[ Page 8637 ]

CONTENTS

Committee of Supply: Ministry of International Trade, Science and Investment estimates. (Hon. Mr. McGeer)

On vote 49: minister's office — 8637

Mr. Williams

Hon. Mr. Bennett

Mr. Stupich

Mr. Cocke

Mr. Davis

Mr. Macdonald

Mr. D'Arcy

On vote 51: government telecommunication services — 8648

Mr. Williams

TUESDAY, JUNE 10, 1986

The House met at 10:05 a.m.

Prayers.

HON. MR. KEMPF: Mr. Speaker, with us in the gallery this morning from Terrace is Mr. Dave Parker, and I would ask the House to make him very welcome.

MR. HOWARD: I join my colleague from Omineca in welcoming the next Social Credit candidate in Skeena.

MR. BLENCOE: Mr. Speaker, I would like the House to welcome 16 grade 8, grade 9 and grade 10 students under their instructor, Mr. Bill Preston. These students are from the uptown challenge education program of S.J. Willis Education Centre here in Victoria. Would the House please make them welcome.

Orders of the Day

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

ESTIMATES: MINISTRY OF INTERNATIONAL
TRADE, SCIENCE AND INVESTMENT

(continued)

On vote 49: minister's office, $169,768.

MR. WILLIAMS: Mr. Chairman, I would like to commend the minister for his decision of yesterday with respect to the stunning success of northeast coal and his willingness to debate that issue in a region of the province that is now facing a depression as a result of the decisions made by this administration with respect to northeast coal. So I look forward to a debate in the near future in the towns of Cranbrook and Sparwood, in the towns of the southeast of British Columbia that have been most negatively affected. I commend the minister for his courage and his willingness to go to a region that has been so negatively affected by this government's lemon of the decade, northeast coal. The communities that need the greatest help with respect to that decision are in the southeast part of British Columbia.

Thank you, Mr. Minister. I look forward to those debates in the coal country of southeastern British Columbia.

HON. MR. McGEER: Mr. Chairman, not only am I delighted to debate that member in the southeast, the northeast, the northwest, the southwest and Vancouver East; I would like to debate the Leader of the Opposition and all of you put together on television anywhere in British Columbia at any time. I would like to expose the socialist policies for what they are. I would like to tell the people of British Columbia what your record was when you were Minister of Lands and Forests, when you were Minister of Health, when you were Minister of Finance, when your disastrous leader who has become an open-liner wrecked the economy of British Columbia — and the incompetence of performance here over ten years in opposition.

You learned nothing when you were in government. You learned nothing when you were in opposition. That's why you were defeated in 1933. That's why you were defeated in 1937. That's why you were defeated in 1941. That's why you were defeated in 1945. That's why you were defeated in 1949, 1952, 1953, 1960, 1963, 1966 and 1969. And when nine members of the press gallery went to work for the Leader of the Opposition in 1972, you know what happened then, but even they learned: 1976, 1979, 1983. Yes, and 1986: you'll be defeated again.

MR. WILLIAMS: That speech had so much more spark when W.A.C. Bennett gave it. It was a great speech given by W.A.C. Bennett, but at this stage of the game it's just a little dated. I prefer to look at the last decade of this administration in terms of what the unemployment rate was when you took office and what it is currently — more than double. I prefer to look at the last decade in terms of the number of people on welfare when you took office and now — more than double. You're the party of misery, the party of depression. You're the ones that have wrecked the provincial economy. You're the ones that have invested in every lemon going. You invested in a lemon like northeast coal. Your soon-to-go Premier over there is the one who invested in BCRIC, a monstrous failure that you’re now bailing out with $100 million — a $75 million loan from BCDC to take it off their hands. This was a new enterprise that was supposed to create jobs in British Columbia. It's now selling out in order to bail out of its monstrous problems in North Sea oil in the Brae field. And when we asked the Premier yesterday, he didn't even have any answers. He deferred to a minister. A $75 million loan for your failing mess in BCRIC.

Yes indeed, let's have the debate. Let's have it now. And let's not debate with some carbon copy junior from the Premier's office of yesterday. Let's deal with the real McCoy right here. Let's deal with the one who's abandoning the ship. If there was real courage on that side of the House, we would be going to the people of British Columbia now. There would not be that nonsensical exercise in Whistler.

MR. CHAIRMAN: Hon. member, I think we're straying a bit from the minister's vote, although some latitude has obviously been allowed.

MR. WILLIAMS: It's going to be a pleasure debating with that minister. We'll see that he lives up to his promise, which is a rare thing for this administration. Nevertheless, the work will be done in terms of making those arrangements; you can be assured of that.

I just want to look back again at the question of the major negotiations going on between Canada and the United States with respect to freer trade. I'd like the minister to respond on the issue of the countervail duty threat that we currently face. It seems to me that if the Americans retain the countervail — and it seems clear that they intend to do that....

Interjection.

MR. WILLIAMS: No, that has to be the number one bargaining item in terms of.... Have we conveyed the message to Ambassador Reisman that the number one issue is the countervail, and that there is nothing to talk about in terms of freer trade if the Americans retain the countervail? Because that's what threatens the entire provincial economy today.

[10:15]

[ Page 8638 ]

HON. MR. BENNETT: Mr. Chairman, I was disturbed when I heard the member for Vancouver East once again attack the workers who are mining the coal in the northeastern part of British Columbia. If it weren't such an obvious case of regional politics, trying to play one region off against the other in the most despicable way, in the most cynical type of politics, then perhaps he should not be answered. It is obvious what this member and his leader have tried to do. Just this last weekend I was talking to two of the young men who work at Tumbler Ridge, who have jobs there as part of a growing mining workforce, and they're thankful that they have an opportunity to contribute to production in British Columbia. The member for Vancouver East would somehow blame this government, and deny the international recession that hit resource values.

But let's talk about coal, because he's preoccupied with coal. Even though it had no quotas to protect it, as central Canadian manufacturing has — and the products that Ed Broadbent and the NDP still want protected at the expense of western Canada, supported by their little me-too group here in the Legislature in British Columbia.... Coal is the one resource that had no duties to protect it. There was no OPEC in 1981 to put a floor under coal, or other mining or forest products. They had to adjust and compete on world markets. What is the one resource that since 1981, on behalf of this province and our country, has doubled its exports in tonnage? What other resource has been able to do that during the recession, going from less than 10 million tonnes to 20 million tonnes, providing jobs in all parts of British Columbia?

Quite frankly, that member — and I don't believe it's inadvertent — is causing uncertainty in parts of this province with the statements he makes. I want to say that the one commodity without protection facing world competition that has doubled its sales, its tonnage, and therefore created more jobs in British Columbia, has been the development of the coal mines in the southeast and the northeast.

Do not let this member use this Legislature to create uncertainty and fear in parts of this province among those workers, because right now in Tumbler Ridge they're saying that if the NDP ever got into power, they'd shut down the mines and they'd lose their jobs. That's what they're saying, and they're saying it because they've heard what that member has been saying as he attacks one part of the province in order to try to gain some shaky political advantage in the other.

But I'll tell you what. Coal development, of all the resources that have had to face tough international competition for price and markets, is the only resource during the recession that has doubled the volume and therefore created more jobs. Coal development and mining and sales from the southeast have increased as well during that period. They have not gone down.

I look forward to watching that member try to debate on a factual basis — which may be impossible for him — with the Minister of International Trade, Science and Investment. I don't think he would selectively pick the one area where he feels comfortable. I think he should go, as part of this, to Tumbler Ridge. I think he should go to Tumbler Ridge. It would take an act of courage and, perhaps, whether you attend or not, will be very telling on how the people should view you — that member — if he only wants to selectively pick the place in which he's tried to play politics with the development of our resources.

There again we have a unique opportunity now with the invitation of the Minister of International Trade and Investment, now taken up by the member for Vancouver East (Mr. Williams). I will today go out and send a telegram to Tumbler Ridge announcing the debate that will take place. I will send a message to Fernie and to Elkford announcing the forthcoming debate. I will send a letter to any other part of the province, particularly into the Skeena area and through the northwest where the Mount Klappan coal developments will take place, because I believe they should be included; their prospects and the new tonnage that's going to be initiated there should be part of the debate. I will be pleased to arrange and announce the meetings on behalf of the Minister of International Trade and Investment and the member for Vancouver East, and I look forward in fact to providing an opportunity for a multiple set of dates so that nobody would be able to back out because they somehow have a busy schedule.

I believe this debate can be one of the most important, and I will certainly extend the invitation to the Leader of the Opposition (Mr. Skelly) as well; and if he will accept, I will also be there along with the Minister of International Trade and Investment to undertake this very important public discussion, because I do believe it is important.

The member for Vancouver East has said — and I was shocked that he would comment on the way in which the Minister of International Trade and Investment made that very historic speech about the political record in this province. He said that that speech was made better by W.A.C. Bennett....

HON. MR. McGEER: He made an excellent speech, but he....

HON. MR. BENNETT: He did make an excellent speech, and he made it at a time in which the quality of the opposition drew out the very best. But today there is no quality to make the Minister of International Trade and Investment rise to great heights; there's only that little group over there who are seldom here, seldom offer alternatives, often offer incorrect criticism and facts. So, Mr. Speaker, let's see some spark in the debate and perhaps the Minister of International Trade and Investment can get up and feel the urge to give that speech once more during this debate.

MR. WILLIAMS: No, spare us! Please spare us that speech again.

Well, the departing Premier literally and figuratively talks about attacking the workers. What we're attacking is the maladministration of ten long, long years. It's the maladministration of ten miserable years of unemployment and welfare in British Columbia. That's what we are attacking.

The Premier talks about the international recession. Well, folks, I've got news for you. The international recession doesn't exist anywhere other than in British Columbia. The recession is still here, and it is a home-grown one. It's a Socred recession that we've got in British Columbia.

The Premier talks about double the tonnage, but, you know, the issue is again — just as the issue was yesterday with the minister — a matter of whether there is any money in it for us. It's a question of whether there is a rate of return for the companies. It's a matter of whether you can pay your bank loans in indebtedness. That's the test. The lemon problem we've got in terms of that project is that it cannot. It cannot

[ Page 8639 ]

pay for the railway, it cannot pay for the power line, it cannot pay for the highway, it cannot pay the bank loans. That's the reality in northeastern British Columbia, and it has had that negative impact in the southeast in terms of jobs that would have been there in the southeast had you not gone ahead with the northeastern project.

The Premier talks about protectionism for the industries of central Canada. If you had had only a little bit of foresight, you might have protected our interest in terms of the resource industries dealing with Japan in this province, but you did not. A prudent manager, a prudent government would work to see that that indeed was the case. If there had been some joint bargaining with the Japanese, if government had been at the bargaining table with our smaller coal companies, I am sure we would have had a better deal and we would all be better off today. But that has not happened.

And the Premier talks about jobs. Well, the question is: where are they? There are people in food-bank lineups, there are people in unemployment lineups, there are people on welfare like we've never seen before in the history of this province.

Just in terms of jobs in the coal fields, they have disappeared as well. The president of Fording Coal, owned by Cominco and the CPR, Mr. Moorish, said: "Each job that we lost in the southeast was taken from the northeast as a result of the government's investment in the northeast fields." That's the president of Fording Coal, a prominent industrialist in the province, one who initiated their activities in the southeast some time ago. So it doesn't fly. What we've got is an industry where the bank bills can't be paid, where interest isn't being paid, and where they can't pay the principal that is coming due. That is the reality in that area.

I am pleased that the Premier is willing to arrange meetings for a debate. I am very pleased. All I can say, however, is how the mighty have fallen. How the mighty have fallen. He is the secretary to Dr. McGeer. If ten years ago you told that man from Kelowna that he was going to be reduced to being the secretary to Dr. Pat McGeer, he would have laughed. Now all of British Columbia can laugh.

MR. CHAIRMAN: Order, please. No names, please. Refer to the minister as the minister.

MR. WILLIAMS: Okay — secretary to the minister. That is indeed an indication of how the mighty have fallen. I took forward to those debates, and I look forward to the departure of the member for Kootenay (Hon. Mr. Segarty), because that will follow, as surely as night after day, from that full discussion in that part of the province.

HON. MR. McGEER: I wonder if I could introduce to the House my deputy, Mr. Jack McKeown, who has arrived from Vancouver this morning, because it's evidently the wish of the House that we carry on with some of the debate on the economic development of British Columbia, and the promise of the coal industry in particular, which has been our brightest export commodity, doubling its output since 1980.

The development of a new town in British Columbia, total infrastructure, thousand-year supply of raw material.... While there has been doom and gloom on the part of the member, let me give you some of the coal production figures from the southeast of British Columbia. A total of 10.2 million tonnes in 1980, 11.7 million tonnes in 1981, 11. 8 million tonnes in 1982, 11.7 million tonnes in 1983 and 20.7 million tonnes in 1984 — double in the southeast between 1980 and 1984. That brings wealth and jobs to the province of British Columbia.

This has all been done while the opposition on that side of the House has been decrying coal and coal developments, just as you decried electricity and electricity developments when we're selling a million dollars a day worth of power south of the border, our most reliable export commodity in the future. You were against that development from the beginning, just as you were against northeast coal. You've been against everything productive in British Columbia. Yes, the former Premier, W.A.C. Bennett, pointed out how often the socialists have been defeated. But there's one thing: he said it was a disaster if the NDP were elected, and he knew it. Then you were elected, and everybody knows it. That's the difference between 1969 and 1986. Everybody now knows it, and every day with your speeches and with your policies you make it evident why you are so unfit to hold office in this province.

[Mr. Ree in the chair.]

Mr. Chairman, the basic reason is not just a misunderstanding of the economy and economic forces, wanting to trash the free enterprise system in British Columbia in favour of government intervention; it is a failure to recognize the place British Columbia holds in the world, the necessity for us to understand and anticipate by our infrastructure developments what the world trends are going to be for commodities and other products — to recognize where the markets in the world will develop and be prepared to take advantage of them.

[10:30]

Our exports to Japan in the last 20 years have grown from 7 percent to over 25 percent. We have put in place coal fields recognizing that there are market economies that will require new output of coal to fuel the steel mills. What's happened in crude steel production? Let me give you some figures here so you will recognize the shifting forces that are taking place in the world.

Between 1974 and 1983 the United States' steel production went down 43 percent, European steel production went down 33 percent, Australian steel production went down 28 percent and Canadian steel production went down 6 percent. In that time Brazilian steel production went up 95 percent, Mexican 35 percent, the Republic of Korea 512 percent and Taiwan 740 percent. New steel mills are coming on stream around the world. Those steel mills will require coal. You need to know where the steel production is going to be in the future. You need to lay the groundwork with both international trade discussion and infrastructure to be able to supply these new world markets.

In the future the same will apply to our forest industry. We've anticipated where the electricity demand will come from, and we have anticipated as well where our scientific industries will be able to supply to the world. This is the basis for recognizing international trade. It's the basis for economic policy in a government. It's the kind of thing that we have never grasped even the tiniest insight of from the members opposite, but it is vital to our future; it's vital to the wealth of British Columbia; it's vital to the jobs of our existing labour force and the young people who are coming along. That's what forward thinking is all about, and it's

[ Page 8640 ]

simply impossible to do it when we've got the kind of policies and the kind of insight that we see from the member opposite.

I would advise, of course, if you're going to have a debate — and it appears as if we are — to put the member for Vancouver East forward in that debate. For heaven's sakes, don't let the Leader of the Opposition out in front of the public with his ideas and his grasp of the future. He used to be the understudy for the member for Vancouver East, and better to send the organ grinder out there than the monkey. Nonetheless, whether it's the Leader of the Opposition or the member for Vancouver East....

MR. CHAIRMAN: Order, please. Hon. member, with reference to other members of the chamber, I think such comments are unparliamentary, and I'd ask you to withdraw them.

HON. MR. McGEER: Certainly. It was just a little bit of allegory, and if the member in the chair took offence, of course I withdraw. I do maintain that the minister, disastrous as he was when he led the lands and forest department in that government, had as his understudy the current Leader of the Opposition. I don't think the relationship has particularly changed, and certainly the policies have not changed. Nonetheless, the fact remains that coal is our brightest export in the period of 1980 to 1986, doubling its production, bringing wealth to British Columbia.

I tell you now that electricity is going to be one of the bright export commodities for the next decade. Because we are poised to take advantage of both coal and electricity, this will bring wealth and prosperity to British Columbia. I say the same for our scientific industries in this province, growing at 20 percent a year with the new technologies that are being introduced as a result of the Science Council and discovery enterprise grants beginning to bring those businesses on.

The future is very bright indeed. We do have this cloud on our horizon because of the countervail application, but members opposite should recognize that this is a private industry initiative in the United States, commenced by avowed protectionists: the U.S. softwood lumber industry, which for 25 years has been attempting to set up barricades against our forest products in their markets in the United States. They're not capable of exporting; they're not capable of efficiently providing low-cost housing, even to their domestic market. There is a reliance on British Columbia on the part of consumers in the United States who want high-quality softwood products at a reasonable price.

We have always been able to supply that, and we have done it despite cries from that protectionist clique in the Unites States that has said the sky has been falling on their industry for the past 25 years. The rhetoric is no different in 1986 than when I first entered the House in 1963, and senators from Washington and Oregon were saying exactly the same things that senators from Washington and Oregon are now saying. They were prompted by the industry in 1963; they're being prompted by the industry in 1986. On the basis of merit, there is absolutely no difficulty with our case.

On its merits, it has been dismissed repeatedly over the past 25 years, and if merits count, again it will be dismissed. I suspect that as before there will be a sufficient number of fair-minded people in Washington, D.C., to recognize that this protectionist wave in the United States is without merit, is against the long-term interests of their country. They got a sample with the 35 percent tariff on shakes and shingles, immediately causing an increase in the price of that commodity to consumers in the United States and a counterproductive increase in log prices south of the border.

These are things that presage, if you like, what would happen on a much larger scale were there to be any kind of countervail introduced against Canadian softwood lumber, so we hope, we anticipate, that cool heads will prevail in Washington, D.C., and similarly that cool heads will prevail in Canada. The response that our Canadian government made was a measured response. It was not a signal that they wished any kind of trade war, but only to say that the industries in Canada, and specifically those in British Columbia, cannot be crushed as some insignificant ant; that there are real people out there whose crime has been being efficient, productive and bringing low-cost housing to residents of North America.

Those sorts of people should be praised; those sorts of people should be encouraged; those sorts of people should be protected from counter-productive arbitrary measures such as were introduced in that countervailing tariff. We've got to continue to hold the shake and shingle up as an example of precisely the wrong thing for any country to do at any time, particularly now when we want to begin to become greater friends and more reliable trading partners.

I'm not going to answer any iffy questions based on the typical doom-and-gloom proposals always made by the New Democratic Party. I will say that now is the time when Canadians need to speak as one, because that's how a small nation can become stronger. I plead again today, as I pleaded yesterday, to get your caucus on the telephone to Mr. Ed Broadbent in Ottawa and get him on board supporting our Prime Minister. It's all very well for us to have debates in our Legislature and to differ in policy, but there are times when.... Certainly if I were in opposition today, I would be strongly supporting the government and the Prime Minister, saying that we must stand together as a country when we're threatened by an arbitrary external force. That's what we require the NDP members opposite to do now. This is what we require the NDP nationally to do, because that kind of strength makes it possible for us to have a force in Washington stemming this tide of protectionism. As we all know — we're learning now — those things are extremely bad for us. What they have to learn is that it's bad for them as well.

MR. STUPICH: Mr. Chairman, the debate — the minister now says "if" it takes place — might be very informative under the right circumstances. Certainly the whole story of government involvement in northeast coal — what it has cost the people of British Columbia so far and what it's going to cost them for an indefinite future — has never been told. We've tried time after time to get the story in the House; we've been unable to get proper answers from the people who should have them.

As far as debating with that particular minister, I'd be cautious, Mr. Chairman, because I know something about the way in which he operates. He never plays unless he has an opportunity to stack the deck. You may recall the incident when he set out to prove that B.C. wines are inferior to imports. He selected three particularly low-quality B.C. wines, three particularly high-quality imports, and insisted, according to reports at the time, on having two weeks to sample these before he went on TV; then, wonder of wonders, he was able to identify them. I wonder just how much

[ Page 8641 ]

that kind of person debating would add to human knowledge, Mr. Chairman. A debate with everything out would be good for the people of British Columbia, but I fear that that minister would add little to the debate.

MR. WILLIAMS: As W.A.C. Bennett was wont to say, Mr. Chairman, this doctor couldn't even tell the sex of a whale, so maybe we don't have too much to worry about after all.

I'd like to look at the southeast again in terms of the numbers, the shutdown, the cutback, and talk about the realities. The northeast is selling 100 percent of contract, but the southeast is selling 50 percent of contract. There's no doubt that the northeast has had that kind of impact on the southeast. In southeastern B.C., 1,100 direct mining jobs have been lost since 1981. That's the impact of northeast coal on the southeast — make no bones about it. Unemployment rates in the southeast are about the highest in the province. That's the price they're paying for your lemon program in the northeast. What's going to happen? Byron Creek Collieries, owned by Esso, will be laying off 139 employees, most of them in July of this year. Their total labour force at present is 250 people — they're laying off 56 percent of their labour force in that one operation this summer. Crows Nest Resources, owned by Shell, is going to lay off 100 of a total workforce of 500; that's a 25 percent layoff. So it's abundantly clear what has been happening and is continuing to happen in the southeastern part of the province. They're paying the price for your program in the northeast.

The member for Point Grey can talk all he likes about our efforts now being joint efforts with respect to American countervail duties on softwood lumber, but very little was going on six, eight, ten months ago in terms of cleaning up that problem before it got to this stage. The letter from the Premier's office with respect to shake and shingle took place six weeks after all the alarm bells were ringing loudly. Zip from your office, and you're supposed to be responsible for trade issues; sweet nothing from the trade office on the shake and shingle issue at an earlier stage. Six weeks late out of the Premier's office on the shake and shingle issue. A fair amount of the blame simply sits at your doorstep with respect to the loss of a $250 million industry. Just this last weekend I listened to Senator Slade Gorton, the senator from Washington state, talking about his meetings at an earlier stage with Premier Bennett and saying that it was impossible to deal with this man, in effect, that the rational arguments weren't dealt with in terms of those discussions at an earlier stage. That was on CBC last weekend.

That's the kind of things we hear, and it is clear that you people weren't doing your homework when it was absolutely necessary. You don't solve a crisis when it gets to this stage very readily. You solve those crises at an earlier stage in terms of dealing with real problems in a fundamental way at an earlier stage when the risk is not so high. Now the risk is very high indeed, and the prospects look dismal. I suggest to you, Mr. Minister, the very reason is your inactivity, your lateness, your lack of concern at an earlier stage. In this ministry we have had a bumbler who finally got dumped out of cabinet, finally left as an MLA and belatedly was taken over by yourself. So the problem is clearly there in this ministry in terms of the job not being done at an earlier stage.

[10:45]

HON. MR. McGEER: Well, again, Mr. Chairman, we want to summarize very clearly where we stand. You have had overall figures of the increase in coal exports from British Columbia, northeast and southeast, our brightest export commodity from 1980 to 1986. The northeast coal development was one which was non-competitive, in terms of markets, with southeast. Had we not put the northeast coal complex together, those markets would have gone to other nations. As it is, there is an infrastructure in place with 1,000 years' supply of coal.

When I listened to the economic nonsense of Mr. Leggatt, who sat as the member for Port Moody–Coquitlam before we got a good free enterprise member in that seat, day after day after day he got up with economic nonsense about northeast coal. So finally I said one day: "After all of this railroad is in place which you say needs to be written off in the first 25 years, then can the people have that railroad from the CNR for nothing?"

No, there was no suggestion that that would come forward. Of course, if you couldn't pay it all off and then hand over a railroad that was good for 1,000 years, far more than when you put it in, of course they wouldn't want to give that up. So when you build a railroad as the CPR was built 100 years ago, you didn't build that railroad to be paid off and thrown away in 20 years like some kind of a used car. That railroad becomes the commercial centre for moving goods and services across the nation, and particularly to carry the goods of a quarter of a continent down into the Vancouver harbour to be shipped to growing markets in the Far East.

That railroad, is it worth more today than it was in terms of cash 50 years ago? Should we have written it off and thrown it away? What about the railroads that were built into the southeast of British Columbia? About that same time they provided the basis for an economy which now thrives in the southeast part of British Columbia and which would not exist at all had the railroads not been there. I remember the days when the NDP opposite didn't want to see the railroad improved so that we could ship out of Roberts Bank. No, sir. Do you know what they wanted? They wanted the railroad to be built through the United States and to have the coal shipped out of Seattle. That was the policy of the NDP at the time.

Don't tell me you have had any vision for any kind of development ever in the history of British Columbia, because I have sat in this House a long time and heard your debates and all the members come forward. The problem is that the public, too many of them, have forgotten the things that you used to stand for in the past. They have forgotten the things that you did when you were in power, and they are inclined not to believe, because they can't believe the things that you are saying today.

You were against that coal development. You were against the power developments. You were against the improvement of the railroad to southeast coal. You were against Roberts Bank. You've been against every progressive development that I have witnessed in the 25 years that I have been in this House, and you haven't changed one bit. You haven't changed one bit.

MR. COCKE: Mr. Chairman, sometimes over the last number of years that I have been a member of this Legislature, I have been rewarded by sitting through a debate that made sense. But every time I see a debate with the minister

[ Page 8642 ]

from Point Grey I see one that resolves itself into personalities, into insults from a minister who's so terribly underinformed about not only that portfolio but everything that I've seen him endeavour since I've been here.

He says: "Let's speak as one voice." He wants us to mouth what Brian Mulroney has done to us. Brian Mulroney is the same kind of marauder as the Socreds in British Columbia. Here we are jeopardized, threatened by the American countervail. And what does Brian Mulroney provide as a counter?

MR. WILLIAMS: Irish eyes are smiling.

MR. COCKE: Irish eyes are smiling. "Dear Ronnie, I don't like what you're doing. It's hurting me politically." And then he puts a tariff on books, for crying out loud. The only thing it's going to do is raise the price of books for Canadians. It isn't going to make one iota of difference to the Americans. Brian had an opportunity, though. He could have put a tariff on pharmaceuticals, had he had enough guts. But he didn't. No, and his great mentor over here, the minister of industrial trade, or whatever he's called, says we should speak with one voice.

MR. REID: You should at least know the title.

MR. COCKE: Know the title! They change titles in the Socreds faster than they change their colours, for crying out loud. Who can keep track of them? Chameleons, one and all.

Mr. Chairman, he is so well-informed that he didn't even know who replaced Stu Leggatt as the member for Coquitlam-Moody. "The great free-enterpriser," he calls Mark Rose. I'm sure that Mark is going to be very delighted with that, but not coming from that minister. The fact of the matter is that this minister and all of the other ministers who jump to his defence and to the defence of his predecessor can say all they want about how good they are, and how bad we were by comparison. I believe that our government from '72 to '75 was the best this province has ever seen. [Applause.]

AN HON. MEMBER: A lot of enthusiasm over there.

MR. COCKE: You wouldn't have much enthusiasm, but you know it too, deep down in your poor little heart. But that's neither here nor there.

Interjection.

MR. COCKE: Yes. And things got done then, didn't they? We didn't have ambulances out cruising. This province was in good hands for three years and four months. But what have we had since? We have had a government that has pulled us into a bog never before seen in this province. We have a hopeless young generation out there because we've got a government, for crying out loud, that won't work for them.

MR. REID: Be positive for a change.

MR. COCKE: The member for Surrey, who sits on his can, who sits on his prat, never says a word in debate, only from his chair, has nothing to say, and he asks me to get up and be something else.

MR. CHAIRMAN: Order, please. We are not in debate on the budget. We are not in debate on the throne speech. We are in debate on the estimates of the Minister of International Trade, Science and Investment.

Interjection.

MR. COCKE: Well, let's hear you say that again. The minister of ignorance, he calls his colleague. I can't believe it. He now believes what we're saying.

Mr. Chairman, it would be a delight to get up in this committee and speak as one. We have before us some of the most important issues that we've ever faced, in terms of trade. We should be speaking as one from here. We should be speaking as one from Ottawa. We should be speaking as one in Washington, where rumour has it — and very high-placed rumour at that — that despite the commission, Ronald Reagan is going to impose tariffs on our softwoods. We should be fighting that off right here and now.

I agree with the minister to this extent, that they do not have a case. But the fact of the matter is, when you get out there, as poor old Brian did.... Let me tell you what the mistake was. He went out on an international stage and said that we Canadians, 25 million strong, are going to debate, are going to discuss freer trade or free trade to begin with, dealing with a nation of 250 million, known in trading circles as international bullies, who were not going to be pushed around by 25 million of us here and who to show us that they're not going to be pushed around started hitting us where it hurt. That was our problem. We got into this thing, we were over our head before we knew it, and now look at us. And where is it hurting worst? In poor old British Columbia in the forest industry. Now somehow or another we're going to have to get our act together in this country and get somebody working for us down in the United States to indicate that in the long run they're on the wrong course.

You see what the United States is afraid of is that Japan is going to take a look at what's happening here and say: "Oh, we've got to show Japan that Canada — that little nation — can't push us around; otherwise Japan might start trying, or West Germany or France, or even Brazil." That's what the United States worries about, and that's why we have to really get it together, and somebody's going to have to talk to Brian Mulroney, and talk to him real hard, and show him that he's been really badly representing the people, particularly in British Columbia.

And the Minister of International Trade here tells us that we've got to jump on that bandwagon.

MR. HOWARD: Retaliate, that's what he said.

MR. COCKE: Zippo. And when they do retaliate, my dear colleague, what do they do? They put a tax on books, where it couldn't possibly hurt. The only people that can hurt is the Canadians who are going to be buying those books. On the other hand, particularly with the generic drug situation emerging, had we given them a little nudge on pharmaceuticals, and that minister knows that that was a lot better than moving in on periodicals and books.... Oh, no, we didn't move in that direction. No, my dear colleagues in this Legislative Assembly, we moved right down the wrong course. Don't ask us to speak with one tongue as one voice when you're making mistakes all over the board, period.

[ Page 8643 ]

HON. MR. McGEER: Mr. Chairman, first of all let me apologize for accusing the member for Coquitlam-Moody (Mr. Rose) of being a free-enterpriser. I had my members mixed up and I apologize for that.

I was pleased to hear what the member for New Westminster had to say, because I agree he perfectly grasps the problem. I also agree with the member that the choices that were made for countervail were unhappy choices. Certainly I can confirm these were not the recommendations that I made to the federal government.

MR. HOWARD: It was your idea.

HON. MR. McGEER: Pardon me? Pharmaceuticals.

SOME HON. MEMBERS: It was your idea.

HON. MR. McGEER: No, no, no. I never suggested....

Interjection.

HON. MR. McGEER: May we have order in this disorderly debate, Mr. Chairman?

MR. CHAIRMAN: If the members will conduct themselves with orderliness.

HON. MR. McGEER: I was having what I thought was a rational debate here with the member for New Westminster, but it's these inane interjections that suddenly distract attention, and if we can minimize these for the next few minutes, perhaps we can have some constructive debate...

[11:00]

MR. CHAIRMAN: On the minister's estimates.

HON. MR. McGEER: ...because I see a little bit of daylight here for the first time with the members opposite, and I'd like to pursue that if I may.

Setting aside the countervailing move, some gesture was necessary, and I hope members agree with that. If you don't agree with it, then we've got a policy debate on our hands. If you do agree with it, then I would certainly agree with you that the choices that were made were unhappy choices, probably for all Canadians and perhaps for us, and I confirm they were not the recommendations that I had made to the national government. Nonetheless, what we hope is that these will all be quickly dismissed as being silly and counter-productive — the move made on both sides of the border.

Of course I agree that the member has correctly interpreted the mood in Washington, D.C. While it was stated publicly that the move against our shakes and shingles and now the proposals for softwood lumber were an exception to the direction of the United States, the softwood lumber issue has been hanging over our heads for 25 years, and whenever there is an intensely competitive market situation in the United States, it intensifies. Of course, when lumber markets are good, there is a fear on the other side of the border that somehow there will not be supply. Ultimately that is going to be the situation in terms of lumber in North America. People will be desperate for the kind of supply that British Columbia can provide. While that is not the situation today, it could very easily be the situation in the near future.

[Mr. Strachan in the chair.]

Now what we're doing as a province — and I think the members opposite should recognize this — is we are pursuing alternative markets for our traditional goods, and at the same time we are developing what for us are new, non-traditional goods for export. When the member came into the House, two-thirds of our production went to the United States. The last year for which we have figures, it's gone down to 47 percent. Our exports have quadrupled to Japan. They're going up sharply to Korea, so what we are doing is we are putting our eggs in many baskets.

We anticipate, for example, in items like steel, that we're not going to look for markets for our coal to the United States. Their steel production will not be going up, but steel production in the Far East will be going up, and therefore we should be looking to those markets. Heaven knows the people of Canada are delighted with the price and the quality of consumer goods that they're getting from the Far East. Whether it's Japanese television sets or Hyundai cars, there's no question that the consumers of British Columbia can be supplied with goods that are competitive in quality and competitive in price. All of the moves that you would anticipate, if markets are closed off to us in the United States, have been anticipated and developed by these new markets in the Far East.

I can tell you that a heavy emphasis of the ministry that I now head is placed on that sort of development. Yes, that message needs to be communicated to the United States, because these hostile moves are bound to spur our determination in our own self-interest to develop these alternative markets. What does one small nation do when it is faced with a pick-off play for an industry that may be important to that nation, but is an end in terms of international trade? What's the shakes and shingles $250 million industry when two-way trade is $169 billion? In total terms, insignificant; in terms of our industry in British Columbia, very, very significant.

I believe what needs to be done is that all the major trading nations, above and beyond the safeguards of GATT, which come in too slowly and which don't cover all items, should be seeking self-protection against arbitrary measures that are started against them. It might be a small industry in Switzerland, or it might be one in Singapore where a market is removed because the industry in the foreign nation becomes too efficient. You can't afford to have a world standard-of-living increase if every time there's a super-efficient industry in some nation or other it becomes a victim of protectionism in all the markets that it is developing. How do you do that? What you do is you develop, in effect, a worldwide tariff protective association so that no single country or industry in that country can be picked off because it's good. The shake and shingle situation in British Columbia is the ideal example which illustrates everything that is wrong in international trade and the necessity as to why we may have to look beyond the borders of our own country to seek the kind of redress that many nations would like to have.

What really is required in the world today is for each nation to be protected from its own internal politics, because always when there is this intense competition.... We hear it every day from the members opposite — and I don't want to start getting partisan again, but everybody gains. Free trade is a win-win situation when you support the efficient industries, no matter where they are in the world. The problem is that internal politics.... I think there's no question where the sentiments of President Reagan lie. He is faced with

[ Page 8644 ]

internal politics, and what we must do is to try to shift the internal politics by the way our politics respond to their politics.

That's why countervail, unpleasant and distasteful as it is, becomes a necessary step to take. I can only say that if we had a world self-protective mechanism to put down protectionists wherever they rear their heads in any nation, we'd be the wealthier for it. We would have more jobs and more industry in British Columbia, particularly a British Columbia which seeks export markets.

MR. DAVIS: International trade and resource development: in Canada's history, the two have been linked very intimately. We've often had a unique advantage in our resources, with high-grade minerals, abundant forests and so on. Latterly the thrust in Canada for resource development has really been in developing the northern half of provinces; I'll call it the northern vision. Each province has been involved in programs of this kind, with subsidies, usually in transportation, to assist the development of the north.

Parties of different political stripes have been involved in the same process, helping industries develop in the north. Uranium mining in NDP Saskatchewan: very extensive investments in both road and processing facilities; public investment in the sense of Crown corporation involvement in that province. That is typical of the provincial attitude to development. In northern Manitoba, currently an NDP government is engaged in hydroelectric development to assist development of the northern part of that province, and directly contracting outside of the province, in the United States, with markets sufficient to launch a development which, in the initial stages, won't pay its own way, but in the longer term will help develop the northern half of the province.

In British Columbia the NDP government was very much involved in northern development. The hon. member from Vancouver East knows very well that he was much involved in developing the northwestern comer of the province. He was involved in public investments which were equal, in current dollar terms, to the investments involved in northeast coal. The biggest single difference was that he had no markets in mind; he simply had public investment in mind. He did not have the market studies sufficient to warrant that development as a commercial development. He knows that very well. He didn't have the forest resources on that line. He didn't have minerals, which had been discovered along the so-called Dease Lake line. He involved the federal government in what was to be a railway to Alaska. It was to traverse not one main mountain chain but several, and was to parallel a much more efficient transportation system, namely barges, shipping up and down the west coast. Its economics were certainly suspect — there were not markets — but the justification was opening up northern British Columbia. It was a program to put infrastructure in place, principally transportation, which would allow a large comer of the province to develop.

Hon. members know that I've been critical of northeast coal, basically because I have taken the view that the private sector should finance more of this style of developments. But what northeast coal has done is set up a transportation infrastructure for the northern half of this province — indeed, for the northern parts of Alberta and Saskatchewan as well — which will serve western Canada well for decades to come. So there was some justification for that project, and certainly much greater justification economically than for the Dease Lake line, which this administration terminated in 1976. It had no economics whatsoever.

So we have here in this House the pot calling the kettle black. What would another NDP administration do for the north? It would install infrastructure, be it highways, power lines, some further rail line extensions, but it would be doing this kind of thing. Our current problem is trying to do these things without the Americans or others saying that we're unfairly subsidizing a competitive industry. I hope that government here, whatever its stripe, is wise enough to confine its investments to infrastructure, not to engage in other and more direct subsidies for industries, whether in the north or otherwise, and that we not deliberately or even naively invite countervailing duties. Whether we negotiate a free-trade arrangement across the board or sectorally with the United States, countervail will continue. Americans will always be looking for unfair competition and will penalize those products flowing across the border which they feel will cause unemployment there.

Finally, Mr. Chairman, I can't resist recalling an instance where when I visited Victoria and met with the former Premier of this province, Mr. Barrett, he was concerned about pollution in Squamish. He was telling me that his administration were determined to bring coal from the northeast down to Squamish over the B.C. Rail line. They had already invested in Sukunka coal. They were determined to make a success of a large-volume coal export from the northeast to the coast and to sell the product primarily to Japan.

Now it would be interesting to surmise what might have happened had the NDP continued in power. I suspect that there would be a coal-mining industry in the northeast, that it would have been supported in large measure by public funds, and that the coal would have been exported out of Squamish or Britannia, out of Howe Sound. There would have been a lot of opposition from environmentalists and so on, and the Premier of the day said: "I am afraid I am going to take on the environmentalists on this." Those were the ideas of that day, and they didn't come to pass. But I think it is sanctimonious of members opposite to be talking as if they would have done nothing in the north in the area of resource development, and that they wouldn't have put public money into rail and other transportation facilities.

I think we are just wasting our time, Mr. Chairman, because this matter of trade with the United States, countervailing duties, is much more important, and we should be addressing those issues.

[11:15]

MR. MACDONALD: Mr. Chairman, I want to add to a very interesting debate what I hope is a new note, and welcome the minister's deputy. Imports from Scotland are always acceptable in this country, unless they play soccer or tear down a stadium.

I just wanted to put on the record the figures when we are talking, as we should be, about freer trade with the United States of America. The other side of the picture to the Americans' argument that we have a trade surplus with the United States is the invisible payments. The Americans say to us Canadians: "Why are you getting so angry with us about putting on countervailing duties when in 1984 you had a $19,727 million trade surplus?" That's commodities. That's Canadians working hard in the bush and in the mines and all the other places to produce export goods that flow across the

[ Page 8645 ]

border. But the counter fact of Canadian life as a nation is that we ran in that year a deficit of $13,047 million in interest and dividends flowing south. While that still left us in that year with a $6 billion overall surplus, which is pretty good in the world as it is at the present time, it's not something you can count on, and the permanent drain comes in that interest and dividend outflow which is a permanent feature of the Canadian nation. It is a feature that cannot be allowed to continue if Canadians are to have a nation that is strong and free and of which they can be proud. Because what those figures are telling us is that basically we don't own our own country. We are not maitres chez nous.

I hope as we progress toward freer trade we will recognize.... Even Pierre Elliott Trudeau did something about this in his national energy policy. It is panned all over the place, but he was trying to bring a greater measure of Canadian ownership into oil and gas. Now that has been totally abandoned by the Mulroney government, forgetting this other side of the coin: our debtor's status in terms of what we own.

The other thing that we have to consider is the power of international floating capital. You may ask yourself why the Canadian dollar should be so low in relation to the American when we have a $6 billion overall surplus in balance of payments. I guess the answer is the wealthy cartels and individuals who can move their capital around in the world as they please and break governments here if they want to; or if they think they are engaging in social reform or spending too freely, they can break them. Those people, the international power and money brokers, don't think so much of the Canadian dollar as they do of the sanctity of strength of the Reaganite America where the rich get richer and the poor get poorer. So if we want to be a nation, we've got to do something about owning our own country to a far greater extent than we do at the present time. If we are going to call ourselves a nation, we have also got to be able to stand up to the international money and power brokers that can move their capital around and break nations but will not be allowed in the future, if we do it properly, to break Canada.

HON. MR. McGEER: Mr. Chairman, I certainly agree with the member opposite that the hidden transactions overwhelm the trade surplus that we have with the United States. Of course, that is why our dollar is at 71 or 72 cents, or whatever it is, as opposed to the $1.10 that it was before the nationalistic policies of the Liberal government in energy and other areas began to bite rather deeply.

I do not agree with the member that we should turn our back on foreign capital. Not all of it is equity capital — much of it, for example, that used to build our dams in British Columbia, is debt capital — but that still requires principal repayment and interest. I led a trade delegation not too long ago to Hong Kong. Hong Kong has more people on that tiny island than all of western Canada. We must build, in order to tame and command this immense land, a costly infrastructure covering a quarter of a continent. We must build the power lines, the railroads, the highways, the transportation system, the airports and all of the facilities that are required to build our great cities and remove our immense resources. None of these infrastructure costs exist on the island of Hong Kong — one airport, no highways, no electricity or rail infrastructure, none of the things that are an enormous cost in developing an immense nation with a small population. British Columbia is one-quarter the size of western Europe, larger than California, Washington, and Oregon combined, larger than all of the east coast states in the United States, and there are 2.7 million people and this enormous infrastructure that must be built. Are you proposing that all of that infrastructure should be attempted to be built by the internal wealth of 2.7 million people?

The problem that Third World nations have is not a problem of resources, not a problem of willing people; it's a problem of having sufficient capital to develop the infrastructure so that they can work productively. If we were to follow the policies of the member for Vancouver East, we would quickly reduce ourselves to all of those nations in the world that have population and resources, but no infrastructure, no distribution system, no health system, no transportation system and no means with which they can provide this by themselves. We're different here in British Columbia, Mr. Chairman, because we are international in our outlook, because we do not have the silly parochial views of the member for Vancouver East, because people have faith in British Columbia and British Columbians, and are willing to bring their savings to this part of the world to help us develop that infrastructure — and that member there would destroy it all.

MR. MACDONALD: Mr. Chairman, there are nations in the world that are not, like Brazil and Mexico, in vast financial difficulties. They are principally in northern Europe, to be sure. They have exchange controls, they control their national life, their standard of living has been improving, and they do have a health plan and all these other things. I don't know why this minister has such blinkered vision. He sees the world in Reaganite terms, and he can't see anything else. Ever since he left the Liberal Party he has had to put on these blinkers and behave like a Reaganite. It's just ridiculous. Look at the whole world. Where are the states that are progressing in that world? They're the social democratic states. Where are the states with social services and industrial activity? Which is the state that sends seven tennis players to the international tournaments — seven out of seven million people — and almost wins them? Where are they? That's the social democratic future. Take off your blinkers.

HON. MR. McGEER: Mr. Chairman, I don't know if there are socialist tennis players or not in Sweden. I know their great star, who made millions of dollars playing international tennis, soon moved to Monte Carlo. I don't know about all this socialism that produces these marvellous tennis players, but it seems to me after they've won a little money, whether they're from Czechoslovakia or from Sweden, they're looking for a more free enterprise-oriented country in which to live. But that's by the by. We don't need to argue tennis players here this morning, but what we do need to argue is whether or not there should be foreign exchange controls on capital in this country. That may be the New Democratic Party policy. If so, you should state it. It is certainly not the policy of this government, and I hope it will never be the policy of this country.

MR. WILLIAMS: The professor from Point Grey once again ignores the facts and the reality. What we've allowed to happen in this country of ours is to have equity investment on an incredible scale, unlike anything in the western world — by outsiders, primarily Americans. As a result, our destiny is not in our own hands. We are essentially a branch plant

[ Page 8646 ]

economy, and the dividends that are paid out for that equity ownership are huge. Had we instead simply accepted debt capital, this nation would be profoundly better off.

There is no question about that. You check the data for the last 20 or 30 years. Had we had debt capital instead of equity capital, we would be in very good shape indeed, and we would be owners and masters in our own house, the private sector and the public sector. That has not happened. As a result, we are permanently indebted to these owners. The surpluses that are needed for rebuilding the Canadian economy, the surpluses that are needed for retooling plant and equipment and moving into new technologies, in fact go south.

That is the pattern of this branch plant nation of ours. What we desperately need is a phasing-in of new policies over time, to see that that kind of drainage of the surplus and the revenues that we need to continue rebuilding anew this nation and this economy of ours.... Until that happens, we will continue to have problems, we will continue to deal with a business cycle that frustrates and creates problems for our people, and we will lose the funds we need to rebuild ourselves in our own nation. That's the reality of this branch plant nation of ours.

Don't say we don't have the savings; don't say we don't have the ability to do it ourselves; don't say we have to go abroad to build these roads that we need in British Columbia and the infrastructure that we have in British Columbia. I don't believe that for one minute. I believe that we have the talent, the skills, the savings and the rest of it to do it ourselves, and to do it better. That's the difference between you and us. You don't have faith in this nation; you think you've got to scurry around the globe to find somebody to drop some money here on us. We don't need it at all. We can do it ourselves.

I remember a case involving Clearwater Timber in the small town of Clearwater on the Thompson River, north of Kamloops, wherein one of the Big Five trading companies of the Japanese, the Marubem Corp., wanted to take over that operation. I asked my staff then in the Forests ministry what their opinion was of that. They thought, well, it was probably okay. I responded by saying: "Why is it okay?" They said: "Well, it's going to bring capital to Canada." I said: "How do you know? You go back and you check out whether Marubeni buying Clearwater will bring capital to Canada indeed."

They went back, and they came back and said: "Mr. Minister, I'm afraid we were wrong. Marubeni will not be bringing capital to Canada. Five million dollars of the funding" — it was a $10 million acquisition — "they're going to get from Canadian chartered banks" — that is, our savings in Canada in this province — "and $5 million is going to be a second mortgage by the Swanson family that currently owns the company." They were bringing no capital to Canada at all, and yet by getting equity ownership, all of the future surpluses out of those timber operations, our public timber and those sawmill operations in Clearwater, would go offshore.

It's that kind of economic nonsense that we don't need in this country. It's that kind of economic nonsense that we don't need in British Columbia. Clearly that could all be done internally in British Columbia. There may be occasions when we do need to go offshore. There may be occasions, but they should be thought about very carefully indeed because of this loss of surplus that goes, in terms of profits, dividends and payments, to the equity owners of those operations.

You have an ideological problem on your side: you think it's a universal good. We will accept it where it's needed and where there is clearly provincial benefit. But we do not have your ideological hangup, where you say it is a universal good. The Clearwater example is a classic one.

[11:30]

There are others that I can recall from those days, where Japanese companies held pulp operations in northern British Columbia. They had internal pricing systems. They would sell their commodities, pulp, at below market price to their offshore owners in Japan. As a result, they never made a profit on the books; as a result they never paid corporate tax in Canada. That goes on in terms of the games played by international investors. That we don't need in British Columbia. That we don't need in Canada. You with your old-time, Adam Smith ideology have not caught up to the reality in terms of the major players in the world scene. You're naive players that get suckered in every time. You got suckered in on northeast coal, you were suckered in by Louisiana-Pacific, and I hesitate to think of what will be next. We can afford you no longer, Mr. Minister. We can afford this government no longer, Mr. Minister. Let's go on with the job and get rid of you all.

HON. MR. McGEER: I can see, Mr. Chairman, a cycle building up again in the NDP. It's quite comparable to the cycle that built up in the late sixties and early seventies — the member opposite was a prominent part of that — railing against big international companies, railing against the resource industries, and apparently persuading some members of the caucus of that day. There was no problem when the NDP was government with capital coming into British Columbia; it absolutely ceased. But that wasn't the real difficulty. The real difficulty was that every bit of capital that was available got out of British Columbia; it got out of British Columbia.

The story I remember is when an NDP member from the Kamloops riding sat here. I remember two things. One, the Liberal member, Mr. Gibson, stood up and said the NDP had created a miracle: they had turned the mining industry into despair at a time of record mineral prices. This is when copper was $1.20 a pound, not 62 cents to 65 cents as it is today.

When I went into the Kamloops riding I was met by a man at the airport who wanted a strong free enterprise party formed in this province. He said: "You know, when the NDP came to power I had 150 people working for me." They were in the mining exploration business. He said: "Do you know how many people I have working for me now?" I said: "No." He said: "Zip! They've gone all over the world, most of them to South America, many to the United States."

What you did was you drove people out of British Columbia. You drove capital out, and with that you drove skilled people out of the province. You did it by saying exactly the same things you're saying now, but instead of saying them in opposition you said them in government. You brought in injudicious taxation moves to support that rhetoric and you destroyed the number two industry in British Columbia. We're building it back up, and we're building it back up in times of intense international competition.

I like to hear all the members opposite say these things, and I like to remind the public of British Columbia that it isn't the first time we've heard them. There's total unrepentance on that side of the House despite the consequences of putting

[ Page 8647 ]

into practice their theories. They haven't abandoned them at all. It may be that the second member for Vancouver East has contempt for Adam Smith; I don't. I think the more we can let competitive market forces play, the more we can lower trade barriers. As British Columbia has made its way in the world by exporting its goods and having world competitive industries, so it will continue to do so in the future. Narrow protectionism, whether it's in terms of ownership, capital, jobs, tariffs, all the things the NDP says, in my view is entirely wrong. They're no different than what they said in the sixties; they're no different than what they put into practice between 1972 and 1975. Nothing was learned in the interim, and I say it would be a disaster for British Columbia if that man and his caucus were ever put into power again in this province.

[Mr. Ree in the chair.]

MR. COCKE: Mr. Chairman, I am utterly amazed when I listen to that rhetoric. Adam Smith indeed! My colleague offered a good example. But why don't we take a look at one more example of where we were just taken down the garden path.

Remember the name Kaiser? He was going to come up here and develop British Columbia. He was going to bring capital up from California to save our souls in the southeast. So they moved in, and all of a sudden we wondered where their money was. That was in the old W.A.C. Bennett days, so there was a very open environment for them. We wanted that coal developed at any cost, and don't ever think we didn't get it developed at any cost. They brought their technicians up here, but they didn't bring any money. They went to a consortium of Canadian banks and borrowed our savings, and that's where the capitalization came from. Years later there was a little bit of problem down in California with the Kaiser Steel, and they needed a few dollars. So what did they do? They sold out for millions and millions of dollars to BCRIC — $550 million to BCRIC, the creation of our illustrious Premier.

It was the biggest shame, as far as I am concerned, on the face of that Adam Smith theory. We look at this day after day, time after time, and we say, we only ask you to do one thing: open your eyes; we're being taken to the cleaners.

Let's remember the United States after World War I particularly, and partly after World War II. Britain was on her knees. Did you see them make suggestions that would identify with what you are talking about? Not on your life. They got rid of the British equity in American industrial society as quickly as they could, because they had them in a real tight spot. We have welcomed that kind of stupidity.

They call us a saving nation. I blame your kind of government and our kind of financial institutions for keeping us away from equity. That is what has happened here. We don't have a chance to own our own economy, because we are open to those people who'll come in with their paper equity and borrow the operating capital from us, from our banks, from our life insurance companies, from our bloody trust companies.

MR. WILLIAMS: Pension fund.

MR. COCKE: And our pension fund. We are selling ourselves out. Adam Smith or no Adam Smith, if you don't recognize that, you and your government are the worst thing that is happening and can happen to the future of this province.

HON. MR. McGEER: Mr. Chairman, I have a memory that goes back a long way in this House. I can recall when the member for the Kootenays, Leo Nimsick, was up pleading for an increase in the subsidy to ship coal from the Kootenays to the coast. In those days — and this was before Kaiser came along — there used to be money going out of this provincial treasury to subsidize the shipment of coal, and it was all underground. I was here when Kaiser proposed making an open-pit mine in southeast British Columbia. What made that open-pit mine possible was the selling of coal to Japan, the obtaining of the contracts that justified an investment of hundreds of millions of dollars. I was here when there was monstrous opposition from people on the New Democratic side and the Vancouver Sun against this terrible development in the southeast that would despoil the environment. I recall when the late Gordon Shrum said that there are thousands of mountains in British Columbia and couldn't we please just have one for industry. Now there are — what is it? — 4,000-plus workers in the southeast coal of British Columbia; none of them are subsidized; nobody is working underground. It's one of the biggest industries of British Columbia, and you're knocking the capital that made that development possible.

Interjections.

HON. MR. McGEER: All right, if you want to say BCRIC was suckered, you don't have to be very bright to recognize that. BCRIC made a series of disastrous investments. If we'd had the brilliance of the members opposite, probably there would have been no difficulty at all. But don't blame that on Kaiser. Don't blame that on the people who brought risk capital in and turned a coal industry that was subsidized in this province.

What is your proposal? The proposal of the member opposite is that we bring no risk capital in from outside of British Columbia. His proposal is that we put in foreign exchange controls. If it isn't his proposal, it's the member for Vancouver East. Then you claim somebody over on this side of the House is muddled. Where are you going to get the capital? Of course you're going to get it by asking investors from British Columbia to invest, like the successor to BCRIC. Is that your proposal? Certainly if you were in power there would be the biggest flight of capital out of British Columbia in the history of the province.

MR. D'ARCY: Mr. Chairman, in listening to this debate this morning, I have the feeling that the minister is using yesterday's rhetoric to fight yesterday's battles. The fact is, private investment in this province under this government, and under his ministry, continues to fall while it rises everywhere else in Canada. The fact is that the mining industry in particular is suffering from his government's royalties on electricity like it has never suffered from royalties of any government before, and I hope never suffers again. Yet he is doing nothing about it.

He wants to talk about the mining industry in 1972-75. How many mines have closed in the last few years, in part due to low commodity prices but in major part due to the highest royalties and taxes, under his Social Credit government, ever been seen in this province? He wants to talk about capital

[ Page 8648 ]

investment, risk capital, private capital. The growth of private capital in this province was higher in 1974 than in any year before or since. It was higher than the Canadian average, and even in the recession year of 1975 there was real growth in British Columbia, even though there was a decline in the rest of Canada. What's happened since 1981 under this Social Credit government? There has been a fall in gross provincial output at the same time that the rest of Canada has recovered. What we used to have in the past, even under Social Credit governments, was that the B.C. economy outperformed in real terms. The Canadian average under this Social Credit government has outperformed British Columbia consistently. What nonsense to hear this minister talk about the strength in the B.C. economy under the present Social Credit government! They are a disaster. They have driven capital investment away from this province.

What have they done to shore it up? They have borrowed and borrowed and borrowed and put this province from $4 billion in debt to nearly $20 billion in debt. What did they do it in? They borrowed hundreds and hundreds of millions of dollars in U.S. funds in the late 1970s when the Canadian dollar was worth more than the U.S. dollar. Then the Canadian dollar dropped to 72 cents and they left a legacy for the taxpayers of this province, and their children and their grandchildren and their great-grandchildren, to pay off those billions of dollars of debt in U.S. funds.

[11:45]

Even then, they borrowed that money and sank it into the B.C. economy on some crackpot schemes. Even then, investment continued to fall in total terms. W.A.C. Bennett didn't need to do that to make the economy grow. Dave Barrett didn't need to do it. But you guys have needed to do it, and you're still doing it. You're still borrowing, and private investment is still falling in British Columbia relative to the rest of Canada. In fact, it's falling compared to last year, period. And the minister wants to get up and tell us about the sixties and the early seventies, and the fifties for all I know. Maybe he's even talking about the 1850s. I wish the minister would deal with 1986. Why doesn't he deal with the economy in 1986 and show us some initiatives? Because their policies are being disproved every time Stats Canada puts out an economic growth bulletin. Every time Stats Canada puts out a statement on private investment in British Columbia, their policies are discredited.

Mr. Chairman, I don't want to fight the battles of the past or use the rhetoric of the past. I wish the minister and his government would get off their rhetorical hobby-horses and start doing something for the province of British Columbia so we can rejoin Canada and North America in the economic recovery that's happening everywhere else except in British Columbia.

MR. WILLIAMS: Well, we got some plain talking from the minister just a few minutes ago, Mr. Chairman, and I would like to just make sure that everybody realizes what the minister said, and I appreciate that little bit of plain talking that we got just a few minutes ago. What this minister said was: "Of course BCRIC was suckered in in terms of acquiring the Kaiser coal interests." Now I expect the Vancouver Sun, his favourite newspaper, to have a headline tomorrow: "Of Course BCRIC was Suckered in, " in terms of buying the southeast coal fields. Well, yes, we agree, BCRIC was suckered in, but it was your creation, your boss's creation, your administration's creation. Edgar walked away with $500 million out of that whole exercise of suckering in BCRIC. The management that was put in place and still is the residual of your creation of that outfit is still in place. We now all bear the burden of that in terms of the British Columbia Resources Investment Corporation. Indeed they were suckered in. You agree, I agree, we agree: they were suckered in. That was a $500 million loss to the provincial economy: $500 million that should have been ploughed back into the British Columbia economy. Instead it went to repairing old steel mills in Fontana, California — another chunk of the Kaiser interests — and elsewhere. And BCRIC foolishly carried on into the North Sea, and we now bear the burden of that with a $75 million loan to bail out this monstrous corporation that is floundering in debt, the worst debt-equity ratio in the province.

So I'd like to commend the minister for his little bit of plain talking that we got just a few minutes ago. Indeed BCRIC was suckered in; we were all suckered in, and we're all paying the price.

Vote 49 approved.

Vote 50: ministry operations, $14,546,387 — approved.

On vote 51: government telecommunication services, $10.

MR. WILLIAMS: I thought there was an error. That's what we should be paying the minister. That's about what he's worth.

Vote 51 approved.

Vote 52: science and technology, $7,785,000 — approved.

Vote 53: science and technology development subsidiary agreement (ERDA), $4,200,000 — approved.

Hon. Mr. Gardom moved the committee rise, report resolutions and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. GARDOM: Mr. Speaker, before I move that the House do now adjourn, it's just a lovely day; perhaps we could arrange to have Hansard in Beacon Hill Park this afternoon; but I suppose we couldn't do that, so that being the case, I move the House do now adjourn.

Motion approved.

The House adjourned at 11:51 a.m.