[ Page 4479 ]

CONTENTS

Routine Proceedings

Oral Questions

ARDSA grant for Bevo Farms. Mr. Rose –– 4479

Provision of AZT to AIDS victims. Mr. Harcourt –– 4480

Purchase tax on sale of Expo lands. Mr. Sihota –– 4480

Pollution control in pulp mills. Ms. Smallwood –– 4481

Inquiry into milk quotas. Mr. De Jong –– 4481

Committee of Supply: Ministry of Economic Development estimates.

(Hon. Mrs. McCarthy)

On vote [9: minister's office –– 4481

Hon. Mrs. McCarthy

Mr. Williams

Mr. Clark

Mr. Michael

The House met at 2:09 p.m.

Prayers.

HON. MR. VEITCH: Today we are honoured with some extremely distinguished visitors who are going to be in the provincial capital, none other than Her Majesty Queen Beatrix and His Royal Highness Prince Claus of the Netherlands. So that members of the House may have the opportunity of viewing the royal couple when they attend at the parliament buildings today, we have arranged that an area between the buildings and the driveway on the west side of the main entrance will be reserved for members. I know my colleague the hon. House Leader will be asking for leave so that the House can be adjourned or recessed for a brief period during the time their Royal Majesties are here.

At this time, on behalf of the government I wish their Royal Majesties well and Godspeed as they travel throughout this great province.

HON. MR. COUVELIER: The government of the province of British Columbia has traditionally felt very close links with the province of Quebec. Under the leadership of our Premier, we entertained the Premier of Quebec in this House not too long ago. I'm very pleased to have the honour of presenting to the House this afternoon Hon. Yves Seguin, Minister of Revenue for the province of Quebec, his deputy minister M. Bernard Angers and M. Jacques Levesque. senior adviser in the Bureau du Quebec's Edmonton office. I would ask the members of the House to extend our traditional British Columbia warm greeting to these gentlemen who are visiting our province and discussing areas of mutual interest.

MR. ROSE: I have the pleasure and privilege of introducing a grade 10 class from Moody Junior Secondary School in my riding, over here today with their teacher, Mr. Meronuk, to study democracy in action. Would you please welcome them.

MRS. BOONE: I'd like the House to join me in welcoming some very distinguished guests who are visiting us today from England. It's their first time in B.C. and their very first time in Victoria. I wish you welcome: Alma and Leonard Mowlam.

MR. CASHORE: On behalf of the member for Prince Rupert (Mr. Miller), I would like to introduce four very distinguished guests from the Tsimshian community of LaxKw-Alaams, sometimes known as Port Simpson. These gentlemen are very good friends of mine, because I lived in their community from 1962 to 1966, and it delights me to see them in the House at this time. They are Gary Reece, Marvin Wesley, Reginald Sampson and Robert Sankey. Will the House join me in welcoming them.

MR. PELTON: In the member's gallery today is someone who is very special in the life of our Speaker, and that is his mother, Helen, and her husband John Ragen. They are in town from Toronto, and I would ask you to wish them both a very warm welcome. Also in the gallery today is Mrs. Gale Spick from Vancouver. Would you welcome her please.

HON. S. HAGEN: I'm not going to make an introduction today, but I'm going to pay tribute to a very special community in my riding: Cumberland. This week Cumberland is celebrating the one-hundredth anniversary of its Empire Days celebrations. For 100 years they have celebrated the birthday of Queen Victoria. This will culminate next Monday with a huge parade in the village of Cumberland, which will feature - besides a whole bunch of floats and things –– 41 former May Queens. who will be riding in 41 antique cars supplied by the Victoria antique car association.

The interesting thing is that they have 41 former May Queens going back to 1920. and each of the May Queens will be riding in the car of the year that they were May Queen. I think that's a very special occasion, and I would like to congratulate the village of Cumberland for all their hard work in putting this together. I would ask you to pay them tribute as well.

[2:15]

Oral Questions

ARDSA GRANT FOR BEVO FARMS

MR. ROSE: With his well-known antipathy to grants, some six months ago the Premier's office intervened to hold up an ARDSA grant application for Bevo Farms, yet early in September the application was approved. I'd like to ask the Premier what additional scrutiny was carried out between last October and April, by whom and with what results.

HON. MR. VANDER ZALM: Mr. Speaker, I will defer to the Minister of Agriculture to see what additional information was sought.

HON. MR. SAVAGE: The application was held up to check the qualifications in the process for adjudicating the seedlings as they went through - whether any preferential treatment would be given relative to Western Lettuce or any other companies. The actual designation is that no preferential treatment shall be given by the operator, any different than it would be to anybody else purchasing seeds.

MR. ROSE: Mr. Speaker, Jack Berme, president of Bevo Farms and Western Lettuce Now, advises that this grant was to facilitate a sale of land from Western Lettuce to Bevo, and that $250, 000 will be paid to Western Lettuce Now for the land. Did anyone consulted by the Premier or anybody else - the Minister of Agriculture - advise on the ethics of being involved in approving a $500, 000 grant that would facilitate the sale of land and a valuable cash injection into a company with the Premier's son as one of the directors?

HON. MR. VANDER ZALM: Mr. Speaker, I think the Minister of Agriculture has stated that this would be a grant to Bevo Farms and that it was for a specific purpose. I don't know whether in fact that was part of the terms or how that's to be dealt with,

MR. ROSE: Perhaps I could direct this to the Minister of Agriculture. Since the two lots in question owned by Bevo Farms and Western Lettuce Now respectively have a total assessed value of $176, 000, why was the ARDSA grant application approved, which included $250, 000 for land acquisition for a relatively small portion of that land worth approximately - according to the assessor - $50, 000 to $60, 000?

[ Page 4480 ]

HON. MR. SAVAGE: The application as it was approved, Mr. Speaker, was for the construction of the greenhouse facilities and bringing in new equipment, as we understood it, for coating the seeds.

MR. ROSE: Does the minister - I know he hasn't got the application before him - then deny that a $250, 000 segment of that grant was devoted to land acquisition?

HON. MR. SAVAGE: Mr. Speaker, I can neither confirm nor deny it at this stage until I see the details.

PROVISION OF AZT TO AIDS VICTIMS

MR. HARCOURT: I have a question for the Minister of Health. I've asked the minister this very specific question a number of times before, and I have yet to receive an answer. So, Mr. Minister, I'll ask it again. Has the minister's AIDS advisory committee unanimously advised him that this government should be totally funding AZT treatment for AIDS patients?

HON. MR. DUECK: I received a letter from the AIDS advisory, and that was what they suggested.

MR. HARCOURT: Supplementary, Mr. Speaker. Why is the minister not taking their advice?

HON. MR. DUECK: I didn't say I didn't take their advice; I didn't say I did. I said I received a letter, and all letters are looked at, read and considered, and that's where it's at now.

MR. HARCOURT: Are you going to be acting on the advice of all of ' the experts that you've received advice from, whether it's the Canadian AIDS Society, the B.C. ombudsman, Dr. Alastair McLeod, who's the acting head of the St. Paul's Hospital AIDS care group or the B.C. Medical Association? Are you finally going to take the advice of your experts?

HON. MR. DUECK: I believe the member of the opposition knows very well that you have advisory committees, but if we did everything the advisory committees suggested, we wouldn't need ministers, would we?

MR. HARCOURT: It's very clear that you shouldn't be. Are you going to be accepting the advice of your advisory committee to fund these poor souls - yes or no?

HON. MR. DUECK: As I said before, we may and we may not.

MR. HARCOURT: Not only in human terms, but in financial terms, your experts are all saying the same thing: help these hundred or so patients. We're trying to be patient with you, Mr. Minister, and we'll try and be patient because of these people. Can you tell us when you will be making a decision, yes or no, on the advice from all of these experts?

HON. MR. DUECK: That would be future policy, number one; and number two, we have a Pharmacare program in place. I've explained it at length on many occasions. We will not destroy the Pharmacare program by making an exception on one particular drug. That Pharmacare program is in place and working well, and if we decide to change the whole program, we shall let you know.

PURCHASE TAX ON SALE OF EXPO LANDS

MR. SIHOTA: I have a question to the Minister of Finance. I understand the Expo deal has now been concluded and registered. Could the minister tell this House how much tax is paid pursuant to the provisions of the Property Purchase Tax Act?

HON. MR. COUVELIER: As I indicated at an earlier question at a previous time, the question of the property purchase tax is regulated by law. We introduced the Property Purchase Tax Act over a year ago, and the procedures to be followed in the termination of the tax were laid out in that piece of legislation. The opposition has equal access to the acts of this Legislature; if the hon. member has mislaid his, I'll be happy to send my copy over. The fact of the matter is that there is a process to be followed in the determination of these matters. We will have that issue quantified, I suspect, within a matter of days; at the most maybe weeks. At that time, the deal will be concluded as it was intended.

We have said publicly repeatedly that there will be property purchase tax paid on that transaction, as required by the legislation that this House passed well over a year ago.

Interjections.

MR. SIHOTA: I can't believe that they're actually applauding that non-answer.

Maybe the minister can answer this question. Will the tax be paid in total at the time that registration takes place, or will it be paid on a periodic basis?

HON. MR. COUVELIER: Once again, I guess my earlier answer might have sufficed, but the member wishes to consume a bit more time on the clock - and I'm happy to oblige.

The fact of the matter is that the law requires the property purchase tax to be paid on the lump sum and with the completion of all the documentation, and that's the process that will be followed in this case. As the government has said repeatedly, we are making no exceptions to the transactions affecting B.C. Place lands. The law is being followed to the letter. And the intention of the legislation will be enforced and monitored to the letter. The House and the citizens of this province can take comfort from the fact that this government treats all its applicants equally and fairly.

MR. SIHOTA: Again, will the tax be paid on discounted present values or will it be paid on the actual sales price?

HON. MR. COUVELIER: I'm delighted to have the opportunity to respond to that question, because the issue, purely and simply, is: how would the members of the opposition have it? When the first announcement came out that the deal was totalling $325 million, we got the criticism: "Well, of course, that's not net present value; that's over a period of time interest-free, and therefore it's an inaccurate figure. "

If I understand the thrust of the questioner, he is now trying to imply that that's the figure upon which property

[ Page 4481 ]

purchase tax should be paid. The members of the opposition are accustomed to straddling the fence, but they cannot straddle this one. They cannot have both sides of that question. They either are prepared to accept a recognized value worth $325 million dollars, which they previously said they won't accept . . It follows therefore that they must accept the net present value for the calculation of property purchase tax.

In a sense of fairness, they can't have it both ways, can they? Are we going to give it to them both ways? I say no. This government will not give it to them both ways.

POLLUTION CONTROL IN PULP MILLS

MS. SMALLWOOD: My question is to the Minister of Environment. The minister has described the violations of pollution standards by B.C. pulp mills as minor. None of these offenders has been charged for breaking the law. Can the minister tell the House how many times you have to break the law before being charged?

HON. MR. STRACHAN: The member is well aware, Mr. Speaker, that there were occasions, particularly in the category of toxicity in pulp mills, where provincial guidelines were exceeded in 22 of our pulp mills. The infractions, though, were minor, and we're also advised that the companies themselves are spending in the order of $50 million throughout the province to upgrade and to satisfy the requirements of the pollution control branch of the Ministry of Environment.

I am satisfied that every step is being taken to bring the mills into compliance with our provincial standards, and I am satisfied that the mills Dot only have their hearts but also their pocketbooks in the right place in terms of living up to the regulations existent in British Columbia.

MS. SMALLWOOD: Again to the Minister of Environment. Does this mean that the average person can break the law possibly once, twice or just a bit? Will the minister, since he is suggesting that these are just minor infractions, now file the document that indicates exactly how much these mills are polluting and for how long they have been?

HON. MR. STRACHAN: First of all, in answer to the member's first comment, we don't have people breaking the law; we have from time to time permits being exceeded. This happens in many industries, and it happened when your administration was government as well. The idea is not to put people out of business; it is to have them change or fix their method of operation so that they come within permit regulations. I am satisfied they are doing that.

I really don't think there is much more I can say on that subject. It's been canvassed to some degree and I presume will be further during my estimates. That is the answer. Permit variances do happen from time to time and industries are closed down from time to time. My record - if the member wants to look at it - is such that at times we do take very stringent measures, but we take every other precaution first before shutting an operation down.

INQUIRY INTO MILK QUOTAS

MR. DE JONG: My question is to the Minister of Agriculture. Since the report of Mr. Shelford has been out for about ten days now - which has been supported by the minister - I would like to ask the minister what action he is prepared to take against the illegal shippers and when?

HON. MR. SAVAGE: I have accepted the report of Mr. Shelford, as the hon. member from the Central Fraser Valley has stated, and have concurred with the report and am presently following up with the actions that are necessary. In this case, for those of you who may not be aware, under the act action can only be taken on the process of marketing the milk. No action can be take on the production.

HON. B.R. SMITH: I ask leave to make an introduction, Mr. Speaker.

Leave granted.

HON. B. R. SMITH: I'd like to introduce 16 grade 11 honour students from Mount Douglas high school who are here today in question period watching us consume the clock like the last two minutes of a national basketball championship.

[2:30]

Orders of the Day

HON. MR. STRACHAN: Before proceeding to Committee of Supply, I'd like to bring to your attention, sit, the comment referred to earlier by my hon. colleague the Provincial Secretary (Hon. Mr. Veitch). To accommodate members and to accommodate the visit to British Columbia of Her Majesty Queen Beatrix and His Royal Highness Prince Claus of the Netherlands, it is my intention, in agreement with my colleague opposite, to adjourn the Legislative Assembly at 5:05. This may take the form of a recess or it may be in the form of an adjournment. We will decide that later this afternoon. It is our intention to have a recess approximately from 5:05 to 5:30 or maybe an adjournment from 5:05 till tomorrow next.

With that said, I call Committee of Supply.

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

ESTIMATES: MINISTRY OF

ECONOMIC DEVELOPMENT

On vote [9: minister's office, $277, 394.

HON. MRS. McCARTHY: I'm really pleased to bring a message of good news to this assembly today.

In the past year economic development in our province has been marked by one success after another. The dollar value of manufacturing shipments has risen 8.9 percent. The dollar value of our exports has increased by 9.6 percent. This growth in our economy has been reflected in housing starts, which are up nearly 4 percent; retail sales are up 9.4 percent and new car sales are up 16.9 percent. About the only things that have gone down during the past year are business bankruptcies - down 2 percent - and days lost in work stoppages - down 9.5 percent. The result of this success in encouraging the growth of our free enterprise economy has been a general downward trend in unemployment from 12.5 percent in April 1987 to 10.4 percent in April 1988.

This decline in unemployment is the result of 64, 000 more people being employed today than a year ago. The

[ Page 4482 ]

interesting point about this is that a year ago 188, 000 people were unemployed in British Columbia and today that number is 165, 000 - a reduction of 23, 000. We have 64, 000 more people employed. Where did this 41, 000 difference come from, when the net migration into British Columbia during that period was 12, 000 and only 4, 500 of them joined the workforce? I can tell you where most of it came from. It came from our young people joining the workforce. Our young people are joining the workforce at an average rate of over 3, 000 a month or 36, 000 each year. This steady flow will continue and increase every year into the next century.

This is the real challenge that faces the Ministry of Economic Development today: to create an ongoing expansion in our economy, not just for this year and next year, but one that is strong enough to endure through the next decade. This is what my ministry is doing; this is what we have made long-range plans for; and this is what we are accomplishing.

We can no longer expand our economy, as we have in the past, by simply shipping more of our traditional products such as 2-by-4s and coal. The international marketplace has changed for our traditional resource products, and is continuing to change. While our natural resources are the basis of our economy, and will continue to be so into the next century, my ministry is encouraging the future expansion of our economy through adding more value in our resource products before we sell them, and by diversification of our economy so that we will not rely so heavily on our natural resources.

This is why my ministry is involved in three major thrusts: first, to help create hundreds of new businesses, especially small businesses, which are already by far the largest employer in our province; secondly, to facilitate the expansion of certain existing businesses that have the best potential for growth; and thirdly, to develop the new export opportunities and markets for our products and services. Our aim is to capitalize on our advantages so that British Columbians will have opportunities to specialize in producing truly world-class products and services for the international marketplace.

To accomplish this, my ministry will be working from business plans such as the one that was initiated in the past 12 months - a comprehensive annual business plan. Thanks to the tremendous success of Expo 86, we have advantages that are recognized throughout the world. They include our extraordinary strategic location on the Pacific Rim and our most important asset: British Columbians themselves. The world visited Pacific Canada during Expo 86 and met an intelligent, cosmopolitan, talented and free-enterprise-oriented population. They learned what British Columbians already knew: that when we in this province set out to do the very best, when we set out to do something well in Pacific Canada, we can be the best in the world.

We have proven this by our success with Expo, leading the world in subsea engineering, satellite receivers, mobile communications, lithium batteries, sawmill technology and artificial lighting, to name only half a dozen examples. I have some other examples of world excellence and centres of excellence in the province which I hope I can share with you during my estimates.

My ministry is making available to all British Columbians the information and counselling they need, regardless of where they live - anywhere in this province - so that they can take part in the new economy that is developing so rapidly in Pacific Canada. The centre of this new service for British Columbians is the British Columbia Enterprise Centre at the old Expo site, in what is now called Pacific Place. As you know, it provides one-stop shopping for business information and assistance. I have been advised by the business community that it is the first public service of its kind in North America of such an extent and with so many services. Right now it is in phase 2 of its development, which is to set up satellite offices in all parts of our province directly linked by computer to the Vancouver centre. I recently opened the first one in Prince George. My aim is to make this important service from the Enterprise Centre in Vancouver available through all eight development regions.

I am pleased to announce that one-stop shopping is proving to be one of the most exciting and successful economic development programs in our history. Since the Enterprise Centre was opened on June 19 of last year, it has responded to 122, 000 requests for business information and assistance. That's an average of more than 10, 000 a month, five times the total number of requests the individual ministry offices received before their services were put together in one place. Also, the centre conducted 257 seminars; 169 field counselling trips were made; and on some days it has mailed out up to half a tonne of business information to British Columbia entrepreneurs, taxpayers, in response to requests. When the Enterprise Centre's services are even more readily available throughout the development regions through our Action for Enterprise program, we expect an even greater increase in demand for our services. Out of these tens of thousands of inquiries, many new businesses are being established, existing businesses are being expanded and entrepreneurs are putting forward their fresh ideas into the marketplace.

We do not have the statistics yet, but next year when I report to you further on this program, statistics will be available. I am confident, Mr. Chairman, that they will reflect its success in producing new business and new jobs.

I am pleased to report that my ministry has also launched a number of other initiatives to encourage the expansion and diversification of our economy. These include public sector purchasing with our businesses participating in the growth of that kind of purchasing and having it done in British Columbia, encouraging home-based businesses, the Supply Net registration drive, attracting international conventions to British Columbia, encouraging venture capital investments, and the development in British Columbia of world-class trading houses. By this time next year, the results of these initiatives will also be becoming apparent in our economy.

All this is the framework of how my ministry is encouraging the creation of new businesses, and I look forward to answering any questions the hon. members may have about these programs.

Our second thrust is developing a new economy to concentrate on and expand certain industries in our province. Like the creation of new businesses, this thrust involves a step-by-step process that is so essential if the results are to be permanent.

My ministry began by conducting an extensive review of the current potential of British Columbia industries for expansion. The review produced a list of some 16 industries and later a short list of four industries with most immediate potential for expansion. These four are electronics, valueadded wood products, aerospace, and the marine and subsea sector.

During the past year, I have held several meetings with groups of representatives from these industries, and my

[ Page 4483 ]

objective has been to encourage each group to work together as a team to promote and develop their industries. I'm pleased to report that those groups, those teams working together, have now organized and defined their goals and are working towards them. I can't go into all the details of those today, but I hope that in the questioning I will be able to touch on just a few of the points.

The electronics task force, for example. Their goals include attracting offshore companies with electronics related work to locate in our province, in developing joint ventures between companies and the B.C. electronics industry and between the electronics and resource industries. The value of the electronics industry in our province was $1 billion in 1987, and at its present rate of growth it will be our province's second-largest industry before 1995.

The goals of the value-added wood task force include the compilation and publication of the industry's first directory of wood remanufacturers and the development of a new strategy to sell prefabricated and precut housing to middle-income consumers in the east Asian marketplace.

The aerospace task force is focusing on a long-term plan to obtain a significant share of the $20 billion-a-year aerospace industry in the Seattle area. This plan also includes attracting commercial aircraft manufacturing to British Columbia. The subsea task force is planning a project that will bring it even greater world recognition. We are the best in the world in subsea engineering. The companies involved are combining their talents to build the world's first totally autonomous unmanned submersible. All of that is happening in the province of British Columbia. We're actively assisting these task forces.

Our third thrust is to develop markets for products and services from Pacific Canada. There are two main aspects to this. The first is to take advantage of our strategic location on the Pacific Rim. The focus of this aspect is on the work of the Asia Pacific Initiatives Advisory Committee. There are some 100 volunteers on that committee, and its five task forces will prove to be every bit as important to British Columbia's future as the free trade agreement with the United States of America. This is because we need every market that we can get for our products and services if we are to provide productive jobs and opportunities for the hundreds of thousands of our young people who are today in schools in British Columbia.

[2:45]

I'm pleased to report that the Asia Pacific initiative is already a success story: success in the harmonious way in which the federal and the provincial governments are working together; success in the way the task forces are meeting all of their goals - British Columbians will be proud of the work they have accomplished; finally, success in that these men and women who are volunteering their time in the Asia Pacific initiative already are able to indicate some of the tremendous opportunities that are available to British Columbia and to Canada. Our future, as they see it, is not only to be Canada's gateway to the Pacific Rim trading community; it is for British Columbia to become an international centre of excellence for the entire Pacific Rim community.

The results of this committee's work are already beginning to flow. An electronic data- interchange system is now being developed for the processing of documentation associated with cargo movement. And it's not going to eastern Canada, it's not going to central Canada; it's going to be right here in British Columbia because of the task force's work.

The new system will allow everyone involved in cargo movement to communicate specific aspects of cargo handling electronically instead of using paper documents, thus allowing speed for processing, therefore adding, of course, the kind of productivity that will make us more competitive in the world. This system will simplify the process of moving goods through air-ports and seaports not only in British Columbia but right across Canada. Another result is the report from the planning group considering the potential for Vancouver's International Airport as an international gateway to the Pacific Rim and as a world-class facility. That report is now under consideration by the federal and provincial governments.

The areas currently being studied by the task forces involve international trade and finance, transportation, export of services, tourism, cultural and social impact awareness. In each area the task forces are seeking opportunities for British Columbia and Canada that will lead to economic development. Two-thirds of the world's population lives in the Asia Pacific region, and more than half of the world's business is now being conducted there. The explosive growth of this modern market is best illustrated by the travel of jumbo jets. Ten years ago, three out of every five 747s in the world were flying across the Atlantic; today, three out of every five 747s are flying across the Pacific.

Here I would like to point out that these remarkable volunteers are giving of their time, as I say, and concentrating on behalf of all British Columbians. I would like to thank them through this forum for the work that they have done.

The other aspect in developing markets that has been launched by my ministry consists of a business network closely coordinated with the work of my ministry's five overseas offices. We expect those five offices, by the way, to become seven in the next little while. One is to be added in the Los Angeles area in preparation for freer trade with the United States and the exciting new opportunities that will evolve from it. We expect the second to be in Singapore if our negotiations with the Singapore government are successful; that location will give us more direct access to the increasingly important ASEAN area. My ministry is also actively supporting the B.C. Chamber of Commerce office in Taiwan.

You will also be interested to know that all of our ministry overseas offices are for the first time following individual business plans, with specific goals and strategies to achieve each one's goal. The offices are participating in the business network that I mentioned. The first part of the British Columbia business network is an electronic network. It is the first public service of its type in the world. This electronic service has several thousand listings at present. By August, it is expected to have 45, 000 listings. By next year, we expect it to contain over 100, 000 individual business listings. They include international information about trade, sales leads, consulting and major project opportunities, and information about British Columbia suppliers and the goods and services that they provide.

This service is available by telephone and computer to anyone or any business in British Columbia for a nominal charge. It's also available at a number of locations including chambers of commerce, manufacturers' associations, economic development offices, community colleges. As well as providing British Columbia business people with information about domestic and foreign markets, it also provides foreign buyers with information about our products and services. The use of electronic information systems is open-

[ Page 4484 ]

ing up markets that have in the past been too expensive and been out of the reach of small businesses. This British Columbia electronic network will provide our businesses with a real competitive advantage, no matter where they are in British Columbia.

The second two parts of my ministry's British Columbia business network consist of: (1) enlisting the help of graduates from our major universities who now live outside of Canada; and (2) enlisting the help of British Columbians who travel extensively as part of their business and daily work. These are people networks. Both groups of volunteers are helping us spread the word of the willingness and capability of our province to do business with the rest of the world. When they come across an opportunity for this province or for a business in this province to do business overseas, they let my ministry know and we follow it up.

During my recent trade mission to Japan, Hong Kong and Korea, we held the first meetings of our university alumni network in those areas. As the hon. members are aware, British Columbians have a growing international reputation as producers of super quality products. We are recognized as being the best in the world in many types of products and services.

The combination of the three parts of the British Columbia business network will allow us to take full advantage of this recognition. My ministry is also putting a special emphasis on attracting investment to British Columbia. At this time, we have two special advantages. The first is British Columbia's reputation of having a healthy free enterprise business climate within the framework of a parliamentary democracy. The second is the pending free trade agreement. British Columbia products and services will soon have an unparalleled access to the vast United States market.

In other words, anyone who invests in our Pacific province will be investing in the North American marketplace. The California market is of particular significance for the investors interested in our province. The border of California, with its 25 million to 30 million consumers is actually some 200 kilometres closer to this chamber than the city of Calgary, the nearest concentration of Canadian population outside of this province's borders.

We undertook during the past year a restructuring of my ministry to respond more effectively to the government's priorities and directions. This restructuring has enabled the ministry to permit the pooling of program funds in three priority areas: exporting British Columbia's products and services, business development and regional initiatives. The restructuring has also put a special emphasis on the results accomplished by our programs.

An important aspect of the restructuring was that it was based on the ministry's business plan. This plan sets business goals for its major areas of activities. The goals in purchasing include assisting suppliers to do business with the government using provincial buying power to create and preserve jobs and optimizing cost savings for government and its suppliers.

The goals in trade and business promotion include increasing our province's export base, matching foreign investors to business opportunities, supporting regional opportunities, supporting regional development initiatives, increasing the profile of Pacific Canada as a place to do business, including opening the new trade offices and encouraging the activity of trading houses. The goals in business development include ensuring the maximum effectiveness of the British Columbia Enterprise Centre and in the ministry's related programs, including employee share ownership and small business venture capital.

The goals in regional economic development include our home-based business initiative, supplier development services and the establishment of regional development coordinators. The overall goal of my ministry's work is to be the catalyst in creating opportunities and, as a result, jobs throughout all our economic regions.

Here is the best news of all, Mr. Chairman, that I have to report to you today. I am finding that my ministry's work is being helped greatly by the confidence that British Columbians have in themselves and in their province. They know that in spite of our small population we are already showing the world that we can be the very best in what we choose to do. They are confident about Pacific Canada's future, because they're confident in themselves and their abilities as individuals. This self-confidence is going to enable British Columbians to be bold and aggressive in the next decade in the face of constantly changing and unstable world markets. The return in my ministry's investment in their confidence will be a new economy with new prosperity and an improved quality of life for all British Columbians.

Mr. Chairman, I'm pleased to have with me in this House today, to assist me with the information I know the members of the opposition would like to have, the acting deputy minister, Robert Food, and Mr. Brian Dolsen of my ministry. We are very well served by members of the ministry. I want you to know that we have a had a very good team. They've been very supportive.

I would like to say to you, Mr. Chairman, that we are excited about the opportunity and the challenge that we have ahead. I know that there'll be some very constructive questions from the opposition.

MR. WILLIAMS: I'd like to commend the minister for her lengthy and interesting presentation in terms of the restructuring of her department and the various responsibilities she has. It was intriguing to me that the minister spent as little time as she did on the bilateral trade deal - the Mulroney trade deal. I would hope that we can spend a fair amount of time on that as discussion carries on.

First I'd like to tip my hat to one of the wonderful old warriors of British Columbia, in terms of our politics, and I mean that in the best sense. If I remember correctly, the minister, the member from Little Mountain, was first elected to this chamber when I was. I took more time out than she did - mine was of my choosing and hers was part of the democratic process. It's a long way since the parks board in Vancouver, and there's no question that this minister has made a significant imprint on the province. Certainly she has in the last few months.

I've never seen such political skill as we've seen in the last couple of months with respect to this minister. I think she's gone through an extremely difficult period with the Expo land problems that she's had, with the cabinet she has and with the Premier she has. It has been an extraordinary piece of work to achieve what she has achieved with the Expo lands. The leaks that occurred over the last few months are unparalleled in modern history in this province. The managing of the leaks and of the media and of the issues as they were perceived was masterful. I doff my hat to the minister. We've never seen so many executive assistants quietly skulking in the corridors, advising reporters on what happened at what

[ Page 4485 ]

cabinet meeting or what happened at a board meeting, and so on.

[3:00]

1 honestly expected the Premier to stay a little longer - I notice that he did stay for awhile - because I thought the Premier might want to ask the minister some questions during the estimates. He had said he wanted to get to the source of the leaks. If one was anxious to do so, now would be the time. There's maybe one other minister you might spend quite a bit of time with, but we've already covered his estimates. But that opportunity is there.

That's partly tongue-in-cheek - 10 percent. I do believe that we still need a fuller accounting of the Expo deal, Madam Minister. I'm terribly disturbed, as the Leader of the Opposition is, that there's not going to be a full accounting, because we're moving into an era of very significant privatization, the ideological drive of this government. There's a desperate need for full accounting of the transactions that take place. By your very actions, Madam Minister, you have made it abundantly clear that there is a desperate need for full accounting when it comes to the transfer of the assets of the Crown, and that's going on on a massive scale under this administration. You have created a climate, by your actions and the actions of your political helpers, that has made it clearer than ever that there must be a full accounting.

You wrestled with that end-run game with Mr. Toigo and the Premier, and you were successful, but in that process of success you made it indelibly clear for all and sundry in British Columbia to note that we can't take our eyes off this administration. Whether it's selling the rides from Expo, selling the land, privatization, or whatever, you people have to be watched more carefully than ever in your history. I commend you, Madam Member, for bringing this to the attention of the public the way you have, one way or another. but you carry with you now the obligation to come clean on that contract with Li Ka-shing. It isn't good enough.

I attended the Discovery Theatre presentation, called pretty rapidly as you finally closed the Premier's end-run, because there weren't the usual gold-embossed invitations to all the folks - at least, I don't think there were. Maybe, but if there were I just didn't get one, I guess. It was clear from what the people from Concord Pacific and Mr. Murphy said that there had been a lot of midnight oil burned and a lot of crash work toward the conclusion of that deal.

I sat there somewhat naively in that Discovery Theatre, that very expensive glass palace over there, and listened to you say: "The deal is $320 million cash or irrevocable letter of credit." Madam Minister, I thought "cash" meant cash, but I was wrong. As the details came out from Mr. Murphy subsequently, it was very clear that if you really considered it, it really wasn't $320 million at all; it had a net value of maybe $140 million.

A little later we found out that we might have some additional obligations there in terms of the Love Canal problem on the east side of the Expo lands: the chemical cesspool there in part of that site around the old B.C. Electric coal-gas works and in other locations. It came to light that we were going to have to share responsibility for cleanup there if that proved to be necessary. We don't know what those dollars are or what the potential is. There is a need to make available all the reports with respect to that end of the lands. It is very significant.

There is the question of the lease arrangements with respect to the Enterprise Centre. As I understand it, those details have not been finalized. but maybe you can clarify that. Again, that's a potential reducing of the price. Our liability with respect to the Love Canal problem could be very significant, and that will reduce the net present value of the $140 million that your staff talk about by who knows how much. In addition, the question of the potentially expensive leaseback arrangement with respect to the Enterprise Centre could in turn have a negative value with respect to the final net present worth of the contract signed with Concord Pacific.

We appreciate the work you've done in many ways, especially in recent months, in drawing attention to the Premier's activities with respect to the other players like Mr. Toigo. But it begs the question about full accounting and full reporting with respect to every transaction this government, and particularly this ministry, undertakes. I hope there will be a full accounting with respect to the other assets the Enterprise Corporation holds; there are all the land assets it holds. I trust that you will deposit with the House all of your current data and information regarding those values, as understood by your staff.

In turn there is the whole loan portfolio of the Enterprise Corporation. As I remember, we had no discussion of the Enterprise Corporation in your presentation today. That in turn is interesting as well, that you seem to be turning your back on that to some extent. We want to know more about the details of that contract, Madam Minister.

The Premier promised us there would be no flipping when he was trying the end-run with Mr. Toigo. We have to mix it up a bit more, we've got to have no more flipping and a whole bunch of things like that, said the Premier, as he wrestled with the political master and lost. Now we find that one aspect of the contract says: no flipping of the entire site for three years. Ah I But you can flip pieces. Interesting.

You make more money when you flip pieces. The Enterprise Corporation should know that, because they've been involved in many land transactions where they sell the big pieces and other people cut them up and flip the little pieces. We discussed that once before with respect to the Westwood lands, Madam Minister. I hope you can give us a full accounting on those Westwood lands. I hope you can deposit with the House all of the bids that you say you received with respect to all of those pieces in the Westwood lands. I trust we will get a full accounting, all the full details. I trust indeed, Madam Minister. that for tomorrow at least, you will have some of the Enterprise Corporation staff on board so we can get fully detailed responses with respect to the Enterprise Corporation.

Fm particularly intrigued with respect to other sales by the Enterprise Corporation in Coquitlam as well. Maybe you could report to the House tomorrow, if you would, the details of the Riverview lands transactions with Mr. Molnar. Tomorrow I hope you would bring us up to speed, up to date, on all aspects of &t contract with Molnar's companies with respect to the 140 or 150 acres out of Riverview that were handled by the Enterprise Corporation. We would like to go into the details of that particular transaction.

We're saying there is a need to come clean with the public with respect to all of these contracts.

If you can flip small pieces of the Expo lands, are they going to be able to do that just with their $50 million down payment? Let's remember the nature of the deal: $50 million down. two-thirds of the payments in the last three years of the contract - which could be 15 or 20 years long, as I

[ Page 4486 ]

understand it - with no interest to be paid. Does that mean that the title will not be clouded, and they will indeed be able to subdivide and sell off pieces without having to pay any more money up front? With just the $50 million down, can they still pedal off chunks of the land without having to put any more money into the pot? They could end up selling off far more than $50 million worth.

That's why we need to know the details, Madam Minister. As I recall it, you said at an earlier stage a few months back, when the fight was underway, that you would report fully on all the other offers with respect to the Expo lands. When it came to the day of reporting, you did not do that. In fact, we got the line: "There will be no reporting whatsoever with respect to any of the offers that we received. " You, Madam Minister, as I've said before, have given us cause to reflect on these issues because of the Premier's activities, so that there is a clearer need than ever in the public's mind to have full reporting of these matters.

With respect to the Li Ka-shing deal, will he be able to flip several pieces that would exceed the $50 million down payment, and make this even more the sweetest land deal in recent history in this province? We need to know those details, because there's a negative cost with respect to the Love Canal problem, and there's a negative cost in terms of the leasing of the Enterprise Centre and the buildings there.

That's the beginning for a few points, Madam Minister. Maybe you can respond to some of those points.

HON. MRS. McCARTHY: First of all, Mr. Chairman, let me say that the member has completely ignored the fact that there is a large ministry, small in numbers of people . . . . He has completely ignored, in his response to my remarks, that there is a huge province with small communities who want to see economic development. He ignored completed the statements that I made earlier in my introduction to the ministry's estimates. I would have thought that the official opposition critic of economic development would have dwelt on them at least a little. But in his great haste to malign the best and largest private sector investment for an economic initiative for the province of British Columbia, he gets right down to the subject of B.C. Enterprise Corporation's Pacific Place program. I'm pleased that he has, because I'm very proud of that program. I think that it is going to be an economic engine for the lower mainland which will have results all over British Columbia.

It's using private sector investment; it's not using the investment of the taxpayer. It's not putting the taxpayers' dollars at risk. It's using private sector investment to create $2 billion worth of jobs for electricians, plumbers and construction people working to build what will be the most exciting centre of any city anywhere in North America, if not the world. It's interesting that the member for Vancouver East did not even consider that as a plus, or did not even remark on it's being an advantage for the people of British Columbia.

I think one word was "flipping. " There is a commitment by the Concord Pacific group, publicly stated by themselves. I'm going to tell you something, Mr. Chairman. I'm quite willing to take them with their public pronouncement at their word, but we also have a written agreement on the idea of flipping. That has already been made public. What was interesting about their comments of last week was that in spite of the fact that they themselves cannot turn over this land to someone else at a higher price, they have said it as they spend $50 million to $60 million a year from this year on in servicing that raw land, land that has no added value whatsoever . . . .

[3:15]

The member for Vancouver East, who tried to confuse the Westwood land issue in questions earlier in the session, again tried to mix oranges and apples, raw land versus serviced land, and tried to confuse the public in that regard. Everybody has to understand that it is raw, unserviced land, and until many millions of dollars are spent on it, it's of no value to Concord Pacific or to anyone whom they may wish to sell some part of it to. They'll have a very real investment.

One of the things they have said in the completion of the deal and the signing off of the papers in this past week . . . . I don't call it flipping, I call it consistent with the kind of commitment that the Concord Pacific group has made to British Columbia and the lower mainland in saying that they desire to build on that property. They have said that they are looking to British Columbians, B.C. investors and companies who wish to come along and place any of their ideas on that site, as long as and with the caveat that the land will remain and they will maintain the comprehensive development that has captured the imagination of everybody and which was very real in their winning the bid.

That's very important, but it also meets a criterion that members on that side of the House and people who complained throughout the process in the last two months found upsetting to them in some way. They kept saying: "Why can't we have our own British Columbians help build it?" Well, they have clearly said: "It's quite all right. That's exactly what we want to do; that's what we always intended to do." The only foreign thing coming into this province is something that doesn't have any nationality at any time, and that's the dollar bills and the investment for the multimillions of dollars that will flow - at least $50 million a year for the next seven years, just for servicing and starting the construction and for the land itself.

When the member complains and says: "They're going to flip it, or they could flip it, or there are all kinds of opportunities . . . ." Let me tell you, Mr. Chairman, that that was a concern of ours and we covered that clearly; we've announced that clearly. The Concord Pacific corporation has clearly defined the way they intend to look in a long-term, patient way, in terms of their return on their investment and their investment in that land. So I'm very proud of what has happened there, because it takes our taxpayers out of the development business. We're not good at it anyway; we really aren't. We've done some good things in the province in times when we could afford to do it. I look to the Westminster Quay, the Lonsdale Quay and some of the developments that we've done in the past. They've been very imaginative. They've helped economic development in the region in which they are in. But we could have done it just as well with private sector dollars, and I'm pleased that the policy of the government is to do that from now on. I think we're going to have a first-rate development which we will all be proud of.

You asked some questions on Riverview. I will repeat my answer regarding Westwood. I don't know what more you want; I gave you a very full answer in question period recently. But if you want, I will bring that back to the House again.

You talked about the loan portfolio and other properties of the B.C. Enterprise Corporation. Let me background you on that. As you know, the balance of the properties are all over the province in the B.C. Enterprise Corporation portfolio

[ Page 4487 ]

That loan portfolio is also in it, which was the old B.C. Development Corporation, and through the recessionary time it did a very good job, particularly for the forest industry, which was having a very difficult time in those years getting financing from conventional financers. We don't believe we're in that position any longer, so the loan portfolio will be sold, as will the other properties that are involved.

At one time, we had thought - in fact, I think it even got some press - that we might sell the balance of the company as one share and lease the whole company together. We have had several people who discussed that with us, and we are taking a second look at that proposal. B.C. Enterprise Corporation has been asked to come back to cabinet to get a different mandate, and we are at this time very busily putting together the portfolio which we believe can be packaged in a very far different way than we had thought before. We believe that the cabinet will be very amenable to that proposal, because in each and every constituency represented on both sides of this House you have had as members real interest in some of those properties. We believe we have got a program and a plan which will be in a very short time placed before the cabinet. So I really can't respond, other than to tell you that we believe that is the way that we will go.

In other questions that you had, I think a lot of it was your personal opinion about such things as public disclosure. Let me just talk to you about the public disclosure aspect. On the Concord Pacific completion we did in the announcement . . . . And you were present; I recall that the member who asked the question, Mr. Chairman, was present. I recall saying at that time, to a question from the press, that if other people who had been in the competition wished to make their proposal public, we would free them from the confidentiality agreement that, quite frankly, right up to the signing of the papers, was part of the deal - and that still stands today. As everyone has known, it's become a public announcement and has been very well covered in the press. The last two people who were in the competition were the B.C. Land corporation and the Concord Pacific. We felt Concord Pacific were the best people. B.C. Land has the ability to make their proposal public. We have no jurisdiction over B.C. Land. We cannot ask them to make it public; it is up to them. The member . . . .

Interjection.

HON. MRS. McCARTHY: No, I never made a comment - Mr. Chairman, the member is speaking from his chair, which he shouldn't be - that B.C. Land, or the other proponents, would make their proposal public. Mr. Chairman, I have no responsibility over them. I have no jurisdiction over them. I cannot speak for them. They can well speak for themselves. They are free, as far as I am concerned and as far as the B.C. Enterprise Corporation is concerned, to make any kind of public pronouncement they wish.

In regard to Concord Pacific, we have clearly spelled out the terms of the agreement. Everything within the terms of the agreement was made public on the day of the announcement two weeks ago. The member has suggested that we should make more things public. There were a mountain of documents that were signed. All of those things which government has jurisdiction over vis-à-vis the statutes -such as the one mentioned today in question period and property taxes - will be adhered to. We will follow the letter of the law. We have already told you what those are.

As far as the Concord Pacific - the private corporation - is concerned, they are free, regarding the competitor to those people during the process, to make public any of their private business. They have already stated that as a private corporation, they don't plan to do so. Perhaps in the months to come they will feel differently, but at the present time, I don't have jurisdiction over that private company. It is government policy that we will give all of the pertinent information regarding the government's portion of that contract, and that has already been made public.

I believe that the member mentioned environmental issues and made reference to False Creek itself. The government was responsible for the land itself:, it was our land, and we owned it. We took on the responsibility for the environmental problems. We have that responsibility. We cannot abdicate our responsibility in that regard. They are not as difficult . . . . We had the very best environmental engineers available, and we have had extensive tests on it. We've worked with the city of Vancouver on it. We have a problem, and no one has ever said we haven't. We have a very containable problem there which has been the responsibility of our Ministry of Environment, and we've worked with the Ministry of Environment on that. We believe that's something that the city of Vancouver and Concord Pacific and the government are going to be able to work out very compatibly.

MR. WILLIAMS: Madam Minister, you haven't clarified the question of the sales by Concord Pacific, other than that they clearly have the authority to sell what they want to sell. Is that so?

HON. MRS. McCARTHY: Within Concord Pacific, there are three partnerships. I'm sorry, I cannot give you their names from memory: I could bring- them to the House. The largest shareholder is Mr. K.S. Li and his family. They have a Canadian company, which they've had for some time in British Columbia. Mr. Victor Li is one of the directors. Mr. Li is a British Columbian and a Canadian citizen. Their announced plan is exactly as the member for Vancouver East saw - with. of course, the city of Vancouver's input. They may not be able to deliver exactly what we saw in the program, in the model and in the plans.

However, I believe that their commitment is to come as close to that as possible. In order to come as close to that as possible, they have to retain total control over that land. If, however, in the case of the hotel - I'll give that as an example because there is a hotel planned - they wish to invite one of their partners, who happens to own one of the large hotel chains in the world, to build that site, they would invite that person.

[3:30]

If they wanted to invite B.C. Land - I'm just making that name up: it could be any of the fine developers of British Columbia - to develop the international marketplace or the condominiums or the market housing, they will work with those people on a one-by-one basis. They don't have a construction firm. If the hon member is trying to say that they're ping to either bring in people to build it, or conversely that they are going to sell off pieces of the land, I can assure him that they have not said that they will do that. They will invite participants in the total plan, and they hope to have the total plan conform with what was generally presented -knowing very well that the city of Vancouver will be having a great deal to say about the zoning of that land.

[ Page 4488 ]

MR. WILLIAMS: Would the minister provide the details of the various bidders with respect to the Westwood lands?

HON. MRS. McCARTHY: Mr. Chairman, I cannot do that at the present time, because it's a constantly changing situation.

MR. WILLIAMS: No, the stuff that's sold already.

HON. MRS. McCARTHY: Oh, what's already sold. Yes, Mr. Chairman, I've committed myself to bring that back once again to the House, and I've already given details on the question that the member asked earlier this session. I'll bring it back if 1 can in the next few hours.

MR. WILLIAMS: I appreciate that. The specifics - not a rehash of what the minister said previously in the House, but the details of the various bids for the sites that have already been sold from the Westwood lands; i.e., the number of bidders on each site, who those bidders were, what amounts each of them offered.

Similarly, the minister might bring us up to speed on the contract with respect to the Riverview lands, which was initiated by the Ministry of Lands and then transferred to the Enterprise Corporation. I think it's still being actively parceled off by the Enterprise Corporation under that contract. I would appreciate that.

It's not clear from what the minister said with respect to disposing of the other assets . . . . Similarly, presumably information regarding the loan portfolio of the corporation will be made available to potential buyers. You have to have the information in order to make any realistic bid, so in turn it would be most helpful if the minister could provide the House with the background with respect to the loan portfolio that is also, being put up for auction.

HON. MRS. McCARTHY: Mr. Chairman, I'm sorry, but that particular question cannot be done during the timeframe of the estimates. It will become public when it is tendered and when the decision of cabinet and the mandate are given to the B.C. Enterprise Corporation. Until the "For Sale" sign goes on, I'm sorry, I cannot give that information. The member will well know that loan portfolios are a little sensitive in terms of people's private business as well, so it makes it more difficult to talk about loans in that regard. But I can assure you that it will become a matter of a tendering process once it is given approval by cabinet.

I will be pleased to bring back the information the member has suggested we bring regarding the Riverview lands, which were formerly under the jurisdiction of Forests and Lands. In terms of the detail regarding the other, I'm going to look at the question and the way his question was posed. We might not give you the names of the bidders in that case, again because it's private business. But we may be able to give you bidder A, B, C, D and the amounts bid. You can be assured that in every case the best economic situation was the winning bid.

MR. WILLIAMS: It certainly was interesting getting the overall statement from the minister at the beginning, and their great reliance on business plans is interesting to see at this stage of the game. But for a government that's been historically opposed to any planning whatsoever, any kind of planning is encouraging. It's impressive indeed that information counselling has amounted to as much as half a tonne; I think it's an interesting measure of the capability of the ministry.

The minister always talks with great purple prose. It's part of her modus operandi, and who can knock it: everything's just about "the best in the world, " and why not? If everything here is the best in the world, I don't know why we need any outsiders of any kind at any time; maybe that's my position. We really can do so much internally in British Columbia, yet we keep looking externally for easy answers and people arriving in jumbo jets with suitcases full of money to solve our problems. That may be closer to the Premier's view of how you carry out economic development than the minister's.

I wonder if the minister might advise us - in time, not necessarily right away - of the 16 expansion areas. They focused on four, but it would be interesting . . . . Maybe there are reports and data that could simply be filed, but it would be interesting to see how that winnowing process took place in strategic areas for potential expansion to four. Certainly, of the four, I would tend to think that at least three of them are probably pretty realistic.

HON. MRS. McCARTHY: Four of them are.

MR. WILLIAMS: Three out of four isn't bad when you've got the opposition looking at them, Madam Minister. You take the kudos where you can.

I have a little trouble with your SupplyNet system, I know it was one of the things that was going to be privatized, but I don't know who you would be able to sell it to, to be brutally frank. It strikes me as little more than an electronic scribbler. Most of us used to have scribblers when we were kids, and we filled them up with names and so on - when you established a grocery store or something. You seem to be expanding this electronic scribbler worldwide, which is interesting, but in the end it is still a scribbler. Maybe you could explain the wonders of that system beyond what this simple mind sees it as. When I looked at it six months ago, frankly, SupplyNet was not overly impressive in terms of any kind of data base that is really significant or useful. I don't mean this in a demeaning way. It was just an exercise at the stage of its development I saw it at. Maybe development has been carried on to the point where it is more significant.

HON. MRS. McCARTHY: We're talking about two things here. SupplyNet is not the B.C. Business Network, which is the worldwide network. We are talking two different things here, and the hon. member is confusing those two streams.

Let me take SupplyNet first. SupplyNet is being privatized. Hopefully that will create a business opportunity for the private sector and allow SupplyNet to reach its full potential. SupplyNet is a system which was developed by the B.C. Purchasing Commission, which now comes under this ministry. We are using the B.C. Purchasing Commission to become an economic tool for the province. It purchases $5.5 billion worth of goods and services annually, and we would like as many British Columbia businesses as possible to access that business.

Through the Crown corporations - in fact, we have a very good program going on at the present time with B.C. Hydro . . . . We have displays at the Enterprise Centre, now traveling the province, to tell people such as machinists,

[ Page 4489 ]

who are buying several million dollars worth of goods and services outside the province, that there is an opportunity for them in any part of the province; some supplier can make this available -or can do plastic work, and so on. As a government, we have encouraged the Purchasing Commission to go out and have businesses . . . . SupplyNet is the largest system in Canada. I can tell you that when I was at a provincial conference a few months ago in Kananaskis, Alberta, with everybody there, we were known across the country as the most aggressive in the country. I'm proud of Steve Hutchings and those in the ministry who are looking after the Purchasing Commission. We are really pleased that we have had such a response to the Purchasing Commission and the process we have under it.

Different from the Purchasing Commission is what we call the B.C. Business Network. If you had been there six months ago - that was right after we started . . . . It's the first kind of data base assembly anywhere in this nation, and I can tell you success story after success story. It is unique: there isn't anything like it.

Going back to the Purchasing Commission for just one minute, I was in Prince George this week and a young lady who owns a refrigeration business came to me and said: "I'm really pleased about this whole Purchasing Commission idea of trying to get businesses in the province . . . . I never even thought I could service refrigeration contracts from Prince George, I have an application in and am now in the running for some refrigeration work. I'm a service company; I do that kind of thing."

Going back again to the B.C. Business Network, this is a computerized network that is as close as the phone and a small modem anywhere in the province. It's accessible; it's a list. Just recently we had the U.S. Department of Commerce give us a list of 100, 000 names - they are adding 100 a day to that list - of people in the United States who will buy anywhere in the world. You know, you would be hard put to find a commodity that you couldn't service somewhere here in British Columbia.

Our national government buys $30 billion worth of supplies and services each and every year. You tell me where we're going to find the kind of business in the city of Vancouver, in Pouce Coupe, in Nanaimo, in Prince George, in Victoria, that is sophisticated enough to know where to get access to that $30 billion worth of products and services. On that list we have access to things, and we are trying to get access to other things. We are negotiating with World Bank, CIDA, EDC. We have our own provincial purchasing that we can access. In other words, with very little sophistication in even the computer world, all of these people, through a government office - they don't even have to have their own machine - through an Enterprise office, through a chamber of commerce office anywhere in the province, can access that kind of thing.

[Mr. Rabbitt in the chair.]

I'm sorry you're not impressed, Mr. Member, but I'd like to give you another chance. I'd like to invite you to go back and see what an exciting project that is. It is nowhere else in this country. We have a chap in Kelowna who gives parts for trucks and fleets of trucks. He has reported several sales leads obtained through the system and two sales completed to the U.S.A. and Mexico, for a total of $16, 000. They've given their names, so I'm going to say that it's Mr. R.L. Oliver of

Fleet Parts in Kelowna. Mrs. S. Hindman of Hindman Agencies obtained the sale of rubber medical gloves to the U.S.A. because of leads obtained through the system, Those sales amounted to $11, 000 - not bad for a small company. Another one in excess of $250, 000 is pending. She is one of many.

[3:45]

1 can tell you of one in September of last year, an engineer in Victoria who received a $100, 000 contract from the People's Republic of China. The contract was something he tripped over as he was testing the system. Not a bad addition, certainly one he would never have known about had the B.C. Business Network not been there. It is the most sophisticated system anywhere in this country. I would hope that through our discussions and through the knowledge that we're now imparting to the House - which hopefully will be carried through our members - you will take a look at the system for what 1 7 t can do for those people in your constituency.

In fact, most of the businesses in this province - 92 percent of them - have less than 20 people in their shops. They are their own janitor, their own sales producer, their own accountant. Four, five, three or two people in a shop are not going to be sophisticated enough to know what's going to be available for a sale to CIDA, for example - sending prefab housing to New Guinea. If they are a small company with not a heck of a lot of staff to ferret out those kinds of opportunities, you've got to know that the B.C. Business Network is working every day for them.

As far as its cost is concerned, it's $3 a month to be on the network, and that $3 will come back many times over in just one order. That will give opportunities to so many in this province.

MR. CLARK: I have a couple of simple questions for the minister regarding the ethanol plant in northeastern British Columbia. I note that the Agrifuels proposal was discussed at some length last year, and I know that at an earlier date your ministry, Madam Minister, was involved in it. Is the ministry still actively pursuing some kind of assistance to that plant up in Dawson Creek to get it off the ground?

HON. MRS. McCARTHY: That project is under the Ministry of Agriculture. Our ministry is called on to support that ministry in terms of reporting or information they may need, but your question should rightfully go to the Minister of Agriculture.

MR. CLARK: I understand that the Ministry of Agriculture has a very small staff to deal with a project that is really in the neighbourhood of three or four times the size of all their previous economic development initiatives combined. I assume that the minister is then saying her office has been involved. Maybe she could inform us what kind of assistance has taken place, or whether any assistance has been given to the Ministry of Agriculture in the last few months. I will canvass this with the minister, but maybe the minister could table any support documents for u~ to see, or anything they've done at this time.

HON. MRS. McCARTHY: We are not involved in that way at all. It's totally in the hands of the Agriculture minister.

MR. WILLIAMS: Could the minister confirm that they have turned this project down seven times themselves at an earlier stage through various parts of her ministry?

[ Page 4490 ]

HON. MRS. McCARTHY: No, I cannot.

MR. WILLIAMS: Could you confirm three times? Four times? Come on. They tried to get money out of you for this project, and your department had enough moxie, if you'll forgive the term, to turn it down. So they shopped it around to the most gullible guy, and the Premier pointed to the Minister of Agriculture (Hon. Mr. Savage). That's where it has ended up lodged. We would just like confirmation, for the record, that you run a capable ministry and you certainly didn't entertain this nonsensical idea.

HON. MRS. McCARTHY: I don't know if that was a question or not. It sounded more like a statement. But I've got to tell you that if it's in the hands of the Minister of Agriculture, it's in darned good hands. I'm really pleased to know that he's looking after his portfolio so well.

You know, I don't think we need any more facetious questions. Is this all the opposition has for the Ministry of Economic Development, Mr. Chairman, I ask you?

MR. WILLIAMS: If the minister wants to know what our concerns are, one of our major concerns is the bilateral trade deal with the United States of the Mulroney government that you people have hitched your wagon to with no bargaining whatsoever.

I think it's high time that you deposited with the House your studies that indicate the winners and the losers out of this exercise. Where are the new jobs that are going to be created out of the trade deal? How many of them are there? In what sector? Where's the damage going to be and in what sector? What kind of repair work is going to have to be done? How much is it going to have to cost? How much adjustment is there going to be? We need these numbers. It's long overdue. There has, not been any kind of full reporting on the trade deal.

The trade deal makes us vulnerable in countless ways as a nation, in terms of the freedom of governments, provincial governments in particular, to carry out their authority under the constitution as free governments inside this Confederation. It is a major concern in terms of the implications and of a free and sovereign nation in the future. At the very least, Madam Minister, we should be getting full reporting and full material out of your ministry on the numbers and on what the implications are of this incredible new adventure on the part of the federal government, with you people participating. What's the history? Where are the jobs? What are the numbers? The earlier assumptions by the feds on the numbers have all been blown out of the water, because they were not valid assumptions.

The Conference Board of Canada more recently has come up with their numbers. They say that we'll generate 15, 000 jobs a year for the next ten years, and there are lots of assumptions in that exercise. In ten years, 150, 000 jobs -for this we throw sovereignty on the table? For this we give up provincial autonomy with respect to energy? For this we give up provincial autonomy in pricing and in agricultural sectors and in terms of various transactions and subsidies and dealing with regional disparities within the province or within the nation for the sake of 15, 000 jobs a year Canada-wide? For this we throw Canada on the table?

I say, Madam Minister, that Canadians should be wary of this deal, because Canada is being put on the table as a nation. What kind of future does this country face once we link ourselves that way? This is not just a trade deal. This is a matter of throwing in great chunks of our sovereignty, indeed. And for what? We already have a significant trade surplus with the Americans currently. If the Americans want anything, they are going to want to decrease that surplus. That's certainly the exercise from their point of view.

Where are the jobs? Fifteen thousand Canadian jobs a year, says the Conference Board of Canada. Well, what do you say? How many of those 15, 000 are we going to get and where are they? Where are the ones we're going to lose?

HON. MRS. McCARTHY: I'm really surprised. I'm not surprised at the negativism over the free trade agreement. That's been a platform in the New Democratic Party's program for some time. They've been very clear on it. I'm really happy that they have taken that tack about the free trade agreement. It really is one of the clearest examples of why it is important for the people to note the philosophical difference between the parties in this House. I'm glad that they've taken that tack, because very often they try to be all things to all people. This will give a very clear indication to the people of British Columbia of where we would be if we followed the economic policies of the New Democratic Party.

I respond to the question from the hon. member, he asked about actual jobs. We have had a preliminary assessment that was given wide circulation in the province. We have estimated the number of jobs at almost 28, 000 new jobs to be created by 1999. You have to remember that this is a free trade agreement that doesn't, when it is decided upon, just come as an announcement on a Monday and on Tuesday everybody's in a free trade agreement, because that's not so. Members of the NDP would have the people believe that. But it's a ten-year phase-in program.

Something else that members of the NDP will not share with the people of British Columbia is that the status quo is not available.

Interjection.

HON. MRS. McCARTHY: It is not. The status quo is not available, Mr. Chairman, and it is because of the need to respond to the fact that there is going to be, regrettably, without a free trade agreement the kinds of problems that we all experienced - and saw, much to our concern - in the shake and shingle industry. We saw it there. We viewed it in the softwood lumber. Because of those examples it was very clear to us that the kind of legislation that is ready to go in the United States if this free trade agreement is not reached is going to have a tremendous, adverse, negative impact on this province and all of this nation.

The same people who speak against free trade in this House - the NDP on a national basis speak against the free trade agreement - don't seem to mind one whit that the people . . . . In fact, the very leader of that political party on a national scene comes from a part of this nation that virtually has a free trade agreement with the Auto Pact; and thinks it's quite all right for that area; it's not good enough for the rest of us. We in the province of British Columbia say it's good enough for the rest of Canadians to have that standard of living and those many jobs, and that's what we want for our people.

Mr. Chairman, they talk about the loss of sovereignty -fear tactics again from the socialist party in this House. How little you believe in the people of British Columbia to make a

[ Page 4491 ]

statement like that. How little you believe in Canada when you make a statement like that. How little you know of the people of this nation, who don't mind having - thank you very much _' the United States of America as their best customer, but will not become Americans and don't intend to become Americans, because we're proud of our nation and our nationality. Such rhetoric, trying to scare everybody.

[4:00]

Mr. Chairman, there has been another report. There are many good statistics in this report, which this member has obviously had and chooses to ignore. There is another report put out recently by the Canada West Foundation study. Let me quote from it. You're asking for some statistics.

"The B.C. economy will derive significant benefits from the Canada-U.S. free trade agreement, as over 185, 000 jobs are in sectors which expect to benefit from the agreement. In terms of provincial GDP, sectors directly benefiting from the FTA account for 18 percent of output, compared to only 2.4 percent in industries adversely affected by the FIA. In terms of exports, B.C. is less dependent on the U.S. market than most provinces in Canada. The U.S. represented 47 percent of B.C.'s international exports in 1986.

" . . . major forestry sector is highly dependent on access for its softwood lumber, shakes and shingles and pulp and paper industries. The FTA does not change the general outlook for these industries which have rebounded from the recession, for the most part, but doesn't promise improvement in the bilateral trade environment, which would reduce further threats to B.C. forestry exports from U.S. lumber interests.

"More secure access to the U.S. over the long term should facilitate investment, production and job growth of forestry-based products, natural gas, minerals . . . . "

Another area of the report goes on to talk about the emerging high tech industries:

"The performance of key sectors of the B.C. economy, primarily forestry-based but also emerging high tech industries . . . will lead to important spinoff benefits for service sectors. New capital investment from Japan, Hong Kong and other Pacific Rim countries to gain tariff-free access to the U.S. will have a major bearing on the magnitude of economic gains for B.C. under the FTA. "

Mr. Chairman, the member mentioned earlier in his address that we both came into this House together, and we did. We've had a good time here; we've enjoyed it, and we've served our rather light constituencies in the city of Vancouver. There are times in this House that I think you have to put the political thing aside. You're talking about a free trade agreement with the greatest economic force in the world: the biggest customer we have, the customer that we share this North American continent with, with the greatest advantages and possibilities for this province and this nation. Surely this member could put the political rhetoric aside and think of the generations of young people who, through phasing in that free trade agreement in this next decade, will benefit. We are talking about creating jobs for thousands of young British Columbians. It is important to them.

Yes, we are behind the free trade agreement with the United States of America. We are going to make it work, and we're going to make it create jobs. That which is good for Ontario and the rest of the country is good for British Columbia. We're going to have it in this province, hopefully. Hopefully the kind of rhetoric that comes from the socialist party in this nation will not preclude the opportunities for young people in this country.

MR. WILLIAMS: Oh, rhetoric, rhetoric, rhetoric, indeed! Where have the jobs in Canada come from in the last decade, Madam Minister? Have they come mainly from international companies, multinational companies, American companies or Canadian companies? Where have most of the jobs come from in Canada?

HON. MRS. McCARTHY: Mr. Chairman, they have mostly been created internally. Everyone knows that an internal market, which we have in Canada, of so few people is not an economic number for us to set . . . . What we need is investment: what we need is export-, what we need is new jobs being created by outside investment. That is what we believe the free trade agreement will do. It will enhance that ability for us to have a greater return for the kind of business that will be opened up.

MR. WILLIAMS: Interesting rhetoric indeed, Mr. Chairman. I asked where the bulk of the jobs come from. They have come from Canadian companies, Madam Minister; they have come from smaller Canadian companies. That's where the great growth in jobs has indeed come from. They have not come from American companies; they have not come from American companies at all.

AN HON. MEMBER: What's the point?

MR. WILLIAMS: The point is that once you wipe that border out and move toward economic integration with the United States, you will more and more have American companies moving into this 10 percent addition to their market. A principle of economics is that incremental production is what the game is about. They can essentially write off their capital costs, add the 10 percent necessary for the Canadian market and still have the large-scale, efficient industrial machine.

We're already beginning to see the pattern of a phasing out in Canada, particularly in the east in production facilities, with them moving to the United States, because they will be able to serve us. The tendency to locate an industry is to locate where the market is.

Interjection.

MR. WILLIAMS: The Minister of Environment says California is the market. Indeed it is. It is as big as Canada. Sure, California is the fifth-biggest market in the world. But if you are going to locate, where are you going to locate? You're saying that this is going to be wonderful, because people will be poised here at the Canadian border to enter the California market.

What I have trouble understanding is why wouldn't they be in California? If what they want . . . .

Interjection.

MR. WILLIAMS: Come on! Twenty-five million people in California, the sophisticated market. the skills of California

[ Page 4492 ]

Think of what they spend on universities in California compared to British Columbia. Even with right-wing administrations, they spend grandly on their universities in California. It's one of the great regions of the world in terms of academic talent. The niggardly cutback game that goes on here gets us out of that game entirely.

I have real trouble with this idea that so many industrialists, once we've erased that border, would flock to British Columbia to be near the border to serve California. The logic of that escapes me. There is a sunbelt down there. They have right-to-work states where they don't have an organized trade union movement anywhere near the extent that we have; there are a dozen states that don't even have a minimum wage. We then move into a beggar-your-neighbour policy, where we have to compete with them, with their low wages or without an organized trade union sector, and them with their market right there. I have a little trouble understanding why Mr. Widget Manufacturer, who is producing widgets for everybody, wouldn't put his widget plant in Los Angeles, say, instead of the lower mainland, when Los Angeles is obviously the centre of the market.

The reality in Canada is one that most of us don't understand, and I don't think the minister really understands it. The reality in Canada is that we have accepted a branch plant economy linked with the Americans for too long. If you start looking at the numbers, they are shocking. Mr. Hurtig and the Council of Canadians asked Statistics Canada to pull together the data for the period between 1978 and 1985, to see where the jobs came from in Canada. Here is how the numbers come out, Madam Minister. I don't know if you read this stuff, but they come out this way in terms of all commercial industry in Canada: 876, 200 new jobs out of Canadian-controlled industries; in the same period, 1978 to 1985, U.S. -controlled industries produced only 1, 400 jobs in Canada. That's 1, 400 versus 876, 000. Other foreign-controlled firms in Canada were actually at the minus level -minus 14, 200 jobs.

It's very clear that the Canadian companies are the ones that have been producing jobs in Canada. You can go by sector and so on, but the overall numbers are there, and they are clear. I'd like the minister to explain why the widget manufacturer would be so overjoyed to locate in Vancouver once we erase the border, rather than in Los Angeles.

HON. MRS. McCARTHY: Those figures that have just been given coincided with the repatriation of the oil companies, so they are a little distorted to be used as a benchmark.

This fallacy that we can rely totally on 25 million people for our marketplace is ridiculous. If we have an opportunity to expand that, we should take advantage of it.

A couple of things you've said fly in the face of facts. First of all, the Asia-Pacific marketplace - through our offices and through the queries we have had in our offices -is enthusiastic at this point over the currency realignment in their own countries. That, in addition to free trade, makes our Pacific province very appealing to them.

Secondly, we have the historic linkages with Asia-Pacific - family ties, linkages, the whole thing that has gone on over the years. British Columbia was one of the first provinces to seek linkages with Asia-Pacific. We were the first province in Canada - and naturally we should have been, too . . . . Many years ago we took our first trips into that area, to knock on their doors and say that this was the place to invest and that we wanted their investment. It's not true that they would prefer to go directly to the United States. They would prefer to come through our Pacific doorway. I think we can offer them a great deal, and I think that we will offer them a great deal in that regard.

You mentioned U.S. firms. Let me quote from a very recent communication on the subject of foreign direct investment and the free trade agreement. It's from the C.D. Howe Institute, which is known as Canada's leading independent, non-partisan, non-profit economic policy research institution. It has individual and corporate members drawn from business, labour, agriculture, universities and the professions. Let me tell you what they say about your argument:

"Exodus of U.S. Firms Unlikely Under Free Trade . . . . 'Fears of a major exodus of foreign owned firms and capital from Canada in response to the Canada-U. S. free trade agreement are much exaggerated, ' concludes a study released today by the C.D. Howe Institute . . . in fact, companies in both countries are likely to respond to free trade by increasing their foreign direct investment and technology contacts in both directions." They also conclude that: "Canada has given up relatively little in terms of its current policy practices toward foreign investment. "

We can all point to various comments, but you say: "Where are most of the jobs created?" You're suggesting that Canada can continue to create within its borders sufficient dollars and productivity to maintain and retain the standard of living that Canadians enjoy at the present time. I am saying to you that we have to enhance our investment in Canada and in British Columbia, and in order to do that, we have to work towards a trade agreement such as we have offered to us now. Taking advantage of that enhanced U.S. marketplace is going to help us retain the standard of living that Canadians want. We're not going to be able to do it inwardly, selling to each other and living within the borders of Canada - it just can't be done. To fly in the face of economic facts in that fashion is, frankly, to turn our backs and turn the backs of our children on the future of Canada.

[4:15]

MR. MICHAEL: I find it very interesting that members of the opposition, particularly here in British Columbia, still talk against free trade with the United States. I find interesting some of the things being said. I wonder if the members stop to reflect that it wasn't that many years ago - perhaps 40 to 45 years ago - that fewer than half the things that are free trade today weren't free trade then. Indeed, we've made great strides with the United States of America regarding free trade over the last 40 to 50 years. I believe we now enjoy somewhere in the neighbourhood of 75 or 80 percent of our commodities being exchanged between the two countries, which is indeed fair.

MR. WILLIAMS: Eighty-five.

MR. MICHAEL: The member opposite says 85 percent, and I believe that figure - it's a very high number. All the agreement is doing is expanding that 85 percent figure closer to 100 as the ten years unfold.

I believe that we in Canada, and British Columbia in particular, have a good, trained, productive workforce. We have an opportunity to increase our sales, particularly into

[ Page 4493 ]

the western seaboard of the United States. I'm sure that the member opposite is aware of the percentages. He referred to the 10 percent figure a while ago, whereby the United States looks north and sees an opportunity for an additional 10 percent; we in Canada look south and see an opportunity for an additional 1, 000 percent - far from the 10 percent that they are about to enjoy.

In reading of some of the preliminary interest areas of entrepreneurs from overseas, I am of the opinion that, because of the value of the Canadian dollar, we will indeed have investment in British Columbia looking to penetrate the United States market once the free trade agreement clicks in. We are currently enjoying something like 23 to 25 percentage points over the U.S. dollar, and are able to gain that advantage in putting material into the U.S. market.

I talked to a manufacturer in the computer business in British Columbia who brings in parts from other countries -mainly the United States but also from Europe. I asked him what he was paying in the way of duty to bring these parts in, and I believe the figure was something like 12 percent. He assembles them and creates jobs in British Columbia, sells the commodities back to the United States and pays another 4 or 5 percent going the other way. I asked him what he saw regarding free trade, and he said that it's got to be good for him. He's going to get the materials cheaper; he's going to be able to manufacture them, put them together more cheaply, and sell them in the United States at a more favourable price.

The result of this would be that instead of buying 50 percent of his parts from the United States and 50 percent from Europe, he will probably be buying 100 percent from the United States, which has got to be good for them as part of the free trade agreement. He will be able to assemble them here and sell them back to the States, making an even better profit and being more competitive than he is today - thus creating more jobs in the province of British Columbia. That seems to make sense to me. It's something that has got to be positive for British Columbia.

If we in British Columbia think for one minute that the new president of the United States - whether it be Democrat or Republican - is not going to have to address the very lopsided trade figures they have in the United States, I think we've got another think coming. In the United States in the early part of January when the new president takes over, I think we're going to hear more talk of countervail than we ever have before. We in British Columbia and Canada would have lucked out, with all the opposition from the opposition parties, and the Canadian Labour Congress talking about the bad things of free trade. Hopefully we will see the two countries go-forward with the free trade agreement on January 1, 1989.

I'm convinced that in the early part of 1989, when the new president takes over, there will be more talk and more action taken on curtailing imports from other countries. Hopefully Canada will escape that. I think we've got a great province and a great opportunity, and we've got a clean environment.

The member opposite talks about California and competing with L.A. If a foreign investor is looking at the opportunity of setting up in beautiful British Columbia - whether it be the lower mainland or the Interior - and looking at setting up in L.A. . . . . I was down in L.A. last year, and I suggest that anybody who wishes to set up there go down and spend a couple of days there breathing the air and looking at their water supply before they decide to establish in that area.

I'm sure that if they do, they will come back to British Columbia and look at our environment, the reasonable price of our lands, the extremely good port facilities in this province, the clean and abundant water, the tremendously low hydro rates that we have in this province as compared to L.A. and San Francisco and San Diego and look at the trained work force. I'm sure that those entrepreneurs will decide to locate in the province of British Columbia and create the jobs here.

In conclusion, I find it very interesting that the members opposite continue to dwell on the negative aspects of free trade, because I see nothing but positive good news. Rather than listening to the opposition alone in some of the articles they've put out, I've talked to the entrepreneurs in this province - the people who make things happen. They are solidly behind the free trade agreement, and a lot of positive things are in the future as a result of that agreement.

MR. WILLIAMS: It's wonderful to hear your Pollyanna boosterism for somebody other than the minister for a change. I wonder if the minister has really reflected on how well we've actually done in Canada with current policies and the intervention that has been part of modem Canada.

Madam Minister, have you reflected on the amount of disposable income Canadians have added to through the years, through intervention and government policies and public policies in Canada. which are significantly different from the United States? Have you reflected on whether the average Canadian has been better off over the last decade or two than the average American as a result of the policies we have in Canada - made-in-Canada policies" Have you reflected on that? Do you know how much Canadians' disposable income has improved in recent years compared to the Americans?

HON. MRS. McCARTHY: I don't know where this member wishes this line of questioning to go, but I think you're talking about national policy regarding investment policy which has been, as you know, tinkered with quite considerably by national governments. We're talking about tariff decisions, customs decisions and a whole range of national policies. Therefore I would not be qualified to give that answer in terms of a national question, and it changes so rapidly.

We are in an ever-changing economy in this nation, and governments have a very great impact on that change. What we're saying here today in talking about a free trade agreement with our best customer is that first of all, it is a change that we on this side of the House would uphold, you on that side of the House are against. As I said before, I'm pleased you've made it so clear. because I think the people of the province want the opportunities that will come with the free trade agreement. There are things that governments can do and have done that make the difference - it answers the question you want me to answer - on a national basis. But if we were to latch on to any national process, which is what this is, a process in which the federal government has requested each government in the nation to adopt, to join in with them . . . . I think it's the first time, by the way, that a federal administration has had us sitting at the bargaining table - not bargaining but as onlookers; not at all sessions, of course, but in many of the negotiations.

We have had intervention in this nation. We've had intervention in spades from the national government which

[ Page 4494 ]

has not been to our benefit. We had it under the Trudeau administration, and we've had it in terms of the policies very many times over. The statistics prove that we’ve had more job creation under a non-interventionist government than under an interventionist. It may not be the answer you wanted to hear, Mr. Member - it may not even be the question you asked - but I can tell you that this is a national policy this government feels it can be very comfortable with. We've been invited, as I say, to send our representatives to view the negotiations and to have input.

I have to tell you, too, that we're very grateful to the very many people in this province who have been helpful to us. We've done a good job in our ministry of looking to the various private sector people, including those who have suggested that without adjustment they will have a downside for a while and have requested adjustment in the ten-year period. I speak of those in the Okanagan. We've had lots of input from them and from the many industry sectors. We've had very thorough industry sector negotiations over the last couple of years, and we have listened to their advice. From what I have read and the reports I've been given, the interviews I've monitored and the people I've spoken to who have been a part of that, we've been very well served by the information given to us by business and industry in the province to support a free trade agreement with the United States.

[4:30]

MR. WILLIAMS: The minister says governments can make a difference. Yes, and that has been the tradition in Canada, fortunately for all of us. We are a very different nation from the one to the south of us. We are a nation where it is not dangerous to be in the inner cities; we are a nation that does not have - has not had, at least - the bag ladies on parade, as in the downtown areas in the United States. We have a social net, a fabric, that is superior to the Americans'. All that is the result of government intervention, Madam Minister. We are a different nation because we have chosen to be a different nation; we would not march to the same drummer as the Americans.

The question I asked you was: what is the situation in Canada with respect to the increase in disposable income for the average Canadian citizen compared with the United States in recent years? The response was that you don't have an answer. The response was to knock interventionist governments in Canada, namely the Trudeau administration and I guess the Pearson administration and the like. Well, Madam Minister, that kind of intervention in terms of the Canada Pension Plan, medicare and our social welfare net has done for Canada far more than what has happened in the United States. If you want to know the numbers, they're something like this: in increased disposable income in interventionist Canada compared with the so-called free-market United States, between 1968 and 1984 the per capita disposable income of Canadians, after inflation, rose 60 percent, double what it was in the United States.

You knock interventionism and you ignore the reality of the modem western world in terms of planning economies. You're the one who was bubbling away about business plans of your ministry. Well, there can be plans for countries internally as well.

In Canada there has been a consensus about the plan. The consensus about the plan is that we will not tolerate what happens to the poor the way the Americans tolerate it in their system. That carries with it a certain price, to look after the poor and the sick and the old, and we readily accept it in this country. It's part of the modem tradition of Canada that we in this party are proud of and that I think the Liberals are proud of as well. But as you keep erasing away that border - and that's what your policy is - you then put new economic pressures on, in terms of reducing that welfare net, reducing our programs of help to the elderly and reducing medicare and our hospital system, and so on.

You ask any Canadian and you ask any American, "Would you rather have our health system in Canada than the one in the United States?" and you'll get a resounding answer. The answer will be: "We want Canada's system." We still have some way to go in improving that system to come even close to the Europeans and the Scandinavians especially.

Under this trade deal you have accepted a "harmonization programme that over the next seven years will move Canadian policies closer to harmonizing with the Americans. We are partners that are 10-90, Madam Minister; you know that. Harmonization under this trade deal means reducing the system in Canada to closer to the American system and the meanness of the American cities and the meanness toward the poor. That's the kind of inevitable pressure you will be creating. You will be shackling us in terms of public policy in countless ways, in terms of the freedoms of the provinces within Confederation and of sovereignty within this country.

The evidence is there. We have built for the average Canadian a better life through our system, which is different than theirs in the United States. In the United States, social programs ended with Roosevelt; they ended with the New Deal. In Canada the social programs continued under Lester Pearson and Trudeau. As a result, Canadians as a whole are all better off, and we're proud of that system. But for us to even achieve the overall levels of the EEC in Europe would require another $40 billion - just think of it - annually, Madam Minister. You are moving us into a system that will push us into great pressures in the other direction in terms of the social welfare net that has become the modern Canada. In Europe they are moving toward harmonization too: the same words used in the trade deal that you so willingly have swallowed. In Europe they define harmonization in terms of the social net, the social fabric and dealing with the elderly, the poor and the sick. They define it as moving to the standards of the Scandinavians - a model for the planet, for the world.

[Mr. Pelton in the chair.]

As we move into harmonization with the Americans, that means harmonizing downward toward the 90 percent. Do you see the Republican Party of the United States swallowing the medicare system of Canada? Do you see the Republican Party of the United States swallowing our hospital insurance system? Do you see the Republican Party swallowing our programs for the poor? Do you see them accepting our public enterprises? We have them; it's one of the significant differences between Canada and the United States - our successful public enterprises. We have them, like ICBC here in British Columbia. It's still a better insurance system than what we had before, which serves us better.

The shackles you are accepting under this so-called trade deal will be shackling provinces like Ontario and others that might well want public insurance systems. It's reasonable.

[ Page 4495 ]

It's part of the evolution of modern Canada, those kinds of public enterprises. They are accepted by the great majority of Canadians, yet they are not accepted by the great majority of Americans, because they haven't ever experienced them. Once they come up here and understand them, they can see the benefits there might be, but the pressures are all in the other direction in terms of the private interests in the United States.

I ask you to reflect on that, Madam Minister. You suggest that what I've been saying is that we don't want trade. Canada is a trading nation. What we don't want is a sandbox arrangement with the Americans. Who is really going to benefit the most out of the trade deal with the United States? It is going to be the six big families of eastern Canada. Madam Minister, that want assured access into the United States now that they have bought up everything that they think is worthwhile in Canada. That's the long and the short of it. That's what Eric Kierans suggests, and I think he's right. It's sandbox North America for the Reichmanns and the six big families of eastern Canada. That's what it is really all about. It's so Robert Campeau can go and do his forays into the t United States. Does that really benefit Canadians? I think not.

What we should be concentrating on is an industrial strategy that does the most for the average small Canadian t firm. That has to be a more sophisticated strategy than what you people are talking about. It simply has to be. The t evidence is there. We in Canada have benefited from our system. It's different from the American system.

The irony is that some of the interventionist activities have been incredibly beneficial. Think of telecommunications in this country. When the Americans look at the Canadian system, they look at the $2 billion in expenditures t by Bell Canada for telecommunications equipment. They have essentially bought from their own supplier - Northern Telecom - and we have developed a major telecommunications industry in this country internally in an interventionist kind of way.

Other kinds of intervention. This administration, your ministry, treasury and others agreed to a program for the modernization of the lead plant in Trail. Under the trade deal, would you be able to carry out that deal that you carried out with Cominco? The answer is no. The likelihood then would be that there would be no smelter in Trail. That would be absolutely devastating for the Kootenays.

HON. MRS. McCARTHY: But you were against that.

MR. WILLIAMS: No, no, come on now. Straighten it r out.

Look, creative intervention in this country, using the s power of government with enterprise, has worked very well for Canada, and it can continue to do so. But we swallow the s trade deal and those options are closed. What you people and your Tory brethren are doing is tying one hand behind our back in terms of opportunities of government policy in developing this country. What you are saying is: we are jumping into that American sandbox, and we are buying their system. But the reality is that their system doesn't work very well anymore. You look at Europe; you look at Japan. The t successful economies are there. The United States is a faltering giant, and you want to jump into that sandbox.

We in Canada have evolved a policy through GATT that has worked very well; not bilateral arrangements but multilateral arrangements with the trading nations of the world. By and large it has worked very well. You are opting in with a Giant that is failing. That's really what you're doing. The proof of the success of this nation is there, as I mentioned a few minutes ago, in terms of how interventionism in recent decades in Canada has meant far more disposable income for the average Canadian than has been the case in the United States.

We want a made-in-Canada policy for Canadians, and you by your actions are preventing that possibility in the future. So don't give me that rhetoric, Madam Minister, about worrying about the young people and their future. It's because we worry about the young people and their future that we think that they should have a Canadian option, not the one you're talking about.

HON. MRS. McCARTHY: Mr. Chairman, once again the socialists fly in the face of the reality of the thing. We need a strong economy to provide the same services that the member wants to scare the whole of the province into thinking are going to be taken away from them. They're not even on the table. They're not even in the negotiating. You have been told that time and time again. But in order to frighten the electorate, in order to get everyone very upset hat hospital services . . . . We talk about hospital services; we talk about all of the social network. The safety net is going o be taken away from everybody in the province of British Columbia. and the big, bad Tories are going to do this to you. The anti-American rhetoric that comes out of the member, because he doesn't trust our best customer . . . . It's so clear n his presentation today. He'd like us to go into the European model, where it costs so much to retain the social services hey have that they are working all of the year for the Government. And that's what you call the ultimate society.

The Americans have provided a standard of living for heir people. We have provided a standard of living for our people that is the envy of the world. We're not asking for the Americans to take over our social structure, nor would they have an opportunity to do so.

Interjections.

HON. MRS. McCARTHY: It's not in the agreement, and t doesn't matter how you "oh, oh!" on that side of the House, trying again to scare the people of British Columbia. So important is it to you to carry on with your anti-American bias, to carry on with your scare tactics with the people of British Columbia that you would give them that kind of rhetoric in order to make a point.

Surely the socialists of this country have some valid points to give without the scare tactics. That's what's so uprising about this debate on free trade. You continue to give us the rhetoric and the politics of fear. Surely you've got some good arguments.

MR. WILLIAMS: Yes, you just heard them, but you didn't listen.

HON. MRS. McCARTHY: Not very good arguments. You compare the 1970s, which were characterized by inflation and buoyant commodity prices - trying to make the oranges and apples comparison once again. We're a supplier n Canada of commodities such as forest products and minerals. We're a supplier of energy. We're an export nation. We are a net importer as opposed to the United States.

[ Page 4496 ]

[4:45]

You know the whole of the argument that the member brings to this House in terms of his negative reaction to the free trade agreement . . . . Really the only thing that he's brought out of any significance at all is a dramatic display of fear mongering, to suggest to the people of British Columbia that they'll lose their sovereignty, that they'll lose all of their services, and Canada beware, you're all going to become Americanized overnight. Again, if there is so much fear in the socialist party in this nation that we as Canadians are not able to withstand a trade agreement . . . . A trade agreement is what we're talking about. We're not talking about a social agreement. There has been no social agreement struck or suggested by the national government. The socialists will have us all believe it, and wrongly so.

It's too bad, because there are some things in the trade agreement that this government does not uphold. There are some things with which we know there will be some problems in the economy. We have recognized them, and we are working with those areas. In the Okanagan the Premier and the Minister of Agriculture (Hon. Mr. Savage) have been aggressive in their work with that sector. We know it is an adjustment they will have to make. It has not been a last minute repentance at all. For over a year they have been working. Even earlier than that, under a previous government, it was recognized that there would be some adjustments to be made in that industry. Those are valid points; those are points that we can all agree on.'

The socialist rhetoric on this question, the weakness of the argument against a free trade agreement, is sad to see. I regret that we have had such a poor debate on the free trade agreement, because it is an agreement which will provide a standard of life for our people that is better than what we have now, and it will create jobs and will be something that we can take into the next century to provide jobs for the young people who will be seeking jobs in the next 12 years, before we reach the year 2000.

Mr. Chairman, I understand that . . . .

HON. MR. STRACHAN: No, we've got some time now.

HON. MRS. McCARTHY: I'm sorry, I thought we were to adjourn because of the royal family.

Again, I think British Columbia's stand on this is very supported by the people of British Columbia.

MR. WILLIAMS: Well, the soup's getting a little weaker. The soup you're trying to peddle today is getting weaker and weaker. You're dismissing, Madam Minister, the period from 1968 to 1984, when Canadians' disposable income - the increase - was double that of the United States by Canadian made-in-Canada policies. And you dismiss it with a wave of a hand - that spending money, important funds for the average Canadian citizen. Our system did better than theirs in delivering to the average citizen, and we provided a better social welfare system to boot - no mean achievement at all.

Don't give me this Negative Nellie socialist stuff that you're always wanting to peddle in this chamber. I wonder if you've read what Adam Zimmerman has said of late about this deal, because in our local press, we don't get it - even those Adams on the board of Southam. You have to go to the Toronto Star to see what Adam Zimmerman is saying about this deal. The last I checked, Adam was not a raging red socialist. He heads up MacMillan Bloedel in British Columbia, as most of us are aware.

He said in the Star on March 28, after attending conferences in the United States with their elite and establishments: ... I do remain concerned, and it is not popular for a businessman to say this, that from the American point of view, Canada under free trade may be seen merely as a 10 per cent addition to the American economy, ' said Zimmerman, chairman of Noranda Forest. 'I think"' - this is Mr. Zimmerman talking, not those terrible socialists - "'we may find some intense pressure to consolidate"' - i.e., lose our Canadian nationhood. He said that the Americans at that conference objected to Canada's provincial health care plans because they mean that employers do not have to provide health plans for their workers, while American employers must.

As we erase that border there will be these competitive pressures to remove our social welfare fabric in Canada. They have the right-to-work states and the no-minimum wage states, and more and more we will end up with Canadian businessmen saying: "We have to remove these things, because we can't compete with our American competitors, because we're doing the proper thing in Canada."

Madam Minister, it seems to me that what you are doing by your action is tossing aside a system that has worked very well in this country. You are indeed removing the border. You talk about how we're talking scare tactics. You're the kind of administration, Madam Minister, that is moving more and more into privatization of more and more things.

MR. ROSE: Why?

MR. WILLIAMS: Well, God knows why. Ask the Premier.

MR. ROSE: Brings down the wages.

MR. WILLIAMS: Part of the reason is beating down wages, and part of the reason only he can answer for, and in time he will have to do that.

Privatization, indeed. As you people privatize more and more, there will be private firms beginning to manage some of our care facilities, hospitals and social programs. Under this trade deal, we cannot say that these must at least be Canadian firms that carry out our social programs. You say that that isn't the erosion of Canada? That is indeed the erosion of the Canada we have gotten to know in the post-war period, for generations now.

You, through your privatization activities linked with the trade deal, open up the opportunity for the Americanization of our social programs in Canada. Make no bones about it. That opportunity is there, and we will not be able to discriminate. You tie one arm behind our back in terms of public policy in this nation as a result of this trade deal. You remove this opportunity to control our own destiny in these social areas, as well, by this trade deal.

Don't you just wave your hand and say: "Oh, it's just a trade deal. " It is not just a trade deal. Were it just a trade deal I'd have no trouble with it, but it is not. It invades almost every part of the fabric of modem Canadian society that we have gotten to know since the Second World War. This is a major invasion in terms of what Canada is all about.

What do you have to say to Adam Zimmerman - that rabid socialist who is finally beginning to be concerned about this trade deal, because it isn't just a trade deal?

[ Page 4497 ]

HON. MRS. McCARTHY: For some reason, the hon. member wants to mix up privatization. It's entirely separate from the free trade deal, and I don't know why he is getting it all mixed up, it has no reference whatsoever to the free trade. Both the Prime Minister of Canada and the Premier of this province have repeatedly said .... It is a matter of policy with our government and, although it is not our free trade agreement, we are supportive of the fact that the national government has said that social programs are absolutely not part of the free trade pact - the act.

The member continues to refer to the period between 1968 and 1984, so that was some kind of a comparison. The terms of trade were in Canada's favour during that time. That is what drives those comparisons and figures that you want to leave with us today. We do disagree, and I disagree entirely with your thesis that all of a sudden all of the social programs are going to go, through some backroom negotiations, and with your remarkable fear mongering statement that the conditions of work in our country are going to be changed magically overnight. That's really fearsome stuff, and I'm sure that the people of the province will not believe one whit of what you are saying.

MR. WILLIAMS: The first test of what the people of British Columbia are going to believe about the trade deal is coming on June 8 in Boundary-Similkameen. You, who have always held that riding, can go up there. I urge the Minister of Economic Development - I challenge her right now - to join me in a debate in Penticton on the trade deal. We'll just see which story the people of the Okanagan and Boundary country are concerned about. They think they are vulnerable, and they are right.

You talk about ripping out vineyards and the soft-fruit orchards of the Okanagan, while the scallywag supporters talk about getting rid of the ALR in the Okanagan. That's their answer: to get rid of the agricultural land reserve so they can make a quick buck in real estate, paving over these orchards that are going to be killed by the trade deal that you support. That's the kind of short-sighted Socred policy you stand for. I challenge you here and now, Madam Minister, to a debate in Penticton, any time between now and June 8.

All of a sudden the minister is silent. What she's saying is that she's not ready to join in that debate in a riding that is going to be viciously impacted by the trade deal. There's the test of your beliefs. Are you ready for the debate, Madam Minister?

HON. MRS. McCARTHY: On the free trade with the United States for this province, I have no difficulty whatsoever anyplace in this province to debate with the member for Vancouver East. Why we should draw a crowd for that member in Penticton, I can't imagine why we'd be interested, frankly. I can't imagine why we'd be one whit interested in drawing a crowd for that member.

MR. WILLIAMS: She's a runaway minister; she just ran away. Come on! Are you or aren't you willing to debate? You will?

HON. MRS. McCARTHY: You didn't understand, obviously. I said yes, I'd be pleased to. I said yes. Mind you, I think it's a waste of time trying to get you a forum. It's too bad you have to resort to that to get a forum for the NDP policy.

[5:00]

MR. WILLIAMS: The minister then agrees to a debate in Penticton between now and June 8. Is that correct?

HON. MRS. McCARTHY: I'll find out when ....

MR. WILLIAMS: I look forward to that, because I think it's a very important and serious matter. That region is facing real difficulties as a result of this government's decision regarding the Coquihalla Highway, which will have . . . . Not everything is positive, Madam Minister; I'm sorry about that. It will have positive benefits for some of the interior, indeed. but it will have some negative impact as well. It will have a negative impact in Boundary-Similkameen, unfortunately. At the same time, they're on the firing-line in the trade deal as well.

HON. MRS. McCARTHY: We've been working with them on that. We appreciate that.

MR. WILLIAMS: Sure, but it's after the fact.

HON. MRS. McCARTHY: No, it isn't. That's not true.

MR. WILLIAMS: Look, they face a very tight timeframe in terms of the negative impact on their economy, in the grape and wine industry of that region. Is that not so? It's a very tight timetable that you have accepted on behalf of this province. They have put a good chunk of their lives into developing this new industry, urged on by this government -and we think it's most worthwhile. I personally have been very impressed by the evolution of the wine and grape industry in the Okanagan Valley. I think it's unique and exciting. One gets the feeling that it's like the beginning of the Napa Valley at the turn of the century. But they've been dealt a body ~low by the trade deal. You use the term "adjustments." It's a pretty heavy adjustment for them. It deserves a full debate in the riding, and I look forward to that, indeed.

Was not clear to me, Mr. Chairman, whether adjournment should be soon with respect to the visitors that are arriving. Maybe the hon. House Leader can ....

I move the committee rise, report progress and ask leave to sit again.

The House resumed: Mr. Speaker in the chair.

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

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 5:04 p.m.