[ Page 3037 ]
Routine Proceedings
Oral Questions
Free trade agreement. Mr. Guno –– 3037
Mr. Miller
Mr. Harcourt
Mr. Williams
Mr. Rose
Presenting Petitions –– 3039
Miscellaneous Statutes Amendment Act (No. 5), 1987 (Bill 68). Third reading –– 3039
Forest Amendment Act (No. 2), 1987 (Bill 70). Second reading
Hon. Mr. Parker –– 3039
Mr. Miller –– 3040
Mr. Kempf –– 3041
Mr. Williams –– 3041
Mr. Gabelmann –– 3043
Hon. Mr. Parker –– 3044
Legislative Assembly Allowances And Pension Amendment Act, 1987 (Bill 69). Committee stage. (Hon. Mr. Veitch) –– 3045
Third reading
The House met at 2:11 p.m.
Prayers.
HON. MR. STRACHAN: I’d like the House to acknowledge that visiting with us today is a Prince George resident, now a student at the University of Victoria. Mr. Michael Podger. Would the House please give Michael a nice warm welcome.
MS. EDWARDS: I'd like the House to join me in welcoming a longtime friend of mine, a student at the University of British Columbia and a former resident of Cranbrook, Margaret Williams.
MR. WEISGERBER: It's my pleasure today to introduce to the House Mr. Perry Creighton, a former Dawson Creek resident now living in Victoria. Perry is not only a good friend, but a good banker as well. So please make him welcome.
HON. MRS. McCARTHY: I'm very pleased today to ask the House to welcome two gentleman from West Germany. We have visited their plant in West Germany. They are here to negotiate and to see about locating in British Columbia. This organization is very well known throughout the world, with a great history behind it and the family in aeronautics. They are looking at British Columbia because of the potential for a free trade agreement between the U.S, and Canada, and that is one of the things that have brought them to British Columbia. I would like to ask the House to welcome Mr. Camilo Dornier and Mr. Thomas Brandt, who are with the Claudius Dornier Seastar corporation.
MR. LOVICK: I notice some friends in the gallery. Visiting from Toronto, Ontario, is Miss Mary Sutherland; and from Nanaimo, two friends, Diana Pullinger and her daughter Jan Pullinger. I would ask the House to please join me in making them welcome.
Oral Questions
FREE TRADE AGREEMENT
MR. GUNO: My question is for the Premier. Atlantic Canada and Quebec fought for and won protection for east coast fish processors in the Mulroney trade deal. Why didn't the Premier think it was important to do the same for B.C.?
[2:15]
HON. MR. VANDER ZALM: Mr. Speaker, the Atlantic Canada fisheries were not subjected to a GATT ruling. The GATT ruling is being appealed, obviously, but until it has been dealt with, I'm advised by the federal government that it can't be dealt with in the agreement. However, if the GATT ruling is dealt with and dealt with favourably, as we hope it will be, then obviously it will be treated just as though it were the same as the Atlantic fisheries. If not, we'll need to devise another approach to this. We're working very closely with the federal government to that end, and we're sure that we have several options available to us. I can't discuss them now because they're still in the negotiating stages with the federal government, but I'm very pleased with the way things are going.
MR. MILLER: A question to the Premier on the same topic. Your Minister of Agriculture (Hon. Mr. Savage), in a letter of November 30, 1987, to the Minister of Fisheries of Canada, says that the free trade agreement makes it impossible to put in place alternative measures such as an export tax or a requirement for a Canadian landing. In view of that, why would you support the free trade agreement?
HON. MR. VANDER ZALM: I'll defer to the Minister of Agriculture to provide a response to the contents of the letter.
MR. MILLER: A new question to the Premier. Your Minister of Agriculture, in his letter, says that the best solution to the problem is direct negotiations with the United States. Do you agree with that, and what steps have you taken to get that process underway'
HON. MR. VANDER ZALM: I can't answer that, Mr. Speaker, because as I mentioned a little earlier, we are in effect working with the U.S., but as the hon. member should know, we can't work directly with Washington. In our federal system we work with Washington through Ottawa.
MR. MILLER: Mr. Premier, we rang the alarm bells on this back in July. Your Minister of Agriculture is obviously very concerned, judging by the letter he sent to Mr. Siddon. Where were you? Did you leave it to your Minister of Agriculture to carry the ball on this issue? Did you not write letters? Did you not go back and demand protection for B.C. fish?
HON. MR. VANDER ZALM: As a matter of fact, it feels to me as though it is about once a week that I'm visiting Ottawa. There are enough meetings, and there are many discussions taking place, and I represent the province at the table each and every time, and all of these issues are discussed at length. However, as I mentioned previously, these discussions going on now between us and the federal government, involving at some point Washington.... I'll make this information available as soon as I can, but while these discussions are being held, I can't make that information available.
MR. MILLER: Mr. Premier, the document is clear. Five or six provinces got protection; you didn't. Your Minister of Agriculture says that 6,300 processing jobs are at risk. You know, there's an old expression in the fishing industry: "It's time to fish or cut bait." You're going back east today. Are you going to go back and sell out the B.C. industry, or are you going to go back and take a strong stand and, as your minister says, reassess B.C.'s position in light of the free trade agreement?
HON. MR. VANDER ZALM: I certainly will be raising that issue and other issues of concern, but I can again assure the hon. members opposite that we are very much in support of free trade and what it means to the future of our province, what it means to new industry establishing here, and what it means to people having employment opportunities available to them in a diversity of ways.
[ Page 3038 ]
MR. HARCOURT: I have a question for the Premier. Mr. Premier, you're going back tomorrow to Ottawa. I'd like to ask you a very simple question: have you read this free trade agreement yet? You hadn't on Friday. Have you read it yet?
HON. MR. VANDER ZALM: I'm going to Ottawa this afternoon because the meeting is being held very early tomorrow morning. So I'm going to have to leave this afternoon. I have gone through most of the material, and I will be finishing all of this material while flying to Ottawa. I won't be sleeping on the plane. I'll be finishing it up; I'll be going through it again; plus we've had our other people, our experts, the people who worked with this on a regular basis, reviewing it in Ottawa during the last weekend, and there will be briefing notes available from them too. I can assure the member opposite that I'll have no difficulty with the information, and I'm aware of the agreement, and it has been gone over in a variety of ways. But I'll be reviewing all of the details once again during the five-hour flight to Ottawa.
MR. HARCOURT: The Premier has said he was too busy filming his video yesterday at Fantasy Gardens to read it. I'm glad he is going to read it on the plane.
Yesterday the Minister of Economic Development and trade (Hon. Mrs. McCarthy) couldn't answer my question that future Crown corporations under this agreement had to be approved by the Americans. She said: "I don't know." Could the Premier answer yes or no: do we have to get American approval to set up new Crown corporations under this agreement?
HON. MR. VANDER ZALM: For the member, yesterday I spent eight hours minimum reviewing the material. It obviously had just been made available. There is a lot of material there.
Incidentally, I recall when the first information about free trade came back from Ottawa some three weeks ago. The day it arrived you were doing your Christmas shopping in Seattle.
No, we'll not need permission from the U.S.A. in order to establish Crown corporations.
HON. MRS. McCARTHY: Mr. Speaker, I would just like to make the point of order that the Leader of the Opposition attributes to me that I did not know the answer to the question. I took the question as notice, and I do have the technical answer today. The Premier has answered it generally, and the Premier's answer is absolutely correct.
MR. WILLIAMS: Mr. Speaker, article 1203(c) provides exceptions to the following provinces regarding fish-processing: New Brunswick, Newfoundland, Nova Scotia, P.E.I, and Quebec. Did you not notice that when you reviewed this pact initially? Did it not ring any bells that British Columbia at the very least should have equal protection?
HON. MR. VANDER ZALM: Mr. Speaker, I have already answered that question.
MR. WILLIAMS: On November 30, your minister responsible for fisheries wrote the federal Minister of Fisheries indicating his concern and that British Columbia might well have to reconsider the whole agreement because of the disastrous impact on 6,300 workers in B.C. Did it ever register with you, Mr. Premier, when this pact was opened up again by the Americans when Simon Reisman was renegotiating with the Americans regarding the maritime rules and trucking rules, that it was the last golden opportunity to save these jobs in British Columbia?
HON. MR. VANDER ZALM: Again, I've already answered that. I will be discussing it again, but let me point out once more that we are faced with a GATT ruling on the Pacific Coast, and that GATT ruling is not applicable on the east coast for the Maritimes. So the situation is a little different. I've spoken to the minister responsible for international trade in Ottawa and asked to get more details with respect to GATT and how it's proceeding following the earlier discussions as to how we approach this particular problem, which is of concern to us. I know I'll be getting that information later today or early tomorrow morning as well. So there will be another opportunity to review the material later today as well as tomorrow morning.
MR. WILLIAMS: Your Minister of Agriculture said very clearly that the optimal solution was direct negotiations with the Americans, which is what the bilateral agreement is. Don't give us the alphabet soup routine about GATT. That is simply a red herring, if you'll forgive the pun. It doesn't wash. Are you or aren't you going to say to Ottawa: "That's it. It's on the line. We want these jobs protected in British Columbia. We want equal treatment with the Maritimes"?
HON. MR. VANDER ZALM: Being the government — being people in a responsible position having to make a responsible decision — we'll not be approaching it that way, I can assure the member. We will be approaching it, but not the way the member of the opposition is suggesting, because I think we have to be responsible in this and consider the tremendous impact and the tremendous benefit to our province through the whole free trade agreement.
MR. ROSE: My question is also to the Premier. Yesterday — and I'm sorry to say this — we were treated to an appalling display of ignorance on the part of the government having to do with the details, the implications and the dangers associated with our way of life and our society in terms of jobs and all kinds of things. Even the Tory head of the committee that studied free trade on behalf of the federal House has said that unless we Canadians are specifically exempted from the protectionist laws in the United States, there's no deal. Does the minister support that same position'?
HON. MR. VANDER ZALM: Perhaps what needs to be remembered in all of this as well is that the opposition tends to be approaching this from the information provided them by the leader of the federal NDP in Oshawa, Ontario. I think that all the comments I've heard from the provincial NDP reflect an Ontario attitude, which is no doubt a part of the information you're being fed by your federal Ontario counterparts.
Frankly, I have no difficulty with the agreement. As suggested, there may be things that we would like to be different, and we're still going to be talking about some of those things. On the other hand, we are not so blind as to view this from only an Oshawa, Ontario, perspective that has been fed to the provincial NDP.
[ Page 3039 ]
MR. ROSE: Mr. Speaker, I don't know how many Pacific salmon there are swimming around Oshawa, but I don't think there are very many.
I got my information not from Ottawa but from British Columbia's vegetable industry, wine industry, insurance industry, fisheries industry and printing industry. So I'd like to ask the Premier, before he succumbs to any more Mulroney blarney: will he demand from the Prime Minister...? Because there are going to be winners — perhaps. We haven't heard who they are, but we know who the losers are. Will he demand a plan from the Prime Minister — before he puts any signature to this document — for how the losers are going to be looked after in terms of compensation?
HON. MR. VANDER ZALM: Again, Mr. Speaker, hopefully this agreement will see a benefit to all the people involved in it –– I don't think we're looking — as has been suggested by many — to some agreement which is totally of benefit to Canada and somehow counts out the other side, because there are remedies in the case that an agreement doesn't work. Frankly, I would hope that there's a benefit to the United States of America and to Canada both, and that people on both sides of the border will benefit tremendously from this agreement. We think that to be the case, and certainly that's how we'd like to see it work out in every respect.
That's not to say there won't be some situations on both sides of the border that might not need to be addressed in some fashion. I can't tell you now how it ought to be addressed. Certainly that will take a lot of work, both from the provinces and the federal government. I'm not out seeking some formula that somehow provides taxpayers' money to everybody who suffers a setback of whatever dimension. I think there needs to be reason in all of this too. We're not into some sort of new welfare program that says,"If you can't cut the mustard" — even though it isn't the fault of any agreement, but it may be somewhere else — "then somehow there will be these big cash payments made." I do believe, however, that we need to work out an equitable approach. I've already assured the grape growers.... Incidentally, the wine industry isn't feeling too bad about this. I think you must have meant the grape growers.
[2:30]
MR. ROSE: Both.
HON. MR. VANDER ZALM: Well, the wine industry — I've met with them, and certainly I think they can live without government telling them how to make wine. They'll get by fairly well. But the grape growers, on the other hand, do have a problem, and we want to see that addressed fairly. We want to make sure that the grape growers in the Okanagan continue to get the help they require and what's due them from the banks. We're going to keep that industry in the Okanagan. As a matter of fact, we're going to make it grow more in the Okanagan.
Presenting Petitions
MR. LOVICK: Pursuant to standing order 73, I wish to present a petition. I'm presenting a petition on behalf of some 160 residents in the Grassy Plains area in the central interior of the province. These are people affected directly by the inland ferry system, specifically the Francois Lake ferry.
These individuals are very concerned about the proposal, in the name of privatization, to perhaps impose user fees on that ferry service for the first time in 70 years. Their petition, therefore, does two things: one, it registers their protest against the imposition of user fees; and, second, it requests that the existing level of services on the Francois Lake run should be maintained.
I might add to that, Mr. Speaker, that the individuals in that remote community would, if nothing else, at least like to be consulted by government. They feel they have not been given that opportunity thus far.
My petition, Mr. Speaker.
Orders of the Day
HON. MR. STRACHAN: Mr. Speaker, I call report on Bill 68.
MISCELLANEOUS STATUTES
AMENDMENT ACT (No. 5), 1987
Bill 68 read a third time and passed.
HON. MR. STRACHAN: Mr. Speaker, I call second reading of Bill 70.
FOREST AMENDMENT ACT (No. 2), 1987
HON. MR. PARKER: I rise to speak in support of Bill 70, Forest Amendment Act (No. 2), 1987.
The amendments introduced reflect the fundamental changes we have made in the way we manage and renew our forests in our province. We have undertaken these measures for three reasons. First, we have a tremendous forest resource, which must be managed effectively and efficiently for the long run. Second, we have a strong and innovative forest industry that can and must take on more responsibilities. Third, because our forest industry, in response to world market conditions, has worked hard in the past two years to increase efficiency, we have lost thousands of jobs, partly due to automation; therefore we must take steps to restore employment in the forest sector.
Mr. Speaker, I would now like to talk about the initiative we have taken, which has prompted the introduction of amendments to the Forest Act. The amendments we have introduced to the Forest Act will make basic silviculture mandatory. This will be accomplished by making pre-harvest silviculture planning mandatory, and enforcing silvicultural performance and its auditing. It will achieve our major goal of balancing harvesting and forest renewal, which we call the steady state. Previous ministry silviculture programs had two major facets: namely, basic and intensive silviculture. Mr. Speaker, we have also initiated a basic shift — from the government to the companies harvesting our timber — in the cost and responsibility for ensuring that our harvested lands are reforested.
By these amendments to the Forest Act, we are strengthening and securing this move. Previously the costs of basic silviculture were credited to the stumpage accounts. Now our forest industry will assume the full costs for the basic silviculture to replace our forests after harvesting on long-term tenures. Our industry will accomplish these major goals.
As I said earlier, the industry is strong and innovative. In addition, they have the professional foresters and qualified
[ Page 3040 ]
technicians to get the work done. The scope of this work is such that much of the field work will be done by our growing silviculture contract community. This will significantly increase employment and offset the increases in automation in the forest industry.
Many members of this House are familiar with the work of planting seedlings. Not only will this work be done, but also all the other steps necessary for forest renewal. As a forester, I am proud to say that this will include seed collection, which ensures that the right seedlings will be grown; the preparation of sites for both natural regeneration or planting; and the protection of these plantations by controlling encroaching vegetation.
The great majority of seedlings required will be grown in the private sector, and industry will thus have the option of producing its own seedlings. Our goal is the production of healthy, free-growing stands of trees, which will support the future industry and provide forests for livestock, wildlife and recreation enjoyment by the public.
Where timber is harvested under short-term licences, especially under our small business enterprise program, we've recognized that it would be unreasonable to expect licensees to be responsible for all of the silvicultural treatments. Our ministry will share in this responsibility. These licensees, however, will still have to pay their way. We will not subsidize them.
The full cost of basic silviculture will be required before the timber is sold. We will hold funds to ensure that the full basic silvicultural renewal process is accomplished. The work on these short-term licences, particularly those under the small business enterprise program, will be administered by my ministry staff. Practically all of the field work will be contracted to the private silviculture industry. This will further add to the creation of new jobs.
We will encourage industry to invest additional money to carry out more incremental silviculture on long-term tenures. We will guarantee that any increase in allowable annual cut from industry investments in incremental silviculture will be retained with the long-term tenures. On the other hand, where government invests additional money, British Columbians will share in any increased forest yield.
With the amendments to the Forest Act, we are confident we are on the right track and that our actions will ensure that our forest resources will continue to meet the needs of future generations of British Columbians.
MR. MILLER: I'll be relatively brief in my remarks today on second reading. We intend to support the bill. We think the moves by the government are overdue, and I'll actually congratulate the minister: I think they make a lot of sense.
We do have some specific concerns, and we will be discussing some of these in committee, in clause-by-clause debate. Certainly, as I mentioned yesterday, the changes that are coming about in British Columbia are overdue. It's unfortunate that they have come about primarily, I think, because of the push by the U. S. producers, who reacted to the increasing share of the market that was being taken by British Columbia producers.
It's a bit hard to swallow on this side of the House — and I'm sure it is for members over there as well — that we now are really in the untenable position where policy is really made in the U.S.A. They might make some things well down there, but I'm not sure that they're all that good at making our forest policy.
The major thrust of the bill, as the minister said, is to put the responsibility for basic silviculture to major licence holders and to offer an incentive in terms of the company being able to recapture the value of incremental silviculture. It's not a bad approach in that term.
We do have a concern in terms of the ministry. Obviously, with a change of this magnitude we're going to see a requirement for fairly extensive and accurate monitoring. We wonder if the ministry staff is up to the appropriate level to make sure that that kind of function can be carried out, because as much as the bill is a good move on paper, it's really in practice where we discover whether or not we're making the right moves. Will the bill work in practice? Are we up to speed in terms of the staff to monitor and do the audits required so that the silviculture work done is not the kind that will fail? If fundamental mistakes are made in the first instance in terms of silviculture, as the minister knows, mistakes which may not be discovered for some years, all that work really is a loss. That's a very important feature of the bill, and I would be interested in the minister's comments with regard to the ability of current staff of the ministry to do the monitoring and auditing that is required in order to make sure that the bill works.
The impact of the changes.... Of course, there will be more changes coming. There's been a substantial change in terms of the revenue, and I would just touch on that in this debate, because I think that they do all tie together ultimately. The change there from a market-driven system to a revenue target system, I suppose, is obviously causing some discomfort in some areas of the province. Some of the producers are saying that it's going to be hard to live with, if not impossible. Perhaps the minister could comment, either now or in committee, about how the ministry has dealt with that problem.
We've had a forest industry that for a good number of years has really not had the responsibility and the obligation in terms of management or supplying revenue to the province, and now all of a sudden, very quickly, we're saying: "It's now yours." We're throwing the ball to them and giving them what should properly be their responsibility, but I'm wondering about the ability of some sectors of the industry to assume that responsibility, and whether there's been any kind of analysis on the minister's part of the impact particularly on the small producers. Obviously with the revenue figures that are coming in for the integrated companies with pulp mills, one would assume that it would not be a major problem for that sector of the industry, but some of the smaller sectors could experience a fair amount of difficulty. We have seen threats from some that they intend to close down.
I raise as an aside an interesting question in terms of a revenue target. If the target is in place and operators stop working, is the target still there? Will the target be adjusted, or will the rest of the producers still operating have to pick up the whole of the target that's been set for the region?
[2:45]
One of the problems that the small producers have — the non-integrated companies — and clearly the reason we changed from a market system in calculation of stumpage, was that there was pretty overwhelming evidence that the market was a false one. It was controlled. It was unrealistic to derive our revenue figures from a market that was controlled by the major players. I suppose over the years alternatives
[ Page 3041 ]
have been offered. One, of course, is the concept of a government agency that becomes the marketing agency for logs. Obviously the government is not accepting that and has decided to go with a strictly revenue-target system. But it still leaves the small producers somewhat at the mercy of the big companies in terms of price for the material that they produce. I'm thinking particularly of chips. Nilsson, in his report of a few years ago, indicated that he thought chips were about 50 percent undervalued. Of course, without having done a great deal of work on it, it occurs to me that there may be an opportunity for the small lumber producers to recapture a bit more value in sales to the pulp industry, and that is in some regulation of the price of chips.
Just recently we've seen Fibreco complain publicly that although they welcomed the recent announcement of Japanese investment in the Howe Sound pulp mill and the diversion of chips that previously were going on the export market, their real complaint was that the pulp mills set the price for chips, and they were getting a heck of a lot better price on the export market, and they were really going to lose a lot by that kind of change. I'll throw that into the discussion because it's something I want to pursue.
Next, the question of the rollovers comes in. I think in section 5 of the bill there is a clause that allows discussion on the concept of rolling over.
MR. ROSE: Logrolling?
MR. MILLER: No, it's not logrolling, as my colleague from the lower mainland or the Fraser Valley has suggested. It's rolling over a forest licence to a tree-farm licence, and it's an integral part of the new forest policy. We will resist that because we think there's a significant value in the Crowns, and we're not satisfied that it would be a good move to transfer that value to private companies, particularly given the level of corporate concentration that exists in the forest industry in British Columbia and which appears to be growing. Two recent moves back up that contention, I believe. That will be a section that we will be discussing in committee.
There's the question of the backlog. If the bill works — again in theory — from October forward the industry will assume their proper responsibility and obligation for silviculture, and we will presumably not develop any further NSR lands in British Columbia. But we still have the problem of NSR lands that were created previous to October, and I believe they're still significant. We've seen a little more than two and a half years of the federal-provincial program called FRDA; $300 million over five years to try to deal with the NSR problem. Not completely NSR; I note that a lot of money from that program has gone into some research and development areas, and I think that's good; but we still have, in my opinion, further problems to deal with in terms of the NSR question. Of course, the minister will have to detail how he intends to handle that problem so that those lands are put back into production and will be of value in the future in B.C.
I had a pamphlet here which I can't locate, but as I recall, one of the studies done under the FRDA program was an analysis or study of the possibilities of increasing value through incremental silviculture. I would like the minister to give some kind of outline of what they foresee. Clearly, I would think the incremental silviculture angle in the bill would direct investment to the best sites in British Columbia. Do we know what is possible? Are we going to increase production by 5, 10, 15, 50 percent? What kind of increased production could we see as a result of that move?
I think I've pretty well canvassed most of my areas of concern with regard to the bill and its intent, so I will leave it at that for now. Some of my colleagues may also wish to make comments under second reading.
MR. KEMPF: I too am going to be very brief in speaking in favour of this particular bill. It's a bill that's long, long overdue in British Columbia, and I commend the minister for seeing a policy through which was spawned some months ago. I thank him for that.
The multinationals have been ripping off this province for decades, and this is just one way. I speak in favour of Bill 70 in hopes that there will be another Forest Amendment Act, a No. 3, a 4, 5, 6, 7, however many we need to assure the people of British Columbia of their fair share from the forest resource, which has not been the case for many decades. It's one of the reasons that this province finds itself in a deficit position today. We need far more changes than we see in Bill 70, but it's a start — and it's a good start.
We talk about rolling over. The previous speaker joked about rolling over. We've rolled over to the multinationals in the forest industry for 40 or 50 years, and this is a bit of light at the end of the tunnel that possibly it might change. I think some of us in this Legislature are going to stay around here for a long time to make sure that it is changed.
I have one not so small concern. The member before me talked about NSR lands. Are we going to let the people who created those NSR lands off the hook? On behalf of the taxpayers of this province, we had better not. You have literally thousands of hectares of NSR lands in this province created by that giant industry out there, and it's their responsibility, Mr. Minister, to make that good to the people of British Columbia; to ensure not only that they assume from this day on their rightful responsibility of reforestation and silviculture in this province, but also to assure the taxpayer of this province that he or she is not going to pick up the bill for what they have done wrong in the past. We will be watching that very closely in this Legislature as well. Because a wrong has been done to the people of this province, and it has to be righted.
The other concern I have is for close scrutiny of what's going to go on as far as those multinational companies out there doing a good job, a perfect job, of replenishing our forests. That has to be very closely scrutinized. It cannot be left to the registered foresters on the payrolls of those corporations. You can't leave it to them, because although they are professional people — and in many cases very good ones — they are on payroll. Mr. Minister, I just want to remind you of that. It can't be left just to the registered foresters on the payroll of the multinational monopoly in this province to ensure that the job's going to be done right. That's a concern of mine.
Other than those two concerns, I'll leave further debate for the Forest Amendment Act No. 3 and 4 and 5, which surely must come to this Legislature.
MR. WILLIAMS: I'd like to endorse what the member for Prince Rupert has said. It has been my personal feeling for some time that the silviculture obligation should be the primary obligation right from the beginning, in terms of any harvesting activity.
[ Page 3042 ]
The Scandinavians, I think, have set the right tone in the modern era in that regard. The first call for any funds out of logging or cutting is that moral obligation to replant and to treat the land properly. We on this side of the House are encouraged to see that this administration is beginning to take the tack that the Scandinavians have set for generations. It's long overdue, but it's good news.
There's a whole range of questions that I suspect will be brought forward in terms of additional legislation once the ministry has done some additional work. I would expect additional legislation in the next sitting. Maybe the minister could comment on that. The whole 5-percent question, in terms of the AAC, where there are transfers, is important and is a beginning in terms of starting to rejuvenate the industry and properly beginning a reallocation process so that newcomers in the — industry will have some opportunity and so that we get more of the competitive enterprise in this industry, which has desperately lacked it in the modem era. It is maybe in some ways our greatest weakness as an economy in this province: the inadequate entrepreneurship in this sector at some levels. And the reversion of some of the AAC can be the beginnings of refuelling the entrepreneurship desperately needed in this industry.
So it begs the question about Canfor, Mr. Minister, and the proposal with respect to Port Mellon. I guess we might get some assurance that there will be reductions and reallocations there, since indeed it will be a new corporation. I would hope we would get the same assurance with respect to B.C. Forest Products, which is indeed a new corporation, with the further acquisition by Crown Forest Industries of that entity. And that will begin this renewal process.
So we're not only looking for renewal in the forests in terms of basic silviculture, but for renewal of entrepreneurship among small — or smaller — people within the industry and newcomers who want to begin in this part of the economy. In a sense, however, basic silviculture is just a beginning, as the minister knows.
Again, the Scandinavians have shown us that something significantly more than basic silviculture should be the goal. Thirty-five percent of the cut in Sweden comes from commercial thinnings — obviously a much more intensive practice in terms of real forest farming in that part of the world. We get virtually nothing out of thinnings in British Columbia. So clearly there is tremendous wealth to be tapped for the people of the province by moving beyond basic silvicultural practice.
It's clear in the legislation that a basic silvicultural plan is not necessary before a TFL is granted — as we read the document. If there is this kind of commitment to silviculture and reforestation, then we think that should be there right from the beginning, before these tremendous alienations are entertained. That's not to say that we favour those alienations, however.
Incremental silviculture. As we see it, new targets are needed. It's not clear in the legislation where the old NSR stuff stands in terms of existing licence-holders. Surely that should be their obligation, in terms of cleaning up the mess they're responsible for. Especially in the northwest one would anticipate that that would indeed be the case for companies such as Westar, who have sold off some of their industrial assets and yet still have TFLs — which I think is extraordinary.
[3:00]
The whole justification for these TFLs in the first place was, in effect, the asset behind the pulp mill or the new plant. Just think of Celgar at Castlegar in the southeastern interior. By and large they maintain their TFL, and the pulp mill is not owned by them. It is owned half by Consolidated-Bathurst and half by the People's Republic of China, and I think it's being managed far better than it was under Westar. In fact, they're operating fine as an independent pulp mill, buying freely in the open market. It blows to the wind all of the arguments about needing these tenures to have the industrial plant.
I talked to the operating people last spring at Celgar and said: "Well, how are you doing for wood supply there now that you no longer have the TFL? They said: "We've never been better off." "Where do you get your raw material?" They said: "We're getting 80 percent of it in the form of residuals and chips from small enterprises and mills in the region, 10 percent in roundwood we're buying on the open market, and only 10 percent from the old TFL in the form of roundwood. It blows to the wind all of the arguments about needing these tenures in order to have an industrial plant. So are the old NSR obligations going to remain with those licence-holders?
Regarding section 88, I am sure the member for Omineca (Mr. Kempf) and others here are pleased that to a great extent it is eliminated. It is not clear in terms of the road question, and maybe the minister could clarify that. Are there still opportunities in terms of tapping Crown funds, in terms of system roads and that kind of thing? It would appear that there may be that kind of opportunity there. It's not clear.
We are concerned in a fundamental way about the idea of expanding the tree-farm licence system. We are not convinced by the industry's propaganda that this is the ultimate tenure form and the best managed. I urge the minister and his staff to look at studies carried out over the last summer by people at UBC under Professor Haley. They looked at the TFL tenure question to determine whether TFLs were better managed. It's my understanding that they don't think the propaganda really stands up to scrutiny. I think they found as a result of their analysis that the private lands within the TFL were intensely managed very well, but that the Crown lands within the TFL were, by and large, not managed as well. So I think you should look twice at this TFL question.
You should think about what's happened on the coast and in the interior, and the recent modem history, I think, is clear. The more successful industrial plant in British Columbia is in the interior. Our sawmills in the north central interior are setting lumber price for North America because of the levels of efficiency achieved. If there is any linkage to the tenure system — and I think there is — and the historic modem tenure system, where third band wood was reallocated on the basis of efficiency in the interior, then there are some real lessons there: that is, they responded to the carrot and the opportunities that were provided under the legislation of the day and became more efficient. They did not have the full security tenure that the TFL represented. The people on the coast have those tenures, and they let their plants decline.
Some of the big companies were involved in adventures in the Far East, South America and France that were quite unproductive and unfortunate for those corporations. In the interior, they stuck to their homework in terms of the stuff they knew best. They had that challenge and nagging problem of not really being fully sure about their cut and the cutting rights that were based on performance. If you look at
[ Page 3043 ]
it closely and think about it, that has clearly been beneficial for the industry in the interior. What you're proposing in your new policies is to move this blanket system, which has failed in several measurable ways in terms of the evolution of the industrial structure, from the coast into the interior so that they would be able to play the same game. We don't see that as beneficial. We think you should look seriously at it and review the history of expenditure and efficiency of plant. Compare the coast with the interior and look at the tenure behind those things. We think there are some very good lessons that should not be ignored.
We also think there's some evidence there out of South Moresby: that when you want those tenures back — part of them at least — for other purposes or other public needs, you run into the compensation problem. We pay dearly then for what is ours, and that doesn't make sound policy sense to us on this side of the House. We see it as the wrong direction in terms of protecting the public interest. If you want a more efficient industrial structure, you should look at the history of the tenure system in the interior and stick to it more closely. Think twice about giving them the excessive privilege that the industry has had on the coast, which has not been beneficial for them, the economy or the workers.
In terms of the primary focus of the legislation in the silvicultural area, we're encouraged. We think it's a decent beginning in terms of beginning to recognize the kind of direction that the Scandinavians have set for some time, and for that we're encouraged.
MR. GABELMANN: If it takes having a professional forester as the Minister of Forests to bring in legislation like this, I suppose the next minister should be an economist so that we can get on with the rest of the very serious issues out there in forestry. I'm delighted that this minister, this professional forester, has put the priority on silviculture in the way that he has in this legislation, even if it was spawned by the countervail and the needs of the Americans.
I want to raise a couple of concerns. Most of the issues that I had noted to raise are either best raised in committee stage or have already been raised. I just want to touch on a couple of others that I'm not clear enough about in my own mind, although other members of the House may be. The announcement in September about the 5 percent scoop effective January 1, 1988, seems to me to require a legislative initiative. If I'm correct about that, then does that take place on January 1? If it doesn't, how are the effects of this legislation measured in those TFLs, which may well be reduced by at least 5 percent, or maybe more in some cases if other proposals are presented? Maybe other members do understand how that will work, but I don't see how the transition is going to occur in respect of that scoop.
[Mr. Pelton in the chair.]
It's my understanding that in the period from fall of '82 to fall of '87, there's about $400 million worth of undone silviculture. When members talk about the NSR and the continuing slippage in terms of keeping up with silviculture, a lot of us think about the bad old days and forget that those bad old days have continued right through until this legislation. In fact, they continue today; we constantly appear to be slipping back. I wonder if the suggestion that I'm making — that there is some $400 million worth of backlog in that five year period — is accurate. If it is, how will that money be recouped? That point has been made in a different way by other members preceding me.
I wonder what the impact of this legislation will be on the FRDA and the subsequent FRDA II, as the jargon has it. Is there an impact for silviculture in terms of negotiations about that particular revenue source? In short, how do we recoup the shortfall of the last five years? Because this legislation doesn't do that.
In addition to that, there is a more narrow point. In this transition period, seedlings — and I know seedlings are only one part of silviculture — are clearly in place. The number that can be planted.... You can't add to that now; you've got your number and that can't change. It can be reduced with calamities, but it can't be added to in dramatic terms. What happens if the requirements under this program for next year are such that insufficient seedlings are available? It seems to me that there are a lot of other transitional questions if this legislation is made into law in the next weeks, in terms of getting the silvicultural program into full effect, certainly in the first year.
The other and final point relates to management of the silvicultural activity — maybe "scrutiny" of that activity is a better word. Under the legislation, we are now going to have a series of so-called major licences, which I find a bit of a curious term, because some of these major licences may be a few dozen hectares in a woodlot. Quite a minor licence, actually; nevertheless. It will be called a major licence. All of these "major licence-holders" will be responsible for filing their silviculture plan in advance of harvesting. Who will be scrutinizing this?
The policy of the previous two ministers was that in the TFLs the scrutiny would no longer be in the hands of the Forest Service, but that there would be an audit approach. I wonder if that audit approach is still envisioned by the government. If so, I just want to say that, like the member for Omineca (Mr. Kempf), I don't have a lot of confidence in that particular approach. I think, as he said, that we have some excellent professional foresters working for private companies. But no matter how committed they are to their professional association and their professional ethics and their own commitment to silviculture and forestry, in the final analysis they get a pay cheque, they don't have union protection, and they can lose their job if they are too zealous. An audit isn't going to catch the day-to-day things that these foresters are going to catch.
Outside of the TFLs, in the other "major licences" there is no ability for internal management. Your typical woodlot licence-holder or forest licence-holder is not going to have professional foresters on-site. Who does that? Will ministry staff be augmented in order to provide solid public protection for the implementation of this legislation, not just in the filing of the silvicultural plan prior to harvesting but in the actual implementation of that plan?
Who is going to deal with the detailed work of measuring the incremental forestry or the incremental silviculture? I guess that word replaces the old intensive forestry, and that's fine; I think there's some logic to the different terminology. Who's going to measure that? It seems to me that it becomes a fairly technical question, a very detailed question that requires intensive on-site scrutiny. There is now going to be a whole series — at least six, if I read this correctly — of categories of licence that will have scrutiny applied to them. I wonder if the current Forests ministry staff is sufficient to do
[ Page 3044 ]
the kind of scrutiny of these provisions that would be necessary.
The minister's comments on those questions would be appropriate.
[3:15]
HON. MR. PARKER: I'll run through the points raised by the members opposite. I'd like to speak to the matter of whether or not the Ministry of Forests and Lands is capable of auditing the performance of licensees on Crown land. It's my opinion that it most certainly is. We operate with six regions, and we have 46 districts well staffed by competent personnel. It's about three dozen per district, some more and a few less. These people are quite capable of monitoring contractual obligations.
Touching on the stumpage question, the member for Prince Rupert (Mr. Miller).... It's not part of this bill, and I'm not sure.... I need your guidance, Mr. Speaker. Do we discuss it now or do we save it for.... ?
DEPUTY SPEAKER: This is second reading, Mr. Minister. We're talking about the general principles of the bill.
HON. MR. PARKER: The concern that the member for Prince Rupert had on stumpages.... I think his comment was that there was discomfort in some areas of the province. It's an empirical application of a new program that needs to be localized. We work with our regional and district staff and our licensees in these areas and address each of their concerns. There are some matters that need refinement, and we will be improving our field information on such things as merchantability factors and decay factors in standing timber and some of the things that go along with that, and the lumber recovery factors when it comes to manufacture. So, we'll continue to work with licensees and our staff to make sure that the stumpage program is effective, returns a fair revenue to the province and still keeps our industry healthy.
The silvicultural concerns that the member raised. He said that the sudden responsibility of having to look after basic silviculture came as a surprise and may be a little too onerous for some operators. The policy evolved from discussion papers put forth by the member for Omineca (Mr. Kempf) just a year ago, to which we received several hundred replies. This silvicultural policy was a result of the majority of the replies that we received. So it wasn't really a surprise to industry. In fact, a number of major multinational ripoff artists — apparently, as some people call them — were eager to take on the silvicultural responsibility, because they had been very thorough and effective in their silvicultural operations and wanted the opportunity to take it over in its entirety because they felt that they could better manage it.
The question of whether or not targets for stumpages would be adjusted when mills shut down.... The stumpage program is such that it's under constant review. Everything we do in the industry is under constant review. It doesn't matter whether you're the licensee or the licenser. It's a dynamic situation. Nothing stands still for very long. The stumpage program is constantly being reviewed, and no mills should ever have to shut down because of it.
Regulation of the price of chips may be a means to an end in some jurisdictions, but this government believes it should stay out of the marketplace and out of the industry.
FRDA is a forest resource development program that is set up between Ottawa and the provinces, and we have a very good share of it. We have $150 million from Ottawa, which we match with $150 million provincially over a five-year period, and we're halfway through the first stage of FRDA, which is addressing NSR areas prior to 1982. Many of those areas were found to be in the northeastern section of the province, largely due to substantial wildfires, but also due to substantial stands of aspen which were considered until lately to be non-commercial stands and looked upon by the Forest Service as opportunities for rehabilitation of white spruce and lodgepole pine stands. With the establishment of the Louisiana-Pacific oriented strand board plant in Dawson Creek, there is now a substantial market for aspen in the South Peace, and we have just held the hearings for PA 13 with interest in similar plants nearby. So now the aspen is an asset rather than a liability, and we'll have to be recalculating the NSR areas, so it looks like we won't have quite the backlog we all were led to believe.
Things are dynamic. That's what I was pointing out earlier: nothing stands still. I guess that's progress. It's good now, especially for the farmers in the northeast, because what they had was a substantial liability in trying to prepare land for grain crops. Now they have an asset, and they're not sure whether they should be raising grain crops or tree crops. So we'll be happy to help them raise tree crops.
Just to touch on the matter raised by the member for Omineca on NSR lands: prior to October 1, 1987, it was the licenser's responsibility to see that the timber crop was replaced. That was the policy in the legislation in place, and we intend to live up to our obligations and restock any such NSR lands, either under FRDA or, if they were subsequent to January 1, 1982, through provincial funds. Those who have contractual obligations of any sort will be expected to meet those obligations.
Again, the member for Omineca raised the point on whether effective scrutiny of the licensee's operations can be done. It's our intention to ensure that audit is done by the Forest Service, but for tree-farm licences they will also be audited by internal and external means — external from the licensee and the licenser. Every five years they have to go to public hearings and report progress. They have to report what they've accomplished in the past five years and what they intend to accomplish in the next five years. I would say that scrutiny is pretty thorough. It's an internal audit, a Forest Service audit and a public audit.
The first member for Vancouver East (Mr. Williams) likes to wave the Scandinavian flag in here, yet he finds that he's not in favour of TFLs. The success story in Sweden and other Scandinavian countries is the very high percentage of private land. So if the member is in favour of alienating Crown lands to fee simple, that might be one big option. He may achieve what he's seen in the Scandinavian countries. What we try to achieve is the same sort of commitment, but without alienation of the land, by going with the tree-farm licence tenure, which we are convinced is a well-performing tenure run by capable licensees with professional, well qualified staff.
Interjection.
HON. MR. PARKER: He says: "Check out Haley's work." I presume the member is referring to Dr. Haley of the University of British Columbia, who in one summer is in a position to pass judgment on years of very capable management by a number of professional people. I would say that
[ Page 3045 ]
after we've scrutinized the report and criticized it, we might be prepared to discuss it further.
To talk about the reductions in allowable annual cut due to Port Mellon and the announcements made by Canadian Forest Products Ltd., no, there won't be any reduction in AACs, because there are no licences involved in this announcement. All it is is hardware, and the commitment of substantial sums of money to improve the plant, its environmental impact and its productivity and product options.
The Port Mellon transaction is no change of ownership as far as licences are concerned. All Port Mellon is is a production plant. On the question on B.C. Forest Products, where there's a change of ownership in that Fletcher Challenge, through Crown Forest, has acquired more than 50 percent, yes, there is a recovery of 5 percent of the allowable cut and the licences involved there.
Again talking about the great crops of commercial thinnings that Sweden picks up.... As I mentioned earlier, Sweden is primarily private land, especially in the higher productive sites. In many cases that has been going on for 300 years — for 15, 16, 17 generations. We'll be able to report the same sort of progress.
Interjection.
HON. MR. PARKER: Well, you see, this country wasn't settled until a hundred years ago, my son. It takes a little while for a few people to figure that one out, but then, I understand the source of the comment.
Just to answer the question of the concern about the section 88 road matter, systems roads are not eligible for section 88, but if the road is to serve some other public purpose, incremental costs may be considered for section 88.
Just to touch on some of the items raised by the member for North Island (Mr. Gabelmann), the 5 percent scoop, I think he called it — the 5 percent recovery from all renewable tenures — will be implemented to be effective January 1, but will require legislation that we expect to deal with in the House early this spring.
[3:30]
A question from the member for North Island on what happens if there are insufficient seedlings a year down the road for the program that's envisaged. It's unlikely that that would happen. Our planning process is quite effective, but should it happen, there are several alternatives. One is to sow more for the following planting season, and all you lose is one year in an 80- to 120-year rotation — a very small impact. Another alternative is to look at more naturals and to look at what you can do to encourage natural restocking. You're asking what happens on those contingencies. That's the sort of thing that you can consider. Also consider broadcast seeding. That's not an effective use, though, of Crown assets. Seed is very difficult to accumulate. Frequently crops are seven or 12 years apart. So we are very careful with our seed. If we broadcast seed, we lose a lot to rodents and birds; it's very expensive critter feed. We propose not to broadcast seed in any situation.
Again, this member shared his concern with the House about whether adequate scrutiny will take place, and we've dealt with that issue.
As for incremental silvicultural activity and who will determine what the difference is between status quo and what incremental silviculture produces, the incremental silvicultural programs will have to be outlined in the preharvest prescriptions and in the management and working plans for the licences. It will be scrutinized by competent individuals and considered, once approved. Then it will be monitored both by licensee and licenser representatives, and it will be physically measured for any incremental values.
I believe, Mr. Speaker, I've covered the issues raised by the members opposite, so I now move second reading of the bill.
Motion approved.
Bill 70, Forest Amendment Act (No. 2), 1987, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
HON. MR. VEITCH: Committee on Bill 69.
LEGISLATIVE ASSEMBLY ALLOWANCES
AND PENSION AMENDMENT ACT, 1987
The House in committee on Bill 69; Mrs. Gran in the chair.
Sections 1 to 3 inclusive approved.
Section 4 approved on division.
Sections 5 and 6 approved.
Title approved.
HON. MR. VEITCH: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; Mr. Speaker in the chair.
Bill 69, Legislative Assembly Allowances and Pension Amendment Act. 1987, reported complete without amendment, read a third time and passed.
Hon. Mr. Veitch moved adjournment of the House.
Motion approved.
The House adjourned at 3:35 p.m.