[ Page 4735 ]

CONTENTS

Routine Proceedings

Forest Amendment Act, 1988 (Bill 28). Hon. Mr. Parker

Introduction and first reading –– 4735

Committee of Supply: Ministry of Forests and Lands estimates. (Hon. Mr. Parker)

On vote 40: minister's office –– 4735

Hon. Mr. Parker

Mr. Miller

Mr. Kempf

The House met at 10:09 a.m.

Prayers.

Introduction of Bills

FOREST AMENDMENT ACT, 1988

Hon. Mr. Parker presented a message from His Honour the Lieutenant-Governor: a bill intituled Forest Amendment Act, 1988.

HON. MR. PARKER: The amendments to the Forest Act reflect the new directions and policies that were introduced by this government in mid-September last year. Last December we amended the Forest Act to transfer from government to industry the responsibilities and costs for basic silviculture on Crown lands. Our goal now is to increase the diversification in the forest industry and ensure forest renewal in the province.

We also want to give long-term tenure-holders greater opportunities and responsibilities and we want to provide for a more simple, direct, responsive and efficient system of appeal. To encourage industry diversification we are substantially expanding our small business forest enterprise program, doubling the wood available to smaller operators — up to 15 percent of the current apportioned volume in the province from a level of just over 7 percent.

The amendments will also stimulate additional wood processing in our province. We want higher returns for industry and the province from value-added products and through diversified marketing. Our initiative to increase industry diversification will therefore provide more jobs for British Columbians. The amendments introduced also fulfill the government's commitment made last fall that harvested forest lands will be regenerated. From now on, cutting a tree will mean replacing the tree. Harvesting and replacing with a new crop of trees go hand in hand.

I've already mentioned that we amended the Forest Act last December to give industry the responsibilities and costs for basic silviculture on Crown forest lands. The amendments we have introduced today put in place the second part of our commitment: to renew forest lands harvested by small operators. Let me repeat for emphasis what I just said: for every tree cut, we will replace one. Our goal of replacing every tree cut is a first for British Columbia and an example for the rest of the country. This is an outstanding achievement for the government and the people of the province.

The bill also gives long-term licensees greater opportunities and more responsibilities. We will allow more tree farm licences to be established by increasing the current allocation of the allowable annual cut to this form of tenure from 25 percent up to 67 percent. Through these amendments industry will get more responsibility and accountability for the long-term planning and management of our forests, and thus the government's costs will be reduced.

Through the stronger long-term tenure we will be increasing investment security for the industry. In return for this security the bill ensures that industry will give commitments to diversify its products and thus expand job opportunities in the province.

I ask members of both sides of this House to support the amendments we have introduced through Bill 28.

I move the bill be introduced and read a first time now.

Bill 28 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the Day

HON. MR. STRACHAN: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF
FORESTS AND LANDS

On vote 40: minister's office, $304,458.

HON. MR. PARKER: I'm pleased to present to the House the estimates of the Ministry of Forests and Lands for the 1988-89 fiscal year. Last year I promised a new era of forest management in British Columbia and I outlined my goals. These goals required some fundamental changes in how we manage our forests and shape industrial development. We have made these changes, including the legislation needed, and now are rapidly moving toward the new era I outlined last September.

We must do everything we can to ensure a healthy forest and a profitable industry, resulting in increased employment and a climate assuring systematic investment planning and resource development. British Columbia must keep abreast of today's highly competitive global economy, identifying new markets for our products and ensuring that we remain capable of meeting new global challenges with reduced reliance on the United States market.

[10:15]

To accomplish these goals, government has committed over $584 million this fiscal year. Our goals include: healthy and vigorous forest and range resources; a continuous, adequate supply of timber and forage to the forest and livestock industries; opportunities for forest recreation, including wilderness experiences; increased employment through a vigorous, efficient and world-competitive woodprocessing industry, with increased production of higher value and secondary-manufactured products; a high standard for the management of our forests and range resources on an integrated use basis; a fair return to British Columbia for use of our valuable forests and lands; and a service-oriented management style for the ministry focusing on new opportunities and a high level of service to our clients.

During the past fiscal year and for the future, we are implementing the new processes and the technology necessary to obtain more accurate information for establishing appropriate levels of harvest. This year I am pleased to announce that over $5 million more is being provided for the forest inventory program — a 60 percent increase. This will allow the British Columbia Forest Service to keep pace with the new technology in data gathering, management, quality control and monitoring of changes in our forests due to harvesting, fire and insects.

Also, more money will be invested in forest renewal. Up to $223 million will be spent on silviculture. On major tenures, we have turned over the responsibility and cost for

[ Page 4736 ]

replacing our forests to our strong and innovative forest industry. Recent amendments to the Forest Act require industry to assume the full costs for basic silviculture, including seed collection, seedling production, site preparation and other costs required to replace our forests after harvesting. We will ensure silviculture performance is audited and enforced.

The Forest Act has been revised to make wilderness management an explicit responsibility of the Forest Service. Since then, we have already designated the Height of the Rockies wilderness recreation area, the upper Stein and the lower Stein as provincial forest wilderness areas. This spring I will release a policy paper as a first step in developing wilderness regulations, policies and procedures. We will seek public input on wilderness policy, suggestions for wilderness management and ideas for new wilderness areas.

We will be initiating programs to develop new forest products to expand and diversify the market for British Columbia's forest output. Our objective is to create even more jobs for British Columbians. Our emphasis on encouraging more wood processing through competitive sales, tenure policies, fees on log exports and product technology research in concert with the industry will see us identify potential new products and markets. We will be doubling the amount of wood sold by the province on a competitive basis through the restructured small business forest enterprise program. Up to $53 million will be spent to provide small labour-intensive operators with access to this timber — almost 140 percent more money, than last year.

Research will be enhanced considerably by the province's commitment to the construction of new, Forintek and FERIC facilities at the discovery park at the University of British Columbia with some $13.5 million in capital grants and land contributed over the next two years. We have established a new integrated resources branch in the Forest Service to manage the competing demands for timber, forage, recreation, wildlife and fisheries habitat, energy, minerals, heritage resources and natural areas. We will be working, as we have in the past, with all other resource management agencies, industry and the public to implement the integrated resource management concept, the selection and use of the best possible mix of resource uses and wilderness preservation in our provincial forests.

We have passed legislation which has established the framework for a fair and equitable pricing system for timber which is sensitive to market fluctuations, production costs and the value of the products. Direct provincial revenue from all forest sources will be close to $700 million in fiscal '88-89. This is a more reasonable return to the people of British Columbia.

A record number of trees — almost 200 million — were planted last year. This number will increase even more as industry implements its new responsibilities.

I must add, Mr. Chairman, that we can be proud of the increasing awareness among British Columbians of the value of our forest resources. National Forest Week was held May 1 to May 7 this year, promoting the vital importance of forests to virtually all Canadians and fostering a greater appreciation and support for improved forest management. Again British Columbia communities proved to be among the most active in Canada in conducting many events.

I am pleased that government proclaimed on February 18 the western red cedar as British Columbia's provincial tree, a fitting symbol of our forests and what they mean to all British Columbians.

I am also pleased to advise that our green gold grants program will have sponsored 50 forestry public awareness projects in communities throughout British Columbia by the end of this year. This three-year program was established in 1987 to increase public awareness of forest management in British Columbia by working with non-profit groups across the province. The program provides funds, matched by the non-profit organizations through volunteer labour or donations, to community groups which have the ideas and people to get the job done but which lack the capital to see these worthwhile projects through to completion. The projects include brochures for demonstration forests, displays for woodlot associations, forestry radio announcements, portable forestry demonstrations at schools, videos and slide shows.

Consistent with my goals for the ministry, the Lands activity of the ministry will focus on a renewed emphasis on market value pricing. This will enhance private sector development opportunities while ensuring a fair return for the use of public land. Continued emphasis on marketing lands for economic development throughout the province, and the Crown land marketing catalogue with listings of over 1,500 properties valued at over $150 million, combined with proactive marketing activities, will ensure continuing availability of Crown land, new opportunities created for the ownership of selected recreational lands, and a new strategy in concert with private sector developers for commercial backcountry recreation.

We are finding ways to diversify our economy by tapping the vast recreational potential of our province, and this will begin by developing a clear articulation of land rights for commercial recreational activities, supporting growth of an industry that markets recreational experiences in the province and encouraging investment in this unique tourism sector.

I have delivered on my first year's promises of a new era of forest management in British Columbia and intend to press ahead to full implementation, with proper planning and input from industry and the public. I am confident that this course will ensure that our forests and Crown land resources will continue to meet the needs of future generations.

MR. MILLER: I have a fairly long list of specific questions that we'll be asking as we go through these estimates, but just to comment on some of the minister's opening remarks about a new era in forestry in British Columbia.... I think that is a moot point at this particular time.

There's no question that there's been what some describe as a radical change in forest policy with respect to the stumpage system and in the bill introduced today in removing a certain percentage of the major licensees for the small business forest enterprise program. There's no question that the major impetus for the increase in revenue was a result of the actions of the U.S. lumber producers and U.S. government in terms of the countervail action; and we know the history of this government in terms of responding to that.

The minister uses an old phrase that goes back many years. The concept is defined as: we'll plant a tree for every one cut. It seems to me that that is a gross oversimplification of the work required in forestry, particularly in reforestation. It's not a simple matter of planting a tree for every tree cut down. If we stick to that concept — and it's certainly one that's been tried and proven not to work — then we may still be in trouble. It seems to me that forestry work is never over.

I was reading an article last night on Sweden.... The minister might want to enlighten the House about his visits; I

[ Page 4737 ]

understand he was in the Scandinavian countries to see what kind of work they do there. Even there, in the advanced state of their industry, it's an ongoing and evolving process. It never ends. It's not simply to plant a tree for every one cut. In terms of reforestation, despite the increased activities, we have to deal with the possibilities of fall downs in certain areas. That's a debatable point, depending on who you're talking to about the impact that might have in a particular region. But it seems to me from my reading that we're going to have to do that.

Clearly, in terms of shifting the focus of the industry, the value has to be added on to the other end. The minister has indicated that they intend to proceed in the direction of more value added. The more sophisticated countries in terms of forestry are clearly shifting the value generation over to the production end of forestry — not as we have traditionally done in this province in terms of some of the basic commodities such as pulp or 2-by-4s. There needs to be a lot of work done there. I'm not certain what the percentage of money going into research is as compared to the money that forestry is worth in this province, but we'll get into that as well.

The minister mentioned the $4 million increase in terms of appropriate levels of harvest. That's encouraging because I note — and again it's something that we'll explore further — there has been a significant increase in the harvest level in 1987 over 1986. We will want to know where that's coming from, whether it's appropriate and why that increase is taking place. In terms of the changes in legislation that have been made thus far in forest policy, there are still many questions, not the least of which is the stumpage system. There is also the question of incremental silviculture, its application and whether or not it's working. That's the kind of work that has to be done, not the basic silviculture work that has been done thus far. I note the ministry has done some experimental work in that regard, but I don't think that it has really been widespread in the industry.

The wilderness policy paper is due, I gather. We'll have to wait and see what it says. Certainly the integrated resources branch is welcome. It's been a highly contentious issue in this province, as the ministry is well aware. We have to do a better job of dealing with the various pressures that are put on forest land, and do some realistic work in terms of the values that can flow from alternative uses.

The small business forest enterprise program. Again, we'll deal with legislation on that. We have had discussions here; there are problems. I don't think it's a simple matter of increasing the small business program from 7 to 15 percent. It seems to me, in some of the work the Forests and Lands Committee has done and in some of the information that's been conveyed to us in those public hearings around the province, that there are some problems with the small business forest enterprise program in terms of the kind of bidding that's taking place, who may be behind some of the bidding that's taking place, and whether or not that's totally realistic. Certainly the operators welcome the opportunity to have additional access to timber. Clearly, in terms of its size, it's been the revenue generator. I note the significant increase in the budget on that side.

I think that with those remarks I'll get right into some of the questions I have. I want to start with the budget as presented, without taking too much time to ask the minister to comment on the first item, the minister's office. I note in that regard that there's about a 45 percent increase in the operations of the minister's office. It may be completely justified, but it is a significant increase, and I would ask the minister simply to advise us what that constitutes.

[10:30]

HON. MR. PARKER: In the budget preparation process for the last fiscal year, the allowance for the operation of the office was basically the Lands, Parks and Housing budget. When Forests and Lands was created, we inherited the underfunded level for a very small ministry. We've increased by one FTE, and we got our operating expenses up to a level that more aptly reflects the phone and stationery costs of the office.

MR. MILLER: One more question here, and then I think the member for Omineca (Mr. Kempf) wants to jump into the debate. I see under STOB 30 the minister has had a fairly significant increase: that's office and business expense. In fact, STOB 30 under the minister's office is the largest of any ministry. Certainly there are other ministries that are complex, but I see that the range of expenses listed in some of them is $5,000, $11,000, $12,000 and $9,700. Yet we get to the minister's office and we have $20,000. Is that really tied in with the increase of one FTE — this significant increase, from $523 to $20,000?

HON. MR. PARKER: STOB 3 is $37,178. It's an increase from....

MR. MILLER: Thirty.

HON. MR. PARKER: Right church, wrong pew. STOB 30 is $20,415. That's our best estimate of operating expenses for the office.

MR. KEMPF: Just a few remarks following the opening remarks by the minister with respect to this ministry. First, I'd like to thank the government for bringing these estimates before this House on the day before the standing committee of this Legislature, the Forests and Lands Committee, is meeting in Vancouver. I think that was a beautiful move on behalf of the government. Anyway, it's that kind of government, and they're making those types of moves in this province.

A few remarks with respect to the system now going into effect being a fairer system. A fairer system, Mr. Chairman, I must ask, to whom? What changes are being made that are fairer to the British Columbian who is now in the resource and attempting to stay there, or fairer to the British Columbian trying to partake of his or her own primary resource?

With regard to a fairer system of timber pricing, I find it difficult to understand how it's a fairer system when stumpage being charged the small business enterprise program has in the last 30 to 60 days increased by 800 percent. A fair and equitable system indeed! The small business enterprise program stumpage is being increased by 800 percent while the multinational monopolies have an opportunity to increase their hold on land in British Columbia through TFLs from 25 percent to 67 percent.

The minister speaks glowingly about that kind of move in the primary resource of this our province of British Columbia. Some distribution of the people's resource! It is a continued giveaway, as we've seen for the last 40 years in this province, of that resource to those who do business outside of the boundaries of the province. It is a continued giveaway,

[ Page 4738 ]

only worse; it is a system that's going backward, not forward. It is a continued giveaway to the multinational monopolies, to the point where even those which are hanging on by their fingernails today will be gone tomorrow. They will be gobbled up as we've seen in the past, by the five great giants which control not only the forest industry but also the government of the province of British Columbia. That's quite apparent. It is abundantly apparent to me, having been on the other side of the fence.

The minister speaks glowingly about increasing the timber in the small business enterprise program by 10 percent. How long, Mr. Minister, do you think those people now in that program are going to be there with an 800 percent increase in their stumpage rates, and the only market they have is to sell to the giants? What kind of free market system is that in the forest industry of British Columbia?

The minister and this government have only seen the tip of the iceberg in the boycott of six small business enterprise sales in Bums Lake last week. Loggers — the last people you would ever expect would carry a placard — carried placards and stopped those six sales because they felt it was better to go broke carrying placards than it was bidding on sales and doing it out in the bush. That's what this province has come to. That's what this industry has come to in the province of British Columbia. You call that fair and equitable? Fair and equitable to whom, is the question. Fair and equitable to the MacMillan Bloedels and the B.C. Forest Products of this world, but not to British Columbians.

You talk glowingly of taking another $600 million or whatever it was from the industry. It isn't half enough, but you took it all from the interior to a point where operations even the size of Lignum's in Williams Lake, which we had the opportunity to tour with the committee a couple of weeks ago, are on the rocks through your policies. And you call it fair and equitable? Fair and equitable to whom? To those sitting in New Zealand or Toronto and controlling the industry in British Columbia. Maybe you've just seen the tip of the iceberg from what happened in Bums Lake last week. Maybe it's about time, and maybe British Columbians had to be pushed to the wall in order to stand up for their rights in their own province. Maybe it's only the tip of the iceberg that you saw in Bums Lake.

I probably won't be around for a lot of your estimates, because I'd rather be out there where something may just happen. Certainly nothing will happen in talking to this minister in this chamber. That's quite apparent, because he's not listening to the people our there. If he were, those kinds of stumpage rates would not be in effect. You can put as much wood as you want into the small business program, Mr. Minister, but if you charge $25 upset per cubic metre, you're going to have no small business enterprise program anyway, because nobody can afford to be in it. Then your friends in the multinational monopoly can take it all through surrogate bidding. You've done all this, but you haven't stopped surrogate bidding. Now it isn't necessary to stop surrogate bidding, is it? Because you've put the little guy out of business anyway through your stumpage appraisal system.

MR. WILLIAMS: Explain what surrogate bidding is. He may not know.

MR. KEMPF: Well, he may not. Maybe he does, because I'm sure he talks about surrogate bidding with his friends in the multinational monopoly on occasion.

You're proud of that, are you, Mr. Minister: an 800 percent increase in the stumpage for small business? You think that's great? You really think that's great, Mr. Minister, when you're taking another $600 million from the multinational monopoly? You think it's great to increase the stumpage for small business enterprise by 800 percent, putting them out of business, taking their very livelihood from them? Well, we'll talk about that at a public meeting in Bums Lake tomorrow night, which I will attend and which will take me away from this debate. I'd sooner debate it there. You've only seen the tip of the iceberg, because real British Columbians in the forest industry, their forest industry, have got their backs to the wall.

I had great hopes — and I look at the back-benchers of this government — that this administration would make those changes necessary to have a fair and equitable system in the forest industry of British Columbia, but that didn't happen. It's evident to me today that it's never going to happen, not with this administration. That's evident, unless British Columbians such as the 42 loggers that showed up with placards last week boycotting six small business enterprise programs...such as they have shown. That's what has to be done, I guess. I guess that's the bottom line.

He talks glowingly of giving away another however many percent it is in TFLs, tightening the grip on the forest industry of the five companies which control this province. Fair and more equitable system indeed!

Yes, I'm proud of the awareness that British Columbians now have in their industry. I'll tell you, it's a different outlook than you and I have, Mr. Minister. There is an awareness out there, and there is an awareness growing on behalf of the people of British Columbia as to just what has gone on and is continuing to go on in the forest industry of British Columbia. There's an awareness of people in my constituency that if something isn't done, 25 years from now their children and their children's children won't have anything to harvest. Yes, they'll have a lot to plant, but there won't be any trees left to harvest.

[10:45]

If you think by directing the Takla-Sustut timber toward Prince George and keeping it in the Prince George TSA is going to solve your problems of overcut in that particular TSA, you've got another thought coming. Short-term gain for long-term pain is what you've got, Mr. Minister. If the people of north-central British Columbia don't understand that or don't believe that, they need only take a look around their own communities to see how quickly the good timber is disappearing. Twenty-five years from now they'll be left with a legacy of silviculture that this province can be proud of. There will be a lot of jobs in the future in silviculture and reforestation, but there won't be any left in harvesting, Mr. Minister, with this kind of administration. A fair and equitable system indeed!

It's quite apparent that the government doesn't intend to change the direction of this industry, as governments in the past haven't. Surely, unless something is done, unless the people of this province stand up for what is necessary and unless there is some real fairness and equity in the forest industry in British Columbia, that forestry industry is doomed.

HON. MR. PARKER: The member for Omineca has a lot to say, but there is not much substance there. He likes to tell you part of what's going on. He neglected to inform the

[ Page 4739 ]

House that the upset prices determined in the small business program are done exactly the same way that the upset prices are done in the cutting-permit appraisals for renewable tenures. It's exactly the same system. He didn't bother telling the House that the bid prices by the operators in the Burns Lake area in the past have been right in the neighbourhood. of the current upset prices as calculated by the new comparative value pricing system.

That means that bidding starts where the bidding stopped in the past. The system is fair because it goes on exactly the same basis for everybody. It's a comparative value-pricing system, and if the member cares to spend a little bit of time with the data that was provided him last fall, he could sort that out for himself because it is in quite straightforward language.

He likes to talk about giveaways to multinationals. The member has a great hate on for multinationals stemming back probably to his days in the industry. It must be rooted in something. There are no giveaways. A simple perusal of established legislation, which is the same legislation that was in place when the member was Forests minister.... He knows that it's not a giveaway, that it's a very involved public process. There are no giveaways and there is a great deal of responsibility passed to licensees once the decision is made to award a tree-farm licence.

By going with tree-farm licences, we preserve for the people of British Columbia the ownership of the forest land, but we get close to emulating places like Sweden, which the member for Prince Rupert (Mr. Miller) alluded to earlier in his discussions, where they have over 200,000 small woodlot owners. They tell me that the average size is something like four hectares. It's extremely difficult to manage a national forest policy and provide a sustained, dependable woodfibre supply to the industry in Sweden. There is a great deal of difficulty encountered by both government and industry in making sure that the fibre supply is economic to the industry for the well-being of the nation.

[Mr. Rabbitt in the chair.]

Deputy Minister Ben Marr and I discussed with officials in Sweden and in Finland their woodlot and tenure programs. Their advice to us was that we were on the right track by retaining ownership of the land and that the security of an area-based tenure like a tree-farm licence provides the means and incentive for much more intensified forest management. We are getting as close as possible to providing almost the private land situation for the major licensees, so that they will undertake the same level of management as we see in the Scandinavian countries and the United States, where most of the forest lands are privately held.

MR. WILLIAMS: Oh, come on!

HON. MR. PARKER: The first member for Vancouver East is demonstrating his ignorance of the programs, policies and industry globally, as usual.

MR. KEMPF: Everybody's ignorant but you.

HON. MR. PARKER: It seems that way at times, considering what's contributed from across the floor.

The tree-farm licence program will provide a much more effective and intensive management of the forest lands of British Columbia than a very loose, volume-based tenure would.

The silviculture programs in the various timber supply areas in the province are operated basically by the licensees who now have the responsibility to carry the cost of forest renewal to a free-to-grow state, which means that the commercial trees have to be beyond the height of competing vegetation. That responsibility and those programs ensure continued allowable annual cut in the province. Over the long term, as we get out of the old-growth wild land forestry situation and into a management situation of managed forest stands, where we're dealing with smaller stands because we're working shorter ages, rotations that reflect the growth capacity of the various forest sites, there will be drops in some timber supply areas and practically no drop in others. In some, there may be a gain, depending on the forest land and growing sites.

When the member for Omineca screams alarm that there won't be any wood for the people in — by that time, what would have been — his constituency, I think he's just trying to alarm folks who don't know any better, who need only spend a little time with their district manager, who would be more than pleased to meet with them individually or as a group to explain the forest management of the Lakes timber supply area. Our ministry staff are very proactive and are happy to meet with the public at any time and share with them information on the forest management programs in the various timber supply areas in the province.

The member for Omineca mentioned the term "surrogate bidder," which I presume means somebody bidding on behalf of somebody else for small business programs or timber sales. To the best of my knowledge, there have been a number of instances where this appears to be taking place. I've been tracking now for a year who the participants are who are bidding for these small business sales, and who has been paying the deposit cheques. In some instances, the deposit cheque seems to be paid by somebody in the timber business, either a sawmill or a log broker — somebody of that nature. But there are very few, surprisingly enough; I thought there were a lot more.

Surrogate bidding is a reality, I guess. The way we try to deal with it, from this point on, is that in the increase in the small business program.... We're lifting it to 15 percent, and we should be at that by the end of next year. A good part of that increment will be sold on a bid-proposal basis, on a little longer term — non-renewable tenure still — so that we can see further participation by the small business sector, especially those who want to do some manufacturing, particularly value-added manufacturing. There are a number of operators in the province in that situation now, Mr. Chairman.

By going along on a bid-proposal basis and providing a five-year tenure and volumes that will permit a small enterprise to get on its feet and become economically viable, we believe that we will be able to overcome a great deal of the so-called surrogate bidder syndrome. We are paying very close attention to other participants in the small business program because I have a concern too. I'm in a position to do something about it, and I'm doing something about it.

Forest inventory is a very important aspect of our ministry. In the previous year's budget — which wasn't my budget; it was my predecessor's budget — there were inadequate funds for building that inventory information that is so necessary in determining a fair and equitable appraisal system. We need much better information on tree taper, tree

[ Page 4740 ]

condition and on external indicators of decay and defect, and we'll be building that information through a substantial increase in the forest inventory budget. We'll be working to improve the fairness of the comparative value pricing system and the equitability across the province.

There are a number of factors that impact. Some of the factors that impact on those areas experiencing high levels of appraisal are ready accessibility, timber size, timber length, species and condition. Those sales that have been recently advertised in the Bums Lake area are all high-value sales, and a comparative value pricing system reflects that.

The member for Omineca states that he would rather debate all by himself in Bums Lake than debate in the House. I don't know what that accomplishes for his people. It seems to me that the responsibility for that member is here — not out and around.

The small business enterprise program is referred to by the member for Prince Rupert as a great revenue generator, and it is, as long as there is still the marginal opportunity supply in the log market. As soon as it becomes the major supply, then it will drop substantially. The greatest portion of the revenue generation from the small business program has been bonus bidding, and that is opportunity cost. We're interested partly in seeing an opportunity. They'll go after what they think they can afford to pay for the wood. That only happens as long as it's a marginal supply. As soon as it gets into the mainstream of supply, that will drop off.

The member for Prince Rupert was concerned about the level of cuts in 1987 — the cut control year as a calendar year. In the calendar year in 1987, the AAC was greater than it was in 1986, and that's because of a market opportunity. The cut control program in the province is plus or minus 50 percent in any one year and within 10 percent in a five-year period.

That reflects the cyclical nature of the forest industry. As our friends in agriculture say: make hay while the sun shines. When the markets are strong, there's an opportunity there for increased employment and increased revenues. That was seized upon in 1987 by the industry as a whole, from the smallest operator to the largest. In the not-too-distant future we'll see a downturn in the cycle. It's been established over the years — over the centuries actually — and the allowable annual cut will be balanced off on a five-year basis.

[11:00]

MR. MILLER: I intended to head in a certain direction, but I want to deal with the TFL issue now, and I may deal with it later as well. I neglected in my opening remarks to deal with it.

The minister's trip to the Scandinavian countries has reinforced the notion in his mind of somehow trying to achieve the level of private ownership, or an approximation of private ownership, that exists in the Scandinavian countries, and somehow that will automatically translate into an improvement in the industry in British Columbia. I just don't think it works.

The operative word in terms of the Scandinavians — the minister used it himself — was small; "small woodlots," I believe he said. If there's anything that's been a problem in British Columbia, it's the concentration of cut in the hands of relatively few companies. In addition to large companies having control of cut, there is intense concentration in the industry in British Columbia which is growing. As that comes to a peak, we find more and more.... The minister is now proposing that 69 percent of the AAC in this province be controlled by the major licensees. I don't have the exact figures in terms of what the level of concentration might be once that process has been completed, but I would suggest that it's going to be quite high.

One recent study that I read referred to an oligopoly in the level of concentration in the industry in British Columbia. If the minister is saying that's a solution for the forest industry in British Columbia, then I reject it. I don't know what evidence he uses to support that. Certainly the major thrust in forestry in terms of the TFLs, which were intended to give large companies the kind of security that they said they needed to build the large processing plants — and, quite frankly, most of those were the pulp mills.... That was the premise on which the Crown alienated vast tracts of land: the return to British Columbia was worth it, in terms of the kind of industrial enterprises that would come out of that. It has been a major disappointment. If that was successful, why are we dealing now with this radical change to forest policy? Obviously, there were serious flaws in that.

The companies who acquired those vast tracts of public resource did not perform all that well. There have been reports written about the level of capital investment — for example, on the coast in terms of the pulp mills — and the fact that there really was not the kind of investment required, that year-by-year investment needed to keep pace with technology and with our competitors. We just rolled along. For years we cut in the sawmill industry. There wasn't the intense pressure to renew the operations, to apply advanced technology. We cut that dimension lumber and made money at it. Why should we? The resource was pretty cheap. The Crown really didn't charge too much. The Crown didn't really impose or carry out any reforestation obligations. So where was the incentive for people to be more efficient producers? If you get something free or if you get it pretty cheap, then you don't appreciate it. That's a dictum I always hear coming from that side of the House.

It appears to me that the minister is simply proposing that we continue along the road that was initiated back in the mid to late forties, in terms of alienating additional levels of Crown timber with the hope that the people who acquire it will do the right thing. If you wanted to be innovative, what consideration has been given to small woodlot licences? If they work so well in Sweden, won't they work here? There's serious concern about alienating 70 percent of the AAC in this province to an increasingly concentrated.... And I don't throw the term multinational out all that much. I think it's enough to say that large pieces of the industry are controlled from offshore or from outside of British Columbia. British Columbia has responded in quite a real way to the former Premier saying: "M&B, B.C. is not for sale". There was something there. They responded to that. Well, it has been sold. It's being sold more and more every day.

So that's dealing with the whole question of TFLs, and I'll be getting into that again. I laid out a logical progression to make it easier for the minister to respond to my questions on his operation.

I want to go back. It's a small item and we needn't spend a lot of time on it, but I asked the minister a pretty straightforward question, and he gave me a non-answer. If he can give me a straightforward answer, that's fine. I asked you why there was a 45 percent increase in your office budget. You said it was for an FTE. I asked you why there was virtually a 100 percent increase in STOB 30, and after stumbling around and looking at 3 and finally coming to 30, you stood up and

[ Page 4741 ]

confirmed that STOB 30 is $20,000. I ask you why. Does the one FTE require an additional almost $20,000 to operate? What kind of function is that FTE undertaking? Are they tied together? If the minister could respond to that, we'll get on to more important matters.

Interjection.

MR. MILLER: Do I have to tell you what a STOB is? You have to look in front of the supplementary budget book. It's that column with a little number — it goes 1, 2, 3, 6, 30, etc.

HON. MR. PARKER: The STOB that the member is referring to is one that covers office expense and not salaries and benefits. So that's my answer. My previous answer stands. That is our best estimate of supplies for the office for this fiscal year. We were severely underfunded last year because of the rollover from Lands, Parks and Housing to Forests and Lands. The number last year reflected a very small ministry.

Now the ranting we've heard about tree-farm licences. We're looking to moving to about a 67 percent level of the provincial allowable cut under tree-farm licences, and they are not all major licensees. These are very small licensees. I guess Dunkley Lumber would be very pleased to be referred to as a major licensee, but they happen to be a tree-farm licensee in the Prince George area, midway between Prince George and Quesnel. They saw an opportunity to improve forest management on their operating area, and were prepared to put those investments into a tree-farm licence, with the knowledge that they would be able to harvest in that geographical area.

The situation in Sweden is a very difficult one. The reason they are down to four hectares on average for a woodlot is the inheritance of land. It has to be divided up among the heirs. Apparently their government restricts sale to corporations. So it more or less stays within the family, and the family gets pretty extended after awhile. You get down to very small holdings, which are very difficult to manage because they are less than economical. We were told on our trip of instances where that socialist government in Sweden impacts so severely on individuals in that country that those who had harvested mature timber from their woodlot were taxed so severely that their entire income from their regular source of employment was taken. Their income from the sale of land was taken, and they had to sell the land to make up the balance. Sweden has some marks against it.

In our woodlot program in British Columbia we are considering holdings up to 400 hectares, and seeking proposals from interested people who wish to manage a woodlot and from those adding their own lands to that Crown land base for the woodlot. The woodlot program is part of the small business program. We're looking to double the amount of the small business program in the province. So the woodlot program will similarly be doubled.

I like a woodlot licence philosophy because it gets the individual really interested in sustained forest management. You can't beat personal commitment. The act provides for corporate ownership of a woodlot, but you have to be under pretty well the same policies as the small business operator. You can't be a holder of a renewable tenure or a significant shareholder in a business that has renewable tenure. That allows outfits like the John Howard Society in Vernon to have a woodlot they use in their rehabilitation programs. It also helps, to a certain extent, with their funding — any revenues they're able to gain from it.

So the woodlot program's a good one. We appear to be on the right track in British Columbia. The advice we had from the officials we met with in the Scandinavian countries agreed with us.

MR. MILLER: It's remarkable that the minister likes to use the word "socialists" in the negative vein. That's fine — I understand the politics of it. But I don't know of a Forests minister who hasn't made the Mecca trip to the Scandinavian countries to see what they're doing over there. Quite frankly, despite the minister's criticism of the impact on individuals, they have been remarkably successful. Simply taking a dogmatic line generally doesn't get you anywhere. So I hope you learned something useful over in the Scandinavian countries, Mr. Minister — apart from criticizing them as socialists.

I want to move into other parts of the ministry's operations, but before I do.... It seems to me that the major thrust here is the whole push toward privatization of function. We're seeing it in this ministry to a remarkable degree. For example, the minister indicated that all of the increased activity — in fact, maybe all of the activity in the small business forest enterprise program — will be done by consultants. I'll just quote from the 1984 "Forest and Range Resource Analysis" — page 114, or page 14 of part 1; I'm not sure of that particular reference, but we can get that straightened out:

"Many believe that better solutions to a wide range of problems lie in both industry and government having management responsibilities, rather than industry being solely responsible for meeting performance standards and government acting in the traditional role of regulator.

"The distinction between regulator and manager is not an academic one. The government as regulator is seen to be reactive and policeman-like, dependent on legislatively defined standards, rules and penalties to enforce specified performance. In contrast, government as manager is seen to be co-venturer with the private sector, with its main responsibility being to ensure that various public interests are served in the management of natural resource developments."

[11:15]

Maybe there's been a change, and the minister can advise if he feels there has been a change, that calls for the government — in this case the Ministry of Forests — to be quite proactive. The minister said his ministry is proactive and yet — and I'll go through some of the numbers — it would appear that increasingly there is a trend in management of the Forests ministry to have private consultants do a lot of the management or administrative functions that were normally carried out by the ministry and to move the ministry more and more into the function of simply being the auditor, the paper-pusher.

There are some serious problems with that. It seems to me that one of the most valuable things that you could have in a ministry is the understanding and detailed knowledge of the ministry that you are operating or the industry that you are responsible for. If we move more towards the ministry staff simply being desk-bound paper-pushers — specialists in drawing up contracts and making sure the numbers are right — we really lose something in the ministry.

[ Page 4742 ]

I apply the same argument to any other ministry of government. If we are going to contract out, for example, the maintenance, the snowplowing, or whatever, in Highways, it seems to me that we end up eventually with simply people sitting at a desk somewhere whose only job is to make sure that the contract is drawn up properly, and he will lose that hands-on experience.

Going through the harvesting section of the minister's budget, there have been some fairly significant changes in some of the numbers. I wonder if the minister would just take the time to respond to some of them. For example, the total salaries and benefits under that section have been reduced by $6.7 million. Under STOB 20 — professional services — we see an increase of about $750,000, with a decline again in total operating costs of almost $2 million. Is that indicative of the trend that I've just talked about, and would the minister comment on that trend?

HON. MR. PARKER: We are reduced in numbers. We had a number of people take early retirement, and we have been reducing the number of FTEs required in the ministry as a result of analysis by peer groups of operations within the ministry, so we see a slight drop in the salaries and benefits. We also see a certain increase in the contract field, if you will. As we see a specific project that needs to be addressed, we will hire somebody who is very expert in that particular aspect and have it properly done. The project is administered by our staff; the contract spec is set up by our staff; the project is monitored by our staff; and the report is received and appropriately implemented by our staff.

The people of British Columbia are pretty versatile and adept, and I guess it doesn't matter if there is a provincial crest on their paycheque or their own crest on their paycheque. They are still quite capable of carrying out their duties and responsibilities very effectively, and we continue, as the Ministry of Forests and Lands, to monitor, to order, to supervise, to analyze, and to assess; in short, to administer properly the forest resource in British Columbia.

MR. MILLER: I agree that most people don't care what crest is on their cheque, but they do care what amount the cheque is. As the government — not just in your ministry, but in all other ministries — moves to privatize these administrative functions, you will find that the people who pay probably the biggest price are the working people, who will get a much lower cheque, and it won't have the government crest on it.

The minister didn't deal with the movement that I talked about. Maybe it is somewhat philosophical, but does the minister not agree that over time, given the direction of having consultants do basic work that was formerly carried out by the ministry, you lose that hands-on experience? The minister has worked for forest companies. There's a heck of a difference between a manager who knows the woodlands and gets out there and knows the operation and has worked in it, and somebody who comes in who hasn't got that experience. I've experienced those kinds of management, and they've been failures. The minister should be aware of some of the major failures. He worked for some of those companies up in the northwest who were not good and don't have a good reputation because they had people trying to run a pulp company who were more interested in oil and gas and things of that nature.

Don't you have any concern that as the ministry loses the expertise, the hands-on knowledge, you will eventually be at the whim of those consultants? You'll end up with a bunch of paper-pushers.

HON. MR. PARKER: We in the ministry carry out those duties and responsibilities that we're able to carry out, but when we want to increase a program, increase delivery of service, we'll seek experts in the field to assist us for the short time we need their assistance. The value in that is that we are using expertise that continually develops in that particular aspect of the field.

Our staff are in the field a great deal, and they have to be to understand the nature of the business. We have 45 forest districts in the province, and they're very diverse. The only way you know how to deal with the diversity of your district is to be on the ground, and our staff are on the ground. They are frequently hands-on in supervision of contract forces, temporary employees and permanent employees of the Forest Service. They have a good feel for what's going on.

The advantage of using outside help from time to time is that you can hire the particular expertise you need for that particular project and be sure that it's being done by some of the best people available. That's important. It has served the Forest Service well, and it's serving the people of B.C. very well.

MR. MILLER: Does the minister not agree that that expertise should be retained in the ministry? That's vitally important. If the expertise is not maintained in the ministry, then when you're dealing with those experts out there who are consultants, you lose control.

Under silviculture, and before I leave harvesting, would the minister explain STOB 97, the $16 million recovery figure: recoveries from within government, interministry charge-backs. If I'm not mistaken, that has increased considerably. It may be a different method of allocation in the book, but it seems to me that $16 million is going to be collected from other ministries. If I look at last year, the only recovery under 97 was $125,000, and we're moving to $16 million. Can the minister advise where that money is coming from, which ministry it is coming from, what the paybacks are for, and what the recoveries are from these other ministries?

HON. MR. PARKER: The $16 million is transferred over to the harvesting function and into the small business function.

Just to go back to the member's discussion about retaining all the expertise in British Columbia in the British Columbia Forest Service, that would be an amazing accomplishment by anybody, I would say. We have a good level of expertise in the Forest Service, and we think we have a very good balance. When we need a little extra help, we take it on a temporary basis. That way there is some expertise in the private sector that we can export around the world, and we do that. British Columbia has a worldwide profile, not only in forest products but also in forest technology.

We've been able to help a great number of Third World countries in developing forest policy, operations and inventories. That comes from that same expertise that we hire from time to time in the Forest Service. I think that's a good balance for British Columbia, and it reflects very well on the business acumen and the management ability of the people in the British Columbia Forest Service.

MR. MILLER: I didn't suggest, Mr. Minister, that all of the expertise in British Columbia be retained within the

[ Page 4743 ]

ministry. But certainly if you don't have the understanding of it, you will eventually be divorced from the people who do the work, regardless of what you say.

[Mr. Pelton in the chair.]

I just wonder if the minister can confirm on the small business program.... I heard an interview with you on CBC where you said that all of that administrative work would be done by consultants. Is it going to be all of the work? Is there going to be a transfer? Is the work normally done by the ministry, in terms of the small business program, now going to be totally fanned out to consultants? Is it going to be part of it? I'd like to hear the minister elaborate on just how extensively consultants are going to be used within the ministry, maybe with particular reference to that program. Just what increased level of use of consultants do you foresee in your ministry?

HON. MR. PARKER: The member quoted from a clip from the CBC. Part of the problem we have with the CBC, of course, is that they do like to clip.

MR. MILLER: The Premier says it's the only good one in B.C. You'd better get it straight there.

HON. MR. PARKER: That's the Premier's opinion. I have strong reservations on the CBC. In my mind, there's nothing like the private sector.

Notwithstanding that, the level of contract services in the small business enterprise program, as in other aspects of the administration of the British Columbia Forest Service, we've done in balance with the forces we have. If we want to increase one segment, or one facet, we will probably hire outside help to assist with that specific project, for the period of time that we need it done. As I said before, that will be set out and supervised by the Forest Service, the reports will be received by the Forest Service, and policy and action will be taken by the Forest Service accordingly. We have a balance of expertise in the Forest Service now that we'd like to maintain, but from time to time, if we want to accelerate some programs and deliver a little better service, more opportunities in forest licences or timber sale licences, we'll do that with contract forces, as I've outlined before.

[11:30]

MR. MILLER: There's nothing like the private sector. I see the minister abandoned the private sector to get into government.

MR. KEMPF: That will be short-lived.

MR. MILLER: It might be short-lived, according to my colleague from Omineca.

I listened carefully to what the minister was saying. I don't know whether it was an attempt at obfuscation or whether there was actually a kernel of.... I'm not going to say truth, because that's not what I mean. Is the minister saying that the additional 8 percent, the move from 7 percent to 15 percent on the small business program, is going to be managed, all of it, totally, by consultants? That's a pretty simple, straightforward question. Is it going to be the entire 15 percent? How much of the work that used to be done by the ministry is now going to be done by consultants?

HON. MR. PARKER: It depends on the demands of the day as to the amount that is done by consultants. The shift of silviculture responsibilities is to the licensees, as we've established in previous legislation. The shift of staff within the Forest Service into new fields, including the small business program, means that we have redirected internally a number of people to the small business program. We see a bump in staff from that standpoint, not an addition to FTEs, but a change of duties internally.

As we want to increase from time to time the amount of sales or the amount of silviculture activity, if we can't deal with it internally we'll hire contract forces and consultants and whatever is necessary to do the job right. That will continue to be administered by the people in the Forest Service in a very responsible way, as they have to date.

MR. MILLER: Previously, Mr. Minister, you stated, I believe — you can correct me if I misheard you — that by the end of the year you had intended to achieve the move to 15 percent on the small business side. I believe that was your statement earlier.

HON. MR. PARKER: By the end of next year.

MR. MILLER: By the end of next year, 1989. Given the current state of the ministry, do you anticipate that the bulk of that work would be done within the ministry, or will the bulk of that work be done by consultants?

HON. MR. PARKER: The work will be balanced according to the needs of the staff and the administrators within the Forest Service.

MR. MILLER: Can the minister not give the House his own estimate? He knows the ministry well, I assume. His deputy is there. Can the minister not, given his tenure thus far as the Minister of Forests, give the House some indication of the amount of work on this one particular program that he anticipates or that his ministry anticipates will have to be farmed out to consultants as opposed to being done within the ministry?

HON. MR. PARKER: The member knows full well that the legislation has been introduced to deal with an increase in the small business program, and out of that will emanate the regulations and the procedures and the policies. He knows that. That's a procedure, and in the fullness of time — as is the wont of some of my colleagues — he'll have a pretty good idea of what will be in-house forces and what will he contract forces. Until we have completed the legislation that is before the House now, we can't very well set policy, set the regulations and determine the precise workloads.

MR. MILLER: To the minister who prefers the private sector, I would anticipate that if you're going to introduce legislation you have some idea of what it's going to do — what the impact's going to be in your ministry, what the cost is going to be, how it's going to be carried out. Is the minister saying that he's not in a position to advise the House about those pretty fundamental questions? If you're not, I suggest maybe you take the legislation back and do your homework before you bring it before this House.

"The fullness of time." Here's a guy from the private sector who's quoting Pierre Trudeau. All you quote is politicians

[ Page 4744 ]

Is the minister unable to advise the House on a simple, basic question that I asked him relating to part of the operation of his ministry?

HON. MR. PARKER: Until we have the programs in place, we will continue to work with the forces that we have in the Forest Service. Should we need assistance in any extra work, we'll hire it from time to time.

MR. KEMPF: On that subject, let's make it just a little easier for the minister. Perhaps we can make it much easier and reduce it to a multiple-choice question. Given the direction in which you're taking the ministry — and perhaps you're going to have to ask for an adjournment and ask this of the Premier — and given your understanding of the direction of the ministry, will the B.C. Forest Service responsibility be reduced in the next few months, and will that responsibility be taken over by private consultants? Yes or no, Mr. Minister?

HON. MR. PARKER: Mr. Chairman, we don't abrogate our responsibility whatsoever.

MR. KEMPF: Mr. Chairman, what kind of answer is that? It's the same kind of answer that this House has gotten from that minister ever since he took the position. You have that responsibility to the some 4,000 people working under you, Mr. Minister. Will the responsibility of those people working in the B.C. Forest Service out there be taken over by consultants, given the direction in which this government — possibly not you, Mr. Minister; I accept the fact that it's very difficult for you to lead anything — is taking the forest industry? Will the B.C. Forest Service responsibility, and consequently the staff, be reduced? Yes or no?

HON. MR. PARKER: In simple language, for the member for Omineca, the responsibility of the Forest Service will not be diminished.

MR. MILLER: It's remarkable that we've tried to get some answers from the minister.... I hope this isn't going to be the way you intend to conduct your estimates; it might make them a trifle longer than we'd anticipated. There's nothing like being straightforward. I thought that was a feature of the private sector, that they like to be straightforward. Governments like to obfuscate, but maybe you're learning quickly. Maybe you'll never go back to that private sector.

How many employees were lost to the ministry under the early retirement program? I wonder if the minister could advise which sections of the ministry they came from, and whether or not there was any impact on the operation or the capability of the ministry. Could the minister briefly advise the House about that?

HON. MR. PARKER: There were 217 employees who took advantage of the early retirement opportunity. They came from right across the whole Ministry of Forests and Lands. Any time a person retires, he takes his special knowledge with him. What has happened is an opportunity for younger members of our staff to show what they're capable of doing and to move forward into the responsibilities vacated by those who took early retirement. It's working very well. I'm very proud of the Forest Service and the executive who saw fit to staff all levels of our ministry with very capable individuals.

MR. MILLER: You lost 217 people, and I assume that those people, in order to qualify for the program, were fairly senior. They had been in the ministry for some length of time and had developed a fair level of expertise. Not to be critical of the opportunities, but the minister is saying that the loss has not diminished the capacity of the ministry to do its job. Has any of the work formerly undertaken by those people been contracted out? Or have you simply replaced the missing staff with these new young people, as you referred to them?

HON. MR. PARKER: Younger people, Mr. Chairman. No, to the best of my knowledge, none of those positions has been contracted out. The retirees came from all levels of government. I was able to attend the retirement functions for folks who had spent a great deal of time in the clerical staff of the ministry and also those who were in the senior management. So it's quite a cross-section. It has opened up opportunities for younger members, men and women alike, in the Forest Service to move ahead.

MR. MILLER: I just wanted to be clear on that. The positions, then, were refilled by younger people from within the ministry. Is that what the minister is saying?

HON. MR. PARKER: As the member for Prince Rupert, who has been a long time member of a bargaining unit, is aware, there are procedures for filling a lot of those slots, and those procedures are being followed.

MR. MILLER: He'll never give a straight or simple answer when a non-answer will do. Is it the intention of the minister or the ministry to refill those positions? You may be in the process of doing it. If you are, that's fine. Just tell me: are you filling those positions?

HON. MR. PARKER: I guess we're filling most of them. There might be the odd position that has become redundant, but for the most part we're filling them, and we have to fill them through process. The employees are in a bargaining unit, so we have to follow the process.

MR. MILLER: One of the things I appreciated when I was a member of the bargaining unit for my union was sitting across the table with somebody who gave me straight answers, because I found that that really made for a better bargaining session. Everybody knew where they were and we got some straight answers; they were out on the table and we were able to deal with them, instead of this running around in circles about the fullness of time. Would the minister simply explain to the House whether he intends to fill all of those positions or some of those positions — how many — and how long it will take? Let's get some straight answers on the floor here, Mr. Minister.

HON. MR. PARKER: As I said a few minutes ago, we will be filling most of those positions. A few may have become redundant; I'm not sure how many. If the member would listen, it's a very straightforward answer. It's in the Blues. Perhaps he can catch it if he reads it or has somebody read it to him.

[ Page 4745 ]

[11:45]

MR. MILLER: We now know that most of those positions will be refilled.

AN HON. MEMBER: Boy, it took you a long time.

MR. MILLER: It took a long time.

With regard to the loss of personnel and the move more and more to privatize the functions of the ministry, I would draw the minister's attention to the Thomson report, which he is familiar with, and the criticisms that are contained in that report with respect to the ability of the ministry to effectively carry out its job. Thomson was quite critical in his report and made some recommendations with regard to staffing levels. Could the minister advise whether or not he simply rejects the recommendations that Thomson made with regard to staffing levels and, if so, on what basis?

HON. MR. PARKER: No, we don't reject the recommendations of the Thomson report. The particular Thomson report that the member is referring to is the one done by T. M. Thomson and Associates on MacMillan Bloedel's TFL 39 in the Queen Charlottes, and specifically one of the cutting permits. We certainly accept the recommendations. The member should also bear in mind, as should everyone else in the House, that the analysis was done on the basis of harvesting for 1986 and earlier.

The staff situation in the Forest Service is being realigned to deal with the audit function that we now fulfill under the terms of established legislation and legislation that was introduced this morning, and in-service training is being prepared to ensure that our staff fulfill their duties well in an audit function.

MR. KEMPF: With respect to the question of waste and that which in the industry is being used for a purpose that is not acceptable, will that audit include, Mr. Minister, an audit of what quality wood is going through coastal pulp mills in British Columbia?

HON. MR. PARKER: The audit function, Mr. Chairman, is one of determining performance vis-à-vis the mandatory preharvest silviculture plan. The PHSP is the performance measure. So that's what we audit. It is not the intention of the preharvest silviculture plan to assess what goes through a pulp mill on the coast.

MR. KEMPF: To the minister. Do you accept what is presently being utilized, as far as quality is concerned, in coastal pulp mills?

HON. MR. PARKER: Mr. Chairman, the Crown timber pricing sets a fair return to the people of British Columbia. If an operator sees fit to pay a high price for timber and to put it into what the member for Omineca thinks is a low-value end product, that's a decision that the business manager has to make. If you're going to take a high-cost raw material and put it into something that's less than economic, that's a decision you have to make. If you're going to take a high-cost raw material and put it into something that is of great economic value, that's a business decision. Those business decisions have to be made based on the opportunities at the time and on what's facing those in management positions at that particular time. However, regardless of whether it goes for firewood or for plywood, we charge a fair price, and the individual has to make up his mind whether or not he's going to take that same material and put it into a low-value end product or a high value end product. It's a business decision that has to be made by a business manager at a particular point in time.

MR. KEMPF: Can you then, Mr. Minister, tell me what Skeena Cellulose paid the Crown for the wood that was viewed by the Select Standing Committee on Forests and Lands that was going through their pulp mill, through their wood room, on our visit to Prince Rupert to hold hearings?

HON. MR. PARKER: Mr. Chairman, clearly the member for Omineca is quite pleased that I reinstituted the Select Standing Committee on Forests and Lands and made it possible for that committee to go throughout the province and hear the issues on contract logging agreements, because it has afforded him an opportunity to see a number of operations and to have an appreciation for the diversity of the forest industry of the province.

As to the precise stumpage charge for the logs that the member for Omineca saw going through the plant the day that he was there, it would be very difficult for me to identify. I imagine it could be done if I asked the mill management to try to source that. That mill at Prince Rupert offers a substantial market to the small business logger, as well as other major licensees on the north coast, as a repository for their pulp grade material. Whether the wood the member for Omineca saw being processed the moment he happened to be there is sourced from licences held by Skeena Cellulose I don't know. Perhaps he could advise me whether he knows, and then I could probably identify and find out what the stumpage rate was on that particular material.

MR. KEMPF: I can assure the minister that the material going through on that particular day should never have been going through a pulp mill in British Columbia. Not only was it much better than pulpwood material, it was probably some of our best saw log material in the northern part of the province.

I understand it's not possible for them to do so now, but will the minister authorize his staff in Prince Rupert to carry on a continued audit of what is going through that particular wood room?

HON. MR. PARKER: The pricing of Crown timber in the province was discussed earlier today. It is clearly set forth in the comparative value pricing system. That information was circulated to all members of this House last fall.

The member for Omineca has been shouting at me this morning about being too high, being unfair, but it's exactly the same system that's used for everybody in the province. That makes it fair. The price of timber in the province has gone up substantially, and all members of the House know that because they have heard from various constituents their concerns about the level of pricing of Crown timber — which we in the ministry think is a reasonable number. There are some anomalies in the industry because the province is very diverse in the forest resource. We're dealing with each of those anomalies as they come forth, and we're working proactively with the licensees, the ministry and other interested and affected par-ties in dealing with those anomalies.

The price of timber has gone up substantially in this province. The estimates show the level of revenues we

[ Page 4746 ]

expect. Whether or not an operator decides to run a stick through his sawmill or a pulp mill or a plywood plant or a firewood-processing yard, that's his decision when he's dealing with a high-cost or high-value resource. It's not my intention to have any of our ministry personnel audit on a regular basis what grade of log is going through what processing plant.

MR. KEMPF: Not to belabour the subject, Mr. Chairman, but is the minister telling this House that he's not concerned that quality sawlogs are being utilized in British Columbia for the purpose of making pulp? You know, the minister speaks as though there is no tomorrow, there's no shortage of fibre in British Columbia. Well, I've got to tell the minister that's not correct. There is in fact a shortage of fibre in this province.

But that's not the issue. The question is: is the minister telling the House that he's not concerned that prime saw log material is going through a pulp mill, as seen by the standing committee? Yes, we're happy to be touring this province. We only wish that our purview to look into some of the real problems in the forest industry were expanded. Is the minister telling this House that he's not concerned about prime sawlogs going through a wood room for a pulp mill in British Columbia?

HON. MR. PARKER: Mr. Chairman, no.

MR. MILLER: Well, we've opened up some new fields. I want to go back — because we only have about three minutes before we adjourn for lunch — and deal with.... I started to talk about it, and I'm going to get back to the issue that the member for Omineca (Mr. Kempf) was discussing.

I dealt with the Thomson report briefly in terms of its recommendations, and I would remind the minister at the outset of this set of estimates that he expressed extreme confidence in the private sector: "I'm the private sector guy. I like the private sector. I like the way they do things." We've seen, as we've gone through the early discussion of the estimates, that more and more the minister is shifting the management and administration of the ministry to consultants, to the private sector.

Here we have the private sector, a consultant, whom the minister has expressed this strong confidence in. That's his personal.... "I like the private sector" — I heard the minister say that. He has strong confidence. We see the ministry moving in that direction. Let me read you what the private sector, the consultant that you have so much confidence in, had to say. The report notes that the Forest Service has inadequate staff and trained personnel to effectively manage forest industry operations. It recommends more trained staff at the district level. How can the minister reject that recommendation of this private consultant whom the minister has expressed all this confidence in?

HON. MR. PARKER: As I mentioned earlier, we are taking the recommendations of the Thomson report on TFL 39 to heart. We have moved the responsibilities for forest renewal to a free-to-grow state to the licensees, thereby lifting a great deal of those responsibilities from our Forest Service staff, enabling them to move into the audit function. As I mentioned before, we are presently building the in-service training program to make sure that our staff are effective auditors vis-à-vis the preharvest silviculture plan in each of the licences that is now mandatory in the province.

The member also mentioned that we are moving more and more into passing the responsibility and management function onto the private sector. That's incorrect. The responsibility for the management of the forests of British Columbia rests with the Forest Service. As to who does the specific tasks from time to time, that will be determined by the staff. They may be Forest Service personnel and they may be outside consultants.

MR. MILLER: I have more to pursue on this, Mr. Chairman, but I move that 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 12:01 p.m.