made the year before. But here you've got to say it's two years before they can seek to alter the decision of the credit union, and it does remove the right of members to have that sort of final say or final opportunity to deal with subject matters that can be brought before the annual general meeting. I just don't see that it is necessary there, either in respect to the.... I'm probably not nearly as thoughtful as the member for New Westminster (Mr. Cocke) about the attempt to have personal claims or grievances dealt with at annual or at special meetings. I don't see why they can't. That's the final arbiter of actions of the credit union, the members themselves in meeting, to make those kind of determinations. Likewise with making a decision to alter the decision made by a credit union, say, more than two years ago. They should have the right at every general meeting to make those alterations if they see fit.

I think even the continuance of this, with that one removal, that amendment we just made, places far too much authority in the hands of the directors to dominate the membership. It should, if anything, be the other way around.

HON. MR. SMITH: It is certainly in part an answer to that point the member raised on (b)(i) to point out that under the proposed amendment to the bill under section 18, it will allow members in the same numerical ratios to bring forward special resolutions for consideration at a general meeting, so that they can propose a special resolution at the general meeting. They're not precluded from doing that by the 90 day rule.

But I guess the 90-day rule and the two-year was to try and ensure that you weren't meeting the members to death, and that there was some regularity to meetings, and that if you were going to have an issue of this kind brought forward prior to a general meeting, it happened at least 90 days in advance. But I think that 97.1 sought to be added under 18 of the bill is at least an answer in part to your concern about (i).

MR. HOWARD: I was referring to section 18. That's what I started crossing over to, and I think it's necessary because there is a cross-reference there. If we look at the beginning of section 17, 97 (l) says: "In this section 'proposal' means any matter proposed by members for consideration at a special general meeting and includes a proposed special resolution."

Interjection.

MR. HOWARD: Yes, I quite appreciate that. That's just what I'm getting to. It's talking about a proposed special resolution in 97(l). In 97.1(1) it says: "Members of a credit union, by requisition...may propose a special resolution for consideration at a general meeting." Special resolutions,

[ Page 6882 ]

as I understand it, are subject to a two-thirds vote, which would mean that kind of an overwhelming majority would be necessary to deal with special resolutions. Then 97.1 says: "Section 97 applies in respect of a proposal under this section." And a proposal under 97.1 is a special resolution. We come back to 97(l) talking about special resolutions. I submit to you that even at the annual general meeting a proposal for a special resolution to appear and be dealt with, submitted upon requisition, is subject to the directors' approval as to whether it will even come before the meeting or not.

I submit that that's the intrusion. It consolidates power with the directors above and beyond what they are required to have to run the general affairs of the credit union in between annual meetings of the credit union. Any organization that has a board of directors or an executive runs things in between meetings. But at the annual meeting that group — directors or executive, or whatever — is subject to the meeting making a decision about whether what they have done is correct or incorrect. You should not give to the directors the right to override the desires of the members to do something, and that's precisely what this seeks to do.

[5:45]

HON. MR. SMITH: There's an answer to that in section 45 of the Interpretation Act. Where an enactment provides that another enactment applies, it applies with the necessary changes insofar as it is applicable.

AN HON. MEMBER: Mutatis mutandis.

HON. MR. SMITH: The second member for Vancouver Centre (Mr. Lauk) will tell you that that's a nickname for his cousin. He can explain it to you.

MRS. WALLACE: I want to go back to 97(4) under section 17, where we talk about the 300 members. I have some concerns about this, particularly as section 16 has repealed the right for members to have access to the membership lists. It might be possible for someone who had a concern to contact 5 percent of the membership of a small credit union in a small area, but given a large metropolitan area, or even given Island Savings, to which I belong, there is no way that I would be able to know 300 people who are members of that credit union. I think that is true of almost every credit union of any size.

What you're doing here is making it absolutely impossible for a person or a group of people who have a concern and want a special meeting to be able to contact 300 people who belong to that credit union, because they will not have access to the membership list. This is the same thing that has happened with the directors of the credit union under a previous amendment. The directors now come up with their recommendations for new directors, and if members want to nominate someone, they have to dig around and find people to support them, without access to the membership list.

It's entrenching the operation of the credit union more into the hands of the directors, and taking away from the general membership the right to participate in the management of their own institution. It goes contrary to the whole intent of the Credit Union Act.

HON. MR. SMITH: There is a better requisitioning process, and a clearer one, really, set out in 97(3). You don't like the numbers. I understand what you say about the numbers, but there's a better requisitioning process in 97(3) than we had before. That being so, access to a membership list doesn't seem to be as important. The requisitioner won't have an absolute right to call a meeting if the directors have refused the request, but you will see in section 97 that the aggrieved members can appeal to the superintendent to order a meeting to be called. I don't know that access to the membership list is then going to be nearly as imperative as it was before, because if you can't get your numbers for your meeting, or if you're refused the call of a meeting, you appeal to the superintendent. You don't need access to the membership list to do that.

I think these amendments arose out of the 1983 experience with the litigation, and that may well have been an experience of democracy running amok. They've tried, as I said, to put in some procedures which do give some rights to members, to minorities, and also to the directors who have to run the company. I don't pretend that it is perfect, but the right of appeal to the superintendent is an important one.

MRS. WALLACE: As I understand the minister, he is saying that subsection (3) gives some leeway. But subsection (4) says that the requisition under subsection (3) "shall" be signed by those 300 members, so I don't see how that's making it any simpler. What I'm saying is that the way the thing stands now it almost means it's never going to happen, because they are just not going to know 300 members to sign that requisition.

MR. HOWARD: I won't do it in the formal way of dividing on it, but I do want publicly, verbally, to register my opposition to this particular proposal.

AN HON. MEMBER: On division?

MR. HOWARD: No. On division — baloney. I just want to say I'm opposed to it and have it on the record that it is I. Satisfied?

Section 17 as amended approved.

Sections 18 to 25 inclusive approved.

On section 26.

MR. HOWARD: Mr. Chairman, it's all right to do what you're doing if you're confined to a particular act, but you've leaped over a couple of them. Sections 26 and 27 are financial administration. Then we get to 28, which is the Forest Act, and I think you should segment those.

MR. LAUK: There's another problem here that I would like to sort out. I don't know who would answer the question on the treasury benches. Section 27 indicates that the Treasury Board can "make regulations establishing amounts or allowances, to be paid out of an appropriation, for or in respect of out of pocket, travelling and other expenses incurred by persons in the discharge of official duties, with power to set different rates." Just who are these official persons? Are they cabinet members? Are they all civil servants? Are they members of Crown corporations?

[ Page 6883 ]

HON. MR. CURTIS: Mr. Chairman, to the hon. member for Vancouver Centre, please don't take it as a glib answer. They could be literally anyone covered by Treasury Board directives. Therefore, not directors or representatives of Crown corporations, who are not subject to....

MR. LAUK: Out of which votes?

HON. MR. CURTIS: Out of virtually any vote passed by the Legislature relative to the operation of government. If I might explain: in the past, Mr. Chairman, as we have reviewed it, direction regarding allowances and travel expenses has been provided by the Treasury Board under authority given to it as is shown here in section 27, under section 24(l). Adding subsection (24)(1)(d) specifically empowers Treasury Board to issue regulations which would prescribe allowances and travel expenses, therefore clearly outlining or delineating the Treasury Board power in such an area of expenditure control. The member asked, initially: "Who are these people?" Well, they would be anyone elected or appointed who is essentially directly related with government — not with Crown corporations, commissions or agencies thereof, but the government service, and including those who are elected, of course.

Sections 26 and 27 approved.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. WATERLAND: Mr. Speaker, on February 16, 1984, the ombudsman tabled in the Legislature Special Report No. 7. Pursuant to the recommendations in that report, on April 5, 1984, I appointed my regional manager in Vancouver to carry out an investigation into alleged scaling irregularities at Shoal Island. I now ask leave to table his report.

Leave granted.

HON. MR. GARDOM: Mr. Speaker, I would inform the House that we will be meeting tomorrow afternoon.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:55 p.m.