[ Page 8295 ]

CONTENTS

Presentation of Reports

Select Standing Committee on Standing Orders, Private Bills and Members' Services — 8295

Motion Picture Act (Bill 30). Hon. Mr. Smith

Introduction and first reading — 8295

Oral Questions

Louisiana-Pacific. Mr. Williams — 8295

Mount Currie Indian band. Mr. Reynolds — 8296

Alfalfa crop loss. Mr. Michael — 8297

Hotel evictions. Mr. Barnes — 8297

Committee of Supply: Ministry of Forests estimates. (Hon. Mr. Heinrich)

On vote 33: minister's office — 8297

Mr. Howard

Mr. D'Arcy

Mr. MacWilliam

Mr. Gabelmann

Mrs. Wallace

Mr. Williams

WEDNESDAY, MAY 21, 1986

The House met at 2:06 p.m.

MRS. WALLACE: Mr. Speaker, I'd like to introduce to the House a class from Shawnigan Lake School, seated in your gallery with their instructor Mr. Smith. I'm very pleased to have them here today.

Presentation of Reports

MR. MOWAT: Mr. Speaker, I have the honour to present a report from the Select Standing Committee on Standing Orders, Private Bills and Members' Services. I move that the report be read and received.

CLERK-ASSISTANT:

"May 21, 1986.

"Mr. Speaker, your Select Standing Committee on Standing Orders, Private Bills and Members' Services begs leave to report as follows:

"That the preamble of Bill PR402, intituled Columbia Bible College Act, has been approved and the bill ordered to be reported as amended in the Select Standing Committee on Standing Orders, Private Bills and Members' Services.

"All of which is respectfully submitted."

Signed by the Chairman.

Motion approved.

MR. MOWAT: Mr, Speaker, I move that the rules be suspended and the report adopted.

Motion approved.

Introduction of Bills

MOTION PICTURE ACT

Hon. Mr. Smith presented a message from His Honour the Lieutenant-Governor: a bill intituled Motion Picture Act.

HON. MR. SMITH: Mr. Speaker, it's with great pleasure that I introduce long-awaited amendments to the Motion Picture Act which would provide a regulatory scheme for video material in this province. Following a provincial tour and a great deal of consultation with a number of excellent individuals who have studied the subject of video pornography, the government decided to present a bill which regulates the distribution of video materials at the distributor level as they enter the province, and will classify these as adult or non-adult. The adult materials will henceforth be in the video stores out of the display and reach of children, but available for adults.

It will be a licensing scheme as well, so instead of having charges laid under the Criminal Code for certain material, it will be possible to deal with certain material by way of licence, but other materials would be completely prohibited for video distribution, and that would be materials involving sex with children, sex with animals, extreme brutality and violence involving humans or animals, and bestiality, necrophilia and other categories of that kind. Those would be prohibited outright. It is not a bureaucratic scheme; it is a good regulatory scheme at the distributor level. It has the support of the retail and distribution industry and of a number of excellent people who presented briefs to me and to the Fraser commission.

Mr. Speaker, I have the honour to move first reading.

Bill 30 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

LOUISIANA-PACIFIC

MR. WILLIAMS: I have a question for the Minister of Industry. Could the minister advise the House, with respect to the letter of application dated October 14 for the loan to Louisiana-Pacific, if in fact that letter scratched out $(Can.)25 million in their request and changed it to American dollars, and scratched out their ten-year cutting right requirement and changed that to 20 — by pen on the original document?

HON. MR. McCLELLAND: No, I don't know about any scratches, Mr. Speaker.

MR. WILLIAMS: Would the minister be prepared to file that letter of application for a $25 million loan at zero percent with the Legislature?

HON. MR. McCLELLAND: Mr. Speaker, I probably would, except that it probably isn't in my ministry. I think it would be in the Ministry of International Trade, Science and Investment.

MR. WILLIAMS: To the Minister of International Trade, would the minister be prepared to file that letter with the Legislature?

HON. MR. McGEER: Yes, Mr. Speaker.

MR. WILLIAMS: Further on the matter, Mr. Speaker, I understand that a letter has been delivered to cabinet with respect to the concern of plywood manufacturers and with respect to their industry because of the excessive lending to Louisiana-Pacific. Could the Minister of Industry and Small Business Development advise whether cabinet or his department has dealt with that submission?

HON. MR. McCLELLAND: Mr. Speaker, I don't think I'm at liberty to discuss cabinet business before the Legislature.

MR. WILLIAMS: Would the minister confirm that they have been advised that 3,800 workers within our existing plywood industry will be negatively impacted by this incredible decision to aid Louisiana-Pacific?

HON. MR. McCLELLAND: Mr. Speaker, no, I haven't been advised of that, and I'd be very surprised if there were any documents that could support that. If that member has such a document, I'd like to study it and find out where he got it from.

[ Page 8296 ]

MR. MACDONALD: You won't even file the letter.

HON. MR. McCLELLAND: I haven't got a letter to file, Mr. Member, but the other minister has offered to file that letter.

Mr. Speaker, one of the misunderstandings.... I can understand why there is such a misunderstanding, particularly by the member for Vancouver East, who uses Marjorie Nichols' column as his sole source of research. He's got himself into trouble over that in previous times. One of the reasons that we felt that we could support.... In fact, we actively invited Louisiana-Pacific, an American company which is now investing in British Columbia, building British Columbia jobs in our province. One of the reasons was that in our determination of its effect on the domestic plywood market, we were encouraged that Louisiana-Pacific will not be marketing its product domestically, but will be marketing 100 percent of its product to the United States. That was one of the reasons that we accepted the proposal by Louisiana-Pacific.

[2:15]

On the matter of the so-called letter, which I've never seen, Mr. Speaker, but which the member raises, he talks about a required capital cost loan of $25 million American. There was never any consideration by this government of a $25 million American loan, and we would never have considered it. The amount of the loan was in Canadian funds, and the difference between the Canadian funds and American funds is about $8 million or a little bit less. So there was never any consideration of a loan in American funds.

In terms of the other questions that the member has been raising with regard to the Marjorie Nichols column, which is a bit mischievous incidentally, they said we would anticipate no stumpage on Crown land. Louisiana-Pacific was told very firmly that established policy, established law and established regulation must apply.

They said they would require the land for the site at no cost. The site was negotiated with a piece of land owned by British Columbia Railway. Standard procedures following regular lease arrangements were done with the British Columbia Railway, as we would do in any business proposition. They said they would need a rail spur to be built, at a cost to the railroad, according to this letter. The BCR site which was finally chosen already has a rail spur.

They said that they wanted negotiations concerning transportation tariff rates. We told them we don't get involved in that, that it is not our business. That's a business deal between them and the British Columbia Railway, Mr. Speaker. That's what they told them and that was the deal.

They said the employment rate wasn't to exceed $8.50 U.S. per hour. We told them we don't get into that kind of a deal either. Any labour agreements between a company and its unions or its employees, whether they are union or not, is not the government's business, and we are in no position to provide, nor will we ever provide, any kinds of guarantee on employment rates.

They said that they wanted to buy power at 50 percent of the published industrial rate. They were told again very firmly that they must purchase power at standard published B.C. Hydro rates. The project does not....

[Mr. Speaker rose.]

MR. SPEAKER: Order, please. Hon. members, the intent of question period is well laid out. It is equally incumbent upon members when replying to questions to reply to the questions that are asked and not to address further questions. Obviously in this case, hon. minister, I must say that the response that the minister is making goes well beyond the scope of the question asked by the member.

[Mr. Speaker resumed his seat.]

HON. MR. McCLELLAND: I apologize for answering the questions, Mr. Speaker.

MOUNT CURRIE INDIAN BAND

MR. REYNOLDS: Mr. Speaker, I have a question for the Attorney-General. Is the Attorney-General aware that the Mount Currie Indian band has claimed ownership of the Lillooet Lake road and has an information toll booth in that area and is trying to collect funds from logging trucks travelling through that area.

HON. MR. SMITH: Yes, I'm aware, not of everything implied in the question, but aware that on occasion there has been some attempt to blockade traffic on that road, particularly a part of that road that is on Indian reserve land. I'm aware that it does present a problem, that the police have been watching that situation carefully and that negotiations are taking place to establish the right to free access for everyone on that road. It is a highway, but parts of it go through reserve land. There have been some actions taken by the band on their reserve.

The situation is one that requires delicate handling. I'm told that the police have been very much on top of that and that there have been no serious incidents, but to say that it's a worry would be an understatement.

MR. REYNOLDS: A supplementary to the Attorney-General. Is he aware that the Mount Currie Indian band is forcing logging companies to sign documents and charging them 25 cents per thousand before they can travel across a road that is operated by the government of British Columbia? If he is aware of that, can he tell me when his ministry will treat those native people just as he would treat non-native people if they were doing the same thing?

HON. MR. SMITH: I think the objective of the police policy will be to treat all citizens the same. I'll take under advisement the further remarks that the member has made and try to get a report back to him as quickly as possible.

MR. WILLIAMS: My question is to the Provincial Secretary. Could she advise whether her staff approved voucher document control No. 001070 and a range of other document control numbers for a Speakers conference dinner on March 30, 1985 that cost $2,082.70, of which the liquor bill was some $771.40 at the height of restraint in British Columbia?

MR. SPEAKER: Order, please. Hon. members, a question of that nature obviously, if placed at all, must be placed on the order paper. It is simply unreasonable to expect the minister responsible to know that.

[ Page 8297 ]

ALFALFA CROP LOSS

MR. MICHAEL: I have a question for the Minister of Agriculture. In many areas of my constituency and, indeed, in areas of Cache Creek, Kamloops, Pritchard, Salmon Arm and north Okanagan there are varying degrees of loss of the alfalfa crop by the farmers in those areas. I notice it is particularly severe in the Cache Creek area, the north Okanagan, Tappen and Skimikin. I'd like to ask the Minister of Agriculture if he is aware of this problem, whether his staff is investigating the matter and whether he has any recommendations or plans of action to look at compensation for the farmers in those particular areas.

HON. MR. WATERLAND: Thank you, Mr. Speaker. I am aware of the problem, and indeed there were some 100,000 acres of alfalfa damaged by frost last winter. My staff have been trying to assess the program. I am not at this time considering financial assistance, other than that which is normally available to the agricultural community. They do have access to crop insurance, which some of them had and some of them did not, and we do have loan guarantee programs for those who may be in financial difficulty and require some financial assistance to re-establish their crops. We are continuing to assess the program, and if there are cases of individual extreme hardship, then it may be necessary for some assistance, but I don't anticipate any general relief programs for this particular incident now other than those which are normally provided under the ministry's programs.

HOTEL EVICTIONS

MR. BARNES: A question to the Minister of Housing. I wonder if the minister can confirm to the House if he has taken confidential information concerning Expo evictees from the B.C. Housing Management Commission and made it public.

HON. MR. KEMPF: Not to my knowledge.

MR. BARNES: Mr. Speaker, I wonder if the minister would confirm whether or not the names that were published, particularly in the Vancouver Sun, several days ago were as a result of information coming from his ministry — perhaps from someone else, if not from himself directly?

HON. MR. KEMPF: No, I can't confirm that.

MR. BARNES: During the debate of the minister's spending estimates in Housing, I requested — it was in committee — the minister to table a list of names and addresses that had to do with people who had been evicted as a result of Expo. The minister gave the undertaking that he would table those documents. I'm wondering if the minister has done so. It's been about a week now. Have you tabled those documents as yet?

HON. MR. KEMPF: I table those documents.

MR. SPEAKER: At the conclusion of question period, hon. member.

MR. BARNES: Mr. Speaker, just one final question to the minister. He is suggesting that the names that were published in the Vancouver Sun were a misrepresentation or were, in fact, false in some way, because there was a reference to your ministry as having made those documents available. Are you suggesting that you have no knowledge whatsoever of where that list came from?

HON. MR. KEMPF: I'm not suggesting anything, Mr. Speaker. I just couldn't confirm the question he asked.

HON. MR. SMITH: I ask leave to make an introduction.

Leave granted.

HON. MR. SMITH: In your gallery, and present for the introduction of the bill, are a number of people who have been very active in the field of video materials. I would like the House to welcome the following people: Mr. Millard Roth of Toronto, who is the executive director of Home Video Board; Mr. Ian Rigg, the vice-president of Video One Canada; Kit Stevenson, the chairperson of the national task force on pornography of the Anglican Church of Canada; Mrs. Janet Baird, alderwoman of the city of Victoria; Ms. Brishkai Lund of the University of Victoria; Mary-Ann McWaters of the University Women's Club of Vancouver; Donna Stewart of the Vancouver Coalition on Pornography; Karen Phillips of the Port Coquitlam Area Women's Centre and the Vancouver Coalition on Pornography. I would ask the House to make them welcome.

HON. MR. KEMPF: Mr. Speaker, I would ask leave to table the document of which the member spoke.

Leave granted.

Orders of the Day

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

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 33: minister's office, $186,345.

MR. HOWARD: Mr. Chairman, I'd like to ask the minister if he would make available to the committee — maybe I should wait till his deputy gets here — the results of the study commissioned by the ministry with respect to the silvicultural and logging practices of B.C. Timber and/or Westar, the successor company, on TFL No.1.

[2:30]

HON. MR. HEINRICH: As the member for Skeena is aware.... Are you talking about a report which was done on TFL No. I up in the northwest?

Interjection.

HON. MR. HEINRICH: I know that's where it is, but there happen to be others. So you're talking about a report which was done on TFL No.1. Well, I'm not going to give an answer to that question right now, Mr. Chairman. I'd like to read that particular report on TFL No.1.

[ Page 8298 ]

MR. HOWARD: The minister is saying that he hasn't read it, but he confirms that it exists. So that would be well worth....

HON. MR. HEINRICH: Mr. Chairman, I understand that a particular report on TFL No. I exists. I'm aware of another report on an issue involving Westar, but I can't remember....

Interjection.

HON. MR. HEINRICH: Correct —  No. 23.

I'm aware of that particular report, and I've spent some time on that, but I'm not in a position to answer the question as to whether or not it should be made public immediately. I'd like to know a bit more about it.

MR. HOWARD: We'll leave that one. There's not much point in pursuing it any further.

The minister mentioned another tree-farm licence: TFL No. 23 in the Kootenay area, held by Westar. A tree-farm licence, as the minister knows, gives its holder control over an area of land and the timber within it on a non-competitive basis. So there is a bonus to the holder of a TFL, the bonus being that he has control to the exclusion of everybody else, and access to the timber in the area. In those situations — which I understand to be the case with TFL No. 23 — where the holder of the licence consistently undercuts the allowable cut, then the principle of logging it or losing it should prevail.

I don't think Westar or any other company that holds a tree-farm licence, which is basically a gift from the people of the province of British Columbia through the Ministry of Forests, should have the right to violate the implied conditions of the agreement, which are basically to use the timber in the area for logging and processing purposes. If they're just holding on to it for the sake of having that control and keeping other people from having access to it, then it should be removed from them, or a portion of it should be removed from them.

That occurred with respect to TFL No. 1, although it was largely at the request of Westar and not the initiating action of the Minister of Forests that did it, even though people in the area had been complaining about lack of access to that timber for some period of time. It eventually turned out that Westar was delighted to get rid of it, and they did.

I maintain that the same thing should prevail with respect to TFL No. 23, that a part of that licensed area should be taken away from Westar, particularly in the northern reaches of their TFL holdings in the Revelstoke area, so that that timber could be made available to people or companies that are now able to get access to timber in the Revelstoke area or in the surrounding area.

What better purpose could be served than to remove from somebody the authority to do something which they're not doing and give somebody else a shot at it? I'm urging the minister to take that course of action with respect to TFL No. 23 in the Revelstoke area. Perhaps then we'll get something moving in that area which doesn't appear now to be addressed adequately by those who have an interest in the area and seek to represent that area here.

I want to put forward the proposition to the minister as well and to lay emphasis on the northern portions of the province with respect to our community colleges with which the minister is familiar because of his immediately preceding role in the cabinet. In Terrace we have a community college, and in Prince George there's a community college.

The northern reaches of the province, particularly in the northeast, have the highest level and amount of not satisfactorily restocked land of anywhere in the province. It's more pronounced in the Prince George forest region than anywhere else. Something like half of the NSR land in the province is in the Prince George forest region, far in excess of that which should be the case. But it's there nonetheless. Part of that came about because it wasn't included in earlier surveys, but it does exist.

It seems to me that the effort of our schools of education beyond the secondary grade, insofar as forestry is concerned, should not be confined to the lower mainland. We've got an ideal opportunity for our colleges both in the Prince George area and in Terrace to move to have them establish a curriculum which involves forestry and research. This may not be possible immediately. I don't know from the technical point of view how a curriculum is developed or how universities or colleges approach the institution of a particular curriculum, but at the very least it should be headed towards the direction of providing those colleges with degree-granting capacity in forestry and degree-granting capacity in other disciplines as well. However, I particularly want to lay the emphasis on forestry because of the importance that forestry has to our areas and our regions of the province.

I think if the minister would agree with that kind of contention and sit down with his colleague the Minister of Post-Secondary Education (Hon. R. Fraser) and see if we could bring that sort of thing into being, we would be paying a bit more attention to the needs of people in the north and providing students in that area with the opportunity, those who want to go into forestry for argument's sake, or into research work associated with forestry, to be able to do it in the locale within which they live.

It would also tend again to pay some attention to the fact that the whole world doesn't revolve around Vancouver and around the University of British Columbia or Simon Fraser or UVic. There are other parts of this province where we need to bend over backwards in order to ensure that they get some of the opportunities as well. We've always maintained that it's absolutely ridiculous for kids in, say, the area from which I come who want to pursue some profession or some higher educational activities always to find that they have to leave home, always to find that their parents — if they want to stay in the north and live there — have to face extraordinary costs to send their kids to school here in the lower mainland.

One of the concepts of the establishment of the community college in the first instances was that it would head in that direction of being degree-granting. That seems to have stopped. But I want to emphasize that from my point of view, if the minister would give some endorsement to that idea of curriculum with respect to forestry or research in forestry, we'd be far better off in the northern reaches than we are at the moment.

On another subject with respect to the northern part of the province, on the Queen Charlotte Islands there are a couple of sawmills. One of them cuts for the export market, I understand, and is interested in pursuing that. It's a small sawmill. They've got two problems: one is access to timber, availability of timber, to keep the mill in operation, and the other is the question of what B.C. Hydro charges and demands for people in that area if they want to move into letting Hydro supply them with the power for the operation of the mill.

[ Page 8299 ]

I have a letter here from the village of Port Clements, addressed to the B.C. Utilities Commission earlier this year, talking in an initial way about the sawmill part and mentioning that the two mills are already in operation. They wanted to relocate and expand one of its operations, and so they went to B.C. Hydro and said: "We need this. Give us some estimates for supplying 500 kilowatts of power." This is a diesel generating operation there; it's not hydro per se, but electrical energy generated by diesel. They were told that there would be a requirement locally to contribute $150 per kilowatt towards the cost of generating capacity to serve that portion of the contract over 100 kilowatts of uninterrupted power. They found that that's an extra charge, and they wanted that surcharge to be waived so that they're on an equal footing with others in this province in wanting to saw some lumber and provide a few jobs in the sawmilling area as distinct from raw log exports — that's another alternative — not exclusively for that area but for others as well.

They're also talking about alternative methods of producing electrical energy. Last fall I had the opportunity to visit a number of communities in the Kootenays, one of which was Golden, and toured the Evans Products mill there. I had not known this before but was pleased to discover that it had a wood-waste burner producing electricity for the mill and, in addition to that, sold surplus electrical energy to B.C. Hydro when it wasn't required. This is what they told us at the mill, in any event: when they had surplus, B.C. Hydro bought it, but it was utilizing hog fuel to produce heat, and a steam generator to produce electricity. Now what's wrong with looking at that for some area like the Queen Charlottes, for argument's sake, so that the wood waste that comes out of the sawmills that they're trying to establish and expand there could result in their producing their own electricity?

While I'm on that subject, I would suggest that there are quite a number of sawmills in this province that should be encouraged to do the same thing. Right in my own town of Terrace, Westar's Pohle mill for one — and I live three blocks from the place — has got a burner operating virtually all day long. When they're operating 24 hours a day it just pumps energy up into the atmosphere along with sparks and ash and everything else, but it's a wasted activity as far as energy is concerned.

[2:45]

I think we would be far better off if we could use that waste wood, that hog fuel, for steam plants to produce electrical energy and provide the mill with its own produced energy, and allow B.C. Hydro then to have additional Hydro produced energy or, if they buy it from Alcan, as is the case where I live, to have that available for other purposes. But it seems to me that it is a waste for that to continue. It's a waste of waste material, and it could be employed to some advantage. It would certainly be helpful to the sawmill potential on Graham Island in the Queen Charlottes and in the Port Clements–Tlell area, where is one that the village of Port Clements is talking about specifically.

While that letter was addressed to the Utilities Commission, I think it is something that the Ministry of Forests could certainly be involved in in a promotional way or in an approving way, if nothing else.

I have run out of time.

MS. BROWN: I rise to ask leave to make an introduction.

Leave granted.

MS. BROWN: Mr. Chairman, I wonder if the House would join my colleagues from Burnaby North and from Burnaby-Willingdon and I in paying special tribute to Sharon Wood, the woman from Burnaby who on Tuesday was the first North American woman to reach the summit of the world's highest mountain. I am sure all British Columbians are proud of her.

MR. CHAIRMAN: Thank you. In response the Chair recognizes the Minister of Forests. And one comment from the Chair with respect to post-secondary education: the member for Skeena was allowed some latitude to discuss curriculum development for post-secondary institutions. The minister will be allowed the same latitude. but the matter must then cease, as this vote cannot grant funds for post-secondary education.

HON. MR. HEINRICH: I understand. Thank you, Mr. Chairman. We will dispose of that very quickly. The member for Skeena's point with respect to training of people in the interior and in the northern part of British Columbia is a valid one. There isn't any question that we should do whatever we can to encourage opportunity for those in the north. I am not at liberty to expand on certain things which I was able to encourage and have done before assuming this portfolio. The thing that did give me some concern, I might say, is that my understanding is that the forestry program at the College of New Caledonia in Prince George had suffered a decline in enrolment for the forestry diploma. I think that is a sign of the times. It certainly had absolutely nothing to do with interest in the community, interest in forestry or tuition. It is just that there were other areas of interest, it would appear. But I am sure that like everything else it is cyclical.

The last item that I would like to make reference to is the utilization of wood waste. I think probably one of the best examples that I have come across in my short time in the portfolio is a development in Prince George at the Lakeland sawmill, which utilized the very product that the member for Skeena was referring to — wood waste. They in fact installed a burner from which there is absolutely no discharge. All you see through the exit are heat waves. But why did they put it in? They recognized that the cost of natural gas was significant, so they looked at what the costs would be over a period of four years, I believe. They took what their costs were for the purchase of gas and said: " I think we can do better than that." So the capital cost for this new addition was amortized, I understand, over something less, a touch less, than four years.

The most significant thing about it is this. The heat generated from that wood waste is being used for two applications. One is to heat the mill during the winter — and it's cold, as the member for Skeena recognizes, in the north — and for an extended period of time. It does a magnificent job. The other was equally important. The utilization of the heat generated in this new installation was directed by pipeline over to the dry kiln. The effect was that they got a far better product and — something I don't understand or know enough about yet — it stopped some form of crystallization or hardening on the surface of the wood in the kiln which they would normally get by utilization of another type of fuel. It just so happened that as a result of the nature of the heat coming from the wood waste going back into the kiln, they are getting a better product and it is being done more rapidly.

[ Page 8300 ]

So there is lots of value in the utilization of wood waste, and I think what it boils down to.... When I ask other mill operators why they aren't doing the same thing, first of all there is always the pinch as a result of the recessionary period that we've come through. "We can't look at an amortization of something up to four years. We have other priorities, and we are looking at something that we can have the cost returned for in one year or two years." There is only so much capital available, and there is only so much that they can borrow. But there are some real benefits in it. I understand that there is another major mill in my riding, Prince George North, which is going to be installing the same system.

With reference to the matter in the Queen Charlottes, I don't know — it just so happened that I have some information on that, and it is here for a totally different reason — but there are two mills. I wanted to know what processing facilities there were on the mid and north coasts and the Queen Charlottes. Well, we know that there are none, with the exception of two small mills on the Queen Charlottes. One is Abfam Enterprises Ltd., which has an estimated mill capacity of 40,000 cubic metres per year, and the other is Lavoie, and that is a family operation which has a capacity of about — and this is estimated, as is the previous one — 30,000 cubic metres annually. Both have roughly 15 employees and both operate under one shift. Their wood source in both cases is a small business enterprise program and opportunity wood.

I don't know whether or not there would be enough wood waste coming from or generated by each of those small independent mills to justify the expenditure of what would be required to put in a facility to generate heat and power. Also, when you look at their present capacity, I would doubt....

Interjection.

HON. MR. HEINRICH: It's worth inquiring of, though I can assure the member of that. But I don't think there would be enough revenue coming from 40,000 cubic metres. When you multiply that by — what is it? — roughly 212 to get the number of board feet in thousands, I don't think there would be adequate revenue. But I don't discount the possibility and the value of it.

With respect to determining what other operations.... There is only one other that I know of, and that's under construction: Wedeene River in Prince Rupert, which has a mill now under construction.

The cost of getting hydro over to the Charlottes.... When I made that inquiry previously, I was told that it's very significant. But we'll have a look at it.

The other matter which the member raised involved TFL 23. Yes, it is true that I have a report. A report was commissioned on TFL 23 many months ago. That report was filed. The purpose of that inquiry was to determine whether or not the operator was maintaining its annual allowable cut, even using the discretionary latitudes which are found: that is, any year, 50 to 150 percent, with an average over five years of plus or minus 10 percent. Yes, it is true that Westar had undercut in the area. It is also true that we were looking at both the north end of TFL 23 and the southern end of TFL 23, with a view to encouraging others so that they could have access to some timber. And by the way, those negotiations are in process now.

With respect to TFL 1, I want you to know that the information which I passed on to you is that which has been given to me. First of all, reduction of the size of TFL I was the result of an initiative taken by the Ministry of Forests. TFL I was reduced in half the first time, and it was reduced considerably the second time. In both cases the wood which was then made available has gone to other operators. I can't at this time give you any further information.

So your point with respect to the undercut is well taken. I want the House to know that the matter is being examined. With respect to the college, you won't get any objections from me with respect to assistance for the interior and northern people, but I have.... I was somewhat surprised to find the enrolment drop in the forestry faculty at the College of New Caledonia. I suspect the same may have happened at Northwest too, in Terrace.

With respect to the use of hog fuel and that waste for energy, I agree with the member. I will inquire as to the possibility for those two operators on the Queen Charlottes. But I suspect that it may be fraught with some problems.

Mr. Chairman, I gave some information to the House yesterday, and I advised my critic that I think I may have been incorrect in part on it. I want the opportunity to clarify what I said. It involved the funding for the Canadian Forest Industries Council. I said yesterday that I thought it was funded by both levels of government — that is, provincial and federal — as well as by industry. What I am now advised is no, it is funded by industry across Canada. However, the province of British Columbia does contribute — and did in the previous countervail petition — an awful lot of time for the preparation of the material. There was a warrant last time around; the province came up with approximately $260,000. The government of British Columbia retained a lawyer in Washington and there were a number of travel expenses, miscellaneous costs and consultants in the U.S. and Canada. I just wanted the opportunity to clarify that particular item.

I want to answer one other question which came out of this morning. The member for Nelson-Creston (Mr. Nicolson) was concerned about fire-suppression activity in the areas of Invermere, Cranbrook and Arrow Lakes. In Invermere, there was one lookout in 1985; for 1986 we have one plus three, and additional staffing as required. Obviously, if it heats up there will be personnel available. Cranbrook: in 1985 there were two; in 1986 there will be two plus an additional four as required. The Arrow area: in 1985 there were two; this year there will be two plus three as required. Those are lookout stations. As far as fire wardens are concerned, there will be 16 in Invermere in 1985 and 1986. In Cranbrook there are up to 50 as needed, and that will apply for 1986 as well. Arrow Lakes: 33 fire wardens in 1985, 36 in 1986, an increase of three. As far as personnel that have been trained, it's estimated that 300 people in industry and the finance and district people employed in the ministry attended a one-day course in multi-fire management.

I'd like to say one thing as far as the initial attack is concerned. In Invermere it's gone from six to nine; Cranbrook remains at 11, Arrow at 12. In addition to this, an 18-person helitack crew will be positioned at Cranbrook for the summer, which is new for 1986. A 13-person rapattack crew will be positioned at Revelstoke, with a Bell 211 on contract.

As far as air tankers are concerned, three Firecats and one Bird Dog aircraft will be positioned at Castlegar for 1986, the same as for 1985, plus access to the balance of the provincial fleet, which is 14.

[ Page 8301 ]

Equipment levels: Invermere, minor adjustments in upgrading; Cranbrook, exactly the same, but with a new warehouse and office. In Arrow Lakes there have been some adjustments as well.

[3:00]

MR. D'ARCY: Mr. Chairman, I have to rise and defend TFL 23. I have some concern about the remarks of the member for Skeena, and even more concern when I hear the minister say he's considering a report to reduce the cut in TFL 23, which I think I heard him say. In most parts of the West Kootenay, especially in TFL 23, we have a critical shortage of sawlogs, especially certain species of sawlogs. I fully appreciate that there's a severe undercut in TFL 23 in terms of total wood volume, but I think the minister will determine very quickly, if he consults with his able advisers there, that the undercut is in roundwood pulp, not in sawlogs. The reason there is — and has been for 20 years — such a severe undercut in roundwood pulp in that TFL is because in the mid-sixties the Crown changed the rules — for the better, I might say — to require pulp mills on the coast and in the interior to take residuals from other sawmills in their region., and also to buy pulpwood when supplied by other pulpwood suppliers.

[Mr. Ree in the chair.]

This has resulted in the Westar mill in Castlegar, through a succession of ownerships.... Even though it is producing far above its originally intended capacity, and hence using far more pulp chips and pulpwood in general than it was originally designed to do, it is still severely undercutting the volume requirements of TFL 23. This does not mean that they're being irresponsible about it when it comes to sawlogs, and I repeat that that is the critical type of wood in that tree-farm licence. They are not undercutting at all, particularly when it comes to certain species.

So I would ask that the minister not make reductions in area or in volume unless required by re-evaluation of sustained yield in that area, because I have a very large sawmill in Castlegar which depends on that TFL for a supply of sawlogs — hopefully in perpetuity. Any reduction in sawlog supply will threaten employment in that mill, not just in the long term but in the very short term. As has been observed earlier in this discussion this afternoon, we have come through — and are still going through to some degree — a very critical period in terms of many aspects of our forest industry. Having this possible reduction of wood supply hanging over the head of my constituents is something that we're very tired of living with. We would hope that the minister would move fairly quickly with a management plan, or with whatever he does under his ministry, to assure my constituents that their sawmill industry is going to be sustained in the immediate future and in the long term.

MR. PARKS: I ask leave to make an introduction.

Leave granted.

MR. PARKS: In your gallery this afternoon, Mr. Chairman — actually in most of the galleries here — we have a group of students from Quebec as well as my constituency. One of the benefits of the immersion program has been the development of an exchange program, and this past April a group from Como Lake Junior Secondary School in Coquitlam travelled to Quebec to learn a little bit about Quebec and their culture. We have a group of students from Francois Bourrin School in Beauport, Quebec, and I'd ask the House to join me in making very welcome those students as well as the teachers who have joined them: Kathy Paradis and Robert Paradis from Quebec; and the parents and teachers from Coquitlam — Diane Aussant, Michele Paquin and Chuck Provost. Bienvenue a Victoria.

HON. MR. HEINRICH: I'd particularly like to repeat the welcome which was given to the students from Quebec, and I'll tell you why. My daughter just returned from one year at Laval University in Quebec City, and after her year there and half a year in France, I tell you the French language is spoken at home all the time. I don't understand it, mind you — she gets away with everything. But it was a wonderful year she had in Quebec City, I can assure you of that.

Interjection.

HON. MR. HEINRICH: Well, what do you know: somebody would come out and spoil a good thing.

I would like to just make a couple of comments very quickly for the member for Rossland-Trail. The information which I've been able to obtain over a very short period of time would indicate to me that Westar has been undercutting in that area for a long time. Some of it was very significant and at other times it was not. One of the issues was: why were pulp logs left? One of the reasons they were left is that they didn't fulfil the commitment, and the commitment was to increase the pulp mill in your riding from 500 tonnes, I think, up to around 750 tonnes per day. It never came to pass. So that is something we have to look at.

I've also got the problem that they had from years ago with respect to the white pine which developed what is referred to as blister rust, or something like that. When I see stands like this, where the longevity of those stands is going to be determined by various types of disease which they're susceptible to, lost....

Now I appreciate the caution advanced. It is not that I am not mindful of it, either, but sometimes we have to make certain structural changes. I'm not saying they're going to come to pass, but I want you to know that they're being seriously looked at. All of this time was not spent just to have a report done and filed. It would not have been commissioned in the first instance unless there was a bit of a problem. So we'll look at it, keeping in mind as well that there are a sawmill and a pulp mill which have to be fed. But Westar has never even come up to its annual allowable cut. So I suspect that the general public's nervousness in the area within which the mills are located is probably a very real one. I do not have any intention whatsoever of short-circuiting the supply for two existing operations. From the information that I've got, there would appear to be an adequate supply. We'll just have to see what happens as the next few weeks unfold on that one.

MR. D'ARCY: Mr. Chairman, I'll try to be brief as well. There are several points I'd like to make to the minister. First of all, that mill is producing somewhere in the neighbourhood of 600 metric tonnes rather than the original 500 short tons that it was designed for. I'm sure the minister is aware that there has been no expansion of pulp capacity anywhere in the

[ Page 8302 ]

province — or no significant expansion in recent years — for the very good reason that there was an oversupply on the world market, and no company was increasing.

I'd like to point out to the minister that, unlike the mills in his constituency or anywhere else away from tidewater in the province, this is the only mill which is required to operate a wood room and to cut roundwood pulp from its own TFL. Crestbrook isn't, Weyerhaeuser Kamloops isn't, Cariboo isn't, Mackenzie isn't, and none of the Prince George mills are. Only this particular mill is required to cut roundwood pulp in its own wood room — the only instance away from tidewater, Mr. Chairman, and that is a fundamental difference.

I'd also like to point out to the minister that I don't know — maybe the minister does, but I don't — of any instance in the province of British Columbia where the ministry is saying to a company that owns both pulp mills and sawmills: "You aren't making enough pulp; therefore we're going to cut down your sawlog supply, whether the sawmill is at site or somewhere else in the province." I say that's an absurd situation, Mr. Chairman. If the ministry wants to make some adjustments in terms of pulp supply, then I think they should think about that.

But what we're concerned about in Rossland-Trail, and what the working people and the business people in Castlegar are concerned about, is a reduction in the sawlog supply or a diversion of sawlogs. That is the concern. I hope the minister will understand that and I hope the minister will take that into account when he makes his decision and reviews reports from his advisers.

MR. MacWILLIAM: I'd like to address a number of individual problems up in the North Okanagan and the Arrow Lakes area, which of course is part of Okanagan North constituency. I'd like to talk a little bit about NSR lands in that area, as well as the lack of access to wood, and go on to some specific problems regarding a couple of local operations up in the Shuswap area, and then talk about some personal observations I had in the height of the forest-fire season last year over in the eastern part of my area along the Arrow Lakes.

First of all, in regard to forestry in the Okanagan in general, I want to go over a few statistics that have been brought to my attention by companies that belong to the Shuswap-Okanagan Forestry Association, or SOFA, as it is commonly called, just to highlight the importance of forestry in my particular region of British Columbia. Forest companies in the Shuswap-Okanagan forest area had a payroll in previous years of about $82 million; $36 million was spent on supplies, energy and fuel requirements; apparently $83 million was paid out in terms of forest contracts to forest contractors; capital expenditures of about $12 million; and about $56 million on Canadian carriers for shipping contracts. If you add that all up, Mr. Chairman, there's a total of $269 million in direct expenditures in the local and larger economics in the area. That's not even considering the multiplier effect of that direct expenditure.

Now those companies generated direct and indirect employment in forestry and related employment, spin-off employment, of.... It's estimated at about 13,000 person years. They paid out about $67 million in taxes to the provincial and federal governments, and only $5 million, or 7 percent of that, was in the form of stumpage payments to the B.C. government.

[3:15]

The Okanagan TSA contains about 1.7 million hectares of productive forest land. I understand about 70 percent of that is considered to be good- or medium-site land. About 16,000 people — or almost 20 percent of the total labour force in the Okanagan-Shuswap region — were directly or indirectly employed dependent upon the forest industry. That figure is taken from 1983. In fact, I think probably most of these figures are 1983 statistics. The annual sale of forest products in 1983 was about $291 million, and 72 percent of that can be estimated to be new wealth to the province.

The forest industry in the TSA generated almost $50 million in provincial tax revenue in 1983. I don't want to go on ad nauseam with particular statistics, but why I did go over that is to highlight the importance of the forest industry as the major economic component in the north Okanagan area, and into the Arrow Lakes. It's a major employer. It is the major industry in that area. Yet we have some very significant problems that the industry is facing as the result of the NSR not sufficiently restocked — land throughout that area. In 1983 the NSR land, according to information available, was about 95, 419 hectares. That's a little over 8 percent of the total good- and medium-site land.

Interjection.

MR. MacWILLIAM: Yes, I can. I guess maybe I need glasses, looking way down here. Anyway, about 95,419 hectares, according to my figures, plus or minus one or two. That's the figure.

I want to read to the minister an internal report from his own ministry that is discussing this backlog of NSR land. I'm sorry I don't have the year of this report, but I think it was probably around the same time — about 1983. It says:

"The backlog is being added to each year, since regeneration on current logging areas (basic forestry) is not being accomplished at required levels due to the lack of funding. The Okanagan TSA in particular is predicted to have a timber-supply shortage beginning within 5 to 15 years" — that was a couple of years back — "of eventually 50 percent, even if basic forestry were practised. Since reforestation performance continues to be less than even this basic level, the magnitude of the shortage is expected to be even worse. The TSA will undergo..."

I'll wait for the minister's attention on this one, because I think it is a major statement.

"...extensive destabilization through the loss of at least one-half of the forest sector employment, government tax revenues, etc. Unforeseen losses of mature timber due to pests may further exacerbate the problem. The situation can only be ameliorated through a greatly expanded silviculture program."

That, Mr. Chairman, to the minister, is a quote lifted directly from documents from his own ministry.

Now to avoid the shortage and to maintain the industry, it's been estimated by members of the Shuswap-Okanagan Forestry Association that an annual expenditure of about $16.5 million on silviculture is needed, and needed now. If you look at that figure and compare it to the figures of money presently being spent, we see that it's about three times the amount spent in 1984, according to the same report. The report is dated October 1984, for the minister's information, if he wishes to review that.

[ Page 8303 ]

Now under the ERDA program in 1985 and 1986, only about $1.2 million was spent — it's my understanding — in the entire Kamloops forest region. I think this has been upgraded for 1986-87. The figure we researched for the Kamloops forest region — and you may wish to comment on this and verify it — is about $3.5 million. I'm going to stop at this point and ask the minister if he can confirm whether the present expenditures under the provincial-federal ERD agreement are $3.5 million for the Kamloops forest region. The minister is confirming this.

I wonder if the minister can confirm how much of that is being spent specifically in the Okanagan timber supply area.

HON. MR. HEINRICH: I will have to bring that answer back; I don't have it available when you are talking about a timber supply area breakdown.

The NSR figure that you used — and you were referring, I presume, to the Kamloops region — was 95,419 hectares of NSR. That is within the Kamloops region? I just want to make sure, because what I am concerned about is this. I gather that you made reference to a report dated October, 1984, and the concern which we have obviously is the sites which are being attended to for reforestation purposes. I think we should be directing our efforts at the good and medium sites.

When I see the agreement in front of me and the breakdown under the federal-provincial agreement on page 21, table 2 makes reference to the Kamloops region, Crown forest land, hectares of NSR, not satisfactorily restocked, and this was in June of 1982. The amount which they said was for the good and medium totalled 39,590. So I am wondering if the member for Okanagan North could give us a breakdown of the 95,400 or so.

MR. MacWILLIAM: Well, I don't have those figures available, but I think the minister has to recognize that the point I am trying to make is that there is a very significant amount of NSR land outstanding within the region that is not being sufficiently restocked. To proceed a little further with that, he did confirm that the total amount expended under the ERDA program for the Kamloops forest region, and the minister earlier confirmed this, is $3.5 million.

I want to point out the discrepancy. The need as determined by the Shuswap-Okanagan Forestry Association indicates that there is a need for about $16.5 million, and we're talking about actual expenditure of $3.5 million. So we're looking at quite a significant difference in what the needs are and what is actually being expended in the area. In pressing the point, I think the minister will confirm that the $3.5 million falls far short of the $16.5 million that is in fact needed for adequate reforestation programs in the area.

That is the point that I wanted to make. That is in fact the point that the Shuswap-Okanagan Forestry Association has been attempting to make for some time now with this government and with the previous minister.

I want to read into the record a letter addressed directly to the Premier from the district municipality of Coldstream in the north Okanagan. I won't read the whole letter but just the specific focus of the letter. It says: "The Shuswap-Okanagan Forestry Association has proposed that the level of reforestation and stand-thinning be increased by 40 percent to 50 percent to rectify the forest management practices in the past and to keep up with the timber-harvesting activity being carried out at the present time. The council of the district of Coldstream support the position of the Shuswap-Okanagan Forestry Association and would respectfully request your immediate attention to this serious situation." That is signed by Mr. Harry Ellens, who is the clerk-administrator, on behalf of the district of Coldstream.

I would at this time ask the minister if he has immediate plans to significantly increase the budget allocation for reforestation in the Okanagan TSA as part of the Kamloops forest region.

HON. MR. HEINRICH: Mr. Chairman, one of the major concerns I think we all have is the level of reforestation, not only in the Kamloops region but in all regions of the province.

I think it has to be recognized that funding is not always easily obtainable, but an examination of the budget for the Ministry of Forests this year shows a lift of 23 percent. The lift in the silviculture branch is something in the order of 47 percent. The concern that we must have, and that we will continue to have, is to press for additional funding. That's acknowledged. When you look over the history of the province and what has happened in recent times, generally speaking there has been a significant increase in reforestation. I suppose the simplest method of calculation is by the number of seedlings planted, but that also poses a problem. As we all know, seedlings may not succeed on the first planting. There was some debate to that effect in the House last week.

I think the federal-provincial agreement — $300 million divided equally — is a significant start. Yes, we're going into the third year of that agreement. This year it's boosted to $44 million; the previous year I think it was $22 million in total. When we examine the NSR, I think we've got to look, as our predecessors did, at good and medium sites. That's why I asked the question involving the total number of hectares classified as NSR — what portion of that. I would venture to say that something in the order of two-thirds of the hectares that were given are probably lands which should be addressed. My biggest concern is that we don't increase our backlog. As on of your members pointed out not too long ago, is the present rate of reforestation such that there will not be any increase in the backlog when the five-year federal-provincial agreement concludes? That's a concern we must have.

Also, it's found in the agreement. I'd like to read the last paragraph on page 17: "Coincident with this agreement is the commitment of the government of British Columbia to maintain a basic silviculture program at levels sufficient over the life of this agreement so that there is no net increase in backlog of not-satisfactorily restocked forest lands." I think it's right and that we must make every effort to uphold our part of the bargain.

You may feel that the increase this year under the Ministry of Forests is not adequate. However, I'd like to point out that for the Kamloops region, the total expenditure under the silviculture program to cover.... There are a number of votes in here: 33, 34 and 35. Vote 36 is the FRDA program, the one I just referred to. Under section 88 there's another sum of money; under the small business enterprise program there's another amount.

[3:30]

The figures I have before me would indicate that in the Kamloops region, the total amount to be spent in 1986-87 will be $18,238,878. I'm not going to stand here and pretend

[ Page 8304 ]

that the injection of that type of money into the silviculture budget, and as directed into the Kamloops region, is going to satisfy the requirements of SOFA. I met with them, and they presented their video to me, which I'm sure the member has seen. It's excellent. It was the first video, I might say, that I have seen to bring the point right home of the importance of the forest land base on reforestation, because it goes right into the community and shows the reliance by everybody in that community on the importance of the forests,

So whether the member for Okanagan North will seek any comfort in that total figure I gave, which is in excess of $18 million, I am not sure. But I want him to know that I think our objective has to be to address the good and medium sites as aggressively as we can within the parameters of our budget, and that we must maintain our commitment under the federal-provincial agreement so that the NSR, the backlog which that was to address.... It would take probably ten years to do it, but the recently harvested lands would be attended to as soon after harvesting as possible.

[Mr. Strachan in the chair.]

Now I know there is some variation between all the foresters as to when they ought to replant. I was on a site within the last month where there is significant regeneration, and the biggest problem is thinning and weeding. I was on a site recently where tree-planters were very active, and the harvesting had just been completed. The nature of the site permitted the planters to get on right away. Other sites that I've visited show that they would require broadcast burning. That's something new to me, and that term is new to me as well.

Interjection.

HON. MR. HEINRICH: Broadcast burning. I thought that was kind of interesting.

Even the foresters say: "No, you should not touch that land for two to three years after harvesting." I'm relying upon those who have the technical expertise to give counsel.

Our commitment, which I repeat, is to ensure that the backlog does not increase. I would hope that the total amount of money from the various sources under the silviculture program and as directed to the Kamloops region would satisfy the requirements this year of the organization whose cause you are advancing.

MR. MacWILLIAM: I heard it once described that the total amount of NSR land in British Columbia can be equated to a 50-mile swath 200 miles long. That would be a swath 50 miles wide stretching from here to Penticton, approximately. I don't know if that's accurate, but in visualizing it, if it is anywhere near accurate, we have a significant problem here, and a problem that needs to be addressed, I think, a little more aggressively than the present minister appears to be doing.

The minister has said....

Interjection.

MR. MacWILLIAM: The reason I say that is because you're standing on the other side of this House today telling me that the information available to you indicates that the backlog will not increase. Well, for gosh sakes, by implication you seem to be saying that it's a form of standing still, of treading water. And what we're saying on this side of the House is that we have to address the backlog already there and to reduce it within a reasonable period of time.

I have no argument with the minister's statement that we have to prioritize, I don't think anybody on this side of the House has. We have to address the good and medium sites first, but we have to address them in a manner that will show very clearly within the next few years that we are not only addressing the backlog that is presently accumulating, but that we are in fact significantly reducing the historical backlog in this province.

To go on to another issue with the minister, many independent operators have been experiencing a problem in getting access to wood. I speak specifically of local small-mill operators in Salmon Arm and in the Shuswap-Revelstoke area who have been virtually starved for wood. Some of these operators apparently have been paying in stumpage up to five to seven times what the quota-holders have been paying. These high prices on the small-enterprise market indicate just how competitive that market for available wood is. It seems reasonable that because of the high cost many of them can't afford the wood or it may be of poorer quality or in some cases too far away for them to go and get at that higher cost.

A lot of the smaller independents are going without wood as a result of the lack of access. It is my understanding that Westar Timber, meanwhile, has been consistently undercutting on its TFL for a number of years, and the minister, I think, would agree that this has been ongoing. In fact it shows up in ministry reports. Ministry officials have themselves said that Westar has been undercutting an average of about 140,000 cubic metres over the past five years. I have got a copy of a ministry document that goes from 1980 to 1984. If you look at the years 1981-1983 inclusive and you average out the estimated undercut, it averages out at 38 percent. One year it was minus 28.2 percent and another year it was almost minus 60 percent, another year 22 percent. Just on an averaging, I think my arithmetic in my head indicates that it would be around 38 percent. I think the evidence of this undercut and also the evidence of the independent operators going without access to that wood indicates that we have got a significant problem.

Apparently the last operating sawmill in Revelstoke is going to have to close within the next three months. It has 23 workers presently there, and the information that we have available is that it will be closing as a result of, lo and behold, a lack of wood, at the same time that we've got an average 38 percent undercut with the Westar TFL.

I have a couple of questions. It seems that the Minister of Forests hasn't been on top of this issue. I know we've discussed it with the former Minister of Forests. I can recall very clearly last year going over many of these details. Nothing has been done. I would like to ask why the government hasn't been enforcing the "use it or lose it" policy that is presently in the Forest Act. I would like to ask why the ministry has not been listening to the needs of the local people, individuals, independent operators up in the Shuswap-Revelstoke area who have been complaining for years about the operations of Westar and also complaining about the lack of access to wood.

Apparently the ministry, according to a recent news article in the Sun, is looking at a recommendation to cut about 10 percent of TFL 23 from Westar —  yes, 12 percent. Although

[ Page 8305 ]

that is a start, it makes us wonder why the ministry has been dragging its feet so long in this issue. I think what is needed in this area is a review by the Ministry of Forests in terms of timber allocation; there is also a need to look at the major licences of those mills which have been operating for years without any quota and compare the operations as to their performance. I think it needs to be done so that the small operators can get access to the wood either through increased allocation to the small business enterprise program or by some means of having a quota allocated to them. Perhaps the minister would like to comment on this before I go any further.

HON. MR. HEINRICH: Mr. Chairman, on the first part with respect to the backlog, the increase in funding I mentioned a moment ago works out to be under the silviculture program something in the order of a 45 percent increase for the Kamloops region for 1986-87. Now that is a very significant increase.

MR. MacWILLIAM: How much is actually going into reforestation?

HON. MR. HEINRICH: Under the silviculture program for the Kamloops region, I read to you the figures. They'll obviously be available to you in Hansard. Out of the votes that they come from, that is the money that is going into reforestation one way or another. The increase went from $12.5 million to $18.2 million, rounded. That's an increase of 45 percent.

Also with respect to the NSR, I think it's important that you refer to page 21 of the federal-provincial agreement, where reference is made to the good and medium sites — this was calculated in 1982, and there will be an increase, I suspect, of lands which have been harvested between then and now — and these came to roughly 1.1 million hectares.

The paragraph which follows is kind of interesting. I'm looking at the province, and I might mention that the area of NSR in the Kamloops region is very low. It's running almost neck and neck with the Prince Rupert region with a backlog. The Prince Rupert region, according to this, is 32,800 hectares; the Vancouver region is 21,400 hectares.

The total amount represents about 2 percent of British Columbia's forest lands, but a higher proportion of the most productive forest lands of the province. Conservatively, the rehabilitation of all good and medium growing sites would add roughly 1.75 million cubic metres annually to the long run sustainable yield of timber. Additional increases can be expected if genetically improved stock is planted in some areas or follow-up silviculture treatments are undertaken.

Reference was made to access to wood, and you made reference to Salmon Arm and Revelstoke and the stumpage which was paid. It hasn't taken me long to figure out exactly what was happening in this small business enterprise program. I don't know if it's right, but it seems to me that it is resulting in an incremental wood supply for the major independents. Consequently, those under the program. and my exposure recently....

Well, what has happened is that while they will go out and bid for 10,000 or 20,000 or 30,000 cubic metres, and the amount of money that they put out for it, before they bid, I have reason to believe that many of those small entrepreneurs have made an agreement with a major or a large independent or a medium-sized independent with respect to the supply of wood. They will probably determine in advance what their purchaser will pay for that wood when it is harvested.

[3:45]

Once that is determined, they are then in a position to bid the prices which they do under the enterprise program, keeping in mind that those who have security of tenure maybe are not totally self-sufficient, but they certainly are when it comes to a percentage of the annual allowable cut which they need to operate their mills, which could go anywhere from 50 percent to 75 percent. What happens is that they can take the wood which they have already got and have bid on, and now have, and at the stumpage rate which they have agreed to pay and do pay the Crown. and they can then use that as leverage so that they can afford to pay a certain amount more for the wood which they get under the small business enterprise program.

When they look at the average, whosoever that mill is, when they acquire that wood they can take the cost of that 10,000, 20,000 or 30,000 cubic metres, add that to their annual allowable cut, average it out, and so the cost to the millowner is then softened. That leverage is available. Those bids, which are submitted under the small business enterprise program, I suspect would not be quite as high as they are if they didn't have a market to direct that wood to.

In the area of the undercut, it seems to me that we have a little problem here because the member for Rossland-Trail (Mr. D'Arcy) says: "No, don't you touch it." Yet there are now two members from the opposition who have said: "Yes, we want you to." I think you're both right. There isn't any question that we must maintain....

AN HON. MEMBER: We're always both right.

HON. MR. HEINRICH: You're always both right, okay. But the truth is that I think you are both right, because on one side we've got to make sure that there is security of supply of pulp logs for a major pulp mill. And there was nothing wrong with having the wood room. The whole plant was designed for that, and the TFL was set up in such a way that it would funnel wood into the wood room. I think that begs the question. It is true that there has been an undercut, and the percentages which you gave are in fact correct. Hence the report which was requested, and yes, the analysis that came out after that did say 140,002. So we have to have a look at it.

Yes, I'm concerned about the operators in Revelstoke, and yes, I'm concerned that clause 8.8 on the Downie Street mill specifically states that the wood — which has really been taken out of TFL 23; it's within their block area — is to go to that mill for the purpose of sustaining employment in Revelstoke at that particular mill. Hence my telegram to them saying that they were not to remove the logs. Hence the subsequent telegram to them which said: "You will place your licence in jeopardy, Downie Street Sawmills, if you do not comply with the terms and conditions under which your licence was granted." I haven't heard of any complaints. As a matter of fact, just after I o'clock today I was talking to somebody in the area and was told that there hadn't been any movement. Obviously Downie Street Sawmills has taken the second telegram a touch more seriously than the first.

Yes, I'm aware of Mr. Kozek's operation in Revelstoke, as well as some others. I also recognize that only 8 percent of the cut in the Revelstoke area is being processed in the Revelstoke area. The MLA for Shuswap-Revelstoke (Mr. Michael) has made that abundantly clear, and he has been advocating a

[ Page 8306 ]

solution to this problem for some period of time. So I think that we will address these issues. But you can't do them overnight. I think the ingenuity is found, from what I can pick up so far, among the independent small operators, who will certainly adjust their ways in order to capture certain markets that may not otherwise be captured by those who operate within the province and have significant-sized operations.

I'll sit down now. I thank the member for bringing these points to my attention. I'm aware of them, and I would like to find a resolution.

MR. HOWARD: The minister is playing games with figures here when it comes to talk about NSR land. The statistics and the documents from which he reads them are accurate, yes. He referred to the federal-provincial agreement and a certain page on.... He's got a printed copy there; I've got the typescript, so it may not be the right page number. In any event, the minister read from table No. 2, and he said that the total good- and medium-site NSR land in the Kamloops forest region was 39,590 hectares. At least, that's what my copy says here. He said that's really all we're talking about. The heading of that particular table says June 1982. Those figures are 1979 figures with minor adjustments for 1982. If you look at your own "Forest and Range Resource Analysis 1984," on page C1O you will see that the total of NSR land — all sites for the whole of the province, after factoring.... Remember this: the Forest Service supplied a set of criteria with the raw data, the result of which was to reduce the numbers. In 1979 it was 1,095,200 hectares. That figure is reproduced virtually intact in the federal-provincial agreement. The federal-provincial agreement says the total of good, medium, poor and low sites was 1,095,220. Now those figures are virtually the same. The 1979 figures and the figures that are referred to for June 1982.... They are basic figures from 1979 that we are talking about.

The "Forest and Range Resource Analysis 1984" on page C10 points out that good- and medium-site NSR land in the Kamloops forest region was 141,000 hectares. That is before factoring. I want to discuss the factoring question a bit later. But give factoring the benefit of the doubt here: 141,000, by my calculations, is about a 60 percent figure. I use that for round purposes, that the factoring results in a 60 percent reduction. If we take 60 percent of 141,000, we come up with good- and medium-site NSR lands in 1984 in the Kamloops forest region of some 84,000 hectares — not the 39,590 referred to in the federal-provincial agreement; more than double. So I submit that, this being 1986, that's what we should be talking about as the situation today, not the situation as it was in 1979, which is the foundation of these figures in the federal-provincial agreement.

That's one question, and I think that should be on the record. Every forest region in the province is in a similar position, in that the figures in the federal-provincial agreement, the stats for the good- and medium-site NSR land, are all 1979 figures. The situation in 1984 is virtually double what those figures are or what those figures were, and that is something that we should seriously consider.

It is for that reason, if nothing else, that the amount of money that the minister talked about available for reforestation, silviculture and so on is so grossly inadequate to serve the requirements and the needs that we are faced with today. I am sure the minister recognizes that the money is inadequate, but I thought it would be worthwhile to put those figures.... And my 60 percent is a rough calculation of what that relationship is. In fact, a rough calculation on the upside; I use 60 for easy, quick calculation with my pen and pencil here, and a piece of paper, to come up with a figure.

But basically, no matter how you refine the calculations, there is at least twice the amount of NSR good- and medium-site land in the Kamloops forest region than is identified in that federal-provincial agreement.

MS. SANFORD: Mr. Chairman, I am just asking leave if I might make an introduction.

Leave granted.

MS. SANFORD: Up in the gallery this afternoon is a group of students from Vanier Senior Secondary School who are with the special class at Vanier and who have with them a delegation of exchange students from the province of Ontario. I am hoping that the members of the House will make them welcome this afternoon.

MR. MacWILLIAM: With respect to the comments my colleague just made, the minister shakes his head. Other than a simple head shake, I wonder if the minister would agree to the comments that were just made with respect to NSR land.

HON. MR. HEINRICH: Mr. Chairman, I am not in a position to either agree or disagree, but the member has advanced some logic to forward his case. It may very well be that he could be right. He may very well be. The figures that I referred to in here.... I made comment on this document; I made comment on 1982. There isn't any question about that. I think he would concede that point.

But later on, with reference to the analysis, it could very well be. Where I think there is a possibility the backlog has increased on good and medium sites, compared to what is published using the 1982 figures, is.... The figure which you gave earlier when you mentioned something about.... I think it was 95,419. I asked the question whether or not that was good and medium, or good, medium and poor.

I think we determined that was probably the total, so if we take 60 percent of that, it would jibe with the figures which are advanced by the member for Skeena, because when you look back to 1982, round it out at 39,500 and multiply that by 100 divided by 60, you will come up with exactly the figure that I think would dovetail with the remarks of the member for Skeena on a provincewide basis. I think that's right.

[4:00]

MR. MacWILLIAM: We certainly can get tied up in the numbers game. But I think the minister recognizes that this government's commitment to reforestation is not adequate. Figures have been thrown around quite a bit. Just to throw a few more around, experts within the field of forestry have indicated figures in the area from $300 million to $600 million per year being needed for adequate reforestation programs. The present reforestation program, under the federal-provincial ERD agreement, is $300 million over five years. I think the minister can recognize that there is certainly a discrepancy between what is perceived to be needed and what is actually allocated. I'm not suggesting that the ministry or this government has a bottomless pit of funding, but the minister has to recognize the very critical need that still exists out there for an increased commitment to reforestation throughout this province, a commitment that has not, at this

[ Page 8307 ]

point, been adequately demonstrated by either this minister or this government.

I mentioned earlier the need for access to timber supplies for a number of firms up in the Shuswap-Revelstoke area. I just wanted to add, for the minister's information, that that need also exists in other areas of TFL 23. In fact, over in the Arrow Lakes area, the Nakusp-Fauqier-Edgewood area, a number of operators have commented to me on the need to get access to that timber that is not being harvested through the annual allowable cut of Westar. I think the minister has to recognize the critical need, in view of the high level of unemployment in the Arrow Lakes area — an unofficial unemployment level that I've been told is in excess of 50 percent. Those areas rely very heavily on the forest industry. We need to get timber to those independent and small operators so that they can hire men: men that have been laid off, men that aren't working, men that are drawing UIC or have gone far beyond the UIC, and have had to subsist on welfare. Forestry in that area, getting access to wood, is the lifeblood of the Arrow Lakes region. The minister simply has to recognize that access to timber has to be granted.

Moving on to an issue which the minister touched on earlier — and I'm glad he did — Downie Street Sawmills. As the minister well knows, Downie Street was closed in December 1985. It is owned and operated by Federated Co-op in Salmon Arm. Apparently the supposed labour dispute that was taking place was when the company wanted to force a 25 percent rollback in salary for the employees. After the employees refused, the company went into receivership and laid off 165 workers. These workers went without UIC benefits for two months. The layoff has had a major impact on Revelstoke area businesses.

Valuable wood — 800 to 1,500 truckloads, it is estimated — was left in the yard. This wood could have been used to create jobs locally, but the ministry did not take any action to allocate that timber. Apparently the member for Shuswap-Revelstoke (Mr. Michael), who is not here now, had said that this was a top priority for him; yet only a couple of weeks back, when reporters asked him about this issue, with regard to the Federated Co-op's attempt to move wood out of the area, he knew nothing about it.

The minister had touched on the attempts of Federated Co-op to truck the wood out of the area, apparently to Adams Lake. He has said that he has written Downie Street with regard to this. But I think we need more than that from this minister. I think we need a commitment from the minister that he will set a time limit, by which time Federated Co-op must either start up the mill again, or sell the mill, or lose its wood supply. We've got 1,500 truckloads of usable timber there, timber that is going to waste because the small operators can't get access to it; timber which they were trying to ship out of the area. This government is doing nothing about that. I wonder if the minister would commit himself to establishing a time limit, where the company must, as I say, start up the mill, sell the mill or forfeit the wood supply.

[Mr. Rogers in the chair.]

HON. MR. HEINRICH: Mr. Chairman, we're between the rock and the hard place. You see, the forest licence, really, right now is in good standing. It has about three years and a bit to run. The licence expires in 1990. The way they are moving at the present time, you can see that they will have some difficulty in having any renewal of that licence, and I think they're very much aware of that right now. If they intend to preserve their interest, it seems to me they're going to have to demonstrate some performance very rapidly or their financial interest in the plant, the investment in the lands, is going to be in peril. I can't give you a time on this. If I could say "tomorrow" I would, but I can't; but I want this matter resolved fairly soon.

MR. MacWILLIAM: For the minister's information, the Revelstoke area has a 21 percent unemployment rate. I submit to the minister that these people can't wait any longer. They need access to that timber; they need jobs, and they need jobs now. I think the minister should commit himself to act immediately upon this problem and not exacerbate the situation by refusing to move on an issue that should be resolved.

To move on to another issue, again it's an establishment up in the Shuswap area; that's Drew Sawmills, which after its receivership has gone into part of the Beaumont mill operation. When Drew Sawmills went into receivership, its forest licence was estimated by Touche Ross to be worth $6 million. The licence was eventually transferred to Beau-J Holdings for one dollar, despite the fact that the small mill operators in the area had pleaded — and I had pleaded on their behalf last year, as had many of my colleagues — for the minister to release some of that timber allocation from the licence.

Beaumont Timber already had two tree-farm licences with no operating facilities. In response to pressure from the small mill operators, in response to questions from the House, in response to a letter from the MP for that area, Mr. Nelson Riis, in response to a letter from the Canadian organization of small business charging that the former Forests minister had a conflict of interest, the former minister assured all that the transfer of the forest licence would only be approved....

Mr. Speaker, I am absolutely amazed to look across the floor and see the lack of commitment by members of this government on an issue of this importance. When we're discussing forestry estimates, not one member of government is in this House, despite the minister's presence. That shows you the commitment — or lack of commitment — of this government to discuss what is a major industry and a major economic concern in the province of B.C. Not one single, solitary member in the House. That's absolutely appalling.

Mr. Chairman, let me reiterate. After the appeals from a number of individuals — federal, provincial, the business community, the community at large — the former minister assured everyone involved that the transfer of the forest licence of Drew Sawmills to Beaumont Holdings would only be approved if three conditions were met. One, that the purchaser maintain and operate the mills at Malakwa.

I see one solitary member wandering in. Is that the extent of your commitment to forestry? You should go and get your colleagues and bring them back here. Tell them important things are happening.

MR. CHAIRMAN: Order, please. Could we ask the member to address the Chair on these matters.

MR. MacWILLIAM: By all means, Mr. Chairman.

Two, that the logs generated from the forest licence shall be transported to and milled at the Malakwa facility. Three, that the new owner must continue to supply logs to Drew

[ Page 8308 ]

Sawmills traditional customers in the area, operators who had relied on Drew for their log supply because little alternate supply had been made available to those operators in the Shuswap area. Three conditions established, apparently, by the minister before that licence was transferred.

It's my understanding that the owner, Mr. Mel Beaumont, agreed to these conditions before the transfer of licence. One year later, what do we have? Every condition has been broken.

Let's look at the performance. Number one, only one of the two mills was ever reopened, and it closed down from October 1985 to February 1986; and since it's been reopened, only the planer portion of the mill is operating — the planer mill. Number two, Beaumont insisted that as a condition of the transfer of ownership all employees be first fired. Some of them were rehired, but they were first fired so that the employees would lose their seniority and pensions. Number three, logs are not being supplied to Drew's traditional customers. What's happening? They're being sold to the Crown Forest operation in Armstrong, they're being sold to operations in Kelowna, and they're being sold through middlemen to operations on the coast.

The fourth point: because of a deal made by Beaumont and the Canadian Commercial Bank, Beau-J Mills does not need to pay back interest or capital if it shows an annual operating deficit. What this means is that there's a marked disincentive for this mill to operate profitably. To this end machinery is leased from Beaumont Timber and maintained at Beau-J.

What's ironic is that another adjacent mill, CITC, a mill that this operation was supposed to supply, has had to buy logs at seven times the price through the small business enterprise program. This was one of those firms that they were supposed to guarantee supply to. CITC employs more people and operates more efficiently than the Beaumont mill, we're told. So we can see that the performance of this operation has not honoured the commitment that was made by the former Minister of Forests in transferring that licence. The commitment has not been honoured. I wonder if the minister has any comments on that.

[4:15]

HON. MR. HEINRICH: I regret to advise that I cannot make any comment on this, because it's the first time that I have heard about it. But I can tell the member that I will be making the appropriate inquiries and have made a note to that effect.

MR. MacWILLIAM: I can only say that I think the business community, the small independent operators up in the Shuswap-Revelstoke area, really feel that they've been short-changed as a result of the transfer of holdings of Drew to Beaumont. They certainly felt that they were short-changed last year when the minister simply refused to acknowledge the need for availability of timber supply; and certainly with what has happened with the performance of that mill subsequent to the transfer, they're more concerned than ever. I would urge the minister to investigate the matter at his earliest opportunity.

Moving on to another area, it is an area that has been touched on previously but I want to make some comments with regard to the Arrow Lakes forest area. Last year, in July-August I guess it was, at the height of the forest fire season, I had taken the opportunity to travel over into the Arrow Lakes and into the communities of Fauquier, Edgewood, Burton, Needles. I took my scuba gear and travelled around the area. Actually, I was there on other business, on constituency business. But I was absolutely shocked when I got there; in going across on the little ferry from what used to be the town of Needles over to the Fauquier side, the entire valley was in a pall of smoke. It was just in a total blanket of smoke. I've never seen it over there before. It didn't take me long in discussing concerns with the residents of that area to discover that the most critical concern at that point was the forest fires.

The forest fires in the Arrow Lakes area and the Nakusp area didn't receive a lot of attention in the news media because none of them were major fires. Not like the large fire we had over in the Nelson area. It took all the heat, so to speak. However, for the minister's information, local forestry officials informed me that there were 114 fires burning at that time; at that very time, 114 fires in the Arrow Lakes area.

I had the opportunity to take a flight with the fire boss in that area over many of the fires that were along the edge of the Arrow Lake, and we flew over a number of actively burning fires as well as some that had been put out, and to the credit and the dedication of the men who were fighting those fires, they were certainly working to the limits of their capacity and their ability and they were doing a fine job. But I think what worried me most was the concerns that residents and people — these were people skilled in fighting fires, who were knowledgeable of the forests — were bringing to my attention. What they were saying was that many of the fires that had erupted would never have grown to be the problem they became if in fact they had had initial attack crews on the job and had been able to respond to those spot fires immediately.

One fire which got out of control was called the Stoney Creek fire. Stoney Creek is a tributary into the Arrow Lake just outside of the community of Burton. This fire was right down onto the road; in fact, they had to stop traffic at one point. The fire was only a few kilometres away from the community itself. It was out of control, it was in difficult terrain and there was a considerable danger to the community and to the traffic along that road. The people I talked to maintain that it was the lack of equipment and of manpower in the area that was the precipitating factor in those fires getting out of control.

The forest lookout station that was operative in Fauquier was closed down during the height of the restraint program. The men were either laid off or moved to other areas, I'm not sure which, but the forest lookout station there is no longer operative. The equipment was moved away. I understand it was moved down into the Nelson area. The reality of the situation was that when they had fires erupting left, right and centre and everywhere they looked, they didn't have the ability to respond the way they could have responded if that lookout had been manned and the equipment available at the time. So as a result many fires that could have been dealt with fairly easily became major problems.

I just want to bring this to the minister's attention, because I know there is ongoing concern that we may face the same type of problem this year. Of course, that all depends upon the weather, but certainly we can no longer compromise the safety of our forests and the safety of those communities in the forested areas in order to accommodate the budgetary restraint measures that have been part and parcel of this government's mode of operating in the past few years. I want to emphasize to the minister the importance of expanding the

[ Page 8309 ]

ability of this government to get initial attack crews onto the job so that these spot fires that could be put out in the future don't grow to be major concerns that pose immediate danger to the forest and to the communities.

MR. GABELMANN: Mr. Chairman, I just wanted to make a few brief comments. I have said most of what I wanted to say about silviculture during the debate on the bill the other day, so I'm not going to repeat all of that, except to make one point that I think needs to be emphasized — I suppose coastal MLAs are more inclined to make this point than interior MLAs — and that is that it's easy to conceptualize the NSR land, and it's easy to understand what not planting vast areas of this province implies, and I don't mean to minimize that problem, but I think there is perhaps better value for dollar spent in putting extra silvicultural money into high-site lands on the southern coast of this province where fibre can be produced much more quickly, particularly if proper basic and intensive forestry practices are implemented.

That's not to say that it's an either/or situation. I don't mean to diminish the importance of dealing with the NSR problem, most of which is in the interior and not on the coast. But there is a very real need to devote more attention and more money to the high-site lands on the coast in general, and on the southern coast in particular, and much of that land is on Vancouver Island. It's more difficult to demonstrate. You can't talk about a 50-mile wide swath stretching from here to Penticton when you talk about the need to do pruning and spacing, thinning and then pruning up to 18-foot lengths, if you can, to reduce the number of knots you're going to have in your wood, to do the commercial thinning that can take place, the fertilizing that should take place. I mentioned all of this the other day, so I won't repeat it, other than to make the point that it's not as dramatic because it's not as visible. People don't understand it, because we spent most of our time in the last few years attempting to educate the public about the need to replant; that, in terms of public opinion and public education, is being won, and is on the verge of being won. There is an understanding now on the part of the public, and on the part of politicians, that didn't exist when I first ran in North Island seven years ago. That change has happened in this space of time.

We won the battle on planting, in terms of the public impression that it has to happen; that's a major battle. It's amazing that it took so long to win that war. But it's essentially won. Although we're not doing all the planting we should, the fact that it needs to be done is now generally accepted. The same level of acceptance does not exist for what foresters describe as "intensive" forestry: the tending of the crop, assuring that quality fibre is produced, and that it's produced quickly. I think, when we talk about reforestation, we need to make sure that it's understood to be more than just reforesting by planting; there's a lot more involved in it. I think the Forests ministry can play a bigger role in educating, in working with the professional foresters and people who are interested in the subject, in doing an educational job on that particular subject. There are consequences, of course: that's increased cost, in terms of commitments to silviculture. But I think most of us in this House would agree that those increased expenditures allocated to silviculture would be wise investments indeed, and we should all be pushing for them.

A lot more could be said about silviculture on the coast, and no doubt on future occasions we'll have further discussions about it. I just wanted to make that one point at this time.

I wanted to talk for a minute or two about the way in which the timber resource on the coast doesn't really support communities in the way that it could. We've grown up with a pattern, for the most part, of logging on the coast, which is: as you cut the stuff down, you send people out to live in camps and you cut the wood, and you haul it to Vancouver for processing. There are minor exceptions to that: here and there you get an anomaly like a pulp mill at Ocean Falls, an anomaly like a pulp mill at Port Alice, but there has been, for the most part, this cut and run, cut-and-haul-to-Vancouver mentality.

It may have served a purpose. It may have been the appropriate kind of structure to establish in the forest industry in days gone by. There are now a number of communities on the coast that exist for various reasons, partly from fishing, from mining, and certainly from forestry, that are really subject to ups and downs, depending on the economic climate of the day. Mining goes down, then the towns go down. Forestry can be the kind of industry.... Despite its own ups and downs, generally it's a more stable and more consistent employer over a longer period of time than is mining. Certainly fishing has just been on a steady downgrade over the years, in terms of employment. So forestry has the ability to help some of these communities exist.

To pick an example, in the northern end of Vancouver Island, the town of Port Hardy, and the three or four towns that surround that area, are dependent primarily on fishing, forestry and mining. Port Hardy itself has its dominant employment provided for by the mine, Utah Mines; mainly copper, but other minerals as well. When they run out of ore in eight years, as they're expected to, there's 800 jobs — most of the jobs in the community — out the window, down the tube. So the community says: "What can we do to replace that? How can we survive as a community?" And they look around.

Well, there's tourism, and there's a variety of small things that can be done, and we all work towards trying to accomplish that. But when you get down to it, forestry is the issue, or is the area, where the real jobs could be provided. Yet there's no serious effort on the part of government that I can determine, that says to itself: "Look, pal, we've got forest resources all around that area on the coast, on some of the islands, and on the northern part of Vancouver Island." Why not look there for specialty paper mills, for example, and locate them in these areas? Why not small-scale pulp or paper operations in those areas — not the kind of large-scale mills that we've been used to, necessarily, but smaller scale? Maybe some of the products that we can produce well; maybe fine paper, as an example, and maybe that can be developed in an area like that, using local wood and helping to stabilize the employment pattern. I'm not saying it can be done overnight; I'm not saying it can be done by waving any magic wands, either. It's a long, slow process. But that long, slow process begins with a commitment to the idea that all of the manufacturing doesn't just take place in Vancouver on the Fraser River.

[4:30]

That's the thing we've got to get into our heads: that we should start to do in a bigger way some of the processing out there where the wood is harvested. It costs a lot of money to

[ Page 8310 ]

haul wood from northern Vancouver Island down to the Fraser River. Increasingly our markets are pan-Pacific, so we spend quite a few dollars per cubic metre hauling the wood to Vancouver for processing, which means an extra day's sail on the way back to the Orient. The north of Vancouver Island is a day's sail closer to those markets, so there could be some considerable savings in raw economic terms by thinking about how we develop our forest resources from that point of view. I think that serious thought should be given to establishing a commitment, where it's possible, economical and practical, to try to do more of the processing where the wood is harvested.

Now some companies do that better than others. The former Tahsis Co., now CIP, has a sawmill in Tahsis in the middle of their TFL; they have a pulp mill in Gold River in the middle of their TFL. That's appropriate, I think. That's the kind of model that should exist. Canfor, Western Forest Products, Mac-Blo and Crown have TFLs on northern Vancouver Island. Crown has at least a pulp mill and a small sawmill in Campbell River, so it's not too far removed from the major source of their supply. Western has the old pulp sulphite mill at Port Alice, but no sawmilling capacity in that area. Canfor has neither sawmilling nor pulping capacity in that area, so the jobs, except for the raw-resource-harvesting jobs, are exported. I think we need to start thinking about how we can keep some of those jobs in the local areas, try to make these communities more stable. The communities exist, but the stability of those communities is really an important consideration, I think.

It should be a part of forestry planning when we are talking about what our objectives are. What are the conditions attached to being given a TFL? One of them has always been some commitment to jobs and to community, but it's never really been done seriously. It's always more of an afterthought, and I think that more attention should be paid to that issue.

Also talking about communities, we can do a little bit more than we do now in terms of tree-farm licences being provided for community groups or municipalities. The Mission TFL is an example. It's privately owned in Cowichan, but it's another example of the kind of local control over managing the forest in an area, and it works well. Anybody who sees those forests, in either of those two examples, knows it works well.

Yet when you go around on northern Vancouver Island and on the mainland in that area, you find thousands of hectares of land supposedly managed by the Forest Service that are not managed anywhere near to the level that the land in Cowichan or the land in Mission is managed. A perfect kind of small example I can cite is Malcolm Island, where the community of Sointula exists, just off Port McNeill. It's the right size for a community tree-farm licence where local people could manage the island on which they live, with the principles of proper forest management involved. Now no one has made an application; there isn't a climate for that kind of application, because we haven't talked about that kind of local management of the forest resource.

I'm not talking about all of it by any means; I'm talking about little bits and pieces here and there. I think it's been demonstrated that we can do good work and enhance forestry and enhance the value attached to the whole concept of proper forest management by having people in their own communities involved in the management. I think the whole concept of community tree-farm licences should be looked at with more vigour than it has been to date.

The final point I wanted to make is the question of woodlot licences. The ministry has had a woodlot licence policy for some time now, but it is the most difficult thing to go from the conception to the licence. I wrote the minister a letter not long ago about a particular application in my riding that gets bogged down in the processes and bogged down in the bureaucracy, I think needlessly. Give up a little bit of the Crown land that's adjacent to an individual's private land so that there can be an appropriate unit for management sizes of the woodlot and allow that kind of thing to happen.

[Mr. Ree in the chair.]

There is lots of opposition to woodlot licences. It's not spoken loudly, but we all know that there is opposition to it, and I think for some good reasons. That's not the way you manage all of the forest lands in this province, but it is an element of an overall strategy. I think that the minister could do us all a favour by finding a way to break the logjam in this whole program of woodlot licences.

HON. MR. HEINRICH: I always enjoy listening to the member for North Island's points. On the last item you raised with respect to woodlot licences, I am advised that perhaps by the end of the year something like I percent of the available timber supply will be available. But you know something? They're going to have to make me a believer too, because, you see, we encounter the same problems in the interior. You should know, Mr. Deputy, that all of us in here have some difficulties from time to time with the Ministry of Forests breaking them loose. I say that in jest, and I know that you understand that. But we do. We will see what happens. There is one that I am interested in seeing move in the northern part of the province, where somebody has set up a business and there is a huge demand for the product. So we've got to do something about it.

You will receive absolutely no argument from me on the matter of industrial and commercial development in the communities where the resources are located. I guess this is exactly what has happened for the most part in the interior and in the north — that's how the communities were really developed. It just so happens that we seem to have a different set of issues before us on the coast. I think one of the reasons there is a different set of issues is travel by water. That seems to solve somebody's problem, but it inevitably causes some grief for others.

The biggest concern which I have here is that once communities are established and built up, and depend upon a particular operation which has been in business for countless years and which has had the advantage of a particular community and all the interrelationships which developed there over the years.... If at all possible, I don't want to see them placed in any type of peril as a result of changing conditions. Most of those conditions arise for some economic reasons.

I think the member from North Island makes a valid point on that issue. We all agree, and I recognize.... I think you are fortunate on the coast. You have an area where good and medium sites for reforestation seem plentiful and where fibre grows with much more ease, I can assure you, than it does in the interior and northern parts of British Columbia. I think that is evident when we look at the amount of the backlog.

[ Page 8311 ]

Although for a number of years it has been difficult to get everybody behind the concept of reforestation, they are there now. I think all members in the House recognize that it has been much easier to conduct reforestation on the coast and in the lower half, particularly on Vancouver Island, than it has in other parts of British Columbia.

MRS. WALLACE: Mr. Chairman, I have a series of unrelated items. I think they better just be dealt with as questions and answers because none of them are really related to each other.

Starting out in a lighter vein, I have an article in my hand here from Houston Today. It's dated almost exactly a year ago. It quotes the member for Omineca (Hon. Mr. Kempf) — the one who's now a minister — speaking to the chamber of commerce there: "Kempf wasn't entirely supportive of the provincial government policies. He criticized the government's reforestation program for wasting half of B.C.'s forest resource." Then the local mayor, Bill Mikaelsson, raised the question of the redistribution of timber rights to new mills. Apparently the member for Omineca had discussed the possible opening of a Granisle mill, but the mayor was concerned that this was going to hurt the existing mills, such as Northwood and Houston Forest Products. "Kempf agreed with Mikaelsson, saying the government's forestry program was for the birds, and he is working towards bringing the allowable cut up to better the return from the timber." I wonder, now that that member is your cabinet colleague, whether or not he has made any approaches to you on behalf of his constituents in Omineca relative to the forest policy being for the birds and relative to the wastage that's going on there.

HON. MR. HEINRICH: Mr. Chairman, I think the member for Omineca, now my colleague in cabinet, is delighted with the increase in our budget, and he's particularly happy with the 47 percent increase for silviculture.

MRS. WALLACE: Did he tell you to say that?

HON. MR. HEINRICH: No, he didn't tell me to say that, but I'm putting words in his mouth.

I didn't want to extend this debate forever. However, I believe that the member for Omineca, my colleague, is delighted with the federal-provincial program. It's a start. It will take ten years to look after that backlog. We know it. But he's delighted with the increase in the budget, and he was delighted with respect to the increase in the silviculture funding. I'll tell you, like all MLAs we're here primarily to represent our constituents, and if there are some concerns with policies, I think everybody should have the freedom to make a statement. I certainly know it doesn't seem to inhibit the members opposite from making statements. Why should we on this side of the House be...?

MR. BLENCOE: You haven't done anything for ten years.

HON. MR. HEINRICH: The member for Victoria, part of that Terrible Two from the Mafia....

AN HON. MEMBER: Withdraw.

HON. MR. HEINRICH: I'll withdraw. That terrible duo from Victoria. Here he is with all the industry that he's got in his community, a new convention centre, tourists coming in increasing numbers.... The people in the community can't tell me enough about how good the government has been to them, and they're absolutely ecstatic with Expo. Talk to the merchants in your constituency; they're delighted with it all. Now that's got nothing to do with the Ministry of Forests, Mr. Chairman, but....

Interjections.

HON. MR. HEINRICH: It's time to have a little fun.

Anyway, Mr. Chairman, I hope that I've answered the member and rid her of any concerns which she may have had with that particular article.

MRS. WALLACE: I understand the minister's answer. The perspective changes, depending on whether you're inside cabinet or outside cabinet.

Next question: another colleague of his, the Minister of Environment (Hon. Mr. Pelton), made an announcement yesterday saying that he was adopting the Wilderness Advisory Committee report. Does the minister intend to issue logging permits for Lyell Island immediately, or does he intend to wait until the native land claims are settled?

HON. MR. HEINRICH: Mr. Chairman, this is a serious question, and I will mention to you that I am now looking at the possibility of issuing cutting permits on Lyell Island. They have not been done. I want you to know that there is considerable pressure from the IWA to do so. I think that's known to everybody here. There is also a request from those where the timber is going to be delivered. The position which we have taken all along is that we would wait to see the results set forth in the wilderness report. It has come down, and government has adopted that report in principle. There are certain areas which require some refinement, I understand, but as far as the forestry issue is concerned, it's something that we must look at very, very seriously. As of yet no decision has been made.

[4:45]

MRS. WALLACE: Okay, next question. I understand that the ministry is.... Well, we all know — let's begin there — that there has been a decided increase in the export of raw logs over the last few years. I understand that the ministry is now looking at an expansion of that export of raw logs, particularly from the central coast area — that they're looking at a major expansion of export of raw logs. Is that correct? If so, could the minister comment on the reasons?

HON. MR. HEINRICH: There certainly is some consideration in that area. There have been a number of overtures made by the logging industry, their employees. We've seen that in spades. The issue being brought to me by all of those involved is to look into particular areas. As you know, under the standing green concept the timber export advisory committee would make a decision. They would look At the species, took at how difficult the logging terrain was and what the costs were, and there would be an allocation. If, for example, a particular cutting permit would allow 50,000 cubic metres to be logged, the timber export advisory committee may say: "We will permit, for export purposes, something in the order of 5,000, 10,000, 15,000 of that portion."

[ Page 8312 ]

In addition, there may be certain limits with respect to species as far as export is concerned.

The concern advanced to me by all of those involved on the coast of British Columbia is that certain areas of the province are very expensive to log. There are also areas with absolutely no facilities. As a matter of fact, do you know how many sawmills are operating on the mid-coast, north coast and Queen Charlotte Islands? There are two mills, both on the Charlottes. One has a capacity of 40,000 cubic metres, with one shift employing 15 people; the other has a capacity of 30,000 cubic metres annually and employs 15 people. One mill is presently under construction in Prince Rupert. There are no facilities, so it's something we have to look at. Whereas you may have a magnificent forest on the coast, there are also a few problems with it. One happens to be that some of the timber is overmature and some is decadent. It's being lost and must be harvested. The whole purpose of those standing greens was to permit the export of certain species and confine that species.

With respect to log export, that is not where the problem is — if there is a problem. The problem is with the trading within the Vancouver log market. It is fraught with problems. I don't think we need recite them here, but there are some problems. All the market loggers on Vancouver Island and up the coast have made it pretty clear to me, and I've told them there is no instant fix to resolve this problem. It's going to take some time and they've got to sort of bear with us until we seek a resolution. They have all been consistent with one request: "If you as government can resolve this problem, we want it resolved permanently, and we're prepared to bide our time until you can."

MRS. WALLACE: Certainly I agree that the lack of processing facilities is the problem there. It's much in line with what my colleague from North Island was saying and to which the minister agreed: that we need processing facilities in those areas. Tree-farm licences here on the Island have as a condition of their operation and their continuing to cut that they do some processing. I don't know about the tenures in those areas, but the minister should have a good look at that and see if we can't come up with some processing because that makes jobs. If you get a few mills in there, it's going to make a lot more than 15 jobs.

Just while we're on this subject of land tenure, I did want to make a few remarks. We've seen legislation in this House which allows pretty free access to changing the boundaries of tree-farm licences; areas can be taken out and added. I'm wondering if that is progressing. We've also seen a lot of applications to take Crown land and put it into tree-farm licences. If all the applications that were before the former minister were approved, it would have put something like 50 percent of forest land under the control of tree-farm licences. I'm wondering what the status of that is, because I have a lot of concern about getting this....

Tree-farm licences were originally intended as a management tool when they were first issued back in the early 1900s. They've now become nothing more nor less than a licence to cut; they're no longer used as a management tool. I know we've had some changes in legislation. There are some teeth in that legislation. They weren't used by the former minister. Is this minister prepared to use those teeth to ensure that we do have some real management on our tree-farm licences? I'd also like to know whether or not he is prepared to tell us whether he's approving all these applications that are there for tree-farm licences or if he's going to retain more of that land under the control of the Crown.

HON. MR. HEINRICH: Mr. Chairman, on that issue, I'm not into it all that heavily yet, but I can tell you this: the exposure that I've had to date involves three operators where we have offered to them to move from a forest licence position to a tree-farm licence position where we attach greater onus for the management of the forest base. As a matter of fact, we've been negotiating with Canfor, West Fraser and a small operator called Dunkley Lumber, which is located at Hixon, between Prince George and Quesnel. It comes down to negotiations between the ministry and the operators as to the extent of those obligations. In exchange for long-term security, they have to give up something, and they also have to increase their management activities for the base. It comes down to some negotiations, as you would expect. Those are the only three that I am aware of that I have had some dealings with.

If this is what you're referring to by utilization of the legislation as a management tool, you're correct. I think that it's a good concept. There was quite a bit of resistance to it, as I recall, a couple of years ago, because a number of the small independents and the loggers felt that this would be cutting into their opportunities. But I think that we have to look at the long term, and look at the land base to make sure that it's properly managed. This is one of the vehicles which has been set up to allow us to do that. As I mentioned to you, there are three that we are handling now, and there may be others, for all I know. I don't know. I just haven't been around long enough yet.

MRS. WALLACE: I wonder whether the minister would tell us whether or not there is provision for further processing in all of those agreements and also whether public hearings were held.

HON. MR. HEINRICH: I can confirm that there were public hearings held.

MRS. WALLACE: In all three?

HON. MR. HEINRICH: Yes. Personally I can't confirm in all three, but I can confirm in two of them. Two of them happened to be in the general vicinity of the riding. And I am advised by my deputy that there were hearings in all three, and they all have management plans filed.

MRS. WALLACE: Processing?

HON. MR. HEINRICH: They're ready to go, okay? They all have management processing plans filed.

MRS. WALLACE: There are two things more that I want to talk about. One is this low-bid system. I raised it a bit when we were discussing the Forest Stand Management Act. That low-bid system has to go. It's just not producing results. I wonder if the minister's had a look at that and come to any decisions. Somehow you have to have a list of preferred bidders, because what you're getting is some fly-by-nighters in there who are.... It's not fair to you as the minister; it's not fair to the taxpayers who are putting up the money to plant those seedlings and do those thinning and silviculture jobs;

[ Page 8313 ]

and it's not fair to the workers, because they're getting a very substandard wage.

It's a sign of the depressed times we're in where there are so many people looking for work and so many unemployed people who are trying to set up little companies and somehow make a fast buck. And that's fine. I've nothing against that kind of initiative as long as it is an effective job. Somehow, if you're going to take those low bids, then you have to do some very close supervision, and the problem is that you don't have any people to supervise. I think you've added two people and yet all these extra programs. If you don't have people to supervise those, you're not going to get a job of work done.

We're going to lose all our bona fide and qualified contractors. I know at least three firms that have done work in B.C. over the past many years who are now going to Ontario every summer because they can get a job there at a price that allows them to pay the kind of wages that they pay to their workers, and provide the kind of service and do the kind of job that ensures that those trees grow — these are planters I'm talking about — rather than having half the trees not survive.

I would urge the minister to have a good took at that whole low bid thing, and I wonder if he has any comment on that.

[5:00]

HON. MR. HEINRICH: Mr. Chairman, it was a week ago today — Wednesday, May 14, as I recall — that Bill 6 was in and the debate was going on. I remember all of the points which you raised with respect to the low bid, and up in your area it seems to be that tree-planters are a special breed, who seem to be raised in Cowichan and Comox.

Anyway, a lot of things have occurred since Wednesday, May 14, and I've been quite busy. But I will tell you, I do remember exactly what you advanced, and the same arguments were raised by the member for North Island (Mr. Gabelmann) too: it was the issue on low bid. I can only tell you this, Mr. Chairman: since that time, I have had an opportunity to talk to somebody who has spent considerable time tree-planting in the area of Horsefly, Likely, Houston and Terrace — one particular individual whom I'm getting a lot of information from with respect to exactly what's happening on the sites. That's all I've been able to do since you raised that issue with me last week. But you have raised it again; I will undertake to have a look at it for you.

[Mr. Strachan in the chair.]

MRS. WALLACE: This is my last issue. It's a favourite issue of mine.

AN HON. MEMBER: Smoking?

MRS. WALLACE: No. It's probably a new one to this House: selective logging. I know it's not the answer for a lot of our forest land, but it is the answer, in my opinion, for some of the more sensitive sites.

The reason that I am so keen is this. I have a friend who has a 50-acre plot of forest land, and he has been selectively logging that for 40 years. He has just as many cunits available each year. The place looks like a park. Out of that 50 acres he makes 50 percent of his living, and he lives well. From that, it would follow that anyone with a 100-acre plot could make a living selectively logging. I have been told by the Mac and Blos of this world that you can make more if you clear-cut and replant.

But my argument is that there are areas where that selective logging would be a very valuable tool. One of the areas that comes to mind is Saltspring Island, where Mac-Blo held a portion of land. Mind you, they held it in fee simple, and if it were in a forest reserve of some kind, it could only be used for forestry. But as it is, they can sell that for development, and it has caused quite a problem on Saltspring Island, because suddenly this area of treed land that had been there for years and hadn't been logged, because MacMillan Bloedel found it not economic to go into that area to log it, because of its remoteness and the smallness.... They decided it was better just to get rid of it.

Now an area like that would be ideal for the small operators to go in and, with 100 acres or 200 acres, log that selectively, where you can take out a few trees each year. You put your roads in in the beginning. You never have to build those roads again, because they are used each year, and they don't have to be rebuilt because 80 years later or 50 years later or whenever you go back in they have all deteriorated. You're using them each year. It's kept open; it's well fertilized with the branches and so on.

It is an excellent way to log in a sensitive area like Saltspring Island, where you've got an area that is on the Gulf Islands — a particularly fine remote area; a very precious kind of gem, those Gulf Islands. That sort of approach in those kind of areas, around settled areas, where you want to avoid that barren look along our highways.... If we want to keep this island and this province a beautiful place, rather than have clear-cut logging in those areas.... I see the Minister of Tourism (Hon. Mr. Richmond) nodding; it would be the kind of thing that would enhance the beauty of our highways.

It seems to me that it has a tremendous potential to be let out to the small operator. I know there is a lot of interest, because that same friend of mine was televised a few months ago, and he has had all kinds of people contacting him since then wanting to get in, wanting to learn about this operation and carry this out. I think you would find lots of takers if you could set up those sensitive areas for that kind of use. I commend that program to the minister for his review and consideration in those sensitive areas.

HON. MR. HEINRICH: Mr. Chairman, I'm just going to be asked if I could be excused for a moment while the member out here would be right back. Could I comment with respect? You know, it's a wonderful idea. Selective logging does occur, only with equipment, in the Kamloops region of Balco. I remember talking to the head forester for the Balco operation about it. We've also seen...

Interjection.

HON. MR. HEINRICH: Here we go.

...utilization of the.... I don't know if you ever saw that program. It was quite interesting with the university forest out at Maple Ridge, and that was well done. I'm told that up in Campbell River somebody selectively logs with horses. I think that practice does occur in some parts, and I'm advised that in some of the fir stands in the interior it occurs.

Interjection.

[ Page 8314 ]

HON. MR. HEINRICH: I don't know. I'll take note of your point, Madam Member.

Go ahead, ask your questions.

MR. HOWARD: The minister wants to be excused for some reason or another, and I think we should probably have a slight recess for that purpose, Mr. Chairman.

MR. CHAIRMAN: No, there are committee members here. I am sure we can keep the debate going.

Interjection.

MR. CHAIRMAN: Order, please. Or we can pass the vote, one or the other.

MR. HOWARD: I'm just suggesting the way we approach it, Mr. Chairman, so if I sit quietly nothing will occur.

MR. WILLIAMS: I'm sure that we can think of some nice Smokey the Bear items which the minister likes to associate with in his new role. I just might reflect on earlier comments about Doman and the question of non-performance by the Doman company. I'm sure that the minister is reasonably well prepared, but it isn't really the main point that I wanted to make. I'll wait until the minister is here before I make that point.

It is abundantly clear now that in the case of Doman there was significant non-performance — and that continues to this day. He promised us a pulp mill on Vancouver Island. Tenures were delivered on the basis of that performance. In fact, what we've had is a firm that has expanded into other operations, been a partner in Western Forest Products. And of course, many in this Legislature are aware of the Western Forest Products partnership. What has happened through that exercise is that the Doman company has access to new timber rights, under their troika arrangement within the Western group. As a result of that, their need for those licences has declined considerably. So what we have is a situation in which Doman's company has far more wood than it needs for its existing plants. That's the situation that we have today, Mr. Chairman. The tenures were granted on the basis of new plant, new manufacturing and new processing in British Columbia. And now, over a decade later, we still do not have the plants.

What has happened is a gutting of the Kinisquit valley for nought, as the member for Mackenzie (Mr. Lockstead) knows only too well, suffering through a court case at the hands of Mr. Doman — which I think is a travesty in terms of justice and legislation and the freedom of legislators in British Columbia. He's being put through this, when documented evidence has been presented to this Legislature indicating the levels of abuse on the part of Mr. Doman and his company in that particular valley. It is absolutely incredible that it continues. It is nothing short of amazing that he continues to hold those tenures.

One of those tenures was rolled over into permanent tenure. Your strategic planning people warned the previous minister that that was never the intent, in terms of the Nootka privileges, with respect to the licence there. Nevertheless, the previous minister rolled over himself, and then rolled over the licence for Mr. Doman.

We still do not have that pulp mill. What we have is Mr. Doman participating in those other rust-bucket operations that he inherited out of the previous company that became Western. As a result, he now has other people operating on the central coast — Silver Grizzly and others — on a contract basis, with probably very interesting arrangements in terms of the sharing of that lumber, those logs and trees in that region. In fact, he has a problem of surplus. Mr. Doman used to be the most efficient producer on this coast. Once he got hold of tenure, once he got licence privileges, the game changed: he became a fibre hoarder, like the rest of the industry, and he's hoarding fibre. He's not performing on his AAC. And that's not unique to Mr. Doman, but the levels of non-performance across the board, I suggest, are.

But better than that, he's been helped by the previous deputy minister. We all know who he is, where he came from and where he went back to. I talk, of course, of Mr. Apsey, who left the lobbyist group — the Council of Forest Industries— the private sector lobbyists, came to Victoria, became deputy minister, for what? Eight years, quite some time. He changed the legislation, worked on all the redrafts to his satisfaction, and then went back to the lobbyist game with the Council of Forest Industries.

That is not allowed in Ottawa, Mr. Minister. That is not allowed in Ottawa. That is not allowed in the United States of America, Mr. Minister — the moving of a lobby from a lobbyist position to a senior position in government and back to a lobbyist again. That happened bang, bang, bang; click, click, click with respect to Mr. Apsey.

But what about the question of non-performance on a broader scale in the Vancouver forest region? What about it? Are you aware, Mr. Minister, of all of the deals that that man and this administration made in the name of "sympathetic administration?" Have you reviewed all those deals? I urge you to reconsider them, because it's serious stuff and it relates to the tenure and performance and the hoarding of fibre and cutting rights when others could have used the wood and could have created jobs with that wood.

[5:15]

That has not happened. Small operators on this coast and in other parts of the province starve for the lack of wood, but the timber-hoarders sit on top of it and don't cut and don't produce.

The former deputy minister sent out a memo covering the question of AAC in the Vancouver forest district in terms of performance. If memory serves me right — I don't have the paper in front of me, but the basics will hold — he sent out a memo that he would pretend there had been a 50 percent cut in performance with respect to the AAC for the next two years regardless of how much timber was cut; i.e. Mr. Apsey said, "I will cook the books for every non-performer in the Vancouver forest district," which is the major forest district in British Columbia. I don't know if he said he would cook the books for everybody, but he said he would cook the books for all the majors here on the lower coast, the most valuable forest lands of the province.

The whole idea of these tenures — that's the gobbledegook we were getting a couple of minutes ago about moving into TFLs from other licences — was the business of performance, employment and maintaining jobs consistently over a period of time. Under the former deputy minister and the former minister, we had this kind of game going on where the directions went out: Cook the books, boys.

MR. CHAIRMAN: Hon. member, that reference to a minister, a member of the House, must be withdrawn.

[ Page 8315 ]

MR. WILLIAMS: I said that the deputy said the equivalent of "Cook the books," and I stand on that, Mr. Chairman.

MR. CHAIRMAN: The deputy is fine, hon. member, but the Chair heard a reference to a minister, a member of the House.

MR. WILLIAMS: Okay, I withdraw with respect to the minister. The memo was from the deputy. Make that clear. That's the main point I was trying to make.

The memo gets even better, Mr. Chairman, because there's a five-year performance requirement, as I'm sure the minister has got a handle on now. You need to get close to a high-performance level over the five years. This is to deal with the business cycle; fair enough. But what does the memo also say? I wonder if this minister is aware. It says that if at the end of the five years the 50 percent isn't enough to keep the books properly in terms of performance, you can change the phony 50 percent number of the cut to 90 percent. Isn't that incredible? The lobbyist from the Council of Forest Industries comes over to the government, becomes the deputy minister and then says: "Here's the way we'll cook the books for the big private companies." That's what has happened. Now the deputy nods his head, the minister asks, and the deputy says: "Indeed, he's right." Indeed, I'm right. The only question is, was it all of British Columbia or was it just the Vancouver forest district? Was it all of British Columbia, Mr. Minister? It was all of British Columbia.

There you are. What an incredible story in terms of non-performance! The whole idea of this privileged tenure system, allocating our wood virtually in perpetuity to these big companies, is to maintain employment. There are then rules and guidelines to measure that level of performance. But this man comes in, has this sacred public trust as a senior civil servant, and he says, "Cook the books," and cook the books is indeed what happened. That is absolutely extraordinary. Then he says.... For even after he's left the job you can cook them later and change it to 90 percent performance. After all, it's only a book entry.

That book entry belies the unemployment and misery on this coast; it belies the weakness of our industry; it betrays this province in terms of the future that the forest can produce in employment and new industries. He's saying not just turn a blind eye, which he did again and again in the name of "sympathetic administration;" he's saying we're not even going to tell the truth when it comes to putting the numbers in the book about what they've cut.

It is extraordinary that this should have come to pass. I urge the minister to do the honest job. I urge the minister to start cleaning the stable left behind by the previous minister. I urge the minister to require, as by law and by the requirements on the spirit of the legislation, that honest numbers go into the file, and that honest numbers be the basis for determining their performance and whether they hold those tenures forever and a day after that five-year period. Because Mr. Doman will not hold his forest licences on the basis of the kind of performance we've had to date from him. For too long Mr. Doman has been close to the corridors of power and the people in politics in this administration. Those corridors must be closed to him and the other non-performers so that the genuine industrialists who want to do a job — the genuine entrepreneurs, the genuine loggers— can get an opportunity.

You have closed the wealth of our forests to all British Columbians. They are in the hands of a parlous few who do not perform. You owe it to yourself as a member of this Legislature to see that that mess is cleaned up and that the honest numbers go into the book.

HON. MR. HEINRICH: The statements made by the member for Vancouver East are rather strong. I am not familiar with the concern which he has raised. However, I'd like to just leave one point with you, Mr. Chairman.

Within the last week I came across an article where there was criticism levied by the U.S. lumber interests as far as the operations in Canada are concerned. One of the concerns they had was that under our system of an annual allowable cut, in my understanding, there is the obligation over a five-year period to achieve that cut plus or minus 10 percent, with a deviation permitted anywhere from 50 to 150 percent in any one year. It was forcing the operators, when market conditions were sour to maintain that cut, the result being that it would place on the market a lot of lumber when the market was not healthy, and as a result stumpage payable to the province would decline, and it would also put lumber on the market that was really irritating and frankly adding a fever to the allegations made by the United States. I will mention to you that I expect that very issue to be raised during the hearings on the countervail.

I'm not making any comment one way or another on what has been raised by the member, but I do think it's important that we recognize the impact of sustaining that annual allowable cut and how it affects the market in the U.S.

MR. HOWARD: Well, I think it's obvious the true case was made, and the minister is found wanting. He is unable to deal with those things — unwilling to deal with them, I think. This shows the Machiavellian attitude of this Premier and this government, and that is to shunt new faces into new positions so that they can always say: "I am not familiar with that. I'll have to read about that. I'll have to study that. I'll have to look into that." But it lets them continue to cover up the inadequacies of this ministry, this minister, his predecessor and the government itself

Let me give you just another example of the cohesiveness between government and big business in the forest industry in this province. During the 1983 election campaign Westar, which was then B.C. Timber, decided to sell one of the sawmills in Terrace. They had worked out the arrangement for it, and the announcement was made during the election campaign. The people sitting in the Terrace Hotel at the head table, dealing with the announcement, were John Montgomery, the president of B.C. Timber, the Minister of Forests and the Minister of Human Resources. From the table and from the way they were presenting the case for the sale of that particular mill, it was hard to tell whether John Montgomery was in the cabinet, Grace McCarthy was the vice-president of B.C. Timber or Tom Waterland was the chief executive officer.

MR. CHAIRMAN: Order, please. The member for Skeena knows that members of the Legislative Assembly are not referred to by name.

MR. HOWARD: Well, they were there in the Terrace Hotel by name.

[ Page 8316 ]

MR. CHAIRMAN: Yes, and we'll avoid names. But if the member for Skeena is interested in hearing a name, the Chair will be happy to oblige. Please continue.

MR. HOWARD: I beg your pardon?

MR. CHAIRMAN: Members are not referred to by name. Please proceed.

MR. HOWARD: I thought you may have said something else and we were about to deal with that. But it's not necessary, I see.

In any event, there was the alliance between this government and a company, its own creation almost, a subsidiary of BCRIC, sitting there together, cosy, hand-in-glove, making out as if they were all one and the same.

Mr. Chairman, I want to deal with a couple of items locally. One deals with the desire and the intention and the hope of a particular band of native people, the Kispiox people, and their desire for quite some time now to build an economic foundation for themselves, to build an economic base that would employ members of that band.

Interjections.

MR. CHAIRMAN: The Minister of Lands, Parks and Housing (Hon. Mr. Kempf) will come to order, as well as the second member for Victoria (Mr. Blencoe), please. The member for Skeena has taken his place in debate. No interruptions.

MR. HOWARD: It's the aftermath of the Coquihalla hit that's still in effect.

The Kispiox band desired to get into the business of seedling nurseries. The first tenders that were let resulted in some bids being made to the government by a company a couple of the actors of which happened to be public servants working in the Ministry of Forests at the time; one of them still is, I believe. So there was some concern expressed then as to whether a gentleman by the name of Kooistra and a gentleman by the name of Wong, who were employees of the Ministry of Forests, should be able to have any input into a bidding process with respect to a contract with the Ministry of Forests. As a result of that the Kispiox band, or the Anspayawx tree nursery group of the Kispiox band, were not the successful bidder.

[5:30]

I submit there were a lot of improprieties involved in that. Then there was a subsequent contract called for 2.3 million lodgepole pine just recently, last fall. Here the Kispiox band was the low bidder. But they didn't get the contract. I thought this was a government that predicated most of its activities upon low bidders getting the contract. But instead the second-lowest bidder got the contract because there was the establishment of a set of factors to adjust the bids to take into account certain criteria.

The factors are, and were, that price — that is, the bid price — would get a 55 percent weighting. Experience, competence would get a 25 percent weighting. Qualifications would get a 10 percent and location would get a 10 percent weighting. The upshot of all of this was that the factors experience, competence and qualifications — a combination of 35 percent — resulted in the low bidder not getting the contract.

If you're going to establish, I maintain, that type of criteria, and if you are going to say you have to have the experience before you get the job, and you can't get the experience unless you get the job, you are blocking out any new entrants into tree seedling operations. You are specifically, in this instance, discriminating against a native Indian band. That's the way they feel about it. They feel highly incensed that they put a lot of effort, a lot of time, a lot of work into developing their bids, their costs, the location and working on it, and spent a lot of money trying to do that on two occasions. On each occasion that band lost out, they feel, because of dirty pool. They feel that, and the facts on the surface seem to indicate that that might well be the situation. I'd suggest you have a look at that criteria-factoring that went on. If you're going to hang onto the question that you've always got to have experience before you can get a contract, you don't apply that to tree-planting contracts or any other kind of contracts, but you do in this specific instance. If you're going to hang onto that, then you're going to continue to deny new entrance into it.

I want to deal also with the question of Westar Timber, who have been negotiating with an agency of the provincial government for money insofar as their sawmill operations are concerned, in any event; and are also, as we know from other discussions in the House, in the process of attempting to sell some of their operations, if not all of them, in the northwest part of the province. An agency of the government, B.C. Development Corporation, is at the present time taking an active role in negotiations between Westar Timber and a major international concern, presumably — although I don't know this to be fact — with respect to the sale of Westar to that international concern. B.C. Development Corporation is into that.

What I'd like to know from the minister — because this is forestry we're talking about — is what's going on. What are the deals being offered to accommodate the sale to this international concern? Is this international concern going to get a knock-down fire sale price of assets which at one time belonged to the people of British Columbia and were given away by this government, given away for nothing to its baby called BCRIC, a company that has been totally mismanaged ever since its inception because of the political interference in it? Are we again to see the northwest suffer because of these kinds of goings-on? I think the minister is duty-bound to level with the people in the northwest as to just what's happening with respect to Westar and B.C. Development Corporation's role in this. How much additional public money — taxpayers' money — is going to be put up to expedite the sale of an asset from one corporation to another?

HON. MR. HEINRICH: Westar is a company that operates in the private sector. Westar is a publicly traded company, to the best of my knowledge. I understand Westar has from time to time entertained the sale of some of its assets. Westar has, to my knowledge, received overtures on assets which it owns in the northwest portion of British Columbia.

I cannot tell the House whether or not any deal for the disposition of part or all of its assets is in the wind or has come to any successful conclusion. I can tell the House, however, that there has been no overture made to me with respect to any special dispensation with respect to the sale and acquisition of any asset of Westar. Overtures have been made, and I do not deny those; but no one has asked me directly for any special consideration. I can say that unequivocally. I hope

[ Page 8317 ]

that would case the member's concern as far as any relationship or business dealings that it may have with the B.C. Development Corporation. They may very well have. But I know that many people and many operations within the province have dealt with BCDC and have made overtures to that Crown corporation for financial assistance, or assistance in funding the acquisition of an asset they may be interested in.

I think the important item in here as far as the Ministry of Forests is concerned, or as far as I'm concerned, is that there has not been a request for.... I gather what you are looking for is special consideration other than what would be requested by anyone for permission to transfer any particular Crown asset.

Interjection.

HON. MR. HEINRICH: Any special consideration. I have not received anything. There may be dealings between Westar and a potential bidder for its assets in the northwest or in the Kootenays. I can't be sure or give you a definitive answer on that, but I know that some of its assets have been on the block for some time.

MR. HOWARD: Many of the assets that Westar has comprise licences issued by the ministry. One of them is a tree-farm licence; that's an asset. It also has, in the Kalum forest district, a forest licence, which is another asset. It also has, in the Kispiox forest district, another forest licence. Here are three assets — one TFL, two forest licences — that Westar has in the northwest part of the province which are public property. They belong to the people of British Columbia. Westar calls them an asset, but it's the people of British Columbia, through the ministry, that gave Westar a licence that said: "Okay, you have the authority to cut certain volumes of timber." What about those?

HON. MR. HEINRICH: Mr. Chairman, I repeat, there has not been any overture made to me directly with respect to the acquisition of an asset, if on the books of Westar it's referred to as an asset. In fact, they do have a TFL; I'm very much aware of that. It's TFL 1, which we talked about earlier. I know that they have a couple of forest licences in the Terrace area. Aren't those forest licences attached to the mill which the member made a comment about — the Pohle mill? I believe that they're in there.

I have had discussions with West Fraser in that area, because West Fraser, I believe, has an agreement to send chips out to the Skeena mill in exchange for an equivalent volume of logs for the purposes of producing lumber in their Terrace operation.

But going back to those.... I have not received anything at all. I understand that there's something in the wind, but I can't really say any more than that, because there has been no correspondence to me from Westar requesting a transfer of the TFL, or either forest licence,

MR. HOWARD: The minister is basically saying that a deal is about to be struck, I can see that. He cautiously mentions something in the offing. He knows this and he hears something else. He knows what's going on. He's just not saying what he knows about what's going on. But he is indicating to the committee that it's possible for one private corporation, identified by BCDC as a major international concern and probably cutting a deal with Westar, to buy something in the northwestern part of the province that Westar has on its books, and the minister is an innocent bystander, the custodian of public property and not involved in it at all. What happens? Do these guys just make a deal to sell something — their assets other than licences — and then come along, and the minister puts his rubber stamp on it and says: "That's fine. That's the private enterprise way of going about it"? You're putting public property on the auction block and have no say in protecting the public interest in it.

I'll tell you something that your predecessor did in Terrace. There was a cedar pole company, owned in the United States, and they had a quota. The company sold that quota to Whonnock Industries Ltd. here. The former minister approved the sale of that quota for $900,000, and the money went out of British Columbia to the parent company in Minneapolis. The subsidiary company in British Columbia shut the operation down the very next day, driving 40 people out of work. There was a deal made, approved by the former minister, the result of which was $900,000 changed hands for Whonnock Industries to get hold of quota. The recipient of the money took it out of the country, shut the operation down and put 40 people out of work. Is that the kind of deal going on? Is that what we're facing with Westar? Is it one of those kinds of operations?

[5:45]

That was what was in the works with your predecessor ~government, that of the late W.A.C. Bennett. That was what was going to happen to Terrace. They were going to sell the assets to Weyerhaeuser in the United States and shut down their whole operation here — just sell the TFL. That was in the works at that time. Are we facing more of that? I think the minister owes us more than just an explanation that he knows there's something in the wind, because if he remains silent about it, he is approving some dealings that are very likely to work to the detriment of this province.

HON. MR. HEINRICH: Mr. Chairman, I think the member can seek some comfort in the fact that any operation that has a TFL and a couple of forest licences is not going to dispose of those forest licences or that TFL without some conditions attached to them, particularly with respect to the employment of people in the area where that TFL and those forest licences are located.

My understanding is that it applies to anybody in the province that has that type of asset — and it is an asset — that there are certain obligations upon that holder. You can be assured that when I receive something — if I do, because I've been told that something is coming in here and it has been going on for some time, the number of overtures that were made to Westar — then there are going to be certai n terms and conditions. But I have not yet received a request. I have no correspondence on this at all, absolutely none.

The same thing, you might argue, and you know about this, is that L&K wants to acquire or rather the receiver wants to dispose of — I'm not sure — the shares or the assets of L&K. Obviously the purchaser, Terminal Sawmills, is interested in acquiring those licences that are held by the receiver. With the endorsement of the IWA, who are encouraging government to process the permission to transfer under, I believe, section 50 of the Forest Act, there's obviously going to be an obligation upon whoever assumes that licence to maintain its operation. It seems to me that it's not any different with respect....

[ Page 8318 ]

Interjection.

HON. MR. HEINRICH: Terminal has three mills. Mr. Chairman, Terminal is sitting on a place where they have absolutely no tenure whatsoever. An excellent operator.

MR. WILLIAMS: Like Mr. Doman used to be.

HON. MR. HEINRICH: Are you speaking against the employees, the IWA people who are asking to have this process? Of course not.

Mr. Chairman, if there is a formal application made to my office for the transfer of a TFL or a forest licence, then there are going to be certain terms and conditions that I'm going to want to see adhered to. I think that's pretty important for the people in the northwest of British Columbia, in Terrace and Prince Rupert, or wherever their operations are located, anywhere in the province. I hope that the member for Skeena would understand that those matters would be looked at by government. We've got an interest in this too: employment.

MR. HOWARD: You can't trust these guys.

SOME HON. MEMBERS: Oh, oh!

MR. HOWARD: Good heavens! I'm saying that seriously: you can't trust them. Mr. Chairman, I just related to the minister what his government did in Terrace. MacGillis and Gibbs had a pole yard in Terrace; they employed 40 people. MacGillis and Gibbs Co. (B.C.) Ltd. had the pole yard. MacGillis and Gibbs, the parent company in Minneapolis, decided to make a deal with Whonnock Industries here in B.C., and they sold them the quota, sold the licence: $900,000 out of the country. And the next day MacGillis and Gibbs Co. (B.C.) Ltd. went into receivership, went into bankruptcy, shut the place down; 40 people lost their jobs and never did get back to work.

That's what you ginks did. That's what this government did in Terrace. And you're going to ask me, after I see the proof of the pudding, which is what you did once before, to stand here and trust you, and say there's got to be some guarantees, said the minister. I'll believe it when I see it. I'll believe it when I see those people in the Pohle mill and the Kitwanga mill and the Rim mill continuing on the job, when I see those loggers still out in the bush after any sale. I won't believe it before, because you've proven so many times in the past that you can't be trusted to keep your word. You're not to be believed. I regret that I cannot express that sentiment of trust in the government that has broken trust with the people of this province so many, many times in the past.

MR. WILLIAMS: I'd like to refer back to the earlier item: the dishonest recording of 50 percent cut in those two lean years a couple of years ago and the commitment, or at least the game that Mr. Apsey played, in terms of saying that those numbers could be burnped up to 90 for the five-year period. Can the minister assure the House that there will be honest reporting with respect to those years when in fact those numbers were not correct? They were simply a directive by the deputy minister, who has now of course gone back to his regular fold in the Council of Forest Industries.

HON. MR. HEINRICH: Why don't you make those statements outside in the hall? I challenge you to do it.

MR. CHAIRMAN: Order, please.

MR. WILLIAMS: A 50 percent cut and it wasn't there; a 90 percent cut, not there either. Nice arrangement. The question is, will this minister clean up the mess and see that there is honest reporting with respect to the AAC under the terms of these agreements and...?

Interjection.

MR. WILLIAMS: Indeed it is. It is absolutely extraordinary that this kind of false reporting and cooking of the books should have been condoned by the former minister. Any former minister in other administrations would not be able to sit in this House today were that the case.

The question to the minister is clear: will there be honest reporting with respect to the AACs over this last recessionary period? All I'm asking for is a commitment from the minister that there will be honest AAC reporting over the last few years, and the five-year requirements with respect to the AAC.

HON. MR. HEINRICH: I'm advised by my deputy that the actual cuts are available now. As a matter of fact, I've seen documents where the actual cut is reflected, and I can't remember if there were any notes at the bottom of that particular page explaining why. But when I look at the cut control and the average cut for a number of operations within the province, either you see the differential between the figures.... And it seems to me the actual cuts are available.

Vote 33 approved.

Vote 34: forest and range management, $236, 372,520 — approved.

Vote 35: fire suppression program, $50,500,000 — approved.

Vote 36: forest resource development subsidiary agreement (ERDA), $39,688,726 — approved.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:56 p.m.